The Tragedy That Was Not Inevitable

A well-known parable describes a pasture open to every herder in a village. Each herder gains the full benefit of adding one more animal, while the cost of the extra grazing is shared among all. Each therefore adds animals; the pasture is stripped bare, and everyone is worse off. The parable is usually offered as a proof that resources held in common are doomed unless they are divided into private holdings or placed under the control of the state, and it has shaped a great deal of thinking about the environment and about property.

The parable works by stipulation. Its herders cannot speak to one another, have no history together, and have no rules about who may graze or how much. Researchers who examined real arrangements for shared irrigation, fisheries and forests found that many had lasted for centuries without being divided or taken over. Their members were not unusually saintly. They had built institutions: rules about who could use the resource, limits on how much each could take, ways of checking that the rules were obeyed, and penalties for breaking them.

The successful cases share several features. The boundaries of the resource and of the group entitled to use it are clear. The rules are fitted to local conditions rather than imposed from outside. Those affected by the rules can take part in changing them. Monitoring is done by the users themselves, or by people accountable to them. And penalties begin small, with a first offense meeting a reminder rather than expulsion, so that a mistake does not destroy trust. Where these features are missing, shared resources do fail, and the parable describes a real outcome. But the outcome is a contingent one: it follows from a particular absence of institutions, not from the mere fact that the resource is shared.

The implication for policy is that the usual choice between market and state is too narrow. A third course consists of institutions built and maintained by the users themselves. This course has limits, however. Such arrangements are hard to transplant, since the rules that work in one valley may be useless in the next. They are fragile in the face of outside pressure, as when a sudden new market for a resource brings in users who have no stake in the community. And they work best for resources of modest scale, used by people who know one another. A resource such as the atmosphere, used by billions of people who cannot observe one another and have no common authority, lacks nearly all of the conditions that make local arrangements succeed.

The lesson is therefore not that shared resources always thrive. It is that “tragedy” describes what happens to a shared resource in the absence of workable rules, and not what shared ownership by itself implies. Pessimism about human cooperation is an empirical claim, and should be tested against cases. Applied to the cases that have been studied, it is neither plainly true nor plainly false, and that is itself a reason to give up the confident certainty with which the parable is so often repeated.