Wednesday, February 16, 2005

Commons Paper

An interesting paper:
An Economic Theory of Infrastructure and Sustainable Infrastructure Commons

Loyola University of Chicago, Law School

The open access (commons) vs. private control debate is raging. It takes place in a number of fields, including the intellectual property and cyberlaw literatures, as well as broader public debates concerning propertization, privatization, deregulation, and commercialization of such diverse things as communications networks, government services, national forests and scientific research. On the private control side, there is robust economic theory in support of the market mechanism with minimal government regulation. By contrast, on the open access side, there is a frequent call for protecting the "commons," but the theoretical support for this prescriptive call is underdeveloped from an economics perspective. In fact, many that oppose propertization, privatization, deregulation, and commercialization view economics (the discipline) with sincere suspicion and doubt.

In this article, I embrace economics and develop a theory of infrastructure that better explains why, for this particular class of important resources, there are strong economic arguments for managing and sustaining the resources as commons. The approach taken differs from conventional analyses in that it focuses extensively on demand-side considerations and fully explores how infrastructure resources generate value for consumers.

The key insights from this analysis are that infrastructure resources generate value as inputs into a wide range of productive processes and that the outputs from these processes are often public goods and nonmarket goods that generate positive externalities that benefit society as a whole. Managing such resources as a commons is socially desirable when doing so facilitates these downstream activities.
Stuart Buck


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