4. Politicized reefs
4.2. The environment as a common-pool resource
Continuous research across multiple sectors and disciplines inevitably leads to the development of new theories to explain phenomena that do not fit within dichotomous paradigms. The categorization of goods is a case in point. In 1954, Paul Samuelson divided ‘goods’ into two types: private and public.153 Public goods have two defining aspects: (1) nonexcludability, that is to say, non-payers cannot be excluded from the benefits of the good and/or service; and (2) nonrivalrous consumption, which means that one person benefitting from the good does not diminish the ability of other people to do the same.154,155 In contrast, private goods are both excludable and rivalrous. Then, in 1965, James Buchanan added what he perceived as a missing link to the conceptual distinction: ‘a theory of clubs.’ Accordingly, individuals who belonged to clubs – that is to say, co-operative private associations – would have access to nonrivalrous but small-scale goods that non-members are excluded from.156 Simply put, it refers to a membership arrangement from which exclusion is possible. Finally, a fourth type of good was put forth by Elinor Ostrom and Vincent Ostrom in 1977: ‘common-pool resources.’ Common-pool resources are natural or human-made resources which may benefit a group of people, but one actor’s use or development of the resource subtracts from the overall yield.157 It thus shares the attribute of subtractability with private goods and difficulty of exclusion with public goods.158 Table N provides an overview of these four types of goods and some common examples to which they are attributed.
153 Paul Samuelson, 1954, ‘The Pure Theory of Public Expenditure,’ in The Review of Economics and Statistics 36:4, November 1954, p. 387.
154 Tyler Cowen, 2013, ‘Public Goods and Externalities,’ The Concise Encyclopedia of Economics.
Accessed 19 May 2017. http://www.econlib.org/library/Enc1/PublicGoodsandExternalities.html
155 Matthew Kotchen, 2012, ‘Public Goods,’ draft chapter prepared for Environmental and Natural Resource Economics: An Encyclopedia, eds. J. Whitehead and T. Haab, Santa Barbara, CA: ABC-CLIO Inc., p. 1.
156 James Buchanan, 1965, ‘An Economic Theory of Clubs,’ Economica, New Series 32:125, February 1965, p. 1. (pp.1-14).
157 Elinor Ostrom et al., 1994, Rules, Games, and Common-pool Resources, USA: University of Michigan Press, p. 4.
158 Elinor Ostrom, 2009, ‘Beyond Markets and States: Polycentric Governance of Complex Economic Systems,’ Workshop in Political Theory and Policy Analysis, Indiana University, p. 412.
Table 2: Four types of goods.159
Note: Ostrom (2005) changed the name from a ‘club good’ to a ‘toll good’, as small-scale public associations may provide similar goods to private associations. 160
As can be observed, the stakeholders and their incentives vis-à-vis the various types of goods are categorically different, and devising institutions or means through which to manage them are likewise pluralistic. This is especially palpable for common-pool resources, for which the level of subtractability of use and difficulty of exclusion are both high. Access to the sea and its resources is a prime example of a CPR. The difficulty of coral reef management and protection whilst balancing incentive dynamics is epitomized through the above discourse, proving that “simple solutions do not exist for managing complex ecologies.”161 Nevertheless, efforts to move beyond this social dilemma and to develop a suitable framework for all actors involved are key to protecting important resources.
Incentives toward excessive resource exploitation have engendered the ‘tragedy of the commons,’ a term that is frequently cited in environmental policy publications.
This term was first introduced by Garrett Hardin in 1968 and has been the topic of much debate ever since. Hardin was a major proponent of state-established institutional arrangements (centralized government and private property) in sustaining CPRs over the long term. Hardin uses the example of a pasture “open to all” on which each herdsman “will try to keep as many cattle as possible (…) to maximize his gain” despite being locked into a system that is limited.162 “Therein is the tragedy,” Hardin writes,
159 Ibid, p. 413.
160 Elinor Ostrom, 2005, Understanding Institutional Diversity, Princeton, NJ: Princeton University Press, p. 24.
161 Elinor Ostrom, 2008, ‘Institutions and the Environment,’ Institute of Economic Affairs, September 2008, p. 28.
162 Garrett Hardin, 1968, ‘The Tragedy of the Commons,’ Science 162:3859, New Series, 13 Decemher 1968, p. 1244.
for “ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.”163 In essence, the tragedy of the commons is an economic theory that postulates that individuals try to reap the greatest benefit from a CPR, exploiting it to such an extent that demand overwhelms supply and the resource is depleted or destroyed. Another problem that arises with the management of CPRs is the free rider problem. From an economic perspective, the free-rider problem is a market failure as individuals can obtain the benefits of a good and/or service without contributing to the cost.164
To offset these challenges, governmental intervention is often used as a coordinating mechanism. A hierarchical government that induces compliance through such means as rules and taxes has been promulgated as the solution to ‘self-interested individuals’ who only pursue self-seeking activities.165 As mentioned above, two conventional solutions promulgated by Hardin for managing resources are relegating the control of all CPRs to centralized agencies or the development of private property rights. However, one drawback of Hardin’s theory is that he failed to include the possibility of users extracting themselves from this system of overuse by developing and maintaining self-governing institutions. Local self-governance involves delegating authority for environmental protection to the local level and permitting the local communities to “determine access and harvesting rules without external authorities countermanding them.”166 What is more, empirical research has put forth evidence that widespread central control of common-pool resources has in fact accelerated resource deterioration due to various factors, including weak institutions, corruption, inefficiency, inter alia. Additionally, the nationalization of CPRs undermines their traditional management by local communities. Oftentimes, these ‘outsiders’ and their activities, although considered legal by the larger political regime, neglect the traditional access and harvesting rules and worsen the sustainability of a given resource.
A relevant example of this happening is the depletion of flying fish and the destruction
163 Ibid.
164 E. C. Pasour, Jr. 1981, ‘The Free Rider as a Basis for Government Intervention,’ The Journal of Libertarian Studies V:4, Fall 1981, p. 453.
165 Ostrom 2009:409.
166 Elinor Ostrom, 1997, ‘Self-Governance of Common-Pool Resources,’ Workshop in Political Theory and Policy Analysis, Indiana University, p. 16.
of coral reefs, two resources that are intricately linked to the traditional lifestyle of the Tao on Orchid Island (discussed in section 6.1.)
Overall, developing institutions that are suitable to the environmental situation and ecological systems being used is not an easy task for any governing body.
Satisfying stakeholder incentives whilst ensuring the long-term survivability of a CPR is especially challenging given the latter’s high levels of subtractability of use and difficulty of exclusion. Creating national policies that can unambiguously be applied to all environmental management scenarios is not possible. Even amongst academics there does not exist a single well-developed theory that may explain all the diverse outcomes obtained in microsettings; whereas some purport that centralized control is necessary, more and more scholars endorse a polycentric approach, where key management decisions should be made as close to the scene of events and the actors involved as possible.167 , 168 Indeed, 21st century academic discourse is visibly developing the argument that there is an overreliance on stick-figure models and the ‘one-size-fits-all’
methodology and instead, an experimental, adaptive approach to environmental governance should be developed.169
Significantly, efforts to move beyond this social dilemma and to develop a suitable framework for all actors involved are key to protecting coral reefs and managing coastal conservation. It is thus necessary to first delineate who these actors are, pinpoint the incentive dynamics, and finally attempt to propose what governance approach may fit best in this given scenario.
Regardless, the government is an important stakeholder in environmental disputes and developments. It is thus necessary to examine the role of the government vis-à-vis environmental and, by extension, coral reef protection and management. The potential ways to ameliorate the operations of governmental institutions to regulate the use of common-pool resources will be expanded upon later in this paper; for now, however, it is beneficial to examine how Taiwan developed its environmental awareness on a national level, and what kind of governmental institutions emerged.
167 Speech given by Elinor Ostrom in Ishita Haldar, 2011, Global Warming: The Causes and Consequences, New Delhi: Mind Melodies, p. 127.
168 Ostrom 2009:435.
169 Ostrom 2008:28.