From market failure paradigm to an institutional theory of environmental governance

2009 ◽  
pp. 87-101
Author(s):  
Jouni Paavola
Keyword(s):  
Public Goods ◽  
Institutional Theory ◽  
Environmental Governance ◽  
Market Failure ◽  
Institutional Economics ◽  
Welfare Economics ◽  
Environmental Conflicts ◽  
Physical Setting ◽  
Jel Classifications

- This manuscript examines how an institutional theory of environmental governance might be based on a re-interpretation and re-working of the arguments of the market failure paradigm and its main criticisms. The manuscript first examines in detail the arguments of the market failure paradigm regarding externalities and public goods, as well as their criticisms. The paper then suggests an institutional re-interpretation and revision of the key arguments of the market failure paradigm. The institutional theory of environmental governance acknowledges the interdependence of economic actors and the resulting fundamental role of conflicts as the rationale for environmental governance and its institutions. As environmental conflicts are primarily a matter of distribution rather than of efficiency, it becomes important to understand the likely consequences of institutional alternatives in the specific socio-economic and physical setting of the environmental conflicts, and the degree to which these consequences match with the pertinent social or economic goals.Keywords: environmental governance, market failure, externalities, public goods, welfare economics, institutional economicsJEL classifications: Q50; H41; D62; B52

Governing the Environment: the Intitutional Economics Approach

2009 ◽  
pp. 61-86
Author(s):  
Arild Vatn
Keyword(s):  
Transaction Costs ◽  
Environmental Governance ◽  
Institutional Economics ◽  
Specific Area ◽  
New Institutional Economics ◽  
Neoclassical Economics ◽  
Institutional Perspective ◽  
Institutional Structures ◽  
Plural Rationalities ◽  
Jel Classifications

- Analyzing environmental governance implies foremost to analyze institutional structures and their implications. In doing so, the present paper utilizes insights primarily from the tradition of classical institutional economics. The paper is divided in three. In the first part I describe the main features of the classical position and compare it briefly with that of neoclassical economics and the tradition of new institutional economics. In the second part I clarify what is considered the main aspects of governance as seen from an institutional perspective. In part three I move to the more specific area of environmental governance. The concept of resource regimes is defined. Moreover I analyze how different regimes influence which environmental problems appear and how they can be treated. I discuss how institutions influence the formation and articulation of knowledge and values, how they form and protect interests, how they influence the level of transaction costs and hence the possibilities for coordination, and finally how they form the motivations underlying human choices in concrete contexts. Given that all these variables are shown to be endogenous to the institutional system, the use of comparative analysis in the assessment of various governance options is emphasized.Keywords: classical institutional economics, interdependence, resource regimes, value articulation, interest protection, transaction costs, plural rationalities.JEL classifications: B52; Q50; D02; D70.

scholarly journals Una crítica a la teoría de los fallos del mercado desde la perspectiva de la Escuela Austriaca

2021 ◽  
pp. 133-159
Author(s):  
Ángel Martín Oro
Keyword(s):  
Public Goods ◽  
Imperfect Competition ◽  
Market Failure ◽  
Welfare Economics ◽  
Perfect Competition ◽  
Market Failures ◽  
Failure Theory ◽  
Palabras Clave ◽  
Competitive Model ◽  
Main Criticism

In this paper, we present a critical analysis of the standard market failure theory, one of the most important pillars of economic interventionism. This theory justifies state interference when markets do not produce so-called optimal outcomes; being based on two fundamental concepts of neoclassical welfare economics, namely, Pareto efficiency and perfect competition. The main criticism is directed at the theoretical framework in which is based on, through the contributions of the Austrian School of Economics. To accomplish that, after revising the basics of the market failure theory, we will put forward an alternative concept of efficiency, as well as questioning the suitability of the perfect competitive model. Next, we will reconsider theoretically the traditional market failures, that is, monopolies, public goods and externalities’ problems. This analysis is accompanied by historical cases that illustrate our criticism. Key words: Market failure, welfare economics, efficiency, imperfect competition, public goods, externalities. JEL codes: B53, D60, H00. Resumen: En este trabajo se realiza un análisis crítico de la teoría tradicional de los fallos del mercado, uno de los pilares más importantes del intervencionismo económico. Esta teoría vendría a justificar la interferencia estatal en los casos en que el mercado no produce resultados óptimos; estando apoyada en dos conceptos fundamentales en la economía del bienestar neoclásica: la eficiencia paretiana y el modelo de competencia perfecta. La principal crítica se realizará al marco teórico en el que se inserta, a partir de las aportaciones de la Escuela Austriaca de Economía. Para ello, tras describir a grandes rasgos la teoría de los fallos del mercado, expondremos un concepto alternativo de eficiencia, y nos cuestionaremos la validez teórica del modelo perfectamente competitivo. A continuación, reconsideraremos desde un punto de vista teórico los fallos del mercado tradicionales, esto es: monopolios, bienes públicos y externalidades. Este análisis se acompañará de casos históricos que ilustren y apoyen nuestra crítica. Palabras clave: Fallos del mercado, economía del bienestar, eficiencia, competencia imperfecta, bienes públicos, externalidades. Códigos JEL: B53, D60, H00.

scholarly journals Selfish or selfless? The role of empathy in economics

2010 ◽  
Vol 365 (1538) ◽  
pp. 303-317 ◽  
Author(s):  
Alan Kirman ◽  
Miriam Teschl
Keyword(s):  
Social Interaction ◽  
Public Goods ◽  
Welfare Economics ◽  
Prosocial Behaviour ◽  
Public Goods Game ◽  
Usual Assumption

Empathy is a longstanding issue in economics, especially for welfare economics, but one which has faded from the scene in recent years. However, with the rise of neuroeconomics, there is now a renewed interest in this subject. Some economists have even gone so far as to suggest that neuroscientific experiments reveal heterogeneous empathy levels across individuals. If this were the case, this would be in line with economists' usual assumption of stable and given preferences and would greatly facilitate the study of prosocial behaviour with which empathy is often associated. After reviewing some neuroscientific psychological and neuroeconomic evidence on empathy, we will, however, criticize the notion of a given empathy distribution in the population by referring to recent experiments on a public goods game that suggest that, on the contrary, the degree of empathy that individuals exhibit is very much dependent on context and social interaction.

“Public Health, Public Goods, and Market Failure”

2019 ◽  
Vol 12 (3) ◽  
pp. 287-292 ◽  
Author(s):  
L Chad Horne
Keyword(s):  
Public Health ◽  
Public Goods ◽  
Market Failure ◽  
Public Health Ethics ◽  
Recent Criticism ◽  
Market Failures ◽  
The Public ◽  
Health Ethics ◽  
Health Related

Abstract This discussion revises and extends Jonny Anomaly's ‘public goods’ account of public health ethics in light of recent criticism from Richard Dees. Public goods are goods that are both non-rival and non-excludable. What is significant about such goods is that they are not always provided efficiently by the market. Indeed, the state can sometimes realize efficiency gains either by supplying such goods directly or by compelling private purchase. But public goods are not the only goods that the market may fail to provide efficiently. This point to a way of broadening the public goods account of public health to accommodate Dees' counterexamples, without abandoning its distinctive appeal. On the market failures approach to public health ethics, the role of public health is to correct public health-related market failures of all kinds, so far as possible. The underlying moral commitment is to economic efficiency in the sense of Pareto: if we can re-allocate resources in the economy so as to raise the welfare of some without lowering the welfare of any other, we ought to do so.

scholarly journals Development and environmental conflicts in Brazil: challenges for anthropology and anthropologists

2012 ◽  
Vol 9 (1) ◽  
pp. 181-208 ◽  
Author(s):  
Andréa Zhouri ◽  
Raquel Oliveira
Keyword(s):  
Environmental Governance ◽  
Environmental Conflicts ◽  
Private Companies ◽  
Conflict Zones ◽  
State Institutions ◽  
Political Processes ◽  
Intensive Exploitation ◽  
Environmental Licensing ◽  
Developmental Policies

In the last three decades, since the democratization of the country and the rise of environmental concerns, Brazil has created a regulatory framework capable of dealing with the environmental impact of its core developmental policies. An environmental governance package has been constructed, with the environmental licensing process as its major instrument. However, this process is based on an urban planning perspective with little assessment of specific local ecological conditions and social organizations. Indeed, the process of globalization has resulted in an intensive exploitation of natural resources, which increases the use of marginal economic areas and the expansion of the economic frontiers into territories occupied by family agriculture, traditional peoples and ethnic minorities. Hence, we see the creation of conflict zones involving locals, state sectors and entrepreneurial groups. Increasingly, within this context, anthropologists have been required to act as experts and mediators by different groups, including state institutions, private companies, and social movements. Based on ethnographic research about the environmental licensing processes of hydroelectric dams in Brazil, this paper focuses on the limits of anthropological knowledge, the contexts of its production and the role of anthropologists in political processes involving unequal networks of power.

Business-groups in Russian industries

2004 ◽  
pp. 121-134 ◽  
Author(s):  
S. Avdasheva
Keyword(s):  
Industrial Organization ◽  
Economic System ◽  
Institutional Economics ◽  
Business Groups ◽  
Control Rights ◽  
Organization And Management ◽  
Russian Economy ◽  
Main Determinants ◽  
Soviet Economic System

The chapter of “Institutional Economics” textbook is devoted to the development of business-groups as a specific feature of industrial organization in the Russian economy. The main determinants of forming and functioning of business-groups such as allocation of property rights in Soviet enterprises, networks of directors and executive authorities in the Soviet economic system as well as import of new institutes and inefficient state enforcement are in the center of analysis. Origins, structure, organization and management within the groups and the role of shareholding and informal control rights are considered.

Vertical Restrictions: Development of Theory, Antitrust Legislation and Enforcement

2010 ◽  
pp. 110-122 ◽  
Author(s):  
S. Avdasheva ◽  
N. Dzagurova
Keyword(s):  
Institutional Theory ◽  
Institutional Economics ◽  
Theory Of The Firm ◽  
New Institutional Economics ◽  
Hierarchical Organization ◽  
Vertical Restraints ◽  
New Institutional Theory ◽  
Antitrust Laws ◽  
Antitrust Legislation ◽  
Market Organization

The article examines the interpretation of vertical restraints in Chicago, post-Chicago and New Institutional Economics approaches, as well as the reflection of these approaches in the application of antitrust laws. The main difference between neoclassical and new institutional analysis of vertical restraints is that the former compares the results of their use with market organization outcomes, and assesses mainly horizontal effects, while the latter focuses on the analysis of vertical effects, comparing the results of vertical restraints application with hierarchical organization. Accordingly, the evaluation of vertical restraints impact on competition differs radically. The approach of the New Institutional Theory of the firm seems fruitful for Russian markets.

No margin, no mission? Evaluating the role of incentives in the distribution of public goods in Zambia

2014 ◽  
Author(s):  
Nava Ashraf ◽  
◽  
Oriana Bandiera ◽  
Kelsey Jack ◽  
◽  
...  
Keyword(s):  
Public Goods
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