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Heterogeneity and Commons Management

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Type: Conference Paper
Author: Bardhan, Pranab; Dayton-Johnson, Jeff
Conference: Constituting the Commons: Crafting Sustainable Commons in the New Millennium, the Eighth Biennial Conference of the International Association for the Study of Common Property
Location: Bloomington, Indiana, USA
Conf. Date: May 31-June 4
Date: 2000
URI: https://hdl.handle.net/10535/1222
Sector: Theory
Water Resource & Irrigation
Region: Middle East & South Asia
Central America & Caribbean
Subject(s): IASC
common pool resources
farmer-managed irrigation
institutional analysis
Abstract: "Despite impressive advances in our understanding of the impact of institutional form on the performance of commons-using communities, unresolved questions remain. An important example is the role of heterogeneity among the users of a community-based natural resource. This survey article identifies the most important types of heterogeneity, the commons outcomes that they might affect, and the mechanisms that link the two. This exercise has policy relevance: if we can discern empirical regularities that link inequality to better or worse outcomes, then this has consequences for asset-redistribution programs including land reform, and poverty-alleviation programs that target communities based on the level of inequality. "There are several possible definitions of heterogeneity. We most closely analyze economic inequality--inequality in wealth or income among the members of a resource-using group. Other types of inequality or heterogeneity include ethnic and social heterogeneity, and environmental or state variables like low levels of trust or social cohesion. (These dimensions of inequality and heterogeneity are frequently correlated.) The inter-related 'commons outcomes' that might be affected by inequality include resource conservation, maintenance of infrastructure, the supply of local institutions, monitoring and enforcement of regulations, and conflict resolution. We consider two broad classes of mechanisms that lead from heterogeneity to commons outcomes. Economic mechanisms act through the effect of inequality on individual resource-users' incentives. Social mechanisms generally interpose an intermediate step between inequality and commons outcomes. "Mancur Olson's (1965) classic hypothesis supposes that inequality favors provision of a public good--such as restraint in resource exploitation--by concentrating so much wealth in one or a few resource-users' hands that it is in their interest to conserve regardless of what their poorer neighbors do. The result has been confirmed in theoretical and empirical work: inequality can favor better commons management when there are important 'non-convexities'--high fixed costs (e.g., in money, time, or labor) to establishing a community-management regime--or when each resource user's cooperative effort is proportional to the benefits derived from the system. When these conditions are not met, however, inequality can harm the prospects for cooperative behavior. Furthermore, other theoretical and empirical work has demonstrated a U-shaped relationship between inequality and commons management: very high and very low levels of inequality are associated with better commons performance, while mid-range levels of inequality are associated with poor outcomes. "We review this research, emphasizing the importance of the collective action needed to establish local institutions for managing the commons in the first place, and the existence of 'exit options' or earnings opportunities outside the commons. Case studies prevail in the empirical literature. Larger-scale surveys of several resource using systems that permit statistical analysis of the empirical regularities present on the commons are still relatively rare. We explore two parallel studies of farmer-managed irrigation systems (in Central Mexico and South India) that seek to fill this gap. "We conclude by identifying areas for future inquiry."

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