Archive | Collective Action Problems

The Passing of Ronald Coase

As co-blogger Jonathan Adler notes, Nobel Prize-winning economist and legendary law and economics scholar Ronald Coase passed away today at the age of 102. Coase was the author of such foundational articles as “The Problem of Social Cost,” and “The Nature of the Firm.” His contributions to scholarship are so massive that it is hard to overstate their impact. Many of his most important articles are collected in this book.

One of my personal favorite Coase articles is “The Lighthouse in Economics,” where Coase shows that private entrepreneurs successfully established and operated an enterprise that most economists believed was the classic example of a public good that could only be provided by government. This doesn’t prove that the private sector can provide all public goods (nor did Coase claim that it can); but it does show that we should be more careful than we usually are in asserting that a given good can only be provided by the state just because it is public in nature. Before Coase, most scholars and public policy experts had simply assumed that the private sector was incapable of providing lighthouses without much investigation of the issue.

In this January post, I discussed Coase’s final book, written when he was over 100 years old. Would that we could all be so remarkably productive for so long.

My condolences to Coase’s family and colleagues. He will be greatly missed. [...]

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Elinor Ostrom, RIP

I join those mourning the passing of Nobel Prize winner Elinor Ostrom. She will be greatly missed. In this 2009 post written soon after she won the prize, I described the significance of her pathbreaking work on collective action and tragedy of the commons problems, which has had a huge influence on economists, political scientists and legal scholars alike:

When Ostrom began writing in this field in the 1960s, the conventional wisdom in economics and political science was that the tragedy of the commons and other similar collective action problems could only be addressed through government intervention. Some dissenting economists (such as Ronald Coase) argued that they could often be addressed through privatization – converting common property into property owned by individuals, who would then have strong incentives not to overuse or destroy it. In a series of influential articles and books, Ostrom showed that there is a third way: often individuals can use social norms and informal institutions to manage common property resources and prevent tragedies of the commons. In many situations, Ostrom demonstrates, informal, decentralized approaches to managing common property resources are superior to government-imposed ones. The former take more account of the specialized local knowledge possessed by the people who actually use the resources and depend on them for their livelihoods….

Ostrom’s theories are often seen as an alternative to traditional libertarian thought, which emphasizes the importance of private property and markets. However, it actually fits well with libertarianism defined more broadly as advocacy of the superiority of private sector institutions over government. In some respects, Ostrom’s norm-based approach to dealing with tragedies of the commons is actually less dependent on government than the more traditional libertarian approach of relying on exclusive private property rights…..

Not all tragedies of the commons can be solved by the

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Pitfalls of the Collective Action Theory of Constitutional Federalism

Co-blogger Jonathan Adler points out several weaknesses in the collective action theory approach to interpreting constitutional federalism advocated by a number of academics, most notably Robert Cooter and Neil Siegel. The theory has been used as a tool for defending the constitutionality of the individual mandate, though I have argued that it may actually cut the other way because there is no collective action problem preventing individual states from enacting health insurance mandates of their own – at least not if the mandate has the beneficial effects that advocates ascribe to it.

Last year, I reviewed Cooter and Siegel’s excellent Stanford Law Review article on the subject for the Jotwell website. Although I called the article a major contribution to federalism scholarship, I also had several major reservations about their theory. Its most important flaws are that it doesn’t square with the text of the Constitution, and that it ignores the possibility that federal legislation can create collective action problems as well as solve them:

Despite its impressive strengths, Cooter and Siegel’s analysis also has a few problems. It is far from clear that Article I really gives Congress unfettered authority to solve any and all collective action problems among the states. If that were the case, why would the Founders have bothered to carefully enumerate seventeen separate powers plus the Necessary and Proper Clause, instead of a single catch-all “Collective Action Clause?” To their credit, Cooter and Siegel foresaw this issue and tried to address it by arguing that the enumerated powers are not meant to be an exhaustive list, but an illustrative one. Yet it seems unlikely that a merely illustrative list would be so long and precisely detailed. Moreover, treating the list as illustrative renders the Necessary and Proper Clause superfluous. Under that approach, Congress would already

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Jeffrey Rosen’s Proposed Limiting Principles for Federal Power

In a recent response to critics of his earlier column on the individual mandate case, Jeffrey Rosen claims that upholding the individual mandate would not lead to unlimited congressional power because “Congress [still] cannot use its commerce power to regulate activity that has no substantial effects on interstate commerce and where there are no collective action problems that make it impossible for the states to act on their own.”

If these two proposed constraints are interpreted in such a way as to allow the individual mandate, they would also allow any other mandate as well. In and of itself, the “activity” being regulated by the individual mandate – not having health insurance – has no “substantial effects on interstate commerce.” Not having health insurance does not involve purchasing any products across state lines or incentivizing anyone else to do so. It does, of course, have an effect on commerce in the sense that a person who doesn’t purchase health insurance could have made a different decision, which would have involved purchasing the product in question. That, however, is true of any decision to do or not do anything. A person who chooses to spend an hour reading a book at home could have instead used that time to earn income or buy a product, thereby affecting interstate commerce. The time I devoted to writing this post could have been spent doing consulting work for pay. Any decision to spend time on A is necessarily a decision not to do, B, C, or D. And the failure to do some of the latter is likely to have an effect on interstate commerce.

Rosen’s collective action limitation fares little better. If the Court seriously examines the individual mandate to determine if there is a collective action problem preventing states from adopting mandates [...]

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What Collective Action Federalism Is and Is Not

I congratulate Ilya Somin on the arrival of Willow.  My daughters stand ready to babysit your beautiful pooch.

In this post, I will clarify the theory of collective action federalism by offering four points about what the theory is and is not.

First, collective action federalism is not a comprehensive structural account of American constitutional federalism.  For example, whatever the implications of the theory for the proper interpretation of other constitutional provisions, a collective action approach does not explain the proper scope of federal powers authorized by the enforcement clauses of the Civil War Amendments.  

The 13th, 14th, and 15th Amendments dramatically changed the balance of power between the federal government and the states by authorizing congressional regulation of the internal policy choices of the states on certain subjects regardless of collective action problems among the states.  These amendments especially aimed to grant basic constitutional rights previously denied to minority groups.  Minorities had been excluded because collective action had succeeded for the majority, not because it had failed. 

Second, collective action federalism offers a structural account of Article I, Section 8, not the institutional roles of Congress and the Court in constitutional interpretation.  Those who endorse vigorous judicial review of federalism questions will interpret collective action federalism in terms of how courts should restrain Congress.  Those who do not will interpret the framework in terms of guidance for conscientious legislators and the political safeguards of federalism.

Third, to the extent courts engage in judicial review of federalism questions, people will disagree about how judges should evaluate congressional judgments about the existence and seriousness of collective action problems, and about the adequacy of Congress’s response.  Congress can always seek to justify legislation by asserting that a collective action problem exists; that its effects are significant; and that the law it has [...]

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The Theory of Collective Action Federalism

I thank Eugene Volokh for inviting me to blog about my work in this highly regarded venue.  Today, I will present the theory of collective action federalism, which I have developed with Robert Cooter of Berkeley Law in a recent article.  Tomorrow, I will clarify what the theory is and is not.  Later in the week, I will offer some thoughts in response to Prof. Kurt Lash’s important new paper.

According to many respected histories, the Framers of the U.S. Constitution met in Philadelphia during the Summer of 1787 and wrote Article I, Section 8, primarily in order to address several collective action problems facing the United States during the 1780s.  They especially wanted to protect the states from commercial warfare against one another and from military warfare by foreigners.  In the Critical Period, the states often acted individually when they needed to act collectively, discriminating against interstate commerce and free riding off the contributions of other states to the federal treasury and the U.S. military.  Moreover, Congress lacked power under the Articles of Confederation to address these problems.

James Madison saw the difficulty in his Vices of the Political System of the United States. Recording various problems with the Articles, Madison underscored “want of concert in matters where common interest requires it,” a “defect . . . strongly illustrated in the state of our commercial affairs.  How much has the national dignity, interest, and revenue suffered from this cause?”  When activities spilled over from one state to another, Madison and other nationalist Framers recognized that the actions of individually rational states produced irrational results for the nation.  

This is the definition of a collective action problem.  The solution lay with the establishment of a more comprehensive unit of government.  The federal government would require the authority to [...]

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Collective Action Federalism

Like Eugene Volokh, I too look forward to the upcoming guest-blogging stints by Kurt Lash and Neil Siegel. It so happens that I recently reviewed Robert Cooter and Neigl Siegel’s outstanding article “Collective Action Federalism” on Jotwell, a website where legal scholars review important new scholarship. Here’s an excerpt from what I said:

Robert Cooter and Neil Siegel’s Collective Action Federalism is probably the most important academic article on constitutional federalism in several years…..

In Collective Action Federalism, Cooter and Siegel argue that the congressional powers enumerated in Article I, Section 8 of the Constitution should be interpreted in light of the goal of giving Congress the authority it needs to address collective action problems among the states. A collective action problem arises when members of a group want a good, but have little or no incentive to contribute to its production, because they can instead try to free ride on the efforts of others…..

The authors argue that Article I, Section 8 should be treated as a “unified whole” rather than as a discrete set of unconnected individual powers. And they propose collective action theory as a unifying framework for interpreting that whole. Where there is an interstate collective action problem, they would give Congress the power to address it. Where no such problem exists, state power should be allowed to prevail….

The greatest strength of Cooter and Siegel’s analysis is that it accounts for the interconnections between the various congressional powers and expresses their underlying unity. As they point out, this has advantages under both originalist and nonoriginalist theories of interpretation….

Cooter and Siegel’s analysis also has a few problems. It is far from clear that Article I really gives Congress unfettered authority to solve any and all collective action problems among the states. If that were

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Cancun and Copenhagen, and Carbon as Pure Regulatory Object

Co-Conspirator Jonathan has already remarked below on the seeming collapse of the media-academic-NGO-international organization-et al. global warming coalition in-between last year’s Copenhagen meeting and this year’s much-subdued Cancun event.  I broadly agree with Jonathan, and with Margaret Wente, on whom he comments, on the policy merits.

I also think the right approach to climate change is not some massive project for the most far-reaching, long-term, costly, uncertain attempt at governance through the demands of climate for the whole globe.  It is wrong as a global political project, doomed not to just fail but to transmute into some set of spectacularly bad unintended consequences, and wrong as a question of management of long-run uncertainties.  It is noteworthy that even the voice of the global establishment, bien pensant global opinion, the Economist, is now saying what should have been said a decade ago – you have to manage the problems as they arise through mitigation, not some exercise in doomed global political glory to seek to head it off on the front end.

I say all that as background, not to try and persuade anyone, but simply to be clear what the starting point of the discussion is for me (be warned, this is a long post).  As far as the future of the global project over climate change is, I would point you to Walter Russell Mead’s new blog essay on Cancun (h/t Instapundit) (for the glass-half-filled view, see this news story from the NYT; note that it is filed from DC and NY, not Cancun).  It is useful in large part because it lays out something on which I have commented occasionally in the course of writing about the UN and its member states as a (non-) governance mechanism, and its “public choice” pathways of rent-seeking, income [...]

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Do We Need Global Governance To Combat Global Warming?

The recent Copenhagen Conference on global warming has led to renewed claims that we cannot effectively combat global warming without “global governance,” or perhaps even a full-fledged world government. UN Secretary General Ban Ki-Moon recently claimed that “A [climate change] deal must include an equitable global governance structure” and many other political leaders and environmental activists have expressed similar views. Political scientist Campbell Craig summarized the standard argument for global governance to address climate change in this 2008 article:

[O]ne of the most evident failures of the nation-state system in recent years has been its inability to deal successfully with problems that endanger much or most of the world’s population. As the world has become more globalized—economically integrated and culturally interconnected—individual countries have become increasingly averse to dealing with international problems that are not caused by any single state and cannot be fixed even by the focused efforts of individual governments. Political scientists refer to this quandary as the “collective action problem,” by which they mean the dilemma that emerges when several actors have an interest in eradicating a problem that harms all of them, but when each would prefer that someone else do the dirty work of solving it. If everyone benefits more or less equally from the problem’s solution, but only the actor that addresses it pays the costs, then all are likely to want to “free ride” on the other’s efforts. The result is that no one tackles the problem, and everyone suffers.

Several such collective action problems dominate much of international politics today, and scholars of course debate their importance and relevance to world government. Nevertheless, a few obvious ones stand out, notably the imminent danger of climate change….

Essentially, the argument is that global warming is a collective action problem that only an [...]

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AsteroidGate – For Real?

From Wired:

Any number of undiscovered near-Earth objects could one day careen into the Earth, and there is a lot of talk here at the American Geophysical Union meeting about tracking them. So far, though, only one discovered object has seemed even mildly likely to hit our planet.That asteroid is Apophis, a 900-foot asteroid. Calculations released on Christmas Eve 2004 appeared to show that there was a greater than 2 percent chance the asteroid would hit the Earth in 2029. The asteroid appeared ready to give the Earth its closest shave since astronomers began looking for such things. It was judged a 4 on the Torino Impact Hazard Scale for a short time, the highest rating any near-Earth object has received.

As it turned out, more precise observations brought the risk of collision down to just 1 in 250,000, but the scare sparked greater interest and study in the fields of asteroid detection and defense.

While  the risk remains small, this might provide a test of Eric’s hypothesis, though it appears there are distributional consequences (and hence diplomatic obstacles) to asteroid deflection just as there are for climate change.

(Links via Instapundit) [...]

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Copenhagen as UN Politics, Not Climate Change Substance

(Updated below …  Give me global oligopoly or give me climate death!)


Post-Copenhagen.  At bottom, the question is legitimacy.  The global New Class met in Copenhagen, convinced, as ever, that it had legitimacy to act as it proposed to act, with the UN as its vehicle, because legitimacy was conferred by “expertise.”  The UN bureaucracy, its permanent culture of functionaries, endorsed the global New Class elites and their claim of legitimacy through expertise, because, after all, the experts were using the UN as the vehicle and thereby conferring upon it governance legitimacy – if you are Ban Ki Moon, what’s not to like about that?  Together, they thought they had found the formula to buy off the poor world through the climate fund.  They also thought they had found a formula that would bring the BRICs on board, by endorsing the Kyoto formula of encouraging industry to move from the rich world to China and India.  Obama and the Democrats would deliver the United States.

In the event, it turned out that the BRICS and the developing world decided to exercise their particular forms of legitimacy – the legitimacy of the sovereign equality of member states at the UN – in order to demand more for relaxing their “hold-up.”  Global New Class legitimacy at the UN encountered  that other form of global governance legitimacy, that of the mass of member states.  Whose legitimacy matters and for what?  And what does it mean to say that a climate change deal requires, in Secretary General Ban’s words, an “equitable global governance structure” to administer it – especially given the many, many, many, many, many, many, many, many things that are apparently to fall under its tent, from global free trade to ice water in our glasses?  What is [...]

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The Climate Change Fund as the New Millennium Development Goals?

Ever since the Copenhagen conference got going, and rapidly turned into an argument over wealth transfer from the rich world to the poor world, it has seemed to me that the exercise is best understood not as an argument about climate change, but instead about internaitonal economic development policy.

That is, the basic problem with international development policy is not the usual collective action problem.  The usual collective action problem is that which bedevils a Copenhagen deal to replace Kyoto, if one makes the assumptions about the science that, apparently, is beyond question:  even if everyone agrees as to the problem and the desirable collective solution, temptations to defect and to free-riding wreck it, either at the front end because no one agrees or at the back end.  Everyone has an interest; you just can’t get them all past the prisoners dilemma (or variant thereof) problem.

Many clever international lawyer-academics have quite patiently explained to me how that problem is solved this time around; none of them has convinced me.  On the contrary, my lens on this is not as someone coming to this from environmental law – but instead from watching iteration after iteration of crises at the UN that are, in each and every instance, something like the end of the world if the conference does not come to some agreement … and then it’s not.

The last time around for this pattern was, what, the 2005 UN reform summit.  Anyone besides John Bolton, Kofi Annan, and me remember it?  I realize that if you are an environmental law person or activist or student or etc., what happened at some unrelated UN confab does not seem at all relevant to a conference in which the Fate of the Planet Hangs in the Balance.  But believe me, whatever this [...]

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Survival of the Fattest and the Global Superfluous Poor in the Negotiations in Copenhagen

One of the minor brouhahas at Copenhagen has been over one of the many pieces of public art put up for the conference, Survival of the Fattest, sculpted by artist Jens Galschiot (2004), sponsored by

(I am putting up an image from a blog I frequently read, the “I am a middle-aged gay libertarian Conservative, living in dignified isolation in rural Eastern Ontario, Canada” Diogenes Borealis blog.  It has a longer post on various pieces of art at the Copenhagen conference, titled “Hideous Public Art, Copenhagen Edition.” Eric has a good commentary on the problems of political art, activist art, looking not just at this piece but several others at Copenhagen as well.  Read the whole thing, as Glenn R. might say.  Reactions to art, and political art, differ, so if you want a different take than Eric’s, check out this post with lots of photos on the sculpture, as well as how it was vandalized by someone pushing it over into the water, and then set back up again with a crane.)

The sculpture is accompanied by text, reading in part:

I’m sitting on the back of a man.
He is sinking under the burden.
I would do anything to help him.
Except stepping down from his back.

The website goes on to explain (in part):

The sculpture ’Survival of the Fattest’ is a symbol of the rich worlds (i.e. the fat woman, ‘Justitia’) self-complacent ‘righteousness’. With a pair of scales in her hand she sits on the back of starved African man (i.e. the third world), while pretending to do what is best for him.

The sculpture dates back to 2004, when it was exhibited in London.  On that occasion, it apparently was to symbolize the evils of globalization and free trade; it has morphed [...]

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Noah Sachs Responds to Anderson re Copenhagen and Collective Action

Noah Sachs, over at PrafsBlawg, is kind enough to respond to my post on the Copenhagen meetings and collective action problems.  It is worth reading the whole thing, but here is a chunk of it.  (If you comment, please remember that Professor Sachs is my guest here, so be courteous.  And my thanks to him for weighing in.)

My question – directed to international law experts in these kinds of negotiations – is how this round of talks is supposed to get past the usual collective action problems.  It takes climate change by assumption, so the issue here is not the leaked memos, Climategate, etc., but a question not of climate science but instead of international law, institutions, negotiations, and collective action.  Professor Sachs’ response in part:

Anderson is too pessimistic.  After all, over 180 countries have already agreed to two prior climate treaties (The UN Framework Convention in 1992 and the Kyoto Protocol in 1997), as well detailed rules for implementation (Marrakech Accords in 2001), all of which are currently being implemented.  The UN Framework Convention remains the organizing document for continued international efforts to address climate change, and the majority of industrialized parties to Kyoto are expected to comply with their Kyoto commitments by the end of the first commitment period, in 2012 (with some notable exceptions, such as Canada).  The EU-15 are on track to exceedtheir Kyoto commitments by 2012.   Reports of the death of Kyoto are greatly exaggerated.

So why would any country agree to, let alone comply with, obligations that impose near-term national costs but bring longer-term benefits to the globe as a whole?  Let me count the ways:

  • Self-interest in avoiding drought, sea-level rise, and hundred-degree summers
  • A recognition that this particular prisoners dilemma calls for global cooperation rather than defection, coupled
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How Are the Copenhagen Talks Supposed to Overcome Collective Action Problems?

Let me leave aside for the moment all the leaked memos and stuff.  I would describe myself as a non-expert on climate issues who has been gradually persuaded to the following positions:

  • Agnostic on the question of warming and human impact on it;
  • Getting less agnostic as I read the emails and leaked materials;
  • Unpersuaded that the CBA supports radical “front end” attempts to deal with a diffuse threat of uncertain likelihood far down the road, because the discount for uncertainty is too high;
  • Persuaded by the Lomborg position that we should address real damage as it manifests, in the most prudent way;
  • Persuaded by Lomborg that resources proposed for dealing with climate change must be weighed against other uses, particularly more immediate health and welfare issues such as malaria and AIDS; and
  • Persuaded by Lomborg that climate change across a very long time frame must be weighed up, in resource terms, against much more immediate, unquestionable environmental damage not defined as CO2, but regular old air pollution, water pollution, etc., especially as it exists in the developing world, the cities of Asia, Mexico City, other places – and not set aside on the assumption that the developed world’s long term climate change issues should take precedence.

I’m not arguing for this, just letting you know where I’m coming from.  But let the rest of this post be on the assumption that all the climate change warming threats are real, if long term.  If that is so, then, leaving aside climate science and turning just to international law and  diplomacy and politics …

Well, I do not understand how this Copenhagen conference manages to overcome the collective action failure problems that have been encountered in Kyoto and every other exercise in this area.  Extremely diffuse damage from a multitude of [...]

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