Inequality, Cooperation and Environmental Sustainability.

Gardner, Roy

Inequality, Cooperation and Environmental Sustainability

Jean-Marie Baland, Pranab Bardhan and Samuel Bowles (eds)

Princeton University Press: Princeton, NJ, 2007.357pp, $35, ISBN:0.91-12879-0.

One of the greatest challenges facing contemporary mankind is sustaining the global commons. This includes fisheries, the atmosphere, the polar icecaps, forests--all the natural resources that sustain our species on the planet. The record in this regard is far from impressive, as the popular rubric 'tragedy of the commons' suggests. This important volume probes deeper into the tragedy of the commons, and with a combination of theory, experiment, and field studies, finds some non-tragic outcomes and scope for optimism, however guarded.

This volume is the result of over a decade of sustained effort, led by the three editors, of economists, political scientists, sociologists, demographers, informaticians, and policy analysts--all fields heavily invested in research on environmental sustainability. A special theme in much of the volume is the effect of inequality on environmental sustainability. The first three chapters very nicely lay out some simple but useful theoretical models. In the symmetric versions of these models, one easily shows that Nash Equilibrium is not an Optimum. This is the strategic basis for expecting suboptimal outcomes in a commons. Once one adds asymmetry among the players, the resulting Nash multiple equilibria may be more or less suboptimal. So from a theoretical standpoint, the relationship between inequality and sustainability is not only subtle, but it can go either way. Hence, the need for empirical work.

Marco Janssen and Elinor Ostrom construct an agent-based model (ABM) of strategic interaction on a commons, involving bounded rationality, neighbourhood effects, and the emergence of trust. Under a wide variety (but not all) of treatments, ABM converges to reasonably good outcomes. The authors link these computational results to a large body of experiments and field studies, pointing to a general theme. The emergence of trust can play a crucial role in sustainability. This chapter also provides the best survey of the literature in the entire volume.

Later chapters deal with specific commons around the world, where asymmetries play a crucial role in outcomes. The variety of commons and locations here is both impressive and broad: water in Mexico and India, Northwest Pacific salmon, fisheries in Senegal, forests in Columbia, Northern India, and Nepal. Here is an illustration. Sara Singleton studies salmon of the Northwest Pacific. Here multiple asymmetries arise: agriculture versus fishing, since both the salmon and irrigated agriculture demand the same water; native Americans versus non-natives; USA versus Canada. She focuses on the native Americans versus non-natives. Given that the native American fishery has been sustainable, despite the asymmetries within the fishing tribes, the presence of non-natives has led to a fishery under severe pressure and of questionable sustainability.

In one of the last chapters Bina Agarwal looks at the role of female/male asymmetry in environmental sustainability. Her results, especially from Gujarat firewood collection, are quite suggestive. Finally, James Boyce provides a useful analysis of environmental institutions, such as the Environmental Protection Act, in the sustainability question. His critique of the environmental Kuznets curve alone is worth the price of the book.

Anyone teaching environmental economics and policy, or researching same, or wondering if we will sustain the world that has been given to us, should read this book and learn its lessons.

doi:10.1057/ces.2007.41

Roy Gardner

Indiana University, Bloomington, IN, USA.

E-mail: [email protected]