Monday, October 12, 2009

Two Americans Share Nobel Prize in Economics

The committee for the Nobel Memorial Prize in Economic Science has announced that this year's prize was awarded to Elinor Ostrom of Indiana University “for her analysis of economic governance, especially the commons” and Oliver E. Williamson of the University of California, Berkeley “for his analysis of economic governance, especially the boundaries of the firm."

Of the two, the work of Ostrom appears to be the more interesting.

Ostrom's work emphasizes how humans and ecosystems interact to provide for long run sustainable resource yields. Forests, fisheries, oil fields, grazing lands, and irrigation systems, among others, in her view all exhibit the characteristics of common pool resources. She believes that humans are also responsible for countless ecosystem collapses.

This, of course, suggests that she has a limited understanding of how free markets and private property rights can solve many problems that are viewed as "commons" problems.

However, Peter Boettke is quite familiar with her work and commenting on her book, Understanding Institutional Diversity, he wrote:
What emerges from Elinor Ostrom's book is precisely what the title suggests---an understanding of the diverse nature of institutions that exist in human societies to promote human cooperation or to hinder it. This is a significant work by one of the most thoughtful social scientists in the world and it will attract a large number of readers and enlighten them.
In a 2005 paper, Methodological individualism, spontaneous order and the research program of the Workshop in Political Theory and Policy Analysis

In the paper, Boettke along with Christopher Coyne explored, "The significance of Elinor Ostrom and Vincent Ostrom research, which examine the economic reasoning of social sciences."

1 comment:

  1. It appears that all of these economists could gain some insight by studying the KISS doctrine.