The Exceptional Elinor Ostrom

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If you spotted any of the obituaries last week for Elinor Ostrom, you surely saw that she was the first (and only) woman to win the Nobel Prize in economics.

What the obits may not have pointed out was that applied moral philosophy was central to her work.

In fact, moral philosophy -- assumptions about the essential nature of humanity -- is central to any applied economics.

Some of the most popular economic theories posit what some Christian theologians would call a Fallen condition: over time, people inevitably gravitate toward a bad outcome. Ostrom's ideas were not just unusual because they paddled upstream from that perspective. They were unusual because they were backed by rigorous research into actual exceptions.

Start with the common wisdom. You may not know the name of Garrett Hardin but you may well know of his most famous idea. In 1968 he published an article in the journal Science titled "The Tragedy of the Commons." (It's not long and is quite readable. Given its fame, I strongly suggest you read the whole thing.)

The actual purpose of the piece, not often noted in the many references made to it, is an argument for government-imposed population control. The reason, Hardin says, is that people left to their own devices will eventually foul the planet. (He was an ecologist and microbiologist.) He uses a metaphor of a common grazing area, open to all. Since it is in each herdman's best interest to put as much stock into the area as possible, the result is overgrazing and destruction.

"Each man is locked into a system that compels him to increase his herd without limit -- in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all."

Liberals grabbed the idea as justification for government control of all commons, since groups of people cannot possibly be trusted. Conservatives grabbed the idea as justification for the elimination of all commons, since neither groups of people nor governments can possibly be trusted -- leaving private ownership as the only guarantor of long term interest.

Ostrom's work was unusually experimental for economics. Her basic training was in political science. But she might be better understood as a sort of anthropologist. What she did was search out exceptions to Hardin's grim condemnation. And she found them, pulling together a collection for her 1990 book, "Governing the Commons."

She was quick to acknowledge that the common wisdom wasn't all wrong. There are plenty of examples where groups spiral into the destruction of a commons. Her contribution was to disprove the claim of inevitability. As she wrote:

"What is missing from the policy analyst's tool kit -- and from the set of accepted, well-developed theories of human organization -- is an adequately specified theory of collective action whereby a group of principals can organize themselves voluntarily to retain the residuals of their own efforts."

What kinds of systems work? Her book analyzes a bunch of them. Relatively small, self-governing collectives where the stakeholders agree to particular kinds of enforcement of agreed-upon rules. She looked at fisheries, forests, regional police enforcement and other settings where individuals managed to agree to a successful management of common resources.

She identifies 10 factors that appear to help predict the success of these self-management arrangements: size, predictability, productivity, resource unit mobility, collective-choice rules, number of users, leadership/entrepreneurship, knowledge of mental models of the system, importance of resource and norms/social capital.

No, she says, it's not simple. But it is possible. Groups of people are able to locate their better angels without externally imposed restrictions. But it helps if the culture and government create an environment that nurtures successful collaboration.

She shared the Nobel for economics in 2008 -- much to the shock of many economists who had never heard of her.

Ostrom put her time and effort where her theory led. The many tributes written since her death list her contributions to collaborative efforts in academia and across disciplines. At Indiana University, she and her husband founded what is now called the Vincent and Elinor Ostrom Workshop in Political Theory and Policy Analysis. She helped found the Center for the Study of Institutional Diversity at Arizona State University.

She was also, famously, a nice person. I can offer one small personal example: A year after she won the Nobel, I wrote about the challenge of civility online. I wondered if the comments areas of websites could be viewed as commons and, if so, whether her theories offered suggestions for how to keep comments from quickly dissolving into nasty flamewars. I wrote her an e-mail and she answered straightaway, suggesting that shame was a tool that helped guide behaviors in other commons.

That many major websites have killed anonymous comments is evidence to me that her idea has traction.

Ostrom was active until almost literally the end of her life, felled by cancer at 78. A column she wrote on the upcoming Rio+20 summit on the environment was published the day she died. In it she argues that any one-size-fits-all attempt at a solution would be a disaster:

"Decades of research demonstrate that a variety of overlapping policies at city, subnational, national, and international levels is more likely to succeed than are single, overarching binding agreements. Such an evolutionary approach to policy provides essential safety nets should one or more policies fail."

But my favorite Ostrom quote comes from her 1990 book. She points out that Hardin's metaphor of overgrazing is just that -- a logical story he made up to support his position. Her dryly funny riposte is a rebuke to armchair opinionating of all kinds. And has particular value in these rancorous times:

"Relying on metaphors as the foundation for policy advice can lead to results vastly different from those presumed to be likely."

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