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Table of Contents

  1. Topic pack - Microeconomics - introduction
  2. 1.1 Competitive Markets: Demand and Supply
  3. 1.1 Competitive Markets: Demand and Supply - notes
  4. 1.1 Competitive markets - questions
  5. 1.1 Competitive markets - simulations and activities
  6. 1.2 Elasticities
  7. 1.2 Elasticities - notes
  8. Section 1.2 Elasticities - questions
  9. Section 1.2 Elasticities - simulations and activities
  10. 1.3 Government intervention
  11. 1.3 Government Intervention - notes
  12. 1.3 Government intervention - questions
  13. 1.3 Government intervention - simulations and activities
  14. 1.4 Market failure
  15. 1.4 Market failure - notes
    1. The meaning of externalities
    2. Types of externalities
    3. How do externalities affect allocative efficiency?
    4. Negative externalities of production
    5. Negative externalities of consumption
    6. The economic theory of traffic congestion
    7. Demerit goods
    8. Government responses - demerit goods
    9. Possible government responses to externalities
    10. Direct government provision
    11. Extension of property rights
    12. Taxes and subsidies
    13. Tradeable pollution rights
    14. Regulation, legislation and direct controls
    15. Positive externalities of production
    16. Positive externalities of consumption
    17. Merit goods
    18. Why might merit goods be underprovided by the market?
    19. Government responses - merit goods
    20. Public goods
    21. Common access resources & sustainability
    22. The tragedy of the Commons
    23. Common access resources in practice
    24. Sustainability
    25. Threats to Sustainability
    26. The threat to sustainability from the use of fossil fuels
    27. The threat to sustainability from poverty
    28. Government responses to threats to sustainability
    29. Cap and Trade Schemes
    30. Promoting Clean Technologies
    31. The 'dirty side' of cleaner technologies
    32. International responses to threats to sustainability
    33. Asymmetric information
    34. Abuse of monopoly power
    35. Inequality
  16. Section 1.4 Market failure - questions
  17. Section 1.4 Market failure - simulations and activities
  18. 1.5 Theory of the firm
  19. 1.5 Theory of the firm - notes (HL only)
  20. Section 1.5 Theory of the firm - questions
  21. Section 1.5 Theory of the firm - simulations and activities
  22. Print View

Common access resources in practice

In practice neither the state nor the market has been uniformly successful in solving common access resource problems.

Indeed, Hardin's Common's Theory has been criticised by a number of economists, not least by Elinor Ostrom the political economist and the 2009 Nobel Memorial Prize winner in Economic Sciences. Together with colleague Oliver E. Williams, Ostrom's analysed economic governance, especially those related to common access resources or 'the commons'.

Ostrom simulated conflicts concerning the allocation of the commons and derived a complex theoretical framework that went beyond the simple analysis of private costs and benefits. She focused on additional variables, such as community, leadership, trust and collaboration in resource sustainability and claimed it is not necessary to have a 'top-down' management system regulated by the state.

Ostrom's extensive research includes analysis of complex fishing systems in Nova Scotia, irrigation systems in the Philippines and Sri Lanka and groundwater usage in California. Her research results suggest that sustainability is possible if the users of resources collaborate to create democratically agreed, and adaptable, rules for the exploitation of common access resources, with community sanctions if these rules are broken. She argues that local communities make better decision about the use of community resources than governments or private organisations, because they have access to more information about the local context and are directly affected. Her conclusions are supported by empirical data showing that local-level monitoring of resources and community self-determination is effective in ensuring resource sustainability.

The following videos explain Ostrom's beliefs and report on her Nobel Prize award:

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Sustainable Development and the Tragedy of Commons

First woman to receive Nobel prize in economics

Other critics of Hardin's 'Tragedy of the Commons' analysis, focus on his proposal to transfer common goods into the hands of private owners. Professor Heller of the Columbia Law School, for example, coined the term 'Tragedy of the Anticommons' to describe a situation in which rational individuals, acting separately, collectively waste a common resource by under-utilising it. Heller believes that the existence of numerous private rights holders may frustrate the achievement of socially desirable outcomes. Supporters of this theory claim that too many property rights, such as patents, leads to reduced innovation. Competing patents in biomedical research illustrates a situation where useful and affordable products are prevented from reaching the market and adding to social welfare.