An Uncommon Commons: Government’s Role in Constituting an Unusual Credit Union Deposit Insurance Scheme

Abstract

While Ostrom-inspired research has proven an important corrective to the simplistic “markets or government” dichotomy that continues to shape social and administrative sciences, this paper uses a case study to suggest that in some circumstances, our understanding of the commons could be enriched by giving more weight to the role governments can play in helping to constitute a human-made commons. In particular, this paper examines the case of a little-known deposit insurance scheme run by credit unions in the Canadian province of Saskatchewan that has operated without once incurring a deficit for 70 years despite offering the kind of unlimited deposit insurance frowned upon by policymakers. We find that the provincial government played an important role in constituting the scheme and helping it operate, effectively, as a polycentric commons that until recently, satisfied all the design principles that tend to characterize successful collective management. The resulting argument is simple: it would be difficult to understand the stability of Saskatchewan’s credit union deposit insurance scheme without also understanding how government supported its operation as a commons.