Why the path to polycentricity matters: evidence from fisheries governance in Palau

Polycentricity, a complex form of governance characterized by multiple centers of semiautonomous decision-making, has been embraced by commons scholars for the governance of complex natural resource systems. In this context, several benefits are commonly ascribed to polycentric governance systems, including enhanced adaptive capacity, mitigation of risk and provision of good institutional fit. We examine the functioning of a polycentric governance system through a qualitative case study of the governance of small-scale fishing in the Northern Reef region of Palau where fishery resources have been declining in recent decades. By engaging a theoretical model of a functional polycentric governance system, we identify deficiencies in institutional features that partly explain why functionality is not fully achieved. Analysis of the historical transition of the governance system from community-based to polycentric reveals that the path to polycentricity and contextual conditions constitute additional distal explanations of deficiencies in functionality. The findings suggest that transitioning from community-based to polycentric governance risks producing conditions conducive to crowding-out and erosion of rule compliance where the form of polycentricity assumed entails primarily higher-level government decision-makers with insufficient capacity for rule implementation. The case underlines the need for more refined theory concerning the emergence and functionality of different forms polycentric governance systems in various contexts.