Tragedy of the Commons

The Tragedy of the Commons is a 1968 paper by biologist Garrett Hardin. The paper was meant to focus attention on the lack of technical solutions to arrest overpopulation, but its explanation for why commonly-held resources such as groundwater, grazing land, and fisheries are prone to inevitably degrade has influenced the development of environmental and economic policies for resource management.

A number of users take advantage of a shared resource. As the quality of the resource deteriorates or as it becomes scarcer, the users intensify their use. Eventually, the resource is depleted. The tragedy of the commons is a situation where there is the overconsumption of a particular product/service because rational individual decisions lead to an outcome that is damaging to the overall social welfare. The tragedy of the commons theory assumes that when making decisions, people take the course of action that maximises their own utility. However, if many people seek to do this, the net effect may be to deplete a resource making everyone worse off in the long run. The tragedy of the commons was first mentioned by the Victorian economist William Forster Lloyd in 1833. He used a hypothetical area of common grazing land, in which villagers all took their cows to this common grazing land, but this led to overgrazing and a loss of the resource. In theory, individuals could limit their use so that they do not deplete the common resource. However, there is a free-rider problem where people rely on others to cut back their production. If everyone free-rides and maximises their use, then we get a situation of over-consumption.

Example of Tragedy of the Commons

For example, we may have a plot of land which could tolerate 20 animals grazing per year. This level is sustainable from year to year. However, if the land is open, there may be 40 villagers each bringing their own cow to graze the land. This leads the village green to be overgrazed, meaning the village lose this common land. If there was regulation or a common agreement to limit grazing to 20 cows, then the net welfare would be much greater for the village as it would last from year to year.

Over-fishing and Tragedy of the Commons

Individual fishermen have an incentive to catch as many fish as possible. However, if many fishermen have this same motive, then it can lead to fish stocks being depleted as fish are caught at a faster rate than they are replenished. Unchecked, this can lead to a collapse in fish stocks due to over-fishing. If one individual fisherman holds back on his catch to try and preserve overall fish stocks, it may prove futile because many other fishermen continue to catch as much as possible. The net result is that fisherman does not have any incentive to hold back, so they might as well try and catch as much as possible.

Diagrammatic Explanation:

A number of individuals or groups make use of a common resource. In the beginning, the resource seems to be abundant or unlimited. Users separately take advantage of the resource as if they were the sole owners or beneficiaries. They do not take into account use by other users. No one is aware of, gives any thought to or considers the relevance of limits to the resource. After a while, less of the resource is available, or the resource is less accessible, or its quality diminishes. Users intensify their efforts to get enough of the resource, to get it when they need it, and to get the quality they need. If there is no intervention, no advocate for the common resource, and no adequate warning of the limits, the resource disappears completely, becomes entirely inaccessible, or is degraded to the point of uselessness. 

Figure 1

There are three trend lines in the graph. First, the total activity or total use of the resource by all users rises, sometimes exponentially. In the full lifecycle of the resource, the total use line may finally drop to zero. Second, the quantity or quality of the resource is level for a while, then drops off, sometimes exponentially, and may go to zero. Third, the gain from, benefit from or satisfaction with use of the resource either rises or is stable at a high level for a while, then begins to drop off and may finally plunge to zero.

Policies to Overcome Tragedy of the Commons

1. Voluntary agreements with informal arrangements and local monitoring. A strong sense of civic responsibility can make these arrangements more successful.

2. Government regulation. Government regulation can limit fish catches or the size of fishnets to allow young fish to escape.

3. Clearly defined property rights. If common land is given over to private ownership, the private owner has a stronger incentive to manage the resource for optimum outcome.