Journal of Institutional Economics – Elinor Ostrom memorial issue
Extract from the Editorial of issue 9/4 of Journal of Institutional Economics written by Geoffrey M. Hodgson
Elinor Ostrom (née Awan) was born in Los Angeles in 1933. In 1963, she married Vincent Ostrom, who was a leading political scientist in his own right. Together in 1973 they founded the Workshop in Political Theory and Policy Analysis in Indiana University. In 2009, she became the first woman to receive the Nobel Prize in economics ‘for her analysis of economic governance, especially the commons’. The prize was shared that year with Oliver Williamson. She died in 2012. Her husband expired a few days after her.
Her most famous work is on the problem of managing and maintaining common-pool resources, such as common (shared) land, fisheries, forests or irrigation facilities. Like public goods, common-pool resources exist when it is difficult to exclude other potential beneficiaries; but unlike public goods, common-pool resources are depleted by use and hence users are put in a rivalrous position.
In her final years, she became increasingly interested in how rule-systems (or institutions) evolve, publishing a paper in the Journal of Institutional Economics on this theme (Ostrom and Basurto, 2011).
Ostrom’s major contribution to the study of institutions is often described as part of the ‘new institutional economics’. But if the latter is defined as the application of neoclassical economics to institutional analysis, then her work ill-fits this description. Furthermore, her emphasis on trust and culture puts her in profound contrast with Oliver Williamson and others. Without developing this point extensively or mentioning Williamson explicitly, Ostrom hinted that the assumption of ubiquitous opportunism may be unrealistic. While the problem of opportunism is real, trust and other mechanisms must supplement costly monitoring, to ensure compliance with rules of governance.
We have lost an enormously creative scholar and a warm and wonderful person.
As a tribute to Ostrom, this issue has been put together by the editors of this journal and additional guest editor Professor Tine De Moor of Utrecht University. The contributions to this special issue cover a range of topics related to Ostrom’s work.
Copyright © The Nobel Foundation 2009
Photo: Frida Westholm