Thursday, June 14, 2012

Ellinor Ostrom

Ellinor Ostrom died on Tuesday. She was the only woman to win a Nobel prize in Economics. Her extensive research on managing the commons became the basis of much of my thesis work and her sharp intellect will surely be missed in the scientific community.

She pioneered the concept of self-governing systems. Her research was critical to helping people understand motives behind law. Fundamentally her theories advanced the idea that a regulatory agency can be unnecessary. She demonstrated that managing resources is not about blanket structures that require top down management. Rather, she emphasized that users in a system can effectively manage their own resources if they communicate effectively with each other.

One of my favorite examples is local fishermen in South America. Everyone understood, without any formal governing structure, that the fish in the fishery were a finite resource. This finite resource could only stay sustainable if the fishermen all withdrew at an agreed upon limit.

And the fishermen were very poor; the fishing was little more than sustenance. And if one person overfished there was plenty of profit to be had. In the short run the fishery would appear stable and the cheater would take in more cash, and in the long-run “we’d all be dead” to quote Keynes. So there was substantial incentive to overdraw on this fishery. But the fishermen all drew equally and kept the resource sustainable.

Ostrom carefully studied this and many examples like it. After interviewing many of the participants in these systems she found that regulations were merely the codification of deeply ingrained norms. Trust and communication were key findings of her research. In systems where everyone maintains the trust and carefully manages their stake with the rest of the community, there is little likelihood of a common pool resource collapsing.

For an economist she often bucked the trend. She interviewed people affected by her areas of study. She was an early proponent of the triple-bottom line and a framework of sustainability. Her ideas were often radical to the ears of capitalist Americans but her research was solid and often her proof was punctuated by pertinent examples in American communities.

Fundamentally she shifted how people approach the Tragedy of the Commons because she was able to do what only the best and very brightest are able to do, ask the right questions. Ellinor Ostrom, you will be missed.