Skip to main content

Governance of shale gas development: Insights from the Bloomington school of institutional analysis

The Review of Austrian Economics volume 32, pages 159–179 (2019)Cite this article

Abstract

The boom in shale gas production has been accompanied by concerns that polycentricity, whereby multiple levels of government share regulatory authority, has resulted in an inefficient and ineffective governance. The Bloomington School of institutional analysis suggests otherwise. Drawing on the work of Elinor and Vincent Ostrom, we clarify a diverse regulatory response to shale gas development within federations may be appropriate depending on the physical context of shale gas development, local demand for economic development (including geology, geography, and the built environment), the regulatory capacity of local governments, uncertainty about the appropriate regulations to address externalities from shale gas production, and the extent of inter-jurisdictional coordination problems. We apply the framework to regulation of shale gas development two fracking federations: the US and EU. In each context, letting a thousand regulatory flowers bloom is more sensible than uniform standards.

This is a preview of subscription content, access via your institution.

Access options

Buy single article

Instant access to the full article PDF.

USD 39.95

Price includes VAT (USA)
Tax calculation will be finalised during checkout.

Notes

  1. For an excellent overview of the economics of fracking, see Fitzgerald (2013).

  2. There is also a tremendous amount of oil in shale, but fracking shale oil has not revolutionized energy markets like shale gas. Thus, the “shale revolution” or “shale era” generally refers to fracking shale gas. Although it is not our focus, the analytical framework developed readily applies to the case of regulation of shale oil.

  3. We follow Eusepi and Wagner (2010) and Wagner (2005) in distinguishing between polycentric and decentralized orders. Polycentrism is defined by contestation and competition at multiple levels of government, while decentralized governance may simply involve implementation at local levels, without meaningful self-governance. Our interest is in political regimes where there is legitimate self-governance by local units in federal systems, which is the essence of a polycentricity.

  4. Economists interested in the American west have done much to dispel the notion that it was disorderly, mostly because institutions emerged spontaneously to reduce conflict (Anderson and Hill 2004; Umbeck 1977). The accounts of the shale boom as a Wild West do not necessarily correspond to the reality of the American west, which was quite orderly for reasons anticipated by the economics literature on anarchy. One of the reasons why order is common in such contexts is because institutions often arise spontaneously to resolve economic problems (Clark and Powell 2017; Palagashvili et al. 2017; Powell and Stringham 2009).

  5. In this regard, the epistemic and generative functions of polycentric governance parallel the epistemic role of prices in Austrian economics.

  6. We do not consider positive externalities. There are certainly positive externalities with the oil and gas industry, which is one reason why there is substantial public investment in university extension programs devoted to research how to improve mining techniques (Clay and Wright 2010).

  7. One of the virtues of polycentric governance, as conceptualized of by Vincent Ostrom (2008), is that is provides a political foundation for self-governance. A complementary perspective conceptualizes of self-governance as order which occurs in stateless societies, or without much role for a state (Leeson 2006, 2011, 2014). Each perspective emphasizes that the central government is not the only source of order in society, as well as recognizes a role for spontaneous order (Boettke and Coyne 2005).

  8. The importance of local experimentation is also theme in the public choice literature on governance. Both Hayek (1945) and Coase (1960) suggested governments face information problems that require consideration of decentralized solutions. Stringham and Zywicki (2011) articulate the affinities between Hayek’s perspective on governance and the literature on polycentric governance.

  9. Despite the public choice criticism of polycentric governance, much of the approach is based in part on insights from earlier architects of public choice, especially Hayek (Boettke et al. 2014; Boettke and Coyne 2005).

  10. Richardson et al. (2013) provides a review of state-level regulation of the shale industry, including how these regulations vary across states.

  11. Warner and Shapiro (2013) and Osofsky and Wiseman (2014) describe in detail the federal option for regulation of hydraulic fracturing regulation.

  12. Although Poland allowed fracking, and even encouraged it, the initial estimates of recoverable shale gas were something around 100 times the actual amount of recoverable shale gas (Blake 2014). Hence, there has not been and may never be a shale revolution in Poland, although the government certainly encouraged it.

  13. The European case demonstrates that centralization of regulation can just as easily be used to promote hydraulic fracturing as to constraint it. Indeed, in the US, typical rationale for Congressional regulation of interstate economic activities has been to promote economic activities and to limit the ability of states to constrain economic development (Weingast 1995). In the context of shale regulation, the presumption is often that a stronger federal role would constrain rather than promote hydraulic fracturing.

  14. There is also the fact that France imports nearly all its oil and gas already, which has led to investment in nuclear energy. Hence, the opportunity costs of banning fracking in France is much lower than in Poland.

  15. In Kelo v. City of New London, the Supreme Court upheld taking land from a citizen to give it to a corporation, interpreting this taking as “public purpose” because it might result in economic development.

  16. The two goals (international coordination and local autonomy with respect to the regulation of fracking) are somewhat incompatible. Super-local coordination necessarily requires the alienation of some degree of autonomy at the local level. To the extent that some combination of the two is possible, this is more likely to be achieved within a polycentric system in which localities can decide whether to form a super-local authority.

  17. Groundwater contamination is of course not unique to shale gas extraction but is the potential side effect of well casing in general. We thank one anonymous referee for pointing this issue to our attention.

  18. The greater the probability that some disastrous event, the more justified a moratorium on what is perceived to be the potential cause. For the reasons discussed in the paper, this is very unlikely to be the case of fracking. The externalities of the latter tend to be concentrated within the relevant locality or regional at worst. In a case like this, adopting the precautionary principle at the national level has little benefits to it. The few local jurisdictions involved are better placed, both from a local knowledge and an incentive compatibility perspective, to deal with the issue.

References

  • Aligica, P. D. (2017a). Institutional diversity, pluralism, and institutional theory. New York: Oxford University Press.

    Google Scholar 

  • Aligica, P. D. (2017b). Public administration and the classical liberal perspective: Criticism, clarifications, and reconstruction. Administration & Society, 49(4), 530–551.

    Article  Google Scholar 

  • Aligica, P. D., & Boettke, P. J. (2009). Challenging institutional analysis and development: The Bloomington school. Routledge.

  • Aligica, P. D., & Tarko, V. (2012). Polycentricity: From Polanyi to Ostrom, and beyond. Governance, 25(2), 237–262.

    Article  Google Scholar 

  • Aligica, P. D., & Tarko, V. (2013). Co-production, polycentricity, and value heterogeneity: The Ostroms’ public choice institutionalism revisited. American Political Science Review, 107(4), 726–741.

    Article  Google Scholar 

  • Anderson, T. L., & Hill, P. J. (2004). The not so wild, wild west: Property rights on the frontier. Stanford University Press.

  • Arnold, G. (2015). When cooperative federalism Isn’t: How US Federal Interagency Contradictions Impede Effective Wetland Management. The Journal of Federalism: Publius.

    Google Scholar 

  • Arnold, G., & Holahan, R. (2014). The federalism of fracking: How the locus of policy-making authority affects civic engagement. Publius, 44(2), 344–368.

    Article  Google Scholar 

  • Arnold, G., & Long, L. A. N. (2018). Policy expansion in local government environmental policy making. Public Administration Review.

  • Arnold, G., & Neupane, K. W. (2017). Determinants of pro-fracking measure adoption by New York southern tier municipalities. Review of Policy Research, 34(2), 208–232.

    Article  Google Scholar 

  • Arnold, G., Nguyen Long, L. A., & Gottlieb, M. (2017). Social networks and policy entrepreneurship: How relationships shape municipal decision making about high-volume hydraulic fracturing. Policy Studies Journal, 45(3), 414–441.

    Article  Google Scholar 

  • Barnard, C. (1938). The functions of the executive. Cambridge: Harvard university press.

    Google Scholar 

  • Bednar, J., & Eskridge Jr., W. N. (1994). Steadying the Court’s unsteady path: A theory of judicial enforcement of federalism. Southern California Law Review, 68, 1447.

    Google Scholar 

  • Bednar, J., Eskridge Jr., W. N., & Ferejohn, J. (2001). A political theory of federalism. In J. Ferejohn, J. N. Rakove, & J. Riley (Eds.), Constitutional culture and democratic rule (pp. 223–243). New York: Cambridge University Press.

    Chapter  Google Scholar 

  • Black, K. J., McCoy, S. J., & Weber, J. G. (2018). When externalities are taxed: The effects and incidence of Pennsylvania’s impact fee on shale gas wells. Journal of the Association of Environmental and Resource Economists, 5(1), 107–153.

    Article  Google Scholar 

  • Blake, M. (2014). How Hillary Clinton’s State Department sold fracking to the world. Mother Jones.

  • Blomquist, W., & Schlager, E. (2005). Political pitfalls of integrated watershed management. Society and Natural Resources, 18(2), 101–117.

    Article  Google Scholar 

  • Boettke, P. J. (2017). Economic policy of a free society. The Review of Austrian Economics, 1–11.

  • Boettke, P. J., & Coyne, C. J. (2005). Methodological individualism, spontaneous order and the research program of the workshop in political theory and policy analysis. Journal of Economic Behavior & Organization, 57(2), 145–158.

    Article  Google Scholar 

  • Boettke, P. J., Coyne, C. J., & Leeson, P. T. (2011). Quasimarket failure. Public Choice, 149(1–2), 209–224.

    Article  Google Scholar 

  • Boettke, P. J., Lemke, J. S., & Palagashvili, L. (2014). Polycentricity, self-governance, and the art & Science of association. The Review of Austrian Economics, 1–25.

  • Boudet, H., Clarke, C., Bugden, D., Maibach, E., Roser-Renouf, C., & Leiserowitz, A. (2014). “Fracking” controversy and communication: Using national survey data to understand public perceptions of hydraulic fracturing. Energy Policy, 65, 57–67.

    Article  Google Scholar 

  • Brewer, J. (1990). The sinews of power: War, money, and the English state, 1688–1783. Cambridge: Harvard University Press.

    Google Scholar 

  • Brown, J. P., Fitzgerald, T., & Weber, J. G. (2016). Capturing rents from natural resource abundance: Private royalties from US onshore oil & gas production. Resource and Energy Economics, 46, 23–38.

    Article  Google Scholar 

  • Burger, M. (2013). Policy diffusion and the (re) federalization of fracking regulation. Michigan State Law Review, 1483–1546.

  • Clark, J. R., & Powell, B. (2017). The ‘minimal’state reconsidered: Governance on the margin. The Review of Austrian Economics, 1–12.

  • Clay, K., & Wright, G. (2010). Gold rush legacy: American minerals and the knowledge economy. In Property in Land and Other Resources. Lincold Institute of Land Policy.

  • Coase, R. H. (1960). The problem of social cost. Journal of Law and Economics, 3, 1–44.

    Article  Google Scholar 

  • Cole, D. H., Epstein, G., & Mcginnis, M. D. (2014). Digging Deeper into Hardin’s Pasture: The Complex Institutional Structure of ‘The Tragedy of the Commons.’ Journal of Institutional Economics, 10(3), 353–369.

    Google Scholar 

  • Craig, R. K. (2013). Hydraulic fracturing (fracking), federalism, and the water-energy nexus. Idaho Law Review, 49, 241–659.

    Google Scholar 

  • Currie, J., Greenstone, M., & Meckel, K. (2017). Hydraulic fracturing and infant health: New evidence from Pennsylvania. Science Advances, 3(12), e1603021.

    Article  Google Scholar 

  • Davis, C., & Fisk, J. M. (2014). Energy abundance or environmental worries? Analyzing public support for fracking in the United States. Review of Policy Research, 31(1), 1–16.

    Article  Google Scholar 

  • DeLeire, T., Eliason, P., & Timmins, C. (2014). Measuring the employment impacts of shale gas development. Working Paper.

  • Ellickson, R. C. (1993). Property in land. Yale Law Journal, 102, 1315–1400.

    Article  Google Scholar 

  • Epple, D., & Zelenitz, A. (1981). The implications of competition among jurisdictions: Does Tiebout need politics? The Journal of Political Economy, 1197–1217.

  • Eskridge Jr., W. N., & Ferejohn, J. (1994). The elastic commerce clause: A political theory of American federalism. Vanderbilt Law Review, 47, 1355.

    Google Scholar 

  • European Commission. (2013). Attitudes of Europeans Toward Air Quality. http://ec.europa.eu/public_opinion/flash/fl_360_en.pdf.

  • Eurostat. (2018). Water statistics - Statistics Explained. http://ec.europa.eu/eurostat/statistics-explained/index.php?title=Water_statistics.

  • Eusepi, G., & Wagner, R. E. (2010). Polycentric polity: Genuine vs. spurious federalism. Review of Law & Economics, 6(3), 329–345.

    Article  Google Scholar 

  • Feiock, R. C. (2004). Metropolitan governance: Conflict, competition, and cooperation. Georgetown University Press.

  • Feiock, R. C. (2007). Rational choice and regional governance. Journal of Urban Affairs, 29(1), 47–63.

    Article  Google Scholar 

  • Fetzer, T. (2014). Fracking growth. CEP Discussion Papers 1278.

  • Feyrer, J., Mansur, E. T., & Sacerdote, B. (2017). Geographic dispersion of economic shocks: Evidence from the fracking revolution. The American Economic Review, 107(4), 1313–1334.

    Article  Google Scholar 

  • Fitzgerald, T. (2010). Evaluating split estates in oil and gas leasing. Land Economics, 86(2), 294–312.

    Article  Google Scholar 

  • Fitzgerald, T. (2012). Natural resource production under divided ownership: Evidence from coalbed methane. Review of Law & Economics, 8(3), 719–757.

    Article  Google Scholar 

  • Fitzgerald, T. (2013). Frackonomics: Some economics of hydraulic fracturing. Case Western Law Review, 63(4), 1337–1362.

    Google Scholar 

  • Fox, B. (2013a). EU summit backs shale gas ‘revolution.’ EU Observer.

  • Fox, B. (2013b). Brussels to draft shale gas rules by end of year. EU Observer.

  • Fox, B. (2014). EU ditches plan to regulate on shale gas. EU Observer.

  • Frischmann, B. M., Madison, M. J., & Strandburg, K. J. (2014). Governing knowledge commons. Oxford University Press.

  • Frohlich, C. (2012). Two-year survey comparing earthquake activity and injection-well locations in the Barnett shale, Texas. Proceedings of the National Academy of Sciences, 109(35), 13934–13938.

    Article  Google Scholar 

  • Fukuyama, F. (2013). What is governance? Governance, 26(3), 347–368.

    Article  Google Scholar 

  • Goldstein, B. D., Bjerke, E. F., & Kriesky, J. (2013). Challenges of unconventional shale gas development: So What’s the rush. Notre dame Journal of Law: Ethics & Public Policy.

    Google Scholar 

  • Hadfield, G. K., & Weingast, B. R. (2012). What is law? A coordination model of the characteristics of legal order. Journal of Legal Analysis, 4(2), 471–514.

    Article  Google Scholar 

  • Hadfield, G. K., & Weingast, B. R. (2013). Law without the state. Journal of Law and Courts, 1(1), 3–34.

    Article  Google Scholar 

  • Hamill, S. D. (2014). Pa. System for tracking compliance at Marcellus shale well sites in disrepair. Pittsburgh Post-Gazette.

  • Hand, E. (2014). Injection wells blamed in Oklahoma earthquakes. Science.

  • Hausman, C., & Kellogg, R. (2015). Welfare and distributional implications of shale gas. Brookings Papers on Economic Activity, 50(1), 71–125.

    Article  Google Scholar 

  • Hayek, F. A. (1945). The use of knowledge in society. The American Economic Review, 519–530.

  • Heikkila, T., Schlager, E., & Davis, M. W. (2011). The role of cross-scale institutional linkages in common pool resource management: Assessing Interstate River compacts. Policy Studies Journal, 39(1), 121–145.

    Article  Google Scholar 

  • Hess, C., & Ostrom, E. (2007). Understanding knowledge as a commons. Cambridge: The MIT Press.

  • Hitaj, C., Boslett, A., & Weber, J. G. (2017). Fracking, farming, and water. USAEE Working Paper No., 17–322.

  • Holahan, R., & Arnold, G. (2013). An institutional theory of hydraulic fracturing policy. Ecological Economics, 94, 127–134.

    Article  Google Scholar 

  • Inglehart, R. (1997). Modernization and postmodernization: Cultural, economic, and political change in 43 societies. Cambridge: Cambridge University Press.

  • Johnson, N. D., & Koyama, M. (2014). Tax farming and the origins of state capacity in England and France. Explorations in Economic History, 51, 1–20.

    Article  Google Scholar 

  • Kahn, M. E. (2002). Demographic change and the demand for environmental regulation. Journal of Policy Analysis and Management, 21(1), 45–62.

    Article  Google Scholar 

  • Kriesky, J., Goldstein, B. D., Zell, K., & Beach, S. (2013). Differing opinions about natural gas drilling in two adjacent counties with different levels of drilling activity. Energy Policy, 58, 228–236.

    Article  Google Scholar 

  • Leeson, P. T. (2006). Efficient anarchy. Public Choice, 130(1–2), 41–53.

    Google Scholar 

  • Leeson, P. T. (2011). Government, clubs, and constitutions. Journal of Economic Behavior & Organization, 80(2), 301–308.

    Article  Google Scholar 

  • Leeson, P. T. (2014). Anarchy unbound: Why self-governance works better than you think. New York: Cambridge University Press.

    Book  Google Scholar 

  • Leeson, P. T., & Suarez, P. A. (2016). An economic analysis of magna carta. International Review of Law and Economics, 47, 40–46.

    Article  Google Scholar 

  • Leeson, P. T., & Subrick, J. R. (2006). Robust political economy. The Review of Austrian Economics, 19(2–3), 107–111.

    Article  Google Scholar 

  • Libecap, G. D. (1989a). Contracting for property rights. New York: Cambridge University Press.

    Google Scholar 

  • Libecap, G. D. (1989b). Distributional issues in contracting for property rights. Journal of Institutional and Theoretical Economics, 6–24.

  • Libecap, G. D., & Smith, J. L. (1999). The self-enforcing provisions of oil and gas unit operating agreements: Theory and evidence. Journal of Law, Economics, and Organization, 15(2), 526–548.

    Article  Google Scholar 

  • Libecap, G. D., & Smith, J. L. (2002). The economic evolution of petroleum property rights in the United States. The Journal of Legal Studies, 31(S2), S589–S608.

    Article  Google Scholar 

  • Libecap, G. D., & Wiggins, S. N. (1985). The influence of private contractual failure on regulation: The case of oil field unitization. The Journal of Political Economy, 93(4), 690–714.

    Article  Google Scholar 

  • Maniloff, P., & Manning, D. T. (2017). Jurisdictional tax competition and the division of nonrenewable resource rents. Environmental and Resource Economics, 1–26.

  • Maniloff, P., & Mastromonaco, R. (2014). The local economic impacts of hydraulic fracturing and determinants of Dutch disease.

  • Mason, C. F., Muehlenbachs, L., & Olmstead, S. M. (2014). The economics of shale gas development. Resources for the Future Discussion Paper, 14–42.

  • Mauter, M. S., Alvarez, P. J., Burton, A., Cafaro, D. C., Chen, W., Gregory, K. B., et al. (2014). Regional variation in water-related impacts of shale gas development and implications for emerging international plays. Environmental Science & Technology, 48(15), 8298–8306.

    Article  Google Scholar 

  • McGinnis, M. D., & Ostrom, E. (2014). Social-ecological system framework: Initial changes and continuing challenges. Ecology and Society, 19(2), 30.

    Article  Google Scholar 

  • Molotch, H. (1976). The city as a growth machine: Toward a political economy of place. American Journal of Sociology, 309–332.

  • Molotch, H., & Logan, J. (1987). Urban fortunes: The political economy of place. Berkeley: University of California Press.

    Google Scholar 

  • Muehlenbachs, L., Spiller, E., & Timmins, C. (2015). The housing market impacts of shale gas development. American Economic Review, 105(12), 3633–3659.

    Article  Google Scholar 

  • Murtazashvili, I. (2013). The political economy of the American frontier. New York: Cambridge University Press.

    Book  Google Scholar 

  • Murtazashvili, I. (2017). Institutions and the shale boom. Journal of Institutional Economics, 13(1), 189–210.

    Article  Google Scholar 

  • North, D. C., & Thomas, R. P. (1973). The rise of the western world: A new economic history. New York: Cambridge University Press.

    Book  Google Scholar 

  • North, D. C., & Weingast, B. R. (1989). Constitutions and commitment: The evolution of institutions governing public choice in seventeenth-century England. The Journal of Economic History, 49(4), 803–832.

    Article  Google Scholar 

  • Olken, B. A. (2010). Direct democracy and local public goods: Evidence from a field experiment in Indonesia. American Political Science Review, 104(2), 243–267.

    Article  Google Scholar 

  • Osofsky, H. M., & Wiseman, H. J. (2014). Hybrid energy governance. University of Illinois Law Review.

  • Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. New York: Cambridge University Press.

    Book  Google Scholar 

  • Ostrom, E. (2005). Understanding institutional diversity. Princeton: Princeton University Press.

    Google Scholar 

  • Ostrom, V. (2008). The political theory of a compound republic: Designing the American experiment. Lexington Books.

  • Ostrom, E. (2009). A general framework for analyzing sustainability of social-ecological systems. Science, 325(5939), 419–422.

    Article  Google Scholar 

  • Ostrom, V., Tiebout, C. M., & Warren, R. (1961). The organization of government in metropolitan areas: A theoretical inquiry. The American Political Science Review, 831–842.

  • Ostrom, E., Burger, J., Field, C. B., Norgaard, R. B., & Policansky, D. (1999). Revisiting the commons: Local lessons, global challenges. Science, 284(5412), 278–282.

    Article  Google Scholar 

  • Palagashvili, L., Piano, E., & Skarbek, D. (2017). The decline and rise of institutions a modern survey of the Austrian contribution to the economic analysis of institutions. New York: Cambridge University Press.

    Book  Google Scholar 

  • Pickerill, J. M. (2004). Constitutional deliberation in congress: The impact of judicial review in a separated system. Duke University Press.

  • Powell, B., & Stringham, E. P. (2009). Public choice and the economic analysis of anarchy: A survey. Public Choice, 140(3–4), 503–538.

    Article  Google Scholar 

  • Rabe, B. G. (2011). Contested federalism and American climate policy. Publius: The Journal of Federalism, 41(3), 494–521.

    Article  Google Scholar 

  • Rabe, B. G. (2014). Shale play politics: The intergovernmental odyssey of American shale governance. Environmental Science & Technology, 48(15), 8369–8375.

  • Rabe, B. G., & Borick, C. P. (2012). Gas drillers’ new wild west. Philadelphia Inquirer.

  • Rakitan, T. J. (2018). The impact of the US shale boom on agriculture: Evidence from North Dakota.

    Google Scholar 

  • Reilly, T. E., Dennehy, K. F., Alley, W. M., & Cunningham, W. L. (2008). Ground-water availability in the United States. Washington, D.C.: United States Geological Survey.

    Book  Google Scholar 

  • Richardson, N., Gottlieb, M., Krupnick, A., & Wiseman, H. J. (2013). The state of state shale gas regulation. Resources for the Future Report, Washington, DC.

  • Rodden, J. (2006). Hamilton’s paradox: The promise and peril of fiscal federalism. Cambridge: Cambridge University Press.

  • Root, H. L. (1989). Tying the King’s hands credible commitments and Royal Fiscal Policy during the old regime. Rationality and Society, 1(2), 240–258.

    Article  Google Scholar 

  • Rozell, D. J., & Reaven, S. J. (2012). Water pollution risk associated with natural gas extraction from the Marcellus shale. Risk Analysis, 32(8), 1382–1393.

    Article  Google Scholar 

  • Scheyder, E. (2013). Bakken flaring burns more than $100 million a month. Reuters.

  • Schlager, E., Heikkila, T., & Case, C. (2012). The costs of compliance with interstate agreements: Lessons from water compacts in the western United States. Publius: The Journal of Federalism, 42(3), 494–515.

    Article  Google Scholar 

  • Sened, I. (1997). The political institution of private property. New York: Cambridge University Press.

    Google Scholar 

  • Shipan, C. R., & Volden, C. (2006). Bottom-up federalism: The diffusion of antismoking Policies from US cities to states. American Journal of Political Science, 50(4), 825–843.

    Article  Google Scholar 

  • Small, M. J., Stern, P. C., Bomberg, E., Christopherson, S. M., Goldstein, B. D., Israel, A. L., et al. (2014). Risks and risk governance in unconventional shale gas development. Environmental Science & Technology, 48(15), 8289–8297.

    Article  Google Scholar 

  • Spence, D. B. (2013a). Backyard politics, National Policies: Understanding the opportunity costs of National Fracking Bans. Yale Journal of Regulation, 30, 30A–475.

    Google Scholar 

  • Spence, D. B. (2013b). Federalism, regulatory lags, and the political economy of energy production. University of Pennsylvania Law Review.

  • Spence, D. B. (2013c). Responsible shale gas production: Moral outrage vs. cool analysis. Fordham Environmental Law Review, 25, 141–191.

    Google Scholar 

  • Stringham, E. P., & Zywicki, T. J. (2011). Hayekian anarchism. Journal of Economic Behavior & Organization, 78(3), 290–301.

    Article  Google Scholar 

  • Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.

    Article  Google Scholar 

  • Umbeck, J. (1977). A theory of contract choice and the California gold rush. Journal of Law and Economics, 20, 421.

    Article  Google Scholar 

  • Vidic, R. D., Brantley, S. L., Vandenbossche, J. M., Yoxtheimer, D., & Abad, J. D. (2013). Impact of shale gas development on regional water quality. Science, 340(6134), 1235009.

    Article  Google Scholar 

  • Wagner, R. E. (2005). Self-governance, polycentrism, and federalism: Recurring themes in Vincent Ostrom’s scholarly oeuvre. Journal of Economic Behavior & Organization, 57(2), 173–188.

    Article  Google Scholar 

  • Warner, B., & Shapiro, J. (2013). Fractured, fragmented federalism: A study in fracking regulatory policy. The Journal of Federalism: Publius.

    Google Scholar 

  • Weber, J. G. (2012). The effects of a natural gas boom on employment and income in Colorado, Texas, and Wyoming. Energy Economics, 34(5), 1580–1588.

    Article  Google Scholar 

  • Weber, J. G. (2014). A decade of natural gas development: The makings of a resource curse? Energy and Resource Economics, 37(1), 168–183.

    Article  Google Scholar 

  • Weingast, B. R. (1995). The economic role of political institutions: Market-preserving federalism and economic development. Journal of Law, Economics, and Organization, 11(1), 1–31.

    Google Scholar 

  • Weingast, B. R. (1997). The political foundations of democracy and the rule of law. American Political Science Review, 91(2), 245–263.

    Article  Google Scholar 

  • Wiggins, S. N., & Libecap, G. D. (1985). Oil field unitization: Contractual failure in the presence of imperfect information. The American Economic Review, 75(3), 368–385.

    Google Scholar 

  • Williamson, C. R. (2009). Informal institutions rule: Institutional arrangements and economic performance. Public Choice, 139(3–4), 371–387.

    Article  Google Scholar 

  • Wiseman, H. J. (2009). Untested waters: The rise of hydraulic fracturing in oil and gas production and the need to revisit regulation. Fordham Environmental Law Review, 20, 115–171.

    Google Scholar 

  • Wiseman, H. J. (2010). Regulatory adaptation in fractured Appalachia. Villanova Environmental Law Journal, 21, 229.

    Google Scholar 

  • Young, O. R. (2010). Institutional dynamics: Resilience, vulnerability and adaptation in environmental and resource regimes. Global Environmental Change, 20(3), 378–385.

    Article  Google Scholar 

  • Young, O. R. (2011). Effectiveness of international environmental regimes: Existing knowledge, cutting-edge themes, and research strategies. Proceedings of the National Academy of Sciences, 108(50), 19853–19860.

    Article  Google Scholar 

Download references

Acknowledgements

We would like to thank Chris Coyne, Jeremy G. Weber, and two anonymous referees for insightful suggestions and criticisms. The standard disclaimer applies.

Author information

Authors and Affiliations

  1. Graduate School of Public and International Affairs, University of Pittsburgh, Utrecht, Netherlands

    Ilia Murtazashvili

  2. Department of Economics, George Mason University, Fairfax, VA, USA

    Ennio E. Piano

Authors
  1. Ilia Murtazashvili
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Ennio E. Piano
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Ilia Murtazashvili.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Murtazashvili, I., Piano, E.E. Governance of shale gas development: Insights from the Bloomington school of institutional analysis. Rev Austrian Econ 32, 159–179 (2019). https://doi.org/10.1007/s11138-018-0424-5

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11138-018-0424-5

Keywords

  • Polycentric governance
  • Bloomington school
  • Fracking
  • Institutions
  • Private property