Tracing Failure of Coral Reef Protection in Nonstate Market-Driven Governance

Institutional failure remains an important blind spot in the private governance literature. In this article we argue that a focus on scope conditions alone cannot explain why some programs thrive while others cease to exist. Studying the now-defunct Marine Aquarium Council—a certification program for coral reef protection—we adopt an institutional-process approach to fill this gap. Our main points can be summarized in a two-step argument: First, we argue that the scope conditions of private governance are partly endogenous to these processes. Through making strategic decisions, private governance programs have a certain level of control over their environment, and thus over the scope conditions under which they operate. Second, initial choices often unfold path dependencies over time. By tracing the evolution of the Marine Aquarium Council, we illustrate the program’s “mission creep” and the “vicious cycle” of self-reinforcing activity that culminated in its failure.