In and out of the Commons

Local self-governance institutions, which emerge through a slow trial and error process, can solve common property resource problems. Elinor Ostrom, the 2009 Nobel Prize winner in economics, suggests in her work that the presence of local leaders is a prerequisite for the successful solution of commons problems. We suggest here that such leaders are similar to entrepreneurs in the private market place and that the literature on private entrepreneurship can help illuminate the motives and roles of entrepreneurs in the emergence of local self-governance institutions. We combine the literature on private entrepreneurship with the literature on extractive rent seeking to illustrate potential motives for local self-governance entrepreneurs. We illustrate our theory using the example of a bike-sharing program at Utah State University that was started by a student entrepreneur who was motivated by the private rent extraction potential of the program.

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