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Governance, institutions and common property resources

Economists place great emphasis on economic efficiency but this will not necessarily result in a fair outcome. For a society to be sustainable, its welfare should not be declining over time [WCED, 1987; Pezzey, 1989]. In theory there are potentially a number of efficient time paths which are sustainable. However, efficiency does not necessarily guarantee sustainability between say current and future generations in terms of the distribution of natural resources [Perman et al., 2003; Common and Perrings, 1992]. Governance and institutions have an important role to play in supporting sustainability. There are countless examples of projects and case studies that are economically efficient and sustainable but fail on the ground because they are unacceptable to communities for various reasons. Whilst economic tools are useful in providing critical insights into supporting sustainability they are not sufficient to guarantee sustainable outcomes. We recognize this and a number of our projects focus on how groups of farmers, fishermen and stakeholders from communities focus on decentralized forms of management and the formation of local institutions to address collective action problems. In this regard the role of governance, institutions, social capital is very important.

For some time now we have been working on common pool resource problems, particularly with regards to commonage in Ireland but also in developing countries. Here we draw and contribute to the commons literature.

Open access regimes have long been considered in legal doctrine as involving no limits on who is authorized to use a resource since no one has legal right to exclude anyone from using it (Bromley, 1991). This is the “tragedy of the commons” described by Hardin in his celebrated paper in 1968 (Hardin, 1968). Common pool resources represent an example of an open access regime since they are rival but non-excludible [Stevenson 1991]. If such a resource generates valuable products, then one can expect that the lack of rules regarding authorized use will lead to misuse and over-consumption (Ostrom, 2000). Common pool resources have two attributes of importance for economics activities: (a) it is costly to exclude individuals from using the good either through physical barriers or legal instruments; (b) the benefits consumed by one individual subtract from the benefits available to others (Adger and Luttrell, 2000; Ostrom 2000). Consequently these resources are subject to problems such as congestion, overuse and potential destruction unless some form of common property management regime is enforced. Indeed common property resources are seen to be inefficient by economists as they provide incentives which can lead to socially sub-optimal outcomes. Specifically there is evidence of a variety of issues such as rent dissipation, high transactions costs, high enforcement costs and low productivity. However, this depends on the prescence of an effective local institution. We follow up on this issue below.

One example of such a project includes commonages in Connemara. Commonage is an example of a common pool resource in Ireland. It represents an example of an institution that is caught between the history of a traditional society and a modern “efficient” society. Commonage dominates Ireland’s uplands and covers approximately half a million hectares and involves about 12,000 farmers in the Republic of Ireland (Bleasdale, 1995). It refers to land on which two or more farmers have grazing rights i.e. pasture rights held in common and has been described as a traditional form of land holding akin to a separate form of tenure (Lyall, 2000). Commonage is a product of agrarian reform, its evolution as a feature of the West of Ireland’s landscape and society is rooted in earlier systems of land tenure, where collective agriculture and the utilisation of common resources was common practice. Historically, commonage has been managed for livestock production, crops and hunting although today it is almost always grazed.

In terms of commonage, there are two issues of concern for ENRE researchers. The first deals with the institutional arrangements which govern the resource and which dictate the grazing management regimes used in commonage. Recent evidence indicates that grassland cover may be severely degraded due to intense grazing by domestic livestock (Bleasdale, 1995; Bleasdale and Sheehy-Skeffington, 1995). This can in part be shown as an example of the “tragedy of the commons” described by Hardin in his celebrated paper (Hardin, 1968). A dominant theme in the environmental and resource economics literature is the perception that private property rights are more likely to be consistent with the conservation of natural resources than common property rights. However, this perception has been modified by the recognition that it is the open access nature of many common property regimes, rather than the communal nature of such rights which affects sound natural resource management (Runge, 1986, Larson and Bromley, 1990). In the same vein, Beaumont and Walker (1996) showed that conditions exist under which private property does not necessarily lead to the best environmental outcome. From this body of the literature the notion emerged that common or communal property rights may actually encourage a higher level of conservation because they have a more direct dependence on the ecological services provided by natural resources, and hence a stronger interest in their conservation. (see, for instance, Runge, 1986; Taylor, 1987; Ostrom, 1990; Sandier, 1992; Bardhan, 1993; Baland and Platteau, 1996; 1997).

This particular theme is highly relevant in the context of commonage in Ireland in which examples occur where farming communities collectively manage the resource as common property as opposed to open access. There is evidence to suggest that commonage shareholders do co-operate, have developed informal local institutions with one another and implemented sustainable herd management regimes with optimal stocking levels and efficient output. The rundale system of land management represents an early informal institution whereby villagers complied with village laws as a means of regulating communal grazing, turbary and foreshore rights, and as an equitable arrangement of landholding (O’Loughlin, 1987; Whelan, 1997). Examples of these informal systems of management still exist under commonage. However little is known about the relationship between these institutions and the level of resource productivity or degradation.

The first aspect of research on commonage by ENRE researchers uses an original micro data set in order to evaluate the relationship between the exploitation of this common property resource and the way commonage is managed. It employs an econometric model to specify the relationship between commonage institutions, productivity and resource degradation and to assess the level of communal activity of the shareholders, mismanagement, and the degree of participation or democratic involvement in decision making processes by shareholders. An analysis of the role of commonage institutions has important policy consequences for the ongoing debate on non degrading property regimes.

Recreation values associated with commonage

The second question is concerned with the multifunctional nature of commonage and in particular the recreation value of the resource. Commonage is widely recognized as being of exceptional conservation and landscape value. Many commonages include Machairs which are listed as priority habitats because of the high plant species richness associated with these grassland ecosystems. This outstanding recreation interest has also given rise to increased demands for a wide range of recreation activities including hill walking, mountaineering, orienteering, mountain biking, and caravan/camping/picnic sites. However, conflict between land owners and the public with regards to access rights to commonage is of increasing concern to land managers and policy makers. These recreational and leisure pursuits have the potential to make a significant contribution to the rural economy and have led to speculation that they may be as important economically as output from livestock or crops. Given the current round of CAP reform under Franz Fischler, commonage framework plans and the increasing focus on rural development measures, this study takes on an added significance. Although non-market valuation has been applied in Ireland to a variety of recreation resources including forests and angling, the literature associated with public access to farmland in Ireland and in commonage in particular remains limited despite the widespread concern and enormous public interest in the resource. To calculate this actual economic worth of commonage to the farmer, to other users and therefore society as a whole, we will use financial and economic valuation techniques. These methods will also be used to measure the level of payments necessary to compensate land managers /local leisure facility developers to provide public access and to carry out the required improvements and maintenance to support this activity. Finally they will identify respondents preferences for different types of payment vehicle and different institutional mechanisms involved in providing public goods associated with commonage.

The management and stewardship of commonage areas in Connemara is complicated by the fact that most upland grazing is held as common property by communities created by the 1923 Land Act in Ireland. This feature makes setting up agri-environment contracts for environmental payment programs especially challenging, as it raises questions of local governance and collective action. We are addressing these problems in a joint program with the Department of Agriculture Fisheries and Food ( DAFF ) and Teagasc. We undertook a large survey of 280 farms that allow for the analysis of upland commonages in Connemara. Results from this research indicate that agri-environment schemes support cooperative efforts by farmers to conserve their land but direct price support does not. We are continuing this work with our DAFF project on REPS, commonage and biodiversity that will involve 500 farmers in the western seaboard. For more information about projects on environmental governance and common property see some of the publications below:

Enre’s staff and colleagues involved in these projects:

Enre publications on governance, institutions and common property resources

ENRE
This page was last updated Monday, July 05, 2010