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This study examines the process and outcome of institutional change from a self-governing common-pool resources (CPR) model into state-reinforced self-governance. Empirical evidence is drawn from the Philippines’ experience in decentralizing the management of communal irrigation systems (CIS) to local farmers through Irrigators Associations (IAs). The field data were collected through archival research, a review of secondary documents, and key informant interviews in Sagada, Philippines. Through institutional analysis, the study confirms earlier empirical findings that self-governing bodies can work well with the state provided they do not impinge on the autonomy of resource users. However, user expectations regarding the costs and benefits of state-reinforced self-governance affect its likelihood of success. Drawing from the case study, changes in the value and distribution of transaction costs are the two biggest challenges to sustaining state-reinforced IAs. The first challenge is the introduction of membership and irrigation fees, a huge shift from the non-monetary contribution that farmers were accustomed to. The second challenge is the change in the allocation and distribution of transaction costs or, simply, who bears what cost. Further research is recommended to expand the current discourse on state-reinforced self-governance to include more in-depth transaction cost analysis.

Costly Barriers to Sustainable Institutions: Empirical Evidence from State-Reinforced Management of a Communal Irrigation System in the Philippines