Thursday, September 9, 2010

Avoiding the Tragedy of the Commons" (Eleonore Ostrom: Governing the Commons)

The book by 2009 Nobel price laureate Eleonor Ostrom is one of the most positive books I have recently read; it gives rise to optimism: first, for the management of common resources - which include climate and natural habitats, and second, for a realistic and empirically grounded social science, producing applicable theories.

A commons was the communal pasture in a village, where every farmer could herd as much cattle as he wanted. More cows on the commons means more milk to the farmer, thus every farmer in his own best interest increased the number of cows, even though the aggregate action of all farmers will destroy the pasture and at the end all will lose. The effects of 'best self-interest action' by the individuals lead seemingly inevitably to a loss of the resource for all. This was described by Garrett Hardin as "The Tragedy of the Commons" (Science, Vol. 162, No. 3859 (December 13, 1968), pp. 1243-1248) and it is empirically observable in many instances - the fishing industry and groundwater pumping are current examples in the public eye.

Fortunately, not all Common Pool Resources (CPR) follow the this route to destruction; alpine meadows on several continents are managed communally for centuries, irrigation systems in many traditional communities have functioned for 'time immemorial'. Eleonor Ostrom has carefully collected empirical studies of CPR management which have worked and distilled a set of principles which help to avoid the tragedy:
1. clearly defined boundary of the resource and the community it serves,
2. congruence between the rules of using the resource (appropriation rules) and the contributions (provision rules),
3. institutions to allow collective decisions making,
4. monitoring the resource and its use,
5. sanctions for violation are graduated (going from very small to substantial for repeated offenders),
6. conflict-resolution mechanism,
7. the right of the community to organize is recognized by higher level authorities.

If the monitoring methods are simple and infractions easily observable by others, trust among participants is emerging. Ostrom analyzes cases where the 'tragedy was played out' and identifies as causes: (1) a lack of political will to enforce rules, (2) complex rules based on not easily observed facts, requiring a costly staff, which is likely not functioning, and (3) general interference of higher levels of government with the local people who depend on the resource for their livelihood.

The book is an example for a new kind of social science, avoiding hypothetical examples, which cannot exist in reality (e.g. perfect markets), but starting with careful empirical studies, collecting qualitative and not only quantitative figures to analyze institutions and to deduce conditions under which the tragedy can be avoided.

For GIscience, the book is relevant as it points out that (1) studies of mechanism of a CPR based on natural science only are not sufficient but the interaction with the community exploiting the resource must be included and (2) the cost of the management rules must be considered: information collection, processing and later enforcement of rules can be expensive and ruin in practice a theoretically nice solution.

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