Collective governance of common-pool resources - Revision history

Avinash Kumar at 11:15, 7 June 2016

2016-06-07T11:15:00Z

Avinash Kumar at 10:13, 7 June 2016

2016-06-07T10:13:55Z

Irena Irmler at 14:04, 13 January 2014

2014-01-13T14:04:53Z

Matthias Berthold at 11:57, 23 December 2013

2013-12-23T11:57:14Z

Matthias Berthold at 11:48, 23 December 2013

2013-12-23T11:48:42Z

Matthias Berthold at 11:45, 23 December 2013

2013-12-23T11:45:43Z

Matthias Berthold at 11:43, 23 December 2013

2013-12-23T11:43:43Z

Matthias Berthold at 11:41, 23 December 2013

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Matthias Berthold at 11:14, 23 December 2013

2013-12-23T11:14:18Z

← Older revision		Revision as of 11:15, 7 June 2016
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	[[Category:Resource_Management]]		[[Category:Resource_Management]]
		+	[[Category:Economics_of_SLM]]

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 One important result of Elinor Ostroms work is the development of eight so called design principles which are illustrated by long-enduring CPR-Institutions. These principles stem from the comparison of those cases where users successfully solved the three problems of provision, credible commitment and mutual monitoring, and were able to manage their resource sustainably under complex and uncertain circumstances. These principles, however, do not constitute a blueprint for the successful construction of institutions. Rather they should be understood as requisite but not sufficient conditions. They are points of reference for the analysis of institutions for self-governance which have to be extended from case to case.
 #'''Clearly defined boundaries'''<br/>Individuals or households who have rights to withdraw resource units from the CPR must be clearly defined, as must the boundaries of the CPR itself.
 #'''Congruence between appropriation and provision rules and local conditions'''<br/>Appropriation rules restricting time, place, technology, and/or quantity of resource units are related to local conditions and to provision rules requiring labor, material, and/or money.

@@ Line 2: / Line 2: @@
 A common-pool resource is a resource that can be attributed to the economic category of Common Goods. Characteristic for this kind of goods is, that the access to them is hardly restrictable while the availability is limited. In consequence the sustainability of these resources is endangered.<br/>This article describes the peculiarities of common-pool resources and consequences for their governance. Furthermore, an approach of collective governance, which has been developed by the institutional economist Elinor Ostrom<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>, is presented.
-== '''Introduction''' ==
+== Introduction ==
 No matter if water resources, agricultural land, fishing grounds or forests – the sustainable management of resources is at the core of long lasting food security. In times of population growth and an increasing demand for food, resources are stressed till the limits of their capacity. In order to maximize the yield of a resource, users depart from traditional methods of management which proved to be successful since centuries. What happens seems to be a paradox: While on one side trying to meet the needs for subsistence, on the other side the foundation for it is destroyed. Reform efforts seek to break through this mechanism and impose solutions like central regulation or the privatization of resources.<br/>But are users who were able to manage a resource over a long time, nowadays really unable to continue to manage it sustainably? Are they really trapped in a situation where they cannot develop solutions on their own? What are the reasons that let users act in a way which seems irrational? This article tries to give insights into these coherences for the situation of common-pool resources.
-== '''Common-pool resources''' ==
+== Common-pool resources ==
 Economic goods can be distinguished along the two dimensions of subtractability and excludability. Subtractability of a good means that the part being taken or used by someone, cannot be taken or used by anyone else. Excludability, however, implies that someone can be suspended from the usage of this good. In consequence economic goods can be classified into four categories:
@@ Line 16: / Line 16: @@
 Common-pool resources (CPR) fulfill the criteria of common goods. For further understanding, one has to differentiate between the resource system itself and the units appropriated by a user. Subtractability in case of a CPR means that, while the system can be used collectively, the units appropriated by a user will only benefit him individually. Being not excludable from the usage of the resource (or only excludable at high costs) results in few incentives for the user to engage himself in the provision of the resource or maintenance of the system.
-=== '''Difficulties in the governance of common-pool resources''' ===
+=== Difficulties in the governance of common-pool resources ===
 Due to the specific character of CPRs several difficulties arise when it comes to the question of sustainable governance. The most known explanation why users left alone with their CPR fail to manage it sustainably comes from Garret Hardin. In his essay “The tragedy of the commons”<ref name="Hardin, Garrett (1968)">Hardin, Garrett (1968): „The tragedy of the commons“. In: Science. 162, S. 1243–1248.</ref> he describes a common pasture on which several shepherds keep their sheep. In order to maximize their individual benefits each shepherd decides to bring more sheep, which in the end leads to an overexploitation and depletion of the pasture. The inherent dilemma is that each shepherd acts individually rational whereas the collective outcome is irrational. Other examples for a similar dilemma are the prisoners game<ref name="Axelrod, Robert (1984)">Axelrod, Robert (1984): The Evolution of Cooperation. New York: Basic Books.</ref> from game theory or the phenomenon of free riding<ref name="Olson, Mancur (1965)">Olson, Mancur (1965): The Logic of Collective Action. Cambridge, Massachusetts: Harvard University Press.</ref>.
@@ Line 22: / Line 22: @@
 Experts often see the solution of those problems either in handing over the control of the resource to the state or in privatization of the resource. As a central power the state could overlook and control the resource neutrally. Practice however shows that, especially in development countries, the state often does not have the capacity to fulfill this role and is too far away from the users. This results in contradictory regulations and missing acceptance on the ground. Also, privatization seems to be promising because in theory the owner seeks to maximize his benefit through the optimal and sustainable management of the resource. But even here examples are prominent where privatization only led to the exploitation of resources, because investors were rather interested in short-term benefits than the long-term management of the resources.
-== '''Collective governance of common-pool resources''' ==
+== Collective governance of common-pool resources ==
 Users of CPRs are not necessarily trapped in a situation where they cannot find a solution on their own. Extensive research about institutions for the government of CPRs was done by Elinor Ostrom<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>. She concerned herself with numerous cases of collectively governed CPRs and found various examples that turned out to be successful without any intervention from the state or measures of privatization. By comparing more and less successful examples she identified certain patterns and mechanisms which all functioning institutions for self-governance of CPRs have in common.
-=== '''Decision making in complex and uncertain situations''' ===
+=== Decision making in complex and uncertain situations ===
 At the core of Ostroms analyses are rational users that have to make decisions in complex and uncertain situations. Users estimate the benefits and costs of an action and take the decision whether to carry it out or not depending on their analysis. This decision making process takes place under certain circumstances that typify CPR situations.
@@ Line 42: / Line 42: @@
 '''CPR users are interdependent.''' They don’t make decisions only on their own, rather they depend on actions and strategies of other users. If those strategies change, they may also change their strategy. Introducing rules in a CPR system doesn’t change this interdependence, but will influence the outcomes achieved by the users.
-=== '''Three problems of constructing institutions for self-governance''' ===
+=== Three problems of constructing institutions for self-governance ===
 [[File:Three problems of constructing institutions for self-governance.jpg|center|370px|Three problems of constructing institutions for self-governance|alt=Three problems of constructing institutions for self-governance]](own illustration following Ostrom 1990<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>)<br/>
@@ Line 54: / Line 54: @@
 One solution to ensure the credibility of the commitments would be the introduction of external monitoring and sanctioning. But even here the question arises which motivation the external monitoring has for the surveillance of rules and the imposition of sanctions. A system of '''mutual monitoring''' by the users themselves is more transparent and the users being responsible for monitoring could receive important information about the compliance of the other users.
-=== '''Design principles of institutions for self-governance of common-pool resources''' ===
+=== Design principles of institutions for self-governance of common-pool resources ===
 One important result of Elinor Ostroms work is the development of eight so called design principles which are illustrated by long-enduring CPR-Institutions. These principles stem from the comparison of those cases where users successfully solved the three problems of provision, credible commitment and mutual monitoring, and were able to manage their resource sustainably under complex and uncertain circumstances. These principles, however, do not constitute a blueprint for the successful construction of institutions. Rather they should be understood as requisite but not sufficient conditions. They are points of reference for the analysis of institutions for self-governance which have to be extended from case to case.
@@ Line 68: / Line 68: @@
 (Cited from Ostrom 1990, p.90<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>)
-== '''Examples''' ==
+== Examples ==
 The most known example for applied CPR-Governance are [[Water User Associations|Water User Associations]]. This approach follows the principles of [[Water Governance|Water Governance]] and sees the solution for sustainable resource management in a cooperative management of water resources between governmental entities and end users.
@@ Line 74: / Line 74: @@
 However the spectrum of CPRs is wide and the perspectives presented in this article may provide valuable understanding on the behavior of actors in various CPR situations. For example also common pasture land, costal fishing grounds or [[Transboundary water management|transboundary water resources]] are CPRs. Users or actors in those resource systems all face similar problems concerning the distribution and the collective management of their resource. What varies is the complexity of the resource (water as a flowing entity vs. pasture as a static one), the scale (local vs. regional vs. international resources) and the type of actors (individuals vs. user groups vs. states). On one side those distinctive features demonstrate the diversity of CPRs. On the other side they make clear that each institution for collective governance has to be tailor-made for each CPR situation.
-== '''References''' ==
+== References ==
 <references />
-== '''Further Information''' ==
+== Further Information ==
 [http://www.iasc-commons.org/ http://www.iasc-commons.org/] (The International Association for the Study of the Commons)
@@ Line 93: / Line 93: @@
 [[Community Based Participatory Watershed Development|Community Based Participatory Watershed Development]]

@@ Line 34: / Line 34: @@
 (own illustration following Ostrom 1990<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>)
-Uncertainty in CPR situations stems from external factors such as varying precipitation and temperature or changing market prices which may shift incentives for the users. But also internal factors, such as insufficient knowledge about the structure and complexity of the resource system or uncertainty regarding the influence of own actions on the system and other users, may hamper the decision making process.
+'''Uncertainty in CPR situations''' stems from external factors such as varying precipitation and temperature or changing market prices which may shift incentives for the users. But also internal factors, such as insufficient knowledge about the structure and complexity of the resource system or uncertainty regarding the influence of own actions on the system and other users, may hamper the decision making process.
-How benefits of an action are valued depends on the timeframe that users take into consideration. Short-term benefits are valued higher than long term benefits, if the users cannot be sure about the availability of the resource in the future. For example, a farmer may take water from an irrigation system when it is available and not when it would be the appropriate time for his crop. On the contrary, users value long-term benefits from a resource higher, if they depend on it. As they could not simply switch to another resource, actions that lead to its sustainability rather than to short-term benefits are valued higher.
+'''How benefits of an action are valued''' depends on the timeframe that users take into consideration. Short-term benefits are valued higher than long term benefits, if the users cannot be sure about the availability of the resource in the future. For example, a farmer may take water from an irrigation system when it is available and not when it would be the appropriate time for his crop. On the contrary, users value long-term benefits from a resource higher, if they depend on it. As they could not simply switch to another resource, actions that lead to its sustainability rather than to short-term benefits are valued higher.
-Norms and values play an important role in the decision making process. Some behavior is connected to strong norms what leads users to not even consider certain actions. If, for example, keeping a promise is a high value, this person would probably not think about breaking it. This action would be connected to high costs in form of feeling guilty afterwards. Especially important for CPR situations is the value of opportunist behavior, because this has direct implications on the sticking to rules and mechanisms for monitoring.
+'''Norms and values''' play an important role in the decision making process. Some behavior is connected to strong norms what leads users to not even consider certain actions. If, for example, keeping a promise is a high value, this person would probably not think about breaking it. This action would be connected to high costs in form of feeling guilty afterwards. Especially important for CPR situations is the value of opportunist behavior, because this has direct implications on the sticking to rules and mechanisms for monitoring.
-CPR users are interdependent. They don’t make decisions only on their own, rather they depend on actions and strategies of other users. If those strategies change, they may also change their strategy. Introducing rules in a CPR system doesn’t change this interdependence, but will influence the outcomes achieved by the users.
+'''CPR users are interdependent.''' They don’t make decisions only on their own, rather they depend on actions and strategies of other users. If those strategies change, they may also change their strategy. Introducing rules in a CPR system doesn’t change this interdependence, but will influence the outcomes achieved by the users.
 === '''Three problems of constructing institutions for self-governance''' ===
@@ Line 48: / Line 48: @@
 Due to the given circumstances in CPR situations and the complex influences on the decision making, users of CPRs have to solve three problems in the process of constructing institutions for self-governance.
-In the beginning, they have to decide on a common set of rules for the management of the resource and have to bear the costs for the provision of the new institution. If users agree that they should coordinate their actions, this doesn’t necessarily mean that they favor the same set of rules. And even if they agree, they still have to invest in the provision of the institution, which embodies a collective benefit and again includes the probability of free riding<ref name="Olson, Mancur (1965)">Olson, Mancur (1965): The Logic of Collective Action. Cambridge, Massachusetts: Harvard University Press.</ref>.
+In the beginning, they have to decide on a common set of rules for the management of the resource and have to bear the costs for the '''provision of the new institution'''. If users agree that they should coordinate their actions, this doesn’t necessarily mean that they favor the same set of rules. And even if they agree, they still have to invest in the provision of the institution, which embodies a collective benefit and again includes the probability of free riding<ref name="Olson, Mancur (1965)">Olson, Mancur (1965): The Logic of Collective Action. Cambridge, Massachusetts: Harvard University Press.</ref>.
-When a set of rules has been negotiated, the users have to commit themselves credibly to sticking to these rules. In the moment of the negotiation, these commitments may seem credible, but in a different moment – where, for example, a user faces an emergency situation in which breaking the rule could prevent him from high losses – the user might ask himself to which extent earlier promises oblige him to future sacrifices. Furthermore, he cannot be sure if he is maybe the only one acting conformal to the rules.
+When a set of rules has been negotiated, the users have to '''commit themselves credibly''' to sticking to these rules. In the moment of the negotiation, these commitments may seem credible, but in a different moment – where, for example, a user faces an emergency situation in which breaking the rule could prevent him from high losses – the user might ask himself to which extent earlier promises oblige him to future sacrifices. Furthermore, he cannot be sure if he is maybe the only one acting conformal to the rules.
-One solution to ensure the credibility of the commitments would be the introduction of external monitoring and sanctioning. But even here the question arises which motivation the external monitoring has for the surveillance of rules and the imposition of sanctions. A system of mutual monitoring by the users themselves is more transparent and the users being responsible for monitoring could receive important information about the compliance of the other users.
+One solution to ensure the credibility of the commitments would be the introduction of external monitoring and sanctioning. But even here the question arises which motivation the external monitoring has for the surveillance of rules and the imposition of sanctions. A system of '''mutual monitoring''' by the users themselves is more transparent and the users being responsible for monitoring could receive important information about the compliance of the other users.
 === '''Design principles of institutions for self-governance of common-pool resources''' ===

@@ Line 1: / Line 1: @@
-A common-pool resource is a resource that can be attributed to the economic category of Common Goods. Characteristic for this kind of goods is, that the access to them is hardly restrictable while the availability is limited. In consequence the sustainability of these resources is endangered.<br/>This article describes the peculiarities of common-pool resources and consequences for their governance. Furthermore, an approach of collective governance, which has been developed by the institutional economist Elinor Ostrom, is presented.
+A common-pool resource is a resource that can be attributed to the economic category of Common Goods. Characteristic for this kind of goods is, that the access to them is hardly restrictable while the availability is limited. In consequence the sustainability of these resources is endangered.<br/>This article describes the peculiarities of common-pool resources and consequences for their governance. Furthermore, an approach of collective governance, which has been developed by the institutional economist Elinor Ostrom<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>, is presented.
 == '''Introduction''' ==
@@ Line 18: / Line 18: @@
 === '''Difficulties in the governance of common-pool resources''' ===
-Due to the specific character of CPRs several difficulties arise when it comes to the question of sustainable governance. The most known explanation why users left alone with their CPR fail to manage it sustainably comes from Garret Hardin. In his essay “The tragedy of the commons” he describes a common pasture on which several shepherds keep their sheep. In order to maximize their individual benefits each shepherd decides to bring more sheep, which in the end leads to an overexploitation and depletion of the pasture. The inherent dilemma is that each shepherd acts individually rational whereas the collective outcome is irrational. Other examples for a similar dilemma are the prisoners game<ref name="Axelrod, Robert (1984)">Axelrod, Robert (1984): The Evolution of Cooperation. New York: Basic Books.</ref> from game theory or the phenomenon of free riding<ref name="Olson, Mancur (1965)">Olson, Mancur (1965): The Logic of Collective Action. Cambridge, Massachusetts: Harvard University Press.</ref>.
+Due to the specific character of CPRs several difficulties arise when it comes to the question of sustainable governance. The most known explanation why users left alone with their CPR fail to manage it sustainably comes from Garret Hardin. In his essay “The tragedy of the commons”<ref name="Hardin, Garrett (1968)">Hardin, Garrett (1968): „The tragedy of the commons“. In: Science. 162, S. 1243–1248.</ref> he describes a common pasture on which several shepherds keep their sheep. In order to maximize their individual benefits each shepherd decides to bring more sheep, which in the end leads to an overexploitation and depletion of the pasture. The inherent dilemma is that each shepherd acts individually rational whereas the collective outcome is irrational. Other examples for a similar dilemma are the prisoners game<ref name="Axelrod, Robert (1984)">Axelrod, Robert (1984): The Evolution of Cooperation. New York: Basic Books.</ref> from game theory or the phenomenon of free riding<ref name="Olson, Mancur (1965)">Olson, Mancur (1965): The Logic of Collective Action. Cambridge, Massachusetts: Harvard University Press.</ref>.
 Experts often see the solution of those problems either in handing over the control of the resource to the state or in privatization of the resource. As a central power the state could overlook and control the resource neutrally. Practice however shows that, especially in development countries, the state often does not have the capacity to fulfill this role and is too far away from the users. This results in contradictory regulations and missing acceptance on the ground. Also, privatization seems to be promising because in theory the owner seeks to maximize his benefit through the optimal and sustainable management of the resource. But even here examples are prominent where privatization only led to the exploitation of resources, because investors were rather interested in short-term benefits than the long-term management of the resources.
@@ Line 24: / Line 24: @@
 == '''Collective governance of common-pool resources''' ==
-Users of CPRs are not necessarily trapped in a situation where they cannot find a solution on their own. Extensive research about institutions for the government of CPRs was done by Elinor Ostrom. She concerned herself with numerous cases of collectively governed CPRs and found various examples that turned out to be successful without any intervention from the state or measures of privatization. By comparing more and less successful examples she identified certain patterns and mechanisms which all functioning institutions for self-governance of CPRs have in common.
+Users of CPRs are not necessarily trapped in a situation where they cannot find a solution on their own. Extensive research about institutions for the government of CPRs was done by Elinor Ostrom<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>. She concerned herself with numerous cases of collectively governed CPRs and found various examples that turned out to be successful without any intervention from the state or measures of privatization. By comparing more and less successful examples she identified certain patterns and mechanisms which all functioning institutions for self-governance of CPRs have in common.
 === '''Decision making in complex and uncertain situations''' ===
@@ Line 32: / Line 32: @@
 [[File:Influences on the decision making process of users in common-pool resouce situations.jpg|center|700px|Influences on the decision making process of users in common-pool resouce situations.jpg|alt=Influences on the decision making process of users in common-pool resouce situations.jpg]]
-(own illustration following Ostrom 1990)
+(own illustration following Ostrom 1990<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>)
 Uncertainty in CPR situations stems from external factors such as varying precipitation and temperature or changing market prices which may shift incentives for the users. But also internal factors, such as insufficient knowledge about the structure and complexity of the resource system or uncertainty regarding the influence of own actions on the system and other users, may hamper the decision making process.
@@ Line 44: / Line 44: @@
 === '''Three problems of constructing institutions for self-governance''' ===
-[[File:Three problems of constructing institutions for self-governance.jpg|center|370px|Three problems of constructing institutions for self-governance|alt=Three problems of constructing institutions for self-governance]](own illustration following Ostrom 1990)<br/>
+[[File:Three problems of constructing institutions for self-governance.jpg|center|370px|Three problems of constructing institutions for self-governance|alt=Three problems of constructing institutions for self-governance]](own illustration following Ostrom 1990<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>)<br/>
 Due to the given circumstances in CPR situations and the complex influences on the decision making, users of CPRs have to solve three problems in the process of constructing institutions for self-governance.
@@ Line 66: / Line 66: @@
 #'''Nested enterprises'''<br/>Appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.
-(Cited from Ostrom 1990, p.90)
+(Cited from Ostrom 1990, p.90<ref name="Ostrom, Elinor (1990)">Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>)
 == '''Examples''' ==

@@ Line 10: / Line 10: @@
 Economic goods can be distinguished along the two dimensions of subtractability and excludability. Subtractability of a good means that the part being taken or used by someone, cannot be taken or used by anyone else. Excludability, however, implies that someone can be suspended from the usage of this good. In consequence economic goods can be classified into four categories:
-[[File:Economic Goods.jpg|center|800px|test|alt=test]]<br/>
+[[File:Economic Goods.jpg|center|700px|Categorization of Economic Goods|alt=test]]
 Common-pool resources (CPR) fulfill the criteria of common goods. For further understanding, one has to differentiate between the resource system itself and the units appropriated by a user. Subtractability in case of a CPR means that, while the system can be used collectively, the units appropriated by a user will only benefit him individually. Being not excludable from the usage of the resource (or only excludable at high costs) results in few incentives for the user to engage himself in the provision of the resource or maintenance of the system.
@@ Line 28: / Line 30: @@
 At the core of Ostroms analyses are rational users that have to make decisions in complex and uncertain situations. Users estimate the benefits and costs of an action and take the decision whether to carry it out or not depending on their analysis. This decision making process takes place under certain circumstances that typify CPR situations.
-<br/>
+[[File:Influences on the decision making process of users in common-pool resouce situations.jpg|center|700px|Influences on the decision making process of users in common-pool resouce situations.jpg]]
-file:///C:\Users\giz1\AppData\Local\Temp\msohtmlclip1\01\clip_image002.jpg
+(own illustration following Ostrom 1990)
 Uncertainty in CPR situations stems from external factors such as varying precipitation and temperature or changing market prices which may shift incentives for the users. But also internal factors, such as insufficient knowledge about the structure and complexity of the resource system or uncertainty regarding the influence of own actions on the system and other users, may hamper the decision making process.
@@ Line 42: / Line 44: @@
 === '''Three problems of constructing institutions for self-governance''' ===
-'''file:///C:\Users\giz1\AppData\Local\Temp\msohtmlclip1\01\clip_image004.jpg'''
+[[File:Three problems of constructing institutions for self-governance.jpg|center|500px|Three problems of constructing institutions for self-governance]](own illustration following Ostrom 1990)<br/>
 Due to the given circumstances in CPR situations and the complex influences on the decision making, users of CPRs have to solve three problems in the process of constructing institutions for self-governance.
@@ Line 64: / Line 66: @@
 #'''Nested enterprises'''<br/>Appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.
-<ref>Ostrom, Elinor (1990): Governing the Commons: The Evolution of Institutions for Collective Action (Political Economy of Institutions and Decisions). Cambridge, Massachusetts: Cambridge University Press.</ref>
+(Cited from Ostrom 1990, p.90)
 == '''Examples''' ==