Are the "commons" a metaphor of our times?
Nobel laureate for Economics, Elinor Ostrom, spoke at the OECD in June. At a time when new models are needed, could her ideas on common resources and governance offer guidance?
The late Argentinian writer Jorge Luis Borges wrote that "Perhaps universal history is the story of a handful of metaphors". By that standard, Elinor Ostrom's contribution has been huge, for over the years she has been responsible for a new and powerful metaphor–that of the local commons and their economic governance–which underpins so much global public policy debates.
Markets and state-managed institutions are not always well suited to managing common-pool resources, such as water catchments, river fisheries or nearby pasture lands. Resources have to be managed sustainably over time, and market prices and government rules might not be able to deliver the most effective solutions. Elinor Ostrom’s research shows that local governance of such resources can work. These are based on home-grown institutions, and they arise to fill the gaps left by markets and local or national states.
But as Ms Ostrom argues, the commons metaphor can be applied beyond the local management of natural resources. Indeed, the governance of more complex social systems shares features of the local fishery, with co-operation, trust and social relationships being important. Indeed, major global challenges such as how to manage climate change could benefit from the metaphor. After all, they involve ordinary people as stakeholders and in any case, markets and governments have struggled to resolve these socially critical issues on their own. A fresh look at the boundaries between markets, government policies and collective action would be beneficial. Ms Ostrom stressed that good governance solutions often require what she terms a "polycentric approach" that cleverly combines different institutional layers, from community norms to municipal regulations and national laws.
Elinor Ostrom’s work focuses on what is termed “common-pool resources”. In 1968 Garrett Hardin’s book, The Tragedy of the Commons, warned that mankind’s shared resource pool was being irreparably depleted, and that people (and countries) faced a tragic finality. For Ms Ostrom, resource users are not hostage to this scenario, since rather than over-exploit the common-pool resource, individual resource users can collectively organise themselves with informal rules, monitoring and enforcement. Lobster fishermen in the US state of Maine use simple signals like bows tied around lobster traps and different degrees of social pressure, to monitor their collective behaviour and protect rights. Market-based private property rights or government ownership frequently fail to assure these rights.
Nevertheless, good policy can help the commons approach do its job effectively. The commons metaphor, whether for villagers managing a local forest or a group of nations seeking to mitigate climate change, can be made to work if the institutional and legal space is created that enables local organisation and monitoring to take place. Ostrom analyses how different levels of governance, including market signals, public policies and collective action, can reinforce each other in complex polycentric social systems. Local self-monitoring institutions may in some cases work most efficiently in the management of forests, for instance, since conventional enforcement systems, such as private property rights, are just too difficult for central authorities to monitor reliably. But for this local approach to take effect, it needs legal back-up, and to be given the capacity to take decisions on, say, how best to manage a rise in output in response to a sudden jump in demand.
During Ms Ostrom’s OECD seminar, the metaphorical similarity of the local commons to global policy areas was illustrated. This included risk management, the governance of climate change, trade negotiations, development assistance and high-seas fisheries.
The difference is that, whereas local forest users often cannot rely on the state to govern the use of their resources in their interest simply because it is too remote, in the case of global commons problems, the interacting resource users are the states themselves, this time with supranational governments being non-existent.
In these situations, governments can take a lead by helping to build trust, and can craft institutions such as international agreements for monitoring, creating incentives and imposing sanctions. The precise common-pool resources approach will largely depend on who is involved, the history of the problem at hand, and the degree of trust the protagonists have already established.
Some participants at the Ostrom seminar pointed out similarities with this and the core business of the OECD–that of bringing policymakers and stakeholders together to devise (and tailor) policies to solve various shared problems and build a working sense of trust, notably through its many public consultations and global forums.
Ms Ostrom believes that institutions such as the OECD have the potential to develop this aspect further and to help people better manage common pool resources and avoid overly rapid exploitation. However, her experience also shows that not all initiatives succeed, with some groups failing to stop over-exploitation, and others breaking down altogether. Ms Ostrom compares the fate of a fishing village called Kino Bay in the Gulf of California, Mexico, whose failure to self-organise led to over-exploitation, with that of nearby Seri village of Punta Chueca which, thanks to local leadership and public trust, developed a common property regime to manage its fisheries sustainably. The story shows that those that have managed to endure and maintain co-operation and conservation adapt more easily to changes, and develop a high level of resilience in dealing with shocks.
Ms Ostrom’s views and ideas have re-emerged at a timely moment, given current global uncertainties and the crisis which affects us all. As the OECD warned when the crisis began, business-as-usual is not an option in building a stronger, cleaner and fairer world. Finding policies based on common-pool resources could well be part of the solution.
*Jeff Dayton-Johnson, formerly of the OECD Development Centre, is associate professor of International Trade and Development at the Graduate School of International Policy and Management, Monterey Institute of International Studies, California.
Borges, Jorge Luis (1952), "La esfera de Pascal" in Otras Inquisiciones.
Love, Patrick (2011), “A lesson in resources management from Elinor Ostrom”, 1 July 2011, OECD Insights blog.
*Pictured: Elinor Ostrom
©OECD Observer No 286 Q3 2011
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