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The Sydney Morning Herald

Girl Power Takes on Selfishness

Jessica Irvine

The official photo gallery of Elinor Ostrom, joint winner of this year's Nobel memorial prize in economics, says it all. In one picture, she stands behind a lectern in a tie-dyed T-shirt, gesticulating wildly with her right arm. In another, she squats for a portrait in traditional Nepalese garb in an otherwise male group studying local irrigation systems.

It is no coincidence the same year that brought us the global financial crisis brought us the first female winner in the prize's 41-year history. Economics is changing.

Once considered the domain of men in tweed jackets constructing abstract models of the world, a new breed of economics, fermenting for a couple of decades, burst into the spotlight recently thanks to greedy Wall Street types who carelessly exposed the pitfalls of a loosely regulated free market.

Now Ostrom, a 76-year-old American professor of political science specialising in community-based and self-managed eco-systems, is one of our leading economic lights. When asked if it was important that a woman won, she was unequivocal: ''Of course! Someone at my age has lived through an era in which women were discouraged from going to graduate schools at an earlier juncture and so it is a great satisfaction. There are many, many women out there who will be winning the prize in the future.''

One up for girl power. But more important is the traditionally female approach she has applied to studying systems of economic governance. She took economics' traditional rational man, or ''homoeconomicus'', and refashioned him to better resemble real humans, adding a softer, more community-minded edge.

She is most renowned for her work investigating how societies manage ''the commons'', scarce shared resources such as pastures, fish stocks, groundwater basins and the atmosphere. It is a response to the 1968 book by the biologist Garrett Hardin The Tragedy of the Commons.

He asserted that societies, left to their own devices, would always exploit and overuse common resources. A certain pasture will only sustain so many cows. But individual farmers would each benefit from getting an extra cow to produce more milk, while the cost of this over-farming would be spread among many. Because farmers will always pursue selfish interests, some external body, be it the government or a system of private ownership, must be introduced to organise things.

In her 1990 book, Governing the Commons, Ostrom rejected the idea of exclusively selfish and greedy individuals, along with the assumed dichotomy that either the free market or government must impose control.

She catalogued many instances, from fieldwork in countries such as Kenya, Nepal and Uganda, where communities successfully managed their own communal resources. It was common for small groups to create rules for sharing, and these rules were more likely to be obeyed than externally imposed ones.

For a world struggling to come to terms with the overuse of scarce environmental resources, Ostrom's research is timely. However, as she freely admits, it is no easy thing to engineer such communal responses to big challenges like climate change.

''When asked whether easy solutions are likely to be achieved for problems involving large, amorphous groups that face significant problems of communicating, such as the overuse of ocean fisheries or global warming, I always respond in the negative,'' she wrote.

But there are better and worse ways of going about it. In 2007, she outlined the six challenges academics and policy makers must overcome if we hope to achieve a framework for sustainable socio-ecological system.

First, we must stop looking for one ''panacea'' to solve all troubles. Second, we must embrace complexity. Simple models may be attractive, but are worthless if they fail to reflect reality. Third, analysts must take a multidisciplinary approach to addressing problems. Fourth, models must be built from the ground up and to suit different scales - country, region, family - as no one size fits all. Fifth, theoretical predictions must be backed up by real data to prove they work. And finally, we must recognise the benefits of ''institutional diversity'' - local communities may have their own different and successful ways of doing things.

Amen to that, sister.

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Jessica Irvine is the Herald's economics writer.

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