The role of international agricultural research centers (IARCs) has long been a subject of discussion, often with emphasis that they should conduct research that produces international public goods (IPGs). However, centers still face a dilemma on how to balance between IPGs and location-specific work. This paper contributes to the development of principles by which they should position themselves. Transaction cost economics was applied to develop a framework, which is then illustrated with an empirical case study of legume research at the International Crops Research Institute for the Semi-Arid Tropics. A participatory mapping technique (Net-Map) was combined with key informant interviews in India, Malawi and Ethiopia. We find that IARCS play an important role in germplasm improvement, the field in which they have a comparative advantage. However, due to insufficient capacity of national systems, they also engage in downstream activities. This reduces incentives for governments and donors to overcome governance challenges.