Contextual Design: Existing International Institutions and New Transnational Governance

I offer a systematic account of the creation and design of transnational public-private governance initiatives (TGIs) in which states and/or intergovernmental organizations (IGOs) cooperate with business and civil society actors. I argue that states take into account the characteristics of the institutional context within which a new institution will be situated when deciding whether to create a TGI and, if they decide to do so, how formal its institutional structure will be. States seek to minimize transaction costs and institutional redundancies and leverage the benefits of complementarities of different institutional designs. Thus, TGIs are less likely when pre-existing institutions perform similar functions in the same issue areas. If TGIs are created, similar prior institutions incentivize states to choose low levels of formalization to benefit from the flexibility of informal governance initiatives. I test these arguments using a new dataset on 636 TGIs and 534 IGOs created in the period 1815 to 2017. The results support my expectations and have implications for the study of transnational governance, international cooperation, and global governance.