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Governing the Commons: The Evolution of Institutions for Collective Action
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Themes
The Flaws of Collective Action Theories
Throughout the work, Ostrom highlights the flaws of traditional collective action theories when applied to small-scale CPRs. These theories often make erroneous assumptions while failing to explain what variables account for the successful management of a CPR. In exposing these flaws, Ostrom hopes to demonstrate why her own research presents a more accurate picture of small-scale CPRs.
The three theories of collective action—the tragedy of the commons, the prisoner’s dilemma, and the logic of collective action—all predict the destruction of the CPR without external intervention through central governmental regulation or privatization. These theories assume that appropriators act independently of one another and do not communicate with each other. Additionally, these theories exclude situational variables. They argue that there is only one rational choice for appropriators to make and that it will lead to the CPR’s destruction.
Ostrom argues that, in reality, appropriators do communicate with one another, and they often share cultural norms and observe each other’s behavior. They are often able to work out agreements among themselves to limit appropriation and sustain the CPR. Indeed, the appropriators are in the best position to formulate rules that will be workable and enforceable in local conditions. Since such rules accommodate local conditions, they are likely to be viewed as legitimate, while uniform rules imposed by a central government are more likely to be disobeyed. In Ostrom’s case studies, the CPRs that were successful relied on a mix of private and public entities for their management.
The predominant theories of collective action also deny the ability of appropriators to change institutional rules. They posit a choice between inaction and major change with high costs. They argue that appropriators will choose inaction or take the proverbial “free ride” by assuming that others will do the organizing. Ostrom highlights the error in this theory, arguing that institutional change can happen slowly or by increments. Faced with the choice of inaction or taking a small step to improve conditions, the incentive structure changes. She gives the example of how the filing of a lawsuit in the case of the Los Angeles water basins changed organizational incentives. The lawsuit triggered an independent study, which furnished the appropriators with proof that current practices were unsustainable. As a result, another step was taken in the process of institutional change.
Given the failure of traditional theories of collective action to explain the successes and failures of small-scale CPRs and to account for institutional change, Ostrom seeks to develop theories particular to those types of cases. In exposing the theories’ flaws, she creates space for a more accurate assessment of small-scale CPRs.
The Conditions for Successfully Managing Common Pool Resources
Ostrom closely examines several long-term cases of successfully managed CPRs. She analyzes various key factors, such as how the rules for these CPRs were made, the structure of the CPR, and the enforcement of the rules. Based on her studies, she identifies seven design principles common to all successful cases and an eighth principle for those CPRs on the larger end of her sample. In doing so, she argues for a set of conditions that successfully managed CPRs all have in common.
In all successful cases, there are clearly defined boundaries, with the CPR itself and those with the right to withdraw from it specified. For example, in the Swiss case, only citizens can access clearly defined public lands. Second, appropriation rules governing access are related to local conditions. In Spain, areas with less rainfall have different rules for accessing irrigation systems than those with more rainfall. Third, those most impacted by the rules are able to participate in modifying those rules. In Japan, village assemblies develop rules of access to common lands. Fourth, the appropriators, or those answerable to them, are responsible for the enforcement of rules. In successful cases, the rules make enforcement fairly easy as well, such as when the harvesting of timber in Switzerland can only take place at a certain time. Appropriators can thus easily observe if someone is breaking the rules. Fifth, a set of graduated sanctions is in place for non-compliance, with first offenses meriting minor penalties.
Sixth, there are low-cost arenas for resolving disputes, such as a water court in Spain where farmers can air grievances against one another. Seventh, external governmental authorities do not challenge the system in place or the right of appropriators to create their own institutions. In the larger CPRs, which are more complex and require layers of management, nesting is present. In other words, local appropriators elect individuals to serve on regional governing boards. There is also negotiation among the layers. The combined Central and West Basins in California provides such an example.
In the unsuccessful cases, Ostrom highlights how some of the design principles were missing. At most, there were only three design principles in operation. In the inshore Turkish fisheries, for example, there were no clear rules about who could fish in the waters, violating the first design principle. In the Mawelle fishery, there was also no clear definition of appropriators and no arena for local appropriators to come together to resolve issues. There was a lack of enforcement in the Los Angeles water basins. Ostrom also considers how the Nova Scotian inshore fisheries were threatened by the central government imposing uniform criteria that conflicted with local conditions.
Ostrom admits that more research is needed, urging scholars to test her framework in other case studies. Since all the failures were missing more than one of the design principles, she suggests that it remains to be seen if all seven principles are necessary. Nevertheless, her own research provides a possible blueprint for the conditions necessary for successfully managing CPRs.
The Importance of Understanding Institutional Change
Relying primarily on the Los Angelese water basin cases, Ostrom develops a framework for predicting when appropriators are likely to adopt institutional changes, how they will proceed in doing so, and how governmental authorities can assist such efforts. Throughout her analysis, she emphasizes the importance of understanding institutional change.
Ostrom posits six “internal characteristics” that lead appropriators to change the rules (211), with each factor arranged in order of importance. First, and most importantly, the appropriators must share a belief that they will be harmed without any such changes. For example, in the Los Angeles water basin cases, the appropriators had information that demonstrated that the resource would no longer be available if no action was taken. Second, the appropriators must be similarly impacted by the rules. In other words, they will all be harmed if action is not taken. Third, the appropriators must have low discount rates, or value future benefits. Fourth, appropriators must have low transformation, information, and enforcement costs. Fifth, the appropriators must share norms and thus be able to work together well. Finally, and of least importance, the appropriators must be small in number and stable in membership.
Importantly, change to institutional rules is done incrementally. Appropriators would most likely reject a wholesale change, given the costs and risks associated with it. However, a minor change or action can change the incentive structure, eventually leading to additional changes. For example, the filing of a lawsuit in the Los Angeles water basin cases led to studies that demonstrated the unsustainability of the resources. That information motivated individuals to take action. There was also the risk that a judicial resolution of the case would be potentially detrimental to all parties. Once trust is built by working together to make minor changes, additional and more significant changes become easier to make. Since traditional theories of collective action only posit the choice of major change versus inaction, they fail to account for how appropriators change institutions in these case studies.
Since there are few cases with an indifferent government, Ostrom explains that the role of external governments can be helpful or harmful to institutional change. Regional and national governments can play a helpful role by providing conflict-resolution arenas, allowing for local autonomy, and investing in enforcement agencies. This role contrasts starkly with a government’s imposition of uniform rules. When governments seek to impose such rules, Ostrom argues, it is less likely that appropriators will be able to make institutional changes. Changes are even less likely if the government is corrupt. Thus, in understanding institutional change, scholars can gain a better understanding of the factors at play and the way in which conflicts or issues can be successfully resolved.
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