Congrats to Elinor Ostrom

Yesterday, Indiana University political science professor Elinor Ostrom became the first woman ever to win the Nobel prize in economics. I'm not going to comment on other Nobel prizes given out this year, but I am extremely happy that Ostrom won.

Ostrom won for her work on common pool resource management wherein she challenged the "Tragedy of the Commons" theory. The "Tragedy of the Commons" essentially states that an open access resource, such as an open pasture, will inevitably degrade. This is because each individual using the pasture will act selfishly and use as much of the natural resource as possible. What's best for the individual will trump what's best for the society at large and eventually the pasture will be barren. Anyone who has had to deal with a nasty kitchen at the office can see the "Tragedy of the Commons" at work. Since the communal office kitchen belongs to everyone and no one, everyone leaves their dirty dishes in the sink, and no one bothers to clean them.

The "Tragedy of the Commons" theory led policy makers to conclude that the only way to manage common property would be to a) privatize it or b) put the property under national control. Forests all over the world were nationalized in a misguided attempt to prevent inevitable environmental degradation. But a strange thing happened when forests were placed under national control. A lot of them experienced worse environmental degradation than ever.

See, what Ostrom realized is that many common pool resources are not just open access but are unofficially managed by communities in various ways. To go back to the office kitchen, the kitchen could degrade. HR could step in and officiate over the kitchen. The company could "privatize" the kitchen and decide that actually the communal kitchen is now Sue in Accounting's kitchen. OR, the workplace as a whole might come up with informal means of managing the mess in the kitchen. For example, you might give Bob a dirty look when he leaves his dish in the sink without washing it, thus prompting Bob to wash his dish. Or you and your co-workers might decide that everyone is responsible for maintaining the kitchen once a week.

Ostrom's work demonstrates that common pool resources are managed in a number of different ways by communities, communities can often best manage these resources themselves, and that the "Tragedy of the Commons" is far from inevitable. Her contributions to the field of natural resource management are invaluable, especially now as we attempt to deal with the numerous environmental crises facing us. So congratulations, Dr. Ostrom on your well-deserved honor.