Elinor Ostrom was awarded the 2009 Nobel Memorial Prize in the Economic Sciences for her analysis of economic governance and commons law. She is the Arthur F. Bentley Professor of Political Science and Co-Director of the Workshop in Political Theory and Policy Analysis at Indiana University in Bloomington and Research Professor and the Founding Director of the Center for the Study of Institutional Diversity at Arizona State University in Tempe. She received her B.A., M.A., and Ph.D from UCLA and is the author of numerous books, including "Understanding Institutional Diversity."
Question: How has being raised in the depression affected you?
Elinor Ostrom: Well, I think being raised during the depression is a very important thing in my generation. I think it meant that I had to learn very early how to work hard and how to be independent and so maybe part of it is that you just learn that you've got to be independent and that the world isn't going to come with you with all sorts of gifts.
Question: Was your family enthusiastic about your field of study?
Elinor Ostrom: Not very enthusiastic. My mother wasn't even enthusiastic about my going to college, but I had good friends in graduate school who were very, very encouraging and I still retain some of those colleagues through all the years, and they made a huge difference.
Question: Was it difficult to find work in your field as a woman?
Elinor Ostrom: Early years it was a challenge to find a position, so in the early years I think being a woman was a big handicap. Pursing the kind of work I have been doing was not very much appreciated across the social sciences, but I just got fascinated with what I was doing and so being a stubborn son of a gun, I just kept going.
Question: How did you deal with opposition from your colleagues?
Elinor Ostrom: Well, trying to do really good field work and then I was very fortunate, I was able, after being a graduate of UCLA during the Vietnam war and eighty entering students and a fair administrative load, I was able to teach my first graduate seminar and I had outstanding graduate students, some of whom have become colleagues and I work with all, have worked with for many years. And I then worked with undergraduate students so that I was able to blend research and teaching in a very active way in Indianapolis studying policing in black communities in Chicago, again studying policing. And that was so interesting that I wasn't so concerned about what my colleagues thought. I just got interested in what I was doing.
Question: How were you treated by your male colleagues?
Elinor Ostrom: Well, it was a big controversy at UCLA in the political science department. They had not had a woman in their program for many years and there were four of us out of forty admitted in the year I was admitted to a doctoral program and there were many of the faculty who were extremely upset. But again, I had many friends that helped me through it.
Question: Do you take issue with those who call your theories “implicitly socialistic”?
Elinor Ostrom: Yes. I don't think they are supporting socialism as a top-down theory. A lot of socialist governments are very much top down and I think my theory does challenge that any top-down government, whether on the right or the left, is unlikely to be able to solve many of the problems of resource sustainability in the world.
Question: Have you experienced a divide in economics?
Elinor Ostrom: There is a strong divide between micro and macro and my theories are all in the micro area. But there's a big challenge in trying to understand why people make the decisions they do and particularly why they make decisions in dilemma-type settings, where our traditional theory had predicted that they would make decisions not to cooperate and they frequently make other decisions.
Question: What are the dangers of this separation between macro and micro?
Elinor Ostrom: Well, I'm more concerned about the broader separation of the social sciences. I think that is a real danger because we can, I call them the silos, if everyone works in their silo, rather than learning from one another, so I work across disciplines and always have. My PhD committee, I had sociology, engineering, economics, and political science on it.
Question: Should the social sciences be more integrated?
Elinor Ostrom: Yes. But it's not integration, it's that people are learning their own discipline. I don't want to get rid of the disciplines entirely, but it is then that people learn how to work together and that the, we have very bad incentives. If you publish outside your discipline, frequently inside your discipline, that's not counted for tenure. And so there are very substantial dis-incentives to do interdisciplinary work. So interdisciplinary and integration are different.
Question: Can you explain your work regarding the tragedy of the commons?
Elinor Ostrom: Well, Mensor, no, sorry, not Mensor, he came later, Gerharten wrote a very stirring article in 1968, published in science, and he imagined a pasture opened to all and posited that if that were the case, then everyone would bring their animals on and they would keep bringing more and more and more and they would eventually overuse the commons. What he went on to say was that they were trapped and could not themselves get out of it. And what our theoretical work and empirical work has shown, is that in many instances, but not all, people have found ways of agreeing on their own rules and extracting themselves from the problem.
Question: Is there an alternative to top-down government or free market solutions?
Elinor Ostrom: Yeah. This is the, this concept of polycentricity of enabling both market and governments at multiple scales to interact with community organization so that we have a complex nested system. and it ain't pretty in the sense that it's nice and neat and many people have tried to get rid of creative solutions that are complex, but society is complex, people are complex. And for us to have simple solutions to complex problems, not a good idea.
Question: Can your research on the commons teach us about climate change?
Elinor Ostrom: If the community at play were only the entire planet and we simply wait until the big guys make a decision, we're in deep trouble. Our theoretical work on polycentricity here is very relevant in that while in any greenhouse gas omission, does have a global effect, it may also have, and usually does, local and regional effects. So we need to be thinking about how to enhance the ways of organizing around the local and regional so as to produce more externalities that are positive at the global.
Question: Have there been any particularly misguided government actions in this area?
Elinor Ostrom: Well, a great number of the policies laid down, let's take the policies for eastern Africa related to the pasture area that the Masai occupied. The Masai had been there for centuries and had figured out a way of grazing over a great distance so that in an area where the rainfall was limited and spotty, they were able to maintain that range land in very good form. It didn't look pretty, as that's the way it was, but if you graze down too far, and then you let some other things come up and don't graze in an area and you get big bushes, then you end up with ruining the functioning of it. Well, when the Brits came in, they gave half of it—well, I shouldn't say that, not half—they gave a very large segment away to colonial farmers and to set up a big reserve. The Kenyan government in the 1950's onward kept giving away, giving away, giving away. They finally created group ranches, but the group ranches weren't large enough to really enable them to maintain the kind of system that worked. They the have been privatizing themselves, the Masai, their land, so it would not be given away again by the government, and working out arrangements so that family and friends can share and they're recreating the movement of the cattle around, and Esther [IB] has done a wonderful job of studying this over time and they may, the local people may again find a way of coping with a very difficult and challenging environment.
Question: If you could have dinner with anybody, who would it be?
Elinor Ostrom: Well, I would like to have a dinner with John R. Commons, who was a very distinguished labor economist at the University of Wisconsin and whose work I've read multiple times and I still assign to my students. He was struggling with trying to understand how to enable labor to organize more effectively and wrote some of the initial legislation for labor law in Wisconsin and elsewhere. And he had a very interesting philosophy about rights having a counterpart to duties. And so if somebody has a right, somebody has to have a duty! And I would love to discuss with him some of those philosophical foundations.
Question: What other industries need to adopt commons-oriented economics?
Elinor Ostrom: Well, all of the water industry in the United States is dealing with a common pool resource and so there are many private and public firms, and many of them do very well and others don't. Some are not good at all.
Electricity is also using common facilities, but both with electricity and water, they both have an arrangement in many cities where when you actually use it, in the household, you now have converted the water in the household to a private good. And so, it is again, showing this difference between the water in the lake or in the river, and the water that's in the pipe and gone into the household and you turn the tap and now it's private good.
Question: How does information on the internet vary from natural resources?
Elinor Ostrom: Okay. We've made a distinction in our work between public goods and common pool of resources. Both of them have a problem of keeping people out, it's difficult to exclude people from a large fishery or an internet. But my use of knowledge does not take away from your use of knowledge, there's no subtractability.
Now, on the internet, there are problems of congestion from time to time and we've been building and building and building so that we keep making it bigger and bigger and the problems of congestion are not as great, but we have problems then when we develop freeware, who is encouraged to do so, how do we give credit where credit's due, and there are lots of people who said, "Oh, you'll never have people contribute to making freeware." Well, wrong. They do. So there's a, there are many similarities, but it is a somewhat different problem and Charlotte Hess and I have been working on that one and Charlie Schwike at University of Massachusetts Amherst.
Question: Does the internet show the benefits of governing by informal rules?
Elinor Ostrom: Well, they're not so informal. Over time, Doug Van Houweling and others who have been involved in developing those rules have tried to be sure that there were reasonable rules and it's a challenge, this is not an easy thing to organize. But people have been working on it very hard. There are problems of scam and all sorts of problems of this sort. But even in farmer's markets around the world, you sometimes will find some people coming in a vegetable stand and having rotten fruit underneath the good fruit. So I don't know any institution that works perfectly in all circumstances.
Question: How does economics differ between renewable and non-renewable resources?
Elinor Ostrom: Yeah, it's a big problem and Gary Libecap has done an excellent variety of very good economic articles on oil wells. And there your problem is timing rather than how much you take out now. Because if you take out oil too fast, the soil around it collapses. And so oil companies have had to invest heavily in getting good technical geologic information and then developing agreements among them as to the way they're going to extract. And to that extent, while the oil is in the ground, it's a common pool. But like water, once it's pulled out, it becomes something that can be packaged. And here, the problem of getting good timing is a very big one. In the Middle East, oil has been run pretty much as an oligopoly and a part of our problem is the pricing of an oligopoly is not necessarily a fair pricing.
On the other hand, we do need to have more resources that are used for heating and transport priced higher, but then can that money go into public coffers that then invest in new solar innovations, wind power, and a variety of other techniques, rather than into an oligopolous pocket.
Recorded on: October 25, 2009