Online Book Reader

Home Category

Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [38]

By Root 884 0
a negative outcome occurs, one can take shelter in the company of fellow travelers. Howard Kunreuther’s research on homeowners’ reliance on the behavior of friends and neighbors when considering whether to buy earthquake insurance in California was an early example of the importance of this kind of thinking.2 Since then, decision scientists have come to rely on notions of fairness and justifiability based on “what others are observed as doing, giving, or getting” as fundamental to everything from tax systems to labor agreements to executive compensation.

An interesting example of the consequences of legitimation is evident in Howard Kunreuther’s extensive work on siting of hazardous facilities.3 This research found that technical decision analytic models of experts were often eschewed in favor of more qualitative and participative models. While these participative processes might rely on technical support in the background, the foreground was entirely devoted to understanding the concerns of affected parties in terms that were meaningful to these parties.4

In the siting of hazardous facilities, the use of qualitative and participative processes rather than purely technical approaches represents the anticipated difficulty of justifying experts’ estimates of risk to nonexpert stakeholders. When these stakeholders are powerful (as is often the case at the local-community level in many countries with hazardous facility siting problems), then acceptance and understanding in their terms becomes more important to being able to implement a project than compliance with some objective benchmark of risk. However, legitimation in this context gives rise to a tension between playing to the crowd in a manner that might gain acceptance for a project, on the one hand, and, on the other, providing well-intentioned guidance based on solid science, which may be more difficult for some stakeholders to swallow.

A CONTEMPORARY CHALLENGE: CLIMATE CHANGE AND SUSTAINABILITY


A topic likely to be center stage in the policy and research agenda for some time to come is climate change and sustainability. The difficulties in legitimating public policy in this area are well illustrated in the controversy among economists triggered by the Stern Report, written by British economist Nicholas Stern and published in 2006.5 This report analyzes the potential consequences of inaction in the face of climate change and recommends a strong precautionary program to reduce greenhouse gases that are believed to be the likely culprit driving global warming and associated sea-level rise. The controversy that developed following the publication of the Stern Report was focused on how to deal with the tradeoff of the cost of investments to mitigate climate change effects against the still very uncertain benefits associated with these investments. The debate here is clouded by huge uncertainties, large time lags between actions and effects, and massive complexities and knowledge gaps in the underlying science.

With respect to legitimation, these characteristics imply difficulties both for validation of policy actions as well as for individual choices of citizens about where they will live, how much energy they should consume, and many other decisions that until now have largely been dealt with by the market or the government. Let me note a few of the major difficulties for legitimation surrounding this issue.

1. Aggregate valuation of alternative options: As the problems in this context are very long term and beyond the temporal reach of market-based instruments, political choices will be fundamental in determining policies. The whole edifice of science in support of political choices is the centerpiece of hermeneutics and legitimation. In this sense, climate change policy is a prime example of the legitimation crisis formulated by Habermas.

2. Individual valuation of alternative options: How should the views of citizens, as participants in the democratic processes underlying political choices, be informed and represented in the political process? In terms

Return Main Page Previous Page Next Page

®Online Book Reader