Law Commons^™

Mongolia: Avoiding Tragedy In The World's Largest Commons, Robert D. Cooter

Robert Cooter

In Mongolia 300,000 nomadic people herd 25 million animals over an unfenced area twice the size of France. Current economic theories assert that efficiency requires privatizing land until the savings from reduced congestion equal the costs of exclusion. However, the fundamental tradeoff in Mongolia is different. In Mongolia, privatization solves the problem of congestion at the cost of aggravating the problem of spreading risk. Assigning exclusive use-rights over particular pastures to families solves the problem of congestion among herds and increases the transaction costs of moving the herds across climatic zones in response to inclement weather. Thus efficiency requires privatizing …