This dissertation argues that stormwater management is fragmented both at that vertical fragmentation (at the level of intergovernmental relations) and horizontal fragmentation (within the level of governments). The first essay focuses on the institutional arrangements used by states to implement stormwater management policies. Building on the race to the bottom literature, I examine the impact of the institutional arrangement centralization on state water quality in California, Texas, Virginia, and Minnesota. A five-year (2013-2018) permitting cycle was used to analyze five dimensions: formalism, coercion, education, prioritization, and accommodation.There is an inverse relationship between the quality of stormwater and the degree of centralization in the institutional arrangements adopted by state governments to implement their stormwater management policies. The second essay focuses on a local government's decision to join an inter-local agreement to comply with federal/state stormwater management policies. Building on the transaction cost framework, the study used a cross-sectional design to analyze a case study. The case study consists of 119 cities subjected to stormwater regulation requirements in northern Texas during 2017. The dependent variable is the membership of the regional inter-local agreement, and the independent variables are the number of neighboring cities and population density. Community wealth, public works spending, stormwater fees, government type, and the percent of the population over 65 were used as control variables. Logistic regression was used for data analysis. This study concludes that the increase in the number of neighboring regulated local governments is associated with an increase in the likelihood of a decision by the regulated local government to join an interlocal agreement (ILA), as well as finding that an increase in the population density is associated with an increase in the likelihood of a decision by the regulated local government to join the ILA. In addition, the study found that the type of government also affects a decision to enter into a cooperative relationship to meet the regulative burdens associated with implementing the stormwater management policies imposed by state/federal governments. The results found in this dissertation contribute to bridging the gap in our knowledge on the impact of the institutional framework adopted by the states to implement environmental policy through empirically evaluating the effect of institutional arrangements (as represented in the States general MS4 permits) on the policy output (reducing the level of stormwater pollution).