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<!-- you can have any number of categories here --> [[Category:Elinor Ostrom]] [[Category:Property]] [[Category:Alternatives To Current Capitalism]] <!-- 1 URL must be followed by >= 0 Other URL and Old URL and 1 End URL.--> {{URL | url = https://web.archive.org/web/20060620033044/http://www.rlc.fao.org/eventos/1998/abril/tierra/regimes.pdf}} <!-- {{Other URL | url = }} --> <!-- {{Old URL | url = }} --> {{End URL}} {{DES | des = "This paper will focus primarily on an analysis of common property since so many serious confusions exist in regard to this form of property and its effects on efficiency, sustainability and access." | show=}} <!-- insert wiki page text here --> <!-- DPL has problems with categories that have a single quote in them. Use these explicit workarounds. --> <!-- otherwise, we would use {{Links}} and {{Quotes}} --> {{List|title=Efficiency, Sustainability, and Access Under Alternative Property-Rights Regimes|links=true}} {{Quotations|title=Efficiency, Sustainability, and Access Under Alternative Property-Rights Regimes|quotes=true}} {{Text | W97-8 4/7/98 EFFICIENCY, SUSTAINABILITY, AND ACCESS UNDER ALTERNATIVE PROPERTY-RIGHTS REGIMES by Elinor Ostrom Workshop in Political Theory and Policy Analysis Center for the Study of Institutions, Population, and Environmental Change Indiana University 513 North Park Bloomington, IN 47408-3895 USA Phone: 812-855-0441 / Fax: 812-855-3150 / Email: ostrom@indiana.edu © 1998 by author Paper to be presented at the UNU/WIDER project on “Land Reform Revisited: Access to Land, Rural Poverty, and Public Action,” to be held in Santiago, Chile, April 27-29, 1998. An earlier version was presented at a meeting of this group held in Helsinki, Finland, May 30-June 1, 1997. Support from the National Science Foundation (Grant Number SBR-95 21918), the Forests, Trees and People Programme at FAO, and the Ford Foundation is gratefully acknowledged. I am deeply appreciative of the useful comments made on the earlier version by Alain de Janvry, the working paper on “Property Rights and the Sustainability of Forests in Uganda,” prepared by Abwoli Banana, William Gombya- Ssembajjwe, and Joseph Bahati, and the excellent editorial assistance provided by Patty Dalecki. EFFICIENCY, SUSTAINABILITY, AND ACCESS UNDER ALTERNATIVE PROPERTY-RIGHTS REGIMES by Elinor Ostrom 1. Introduction The last half century has witnessed many efforts to reform the economic and political performance of developing countries. Tragically, many of these reforms have not achieved their intended outcomes and may even have generated counterproductive results. To accomplish successful reforms, one must understand how changes in the organization of basic institutional arrangements affect the incentives of participants in a wide diversity of economic activities. If reforms are based on inadequate theories and misunderstandings, they are unlikely to be successful. Many reform efforts during the 1950s and 1960s stressed the importance of creating a strong, central government that would guide the polity and economy toward higher levels of growth and eliminate the deep ethnic fissures characteristics of many developing countries. These reforms were based on theories that national governments had superior powers to direct change and would use these powers to increase the productivity and efficiency of economies. Many enterprises and most natural resources were “nationalized” or “collectivized” so as to prevent the presumed perversities of leaving decisions about them to private individuals. The failure of these reform efforts have been well documented (for general reviews, see Wunsch and Olowu, 1995; V. Ostrom, Feeny, and Picht, 1993; Baland and Platteau, 1996). Many recent reform efforts have had a contrary thrust. Considerable effort has been undertaken to privatize government-owned assets as well as increasing the security of private property. These reforms have been based on theories that presumed that private property is the superior form of property rights for all types of economic activity (Hachette and Lüders, 1993; Glade, 1991). Both government ownership and common property are presumed to be inferior forms of property with the consequent need to reduce the incidence of both as much as possible. Simply relying on privatization, however, has not generated the immediate positive returns that were expected (Olson, 1996). Further, considerable empirical evidence has shown that common property is not as inefficient as previously thought (Bromley et al., 1992; E. Ostrom, 1990; E. Ostrom, Gardner, and Walker, 1994). Individuals who have considerable experience with private property are known to create common-property institutions to complement the activities undertaken on private property (Netting, 1981; McKean, 1992; McCarthy, de Janvry, and Sadoulet, 1997). Consequently, it would appear that there are a number of serious confusions about the role of common property and of national governments that need to be clarified before we have the basis for more successful reform efforts in the future. This paper will focus primarily on an analysis of common property since so many serious confusions exist in regard to this form of property and its effects on efficiency, sustainability and access. The role of national governments in constituting effective self-governing and productive systems will be addressed to only a limited extent (for an extensive analysis, see V. Ostrom, 1997). In Section 2, I will examine some serious confusions about common property that have generated past misunderstandings and inadequate reform efforts. Section 3 will present a more general concept 1 of the bundles of property rights that are involved in any complex property-rights system. Section 4 will focus on the attributes of common-pool resources that are conducive to the use of common- property institutions and Section 5 will examine the privatization of common-pool resources. The sixth section examines diverse property-rights systems and the problem of access and sustainability of common-pool resources. Section 7 is a summary and conclusion to the paper. 2. Confusions that Generate Misunderstanding1 Common-property regimes are presumed to be inefficient for three reasons. One is rent dissipation because no one owns the products of a resource until they are captured, and everyone engages in an unproductive race to capture these products before others do (Gordon, 1954; Scott, 1955; Schaefer, 1957; Clark, 1976, 1980; Dasgupta and Heal, 1979). The source of this inefficiency is over- appropriation when there is no cooperation. The second is low productivity, because no one has an incentive to work hard in order to increase their private returns (North, 1990; Yang, 1987). The source of this inefficiency is underprovision when there is an insufficient level of cooperation. The third is the high transaction and enforcement costs expected if communal owners were to try to devise rules to reduce the externalities of their mutual overuse (Demsetz, 1967). This inefficiency stems from the presumed high cost of reaching cooperation, if it can be achieved, as contrasted to a costless form of reaching optimal provision and appropriation levels. The debate about the relative merits of private and common property has been clouded by a troika of confusions that hinder scholarly communication. Different meanings are assigned to terms without clarifying how multiple aspects relate to one another. The source of confusion relates to the differences between (1) common-property and open-access regimes, (2) common-pool resources and common-property regimes, and (3) a resource system and the flow of resource units. All three sources of confusion reduce clarity in assigning meaning to terms and retard theoretical and empirical progress. The Confusion between Common-Property and Open-Access Regimes In a now classic article, Ciriacy-Wantrup and Bishop (1975) clearly demarked the difference between property regimes that are open access, where no one has the legal right to exclude anyone from using a resource, from common-property, where the members of a clearly demarked group have a legal right to exclude nonmembers of that group from using a resource (see also Bromley, 1991, 1992a., 1992b). Open-access regimes (res nullius)—including the classic cases of the open seas and the atmosphere—have long been considered in legal doctrine as involving no limits on who is authorized to use a resource. If anyone can use a resource, no one has an incentive to conserve their use (appropriation) or to invest in improvements (provision). If such a resource generates highly valued products, then one can expect that the lack of rules regarding authorized use will lead to misuse and overconsumption. Some local grazing areas, inshore fisheries, and forests are effectively open- access resources, but many fewer than presumed in the literature. Some open-access regimes lack effective rules defining property rights by default (Dales, 1968). Either the resources affected by these open-access regimes are not contained within a nation-state or no entity has successfully laid claim to legitimate ownership. Other open-access regimes are the consequence of conscious public policies to guarantee the access of all citizens to the use of a resource within a political jurisdiction. The concept of jus publicum applies to their formal status but effectively these resources are open access. The state governments of Oregon and Washington intervened in the early twentieth century to prevent local salmon fishermen from devising rules that 2 would have limited entry and established harvesting limits (Higgs, 1982, 1996). Fishing unions along the U.S. coastal areas tried to organize inshore fisheries so as to limit entry and establish harvesting limits during the 1950s. If they had succeeded, they would have guaranteed their own long-term access to inshore fisheries and excluded new entrants from access. Even though their efforts could not have had a serious impact on prices due to the presence of an active international market for fish, the fishing unions were prosecuted by the U.S. Department of Justice and found in violation of the Sherman Antitrust Act (Johnson and Libecap, 1982). Thus, U.S. inshore fisheries have effectively been open-access resources during much of the twentieth century as a result of governmental action to prevent local fishing groups from establishing forms of common-property regimes within those political jurisdictions. In more recent times, however, both the national and state governments have reversed their prior stands and have actively sought ways of creating forms of co-management in inshore fisheries (see Pinkerton, 1992, 1994; Wilson, 1995). A third type of open-access regime results from the ineffective exclusion of nonowners by the entity assigned formal rights of ownership. In many developing countries, the earlier confusion between open-access and common-property regimes paradoxically led to an increase in the number and extent of local resources that are effectively open access (Arnold, 1998). Common-property regimes controlling access and harvesting from local streams, forests, grazing areas, and inshore fisheries had evolved over long periods of time in all parts of the world, but were rarely given formal status in the legal codes of newly independent countries. As concern for the protection of natural resources mounted during the 1960s, many developing countries in Africa and Asia nationalized all land and water resources that had not yet been recorded as private property. The institutional arrangements that local users had devised to limit entry and use lost their legal standing, but the national governments lacked monetary resources and personnel to monitor the use of these resources effectively (Arnold, 1998). Thus, resources that had been under a de facto common-property regime enforced by local users were converted to a de jure government- property regime, but reverted to a de facto open-access regime. When resources that were previously controlled by local participants have been nationalized, state control has usually proved to be less effective and efficient than control by those directly affected, if not disastrous in its consequences (Hilton, 1992; Curtis, 1991; Panayotou and Ashton, 1992; Ascher, 1995). The harmful effects of nationalizing forests that had earlier been governed by local user-groups have been well documented for Thailand (Feeny, 1988), Niger (Thomson, 1977; Thomson, Feeny, and Oakerson, 1992), Nepal (Arnold and Campbell, 1986; Messerschmidt, 1986), and India (Gadgil and Iyer, 1989; Jodha, 1990, 1996). Similar results have occurred in regard to inshore fisheries taken over by state or national agencies from local control by the inshore fishermen themselves (Cordell and McKean, 1992; Cruz, 1986; Dasgupta, 1982; Higgs, 1996; Panayotou, 1982; Pinkerton, 1989). Consequently, these reforms generated counterproductive results. The Confusion between a Resource System and a Property Regime The problems resulting from confusing open-access regimes with common-property regimes are particularly difficult to overcome due to a second terminological problem. The term “common- property resource” is frequently used to describe a type of economic good that is better referred to as a “common-pool resource.” All common-pool resources share two attributes of importance for economic activities: (1) it is costly to exclude individuals from using the good either through physical barriers or legal instruments and (2) the benefits consumed by one individual subtract from the benefits available to others (V. Ostrom and E. Ostrom, 1977; E. Ostrom, Gardner, and Walker, 1994). Recognizing a class of goods that share these two attributes enables scholars to identify the core theoretical problems 3 facing all individuals or groups who wish to utilize such resources for an extended period of time. Using “property” in the term used to refer to a type of good, reinforces the impression that goods sharing these attributes tend everywhere to share the same property regime. Common-pool resources share with public goods the difficulty of developing physical or institutional means of excluding beneficiaries. Unless means are devised to keep nonauthorized users from benefitting, these users will receive benefits without any responsibilities to contribute to their provision. Second, the products or resource units from common-pool resources share with private goods the attribute that one person's consumption subtracts from the quantity available to others. Thus, common-pool resources are subject to problems of congestion, overuse, and potential destruction unless harvesting or use limits are devised and enforced. Besides sharing these two attributes, particular common-pool resources differ on many other attributes that affect their economic usefulness including their size; shape; whether resource units are mobile (e.g., water) or stationary (e.g., trees); the presence of storage; the productivity of the resource; and the value, timing, and regularity of the resource units produced. Common-pool resources may be owned by national, regional, or local governments, by communal groups, by private individuals or corporations or used as open access resources by whomever can gain access. Each of the broad types of property regimes has different sets of advantages and disadvantages, but at times may rely upon similar operational rules regarding access and use of a resource (Feeny et al., 1990). Examples exist of both successful and unsuccessful efforts to govern and manage common-pool resources by governments, communal groups, cooperatives, voluntary associations, and private individuals or firms (Bromley et al., 1992; Singh, 1994; Singh and Ballabh, 1996). Thus, as discussed below, there is no automatic association of common-pool resources with common-property regimes—or, with any other particular type of property regime. The Confusion between the Resource and the Flow of Resource Units Common-pool resources are composed of resource systems and a flow of resource units or benefits from these systems (Blomquist and Ostrom, 1985). The resource system (or alternatively, the stock or the facility) is what generates a flow of resource units or benefits over time. Examples of typical common-pool resource systems include lakes, rivers, irrigation systems, groundwater basins, forests, fishery stocks, and grazing areas. Common-pool resources may also be facilities that are constructed for joint use, such as mainframe computers and the Internet. The resource units or benefits from a common-pool resource include water, timber, medicinal plants, fish, fodder, central processing units, and connection time. Devising property regimes that effectively allow sustainable use of a common- pool resource requires rules that limit access to the resource system and other rules that limit the amount, timing, and technology used to withdraw diverse resource units from the resource system. 3. Property as Bundles of Rights A property right is an enforceable authority to undertake particular actions in a specific domain (Commons, 1968). Property rights define actions that individuals can take in relation to other individuals regarding some “thing.” If one individual has a right, someone else has a commensurate duty to observe that right. Squatters do not possess property rights even though they may be users. No one else has a commensurate duty to protect their continued use of a resource unless their adverse use eventually matures into a prescriptive right. If they gain prescriptive rights, they are no longer squatters. Schlager and Ostrom (1992) identify five property rights that are most relevant for the use 4 of common-pool resources, including access, withdrawal, management, exclusion, and alienation. These are defined as: Access: Withdrawal: Management: Exclusion: Alienation: The right to enter a defined physical area and enjoy nonsubtractive benefits (e.g., hike, canoe, sit in the sun). The right to obtain resource units or products of a resource system (e.g., catch fish, divert water). The right to regulate internal use patterns and transform the resource by making improvements. The right to determine who will have an access right, and how that right may be transferred. The right to sell or lease management and exclusion rights (Schlager and Ostrom, 1992). In much of the economics literature, private property is defined as equivalent to alienation. Property-rights systems that do not contain the right of alienation are considered to be ill-defined. Further, they are presumed to lead to inefficiency since property-rights holders cannot trade their interest in an improved resource system for other resources, nor can someone who has a more efficient use of a resource system purchase that system in whole or in part (Demsetz, 1967). Consequently, it is assumed that property-rights systems that include the right to alienation will be transferred to their highest valued use. Larson and Bromley (1990) challenge this commonly held view and show that much more information must be known about the specific values of a large number of parameters before judgements can be made concerning the efficiency of a particular type of property right. Instead of focusing on one right, it is more useful to define five classes of property-rights holders as shown in Table 1. In this view, individuals or collectivities may hold well-defined property rights that include or do not include all five of the rights defined above. This approach separates the question of whether a particular right is well-defined from the question of the effect of having a particular set of rights. [Table 1 about here] “Authorized entrants” include most recreational users of national parks who purchase an operational right to enter and enjoy the natural beauty of the park, but do not have a right to harvest forest products. Those who have both entry and withdrawal use-right units are “authorized users.” The presence or absence of constraints upon the timing, technology used, purpose of use, and quantity of resource units harvested are determined by operational rules devised by those holding the collective- choice rights (or authority) of management and exclusion. The operational rights of entry and use may be finely divided into quite specific “tenure niches” (Bruce, 1995) that vary by season, by use, by technology, and by space. Tenure niches may overlap when one set of users owns the right to harvest fruits from trees, another set of users owns the right to the timber in these trees, and the trees may be located on land owned by still others (Bruce, Fortmann, and Nhira, 1993). Operational rules may allow authorized users to transfer access and withdrawal rights either temporarily through a rental agreement, or permanently when these rights are assigned or sold to others (see Adasiak, 1979, for a description of the rights of authorized users of the Alaskan salmon and herring fisheries). 5 “Claimants” possess the operational rights of access and withdrawal plus a collective-choice right of managing a resource that includes decisions concerning the construction and maintenance of facilities and the authority to devise limits on withdrawal rights. The net fishers of Jambudwip, India, for example, annually regulate the positioning of nets so as to avoid interference, but do not have the right to determine who may fish along the coast (Raychaudhuri, 1980). Farmers on large-scale government irrigation systems frequently devise rotation schemes for allocating water on a branch canal (Benjamin et al., 1994). “Proprietors” hold the same rights as claimants with the addition of the right to determine who may access and harvest from a resource. Most of the property systems that are called “common- property” regimes involve participants who are proprietors and have four of the above rights, but do not possess the right to sell their management and exclusion rights even though they most frequently have the right to bequeath it to members of their family (see Berkes, 1989; Bromley et al., 1992; K. Martin, 1979; McCay and Acheson, 1987). Empirical studies have found that proprietors frequently have sufficient rights to make decisions that promote long-term investment and harvesting from a resource. Place and Hazell (1993) conducted surveys in Ghana, Kenya, and Rwanda to ascertain if indigenous land-rights systems were a constraint on agricultural productivity. They found that having the rights of a proprietor as contrasted to an owner in these settings did not affect investment decisions and productivity. Other studies conducted in Africa (Migot-Adholla et al., 1991; Bruce and Migot-Adholla, 1994) also found little difference in productivity, investment levels, or access to credit. In densely settled regions, however, proprietorship over agricultural land may not be sufficient (Feder et al., 1988; Feder and Feeny, 1991). In a series of studies of inshore fisheries, self-organized irrigation systems, forest user groups, and groundwater institutions, proprietors tended to develop strict boundary rules to exclude noncontributors; established authority rules to allocate withdrawal rights; devised methods for monitoring conformance, and used graduated sanctions against those who do not conform to these rules (Agrawal, 1994; Blomquist, 1992; Schlager, 1994; Tang, 1994; Lam, 1998). “Owners” possess the right of alienation—the right to transfer a good in any way the owner wishes that does not harm the physical attributes or uses of other owners—in addition to the bundle of rights held by a proprietor. An individual, a private corporation, a government, or a communal group may possess full ownership rights to any kind of good including a common-pool resource (Montias, 1976; Dahl and Lindblom, 1963). The rights of owners, however, are never absolute. Even private owners have responsibilities not to generate particular kinds of harms for others (Demsetz, 1967). What should be obvious by now is that the world of property rights is far more complex than simply government, private and common property. Further, how any of these systems operate in practice depends, to a large extent, on the type of relationships that participants have established among themselves (McCay and Jentoft, 1998). These terms better reflect the status and organization of the holder of a particular right than the bundle of property rights held. All of the above rights can be held by single individuals or by collectivities. Some communal fishing systems grant their members all five of the above rights, including the right of alienation (Miller, 1989). Members in these communal fishing systems have full ownership rights. Similarly, farmer-managed irrigation systems in Nepal, the Phillippines, and Spain have established transferable shares to the systems. Access, withdrawal, voting, and maintenance responsibilities are allocated by the amount of shares owned (E. Martin and Yoder, 1983a, 1983b, 1983c; E. Martin, 1986; Siy, 1982; Maass and Anderson, 1986). On the other hand, some proposals to “privatize” inshore fisheries through the devise of an Individual Transferable Quota (ITQ), allocate transferable use rights to authorized fishers but do not allocate rights related to the management of the fisheries, the determination of who is a participant, nor 6 the transfer of management and exclusion rights. The government as a full owner allocates use rights to others. Thus, proposals to establish ITQ systems, which are frequently referred to as forms of “privatization,” do not transfer full ownership to those who receive a quota. The next two sections are devoted to a discussion of the attributes of common-pool resources that are conducive to communal proprietorship or communal ownership as contrasted to individual ownership. Groups of individuals are considered to share communal property rights when they have formed an organization that exercises at least the collective-choice rights of management and exclusion in relationship to some defined resource system and the resource units produced by that system. In other words, communal groups have established some means of governing themselves in relationship to a resource (E. Ostrom, 1990). Where communal groups are full owners, members of the group have the further right to sell their access, use, exclusion, and management rights to others, subject in many systems to the approval of the other members of the group. Some communal proprietorships are formally organized and recognized by legal authorities as having a corporate existence that entails the right to sue and be sued, the right to hold financial assets in a common bank account, and to make decisions that are binding on members. Other communal proprietorships are less formally organized and may exercise de facto property rights that may or may not be supported by legal authorities if challenged by nonmembers. Obviously, such groups hold less well-defined bundles of property rights than those who are secure in their de jure rights even though the latter may not hold the complete set of property rights defined as full ownership. In other words, well-defined and secure property rights do not need to involve the right to alienation. 4. Attributes of Common-Pool Resources Conducive to the Use of Communal Proprietorship or Ownership Once we have established that common-property institutions are not by definition inefficient, we can begin to explore factors that are conducive to the use of communal proprietorship and ownership. By definition, all common-pool resources share the difficulty of devising methods to achieve exclusion and the subtractability of resource units. The variability of common-pool resources is, however, immense in regard to other attributes that affect the incentives of resource users and the likelihood of achieving outcomes that approach optimality. Further, whether it is difficult or costly to develop physical or institutional means to exclude nonbeneficiaries depends both on the availability and cost of technical and institutional solutions to the problem of exclusion and the relationship of the cost of these solutions to the expected benefits of achieving exclusion from a particular resource. Let us start initially with a discussion of land as a resource system. Where population density is extremely low, land is abundant, and land generates a rich diversity of plant and animal products without much husbandry, the expected costs of establishing and defending boundaries to a parcel of land of any size may be greater than the expected benefits of enclosure (Demsetz, 1967; Feeny, 1993). Settlers moving into a new terrain characterized by high risk due to danger from others, from a harsh environment, or from lack of appropriate knowledge, may decide to develop one large, common parcel prior to any divisions into smaller parcels (Ellickson, 1993). Once land becomes scarce, conflict over who has the rights to invest in improvements and reap the results of their efforts can lead individuals to want to enclose land through fencing or institutional means to protect their investments. There are tradeoffs in costs to be considered, however. The more land included within one enclosure, the lower the costs of defending all the boundaries, but the higher the costs of regulating the use of the enclosed parcel. 7 The decision to enclose need not be taken in one step from an open-access terrain to a series of private plots owned exclusively by single families (Field, 1984, 1985, 1989; Ellickson, 1993). The benefits of enclosing land depend on the scale of productive activity involved. For some agricultural activities, as discussed below, there may be considerable benefits associated with smaller parcels fully owned by a family enterprise. For other activities, the benefits may not be substantial. Moving all the way to private plots is an efficient move when the expected marginal returns from enclosing numerous plots exceed the expected marginal costs of fencing and defending a much more extended system of boundaries and the reduced transaction costs of making decisions about use patterns (Nugent and Sanchez, 1995). In a classic study of the diversity of property-rights systems used for many centuries by Swiss peasants, Robert Netting (1976, 1981) observed that the same individuals fully divided their agricultural land into separate family-owned parcels, but that grazing lands located on the Alpine hillsides were organized into communal property systems. In these mountain valleys, the same individuals used different property-rights systems side-by-side for multiple centuries. Each local community had considerable autonomy to change local rules, so there was no problem of someone else imposing an inefficient set of rules on them. Netting argued that attributes of the resource affected which property-rights systems were most likely for diverse purposes. Netting identified five attributes that he considered to be most conducive to the development of communal property rights: 1. low value of production per unit of area, 2. high variance in the availability of resource units on any one parcel, 3. low returns from intensification of investment, 4. substantial economies of scale by utilizing a large area, and 5. high cost of division (fencing and enforcement of rights) (see also McCarthy, de Janvry, and Sadoulet, 1997). Steep land where rainfall is scattered may not be suitable for most agricultural purposes, but can be excellent land for pasture and forests if aggregated into sufficiently large parcels. By developing communal property rights to large parcels of such land, those who are members of the community are able to share environmental risks due to the unpredictability of rain-induced growth of grasses within any smaller region (Agrawal, forthcoming). Further, herding and processing of milk products is subject to substantial economies of scale. If individual families develop means to share these reduced costs, all can save substantially. Building the appropriate roads, retaining walls, and processing facilities may also be done more economically if these efforts are shared. While the Swiss peasants were able to devote these harsh lands to productive activities, they had to invest time and effort in the development of rules that would reduce the incentives to overgraze and would ensure that investments in shared infrastructure were maintained over time. In many Swiss villages, rights to common pasturage were distributed according to the number of cows that could be carried over the winter using hay supplies produced on the owners' private parcels. In all cases, the village determined who would be allowed to use, the specific access and withdrawal rights to be used, how investment and maintenance costs were to be shared, and how the annual returns from common- processing activities were to be shared. All of these systems included at least village proprietorship rights, but some Swiss villages developed full ownership rights by incorporating and authorizing the buying and selling of shares (usually with the approval of the village). Netting's findings are strongly 8 supported by studies of mountain villages in Japan, where thousands of rural villages have held communal property rights to extensive forests and grazing areas located in the steep mountainous regions located above their private agricultural plots (McKean, 1982, 1992). Similar systems have existed in Norway for centuries (Sandberg, 1993; Örebech, 1993) and in Mexico (McCarthy, de Janvry, and Sadoulet, 1997). The importance of sharing risk is stressed in other theoretical and empirical studies of communal proprietorships (Nugent and Sanchez, 1993; Gupta, 1986; Antilla and Torp, 1996). Unpredictability and risk are increased in systems where resource units are mobile and where storage facilities, such as dams, do not exist (Schlager, Blomquist, and Tang, 1994). Institutional facilities for sharing risk, such as formal insurance systems or institutionalized mechanisms for reciprocal obligations in times of plenty, also affect the kinds of property-rights systems that individuals can devise. When no physical or institutional mechanisms exist for sharing risk, communal property arrangements may enable individuals to adopt productive activities not feasible under individual property rights. A recent study has demonstrated that the variance in the productivity of land over space—due largely to the variance in rainfall from year to year—is strongly associated with the size of communally held parcels allocated to grazing in the Sudan (Nugent and Sanchez, 1995). Ellickson (1993) compares the types of environmental and personal security risks faced by new settlers in New England, in Bermuda, and in Utah to explain the variance in the speed of converting jointly held land to individually held land in each of these settlements. A consistent finding across many studies of communal property-rights systems is that these systems do not exist in isolation and are usually used in conjunction with individual ownership. In other words, rights holders have dual property rights.2 In most irrigation systems that are built and managed by the farmers themselves, for example, each farmer owns his or her own plot(s) while participating as a joint proprietor or owner in a communally organized irrigation system (Tang, 1992; Sengupta, 1991, 1993; Vincent, 1995; Wade, 1992; Coward, 1980). Water is allocated to individual participants using a variety of individually tailored rules, but those irrigation systems that have survived for long periods of time tend to allocate water and responsibilities for joint costs using a similar metric—frequently the amount of land owned by a farmer (E. Ostrom, 1990, 1992). In other words, benefits are roughly proportional to the costs of investing and maintaining the system itself.3 Further, formally recognized communal systems are usually nested into a series of governance units that complement the organizational skills and knowledge of those involved in making collective- choice decisions in smaller units (O. Johnson, 1972). Since the Middle Ages, most of the Alpine systems in both Switzerland and Italy have been nested in a series of self-governing communities that respectively governed villages, valleys, and federations of valleys (Merlo, 1989). In modern times, cantonal authorities in Switzerland have assumed an added responsibility to make periodic, careful monitoring visits to each alp on a rotating basis and to provide professional assessments and recommendations to local villages, thereby greatly enhancing the quality of knowledge and information about the sustainability of these resources (Glaser, 1987). Contrary to the expectation that communal proprietorships lacking the right to alienate ownership shares are markedly less efficient than property-rights systems involving full ownership, substantial evidence exists that many communal proprietorships effectively solve a wide diversity of local problems with relatively low transaction costs (Hanna and Munasinghe, 1995a, 1995b; Wilson, 1995; Sandberg, 1993, 1996a, 1996b; Gaffney, 1992; Kaul, 1996). Obtaining valid and reliable measures of outputs and costs for a large number of property-rights systems covering similar activities in matched environmental settings is extremely difficult. In regard to irrigation, a series of careful studies of the performance of communal proprietorship systems as contrasted to government-owned and managed 9 systems, clearly demonstrates the higher productivity of the communal systems controlling for relevant variables (Tang, 1992; Benjamin et al., 1994; E. Ostrom, 1996; Lam, 1998). Schlager's (1990) studies of inshore fisheries demonstrate that fishers' communities that have clearly defined proprietorship are able to solve difficult assignment problems and assign the use of space and technology so as to increase both the efficiency and equity of their systems. Wilson's (1995) studies also demonstrate that communal proprietorship systems for inshore fisheries are more efficient than frequently thought. Performance of communal property-rights systems vary substantially, however, as do the performance of all property-rights systems. In Governing the Commons (1990), I identified eight design principles that tend to be utilized by the robust, long-surviving, common-property regimes (see Arnold, 1998: Box 1). Regimes that are not characterized by these design principles fail or limp along at the margin of effectiveness just as private firms fail or barely hang on to profitability over long periods of time. In addition to the attributes of the resource discussed above that are conducive in the first place to the use of communal proprietorship or ownership, the following variables related to the attributes of participants are conducive to their selection and enforcement of norms, rules, and property rights that enhance the performance of communal property-rights systems (E. Ostrom, 1993): 1. Accurate information about the condition of the resource and expected flow of benefits and costs are available at low cost to the participants (Blomquist, 1992; Gilles and Jamtgaard, 1981). 2. Participants share a common understanding about the potential benefits and risks associated with the continuance of the status quo as contrasted with changes in norms and rules that they could feasibly adopt (E. Ostrom, 1990; Sethi and Somanathan, 1996). 3. Participants share generalized norms of reciprocity and trust that can be used as initial social capital (Cordell and McKean, 1992). 4. The group using the resource is relatively stable (Seabright, 1993). 5. Participants plan to live and work in the same area for a long time (and in some cases, expect their offspring to live there as well) and, thus, do not heavily discount the future (Grima and Berkes, 1989). 6. Participants use collective-choice rules that fall between the extremes of unanimity or control by a few (or even bare majority) and, thus, avoid high transaction or high deprivation costs (E. Ostrom, 1990). 7. Local leaders willing to bear a disproportionate amount of the initial start-up costs of these systems. 8. Participants are likely to lose other benefits such as mutual insurance, labor reciprocity, and social capital if resources are privatized (de Janvry, personal communication; Taylor, 1982, 1987). 9. Participants can develop relatively accurate and low-cost monitoring and sanctioning arrangements (Berkes, 1992). Many of these variables are, in turn, affected by the type of larger regime in which users are embedded. If the larger regime recognizes the legitimacy of communal systems, and is facilitative of 10 local self-organization by providing accurate information about natural resource systems, providing arenas in which participants can engage in discovery and conflict-resolution processes, and providing mechanisms to back up local monitoring and sanctioning efforts, the probability of participants adapting more effective rules over time is higher than in regimes that ignore resource problems or presume that all decisions about governance and management need to be made by central authorities.4 Two additional variables—the size of a group and its homogeneity—have been noted as conducive to the initial organization of communal resources and to their successful performance over time (E. Ostrom, 1992; Libecap, 1989a, 1989b; Kanbur, 1991). As more research has been conducted, however, it is obvious that much more theoretical and empirical work is needed since both variables appear to have complex effects.5 Changing the size of a group, for example, always involves changing some of the other variables likely to affect the performance of a system. Increasing the size of a group is likely to be associated with at least the following changes: (1) an increase in the transaction costs of reaching agreements; (2) a reduction of the burden borne by each participant for meeting joint costs such as guarding a system, and maintenance; and (3) an increase in the amount of assets held by the group that could be used in times of emergency. Libecap (1995) found that it was particularly hard to get agreements to oil unitization with groups greater than four. Blomquist (1992), on the other hand, documents processes conducted in the shadow of an equity court that involved up to 750 participants in agreeing to common rules to allocate rights to withdraw water from groundwater basins in southern California. The processes took a relatively long period of time, but they have now also survived with little administrative costs for half a century. Agrawal (1996) has shown that communal forestry institutions in India that are moderate in size are more likely to reduce overharvesting than are smaller groups because they tend to utilize a higher level of guarding than smaller groups. Group heterogeneity is also multifaceted in its basic causal processes and effects (Agrawal and Gibson, forthcoming). Groups can differ along many dimensions including their assets, their information, their valuation of final products, their production technologies, their time horizons, their exposure to risk (e.g., headenders versus tailenders on irrigation systems), as well as their cultural belief systems. McCarthy, Sadoulet, and de Janvry (1998) show that when differentials in the efficiency of resource users in their appropriation or production technologies are high, cooperation may break down. Libecap's (1989b) research on inshore fisheries has shown that when fishers have distinctively different production technologies and skills, all potential rules for sharing withdrawal rights have substantial distributional consequences and are the source of conflict that may not easily be overcome. Libecap and Wiggins' (1984) studies of the prorationing of crude oil production reveal an interesting relationship between the levels and type of information available to participants and the likelihood of agreement at various stages in a bargaining process. In the early stages of negotiation, all oil producers share a relatively equal level of ignorance about the relative claims that each might be able to make under private-property arrangements. This is the most likely time for oil unitization agreements to be reached successfully. If agreement is not reached early, each participant gains asymmetric information about their own claims as more and more investment is made in private information. Agreements are unlikely at this stage. If producers then aggressively pump from a common oil pool, all tend to be harmed by the overproduction and are willing late in the process to recognize their joint interests. Libecap's (1995) study of marketing agreements among orange growers also shows a strong negative impact of heterogeneity. The theoretical work of Mancur Olson (1965) on privileged groups, on the other hand, predicts that when some participants have substantial assets and their interests are aligned with achieving an agreement, such groups are more likely to organize. The empirical support for this proposition comes more from studies of global commons (Mitchell, 1995; Oye and Maxwell, 1995) than local commons (Baland and Platteau, 1997, 1998). 11 5. Privatization of Common-Pool Resources The advantage of individual ownership of strictly private goods—where the cost of exclusion is relatively low and one person's consumption is subtractive from what is available to others—is so well established that it does not merit attention here. Industrial and agricultural commodities clearly fit the definition of private goods. Individual rights to exclusion and to transferring control over these goods generate incentives that lead to higher levels of productivity than other forms of property arrangements. It has frequently been assumed that land also is always a private good and therefore best allocated using market mechanisms based on individual ownership rights. Agricultural land in densely settled regions is usually best allocated by a system of individual property rights. Gaining formal title to land, however, may or may not increase efficiency. Feder et al. (1988) conducted an econometric study that showed that agricultural land in Thailand without a formal title was worth only one-half to two-thirds of land with a formal title. Further, increasing the security of private-property rights also led to an increased value of the crops produced (between one-tenth and one-fourth higher than those without secure title). More secure titling also provided better access to credit and led to greater investments in improved land productivity (see also Feder and Feeny, 1991). Title insurance is another mechanism used to reduce the risk of successful challenges to ownership of land. Registering brands is still another technique used to increase the security of ownership over resource units in the form of cattle that may range freely over a large area until there is a communal effort to undertake a round-up. Gaining formal titles is, however, costly. In societies that do not yet have high population densities and where customary rights are still commonly understood and accepted, formal titling may be an expensive method of increasing the security of a title that is not associated with a sufficiently higher return to be worth the economic investment (see Migot-Adholla et al., 1991). In addition, it should now be clear that the cost of fencing land by physical and/or institutional means is nontrivial and that there are types of land and land uses that may be more efficiently governed by groups of individuals rather than single individuals. A commonly recommended solution to problems associated with the governance and management of mobile resources units, such as water and fish, is their “privatization” (Christy, 1973; Clark, 1980). What private ownership usually means in regard to mobile resource units, however, is individual ownership of withdrawal rights. Water rights are normally associated with the allocation of a particular quantity of water per unit of time or the allocation of a right to take water for a particular period of time or at a particular location. Fishing rights are similarly associated with quantity, time, or location. These rights are typically “withdrawal” rights that are tied to resource units and not to a resource system. In addition to the individual water rights that farmers hold in an irrigation system, they may also jointly own—and, therefore, govern and manage—the irrigation facilities themselves (Tang, 1992). In addition to the quotas or “fishing units” that individual fishers may own, no one owns the fishing stock and governmental units may exercise various types of management rights in relationship to these stocks (Schlager, 1990). In groundwater basins that have been successfully litigated, individual pumpers own a defined quantity of water that they can produce, rent, or sell, but the groundwater basins themselves may be managed by a combination of general-purpose and special- purpose governmental units and private associations (Blomquist, 1992). Implementing operational and efficient individual withdrawal rights to mobile resources is far more difficult in practice than demonstrating the economic efficiency of hypothetical systems. Simply gaining valid and accurate measurements of “sustainable yield” is a scientifically difficult task. In 12 systems where resource units are stored naturally or by constructing facilities such as a dam, the availability of a defined quantity of the resource units can be ascertained with considerable accuracy, and buying, selling, and leasing rights to known quantities is relatively easy to effectuate in practice. Many mobile resource systems do not have natural or constructed storage facilities and gaining accurate information about the stock and reproduction rates is very costly and involves considerable uncertainty (Allen and McGlade, 1987; Wilson et al., 1991). Further, as Copes (1986) has clearly articulated, appropriators from such resources can engage in a wide diversity of evasive strategies that can destabilize the efforts of government agencies trying to manage these systems. Further, once such systems have allocated individual withdrawal rights, efforts to further regulate patterns of withdrawal may be very difficult and involve expensive buy-back schemes (Örebech, 1982). Experience with these individual withdrawal-rights systems has varied greatly in practice (see Pinkerton, 1992, 1994; McCay, 1992; McCay et al., 1996; Wilson and Dickie, 1995). Exactly which attributes of both physical and social systems are most important to the success of formal systems to create quotas for authorized users from common-pool resources is not as well established as the attributes of common-pool resource systems conducive to group proprietorship or ownership. On the physical side, gaining accurate measurements of the key variables (quantity, space, technology) that are to be involved in management efforts is essential. Resource systems that are naturally well-bounded facilitate measurement as well as the ease of observing appropriation behavior. Storage also facilitates measurement. Where resource units move over vast terrain, the cost of measurement is higher than when they are contained (e.g., it is easier to develop effective withdrawal- rights systems for lobsters than for whales). Considerable recent research has also stressed the importance of involving participants in the design and implementation of such property-rights systems. When participants do not look upon such rules as legitimate, effective, and fair, the capacity to invent evasive strategies is substantial (Seabright, 1993; Wilson, 1995). The size of the group involved and the heterogeneity of participants also affects the costs of maintaining authorized user rights systems (Edwards, 1994). And, the very process of allocating quantitative and transferable rights to resource units may undo some of the common understandings and norms that allowed communal ownership systems to operate at lower day-to-day administrative costs. When privatization refers to a division of the commons itself—rather than an allocation of the products from the commons—one can expect that substantial distributional consequences are likely. The individuals who are most likely to be aware of a potential division are those who are the best informed in a community and most likely already to have more economic and political assets. Jodha (1990, 1996) documents the reduction in access to resources by poor farmers in India after many of the “wastelands” were privatized. Full privatization of a commons is not the only time when distributional issues may be substantial. Efforts to further restrict entry to over-utilized common-pool resources by communal groups (or by a national government in their name) frequently reduce the rights of those who already have the most marginal position in a community. Thus, those who come from a minority ethnic group or a non-permanent residents of a local village (pastoralists, for example) are frequently the ones who lose access when efforts are made to further exclude users (see Baland and Platteau, 1998: 16-17). 6. Property Rights and the Problems of Access and Sustainability of Common-Pool Resources 13 When no one has property rights as authorized entrants, authorized users, authorized claimants, proprietors, or full owners to a common-pool resource, an open-access regime exists. Access to resources is maximized in open-access regimes since no one can be excluded from entering, harvesting, or managing such resources. If the resource generates highly valued resource units and is near to a dense population and a good market for these products, the incentive to over-appropriate will be high, and the resource system may become overly congested or even destroyed over time. In this case, the benefit of having access to the resource is low because the value that can be obtained will be substantially less than if a well-defined property-rights regime existed (whether private or common property) that regulated provision and appropriation so as to yield relatively efficient outcomes. The existence of a well-defined property-rights system is important for the sustainability of a resource system—thus allowing more people over time to have access to resources. Both private and common property can be used to include and exclude different sets of individuals. As part of the International Forestry Resources and Institutions (IFRI) research program and studies conducted by the Center for the Study of Institutions, Population, and Environmental Change, recent research in Brazil, Uganda, and Nepal illustrate the complex relationship between both private and common-property arrangements and access to resources. Access to Land in Patos do Ituqui, Brazil A recent study undertaken in the Amazon helps to illustrate that access to resources may motivate collective action to gain both private rights and communal rights to the use of land (Futemma, De Castro, and Silva-Forsberg, 1998). The study was conducted in Patos do Ituqui which is located around 50 kilometers from Santarém in the State of Pará, Brazil. The settlement is located on the intersection between an upland forest ecosystem and a floodplain system. Titles to large sections of land were issued by the Portuguese government during the nineteenth century. The upland forest area had been owned by a series of four large landowners until 1987. Individual households had occupied small plots and freely utilized both the upland and floodplain ecosystems since the turn of the twentieth century. While legally they were squatters, no effort was made to expel these settlers from the land they used. The situation facing the villagers changed rapidly during the 1960s when a large ranching company purchased the upland forest and threatened to clear-cut the forest in order to create a large cattle ranch. Given their lack of property rights, the villagers could have been expelled as squatters and thus lost their access to this land for farming, for forest products, and for grazing. “After almost two decades of battle and with help from the Union of Rural Workers of Santerém and the Catholic Church, the governmental office in charge of agrarian reform (INCRA) finally expropriated the land in 1987 as part of a large settlement project in the region” (Futemma, De Castro, and Silva-Forsberg, 1998: 5). At this point, each of the families and all males older than 18 years of age were assigned a 50 hectare lot. Lots were assigned to 28 families. Since then, four families have moved out of the village but retain their claim to these lots. Eventually, formal titles to these lots will be given to those assigned. Thus, when threatened with loss of access, the villagers engaged in extensive collective action to redistribute private-property rights from a single owner to themselves with the assistance of external NGOs and the Catholic church in a political regime that had authorized various forms of land redistribution. The floodplain ecosystem had formally become state property in 1936, but no effort had been made to exclude others from using the floodplain lands. An informal system of property rights had evolved in the region that allowed some individuals to claim the equivalent of full ownership rights 14 (De Castro and McGrath, 1998). “In Patos, the floodplain ecosystem had long been privately held by large ranchers who used the grassland as a dry season pasture, whereas the local population always had free access to use the flooded forest (açai palm tree)” (ibid.: 6). In 1993, the rancher who “owned” this land decided to “sell” it to another rancher who was a new settler in the region. Local villagers feared that the new owner would try to enforce exclusive use to the floodplain land and exclude them from access to the fruit of the açai palm tree. They issued a general invitation to all villagers to pool resources in order to purchase this land collectively. Because of their fear of exclusion, 12 households joined together to purchase 200 hectares of land at a total cost of $4,000 (or $333 per household). In this instance, villagers used collective action in order to obtain communal rights as owners of the floodplain property, which has many of the attributes that Netting (1976) identified as more congruent with common property. Given that only one-half of the local villagers, who now have 50 hectare upland plots, decided to join together to purchase the floodplain land, an important question is what factors lead these 12 families to engage in collective action and how do these families differ from the others in the settlement? A census of the local settlers was conducted during the summer of 1997 and questions were asked regarding the potential sources of money or credit within a household, the benefits that a household could obtain from the floodplain, and whether any of the leaders from the initial collective action were members of a household. Futemma, De Castro, and Silva-Forsberg (1998) found that a higher percentage of household that purchased communal property had access to credit or had members of their family receiving retirement payments. Thus, these families had an easier time raising the necessary financial assets. They also found that both types of households used the floodplain for açai palm fruit for household consumption, but that the households who jointly purchased this land also collected açai palm fruit for commercial sale and had actually closed access to non-members for any use of this product for other than household consumption. Futemma, De Castro, and Silva-Forsberg (1998) also found a difference in the plans of households to use land for pasturing cattle. Four families, who jointly own communal land, raise cattle for commercial purposes and thus graze cattle on the floodplain during the dry season and on their private plots during the wet season. None of the families who did not join raised cattle for commercial purposes. And, the leaders of the earlier collective action aimed to obtain private lots, were also members of the group who worked together to purchase communal land. Thus, in regard to both upland and floodplain ecosystems, “Patos' villagers have faced threats to access which have led to changes in property-rights regimes. In the upland, land ownership changed from a set of squatters occupying the land of a single private owner to several private owners (all residential families), whereas in the floodplain an ongoing change is taking place from a single private owner to a common property” (Futemma De Castro, and Silva-Forsberg, 1998: 6-7). Collective action to change property regimes does require assets in the form of leadership, time, and resources. Participants with a greater share of these resources participated in both efforts to change property- rights regimes and thus those who ended up with access to resources were households who already had acquired sufficient human and social capital, and access to financial resources, that they could invest in the costly efforts to change property regimes. (In both instances, they were dealing with some individuals who had far more substantial financial resources than the successful group, but among the villagers, those who already had some greater resources were those who were successful in the second effort.)6 Access and Sustainability of Forest Resources in Uganda 15 Research conducted by the Uganda Forestry Resources and Institutions Center (UFRIC) directed by William Gombya-Ssembajjwe and Abwoli Banana at Makerere University in Uganda also indicates that the relationship between type of tenure and access to resources is relatively complex and depends on many other factors in addition to the type of tenure involved. In a recent report, Banana, Gombya- Ssembajjwe, and Bahati (1998) compare the patterns of access and use of two neighboring forests located within 45 minutes by car from Kampala, Uganda. The Lwamunda Forest Reserve and Namungo Private forest were both studied in 1993 and revisited again in 1997. Both forests were to some extent abandoned during the civil war from 1981 to 1985. Since 1986, the Mpigi District Forest Office has officially managed the Lwamunda Forest but has not had sufficient resources to allocate more than a few guards to keep it from being illegally harvested. Mr. Namungo lives immediately adjacent to his forested area and hires agricultural labor to work on his farm as well as to patrol the forest regularly. Namungo recognizes the traditional rights of villagers living on the other side of his forest to gather dead wood for fuel, wild foods, plants for medicines and crafts, and water. Local residents are not supposed to harvest timber, burn charcoal or take green wood in either of the forests, but tend to observe these rules in relationship to Namungo Forest but not in regard to Lwamunda Forest Reserve. In both 1993 and 1997, a sample of 30 plots were located in both forests in order to assess the degree of illegal activities and to measure the trees and shrubs present on these plots. Even though the owner of Namungo Forest had obtained legal permits to harvest wood from his forest and had converted a segment of it into a Eucalyptus plantation, there was more evidence of harvesting activity on the Forest Reserve in both years than on the private forest. In 1997, indications of “commercial firewood-cutting, pit-sawing, and/or charcoal-making, were noted on more than half of the plots in the Lwamunda Forest Reserve, while only 4 out of 30 plots in Namungo Forest revealed evidence of such exploitation. There is evan a fairly large illegal brick kiln located within the Lwamunda forest near to the police post (Gombya-Ssembajjwe, 1996: 132). Thus, in the Uganda case study, access to forest resources was certainly much greater on government property than on private property, but much of the access was illegal in nature. Local residents did respect Namungo's property and actually helped to protect it from illegal use by villagers who did not have traditional claims to use of this forested land. Thus, the most extensive access to forest resources that occurred in Lwamunda was also associated with a greater level of misuse and the danger of long-term degradation of forest resources. In a study that included 12 additional forests that were government-owned, privately-owned, and communal forests, Gombya-Ssembajjwe (1996) did find that extensive illegal harvesting was occurring on all but one of the six government forests included in his sample, and on two of the four private forests. The communal forests were much smaller and primarily sacred forests. In three of the four communal forests, no illegal activities were observed at all. In the fourth communal forest, one-third of the plots had evidence of illegal pitsawing, charcoal burning, or harvesting of commercial size timber. Consequently, it would appear that due to the lack of staff and the type of incentives facing forestry staff, land that is officially government property is operating in practice much closer to open- access land than either private or communal forests. While a greater proportion of both private and communal forests were relatively well regulated, these property regimes are not universally successful in reducing illegal harvesting and unsustainable long-term use patterns. More people do have access to government forests than private or communal forests. Gross mismanagement of these forests, however, may lead to their serious degradation over time and thus a reduction in the value that rural villages can obtain from these forests. 16 Access and Sustainability of Forest Resources in Nepal A recent analysis of 18 forests in the middle hills of Nepal (Varughese, 1998) utilizing many of the same research instruments as those used in Brazil and Uganda sheds some light on the relationship between the ability of local users to use their rights as de facto or de jure proprietors to organize themselves, establish harvesting constraints, and then to monitor and enforce these constraints themselves. During the 1950s, the government of Nepal nationalized most forest land based on a theory of reform that local villagers could not manage them effectively. Consequently, diverse forms of local organization became illegal while the government itself did not have the staffing necessary to protect these resources and manage them effectively. Consequently, government forests became effectively open access forests in many locations. In others, local groups continued their earlier practices or reasserted control over neighboring forests. In recent years, official government policy is to hand over much of the forested land to local user groups through a variety of donor-assisted programs. The Nepal IFRI team was asked to conduct baseline studies for two of these programs so that a record of what was on the ground before the forests were handed back to local communities could be assessed. Sixteen of the cases were selected so as to monitor the effectiveness of the Hills Leasehold Forestry and Forage Development Project of the Government of Nepal and the other two cases were selected as a baseline assessment for the Shivapuri Integrated Watershed Development Project north of Kathmandu valley. The cases vary substantially in regard to forest conditions and the extent of collective action already undertaken by forest users at the time of the initial site visits. During the site visits (which range in time from 3 to 4 weeks in duration), a random sample of forest plots is taken and systematic forest mensurations are taken. The forest specialist (a professional forester or botanist) on the team is asked to make an assessment, after viewing all of the randomly selected plots, of the condition of the forest stock (using a three-point scale that ranged from below average to above average). Further, the users of the forest were also asked in a group interview to assess whether their forest was improving, stable, or worsening. No relationship between current population density and population growth and forest conditions was found in these 18 sites. Further information was obtained from group interviews concerning whether the forest users had organized themselves, have developed harvesting constraints, and if these constraints are locally monitored and enforced. As shown in Tables 2 and 3, there is a strong relationship between the initial assessment of the condition of the forest resources and the level of collective activity undertaken in a community. Those communities that had self-consciously organized a user group, had based restrictions on the use of their forests, and were monitoring these rules had average or above average forests (as assessed by the forest specialist) and were seeing improvement in forest conditions over time (as assessed by the group themselves). Varughese is currently engaged in a more detailed analysis of the factors that affect local user's willingness to organize, restrict access, and invest in monitoring. From his preliminary study, Varughese (1998: 25) concludes: Where users were unable to define the extent of forest boundaries or the number of users in a group clearly, the ambiguity allowed opportunistic individuals to encroach upon forested land. Investments in monitoring, in particular, significantly determine the difference between a flourishing resource and one just able to meet the needs of the users. In the locations with higher populations but improving resources, Raniswara and Churiyamai, user groups invested in monitoring even to the point that extra guards were assigned during seasons of greater need. [Tables 2 and 3 about here] 17 The findings in the Nepal study are consistent with those of Agrawal and Yadama (1997) who found that the most important aspect of user participation in their sample of 279 communities in India was the level of investment made by the user group in monitoring and protection activities. 7. What Have We Learned Related to Future Reform Efforts? Many of the previous efforts to reform the structure of governance and property-rights systems in developing countries with the avowed aim of increasing the access of the poor to resources and improving the overall productivity of the economy have not succeeded. One reason for these failures—but, of course, not the only reason—has been an overly simplistic view of the institutional options available and the presumed ease of imposing policy reforms that will operate as panaceas to extremely difficult and complex problems. In this paper I have tried to clarify some of the previous misunderstandings related to common- property regimes and common-pool resources. Common-property regimes were confused for several decades of policy analysis with open access regimes where no regulation of access, withdrawal, management, exclusion or alienation occurs. While many common-property regimes do not confer individual rights of alienation onto users, they have been shown to be capable of achieving relatively high levels of efficiency— especially when they utilize a set of design principles earlier identified (E. Ostrom, 1990). The particular set of rights and how they are organized by common-property regimes varies dramatically from one setting to another as does the performance of these systems. It is important, however, that common-property institutions be viewed as one of the institutional tools that individuals can use (frequently together with private property) to create incentives associated with efficiency and sustainability. We are in danger of seeing a new panacea as policy analysts have witnessed the failures of earlier efforts. In the forestry sector, after years of recommending control by powerful national agencies (“custodian forestry”), many policy analysis now recommend some form of devolution to the control of local users. Substantial evidence supports the claim that local users can organize to manage forest resources and do much better than distant, national ministries (Poffenberger, 1990; Poffenberger and McGran, 1996; Agrawal, 1994). Simply declaring a change in national policy and turning over large amounts of forested land to rapidly created “user groups” may be another overly simplistic policy that will see its own failures in another decade or so. In a recent briefing paper by the International Centre for Integrated Mountain Development, for example, the following statement was made: “Nepal has currently the most pioneering forestry legislation in the world. It was approved in 1993 and the rules gazetted in 1995. Approximately 350,000 hectares of forest have been handed over to 4,500 forestry user groups” (ICIMOD, 1997). One would think that the comment would have been followed by a cautionary note that a rapid, wholesale transfer of forested land to a very large number of user groups within an extremely short period of time was a danger signal that a new policy was being implemented in a manner unlikely to succeed. While extensive research shows that Nepali villagers do have substantial capabilities for self- organization—especially in regard to irrigation7—simply giving them back the forested areas that were taken away from them forty years ago is no guarantee that most of these user groups will organize sufficiently that they will manage these lands sustainably and efficiently. By now many of these lands are substantially degraded and will require costly investments. Fortunately, there are several different kinds of experiments going on right now in Nepal and some of these innovations are being monitored. Consequently, it will be possible in several years to understand which processes of implementing the massive turnover of forest lands to local users have been the most successful in helping forest users 18 overcome the very high costs of initial organization and of making the investment needed to insure the long-term sustainability of their recently returned forest lands. Policy analysts need to move away from viewing any institutional arrangement as a panacea and learn how to analyze the attributes of a resource system and of the individuals using that system. Sole reliance on the state, the market, or on common property to “fix” any problem is unlikely to succeed. We need to offer the owners, proprietors, claimants, authorized users, and authorized entrants of a wide diversity of valuable common-pool resources a set of intellectual tools that they can use in crafting more robust local, regional, and national institutions and in learning how to cooperative effectively with one another so as to achieve higher long-term productivity. Real long-term gains are achieved by individuals who are motivated to work effectively together and are rewarded in the long- term for their efforts. Devising effective, autonomous, and honest court systems and multiple arenas where peaceful contestation can occur is as important as enabling problem-solving individuals to utilize a mixture of property-rights systems well-matched to the situations they face. 19 Notes 1. This and the next several sections draw heavily on E. Ostrom, forthcoming. 2. For an analysis of dual property rights, see de Janvry, McCarthy, and Sadoulet, 1998; McCarthy, Sadoulet, and de Janvry, 1998; and McCarthy, de Janvry, and Sadoulet, 1997. 3. See Design Principle 2 in E. Ostrom, 1990: 90. 4. In a separate paper, “Self-Governance and Forest Resources,” I try to bring together the emerging theory of self-organization related to the use of forests (see E. Ostrom, 1997). 5. In two recent papers, Baland and Platteau (1997, 1998) explore the effect of wealth inequality in both regulated and unregulated commons. They do not find support for the proposition that wealth inequality leads to higher voluntary provision or increases the probability of achieving effective regulation. 6. It also appears that the households that have created the communal property in the floodplain have also drawn more heavily on the assets they now own on their forested property. 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Yang, Tai-Shuenn. 1987. “Property Rights and Constitutional Order in Imperial China.” Ph.D. dissertation, Indiana University. 33 Table 1 Bundles of Rights Associated with Positions Owner Proprietor Authorized Authorized Authorized Claimant User Entrant Access Withdrawal Management Exclusion Alienation X Source: E. Ostrom and Schlager (1996: 133). X X X X X X XXX X XX X X 34 Table 2 Preliminary Comparisons of Forest Condition with Collective Activity Site Location Forest Condition Trend Forest Stock Condition Collective Activity Churiyamai (Makwanpur) Improving Average High Bijulikot (Ramechhap) Improving Average High Doramba (Ramechhap) Improving Average High Raniswara (Gorkha) Improving Average High Bandipur (Tanahun) Improving Above average High Manichaur (Kathmandu) Improving Average Moderate Riyale (Kavre Palanchowk) Stable Below average Moderate Thulo Sirubari (Sindhupalchowk) Stable Average Moderate Barbote (Ilam) Stable Average Moderate Baramchi (Sindhupalchowk) Stable Below average Low Bhedetar (Dhankuta) Worsening Above average Moderate Agra (Makwanpur) Worsening Average Low Chhimkeswari (Tanahun) Worsening Average Low hunmang (Dhankuta) Worsening Average Low Bhagwatisthan (Kavre Palanchowk) Worsening Below average Low Sunkhani (Nuwakot) Worsening Below average Low Chhoprak (Gorkha) Worsening Below average None Shantipur (Ilam) Worsening Average None Collective Activity: formally or informally organized collective action level at the user level Low = individuals may observe harvesting constraint on their own, no group activities Moderate = as a group individuals have harvesting constraints, minimal group activities, little or no monitoring High = enforced harvesting constraints, organized group activities, monitoring by members Source: Varughese (1998: 14). 35 Table 3 Association of Level of Collective Activity with Forest Condition Forest Condition Collective Activity Total High Moderate Low or None Improving 5 (83%) 1 (17%) 0 6 (100%) Stable 0 3 (60%) 2 (40%) 5 (100%) Worsening 0 1 (14%) 6 (86%) 7 (100%) Total 5 5 8 18 tau (τ)=0.80 Source: Varughese (1998: 15). 36 }}
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