Organizational Democracy

Elinor Ostrom was awarded the Nobel Prize in Economics for “her analysis of economic governance, especially the commons“. In her paper “Self-Governance and Forest Resources” she identifies when organizations should be governed as common pool resources, and what the governance principles are. The same applies to an organization… it is the resource.

When organizations should be governed as common pool resources, these are the “attributes of the resource:

1. Feasible improvement: The resource is not at a point of deterioration such that it is useless to organise or so underutilised that little advantage results from organising.
2. Indicators: Reliable and valid information about the general condition of the resource is available at reasonable costs.
3. Predictability: The availability of resource units is relatively predictable.
4. Spatial extent: The resource is sufficiently small, given the transportation and communication technology in use, that users can develop accurate knowledge of external boundaries and internal microenvironments.”

These are the governance “design principles illustrated by long-enduring common-pool resource institutions:

1. Clearly defined boundaries. Individuals or households with rights to withdraw resource units from the common-pool resource and the boundaries of the common-pool resource itself are clearly defined.
2. Congruence.
   1. The distribution of benefits from appropriation rules is roughly proportionate to the costs imposed by provision rules.
   2. Appropriation rules restricting time, place, technology and/or quantity of resource units are related to local conditions.
3. Collective-choice arrangements. Most individuals affected by operational rules can participate in modifying operational rules.
4. Monitoring. Monitors, who actively audit common-pool resource conditions and user behaviour, are accountable to the users and/or are the users themselves.
5. Graduated sanctions. Users who violate operational rules are likely to receive graduated sanctions (depending on the seriousness and context of the offence) from other users, from officials accountable to these users, or from both.
6. Conflict-resolution mechanisms. Users and their officials have rapid access to low-cost, local arenas to resolve conflict among users or between users and officials.
7. Minimal recognition of rights to organise. The rights of users to devise their own institutions are not challenged by external governmental authorities.

For common-pool resources that are part of larger systems:

When companies have these principles at work, then I’m very satisfied. More importantly, the people who work there are too.

The Code of Ur-Nammu has a preface that tells how the people came to be united. It tells its core principles “of equity and truth…. equity in the land; he banished malediction, violence and strife” and sets measurements.

It also says that the measurements shall not define the man.

“The orphan was not delivered up to the rich man; the widow was not delivered up to the mighty man; the man of one shekel was not delivered up to the man of one mina.”

The value of a person is separate from the value of their property. This is equity.