Nobel Committee and Institutional Economics

With the recent awarding of the Nobel Prize in Economics to Oliver Williamson and Elinor Ostrom for work in Institutional Economics, I wonder if the Nobel committee is awarding a prize to the researchers it considers to have done the best research or attempting to affect the incentives and direction of future economic research.  I can’t help but notice that the Nobel committee has a strong affinity for institutional economics (this all popped into my head partly because the awarding of the prize to institutional economics researchers reminded of Douglass North, who taught a class I took as an undergrad at WashU).  Admittedly, I’m early in my time as a PhD student, but the Nobel committee’s admiration for the work of institutional economics seems out of step with that of the field in general (I can’t remember it being mentioned once in any of my grad classes- and Steven Levitt supports my hunch in his blog).

Not that institutional economics doesn’t have something important to add (or that Ostrom’s political science research isn’t as important as the top research in economics), it just seems interesting that the Nobel committee has selected a few winners in a branch of economics that goes essentially ignored by the profession at large – I don’t know if that’s a reflection of how cloistered academic economics is or how cloistered the Nobel committee is – it’s just interesting that one group views this area with such high regard while the other virtually ignores it.