Nobel Prize Winner Elinor Ostrom and Her Theory of Co-Production

The selection of political scientist Elinor Ostrom as worthy of a Nobel prize in economics has been as astonishing to many economists as was the choice of President Obama as peacemaker of the year. In her case, the question is not “What has she done?” but “Who is she?” To those of us influenced by her work, however, her selection has been deeply satisfying. Much like the peace award given to Mother Teresa years ago, this is Nobel prize giving at its best:  little-appreciated work, faithfully done, has been recognized at last.

For decades, Elinor has been the invisible woman, the quintessential stereotype of the female scholar more interested in documenting her story than shouting it through the loudest microphone.  Though her theorizing resembles that of University of Chicago economist Gary Becker, she has been ignored by economists, probably because all but the best of them read and cite only those who are official members of their guild.

Deeper factors contribute to Elinor’s invisibility as well. Her career was spent at the University of Indiana, miles from the Ivy League fiefdoms. When her husband, Vince Ostrom, was still professionally active, she was seen as a loyal, supportive spouse. That Elinor had been Vince’s student was all the more reason to treat their joint work as his, despite the fact that her independent work was easily the more creative.

Most commentators are applauding her book, Governing the Commons, with its implications for the ways in which the global environment can best be managed. But her early work, though seemingly focused on much smaller matters, is at least as innovative. In the first research of hers I encountered, she compared police services in three Chicago neighborhoods with those in three adjacent suburban communities.  All six places had a low income, virtually all-black populations.  But the suburban communities were much happier with their police, despite the fact that Chicago police services cost ten times as much. Dollars spent did not translate into service provided. Elinor also worked on the hopelessly dull subject of garbage collection, noticing that keeping streets clean was more a matter of getting people to throw their trash into baskets than hiring high-priced labor to pick up the amounts strewn into the street.

She coined the word “co-production” to encapsulate her key insight: public services are co-produced by both paid and unpaid labor. Each help the other to do their work effectively, and jointly they produce the service that is needed. The janitor who keeps the schoolhouse immaculate instills in students the sense of responsibility needed to keep hallways clean and washrooms unsoiled. The policeman on the beat, in talks with friends and neighbors, exchanges information necessary to discourage criminal activity.

If all of this seems like common sense, its codification has huge public policy implications.  After reading Ostrom, one understands why health is not necessarily improved by government-paid health insurance, and students do not learn more simply by experiencing reduced class size.

My own work on schools has become increasingly influenced by Ostrom’s theory of co-production.  I have come to see that the main benefit from school choice is not simply increased competition among schools.  More important is the way it changes the relationship between paid and unpaid labor.  If families get to pick their school, and if students need to pay attention and commit to their studies to remain at that school, parents will support their child’s academic pursuits and students will focus more on their studies.

The principle of co-production is routinely applied by profit-minded firms. To increase profits, firms devise imaginative ways of substituting unpaid for paid labor. To take only the most obvious example, retail stores have figured out how to get customers to do most of the work—selecting the product, bringing it to the checkout counter, sometimes even ringing up the bill.

Ostrom focused her attention on the public sector, where the theory of co-production is routinely ignored. So it is ironic that political scientists have given her little of the recognition she deserves. When I proposed Elinor Ostrom as the leading candidate for a lifetime award to a committee of the American Political Science Association, my two colleagues looked at me dumbfounded. Her work had not focused on race relations or civil liberties or any of the other hot buttons of the day. Her insistently non-ideological approach had left her without a cadre of support from any side of the political spectrum.

Elinor herself was too interested in her own work to worry about such nonsense. At a dinner party back in the seventies I learned just how efficiently productive she was in her own life. When told that every summer was spent at their cabin on Mackinac Island in Lake Huron, I inquired how she and Vince remained so productive. She laughed, explaining that they kept duplicates of their materials at both places.  We travel for a day, then go back to work, she said. Elinor had invented the principle behind the thumb drive long before USB.

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