The tragedy of the commons

Why do people have so much trouble managing natural resources? I mean, they grow back. The tragedy of the commons might help explain. Let's say there's some land that people use as pasture for their animals. Nobody owns it and anyone can come graze their livestock here. So we would call this an open access field. But the thing is, if nobody owns it, then really everybody owns it. Let's assume the number of animals this field can feed is based on the quantity and quality of the grass, which is based on the health of the soil. This is the carrying capacity. If more animals than this are added, the grass can't re-grow fast enough to support them all. The grass protects the soil from erosion and the field may decline in productivity, lowering the carrying capacity. The animals will be less healthy and provide lesser quality products lowering the profit each animal provides. Eventually, the field might be so eroded that it can't support any animals. So obviously it's in the group's best interest to keep the number of animals on the field at or below the carrying capacity. But since this field is open for access it will probably end up being overgrazed. This is the tragedy of the commons: Every herdsman that puts animals on the field will get the direct benefit that that animal provide for him. But they will each only share a portion of the costs of the degraded field. let's say the field is at carrying capacity and a herdsmen decides to add an extra animal. The added animals takes some food that would have gone to the others. This reduces their value. But the owner of that additional animal comes out ahead because, even though his animals also are less healthy, he has more of them. So each herdsmen will keep adding animals to their herd or let their animals graze longer, so long as its profitable for themselves. This is like the prisoner's dilemma. Where if the individual only looks at themselves they feel that they are gaining by adding more animals. But this is unsustainable use and over time the field will decline and all the herdsmen will lose out. Since new people can't be excluded from using the field, and people can't stop others from using it, there's almost no point in boycotting it. Someone else could just come in. Since none of the herdsmen own the field and they can see the field may not be around forever. They see no point in conservation and just try to use it before someone else does. And there's no point planning for future use if everyone else is just using it as much as they want. These open access resources suffer from 2 main problems: non-excludability because anyone can come and use it, and no reason to cooperate. So what are some alternatives. Let's look quickly at two options, private ownership and communal ownership. Private ownership is when it's is owned by 1 person or business. So if 1 person owns the land and adds an extra animal after carrying capacity, he will only hurt himself so he won't do it. He knows the field will be around later and won't value short term gains and work on long term investment. private ownership solves the problems of exclusion and cooperation as long as there is some sort of legitimate force like a government that can uphold the boundaries. Most of the land in North America is held privately and it works well here but it is not a solution to all open access problems. If the land is uneven in productivity over time, then any sectioned parcel of land may not provide enough to sustain someone for a season and they may overuse just so they can make a living. And with most ocean resources, the resource swims around and it's difficult to draw and enforce boundaries. This leads us to an advantages of communal ownership. If the whole area is shared by a group, then they can move to the productive areas when the season is right. Communal ownership is different than open access because only those within a certain group of people or community are allowed to use it. To those outside the community it might as well be privately owned. So it can solve the exclusion problem. But communal ownership doesn't necessarily solve the cooperation problem. If the community does not work together than you have essentially have a tragedy of the commons. Traditional thought it to give control over to some government or central authority when private ownership is not appropriate. But this usually just causes more problems. ...the people didn't work together. They couldn't work together. Because the forests weren't technically theirs to manage. And deforestation actually accelerated. It wasn't that government was incompetent or evil. It's just to implement the plan the government needed to decide...