Vincent and Elinor Ostrom were the founders and dominant figures of the Bloomington School of Institutional Analysis at the University of Indiana. The Bloomington School has a special relevance for libertarianism due to its theoretical and empirical contributions to the study of government and its optimism regarding the capacity of human beings to self‐​govern. The Ostroms have challenged the numerous social scientists and decision makers who have assumed that social order needs centralized coordination and control. Due to this assumption, claim the Ostroms, these social scientists have been unable to see the many self‐​organized governance systems that operate. An important part of the work of the Bloomington School is aimed at analyzing the nature and functions of those self‐​regulating, self‐​governance systems. We need not think of government or governance as something provided by states alone. Rather than looking only to states and “the elite decision makers of government,” we need to pay much greater attention to “the basic institutional structures that enable people to find ways of relating constructively to one another and of resolving problems in their daily lives.”

The Ostroms were initial contributors to the public choice movement, but broke with what they considered an excessively state‐​centric approach. Subsequently, they started to extend the principles of choice to the choice of institutions. When certain conditions of self‐​governance and decentralization are ensured, people are able to select and fashion their institutions. Thus, individual choice is not limited to choice on the basis of price in a market, but “involves a broader range of calculations extending to the choice of terms on which alternatives become available under diverse institutional arrangements and the institutional arrangements themselves.”

The Ostroms elaborated Michael Polanyi’s concept of polycentricity to analyze the conditions that lead to the emergence of a social order that combines the greatest degree of individual freedom with structural resilience and adaptability. Polycentric systems are complex institutional systems without one dominating central authority; they consist of multiple governing authorities and private arrangements. Each unit exercises considerable independence to make and enforce rules within a circumscribed authority. Because polycentric systems are nested and have overlapping units, information about what has worked well in one setting can be transmitted to other units. In experimenting with institutional arrangements within the smaller scale units of a polycentric system, citizens have access to local knowledge, obtain rapid feedback from their own policy changes, and can learn from the experience of other parallel units. When small systems fail, there are larger systems to call on, and vice versa. By challenging the state‐​centered paradigms in political science and by developing an entire research program focused on self‐​governance, the Ostroms have made a critical contribution to libertarian ideas in the social sciences.

Further Readings

McGinnis Michael, D. Polycentricity and Local Public Economies: Readings from the Workshop in Political Theory and Policy Analysis. Ann Arbor: University of Michigan Press, 1999.

Ostrom, Elinor. Governing the Commons: The Evolution of Institutions for Collective Action. New York: Cambridge University Press, 1990.

Paul Dragos Aligica
Originally published