Sustainable finance
Tragedy of the Commons
Hardin's parable of shared resources destroyed by individual self-interest — and Ostrom's demonstration that communities routinely escape it.
Definition
The tragedy of the commons is Garrett Hardin's 1968 model of a shared, open-access resource — a pasture, fishery, or the atmosphere — in which each user gains the full benefit of additional use while costs are shared by all, making overuse individually rational and collectively ruinous. Hardin prescribed privatisation or state control; Elinor Ostrom's Nobel-winning work showed that real communities worldwide govern commons sustainably through rules, monitoring and graduated sanctions, identifying the design principles of successful commons governance.
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