Elinor Ostrom at her 2009 Nobel lecture said:
“Designing institutions to force (or nudge) entirely self-interested individuals to achieve better outcomes has been the major goal posited by policy analysts for governments to accomplish for much of the past half century. Extensive empirical research leads me to argue that instead, a core goal of public policy should be to facilitate the development of institutions that bring out the best in humans.”
As neo-liberalism dies, the one common denominator of emerging economic thinking is that Governments should be more activist. Governments are called on to be ‘entrepreneurial’ and ‘shape markets’ by Mariana Mazzucato, to deliver Green New Deals by the environmental movement, build more social housing etc etc. And now we have a self-described ‘Brexity Hezza’ as both PM and effectively Chancellor it would seem – ‘Hezza’ being Michael Heseltine’s nickname, who was famous back in the day for policy activism in Thatcher’s government.
So how should Governments act if they took Ostrom’s finding seriously? What is the problem with ‘nudging’, forcing or even incentivising anyway? What would institutions look like that ‘bring out the best in humans’? And what, or rather who might be catalysts and what could they have to do with governments?
In this webinar, Henry Leveson-Gower seeks to answer these questions and propose a new ‘catalytic’ approach to Government action which he believes has the potential to facilitate the type of system changes we so urgently need in this decade and beyond. This approach draws on institutional economics, practical innovations in cooperative design and his experience as a policy maker.
Orit Gal, a complexity economist interested in decision making in complex systems, discusses the issues with wider contributions from participants.