Elinor Ostrom: The Economist who Proved Community Power Works

March 8, 2020   By Simon Kaye, Senior Policy Researcher, NLGN

Simon Kaye explores the legacy of Elinor Ostrom, the first female Noble-prize-winning economist, who proved that communities can successfully take charge of the assets around them. It’s work that should provide intellectual inspiration and practical principles for people taking on this work today, he writes.

All philosophies of governance have their intellectual heroes. Private-for-profit market fundamentalism, during its 1980s heyday, benefited enormously from association with the economic and theoretical work of Milton Friedman and Friedrich Hayek (however reluctant the latter was to be associated with political conservatism). Post-war settlement big-statism was driven forward, in large part, by William Beveridge. These figures provided the scholarly heft to underpin the political projects with which they were associated, lending coherence for the creation of general policy programmes, and dominating, at least for a time, the never-ending debate on how best to govern public services.

Both marketism and statism left communities on the sidelines. These were projects that concentrated power rather than sharing it and moved decisions further away from communities rather than closer to them. In different ways, they turned people from participants into users; from citizens into clients. The Community Paradigm is a very different proposition. But for community power to be taken seriously and ‘win the argument’, it needs an intellectual inspiration of its own.

Elinor Ostrom grew up as a poor kid in post-Depression California. She went to college against the wishes of her own mother. She was rejected from studying economics at UCLA and was later forced to leave for Indiana when her and her husband’s research irritated their department because it criticised governmental centralism. A development of these views ultimately won Ostrom the Nobel Prize in economics. She totally overturned some of the longest-standing assumptions in economics and politics, and she built her insights from the bottom up, drawing out evidence from impeccable research of real-world examples of communities working together and wielding meaningful power.
Ostrom’s insights have increasing relevance in today’s world, and be the academic lodestar for community power in the UK. Here are a few of her big ideas.

Scale matters. For Ostrom, localism is the only real model of democracy. The current – minimal – view of democracy – where we occasionally vote for a representative at one or another tier of government, maybe pick an option in an occasional referendum – is fine for what it is. But there are deeper kinds of legitimacy when decisions are made closer to home – giving people meaningful control over the institutions, services, and assets that have the biggest impact on our own neighbourhoods. This isn’t just good for civic participation, but it has the potential to strengthen communities and tap into useful knowledge about what’s really needed in different places. When we give up on this idea the result is a one-way and highly transactional system instead, where (for example) healthcare professionals ‘produce’ good health, educators ‘produce’ education, politicians ‘produce’ decisions, and we become mere users: outsourcing the things that matter and complaining when we don’t think we’re getting our due. We can – and should – be so much more than that.

Communities can do it. Elinor Ostrom won her Nobel for demonstrating that not everything needs to be owned or managed by either the state or via private property rights. While the political and economic establishment asserted that self-interest would lead individuals to ruin any kind of common-access resource, Ostrom collected an enormous catalogue of real-world examples of communities managing their own affairs and governing their own assets. And not just as some kind of fluke or stop-gap. Ostrom revealed a hidden world where communities manage forests, irrigation systems, agricultural assets, and public utilities – and often more sustainably, efficiently, and over longer periods of time than comparable state monopolies or privatised alternatives. For example, one of the cases she discusses – Huerta irrigation agreements in Valencia– have been quietly working away for around 1,000 years. Viable, efficient, and sustainable – community power isn’t just a theoretical approach: it already works, every day, all over the world.

Embrace the mess. Ostrom didn’t have any time for perfectionism and recognised that ‘common sense’ solutions in politics are often mirages; there are, she asserted, “no panaceas” in institutional design or public policy. The world is a complex place, and our societies and economies need to by dynamic, layered things that operate and govern at lots of different levels, and in many different ways. This is the idea of experimentalism. For Ostrom, good outcomes are moving targets – targets that are difficult to recognise even when we manage to hit them. We need try different things to really find out what works. And, crucially, what works may well be different in different places, and at different times.

NLGN, in partnership with the Centre for the Study of Governance and Society at King’s College London, Local Trust, and Power to Change, will be publishing a report on Elinor Ostrom’s lessons for community power and real localism later this year. It’s time to get serious about winning the argument.

If you’d like to be kept up to date with the report and upcoming events, please contact skaye@newlocal.org.uk.

Follow Simon on Twitter. @stkaye

Join our mailing list