Overcoming The Tragedy Of The Commons

Updated: Jan 18

The “tragedy of the commons” is one of the most influential ideas in the modern-day environmental movement. Coined by ecologist Garrett Hardin in 1968, the “tragedy of the commons” is the overconsumption of a shared resource by individuals who are acting out of self-interest rather than attending to the long-term interests of the group. Hardin used the metaphor of a shared area of pasture land to illustrate his theory. In this example, individual farmers have a profit incentive to increase the size of their herds, but the quality of the land degrades as a result of overgrazing. Hardin believed that the depletion of common resources was a natural consequence of individuals pursuing their own rational self-interest, and he was particularly concerned with the effects of population growth on the quality of natural resources such as land, water, air, and fisheries. Hardin believed that societies cannot rely on individual conscience to protect the commons; instead, common resources must be privatized or regulated by the government. This theory has frequently been cited in support of both government-led approaches to resource management and privatization of public property. 

One of Hardin’s biggest critics was political economist Elinor Ostrom, who won the Nobel Prize in Economics in 2009 for her research on how communities have successfully managed “common pool resources” such as fisheries, forests, and grazing lands. Her fieldwork isolated several factors linked to stable resource management, including resources with clearly defined boundaries (e.g. land), collective decision-making processes by the people who use the resources, incentives for responsible use, clearly defined sanctions and monitoring procedures for overuse, and local adaptions to governance systems. Ostrom believed that humans are more complex than Hardin’s assumption of immediate self-interest, and resources can be managed through local governance solutions to local problems (as opposed to privatization or government intervention). While she agreed that resource management is a difficult problem, she did not believe that it was the inevitable “tragedy” that Hardin described. Ostrom’s work argued against a unitary solution to common-pool resource management and instead emphasized that solutions must be contextualized within local communities.

The intellectual debate between Hardin and Ostrom can be viewed through the Systems of Exchange framework. Hardin’s theory makes use of assumptions from the Price System of Exchange, namely that actors are autonomous agents who seek to maximize their immediate self-interest in each exchange. By pairing this assumption with the premise that actors can pursue their self-interest by increasing consumption of a shared resource, it is easy to see how the “tragedy of the commons” seemed like an inevitability to Hardin. However, Ostrom’s empirical and theoretical work made room for orientations to action other than immediate self-interest. For example, she showed how farmers in the Swiss Alps privatized farmland but kept grazing land as a shared resource because it supported not only their own interests but the interests of the community. In this region, the location of the best pasture land changes every year, so sharing the land allows farmers continual access to the best grazing spots. This practice also allows farmers to maintain a thriving agrarian community. In order to prevent overconsumption, they devised a governance structure that places strict limits on the number of grazing animals per farmer and enforces graduated sanctions for breaking the rules. This community thus employs logics from the Associative System of Exchange because the partnership is mutually beneficial to all of the farmers, and it also draws on the logic of the Communal System of Exchange by prioritizing loyalty to the community over individual self-interest. Ostrom’s work illustrated that the Price System works well for private goods in a competitive market, but Associative and Communal Systems are better suited for the management of public goods.

Of course, the management of common resources is a complicated issue. While the governance structures observed by Ostrom may work well for local, tangible resources (e.g. grazing land and fisheries), it is not clear that they would translate to resources without clear boundaries in space or time (e.g. climate change or air pollution) or those that need to be governed on a national or international scale (e.g. oil reserves).  Photo by Stuart Dootson.


  1. Hardin, Garrett. (1968). “The Tragedy of the Commons.” Science 162: 1243-1248.

  2. Ostrom, Elinor. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press.

  3. Davidson, Adam and Chana Joffe-Walt. (2009, October 23). “Elinor Ostrom Checks In” [Podcast]. NPR: Planet Money. Retrieved March 4, 2013, http://www.npr.org/blogs/money/2009/10/podcast_elinor_ostrom_checks_i.html. 

  4. Biggart, Nicole and Rick Delbridge. (2004). “Systems of Exchange.” Academy of Management Review 29(1): pp. 28-49.

44 views0 comments
  • Facebook
  • Twitter

© 2020 by Systems of Exchange. Proudly created with Wix.com