In 2009, Indiana University professor Elinor Ostrom became the first and only woman to be awarded the Nobel Prize in Economic Sciences, for her "analysis of economic governance, especially the commons." Ostrom's work focused on the institutional arrangements that govern common resources, such as water, land, fisheries, forests, and grazing lands. While many economists and political scientists favor top-down regulation as a way to prevent the "tragedy of the commons," Ostrom's research revealed the diverse frameworks that communities have developed to protect shared resources. Her findings emphasized that there is no single best practice to protect the commons.
American ecologist Garrett Hardin popularized "the tragedy of the commons" in his seminal 1968 paper of the same name, in which he demonstrated that it is in the individual's best interest to exploit common-pool resources (CPR), but in society's interest to use the resources sustainably. In recent decades, modern society has borne out many of Hardin's dire predictions, as the world's common resources continue to be exploited at unsustainable rates.
The tragedy of the commons springs from the so-called "prisoner's dilemma" in game theory econometrics. In this classic dilemma, two individuals fail to cooperate, even if it is in their overall best interest to do so. The game forces people to recognize the self-interest of some individuals, which may cause them to cheat the other players or the terms of agreement. When this betrayal occurs, the cheating individual actually diminishes benefits to all players.
While the traditional management methods of top-down legislation and privatization of CPRs are still widely used today, Ostrom's work supports societies in managing their commons through innovative and efficient means, such as collective action and collaborative management. Ostrom and her colleagues showed through experimentation that increased communication among players in the prisoner's dilemma game vastly improves outcomes for society, as cheating becomes less common. In CPR simulations, communication and sanctions have proven successful in sustainable resource use.
Although Ostrom stresses that there is no single panacea for management of the commons, she argues that an approach that uses varying layers of governance and inclusion is often the best method. In her book, Governing the Commons: The Evolution of Institutions for Collective Action, Ostrom uses case studies to explore the success and failure of commons management. Through in-depth analysis of four case studies, including grazing land, forests, and irrigation, Ostrom develops eight design principles for commons management. She emphasizes defined boundaries, monitoring, graduated sanctions, mechanisms for conflict resolution, local knowledge and conditions, a polycentric approach, and collective choice arrangements that ensure flexibility.
In her Nobel Prize lecture in 2009, Ostrom cited numerous examples of successful CPR management around the world, much of it relying on community-based ownership, monitoring, and punishment, and challenging the traditional methods of top-down government legislation and privatization. In Nepal, farmer-governed irrigation systems were better managed than government systems, with farmer-governed systems better allocating water to farmers and increasing the agricultural productivity of the systems. Similarly, forest governance systems in various countries have demonstrated that community-based management yields more sustainable forests than government-protected forests do.
Although local and regional CPR management has been largely successful, and collaborative management with a focus on community ownership and monitoring is becoming more widespread, governance of the international commons remains a great challenge. Local resources, such as a forest, are far easier to monitor than vast resources where boundaries are less clear and stakeholders are less likely to be held accountable for acts of cheating.
Examples of resources that transcend local boundaries are ocean fisheries, groundwater basins, and the atmosphere. Ostrom and her colleagues argue that each CPR must be examined individually to determine the measurability of the resource, the carrying capacity of the system, the spatial and temporal characteristics of the resource, regeneration speed, and technology used in production and consumption. Importantly, the relationship between the resource and its users must be understood in order to effectively establish regulations and governance systems.
Elinor Ostrom passed away on June 12, 2012, after battling pancreatic cancer. Her final article, published on the day of her passing, discusses the importance of the Rio+20 environmental conference that took place from June 20 to 22, 2012, and warns against a single international agreement on sustainability. She writes, "sustainability at local and national levels must add up to global sustainability. This idea must form the bedrock of national economies and constitute the fabric of our societies." Ostrom argues for universal sustainable development goals with an emphasis on diversity in institutional design and implementation.
While Rio+20 may have failed to produce any major agreements, Ostrom's rich body of work provides hope through the innovation and collaboration of stakeholders. Let us honor her legacy by working collectively to manage our greatest common resource, Planet Earth.
(First published on Worldwatch Institute's blog: http://blogs.worldwatch.org/sustainableprosperity/ and Written by Alison Singer; Edited by Antonia Sohns).