December 18, 2020

Lunar Resource Management: Applying Public Choice Theory

In 2020, Open Lunar kicked off a small working group looking at the application of public choice theory and political economy scholarship to resource management in the lunar context. This post captures some initial reflections and insights, but the work will be ongoing and we welcome suggestions and recommendations. 

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Jessy Kate Schingler
Open Lunar library
Lunar Resource Management: Applying Public Choice Theory
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In 2020, Open Lunar kicked off a small working group looking at the application of public choice theory and political economy scholarship to resource management in the lunar context. This post captures some initial reflections and insights, but the work will be ongoing and we welcome suggestions and recommendations. 

Whether space as whole is considered as a commons or not, specific resource types and systems have inherent qualities that make them more or less well suited to private, public, commons or club good management. The legal definition of “commons” is also different from the economic definition, and the physical features of a “common pool resource” in economics are not a matter of sentimentality or decree, but observable characteristics of a resource system. 

Authors such as Weeden and Chow and Shackleford have contemplated the application of Ostrom’s principles for governing the commons to problems in the near Earth environment such as orbital and frequency management, debris mitigation, weaponization, sustainability and situational awareness. 

But as we start to see increased activity in the lunar context, we can extend these applications of Ostrom’s principles to the variety of different resources present on the Moon. Doing so provides one way to explore the design space for future resource management regimes in the distinct context of outer space. 

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Starting with the goods matrix framework, we positioned different resources (natural and constructed) according to their features. Contained here is an updated version of the lunar goods matrix originally published at LEAG in 2019

It’s important to note when reading the goods matrix that the type of good must be differentiated from the management regime itself. The good type has implications for effective management approaches, but does not dictate it unilaterally.  

In general, placement of a resource on the goods matrix involves a complex set of considerations across physical features, technology, and law. One of the most sweeping considerations when applying the goods matrix to the lunar context are the effects of the open access provisions of the Outer Space Treaty (Articles I and XII), which severely limit the excludability axis from a legal standpoint. However, the physical features of a good may well support excludability. How we reconcile this will be an interesting point for governance and will naturally lead to different challenges than naturally excludable resources. One way to think about this is that the excludable goods get “shifted” into their non-excludable counterparts: private goods into commons management and toll goods into public goods. 

Rivalrousness and subtractability may lead to scarcity and can be a source of contention. But the extent to which this shows up as a dominant feature of a resource system will also be a function of activity and knowledge. Which means that appropriate management approaches might change over time as knowledge and activity grow. Knowledge may lead to increased awareness of scarcity or abundance. More activity may lead to greater clarity of demand and needs, but also a wider diversity of stakeholder interests. 

The complex interplay of design, technology and implementation raises a number of interesting questions about different goods:

  • Communication networks: frequencies are not naturally excludable but communication networks will be. Depending on their design (bandwidth or coverage), and relative demand, they may be more or less rivalrous in their use, and tend towards toll good or private management approaches. 
  • Roads: early roads are unlikely to be built with features of physical excludability such as access control. A one “lane” road might be the most likely early implementation for cost and complexity reasons, but is significantly more rivalrous in its use. A simple change to a wider design might relax contention in important ways, even removing the need for coordination altogether until much later surface activity. 
  • Landing pad: a small landing pad with room for one spacecraft is rivalrous, but is it practically excludable? How would exclusion be enforced? Early on there may be no practical way to physically control access, leading to consideration of management approaches that incentivize coordination.
  • Geological Features and Deposits: if one of these features is used, extracted or occupied, it is not available for use by others, and they do not function as a system; therefore they are characterized as private goods. This does not mean they have to be managed that way however, and as we have seen the OST introduces a quality of non-excludability, moving private goods “up” in the goods matrix and suggesting that management in the lunar context might well fall into the commons domain.  

Given that none of these systems exist yet, the above examples show how different design decisions might inform where these resources fit on the goods matrix and therefore what kind of management they are conducive to. 

Just because something has characteristics of a CPR doesn’t necessarily mean it is well suited to a commons management regime. Ostrom and her colleagues developed the Social-Ecological-Systems framework to tease out the key determinants of conduciveness to self governance. Beginning in 2021, the group will use the SES framework to explore a more nuanced analysis of common pool resources in the lunar context and their conduciveness to commons management. 

As many have rightfully pointed out, we have almost zero practical experience in these environments today, and it is important that we don’t stifle activity or innovation through pre-emptive regulation. But this work can not only inform the design of effective management approaches, it can also help clarify the moment where a management regime is needed, and how to strategically build up infrastructure and capabilities that will best serve cooperative sustained presence. 

For other applications of political economy and public choice, you may enjoy reading our Introduction to Polycentricity and this short blog about Polycentricity on the Moon

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