Poverty, Political Failure and the Use of Open Access Resources in Developing Countries

This paper begins by distinguishing open-access resources from common-property resources, the use of which is subject to communal rules. In practice, it is suggested that these cases are the outcomes of a spectrum of property rights. The standard economic theory of the use of open-access resources as developed by Western economists is outlined and ways in which it has limited applicability to developing countries are suggested. This theory does not, for example, consider the possibility that incomes in open-access situations may fall to subsistence levels, as appears to be common in developing countries. A model is presented in which the long-run equilibrium involves a subsistence level of income which may be at or near a poverty level. This seems more relevant for developing countries. It is shown that governments in developing economies may be unable to find workable policies that will extricate communities from such a poverty trap. Reasons why governments in developing countries may allow such a situation to occur are discussed. The limitations of using new technologies to increase harvesting productivity and reduce poverty are discussed. Implications of the analysis for the type of aid that developed countries should give to developing countries are specified.