Social Economic and Governance Aspects of Sustainable Development

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European Commission DG Research

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carried out by

MARTIN O’CONNOR

Professor of Economics C3ED, Université de Versailles St-Quentin-en-Yvelines

78047 Guyancourt cedex, France

2006



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PREFACE, JEAN-MICHEL BAER 333

ABSTRACT 444

§1 GENERAL INTRODUCTION 555

§2 EU SUSTAINABLE DEVELOPMENT POLICY ISSUES 777

§3 CONCEPTUAL FRAMEWORK FOR THE REVIEW 999

§4 ECONOMIC ASPECTS 111555

§5 THE ECONOMY- ENVIRONMENT INTERFACE 222222

§6 SOCIAL WELL-BEING ASPECTS 222666

§7 INTERFACES OF THE ECONOMIC AND SOCIAL SPHERES 333000

§8 ECONOMY/SOCIETY/ENVIRONMENT & GOVERNANCE 333666

§9 RECOMMENDATIONS FOR FUTURE SS&H RESEARCH 444555



PPPRRREEEFFFAAACCCEEE Sustainable development is a dynamic concept, and an ambitious and challenging programme for action. Since its initial diffusion with the 'Brundtland Report'-World Commission on Sustainable Development of 1987 -20 years ago- the practical and analytical issues related to sustainable development keep challenging policy makes, researchers, business, civil society organisations. The challenge cuts across all levels -from local to global- and all spheres –from individual to collective behaviour, from economic investments and (dis)incentives to changes in institutions and policy making, technological and social innovations, demographic changes, gender and inter-generational relations, globalisation and more. The European Union has been committed to, and indeed has been in the lead in fostering, policy and research in the field of sustainable development. Still much is to be done to understand the factors that foster or hamper sustainability and the options available in an ever changing global context. While it is important to take stock of the good practices and progress made, it is also crucial to avoid self-complacency or paying lip-service to sustainable development and rather keep in sight the difficulties. Research can play an important role in this by developing concepts, methodologies, data, comparative analyses –also considering that sustainable development (and paths towards it) can take various shapes in different economic, geographical, political, social settings. The policy review on social, economic and governance aspects of sustainable development, is the work of an independent scholar, Martin O'Connor, and took place in the context of a broader exercise of reviewing results of social sciences research projects funded in the 5th Framework Research Programme. It focuses on social, economic and governance aspects while fully aware that sustainable development includes - and in fact has been largely lead by- environmental ones. The idea here is indeed to complement the research carried out in the Environment research programme on environmental issues ranging from climate change to biodiversity or water resources by focusing on the other 'pillars' of sustainable development. At the time of publishing this review some more projects on governance for sustainable development -including large Integrated Projects and Network of Excellence- are in progress in the context of the 6th Framework Programme, and the 7th Framework Research Programme is in its initial phase: here the links between all components of sustainable development will be pursued even more strongly. Far from being 'outdated', we consider that publishing this policy review now is a due tribute to the 'pioneer' projects in the 5th Framework Programme as well as a necessary component of knowledge accumulation.

JJJEEEAAANNN---MMMIIICCCHHHEEELLL BBBAAAEEERRR Director 'Science, Economy and Society'



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Social science can be an aid to human understanding before becoming also a tool for policy. Given the pace of socio-economic change, the stresses that this induces for public policy, business and civil society actors, and the wide disparities of habits, beliefs outlooks and expectations across different stakeholder groups and nations of the enlarging EU, the importance of this potential policy contribution of social sciences and humanities research to building social learning dialogue capacity cannot be over-estimated. This document is one component in a cycle of work whose broad objective is to produce a synthesis of policy-relevant results from social science research projects funded by the European Commission in the 5th Framework research Programme. It addresses social, economic and governance aspects of sustainable development. One way of summing up the sustainability challenge and the research work examined in this report is through the “three Ws” formula: “Sustainability of what, why, and for whom?”. This formula highlights the necessity for attention to inter-group and intra-generational distribution issues — that is, the analysis of possible incompatibilities between the diverse sustainability concerns expressed by the variety of stakeholders or with reference to the classes of community that are candidates to be sustained. The synthetic discussion of project themes and findings in the report highlights this point. Indeed, absences of societal cohesion and the fragility of ‘social capital’ appear as critical constraints from a sustainability point of view, perhaps even more critical than technological innovation and economic capital accumulation capacities alone.



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§1.1 THE PURPOSE OF THIS REPORT This document is one component in a cycle of work whose broad objective is to produce a synthesis of policy-relevant results from social science research projects funded by the European Commission. It addresses particularly the policy area of social, economic and governance aspects of sustainable development. In all, 16 multi partner activities (10 projects, 3 thematic networks, 3 accompanying measures) have been reviewed. Some of these were initiated nearly ten years ago; others have only just reached their conclusions. In most cases the fruits of these efforts have been, or are now being, put to work in subsequent collaborative work of the institutions concerned. It is not within the scope of this review to assess this ongoing ‘uptake’ process. However, in presenting noteworthy insights and findings of the projects reviewed, the attempt is made to situate the work in its evolving context.

§1.2 EU RESEARCH, POLICY AND “SUSTAINABILITY” Sustainability has, during the past decade, become a key consideration in research, public policy and business practice at all scales and around the world. But not all the projects reviewed here had an explicit preoccupation with sustainability issues. Therefore, in part this review engages in a process of rational reconstruction. It teases out messages from a point of view that was not necessarily the focus of the research team at the time. This accounts for the structure of this SYNTHESIS REPORT.

§ In this SYNTHESIS REPORT, first a very brief account is given of the current profile of “sustainable development” policy issues at EU level (Section §2).

§ Then we present in a synthetic way the conceptual framework used as a methodological basis for the project review (Section §3), highlighting the challenges of multi-scale governance with reference to a “triple bottom line or social, environmental and economic sustainability.

§ With these reference points, a selection of highlights from the projects is presented (Sections §4 to §8). Our main purpose is not to summarise the projects’ scientific contents and conclusions per se; rather it is to signal ways that they give us useful pointers concerning sustainability policy goals in the EU and related research needs. Thus, although throughout Sections §4 to §8 there are short expositions of project objectives and noteworthy findings, these expositions are embedded within the thematic and modular structure of the SYNTHESIS REPORT as a whole.

§ Finally, by extrapolation from the themes of the projects set in relation to sustainability policy and conceptual themes, a number of recommendations are made for priorities in future social sciences and humanities (SS&H) research at the European level (Section §9).

Sustainability is a complex theme with many facets. No one project has sought to cover all facets (and, indeed, no one project ought to have tried for comprehensive coverage of all facets). However, it is important that somehow the insights and arguments of each project be considered in relation to the whole. We approach this synthetic appraisal task in a dialectical way. Progressively, we highlight the insights from the various individual projects or groups of projects, considering these as ‘candidates’ for collective intelligence about sustainability. We also address, progressively, the question of the extent to which (and the conditions under which) the insights of each project can be reconciled with other partial insights — or appear to be in contradiction with other partial insights. This reciprocal testing of the ‘robustness’ of arguments and conclusions of each project relative to the others is an important basis of our distillation of key research recommendations.

§1.3 APPRAISAL: “HALF FULL AND HALF EMPTY” The available evidence, partly coming from these projects themselves, is that European societies are rather far from sustainability goals. But this is not the fault of research itself. We may conclude that the SS&H research glass is ‘half full’ because, even on the basis of this limited database of projects (not all of which had an explicit preoccupation with sustainability), we see evidence of an emerging strong European research capacity, with wide disciplinary scope, for addressing the spectrum of empirical and theoretical questions posed by sustainability. However, the glass is also ‘half empty’ because, even if research helps us to understand the distance that we are from sustainability and the challenges that we are facing, there is not a simple bridge between more knowledge and getting improvements relative to the un-sustainability of our current practices.



§1.4 SUCCINCT LIST OF PROJECTS REVIEWED

ACRONYM TITLE OF PROJECT LEADER

HPSE–CT–2001–00057 [ SETI ]

Sustainable Growth and Employment Creation in the Technological Integration of the EU Economy P.C. PADOAN

HPSE–CT–1999–00043 [ AITEG ]

Assessing the Impact of Technology and Globalisation: The Effects on Growth and

Employment Jonathan MICHIE

HPSE–CT–2000–00018 [ LGEGO ]

Sustainable Development; long-term growth, equity and governance C.V. VAITSOS

SEE1–CT95–1018 [ SUE ]

Modelling a Socially and Environmentally Sustainable EU F. SCHMIDT-BLEEK

HPHA–CT–2000–00059 [ ERPNET ]

Establishing a Multi-Disciplinary Thematic Research Network on Globalisation, Economy and Ecology Jeroen VAN DEN BERG

HPSE–CT–2001–00078 [ WRAMSOC ]

Welfare Reform and the Management of Societal Change Peter TAYLOR-GOOBY

HPSE–CT–1999–00032 [ DYNSOC ]

European Panel Analysis Group / The Dynamics of Social Change in Europe Richard BERTHOUD

HPSE–CT–1999–00004 [ ENEPRI ]

European Network of Economic Policy Research: Review of research on Ageing, Welfare Systems and

Employment Daniel GROS

HPSE–CT–2001–50010 [ ENIQ ]

European Thematic Network on Indicators of Social Quality L.J.G VAN DER MAESEN

HPSE–CT–1999–00037 [ CHER ]

Consortium of Household Panels for European Socio-economic Research: A feasibility study for a data

production and dissemination exercise G. SCHMAU

HPSE–CT–2001–50005 [ SUSTRA ]

Trade, Societies and Sustainable Development S. THOYER

HPSE–CT–2001–0076 [ PUBACC ]

Analysing Public Accountability Procedures in Contemporary European Contexts Simon JOSS

HPSE–CT–2001–70001 [ REGGLOB ]

The Regulatory Framework of Globalisation Ramon TORRENT

HPSE–CT–2001–00097 [ ADAPT ]

EU Enlargement and Multi-level Governance in European Regional and Environmental Policies:

Patterns of Institutional Learning, Adaptation and Europeanisation among Cohesion Countries

Panayotis GETIMIS

SOE2–CT98–1100 [ POSTI ]

Policies for Sustainable Technological Innovation in the 21st Century: Lessons from Higher Education in

Science, Technology and Society Terje GRONNING

HHHPPPSSSEEE---CCCTTT---111999999999---000000000222888 [ GOV-PAR ]

Achieving Sustainable and Innovative Policies through Participatory Governance in a Multi-Level

Context Hubert HEINELT



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The terms sustainability and sustainable development are current since the 1980s and, notably, the publication of the WCED Brundtland Report (Our Common Future, 1987). They have emerged in the context of concerns about (1) adverse impacts of human exploitation of the potentials of nature and (2) worsening inequalities between affluent and miserable components of contemporary human societies. Since the 1950s, the prevailing vision of development has proposed material affluence and comfort through industrialisation. This vision is still translated, within Europe, in the perspective of convergence of southern and eastern nations towards the ‘Western’ mixed-economy model. Yet the future of this mixed-economy model is itself under threat, from:

n Penetration of micro-engineering (nanotechnologies, genetic and cellular biotechnologies, digital communications, etc.) via all sorts of gadgets and infrastructures for industrial production, services consumption, human cognition, and habitat;

n Disruption of ecosystems of the planet (e.g., climate change, forest depletion, an unprecedented scale and variety of innovation in chemicals production);

n Reconfiguration of political and economic alliances including the remodelling of the European Union through enlargement, of ‘Eastern Bloc’ societies within the former USSR, of North-South relations (e.g., relations around the Mediterranean basin, relations between Western powers and the Islamic nations...), and of South-South rivalries;

n New visibility of local and international tensions along lines of economic disparity, language, culture and political difference, in ways that put into doubt the post World War Two visions of a certain “unity” of humanity.

A key reference point for European policy preoccupations for sustainability is the document A European Strategy for Sustainable Development (European Commission, ISBN 92-894-1676-9, Luxembourg, 2002). This document gives a useful condensed statement of strategic considerations for orienting the Community’s sustainability ambitions, plus a set of governance themes for piloting actions (see left-hand column of the table below).

HEADLINE OBJECTIVES AND STRATEGIC CONSIDERATIONS: TREATMENT MAIN SEG PROJECTS n The Global Dimension (international cooperation, trade policies,

development assistance); ***** SUSTRA, AITEG, REGGLOB, ERPNET

n Combating Climate Change (reduction of greenhouse gas emissions and increase in renewable energy); *** SUE, ERPNET, POSTI

n Ensuring Sustainable Transport (including modal shifts, infrastructure investments and spatial planning); * (SUE, ERPNET)

n Addressing Threats to Public Health (food safety, chemicals, medical drug risks, infectious diseases); *** POSTI, PUBACC

n Managing Natural Resources more Responsibly (notably agriculture, fisheries, waste and biodiversity). * GOV-PAR, SUE, ERPNET

GOVERNANCE THEMES FOR PROGRESS TOWARDS SUSTAINABILITY n Improve Policy Coherence (through integrated policy assessment

and a better information base); ***** ENIQ, CHER, DYNSOC, ADAPT

n Get Prices Right (to give signals about sustainability goals to individuals and business); * (SUE, ERPNET, GOV-PAR)

n Invest in Science and Technology for the Future (promoting innovation for sustainability goals); *** POSTI, SUE, AITEG

n Improve Communication and Mobilise Citizens and Business (in partnerships for sustainability); ***** ENIQ, POSTI, GOV-PAR

ADAPT, PUBACC n Take Enlargement and the Global Dimension into Account

(internal and external coherence of actions). ***** SUSTRA, AITEG, REGGLOB, PUBACC

It can easily be seen that, in establishing this list, the Commission has partly engaged in a ‘reframing’ or ‘recasting’ of well-established themes of research and policy under the rubric of sustainability.1 This is indeed the case for four EU themes/issues that are most directly and substantially addressed by our basket of 16 research and networking activities, namely: Enlargement, the Global Dimension, Policy Coherence and

1 A similar remark could, no doubt, be made with reference to other thematic headings of th research/policy review process of which this SYNTHESIS REPORT is a component. For example, much analysis relating to the fields of Research-Technology & Innovation, Regional Development, Governance, Social Welfare, Science & Society, and Social Indicators (each of which is the object of a review in the same cycle as this one), will produce findings that have pertinence to the new thrust of ‘sustainability’ concerns



Communication/partnership (these themes are highlighted in bold type in the table and their strong presence in the projects under review is signalled by the ***** code in the middle column).

These four themes are not uniquely, or even principally ‘sustainability’ issues. The most distinctive preoccupations of sustainability — such as inter-generational fairness, irreversible loss of environmental functions, preservation of biodiversity — are rather more directly associated with three other of the EC headline/governance themes — Climate Change, Threats to Public Health, Science and Technology Investment. Each of these three issues is addressed significantly (but rather diffusely, or only secondarily) by our set of SEG projects (as signalled by the *** code in the middle column).

But it should also be noted that some of the EU stated priorities (notably Transport, Natural Resources and Prices/incentives) are little addressed by our basket, or only implicitly (as signalled by the * code in the middle column of the table). These are research fields largely funded elsewhere in the European Commission’s programmes and, for this reason, no effort is made in the context of this synthesis to extrapolate artificially from the projects under review.

Finally, there are several important S-E-G SUSTAINABILITY themes that are strongly addressed by the projects under review, but that are not directly signalled in the above EU list of sustainability priorities. These include, notably, employment and human capital (and its formation and mobilisation), social cohesion which is related to social capital, principles of responsibility (with ethical and legal dimensions), and models of governance. Clearly, these sorts of themes are vitally important for European socio-economic policies. It is also true that, one way and another, they can be considered to be present within the EU themes headlined by the above-cited commission documents. So we have not difficulty is integrating them within our review framework.

Given this thematic diversity and the rather criss-crossing relationships between EU themes and project topics, neither the one nor the other provides an expedient basis for developing our synthesis. This is why, in order to position correctly the projects under review and to organise the lessons from and needs for future social sciences and humanities (SS&H) research, we complement (in Section §3) our identification of EU headline objectives with an explicit scientific view of the specificities of ‘sustainable development’ as a four-fold societal vision.



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Systems approaches to sustainability highlight the interdependence of the economic, social and environmental spheres. This is an asymmetric interdependence: the ECONOMIC is embedded within the SOCIAL sphere; and HUMAN COMMUNITY (including the “economic”) is embedded within the BIOSPHERE.2 The economic sphere, often the principal focus of development policy discourses and indicators, depends for its viability on the vitality of the social and environmental spheres. Environmental assets are our ‘natural capital’ that is both limited and fragile. In the social sphere, by analogy, the cultural forms, symbolic bonds and community infrastructures are our ‘social capital’ upon which social cohesion and economic performance completely depend.

§3.1 THE TRIPLE BOTTOM LINE & THE FOUR SPHERES Achieving sustainability means a process of co-evolution respecting a TRIPLE BOTTOM LINE, that is, the simultaneous respect for (or satisfaction of) quality/performance goals pertaining to each of the three spheres. . GOVERNANCE for sustainability centres on the problem of reconciling multiple system maintenance and development goals. None of “the economy”, “the environment” or “the society” is treated as the be-all and end-all of things. Policy analysis must focus attention (1) on the characterisation of principles of performance and quality in each sphere (ECONOMIC, SOCIAL, BIOPHYSICAL) and (2) on the interfaces, the interactions and the interdependencies between the three spheres. This is with a view to building procedural capacity, within the political sphere, for decisions and policymaking ensuring the simultaneous respect for (or satisfaction of) quality/performance goals pertaining to each of the three substantive spheres.

Speaking of governance implies collective agency, hence the POLITICAL sphere. Political organisation is a creation of the social sphere (and hence a part of it). But, political forms tend to take on a life of their own and so, the political sphere — like the economic sphere — expresses strong autonomy relative to the rest of the social (cf., tensions between the State and civil society, the public, the people, etc.). The POLITICAL sphere has the role of the “referee” that arbitrates in relation to the different — and often incompatible — claims made by the actors of the social and economic sphere for themselves and with regard to the other spheres (including the environmental sphere).

Analyses for sustainability must focus attention on many different facets of systems maintenance and change — the interfaces, the interactions and the interdependencies between the ECONOMIC, SOCIAL and ENVIRONMENTAL spheres, mediated by the POLITICAL sphere. This includes characterisation of principles of performance and quality in each sphere, and of the principles of rights, respect or responsibility proposed for one sphere in relation to another. This is a strongly inter-disciplinary challenge (see textbox)

This schema of four spheres (see diagram overleaf) provides a convenient framework for a clustering of sustainability research and policy themes. If we consider interfaces between each pair of “spheres”, then with the 4 spheres there are 6 pairings. We can highlight the 10 resulting facets of analysis with a 4x4 matrix array (see next page), where the diagonal cells of the matrix evoke performance concepts and criteria that relate principally to a single organisational form, and the off diagonal cells signal performance concepts and criteria arising as “interferences” of two organisational forms. Research on the interface aspects can be characterised through investigation of the claims or demands made by each sphere relative to the others.

We use the ‘mirror’ cells of the 4x4 table to cluster the projects under review relative to the four spheres and their interfaces. It can be seen that, consistent with the focus of the funding programme, the main clusters are on the social/economic, social/political and economic/political interfaces. The environmental/economic interface is significantly represented (although it is not the prime focus of the funding programme) but, remarkably, there is almost nothing on the social/environmental interface — which thus appears as a gap needing to be addressed (see Section §9 below).

2 For example, R. Passet (1979/1996), L’Economique et le Vivant, 2nd edition 1996, Economica, Paris.

AN INTERDISCIPLINARY CHALLENGE

Amongst the distinctive challenges of sustainability, there are:

— Scientific and epistemological aspects (e.g., systems complexity, timescale, uncertainty),

— Governance and political economy challenges (e.g., the dilemmas associated with historical liability and precaution, the framing of sustainable development in territorial perspectives at multiple scales, the ways that inter-national dimensions of equity, responsibility and historical debts might be taken into account),

— Ethical and communal dimensions (e.g., how principles of care for or duty towards future



SOCIAL ECONOMIC ENVIRONMENTAL POLITICAL

SOCIAL Forms of Collective Identity

and Community: THE SOCIAL SPHERE

CHER, ENEPRI, DYNSOC, POSTI,

AITEG, ENIQ, SETI GOV-PAR, (POSTI,

SUSTRA) WRAMSOC, PUBACC,

ADAPT, ENIQ

ECONOMIC OPPORTUNITIES & IMPACTS: “The economy versus the

community”

Performance, Products and Output:

THE ECONOMIC SPHERE SUE, ERPNET, POSTI LGEGO, SUSTRA,

REGGLOB, PUBACC

ENVIRONMENTAL LIVING WITH(IN) NATURE

Meanings, Values & Risks: sustaining what & for whom?

ENVIRONMENTAL FUNCTIONS: Pressures on & services of

the environment

Energy, Matter, Natural Cycles & Biodiversity:

THE ENVIRONMENTAL SPHERE

GOV-PAR, ADAPT, SUSTRA

POLITICAL SOCIAL POLICY:

(Capacity of communities; citizen/public participation)

ECONOMIC POLICY: (Shaping the rules and limits

of markets)

ENVIRONMENTAL POLICY: (Regulation of what counts as

an environmental value)

Coordination, Power, & Governance:

THE POLITICAL SPHERE

A synthetic characterisation of the 4 spheres and the 6 interfaces is provided in Section §3.2, overleaf.

SYSTEM REGULATION VIA POLITICAL ORGANISATION

NATURAL SYSTEMS

ORGANISATION

ECONOMIC ORGANISATION SOCIAL

ORGANISATION

GOVERNANCE FOR SUSTAINABILITY: THE « FOUR SPHERES »



§3.2 — THE FOUR SPHERES OF SUSTAINABILITY AND THEIR INTERFACES

COMPONENT ELEMENTS OF CHARACTERISATION

THE 3 SPHERES THE “THREE SPHERES”...

PPP ECONOMIC Economic self-organisation, e.g., markets, performance imperatives such as efficiency, growth (K. Marx: “accumulate, accumulate, it’s the law and the prophets”, etc.) governing production, transport and consumption activities.

PPP SOCIAL Social self-organisation, notably forms of collective identity and the frameworks of meaning (symbols, culture, etc.) and of relationships (networks, memberships, etc.) through which people situate themselves in human communities and within the biophysical world.

PPP ENVIRONMENTAL Environmental self-organisation, e.g., the dynamic structures of physical and biological activity including atmosphere and ocean circulation, water and nutrient cycles, living organisms from the virus up to the scale of the Biosphere.

THE 4TH SPHERE ... AND THE INSTITUTIONAL ARRANGEMENTS FOR THEIR GOVERNANCE...

QQQ POLITICAL

The governance dimension of organisation is constituted through the emergence of conventions and procedures for the regulation of each sphere in relation to the others, in order to assure the simultaneous respect for (or satisfaction of) quality/performance goals pertaining to all three spheres. This is the sphere of arbitrage amongst diverse principles and claims of interest, achieved de facto or by design through force and institutional arrangements ranging from town and county councils through national government structures to international agencies of the United Nations.

POLICY DOMAINS THE THREE DOMAINS OF GOVERNANCE/REGULATION

POLITICAL ⇔ ECONOMIC

POL TO ECON: Supply of “economic policy” or “governance” of the economic domain.

ECON TO POL: Demands (with accompanying arguments, reasons, principles) made on government by economic actors concerning “the economy” and with regard to the social and environmental spheres.

POLITICAL ⇒ ENVIRONMENTAL

POL TO ENV: Supply of “environmental policy”. Environmental management for sustainability may seek: first, the contribution of “natural capital” to economic welfare as a factor of production of economic goods and services; second, the permanence of the ecological welfare base through maintenance of environmental functions; and third, “respect for” environment. [The ENV-TO-POL linkage is presumed to be “mute” because non-human nature does not voice demands directly in any political forum.]

POLITICAL ⇔ SOCIAL

POL TO SOCI: Supply of “social policy” which may seek, in various ways, to mobilise society for the needs of the economic and/or to promote and ensure respect for specified forms of community (etc.).

SOCI TO POL: Demands (with accompanying arguments, reasons, principles) made on government concerning civil society, the community (etc.) and with regard to economic and environmental spheres.

SYSTEMS INTERFACES CHARACTERISATION OF THE INTERFACES OF THE 3 SPHERES

ENVIRONMENTAL ⇔ ECONOMIC

The ECONOMIC sphere seeks the “SERVICES” of “natural capital” to economic welfare as a factor of production; this engenders “ENVIRONMENTAL PRESSURES” and “ IMPACTS” on environmental functioning and (future) services, including (sometimes disruptive) feedback effects on economy and community.

ECONOMIC ⇔ SOCIAL

The ECONOMIC sphere seeks the “SERVICES” of “human capital” (and also of “social capital”) to economic welfare; this signifies, on the one hand, (sought-after) opportunities for wealth, revenues, goods and services but, on the other hand, exploitation and perturbation of existing community forms. For the SOCIAL sphere, the ECONOMIC is a means and not an end, and the question is whether “opportunities” provided by the ECONOMIC are nourishing or perturbing of the affirmed values and FORMS OF COMMUNITY.

SOCIAL ⇔ ENVIRONMENTAL

This is the domain of ENVIRONMENTAL VALUES and the matrix of “culture” that determines the “MEANINGS OF NATURE” or the spectrum of “environmental functions” identified by/for a society, e.g., nature as a cosmology, roles as a “source” of well being or wealth, perceived quality of landscape. This is therefore the material-symbolic space of meanings that (among other things) permits members of society to articulate “risks” and to affirm values: sustainability of what, why and for whom (e.g., productive land uses, biodiversity conservation, reverence for nature; rights and duties of the current generation to consume natural capital relative to rights/duties of respect towards future generations...).



Sustainability policies are grounded in both scientific and ethical preoccupations. First there is a principle of STEWARDSHIP OF THE FOUR CAPITALS — the question whether or not (or to what extent) a development trajectory is respectful, or not, of the generic criteria of social, economic and ecological system sustainability. Second, there is a principle of MAINTAINING GOOD COMMUNITY RELATIONS for an extended set of communities — including future generations and the non human world (biodiversity).

Systems sustainability analyses can be given operational character by specification of requirements on the MAINTENANCE OF FOUR CAPITALS, viz., economic, natural, social & human capitals. The first three of these are the “funds” linked directly to the corresponding “three spheres”. Human capital mediates between these three spheres (see diagram). Note that there is no “fund” (class of capital) specific to the political sphere (which is nourished by social, human and economic capitals).

One way of summing up the sustainability challenge is through the “three Ws” formula: “Sustainability of what, why, and for whom?”. This formula highlights the necessity for attention to inter-group and intra-generational distribution issues — that is, the analysis of possible incompatibilities between the diverse sustainability concerns expressed by the variety of stakeholders or with reference to the classes of community that are candidates to be sustained. Our synthetic discussion of project themes and findings (Sections §4 to §8) will highlight this point. Indeed, absences of societal cohesion and the fragility of ‘social capital’ appear as far more critical constraints, from a sustainability point of view, than technological innovation and economic capital accumulation capacities alone.

§3.3 ORGANISING THE PRESENTATION OF KEY PROJECT FINDINGS Policy for sustainability centres on the problem of reconciling multiple system maintenance and development goals. This means attention to the maintenance of all four classes of capital: economic, natural, human and social and natural. It also means a (relative) reorientation away from economic capital accumulation alone, towards the maintenance of values across all spheres (including cultural systems, nature, and embodied values in patrimony and infrastructures). The traditional preoccupation with economic growth and with economic capital formation is subsumed — in the overall vision — within the TRIPLE BOTTOM LINE in which all of “the economy”, “the environment” and “the society” are given standing.

This means that, thematically, we do not treat “economy” as having primacy over the “social” or “environmental” dimensions. Rather, given the rationale for the funding of these projects as policy-relevant targeted socio-economic research, it is perhaps the “governance” dimension (viz., the political sphere) that should be given pride of place in our review scheme. But we have to start somewhere and so, in a relatively conventional way we choose to focus first of all (in Section §4) on the ‘classical’ question of economic performance (growth and technological change), opening progressively to the environmental and social

NATURAL

CAPITAL HUMAN

CAPITAL

SOCIAL

CAPITAL

ECONOMIC

CAPITAL

THE FOUR CAPITALS are the “FUNDS” of the “three spheres” plus “human capital” which is the “go-between” of the three spheres

Human capital is not associated with a single organisational type; rather it is a constituent in all four organisational forms. The human organism is: (1) a biological entity (relating to the natural or biophysical sphere), (2) a factor of production (relating to the economic sphere), (3) a member of communities (relating to the social sphere) (4) a political actor and citizen (relating to the political sphere).



dimensions (Sections §5, §6, §7) and concluding (in Section §8) with an explicit discussion of the findings concerning the “governance” sphere.

Several projects and accompanying measures — notably AITEG, SETI, LGEGO — have addressed aspects of economic growth potential for Europe. Following the multi-dimensional view of sustainability outlined above, the question of economic performance potential cannot be considered without reference to environmental and social factors. These latter being, on the one hand the ‘conditions’ of durable economic viability and, on the other hand, the objects of performance considerations in themselves, a key aspect of governance for sustainability is necessarily the regulation of the economic sphere in relation to the two other spheres.

The absence, within the three above-mentioned projects, of explicit attention to the economy-environment interface can be considered, in the context of 21st century concerns for a “triple bottom line”, as a lacuna whose significance should be assessed. Nonetheless, several important messages can be drawn from these projects (see Section §4 below). u Modelling methodology: Across (and partly in view of) the considerable diversity of, and controversy

about, modelling approaches for addressing growth and employment prospects, innovation dynamics and performance on the interfaces with environment and society, it emerges that so-called disequilibrium and evolutionary modelling frameworks are often more pertinent than conventional ‘neoclassical’ equilibrium approaches.

u Economic system change: Technological and structural economic change is a complex evolutionary process and, although a spectrum modelling approaches yield interesting and credible results, robust conclusions from simulations of policy effects and future states tend to be qualitative rather than quantitative e.g., directions of change and orders of magnitude of different causal factors).

The robustness of these sorts of methodological messages can be assessed by, inter alia, considering them in relation to results of other projects that address more explicitly the key interfaces, that is, the “economic-environmental” interface on the one hand, and the “economic-social” interface on the other hand. Three projects — SUE, ERPNET, GOV-PAR — have explicitly addressed, although in quite different ways, the reconciliation of economic with environmental and, hence, societal performance goals. The SUE project, in particular, has addressed both economy/environment and employment dimensions of sustainability in analytical modelling terms. ERPNET rehearses a set of arguments, with sectoral examples, about appropriate analysis methods for addressing economic and environmental system dynamics in an integrated way. The GOV-PAR project addresses institutional arrangements with reference to the environment dimension, looking at evidence for the proposition that participatory decision-making can be an effective mechanism for innovation and change in directions of sustainability. Two other projects — POSTI, SUSTRA — evoke the environmental dimensions of development in a discursive way and bring out a wide variety of considerations across the set of SEG interfaces. Among the key points that emerge, cumulatively, on the economy-environment-social interface, we mention at this stage the following:

u Environmental outcomes: As highlighted by the SUE project’s scenario modelling at a Europe-15 scale, and in different ways by GOV-PAR case studies, there is a very substantial scope, in technological terms, for achieving reductions in key environmental pressures while maintaining economic capital accumulation.

u Employment: Results from all of SUE, AITEG and SETI suggest that obtaining satisfactory outcomes for employment levels in Europe given prevailing trends in international markets and innovation (etc.) is not impossible, but remains far from assured.

Complementary to the employment concern and opening out to other aspects of the social dimension, several projects — notably WRAMSOC, DYNSOC, CHER, ENEPRI — have addressed, at different levels of theoretical abstraction and empirical detail, the present situation and outlook for distribution of income and, more particularly, the capacities of Europe’s existing and future economic systems for material social welfare provision (health services, family support, investment in education, old age pensions, etc.). These projects (to be further discussed in Sections §6 & §7 below) effectively consider social performance with reference to (inter alia) economic performance as an enabling factor and/or a constraint.

One important finding is that (in the language of the WRAMSOC project) although there is a strong ‘push’ for social policy reform — this is visible within all European societies — there is nonetheless a tendency for ‘cost containment’ in a climate of ‘permanent austerity’. Moreover, there is a strong outcome — across the diversity of analyses and diversity of social welfare models in different parts of Europe — that, notwithstanding reform efforts, the prospects for human capital maintenance and mobilisation are not very good. These studies suggest that:



u Despite strong evidence that current employment policy and social welfare system designs are unlikely to achieve societal goals for human capital maintenance and mobilisation, there is considerable institutional inertia and, the reform/innovation process is slow even in the face of recognised new risks, vulnerabilities and needs.

u Given observable trends concerning economic capital accumulation, technology and markets (innovation, globalisation) and demography, there will be difficulties with reducing the currently high unemployment levels and there will be (worsening) difficulties with maintaining public investment in human capital (education, health care, pensions) and financing institutionalised social welfare programmes.

Thus, in Section §4 we will focus on key arguments and findings relating explicitly to economic growth and change dynamics; then Section §5 will focus on the question of the economy-environment interface as a factor conditioning economic growth prospects and societal goals. Section §6 will introduce the ‘social dimension’ (notably with reference to concepts and arguments of the ENIQ project), which positions us for returning, in Section §7, to considerations on the interface between social and the economic aspects of policy and system change. Finally, in Section §8, with specific reference to a further group of projects — PUBACC, ADAPT, SUSTRA — and also several some of the preceding projects (POSTI, GOV-PAR), we focus on the overtly political-institutional dimensions of “governance” or societal regulation of social-economic-environmental system change.

This schematic development is, of course, somewhat artificial. In order to avoid mentioning every project at once — and giving cross-references, footnotes and caveats in every direction — we have slightly boxed some of them in. For example, SUSTRA has messages about economic growth and technological change that we could have chosen to mention (but do not) in Section §4; ADAPT addresses environmental issues in ways that could be (but are not) signalled explicitly in Section §5; and so on.



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§4.1 ECONOMIC GROWTH PROSPECTS FOR EUROPE... Four of the projects under review — AITEG, SETI, LGEGO, SUE — address explicitly, with the aid of economic theory and models, the questions of technological change and economic growth potential for Europe. In fact, these projects are, each in their own ways, discussions of economic analysis methodology (the question of the usefulness of different classes of economic analysis modelling tools for exploring key policy questions) and attempts at making useful contributions to framing of policy.

Two of these projects — AITEG3, SETI4 — have sought, through a variety of modelling exercises, to assess prospects for economic capital accumulation (growth) and human capital mobilisation (employment) in the light of technology change and globalisation trends.

The accompanying measure LGEGO5 is principally an assessment of the pertinence and credibility of different classes of theoretical models from economics for exploration of long-term growth, technology change and distributional equity issues.

As already mentioned, the question of economic performance potential cannot be considered without reference to environmental and social factors. The SUE6 project explicitly appraises European economic growth potential with reference to environmental, technology change and employment considerations; we discuss this further in Section §5. While these projects are only a microcosm of a much greater contemporary literature, they have brought out the following distinctive points:

u Modelling methodology: There is a considerable diversity of, and controversy about, modelling approaches for addressing growth and employment prospects, innovation dynamics and performance on the interfaces with environment and society. Across this diversity, it appears — as discussed notably by LGEGO and also by ERPNET (see below) — that so-called disequilibrium and evolutionary modelling frameworks are more pertinent than conventional ‘neoclassical’ equilibrium approaches.

u Economic system change: Technological and structural economic change is a complex evolutionary process (cf., SETI, AITEG; see also ERPNET and GOV-PAR later on) and, for this reason, although a spectrum of evolutionary modelling approaches have yielded interesting and credible results, robust conclusions from simulations of policy effects and future states tend to be qualitative rather than quantitative (that is, in terms of directions of change and orders of magnitude of different causal factors).7

§4.2 EMPLOYMENT, GLOBALISATION, TECHNOLOGICAL CHANGE... The SETI project — Sustainable Growth and Employment Creation in the Technological Integration of the EU Economy — focused on the impact of the globalisation of technology, the development and diffusion of Information and Communication Technologies (ICT) and the rise of business services on national patterns of specialisation and economic growth in Europe. In this context, a disequilibrium model was developed and tested in which economic growth depends on technology production and diffusion and business services, while technology and business services interact in a way that can create virtuous and/or vicious circles of growth. The main modelling findings that emerged from the project regarding the interaction between technology accumulation and diffusion, business services and economic growth were:

n the strategic role played by innovation (and, in particular by human capital and ICT expenditures) in economic growth;

3 AITEG = Assessing the Impact of Technology and Globalisation: The Effects on Growth and Employment. 4 SETI = Sustainable Growth and Employment Creation in the Technological Integration of the EU Economy. 5 LGEGO = Sustainable Development; long-term growth, equity and governance. The major report is titled Growth Theories Revisited: Enduring Questions with Changing Answers. 6 SUE = Modelling a Socially and Environmentally Sustainable EU. 7 This argument is further supported by findings of several other projects at the interfaces of social and economic concerns, notably ENEPRI (see Section §7 below).



n the importance of business services (both domestically produced and imported) for economic growth; n the two-way interaction between the rise of business services and technology accumulation; n the link between the structure of the manufacturing sector and a country’s capability to produce and import business

services. According to the model, economic output is positively correlated with the stock of technology, the stock of physical capital and labour, and domestic and imported services. Both domestic and imported services are positively correlated with output and technology accumulation. The policy simulations thus produce results suggesting that enhancing the availability of business services and the accumulation of knowledge can significantly increase EU economic output. These benefits might, in turn, be obtained by means of both a better regulatory environment and greater technology diffusion. Higher ICT investment and, especially, higher availability of human capital would be instrumental to such a strategy. A three-pronged strategy — deregulation, deeper integration, and more effective technology diffusion — could (according to the model) generate a virtuous circle of output growth, provision of services, and knowledge accumulation in Europe, very much in line with the objectives of the Lisbon strategy.

The SETI project then asked, if this type of virtuous circle potentially exists, what are the determinants of production and trade in business services and of technology accumulation and diffusion on which it is possible to act in order to move European countries on a higher growth path? Two SETI modelling results with important policy implications are:

§ Production and trade in services are enhanced by European countries having similar (and low) levels of regulation. This result signals the positive impact of low regulatory barriers as well as of regulatory harmonization directly on services and indirectly on technology accumulation and growth.

§ High importance of the structure of the manufacturing sector and of ICT expenditures. Policy interventions that focus exclusively on favouring the development of business services without recognising their strong interdependence with some manufacturing activities are bound to be unsuccessful. A high priority could be given to increasing ICT expenditures in Europe since they impact, not only on technology accumulation and diffusion directly, but also on countries’ ability to produce and import business services and, thus, on economic growth.

The AITEG project — Assessing the Impact of Technology and Globalisation — has also focussed on economic growth prospects and, more particularly, on perspectives for employment. The report authors note that official unemployment has remained at high levels across Europe for several decades (becoming the backdrop now for an entire generation), this being ‘high’ relative both to Europe’s post-1945 track record of generally full employment, and to the rest of the industrialised world. There have been a number of suggested explanations for this, with correspondingly different policy implications. Two of the main factors under discussion are, firstly, the roles of globalisation and increased economic competition from outside Europe, and secondly, the roles of technological innovation and ‘jobless growth’. In this regard, the AITEG project research on innovation spanned three main areas:

§ Theoretical and empirical analysis of the effects of technological change;

§ Patterns and impact of technological change in European industry, including evidence from European Innovation Surveys;

§ National studies on innovation in industry and services.

One of the challenges has been to appraise the idea, a “received wisdom” in some circles, that innovation has an automatically positive impact on economic performance. The AITEG project concludes that careful theorising and empirical studies combine to suggest clearly that different innovation strategies, which characterize particular sectors, may have diverse effects on economic growth and employment patterns, and on the associated developments in international investment and production.8 A spectrum of conceptual and analytical models of innovation have been considered, that make different hypotheses about the constraints posed by existing economic structures, the competencies available, the strategies pursued by firms and governments, etc. Four main types of innovation models are identified as having interesting insights for policy:

§ ICT focused. In this model, innovative efforts are concentrated on the activities based on ICTs and on their applications. The technological opportunities of ICTs are the driving force of growth, although operating from a rather narrow base of technological and economic activities. The ability to extend their impact and applications across a wide range of economic activities is a key test for success.

8 This result is strongly corroborated, with a quite different modelling approach, by the SUE project (see Section §5 below).



§ Learning based. Here the key process shaping technological and economic change is the learning activity by people and organizations. In the place of technology-driven growth, change is shaped by the evolution of competences, by the upgrading of economic activities, production organization and human skills, and by more complex social processes related to specific economic and social priorities. This is likely to lead to different qualities of economic growth and an improved quality of employment.

§ Product innovation based. In the firms and industries with well established markets the opportunities of technological change can lead to a strategy based on the introduction of product innovations and the expansion of new markets, often integrating applications of ICTs. This can represent a dynamic reaction to competitive pressure, leading to growth in both production and employment.

§ Process innovation based. This model applies to the more traditional sectors of the economy, where the pressure from competition leads to a search for cost cutting and process innovation. Such a course is likely to lead to restructuring of firms, concentration of industries, modest growth and large job losses.

What the AITEG project brings out is that each of these models is addressing (or presuming) different types of innovation and, hence, identifies different consequences for economic and employment outcomes. However, any one type of innovation activity will interact with a set of other processes (affecting the sources of innovation in knowledge and learning; the global reach of technological change; the link with the economic structure and with the demand side, etc.). The variety of these factors and of the strategies that might be pursued by firms and governments suggest that no simple link can be claimed between innovation and growth performances in the context of the current changes in technologies and economic structure. The economic and employment outcomes of technological change are the result of complex social processes where institutions, government policies and social relations all play major roles, alongside the developments in technology and the strategies of firms. With this backdrop:

§ A robust finding of AITEG is that technological unemployment cannot be neglected as a possible outcome of current technological change, especially in Europe. Some people might say that this is obvious. Yet it is useful to have a confirmation that, precisely because of the variety of plausible and pertinent models and the wide spread of innovation/employment outcomes that they can produce, there is no theoretical justification for postulating, as a ‘general’ rule, the existence of some automatic mechanism ensuring that a national (or European) economy is able to fully compensate for innovation-related job losses.

§ A further robust finding of the comparative modelling is that the sectoral structure of a national economy is important. The sources of job creation and destruction are specific for individual manufacturing and service industries and such structural factors are therefore important determinants of countries’ employment performances. This has high policy significance given that, at present, activities based on ICT and characterizing the ‘new economy’ are relatively concentrated in just a few countries.

§ Finally, the AITEG project results suggest that the ‘new technologies’ are generating strong specificity for services in both the innovation and internationalization fields and indeed even more in the interface between the two. This means that analysts can no longer use for services the conceptual frameworks developed in past decades for manufacturing. Accordingly, more research is needed on the sources of productivity growth in the economy and on the impact of the ICTs on: productivity; internationalisation processes, modes and degrees; and the impact on the international division of labour. In order to monitor and interpret such trends, there is also a need to develop statistics that take account of the ICT-intensity of products and processes on the industrial classification side.

One important social policy recommendation made by the AITEG project, which comes as a corollary of observations and conclusions of innovation process diversity, is that a broad view of learning and human capital formation is appropriate, one that (i) avoids the simplistic request for an educational system that is closely targeted to short-term needs of firms (but that does not assure resiliency of the workforce to adapt to changing circumstances and opportunities) and (ii) includes specific actions for the problems of the ‘low skilled’ components of the workforce. We will return to this point later on (Section §4.4).

§4.3 ECONOMIC ANALYSIS AND ECONOMIC CHANGE Recognising variability of economic system dynamics from country to country and through time, and the significance of different institutional and ‘cultural’ factors (networks, attitudes to innovation, etc.), has important consequences for the ways that economic analysis might be employed in large-scale policy analysis. The AITEG conclusions in this regard, and their suggestions about the importance of a permanent learning capacity are corroborated, at a different level of abstraction, by the findings of LGEGO.



The work of LGEGO is principally in the form of a literature review centring on the question of the robustness of insights offered by different strands of economic theorizing on the questions of “longer term aggregate economic growth” and the roles proposed for policy (or regulation) in pursuit of distributional (equity) goals. The main methodological conclusion, presented in the report titled Growth Theories Revisited: Enduring Questions with Changing Answers, is in support of three distinct approaches as complementary: economic evolutionary theories, the ‘endogenous’ growth theories treating innovation, power relations and policy in integrated ways, and systems approaches to economic history (see textbox). These three approaches each express and produce a different “class” of key concepts and results. They have in common that, in applications, the closer their practitioners come to reflect the actual complexity of aggregate dynamics in growth processes, the more difficult it becomes to establish analytical tractability and to identify generally valid conclusions.

This constitutes, according to the LGEGO argument, a clear indication of the limits confronted by economic analysis, especially in adequately interpreting the complex processes of socioeconomic reproduction.

The emphasis on institutional aspects of economic system change, and its analysis is shared by the great majority of the projects here under review, and will not be specifically rehashed here.

The argument in favour of economic evolutionary theories is also found in other projects, most explicitly in the case of ERPNET which, addressing needs and prospects for research in the domain of globalisation, economy and ecology, also engages a substantial methodological review.9 Asking the question ‘Which framework is most suitable to study globalisation and the environment?’, the pertinence of evolutionary analysis perspectives is presented in the following terms:

§ Quantitative cost-benefit analysis was argued to have clear limits in the study of processes at a global scale, due to its restrictive assumptions and lack of complete and reliable data on costs and benefits. This was illustrated for the case of climate policy

§ Similar restrictive assumptions apply to optimal growth theories, which use the same basic theoretical framework as cost-benefit analysis.

§ The complex systems approach and integrated assessment approaches instead lead to a sort of qualitative cost-benefit analysis or multicriteria evaluation. In the context of climate change, this was argued to support the use of a precautionary principle.

§ Spatial analysis including land use modelling seems less restrictive and suitable as a descriptive-predictive approach. It allows a fruitful linking of insights from landscape ecology and spatial and environmental economics at a disaggregate spatial level.

§ Finally, evolutionary analysis [...] is the most innovative approach available, which so far has received relatively little attention within the study of globalisation and the environment, [and] is the only approach that can explain and predict processes of structural change. These are inevitable over a sufficiently long period of time, especially given the interaction globalisation and global environmental change. It therefore seems appropriate to devote serious and special attention to an evolutionary analysis of globalisation and the environment.

This general argument in favour of evolutionary perspectives has several important corollaries for policy advice and the role of economic science. One of these is the acceptance of historical variability and of the pertinence of historical perspectives on institutions and change. Another is process of learning and collective intelligence

9 ERPNET = Establishing a Multi-Disciplinary Thematic Research Network on Globalisation, Economy and Ecology. The main report is titled Globalisation, Economy and Ecology: Foundation and Orientation for a Research Action Plan. We discuss the environment/economy interface aspects of ERPNET in Section §5 below.

The three most relevant approaches in growth theory [according to LGEGO]

n economic evolutionary theories based on continuing disequilibrium conditions and the neo-schumpeterian interpretations referring to the coevolution of innovations, institutional changes and of industry structures, leading to situations characterized by heterogeneity, uncertainty, path dependency and the complex passage of bounded rational micro conduct to more aggregate phenomena of innovation driven growth;

n the “new” formal modelling approaches on growth dynamics based on counter-neoclassical assumptions about the existence of increasing returns, externalities, market power, the endogenous character of technological progress and of innovative activities together with the acknowledgement about the critical role of policy making in shaping the prospects of economic growth; and

n historical analyses of the time-and-space particularities of growth dynamics based on holistic analyses of multi-directional causal relations which combine quantitative performances with qualitative changes in growth experiences as the latter are driven by innovation processes embedded in specific economic, political, social and science and technology conditions.

(Source : Growth Theories Revisited: Enduring Questions with Changing Answers)



through confrontation of analytical perspectives that may each carry insights but no one of which should be given exclusivity.

One of the most distinctive themes of the LGEGO review, is its strong argument for the pertinence of economic history which, it is argued, can be salutary for stimulating reflection about the limits of specific modelling approaches, about the factors that may determine pertinence or not of a modelling approach and, by corollary, for the exploration of alternative modes of reasoning.

Economic history can serve as a catalyst in re-orienting and stimulating theory and applied work so as to break new ground both analytically and conceptually. Historical analysis can shed light on the presence of major differences/variations in economic growth performances or on the reasons behind the non-recurrence of key performance experiences. For example, in addressing growth questions, economic historians tend to stress two key considerations: n Relations between technical change and organizational/institutional changes, and n Relations between, on the one hand, economic conduct and performance and, on the other, social and political changes

at other levels of society. In this regard, economic history can offer the necessary ‘depth’ of perspective for the comprehension of similarities in growth performances along cyclical movements and epochal waves, even while clear differences might appear over relatively shorter time spans. But also, the depth of time availed through the prism of economic history can disprove presumptions about the “universality” of applications projected by conclusions reached on the basis of formal modelling (see textbox).

LGEGO addresses at length, within this comparative and historical angle of reflection, the question of macroeconomic policies, growth and ‘equity’ (meaning, in this context, economic income and wealth distribution). As sustainability relates to inter and intra generational equity, the question whether or not there are any ‘general’ lessons from economic growth theory concerning regulation and distribution, is rather important for today’s considerations. As the LGEGO review points out, several strands of economic analysis tend to favour the view that inequality, especially wealth but also income inequality, results in growth enhancing conditions. This view is usually founded on three main arguments, each supported by very specific assumptions.

n Based on the hypothesis or on historical evidence drawn from the not very recent past, that the propensity to save of the rich is higher than the lower income brackets, it is concluded that more unequal societies will grow relatively faster than more equal ones.

n The presence of investment indivisibilities in setting up new industries and in applying major innovations call for a significant scale of resource allocations and/or of sunk costs. Consequently, in the absence of well functioning capital markets, the pursuit and realization of such growth inducing major investment undertakings will depend upon the extent of wealth concentration. And this because, given aggregate resource availabilities, the presence of wealth inequalities will assure the necessary investment capabilities to cover needed entrepreneurial commitments.

n An incentive argument suggests that tax burdens can lead to the reduction of returns to saving, it is argued that higher taxation lowers the incentives to invest and to accumulate capital. Consequently, the corresponding growth rates are adversely affected as a direct outcome of the fiscal burden being applied.

The LGEGO review asserts that recent empirical studies based mainly on cross-country regressions, challenge these sorts of premises, and the conclusions reached, about the presence of a fundamental trade-off between economic efficiency and economic equity. Some of the findings of the recent studies strongly suggest that there can be a negative correlation between average growth rates over time and indicators of economic inequality (income, wealth, wage, etc.)

A number of analytical arguments have been offered with reference to these more recent empirical findings, in an attempt to interpret development paths which express successful self sustaining growth patterns linked to greater equality and, thus, to identify conditions (institutional? technological? societal?, etc.) that might be favorable to the reconciliation of growth with equity objectives. LGEGO identifies four main areas of such arguments, that either refute the traditional hypotheses upon which the policy trade-off between equity and efficiency is being based or introduce key additional considerations. These four areas of alternative arguments involve considerations which refer to:

Seminal work on the historical perspectives of so-called “economic backwardness” and the determinants of “catching-up” processes has stressed the critical importance of pre-existing institutional bases and of the effective implementation of needed changes in organizational norms and practices. Convergence is neither automatic nor costless (as was, and still is, often assumed by ‘orthodox’ development theorists). Rather, major institutional breakthroughs can prove catalytic in prompting and accompanying high growth performances. This argument has important consequences for avoiding simplistic thinking about the dynamics of ‘harmonisation’ envisaged under EU structural funding and the Accession process, and also for thinking about any prospects of a “transition towards sustainability” for European economies as a whole.



(a) Dis-saving and/or unproductive investments by higher income brackets, especially the very rich;

(b) Lower levels of human and social capital attained through inequality, especially when relative and, even more so, when absolute poverty increases;

(c) Distorting demand patterns (both in consumption and investment behaviour) through heavy import leakages when inequalities are high; and

(d) Political implications in non-egalitarian societies that provoke greater uncertainties and/or social disturbances. These uncertainties and conditions, which induce social unrest, distort savings and investment patterns; they also undermine the consensus necessary for the introduction of growth inducing reforms.

Without going into details, the lesson that can be taken is that if there is no clear basis for asserting a growth/equity tradeoff within the framework of traditional economic growth theory alone, the wider but analogous question of seeking to reconcile multiple objectives in sustainability policy remains a legitimate and open one.

§4.4 COMPLEXITY AND INSIGHT IN ECONOMIC ANALYSIS This brings us, to close the section on ‘economic aspects’, to the importance of social learning and collective intelligence through confrontation of analytical perspectives that may each carry insights but no one of which should be given exclusivity.

The AITEG and LGEGO reviews have both strongly concluded that a diversity of observable economic change processes — e.g., innovation and employment dynamics or aggregate growth patterns — is to be expected as contingent outcomes of the complex dynamic processes by which socioeconomic systems reproduce themselves over long time periods. The difficulty of simple or ‘general’ theoretical accounts is intrinsic to the field. In order to understand and explain the phenomena of economic development and change, and to provide robust policy support, a complex approach to theorising is therefore required. Some key questions can be permanently posed (e.g., with respect to the forms of innovation and the conditions of innovation uptake, or the “proximate sources” of economic growth and their “deepest causes”), and these enduring questions constitute challenges to which economic theories and empirical analyses must respond — contingently — by means of ever-changing answers.

The fundamental differences in the conclusions reached by theoretical constructs can, quite often, be traced to the quite distinct conceptual foundations and key assumptions upon which competing schools of thought are erecting their theoretical paradigms. As pointed out by several project reports under review, since the theories behind the varying answers organize our own thoughts and perceptions as to what constitutes “economic reality”, the corresponding implications are neither neutral nor limited to merely theoretical concerns. On the contrary, the presuppositions at the outset of analysis carry through to conclusions reached on the basis of specific theoretical constructs, which in turn can assume a major role in shaping decision making or, at least, in rationalizing decisions and circumstances which serve specific objectives and interests. Sometimes it is possible to give strong reasons for rejecting or limiting the scope of pertinence to specific approaches (although this may be resisted due to intellectual and political inertia; see example given by LGEGO in text box). But often, there is a plurality of analytical perspectives that each carry important insights but no one of which is sufficiently comprehensive or robust to be accorded exclusivity. In such cases (which are the ‘general rule’), it is important to develop a capacity for dialogue and learning through the ‘interfacing’ of different theoretical perspectives.

This is why there emerges, as a general finding from this part of the review, the rather important (but not entirely new) conclusion that economics science advice for policy cannot be separated from deliberation. That this is not a new finding can be gauged, in a formal sort of way, by the fact that a Nobel Prize in Economics was awarded to Kenneth Arrow for (among other things) work first published in 1950 that demonstrated the ‘impossibility’ of establishing general rules for deciding problems of ‘social choice’ in which people’s interests and value systems

INTELLECTUAL INERTIA

In the second half of the twentieth century, it took more than three decades for prominent theorists trained in the neoclassical tradition to recognize conclusively the inappropriateness of their growth theories. It was only after digesting the empirical evidence and the theoretical critiques that they came “…to reject all the available growth models throughout the 1950’s, 1960’s and the 1970’s”. Meanwhile, the mainstream neoclassical paradigm had, after dominating economic thinking for practically a century long period, come explicitly to exclude pre-existing interpretations which contradicted its assumptions and to marginalize alternative venues of theorizing on economic growth issues. (source: LGEGO)



differ (notably about the basis for societal choices). In brief, what Arrow showed was that, if the attempt is made to advise on what is “best” for the society on the basis of a “general” rule (or set of criteria), then the choice will be characterised by either authoritarianism (viz., “dictatorship” by one person or interest group) or incoherence (internal inconsistency). If the attempt is made to avoid the flaws of dictatorship and inconsistency by weakening the rule system, then either the advice will be indecisive or the possibility is opened up of outcomes with features that are widely considered to be fundamentally socially unacceptable.

What is ‘new’ relative to the Arrow result, but really not all that new for economic science, is the phenomenon of scientific ‘complexity’ and its cousin uncertainty. We are concerned here with classes of situations characterised by three features that, as complicating factors for policy advice, reinforce and interfere with each other (see textbox). These are

§ Scientific knowledge — here economic science — advising of irreducible uncertainties and/or irreversibilities associated with courses of action;

§ Plurality of value systems, political and moral convictions, and justification criteria within society;

§ High decision stakes including economic interests and strategic security concerns for nations or entire communities (e.g., long-term high levels of unemployment and poverty), and also — as will be discussed more in sections that follow — consequences of environmental change for public health, organism integrity and future economic possibilities.

These features, characteristic of what Rittel and others in the ‘soft systems’ tradition have termed “wicked problems”, make difficult to formulate and justify simple rules of action. Apparently simple desiderata such as “maximise growth” or “maximum net benefit” (with monetary cost-benefit analysis), or democratically “that the majority prevail”, or (more recently) “avoid risks” (such as the precautionary principle applied to technology innovation), all fall down: — because, either they do not adequately address the decision issues (viz., they do not furnish a clear “counsel” about what to do), or, the way that they do this does not have plausibility or acceptability to key stakeholders. There is no clear-cut bridge between knowledge and right action.

This does not, however, mean that a reasoned base for policy is impossible. What is means is that, for “wicked” problems, reasoning must be employed in a complex deliberative way. Forms of deliberative and regulatory procedure must be established, that “relativise” the divergent scientific contributions, decision principles and stakeholder positions, while not seeking entirely to dispose of any of them. The challenge — here to economists, as to policy support science everywhere — is to work with a permanent "argumentation" between the several different (and sometimes contradictory) positions. In the words of Rittel (1982), an analyst in such circumstances needs to be like a “midwife of problems”, helping to raise into visibility, “questions and issues towards which you can assume different positions, and with the evidence gathered and arguments built for and against these different positions".10

As will be expanded in later sections of this Synthesis Report, these sorts of points when taken across to the environmental and social facets of the “sustainability” terrain, remain entirely valid, especially in view of the longer timescales, complexities of environmental system change and intergeneration equity aspects of natural capital depletion considerations.

10 The citation here is to H. Rittel, H. (1982), "Systems Analysis of the 'First and Second Generations'", in: P. Laconte, J. Gibson & A. Rapoport (eds.), Human and Energy Factors in Urban Planning, NATO Advanced Study Institutes Series, Martinus Nijhoff, The Hague, pp.35-63. In fact, it may be seen that the compilation of this review report follows deliberately this precept of a plurality of insights, each limited and open to question in itself. As outlined in Section §1 above, we develop our review of project results in terms of the different “facets” of sustainability, where we try to highlight the partial insights as ‘candidates’ for collective intelligence and then to address, in a dialectical process, the question of the extent to which (and the conditions under which) they can be reconciled with other partial insights or appear to be in contradiction with other partial insights. We return to this deliberative perspective in Section §8 concerning governance and in Section §9 bringing together key research recommendations.

COMPLEXITY, SUSTAINABILITY AND EPISTEMOLOGY Because this is a fundamental point for the angle of attack adopted for this review/ synthesis as a whole, of projects, we mention a minimum of relevant cross-references. — This three-point formulation is close to that developed by Silvio Funtowicz and Jerry Ravetz to characterise the situations where a “Post -Normal Science” practice may usefully be applied. See for example, S. Funtowicz & J. Ravetz (1991), “A new scientific methodology for global environmental issues,” in R. Costanza (editor, 1991), Ecological Economics, Columbia University Press, New York, pp.137-152. — A didactic exposition of the complexity/impossibility theme, in the context of sustainability and environmental governance, is found in M. O’Connor M. (2002), ‘Social Costs and Sustainability’, pp.181–202 in Daniel H. Bromley and Jouni Paavola (eds., 2002), Economics, Ethics and Environmental Policy: Contested Choices , Blackwell Publishing, Oxford (UK) & Malden (MA, USA). — Some of the underlying science and social science epistemology issues are mentioned in M. O’Connor (1999), “Dialogue and Debate in a Post -Normal Practice of Science: A Reflection”, Futures, 31, pp.671-687.



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§5.1 THE ENVIRONMENT AND SUSTAINABILITY As evoked already in Section §3, the systems approach to sustainability postulates an asymmetric interdependence of the economic, social and environmental spheres: economic activity is embedded within the social sphere; and human community (including the activity of the “economic sphere”) is materially embedded within the biosphere. The “economy”, often the principal focus of development policy discourses and indicators, depends for its viability on the vitality of the interpenetrating social and environmental spheres. The keynote of the contemporary sustainability literature, since the precursors of the 1960s, is the identification of environmental systems as “assets” — a sort of “natural capital” — that are both limited and fragile and whose degradation can be irreversible.11

In the diagram below, the environmental sphere is represented by the lower box and the economic sphere is represented by the upper box. Analyses of the interface between the economic and environmental spheres can, as suggested by the arrows, be developed in terms of the dialectically opposed notions of environmental pressures and environmental functions/services. Governance on this interface seeks to ensure, as complementary outcomes: (1) economic welfare through production of economic goods and services as emphasised in traditional economics, and (2) the permanence of an ecological welfare base through assuring maintenance of environmental functions.

Economic production and infrastructure (Internal Organisation)

Economic pressures “on” the

environment

Environmental functions/ services “for” the

economy

Geophysical and ecological processes and systems (Internal organisation: “functioning of Nature”)

Individual and societal well-being

Ensuring a respect for conditions of natural and social system integrity upon which long-run economic activity depends, thus appears as a key precept for sustainability policy. To the extent that the “culprit” is ill-advised economic activity (with its “negative impacts” on social and environmental systems), it follows that an essential component of governance for sustainability must be the regulation of the economic sphere in relation to the two other spheres.

During the 1980s, the terms “strong sustainability” and “strong criterion of sustainability” were coined to signal the guideline of maintenance (non-negative change) in the stock of natural capital, this criteria being set out as a complement to the goal of accumulation (or, at worst, maintenance) economic capital. Ecological economists have argued, from physical and life sciences perspectives, that ready substitutability between natural and manufactured capitals should not be presumed. For example, thermodynamic irreversibility implies the impossibility of substituting, beyond certain well-defined limits, away from environmental sources of ‘free energy’ as production inputs. Substitution may be reasonably easy between energy types, but this relative ease applies only within the class of energy sources not between energy and other production inputs. Ecological systems have complex spatial structures, and are interlocked with geophysical processes (such as hydrological cycles) that extend over large (sometimes planetary) distances.

11 Concerning the social sphere, the analogous argument is that the gamut of the cultural forms, symbolic bonds and community infrastructures constitute a sort of “social capital” upon which economic performance capacity also intimately depends. We return to the social dimension in Section §6.



Since there is no meaningful way of aggregating the grand diversity of natural resources, environmental services and ecosystems, in practice the “strong sustainability” concept serves a didactic role, to signal the importance of attention to maintaining environmental capacities or functions. Policy analysis will then focuss on the identification of categories of ‘critical natural capital’ — classes of environmental resources or capacities which, at a prescribed geographical scale, perform important ‘environmental functions’ and for which no substitute in terms of manufactured, human or other natural capital currently exist — whose stocks ought to be maintained at or above identified minimum levels. Thus, the maintenance of environmental functions (which can be justified by a variety of ethical or environmentalist attitudes) is seen as not only an affirmation of environmental values but also as a functional pre-condition for economic and social sustainability.

Such environmental sustainability considerations are already important inputs into many development policy targets, evaluation procedures and objectives. For example, once environmental standards or thresholds are set, it is possible to apply forms of multi-criteria and cost-effectiveness analysis to quantity the trade-offs between economic output and environmental performance goals. Environmental policies can be formulated by, first, scientific and political work to determine environmental standards or norms (for example, for pollution emissions or natural resource consumption) and, second, to find the least-economic–cost way of achieving the defined norm(s). In practice, the setting of norms can have a highly controversial character and the quantification of costs and benefits (and their distribution across different constituencies distributed through space and time) can be very sensitive to, among other things, evaluation frameworks, model specifications, timescales and so on. (This returns us to the considerations of complexity and deliberation already evoked in Section §4.4 above.) Of the set under review here, two projects — ERPNET, SUE — have specifically addressed the question of analytical systems modelling modelling to explore prospects of reconciliation of economic with environmental performance goals. We review their character and policy relevant findings in this section. Three other projects — POSTI, SUSTRA and GOV-PAR — evoke the environmental dimensions of development with case studies and institutional analysis in a discursive way and bring out a wide variety of considerations across the set of SEG interfaces. We reserve discussion of these latter project’ findings to a later section, under the themes of inter-disciplinary integration and governance (Section §8 below).

§5.2 GLOBALISATION, ECONOMY AND ECOLOGY Sustainability is simultaneously a global scale challenge and a multitude of local, territorial and national scale challenges. The question of framing research strategies to take up this multi-scale challenge was addressed notably by ERPNET12, an accompanying measure whose purpose was to explore options for bringing together the different scientific disciplines involved in the research areas of globalisation, economy and ecology in an integrated manner. Its principal product — the report Globalisation, Economy and Ecology: Foundation and Orientation for a Research Action Plan — develops a set of arguments, with sectoral examples, about appropriate analysis methods for addressing economic and environmental system dynamics.

The starting point of ERPNET is the assertion that economic “globalisation” affects (1) all regional economic trends as well as (2) the state of biodiversity and therefore (3) the constraints and opportunities for national and supranational governance. The analysis of resource-based sectors is proposed as a key facet of the interface between the (global) economy and the environment. These sectors include agriculture, fisheries, forestry, energy supply, mining, nature recreation and water supply. Globalisation will affect their structure, and will in turn be influenced by the development of these sectors. In order to understand the development of particular resource based sectors, environmental, geographical, genetic and institutional dimensions need to be considered in a coherent way.

The report concludes that there is no single accepted theoretical basis that convincingly portrays, for the variety of phenomena under consideration, the linkages between driving forces in sectors at the global level, their translation into socio-economic phenomena at the regional level (such as economic specialisation), and the expression of their ecological impacts at the local level. It is argued that, since no simple and general recipe for such integration is available, a sectoral approach is appropriate. The proposed research strategy thus has a strong focus on “vertical integration” (see textbox below), with discussions particularly of the agricultural sector as a demonstration of this angle of attack. It also discusses analysis linkages to a “higher order driver of ecological impacts” which is climate change.

12 ERPNET = Establishing a Multi-Disciplinary Thematic Research Network on Globalisation, Economy and Ecology. It produced principally a report titled Globalisation, Economy and Ecology: Foundation and Orientation for a Research Action Plan written by Jeroen van den Bergh of the Institute for Environmental Studies at the Free University of Amsterdam.



Overall, the argument of ERPNET is that a good understanding of economy-environment linkages in a globalisation context can be pursued through the use of two related analysis approaches, these being (1) evolutionary or co-evolutionary systems approaches and (2) comparative sectoral analyses.

The evolutionary angle is helpful, it is suggested, at theoretical or conceptual level, as it allows the analysis of structural social-economic changes in the context of environmental change.13 An environmental/economic co-evolutionary framework can thus support model construction, data search and policy design. Key concepts are diversity, innovation, selection, multilevel systems, path-dependence, lock-in, self-organization and emergent properties. Such an evolutionary paradigm opens up prospects of long-term perspectives in the social science of globalisation and environment, as well for consistency with natural science insights on global environmental change. Specific research questions in this context suggested by ERPNET are:

n Does economic growth select certain types of strategies by firms over others, which changes the composition of businesses active in the world economy?

n Does globalisation accelerate technological inventions, innovations and diffusion (also to developing regions) that contribute to sustainable development?

n Does globalisation stimulate convergence of welfare among countries, i.e. lead to a more equal international distribution of welfare?

n Does globalisation lead to a loss of diversity in (local) environmental knowledge, culture and business strategies, notably in resource based sectors, which will hamper adaptation to future environmental conditions?

n Or does globalisation also create new diversity that enhances opportunities for adapting to altered environmental conditions?

n What does it mean that environmental regulation is endogenous in the long run and a global context? In particular, what are the countervailing forces of economic growth (more support for stricter regulation) and more international openness (more fear for competition)?

The second favoured approach is based on gathering information on structural change, as witnessed by changing economic sectors (or sector classifications), sub-sectors, and interactions or even cycles among these. Input-output, network and vertical integration analysis can be helpful here. In particular, the study of raw economic data used to construct national accounts offers potentially much information that can serve as an input to these analyses. The results of these subsequently allow the linking of data on physical flows through the economy to data on decision-making and institutional organisation. This in turn will support an integrated analysis of economic and environmental dimensions of globalisation. Specific research questions suggested are:

n How can we measure the complexity of global product cycles and material-product chains? n What will be the effect of regulation on such cycles and chains? n Is there a shift from market-based interactions among specific activities in these cycles and chains to integrated,

planning-type of interactions? n What are the implications, if any, of this shift for international trade and distribution of activities?

§5.3 SCENARIO MODELING OF ECONOMIC-HUMAN-ENVIRONMENTAL CAPITAL TRADEOFFS Whereas the ERPNET work is essentially discursive and set at the level of programmatic intentions, the SUE project had a more reduced and more analytical focus, addressing economy/environment and employment dimensions of sustainability in multi-sector analytical modelling terms.14 The SUE modelling very didactically

13 This argument is consistent with economic methodology conclusions from LGEGO, as noted earlier. 14 SUE = Modelling a Socially and Environmentally Sustainable EU.

VERTICAL INTEGRATION refers to the process through which sequential processes previously organised in independent firms are being co-ordinated more closely or even integrated within one formal organisational structure (firm or business). It thus covers more and less formalised arrangements, ranging from temporary contracts and joint ventures to permanent take-overs and mergers. Vertical integration can occur backwards or forwards, depending on the perspective of the initiating or dominating firm or activity.

An evaluation of vertical integration in resource based sectors involves the comparison of three separate effects, namely efficiency losses through higher prices or foreclosing rival firms through using market power, gains from lower transactions costs through co-ordinated control, and changes in environmental externalities due to different techniques and scales of activities. Whereas from a purely environmental perspective vertical integration may sometimes be undesirable, a complete economic-welfare analysis, involving the three impacts mentioned, can give rise to a different evaluation.



addresses the keynote question of environmental-economic sustainability, namely, the reconciliation of economic capital accumulation (growth) and human capital maintenance (employment) goals with criteria of wise use or husbandry of natural capital (most particularly energy). The central task of the project was the development of a relatively aggregated multisectoral model for comparative scenario analysis, allowing exploration of prospects of an economically, socially and environmentally sustainable development for Europe. The scientific objectives were to:

§ develop a better understanding of the economic dynamics and their physical base, as well as of cost-relevant resource-based economic feed-back mechanisms and rebound effects,

§ assess the impacts of implementing different strategies towards sustainable resource consumption upon consumption, investment and economic growth potentials,

§ assess the related labour effects of different policy scenarios, based on economic developments

§ analyse strategies towards sustainable economies, by offering the opportunity to compare policy strategies as refers to their respective impact on growth and employment,

§ develop strategies to enhance the move towards sustainable production and consumption patterns while taking care in particular of the employment effects,

The policy/decision support by the model is considered as being delivered through different scenarios and their comparison. Therefore the SUE team formulated core questions in terms of the themes for the scenarios to be developed:

(1) Two different reference scenarios (with a reference period from 1995 to 2020) against which to compare all policies tested. These are (1a) a business-as-usual-scenario where trends observed for the validation period (1985-1995) have been extrapolated into the future, and which serves as a sort of benchmark of the (un)sustainability of current trends in Europe, and (1b) a status-quo-scenario where 1995-values have been maintained until 2020.

(2) Two pro-active policy scenarios that incorporate a spectrum of the sorts of changes that would need to be introduced into the direction the EU-15 economy development if negative consequences on natural capital and employment are to be avoided.

As an example, one of the pro-sustainability scenarios tests out, within the limits of the highly aggregated model, what would be the effect if the whole of the EU agricultural area was converted to organic agriculture. According to the scenario, organic agriculture (as opposed to the business-as-usual intensive farming) is well positioned to balance nutrient flows, and the currently set-aside land could be used for organic farming (+15% as opposed to -20% in BAU). This opens the opportunity to reduce overproduction (in which case, the land required under a 100% organic scenario would be 4% less than today).

The modelling further suggests that, by an appropriate selection of technologies and policies, it is possible to obtain a significant increase in employment opportunities (as compared to business as usual, or even in absolute terms) without damaging the environment or undermining economic capital accumulation (and, by inference, competitiveness). The analysis thus suggests that it might be worthwhile to consider strong support for organic agriculture, due to positive effects on biodiversity, employment, environmental balance and the economically desirable reduction of overproduction.

Two general conclusions can be extracted from this work. First, while the model as used in SUE is not sufficiently well specified for full confidence in quantitative results, there is a convincing demonstration of the value of structural economy-environment modelling for exploring the “opportunity spaces” of future EU economies. In particular, there is a very substantial scope, in technological terms, for achieving reductions in key environmental pressures while maintaining economic capital accumulation. Second, however, it has to be noted that achieving the sort of ‘win-win-win’ result for economic, human and environmental capitals mentioned above requires (in the model) a sophisticated combination of measures that have to be analysed one by one and in their interactions, in order to find the right ‘balance’ that avoids counterproductive systems side effects. It is questionable whether, in reality, such a fine-tuning can be reliably achieved.15 It can more prudently be concluded (echoing also results from AITEG and SETI) that obtaining satisfactory outcomes for employment levels in Europe given prevailing trends in international markets and innovation, is far from assured. 15 Once again, there are echoes here with the methodological arguments of the AITEG and LGEGO projects.

THE SUE SCENARIO APPROACH “The basic question which all policy scenarios were linked to was: By how much would — ceteris paribus — an x-fold reduction of the overall material flows (including energy, compared to current flows) over the next y years, constrain the growth potential of the EU 15 economy? What are the implications for socio-economic variables/indicators such as employment, technology, well-being in terms of material standard of living etc.?”





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§6.1 SOCIAL QUALITY AND THE SOCIAL DIMENSION The “social dimension” has often been the poor relation of sustainability related analyses. Indeed, the question often arises, what do we mean by the “social dimension”. Is it the same as, or different from, concerns with employment, equity and income distribution (etc.) as in economic welfare analysis?

An important group of projects — notably WRAMSOC, DYNSOC, CHER, ENEPRI, ENIQ — have addressed, in social science terms, not only the employment concern but also a host of features that belong to the social dimension, namely notions such as social capital and social cohesion, forms and dynamics of collective identities (family, community, national identity and membership, concepts and realities of reciprocity and obligation, and so on).

The first four of these projects have addressed, at different levels of theoretical abstraction and empirical detail, the present situation and outlook for distribution of income and, more particularly, the capacities of Europe’s existing and future economic systems for material social welfare provision (health services, family support, investment in education, old age pensions, etc.). Effectively they consider social performance or outcomes with reference to (inter alia) economic dynamism (e.g., macroeconomic performance, technology change) as an enabling factor and/or a constraint. We review this work on the social-economic interface in more detail in Section §7 below. These four projects with very tangible social-economic policy focus, are rounded out and in many ways underpinned by the fifth of the projects just mentioned, ENIQ16 whose preoccupation was in some ways more fundamental social science, namely a conceptual framing and operational suggestions for indicators of social quality as a useful tool for scientists, policy makers, practitioners and citizens.

As emphasised in the ENIQ project’s frame of reference addressing indicators of social quality (see textbox), the social sphere (as distinct from the economic and political spheres) is built up essentially through relations of belonging and reciprocity. Lines of tension exist at all boundaries between different classes of collective identity, and also within each class or community. Social policy must, in this general context (which includes, but is not limited to, the intra- and inter-generational equity concerns of sustainability), address considerations of justice and equity at two levels. § The primary level is that of the identification of the classes of community meriting respect and the

specification of the appropriate forms or norms for expression of that respect.

§ The second level then concerns the distribution of access to costs and benefits (viz., poverty, fairness or unfairness in the distribution of opportunities and risks, etc.) within each broad class.

ENIQ’s work focussed, in both theoretical and empirical terms, on the development of indicators by which to measure — that is, to operationalise — four key concepts considered to be conditional factors determining social quality: socio-economic security, social cohesion, social inclusion and social empowerment. This meant, among

16 ENIQ = European Thematic Network on Indicators of Social Quality.

COMMUNITIES, SOCIAL BEING AND QUALITY OF LIFE

In the ENIQ* project, social quality is defined as:

“... the extent to which people are able to participate in the social and economic life of their communities under conditions which enhance their well-being and potential....”

The overall experience of social quality is attributed, in the ENIQ framework, to four interdependent factors:

n Socio-economic security: relating to the material and other resources that are available for the material security (“provision of protection by collective identities”) and for the enhancement of the interactions of individual people as social beings;

n Social cohesion: emerging as a function of collectively accepted values and norms that define collective identities and enable trust and community building [= social capital formation];

n Social inclusion: as a function of the accessibility of institutions, networks and infrastructures that constitute collective identities and facilitate self-realisation of individuals within communities;

n Social empowerment: as a function of individual capacities to engage in and with collective identities in the pursuit of personal and collective goals.



other things, to design a preliminary index of social quality, to identify data gaps and requirements, to create the basis for a new yardstick with which to assess the impact of social and economic policies and to develop benchmarks for social quality. A set of national surveys have provided the first assessment of social quality and the trends affecting it, within the conceptual framework developed by the network. Other scientific objectives related to the processes involved in this work, engagement with wider research and policy communities and dissemination. In addition ENIQ had explicit policy objectives concerning the creation of a explicit theoretically grounded basis for policy making at national and EU levels.

Thus, ENIQ proposes a prototype or preliminary Index of Social Quality. This is in a hierarchically structured format, with the four conditional factors of social quality (as above) which, in turn, are broken out into 18 domains (see table on right), then a total of 50 sub-domains for which there are proposed, in the preliminary version, 94 specific indicators. In this way, a robust tool has been created for a new approach to measuring the quality of the social context of everyday life and to assessing the impact thereon of social and economic developments and policies.

In establishing the foundations upon which to develop indicators of social quality, ENIQ has made some important contributions to social science support for sustainability policy. First of all it re-defined and analysed the four conditional factors. Then, building on these foundations, it has also explored ways of representing the relationship between the constitution of people as competent social actors and their actual experience of social quality. The argument developed is that, underpinning the four conditional factors is a process which, via the constant tension between self-realisation and the formation of collective identities, people become competent actors in the field of social quality. Essential in this process are the rule of law, human rights and social justice, social recognition/respect, social responsiveness and the individual’s capacity to participate.

One important outcome of this theoretically based work and the complementary country studies, is that the ENIQ team was able to highlight differences between social quality as developed in their own work, and the many different quality of life measurements that are employed in policy and academic circles. The purpose, the ENIQ writers insist, is not to downgrade an honourable tradition of quality of life research but to point out ways in which their specific social quality perspective differs from it and to argue how the ENIQ developments help to create a sound basis for policy evaluation and decisions. The essential difference is that, in contrast to the open-ended meta-level idea of quality of life, social quality is theoretically grounded in social relations and measured by outcomes that are defined by the same theory.

§6.2 FROM SOCIAL QUALITY TO SOCIAL ASPECTS OF SUSTAINABILITY A large fraction of the research and networking activities under review in this SYNTHESIS REPORT have addressed questions of equity and poverty, hence questions that, depending on the frame of reference adopted, touch on quality of life or social quality or capacities and viability for specific classes of collective identity. In a variety of ways, indicators of poverty and social well-being have been applied, and complete indicator systems have been designed, for cross-sectional and panel data, covering both the substantive aspects of access to services and economic resources, and the relational aspects — sometimes alluded to under the heading of social capital — such as collective identity and status in communities. This is the case notably:

ENIQ — Domains of Social Quality

SOCIO-ECONOMIC SECURITY: the extent to which people have resources over

time.

SOCIAL COHESION: the extent to which social relations, based on

identities, values and norms, are shared Financial resources

Housing and the environment Health and care

Work Education

Trust Other integrative norms and values

Social networks Identity

SOCIAL INCLUSION: the extent to which people have access to and are integrated into the different institutions and

social relations that constitute everyday life

SOCIAL EMPOWERMENT: the extent to which the personal capabilities of

individual people and their ability to act are enhanced by social relations

Citizenship rights Labour market

Services (public and private) Social networks

Knowledge base Labour market

Openness and Supportiveness of Institutions Personal relations



§ for inter-national economic relations (SUSTRA, REGGLOB, as will be further discussed in Section §8 below), for which key classes of community include the active working populations (businesses and salaried workers) of each country; and

§ for the spectrum of welfare services provision at EU and national levels (WRAMSOC, DYNSOC, CHER, ENEPRI), as will be discussed in Section §7) for which key classes of community include ‘vulnerable’ populations of children, the aged, unemployed people of working age, the sick, invalid or infirm, and so on.

The various exercises of design and production of prototype indicator systems (notably CHER, DYNSOC, ENIQ) have demonstrated the technical feasibility (and fastidiousness) of producing data systems permitting cross-country comparisons; however this work has also highlighted limits to quantitative comparisons due to variety across European societies (e.g., inter-relations between family organisation, household structure, labour market participation, welfare regimes). At a qualitative level, a general finding that emerges from an overview of the analyses of societal change trends is: u Loss of societal cohesion: There is strong evidence of significant, perhaps critical erosion of social

cohesion within and between EU societies.

Notwithstanding the careful attention accorded by the ENIQ project, terms such as social cohesion are used widely and with various meanings. Following the arguments of ENIQ, we must consider societal well-being and, correspondingly, poverty and deprivation, as having both substantive and relational aspects. The substantive aspects of access to services and economic resources — relating to perspectives of material wealth and poverty — have been highlighted previously. The relational aspects such as collective identity and status in communities are at the heart of what here is called social quality and also of what elsewhere is called ‘social capital’, whose erosion (for communities) or deprivation (for individuals) lead to perspectives of social poverty. This leads to the following general observation: u Building communities: Several projects [e.g., WRAMSOC, and also ADAPT] highlight the stresses to

existing community structures due to rapid socio-economic change (EU enlargement, transition to market-driven economies with ‘globalisation’), and suggest the importance of governance innovation and rebuilding communities to cope with new challenges under radically changed conditions. The relational considerations of collective identity and social status [highlighted in the work of ENIQ] apply notably to the domains of international relations and national social welfare provision.

The question of communities and their relations is at the heart of social policy and of sustainability concerns. Sustainability principles often emerge in situations of threats to specific values, communities and interests. Arguments are developed by to justify and “sustain” the various interests under threat and, in some cases, to evoke prospects of a coexistence of different interests and forms of life. Public policy in all domains must designate, construct and modify the frontiers of community within and across which different forms of duty, respect, and solidarity are affirmed or denied. In this regard, the feature that distinguishes the sustainability literature relative to other writings on human centred development is the extension of themes of justice, respect and responsibility to include future generations and also the non-human living world. Sustainability ethics and politics are about stewardship of current wealth with regard to future generations of human society and with regard to biodiversity. The conservation and enhancement of ecosystems as habitats for living biological diversity, may be motivated as much by ethical convictions of respect and coexistence and not just by utilitarian concerns of economic opportunities and personal amenity (see textbox Sustainability’s Stakeholders).

One general way of analysing well-being and poverty prospects is, once the classes of community meriting respect have been specified, to identify directions of action and corresponding indicators for the reduction of life-threatening stresses due either to undue VIOLENCE (of one community towards another) or to INSUFFICIENCY of available means of subsistence.

SUSTAINABILITY’S STAKEHOLDERS (THE CLASSES OF COMMUNITY TO BE TAKEN INTO ACCOUNT)

• THE PRESENT GENERATIONS, which, depending on governance scale and circumstance may be taken to include: —Different groups of 'us' in our respective backyards; — Powerful political & economic elites (with their contested legitimacies, including culture and religion); — the rest of humanity (the poor, the meek, or ‘the people’); — Different regions or territories (defined physically or politically) within a country, continent or the world; — Different cultural groupings (specified along geographical, linguistic, racial, ethnic, religious and other demarcation lines); — Those parts of ‘us’ that are 'internalised' in the marketplace (as actors of the economic sphere); — ... and those parts of ‘us’ that (as actors of the social sphere) remain ‘external’ to the economic sphere...

• THE FUTURE GENERATIONS (with all the same internal demarcations as the present ones).

• The various species, living communities and habitats of THE NON-HUMAN WORLD.



The set of projects reviewed here have, for various classes of community, identified the demarcations (institutional, temporal, geographical) that are applied at different scales, and explored problems of establishing principles of, and limits to, respect and fairness towards other parties. It is important to note, however, the ways that — relative to the full spectrum of conciliation issues that sustainability engages — the coverage of this research appears as rather ad hoc. u Several of the projects have addressed equity challenges for the present and next generations in a

perspective of societal change and welfare reform [e.g., WRAMSOC], but they did this without systematically articulating the challenges across the two “new” stewardship frontiers (respect for nature and the societal long term). Inter-generational justice questions have been addressed only partially: formally but at a high level of abstraction in one contribution [LGEGO], and touched on diffusely in several others [SUE, SUSTRA, POSTI, ERPNET].

u None of the reviewed projects has addressed specifically the human / non-human axis on ethical and cultural planes. Non-human nature does not voice demands directly in political forums. Rather, actors in the social and economic spheres relay societal claims about the “status of nature” and “on behalf of the environment” into the political arena. This question of societies’ claims for and from non-human communities could be made a point for ongoing research enquiry, to be developed as a topic of multi-stakeholder deliberation.

The highlighting of these limitations of coverage does not constitute a criticism of the projects themselves, as this feature stems directly from the specific scope and purposes of the EC research programme concerned. Nonetheless, observation of these ‘gaps’ leads us to the suggestion that there could be substantial benefits to be gained through systematising reflection — both conceptual and empirical — on the classes of community, vulnerability and poverty that, from a “sustainability” transversal standpoint, European social and economic (and environmental) policy should address. This could become an integrative theme for ongoing research on indicators for sustainability and social welfare provision (see Section §9 below).



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At the price of a bit of schematic simplification, we have used themes of the ENIQ project, in Section §6 above, to highlight some specificities of the “social dimension”. This allows us, still in a didactic manner, to set up perspectives for analyses on the “interfaces” of social and economic dimensions. As earlier noted, each of the projects DYNSOC, CHER, WRAMSOC, ENEPRI have addressed, at different levels of theoretical abstraction and empirical detail, the present situation and outlook for distribution of income and, more particularly, the capacities of Europe’s existing and future economic systems for material social welfare provision (health services, family support, investment in education, old age pensions, etc.). We discuss the findings of these projects now in more depth, as distinctive contributions to socio-economic facets of (sustainability) policy science.

§7.1 FAMILY, ECONOMY AND SOCIAL FRAMEWORKS The DYNSOC17 project focused on three major and interconnected aspects of people’s lives – their families, their experience of employment, and their incomes – investigating not only the resources, circumstances and behaviour of individuals, but also the interactions between individuals and the wider social frameworks within which they live. This analysis made use of a fourfold welfare-regime typology that proposes:

• a ‘social-democratic’ regime, found in the Scandinavian countries;

• a ‘liberal’ regime in the UK and Ireland; • a ‘corporatist’ regime in continental Europe; • a ‘residual welfare’ regime represented by

Portugal, Spain, Italy and Greece. Immediately it can be seen that this project, like others of the group we consider here in Section §7, engages us in comparative institutional analysis at both macro (national welfare and employment policy) and micro (family) scales. In some instances, it was found, this 4-fold typology accommodated well the project findings; in other instances the typology was less useful and so the research suggest why it does not fit, and appropriate alternatives (see textbox example).

The DYNSOC findings show, not surprisingly, that national scale social policy does have a high correlation to family patterns, and that welfare policy regimes are significantly linked to forms of well-being and patterns of behaviour.

In some cases, the causality of the links between policy and outcomes is unmistakable: for example, the re-distributive nature of the Scandinavian tax and benefit systems leads to less inequality and lower levels of poverty and deprivation in these countries, compared with others where redistribution is not a primary objective. This is the case when a single year is considered, and the effect emerges even more strongly when multiple short spells, or single longer spells, of poverty are considered. The same is true in reverse for the liberal and residual welfare regimes where higher levels of poverty and inequality are observed both in terms of a single year of poverty and, more markedly, when multiple or longer spells are considered. Thus, in terms of inequality and poverty, a ranking of welfare regime types is observed, with social-democratic regimes at the top, followed by corporatist regimes, with the liberal and residual regimes doing least to address poverty and inequality.

Another case where the links between policy and behaviour are clear is in the labour market transitions of older people. In social-democratic and corporatist welfare regimes where exit routes from the labour market have been

17 DYNSOC = The European Panel Analysis Group on The Dynamics of Social Change in Europe.

WELFARE REGIMES & HOUSEHOLD STRUCTURES: A 3- OR 4-FOLD TYPOLOGY?

The analysis of household structure and family status offers a strong and simple hybrid typology of countries. It consists of three groups rather than the four discussed earlier – and indeed may be viewed as something of a continuum from north to south. The observed groupings were as follows:

§ a ‘Nordic’ grouping, consisting of Scandinavia and the Netherlands;

§ a ‘northern/Protestant’ grouping consisting of the continental European corporatist regimes, plus the UK; and

§ a ‘southern/Catholic’ grouping consisting of the ‘residual’ welfare regimes plus Ireland.

Household size increases substantially from north to south. There are similar contrasts in age of first independent household formation, with, for example, young men first leaving home in Nordic countries on average about five years earlier than in southern/Catholic countries.



developed for older workers (schemes for early retirement, or partial retirement), job to non-job mobility among older workers is higher than in other regime types, but transitions to unemployment are much rarer.

Detailed analysis of employment and unemployment showed that there is a marked degree of commonality between European countries, as well as differences between countries and regime types. Similarities are represented, first, by the low outflow rates, measured over a three-year period, from the states of employment, self-employment, retirement and out of the labour force. Throughout the EU, the proportions leaving their respective states were very low during the three-year observation window. The standard four regime typology is found to work reasonably well for the analysis of these differences. In particular, the proportion of people escaping from ‘exclusion’ – defined as being out of work over a 12-month period – is higher in the residual regimes. The social-democratic regimes have the lowest rates of ‘downward mobility’ into full labour market exclusion. But this is bought, in part, at the cost of lower rates of upward mobility into the fully employed category: liberal regimes have the highest rates of this sort of upward mobility, followed closely by the corporatist, then by the social-democratic, and then at some distance by the residual state regimes.

However, although correlations between policy and behaviour are often clearly visible, causality is sometimes more difficult to establish. For example, there is a marked relationship between the quantity of day-care provided for children by the state, on the one hand, and the extent of women’s participation in the labour market participation, on the other. But is this cause or effect? Does the policy cause the behaviour — i.e. that mothers stay at home or go out to work in response to the state’s provision of day-care — or is it the case, to an extent at least, that state provision of day-care has been driven by demand from working mothers?

§7.2 ROLES FOR INDICATORS AND HOUSEHOLD PANEL DATA A feature of DYNSOC is a set of strong recommendations about the best means of collecting and presenting social and economic indicators on such topics as employment, income, labour market statistics, poverty, and deprivation:

§ The importance of including longitudinal elements. A single spell of poverty lasting less than one year is qualitatively not the same as repeated spells of poverty, or a single spell of several years in poverty – in terms of the probability of making an eventual exit from poverty, in terms of the associated non-monetary deprivation, or in terms of longer-term social exclusion and reduction in life chances. Similarly, a single short spell of unemployment is qualitatively quite different, in a multitude of ways, from repeated short spells of unemployment, or a long-term spell of unemployment.

§ EU integration and the notion of the poverty line. At present, poverty in Europe is measured on a country-by-country basis, using poverty lines defined in relation to the median purchasing power within each country. As European integration progresses, there is also a case for defining a single European poverty line, based on the median household income across Europe as a whole, adjusted for the cost of living. This measure would increase the proportion of people observed to be poor in low-income countries (in southern countries, plus new entrants to the EU) and would decrease the proportion calculated as poor in higher-income countries. A standard European poverty line might accord better with people’s perceptions of their financial situation than the current practice of defining country-specific poverty lines.

§ Poverty and deprivation. There is a high pertinence in developing multidimensional measures of deprivation, rather than simple measures of poverty – be these cross-sectional or longitudinal. Even when deprivation is measured in terms of items of daily living which people cannot afford (where we might expect relationships to be most straightforward), the income-poor are not always deprived, and the deprived do not always have low incomes. In other aspects of life, such as living in high-crime areas, or social isolation, there is virtually no association between poverty and deprivation. Simple measures of poverty should be used alongside broader measures of deprivation; the two types of measures are distinct and both useful. The policy debate has moved outwards, from a central concern with poverty to a more holistic concern about broader aspects of social exclusion; reported statistics should mirror this shift in the debate.

§ Concerning the ‘standard’ definition of economic activity. The practice of dividing people into those employed, those unemployed and seeking work, and those out of the labour force, ought to be reconsidered. This definition may understate the potential labour force of a country, since it assigns to the ‘out of the labour force’ group a sizeable number of people who are not actively seeking work, but who are in fact



potential workers. They are relatively easy to identify by means of straightforward questions, and collecting information on this group may greatly enhance the usefulness of labour market statistics.18

This set of recommendations is reinforced and complemented, in a specific way, by the work of the CHER consortium19 which was established in 2000 to carry out a feasibility study for a data production and dissemination exercise. The overall goal of CHER was the development of a comparative database for longitudinal household studies by harmonizing and integrating micro datasets from a large variety of independent national panels and from the European Community Household Panel (ECHP). The resulting database covers demography, health, education and training, employment and activity, income and expenditure, housing and household durables, and also some aspects of subjective information and social relations. The potential of the CHER database for cross-national research is much greater than what is available from the ECHP alone. For example:

§ It makes possible East–West comparisons.

§ It can supply information about objective as well as some selected subjective living conditions, about the process of change in various areas of life and about the links between these areas and the changes themselves.

§ A complementary database containing key information about macro data, social security and employment policies allows enhanced analysis of social policies.

The CHER database has been and will continue to be used to carry out analyses focusing on understanding the dynamics of socio-economic change in Europe. Researchers can now start with a completed dataset rather than trying independently to harmonize the smaller subset of variables that is most useful for their research topic.

The main advantage of longitudinal panel information compared to cross-sectional information lies in its potential for analysis of socio-economic dynamics on the micro-level. A classical example for illustrating the usefulness of panel data is given in the field of poverty analysis: before the existence of panel studies, cross-sectional data only showed a certain percentage of poverty in year one and another percentage, perhaps the same, in year two. It was impossible to know whether the ‘poor’ population was the same in year one and two, or how many of the ‘poor’ managed to exit from poverty. Panel data shed light on these movements, since they make it possible to follow individuals over a life cycle.20

The added value to the ECHP from the CHER project is that the CHER dataset can serve as a gateway encouraging researchers to explore further research questions available for those country

18 The DYNSOC project reports also note that the precise definitions of unemployment applied for analysis purposes were found to be important in nearly all countries, with significant differences between a definition based on self-reported status, and one based on standardised criteria. Among those who fail to qualify as unemployed on formal criteria, there are also important differences between those who may be defined as outside the labour market, and those who retain some attachment to the labour market – a ‘hidden labour force’. However, these differences appear to be common across (nearly) all countries, with no systematic welfare-regime effects. 19 CHER = Consortium of Husehold Panels for European Socio-economic Research. 20 This responds to a type of indicator need that was also recognised specifically by DYNSOC, see above.

The CHER Consortium pursued the following tasks and procedures to create a comparable

longitudinal database: n develop and (re) define rules for standardization n build up and/or enhance/reconvert the respective panel

databases for comparability n create documentation and user’s guides for the

resulting database n collect and prepare key information taken from macro,

meso and institutional data and documentation n improve information on and access to original country

panel data n enhance the ECHP disposable data for scientific use n enhance the data processing techniques for using panel

data n set-up of an internet information system on household

panel studies n create a bibliographical database n run exemplary panel analyses in different research

fields. Firstly, relevant subsets of variables for selected topics from original panel data were dentified, and these variables were made comparable by taking care to use standard classifications (e.g., International Standard Classification of Occupation [ISCO], International Standard Industrial Classification of all economic activities [ISIC]) where possible, not to collapse values (e.g., for nationality and professions), not to top code variables (e.g., age or income values), and by making a clear distinction between gross and net income components and between original values and imputed values (e.g., concerning income), as well as by standardizing missing codes and imputation flags.

Secondly, a relational database structure was prepared to support the analysis of the data, by naming the variables in a consistent manner (appropriate for panel analyses), creating a set of link variables (e.g., links to spouse, father and mother) assuring the links to the original datasets, ordering variables according to analysis requirements, reducing unnecessary complexities in the original panel files, providing information on household and individual level and guaranteeing a user-friendly organization in file structures.



datasets for which the questionnaire is sufficiently in line with the ECHP questionnaire. For ease of use, CHER includes a table of summary variables that are not directly available from the ECHP. Furthermore, CHER includes more countries than are available in the ECHP and allows East-West comparisons and, finally, more years of data are available for selected countries than were converted into ECHP format.

§7.3 ANALYSIS OF WELFARE REGIMES AND WELFARE REFORM The CHER database, together with information from existing macro data databases and institutional information about social security (MISSOC) and employment policies (MISEP), is effectively a tool for improving (policy) relevant socio-economic knowledge. To see the pertinence of this sort of database exploitation, it is sufficient to consider again in this light the problématique of the DYNSOC project (as above) and, by extension of WRAMSOC and ENEPRI (see below).

§ The DYNSOC project has offered a snapshot of similarities and differences in welfare regimes and patterns of individual and human behaviour, across the European space. Rather importantly, it is concluded that despite the striking and important cross-country differences observed in almost all aspects of the lives across the EU, there is a high degree of commonality across countries in terms of many of the processes involved. In a context of “globalisation” this deeply historically rooted commonality should not be overlooked.

§ The WRAMSOC project is more explicitly focussed on understanding — and thereby influencing — trends of change in European welfare systems (see below). Through a variety of documentary analyses and interviews with policy actors, it has examined changes in a range of policy areas for seven EU countries and also at EU level.

§ The ENEPRI network has carried out work on the subjects of labour markets, enlargement and migration, population ageing: consequences and policy issues; and ageing and welfare systems.

In effect, relative to this sort of research activity, CHER provides a uniquely comprehensive database as a tool for analysis. For example, this database enables researchers to do within-country comparisons at the same time as cross-national comparisons (see textbox). International comparisons allow for some ranking of national results concerning, for example, questions of poverty, unemployment or labour force participation. One particularly relevant finding is the fact that advanced western-type states face socio-economic problems that are similar, while the relative importance of these problems within national economies may be quite different.

The analyses conducted by both WRAMSOC21 and ENEPRI22 suggest an important tension between (in the language of WRAMSOC) reforms based on “retrenchment” in response to fiscal pressures and demands that welfare states contribute to competitiveness through cost savings, and reforms constituting attempts at “modernisation” which — for the purposes of this project — means attempts to tackle ‘new social risks’ and to meet ‘new aspirations’ of citizens. In the latter case, European welfare state policies are evolving to meet a

21 WRAMSOC = Welfare Reform and the Management of Societal Change. 22 The ENEPRI = European Network of Economic Policy Research Institutes was created in 1999/2000 at the initiative of the Centre for European Policy Studies (CEPS), bringing together leading national institutes from a number of EU member states and accession countries. The network fosters the international diffusion of existing research, help to co-ordinate research plans, conduct joint research and increase public awareness of the European dimension of national economic policy issues. Activities include the organisation of workshops and conferences, the publication of working papers and policy papers and the formulation of joint research programmes.

Use of the CHER database in comparisons of regime performance in tackling social exclusion

Understanding poverty and the low social status often ascribed to living in or on the verge of poverty requires consideration of more than just the financial resources available to individuals and their households. Access to goods and facilities over time has been shown to have a significant link with levels of poverty, but this association is complex, and the dynamics of lacking basic items over time are not restricted to households struggling to make financial ends meet. Therefore, the relationship between the degrees of non-monetary deprivation is explored. Non-monetary deprivation is defined here as not possessing certain household goods and living in a house that lacks facilities and presents problems that impact on quality of life and on income position. The CHER research made a comparison of some selected monetary indicators of economic well-being of children (up to 16 years of age) across Europe. This addresses the incidence and relevance of family related public transfers and allows an analysis of the connections between (insufficient) family transfers and resulting child poverty. Here poverty rates, poverty gaps, sequences of poverty spells and income mobility are studied. The results may help in assessing the role of family benefits for income formation and income situation, e.g., empirical evidence on how successful the different welfare regimes are in safeguarding children from poverty.



changing agenda of recognised citizen need, rather than simply defending (or even regressing relative to) the status quo under changing circumstances.

The ‘new risks’ in question here are partly a matter of changing visions and partly a matter of changing economic and institutional conditions. WRAMSOC identifies three main classes:

§ In the context of trends sometimes called ‘post-industrial society’, sometimes called ‘globalisation’ (etc.), full employment for the ‘active population’ is (for the meantime) a lost dream. Not only does this contribute to fiscal stress across the whole welfare system, but also, as reforms introduce increased or different forms of labour market flexibility with the goal of reducing unemployment, there are new profiles created of exposure to job loss or job change situations.

§ Balancing paid work and family responsibilities, especially childcare or care of frail elderly relatives. The general aging of populations in Western Europe means that there is a growing fraction of frail elderly people in the population, many of whom are in need of regular or permanent care. Younger adults who, in a family context, might be called upon to provide this care, usually have no perspectives of paid leave or welfare support for this caring (which, from certain standpoints, is analogous to parent care of children).

§ As age, childbirth, family structure and immigration demographics — and fiscal realities — change, welfare system restructuring (such as benefit “conditionality”, “recommodification” of pensions or other restrictions to income support in conditions of unemployment) can reduce some categories of income entitlements or ‘rights’, leading to new patterns of stress, deprivation or contention.

These problem areas are reiterated by ENEPRI who have carried out work notably in the fields of: Labour markets, enlargement and migration; Policy rules, policy competition and economic modelling; Population ageing: consequences and policy issues; and Ageing and welfare systems. According to ENEPRI, pressure on welfare systems will increase not only due to enlargement and globalisation but also, and even more so, due to the ageing of population. They note, for example, that the expected rise in longevity will lead to longer periods spent in retirement, undermining the sustainability and viability of pension schemes. Consequently, pressure is mounting to scale down early retirement plans in favour of an increase in the statutory retirement age. This again will lead to an even more pronounced ageing of the labour force, with, notably, an increase in the average age of a large number of professions and additional adjustment problems for a number of low-skilled labour market groups....

Policy relevant findings of these two projects can, as in earlier sections, usefully be distinguished as, on the one hand substantive and, on the other hand methodological.

— As a general substantive finding, the WRAMSOC work in particular highlights ways that welfare regime differences, determined in large part by responses to old risks,23 are powerful factors in influencing the extent and ways in which ‘new risks’ are given recognition.

— Also as a substantive finding, ENEPRI analysis highlights the ways that ageing of the EU member populations is pushing policymakers to make welfare system reforms in directions of risk or cost reduction (as the risk-return trade-off is worsened by falling returns and a narrowing contribution base) and to look at new ways to “invest” in (the maintenance of) human capital. Because of the interdependency of countries and of different facets of welfare regimes, this requires policy makers to reconsider ageing and pension systems in a comprehensive framework. Risk can be absorbed by raising the effective retirement age, e.g., by indexing the retirement age to life expectancy. At the other end of the age spectrum, there is a conflict between the need to slow down the decline in fertility and the wish to raise (female) participation. Solving this conflict calls for a system that stimulates a more equal distribution of labour over the lifetime, thus internalising external effects of fertility. This diagnosis leads the ENEPRI researchers to make the suggestion that there is perhaps general and increasing need for a pension system with three main elements: (1) a reformed pay-as-you-go pillar which is actuarially fair, features a transparent notional account set-up, and freezes contribution rates at the current level; (2) a funded component which is based on US-style grouped accounts that finance the impending aging burden, and (3) to combat poverty the pension system should in all countries be augmented by a first pillar scheme with re-distributive features that guarantee a minimum pension and strengthen human capital formation.

Overall, there is a strong suggestion — across the diversity of analyses and diversity of social welfare models in different parts of Europe — that, notwithstanding reform efforts, the current EU prospects for human capital maintenance and mobilisation are not good. Although WRAMSOC proposes that, notably in employment centred issues there has been considerable evolution in the direction of ‘new social risk’ recognition, all in all,

23 The WRAMSOC project seems here to adopt notions of welfare regime typology similar to that proposed, a lot more didactically, by the DYNSOC project mentioned above.



the results and arguments of this project and others in related domains (ENEPRI, and also DYNSOC, AITEG, CHER) suggest that:

§ Despite strong evidence that current employment policy and social welfare system designs are unlikely to achieve societal goals for human capital maintenance and mobilisation, there is considerable institutional inertia and, the reform/innovation process is slow even in the face of recognised new needs.

Given observable trends concerning economic capital accumulation, technology and markets (innovation, globalisation) and demography, there will be difficulties with reducing the currently high unemployment levels and there will be (worsening) difficulties with maintaining public investment in human capital (education, health care, pensions) and financing institutionalised social welfare programmes.

— As a general methodological finding, the ENEPRI work highlights the complexity of socio-economic system dynamics and therefore reinforces messages already noted from AITEG about the need to look for simple and robust ways of framing analysis, and to accept partial insights from a variety of models and methods. Proof of this comes from the work in the field of policy rules, policy competition and economic modelling.24 Given that assessment of the effects of policy measures increasingly depends upon economic models encompassing features considered as essential for the specific policies and measures assessed, it becomes important to allowing a confrontation and comparison of the simulation properties of key national and internationally managed economic models in order to assess the robustness and credibility of their findings.

For example, ENEPRI studies focussing on the results of simulations confirm a theoretically based hypothesis that the absolute size of short-run cross-border externalities is rather low. The two basic transmission channels working through trade and capital market cancel out each other to a large extent. The spillovers hardly seem to pose any important threat to European economies and it is disputable whether they would call for a more extensive cooperation framework. However, the considerable variability of simulation results between the models relating to the size and, at times, also the sign of spillovers makes it impossible to have any great confidence, from the simulation modelling, about what will determine the real impact of economic policies undertaken in one country on the economic variables of the others (see textbox). This makes science based policy coordination very complicated if not unfeasible, as the policy-makers do not know or will not agree about the ‘true’ model according to which they could coordinate their economic policies. Although we may not know the ‘right’ model (or, there may not even be one, in a general sense), we do know that a ‘bad’ choice of model can certainly have welfare decreasing consequences relative to system potentialities. Since the currently used models are usually calibrated with the use of historic data for the last couple of decades, if some structural characteristics of economies change as a result of functioning of the monetary union, the outcomes of the model simulations may be considerably different to the reality even if other features are credible.

These sorts of features have led ENEPRI researchers to stress the need for identifying, where possible, simple and robust bases for comparison of welfare regimes and their evolution. Detailed analyses with finely calibrated simulations may not have a lot of added value if the variability of results across (among other things) model types is know to be high. This applies to such domains as comparison of benefit systems and the “generosity” of pension systems as a part of the question of the overall economic cost of ageing.

It can be concluded, that — in the face of the observable stresses on the economic/social interface and the difficulties of obtaining clear and robust simulation results for welfare reform policy — it will not be easy to achieve the reorientations of public policy, economic investment and societal partnerships desirable for responding to ‘new risks’. In the context of our review theme of SEG aspects of sustainability, we should extend this notion of ‘new risks’ to those associated with environmental change and technological innovation (e.g., monitoring of health dangers, principle of precaution) and for technological and product use changes

24 This part of the ENEPRI work involved two large workshops both organised by the French CEPII and a conference organised by the Netherlands Bureau of Economic Policy Analysis (CPB).

Model Contingency and Care with formulating Policy Advice

“Simulations with large-scale macroeconometric models thus do not seem to provide a conclusive evidence concerning the nature of the cross-border spillovers of fiscal policies in the EMU. In general, their absolute size is indeed rather small but, when one disaggregates the average figures, an extremely colourful picture appears. The absolute size of spillovers varies widely among countries. And so does their sign. Therefore, it seems improbable that the EMU members would take the cross-border externalities as a serious argument in favour of strengthening of fiscal policy coordination. It is also unlikely that the countries could agree on a concrete mechanism that would be advantageous for all.” (Source: ENEPRI)



contributing to environmental sustainability. In what ways should reforms to welfare regimes seek to take account of the as-yet unborn or ‘virtual’ members of our societies, the future generations?



§§§888 EEECCCOOONNNOOOMMMYYY///SSSOOOCCCIIIEEETTTYYY///EEENNNVVVIIIRRROOONNNMMMEEENNNTTT &&& GGGOOOVVVEEERRRNNNAAANNNCCCEEE

This section might, in analogy with those preceding it, be titled “governance aspects”. But, as highlighted by our 4-spheres schema (Section §3), governance is transversal across the economic, social and environmental spheres.

One part of what some commentators would call ‘investment in social capital’ relates to building up capacity within the political sphere for decisions and policymaking addressing the full spectrum of societal needs. Among the conclusions that emerge from the discussions so far is that, while major progress towards environmental sustainability of EU economies does seem to be technologically feasible on the basis of existing knowhow (efficiency gains, environmentally friendly process and product innovation); when we look at the institutional complexities and inertia of policy reform we can see that “more sustainability” is a societal choice that, under prevailing conditions of fiscal stress, will be difficult to implement. GOVERNANCE for sustainability means, as we have said, working with a triple bottom line — the simultaneous respect for quality/performance goals pertaining to the SOCIAL the ECONOMIC, and the ENVIRONMENTAL spheres. This also means, evidently, that the political sphere must itself be geared towards sustainability. This brings several new challenges that are, in part, challenges in capacity building that can be aided by socio-economic research.

§8.1 INSTITUTIONAL COMPLEXITY, CHANGE AND DELIBERATION The term ‘sustainability’ is correlated, in science and policy circles, with the passage from a belief in ‘simple’ criteria of quality and choice, to an admission that things are ‘complex’. Governance and decision-making emerge as argumentative processes about needs, power and the criteria for justification and legitimacy: n The natural and technical sciences, although yielding ever-new insights allowing progress in productivity, quality of

services, comfort, reliability and so on, can neither fully master nor judge the significance of, the emergent systems complexities that the science and technology practices themselves contribute to.

n Economic science, constructed for more than two centuries as the science (or art) of decision support for choices under constraint, can help illuminate but not in itself resolve the crucial problems of “social choice” of our times, e.g., equity and justice in the distribution of economic opportunity; health and environmental risks associated with innovation and ecological change, integrity and viability of local as well as global communities.

Current progress in technology is characterised by an extraordinary precision in engineering and functioning and, at the same time, by a deepening of capacities for intervention in natural processes — modifications to organisation at the scales of atoms (nuclear fission and fusion), of molecular and cellular structures (gene spicing and cloning technologies), and of ecosystems and planetary climate dynamics. The resulting new forms of organisation (or disorganisation) are dynamic (ecosystem change, hydrological cycles, atmospheric circulation) or have a long active life (radioactivity) or are potentially self-renewing (genetically modified life forms). It is increasingly seen that technological prowess, for all its marvels, constitutes a self-renewing source of problems and ‘risks’ (possible future problems). This fuels anguishes within society and policy dilemmas about the acceptability of the risks to be run.

Several of the projects already mentioned have had important arguments, insights or analysis examples to offer on such points. However, in the paragraphs that follow, we draw more particularly on the sub-set of projects not yet reviewed, all of which have, in one way and another, a strong institutional analysis dimension. These projects are PUBACC, ADAPT, SUSTRA, POSTI, and GOV-PAR. Among the principal themes to be brought out, we mention in advance: u Consequences of technological risks for governance: Controversies over scientific-technological

developments (energy, health, agriculture, infrastructures, etc.) have led, in many EU countries to civil society initiatives to propose new forms of governance with emphasis on stakeholder and citizen

COMPLEXITY AND SUSTAINABILITY

The ‘complexity’ that characterises sustainability policy can be evoked by three interdependent considerations (cf. Funtowicz & Ravetz on Post-Normal Science):

n Scientific knowledge advising of irreducible uncertainties and/or irreversibilities associated with courses of action;

n Plurality of value systems, political and moral convictions, and justification criteria within society;

n High decision stakes including economic interests and strategic security concerns for nations or ethnic minorities (etc.), and also consequences of environmental change for public health, organism integrity and future economic possibilities.



participation [PUBACC, POSTI]. These innovations have strong intellectual and societal justifications, hence potential legitimacy, but they challenge directly the more traditional public accountability provisions. Up until now, the new precepts and mechanisms of public accountability have not managed to demonstrate stable and viable alternatives to the traditional forms.

u Policy roles for public deliberation: Several of the projects have documented initiatives for new governance institutions based on a deliberative model of multi-stakeholder dialogue’, where a full spectrum of societal concerns and considerations can be brought to bear on the problems and, implicitly or explicitly, power and legitimacy questions are raised [GOV-PAR]. The domains addressed include (1) technology assessment and environmental risk governance [POSTI] and (2) trans-national dialogue [SUSTRA] with the objective to ‘democratise global governance’ relating to trans-national corporations and trade policy.

u Diversity of conceptions about public accountability: There exist very significant differences in the conceptions, expectations and operational conventions of public accountability across EU and candidate countries [ADAPT, PUBACC]. Also, there are complex mixes of formal and informal accountability.

u Enduring institutional complexity: It is illusory to imagine a rapid ‘convergence’ of governance models and practices (e.g., based on simple transfer of procedures from ‘western’ to ‘eastern’ Europe or from ‘northern’ to ‘southern’ Europe) and, indeed, it would be both premature and counterproductive to push for a rapid pan-European harmonisation in this sense [ADAPT, PUBACC, SUSTRA, GOV-PAR].

§8.2 PUBLIC ACCOUNTABILITY AND EU GOVERNANCE REGIMES The PUBACC25 project is one of several in the group under review that have sought to advance the conceptualisation of public accountability within a contemporary perspective of governance, and to provide comprehensive empirical and comparative analysis of recent, complex socio-political issues of public policy-making. Carried out in 2001-2004 by a research team from the Czech Republic, Denmark, France, Germany, Latvia, Portugal and the United Kingdom, it aimed to: (1) analyse public accountability in relation to three different policy-making areas (GM crops, household waste, transport infrastructure projects) in the seven national settings as well as at European level, and (2) discuss the significance of public accountability for contemporary democratic governance and legitimacy.

The PUBACC research shows that there are substantial and significant differences in the conceptualisation (and not just the practices) of public accountability in the seven countries analysed. This diversity needs to be taken seriously when considering issues relating to policy effectiveness and public accountability at European level (e.g. themes of the European Commission’s White Paper on European Governance) and in relation to proposed new forms of (multi-level) governance (as will be discussed also with reference to the GOV-PAR project below).

The differences in both the conceptualisation and practices of public accountability can be explained with the different historical, political and cultural traditions in the countries analysed. These different traditions are characterised in terms of historical legacies, constitutional framings, the structures and functions of state institutions, policy regimes, and the conceptualisation of civil society and the public sphere.

§ There is a significant difference between the provision of formal structures and procedures of public accountability through state systems, on the one hand, and the ‘practice’ and ‘lived’ experience of public accountability in policy-making and public sphere discourse, on the other.

§ This difference can be interpreted as a (relative) dysfunction of formal public accountability provisions, as they do not manage to provide adequate responses to complex policy issues.

§ There has, correspondingly, been a growth in ‘extra-parliamentary’ public accountability processes and social mobilisation processes initiated by civil society actors within the public sphere in response to the perceived dysfunction of formal public accountability provisions.

Hence, the processes of ‘Europeanisation’, especially in relation to Accession countries (the PUBACC case studies include Portugal in the 1980s, the Czech Republic and Latvia in the late 1990s/early 2000s), has had a double-sided (and for some people unexpected or counter-intuitive) impact on public accountability procedures and discourses. On the one hand, democratisation and reform processes have fostered more visible formal public accountability provisions (e.g. through the ratification of EU law in national legislation). But, on the other, Europeanisation has often meant that effective real accountability processes rooted in countries specific histories

25 PUBACC = Public Accountability in Contemporary European Contexts.



have been overlooked and even curtailed, due to the pressure to adopt EU law and regulation without in-depth debate and scrutiny at national and sub-national level.

An example on these points is given by PUBACC of scientific-technological policy issues that, it was found, are very differently characterised in the seven national contexts. Latvia and the Czech Republic have, to date, experienced much less social and political controversy than the other countries considered in the project (where scientific-technological issues have frequently been high up on the political and public agenda in recent years). In several Western European countries, the often controversial nature of scientific-technological developments — as exemplified by GM crops, the BSE crisis, environmental pollution — has led to attempts on the part of state institutions, policy-makers as well as civil society actors to innovate in new forms of governance, with emphasis on stakeholder and citizen participation. This, in turn, challenges more traditional public accountability provisions. With the rising complexity and uncertainty of technological innovation, new mechanisms of public accountability have been explored without, however, fully managing to provide successful alternatives to traditional accountability mechanism to date.

These themes of (1) institutional variety across EU countries and (2) institutional change with sometimes inconclusive or ambiguous effects, are also at the heart of the ADAPT26 project which, again on the basis of cross-country comparisons, draws a set of broad comparative conclusions regarding the Europeanisation of regional and environmental policy-making and the extent of adaptation in the Cohesion (Greece, Ireland, Portugal) and CEE (Hungary and Poland) countries under consideration. The principal findings from ADAPT are:

§ The Europeanisation of regional and environmental policy-making has considerably impacted upon the policy-making processes, administrative structures and institutions in all the countries under consideration and has subsequently led to widespread learning and adaptation. Learning and adaptation have been more extensive in Ireland regarding regional policy-making with Greece, Portugal, Poland and Hungary all demonstrating slow learning tendencies and limited adaptation capacity. In the field of environmental policy-making, the three Cohesion countries are much better off though learning and adaptation are on-going processes with still a long way to go.

§ In the field of environmental policy-making all countries can be characterized as ‘laggards’ facing high policy misfits. Europeanisation has led to significant legal harmonization but has not been successfully followed by the necessary institution-building and establishment/functioning of the required implementation and enforcement mechanisms.

§ Despite serious attempts at decentralization of public administration and policy-making processes, the central state continues to play the key role in policy-making, to dominate networks and partnerships and to control the majority of power and financial resources setting considerable impediments for learning and adaptation. Some of the bureaucratic requirements of the Commission (especially in the field of regional policy-making) seem to be re-enforcing that trend.

ADAPT concludes (once again in resonance with PUBACC lines of argument) that a balance should be pursued between ensuring legitimacy, which demands more extensive participation and involvement of a greater number of local and regional authorities and social actors, and ensuring efficiency towards problem-solving and effective monitoring and evaluation. The current trend in several member-states for more centralized methods presents a potential threat towards the domination of the central state institutions and structures and demands an urgent re-orientation towards a greater balance between central state and regional governance institutions.

Concerning human capital investment for regional/local community capacity building, the ADAPT project proposes that the EU should also consider the allocation of special funds for the development of local and regional capacity building to increase understanding and commitment at all levels of governance. This is seen as an opportunity for the EU to deliberately promote human capital investment to facilitate and accelerate adaptation.

§8.3 MULTI-LEVEL AND PARTICIPATORY GOVERNANCE All of PUBACC, ADAPT, GOV-PAR and SUSTRA have (each in their own ways) a focus on the multiple scales of institutional organisation for governance or regulation of social and economic affairs and, more especially, for pursuit (or non-pursuit) of sustainability goals.

26 ADAPT = EU Enlargement and Multi-level Governance in European Regional and Environmental Policies: Patterns of Institutional Learning, Adaptation and Europeanisation among Cohesion Countries.



The main guiding theme of the GOV-PAR27 project is the hypothesis that under certain circumstances participatory decision making leads to a higher degree of sustainable and innovative outcomes. Thus, the identification of these conditions becomes the central purpose of the project linking together its theoretical and empirical aspects. The theoretical bases for such an assumption were discussed with invited academic experts at two GOV-PAR conferences – one held in Florence in September 2000 and the other held in Athens in October 2001. The conference papers addressed key issues of the current debate on governance, and one of the core questions had been: What does the shift from “government to governance” imply in respect to participation? If one is trying to design an arrangement for participatory governance, one has to provide convincing answers to two questions: (1) who should participate and, (2) how should they participate? This is not a simple question because, in many situations, rules that facilitate the mechanics of governance may not conform to established representative democracy principles.

Stakeholder involvement in policy debate does not lead per se to authentic participatory governance, let alone sustainable and innovative outcomes. The GOV-PAR project therefore adopted a case study approach, combining conceptual with empirical analysis. It tried to identify examples of participatory governance that support a shift towards sustainable and innovative policy developments, with the hope of being able to characterise opportunities for EU intervention to promote these sorts of developments. It identified different governance mixtures in Germany, Greece and the UK, which reflected organisationally determined as well as socially and culturally embedded particular arrangements, from where policy change has to start. The case studies combined site, local or regional level analyses with analysis of EU level decisions on legislation and its implementation at the national level.

The main empirical work of the project covered two different policy areas: (a) water supply and (b) enterprise oriented environmental management systems, specifically the EU Eco-Management and Audit Scheme (EMAS).

§ Water supply is an issue that potentially concerns everyone. This implies, from a stakeholder mapping point of view, a rather open network structure with unclear boundaries. Apart from a relatively clearly defined set of actors officially responsible for water supply, the spectrum of holders can be widened depending on the perception, articulation and organisation of interests. The ways that interested parties are actually involved in “governing” a water supply system then depends on the political options that enable them to participate. A crucial question is whether innovation and sustainability can be promoted (or be secured), through participatory governance, in the context of rising privatisation of water supply as an industrial sector. In many EU countries, the current conditions in the case of water supply are not very favourable for the creation and development of participatory governance, nor very favourable for real progress towards sustainable resource management outcomes. Indeed, against the background of the commodification of water and the liberalisation of the water sector the options for governing water supply in a participatory way are limited. In a context where a shift from government to governance runs in parallel with the marketisation of water supply, a business-oriented way of co-ordinating societal interactions is more likely to be successful in the short term than a new participatory way of policy-making that goes beyond “traditional” forms of governance.

§ EMAS, on the other hand, has a more closed network structure because, by its nature as a management tool in organisations, it involves only a defined set of actors and a clear boundary at the level of the organisation. So participation is inherently restricted, unless a company decides itself to engage in a multi-stakeholder consultation as a basis for its management and reporting strategy. A key question addressed is whether and under what conditions EMAS becomes an effective instrument for achieving sustainability and innovation by fostering participation. One suggestion is that, through systems of continuous reporting and documentation, company and site management can access decentralised developed dispersed knowledge, and can ensure that such knowledge is not lost when individual “holders” disappear or try to hold back information. Under such conditions participatory governance arrangements at the site level can be created through EMAS contributing to innovative and sustainable outcomes.

These two case study areas demonstrate that the much commented upon move “from government to governance” — and the related extension of governing activities far beyond a state-centred view of policy-making — does not automatically imply that the chances are improved to extend participatory policymaking or to broaden the involvement of societal actors over different policy fields. On the contrary, the conditions for the development of participatory governance, as well as the range of societal actors involved are very varied. The case study findings of GOV-PAR thus reinforce, at their respective scales of analysis, the conclusions already noted from PUBACC and ADAPT that institutional history and specific societal context really do matter for governance effectiveness and accountability.

27 GOV-PAR = Achieving Sustainable and Innovative Policies through Participatory Governance in a Multi-level Context.



It is not always convenient for mathematical modelling and bureaucratic standardisation, but institutional variety (like language variety) really does exist and — in a dynamic evolving way — is likely to stay. This is a coevolution process. Individuals and groups are not just objects guided by pre-existing institutional structures and/or moved by overarching “driving forces”. Against the background of a specific institutional context, they develop and pursue (as subjects) their policy objectives through goal-oriented interactions and, in more or less determinate ways they contribute to changes to these contexts and “driving forces”. Finally, “local specificities” — and not least a range of “soft” or informal features, like the kinds of relationship between actor — are quite clearly crucial. Case studies identified a variety of specific circumstances where policy options or instruments could — or could not — be used in a particular way principally because of these ‘informal’ realities.

§8.4 WHERE DOES INTER-DISCIPLINARY ANALYSIS FIT IN? Although some of the projects under review here are rooted in a single discipline (e.g., economics or sociology), all display openness to interdisciplinary perspectives and most affirm the necessity of multiple disciplines for effective policy relevant analysis. This is especially clear when environmental considerations are included in the economic or institutional analysis domains. The GOV-PAR project just mentioned provides good examples.

§ Water and the management of the terrestrial part of its circulation presents a seminal example of how ecological, physical, social, and political processes must be considered together in the modes of organising, regulating, controlling, and/or accessing resources. In this case it is the trend towards commodification and corresponding re-regulations of arrangements for governing a common resource, which are of a particular interest. Political science, economics, technology considerations and environmental systems knowledge must all be brought into play.

§ The EMAS is a management system intended to foster environmental self regulation by companies (and also public authorities) which are controlled indirectly by the state and answerable to the general public and certain external and internal actors (from verifiers and customers to the neighbourhood and employees), thereby leading to greater involvement by actors and to transparency of environmental effects. Although it can be seen as a ‘management’ domain, in fact effective implementation of EMAS requires real cross-disciplinary communication, e.g., law, process engineering, environmental toxicology, marketing (and so on) in the way that the scheme encourages enterprises to voluntarily adopt policies dedicated to legal compliance and continuous real improvement in environmental performance beyond what is required by law.

Since inter-disciplinary capacity is important, the question arises of the formation of ‘human capital’ with competencies in these complex terrains. Here, a unique contribution has been made by the POSTI28 thematic network, which has looked at needs for and effectiveness of interdisciplinary post-graduate education.

The POSTI team started from the premise that it is crucial to look across disciplinary boundaries in order to approach complex issues such as sustainable and socially acceptable innovation. They organised a set of major conferences focussed on various aspects of sustainable technological innovation, and also, more particularly, constructed a database with more than 500 abstracts of graduate students’ dissertations centred on two complementary themes: innovation aimed at saving the environment, and the issue of socially acceptable innovation. Very little is publicly known on the content of this sort of research, and the ideas, insights and beliefs that inform it and emerge from it. So, one purpose of the POSTI thematic network was to map this emerging agenda and create a European forum for interaction between young academics in the field and their seniors. On the basis of this work, they have made specific proposals for the establishment of a “multi-disciplinary RTD programme devoted to sustainable technological innovation”. They also recommend thorough revision of curricula in favour of various forms of increased multi-disciplinarity focused on sustainable technological innovation.29

On the distinctive point of human capital formation, the POSTI project has shown that there is much material of scholarly interest and policy relevance contained within graduate students’ research work. In Europe, there is 28 POSTI = Policies for Sustainable Technological Innovation in the 21st Century: Lessons from Higher Education in Science, Technology and Society. 29 The POSTI network has also developed the related argument — widely affirmed but less evenly put into practice — that there are important potential gains to be made by consciously and systematically integrating environmental concerns with social acceptability concerns within policy making. Examples given include the relationship between customer awareness of, and demand for, environmentally sound products in industrialised countries, and the potential transition from environment-exploiting to environment-sensitive FDI in less industrialised countries. Broad overviews of potential policy integrations may help to avoid a policy in one realm being formed in parallel or even in contradiction to a policy in another realm (i.e. social acceptability versus environmental concerns, or vice versa).



actually a long tradition of research and training in issues related to science, technology and society; research and training which draws on insights from anthropology, sociology, politics, history, philosophy, economics and management studies. People trained within this sort of tradition have contributed much to our understanding of the complex processes of scientific and technological change, and have played a significant roles in policy-making across a variety of institutions. But, because of the continuing division of university education into separate disciplines, it is often difficult to attain a critical mass of academic staff and students within a single university. Scholars concerned with understanding the place of science and technology are often isolated within their home departments and students experience difficulty obtaining financial and intellectual support for what are necessarily interdisciplinary projects.

In other words, higher education contains potentially relevant resources of the needed interdisciplinary competencies for sustainability policies. But the teaching programmes have only weak relays into wider societal domains and the “wealth” of insights tucked away in these programmes constitutes only “weak signals” into current policy formation and evaluation domains. This is a type of “wealth” that is more often than not “forgotten” within relatively inaccessible archives. Recommendations thus include:

§ The employment of electronic archival systems that could make such work easily stored in a manner that it can be found by others and retrieved.

§ Explicit incentives for transcending the established disciplinary barriers may also be needed, in order to proceed forward with respect to sustainable technological change issues.

§ National and international higher education authorities should be encouraged to thoroughly revise the curricula in favour of increased cross-subject communication channels (as a mild form of multi-disciplinarity) as well as developing genuine multi-disciplinary curricula focused on sustainable technological innovation.

Indeed this is a process which is already its starting phase in many countries. More large scale measures are, however, needed in order to facilitate the fruitful mutual input of knowledge between hitherto insurmountable walls between the traditional academic disciplines and cultures.

The POSTI analysis also makes the important point that, although explicit environmental policies and pro-active strategies are critical as governance inputs for social and technological innovation aiming at sustainability, an important question remains as to what actually constitutes a country’s, or a region’s, or the EU’s environmental policy? A distinction between explicit and implicit policies is needed:

§ Many policies are today explicitly embedding or directly aimed at environmental improvements.

§ But the policies of, say, a country are, in part, constituted by implicit policy regarding the environment within all other domains of policy making.

In other words, we have to ask what are the environmental aspects of the trade policy, the industrial policies aimed at competitiveness, the tax system, financial policy, defence industry policy, systems of subsidies, public health, education, policies towards developing countries?

u This means that, for meaningful policy analysis, three broad categories of public policies must be taken into account in a systemic way. The first category is composed of the explicit policies. The second category is made of the implicit policies, so all other domains of public policy may come into consideration. The third and intermediary category is composed of particular cases, often belonging to traditional policy making, which have a critical impact on environmental performance or social acceptability, like e.g. the energy sector, the building industry and the urban development, or the transportation sector.30 Interdisciplinary and reflexive analysis capacities can help for better appraisal of complex policy terrains.

§8.5 INTERNATIONAL TRADE, ACCOUNTABILITY AND SUSTAINABILITY We turn finally (in terms of the sequence of this report’s review) to the international relations facets of sustainability policy analysis, specifically with reference to the SUSTRA31 project that has sought, in effect, to

30 A similar argument would be made regarding the relationship between innovation and social acceptability, e.g., there may be explicit policies regarding social exclusion etc., but these need to be set in relation to implicit policies that promote certain dynamics of technological innovation without necessarily having much regard for consequences in terms of vulnerable groups’ opportunities or exclusion. 31 SUSTRA = Trade, Societies and Sustainable Development.



transpose and explore a variety of participatory governance and public accountability themes (as already mentioned) to the domain of international trade relations. Several projects of the set under review have evoked the context of “globalisation”. The SUSTRA project’s specific aims have been (1) to contribute to the development of a theoretical framework for analysing the interactions, links and trade-offs between trade rules and social and environmental protection objectives, and (2) to interpret the needs of civil society and to seek a better understanding of the underlying motives of collective preferences and of the gradual building up of international collective action in the domain of sustainable trade. These goals were pursued mainly through five international workshops, on the following research and debate themes:

§ The first workshop was dedicated to a theoretical debate over the concept of global public good, and its usefulness in analysing global challenges and in providing guidance to develop a consistent, credible and legitimate global plan for trade and sustainable development.

§ The second workshop addressed the architecture of the global system of environmental governance.

§ The third workshop focused on the methodologies for assessing the process of trade liberalisation from a sustainability perspective.

§ The fourth workshop addressed the issue of vested interests and resistance to trade and sustainable development reforms.

§ The fifth workshop was dedicated to civil society participation into the European policy-making process: it addressed the issue of the European governance of the trade negotiation process.

These are wide ranging and cross-cutting domains and, once again, this highlights that in order to address sustainability challenges effectively, there needs to be a willingness and ability to work with partial and complementary analyses coming from many different directions. The specific issue treated by SUSTRA of participatory and deliberative processes associated with trade and sustainable development, is fairly recent in the social science domain, and raises complex political, social and ethical questions. Moreover, it cuts across several disciplines: researchers in sociology, political science, law and economics need to establish a common language in order to be able to debate together and to identify the common areas of research that could benefit from “cross-fertilizing” contributions.

Certain generalisations can nonetheless be made, sometimes of a paradoxical sort. First, the term “sustainable development” is not a stabilized concept and, in reality, there is no strong consensus on what the pillars of sustainable development should be. The rhetorical question “Sustainability of what, why and for whom?” can have as many different (and legitimate) responses as there are stakeholders in the game... Different categories of stakeholders, governments, international organizations, businesses and NGOs indeed define and redefine “sustainability” within their own interpretative frameworks along different justification principles, following their own interests and preferences. Second, this is typically an area in which traditional top-down approaches to public decisions lack legitimacy, and for which — in principle — deliberative processes could help improve the quality and acceptability of policy making. On this point, SUSTRA rejoins arguments made at length by GOV-PAR and more diffusely by ADAPT and POSTI (see also Section §8.6 below). Third (and related), claims for more equity, transparency and civil-society participation in the decision-making process are not just substantive interest claims, they are often also indirect demands for new forms of social and political relations, in which stakeholders can present their understanding of what sustainable development should achieve, and under what conditions it should be implemented.

Scientific and social controversies combine to generate ‘controversial universes’, in which scientific theories and ‘visions of the world’ become social stakes around which strategic games are developing among economic and social actors. Hence, cognitive issues and stakes of collective action are intertwined, giving rise to new forms of strategic competition among social and economic actors, between present and future generations. From a political science or governance point of view, the sorts of questions that arise as as follows:

§ What are the validation procedures to elicit the most representative justification principle?

§ What tests could be used to judge self-proclaimed and contradictory claims to represent future generations?

One response is to organize deliberation processes that form the foundation of the legitimacy of decisions on the interaction between a plurality of visions and normative frameworks. In the context of international relations this can see counter-factual in the extreme. But, it is important to recall the underlying motives of deliberation as a political process/model. A deliberation process is not designed to aggregate self-interests but rather to foster mutual learning, and to eventually transform preferences while converging on a policy choice that is oriented towards some relevant notion(s) of the common good. What is important to the notion of public deliberation is not so much that everyone participates, but more that there is a warranted presumption that public opinion is formed on the basis of adequate information and relevant reasons, and that those whose interests are involved



have an effective opportunity to make their own interests – and their reasons for them – known. This ‘public use of reason’ depends on civil society as “a network of associations that institutionalises problem-solving discourses on questions of general interest inside the framework of organized public spheres”.

At the international level, the public sphere — conceived as a pluralistic social realm of a variety of sometimes overlapping or contending (often sectoral) publics engaged in trans-national dialogue — can under certain assumptions provide an adequate political realm with actors and deliberative processes that help to democratise global governance practice. By fostering extended deliberation among those actors over the nature of problems and the best way to solve them, participatory arenas could produce a pool of (trans-nationally) shared arguments that would contribute to the emergence of a global “public” sphere. However, opening up political deliberation in international organizations to the wider public debate would imply that the process of deliberation on global politics could transcend boundaries between experts and stakeholders, officials and concerned or interested citizens. These two spheres must mutually and reliably inform one another. This is not gained in advance. It has to be ensured that information is made available to stakeholders, and that in turn stakeholder concerns reach the agenda of those political or administrative bodies that formulate the decisions to be made in international organizations. In other words, introducing deliberative procedures into international organizations needs to be complemented with participatory practices in order to be able to push global governance towards democratisation.

The SUSTRA project argues that, because the EU de facto plays the role of a true institutional laboratory (e.g., in which the notions of subsidiarity, political superstructures and horizontal management of cross-sectoral issues have been progressively refined), one can legitimately hope that Europe could play a role in innovation at the international governance level. Furthermore, it is argued, Europe has been increasingly aware of the necessity to re-regulate its domestic markets in order to better integrate sustainable development requirements. This is where Europe could exert stronger leadership: by negotiating accompanying measures and shared production of global public goods as a central component of free trade agreements with third countries; by being more present in discussions led by the international financial institutions and by demonstrating its willingness to impose at home what it recommends for others.

One key theme here would be reconciling trade liberalization and the European social model. The inability of the European governance to cope with the stresses imposed by trade liberalization (a facet of “globalisation”) on expectations associated with the traditional (post-WWII) Western European social model, is a cause of loss of legitimacy for European governance institutions. SUSTRA suggests that a possible improvement may be through empowering the EU level with an autonomous capacity for compensating the social costs of trade liberalization. Progressing toward a European regulatory regime for essential services of general interest may also be needed, prior to undertaking new liberalization commitments under the General Agreement on Trade and Services (GATS).

Finally, in order to achieve this international institutional innovation, it would be paradoxically necessary to strengthen the national political deliberation on international relations and trade. With the enlargement to EU-25, the capacity of individual Member States to pilot specific technical and tactical aspects of the negotiations run by the Commission has been greatly reduced. Their essential role now relies on their capacity to ensure the democratic control of the EU negotiating strategies. So a healthy political deliberation capacity at the Member-State level remains crucial to the legitimacy of EU decision-making on trade.

§8.6 OPPORTUNITIES AND RISKS OF PARTICIPATORY GOVERNANCE Building a ‘common future’ as envisaged for sustainability depends on sincere engagement by the participating societies to principles of solidarity on agreed fundamental concerns, e.g., maintenance of the four capitals, employment, poverty alleviation, and respect for human rights. It depends on high levels of trust, that is, confidence within and across societies in the prospects of a worthwhile common future obtained through cooperation. This is unlikely to be obtained without substantially better understanding of the diversity of beliefs and practices affirmed by different actors and communities across European societies.

This concern is linked to the advocacy of deliberative governance and policy-making processes. Underlying the advocacy and analysis of deliberative processes there are presumptions (of both theoretical and normative characters) about legitimacy and power balance within society, and also a model of human nature that proposes inter-subjective communication as a profound process of culture and community building. In this regard, there is a strong underlying theme of several of the projects being reviewed, which we can summarise as follows: § Social science, dialogue and deliberation: In the prevailing conditions of societal uncertainty and stress,

there is a strong role for ‘reflexive’ and ‘hermeneutic’ approaches to policy, where the first goal is to obtain



reciprocal understanding of the diversity of beliefs and practices affirmed by different actors and communities. Mutual understanding does not always, in itself, produce capacity to live together. Nonetheless, social science competences can help to document, in a comparative way, the expectations and justifications being put forward, by different sectors of the community in various European societies, for and against specific policies, regimes and strategies [SUSTRA, PUBACC, ADAPT, GOV-PAR].

In this context, and by way of partial synthesis of some of these governance themes, it is important to underline the spectrum of opportunities and risks that are associated with the introduction of the new forms of participatory governance. A transversal component of the GOV-PAR project with the theme ‘Participatory governance in multi-level context’, has attempted to construct a theoretical understanding of participatory governance in its multi-level (sectoral and territorial) context including an assessment of the risks and opportunities associated with the success and failure of the emerging participatory forms of governance as a means to achieve innovative and sustainable outcomes. This gives us a useful set of points in review. Three types of opportunities and three types of risks were presented (as below) as a means to summarize and respond to the main questions of why, who and what of the new participatory forms of governance:

Types of opportunities:

§ 1. The opportunity of widening the forms of representation through governance. Given the growing crisis of the political institutions and the democratic deficit in all levels of political representation, (bureaucratic and authoritarian hierarchical decision making, majority rights, general vote etc.), new forms of governance (e.g. EMAS), based on negotiation and bargaining, broadens legitimacy through the involvement of new types of actors and through new forms of interest intermediation (e.g. committees, new bodies etc.)

§ 2. The opportunity of broadening participation, which gives empowerment and access to holders, with or without legal entitlements, can offer effective policy outcomes, which cannot be derived with the conventional forms of government. The new co-operative partnerships, oriented on common tasks, go beyond legalistic rights, supporting co-operation and widening forms of participation (e.g. at the European, national and local level).

§ 3. The opportunity of continuous learning and improvement. New governance arrangements, give new opportunities for permanent learning of the different actors involved. Learning and awareness refers to all holders, independently of the success or failure of the policy outcome. Different actors, with different history and power, test their knowledge, arguments and powers and learn from each other in the new forms of participation.

Types of risks

§ 1. The risk of non-accountability. This is associated with the diffusion and probably dilution of responsibilities within ad hoc governance agreements where unequal partners participate in a process of uneven distribution of costs and benefits of a given policy. This dilution of responsibility makes the participants non-accountable in both political and legal terms. Non-accountability feeds the temptation to pursue targets that no actor acting on each own could support. This leads us to the increased danger of the reproduction of unevenness of power of participants, which are entering the participation procedure based on different forms of legitimacy and power (e.g. legal entitlement, de facto power).

§ 2. The risk of compartmentalisation of policymaking and policy implementation. This risk stems also organically from the fact that the new governance arrangements are justified on a basis of abstract principles and then are implemented in many different sectoral and territorial levels where they are interpreted and adapted in an ad hoc manner. This implies the multiplication of inconsistencies and the undermining of synergies between particular policies that become apparent in their parallel pursuit within the same territory without any ex ante, ongoing or ex post assessment of their combined impact upon the territory. Furthermore, the danger of “compartmentalisation” of policy increases when we focus only on the fragmented policy areas, or particular policy domains, in which new forms of governance emerge, without examining the general political and socio-economic context, which undergoes drastic changes towards a shift from public to private sector.

§ 3. The risk of instrumentalisation of policy. The emphasis of problem solving and the “effectiveness” of policy outcomes, combined with the dominance of a managerial rational and entrepreneurial spirit, may underestimate important aspects of political legitimacy and social justice. The danger consists in the overestimation of the internal and external functionality of the policy process and the dominance of a technocratic knowledge (e.g. “managerial” assessment of policy outcome, benchmarking etc.), to the cost of democratic participation and the empowerment of civil society.

The conclusion offered by GOV-PAR is that, against these types of risk, we should seek to envisage and appraise the possible benefits stemming out of the mobilization of underused or isolated individual and organisational resources and the achievement of consensus and active participation of an increasing percentage of the population. In order to increase the possibility of the positive outcome we have to rethink important aspects of democracy, participation, political legitimacy and social justice, not only in fragmented and specific policy fields, but in all policy-making frameworks (in which the state still plays a crucial role) and at all levels (especially at the global level, where the lack of political institutions and democratic participation is very important). However, they suggest, we have to be prudent. Current conditions are characterized by rather high



improbabilities of success (despite the fact that the meaning of success itself becomes conditional upon the achievement of the fragmented partial targets of each particular governance agreement). Support for deliberative processes is a reasoned choice underpinned by specific political and moral values, not a panacea in itself.



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§9.1 SEG ASPECTS OF SUSTAINABILITY: RECAPITULATION Summing up, it is reiterated that not all the projects and research network activities reviewed here had an explicit preoccupation with sustainability. Because sustainability is such a cross-cutting term, much social research and policy analysis addressing sustainability themes is, inevitably, dressing up ‘old’ (and important) issues in ‘new’ jargon of our day. Transversal themes such as Research-Technology & Innovation, Regional Development, Governance, Science & Society, and Social Indicators (which, in their own right, are all the objects of reviews elsewhere in the present exercise), are being redrawn with the ‘sustainability’ tinge.

Therefore, it is partly by transposition from the themes and findings of the projects that useful pointers are obtained concerning sustainability policy challenges in the EU and related social science research opportunities and needs. So the question arises, what are the specificities of sustainable development as a vision or projet de société, and how do these specificities translate into a distinctive ‘spin’ on established social science and public policies?

Without trying to cover all bases, some generalisations are useful. First, sustainability implies a (relative) reorientation away from the production of value towards the maintenance of values (including cultural systems, nature, and embodied values in patrimony and infrastructures). Second, sustainability with its themes of inter- and infra-generational equity, poses questions of reconciliation: a durable (co)existence of diversity, including antagonistic political-economic blocs. Third, sustainability as a problématique (that is, a set of questions rather than well-defined recipes) signals, in science and policy circles, the passage from a belief in ‘simple’ criteria of quality and choice, to an admission that things are ‘complex’. In particular:

n The natural and technical sciences, although yielding ever-new insights allowing progress in productivity, quality of services, comfort, reliability and so on, can neither fully master nor judge the significance of, the emergent systems complexities that the science and technology practices themselves contribute to.

n Economic science, constructed for more than two centuries as the science (or art) of decision support for choices under constraint, can help illuminate but not in itself resolve the crucial problems of “social choice” of our times, e.g., equity and justice in the distribution of economic opportunity; health and environmental risks associated with innovation and ecological change, integrity and viability of local as well as global communities.

Sustainability covers policy-everything, albeit from a particular point of view. The underlying problem for sustainable development policy is, sustainability of what and for whom? It has become commonplace to seek out indicators for judging societal progress relative to specified goals. In this general framing, technologies, investments and policies more generally, should be evaluated against sustainability criteria. In some economic modelling approaches, the reference is a national income that is non-declining through time or a non-negative change in net wealth. But, as is shown in a broad spectrum of empirical and conceptual analyses, this sort of aggregate index abstracts away from the various dilemmas associated with a reconciliation between the various interests and forms of life that are currently in conflict with each other and at risk.

§9.2 SOCIAL SCIENCE AND SUSTAINABILITY POLICY If science and economic analysis, on their own, can no longer provide sure and simple advice about what is good and right for choices of technology and public policy, what are the guiding stars that research can provide in these “post-normal” times? Much interesting research has been done; but there are still more questions here than answers. Worse, there exist a plurality of relevant methods for studying science, policy, sustainability, technology and society; and we observe a plurality of intellectual (and policy) communities each struggling, within its distinctive frames, to understand society, science, technology, governance, and regional development ... and ... sustainability. This situation is a major challenge in itself,32 and it may be useful to carry out social science research simply with the goal of exploring and characterising the conditions for achieving dialogue considered as interpretation and “translation” between different visions and versions of sustainability! 32 The European Commission’s 6th Framework Programme Priority 7 Work Programme proposed (in its section 1.2) that “Research should analyse the forms of national, disciplinary and paradigmatic fragmentation of the social sciences and humanities in Europe and propose practicable means to overcome this fragmentation....”



This much said, the potential social sciences contributions to sustainable development policies can usefully be placed at two complementary levels.

§ Social science, especially of the reflexive sorts, is first of all an aid to human understanding before becoming, second and circumstantially, also a tool for policy.33

§ Then, at the instrumental level of application, social sciences can make contributions to the creation, dissemination and use of knowledge in and for sustainability policies (e.g., education, science policy, stakeholder deliberation, governance, etc.).

Framed in the language of economic analysis, sustainability is a problem of social choice. As has been amply illustrated since the 1970s, technological and resource considerations may determine whether or not an economy is capable of following a sustainable development time-path. But the society “chooses” its course, for or against different considerations of sustainability, within the limits of what is possible. Social science can ask, how are these “choices” motivated and justified at the various scales of policy and decision-making? Social science can also help explore and design institutional and communication conditions for pursuing societal choices.

Put in other terms, SS&H research can help to build the needed models and data bases for governance and policy but has the potential, above all, to build up mutual understanding and dialogue capacities necessary for robust policy formulation, implementation and evaluation (see textbox, Sustainability Policy & Dialogue).

Given the pace of socio-economic change, the stresses that this induces for public policy, business and civil society actors, and the wide disparities of habits, beliefs outlooks and expectations across different stakeholder groups and nations of the enlarging EU-25, the importance of this potential policy contribution of SS&H research to building social learning dialogue capacity cannot be over-estimated. This will be a theme underlying many of the specific recommendations for future research that follow.

§9.3 KEY RESEARCH REFRAINS § Social Learning and Governance: It will be important to build up documentation of good practices in the framing of policy problems through multi-stakeholder deliberation about the merits and demerits of policy alternatives. SS&H research could also address, for the spectrum of social and economic policy fields, prospects for deliberative evaluation and governance practices with reference to unequal relations of power, the “communication gaps” and, more generally, the question of the cultural, symbolic, economic and institutional bases for trust — the factors that can establish or diminish the willingness or a person, group or community to make itself vulnerable in the expectation (or hope) of a benefit coming from association with others.

§ Meaningful policy analysis is complex. In general, three broad categories of public policies must be taken into account in a systemic way. The first category is composed of the explicit policies. The second category is made of the implicit policies, so all other domains of public policy may come into consideration. The third and intermediary category is composed of particular cases, often belonging to traditional policy making, which have a critical impact on environmental performance or social acceptability, like e.g. the energy sector, the building industry and the urban development, or the transportation sector.34 Interdisciplinary and reflexive analysis capacities can help for better appraisal of the ‘integration’ of sustainability considerations within and across complex policy terrains.

33 Of course, it is more usually with a view to usefulness as a tool for policy that there is significant funding of social science contributions in contemporary policy relevant research domains. 34 A similar argument would be made regarding the relationship between innovation and social acceptability, e.g., there may be explicit policies regarding social exclusion etc., but these need to be set in relation to implicit policies that promote certain dynamics of technological innovation without necessarily having much regard for consequences in terms of vulnerable groups’ opportunities or exclusion.

SUSTAINABILITY POLICY & DIALOGUE "... the policy process will enter the realm of the hermeneutic where there is no prior agreement on the key questions, appropriate framework or essential facts. With an expansion of worldviews and a broader conception of knowledge, we will find little consensus on questions, methodologies and data for determining optima. Good policymakers will be those who can lead enlightening conversations between scientists with different disciplinary backgrounds and between people of different cultures and knowledges."

— Richard Norgaard (1988), "Sustainable Development: A Co-evolutionary View", in

Futures, 20, pp.606-620.



§ Deliberation with and about economic modelling: Economic modelling work must continue to ask and explore the question: can pathways of infrastructure investment and eco-efficient innovation aiming to reduce environmental pressures (e.g., greenhouse gases, chemical emissions) be simultaneously (a) economically viable and (b) employment-intensive for timescales of 5 to 50 years? This is not only a modelling question. There are many different modelling approaches and, each approach has its distinctive framing assumptions, permits distinct “classes” of theory-mediated results that are not readily comparable, and distinct limitations.35 Modellers can be encouraged to adopt publicly the principle of a ‘reciprocal burden of proof’, exploring arguments for and against the pertinence of each approach within a deliberative process. This can help build scientific capacity and can help make a ‘bridge’ from the analytical modelling to the social learning and partnership challenges of sustainability (cf. the EU governance themes, on right).

§ Characterising sustainability as a problem of social choice: It has been illustrated by modelling, environmental evaluation and scenario work since the 1970s, that technological and resource considerations determine whether and in what ways an economy is capable of following a sustainable development time-path. But the society “chooses” its course, for or against different considerations of sustainability, within the limits of what is possible. Social science can ask (1) how are these “choices” motivated and justified at the various scales of policy and decision-making and (2) how are these choices framed within different modelling frameworks? This can help build bridges from modelling to qualitative social science research to civil society.

§ Precaution and responsibility: How far should principles of ‘respect’ and ‘precaution’ be pushed? The Principle of Precaution has, since the 1990s, emerged as a proposed guideline in technology choices and regulatory policy. Precepts of stewardship and precaution are justified not so much by calculations of risks and expected outcomes (the ‘data’ are inadequate by definition), but by arguments in terms of duty or responsibility, respect or esteem for others as members of an extended community. These are ethical considerations whose legitimacy depends largely on social and cultural norms and whose respect seems to imply constraints on current economic interests and liberties. If a reasoned basis for action is to be established, forms of deliberative procedure must be sought that permit those involved — the stakeholders — to maintain a permanent “dialogue” or “argumentation” between the several non-reconciled principles or positions.

§ Sustainability as a knowledge partnership challenge: Research Area 3 in the EC 6th Framework Programme’s Priority 7, notably the paragraph 3.2, affirmed that, “The EU is fully committed to the pursuit of sustainable development as well as to the establishment of a European Knowledge Society. Research may address the compatibilities as well as possible tensions between these two key strategic objectives.” There is, as yet, little consensus on what might be the economic, symbolic and normative foundations for a European knowledge based society and whether (and to what extent) there are meaningful resonances with ‘sustainability’.

§ Sustainability and other popular utopias: ‘Sustainability’ can be considered as a utopia privileging notions of respect, equity and coexistence. It may be interesting, as a part of ‘foresight’ and policy framing studies, to see the application of techniques such as ethno methodology and hermeneutic social science to obtain insights about different popular 35 For example, as mentioned in Section §5 there is a convincing demonstration of the value of structural economy-environment modelling for exploring the “opportunity spaces” of future EU economies including the scope, in technological and economic terms, for achieving reductions in key environmental pressures while maintaining economic capital accumulation. It was noted, however, that achieving the ideal ‘win-win-win’ results for economic, human and environmental capitals mentioned cannot be guaranteed by following the insights of any single model and, a deliberative process is necessary for identifying robustness of model insights and for justifying the ‘risks’ associated with all policy choices.

FROM THE EU STRATEGY FOR SUSTAINABLE DEVELOPMENT: GOVERNANCE THEMES

n Improve Policy Coherence (through integrated policy assessment and a better information base)

n Get Prices Right (to give signals about sustainability goals to individuals and business)

n Invest in Science and Technology for the Future (promoting innovation for sustainability goals)

n Improve Communication and Mobilise Citizens and Business (in partnerships for sustainability)

n Take Enlargement and the Global Dimension into Account (internal and external coherence of actions)

Globalisation, ICT and New Forms of Conviviality?

Ten years ago the Internet had hardly been born and gene splicing was exotic laboratory experimentation. Ten years from now, the ‘penetration’ of the new IC technologies in the lives, bodies and minds of the younger generations will be such that the images of hard-wired micro-chips, ‘cyborg’ creations and genetically modified populations that have peopled a century of ‘science fiction literature and films, will be accepted as a banal reality. We are, through the combined momentum of instantaneous multimedia communications, planet-wide capital flows and commodity commerce, genetic splicing and demographic change, literally becoming what no man (or woman) has ever been before. What new forms of violence and conviviality might emerge in these new terrains of technology, nature and human nature? Are they forms of ‘sustainability’?



visions of sustainability, of possible forms of a knowledge based society, and of other dystopias and utopias, that may be in the minds of current and future generations.

§ Uses and users of sustainability indicators: It has become commonplace to seek out indicators for judging societal progress relative to specified goals. In this general framing, technologies, investments and policies more generally, should be evaluated against sustainability criteria referring to all three classes of “funds” — social, economic and environmental — and also to procedural political criteria. Exercises of design and production of prototype indicator systems have demonstrated the technical feasibility (but also the fastidiousness) of producing data systems permitting EU cross-country comparisons. However, experience is still limited of experience with the mobilisation of indicators for building shared understandings of policy challenges and options for action. Social science research could (1) highlight the diversity of action contexts and scales within which sustainability indicators might have a place; and (2) highlight the complementarities between quantified descriptions and qualitative considerations of the relational aspects of societal well-being social capital formation — such as collective identity and status in communities, and substantive considerations of fairness and poverty (e.g., inter-relations between family organisation, household structure, labour market participation, welfare regimes; notions of wealth and identity linked to the physical environment and patrimony).

§ Classes of community and poverty: There could be substantial benefit to be gained from research systematising reflection — both conceptual and empirical — on the classes of community, vulnerability and poverty that European social and economic (and environmental) policy should address. This could become an integrative theme for research on social capital and on indicators for sustainability and social welfare provision.

§ Long term historical perspective on concepts of societal well-being. Just as environmental science and policy benefits from insights about past environmental change, discussions of needs and prospects for welfare system reform, governance models, systems in Europe would benefit from historical perspectives highlighting the diversity of forms of community, poverty, cross-cultural communication and solidarity in Europe’s past. ..

§ Responsibility for future generations and the ‘costs’ of sustainability: The provision for the “needs of future generations” (just as the provision for the needs of old people, of children, and for other forms of diversity) will involve various dilemmas of principled action and sacrifice. Systems complexities mean that attempts at quantification of the ‘trade-offs’ are shrouded in uncertainties, and this tends to feed controversy. What are the different considerations of duties and costs? Social science can help to build this dialogue.

§ Comparative research on societal conceptions of nature: Actors in the social and economic spheres relay societal claims about the “status of nature” and “on behalf of the environment” into the political arena. Comparative analysis of societies’ claims for and from non-human communities, rooted in specific ethical, cultural and economic histories, could be an important input to, and output from, multi-stakeholder deliberation.

These suggestions are made on the basis of themes and gaps emerging from synthetic appraisal of the projects under review. No specific attempt has been made in this report, to reconcile these suggestions to other components of research review.

Martin O’Connor

Documents

Social Economic and Governance Aspects of Sustainable Development