[Insight-developers] Nobel Prize in Economics: Elinor Ostrom : Economic governance: The Organization of Cooperation

[Luis Ibanez]

http://nobelprize.org/nobel_prizes/economics/laureates/2009/press.html

The Royal Swedish Academy of Sciences has decided to award
The Sveriges Riksbank Prize in Economic Sciences in Memory
of Alfred Nobel for 2009 to:

Elinor Ostrom
Indiana University, Bloomington, IN, USA,

"for her analysis of economic governance, especially the commons"

and

Oliver E. Williamson
University of California, Berkeley, CA, USA,

"for his analysis of economic governance, especially the boundaries of the =
firm"



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Economic governance: the organization of cooperation

Elinor Ostrom has demonstrated how common property can be successfully
managed by user associations. Oliver Williamson has developed a theory
where business firms serve as structures for conflict resolution. Over
the last three decades these seminal contributions have advanced
economic governance research from the fringe to the forefront of
scientific attention.

Economic transactions take place not only in markets, but also within
firms, associations, households, and agencies. Whereas economic theory
has comprehensively illuminated the virtues and limitations of
markets, it has traditionally paid less attention to other
institutional arrangements. The research of Elinor Ostrom and Oliver
Williamson demonstrates that economic analysis can shed light on most
forms of social organization.

Elinor Ostrom has challenged the conventional wisdom that common
property is poorly managed and should be either regulated by central
authorities or privatized. Based on numerous studies of user-managed
fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom
concludes that the outcomes are, more often than not, better than
predicted by standard theories. She observes that resource users
frequently develop sophisticated mechanisms for decision-making and
rule enforcement to handle conflicts of interest, and she
characterizes the rules that promote successful outcomes.

Oliver Williamson has argued that markets and hierarchical
organizations, such as firms, represent alternative governance
structures which differ in their approaches to resolving conflicts of
interest. The drawback of markets is that they often entail haggling
and disagreement. The drawback of firms is that authority, which
mitigates contention, can be abused. Competitive markets work
relatively well because buyers and sellers can turn to other trading
partners in case of dissent. But when market competition is limited,
firms are better suited for conflict resolution than markets. A key
prediction of Williamson's theory, which has also been supported
empirically, is therefore that the propensity of economic agents to
conduct their transactions inside the boundaries of a firm increases
along with the relationship-specific features of their assets.


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http://www.cogs.indiana.edu/people/homepages/ostrom.html

Representative Publications

    Ostrom, Elinor (1990). Governing the Commons: The Evolution of
Institutions for Collective Action.
    New York: Cambridge University Press.

    Ostrom, Elinor (1992). Crafting Institutions for Self-Governing
Irrigation Systems.
    San Francisco: Institute for Contemporary Studies.

    Ostrom, E., Schroeder, L. & Wynne, S. (1993). Institutional
Incentives and Sustainable Development: Infrastructure Policies in
Perspective.
    Boulder, CO: Westview Press.

    Ostrom, E., Walker, J. & Gardner, R. (1994). Rules, Games, and
Common-Pool Resources.
    Ann Arbor: University of Michigan Press.


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See her (edited) book :
"Understanding Knowledge as a Commons"
"From Theory to Practice"
Edited by
Charlotte Hess and Elinor Ostrom

http://mitpress.mit.edu/catalog/item/default.asp?ttype=3D2&tid=3D11012

Knowledge in digital form offers unprecedented access to information
through the Internet but at the same time is subject to ever-greater
restrictions through intellectual property legislation, overpatenting,
licensing, overpricing, and lack of preservation. Looking at knowledge
as a commons=97as a shared resource=97allows us to understand both its
limitless possibilities and what threatens it. In Understanding
Knowledge as a Commons, experts from a range of disciplines discuss
the knowledge commons in the digital era=97how to conceptualize it,
protect it, and build it.

Contributors consider the concept of the commons historically and
offer an analytical framework for understanding knowledge as a shared
social-ecological system. They look at ways to guard against enclosure
of the knowledge commons, considering, among other topics, the role of
research libraries, the advantages of making scholarly material
available outside the academy, and the problem of disappearing Web
pages. They discuss the role of intellectual property in a new
knowledge commons, the open access movement (including possible
funding models for scholarly publications), the development of
associational commons, the application of a free/open source framework
to scientific knowledge, and the effect on scholarly communication of
collaborative communities within academia, and offer a case study of
EconPort, an open access, open source digital library for students and
researchers in microeconomics. The essays clarify critical issues that
arise within these new types of commons=97and offer guideposts for
future theory and practice.

Contributors: David Bollier, James Boyle, James C. Cox, Shubha Ghosh,
Charlotte Hess, Nancy Kranich, Peter Levine, Wendy Pradt Lougee,
Elinor Ostrom, Charles Schweik, Peter Suber, J. Todd Swarthout, Donald
Waters

About the Editors

Charlotte Hess is Director of the Digital Library of the Commons at
Indiana University.

Elinor Ostrom is Arthur F. Bentley Professor of Political Science,
Codirector of the Workshop in Political Theory and Policy Analysis at
Indiana University, and Codirector of the Center for the Study of
Institutions, Population, and Environmental Change (CIPEC) at Indiana
University.