I said in 2014, January 31st that “The spectre haunting our world now is the problem of collective action in addressing these systemic failures.” and going through the International Baccalaureate economics text recently, boy did I get an intellectual high from stumbling upon the works of Elinor Ostrom on addressing just that! — Bottom-up governance of the commons — tastefully served by the first woman to win the Nobel Prize in Economics no less.

Commons are typically natural resources, like fishing stocks, forests, and so forth are rivalrous but non-excludable goods; econo-speak for if I catch 100 fishes, there is now x-100 fishes left in the sea for others but it is very hard, if not impossible to monitor or deter other people from catching fish, leading to over-exploitation. I say that the problem of collective action is the pressing issue of our time, but there’s nothing contemporary about this really. According to Aristotle:

What is common to the greatest number gets the least amount of care. Men pay most attention to what is their own; they care less for what is common; or at any rate they care for it only to the extent to which each is individually concerned. Even when there is no other cause for inattention, men are more prone to neglect their duty when they think that another is attending to it.

The typical solution before Ostrom came along was for the government to intervene and impose property rights, her contribution was to point out that a third way is possible: between neglect and the Leviathan state, bottom-up organisation built on rules agreed upon by the community and shaped to cultural norms can ensure a sustainable and shared management of resources that also fulfills that with which economists are obsessed about: polycentric organisation is efficient!

But the details of that implementation matters. You want low costs of communication, you want relationships built on trust, you want conflict resolution to be local and public, amongst others. But I thought this was really, really cool – with this theoretical underpinning, you could sort of see the huge potential that local economies have to offer. Small is beautiful.

She offers 8 principles:

1. Define clear group boundaries.

2. Match rules governing use of common goods to local needs and conditions.

3. Ensure that those affected by the rules can participate in modifying the rules.

4. Make sure the rule-making rights of community members are respected by outside authorities.

5. Develop a system, carried out by community members, for monitoring members’ behavior.

6. Use graduated sanctions for rule violators.

7. Provide accessible, low-cost means for dispute resolution.

8. Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.

It kind of makes you wonder how do you go about establishing such mechanisms in a society marked by very little social trust (China comes to mind obviously), and what about cities in general, given that cities are typically the agglomeration of a body of strangers which can be marked by high social trust, but may be lacking in that shared sense of community. Hmmm.

This is all very befitting of the humble idea that you cannot save the world, interventions are specific to the times and the soil into which they were spawned. Such exercises in humility would make one immensely sceptical of grand designs and elaborate schemes because one reckons that humanity are not chess pieces to be shifted about at a moment’s notice; we have our rigidities, fallacies, whimsicalities and what one can best, most reasonably aspire for at the end of the day may simply be to do no harm… Which does not sound exciting at all. But yeah.

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