Date of this Version
Cornhusker Economics (January 2012)
Elinor Ostrom, a professor at Indiana University, was awarded the Nobel Prize in Economic Sciences (first woman to ever receive it) in 2009, sharing it with Professor Oliver Williamson. The prize was awarded “for her analysis of economic governance, especially the commons.” She “challenged the conventional wisdom by demonstrating how local property can be successfully managed by local commons without any regulation by central authorities or privatization”. Also, full privatization, i.e., assigning individual property rights rather than shared, common property rights, is also not essential. She summarizes her contribution in the finding “that humans have a more complex motivational structure and more capability to solve social dilemmas than posited in rational-choice theory,” thus going beyond both traditional economic and government oriented frameworks for analyzing the common pool resource problem.