Environmental Engineering Reference
In-Depth Information
Similarly, there is over-use resulting from users ignoring the ef ect of
their consumption this year on the costs they will face next year. On the
supply side, CPRs held under open access regimes are like public goods.
Individuals cannot capture the benei ts of their investments in these
resources, and as a result investment is inei ciently low, resources are mis-
allocated, and there is under-investment in information (Wallace, 1981).
Governance of natural resources can thus be conceptualized as a collective
endeavour of individuals organizing for the provision of, and appropria-
tion from, resources that have public good characteristics. Since individual
interests are unlikely to lead to sustainable management of CPRs in an
open access regime, the design of governance for resource management
has to include some elements of support from government to modify the
incentives for individual resource users (Varughese, 1999).
Analysis of CPR management under common property regimes indi-
cates that resource management under community ownership is not
operating in a vacuum. Instead, common property is a form of resource
management regime in which a well-delineated group of competing users
participates in extraction or use of a jointly held, fugitive resource accord-
ing to explicitly or implicitly understood rules about who may take how
much of the resource (Stevenson, 1991). The confusion in the conventional
literature over the tragedy of the commons arises from a failure to under-
stand the concept of property, and therefore to fail to understand common
property regimes (Bromley, 1991). The economics literature also discusses
the problem associated with common property, which results from some
type of adverse interaction among resource users and unrestricted access to
the resource system by all who care to use it. As discussed earlier, common
property resources share two important characteristics. First, exclusion of
resource users from these resources is dii cult. Second, the use of resources
by one person subtracts from the welfare of other users. Natural products
like trees, water and wildlife are subtractable, and in most cases, exclu-
sion will be problematic and costly. If one individual uses more, then less
remains for another. These resources are therefore potentially subject to
depletion or degradation, that is, use that is pushed beyond the limits of
sustainable yields. So the problem raised by common property is usually
represented in the formal framework of the 'prisoner's dilemma'.
This chapter also attends to the transaction costs associated with
community-based resource management. An institution's primary purpose
is to reduce transaction costs and thereby enhance economic performance.
Neo-classical economic analysis tends to be preoccupied with production
costs, largely ignoring the transaction costs associated with production
and economic exchange. Despite the importance of transaction costs in
functioning of an economic system, there are very few empirical estimates
