Elinor Ostrom’s book Governing the Commons is a marvel. Though she was recognized in 2009 with the Nobel Prize in Economics for this work, it is still in my view not widely understood or shared. The simple lesson (told in glorious detail throughout her career) is that there is a difference between “Open Access Resources” and what she calls “Common Pool Resources” or CPRs. An open-access resource is one for which there is not an effective institution in place to prevent invaders from exploiting – and hence the resource is doomed to be depleted. CPRs have all of the physical and economic characteristics of open-access resources except that for whatever reason (luck, evolution, design, etc.) some communities have stumbled upon ways to prevent outsiders from exploiting (too much) of the resource stock. Some of these institutions may be simple reforms to government, others elaborate market-based applications – but in many cases a colorful range of hybrid institutions and customs are used to serve the role that either direct regulation or pure market-based (i.e. assign full-blown property rights) are typically thought to serve in the textbooks.
The story of her work is that there is a large and diverse set of arrangements across the planet whereby communities (almost all much poorer than the rich nations of today) have figured out ways to protect and preserve important amenities and resources. And when we say protect and preserve, we mean it. For example, in Chapter 3 of the book above, she summarizes the history of a small village in the Alps in Switzerland, three mountain villages in Japan, several river villages in Spain and a village in the Philippines that have managed to protect very scarce “commons” for almost a millenium. There’s a Hayekian story to be told there, but that’s for another day. What I’d like to draw from this work, and in particular her discussion in Chapter 3 is that there are lessons for how the United States might be able to overcome what seems to be its crippling lack of credibility in its political system.
Like the better understood natural resource “commons” (e.g. fisheries, water supplies, etc.) that require elaborate and well developed institutions to prevent them from being trashed, so too does the American political system. The commons in this case is voter trust, or perhaps our pocketbooks, or honest dealing. We can pass a zillion different campaign reform bills or vote for guys who tell us that they believe deeply in good government, but unless new institutions emerge to discipline bad behavior and monitor the political trashing of the commons then nothing will work. Let me perhaps illustrate what I mean by quoting her description of monitoring of one particular huerta in Spain’s Valencia river valley:
The level of monitoring that is used in the huertas is very high. In this environment of water scarcity and risk, many temptations occur to take water out of turn (wintercow: in this particular village the irrigation water is done on a “turno” system where members get it in a fixed order and can use as much as they want, if water runs out then when flows resume the next in line gets to go), or in some way obtain illegal water. As the time approaches for a farmer to take his turn at the water, he will tend his fields near the canal so that he can be prepared to open his own gate when the water arrives; if not prepared, he misses his turn entirely and must wait for he next round. While waiting, it is relatively easy to watch what those ahead of him are doing and watch the ditch-riders, whom he is paying. The ditch-riders patrol the canals regularly and are watched over by the syndic, who can lose respect, and his job, if the allocation of water is not handled fairly and according to the farmers’ rules. Challenges to the actions of a syndic, a ditch-rider, or another irrigator can be aired weekly before the Tribunal de las Aguas, with many of the other farmers watching the confrontation with interest. The reciprocal monitoring relationships are shown in Figure 3.2 (wintercow: I’m not going to draw it!). Given that everyone is watching everyone else, there is considerable potential for violence among irrigators and between irrigators and their agents. In medieval times, the norms related to honor probably exacerbated the potential for conflict, and hereters were “willing to fight in an instant if they felt that their water supply was jeopardized in any way (Glick 1970, p. 70).” The actual violence never approached the potential.
In the Japanese mountain communities, versions of “citizens arrests” for violations of the CPR were used, and the hired detectives who monitored the commons were given large personal stakes in detecting violations (including receipt of sake’). There are of course problems with this. But the lesson of the work and these examples (if we took time to reveal them all here!) is that monitoring and sanctioning are not done by third parties, hired guns, police forces and the like but rather by the participants themselves. Furthermore, while the sort of monitoring that is required would seem to be subject to free-rider problems, the fact that these are close knit communities with a lot of social capital built up (among other social institutions) seems to have prevented the free-riding from happening. I may have a soft spot for this idea because it is so similar to the reason why the Mutual Aid Societies in 19th and early 20th century America were successful. Although the country was considerably poorer, about 1/3 of Americans banded together to form various aid societies that were characterized by the enforcement and monitoring of the membership by the membership – and these memberships typically consisted of people from similar walks-of-life. Think about that for a moment. Maybe a sports analogy would help here. How would you, as a star basketball player, respond to criticism about the release of your shot from me, a lowly economics lecturer, as compared to if you were getting it from Ray Allen?
There is obviously no good single recipe to get our elected officials to represent us better. Perhaps if they were not playing with $6 trillion of other people’s money then the temptation would be lessened. But surely there’s something in the work of Ostrom that can inform how well “we” can govern the political commons. It’s an idea whose time has indeed come.