Bart
While José offers a thoughtful and well-articulated argument in favor of what he refers to as proactive government intervention, I’m not convinced that the literature shares his enthusiasm. The authors critique various aspects of conventional economic thought, but they do so from firmly within the economic paradigm rather than drawing into question the paradigm itself. Efficiency, rather than equity or fairness, remains the primary goal of government and market relationships.
Furthermore, I actually thought the authors made quite the opposite argument—for less government involvement, not more, and an expanded market-based approach to policy. Zerbe and Howard, for example, criticize older Pigovian approaches wherein the role of the government is to correct market failures (such as externalities). Instead, drawing on the work of Ronald Coase and others, Zerbe and Howard propose a governmental role constrained to reducing transaction costs through assigning private property rights and standardizing measurements.
Likewise, Ostrom’s experimental work in behavioral economics aims to demonstrate that groups are able to reach collective agreements on resource use without the need for government intervention. This is in contrast to previous economic assumption that individuals, acting as self-interested actors, would not contribute to the creation of a common good without the coercive intervention of governments. Not only is government coercion not always necessary in managing common goods, but “governmental policy can frustrate, rather than facilitate, the private provision of public goods.”
Ostrom’s assertions are not without qualifications, however, and I imagine that her list of case studies of effective collective resource management would be dwarfed by the number of examples of resources that have been exploited and misused. Among the criteria that contribute to a scenario where the empirical evidence suggests collective action leads to efficient outcomes, there are several that should lead one to question how applicable these experiments are to real-life policymaking. The movement of persons, for example, either in or out, can quickly erode the mutual trust that is required for collective action. The vast movements of people over the past century—either across borders, rural to urban, or within regions—is a trend likely to continue, and suggests that governments, rather than collective action, will continue to play a primary role in resource management.
There was another important caveat to Ostrom’s findings that is particularly problematic for present-day policymaking—“Interestingly, when communication is implemented by allowing subjects to signal promises to cooperate through their computer terminals, much less cooperation occurs than in experiments allowing face-to-face communication.” This suggests that there are limitations to digital platforms and social media, and while, as Rand and Kaplan argue, they may be able to topple an authoritarian regime, they may also be poorly suited to fostering the mutual trust needed for collective action to replace it.
While José offers a thoughtful and well-articulated argument in favor of what he refers to as proactive government intervention, I’m not convinced that the literature shares his enthusiasm. The authors critique various aspects of conventional economic thought, but they do so from firmly within the economic paradigm rather than drawing into question the paradigm itself. Efficiency, rather than equity or fairness, remains the primary goal of government and market relationships.
Furthermore, I actually thought the authors made quite the opposite argument—for less government involvement, not more, and an expanded market-based approach to policy. Zerbe and Howard, for example, criticize older Pigovian approaches wherein the role of the government is to correct market failures (such as externalities). Instead, drawing on the work of Ronald Coase and others, Zerbe and Howard propose a governmental role constrained to reducing transaction costs through assigning private property rights and standardizing measurements.
Likewise, Ostrom’s experimental work in behavioral economics aims to demonstrate that groups are able to reach collective agreements on resource use without the need for government intervention. This is in contrast to previous economic assumption that individuals, acting as self-interested actors, would not contribute to the creation of a common good without the coercive intervention of governments. Not only is government coercion not always necessary in managing common goods, but “governmental policy can frustrate, rather than facilitate, the private provision of public goods.”
Ostrom’s assertions are not without qualifications, however, and I imagine that her list of case studies of effective collective resource management would be dwarfed by the number of examples of resources that have been exploited and misused. Among the criteria that contribute to a scenario where the empirical evidence suggests collective action leads to efficient outcomes, there are several that should lead one to question how applicable these experiments are to real-life policymaking. The movement of persons, for example, either in or out, can quickly erode the mutual trust that is required for collective action. The vast movements of people over the past century—either across borders, rural to urban, or within regions—is a trend likely to continue, and suggests that governments, rather than collective action, will continue to play a primary role in resource management.
There was another important caveat to Ostrom’s findings that is particularly problematic for present-day policymaking—“Interestingly, when communication is implemented by allowing subjects to signal promises to cooperate through their computer terminals, much less cooperation occurs than in experiments allowing face-to-face communication.” This suggests that there are limitations to digital platforms and social media, and while, as Rand and Kaplan argue, they may be able to topple an authoritarian regime, they may also be poorly suited to fostering the mutual trust needed for collective action to replace it.