Nobel Prize in Economics 2009

I'm very pleased about the recent award of the Nobel Prize to Elinor Ostrom and Oliver Williamson. It was significant and celebratory that Ostrom was the first woman to win the prize, but also, from my perspective, it was significant that the prize was awarded due to research into the critical concept of governance.

Professor Ostrom, who teaches at Indiana University, was awarded the prize "for her analysis of economic governance." Her work had demonstrated how common property could be successfully managed by groups using it. In the 1960s, Hardin set the dominant framework by outlining how common property resources, using the example of a village 'community' green, would become degraded over time due to non existent, vague or competing pressures amongst reseource users who have an aim of profit or welfare maximisation. Hardins 'Tragedy of the Commons' outlined the fate of many common property resources that suffer from a lack of a regulatory regime - a case being the degradation of high seas fisheries. Ostrom's research outlined how this is not necessarily the case - that many examples exist of communities and resource users coming together in the absence of regulatory regimes to manage common property resources such as fresh water, fisheries and forests.

Governance is a critical concept that is relevant for natural resource management, climate change, and conservation. It deals with the relations between traditional government, civil society and market orientated actors, and looks at the role, evolution and effectivness of social institutions. Fundamentally governance is about inter-relations and interactions across differnet scales - local, national and international. In relation to natural resources, it relates to resolving conflicts, building collective responsibility and ultimately achieving sustainable and responsible management. As outlined in Ostrom's research, and evident in many areas such as community based resource management, co-management, and market based instruments - understanding the evolution, effectiveness and impacts of new forms of governance is important to resolving many environmental issues.

This award could not come at a better time.