27 Apr 2018

A comment on Elinor Ostrom's work

I don't know exactly when I first heard about Elinor Ostrom's work. It may have been before or after I read her husband Vincent's 1953 monograph on "Water Supply," one of the first economic analyses of the Metropolitan Water District of Southern California (the subject of my PhD dissertation), also known as Met.

I know I heard about her after I wrote my 2004 paper on deforestation in Nepal. My perspective was pessimistic, but then I heard that she had worked with many others to understand how deforestation was not as common as 'the tragedy of the commons" would imply.

I know that I cited her work in my dissertation, and I remember that when briefly I met her at Davis, she was very excited to know that I was working in an area where her husband had worked over 50 years earlier.

Over the past few years, I have grown more appreciative of her work, which built on her husband's but also enabled and encouraged dozens of other researchers. In her co-authored 1994 book, Ostrom said that much of her work was devoted to disproving Garritt Hardin's claim in his 1968 article on the tragedy of the commons, i.e., that it was impossible to sustainably manage common-pooled goods. To do this, Elinor built on her 1964 PhD dissertation, which explained how groundwater in West Basin (an area in Southern California) was sustainably managed to reduce over-drafting of local supplies and thus salt-water intrusion.

And so I used her work, read more of her papers, and even taught one of my courses with that 1994 book. I always knew about her dissertation but I had never read it. And then someone told me (I can't find their name) that I should check it out, so I went and downloaded it.

It's 620 pages, but I was going to be a good student and killed a tree to print it out. Last Christmas I read it while on vacation. I only read the 100-page introduction, but I have a few thoughts on her work and how it compares to mine, as I find the differences to be interesting. (You can be self-indulgent on a blog, right?)

First, let's compare our titles. Hers is "Public Entrepreneurship: A Case Study in Ground Water Basin Management" where as mine is "Conflict and Cooperation within an Organization: A Case Study of the Metropolitan Water District of Southern California." We both did case studies, but mine has "conflict" in the title. Both of our dissertations explore the tensions and negotiations among various parties sharing water, but mine advertises this tension on its cover.

Looking inside, I found her work to be more historical and factual than analytical. It reads like a lawyer's brief of the various actions, negotiations and people involved in "public entrepreneurship." My work, in contrast, moves quickly through an historical background into an analysis of what was going wrong and what to do about it.

Thus, I arrive at the most interesting difference. It seems to me that Ostrom wrote her dissertation by focusing on what was going right in the quest to address a challenge (glass half full), whereas I focussed on what was impeding progress towards better outcomes (glass half empty). I am not sure how she thought of her approach (please tell me if you have any records of her discussing it), but I can see it as far more friendly to water managers (and thus more successful at getting their attention) than my work, which has been [mostly] ignored.

Unfortunately for my marketing department, I don't see a need to change my approach. First, because I prefer to work on improvements rather than appreciate existing functionality. Second, I am skeptical of a "softly softly" approach after decades of sweet talk, as water managers have hardly reformed. That said, I can see how differences in presentation could be more important than differences in analysis or conclusions.

Turning back to the specifics of her dissertation, I have a few notes:
  • She assumes [page 8] that water managers will be punished if they pursue their selfish interest. In my dissertation, I used experiments to show how Met's water managers do pursue their self interest. Indeed, they are just as selfish as random college students [pdf]. What's ironic about her assumption (which she may have contradicted later in that work) is that Ostrom was one of the founders of the Public Choice school, which focusses exactly on how bureaucrats pursue their self interest. So it looks like she changed her mind at some point.
  • She never calls shared groundwater a "common-pool resource" but mislabels it as a public good [page 4]. Samuelson defined public goods in 1954. Buchanan defined club goods in 1965. Perhaps Hardin's 1968 paper was the first to define common-pooled goods?
  • The court ordered groundwater withdrawals to drop by 2/3rds. Sixteen years later, it had only dropped by 1/3. Plus ├ža change...
  • Over time, the number of negotiating parties dropped, but the growth in precedents and overlapping duties among larger, more powerful organizations meant that complexity increased.
  • I can't understand at all how she could do an entire dissertation on regional water management without a single map. She has figures, tables and charts but no maps!
  • Met was seen as a cheap source of low quality water in the early 1960s. (It only started delivering at full capacity in 1960, twenty years after deliveries began.)
  • On a related note, Met shows up in West Basin with a "solution," i.e., selling West Basin "excess" water that could be used to recharge local aquifers. That offer matches up with other conditions at the time. In its early years, Met preferred to dump water at low prices (rather than reduce its imports from the Colorado River) because it thought that use would "perfect" its rights on the Colorado River. That strategy was invalidated by the Supreme Court's 1963 Arizona v California ruling limiting California's total draw (halving Met's rights within that draw) to 4.4 Million Acre Feet.
Sadly, Met's strategy of "use it or lose it" has permeated water management in most of the Western US, to the detriment of water markets (some argue that "use" does not include selling) and environmental preservation (better to move water to "highest and best [economic] use" than leave it within ecosystems whose benefits go to everyone).

Bottom Line: Elinor Ostrom got started by finding out how water management really fails succeeds works, and everyone -- especially academics -- can learn from such practical understanding of the functional complexity of living institutions.