Elinor Ostrom, Institutions and



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5.0 Concluding Comments

The five most important insights for the global commons from the Ostrom research program, institutional analysis and development framework and eight design principles are as follows.



  1. The tragedy of the commons is not inevitable for either local CPRs or the global commons, but simple and simplistic governance systems based solely on privatization, markets and state ownership and control are not the answer.



  1. Instead, solutions to local common-pool resource dilemmas and the global commons require complex polycentric governance systems – which are developed, expand and evolve through time by means of learning by doing, learning by monitoring and extending key insights and lessons to related resource and non-resource CPRs at the same or different geographic and other scales (see Appendix A).



  1. These polycentric governance solutions: are nonhierarchical and encompass and empower multiple independent decision-makers who interact, work and learn together to achieve commonly valued objectives and outcomes; are based on the superior knowledge of local resource harvesters and other stakeholders as well as cooperation, shared learning and “mental models”, trust, reciprocity of trust, and social norms and preference; would never be identified through applying conventional economic, political science, law and economics, regulatory and other models based on perfect information, rationality, self-interest and will-power; and therefore are “better than rational” (see Appendix B).



  1. As pointed out by climate change and other global CPR dilemmas, the major challenge to extending the Ostrom framework to the global commons is to identify and implement polycentric governance solutions, which allocate costs and benefits in a manner that is consistent with social norms and is deemed to be fair and equitable by all contributors, beneficiaries and participants.



  1. The role of governments and international organizations is to provide encouragement, support and facilitation to non-government CPR governance initiatives and to make public investments in science, technology, product, process, organizational and governance innovations, and other public goods, which are needed to enhance the productivity, efficiency, fairness and sustainability of common-pool resource production, consumption and distribution.

Appendix A: Extending the Ostrom Analytical Framework to

Non-Resource Common-Pool Resources (CPRs)

As noted in the main text, recent research and articles on governance and regulation have explicitly or implicitly extended the Ostrom CPR model comprised of:



  1. inputs/inflows, resource stocks and outputs/outflows,

  2. the interactions between inflows, stocks and outflows when e.g. appropriators, consumers and other beneficiaries are also contributors to the inflows (leading to “co-production”);

  3. the risks of stock depletion and “pollution” because of non-contributions, free riding, opportunism, shirking, and other non-cooperative behaviour by beneficiaries; and,

  4. polycentric governance systems that can often include individual (private) property rights, common/shared (private) property rights and/or public property rights (government control and ownership) within the same governance system;

to policy, regulatory and other non-resource governance systems and regimes.

In all of these non-resource CPRs, governance success depends to an important degree on the extent to which the benefits (outflows) to “appropriators”, consumers and other beneficiaries are appropriately aligned with their contributions (inflows), fairness and equity considerations, and other social norms and ethical values that are important to the CPR group.

These extensions therefore illustrate that the common-pool resource concept of Ostrom can be extended to formal and informal regulatory and governance systems and related “action situations” of various kinds including:


  1. the formal and informal governance systems of companies, business groups, networks and ecosystems, national and global supply chains, and the Internet;

  2. cross-border contracts and contractual relationships that facilitate international trade;



  1. the formal and informal institutions that facilitate market efficiency and fairness, as captured in new institutional economics and the economic sociology literature on the social structure of markets;

  2. reputation management within an industry or market because of reputational interdependence and positive and negative reputational spillovers from one company to another;



  1. global epistemic communities and public policy and administration networks;

  2. the knowledge commons which treats information as a common-pool resource; and,

  3. the management of condominiums and similar commercial arrangements that e.g. can often involve a mix of individual, common/shared and public property rights.

The conjecture of the authors, which requires much greater theoretical and empirical research and integrated policy analysis using the Ostrom IAD and SES frameworks, is that governance of the global commons and related “super wicked” problems will often require more attention to non-resource common-pool resources and the complex linkages, interactions and feedback effects between resource and non-resource CPRs, which:

  1. in some contexts can facilitate and make more robust and sustainable global governance regimes e.g. because of the potentially higher commercial, reputational and other payoffs that can be generated by business networks and ecosystems, supply chains and other non-resource CPRs; and,



  1. in other contexts, can impede the protection and governance of the global commons, because of e.g. the greater challenge of developing consensus on core values, beliefs, interests, incentives and objectives when the number and diversity of participants, groups and CPRs to be protected expands.2

Appendix B: Multi-Disciplinary CPR Analysis for Identifying Polycentric Governance Solutions

The Ostrom research program has emphasized the importance of examining and finding solutions to local and global CPR problems and that such solutions are available and have been successful in many different contexts in developing and more advanced economies. This requires however that analysts and organizations go beyond the more conventional benefit-cost, microeconomic, macroeconomic and related economic, social and political analysis techniques.



CPR examinations and solutions using the IAD framework require analytical tools that:

  1. are multidisciplinary and comprehensive and encompass all market participants, CPR members, users and beneficiaries, members of society, spatial scales, and formal and informal governance systems and institutions;

  2. employ methodological pluralism approaches that e.g. combine the best features of qualitative (e.g. individual case studies and meta-analyses of completed case studies), quantitative and experimental research methods, and of inductive and deductive methods;

  3. presume disequilibrium in order to learn from situations where markets, systems and other entities are not in equilibrium and perhaps never will be in equilibrium or at least will not approach equilibrium for the foreseeable future;

  4. use cooperative and non-cooperative game theory that takes account of frequent interactions, information asymmetries and other information failures, behavioral attributes and biases, social norms, and individual and organizational preferences for equity, fairness, cooperation and ethical conduct; and,

  5. apply risk based dynamic simulation and related more dynamic approaches including behavioral, adaptive learning and evolutionary theories and models in order to e.g. identify the disturbances and external shocks that have the strongest impacts on CPRs and social-ecological systems through time (Ostrom and Cox 2010:9).

These multidisciplinary and pluralistic methodologies and approaches would take full account of:

  • Inputs, inflows and investments in common-pool resource and related stocks, the outputs/outflows that are generated from these stocks, and the interactions between inflows, stocks and outflows.



  • Actions, outcomes and positive and negative externalities, demonstration and feedback effects occurring at all spatial scales from the local through to the national, continental and global.

For example, while climate change is a global CPR dilemma, actions by governments and non-government groups at the local, city and sub-national region levels can result in substantial reductions in greenhouse gas emissions and generate bottom-up climate change awareness, learning and consensus across stakeholders that can support climate change mitigation and adaptation strategies at the same and higher spatial scales (Ostrom et al 2012:86-87, Levin et al 2012, Divecha 2009 and Dietz et al 2003).

  • The extrinsic (largely negative) and intrinsic (largely positive) motivations, incentives and beliefs of individuals, companies and other organizations – including reputation effects, interdependence and spillovers -- that, in many contexts can result in contributions to CPR governance and public goods and compliance with regulations, rules and social norms that often go beyond formal regulatory requirements and expectations (see e.g. Bénabou and Tirole 2006, 2007, 2010a and 2010b, King et al 2002 and Barnett and Hoffman 2008);



  • Network, interactive, cumulative, non-linear, cross-scalar, and feedback effects and consequences -- including between parameters that appear unrelated when conventional tools and models are used.

And the additional risks, ambiguities and complexities, including the higher probability of catastrophic events, which arise when natural and human systems are “coupled together” into complex common-pool resource and social-ecological systems that encompass multiple geographic scales, sectors and markets.

  • Expanding on the previous point, events, trends, interactions and relationships that appear to be less obvious and consequential and to be unrelated and counterintuitive when market, resource and other systems are presumed to be in equilibrium – but which over an extended period of time and through aggregation, interaction and cumulative and feedback effects can become highly interrelated and reach a tipping point with substantial negative consequences for the global commons.



  • Limitations of highly technocratic market, efficiency and “rational agent” based policy, legal, and regulatory approaches and solutions (as proposed e.g. by the “new public management” advocates) when CPR and related social dilemmas are complex, multi-tiered, multi-jurisdictional and “super wicked”.



  • The important differences and their implications for the global commons between the more advanced OECD economies and developing and emerging market economies with respect to for example: (i) trajectories and stages of economic, social political and institutional development; (ii) importance and effectiveness of formal versus informal rules, institutions and governance systems; (iii) protection and clarity of private, public, common and other property rights; (iv) provision of public goods; (v) enterprise culture, management and governance; and (vi) social and political capital and business-government relations.



  • The role that information asymmetries and related information challenges, social preferences and norms, trust and reciprocity, behavioral biases, and heuristics/rules of thumb can play in many but not all contexts in generating CPR and related conduct, decisions and outcomes that are “better than rational” and that would never be predicted or even identified by conventional economic, political science, law and economics, regulatory and other models based on perfect information, rationality, self-interest and will-power.

Perhaps most important, future research would need to address and fully understand the highly complex, diverse and “polycentric” governance systems that will be needed to manage global common-pool resources, social-ecological systems, and other global social dilemmas and super wicked problems. In some contexts, these polycentric governance systems would need to encompass:

  1. private entrepreneurship and innovation and market institutions, incentives, disciplines, transactions and relationships in some sub-systems;

  2. public sector entrepreneurship and innovation and government rules, regulations, institutions, incentives and disciplines in other sub-systems;

  3. the quality of institutional linkages between different but related CPR management schemes within broader social-ecological systems (SES), which cut across geographic scales and multiple tiers;

  4. and the many informal governance regimes and “action situations” of companies, business groups, networks and ecosystems, local resource groups and other neighborhood and community groups, local, national and multi-national civil society groups, epistemic communities, and public policy and administration networks;

  5. which lie between and fill in the gaps between the market and the state, mitigate market and government failures, and address and solve the CPR and related problems that markets, governments and multi-national organizations cannot effectively address on their own.

Examining and finding solutions to local and global CPR and SES challenges and dilemmas would also address how individuals and organizations actually behave, and how their attitudes, beliefs and conduct can change through time because of: (i) the penalties applied to free-riders and non-contributors; (ii) the expanding risks and threats that result from CPR depletion; (iii) CPR successes at the neighborhood and local community scales that are then imitated and replicated elsewhere; (iv) the cues, frames, default options, codes of conduct and lock-in effects provided by formal and informal institutions including social norms; (v) stakeholder engagement in making improvements to the formal and informal rules that make them fairer and more informative, transparent, effective, and empowering; and (vi) other time sensitive and dynamic parameters noted in the Ostrom, super wicked problem and related literatures (see e.g. Levin et al 2012).

References and Selected Bibliography

In preparing this paper, the authors reviewed a very large number of books, articles, and working papers that were authored and co-authored by Elinor Ostrom, her colleagues, and by other scholars whose research is also important to examining and finding solutions to common-pool resource dilemmas and to governing the global commons. The references and selected bibliography emphasize those documents that are more recent and are deemed to be most important to extending the Ostrom legacy to the global commons. A more extensive bibliography is available from Derek Ireland at djirel@sympatic.ca

Agrawal Arun, Daniel G. Brown, Gautam Rao, Rick Riolo, Derek T. Robinson, and Michael Bommarito (2013) “Interactions between organizations and networks in common-pool resource governance” Environmental Science and Policy 25(1) January 2013 pp. 138-146

Aligica Paul Dragos and Peter Boettke (2009) Challenging Institutional Analysis and Development: The Bloomington School New York: Routledge

Aligica Paul Dragos and Peter Boettke (2011) “The Two Social Philosophies of Ostroms’ Institutionalism” The Policy Studies Journal, Vol. 39, No. 1, pp. 29-49

Aligica Paul Dragos and Vlad Tarko (2012) “Polycentricity: From Polanyi to Ostrom, and Beyond” Governance: An International Journal of Policy, Administration, and Institutions, Vol. 25, No. 2, April 2012 (pp. 237–262)

Alt James E., Margaret Levi, and Elinor Ostrom Editors (1999) Competition and Cooperation: Conversations with Nobelists about Economics and Political Science, New York: Russell Sage Foundation

Barnett, Michael L. and Andrew J. Hoffman (2008) “Guest Editorial; Beyond Corporate Reputation: Managing Reputational Interdependence” Corporate Reputation Review 11(1), 1 – 9

Bénabou Roland and Jean Tirole (2003) “Intrinsic and Extrinsic Motivation” The Review of Economic Studies, Vol. 70, No. 3 (July 2003), pp. 489-520

Bénabou Roland and Jean Tirole (2004) “Incentives and Prosocial Behaviour” Mimeo This Version August 19 2004

Bénabou Roland and Jean Tirole (2005) “Belief in a Just World and Redistributive Politics” Working Paper 11208 http://www.nber.org/papers/w11208 NBER Working Paper Series National Bureau Of Economic Research 1050 Massachusetts Avenue Cambridge, MA 02138 March 2005

Bénabou Roland and Jean Tirole (2006), “Incentives and prosocial behavior”, American Economic Review 96(5), 1652-1678

Bénabou Roland and Jean Tirole (2007) “Identity, Dignity and Taboos: Beliefs as Assets” Centre for Economic Policy Research CEPR Discussion Paper Co. 6123 February 2007

Bénabou Roland and Jean Tirole (2010a) “Identity, Morals and Taboos: Beliefs as Assets” This Version June 2010 Forthcoming in the Quarterly Journal of Economics

Bénabou Roland and Jean Tirole (2010b) “Individual and Corporate Social Responsibility” Economica 77(305):1-19

Bergstrom Theodore C. (2010) “The Uncommon Insight of Elinor Ostrom” Department of Economics University of California Santa Barbara March 26, 2010 http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/readings/OstromSJ.pdfOstrom, Elinor, (1990) Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge UK, Cambridge U. Press

Birner Regina and Heidi Wittmer (2003) “Using Social Capital to Create Political Capital: How Do Local Communities Gain Political Influence? A Theoretic Approach and Empirical Evidence from Thailand” in Dolsak, Nives and Elinor Ostrom Editors, The Commons in the New Millennium: Challenges and Adaptation, The MIT Press, Cambridge Mass, and London England

Blomquist William and Peter deLeon (2011) “The Design and Promise of the Institutional Analysis and Development Framework” The Policy Studies Journal, Vol. 39, No. 1 pp. 1-6

Bokor Charles Villanyi (undated) “Detecting and Managing Wicked Projects” The CERP (Continuous Enterprise Resource Planning) Group Ottawa Canada

Bowles, S. (1998) “Endogenous Preferences: the Cultural Consequences of Markets and Other Economic Institutions”. Journal of Economic Literature, Volume 36 (March), pages 75-111.

Bowles, S., and H. Gintis (1998) “The Moral Economy of Communities: Structured Populations and the Evolution of Pro-Social Norms” Evolution and Human Behavior 19(1):3-25

Bowles, S., and H. Gintis (2002) “Social Capital and Community Governance” The Economic Journal 112 (November): 419-436Bushouse Brenda K. (2011) “Governance Structures: Using IAD to Understand Variation in Service Delivery for Club Goods with Information Asymmetry” The Policy Studies Journal, Vol. 39, No. 1, pp. 105-119

Bray David (2013)From Mexico, Global Lessons for Forest Governance” Published on Solutions (http://thesolutionsjournal.anu.edu.au) Volume 4: Issue 3: June 25, 2013

Brock, William A., and Stephen R. Carpenter (2007) “Panacea traps, escape routes and diversification of environmental policy” Working paper Madison: University of Wisconsin

Cardenas Juan-Camilo and Elinor Ostrom (2004) “What do people bring into the game? Experiments in the field about cooperation in the commons” Agricultural Systems 82 (2004) 307–326

Castillo Daniel and Ali Kerem Saysel (2005) “Simulation of common pool resource field experiments: a behavioral model of collective action” Ecological Economics 55 420– 436

Chhatrea Ashwini and Arun Agrawal (2009) “Trade-offs and synergies between carbon storage and livelihood benefits from forest commons” PNAS (Proceedings of the Academy of Sciences) 106(42): 17667-1770

Cox, Michael (2010) “Exploring the dynamics of social-ecological systems: the case of the Taos valley acequias” Ph.D. dissertation, Indiana University, Indiana, USA

Cox, Michael, Gwen Arnold, and Sergio Villamayor-Tomás (2009), “A Review and Reassessment of Design Principles for Community-Based Natural Resource Management,” submitted to Ecology and Society

Cox, Michael, Gwen Arnold, and Sergio Villamayor-Tomás (2010), “A Review of Design Principles for Community-Based Natural Resource Management,” Ecology and Society 15(4): 38

Dietz, T., E. Ostrom and P. C. Stern (2003) “The struggle to govern the commons” Science 302 (5652):1907-1912

Durant Robert F. and Jerome S. Legge Jr. (2006) ““Wicked Problems,” Public Policy, and Administrative Theory: Lessons from the GM Food Regulatory Arena” Administration & Society, Vol. 38 No. 3, July 2006 309-334

Dietz Thomas, Elinor Ostrom, and Paul C. Stern (2003) “The Struggle to Govern the Commons” Science, New Series, Vol. 302, No. 5652 (Dec. 12, 2003), pp. 1907-1912 Published by: American Association for the Advancement of Science

Divecha Simon (2009) “Common Pool Resource Principles and Development in Business Responses to Climate Change” A paper for the Workshop on the Workshop conference (WOW 4) - Cognition and Norms session June 2009

http://www.indiana.edu/~wow4/papers/divecha_wow4.pdf

Dobson Paul W. (2006) “Competing, countervailing and coalescing forces: the economics of intra- and inter-business system competition” Antitrust Bulletin 51(1) Spring 2006 175-193

Dolsak, Nives and Elinor Ostrom Editors (2003), The Commons in the New Millennium: Challenges and Adaptation, The MIT Press, Cambridge Mass, and London England

Escotet Foundation (2011) “Interview with Nobel Laureate Elinor Ostrom” http://escotet.org/2010/11/interview-with-nobel-laureate-elinor-ostrom/

Farrell Joseph (2006) “Complexity, Diversity and Antitrust” Antitrust Bulletin 51(1) Spring 2006 165-173

Fehr, Ernst and Simon Gachter (2000) “Cooperation and Punishment”, American Economic Review, Vol. 90 (4), September, pages 980-994

Fehr, Ernst and Simon Gächter (2002), “Altruistic Punishment in Humans,” Nature, 415, 137–140

Fehr, Ernst and Urs Fischbacher (2002) “Why Social Preferences Matter – The Impact of Non-Selfish Motives on Competition, Cooperation and Incentives”, The Economic Journal, 112 (March), 2002, C1-C33

Fitzpatrick, Daniel (2006) “Evolution and Chaos in Property Rights Systems: The Third World Tragedy of Contested Access” Yale Law Journal 115 (March 2006): 996–1048

Ford Cristie (2012) “Prospects for Scalability: Relationships and Uncertainty in Responsive Regulation” Jerusalem Papers in Regulation & Governance Working Paper No. 43 Forthcoming in Regulation and Governance 2012

Frank, Robert H. and Ian C. Parker (2002), Microeconomics and Behaviour (First Canadian Edition), McGraw-Hill Ryerson, in particular Chapter 7

Fraser D. G. and Andrew Rimas (2010) Empires of Food: Feast, Famine, and the Rise and Fall of Civilizations New York: Free Press

Furubotn Eirik G. and Rudolf Richter (2008) “The New Institutional Economics – A Different Approach to Economic Analysis” The Economic Analysis of Institutions, Institute of Economic Affairs September 2008 pp. 15-23

Gardner Roy, Elinor Ostrom and James M. Walker (1990) “The Nature of Common-Pool Resources” Rationality and Society July 1990 2(3): 335-358

Gardner Roy and Elinor Ostrom (1991) “Rules and Games” Public Choice 70:121-149

Haas Peter M. (1992) “Introduction: epistemic communities and international policy coordination” International Organization 46(1) Winter 1992

Hardin, G. (1968) “The tragedy of the commons” Science 162(3859): 1243–1248

Hayashi Nahoko. Elinor Ostrom, James Walker and Toshio Yamagishi (1999) “Reciprocity, Trust, and the Sense of Control: A Cross-Societal Study” Rationality and Society February 1999 11: 27-46 doi:10.1177/104346399011001002

Head Brian W. and John Alford (2008) “Wicked Problems: The Implications for Public Management” Panel on Public Management in Practice International Research Society for Public Management 12th Annual Conference 26-28 March, 2008, Brisbane

Head Brian W. and John Alford (2013) “Wicked Problems: Implications for Public Policy and Management” Administration & Society First Published on March 28 2013

Heikkila Tanya, Edella Schlager, and Mark W. Davis (2011) “The Role of Cross-Scale Institutional Linkages in Common Pool Resource Management: Assessing Interstate River Compacts” The Policy Studies Journal, Vol. 39, No. 1, pp. 121-145

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Hess Charlotte and Elinor Ostrom (2003) “Ideas, Artifacts, and Facilities: Information as a Common-Pool Resource” Law and Contemporary Problems Vol. 66:111-145 Winter/Spring 2003

Hess Charlotte and Elinor Ostrom Ed. (2007) Understanding Knowledge as a Commons: From Theory to Practice The MIT Press, Cambridge Massachusetts and London England

Hoffman Robert (2010) “A Cybernetic Approach to Economics” Cybernetics and Human Knowing Vol. 17, no. 4, pp. 89-97

Hoffman Robert (2012) “On the Need for New Economic Foundations: A Critique on Mainstream Macroeconomics” Cadmus 1(5) October 2012 pp. 74-85

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Iansiti Marco and Gregory L. Richards (2006) “The information technology ecosystem: structure, health and performance” Antitrust Bulletin 51(1) Spring 2006 77-110

Ireland Derek (2008) India’s Competition Regimes and Informal Business Institutions: Interaction, Conflict and Accommodation PhD Dissertation, School of Public Policy Carleton University, Ottawa Canada December 2008

Ireland D., E. Milligan, K. Webb and W. Xie (2011) “Regulatory Agency Budget Cuts: Public Interest Support Through a Better Approach” in G. Bruce Doern and Christopher Stoney, Editors, How Ottawa Spends 2011-2012: Trimming Fat or Slicing Pork (Montreal and Kingston: McGill Queen’s University Press)

Ireland D., E. Milligan, K. Webb and W. Xie (2012) “Rise and Fall of Regulatory Regimes: Extending the Life-Cycle Approach” in G. Bruce Doern and Christopher Stoney, Editors, How Ottawa Spends 2012-2013 (Montreal and Kingston: McGill Queen’s University Press) (Forthcoming in Spring 2012)

Ireland D. and K. Webb (2010) “Chapter 5: The Canadian Escape from the Subprime Crisis? Comparing the U.S. and Canadian Approaches” in G. Bruce Doern and Christopher Stoney Editors How Ottawa Spends 2010-2011: Recession Realignment and the New Deficit Era Montreal and Kingston: McGill Queen’s University Press 87-108

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http://faculty.darden.virginia.edu/LenoxM/pdf/isr_theory1.pdf

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Ostrom, Elinor (2006b)


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