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Bureaucratic overgrazing and the tragedy of the common currency.

By GARY D. LIBECAP [Defining Ideas] – In 1968, the American ecologist Garrett Hardin wrote “The Tragedy of the Commons” which must be the most cited article ever to appear in Science Magazine. In this article, Hardin described the “tragedy” associated with common pool resources—those that are claimed or used by many with little effective restriction. With a common resource, each party is motivated by private self-interest in deciding how much of and when to use the resource. But the costs of these private decisions are spread across to everyone. This mismatch between private and social benefits and costs in decision-making results in the outcomes we are all familiar with—waste, plundering, and extensive and rapid use of the resource with little consideration of the future.

Hardin made his point by describing a pasture that was “open to all” and, hence, subject to overgrazing. Although each herder privately benefits from grazing his or her own animals, the costs of overstocking are shared by all herders. Under these circumstances, each herder is motivated to add more animals than would be optimal for the range resource. Hardin concluded: “Therein is the tragedy. Each man is locked into a system that compels him to increase his heard without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.”

Although Hardin was eloquent in describing the problem, he was much less persuasive in describing the solution. The remedy he offered was “mutual coercion, mutually agreed upon…coercive devices to escape the horror of the commons.” According to Hardin, the outcome would be unjust because some parties would accept more costs and fewer benefits than others. Why? “The alternative of the commons is too horrifying to contemplate. Injustice is preferable to total ruin.” Of course, Hardin was wrong—not in identifying the underlying source of the Tragedy of the Commons, but in predicting its solution.

All around us we see examples of cases where common pool resource problems persist, at least until there is a major crisis. Parties disagree, occasionally on the magnitude or nature of the overall problem, but most often, on the sharing of the costs and benefits of addressing it…Self-restraint under a commons does not pay—for the individual or for the resource. Accordingly, the problem continues and the tragedy described by Hardin emerges.

At some point, a crisis occurs—the pasture is so overgrazed that it no longer supports any livestock and all herders lose. With a crisis, the status quo is no longer viable and distributional issues become less critical in agreeing to a solution to the problem of open access. But by that time, the resource may be so depleted and the crisis so severe that the resource cannot rebound. Hence, the Tragedy of the Commons.

Continued at Defining Ideas | More Chronicle & Notices.

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