Economics for Collaborative Environmental Management: Renegotiating the Commons

Marshall, G. (2005). Economics for collaborative environmental management: Renegotiating the commons. London: Earthscan. ISBN 184407-095-6 pp. X + 171 RRP £22.95 paperback.With sustainable development as its underlying theme, this book seeks to outline how economics might help to deliver the participative and collaborative approach to environmental management that such development requires, and which governments increasingly foster. Although the literature on voluntary collective action is extensive, it has generally been broad, and does not explore theory originating in different disciplines. This applies particularly to the economic literature; it rarely links concepts, such as game theory, bounded rationality, trust, complex adaptive systems, and environmental management of the commons, to form the basis of an economic theory that would underpin collective action on environmental management.Marshall establishes that the decentralised approach to environmental management is poorly explained from the perspective of mainstream economics, and that the development of a foundation of economic theory andmethod is needed to contribute to the analysis of policy options to realise the potential of collaborative visions for environmental management.Marshall's argument for the need for the economic theory, the contents of the theory, and case studies illustrating the theory, are logical and organised. in his first two chapters, his brief but concise outline of the development of economic thought, with the focus on game theory, shows what has led to traditional economics being poorly equipped to explain collaboration with regard to management of the commons, and shows why the development of important alternatives has fallen short; partly to blame is the inability of economic theory to expand its views outside its own discipline. Marshall's effortless integration of terms from sociology, psychology and economics makes the early chapters a pleasure to read. Chapter 3 even incorporates the biological basis for cooperation and trust, a central theme in later chapters, particularly Chapter 7, which contains a detailed Australian case study.Central to the first few chapters is the concept of the 'progressive vision1 - as opposed to the 'collaborative vision'. Focusing on voluntary collaboration and the important role of trust to the collaborative vision, Chapter 3 presents a review of the developments in theory that correct the weaknesses of economic theory. Its second part addresses large group cooperation and how this is affected by organisational 'nesting', encouraged by trust and reciprocity. As Marshall mentions in his outline of Chapter 4, 'a key implication is that the capacity of collaborative systems of environmental management to solve complex problems can be expected to grow the more that they are given scope to develop as nested types' (p. 5).The remainder of Chapter 4 develops a cost effectiveness framework to analyse the institutional choices that allows for multi-layered organisational systems. The importance of using principles of adaptive management and inductive analysis to capture complexity quickly emerges. What also emerges is the need to replace the restrictive Paretian approach by the political economy approach, the latter being able to engage credibly with the complexity of institutional choices.In the context of this cost effectiveness framework, some interesting issues are flagged, such as why allocating property rights may not always provide a desired outcome. Marshall draws on Challen (2000) to stress that costs are relatively low to allocate property rights down the institutional hierarchy (to the landowner), but the political costs are high to transfer them back up, leading into the discussion of Institutional 'lock-in costs'. The concept of path dependency reducing institutional adaptability is of crucial Importance. …