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Abstract:
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"It is said that opponents in a vigorous debate share at least one premise in common. That observation appears to characterize the three schools of thought on common property institutions. The first is the privatization school (e.g. Demsetz, 1967), according to which private property is the most efficient institution for governing resource allocation. The second is the centralization school allegedly represented by Hardin (e.g. 1968). It is by now much noted that both the privatization and centralization schools fail to distinguish between common property and open access. A third school of thought, which one might call the communitarian school, argues for the superiority of community control (examples may be found e.g. in Bromley, 1990). The debate between these schools regarding which of these three forms of organization is best is grounded in the false premise that the relative performance of alternative institutions can be judged independently from the environments in which they function. Just as the old structure-conduct-performance paradigm is now regarded as defunct, due to its implicit assumption that the structure of industries are exogenous, so too does the common property debate suffer from misplaced exogeniety.
"The present paper takes the alternative viewpoint that institutions are endogenous and the superiority of one institution over another does not carry over from one environment to the next. The discussion is organized as follows. Section 2 provides a sketch of a conceptual framework that facilitates explanations of varying degrees of centralization of decision-making. Common property is seen to be an intermediate form of organization, where-decision making is centralized at the local or community level. Section 3 applies the framework to the case of the modernization of agricultural economies. Concluding remarks including policy implications are provided in Section 4."
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