Commons, Evolution and Multilevel Selection Theory

evolution-1Recently, the Journal of Economic Behavior & Organization released a special issue (download for free, for a limited time). Today, I want to focus on one particular article – “Generalizing the core design principles for the efficacy of groups” – Wilson, Ostrom and Cox (2013) – found here. This is a great article that takes the common pool design rules (Ostrom, 1990) and generalises them into an evolutionary framework. This generalisation is possible because the design principles flow not just from political theory, but from “the evolutionary dynamics of cooperation in all species and the biocultural evolution of our own species” (p30). Attempting to generalise these principles in an evolutionary context is important – if possible, they may gain applicability wherever human groups must cooperate to achieve shared goals (isn’t that almost everything)?

Firstly, here’s a small summary of the evolution of commons literature.

Hardin’s (1968) paper is the obvious starting point for any discussion of the the commons. See my post on this paper here.  His work, in the time when the Adam Smith ‘invisible hand’ was widespread, coined the ‘tragedy of the commons‘. Simply, the tragedy of the commons suggested that due to unwavering self-interest, common pool resources suffer a tragedy of depletion through over use. This stems from the attributes of rivalry and non-excludability. At the time, the only solutions to this social dilemma were seen as privatization (enforcing private property rights) or top-down restrictive regulation. Thankfully, these days, we know there are other options.

Ostrom’s (1990) book, revolutionised the way we view common pool resources. Governing the Commons: The Evolution of Institutions for Collective Action, won Ostrom the 2009 Nobel Prize. The book was a life-long collection of Ostrom’s observations of commons – proposing that sometimes the commons do not suffer in tragedy. When certain conditions are met, institutions of collective action are solving this social dilemma across the world.

Eight design principles were proposed: (1) Clearly defined boundaries. (2) Congruence between appropriation and provision rules and local conditions. (3) Collective-choice arrangements. (4) Monitoring. (5) Graduated sanctions. (6) Conflict resolution mechanisms. (7) Minimal recognition of rights to organise. (8) Nested enterprises. See Ostrom (1990, p 90). Also see Cox et al. (2010) for a more further empirical validity and an extended discussion.

Importantly, these design principles, while not fully developed, lean towards the possibility of  collective action solutions to social dilemmas. Ostrom introduced the importance of institutional governance of common pool resources.

The paper we’re talking about today, takes these rules on step further- continuing the research line, generalising the principles in two distinct ways: (1) the principles follow with the evolutionary dynamics of cooperation in all species, and (2) because of the theoretical generality, these principles have  wider range of application than CPR groups. That is, any situation where “people must cooperate and coordinate to achieve shared goals.”

Wilson et al. (2013) discuss commons from an evolutionary perspective (including game theory). For a starting point, make sure you read about Cultural Selection Theory. While game theory began with decisions framed by self-interested rational actors, it is now often framed as “a Darwinian process in which alternative strategies compete against each other and the most successful strategies increase in frequency in the population.” (p23). Further, any mechanism that causes the more successful strategies to become more frequent through time, relates to evolutionary theory.

The authors propose that multilevel selection theory (MLS) is a useful framework for studying the commons situation in general terms. In the world of MLS, there are evolving populations of individuals, who form into groups in which social interactions occur. Within each group, the process of natural selection “favors the strategies that maximise the fitness of the individuals, relative to other members of the same group.” (p23). That is, if everyone within a group increases equally in fitness, this is neutral to those within the group from the perspective of within-group selection (if these is no cost to the original provider). If group fitness is considered a public good, then if there is a cost to the individual, he is at a relative disadvantage, no matter the gain. And, generally, there is a cost.

Therefore, if we take a strategy that is for the good of the group, yet has no relative individual fitness gain, can it survive? Yes, it can, but we must add a second level to the process. This second level is that the group as a whole will do better, relative to other groups. Importantly, these groups of public good providers (even if less fit than free-riders in other groups), will survive and reproduce more successfully. Note, this doesn’t just apply to survival, it can be equally applied to any function that is trying to be optimised – say profit or number of kills in a hunt.

Therefore, we have multilevel selection – both within-group and between-group. What matters, then, is the relative strength of each level of selection. If one level prevails, we may find a homogeneous population of public good providers, or free-riders. Yet, in reality, we have a mix of types in the total population. The balance between levels of selection can be influenced by a large number of factors. If, then, we can understand some of the factors that cause between-group selection to trump within-group selection, we have a set of design principles for collective action, and governance of the commons.

From MLS theory, we can return to the core design principles first introduced by Ostrom, and view them from an evolutionary perspective. I won’t delve deeply into the design principles here, yet they can be found on page 25 and 26 of the paper.

Overall, these design principles have a combined effect – it makes it very hard for some members to benefit at the expense of others. Therefore, the attention of individuals should theoretically move towards succeeding as a group, rather than an individual.

There is a “striking correspondence between the principles derived by Ostrom for CPR groups and the conditions that caused us to evolve into such a cooperative species in the first place.” It should also be noted that some factors will lead to these design principles being unnecessary (for example, close relatives – see Kin Selection Theory).

It is important to note that the principles are general in nature, and therefore successful cooperation and achievement of objectives of a group requires further principles. These secondary principles must more closely fit the desired goal. But we still need a significant level of generality in the rules. That is, MLS is the general case of cooperation and group interaction, while Ostrom is a more specialised subset. We have learnt this from the hard work that Ostrom completed over the course of several decades. And, we can learn further still.

The paper goes on to describe how we can apply these to two different situations: education and urban neighborhoods  I won’t touch on this here.

Second to this, it is important to see what we can learn (the possibilities). While a glance over the design principles may seem like an obvious list of human behaviours (and, they are, they’ve been evolving for thousands of year) … the fact is, some groups have not adopted these simple rules, and have failed as a result.

I’ll leave you with the final words of the paper:

“We look forward to the day when governance consists of optimizing and coordinating among many spheres of activity from a sophisticated evolutionary perspective”

Me too.

The Tragedy of the Commons – Hardin (1968)

Few scholarly discussions of commons begin without first recognising The Tragedy of the Commons – Garrett Hardin (1968).

Unfortunately, the piece is often cited as holding the wrong solutions to our social dilemmas. In reality, it was revolutionary and groundbreaking. It is one of the most cited and influential works in all of the social sciences. While there are a number of widespread criticisms, the work began a research agenda that still continues today. Here, I will explain why so many important research arms can be traced back to a short six page article. And, although Hardin did not establish design rules as in Ostrom (1990), he eluded to many of them.

Firstly, it is important to note that Hardin lived in a world where the dominant views were Adam Smith: “But he (Adam Smith) contributed to a dominant tendency of thought that has ever since interfered with positive action based on rational analysis, namely, the tendency to assume that decisions reached individually will, in fact, be the best decisions for an entire society.” (p1244). While Hardin eventually derived conclusions from Smithian-rational individuals, he was also one of the first to question the assumption. Questioning this assumption would bring various new areas of economics, including behavioral economics.

Hardin, a biologist, famously told a story of an open pasture. This commons, where herdsmen could appropriate from the pasture as they please, faced a social dilemma (Hardin referred to these as “no technical solution problems”, p1243). Naturally, from the assumption of “each and every rational herdsman sharing a commons” Hardin came to a conclusion: “Ruin is the destination to which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.” (p1244).

Hardin suggested two prescriptions to this tragedy of the commons, privatisation or public regulation: “What shall we do? We have several options. We might sell them off as private property. We might keep them as public property, but allocate the right to enter them.” (p1245). These still remain dominant reactions to common pool resources.

“The laws of our society follow the pattern of ancient ethics, and therefore are poorly suited to governing a complex, crowded, changeable world” (p1245). This indicates Hardin’s understanding of the importance of local knowledge (Hayek, 1945), as well as the fact the world is undeniably complex and changing (a welcome relief from neoclassical beliefs). This is Ostrom (1990) design principle 2 (congruence between appropriation and provision rules and local conditions). 

“The great challenge facing us now is to invent the corrective feedbacks that are needed to keep custodians honest” (p1246). This is both the need for governance, and the more recent mechanism design. This is Ostrom (1990) design principle 4 (monitoring) and design principle 5 (graduated sanctions). 

“The only kind of coercion I recommend is mutual coercion, mutually agreed upon by the majority of the people affected” (p1247). This is Ostrom (1990) design principle 3 (collective-choice arrangements  where most individuals affected by the operational rules can participate in modifying the operational rules).