Common Pool Resource

Posted in Finance, Accounting and Economics Terms, Total Reads: 340

Definition: Common Pool Resource

The term common-pool resource is a specific type of good, and can be a natural or human-made resource system, whose characteristics makes it more expensive, but not impossible, to exclude potential recipients from obtaining benefits from its use. Unlike public goods, common pool resources face problems of crowding or overuse, because the supply of resource is limited.

According to the Common Pool Resource Theory, when a group of people are dependent on a resource that everybody utilizes but no single person has the ownership of, and where one person's use can effect another person's ability to utilize the resource, the population either fails to provide the resource, over-consumes it or fails to replenish it, or they together construct an institution for taking and managing collective action.

Abusive use of a common pool resource may lead to tragedy of the commons issue, where individuals work for their own self-interests and not for the long term interests of the group.

Most of the CPR work till date has been done in the areas of wildlife, irrigation systems, forests, grazing systems agriculture, fisheries, land tenure and use, water resources.


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