Module 7: The
Environment as
Commons
The Different Kinds of ‘Goods’
(A)Private Goods
(B)Public Goods
(C)Common Resources
(D)Club Resources
How and why are they different from each other? (Paul Samuelson, 1954)
- Exclusion
- Rival Consumption
Food for thought
CLIMATIC SYSTEM GRASSLANDS GROUNDWATER
Are these non-rivalrous or rivalrous?
Are these excludable or non-excludable?
Which categories do each of these belong to?
Non-Exclusion: Problem of Free Riders
When consumption is non-excludable, the problem of free riders
emerge as some of users may enjoy the benefits of the good
without paying for it .
Think of some examples from your university life!
Free-rider Issue
The free rider issue may often be found with public goods
and Common Pool Resources (CPR).
What really is the problem with Common Pool Resources?
Given that Common Pool
Resources are non-excludable but
rivalrous in their consumption, they
are often over-utilized, leading to
their degradation.
Thus, a tragedy.
The Tragedy of the Commons: Garrett Hardin (1968)
● There is NO technical solution to the problem of overpopulation
● Overpopulation can lead to over overexploitation of common pool resources
● No possibility of collective action to avoid overexploitation
TRAGEDY OF THE COMMONS:
Non-excludable but rivalrous
Why CPRs only? Because, (a) CPRs are non-excludable but simultaneously rivalrous
in utilization and (b) self-interest pursued by each individual (c) collective interest of
the group of people sharing the CPR is ignored by each person
Example of overgrazing of pastures: each grazer choses to obtain an additional cattle
leading to over use of the pasture
individual self interest > collective interest
But collective interest may be sustained in a situation of low population but can’t be
sustained with high population
Critical Reading of Hardin’s Argument:
Hardin’s argument based in TINA Syndrome (There is No Other Alternative)
Why do we say that?
- Self Interest of Individuals doesn’t necessarily win over collective interest
How do we say that?
- Ethic of cooperation makes people place collective interests over and above
individual-based self interest
‘ Social Dilemma’ in Common Pool Resources
● settings where uncoordinated decisions motivated by the pursuit of individual
benefits generate suboptimal payoffs for others and for self in the long run.
● Such situations are considered to be dilemmas is that at least one outcome
yields higher returns for all who are involved, but participants posited as
maximizing short-term material benefits make independent choices and are not
predicted to achieve this outcome.
● Social dilemmas thus involve a conflict between individual rationality and
optimal outcomes for a group (Ostrom, 2009)
● However, socially optimal outcomes could be achieved if most of those involved
“cooperated” in making the choices which can maximise both the collective as
well as self interest in the long run
● How can we be so sure that social groups will cooperate?
Introduction to Elinor Ostrom’s Work on the Commons
- Elinor Ostrom (1933-2012): An American political scientist who was also the first
woman to win the 2009 Nobel Memorial Prize in Economic Sciences for her
research contributions to the study of the governance of commons
- Method of study: Empirical observations of community run common pool
resources from across the world (e.g. Mountains and Pastures in Japan and
Switzerland, Irrigation System in Nepal, Spain and Philippines, Community based
Forestry in India and Nepal, Community Fisheries in Canada and Sri Lanka, etc.)
- What is her contribution to the study of Commons? And why it is relevant?
Communities can do a good job of managing their common resources by
cooperation with each other. The commons aren’t necessarily a tragedy !
Empirical Example: Study of 299 Large Scale Irrigation Systems of Nepal by Ostrom
and others
Contd.
Ostrom undertook comparative analysis of irrigation systems run by the state on one hand and
local community led irrigation systems on the other hand. The three indicators of making the
comparisons were:
(1) the physical condition of irrigation systems, (2) the quantity of water available to farmers at the
tail end of a system at different seasons of the year, and (3) the agricultural productivity of the
systems.
Finding of the study: Local community farmer-led systems performed better on all the three fronts
Other observations: The local community based farmers communicate with one another at annual
meetings and informally on a regular basis, develop their own agreements, establish the positions
of monitors, and sanction those who do not conform to their own rules. Thus, farmer-managed
systems are likely to grow more rice, distribute water more equitably, and keep their systems in
better repair than state lef systems (though, not all the farmer-led systems performed just as good)
Ostrom (Nobel Prize Lecture): Cites other such studies where the community run irrigation
systems were found to be more effective e.g. Japan (Aoki 2001), India (Meinzen-Dick 2007;
Bardhan 2000), and Sri Lanka (Uphoff 1991), etc.
Not to say that all the common resources are always well managed by local
communities. But Ostrom, from the study of those CPRs which have been
well managed, identified eight common principles of governance.
If followed well, these principles may enable an efficient governance of the
commons
- What are the eight principles given out by Ostrom for managing the
Commons? ([Link]
managing-the-commons/)
Reiterating Ostrom’s Eight Design Principles
- Boundaries of the CPRs were clear
- Congruence between benefits and costs
- Users had procedures for making own rules (i.e. autonomy for self
governance)
- Regular monitoring of users and resource conditions
- Graduated sanctions
- Conflict resolution mechanisms
- Minimal recognition of rights by government
- Nested enterprises
Trust and Reciprocity: Basic Prerequisites of successful cooperation
The capability of those involved to gain a reputation for being trustworthy and reciprocating the efforts
of others to cooperate with their own cooperation turns out to be a central characteristic of settings
where moderate to high levels of cooperation are sustained (Ostrom, 2009)