Conservative critics who disparaged the Nobel Prizes following the awarding of the Peace Prize to President Obama should think again. On November 12, the Royal Swedish Academy of Sciences awarded the economics Nobel jointly to Elinor Ostrom and Oliver Williamson for their advancement of the field of “economic governance.” The governance they analyze is actually governance without government, which could also be described as “voluntary self-regulation”—something American conservatives should celebrate.

Here’s why.  In traditional economic theory, the market allows resources to be allocated optimally by coordinating the actions of self-interested individuals through the power of price signals.  However, there are circumstances in which some other mechanism or institution is needed, either because the transaction costs of determining a price are too high, or because the good in question is freely available—insofar as it is not owned by anyone—but nevertheless finite—as in, for example, fishing stocks.  For many politicians, especially left-leaning ones, the solution is government regulation or ownership.  Ostrom and Williamson, however, have explained how other forms of non-market governance have worked so well for centuries.