Elinor Ostrom`s Economics "Nobel" Prize
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October 13, 2009, 03:09 PM
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Political scientist Elinor Ostrom became the first woman winner in the four decades of the Economics quasi-Nobel Prize. I wasn`t familiar with her name, but her field of of study is a good one, so she`s probably a good pick. She works on the question of the various ways people arrange to avoid "the tragedy of the commons" of over-exploitation of common resources, such as fisheries.

As I noted in in 2005, Jared Diamond offers a succinct explanation of the possible solutions in his bestseller Collapse:

In another important section, Diamond illustrates how ethnic diversity makes environmental cooperation more difficult. He praises the Dutch as the most cooperative nation on earth and attributes their awareness of and willingness to tackle problems to their shared memory of the 1953 flood that drowned 2,000 Netherlanders living below sea level. (Unfortunately, he doesn`t mention whether Holland`s rapidly growing immigrant Muslim population remembers when the dikes failed 52 years ago.)

Diamond notes that there are three possible solutions to what Garrett Hardin called "the tragedy of the commons," or the tendency for individuals to over-consume resources and under-invest in responsibilities held in common, leading to ecological collapse.

  • Government diktat.
  • Privatization and property rights — but that`s impractical with some resources, such as fish.
  • "The remaining solution to the tragedy of the commons is for the consumers to recognize their common interests and to design, obey, and enforce prudent harvesting quotas themselves. That is likely to happen only if a whole series of conditions is met: the consumers form a homogeneous group; they have learned to trust and communicate with each other; they expect to share a common future and to pass on the resource to their heirs; they are capable of and permitted to organize and police themselves; and the boundaries of the resource and of its pool of consumers are well defined." [My emphasis]
A classic supporting case that that Diamond doesn`t bring up: American shrimp fishermen in Texas were universally denounced as racists in the late 1970s when they resisted the government`s efforts to encourage Vietnamese refugees to become shrimpers in their waters. French director Louis Malle made a movie, Alamo Bay, denouncing ugly Americans fighting hardworking immigrants.

What got lost in all the tsk-tsking is that fishing communities always resist newcomers, especially hardworking ones, because of the sizable chance that the outsiders who don`t know the local rules or don`t care about them will ruin the ecological balance and wipe out the stocks of fish.

The evidence Diamond assembles indicates, although of course he never dares to state it bluntly, that the fundamental requirement for dealing effectively with environmental danger is: start with a population that`s limited in number, cohesive, educated, and affluent.

Needless to say, mass immigration from the Third World works against all those characteristics.

(To his credit, Diamond`s bestseller is clearly unenthusiastic about Latin American immigration into his own LA. To his discredit, you have to be a pretty acute reader to notice his heretical leanings.)

A quick Google search finds Nobel Laureate Ostrom also cautiously expressing Doubts About Diversity in her book The Drama of the Commons.

... Alesina et al. (1999) find that ethnic diversity is associated with lower public goods funding across the U.S. municipalities because different ethnic groups have different preferences over the type of public good ... In the kind of rural societies considered in this chapter ... the effectiveness of social sanctions weakens as they cross ethnic reference groups. In this vein, Miguel (2000) constructs a theoretical model where the defining characteristics of ethnic groups are the ability to impose social sanctions within the community against deviant individuals and the ability to coordinate on efficient equilibria in settings of multiple equilibria. With data from the activities of primary school committees in rural western Kenya, Miguel then shows that higher levels of ethnic diversity are associated with significantly lower parent participation in parent meetings, worse attendance at school committee meetings, and sharply lower teacher attendance and motivation.

If social groups (not solely ethnic groups) are defined as those whose boundaries coincide with the effective monitoring and enforcement of shared social norms ... this is one way of understanding the notion cited earlier of cultural homogeneity, a variant of what many authors have called social capital or social cohesion. ... Irrigation organizations that cross village boundaries can rely less on social sanctions and norms to enforce cooperative behavior ...

There are basically two ways to get people to play nice with a common resource such as shrimp or irrigation water: violence or ostracism. The latter works most effectively regarding marriage — if you don`t play by the rules, nobody respectable will let your kid marry his daughter. But when newcomers who don`t ever want their children to marry your children arrive and start exploiting your irrigation system or fishery (or whatever), then the old non-violent traditions break down, and people start turning to violence or its threat, whether anarchic or government-based (e.g., socialism and property rights are based on the threat of the government`s monopoly on violence).