What have we learned about solving coordination problems in environmental contexts?

This prompt is meant to help guide your discussion. The topic is “solving coordination problems to equitably and efficiently manage environmental resources and quality”.

For your discussions, you’re to draw on anything/everything we’ve covered in this class so far (and things you may know from outside this class), albeit with special emphasis on the readings by Hayek and Ostrom (and a bit of Jonathan Adler). Below are some questions and quotes which may help frame your discussion. After about 30-40 minutes of discussion in small groups we’ll come back to the main room and discuss as a class.

Some questions to guide your discussions

  1. Reflecting on Ostrom and Hayek
    1. How does Hayek view coordination problems? What, if any, is his preferred approach to solving coordination problems?
    2. How does Ostrom view coordination problems? What, if any, is her preferred approach to solving coordination problems?
    3. How does market failure (or the existence of externalities broadly) enter or modify Hayek’s arguments? What about Ostrom’s arguments?
  2. Reflecting on “Conservation Cartels”
    1. Imagine Adler met Ostrom and Hayek and delivered the main argument in his article. How do you think Ostrom and Hayek would respond?
  3. Given the work we’ve done in this class and your discussion so far, what do you see as the appropriate domain(s) of markets as coordination mechanisms?
    1. For domains where you think markets aren’t appropriate: why not? How would excluding markets from those domains affect resource allocations? What do you think are the appropriate coordination mechanisms for these domains?
    2. For domains where you think markets are appropriate: why? How would using other mechanisms here (e.g., civil society, politics, community discussions) affect resource allocations?
  4. How can the coordination mechanisms you’ve discussed be used to promote equitable and efficient environmental policies? What are the potential payoffs and potholes to using those mechanisms? (You may want to reflect on Prof Ma’s talk here.)

Some quotes to reflect on (or not)

Pigou on the role of governments:

It is the clear duty of Government, which is the trustee for unborn generations as well as for its present citizens, to watch over, and if need be … defend, the exhaustible natural resources of the country from rash and reckless spoliation. How far it should itself … press resources into undertakings from which the business community, if left to itself, would hold aloof, is a more difficult problem. Plainly, if we assume adequate competence on the part of governments, there is a valid case for some artificial encouragement to investment, particularly to investments the return from which will only begin to appear after … many years

Hardin on incentives and ruin:

Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons.

Ostrom on Hardin’s grim determinism:

Unfortunately, many analysts—in academia, special-interest groups, governments, and the press—still presume that common-pool problems are all dilemmas in which the participants themselves cannot avoid producing suboptimal results, and in some cases disastrous results.

Simon on organizations:

Suppose that [“a mythical visitor from Mars”] approaches the Earth from space, equipped with a telescope that reveals social structures. The firms reveal themselves, say, as solid green areas with faint interior contours marking out divisions and departments. Market transactions show as red lines connecting firms, forming a network in the spaces between them. Within firms (and perhaps even between them) the approaching visitor also sees pale blue lines, the lines of authority connecting bosses with various levels of workers. As our visitors looked more carefully at the scene beneath, it might see one of the green masses divide, as a firm divested itself of one of its divisions. Or it might see one green object gobble up another. … No matter whether our visitor approached the United States or the Soviet Union, urban China or the European Community, the greater part of the space below it would be within green areas, for almost all of the inhabitants would be employees, hence inside the firm boundaries. Organizations would be the dominant feature of the landscape. A message sent back home, describing the scene, would speak of “large green areas interconnected by red lines.” It would not likely speak of “a network of red lines connecting green spots.”

Pritchett on poverty and growth:

Broad-based growth, defined as the process that raises median income, is far and away the most important source of poverty reduction. There is no instance of a country achieving a headcount poverty rate below 1/3 of its population (at moderate poverty line of $5.50) without achieving the median consumption of that of Mexico. … [L]arge and sustained improvements in global poverty will almost certainly have to focus on … national income growth.