Jay C Colburn II Prcis 1

2/7/2011 GOVT 631

The problem of how to organize and govern common pool resources (CPRs) has been an issue that societies have grappled with for centuries, dating back at least to the time of Aristotle. A CPR, as understood in Elinor Ostrom's Governing the Commons, refers to "a natural or man-made resource system that is sufficiently large as to make it costly (but not impossible) to exclude potential beneficiaries from obtaining benefits from its use" (Ostrom, p.30). Examples of such resource systems may include fishing grounds, grazing lands, bridges, or irrigation areas, to name a few; they differ from public goods, however, like police forces, which are available to all but are non-subtractive, in that one's use of a public good does not detract from another's ability to use that same public good. The dilemma of CPRs, often described as the "tragedy of the commons," is that when individuals pursue their own self-interest, for example maximizing the amount of fish caught in order to provide food, income, etc., they will deplete the common resource to the detriment of all who have a stake in the CPR. Rules and institutions are often established in order to manage the use of such resource systems, many times regulated by either government bodies or private firms. When policy prescriptions regarding CPRs are made and implemented using generalized models, there can be many downsides. Such metaphorical models often make broad assumptions on the accuracy of available information or the costs associated with the management of resources; these models may hold certain key variables constant, such as the amount of people extracting a resource, ignore the possibility of human error and imperfect regulation, or not account for situational changes over time. In cases of either government or private regulation of CPRs, there is often uneven distribution of benefits to those in control. While no known system is perfect in its execution of governing CPRs, empirical evidence has shown that there are successful alternatives to either private or government institutions, that institutions can be created and regulated by those involved with extracting resources from such systems, known as appropriators. Through Ostrom's investigation, she aims to understand why some instances of selforganization and self-regulation succeed while others fail. A simple model known as the Prisoner's Dilemma, a common model used in game theory and rational choice theory, can be used to demonstrate the tragedy of the commons. Ostrom gives an example (taken from Garrett Hardin) of two herders sharing a common grazing land. As rational actors, each herder will attempt to maximize their own cattle's grazing; this will lead to overgrazing and the deterioration of the pasture, resulting in a negative outcome for all parties. The Prisoner's Dilemma model describes the paradox that "individually rational strategies lead to collectively irrational outcomes" (Ostrom, p.5). The establishment of rules and institutions is crucial in altering the sub-optimal outcome of each actor's rational strategic choices. The main research question driving Ostrom's study seeks to gain a better understanding of "why some CPR appropriators succeed and others fail to change the structures of incentives they face" (Ostrom, p.243, footnote 13). Governing the Commons addresses a number of varied cases and draws on literature from multiple fields, including political science, sociology, economics, anthropology, and areas studies. This inductive study seeks to explain the variation between specific successful and failed cases of appropriator management of common pool resources. Ostrom chooses CPR systems like grazing areas, agricultural land, irrigation areas, ground water basins, and fisheries in countries such as Switzerland, Japan, Spain, the Philippines, the United States, Turkey, Sri Lanka, and Canada. In these cases, appropriators have established institutions to devise, modify, monitor, and enforce sets of rules and regulations for CPR appropriation. Operating within the framework of rational choice theory, Ostrom studies these cases, some of which are successful and others failing or fragile, in order to identify the presence or absence of certain variables that are able to change the strategies of appropriators to cooperate to increase the benefits of all involved and maintain and preserve the finite resource systems. Unlike many models frequently used by policy analysts, Ostrom presents a broad framework of eight "design principles," or variables, whose presence she claims accounts for the success of CPR institutions. The eight design principles that Ostrom determines to be common among enduring CPR institutions are: 1) clearly defined boundaries; 2) congruence between appropriation and provision rules and local conditions; 3) collective-choice arrangements; 4) monitoring; 5) graduated sanctions; 6) conflict-resolution

Jay C Colburn II Prcis 1

1

2/7/2011 GOVT 631

mechanisms; 7) minimal recognition of rights to organize; and 8) nested enterprises (Ostrom, p.90). These eight design principles act as the independent variables, or explanatory factors, that Ostrom was able to induce from the detailed analyses of her empirical case studies. The case selection exhibited a wide variation of the dependent variable, with six cases showing enduring and robust institutional performance, three with fragile performance, and five whose institutions failed to have positive significant effects on appropriators' sub-optimal strategies. The examples from Ostrom's cases demonstrate how adjusting rules to incentivize cooperation and actions that mutually benefit CPR appropriators can have positive effects and contribute to the endurance of successful self-governed CPR institutions. These cases also represent different types of CPR systems from different countries and time periods, which allow Ostrom to make broader generalizations about the characteristics of institutions she found to be associated with success. The broad conclusions she draws are only applicable to a specific set of CPRs, however. Ostrom limits her analysis to small-scale CPRs within one country with 50 to 15,000 people who rely on the CPR for economic benefits; the study does not include nonrenewable resource CPRs or situations with abundant resources. It is also important to note that while Ostrom's study uses game theoretical analysis, the goal is not to see when or how institutions achieve optimal efficiency, but increased efficiency to the point that individual rational decisions will not result in the deterioration and/or destruction of the CPR resources. By narrowing her focus, Ostrom is able to develop a more fine-tuned understanding of a specific set of CPR institutions and their strategies for collective action. While Governing the Commons makes a significant contribution to the understanding of CPR institutions and CPR appropriators' strategies, the study's results are not necessarily applicable to larger CPR institutions or other situations involving modeled on the Prisoner's Dilemma game. Ostrom explicitly states the limits of her study, but by addressing crucial variables like human behavior, culture, and social norms, she greatly expands on the literature on CPR institutions, much of which focus on the "theory of the state" and the "theory of the firm." Ostrom analyzes what internal and external factors affect an individual's choice of strategy of whether to maintain the status quo rules of the CPR institution (resulting in mutually sub-optimal outcomes) or decide to change the rules. The most important internal factors were the expected costs and benefits of change as well as internal norms and discount rates (the weight applied to short-term and long-term costs and benefits). These factors are all affected by external situational variables as well, like the structure of a CPR (number of appropriators, size of CPR), social 2 norms, proposed changes to rules, and many others. In addition to providing a detailed analysis of factors affecting CPR appropriator choices, Ostrom details the multiple levels of rules, from operational rules (day-to-day rules concerning resource withdrawal, monitoring, etc.), collective-choice rules (rules for CPR management, policy-making, etc.), and constitutional-choice rules (formulation, modification, governance of collective-choice rules). These multiple levels of analysis inherently require treatment of time horizons and the drastic effects time can have on institutional change, a factor often disregarded or kept constant in studies of CPRs. Ostrom notes that institutional-choice as well as operational rules are path dependent, giving the status quo rules a "privileged procedural position" (Ostrom, p.202). The concept of path dependence in Governing the Commons seems to be used in a similar way to Paul Pierson's narrow conception of path dependence in his article Increasing Returns, Path Dependence, and the Study of Politics. In terms of CPR institutions, once a set of rules are established, the costs of reversing or changing those rules greatly increases. There are often large set-up costs associated with CPR institutions and many of the details and innerworkings of these institutions are often quite complex and poorly understood; in situations with governmental or private management of CPR institutions, those with decision-making power or those who benefit from the existing system would see change as having negative consequences (according to their personal interests). By analyzing multiple levels of rules and incorporating time horizons into her study, Ostrom demonstrates the importance of understanding path dependent situations in CPR institutions. Governing the Commons is an important contribution not only to the literature dealing with common pool resources, which heavily focused on government or private institutions, but also to the broader work on
1 2

For CPRs that are part of larger systems. See Appendix I for a summary chart of variables affecting institutional choice.

Jay C Colburn II Prcis 1

2/7/2011 GOVT 631

collective action, social theory and institutional change. Although her study narrowly focuses on specific types of CPRs, the broader conclusions she draws concerning the eight design principles using carefully chosen detailed case studies can be further tested and expanded to hopefully gain a better understanding of a wider variety of CPRs, institutions, and situations involving collective action problems.

Appendix I

Jay C Colburn II Prcis 1

2/7/2011 GOVT 631

Bibliography
Ostrom, Elinor. 1990. Governing the Commons. Cambridge: Cambridge University Press. Pierson, Paul. 2000. Increasing Returns, Path Dependence, and the Study of Politics. American Political Science Review. Vol. 4, No. 2.