By Erik Nordman
The Nobel committee awarded Elinor Ostrom the Nobel Prize in Economics in 2009 for her work on “economic governance, especially the commons.” As the first woman to win the economics Nobel, she broke gender and disciplinary barriers. Her research on natural resource commons brought her the most attention, but her groundbreaking work on municipal governance continues to resonate with scholars and policymakers. These two strands of Ostrom’s research came together toward the end of her career as she investigated global commons, particularly the challenge of climate change.
Ostrom began her academic career as a graduate student at University of California-Los Angeles. After being rejected from UCLA’s economics department, she secured a seat in the political science program. A class with professor Vincent Ostrom (the two would later marry) inspired Lin’s interest in the idea of public entrepreneurship. She investigated how enterprising civil servants, like their private sector counterparts, come up with innovative solutions to public problems. Ostrom found a suitable study site in her own backyard: the region’s groundwater management agencies.
The Los Angeles metropolitan region grew rapidly in the 1930s and 40s. The groundwater resource could not sustain the growing demand from residents, farms, and industries and groundwater levels dropped. Even worse, the remaining water became saltier as the ocean water creeped into the aquifer. The West Basin aquifer served many communities around Los Angeles. But each municipality had no incentive to reduce its withdrawals. Why cut back if the neighboring community kept pumping? ”The ancient creed of the robber baron to take what you can get and keep what you can became the basic rule for proprietors using ground water supplies,” Ostrom wrote in her 1965 dissertation.
By 1946, the West Basin water managers understood that no individual water agency could solve the over-pumping problem alone. They knew that cooperation, not competition, was the way to manage the groundwater resource. But it took courageous and innovative public entrepreneurs to bring the water managers together. These public entrepreneurs formed the West Basin Water Association to shift the conversation from competition to collaboration. Through the association, they engaged in candid conversations about mutual problems, shared information, and studied the shared groundwater resource. The regular meetings over coffee helped build trust and a sense of community. Most importantly, the members created and enforced rules about how much water each community could pump. In the two decades between the WBWA’s formation and Ostrom’s dissertation, the water managers secured water from the Colorado River aqueduct and cut groundwater withdrawals by 30%. By 2019, even after years of drought, the region’s groundwater withdrawals were within the “safe yield” established in 1952.
Ostrom’s dissertation hinted at the themes that would define her career. The West Basin’s water managers did not rely only on a private water market to allocate the scarce groundwater. Nor did they wait for the courts or the State of California to impose restrictions on them. These public entrepreneurs worked together, established trust in one another, and created their own set of rules for managing the resource. They resolved the “tragedy of the commons” decades before ecologist Garrett Hardin popularized the term. “I was studying the commons from the beginning, but I didn’t know it,” Ostrom said years later in an interview.
The LA water managers were not alone in their public entrepreneurship. Scholars in many disciplines – political science, anthropology, economics, sociology – had also documented communities where shared natural resources – commons – were sustained. But no one had yet connected the dots. Ostrom crossed these disciplinary boundaries, collaborated with like-minded scholars, and developed a database successful and unsuccessful commons. These communities taught her what it takes to successfully manage a shared resource. She distilled these into her eight “design principles” featured in her book, Governing the Commons.
There is, however, another strand of Ostrom’s research that is less well known. During the 1970s, after writing her dissertation but before her case studies on natural resource commons, Ostrom studied municipal governance. The mid-century conventional wisdom was that governments could provide services more efficiently if they were highly centralized. Having multiple police precincts or small school districts seemed redundant. Consolidation was in vogue. However, some of Vincent Ostrom’s earlier research and Lin’s studies of police departments challenged that conventional wisdom.
“The consistent finding from this series of studies was that small and medium-size police departments perform more effectively, and frequently at lower costs, than large police departments serving similar neighborhoods,” she told the World Bank in 2009. Public safety was not something to be imposed on a community. Rather public safety was a service that was co-produced by police and the community members. Ostrom noted that other scholars found similar benefits from decentralization in schools and other government services.
But what the Ostroms found was more complex than simply devolution. The Ostroms, particularly Vincent, saw success in what they termed “polycentric” systems. In his classic article with Tiebout and Warren, Vincent Ostrom wrote:
“‘Polycentric’ connotes many centers of decision-making which are formally independent of each other. To the extent that they take each other into account in competitive relationships, enter into various contractual and cooperative undertakings or have recourse to central mechanisms to resolve conflicts, the various political jurisdictions in a metropolitan area may function in a coherent manner with consistent and predictable patterns of interacting behavior.”
The Ostroms showed that we are not limited to binary choices between local versus centralized governance; or “the market” versus “the state.” In between these extremes lies a vast array of civil society institutions at various scales. In her Nobel Prize address, Lin said, “We need to ask how diverse polycentric institutions help or hinder the innovativeness, learning, adapting, trustworthiness, levels of cooperation of participants, and the achievement of more effective, equitable, and sustainable outcomes at multiple scales.”
The lessons from these two lines of research – local institutions for governing commons and polycentric governance across scales – led Ostrom to tackle the most vexing challenge of global commons: climate change. As far back as 1992, Ostrom and her colleague Michael McGinnis applied lessons from commons governance and polycentricity to climate change. Policy makers, heading to the 1992 Earth Summit in Rio de Janeiro, talked of a global solution for climate change. Ostrom and McGinnis, however, were skeptical of such top-down solutions. “The current emphasis on global solutions based on international conventions meant to establish institutions to manage environmental change,” they wrote, “may be fundamentally misguided.”
Ostrom did not formally return to the climate question until 2009, when the World Bank asked her to brief them on climate change as “a crisis of the commons.” Again, she turned to her work on polycentric governance as a way forward. “The advantage of a polycentric approach is that it encourages experimentation by multiple actors, as well as the development of methods for assessing the benefits and costs of particular strategies adopted in one setting and comparing these with results obtained in other settings.”
Ostrom passed away in 2012, as did her husband. She did not live to see the Eiffel Tower lit up green as world leaders signed the Paris Agreement on climate change. The Paris Agreement largely follows Ostrom’s approach to polycentric climate governance. It relies on nationally determined reductions in carbon emissions. Countries evaluate one another’s pledges and prod each other to be more ambitious. National and subnational governments can experiment with carbon taxes, cap-and-trade programs, and technical standards. Just as the public entrepreneurs of the West Basin created and enforced rules for managing their shared groundwater resource, the Paris Agreement creates a framework for public entrepreneurs across boundaries and scales to tackle the climate crisis. The Paris Agreement encourages a unified response to the climate crisis, but not a uniform one.
The Ostrom Workshop at Indiana University and devotees of “The Bloomington School of Political Economy” continue to refine Lin and Vincent’s ideas. Researchers are finding new applications for Ostrom’s ideas, such as commons in space and the digital world.
Ostrom and her colleagues were empiricists, but their empirical studies confirmed her belief in the potential of people to solve their own problems. “Humans are neither all angels nor all devils,” Ostrom said in a 2009 interview. “It is the context, and the institutional context, in which they find themselves that enables them to have…more willingness to use reciprocity, to trust one another, and to be in a situation that I trust you and you trust me and I won’t be a sucker.” In her Nobel address, Ostrom concluded that “a core goal of public policy should be to facilitate the development of institutions that bring out the best in humans.”
About the Author
Erik Nordman is a professor of natural resources management at Grand Valley State University in Michigan, USA and the author of The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action. Click here for more information about his research and teaching activities.