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New economic narrative looks beyond growth

Author  :  WANG YOURAN     Source  :    Chinese Social Sciences Today     2021-09-12

The world today is facing multiple challenges, such as a slowdown in economic growth, climate change, and ecological degradation. How can we better boost, measure, and evaluate economic growth? Some scholars argue that the theory and practice of growth needs to go beyond the economic dimension.

Growth not as an end

According to the OECD report Beyond Growth: Towards a New Economic Approach released in September 2020, we are facing a series of planetary emergencies linked to the environment, the economy, and our social and political systems. But we will not meet these challenges using the tools of the 20th century. It is necessary to rethink the role of the economy in improving the well-being of people and the planet.

The report calls for seeing economic growth not as an end in itself, but rather as a means to achieving societal goals including environmental sustainability, reduced inequality, greater well-being, and improved resilience. This requires updating the theories, tools, and methods underpinning the analysis that influences economic decision-making.

The future of growth in Europe needs a shift in focus: from an increase in quantity to an increase in quality, according to guest researchers Zora Kovacic and Silvio Oscar Funtowicz and professor Roger Strand, all at the Centre for the Study of the Sciences and the Humanities at the University of Bergen in Norway, as well as Lorenzo Benini and Ana Jesus, both staff for the Integrated Assessment and Knowledge Development Program at the European Environment Agency. This implies a rethinking of not only growth itself, but of the ways in which societal development is observed, classified, assessed, and managed.

Everyone wants to find hope within economic, ecological, cultural, and political changes. If hope is considered merely in terms of materialist values, the prospect of limits to economic growth is unbearable, according to Kovacic and her colleagues. If hope is set free and other types of growth are pursued equally, science and creativity can be fruitful sources of advice. Art, for example, can be a powerful means of imagining alternatives to economic growth and of engaging in political debates. Art allows people to engage emotionally and cognitively, collapsing the modern divide between subjective expression and objective observation. Hybrid forms of knowledge and action help create the space needed to imagine, experiment, and collaborate.

Public policy indication

Many of the most valuable experiences in life cannot be monetized or measured. The obsession with GDP growth seems to have derailed public policy. The contemporary challenge is to translate new insights into growth and the momentum they carry into public deliberation and meaningful change, they argued.

The prospect of jettisoning the imperative of economic growth is appealing to some European people and institutions, such as the European Environmental Bureau, which is a network of over 170 environmental NGOs in all EU member states and several other European countries. Representatives of the European Commission and the European Parliament also joined the discussion of alternative perspectives about growth. This was unimaginable just a few years ago.

What Kovacic and her colleagues suggest is not to substitute GDP growth targets with some sort of happiness or utility objective, but to bring about deep changes. The role of government should shift from setting quantitative growth targets to acting as guarantor of quality in the process of establishing paths to well-being outside economic growth.

Thinking beyond economics and beyond academic disciplines helps to think beyond growth. Knowledge outside the framework of research specialty or discipline is no less valuable. For instance, the Ecuadorian and Bolivian governments have adopted “Sumak kawsay” as their national mission. “Sumak kawsay” is a vision of “living well” that embraces the ancestral, communitarian knowledge and lifestyle of the Quechua people—South American Indians living in the Andean highlands from Ecuador to Bolivia. It looks for balance with nature in the fulfillment of human needs instead of mere economic growth. The ultimate goal is to achieve harmony with the community, family, nature, and the universe.

Adaptive governance

Research done by Steve Hatfield-Dodds, an Australian philosophical economist, Brian C. Chaffin, an associate professor of water policy and governance at the University of Montana in the US, and other academics show that adaptive governance is a new concept emerging in the 21st century. It focuses on the evolution of formal and informal institutions for the management and use of shared assets, and encompasses both the efficiency and adoptability of institutional arrangements.

“Specifically speaking, adaptive governance originated from scholarship on common resources governance and resilience studies,” Kovacic said. The concept emphasizes the mediation of the complexity and uncertainty inherent in socio-ecological systems, rather than the need to reduce uncertainty and complexity in order to make a decision.

“When the future cannot be predicted or controlled, adaptive governance can be used to control the system,” Kovacic continued. The innovative aspect of adaptive governance is its cyclical approach, in which policies and decisions are not made once and for all, but are understood as subject to recurrent revision. In this iterative process the system and the governing apparatus adapt to each other in a reciprocal and evolving relationship. What matters is the ability of the government to change its course of action when needed with the consent of the people.

Kovacic stressed that progress should not be defined by experts. Experts can contribute economic theory, but a broader dialogue with society is needed as well.

Editor: Yu Hui

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