Q & A

Are our institutions up to the job?

The massive problems associated with sustainability, from climate change to resource preservation, require coordinated, society-wide responses. Nobel laureate Elinor Ostrom argues for the importance of giving local institutions enough power to better manage common resources—though it’s not easy.

Q: You define institutions, broadly, as the rules that guide all ongoing social interactions, from families to neighborhoods to markets to government. Could you explain how you think about institutions?

What is important is to recognize that inside the family there are rules and norms that people develop that affect the way they operate, and that dynamic continues all the way up to global organizations—and so thinking that it's only governments that make institutions is limiting. Instead of thinking of each one of these as being unique, there are commonalities.

Q: You also highlight the importance of employing a range of institutions to solve social dilemmas. What is the importance of this institutional diversity?

I am for trying to get all problems that are not national moved into a polycentric arrangement, where we allow medium- and small-scale units to take as much authority as possible, because they'll do a much better job. 

We need to have a little more faith in human ability to solve problems than we've had in the last 20 or 30 years. We keep taking authority away. In 1900, we had 100,000 school districts in the U.S. We're down to some 14,000 because the presumption was that there were economies of scale and we didn't want to have all those citizens who didn't have all the information making decisions. Well, those citizens had their kids in the schools. They had an interest. And we were teaching many people about democratic institutions and governance, when we had seven people on most school boards and 110,000 school districts. That was a very large population of people who were dealing with governance. And now our population is much larger but there are many fewer school districts and the districts are frequently big, complex, and difficult. So it isn't as easy to govern them, and the efficiency of the school system has gone way down and the costs have gone up.

If you can allow people to have real authority at small to medium scales, and large units govern large-scale problems and are available to monitor what is happening at smaller scales, you can have a much more effective system. If you try to make all decisions through very large units, you frequently make very bad decisions. You need large units to be there for very large-scale problems and to make sure that people are not cheating and lying and all the rest at the small scale. You can have corruption in the small as well as in the big. You want a system that is nested with some small units, some larger units, and some oversight capacity. 

Q: How has game theory has played into your work?

Game theory is a very powerful technique for addressing patterns of cooperation, conflict, dominance, etc., among participants when the number of types of players is limited and when you can present it in a simplified form. There has been a very important amount of influence on the social sciences by game theory over the last 30 to 40 years. 

Frequently, game theory helps you recognize a big incentive. From there, you work to understand what people can do if they face that big incentive. That's what we've been working on. By formalizing an important question as a game and then putting it into an experimental laboratory, you can change one variable at a time and assess whether the behavior changes as you change this variable or that variable, and in what way the behavior changes.

One of the limits of game theory is the presumption that if people face a social dilemma like the possibility of overharvesting resources, they would simply overharvest. [This scenario was presented in Garrett Hardin's article, "The Tragedy of the Commons," published in the journal Science in 1968.] They are trapped in the structure of a situation and can't get out. That presumption has dominated a lot of thinking. The idea that it is a problem and a challenge is correct. But the idea that they are always trapped is wrong. 

What we find is if we put such a situation into an experimental lab, and we do not allow any communication and everyone is anonymous, people do as game theory predicts. In fact, they do even worse. But allowing people to communicate and talk together and engage in discussion about what they could do frequently enables them to cooperate and achieve a lot. And in the field, we find a lot of long-term successes of people solving these types of problems. But that's not uniform so the question becomes, what are the factors that affect when people solve these problems, and when they don't?

Q: And what are some of those key factors?

How big is the resource they're trying to manage? People will have a pretty good chance of managing small lakes, but the Great Lakes, they're huge and surrounded by two countries and multiple states and provinces, which is an entirely more challenging situation. We're not doing so well on the Great Lakes. And the oceans are a mess.

Q: The ecological environment figures prominently in your work. Did your dissertation work on groundwater in California lead you to the common-pool research? 

At the time I did my dissertation, Hardin's article hadn't been published. When it came out, I thought, my God, I studied something where they had a tough problem and they solved it. They weren't helpless. 

In California, because of the large number of agricultural producers, if they overharvested the groundwater near the coast, salt water came in and caused major problems. If they had not done a great deal, starting in the 1950s, the problem today would just be unbearable. 

If you've got a groundwater basin, it's rarely the same size as a city or a county. And so you've got to figure out how to get an institutional arrangement with about the same boundaries as the groundwater basin. They were able to do that, in some instances, by creating a special district. They were able to use the court system to define who was in and who was out, and what their rights were, etc. It took a long time and a lot of energy and a lot of ingenuity, but they did it.

Not all groundwater basins in Southern California were entirely successful, but several of the basins are in much better condition today than they were in the 1950s. That took an immense amount of creative activity, to create new institutions that would enable them to jointly reduce their pumping and find ways of reclaiming water and injecting it into ground water basins. They came up with a wide diversity of innovative actions.

Q: Is there any pattern around institutions creating rules versus monitoring? 

If they don't monitor, the institution won't be there for the long run. Monitoring turns out to be a very important aspect of long-term cooperation. But it doesn't have to be the police coming in with guns and enforcement. Frequently, if people have a commitment to maintaining a resource, for example, over time, and they know that someone else is overharvesting when they're not supposed to, they'll monitor each other. And if that's supported, they may be able to sustain it over time.

If you go to Maine, you will learn about the history of lobster fisheries. In 1920, they almost destroyed their fishery. But then, because the fishers live in bays, they were able to slowly but surely focus on the lobster and the patterns related to a particular bay. The lobsters don't move too much. And it took a lot of effort, and the state backed up the local fishermen. But over time, they have developed a series of rules and the lobster fishery is one of the best-stocked in the country.

If there's just a short-term, extract-and-leave perspective, it creates one of those problems that is ghastly hard to solve. Fikret Berkes had an excellent article with others in Science in 2006, called, "Globalization, Roving Bandits, and Marine Resources," dealing with the problem of very large ships that can come into a fishery, harvest for six weeks, and then move on—that's very hard to stop.

Q: Are global problems just larger or are they a different sort of problem?

Well, we have to talk about the specifics. With fisheries, international law doesn't really give a clear-cut rule of who has rights to do what, where, and when. And there aren't local interests that could do monitoring with offshore fisheries. I think we have the chance of improving the greenhouse gas problem at multiple scales, in a way that we can't do with the ocean and the overharvesting of fisheries, so not all large-scale problems are the same. 

But for the globe, if we slowly but surely recognize that there are things that we can do to reduce greenhouse gas emissions that have local as well as global benefits, we can encourage communities to take those actions. And some of the monitoring is becoming a lot easier as people are recognizing that, indeed, this is a major problem and we need to be taking action.

Interview conducted and edited by Ted O'Callahan.
Photo by Ric Craddick, Indiana University

Arthur F. Bentley Professor of Political Science, Indiana University