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institutionalists 4 , and on an analysis of various CPR regimes 5 . Their work has been
collectively referred to as “CPR Theory” (Steins, Edwards & Rölling, 2000). This
approach stems from the works of Ostrom, of which the most representative is
Ostrom (1990). In this chapter, we will summarise the basic tenets of CPR theory
based upon Ostrom (1983, 1985a, 1985b, 1990).
Ostrom argues that there are two reasons why the game theoretic approach is
inadequate to explain the evolution and sustainability of CPR institutions. Firstly,
game theory assumes a single level of choice – the level of appropriation from the
stock of resource. However, actual resource users face different sets of choices –
whether to over-exploit the resource, whether to monitor others, etc. This adds to the
complexity of the game. The structure of the game, and its equilibrium, becomes
contingent upon the values of parameters. These parameters are the size of the
resource community, the costs of monitoring, the benefits from stealing, the
punishment received on being detected while stealing, the rewards for detecting an
offender, etc. No single equilibrium solution, therefore, is possible.
Secondly, appropriators must shift between arenas and levels of analysis. Ostrom
distinguishes between three levels of analysis – operational level, collective choice
level, and constitutional choice level. At the operational level, the resource
community interacts with the physical environment given certain rules and physical
and technological constraints. This interaction takes the form of resource
appropriation and provision, production, exchange, etc. At the collective choice level,
the resource community considers the options available to change the institutional,
physical and technological constraints. This level is concerned with the formation of
rules. At the third level, the concern is with metarules - the process of changing
rules, or “rules for making rules” 6 .
Ostrom, therefore, suggests the integration of game theory with institutionalist theory
for a complete explanation of the emergence of CPR institutions. Such a theory must
explain three things – Why do resource users commit themselves to conforming to
4 For discussions of the IAD Framework, see V. Ostrom (1988), V. Ostrom, D. Feeny & H. Picht ed. (1989), and
E. Ostrom, in E.T. Loehman & D.M. Kilgour ed. (1998).
5 While most of theoretical works on CPR have used a game theoretic structure, Chopra et al (1990) have used
cluster analysis to analyse the conditions leading to the emergence of co-operation in Sukhomajri, Haryana.
6 Ostrom (1986), p. 19.
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