Elinor Ostrom and the spontaneous evolution of social institutions

When I heard in 2009 that Elinor Ostrom had won the Nobel Prize for Economics I was delighted and thought it one of the best pieces of news that year, if not the best. My feelings were shared by many people, not only on what we might call the pro-market side but across the political spectrum. (Many economists I have to say disgraced themselves with public displays of ignorance regarding her work and achievements but let us pass over that). My pleasure at this recognition of her work was because Elinor Ostrom is one of the most significant thinkers and scholars in what we may call the tradition of spontaneous order analysis and is certainly the most important now alive, given that Hayek is no longer with us.

The central object of her research is common resources (such as groundwater, fisheries, forests and land) and the way in which at a local level people left to their own devices frequently work out institutions and rules that regulate access to and use of these resources in ways that avoid the ‘commons problem’ of rampant overuse or conflict first identified by Garret Hardin in his famous essay. In other words she looks at the spontaneous evolution of social institutions and orders independent of government or political power and on the basis of human interaction and an open ended discovery procedure. In many cases this is a voluntary solution but not a market one (hence her attractiveness to many who dislike government but also mistrust markets). This week the IEA had the honour of having her deliver the annual Hayek Memorial Lecture, in which she looked beyond her earlier work to the challenges that lie ahead.

The main one is that of moving beyond the study of identifiable and well defined local communities and ecologies, where there is face to face contact and much shared tacit knowledge to larger and more complex ones such as nations or even the globe. In other words the study of what she calls Social-Ecological Systems (SES). She argues that we need to develop a new and richer vocabulary and analysis to understand how larger scale social systems work and to get away for the simple dichotomy of ‘market’ and ‘government’. Her earlier work suggests a way of doing this that emphasises a range of institutions and ways in which human beings interact and a way in which solutions to problems at the larger or higher level can emerge through a process of association and mutual learning among the lower decentralised groups, in a bottom-up process.

This kind of analysis will help us to understand what kinds of evolved social institutions are robust and able to avoid the bad outcomes of collapse or conflict and how directed or top-down planned solutions are almost always likely to be more problematic in this regard. The conclusions that come from this are that we need a polycentric and pluralistic system with a wide variety of solutions to social and ecological problems and a rich and dense network of social connections and interactions. Although there is a place for government, what you do not want is prescriptive and top-down planning: although sometimes this may be inevitable, it is very much the less good option.

This kind of approach has a wide appeal to people from many different intellectual traditions and can lead all of us to rethink some of our ideas and assumptions. For any government that is interested in promoting voluntarism and liberty and is also interested in developing workable and robust solutions to major social problems including those that transcend national boundaries, this kind of work and approach is surely of great, not to say vital, interest.

I never have got the fuss made over this work. Governments are always imposed, sometimes by force of a minority, sometimes by force of a (occasionally overwhelming) majority. Among the latter variety, the majority may elect legislators, or, if the games to be coordinated are simple enough, there may be a committee of the whole that agrees on rules. Either way, one ends up with is governance. Not by THE government, but by A government. The local, "voluntary" solutions that Ostrom describes are just limited purpose governments. There is nothing special about them other than that their powers are not plenary. What if all but one farmer agrees that overgrazing is bad? Does he not feel obliged go along to get along? Is avoiding ostracism any different from avoiding jail? Coordination is coordination. It ALWAYS involves a loss of autonomy. Libertarians never seem to get tht one can voluntarily, in the exercise of one's LIBERTY, suspend a bit of one's AUTONOMY in exchange for the benefits of an unspoiled commons. The result, however you style it, is government. Thus, there is no "spontaneous evolution of social institutions and orders independent of government or political power." Such spontaneous evolution IS government and political power. The distinction is wholly arbitrary.
Remarkl: I probably shouldn't comment before thinking this through a bit more, but I believe the difference is unanimous consent - coordinated with private property rights - versus majority rule (government). If that one farmer believes overgrazing is good, he is free to overgraze his own property, but not the "common" contract protected property. His folly (or, if his guess is right, his success) will be punished or rewarded through economic results.
"Is avoiding ostracism any different from avoiding jail?" Is refraining from social or economic relations with someone any different from locking him or her in a cage? Yes.
Remarkl, The conceptual insight Ostrom provides misses you because you hold a poor and incomplete definition of government. Governing is not the same as government. All governments govern. All governing does not create a government. Government -in all cases- depends on violence to enforce compliance to its edicts - no exceptions. Ostrom articulates different set of pathways of compliance -sans violence.
Black flag Ostrom is perfectly fine with the idea of ENFORCEABLE contracts, I.e., contracts backed by the state's monopoly on the legitimate use of force. She is not about nonviolence; she is about users agreeing on the rules instead of an external manager doing so. Enforcement is an entirely separate matter. And she makes clear that her quarrel is with those who believe that Leviathan is always the only solution to coordination problems, when, in fact, SOMETIMES, but not always, users can developer their own rules, which may then require the coercive power of government to implement.
Remarkl, All contracts are enforceable without the State except the first one. The rest become wholly enforceable based on what others witness are the non-violent consequences metered out to the contract breaker. She is non-violent, that is, she does not suggest there is a requirement to INITIATE violence so to enforce contracts - there is a difference between starting a fight and defending one's self. One can make rules without government, and without requiring a monopoly on force. The theory that to reduce violence and maintain social order one must concentrate the initiation of violence to a small group who then can initiate such violence on its whim is self-evidently a contradiction if one's goal is to reduce violence and improve social order! It may be true that the State at times makes rules and uses its violence to enforce them. It does not make it true, however, that it is the only means of making and enforcing rules.
Luther - I don't see anything about unanimity in Ostrom. But I've only read part of "Governing the Commons." She has become a darling of the wacko right, when she appears to be an apolitical scholar who has tried to understand the conditions - according to her, not always present - when users of a commons can create the rules - whether or not they also create the enforcement mechanisms - whereby the commons will be shared. She rejects the simplistic notion that all coordination of prisoners' dilemma games must be external to the participants, but she does not reject the existence of such games, nor does she advocate a private solution to ALL such games, or lump rule-making and enforcement together as having to be provided by the same agent.

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