Journal of Economic Behavior & Organization Vol. 42 (2000) 19–41 Choosing rules to govern the commons: a model with evidence from Mexico  Jeff Dayton-Johnson Department of Economics, Dalhousie University, Halifax, NS, Canada B3H 3J5 Received 5 October 1998; received in revised form 25 February 1999; accepted 5 October 1999 Abstract I develop a model to assess distributive rules observed in field data on 48 Mexican farmer-managed irrigation systems. Households decide whether to contribute maintenance effort, the aggregate amount of which affects the level of output. Distributive rules with congruence between the sharing of collective costs and benefits elicit the highest level of effort; empirically, however, incongruent rules dominate the surveyed systems. I argue that transaction costs offset some efficiency benefits of congruent rules. I estimate a model of rule choice: inequality and the age of the water users’ association strongly increase the likelihood that a system chooses proportional water allocation. ©2000 Elsevier Science B.V. All rights reserved. JEL classification: D70; O12; O13; O17; Q25 Keywords: Common property; Institutional choice; Irrigation; Mexico; Rules 1. Determinants of rules on the local commons Management of the local commons — small-scale common-pool resources such as in-shore fisheries, forests, pasturelands, and irrigation systems — is critically important to economic well-being and environmental conditions in the rural sector of developing economies. More- over, the study of commons management can shed light on the determinants of institutional choice. What circumstances favor the appearance and evolution of these regulatory regimes? What characteristics of resource-using communities lead to the adoption of particular rules? Ostrom (1990, p. 92 and passim), argues that successful institutions to manage local commons frequently exhibit congruence between cost-sharing and allocation rules: ‘ap- propriation rules restricting time, place, technology and/or quantity of resource units are  This paper is based on a chapter from my doctoral dissertation in economics from the University of California, Berkeley. E-mail address: jeff.dayton-johnson@dal.ca (J. Dayton-Johnson). 0167-2681/00/$ – see front matter ©2000 Elsevier Science B.V. All rights reserved. PII:S0167-2681(00)00073-1