Policy Concepts in 1000 Words: the Institutional Analysis and Development Framework (IAD) and Governing the Commons

The IAD provides a language, and way of thinking, about the ways in which different institutions foster collective action. The language is so complicated that I have cheated by summarising key terms in this box (and describing polycentric governance in a different post) to stay within the 1000 words limit:

Governing the Commons

For me, the best way to understand the IAD is through the lens of Governing the Commons (and the research agenda it inspired), which explains how to rethink ‘tragedies of the commons’ and encourage better management of common pool resources (CPRs).

Ostrom rejects the uncritical use of rational choice games to conclude – too quickly – that disastrous collective action problems are inevitable unless we ‘privatize’ commons or secure major government intervention (which is tricky anyway when global problems require international cooperation). The tragedy of the commons presents a too-bleak view of humanity, in which it would be surprising to find cooperation even when the fate of the world is in human hands.

Alternatively, what if there is evidence that people often work collectively and effectively without major coercion? People are social beings who share information, build trust by becoming known as reliable and predictable, and come together to produce, monitor and enforce rules for the group’s benefit. They produce agreements with each other that could be enforced if necessary.

The IAD helps us analyse these cooperative arrangements. Ostrom describes 8 ‘design principles’ of enduring and effective CPR management shared by many real world examples:

1. CPRs have clear boundaries. Users know what they are managing, and can identify legitimate users.
2. The rules suit local conditions. Users know what they (a) are expected to contribute to management and (b) receive from CPRs.
3. The actors affected by the rules help shape them (at low cost).
4. CPR monitors are users or accountable to users. They monitor (a) the conduct of users and (b) the state of the CPR. The costs of mutual monitoring are low, and their consequences felt quickly.
5. The penalties for rule-breaking are low if the choice is a one-off and understandable under the circumstances (to avoid alienating the user). The penalties are high if the choice is part of a pattern which makes other users feel like ‘suckers’, or if rule-breaking would be catastrophic.
6. Conflict resolution is frequent, rapid and low cost.
7. Users have the right to self-organise without too much outside interference.
8. Many projects are connected geographically and at different scales – local, regional, national – in ways that do not undermine individual projects.

These design principles help explain why some communities manage CPRs successfully. They allow users to share the same commitment and expect the long-term benefits to be worthwhile.

However, Ostrom stressed that there is no blueprint – no hard and fast rules – to CPR management. There are three particular complications:

1. Trust

Good management requires high trust to encourage norms of reciprocity. Trust is crucial to minimizing the costs of compliance monitoring and enforcement. Trust may develop when participants communicate regularly, share an understanding of their common interests, reciprocate each other’s cooperation, and have proven reliable in the past.

Design principles are important to developing trust and solidarity, but so are ‘evolutionary’ changes to behaviour. Actors have often learned about rule efficacy – to encourage cooperation and punish opportunism – through trial-and-error over a long period, beginning with simple, low-cost operational rules producing quick wins.

2. Rules, rules on rules, more rules, then even more rules

Institutions contain a large, complicated set of rules that serve many different purposes, and need to be understood and analysed in different ways.

Different purposes include:

• how many actors are part of an action situation, and the role they play
• what they must/ must not do
• who is eligible to participate
• who can move from one role to another
• who controls membership, and how
• how many participants are involved in a choice
• what will happen if there is no agreement
• how to manage and communicate information
• the rewards or sanctions
• the range of acceptable actions or outcomes from action.

 

We also need to analyse the relative costs and simplicity of different rules, and the rules about the other rules, including

• ‘operational’ rules on day-to-day issues (such as specific payoffs/ sanctions for behaviour)
• ‘collective choice’ rules about how to make those rules
• ‘constitutional’ rules on who can decide those rules and who can monitor and enforce, and
• ‘metaconstitutional’ analysis of how to design these constitutions with reference to the wider political and social context.

 

3. The world is too complex to break down into simple pieces

By now, you may be thinking that the IAD – and analysis of resource management – is complicated. This is true, partly because each case study – of the physical conditions and social practices regarding resource management – is different in some way. We can use the IAD to compare experiences, but accept that a profoundly successful scheme in one context may fail miserably in another.

Simplicity versus complexity: the world is complex, but should our analysis follow suit?

Indeed, this is why we need to think about rational choice games and the IAD simultaneously, to understand the analytical trade-offs.

Game theory laboratory experiments – built on simple rules and relatively small numbers of parameters – produce parsimonious analysis and results that we can understand relatively easily.

We may reject simple games as unrealistic, but what if we take this criticism to its extreme?

IAD in-depth field studies embrace complexity to try to understand the key dimensions of each study’s context. When we put them all together, there are too many concepts, variables, global applications, and variations-by-context, to contain in a simple theory.

The IAD addresses this trade off by offering a language to help organize research, encouraging people to learn it then use it to apply many different theories to explain different parts of the whole picture.

In other words, it is OK to reject simple models as unrealistic, but to embrace real-world complexity may require a rather complicated language.

See also:

Policy Concepts in 1000 Words: it’s time for some game theory

Policy Concepts in 1000 Words: Rational Choice and the IAD (the older post for the 1^st edition)

Policy Concepts in 100 Words: Multi-centric Policymaking

Policy in 500 Words: the Social-Ecological Systems Framework

Policy in 500 Words: Ecology of Games

How to Navigate Complex Policy Designs

How can governments better collaborate to address complex problems?