State Regulation of Open-Access, Common-Pool Resources

I explore the origins and impact of state regulation of the common pool (open access), one of societies’ most challenging problems. Where resource values are low, group size is small, and users are homogeneous in cost and objectives, informal common-property solutions are feasible. Where these conditions are not met, state intervention can formally recognize and enforce group restrictions, recognize private property rights and exchange, or impose regulatory restrictions on access, inputs, and/or output. Government intervention is the outcome of interaction among self-interested lobby groups, politicians, and bureaucratic officials. Where the user lobby is influential and similar in resource goals, politicians and agencies respond with straightforward group or individual economic property rights. Where the lobby has heterogeneous objectives and fragmented influence, politicians and bureaucratic officials have more latitude in devising regulatory responses. The resulting property rights regimes and/or regulations incompletely address economic rent dissipation. Even so, these second-best arrangements are improvements over pure open access.