IEA authors win Nobel Prize for Economics

Two recent IEA authors have been awarded the 2009 Nobel Prize in Economic Sciences. Elinor Ostrom and Oliver E. Williamson contributed papers to the September 2008 edition of Economic Affairs, which looked at “The Economic Analysis of Institutions“. Both have undertaken groundbreaking work in this field.

 

Elinor Ostrom has shown how many environmental problems can be addressed without the need for top-down government regulation and bureaucratic control. Resources such as fisheries can often be managed by the resource-users themselves, using sophisticated mechanisms for decision-making and rule enforcement. Ostrom examines this issue in depth in her IEA paper, “Institutions and the environment“.

 

Oliver E. Williamson has added significantly to our understanding of how transaction-cost economics affect organisational arrangements. In particular, he has shown that when transaction-specific investments are present, relational contracts become more relevant. His work helps explain why vertical integration is commonplace in certain industries and is clearly highly relevant to policy (for example, one thinks of how a particular structure was forced on the UK rail industry during the privatisation process).  Williamson’s IEA paper, “Transaction cost economics: the precursors“, looks at the intellectual development and theoretical contributions of his field of inquiry.

 

Ten other economists involved in the IEA’s work have gone on to receive the Nobel Prize:

  • Gary S. Becker
  • James M. Buchanan
  • Ronald Coase
  • Milton Friedman
  • Friedrich Hayek
  • John Hicks
  • James E. Meade
  • Douglass C. North
  • Vernon L. Smith
  • George G. Stigler

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