The chapters of this dissertation examine efficiency failures in three areas of applied microeconomics: experimental economics, public finance, and game theory. In each case, we look at ways to resolve these failures to promote the public good. The first chapter, “An Experimental Test of the Pigovian Hypothesis,” looks at two different policies designed to reduce congestion in a common-pool resource (CPR). We present an experiment with training and a simplified decision task and find that subject behavior converges to the Nash prediction over a number of periods. A Pigovian subsidy effectively moves subject behavior to the pre-subsidy social optimum. Finally, we find a significant but non-persistent effect of information provision in moving subjects toward the social optimum. The second chapter, “Apples to Apples to Oranges,” looks at efficiency and equity failures across states resulting from public expenditure. This chapter introduces an extension of the Representative Expenditure System that uses regression methods and both state and metropolitan statistical area (MSA) level data, allowing for comparability of input costs, service requirements, and levels of need. The regression-based results are robust across state- and MSA-level formulations, although state-level approaches overestimate need for larger, less populous states. All regression-based results diverge from previous workload-based approaches. The third chapter, “Evading Nash Traps in Two-Player Simultaneous Games,” looks at efficiency failures in two-player simultaneous games. This chapter presents two new concepts: “détente” and “no-initiative,” in which players consider their own strategies and other-best-responses. We discuss their efficiency and descriptive properties across a set of simultaneous games.

This thesis is about the work of Nordel, an advisory body set up in 1963 by the largest power companies in Denmark, Finland, Norway and Sweden. The purpose of Nordel was to strengthen and consolidate Nordic cooperation in the production and transmission of electrical power. The analysis has been conducted by using Elinor Ostrom’s framework for studying common-pool resources, which is described in her book Governing the Commons: The Evolution of Institutions for Collective Action (1990). The thesis concludes that Nordel reaffirmed the bilateral practises already established by the individual power companies and was circumscribed by national energy policies. Nordel’s main contribution to the Nordic cooperation was to act as a forum for common technical issues and general aims, and as a knowledge-producing organisation.

Self governance has proved to be a suitable instrument for the management of a common pool resource like fisheries. Under self governance, individuals organize themselves for the use of a resource, to deal with problems derived from the free access: overexploitation and low profit levels. Although there is a large amount of research devoted to investigate the common pool resources and self governance, there are two areas that represent a gap in the current research. One, what are the main variables related to likely self governance adoption? Two, how is the potential for self governance related to the economic efficiency of the resource users? Unlike most of previous research that involves ex-post analysis, this is an ex-ante assessment of the potential for self governance for management of a common pool resource: a small-scale fishery located in Mexico. This research hypothesizes a positive relationship between fisher's technical efficiency and the likely adoption of self governance for the management of the fishery. Taking a set of theoretical conditions, this research assesses the fishers' perception on the adoption of self governance. Further, a stochastic frontier analysis is applied to estimate the technical efficiency of each fisher. Finally, a relationship between the potential for self governance with technical efficiency, revenue, and other variables such as education and fisher experience is explored. The results show no significant effect of technical efficiency and revenue on the potential for self governance, as well a weak positive effect of fisher experience on the likelihood for self governance adoption. The findings of this research may be useful to improve the efficiency of the fishing activity and encourage the adoption of self governance in the study site. The method proposed in this research is based on attitudes of the fishers, and it represents a step toward understanding apriori whether self governance would be implementable or not. Thus, as an ex-ante assessment, it is hoped to help predicting individual's behavior to deal with the overexploitation and low income levels derived from the use of a common pool resource.

Management of groundwater as a common pool resource relies heavily on an institutional design that is fitted to the aquifers to be managed and is scaled to provide efficient and effective governance. Texas has committed to a decentralized system of groundwater management through Groundwater Conservation Districts (GCDs) that offers a high level of local control and area-specific adaptability. However, increasing pressures on the state’s groundwater resources coupled with a strong local aversion to outsider interference has resulted in a proliferation of small single-county GCDs that are neither well fitted to the aquifer systems nor sufficiently scaled to be efficient or effective. In recognition of these challenges, the persistent response has been a slow transition towards larger-scale management. Although a full transition to centralization via state control is not likely to be politically feasible, it would also be limited in its effectiveness, recognizing the wide diversity of climate conditions, water use patterns, growth projections, and aquifer characteristics that exist across the state. Regionalization is offered as a policy proposal for an institutional arrangement and scale of groundwater governance that provides a balance between centralization and decentralization, using institutions that are better fitted to the aquifer systems and appropriately scaled to provide sufficient funding and resources. The merits and logic of regionalized groundwater management have been recognized as demonstrated by the establishment of the joint regional-planning process within aquifer-based Groundwater Management Areas (GMAs), using GCD representatives as the de facto regional groundwater planners. However, the new unfunded mandates for which the already underfunded GCDs are now responsible and the extraordinary planning process complexity that has developed may prove to be unworkable. This realization compels consideration of management through regional authorities designed using the ready-made framework of the GMAs and principles gleaned from successful models of regionalization from other states and within Texas. Such regional authorities, if provided with sufficient resources and authority, would respect the logic of fit and scale and would be better equipped to address the current and future groundwater management challenges in Texas. / text

It is recognised by society that freshwater resources play a major role in economic development and in maintaining life supporting ecosystems services. Transboundary river basins cover about 45% of the earth’s land surface and their governance is therefore of critical importance. Transboundary freshwater resources are considered a common-pool resource. Collective action is therefore needed in order to supply both public and private goods from these resources but is yet in short supply. This thesis intends to analyse a complementary framework to the common Integrated Water Resources Management (IWRM) approach with the objective of enhancing investments in collective action to address this dilemma. Results indicate that transboundary water resources management in itself can be identified as a regional public good. The results also indicate that IWRM has been promoted as a standard management concept; often without first having identified and agreed the objectives of the intended multiple uses of water. Outcomes related to IWRM at the transboundary scale are therefore difficult to identify and evidence points towards continued water quality degradation at a global scale and development opportunities not achieved. Two different tools for how to assess the generation of benefits from cooperation are presented in this thesis including an institutional assessment framework adapted to transboundary institutions. Together these steps make up an outcome-driven approach that clarifies the value of water in all management and development stages. Through such an outcome-driven approach, water issues can provide the incentives necessary in order to identify cooperative paths and thus become important factors in negotiations to establish effective regional governance regimes. This would take the broader political, economic and geographical context into consideration thus supporting a process towards more integration of interests between countries.

The goal of this dissertation is to advance the theory of common-pool resources in three different but interrelated ways: (1) Common-pool resources theory has identified a number of factors that play an important role on human groups' ability to engage in successful institutional change. However it is still not clear which are their causal relationships on specific contexts. This study looks at the relationship between two of the aforementioned factors: local leadership and local autonomy. It does so in the context of the decentralization of the governance of protected areas for biodiversity conservation in Costa Rica. (2) Historically, common-pool resources theory has paid limited attention to the interactions between local institutions and higher levels of governance. This study incorporates the analysis of cross-scale institutional linkages into the assessment of decentralization reforms in Costa Rica. (3) To do so it incorporates an analytical approach that allows for systematic and rigorous comparisons of small-to-moderate-sized Ns and is apt at handling multiple-causality outcomes. Looking at these issues in the context of the decentralization of biodiversity governance in Costa Rica is relevant because it is the most biodiverse country per unit of area in the world, and during the last twenty years has experimented with decentralization policies to create locally-based institutions for biodiversity conservation. Among my most relevant findings are: (1) that the presence of local leadership is positively related to institutions ability to gain local autonomy from the central government. (2) However, in the context of a class-based society with a strong urban-rural divide, the emergence of local leadership for conservation in rural settings is likely not able to take place by itself without support from within the bureaucratic structure. (3) More diverse are better than less diverse sets of cross-scale linkages in local institutions' ability to gain and maintain local autonomy overtime. (4) Local autonomy can help local institutions increase their potential for biodiversity conservation as long as there are well-defined institutional arrangements in place. Otherwise, local institutions might find themselves pursuing other agendas that might have an unclear relation with biodiversity conservation.

<p>In an era of 'global' oceans crisis, marine conservationists have issued a resounding call to increase the spatial scale of ocean conservation. This dissertation examines the drivers and implications of recent efforts to scale up ocean conservation in places simultaneously celebrated for their revival of community-based conservation: the Pacific Islands region, the Micronesian sub-region, and the nation of Palau. Toward this end, this research engages and advances critical human geography theory on scalar politics and institutional theory on the governance of common pool resources to address the overarching questions: why and how are state and non-state actors rescaling ocean conservation, and with what social, political, and institutional consequences? These questions are approached empirically through a multi-sited case study that ethnographically tracks institutions, actors, funding, and agendas from the 10th Conference of the Parties to the Convention on Biological Diversity to five Pacific Island nations and territories, revealing the links among macro and micro level processes in diverse political and geographical spaces. </p><p> This research conceptualizes the rescaling of ocean conservation as an integral component of social struggles for empowerment. Results illustrate how state and non-state actors pursue their contextually specific goals by working together to scale up the objects of ocean conservation. The means through which they achieve rescaling include discursive framings, performative acts, and institutional changes. Most significantly, these `scalar practices' have resulted in empowerment of environmental non-governmental organizations and Pacific Island governments within multi-level conservation governance processes; accumulation of international attention and funding at the regional level in Micronesia; and reduced local autonomy for conservation governance in Palau.</p><p> Overall, this work contributes an empirically grounded, theoretically engaged, and policy-relevant analysis of the scalar politics and institutional dynamics that are reshaping the actors, objectives, and institutions of contemporary ocean conservation across multiple levels of governance. Conclusions advance theory on the scalar dimensions of environmental governance by conceptualizing regions as strategically constructed tools of environmental politics; expanding understanding of the form and function of multi-level regimes for the governance of large common pool resources; and advancing constructive theoretical dialogue between critical human geographers and institutional theorists. This work may also inform policy discussions by illuminating complex tradeoffs that result from scalar rearrangements.</p> / Dissertation

In recent decades there has been a push to try and include communities in natural resource conservation initiatives. This thesis uses a multidisciplinary approach and a series of case studies in the Ecuadorian Amazon to look at the role that common property regimes can have in conservation initiatives. Results show that community managed forests can have positive conservation outcomes. Local communities, however, will often integrate into local market economies creating significant tradeoffs between livelihoods, local management decisions and natural resource conservation. Nonetheless, resource scarcity can drive the evolution of local resource management institutions and communities have the potential to accurately monitor changes in natural resources. These results suggest that local communities have the potential to play an important role in conservation practices but that local economic incentives can affect the way in which communities manage their resources.

abstract: This dissertation discusses the Cournot competition and competitions in the exploitation of common pool resources and its extension to the tragedy of the commons. I address these models by using potential games and inquire how these models reflect the real competitions for provisions of environmental resources. The Cournot models are dependent upon how many firms there are so that the resultant Cournot-Nash equilibrium is dependent upon the number of firms in oligopoly. But many studies do not take into account how the resultant Cournot-Nash equilibrium is sensitive to the change of the number of firms. Potential games can find out the outcome when the number of firms changes in addition to providing the "traditional" Cournot-Nash equilibrium when the number of firms is fixed. Hence, I use potential games to fill the gaps that exist in the studies of competitions in oligopoly and common pool resources and extend our knowledge in these topics. In specific, one of the rational conclusions from the Cournot model is that a firm's best policy is to split into separate firms. In real life, we usually witness the other way around; i.e., several firms attempt to merge and enjoy the monopoly profit by restricting the amount of output and raising the price. I aim to solve this conundrum by using potential games. I also clarify, within the Cournot competition model, how regulatory intervention in the management of environmental pollution externalities affects the equilibrium number of polluters. In addition, the tragedy of the commons is the term widely used to describe the overexploitation of open-access common-pool resources. Open-access encourages potential resource users to continue to enter the resource up to the point where rents are exhausted. The resulting level of resource use is higher than is socially optimal, and in extreme cases can lead to the collapse of the resource and the communities that may depend on it. In this paper I use the concept of potential games to evaluate the relation between the cost of resource use and the equilibrium number of resource users in open access regimes. I find that costs of access and costs of production are sufficient to determine the equilibrium number of resource users, and that there is in fact a continuum between Cournot competition and the tragedy of the commons. I note that the various common pool resource management regimes identified in the empirical literature are associated with particular cost structures, and hence that this may be the mechanism that determines the number of resource users accessing the resource. / Dissertation/Thesis / Doctoral Dissertation Applied Mathematics for the Life and Social Sciences 2017

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