Chapter15%20CPR-10 - de Janvry and Sadoulet Chapter 15...

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de Janvry and Sadoulet 1 11/11/10 Chapter 15 Management of Common Property Resources and Determinants of Cooperation Revised November 10, 2010 I. Why are there common property resources? Property rights are defined in terms of five cumulative rights: Access, Extraction, Management, Exclusion, and Transfer or alienation (sale). For these rights to matter, they have to be enforced. Open access resources offer users only two rights: access and extraction. Common Property Resources (CPR) give community members the rights of access, extraction, management, and exclusion. Under CPR, the services of a resource such as fishing, grazing of animals, and the extraction of firewood or lumber from a forest are (1) excludable collectively (non-members are excluded, but members cannot be excluded), and (2) rival in use. CPR can thus be compared to private and open access resources in that they are rival; and they can be compared to club goods in that they are collectively excludable (Figure 1). Definition of types of goods Rival Non-rival Acces rules Excludable Individually Private good Collectively Common property resource Club good Non-excludable Open access resource Public good Use rules Take home messages for Chapter 15 1. Common Property Resources (CPR) yield products or services that are rival in use and collectively excludable in access. They can suffer from over-extraction from the resource and under-provision of maintenance services if there is no effective cooperation in management among members. Effective cooperation in management is necessary to avoid the “tragedy of the commons” that characterizes open access resources. 2. Several potential advantages compensate for the risks of over-extraction and under-provision: economies of scale, geographical risk spreading, avoidance of costs and risks of division, and preservation of community relations. 3. Pessimism in effective management is conceptualized in the Prisoner’s Dilemma where non- cooperation is the dominant strategy. 4. Optimism is derived from observing that many communities make effective use of CPR. Without formal cooperation, this is explained by the Chicken Game, the Assurance Game, and repeated games such as the Folk Theorem and Tit-for-Tat. 5. Successful formal cooperation requires the definition and enforcement of rules that codify extraction from the resource and provision of services by individual members. Five conditions are necessary for successful cooperation: (1) Well defined property rights and group membership, (2) positive expected gains from cooperation, (3) capacity to observe and monitor the behavior of others, (4) capacity to enforce rules, and (5) time to learn to cooperate.
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de Janvry and Sadoulet 2 11/11/10 Figure 1. Definition of types of goods There are many CPRs in the world. Examples are community grazing lands for cattle (Mexican ejido communities, Sahelian village communities), community forestry (village forests in India), community-run irrigation systems (as in Mexico, Nepal, and the
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This note was uploaded on 02/09/2011 for the course ECON c171 taught by Professor Alaindejanvry during the Fall '10 term at Berkeley.

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Chapter15%20CPR-10 - de Janvry and Sadoulet Chapter 15...

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