Collaborative approaches to water management and planning: An institutional perspective

Despite the popularity and rhetoric of collaborative approaches, the successes of such initiatives are not widespread and remain elusive. Some commentators argue that without ‘the noise of participation’, a return to centralised governance should be reconsidered. Whilst this conclusion may be premature given the lack of rigorous analysis of collaborative approaches, it calls for a closer examination of contexts and processes that are conducive to the success of collaborative initiatives. This paper evaluates the scope of collaborative watershed management and planning in the Howard River Catchment in northern Australia. The findings depict the challenges of collaborative planning in a nested hierarchy with multiple institutions. The existing institutional apparatus can potentially constrain the collaborative initiatives to water planning. They include the norms of agency authority, administrative inflexibility and power structures in a nested institutional hierarchy. Delegating decision making responsibility to decentralized structures should be backed up by the development of the capacity of such structures. Considerable transaction costs exist in overlaying collaborative approaches across a nested hierarchy of multiple institutions.     

From families to formal contracts: An approach to development

This paper develops a theory in which individuals can use one of two types of human/social capital to enforce contracts: “Local capital” relies on families and other personal networks; “market capital” relies on impersonal market institutions such as auditors and courts. Local capital is efficient when most trading is local, but only market capital can support trading between strangers that allows extensive division of labor and industrialization. We show that economies with a low cost of accumulating local capital (say, because people live close together) are richer than economies with a high cost of accumulation when long distance trade is difficult, but are slower to transition to impersonal market exchange (industrialize) when long distance trade becomes feasible. The model provides one way to understand why the wealthiest economies in 1600 AD, China, India, and the Islamic Middle East, industrialized more slowly than the West. We report an array of historical evidence documenting the pre-industrial importance of family and kinship networks in China, India, and the Islamic world compared to Europe, and the modernization problems linked to local capital.     

Why China's approach to institutional change has begun to succeed

In the constantly changing modern economic environment, a country's ability to implement institutional reforms is crucial to maintain economic growth and to promote the welfare of its citizens. Unfortunately, it can be difficult to persuade institutional stakeholders that the change is necessary, and as a result, efforts at institutional change often fail. To avoid situations in which change is sudden and disruptive, China has chosen a more cautious approach of gradual institutional change leading to smooth reform, which Deng Xiaoping referred to as “crossing the river by stepping from stone to stone” — a metaphor that translates into doing a careful experiment before broad application of an approach for which you lack prior experience. This approach allows adaptation to local conditions during subsequent broader adoption of a new approach, and can thereby decrease the risks and costs of adopting a new strategy by first testing the change and then demonstrating the potential benefits to local residents and governments. This innovative approach has been a key component of China's economic reforms since 1978, and the Chinese experience shows how adapting programs to local natural and social conditions can help to motivate change and sustain the implementation of new institutions.     

绿色经济制度体系--推进循环经济发展的制度创新

从本质上说，发展循环经济就是在生产、流通、消费、分配的每一个环节实现废弃物减量化、资源化、无害化，实际上就是废弃物资源的有效配置问题。基于此，本文以界定废弃物是资源为前提，从微观经济学角度，通过探讨废弃物资源有效配置机制，透析当今资源短缺和环境恶化的制度根源，寻求实现废弃物资源有效配置即发展循环经济的制度切入点——绿色经济制度体系，以期为循环经济的发展奠定经济学理论基础。     

A systems approach to policy analysis and development planning: Construction sector in the Turkish 5-year development plans

In this study, we propose a new model for systems analysis ‘of’ policy and systems analysis ‘for’ policy with the example of construction sector in the Turkish 5-year development plans.Our proposed model—integrated development management model (IDMM)—is conceptually based on the principles of systems thinking and integrated management approach.We present and discuss the results of our work in which we extracted all construction-related policies and strategies from eight 5-year development plans and analyzed them using the IDMM. In the light of the analyses, we give several answers to the question: “Why did the development plans fail to meet their targets in Turkey?” We propose that any development plan has to have claritas–unitas–integritas–consonantia between the management levels (normative, strategic, and operational) and components (goals, structures, and behavior) of IDMM.The paper is the first work that brings the concepts of development planning and foresight together. In a complementary stance, the time of integrating foresight and development planning has come.     

Oil supply and economic development strategy: A dynamic planning approach

Most oligopolistic models of the oil market begin with the assumption of rising supply curves for oil. Lack of convincing evidence that high oil prices are being maintained by oligopolistic action has raised the possibility of competitive behavior in the oil market and therefore of a backward bending supply curve. This paper presents numerical solutions of a linear dynamic planning model of an oil exporting country with a development strategy which consists of utilizing oil revenues for building an export sector to replace oil. To make a stronger case a high absorber, Algeria, is used as an example. The numerical results are consistent with the hypothesis that there may well be good economic reasons to restrict supply of oil in response to increased prices. Three important characteristics of the model which produce this result are (a) diminishing marginal utility of consumption, (b) absorptive capacity, and (c) imperfect capital markets. A ‘perverse’ supply behavior is found consistent with optimal allocation of oil resources when a price increase is expected to last for a long time. The effects of temporary price changes which can, for example, result from temporary supply shocks or demand changes during the business cycle are also studied. It is shown that in response to such short term price changes competitive behavior is ‘normal’, i.e., supply varies in the same direction as the price. This implies that reductions in OPEC production which have taken place during the recent market downturns cannot be taken as evidence of cartel coordination, as they usually are, since they are also consistent with price-taking behavior.     

The institutional approach to economic history: Connecting the two strands

This essay examines the historiography of two episodes in history—the scattering of plots in the open fields in the Middle Ages and the transition to the factory system in the Industrial Revolution—to shed light on the uses of institutional economics in economic history. In both of these episodes, economic “just-so” stories advanced our understanding of history. What animated intellectual innovation in both cases was a bold conjecture about the raison d’être of a puzzling institutional structure. But what ultimately enriched our understanding was the process of conjecture and revision those conjectures set off. In both episodes, the revised conjectures that best withstood criticism and revision were those that saw the phenomena not as static snapshots of economic agents confronting an economic problem but rather those that embedded the phenomena within a larger economic problem and within a process of economic change. In the end it is an account of institutional change—what I call the good old New Institutional Economics—that connects the use of institutional economics to explain puzzling historical phenomenon with the role of institutional economics in addressing the big questions of economic growth.     

An analytic network process approach to partner selection for acquisition and development

To cope with rapid technological change and the increasing R&D costs during a period of decreasing technology and product life cycles, acquisition and development (A&D) has been suggested to be an important method for high-tech firms to achieve higher economic returns. However, few studies have examined the operational problems of choosing a compatible A&D candidate from a pool of potential A&D candidates. To address this limitation, this study proposes an approach based on the analytic network process (ANP) to rank a set of potential A&D candidates within a multivariate set of attributes systematically. A total of 25 criteria were identified and used to construct the ANP model in which the final selection is based on the resulting priorities assigned to the A&D candidates. A case study of a semiconductor manufacturing company was conducted to illustrate the application of the proposed approach. The results indicated that the proposed ANP method can aid in A&D decision-making problems systematically.     

A framework for technology based national planning

Technology, in today's increasingly interdependent society, provides hope, values, and faith for mankind. It brings hope for bridging the gap between the haves and the have-nots; it is responsible for altering economic and social values; and it is the faith upon which the world of tomorrow is being built. Thus, the relationship between technology and the development of our societies is inextricably bound in a complex manner. This paper examines the problems of achieving technology induced socioeconomic progress, as well as the limitations of current national accounting practices. To integrate technological considerations into the national development planning process better technology measurement methodologies must first be designed. Secondly, to make the integration process more organic and effective “make-some and buy-some technologies,” based on the concept of an approach to development planning and using three technology domains (importing technology, traditional technology, and exporting technology) is needed.     

Love, war and cultures: an institutional approach to human evolution

Love, war and culture have all played an important role in the evolution of human institutions and they have been characterized by complex relationships. War can select unselfish groups ready to sacrifice themselves for the love of their communities that they recognize to be culturally different from the others. At the same time, horizontal cultural differentiation cannot be taken for granted. Culture is the outcome of long evolutionary processes. It requires some human specific characteristics, including a large brain, that are likely to have been influenced by sexual selection and by the peculiar structure of human love affairs. Thus, if war may have generated love, also the reverse may be true: by favoring the development of human culture, love may have produced the conditions for war among culturally differentiated groups. In turn, war may have co-evolved with group solidarity only under the prevailing social arrangements of hunting and gathering economies. In general, human relations have been influenced by the prevailing features of the goods (private, public and positional) that have characterized production in different stages of history. They have been embedded in institutions involving very different levels of inequality, ranging from mostly egalitarian hunting and gathering societies to typically hierarchical agrarian societies and to wealth-differentiated industrial societies. The perspectives of the present-day knowledge-intensive economy can also be seen through the same institutional approach to human evolution. The different nature of contemporary production processes involves a new set of alternative possible arrangements that have different implications for social (in)equality and different capabilities to satisfy basic human needs.     

Technological change and institutional inertia: a game-theoretic approach

In this paper, we study a co-evolutionary model of economic change at two hierarchical levels. At the lower level, institutions are given and the focus is on how resources are allocated and innovation produced in response to the pay-off structure induced by prevailing institutions. At the higher level, it is the institutions themselves that change as the outcome of a process of social bargaining. The main objective of the paper is to study the interaction between these two levels of change, attempting to provide some insight on issues like technological/institutional divergence, technological dead-end, institutional inertia, etc.It appears that evolutionary economics must be the theory of a process of cultural growth as determined by the economic interest, a theory of a cumulative sequence of economic institutions stated in the terms of the process itself. Thorstein Veblen (1898, p. 393).This work was undertaken while the author was a Research Fellow at the Institute for Advanced Studies of the Hebrew University of Jerusalem.     

An institutional theory of hydraulic fracturing policy

The use of high-volume horizontal hydraulic fracturing (fracking) has increased substantially over the past five years in the United States. Use of this drilling technology to extract natural gas from hitherto impermeable shale is expected to increase even more in coming decades. Two institutions, integration contracts and well spacing requirements, evolved to mitigate the common-pool economic wastes associated with conventional oil and gas drilling. U.S. regulators have applied these institutions to fracking. However, shale plays differ geologically from conventional plays and are subject to different extractive technologies. We theorize that the point-source pollution characteristics of conventional drilling allowed integration contracts and well space requirements to minimize local negative environmental externalities as an unintended byproduct of minimizing common-pool economic wastes. The non-point source pollution characteristics of fracking, however, make these institutions insufficient to minimize negative environmental externalities associated with drilling in shale plays, because the economic waste problem is different. If policymakers understand the crucial differences between conventional oil and gas plays and shale plays and the drilling technologies applied to them, they should be better equipped to craft fracking regulatory policies that internalize problematic externalities.     

An alternative approach to relative indices of development and potential for change of the nation-state

Quantitative indices are proposed to reflect the degree of development and the potential for change of the nation-state. The former index is based upon the intensity of energy consumption, while the latter is defined as the product of agricultural land per capita and gross national product per capita. It is shown that acceptable levels of some welfare functions are achieved above a critical energy intensity called the development threshold, and it is postulated that above a higher critical level of energy intensity significant environmental deterioration will occur. Data is presented for 104 countries and high levels of change potential are shown to be correlated with a relatively large number of options for further development. On the other hand, very low levels of change potential are found in countries which have difficulty in supporting their populations. It is postulated that change potential is more useful than either population density or poverty as an indicator of when a country is in need of a vigorous population policy. It is concluded that below the development threshold further industrialization is beneficial while above it this may not be true. It is also concluded that at high levels of the change potential and at intensities below the development threshold high population growth rates may be tolerated.     

A consortium approach to nursing staff development

Within a consortium framework, four teaching hospitals have developed a curriculum for nursing staff development. Since 1980, the institutions have realized significant savings. The courses provide networking and integration of new research and facilitate technological transfer. Other institutions may also find a collaborative approach beneficial.     

Foreign-exchange distribution in Yugoslavia's new planning system: An input-output approach

Under the new planning system in Yugoslavia, the foreign-exchange earnings of the final exporter should be shared by all the producing units that contributed to the production of the exported goods or services. A method of calculating the contributions of the various producing sectors to a country's exports is developed. This method makes use of the value-added/gross-output ratios of individual sectors and the Leontief inverse matrix. The analysis is extended to an examination of the balance-of-trade effects of exports.     

An alternative approach to income taxation

We take an alternative approach to income taxation in this paper. We view the income tax schedule as the outcome of a voting process, rather than the optimal choice of a “benevolent social planner”. We show that it is very likely for majority voting to lead to the adoption of a regressive income tax schedule, depending on the per capita government revenue requirement and the mean productivity of the population, which is in sharp contrast with the result derived from the traditional “benevolent social planner” approach to income taxation; and that given the adoption of a regressive income tax schedule, the income tax schedule would become less regressive as the ratio of the per capita government revenue requirement over the mean productivity of the population increases. Our work might shed some light on both the prevalent adoption of regressive state tax systems and the cross-state difference in terms of tax systems.