Americans Elinor Ostrom and Oliver Williamson won the Nobel economics prize on Monday for their analysis of economic governance ?the way authority is exercised in companies and economic systems.
Ostrom is the first woman to win the prize since it was founded in 1968, and the fifth woman to win a Nobel award this year? a Nobel record.
Ostrom, who has devoted her career to studying the interaction of people and natural resources, told the Royal Swedish Academy of Sciences by telephone that she was surprised by the Nobel. ?There are many, many people who have struggled mightily and to be chosen for this prize is a great honor,? she said. ?I?m still a little bit in shock.?
The academy cited Ostrom ?for her analysis of economic governance,? saying her work had demonstrated how common property can be successfully managed by groups using it. Williamson, the academy said, developed a theory where business firms can serve as structures to resolve conflicts.
?Over the last three decades, these seminal contributions have advanced economic governance research from the fringe to the forefront of scientific attention,? the academy said. He said the American winners? research shows that economic analysis can shed light on most forms of social organisation.
?Elinor Ostrom has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatised,? the academy said.
?Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories.?
One notable publication Ostrom wrote in 1990 examined both successful and unsuccessful ways of governing natural resources ?forests, fisheries, oil fields, grazing lands and irrigation system?that are used by individuals. A professor at Indiana University, whose name has circulated as a possible winner in recent years, Ostrom told Swedish television her first reaction was ?great surprise and appreciation,? and said she was ?in shock? over being the first woman to clinch the honour. Williamson is honoured with the other half ?for his analysis of economic governance, especially the boundaries of the firm.? He has argued that hierarchical organisations such as firms represent alternative governance structures, which differ in their approaches to resolving conflicts of interest.
?A key prediction of Williamson?s theory, which has also been supported empirically, is … that the propensity of economic agents to conduct their transactions inside the boundaries of a firm increases along with the relationship-specific features of their assets,? it said.
The economics prize was the last Nobel award to be announced this year. It?s not one of the original Nobel Prizes, but was created by the Swedish central bank in Alfred Nobel?s memory. Nobel Prize winners receive 10 million Swedish kronor ($1.4 million), a gold medal and diploma from the Swedish king on December 10, the anniversary of Nobel?s death in 1896.
Americans dominated the awards this year. For the five Nobel prizes announced last week ? for medicine, physics, chemistry, literature and peace?nine of the 11 laureates were US citizens, including US President Barack Obama who sensationally won the prestigious Peace Prize for his ?extraordinary efforts to strengthen international diplomacy and cooperation between peoples.?
The Literature Prize went to German writer Herta Mueller for her work inspired by her life under Nicolae Ceausescu’s dictatorship in Romania. This year was also a record year for women laureates, with four honoured: Herta Mueller for literature; Australian-American Elizabeth Blackburn and Carol Greider of the United States were awarded the Nobel Medicine Prize; and Ada Yonath of Israel was one of three scientists recognised for her work in chemistry.
The Nobel prizes, founded by Swedish industrialist Alfred Nobel, were first awarded in 1901. Nobel, the inventor of dynamite, died childless in 1896, dedicating his vast fortune to create “prizes to those who, during the preceding year, shall have conferred the greatest benefit on mankind.” Laureates receive a gold medal, a diploma and the prize sum at prize ceremonies held in Stockholm and Oslo on the anniversary of Nobel’s death, December 10.