It is not often that one may relate economic policy to banal aspects of our daily lives. In this article, Ewa Puzniak has done so applying Ostrom’s economic analyses to the TV series ‘Game of Thrones.’ Beware: This article is full of spoilers! Read at your own risk.
The Game of Thrones craze has indeed swept the world. The show is perceived as great entertainment but we can still learn about public and social policy from the Emmy winning series. Game of Thrones has introduced us to a world that is heavily based on analogies rooted in the War of Roses, Hobbes and Machiavelli. This article seeks to relate the policy-heavy works of Elinor Ostrom to a dilemma that the protagonists face in the seventh series, with the wider aim of proving that policy is not simply a dry field restricted to academics and bureaucrats alone. Rather, I seek to demonstrate intrinsically linked to issues that we deal with on a daily basis. In fact, as this article shall establish, the approach of solving collective challenges presented in Ostrom’s works may be applied to climate change, financial crises, every day scenarios and even Game of Thrones!
During the first six seasons of the show, the scramble for the legendary Iron Throne has left the continent of Westeros divided and weak amidst the harsh bleak winter. Three characters play a significant role in series 7: Cersei Lannister currently in possession of the Westerosi crown; Jon Snow – The King in The North; and Daenerys Targaryen, the descendent of the former ruling dynasty now coming back to Westeros to claim the throne. Only at first the intrigues and the bloody battles are the major themes of the show. A deadly threat is coming from the North and every inhabitant of Westeros is now in danger. The enormous army of Whitewalkers, zombies created and led by the Night King is about to pass the mythical Wall and invade the continent.
The three protagonists are faced with an extremely difficult situation that might be described by economists as a “collective action problem”. Jon Snow, as he is in direct danger and he will not be able to defeat Whitewalkers alone, seeks help from the South. He manages to form an alliance with Daenerys. However, their forces may still not suffice to overcome the threat. The support of Cersei would definitely give them the edge and it would assure Daenerys that Westeros will not be conquered by Cersei in the meanwhile.
We can use basic Game Theory to analyse this scenario. Cersei and Daenerys have different pay-offs resulting from their different characters. Daenerys as an agent willing to contribute proves that she definitely is a “conditional cooperator” . She stands in contrast to Cersei, who displays the signs of rational agent pursuing self-interest and willing to “free-ride”, in order take advantage of the public good; which is in this case the defence of the continent. Moreover, the utilities of both players are contrasting. Cersei definitely prefers to die rather than to see Daenerys on the Iron Throne. As a rational agent, Cersei’s best response is betrayal. She considers two situations. First, if Daenerys and Jon defeat the Whitewalkers, their army will be weakened and thus, easy to beat. Second, if Daenerys and Jon lose, the Whitewalker army will be depleted and in consequence, easier to defeat. This is a variant of the classic game of Prisoners’ Dilemma where the best personal outcome is always to defect.
A way out of this impasse is to transform the Prisoners’ Dilemma into the Stag Hunt. This action involves increasing the benefits so as to create an additional equilibrium where both actors cooperate. This way the players do not have an incentive to defect anymore. They both know that by not working together they will not achieve higher pay-offs. Thus, in the Stag Hunt scenario players will cooperate as long as they trust each other. In order to overcome the Collective Action Problem and create a “collaborative equilibrium”, Cersei’s incentive must be altered. Jon and Daenerys need to increase Cersei’s benefits. Yet, to achieve that, Daenerys would have to abstain from her life mission to retake the Iron Throne. Even though she is a conditional cooperator, she would not abandon her principal purpose. Therefore, the Nash equilibrium and Prisoners’ Dilemma will prevail.
The question stands though; if both sides cannot come to the all-encompassing agreement does it mean that Westeros is destined for total annihilation? Not necessarily. We can observe many economists and political scientists trying to understand the collective action problems in real life. The example might be environmental protection. Going even further, we could compare the Whitewalkers to climate change  since both could be seen as collective action problems. Many addressed this issue but I will focus mainly on Elinor Ostrom who adopted a different approach to the role of institutions in policy making. She stresses the priority of acting locally instead of waiting for an agreement on the global scale. Ostrom also argues against a single solution policy to overcome such a complex problem. Hence, she and Vincent Ostrom advocate for the polycentric way of providing services that involve polycentric governance that rely on decision-making at a local level. Namely, if lower tiers of governance seek to collaborate together they can scale up on an ad-hoc contractual basis in order to address the issue that requires higher resources and a higher scale of production in order to endogenously match the scale of the problem. An example of the combination of global and polycentric approaches might be a policy involving pricing the externality.
A prime example of this is the approach towards Carbon Tax. Carbon Tax introduced and set on a certain level by international organisations is a global action. However, the detailed strategy for reducing the emission is developed on a state and sub-state level. The weak point of the aforementioned policy is path dependency. We need to consider a position when the global agreement places us on a wrong path. Here, it imposes the tax on the wrong level. If the tax is not suitable, the cost of Carbon might surpass the cost of climate change and thus, this tax defeats its purpose. In this situation, local efforts will not be able to reduce the cost of climate change.
Furthermore, the danger of the Whitewalkers resembles financial shocks. During the 2008 financial crisis, banks experienced liquidity shortage. This had a dramatic impact on the global economy, especially because banks did not react and coordinate monetary policy with adequate speed. Since polycentric governing is characterised by its better responsiveness due to contextual knowledge and faster feedback, this strategy could have been viable in the crisis circumstances. Instead of waiting for the state to intervene, banks could arrange themselves privately in so-called ‘clubs’. Thanks to this decentralised system, clubs could have quickly and efficiently foreseen and recognised where the financial imbalances would occurred and provide the liquidity.
Another complementary aspect of the solution for climate change recommended by Ostrom is public entrepreneurship. This approach consists of “creating focal points for coordination”. Public entrepreneurs convince communities to come together to tackle a problem. For instance, after Hurricane Katrina hit the US, many people abandoned their home without the intention of returning as long as their neighbourhoods’ remained empty. It created a situation whereby nobody was prepared to return first. This collective action problem was solved by churches who acted as social entrepreneurs by convincing people to come back.
Henceforth, both polycentric governance and public entrepreneurship offer a real answer to the collective action problems such as climate change and financial shocks. Nonetheless, the question emerges as to whether these approaches work even within the Game of Thrones scenario.
We already established that bargaining cost of Daenerys, Jon and Cersei reaching a cooperative consensus that is far too high. Instead of waiting for the global agreement, Jon and Daenerys should have decided to pursue local steps and act as public entrepreneurs by establishing focal points for coordination.
In the last episode of series 7, Jon and Daenerys present a previously caught Whitewalker to Cersei in order to prove the dire nature of their present situation (and to convince her to join forces). What they should have done instead, was to show the creature to Cersei’s bannermen (vassals that supply Cersei with their armies) and convince them to fight the threat together. Assuming that some of them are “conditional cooperators” they would want to join the side of Daenerys and Jon despite Cersei’s wrath. The forthcoming Whitewalkers pose a much more pressing risk to local folk than the inner-rivalry of Westrosi Houses. Therefore, Jon and Daenerys would have been able to provide the public service of defence on a massive scale. Arriving to the Pareto efficient outcome due to scaling up the resources and production of the service would have been possible thanks to Ostromian multi-party agreements on an an ad-hoc basis (as well as Coasian bargaining). At the same time, Cersei would be helpless and too weak to conquer Westeros.
Similarly, not every lord under Cersei’s rule needs to provide military service to Daenerys and Jon. Ostrom  stresses the importance of diverse local institutions addressing the issue in diverse ways using their comparative advantage. Certainly, further down South, the less Westerosi sense the threat coming and their incentive to actively fight is weaker. Hence, they might contribute in a different way. After all, war requires different resources such as military force, strategic thinking, weapons, ammunition, logistics, finances, food and supplies, as well as means of transport. For instance, the Reach, famous for its fertile lands may grant its crops and feed the soldiers on ad-hoc con contracts, creating Coasian bargains with the rest of Westeros. This polycentric approach will definitely provide a potential alternative and an emergency solution in a faster and more effective way by involving the local actors and thus, avoiding the “Tragedy of the Commons”.
In conclusion, the Prisoners’ Dilemma which appears in Game of Thrones as well as in real life (when dealing with climate change or financial shocks) is an issue that is undoubtedly extremely difficult to solve. The purpose of this article is to draw attention to Ostromian alternatives to solve these real social dilemmas in a manner that is radically different to the narrow-minded single global policy solutions. This article has also sought to prove that polycentric systems of governing have huge potential not only to replace the existing systems; but rather to compliment them as well (such as with Carbon tax). Furthermore, a polycentric policy approach allows us to act immediately instead of waiting helplessly for an international agreement, much bureaucracy and state-scale procrastination.
This article has been written by Ewa Puzniak, editor at the Business & Economic policy-centre of King’s Think Tank. She would also like to thank Professor Mark Pennington a great deal for his support & feedback (Department of Political Economy, KCL) as well as Pablo Paniagua Prieto.
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