Economic Architecture The Podcast

Farmers in northwest Kansas share a problem: the groundwater they all depend on is a shared resource becoming more scarce. Each farmer pumping makes sense individually, but together it drains the aquifer they rely on. Brett Oelke, a fifth-generation farmer and president of Groundwater Management District No. 4, helped his neighbors design a way out. They agreed to cut their own water use by 20 percent rather than wait for the government to impose limits.

The first cycle slowed the decline of the aquifer, and farmers turned out to be more profitable under the restriction—proving the viability of this community-built mechanism that lets farmers set their own limits and revisit them every five years. In this episode, Stuart Yasgur and Brett Oelke explore what made this innovation so successful in tackling a collective action problem from the ground up and what this community of farmers in Kansas can teach us about redesigning markets to serve the public good.