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Co-Production, Polycentricity, and Value Heterogeneity: The Ostroms’ Public Choice Institutionalism Revisited

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  • ALIGICA, PAUL DRAGOS
  • TARKO, VLAD

Abstract

Revisiting the theory of institutional hybridity and diversity developed by Vincent and Elinor Ostrom to cope with the challenge of the “neither states nor markets” institutional domain, this article reconstructs the Ostromian system along the “value heterogeneity–co-production–polycentricity” axis. It articulates the elements of a theory of value heterogeneity and of the fuzzy boundaries between private and public. It rebuilds the model of co-production, clarifying the ambiguity surrounding a key technical public choice theoretical assumption, and it demonstrates (a) why it should not be confused with the Alchian-Demsetz team production model and (b) how co-production engenders a type of market failure that has been neglected so far. In light of this analysis, the article reconsiders polycentricity, the capstone of the Ostromian system, explaining why polycentricity may be seen as a solution both to this co-production market failure problem and to the problems of social choice in conditions of deep heterogeneity. It also discusses further normative corollaries.

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  • Aligica, Paul Dragos & Tarko, Vlad, 2013. "Co-Production, Polycentricity, and Value Heterogeneity: The Ostroms’ Public Choice Institutionalism Revisited," American Political Science Review, Cambridge University Press, vol. 107(4), pages 726-741, November.
    • Handle: RePEc:cup:apsrev:v:107:y:2013:i:04:p:726-741_00
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    1. Peter J. Boettke & Christopher J. Coyne & Peter T. Leeson, 2015. "Institutional stickiness and the New Development Economics," Chapters, in: Laura E. Grube & Virgil Henry Storr (ed.), Culture and Economic Action, chapter 6, pages 123-146, Edward Elgar Publishing.
    2. Leeson, Peter T., 2011. "Government, clubs, and constitutions," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 301-308.
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    1. Faruk ÜLGEN, 2022. "Renewal of Public Action: Co-Production and Financial Regulation," CIRIEC Studies Series, in: Philippe BANCE & Marie-J. BOUCHARD & Dorothea GREILING & CIRIEC (ed.), New perspectives in the co-production of public policies, public services and common goods, volume 3, chapter 9, pages 181-205, CIRIEC - Université de Liège.
    2. Safner, Ryan, 2016. "Institutional entrepreneurship, wikipedia, and the opportunity of the commons," Journal of Institutional Economics, Cambridge University Press, vol. 12(4), pages 743-771, December.
    3. Edward McPhail & Vlad Tarko, 2017. "The evolution of governance structures in a polycentric system," Chapters, in: Morris Altman (ed.), Handbook of Behavioural Economics and Smart Decision-Making, chapter 16, pages 290-314, Edward Elgar Publishing.
    4. Skarbek, Emily C., 2016. "Aid, ethics, and the Samaritan's dilemma: strategic courage in constitutional entrepreneurship," Journal of Institutional Economics, Cambridge University Press, vol. 12(2), pages 371-393, June.
    5. Deslatte, Aaron & Scott, Tyler A. & Carter, David P., 2019. "Specialized governance and regional land-use outcomes: A spatial analysis of Florida community development districts," Land Use Policy, Elsevier, vol. 83(C), pages 227-239.
    6. Faruk Ülgen, 2021. "Public good, collective action and financial regulation," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(1), pages 147-167, March.
    7. Lorenzini, Sara & von Jacobi, Nadia, 2024. "Whose forest? A two-level collective action perspective on struggles to reach polycentric governance," Forest Policy and Economics, Elsevier, vol. 158(C).
    8. Jordan K. Lofthouse & Alexander Schaefer, 2025. "Expert knowledge and the administrative state," Public Choice, Springer, vol. 202(3), pages 433-454, March.
    9. Ilia Murtazashvili & Veeshan Rayamajhee & Keith Taylor, 2023. "The Tragedy of the Nurdles: Governing Global Externalities," Sustainability, MDPI, vol. 15(9), pages 1-15, April.
    10. Laura Albareda & Alejo Jose G. Sison, 2020. "Commons Organizing: Embedding Common Good and Institutions for Collective Action. Insights from Ethics and Economics," Journal of Business Ethics, Springer, vol. 166(4), pages 727-743, November.
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    12. Ilia Murtazashvili & Ennio E. Piano, 2019. "Governance of shale gas development: Insights from the Bloomington school of institutional analysis," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(2), pages 159-179, June.
    13. Paul Dragos Aligica & Vlad Tarko, 2014. "Institutional Resilience and Economic Systems: Lessons from Elinor Ostrom’s Work," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 56(1), pages 52-76, March.
    14. de Wit, Fronika & Mourato, João, 2022. "Governing the diverse forest: Polycentric climate governance in the Amazon," World Development, Elsevier, vol. 157(C).
    15. Ryan Safner, 2023. "Honor among thieves: how nineteenth century American pirate publishers simulated copyright protection," Economics of Governance, Springer, vol. 24(1), pages 119-141, March.
    16. Peter Boettke & Jayme Lemke & Liya Palagashvili, 2015. "Polycentricity, Self-governance, and the Art & Science of Association," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(3), pages 311-335, September.
    17. Cristina Bicchieri, 2002. "Covenants without Swords," Rationality and Society, , vol. 14(2), pages 192-228, May.
    18. Skarbek, David, 2016. "Covenants without the Sword? Comparing Prison Self-Governance Globally," American Political Science Review, Cambridge University Press, vol. 110(4), pages 845-862, November.
    19. Vlad Tarko, 2015. "The role of ideas in political economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(1), pages 17-39, March.
    20. Manuel Riemer & Randy Sa’d & Tim Posselt & Pourya Salehi & David Corbett & Peter Jones & Antony Upward & Exmond DeCruz & Bill Baue & Asad Asadzadeh & Simone Sandholz & Theo Kötter, 2025. "Systemic Management Practices—Enabling Local Governments to Adapt in Response to Complexity," World, MDPI, vol. 6(2), pages 1-25, June.
    21. Nick Cowen & Eric Schliesser, 2024. "Novel externalities," Public Choice, Springer, vol. 201(3), pages 557-578, December.
    22. Dolejší, David, 2018. "Coproduction of property rights: The management of watercourses in pre-modern Bohemia," International Review of Law and Economics, Elsevier, vol. 53(C), pages 50-59.

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