The Quest for Meaning in Public Choice

Summary of: The Quest for Meaning in Public Choice

Author(s) / Editor(s)

Frameworks, composed of theories that are in turn composed of varying models need to be developed to study and make predictions about the complex behaviors that take place in social situations.

Publication Reference

Published in/by
American Journal of Economics and Sociology, vol. 63, issue 1, pages 105-147
Date
January 2004

Findings

  • With incomplete information and information-processing capabilities, individuals competing for common-pool resources may make mistakes in choosing strategies designed to realize a set of goals.
  • Communication and sanctioning mechanisms among potentially competing members of a community competing for common-pool resources increases the efficiency and stability of resource exploitation.
  • A shared culture—generally accepted norms of behavior, common understanding, homogeneity of preferences and resources—improves the probability that a community will develop adequate rules and norms to govern the use of resources.
  • The transmission of culture, rules, and norms through information, knowledge, and skills across generations is a challenge for the stability of open, democratic, self-governing societies over time.

The Institutional Analysis and Development (IAD) framework developed by the Ostroms and their colleagues at Indiana University provides a foundation for studying a multitude of theories, models, and predictions of public choice behaviors in different systems of governance and organization.

Frameworks define the action arena to which it would be applied; the resulting patterns of interactions and outcomes, and the means of evaluating those outcomes.

A framework is a general language about how varying rules, physical and material conditions, and attributes of a community affect the structure of action arenas, the incentives for actors, and resulting outcomes.

Action arenas include an action situation and the actors in that situation.

An action situation includes:

  • Participants
  • Positions
  • Outcomes
  • Action-outcome linkages
  • Control that participants exercise
  • Information
  • Cost and benefits of outcomes

Actors (individual or corporate) involve:

  • Resources brought to the situation
  • Values assigned to states of the world
  • Methods for dealing with knowledge and information
  • Selection processes for courses of action

Analysts can make strong predictions in tightly constrained situations of complete information: overuse of resources in an open commons where the actors do not share access to collective choice arenas.

Results are not as clear in situations where actors are embedded in communities with norms of fairness and conservation as well as the ability to communicate with each other.

Evaluation criteria can include a range of values for categories such as the following:

  • Economic efficiency
  • Fiscal equity among actors
  • Redistributional equity (e.g., policies to care for poorer individuals
  • Accountability
  • Conformance to a general morality
  • Adaptability to change

The IAD framework has been applied to various domains to make predictions of resulting behaviors in field settings. Examples of successful application include:

  • Police services
  • Urban public services in general
  • Common-pool resources: these were studied in laboratory as well as field settings. The IAD framework was used to create a theory of behavior. Communication of participants affects behavior: if no communication was permitted, the results approximated that of non-cooperative game theory. Communication led to different, more positive, results.
  • The IAD framework was used to develop extensive databases coding common-pool resources and diverse property regimes.