Breaking bad: When does polycentricity lead to maladaptation rather than adaptation?

Abstract Polycentric governance structures are often touted as part of the solution to overuse and degradation of natural resources. In theory, when multiple, overlapping decision centers work independently and in coordination, they contribute more than either monocentric or atomized governance arrangements to ensuring robust, adaptive social‐ecological systems (SESs). However, the degraded state of many municipal drinking water systems demonstrate Vincent Ostrom's observation that multilevel governance structure alone does not guarantee increased functionality. Two U.S. case studies drawn from opposite ends of the SES performance continuum provide insights into the differences between structural and functional features of polycentricity and the cross‐cutting conditions under which these features lead to adaptation or maladaptation. New York City's water system has served as an international model of sustainable, collaborative governance for several decades, whereas Flint, Michigan's water system achieved notoriety for a tragic string of errors and a pattern of neglectful governance in the mid‐2010s. Through process tracing, this article analyzes the pathways that began from a shared governance structure of polycentric federalism to starkly different decisions and outcomes in the two cities. The results highlight the dynamic and interactive nature of polycentricity, including how it can be functionally disabled when key factors converge across levels and scales: these include norms of quiescent rule enforcement, incentives that favor blame avoidance over problem solving, persistent power imbalances, large wealth inequalities, and deficits of social capital and leadership.