The tragedy of the commons

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					The Tragedy of the Commons                           Ingrid Solberg




The Tragedy
   of the
 Commons
    Written by Ingrid Solberg, s989574
               Spring 2002


         Economic and Social Change in
             Developing Countries


Economic and Social Change in Developing Countries               1
The Tragedy of the Commons                                                   Ingrid Solberg



Contents


Introduction                                                                          2
The basic theory and examples                                                         3
The tragedy of the commons explained through the prisoner’s dilemma                   5
The Commons and developing questions                                                  7
A wider perspective                                                                   8
Critics against the theory                                                            9
Conclusion                                                                            10
References                                                                            11




Introduction

In 1968 Garrett Hardin published the widely known article about “the tragedy of the
commons”. The theory stipulates that resources held in common - such as oceans,
rivers, forests and grazing lands, will inevitably be overexploited. It has been one of
the most popular and controversial explanations for problems like overfishing,
deforestation, overgrazing and soil erosion. This explanation has been very
influential, being widely accepted by governments and development agencies in
developing countries. These same agencies and governments blamed local
populations for environmental degradation, and also legitimized state-led
expropriation and control of land resources, for example through national parks.
Since Hardin wrote his article, there have been many anthropologists and political
scientists who have critically argued against his view. They have showed that local
groups worldwide have developed institutions and practices that have enabled people
to use common property resources in a sustainable way.




Economic and Social Change in Developing Countries                                         2
The Tragedy of the Commons                                                    Ingrid Solberg



Ever since I fist heard this theory, I found it very interesting. It sounds so obvious.
After reading a bit more about it, however, I feel more confused then when I started.
There is no absolute answer to whether or when the theory is right or what the best
solutions are. In this paper I will give an introduction of the theory and give some
examples. I have also tried to give a picture of some of arguments against both the
theory and the solutions that have been put forward to fight the tragedy that is to
come. Thousands and thousands of articles have been written on this field, so I am
only scraping the surface.




The basic theory and examples


To illustrate the theory Hardin used an example where he pictures a pasture open for
all. Each farmer chooses freely how many cattle he would like to keep. In such a
situation, Hardin claimed, it would be rational for each farmer to have as many cattle
as possible. This is because the positive utility from having one extra animal is
greater than the negative utility from overgrazing. This can be explained by the fact
that the single farmer receives all the proceeds from the sale of the additional animal,
while the negative effect of the additional overgrazing created by one more animal, is
however shared by all the farmers. Hardin claims that such an arrangement may
work reasonably satisfactorily for centuries because tribal wars, poaching, and disease
keep the numbers of both man and cattle well below the carrying capacity of the land.
However one day, when the long-desired goal of social stability becomes a reality,
this will lead to overgrazing, the tragedy of the commons. This is because the rational
conclusions made by each one of the farmers are when we add them up, not a
sustainable solution.


There are many situations where “the tragedy of the commons” seams to describe
how resources are used. Fishing is another usual example. Even though all fishers
know that the stock of fishes will be harmed if everybody fishes as mush as they can,
these knowledge it self does not stop the fishers from catching as much as they can. If
one fisher decided to “act nice to the commons”, this would only lead to him getting


Economic and Social Change in Developing Countries                                         3
The Tragedy of the Commons                                                    Ingrid Solberg



less income, without the other fishermen really being affected from it. One fisherman
is just one drop in the ocean, and he knows it.


Emissions of greenhouse gasses are another topic of current interest. Carbon dioxide
is a growing threat to the environment. Almost all countries agree to this, but never
the less have there been difficulties coming to agreements about international
regulations. Because each country’s contribution to the total carbon dioxide emission
is relatively small, a country’s government can easily argue that their emissions are
marginal, and that it does not want to be the one who takes the cost of reducing or not
increasing their emissions. When all governments think like this, or many at least, it
is hard to get anything done. And the problem is even more obvious if we focus on
each single man or woman. We know that cars pollute, and that pollution is a scary
and big problem we take seriously and are concerned about, still most of us reckon
that our negative contribution by driving is so little that it would not really matter for
others but ourselves if we stopped.


Other examples are congestion on urban highways and the rise of resistant diseases
due to careless use of antibiotics. And now, the problems of the digital commons are
also discussed.


To sum up the main theory: The conditions to be present for the tragedy of the
commons to occur, is according to Hardin, that a group of people has free access to a
resource, and that this resource is limited. Further more, the usage must be organized
in such a manner that the positive impact of using the resource goes to that single
user, while a possible negative impact is divided between all the users. The final
condition that must hold is that every player, as we usually call it economically
speaking, tries to maximize his or her gains.




Economic and Social Change in Developing Countries                                           4
The Tragedy of the Commons                                                    Ingrid Solberg



The tragedy of the commons explained through the prisoner’s
dilemma

The prisoner’s dilemma is probably the best known game theory. Dawes argues
through his writings in 1973 and 1975 that the prisoner’s dilemma, described already
in 1944 by Neumann and Morgenstern, and the tragedy of the commons, have many
similarities.


The classical prisoner’s dilemma goes as follows: Two prisoners have been accused
of collaborating in a crime. They are in separated jail cells and can not communicate.
Each has been asked to confess. If both confess they will each receive a prison term
of five years. If none of them confess, they will receive a term of two years each.
However if one of them confesses and the other does not, the one who confesses will
receive a term of only one year while the one who does not confess will go to prison
for ten years.


We can get a better overview of the situation by looking at it in a matrix:




                                                 Prisoner A


                                       Confess         Don’t confess


Prisoner B         Confess                  - 5, - 5          - 1, -10
                   Don't confess            - 10, -1          - 2, - 2




As the table shows, the prisoners face a dilemma. For the two of them added up, the
best solution for them would without a doubt be not to confess. However, if just
thinking about one self, and without knowing what the other one will do, the best
solution would be to confess. So if they just think about their own utility and do not




Economic and Social Change in Developing Countries                                        5
The Tragedy of the Commons                                                   Ingrid Solberg



communicate, they will end up with a solution that is not the best for either of them,
both of them will confess.


So, how can we transform this in to for example a common grazing meadow? Let us
imagine a meadow, with an upper limit to the number of animals that can graze there
for a season. We can call this maximum number X. If we keep to the simple game
model, this is also a two-person game. The “cooperate” strategy can be thought of as
grazing X/2 animals each for the two farmers. The “defect” strategy is for each
farmer to graze as many animals as he can sell at a profit, assuming that this number
is greater than X/2. If both farmers limit their grazing to X/2, they will obtain 10 units
of profit each. If they both choose to defect none of them will obtain any profit. If one
of them defects while the other cooperate, the defector will obtain 11 and the one the
other one – 1.


We look at it in our matrix:


                                                     Farmer A


                                       Defect             Cooperate


Farmer B           Defect                     0, 0              11, - 1
                   Cooperate                - 1, 11             10, 10




According to the game theory we will end up with a solution where both of the
farmers defect and therefor earn zero. This is why it is so closely linked to the tragedy
of the commons.


However, one could argue that while the prisoner’s dilemma is conceptualised as a
noncooperative game, the commons usually have the possibility to communicate with
each other. Why could they not just agree on the best solution? Here we have to
remember that there are usually a lot more than two players, and whether this
objection is right or not depends on to what extend the players trust the others to do



Economic and Social Change in Developing Countries                                       6
The Tragedy of the Commons                                                    Ingrid Solberg



what they actually have agreed up on. To see how many cattle your neighbour farmer
has on your common grazing land is a lot easier than to know how much your
neighbour country is fishing or polluting. If there are agreements without trust, the
prisoner’s dilemma is still relevant.




The Commons and developing questions


The theory of the tragedy of the commons has been important for the developing
debate and the developing policies for quite some time now. If it is so, that resources
that are administrated by the commons necessarily will be damaged somehow, there
have been two usual answers: Either one must go away from the arrangement where
the resources belong to the commons and privatise them instead. Or one must make
rules and regulations that are binding for the ones using the resources. If it is actually
possible to privatise the resource, the first option has usually been used. If this
however is hard, the second option is chosen.


In many developing countries, the organisers of many of the projects that have been
set forward have been concerned about the tragedy of the commons. Because of this
they have made grazing land that used to be common into private areas, often for
smaller groups, trough so-called ranches. This is also, especially in Africa, an
expressed goal for the future.


However, despite considerable effort, few projects based on “privatising the
commons” have been successful. According to McCay and Acheson the tragedy of
the commons theory fails to differentiate between common property as a hypothetical
condition in which institutionalised mechanisms for controlling users do not exist and
common property as a social asset managed by recognised rules of social interaction.


Bhattacharya argues that the “tragedy of the commons”- model inadequately reflects
the real problem because it does not “deal with the complexities involved in
relationships”.


Economic and Social Change in Developing Countries                                           7
The Tragedy of the Commons                                                    Ingrid Solberg




The second option was to make rules and regulations. The air and water surrounding
us, for example, can not easily be fenced, and so the tragedy of the commons must be
prevented by different means than privatisation. For example by making quotas or
taxing devices that make it cheaper for the polluter to treat his pollutants than to
discharge them untreated.




A wider perspective


According to population theories, the population is supposed to regulate itself. Even
though we have moved a bit away for Malthus’ theory, where he believes in limited
growth possibilities for agriculture, and therefore that a larger population gives lower
standards of living, we have to assume that the world available for the terrestrial
human population is finite. A finite world can support only a finite population,
therefore population growth must eventually equal zero. Hardin argues in his famous
article that a maximum possible population is no optimum, because than everyone has
to live at a minimum.


In areas where many children are needed to ensure the family’s income and the old
days of the parents, one could perhaps see the tragedy of the commons in a population
perspective. The way the society in many developing countries is arranged, it is better
for each single family to have many children than few. For the countries seen as hole,
however, a high population growth rate is in the long run doing the opposite than
increasing the standards of living for the population.


In connection to this, Hardin makes an interesting remark: We can make little
progress in working toward optimum population size until we explicitly exorcise the
spirit of Adam Smith in the field of practical demography.


When giving Adam Smiths “invisible hand” a second thought, we can notice that the
tragedy of the commons goes directly against Smiths argument. Smith claimed that an


Economic and Social Change in Developing Countries                                         8
The Tragedy of the Commons                                                    Ingrid Solberg



individual who “intends only his own gain”, is, as it says, “led by an invisible hand to
promote…. the public interest.” We know from the theory of the tragedy of the
commons that it is exactly this that is the problem. When people, families, countries
and so on have common limited resources they can not only look after their own
gains, there is a need for co-ordination.




Critics against the theory

One of the most important critic points to be made about the theory is that it assumes
that people act out of own interest without a social context. In local societies around
the world there are, however, unspoken rules, norms and taboos that are somehow
regulating the way the people act. Therefor we can seldom say that the model will fit
in a local context. On the other hand, when the gap between ones actions and their
consequences, is big enough, for example between one mans car driving and ozone
layer, the tragedy of the commons might appear.


We also assume that man is only economic utility maximising. That is that we in each
situation will act in a manner that is best for ourselves economically. However,
people are social beings, and would also feel a joy from doing what is best for their
surroundings.


Another critical point to be made is that in a developing context has been used to put
the blame for environmental problems on poor farmers and cattle breeders. Since the
model claims that a joint administration of the resources does not work, has its
political recommendation been to either privatise or to let the government take charge
of the administration. This has in fact led to many poor people getting even poorer.
One well known example of this is how shepherds in the east and south of Africa
where abandon from their pastures when protected areas where established. The
theory has actually justified the restrictions that have been put on the local societies,
with the argument that the local administration damages the environment.




Economic and Social Change in Developing Countries                                          9
The Tragedy of the Commons                                                      Ingrid Solberg




Conclusion


One of the reasons why the theory of the tragedy of the commons has become so
popular is that it is straightforward and easy to understand. However, even though the
model is quite simple to get, the real world is not always like the model. We must
also look at the surrounding premises. People do not always act as they are expected
in an economic model.


It is also the question about what is fair. Let us look at a global perspective. Is it for
example fair that after centuries where the now industrialised countries have polluted
and destroyed nature to get where they are to day, the developing countries must
contribute to decrease pollution to prevent the tragedy of the commons? Who has the
right to pollute?


And in a more local setting, there must be a balance between the nature’s and
peoples’ sustainability. When privatisation has shown not to work out satisfactory on
several occasions, this is partly because of the difficulties in dividing the land or the
rights. Poor people have often little negotiation power, and might therefor be better
off if the rights stay with the commons, but with some sort of local regulations. In
theory privatisation might be the best solution, but the difficulties with dividing has
let to bad or no solutions.


As stated above, the theory of the tragedy of the commons is now used for many of
the important problems of our time. Because of the world’s growing population,
which leads to increasingly more densely populated areas, there is no reason to think
that the problems explained by the tragedy of the commons will get fewer or less
dramatic. The main problems are then where we find the limits for sustainability and
how to divide and regulate the resources that can be used.




Economic and Social Change in Developing Countries                                           10
The Tragedy of the Commons                                              Ingrid Solberg




References


   Hardin, Garrett and Baden, John. 1977. Managing the Commons
   Ostrom, Elinor. 1990. Governing the Commons
   Benjaminsen, Tor A. and Svarstad, Hanne. 1998. Samfunnsperspektiver på miljø
    og utvikling
   Vosti, Stephen A. and Reardon, Thomas. 1997. Sustainability, Growth, and
    Poverty Alleviation
   McFadden, Daniel. 2001. Internet article: A Nobel laureate’s warning on the
    Net’s shared resources




Economic and Social Change in Developing Countries                                 11

				
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