Sveriges Riksbank Prize (Nobel 2009):One For Economics, The Other For A Political Scientist?

LuckyBogey's Blog ^ | October 15, 2009 | LuckyBogey

[luckybogey]

Nobel economists’ work on common ownership shows that markets, not distant governments, manage things better. For the first time, the Nobel economics prize has gone to a woman, Elinor Ostrom of Indiana University. She shares it with colleague Oliver Williamson.

One of the things the pair studied, for example, was the case of the Maine lobster fishing families, who brought in their own system of tradeable quotas. It meant that market principles were brought to bear on the exploitation – and protection – of this natural resource. Iceland’s trawler industry also derived great benefit from the system of individual transferable quotas designed by my free-market friend Hannes Gissuarson.

Of course, the BBC and friends will stress that the new laureates also say that commons resources don’t need to be privatized to be well managed. That is true. But at the moment, many commons resources are squarely in the hands of governments – meaning bureaucrats – who are very far removed from the actual concerns of the users and local residents, and wouldn’t know a market principle if it bit them. If privatization merely hands the resource to some new absentee landlord, it will do not good at all.

But privatization can be a good way to get the resources out of these bureaucratic hands, and into the hands of those who care about them and – if the right incentives are put in place – will protect and manage them...

There may be implications in this for all sorts of other areas – such as whether we can simply let people who own historic houses get on and care for them in their own way, or whether every new window pane has to be approved by English Heritage or some other quango...

[luckybogey]

Posted in Bloggers Section. Blog Post includes: Nobel economic prize for Elinor Ostrom and Oliver Williamson — Intro To Economic Governance — No Easy Answer to ‘Too Big to Fail,’ Nobelist Williamson Says — Nobel prize for economics awarded to US academics

Elinor Ostrom delivering a lecture at Indiana University, Bloomington, July 2008 Photo: Courtesy of Indiana University