Slides for The Uncommon Knowledge of Elinor Ostrom

Chapter 1 What’s So Tragic About the “Commons”?

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© Erik Nordman, Ph.D. , 2021

Hardin’s Tragedy of the Commons is a parable about the destruction of a shared resource.

1968 – Science magazine Village has a common pasture • Each villager can bring own animals • A patch of grass eaten by one animal is unavailable for other animals

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What are the benefits and costs of grazing on the commons?

What are the benefits of adding another animal to a villager’s herd?

What are the costs of adding another animal to a villager’s herd?

Who gains the benefits?

Who pays the costs?

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The rational herder will bring more animals to the commons.

Individual herder gets the benefits Costs are shared among all Totally rational to add more animals

Result: overgrazed commons

Photo by Joe Pregadio on Unsplash

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According to Hardin, any “commons” will be overused.

Many resources have the attributes of a “commons” • Hard to exclude users • Depletable (“rival”)

What are some other examples of commons that have been overused and degraded?

Photo by 童 彤 on Unsplash

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Are there technical solutions to the tragedy of the commons?

Different animals or breeds?

Apply fertilizer?

Degraded commons Photo by 童 彤 on Unsplash

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Photo by Eric Schroen on Unsplash

Photo by Etienne Girardet on Unsplash

Hardin’s gloomy conclusion was reminiscent of Malthus.

“Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.”

-Garrett Hardin

Photo by Martin Zangerl on Unsplash

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Hardin used “tragedy” in the classical Greek sense.

“The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things.”

People are trapped and cannot escape their fates.

https://www.audiobooks.com/audiobook/oedipus-rex-king-of-thebes/313006

© Erik Nordman, Ph.D. , 2021

Hardin offered two solutions to avoid the “tragedy.”

Private property

Top-down government intervention But are resource users really trapped?

Are privatization or government intervention the only solutions?

Photo by Darren Wanliss on Unsplash

© Erik Nordman, Ph.D. , 2021

https://www.michigan.gov/dnr/0,4570,7-350-79136_79772_81097---,00.html

Hardin’s “Tragedy” focused on one particular issue: human population.

“The population problem has no technical solution; it requires a fundamental extension in morality.”

“Freedom to breed is intolerable.”

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Hardin suggested imposing restrictions on reproduction.

“The Universal Declaration of Human Rights describes the family as the natural and fundamental unit of society.

It follows that any choice and decision with regard to the size of the family must irrevocably rest with the family itself, and cannot be made by anyone else.”

“If we love the truth we must openly deny the validity of the Universal Declaration of Human Rights, even though it is promoted by the United Nations.”

This Photo by Unknown Author is licensed under CC BY-SA

© Erik Nordman, Ph.D. , 2021

Hardin’s statements lead to eugenics: who gets to reproduce? “...if, thus, overbreeding brought its own "punishment" to the germ line then there would be no public interest in controlling the breeding of families…

In a welfare state, how shall we deal with the family, the religion, the race, or the class (or indeed any distinguishable and cohesive group) that adopts overbreeding as a policy to secure its own aggrandizement?”

© Erik Nordman, Ph.D. , 2021

Restrictions on “overbreeding” apply to the poor, marginalized – not the rich.

Global population growth is slowing.

Many countries have very low or negative population growth.

“Has any cultural group solved this practical problem at the present time, even on an intuitive level? One simple fact proves that none has: there is no prosperous population in the world today that has, and has had for some time, a growth rate of zero.”

This Photo by Unknown Author is licensed under CC BY-NC-ND

© Erik Nordman, Ph.D. , 2021

https://ourworldindata.org/future-population-growth

What accounts for slowing population growth?

Empowering women.

Key factors: • Improved child health • Improved maternal / reproductive health • Improved access to education for girls • Improved economic opportunities for women Coercive policies were not needed!

© Erik Nordman, Ph.D. , 2021

Resources can be described in terms of rival and exclusive.

Rival: only one person can use the resource at a time

Exclusive: can keep others out

Rival

Non-rival

Exclusive

Private goods

Club goods

Non-exclusive

Commons / Open access resources

Pure public goods Also: consider these on a continuum rather than discrete categories

Note: “Rival” is sometimes replaced with “depletable” or subtractable”

© Erik Nordman, Ph.D. , 2021

Photo by Mae Mu on Unsplash

https://www.hbo.com/

Open access resources tend to be overused.

Public goods tend to be underprovided.

1965 – Mancur Olson’s Logic of Collective Action Free riders

Conventional wisdom: people organize to obtain benefits they can’t get as individuals

Don’t contribute to public good

BUT If benefits are small and diffuse, AND costs of organizing are substantial THEN Nobody will organize – benefits are missed – everyone worse off © Erik Nordman, Ph.D. , 2021

Can’t exclude them from benefiting

https://en.wikipedia.org/wiki/Mancur_Olson

The “logic of collective action” is the flip side to the “tragedy of the commons.”

In both cases, it is assumed that rational people will act selfishly.

People are trapped by their circumstances.

They will either: • Overuse an open access resource • Underprovide a public good “Only” solutions: • Privatize the resource • Have government impose regulations (OA/commons) • Have government provide the resource (public good)

But are people really doomed to act selfishly?

Are these the only solutions?

Or can people collaborate?

© Erik Nordman, Ph.D. , 2021

Photo by The Creative Exchange on Unsplash

Chapter 2 Los Angeles Groundwater

© Erik Nordman, Ph.D. , 2021

Los Angeles relies on surface and groundwater for its needs.

Los Angeles is relatively dry Needed water to support growth Pumping Surface water: • Aqueduct • Colorado River Groundwater: • Clean • Cheap • Storage

© Erik Nordman, Ph.D. , 2021

Wells

Recharge

fresh Ocean water

salty Los Angeles groundwater system

If groundwater is depleted, salty water intrudes and ruins the aquifer.

fresh Ocean water

salty

fresh

salty

Saltwater intrusion began in 1912 and worsened.

© Erik Nordman, Ph.D. , 2021

Communities entered a “competitive pumping race.”

No community had an incentive to slow its pumping.

© Erik Nordman, Ph.D. , 2021

Rival

Non-rival

Exclusive

Private goods

Club goods

Non-exclusive

Commons / Open access resources

Pure public goods

Ostrom graduated from UCLA with honors – but was rejected by the graduate program in economics.

Bachelor’s degree in political science Graded papers for the Economics Department Department discouraged women from taking advanced math classes BUT that math was required for economics

© Erik Nordman, Ph.D. , 2021

Economics Department rejected her grad application

University demanded that Political Science Department admit a cohort of 4 women

“I was studying the commons from the beginning, but I didn’t know it.” –E. Ostrom Ostrom was a political scientist.

Interested in governance institutions – formal and informal rules.

Student in early 1960s - Before Hardin’s article Attended grad school after her divorce.

Future husband Vincent Ostrom was a professor.

© Erik Nordman, Ph.D. , 2021

Photo credit: Lilly Library, Indiana University

How do “public entrepreneurs” creatively solve collective action problems?

Study area: LA groundwater

The pumping race was a basin-wide problem.

It needed a basin-wide solution.

Cooperation was the key.

1946: West Basin Water Association formed Other associations formed later to address related issues

Share information Photo by Giulia May on Unsplash

© Erik Nordman, Ph.D. , 2021

https://www.wbwa.info/about_us

Build trust Photo by Joshua Hoehne on Unsplash

Avoid “all or nothing” court decisions Photo by Bill Oxford on Unsplash

By working together, the communities sustained the West Basin’s groundwater resource.

2019 pumping rate was below the “safe yield” set in 1952.

Pumping

Ostrom framed her research as municipal governance.

1970s: studied other forms of self-governance in cities 1980s: Returns to LA groundwater and other natural resource commons

© Erik Nordman, Ph.D. , 2021

Wells

fresh Ocean water

salty

Recharge

Chapter 3 Maine’s Lobster Gangs

Photo credit: Ostrom Workshop, Indiana University

© Erik Nordman, Ph.D. , 2021

Photo © Jason Reblando

Ostrom won the 2009 Nobel Prize Economics for showing how communities can avoid the Tragedy of the Commons.

Conventional wisdom: Resource users are trapped.

Only remedies: • Government intervention • Privatization BUT There is another way!

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Maine’s lobster harvesters showed Ostrom how people could manage their own resources.

Key elements • Craggy coast • Lobster biology Most lobsters harvested in harbors and bays Harvesters tend to work the harbors in which they live

© Erik Nordman, Ph.D. , 2021

Lobsters are harvested using a baited trap or “pot.”

Trap sits on ocean bottom Buoy marks the location Each harvester has own unique buoy color Lobsters must be: • Not too small • Not too big • Not bearing eggs

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Egg-bearing females • Part of breeding population • Cut v-notch in tail • Throw back • Notched lobsters without eggs thrown back

“Harbor gangs” establish and enforce rules about harvesting lobsters.

Harvesters encourage compliance with state regulations.

Legal enforcement is difficult.

Cultural enforcement is strong.

“You’re not managing fish and frogs.You’re managing people.”

-Dr. Jim Acheson Photos © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Harvesters defend their territory against incursions.

Entry to the group is limited.

Each lobster harvester has a territory within a harbor.

Each “harbor gang” defends harbor boundary against neighbors.

https://www.mdislander.com/maine-news/dmr-pursues-vandals-blue-hill-bay-trap-war

© Erik Nordman, Ph.D. , 2021

https://bangordailynews.com/2019/04/24/news/hancock/__trashed-6/

“You take care of your lobsters, and they will take care of you.”

Competition driving lobsters to brink of extinction

Cooperation (and other factors) makes lobsters among the most sustainable harvests

https://www.bloomberg.com/opinion/articles/2017-05-18/maine-is-drowning-in-lobsters

© Erik Nordman, Ph.D. , 2021

Discussion question: How do Maine’s “lobster gangs” align with Ostrom’s design principles?

1. The physical and social boundaries are clearly defined.

5. Graduated penalties can be imposed on rule-breakers.

2. Locally tailored rules define resource access and consumption.

6. Conflict management institutions are accessible.

3. Individuals who are most affected by the rules can participate in rule-making.

7. Authorities recognize a right to self-organize.

4. Resource monitors are accountable to resource users.

© Erik Nordman, Ph.D. , 2021

8. Complex systems are organized into layers of nested governance.

Chapter 4 Spain’s Ancient Water Court The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Ostrom’s research focused on institutions.

Institutions: “The prescriptions that humans use to organize all kinds of repetitive and structured interactions.”

More formal

Less formal

Laws Policies Rules Norms Expectations of behavior

El Tribunal des les Aigües (El Tribunal de las Aguas) Valencia’s Water Court A good example of a formal institution Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

The history of Valencia’s irrigation community goes back more than 1,000 years.

5th Century CE Arab and Berber farmers from North Africa migrate to Spain Brought a well-developed water culture

© Erik Nordman, Ph.D. , 2021

Once made of earth and wood, modern canals are made of concrete with metal gates.

Earthen canals required collaboration for construction and maintenance

Some elements of original structures remain, like this llengüeta that divides the main canal into two branches

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Ostrom identified eight “design principles” for sustaining a common-pool resource.

1.The physical and social boundaries are clearly defined.

2. Locally tailored rules define resource access and consumption.

3. Individuals who are most affected by the rules can participate in rule-making

4. Resource monitors are accountable to resource users.

© Erik Nordman, Ph.D. , 2021

All photos © Jason Reblando

Ostrom identified eight “design principles” for sustaining a common-pool resource.

5. Graduated penalties can be imposed on rule-breakers.

6. Conflict management institutions are accessible.

7. Authorities recognize a right to self-organize.

8. Complex systems are organized into layers of nested governance.

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Governing a commons is messy and complicated, and doesn’t always succeed.

Communities that can establish institutions that follow the eight design principles have a good shot at success.

All photos © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Chapter 5 Institutions for Collaborative Forest Management The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Ostrom was influenced by several scholars of forest commons.

“The challenge for society is to figure out how to eliminate circumstances in which rational individuals will make decisions that lead inexorably to tragedies of the commons, essentially to create greater overlap and synchrony between private good and public good.”

-Margaret McKean, 1982

https://scholars.duke.edu/person/mamckean

© Erik Nordman, Ph.D. , 2021

In Japan, many rural villages managed common lands called iriai.

Short video introduction to iriai Thatch for roofs Fodder for animals Wood for furniture, fires Rules for ownership and use differed • By resource • By village Rice paddies and fruit orchards • Yield income for whole village • Direct group control

© Erik Nordman, Ph.D. , 2021

https://youtu.be/qZGtzvOHzRA

Enforcement was important in iriai.

Society valued collective responsibility “Everything was everybody’s business” Young men recruited to patrol commons Violations may require payment • Cash, sake, horse • Formal apology from family • Varies by severity

Photo by niu niu on Unsplash

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McKean came to several conclusions about Japanese mountain commons.

1. Regulations must bear a strong connection to sustaining the commons

Villagers created and enforced rules for managing commons!

2. Must treat all users fairly

“…it is not necessary for regulation of the commons to be imposed coercively or from the outside.”

3. Penalties must be clear and enforced 4. Graduated penalties bring swift justice

© Erik Nordman, Ph.D. , 2021

Rules and norms are shortcuts that enable the governing of community life.

Open access: few or no rules, weak or no enforcement Commons: community agrees on and enforces rules about access, use “Open access arrangements lead to many perverse results when used with any type of good.

Common property arrangements may, on the other hand, work very well in helping individuals to manage some common pool resource systems.”

-Ostrom, 1985

© Erik Nordman, Ph.D. , 2021

International Forestry Resources and Institutions (IFRI) Project studied forests around the world.

500 forests 18 countries Four continents *Standardized data collection technique*

Single case studies  intentional, systematic, and large scale analysis © Erik Nordman, Ph.D. , 2021

http://ifri.forgov.org/

IFRI methodology based on the Institutional Analysis and Development Framework The choices people make in a situation depend on a multitude of factors that interact in a structured and predictable way.

© Erik Nordman, Ph.D. , 2021

Inside the Action Situation (see diagram in previous slide)

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May Creek Farm was an IFRI research site.

An “intentional community” established in 1976 Individual home sites but common forest Established rules for using common forest resources

Sara Steffey, one of the founders of May Creek Farm Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

May Creek’s institutions for managing the common forest and land changed over time.

Residents move on New people move in Institution must adapt

Nancy Lethem, her daughter, and grandson represent three generations of “Creekers” Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Chapter 6 The Climate Commons The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

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The climate system is a global commons.

Most of Ostrom’s work focused on local commons – fisheries, forests, etc.

In what ways is a global commons different from or similar to a local commons?

Do the design principles apply to global commons, like the climate system?

© Erik Nordman, Ph.D. , 2021

Polycentric governance is a cornerstone of both Elinor and Vincent Ostrom’s research.

Polycentricity A social system that has many centers of decision making, each acting somewhat independently but under a common set of guiding principles.

The US government’s federal structure, with both governing bodies at the national and state levels, is an example of polycentrism.

Term coined by social scientist Michael Polyani in the 1950s, originally to describe the social process of scientific discovery (“republic of science”).

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Ostrom, with colleague Michael McGinnis began working on the climate commons in 1992.

Skeptical of “one-size-fits-all” global solutions “The current emphasis on global solutions based on international conventions meant to establish global institutions to manage environmental change may be fundamentally misguided.”

Can national and sub-national governments devise creative institutional arrangements to address climate change in a polycentric manner?

Photo by Elena Mozhvilo on Unsplash

© Erik Nordman, Ph.D. , 2021

“Climate change requires a unified response but not a uniform one.”

“Given the severity of the threat, simply waiting for resolution of these issues at a global level, without trying out policies at multiple scales because they lack a global scale, is not a reasonable stance. . . .

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.”

© Erik Nordman, Ph.D. , 2021

The structure of the 2015 Paris Agreement is largely polycentric.

Goal: Avoid dangerous anthropocentric interference in the climate system Politicians: “Give me a number.”

• No more than 2°C, strive for no more than 1.5°C of additional warming • Somewhat arbitrary Each country pledges to reduce emissions by an amount it determines on its own “nationally determined contribution (NDC) Pledges are reviewed by peer countries. Countries with weak pledges are encouraged to be more ambitious. © Erik Nordman, Ph.D. , 2021

How do you enforce a voluntary agreement?

Paris Agreement has no enforcement mechanism.

But in some ways, all international agreements are voluntary.There is no global police to enforce them.

But there can be consequences: • “Name and shame” • Trade sanctions • Defense agreements (e.g. NATO) What about a “race to the top” – first to decarbonize?

© Erik Nordman, Ph.D. , 2021

Trust and reciprocity are the key to resolving collective action problems.

“Collective action is the name for a lot of social dilemmas where if I’m a good guy and I really contribute but all the other people that I’m interacting with don’t, I become a sucker.

And so, the theory earlier said because you’re worried about being a sucker, you won’t do anything.You’ll just be really narrow and selfish.

Well, if I trust others to reciprocate, any action I make helps them, then all of us could be much better off!”

-Elinor Ostrom, 2009

© Erik Nordman, Ph.D. , 2021

Chapter 7 Voluntary Environmental Programs The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

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Regulations set a minimum legal standard. Can we encourage companies to move “beyond compliance?”

A building constructed to code, “in all actuality is the worst building you can legally build. People act like code is good. But code is the bare minimum building you can build legally.”

-Cheri Holman, US Green Building Council, West Michigan Chapter Just barely meeting air quality standards = worst air quality you can legally have.

Need to do better than minimum, but passing new laws with stricter standards is difficult.

© Erik Nordman, Ph.D. , 2021

Aseem Prakash and Matthew Potoski came up with the “club theory of voluntary programs.”

Conventional wisdom: • Pollution controls cost money and decrease profits • Firms invest in as little pollution control as possible

Prakash was one of Ostrom’s graduate students

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Too simple!

Life is much more complex

Other factors may entice a firm to go “beyond compliance”: • Efficiency can lower costs and pollution • Reputation improves by being a “good corporate citizen” • Streamlined permitting • Access to better information, markets, etc.

Labels are one form of “beyond compliance” practice.

Product meets a certain standard Qualifies for a special label Consumers might pay a premium for it?

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A club’s success depends on how strict its standards and enforcement are.

Club B • Strict standards • Strong enforcement • Few firms join • Little overall impact

Club C • Moderate standards • Moderate enforcement • Goldilocks scenario • Best potential impact

B

Enforcement 

Club A • Lax standards • Low enforcement • Easy to join • Little impact

C

A

Strictness of standards 

© Erik Nordman, Ph.D. , 2021

2030 Districts are an example of a voluntary environmental club.

City forms a district Invites building owners to participate 2030 Challenge Reduce by 50% by 2030 • Building energy use • Building water use • Transportation CO2 emissions Compared to a national baseline

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Why would building owners join a 2030 District?

Enhanced reputation Sharing best practices Access to services, information Friendly competition Behavioral contagion (peer effects in behavioral economics)

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Chapter 8 Commons in Space The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

© Erik Nordman, Ph.D. , 2021

Space consists of many types of resources.

Satellites Orbital space (slots) Radio frequencies to communicate with satellites

May be: • Private goods • Public goods • Commons • Club goods

Asteroids & minerals Moon, Mars, and beyond

Photo by NASA on Unsplash

© Erik Nordman, Ph.D. , 2021

Some space resources will be essentially private goods.

Rival or depletable Exclusive – if property right clearly defined Economics of mineral resources – Hotelling rule?

Source: NASA/Goddard/University of Arizona

© Erik Nordman, Ph.D. , 2021

Source: NASA

Property rights for space resources are complicated!

Outer Space Treaty

Antarctic Treaty System – 1959 • Signatories shall not assert territorial claims or sovereignty in Antarctica • A place for peaceful and scientific purposes

© Erik Nordman, Ph.D. , 2021

Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies Prevent "a new form of colonial competition" in space

No nation can assert territorial claims on Moon, other resources

The Moon Agreement is contentious.

Most space powers are not signatories.

“Moon and its natural resources are the common heritage of mankind…” “common heritage” ≠ commons Moon’s natural resources shall not “become the property of any State, international intergovernmental or non-governmental organization, national organization or nongovernmental entity or of any natural person.”

© Erik Nordman, Ph.D. , 2021

Other space resources may be commons.

Low Earth orbit • Rival (depletable) • Non-exclusive Many objects in orbit • Active satellites • Defunct satellites • Debris (space junk) HOWEVER Space resources are not common property in the legal sense https://maps.esri.com/rc/sat2/index.html

© Erik Nordman, Ph.D. , 2021

Commons or open access

Space junk is a form of pollution.

Few incentives to de-orbit defunct satellites or remove debris

Voluntary compliance?

Prescriptive regulations?

Market-based approaches?

© Erik Nordman, Ph.D. , 2021

Collaboration is critical to managing a space commons.

Collisions happen!

• Collisions make more debris • Cascading collisions  Kessler syndrome Must coordinate launches, orbits Ostrom’s ideas for governing commons may apply

© Erik Nordman, Ph.D. , 2021

Collision monitoring is analogous to a space lighthouse.

Lighthouse • Classic public good • Non-rival (non-depletable) and non-exclusive Collision monitoring • Threat to one object is a threat to all • Difficult to exclude users • “Space situational awareness”

© Erik Nordman, Ph.D. , 2021

Governments still play a major role, but the private sector is increasingly active.

Orbital debris monitoring

Transporting cargo to ISS

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Satellites for • Communication • Observation

Chapter 9 Commons in the Digital World The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Information can have attributes of commons and public goods, especially in the digital environment.

Linux and Mozilla Firefox are examples of free and open source software (FOSS)

© Erik Nordman, Ph.D. , 2021

Free and opens source software is free to use, modify, and distribute.

Why would people make it?

Seems to violate basic economic principles Similar to questions about voluntary environmental programs FOSS products are pure public goods • Non-rival (non-depletable) • Non-exclusive • Usually underprovided by markets

Photo by Chris Ried on Unsplash

© Erik Nordman, Ph.D. , 2021

People write and share FOSS code for a variety of reasons.

Direct personal benefit Avoid paying for more expensive software Reputation – contributing to the community FOSS code might be free – but companies may pay coders to write it Photo by Alvaro Reyes on Unsplash

© Erik Nordman, Ph.D. , 2021

A library is a share resource of information.

It can be defined by institutional rules and property rights.

Who has access to the information?

Who can modify the information?

Who makes the rules about accessing information?

These harken back to Ostrom’s design principles for managing a commons.

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

FOSS products can be an alternative to those created by governments or by market actors.

FOSS products must be updated – tended like a garden “The tragedy of the commons comes when there are insufficient human resources available to continue to further develop and maintain the software and, as a result, the software project becomes abandoned.”

-Charles Schweik and Robert English Institutions, therefore, are critical in maintaining the software.

Photo by Joey Genovese on Unsplash

© Erik Nordman, Ph.D. , 2021

FOSS products are an example of a “peer production commons.”

A form of knowledge coproduction Coproduction “…the process through which inputs used to produce a good or service are contributed by individuals who are not ‘in’ the same organization.” “…citizens can play an active role in producing public goods and services of consequence to them.”

(Ostrom 1996) Photo by "My Life Through A Lens" on Unsplash

© Erik Nordman, Ph.D. , 2021

Complex systems – including social-ecological systems and knowledge commons – require control and communication.

Each of Ostrom’s design principles addresses either control or communication Control and communication was the basis for the scientific field of cybernetics

Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Internet governance also requires control and communication.

No global government to set the standards Users must agree on the language computers will use to communicate Cyberspace has many challenges of an unregulated commons • Unclear property rights • Exclusion is difficult • Can be depleted by “digital pollution” like unwanted email (spam), ads, etc.

Workshop director Scott Shackelford works on issues of cybersecurity Photo © Jason Reblando

© Erik Nordman, Ph.D. , 2021

Chapter 10 The Nobel Prize and a Pathbreaking Life The Uncommon Knowledge of Elinor Ostrom: Essential Lessons for Collective Action Erik Nordman, Ph.D.

Photo credit: Ostrom Workshop, Indiana University

© Erik Nordman, Ph.D. , 2021

Elinor Ostrom won the 2009 Nobel Prize in Economic Sciences.

Nobel Committee Prize motivation: "for her analysis of economic governance, especially the commons."

Contribution: Challenged the conventional wisdom by demonstrating how local property can be successfully managed by local commons without any regulation by central authorities or privatization.

https://www.nobelprize.org/prizes/economic-sciences/2009/ostrom/facts/

© Erik Nordman, Ph.D. , 2020

The conventional wisdom was that people could not organize to solve “collective action” problems.

Benefits are concentrated, but the costs are dispersed.

And vice versa.

Garrett Hardin “Tragedy of the Commons” Photo by 童 彤 on Unsplash

© Erik Nordman, Ph.D. , 2020

Mancur Olson “The Logic of Collective Action”

Ostrom’s award took many economists by surprise.

Who is that?

Is that even economics?

“Economists want this to be an economists’ prize…the prize is moving toward a Nobel in Social Science, not a Nobel in economics. I don’t mean to imply this is necessarily a bad thing…just that it will be unpopular among my peers.”

-Steven Levitt, Freakonomics author

© Erik Nordman, Ph.D. , 2020

Ostrom was a political scientist but her interests were broad.

The Ostroms started the Workshop on Political Theory and Policy Analysis

Political economy The theory or study of the role of public policy in influencing the economic and social welfare of a political unit.

-Merriam Webster Dictionary

© Erik Nordman, Ph.D. , 2020

New Institutional Economics Incorporates a theory of institutions - laws, rules, customs, and norms - into economics.

-Ronald Coase Institute.

Ostrom shared the Nobel Prize with Oliver Williamson.

It’s a prize that recognizes institutional economics.

Prize motivation: "for his analysis of economic governance, especially the boundaries of the firm.“ Contribution: Provided a theory of why some economic transactions take place within firms and other similar transactions take place between firms, that is, in the marketplace.

The theory informs us about how to handle one of the most basic choices in human organization. When should decision power be controlled inside an organization, and when should decisions be left to the market.

https://www.nobelprize.org/prizes/economic-sciences/2009/williamson/facts/

© Erik Nordman, Ph.D. , 2020

Mainstream economics emphasizes markets as a tool to allocate resources. But it’s not the only way.

Institutions are the laws, rules, norms, and expectations of behavior.

Communities can develop their own institutions as well.

Valencia’s Water Court enforces rules Photo by Jason Reblando

© Erik Nordman, Ph.D. , 2020

Photo by Renate Vanaga on Unsplash

Ostrom was the first woman to win the Economics Nobel.

Denied entry to grad program in economics.

Faced considerable professional adversity.

Blazed a trail for women in the profession.

“There's no one who's had as much influence as she's had. She deserved that Nobel Prize, even though certain economists don't seem to think so.”

-Jim Acheson, colleague

Photo credit: Ostrom Workshop, Indiana University

© Erik Nordman, Ph.D. , 2020