This paper presents a theory of institutional change that builds upon a synthesis of theoretical insights from the literatures on group selection and socio-economic power. Based on a critical reading of relevant studies in sociology, political science and philosophy, we propose a taxonomy of power comprising different sources and mechanisms of exercising power. We discuss how these can be incorporated in a group selection framework to explain the evolution of environmental institutions and policies. This may improve our understanding of the feasibility, effectiveness and dynamics of the latter. © 2009 Elsevier B.V. All rights reserved.