Institutional change for creating capacity and capability for sustainable development: A club good perspective
AbstractAlthough the socio-economic development of many nations during the last two centuries has been very impressive, there are many issues questioning the sustainability of this development. Questions have been raised whether increased consumption will lead to increased happiness, or whether people will become more dependent on growth (Galbraith, 1958). While the so-called consumption society may lead to questionable results for social welfare, the increased use of natural resource and problems of waste, pollution, lack of regeneration of renewable resources and too slow progress in finding substitutes for non-renewable resources pose increasing threats for environmental sustainability (Boulding, 1966; Rao, 2000). These issues are slowly being recognized. The focus in this article is on the need for institutional change for entering a path of more sustainable (or, less unsustainable) development in the context of the seemingly infinite need for increased production and welfare. Arguments will be provided that the New Institutional Economics (NIE) may be useful in creating a theory of institutional change, strengthening society's capacity and capability for sustainable development (SD). However, without changing paradigms (worldviews) that growth is necessary and, in combination with technological advance, a mean to solve social and environmental problems, there are incredible challenges in entering a path of SD. First, some conditions for NIE to become a theory on society's capacity and capability for SD will be discussed in the context of its current focus on economic and environmental issues. Then, the notion of institutional capital will be developed and some of its determinant presented (value in the public domain, institutional strength, good governance, an institutional equilibrium). The level of transaction costs and assignment of property rights seem to be crucial for the process of institutional change. Finally, it will be argued that with the current techno-centric paradigm, when technological advance is too slow, there exists a danger that SD will become, at most, a kind of club good. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by OrdnungsPolitisches Portal (OPO) in its series Discourses in Social Market Economy with number 2011-06.
Date of creation: 2011
Date of revision:
Contact details of provider:
Web page: http://ordnungspolitisches-portal.de/
institutional change; institutional capital; institutional economics; sustainable development; club good;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-17 (All new papers)
- NEP-ENV-2012-04-17 (Environmental Economics)
- NEP-HME-2012-04-17 (Heterodox Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kolev, Stefan, 2010. "Der bulgarische Weg seit 1989: Wachstum ohne Ordnung?," Discourses in Social Market Economy 2010-12, OrdnungsPolitisches Portal (OPO).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.