Unintended outcomes: Journal Club with Dr Jolian McHardy

On Friday, the newest set of Grantham Scholars took part in their first Journal Club. At these weekly sessions, the Grantham Scholars discuss the issues around a research paper from one of their disciplines. Here, Felix Lim reflects on the first session of the new academic year, led by one of his supervisors, Dr Jolian McHardy.

This week’s paper

Symmetric Tragedies: commons and anticommons‘ by J. M. Buchanan and Y. J. Yoon

This week at the Grantham Centre Journal Club, we’ve been talking about unintended consequences of management decisions. In particular, we discussed the problems arising from tragedies of the commons and the anticommons, as described in ‘Symmetric Tragedies: commons and anticommons’ by Buchanan and Yoon.

The tragedy of the commons describes how individual gains can lead to the depletion of a common resource. Allowing individuals to maximise their gains by exploiting a public resource ultimately leads to an overall loss for everyone. This is evident in environmental and ecological issues such as land degradation and deforestation from slash-and-burn agriculture, and depletion of fish stocks in the high seas. Implementing regulations and policies (eg, privatisation, land reforms and concessions, and access rights) is often effective in preventing the overuse of these resources. But, useful as they may seem, are they really effective in preventing the overexploitation of resources? Can we go too far with regulations?

Michael Heller coined the term ‘tragedy of the anticommons’ to describe a mirror-image scenario of the tragedy of the commons that could arise from excessive privatisation. Buchanan and Yoon (2000) used simple models in their paper to further explore Heller’s arguments. They showed how having multiple regulations could lead to resources being under-used and reduce their value. The ultimate outcome was similar to the tragedy of the commons, despite them being opposite scenarios.

Our discussion largely revolved around the need to account for undesirable outcomes that could arise from policies and decisions, as highlighted by the tragedy of the anticommons. By placing more restrictions with the intention of protecting resources (or people), we may instead reduce the overall value of the resource we had set out to protect in the first place.

In food security, for example, multiple regulations may be imposed on food access that might exclude those that need it most. The very policies meant to prevent overexploitation of a resource may instead restrict access, often at the expense of the people they were meant to protect. We spoke about some instances where possibly negative outcomes may be overlooked – for example, carbon taxes can force oil companies to change the way they extract oil, but the companies may still end up extracting more fossil fuels overall

We also talked about the need to value the resources such as ecosystem services. Trying to understand and evaluate underuse and overuse means we need to set values on moral concepts like lives and nature. This is especially important in sustainability and conservation: we need to be able to place values on these concepts and their associated resources before we can assess the tradeoffs of our decisions and policies.

Buchanan and Yoon’s models and analyses are useful in highlighting the dangers of instituting policies without fully evaluating the possible consequences we often overlook. It is important to consider these outcomes in order to optimise the impacts of management decisions.

References

Buchanan, James M., and Yong J. Yoon. “Symmetric tragedies: Commons and anticommons.” Journal of Law & Economics. 43 (2000): 1.

Heller, Michael A. “The tragedy of the anticommons: property in the transition from Marx to markets.” Harvard law review (1998): 621-688.