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decades and is frequently invoked as a guide
to renewable resource management (see
Wade, 1987). Although he was not the first
to draw attention to ‘the dilemma of collective
resources’ (Gordon, 1954), Hardin ‘codified
into a social economic theory’ the ‘conven-
tional wisdom. ..that private gains might
hold social and ecological costs’ (Robbins,
2004). Thus has the tragedy of the commons
acquired the status of resource management
parable, and has provided intellectual support
both to calls for resourceprivatizationand
to demands for increasedstatecontrol.
Since the first publication of Hardin’s argu-
ment, however, a substantial body of work by
both natural and social scientists has docu-
mented the remarkable diversity of contem-
porarypropertymanagement arrangements
around the world (Berkes, 1989). This work
demonstrates that successful collective man-
agement regimes cannot accurately be charac-
terized as ‘exceptions’ or pre-modern relics:
collective resource management regimes are
widespread, are not restricted to developing
countries, and can be resilient in the face of
economic and environmental change. This
work has shown that Hardin’s error was to
move too quickly from an initial observation- about the significant tensions between pri-
vate and collective interests – to his conclusion
that collective management must fail. In prac-
tice, ‘the commons’ are not the open-access,
free-for-all regimes that he made them out
to be; rather, what distinguishes common
property from open-access regimes are the
customs, rule systems and enforcement mech-
anisms that condition individual access to and
use of the resource. Furthermore, Hardin’s
conclusion can only be sustained if one
assumes that resource users cannot communi-
cate with each other, share information on the
condition of the resource, or coordinate their
behaviour.
The past few years have seen renewed
theoretical interest in the adaptive capacities,
negotiated rule systems andindigenousenvir-
onmentalknowledgesthat often characterize
common property management regimes.
Given the failure of many ‘top-down’devel-
opmentandconservationinitiatives, these
attributes are increasingly seen as valuable
components of sustainable development
and adaptive management in the face of
environmental change. gb
Suggested reading
Feeny, Berkes, McCay and Acheson (1990);
Ostrom (1999).transaction costs The costs associated with
effecting an economic transaction, either
throughmarket exchange between two or
more legally distinct economic actors, or
internally within a single organization (firm
or, more generally, ‘hierarchy’).
Costs formarket-mediated transactionsmight
include: The cost of gathering information concern-
ing the availability, price and quality of par-
ticularcommodities(goods orservices).
The costs associated with identifying
potential customers.
The cost of determining the reliability
of a supplier or the creditworthiness of a
purchaser.
The costs associated with negotiating
the terms of an exchange, including price,
delivery date and terms of payment (and of
setting these out in the form of an agreed
contract).
The cost of completing a transaction (mak-
ing or collecting payment).Costs will also accompanynon-market transac-
tionswithin a single firm; in other words, the
costs of organizing and coordinating complex,
multi-step production processes in-house.
transport costsassociated with moving
goods between transacting parties have tradi-
tionally received special attention fromeco-
nomic geography in general and have
provided the basis for classical spatialmodels
inlocation theorybut, as the following dis-
cussion shows, other forms of transaction cost
have recently attracted considerable attention
withinindustrial geographyin particular.
Williamson (1975, 1985) is generally cred-
ited with developing a comprehensive analysis
of transaction costs. He sought ‘to achieve a
better understanding of the origins and func-
tions of various market structures – stretching
from elementary work groups to complex
modern corporations’ (1975, pp. 1–2). In-
stead of relying on technological arguments
based on concepts such as indivisibilities or
non-separabilities to explain why two or more
functions might be performed within the same
firm (‘organizational hierarchy’), Williamson
focused on ‘transactions and the costs that
attend completing transactions by one institu-
tional mode rather than another’. He insisted
that it was transactional not technological
considerations that are ‘typically decisive in
determining which mode of organization will
obtain in what circumstances and why’. Most
goods require a number of semi-finished orGregory / The Dictionary of Human Geography 9781405132879_4_T Final Proof page 767 31.3.2009 9:40pm Compositor Name: ARajuTRANSACTION COSTSTRANSACTION COSTS