Elinor Ostrom has won the “Nobel Prize in Economics”. I call this a great win. Here’s a nice piece about her work from Jamie Bartlett on opendemocracy:
Traditionally, there have been two major approaches to getting ourselves out of this rather unfortunate spot and they dominate political debate to this day. The first is the oldest of all: a government with coercive powers forcing us to act enforcing restrictions. A Leviathan that can manage the resource for us, setting limits on fishing for example, thereby forcing us to cooperate for the common good. The second is to harness the power of the market: privatise common-pool resources so the selfish farmer bears the cost of his actions, rather than passing it on to society. The economist calls this “internalizing the cost of the externality” - and so he then has an incentive to manage his consumption more wisely. In environmental terms, carbon trading is the obvious example, the “polluter pays” principle.
More than anyone else, Ostrom sought out and theorised a third way, based on the assumption that we do have the psychological and socio-moral capacity to find our way out of this unhappy malaise without coercion. In her classic work Governing the Commons (1990), she showed how across the world communities of people have been able to come together to manage collective resources sustainably, “who” as she puts it “are in an interdependent situation and can organize and govern themselves to obtain continuing joint benefits when all face temptations to free-ride, shirk, or otherwise act opportunistically.” In one famous example, Swiss Alpine cheese-makers with a grazing commons for their cattle managed to govern it sustainably with a simple rule - if you got three cows, you can pasture them in the commons, provided you carried them over from last winter - but you can’t bring new cows in just for the summer. The community simply polices itself. Everyone knows whose cow is whose and no one transgresses the rule. This is what Ostrom calls polycentric governance.
Her work suits the times. It also has huge practical resonance for any number of local small-scale collective action problems. Her hopes that she would “shatter the convictions of many policy analysts that the only way to solve common pool resource problems is for external authorities to impose full private property rights or centralized regulation” has more than been realized. Her design principles of how to collectively manage resources have been applied all over the world, with the emergence of civic-led groups coming together off and on-line to get things sorted without government intervention. Not only that, Ostrom deserves great praise for the way she conducts the research itself, developing theories in the field by studying people’s behavior, rather than generating a-historical models about human nature…
Governing the Commons is now out of stock on Amazon, and recalled at the UCI library.
