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Abstract:
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"In the governance of common pool resources, there are two types of error. For one, the type 1 error is concerned with the case where unrestricted use of common pool resources leads to over-utilization and depletion of the resources. This is the well-known problem of the tragedy of the commons. We refer to this as a type 1 error, because a tragedy of the commons happens if a community mistakenly claims a certain resource as commons when, in fact, the resource would be better utilized as private property.
For another, a type 2 error refers to the case where the erroneous privatization of common pool resources results in inefficient resource allocation or 'race to the bottom' situation. Therefore, this problem can be termed as the tragedy of the privatization. In this case, an optimal governance strategy may be to use the resource as a common property resource rather than a private property such that it may be governed either by the state or a self-governing community. In the real world, there are numerous cases where type 2 errors occur when common pool resources are governed.
This study addresses the issue of the tragedy of privatization, which happens if the consent of a community is not well defined when in fact it should have been for the optimal use of the resource. In a sense, the tragedy of the privatization is the opposite case of the tragedy of anti-commons where the consent of a community is defined to excessively result in the under-utilization of the resource.
We can find diverse ways to avoid the tragedy of the privatization. For example, we can interpret a firm as an organization in which employees voluntarily yield their private efforts to the employer preventing the potential tragedy of privatization by restraining their own use of work hours. Another example is a local government which quite often uses a mandate to restrict the way its constituents utilize their properties to prevent the tragedy of privatization.
Specifically, we will do three things: first, we will explore several cases of the tragedy of the privatization of the commons in a historical context. Second, we will attempt to classify these cases based on the current status of governance. Finally, we will identify the determinants of the governance types. An effort of this nature would enable us to further expand the horizons of our understanding of the issue of common pool resource governance."
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