The Tragedy of ‘The Tragedy of the Commons’ – Hardin vs. the Property Rights Theorists

28 Pages Posted: 3 Mar 2020 Last revised: 3 Jun 2021

See all articles by Jonathan M. Karpoff

Jonathan M. Karpoff

University of Washington - Michael G. Foster School of Business; European Corporate Governance Institute (ECGI)

Date Written: June 3, 2021

Abstract

Garrett Hardin’s “The Tragedy of the Commons” (Hardin, 1968) is widely influential but fundamentally incorrect. Hardin characterizes the commons problem as arising from the exercise of free will in a world with limited carrying capacity. Hardin’s solutions to this problem emphasize coercive policies, including traditional command-and-control environmental and natural resource regulations. In contrast, the property rights literature that preceded Hardin – especially Gordon (1954), Scott (1955), Coase (1960), Alchian (1965), and Demsetz (1967) – shows that the commons problem arises from non-exclusive use rights. Non-exclusivity is part of a broader class of restrictions on private ownership, any of which fosters dissipative rent seeking. The property rights literature focuses on value creation rather than just the physical exhaustion of the commonly owned resource. It is therefore more general, and highlights solutions that are less coercive and dissipative, than the more widely known views espoused by Hardin.

Keywords: Property rights, commons, non-exclusivity, environment, externalities, fisheries

JEL Classification: B31, D62, K11, L51, Q50

Suggested Citation

Karpoff, Jonathan M., The Tragedy of ‘The Tragedy of the Commons’ – Hardin vs. the Property Rights Theorists (June 3, 2021). European Corporate Governance Institute – Finance Working Paper No. 750/2021, Available at SSRN: https://ssrn.com/abstract=3531981 or http://dx.doi.org/10.2139/ssrn.3531981

Jonathan M. Karpoff (Contact Author)

University of Washington - Michael G. Foster School of Business ( email )

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European Corporate Governance Institute (ECGI) ( email )

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