A survey of evolutionary policy: normative and positive dimensions

We explore public policy from the perspective of evolutionary analysis. Potential entry points for developing a normative evolutionary policy theory are examined, which involves a critical examination of the related idea of “evolutionary progress”. The meaning of evolutionary policy is next studied from two different, normative and positive angles: namely, policy design informed by evolutionary thinking; and policy-making and politics as an evolutionary process. Several examples are provided to discuss the value of evolutionary thinking for policy, including in the context of the current economic crisis. Next, evolutionary policy is compared with policy advice coming from two dominant schools of policy analysis, namely neoclassical economics and public choice theory. We conclude that evolutionary thinking offers a distinct and useful perspective on public policy change and design. Nevertheless, there is a need for more synthesis and coherence among different studies as well as for policy experiments and in-depth empirical studies.     

The use of modeling tools for policy in evolutionary environments

This is a position paper on the possibilities of informing the (economic and environmental) policy debate by using quantitative evolutionary models. I argue that an evolutionary worldview implies that the existing quantitative modeling tools used for policy analysis are problematic. Then I summarize the main elements of an evolutionary way of analysis, and the way in which it can be incorporated into quantitative models. I conclude with an outline of a proposal for how to apply the ideas in the analysis of energy transitions.     

Evolutionary thinking in environmental economics

Evolutionary and environmental economics have a potentially close relationship. This paper reviews past and identifies potential applications of evolutionary concepts and methods to environmental economics. This covers a number of themes: resource use and ecosystem management; growth and environmental resources; economic and evolutionary progress; and individual behavior and environmental policy. The treatment will address both biological and economic—including institutional, organizational and technological-evolutionary phenomena. Attention will be drawn to the fact that evolutionary economics shows a surprising neglect of environmental and natural resource factors.

A formal psychological theory for evolutionary economics

The purpose of this paper is to seek to rise to the challenge posed by Harstad and Selten by providing a single unifying model of the psychological processes underlying the behaviour which drives the process of economic evolution. It seeks, in short, to make evolutionary economics yet more intellectually competitive. A self-contained account is given of a new model of the psychology of economic behaviour developed at the University of Queensland as part of the legacy of the Brisbane Club of evolutionary economists. Two results derived within this model are presented - the “Schumpeter” and “Made to Stick” theorems - and are used to elaborate the centrality of knowledge and its growth to the behaviour which drives evolutionary processes in the economy. A core contribution of this paper is to identify the way in which knowledge thus evolves. These are then used to elaborate explanations of evolutionary economic behaviour on both sides of the production-consumption dichotomy, in particular the manner in which the growth of knowledge may be facilitated by interpersonal interaction and particular conditions in the mind, or personality types. We discuss some relevant policy aspects of the model before concluding. The intention of this paper is to provide a basis for future research aiming to build a more coherent, more comprehensive and more simple view of the behaviour driving evolutionary dynamics.     

An introduction to evolutionary theories in economics

This paper presents the basic ideas and methodologies of a set of contemporary contributions which are grouped under the general heading of evolutionary economics. Some achievements-especially with regard to the analysis of technological change and economic dynamics-are illustrated, some unresolved issues are discussed and a few promising topics of research are flagged.This article draws on a chapter prepared for the book Market and Organization: The Competitive Firm and its Environment, edited within an EEC/Tempus Programme by LATAPSES, Nice, France, and Iside, Rome.     

Implications of happiness research for environmental economics

Using happiness data to study economic issues is a burgeoning field in recent economic literature. This paper shows that happiness research has considerable potential for environmental economic analysis. The paper discusses some implications of happiness research for environmental policy analysis, specifically with respect to the level of socially optimal environmental quality. It discusses evidence that consumer choice may be not utility maximizing and systematically distorted away from intrinsically motivated options, especially environment-friendly consumption. Finally, the paper describes how happiness data can be used in a novel approach to the monetary valuation of environmental quality and discusses the associated benefits and problems in relation to conventional methods.     

Evolvability and progress in evolutionary economics

This paper develops an account of evolutionary progress for use in the field of evolutionary economics. Previous work is surveyed and a new account set out, based on the idea of evolvability as it has been used recently in evolutionary developmental biology. The biological underpinnings of this idea are explained using examples of a series of phenomena that influence the evolvability of biological systems. It is further argued that biological and economic selection pressures and developmental processes are sufficiently similar to make this biological concept useful in economics. The new account is defended against a number of common objections to the notion of progress in evolving systems, including the claim that all stipulated measures of evolutionary progress are essentially arbitrary and the idea that economic evolutionary progress might not accord with the preferences of economic actors. It is argued that progress, understood as an increase in evolvability over time, is both philosophically well-justified and provides useful predictive and explanatory resources to those seeking to understand and manipulate evolving economic systems.     

马克思关于技术变迁的演化经济思想

几乎所有的演化经济学家都承认,马克思的确是位有着丰富演化思想的经济学家,而这一点在其有关技术变迁的理论中表现得尤为突出.马克思在关于技术与社会的关系、关于技术的本质、关于技术进步的累积过程和选择过程,以及关于技术消失的考察中都广泛地应用了生物学隐喻研究方法,蕴含着丰富而深邃的演化经济思想和洞见,这也为后人继续研究和发展一种技术变迁的演化理论指明了方向.     

Neoclassical versus evolutionary economics in developing countries: convergence of policy implications

This paper aims to determine whether the dichotomy between the science, technology, and innovation policy based on neoclassical and evolutionary schools of economics is applicable to developing countries. Regarding the fundamental differences in foundations of these two economic paradigms, policymakers have been forced to select and to follow one of the two seemingly competing views. However, in developing countries, due to various market and government coordination failures, complying with one of the schools has not been successful in practice. From the past, there has been some controversy between neoclassical and evolutionary schools on the subject of science, technology and innovation policy. Using a survey questionnaire and statistical analyses of the results, this paper shows that, due to the institutional setting and structural conditions in developing countries, despite the fundamentally different foundations of the competing schools of thought, the policy implications of the schools have converged. Drawing on Theme Analysis Method, the rationales are first conceptualized and then the fuzzy method is applied to reveal the respondents’ tendency to the extracted rationales and implications of the two competing schools. In conclusion, the statistical results validate the proposed hypothesis.     

Behavior and cognition of economic actors in evolutionary economics

An evolutionary perspective on the nature of economic activity requires a theory of human behavior and cognition that highlights human creativity and innovativeness, while at the same time recognizing that in many arenas of economic life change is slow and more routine aspects of behavior obtain. It is proposed that Herbert Simon’s conception of human behavior as largely “bounded rational” is capable of suiting both aspects. However, to be able to encompass the enormous advances humans have achieved over the years in their ability to meet a variety of wants, a theory of behavior and cognition suitable for evolutionary economics needs to recognize the evolving cultural context of economic behavior and cognition.     

Applying evolutionary methods in economics: progress or pitfall?

The Darwinian theory of evolution has arguably become an important building block for experimental and theoretical economists. According to Burnham (J Econ Behav Org 90:S113–S127, 2013), it is possible to formulate novel hypotheses and predictions about human preferences, on the basis of what patterns of behavior would have been adaptive in the ancestral environment. After clarifying two theoretical concepts, the Adaptively Relevant Environment and fitness maximization, I argue that multiple scientifically plausible hypotheses about human preferences are compatible with evolutionary models that target behavior. Moreover, I propose a refinement of Burnham’s method based on theoretical resources provided by the indirect evolutionary approach. Economists apply or build evolutionary models of their own that target particular features of human psychology and cognition. Such models may reduce the number of plausible hypotheses to allow for rigorous scientific testing in laboratory or field experiments.

     

Management and the representative firm revisited: the modern significance of Marshall's evolutionary economics

In an essay written in honour of Peter Swann, it is second nature to discuss some aspects of the economics of innovation, as that is the very challenging area of economic life where he has added so much to our understanding. I will attempt to do this by posing the problem of how innovation fits into the theory of value. Innovation research continues apace, but its broader systemic implications for how we understand the dynamics of capitalism are in danger of being overlooked. But two important economists, Schumpeter and Marshall, have seen the problem differently and built innovation into their theoretical schemes from the start. Marshall's theory of evolutionary change provides a natural focus for our discussion, and this is reflected in his treatment of management, in his use of the representative firm and in the variation-cum-selection dynamics of his open competitive process. We treat each of these topics and show how his evolutionary dynamics can be expressed in the Fisher/Price dynamics of evolutionary change. More generally, the key to economic development is the uneven nature of innovation and it is the uneven nature that gives economic transformation its evolutionary character. This, I suggest, is the proper legacy of Marshalls economics.     

Schumpeterian endogenous growth theory and evolutionary economics

In this paper, we aim to discuss whether Schumpeterian models of endogenous growth can accommodate Schumpeters vision of development through creative destruction. Taking a methodological approach, our focus is on individual decision-making, technology, general equilibrium and welfare, and steady state dynamics as the fundamental principles underlying endogenous growth theory. In particular, the Aghion-Howitt model of Schumpeterian growth in various extended versions is analyzed in the light of Schumpeters work. Therefore, we also try to root Schumpeters work in historical context. We find endogenous growth theory far from carrying Schumpeters idea of an evolutionary approach to change and development. Rather the emergence of numerous models of an evolutionary type can be observed to provide for the formal structure appropriate to keeping Schumpeters legacy alive.JEL Classification: B1, B2, B4, O3, O4Corespondence to: Thomas Kuhn     

Evolutionary modelling of the macro-economic impacts of catastrophic flood events

This paper examines the possible contribution of evolutionary economics to macro-economic modelling of flood impacts to provide guidance for future economic risk modelling. Most macro-economic models start from a neoclassical economic perspective and focus on equilibrium outcomes, either in a static or dynamic way, and describe economic processes at a high level of aggregation. As a consequence, they typically fail to account for the complexity of social interactions and other behavioural responses of consumers and producers to disasters, which may affect the macroeconomic impacts of floods. Employing evolutionary principles and methods, such as agent-based modelling, may help to address some of the shortcomings of current macro-economic models. We explore and discuss the implications of applying consumer and producer heterogeneity, bounded rationality, network effects, social and technological learning, co-evolution and adaptive policy-making concepts into existing economic frameworks for the assessment of macro-economic impacts of floods.     

Making green discourses matter in policy-making: Learning from discursive power struggles within the policy area of car taxation

This paper is about stability and change in the policy-making discourse of a traditional neoclassical policy area, the area of car taxation. Stability is here related to the unquestioned continuation of a traditional neoclassical economics perspective in policy-making, whereas change is related to the introduction and impact of environmental concerns. The aim of the paper is to investigate, what makes green discourses matter in traditional policy-making. It is based on an in-depth study of policy-making processes related to car taxation in two environmental front-runner countries, Sweden and Denmark.Making green discourses matter in policy-making is an important contemporary environmental challenge. Therefore, as Tian Shi argues, we need more research into the institutional setting of the policy-making process. Ecological economics as a policy science has to have a broad understanding of the political economic nature of the policy process. Taking this standpoint as the point of departure, the paper seeks to uncover questions such as, what is the policy-making reality in which Swedish and Danish green discourses have to make a difference? How do existing neoclassical regimes react, when green actors attempt to influence policy-making from an environmental point of view? And to what extent can green discourses actually have an impact on the policy world within the area of car taxation?The paper concludes that the traditional neoclassical economic discourse is particularly robust and resistant against alternative green discourses. Stability rather than change is the dominating picture. This does not imply that environmental concerns will not be taken into account in the future. Rather it implies that only the changes, which keep up the existing order, or enhance the narrow power-related interests of the dominating actors, will materialise more or less easily. The rest is a power struggle in which timing, coalition-building, persistence and thorough knowledge about the field in question is of importance. In this struggle change agents will also benefit from the ability to rethink dominating ways of thinking and doing in an environmentally benign way. A rethinking that is based on environmental values while at the same time holding positive visions that are ‘compatible’ with the existing dominating discourse.     

On evolutionary technological change and economic growth: Lakatos as a starting point for appraisal

This paper proposes a discussion on evolutionary technological change and economic growth theory, using the Lakatosian Methodology of Scientific Research Programmes as an appraisal criterion. Since the persistence of some inflexibility in this approach made it difficult to capture fundamental features of the scientific undertaking at hand, an alternative hypothesis was explored, that developed by Hoover (Scientific research program or tribe? A joint appraisal of Lakatos and the new classical macroeconomics. In: de Marchi N, Blaug M (eds) Appraising economic theories: studies in the methodology of research programmes. Edward Elgar, Aldershot, 1991). This latter framework is used here not as a formal methodology but rather as a language to find patterns in these theories. This exercise evolved then towards a number of considerations on the confrontation between these evolutionary theories particularly in terms of that which can be seen (in a loose sense) as their “rival research programme”, the new neoclassical growth models.     

解读演化经济学的兴起——兼论演化经济学的现状与未来发展

演化经济学的兴起主要有三个原因:西方主流经济学的范式危机;自然科学的发展;社会科学领域演化思想的积累与发展.演化经济学最近的前沿研究集中于进行演化建模,对复杂性进行测量,讨论技术与制度的协同演化等几个方面.拓展对多时期动态过程的研究,将演化经济学与制度经济学、马克思主义经济学、博弈理论等进行创造性综合,更多关注学科语言的凝炼和理论建模工作是演化经济学的未来发展方向.     

Firms and industries in evolutionary economics: lessons from Marshall, Young, Steindl and Penrose

Evolutionary economists have tended to assess firms and industries separately, neglecting the role of their interaction in the process of economic growth and development. We trace the separation of firms and industries to the introduction of population thinking in the discipline of industrial economics, including some broadly evolutionary analyses. If researchers conflate a population of firms with an industry, they introduce “thin” means of relating firms to one another and to industries. Despite his device of the ‘representative firm’, Marshall develops “thick” means of relating firms to industries by means of their internal and external organizations. Penrose avoids the notion of industry by focussing on heterogeneous and potentially mobile firms. Young and Steindl develop mundane explanations of firms’ relations within groups and locate the impetus for economic growth in a poorly understood environment. We conclude that evolutionary economists should revisit firms’ boundaries, not in the sense of explaining the existence of firms but in a relating and communicating sense in which boundaries signify the selective means of firms’ relationships.     

Market failure vs. system failure as a rationale for economic policy? A critique from an evolutionary perspective

This paper reconsiders the explanation of economic policy from an evolutionary economics perspective. It contrasts the neoclassical equilibrium notions of market and government failure with the dominant evolutionary neo-Schumpeterian and Austrian-Hayekian perceptions. Based on this comparison, the paper criticizes the fact that neoclassical reasoning still prevails in non-equilibrium evolutionary economics when economic policy issues are examined. This is more than surprising, since proponents of evolutionary economics usually view their approach as incompatible with its neoclassical counterpart. In addition, it is shown that this “fallacy of failure thinking” even finds its continuation in the alternative concept of “system failure” with which some evolutionary economists try to explain and legitimate policy interventions in local, regional or national innovation systems. The paper argues that in order to prevent the otherwise fruitful and more realistic evolutionary approach from undermining its own criticism of neoclassical economics and to create a consistent as well as objective evolutionary policy framework, it is necessary to eliminate the equilibrium spirit. Finally, the paper delivers an alternative evolutionary explanation of economic policy which is able to overcome the theory-immanent contradiction of the hitherto evolutionary view on this subject.