Gary Libecap (email: email@example.com) is Professor at the Bren School of Environmental Science and Management and Economics Department, University of California, Santa Barbara, CA, USA; a Research Associate at the National Bureau of Economic Research; a Research Fellow at the Hoover Institution, Stanford University; and Senior Fellow at the Property and Environment Research Center.
The tragedy of the commons: property rights and markets as solutions to resource and environmental problems
Article first published online: 22 DEC 2008
Journal compilation © 2009 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd. No claim to original US government works
Australian Journal of Agricultural and Resource Economics
Volume 53, Issue 1, pages 129–144, January 2009
How to Cite
Libecap, G. D. (2009), The tragedy of the commons: property rights and markets as solutions to resource and environmental problems. Australian Journal of Agricultural and Resource Economics, 53: 129–144. doi: 10.1111/j.1467-8489.2007.00425.x
- Issue published online: 22 DEC 2008
- Article first published online: 22 DEC 2008
- environmental & ecological economics;
- development economics;
- economic growth;
- bioeconomic models
In one way or another, all environmental and natural resource problems associated with overexploitation or under provision of public goods, arise from incompletely defined and enforced property rights. As a result private decision makers do not consider or internalize social benefits and costs in their production or investment actions. The gap between private and social net returns results in externalities – harmful effects on third parties: overfishing, excessive air pollution, unwarranted extraction or diversion of ground or surface water, extreme depletion of oil and gas reservoirs. These situations are all examples of the ‘The Tragedy of the Commons’. In this paper, I consider options for mitigating the losses of open access: common or group property regimes, government tax and regulation policy, more formal private property rights. I briefly summarize the problems and advantages of each option and describe why there has been move toward rights-based instruments in recent years: ITQ (individual transferable quotas), tradable emission permits, and private water rights. Introductions to the papers in the special issue follow.