Elinor Ostrom, Scholar Who Argued for Decentralization, RIP

Elinor Ostrom, an economist and political scientist famous for exploring how local groups manage natural resources, has died of cancer at age 78. Paul Dragos Aligica explained one of Ostrom's core ideas here in Reason in 2009, when she won the Nobel Prize in economics:

When economists show that market arrangements fail, they usually make the simple recommendation that "the" state should take care of these problems. Elinor Ostrom has demonstrated empirically that "the" state may not be "the" solution. Her work argues for the wisdom of institutional diversity, looking to individuals to solve problems rather than relying on top down, one-size-fits-all solutions. The conventional wisdom assumes that natural resources and environmental problems should be solved in a centralized—and if possible, global—manner. Through innovative analysis in the field, in the experimental laboratory, and in theory, Ostrom's work has shown that creative solutions to problems such as the depletion of common pool resources exist outside of the sphere of national governments….

Ostrom has explored a new domain of the complex institutional reality of social life—the rich institutional arrangements that are neither states nor markets. These are for-profit or not-for-profit entities that produce collective goods for "collective consumption units." Examples of such "consumption units" abound. They are small and large, multi-purpose or just focused on one good or service: suburban municipalities, neighborhood organizations, condominiums, churches, voluntary associations, or informal entities like those solving the common-pool resources dilemmas studied and documented by Ostrom around the world. Yet, once the functional principle behind them was the identified, the very diverse forms could be understood as part of a broader pattern, and the logic of the institutional process involved could be revealed with relative ease. They could be seen as a "third sector" related to but different from both "the state" and "the market."

Landing somewhere between Hayek and Kropotkin, Ostrom advocated "polycentric governance"—in the words of her husband and frequent collaborator Vincent, a system where "many elements are capable of making mutual adjustments for ordering their relationships with one another within a general system of rules where each element acts with independence of other elements." The Ostroms applied these ideas to areas ranging from local government to climate change, pushing back against the idea that (in Elinor's words) "without a hierarchical government to induce compliance, self-seeking citizens and officials would fail to generate efficient levels of public goods." In fact, they found, a patchwork of private organizations and "multiple governmental units without a clear hierarchy" regularly outperformed centralized systems.

We've run several items about Ostrom here at Reason—besides the Aligica article quoted above, she was praised by Ron Bailey here and by John Stossel here and here. Radley Balko found her spirit in a scene from Curb Your Enthusiasm here, and I mentioned an essay that used her work to illuminate urban parking habits here.