Failed collectivization and privatization
As an example of Ostrom’s concerns, consider the management of grasslands in the interior of Asia. Scientists have studied satellite images of Mongolia and neighboring areas in China and Russia, where livestock has been feeding on large grassland areas for centuries. Historically, the region was dominated by nomads, who moved their herds on a seasonal basis. In Mongolia, these traditions were largely intact in the mid-1990s, while neighboring areas in China and Russia – with closely similar initial conditions – had been exposed to radically different governance regimes. There, central government imposed state-owned agricultural collectives, where most users settled permanently. As a result, the land was heavily degraded in both China and Russia. In the early 1980s, in an attempt to reverse the degradation, China dissolved the People’s Communes and privatized much of the grassland of Inner Mongolia. Individual households gained ownership of specific plots of land. Again, as in the case of the collectives, this policy encouraged permanent settlement rather than pastoral wandering, with further land degradation as a result. As satellite images clearly reveal, both socialism and privatization are associated with worse long-term outcomes than those observed in traditional group-based governance.