After the Second World War, this ‘old’ institutionalism with its pluralistic methods gave way to a neoclassical synthesis (Morgan and Rutherford 1998). In the beginning of the twentieth century, many American economists took institutions seriously, especially property rights. Still, commons have never completely disappeared. It was thus more interested in markets and the role of the state than in local institutions for collective action.
Political economy emerged to explain a new global commercial order and to advise governments on how to increase national wealth. From a longue durée perspective, the development of capitalism led to the disappearance of most commons over the past centuries. Part of this is due to the fuzziness of the concept of commons itself and its lack of a consensual definition among contemporary scholars and practitioners (De Moor 2011). First understood as solutions to problems of natural resource management in agriculture, fishing, grazing, forestry, water supply, and wildlife, commons are now recognized as applicable to a wide range of collective action challenges such as urban infrastructure, internet platforms, local art production, etc.ĭespite the documented successes of commons in many parts of the world and the hopes that such institutional arrangements generate for better and more sustainable modes of living, they remain marginal in economic discussions (Standing 2019). Over the past half-century, an extensive body of evidence shows that commons have the potential to be fair, resilient, and efficient systems for allocating resources (Ostrom 1990). More than a decade after Elinor Ostrom received a Nobel Prize in Economics for her analysis of the commons, the place of this institutional arrangement in economic policymaking and legal-institutional design is still unclear. Within this narrow framework, the private enterprise system more often than not was hailed as the best alternative. In the late 1960s, neoclassical economists who came to be interested in environmental questions dismissed commons as inefficient solutions to allocation problems. By advocating an institutional comparison in terms of the costs or the value of production under alternative allocations of property rights, Ronald Coase contributed to the narrow theoretical approach taken by new institutional economists. How can we explain this belated integration of commons in economics? In this paper, we trace some of the origins of the neoclassical comparative institutional analysis. While a new institutional economics emerged in the 1960s, commons were not taken seriously in postwar economics before the seminal work of Elinor Ostrom in the late 1980s. Among these institutions, commons have a long history in western Europe. Progressives the world over cherish high hopes in the development of institutions for collective actions.