1. From a rational choice institutional analysis perspective, what are the major challenges involved in governing the commons? What is the policy panacea for the commons problems?
In this paper, I will first examine the nature of the commons and the general major obstacles in governing the commons in light of "The Tragedy of the Commons,", a much-cited work by Garrett Hardin in 1968. In the second part, some well-known policy panacea suggested by numerous scholars will be examined and critically analyzed.
A common-pool resource(CPR), as suggested by the Nobel Prize Winner, Elinor Obstrom, is a natural resources or constructed facilities where solving the problem of excluding beneficiaries is nontrivial and benefits are subtractable. Unlike public goods, a common-pool resource generally consists of a core resource and a limited quantity of extractable fringe units and thus common pool resources face problems of congestion and over-exploitation. These peculiar natures of common-pool resource attribute to what Garrett Hardin described as “The Tragedy of the Commons”.
In the rational choice theory framework, individuals are assumed to have clear and stable preferences and have superb cognitive capacity in calculation. It is presumed that only individuals make choices and social phenomenons are merely the outcome of aggregate of their decisions. As a rational decision-maker, a person will engage in a meticulous cost-benefit calculus to maximize their individual benefit or utility. Every act of human beings are said to be purposive and self-maximizing. The decisions are made in accordance with the analysis of their own cost and benefit and such a kind of analysis essentially undermines the public or collective interest. Take the example of pasture in Hardin’s article. Every herder, as a wealth-maximizer, will increase their herd size whenever possible which leads to externality to other pasture users and with limited resources( the commons),...