Nobel Prize For Economics: Elinor Ostrom, Oliver Williamson Win

JEANNINE AVERSA, KARL RITTER and MATT MOORE
10/12/09 05:49 PM

WASHINGTON — One scholar studies how best to manage resources like forests, fisheries and oilfields. A fellow American looks at why some companies grow so large. Together they're winners of this year's Nobel Prize in economics for groundbreaking work that could affect efforts to prevent another global financial crisis.

Elinor Ostrom, 76, known for her work on the management of common resources, is the first woman to win a Nobel in economics. She shares this year's prize with Oliver Williamson, 77, who pioneered the study of how and why companies structure themselves and how they resolve conflicts.

Monday's final prizes of 2009 capped a year in which a record five women won Nobels. And it was an exceptionally strong year for the United States, too. Eleven American citizens, some of them with dual nationality, were among the 13 Nobel winners, including President Barack Obama, who won the Nobel Peace Prize on Friday.

The Royal Swedish Academy of Sciences said it chose Ostrom and Williamson for work that "advanced economic governance research from the fringe to the forefront of scientific attention." They will share the $1.4 million prize.

Ostrom showed how common resources – forests, fisheries, oilfields, grazing lands and irrigation systems – can be managed successfully by the people who use them, rather than by governments or private companies.

"What we have ignored is what citizens can do and the importance of real involvement of the people involved – as opposed to just having somebody in Washington ... make a rule," Ostrom, a political scientist at Indiana University, said during a brief session with reporters in Bloomington, Ind.

Williamson, an economist at the University of California, Berkeley, focused on how companies and markets differ in resolving conflicts. He found that companies are typically better able than markets to resolve conflicts when competition is limited, the citation said.

The academy did not specifically mention the global financial crisis. But many of the problems at the heart of it – bonuses, executive compensation, risky and poorly understood securities – involve a perceived lack of oversight.

Read more at: http://www.huffingtonpost.com/2009/10/12/nobel-prize-for-economics_n_317150.html