The Future of the Commons

In 1984 I happened to read 2 papers from E. and V. Ostrom in “Managing the Commons” edited by Baden and Hardin( Freeman 1977) but I first heard of Ostrom’s famous book « Governing the Commons » when meeting with Roger Bates, Julian Morris and Michael De Alessi in June 1999 at the Institute of Economic Studies in London.

Of course I ordered the book and contacted Elinor inviting her as keynote speaker at our second international conference “Property rights, Economics and Environment: water resources”.

She could not come but asked William Blomquist to make a presentation on “The role of common property for water resources management”.

I was then convinced that between private property and regulation, common property was a new and fruitful concept to manage most environmental resources. Accordingly at each of our nine conferences we invited an IASCP representative.

It is ironic that the last Ostrom’s address took place at IEA in June 2012 as she had acceptd to give her patronage to our 9th international conference which took place in Aix-en-Provence the same time. IEA thus published  a short book entiled :

The Future of the Commons Beyond Market Failure and Government Regulation

ELINOR OSTROM with contributions from CHRISTINA CHANG, MARK PENNINGTON, VLAD TARKO, Institute of Economic Affairs, 103 p., 2012.

Eventually I never met physically E. Ostrom but she was and still is one of our intellectual beacon.

This some 100 pp booklet is a wonderful introduction to common property concepts… up to now quite estranged to most bureaucrats and politicians.

We must thank IEA for publishing it … it deserve a translation in France which stick to pure “command and control”

Max Falque

IEA Executive summary:
Traditional economic models of how to manage environmental problems relating to renewable natural resources, such as fisheries, have tended to recommend either government regulation or privatisation and the explicit definition of property rights.

These traditional models ignore the practical reality of natural resource management. Many communities are
able to spontaneously develop their own approaches to managing such common-pool resources. In the words of Mark Pennington: ‘[Professor Ostrom’s] book Governing the Commons is a superb testament to the understanding that can be gained when economists observe in close-up detail how people craft arrangements to solve problems in ways often beyond the imagination of textbook theorists.’

In particular, communities are often able to find stable and effective ways to define the boundaries of a common-pool resource, define the rules for its use and effectively enforce those rules.

The effective management of a natural resource often requires ‘polycentric’ systems of governance where various entities have some role in the process. Government may play a role
in some circumstances, perhaps by providing information to resource users or by assisting enforcement processes through court systems.

Elinor Ostrom’s work in this field, for which she won the Nobel Prize in economics in 2009, was grounded in the detailed empirical study of how communities managed common-pool resources in practice.

It is essential that we avoid the ‘panacea problem’. There is no correct way to manage common-pool resources that will always be effective. Different ways of managing resources will be appropriate in different contexts – for example within different cultures or where there are different physical characteristics of a natural resource.

Nevertheless, there are principles that we can draw from
the detailed study of the salient features of different cases to help us understand how different common-pool resources might be best managed; which rules systems and systems of organisation have the best chance of success or failure; and so on.

Elinor Ostrom’s approach has been praised by the left, who often see it as being opposed to free-market privatisation initiatives. In fact, her approach sits firmly within the classical liberal tradition of political economy. She observes communities freely choosing their own mechanisms to manage natural resource problems without government coercion or planning.

In developing a viable approach to the management of
the commons, it is important, among other things, that a resource can be clearly defined and that the rules governing the use of the resource are adapted to local conditions. This suggests that rules imposed from outside, such as by government agencies, are unlikely to be successful.

There are important areas of natural resource management where Elinor Ostrom’s ideas should be adopted to avoid environmental catastrophe. Perhaps the most obvious example relevant to the UK is in European Union fisheries policy. Here, there is one centralised model for the management of the resource that is applied right across the European Union, ignoring all the evidence about the failure of that approach.