Managing natural resources: Coasean bargaining versus Ostromian rules of common governance

Abstract

The purpose of this paper is to explore the forms of ownership over natural resources according to the theories of Coase and Ostrom. Coase's work is regarded as a theoretical basis for establishing private ownership over natural resources, whereas Ostrom's theory is considered the most influential one supporting common/collective ownership. The key research question of the paper is whether the two theories are indeed opposite and contradictory. The novelty of our approach is that we account for the nature of common property rights in light of Buchanan's theory of clubs, thereby showing that the opposition between the concepts of Coase and Ostrom is exaggerated. The point is that ownership is generally considered only in its most extreme formspurely private and purely public. By referring to Buchanan, we show that in contexts of common/collective entitlements with varying degrees of publicness/privateness, Coasean bargaining and Ostromian rules of common/collective governance can coexist and work together effectively. On this basis, this research proposes a framework for defining policies for managing natural resources.

Complex private-common property rights in institutional and planning theories

“…Still, these resources, like any other form of private-common property, are private to the group/community, that is, to the nation, and are excludable to outsiders, that is, to foreigners. National defence and road infrastructure are meant to serve only nationals – foreigners can benefit too, but only as guests, and to access national public goods, foreigners need visas (Slaev, 2016a; Slaev and Collier, 2018). Visas are a good example that nations can exercise private property rights and exclude foreigners from access to national public goods.…”

“…The role of the excess amount is important, but it is only a criterion: it does not explain why individuals would choose private or collective entitlements, that is, what the associated benefits and costs are. The key benefit of private/individual entitlements is their high performance and efficiency (Slaev, 2016a; Slaev and Collier, 2018). Private/individual management of resources is efficient because all interests and all efforts and capabilities used to manage resources belong to one and the same individual or entity.…”

Coupling property rights with responsibilities to improve conservation outcomes across land and seascapes

“…These social processes are imperfect in establishing (complementary) relationships between rights and responsibilities (Freyfogle, 2001), particularly in the context of the land and seascape, as discussed above. For example, rights‐holders are capable of externalising detrimental effects of their decisions onto each other, with little recourse for those experiencing those effects (Demsetz, 1967; Sikor et al., 2017; Slaev & Collier, 2018).…”

“…Despite the benefits that can arise from property rights regimes (see, Libecap, 2009), an increasing number of authors argue that, as an institution, they are failing to serve the public interest in protecting ecosystem function (e.g., Bromley, 1990; Libecap, 2009; Lockie, 2013; Slaev & Collier, 2018). For example, landholders often have rights to clear native vegetation on their property to create commercial profitability in land.…”

Swiss land improvement syndicates: ‘Impure’ Coasian solutions?

“…Holcombe (2013) puts forward contractual agreements as a means of maximising potential gains among parties directly affected by externalities. Slaev and Collier (2018) highlight the relevance of Coasian approaches for the establishment of individual responsibilities, and thus the efficient and sustainable management of natural resources. 'Pure' Coasian solutions might only be available for minor planning issues, for example in addressing the conflict of interests between two neighbours in the use or development of their properties.…”