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The most recent academic book we read, “Governing The Commons: The Evolution of Institutions for Collective Action” by Elinor Ostrom was written on the problem of collective management of shared resources. While discussing this dilemma Ostrom presented us a slightly different topic than institutions and their transformation and presented us with the highly related topic of institutions role when a common pool resource was present. It was the way institutions can manage a common pool resource with informal laws that I found to be the most interesting as Ostrom spoke of locals using informal laws being the cheapest and therefore the most economically efficient way to manage the common pool resource.

Ostrom used the most frequently used example of a common pool resource; he speaks of the town pasturelands and how they will be overexploited and destroyed by the towns’ citizens without institutions. The overexploitation will come about due to the tragedy of the commons, as individuals will act in their own self-interest instead of the whole group’s long-term best interest, as they believe if they do not use the good then, others will and none will be left for their benefit. To prevent the depletion the town pasturelands we develop an institution with the goal to protect it for the future. To do this the institutions must employ a worker to limit who can use the pasturelands, how much they can use, for how long, and to maintain and repair the pasturelands so it can still provide the maximum benefit possible. To do this, rules are needed and someone is needed to enforce them which has a cost attached to it. To fund the protection of the pasturelands either the common land must become private property so it will be in one individ...

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... This would put more caring eyes on the common pool resource and increases the strength of the informal rules. Now the common pool resource is once again protected and no costs needed to be added showing that local groups do have the ability to solve the tragedy of the commons.

When referring to a common pool resource it is the goal of the institution to prevent resource depletion while at the same time aiming provide the good to those in the institution for the lowest cost possible. This is done through informal laws and when practicable altering the common pool recourse to increase the strength of the informal laws instead for making them formal and having to pay for enforcement. When this strategy may and may not work is a case by case situation that highly depends on relationship the people that are interacting have and their ability to trust on another.