A common pool resource (CPR) is a shared resource system utilized by a group of people where it is difficult and costly to prevent access. These resources are available to a community, but their limited supply makes them susceptible to overuse. Understanding how CPRs function is fundamental to managing natural and human-made systems. Effective governance determines the long-term viability of many environmental and economic activities globally.
Defining Common Pool Resources
Common pool resources are defined by a unique combination of two economic characteristics: non-excludability and rivalry in consumption. Non-excludability means that it is prohibitively expensive or practically impossible to keep people from accessing or benefiting from the resource. For example, it is difficult to stop a fisherman from casting a net into the open ocean, or to prevent a farmer from drawing water from a shared aquifer.
The second characteristic, rivalry, means that one person’s use subtracts from the quantity or quality available to others. For instance, when one person takes a fish from the sea, there is one fewer fish remaining for the next person. This subtractability distinguishes a CPR from a pure public good, such as national defense, which can be consumed by many people simultaneously without diminishing the supply. This pairing of open access and finite supply creates the inherent tension in resource management.
Identifying Real-World Examples
Examples of common pool resources range from local systems to global assets. Ocean fisheries are a classic example: it is difficult to exclude international vessels, yet every fish caught reduces the population available to others. Similarly, shared groundwater basins (aquifers) are non-excludable to property owners above the basin, but each well pumping water lowers the water table for all neighboring users.
Irrigation systems, especially those created to distribute water from a central source, also function as CPRs. The available water is finite, and one farmer’s excessive use directly reduces the flow reaching farms further down the canal. On a global scale, the atmosphere’s capacity to absorb greenhouse gasses is a CPR. Its capacity is non-excludable, but continued use by one nation reduces the remaining capacity for all others before dangerous climate thresholds are crossed.
The Core Dilemma of Shared Resources
The combination of non-excludability and rivalry leads to a fundamental economic problem: the conflict between individual gain and collective well-being. This dilemma arises because a user receives the full personal benefit of using the resource, but the cost (depletion or degradation) is spread among all users. This creates an incentive for each individual to maximize usage before the resource is exhausted by others.
This logic of individual self-interest results in a collective irrational outcome, often referred to as the “Tragedy of the Commons.” Since no single user can be effectively excluded, and restraint by one individual leaves more for another user to take, the incentive is to rapidly exploit the resource. This mechanism is overuse, where the resource is consumed at a rate that exceeds its ability to regenerate. Without management, this dynamic leads to the degradation or collapse of the shared resource system.
Governing and Sustaining Common Resources
The depletion of common pool resources is not inevitable, as communities often develop sophisticated systems to manage them without relying solely on privatization or centralized government control. Effective self-governance relies on collective action and robust institutional arrangements agreed upon by the users. Successful resource maintenance begins with clearly defining the physical boundaries of the resource and the specific individuals or groups who have the right to use it.
Functional institutions feature rules that restrict the time, place, and technology of resource withdrawal, ensuring these rules fit the local ecological conditions. An effective governance system must include mechanisms for monitoring the resource and user behavior to ensure compliance with the agreed-upon rules. A system of graduated sanctions is typically employed, where first-time rule breakers receive small punishments, with penalties increasing for repeat offenses. Finally, easy and low-cost access to conflict-resolution mechanisms allows users to settle disputes quickly before they escalate.