FOUNDATIONS OF CONTEMPORARY ECONOMICS: ELINOR OSTROM AND COMMON-POOL RESOURCES

Elinor Ostrom changed the way of thinking about common-pool resources in econom-ics. She provided an institutional analysis that shows how groups can find solutions to complex problems for collective goods. Ostrom showed that collective action can work among rational individuals. She and her husband Vincent objected privatization, nation-alization, and centralized government for governing the commons. Instead, they pro-moted polycentric governance as a solution for many common-pool resources. Her ap-proach is known as the Bloomington School of Political Economy, a thriving direction in Public Choice Theory.