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Institutional Failure in Resource Management
Author(s): James M. AchesonReviewed work(s):Source: Annual Review of Anthropology, Vol. 35 (2006), pp. 117-134Published by: Annual Reviews
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Institutional Failure in
Resource Management
JamesM. Acheson
Departments ofAnthropology andMarine Science, University ofMaine, Orono,Maine 04469; email: [email protected]
Annu. Rev. Anthropol. 2006.35:117-34
The Annual Review of nthropology s
online at anthro.annualreviews.org
This article'sdoi:
10.1146/annurev.anthro.35.081705.123238
Copyright ? 2006 byAnnual Reviews.
All rightsreserved
0084-6570/06/1021-0117$20.00
Key Words
conservation rules, collective action, natural resources, devising
institutions, ational choice
Abstract
Many of the world's natural resources are in a state of crisis. The
solution to this crisis is todevelop effective management institu
tions, but there is no consensus on what those institutions are. Some
economists favor solving resource-management problems through
the institution of private property; others advocate central govern
ment control; and many anthropologistssee local-level management
as the solution. In this review, I argue that all these governance struc
tures fail under certain conditions. However, the factors contributing
to failurein each of these institutional ormsdifferradically, nd the
causes of that failure are not always predictedon the basis of exist
ing theory. This chapter contains a review of the literature on the
factors identified as causing the failure of private-property regimes,
government-controlled resources, and local-level management. We
will have to learn tomatch the resource problems with governance
institutions and specific management techniques ifwe are tomanage
resources effectively. We also will have to understand the complex
biosocial factorsinfluencing ustainability.
i*7
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INTRODUCTION
Over the past 50 years ithas become increas
ingly apparent the world is facinga resource
management crisis. Large numbers of marine
fisherieshave been seriouslydepleted.Forests
are being harvested at unsustainable levels;acid rainand smogareproblems inwidespread
partsof the industrializedworld; soil erosion
threatens vast areas; parts of Africa and the
Middle East are returning odesert; industrial
waste dumpsmake life hazardous for largenumbers of humans and other animals; many
rivers and estuaries arepolluted; and virtually
everylarge lake intheworld is inaprecariousstate.
There is increasing consensus that the
cause of resourcedegradation is institutional.
Ifwe get the right rules and governance struc
tures, natural resources will be used wisely and
conservation goals will be met.Unfortunately,
weclearly have not gotten those rules right.
That somany resources are in such dire straits
indicates we are witnessing widespread insti
tutional failure.
Although
there is
agreement
that institu
tions are needed to solve resource problems,
there is no agreement as to what institutions
would do the jobbest.At thispoint, it isgen
erally agreed that three possible governance
structures exist: private property, government
management, and local community manage
ment. Each of these structures has strong ad
vocates (Ostrom 1990).A number of economists from the late
1950sto
the 1970s,workingon
what became known as the common property prob
lem, concluded that the primary cause of the
destruction and inefficient use of natural re
sources was the absence of property rights.
The solution was to put resources in pri
vate hands or to simulate private-property
rights, for example, by establishing licenses
or limiting entry schemes (Cheung 1970,Gordon 1954, Johnson 1972, Posner 1977,
Scott 1955). Their insights have had nosmall effect on the management of natural
resources.
Hardin (1968) advocated government
management inhis article "The Tragedy of
the Commons." Many bureaucrats and en
vironmentalists share Hardin's advocacy of
strong and possibly repressive government
action, and theyhave persuaded theU.S.
Congressto enact a number of important
con
servation laws, including the Clean Air Act,the Clean Water Act, the Environmental Pro
tectionAct, and theEndangered SpeciesAct.
Since the 1980s,many anthropologistsand
other social scientists have come to advo
cate management by local-level communi
ties. They have buttressed their arguments
by pointing to the largenumber of cases in
whichresources were
managed wellat
the local level by communities around the world
or by communities inpartnershipwith governments (i.e., co-management) (Anderson &
Hill 2004, Baland & Platteau 1996, Berkes
1989,McCay & Acheson 1987,Ostrom 1990,Pinkerton&Weinstein 1995).
Social scientists nd others tend to lionize
one of these solutions to resource dilemmas.
I argue none of these is ageneral solution.
All these different inds ofgovernance structures have succeeded in conserving natural re
sources in some instances, but they have all
had their share of failures as well. In this re
view, I concentrate on the failures. Focusing
on cases where these governance structures
didnotwork gives someunusual insights nto
the resource-management problemswe cur
rently face. As discussed below, many institu
tions have failed to conserve resources, and
the reasons for those failures are not always
predicted on thebasis of existingtheory.There is no
well-developed literature
on institutional failure because analysts far
prefer to write about successful resource
management ventures rather than the failures.
Nevertheless, there is agood deal of scattered
information on cases where mismanagement
occurred and the reasons for it.
Onegeneral
cause of resourcedepletion
is
that people may not recognize that resources
arebeing depleted
or even that theyare under
ii8 Acheson
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stress, particularly in the first stages of overex
ploitation.The factorsinfluencing hanges in
resources' stocks are socomplex that genuine
uncertainty may exist about the role of hu
man activities n stocksizes (Berkes& Folke
1998,Wilson 2002). In aboriginal societies,where game is thought to be provided by
spirits or other supernatural forces, the idea
that shortages of fish and game could be a
result of overexploitation may not even oc
cur (Anderson 1996,p. 101;Brightman 1993).
However, even in cases where people recog
nize the problem, theycan fail to conserve.
The primaryreason for conservation failure
isthatthey annotdevise effectivenstitutions
orrules.
Assessing institutions s difficultbecause
several different criteria can be used tomea
sure the success or failure of institutions de
signed to conserve renewable resources, rang
ing rom economic efficiencynd equity Fehr& Gachter 2000) to adaptability nd account
ability. However, in this review I assess insti
tutional failure in terms of resource sustain
ability. lthough thereareproblemswith this
definition (see Singleton 1998,pp. 15-16), Ido not believe we can
judge rules to conserve
renewable resources asbeing successful if the
resource isnot maintained in the longrun. Be
fore I discuss institutional failure, information
isneeded on some basic concepts and their ap
plication to resource management.
COMMON-POOL RESOURCES,
COMMUNAL ACTIONDILEMMAS, AND PROPERTYRIGHTS
The root of the resource-management prob
lem, accordingto many social scientists, lies
in the common-pool nature of many of our
most important natural resources. Common
poolresources (such as water, air, grasslands,
forests,and stocksof fish andwildlife) have
twocharacteristics,
which in combination
cause serious problems. First, theyare sub
tractable, which means the amount of the re
source used byone person cannot be used by
another. Second, it can be difficult to exclude
people from using these resources (Ostrom
et al. 1994). As a result, oceans, rivers, lakes,
air, parks, and wildlife can be exploited by
large numbers of people, who, after a time,
deplete the resource.
The solution to managing common-pool
resources is to establish rules curtailingre
source use in the interest of long-term sustain
ability.Such ruleswould presumably bene
fiteveryonebypreventingoverexploitationof
the resource and/or its complete destruction.
However, eventhough such rules bring favor
able results, there isno guarantee they will be
provided.Olson (1965) firstrecognized this
problem:He pointedout
thateven
ifrulesor other public goods would benefit all, theywould only be provided ifspecial incentives
exist. The basic problem, he argued,was that
individualshave no incentive to voluntarily
help to produce a public good because theywill have the benefit of it regardless of
whether they help to produce it.Because it
is rational for everyone to free ride on the
efforts of others, no one cooperates, and the
ruleorpublic good isnot provided. Everyoneisworse off than iftheyhad cooperated, even
thougheveryonehas acted rationally.More recently, the problem has been
phrased in terms of a collective-action
dilemma.This is a situationinwhich there is
a divergence ofwhat is in the interests f the
individual andwhat is optimal for the com
munityor
larger group. In collective-action
dilemmas, rational behavior by individuals
leads them "to behave inways that are collec
tivelydisastrous" (Elster 1989, p. 17;Taylor
1990). In the case of common-pool resources,
it can be all too rational to refuse to coop
erate in conserving natural resources, even
though cooperation would have benefited
everyone.
Collective-action dilemmas have received
a good deal of attention rom social scientists
becausethey
escribemany
ofthemostvexing
problems facing humans. In fact,Taylor states,
"politics is the study fways of solvingcollec
tive action problems" (Taylor 1990, p. 224.)
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However collective-action dilemmas have
not received much attention in anthropology.
One exception is thework ofHawkes (1992),who uses concepts from rational-choice
theory to study sharing among hunters and
gatherers, and I use collective-action dilem
mas to understand rule development in the
Maine lobsterindustryAcheson 2003).
Adding to the difficultyof managing
common-pool resources is that two differ
ent kinds of rulesmust be put in place to
solve twodifferent inds of collective-action
dilemmas. First, property rightsmust be de
vised and enforced. If everyone is permit
ted to harvest a resource (i.e., open access),
the resource is almost certain to be overex
ploited by all comers because there is little
incentive to maintain it. Second, those per
mitted to exploit the resource have to agree
to establish rules curbing their exploitationrate (i.e., management mechanisms). Doing
one without the other will not suffice. From
this perspective, effective management means
that a group must solve a two-tier collective
action problem (Hechter 1990). Institutional
failure is a situation inwhich a group cannotsolve one, or both, of these collective-action
problems.
Generally,two different kinds of rules can
be used to control effort. he firstkind are
rules that limit how the resource is harvested,
i.e., rules governing the time, place, and tech
niques thatcan be used (Acheson& Wilson
1996).The second kind are rules specifyinghow much of the resource may be taken (i.e.,
a quota). Currently, individual transferable
quotas (ITQs), a solution that combines quo
tas with market-based solutions, are much in
vogue (Rose 2002).
Property rightscan be held by awide va
rietyof organizations (Acheson 1984,Hann
1998). Furthermore, rules giving access, man
agement, inheritance, and exclusion rights
can be combined in differentconfigurations
(Schlager& Ostrom
1993).In the resource
management literature, it is standard to see
property as owned or affected by local com
munities, governments, or private individuals
(Berkes 1989,p. 9). In thisreview, followthis
convention.
PRIVATE PROPERTY
The effect of private-property rights on nat
ural resources was explored in some detail by
economistsworking from the 1950s to the
1980s (Acheson 1989,Gordon 1954, Scott
1955),who made a distinction between private property (called sole owner in some of
the literature)and common property. heyconcluded that owners of private property
have an incentive to protect and make in
vestments in it becausethey
can be assured
that they, and only they, receive the bene
fits. Common-property resources, by way of
contrast, areoverexploited because no one
has any incentive to invest in those resources
or conserve them for the future. Whycon
servewhen the resourcewill likelybe taken
bysomeone else?perhaps in amatter of a few
hours (Acheson 1989,Gordon 1954,Hardin
1968)? Ciriancy-Wantrup & Bishop (1975)
challenged this analysisby pointing out thatitwas open-access resources that were sub
ject to abuse and that communally owned
resources could be managed quite well. No
one has challenged the idea that complete
private-property rights help to conserve re
sources, and itwill be helpful to review what
these economists claim are the benefits of sole
ownership.
In addition to conservation, economists
pointed out thatprivate-property ightshavea number of other virtues. Private ownership
promotes efficient use because the owners of
those resources are free to use them in ways
that grant them the highest income and to re
ject less productive options. Owners of agri
cultural land, for example,can grow crops,
lease the land, enter into an arrangement with
asharecropper,
or sell the land outright?
whichever choice is to their
advantage.
Users
of open-access resources, conversely,cannot
enter into any exchanges regardingresources
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they do not own. Their onlyrecourse is to
harvest the resource themselves asquickly
as
possible (Acheson 1989).In addition, private property is said to pro
mote efficient use of capital. Open-access re
sources are
subject
to
overcapitalization,
a sit
uation where farmore firms enter the industry
withmore equipment than isneeded tohar
vest the resource, a situation that can facilitate
overharvesting. Private property also lowers
transactioncosts bymaking itrelatively asyfor an owner to go to court and gain
com
pensation if theproperty isdamaged or de
stroyed by another person. Private-property
rights make it possible to solve a number of
resource problems by entering into market
exchanges. Eggertsson (1993, p. 2) summa
rizes the deleterious effects of the absence of
property rights: "It is obvious that the nature
of control matters for economic actors: short
term control shortens the time horizon; un
certain control discourages potentially prof
itable projects; lackof control incitescostlyraces for possession; restricted control allo
cates assets to inferior uses."
Because these economists see private prop
erty ashaving many advantages, they have
long advocated solving resource-management
problems by effecting rivate-property ightsor
by simulating such rights with mecha
nisms such aslicensing
or quotas (Acheson
1989). Contraryto what the theory suggests,
the potential formanaging natural resources
by privatizing them is much more limited
than assumed by the economists advocat
ing this solution. Ifprivatization isgoing to
solve resource-management problems, prop
ertyrightshave tobe complete and well de
fined, efficient markets for those resources
have to exist, and enforcement of property
rightsmust be possible at low cost. In the
real world, some important resources, such
asmigratory species of fish, cannot be priva
tized. Moreover, market inefficiency and mar
ket failureare common
(North 1990).Thereis no market for some resources such as air.
The primarycause of market failure is in
complete property rights, which result in ex
ternalities (Bates 1994).Negative externali
ties exist when firms are allowed to pass some
of their productioncosts to others external
to the firm (e.g.,a
polluter who damages the
property of others downstream or downwind).
Positive externalities exist when owners can
not capture all the benefits of their own pro
ductive activity e.g., the owner of a beehive
who cannot charge farmers for pollination
services). (For a morecomplete discussion of
theseproblems, see Baland & Platteau 1996,
pp. 37^47). Privatization will not solve re
sourceproblems inmany cases.
More important, even where complete
property rightsto a resource exist and mar
kets are efficient, private-property rights donot always result in resource conservation.
Under certain circumstances, peoplecan and
will overexploitresources
theyown
privately,
even when property rightsare secure. The lit
erature onpastoralists, farmers, and loggers
shows that "resource conservation is not al
ways ensured by the private property status of
theresource" (McCay & Acheson 1987,p. 9).The dust-bowl conditions of the 1930s, soil
erosion inmore modern times, and depletion
of industrial orests ll underline the factthat
at times private landowners are no more re
sponsible than users of open-access resources.
Such cases are not all that rare.What condi
tions make it rational for owners to overex
ploit their own resources? Four such circum
stances are mentioned in scattered parts of the
literature.
First,Clark (1973) has advanced themost
widely known explanationof the failure fprivate property to conserve resources. He ar
gues that "[a] corporate owner of property
rights in a biological resourcemight actually
prefer extermination to conservation, on the
basis ofmaximization ofprofits" p.630).This
occurs when the growth rate of the resource
is less than the discount rate. It does not make
sense toborrowmoney from the bank at 8%
interest to invest in a resourcethat increases
invalue at only4% peryear.This would not
be a rational investment. Under these circum
stances, itwould only be sensible to deplete
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the resource as fast aspossible and invest the
money where itwill give higher returns.
Second, long time horizons?in and of
themselves?make it rational to overexploit
privately owned resources. Forests are an ex
cellent example. Economic analyses of forests
demonstrate that forests grow soslowly that
money invested nthemwould get a farbetter
return put into other industries. Regardless of
what discount rate is used, the future value of
forests squite low (Mass& Vicary 1991).Baskerville (1995) advances a closely con
nected time-horizon argument. He argues it is
illogical to invest inslow-maturing
resources
if there are two, three, or moregenerations
between resource investment and harvest. He
pointsout that in the case ofNew Brunswick
forests, there is a strong tendencytomake de
cisions with the interests of the current gen
eration inmind. This same point can be made
of other resources. Most people?includingmost owners of firms?figure there is little
senseinvesting in a resource that someone else
is going to harvest far into the future.
Third, uncertainty about resource avail
ability can lead to overexploitation. Forests
and stocks of fish and wildlife are harvested
in acomplex and even chaotic environment,
so rapid, unpredictable fluctuations occur ow
ing to, for example, disease, pr?dation, and
weather (Wilson 2002).When biological systems are
unpredictable, the incentive for peo
pleto invest in such stocks or curb their own
exploitivebehavior is reduced because of the
uncertaintythat these activitieswill result in
any payoff.
Fourth, economic pressures also can force
resource owners to overexploit them. With
regardto the hirdWorld, Baland & Platteau
(1996, p. 46) state, "forpeople in 'extreme
poverty'.. . all that matters is consumption
today." Similar pressures can exist in indus
trialized countries. The economic situation
of someprivate-property
ownersmight be so
precarious that theyare
forcedto
forego optimal strategies (e.g., selective cutting, crop
rotation) in an effort to stay in business in
the short run, eventhough this degrades their
property in the longrun.
Any one of these four circumstances can
motivate owners of natural resources to over
exploit or fail to maintain resources at opti
mal levels. When two or more of these cir
cumstances occurtogether, strong incentives
todegrade privately owned resources can be
created.
InMaine, many of these circumstances ex
ist nthepulp andpaper industry,hich owns
alarge percentage of the northern part of
the state (Acheson 2000). In all the north
ern counties of the state, the rate of cutting
is not sustainable. Recent studies found that
the cut-to-growth ratio was 2 to 1 or higher,
indicatingat least twice as much wood was
being cut as wasgrowing back. In Piscataquis
County, the ratio was 3.6 to 1. As a result,
thequalityof stands has decreased,while the
amountof land inhardwoods and saplingshas
increasedgreatly Gadzik et al. 1998,pp. 3-4;McWilliams 1997).
Why are companies in this industryn the
process of destroying their own forests? First,
the paper industry faces a variety of economic
pressures that reduce profits to low levels. All
forest landowners contend with economic re
turns on investment that are no more than
6%, given the low rates of forest growth. Sec
ond, the pulp and paper companies have cut
throat price competition from more modern
mills built in the southernpartof theUnited
States and in foreign countries, lowered de
mand for paper products, and volatile prices
(Legasse 1997,McDonald 1997).To keep profits
at an acceptable level, the
paper companies have reacted to this situation
by keeping costs low,keeping capital equipment as
longas
possible, and running their
mills continually. hey have successfully ob
bied the state government for a variety of ser
vices, such as fire control, spruce budworm
spraying, and low land taxes. Most impor
tant,the
paper companiesare
cuttingtheir
own forests heavily, using low-cost techniques
such as clear cutting and poor-quality partial
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cuts.These strategiesavoid the full costs of
investing in sustainable forests. In this case, it
isprivateowners who are
degrading their own
forests.
GOVERNMENTGovernments do wonderful things. We have
come todepend on themfor huge varietyof
services and goods. In the past few decades,
we in theUnited Stateshave come to see the
government as ourprimary bulwark against
environmental pollution and degradation.
Governments generally attempt to pre
serve resources in two ways: First they buy
large amounts of land and resources to create parks, national forests, and biosphere re
serves; second, they pass laws and regulations
designedto protect resources.
They gener
allyhave not been doing either for long. In
the United States, the first national parkswere established in the early twentieth cen
tury.Virtually all ourimportant environmen
tal legislation (including theClean Air Act,theCleanWater Act, and theFisheries Con
servation and Management Act) was enacted
in the 1970s.During most of our history,re
source management has not been aprimary
goal of thegovernment. I believe this is still
the case inmany, but not all, of the countries
of theThirdWorld, and in countries in the
ex-Soviet block.
There is little question that these govern
ment efforts have borne fruit. Our environ
ment ismuch cleaner now than itwas a few
decades ago. There are many people in the
United States?especially professionalman
agers and the conservation community?who
assume resources can be managed only by the
government.
But government can also fail in the
resource area?sometimes massively. Some
70% of all marine fisheries are depletedor
endangered. Countries such as Haiti,
Bangladesh, Thailand, Pakistan, and thePhilippines have lost over 40% of their
forests in the past 20 years alone (Ascher
1995, pp. 3-4). Many of these resources have
been under scientific management chore
ographed by centralgovernmentsfordecades
(McGoodwin 1990).Wunsch (1999, p. 244)summarizes the situation by saying, "the cen
tralized, hierarchical, bureaucratic adminis
trativemodel has failed."Durrenberger
&
King (2000, p. 4) echo this conclusion by
pointing out that "centralized management
systems themselves can cause 'tragedies'."
The government record inThird World
countries is far worse. Baland & Platteau
(1996, p. x)write of the "absolutely appallingrecord ofmost of the national governments of
the poorest countries."
When discussing government failure, an
importantdistinction existsbetween the destruction of resources in cases where govern
ments do not perceive of natural resource con
servation as aprimary goal and cases where
governments have accepted the responsibility
for resource conservation. There are different
kinds ofgovernmentfailure nvolved ineach.
Here I focus on cases where the government
has tried to conserve natural resources and has
failed.
There isa large body of literature n pol
icy failure and government failure.On the
whole, it does not providean
adequate expla
nation for the failure of government resource
management policy.
Why do so many government efforts to
manage resources fail somiserably? In some
cases, the problem lies in the open-access na
ture of the resources. Air, for example, is not
owned, and thishasmade regulationdifficult.
But governments have property rightsover
many resources, includingoceans in the exclu
sive economic zone and national forests and
parks. In these cases, resource abuse is a result
of the mismanagement of state-owned prop
erty,resultingfrom policy failure (Marchak
1987). For avariety of reasons, government
agents cannot or will not generate effective
management rules.
The literatureon
government failuremen
tions agency problemsas the most impor
tant reason that the government works poorly.
That is, the problems of governments stem, in
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themain, from thebehavior ofpoliticians and
government officials who opt to serve their
own interests rather than those of the pub
lic (Cook & Levi 1990,p. 411;Moberg 1994;Shleifer& Vishny 1998,p. 4).These activities
can
rangefrom
votingfor the interests of con
stituents nways thatdo not serve thepublicat large to outright bribery.Corruption is a
particularlyseriousproblem in hirdWorld
countries (Wade 1982, 1985). Baland &
Platteau (1996, p. x)write of thepeople of ru
ral communities as"oppressed and repressed
by the autocratic leaders andkleptocraticcivil
and military officers of those countries."
Buchanan& Tullock (1962),Olson (1965),
and Becker (1983) see the source of government failure in the interest groups or
winning
majorities that pressure the government into
redistributing oods and services to them at
enormous cost to the public. Others see the
problem in terms of rentseeking, which oc
curs when an interest group "colonizes a gov
ernment bureau so that the bureau promotes
thespecific nterests f theorganized group at
the expense of the public as awhole" (Bickers
& Williams 2001, p. 194;Yandle & Dewees
2003).Others argue the organization of bureau
cracies contains the seeds of failure. Bureau
cratic incentives can make it difficult for
agencies to cooperate (Sproule-Jones 2002)or even to work against each other (Gibson
1999).A number of authors, includingMiller
(1992,pp. 140-42),Williamson (1970,pp. 25
27),andTullock
(1965, pp. 142-93),have ar
gued that llbureaucracies, includingthose of
the government, have problems with asym
metrical information. That is, as information
is transmitted from the bottom of a hierar
chy to the top, it is simplified nd distorted,
resulting in top executivesmaking decisions
based onfaulty information. Some eminent
social scientistssay government inefficiencycan be theproduct of deliberate design.Moe
(1990) argues politicians deliberately designgovernment institutionsto be inefficient o
avoid having an efficient nventionof their
ownmaking used against them when they
are out of power.North (1990, p. 59) pointsout that sometimes it serves the interests of
rulers to allow inefficient institutions to exist,
including monopolies, barriers to entry, and
featherbedding rules.
However,I believe two additional factors
play importantroles in thefailureof governments to
effectively manage their resource:
problems with science and top-down man
agement. Neither has been given adequate
attention.
Problems with Science
and Engineering
In large numbers of cases, government effortstomanage resources fail because of the mis
takes made by scientists and engineers. In the
modern world, an aura of certainty and infal
libility has come to surround science and sci
entists. heir advice is soughton all kinds of
matters, and it is usually accepted because it is
difficult orlaypeople to challenge them.Un
fortunately, the science involved in resource
management is plagued with problems, mak
ing scientists ll too fallible.When those ad
vising government policy makers make mis
takes, the results can be disastrous.
Scientific and engineering problems pro
duce differentkinds of problems in dif
ferent resources. For example, reforestation
attempts have failed, in part, because govern
ment foresters have imported foreign, fast
growing trees, which do not grow well or have
been killed offowing
todisease,
insect infes
tations, and inadequate soil or water (Ascher
1995,p. 9).
Government-sponsored irrigation efforts
have been plaguedwith errors.Irrigation ffi
cials and engineers have apenchant for large
scale projects, even when small projectsare
more cost efficient Ostrom 1992, p. 6). In
some cases, thesepoorlyplanned projects lost
massive amounts of money or could not be
sustained at all (Ostrom 1992, pp. 2-3); inothers, they did not deliver adequate amounts
of water to farmers who were forced to ob
tainwater by illegalmeans (Chambers 1980).
12^ Acheson
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In otherprojects,poor design problemswere
compounded by theunwillingnessofgovernments to provide adequate money for mainte
nance.Interestingly, farmers are often blamed
for theproblems stemming rom inadequate
design (Freeman& Lowdermilk 1985).Fisheries' scientists are not able to mea
sure stock sizes accuratelyor understand the
reasons that stocks change because of serious
conceptual problems and problems in gather
ingdata (Acheson 2003,Durrenberger 1996).Wilson (2002, p. 329) reportsthatwhenmea
suring stock size, "errors of measurement on
theorder of 30 to 50% are common."All too
often, the advice of scientistsfalls far off the
mark and leads to seriousconsequences.
In
the ew England groundfishery,orexample,scientists overestimated the stock size, which
exacerbated the overfishingproblem in the
1980s and 1990s. In the lobsterfishery, ci
entificproblems ledfishery dministrators o
recommend the elimination of management
measures thatwere effectiveAcheson 2003).Fishermen are
fullyaware of these inadequa
cies, and as a result, they often give litde sup
port tofisheriesmanagement plans.This, inturn, increases enforcement problems.
Top-Down Management
In the past decade, there has been alitany
of criticism of centralized government efforts
tomanage resources. Decentralized manage
ment efforts generally appear towork better in
managing forests Ascher 1995,p. 10;Gibson
et al. 2000, p. 3), irrigationsystems (Lam
1998,Ostrom 1992), andfisheries Pinkerton&Weinstein 1995).
Centralized, hierarchical government
units have a number of traits that in the
long run work against effective resource
management. Government agencies have a
strong penchant for regulatory uniformity.
As a result, central governments are apt to
promulgate
one set of rules for
large
areas
that do not take into account variations
in the local ecology.Agencies are invested
with a good deal of power,which theyoften
use to ride roughshodover the wishes of
local government units. This can result in
a lot of hostility and opposition from local
governmentofficials Ascher 1995).Government agencies concerned with re
source management generally are staffed with
well-educated engineers and scientists from
urban areas who tend to have an interest
only inscientific nd technicalaspectsof their
job and have little interest in the local cul
ture. Many cannot communicate with peas
ants (Weeks 2000); othershave contemptfor
local-level knowledge based on decades of
experience (Ascher 1995, p. 125; Anderson
1996,p. 101;Coward 1985;Lam 1998,p. 37).
Often,no
attemptis made to
organizethe
farmers, wood harvesters, or fishermen who
are affected by these plansor to frame rules
theywill support (Freeman & Lowdermilk
1985).The plans produced by agencyofficials
often have anegative effect on the resource
and impose huge costs on the resource users
aswell (Takahashi 1970,p. 52).Peasants often
react to this situation by working around of
ficials ina varietyofways (Baland& Platteau
1996,pp. 238-241; Lam 1998,p. 43).Far worse, government agents in innu
merable cases have so little understanding of
human social organizationor behavior that
they introduce changes in technology, rules,
and subsidies inways that motivate resource
users to make decisions that result in dis
aster for the resources involved. There are
many examples of such government-produced
perverse incentives. Reforestation programs
inmanyThird World countrieshave failed,in part, because the incentive system set up
by the government did not induce peopleto plant trees and maintain forests (Ascher
1995, p. 8). In another example, the gov
ernment of Kenya encouraged growing cat
tle (to provide beef for the urbanmarkets)and having fewer goats, which are more
drought resistant.When drought hit, largenumbers of cattle
died, puttingthe tribes
men intodire straightsDyson-Hudson 1985,
p. 178). Fisheries provide stillmore exam
ples. InMaine and Hawaii, conservation laws
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motivated skippers to put more effort on
the resource than they would have otherwise
(Acheson 1984, ownsend & Pooley 1995). In
California, a state law designedto increase the
amount of sardines packed for human con
sumptionresulted in a
largeamount of the
catch being turned into fishmeal (see also
McEvoy 1986,p. 140).In addition to
failingto conserve the re
source, governments actions have produced
other deleterious effects. These range from
loss of autonomy and control (Apostle &
Barrett 1992) to conflicts over resources
(Anderson 1987, Smith 2000). In addition,
government policies all too often result in the
concentration of the resource in the hands
of local elites or corporations (Leslie 2000,Palsson & Helgason 1997, Polioudaltis &
Polioudakis 2000).
Finally, and most serious, central govern
ments often "frustrate rather than facilitate"
the local level or private effortsto provide
public goods, including rules to manage re
sources (Ostrom 2000a, p. 138; Pinkerton
& Weinstein 1995, pp. 177fr).By making it
impossible for local governments to experi
ment in solving problems, top-down manage
ment policies stifle learning and curtail adap
tive responses to problem solving (Wunsch
1999).Government programs are sometimes
plagued byboth scientificproblems and topdown management simultaneously. When
this occurs, the result can be devastating. In
perhapsthe best
example,Scott
(1998)fo
cuseshis book SeeingLike a State on describ
ing the failure of state enterprisesdesignedtobetter the human condition in the twenti
eth century and the underlyingcauses of that
failure. He analyzes such diverse disasters as
China's great leap forward and Soviet collec
tivization,both ofwhich resulted inmassive
starvation, along with less deadly enterprises,
such ascompulsory villagization in Tanzania
and the planning of certain cities such as
Brazilia.
Scott says four factors underlie these dis
astrous mistakes by governments. First, states
must make complex, diverse social and eco
logicalphenomena "legible."They invent, or
example, tax lists, land maps, and census data
tomake the society theyare in charge of un
derstandable and hence controllable from the
top.To
dothis
theyhave to
simplify omplexphenomena. Second, Scott says, is "high mod
ernism,"anuncritical andunskeptical faith n
science and technicalprogress. (Note thatthis
is faith,not scientificpractice.)The practitioners of highmodernism are unwilling to
admit to thehigh degree of uncertaintyand
complexity that surrounds human and eco
logicalphenomena. Legibility andhighmod
ernism only become lethal, Scott says, when
they re combinedwith thefinal twofactors:powerful,highly centralized statewilling and
eager touse itspower tobringthesehighmod
ernistic schemes into being and a"prostrate
civilsocietylackingthecapacitytoresistthese
plans."
Of course Scott is referringto Lenin's
Russia andCommunist China, buthis analysisalso applies to cases inNorth America. One
example is Canada's failed attempts to man
age groundfish i.e.,cod, haddock, pollock) in
Newfoundland, which has resulted in stocks
of thesefishbeing reduced to 500-year lows.
According to Finlayson (1994), this disaster
can be traced to decisions of the Canadian
government. To develop the poor province of
Newfoundland, the Canadian government fi
nanced the construction of 170 large offshore
trawlerscapable of takingfarmore fish than
had been takenhistorically.
Government sci
entists said the stock could support highercatches, although industry spokesmen warned
against puttinga lotmore pressure on them.
The result wasoverexploitation, leading
to
adevastating stock failure. The causes of
theNewfoundland disaster are reminiscent of
Scott's (1998) analysis. In theNewfoundland
case, the roots of disaster are found in poor
science in the formof an overly optimistic,
politicized stock assessment used by a pow
erful, centralized bureaucracy determined to
improvea poor and relatively weak province,
with a poorly advisedfleetexpansion.
126 Acheson
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LOCAL-LEVEL MANAGEMENT
Although therearemany instances inwhich
local-level communities successfully orga
nized to conserve the resources on which
their livelihood depends (e.g., Berkes 1989,
Berkes & Folke 1998,Dyer & McGoodwin1994,McCay & Acheson 1987,Ostrom 1990,Pinkerton&Weinstein 1995), thereare also
many cases of failure. The problem is also not
confined to industrial societies. Recent work
has demonstrated thatpeople in tribal soci
etieshave done a good deal ofdamage to land
and wildlife inmany parts of theworld, in
some caseslong before contact with Western
civilization (Jacksonet al. 2001,Krech 1999).
Local-level efforts to conserve resources
fail because thepeople of those communities
either cannot devise rules tomanage them or
because the rules fail after theyare established.
Different sets of factors are involved in each.
There is agrowing
consensus that the fail
ure to get rules is traceable in great part to
the characteristics of communities. A number
of characteristics are said to make the pro
cess of
devising
and
enforcing
rules easier: a
sense of community, social capital, social ho
mogeneity, dependenceon the resource, lead
ership, and secure boundaries (North 1990,
p. 12;Ostrom 1990, 2000a,b;Wade 1988).An absence of any one or a combination of
these factors can result in the inabilityto de
velop effective conservation rules. (This isnot
to suggest there is complete agreement on the
factors that predispose communities to be able
togenerate
rules tomanage
natural resources.
See Agrawal 2002 forgood coverage of this
debate.)The reasons for the inabilityto get rules
vary from case to case and resource to
resource. In some instances, aninability
to establish and enforce boundaries under
mines efforts at local-level management (e.g.,
Ostrom 1992,2000a; Pomeroy 1994).Where
boundaries cannot be defended, outsiders can
gain the benefits of any resource-management
effort, making it senseless to invest time and
energy in conservation. Social heterogeneity
can make it impossible to produce rules. In
Nepal, for example, conflict owing to ethnic
differences ade itimpossibletomaintain and
operate some of the local irrigation systems
(Lam 1998,p. 68). Still other local efforts o
manage resources failed owing to a decrease
in the dependenceon the resource. InNepal,
when rural people got other sources of income
orpart-time city jobs, the incentive to man
age forests Pradham& Parks 1995, p. 174)and irrigationsystems (Lam 1998, p. 67) at
the local levelwas reduced.
Singleton& Taylor (1992) note thatmanycases of failure are a result of an absence of
a sense of community, which they stress is a
key factor in solving communal action levels atthe local level.A number of anthropologists
suggest the inability to cooperate in peasant
cultures is rooted in a complex of social and
culturalfactors hatmake itdifficult orpeopleto trustone another (Banfield 1958, Foster
1967). In some cultures,the incentivetofree
ride is so strong among so many groups in
the community that there is no "demand for
institutions to conserve resources" (Gibson &
Becker 2000).In many instances, efforts to manage re
sources locallyfailbecause of a combination
of such factors. good example is the efforts
of Maine lobster fishing communities to get
informaltrap limitsat the local level. In the
1950s when the number of traps beganto esca
laterapidly, high percentage of lobsterfish
ermen came to favor trap limits (i.e., a cap on
the number a single license holder could use)to reduce tangles and contain costs. When
the legislature proved unable to pass a trap
limit law, largenumbers of fishermen talked
about getting informaltrap-limit aws at the
local level. The only communities able to de
vise such rules were five small islands, which
were isolated, closely knit, with strong terri
torialboundaries.The other 92 harbors couldnot do so, and those thattried failed (Acheson
2003, chapter 3).The harbors that could not
devise informaltrap limitshad such a largenumber of fishermen that they could not mon
itor each other. Theywere
heterogeneous,
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with both full-time nd part-timefishermen
with differentnterests; hefishermendidnot
interact much and had little sense of com
munity; and these towns were not primarily
dependent on the lobster industry. Most im
portant,
none of these communities had much
exclusive fishing area, nor could they limit en
tryto thewaters theydid control.With no
boundaries or limits n thosewho could fish,itmade little sense to erect local trap lim
its because traps taken out of the water bya
group agreeing to the rules would only be re
placed by trapsput inby people from adjacentharbors.
In some cases, local-level management
effortsfail because of factors outside thecommunity. igh on this listof factors is in
terference by government officials who are re
luctantto give power to locals (Pinkerton&
Weinstein 1995). Class antagonismcan also
make it impossible to establish and enforce
local-level management rules. In Teelin, Ire
land, for example, the local priest tried to
get local fishermen to form acooperative
to
buy out salmon-fishing rights and manage the
salmonfortheir wn benefit. is efforts ailedbecause of an
unwillingness to sanction other
community members and along tradition of
poaching well-grounded in class hatred and
antagonismto authority. In Teelin, enforcing
ruleswould not onlybe difficult,twould un
dermine local solidarity Taylor 1987).There are many cases in the litera
turewhere ruleswere established by local
communities and then went out of exis
tence. In Third World countries,Western
colonial governments may undermine the
power of local political authorities and the
resource-management rules they had en
forced (Johannes 1978, Pradham & Parks
1995).Growing population, new technology,and new markets can result in growing
com
petition for resources and can motivate peo
pleto
disobey rules, invade areas of others, or
increase their exploitive efforts to the detriment of theresource (Aswani2002, Becker&
Leon 2000,McGoodwin 1994, Pradham &
Parks 1995). Becoming engaged in interna
tional markets, coupled with a weakening of
traditional rules, can have anespecially dev
astatingeffect Rose 2002, p. 249).Sometimes a number of cultural and so
cial factors can conspire to undermine ex
isting
rules. For
example,
with the Orma of
Kenya, social change made the elders unwill
ingto continue to enforce rules to control the
number of cattle. This resulted in overgraz
ing,whichEnsminger (1992, p. 151)describes
as "a classic failure of collective action."
SUMMARY AND FUTURERESEARCH NEEDS
Few generalizations can be made about thereasons humans are unable tomanage natural
resources, save for the fact that failure is trace
able to a lackofwillingness or abilityto solve
collective-action dilemmas toproduce effec
tive rules. As noted above, the authors of the
literature on resource management and insti
tutionshave identified largenumber of such
factors thatmake itdifficult o produce such
rules. However, ourknowledge is far from
complete at this point. Our understanding of
theconditionsunder which institutions ail is
messy and poorly thought-outat best. This
problem deserves far more attention than it
has received to date.
In an effort oextendandmodify thisbodyof theory, Imake three points about institu
tional failure. First, there is no universal solu
tion to the problems of resource management.
Private owners, governments, and local com
munities all can be effective inmanagingnat
ural resources.They also can fail.Moreover,
alarge number of circumstances can cause
that failure. For private-property institutions
towork, a set of conditions arerequired that
are not commonly found in reality. Prop
erty rightsare often incomplete,
so external
ities abound. Even ifprivate-property ightsare secure and markets are efficient, poverty,
economic competition, and problems associated with slow-growing
resources can lead
to overexploitation. State efforts to manage
resources founder because of a wide variety
128 Acheson
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of problems, ranging from rentseeking, win
ningmajorities, and deliberately introduced
design flaws to agency problems and out
right corruption. Governments of industrial
ized countriesoftenare stymiedbyproblems
stemmingfrom
poorscience and
top-downmanagement. Local-level management is of
ten a precarious enterprise, at best. Efforts to
manage resources at the local level are likelytofail f ommunitiesdo nothave therightset
of characteristics.
Management will be effectiveonly ifre
sources are matched with governance struc
tures and management techniques. A gov
ernance structureusing
atechnique
on one
resource might succeed, whereas the same
governance organization using the same tech
nique might failmiserably when applied to
another resource. For example, tradable en
vironmental allowances have worked well in
controlling air pollution (Tietenberg 2002),but such programs (e.g., ITQs) have gener
allynot done well inmanaging fisheriesbe
cause theyhavemotivated fishermentohigh
grade (discard all fishexcept themost desir
able) (Leal 2002), have led to a concentration
incontrolbya smallelite (Palsson& Helgason
1997), and in many cases have not con
served the fish stocks (Organization forCo
operation and Development 1997, p. 82).
To manage resources effectively,we will
have to be quite imaginative.We will need
to combine various elements of privatization,
government control, local control, and man
agerial techniques (e.g.,selective
cuttingof
forests, TQs forfisheries) inways we have
notimagined could be done. The exact com
bination used will have tovarywith the specific resource and place.
Second, one of the basic axioms running
through the literature on resource manage
ment is that failure or success is a result of one
factor or a few separate factors (see Agrawal
2002). There has been littleattempt to dis
cuss factor interdependence and the way thatvarious complex factor combinations cause
resource-management attempts to fail. This
seems a strange oversight, given there is a
growing consensus among environmental sci
entists that stocks of fish, wild animals, and
other natural resources are part of complex
and possibly chaotic systems (Ludwig et al.
2002). In either case these populationsare
subjectto
unpredictable changesin size in re
sponse to acomplicated set of interactive fac
tors (Acheson& Wilson 1996,Wilson 2002).If this is true,and I believe it is,thepenchantof social scientiststo see institutionalfailure
in terms of single factors or a list of uncon
nected factors s simplistic. fwe are going to
modify and extendourunderstandingof insti
tutional failure, we need to see such resource
management institutions as parts of complex
socioenvironmental systems, and the successor failure f those institutionseeds tobe con
sidered as the result of acomplex of factors
working in tandem. Inmany cases, the factors
producingsuccess or failure are quite subtle.
Ostrom writes, "we have all seen in thefield
nearby villages facing similar circumstances
sometimes succeeding in overcoming collec
tive action problems and sometimes failing"(E. Ostrom, personal communication).
Moreover, the complex nature of these so
cioenvironmental systems also means it is go
ing to be difficult o improve the science on
which resource management isbased. We may
have to admit we cannot predict changes in the
quantities of resources at all, and we may need
to concentrate instead ondeveloping ways to
manage resources in the face of great uncer
tainty Acheson&Wilson 1996,Ludwig et al.
2002,Wilson
2002).Third, rules tomanage resources and the
enforcement of those rules are public goods.
The provision of public goods isusually the
purview of governments because such goods
cannotbe provided bymarkets andfree rider
problems abound (Ostrom et al. 1994).This
means governments need to be involved in the
management ofmany different indsofnatu
ral resources inmany parts of the world. Given
the inevitability f government involvement,the failure of governments to manage many
resources effectively s particularlydisturb
ing. How can weimprove the track record of
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governments? One way to begin is to ask the
following questions: How much government
dowe need?What kind ofgovernmentdowe
need? One set of scholars has answered these
questions by calling for co-management that
involvesmanagerial authority eing splitbe
tween government units and industry groups
(Baland & Platteau 1996, Pinkerton 1989,Pinkerton&Weinstein 1995).Another sug
gestion is polycentric governance, utilizing
the federalistprinciple on which theU.S.
government was formed. That is, resource
management would be accomplished bya
hierarchy of governmental units. Author
itywould be given to the smallest unit in
the hierarchy possible (local government,state
government), but it needs to be rec
ognized that some functions can be per
formed only by central governments (Ostrom
1999).
ACKNOWLEDGMENTS
An earlier version of this article waspresented
as the keynote address at the meetings of the
InternationalAssociation for the Study ofCommon PropertyResources, June 3, 2000, in
Bloomington,Indiana. The author wishes to thank Elinor Ostrom for her comments on an
earlier draft.
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