Tragedy of the Commons - A Level Economics Revision Notes

Overview

• Common pool (access) resources: Non-excludable but rivalrous in consumption, often leading to the tragedy of the commons.
• Examples: Oceans, natural forests, communal grazing land, rivers.

Tragedy of the Commons

• Concept popularized by Garret Hardin in 1968.
• Occurs when common resources are used unsustainably.
  • No private ownership due to high exclusion costs.
  • Results in negative externalities of production and consumption.
• Firms and consumers have no incentive to reduce usage due to profit and consumption maximization.
• Consequences include pollution, resource depletion, and partial market failure.

Worked Example

• Scenario: Overgrazing on public lands
  • Market failure due to degradation of lands from unrestricted grazing.

Real World Example: The Darien Gap

• Located in Panama, on the Colombia border.
• Challenges: Illegal logging, resource depletion, and indigenous conflicts.
• Valuable resource: Rosewood Cocobolo tree.
• Solutions attempted include self-governance, mapping, and legal appeals.

Solutions to Common Pool Resource Issues

• Collective Self-Governance
  • Advantages: Community building, effective local management.
  • Disadvantages: Violence and resource limitations.
• Legal Ownership Rights
  • Advantages: Legal protection and potential for prosecution.
  • Disadvantages: High corruption levels and continued conflicts.
• International Agreements
  • Advantages: Global enforcement support.
  • Disadvantages: Ineffectiveness due to non-compliance by some countries.

Property Rights

• Aim to define ownership and manage resource usage.
  • Example: Allocating property rights over forest use.
• Benefits: Internalizes externalities, encourages sustainable management.

Challenges with Property Rights

• Equity: Difficult to determine fair allocation.
• Cost of Enforcement: High monitoring costs, especially for large or intangible resources.
• Divisibility: Some resources are difficult to divide (e.g., air).

Conclusion

• Understanding and managing common access resources through property rights and international cooperation can mitigate the tragedy of the commons.

Additional Tips

• Examples and case studies are crucial for exam preparation.
• Focus on policy analysis and evaluation in responses.