Understanding Institutional Diversity.

• Author: Libecap, Gary D.
• Position: Book review

Understanding Institutional Diversity

By Elinor Ostrom

Princeton, N.J.: Princeton University Press, 2005.

Pp. 384. $60.00 cloth; $27.95 paperback.

Perhaps no other social scientist is more closely associated with the study of institutions, their development, and their impact on human decision making and resource use than is Elinor Ostrom. She truly is the leader in the field, and scholars and policymakers everywhere are indebted to her for her energetic and wide-ranging efforts to tackle the big questions of how to mitigate the losses of the commons.

In Understanding Institutional Diversity, Ostrom describes her own work as well as that of her many students and her even more numerous colleagues at the Indiana University Workshop in Political Theory and Policy Analysis. The conclusion that "institutions matter" in economic and political behavior and performance is now commonly repeated in the literatures of political science, economics, and sociology. But much less effectively discussed are just what this statement means, how beneficial institutions come about, why seemingly harmful institutions persist, and why such a diversity of institutional arrangements exists.

These questions, however, are the ones that have long challenged Elinor Ostrom. How she has come to think about them and her assessment of the state of our understanding are the subjects of this excellent book. Because Ostrom is eclectic in her use of the terminology of game theory, political science, sociology, and economics, her analytical frameworks can sometimes seem as complex as the empirical phenomena she seeks to explain. Further, the testable predictions she discusses are not always straightforward. For these reasons, this volume may challenge some economists who are looking for a simpler and more predictive paradigm. Such concerns should not detract from what Ostrom has accomplished, however, or from the research objectives she lays out for social scientists. Simpler paradigms are not always available or appropriate.

Ostrom has always asked the big questions and has attempted to answer them with the accumulated knowledge drawn from many case studies across many diverse settings. Gleaning broad conclusions from narrow studies and laboratory experiments is a formidable task when the underlying empirical conditions are so different. Yet this approach is the only way in which useful knowledge can be gained about institutions, their evolution, and their effects. There are no...