David R. Henderson  

Elinor Ostrom, RIP

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As many bloggers have noted, Elinor Ostrom, who co-won the Nobel Prize in economics, died today of cancer. Here's the post I wrote after she won the prize, along with Oliver Williamson. And here are two paragraphs from my Wall Street Journal that ran the day after she won:

Based on her work, Ms. Ostrom proposed several rules for managing common-pool resources, which the Nobel committee highlights. Among them are that rules should clearly define who gets what, good conflict resolution methods should be in place, people's duty to maintain the resource should be proportional to their benefits, monitoring and punishing is done by the users or someone accountable to the users, and users are allowed to participate in setting and modifying the rules. Notice the absence of top-down government solutions. In her work on development economics, Ms. Ostrom concludes that top-down solutions don't help poor countries. Are you listening, World Bank?

In a 2006 article with Harini Nagendra, Ms. Ostrom wrote: "We conclude that simple formulas focusing on formal ownership, particularly one based solely on public [government] ownership of forest lands, will not solve the problem of resource use." Garth Owen-Smith, who helped solve the common-resource problem of elephants in Namibia by ensuring that local residents shared in the financial benefits from tourism and trophy hunting, drew explicitly on Ms. Ostrom's work. If locals benefit from having a resident population of elephants, they are much less likely to poach and more likely to stop other poachers.

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COMMENTS (3 to date)
Steve Sailer writes:

A quick Google search finds Nobel Laureate Ostrom also cautiously expressing Doubts About Diversity in her book The Drama of the Commons.

"... Alesina et al. (1999) find that ethnic diversity is associated with lower public goods funding across the U.S. municipalities because different ethnic groups have different preferences over the type of public good ... In the kind of rural societies considered in this chapter ... the effectiveness of social sanctions weakens as they cross ethnic reference groups. In this vein, Miguel (2000) constructs a theoretical model where the defining characteristics of ethnic groups are the ability to impose social sanctions within the community against deviant individuals and the ability to coordinate on efficient equilibria in settings of multiple equilibria. With data from the activities of primary school committees in rural western Kenya, Miguel then shows that higher levels of ethnic diversity are associated with significantly lower parent participation in parent meetings, worse attendance at school committee meetings, and sharply lower teacher attendance and motivation.

"If social groups (not solely ethnic groups) are defined as those whose boundaries coincide with the effective monitoring and enforcement of shared social norms ... this is one way of understanding the notion cited earlier of cultural homogeneity, a variant of what many authors have called social capital or social cohesion. ... Irrigation organizations that cross village boundaries can rely less on social sanctions and norms to enforce cooperative behavior ..."

Murad Abel writes:

Hi Steve,

This is why diversity works well when groups are integrated under a same economic understanding.

Lorenzo from Oz writes:

A nice memoir of Elinor Ostrom and her warm and open-minded seriousness as a social scientist is here:

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