Managing the global commons

When should internationally shared resources be subdivided and property and management rights to parts of the resource be distributed among nation states? Subdivision leads to inefficient exploitation and to an arbitrary division of benefits under three conditions: when property rights cannot be economically enforced; when the size and the value of the resource are unknown; and when exploitation involves external economies. The efficient use of such common property resources requires private or public regulation. Voluntary private regulation is likely to be effective only when few users are involved. In other cases, public regulation is called for. Some attributes of an intergovernmental organization designed to achieve efficient, equitable, and stable exploitation are presented. Current proposals for managing ocean resources, the orbit-spectrum resource, and Antarctica are considered.