Governing the Commons: The Evolution of Institutions for Collective Action
Communities can govern what they share — without selling it off or handing it to the state.
What if the famous “tragedy of the commons” — that people sharing a pasture or a fishery will inevitably wreck it — simply isn’t true?
The big idea
For decades the textbook story was stark: any resource that everyone can use and no one owns is doomed. Each person grabs as much as they can before someone else does, and the shared pasture, fishery or forest is destroyed. The only fixes on offer were to fence it off and sell it (privatisation) or to put the government in charge.
Elinor Ostrom went and looked. Travelling through real communities — Swiss mountain villages, Japanese forests, Spanish irrigation networks, Philippine canals — she found shared resources that their own users had managed sustainably for hundreds of years. The people who depended on the resource had quietly invented their own rules, watched to see that everyone followed them, and dealt with cheats. There was a third way all along.
How it came about
Ostrom trained in political science at a time when economics increasingly modelled people as isolated self-maximisers. With her husband Vincent and colleagues at Indiana University’s Bloomington Workshop, she spent decades gathering field studies of how real communities govern water, fish, pastures and forests. Governing the Commons, in 1990, distilled this evidence into a single argument and a set of design principles.
In 2009 the work brought her the Nobel Memorial Prize in Economic Sciences — the first ever awarded to a woman — “for her analysis of economic governance, especially the commons.” The choice surprised many economists: Ostrom was a political scientist whose conclusions came from patient fieldwork rather than equations, and her prize helped widen what the discipline counts as evidence.
Why it mattered
It overturned a piece of conventional wisdom that had shaped real policy — used to justify privatising village lands and nationalising forests and fisheries, sometimes destroying the very local institutions that had kept those resources healthy. Ostrom showed that communities are often the best stewards of what they share, and gave reformers a concrete checklist for when self-governance is likely to work.
A way to picture it
Think of a shared kitchen in a flat. If no one agrees on anything, the sink fills with dishes and the milk always vanishes — the tragedy of the commons in miniature. But most flats don’t collapse: the flatmates work out a rota, notice who isn’t pulling their weight, and have a quiet word — then a sharper one — when someone keeps cheating. No landlord and no sale required, just clear boundaries, shared rules, watching, and proportionate consequences. That, scaled up, is what Ostrom found holding forests and fisheries together for centuries.
Where it sits
Ostrom’s commons stands directly against Garrett Hardin’s 1968 “tragedy of the commons,” and against the lone, purely selfish actors of game theory’s prisoner’s dilemma (see John Nash in this Library). Where Adam Smith showed how self-interest can be channelled by markets, and Keynes showed where markets need the state, Ostrom mapped a third sphere — the institutions communities build for themselves — and in doing so reshaped environmental and development policy for the age of climate change.
Freedom in a commons brings ruin to all. — Garrett Hardin, Science 162 (1968), the conclusion Ostrom sets out to test.
Clearly defined boundaries: Individuals or households who have rights to withdraw resource units from the CPR must be clearly defined, as must the boundaries of the CPR itself. — Ostrom, Table 3.1, design principle 1.