COMMON PROPERTY RESOURCES

Throughout the world there are assets that are neither private nor state property, but common property. The term denotes a class of institutions that govern the ownership and rights-of-access to assets. Common property assets are to be distinguished from "public goods," in that, unlike the latter, use by someone of a unit of a common property asset typically reduces the amount available to others by one unit (in economic terminology, such an asset is rivalrous in use). The institution of common property creates and harbors reciprocal externalities. As some of the most interesting examples of common property assets are natural resources, this entry is restricted to them.

Global and Local Commons

Broadly speaking, there are two types of common property resources. Assets that are mobile and have a global reach are subject to "open access," in that everyone in principle has access to them. Earth's atmosphere, as both a source of human well-being and a sink for depositing effluents, is the classic example: For physical reasons, the atmosphere cannot be privatized, nor can it be expropriated by any state. In a pioneering article published in 1954, H. Scott Gordon argued that an asset that is everyone's property is in fact no one's property. He showed that resources under open access are overused, in that it is in the public interest to restrict their use. His reasoning was simple–given that resource bases are finite in size, they have positive social worth. But an open access resource is free to all who use it. So, the cost that each user incurs is less than what it ought ideally to be. Under open access the rents attributable to the resource base are dissipated; there is excessive use. A user tax (or, alternatively, a quota) suggests itself as public policy.

It will be noticed that the production of public goods and the use of open access resources reflect features that are mirror opposites of one another: In the absence of collective action, there is an undersupply of public goods and an overuse of open access resources. Garrett Hardin's admirable metaphor, "the tragedy of the commons" (Hardin, 1968, pp. 1,243–1,248), is applicable to open access resources. Climate change owing to anthropogenic causes is a an example of such a "tragedy." In earlier millennia demand would have been small, and such resource bases as the atmosphere and the open seas would legitimately have been free goods. But in the twenty-first century the matter is different.

However, there are geographically localized resources that are common property to well-defined groups of people, but to which people not belonging to the groups do not have a right of access. It has now become customary to refer to such assets as "common-property resources," or CPRs, which is an unfortunate usage, since open access resources are common property too. In what follows, CPRs are refered to as "local commons."

The theory characterizing the use of local commons was developed by Partha Dasgupta and G. M. Heal (1979, pp. 55–78) as a timeless, noncooperative game involving N players (N>1). Their model took the form of a modified version of the Prisoners' Dilemma game. They showed that if N is smaller than the number who would have exploited the resource had it been open access, rents do decrease to some extent, but not entirely. The authors noted however, that, as the local commons are spatially confined, monitoring one another's use of the resource is possible. The authors thereby argued that communities should in principle be able not only to reach agreement on the use of the local commons, they should also be able to implement the agreement. Dasgupta and Heal explored both taxes and quotas as possible regulatory mechanisms. A large and rich empirical literature on the local commons in poor countries has grown since then, confirming those predictions of the theory (Murphy and Murphy, 1985; Wade, 1988; Ostrom, 1990, 1996; Feeny et al., 1990; Baland and Platteau, 1996; among many others).

Examples of Local Commons

The local commons include grazing lands, threshing grounds, lands temporarily taken out of cultivation, inland and coastal fisheries, irrigation systems, woodlands, forests, tanks, ponds, and recreation grounds. In poor countries property rights to the local commons have been found most often to be based on custom and tradition; they are usually not backed by the kind of deeds that would pass scrutiny in courts of law. Therefore, tenure is not always secure–a vital problem.

Are the local commons extensive? As a proportion of total assets, their presence ranges widely across ecological zones. There is a rationale for this, based on the human desire to reduce risk. Communal property rights enable members of a group to reduce individual risks by pooling their risks. An almost immediate empirical corollary is that the local commons are most prominent in arid regions, mountain regions, and unirrigated areas, and least prominent in humid regions and river valleys. Another corollary is that income inequalities are less in those locations where the local commons are more prominent. Aggregate income is a different matter, though; it is the arid and mountain regions and unirrigated areas that are the poorest.

Studies in a number of dry rural districts in India by N. S. Jodha, published in 1986, have revealed that the proportion of household income based directly on the local commons is in the range 15 to 25 percent. W. Cavendish has arrived at even larger estimates from a study of villages in Zimbabwe published in 2000. The proportion of household income based directly on local commons is 35 percent, the figure for the poorest quintile being 40 percent. Such evidence as Jodha and Cavendish have unearthed does not, of course, prove that the local commons in their samples were well managed, but it does show that rural households would have strong incentives to devise arrangements whereby they would be managed.

Are the local commons managed communally? Not invariably, but in many cases they are, or have been in the past. The local commons are typically open only to those having historical rights, through kinship ties or community membership. Their management is mediated by social norms of behavior that arose in long-term relationships among members of the community. An empirical corollary is that, unless the local commons assume a legal status, in the contemporary sense, their management would be expected to break down if members become separately mobile during the process of economic development. Theories of social capital, much discussed in recent years, have found an apt testing ground in the local commons. The management structures of local commons have been found to be shaped by the character of the natural resource under their jurisdiction. For example, communitarian institutions governing coastal fisheries have been discovered to be different in design from those governing local irrigation systems.

That the local commons have often been managed is the good news. There are, however, two unfortunate facts. First, a general finding is that entitlements to products of the local commons is, and was, frequently based on private holdings: richer households enjoy a greater proportion of the benefits from the commons, a finding that is consonant with cooperative game theory. In extreme cases access is restricted to the privileged in the community (for example, caste Hindus in India as shown by Beteille in 1983).

The second unfortunate fact is that the local commons have degraded in recent years in many poorer parts of the world. One reason for this was previously noted: growing mobility among members of rural communities. Another reason has been population pressure, making opportunistic behavior among both locals and outsiders the inevitable response of economic desperation. Yet another reason has had to do with the state establishing its authority by weakening communitarian institutions, but unable or unwilling to replace them with an adequate structure of governance; this situation is observed especially in the Sahel region of Africa.

Fertility Response

Theoretical considerations suggest that there is a connection between common property management and household size. The point is that part of the cost of having children is passed on to others whenever a household's access to common property resources is independent of its size. Moreover, if social norms bearing on the use of the local commons degrade, parents pass some of the costs of children on to the community by overexploiting the commons. This is an instance of a demographic free-rider problem–an externality.

The poorest countries are in great part agriculture-based subsistence economies. Much labor is needed there even for simple tasks. Moreover, households lack access to the sources of energy available to households in advanced industrial countries. In semi-arid and arid regions water supply is often not even close at hand, nor is fuelwood nearby when the forests recede. From age six or so, children in poor households in the poorest countries must help care for their siblings and domestic animals; soon afterwards, they are required to fetch water and collect fuelwood, dung (in the Indian subcontinent), and fodder. Very often, they do not go to school. Children of age from 10 to 15 years old have been routinely observed to work at least as many hours as adult males (Bledsoe 1994; Filmer and Pritchett 2002).

When poor households are further impoverished owing to the deterioration of the commons, the cost of having children increases even though the benefit increases too. D. Loughran and L. Pritchett in their work published in 1998, for example, found in Nepal that households believed that resource scarcity raised the net cost of children. Apparently, increasing firewood and water scarcity in the villages did not have a strong enough effect on the relative productivity of child labor to induce higher demand for children, given the effects that worked in the opposite direction. Degradation of the local commons acted as a check on population growth.

However, theoretical considerations suggest that in certain circumstances, increased resource scarcity (brought about, perhaps, by institutional deterioration) induces population growth. Households find themselves needing more "hands" when the local commons begin to be depleted. No doubt additional hands could be obtained if the adults worked even harder, but in many cultures customary roles do not permit men to gather fuelwood and fetch water for household use. No doubt, too, additional hands could be obtained if children at school were withdrawn and put to work, but in the poorest countries many children do not go to school anyway. When all other sources of additional labor become too costly, more children would be expected to be produced, thus further damaging the local commons and, in turn, providing the household with an incentive to enlarge yet more. Of course, this does not necessarily mean that the fertility rate will increase; if the infant mortality rate were to decline, there would be no need for more births in order for a household to acquire more hands. However, along this pathway poverty, household size, and degradation of the local commons could reinforce one another in an escalating spiral. By the time some countervailing set of factors diminished the benefits of having further children and stopped the spiral, many lives could have been damaged by worsening poverty.

Kevin Cleaver and Götz Schreiber, in a study published in 1994, have provided rough, aggregative evidence of a positive link between population increase and degradation of the local commons in the context of rural sub-Saharan Africa, and N. Heyser (1996) for Sarawak, Malaysia. In a statistical analysis of evidence from villages in South Africa, R. Aggarwal, S. Netanyahu, and C. Romano (2001) have found a positive link between fertility increase and environmental degradation; while D. Filmer and Pritchett (2002) have reported a weak positive link in the Sindh region in Pakistan. Such studies are suggestive of the ways reproductive behavior in poor countries is related to the performance of institutions that govern the local commons.

See also: Externalities of Population Change; Hardin, Garrett; Natural Resources and Population; Water and Population.

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Partha Dasgupta