Governing the Commons: The Evolution of Institutions for Collective Action

The successful CPRs in the previous chapter have existed for hundreds of years. It is thus not possible to understand the incentives around their formation. To address how such institutions are formed, Ostrom studies the management of “groundwater basins located beneath the Los Angeles metropolitan area” (104). In these cases, appropriators rely primarily on negotiated settlements of water rights to change institutional rules. It is important to tackle the issue of origins because creating an institution is also subject to collective action incentives.

In dry Los Angeles, water basins are essential as sources of water and storage units for use during high periods of demand. These groundwater basins can be destroyed by overextraction or pollution, which was a real threat in the mid-20th century. If located near the coast, saltwater can invade and destroy the basin if it gets too low. The destruction of these water basins in the Los Angeles area would have been catastrophic. In the 1940s, there were conflicting laws about rights to this water. 

As a result, the situation in these basins was one of open-access, or one without clear limits as to who could withdraw water and how much could be withdrawn.