3. The establishment of rules

MODULE 2b

The establishment of rules is a social practice that attempts to reduce the complexity of discussions, decreasing the uncertainty surrounding the behavior of others, but rules should be previously known and interpreted in the same way by actors.

The incentives to negotiate cooperation agreements depend in a large extent on the agreed rules or the legal-institutional framework of the system, but excessive rigidity can discourage actors that require more flexible contracts for their participation.

In any case, there are five basic areas whose configuration configures the normative framework of the cooperation system:

Entry and exit of actors:

The rules of entry and exit determine which actors take part in the game of the cooperation system. That means defining the inclusion of actors or their exclusion, and therefore define the incentives to sharpen and stay in the system. When only a few actors are in control of these entry and exit rules, they can exclude actors from the benefits of the cooperation system or from decision-making, which can lead to acute conflicts and even precipitate the end of the system.

Relative position of the actors:

These rules refer to the power that the actors have within the cooperation. The power of an actor derives from its access to resources, prestige, communication capacity, convening force, or technical capacity, among other sources. Position rules can reinforce or balance the power of the actors.

Interaction between actors:

The rules of interaction structure the exchange between the actors of the system with respect to the flow of information for the access and exchange of knowledge, coordination or negotiation. However, its greatest importance is to create trust among the actors: the lack of transparency, the retention or manipulation of information, the unequal distribution of benefits and restrictions on communication, mark differences and imbalances that are difficult to remedy.

Decision making:

The more resources and efforts are invested in cooperation, the more important it is to define the procedures to make decisions since these rules guarantee the transparent distribution of benefits according to the contributions of the actors.

Implementation of agreed actions:

Once a decision has been made, the rules of implementation determine the distribution of responsibilities to carry out the agreed tasks, as well as the benefits, rewards and sanctions related to compliance.

From what has been said previously some consequences for the practical configuration of the informality or formality of rules in a cooperation systems can be considered:

On the one hand, defining and regulating everything can promote trust, but in the end it negatively affects the creativity, flexibility, motivation and evolution of the cooperation system.
On the other hand, considering that trust is an essential component of cooperation, that leads to think about the role of the institutional framework in fostering mutual trust between actors. The risks of informality in a non-specific institutional framework can only be replaced by an increase in interpersonal trust.

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