Using game theory to explain the behaviour of participants involved in a regional governance process

Starting in 2000, the NSW Government used a regional governance process to develop water management plans throughout the State. Under the process, the Minister appointed a range of stakeholders such as water users, conservation interests, indigenous interests, and natural resource management agencies to each committee, which then had to make difficult management and policy choices regarding the sustainable use of water. Several committees often worked in the same catchment, each focusing on a slightly different part of the entire water resource.One factor that affects the ability of these types of committees to operate is the institutional arrangements, or rules of operation and policies, under which they must work. Based on data from interviews and documents, this paper interprets how different participants behaved under certain sets of rules using game theory. The paper concludes by suggesting that game theory is helpful in explaining stakeholder behaviour. As such, its application may guide the development of robust operational rules prior to creating such regional governance processes.