Losing A Visionary

When Eleanor Ostrom succumbed to cancer late Tuesday night, the world lost one of its most creative thinkers and researchers.  Remarkably, many people did not even know who she was.  Even within the field of economics, not her own field but one in which her work has had profound effects nonetheless, few recognize her name.  Yet she was the first, and only, woman to win the Nobel Prize in Economics, and her work focused on one of the classic problems of economics: the well-known and often observed Tragedy of the Commons.

The Tragedy of the Commons is a central idea of economics: scarce common pool resources will inevitably be overused if there is no single owner and all users are allowed to set their level of use.  If there is no body to manage the access to resources, all users will utilize the resources to their satisfaction, which, if the resources are scarce and there are many users, inevitably results in a usage rate above what is optimal for the preservation of the resource.  First observed, and named for, the use and eventual overuse and degradation of common grazing space in English and New England towns, it has been observed time and again in resource use situations ranging from forests in the tropics to fisheries in the North Atlantic.  Extensive empirical evidence, and theoretical support from rational economic theory, combined to give the Tragedy of the Commons almost unquestioned support among many economists.  It is a central justification for centralized control of resources; leaving management to the hands of communities of users, it is argued, opens the door for a commons situation to develop and for the resource to be exhausted.

Eleanor Ostrom was awarded the Nobel Prize because she challenged this almost unchallenged view of the Commons.  Her work confronted the notion that local, involved actors could not manage their own resources in a sustainable manner and found that, in fact, they could, given certain circumstances.  Especially important among these is the devolution of meaningful rights to control the resource and make decisions regarding both access and usage rates.  While she would likely be the first to admit that there are many situations in which the Tragedy of the Commons does occur, it is equally important to acknowledge that there are many resources that can be, and are, more effectively managed at a local level.

Two recent stories highlight the truth of Ostrom’s research and its importance in the context of global negotiations over the REDD+ regime.  The first comes, courtesy of The Nature Conservancy, from Brazil where local farmers have recognized not only the importance of preserving the Amazon but the necessity of cooperating and creating long-term plans as a community in order to avoid the lure of a quick buck from deforestation and ranching.  The second comes from Borneo and emphasizes the dangers of centralizing control over natural resources.  Thirty years ago, Borneo had some of the largest remaining tracts of rainforest in the world.  Handed over to the State, these were designated to be selectively logged with the proceeds going to aiding communities in and around the forest with the goal of preserving the rainforest and helping the country develop.  Instead, the forests have served as the personal piggybank of national politicians for thirty years.  Now there is little forest left and even less in the way of aid to be distributed to the communities.  While it is impossible to say for certain that local communities would have managed the forest any better had they been given the chance, Borneo should still serve as a cautionary tale when considering centralized control.

Ostrom’s position on an international REDD+ program can perhaps be deduced from her final contribution to the discussion on resource management, published on the day of her death.  Although she is discussing the need for action at the Rio+20 summit this month, when she says, “Setting goals can overcome inertia, but everyone must have a stake in establishing them: countries, states, cities, organizations, companies, and people everywhere. Success will hinge on developing many overlapping policies to achieve the goals,” she might just as easily be talking about REDD+.

The world lost a visionary thinker and strong voice in opposition to economic orthodoxy this past week.  But there would be no more fitting tribute than to continue her challenge to established principles by closely examining the ways of successfully managing our collective resources and incorporating these findings into management regimes.  Many are already acting on this idea: fisheries are managed by those who fish them through individual tradable quotas, and local forest management committees have been established in India and Nepal.  As Rio+20 approaches, REDD+ negotiations continue, and climate change becomes ever more pressing, there will be plenty of opportunities.  What we make of it is now up to us.