In my previous CommonBound conference blog entry I described the workshop I attended with Marjorie Kelly and Janelle Orsi. I wanted to also write about their idea of applying Elinor Ostrom‘s “design principles” of stable local common pool resource management (CPR) to the governance of co-ops. Ostrom won a Nobel prize in 2009 for economics. Kelly and Orsi gave a handout on her principles, and how these principles can apply to co-ops. I’ve taken directly from the handout below. CPR is about common resources, therefore, the concepts don’t translate directly to worker co-ops, but still offer interesting possibilities for governance design. Workers as stakeholders correlate in this instance as “resource appropriators” in an enterprise. In bold font is the principle from Ostrom, also found on Ostrom’s Wikipedia page. Following each principle is a suggested application to co-ops from Kelly and Orsi.

1. Clearly defined boundaries (effective exclusion of external un-entitled parties). How can a worker co-op clearly define who is a member and how to become a member? What should be the barriers to entry? How can members resign or be expelled?

2. Rule regarding the appropriation and provision of common resources that are adapted to local conditions. Adopt rules about how much people are entitled to work and about ideal working conditions? Adopt rules that prevent some workers from capitalizing off the labor of others? How will this vary based on local conditions, i.e., the type of business?

3. Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process. How can worker co-ops enable all workers to participate in the decision-making process? Collective governance? Distributed governance structures? Holacracy?

4. Effective monitoring by monitors who are part of or accountable to the appropriators. Designate someone who makes sure that the rules are being followed, that the co-op is in good health, and that the values of the co-op are being upheld?

5. A scale of graduated sanctions for resource appropriators who violate community rules. What could sanctions look like in the context of a worker co-op? Cutting hours? Reducing decision-making power temporarily? Put someone on toilet-cleaning duty?

6. Mechanisms of conflict resolution that are cheap and of easy access. How can a worker co-op make conflict resolution cheap and easy? Internal conflict resolution training? Internal conflict resolution team? Agreements with other cooperatives to mediate one another’s conflicts? Agreements with local community mediation centers?

7. Self-determination of the community recognized by higher-level authorities. Self-determination partially means that outside investors can’t control the co-op. Self-determination is limited by government-imposed regulations dictating the ways that co-ops can structure relationships between employer/employee, investor/business, etc.

8. In the case of large common-pool resources, organization in the form of multiple layers of nested enterprises, with small local CPRs at the base level. Create semi-autonomous circles of management within a larger co-operative? Nest co-operatives within larger networks of co-operatives? Co-ops of co-ops?