Why do Shared Societies make economic sense? Three theoretical approximations

The concept of Shared Societies may be seen as a moral prescription to offer grounds and guidance to economic policy-making. The task given to the Working Group on the Economic Rationale of Shared Societies to look into “the types of economic policies which stimulate and encourage a shared society and those policies which have a negative impact on the achievement of shared societies” implies such an approach. Such a way to consider the link between Shared Societies and economics might not be consistent with what has come to be the most widespread approach to economics science. But its merits should not be underestimated. The relatively recent past of economics can often makes us forget that economics and ethics were not always the separate fields that they are today. As economic historian Alessandro Roncaglia reminds us, “philosophers… of the Middle Ages considered it their task not so much to describe and interpret the way the economy works, but rather to provide advice on morally acceptable behaviour in the field of economic relations.”1 In fact, the emergence of economics as an autonomous science is a relatively recent phenomenon.2 The exploration of what a normative concept of Shared Societies could suggest in terms of economic policy prescriptions is, therefore, a promising line of thinking. In that link between Shared Societies and economics, however, this paper chooses to explore the other direction. Hence, it posits that Shared Societies make economic sense, that is, the implementation of the principles of Shared Societies can lead to improvements in economic performance. The paper will do so by resorting to at least three theoretical economic frameworks whose intuitions Shared Societies actually rescue and put in practice. First, Nurkse’s contribution to development economics, with its intuition of the importance of mobilizing all labor resources in countries as a way to increase capital formation while suppressing apparent consumption/ investment trade –offs. Second, institutional economics, and its intuition of the role that “institutional technologies” play in economic performance or, as others put it, politics’ impact in influencing the incentives of economic agents to develop new ideas. Finally, structuralist frameworks, and the relevance they attach to the role of heterogeneity in societies as a key factor modeling development outcomes. For each of these frameworks, the paper will develop relevant insights provided by them, how they applicable to Shared Societies and pertinent to the analysis of Shared Societies’ impacts on economic performance.