Wednesday 12 December 2012

Another article on Ostrom

Elinor Ostrom, who has died aged 78, became, in 2009, the first woman to win the Nobel Prize in Economics, for research which analysed how people can co-operatively manage common resources such as fish stocks, water and forests without the need for government regulation or private ownership; her achievement was all the more remarkable because she was not an economist but a political scientist.


Elinor Ostrom
Elinor Ostrom Photo: AFP/GETTY

Elinor Ostrom carried out her most important work in the 1960s and 1970s when the so-called “Tragedy of the Commons” was exercising economic minds. The phrase, coined by the ecologist Garrett Hardin, describes a situation in which individuals, acting rationally in their own self-interest, deplete a shared limited resource — fishermen overfishing a lake, for example.
As Hardin saw it, there were essentially only two ways to address the problem: either the government has to step in and regulate the commons, or resources have to be divided up between the people who use them and privatised. The “Tragedy of the Commons” has thus been used to justify creeping government intervention in many different aspects of resource allocation.
In 1968 Elinor Ostrom read an article by Hardin which illustrated his theory by taking the example of a cow pasture open to everyone. Hardin argued that everyone would want a share in the common resource, which would rapidly become overgrazed. But Elinor Ostrom knew from her own experience that the “tragedy” described by Hardin did not always happen in practice. She was, moreover, convinced that the solutions proposed by Hardin could be counterproductive.
In the cattle pastures of the Alps, for example, she found that Swiss cheese producers had for centuries chosen the model of common ownership as a basis for locally-negotiated grazing rules so that the Tragedy of the Commons did not arise. The vagaries of the weather in the mountains meant that the location of the lushest pastures would vary unpredictably from year to year, so it was in the interests of all farmers to treat them as a common resource; privatising the pastures by fencing off small sections, she argued, would mean many farmers would be out of luck every year. In books such as Governing the Commons (1990), a work once described as “the intellectual field guide” for conservationists involved with community projects, Elinor Ostrom argued that most common resources are well-managed when those who stand to benefit are close to the resource and to each other.
In fact, she argued that communities themselves had developed out of the need to come together to work out how to avoid over-exploitation of common resources and ensure fairness. The “Tragedy”, as she saw it, typically occurs when there are one or more “stakeholders” who are outside the community social-economic system, who impose their solutions, exert political power or change the rules to gain an advantage for themselves.
Based on extensive fieldwork among communities including Indonesian fishermen, Maine lobstermen and farmers sharing scarce water resources in Nepal and Kenya, she drew up a set of design principles for stable local common resource management.
These include the need for clear boundaries to exclude outside parties; arrangements to involve all beneficiaries in the decision-making process; effective policing; a scale of graduated sanctions for those who violate community rules; simple mechanisms of conflict resolution; and the need for community self-regulation to be recognised by higher-level authorities. These principles applied not only to the management of natural resources, but also to “common” services such as communal property management, community policing, money systems and so on.
Elinor Ostrom was sharply critical of the “top-down” approach to such issues as climate change. Although she acknowledged that there was a role for international agreement, she felt that directing the question of climate change primarily at governments missed the point that actions that reduce greenhouse gas emissions must be taken by individuals and communities too. Nothing, as she observed, had changed since the Rio Summit of 1992: “The world has not been able to protect its global commons and the situation has deteriorated.”
With her husband, Vincent Ostrom, she developed the concept of “polycentrism”, which vests more authority over regulating the use of common resources to individuals, communities, local authorities and local NGOs. Local small-scale solutions, such as better loft insulation or the installation of solar panels could, cumulatively, make a tremendous difference, she argued, while big changes invariably lead to destabilisation and chaos. “What we have ignored is what citizens can do and the importance of real involvement of the people versus just having somebody in Washington make a rule,” she explained.
An only child of an out-of-work Hollywood set designer and his wife who divorced when she was a young child, Elinor Claire Awan was born in Los Angeles on August 7 1933. She often spoke about how her interest in co-operative institutions had grown during the Depression, when residents of the city organised themselves into self-help co-operatives, based on bartering labour for goods, to overcome deprivation. She recalled that she “didn’t know you bought clothes at anything but the Goodwill [community thrift store] until I went to college”.
After graduating from the University of California, Los Angeles, in Political Science, she did a PhD in the husbandry of Los Angeles groundwater resources.
In 1963 she married Vincent Ostrom, a fellow political scientist, and in 1965 followed him to Indiana University, where they both had teaching positions. She remained at the university for the next four decades, becoming Professor of Political Science in its College of Arts and Sciences as well as a professor in the School of Public and Environmental Affairs. In 1973 she and her husband founded the Workshop in Political Theory and Policy Analysis, an interdisciplinary forum for academic collaboration.
When Elinor Ostrom won the Nobel Prize in Economics in 2009 (she shared it with Oliver Williamson, who did unrelated work), the announcement caused surprise, and some disdain. Many economists had never heard of her, while others do not recognise the field of “institutional economics”, of which her work forms a part, as having a rightful place within the discipline

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