This paper explores institutional arrangements governing reciprocal grazing resource sharing among different pastoral and agropastoral clans in eastern Ethiopia. It describes and compares multiple institutional arrangements that define non-exclusive property rights in order to increase the social and economic efficiency of grazing resource uses in a risky environment. Results indicate that social capital, explained using lineage as a proxy, plays a crucial role in facilitating the establishment of and negotiation for non-exclusive forms of rights to grazing resources. Nonetheless, socio-political factors, such as clan politics and regulations restricting cross-border herd mobility, limit the role of customary institutional arrangements in sustaining interclan cooperation. Increased threat from climate change (rainfall variability) and the absence of insurance for the livestock increase the necessity to sustain interclan cooperation over the reciprocal sharing of the grazing commons. This suggests the need for a policy shift in favor of reinforcing customary systems of resource governance to ameliorate interclan cooperation to respond to these challenges.