Konrad Hagedorn

The Evolution of Institutions in Transition

This paper aims at explaining the role and importance of the evolution of institutions for sustainable agri-environments during the transition process by referring to examples of agri-environmental problems faced in Central and Eastern European countries. It is often stated that the replacement of institutional structures in post socialist countries would bring a unique opportunity to implement new policies and institutions needed to ensure that economic growth is environmentally sustainable. This idea stems from the assumption that the breakdown of the socialist system resembles that (of the Schumpeterian type) of creative destruction - a process that incessantly revolutionizes economic structures from within. However, not all kinds of institutions, especially at local level, can simply be implemented, and even more, not incessantly. Instead, they evolve as a response to ecosystem and social system characteristics, and this is a rather slow process. A central question therefore is whether the required institutional arrangements for achieving sustainability in the area of agri-environmental resource management can be built more easily in periods of transition as they fill institutional gaps, or whether processes of transition make institution building a more difficult and far more time consuming task than previously thought. Above all, we want to find out, how these two processes of institution building at different scales affect the sustainable management of resources such as water and biodiversity in agriculture? It will become clear that the agri-environmental problem areas faced during transition are complex and dynamic and require adequate institutions both by political design and from the grassroots, to be developed by the respective actors involved. Transition from centrally planned to pluralistic systems has to be considered as a particular and in some respect non-typical process of institutional change. Popular theories of institutional change do not necessarily apply. The privatisation experience from many CEE countries will serve as an example. Finally, we will provide some examples of missing or insufficient interaction between political actors or agencies and people in CEE countries. Substantial investments into social and human capital, particularly regarding informal institutions are needed for institutions of sustainability to evolve.

Towards an institutional theory of multifunctionality

Considerable research has been done on multifunctionality of agriculture in the last years. In this research, the concept of multifunctionality is described and interpreted in different ways depending on the perspective of the politician or a scientist in question. However, there is a core of this concept which is more or less equally acknowledged by all discussants. This is “jointness of production” of goods and services by agriculture and forestry. It is an open question whether the term jointness should be conceived of as existing within a production activity with a defined production function (e.g., cultivating wheat) or rather in an economic and social arrangement for organising a production programme defined by an institution (e.g., a family farm integrated in a network of cooperatives). In addition, the main interest is devoted to combination of commodities and non-commodities, or private and public goods (but sometimes also extended to other types of non-private goods such as club goods and common-pool resources). In principle, from these basic understanding of multifunctionality more detailed and more focussed interpretations and more differentiated concepts can be derived.

Public Choice and Agricultural Policy: The Case of the CAP

Is the reform of agricultural policies an unresolvable issue? Although such an extreme view can hardly be justified in rational terms, many agricultural economists in West Europe may emotionally be inclined to agree. Numerous reforms were proposed but the politicians could not be persuaded to reorganise the Common Agricultural Policy (CAP). This frustrating experience has been illustrated by Pelkmans (1985, p. 4) as follows: Nevertheless, it appeared as if analytical arguments and nonpartisan advice were not heard. It looked as if the CAP decision-making framework tried to make itself immune to criticism by insulating itself. A long lingering doubt emerged in certain circles of agricultural economists: would there be any utility in forwarding yet another reform proposal, that would not be picked up? Was there any point in repeating the analysis to politicians who would not listen? Some concluded that the CAP was reform-resistant and it would be futile to throw good economics after such bad politics. A few specialists, however, drew a different inference. They began to ask the question why the CAP was so resistant to reform, why it incorporated turns and twists time and again that were the worst choices from an economic point of view, why were the politics and economics so far apart?

Politische und ökonomische Rahmenbedingungen für die Entwicklung ländlicher Räume in den neuen Bundesländern

Die Lebenslagen der Menschen in den neuen Bundeslandern werden in der nach wie vor anhaltenden Umbruchphase besonders von den wirtschaftlichen Gegebenheiten und Veranderungen bestimmt. Diese wiederum unterliegen in hohem Mase dem Einflus politischer Masnahmen, insbesondere denjenigen der Wirtschafts- und Sozialpolitik. Fur die landlichen Raume spielt daruber hinaus die Agrarpolitik fur die Gestaltung des institutionellen und okonomischen Wandels eine zentrale Rolle. Insbesondere die speziellen Instrumente zur Bewaltigung der Transformationsprobleme in der Landwirtschaft und im Gartenbau sind in diesem Zusammenhang von Bedeutung. Ziel der Expertise ist es daher, Informationen uber die in diesem Bereich eingefuhrten politischen Masnahmen und deren okonomische Wirkungsweise zusammenzutragen.

Biodiversity and Cultural Ecosystem Services

In the relationship between biodiversity and cultural ecosystem services, biodiversity enables the provision of “cultural ecosystem services” which are beneficial for human use and culture and its institutions provide a social lens through which ecosystem services are perceived and valued.