Ostrom presents speech in Stockholm

Ostrom and “The Commons”:

What are “Common Pool Resources”?
Natural resources accessible to many users – like pastures, forests, fisheries and groundwater basins – that contain qualities of both public and private goods. Like public goods, CPRs are shared; like private goods, CPRs are “rivalrous” – one person’s use of the good limits or subtracts from someone else’s use of the good.

Traditional theory on CPRs
Users of shared common resources like pastures will inevitably destroy the commons, a theory based on Garrett Hardin’s famous 1968 essay, “The Tragedy of the Commons.” Only government control or private ownership will preserve CPRs – any other arrangement leads to total depletion of the resource.

Ostrom’s research on CPRs
Communities across the globe have developed many different types of systems for managing CPRs that are beyond government oversight or privatization. Rather, the commons are managed through cooperation and collective action among individuals within the community, and the systems vary depending on the environment in which they exist.

Nobel Prize Award Ceremony
WHEN 10:30 a.m. Thursday
WHERE Stockholm Concert Hall, Sweden
MORE INFO For a live Web cast of the ceremony, go to www.nobelprize.org/award_ceremonies/ceremony_sthlm/video/2009/index.html. A separate ceremony will take place in Norway for the Nobel Peace Prize. This ceremony will be streamed live online along with the other prize ceremony.

Examples of Ostrom’s field studies:

Nepal irrigation systems
Ostrom and her team of researchers from the workshop compared systems designed by engineers costing millions of dollars with very primitive systems built by farmers. They found the farmer systems actually reached more crops, were less expensive to operate and carried water the farthest. The farmers’ irrigation system is an example of managing a common pool resource, water, without the oversight of government or private entities.

Forest management research
Ostrom and colleagues developed the International Forestry Resources and Institutions Research Program, the only interdisciplinary, long-term research program studying forests and social-ecological conditions in Africa, Asia, Latin America and the U.S. Among her team’s “surprising findings” are that when a forest’s users, rather than government, monitor and manage harvesting activity, the forests are sustainable.


Elinor Ostrom condensed four decades of tireless economic legwork to 30 minutes in her Nobel Lecture.

Ostrom’s lecture, delivered in the Aula Magna at Stockholm University and broadcast live on the Nobel Web site on Tuesday, focused on the mechanisms by which human societies cooperatively use common resources.

Ostrom won the Nobel Prize in Economics on Oct. 12 and will accept the prize at 10:30 a.m. Thursday in Stockholm. She co-founded IU’s Workshop in Political Theory and Policy Analysis with her husband, Vincent Ostrom, in 1973, and has worked there ever since.

She is currently the Arthur F. Bentley Professor of Political Science and senior research director at the workshop.

In her Nobel Lecture on Tuesday, Ostrom framed her body economic scholarship with a short but immensely complex question.

“Are rational individuals helplessly trapped in dilemmas?”

Discussing human behavioral theories and her 1960s dissertation, Ostrom explained how her research has changed the way economic scholars perceive individuals’ ability to self-govern and work cooperatively.

“When I did my graduate work in economics and political science, there was a very simple world,” she said. “There was one type of individual, two types of optimal organizations, and two types of goods, period.”

The one type of individual was the “helpless” type, the two optimal organizations were government and private ownership, and the two types of goods were public and private.

“We added common pool resources,” Ostom said, crediting her colleagues and the workshop for their interdisciplinary, real-world approach to understanding how communities self-govern. “That type of resource shares the attribute of subtractability with private goods and the difficulty of exclusion with public goods.”

She cited examples of common resources like forests, water systems, fisheries and the global atmosphere, and said she and her team of researchers have discovered different systems around the world for how societies manage the commons.

“The key central point is her work on common pool and how she reestablished the common pool structure as a feasible way of thinking about and managing resources,” said Jacqui Bauer, assistant director of the workshop.

She said Ostrom’s decades of field studies and laboratory experiments are difficult to summarize because they involve so many facets of economic governance.

Bauer said Ostrom conducts both field studies and laboratory experiments to support her findings about individuals’ ability to devise complex systems of economic governance.

“They structure these very specific scenarios,” Bauer said of the workshop’s laboratory experiments. “Given the ability to consume some sort of resource, if people were not allowed to talk to each other then they depleted the resource. And if they were given the ability to communicate they would be able to work out an agreement.”

Ostrom said the theory she first examined as a graduate student in the 1960s is no longer valid.

“The theory of rational but helpless individuals has not been supported,” she said in her speech. “We’re learning to trust others, and if there is a five-letter word that I’d like to repeat and repeat, it’s trust.”