In typical researcher fashion, I give you the concept first, allow you to mull over it independently, think about why it could be useful in a policy area you care about, and present you with my application of it only in a later blog post! As always though, my focus is on the following question:
How can one achieve the dual, often conflicting goals of economic efficiency and socioeconomic equity? That is, assuming equitable economic development to be a goal most of us desire...
Here are two really good, easy to read, and relatively recent articles by Elinor Ostrom and colleagues that clearly explain the principles of polycentricity and how usefully they can be applied to some of our most pressing global policy problems - climate change and biodiversity loss. Both articles are essentially dealing with natural resource management and sustainable development.
Andersson, K.P., Ostrom, E. 2008. Analyzing decentralized resource regimes from a polycentric perspective. Policy Sci., 41:71 – 93
Brondizio, E.S., Ostrom, E., Young, O. 2009. Connectivity and the governance of multi-level social-ecological systems: The role of social capital. Annu. Rev. Environ. Resour., 34: 253 – 278
A polycentric governance system can be defined as one where “citizens are able to organize not just one but multiple governing authorities at differing scales” (Ostrom, 2005, p. 283). In this conception, the different governance authorities are connected to each other either because they share actors or because they have overlapping jurisdictions. Yet each of these authorities is envisaged as having a distinct role to play and using a distinct set of rules that applies specifically to the issue it is governing. Further, these different units of governance may be specific or general in their focus.
For example a community organisation operating solely to manage local natural resources would be specific in its focus, but matters pertaining to conflict resolution or socially equitable distribution of benefits from such management could be handled by more generalist judicial courts that would operate outside this community organisation’s area of authority and could mandate it to follow its decisions in a prescribed context. Continuing with the same example, a third set of institutions could be visualised. These would be charged with the task of handling communication between the separate communities independently managing their local resources. Their goals would include facilitating the spread of innovative solutions to common problems, speeding up the response rate to dynamic resources conditions, and spotting large scale patterns of resource use and management that could prevent recurring management failures (Ostrom, 2005, p. 283-284). Given the inter-community scale of operations, this information and communication based authority would function at a scale above the single community and perhaps even at the regional scale.
The importance of having independent but interconnected governance units such as those described above is that complementary tasks related to the same policy issue area can be delegated to the scale or type of authority most suited to carrying it out. In a fully decentralized system for example, one community could engage in successful collective action but create negative externalities for a neighbouring community in doing so. Unless there were some mediating authority that were able to coordinate inter-community activities and solve disputes, granting unchecked autonomy to individual communities would lead to an utterly inefficient and chaotic situation.
Yet the lack of such a multi-tiered governance system can lead to adverse consequences even when efficiency is achieved and no negative externalities occur at the aggregate community level. Take the case of a village that is successful at ecologically sustainable management of a forest. Such a village is likely to be economically better off at the aggregate level since its forest now yields a sizeable benefit stream that is sustained over time. When examined at the within-village scale however, it may turn out that all of these successful outcomes are being achieved at the cost of equitable distribution of benefits from forest management, and that the poorer villagers are neither benefiting from the system nor able to pay the high price of exiting the village network to find gainful employment elsewhere. This is not just a hypothetical case; real examples of this situation abound in the empirical literature across social science disciplines.
These cases raise a specific question with regard to concerns of equity and equitable economic development. That question is, how does one preserve the advantages of a decentralized, community-based system of governance while also addressing the fact that left to themselves, communities may choose institutional solutions that are economically efficient but socially inequitable (or inefficient)?
Individual actors or collective institutional units involved in policy related governance are not simply nested within governance related institutional arrangements but also within a set of social institutional arrangements. This means that actors within any governance unit will be following a complex set of rules that stem from both institutional arrangements.
For example, an individual may live within a village community – an institutional ‘unit’ from a governance point of view – and participate in its forestry activities according to rules that maximise ecological sustainability and economic efficiency. The share of economic benefits that the individual receives however might be determined on the basis of the individual’s inclusion in certain social networks conditional upon his social attributes and upon the social attributes of the other individuals in the village.
These social networks are an institutional ‘unit just like the village community, but operate at a different (and larger) scale than the village.
The difference is that they are not spatially confined by the boundaries of the village and might represent region- or nationwide social hierarchies.There can be many other economic consequences for this individual on the basis of inclusion in these two communities – within village, and larger social network. For example, the exit options available to the individual might be determined by the overall resources provided by membership in this social network. If these exit options are limited, then the individual can be coerced into participating in the village community’s activities even without being favoured by its traditional institutions. Thus the net benefits (after factoring in foregone opportunity costs and so on) received by this individual residing within the village are determined by membership in groups that play different roles and operate at different scales.
This overlap of effects and actors between (1) the village community and (2) the caste-based social network, is obviously complicated from the point of view of development: which set and scale of institutions should a policymaker target in order to improve the economic welfare of this individual?
- The reason a polycentric approach is helpful is that it allows for governance that matches the complexity of existing institutional arrangements - social, political and economic.
- It is true that creating a complex system will be costly.
- However, its costs must be weighed against the costs of a more parsimonious governance system that may have lower initial costs but that may also create higher long term costs if it is unable to deal with the complexity of the issues it is trying to address.
Ostrom, E. 2005. Understanding Institutional Diversity. Princeton University Press.