Transitional Forces in a Resource Based Economy: Phases of Economic and Institutional Development in Hawaii

We illuminate several important aspects of the nature and causes of growth and institutional change. To do this, we focus on the role resource pressures have played in the historic development of Hawaii’s institutions. We discuss the Hawaiian story in the context of the natural co-evolution of production systems, organizational forms and authority structures in a resource dependent economy. We model the resource dependency as a multi-trophic ecologically based system. Productivity is a dynamic function of the available resource, human populations of laborers and wealth (capital) accumulation that funds management and governance through a non-productive elite class. We use both archeological and historical evidence from natural resource use during the settlement and modernization of the Hawaiian economy. Hawaii’s resources are first controlled by hierarchy, which intensifies over time. Decentralization occurs after Western contact (1778), though not immediately. Unlike many existing analyses of primitive economic development, there does not exist a monotonic relationship between population and resource pressure. In a model of second-best resource management, optimal governance changes as the balance between sustenance and other resource uses shifts.