This document reviews literature on common property resources (CPR) and their management. It discusses that until recently, scholars believed community management of CPRs generated little value due to a lack of proper management. However, more recent literature critiques Hardin's "Tragedy of the Commons" argument and shows local institutional arrangements can overcome problems of overexploitation. The literature identifies three schools of thought on managing CPRs: private property rights, state control, and decentralized community management. Most recent research emphasizes the importance of efficient, equitable local institutional arrangements for sustainable CPR management.

1. International Indexed & Referred Research Journal, April, 2012. ISSN- 0975-3486, RNI-RAJBIL 2009/30097;VoL.III *ISSUE-31
Research Paper—Economics
Literature Review on Common Property Resources
(CPR) and It's Management
April, 2012 * M. Maheshwari
* Ph.d Research Scholar-Urumu Dhanalakshmi College (Autonomous), Trichy, Tamilnadu
Introduction property with open access, failing to distinguish be-
Ever since the publication of Hardin's articles tween collective property and no property (Ciriacy-
'The Tragedy of the Commons' there has been a grow- Wantrup and Bishop, 1975).
ing debate on common pool resources, property rights, Even the common grazing lands in Hardin's
and resource degradation. The concept has been used classic 'Tragedies of the Commons' were well looked
to explain overexploitation of forests and fisheries, after for many centuries, before they declined for rea-
overgrazing, air and water pollution, abuse of public sons unrelated to any inherent flaw in the commons
lands, population problems, extinction of species, and system (Cox, 1985). The tragedy tends to be related to
other problem of resource misallocation (Stevenson, the breakdown of existing commons systems due to
1991). When property rights to natural resources are disruptions that have originated externally to the com-
absent and unenforced i.e. when there is open access, munity (Berkes, 1989).
no individual bears the full cost of resource degrada- B. Analysis of Literature
tion. This study is an attempt to review the literature Recent literature on CPR management criti-
on Common Property Resources (CPR) and its man- cized "Hardin's Tragedy of the Commons" often re-
agement. sults, not from any inherent failure of common prop-
Ii. Literature on Common Property Resource (Cpr) erty, but from institutional failure to control access to
- An Analysis resources, and to make and enforce internal decisions
A. Brief for collective use. These critiques argue that Hardin's
Until recently many scholars believed that tragedy of commons' is applicable only to the situation
community-based management generates little or no of appropriation of 'open access resources' and not to
rent due to absent of proper management. As a conse- commons i.e. common property resources (Ciriacy-
quence scholars have long questioned the incentive Wantrup and Bishop, 1975; Bromley and Cernea,
for efficient use of common pool resources under CPR 1989). In case of open-access and unregulated com-
regime (Gordon, 1954; Scott, 1955; Hardin, 1968) mon property individuals do not get proper incentives
and solutions have been proposed, such as state con- to act in a socially efficient way. In the literature of
trol and management (Hardin, 1968) or privatisation common property broadly three different schools of
of the commons (Demsetz, 1964). The property rights thought have emerged on the institutional arrange-
school argues that private property is the most effi- ments to avert the tragedy of commons.
cient way to internalise the externalities that arise in According to property rights school the prob-
former cases. It also makes the contention that private lem of over exploitation and degradation of common
property rights will spontaneously emerge in reality to property resources (CPRs) can be resolved only by
increase efficiency (Demsetz, 1967). An increasing creating and enforcing private property rights
number of scholars, however, advocate that decentral- (Demsetz, 1967; Johnson, 1972; Smith, 1981; Cheung,
ized collective management of CPRs by their users 1970). Private property is considered to be the most
could be an appropriate system for overrating the 'trag- efficient way to internalise the externalities generated
edy of commons' (Berkes, 1989; Wade, 1989; Jodha, from over exploitation of the commons. The scholars
1986; Chopra et al. 1989; Ostrom, 1990, 1994). More of second school of thought advocate that only the
careful analysis of the foundation of CPR regimes in allocation of full authority to regulate the commons to
developing countries have shown that local institu- the external agency i.e. state property regime can re-
tional arrangements including customs and social duce the overexploitation of CPRs (Hardin, 1968).
conventions designed to induce cooperative solutions Institution building at the community level for man-
can overcome the collective action problem and help aging common-pool resources has emerged as a third
achieve efficiency in the use of such resources. (Gibbs possibility. An increasing number of scholars advo-
and Bromley, 1989; Ostrom, 1990). Scholarship on cate that decentralized collective management of CPRs
the commons argued that Hardin confused common by their users could be an appropriate system for over-
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2. International Indexed & Referred Research Journal, April, 2012. ISSN- 0975-3486, RNI-RAJBIL 2009/30097;VoL.III *ISSUE-31
rating the 'tragedy of commons' (Berkes, 1989; Wade, privatisation that is mainly responsible for the degra-
1987,1988; Jodha, 1986; Chopra et al., 1989, Ostrom, dation of CPRs. Chopra et al. (1989) in their study of
1990). Ostrom (1990) argues that collective action for Hariyana highlights the importance of participatory
CPR management will be long enduring and success- management in controlling the CPRs. They argue that
ful under conditions of well-defined boundaries, con- government's failure to preserve CPRs together with
gruence between appropriation and provision rules, their excessive exploitation for developmental activi-
graduated sanctions, efficient conflict-resolution ties has led to serious degradation of the environment
mechanisms and effective monitoring. Some recent with ecological repercussions. In a similar study in
literature, however, argues that property rights by them- North Western Himalayan region, Singh and Ram
selves do not provide adequate incentives and condi- (1997) argue that the success of a strategy for CPRs
tions for sustainable management. Appropriate cost- often depends upon local participation and institution.
benefit sharing arrangements, together with empow- Though assessing the impact of CPR institutions on
erment of resource users, technical assistance to de- environmental sustainability is extremely difficult,
velop and strengthen local organizational capacities, Meinzen-Dick et al. (1997) noted that property rights
and support equitable and sustainable management affect the time horizon for resource use, and incentive
efforts are examples of other essential elements. The for conservation, as well as for investment in improv-
success of the property rights regime depends upon the ing the resource. Most of these literature emphasized
congruence of ecosystem and governance boundaries, that efficient institutional arrangements are very im-
the specification and representation of interests, the portant in many common property resource manage-
matching of governance structures to ecosystem char- ment systems to ensure equity and sustainability of
acteristics, the containment of transaction costs, and resource management at the local level.
the establishment of monitoring, enforcement and Gibbs and Bromley (1989) noted that a well
adoption processes at the appropriate scale (Eggertsson, functioning common property regime will probably be
1990; Ostrom, 1990; Bromley, 1991; Hanna, 1992; distinguished by i) a minimum (or absence) of disputes
Hanna and Munasinghe, 1995). While the aggregate and limited effort necessary to maintain compliance,
gains from reducing common pool problems or pro- i.e. the regime will be efficient; ii) a capacity to cope
moting economic growth through the definition or with progressive changes through adaptation, such as
redefinition of property rights are unlikely to be con- the arrival of new production techniques, i.e. the re-
troversial, the distribution of wealth and political power gime will be stable; iii) a capacity to accommodate
inherent in the proposed rights structure will be a source surprise or sudden shocks, i.e. the regime will be resil-
of dispute (Libecap, 1989). ient; and iv) a shared perception of fairness among the
Restricting the access of poor people to natu- members with respect to inputs and outcomes, i.e. the
ral resources through changes in property rights struc- regime will be equitable.
ture in common-pool resources is likely to increase the CPR institutions serve a number of important
level of poverty unless specific measures of compen- economic functions like coordinating the formation of
satory transfer schemes are in place to safeguard the expectation, encouraging cooperation and reducing
interests of the most vulnerable section of the commu- transactions costs. The importance of transaction costs
nity. There seems no reason to suppose a priori that in any economic exchange is highlighted by many
institutions are always efficient and equitable and they scholars (Coase, 1960, Williamson, 1975, 1985;
serve the purpose that the institutions were created for. Cheung, 1983, North, 1990). Some economic and social
Consistent with growing theoretical literature, there science literature emphasises that homogeneity or
is enough empirical research in India dealing with heterogeneity among agents in any society reflects the
commons and the dependence of poor on the CPRs levels of trust, which influences the emerge of local
(Chen, 1991; Pasha, 1992; Jodha, 1985a, 1985b, 1986, management institutions through it's impact on costs
1990, 1995; Iyengar, 1997, 1989; Beck and Ghosh, of transactions. Transaction costs associated with trad-
2000; Beck, 1994, 1998; Agarwal, 1991, 1995, 1997; ing are reduced by an increase in levels of trust be-
Singh et al., 1996; Iyengar and Shukla, 1999). Jodha tween trading partners and the development of insti-
observed that rural poor are heavily dependent on CPRs tutions that provide incentives for lasting cooperation
for their livelihood. In a study of 21 districts of seven (Coleman, 1988; North, 1990; Ostrom, 1999;
States of India he found that the privatisation of CPRs Woolcock, 1988). Zak and Knack (2001) posit that
as a strategy to help the rural poor yielded a negative heterogeneous societies, especially those with weak
results and also reduce the productivity of the com- formal and informal institutions, have lower trust and
mons. Iyenger (1989) in his study of Gujarat, India has retarded economic performance than less heteroge-
observed that it is the population pressure induced neous, higher trust societies. Nonetheless, in many
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3. International Indexed & Referred Research Journal, April, 2012. ISSN- 0975-3486, RNI-RAJBIL 2009/30097;VoL.III *ISSUE-31
empirical studies, physical input and property rights hoods and sustainability of common property resources
are taken as variables and transaction costs of resource at the community level.
management seldom incorporated in the 'price' of re- III. Final Word
source consumption, though they can be a significant This literature research will add knowledge
component of resource use. Though the management on how common property institutions in managing
of CPRs and its implication to environment and pov- common pool resources influence the efficiency of
erty has been well studied in India, no systematic effort resource use, equity of resource distribution, empow-
has yet been undertaken in Nepal this regard. Some of erment and welfare of community members. More
the studies have only touched upon the issue of CPRs importantly, it will shed light on how community-
and role of common property institutions in regulat- based property rights regimes function in relation to
ing the access and conservation rules (Springate- human and their use of natural resources and its im-
Baginski et al., 2000; Malla, 2000) but no comprehen- plication for the sustainability of resource manage-
sive effort has been made to integrate the impact of ment.
local management institutions on rural local liveli-
R E F E R E N C E
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Seasonality and Calamity in Rural India". In E. Ahmad et al (eds.) Women's Participation". Development and Change, Vol. 28, pp: 1-44.
Social Securities in Developing Countries, Oxford University Press, 5. Andersen, K.E. (1995) "Institutional Flaws of Collective Forest
Oxford. Management". Ambio, Vol. 24 (6) pp: 349-53.
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