"When the tragedy of the commons applies, what is optimal for the individual in the short run is not sustainable and thus not optimal for anyone in the long run."
The Nile River which passes through ten African countries brought back to memory the issue of the tragedy of the commons as Egypt, Ethiopia and Sudan are still to agree on certain terms and conditions around the Grand Ethiopian Renaissance Dam. On the one hand the Egyptians and Sudanese are worried about their fate in case of a drought as they get most of their clean water from The Nile, while the Ethiopians do not want to delay the economic benefits that will accompany the dam once it is fully operational. But what is the tragedy of the commons and how can issues be resolved?
The tragedy of the commons can to a certain extent be described by the words of Aristotle who said in his work, what is common to the greatest number gets the least amount of care. When a group of people have access to a shared resource, usually (but not restricted to) a natural resource, there is little incentive for an individual to maintain or protect the resource as the benefits accrue to everyone else who has access to that resource.
One of the common assumptions in economics is that the individual is a rational, utility maximizing being and therefore will always ensure they derive the maximum utility possible. This is not a problem when it is done in such a way that the resource can renew itself as seen by how the Swiss and Japanese mountain commons have been sustained if not enhanced over the centuries while being used intensively (Ostrom, 1990). The problem arises when the rate of consumption is faster than the rate at which the resource can renew itself. If individuals pursue their selfish interests, over time, they will all be negatively affected. It is therefore in the best interest of everyone that the resource be maintained and protected.
Hardin introduced the tragedy of the commons in 1968 using the example of a pasture. In the short run, due to natural disasters and war, the number of both people and beast are kept low. However, when social stability is reached, not only does the population of the people increase, the individuals will also increase the number of animals to graze the pasture. The positive gain for the herdsman will be that the he will benefit from selling the well-fed animals and the negative effect which is overgrazing will be shared by all the herdsmen meaning he only bears a small position of the negative externality. Eventually there will be no pasture for the animals to graze showing that what is optimal for the individual in the short run is not sustainable and thus not optimal for anyone in the long run. It is because of this that Hardin says, ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.
Usually the problem of the commons can be resolved either by privatization or regulation in terms of permits. However the non-excludable nature of certain commons like the Nile River complicates the matter further. Individuals, realizing how utility maximizing behavior will result in negative effects on the larger population, themselves included, will turn to social contracts in the form of government structures, laws and communal arrangements in order to constrain their individual impulses. Due to constant changes in environmental settings as well as differences in historical developments, operational rules evolve with time to cater for the varying settings and differ with each (common pool resource) CPR. The ecological sustainability in most CPRs can be attributed to the preservation of institutional memory and to appropriators who have passed down values over many centuries.
So where to from here regarding the Nile River? There has been a call by Sudan to internationalise negotiations bringing to the table the United Nations, the African Union, the European Union and the United States of America to resolve the dispute. Saudi Arabia has also expressed its intention to mediate. We can only hope this does not lead to conflict and that the agreements reached will be ecologically sustainable, have adequate monitoring with clearly defined consequence management and that all countries will commit to them.
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Yours in Thoughtful Learning