Beyond Markets and States: Polycentric Governance of Complex Economic Systems Elinor Ostrom Review and Commentary by Gary Lynne.

Beyond Markets and States: Beyond Markets and States: Polycentric Governance of Polycentric Governance of

Complex Economic SystemsComplex Economic Systems

Elinor OstromElinor Ostrom

Review and Commentary Review and Commentary

by Gary Lynneby Gary Lynne

Using Meteconomics framing (MEF), dual interest theory Using Meteconomics framing (MEF), dual interest theory (DIT), and dual motive modelIng (DMM) in interpreting, (DIT), and dual motive modelIng (DMM) in interpreting, commenting on this papercommenting on this paper

FRAMEWORK, THEORY, AND FRAMEWORK, THEORY, AND MODELMODEL

Alternative Economic Framing, Alternative Economic Framing, Theory and ModelTheory and Model

Metaeconomic Framing (MEF): “We Metaeconomic Framing (MEF): “We needs a Me to be, but without a Me needs a Me to be, but without a Me there is no We”there is no We”

Dual Interest Theory (DIT): Joint and Dual Interest Theory (DIT): Joint and nonseparable Self&Other-Interest nonseparable Self&Other-Interest giving rise to an Own-interestgiving rise to an Own-interest

Dual Motive Model (DMM): Egoistic-Dual Motive Model (DMM): Egoistic-Hedonistic and Empathy-Sympathy Hedonistic and Empathy-Sympathy based motivesbased motives

Self-interest Other(shared)-interest

Ego ‘n’ Empathy: ValueRational Choice (two interests)

Self-Control (Engagement)

Cognition (Intelligence)

Conscious

Affectivehedonism, “it feels good,” e.g.take more water, maximize profits and wealth

Affective“in sympathy with” e.g. share the water, act on the basis of how you would wish to be treated

Automatic (System 1: Subconscious, feelings; two emotional tendencies)

Neural Functioning in MEFNeural Functioning in MEF

Egocentric Empathetic

System 1

System 2

System 2

Metaecon 101 Metaecon 101 Dual Interest Theory (DIT)Dual Interest Theory (DIT)

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Social goods (e)

Private goods (d)

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Egoistic-hedonistic path 0G of self-interest

Empathetic-sympathetic” path 0M of other (shared)-interest

Integration, balance and synergyon a rational (including self-control) path 0Zof own(internalized)-dual interests (notice the bit of self-sacrifice in both domains...)

Metaecon has Empathy, and Self-control, at the Core of Economic Framing

Z

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pon/px

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Good n (services from a coral reef)

Good x (flow from materials and energy to produce good x, e.g. snorkeling equipment)

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“Peace of Mind” Means PursuingJoint Interests with a Bit of Sacrifice

Primary feature: A bit of sacrifice in both domains, when choosing the eco-path 0Z, seeking the joint own-interest

UM

2

Dual Interest Theory (DIT)Dual Interest Theory (DIT)

Using MEF, DIT and DMMUsing MEF, DIT and DMM

REVIEW OF THE PAPERREVIEW OF THE PAPER

IntroductionIntroduction

Draws on standard economic theory Draws on standard economic theory while building new theory to explain while building new theory to explain phenomena that does not fit the phenomena that does not fit the dichotomous world of “the market” and dichotomous world of “the market” and “the state” (p. 408)“the state” (p. 408)

Scholars shifting from the simple models Scholars shifting from the simple models to more complex, real models to more complex, real models

Institutional Analysis and Institutional Analysis and Development (IAD) FrameworkDevelopment (IAD) Framework

Calls for addressing the “complex motivational structures” (N: within the “I”) and developing “new theory” of human behavior

Once understood, then “establish diverse… institutional arrangements” that operate at “multiple scales” (N: multiple “We”) (p. 408)

Found that “isolated, anonymous” individuals (N: I-only) overharvest; even “cheap talk” helps (N: some We-influence) (p. 409)

Challenging presumptions that governments (N: We/Other-only) or markets (N: I/Self-only) always do a better job

Wants to focus attention on “trust” (p. 409) in a “more general theory of individual choice” (N: Likely not deep-enough; need to go to fundamental motives, the egoistic-hedonistic v. empathetic-sympathetic tendencies)

Historically, market was seen as an “optimal” institution (p. 409) for private goods (rivalrous) and “the” government (single governmental entity) for public (nonrivalrous) goods

For the latter, government had to impose rules and use taxes to force self-interest only individuals to temper their behaviors

Single governmental unit was to reduce Single governmental unit was to reduce the “chaotic” nature of governance… the “chaotic” nature of governance… increase efficiency, limit conflict among increase efficiency, limit conflict among governmental units, best serve a governmental units, best serve a “homogenous” view of the public (p. “homogenous” view of the public (p. 409)409)

Cites the Samuelson (1954) classification Cites the Samuelson (1954) classification of goodsof goods Private goods as rival and excludablePrivate goods as rival and excludable Public goods as nonrival and nonexcludablePublic goods as nonrival and nonexcludable

So, simple solutions:So, simple solutions: Market to deal with rival and excludable Market to deal with rival and excludable

goods (as microeconomics suggests)goods (as microeconomics suggests) Government to deal with nonrival and Government to deal with nonrival and

nonexcludable goods (as public good nonexcludable goods (as public good economics suggests)economics suggests)

And, perhaps most simplistic of all: And, perhaps most simplistic of all: Presumption of a fully rational consumer Presumption of a fully rational consumer and/or voter bringing this aboutand/or voter bringing this about

One Model of an IndividualOne Model of an Individual

Everyone fully rational … presumed in Everyone fully rational … presumed in mainstream economics and game mainstream economics and game theorytheory

Such an individual:Such an individual: Knows all possible strategiesKnows all possible strategies Outcomes from each strategyOutcomes from each strategy Rank order for each of these outcomes… Rank order for each of these outcomes…

know the utility (N: self-interest only utility)know the utility (N: self-interest only utility) So, rational individual maximizes utility (N: So, rational individual maximizes utility (N:

on path 0G; there is no path 0M, no We)on path 0G; there is no path 0M, no We)

Early Efforts…Fuller Understanding of Early Efforts…Fuller Understanding of Complex Human SystemsComplex Human Systems

Studying Public IndustriesStudying Public Industries Two models framework found inadequateTwo models framework found inadequate Proposed polycentricity… found a Proposed polycentricity… found a

diverse array of public and private diverse array of public and private entities providing public services could entities providing public services could be productive, not chaoticbe productive, not chaotic

Polycentric means “many centers of Polycentric means “many centers of decision making”… “formally decision making”… “formally independent* of each other” (p. 411)independent* of each other” (p. 411)

No essential need for a hierarchyNo essential need for a hierarchy

Found:Found: Small to medium sized cities more Small to medium sized cities more

effective than large citieseffective than large cities Dissatisfied citizens move to their Dissatisfied citizens move to their

preferred communitiespreferred communities Local incorporated communities can Local incorporated communities can

contract with larger producers of contract with larger producers of services, change contracts if not services, change contracts if not satisfied (while local areas within larger satisfied (while local areas within larger cities have no choice)cities have no choice)

Doubling the Types of GoodsDoubling the Types of Goods

Buchanan (1965) had already added Buchanan (1965) had already added “club goods” … private associations “club goods” … private associations to provide nonrival and nonexcludable to provide nonrival and nonexcludable (within the association) goods(within the association) goods

Ostrom and colleagues proposed:Ostrom and colleagues proposed: Using “subtractability of use” rather than Using “subtractability of use” rather than

“rivalry of consumption”“rivalry of consumption” Seeing this use and excludability on a Seeing this use and excludability on a

continuum rather than 0,1continuum rather than 0,1

……more types of goods (continued)more types of goods (continued) Added 4Added 4thth type: Common-pool… type: Common-pool…

subtractability like private goods and subtractability like private goods and difficulty of exclusion like public goods: difficulty of exclusion like public goods: Examples include forests, water Examples include forests, water systems, fisheries, global atmospheresystems, fisheries, global atmosphere

Changed name of “club” to “toll” Changed name of “club” to “toll” goods… due to many of these goods goods… due to many of these goods provided by small scale public as well as provided by small scale public as well as private associationsprivate associations

Four Types of Goods (p. 413)Four Types of Goods (p. 413) Subtractability

of Use

High Low

Difficulty of

High Common-pool: groundwater basins, lakes, irrigation systems, fisheries, forests, etc.

Public: peace and security of a community, national defense, knowledge, fire protection, weather forecasts, etc.

Excluding Low Private: food, clothing, automobiles, etc.

Toll: theatres, private clubs, daycare centers

Developing the IADDeveloping the IAD

Framework has a nested set of building blocks, Framework has a nested set of building blocks, recognizing need to go beyond two kinds of recognizing need to go beyond two kinds of goods, two kinds of institutions, and one kind of goods, two kinds of institutions, and one kind of individualindividual

Builds upon:Builds upon: Transactions (Commons, 1924)Transactions (Commons, 1924) Logic of the situation (Popper, 1961)Logic of the situation (Popper, 1961) Collective structures (Allport, 1962)Collective structures (Allport, 1962) Frames (Goffman, 1974)Frames (Goffman, 1974) Scripts (Schank and Abelson, 1977)Scripts (Schank and Abelson, 1977) Larger set of considerations in human behavior and Larger set of considerations in human behavior and

outcomes (Koestler, 1973; Simon, 1981, 1995)outcomes (Koestler, 1973; Simon, 1981, 1995)

““Nested” idea:Nested” idea: FrameworkFramework with most general set of variables, with most general set of variables,

with the “action situation” within itwith the “action situation” within it TheoriesTheories used to specify working parts of the used to specify working parts of the

framework, seeing several compatible theories, framework, seeing several compatible theories, including game theory, microeconomic theory, including game theory, microeconomic theory, transaction cost theory, public goods/common-transaction cost theory, public goods/common-pool resource theoriespool resource theories

ModelsModels make precise assumptions about the make precise assumptions about the motivation of actors and the structure of the motivation of actors and the structure of the situation they are insituation they are in

FrameworkFramework

Biophysical Conditions

Attributes of Community

Rules-in-Use

Action Situations Interactions

Outcomes

EvaluativeCriteria

External Variables

In specifying structure, theorist In specifying structure, theorist needs to posit (p. 415):needs to posit (p. 415):

1.1. Characteristics of the actors (e.g. Characteristics of the actors (e.g. motivations)motivations)

2.2. Positions held by actorsPositions held by actors

3.3. Set of actions actors can takeSet of actions actors can take

4.4. Amount of information actors haveAmount of information actors have

5.5. Outcomes that actors jointly affectOutcomes that actors jointly affect

6.6. Set of functions that map actors and Set of functions that map actors and actions at decision nodes into outcomesactions at decision nodes into outcomes

7.7. Benefits and costs related to actions and Benefits and costs related to actions and outcomesoutcomes

Rational Individuals Helplessly Rational Individuals Helplessly Trapped in Social Dilemmas?Trapped in Social Dilemmas?

Classic case of Prisoner’s Dilemma: Classic case of Prisoner’s Dilemma: Don’t have capabilities to solve this Don’t have capabilities to solve this problemproblem

Keep them apart, in the prison, will Keep them apart, in the prison, will “rat” on each other“rat” on each other

Solution always is: Government OR Solution always is: Government OR market (p. 416) under the presumption market (p. 416) under the presumption that the individuals are “without that the individuals are “without capabilities to change the structure capabilities to change the structure themselves” (p. 416)themselves” (p. 416)

Also presumes that individuals cannot Also presumes that individuals cannot solve the collective problem by themselvessolve the collective problem by themselves

So, have rational individuals trapped in So, have rational individuals trapped in social dilemmas (N: Fascinating, in that it is social dilemmas (N: Fascinating, in that it is presumed these individuals are not rational presumed these individuals are not rational enough, we might surmise, to analytically enough, we might surmise, to analytically solve the collective problem…but are solve the collective problem…but are rational enough to act in markets, or vote-rational enough to act in markets, or vote-in/bring-in the just right set of government in/bring-in the just right set of government structure and action)structure and action)

Scholars Examining this Scholars Examining this PropositionProposition

Scholars from diverse disciplines are Scholars from diverse disciplines are analyzinganalyzing

National Research Council brought together National Research Council brought together teamteam

Meta-analysis of common-pool resource Meta-analysis of common-pool resource casescases 47 irrigation systems, 40 percent high 47 irrigation systems, 40 percent high

performanceperformance farmer managed, over 70 percent high farmer managed, over 70 percent high

performanceperformance Fisheries …some high performance, tooFisheries …some high performance, too

On findings about rules, users had On findings about rules, users had created:created: Boundary rules for who could use the Boundary rules for who could use the

resourceresource Choice rules related to the allocation of the Choice rules related to the allocation of the

flow of resource unitsflow of resource units Active forms of monitoring and local Active forms of monitoring and local

sanctioning by the rule breakers (p. 419)sanctioning by the rule breakers (p. 419) Found no evidence of the “grim trigger” i.e. Found no evidence of the “grim trigger” i.e.

form of punishment suggested in theoryform of punishment suggested in theory

Bundles of Property RightsBundles of Property Rights Common pool resources in real world had Common pool resources in real world had

wide array of property ruleswide array of property rules Individuals found to have property rights Individuals found to have property rights

even when could not sell such rights (p. 419)even when could not sell such rights (p. 419) Drew on Commons (1924) who pointed to Drew on Commons (1924) who pointed to

“bundles” of rights“bundles” of rights Five property rights identified in the case studies:Five property rights identified in the case studies:

AccessAccess WithdrawalWithdrawal Management…right to transform, regulate internal useManagement…right to transform, regulate internal use ExclusionExclusion Alienation…right to lease or sell any of the other 4-rightsAlienation…right to lease or sell any of the other 4-rights

Linking Internal Parts: Linking Internal Parts: Seven External RulesSeven External Rules

1.1. Boundary: Specify how actors are chosen for the position, Boundary: Specify how actors are chosen for the position, entering and leaving sameentering and leaving same

2.2. Position: Specify a set of positionsPosition: Specify a set of positions

3.3. Choice: Actions assigned to an actor in a positionChoice: Actions assigned to an actor in a position

4.4. Information: Specify channels of communication among Information: Specify channels of communication among actors, and what is in the channelactors, and what is in the channel

5.5. Scope: Specify the outcomes that could be affectedScope: Specify the outcomes that could be affected

6.6. Aggregation: Individual choices map to larger, Aggregation: Individual choices map to larger, intermediate and final outcomesintermediate and final outcomes

7.7. Payoff: Specify how benefits and costs were to be Payoff: Specify how benefits and costs were to be distributed to actors or positionsdistributed to actors or positions

Design PrinciplesDesign Principles

Boundaries (p. 422):Boundaries (p. 422): User Boundaries: Clear and locally understood User Boundaries: Clear and locally understood

boundariesboundaries Resource Boundaries: “Clear boundaries that separate a Resource Boundaries: “Clear boundaries that separate a

specific common-pool resource from a larger social-specific common-pool resource from a larger social-ecological system”ecological system”

Congruence with local conditions: Congruence with local conditions: ““Appropriation and provision rules are congruent with Appropriation and provision rules are congruent with

local social and environmental conditions”local social and environmental conditions” ““Appropriation rules are congruent with provision rules; Appropriation rules are congruent with provision rules;

distribution of costs is proportional to the distribution of distribution of costs is proportional to the distribution of benefits”benefits”

Collective-Choice Arrangements: “Most Collective-Choice Arrangements: “Most individuals affected by a resource regime are individuals affected by a resource regime are authorized to participate in making and modifying authorized to participate in making and modifying its rulesits rules

Monitoring:Monitoring: Users: “Individuals who are accountable to or are the Users: “Individuals who are accountable to or are the

users monitor the appropriation and provision levels of users monitor the appropriation and provision levels of the users”the users”

Resource: “Individuals who are accountable to or are Resource: “Individuals who are accountable to or are the users monitor the condition of the resource”the users monitor the condition of the resource”

Graduated Sanctions: Start very low, but become Graduated Sanctions: Start very low, but become stronger if user repeatedly violates the rulestronger if user repeatedly violates the rule

Conflict-Resolution Mechanism: “Rapid, low-cost, Conflict-Resolution Mechanism: “Rapid, low-cost, local arenas exist for resolving conflicts among local arenas exist for resolving conflicts among users or with officials”users or with officials”

Minimal recognition of rights: “The rights of local Minimal recognition of rights: “The rights of local users to make their own rules are recognized by users to make their own rules are recognized by the government”the government”

Nested Enterprises: “When a common-pool Nested Enterprises: “When a common-pool resource is closely connected to a larger social-resource is closely connected to a larger social-ecological system, governance entities are ecological system, governance entities are organized in multiple nested layers” (p. 422).organized in multiple nested layers” (p. 422).

Design Principles SynthesizeDesign Principles Synthesize Ostrom argues these design principles Ostrom argues these design principles

(or “best practices” as she refers to them (or “best practices” as she refers to them in fn. 5) work “to synthesize core factors in fn. 5) work “to synthesize core factors that affect the probability of long-term that affect the probability of long-term survival of an institution” (p. 422)survival of an institution” (p. 422)

Around 2/3 of 100 cases showed that Around 2/3 of 100 cases showed that the “successes” were characterized by the “successes” were characterized by these principles (N: hypothesis has to be these principles (N: hypothesis has to be that empathy-sympathy was a more that empathy-sympathy was a more prominent force in these “success” prominent force in these “success” cases)cases)

Common Pool ExperimentsCommon Pool Experiments

Tested game theoretic models Tested game theoretic models consistent* with IADconsistent* with IAD

Could allocate tokens toward a Market 1 Could allocate tokens toward a Market 1 with a fixed return or a Market 2 which with a fixed return or a Market 2 which functioned like a common-pool resource functioned like a common-pool resource with returns affected by the actions with returns affected by the actions taken by everyone in the experiment (p. taken by everyone in the experiment (p. 423)423)

Subjects overinvested, even worse than Subjects overinvested, even worse than Nash equilibrium Nash equilibrium

Then, allowed communication, face-Then, allowed communication, face-to-faceto-face Provided opportunity for cheap talkProvided opportunity for cheap talk No external party ensured that the No external party ensured that the

promise would be fulfilledpromise would be fulfilled Opportunity for repeated face-to-face Opportunity for repeated face-to-face

communication was extremely communication was extremely successful in increasing joint returns (p. successful in increasing joint returns (p. 424)424)

Communication is key variableCommunication is key variable Communicate face-to-face, could find good Communicate face-to-face, could find good

outcomesoutcomes Enough communication to design own Enough communication to design own

sanctioning system, works even bettersanctioning system, works even better

Predictions of noncooperative game Predictions of noncooperative game theory work only without theory work only without communication (and then only communication (and then only roughly so)roughly so)

Field experiments gave similar results (p. Field experiments gave similar results (p. 425), in Columbia, over 200-users of 425), in Columbia, over 200-users of forests… both face-to-face and not, forests… both face-to-face and not, designs designs

Another experiment of different design: Another experiment of different design: Given chance to communicate face-to-Given chance to communicate face-to-face in the next round, after a baseline face in the next round, after a baseline set of experiments, finding that rule set of experiments, finding that rule forced behavior crowded out cooperative forced behavior crowded out cooperative choiceschoices

Public goods experiments, addressing Public goods experiments, addressing fishers in an open-access lake in fishers in an open-access lake in northeastern Brazil; found “other-northeastern Brazil; found “other-regarding* preferences” operantregarding* preferences” operant

Most if not all the experiments show that:Most if not all the experiments show that: More cooperation occurs than predictedMore cooperation occurs than predicted Cheap talk increases cooperationCheap talk increases cooperation Subjects invest in sanctioning free-ridersSubjects invest in sanctioning free-riders Motivational heterogeniety** in all casesMotivational heterogeniety** in all cases

More Field Studies NeededMore Field Studies Needed

Need field studies that use the IAD Need field studies that use the IAD framework to develop questionsframework to develop questions

Looked at irrigation studies in NepalLooked at irrigation studies in Nepal Found farmer managed irrigation systems Found farmer managed irrigation systems

to out perform other organizational forms to out perform other organizational forms (p. 427)(p. 427)

Government organizations performed Government organizations performed poorly relative to the farmer organizationspoorly relative to the farmer organizations

Same kind of findings in Japan, India and Same kind of findings in Japan, India and Sri LankaSri Lanka

Studying forests around the worldStudying forests around the world Looked at diverse forest governance Looked at diverse forest governance

arrangements in multiple countriesarrangements in multiple countries Favorite policy recommendation: Favorite policy recommendation:

Government owned, protected areasGovernment owned, protected areas Local monitoring, with some local rights to Local monitoring, with some local rights to

harvest, generally produces better harvest, generally produces better outcomes; governance has to match the outcomes; governance has to match the local conditions, and individuals at local local conditions, and individuals at local level need to be involvedlevel need to be involved

Current Theoretical Current Theoretical DevelopmentsDevelopments

Earlier theories of rational, helpless Earlier theories of rational, helpless individuals trapped in a dilemma: Don’t individuals trapped in a dilemma: Don’t hold up under scientific scrutiny (p. hold up under scientific scrutiny (p. 429)429)

Yet, cannot be overly optimistic the Yet, cannot be overly optimistic the dilemmas will always be solveddilemmas will always be solved

So, when will a group of individuals be So, when will a group of individuals be able to self-organizeable to self-organize

Need “better theoretical understanding Need “better theoretical understanding of human behavior” (p. 429)of human behavior” (p. 429)

More General Theory of the More General Theory of the IndividualIndividual

Frameworks like IAD organize diverse Frameworks like IAD organize diverse effortsefforts

Theories are efforts to build Theories are efforts to build understanding by making core understanding by making core assumptions about part of the system, assumptions about part of the system, making general predictionsmaking general predictions

Models used to predict behavior in a Models used to predict behavior in a particular situation, e.g. a rational choice particular situation, e.g. a rational choice model tends to work in a highly model tends to work in a highly competive market for private goodscompetive market for private goods

Scholars positing (as Ostrom sees Scholars positing (as Ostrom sees this) in three realms:this) in three realms: Capability of boundedly rational Capability of boundedly rational

individualsindividuals Use of heuristics in making daily Use of heuristics in making daily

decisionsdecisions Preferences that individuals have related Preferences that individuals have related

“to benefits for self as well as norms and “to benefits for self as well as norms and preferences related to benefits to others” preferences related to benefits to others” (p. 430)(p. 430)

Rules of thumb, heuristics, often usedRules of thumb, heuristics, often used Frequent interaction with others helps form Frequent interaction with others helps form

these heuristicsthese heuristics Shocks to a system, however, may not be Shocks to a system, however, may not be

well addressed this waywell addressed this way Individuals may also adapt, learn normsIndividuals may also adapt, learn norms

Strength of an internal commitment could Strength of an internal commitment could play a roleplay a role

Valuing outcomes achieved by others is Valuing outcomes achieved by others is another way to frame this phenomenonanother way to frame this phenomenon

……on norms (continued)on norms (continued) ““Inequity aversion” is one such “internal norm”Inequity aversion” is one such “internal norm” Individuals who regularly work in teams more Individuals who regularly work in teams more

likely to adopt norms, trust each other likely to adopt norms, trust each other Cannot just assume individuals will, however, Cannot just assume individuals will, however,

adopt norms, especially in situations with large adopt norms, especially in situations with large groupsgroups

Individual behavior is “strongly affected by the Individual behavior is “strongly affected by the context in which interactions take place” (p. context in which interactions take place” (p. 431)431)

Central Role of TrustCentral Role of Trust

Most efficient “mechanism” to Most efficient “mechanism” to enhance transactional outcomes enhance transactional outcomes (citing K. Arrow, 1974)(citing K. Arrow, 1974)

Yet, collective-action theory has Yet, collective-action theory has focused on payoffs, rather than trustfocused on payoffs, rather than trust

Ostrom points to studies that confirm Ostrom points to studies that confirm the role of trust*the role of trust*

Microinstitutional Level of Microinstitutional Level of AnalysisAnalysis

Asserting that context matters is not Asserting that context matters is not sufficient to task of explaining how and sufficient to task of explaining how and why individuals often solve social why individuals often solve social dilemmasdilemmas

Two contexts at work:Two contexts at work: Micro-context, and specific attributes of an Micro-context, and specific attributes of an

action situationaction situation Broader social-ecological context, system Broader social-ecological context, system

in which groups of individuals make in which groups of individuals make decisionsdecisions

Attributes* of micro-context include:Attributes* of micro-context include: Communication is feasible with the full Communication is feasible with the full

set of participantsset of participants Reputations of participants are knownReputations of participants are known High marginal per capita returnHigh marginal per capita return Entry and exit capabilitiesEntry and exit capabilities Longer time horizonLonger time horizon Agreed upon sanctioning capabilitiesAgreed upon sanctioning capabilities

Broader Context in the FieldBroader Context in the Field

Attributes of the social-ecological system Attributes of the social-ecological system (SES) need to be related to the (SES) need to be related to the microcontextmicrocontext

Individuals take actions that are affected Individuals take actions that are affected by and affect a resource system, resource by and affect a resource system, resource units, and the governance systemunits, and the governance system

More agreement about microinstitutional More agreement about microinstitutional variables (coming out of experimental variables (coming out of experimental studies) than about the SES variablesstudies) than about the SES variables

Several variables have been isolated:Several variables have been isolated: Size, productivity, predictability of a Size, productivity, predictability of a

resource systemresource system Extent of mobility of the resource unitsExtent of mobility of the resource units Existence of collective-choice rules that the Existence of collective-choice rules that the

users may adopt authoritatively “in order to users may adopt authoritatively “in order to change their own operational rules” (p. 434)change their own operational rules” (p. 434)

Four attributes of users: number, existence Four attributes of users: number, existence of leadership/entrepreneurship, knowledge of leadership/entrepreneurship, knowledge about the SES, importance of SES to usersabout the SES, importance of SES to users

Linking the broader contextual and Linking the broader contextual and microcontextual variables: major microcontextual variables: major task still facing scientists (p. 434)task still facing scientists (p. 434)

Complexity and ReformComplexity and Reform

Again, points to the simplistic solutions Again, points to the simplistic solutions that have been advocated by researchers: that have been advocated by researchers: Two organizational forms, two types of Two organizational forms, two types of goods, one model of the individualgoods, one model of the individual

Building trust is essential to solving social Building trust is essential to solving social dilemmasdilemmas

Policy analysts, public officials, and Policy analysts, public officials, and scholars using simple mathematical scholars using simple mathematical models have not absorbed the central models have not absorbed the central lessons learned herelessons learned here

All too often a simple policy All too often a simple policy prescription like an ITQ (individual prescription like an ITQ (individual transferable quota) is proposedtransferable quota) is proposed

Some ITQ systems are working, but Some ITQ systems are working, but only after many years of hard work only after many years of hard work by fishers and government officials, by fishers and government officials, to develop said system (p. 435)to develop said system (p. 435)

Most important finding:Most important finding: “…“…humans have a more complex humans have a more complex

motivational structure and more capability motivational structure and more capability to solve social dilemmas than posited in to solve social dilemmas than posited in earlier rational-choice theory” (p. 435)earlier rational-choice theory” (p. 435)

““Designing institutions to force (or nudge) Designing institutions to force (or nudge) entirely self-interested individuals to entirely self-interested individuals to achieve better outcomes has been the achieve better outcomes has been the major goal posited by policy analysts for major goal posited by policy analysts for governments…” (p. 435) governments…” (p. 435)

……findings…findings… “…“…core goal of public policy should be to core goal of public policy should be to

facilitate the development of institutions that facilitate the development of institutions that bring out the best* in humans” (p. 436)bring out the best* in humans” (p. 436)

Need to understand how diverse polycentric Need to understand how diverse polycentric institutions “help or hinder the innovativeness, institutions “help or hinder the innovativeness, learning, adapting, trustworthiness, levels of learning, adapting, trustworthiness, levels of cooperation of participants, and the cooperation of participants, and the achievement of more effective, equitable, and achievement of more effective, equitable, and sustainable outcomes at multiple scales” sustainable outcomes at multiple scales” (Ostrom’s words, but she cites Toonen, 2010)(Ostrom’s words, but she cites Toonen, 2010)

Need to be willing to deal with Need to be willing to deal with complexitycomplexity

Some (generally simplistic) Some (generally simplistic) mathematical models can be usefulmathematical models can be useful

When the simple models do not When the simple models do not work, “continue to improve our work, “continue to improve our frameworks and theories so as to be frameworks and theories so as to be able to understand complexity and able to understand complexity and not simply reject it” (p. 436)not simply reject it” (p. 436)