The Problem of Global Environmental Protection

Suppose that land is communally owned. Every person has the right to hunt, till, or mine the land. This form of ownership fails to concentrate the cost associated with any person's exercise of his communal right on that person. If a person seeks to maximize the value of his communal rights, he will tend to overhunt and overwork the land because some of the costs of his doing so are borne by others. The stock of game and the richness of the soil will be diminished too quickly. It is conceivable that those who own these rights, i.e. every member of the community, can agree to curtail the rate at which they work the lands if negotiating and policing costs are zero… However, negotiating costs will be large because it is difficult for many persons to reach a mutually satisfactory agreement, especially when each hold-out has the right to work the land as fast as he pleases. Furthermore, even if an agreement among all can be reached, we must yet take account of the costs of policing the agreement, and these may be large, also.