Research

INTRODUCTION

Common pool resources (CPR) are defined as resources of two fundamental characteristics: high rivalry and low excludability in resource appropriation (Ostrom 1990), which bring up significant challenges in their governance. Hardin (1968) proposed the only two ways to avoid the tragedy of the commons as privatization or government regulation. Privatization attempts to enhance the exclusivity of resource use by establishing a property rights regime that grants exclusive use rights to specific groups or individuals (Partelow et al. 2019). However, numerous studies have demonstrated that privatization has not consistently proven an effective way of resolving the tragedy (Feeny et al. 1990, Ostrom 1990, Schulz and Lueck 2015, Bradshaw and Leonard 2020). Subsequently, Elinor Ostrom (1990) proposed a third solution, namely that common property rights within a self-organized and managed small group could also effectively achieve sustainable use of natural resources. Common property rights usually mean that the rights to use, control, and transfer resources are vested in a particular group (Schlager and Ostrom 1992, Agrawal 2001, Sikor et al. 2017).

However, CPR property rights systems in practice are more complex than theoretical common or private property. German and Keeler (2010) proposed a concept of hybrid institutions to explain the coexistence and interplay between disparate property rights systems in CPR governance. Partelow et al. (2019) revisited the privatization of commons from a social-ecological system (SES) perspective and found that common and private property rights were mixed in CPR governance. Qi and Li (2021) proposed nested property rights based on the resource system-unit of CPR and argued that grazing rights within a community where grassland was shared constituted a form of individual property rights nested in grassland common property rights. Tsering (2024) discovered that the hybrid rangeland governance in Tibetan pastoral areas, consisting of various arrangements, can assist natural resource-dependent populations in confronting uncertainties. These studies further illustrate that CPR governance is a complex, interactive process where a single property regime may fail and a combination of different property regimes may be more effective (Dietz et al. 2003, Ostrom and Hess 2007, German and Keeler 2010, Moritz et al. 2018).

The privatization of commons is occurring in novel ways in the CPR governance practices described above. Ostrom (1990) proposed that CPR was constituted by the resource system and the resource units produced by the resource system and that humans utilized natural resources primarily to obtain resource units, including fodder, trees, and fish. These characteristics provide a novel perspective for examining the privatization of commons and CPR property rights systems (Araral 2014). One example is individual transferable quotas (ITQs) in fisheries management, wherein fishing quotas for specific fish species can be purchased, sold, or leased as a form of individual appropriation of the resource (Copes and Charles 2004, Costello et al. 2008, Soliman 2014). Similarly, the clarification of individual grazing quotas has become a way of privatizing grassland use rights, while the grasslands themselves remain shared within the community (Gongbuzeren et al. 2021, Qi and Li 2021). Consequently, new privatizations of the commons, such as resource units-based quantitative rights, are no longer limited to allocating the space access-based quantitative rights for individual use but rather restrict use rights to specific resource characteristics (Foley and McCay 2014, Bromley 2016, Partelow et al. 2019).

To understand the emerging CPR property rights regime under the new form of commons privatization, we examine the case of the grasslands on the Qinghai-Tibet Plateau (QTP) of China. In the early 1980s, China began to transition from a centrally planned economy to a free market economy, which resulted in the decentralization of grassland property systems. Subsequently, the Grassland Household Contract System (GHCS) was introduced on the QTP, resulting in the fragmentation of collective grassland into small parcels and the contracting of these parcels to households (Zhaoli et al. 2005, Li and Huntsinger 2011, Qi and Li 2021, Sun et al. 2021). In practice, however, many villages have adopted a strategy of grassland nominally contracting to households^[1] while maintaining de facto collective use within the village as a whole or within a larger group (Banks 2003, Richard et al. 2006, Cao et al. 2011, Gongbuzeren et al. 2016, 2021, Qi 2023). In these communities, a novel approach to clarifying individual grassland use rights has emerged, typically quantified in terms of the livestock permitted to graze on communal grasslands, also termed the grazing quota system (Gongbuzeren et al. 2016, Qi and Li 2021).

In response to the dual challenges of increasing complexity in natural resource governance and the need to update prevailing theoretical paradigms, we focus on the institutional practice of nested property rights in grassland governance on the QTP. We aim to address three core research questions: (1) how nested rights function in practice, (2) how multi-level rights, especially use and control, interact in collective governance, and (3) how such arrangements affect institutional performance. A localized analytical framework and field data from four pastoral villages reveal how nested rights structure resource use, coordinate stakeholder interactions, and enhance governance adaptability and effectiveness in dynamic social-ecological systems.

FROM MIXED TO NESTED PROPERTY RIGHTS: CONCEPTUAL FOUNDATIONS AND ANALYTICAL FRAMEWORK

Rethinking privatization: toward nested property rights

Ostrom’s legacy: diversity in commons governance

In developing the concept of CPR, Ostrom (1990) suggested that CPR is constituted by the resource system and the resource units generated by the resource system. The resource system could maximize the flow of resource units over time without damaging the overall resource store and the whole resource system, e.g., grasslands, fishing grounds, and forests. The resource units were the amount that an individual occupied or used from the resource system, including fodder, fish, and timber, reflecting the rivalry of CPR. In other words, the non-exclusivity of CPR was mainly reflected in the resource system, while the rivalry was mainly reflected in the resource units (Ostrom 1990), which determined that the property rights systems for them were different (Araral 2014, Qi and Li 2021).

The privatization of CPR does not necessarily require the privatization of the resource system, while resource units can be quantified and allocated for use by individual members in a manner that allows for their utilization. This study re-examines the six cases selected from Ostrom’s (1990) book, Governing the Commons, from the perspective of the resource system-units, as shown in Appendix 1 Table A1. In the three cases of successful CPR governance, the boundaries of the resource system and users were delineated at the community level, thereby achieving the exclusivity of CPR at the resource system level. Concurrently, the quantity of resource units obtained by each user was quantified in a specified manner, such as the number of livestock that herders could graze on the communal grassland, thus resolving the rivalry in resource use. Over time, the right to obtain resource units could be traded within the same group, thereby reinforcing the privatized attributes of the right to use resource units (Araral 2014, Qi and Li 2021). However, in the remaining three failed cases, it was not feasible to address the issues of CPR exclusivity and/or rivalry at the level of the resource system and/or resource units (see Table A1), which is consistent with Hardin (1968).

Beyond the binary: quota-based practices in CPR systems

The emergence of a quota system in CPR management provides further evidence for the study of privatizing the commons. The implementation of ITQs in fisheries management has been identified as the optimal property rights system for the management of fishery resources in the present era (Copes and Charles 2004, Costello et al. 2008, Partelow et al. 2019). Under the ITQs, the total allowable catch (TAC) of a fish resource in a fishery is initially quantified and subsequently distributed to fishery producers or organizations by defined principles or criteria. ITQs are permitted to be traded and leased freely, subject to legal limitations (Clark 2006, Costello et al. 2008). Concerning the formation of ITQs, the progression of fishing rights from initially restricted access, through maximum yield management, to ITQs in recent years demonstrates that access to fisheries resources has become increasingly exclusive and ultimately privatized at the level of resource units (Hilborn et al. 2005, Clay et al. 2010).

Furthermore, the privatization of resource units in the form of quotas has also been observed in other cases of CPR governance practices, including the transferable groundwater rights in Los Angeles (Blomquist and Ostrom 2008), the transferable irrigation water rights in the Philippines (Araral 2013), and the grazing quota system on the Qinghai-Tibetan Plateau (QTP) in China (Gongbuzeren et al. 2016, Qi and Li 2021). These CPR governance practices have a common feature: resource units are shaped into quotas in a specific way and then allocated to different users, while the resource system remains shared. In these practices, individual members and communities are the holders of different types of property rights (Schlager and Ostrom 1992, Sikor et al. 2017, Qi and Li 2021).

Revisiting Ostrom’s (1990) principles of institutional design for CPR governance demonstrates that the delineation of resources boundaries and users, the adaptation of appropriation rules to local conditions, effective monitoring, graduated sanctions, and low-cost conflict resolution mechanisms collectively enhance the efficacy of CPR exclusivity while ensuring the clarity of individuals’ access to resource units (Schlager and Ostrom 1992, Cox et al. 2010, Araral 2014). Consequently, the CPR property rights system may be no longer a single common property rights system, but rather a mixed property rights system.

Nested property rights system and the bundle of rights

From mixed arrangements to nested institutions

The preceding analysis illustrates that the property rights systems of CPR are considerably more complex than the theoretical state, common, and private property rights systems. Such systems are typically characterized as a dynamic mixed property rights system. In the context of CPR governance, the term “mixed property rights” is used to describe the coexistence of multiple interdependent, discrete property rights for the same resources within a community (Dietz et al. 2003, German and Keeler 2010, Baur and Binder 2013, Moritz et al. 2018).

A review of the existing literature reveals that mixed property rights systems in CPR governance practices can be classified into four distinct types, as shown in Table 1. The first type refers to the same resource across disparate spatial locations (Baur and Binder 2013). For example, on the QTP, winter pastures are located at lower elevations and are privately used, whereas summer pastures are located at higher elevations and are typically shared by the community (Cao et al. 2011). The second category includes overlapping resources situated within the same landscape scale, such as forestland, trees, and fruits (Bruce et al. 1993, Bradshaw and Leonard 2020). The third category includes resources that are utilized for multiple purposes. A notable example is the concept of semi-commons proposed by Smith (2000) to explain the arrangements surrounding medieval farming and grazing. The fourth type is the nested property rights framework based on the resource system-units of CPR to explain the property rights structure within the grassland common-use model (Qi and Li 2021). The present study primarily focuses on the fourth type of mixed property rights as the subject of study.

Deconstructing the bundle: actors, rights, and interactions

To understand the structure of CPR property rights, Schlager and Ostrom (1992) proposed a conceptual framework based on the notion of a bundle of rights as a means of understanding common property rights. In this conceptual framework, Schlager and Ostrom (1992) proposed a typology of common property rights, comprising five categories: access, withdrawal, management, exclusion, and alienation (Table 2). Access is the right to enter a defined physical resource and enjoy non-rivalry benefits. Withdrawal is the right to receive resource units or products of a resource system. Management is the right to regulate internal use patterns and improve resources. Exclusion is the right to determine who is granted access and withdrawal rights and how these rights are transferred. Alienation is the right to sell or lease management and exclusion rights (Schlager and Ostrom 1992, Ostrom and Hess 2007). The first two are rights at the individual operational level, whereas the subsequent three are rights at the collective choice level.

However, with rapid socioeconomic development, the property rights regimes for access to and control over natural resources have become far more complex than the framework proposed by Schlager and Ostrom (1992). This complexity arises not only from the unequal capacity of different actors to benefit from resources (Ribot and Peluso 2003), but also from legal pluralism, which allows multiple legal systems to recognize competing claims to property rights (Sikor and Lund 2009). In this context, Sikor et al. (2017) updated the conceptual framework proposed by Schlager and Ostrom (1992) in three dimensions (Table 2).

First, Sikor et al. (2017) defined the first-order right as “use rights” and argued that use rights are more indicative of the nature of operational-level rights than withdrawal rights, while access rights can be considered as a distinct category of rights, separate from the aforementioned list (Table 2). As for use rights, these can be categorized as either direct or indirect. Direct use rights refer to the right to derive direct benefits from a given resource, such as grassland grazing. Indirect use rights are the right to receive indirect benefits associated with a resource, such as financial compensation through market transactions.

Second, Sikor et al. (2017) expanded the concept of second-order rights, also referred to as control rights, by introducing the notion of monitoring and transaction rights, which were incorporated into the original management and exclusion rights (Table 2). Monitoring refers to the rights to monitor the use of resource units, as well as state of the resource system. Transaction rights relate to the activities that are necessary to realize benefits, and these are usually separated from direct use rights (Ribot et al. 2010, Sikor et al. 2017). For example, He (2016) found that although farmers have the right to use the forest, they are frequently prevented from undertaking logging activities and selling the resulting resources.

Finally, Sikor et al. (2017) propose a third-order right, which they term “authoritative rights,” to be situated at the pinnacle of the property rights hierarchy (Table 2). Authoritative rights determine the specific control rights that apply to a given resource, including definition rights and allocation rights. Definition rights are the discretionary space available for the exercise of control rights through the implementation of laws and traditional customs. Allocation rights refer to the right to assign control rights to particular specific actors. The updated framework provides an effective means of elucidating the structure of CPR property rights and community governance mechanisms in the context of communities’ frequent interactions with markets and governments (Sikor et al. 2017, He et al. 2020, Miller et al. 2021).

Theoretical analysis framework

To understand the grassland property rights based on grazing quotas, we constructed a theoretical analysis framework from the perspective of the resource system-units based on the nested property rights proposed by Qi and Li (2021), as shown in Figure 1. As proposed by Qi and Li (2021), the property rights to the resource system are typically delineated based on the spatial boundaries of the resource system, thereby constituting a form of common property rights. The property rights to resource units are typically quantified by specific metrics (e.g., quotas) and subsequently allocated to individual users, thereby constituting a form of private property rights. Private property rights based on resource units (e.g., grazing quota rights) are nested within common property rights based on the resource system, forming what is known as nested property rights (Qi and Li 2021).

Based on the study of Schlager and Ostrom (1992) and Sikor et al. (2017), we categorized the bundle of rights associated with grazing quota-based grassland property rights into three types: authoritative rights, control rights, and use rights (Fig. 1). In Figure 1, the left arrow denotes property-rights type, the center shows the hierarchy and interrelations among rights, and the right arrow lists rights held by different holders; the dotted arrow indicates links among different holders.

We adopted the rights bundle framework proposed by Sikor et al. (2017) for the following key reasons: (1) The Sikor et al. (2017) framework extends the Schlager and Ostrom (1992) framework by incorporating additional rights, including definition rights, allocation rights, monitoring rights, and transaction rights. This expanded framework better captures the multi-level structure of nested property rights in pastoral areas. (2) Grassland governance is influenced by a variety of factors, including national policies, village collective management, and market transactions. The Sikor et al. (2017) framework is more effective in illustrating the dynamic evolution of property rights. (3) The implementation of the grazing quota system relies on effective monitoring mechanisms, and the monitoring rights in the Sikor et al. (2017) framework provide a theoretical tool to analyze this governance mechanism. Therefore, we selected the Sikor et al. (2017) framework as its theoretical foundation.

However, in contrast to the framework proposed by Sikor et al. (2017), this study's framework placed greater emphasis on the dominant role of the community in controlling grassland use, whereas local governments or external agencies (e.g., NGOs) have minimal control over grassland use. The approach is more in line with the reality that although the grasslands on the QTP are owned by the state, local village collectives have a high degree of autonomy over grasslands. Accordingly, we adapted the theoretical framework to reflect the local realities of grassland use on the Qinghai-Tibetan Plateau (see Fig. 1). The revised framework incorporates the practical functioning of grassland property rights, the structure of the bundles of rights, and the diversity of rights holders.

Schlager and Ostrom (1992) emphasized the importance of distinguishing among different rights holders within a bundle of rights. Although grasslands in the pastoral areas of the QTP are legally state-owned, village collectives often act as de facto owners, exercising multiple rights, while users include both community members and authorized outsiders. This differentiation between rights definition and their consequences (Ostrom and Hess 2007) highlights the layered nature of rights: community-level and individual-level rights are held by distinct actors. Effective interaction between them fosters stable rule-making environments (Sikor et al. 2017, He et al. 2020) and encourages user participation in collective governance processes.

MATERIALS AND METHODS

Methods and case study sites

To address the theoretical framework and research questions proposed in this study, a comparative case analysis was conducted around three core issues: (1) To examine how nested property rights function, we analyzed the practical operation of household- and community-level rangeland rights. (2) We explored how different rights interact by mapping the structure and allocation of the property rights bundle. (3) We investigated the effectiveness of nested rights by assessing governance arrangements and institutional performance through the lens of the grazing quota system.

Despite the implementation of the Grassland Household Contract System (GHCS) in pastoral areas of the Qinghai-Tibet Plateau (QTP) in the late 1990s, some villages still maintained the grassland common use (Cao et al. 2011, Gongbuzeren et al. 2021, Qi and Li 2021). The field survey indicated that, although some grasslands were physically divided into small plots and contracted to individual households for use, these herders have achieved the common use of grasslands through cooperative grazing. In addition, some villages adopted a strategy of grassland nominal contracting to households, thereby ensuring the continued collective use of grassland. These characteristics of grassland collective use patterns led to the emergence of the diversified grassland property rights system.

To investigate the complex property rights system and community-based governance mechanisms in grassland common-use settings, we selected four representative villages from two adjacent pastoral counties in the eastern QTP (Fig. 2). These villages, village HT and village XR in Zoige County (Sichuan Province), and village GS and village DR in Maqu County (Gansu Province), have all implemented grazing quota systems and maintain grassland collective use at the community level. Although they share similar ecological conditions and pastoral traditions, the case villages exhibit meaningful variation in terms of grassland area, community size, quota allocation rules, and the degree of rights tradability. Such heterogeneity allowed for a comparative exploration of nested property rights in practice. Local herders in all villages have historically relied on mobile grazing as their primary livelihood strategy and are highly responsive to institutional changes in grassland property regimes.

Grassland grazing quota systems of four case villages

The four case villages selected in this study represent variations of grassland common use and the application of the grazing quota system under different institutional arrangements. Although all villages retain forms of grassland common use, their specific implementations of the GHCS and grazing quotas vary. Table 3 presents the grassland use patterns, property rights systems and the implementation of the grazing quotas in four case villages. Here, grazing quotas refers to the number of livestock that herders are permitted to graze on communal grasslands, as determined by the community. Grazing quota system was initially established as a livestock restriction agreement among herders under the grassland common-use model.

The four case villages represent three types of grassland common-use organizations: entire administrative villages, village groups (also known as village xiaozu^[2]) and herder-initiated grassland cooperative organizations (also known as grassland joint-household organizations [JH]; see Cao et al. 2011). Specifically, Village HT and Village GS maintain grassland common use within their respective village xiaozu, Village XR practices grassland collective use at the level of the entire administrative village, and Village DR involves joint grassland use managed by a self-organized joint-household group of herders. Nevertheless, the implementation of the grazing quota system varies across the four villages.

In Zoige County, village HT and village XR both maintain collective use of grassland, but differ in quota allocation. Village HT nominally contracted grassland to households in 1998 but preserved collective use. Quotas are allocated based on nominal grassland contracted area, with a standard of 3 mu per sheep unit. Village XR, which has not adopted the GHCS, allocates quotas based on household size (72 sheep units per person), reflecting its long-standing practice of equal-use and strong kinship ties. Both villages permit internal trading of quotas. In Maqu County, village GS and village DR adopted nominal contracting under GHCS while maintaining collective use. In village GS, herders born before 2002 with contracted grassland receive quotas of 25 yaks per person; those born after 2002 receive none. In Village DR, herders with contracted grassland receive quotas of 20 yaks per person, while those without receive 10. Quotas are tradable within the community, with revenue redistributed to herders with fewer livestock. These institutional differences form the basis for analyzing nested property rights in subsequent sections, particularly the interaction between individual use rights and community control rights in grassland governance.

Data collection

The data employed in this study were collected from field surveys conducted between 2016 and 2023 through in-depth interviews with local herders, village leaders (e.g., the village party secretary, the village head, and the village group leader), and elderly herders in the four case villages. Pre-surveys were conducted in 2016 and 2018, while questionnaires and semi-structured interviews were employed to collect data in 2020, 2021, and 2023. Specifically, the 2020 survey was conducted in Village HT and Village XR in Zoige County, the 2021 survey was conducted in Village GS in Maqu County, and the 2023 survey was conducted in Village DR, also in Maqu County. The questionnaire included four main aspects: (1) basic household information, including labor force, the grassland area, off-farm income, and grassland subsidies, (2) household livestock production, (3) grassland use patterns, including the detailed rules for grassland use, the grazing quota systems, and the rules for monitoring and sanctions, and (4) grazing quota trading in recent years.

The field survey used a stratified equal proportion sampling design in each group of villages, with the distribution of livestock numbers serving as the basis for stratification. A total of 115 valid sample households were finally identified, including 38 samples from village HT, 37 samples from village XR, 22 samples from village GS, and 18 samples from village DR. Quantitative indicators related to household-level grassland use, livestock size, quota allocation rules, and participation in quota trading are detailed in Table 3.

RESULTS

Practice of grassland grazing quota rights at the household level

Here we examine how individual herders access, use, and benefit from grazing quota rights under nested property rights regimes. We focus on the institutional arrangements through which grazing quotas are defined and allocated, the quota use, and the extent to which quota trading has become institutionalized across different community settings.

Definition and allocation of grazing quotas

In the implementation of the GHCS, the introduction of the grazing quota system changed the way individual grassland use rights were defined. In the four case villages, individual herders’ use rights are defined through grazing quotas, the number of livestock units they are allowed to graze on collectively used grasslands. Unlike the traditional GHCS, which physically allocates grassland plots to households, the quota system enables continued collective use while individualizing access through livestock-based entitlements.

The GHCS and the grazing quota system both aimed to define individual use rights but differed substantially in practice. The GHCS emphasized territorial use rights by physically fencing and allocating land parcels to households, which often led to landscape fragmentation (Fig. 3B). In contrast, the grazing quota system avoided physical division of grasslands (Fig. 3A), clarifying individual rights based on livestock carrying capacity rather than territory. Quotas were defined by the community and reflected the number of livestock each herder was permitted to graze on shared grasslands.

This figure (Fig. 3) is a conceptual illustration based on common patterns observed in pastoral areas of the QTP. It does not represent a specific case village but is intended to generalize typical institutional and spatial transformations under the grassland privatization process. Panel A illustrates the pattern of mobile collective grazing before the implementation of the GHCS, while Panel B shows the landscape after grassland was contracted to households and physically divided. Pastoral camps are relocated within fenced plots, and access to shared natural water sources is replaced by motor-pumped wells.

The allocation of grazing quotas varies across the four villages. In Village HT, quotas are distributed based on nominally contracted grassland area (e.g., 3 mu per sheep unit), despite the land being collectively used. In Village XR, where GHCS was never implemented, quotas are equally distributed based on household population size (e.g., 72 sheep units per person), reinforcing egalitarian principles and strong kinship cohesion. In Village GS, only herders with contracted grassland are eligible for quotas, at a rate of 25 yaks per person born before 2002. Village DR follows a hybrid model: individuals with grassland receive 20 yaks/person, while those without receive 10, reflecting an adaptive response to demographic changes. These allocation practices reflect different interpretations of equity and resource entitlement, with important implications for how use rights are exercised at the household level.

Modes of use and income implications

Herders utilize grazing quotas through two primary modes: direct use and indirect trading. Direct use involves raising livestock on community grasslands within quota limits, which remains the dominant livelihood strategy in all four villages. Indirect use, however, has become increasingly significant as economic diversification proceeds.

Quota trading provides households with few or no livestock the opportunity to derive income from unused quotas. In Villages HT and GS, surplus quotas are traded privately among herders. In XR and DR, transactions occur through community mediation: households with surplus quotas sell them to the collective, which redistributes them based on herding capacity. Table 4 shows a steady increase in quota trading participation in HT and GS from 2016 to 2020, with quota prices gradually approaching the local grassland rental market. This trend highlights the evolving economic value of grazing quotas and their potential to supplement herder incomes. Moreover, the system enhances inclusivity by enabling participation from younger or landless herders who lack direct contractual rights to grassland.

Institutionalization of quota transactions

The evolution of quota trading from informal practice to semi-formal institutional arrangement demonstrates a key feature of nested property rights: the coupling of individual use rights with collective oversight mechanisms. Communities regulate trading through locally agreed rules. In villages HT and GS, transactions between herders must be reported and registered with the village authority. In villages XR and DR, community-led quota redistribution is subject to pricing standards and benefit-sharing schemes that ensure fairness and prevent elite capture.

These mechanisms reflect the emergence of hybrid governance arrangements, where individual rights are exercised within the bounds of community-sanctioned frameworks. Such institutionalization not only strengthens the legitimacy of the quota system but also reinforces its role as a flexible and adaptive governance tool within nested property regimes.

In summary, grazing quotas serve as a cornerstone of individualized use rights in collectively managed grasslands. Their allocation, use, and trading reflect both resource constraints and institutional innovations, setting the foundation for broader community-level control arrangements.

Operationalization of community-level rights: control, allocation, and adaptation

Above we focused on the operation of grazing quotas at the household level, here we shift attention to how community-level institutions define and exercise common property rights over communal grasslands. In the context of nested property rights, community actors are not merely enforcers of upper-level rules but also play an active role in defining, allocating, and adapting property rights to local social-ecological conditions. Our analysis draws upon six core dimensions of collective rights: management rights, exclusion rights, transaction rights, monitoring rights, definition rights, and allocation rights. These dimensions provide a comprehensive framework to analyze how community-level institutions shape the use and governance of grassland resources (Table 5).

Management, exclusion, and transaction rights

In all four villages studied, the village committee or joint-household group acts as the key collective entity exercising management rights, which include organizing rotational grazing, setting seasonal rules, and resolving disputes. For example, in Village XR, the entire administrative village collectively decides on grazing start and end dates, while in Village DR, joint-household leaders play a similar role within their subgroup.

Exclusion rights: the ability to determine who can access communal grazing land are more variable: In Villages HT and GS, only households with contracted grasslands can obtain grazing quotas, while in XR and DR, even herders without formally contracted land are allowed to access quotas, albeit with lower allocation. These rules reflect differences in how communities negotiate inclusion based on household status, historical residency, and contribution to community affairs.

Transaction rights: a relatively recent development: In Villages HT and GS, quotas can be traded bilaterally between herders. In contrast, XR and DR have established collective mediation mechanisms where surplus quotas are returned to the community and redistributed. This emerging internal market for quotas demonstrates the partial commodification of communal rights and reflects growing livelihood diversification.

Definition, allocation, and monitoring rights

Definition rights: the authority to determine what constitutes a right or entitlement under the local grazing system: In all four villages, the criteria for defining quotas, whether based on land area, household size, or hybrid rules, were determined by village meetings or customary consensus. This local definition process demonstrates the importance of institutional autonomy in nested systems.

Allocation rights: how quotas are distributed among herders vary significantly: Village XR uses a uniform per capita allocation rule (72 SU/person), promoting egalitarianism. Village HT links quotas to contracted land (3 mu/SU), while GS and DR combine land ownership and household size to determine entitlements. These rules reflect both ecological considerations (e.g., carrying capacity) and social logics (e.g., fairness, kinship).

Monitoring rights: the ability to enforce rules and detect violations: In Villages XR and DR, the community appoints designated monitors or relies on village leaders to check for overgrazing or unapproved transactions. In GS and HT, peer monitoring and periodic livestock counting are used to ensure compliance. The effectiveness of monitoring mechanisms is closely tied to the strength of local social norms and organizational capacity.

Institutional performance of nested property rights

The nested property rights system observed in the QTP offers more than just a structural alternative to classical property regimes; it facilitates tangible improvements in governance effectiveness and institutional adaptability. Here, we synthesize qualitative narratives and empirical data to demonstrate how nested arrangements improve institutional performance by addressing governance challenges, enhancing allocation efficiency, and reinforcing compliance mechanisms.

Nested governance in action: a response to three institutional challenges

The nested property rights systems observed in the four case villages illustrate a multi-level governance structure centered on the design and implementation of grazing quota systems. As depicted in Figure 4, the effective functioning of these systems relies on the interaction between community-level control rights and household-level use rights. These governance arrangements not only institutionalize the operation of nested property rights but also provide robust mechanisms to address three core challenges of collective grazing action in common-use grassland communities: institutional supply, credible commitment, and effective monitoring.

(1) Institutional supply: The design and adaptation of grazing quota rules at the village level demonstrate a high degree of institutional autonomy. In each village, allocation criteria, seasonal grazing rules, and trading regulations were generated through participatory processes, such as village meetings or joint-household deliberations. This localized rule-making capacity reflects the community’s role not only as rule enforcers but also as rule creators, which is essential for building institutions that fit local social-ecological contexts. For example, at the annual community collective meetings in village HT and village XR, herders are able to propose adjustments to the grazing quota standard and the grazing practices to respond effectively to the impact of extreme climatic disasters on livestock production.

(2) Credible commitment: The nested property rights regime enhances the level of credible commitment within pastoral communities by embedding multi-tiered institutional arrangements. On one hand, quota allocation rules, whether based on grassland area, household size, or hybrid approaches, are determined collectively through village assemblies or deliberative consensus, thereby strengthening both legitimacy and local acceptance. On the other hand, some communities have introduced a “collective repurchase and redistribution of surplus quotas” mechanism, enabling vulnerable groups to benefit from institutional participation despite limited livestock ownership. This arrangement reinforces internal reciprocity incentives and helps mitigate social tensions arising from quota disparities. Meanwhile, communities also rely on informal institutional foundations, including traditional culture and religious beliefs, to nurture a sense of credible commitment among herders. For instance, in villages HT and XR, all herders are required at the end of each year to pledge an oath before local deities and Buddhas, vowing not to engage in quota violations or unauthorized grazing in the coming year.

(3) Effective monitoring: Under the nested property rights system centered on grazing quotas, a multi-level monitoring mechanism has emerged, encompassing individual herders, community organizations, and local government. First, herders are intrinsically motivated to monitor each other, as overgrazing by one household directly affects the quota value and pasture quality for others. Second, community institutions assume active supervisory roles. For example, in Village XR, a designated “Livestock Check Team” regularly conducts door-to-door livestock censuses to identify and rectify violations. Third, local governments exercise higher-level oversight, conducting ecological assessments and quota compliance reviews. In 2020, after identifying signs of pasture degradation in Village XR, local governments intervened by mandating adjustments to grazing quotas and management practices, providing regulatory feedback and reinforcing accountability.

Nested property rights system does not represent a linear extension of classical property regimes. Instead, it reflects an embedded institutional evolution that emphasizes flexible adaptation and structural complementarity across governance levels. Rather than focusing solely on clarity of entitlements, this model prioritizes the structural embeddedness and functional synergy between rules, actors, and enforcement mechanisms. Grassland governance under this regime exhibits an integrated logic that centers on quota-based management, multi-level collaboration, and rule flexibility, highlighting the inherent advantages of nested property rights in coping with ecological complexity and social change.

Institutional advantages of grazing quota-based governance

Grazing quota-based governance has emerged as a foundational mechanism enabling the practical operation of nested property rights across the QTP. This governance model offers a range of institutional advantages that support adaptive, equitable, and enforceable management of communal rangelands, particularly in ecologically fragile and institutionally complex settings.

First, the quota system facilitates rule-based resource allocation while allowing for localized adaptation. Across the case villages, quotas are allocated based on different principles, by land area (village HT), per capita (village XR), or hybrid rules (village GS and village DR), each tailored to ecological conditions and social arrangements. Such institutional diversity enhances both perceived legitimacy and procedural fairness. For example, in Village XR, the egalitarian rule of allocating 72 sheep units per person has helped reduce intra-community disputes and stabilize herd sizes. From 2016 to 2022, household herd sizes in village XR grew at an average rate of just 3.8% annually, notably lower than the 7.5% average growth observed in non-quota villages within the same county (Field Survey 2023).

Second, the quota system enhances credible commitment through collective decision making and redistributive mechanisms. In villages DR and XR, surplus quotas from herders with fewer livestock are purchased by the collective and redistributed to those in need. Introduced in 2018, this mechanism has particularly benefited female-headed and elderly households: 78% of respondents in these groups reported improved grazing access in the 2023 survey. Meeting records from village DR further indicate that over 60% of reallocation decisions between 2019 and 2022 were made through inclusive village deliberations, with representation from each household cluster.

Third, the system supports multi-level monitoring and enforcement. In Village GS, peer-based surveillance is reinforced by annual audits conducted by the village committee. In Village XR, a “Livestock Check Team” conducts comprehensive livestock censuses for all herders during peak grazing seasons. Field interviews revealed that over 85% of herders in village XR view the monitoring process as both fair and effective. Furthermore, inspection data from village XR in 2022 indicate that the incidence of grazing quota violations remains exceptionally low, with the vast majority of herders adhering strictly to the rules.

Fourth, graded sanctions strengthen both enforcement and institutional legitimacy. Village HT levies fines of RMB 30 for each sheep unit exceeding quota limits, while village DR imposes a RMB 100 fine per surplus yak. In village GS, herders violating their quota must immediately sell the excess livestock. These economic penalties are supplemented by religious sanctions: in village XR, violators are excluded from participating in temple ceremonies and sacred mountain rituals. In 2023 interviews, 62% of respondents reported that these religious penalties were more effective deterrents than monetary fines, highlighting the role of cultural norms in supporting compliance.

Finally, the quota system provides flexibility for market-based transactions. In village HT and village GS, the emergence of quota trading has enabled herders to adjust grazing rights in line with household needs, without increasing overall pressure on rangelands. By 2019, the average price of internal quota transfers in Village HT had reached RMB 42 per sheep unit, about 67.2% of the local grassland lease rate, indicating a growing convergence between administrative allocation and market valuation. This alignment reflects an increasing integration of bureaucratic and market-based governance mechanisms, providing herders with both institutional security and adaptive flexibility.

In sum, the grazing quota system functions not only as a resource allocation tool, but as an integrated governance framework. It operationalizes nested property rights through a multi-layered architecture that balances rule formalization with local flexibility, collective authority with individual autonomy, and institutional structure with socio-cultural meaning. Together, these elements represent a durable foundation for adaptive rangeland governance in a changing social-ecological context.

DISCUSSION: RETHINKING COMMONS GOVERNANCE THROUGH NESTED PROPERTY RIGHTS

Reframing property rights in complex commons

This study contributes to the ongoing debates on natural resource governance by introducing the concept of nested property rights as a flexible and context-sensitive alternative to the traditional dichotomy of private versus common property regimes. Drawing on empirical evidence from four pastoral communities on the QTP, our findings challenge the conventional view that institutional clarity and exclusivity are prerequisites for effective governance. Instead, we demonstrate how hybrid, overlapping, and dynamically adjusted rights, embedded in multi-layered institutions, can generate legitimate, adaptive, and enforceable governance outcomes.

The classic bundle of rights framework (Schlager and Ostrom 1992) emphasizes the delineation and allocation of specific rights (access, withdrawal, management, exclusion, alienation) to single actors. However, as commons scholars increasingly acknowledge (Clement 2010, Carlisle and Gruby 2019), this framework often fails to capture the complexity of polycentric systems in which multiple actors exercise overlapping authority. Our findings build on this theoretical shift by illustrating how nested property rights, where rights are functionally distributed across households, communities, and government bodies, operate as an institutional response to the realities of social-ecological complexity. Rather than pursuing a linear privatization trajectory or a return to collective uniformity, nested property rights represent a structural embedding of property functions into differentiated, yet complementary, governance levels. This reframing enables a more nuanced understanding of resource governance that incorporates flexibility, interdependence, and adaptive coordination.

Governance implications of nested rights systems

Our analysis underscores three key institutional advantages of nested property rights. First, nested rights enable flexible allocation and legitimacy. By accommodating diverse rules, such as grassland-based quotas in village HT and per capita quotas in village DR, the grazing quota system reflects both ecological variation and social equity. These localized rule designs improve procedural legitimacy and reduce distributional conflicts. Second, the system enhances credible commitment through inclusive participation and redistribution. Community-based quota reallocation mechanisms, particularly those benefiting vulnerable groups, institutionalize reciprocity and mutual accountability. Informal mechanisms such as oath rituals in temples further reinforce social norms and collective obligations. Third, nested rights support multi-level monitoring and enforcement, combining peer observation, community audits, and external oversight. This layered approach strengthens compliance through both formal and informal sanctions, blending authority with moral legitimacy. Together, these features form a governance architecture that is both vertically integrated and horizontally participatory, a core design principle of nested institutions (Qi and Li 2021, Li and Kerven 2024).

Applicability and policy relevance

The lessons from grazing quota-based governance extend beyond the Qinghai-Tibetan Plateau. Many common-pool resource systems worldwide, such as irrigation networks, forest cooperatives, and fisheries, face similar governance dilemmas arising from overlapping jurisdictions, ecological uncertainty, and social heterogeneity. For example, in coastal fisheries management, the implementation of catch share systems has demonstrated that competitive pressure on marine resources can be mitigated through adaptive quota markets that respond to environmental variability (Costello et al. 2008). Our findings suggest that nested property rights may offer a promising institutional model in such contexts, provided that three enabling conditions are met: (1) institutional capacity for layered rule-making, allowing rules to emerge at multiple levels; (2) recognition of overlapping user groups, acknowledging heterogeneity without forcing artificial boundaries; and (3) mechanisms for coordination across scales, ensuring that local decisions align with broader ecological and policy goals.

As a traditional privatization of grassland use rights, the grassland contracting household system devolves the use and control rights over the grassland to individual herders through the construction of grassland fences, resulting in the paradox of grassland privatization (Fernández-Giménez 2002, Undargaa and McCarthy 2016). In the Chinese context, this study offers practical insights for the ongoing reforms of grassland tenure. Rather than pursuing one-size-fits-all solutions centered on individualization or rigid quotas, policy makers should consider fostering nested governance models that integrate community deliberation, flexible quota arrangements, and multi-level accountability. In sum, nested property rights are not merely a hybrid between private and common regimes; they are a qualitatively distinct mode of governance. Their institutional advantage lies not in the clarity of ownership, but in the strategic embedding of rights across actors and levels to enhance institutional fit, resilience, and adaptive capacity.

CONCLUSIONS

In response to the tragedy of the commons proposed by Hardin (1968), both the property rights school and the common pool resources (CPR) school have attempted to establish a single property paradigm for natural resources, including both private and common property rights. However, the property rights systems employed in CPR governance practices are more complex than the theoretical common and private property rights, and are a mixed property rights system, which means the coexistence of multiple interdependent discrete property rights for the same resources. In this context, nested property rights offer a conceptual and practical alternative to the traditional private-collective binary, providing a more flexible and context-sensitive approach to resource governance.

Based on case studies from the Qinghai-Tibetan Plateau, the analysis demonstrates that nested arrangements facilitate institutional coordination across scales and functions, enabling more adaptive and inclusive governance. The grazing quota system plays a pivotal role in operationalizing nested rights by linking individual use rights to community-level controls and administrative oversight. This structure responds effectively to three major challenges in communal rangeland management: the supply of institutional rules, credible commitment among resource users, and robust enforcement.

The study also highlights that nested property rights are not static constructs but evolve through iterative interactions among local actors, governance institutions, and changing ecological pressures. Their success lies not in the clarity of ownership but in the coherence of multi-level governance functions. By embedding rights in a layered structure that allows flexibility, contestation, and adaptation, nested property regimes enhance institutional fit with complex social-ecological realities. These insights contribute to ongoing debates on commons governance and institutional transformation, offering implications for both policy design and future research in natural resource management under uncertainty and change.

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^[1] Grassland nominal contracting to households means only clarifying nominal grassland contracted area for individuals, but not dividing grassland, in which grassland still retained collective use.
^[2] Village xiaozu was the lowest-level production unit during the People’s Commune (1958–1983). After the dissolution of the Commune, it became the basic unit in the sub-village administrative system. In the establishment of administrative villages, several tribes and settlements that are not large enough to form an administrative village are designated as xiaozu, which together form the administrative village.

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