This is the VOA Special English Economics Report.
usually study markets. Now, two Americans have won the Nobel Prize in economics
for not studying markets.
will share almost one and a half million dollars for their analysis of economic
governance. This is the study of how economic activity is governed within
companies, communities and other groups.
winners are Elinor Ostrom of Indiana University in Bloomington and Oliver
Williamson of the University of California, Berkeley. The prize in economic
sciences has gone to sixty-three men since it was first awarded forty years ago.
Elinor Ostrom is the first woman. And, like other winners over the years, her
training is not limited to economics. She is a professor of political science
and of public and environmental affairs.
Today, economic theory suggests that
good resource management requires ownership, either private or public. If not,
the thinking goes, then self-interest will lead to overuse and destruction of
shared resources. Ecologist Garrett Hardin described this idea in nineteen
sixty-eight as "the tragedy of the commons."
Ostrom showed how local decision making can lessen the tragedy. Her research
has deepened understanding of how people balance their needs with those of
others who depend on the same resources.
She studied communities
like farmers in Southern California who depended on a common water supply. She documented
how people who use resources often develop ways to share them. One example is
ELINOR OSTROM: "One of the absolutely key, most
important variables as to whether or not a forest survives and continues is
whether local people monitor each other and its use. Not officials, locals."
Oliver Williamson has studied big
companies and found that they often are better than markets at doing complex
jobs. Under his theory, businesses act as structures for conflict resolution.
example, companies that own their suppliers can avoid long-term contracts and disputes
over prices. This can make production more efficient and make better use of
businesses can also abuse their power. Professor Williamson says the best way
to deal with this is not by limiting the size of companies, but through
The Royal Swedish Academy of Sciences
said economists need to do more than study markets and prices. The Nobel judges
urged more research like the kind they recognized with this year's award.
that's the VOA Special English Economics Report, written by Mario Ritter. I'm