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Institutions for Imperfect, Unpredictable People

Darshana Patel's picture

Since time immemorial, human beings have been defined by the theory of the state of nature.  The theory goes that - without an external, governing hand - humans enter a state of anarchy. Decades of work by Professor Elinor Ostrom, however, have gone into proving the limitations of this theory. In Crowding Out Citizenship, Ostrom describes the many assumptions behind the way policy textbooks and planners view human behavior:
 

“Centrally designed and externally implemented rules-based incentives – both positive and negative – are seen as universally needed to overcome all types of social dilemmas….The state is viewed as a substitute for the short-comings of individual behavior and the presumed failure of community. The universal need for externally implemented incentives is based, however, on a single model of rational behavior which presumes short-term, self-interested pursuit of material outcomes as the only mode of behavior adopted by individuals.”
 

“Leviathan is alive and well in our policy textbooks,” Ostrom says.
 

Ostrom challenges these assumptions and claims that there are multiple types of individuals - ranging from the “rational egoists” that always act out of self interest to “conditional cooperators” that act in the interest of the group under certain conditions. These conditions that induce cooperation are worth paying attention to. As mentioned by Marianne Fay in an earlier blog article, a few characteristics must be in place to induce cooperative behavior.  Among others, information and communication play an important role. 
 

One troubling assertion by Ostrom is that sometimes the introduction of an external, institutional structure actually induces people not to cooperate where they did before this external intervention. These institutions “crowd out citizenship.” 
 

Policy planners assume that people are perfectly predictable.  In every social dilemma, people will always act in their self-interest. But in fact, people are imperfect and unpredictable. Sometime they will act out of their own self-interest but sometimes they won’t. The difference is in the way institutions are built.


Ostrom’s work distances us from the textbook examples that currently guide our institutions. Her work is hopeful but never unrealistic. The problems we face at the global down to the local level are complex and require us to embrace human complexity rather than reduce it down to simple game theory.
 

Her work has many implications for development work and the governance and accountability agenda as well. In efforts to build strong governance institutions, do these efforts actually crowd out good governance practices? 
 

I must confess my bias towards Professor Ostrom’s work.  When I was an undergraduate economics student, I actually felt relief when first reading her Governing the Commons for an economics course. I never knew economists thought like this. Then of course, I found out that she is actually a political scientist by training. This year, she became the first woman to win in the Nobel Memorial Prize in Economic Science, sharing the prize with economist, Oliver Williamson. Congratulations, Professor Ostrom, and thank you for (scientifically) acknowledging our better selves. 

Photo Credit: Flickr user Denis Collette...!!!
 

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