The Political Economy of Sustainable Development DOI: 10.1057/9781137552754.0001 Other Palgrave Pivot titles Twyla J Hill: Family Caregiving in Aging Populations Alexander M Stoner and Andony Melathopoulos: Freedom in the Anthropocene: Twentieth Century Helplessness in the Face of Climate Change Christine J Hong: Identity, Youth, and Gender in the Korean American Christian Church Cenap Çakmak and Murat Ustaoğlu: Post-Conflict Syrian State and Nation Building: Economic and Political Development Richard J Arend: Wicked Entrepreneurship: Defining the Basics of Entreponerology Rubén Arcos and Randolph H Pherson (editors): Intelligence Communication in the Digital Era: Transforming Security, Defence and Business Jane Chapman, Dan Ellin and Adam Sherif: Comics, the Holocaust and Hiroshima AKM Ahsan Ullah, Mallik Akram Hossain and Kazi Maruful Islam: Migration and Worker Fatalities Abroad Debra Reddin van Tuyll, Nancy McKenzie Dupont and Joseph R Hayden: Journalism in the Fallen Confederacy Michael Gardiner: Time, Action and the Scottish Independence Referendum Tom Bristow: The Anthropocene Lyric: An Affective Geography of Poetry, Person, Place Shepard Masocha: Asylum Seekers, Social Work and Racism Michael Huxley: The Dancer’s World, 1920–1945: Modern Dancers and Their Practices Reconsidered Michael Longo and Philomena Murray: Europe’s Legitimacy Crisis: From Causes to Solutions Mark Lauchs, Andy Bain and Peter Bell: Outlaw Motorcycle Gangs: A Theoretical Perspective Majid Yar: Crime and the Imaginary of Disaster: Post-Apocalyptic Fictions and the Crisis of Social Order Sharon Hayes and Samantha Jeffries: Romantic Terrorism: An Auto-Ethnography of Domestic Violence, Victimization and Survival Gideon Maas and Paul Jones: Systemic Entrepreneurship: Contemporary Issues and Case Studies Surja Datta and Neil Oschlag-Michael: Understanding and Managing IT Outsourcing: A Partnership Approach Keiichi Kubota and Hitoshi Takehara: Reform and Price Discovery at the Tokyo Stock Exchange: From 1990 to 2012 DOI: 10.1057/9781137552754.0001 The Political Economy of Sustainable Development: Valuation, Distribution, Governance Dirk Jacob Wolfson Emeritus Professor of Economics, Erasmus University Rotterdam, The Netherlands DOI: 10.1057/9781137552754.0001 © Dirk Wolfson 2015 Softcover reprint of the hardcover 1st edition 2015 978-1-137-55274-7 All rights reserved No reproduction, copy or transmission of this publication may be made without written permission No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988 First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010 Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN:978-1-137-55275-4 PDF ISBN:978-1-349-57742-2 A catalogue record for this book is available from the British Library A catalog record for this book is available from the Library of Congress www.palgrave.com/pivot DOI: 10.1057/9781137552754 Contents Preface vii Acknowledgements viii List of Abbreviations ix Introduction 1.1 About this book 1.2 Economic analysis and environmental policy: scope and limits 1.3 Cost-benefit analysis: a preview 1.4 Valuation, distribution and legitimacy 1.5 Short cuts: cost-effectiveness, standards, multi-criteria and workable competition 1.6 Global economic development and ecological constraints Valuation 2.1 The ‘Coase-solution’ and emissions trading 2.2 Hedonic pricing, travel cost method and averting behaviour 2.3 Stated preferences: contingent valuation and choice experiments 2.4 Co-valuation and externalities in production functions 2.5 Persuasion (management by speech) and voluntary cooperation 2.6 Fiscal instruments for managing preference DOI: 10.1057/9781137552754.0001 14 19 20 22 24 25 26 27 29 31 31 v vi Contents 2.7 2.8 2.9 Innovation as externality on the supply side Shadow prices, information or regulation? Combining hard and soft information and sensitivity analysis 34 35 35 Distribution 3.1 Optimal allocation and fairness in distribution 3.2 Fiscal solutions 3.3 Distributional weights 3.4 Visions of justice 37 38 39 39 40 Governance 4.1 Cost-benefit analysis revisited 4.2 Interactive governance and information management 4.3 Situational contracting: implementation and empirical evidence 4.4 Situational solutions in the valuation and distribution of environmental policy 4.5 Summary and conclusions 47 49 51 54 65 69 Bibliography 72 Index 81 DOI: 10.1057/9781137552754.0001 Preface Environmental policy design provides a fascinating meeting point between the natural and the social sciences, but the meeting of minds gets sometimes lost in translation This brief and interdisciplinary introduction combines theory and practice with a dual purpose: to make professional practitioners aware of the way in which the traditional theory of economic policy is increasingly enriched by insights from behavioural economics, theories of justice and innovations in public administration, and to provide supplemental reading for students in a wide range of disciplines on what ecological economics and environmental policy are about Its original contribution is that it develops a mechanism design for implementing Amartya Sen’s result-oriented capability theory of justice, and is grounded on the belief that legitimacy in policymaking requires an institutionalized acceptability of public interventions in explicit trade-offs between rivalling criteria of good governance that balance the protection of human dignity and the rule of law with social efficiency, effectiveness, sustainability and fairness DOI: 10.1057/9781137552754.0002 vii Acknowledgements Peter Cornelisse critically read earlier drafts and gave me the benefit of his scholarship Peter Hupe, Carl Koopmans and Hans Opschoor helped out by sharing their expertise in public administration, cost-benefit analysis and ecological economics, respectively Gratefully acknowledged, moreover, are comments from unknown referees and lessons learnt from sparring with students and counterparts in consulting who warmed me up on the subject viii DOI: 10.1057/9781137552754.0003 List of Abbreviations BRICS Brazil, Russia, India, China and South Africa CFCs chlorofluorocarbons CH4 methane CO2 carbon dioxide EU European Union GCEC Global Commission on the Economy and Climate Change IMF International Monetary Fund IPCC International Panel of Climate Change NGO’s non-governmental organizations NPM new public management OECD Organization for Economic Cooperation and Development WECD World Commission on Environment and Development WTA willingness to accept WTP willingness to pay DOI: 10.1057/9781137552754.0004 ix The Political Economy of Sustainable Development Change Conference scheduled for December 2015, China and the US announced first bids whereby China promises to ‘peak’ around 2030 and the US, which already peaked in 2005, aims at a further reduction of 26–28 per cent by 2025 The EU, which now represents 10 per cent of total global emissions, intends a further reduction of 40 per cent of that share, compared to its peak in 1990 Whether these intentions would indeed materialize is, of course, another matter In terms of cost-benefit analysis, however, it is telling that Stern et al (2006) calculate that the cost of not dealing with what Stern himself called ‘the greatest market failure the world has seen’ are a multiple of the cost of curbing global warming below a cap of degrees Celsius more Internationally as well, the essence of a trade is that parties give something they can or can spare to get something else that they want In other words, there is overwhelming evidence that, if we pulled off a coup of averting behaviour (Section 2.2) in climate change, we could make everyone be made better off by putting our minds and our money on achieving global sustainable development between now and, say, the year 2100 That would yield the biggest Pareto-improvement in history without having to leave anyone worse off (Section 1.2) Looking at it this way, the real issue seems to be one of distribution again, the problem of how to share the cost of achieving sustainable development by fairly distributing responsibilities, resources and capabilities between the rich and the poor (Opschoor 2010) Then why does that take so long, if even the rich can be made better off? The answer, of course, is that sustainability has no borders, and that man are trapped in political jurisdictions, distrust in international relations and uncooperative games – handicaps that the situational contract, as a useful model for international bargaining, might be able to overcome by creating strategic alliances and promoting comprehensive mutual dependencies (Omonbude 2013) A combination of cost-benefit analysis and the situational mode has potential in diplomatic efforts to prepare for international cooperation, as already intimated before with reference to the European partnerships for structural adjustment Clearly, there are large differences in willingness and ability to pay or to perform between individual countries or groupings such as the OECD and the developing countries, but environmental efforts on the part of the poor may be traded for technical and/or financial assistance, or for lowering trade barriers by the rich At the end of the day, however, there is no escape from the conclusion that accepting responsibility for DOI: 10.1057/9781137552754.0008 Governance sustainable development and, particularly, for global warming, begins at home, and that success primarily depends on the political will of the richer part of the world Against this background, it is fortunate that an international group of senior politicians and executive of large multinationals, supported by and advisory panel of leading economists are working and lobbying together in the Global Commission on the Economy and Climate to examine ways of combining lasting economic growth with tackling the risks of climate change Their recent report (GCEC, September 2014) broadly supports the data given in Section 1.6 of this book and presents a ten-point action plan concentrating on a strong, lasting and equitable international climate agreement to accelerate lowcarbon transformation, better managed urban growth and mass transit systems and restoration of degraded forests and agricultural lands 4.5 Summary and conclusions This book endeavours to make recent developments in ecological economics, behavioural economics, political philosophy and public administration accessible to a wide audience in a non-technical treatment It shows how environmental sustainability may be organized, valued, distributed and implemented by introducing the situational contract as an interactive mode of governance The situational mode is a political tool to order values in society in trades between efficiency, distributional concerns and effectiveness It may be seen as an integrative and further development of the mixed bag of ideas known as New Public Management (NPM), with which it shares a combination of management by objectives, cooperation in networks, choice in public services, interest in incentives and in a permanent monitoring of performance In terms of valuation and distribution, it activates reciprocity in individual responsibilities to pay or to perform, but differs from NPM in that contracts are situational, meaning that actors in delivery are mandated to customize terms of trade in cooperative principal-agent relations for differences in the capabilities of counterparts, as revealed in trades between efficiency and fairness The situational contract, originally developed to deal with information asymmetries in delivering social security, is meanwhile being rolled out in other areas of public intervention as well, and appears suitable in dealing with diversity in environmental policy DOI: 10.1057/9781137552754.0008 The Political Economy of Sustainable Development Clearly, there are lots of ifs and buts in an interactive and situational approach for gathering information for implementing fair, efficient and effective environmental policies Transaction and transition costs may appear prohibitive, political principals may pay lip service to international cooperation and prefer haze over transparency in communicating what they are op to, civil servants in policy arena’s and implementation may prefer hard and fast rules over personalized responsibilities, and citizens may not be bothered to get involved Experts, finally, may revel in details and fail to see the wood for the trees, and information generated on values and their distribution may be less conclusive then hoped for Nevertheless, the situational mode brings openness into the public and political debate As a general mode of policymaking, it assigns rights and responsibilities in democratic interaction, clarifies the size and the structure of problems to be solved (Section 4.3) and fortifies the weakest link in democracy: the way in which political executives learn to mind the preferences and ambitions of the people With regard to environmental sustainability (Section 4.4), it raises the awareness of its dynamics, the unavoidability and the opportunities of action, and the irrelevance of hanging on to unsustainable property rights Its most important quality, however, is that the situational contract is an instrumental concept: a means to the realization of ends, whatever they may be As such, it does not judge terms of trade in normative terms, but settles ‘what we owe to each other’ and, in doing so, reveals or reflects the notions of fairness that political principals – as our democratic delegates – approve, and that agents in delivery and we ourselves or our representatives agree upon; parties that, however inspired by their own interpretation of fairness, may accept to be governed by compromise to achieve what we are not capable of achieving on our own Sen’s capability theory goes way beyond improving the agency of the disadvantaged to convert resources and opportunities into actual functionings of well-being (Section 3.4) It can raise the awareness of the international community, as a whole, of what is to be done to achieve a sustainable world Interactive governance and situational contracting provide a road map for our thinking about where we want to go and how to get there, not just in terms of environmental protection, but in other areas of policymaking as well Actually, the interactive approach will work better if it is accepted as a general mode of policymaking, as introduced in Section 4.2, trading environmental concerns with other political ambitions to approach the point of indifference in opportunity costing as discussed in Section 1.3 DOI: 10.1057/9781137552754.0008 Governance While the instrumental logic prevails in contracting, the situational contract also caters to a vision of man as a social animal and an agent who can effective things – both individually and jointly (Sen 2013: 7) It recognizes, moreover, that efficiency and distribution are two sides of a coin that can be distinguished but not separated Against that background, it promotes deliberative democracy as its executive format and creates a pathway to involvement in an era where citizens in the richer part of the world, at least, are increasingly well-educated, emancipated and opinionated Yet it can serve different ideologies in implementing fairness, like a democratic institutional arrangement should This book is written in the belief that national and international cooperation require an interactive style of governance – an approach that crosses borders and jurisdictions, creates trust and makes cooperative games worthwhile In their own interest, OECD countries should trade knowhow, open markets, financial resources and institutional support in properly monitored situational contracts with developing and emerging economies to enable them to their part in securing sustainable development Cooperation in and with the UN, the OECD, the European Union or the BRICS (the alliance of Brazil, Russia, India, China and South Africa) provides an increasingly important institutional framework for deliberating and coordinating environmental policy At the end of the day, however, environmental science, behavioural economics, theories of justice and public administration may provide the grammar, but the people will have to write the story DOI: 10.1057/9781137552754.0008 Bibliography Alford, J., 2009 Engaging Public Sector Clients: From Service Delivery to Co-Production, Oxford: Palgrave Macmillan Arrow, K., Solow, R., Portney, P.R., Learner, E.M., Radner, R., and Schuman, H., 1993 Report of the NOAA panel on contingent valuation, Washington, DC: National Oceanic and Atmospheric Administration Barry, B., 2005 Why Social Justice Matters, Cambridge: Polity Press Bateman, I.J et al 2006 The aggregation of environmental benefit values: welfare measures, distance decay and total WTP, Ecological Economics, 60: 450–460 Baumol, W.J and Oates W.E., 1988 The Theory of Environmental Policy, Cambridge: University Press Beaulier, S and Caplan, B 2007 Behaviour economics and perverse effect on the welfare state, Kyklos, 60 (4): 485–507 Bewley, T 1995 A depressed labor market as explained by participants, American Economic Review, Articles and Proceedings, 85: 250–254 Blaug, M., 1978 Economic Theory in Retrospect, 3rd ed., Cambridge: University Press Boardman, C., and Sunquist, E., 2009 Toward understanding work motivation: worker attitudes and the perception of effective public service, American Review of Public Administration, 39 (5): 519–535 Boardman, A.E., Greenberg, D.H., Vining, A.R and Weimer, D.L., 2006 Cost-Benefit Analysis Concepts and Practice, 3rd ed., Upper Saddle River: Prentice Hall DOI: 10.1057/9781137552754.0009 Bibliography Bohman, J and Richardson, H.S 2009 Liberalism, deliberative democracy and ‘reasons that all can accept’, Journal of Political Philosophy, 17 (3): 253–274 Boone, C., De Brabander, B and Van Witteloostuijn, A.1999, The impact of personality on behavior, in five Prisoner’s Dilemma Games, Journal of Economic Psychology 20 (3): 343–377 Boyd, J and Banzhaft, S 2007 What are ecosystem services? The need for standardized environmental accounting units, Ecological Economics, 63 (2–3): 616–626 Breton, A 1995 Organizational hierarchies and bureaucracies, European Journal of Political Economy, 11 (3): 411–440 Buchanan, J.M., 1969 The Demand and Supply of Public Goods, Chicago: Rand McNally Burkhead J and Miner J., 1971 Public Expenditure, London: Macmillan Carson, R.T 2012 Contingent Valuation: A Practical Alternative when Prices Aren’t Available, Journal of Economic Perspectives, 26 (4): 27–42 Cartwright, E., 2011 Behavioral Economics, New York: Routledge Coase, R.M 1960 The problem of social cost, Journal of Law and Economics, 3: 1–44 Comim, F., Qizilbash, M and Alkire, S., eds, 2008 The Capability Approach: Concepts, Measures and Applications, Cambridge: University Press Costanza, R., De Groot, R., Sutton, P., Van der Ploeg, S., Anderson, S.J., Kubiszewski, I., Farber, S and Kerry Turner, R 2014 Changes in the global value of ecosystem services, Global Development and Change, 26: 152–158 Cornelisse, P.A and Thorbecke, E., 2010 Exchange and Development, Cheltenham: Edward Elgar Couvet, D and Prevot, A.C 2015 Citizen-science programs: Towards transformative biodiversity governance, Environmental Development, 13: 3–45 CPB (National Bureau of Policy Analysis), 1992 Economic Long-Term Consequences of Energy Taxation Working Paper no 43, The Hague Crocker, D 2005 Sen and deliberative democracy, In: Kaufman, A., ed., Capabilities and Equality: Basic Issues and Problems, London: Routledge Culyer, A.J., 1980 The Political Economy of Social Policy, Oxford: Martin Robertson Dasgupta, A.K and Pearce, D.W., 1986 Cost-Benefit Analysis: Theory and Practice, London: Macmillan DOI: 10.1057/9781137552754.0009 Bibliography David, P.A 1985 Clio and the economics of QWERTY, American Economic Review, 75 (2): 332–337 De Zeeuw, A., In ‘t Veld, R., Van Soest, D., Meuleman, L and Hogewoning, P., 2008 Social Cost Benefit Analysis for Environmental Policy-Making, The Hague: RMNO Dworkin, R.H., 2002 Sovereign Virtue, Cambridge: Harvard University Press Dworkin, R.H., 2011 Justice for Hedgehogs, Cambridge: Belknap Press for Harvard University Press Eichenhofer, E and Westerveld, M 2005 Contractualism in Employment Services A new Form of Welfare State Governance, The Hague: Kluwer Law International: 21–39 Eijgenraam, C.J.J., Koopmans, C.C., Tang, P., and Verster, A.C 2000 Evaluation of Infrastructural Projects Guide for Cost-Benefit Analysis, The Hague: Ministry of Economic Affairs Elster, J., 1992 Local Justice How Institutions Allocate Scarce Goods and Necessary Burdens, Cambridge: University Press Emerson, K., Nabatchi, T and Balogh, S 2012 An integrative framework for collaborative governance, Journal of Public Administration Research and Theory, 22: 1–29 Esping-Andersen, G., 1990 The Three Worlds of Welfare Capitalism, Princeton: University Press Frey, B.S and Jegen, R 2001 Motivation crowding theory: a survey of empirical evidence, Journal of Economic Surveys, 15: 589–611 Frey, B.S and Stutzer, A 2002 What can economists learn from happiness research?, Journal of Economic Literature, 40: 402–435 GCEC 2014 Better Growth, Better Climate, http/newclimateeconomy.net Giddens, A., 1979 Central Problems in Social Theory: Action, Structure and Contradiction, Berkeley: University of California Press Gutwald, R., Lessmann, O., Masson, T and Rauschmayer, F 2014 A capability approach to intergenerational justice? Examining the potential of Amartya Sen’s Ethics with regard to intergenerational issues, Journal of Human Development and Capabilities,15 (4): 355–368 Hajer, M., and Wagenaar, H., eds, 2003 Deliberative Policy Analysis: Understanding Policy Analysis in a Network Society, Cambridge: University Press Hayek, F.A., 1960 The Constitution of Liberty, London: Routledge & Kegan Paul Hammitt, J.K 2013 Positive versus normative justifications for costbenefit analysis: implications for interpretation and policy, Review of Environmental Economics and Policy, (2): 199–218 DOI: 10.1057/9781137552754.0009 Bibliography Hardin, G 1968 The tragedy of the commons, Science 162: 1243–1248 Hausman, J 2012 Contingent valuation: from dubious to hopeless Journal of Economic Perspectives, 26 (4): 43–56 Heertje, A., 2006 Schumpeter on the Economics of Innovation and the Development of Capitalism, Cheltenham: Edward Elgar Hennipman, P 1995 Pareto optimality: value judgement or analytical tool?, In: Welfare Economics and the Theory of Economic Policy, Aldershot: Edward Elgar, pp 59–86 Herian, M.N., Hamm, J.A., Tomkins, A.J and Pytlik Zillig, L.M 2012 Public participation, procedural fairness and evaluations of local governance: the moderating of uncertainty, Journal of Public Administration Research and Theory, 22: 815–840 Hirschleifer, J 1985 The expanding domain of economics, American Economic Review, 75: 51–68 Hirschman, A.O 1970 Exit, Voice and Loyalty, Cambridge: Harvard University Press Hotelling, H 1947 ‘Letter to the National Park Service,’ reprinted in An Economic study of the Monetary Evaluation of Recreation in the National Parks (1949), Washington, D.C.: U.S Department of the Interior, National Park Service and Recreational Planning Division Hupe, P.L and Hill, M.J 2007 Street-Level Bureaucracy and Public Accountability, Public Administration, 82 (2): 279–299 IPCC (International Panel of Climate Change), 2014 Fifth Assessment Report Approved Summary for Policy Makers (internet version, November 1) James, D.E., Jansen H.M.A and Opschoor, J.B., 1978 Economic Approaches to Environmental Problems, Amsterdam: Elsevier Jilke, S 2015 Essays on the Microfoundations of Competition and Choice in Public Service Delivery, Ph.D dissertation, Erasmus University Rotterdam: https://sebastianjilke.files.wordpress.com/2015/03/ dissertation_sj1.pdf Just, R.E., Hueth, D.E., and Schmitz, A., 2004 The Welfare Economics of Public Policy, Cheltenham: Edward Elgar Kahneman, D., Wakker, P., and Sarin, R 1997 Back to Bentham? Explorations of experienced utility, Quarterly Journal of Economics, 112 (1): 375–405 Kahneman, D 2003 Maps of bounded rationality, psychology of behavioral economics (Nobel Lecture), American Economic Review, 93 (5): 1449–1475 DOI: 10.1057/9781137552754.0009 Bibliography Kling, C.L., Phaneuf, D.J., and Zhao, J 2012 From Exxon to BP: has some number become better than no number?, Journal of Economic Perspectives, 26 (4): 3–26 Koopmans, C and Rietveld, P 2013 Long-term impacts of megaprojects: the discount rate, In: Priemus H &, Van Wee, B., International Handbook On Mega-Projects, Cheltenham (UK): Edward Elgar Koppenjan, J., and Klijn, E-J., 2001 Managing Uncertainties in Networks, London: Routledge Krähmer, D 2006 Message-contingent delegation, Journal of Economic Behavior and Organization, 60 (4): 490–506 Kuhn, T.S., 1970 The Structure of Scientific Revolutions, 2nd ed., Chicago: University Press Le Grand, J., 2003 Motivation, Agency and Public Policy Oxford: University Press Leibenstein, H., 1980 Beyond Economic Man A New Foundation for Microeconomics, Cambridge: Harvard University Press Lelli, S 2008 Operationalising Sen’s capability approach: the influence of the selected technique, In: Comim et al The Capability Approach, op cit Lindblom, Ch E., 1977 Politics and Markets New York: Basic Books Lipsky, M., 1980/2010) Street-Level Bureaucrats: Dilemmas of the Individual in Public Services, New York: Russell Sage Foundation Loorbach, D., 2007 Transition Management New mode of governance for sustainable development, Utrecht: International Books Mabsout, R 2015 Mindful capability, Ecological Economics, 112: 86–97 Maskin, E.S 2008 Mechanism Design How to Implement Social Goals (Nobel Lecture), American Economic Review, 98 (3): 567–576 McVittie A and Moran, D 2010 Valuing the non-use benefits of marine conservation zones; an application of the UK Marine Bill, Ecological Economics, 70: 413–424 Musgrave, R.A., 1959 The Theory of Public Finance, New York: McGrawHill Musheno, M and Maynard-Moody, S 2015 ‘Playing the rules,’ Discretion in social and policy context, In: Hupe, P., Hill, M and Buffat, A., eds, Understanding Street-Level Bureaucracy, Bristol: The Policy Press (forthcoming) Meinard, Y and Grill, Ph 2011 The economic valuation of biodiversity as an abstract good, Ecological Economics, 70: 1707–1714 DOI: 10.1057/9781137552754.0009 Bibliography Miller D., 2013 Justice for Earthlings Essays in Political Philosophy, Cambridge: University Press Mishan E.J and Quah, E., 2007 Cost-Benefit Analysis, 5th ed., Abingdon: Routledge Mouter, N 2014 Cost-Benefit Analysis in Practice, Ph.D Thesis Delft University of Technology Noonan, K.G, Sabel, Ch F., and Simon, W.H 2009 Legal Accountability in the Service-Based Welfare State: Lessons from Child Welfare Reform, Law & Social Inquiry, 34 (3): 523–568 Nordhaus, W.D 2007 A Review of the Stern Review on the Economics of Climate Change, Journal of Economic Literature, 45: 686–702 Nozick, R., 1974 Anarchy, State and Utopia, Oxford: Basil Blackwell Nussbaum, M.C 2000 The cost of tragedy: some moral limits of cost-benefit analysis, Journal of Legal Studies, 29 (2): 1005–1036 Nussbaum, M C., 2006 Frontiers of Justice, Cambridge, Harvard University Press Okun, A.M., 1975 Equality and Efficiency: The Big Trade-Off, Washington: Brookings Olson, M., 1971 The Logic of Collective Action Public Goods and the Theory of Groups, Cambridge, Harvard University Press Omonbude, E.J., 2013 Cross-Border Oil and Gas Pipelines and the Role of the Transit Country: Economics, Challenges and Solutions, London: Palgrave Macmillan Opschoor, J.B 1995 Ecospace and the fall and rise of throughput intensity, Ecological Economics, 15 (2): 137–141 Opschoor, J.B 2009 Sustainable development and a dwindling carbon space, Environmental and Resource Economics, 45 (1): 3–23 Ostrom, E., 1990 Governing the Commons The Evolution of Institutions for Collective Action, Cambridge: University Press Pearce, D., Atkinson, G., and Mourato, S., 2006 Cost-Benefit Analysis and the Environment, Paris: OECD Perman, R., Ma, Y., Common, M., Maddison, D and McGilvray, J., 2011 Natural Resource and Environmental Economics, 4th ed., Harlow, England: Pearson Education Piketty, Th., 2014 Capital in the Twenty-First Century, Cambridge (US): Belknap Portney, P.R., and Weyant, J.P., (eds), 1999 Discounting and Intergenerational Equity, Washington: Resources for the Future DOI: 10.1057/9781137552754.0009 Bibliography Pruitt, D and Kimmel, M 1977 Twenty years of experimental gaming: Critique, synthesis, and suggestions for the future, Annual Review of Psychology, 28: 363–392 Rabin, M 1998 Psychology and economics, Journal of Economic Literature, 36 (1): 11–46 Rainey, H.G., 2003 Understanding and Managing Public Organizations, San Francisco: Jossey-Bass Rawls, J., 1971 A Theory of Justice, Cambridge: Harvard University Press Rawls, J 1977 The Basic Structure as Subject, American Philosophical Quarterly, 14: 159–165 Rawls, J., 2001 Justice as Fairness A Restatement, Cambridge (US): Belknap Rawls, J., 2005 Political Liberalism (Expanded Edition) New York: Columbia University Press Robbins, L., 1976 Political Economy: Past and Present A review of leading theories of economic policy, London: Macmillan Robeyns, I 2008 Ideal theory in theory and practice, Social Theory and Practice, 34 (3): 341–362 Rosen, S 1974 Hedonic pricing and implicit markets: product differentiation in pure competition, Journal of Political Economy, 82 (1): 34–55 Sagoff, M 2011 The quantification and valuation of ecosystem services, Ecological Economics, 70: 497–502 Scanlon, T.M., 1998 What we Owe to Each Other, Cambridge: Belknap/ Harvard UP Scharpf, F.W., 1997 Games Real Actors Play Actor-Centered Institutionalism in Policy Research Boulder: Westview Press Schlosberg, D 2004 Reconceiving environmental justice: global movements and political theories, Environmental Politics, 13 (3): 517–540 Sen, A.K., 1973 On Economic Inequality, Oxford: Clarendon Press Sen, A.K., 1980 Equality of What? The Tanner Lecture on Human Values, Oxford: Basil Blackwell, reprinted in Sen, A.,1982 Choice, Welfare and Measurement, Oxford: Basil Blackwell Sen, A.K., 1985 Commodities and Capabilities (Hennipman Lecture), Amsterdam: North-Holland Publishing Company Sen, A.K 1999 Merit and justice, In: Arrow, K., Bowles, S and Durlauf, S., eds, Meritocracy and Economic Inequality, Princeton: University Press DOI: 10.1057/9781137552754.0009 Bibliography Sen, A.K., 2009 The Idea of Justice, London: Allan Lane Sen, A.K 2013 The ends and means of sustainability, Journal of Human Development and Capabilities, 14 (1): 6–20 Shapiro, S and Guston, D 2007 Procedural control of the bureaucracy, peer review and epistemic drift, Journal of Public Administration Research and Theory, 17: 535–551 Shleifer, A 1998 State versus private ownership, Journal of Economic Perspectives, 12: 133–150 Simon, H A 1976 From substantive to procedural rationality, in: Latsis, S (ed.), Method and Appraisal in Economics, Cambridge: University Press Simon, H.A 1979 Rational Decision Making in Business Organizations (Nobel Lecture), American Economic Review, 69 (4): and 2013: 493–513 Smith, A., 1759/2009 The Theory of Moral Sentiments, Harmondsworth: Penguin Modern Classics Smith, S., 2011 Environmental Economics, A Very Short Introduction, Oxford: University Press Sørensen, E and Torfing, J 2009 Making governance networks effective and democratic through metagovernance, Public Administration, 87 (2): 234–258 Speekenbrink, A., 2014 Trans-Atlantic Relations in a Postmodern World, Bloomington: AuthorHouse Stern, N et al., 2007 The Economics of Climate Change The Stern Review, Cambridge: University Press; also http://www.hm-treasury.gov.uk Stevens, T 2005 Can stated preference valuations help improve environmental decision making?, Choices, 20 (3): 1–6 Stiglitz, J.E., 1986 Economics of the Public Sector, New York: Norton & Co Stiglitz, J.E 2002 Information and the change in the paradigm of economics (Nobel Lecture), American Economic Review, 92: 460–501 Stiglitz, J.E., 2013 The Price of Inequality, New York: Norton (paperback edition) Tinbergen, J., 1956 Economic Policy: Principles and Design, Amsterdam: North-Holland Tummers, L.G., 2013 Policy Alienation and the Power of Professionals, Cheltenham: Edward Elgar Tummers, L.G., Bekkers, V., Vink, E and Musheno, M 2015 Coping during public service delivery: a conceptualization and systemic review of the literature Journal of Public Administration Research and Theory, advance access DOI: 10.1057/9781137552754.0009 Bibliography Vandenbroucke, F., 2001 Social Justice and Individual Ethics in an Open Society Equality, Responsibility and Incentives, Berlin: Springer Van de Walle, S 2011 New Public Management: restoring the public trust through creating distrust? In: T Christensen and P Laegreid, eds, Ashgate Research Companion to New Public Management, Aldershot: Ashgate, pp 309–320 Van Schie, N 2010 Co-Valuation of Water An Institutional Perspective on Valuation in Spatial Water Management, Ph.D dissertation, Erasmus University Rotterdam Van Slyke, D.M 2007 Agents or stewards: Using theory to understand the government-nonprofit social service contracting relationship, Journal of Public Administration Research and Theory, 17 (2): 460–501 Walzer, M., 1985 Spheres of Justice, New York: Basic Books WCED 1987 Our Common Future, Oxford: University Press Weitzman, M.M 2009 Risk-adjusted gamma discounting, NBER working paper no 15588In Whittington, D and MacRae, D 1986 The issue of standing in cost‐benefit analysis, Journal of Policy Analysis and Management, 5: 665–682 Williamson, O.E., 1996 The Mechanisms of Governance, New York: Oxford University Press Wolfson, D.J., 1979 Public Finance and Development Strategy, Baltimore: Johns Hopkins University Press Wolfson, D.J 1996 Excess burdens, double dividends, and the taxation of fossil fuels, Public Finance/Finances Publiques, 51: 441–452 Wolfson, D.J and Koopmans, C.C 1996 Regulatory taxation of fossil fuels: theory and policy, Ecological Economics, 5: 55–66 Wolfson, D.J 2012 Situational contracting: building reciprocity between rights and obligations, Governance, 25 (4): 661–685 Wolfson, D.J 2014 Who gets what in environmental policy? Ecological Economics, 102: 8–14 Wolfson, D.J 2015 Implementing fairness in social policy, Journal of Human Development and Capabilities, 16 (2): 180 Young, I.M., 2000 Inclusion and Democracy, Oxford: University Press Zhuang, J., Liang, Z., Lin, T and De Guzman, F 2007 Theory and Practice in the Choice of Social Discount Rate for Cost-Benefit Analysis: A Survey, Economics Working Paper 94, Manila: Asian Development Bank DOI: 10.1057/9781137552754.0009 Index abatement, 27, 30 accountability, 4, 61 adaptation, 23 administered prices, 34 agents, 52 appropriateness, averting behaviour, 27, 36 attribution, 44 basic needs, 41 bonding, 61 Brundtland Committee, capabilities, 43 ‘carrying capacity’, 22 ‘Coase-solution’, 18 ‘compliance’ orientation, 62 ‘comply-or-explain’, 52 consumer sovereignty, 25 consumer surplus, 28 contingent valuation, 36 co-production, 64 cost-benefit analysis, co-valuation, 29 cultural perspective, 62 customizing obligations, 65 deliberative democracy, 51 ‘demerit goods’, 12 discount rate, 14 ‘double dividend’, 33 ecospace, 22 ecosystem services, 17 ‘ecosystem services’, 22 DOI: 10.1057/9781137552754.0010 efficiency, emissions trading, 26 environmental taxation, 32 equilibrium condition, 64 excess burden, 33 excludability, 10 exclusion, 11 ‘existence values’, 25 exit, 59 exit options, 59 experience goods, 27 ‘external effects’, 10 fairness, 51 fiscal instruments, 31 functionings, 43, 70 general equilibrium, good governance, Gossen, 7, 16, 21 hedonic pricing, 27, 36 immanent limitations, 10 ‘impartial spectator’, 45 income- and substitution effects, 12 indifference, 17 indivisibility, 10 information, 11 institutions, 48 instruments, 13 interactive governance, intergenerational fairness, 66 Index legitimacy, 2, 19 marginal costs, marginal utility, 7, 17 ‘maximin-criterion’, 41 mechanism design, 3, 25 merit, 44 ‘merit goods’, 7, 12 meritocracy, 44 mitigation, 23 a multi-goal policy analysis, multi-criteria analysis, 21 multiple objectives, 50 negotiated environment, 52 net present value, 14 New Public Management, 69 ‘(non)rivalry of demand’, 10 non-excludability, 59 non-rejectability, 59 non-use values, 25 open access, 59 openness, 70 opportunity cost, 5, 14 option values, 25 ‘overlapping consensus’, 41 ‘Pareto-criterion’, Pareto-improvement, 68 perfect markets, ‘performance’ orientation, 62 persuasion, 31 ‘planner’s preferences’, 25 political economy, preference imposition, 25, 31 ‘primary goods’, 41 primary income, 38 principal-agent relationships, 58 principals, 52 principal-steward-agent relationships, 58 principle of compensation, 44 ‘privilege goods’, 12 (pure) public good., 11 quasi-public good, 11 rationality, reciprocity, 61 regulatory fees, 32 rent seeking, 41, 45 revealed preference, 25, 27 satisficing behaviour, scarcity, secondary income, 38 sensitivity analysis, 35 ‘shadow of authority’, 60 shadow price, 16 ‘sin taxes’, 12, 32 situational contracts, social contract, 40 standing, 48 ‘stated preferences’, 25 subjectivism, sustainable development, technical imperfections, 10 tertiary income, 38 traditional systems, 65 transaction costs, travel cost method, 27 ‘trickle down’, 41 uncertainty, 15 unintended consequences, 64 use values, 25 ‘veil of ignorance’, 41 willing to pay, 18 willingness to accept, 18 workable competition, 21 DOI: 10.1057/9781137552754.0010 ... multi-dimensional acceptability of trades between rivalling criteria of ‘good’ governance, including the protection of DOI: 10.1057/9781137552754.0005 The Political Economy of Sustainable Development human... other is criteria of good governance such as fairness and sustainability The section begins with the role that an ideal system of ‘perfect’ markets might play in the coordination of the use of. .. 10.1057/9781137552754.0005 The Political Economy of Sustainable Development cost-benefits analysis is not necessary or feasible Furthermore, it qualifies the relevance of the ‘ideal’ world as introduced