Posts tagged with: David R. Henderson

minimum wagaeFast food workers have been calling for a raise in the minimum wage, and politicians are touting it. There’s even a website devoted to it (“Rebuilding an economy that works for all of us.”) But would raising the minimum wage really help the working poor?

Economist David R. Henderson says no, it won’t. In a piece for the National Center for Policy Analysis, Henderson says there are two myths here. (more…)

Whether a problem is a matter of “public policy” or “private-policy” often depends on how we think about property rights, says economist David R. Henderson. Take, for example, the debate about whether evolution or Intelligent Design theory should be taught in schools:
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Blog author: sgregg
posted by on Tuesday, October 13, 2009

My response to the awarding of the Nobel Prize in Economics to Elinor Ostrom and Oliver Williamson was published on National Review Online:

Unlike a certain other Nobel Prize, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel actually requires evidence of substantial achievement. Mere aspirations and lofty rhetoric count for nothing. This year’s Nobel Prize in Economics has been given to two economists, Elinor Ostrom and Oliver Williamson, who have deepened our understanding of economic governance. More specifically, Ostrom and Williamson have shown how it is possible for firms and other communities to facilitate economic efficiency from “within.” In this sense, they follow in the footsteps of another Nobel laureate, Ronald Coase, whose groundbreaking 1937 article, “The Nature of the Firm,” did so much to establish the idea that businesses reduce transaction costs.

We live in an age when many are (rightly) questioning the obsession of mainstream economics with mathematics and econometrics, and also blaming mainstream economists for aspects of the 2008 meltdown. The Nobel committee awarded two scholars whose research doesn’t fit entirely within that mainstream mold — two scholars whose focus has been on the development of rules within groups and communities (including large corporations) that allow for conflict resolution and efficiency gains in ways that are often far more sophisticated than externally imposed state regulation.

Also see David R. Henderson’s fine “A Nobel for Practical Economics” in today’s Wall Street Journal.

Based on her work, Ms. Ostrom proposed several rules for managing common-pool resources, which the Nobel committee highlights. Among them are that rules should clearly define who gets what, good conflict resolution methods should be in place, people’s duty to maintain the resource should be proportional to their benefits, monitoring and punishing is done by the users or someone accountable to the users, and users are allowed to participate in setting and modifying the rules. Notice the absence of top-down government solutions. In her work on development economics, Ms. Ostrom concludes that top-down solutions don’t help poor countries. Are you listening, World Bank?

Finally, here’s a lecture hall video of Ostrom on sustainable development and the tragedy of the commons: