Elinor Ostrom: Helping People To Share Fairly

“The Tragedy of the Commons” was a term first introduced by Garrett Hardin in Science in 1968. He described how people acting independently and solely out of self interest are likely to overuse a common limited resource, leading to its eventual depletion -  even though this is against everyone’s long term interest. The theory helps to explain much of the environmental devastation in the world, where profit maximising objectives of individuals and companies lead to over-exploitation of global common resources such as air, water, soils and biodiversity.

Last year’s Nobel Prize for Economics award to the first woman ever, could well have been a prize for the environment. In the popular Table Talk series with Cheong Suk-Wai ( Senior Writer with “The Straits Times, Singapore’s National Newspaper) Nobel Laureate Elinor Ostrom explains how community management of resources can avert such a tragedy for shared common resources, with an outcome better than management by governments or private enterprises.


By Cheong Suk-Wai

Nobel Laureate Elinor Ostrom

Nobel laureate Elinor Ostrom reckons she has been in more police cars and jails than anyone she knows.  That is because Professor Ostrom, 77 devoted 15 years to studying police departments in 80 metropolitan areas around the United States to see which were more efficient.  She recalls: “I always rode a policeman’s full shift in his car, eight hours a day, and learnt a lot about what went on in which areas.”

The married don is one of the world’s most awarded social scientists, with 36 books to her name.  She now works at both Indiana University and Arizona State University.  Previously, she lived and worked for many years among the world’s poorest people, particularly in Nepal, helping them devise systems to share scarce resources in fair ways.  She showed that communities could often manage water, forests, and fisheries better than governments or private enterprises.

For her work, last year she became the first American woman to win the Nobel Prize for economics, which she shared with transaction cost economist Oliver Williamson.

She was in Singapore a fortnight ago to speak at the National University of Singapore’s Lee Kuan Yew School of Public Policy.  I asked her how her theory that communities can be trusted to share things equitably held up in reality.

Suk-Wai:  What got you interested in how communities run themselves?

Elinor: Well, I grew up in Los Angeles where we have an average of 30cm of rainwater a year, so it’s semi-arid.  If you’re going to provide water for a big urban population and you have only 30 cm coming down, it’s a challenge.  So they were drawing water from a groundwater basin – schwoop! – scooping it up.  And the groundwater in the basin was going down.  I watched them solve that through various institutional mechanisms, which took a long time.

Then Mancur Olson Jr published “The Logic of Collective Action” in 1965, and Garrett Hardin, The Tragedy Of The Commons in 1968, and everyone said: “ Oh, citizens can’t solve these problems;  you have to have the government come in and solve those for them.”  But I’d already watched citizens solve the basin problem. Tough, but they did it.  Not that everyone does; there are lots of failures.

Suk-Wai:  Is that because it’s hard to get people to agree on most things?

Elinor: Yup,  But then the problem for me was how do you do a theory that can explain this.  It’s taken a while to do, but we’re moving.

Suk-Wai:  What in your research surprised you the most?

Elinor : That when you test your theoretical argument on anonymous people, with no communication with one another and no knowledge of what the other was doing, they would over-harvest, or collect more natural resources than Nature could regenerate.  They over-harvested dramatically, even worse than we predicted.

But when people engaged in face-to-face communication, they did a bit better than predicted.  Now people are accepting that communication changes the structure of interaction a great deal and helps people do much better.

Suk-Wai:  So engaging others deeply convinces them to share fairly?

Elinor: Yes, We’d get proposals on the table and some discussion.  And they would use the verbal to sanction one another, like, “Oh, some scumbucket contributed more to the collective harvest than we agreed.  So I hope that scumbucket remembers he did this terrible thing.”

Suk-Wai:  But does your theory about self-organisation work in today’s I, Me, Myself world?

Elinor: It is possible.  It’s important to recognise that we do have a me-me-me world but, frequently, it was one theory that was predicting that the human being was just a me-me-me person.  So we modelled human behaviour as always maximising self-interests.   In the market for private goods, maximising personal profit does lead to outcomes that are better for all of us.  And so people then over-generalised because they could show that self-interest produced good outcomes for strictly private goods.  But water, forests and fishing are not quite private goods.  These are bundles and outcomes that affect us jointly.

Suk-Wai:  How long did you take before you had that “A-ha” moment?

Elinor: I never really had an “A-ha” moment. I struggled and struggled and struggled.

Suk-Wai: And now you have a Nobel Prize to show for it.

Elinor: Well, I’m very appreciative of that.

See, I’m concerned about the way we define democracy.  If it’s just voting, then the me-me-me model is either you don’t vote at all because it’s costly or you just figure out the selfish best option.  But if you create institutions where people have a real sense that they can make a difference, they may not adopt a me-me-me attitude in those circumstances.  I’m not saying voting is dumb;  it’s important. But it’s not the only thing that makes a system open, problem-solving and so on.

Suk-Wai:  Is too much education making people more me-me-me today?

Elinor: It depends on the education. What my colleagues and I are doing is trying to build the capacity to understand how and when people can self-organise and do better, as well as how to build research teams.  If you’re a good research team, you’re not doing a me-me-me.  I’m not saying you should never say, “Okay, folks, right now, I’ve got to take care of me.”  But in the long run, if that’s all you do, you’re in trouble.

Suk-Wai:  So what are caring communities like?

Elinor: They have some ways of communicating with, and meeting, one another.  They have some shared understanding of the problems they face and a sense that they have a common set of norms and rules that they will use.  And they monitor each other.  As it turns out, such monitoring is important.

A ‘nut head’ who believes in people
Here is feisty and forthright Nobel laureate Elinor “Lin” Ostrom on:

Her research “My colleagues in the Department of Political Science never knew what to do with it.  They’d go, “Why is she sitting there?”

How complex her work is “My collegues would say, “Lin, you know how to model, you don’t want seven diverse types of rules. Keep it simple, stupid!”

Why she rarely advises governments “See, I’m a real nut head.  I’ve not done a lot of policy advice because many of my colleagues did so without the foundation for it – and I’m worried about getting the foundation first.”

Why global institutions get little buy-in on climate change “If all are working on a global solution but doing so in the backroom, how do we get trust?

The one thing she is sure about “ If anyone tells you that he has the answer, you should be a little sceptical”

One-size-fits-all approaches “ If we really consolidate systems and make everything the same, think of what we’ve eliminated!  Not a good idea.”

Why citizens should not depend on government for all solutions “We know that for investments, you don’t put all your bets in one place.  But frequently we think we’ll solve governance problems by putting all our eggs in one basket. No!”

The deepest lesson she has learnt “ The huge diversity and the ingenuity of human beings – let the flowers bloom!”

Suk- Wai:  Isn’t that counterintuitive to trusting others?

Elinor: You have to be a little distrustful to make sure others are trustworthy.  And a little monitoring makes everyone very trustworthy.

Suk-Wai:  So it really begins and ends with trust?

Elinor: It doesn’t begin with trust because you have to build that.  And building that is tough.  Just think about a marriage:  Does just saying vows make for a good marriage?  So people who marry have to decide how to find ways to cooperated and there isn’t a formula.  Soemtimes the wife does all the cooking and raising of the kids and the husband does all the business stuff. Sometimes that works, but sometimes, it doesn’t.  And if each spouse says, “Why should he never have to cook?” or “Why should I always have to cook”, both are stupid.

My husband Vincent will be 91 years old in a few weeks, so he’s not cooking any more,  but he used to be pretty active at making soups, and I did a lot of book-keeping and taxes.  I wouldn’t argue that all marriages should be organised the way Vincent and I organised ours, but it’s been 46 years and we’re still very much in love.

Suk-Wai: So should we junk one-size-fits-all theories once and for all?

Elinor: Part of what I’m arguing is that people would want to have the best way to set up, say, a local government, but trying to use one formula everywhere in the same way doesn’t work.  See, I’m very nervous about saying that any design to help people engage with others is the best because what works in one setting doesn’t somewhere else, and what works at one time may not work 20 years later.  So I’m not saying htat self-governance – or what others call civic engagement – is always the best system.

But I am saying that having multiple levels of organisation, where you can have some oversight, gives you a better chance of having a more robust and adaptable system over time.  So if you have a dominant leadership system that is working, it might work for another 10 years, the basket that it would work for another 25 years.  Human history shows us that there have been enlightened leaders of systems, but they haven’t lived forever.

Many thanks to Cheong Suk-Wai for sharing this interview with us. The interview was originally published in “The Straits Times” on 31st August, 2010.  We are grateful for the permission given by Singapore Press Holdings (SPH), which owns full copyright to this article, to reprint this.

Further links you may be interested in :

Elinor Ostrom explaining how community governance can help avert “The Tragedy of the Commons”


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Posted by on Sep 13 2010. Filed under Communities and Governance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

1 Comment for “Elinor Ostrom: Helping People To Share Fairly”

  1. [...] concepts like community, discourse, institutions and consultation. In that vein, there is a nice interview with Elinor Ostrom over at Eco Walk the Talk. It got me thinking about the that consultation and discourse play in the evolution of a [...]

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