Individualism and governance of the commons

Abstract

Individualistic cultures are associated with economic growth and development. Do they also improve governance of the commons? According to the property rights literature, conservation is more likely when the institutions of property arise from a spontaneous process in response to local problems. We argue that individualistic cultures contribute to conservation by encouraging property rights entrepreneurship: efforts by individuals and communities to resolve commons dilemmas, including their investment of resources in securing political recognition of spontaneously arising property rights. We use the theory to explain cross-country rates of change in forest cover. Using both subjective measures of individualistic values and the historical prevalence of disease as instruments for individualism, we find that individualistic societies have higher reforestation rates than collectivist ones, consistent with our theory.

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Notes

  1. 1.

    Not all agree: Acemoglu and Robinson’s (2019) “narrow corridor of liberty” thesis and Boettke and Candela’s (2019) theory of state formation and predation is that too much political power undermines liberty and ultimately erodes the state’s capacity. Our theory agrees with these ideas about the challenges arising from state power and the social foundations of successful governance.

  2. 2.

    In this paper, our focus is on the “local” commons, in particular forests. In the conclusion, we consider the implications of our argument for the global commons (e.g., climate change and ocean fisheries).

  3. 3.

    Common property is defined by co-ownership of valuable assets, such as community ownership and management of groundwater reservoir. Ownership shares typically are inalienable, and exit is required to avoid poor management by others.

  4. 4.

    Leeson and Harris (2018b) and Leeson (2019) explain that rules always emerge and change because they are in the interests of the actors, subject to transaction costs. Allen (2015) and Barzel (2002) offer a similar perspective, but focus more narrowly on Coasean bargaining over property rights.

  5. 5.

    Cowen and Delmotte (2019) show that the presence of markets provides information to communities about the economic benefits from establishing private or communal property rights. In our framework, the presence of robust markets would further facilitate solutions to the tragedy of the commons.

  6. 6.

    A rich literature, for example, considers how drillers overcome the problem of racing to capture oil and gas by establishing rules to share access to reservoirs (Libecap and Smith 1999, 2002).

  7. 7.

    For example, the entrepreneurship of individuals in solving environmental problems in the absence of effective law is key theme in the work of Anderson and Hill (2004) and Libecap (1989).

  8. 8.

    Earlier research applied such a tripartite view in understanding economic development (Boettke 2001) and disaster response (Boettke et al. 2007; Chamlee-Wright and Storr 2010; Sobel and Leeson 2006).

  9. 9.

    Cheibub et al. (2010) explain that “democracy” is a multifaceted concept that varies on institutional dimensions including whether the chief executive is elected or appointed by an elected body, the legislature is popularly elective, there are competing parties, and incumbents are replaced by the same procedures by which they were initially elected. An important future area of research will consider how variation along these dimensions, as well as the extent of polycentrism—for Vincent Ostrom (1994), the foundation of self-governance—explains governance of the commons.

  10. 10.

    The relationship between political institutions and conservation may be U-shaped in that autocracies or consolidated democracies may be more likely to manage resources effectively than transitional democracies. Autocrats can commit to private property rights, but will be less likely to do so than a consolidated democracy (Olson 1993; Salter and Hall 2015).

  11. 11.

    The countries we removed exhibited absolute general measures of influence (DFIT) above a threshold of 0.58.

  12. 12.

    The hypothesis is that the state depends structurally on business investment and so mechanically reduces regulatory and tax burdens to attract it in a globally competitive market. That conjecture is a modern version of Marxist political economy (Przeworski and Wallerstein 1988).

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Acknowledgements

We thank our referee for insightful comments. Peter T. Leeson and William F. Shughart provided superb editorial guidance. We benefited from conversations with several colleagues regarding the economics of culture, including Paul Dragos Aligica, Pete Boettke, Chris Coyne, Dan D’Amico, Wilson Law, Wanlin Lin, Adam Martin, John Meadowcroft, Jamie Pavlik, and Claudia Williamson.

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Cai, M., Murtazashvili, I., Murtazashvili, J. et al. Individualism and governance of the commons. Public Choice 184, 175–195 (2020). https://doi.org/10.1007/s11127-019-00722-3

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Keywords

  • Individualism
  • Collectivism
  • Private property rights
  • Tragedy of the commons
  • Self-governance
  • Deforestation

JEL Classification

  • B52
  • O1
  • O5
  • Q2