In the typical hunter-gatherer society, decision-making is collective, yet decentralized, access to resources is shared, goods are typically distributed via reciprocal exchange, sharing, and gift-giving, and the distribution of both income and decision-making power is egalitarian. We argue these features are interrelated. We adopt an incentive-based view of sharing and gift-giving, in which the fundamental role of sharing and gift-giving is to implement socially desirable production decisions in the face of a common resource use problem. We show how this system decentralizes decision-making, while at the same time encouraging agents to make production decisions in the best interests of the group. Sharing rules give agents optimal use incentives, while gift-giving obligations give agents incentives to reveal private information about skill. The system has some interesting properties; for example, it may result in a relatively equal distribution of income, even though the productive capabilities of agents differ. Our theory is also able to account for some features of the ethnographic record that do not jibe well with existing theories of sharing; for example, why the rather extensive free-riding on the efforts of the most productive agents is typically tolerated in hunter-gatherer society.