Contemporary research on the outcomes of diverse institutional arrangements for governing common-pool resources (CPRs ) and public goods at multiple scales builds on classical economic theory while developing new theory to explain phenomena that do not fit in a dichotomous world of “the market” and “the state.” Scholars are slowly shifting from positing simple systems to using more complex frameworks, theories, and models to understand the diversity of puzzles and problems facing humans interacting in contemporary societies. The humans we study have complex motivational structures and establish diverse private-for-profit, governmental, and com munity institutional arrangements that operate at multiple scales to generate productive and inno vative as well as destructive and perverse outcomes ( Douglass C. North 1990, 2005 ). In this article, I will describe the intellectual journey that I have taken the last half century from when I began graduate studies in the late 1950s. The early efforts to understand the poly centric water industry in California were formative for me. In addition to working with Vincent Ostrom and Charles M. Tiebout as they formulated the concept of polycentric systems for gov erning metropolitan areas, I studied the efforts of a large group of private and public water producers facing the problem of an overdrafted groundwater basin on the coast and watching saltwater intrusion threaten the possibility of long term use. Then, in the 1970s, I participated with colleagues in the study of polycentric police industries serving US metropolitan areas to find that the dominant theory underlying massive reform proposals was incorrect. Metropolitan areas served by a combination of large and small producers could achieve economies of scale in the production of some police services and avoid diseconomies of scale in the production of others. These early empirical studies led over time to the development of the Institutional Analysis and Development (IAD) framework. A common framework consistent with game theory enabled us to undertake a variety of empirical studies including a meta-analysis of a large number of existing case studies on common-pool resource systems around the world. Carefully designed experimental studies in the lab have enabled us to test precise combinations of structural vari ables to find that isolated, anonymous individuals overharvest from common-pool resources. Simply allowing communication, or “cheap talk,” enables participants to reduce overharvest ing and increase joint payoffs contrary to game theoretical predictions. Large studies of irrigation systems in Nepal and forests around the world challenge the presumption that governments always do a better job than users in organizing and protecting important resources.

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Beyond Markets and States: Polycentric Governance of Complex Economic Systems

The economics of fishing and modern capital theory: A simplified approach☆

The inefficiencies of common property fisheries are of continuing concern to economists' The early work by Scott Gordon (1954) and Anthony Scott (1955) outlined the problem and later studies by James Crutchfield and Giulio Pontecorvo (1969) and Frederick Bell (1972) provided empirical estimates of the losses that result Those studies were followed by the dynamic models of Colin Clark (1976), and James Quirk and Vernon Smith (1970) of optimal harvest rates and the use of corrective taxes or quotas to achieve them But in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria, most fisheries retain common property aspects with overcapitalization and excessive labor input Why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper We examine a number of fisheries, but focus on the Texas shrimp industry, which is one of the nation's most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere It is considered overcapitalized and catch per unit of effort is falling2 Examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses The regulatory environment in Texas is complicated by conflict within the fishery between inshore and offshore fishermen The latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the Gulf The inshore fishery is highlighted by another issue-the recent resettlement of some 30-45,000 Vietnamese refugees, including many fishermen, along the Texas Coast (Marine Advisory Service, Paul Starr) Their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights Bay shrimpers have lobbied the Texas Legislature for broad limits on new entrants Yet, ironically, the sale of additional boats by individual shrimpers to the Vietnamese has facilitated entry of the refugees into the fishery Regulations in the Texas shrimp and other fisheries are incomplete, leaving many options for rent dissipation uncontrolled, because of high contracting costs among fishermen and political factors that mold government actions Contracting costs are high among heterogeneous fishermen, who vary principally with regard to fishing skill3 *Montana State University and Texas A&M University, respectively We benefitted from comments by Terry Anderson, Raymond C Battalio, Gardner Brown, Oscar Burt, Micha Gisser, Wade Griffin, John R Moroney, Anthony D Scott, Peter Temin, and participants in workshops at Texas A&M University and the University of Washington Research assistance was provided by Scott Barnhart and Phil Mizzi Funding was provided by Sea Grant, Texas A&M University 'Throughout this paper we use the terms common property and open access interchangeably Here the terms describe a situation where no property rights, group, or individual exist(s) for the resource 2Catch per unit of effort in the inshore Texas Gulf and Federal Gulf waters is presented for 1963-77 by W L Griffin, C G Tydlacka, and W E Grant They show catch per unit of effort generally falling in inshore and offshore waters While catch per unit of effort fluctuates from year to year, it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 The common property nature of the fishery is reflected in the following statistics Since 1975 the number of vessels has grown by 23 percent (Nelson Swartz) For fish houses the record of entry is similar Between 1970 a d 1977, the number of firms grew from 259 to 287, though during that period, many left the industry as others entered The number of fish houses was calculated from license data supplied by the Texas Parks and Wildlife Department The record of entry by fish houses suggests that monopsony as discussed by Colin Clark and Gordon Munro is absent in the fishery 3There may be minor differences in labor-leisure choices and capital, but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill Government regulations in the Texas bays restrict capital, and our empirical evidence shows boats to be relatively homogeneous

Contracting Problems and Regulation: The Case of the Fishery

This excerpt describes the intellectual journey that I have taken the last half-century from when I began graduate studies in the late 1950s. The early efforts to understand the polycentric water industry in California were formative for me. In addition to working with Vincent Ostrom and Charles Tiebout as they formulated the concept of polycentric systems for governing metropolitan areas, I studied the efforts of a large group of private and public water producers facing the problem of an overdrafted groundwater basin on the coast and watching saltwater intrusion threaten the possibility of long-term use. Then, in the 1970s, I participated with colleagues in the study of polycentric police industries serving U.S. metropolitan areas to find that the dominant theory underlying massive reform proposals was incorrect. Metropolitan areas served by a combination of large and small producers could achieve economies of scale in the production of some police services and avoid diseconomies of scale in the production of others.

This article presents a conceptual framework for theoretical and empirical analysis of the multiplicity of behavioral problems encountered in common-pool resources (CPRs). This framework is used to specify more clearly the strategic content of CPR dilemmas and to show their interaction. The framework shows how general theoretical constructs (e.g., Prisoner's Dilemma and coordination games) apply to these behavioral dilemmas. Finally, results from a case study and a set of laboratory experiments demonstrate the applicability of this framework in designing and conducting empirical research on CPRs.

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The Nature of Common-Pool Resource Problems

This paper demonstrates the effect of technological externalities on the production of northern lobsters, a common-property resource. An increase in effort (that is, size of the industry) of 100,000 traps fished will depress landings per trap for the individual firm by 2.4 pounds. Therefore, the northern lobster industry produces so as to equate average revenue to long-run average cost. Approximately one-half of the present fishing effort would be needed to achieve economic efficiency or marginal cost pricing. The goal of allocative efficiency should be weighed against the strategy to provide somewhat greater employment, especially in rural areas where labor opportunity cost is relatively low.

Technological Externalities and Common-Property Resources: An Empirical Study of the U.S. Northern Lobster Fishery

An Inventory of Demand Equations for Fishery Products

s from variations in the size of the firm by assuming the latter is technologically predetermined, allows long-run changes in output only by changing the level of homogeneous operating units, gives unambiguous results with respect to the impact of effort upon the biomass, and can treat the internalization of externalities-either through sole ownership or taxation without incurring dynamically unstable outcomes. The integration of the classical theory of the firm and the traditional theory of commercial fishing remains an unfinished task.

On Models of Commercial Fishing: A Defense of the Traditional Literature

Bio-Economic Relationships for the Maine American Lobster Fishery with Consideration of Alternative Management Schemes

In a recent issue of this Review, Vernon L. Smith advanced a general miiodel of the economiiic aspects of production from natural resources. Unfortunately, Smith makes a nuimber of unsound assumptions and methodological errors in formulating his general model of natural resource exploitation. We shall show, using commilercial fishing as a particular example, that the structure of Smith's model leads to absurd conclusions. In addition, we shall develop the correct specification for the competitive recovery of a fishery resource.

Frederick W. Bell

Papers

Technological Externalities and Common-Property Resources: An Empirical Study of the U.S. Northern Lobster Fishery

An Inventory of Demand Equations for Fishery Products

On Models of Commercial Fishing: A Defense of the Traditional Literature

Bio-Economic Relationships for the Maine American Lobster Fishery with Consideration of Alternative Management Schemes

Economics of Production from Natural Resources: Comment