Common-pool resource

In economics, a common-pool resource (CPR) is a type of good consisting of a natural or human-made resource system (e.g. an irrigation system or fishing grounds), whose size or characteristics makes it costly, but not impossible, to exclude potential beneficiaries from obtaining benefits from its use. Unlike pure public goods, common pool resources face problems of congestion or overuse, because they are subtractable. A common-pool resource typically consists of a core resource (e.g. water or fish), which defines the stock variable, while providing a limited quantity of extractable fringe units, which defines the flow variable. While the core resource is to be protected or nurtured in order to allow for its continuous exploitation, the fringe units can be harvested or consumed.[1]

Common property systems

A common property rights regime system (not to be confused with a common-pool resource) is a particular social arrangement regulating the preservation, maintenance, and consumption of a common-pool resource. The use of the term "common property resource" to designate a type of good has been criticized, because common-pool resources are not necessarily governed by common property protocols. Examples of common-pool resources include irrigation systems, fishing grounds, pastures, forests, water or the atmosphere. A pasture, for instance, allows for a certain amount of grazing to occur each year without the core resource being harmed. In the case of excessive grazing, however, the pasture may become more prone to erosion and eventually yield less benefit to its users. Because the core resources are vulnerable, common-pool resources are generally subject to problems of congestion, overuse, pollution, and potential destruction unless harvesting or use limits are devised and enforced.[2]

Management

The use of many common-pool resources, if managed carefully, can be extended because the resource system forms a negative feedback loop, where the stock variable continually regenerates the fringe variable as long as the stock variable is not compromised, providing an optimum amount of consumption. However, consumption exceeding the fringe value reduces the stock variable, which in turn decreases the flow variable. If the stock variable is allowed to regenerate then the fringe and flow variables may also recover to initial levels, but in many cases the loss is irreparable.[2]

Ownership

Common-pool resources may be owned by national, regional or local governments as public goods, by communal groups as common property resources, or by private individuals or corporations as private goods. When they are owned by no one, they are used as open access resources. Having observed a number of common pool resources throughout the world, Elinor Ostrom noticed that a number of them are governed by common property protocols — arrangements different from private property or state administration — based on self-management by a local community. Her observations contradict claims that common-pool resources must be privatized or else face destruction in the long run due to collective action problems leading to the overuse of the core resource[2] (see also Tragedy of the commons).

Definition matrix

Excludable Non-excludable
Rivalrous Private goods
food, clothing, cars, parking spaces
Common-pool resources
fish stocks, timber, coal
Non-rivalrous Club goods
cinemas, private parks, satellite television
Public goods
free-to-air television, air, national defense

Common property protocols

Common property systems of management arise when users acting independently threaten the total net benefit from common-pool resource. In order to maintain the resources, protocols coordinate strategies to maintain the resource as a common property instead of dividing it up into parcels of private property. Common property systems typically protect the core resource and allocate the fringe resources through complex community norms of consensus decision-making.[3] Common resource management has to face the difficult task of devising rules that limit the amount, timing, and technology used to withdraw various resource units from the resource system. Setting the limits too high would lead to overuse and eventually to the destruction of the core resource while setting the limits too low would unnecessarily reduce the benefits obtained by the users.

In common property systems, access to the resource is not free and common-pool resources are not public goods. While there is relatively free but monitored access to the resource system for community members, there are mechanisms in place which allow the community to exclude outsiders from using its resource. Thus, in a common property state, a common-pool resource appears as a private good to an outsider and as a common good to an insider of the community. The resource units withdrawn from the system are typically owned individually by the appropriators. A common property good is rivaled in consumption.

Analysing the design of long-enduring CPR institutions, Elinor Ostrom identified eight design principles which are prerequisites for a stable CPR arrangement:[4]

  1. Clearly defined boundaries
  2. Congruence between appropriation and provision rules and local conditions
  3. Collective-choice arrangements allowing for the participation of most of the appropriators in the decision making process
  4. Effective monitoring by monitors who are part of or accountable to the appropriators
  5. Graduated sanctions for appropriators who do not respect community rules
  6. Conflict-resolution mechanisms which are cheap and easy to access
  7. Minimal recognition of rights to organize (e.g., by the government)
  8. In case of larger CPRs: Organisation in the form of multiple layers of nested enterprises, with small, local CPRs at their bases.

Common property systems typically function at a local level to prevent the overexploitation of a resource system from which fringe units can be extracted. In some cases, government regulations combined with tradable environmental allowances (TEAs) are used successfully to prevent excessive pollution, whereas in other cases — especially in the absence of a unique government being able to set limits and monitor economic activities — excessive use or pollution continue.

Adaptive governance

The management of common-pool resources is highly dependent upon the type of resource involved. An effective strategy at one location, or of one particular resource, may not be necessarily appropriate for another. In The Challenge of Common-Pool Resources, Ostrom makes the case for adaptive governance as a method for the management of common-pool resources. Adaptive governance is suited to dealing with problems that are complex, uncertain and fragmented,[5] as is the management of common-pool resources. Ostrom outlines five basic protocol requirements for achieving adaptive governance.[6] These include:

  • Achieving accurate and relevant information, by focusing on the creation and use of timely scientific knowledge on the part of both the managers and the users of the resource
  • Dealing with conflict, acknowledging the fact that conflicts will occur, and having systems in place to discover and resolve them as quickly as possible
  • Enhancing rule compliance, through creating responsibility for the users of a resource to monitor usage
  • Providing infrastructure, that is flexible over time, both to aid internal operations and create links to other resources
  • Encouraging adaption and change to address errors and cope with new developments

Open access resources

In economics, open access resources are, for the most part, rivalrous, non-excludable goods. This makes them similar to common goods during times of prosperity. Unlike many common goods, open access goods require little oversight or may be difficult to restrict access.[2] However, as these resources are first come, first served, they may be affected by the phenomenon of the tragedy of the commons.[7] Two possibilities may follow: a common property or an open access system.

An open access system is set up to continue the ideals of an open access resource in which everything is up for grabs, e.g., land. This occurred during the expansion of the U.S. west where thousands of acres were given away to the first one to claim and work the land.[8]

However, in a different setting, such as fishing, there will be drastically different consequences. Since fish are an open access resource, it is relatively simple to fish and profit. If fishing becomes profitable, there will be more fishers and fewer fish. Fewer fish lead to higher prices which will lead again to more fishers, as well as lower reproduction of fish. This is a negative externality and an example of problems that arise with open access goods.[9]

See also

References

Citations

  1. ^ Ostrom, Elinor (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge, UK: Cambridge University Press. ISBN 0 521 40599 8.
  2. ^ a b c d Environmental Economics Dictionary (2008-04-30). "Open Access Resource definition | Environmental Economics Dictionary". Economics.socialsciencedictionary.com. Archived from the original on 2013-07-03. Retrieved 2014-01-19.
  3. ^ Mandal, B.N. (2009). Global Encyclopaedia of Welfare Economics. Global Vision Publishing House. ISBN 978-8182202597.
  4. ^ Ostrom, Elinor (1990). Governing the commons: the evolution of institutions for collective action. Cambridge University Press.
  5. ^ "UNU-IAS. (2011). "Adaptive Governance". United Nations University". Ias.unu.edu. 2006-08-18. Archived from the original on 2012-08-02. Retrieved 2014-01-19.
  6. ^ Ostrom, Elinor. (2010). "The Challenge of common-pool resources". In: Environment: Science and Policy for Sustainable Development, 50:4, 8-21. [1]
  7. ^ Tietenberg, T. (20 September 2006). "Open access resources". Encyclopedia of Earth. Retrieved 4 July 2017.
  8. ^ Reggio, Michael H. (2009). "Cheyenne-Arapaho Opening". In Everett, Dianna. Encyclopedia of Oklahoma History and Culture. Oklahoma City, OK: Oklahoma Historical Society. ISBN 9780941498753. Retrieved 4 July 2017.
  9. ^ Mackenzie, John (2014). "Market Failures: Open-Access Resources, Public Goods, Etc" (lecture notes). Retrieved 4 July 2017.

Bibliography

  • Araral, Eduardo. (2014). Ostrom, Hardin and the Commons. A Critical Appreciation and Revisionist View. Env Science and Policy. Volume 36, Pages 1-92 (February 2014)
  • Acheson, James, M. (1988) The Lobster Gangs of Maine. ISBN 0-87451-451-7
  • Anderson, Terry L., Grewell, J. Bishop (2000) "Property Rights Solutions for the Global Commons: Bottom-Up or Top-Down?" In: Duke Environmental Law & Policy Forum, Vol. X, No. 2, Spring 2000. [2]
  • Copeland, Brian R.; M. Scott Taylor (2009). "Trade, Tragedy, and the Commons". American Economic Review. 99 (3): 725–49. doi:10.1257/aer.99.3.725.
  • Baland, Jean-Marie and Jean-Philippe Platteau (1996) Halting Degradation of Natural Resources: Is There a Role for Rural Communities?
  • Daniels, Brigham (2007) "Emerging Commons and Tragic Institutions," Environmental Law, Vol. 37. [3]
  • Hess, C. and Ostrom, E. (2003), "Ideas, Artifacts, and Facilities: Information as a Common-Pool Resource", Law and Contemporary Problems 66, S. 111–146. [4]
  • Hess, C. and Ostrom, E. (2001), "Artifacts, Facilities, And Content: Information as a Common-pool Resource", Workshop in Political Theory and Policy Analysis. [5]
  • Meinzen-Dick, Ruth, Esther Mwangi, Stephan Dohrn. 2006. Securing the Commons. CAPRi Policy Brief 4. Washington DC: IFPRI. [6]
  • Ostrom, Elinor (2003) "How Types of Goods and Property Rights Jointly Affect Collective Action", Journal of Theoretical Politics, Vol. 15, No. 3, 239-270 (2003).
  • Ostrom, Elinor (1990) "Governing the Commons. The Evolution of Institutions for Collective Action". Cambridge University Press. ISBN 0-521-40599-8
  • Ostrom, Elinor, Roy Gardner, and James Walker (1994) Rules, Games, and Common-Pool Resources. University of Michigan Press. 1994. ISBN 978-0-472-06546-2
  • Rose, Carol M. (2000) "Expanding the Choices for the Global Commons: Comparing Newfangled Tradable allowance schemes to Old-Fashioned Common Property Regimes". In: Duke Environmental Law & Policy Forum, Vol. X, No. 2, Spring 2000. [7]
  • Saunders, Pammela Q. (2011) "A Sea Change Off the Coast of Maine: Common Pool Resources as Cultural Property". In: Emory Law Journal, Vol. 60, No. 6, June 2011. [8]
  • Thompson, Jr., Barton H. (2000) "Tragically Difficult: The Obstacles to Governing the Commons" Environmental Law 30:241.

External links

Air rights

Air rights are the property interest in the "space" above the earth's surface. Generally speaking, owning, or renting, land or a building includes the right to use and develop the space above the land without interference by others.

This legal concept is encoded in the Latin phrase Cuius est solum, eius est usque ad coelum et ad inferos ("Whoever owns the soil, it is theirs up to Heaven and down to Hell."), which appears in medieval Roman law and is credited to 13th-century glossator Accursius; it was notably popularized in common law in Commentaries on the Laws of England (1766) by William Blackstone; see origins of phrase for details.

Catch share

Catch share is a fishery management system that allocates a secure privilege to harvest a specific area or percentage of a fishery's total catch to individuals, communities, or associations. Examples of catch shares are individual transferable quota (ITQs), individual fishing quota (IFQs), territorial use rights for fishing (TURFs), limited access privileges (LAPs), sectors (also known as cooperatives), and dedicated access privileges (DAPs).

Catch shares provide long-term secure privileges to participants and, in theory, an incentive for efficient, sustainable use of fish stocks. Actual outcomes in terms of efficiency and ecological sustainability are varied, based on design and implementation of the program.

Catch share programs generally fall into two categories. Quota-based programs, like ITQs, establish a fishery-wide catch limit, assign portions (or shares) of the catch to participants and hold participants directly accountable to stay within the catch limit.

Area-based programs, like TURFs, allocate a secure, exclusive area to participants and include appropriate controls on fishing mortality that ensure long-term sustainability of the stock. A combination of both quota- and area-based approaches has also been used.

Common ownership

Common ownership refers to holding the assets of an organization, enterprise or community indivisibly rather than in the names of the individual members or groups of members as common property.

Forms of common ownership exist in every economic system. Common ownership of the means of production is a central goal of communist political movements as it is seen as a necessary democratic mechanism for the creation and continued function of a communist society. Advocates make a distinction between collective ownership and common property as the former refers to property owned jointly by agreement of a set of colleagues, such as producer cooperatives, whereas the latter refers to assets that are completely open for access, such as a public park freely available to everyone.

Commons

The commons is the cultural and natural resources accessible to all members of a society, including natural materials such as air, water, and a habitable earth. These resources are held in common, not owned privately. Commons can also be understood as natural resources that groups of people (communities, user groups) manage for individual and collective benefit. Characteristically, this involves a variety of informal norms and values (social practice) employed for a governance mechanism.

Commons can be also defined as a social practice of governing a resource not by state or market but by a community of users that self-governs the resource through institutions that it creates .

Community management

Community management or common-pool resource management is the management of a common resource or issue by a community through the collective action of volunteers and stakeholders. The resource managed can be either material or informational. Examples include the management of common grazing and water rights; fisheries and open-source software. In the case of physical resources, community management strategies are frequently employed to avoid the tragedy of the commons and to encourage sustainability.

Customary land

Customary land is land which is owned by indigenous communities and administered in accordance with their customs, as opposed to statutory tenure usually introduced during the colonial periods. Common ownership is one form of customary land ownership.

Since the late 20th century, statutory recognition and protection of indigenous and community land rights continues to be a major challenge. The gap between formally recognized and customarily held and managed land is a significant source of underdevelopment, conflict, and environmental degradation.In the Malawi Land Act of 1965, "Customary Land" is defined as "all land which is held, occupied or used under customary law, but does not include any public land". In most countries of the Pacific islands, customary land remains the dominant land tenure form. Distinct customary systems of tenure have evolved on different islands and areas within the Pacific region. In any country there may be many different types of customary tenure.The amount of customary land ownership out of the total land area of Pacific island nations is the following: 97% in Papua New Guinea, 90% in Vanuatu, 88% in Fiji, 87% in the Solomon Islands, and 81% in Samoa.

Elinor Ostrom

Elinor Claire "Lin" Ostrom (née Awan; August 7, 1933 – June 12, 2012) was an American political economist whose work was associated with the New Institutional Economics and the resurgence of political economy. In 2009, she shared the Nobel Memorial Prize in Economic Sciences with Oliver E. Williamson for her "analysis of economic governance, especially the commons". To date, she remains the only woman to win the Nobel Prize in Economics.After graduating with a B.A. and Ph.D. from UCLA, Ostrom lived in Bloomington, Indiana, and served on the faculty of Indiana University, with a late-career affiliation with Arizona State University. She was Distinguished Professor at Indiana University and the Arthur F. Bentley Professor of Political Science and co-director of the Workshop in Political Theory and Policy Analysis at Indiana University, as well as research professor and the founding director of the Center for the Study of Institutional Diversity at Arizona State University in Tempe. She was a lead researcher for the Sustainable Agriculture and Natural Resource Management Collaborative Research Support Program (SANREM CRSP), managed by Virginia Tech and funded by USAID. Beginning in 2008, she and her husband Vincent Ostrom advised the journal Transnational Corporations Review.

Environmental economics

Environmental economics is a sub-field of economics that is concerned with environmental issues. It has become a widely studied topic due to growing concerns in regards to the environment in the twentyfirst century. Quoting from the National Bureau of Economic Research Environmental Economics program:

... Environmental Economics ... undertakes theoretical or empirical studies of the economic effects of national or local environmental policies around the world ... . Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming.

Environmental economics is distinguished from ecological economics in that ecological economics emphasizes the economy as a subsystem of the ecosystem with its focus upon preserving natural capital. One survey of German economists found that ecological and environmental economics are different schools of economic thought, with ecological economists emphasizing "strong" sustainability and rejecting the proposition that natural capital can be substituted by human-made capital.

Fish stocking

Fish stocking is the practice of raising fish in a hatchery and releasing them into a river, lake, or ocean to supplement existing populations or to create a population where none exists. Stocking may be done for the benefit of commercial, recreational, or tribal fishing, but may also be done to restore or increase a population of threatened or endangered fish in a body of water closed to fishing.

Fish stocking may be conducted by governmental agencies in public waters, or by private groups in private waters. When in public waters, fish stocking creates a common-pool resource which is rivalrous in nature but non-excludable. Thus, on public grounds, all can enjoy the benefits of fishing so long as fish continue to be stocked.

Global commons

Global commons is a term typically used to describe international, supranational, and global resource domains in which common-pool resources are found. Global commons include the earth's shared natural resources, such as the high oceans, the atmosphere and outer space and the Antarctic in particular. Cyberspace may also meet the definition of a global commons.

Individual fishing quota

Individual fishing quotas (IFQs) also known as "individual transferable quotas" (ITQs) are one kind of catch share, a means by which many governments regulate fishing. The regulator sets a species-specific total allowable catch (TAC), typically by weight and for a given time period. A dedicated portion of the TAC, called quota shares, is then allocated to individuals. Quotas can typically be bought, sold and leased, a feature called transferability. As of 2008, 148 major fisheries (generally, a single species in a single fishing ground) around the world had adopted some variant of this approach, along with approximately 100 smaller fisheries in individual countries. Approximately 10% of the marine harvest was managed by ITQs as of 2008. The first countries to adopt individual fishing quotas were the Netherlands, Iceland and Canada in the late 1970s, and the most recent is the United States Scallop General Category IFQ Program in 2010. The first country to adopt individual transferable quotas as a national policy was New Zealand in 1986.

Intangible property

Intangible property, also known as incorporeal property, describes something which a person or corporation can have ownership of and can transfer ownership to another person or corporation, but has no physical substance, for example brand identity or knowledge/intellectual property. It generally refers to statutory creations such as copyright, trademarks, or patents. It excludes tangible property like real property (land, buildings, and fixtures) and personal property (ships, automobiles, tools, etc.). In some jurisdictions intangible property are referred to as choses in action. Intangible property is used in distinction to tangible property. It is useful to note that there are two forms of intangible property: legal intangible property (which is discussed here) and competitive intangible property (which is the source from which legal intangible property is created but cannot be owned, extinguished, or transferred). Competitive intangible property disobeys the intellectual property test of voluntary extinguishment and therefore results in the sources that create intellectual property (knowledge in its source form, collaboration, process-engagement, etc.) escaping quantification.

Generally, ownership of intangible property gives the owner a set of legally enforceable rights over reproduction of personal property containing certain content. For example, a copyright owner can control the reproduction of the work forming the copyright. However, the intangible property forms a set of rights separate from the tangible property that carries the rights. For example, the owner of a copyright can control the printing of books containing the content, but the book itself is personal property which can be bought and sold without concern over the rights of the copyright holder.

In English law and other Commonwealth legal systems, intangible property is traditionally divided in pure intangibles (such as debts, intellectual property rights and goodwill) and documentary intangibles, which obtain their character through the medium of a document (such as a bill of lading, promissory note or bill of exchange). The recent rise of electronic documents has blurred the distinction between pure intangibles and documentary intangibles.

List of types of formally designated forests

This is a list of types of formally designated forests, as used in various places around the world. It is organized in three sublists: by forest ownership, protection status, and designated use.

Outline of libertarianism

The following outline is provided as an overview of and topical guide to libertarianism, a political philosophy that upholds liberty as its principal objective. Thus, libertarians seek to maximize autonomy and freedom of choice, emphasizing political freedom, voluntary association and the primacy of individual judgment.

Overexploitation

Overexploitation, also called overharvesting, refers to harvesting a renewable resource to the point of diminishing returns. Continued overexploitation can lead to the destruction of the resource. The term applies to natural resources such as: wild medicinal plants, grazing pastures, game animals, fish stocks, forests, and water aquifers.

In ecology, overexploitation describes one of the five main activities threatening global biodiversity. Ecologists use the term to describe populations that are harvested at a rate that is unsustainable, given their natural rates of mortality and capacities for reproduction. This can result in extinction at the population level and even extinction of whole species. In conservation biology the term is usually used in the context of human economic activity that involves the taking of biological resources, or organisms, in larger numbers than their populations can withstand. The term is also used and defined somewhat differently in fisheries, hydrology and natural resource management.

Overexploitation can lead to resource destruction, including extinctions. However it is also possible for overexploitation to be sustainable, as discussed below in the section on fisheries. In the context of fishing, the term overfishing can be used instead of overexploitation, as can overgrazing in stock management, overlogging in forest management, overdrafting in aquifer management, and endangered species in species monitoring. Overexploitation is not an activity limited to humans. Introduced predators and herbivores, for example, can overexploit native flora and fauna.

Property rights (economics)

Property rights are theoretical socially-enforced constructs in economics for determining how a resource or economic good is used and owned. Resources can be owned by (and hence be the property of) individuals, associations or governments. Property rights can be viewed as an attribute of an economic good. This attribute has four broad components and is often referred to as a bundle of rights:

the right to use the good

the right to earn income from the good

the right to transfer the good to others

the right to enforce property rightsIn economics, property is usually considered to be ownership (rights to the proceeds generated by the property) and control over a resource or good. Many economists effectively argue that property rights need to be fixed and need to portray the relationships among other parties in order to be more effective.

Tangible property

Tangible property in law is, literally, anything which can be touched, and includes both real property and personal property (or moveable property), and stands in distinction to intangible property.In English law and some Commonwealth legal systems, items of tangible property are referred to as choses in possession (or a chose in possession in the singular). However, some property, despite being physical in nature, is classified in many legal systems as intangible property rather than tangible property because the rights associated with the physical item are of far greater significance than the physical properties. Principally, these are documentary intangibles. For example, a promissory note is a piece of paper that can be touched, but the real significance is not the physical paper, but the legal rights which the paper confers, and hence the promissory note is defined by the legal debt rather than the physical attributes.A unique category of property is money, which in some legal systems is treated as tangible property and in others as intangible property. Whilst most countries legal tender is expressed in the form of intangible property ("The Treasury of Country X hereby promises to pay to the bearer on demand...."), in practice banknotes are now rarely ever redeemed in any country, which has led to banknotes and coins being classified as tangible property in most modern legal systems.

Water trading

Water trading is the process of buying and selling water access entitlements, also often called water rights. The terms of the trade can be either permanent or temporary, depending on the legal status of the water rights. Some of the western states of the United States, Chile, South Africa, Australia, Iran and Spain's Canary Islands have water trading schemes. Some consider Australia's to be the most sophisticated and effective in the world. Some other countries, especially in South Asia, also have informal water trading schemes. Water markets tend to be local and informal, as opposed to more formal schemes.Some economists argue that water trading can promote more efficient water allocation because a market based price acts as an incentive for users to allocate resources from low value activities to high value activities. There are debates about the extent to which water markets operate efficiently in practice, what the social and environmental outcomes of water trading schemes are, and the ethics of applying economic principles to a resource such as water.

In the United States, water trading takes on several forms that differ from project to project, and are dependent upon the history, geography, and other factors of the area. Water law in many western U.S. states is based in the doctrine of "prior appropriation," or "first in time, first in use." Economists argue that this has created inefficiency in the way water is allocated, especially as urban populations increase and in times of drought. Water markets are promoted as a way to correct these inefficiencies.

In addition to the supply of tap water, many local water resources are also being acquired by private companies, most notably Nestlé Waters with its numerous brands, in order to provide commodity for the bottled water industry. This industry, which often bottles common ground water and sells it as spring water, competes with local communities for access to their water supplies, and is accused of reselling the water at drastically higher prices compared to what citizens pay for tap water.

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