Rationality, political economy, and fiscal responsibility: wrestling with tragedy on the fiscal commons

The continuing budget deficits and accumulating public debt that commonly plagues western democracies reflects a clash between two rationalities regarding human governance: one of private property and its conventions and one of common property and its procedural framework. Democratic budgeting creates a form of fiscal commons whose governance is subject to the tragic outcomes depicted by Garret Hardin (in Science 162:1243?C1248, 1968). To be sure, tragedy can be avoided as Elinor Ostrom (1990) explains, but only to the extent that the fiscal commons is governed in a manner consonant with Antonio De Viti de Marco??s (1936) model of the cooperative state. While the tragedy of the commons that results from this tectonic clash is an inherent feature of democratic political economy, that tragedy can nonetheless be limited through reasserting the conventions and institutions of a constitution of liberty.     

Assessing fishers' empowerment in inland openwater fisheries in Bangladesh

The Community Based Fisheries Management (CBFM) approach has made a significant contribution towards improvement of fishers' empowerment of inland openwater fisheries in Bangladesh aiming to manage their resources efficiently. This arrangement introduced CBFM approaches named fisher-led, community-led and women-led approach. A wider range of local institutional arrangements as community based organizations (CBOs) have been established through participatory process with legal entity. Now, the CBOs as local institutions and fishers are more empowered in participation of fishery management under co-management arrangement. The study reveals that there is still lack of institutional arrangement to be achieved at optimum level. This paper presents and assesses the empowerment status of the fisher communities in inland openwater fisheries under co-management arrangement in Bangladesh through Factor analysis and regression model. This study might have policy implication to replicate the community based fishery management approach to promote empowerment for better management.     

Governing the commons: future directions for the Ostrom Project

Now, when longitudinal data are available or soon will be, it is important to carefully consider research strategies for the second phase of the Ostrom Project. I recommend a problem oriented approach aimed at answering questions and solving puzzles that have emerged in the last 25–30 years and a focus on the political dimensions of the commons. Reading Lin’s paper in this issue, I found her proposal valuable but too narrow. I suggest that the longitudinal phase of the Project should deal explicitly with institutions and mechanisms for solving conflicts among local participants over how to divide the costs and benefits of using common resources. I offer, as an illustration, a number of research questions that emphasize institutions in the policy and constitutional spheres rather than in the operational one.     

The Political Economy of the Global Environment

Issues of the ‘global commons’ have secured a prominent place in environmental discourse. The temperature-regulating functions of the global atmosphere and radiation control functions of stratospheric ozone offer clear examples of true public goods. Other environmental assets, such as biodiversity and forests, are treated as if they are public goods, but in reality are complex mixtures of private goods, local public goods and global public goods. The approach to the provision and protection of these goods has tended to focus on the development of international agreements, such as those at the Rio de Janeiro ‘Earth Summit’ in 1992. But do these agreements contain the relevant incentives to conserve the global commons? Much depends on one's view of human nature. The Scottish economic tradition suggests that unless incentives focus on ‘self love’, as postulated by Hume and Smith, improvements will, at best, be marginal. A richer array of policy measures is obtained by analysing the potential for ‘global bargains’, trades that improve the environment whilst making each party better off. The souls of Hume and Smith surely approve recent developments in practical global bargains.     

International flows of people and institutional change

International travel clearly increases human interaction over space and exposes societies to foreign influences, foreign ideas, and foreign institutions. Does international travel promote institutional change in a traveler's home country? This paper uses panel data from 149 countries to test the hypothesis of institutional change stemming from international travel. We generally find that foreign travel does not affect political institutions. In one sub-sample, we find limited evidence that international travel can be a determinant of institutional quality in the home country depending upon whether the home country is an autocracy or democracy.     

World Trade and the Environment: Issues and Policies

This paper provides an overview of trade, environmental and related public issues and policies. It discusses the pollution problem, the recent global warming trend, the attempts of various institutions, including the United Nations, the World Trade Organization, regional, national and other organizations, to solve the global trade and environmental issues. The paper also discusses a number of basic theoretical issues and empirical findings, such as the free‐rider problem, the tragedy of the commons, the theory of second best, the relative efficacy of price and quantity control, carbon leakage, border carbon adjustments, the cap‐and‐trade system, the pollution haven hypothesis, the optimal social discount rate and the environmental Kuznets curve. Some computable general equilibrium models are reviewed and several notable World Trade Organization environmental and health‐related trade dispute cases are analysed, including the tuna–dolphin, shrimp–turtle, eco‐labelling, beef‐hormone and genetically modified organism cases.     

The intrinsic fallacy of market mechanism and private property rights in alleviating the tragedy of the commons

ABSTRACT

Economists’ solution to the tragedy of the commons relies on well-defined property rights and competitive market mechanism for limiting individuals’ self-serving, short-sighted actions that result in a dramatic depletion of the common resources. However, this solution implicates a serious threat in terms of sustainability. Recently, deterioration of genetic diversity reached alarming levels, mainly attributed to escalating economic pressure that obliges farmers to shift from local breeds towards more profitable and more productive industrial breeds. This study empirically examines the efficiency of the free market mechanism as a solution to the tragedy of the commons through a unique natural experiment in which a huge demand shock arises regarding sheep. Results robustly show that the free market mechanism can cope with even a very challenging demand shock through the adjustment of prices without any shortage of the commodity. However, this finding does not guarantee that such an outcome is sustainable over the very long term. Analysis of the growth rate of the local sheep breeds population and cross-breed sheep population shows that the trend is overwhelmingly in favour of cross-breeds, thus supporting concerns for a free market mechanism, intrinsically driving the extinction of local sheep breeds, an invaluable genetic resource.     

Networks of common property resources

A tragedy of commons appears when the users of a common resource have incentives to exploit it more than the socially efficient level. We analyze the situation when the tragedy of commons is embedded in a network of users and sources. Users play a game of extractions, where they decide how much resource to draw from each source they are connected to. We show that the network structure matters. The exploitation at each source depends on the centrality of the links connecting the source to the users. The equilibrium is unique and we provide a formula which expresses the quantities at an equilibrium as a function of a network centrality measure. Next we characterize the efficient levels of extractions by users and outflows from sources. We provide a graph decomposition which divides the network into regions according to the availability of sources. Then the efficiency problem can be solved region by region.     

北极渔业治理的研究综述

气候变暖下的北极渔业逐渐引起国际关注,而技术进步使人类进入北极成为可能,发展北极渔业成为缓解全球海洋渔业资源危机的可行方式。北极拥有丰富的渔业资源,但北极的生态环境极为脆弱,如何有序发展北极渔业、实现北极渔业的有效治理是当前国际社会议论的热点。运用文献综述法,对北极渔业资源相关研究进行归纳,从现有法律制度、管理组织、影响北极渔业治理的主要因素方面总结出北极的渔业治理与一般海洋渔业治理的不同之处,并对未来北极可行的渔业治理模式进行展望。     

Social and solidarity economy and social and solidarity commons: Towards the (re)discovery of an ethic of the common good?

This research poses the ethic of the common good and the institutions of the social and solidarity economy (SSE) as the foundation of commoning practices. Specifically, it illustrates how the latter may contribute to regenerating the commons, fostering open and shared access to key productive resources and essential goods and services. The analysis focuses on social and solidarity commons (SSC), defined as all those relational practices that contribute to the accumulation and regeneration of human and social (as well as other types of) critical capital. To achieve this research goal, this study collected new and old issues debated in the academic literature concerning the geographic nature of commons and their juridical and economic treatment within socioeconomic disciplines. Then, a historical overview of the commons highlights their dynamic and multifaceted nature and illustrates how they have often been co‐owned and co‐governed according to shared rules and norms. Within this general framework, SSC are introduced, and a role for the institutions of the SSE is proposed to foster an ethic of the common good as a necessary (but not sufficient) condition for expanding and enforcing people's participation in commoning practices.     

The Hong Kong Fish Marketing Organization

This essay provides an explanation of the phenomenon of an apparent secular fall in captured fisheries outputs in Hong Kong transacted through the Fish Marketing Organisation. The latter is a government monopoly, with the power to compel sale of landed fish through its licensed buyers, established and protected by law. The institutional characteristic of this organisation can also explain the evolution of marine fish culture industry in the area that is not subject to the forced‐sale regulation of the Organisation, and the diversity of species commonly observed in the consumer market of cultured fish. The observed reduction in fisheries output in Hong Kong can be the consequence of regulation rather than a lack of regulation, as the ‘the tragedy of commons’ would seem to imply. Our analysis also demonstrates why the Fish Marketing Organisation has suffered from a growing budgetary deficit in recent years.     

Inequality and outside options in common-property resource use

Using a dynamic intergenerational game, this paper analyzes the effects of inequality among resource users and their access to outside markets and credit on cooperative use of a local commons. The study finds that, depending on the agents' harvest sharing rule, the conditions under which homogeneous agents can cooperate in equilibrium may not be sufficient for cooperation when agents differ in harvesting productivity. The resource users' access to outside markets or credit may have a negative effect on efficient local resource management.     

Economic impact of ocean fish populations in the global fishery

Our goal in this paper is to estimate the total output in an economy that is currently dependent (at least partially) on current fisheries output. We therefore applied the Leontief technological coefficients at current production and then estimate total output supported throughout the economy at the current level of production. Estimates of gross revenue from capture fisheries suggest that the direct value of output for this sector is US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US 225 and 240 billion per year.     

The Use and Abuse of Environmental Knowledge: A Bloomington School Interpretation of the Canadian Fisheries Act of 1868

This paper will focus on the ambitious plan for regulation embodied in the Dominion Fisheries Act of 1868, a law passed by the Canadian federal parliament in its very first year of existence. The 1868 law was intended to bring the nation's fisheries firmly under the control of officials employed by the new federal government. The paper argues that 1868 law, which was designed to address what would today be called Tragedy of the Commons problems, was a product of the hubris identified by Hayek as "the fatal conceit." The centralized and bureaucratic approach to governing fisheries represented by the 1868 Fisheries Act did not work well because the knowledge that would have been required for successful management of fisheries was highly dispersed. Drawing on Hayek and the Bloomington School, this paper argues that the experience of Canada's fisheries sector in the generation after 1868 illustrates the problems with centralized management Common-Pool Resources. In the 1890s, the centralized approach represented by the Fisheries Act of 1868 was replaced by a more flexible and decentralized system Hayek's theory of knowledge would suggest the reversal of centralization over environmental policy in the 1890s was a positive development that helped Canadians to reconcile the goals of economic development and the protection of the environment. The Hayekian paradigm suggests that control over environmental policy should be devolved downwards to the levels of government closest to resource users.     

Competition Among National Football Leagues. Does It Exist? Should We Regulate?

It is often supposed that the stakeholders of a national football league draw more satisfaction from their sport if the league is balanced, that is, if a large number of clubs have a reasonable chance of winning. This is the so‐called Competitive balance hypothesis. This hypothesis can be challenged, however, in the context of international competition like the European champions league. It could be that the utility of national leagues' stakeholders would be higher if the probability of victory for their nation's club at the international level were higher. If this were the case, a league's governing body intending to maximize the quality of the national league by making use of redistributive schemes would face a trade‐off between national competitive balance and international performance of the national representative club. We propose a simple microeconomic framework to model this trade‐off. If a non‐cooperative game exists among the national league governing bodies, whether it is a Nash or a Stackelberg one, this game would result in inefficient redistributive policies. We find ‘soft’ empirical evidence of such a competition among the big 5 football leagues in Europe. This result supports the idea of the creation of an international regulatory body. We derive the conditions under which the international regulatory body should ensure that the leagues' governing bodies implement redistributive schemes guaranteeing the respect of the national competitive balance. We also emphasize the risk of experiencing a drop in the quality of leagues if one of them becomes too big relatively to the others, what we call the tragedy of the wealthy.     

Decentralization,social capital,and regional growth: The case of the Italian North-South divide

This paper aims to show how a region's constant level of social capital may have a very different impact on its economic growth depending on whether the central or the local level of government is responsible for regional policy.Our case study is the economic performance of Northern and Southern Italy in the post-World War II period, when a long phase of regional convergence came to a sudden halt in the early 1970s. We focus on the economic effects of the 1970s institutional reforms on government decentralization and wage bargaining. Our main hypothesis is that decentralization allocates the provision of public capital to institutions, the local ones, more exposed to a territory's social capital. Since social capital is lower in the Southern regions, decentralization made their developmental policies less effective from 1970 onwards, and regional inequality increased.We build an endogenous growth model augmented to include the interaction between social capital and public investment as well as the reform of the Italian labour market. We calibrate our model using data of the Italian regions for 1951–71. Our quantitative results indicate that decentralization triggered the influence of local social capital on growth and played a central role in halting the convergence path of the low-social-capital regions.     

Collective contests for commons and club goods

This paper focuses on collective contests for commons and club goods. Our main objective is to examine in this context the effect of group size on its performance. The main results specify conditions for the existence (non-existence) of the group-size paradox, namely, the situation where a larger group is less (more) effective in pursuing its interest because of (despite) the combined effect of the incentives that result in the free-riding problem and the tragedy of the commons. The paper also explains under what circumstances there exists a bias towards excessive or inadequate winning group size. Finally, it examines the effect of restricted excludability of the commons good within the winning group on the relationship between group-size and its winning probability.     

Reading Elinor Ostrom through a Gender Perspective

This paper concentrates on the scientific work of Elinor Ostrom (1933–2012), who for more than forty years carried out theoretical and empirical research on common-pool resources. Ostrom theorizes that the commons often prevent resource exhaustion more effectively than the state, international institutions, or private owners. However, one of the foundations of commons, as an alternative program to the private/state dualism, ought to be the principle of equality that includes a gender perspective in theory and practice. The goal of this article is to provide thoughtful ways of incorporating gender in economic research from the viewpoint of feminist epistemology and to indicate the place of gender in Ostrom’s work. The methodology of this study could be used for reading economic publications through a gender perspective as well as for inspiring economists to use both gender as a category of analysis and gender-sensitive language in their theoretical and empirical studies.     

National borders,the global economy and geopolitics: A view from Yemen

The wider geographic scales of the new interdependencies called ‘globalisation’ are not new to peripheral states such as Yemen. In the colonial and post‐colonial world sensitivity to international developments has always been important in the course of local events. What is new is the particular configuration of political and economic institutions at various levels including, critically, the national level. This paper argues that, on the one hand, the new geography of economic and political ‘globalisation’ has left Yemen with distinctly ‘old’ forms of economic integration into world markets, but that, on the other hand, regional geopolitics have opened certain opportunities for Yemen's political elite to refashion itself as a strategic geopolitical player so as to maintain international flows of military and economic aid. The end result is the continued national dominance of these same elite. ‘Globalisation’ in this sense is a national political project.     

Environmental Management: A Non-Traditional Approach

India's wastelands have been classified as both over utilized and underutilized. Perplexingly, an apparent tragedy of the commons exists alongside extensive official management powers. In this paper, I argue that the complexity of governance structures may be inadvertently worsening the situation. Looking to recent work on contested property and the anticommons concept, I suggest that an anticommons amongst those officially controlling the lands is casting a long and unexpected shadow by encouraging the emergence of open-access de facto resource exploitation and discouraging de facto management. This extension of the anticommons concept implies that the effects of anticommons are not necessarily limited to under exploitation, as most commonly used in the developing anticommons literature. It points to a wider examination of the harmful effects of anticommons situations.