Common Property Resources: Economic Analytics

Offering an alternative to impersonal markets and coercive states, the communitarian institutions built around common property resources have looked attractive to scholars in the humanities and social sciences. Oddly, economic theory has been missing from discussions on CPRs, making it difficult to judge the status of empirical works, which, in the case of CPRs, have mainly been case studies. This paper presents a fairly complete economic theory of CPRs, identifying not only the circumstances in which communitarian institutions can function well, but also showing when these institutions could be expected to unravel. The theory also identifies an especially dark side of communitarian institutions, namely, their capacity to permit one group to exploit another within long-term relationships.