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Chapter 1. Background

Defining common property concepts and terms
Forest resources and outputs as common property


Historically, substantial parts of the forest resources in many regions of the world have been managed as common property. In a wide range of situations, people have depended on the outputs of forest resources that were best controlled and managed collectively. This was often because forests and woodland formed part of larger systems in which land needed to be controlled by the users as a group, or because rural households needed to fill gaps in the material and income flows from their own resources by drawing on nearby areas of forest, woodland or scrubland.

In the past, such forest resources were often subject to some form of local control by those who used them, in order to prevent their overuse. Now, both the resource and the management and use system are nearly everywhere facing increasing pressures from growing populations and the effects of economic and political changes. Nevertheless, land use practices that incorporate periods of forest or bush fallow, or that require access to off-farm forest or woodland resources, continue to be critical to the functioning of many rural economic systems. Collective management therefore remains an important option. Local control is also very relevant to current moves to reduce the size and cost of government by decentralizing and devolving responsibilities and activities, and by achieving a greater degree of involvement and participation by local stakeholders.

The purpose of this study is to bring together available information about the role of common property as a system of governance and its present relevance to forest management and use, to review the historical record of common property systems that have disappeared or survived, to examine the experience of selected contemporary collective management programmes in different countries, and to identify the main factors that appear to determine success or failure at the present time. The final chapter of the study summarizes implications for policy, research and practice.

Defining common property concepts and terms1

Common property or open access?
Institutional factors
Circumstances favouring common proper

1 This section draws in particular on McKean and Ostrom, 1995, and on related works by these two authors (McKean, 1995; Ostrom, 1990 and 1994).

Common property or open access?

Discussion of common property management needs to start with an understanding of basic terms and concepts, because "the term 'common property' has been largely misunderstood and falsely interpreted for the past two to three decades" (Bromley and Cernea, 1989).

Over the years, 'common property' has all too often been used to refer both to land or resources available to all and consequently not owned or managed by anyone, and also to situations where access is limited to a specific group that holds rights in common. The confusion between the two has been aggravated by the way a 1968 article by Garrett Hardin on the 'tragedy of the commons' has been interpreted and understood. In this article Hardin set out a parable intended to explain overgrazing in a hypothetical medieval English commons. Each herdsman has the incentive to increase the number of animals he grazes in order to maximize his individual returns. As the commons resource is finite, doing so will in due course deplete and destroy it. In the meantime the gain to each herdsman from adding to his herd more than offsets his share of the loss due to the damage done to the commons. Since all the herdsmen adopt the same individual logic, in the end they all lose. Hardin compared this inevitable result to a classical Greek tragedy, in which those involved know that the disaster is coming but are unable to do anything about it.

Though this is not explicit in the article, the situation that Hardin was describing was in practice one that is more accurately termed 'unregulated open access' use. However, it was widely interpreted as applying to any situation involving use of a resource used in common by several or many users. Failure to recognize 'common property' as a regulated form of resource tenure and use, managed by a group of users with exclusive rights to do so, and the consequent presumption that such use is destined inevitably to lead to degradation of the resource, has had a profound impact on thinking, policy and practice related to control and management of forests and other natural resources. In particular, it has contributed powerfully to the pursuit of land distribution policies that favour individual private landholdings, and has helped to justify state control of forest resources, ostensibly to ensure protection and productive use.

There is also confusion because 'common property' is used to refer to a resource, or to the collective system for managing the resource, or to both. In this study, therefore, the term 'common pool resource' (CPR) will be used to characterize the resource, and the term 'common property' (or 'common property regime') will be reserved for situations in which the resource is managed as common property (McKean and Ostrom, 1995).

Institutional factors

In order to regulate the use and management of a common pool forest resource, there must be institutions that authorize and secure use by a particular group of users (to the exclusion of others), and institutions that set rules to govern this use and monitor and enforce those rules. Thus, common property systems can function only if the group is organized, or can organize itself, to set and implement such rules, provide individual members with inputs and services that are more effective when organized collectively, and provide a mechanism for negotiation and liaison with the state and other external entities.

It is also necessary to ensure that the user group is empowered to exercise the exclusive use rights that it claims. Much misunderstanding and confusion has arisen in this respect because of failure to distinguish between the rights to use a resource and the rights related to the resource itself. Rights may exist or be established that enable persons, or groups of persons, other than the owner to use the resource or some specified output of that resource.2 This becomes particularly important in understanding uses in forests where much of the resource is owned by the state, but most usage is by individual, collective or industrial entities, frequently with multiple users exercising rights to different products or to use at different times of the year.

2 Equally, systems based on communal ownership or control of the land may contain tenurial niches in which individual and family property also exists. Common property should therefore not be confused with 'communal tenure' (Bruce, 1998),

The distinction between stock (the forest) and flow (output) is another aspect of forest resource management that is often overlooked or misunderstood. The institutional arrangements for producing and selling forest products (flow units) are quite likely to be different from those controlling and managing the forest stock (the resource). Problems and issues can arise separately in each, and the governance arrangements it takes to handle both successfully are frequently complex (McKean and Ostrom, 1995).

Perhaps the most important area of misunderstanding relates to the relative merits of private and common property.3 The preference for private property that underlies so much of the transfer out of common property rests on the argument that well-defined property rights are needed in order to ensure that the holder will use the resource efficiently and responsibly, and that only private property rights provide this security. However, much of the debate about privatization assumes that private property is synonymous with individual ownership. This overlooks the fact that the definition of private property actually has to do with rights, not who holds them, and that much private property is held by business partnerships and shareholder-owned industrial corporations, and other collective entities.

3 The literature on property generally recognizes four categories: public, private, common property and open access. These categories are usually distinguished on the basis of (a) the ease with which potential users can be excluded from access to the good ('excludability'), and (b) whether using a portion of the good shrinks the supply that remains ('subtractibility'). 'Public' goods, which are non-excludable and non-subtractible (e.g. street lights, clean air) contrast with private goods, which are both excludable and subtractible. Common property goods lie somewhere in between the two, and share some of the characteristics of each; exclusion is difficult, and they are subtractible (Bromley and Cernea, 1989; NAS, 1986; Ostrom, 1990).

Thus, private property and common property can be seen not as mutually exclusive, but as two types of property with a good deal in common (Bruce, 1998). As access to use of common property is confined to members of a defined user group, which excludes other potential beneficiaries, the common property therefore has some of the attributes of shared private property. Put another way, common property is a way of privatizing the rights to use a resource without having to divide the resource into individual holdings (McKean, 1995).

It is therefore argued that: "Like individual parcellation, common property gives resource owners the incentive to husband their resources, to make investments in resource quality and to manage them sustainably and thus efficiently over the long term" (McKean, 1995). However, as has already been noted, common property rights to forests often apply only to use of products and not to, or in lesser measure to, the resource. Where rights to change the use of a resource, or to sell or otherwise alienate it, rest with others (e.g. the state or a private landowner), the argument that common property rights are as strong as private ownership has more limited force.

Circumstances favouring common property

The principal argument in support of privatization to individuals4 or expropriation by the state is based on the assumption that the cohesion and discipline necessary for effective collective management cannot be achieved or will break down, resulting in unregulated open access overuse with a 'tragedy of the commons' conclusion. Implicit in this argument is the assumption that circumstances no longer permit effective collective control or, more fundamentally, that the changing environment within which individuals must operate fosters behaviour patterns inimical to collective cooperation.

4 In the rest of this document, the term 'privatization' is used in this sense of allocation of ownership or exclusive rights of use to individuals.

However, these arguments fail to take into account those factors which encourage collective action, and the self-regulating capabilities of groups of users (Runge, 1986). These arguments also overlook reasons why the alternatives to common property management may themselves not be sustainable. The same reasons that make it difficult to secure exclusion from a CPR may make it even more difficult to achieve the degree of separation, exclusion and protection necessary to privatize it. Individual private use can also lead to overuse and degradation, particularly on the low-productivity sites characteristic of many common property areas. Equally, the state may not be able to control, manage or prevent degradation to a resource it has expropriated (Berkes et al., 1989).

Furthermore, privatization is unlikely to improve the efficiency of meeting the needs of those who used the resource as common property. In fact, by transferring control of the resource to a limited number of individuals who thereby acquire the social and legal sanction to exclude others, privatization is likely to exacerbate the problems of those without access to private property (Bromley and Cernea, 1989).

The thrust toward expropriation or privatization also tends to ignore the fact that breakdowns in common property systems may reflect deficiencies in policy or policy implementation, rather than their appropriateness for managing a resource. For example, common property seldom has the same degree of support in law, or elicits the same response from the authorities when threatened, as private property (Bromley and Cernea, 1989; Bruce, 1998).

The central question that needs to be addressed is: Under what circumstances does common property provide the best match between the resource and the economic, social and institutional context within which it is located? As long as resources are abundant, and pressures on them are low, the need for regulation and rules is unlikely to arise, and open access use is likely to be as appropriate as any other regime.

Box 1: Advantages of Common Property Regimes1

1 In many situations more than one of these conditions applies, particularly where people are interested in making good use of a resource system capable of generating multiple products.

Indivisibility: The resource may have physical traits that preclude parcelling; the production system may not be amenable to division or demarcation. It may not be possible to establish boundaries around the resource system, or the, resources may be mobile over large territory. Forests may seem more divisible (and fenceable) than other kinds of resource systems but in fact, where forests are being managed not only for products that can be taken from them" but also for their value in protecting water and soil not to mention 'local 'climate, forests need to be managed In' very large units.

Uncertainty in location of productive zones: In fragile environments nature may impose great uncertainty on the productivity of any particular section of a resource system, and the location of the unproductive sections cannot easily be predicted from year to year, but the 'average' or 'total' productivity of the entire area may be fairly steady over the years. In this situation, the resource system is stationary and may even have fairly obvious boundaries, but its productive portions are not stationary. In such systems resource users may well prefer to share the entire area and decide together where to concentrate use at a particular time, rather than parcelling the area into individual tracts and thereby imposing the risk of total disaster on those users whose parcels turn out to be unproductive ones in a given year.

Productive efficiency via internalizing externalities:

In many resource systems, uses in we zone immediately affect uses and productivity in another; deforesting hillside ruins the water supply and downhill soil quality. If different people own the uphill forests and the downhill fields, and if they make their decisions independently and separately, they may well cause harm to one another. If these externalities are substantial, creating a common property regime to make resource management decisions jointly can provide a mechanism for acknowledging and internalizing the multiple negative externalities that are implicit In resource use in this setting. People who use a common property regime to manage their upland forests all share ownership of the upland forests, restrain timbering to prevent soil erosion and damage to fields below, and earn more from their downhill farms than they sacrifice by not cutting as much uphill timber.

Administrative efficiency:

Even if resources are readily divisible Into parcels, arid where intensive independent use of adjacent; parcels 'does not produce problematic externalities, the administrative support to enforce property rights to Individual parcels may not be available. The society may be too poor to support a large court system to enforce individual land titles, and even low-cost fencing would be expensive by this society's standards. Creating a common property regime here is a way of substituting collective management rules, which function as imaginary fences and informal courts internal to the user group, for what is missing. It is less expensive in these circumstances, and it is within the power of a group of resource users to create.

Source: McKean, 1995

Historically, common property regimes have evolved where the demand on a resource has become too great to tolerate open access use any longer, so that property rights in the resource have to be created, and where other factors make it impossible or undesirable to allocate the resource to individuals (McKean, 1995).

A common property regime can also emerge as a way to secure control over a territory or a resource, to exclude outsiders or to regulate the individual use by members of the community The choice of property regime may also reflect historical feudal and conquest institutions (Bruce, 1998).

Common property, like any other property or governance regime, is likely to be maintained only as long as it is appropriate to the changing situation in which it is found. Change may be towards individual or state management, or back to open access, or, as is found in many forest situations, towards some combination of rights and regimes (Berkes et al., 1989; Bromley and Cernea, 1989; Bruce, 1998). However, resources can continue to be managed as common property for long periods in the midst of fundamental economic and social changes when this is the most appropriate form of management. For instance, it is still an active system of forest management in parts of Europe.

Forest resources and outputs as common property

Box 1 (McKean, 1995) identifies a number of types of natural resource situations in which placing property rights with groups can be more efficient than trying to allocate the rights, or the resource, to individuals. The potential advantages of collective control of forest resources can be summarized as follows:

· Some resources are simply indivisible or, like many forest ecosystems, have to be managed in their entirety in order to maintain the interactive environment needed to produce some of their outputs (including mobile resources such as wildlife).

· In some large resource systems, such as range and woodland in arid areas, the location of the most productive zones can vary from year to year.

· In resource systems subjected to heavy population pressure or with congested and competing uses, coordination among users is essential to cope with problems caused by multiple uses or with interrelationships such as the effect on farmers of forest use in upland areas in a watershed and land use in lower areas.

· Group control, and thus group enforcement of rules, can be an efficient way of coping with the costs of monitoring otherwise porous boundaries and of enforcing restraints on use within those boundaries.

Forest resources that exhibit some or all of these characteristics are likely to be good candidates for management as common property regimes. However, even where this is so, users of forest products often have the option of obtaining supplies from sources other than the forest. For example, fuel may be obtained from trees managed by households on their farmlands, or it may be purchased. Therefore, the decision to manage a forest or woodland resource as common property may be less clear-cut than it is for resources such as irrigation water or many fish stocks, where there is no effective alternative that would ensure sustainable supplies.

In addition, forest-use situations are often complex, involving multiple products as well as multiple user groups that have different ethnic, geographic or economic profiles and different interests and priorities. This, of course, increases the potential for dispute and conflict, which increases the difficulty and cost of developing and maintaining effective institutions to monitor and control use.

Given this diversity and variation from situation to situation and over time, there can be no widely applicable or universal models. Analysis needs to be pursued within a framework that recognizes this diversity. Discussion in the literature on common property, and on its relevance to forest management, suggests a number of factors that could be important in this respect:

· the existence of a suitable resource;
· the role of forest products in livelihood and land use systems;
· social and cultural cohesion and authority at the user group level;
· the impact of economic and demographic change on user populations; and
· the impact of policies and legislation on their institutional environment.

The examination and analysis that follow in this study will focus on these factors.

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