Abstract

The paradox that individually rational actions collectively can lead to irrational outcomes is exemplified in human appropriation of a class of goods known as "common-pool resources" : natural or humanly created resource systems which are large enough to make it costly to exclude potential beneficiaries. Appropriations of common-pool resources for private use tend toward abusive practices that lead to the loss of the resource in question: the tragedy of thecommons. Prescriptions for escape from tragedy have involved two institutions, each applied largely in isolation from the other: private markets and government coercion . Yet examples exist of local institutions that have utilized mixtures of public and private practices and have survived for hundreds of years.Two problems further exacerbate efforts to avoid the tragic nature of common-pool resource use. One, given the current level of knowledge, the role of the resource is not recognized for what it is. It is, thus, in a fundamental, epistemological sense invisible. Two, if the resource is recognized, it may not be considered scarce, thus placing it outside the scrutiny of economic theory. Both types of error are addressed by the emerging field of ecological economics.This paper discusses common pool resources, locates the ambiguities that make their identification difficult, and argues that avoidance of a CPR loss is inadequately addressed by sharply separated market and state institutions. When the resource is recognized for what it is, a common-pool good, which is subject to overexploitation, it may be possible to identify creative combinations of public and private institutions that can combine to save that resource. Disparate examples of self-organized enterprises, public/private utilities, and "green" taxes, to name a few, provide empirical content for developing theories of self-organized collective action