Elinor Ostrom: The Legacy and the Challenge

by Joshua Tucker on July 3, 2013

in Newsletters,Obituary,Political Economy

Continuing our collaboration with the APSA Political Economy newsletter, today we present the final of four obituaries of prominent political economists who recently passed away, with George Mason University political scientist Paul Dragos Aligica writing on Nobel laureate Elinor Ostrom.

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Elinor Ostrom, co-founder with Vincent Ostrom of the Bloomington School of Political Economy, has left behind a fascinating intellectual legacy, currently a source of inspiration in fields as diverse as political philosophy and the environmental sciences. Yet, the core of her work has always been in the field of political economy. The Ostroms’ distinctive approach was considered from the very beginning an evolving part of the “Public Choice Revolution” that exploded in the 1960s.  As William C. Mitchell put it in his 1988 Public Choice article, “Virginia, Rochester, and Bloomington: Twenty-Five Years of Public Choice and Political Science,” three distinct schools of thought, each associated with particular scholars, have shaped the basic public choice assumptions. In each case “one or two dominant figures led … the effort to construct theories of collective choice: Riker at Rochester, Buchanan and Tullock at various Virginia universities, and the Ostroms at Indiana.”

The Ostroms began in the 1960s with a theory of collective action based on a theory of goods, a theory that was emerging at that time from the mantle of neoclassical economics as a major building block of the new, modern political economy. In time, their work on governance created one of the main channels of the transition from public choice to the new institutionalism. The fact that Elinor Ostrom was a recipient of the 2009 Nobel Prize in Economics was a telling recognition of Bloomington School’s important contributions. Yet, in the celebratory and retrospective mood created by such honors and public recognition, it is important to note that the Bloomington agenda is far from making its closing arguments. In fact, Elinor Ostrom’s work remains an enterprise of unassuming radicalism that persistently invites us to reconsider the very foundations and significance of our scientific efforts. Following the logic of institutional diversity, social heterogeneity, and value pluralism to their epistemic and normative implications, Ostrom’s work both closes a cycle of research on collective action, institutions, and governance and frames the next stage or the next cycle of research.

The depth and boldness of the Ostrom project are revealed when we single out the specific assumptions and perspectives it challenged. We should also take full measure of the way in which those challenges constitute a radical departure from powerful ideas that tacitly framed a vast part of modern political economy. The list of these tacit assumptions is long, but a cluster of related candidates rises to the top in any account: agent and institutional homogenization as a theoretical and methodological default position, centralization and monocentrism as key principles of governance, and “seeing like a state” as an acquired forma mentis in thinking about political and economic affairs. Let’s take these core assumptions that the Ostrom project challenged one by one.

The typical strategy of dealing with the challenge of heterogeneity is easily one of the main assumptions that the Ostrom project challenged. The homogenization by assumption of social agents, the rhetorical trick by which homogeneity is nominally recognized as a fact and a problem but then, in the next move, reduced to a modal profile, a homogenous “representative agent,” with minimalist formal features, is both popular and influential. Versions of this strategy, operating at different levels and on different aspects of heterogeneity, are prevalent, from economics and public choice to political science and social philosophy. The logic of Ostrom’s perspective challenges that approach. Furthermore, it explicitly links the problem of heterogeneity to that of institutional diversity: Because institutional arrangements in any society emerge largely as a response to heterogeneity, and in their turn are conditions of heterogeneity, institutional diversity should be a central (if not the central) theme of institutional theory.  Yet, that doesn’t seem to be the case in much of the literature. Models of “markets and hierarchies” remain pivotal, although the theoretical lenses of the theory of the market or the theory of the state are obviously incapable of capturing and illuminating the wide diversity of existing and possible institutional arrangements. A replacement of the classical dichotomous typology (markets and states) with a new trinity (markets, states, and networks) is not an adequate solution. By refusing to accept such solutions, the Ostromian approach looks commonsensical. Yet, when compared to the prevalent views, it is radical. Bloomington institutionalism is ready to take institutional diversity seriously – “beyond the Market and the State,” “beyond Hobbes and Smith” – and to follow to the end its analytical and normative logic.

Needless to say, this approach, making a key point out of the reality of heterogeneity, is more relevant today than ever. Diverse values, identities, principles and cultures clash in the global arena. Emigration, increasingly diverse populations within the boundaries of nation-states, demography and culture, increasingly technology-driven social segmentation and cultural heterogeneity – all challenge governance systems not only at the global and national levels but also, ever more so, at the local level. All these features revive the theme of pluralism, diversity and collective action with unprecedented intensity. The increasing preoccupation with elements of heterogeneity in current political and economic theory is unavoidable, once heterogeneity is recognized as a key feature of social reality and as a genuine political and economic challenge. In what measure is it possible to have an institutional order defined by freedom, justice, prosperity, and peace in an increasingly interdependent world of diverse and conflicting views, beliefs, preferences, values, and objectives? This is a discussion about the fundamental nature of governance (both domestic and international) in the new era. With it, we are at the core of the major political and economic challenges of our age. And at the same time, we are at the cutting edge of contemporary social science and political philosophy. The empirically grounded, applied institutional analysis of the possibility of social order, governance, and economic performance in extreme conditions, lacking consensus or convergence of beliefs, preferences and values, seems to be indeed the new frontier.

The theme of institutional diversity leads to the next contender on the list of challenged assumptions: the bias toward centralization and against polycentric, decentralized arrangements. When it comes to governance in complex social systems, the ideal of monocentrism (usually thought of as an idealized model or image of the nation state) seems to have become the default mode in thinking about governance. Ostrom and her associates challenge that. They instead advance the notion of polycentrism. Even before becoming a normative challenge, polycentricity is a challenge on descriptive, positive grounds. The elemental starting point is the basic condition of complex human societies. In real life there are multiple, competing, and overlapping action arenas, institutional levels and sources of decision-making and authority: from families, communities, and religious organizations to nations and states. None of them has absolute power and authority in the life of an individual in all aspects, at all times, and in any circumstance. This dispersion of action arenas and authority is a social fact, a feature that defines complex human societies.  Thinking about society as being something created, granted, sanctioned by (and depending on) a centralized, ultimate and unique all-monitoring source of authority and power violates principles of positive political economy. It also violates normative principles. The image that emerges from the Ostrom project is one of a conglomerate of diverse institutions, materializing various degrees and forms of decentralization and centralization through functional differentiation and historical accidents, in an ongoing process of change. Inside this process, the typical institutional forms of the national state, market, or democracy take shape, or decline and fade away, form and reform, as time goes by. A governance system, polycentric governance, may emerge out of these processes, under certain conditions. If so, it will have properties favorable to institutional performance and human flourishing.

The polycentrism vision advanced by the Ostroms thus suggests that we should be cautious when advancing claims of preeminence for various institutions, be they the democratic state or the free market. Again, that caution may sound commonsensical, but when compared with once-prevalent views, it is rather radical. We should avoid looking at the world through one and only one pair of conceptual lenses. And we should avoid thinking about governance assuming one and only one institutional arrangement. The retreat from pluralism is dangerous, both on analytical and on normative grounds. With this remark, we have reached the third member of the challenged-assumptions list: “seeing like a state.

Reading through the academic literature dedicated to governance, one cannot avoid the feeling that a large part of it is written as if the public-choice revolution had never taken place, as if no new insights regarding the potential and limits of centralized, state-centered, technocratic, and bureaucratic government had been brought to the fore in the last several decades. A state-centric perspective brushes aside a large part of available empirical and theoretical knowledge on the nature, functioning, and performance of the particular institutional arrangement called the modern state. On the other side, the Ostroms introduced a public-choice-inspired, but post-public-choice attitude: an attempt to rethink the theory and practice of governance, as if public choice made a difference. Their logic incorporates first- and second-generation public choice insights and lessons, and reconsiders institutional theory and the problems of governance in that light. This approach simply follows the implications of public-choice lessons and attempts to substitute the state-centered view with a pluralist one: a reasonable idea of “institutional portfolio diversification,” in a context in which the vulnerabilities and dangers of relying on only one institutional arrangement have become so obvious. Yet, again, this is an idea that may sound commonsensical, but when compared with then-prevalent views, is rather radical.

How powerful, subtle, and profound is the intellectual current against which the Ostrom approach ran is best illustrated by the reception of the Bloomington scholars’ work itself.  If anything, their work demonstrated that “seeing like a state” is not the unavoidable way to think about collective-action problems and their solutions. Collective-action solutions do not necessarily involve seeing like a state, acting like a state, or mobilizing the state. Yet, surprisingly often, despite Ostrom’s explicit and persistent efforts to disentangle the idea of collective action from that of “The State,” and to demonstrate that successful collective action doesn’t need a Leviathan, one finds her work invoked to support state-sponsored arrangements, wrapped in vague notions of “democracy” and “participation,” all having nothing to do with the spirit or the letter of that work. All done, by all accounts, in good faith. The power of the “seeing like a state” forma mentis among an important part of the relevant epistemic community is profound. In brief, the Ostroms’ attempt to follow up on the public-choice revolution’s insights, and to try to move studies of governance away from a state-centered view to a pluralist and polycentric one, remains a work in progress, one that sounds as radical today as it did thirty years ago.

Looking back, by their own account, Elinor and Vincent Ostrom saw their lifetime endeavors as having been part of a long and illustrious intellectual tradition contributing to the “science and art of the association,” that indispensable constituent of a self-governing society of free individuals. Considered in this light, their work has been a continuous effort to articulate an alternative way of looking at governance and institutional order: probably “seeing like a citizen” is one good contender for a name for it; “seeing like a self-governing human being” is another. Their endeavors were driven by two convictions: First, one cannot build a self-governing society of free individuals when the prevalent, elite mode of thinking about institutional order and governance thinks like a state and strives for monocentrism. Second, the ideal of a society of self-governing, fallible, but capable human beings who are able to master the “art and science of the association” is worth pursuing because in it lies a powerful self-fulfilling prophecy. In the end, it is all about preserving, developing, and disseminating as much as possible the knowledge of this unique and fragile but vital “art and science.”

[Article based on excerpts from Institutional Diversity and Political Economy. The Ostroms and Beyond, Oxford University Press (forthcoming, December, 2013).]

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