The Nobel Selection

This morning it was announced that Ellinor Ostrom was a co-recipient for the Nobel in Economics. I thought her selection is an exceptional one. Last year's Paul Krugman, certainly deserved the award for his work on trade. His political polemics detract from the award a bit. But Ostrom is a wonderful choice. I am not as familiar with the work of her co-recipient, Oliver Williamson. Williamson was a student of Ronald Coase and has spent his career on transaction costs in firms.

Ostrom's work has focussed on how people deal with the "commons." In 1968 Garrett Hardin published a paper that is a standard in the field of economics (even though Hardin was microbiologist) called the "Tragedy of the Commons." The paper discusses what could happen to common areas where property rights are not well established. His other writings went on to argue that human beings were naturally selfish.

Ostrom has spent her career thinking more carefully about how human beings organize their activities. Her research has suggested a variety of organizing principles which can help us to use resources more effectively. Ostrom's research has pointed the way for solutions to resource allocation principles that fit the needs. Hardin was dogmatic; Ostrom has been creative.

There are two other distinctions relating to Ostrom's award. First, she is the first female to be so honored. But second she is, in the narrow sense of disciplines, not an economist. Her doctoral work was in political science. Obviously, she has not been limited by her discipline. She used skills and knowledge from a variety of disciplines. Since her work has focussed on resource allocation it is more than appropriate that she be recognized for her contributions to economics.

When disciplines began to evolve in American colleges and universities, there was something called political economy - which recognized that the fields of politics and economics were deeply bound together. Ostrom's work and her award are a recital of those linkages.