Research on the outcomes of diverse institutional arrangements for governing common-pool resources (CPRs) and public goods leads to the development of a new theory to explain phenomena that not feet in a dichotomous world of “the state” and “the market”. Humans have complex motivational structures and more capability for resolving of social dilemmas than the theory of rational choice examines. The establishment of institutions that constrain (or nudge) the self-interested individuals to…