Elinor Ostrom won a Nobel Prize in Economics in 2009 for showing that ordinary people, working together, can manage natural resources sustainably. Her work is as relevant as ever.
The "tragedy of the commons" was first proposed by Aristotle. It states that if many people enjoy free access to a finite natural resource, they will inevitably overuse it and may end up destroying it altogether.
Hence the conventional wisdom that common ownership is a bad idea. Individuals, after all, usually act in their own self-interest; so multiple individuals will end up draining a shared resource, even when it's not in anyone's long-term interest to do so.
The US political scientist Elinor "Lin" Ostrom devoted her professional life to challenging these assumptions. By gathering evidence from small, local communities worldwide, she showed how people can, in fact, manage shared natural resources like pastures, fisheries, and forests successfully, by developing common rules.
Ostrom's influential 1990 book, "Governing the Commons", even argues that community management can be an effective alternative to state-backed or market-based solutions. It won her an international following - and broad recognition.
In 2009, Ostrom made history by becoming the first female co-recipient of a Nobel Prize in Economics (with Oliver E Williamson, for his work on corporate governance) for "teaching us novel lessons about the deep mechanisms that sustain cooperation in human societies."
Ostrom was a passionate empiricist. What's become known as Ostrom's law states (rather wryly) that "a resource arrangement that works in practice can work in theory" - and she held equally strong convictions about the power of polycentrism.
Drawing on studies of irrigation systems in Spain and Nepal, forests in Zimbabwe and Zambia, pastures in Switzerland, and fisheries in Maine and Indonesia, she determined that a plurality of local, decentralized systems can cope with complexity better than a centralized approach.
She also knew, however, that successful outcomes depend on clearly defined rules and responsibilities.
In "Governing the Commons" Ostrom summarized eight design principles common to all the successful shared-resource situations she had analysed:
Ostrom had to overcome deep prejudices to achieve personal success. Born in humble circumstances in Los Angeles in 1933, she struggled with both parental and societal opposition to women's higher education to win a place at the University of California, Los Angeles (UCLA).
Insufficient maths thwarted her attempt to enrol in a graduate economics programme, but she was admitted to UCLA's graduate programme for political science, where she was awarded an MA in 1962, and a PhD in 1965.
By 1963, when she married her second husband, Vincent Ostrom, whom she had met in his political science seminar, Ostrom was analysing the management of a group of groundwater basins in Southern California.
Local people had pumped out too much groundwater, so that salt water had seeped into the basin. But Ostrom was impressed with how these users had worked together to solve the problem, and she made the study of their collaboration the topic of her PhD dissertation.
Vincent's work on governance in metropolitan areas, which advised against centralisation and in favour of polycentrism, brought him into conflict with the prevailing orthodoxy at UCLA's Bureau of Government Research. The dispute eventually prompted the Ostroms to leave the university and make a fresh start.
In 1965, they moved to Bloomington, Indiana, where Vincent accepted a professorship in political science at Indiana University, and Elinor joined the faculty as a visiting assistant professor, initially teaching an evening class on American government.
It was 1974 before she, too, was appointed a professor of political science. She headed the department from 1980 to 1984, and then held the prestigious Arthur F. Bentley Chair of Political Science.
Most importantly, Indiana University gave Ostrom the opportunity to establish (with her husband) a platform to spread her ideas: The Workshop in Political Theory and Policy Analysis.
Now known simply as the Ostrom Workshop, it supports the research of more than 200 international scholars across different disciplines into "the world's most pressing problems involving communal and contested resources - from clean water to secure cyberspace."
Ostrom died from pancreatic cancer in 2012, but in an era of rapid climate change, her legacy looks increasingly relevant.
She not only revolutionised our understanding of sustainable natural resource management, she also offered a framework for tackling the climate crisis - a framework reflected in the international agreements forged since her death.
As Erik Nordman, author of "The Uncommon Knowledge of Elinor Ostrom" has observed, Ostrom "did not live to see the Eiffel Tower lit up green [in 2016] as world leaders signed the Paris Agreement on climate change." Yet "that agreement largely follows [her] approach to polycentric [resource] governance."
It relies, for example, "on nationally determined reductions in carbon emissions … [while] … countries evaluate one another's pledges and prod each other to be more ambitious."
Solving the climate crisis remains, of course, a work in progress. But Ostrom's contribution was clearly invaluable.
Thinking about the future is part of our corporate culture.
Thinking, managing, and investing sustainably are integral parts of our DNA. Our owner, the Princely Family of Liechtenstein, recognized early on how important sustainability is for our environment, society, and future. As a family-run private bank, we are committed to the Paris Climate Agreement, the United Nations Sustainable Development Goals, and a sustainable financial sector.
