Common Pool Resource Governance Best Practices

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Kurt Laitner:

"Poteete, Janssen and Ostrom (2010) list the following design principles for governance of a commons:

“ 1. Well Defined Boundaries: The boundaries of a resource system, as well as the set of individuals or households with rights to the resource, should be clearly defined. The clarity of the social boundary influences incentives for cooperation. Clarity of the boundaries of a resource system limits problems related to externalities. Rule enforcement becomes easier when both types of boundaries are well defined.

2. Proportional Equivalence between Benefits and Costs: Rules-in-use should allocate benefits associated with a common-pool resource in proportion to contributions of required inputs. Rules that respect proportionality are more widely accepted as equitable. Perceived inequity may lead some participants to refuse to abide by rules they consider to be unfair.

3. Collective-Choice Arrangements: Most individuals affected by a natural resource regime should be authorized to participate in making and modifying its rules. This principle increases the likelihood that rules fit local circumstances, change over time to reflect local environmental and social dynamics, and are considered fair by participants. Common-property institutions that empower local elites - rather than most local resource users - are likely to generate policies that benefit the elites disproportionately; these arrangements are not consistent with the second design principle.

4. Monitoring: The individuals charged with monitoring rule adherence and resource conditions should be accountable to users. Reliable monitoring raises confidence among users that they can operate without the fear that others are taking advantage of them. Robust, self-organized resource regimes tend to select their own monitors.

5. Graduated Sanctions: Sanctions for violated rules should be graduated. Graduated sanctions signal that infractions are noticed while allowing for misunderstandings, mistakes, and exceptional circumstances that lead to breaking. The encourage individuals who have broken a rule to resume compliance in order to enjoy ongoing trust.

6. Conflict-Resolution Mechanisms: There should be rapid, low-cost, local arenas to resolve conflicts among users or between users and officials. Some conflicts arise because participants interpret in different ways a rule that they have jointly made. Simple, local mechanisms that get conflicts aired immediately and produce resolutions that are generally known in the community can limit the number of conflicts that reduce trust

7. Minimal Recognition of Rights: The rights of local users to make their own rules should be recognized by the national or local government. Resource regimes that lack official recognition have operated over long periods but have had to rely almost entirely on unanimity as the rule used to change rules. Otherwise, disgruntled participants who oppose a rule change can go to the external authorities to threaten the regime itself. Changing rules using unanimity imposes high transaction costs and prevents a group from searching for better-matched rules a relatively lower costs.

8. Nested Enterprises: When common-pool resources are part of a larger system, governance activities should be organized in multiple nested layers. Small-scale units can match rules to local conditions, but larger-scale institutions are also needed to govern interdependencies among smaller units. The rules allocating water among major branches of an irrigation system, for example, may differ from the rules used to allocate water among farmers along a single distribution channel.” ([1])