Monday, October 12, 2009

And the Other Nobel Prizes...

Her story got a bit less publicity than the surprising Obama Nobel Peace Prize announcement, but the first woman to win the Nobel Prize in Economics, Elinor Ostrom, also got the good news today.

Ostrom was awarded for her work on "the commons," that is, collectively owned resources. Specifically, as reported in the New York Times: pools of users manage natural resources as common property. The traditional view is that common ownership results in excessive exploitation of resources — the so-called tragedy of the commons that occurs when fishermen overfish a common pond, for example. The proposed solution is usually to make users bear the external costs of their utilization by privatizing the resource or imposing government regulations such as taxes or quotas.

Ms. Ostrom’s empirical research has shown that this explanation is “overly simplistic,” the prize committee says: There are many cases around the world in which common property is “surprisingly well-managed.” In these cases commons users “create and enforce rules that mitigate overexploitation” without having to resort to privatization and government regulation (which can both pose their own practical difficulties).

There is a very good article by Jay Walljasper at On The Commons that explains the implications of her work.

Awarding the world’s most prestigious economics prize to a scholar who champions cooperative behavior greatly boosts the legitimacy of the commons as a framework for solving our social and environmental problems. Ostrom’s work also challenges the current economic orthodoxy that there are few, if any, alternatives to privatization and markets in generating wealth and human well being.

*Image of Takaoka Kojo Park by Kahuski via Creative Commons search, available with ShareAlike license.