Elinor Ostrom, the first woman to win the Nobel Prize in Economics, synthesized empirical research from multiple disciplines (e.g., rural sociology, anthropology, history, economics, political science, forestry, irrigation sociology, human ecology, African studies) to answer the question of what distinguishes those groups who succeed vs. fail at effectively and sustainably managing common resources. This article focuses on summarizing that work, with a primary focus on her book, Governing the Commons: The Evolution of Institutions for Collective Action. All references are from this book unless otherwise noted. CPR = Common Pool Resource (e.g., fish). Appropriator = User of a resource.
“All efforts to organize collective action, whether by an external ruler, an entrepreneur, or a set of principals who wish to gain collective benefits, must address a common set of problems…free riding, solving commitment problems, arranging for the supply of new institutions, and monitoring individual compliance with a set of rules” (p. 27).
I start the notes with Chapter 3 because this is where Ostrom discusses similarities in success stories and then discusses her 8 design principles for successful commons use. Ostrom’s conclusions may be limited to small-scale organizations as this is her data pool: organization located in one country, 50-15,000 people “who are heavily dependent on the CPR for economic returns”; the CPRs involve renewable rather than nonrenewable resources, scarcity exists, users can substantially harm each other but not where they “produce major external harm for others.” (p. 26).
Chapter 3: p. 88 – Similarities among enduring, self-governing CPR institutions
- Face uncertain and complex environments
- Populations are stable over time so…
- Individuals have a shared past and expect to share a future
- It’s important to maintain reputation
- Individuals live side by side
- They expect children and grandchildren to inherit their land. Thus, their discount rates are low: They (or their children and grandchildren) will reap the benefits at some point in the future of costly investments incurred now
- Extensive norms have developed over time that narrowly define “proper” behavior which reduce conflict when living and/or working in close proximity
- Individuals do not differ greatly in wealth, skills, knowledge, race, or other variables that can cause division (p. 89)
- Resources are sustainably managed
Table 3.1 – 7 Design Principles illustrated by long-enduring CPR institutions + 1 Design Principle for CPRs that are part of larger systems
Design principle = essential element or condition. However, Ostrom is not willing to claim these are necessary as of the writing of this book (1990). The 8th principle is reserved for CPRs that are part of larger systems.
- Clearly define boundaries of the CPR and who has rights to use it.
- Good-fitting rules: Match rules governing use of CPR to local needs and conditions.
- Collective choice: Those affected by the rules design and modify the rules.
- Monitor the rules. Those monitoring are either the appropriators themselves (e.g., people who fish) or are accountable to them. Costs of monitoring are often low, ideally when people with an incentive to cheat are next to people with the opposite incentive (e.g., An individual gets 15 minutes of irrigation time and then their next door neighbor gets the next 15 minutes).
- Use graduated sanctions for rule violators depending on seriousness and context of violation. Sanctions are imposed by appropriators, those accountable to the appropriators, or both. #4 and #5 comprise a quasi-voluntary system that does rely on coercion if people are caught violating the rules.
- Conflict-resolution: Provide accessible, low-cost means for dispute resolution. There are always going to be grey areas of interpretation.
- Make sure the rule-making rights of community members are respected by outside authorities. If people can just go outside the system to reverse a community outcome, this will undermine the community system.
- Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.
Note: Additional source
Examples of factors internal to the group that can prevent effective management of the commons (p. 21)
- Participants may have “no capacity to communicate with one another, no way to develop trust, and no sense that they must share a common future.”
- People with more power may “block efforts by the less powerful to change the rules of the game.”
Examples of external factors
- Prevented from change by external authorities indifferent to the specific commons dilemma or may gain from it
- External changes occur too rapidly to adjust
- Perverse incentive systems resulting from external forces
Chapter 2: Defining
Chapter 3-5: Empirical studies
Chapter 6: A Framework for analysis (p. 182)
- Most successful institutions are “rich mixtures of public and private.”
- No claim is made that solutions supplied by appropriators are optimal.
- 3 models from Chapter 1, Tragedy of the Commons, Prisoner’s Dilemma, & Olson’s Logic of collective action, are not wrong. Similar outcomes will occur to the extent that conditions in the world match the assumptions of those models.
- “When individuals who have high discount rates [i.e., future benefits do not matter much relative to the cost right now] and little mutual trust act independently, without capacity to communicate, to enter into binding agreements, and to arrange for monitoring and enforcing mechanisms, they are not likely to choose jointly beneficial strategies unless such strategies happen to be their dominant strategies” (p. 183).
- Models like the 3 from Chapter 1 are “useful for predicting behavior in large-scale CPRs [Common Pool Resources] in which no one communicates, everyone acts independently, no attention is paid to the effects of one’s actions, and the costs of trying to change the structure of the situation are high. They are far less useful for characterizing the behavior of appropriators in the smaller-scale CPRs that are the focus of this inquiry” (p. 183).
- Often a model that is simplified is thought to be more general and therefore more attractive — it applies to more situations. However, sometimes simplifying a model, by making a variable constant, makes it less general
- “Analyzing the in-depth case studies can deepen one’s appreciation of human artisanship in shaping and reshaping” (p. 185) these situations.
People doing similar work. (1) Juan Camilo Cardenas, student of Elinor Ostrom. (2) John M. Anderies (aka, Marty) at Arizona State University. (3) Jacopo A. Baggio: Cognitive diversity is necessary for sustaining the commons.