Collective action and common pool resources

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Collective action for resource management is a school of thought centered on the management of common pool resources, which are natural or human-made resources that benefit a group of people. Collective action theory focuses on solutions to managing beneficial but finite resources, such as forests, fisheries, wildlife, and water. These resources are considered by collective action theorists to be individually beneficial but become more scarce the more they are used. Collective action theorists study management strategies at the governmental, communal, and private levels to make use of these resources in light of their scarcity over time.

Background

Terms and definitions

Below are definitions for terms used by collective action theorists:

• Common pool resources are natural or human-made resources, such as fisheries, water, the atmosphere, and forests. These resources meet the following qualifications: the quantity available is limited; one person using the resource subtracts from another person's use; and people can be excluded from using the resource at a cost. For example, fish are available in limited quantities. If one person catches a fish, no one else can catch that particular fish. One can stop a person from fishing, and such exclusion would prevent the person from enjoying the benefits of catching fish either as a food source or as a commodity that can be sold for profit. Common pool resources have value that can be diminished if the resources are used at a rate higher than can be replenished. For example, forests may be over-harvested and bodies of water may be overfished. Common pool resources can have public or private owners. The government may own the resource, such as a state or federally owned forest. Communities may own a neighborhood pond, or a private individual may own a private forest or tract of land.
• Collective action is defined as a group of people that works cooperatively to achieve a common goal. As applied to common pool resources, collective action occurs when individuals combine their resources, knowledge, and efforts to manage resources such as forests, fisheries, and water systems. Collective action can be stymied by conflicts between the interests of individuals and groups.
• Collective action problems arise from a conflict between individual and group interests. For example, a community that collectively owns a water well has the incentive to use water in a manner so that the well can be replenished. Individuals in the community, on the other hand, may want to use more water than others for various reasons, such as drinking, farming, or bathing. This may create a conflict between different interests. An individual might pursue his or her own interest and draw more water from the well than another user. If each user acted this way, a worse outcome would result according to collective action theorists. The well could go dry, which might not have occurred if everyone had cooperated. Unless an agreement can be reached and users limit their water consumption, the result would be an inefficient use of the water, scarcity, and a dry well, according to collective action theorists.

Collective action theorists have argued that goods and resources can be classified into four types. Goods and resources can be rivalrous, which means they can be used by only one person at the same time, such as a candy bar or a suit. They can be non-rivalrous, which means they are used by many people at no additional cost, such as national defense and the legal system. They can be excludable, which means they can be kept from people who have not paid to use them. For example, people will not have their mail delivered if they do not pay postage, or they cannot board a train without paying train fare. They can be non-excludable, which means they cannot be easily kept from those who use them, such as forests and fisheries. Common pool resources are rivalrous and non-excludable resources, such as fisheries. Fishers can catch fish and reduce the number of fish available to others, but fishers cannot be easily excluded from fishing areas, particularly fishing areas in the open ocean.

The table below shows the four kinds of goods and resources identified by economists and cited by collective action theorists.

Types of goods with examples
	Excludable	Non-excludable
Rivalrous	Private good	Common pool resource
Non-rivalrous	Public enterprise good	Public good
Source: University of Pittsburgh, "Public Goods"

History of collective action

American ecologist Garrett Hardin argued that the conflict between individual and group interest produced the tragedy of the commons in which overexploitation by individuals would destroy a common resource.

Some environmental advocates in the 1960s argued that environmental problems require collective action because they involve common pool resources such as land and water. In a 1968 article in the journal Science entitled "The Tragedy of the Commons," Garrett Hardin, an American ecologist, argued that there is a problem with managing finite common pool resources. Gardin imagined a commonly used pasture where farmers benefited individually when they allowed more animals to graze in the pasture. Though it would take time for the pasture to become overgrazed, more and more animal grazing would eventually destroy the common pasture. Hardin called this situation the tragedy of the commons. "Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons," Hardin wrote.

Some scholars and policymakers responded to Hardin's essay by proposing potential solutions to the tragedy of the commons. One proposed solution was government regulation. Public officials would develop and implement policies to prevent the overuse of common pool resources by limiting the use of pastures, fisheries, water systems, forests, and other finite resources. Proponents of this policy argued that government ownership could preserve vital resources and prevent destructive outcomes caused by private activity. These proponents cited India and Thailand's nationalization of forests in the 1970s and 1980s aimed at preventing deforestation by private actors. Critics of government ownership have argued that government policies have failed to prevent the problems they were intended to solve and that government ownership does not respect the individual property rights of resource users.

Fisheries are a common pool resource. Extracting more fish than can be replenished can lead to scarcity (a salmon fishery in southwestern Alaska is shown above).

Another proposed resolution to the tragedy of the commons was privatization. Proponents of privatization argued that private individuals or companies could own a resource the same way a person or a company can own, sell, buy, and trade land. These proponents argued that privatization was a more efficient way to allocate common resources and their benefits to the wider society. For proponents, private ownership would encourage the beneficial land use because owners and users have an incentive to manage their own resources efficiently and cost-effectively, which would benefit both the user and those who purchased the goods or services produced on the land. Critics of privatization have argued that private ownership does not necessarily distribute goods and services efficiently or fairly. Further, these critics have argued that the profit motive associated with the private ownership can conflict with the fair use of resources for the public good.

Other collective action theories emerged aimed at resolving resource management issues. Collective action theorists studied worldwide situations where governments nationalized or privatized common pool resources. Some theorists concluded that alternative solutions to collective action problems could replace prior solutions such as government ownership and private ownership. In lieu of complete government or private ownership, these theorists argued that resource users could establish and sustain their own arrangements for managing and conserving resources. On the other hand, some collective action theorists argued that government ownership or privatization may be more successful in benefiting certain nations or communities in specific circumstances. Further, these theorists claimed that self-organized resource users and their own resource management systems may not succeed in all places or with all types of resources. Instead, according collective action theorist Elinor Ostrom, "Under appropriate conditions, communities can devise appropriate operational and collective-choice arrangements that enable the sustainable use of natural resources."

Main ideas

Collective action problems and management

According to collective action theorists, common pool resources and collective action problems can be managed differently. Resource management can include governments, private individuals and institutions, businesses, communities, and individuals. Collective action theories contend that the successful management of common pool resources depends on factors such as location, the kinds of resources, the nature and extent of government involvement, private and/or community ownership, and the sole or cooperative management of resources. Different management techniques have different levels of success depending on where they are implemented, according to some theorists.

Collective action theorists have argued that some issues can be dealt with at the governmental, communal, and private levels. Government regulation can mandate or prohibit certain activities involving a common pool resource. For example, a government can prohibit private actors from clearing a government-owned forest unless they have permission. Private ownership can prevent the use of a common pool resource. For example, individuals may not fish in a private pond. Individuals can also informally cooperate on managing and using a common pool resource. For example, farmers can cooperate and agree on how a common pasture should be used for animal grazing.

One example of common pool resource management was presented by Elinor Ostrom, a political economist and collective action theorist whose work won the Nobel Memorial Prize in Economic Sciences in 2009. Her field research in a Swiss village focused on whether farmers who used a communal meadow for grazing would face a tragedy of the commons situation. Ostrom argued that overgrazing was not a problem due to an existing agreement between farmers that regulated grazing in the meadow. Her conclusions suggested that community management of common pool resources can act as a third way between purely government and purely private management of resources, though only in specific circumstances. Ostrom concluded that community agreements were potential resolutions to the tragedy of the commons problem.

Management principles

Based on her research, Ostrom developed the following eight principles for resource management in her 1991 book Governing the Commons: The Evolution of Institutions for Collective Action:

“	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.	”
—Elinor Ostrom from OntheCommons.org, "Elinor Ostrom's 8 Principles for Managing A Commmons," adapted from Governing the Commons: The Evolution of Institutions for Collective Action (1990)

A rainforest cleared for agriculture in southern Mexico

Challenges to collective action

Collective action theorists have argued that different kinds of communal arrangements and agreements may be necessary and/or appropriate to manage common pool resources efficiently and to resolve collective action issues. Elinor Ostrom argued that "simple panaceas offered for solving problems related to the commons," whether they involve governments, communities, and/or private individuals, "may cause more harm than good." International environmental issues in particular can make collective action more difficult, according to some theorists. These issues include cross-state water pollution, long-distance air pollution, potentially human-caused climate change, and the over-harvest of fisheries and forests. According to some collective action theorists, one challenge for collective action is the need for information. Ostrom's second principle stated that rules for resource management must reflect local needs and conditions. Some theorists argued that large-scale collective action problems such as fisheries management in open oceans and human-made climate change by definition cover large areas. As a result, the acquisition of accurate data about the problem and its potential solution is expensive and difficult. A lack of accurate data can cause problems for a successful resource management plan, according to some collective action theorists.

Ostrom argued that an efficient and successful common pool resource management plan would consider the following factors:

• Relevant and accurate information: According to Ostrom, many ecological, economic, technological, and social factors can affect resource management. Accurate, regularly updated scientific and local information about a resource and its users is necessary to understand the short-term and long-term changes that affect a resource. Adaptive changes to resource management plans and goals must based on the best available information.
• Conflict management: Resource management can involve conflicts over policies and their implementation, according to Ostrom. A plan that ignores potential conflicts may produce greater conflicts and problems in the future. Collective action theorists argue that management plans must include ways to address the interests and demands of specific resource users so that conflicts can be discovered and resolved. By contrast, a plan that depends on decisions from a management hierarchy may result in quicker decisions but could dissatisfy other users, some of whom may intentionally or unintentionally obstruct or disrupt a resource management operation.
• Rule compliance: Ostrom argued that formal and informal rules are necessary for successful resource management. According to collective action theorists, while formal rules may achieve predetermined objectives, informal rules that govern day-to-day management are vital to govern resources effectively. Individual users, many of whom may be scattered across a wide area for long periods of time, share some responsibility over managing resources in their vicinity and must frequently communicate with others.
• Adaptation and change: According to Ostrom, resource management plans must constantly take change into account. A sustainable resource management plan can never be a long-term plan because plans must be able to change within a short period time, either to fix previous errors and/or deal with new situations.

Case studies of collective action

Some collective action theorists do not view a single policy, such as government regulation and/or ownership or private ownership, as a sufficient solution for managing common pool resources, although these theorists have argued that government or private-based solutions may be optimal in specific cases. Rather, some theorists view a combination of different arrangements involving government, community, and/or private management as a superior alternative to a single policy. Elinor Ostrom argued, "Common-pool resources may be governed and managed by a wide variety of institutional arrangements that can be roughly grouped as governmental, private, or community ownership."

Collective action theorists have argued that successful resource management depends on multiple factors. One factor is the type of resource. Fisheries found in the ocean where it is difficult to discourage over-harvesting are managed differently than forests, such as in the United States where many forested lands are publicly owned and managed. A second factor is location. Common pool resources are found within different social and economic systems, and arrangements for managing resources must take diverse settings into account. Two collective action problems that have been studied by collective action theorists are forests and fisheries.

Deforestation

In a 2005 report entitled Ecosystems and Human Well-being by the Millennium Ecosystem Assessment Panel, a United Nations-convened board of authors and researchers worldwide, argued that forest land worldwide fell by approximately 3 percent between 1990 and 2005. The average rate of deforestation in tropical areas was 4.9 million acres per year from 1990 to 2000, according to the report. Forest land in North America fell by 0.05 percent between 1990 and 2005. Other regions, including East Asia and the Caribbean, did not see a decline in forest land over the same period.

Deforestation, which involves the destruction of forests to make land available for agriculture, residential or community development, is considered by some collective action theorists to be a collective action problem since forests do not regrow as quickly as they are cleared. Additionally, the machinery used in deforestation is powered by oil, which can release carbon dioxide when it is burned. According to the theory of human-made climate change, carbon dioxide and other greenhouse gases (which trap heat in the atmosphere so life on Earth can flourish) from human activity are released into the atmosphere at a higher rate than can be absorbed naturally by the Earth. According to some scientists, higher greenhouse gases in the atmosphere contribute to global warming and subsequent changes in the climate, which may produce disruptive effects such as sea level rise, melting sea ice, stronger storms, and longer droughts. The combustion of forest biomass also releases greenhouse gases into the atmosphere. Therefore, deforestation is viewed by some collective action theorists as a two-fold problem. Theorists have offered several ways to approach global forest management.

Collective action theorists see forests as a common pool resource where sole government ownership or private ownership is inadequate to prevent deforestation.

Policies to address deforestation

Forest management policies to prevent or limit deforestation have ranged from government ownership to forest privatization. Forests comprise 31 percent of the Earth’s surface—4 billion hectares (9.8 billion acres). Governments own the vast majority of forested land. According to a 2002 report from the Center for International Environmental Law, a public interest law firm in Washington D.C., forest ownership data for 24 of the top 30 forested countries, which includes the United States, China, Brazil, Canada, Indonesia, Australia, and 18 others, showed that 2.8 billion hectares (6.91 billion acres, or 70 percent of all forested land) were owned by governments. 443 million hectares (1.09 billion acres, or 11 percent) were privately owned, and 246 million hectares (607.8 million acres, or 6 percent) were owned by "indigenous and community groups." The data was derived from official government statistics from 24 of the top 30 forested countries and excludes other countries with forests (forest data for the remaining six of the top 30 countries and other countries were unavailable at the time of the study). The 24 countries represented approximately 93 percent of the world's remaining natural forest—roughly 3.9 billion hectares (9.6 billion acres).

The Amazon Rainforest, which stretches over 2.1 million square miles across nine countries, is the world's largest forest.

Although governments own the vast majority of forests, proponents of government ownership have argued that governments should own more forested land to stop unregulated access to forests by private users that could lead to deforestation. Proponents of privatization have argued that government ownership does not effectively prevent deforestation because most forested lands worldwide are already government-owned, and governments cannot sufficiently protect so many forests due to minimal budgets or a lack of staff. Privatization proponents argue that extending private ownership will prevent deforestation because private users will have an incentive to protect their own forests efficiently and cost effectively. Critics of privatization have responded that most deforestation has occurred on privately owned land because farmers clear the land for agriculture or private developers clear the land for houses or businesses.

Other policies include programs that charge residents in the developed world for the protection of forests in the developing world. Residents in the developed world pay the costs of preserving forests while residents in the developing world receive more income and therefore have a monetary incentive to preserve their forests. Critics of these programs have argued that these goals have not been achieved. For example, a 2004 study by World Development, an academic journal covering development issues, found that payments for forest protection in Costa Rica often went to large landowners with high incomes. A 2007 study in Conservation Biology, the scientific journal of the Society for Conservation Biology, found that certain areas did not have significantly less deforestation after investments were made.

Collective action theorists emphasize that forest and other resource management must "fit with the local culture and institutional environments of those who depend on ecosystems for their livelihood." As a result, forest management policies are difficult to design and implement. According to collective action theorists, while government management may be less efficient than alternatives, if forest users do not understand or follow rules agreed upon by a group, the result will likely be over-harvesting. Collective action theorists continue to study forest management policies for ongoing problems and potential solutions.

Overharvesting of fisheries

Fisheries are another example of a common pool resource. According to a 1987 report by the United Nations-led World Commission on Environment and Development, fisheries are part of what is called the "global commons," which includes ecosystems, oceans, forests, land, and other shared resources that transcend national boundaries. According to the UN report, the global catch of fish rose between 6 percent and 7 percent each year from 1950 to 1969—from 20 million tons of fish caught to 65 million tons of fish caught within 19 years. After 1970, the average annual growth in fish catches fell to 1 percent due to depleted fish stocks. Collective action theorists view overfishing as a collective action problem since the harvesting of fish grew faster than the replenishment of fish stocks within a 19-year-period. This phenomenon hurt developing and/or low-income countries that rely upon fish for food or economic well-being, while developed countries were more successful at adapting to smaller fish stocks off their coasts. Between 1974 and 1983, the share of fish catches in the northwest Atlantic by the United States and Canada rose from less than 50 percent to more than 90 percent, while the annual catch declined from over 2 million tons of fish to 250,000 tons in the same period.

Nongovernmental organizations established rural fish-farming ponds in the Congo as a cooperative project to manage fish resources.

According to collective action theorist Elinor Ostrom, overfishing is partially a result of how freely an individual can access the ocean. In general, there is no property right to fish stocks in most parts of the open ocean because fish stocks are essentially open access. Whale and tuna fisheries in the Pacific Ocean, cod fisheries in the Atlantic Ocean, and lobster fisheries in the Caribbean are frequently subjected to overfishing. The United Nations responded to overfishing in 1982 by establishing zones extending 200 nautical miles along the borders of coastal countries. Dubbed "exclusive economic zones" (EEZs), these areas contained fisheries that coastal countries would manage themselves. The EEZ policy’s purpose was to encourage governments to manage their own domestic fisheries to solve overfishing. Instead, national governments had an incentive to fish more in these areas because they had sovereign power over them. With that incentive, national governments spent money expanding government-owned fleets to conduct more fishing, which led to greater overfishing in coastal regions. Data on fish stocks were also incomplete at the time in certain areas, leading to inaccurate assessments of fish stocks. In 1992, Canada instituted a moratorium on northern cod fishing because the country's cod fisheries did not replenish quickly enough due to overharvesting in the 1980s. As a result, local fishers experienced severe economic hardship due to the moratorium.

Policies to address overharvesting

Collective action theorists have studied alternative arrangements, such as local resource management, to address fishery management problems. Some governments have adopted quote systems to prevent overfishing off their coasts. One example cited by collective action theorists is New Zealand's fishery quota system. New Zealand adopted the system in 1986 for a subset of the country's domestic fisheries. Individual fishers received "individual transferable quotas" (ITQs) allowing them to harvest an assigned quantity of fish over a period of time or to sell (“transfer”) their quota to other fishers. The quota was not a fixed quantity but a portion of a government-instituted level of fish that could be caught each year. The goal of ITQs was to ensure that fishers who operate less efficiently could sell part of their quotas to more efficient fishers. According to collective action theorists, the ITQ system was a co-management system where individual fishers participated and made fishery management policies based on their local knowledge.

See also

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  Conservation

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  Free market environmentalism

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  Ecomodernism

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  Environmental justice

Footnotes

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