Reformatting Ostrom Design Principles to Make Corporations a Common Pool Resource: Using System Science to Extend Ostrom Scholarship Globally

Abstract

CEOs of the largest US corporations in 2019 adopted as their corporate purpose to provide benefits for all their stakeholders. However, they possessed no creditable process to achieve this with shareholders competing with other stakeholders for benefits. Introducing polycentric governance creates a way to solve this problem while transforming corporations into a Common Pool Resource. 

As investors get overpaid in a way accountants cannot report when corporate property rights have no time limits, their static and exclusive rights need replacing with time limited, inclusive, and dynamic rights. These create an endowment corporation that distributes by book entries all the property rights of investors, over the life of a twenty-year patent, to newly created stakeholder shares. Shareholder primacy is maintained while investors are replaced by individual stakeholders residing in the local bioregion. 

Business, investor, and management continuity can be maintained indefinitely from dividend re-investment plans funding offspring enterprises. A self-financing tax incentive for investors who formed self-governing endowment corporations would obtain bigger, quicker, less risky profits with stakeholders obtaining a new channel of benefits. Dividends would privatise the need for welfare and big government. Circular bio-regional economies are created with enriched polycentric self-governing bottom-up stakeholder democracies.

Keywords: Biomimicry, , Bio-Regional Governance, Circular Economies, Contestation, Ecological Firms, Localisation, People Plague, Self-Reliance, Tax Incentive, Tensegrity, Time Limits, Universal Wellbeing

JEL Classification: A11, B59, C79, C93, D02, D23, D31, D63, D71, D85, E02, F18, K34, L11, M13, P14, Q01, Q20