Traditional theories have suggested either that property rights should be made clear over the common resource or that the authorities should impose taxes or charges to equalise the difference between private costs and social costs. The traditional theories had many examples of successful prediction in collective farms in communist countries and the degradation of many aspects of the natural world. Prof Ostrom did not refute these arguments, but showed that in many other cases the outcomes of common management of resources was far better than that predicted by the standard theories. She developed a new theory, explaining when common resources are well and badly managed. It showed that, in particular, where common property has been managed on the basis of rules and procedures that have evolved over long periods of time, the outcomes were regularly subtle and much better than a private or regulated alternative. Active participation in setting and enforcing rules was the most important feature of these success stories, she found. These worked better than rules that were imposed from the outside. One of the more surprising of her findings was that people were willing to monitor and sanction others without receiving large rewards for such behaviour.
Financial Times
