Well Put My Friend

From page 435 of Elinor Ostrom's Nobel lecture-

The most important lesson for public policy analysis derived from the intellectual journey I have outlined here is that humans have a more complex motivational structure and more capability to solve social dilemmas than posited in earlier rational-choice theory. 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. We need to ask how diverse polycentric institutions help or hinder the innovativeness, learning, adapting, trustworthiness, levels of cooperation of participants, and the achievement of more effective, equitable, and sustainable outcomes at multiple scales.

As I said in yesterday's post on materialism, people have diverse interests. They also have creative solutions to solving problems that economists think are impossible, i.e. Prisoner's Dilemna. The entrepreneur in people is a powerful force, but the only for good under proper institutions. This is the economic question of today.

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