Common property externalities: Isolation, assurance, and resource depletion in a traditional grazing context
Runge, C. F.
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Common property rights are distinct from open access, where there are no laws regulating individual grazing; it is the breakdown of common property rights which has resulted in overgrazing in the Sahel, which in turn has given rise to call for land to be privatized. Others have argued that the solution to overgrazing is to internalize its costs by making the public aspects of the range private, thus creating a market in private grazing rights. By failing to differentiate between common property and open access, this assumes the inevitability of overgrazing, and also takes it for granted that each individual's choices are independent of the rest of the groups, and it ignores each persons uncertainty about how the rest of the group will behave. Problems of unrestricted entry are not identical to problems of common property which pertain to the use-rights by a group of a given size. Comparing grazing opportunities to the prisoners dilemma, each individual herder finds it rational to defect on any agreement made, although this ends in ruin for all. This means that all are led to a non-cooperative equilibrium, not least because there is no external enforcement of agreements. However, allowing no possibility of co-operatively enforced rules undermines the credibility of this argument. The implied inseparability further weakens it; dropping to ability to separate implies the interdependence of individual choice, as each herders grazing decisions are based on the expectation of the actions of others. This will have the effect of changing the marginal cost to each individual caused by the actions of others, and the game structure of the prisoners dilemma is no longer appropriate. The assurance problem (Sen) throws a different light, as it is essentially co-operative; still strategic in nature, it has two equilibrium points as there is no incentive to defect once an agreement has been made. Thus institutional rules providing complete assurance are self-reinforcing. Sub-optimal outcomes such as overgrazing do not arise from the dominance of individual strategy but from the inability of interdependent individuals to co-ordinate their actions. Co-operative solutions are most likely to succeed in small cohesive groups as assurance is largely a matter of information and communication.