Governing the Commons

The astonishing thing about allthis is that common sense is enough and actually performs better than anobviously engineered solution.  Throwaway the silly rule book and let common sense and individual need work it out.

Perhaps we need to apply this toa lot of other problems.

Certainly where the commons isvery much in force, such as fishing, early reports are promising. A fishingcooperative is formed to manage a geographical region and manage the resource.  All of a sudden stakeholders have incentivesto both repair damage , to improve the environment and to educate others.

Such attention has been enough torestore parts of the original local fecundity. Supporting this is an obvious way to go without spending public fundsfoolishly.

Unwritten rules count for a lot.
Posted February 22, 2011

About the Authors

Sandy Ikeda is anassociate professor of economics at Purchase College, SUNY, and the authorof The Dynamics of the Mixed Economy:Toward a Theory of Interventionism.... SeeAll Posts by This Author
Wabi-sabi | Sandy Ikeda

As an economics professor, I often witness the surprise of my studentswhen I explain how something as important as the market for food or clothing isself-regulating.  True, there are quality and safety regulations thatattempt to control potential hazards “around the edges” of these vital markets,but by far the heavy lifting is done by competition among rival firms in thesame industry.  Trying to sell tainted food or shoddy clothing in acompetitive market without special privileges will either put you out of businessor make you very quick on your feet.

And I get great satisfaction when I see students realize thatadvertising, free entry, and entrepreneurship, in the context of economicfreedom, are what keep goods and services safe, cheap, and of goodquality.  Witness what happens when drugs and prostitution are prohibited:overly concentrated, dangerously mixed narcotics and significantly higher ratesof sexually transmitted diseases, both accompanied by violence andcorruption.  Here government intervention thwarts self-regulation.

The Nonmarket Foundations of the Market Process

In the past dozen years or so, as a result of my research interest inthe economy of cities, which was sparked by my discovery of the writingsof JaneJacobs, I’ve come to appreciate more and more the nonmarket foundations ofthe market process.  Some of this has been reflected in previous Wabi-sabicolumns that were concerned with social networks (most recently lastweek but also here). Without norms that say, for example, treating strangers fairly and tradingwith them is good, or that lying to and stealing from strangers is bad, humanwell-being couldn’t have soared to the heights of the past 200 years,especially the last 60.  Now obviously none of this would have happenedeither without the widespread acceptance of private property, freedom ofassociation, and the rule of law.  But norms of trust andreciprocity, conventions of fair play, and the like are what has enabledordinary people to really harness these social institutions.

In a similar vein, ElinorOstrom, winner of the 2009 Nobel Prize in economics, has spent a lifetimestudying how communities in culturally diverse locations around the world –including Spain, Switzerland, Japan, and the Philippines – have found waysto solve “common pool resource” (CPR) problems.  These arise when a valuableresource, such as a river or a forest, is not owned entirely by any person orgroup, a condition that can create powerful incentives for individuals(“appropriators”) to overuse the CPR to the long-term detriment of the entirecommunity.  Each individual appropriator might realize thatself-restraint is in her own as well as her neighbors’ interest, but if shebelieves those neighbors will opportunistically free-ride on herself-restraint, she too will be sorely tempted to free-ride.

Ostrom found that in the majority of the successful cases that shestudied, the appropriators themselves, mostly or entirely without help from thegovernment, established rules, conventions, and enforcement mechanismseffective enough to keep overuse and conflict to a minimum and flexible enoughto adjust to changing circumstances over long periods, sometimes centuries,while preserving the CPR.  Again, these complex arrangements wereessentially self-organizing and self-regulating.  These kinds of CPRsituations appear in many places, including on the streets of a majormetropolis.

The “Traffic Commons”

I recently showed my students a shortvideo about a radical way of addressing problems of trafficcongestion: accidents, pollution, and time wasted on the road.  This ideahas been spreading across northern Europe, including the Netherlands, Sweden,and now the United Kingdom. It’s quite simple:  Remove traffic lights, cautions, and marked pedestriancrossings.  There are also no legal priorities given to vehicles,pedestrians, or bicyclists.  In principle a driver or bicyclist could gothrough an intersection without stopping for anyone; a pedestrian could crossanywhere at any time.  All would still be liable for any injury or damagetheir actions might cause, but no one would be guilty of a traffic violationinsofar as there were no laws or regulations to violate.

Instead of chaos, the result has uniformly been fewer accidents andinjuries, a smoother flow of traffic, even in busy London, and perhaps less pollution fromneedlessly idling vehicles.  Without signs to guide (or distract) them,drivers are far more careful and aware when they approach an intersection,pedestrians more cautious when crossing the street.  Common sense andnorms of civility prevail for the most part.  It’s undoubtedly true thatthe initial intersections were chosen for this experiment because of theirpotential for success.  Still, in the video you don’t see pedestriansfearfully scampering across the street or cars chaotically fighting for theright-of-way. On the contrary, cars, walkers, and bicyclists rather politelyintermingle, as equals, as they negotiate the unmarked intersection.

No one announced what norms of civility people should observe in thetraffic commons, nor what rules of crossing they should follow.  Instead,ordinary people simply used their eyes and their brains.  Order emerged,like those communities Ostrom studied that successfully preserve common poolresources. The appropriators — the drivers and pedestrians — regulate their ownbehavior because no one wants to cause an accident.  It’s commonknowledge that most of the rules of the road are unwritten anyway — whichraises the question of whether any of them should be written at all.

When I saw this video I was reminded of when I was in Beijing in 1984 trying to cross one of those100-yard-wide (or so it seemed) boulevards filled with a thick, endless streamof bicyclists.  I stood paralyzed on the edge of the traffic until ourguide told me that I should simply start walking through, slowly but withoutstopping, and the bicyclists would avoid us (a little like a cowboy wadingthrough a herd of cattle) – and they did!

You couldn’t do that safely in the congested streets of New York City today, ofcourse.  But without all those traffic regulations giving everyone a falsesense of security, some day you might.

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