Institutions and the Environment.

Author:Reardon, Jack
Position:Book review

Institutions and the Environment by Arild Vam. Cheltenham, UK and Northhamptom, MA: Edward Elgar. 2005. Hardback: ISBN 978 1 84376 100 6, $155. 496 pages. 2007. Paperback: ISBN 978 1 84720 121 8, $60.00. 496 pages.

Given the urgency of global warming, we need to move beyond sterile debate, if we continue business as usual, global temperatures will increase, sea levels will rise, glaciers will melt, tropical diseases will increase and storms will become more severe. No ecosystem will escape the reach of global warming: from coral reefs, where at least one of every four-ocean inhabitants spends at least part of their life, to polar regions where climate change is occurring at twice the rate elsewhere.

Arild Vatn, a professor at Norwegian University of Life Sciences argues persuasively in this well-written book, that "we need a substantial reorientation of the institutions governing our economy if we are to have any chance of solving increasingly pressing environmental problems" (p. 21).

This timely book is about institutions: how they develop, how they function and how they solve problems. This book emphasizes using institutions to effectuate environmental change. The first unit of the book discusses competing definitions of institutions and what is meant by institutionalism. As an extension of neoclassical economics, new institutionalism views institutions as nothing more than constraints on individual maximizing behavior. But institutions are much more than this, Vant argues. Not only do institutions influence individual social choice, but institutions are in turn influenced by individuals. Readers of this journal will be pleased that Vant adopts classical institutionalism in its contemporary form as the best way to understand and effectuate environmental change.

The second unit of the book discusses how institutions influence behavior and choice. Vatn argues that preferences, values and motivations are socially constructed and that institutional context determines rationality, meaning that individuals are multi-rational. This is an important point, for if we are to solve our environmental problems, we must change behavior by reforming our institutions. How this can be done democratically is discussed in the remainder of the book.

The third unit discusses the formation of institutions. We develop institutions to solve coordination problems, to establish order and to support specific interest or values. Thus the crucial question in the...

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