Recent Results of New Institutional Economics as a Basis for Analyzing Common Pool Resources

Abstract

This paper tries to draw some main lines in the abundant literature on economic analysis of Common Pool Resources. Some promising articles likely to pave the way to future research are more precisely presented.

The paper presents the initial externality problem and describes the different ways which have been explored to enable cooperation through the paradigm of a non cooperative setting. Basically, all these approaches have tried to internalize the externalities using the game characteristics: the game outcomes, the size of the group, the game structure (e.g. repetition), the possibility of behavioral norms or the interdependency between an appropriation problem and a provision problem. Nevertheless, these approaches do not tackle the possibility of a negotiated change in the rules. The paper ends with some directions for future research.