THE first woman to win the Nobel Prize in Economics, Elinor Ostrom, is not even an economist, but a political scientist. For professional economists, it is a reminder that their profession has no monopoly in explaining the economic behavior of human beings. Indeed, the marriage between political science and economics into the compound discipline now known as political economy has enriched both disciplines in a synergy that has helped in both explaining and addressing the world?s problems better.
Economists can no longer blame politics for getting in the way when outcomes predicted by their narrow theories do not materialize. They are now expected to understand precisely how prevailing political forces should influence the nature of their policy prescriptions. I recall a mild philosophical debate I had years ago with a colleague on the question of appropriate policy. I maintained that ?right policy? is where good economics would lead us after considering prevailing political circumstances (or to use the language of mathematics, policymaking amounts to finding a constrained optimum solution). She insisted, on the other hand, that ?right policy? is what good economics would prescribe, period (i.e., the first-best, unconstrained optimum solution)?but that it is our additional challenge to work to eliminate the political constraints.
Where we really differed was in the way we treat the political environment within which economic policy decision-making takes place. While I choose to treat it as a given, my colleague sees the political constraints as unnecessary obstacles that should and could be surmounted (wishful thinking?). And yet the discipline of political science is all about how those political forces come about and often perpetuate themselves. It seems to me that my approach is more respectful of our allied discipline in the social sciences?and more realistic.
Enter political scientist Ostrom, who debunked the long-accepted notion known as ?the tragedy of the commons.? Coined by biologist Garrett Hardin in 1968, the phrase refers to how a commonly held resource will inevitably be depleted because it will be overexploited by all those having access to the common resource. If everyone in a village is free to fish out of the same fishing ground, each person acting in his own personal interest will overfish to the extent of eventually depleting the fish stocks.
The traditional prescription to address this problem has been either government control via regulation, or privatization?i.e., move away from common ownership to private ownership, or some semblance thereof. For example, upland dwellers who are awarded stewardship rights to the land they occupy and till, tend to manage the uplands more responsibly and more sustainably.
Ostrom?s contribution, in the words of the Nobel committee, lay in how she ?has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized.?
Primacy of community
Ostrom?s work notes how informal social institutions can arise spontaneously (i.e., without outside intervention) to maintain commonly held resources successfully over time. She has focused on examples of people creating systems for sustainable natural resource management with the ecosystems that they depend on. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes and groundwater basins, she came to the conclusion that the outcomes are, more often than not, more positive than what standard theories predict. She observes that communities of resource users frequently develop sophisticated mechanisms for decision-making and rule enforcement to handle conflicts of interest.
One need not look far to witness the phenomenon Ostrom has studied and documented: It has increasingly been played out in the Philippines, in numerous instances of community-driven initiatives in natural resource management. On the coasts, numerous community-based coastal resources management (CBCRM) schemes have managed to reverse declines in fish stocks. In the uplands, community-based forest resources management (CBFRM) schemes have helped arrest rapid forest degradation and are, in fact, credited for the registered increase in Philippine forest cover in recent years.
Humans act selfishly when acting as individuals, and yet act altruistically and for the common good when acting as communities. It is this tendency that underlies the observations analyzed and documented by Ostrom. And at this time when climate change and loss of biodiversity have assumed prominence in the global and national agenda, the historic 2009 Nobel Prize in Economics is a timely reminder that communities are the key?and must be the units of intervention and action in the various initiatives for the effective pursuit of sustainable development.
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