common public resources

Question 1

Elinor Ostrom

Answer 1

devoted academic life to studying problems related to common-pool resources

Question 2

common-pool resources

Answer 2

goods/resources that benefit group(s) of people BUT provide lower benefits to everyone if each individual pursues her own self interest
OR
non-excludable BUT subject to crowding out

Question 3

examples of common-pool resources

Answer 3

• fisheries
• water
• government funds

Question 4

Garrett Hardin (1968) → “tragedy of the commons”

Answer 4

individuals acting rationally and independently according to their own self-interest will deplete a shared resource, EVEN if it is contrary to the best interest of the group

Question 5

summary of the platform

Answer 5

in a prison where inmates are fed on a descending platform, those on the upper levels take more than their fair share while those below are left to starve on scraps

Question 6

nature of the CPR problem (2-fold)

Answer 6

1. stock → difficult/impossible to exclude actors
2. flows → individual rationality leads to over-consumption

Question 7

solutions to CPR problems (2)

Answer 7

1. the state (Leviathan)
2. the market (privatization)

Question 8

the state (Leviathan) solution to CPR problem

Answer 8

governments should control common-pool resources

Question 9

government should decide…? (3)

Answer 9

1. who can use CPR
2. when they can use CPR
3. how many animals can graze

Question 10

examples of the state (Leviathan) solution (3)

Answer 10

1. Brazilian state should control the Amazon Rainforest
2. Heillbroner (1974): “iron governments”, military rule
3. Ehrenfeld (1972): public agencies or international authorities

Question 11

criticism of imposing fines on rule-breakers?

Answer 11

Elinor Ostrom’s criticism → most agencies can’t have all that ability & information, and there would be huge costs involved

Question 12

equilibrium with imperfect monitoring

Answer 12

an agency cannot perfectly monitor/punish actions (lack of budget, trained staff, etc.)

Question 13

real life example of the state solution

Answer 13

national agencies (Thailand, Nepal, India) issued elaborate regulations concerning the use of forests

Question 14

problems with real-life national agencies (2)

Answer 14

1. unable to enforce enough foresters
2. foresters were paid low salaries → corruption, bribes

Question 15

consequences of problems with real-life national agencies (2)

Answer 15

1. overexploitation of resources by private agents
2. violent conflict (indigenous vs. exploiters)

Question 16

the market (privatization) solution to CPR problem

Answer 16

end the common-property system by creating a system of private property right

Question 17

problems with the market (privatization) solution to CPR problem

Answer 17

privatization is not always feasible (water, fisheries, forests)