Abstract
Institutional change for sustainable development does not happen by itself. Individuals and organizations function as actors to influence development processes. Reference is made to a “political economic person” (PEP) guided by her/his “ideological orientation” and “political economic organization” (PEO), guided by its “mission”. Leaving present unsustainable trends behind is a matter of politics and ideology and even power positions, where democracy plays a crucial role. The perspectives of influential (and other) actors are essential in facilitating (or hindering) change. I will discuss ideas of the role of science in society, mainstream neoclassical economics in relation to institutional economics in the spirit of K. William Kapp and Gunnar Myrdal as well as neo-liberalism as ideology (where neoclassical economics has contributed to strengthen the legitimacy of neo-liberalism). Various aspects of inertia and flexibility in institutional change processes, such as path dependence, are discussed. Emphasis is on the role of economics and how a strengthened democracy can open the door for a degree of pluralism.
Highlights
Leaving present unsustainable trends behind is a matter of politics and ideology and even power positions, where democracy plays a crucial role
Classical economists referred to their field of study as “political economics”
Professionals and politicians all refer to their specific ideas of economics
Summary
“Behavioral economics” has become a branch of mainstream economics as exemplified by the popularity of Daniel Kahneman’s book Thinking Fast and Slow [1]. Boulding and his books Beyond Economics [2] and Economics as a Science [3] and Herbert Simon’s Administrative Behavior which appeared as early as 1947 [4]. Simon and his followers pointed to “bounded rationality” and “satisficing behavior” as key concepts. Even in management science there has been an early interest to learn from social psychology, for example in areas such as marketing and consumer behavior [5,6] These authors used concepts such as role, relationship, motive, perception, cognition, identity and referred to learning theory as a way of understanding the establishment of habits and other changes in human behavior. In the present situation pluralism in economics is deeply needed
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