Common pool resource management – Strategy to avoid tragedy

Managing a residential estate is a little like juggling with eggs. It can be tricky to balance each resident’s rights to fully enjoy all the communal facilities and services with the need to protect, preserve and maintain all the elements that go to making the estate the special place it is. Fortunately, Elinor Ostrom, Nobel Prize winner for Economics, has developed a framework for managing common property that can be used by societies, communities, countries and – of course – residential estates.

The commons – tragedy, comedy or drama

The tragedy of the commons is a long-standing, pessimistic theory that states that humans are such selfish, useless idiots that, if left to our own devices, we would destroy the resources on which we depend. While the evidence of climate change – and the lacklustre response to it – may support this view, it is also undeniable that humans have repeatedly formed societies that successfully manage common property to the benefit of all their members. And it is from these societies that Elinor Ostrom took inspiration for her seminal work Governing the Commons.

Governing the commons

Olstrom examines the most commonly accepted models for describing and predicting collective behaviour – the tragedy of the commons, the prisoner’s dilemma, and the logic of collective action – but with some important new insights.

The main thrust of all these models is that everyone acts to maximise their own advantage, so they will act for the good of the group only if it works in their own favour. And, more importantly, they will ‘take a free ride’ and not contribute if they believe they can get away with it and still reap the collective benefits.

‘What makes these models so dangerous when they are used metaphorically as the foundation for policy,’ she stated, ‘is that the constraints that are assumed to be fixed for the purpose of analysis are taken on faith as being fixed in empirical settings, unless external authorities change them.’

And this is where Olstrom took a fresh look at the issue, and it’s what earned her her Nobel Prize. Rather than impose on the real world the assumptions inherent in the models, she looked at successful communities worldwide – from small to large – and compared them to the models. What she found was that – unlike in the models, in which the ‘subjects’ had no power to change the parameters of the simulation – real-world people have agency.

So, she argued, real people and real communities have throughout history developed strategies and systems for managing natural and other communal resources – generally with success, although there are obviously some failures.

So, rather than trying to impose theory on reality, Olstrom tried to find a theory that explained how the real world works – when it works well. This is what Lee Anne Fennel – in an essay that ‘traces some of the ways that Ostrom’s focus on situated examples has advanced the interdisciplinary dialogue about property, both as a legal institution, and as a human invention for solving practical problems’ – termed Olstrom’s Law.

Olstrom’s law states: ‘A resource arrangement that works in practice can work in theory.’ In other words, while remaining cognisant of the problems associated with managing common property, look at – and emulate – existing successes, and build your theory and strategies on these.

Managing common pool resources – Olstrom’s principles

The real value of Olstrom’s work was not academic or theoretical – it was practical, culminating in what she called ‘design principles for managing common pool resources’. Many of them will be familiar to successful estate managers because they are – largely – common sense. But, to quote an old adage, ‘the problem with common sense is that it’s not very common.’

Olstrom’s eight principles (somewhat paraphrased) are:

• Define clear group boundaries – this is usually not a problem in residential estates, but you may, for example, want to distinguish between absentee owners, tenants and owner-residents.
• Match rules governing use of common goods to local needs and conditions.
• Ensure that those affected by the rules can participate in modifying the rules.
• Make sure that outside authorities recognise the rule-making rights of community members. This is a particularly pertinent one for estates.
• Develop a system for monitoring members’ behaviour – and then enable the members themselves to participate in the monitoring. This is a tricky one, as no-one wants to be a ‘snitch’, but it is the members themselves who are affected by compliance or non-compliance.
• Use appropriate sanctions for rule violators – both for the gravity of the offence, and for the frequency of non-compliance. Again, this is common sense. You would not treat a first-time parking offender the same way as you would someone who repeatedly speeds through the estate endangering children, pets and wildlife.
• Provide accessible, low-cost means for dispute resolution. This is critical as, if residents know they can easily, quickly and effectively resolve issues, they are more likely to report non-compliance. The flip side of this is to make the process as fair and unstressful as possible for offenders, so that they accept sanctions, and dispute resolution does not turn into a long-standing tit-for-tat.
• Build responsibility for governing the common resource in nested tiers, from the lowest level up to the entire interconnected system. This may or may not work in estates, depending on how you define the ‘nests’.

A question of balance

Olstrom’s take-home message is that one needs to balance rights and responsibilities. If you impose inflexible rules without the involvement of the community, it is quite likely that some, and possibly most, members will either ignore them, or manipulate them to their own advantage. So the bottom line is – and you probably know this already – communicate with your community, and take cognisance of their needs.

It’s not rocket science, people. But that is why Ostrom’s Nobel Prize was not for physics.