Integrated economic-environmental-energy policy and conflict analysis

Abstract

The conventional theory of economic policy has usually taken for granted the paradigm of rational decision-making on the basis of full information. The majority of models designed for economic policy analysis presupposed rational behavior of clearly identifiable, individual decision-makers or of one (collective) decision agency. Given a set of axioms for rational actors confronted with a complex choice situation, these models for economic policy analysis were mainly normative in nature (see for instance, Harsanyi, 1979). In many cases, this traditional view of economic policy analysis (represented inter alia by unidimensional programming or a priori known utility models) was not very realistic, as important institutional and organizational aspects of decision-making were neglected, such as multilevel and multigroup processes, vote-trading, bargaining, power conflicts, impacts of informal pressure and interest groups, and strategic behavior. These shortcomings have in recent years caused the emergence of multiple objective (or multidimensional) decision analysis (Nijkamp, 1980). Multiple objective decision models take explicitly into account the existence of goal conflicts, while institutional and procedural aspects of economic planning can be included by means of interactive decision strategies (see Rietveld, 1981, and Spronk, 1981). Furthermore, in multiple objective decision analysis, usually a more modest satisficer principle instead of a strict optimizing behavior is assumed (cf. Simon, 1958), based on a compromise between different and usually conflicting objectives. In this sense the rationality paradigm receives