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This article analyzes local government fiscal sustainability as a common-pool resource (CPR) problem. By comparing the experiences of Los Angeles County, San Bernardino City, and San Bernardino County, the analysis applies a framework developed from three decades of CPR research to show the importance of six micro-situational variables — communications with the full set of participants, known reputations of participants, high marginal per capita return, entry or exit capabilities, longer time horizon, and agreed-upon sanctioning capabilities — in shaping collective-action dynamics and building the trust and reciprocity among stakeholders needed for achieving fiscal sustainability. The underlying contextual conditions for these micro-situational variables vary based on specific socio-economic and political settings, but the findings suggest that institutions and processes can be designed based on several well-tested principles in CPR governance to encourage stakeholders to look beyond their immediate self-interests and to make decisions that account for the community’s long-term fiscal sustainability.


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