We analyse and empirically examine a multi-level common-pool resource (CPR) game consisting of a collective-choice level game and an operational-level game. In the collective-choice game, participants anonymously propose allocation rules to be used in the operational game and vote anonymously on the proposed rules. Majority and unanimity rules are investigated. Our major ®nding is that both types of voting rules substantially increase ef®ciency relative to a baseline with no opportunity for collective choice, but the distributional consequences of the rules differ. To understand the process by which ef®ciency is improved better, we examine four predictive theories related to proposals, votes, and outcomes.The use of common-pool resources (CPRs) generally implies the existence of negative appropriation externalities. Such externalities arise whenever the appropriation activity by one individual affects the net returns to appropriation activities by others.1 Although the costs of exclusion may be substantial, CPRs are frequently governed and managed directly by those who appropriate from these resources. This paper investigates the use of voting mechanisms as institutions to facilitate the self-governing process.Extensive ®eld research has demonstrated that many smaller CPRs, including irrigation systems, inshore ®sheries, and grazing lands, have been sustainably governed over long periods by users, even in adverse environments. Further, research conducted in laboratory experiments of ®nitely repeated CPR games has found that · individuals who communicate face-to-face about appropriation levels before each decision are able to increase their joint gain substantially relative to situations in which no communication is allowed, even when decisions are made anonymously; and · individuals who communicate face-to-face and then vote on establishing sanctions for breaking agreements achieve near-optimal results with extremely low defection rates and consequently little need to use sanctions (E. Ostrom et al., 1992Ostrom et al., , 1994.
Strong evidence from both ®eld and laboratory settings has accumulated thatThe Economic Journal, 110 ( January), 212±234. # Royal Economic Society 2000. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.[ 212 ]Ã Funding from the National Science Foundation (Grant SBR-9319835) is gratefully acknowledged. We thank Claudia Keser, Peyton Young, Urs Schweitzer, Reinhard Selten, Rick Wilson, the editor, and two anonymous referees for helpful comments. The usual caveat applies. 1 We use the term`appropriation' to refer to the wide variety of uses or harvesting activities that are made of different types of CPRs. For example, farmers appropriate water from an irrigation system and ®shers appropriate ®sh from a ®shery. 2 The following books represent a summary of these ®ndings:
