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Remembering Elinor Ostrom, Nobel Laureate

Zoe Chace, National Public Radio (NPR)
Elinor Ostrom, the only woman ever to win an economics Nobel, died today at age 78.

She was famous for challenging an idea known as the tragedy of the commons — the theory that, in the absence of government intervention, people will inevitably overuse a shared resource.

So, for example, if a village shares a pasture, it’s in the individual interest of each farmer to graze his cattle as much as possible on the pasture even though, in the long run, overgrazing may ruin the pasture for everyone.

“It’s a problem, it’s just not necessarily a tragedy,” Ostrom told us when we spoke to her in 2009. “The problem is that people can overuse [a shared resource], it can be destroyed, and it is a big challenge to figure out how to avoid that.”

But, she said, economists were “wrong to indicate that people were helplessly trapped and the only way out was some external government coming in or dividing it up into chunks and everyone owning their own.”

In fact, Ostrom found, there were lots of real-world examples where the theory didn’t hold up — places where local people got together and figured out how to manage shared resources without destroying them.
(12 June 2012)
Appreciation for Elinor Ostrum is coming from across the spectrum. For example: Common Dreams, Reason and Cato at Liberty, Wall Street Journal.

Elinor Ostrom Outlines Best Strategies for Managing the Commons

Jay Walljasper, On the Commons

Elinor Ostrom details the importance of commons management at the Minneapolis Festival of the Commons, co-sponsored by On the Commons and Augsburg College (Credit: Augsburg College)

A breakthrough for the commons came in 2009 when Elinor Ostrom won the Nobel Prize for Economics. The first woman awarded this honor, the Indiana University political scientist not only made history but also helped debunk widespread notions that the commons inevitably leads to tragedy. In 50 years of research from Nepal to Kenya to Switzerland to Los Angeles, she has shown that commonly held resources will not be destroyed by overuse if there is a system in place to manage how they are shared.

… Ostrom explained there is no magic formula for commons management. “Government, private or community,” she said, “work in some settings and fail in others.”

The most effective approach to protect commons is what she calls “polycentric systems,” which operate “at multiple levels with autonomy at each level.” The chief virtue and practical value of this structure is it helps establish rules that “tend to encourage the growth of trust and reciprocity” among people who use and care for a particular commons. This was the focus of her Nobel Lecture in Stockholm, which she opened by stressing a need for “developing new theory to explain phenomena that do not fit in a dichotomous world of ‘the market’ and ‘the state.’”

… Overall, she recommends local control as the best path for protecting a commons because it allows rules to be “based on unique aspects of a local resource and culture”. But the polycentric approach—a diverse web that might include some community or private governance along with different layers of government—“can have the benefits of local control, but still cope with the problems that come on a larger scale.”

… Ostrom also champions “self-organized” systems, where the people closely involved with a commons help “develop rules for themselves which can be quite different from what is in the textbooks.” Her favorite example of this is the intricate system of rules and enforcement created by fishing fleets in Gloucester, Massachusetts, to ensure there are enough lobsters for everyone.
(2 November 2011)
Posted also at Energy Bulletin.

8 Principles for Managing a Commons

Elinor Ostrom, YES! Magazine
Advice on how to govern our commons by Nobel winner Elinor Ostrom:

1. Define clear group boundaries.

2. Match rules governing use of common goods to local needs and conditions.

3. Ensure that those affected by the rules can participate in modifying the rules.

4. Make sure the rule-making rights of community members are respected by outside authorities.

5. Develop a system, carried out by community members, for monitoring members’ behavior.

6. Use graduated sanctions for rule violators.

7. Provide accessible, low-cost means for dispute resolution.

8. Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.
(Feb 26, 2010)