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Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions)

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Elinor Ostrom's Governing the Commons is a wonderful introduction to the world of "common pool resources," a.k.a. CPRs. Technicalities aside, a CPR is a resource that grows over time but can be harvested by more than one person. The classic example of a CPR is the English grazing commons, popularized in Hardin's "The Tragedy of the Commons." Forests, fisheries, and smog-free air are also good examples.

In her book, Ostrom takes an ethnographic approach to studying the management and mismanagement of CPRs. The key question for managing such commons is sustainability. Without some kind of enforceable agreement among those who would harvest a CPR, the resource will rapidly be depleted and possibly destroyed. Ostrom argues that good collective management can arise naturally from communities of people with a mutual interest in the sustainability of commons. In a series of detailed case studies, she lays out conditions ("design principles") that seem to allow -- or prevent -- the good governance of the CPR in question.

Once you've seen these design principles, they seem to pop up everywhere. "Congruence between appropriation and provision rules and local conditions" sounds a lot like the idea of local adaptation in the diffusion of innovations literature. "Monitoring" sounds like the role middle managers play in corporations. "Minimal rights to organize" sounds like the First Amendment.

Overall, Ostrom's book is an open-ended classic. It provides a great description of common pool resources through the lens of ethnographic case studies, plus a framework for looking at CPR problems in general. Ostrom never advances of specific theory of governance. Instead, she lays out many interesting and suggestive examples and principles. The field of CPR research has expended in many directions since Ostrom started it -- it's worth going back to the source to see where it all began.

Hints on how to read this book:

* To really motivate your reading, alternate chapters with Jared Diamond's Collapse. (But skim Collapse; it can be tedious.) Reading about how mismanagement of common pool resources led to the failure of entire civilizations will put an edge on your curiosity about how we can do better.

* As you read Governing the Commons, play the "Is a [blank] a CPR?" game. Switch on a radio to any news program. As soon as the topic becomes clear, mute the radio and ask yourself if the situation can be described as a commons. (The sub-prime bailout? Presidential elections? Somali piracy?) Odds are the answer is yes. It doesn't have to be a natural resource to be a common pool resource -- this analytical frame is extremely handy.

* If you're a scientist, don't read Ostrom looking for a clear, falsifiable theory. She never gives one. Instead, she describes a broad framework for considering the interaction between environment and government. It's a great seedbed of ideas -- but those ideas will need to be cultivated before they can be tested.

* Ask yourself about scaling cooperative management. Unfortunately, Ostrom never tackles this problem. She never gives much thought to whether what works in small communities can be scaled to the level of nations or the world. She can't -- ethnography simply can't cover that much ground. Consequently, "scaling" remains (even after 20 years) one of the great unanswered questions of collective governance.

PS -- If you figure the scaling problem out, please do us all a favor and fix global carbon emissions.

Ostrom attempts to refute the belief that only through state and or market-centered controls can commonly pooled resources (CPRs) be effectively governed. Ostrom writes, "Communities of individuals have relied on institutions resembling neither the state nor the market to govern some resource systems with reasonable degrees of success over long periods of time" (p. 1). Governing the Commons sets out to discover why some groups are able to effectively govern and manage CPRs and other groups fail. She tries to identify both the internal and external factors "that can impede or enhance the capabilities of individuals to use and govern CPRs."

The first section of the book examines both state-controlled and privatization property rights regimes, and illustrates failures in both regimes; namely, that central authorities often fail to have complete accuracy of information, have only limited monitoring capabilities, and possess a weak sanctioning reliability. As such, a centralized governing body may actually govern the commons inaccurately and make a bad situation worse. In the case of privatized property rights regimes, Ostrom illustrates two main points: 1) it assumes that property is homogenous and any division of property will be equitable; and 2) privatization will not work with non-stationary property (fisheries, for example).

After discussing the state-controlled and privatization property rights regimes, Ostrom attempts examine the causes of successful CPR governance, and the catalysts which lead to failure. Being part of the "new institutionalist" school, Ostrom seeks to examine the rules, structures, and frameworks within the various CPR governance structures. Ostrom has discovered a number of "design principles" within the successful CPR governance cases. These principles include: 1) a clear definition of boundaries, 2) monitors who either are appropriators of the resource or accountable to the appropriators, 3) graduated sanctions, 4) mechanisms controlled by the appropriators used to mediate conflict and when necessary, change the rules, 5) a congruence between the rules used and the local conditions.

In other words, Ostrom suggests that these "design principles," form a cooperative institutional structure. If the correct institutions are in place, the players will see cooperation as the best means to gain optimal outcomes. These mechanisms create a confidence between players that defections will be minimal, and those that do defect will be sanctioned accordingly. Additionally, the institutional structures create an environment in which resources are distributed in such a way that all (or at least most) players benefit. As such, many of these institutional structures must be accompanied by a good deal of trust between players. This can only be developed over time and is most likely to succeed when the number of players in the CPR is reasonably small.

"Governing the Commons" has become a classic, not only within the literature of political science, but more broadly throughout the social sciences. In the book, Elinor Ostrom argues brilliantly and compelling for a third way of avoiding Garrett Hardin's "tragedy of the commons," in addition to privatization (conversion of the commons to private property) or government regulation (conversion of the commons to public property). Though numerous examples, Ostrom demonstrates how users of common property resources have managed, in various places around the world, to sustainably manage those resources through local, self-regulation. In other words, common property regimes can avoid the "tragedy of the commons."

Ostrom recognizes that common property management regimes do not always work. Indeed, the seem to fail as often as they succeed. To explain why this is the case, and to help predict the likelihood of success or failure, Ostrom develops an elaborate and very useful model of common property success/failure. In the 15 years since she published "Governing the Commons," that model has not been significantly improved by other scholars. Her book remains as current and important today, as it was when she first published it in 1990. It is required reading for all social scientists, indeed anyone, interested in resource conservation and property systems.

Ostroms' book covers a variety of cases where allocational difficulties arise. She employs sound economic reasoning in analyzing a number of cases where ordinary property rights enforcment is difficult. This book illustrates how vital institutional arrangements are in managing natural resources. Self-described environmentalists should read this book to see how many of the problems that concern them can actually get solved. The history in this book is made interesting through the application of economic concepts. This is not light reading, but it surely is interesting- for serious readers.

I am surprised that there's little review activity going on for this book, even though the author has won the "fake nobel" prize (i.e. the "price in memory of alfred nobel" for economy). Regardless of what one thinks about the fake nobel, the author is certainly someone whose achievements deserve recognition. This book is a pedagogical summary of the important work that she's done in relation to "Common Pool Resources".

It is written in an accurate and scientific style that never falls into the jargon trap. This gives a vivid impression of the author as someone open minded and keeping her thinking clear and focused on the facts.

After an introduction on her intentions and method, she presents the so called "tragedy of the commons" (and its close kin, the "prisoner's dilemna") as a situation where theoretical thinking sees central intervention as the only way to break the (self)destructive behaviour predicted and often observed: everyone tries to appropriate as much as they can get away from common resources until those resources collapse and everyone becomes worse off. She then calls attention to several field situations where individuals have been able to organize themselves to avoid falling into this trap without external intervention. The situations described are as diverse as mountain terrain in Switzerland, irrigation land in Spain and the Philippines or even fisheries in Turkey. Ostrom provides a detailed description of the salient features of these institutions before highlighting the common ground and the differences. She points out that these examples have institutions that have been stable for a long time and that we're therefore unsure about the process through which the institutions themselves were created.

She then turns to more recent examples of successful institutions managing CPR where information is available regarding the institutional development that led to the current situation. The key examples are water management institutions in California and a project to improve local irrigation communities in Sri Lanka. She finally contrasts successful institutions with failing ones, with a view to identify whether factors that may have been thought of as being factors of success may not actually be irrelevant.

The overall message of the book is that it is possible for local communities to take care of themselves and to efficiently manage CPR. It is not easy though and certain type of government intervention actually makes the matter worse. Likewise privatization is also not a one size fits all solution. So she's basically highlighting the need to consider each situation on its own, without ideological glasses. She provides a framework to analyze each specific case, but certainly avoids over-generalization.

The world needs more people like Ostrom, (i.e. lucid thinkers genuinely interested to understand what goes on). Too bad the typical social "scientist" seems to be more interested to bend the facts to fit to his theories and ideologies.

Elinor Ostrom's "Governing the Commons" can be divided into several segments. First, an introduction to traditional theory regarding the management of Common Pool Resources. This is primarily based on the choice between privatization or socialization. Second, she presents her theory of Common Pool Resources (Why they succeed or fail). Third, she describes case studies regarding Common Pool Resources that clearly work, mostly work, and have largely failed. Fourth, she finishes the book with a overarching chapter summing up her theory with a call for further research. The work takes an interdepartmental approach at analyzing Common Pool Resources.

Her theory stresses a series of important characteristics that will determine whether a Common Pool Resource succeeds or fails.

1. Clearly defined boundaries

2. Congruence between appropriation

3. Collective-choice arrangements

4. Effective monitoring

5. Graduated sanctions

6. Conflict-Resolution Mechanisms

7. Minimal recognition of rights to organize

8. Nested Enterprises

(Taken from my notes at the end of CH4. She carefully explains each point and why each has a varying degree of importance.)

"Governing the Commons" is a groundbreaking work in the school of Institutionalism. An economy cannot function without proper institutions. Too often economists ignore institutions because of the difficulty in creating realistic models. Ostrom's seminal work has provided the groundwork necessary to create better public policy.

Aldo Leopold wrote, "We must learn to live on a piece of land without spoiling it." Ostrom's body of work analyzes how people in different places are attempting to do that. Some fail, a few succeed and her analysis of cases and design principles for nested institutional and stakeholder interaction should be mandatory reading for natural resource, ecosystem, or environmental managers. Politicians and government administrators would benefit from applying her work to any allocation issue.

This is a great book. It might be a little technical in the first chapter due to the discussion of game theory, but I think the writing is sufficiently lucid that you can get what you need from context. I like to think that Ostrom introduces three sets of puzzles, depending on your prior set of assumptions.

Problems for a libertarian: The constructs she describes sound a lot like a Social Contract: people agreeing to give up privileges to an organization in exchange for mutual benefit. These may perpetuate successfully for many generations. Furthermore, she shows that private property is not the only possible solution to the commons tragedy; community property is perfectly acceptable. I'm okay with a spectrum of property; I wish I knew of more. See Resurrecting the Granary of Rome: Environmental History and French Colonial Expansion in North Africa (Ecology & History) for a brief description of the types of property that existed in Algeria before the French colonized it.

Problems for a Progressive: It seems that hardcore Progressives read this as "Private property is bad" when no such argument seems to be made. However, Ostrom does show that a coercive solution is not always successful, and that centralized government may destroy a workable solution (Canadian fishery, Asian fisheries and canals). Yet the organizations that are investigated are local, sustainable, democratic, and profitable.

Problems for people interested in thinking about organization theory: Other interesting puzzles are suggested from a full understanding of the test. What exactly is a Commons? Or, to use her terminology, what is a Common Pool Resource? How far can the concept be pushed? Certainly, fisheries, aquifers, and irrigation canal systems seem to qualify, but could a particular market qualify, in which the market plus all of its customers are a CPR shared by producers? It seems that this would run afoul of antitrust law, but would perhaps be more sustainable and less prone to the race to the bottom problem. What about government institutions plus the laws generated being a CPR shared by citizens? Is there a size limit on these? Ostrom discusses limits, but admits up front that a truly comprehensive theory has not been fully developed. Does the Ostrom approach to the CPR square with the legal approach to property, i.e. property rights are a bundle, some of which may be held by individuals as private property, and some of which may be held by a group (a corporation) as community property? What about other obvious things like our planet's ecosystem, atmosphere, etc.? And again, what is the spectrum of property? Resurrecting the Granary of Rome briefly touched on some (community, religious, and private), but it seems like there ought to be a fuller spectrum between the extremes of public (or unowned) and private property.

I consider it a tremendous success that a book can solve some puzzles while suggesting others. If you liked Mancur Olson's The Logic of Collective Action: Public Goods and the Theory of Groups, Second printing with new preface and appendix (Harvard Economic Studies), you will like this, and vice versa.

The game theory could be applyied to the reallity of the policy? The argument of this book is very interesting because, if many authors have a negative idea about this possibility, Ostrom is sure with a certain competence of this fact. The author supposes that the social action must born as collective. Next the problem is related to the possibility to talking about several situations. A strategy is strong if we can use it in Sri Lanka and in California. This theory can be transfered in a coherent context if we know as the complexity theory works.

I have but thumbed it yet; interesting and case-based; but I immediately feel the big deficiency in its not addressing the politics of Allegiance, which over-ride even self interest. 70% of US wants single payer health care; but a strident 20% is whipped up by Pharma and insurance; is not health care in very one's interest? Even if you do not agree with Obama et al on the health care issue, it is a clear example of how chauvinistic allegiance is susceptible to sloganeering and impervious to rationality.

It does not matter if we blame it on inadequate education, high school football, baptists or wotever; it has been part of America since 1700. Pretend that it is not a governing principle and your game theory will not cut the big league. I love that "justice is conflict" (Hampshire) basis and pragma of law; but it ain't gonna beat that hysterical dogma out of existence.

The NRA is not just "I gotta gub", but a fraternity for Freedom rooted in inalienable pig-headedness. Are they in or out of Ostrom's commons?