Ostrom’S Law

Published Mar 22, 2024

Definition of Ostrom’s Law

Ostrom’s Law is a principle named after the American political economist, Elinor Ostrom, who was awarded the Nobel Prize in Economic Sciences in 2009. The law states that “A resource arrangement that works in practice can work in theory.” This law challenges the conventional wisdom that common property is always poorly managed and needs to be either regulated by centralized institutions or privatized. It underscores the capability of local communities to manage shared resources sustainably without external enforcement, through self-organized governance structures.

Example

To illustrate Ostrom’s Law, consider the scenario of a fishing village where the local community relies on a nearby lake for their livelihood. Instead of depleting the fish stocks through overfishing, the village develops a set of rules for fishing activities. These rules might include restrictions on the types of nets used, limits on the number of fish that can be caught daily, and designated no-fishing periods to allow fish populations to recover.

These regulations, developed and enforced by the community, ensure the sustainable use of the lake’s resources. This real-world example supports Ostrom’s Law by demonstrating that a self-regulated management system, based on local knowledge and mutual trust, can effectively govern a common-pool resource.

Why Ostrom’s Law Matters

Ostrom’s Law is significant for several reasons:
– Policy Development: It provides a theoretical foundation for policy-making that respects and incorporates local governance systems over natural resources. This is particularly relevant in the management of fisheries, forests, water sources, and pastures.
– Sustainability: By acknowledging the effectiveness of community-based resource management, Ostrom’s Law offers a pathway towards sustainable environmental stewardship, crucial for addressing ecological crises such as deforestation, water scarcity, and biodiversity loss.
– Empowerment: It empowers local communities by validating their capability to manage resources sustainably, which can lead to better social, economic, and environmental outcomes.

Frequently Asked Questions (FAQ)

How does Ostrom’s Law contradict the Tragedy of the Commons?

The Tragedy of the Commons suggests that individuals acting independently according to their self-interest will ultimately deplete a shared resource, even when it is clear that it is not in anyone’s long-term interest. Ostrom’s Law contradicts this view by demonstrating through empirical evidence that local communities can create rules and institutions that avoid the tragedy, successfully managing common resources without the need for strict government intervention or privatization.

Can Ostrom’s Law be applied in urban contexts?

Yes, Ostrom’s Law can also be applied in urban settings. For instance, community gardens in cities are examples of shared resources managed collectively by local residents. These gardens not only provide food but also serve as community-building spaces, showcasing how urban communities can organize themselves to manage shared spaces effectively.

What are the challenges in applying Ostrom’s Law?

While Ostrom’s Law has been successfully applied in various contexts, it also faces challenges, such as:
– Scalability: The effectiveness of self-governance systems might diminish as the scale of the resource or the number of users increases.
– External Pressures: External economic or political pressures can undermine local governance systems, making sustainable management more difficult.
– Diversity: Heterogeneity among users in terms of interests, cultures, or economic status can complicate the establishment of consensus and collective action.

Elinor Ostrom’s work, encapsulated in Ostrom’s Law, shifted the narrative on common-pool resource management by showing that, under certain conditions, communal governance can be effective. Her research highlights the importance of institutional diversity, local participation, and the capability of communities to self-organize, challenging the notion that centralization or privatization are the only solutions for managing shared resources sustainably.