Polycentric Organisations

I served as non-executive director of a large NHS hospital until a few months ago. The interests of the hospital, community medical provision and social services did not seem particularly well aligned. This made me think that a new legal entity embracing all three constituencies (a ‘vertical care organisation’) might be more effective overall. A paper I read recently by Elinor Ostrom [1] – the only woman Economics Nobel laureate – gave me cause for pause. Her work shows that ‘polycentric’ organisations can collaborate very effectively and in ways that are not consistent with game theory, i.e. actors can put personal interests side when the circumstances are right. She emphasises the central role of trust in eliciting reciprocal behaviours. Other factors that enhance collaboration and reciprocal behaviour include providing plenty of opportunities for human interaction (‘cheap talk’), longer time horizons, the possibility of sanctioning selfish behaviour and high stake activities. The last finding gives some support to the old joke that “academic conflict is intense because the stakes are so low”.

— Richard Lilford, CLAHRC WM Director

Reference

  1. Ostrom E. Beyond Markets and States: Polycentric Governance of Complex Economic Systems. Am Econ Rev. 2010; 100(3): 641-72.
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