Common Pool Resource (CPR)

What Is a Common Pool Resource (CPR)

A common pool resource is a resource that benefits a group of individuals, however which gives decreased benefits to everybody if every individual seeks after their own self-interest. The value of a common pool resource can be diminished through abuse in light of the fact that the supply of the resource isn't unlimited, and utilizing more than can be recharged can bring about scarcity. Abuse of a common pool resource can lead to the tragedy of the commons problem.

Grasping Common Pool Resource (CPR)

Common pool resources (CPR) like woodlands, underground water bowls, prairies, and fisheries are in many cases managed by a combination of government action and market components. In some cases a resource is sufficiently small to be by and large managed by interested parties in a rule of relying on trust; in different cases, significant resources must be set under a neighborhood government agency through and through. A key goal of CPR management is permitting a certain amount of the resource to be utilized during a given period while leaving the principal, as it were, flawless. CPR use is administered by agreements that indicate the physical limits of the resource, parties included, allocations, time limitations, authority for dispute resolution, enforcement means, and so on.

Illustration of a CPR

Assume a fishery can reasonably yield 100,000 pounds of fish yearly — that is, the core population of the fishery every year creates 100,000 pounds. Ten companies consent to harvest 10,000 each. Without any regulation, each company would harvest more than its apportioned quota to sell more fish and gain more profits to the detriment of others. Assuming each company over-harvests by 1,000 pounds, the fishery will be over-harvested by 10,000 pounds, lessening the core fish population and its ability to create a similar level next year, leading to steady depletion. Perceiving that it is in their long-term interest to support the fish population, however, the companies settle on an agreement to stick with their 10,000 quotas and hire an independent [third party](/outsider transaction) to supervise that the agreement is carried out by each.