Institutions
are central within the
social science of natural resources
management. Institutions are,
in this context, defined as the
norms and rules governing human
interactions. They can be formal
such as rules and laws, but also
informal (unwritten) such as
norms and conventions of society.
Institutions set transaction costs
for human actions and govern resource use by controlling
access to and extraction of natural resources. By establishing
defined courses of action, institutions minimise uncertainty
and risk when actors exchange. For complex exchange
problems, however, institutions can never be fully free of
incompatible incentives. This can create the temptation to
cheat. In the case of natural resources, institutions often fail
to take the externalities of exploitation into account, which
results in transaction costs that benefit the extractor but with
environmental and social costs that are paid by no one and
suffered by all.
Existing knowledge will influence the development of institutions and, at the same time, institutions steer the development of knowledge. This partly explains the variety of institutional approaches to similar problems.
Today a growing number of interdisciplinary environmental scientists emphasise institutions that deal with property rights and so-called common property resources, that is, institutions controlling access to a natural resource and how it can be used. There are four categories of property, though there is overlap between them: state-owned, private property, common property (group ownership) and open access (no rules). Common property (or common pool) resources, such as fisheries, have long been subject to overexploitation and misuse due to lack of institutions or their implementation (a situation called the tragedy of the commons). In recent years many scholars have, instead of promoting either centralised governmental regulation or privatisation, suggested the design of institutions that are organised and governed by the resource users themselves as a way to resolve the problem of the commons.
/Miriam Huitric
More at:
North D, 1990: Institutions, institutional change and economic preferences. Cambridge University Press.
Ostrom E, 1990: Governing the commons. The evolution of institutions for collective action. Cambridge University Press.
Institutional Dimensions of Global Environmental Change. IHDP Report No. 9:
http://www.ihdp.uni-bonn.de/html/publications/ reports/report09/index.htm