Americans Elinor Ostrom and Oliver Williamson won the Nobel economics prize on Monday for their analyses of economic governance — the rules by which people exercise authority in companies and economic systems.
Ostrom was the first woman to win Nobel Memorial Prize in Economic Sciences since it was founded in 1968, and the fifth woman to win a Nobel award this year — a record for the prestigious honors.
Ostrom was the first woman to win Nobel Memorial Prize in Economic Sciences since it was founded in 1968, and the fifth woman to win a Nobel award this year — a record for the prestigious honors.
It was also an exceptionally strong year for the United States, with 11 American citizens — some of them with dual nationality — among the 13 Nobel winners, including President Barack Obama, who won the Nobel Peace Prize on Friday.
The academy said over the last three decades, the work done by Ostrom and Williamson had "advanced economic governance research from the fringe to the forefront of scientific attention." It said their research showed that economic analysis can shed light on most forms of social organization.
Issues of governance have been at the heart of the ongoing world economic crisis. The failure by boards of directors, for instance, to police excessive compensation, or prevent bonuses that reward excessive risk taking, can be considered a corporate governance issue.
Ostrom, working out of Indiana University's Workshop in Political Theory and Policy Analysis, devoted her career to studying the interaction of people and natural resources. Bucking common theory, she demonstrated how common resources can be successfully managed by groups using it, the Royal Swedish Academy of Sciences said.
Williamson, who is at the Walter A. Haas School of Business at the University of California, Berkeley, was cited for his studies on how organizations — including companies — are structured and how that affects the cost of doing business.
Ostrom told the academy by telephone that she was surprised by their choice. "There are many, many people who have struggled mightily and to be chosen for this prize is a great honor," she said. "I'm still a little bit in shock."
Williamson, 77, said he was "gratified" by the honor. "One of the benefits I think that will accrue, or at least I hope will accrue, is that organizations will play a more prominent role in the study of economic activity in the near future," he said.
According to Williamson's theory "large private corporations exist primarily because they are efficient. They are established because they make owners, workers, suppliers, and customers better off than they would be under alternative institutional arrangements," the academy said. "When corporations fail to deliver efficiency gains, their existence will be called in question," it added. "Large corporations may, of course, abuse their power. They may for instance, participate in undesirable political lobbying and exhibit anticompetitive behavior."
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