This article provides an alternative and novel theoretical approach to the conceptualization and analysis of payments for environmental services (PES). We devote special emphasis to institutional and political economy issues, which have been somewhat neglected in the literature on PES. We argue that the Coasean and pure market approach dominating the conceptualization of PES in the literature cannot be easily generalized and implemented in practice. By contrast, taking into account complexities related to uncertainty, distributional issues, social embeddedness, and power relations permits acknowledging the variety of contexts and institutional settings in which PES operate. The alternative approach presented in this introductory article to the special section may be more appealing to PES practitioners, since while avoiding restrictive and prescriptive standpoints, it allows some key sources of complexities they usually deal with on the ground to be more easily understood.