Design principles for the efficacy of groups


Jason Collins


September 11, 2013

In Tim Harford’s article contrasting Lin Ostrom and Garrett Hardin’s approaches to the tragedy of the commons, he writes:

She [Ostrom] persevered and secured her PhD after studying the management of fresh water in Los Angeles. In the first half of the 20th century, the city’s water supply had been blighted by competing demands to pump fresh water for drinking and farming. By the 1940s, however, the conflicting parties had begun to resolve their differences. In both her PhD, which she completed in 1965, and subsequent research, Lin showed that such outcomes often came from private individuals or local associations, who came up with their own rules and then lobbied the state to enforce them. In the case of the Los Angeles water producers, they drew up contracts to share their resources and the city’s water supply stabilised.

It was only when Lin saw Hardin lecture that she realised that she had been studying the tragedy of the commons all along. …

In his essay, Hardin explained that there was no way to manage communal property sustainably. The only solution was to obliterate the communal aspect. Either the commons could be nationalised and managed by the state – a Leviathan for the age of environmentalism – or the commons could be privatised, divided up into little parcels and handed out to individual farmers, who would then look after their own land responsibly. …

But Lin Ostrom could see that there must be something wrong with the logic. Her research on managing water in Los Angeles, watching hundreds of different actors hammer out their messy yet functional agreements, provided a powerful counter-example to Hardin. She knew of other examples, too, in which common resources had been managed sustainably without Hardin’s black-or-white solutions.

Ostrom identified eight design principles that allow groups to manage common pool resources sustainably. Without them, we’re closer to Hardin’s conception of the tragedy. These principles are:

  1. Clearly defined boundaries

  2. Congruence between appropriation and provision rules and local conditions (i.e. proportional equivalence between benefits and costs)

  3. Collective-choice arrangements - those affected by the rules can participate in modifying the rules.

  4. Monitoring

  5. Graduated sanctions

  6. Conflict-resolution mechanisms

  7. Minimal recognition of rights to organize

  8. For larger systems: Appropriation, provision, monitoring, enforcement, conflict resolution, and governance activities are organized in multiple layers of nested enterprises.

In the special issue of the Journal of Economic Behavior & Organization, Evolution as a General Theoretical Framework for Economics and Public Policy, Ostrom, together with David Sloan Wilson and Michael Cox, proposed that these principles can be generalised beyond the common pool resource problem. First, where these principles hold, they also provide the ideal social environment for the evolution of group-level adaptations. If you have read any of my earlier posts on the special issue (links below), it comes as no surprise that multilevel selection theory forms a strong part of Wilson, Ostrom and Cox’s evolutionary argument. Second, the principles can be applied to a wider range of groups.

The most interesting application of this argument relates to the first design principle, the need for clearly defined boundaries. When group selection was first framed as a concept, it was seen as competition between groups in the way that an ordinary person might see it; say, different tribes fighting against each other. But this style of group selection ran into problems in that the group boundaries are not as clear as one might think. People move between groups. The victor in war takes the women, children and surviving males into their own group. This lack of clarity was a central plank of many criticisms of this style of group selection.

The conception of group selection labelled as multilevel selection theory averts this problem through adopting a more flexible concept of groups. Individuals take part in many groups, which each group differing by context. For example, a person may have many trading relationships, each being conceptualised as a group. They have family groups. They form coalitions. As such, there can be considered to be clearly defined boundaries for each of these different groups. (For earlier posts discussing how this multilevel selection framing works, see here and here) But when put this way, the group boundaries can appear to be more a question of framing than substance. And given the equivalence of a multilevel selection framework to inclusive fitness, it is possible to ignore the framing of group boundaries and simply consider whether an individual and their relations benefits from their action relative to the broader population.

This equivalence of framing is also apparent in the second design principle. The costs and benefits within and between groups are the core of the multilevel selection calculation, whereas an inclusive fitness framework utilises Hamilton’s rule to balance costs and benefits weighted by relatedness.

Of the other design principles, the presence of monitoring, sanctions and conflict resolution mechanisms create the costs and benefits that induce cooperative, trusting behaviour. Where these principles hold, we might expect social behaviours to be fitness enhancing. Also, when people interact it is easy to frame those social behaviours such that most of the multilevel selection dynamics are at the group level. Simply find those who socially interact and call them a group.

This is the point where I tend to question whether a multilevel selection framing is the best approach. Once the definition of a group drifts from that that is commonly used, it loses simplicity and transparency. It also hides the reason for the group interaction. When someone undertakes a trade, do they consider foremost their standing relative to their particular trading partner, or to a larger population? The evolved psychological mechanisms that lead to the formation of the “group” in which the trade occurs may also be hidden in the multilevel selection framing.

As a result, I can see the alignment between Ostrom’s design principles and the multilevel selection framework. But when the definition of a group is so flexible, I’m not convinced that this is a useful way of examining the problem.

I don’t have much to add on the second claim - that Ostrom’s design principles can be applied to a wider range of groups - so will leave that point for now.

My series of posts on the Journal of Economic Behavior & Organization special issue, Evolution as a General Theoretical Framework for Economics and Public Policy, are as follows:

  1. Social Darwinism is back - a post on one of the popular press articles that accompanied the special issue, a piece by David Sloan Wilson called A good social Darwinism.

  2. Four reasons why evolutionary theory might not add value to economics - a post on David Sloan Wilson and John Gowdy’s article Evolution as a general theoretical framework for economics and public policy

  3. Economic cosmology - The rational egotistical individual - a post on John Gowdy and colleagues’ article Economic cosmology and the evolutionary challenge 

  4. Economic cosmology - The invisible hand - a second post on Economic cosmology and the evolutionary challenge 

  5. Economic cosmology - Equilibrium - a third post on Economic cosmology and the evolutionary challenge

  6. Design principles for the efficacy of groups (this post) - a post on David Sloan Wilson, Elinor Ostrom and Michael E. Cox’s article Generalizing the core design principles for the efficacy of groups