My ticket to hear Elinor Ostrom give the Hayek Memorial Lecture at the IEA dropped through the letterbox today, prompting me to have a quick look at her marvellous book Governing the Commons: The Evolution of institutions for Collective Action. The question of institutional innovation as part of the wide range of responses needed to address inequality and the erosion of social capital has been on my mind – it was one of the issues in my recent Joseph Rowntree Foundation/University of York lecture (docx file – this is the draft, the final version will be on the JRF website soon, and the hour-long video is there). The dramatic technological innovations have undermined business as normal in politics and social engagement as much as in business, but we have not seen much institutional adaptation. It will be essential – just as social innovation in the form of mutuals, unions, co-ops, libraries, museums, the expansion of education etc constituted an essential response the the tech-driven social and economic dislocations of the 19th century.
Anyway, Ostrom’s work has looked at developing countries, but the criteria she sets out for the design of successful institutions are highly relevant to our own situation. The key question she addresses is exactly the one we face in a situation of trust being corroded by inequality and many people, from bankers to rioters, seeing what they can get away with: “How a group of principals who are in an interdependent situation can organize and govern themselves to obtain continuing joint benefits when all face temptations to free-ride, shirk, or otherwise act opportunistically.”
I don’t know if the lecture will be filmed but I will tweet with the hashtag #ostromiea from 6.45 on 29th March.