Title:
Nobel Recognizes Research Into Economic Governance
Description: This is
a VOA Special English Economics Report.
See text below
Text:
Economists usually study markets. Now, two Americans
have won the Nobel Prize in economics for not
studying markets.
They will share almost one and a half million
dollars for their analysis of economic governance.
This is the study of how economic activity is
governed within companies, communities and other
groups.
The winners are Elinor Ostrom of Indiana University
in Bloomington and Oliver Williamson of the
University of California, Berkeley. The prize in
economic sciences has gone to sixty-three men since
it was first awarded forty years ago. Elinor Ostrom
is the first woman. And, like other winners over the
years, her training is not limited to economics. She
is a professor of political science and of public
and environmental affairs.
Today, economic theory suggests that good resource
management requires ownership, either private or
public. If not, the thinking goes, then
self-interest will lead to overuse and destruction
of shared resources. Ecologist Garrett Hardin
described this idea in nineteen sixty-eight as "the
tragedy of the commons."
Elinor Ostrom showed how local decision making can
lessen the tragedy. Her research has deepened
understanding of how people balance their needs with
those of others who depend on the same resources.
She studied communities like farmers in Southern
California who depended on a common water supply.
She documented how people who use resources often
develop ways to share them. One example is forest
management. She said one of the most important
variables as to whether or not a forest survives is
whether local people supervise the forest and each
other.
Oliver Williamson has studied big companies and
found that they often are better than markets at
doing complex jobs. Under his theory, businesses act
as structures for conflict resolution. For example,
companies that own their suppliers can avoid
long-term contracts and disputes over prices. This
can make production more efficient and make better
use of limited resources.
But businesses can also abuse their power. Professor
Williamson says the best way to deal with this is
not by limiting the size of companies, but through
industry regulation.
The Royal Swedish Academy of Sciences said
economists need to do more than study markets and
prices. The Nobel judges urged more research like
the kind they recognized with this year's award.
And that's the VOA Special English Economics Report.
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personally reviewed this video and found it appropriate for
the news section of English Global Group. This
is a Voice of America video which covers an interesting
topic in Special English. I would appreciate some feedback from both
students and teachers about this video. You can comment in
the window below using any of a number of different services
including Facebook, Yahoo, AOL, and Hotmail.
