Common property in economics refers to a resource system, natural or manmade, that possesses characteristics that make it very costly, though not impossible, to exclude potential users from deriving benefits of the resource system even when such usage results in annihilation of the beneficial properties of the resource.
The commons problem arises as a result of each independent and rational person making an individual decision to maximize the benefits accrued from a common property. The overall effect of each individual action is the destruction of the common property; each individual action meant to safeguard personal interest results in an adverse effect to all the persons relying on the common property. It is this phenomenon that Hardin calls the “tragedy of the commons” (1244).
Hardin argues that the uncontrolled use of commons is bound to bear problems which negatively affect all, including those who may have made an individual effort to desist using the common property (1244). This occurs because every individual user of the common property will seek to exploit the property since there is a feeling that if he does not do so, others will exploit it before he does (Wade 220). If there is no control of the usage of the common property, then it will be overexploited and any physical or natural processes that enable the replenishment of the resource will be ineffective.
It is therefore important to develop ways and means of ensuring the controlled exploitation of common resources to ensure the prevention of destruction resulting from uncontrolled exploitation. Acheson (183) and Wade (219) have put forward proposals on the ways of ensuring the controlled use of common resources by observing the operations of lobstermen in the shores of the coast of Maine and the irrigation and the grazing schemes of Indian villages respectively.
Territoriality over the common property is one of the ways in which controlled use of the common property can be used (Acheson 187). Acheson argues that the development of well defined territorial boundaries over the common property enables the effective control over the resources. The exploitation of the common resource within such boundaries is controlled by small politically well arranged groupings in which the control of members is possible and consensus is easy. The existence of the boundaries also enables the “owners” of the territory to effectively repel any outsider incursions into their territory (Acheson 189). Acheson found out that those lobstermen who operated within such well defined boundaries recorded much higher yields than those who operated in common ocean territories that did not have such well defined boundaries. This was as a result of measures put in place by lobstermen to ensure the increased replenishment of the lobster population like trap limits and closed seasons.
Informal norms that limit the entry into the common property is also another way in which Acheson proposes can be used to control the exploitation of the common resource (187). In the Maine lobster industry, there exist harbor gangs, which are informal groups, of lobstermen who control particular areas of the ocean available for lobster catching. These gangs strictly control the entry into the lobster business and those who eventually gain entry have to fit into several acceptance criteria that are set by the lobstermen. This ensures that the number of individuals who exploit the common resource is controlled and remains at a level at which the complete annihilation of the resource is no possible.
Wade (221), under what he calls collective action, suggests the use of rules of restrained access under which individuals are allowed the use of the common property but under some well thought and previously agreed conditions. The exploitation of the resources is continued but under some supervision of a body appointed by the users of the common resource. Any disregard for the rules is met with a penalty and this deters any actions which may be detrimental to the collective good of the community using the common resource. Wade illustrates this by giving the example of the process of using irrigation water and grazing rights in Indian villages where allocation is supervised by the village council and enforced by guards appointed by the council.
State laws can be applied to ensure that the usage of common property does not result in the destruction of the common resources. Acheson (186) argues that these may not be applicable to all common resources. However, this does not mean that state laws do not play a role in the preservation of the common resources. Laws that limit the usage of common resources play a significant role in the prevention of complete annihilation of the common resource. Laws that govern the carapace length, protection of breeding females and licensing requirements are examples of laws in place to control the exploitation of the lobster industry in Maine.
A more radical approach to the control of the usage of common resources is suggested by Hardin (1247). He calls for the use of coercion to ensure the controlled and proper usage of common resources. Mutually agreed upon coercion can be used to ensure that there is a majority acceptance to laws set up to ensure the responsible use of common resources. He argues that there should be laws to govern population growth since allowing for uncontrolled population growth will result in the irreversible depreciation of resources. Tax laws are given as an example of mutually agreed coercion, and Hardin argues that laws based on the same principle will have a positive impact on the long run utilization of common resources. According to Harding, proper utilization of common property can be achieved by controlling the size of families.
In conclusion, it can be argued that that controlled and responsible use of common property can be achieved through the establishment of territoriality rules, use of informal norms to control entry into the usage of common property, collective action to restrain access, state laws and mutually agreed coercion. All these will have the effect of eliminating the commons problem since they are all geared towards ensuring that complete destruction of the common property does not occur.
Acheson, J. 1975. “The Lobster Fiefs: Economic and Ecological Effects of the Territoriality in the Marine Lobster industry”. Human Ecology 3:1-36.
Hardin, G. 1968. “Tragedy of the Commons”. Science, 162: 1243-1248.
Wade, R. 1987. “The management of Common Property resources: Finding a Cooperative Solution.” World Bank Research Observer 2.2, 219-234.