Jul 27, 2014

A disjointed post on complexity, institutions and the future of the commons research-agenda

Is diversity good or bad? That is a pretty ambiguous question since it does not define "diversity," "good," or "bad." If we ask the question in the context of a complex system, the economy, for example, we could define diversity as a "large enough" number of different industries, different firms, etc. In the same context "good" can be defined as high "functionality," "stability," "fitness," "robustness," or "innovativeness," etc. To be sure in some context diversity increases different measurements of "goodness." For example a more "diverse" population can be more resilient against an external shock, such as a viral disease. On the other hand, high diversity can be negative. High ethnic fragmentation for example might lead to conflict. So, diversity in the context of complex systems is more complex than I initially thought. That is the main idea I got from reading this excellent book. I might go back and read it again to understand better the models used to explore diversity, which seem pretty simple but are actually deep and fascinating.

From the author' parting thoughts:
The system itself is more robust, more efficient, or more innovative if it contains the appropriate amount and kinds of diversity.
That takes me to a book I just started: Understanding Institutional Diversity by Lin Ostrom. If understandig diversity is a complex challenge, understanding the diversity of institutions is equally challenging. I have read only the first chapter, and this is one bit:
Institutions are only one of a large number of elements that affect behavior in any particular situation at a particular time and place. No single cause exists for human behavior.
Lin Ostrom legacy is massive, and one wonders what directions the commons research agenda will take. Eduardo Araral offers an interesting answer:
I propose that the third generation research agenda on the commons move away from research that are basically variations of the same theme (which variables are important) and arrives at fundamentally the same and settled conclusion (i.e. the drama of local commons). I argue instead that scholars of the commons need to pay attention to the following fundamental questions raised in this paper.  
First, is Ostrom’s critique of Hardin really a special case applicable to small locally governed commons? Second, is Hardin really justified in the case of large scale, national, regional and international commons? Are there examples to the contrary? Third, how can the flaws in studies supporting the external validity of Ostrom’s institutional design principles be remedied, for instance confirmatory bias, endogeneity, multi-collinearity and specification problems? Fourth, are the “commons” that scholars purport to study qualify as CPRs (i.e. exclusion to the resource system is difficult) or are they private property owned by limited partnerships? Fifth, are scholars who argue for the privatization of CPRs (organically evolved rather than imposed) justified in their claims that it can avert the tragedy of the commons? Or as a counterfactual, are there examples of privatized CPRs - overtime - that can be considered as unsuccessful contrary to the standard model? Until scholars of the commons unambiguously settle these questions, the conclusions from this paper should be considered tentative and merely points to unanswered questions and avenues for future research.  
Finally, and most importantly, whatever limitations the first and second generation commons literature may have, future scholars of the commons certainly owe a debt of gratitude to Ostrom and her colleagues for having laid down the foundations for a third generation research agenda on the commons and inspiring a new generation of scholars. pp 19-20. 

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