From anilg@iimahd.ernet.in Sat Oct 18 11:55:06 1997 Received: from mx4.u.washington.edu (mx4.u.washington.edu [140.142.33.5]) by lists.u.washington.edu (8.8.4+UW97.07/8.8.4+UW97.05) with ESMTP id LAA43278 for ; Sat, 18 Oct 1997 11:55:05 -0700 Received: from stdwww.iimahd.ernet.in (root@stdwww.iimahd.ernet.in [202.41.76.247]) by mx4.u.washington.edu (8.8.4+UW97.07/8.8.4+UW97.09) with SMTP id LAA22942 for ; Sat, 18 Oct 1997 11:54:44 -0700 Received: from iimahd.iimahd (iimahd [202.41.76.254]) by stdwww.iimahd.ernet.in (8.6.12/8.6.9) with SMTP id AAA09569 for ; Sun, 19 Oct 1997 00:01:29 +0500 Received: from anilg.iimahd by iimahd.iimahd (4.1/SMI-4.0) id AA03679; Sun, 19 Oct 97 00:22:25+050 Date: Sun, 19 Oct 97 00:22:25+050 From: anilg@iimahd.ernet.in (Prof Anil K Gupta) To: indknow@u.washington.edu Subject: revised abstract on process theory of indgenous institutions: Pl ignore earlier abstract Message-Id: I am posting revised abstract for wider comments and suggestions. The earlier draft had too many spelling mistakes. I am sorry about that. We have found very few references to the process of rule making reference in literature and thus request colleagues to send us references as well as reprints of the papers that highlight different ways of enacting, monitoring and enforcing rules, particularly in indigenous ecological institutions. I think it will be nice if we could discuss for next few weeks, specific instances of indigenous institutions and the way rules are evolved for conserving diversity, using other natural resources, managing quarantine in disease affected animals, management of breeding bulls and rams as common property etc., anil k gupta fax 91 79 6427896 anilg@iimahd.ernet.in Professor Indian Institute of Management Ahmedabad 380015 The process of rule making: The struggle between `means' and `ends' in institution building or Does it matter who cooks the dish? The recipe versus reflective process theory of institutions > Abstract > > Riya Sinha, Srinivas, Kirit Patel, Vijaya Sherrychand, Muralikrishnan and Anil K Gupta Does it matter whether a rule for managing common properties is evolved through different processes? Can a dish have the same flavour, no matter who cooks it and how? This paper raises issues about the process theory of institutions. This aspect gets neglected compared to the structure base theory in our anxiety to develop generalized frameworks for analyzing institu- tions. Traditionally, different cultures did stress the impor- tance of various pathways to reach the same goal. However, despite increasing appreciation for cultural pluralism in design and implementation of institutions, the literature is not as eloquent on the process of rule making as on rules per se. A database of seventy one indigenous institutions on common prop- erty resources has been developed at SRISTI in collaboration with IIMA and other members of Honey Bee Network. We draw upon this database to show how institutional pathways for sustainability could vary significantly depending upon the process through which different rules are evolved. We acknowledge the limitation of the data which is not as rich as one would wish on the process aspects of rule making. The paper finally synthesizes the in- sights from a variety of contingency rules evolved to generate cultural and ecological adaptation of these institutions across different resource endowments. The need for building upon local ecological knowledge in the study of institutions has been emphasized by several researchers( Gerlach and Palmer, 1981, Gupta, 1992, McKay and Acheson, ). Similarly the importance of blending sacred and profane in the design of institutions has been noted though not to the same extent. But what has been left under-explored is the process by which rules for boundary and resource allocation evolve and accordingly the rules for conflict resolution evolve. We contend that this neglect partly also explains the lack of patience among practitioners as well as theory builders with more participative discourse in which local communities and individual assert not just rights of physical participation but also intellectual par- ticpation-- an issue persistently raised by Honey Bee network of grassroots innovations for last eight years. How else one ex- plains the irony that people are considered good enough for building- CPR institutions which work for centuries but not good enough for critiquing theories about their institutions. They could not do so unless discourse taken place in vernacular lan- gauge. The connection between language and culture is similar to the one between words and grammar and technologies and institu- tions. The technologies have been considered like words and the institutions like grammar( Gupta 1992). Let us explain this with the help of three frameworks, ( A ) ex ante and ex poste transaction costs, (b) socio-ecological para- digm for adjustment with risks, and (c) playful portfolio of inter-locked, multi market, multi level or multi bureaucratic structures( Gupta, 1985, Ostrom, Feeny and Picht, 1988:460) and multi-actor choices for dealing with public, private and CPR institutions. A: Transaction Costs Framework: Three propositions can be made about the way TC theory applies to evolution of rule making process, (a) Some of the ex ante transaction costs may be invers- ly related to ex poste transaction costs ( Gupta and Prakash, 1992). For instance, if time and resource spent on negotiation are higher, the costs of enforcement may come down because most of the members of the community may have internalized the logic of why rules have been framed in the first place; (b) if arena of negotiation is more open and inclusive, the cost of monitoring may come down. Many times due to penchant for multi tier institu- tional structures, the arena of negotiation is severely restrict- ed. The result is that lots of people involved in compliance of rules do not know the whole process that went into evolving the rules. Once the arena is wider and more inclusive, the logic through which rules were evolved is known to larger number of people and thus monitoring costs may go down; (c) if negotiations have been particularly segmented with special emphasis on incorpo- rating naughty boys of girls, the cost of redrawing the contract or rules may come down. The old saying of making the naughty boy( girl) the monitor may have a ring of truth around it. Not every one has the same propensity to violate the rules and create chaos. If the potential violators are allowed responsibility during the process of negotiation, as and when new rules have to be drawn, the process involves less road blocks because the blockers may become the facilitators. B: Socio-Ecological Paradigm The eco-institutional framework ( Gupta,1985, 1992, 1994, 1995, 1996) suggests that interface between access, assurance, ability and attitudes of members of an institution with ecological endow- ments, technology, institutions and culture provide a way of looking at the design possibilities more comprehensively. Howev- er, the limitation was that one could not incorporate the prin- ciple of `sequential synergisms' ( Gupta, 1981). That is which factor and rule is incorporated in what sequence could make substantial difference to the outcome of an institutional dilem- ma. Those who practice cooking would vouschafe that same spices and ingredients added in different sequence may generate differ- ent flavours. Why then have we neglected this issue so much in the discussion of rule making process? C: Playful Portfolios of Multi-level, multi market and multi- actor choices The households in particularly marginal environments derive their survival need from various resource markets over space and time is well known. What is less well recognized that one can not analyze the validity or otherwise of any choice of various actors in one resource market, or at one level, or in one institutional regime ( private, markets, or public) without reference to simi- lar choices in other resource markets, levels and institutional trade offs. But in day to day life, such an analysis will seem highly complex to an analyst. But ask a person inter-locked in a web of kinship and ethnic relationships with all kind of recip- rocities and obligations, there is not another way of looking at the world except through the prism of portfolio of interests, involvements and incentives. Playful aspect of this portfolio is drawn from an insight ( Richards,1987, Gupta, 1990) that people deal with stress or conflict not just by manifesting, enduring, managing and transforming it ( FAO, FTPP, 1996:51) but also by laughing about it. Much of the earlier work of senior author ( Gupta, 1981, 1983) suffered from this inadequacy i.e. it was full of pathos while describing and thus analyzing the survival op- tions of poor people in high risk environments such as dry re- gions. But then the light dawned and it was realized that creativity of knowledge rich and economically poor people lies in not just struggling with stress but also laughing about it, singing about it and some times making it into riddles. The process of rule making thus we submit is consistent with what I call Godel's theorem of institutions. Godel was a famous mathematician who demonstrated that at least one assumption had to be made outside the framework of any set of propositions to be proved. One could not formulate a framework and prove all the assumptions by making reference to that framework only. The Godel theorem of institutions could thus be formulated by suggesting that rule making process and structure of rules make sense only in the living world and context of chaos ( natural, spontaneous, or deliberately designed and 'institutionalized') and playful manner of oscillation between order and chaos across fuzzy boun- daries. This paper provides new metaphors for looking at old data about institutions and thus helps in opening new furrows in understand- ing of indigenous institutions so that the lessons of the same could be grafted in the new institutions. After all, just as a good artisan does not blame his/her tools, we do not think that institution designers have any reason to complain about the lack of building materials ( the design principles, Ostrom 1986, Gerlach and Palmer, 1981, North, 1986), architectural designs ( Reidl, 1983?), binding material( ethical and cultural perceptions and belief systems) etc. After all a ship does not lose its way in a dark night just like that. It is either the weakness of taxonomy that deprives us from interpreting the diversity in indigenous designs ( the kind of waves in the sea) or our weak astronomy such that we do not know the pointer stars or our compass- is badly calibrated. In either case, we need to reconfigure our frameworks for analys- ing institutions. In the absence of process model, rules by themselves become more important and the process through which these have been derived and legitimized less so. The play of power is downplayed, just as the role of language and ethics is. A sufi tale may help rest the case for process theory of institutions- : A camel was asked mid way on the hill, " which way do you want to go?" The camel replied,"depends upon how much is the load". Another younger camel kid standing besides commented, Well even if the load issue is resolved, much may also depend also on who accompanies on the trip. .