Comparing Forms of Common Property Resource and Collective Goods Organizations Operating Water Markets in the Colorado Lower Arkansas River Basin

Introduction Common property resource organizations, such as mutual irrigation companies, are central to water management in the Arkansas River Basin, and elsewhere around the Western United States. These organizations collectively capture and utilize a resource that individual actors, working independently, could not make available. A mutual ditch company was a cooperative formed by a group of irrigators to provide water for their fields. Like other agricultural cooperatives they were private associations organized to provide services for members. Each member was a stockholder, and each share of stock represented a share of the water supply, expressed in fractions, quantity, or irrigated acreage. (Dunbar 1983: 28) Common property resource organizations are used to cooperatively divert water from the Arkansas River and deliver it to agricultural users who then utilize it to grow crops for production and consumption on the open market. According to Daniel Bromley, Irrigation systems represent the essence of a common property regime. There is a well-defined group whose membership is restricted; an asset to be managed (the physical distribution system); an annual stream of benefits (the water that constitutes a valuable agricultural input) and a need for a group management of both the capital stock and the annual flow (necessary maintenance of the system and a process for allocating the water among members of the group of irrigators), to make sure that the system continues to yield benefits to the group. (Bromley 1992: 11-12) What sociological attributes characterize the form of an enduring social organization that empowers individually rational, self-interested actors to provide themselves with a common property resource and collective good? To address this question, the authors advance an assembly of conceptual benchmarks hypothesized to be critical to successful management of common property and collective goods resources. These variables are employed as dimensions against which to assess two forms of common property resource and collective goods organizations: 1) a new form represented by the Arkansas River Water Bank Pilot Program; and 2) a traditional mutual company form represented by the Lower Arkansas Water Management Association (LAWMA). Common Property Resource and Collective Goods Resource Tradition Forty years after the publication of Garret Hardin's "tragedy of the commons", which galvanized an extended conversation regarding the merits of state and private control over common property resource and collective goods resources, a tradition of thought has emerged that has grappled with the attributes of long-enduring organizations that can sustain common property resource and collective goods resources (Sick 2008: 94; Le 2008; Agrawal and Gibson 1999; McCay and Acheson 1987; Ostrom 1990, 1999, 2003; Ostrom and Burger 1999) Ostrom and Ostrom (2004) summarized this tradition in institutional economics, political science, and sociology. This analysis centers on the distinction between private goods, common property goods, and collective goods. Private goods are defined as those that yield returns that can be captured by the investor who produces them (Freeman 1992; Hanna, Folke 1996). Private goods are characterized by high rivalness and high excludability. High rivalness means that a good consumed by one actor is not available to any other except at the discretion of the investor. The concept of rivalness denotes the extent to which a good can be used by one and still be available for use by another. Excludability means that the investor can, at low cost, prevent consumption of the good by any unwanted other. Collective goods have the opposite attributes--zero rivalness (an example would be a flood control project wherein the enjoyment of the benefits by any given investor does not diminish equal enjoyment by any other). …