Aligica, and Richman, and Rizzo on Ostrom

This reminds me a lot of The End of Laissez Faire, where Keynes wrote "I believe that in many cases the ideal size for the unit of control and organisation lies somewhere between the individual and the modern State". He goes on to describe his major example of the infamous "socialization of investment" (namely, joint stock companies) as an example of a situation where social coordination is necessary, but neither the government nor the individual interacting in the market is up to the task (this case is of course more along the lines of Williamson's research than Ostroms).

And now that I reread this passage that was lampooned in an article linked in an earlier blog post: "Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these. Experience does not show that individuals, when they make up a social unit, are always less clear-sighted than when they act separately."

It seems to fit in perfectly with what Aligica is describing in Ostrom's own research. People have this tendancy to read "state" where Keynes writes "social unit", but there's no reason to read it that way. I really think Ostrom is the culmination of a very old line of thinking that recognizes the state and the market as being important, but also recognizing that that's not quite a complete picture.