Understanding Institutional Diversity Ostrom 2005

This is a book by Ostrom outlining her approach to analyzing and designing institutions. She will be assigning it in the class in the Fall. It uses results and evidence from everything from lab work, field work and game theory, and she introduces a sort of syntax as well.

• p.23:

A key assumption made in the analysis of a competitive market is that the outcomes of an exchange are highly excludable, easily divisible and transferable, and internalized by those who participate in the exchange. Markets are predicted to fail  as effective decision mechanisms when they are the only arena available for producing consuming, or allocating a wide variety of goods that do not meet the criteria of excludability, divisibilty, and transferabili5y.  Market failure means that the incentives facing individuals in a situation, where the rules are those of a competitive market but the goods do not have the characteristics of "private goods," are insuffiicent to motivate individuals to produce, allocate, and consume these goods at an optimal level.

• p.24

• p54 The number of times a game will be repeated, and if that number is known, and whether a player can opt out, will affect liklihood of cooperation and defection in a game. This is a theoretical result, and seems like an artifact of the model, but has support in lab studies.

• p54 "For asymmetric social dilemmas...there is no single, simple heuristic...that can be successfully employed to reach the higher joint outcome. This is due to the fact that the first player can simply stay with the status quo, and what the second player would do is irrelevant." My note here was 'don't see it' but I think I do now. I'd be interested in the connection of this to 'crowding out'.

• p55 "rule-governed competition" Deep.

• p67 "resilience is defined as the amount of disruption needed to transform a system from one stability domain to another (Holling 1973, Gunderson and Holling 2001)"

• p74 Empirically supported trust issues in Bulgaria. Could be interested case study for building the rule of law.

p77 Bruno Frey (1994, 1997a) on the external sanctions crowding out reciprocity

• p78 "The game seems to simple for some scholars. 'All one needs to do is create a form of contrat law,' they say..." Who are these 'they' and where are their own words?

• p80 Ostrom teases with the statement that tools for analyzing common-pool resources can be applied to the Internet

• p84 "Jager and Jansen (2003) suggested that the cognitive processes that subject use appear to be important in behavior" Go figure.

• p100 "First generation rational choice theory and related models have proved valuable for predicting human behavior in stable, competitive market settings and in competitive electoral and legislative settings where the issue space is constrained(citations)...[and] learning has taken place"

• p118 "...The reason we can characterize participants as rational egoists in an open, competitive market is because of the institution, not that all of the participants are narrowly selfish"

• p126"When reasoning about deontic relationship, humans tend to hek for violations or cheaters. When reasoning about whether empirical relationship are true, they tend to use a confirmaion strategy." Lots of citations.

• p.131 "In a world of strong external monitoring and sanctioning, cooperation is enforned without any need for internal norms to develop. In a world of no external rules or monitoring, normals can evolve to support cooperation. In an in-between case, a low level of external monitoring dissourages the formation of social norms, while also makng it attractive for some players to deceive and defect, given the low risk of being caught" This is better as a statement of Ostrom's agenda than one of fact. It still seems a bit of a fairy tale, though I'm eager to see more support for it. Central to this will be a good theory of 'crowding out'.

• p131 "..than using the asumptions of a rational egoist to animate the model is the best strategy..." Funny phrasing.

• p131 I wrote in the margin next to mention of 'initial distribution' "How is initial distribution different than history?"

• p131 Myers and Worm 2003 for account of people who want cooperation and don't have the institutional support to make is work.

• Part II gets into the ADICO grammer. I need to look again at the account in ADICO for how/why crowding out happens.

• p209 Scope rules vs choice rules in policy

• 221 a ton of field work on the success, failure and decay of locally govberned common-pool resource management systems.

• p228 margin note "Subractability/excludability of healthcare?"

• p269 "The rules appropriate for allocating water among major branches of an irrigation system, for example, may not be appropriate for allocating water among farmers along a single distributory channel (Yoder 1994). Consequently, among long-enduring self-governed regimes, smaller-sclaee organizations tend to be nested in ever larger organizations. O. Chloe (2004) provides an excellent overview of how nested enterprises have successfully been used to overcome the weakness of relying only on large-scale or small-scale units to govern complex resource systems." design principles are in the last section of chpater nine.