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Governing Access to Essential Resources$

Katharina Pistor and Olivier De Schutter

Print publication date: 2015

Print ISBN-13: 9780231172783

Published to Columbia Scholarship Online: May 2016

DOI: 10.7312/columbia/9780231172783.001.0001

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Introduction

Introduction

Toward Voice and Reflexivity

Chapter:
(p.3) Chapter 1 Introduction
Source:
Governing Access to Essential Resources
Author(s):

Olivier De Schutter

Katharina Pistor

Publisher:
Columbia University Press
DOI:10.7312/columbia/9780231172783.003.0001

Abstract and Keywords

In their introductory chapter, De Schutter and Pistor argue that in light of increasing absolute and relative scarcity of land and fresh water there is urgent need to improve the governance of these and other essential resources. Emphasizing “essentiality” shifts the debate from allocative efficiency to normative concerns of equity and dignity. Essential resources are indispensable for survival and/or for meaningful participation in a given community. Their allocation therefore cannot be left to the pricing mechanism alone. It requires new parameters for governance. The authors propose Voice and Reflexivity as the key parameters of such a regime. Voice is the ability to collectively choose the rules by which social groups wish to be governed; and Reflexivity to recognize competing claims as legitimate and the willingness to accommodate them. Essential resources are not mere commodities. How they are governed must respect their special place in a dignified society.

Keywords:   Essential resources, Voice, Reflexivity, equity

The allocation of scarce resources defines the field of economics. This book is also concerned with the allocation of scarce resources, but its emphasis is on essential resources: resources that are either absolutely necessary for the survival of every human being, which include drinking water, basic food, clothing and shelter, or indispensable for minimum existence in a given society, which may include land, electricity, or other resources.1 The shift of focus from goods in general to essential resources brings to the fore normative aspects of resource maintenance and allocation and calls for a critical reassessment of existing governance regimes and their distributional effects—or a shift form the tragedy of the commons to the tragedy of exclusion.

We observe three trends in the allocation of scarce, essential resources worldwide today. First, essential resources, in particular drinking water and arable land, are becoming ever more scarce. The dire predictions made most famously by the Club of Rome forty years ago (Meadows et al. 1972)—that economic growth would surpass the carrying capacity of the planet without changes in the management of scarce resources—may well be materializing in our century (Millennium Ecosystem Assessment 2005). In other words, humankind may face absolute scarcity of essential resources in the foreseeable future if levels of consumption continue to increase in proportion to rising incomes. Second, human-made constraints, including legal institutions and social practices, create (quite purposefully) scarcity for some even as others continue to enjoy in abundance. Property rights are the most obvious example of an institution that creates relative scarcity. Nation-states and other jurisdictional boundaries have the same effect, with the implication that some resources are (p.4) inaccessible in some regions. Paradoxically, opposite arrangements—the removal of barriers to the free flow of goods, services, and capital—may also result in scarcity. This is the case when the superior purchasing power of some actors excludes others from access. Third and related, the market mechanism has become the preferred mechanism for allocating scarce, including essential, resources, not least for its seemingly neutral operation. The smooth functioning of the market in turn depends on legal arrangements that facilitate exclusion, thereby setting the stage (without further interventions) for pricing out those without sufficient purchasing power. Denying people access to essential resources they cannot afford is not a market failure: it is the logical outcome of market forces.

We posit that jointly these trends already exclude the most vulnerable members of humankind from access to essential resources and threaten to leave more behind as scarcity increases. This is intolerable on normative grounds. A just society and a just world require that all humans have the capability to live the lives they have reason to value (Sen 1999; Nussbaum 2011). This calls for more than meeting peoples’ basic needs but certainly includes it. Approximating justice, we contend, is possible. But it requires forms of governance that embrace normative principles, such as Voice and Reflexivity, which are distinct from the sole pursuit of efficiency. Voice is defined here as the ability to collectively choose the rules by which social groups wish to be governed; Reflexivity as the ability to question one’s preferences in the light of competing claims and to accommodate such claims in a collective-learning process.

This introductory chapter develops the conceptual framework for the contributions that follow, which critique the framework; they offer insights from other disciplines and literatures or apply them to, among others, the operations of common law, the struggle over property rights in contemporary China, and access to water in the slums of Mumbai or the arid West of the United States. These studies demonstrate that context matters both for determining what resources shall be deemed “essential” and what governance devices might be available (or not) to ensure universal access to them. The specific institutional arrangements for realizing Voice and Reflexivity will therefore vary considerably, but this is true more generally for institutions that affect individual and social behavior.

Most of the contributions in the book focus on specific countries or regions within countries. This, however, should not distract from the fact that in our globalized world scarce resources are increasingly allocated across the borders of national or subnational polities. This implies that (p.5) local or national institutional arrangements are rarely sufficient to ensure Voice and that additional efforts must be made to ensure Reflexivity to achieve justice on a global scale. This is a major challenge for future global governance, one that is only too often sidestepped by leaving resource allocation primarily to the market mechanism.

The remainder of this chapter is organized as follows. We first introduce the basic building blocks for our framework: essential resources, the determinants of scarcity, Voice, and Reflexivity. Second, we situate our framework within the dominant literature on resource allocation in law and economics and the literature on common-pool resources. Third, we introduce the other contributions to this volume and explain how they relate to the framework developed in this chapter.

Essential Resources

For the purpose of the current book project, we label resources essential if they are indispensable for survival; at a minimum this includes drinking water, adequate food, and shelter. Water is the most obvious case of an essential resource, as deprivation will lead to death within days. Still, drinking water can be more or less clean, a source of health or harbinger of disease. It would be absurd to call for pristine springwater for all as much as this might be normatively desirable; a more moderate claim, but one that would improve the current state of the world in relative terms (Sen 2009), is that all should have access to water that is safe for immediate consumption. The right to clean water has meanwhile been recognized by a UN resolution,2 but without stipulating a minimum threshold for cleanliness—indicating the politically divisive nature of this seemingly straightforward issue.

Other resources pose additional challenges; take the example of land. For rural households in the developing world, where many still reside in extreme poverty, access to food and water is inextricably linked to land; in such conditions, land itself becomes an essential resource. In contrast, most city dwellers can live comfortable lives without controlling the land their apartment buildings occupy—though their tenure security ultimately depends on the security of a right to land, if only indirectly. The qualification of any particular resource as “essential” beyond the needs for bare survival is thus context specific. In more affluent societies, education, health care, or electricity (consider the effects Hurricane Sandy had on New York when it shut down electricity for part of the city) may be (p.6) considered essential resources as well. Their classification is determined by shared norms about what resources a just society should make available to all irrespective of purchasing power (Walzer 1983; Elster 1993).

In short, essentiality is a normative concept and, as such, malleable and context specific. For some this may seem to weaken its explanatory power. We take a different position and emphasize that resources have not only an “objective” market value that can be determined by the pricing mechanisms but also a normative value that rests on principles of justice. There is an old, lively, and ultimately unresolvable debate as to whether justice shall be measured in absolute or relative terms, which we will not recapitulate here. Suffice to say that even proponents of absolute justice would agree that societies vary in how they prioritize claims to resources and that this influences social behavior. Economic and normative value may but need not be correlated. For some resources and “under certain very special assumptions” (Arrow 1974, 20) it may be perfectly justifiable and indeed preferable to rely exclusively on the pricing mechanism. For others, this would by morally repugnant; other considerations, including “distributive justice” (Arrow 1974), are therefore called for to modify or even replace the pricing mechanism. We propose that essential resources fall into the latter category. In what follows we mostly ignore resources other than those required to cover basic needs, in particular water and land; not because we do not believe that the concept of essential resources cannot be extended to them (we do), but for the purpose of analytical clarity.

The concept of essential resources thus overlaps but is not identical with the notion of basic needs developed by the International Labor Organization (ILO) in the 1980s.3 Our approach is distinct in three ways. First, we suggest there is not a single, objective standard for categorizing certain resources as “essential”; instead what is essential is highly context specific. Second, we seek to shift emphasis from the goods or resources in question to the ability of individuals and groups to partake in deliberation and the design of governance mechanisms. Satisfying the need to access essential resources cannot simply be a technocratic, top-down process but requires involvement of the people concerned precisely because appropriate governance tools are resource and context specific. Indeed, unless greater attention is paid to the question of governance—to inputs in decision making rather than simply to the outputs understood as the satisfaction of basic needs—the default solution will be to promote economic growth in the hope that all boats will be lifted. Yet we have learned from the past thirty years that the “trickle-down” effect hoped for is less (p.7) effective than is frequently asserted; even more troubling, the means by which economic growth is promoted, that is, the creation of private property rights, the removal of obstacles to free trade, and so on, can in fact create obstacles for ensuring access to essential resources.

The Determinants of Scarcity

Scarcity is ubiquitous and the very essence of a competitive market economy. Scarcity of essential resources, however, can be deadly—for those denied access or engulfed in riots and warfare over access. Governing access to essential resources in a peaceful and equitable manner is of utmost importance, but to develop workable solutions we need to understand the determinants of scarcity. It is useful to distinguish between absolute and relative scarcity and between natural and human-made scarcity. We note that most scarcity is relative rather than absolute and that by implication scarcity is almost always the product of human action or inaction. Nonetheless, there is strong evidence that per capita availability of water and arable land is in decline globally (Lambin and Meyfroidt 2011). This is not to say that other sources for food might not be found or that it may not become feasible in the near future to turn saltwater into drinking water at reasonable costs. It does mean, however, that the most obvious and historically most widely used solution to meet demand for essential resources, namely migration to or the conquest of as yet undiscovered or unused resources is diminishing. Estimates suggest that fewer than 450 million hectares of arable land remain (one-third in surface of the land that is already cultivated) and that this resource is likely to be exhausted within the next several decades (Lambin and Meyfroidt 2011). Indeed, taking into account the ecological and social costs of converting yet unused land into cultivated land, this figure should be drastically lowered: there simply is not much land left to satisfy the increase in demand for agricultural commodities (Lambin et al. 2013).

Beyond instances of absolute scarcity, essential resources are scarce only in relative terms, that is, they are human-made and result mostly from politics and institutional choice (Allouche 2011). Even if flooding destroys crops or droughts deplete drinking water in some parts of the world, these resources are typically still available elsewhere. Supplying them to people in distressed regions of the world is a matter of logistics, costs, and political will, not scarcity. The most effective response to acute scarcity, namely self-help in the form of migration to parts of the world (p.8) where essential resources are still abundant, is severely restricted by political institutions. Where essential resources can be found, other peoples reside and protect their rights and interests by legal and physical boundaries. Virtually all territory and most shorelines on this planet have been enclosed by nation-states that guard entry to their territories, increasingly with physical fences and walls.

Pointing out that scarcity of essential resources is mostly human-made is not new, but this apparently simple assertion has a number of ramifications. First, it highlights the importance of institutions that ensure accountability. Amartya Sen famously asserted that famines are the result not necessarily of food scarcity but of a lack of entitlements for people to demand food (Sen 1999). He concluded that the ability of the people to hold governments accountable is a key safeguard against extreme deprivation: famines, he noted, are rare in democracies. Yet in many countries those most vulnerable to conditions of scarce essential resources lack effective Voice because the political regime suppresses public opinion. The countries that house most of the world’s poor today tend to be controlled by autocratic regimes (Collier 2007). Transitions to democracy are fragile, especially at the lower end of the income scale (Przeworski and Limongi 1993). Less well understood is why some countries make it against these odds and others revert to autocratic regimes or collapse into “failed” states. The latter is often attributed to bad domestic institutions, but there is growing evidence that resource scarcity itself may be an aggravating factor for political instability. Indeed, food insecurity contributes to weakening political regimes (Maystadt, Trinh Tan, and Breisinger 2014): There is some evidence that the forced migration of two million people from drought-affected regions played a role in the civil conflict in Syria (Gleick 2014). Thus, lack of access to essential resources is both a consequence and potentially a cause for authoritarian solutions to prevent societies from falling apart.

Even what may seem to be technical problems can be redefined as failure of accountability. Consider, for instance, waste as another human-made contributor to scarcity. Leaking water pipes, unnavigable rural roads to transport food from villages into cities, or the lack of cooling facilities to preserve harvested food on its way to consumers are its most obvious manifestations. These are symptoms of bad policy choice and governance failure in the form of misallocating resources that would otherwise be available to maintain infrastructure; being unable to collect tax or other revenue to fund infrastructure and its maintenance; or choosing (p.9) institutions that undermine rather than strengthen normative principles of sharing and Voice.

Second, human-made scarcity can have its source in both formal and informal, or customary, arrangements. Even in a country such as India, where democracy has long been established and famines have indeed been rare, Sen’s own research has pointed to the “missing 100 million women” (Sen 1990)—that is, the highly unequal treatment of females, evidenced by sex-related abortions, stunted growth, and premature death. A long list of statutory interventions in India since independence has brought about some change but has not fundamentally altered the social norms that condone sex-based discrimination (Pistor, Haldar, and Amirapu 2009). Comparative research on property in land in different parts of the world similarly shows that women often have inferior rights that are derived from and subordinated to those of their husbands, fathers, brothers, even sons, as illustrated by the fact that women lose access to land altogether when one of their male relatives dies (Deininger 2003). As a result, some multinational organizations are now advocating woman empowerment as a means for alleviating hunger (Asian Development Bank 2013).

Third, scarcity can be the result of expanding markets and removing boundaries between jurisdictions. As a result of economic globalization, competition for resources has become global, pitting populations with widely divergent purchasing power against one another. Indeed, whereas the causes of food insecurity are manifold (they include changes in the rate of urbanization, soil degradation, droughts or other changes in climate patterns as well as resource constraints), one increasing concern is the propensity of net-food-importing countries over the past decade to acquire land in foreign countries on a large scale rather than relying on the global trade system (De Schutter 2011). Since the 1980s, many countries with highly volatile agricultural production cycles have abandoned storage facilities in the expectation—and with the policy backing of multilateral institutions, such as the World Bank—that global commodities markets would always grant them access to food. They are now realizing that the unfettered operation of the market mechanism exposes those most desperate for food to the volatility of global market prices, as evidenced by the global food crisis of 2008. This realization explains at least in part the recent shift from relying on trade to acquiring arable land or land with substantial natural resources, including water in recent years (Allouche 2011).

(p.10) This illustrates a more general point: Excessive reliance on the market mechanism can result in relative scarcity. In principle, the pricing mechanism is a useful indicator of scarcity and forces people to adjust their behavior, cut back on waste, and manage a resource more effectively. Yet prices are an indicator of demand, as expressed by those with purchasing power, rather than of needs: The richer you are, the more votes you have in influencing the allocation of resources. As noted by Scitovsky, this means that the marketplace is analogous to a plutocracy: It is “the rule of the rich,” he wrote, “where each consumer’s influence on what gets produced depends on how much he spends” (Scitovsky 1992, 8). Thus, the pricing mechanism can price out people who lack sufficient bargaining power. While this may be acceptable for many goods, it is not acceptable when it comes to essential resources. Many countries allocate water through public utilities and frequently offer water for free (at least to cover basic needs). Where the market mechanism has been employed in the provisioning of water, it is typically attenuated by regulations and governance mechanisms that set priorities for water consumption and curb speculation and monopolization. Examples include water banks in California during periods of drought and water markets in European countries (see Casado-Pérez in this volume). Effectively restricting market mechanisms requires well-functioning political and legal institutions. Where these are lacking, the combination of demographic shifts, urbanization, and the commodification of land through titling programs can result in the widespread reallocation of access to essential resources from the destitute to the well-off and well connected (Durand-Lasserve in this volume).

Markets are backed by legal rules, which contribute to scarcity—and not by accident but by design: The delineation of property rights over resources is meant to exclude others from access so as to enable the legal owner to put the asset to the most highly valued use. Any property regime, including communal property, excludes some to the benefit of others. Exclusion is thus at the very core of property regimes, whether individual or collective, public or private (Hall, Hirsch, and Murray Li 2011). Yet, exclusion does not have to be absolute. Indeed, most developed legal systems attenuate the right to exclude by taking account of competing claims and normative concerns. Hanoch Dagan has shown in his work on common-law property (Dagan 2012, and this volume) that courts and legislatures developed property law that has proved to be quite responsive to competing claims; they have endorsed access and (p.11) sharing constraints in areas as varied as intellectual property rights (mandatory licensing rules), marriage (sharing obligations in marriage and upon divorce), and land (the right to passage). This is not a unique feature of the common law but can also be found in civil law jurisdictions (Mattei 2000).

The development of a contestable property regime that is responsive to competing claims is, however, far from universal. It presupposes that power relations are not too unequal and that the norm-setting processes—that is, the political system—allow ample space for contestation of norms and for changing priorities in response to changing circumstances rather than limiting themselves to defending once-established rights (see also Cox in this volume). The latter, however, has become the rallying cry for property rights and their spread to other parts of the world by zoning and titling programs (World Bank 2010). This ideological shift was precipitated by the collapse of the former socialist world and the promotion of markets based on individualized property rights with the absolute right to exclude as the governance solution for all social ills. The “Washington Consensus” (Williamson 1990) formulated in the early 1990s is the most powerful manifestation of this shift at the global level. And yet, the World Bank, one of the key proponents of the Washington Consensus, had to concede less than two decades later that the recipes of the Washington Consensus did not produce the envisioned growth and prosperity (World Bank 2005). Indeed, we suggest that the measures endorsed by these policies, including widespread privatization and titling and zoning of land without built-in institutional mechanisms that ensure responsiveness to competing claims and changing circumstances, has contributed to the increasing scarcity of essential resources for the world’s poor.

The institutionalization of private property in countries around the globe raises important questions as to if and how past institutional choices can be modified to take account of the normative principles embodied in Voice and Reflexivity. Institutions are path dependent (North 1990). For the most part, they change only incrementally; it often takes dramatic events, such as wars or revolutions, to profoundly change historical paths (Olson 1982). Lack of responsiveness, however, can prove fatal for a regime and destabilize entire societies. Karl Polanyi famously linked the rise of totalitarian regimes in the first half of the twentieth century to displacement of the rural poor in preindustrial England and their plight in the process of industrialization. According to him, it is the gradual erosion of all protective features of societies by the “satanic mill” of (p.12) commodification that leads societies to seek to restore protection, even if only at the price of authoritarianism (Polanyi 1944). Terra Lawson-Remer makes a similar point by showing strong property rights for elites are positively correlated with economic growth and development, but those of marginalized groups are negatively correlated (Lawson-Remer 2011). She also contends that the reallocation of property rights in favor of elites has resulted not infrequently in civil unrest or war, which have at times undone the advances made with the help of a private property regime.

Several contributions to the volume highlight the difficulty of altering established regimes. Michael Cox shows that regimes that have stabilized around a first-come-first-serve rule for making use of riparian water have exacerbated the degradation of underground water resources in times of prolonged drought: Those excluded from access to riparian water have drilled their own wells and drained underground resources. Recent research suggests that tapping into underground water accounts for 75 percent of the documented loss of the Colorado River basin.4 Nikhil Anand discusses how the physical infrastructure of Mumbai’s municipal water system built during colonial rule has deprived the majority of the city’s contemporary dwellers of access to the system. They navigate survival by buying water from private sellers, by pressuring city councilmen in return for electoral support, or at times by resorting to violence. But they have, as of now, not been able to change the infrastructure or the rules and practices that deny them full access rights. Further, Vamsi Vakulabharanam shows that even where weaker constituencies are granted legal rights under the Indian constitution, these rights are often flagrantly violated by a coalition of public and private interests against which they are largely powerless. These examples show that a legal rule or regime on its own is unable to prevent the deplorable outcome of denying the most vulnerable access to essential resources and thereby contributing to their destitution or even death. The absence of open contestation over access rights, the political will and institutional capacity to mitigate economic and social power relations both domestically and globally, undermines the efficacy of isolated legal rules.

Scarcity in a Globalized World

There is perhaps no better illustration of human-made scarcity of essential resources than the imbalances we find in the current wave of globalization. In sharp contrast to the globalization of the pre–World War I (p.13) period, the current process of globalization has prioritized the movement of goods and capital over that of individuals. As states have imposed ever more severe restrictions on population flows, they have taken away one of the most powerful devices for humans to deal with scarcity: migration to places where relevant resources are abundant or more accessible. International agreements have protected the free flow of goods services and capital through multilateral agreements such as those placed under the umbrella of the World Trade Organization (WTO) or through a growing web of bilateral investment treaties (BITs); in contrast, the free movement of persons has been largely left out.5 Restricting the movement of persons thus remains the one undisputed power (and, arguably, liability) of sovereigns in a globalized world. Capital can freely chase higher yields by moving in and out of commodity and other markets, but humans are not free to search for more hospitable places to feed their families when they lose access or can no longer afford the prices for resources essential for their survival. The task of addressing their needs is left to the nation-states where they reside—whether or not those nation-states have the political will or retain the economic or institutional capacity to do so.

In fact, international law has increasingly been designed to restrict the capacity of sovereign states to accommodate domestic constituencies and denies them the possibility to contest rights granted to outsiders even if they are directly affected by them. An example is the transnational property regime for protecting foreign investors. It was meant to protect foreign investors against expropriation, but as it has evolved, the regime has overshot its original target by giving foreign investors the power to block domestic legal change that could affect their rights, including change aimed at furthering distributive justice, including a more equitable allocation of essential resources. Under the thousands of BITs that comprise this regime, foreign investors can sue host countries in arbitration tribunals outside their countries for damages if their investments have been infringed (Suda 2006; Roberts 2013). Cases have been brought not only for outright expropriation (which has become a rarity these days) but for legislative or regulatory change to protect the environment or to create more equitable conditions for marginalized groups in society. The hearings are not public and are presided over by arbiters with little knowledge of the host countries’ duties (Roberts 2013) toward their own populations even in cases where such duties are imposed by human rights treaties.

(p.14) There are good reasons for protecting investors against arbitrary state action by host country governments. Yet the prioritization of the rights of foreign investors over those of domestic constituencies becomes problematic when this leads to denying the latter access to essential resources on which their livelihoods depend, as in the famous case of the Sawhoyamaxa Indigenous Community v. Paraguay, in which Paraguay alleged before the Inter-American Court of Human Rights that it could not give effect to the indigenous community’s property rights over their ancestral lands because, among other reasons, these lands now belonged to a German investor who was protected by a BIT.6 There is a growing recognition for the need of grounding these treaties in broader social objectives, but these goals are yet to be transposed into actual treaty language. In the meantime, states are often reluctant to infringe investor rights, as they fear expensive arbitral disputes and potentially huge liabilities.

Thomas Pogge has taken this argument a step further and posited that our international legal order violates the very same human rights it endorses as universal (Pogge 2005). His critique targets the rules governing the recognition of states and their governments, which are oblivious to the often violent means those entities used to acquire power; the agreements establishing the World Trade Organization, which commit members to free trade and sustain unfair rules for poor countries; and other aspects of the rules that sustain our international economic order. We agree with Pogge that some international legal instruments entrench existing power relations to the detriment of the world’s poor—such as the Agreement on Trade-Related Intellectual Property Rights (TRIPs) with regards to intellectual property rights or BITs that can be used by foreign investors to threaten states with liabilities for general welfare-enhancing policies that seem to infringe their rights. In effect, they can hold states hostage. The effects of many other international rules or instruments, however, are arguably more ambivalent. Pogge is correct that the rules on state recognition frequently end up endorsing a group of robber barons who were successful in their power grab. The claim is reminiscent of Charles Tilly’s comparison of war making and state making as organized crime (Tilly 1985)—legitimated ex post by whoever comes out victorious. And yet international law is no longer oblivious to the internal conduct of states to the extent it once was. Humanitarian interventions have been legitimated (if not legalized), and international criminal justice has been institutionalized, albeit imperfectly. Finally, and most relevant to the concerns raised in this volume, governments are not expected to (p.15) remain passive in the face of extreme deprivation faced by their populations: As stipulated by the Committee on Economic, Social and Cultural Rights, it is now accepted that even the poorest states should discharge “a minimum core obligation to ensure the satisfaction of, at the very least, minimum essential levels of each of the rights” listed in the International Covenant on Economic, Social and Cultural Rights, including the right to food, housing, water, and essential medicines (CESCR 1990, para. 10). This requirement under international human rights law can be traced to the impact of the then rapporteur of the committee, Philip Alston, who urged the committee to “find a way of conveying to states the fact that priority must be accorded to the satisfaction of minimum subsistence levels of enjoyment of the relevant rights by all individuals” (Alston 1987, 359–360). As a matter of international law, ensuring access to essential resources is thus no longer left to the discretion of sovereign nation-states: It has become part and parcel of international human rights law.

We do recognize, however, that these principles are rarely enforced. We are also in agreement about the importance of identifying arrangements that pose the greatest impediments to a more just order. A major source of concern is the demise of multilateralism: the shift away from seeking multilateral solutions that would address human rights concerns in the context of free trade and investment protection toward the negotiation of bilateral agreements (see also De Schutter et al. 2012). Imbalances in the parties’ respective bargaining powers (as larger economies by definition have more to bring to the table than smaller economies) tend to produce outcomes that are severely skewed toward the interests of the most powerful players. Consider the likely effects of BITs on the allocation of essential resources. Investors who bought land in foreign countries to export food or water will be able to invoke these treaties to protect their investments even if their actions contribute to scarcity of essential resources in the country where they are harvesting them. Where their rights conflict with those of domestic constituencies (such as indigenous people who live on the land that has been sold or for which mining concessions have been granted, as in the case of Sawhoyamaxa Indigenous Community cited earlier), any attempts by host countries to protect the latter create the risk of liability to foreign investors affected by this change. From our vantage point, any regime that creates vested rights for some without leaving room for Voice to those affected by it or that fails to incorporate mechanisms for enhancing Reflexivity is a governance failure.

(p.16) Voice

We argue that Voice and Reflexivity should be relied on as normative principles to guide the governance of essential resources. Voice captures the ability of all members of a group, community, or society to claim their share in resources essential to their survival. Reflexivity is the correlate of Voice; it stands for the capacity to question one’s preferences in the context of changing circumstances. Reflexivity requires that collective-action mechanisms be established to redefine interests and rights in a process of institutional reform that acknowledges competing claims and accommodates them to the fullest extent possible.

The concept of Voice is borrowed from Hirschman (1970), who famously identified “exit, voice and loyalty” as the possible range of options for members in organizations, both public (including states) and private. Voice is not identical with voting; the case of water management in Mumbai’s slums (Anand in this volume) suggests that the right to vote does not guarantee access to drinking water, even though it can help exert pressure on officials who have to stand for election. More generally, Voice stands for the normative proposition that people should have a say in the rules by which they are governed—especially when it comes to governing access to resources critical for their survival. Cafaggi and Pistor use the term “regulatory capabilities” to capture the notion of regulatory self-determination (Cafaggi and Pistor 2014). Regulatory capabilities are an extension of individual capabilities, the claim to live the life one has reason to value, as defined by Sen (1999) and Nussbaum (2011). Individual capabilities can be effectively realized only if institutions are put in place that empower individuals to develop their innate abilities. Leading a healthy life requires access to clean water, basic food, shelter, and health; education is a prerequisite for knowledge, reasoning, and participation in public life, including but not limited to elections. Providing these goods and setting up the institutions that govern them is a collective not an individual undertaking; this is what makes institutions that enhance individual capabilities “public goods” in the true sense of the phrase. And yet, only too often is the public excluded from framing governance domains and creating governance regimes that determine access rights and the scope of participation or Voice.

This exclusion is obvious when international treaties are signed following secret negotiations and without any involvement of branches of government other than the executive. The mere fact that in most countries (p.17) legislatures have to ratify an international treaty for it to become formally binding does not ensure actual deliberation or influence by democratically elected lawmakers. They are effectively left with a take it or leave it option. Exclusion also occurs when governing elites establish institutions at the domestic level without any attempt to encourage participation or to subject them to standard mechanisms of accountability or, indeed, when regulatory powers are delegated to private actors. This practice is problematic, because it undermines basic forms of self-governance; when applied to essential resources it is arguably abusive. Historically, legal rules that ensure a modicum of inclusiveness of property rights have evolved in “open-access orders,” that is, under conditions of fairly pluralistic political regimes with room for deliberation (North, Wallis, and Weingast 2009). This has helped mitigate conflicts between holders of potentially exclusive control rights and competing claimants (see Dagan in this volume). In contrast, closed- or limited-access orders have reserved framing and enforcement powers for the political elites, which only too often exercise it in an arbitrary fashion (see Pils in this volume).

Insisting on Voice challenges both the unfettered operation of markets and authoritarian or paternalistic regimes. A particularly difficult case is the transnational context, in which institutional structures for organizing and expressing Voice are largely absent. Indeed, current trends emphasize the importance of depoliticizing international law and institutions in the name of efficiency; they do so at the expense of contestability and publicness, ingredients we deem critical for self-governance. Further, in today’s world states are no longer the primary agents of governance. There is a burgeoning literature on the rise of the “new global rules” (Büthe and Mattli 2011) and on transnational private regulation (Cafaggi 2011). It documents the rise of private and nongovernmental actors in defining regulatory standards that are often vindicated by states or domestic regulators. The right to regulatory self-determination is therefore a claim directed at any actor—private, public, or hybrid—with the power and influence to frame regulatory domains. Applying this principle in practice will require new approaches to governance that take into account the specifics of the regulatory domain (i.e., a water reserve, a lake, or forest that offers economic opportunities to some and is the basis of subsistence for others) and the stakes involved.

The concept of essential resources requires every governance regime to include those dependent on the resource to partake in the design of the governance regime that establishes their access rights. Depending on (p.18) circumstances, these rights may be temporal or limited in geographical or quantitative terms. The choice of the exclusion benchmark will affect the relative inclusiveness of the governance regimes. Every property regime is necessarily based on exclusion (Hall, Hirsch, and Murray Li 2011); the critical question is not only where to draw the line but how—in particular, how porous or amenable is such a line to future change? As Edda Schlager points out in her contribution to this volume, some regimes use quantitative benchmarks (“How much can be harvested?”), while others apply pluralist approaches (“How many different uses can be sustained?”). The latter has greater potential than the former to evolve into an “architecture of inclusion” (Sturm 2006) that is commensurate with the normative claim of Voice to ensure access, because it invites different forms of usages and their contestation.

Voice does not necessarily call for direct participation—just as democratic governance is not equivalent with direct democracy. Instead it calls for deliberative governance (Sen, 1999), and no preestablished right can be absolutely immune against such deliberation. If the use of underground water resources depletes water reserves on which entire cities, states, or countries depend, then actual use must be moderated and property rights, insofar as they legitimate unrestricted use, must be curtailed. Otherwise, the exercise of these rights will give rise to a new form of the tragedy of the commons (Hardin 1968)—one in which private property rights result in the unsustainable exploitation of essential resources. Similarly, if land is expropriated for infrastructure projects, then the dispossessed who lived off the land should be afforded Voice in determining how they should be compensated: by current market value, a stake in the project, or compensation in kind, such as reallocation. This would allow them to choose the option most suited to their circumstances, including access to alternative sources to meet their demands for essential resources or to employment or migration options that would offer alternative avenues for meeting their needs (Lehavi and Licht 2007). Most legal systems offer “adequate compensation” for expropriation based on the market value of the claimed property. Employing alternative forms of compensation presupposes that those to be dispossessed are sufficiently organized to express their preferences—a difficult task, especially when they have heterogeneous interests and face collective-action problems (Olson 1971). To effectuate Voice in these cases, special arrangements are required. An interesting example comes from India: In the aftermath of violent uprisings against (p.19) large-scale expropriation for the benefit of infrastructure development, rural land departments encouraged landowners to join cooperatives as a means of self-organization and increasing their bargaining power (Balakrishnan 2013).

Reflexivity

Reflexivity complements and expands on the notion of Voice: As we use it, the concept refers to the capacity of actors to actively participate in governance processes that allow them to reshape their preferences in the light of a broadened range of alternatives. Reflexivity thus stands for the capability to reimagine solutions and update interests in light of competing claims, changing circumstances, and mutual learning processes (De Schutter and Lenoble 2010). The concept takes as a point of departure the relative weakness of Voice of the most vulnerable constituencies in most societies. Simply registering what the poor and marginalized say about their condition or changes they most desire ignores the fact that their evaluation may be shaped by existing social norms (da Cunha and Junho Pena 1997). Extensive research suggests a psychological tendency to adapt one’s preferences to one’s situation (Elster 1982, 1983). Furthermore, the poor may have only limited imagination for altering their current predicament. Clearly, adaptive preferences are a useful survival strategy for those who have little choice (Kahneman, Diener, and Schwarz 1999) and allows them to “make the best” of the set of circumstances with which they are confronted (Teschl and Comim 2005). There is, however, no reason that these beneficial effects should be limited only to social groups that lack Voice or resources to change their circumstances on their own. The notion of Reflexivity acknowledges a dialectic relationship between individual preferences that reflect existing institutional arrangements and processes of institutional change that offer alternatives.

The inclusion of Reflexivity in the governance of essential resources distinguishes ours from the “basic needs” approach that has influenced discussions concerning poverty reduction since the 1970s (Stewart 1985, 1995). At least in part in response to this approach, Sen emphasized the imperative of individuals having an adequate set of capabilities and suggested that development could be measured as the expansion of capabilities.7 Capabilities are distinct from the actual achievements or functionings of the individual, that is, a person’s “doings” or “beings.” (p.20) They refer instead to the possibilities an individual has to lead a life which he or she values:

A functioning is an achievement, whereas a capability is the ability to achieve. Functionings are, in a sense, more directly related to living conditions, since they are different aspects of living conditions. Capabilities, in contrast, are notions of freedom, in the positive sense: what real opportunities you have regarding the life you may lead.

(Sen 1987, 36)

The capabilities approach respects the plurality of conceptions of a good life more than approaches that focus exclusively on individuals’ income or actual achievements, their material condition. It emphasizes the need to provide individuals with the means to make significant choices and refrains from imposing goals or values as if they were desirable in themselves. Instead, it places the value of freedom (or individual choice) among the values that make a life valuable: If one individual has a choice between different styles of life and chooses one of those styles, his or her situation is more desirable than that of another individual who has attained precisely the same style of life and corresponding standard of living but without the freedom to choose.

And yet, the capabilities approach leaves open the determinants of individual choice, in particular the ability of individuals to make choices that are informed not simply by existing institutional arrangements but by an awareness of the possibilities of alternative arrangements that could result from collective-learning processes. Institutions or processes that allow for collective learning and the search for novel means for governing the allocation of resources are critical for Reflexivity. Such institutions could help mediate between conflicting interests. Indeed, one of the key advantages of reflexive governance is that it moves beyond mutual learning (Sabel and Zeitlin 2008) to focus on the process for discovering solutions and addressing conflicts between competing claims.

The concept is applicable well beyond essential resources but is particularly pertinent in this context. Access to essential resources is a moral imperative that imposes obligations on those with control rights over these resources or those whose actions might affect supply and access. Their rights, we suggest, are morally bounded by the legitimate needs of others to receive access to these resources. To effectuate these rights, legal and institutional arrangements must be put in place that encourage a permanent redefinition of access rights in the light of the need (p.21) to accommodate conflicting claims on resources. This presupposes that social actors are capable of imagining solutions that can strike an appropriate balance between conflicting interests and in this process redefine their own preferences.

Reflexive governance may sound utopian, yet there is ample evidence that social groups are quite capable of governing resources in ways that are both inclusive (ensuring limited access for all) and sustainable (avoiding depletion of the resource in question). Dealing with competing claims that do not stand in a clear hierarchical fashion to one another is nothing new to social practice or law. Common-pool resource management (Ostrom 1990) offers many examples. Moreover, courts in several jurisdictions have recognized the need to reconcile competing claims and have developed appropriate doctrinal vehicles. A prominent example is the doctrine of practical concordance that Germany’s Constitutional Court has developed (Brugger 1994; Hesse 1995, 172). It holds that in cases where competing claims are protected by different constitutional norms with neither given explicit priority, a compromise must be found that curtails each right but only to the extent necessary for the other right to receive recognition as well. Practical concordance is not a silver bullet but a way of reconciling inevitable conflicts between rights and values that cannot be resolved by imposing hierarchies or priorities. It is also distinct from balancing, because it takes into account what may be called the declining marginal utility of recognizing rights: Once a right has been recognized to a certain degree, any greater amount of recognition would only marginally benefit the right holder while potentially negatively affecting conflicting claims. The idea of practical concordance tends to prioritize equal distribution in resolving conflicting claims. It calls for institutional imagination to maximize the possibility of upholding both claims simultaneously rather than sacrificing one for the other, which may require both rights to be compromised.

This approach contrasts with approaches that seek to sidestep the challenges of complexity by narrowing the scope of each policy intervention to a one-dimensional problem. If it were indeed always possible to unbundle competing normative goals and subject them to different policy strategies (Tinbergen 1956), there would be no need for practical concordance. Unbundling, however, is infeasible where conflicts among competing claims are “inherently unresolvable” (Arrow 1958, 91) from a welfare-optimization perspective. Such problems require normatively grounded rather than efficiency-grounded reconciliation and recognition that no claim is absolute.

(p.22) Such normatively grounded solutions presuppose shared values and an authority to enunciate them. As Hadfield and Weingast have suggested, law or a legal authority does not necessarily require a full-blown state; sufficient is some agent deemed legitimate by the community to announce binding rules that can be enforced by members of the community (Hadfield and Weingast 2012). The critical element here is community, because any claim for equitable access presupposes at least a modicum of community (Dubet 2014). Communities, however, are not given but are socially constructed. Benedict Anderson has labeled the nation-state an “imagined community” (Anderson 1991). For people living in villages and small townships in early modern times with little information about villagers and townspeople further away than the nearest marketplace, the notion that they were part of a single “nation” must have indeed appeared far-fetched, perhaps even more so than claims about the emergence of a global cosmopolitan community (Appiah 2007) in today’s world with its advanced information technology. The important insight of Anderson’s analysis is that the rise of the nation-state required not only new modes of governance and organization but (also) a shared identity and destiny both within and beyond nation-states. These are long-term processes of social constructions and reconstruction. Indeed, to this day we witness nation-building efforts, for example, in fragmented India (Guha 2007) or in Europe, where attempts to create a “demos” made of citizens that could shift loyalties from the nation-state to the European Union are still under way (van Middelaar 2013). It is, however, not inconceivable to create a sense of community beyond nation-states. Take, for example, the Committee on World Food Security (CFS) that was formed in 2009 in Rome (De Schutter 2012). It started as an intergovernmental body but following the global food crisis in 2007–2008 was transformed into a multistake-holder forum that now includes states, international organizations such as the WTO or the World Bank, and private-sector participants and philanthropic agencies. The CFS plays a critical role in monitoring food security and investigating the causes of food insecurity.8

Institutional arrangements or legal rules alone may not be sufficient for achieving the normative ends of universal access to essential resources. Reflexivity is doomed, however, without institutions that reward and foster notions of other-regarding preferences (Blair and Stout 2001). Institutional arrangements that emphasize rights and call for their uncompromising enforcement in the name of efficiency and legal certainty not only fail to do so, they undermine the normative fabric required for (p.23) Reflexivity. We do not go as far as arguing that property rights or the pricing mechanism are incompatible with Reflexivity, but they need to be tamed. The enforcement of rights could be made contingent on their compatibility with other norms; alternatively, ex post intervention may help complete contracts or governance regimes that are left incomplete for failure to address such contingencies. Consider the case of agricultural markets: Natural disasters can make it impossible for many to perform in accordance with contracts committed to ex ante. An externally imposed debt moratorium can bring relief in such circumstances by completing contracts that failed to provide for relief in times of natural disasters or other exogenous shocks (Bolton and Rosenthal 2002). A common objection to such interventions is moral hazard. Nonintervention, however, can force those struck by natural or human-made disaster into destitution or worse. In short, justice may demand intervention from time to time, even if this comes at the expense of efficiency.

Departures From Existing Discourses

As mentioned above, the allocation of scarce resources is associated primarily with the field of economics. Indeed, the economic analysis of property rights has dominated policy circles and much of academia for the last few decades. In this section we seek to differentiate our approach from this dominant paradigm. We recognize that other literatures in sociology, anthropology, and environmental studies have also contributed to these debates, and we believe that many of the insights they have produced are highly relevant to addressing our questions. A full review of all relevant literatures would, however, go beyond the scope of this introductory chapter. We hope that the interdisciplinary background of the other contributors to this volume and the diversity of analytical frameworks they bring to bear will fill this gap.

The notion of essential resources contrasts with the dominant approach to property, which links principles of allocation to physical characteristics of the goods in question, not to normative principles.9 Subtractability and excludability are the criteria used for determining the nature of goods (Ostrom 2003). A good is subtractive if consumption by one person subtracts from the consumption of others (Samuelson 1954; Musgrave 1959). It is excludable if, because of its nature, institutions, or technology, it is feasible to exclude others from access to and use of the good. Collective-action problems arise, according to the classic account, (p.24)

Table 1.1 Typology of Goods

Consumption is Subtractive

Consumption is not Subtractive

Exclusion is feasible.

Private goods

Exclusion is not feasible.

Common-pool resource

Public goods

Exclusion is economically inefficient.

Anticommons

Exclusion threatens survival.

Essential resources

Source: Authors’ compilation following fig. 1 in Ostrom (2003, 241).

when goods are subtractive but not excludable, resulting in the “tragedy of the commons” (Hardin 1968), wherein resources that all can freely access will be overexploited and eventually depleted to the detriment of all. The common answer to this problem is to privatize the commons and vest the owner of the asset with the right to exclude.

Table 1.1 builds on Ostrom (2003, 241) in classifying goods, but differentiates between excludability that is economically inefficient—what Michael Heller has termed the “tragedy of the anticommons” (Heller 1998)—and excludability that is not desirable because it deprives fellow human beings of resources that satisfy basic needs, that is, essential resources.

The governance of essential resources raises issues that extend further than the need to ensure increased productivity in the exploitation of the said resource. It calls attention to distributional equity as well as to sustainability—that is, the compatibility of current uses with the satisfaction of the basic needs of future generations, in accordance with the famous definition of the 1987 Brundtland report (United Nations 1987). In other words, though efficiency matters in the governance of resources, we argue that it should be promoted with the proviso that nobody should be excluded from resources that are essential for satisfying basic needs; further, the exploitation of the resource today should not jeopardize the ability of future generations to satisfy their needs. Governing access to essential resources therefore requires different approaches than those economists tend to associate with conventional classifications of public, private, or common goods. In fact, the standard governance regimes applied to private or public goods tend to fall short when applied to essential, scarce resources.

To illustrate this, we present a taxonomy of different governance regimes generally associated with different types of goods (see table 1.2). (p.25)

Table 1.2 Typology of Property Rights Regimes

Individual Property

Centralized Property

Communal Property

Private goods

X

X

X

Public goods

0

X

X

Common-pool resources

0

0

X

Anticommons

0

X

X

Essential resources

0

0

0

Note: “X” is used to indicate the compatibility between a good and a governance regime, and “0” is used to indicate incompatibility.

Private goods are typically slated for individual property rights to ensure their efficient use; public goods for centralized (state) property regimes; and common-pool resources for centralized or communal property regimes. Finally, the problem of the anticommons (when exclusion is technically feasible but creates inefficient delays) is addressed by central intervention with private property rights, that is, by the state exercising the power of eminent domain (Heller 2008). However, communal forms of property could feasibly address this problem. These governance regimes constitute the repertoire of regimes under which all resources are most commonly managed. It is important to understand the limitations that this classical approach faces and why the dominant regimes leave a number of questions unanswered.

The juxtaposition of goods and governance regimes in table 1.2 shows that some goods are compatible with more than one governance regime. Specifically, private goods can be governed in the alternative by individual, centralized, or communal property rights. This is particularly true for land. Though it was treated for much of human history as a common and unlimited resource, land has also been governed as centralized state, communal, and individual property. The versatility of private goods in relation to governance regimes contrasts with the incompatibility of essential, scarce resources with any governance regime (see table 1.2). Individual property rights over such resources are problematic, because their dominant mechanism, that is, the ability to exclude others (Coase 1960; Demsetz 1966), is morally repugnant when exclusion violates basic needs. Centralized property rights pose their own problems, because the power of central control does not guarantee universal access or effective use (Umbeck 1981; Campbell and Lindberg 1990; Firmin-Sellers 1995). Finally, communal property rights presuppose communities with the (p.26) capacity of collective governance (Ostrom 1990; Ellickson 1991; Schlager and Blomquist 1998)10—conditions that may not be present where constituencies with heterogeneous interests and varying power seek access to the same resource, whether locally or globally.

Over the past thirty years, individual property rights have been favored as the optimal governance solution for most resources, including essential resources such as land (Deininger 2003). Titling programs promoted by multilateral and bilateral development agencies have extended the geographical remit of individual property rights by penetrating a larger number of countries in the developing world (World Bank 2010). Control rights over land are increasingly allocated to the highest bidder across national boundaries in a market-driven process, ostensibly in the name of promoting the most efficient use of resources (Coase 1960). Under private property rights regimes, individual control rights over land will determine who has access to these essential and increasingly scarce resources and whether they are harvested in a sustainable fashion.

Experience with land privatization suggests that this can take a substantial toll on millions of peasant smallholders and forest dwellers who are being deprived of the basis of their sustenance (Cotula et al. 2009; Zoomers 2010; De Schutter 2011). Moreover, while private property regimes have been traditionally justified by their contribution to increases in productivity, they provide no assurance of sustainability, that is, the preservation of essential resources in the interest of future generations (Beddoe et al. 2009). Finally, whereas private ownership and the allocation of land through market mechanisms were intended to translate into higher productivity, this hope did not always materialize. Those who place the highest bid on the land, it was reasoned, surely were best equipped to maximize production resulting from the use of land. In reality, some owners are tempted to hoard land without using it to increase total output but instead to speculate on further price increases (De Schutter 2011). To the extent that economic efficiency is associated only with effects on price (Demsetz 1966), this outcome is, of course, efficient, but it violates the normative principles put forward in this paper.

The alternatives to individual property regimes in the classic repertoire do not fare much better when applied to essential resources. Centralized control is the ultima ratio for dealing with the problem of scarcity, as demonstrated time and again in times of war or emergencies, when governments requisition critical assets and resort to rationing. These cases also exemplify the problems associated with centralized control: abuse (p.27) of power and mismanagement of resources. Any government that has the power to decide on the allocation of resources also has the power to determine who may benefit from them and to exclude others at its whim (Binswanger, Deininger, and Feder 1995). Moreover, government control often suffers from mismanagement, as bureaucratic management and accountability structures frequently fall short of the governance tasks at hand.

Communal property regimes also face limitations when applied to essential resource management. Governance mechanisms that ensure the survival of the community do not always ensure that its weakest members have equal access to essential resources. Discrimination against girls and women, minorities, or others deemed “outcasts” remains only too common. Communal property regimes face another problem in today’s world. The scarcity of essential resources now plays out at the global level: With the emergence of a transnational market for land (World Bank 2010; De Schutter 2011), water, and carbon, the competition for control of these resources pits actors located in different jurisdictions against one another; similarly, with climate change and increasing pressure on natural resources, the management of essential resources must take into account not only the interests of local users but also of constituencies far afield whose basic needs would otherwise be difficult to meet. Furthermore, externalities may result from how one community chooses to manage the resources over which it exercises control. The unsustainable use of a resource may affect the ability of other communities to satisfy their basic needs (i.e., where shifts in land use increase greenhouse gas emissions or agricultural production pollutes shared groundwater reserves). To be effective in the global context, communal governance regimes would need to expand their remits to the global community. In other words, even when localized communal regimes ensure effective governance of essential resources, they do not address the problem that these resources are distributed unevenly around the globe, where such communal regimes are not operable.

In addition, each of the property regimes associated with the classic approach assumes institutional arrangements for its operation that may or may not be present (see table 1.3). The efficacy of individual property regimes depends on their delineation and legal validation (Benda-Beckman 1995; Hodgson 2003) and on markets and the operation of the price mechanism. Yet transactions in real property are conducted typically not in transparent, liquid markets but in private deals characterized (p.28)

Table 1.3 Conditions for Effective Property Regimes

Individual Property

Centralized Property

Communal Property

Clear delineation of rights

Effective management

Shared norms of reciprocity and community

Market

Information

Information

Enforceability

Authority

Long time horizon

Low monitoring and compliance costs

by asymmetries in information and power: The value that is attached to the resources exchanged is typically determined not by some objective standard related to the relative use to the transacting parties but by the bargaining power the parties to the transaction can exert on each other.

Effective public asset management and accountability systems must be in place to avoid the typical pitfalls of centralized regimes, that is, arbitrariness and waste. Resources should instead be managed in the public interest, and opposing interests of different communities or geographically dispersed groups should be reconciled (De Schutter 2012). This requires information about how resources are managed, knowledge about how to improve their management, and mechanisms for implementing reforms. Moreover, the central manager must have both the authority and legitimacy to manage these resources, lest shirking, corruption, and theft will erode them. At the global level, no such regime exists.

Finally, decentralized communal property regimes may not be transposable to governing essential resources at the global level. This would require the development of shared, general norms of reciprocity and community. Experience with divided jurisdiction over the same watershed or lake system suggests that common management of such a resource is difficult although not entirely infeasible (Ostrom 2010). While powerful arguments have been made that cosmopolitanism is feasible (Appiah 2007)—as announced by the growth of global social movements (Miller 2006)—the challenges facing multilateralism today suggest that its full realization will remain aspirational for some time to come. The efficacy of communal property regimes depends on a fairly long-term horizon as well as sufficiently powerful incentives for a community to invest in collective governance—a substantial challenge in a world characterized by high levels of heterogeneity, mobility, and the absence of institutional arrangements that would give Voice to the diverse interest groups.

(p.29) In summary, the classical approach focuses on efficient use of a resource and neglects considerations of distributive justice. It also makes heroic assumptions about the rationality of individuals and about the predominance, in choosing their course of conduct, of utilitarian considerations based on fixed self-interest.11 We argue that for essential resources, a normative approach is required that embraces Voice and Reflexivity as the guiding principles for designing and adapting governance over time.

We now turn to the other contributions in this volume. They can be divided into three groups: those that wrestle with the concept of essential resources and seek to understand how it can be operationalized for different assets or in different contexts; others that tackle questions of Voice and Reflexivity; and finally, case studies that explore actual governance of essential resources in various regional contexts or that suggest alternative approaches.

Essential Resources: Challenges Ahead

Derek Hall in his contribution “Land’s Essentiality and Land Governance” problematizes the concept of essentiality by applying it to the case of land. He argues that land is not only a critical resource for the survival of each human being; rather, land also needs to be understood in its spatial and territorial dimensions. As such, land is a source not only of individual but of collective survival. Further, the claim that all should have access to essential resources does not resolve the legal question of whether access requires ownership or other forms of property rights or whether a specific plot of land might be substituted for another. This implies that context matters not only for defining what resources shall be deemed essential but also for determining the rights or causes of actions that follow. Further, for some groups land is essential for their social identity. Depriving them of a specific piece of land challenges their survival as a group and often fuels conflict. By the same token, identity-based claims often stake out exclusion claims that deprive others of access to the land. Last but not least, the normative claim of essentiality is in tension with processes of economic and social differentiation embedded in the operation of global capitalism. In short, Hall argues that while land is often deemed essential for those directly dependent on it, it differs from other resources associated with guaranteeing basic needs such as water, food, and shelter because of the complex nature of this asset and its varying roles in the lives of individuals and collectives. Drawing attention to essentiality is thus not a panacea (p.30) for solutions; it is only the beginning of an inquiry into a set of complex issues that require context-specific analysis.

In “Governing Boundaries: Exclusion, Essential Resources, and Sustainability” Edella Schlager urges a broader conceptualization of essential resources that focuses not only on demand—access to and the allocation of scarce essential resources—but also on supply. Potable water depends on lakes and watersheds, that is, on environmental infrastructures rather than human-made institutions. Ensuring the maintenance of this infrastructure is critical for the sustainability of essential resources. On the demand side the more familiar problem of how to govern access to common-pool resources arises; this is typically managed by quantitative restrictions and the like. Failure to manage demand can exhaust the resource, resulting in the well-known tragedy of the commons, but so can failure to ensure supply. Thus, Schlager argues that at a deeper level, the tragedy of exclusion we postulate is actually a twin crisis of the failure to prevent overusage of a common-pool resource and to protect the supply of environmental services. Quantitative restrictions on resource extraction alone are insufficient for avoiding this twin crisis. Instead, a shift toward considering how many different usages and/or users shall be recognized and protected is required.

While Schlager emphasizes the importance of the physical infrastructure, Hanoch Dagan’s chapter focuses on the law, or the social infrastructure, for governing essential resources. In “Property Theory, Essential Resources, and the Global Land Rush,” he claims that property rights and market competition can be reconciled with the notion of essential resources. In his view the classification of resources as essential does not raise questions and concerns that are fundamentally different from a properly understood and normatively guided property discourse. Dagan asserts that the dominant theoretical view of property rights—as depicted in our literature review—is mostly prescriptive rather than descriptive: The emphasis on exclusion and individual autonomy does not reflect the state of the common law or other legal systems for that matter. The legal systems in developed market economies tend to be much more accommodating to competing normative and social claims, and the actual operation of property law is more inclusive than is often assumed. More generally, property can be reimagined to incorporate values such as Voice and Reflexivity, and the market could and should be enlisted to pursue these goals. To this end, auctions could be designed to ensure there is sufficient buyer competition, or antitrust law could be brought to bear to (p.31) counter monopolies. Dagan concedes that not all of these mechanisms are available in all legal systems, much less in the transnational realm. Yet he insists that, in principle, they could be put in place and that existing legal institutions offer important models as guidance.

Nikhil Anand’s contribution, “MultipliCity: Water, Rules, and the Making of Connections in Mumbai,” suggests that the supply of essential resources can be curtailed not only by the physical nature of the environmental infrastructure but equally by human-made physical and social infrastructures. Indeed, the human-made infrastructure is often just as unbending as nature in compelling those seeking access to devise costly circumvention strategies. He analyzes the municipal water system of Mumbai, originally built during English colonial rule and at the time supplying water exclusively to English settlers. While the physical scope was expanded over time, this system still serves only parts of the city. Millions of slum dwellers living in Mumbai today are excluded from access, as the plumbing does not reach their settlements and legal rules deny access to those unable to document settlement prior to 1995. To get around the constraints of plumbing and law, settlers bargain with councilmen in return for their vote in municipal elections, negotiate with engineers, pool households able to pay for the supply of water, or turn to violence. Full privatization of water is vehemently resisted irrespective of possible gains in terms of reliability, mostly because it would undermine this complex set of relations on which settlers have come to rely. Anand thus extends Hall’s insight that classifying resources as essential may help clarify the normative stake but does not lead directly to institutionally operative solutions. As it turns out, even drinking water, the least disputed of essential resources, raises a host of complex issues that require a deep understanding of context-specific social structures and power relations. An important insight of this work is that Voice and Reflexivity is only loosely related to whether essential resources are governed by public or private regimes (markets or bureaucrats). While the vote in (public) municipal elections enhances the bargaining power of settlers, personal relations and bargaining, including the pricing mechanism, play an equally important role.

Beyond Voice and Reflexivity

Eva Pils in “Voice, Reflexivity, and Say: Governing Access to and Control of Land in China” uses land use and reallocation practices in China to shed new light on the notion of essentiality and the claim that (p.32) Voice and Reflexivity offer guidance for addressing questions of fundamental injustice. She places our framework into a broader philosophical discourse and associates it with Peter Singer and others who developed a global theory of responsibility. This leads her to warn against the consequentialism and utilitarianism associated with that body of work. Most importantly, she warns against focusing too much on the distributional consequences of property rights that honor the right to exclude while overlooking injustice in the process of redistribution. China serves as an interesting example, because it features state actors who, in the name of development (but not infrequently for personal gain), use state power to expropriate individuals. These practices are deeply unjust. They deprive the affected individuals of access to essential resources, and as illustrated by the fact that many owners have committed suicide in response to such injustice, they rob people of their human dignity. Voice and Reflexivity, according to Pils, fall short of guarding against injustice in general. Rather, people must be given much greater “say” in their lives—including the right to exclude the state from interference with their rights save for exceptional circumstances.

Alain Durand-Lasserve offers an interesting comparison with Pils’s analysis of land rights in China. He studies peri-urban areas and hinter-lands of West African cities and argues that any formalization of rights to land needs to take account of social practices and highly uneven bargaining power of different actors. Zoning and titling programs introduced by the World Bank and other developing agencies that ignore these practices are bound to fail, or worse, they tend to accelerate the concentration of land in favor of the elites. Durand-Lasserve presents an analytical framework for diagnosing land use and allocation practices that takes account of tenure security and property rights but also of the channels through which land is reallocated, given these initial conditions. Moreover, he highlights the importance of a well-run land administration for limiting graft and capture. Only too often bureaucrats collude with well-heeled agents wishing to obtain formal title for land acquired in informal markets, or from parties with weaker rights. Put differently, Voice, Reflexivity and Pils’s “Say” can be undermined not only by a powerful state but also by rampant corruption, with the legal title to land itself becoming an item for purchase by the better off. Aid organizations only too often play into the hands of this system, as they make assumptions about market efficiency and the operation of law that are at odds with practices on the ground.

(p.33) Michael Dwyer’s analysis of land-titling efforts in Cambodia points in a similar direction. In “Redirecting Regulation? Land Titling and Cambodia’s Post-neoliberal Conjuncture,” he documents the failure of ambitious land-titling schemes in the aftermath of Cambodia’s civil war. The World Bank’s land-titling operation closed down in 2009, after it fell seriously behind target numbers. The civil war had disrupted informal land tenure and formal property rights alike. After the war the government allowed farmers to apply for recognition of title, which quickly evolved into a system of quasi titles. At the same time, the government sought to spur economic development by granting concessions to timber-extraction companies. As Dwyer shows, newly emergent smallholdings on one hand and large-scale land control via concession agreements on the other set the stage for a sharply bifurcated property regime that not infrequently gave rise to conflicts. Alternative programs aimed at granting land rights to collectives (villages) were marginalized as bureaucrats dragged their feet or preempted the programs by claiming land as state owned for the purpose of reallocating it to more lucrative uses. More successful were programs whereby state land was redistributed to the poor. In short, Dwyer argues that governing essential resources requires more than minimum regulation in the form of zoning or titling programs, which are oblivious to domestic and global power relations. A superior approach would be to emphasize the multiplicity of normative goals—equity and sustainability in addition to economic productivity—and to empower local actors to effectively voice these concerns.

Like Dwyer, Vamsi Vakulabharanam emphasizes the dynamics of economic processes unleashed by neoliberal policies that spur cycles of primitive capital accumulation—in this case natural resource mining in rural India. In “Erosion of Essential Resources in India: A Bottom-Up View,” he compares the fate of different legal protections for landholders when confronted with powerful interests of private investors who are often in collusion with state officials. India has a complex legal regime for property rights, with different rights for different constituencies. People who have been recognized as “scheduled tribes” under the Indian constitution have important procedural rights meant to protect their social identity—rights that go well beyond the procedural hearings granted to village governments in which only ordinary peasants are concerned. Tribal veto powers are anything but cosmetic: They have in fact been frequently and successfully litigated at the federal level. However, mining concessions and other privileges are granted at the state level, and it is the state (p.34) government that benefits from investments by way of fees, taxation, and economic spillovers (i.e., employment) that may result (if indeed they are forthcoming). The comparative analysis of how peasants and tribal people fared in Andhra Pradesh when their land was found to be of interest to large mining companies reveals that differences in legal protection make little difference in outcome. Law is not simply set aside, but loopholes are exploited in ways that render largely toothless the Voice they were meant to protect. Further, the economic value at stake and the lack of any mechanism to force the internalization of social costs such as environmental degradation and health hazards creates few incentives for investors or state officials to incorporate the interests of tribes or peasants into their strategies. Vakulabharanam concludes from this analysis that institutional design is futile when confronted with the logic of global capitalism.

In contrast, Michael Cox’s work on two communities in the arid West of the United States shows that ex ante institutional design can generate divergent outcomes. One community—the San Luis Valley in Colorado—adheres to the principle of “first come, first served” for allocating riparian water rights, a principle that was widely adopted for westbound migration in the eighteenth century and has subsequently been incorporated into the law of many states. The other community, acequias in Taos, New Mexico, uses collectively monitored temporal sharing arrangements. In times of water abundance both systems work reasonably well. In times of water scarcity the first produces substantial negative externalities. While those who come first can ensure their economic survival, those further down the line are left with the choice of abandoning agriculture or resorting to self-help. To avoid economic disaster many have drilled their own water wells, relying on the legal principle that property owners can indiscriminately exploit subsoil resources irrespective of the effect on a common-pool resource, such as a shared river basin. In contrast, temporal sharing arrangements have been more adaptive to changes in environmental circumstances as communities rely on existing practices to adapt their water needs. Based on this analysis, Cox urges consideration of the long-term effects of institutional choices and their adaptability to changing circumstances. This analysis calls attention to the fact that while conventional property rights theories assume that most social problems can be resolved through bargaining, once rights have been clearly allocated (as implied by the Coase theorem derived from the work of Ronald H. Coase [1960]), under conditions of absolute scarcity individual property rights may exacerbate problems rather than offer solutions.

(p.35) Governing Essential Resources in Action

The remaining contributions present accounts of how essential resources are governed in different parts of the world. Some are empirical, while others sketch out normative solutions based on evidence, historical precedents, or theoretical insights gained from field research.

Vanessa Cassado-Pérez, in “Go with the Flow: Lessons from Water Management and Water Markets for Essential Resources,” investigates water markets. In line with Dagan’s arguments, she suggests that the market mechanism can be put to use for allocating scarce water resources as long as it is properly governed. Her empirical evidence is drawn primarily from developed market economies—California and western Europe. There, priorities for water usage are determined ex ante and incorporated in legislation that governs both primary water allocations and secondary markets where water rights can be traded. Further, these jurisdictions benefit from a legacy of reasonably well-functioning legal institutions that can be employed for determining specific rights to water and ensuring their enforcement.

Scott McKenzie complements Cassado-Pérez by focusing on the ecology of water. In “Ecology: Water Governance’s Missing Link,” he shows that governance regimes that emphasize human rights, water basin management, or the ecology of water not only lead to different governance solutions but affect the sustainability of this essential resource. He thus confirms Schlager’s insight that failure to account for environmental constraint contributes to the tragedy of exclusion associated with human-made governance regimes. Importantly, McKenzie identifies possible solutions for avoiding or prolonging the effects of absolute scarcity, most important among them are strategies for reusing water and politics that make these strategies palatable.

John Hursh’s “Water Scarcity in Morocco: Voice, Narrative, and Essential Resource Governance” takes the analysis of water management to Morocco. This country has a tradition of water scarcity, but climate change, intensive agriculture, and an expanding tourism industry have put additional pressure on this essential resource. Government policies tend to favor irrigated agriculture and tourism, which help fuel economic growth and development, over other usages. Recent years, however, have seen greater emphasis on social programs that broaden water access, including to women. Water use associations have played a critical role in this regard. Hursh emphasizes that this shift is largely a result of a change (p.36) in the narrative on water and water management. He suggests that this is an important additional mechanism beyond Voice and Reflexivity.

Nilhari Neupane takes the problem of governing access to essential resources to the international stage in “Solving Transborder Water Issues in Changing Climate Scenarios of South Asia.” Many countries share a common river or water basin. Their location determines ease of access and use potentially at the disadvantage of neighboring countries and their people. Power relations, however, can reverse the effects of physical geography. In his account, India, which is situated downstream on the Ganges basin, has used its regional power to gain greater access to water for irrigation and electricity at the expense of Nepal, its upstream neighbor, and Bangladesh, its downstream neighbor. He employs a principal-agent model to show that cooperation can produce superior outcomes for all concerned as compared with the single-minded exploitation of hegemony. In the model, principal and agent share a common resource but trade access for services. A contractual solution providing for sharing is the optimal outcome. Even as reality deviates from this outcome, the model offers some hope that contracting mechanisms can be employed to advance the normative goals associated with Voice and Reflexivity.

Laila Macharia shows how the process of negotiation of a new social contract and a constitution can be used to broaden the Voice of communities over land rights. In “Voice and Reflexivity in Essential Resources: Reforming the Community Land Regime in Kenya,” she attributes conflicts of land access and use rights to the history of colonialism and the tension between community land rights and property regimes imposed during colonial rule. Following independence, community rights were converted into private rights without resolving conflicts over competing claims. Following the breakout of violence after the contested 2007 elections, a new constitution was drafted, and land reform became one of its central features. Community-based organizations participated in the drafting process and were thus able to voice their grievances and aspirations. Moreover, institutions were created to monitor the process of land reform—creating the possibility for continuing dialogue and thus Reflexivity. Much will depend on how these organizations are run. However, this case offers some perspective on how processes of institutionalization can further inclusion and contribute to social peace.

Moving from the positive to the normative accounts, Manase Kudzai Chiweshe’s “Do Traditional Institutions Matter in Participatory Essential Resource Governance Systems in Zimbabwe?” seeks to broaden our search (p.37) for alternatives to individualized property rights for governing essential resources by harnessing social knowledge and practices from traditional societies. He argues that in Zimbabwe local chieftains hold the authority needed for effective governance, indeed that this authority could be used to raise awareness for Voice and Reflexivity. While he concedes that in the past chieftains have often discriminated against women and other minorities, this does not mean that these institutions could not be updated to an evolving normative framework. Most importantly, as community-based institutions they could assert the needs of the community and play a critical role in the internal allocation of scarce resources.

Finally, James Krueger, in “Local Corporations: An Organizational Form to Reduce Information Costs and Maintain Supportive Resources,” asserts that absolute scarcity poses a fundamental challenge to human-kind. He agrees with our argument that Voice and Reflexivity depend on communities and develops a framework for creating communities with the capacity to govern in accordance with these normative principles. Specifically, he advocates a system of layered governance, with local corporations that control essential resources occupying a role as intermediaries. These local corporations should retain some control over entry and exit; include multiple stakeholders who share collective responsibility for the entity; and employ governance regimes that promote good governance.

Conclusion

How we frame problems sets the stage for finding solutions. The challenge of allocating scarce resources can be framed as a question related exclusively to the economic value of the resource as expressed by the pricing mechanism. Alternatively, it can be framed as a question of equity in accessing essential resources. Moving from asset to users (current and future ones) and shifting the focus from efficiency to essentiality is, in effect, an exercise in reframing: It restates the problem as a potential tragedy of exclusion (deprivation from essential resources) rather than a tragedy of the commons (unsustainable depletion of shared resources) or the anticommons (inefficient hoarding).

This shift does not come without costs. Most importantly, the classification of a resource or asset as essential does not map directly onto any specific governance solution. Rather, it calls for further inquiry into the political, economic, and social contexts to find solutions that will achieve the normative outcome. For some this complication will appear (p.38) too costly. Defining property rights and using pricing mechanisms for allocative purposes in line with the Coase theorem offers a much simpler and, therefore, a perhaps more appealing solution. Yet rarely do property rights operate in the real world as depicted in these simple models. As Coase himself insisted, social costs are part and parcel of human existence, which is why the initial allocation of rights and the institutions that govern their reallocation are both critical (Coase 1960). Property rights are part of a complex social fabric and stem from power relations that affect the allocation of assets and control over access. Where formal legal regimes effectively mitigate power and ensure a modicum of inclusion, they tend to be the product of political and social contestation within complex institutional arrangements that foster contestation.

Complexity in governance, we suggest, should not be avoided but embraced. Governing access to resources that are both scarce and essential is complicated normatively, politically, and institutionally. No governance regime is likely to provide a simple solution or to last forever. We therefore do not advocate a specific institutional fix or a search for an optimum; what is optimal in one context may be inoperable elsewhere due to different social or environmental conditions. Instead, we emphasize the normative principles that should govern the access to essential resources: Voice and Reflexivity. These are open-ended concepts that can and should be institutionalized in different ways. They are critical ingredients for deliberative democracy but are meant to offer normative guidance beyond domestic polities—the only domain where democracies have been successful as of today. And they point toward a “thick” property regime, where rights can be contested, competing claims made, and institutional arrangements reconfigured over time to take account of changing circumstances and the reflexive adaptation of self-interests. We contrast this with the “thin” concept of well-defined property rights allocated by the pricing mechanism to produce efficient outcomes. By focusing on a single dimension of assets and resources, that is, their price, the task of thin property rights seems much easier. Yet they fail to address critical social problems, namely how to ensure that all whose survival depends on a resource will have adequate access. If water, food, or shelter is allocated exclusively by the pricing mechanism, some other mechanism has to kick in to avoid the logical outcome of freewheeling markets—pricing out those who lack sufficient purchasing power. Such mechanisms—whether tax policies, subsidies, or public provisioning of essential resources to the most needy—are not available everywhere, and even where they are, they (p.39) offer only a partial solution. Paying heed to the principles of Voice and Reflexivity ensures that normative concerns are addressed not only as an afterthought—that is, once negative externalities (market failures) have become apparent—but at the framing stage of governance regimes. Given path dependency (Cox in this volume), it is difficult to dislodge regimes once they have been entrenched and fortified by legal protections.

The leading property rights theories in economics have been motivated by a search for internalizing the costs of externalities. For Demsetz (1966) and many others, private property rights were the answer to this problem. Demsetz saw very clearly that private owners would seek to externalize the effects of their actions. However, he suggested that this secondary effect could be managed through owners—who would be less numerous and therefore face fewer collective-transaction costs—bargaining with one another. The problem he did not address is what would happen to those excluded from resources now controlled by the new owners should their survival depend upon it. This is the problem we have posed for the present volume.

We did not expect to find a silver bullet solution, and we clearly did not. However, we hope that by reframing the issue and offering evidence from around the world on the operation of different property regimes and arrangements developed to cope with increasing scarcity of water and arable land, we set the stage for new kind of debate: one that takes seriously the externalities created by any governance regime and seeks to find solutions that internalize them based on widely shared normative principles.

Notes

(1.) Thus, in societies where subsistence farmers have no alternative but agricultural production to make a living, land can be considered an essential resource. This would not be the case in societies where people can readily earn their living as wage labor.

(2.) See UN Resolution 64/292 on “The Human Right to Water and Sanitation,” 28 July 2010.

(3.) The ILO proposed the following definition of basic needs in 1982: “First, certain minimum requirements of a family for private consumption: adequate food, shelter and clothing, as well as certain household equipment and furniture. Second, they include essential services provided by and for the community at large, such as safe drinking water, sanitation, public transport and health, educational and cultural facilities” (ILO 1982, 1). These “basic needs” in turn have influenced the definition of the “essential content” of the social rights recognized in the International Covenant on Economic, Social and Cultural Rights, including housing, food, and essential medicines (De Schutter 2013).

(p.40) (4.) See American Geophysical Union (2014).

(5.) The European Union with its guarantee of free movement of persons is a rare exception; but even there the principle is coming under increasing political pressure.

(6.) See Inter-American Court of Human Rights, case of the Sawhoyamaxa Indigenous Community v. Paraguay (judgment of 29 March 2006, Series C, No. 146).

(7.) Sen himself was initially reluctant to identify such “basic capabilities,” in particular because different societies might value capabilities differently and because the “basic needs” of one society may not correspond to the “basic needs” of another (see Alkire 2002).

(8.) This was recently acknowledged by the outcome document of the Rio+20 UN Conference on Sustainable Development, where the world leaders noted “the important work and inclusive nature of the Committee on World Food Security” (United Nations 2012, para. 115).

(9.) Note that this approach is in tension with classical philosophers who are often referred to to justify this position. For a critique of the association of John Locke with neoclassical approaches to property, see Waldron (2012); for a restatement of Adam Smith’s conception of individuals and markets in light of his broader conception of justice and metaphysics, see Herzog (2013).

(10.) Note that according to Schlager and Blomquist, heterogeneous groups can engage in collective governance if there is substantial jointness in the production of governance outcomes and capturability is minimized. See Schlager and Blomquist (1998).

(11.) In her work on common-pool resources, Elinor Ostrom questioned the rationality assumption, but she did remain wedded to a certain extent to the idea that the physical nature of the good (including a common-pool resource such as a fishery) should be the departure point to determine how the good should be governed: Instead, we are concerned with the alignment between the nature of the needs the good should serve to meet and the norms governing how the good is managed and allocated.

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Notes:

(1.) Thus, in societies where subsistence farmers have no alternative but agricultural production to make a living, land can be considered an essential resource. This would not be the case in societies where people can readily earn their living as wage labor.

(2.) See UN Resolution 64/292 on “The Human Right to Water and Sanitation,” 28 July 2010.

(3.) The ILO proposed the following definition of basic needs in 1982: “First, certain minimum requirements of a family for private consumption: adequate food, shelter and clothing, as well as certain household equipment and furniture. Second, they include essential services provided by and for the community at large, such as safe drinking water, sanitation, public transport and health, educational and cultural facilities” (ILO 1982, 1). These “basic needs” in turn have influenced the definition of the “essential content” of the social rights recognized in the International Covenant on Economic, Social and Cultural Rights, including housing, food, and essential medicines (De Schutter 2013).

(5.) The European Union with its guarantee of free movement of persons is a rare exception; but even there the principle is coming under increasing political pressure.

(6.) See Inter-American Court of Human Rights, case of the Sawhoyamaxa Indigenous Community v. Paraguay (judgment of 29 March 2006, Series C, No. 146).

(7.) Sen himself was initially reluctant to identify such “basic capabilities,” in particular because different societies might value capabilities differently and because the “basic needs” of one society may not correspond to the “basic needs” of another (see Alkire 2002).

(8.) This was recently acknowledged by the outcome document of the Rio+20 UN Conference on Sustainable Development, where the world leaders noted “the important work and inclusive nature of the Committee on World Food Security” (United Nations 2012, para. 115).

(9.) Note that this approach is in tension with classical philosophers who are often referred to to justify this position. For a critique of the association of John Locke with neoclassical approaches to property, see Waldron (2012); for a restatement of Adam Smith’s conception of individuals and markets in light of his broader conception of justice and metaphysics, see Herzog (2013).

(10.) Note that according to Schlager and Blomquist, heterogeneous groups can engage in collective governance if there is substantial jointness in the production of governance outcomes and capturability is minimized. See Schlager and Blomquist (1998).

(11.) In her work on common-pool resources, Elinor Ostrom questioned the rationality assumption, but she did remain wedded to a certain extent to the idea that the physical nature of the good (including a common-pool resource such as a fishery) should be the departure point to determine how the good should be governed: Instead, we are concerned with the alignment between the nature of the needs the good should serve to meet and the norms governing how the good is managed and allocated.