Re-telling the Tale of the Commons: A Tale of Rent Seeking, Corruption, Stockpiling and (Even) Tragedy

Abstract

The tale of the tragedy of the commons is re-told as a problem of vertical governance rather than a problem of horizontal contracting. States make the fundamental determination concerning the amount of management conferred upon resources within their territories, and the groups using these resources are substantially constrained by this prior determination. In particular, it is demonstrated that it is unlikely that institutions might arise endogenously at the user level, when the state has abrogated its responsibility to generate them at the sovereign level. States make the decision to pursue something other than first-best management because institutions require investment and as such must compete against other such investments within the economy. This results in a distinct form of the tragedy of the commons, in which other agents attempt to enter and to exploit the vacated governance positions abrogated by the state, resulting in problems of corruption, waste, and worse.

Distributive justice, corruption, and entrepreneurial behavior

“…In direct contrast to economic freedom's perceived support of distributive justice is corruption, which undermines distributive justice perceptions by allowing people outside of the value creation process (i.e., politicians, bureaucrats, and competitors) to appropriate rewards in excess of their contributions or to benefit without contributing at all (Swanson 2007;Wesolowski and Mach 1986). If entrepreneurs believe that corruption is normal, required to get things done, and/or necessary to compete, then the perceived causal relationship between contributions and outcomes is likely to be weakened, undermining the perceived distributive justice of the system, especially when this corruption pervades the system.…”