A Nobel Prize Winner’s Novel Idea
In 2009, Indiana University professor Elinor Ostrom became the first woman to win the Nobel prize in economics. Ostrom received this international honor "for her analysis of economic governance, especially the commons." In her scholarly work, Ostrom skillfully applied economic principles to show how people can share and preserve Earth’s limited resources peacefully.
When people must share limited resources, such as water or farmland, it can be difficult for them to avoid conflict with one another. Ostrom’s research showed how groups can work together to manage these resources through collective property rights. This economic principle refers to people owning land and other property as a group rather than as individuals.
Until Ostrom came along, the idea of the “tragedy of the commons” was widely accepted by scholars. According to this idea, people competing for resources will always put their own self-interests above the good of the community. Ostrom demonstrated that when people share a common resource, the tragedy of the commons is not the only possible outcome, or even the most likely outcome. She showed that people can develop their own systems without outside regulation. She also affirmed that people can work on their own to build trust with each other in a way that is mutually beneficial. Ostrom stated, “Now I've seen in laboratory settings and the field settings that . . . most individuals are nuanced beings [who] can have real preferences about the welfare of others. If presented a situation where they can evolve trust and reciprocity, they will do so.”
Source: National Institutes of Health
1 answer
The sentence that best shows Ostrom caused a major shift in how economists approach a particular subject is:
"Ostrom demonstrated that when people share a common resource, the tragedy of the commons is not the only possible outcome, or even the most likely outcome."
This highlights the significant change in perspective introduced by her work, challenging a previously widely accepted idea in economic theory.
