What is a common pool resource?
From an economics perspective: A common-pool resource (also known as a common property resource), is a type of good consisting of a natural or human-made resource system (e.g. fishing grounds), whose size or characteristics makes it costly, but not impossible, to eliminate possible recipients from gaining benefits from its use.
Problems with common pool resources: Unlike pure public goods, common pool resources face complications of overcrowding 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.
For example a sea of water is free for anyone to fish in. The core resource is the seawater or fish and that is the stock variable. There is limited fish available that is the flow variable. The core resource the sea would have to be nurtured in order for it to be exploited for fish which are eaten by us.
How communities succeed or fail at managing common pool (finite) resources.
Elinor Ostrom shared the Nobel Prize in Economics in 2009 for her lifetime of scholarly work investigating how communities thrive or flop at dealing with common pool (finite) resources such as grazing land, forests and irrigation waters.
Hardin’s theory says that common resources should be owned by the government or divided into privately owned lots to prevent the resources from becoming worn-out through overuse. He said that each individual user will try to obtain maximum personal benefit from the resource to the detriment of later users. So each fisherman would want the maximum amount of fish to make profit.
Ostrom showed that common pool resources can be effectively managed collectively, without government or private control, as long as those using the resource are physically close to it and have a relationship with each other. Because outsiders and government agencies don’t understand local conditions or norms, and lack relationships with the community, they may manage common resources poorly. By contrast, insiders who are given a say in resource management will self-police to ensure that all participants follow the community’s rules.
Ostrom’s achievement effectively answers popular theories about the “Tragedy of the Commons”, which has been interpreted to mean that private property is the only means of protecting finite resources from ruin or depletion. She has documented in many places around the world how communities devise ways to govern the commons to assure its survival for their needs and future generations.
A classic example of this was her field research in a Swiss village where farmers tend private plots for crops but share a communal meadow to graze their cows. While this would appear a perfect model to prove the tragedy-of-the-commons theory, Ostrom discovered that in reality there were no problems with overgrazing. That is because of a common agreement among villagers that one is allowed to graze more cows on the meadow than they can care for over the winter—a rule that dates back to 1517. Ostrom has documented similar effective examples of “governing the commons” in her research in Kenya, Guatemala, Nepal, Turkey, and Los Angeles.
Based on her extensive work, Ostrom offers 8 principles for how commons can be governed sustainably and equitably in a community.
8 Principles for Managing a Commons
- Define clear group boundaries.
- Match rules governing use of common goods to local needs and conditions.
- Ensure that those affected by the rules can participate in modifying the rules.
- Make sure the rule-making rights of community members are respected by outside authorities.
- Develop a system, carried out by community members, for monitoring members’ behavior.
- Use graduated sanctions for rule violators.
- Provide accessible, low-cost means for dispute resolution.
- Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.