Threats, institutions and regulation in common pool resources

Can bureaucracies respond to threats marked by both potentially high costs and fundamental uncertainty? Standard guidelines such as maximizing expected value to the society over a period of time may be ineffective; yet, state action is often most demanded for such situations. I argue that the precautionary principle of reserved rationality helps explain the ability of bureaucracies to choose appropriate actions under uncertainty. Such bureaucracies are empowered when there is sufficient informal institutional support for their expertise and the bureaucracy has the discretion to take necessary precautions. I draw historical information from the case of Singapore's regulation of the formerly common pool resource of water catchment areas. This case reveals decision making when it is not clear that the expected-value criterion would support action, as well as the importance of political and institutional support for such action.