Date Published: February 17, 2017
Publisher: Public Library of Science
Author(s): Raja Rajendra Timilsina, Koji Kotani, Yoshio Kamijo, Cheng-Yi Xia.
Sustainability has become a key issue in managing natural resources together with growing concerns for capitalism, environmental and resource problems. We hypothesize that the ongoing modernization of competitive societies, which we refer to as “capitalism,” affects human nature for utilizing common pool resources, thus compromising sustainability. To test this hypothesis, we design and implement a set of dynamic common pool resource games and experiments in the following two types of Nepalese areas: (i) rural (non-capitalistic) and (ii) urban (capitalistic) areas. We find that a proportion of prosocial individuals in urban areas is lower than that in rural areas, and urban residents deplete resources more quickly than rural residents. The composition of proself and prosocial individuals in a group and the degree of capitalism are crucial in that an increase in prosocial members in a group and the rural dummy positively affect resource sustainability by 65% and 63%, respectively. Overall, this paper shows that when societies move toward more capitalistic environments, the sustainability of common pool resources tends to decrease with the changes in individual preferences, social norms, customs and views to others through human interactions. This result implies that individuals may be losing their coordination abilities for social dilemmas of resource sustainability in capitalistic societies.
Capitalism has become a dominant social regime over the last several decades . Economic theory claims that goods and services are “efficiently” produced, allocated and consumed through competitive markets in capitalism, and this efficient property serves as the main engine of economic growth . However, some of these principles do not appear to function in reality as theory predicts. For instance, intra- and inter-generational allocations of environmental goods and natural resources are claimed to be inefficient under capitalistic conditions as illustrated by climate change trends and the depletion of the world’s forests. Thus, resource sustainability has become a key issue of a growing concern in relation to capitalism.
The field experiments of the CPR game incorporate resource dynamics in such a way that subjects with limited education understand. A group of 4 subjects is formed. Each subject is informed of the group size but not of the identities of the group members. Subjects are also told that the group members would remain the same. The resource stock at the beginning of each period is denoted by xt, where the subscript denotes time periods of t = 1, 2, …, and an initial stock size, x1, of 120 is given. At the beginning of each period t, subject i is asked to determine his/her individual harvest yi,t. The escapement, st, is defined as st=xt-∑j=14yj,t where ∑j=14yj,t is the group harvest at period t. When st ≥ 0, then the individual payoff is πi,t = yi,t. When st < 0, the individual payoff, πi,t, is yi,t=xt4 for simplicity. The escapement, st, is considered to be a remaining stock for each period t and determines the evolution of resource dynamics. The resource stock dynamics are specified as
In this model, the next-period stock xt+1 grows up to a 50% increase in the escapement, and the game continues to the next period when st > 0 (the remaining stock is strictly positive). Otherwise, resource depletion results and the CPR game is terminated.
We report a series of the questionnaire and experimental results with a focus on the rural and urban conditions with 65 and 67 groups of 260 and 268 subjects, respectively. Table 1 presents the summary statistics on the subjects’ socio-demographic information and on the experimental results. For the rural cohort, 38% of the participants are male with an average age of 34.5 years, while the urban cohort includes 58% men with an average age of 24.5 years. This result is attributed to the fact that many young men in the rural areas migrate to the urban areas or even to foreign countries for employment.
This experiment has analyzed resource sustainability in a dynamic setting with respect to the degree of capitalism and social preferences. We find that the proportion of prosocial individuals in the urban areas is lower than that in the rural areas, and urban residents deplete resources more quickly than rural residents. The composition of proself and prosocial individuals in a group and the degree of capitalism (rural vs. urban) are identified as two central factors, such that an increase in prosocial members in a group or the regional change from the urban to the rural improve resource sustainability by approximately 65% and by 63%, respectively. Overall, this paper shows that when societies evolve into more capitalistic environments, the sustainability of common pool resources tends to be lost via changes in individual preferences, social norms, customs and assumptions about others through the ways of human interactions. That is, individuals may be losing their coordination abilities in managing social dilemmas of resource sustainability in capitalistic societies.