Awards to Applaud

by Don Boudreaux on October 12, 2009

in Complexity & Emergence, Economics, Law

Apart from issuing my now-annual October lament that Armen Alchian and Gordon Tullock still do not have Nobel Prizes, I applaud this year’s selection of Elinor Ostrom and Oliver Williamson.  Williamson’s 1985 book The Economic Institutions of Capitalism remains a classic that repays careful study, even in 2009.  And Ostrom’s work on how people often solve public-goods problems voluntarily is too often overlooked — until today, that is!

Here’s the the Royal Swedish Academy of Sciences on Ostrom’s work:

The main lesson is that common property is often managed on the basis of rules and procedures that have evolved over long periods of time. As a result they are more adequate and subtle than outsiders — both politicians and social scientists — have tended to realize. Beyond showing that self-governance can be feasible and successful, Ostrom also elucidates the key features of successful governance. One instance is that active participation of users in creating and enforcing rules appears to be essential. Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctioning are the responsibility of the state and should be conducted by public employees.

And here’s a new book by the Mercatus Center’s Paul Dragos Aligica and my colleague Pete Boettke on “the Bloomington School,” of which Lin Ostrom is a defining figure.

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Anonymous October 12, 2009 at 4:26 pm

Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders.

This seems very Hayekian.

Matt October 12, 2009 at 4:43 pm

Yes, that was my first thought too. Here is a sentence from the Amazon product description:

“In contrast to the proposition of the tragedy of the commons argument, common pool problems sometimes are solved by voluntary organizations rather than by a coercive state.”

Sounds like the result of human action and not of human design to me.

D. Watson October 12, 2009 at 6:55 pm

I’m glad to see a familiar take on this over here. Most of the commentary I’ve read has been about showing us solutions to market problems full-stop. I read it as solutions that don’t involve government.

Anonymous October 13, 2009 at 1:31 am

Don – one has to wonder why it wasn’t Tullock and Buchanan. I’ve never been able to really separate their work that much. And Arme did as much as anyone to talk about market imperfections resulting from asymmetric information as anyone (btw does anyone still miss his Principles text?). I’ll have to side with David Warsh’s comments here:
In particular why not Krugman + Helpman would have seemed appropriate. But the one I really regret, now that it’s now longer possible (aside from John Maynard of course) is Mancur Olson. Given your neck of the woods that seems like close to home.

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