A third way to common-pool resources

The awarding of the Nobel Prize for economics to Elinor Ostrom and Oliver Williamson came as a surprise to the public and the economists. Both are outside the establishment of neo-liberal economics and did research without the quantitative formality. Ostrom is not only the first woman, but also the first political scientist to win the prize - she got her PhD as a student of political science at UCLA.

Ostrom's contribution is on the management and usage of common-pool resources. Contrary to the "tragedy of commons" argument of prominent ecologist Garrett Hardin, that people tend to overuse collective-owned resources such as pasture or fishery, Ostrom found out that, through her field works in many parts of the world, communities are able to formulate institutions to use and preserve public resources properly and avoid depletion. While traditional wisdom tells us that common-pool resources should either be privatized or subject to state regulation, Ostrom suggested that there is a third way.