«© 2006 William Blomquist ABSTRACT Water resources must be governed before they can be managed, and the crafting of governance institutions is an ...»
In California during the 20th century, water users operated within an institutionally rich environment. One crucial component of that environment was the availability of courts with equity powers, which has already been noted above. Another was California’s tradition of “home rule,” of letting individuals and organizations craft solutions to local problems rather than attempting to develop uniform statewide responses directed from Sacramento. Related to this was a third component, the menu of specialpurpose government agencies that had been established by the California Legislature through enabling legislation—templates existed for the establishment of irrigation districts, municipal water districts, and later, county water districts, which water users and their representatives drew upon frequently to establish public organizations to undertake management endeavors. From this enabling environment, water users crafted new types of governmental organizations to encompass groundwater basins and watersheds, and nongovernmental water associations that crossed jurisdictional boundaries and encompassed numerous organizations as members.
Enumerating the membership of the West Basin Water Association and the Central Basin Water Association, Carl Fossette placed their combined membership at "105 member agencies, including representatives from 27 cities, 9 public water districts, 24 water companies, and 45 industries." (1961: 91) Existing organizations—and the experience of individuals within them—became the building blocks of new organizations. Water users adapted existing practices and institutional arrangements to their needs, as well as developing new arrangements tailored to their circumstances.
Problem-Solving as an Evolutionary Process. Many questions are embedded in any problem-solving process: what do we know, what do we need to learn, how can we find out, how do we communicate, how do we decide, who goes first, how do we make assurances with each other, how do we check each other, and so forth. Human beings may cope by exploring alternatives and taking actions cautiously and incrementally, adding experience to their information base as they proceed. Ideas are confronted with experience. How one's actions affected and were affected by the characteristics of the physical world can be reviewed to see if the outcomes were desirable, and to revise estimates of the physical world. Expectations about others' behavior are confirmed and reinforced, or contradicted and revised. Feedback is obtained from experience and experimentation, through a process that is not "mere" trial and error, but "trial-and-error learning" (Ostrom 1990: 34). People "do what they have learned and then learn what they have done" (Lindblom 1990: 221).
These means of coping with the uncertainties involved in collective problem solving, through the sequential development of institutional arrangements, suggest a pathdependence to institutional development analogous to evolutionary processes (E. Ostrom 1992). Careful consideration of context becomes especially important, as it is vital to know where action is occurring in terms of process as well as time and place.
Abstractions from context can lead to faulty analysis, because differences in context are likely to influence the institutional arrangements established by people engaged in problem-solving processes.
An evolutionary perspective on problem-solving and institutional development implies neither teleological explanations of what has occurred to date nor predictions of convergence to a single form. Notions of intentional problem-solving, experimentation, and learning from search and experience leave prospects for creativity, as well as gradual learning through the accumulation of experience and the continual limited search of the environment. Conceived as an evolutionary process of deliberate choice within constraints, institutional development follows the normal course of economic and political life, in which some behavior is adaptation and "muddling through," but also in which intentional efforts at problem-solving, building on experience and coping with uncertainty and constraints, produce new methods and designs. This appears to be an accurate characterization of what has occurred in several parts of California with respect to the crafting of water institutions.
Self-Interest Rightly Understood. Certain beneficial political effects of the water management systems in California are important to consider. These decision-making processes have required water users to take into account, and attempt to accommodate, one another's interests in order to reach any desired outcome. Water users in the San Gabriel River watershed frequently disagreed during the decades they spent constructing the governance and management systems there. Along the way, they developed a norm of "not walking away from the table" (Fossette 1986).
The decision-making processes and polycentric governance structures employed by the water users called on many individuals to play multiple roles over time, which required them to take each other's interests into account. At various times, an engineer might offer consulting services to a water user, represent that water user in negotiations, testify as an expert witness, serve as a district manager or board member or watermaster, and lobby the California legislature on a particular issue on behalf of all southern California water producers. Similarly, local attorneys at time represented water users and districts and also lobbied the legislature, city mayors and utility directors also served as officers of water users' associations, and so forth. Most of the actively involved individuals at one time or another shifted from consultant to advocate, from advocate to manager or board member, and from principal to agent.
Their multiple links and multiple roles contributed to the participants' understanding of one another's circumstances and of the importance of cooperation and coordination. In this way, the participants heightened what Tocqueville called the sense of "self-interest rightly understood," that is, self-interest that is informed and qualified by recognizing the need to take the interests of others into account. The many roles played by so many of the participants in these cases had beneficial political effects similar to those Tocqueville observed about the jury system, which places ordinary citizens temporarily in the position of magistrate, requires them to learn something about the law, and obliges them to cooperate with a group of their fellow citizens in reaching a decision requiring consensus.
In Democracy in America, Tocqueville described the jury system, participation in associations, and involvement in local government as three "free schools" in which Americans learn the behavioral and attitudinal prerequisites of a self-governing democracy. Since the water users in the successful cases presented here spent most of their careers participating in associations and local government, it is not surprising that they developed the skills of which Tocqueville wrote.
Learning and Entrepreneurship. It is no small accomplishment to craft a polycentric, self-governing system that is well-tailored to problems, takes advantage of specialization and scale, improves the information base for collective decision making, and attains high levels of cooperation and compliance. Such an effort requires individuals to apply skills and knowledge that are not "given" to individuals at the outset of a collective problemsolving process. In Vincent Ostrom's (1991: 243) words, "We can rule out the possibility that a polycentric system of order... will emerge spontaneously. Instead, it is necessary, as Tocqueville suggested, to draw upon a science and art of association in learning how to put polycentric systems of order together."
Entrepreneurship is a vital aspect of collective problem-solving, directed toward achieving complementary combinations of heterogeneous elements of physical, financial, human and social capital, and moving across levels of action. Ideas are not automatically transformed into working innovations, heterogeneous elements of various forms of capital cannot be combined in just any fashion, and not just any outcome will do.
Entrepreneurship involves the development over time of skills in collective problem solving, based on experience in particular situations where time and place specificities apply (Hayek 1945; Lachmann 1978; Elster 1983).
In overcoming some of the difficulties of collective problem-solving situations, a key problem is one of organizing (Ostrom 1990: 39). Individuals who develop entrepreneurial skills learn what institutional resources can be drawn upon in gathering information, developing means of communication, taking and implementing collective decisions, and crafting institutional arrangements to ensure the coordination of expectations and sustainability (see Elster 1983: 78-79). Accordingly, individuals who have developed entrepreneurial skills gain capabilities for diagnosing situations and determining when existing institutional arrangements cannot be adapted to address a particular problem and new ones will have to be crafted The local engineers, public officials, businesspeople, attorneys, and farmers who designed and developed institutional arrangements in southern California succeeded to the extent they have partly because of the advantages of polycentric, self-governing systems in an institutionally-rich environment. They also succeeded because they developed the skills to capitalize on those advantages. The most vulnerable aspect of polycentric, self-governing systems is the ability of people to craft and maintain them in order to capitalize on the advantages they offer. People can only develop the kinds of institutions that will resolve problems and improve conditions if they know what they are doing.
Knowledge of hydrology and engineering can be communicated to and considered by local water users more readily than the detailed knowledge of local physical, economic, political and other conditions can be communicated to and considered by central decision-makers (Hayek 1945). Local water users have more information about the particular characteristics of the resource and of the community or communities dependent on it (Uphoff 1986: 36), and this "knowledge of the particular circumstances of time and place" turns out to be of greatest importance in governing a basin or watershed. The California cases show that expertise and wisdom are not the sole province of central public authority, that innovation in groundwater management is not limited to the public sector nor efficiency to the private sector, that diversity in governance and management systems is not a sign of disorderliness or impending disaster, and that citizens have considerable ability to self-organize and solve complex problems.
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On the other hand… there are a number of locations (in California and elsewhere in the world) where water problems worsen and suitable institutions remain wanting. The success of some cases, problems of others, and failures in many underscore that institutional development is a human enterprise and thus subject to significant limits.
Bounds on Problem Solving Capacity. Viewing human activity as intentional problemsolving refers only to the purpose of behavior, not the outcome. It does not mean that people solve problems automatically, consistently, or optimally. While human beings engaged in processes of institutional development are conceived as purposeful and selfinterested, and intelligent and capable of learning, they are also constrained by limits on their capabilities and limits imposed by the physical world, and are therefore prone to error. The institutional arrangements they create in attempting to solve collective problems have intended and unintended consequences, and often fall short of "optimality" when measured against models in which constraints have been removed or assumed away (Ostrom 1990: 14).
People make their institutions, but they do not make them just as they please. Some constraints are imposed by the physical world. The physical world exhibits limits that individuals apparently cannot change even if they wish, and even if they try (gravity, mortality, and so on). Other aspects of the physical world are subject to change without warning, and without regard to whether the changes are desired by human beings or compatible with their plans (weather, natural disasters, and the like). Human problemsolving involves navigating within a physical world that offers opportunities, obstacles, and uncertainties.