I was delighted by the news that this year’s Nobel Memorial Prize in Economics went to Elinor Ostrom (along with Oliver Williamson). She’s a maverick, someone who has challenged conventional wisdom in her field for some time. By recognizing her work in understanding resource management systems, the Royal Swedish Academy of Sciences is acknowledging the need for new models and new ways of thinking in economics. It was a bold choice, and I think a very good one.

The subject of her research has long been considered peripheral to the main business of economics. But today, as we face a global recession and a very serious environmental crisis, her work has special resonance. She’s shown that the three dominant economic models used for dealing with collective resource management — the tragedy of the commons, the prisoners’s dilemma, and the logic of collective action — are all inadequate. They are not necessarily wrong, but the conditions under which they hold are very specific. Her research suggests that there are other viable systems that work. For example, she has looked at Swiss grazing pastures, Japanese forests, and irrigation systems in Spain and the Philippines based on sound principles of collective decision-making that are both democratic and empowering to ordinary people.

Ostrom was the first woman to win the economics prize, which is significant. And with the exception of the prize to Amartya Sen (for his work on welfare economics) it’s one of the few awards that have recognized alternatives to the traditional neoclassical economics. I’m confident that her ideas will help us broaden our thinking to make resource management more democratic, more participatory, more community-based, and above all more responsive to everyday citizens.

Read more:

• My review of Elinor Ostrom’s book Governing the Commons