Tuesday, October 13, 2009

Tragedy of the Commons

When we teach property rights, we often spend time discussing "the tragedy of the commons" - the idea that everyone's property is nobody's property. And a significant number of us use the example of the English village first put forth by Garrett Hardin in his 1968 work.

Back in June, there was a very good article in The National Interest on the problem of the tragedy of the commons (HT to Arts and Letters Daily). In it, the author discussed a couple of ways to avert the problem. The one he favord was the establishment of an institutional structure that will foster incentives to take care of common areas.

Elinor Ostrom, one of the winners of this year's Nobel Prize for Economics has done some of the most significant research on this problem, including how groups create voluntary institutions that provide incentives. And in that, she was a leader in the field of institutional economics.

There are two articles from Forbes magazine that provide more background on the work of
Dr. Ostrom. This one by regular contributor Elisabeth Eves, and this one by Vernon Smith, also a winner of the Nobel Prize in Economics. I hope you find these resources enlightening. (I did.) And I think they provide some information and point toward other information that teachers can use when discussing property rights and paradox of "everyone's property is nobody's property."

I look forward to your comments.

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