Action ArenasIn order to understand the complexity of interactions between actors and resources we make use of analytical frameworks. These analytical frameworks are an important tool to structure one's research in institutional analysis. They define the basic set of variables and their links for a particular research area. This does not mean, however, that they already propose causal relationships between these variables. In other words, frameworks shall not be confused with theories. They form a set of variables which has to be filled with theories. Interactions between political actors may be best understood by Public Choice Theory, for behaviour in markets Neoclassical Economics may be an adequate theory, and Transaction Cost Economics may be appropriate to study organizational forms. These theories, however, are not part of the basic framework.
Frameworks have several additional advantages. It is, for instance, much easier to compare results of different studies when these studies use a common language and share a common understanding of relationships between particular actors, the community, institutions, the physical world, and outcomes of interaction.
The most commonly used frameworks are the "Institutional Analysis and Development" (IAD) framework developed by Elinor Ostrom and the "Institutions of Sustainability" framework developed by Konrad Hagedorn.
Within these frameworks an action arena comprises actors and an action situation, which is the "social space where individuals interact, exchange goods and services, engage in appropriation and provision activities, solve problems, or fight" (Ostrom et al., 1994, p.28). The action arena is affected by the physical world, the community and its attributes, and the rules in use. Actors in an action situation can choose among various actions, depending on their information on how these actions are linked to outcomes, costs and benefits.
Actors are characterized by their preferences for actions and outcomes, their capabilities to obtain and process information, the selection criteria to decide on a particular action, and the available resources to bring into the action situation.
The patterns of interactions together with evaluative criteria determine outcomes.
The overall action arena are the people of Hyderabad in their daily life. From this broad understanding, each researcher develops his own focus action arena. This means, she identifies actors and actions situations adjusted to the particular research question. This will include an understanding of how the physical world, the community, and the rules in use affect the action arena and subsequently outcomes of interaction. How these variables are causally linked depends on the theories.
In the case of water payments in Hyderabad, for example, consumers and water authorities via one of their representatives interact when bills are issued. They are affected by the rules in use (enforcement of payments, frequency of bills, e.g. monthly or quarterly, sanctions for non-payment), biophysical conditions (quality and duration of water supply, availability or non-availability of an internet connection to deliver bills electronically, roads to reach customers personally, location of water connection, which may have an effect on the costs to cut off the connection), the community (neighbours may show loyality with the water authority or the customer). In this particular case, the delivery of the water bill is the specific action situation. Customer and representative have preferences for paying or not paying and the expected outcomes of actions. They only have limited knowledge and only limitied capacities for processing this knowledge. Customers, for example, may not know whether the water authority can cut off their water connection. The person who delivers the bill may get a brief impression of the wealth of a person when visiting his home, but may neither be able to fully process this information into an exact figure, nor may it be possible to obtain all necessary information for such an evaluation. Both interacting parties then have criteria to choose for a particular course of action. If, for example, the customers "always does what an authority wants from him" he will simply follow the orders of the water authority representative. Under these conditions, if the representative asks him to pay the water bill the customer will try do so, but may still be limited by his available resources. If the customer does not always do what the authorities tell him and she has very good personal connections to the board of directors of the water authorities (a "social capital" resource) the customer may take a different course of action. In the long run the outcomes of such an interaction combined with evaluative criteria may lead to a change in biophyscial conditions, rules, or the community and thereby may feed back into the action arena.