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Compare private land ownership and communal land tenure with regards to ecologically sustainable resource use. Pay particular attention to social/cultural factors. What was Harding missing?


Main: Not everything is rational. Rational theories have been highly developed. Degree of rationalisation changes over time (when people develop). That produces fundamental flaws in the theories.
Explaining the question: resources: capital, land and labour. I combine land and capital as land. But what about labour and population? I will make briefly as it is needed to evaluate PPR and CPR.

Theories and problems

1.      Management Theories

Management to increase efficiency, decrease poverty and inequality. All measured not in monetary terms, but welfare, and social things also. As they are very hard to measure, the rational theories in practice all this thing is of little use. However the main principle - we should make it most comfortable for individuals to co-operate - works every time (Nash).
1.         State of war, need political rule (Hobbes)
2.         Society is self regulating - (Locke). Each person is selfish, but there are common practices like birth control (Rappaport, Harris)

3.         Whatever the theory problems do arise

Better solutions get to the reason, not outcome

Managing population

Population is a public good. People tend to over-consume when allowed to.


Malthus population reaches to optimal, but optimal is too much

Cannot maximise both humans and well-being (Bethan goal) because:

Harding says:

1.      Differential. equation problem.

2.      Work calories must be eliminated

I Say:

1.      vars. not independent! humans can affect their growth

2.      calories will not finish before space (nuclear energy)

3.      we are not even near to equilibrium

Managing resources:

Resources are land Labour and Capital. Labour nowadays definitely private (no slavery) and in capitalist society Capital and Land also private. But in Communities large economies of scale from common usage.

Externalities also large. Needs regulating

Inflexibility of decisions. Wade - better to rely on existing systems to perform new functions than to set up new institutions. But must be careful not to invest things that will become useless soon anyway.

Rational models (Goals directed, means ends)

1.         Private

Only individual receives utility

Usually stable, because smaller and people know their own actions best

Can be rented to others


1.      Link to inequality

2.      Social costs not taken into account

3.      When pop. is growing and only oldest son gets the thing

2.         Public free

Everyone allowed to use. No restriction possible usually.

No-one should care.

Uncertainty what other users do

no duties corresponding to usage (Brombey)

3.         Common Property

Limited users. Efficient method and agreement is needed. No CPR only resource used commonly (McCay). Consumption is essentially subtractive (i.e. not air or swimming pool)

commonly managed but services to private use only (Ostrom)

Likely to be common when

1.         Jointness of supply
2.         Excludability
3.         Indivisibility


4.         The costs of administering are smaller than for private. So low value property where the admin. costs for a large proportion are more likely to be common.

Constitutional choice (Buchanan & Tullock)

5.         benefits are greater from the CPR than cost of creating them.

Cost is smaller when people have more information

1.      common understanding of the problem

2.      trust to other people


1.         Overuse - Positive big utility falls to You from usage, Negative small utility from overuse falls to everyone, So resources tend to be overused.

2.         Uncertainty what other users do. However people tend to think about future as well - future negative remains, positive one off

If it is cheaper than 1/n to punish the cheater, instead of allowing him to use commons to much people will punish him.

Join these - in long term - utility of others increases, so when they do not discount future they will punish cheater anyway

However - collective punishing system. Initially hard to set up.

3.         Poverty when common is very important and uncertain

4.         Leadership - There should be someone in charge, must be unbiased. Must undertake decision making. Not too much bureaucracy, but must be fair.

5.         People try to dominate for selfish reasons - leads to inequality

6.         Excludability difficult and has costs

7.         Slow to change and vulnerable to new condition

8.         Inhuman to exclude the sons of original users, but when don't then gets overexploited

9.         Hard to measure the usage of individuals, thus to control

5.      Mixed property ownership (private and commons)

Land common, crop private. No specific theories, must look at evidence and examples. Although they are likely to be most feasible.

Alternative models

People not always rational and selfish

Care about others as well.

Non monetary judgement - like reputation

God controls instead of humans

1.         Optimal foraging (not predictable)

Evolutionary reasons

use same as previous people

minimise the time used to get minimum acceptable results

2.         Customary

Have social norms and culture

In commons they should dominate

Very hard to do research on, so tend to be ignored

Aim of management

1.      To rationalise

2.      To conserve for future usage. Some resources non-renewable.

3.      Equalise


1.         Game theory

2.         Asymmetric information

3.         We need a theory of irrational behaviour - based from the evidence etc.

2.      Inequality

1.      Define

Lorenz curves and all that. When someone earns more than others

CPR-s management should avoid inequality. Its more meant for inequality than efficiency.

2.      Caused by

1.         Not all goods are worth the same to different people

2.         We cannot measure all goods in money (sunshine)

3.      Why problematic

1.      Decreases welfare

2.      Inhuman

3.      But some inequality increases efficiency (capitalist carrot and stick)

4.      Causes poverty

3.      Poverty

1.      Define

When some people have not enough money to survive. CPR-s management should avoid and provide minimum income.

2.      Caused by

1.      Inefficient management

2.      People themselves being stupid

3.      Luck

4.      Mass poverty from bad management

5.      wild economic fluctuations

3.      Why problematic

1.      Sometimes fear of poverty most efficient

2.      How bad you do depends on society - moral needs besides social

3.      Population increase leads often - but when poor are allowed to die then problem disappears, whereas if kept alive poverty increases - moral dilemma.

4.      Moral poverty - tragedy causes. When one cannot do anything about it (Whittehead)

4.      Efficiency

Most total outcome. Desirable. However, efficiency of what measure?

Economy should evolute to most efficient one. But humans have stopped natural evolution. so should help artificial one.

5.      Risk management

is a public good. Free riding problems. But people are risk averse.


Overview of sources used.

1.      Managing population

1.         Overview of population growth recently. Population explosion in third world countries. However growth has stopped in modern economies well below the maximum that society can sustain.

2.         UN human rights - can have as many children as you want

3.         humans can successfully manage their population growth nowadays

4.         However in third world countries pop. is concentrated and that causes problems.

5.         Population stagnated and GDP per head grows - simplistic models of inputs do not apply

6.         Unemployment may be the evidence of present optimal population (never occurs in countries with growing population)

2.      Managing resources

1.         CPR solutions

1.         In Tamil Nadu, India they can have either timber from their lands or they can use it for grazing.


1.      CPR user rights auctioned and proceeds go to common fund for everyone's benefit. Link with mixed solution.

2.      As local institutions do not work (biased) decision making is external

3.      Individuals compete for CPR-s usage and no institutions are needed. Dead trees are everyone's.

4.      CPR-s not essential to many people

5.      CPR dependent are poor and depend on waste - correlation direction?


1.         Cannot maximise both

2.         Difficult to see how intense usage is bad

3.         Hard to exclude

4.         An attempt to exclude all non-villagers would double costs

5.         Need power for exclusion

6.         Power has been diminishing with roads

7.         Decision making - bureaucratic rules and unfairness because some dominate. Bribery.

8.         External decision making effectiveness is slow

9.         timber and fuel have jointness of supply and grazing indivisibility

10.       Competition problems

1.         leads to extreme pressure on CPR

2.         Leads to illegal competition (cutting live trees)

a.         No incentive for people to punish illegitimate users

b.         Once illegal use gets started it develops, because bribery system develops

Current solution

1.      State regulates CPR-s

2.      Poor people marginalised and forced to use CPR-s

3.      Much is privatised

4.      But there is currently enough, although resources are diminishing

Link to: Management technique - optimal foraging

Privatisation - inequality and poverty

State regulation - ineffectiveness

2.         Amazon lake


Foraging works when people migrated out

Rational - did not allow commercial, barbasco had already destroyed the lake once

custom - waste, dying lakes

Enough experience and cultural evolution helped


Not because of population increase

Logic of production changed:

1.      for exchange

2.      seek to accumulate surplus

3.      state intervention was not there

4.      imperfect information

5.      outsiders started to use (not commons anymore)

Current solution

Very complex methods for tribes

3.         Maritime tenure in Papua New Guinea


1.         Concentrated on gifts (not rational)

2.         No other form of wealth holding available

4.         Ponam Fishing

God controls everything

Not stable to external shocks

Inter-village competition occurred - need for state

2.         Private solutions

1.         Tamil Nadu, India

Non-essential property is privatised because destruction is not critical

3.         Combined solutions

1.         South Indian Villages

grazing lands. Crop is private, however, land public

Bigger villages co-operate, while smaller do not. Thus smaller are poor and have less variety.

BUT they do not co-operate because not much gains, as opposed to being lazy.

WHY mixed:

1.      privatisation expensive

2.      Economies of scale from village-wide agreement

3.      Complex situation

4.      Need to eliminate bureaucracy, increase efficiency & incentives

5.      punishment exists (irrigation finished)

6.      no risk management as no control exists


No point in privatising and charging for use - instead rent and use rent money to maintain

2.         Colonists

They have combined family and state and caused mixed ownership.

Many problems

3.      Inequality

4.      Poverty

5.      Efficiency


Of the many theories all are assuming rational people. Models are consistent when people behave rationally - either they can explain destruction of commons as a rational behaviour (Indian Tamil Nadu forests) or they can explain the survival of commons when its benefits are realised (Amazon lake). However, people do not always behave rationally. A concept of "degree of rationality" can be introduced. It can be tested by deriving the rational outcome and seeing how many times people actually do behave rationally. At present models assume some degree of irrationality, but see this as unbiased - i.e. it can change the outcome to either side. However, irrationality is often biased. When people treat nature as something extraordinary they are more likely to preserve it more, than to destroy it. Although there are some opposite examples (fishing in Ponam villages), these examples are rarer than the ones where nature is preferred more. Thus in devising solutions for commons problems, we might take it for granted that people in Oceania will likely to care more about environment than western models predict. Thus, for example, the solution to preserve natural forest would not have to include as many guards making sure  that nobody litters the forest as it would do in America.

This degree of irrationality is purely an empirical magnitude - we should get more involved in actual observation - it is unlikely that any theory can be unbiased estimator. That is the main flaw in many predictions to the future (including Harding's) when they apply rational models to real world.

Irrational behaviour (not explained by game theories or not yielding selfish benefit) would be for example cultural traditions, friendship, old customs etc.

However, they are observable. Thus having established that the relationship between tribes sharing a common grassland has not been very good in the past 10 centuries then the tribes are less likely to form a common authority governing the usage, even though it might be profitable.

We must not think however that everything that does not follow our model is irrational behaviour. People might have their own individual rational factors affecting their behaviour, that we have not got a clue. Thus in formulating any of the theories we must first make sure that none of the essential variables are excluded and then make a prediction of the actual outcome, based on the irrationalities. When this cannot be done, we must do some further research, and should only adopt the half-solution on a small scale to test it further (obvious!).

Another thing is the endogenous and exogenous stuff. Most variables cannot be taken as given when the time period goes to very long. Furthermore, even when based on our actual research one variable does not affect the other, then when we suddenly start controlling that first variable and putting pressure on it might well start affecting. these problems cannot be predicted. Thus we must leave our solutions to be dynamic (I love a word that does not mean anything) - that meant we should be able to manipulate the system once its on its way.

OK, before getting into specific examples when CPR is better than PPR etc., I must note that CPR is usually more complicated and behaviour is less rational so the outcome will be always less predictable (less ideal??) than the private one. Thus we should prefer private ownership unless we have a specific reason not to.

Reasons why shouldn't prefer private

1.         Nature of good (children, education, defence, ocean)

2.         Externalities

3.         Economies of scale

4.         Equality

5.         Poverty avoiding

6.         Efficiency (division of labour etc.)?

1.      Managing population

At Harding's time population was growing everywhere, so logical that he was worried. However we should not be so worried anymore.

Natural birth management works fine - rationality works

2.      Managing resources

Always should be

1.         Somebody responsible

2.         Beneficial to everyone

3.         Institutions - they are also part of property

1.         More CPR when

1.         Jointness of supply

2.         Indivisibility

3.         Excludability

4.         Hard to control

5.         Very important for life

6.         Property rights are necessary, but not sufficient to avoid over-exploitation - control mechanism needed (RG)

7.         when people are poor - they are more likely to co-operate etc. People in crises organise themselves better. Do we have to reach crises before we start organising?

Based on this - false to claim that CPR leads to poverty - more likely that poor are better in putting up a CPR.

8.         Society already possesses other assets that are common - reputation (RBa) or ability to pressurise or well built cultural values. However danger when they erode.

9.         When people behave irrationally (God)

10.       when short term rate of return is too small but very certain in the long term (private is too short-term and would sell the thing)

11.       Makes sense to leave the amount you gained from your fathers conservation to our children. When cant do that commons will not survive. This is ethical etc.


1.         Tend to go open access when pop increases, or commercial activity with outer world starts (Barbados in lake  GG)

2.         Management diseconomies - takes ages for people to get used to links to

3.         Must be used for long periods to be profitable

4.         When state is owner it is not responsible (as it is too far)

5.         Evolving processes should not take too long time (i.e. that not all forest is destroyed GG)

6.         Level of management complications needed to sustain can be too much to handle (ponams RBa)

7.         Management bureaucracies tend to grow once started (public Choice theory). Should resist attempts of social security etc.

8.         Credibility of promise

2.         More Private

1.         No control (BG)

2.         Even bigger ones can exist when trade unions ensure enough wage is paid to workers (servants in BaG)

3.         Better than state that has no responsibility

4.         When thing is developing quickly and change is needed

5.         When society is not closed (trade occurs) we need at leas some mixture or very strong links in CPR

6.         Well managed private with perfect information can be as effective as commons (i.e. can buy goods from other and co-operate only when needed)

7.         Inequality arising is not bad when initial conditions are equal and one becoming richer does not prevent others

8.         when ownership and control cannot be separated

9.         private companies can be public limited - a step further

10.       when unethical solutions are needed that do not suit to everyone (selective harvest of animals)

3.      Inequality

Commons are more directed to equity than efficiency

4.      Poverty

5.      Efficiency


I support PPR!
CPR are a temporary solution or based on historical reasons where transformation would destroy the thing
When something new is built it should be private in the first place and then public limited etc.
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