Awarded the 2009 Prize in Economic Sciences "for her analysis of economic governance, especially the commons". She shared the Prize with Oliver Williamson.First and only woman (of 69 persons) awarded the Prize in Economic Sciences since its establishment in 1969.
As a political scientist Elinor Ostrom's research methods differed from how most economists work. Usually they start with a hypothesis, an assumption of reality, which is then put to the test. Elinor started with an actual reality instead. She gathered information through field studies and then analyzed this material. Her research had great impact amongst political scientists and economists.
Nobel Prize-awarded work
Some shepherds share a common pasture. There are no restrictions on how many sheep each shepherd may place in the bait. However, with too many sheeps there is a great risk that the meadow will be exercised too hard and destroyed. At the same time, each shepherd has to think of their livelihood. So, reducing the number of sheeps may be good for the meadow itself, but will provide less income. So what will happen to the pasture?
The dominant view among economists had long been that pooling natural resources - such as pastures, fishing waters and forests - will result in them being overused. This for the simple reason that each individual user will do what is best for himself, rather than what is best for everyone.
Elinor's research shows a different view. She studied how people in small communities around the world managed common resources. Her research showed that when natural resources are pooled and have shared ownership, the rules for managing those resources evolves over time in a way both economically and ecologically sustainable. Elinor therefore believed that common pooled ownership of natural resources is better than privatization and government involvement. A prerequisite however being that decision-making be transparent and democratic.
Elinor’s studies showed that when individuals have to answer for their actions to others depending on the same resources, eg. fishing grounds or common pastures, their approach to shared responsibility changes.
Benefit for mankind
Elinor Ostrom has demonstrated how common property can be successfully managed by user associations and that economic analysis can shed light on most forms of social organization.
MLA style: "Elinor Ostrom". Nobelprize.org. 20 May 2013 http://www.nobelprize.org/educational/nobelprize_info/ostrom-edu.html