Julian Morris comments on Nobel Prizes in Economics

Julian Morris, IPN Executive Director, today congratulated economists Elinor Ostrom and Oliver Williamson for winning the 2009 Nobel Prize in Economics.

Morris said their work should be heeded by governments looking for solutions to the financial crisis and environmental problems, saying:

“Elinor Ostrom and Oliver Williamson have helped us to understand the role of property rights, markets and firms in economic development and conservation.

“Ostrom’s work shows that well structured property rights provide the owners of resources – be they farmers, fishers or forest dwellers – with appropriate incentives to conserve resources. Meanwhile, government intervention often undermines these incentives, leading to overuse and underinvestment in conservation.

"Williamson’s work shows when and why economic activity will occur within a firm rather than in a market. His work also helps us understand why government intervention often fails or is even counterproductive. Some regulations result in oversize companies, which become ‘too big to fail’. By contrast, rules on competition inhibit mergers that would be beneficial. The result is destabilizing, leading to bubbles and crashes.”