Assumptions and definitions 1 Appropriators as a rational actor

This study is about deliberate human intervention in the coastal environment. A ll human actions ultimately have different levels o f consequences on the quality and quantity o f natural resources, and environmental degradation is one o f the first indications o f unsustainable social and economic systems. Management o f natural resources is thus at the frontline o f the struggle for more sustainable and equitable development o f coastal areas. So as to explore and explain how people can manage coastal resources more effectively, it is necessary to make a set o f assumptions and definitions about the primary actors, as well as the resources that they depend upon.

In this study, it is assumed that individuals are bounded rational actors8. People make intentional rational decisions, that is, they are goal-oriented and adaptive. However, they do sometimes fail and end up with choices that are not rational in substance because o f the limits o f human cognitive and emotional architecture (Jones 1999). In other words, even though individuals try their best when making decisions, a group o f people sometimes have to face the unintended and unwanted consequences o f their actions.

s Bounded rationality has been a key component since the 1950s in public administration and public policy studies and it is defined as ‘ a school o f thought about decision making that developed from dissatisfaction with the “ comprehensively rational” economic and decision theory models o f choice.” Feeny, David, Susan Hanna, and Arthur F. McEvoy. 1996. "Questioning the assumption o f the "tragedy o f the commons" model o f fisheries." Land Economics 72: 187-205.

In any particular resource management situation, those individuals who withdraw resource units from a resource system, also known as appropriators (Plott and Meyer 1975), are assumed to be rational actors. Examples o f appropriators include fishers, herders, and irrigators. Given the complexity o f uncertain situations, their decisions and actions are dependent on perceived costs and benefits, prim arily based on their values and previous information (Ostrom 1990: 33).

2.2.2 Resources

Resource systems are considered stock variables that, under favourable conditions, are capable o f producing a maximum quantity o f a resource without harming the stock itself (for example, fishing ground, groundwater basins, and grazing areas). This assumption underlies the concept o f ‘ maximum sustainable yie ld ’ which determines the lim its o f sustainability in resource use. Resource units are what individuals use from resource systems, such as the tons o f fish harvested from a fishing ground, the cubic meters o f water withdrawn from a groundwater basin or the tons o f fodder consumed by animals from a grazing area (Ostrom 1990: 30).

2.2.3 Institutions

In order to understand how appropriators use and manage natural resources, the concept o f institution is important. In his classic definition, Douglass North (1990) states that institutions are ‘ the rules o f the game in a society or, more inform ally, are the humanly devised constraints that shape human interactions’ ^ . 3). Meanwhile, rules refer to the prescriptions that create authorisations and ‘ rights’ are the product o f ‘ rules’ (Schlager and Ostrom 1992: 250). W hile state legislation is a kind o f institution, institutions can also be

informal: norms are similar to rules but are considered the informal standard among a group of specific individuals. It is important to note that institutions are different from ‘organisations’ which are ‘groups of individuals bound together by some purpose to achieve objectives’ (North 1990: 5).

For the purpose of this study, I use the term “norm” to mean expectations about what others will do. In other words, norms in this study are shared beliefs and shared information that individuals, as rational actors, use to make decisions. This reduces uncertainty in a collective action dilemma as it gives a strong basis for anticipating the choices likely to be made by others.

Institutional theorists and resource management practitioners agree that building institutions that empower local communities is necessary for long-lasting resource management. Previous theoretical studies have given two major explanations for the importance o f institutions in resource management at the community level. First, according to North (1990), institutions reduce uncertainty because they provide structure to management, which shapes the interactions among participants of resource management by specifying who has authority over what so as to eliminate unnecessary negotiations. Second, Oakerson and Walker (1997) argue that institutions clarify people’s actions by giving information on what is permitted and what is prohibited. Furthermore, Nicholson (1993: 4) argues that institutions affect human choice by influencing the availability of information and resources, by shaping incentives, and by establishing the basic rules of social transactions. In short, institutional innovation contributes to resource management by providing more efficient ways of organising management activity.

2.2.4 Property rights

For scholars who have tried to explain how and why community-level natural resource management works, the institution o f property rights is a particularly significant category. Property rights are the rules-in-use that define the range o f privileges that individuals hold to specified goods or services (Libecap 1989). In economic terms, optim ality requires that resource use continues until the marginal benefit o f resource use equals the marginal cost. Costs and benefits include those that are private and external. One important factor in determining this optimal condition is the nature o f the property rights regime for managing the resource (Bromley 1991), because property is ‘ a secure claim on a future benefit stream (Bromley 1992: 11).’ Thus, property rights define who has access, how much they can harvest, who manages, and how rights are transferred (Ostrom 1992: 293).

I f the appropriators do not have secured rights to the resources, they w ill lack incentives to invest in long term resource management because they are not assured o f receiving the benefits (Ostrom 1992). When new management practices for the sustainable use o f resources are introduced, especially when they do not bring immediate benefits, appropriators want to be assured o f some kind o f guarantee o f ownership long enough for them to reap the benefits o f their investment. A property rights regime contributes to sustainable resource use by reducing uncertainty. Owners are guaranteed access to the resource they wish to extract, allowing them to calculate whether the costs o f long-term management are worth the benefits (Ostrom 1992). However, while important, determining property rights alone may not be a sufficient condition to avoid the overexploitation o f a resource. Therefore, some scholars argue that social capital plays a critical role in CBCRM.