STOCKHOLM, Oct 13 – Elinor Ostrom became the first woman to win the Nobel Economics Prize on Monday for research seen as highly topical amid efforts to tackle climate change and in the wake of the economic crisis.
Economist Oliver Williamson, another US national, shared the 10-million-kronor (1.42-million dollar, 980,000-euro) prize with Ostrom, whose name has circulated for years as a possible winner.
Ostrom told Swedish television her first reaction was "great surprise and appreciation" and said she was "in shock" at being the first woman to clinch the honour.
Ostrom describes herself as a political scientist instead of an economist and is a professor at Indiana University, where she researches the management of common property or property under common control, such as natural resources.
Her work — inspired by her mother\’s "Victory Garden" during World War II to feed Allied troops — challenged the notion that common property is poorly managed and should be either regulated by central authorities or privatised, the jury said.
"If we want to halt the degradation of our natural environment and prevent a repetition of the many collapses of natural-resource stocks experienced in the past, we should learn from the successes and failures of common-property regimes," it said.
She conducted numerous studies of user-managed fish stocks, pastures, woods, lakes and groundwater basins, and concluded that the outcomes are "more often than not, better than predicted by standard theories," it added.
Ostrom told a news conference at the university: "I have been studying how local people as well as government officials have attempted to solve very difficult problems," such as deforestation and loss of fisheries.
"When individuals have this way of working together officially and can build trust and respect they may be able to solve problems," she added.
Williamson, a professor at the University of California Berkeley, was honoured with the other half of the prize "for his analysis of economic governance, especially the boundaries of the firm."
He has studied the existence of large firms and argued that hierarchical organisations represent alternative governance structures which differ in their approaches to resolving conflicts of interest.
"According to Williamson\’s theory, large private corporations exist primarily because they are efficient…. When corporations fail to deliver efficiency gains, their existence will be called in question," the jury said.
Landis Gabel, a senior economics and management professor at top French business school INSEAD who studied under Williamson in the 1970s, told AFP the choice of Williamson and Ostrom was "timely."
"Both the Nobel laureates this year have been working on areas that kicked off with the concept of failing markets," he said.
"In the one case (in Ostrom\’s work) the failure has to do with common resources and the other (Williamson\’s) with imperfections that have implications for the structure of business firms," he said.
"But both of these laureates have done work quite different from the more traditional, purely theoretical work that drives off of perfect markets, perfectly rational behaviour."
Timothy Van Zandt, also an economics professor at INSEAD, told AFP that Williamson\’s ideas "have changed the way financial firms are run."
Gabel told AFP that Williamson\’s ideas differed from more traditional market theorists, some of whose ideas are considered to have been discredited by the recent financial and economic turmoil.
"To the extent that there might be a reaction of the Nobel committee to the recent problems in the world economy, that reaction would be favourable to Williamson," he said. "Because his work doesn\’t start with an assumption that everything\’s perfect (in markets), but quite the contrary."
Meanwhile the committee\’s decision to honour Ostrom "fits in very well with current issues that the world faces about how to deal with over-exploited fisheries, global warming and other environmental problems which ultimately come down to too many people using too much of the resources," Van Zandt said.