Prosocial Design Princples

Elinor Ostrom's Nobel Prize-winning work demonstrated that ordinary people are capable of creating rules and institutions that allow for the sustainable and equitable management of shared resources, contrary to previous economic theories that advocated for either government control or privatization.

Elinor Ostrom developed eight core design principles for the effective management of common-pool resources (CPRs). They are presented in her book "Governing the Commons" (1990). 

1. Clearly defined boundaries: The identity of the group and the boundaries of the shared resource are clearly delineated.

2. Proportional equivalence between benefits and costs: Members of the group must negotiate a system that rewards members for their contributions. High status or other disproportionate benefits must be earned.

3. Collective-choice arrangements: Group members must be able to create at least some of their own rules and make their own decisions by consensus.

4. Monitoring: Managing a commons is inherently vulnerable to free-riding and active exploitation. Unless these undermining strategies can be detected at a relatively low cost by norm-abiding members of the group, the tragedy of the commons will occur.

5. Graduated sanctions: Transgressions need to be punished, but with a system that allows for human error and does not immediately resort to the harshest punishments.

6. Conflict resolution mechanisms: Conflicts among group members need to be resolved through fast and empathetic conflict resolution mechanisms.

7. Minimal recognition of rights to organize: Groups must have the authority to conduct their own affairs. Externally imposed rules are unlikely to be adapted to local circumstances and violate principle 3.

8. For groups that are part of larger social systems, there must be appropriate coordination among relevant groups: Every sphere of activity has an optimal scale. Large scale governance requires finding the optimal scale for each sphere of activity and appropriately coordinating the activities, a concept called polycentric governance.

These principles were derived from Ostrom's extensive empirical studies of common-pool resource management and have been found to be well-supported in subsequent research. They provide a framework for understanding and implementing effective collective management of shared resources.