Building Instrumental Environmental Control Institutions

Abstract

The traditional economic approach to environmental problems is to construct typologies of market failure. While specific policy recommendations derived from this approach are often useful, the atomistic, mechanical foundation and reductionist methodology of the traditional economics paradigm blinds its practitioners to the fundamental nature of the problem. The environment is composed of highly complex, interacting systems about which we know relatively little. As such, the independent and additive properties of the traditional model, along with its foundation in well-defined static private property rights, low transactions costs, and good information, are of limited usefulness. It is, therefore, not surprising that economists' preachings to Congress have often fallen on deaf ears. An evolutionary holistic model can provide the framework for ongoing policy development which encourages initiative and flexibility, both of which are sorely needed in, and are frequently absent from, U.S. environmental policy. A holistic systems approach to environmental problems starts with the recognition that social systems coevolve with natural systems.' Social systems have long interfered with natural systems, both by purpose and by accident, but have only recently become powerful enough to