Tuesday, June 12, 2012

RIP: Elinor Ostrom

I have just learned that Elinor Ostrom died this morning of cancer.  The first woman to win the Nobel Prize in Economics (I know, I know, the Swedish Bank Prize, blah blah), she was officially a political scientist, and there were some who complained about her receiving the award because of that and because she had "never published in a top 5 economics journal," although she did so after receiving the prize.  Also many fussed about not having heard of her, including people as prominent as Paul Krugman.  As it is, her most famous work, her seminal 1990 book, Governing the Commons, has been cited more than 13,000 times, more alone than the entire citations received by more than half of the other economics Nobelists.

Although the basic insight had been made earlier, particularly by Siegfried von Ciriacy-Wantrup and his student, Richard Bishop in a 1975 paper in the fairly obscure Natural Resources Journal (now more or less run by lawyers), she was the one who really developed the point, working with multidisciplinary teams using a broad array of methods, including in-depth field studies, game theory, lab experiments, and a variety of other approaches, building up a massive institutional and historical knowledge and data base, she confirmed that the management system of a natural resource commons is what matters more than its official ownership.  In a sense this is a rediscovery in a different context of the old ownership versus control argument that was initiated in the 1930s by Gardiner and Means, and was also a focus of the early behavioral economists as well who immediately followed Herbert Simon. 

It remains the case even now in many textbooks that the issue is posed as "the tragedy of the commons," a phrase coined by Garret Hardin in the 1960s, with the idea being that there were two choices, either badly managed open access commons such as the encroached commons pastures of England, or private ownership of these resources.  Ostrom and her associates argued that what mattered was the ability to control access, whatever the formal ownership scheme, and that privately owned properties that cannot control access, such as the homesteaded farmlands of the US Great Plains prior to the invention of barbed wire to keep the cattle out, were worse than many common properties that managed themselves.  Much of this insight came from observing traditional management schemes of forests, and fisheriers, and irrigation systems, and pastures that worked, with the Alpine ones in Switzerland dating from the 1200s a classic example.

This ties with a broader story, that systems organized by the people who use the resources work better than ones imposed by outsiders.  The classic case involves the forests of Nepal since WW II, a case emphasized by Ostrom.  The forests ended up in basically three different kinds of systems.  Some of them owned by corporations, influence from the British Raj, some of them were in state-owned and controlled systems from various socialist governments, and about a third remained in the hands of local groups managed in traditional ways.  Today, most of the first two are gone, over-harvested and deforested.  What is left of the forests of Nepal are those where the local traditional managers were able to keep on keeping on.

I can also attest that Lin Ostrom was a warm and engaging person, friendly to one and all and totally open-minded.  She is a great loss to the broader intellectual and policy community of this world.  May she rest in peace.

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