In many states,
water is a right that does not require any legal contract to prove ownership
of it. Like air, it is viewed as a necessity to which we all are entitled.
(Gallagher, 2017) This can lead to disputes over who can use how much when.
Governing the Commons (Ostrom,
2015)
Elinor Ostrom began
her interest in the “problems of collective action faced by individuals using
common-pool resources” in the 1960s, as a graduate student researching “the
development of institutions related to water resources in southern California.”
Eventually she was to publish a highly respected book (Ostrom, 2015) about
managing resources in “the commons,” a book that gives many examples of
successful practices, based on studies of the efficiency and equity of numerous
organizational arrangements to handle “common-pool resources” (CPRs). A
colleague at Indiana University, Fenton Martin, assembled roughly 5000 cases of
such collective action, from all over the world. (Unless otherwise noted,
quotations in this chapter are from Ostrom, 2015.) With her co-workers, Ostrom
assembled a subset of case studies, each of which included, in her words:
•
the structure of the resource system,
•
the attributes and behaviors of the
appropriators,
•
the rules that the appropriators were using, and
•
the outcomes resulting from the behaviors of the
appropriators.
Ostrom notes in her introduction
to her book that the three generic options are national (“state”) control,
control by the appropriators, and market privatization. She concludes that
neither the state nor the market has uniformly been successful “in enabling
individuals to sustain long-term productive use of natural resource systems.”
In contrast, some user communities, appropriators, have developed “systems with
reasonable degrees of success over long periods of times.” She concludes that
the theoretical underpinning to understand self-governing institutions in this
context are lacking and proceeds to propose alternatives that go beyond “states
and markets.”
She
hesitates to make broad generalizations, however (Ostrom, 2015): “I do not
think it is possible to elucidate necessary and sufficient principles for
enduring institutions….”
Ostrom generalizes
from the “tragedy of the commons” and the “prisoners’ dilemma” models to the
issue of “free riders,” individuals who can obtain for free benefits at the
costs of others in their group. Then she comments that the limitations on
controlling the behavior of the free riders assumed in the models may not hold
in real life, and thus the outcomes may well not be as poor as these
models/metaphors predict. From such pessimism comes the conclusion, which she
disputes, that only firm governmental control can prevent the “tragedy,” or
sub-optimal utilization. Such policies have been instituted in many Third World
countries. Ostrom gives a prisoners’ dilemma game analysis that shows that
inaccurate information held by the state can lead to ruin, too. Similarly, she
finds deficiencies in assigning property rights to commons participants. She
concludes that neither centralized control nor privatization is universally
optimal. Rather, “many solutions exist to cope with many different problems,”
and optimal solutions are likely to have to be developed (“a difficult,
time-consuming, conflict-invoking process”) by the participants themselves
rather than be imposed on them.
Ostrom proposes
another model, one in which the participants can regulate themselves with
binding laws/contracts, established unanimously. The players have an incentive
to monitor each other and a referee to enforce penalties. She gives as an
example the successful use of agreedupon daily rotation through a set of
fishing locations in Turkey, with monitoring (and enforcement) handled by the
fishermen themselves. Factors internal to the group involved or external to it
may make some arrangements feasible and others not. She lists the difficulties
faced by “centralizers” and “privatizers” that make any sweeping generalization
likely to be wrong. “Policies based on metaphors can be harmful,” she
concludes. One might say, “the devil is in the details.” Examples of disastrous
nationalization are given for formerly communal forests and fisheries.
Ostrom hopes to
“contribute to the development of an empirically supported theory of
self-organizing and self-governing forms of collective action.” Her empirical
base is limited to CPRs “located within one country and the number of
individuals affected varies from 50 to 15,000 persons who are heavily dependent
on the CPR for economic returns.” Applicability to the Colorado River Basin
remains in question, as this common-pool resource is within one country but has
orders of magnitude more persons dependent upon it, even if we limit that count
to the number of entrepreneurs, broadly defined. She investigates what has and
has not proven to be successful. The major issues involved in such activities
are:
•
free-riding,
•
commitment problems,
•
supplying new institutions,
•
monitoring individual compliance.
While “public goods,”
like the atmosphere, are available to all and virtually inexhaustible,
common-pool resources are limited, which is why there is a particular advantage
to limiting those who use them, those who “appropriate” them. The participants
in any such CPR will make their decisions based, it is assumed, on the
following:
•
expected benefits,
•
expected costs,
•
internal norms,
•
discount rates (how future benefits and costs
are compared to benefits and costs at the present).
Furthermore, their
decisions will be affected by how they react to the choices made by others and
how others react to them. Some will act independently. Acting in concert will
also generally be more beneficial than acting alone. However, there are costs
to organizing, and freeriding is likely.
Two simple models are
presented: the firm and the state.
In a firm, the
entrepreneur negotiates binding contracts with others to work together and he
derives a profit (or a loss) because of their joint activities. The
entrepreneur has an incentive to achieve efficiency to maximize returns.
In the state, the
ruler monopolizes the use of force and uses the coercion of law to develop
structures that contribute to the common good. The ruler gives some of the
benefits to the ruled and keeps the rest. The state is at risk from internal
rebellion and external conquest.
In both the firm and
the state, the principal has incentives to monitor performance and to enforce
compliance. There remain the problems of creating new rules if needed,
maintaining credible commitment despite the temptation to cheat, and monitoring
each participant’s conformance to the rules.
Some situations defy
simple modeling. For example, for water supplies, “whether or not to steal
water and whether or not to monitor the behaviors of others who might be
stealing.” The benefits and costs of cheating and monitoring, for example, can
produce rather different situations. Following Gardner et al. (1990), Ostrom
and co-workers divide the problems into two approximate groups: “appropriation”
problems and “provision” problems, thus, using and supplying. The first set
concern time-independent allocation of the flow, and the second set require
time-dependent maintenance of the supply.
As difficult as
developing a successful CPR system may be, some have succeeded: “But some
individuals have created institutions, committed themselves to follow rules,
and monitored their own conformance to their agreements, as well as their
conformance to the rules in a CPR situation. Trying to understand how they have
done this the challenge of this study,” Ostrom writes.
Before that
discussion, however, she presents some exploration of possible lessons from game
theory.
GAME THEORY AND PRACTICE
A classic game theory
model is that of Prisoner’s Dilemma (PD), where two parties must decide whether
to cooperate (for example as crime suspects, whether to tell the same story) or
disagree. If they both confess, they will get a minimum sentence. If one
confesses and the other does not, the confessor will get a maximum sentence and
the other will be set free, and if both deny, they will get an intermediate
sentence. If they can trust each other, they can optimize: they can both
confess and get a mild sentence. If one double-crosses the other, the confessor
gets slammed. More broadly framed, there are advantages to cheating if you get
away with it and the others do not cheat. It seems like the free-rider problem,
where some can profit at the benefit of the others, leading to all of them
trying to profit that way. There are many variations of the PD game, and game
theorists have studied them in detail and looked for methods to optimize the
outcome, inducing all to cooperate within the rules.
Theory helps
highlight the important variables and parameters, but experience must confirm
theory for theory to be correct. Ostrom concludes that the theoretical outcomes
have often been incorrectly pessimistic about the possibility of successful
collective action among appropriators (users) and providers. The situations
sometimes fail to match the assumptions of the models, “In many irrigation systems… the fundamental choices facing
appropriators are whether or not to steal water and whether or not to monitor
the behaviors of others who might be stealing…and does not reduce down to any
simple game.” [Our emphasis added.] The
optimum turns out to depend on the number of users and the costs and benefits
of stealing and of monitoring.
To simplify the
analyses, Ostrom and colleagues have separated the analyses into studying appropriation problems and provision problems. “Appropriation
problems are concerned with the allocation of the flow: provision problems are
concerned with the stock. Appropriation problems are time-independent;
provision problems are time-dependent.” Every CPR situation involves both.
Appropriation problems focus on who uses how much, with what
investment. The incentives for users who act independently leads to
overinvestment by them in any unconstrainted factor (like equipment) to get as
much of the resource as rapidly as they can. Where the value of access varies
with time and/or place, the appropriators are likely to conflict with each
other and to limit their investments in provision activities.
Provision problems can include the setting-up costs and the
maintenance costs for the resource; organizing set-up and maintenance can be
challenging. Free-riding will limit investment, and the free-riders could
deplete the resource to the exclusion of others. Withdrawal rates may need to
be regulated and monitored and enforced. Modeling collective action problems
remains difficult.
Over time, physical
conditions change, technology changes, participants change, institutions
change, rules change. The rules themselves are at three different levels:
operational (day-to-day), collective-choice (policies of the appropriators),
constitutional (legal, big-picture laws and rules). Rules within rules
complicate the analysis, clearly. Theoretical analysis usually proceeds by
studying the rules at one level, keeping those at other levels unchanged.
STUDYING INSTITUTIONS IN FIELD SETTINGS
Ostrom examines a
series of cases of successful and failing self-organized CPRs to “advance
theoretical understand of a theory of self-organized collective action….” The
systems analyzed were as young as 100 years old and even older than 1000 years.
The successes have as a notable characteristic the conformance to the rules of
the organization despite the large value to successful cheating and the
relatively small cost of the fines for cheating. Ostrom derives some principles
from these analyses, and she notes that some of these principles are contrary
to what market economists would recommend, including the retaining of communal
real property rather than the maintenance of individual property rights. These examples come from Swiss, Japanese,
and Spanish cases.
The examples are
interesting. In the Swiss community of
Torbel, rights to graze on the common property were limited to locals or to
those admitted to community membership. To keep any one owner from grazing an
excessive number of cows on the commons in the summer, they were limited from
the year 1517 on to the number that they fed over the winter, a “wintering”
rule enforced by a local official, who kept half of any fines for himself. The
local alp association “includes all local citizens owning cattle” and meets
regularly to vote on the rules to be applied. Fees and share of the cheese
produced are assigned pro rata by the
number of cows grazed by each family/owner. Much private property exists
outside the commons, and it is maintained and passed on by inheritance by the
families that own it. When harvesting the trees, the villagers form communal
work groups, create many roughly equal piles of timber, and allot these by
lottery.
Ostrom cites work
that states the Japanese have had
extensive use of commons land for centuries and have devised “rules, monitoring
arrangements, and sanctions…for regulating the commons” successfully. The
common lands exist side-by-side with private plots. The commons lands typically
are not as bountiful per acre as the private lands, due to geographical and
other physical features. Hay was, for example, harvested communally, then
baled, and the bales allocated evenly by lottery. Households were required to
contribute assigned amounts of labor. Village detectives and even “citizen’s
arrest” were used to enforce the rules. Equipment and harvested material might
be confiscated, and extreme cases could lead to ostracism and banishment.
Huerta irrigation
institutions were initiated in 1435 in the Valencia region of Spain, Ostrom explains, to determine
who had the right to take water from the canals and who would do what to
maintain them. They formalized rules, some of which were in place for about
1000 years, rules which lessened conflict over precious water in the semi-arid
region. Land with ancient history of getting water has special rights to
continue to be irrigated, with a quantity of water proportional to its area. In
times of abundance, certain other lands can also receive water. Water courts
meet weekly to settle disputes regarding water from the seven canals from the
Turia River. The rules of apportionment change somewhat depending on whether
there is “abundance” (rare), seasonal low water (usual), and extraordinary
drought. During seasonal low water, the flow is directed through each of the
canals in turn and then to farmers, from the head to the tail of the canal. A
farmer can take as much as he wants but must not waste it. During extraordinary
drought, steps are taken to direct the flow to those whose crops are in
greatest need of it. Much monitoring is needed, largely by the farmers and
“ditch-riders.” “…everyone is watching everyone else….” The fines were
relatively small compared to the value of cheating, but honor and reputation
weighed heavily, according to analysis of records from the 15th century.
Murcia and Orihuela along
the Segura River also had rules for controlling the distribution of water in a
region more arid than Valencia. Most of the farms were smaller than 2.5 acres
(a hectare) and 86% were smaller than 12.5 acres. Irrigated and non-irrigated
lands were designated long ago. “Each farmer is assigned a tanda, a fixed time period during which he may withdraw water,”
thus knowing when and how long, but not how much, water will be available,
helping him to plan and giving an incentive not to waste the water. Under
drought conditions, other rules apply. There are formal agencies and procedures
to regulate all this, and the court procedures are “oral, public, summary, and
cheap.”
Alicante is a smaller
area with even less water, but the building of the Tibi Dam in 1594 roughly
doubled the available water. A system of marketable (even rentable) water
rights developed that distinguished between pre-dam and post-dam rights and has
a regular auction of the rights. The managing syndicate also has 90 hours of
water rights that it sells, given to it in 1926 to underwrite the cost of
managing the system. The water is supplied to the canals in rotation. The
farmers pay the ditch-riders for the water used. Voting rights and rights to
elective office depend on amount of land owned.
Political scientists
and economists who have studied these Spanish water-allocation practices have
concluded that the Alicante system has worked the best and that all three water-sharing
systems created a net benefit for the communities involved.
Zanjera Irrigation
Communities in the Philippines “determine their own rules, choose their own
officials, guard their own systems, and maintain their own canals,” Ostrom
notes. Often the irrigation systems are constructed by tenant farmers who are
given the right “to the produce from a defined portion of the newly irrigated
land.” Each member of the zanjera has
a single vote and has assigned duties and material-obtaining obligations. Each
area is divided into three or more sections “Each farmer is assigned a plot in
each section,” meaning each farmer has some of the best and some of the worst.
Some land at the tail end of the flow is assigned to the officials, giving them
an incentive to try to get water all the way to the end. Some land provided
income for the zanjera itself.
Getting the “volunteer” labor for fixing the system in monsoon periods or
extreme heat waves is a continuing challenge. The number of days of work
obligation in 1980 ranged from 32 to 86, depending on the ownership details.
Attendance was about 94%, surprisingly high. Water is usually abundant, so the
enforcement of rules centers on the work requirements. During droughts, strict
enforcement is used to assure that those even at the end of the flow channels
get water, which is in general apportioned roughly in accord with the work and
materials contributions. The water apportionment is sub-optimal regarding crop
production but has general acceptance in the community, an important advantage.
SIMILARITIES AMONG THESE EXAMPLES
Ostrom notes the
following similarities:
•
uncertain and complex environments,
•
stable populations,
•
extensive communal norms,
•
group homogeneity,
•
sustainability,
•
institutional robustness.
That the rules are
rather different from one country to another may indicate that they have been
tailored to the situation and the mores of those involved. Ostrom tentatively
suggests that the following design principles hold:
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
mechanisms.
7. Minimal
recognition of rights to organize.
8. Nested
enterprises [for CPRs part of larger systems].
Ostrom then presents
the case that these principles are needed to obtain commitments, assure
monitoring, and support the replication of the CPR institutions across
generations.
We note that recent
laboratory research by Fowler and Christakis (2010) found that the good example
of some individuals in providing for others stimulated similar responses in
observers in social networks who had nothing formally to gain from being
similarly generous. Some of this likely operates in the situations studied by
Ostrom. This goes beyond tit-for-tat, quid
pro quo, as these observers were not recipients of the favors, nor could
they expect favors in the future from this onetime set-up. They were influenced
by the good examples.
SOME COMPLEXITIES OF L.A. WATER RATIONING
Ostrom (2015)
presents the results of analyses of water rationing policy in the Los Angeles Basin she studied in the
1950s and 1960s, finding the following historical categories of priorities in water rights:
•
Those owners of land overlying the groundwater
supply who used the water right on that land (“landowner”). They had rights to
full flow of the water, except during a period of extreme scarcity. During
periods of scarcity, neighbors had the right to siphon water even if it reduced
that available to the landowner, who would legally be allowed only a
proportionate claim to the water he could put to beneficial use rather than an
absolute claim.
•
Those owners of land overlying the groundwater
supply who used the water to serve areas other than on that land
(“appropriator”). Examples included private and public water companies. The
appropriators were encouraged to “withdraw ‘surplus water’ or water that was
not being put to beneficial use by the overlying landowners, the amount depending
on when the appropriator started to withdraw the water, how much he put to
beneficial use, and whether or not the use was continuous.” This is the
familiar “prior-appropriation” regime. However, “the rights of the most senior
appropriators were potentially subordinate to those of overlying landowners.”
•
Some appropriators gained water rights by the
common-law doctrine (like “adverse possession” of real estate property) of “adverse use.” To understand this, one
needs the definition of “surplus water,” water that was above that of the “safe
yield” (average yearly addition of water to the basis) and was not being put to
beneficial use. “An appropriator had to take non-surplus water openly and
continuously for more than five years to perfect prescriptive rights. Once
perfected, prescriptive rights were superior to those of overlying owners and
appropriators.” This was a license to take water when a surplus existed, which
often was known only retrospectively.
Ostrom (2015) noted
that this boiled down to “open-access CPR for which clear limits have not been
established regarding who can withdraw how much water.” Much litigation was
generated, but the overlying landowners faced the possibility of paying for
court cases ultimately lost because the court ruled the defendant was
withdrawing surplus water only or, if they waited too long to go to court, they
could lose because the appropriators had been using the water so long they had
“perfected” their rights to take the water. The incentives for excessive withdrawal
were substantial and the lack of knowledge about the actual water supply was
widespread. Pump now, defend later
became the pattern. Fortunately, through a series of steps, “the participants
used public arenas to impose constraints
upon themselves,” as Ostrom (2015) emphasized.
The Raymond Basin
Ostrom (2015)
presented a game-theoretical analysis of the situation faced by the city of
Pasadena and 30 other municipalities in the Metropolitan Water District of
Southern California, which had led to a court case, the water referee for which
found that “the yearly withdrawals from the basin were 29,400 acre-feet,
whereas the safe yield of the basin was 21,900, leading to an annual overdraft
of 8,500 acre feet per year.” The rights of the participants depended strongly
on whether the judge decided there had been no surplus for over five years and
thus the appropriators obtained superior rights or that overlying landowners
had rights to a certain amount of the supply, and what was left over was
“surplus” to be divided among the appropriators according to their seniority.
Other outcomes were possible. Both groups had possible large losses as well as
litigation costs. After much negotiation, the parties agreed to a settlement
that treated all as having openly used the water during more than five years of
shortage and all (with one small exception) were granted their proportional
rights to the safe yield amount, with the right to trade with each other. A
watermaster and water pool were established. The solution was more rapid and
likely less costly than continued litigation.
The West Basin
The West Basin is
adjacent to the ocean and, at 170 square miles in area, is much larger that the
Raymond Basin, from which the users could take their cue. However, there were
roughly 500 parties, no one dominant, though 19 were major, and the risk of sea
intrusion affected only those on the coast. During and right after World War
II, the coast areas noted increases in well water salinity. By 1945, a
committee had determined that an ongoing association was needed, that
alternative water sources needed to be discovered, and that legal action like
that of the Raymond Basin was needed to reduce pumping and establish rationing.
A newsletter was established that disseminated for nearly a decade the
information being developed on the West Basin.
Most West Basin users
were in favor of the approach of proportional allocation used for the Raymond
Basin. Several entities remained holdouts. The referee’s report was a major
surprise: it put the safe yield at only 30,000 acre-feet per year, but the
groundwater withdrawals had already reached 90,000 acre-feet per year by 1952,
requiring a two-thirds reduction. Negotiations continued, using the West Basin
Water Association as their locus, and it established a Legal Settlement
Committee of 11 members, a committee Ostrom credits with changing the
perception of the problem and its solution. The committee was expected to favor
a proportional-reduction solution. Eventually, via “Prescriptive Rights, 1949,”
amounts of water were established, and the users were urged to sign a
contingent contract to reduce their use to this level (a total of 63,000
acre-feet) if 80% of the users also agreed to it. This interim agreement went
into effect in November 1952 and held for seven years with only a couple of
hold-outs, the California Water Company that voluntarily reduced its use, and
the city of Hawthorne that increased its use, arguing that a city’s needs were
more important than the industry users’ needs. By 1961, 82% of the adjudicated
rights had signed a binding final agreement, partly inspired by early signing
done by the largest user, the Dominguez Water Corporation. The agreement was
made final by court order. The non-signatories, including Hawthorne, were ordered
to comply too. Hawthorne appealed and lost. “…the adjudication in Raymond Basin
amounted to an annualized cost of 50 cents per acre-foot of water rights
allocated whereas the adjudication costs in West Basin amounted to an
annualized cost of $2.50 per acre-foot of water rights.” Annual costs of
monitoring in each basin was approximately $3 per acre-foot, thus higher than
the one-time adjudication costs.
The Central Basin
The Central Basin is
the largest of the three (277 sq. mi. surface) and used by about 750 well
owners in the 1950s, with little coastal exposure. A Central Basin Water
Association was formed with the hope it would be able to learn from the
experiences of the Raymond and West Basin associations. Before going to court,
Central employed experts to determine current conditions and past usage, and
they obtained an interim agreement signed by holders of 79% of the rights
before going to court. A 20% reduction was agreed to. In the end, the minimal
litigation costs were about a half-million dollars.
Comparison
of These Cases Ostrom notes the following:
The Raymond situation was simplified by the
dominant usage of Pasadena (50%), which took early action before the numerous
smaller pumpers had become accustomed to large withdrawals; treating all users
as appropriators equally allowed a proportional reduction strategy to be
accepted.
The West Basin problems included having
many parties, no dominant party, and asymmetrical risks of inland vs. coastal
pumpers. Proportional reductions again were the outcome, though not enough
reduction was obtained to reach the safe yield matching the average input.
The Central Basin had the advantages of
more time to decide and less coastal/inland asymmetry of interests, and they
acted before it would be necessary to cut back more than 20%, aided by the
early adoption of expert engineering advice.
Several decades have
passed, with only insignificant infractions. Watermasters keep accurate,
detailed records and make them readily available, making the information
“common knowledge” in game-theory parlance. The watermasters do not initiate court
actions, remaining neutral providers of reliable information. Rare infractions
have usually quickly stopped, although newcomers have needed to be targets of
some legal actions. The watermaster budgets are two-thirds paid by the rights
owners, and they can petition to have a watermaster removed if not satisfied.
“The Polycentric Public-Enterprise Game”
To the public bodies
already involved was added the Central and West Basin Water Replenishment
District in 1959, with the authority to tax, sue, and provide collective goods;
it has “restored water levels throughout both basins, has completed a
freshwater barrier…and it now engaged in focused efforts to eliminate pumping
troughs….” The costs are low compared with adding surface water storage
facilities. It receives the funds assessed on all water pumping operations
throughout the two basins and eventually changed suppliers of its water to
obtain even lower costs.
“…private water
associations remain active in each of the basins.” Public officials meet with them
frequently. The same people are often active in both the public and the private
associations at different times in their lives. A market for water usage rights
has developed. “This system is neither centrally owned or centrally regulated.”
“Markets for water
rights have emerged in all of the southern California basins that used
litigation to assign defined water shares to parties.” Typically, the
agricultural users have slowly sold their rights.
“The Analysis of Institutional Supply”
Ostrom (2015) notes
how institutions have developed to offset the logical desire for the pumpers of
water to pump as much as they want/ can/need and ignore the long-term
consequences of so doing, setting off a “pumping race,” for decades, even as
water levels fell and salt water intruded from the sea. Surprisingly, to those
believing in the “tragedy of the commons,” these same users came together to
establish and fund institutions to maintain the water supply they need. The
process involved many small steps, and the participants could observe the
actions of others and the results, learning from each other. Their discussions
helped shape litigation strategies and develop sound knowledge about the basins
to shape enforceable agreements to benefit many rather than a few. The pumpers
paid most of the costs, but the state of California contributed as well,
especially through the provision of facilities and technical advice. Home rule
principles helped in the formation of various water districts and associations.
The key to success in Ostrom’s opinion is an “incremental, sequential, and
self-transforming process of institutional change….”
Ostrom writes that one
should assume “that all recurring situations are shaped by a set of
institutional rules…. prescriptive statements that forbid, require or permit
some action or outcome.” [Our emphasis.] She notes that the costs for
establishing, changing, and administering the rules can be major, but need not
always be so. Small changes typically have small costs and yet may have large
pay-offs. Whether such changes are adopted depends on their perceived costs and
benefits versus the status quo. Ostrom then goes on to analyzing situations
that had failures in establishing successful institutions (her Chapter 5) and
those that did meet with success (her Chapter 6).
“ANALYZING INSTITUTIONAL FAILURES AND
FRAGILITIES”
Ostrom (2015) gives
numerous examples of unsuccessful attempts to establish common pool resource
governance.
Two Turkish inshore fisheries: Bodrum has a few hundred fishers in
its inshore fishery, which was successful up to the 1970s, when the Turkish government
encouraged the construction of larger trawling vessels for use in the area. The
policy led to many newcomers, and the value of fishing there dropped below the
costs, the total catch remaining about the same but the cost per unit caught
increasing. A voluntary association failed. The new conditions produced six
distinct interest groups:
•
Small-scale coastal fishermen,
•
Larger-scale operators,
•
Semi-professionals,
•
Unskilled sport fishermen,
•
Spear-fishermen, • Charter-boat operators.
The Bay of Izmir has
much the same set-up with ten times the operators, “too many fishers chasing
too few fish.” The diversity of interests has led to a lack of cooperation and
the formation of institutions to manage the fishery, with Turkey itself ruling
by “benign neglect,” with few rules and little enforcement. Size differences
and the heterogeneity of interests made finding compromise rules difficult.
Ostrom concludes, “In a political regime that does not provide arenas in which
low-cost, enforceable agreements can be reached, it is very difficult to meet
the potential high cost of self-organization.”
“California Groundwater Basins with Continuing CPR Problems” form another set of failure
examples. The groundwater users of San Bernardino County are in an “overdraft
condition, even though efforts have been made to allocate water rights through
litigation and the creation of water districts.” Overdrafts have been recorded
there since the 1950s. Ostrom (2015) tries to determine why. One reason is
implicit in her description of the county: it is enormous, large enough to
contain the states New Jersey, Hawaii, Connecticut, Delaware, and Rhode Island,
and over 80% of it is part of the Mojave Desert. Adding to the complexity: the
basins are interconnected with underground channels.
A Mojave Water Agency
(MWA) was formed, and in 1960 empowered to tax to support an aqueduct to allow
the residents to claim 50,800 acre-feet of water per year. Merely as a source
of water, the Agency could have led to the development of many smaller agencies
for managing the flows. Instead, the MWA was viewed by some of its leaders as
the logical site for over-all control of the water in its domain. Issues that
arose included:
•
Is the region a single underground river or some
combination of a river and groundwater basins?
•
How much of the region was experiencing
overdrafts?
•
Should all groundwater pumpers be treated as
equals?
•
Should any administrative settlement be
determined by the larger pumpers in the north or by all pumpers?
•
How should water rights and land rights be
treated?
The principals viewed
the area as “a single underground basin with a well-documented history of
overdraft conditions…all groundwater pumpers as having coequal rights….” They
tried to separate land and water rights. “No voluntary water associations were
created to facilitate discussion of these issues, and no consensus emerged….” A
political free-for-all developed. “No action has since been taken to limit
groundwater pumping,” Ostrom notes. The diversity of the interests and of the
problems and their scale has led to their not being handled effectively, she
concludes.
Sri Lanka
Ostrom also describes
the failure of local and national institutions to correct for the destruction
of a once-effective means of local determination of the right to fish on a
beach in the Sri Lankan village of Mawelle. Lack of enforcement, along with bribes
and cheating and political corruption and power, has led to economically
unproductive conditions generally viewed as unfair. “External intervention to
prevent rule enforcement against political favorites undermines the viability
of common-property arrangements,” Ostrom concludes.
To try to get rule
changes or favorable interpretations, local users will be seen to be at an
advantage when dealing with officials who are not local and thus have a weaker
grasp of the local facts.
“Irrigation Development Projects in Sri Lanka” provide more
examples. Although new varieties of rice help improve output, Ostrom notes that
the major factor is the land under cultivation, mostly controlled by the extent
of irrigation by small dams and long canals on this island nation, and these
irrigation projects have consistently failed to live up to the projections made
for them when the money was allocated by the government. Costs have exceeded
benefits. Rice yield is sensitive to water shortage and insensitive to water
over-abundance, so there is no incentive to conserve watering; in fact,
over-watering is effective at controlling weeds.
The only incentive to
moderating the use of water is its cost, but the farmers pay little or none of
it. The water is not efficiently used, and the yields are below optimal. The
farmers take as much as they can get away with, and they resist efforts to
limit their usage. Those upstream take water that leads to shortages
downstream. A schedule for releases of water from the tanks (“bunds,” dams) was
set by the government, and there were local officials empowered to monitor the
use of the water by the growers, officials who were paid a fraction of the crop
yield. Two releases per year were scheduled, but their timing produced certain
winners and losers and so became a continuing issue.
When the British lost
their authority in Sri Lanka (formerly Ceylon), local government set up a
different system, with relatively frequent releases of water, meaning more was
lost to seepage than before. The water-use monitors had less authority, too.
They were no longer paid in proportion to the crop yield, and the administrator
of the system was made less accountable to outside authorities. Water theft
became widespread and enforcement became more political.
One study found the following problems:
•
Poor interaction exists between regulators and
cultivators.
•
High exam scores are not associated with good
work performance.
•
Few incentives exist for good work.
•
Bureaucracy devalues performance.
•
Personnel are overworked and underpaid.
Throughout Sri Lanka
similar problems have resulted in having the farmers at the lower ends of the
irrigation systems face highly variable water supplies, and those in charge are
unable or reluctant to fix the problem. Prosecutions are political and rare.
Water is used instead of laborers to keep down the weeds, at a higher social
cost. Ostrom notes the following contributing
factors to the poorly functioning system:
•
Large number of farmers,
•
Most settlers are new, with little attachment to
the land,
•
Extreme diversity of ethnicities and cultures,
•
Large political leverage of major land owners, •
Poor control structures in the
irrigation systems.
Sri Lanka got farmers
to agree on watering times and amounts by dividing the river into three areas –
upper, middle, and lower – and giving each farmer some land in each area, so
all farmers had an interest in seeing that the bottom third of the area was not
short-changed.
Ostrom then describes
a successful small program in
another part of Sri Lanka, the Gal Oya
irrigation system. Initially, there was much distrust between the farmers
and officials and between downstream Tamil speakers and upstream Sinhalese. A
pilot program used collegeeducated members of the community to form small
groups of farmers sharing local water channels to help plan rehabilitation of
the channels, for which work they would be providing labor and would be
interacting with engineers. Larger groups were formed from the smaller ones,
and these held problem-solving meetings.
At the next higher
level, these groups were combined to form Distributory
Channel Organizations (DCOs), 100-300 farmers managing about 200-800 acres.
Two higher levels of organization were formed similarly to establish a bottom-up pattern. Farmers report better
relationships with the officials and more equitable distribution of water
supplies, in an area where in the past there had been murders due to water
disputes. Farmers and Irrigation Department officials reported significantly
improved relationships, even across ethnic lines. Yields increased at modest cost. Ostrom and the participants
attribute some of the success as being due to the bottomup strategy of
supplying “human catalysts” to form the basic local farmer groups from which
the larger, upper levels of the program were formed. Consensus was preferred to voting; results were publicized and
recognized, and proposals from the farmers were treated seriously by the
officials and farmers and officials came to agree on the value of the farmer
organizations.
Ostrom’s “The Fragility of Nova Scotian Inshore” highlights
a different kind of common-pool resource problem, the fragile nature of some of
these systems. The east coast of Canada has many fishing areas that have
established systems for who can fish where and how and when. The inshore area
has boats that are used from the end of March through December. One such area,
with the pseudonym “Port Lameron” extends 25 km out from the coast and 20 km
along it. Various areas are exclusive to specific types of fishing, mainly for
practical reasons, “a low-cost system for apportioning a reasonable yield to
all participants…. based on an easily observable factor….” Families view
themselves as having exclusive rights due to history. Conflict occurs during
periods of scarcity, however, with the locals using persuasion primarily to
repel outsiders. While Newfoundland law
supports this informal system, the Canadian federal law opposes it, viewing
the eastern coast as open-access, an extension of their policy on the 200-mile
offshore limit. It has started licensing fishing boats, leading those who are
not licensed to pursue getting one just to be safe in case the policy is
extended and enforced, and this more than doubled the number of licensed
fishers in a five-year period. The locals have often objected to the federal regulating
of an area they once controlled. Ostrom
notes, “it is doubtful that any national agency can ever have the extensive
time-and-place information needed to tailor a set of rules to the particulars
of local situations.”
Similar federal
usurpation of local rules has caused problems along the coast of Brazil and
within the forests of Nepal, she writes. In Nepal it was reported that the villagers started a “free-riding”
over-exploitation of the forest, believing that they had lost control of this
resource to the government. A reversion to more local control proved
beneficial.
“Lessons to Be Learned”
Ostrom (2015)
analyzes the failing cases by comparing them against the principles she found
to be holding for the successful CPR arrangements. She concludes the principles
“clearly differentiate between the success and failure cases.” Recall the
criteria/principles:
1. Clear
boundaries and memberships,
2. Congruent
rules,
3. Collective
choice arenas,
4. Monitoring,
5. Graduated
sanctions,
6. Conflict
resolution mechanisms,
7. Recognized
rights to organize,
8. Nested
units,
9. Institutional
performance.
She applies these
categories/principles to the 14 sets of examples: “Thus, no more than three of the design principles characterized any of
the cases in which CPR appropriators were clearly unable to solve the problems
they faced.” Some of the cases are borderline, having some desirable
characteristics, lacking others or having fragility in terms of protecting
their procedures. She acknowledges that the examples are limited and do not
conclusively show how to distinguish among the robust, fragile and failed
arrangements.
“A Framework
for Analysis of Self-organizing and Self-governing
CPRs”
At first, the
“tragedy of the commons” and “Prisoners’ Dilemma” models suggest individuals
will work against each other unless there is a higher authority to set and
enforce the rules, especially where the individuals cannot readily change the
rules. Ostrom argues that some cases demonstrate solutions to this problem by
providing their own “second-order” (governing) institutions: marketable rights
and/or pubic ruling bodies independent of central authorities, but that it was not necessary either to privatize
the resource or to regulate it by a central governmental authority. The
institutions depicted may not have been optimal, but they have survived. She
calls for further study of the factors that distinguish problems the
participants can solve and those that must be solved by higher-level
authorities.
Ostrom in a footnote
cites a comment that others who model central authorities as wise and
ecologically aware tend to presume “the users of CPRs will be myopic,
self-interested, and ecologically unaware hedonists.”
Ostrom accepts the
inevitability of failure shown in certain cases (such as some fisheries) when:
1. Participants
cannot communicate.
2. All
act independently.
3. Future
damages due to individual actions are ignored.
4. Costs
of establishing regulating institutions are high.
In some circumstances,
however, “smaller-scale CPRs that are the focus of this inquiry…. repeatedly
communicate and interact with one another in a localized physical setting…can
learn whom to trust, what effects their actions will have…how to organize
themselves to gain benefit and avoid harm.” Over the long-run, such CPRs can
establish institutions allowing them to resolve CPR dilemmas. Communication and the ability to change the
rules break the bonds of the Prisoners’ Dilemma. Simple models are
attractive, but they can mislead. More realistic models, especially allowing
the participants to change their rules, will lead to more realistic results.
“The Problems of Supply, Credible Commitment,
and Mutual Monitoring”
Adopting new
institutions, gaining commitment to them, and monitoring compliance are needed
for success. A successful CPR, to gain commitment, needs to:
1. Define
its users.
2. Have
rules suitable to the resource and its users.
3. Have
rules designed by local users (appropriators).
4. Be
monitored by “individuals accountable to local appropriators.”
5. Have
violations sanctioned by graduated punishments.
Rules share this syntax: specified persons are (required,
forbidden, permitted) to take specified actions under specific conditions.
Commitment can be
expected if “similarly-situated individuals adopt the same commitment” and if
the net benefits of being in the organization exceed those of being outside it.
Monitoring is needed, and at least the sanction of “I will if you will.”
Graduated sanctions are needed partly because exceptional circumstances may
arise where a member believes he needs to break the rules to survive, but the
group does not want to destroy or expel him. Lack of monitoring and
enforcement, however, gives incentives to cheat, eventually destroying
commitment of others. It is tricky to get the right set of conditions that make
individuals “find it advantageous, credible, and safe to pursue contingent
commitments to rule compliance and mutual monitoring.”
Success is contingent
on the ability of the participants to create new institutions and new rules to
evade the negative incentives of the tragedy of the commons.
Collective action (including the establishment of new institutions)
by individuals has been shown (Ostrom, 2015) to be influenced consistently by
1. the
number of decision makers,
2. the
minimum number needed to obtain the benefit,
3. the
discount rate (how future money is valued today), 4. similarities of
interests/priorities,
5. the
presence of talented leaders.
Real situations are still more complicated, and Ostrom criticizes
current theory as often being inadequate for making policy recommendations. For
example, larger groups are hard to organize than smaller ones, but by using
nested organizations (groups of groups of groups), this can be overcome.
“Several of the Spanish huertas are
three or four layers deep.”
Starting with numerous small organizations worked in several areas
around the world. Some of the larger organizations were government bodies to
which the smaller groups belonged. Small successes build to larger ones. The
small groups may need help in enforcing their rules, however. In some cases,
members of the smaller group have succeeded in getting a governmental body to
keep the group from having enforceable rules. Interaction with government
bodies needs to be considered in predicting success or failure. The costs of
accurate information and of reliable transactions also play an important role
and cannot be ignored.
Ostrom
summarizes three problems in the current
theories of collective action, because they overlook:
1. incremental,
self-transforming nature of organizational
change,
2. how
external political regimes affect
creation of local institutions,
3. information
and transaction costs.
Ostrom notes the
shortcomings of most models is that they start with an assumption of the
structure of the system rather than showing the “analyst how to discover the
structure of the situation….” Many limiting cases are built into the models to
make them solvable: participants with complete information, independent action,
zero-cost monitoring, and a fixed structure. To get beyond the limits of models with unrealistic assumptions,
Ostrom posits a framework.
“A Framework for Analyzing Institutional Choice”
This “identifies sets
of variables that are most likely to affect decisions about continuing or
changing rules.” In some sense, this is a meta-analysis, built on top of the
models that have fixed rules. One is examining the situation “from the
perspective of the individuals making choices about future operational rules.”
In a simple modeling
context, Ostrom has her rational decisionmakers consider:
1. expected
benefits,
2. expected
costs,
3. internalized
norms,
4. discount
rates.
Such decisions are
made within the institutional framework, which presents the further
alternatives:
5. to
support the current rules,
6. to
support changing the rules,
and the outcome of
the decision will depend on others also in the institution. Arguably, the
individual could apply 1-4 to analyzing the implications of 5 or 6. An optimal
strategy for an individual could be obtained by using
7. accurate
summary measures for the crucial variables (costly),
8. correct
translation of the information into expected benefits and costs (hard from
afar),
9. assuming
straightforward (honest, cooperative), rather than strategic, action.
“…few field situations are characterized by
these three conditions, or even one or two of them.”
For example, in evaluating benefits, Ostrom gives some
examples of important issues:
1. Predicted
resource flows and values under the status quo and the proposed change?
2. Variability
of resource flows under the old and proposed new set-up?
3. Expected
quality differences?
4. Lifetime
of the resource under the old and proposed new rules?
5. Impact
of the proposed change on conflict among resource users?
The ease or
difficulty in answering these questions will vary from situation to situation,
influenced by:
1. Number
of appropriators,
2. Size
of the resource system,
3. Variability
of the resource over space and time,
4. The
starting condition of the resource,
5. Market
conditions,
6. History
of conflict,
7. Availability
of data on past and recent conditions and utilization,
8. The
current rules,
9. The
proposed rules.
She notes that of
these, only the first is routinely included in analyses. Larger and more
variable systems are hardest to model and analyze. In some cases, the users may
naturally be motivated to keep useful records or to start doing so in
anticipation of changes. Monopolists may well prefer secrecy. Monitors and user
organizations will tend to obtain and maintain useful data.
A rational individual
will form his opinion about proposed changes based on the conditions of the
common-pool resource, the information being made available, and the proposed
rules. Benefits are hard to
determine.
Similarly, evaluating costs turns out to be
difficult, though usually not as difficult as predicting and costing benefits.
If merely setting up new rules is costlier than the likely benefits, then no
change will emerge. A proposed change that passes this first test must also be
economically advantageous when tested for expected monitoring and enforcement
costs.
The transformation
costs are those incurred in setting up the new system. They are affected by
many of the variables listed above. Skillful leaders can lessen them. Those who
gain significantly from the proposed changes can be expected to help pay for
them.
Setting up voluntary private organizations tends to be less costly than
creating governmental structures of comparable size. Benefit/ cost ratios
favor small initial steps of low cost and substantial benefits. Confrontational
strategies and competitive rule-making are likely to result in higher costs
than would cooperative efforts. An ethos of cooperation within the member group
will require less detailed rule-making than an ethos of
competition/confrontation. Windfall gains or losses can make participants leery
of future changes. Bribes may be paid to gain regulatory advantages corruptly.
Rules for deciding what changes in rules shall be adopted can make such
decisions costly. Writing a new charter may be less expensive than running a
referendum. Officials may have leeway in granting exceptions.
Fowler and Christakis
(2010) found that the good example of some individuals in providing for others
stimulated similar responses in observers who were strangers who had nothing to
gain from being similarly generous. This extended for three degrees of
separation, person-to-person-to-person. People mimicked the behavior of others.
“Remote” individuals
will likely have more autonomy than those located close to the central
authority governing the CPR, and “remote” will be a function of distance and of
technological and administrative factors. Many factors will weigh in to determine
the degree of autonomy of those within the CPR.
Past decisions will
strongly shape current and future ones. For example, allocating a specific
quantity of a resource to a user will favor the subsequent development of a
market for the resource. Allocating rights to various constituencies on a
proportional basis makes it hard to change these rights in the future.
Status-quo rules tend to be given precedence because of the strong resistance
of potential losers to any such changes. Some resources are more easily
“fenced” and protected from outsiders than are others.
Shared norms among
the users make it easier to monitor and enforce resource use. Prohibition is
easier to police than are rights to use that vary in magnitude. “Seasons” are
easier to enforce than quantitative limits on “catches,” quotas. Rules
specifying technology to be allowed are easier to enforce than are quotas.
Rules that involve “taking turns” are easier to enforce than quotas, too.
Sometimes, governmental sanction will be needed to help organizations enforce
their private rules. At the other extreme, some indigenous people have had
their customs, mores, rules over-ridden by a central government not sympathetic
to them.
The impact of shared norms deserves consideration.
One kind of norm is that held by an individual, who may feel guilt at violating
it. Another kind is held by a group to which the individual belongs, where
shaming or ostracism might result from its violation. Some norms have both elements.
Neighbors tend to favor neighbors when issues arise, and they tend to disagree
with “foreigners.” Both sides are less likely to respect the opinions and
promises of the other.
Ostrom writes in
terms of “discount rates,” used to weigh the value of future costs and benefits
against their present values.
To calculate the present value of a sum of money M(i)
obtained in the ith year from the present, one must discount that future value
using a discount rate r(i) that reflects the equivalent interest rate of the
next best investment for that year on a secure investment. Some analysts use
the interest rate on a safe bond of that maturity.
The present value
equals the future monetary value divided by raising the quantity
one-plus-the-discount-rate to the ith power, where i is the number of years in
the future:
PV(0)
= M(i)/(1 + r(i))^i
Secure returns will
be viewed as having smaller discount rates, r(i), and thus larger present
values, PV, than insecure ones, which are “discounted” drastically.
For example, for
money obtained in a year 30 years from now, M(30), one calculation of its
present value is
PV(0)
= M(30)/(1 + 0.032)^30,
Where .032 = 3.2% is
the current interest rate on a 30-year bond and the notation a^b means to raise
a to the bth power, so that 4^2=16, etc. So
PV(0)
= M(30)/(1 + 0.032)^30 = 0.39 M(30),
The present value of
M(30) is only 39% of the future value. In cases where there are not secure
investments, lenders would demand much higher r(i) to invest, and thus the
future value of M(i) is even smaller. Uncertain futures greatly raise the risk
of investment, thus the discount rate. When inflation is not negligible, it too
raises r(i).
If your need for
money now is much greater than you expect it to be in the future, or if your
confidence you will get that future payment is small, you use a high discount
rate to weight the value of the future payment. Uncertain future payments are
“discounted” in comparison with certain ones. “Individuals in a community where
disregard for the future is censured by others will have a lower discount rate
than will individuals …where no opprobrium is attached to seeking short-term
gain in preference to long-term benefit.” Those who highly value, or are
confident of, a future pay-off have a stronger incentive to uphold the rules
that preserve the common-pool resource than those seeking short-term results.
In an urban setting, this might be reflected in different priorities between
renters and condominium co-owners, for example.
The process of
changing an institution, such as an association, will reflect greater or lesser
skill among the participants, and as one association competes with others
similarly situated, we might expect “survival of the fittest” to produce
improved institutions over-all. “…surviving firms will choose strategies that
will maximize profits.” (Ostrom, 2015). This tells us that at equilibrium, the
most profitable firms should be those that are left, but it does not tell us
how they get there. However, sharing in the profitability of a CPR situation is
not nearly as directly incentivizing as making or losing money as an individual
institution, and the value of resource sales prices as a key to decision-making
is less evident. “Non-monetized relationships may be of importance.”
Choosing new rules is
harder than making most production or sales decisions. The impact is harder to
predict, and the responses of others in the CPR to them are harder to gauge as
well. “A new set of rules must be perceived as generating more benefits than
costs to at least a minimum wining coalition….”
Ostrom moves from the
nearly impossible task of predicting profit and loss from rules changes to
looking at what has been learned about human behavior as it pertains here:
1. Individuals
weigh potential losses more heavily than potential gains. Potential “crises”
facing the group weigh more heavily than surprise gains. Fragile systems are
harder to govern than robust ones. Some impacts become observable immediately,
while others are real but long latent. Costs often come first and
are unambiguous;
benefits come later and are harder to predict correctly.
2. People
find it hard to estimate future frequencies of occurrence, and they tend to be
strongly influenced by recent events. (Taleb, 2010, goes into this in depth in
his The Black Swan, also showing the
fallacy of assuming the normal, Gaussian, probability distribution.) A recent
shortage of water, for example, will lead some to predict a continued drought
and others to predict that nature will “catch up” to return to prior norms.
Rigorous data collection and analysis can help here. Appropriators will study
the results gained by others who have made rule changes like those being
proposed. (While “past performance is no guarantee of future results,” it is
logical to look at the past to try to estimate what will come; all of
experimental science is a series of studies of what happened, Y, immediately
after doing X.) Essentially, no two situations are identical, so to learn from
one requires knowing which differences count and which can be ignored, no easy
task.
Ostrom discusses predicting institutional change, noting
that knowing the CPR appropriators can found successful institutions for
managing the resource does not mean that they always will, given greater
benefits than costs, themselves hard to predict and evaluate. The forces at
work in the “tragedy of the commons” must be contended with. Some find
advantage in the particulars of the situation. Some will adopt “if it ain’t
broke, don’t fix it” as their operating premise.
“Ascher
and Healy carefully document an almost universal bias toward overestimating
benefits and underestimating costs of large-scale irrigation projects in Third
World settings.” [One might note similar occurrences in America where big
projects, like Boston’s Big Dig, have costs much larger than initial
estimates.]
Ostrom examines some
abstract cases to analyze predictability. First is a situation in which the
government is in some sense “remote,” so the CPR members are on their own.
Adoption of beneficial rules is favored when:
1. Most
members see a need for change.
2. Most
will be affected similarly.
3. Most
value the CPR highly, including its future use.
4. Most
face low information, transformation, enforcement costs.
5. Most
share reciprocity norms.
6. “The
group appropriating from the CPR is relatively small and stable.
Where the CPR
appropriators are not “remote,” these conditions can still apply if the
government reacts favorably to their rule-formation activities. For example,
the government may fund valuable research and supply such information
inexpensively to the CPR members. Courts help. The willingness to enforce
regulations and re-draw boundaries helps.
Ostrom contrasts the
absent or facilitative governments with those that step in to regulate the CPR.
She assumes honest legislators and regulators. Even so, the CPR members will
likely hold off forming their own organizations and wait for the government to
do so, “if someone else agrees to pay the costs of supplying new
institutions….” Informing the regulators about the details of the situation is
hard. Errors in design of the new institution are likely to lead some members
to take advantage of them. Regulators in a jurisdiction, other than one set up
for this purpose, are likely to apply uniform rules instead of tailored ones,
and inappropriate rules are hard to enforce efficiently. With corrupt regimes,
the problems become worse.
Especially in
underdeveloped countries, farmers prefer working their share, which they know
goes to irrigation, rather than paying money taxes, which could go anywhere.
Although the boundaries of private property need to be carefully delineated,
the rules associated with private property need not be more detailed and
stricter than those the regulate the use and support of common property. It has
been found that social disapproval can be very effective in governing CPRs.
“A CHALLENGE TO SCHOLARSHIP IN THE SOCIAL
SCIENCES”
Ostrom (2015) then
raises a challenge. “…one cannot encompass (at least with current methods) this
degree of complexity within a single model.” The challenge is to develop models
for specific niches and organizations, and yet not to become over-confident
about their accuracy and the utility in formulating governmental policy.
She states that most
modern economic theory has a world presided over by a government “and sees this
world through the government’s eyes,” a government advised by economists and
mandated to fix things. She provides a brief critique of one academic observer
whose analysis of the California groundwater basins ignores the possibility of
voluntary associations coming to what arrangements they find equitable. Social
scientists tend toward such governmental “solutions,” assuming the users are
responsive only to short-term maximization, but are blind to long-term effects,
assuming they cannot correct the situation without outside involvement, ignore
the voluntary institutions and procedures already in effect, and the
governmental solutions are often “themselves based on models of idealized
markets or idealized states.” Ostrom (2015) concludes her book with the advice
that social scientists not confine themselves to building models but also take
into account the wisdom of the classical political scientists who have preceded
us.
ABOUT ELINOR OSTROM
Derek Wall, a
supporter and biographer of the late Dr. Ostrom (Wall, 2017), notes she was the
first woman to win what was the equivalent of the Nobel Prize for Economics,
which cited her for “her analysis of economic governance, especially the
commons….” Examples include some parks and wildlife preserves, some fisheries
and forests, and even the Internet. The Prize committee credited her in 2009
with “demonstrating how local property
can be successfully managed by local commons without any regulation by central
authorities or privatization.” She made the case that democratic control in
some instances could manage the commons without government regulation or privatization,
and she did so by giving concrete examples of such success.
She shared an
interest in the political economy of the commons with her similarly academic
husband, Vincent Ostrom, who died only a few days after she did. Wall stresses
that Elinor Ostrom “saw economics as powerfully shaped by institutions” and she
had a continuing interest in the analysis of such arrangements by such
techniques as game theory. She was influenced by thinkers of both the left and
the right, though Wall is interested in convincing his leftist allies that she
can be viewed as one of them, because of her interest in communal management of
collective ownership.
Not a utopian
herself, she “seems an unlikely author of a set of rules for radicals,” despite
this biographer’s book’s subtitle. (Wall, 2017) She showed that a commons could
be made to work, and the common owners need not be usurped by government or
privatization. She sought a third way, neither the state nor the market. Her
2010 Nobel lecture she titled “Beyond Markets and States: Polycentric
Governance of Complex Economic Systems.” (Ostrom, 2010)
She and her husband
were inspired by the French essayist Alexis de Tocqueville’s Democracy in America, especially its
accounts of the participation by local people in local governance. She can be
viewed as a conservative or a radical, depending on what aspects one
emphasizes. She recognized the fallibility of human judgment and yet the value
of its use in self-government. She and her husband might best be described as
pragmatists, rather than ideologues. Wall’s book is meant to energize the Left
with the findings of the Ostroms, and the “Rules for Radicals” part of his
book’s title is chosen to echo the book title adopted by leftist political
agitator and community organizer Saul Alinsky.
I will continue serializing here the Microsoft Word transcription of the final galley proof .pdf copy ot WATER WARS, and the book itself is most conveniently found at amazon.com https://www.amazon.com/Water-Wars-Sharing-Colorado-River-ebook/dp/B07VGNLSMX/ref=sr_1_1?keywords=water+wars+by+carter+and+cooper&qid=1577030877&sr=8-1
or at DWC's amazon.com author's book title list https://www.amazon.com/s?k=douglas+winslow+cooper&i=digital-text&ref=nb_sb_noss
