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European Commission DG Research






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carried out by



MARTIN OCONNOR



Professor of Economics
C3ED, Universit de Versailles St-Quentin-en-Yvelines
78047 Guyancourt cedex, France




2006
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SECTION P
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PREFACE, J EAN-MICHEL BAER 3
33
ABSTRACT 4
44
1 GENERAL INTRODUCTION 5
55
2 EU SUSTAINABLE DEVELOPMENT POLICY ISSUES 7
77
3 CONCEPTUAL FRAMEWORK FOR THE REVIEW 9
99
4 ECONOMIC ASPECTS 1
115
55
5 THE ECONOMY- ENVIRONMENT INTERFACE 2
222
22
6 SOCIAL WELL-BEING ASPECTS 2
226
66
7 INTERFACES OF THE ECONOMIC AND SOCIAL SPHERES 3
330
00
8 ECONOMY/SOCIETY/ENVIRONMENT & GOVERNANCE 3
336
66
9 RECOMMENDATIONS FOR FUTURE SS&H RESEARCH 4
445
55



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Sustainable development is a dynamic concept, and an ambitious and challenging programme
for action. Since its initial diffusion with the 'Brundtland Report'-World Commission on
Sustainable Development of 1987 -20 years ago- the practical and analytical issues related to
sustainable development keep challenging policy makes, researchers, business, civil society
organisations. The challenge cuts across all levels -from local to global- and all spheres
from individual to collective behaviour, from economic investments and (dis)incentives to
changes in institutions and policy making, technological and social innovations, demographic
changes, gender and inter-generational relations, globalisation and more.

The European Union has been committed to, and indeed has been in the lead in fostering,
policy and research in the field of sustainable development. Still much is to be done to
understand the factors that foster or hamper sustainability and the options available in an ever
changing global context. While it is important to take stock of the good practices and
progress made, it is also crucial to avoid self-complacency or paying lip-service to sustainable
development and rather keep in sight the difficulties. Research can play an important role in
this by developing concepts, methodologies, data, comparative analyses also considering
that sustainable development (and paths towards it) can take various shapes in different
economic, geographical, political, social settings.

The policy review on social, economic and governance aspects of sustainable development, is
the work of an independent scholar, Martin O'Connor, and took place in the context of a
broader exercise of reviewing results of social sciences research projects funded in the 5
th

Framework Research Programme. It focuses on social, economic and governance aspects
while fully aware that sustainable development includes - and in fact has been largely lead
by- environmental ones. The idea here is indeed to complement the research carried out in the
Environment research programme on environmental issues ranging from climate change to
biodiversity or water resources by focusing on the other 'pillars' of sustainable development.
At the time of publishing this review some more projects on governance for sustainable
development -including large Integrated Projects and Network of Excellence- are in progress
in the context of the 6
th
Framework Programme, and the 7
th
Framework Research Programme
is in its initial phase: here the links between all components of sustainable development will
be pursued even more strongly. Far from being 'outdated', we consider that publishing this
policy review now is a due tribute to the 'pioneer' projects in the 5
th
Framework Programme as
well as a necessary component of knowledge accumulation.


J
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Director 'Science, Economy and Society'
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Social science can be an aid to human understanding before becoming also a tool for policy.
Given the pace of socio-economic change, the stresses that this induces for public policy,
business and civil society actors, and the wide disparities of habits, beliefs outlooks and
expectations across different stakeholder groups and nations of the enlarging EU, the
importance of this potential policy contribution of social sciences and humanities research to
building social learning dialogue capacity cannot be over-estimated.

This document is one component in a cycle of work whose broad objective is to produce a
synthesis of policy-relevant results from social science research projects funded by the
European Commission in the 5
th
Framework research Programme. It addresses social,
economic and governance aspects of sustainable development.

One way of summing up the sustainability challenge and the research work examined in this
report is through the three Ws formula: Sustainability of what, why, and for whom?.
This formula highlights the necessity for attention to inter-group and intra-generational
distribution issues that is, the analysis of possible incompatibilities between the diverse
sustainability concerns expressed by the variety of stakeholders or with reference to the
classes of community that are candidates to be sustained. The synthetic discussion of project
themes and findings in the report highlights this point. Indeed, absences of societal cohesion
and the fragility of social capital appear as critical constraints from a sustainability point of
view, perhaps even more critical than technological innovation and economic capital
accumulation capacities alone.
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1.1 THE PURPOSE OF THIS REPORT
This document is one component in a cycle of work whose broad objective is to produce a synthesis of policy-
relevant results from social science research projects funded by the European Commission. It addresses
particularly the policy area of social, economic and governance aspects of sustainable development. In all, 16
multi partner activities (10 projects, 3 thematic networks, 3 accompanying measures) have been reviewed. Some
of these were initiated nearly ten years ago; others have only just reached their conclusions. In most cases the
fruits of these efforts have been, or are now being, put to work in subsequent collaborative work of the
institutions concerned. It is not within the scope of this review to assess this ongoing uptake process.
However, in presenting noteworthy insights and findings of the projects reviewed, the attempt is made to situate
the work in its evolving context.

1.2 EU RESEARCH, POLICY AND SUSTAINABILITY
Sustainability has, during the past decade, become a key consideration in research, public policy and business
practice at all scales and around the world. But not all the projects reviewed here had an explicit preoccupation
with sustainability issues. Therefore, in part this review engages in a process of rational reconstruction. It teases
out messages from a point of view that was not necessarily the focus of the research team at the time. This
accounts for the structure of this SYNTHESIS REPORT.
In this SYNTHESIS REPORT, first a very brief account is given of the current profile of sustainable
development policy issues at EU level (Section 2).
Then we present in a synthetic way the conceptual framework used as a methodological basis for the project
review (Section 3), highlighting the challenges of multi-scale governance with reference to a triple
bottom line or social, environmental and economic sustainability.
With these reference points, a selection of highlights from the projects is presented (Sections 4 to 8). Our
main purpose is not to summarise the projects scientific contents and conclusions per se; rather it is to
signal ways that they give us useful pointers concerning sustainability policy goals in the EU and related
research needs. Thus, although throughout Sections 4 to 8 there are short expositions of project
objectives and noteworthy findings, these expositions are embedded within the thematic and modular
structure of the SYNTHESIS REPORT as a whole.
Finally, by extrapolation from the themes of the projects set in relation to sustainability policy and
conceptual themes, a number of recommendations are made for priorities in future social sciences and
humanities (SS&H) research at the European level (Section 9).
Sustainability is a complex theme with many facets. No one project has sought to cover all facets (and, indeed,
no one project ought to have tried for comprehensive coverage of all facets). However, it is important that
somehow the insights and arguments of each project be considered in relation to the whole. We approach this
synthetic appraisal task in a dialectical way. Progressively, we highlight the insights from the various individual
projects or groups of projects, considering these as candidates for collective intelligence about sustainability.
We also address, progressively, the question of the extent to which (and the conditions under which) the insights
of each project can be reconciled with other partial insights or appear to be in contradiction with other partial
insights. This reciprocal testing of the robustness of arguments and conclusions of each project relative to the
others is an important basis of our distillation of key research recommendations.

1.3 APPRAISAL: HALF FULL AND HALF EMPTY
The available evidence, partly coming from these projects themselves, is that European societies are rather far
from sustainability goals. But this is not the fault of research itself. We may conclude that the SS&H research
glass is half full because, even on the basis of this limited database of projects (not all of which had an explicit
preoccupation with sustainability), we see evidence of an emerging strong European research capacity, with
wide disciplinary scope, for addressing the spectrum of empirical and theoretical questions posed by
sustainability. However, the glass is also half empty because, even if research helps us to understand the
distance that we are from sustainability and the challenges that we are facing, there is not a simple bridge
between more knowledge and getting improvements relative to the un-sustainability of our current practices.
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1.4 SUCCINCT LIST OF PROJ ECTS REVIEWED

ACRONYM TITLE OF PROJECT LEADER

HPSECT200100057
[ SETI ]
Sustainable Growth and Employment Creation in the
Technological Integration of the EU Economy
P.C. PADOAN
HPSECT199900043
[ AITEG ]
Assessing the Impact of Technology and
Globalisation: The Effects on Growth and
Employment
Jonathan MICHIE
HPSECT200000018
[ LGEGO ]
Sustainable Development; long-term growth, equity
and governance
C.V. VAITSOS

SEE1CT951018
[ SUE ]
Modelling a Socially and Environmentally Sustainable
EU
F. SCHMIDT-BLEEK
HPHACT200000059
[ ERPNET ]
Establishing a Multi-Disciplinary Thematic Research
Network on Globalisation, Economy and Ecology
Jeroen VAN DEN BERG

HPSECT200100078
[ WRAMSOC ]
Welfare Reform and the Management of Societal
Change
Peter TAYLOR-GOOBY
HPSECT199900032
[ DYNSOC ]
European Panel Analysis Group / The Dynamics of
Social Change in Europe
Richard BERTHOUD
HPSECT199900004
[ ENEPRI ]
European Network of Economic Policy Research:
Review of research on Ageing, Welfare Systems and
Employment
Daniel GROS
HPSECT200150010
[ ENIQ ]
European Thematic Network on Indicators of Social
Quality
L.J.G VAN DER MAESEN
HPSECT199900037
[ CHER ]
Consortium of Household Panels for European Socio-
economic Research: A feasibility study for a data
production and dissemination exercise
G. SCHMAU

HPSECT200150005
[ SUSTRA ]
Trade, Societies and Sustainable Development S. THOYER
HPSECT20010076
[ PUBACC ]
Analysing Public Accountability Procedures in
Contemporary European Contexts
Simon JOSS
HPSECT200170001
[ REGGLOB ]
The Regulatory Framework of Globalisation Ramon TORRENT

HPSECT200100097
[ ADAPT ]
EU Enlargement and Multi-level Governance in
European Regional and Environmental Policies:
Patterns of Institutional Learning, Adaptation and
Europeanisation among Cohesion Countries
Panayotis GETIMIS
SOE2CT981100
[ POSTI ]
Policies for Sustainable Technological Innovation in
the 21
st
Century: Lessons from Higher Education in
Science, Technology and Society
Terje GRONNING
H
HHP
PPS
SSE
EE-
--C
CCT
TT-
--1
119
999
999
99-
--0
000
000
002
228
88
[ GOV-PAR ]
Achieving Sustainable and Innovative Policies
through Participatory Governance in a Multi-Level
Context
Hubert HEINELT


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The terms sustainability and sustainable development are current since the 1980s and, notably, the publication of
the WCED Brundtland Report (Our Common Future, 1987). They have emerged in the context of concerns
about (1) adverse impacts of human exploitation of the potentials of nature and (2) worsening inequalities
between affluent and miserable components of contemporary human societies. Since the 1950s, the prevailing
vision of development has proposed material affluence and comfort through industrialisation. This vision is still
translated, within Europe, in the perspective of convergence of southern and eastern nations towards the
Western mixed-economy model. Yet the future of this mixed-economy model is itself under threat, from:
n Penetration of micro-engineering (nanotechnologies, genetic and cellular biotechnologies, digital communications, etc.)
via all sorts of gadgets and infrastructures for industrial production, services consumption, human cognition, and habitat;
n Disruption of ecosystems of the planet (e.g., climate change, forest depletion, an unprecedented scale and variety of
innovation in chemicals production);
n Reconfiguration of political and economic alliances including the remodelling of the European Union through
enlargement, of Eastern Bloc societies within the former USSR, of North-South relations (e.g., relations around the
Mediterranean basin, relations between Western powers and the Islamic nations...), and of South-South rivalries;
n New visibility of local and international tensions along lines of economic disparity, language, culture and political
difference, in ways that put into doubt the post World War Two visions of a certain unity of humanity.
A key reference point for European policy preoccupations for sustainability is the document A European
Strategy for Sustainable Development (European Commission, ISBN 92-894-1676-9, Luxembourg, 2002). This
document gives a useful condensed statement of strategic considerations for orienting the Communitys
sustainability ambitions, plus a set of governance themes for piloting actions (see left-hand column of the table
below).
HEADLINE OBJECTIVES AND STRATEGIC CONSIDERATIONS: TREATMENT MAIN SEG PROJECTS
n The Global Dimension (international cooperation, trade policies,
development assistance);
*****
SUSTRA, AITEG,
REGGLOB, ERPNET
n Combating Climate Change (reduction of greenhouse gas emissions
and increase in renewable energy);
*** SUE, ERPNET, POSTI
n Ensuring Sustainable Transport (including modal shifts, infrastructure
investments and spatial planning);
* (SUE, ERPNET)
n Addressing Threats to Public Health (food safety, chemicals, medical
drug risks, infectious diseases);
*** POSTI, PUBACC
n Managing Natural Resources more Responsibly (notably agriculture,
fisheries, waste and biodiversity).
* GOV-PAR, SUE, ERPNET
GOVERNANCE THEMES FOR PROGRESS TOWARDS SUSTAINABILITY
n Improve Policy Coherence (through integrated policy assessment
and a better information base);
*****
ENIQ, CHER, DYNSOC,
ADAPT
n Get Prices Right (to give signals about sustainability goals to
individuals and business);
* (SUE, ERPNET, GOV-PAR)
n Invest in Science and Technology for the Future (promoting
innovation for sustainability goals);
*** POSTI, SUE, AITEG
n Improve Communication and Mobilise Citizens and Business (in
partnerships for sustainability);
*****
ENIQ, POSTI, GOV-PAR
ADAPT, PUBACC
n Take Enlargement and the Global Dimension into Account
(internal and external coherence of actions).
*****
SUSTRA, AITEG,
REGGLOB, PUBACC

It can easily be seen that, in establishing this list, the Commission has partly engaged in a reframing or
recasting of well-established themes of research and policy under the rubric of sustainability.
1
This is indeed
the case for four EU themes/issues that are most directly and substantially addressed by our basket of 16 research
and networking activities, namely: Enlargement, the Global Dimension, Policy Coherence and

1
A similar remark could, no doubt, be made with reference to other thematic headings of th research/policy review process of
which this SYNTHESIS REPORT is a component. For example, much analysis relating to the fields of Research-Technology &Innovation,
Regional Development, Governance, Social Welfare, Science &Society, and Social Indicators (each of which is the object of a review in
the same cycle as this one), will produce findings that have pertinence to the new thrust of sustainability concerns
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TT P
PPO
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II C
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PPR
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JJE
EEC
CCT
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PPA
AAG
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EE 8
88
M
MMA
AAR
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TTI
II N
NN O
OO
C
CCO
OON
NNN
NNO
OOR
RR S
SSO
OOC
CCI
II A
AAL
LL,
,, E
EEC
CCO
OON
NNO
OOM
MMI
II C
CC A
AAN
NND
DD G
GGO
OOV
VVE
EER
RRN
NNA
AAN
NNC
CCE
EE A
AAS
SS P
PPE
EEC
CCT
TTS
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OOF
FF S
SSU
UUS
SS T
TTA
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NNA
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BBL
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Communication/partnership (these themes are highlighted in bold type in the table and their strong presence in
the projects under review is signalled by the ***** code in the middle column).
These four themes are not uniquely, or even principally sustainability issues. The most distinctive
preoccupations of sustainability such as inter-generational fairness, irreversible loss of environmental
functions, preservation of biodiversity are rather more directly associated with three other of the EC
headline/governance themes Climate Change, Threats to Public Health, Science and Technology
Investment. Each of these three issues is addressed significantly (but rather diffusely, or only secondarily) by
our set of SEG projects (as signalled by the *** code in the middle column).
But it should also be noted that some of the EU stated priorities (notably Transport, Natural Resources and
Prices/incentives) are little addressed by our basket, or only implicitly (as signalled by the * code in the middle
column of the table). These are research fields largely funded elsewhere in the European Commissions
programmes and, for this reason, no effort is made in the context of this synthesis to extrapolate artificially from
the projects under review.
Finally, there are several important S-E-G SUSTAINABILITY themes that are strongly addressed by the projects
under review, but that are not directly signalled in the above EU list of sustainability priorities. These include,
notably, employment and human capital (and its formation and mobilisation), social cohesion which is related to
social capital, principles of responsibility (with ethical and legal dimensions), and models of governance.
Clearly, these sorts of themes are vitally important for European socio-economic policies. It is also true that, one
way and another, they can be considered to be present within the EU themes headlined by the above-cited
commission documents. So we have not difficulty is integrating them within our review framework.
Given this thematic diversity and the rather criss-crossing relationships between EU themes and project topics,
neither the one nor the other provides an expedient basis for developing our synthesis. This is why, in order to
position correctly the projects under review and to organise the lessons from and needs for future social sciences
and humanities (SS&H) research, we complement (in Section 3) our identification of EU headline objectives
with an explicit scientific view of the specificities of sustainable development as a four-fold societal vision.
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,, E
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3
33 C
CCO
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EEP
PPT
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UUA
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FFR
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AAM
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WWO
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KK F
FFO
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IIE
EEW
WW

Systems approaches to sustainability highlight the interdependence of the economic, social and environmental
spheres. This is an asymmetric interdependence: the ECONOMIC is embedded within the SOCIAL sphere; and
HUMAN COMMUNITY (including the economic) is embedded within the BIOSPHERE.
2
The economic sphere,
often the principal focus of development policy discourses and indicators, depends for its viability on the vitality
of the social and environmental spheres. Environmental assets are our natural capital that is both limited and
fragile. In the social sphere, by analogy, the cultural forms, symbolic bonds and community infrastructures are
our social capital upon which social cohesion and economic performance completely depend.

3.1 THE TRIPLE BOTTOM LINE & THE FOUR SPHERES
Achieving sustainability means a process of co-evolution respecting a TRIPLE BOTTOM LINE, that is, the
simultaneous respect for (or satisfaction of) quality/performance goals pertaining to each of the three
spheres. . GOVERNANCE for sustainability centres on the problem of reconciling multiple system maintenance
and development goals. None of the economy, the environment or the society is treated as the be-all and
end-all of things. Policy analysis must focus attention (1) on the characterisation of principles of performance
and quality in each sphere (ECONOMIC, SOCIAL, BIOPHYSICAL) and (2) on the interfaces, the interactions and the
interdependencies between the three spheres. This is with a view to building procedural capacity, within the
political sphere, for decisions and policymaking ensuring the simultaneous respect for (or satisfaction of)
quality/performance goals pertaining to each of the three substantive spheres.
Speaking of governance implies collective agency, hence the POLITICAL sphere. Political organisation is a
creation of the social sphere (and hence a part of it). But, political forms tend to take on a life of their own and
so, the political sphere like the economic sphere expresses strong autonomy relative to the rest of the
social (cf., tensions between the State and civil society, the public, the people, etc.). The POLITICAL sphere has
the role of the referee that arbitrates in relation to the different
and often incompatible claims made by the actors of the
social and economic sphere for themselves and with regard to
the other spheres (including the environmental sphere).


Analyses for sustainability must focus attention on many
different facets of systems maintenance and change the
interfaces, the interactions and the interdependencies between
the ECONOMIC, SOCIAL and ENVIRONMENTAL spheres, mediated
by the POLITICAL sphere. This includes characterisation of
principles of performance and quality in each sphere, and of the
principles of rights, respect or responsibility proposed for one
sphere in relation to another. This is a strongly inter-disciplinary
challenge (see textbox)
This schema of four spheres (see diagram overleaf) provides a
convenient framework for a clustering of sustainability research
and policy themes. If we consider interfaces between each pair of spheres, then with the 4 spheres there are 6
pairings. We can highlight the 10 resulting facets of analysis with a 4x4 matrix array (see next page), where the
diagonal cells of the matrix evoke performance concepts and criteria that relate principally to a single
organisational form, and the off diagonal cells signal performance concepts and criteria arising as interferences
of two organisational forms. Research on the interface aspects can be characterised through investigation of the
claims or demands made by each sphere relative to the others.
We use the mirror cells of the 4x4 table to cluster the projects under review relative to the four spheres and
their interfaces. It can be seen that, consistent with the focus of the funding programme, the main clusters are on
the social/economic, social/political and economic/political interfaces. The environmental/economic interface is
significantly represented (although it is not the prime focus of the funding programme) but, remarkably, there is
almost nothing on the social/environmental interface which thus appears as a gap needing to be addressed
(see Section 9 below).

2
For example, R. Passet (1979/1996), LEconomique et le Vivant, 2
nd
edition 1996, Economica, Paris.
AN INTERDISCIPLINARY CHALLENGE
Amongst the distinctive challenges of
sustainability, there are:
Scientific and epistemological aspects (e.g.,
systems complexity, timescale, uncertainty),
Governance and political economy challenges
(e.g., the dilemmas associated with historical
liability and precaution, the framing of sustainable
development in territorial perspectives at multiple
scales, the ways that inter-national dimensions of
equity, responsibility and historical debts might be
taken into account),
Ethical and communal dimensions (e.g., how
principles of care for or duty towards future
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SOCIAL ECONOMIC ENVIRONMENTAL POLITICAL
SOCIAL
Forms of Collective Identity
and Community:
THE SOCIAL SPHERE
CHER, ENEPRI,
DYNSOC, POSTI,
AITEG, ENIQ, SETI
GOV-PAR, (POSTI,
SUSTRA)
WRAMSOC, PUBACC,
ADAPT, ENIQ
ECONOMIC
OPPORTUNITIES &IMPACTS:
The economy versus the
community
Performance, Products and
Output:
THE ECONOMIC SPHERE
SUE, ERPNET, POSTI
LGEGO, SUSTRA,
REGGLOB, PUBACC
ENVIRONMENTAL
LIVINGWITH(IN) NATURE
Meanings, Values & Risks:
sustaining what &for whom?
ENVIRONMENTAL FUNCTIONS:
Pressures on & services of
the environment
Energy, Matter, Natural
Cycles &Biodiversity:
THE ENVIRONMENTAL SPHERE
GOV-PAR,
ADAPT, SUSTRA
POLITICAL
SOCIAL POLICY:
(Capacity of communities;
citizen/public participation)
ECONOMICPOLICY:
(Shaping the rules and limits
of markets)
ENVIRONMENTAL POLICY:
(Regulation of what counts as
an environmental value)
Coordination, Power, &
Governance:
THE POLITICAL SPHERE

A synthetic characterisation of the 4 spheres and the 6 interfaces is provided in Section 3.2, overleaf.


SYSTEMREGULATION
VIA POLITICAL ORGANISATION
NATURAL
SYSTEMS
ORGANISATION
ECONOMIC
ORGANISATION
SOCIAL
ORGANISATION
GOVERNANCE FOR SUSTAINABILITY: THE FOUR SPHERES
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3.2 THE FOUR SPHERES OF SUSTAINABILITY AND THEIR INTERFACES

COMPONENT ELEMENTS OF CHARACTERISATION
THE 3 SPHERES THE THREE SPHERES...
P
PP ECONOMIC
Economic self-organisation, e.g., markets, performance imperatives such as efficiency, growth (K. Marx:
accumulate, accumulate, its the law and the prophets, etc.) governing production, transport and
consumption activities.
P
PP SOCIAL
Social self-organisation, notably forms of collective identity and the frameworks of meaning (symbols,
culture, etc.) and of relationships (networks, memberships, etc.) through which people situate themselves
in human communities and within the biophysical world.
P
PP ENVIRONMENTAL
Environmental self-organisation, e.g., the dynamic structures of physical and biological activity including
atmosphere and ocean circulation, water and nutrient cycles, living organisms from the virus up to the
scale of the Biosphere.
THE 4
TH
SPHERE ... AND THE INSTITUTIONAL ARRANGEMENTS FOR THEIR GOVERNANCE...
Q
QQ POLITICAL
The governance dimension of organisation is constituted through the emergence of conventions and
procedures for the regulation of each sphere in relation to the others, in order to assure the simultaneous
respect for (or satisfaction of) quality/performance goals pertaining to all three spheres. This is the sphere
of arbitrage amongst diverse principles and claims of interest, achieved de facto or by design through
force and institutional arrangements ranging from town and county councils through national government
structures to international agencies of the United Nations.
POLICY DOMAINS THE THREE DOMAINS OF GOVERNANCE/REGULATION
POLITICAL
ECONOMIC
POL TOECON: Supply of economic policy or governance of the economic domain.
ECONTO POL: Demands (with accompanying arguments, reasons, principles) made on government by
economic actors concerning the economy and with regard to the social and environmental spheres.
POLITICAL
ENVIRONMENTAL
POL TO ENV: Supply of environmental policy. Environmental management for sustainability may seek:
first, the contribution of natural capital to economic welfare as a factor of production of economic goods
and services; second, the permanence of the ecological welfare base through maintenance of
environmental functions; and third, respect for environment. [The ENV-TO-POL linkage is presumed to be
mute because non-human nature does not voice demands directly in any political forum.]
POLITICAL
SOCIAL
POL TOSOCI: Supply of social policy which may seek, in various ways, to mobilise society for the needs
of the economic and/or to promote and ensure respect for specified forms of community (etc.).
SOCI TO POL: Demands (with accompanying arguments, reasons, principles) made on government
concerning civil society, the community (etc.) and with regard to economic and environmental spheres.
SYSTEMS INTERFACES CHARACTERISATION OF THE INTERFACES OF THE 3 SPHERES
ENVIRONMENTAL
ECONOMIC
The ECONOMIC sphere seeks the SERVICES of natural capital to economic welfare as a factor of
production; this engenders ENVIRONMENTAL PRESSURES and IMPACTS on environmental functioning and
(future) services, including (sometimes disruptive) feedback effects on economy and community.
ECONOMIC
SOCIAL
The ECONOMIC sphere seeks the SERVICES of human capital (and also of social capital) to economic
welfare; this signifies, on the one hand, (sought-after) opportunities for wealth, revenues, goods and
services but, on the other hand, exploitation and perturbation of existing community forms. For the SOCIAL
sphere, the ECONOMIC is a means and not an end, and the question is whether opportunities provided by
the ECONOMIC are nourishing or perturbing of the affirmed values and FORMS OF COMMUNITY.
SOCIAL
ENVIRONMENTAL
This is the domain of ENVIRONMENTAL VALUES and the matrix of culture that determines the MEANINGS OF
NATURE or the spectrum of environmental functions identified by/for a society, e.g., nature as a
cosmology, roles as a source of well being or wealth, perceived quality of landscape. This is therefore
the material-symbolic space of meanings that (among other things) permits members of society to
articulate risks and to affirm values: sustainability of what, why and for whom (e.g., productive land uses,
biodiversity conservation, reverence for nature; rights and duties of the current generation to consume
natural capital relative to rights/duties of respect towards future generations...).


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Sustainability policies are grounded in both scientific and ethical preoccupations. First there is a principle of
STEWARDSHIP OF THE FOUR CAPITALS the question whether or not (or to what extent) a development trajectory
is respectful, or not, of the generic criteria of social, economic and ecological system sustainability. Second,
there is a principle of MAINTAINING GOOD COMMUNITY RELATIONS for an extended set of communities
including future generations and the non human world (biodiversity).
Systems sustainability analyses can be given
operational character by specification of
requirements on the MAINTENANCE OF FOUR
CAPITALS, viz., economic, natural, social &
human capitals. The first three of these are
the funds linked directly to the
corresponding three spheres. Human
capital mediates between these three spheres
(see diagram). Note that there is no fund
(class of capital) specific to the political
sphere (which is nourished by social, human
and economic capitals).

One way of summing up the sustainability challenge is through the three Ws formula: Sustainability of what,
why, and for whom?. This formula highlights the necessity for attention to inter-group and intra-generational
distribution issues that is, the analysis of possible incompatibilities between the diverse sustainability
concerns expressed by the variety of stakeholders or with reference to the classes of community that are
candidates to be sustained. Our synthetic discussion of project themes and findings (Sections 4 to 8) will
highlight this point. Indeed, absences of societal cohesion and the fragility of social capital appear as far more
critical constraints, from a sustainability point of view, than technological innovation and economic capital
accumulation capacities alone.

3.3 ORGANISING THE PRESENTATION OF KEY PROJ ECT FINDINGS
Policy for sustainability centres on the problem of reconciling multiple system maintenance and development
goals. This means attention to the maintenance of all four classes of capital: economic, natural, human and
social and natural. It also means a (relative) reorientation away from economic capital accumulation alone,
towards the maintenance of values across all spheres (including cultural systems, nature, and embodied values in
patrimony and infrastructures). The traditional preoccupation with economic growth and with economic capital
formation is subsumed in the overall vision within the TRIPLE BOTTOM LINE in which all of the economy,
the environment and the society are given standing.
This means that, thematically, we do not treat economy as having primacy over the social or
environmental dimensions. Rather, given the rationale for the funding of these projects as policy-relevant
targeted socio-economic research, it is perhaps the governance dimension (viz., the political sphere) that
should be given pride of place in our review scheme. But we have to start somewhere and so, in a relatively
conventional way we choose to focus first of all (in Section 4) on the classical question of economic
performance (growth and technological change), opening progressively to the environmental and social
NATURAL
CAPI TAL
HUMAN
CAPI TAL
SOCI AL
CAPI TAL
ECONOMI C
CAPI TAL
THE FOUR CAPITALS are the FUNDS of the three spheres plus
human capital which is the go-between of the three spheres
Human capital is not associated with a
single organisational type; rather it is a
constituent in all four organisational forms.
The human organismis:
(1) a biological entity (relating to the natural
or biophysical sphere),
(2) a factor of production (relating to the
economic sphere),
(3) a member of communities (relating to the
social sphere)
(4) a political actor and citizen (relating to
the political sphere).
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dimensions (Sections 5, 6, 7) and concluding (in Section 8) with an explicit discussion of the findings
concerning the governance sphere.
Several projects and accompanying measures notably AITEG, SETI, LGEGO have addressed aspects of
economic growth potential for Europe. Following the multi-dimensional view of sustainability outlined above,
the question of economic performance potential cannot be considered without reference to environmental and
social factors. These latter being, on the one hand the conditions of durable economic viability and, on the
other hand, the objects of performance considerations in themselves, a key aspect of governance for
sustainability is necessarily the regulation of the economic sphere in relation to the two other spheres.
The absence, within the three above-mentioned projects, of explicit attention to the economy-environment
interface can be considered, in the context of 21
st
century concerns for a triple bottom line, as a lacuna whose
significance should be assessed. Nonetheless, several important messages can be drawn from these projects (see
Section 4 below).
u Modelling methodology: Across (and partly in view of) the considerable diversity of, and controversy
about, modelling approaches for addressing growth and employment prospects, innovation dynamics and
performance on the interfaces with environment and society, it emerges that so-called disequilibrium and
evolutionary modelling frameworks are often more pertinent than conventional neoclassical equilibrium
approaches.
u Economic system change: Technological and structural economic change is a complex evolutionary
process and, although a spectrum modelling approaches yield interesting and credible results, robust
conclusions from simulations of policy effects and future states tend to be qualitative rather than
quantitative e.g., directions of change and orders of magnitude of different causal factors).
The robustness of these sorts of methodological messages can be assessed by, inter alia, considering them in
relation to results of other projects that address more explicitly the key interfaces, that is, the economic-
environmental interface on the one hand, and the economic-social interface on the other hand.
Three projects SUE, ERPNET, GOV-PAR have explicitly addressed, although in quite different ways,
the reconciliation of economic with environmental and, hence, societal performance goals. The SUE project, in
particular, has addressed both economy/environment and employment dimensions of sustainability in analytical
modelling terms. ERPNET rehearses a set of arguments, with sectoral examples, about appropriate analysis
methods for addressing economic and environmental system dynamics in an integrated way. The GOV-PAR
project addresses institutional arrangements with reference to the environment dimension, looking at evidence
for the proposition that participatory decision-making can be an effective mechanism for innovation and change
in directions of sustainability. Two other projects POSTI, SUSTRA evoke the environmental dimensions
of development in a discursive way and bring out a wide variety of considerations across the set of SEG
interfaces. Among the key points that emerge, cumulatively, on the economy-environment-social interface, we
mention at this stage the following:
u Environmental outcomes: As highlighted by the SUE projects scenario modelling at a Europe-15 scale,
and in different ways by GOV-PAR case studies, there is a very substantial scope, in technological terms,
for achieving reductions in key environmental pressures while maintaining economic capital
accumulation.
u Employment: Results from all of SUE, AITEG and SETI suggest that obtaining satisfactory outcomes
for employment levels in Europe given prevailing trends in international markets and innovation (etc.) is
not impossible, but remains far from assured.
Complementary to the employment concern and opening out to other aspects of the social dimension, several
projects notably WRAMSOC, DYNSOC, CHER, ENEPRI have addressed, at different levels of
theoretical abstraction and empirical detail, the present situation and outlook for distribution of income and,
more particularly, the capacities of Europes existing and future economic systems for material social welfare
provision (health services, family support, investment in education, old age pensions, etc.). These projects (to be
further discussed in Sections 6 & 7 below) effectively consider social performance with reference to (inter
alia) economic performance as an enabling factor and/or a constraint.
One important finding is that (in the language of the WRAMSOC project) although there is a strong push for
social policy reform this is visible within all European societies there is nonetheless a tendency for cost
containment in a climate of permanent austerity. Moreover, there is a strong outcome across the diversity
of analyses and diversity of social welfare models in different parts of Europe that, notwithstanding reform
efforts, the prospects for human capital maintenance and mobilisation are not very good. These studies suggest
that:
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u Despite strong evidence that current employment policy and social welfare system designs are unlikely to
achieve societal goals for human capital maintenance and mobilisation, there is considerable institutional
inertia and, the reform/innovation process is slow even in the face of recognised new risks, vulnerabilities
and needs.
u Given observable trends concerning economic capital accumulation, technology and markets (innovation,
globalisation) and demography, there will be difficulties with reducing the currently high unemployment
levels and there will be (worsening) difficulties with maintaining public investment in human capital
(education, health care, pensions) and financing institutionalised social welfare programmes.
Thus, in Section 4 we will focus on key arguments and findings relating explicitly to economic growth and
change dynamics; then Section 5 will focus on the question of the economy-environment interface as a factor
conditioning economic growth prospects and societal goals. Section 6 will introduce the social dimension
(notably with reference to concepts and arguments of the ENIQ project), which positions us for returning, in
Section 7, to considerations on the interface between social and the economic aspects of policy and system
change. Finally, in Section 8, with specific reference to a further group of projects PUBACC, ADAPT,
SUSTRA and also several some of the preceding projects (POSTI, GOV-PAR), we focus on the overtly
political-institutional dimensions of governance or societal regulation of social-economic-environmental
system change.
This schematic development is, of course, somewhat artificial. In order to avoid mentioning every project at
once and giving cross-references, footnotes and caveats in every direction we have slightly boxed some of
them in. For example, SUSTRA has messages about economic growth and technological change that we could
have chosen to mention (but do not) in Section 4; ADAPT addresses environmental issues in ways that could
be (but are not) signalled explicitly in Section 5; and so on.
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4
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SS


4.1 ECONOMIC GROWTH PROSPECTS FOR EUROPE...
Four of the projects under review AITEG, SETI, LGEGO, SUE address explicitly, with the aid of
economic theory and models, the questions of technological change and economic growth potential for Europe.
In fact, these projects are, each in their own ways, discussions of economic analysis methodology (the question
of the usefulness of different classes of economic analysis modelling tools for exploring key policy questions)
and attempts at making useful contributions to framing of policy.
Two of these projects AITEG
3
, SETI
4
have sought, through a variety of modelling exercises, to assess
prospects for economic capital accumulation (growth) and human capital mobilisation (employment) in the light
of technology change and globalisation trends.
The accompanying measure LGEGO
5
is principally an assessment of the pertinence and credibility of different
classes of theoretical models from economics for exploration of long-term growth, technology change and
distributional equity issues.
As already mentioned, the question of economic performance potential cannot be considered without reference
to environmental and social factors. The SUE
6
project explicitly appraises European economic growth potential
with reference to environmental, technology change and employment considerations; we discuss this further in
Section 5.
While these projects are only a microcosm of a much greater contemporary literature, they have brought out the
following distinctive points:
u Modelling methodology: There is a considerable diversity of, and controversy about, modelling
approaches for addressing growth and employment prospects, innovation dynamics and performance on
the interfaces with environment and society. Across this diversity, it appears as discussed notably by
LGEGO and also by ERPNET (see below) that so-called disequilibrium and evolutionary modelling
frameworks are more pertinent than conventional neoclassical equilibrium approaches.
u Economic system change: Technological and structural economic change is a complex evolutionary
process (cf., SETI, AITEG; see also ERPNET and GOV-PAR later on) and, for this reason, although a
spectrum of evolutionary modelling approaches have yielded interesting and credible results, robust
conclusions from simulations of policy effects and future states tend to be qualitative rather than
quantitative (that is, in terms of directions of change and orders of magnitude of different causal factors).
7


4.2 EMPLOYMENT, GLOBALISATION, TECHNOLOGICAL CHANGE...
The SETI project Sustainable Growth and Employment Creation in the Technological Integration of
the EU Economy focused on the impact of the globalisation of technology, the development and diffusion of
Information and Communication Technologies (ICT) and the rise of business services on national patterns of
specialisation and economic growth in Europe. In this context, a disequilibrium model was developed and tested
in which economic growth depends on technology production and diffusion and business services, while
technology and business services interact in a way that can create virtuous and/or vicious circles of growth. The
main modelling findings that emerged from the project regarding the interaction between technology
accumulation and diffusion, business services and economic growth were:
n the strategic role played by innovation (and, in particular by human capital and ICT expenditures) in economic growth;

3
AITEG =Assessing the Impact of Technology and Globalisation: The Effects on Growth and Employment.
4
SETI =Sustainable Growth and Employment Creation in the Technological Integration of the EU Economy.
5
LGEGO =Sustainable Development; long-termgrowth, equity and governance. The major report is titled Growth
Theories Revisited: Enduring Questions with Changing Answers.
6
SUE =Modelling a Socially and Environmentally Sustainable EU.
7
This argument is further supported by findings of several other projects at the interfaces of social and economic concerns,
notably ENEPRI (see Section 7below).
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n the importance of business services (both domestically produced and imported) for economic growth;
n the two-way interaction between the rise of business services and technology accumulation;
n the link between the structure of the manufacturing sector and a countrys capability to produce and import business
services.
According to the model, economic output is positively correlated with the stock of technology, the stock of
physical capital and labour, and domestic and imported services. Both domestic and imported services are
positively correlated with output and technology accumulation. The policy simulations thus produce results
suggesting that enhancing the availability of business services and the accumulation of knowledge can
significantly increase EU economic output. These benefits might, in turn, be obtained by means of both a better
regulatory environment and greater technology diffusion. Higher ICT investment and, especially, higher
availability of human capital would be instrumental to such a strategy. A three-pronged strategy
deregulation, deeper integration, and more effective technology diffusion could (according to the model)
generate a virtuous circle of output growth, provision of services, and knowledge accumulation in Europe, very
much in line with the objectives of the Lisbon strategy.
The SETI project then asked, if this type of virtuous circle potentially exists, what are the determinants of
production and trade in business services and of technology accumulation and diffusion on which it is possible to
act in order to move European countries on a higher growth path? Two SETI modelling results with important
policy implications are:
Production and trade in services are enhanced by European countries having similar (and low) levels of
regulation. This result signals the positive impact of low regulatory barriers as well as of regulatory
harmonization directly on services and indirectly on technology accumulation and growth.
High importance of the structure of the manufacturing sector and of ICT expenditures. Policy interventions
that focus exclusively on favouring the development of business services without recognising their strong
interdependence with some manufacturing activities are bound to be unsuccessful. A high priority could be
given to increasing ICT expenditures in Europe since they impact, not only on technology accumulation and
diffusion directly, but also on countries ability to produce and import business services and, thus, on
economic growth.
The AITEG project Assessing the Impact of Technology and Globalisation has also focussed on
economic growth prospects and, more particularly, on perspectives for employment. The report authors note that
official unemployment has remained at high levels across Europe for several decades (becoming the backdrop
now for an entire generation), this being high relative both to Europes post-1945 track record of generally full
employment, and to the rest of the industrialised world. There have been a number of suggested explanations for
this, with correspondingly different policy implications. Two of the main factors under discussion are, firstly, the
roles of globalisation and increased economic competition from outside Europe, and secondly, the roles of
technological innovation and jobless growth. In this regard, the AITEG project research on innovation
spanned three main areas:
Theoretical and empirical analysis of the effects of technological change;
Patterns and impact of technological change in European industry, including evidence from European
Innovation Surveys;
National studies on innovation in industry and services.
One of the challenges has been to appraise the idea, a received wisdom in some circles, that innovation has an
automatically positive impact on economic performance. The AITEG project concludes that careful theorising
and empirical studies combine to suggest clearly that different innovation strategies, which characterize
particular sectors, may have diverse effects on economic growth and employment patterns, and on the associated
developments in international investment and production.
8
A spectrum of conceptual and analytical models of
innovation have been considered, that make different hypotheses about the constraints posed by existing
economic structures, the competencies available, the strategies pursued by firms and governments, etc. Four
main types of innovation models are identified as having interesting insights for policy:
ICT focused. In this model, innovative efforts are concentrated on the activities based on ICTs and on their
applications. The technological opportunities of ICTs are the driving force of growth, although operating
from a rather narrow base of technological and economic activities. The ability to extend their impact and
applications across a wide range of economic activities is a key test for success.

8
This result is strongly corroborated, with a quite different modelling approach, by the SUE project (see Section 5below).
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Learning based. Here the key process shaping technological and economic change is the learning activity by
people and organizations. In the place of technology-driven growth, change is shaped by the evolution of
competences, by the upgrading of economic activities, production organization and human skills, and by
more complex social processes related to specific economic and social priorities. This is likely to lead to
different qualities of economic growth and an improved quality of employment.
Product innovation based. In the firms and industries with well established markets the opportunities of
technological change can lead to a strategy based on the introduction of product innovations and the
expansion of new markets, often integrating applications of ICTs. This can represent a dynamic reaction to
competitive pressure, leading to growth in both production and employment.
Process innovation based. This model applies to the more traditional sectors of the economy, where the
pressure from competition leads to a search for cost cutting and process innovation. Such a course is likely
to lead to restructuring of firms, concentration of industries, modest growth and large job losses.
What the AITEG project brings out is that each of these models is addressing (or presuming) different types of
innovation and, hence, identifies different consequences for economic and employment outcomes. However,
any one type of innovation activity will interact with a set of other processes (affecting the sources of innovation
in knowledge and learning; the global reach of technological change; the link with the economic structure and
with the demand side, etc.). The variety of these factors and of the strategies that might be pursued by firms and
governments suggest that no simple link can be claimed between innovation and growth performances in the
context of the current changes in technologies and economic structure. The economic and employment outcomes
of technological change are the result of complex social processes where institutions, government policies and
social relations all play major roles, alongside the developments in technology and the strategies of firms. With
this backdrop:
A robust finding of AITEG is that technological unemployment cannot be neglected as a possible outcome
of current technological change, especially in Europe. Some people might say that this is obvious. Yet it is
useful to have a confirmation that, precisely because of the variety of plausible and pertinent models and the
wide spread of innovation/employment outcomes that they can produce, there is no theoretical justification
for postulating, as a general rule, the existence of some automatic mechanism ensuring that a national (or
European) economy is able to fully compensate for innovation-related job losses.
A further robust finding of the comparative modelling is that the sectoral structure of a national economy is
important. The sources of job creation and destruction are specific for individual manufacturing and service
industries and such structural factors are therefore important determinants of countries employment
performances. This has high policy significance given that, at present, activities based on ICT and
characterizing the new economy are relatively concentrated in just a few countries.
Finally, the AITEG project results suggest that the new technologies are generating strong specificity for
services in both the innovation and internationalization fields and indeed even more in the interface between
the two. This means that analysts can no longer use for services the conceptual frameworks developed in
past decades for manufacturing. Accordingly, more research is needed on the sources of productivity
growth in the economy and on the impact of the ICTs on: productivity; internationalisation processes, modes
and degrees; and the impact on the international division of labour. In order to monitor and interpret such
trends, there is also a need to develop statistics that take account of the ICT-intensity of products and
processes on the industrial classification side.
One important social policy recommendation made by the AITEG project, which comes as a corollary of
observations and conclusions of innovation process diversity, is that a broad view of learning and human capital
formation is appropriate, one that (i) avoids the simplistic request for an educational system that is closely
targeted to short-term needs of firms (but that does not assure resiliency of the workforce to adapt to changing
circumstances and opportunities) and (ii) includes specific actions for the problems of the low skilled
components of the workforce. We will return to this point later on (Section 4.4).

4.3 ECONOMIC ANALYSIS AND ECONOMIC CHANGE
Recognising variability of economic system dynamics from country to country and through time, and the
significance of different institutional and cultural factors (networks, attitudes to innovation, etc.), has important
consequences for the ways that economic analysis might be employed in large-scale policy analysis. The
AITEG conclusions in this regard, and their suggestions about the importance of a permanent learning capacity
are corroborated, at a different level of abstraction, by the findings of LGEGO.
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The work of LGEGO is principally in the form of a literature review centring on the question of the robustness
of insights offered by different strands of economic theorizing on the questions of longer term aggregate
economic growth and the roles proposed for policy (or regulation) in pursuit of distributional (equity) goals.
The main methodological conclusion, presented in the report titled Growth Theories Revisited: Enduring
Questions with Changing Answers, is in support of three distinct approaches as complementary: economic
evolutionary theories, the endogenous growth theories treating innovation, power relations and policy in
integrated ways, and systems approaches to economic history (see textbox). These three approaches each
express and produce a different class of key concepts and results. They have in common that, in applications,
the closer their practitioners come to reflect the actual complexity of aggregate dynamics in growth processes,
the more difficult it becomes to establish analytical tractability and to identify generally valid conclusions.
This constitutes, according to the
LGEGO argument, a clear indication
of the limits confronted by economic
analysis, especially in adequately
interpreting the complex processes of
socioeconomic reproduction.
The emphasis on institutional aspects of
economic system change, and its
analysis is shared by the great majority
of the projects here under review, and
will not be specifically rehashed here.
The argument in favour of economic
evolutionary theories is also found in
other projects, most explicitly in the
case of ERPNET which, addressing
needs and prospects for research in the
domain of globalisation, economy and
ecology, also engages a substantial
methodological review.
9
Asking the
question Which framework is most
suitable to study globalisation and the
environment?, the pertinence of
evolutionary analysis perspectives is
presented in the following terms:
Quantitative cost-benefit analysis was argued to have clear limits in the study of processes at a global scale, due to its
restrictive assumptions and lack of complete and reliable data on costs and benefits. This was illustrated for the case of
climate policy
Similar restrictive assumptions apply to optimal growth theories, which use the same basic theoretical framework as
cost-benefit analysis.
The complex systems approach and integrated assessment approaches instead lead to a sort of qualitative cost-benefit
analysis or multicriteria evaluation. In the context of climate change, this was argued to support the use of a
precautionary principle.
Spatial analysis including land use modelling seems less restrictive and suitable as a descriptive-predictive approach. It
allows a fruitful linking of insights from landscape ecology and spatial and environmental economics at a disaggregate
spatial level.
Finally, evolutionary analysis [...] is the most innovative approach available, which so far has received relatively little
attention within the study of globalisation and the environment, [and] is the only approach that can explain and predict
processes of structural change. These are inevitable over a sufficiently long period of time, especially given the
interaction globalisation and global environmental change. It therefore seems appropriate to devote serious and special
attention to an evolutionary analysis of globalisation and the environment.
This general argument in favour of evolutionary perspectives has several important corollaries for policy advice
and the role of economic science. One of these is the acceptance of historical variability and of the pertinence of
historical perspectives on institutions and change. Another is process of learning and collective intelligence

9
ERPNET =Establishing a Multi-Disciplinary Thematic Research Network on Globalisation, Economy and Ecology. The
main report is titled Globalisation, Economy and Ecology: Foundation and Orientation for a Research Action Plan. We discuss the
environment/economy interface aspects of ERPNET in Section 5below.
The three most relevant approaches in growth theory
[according to LGEGO]
n economic evolutionary theories based on continuing disequilibrium
conditions and the neo-schumpeterian interpretations referring to
the coevolution of innovations, institutional changes and of industry
structures, leading to situations characterized by heterogeneity,
uncertainty, path dependency and the complex passage of bounded
rational micro conduct to more aggregate phenomena of innovation
driven growth;
n the new formal modelling approaches on growth dynamics based
on counter-neoclassical assumptions about the existence of
increasing returns, externalities, market power, the endogenous
character of technological progress and of innovative activities
together with the acknowledgement about the critical role of policy
making in shaping the prospects of economic growth; and
n historical analyses of the time-and-space particularities of growth
dynamics based on holistic analyses of multi-directional causal
relations which combine quantitative performances with qualitative
changes in growth experiences as the latter are driven by innovation
processes embedded in specific economic, political, social and
science and technology conditions.
(Source : Growth Theories Revisited:
Enduring Questions with Changing Answers)
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through confrontation of analytical perspectives that may each carry insights but no one of which should be
given exclusivity.
One of the most distinctive themes of the LGEGO review, is its strong argument for the pertinence of economic
history which, it is argued, can be salutary for stimulating reflection about the limits of specific modelling
approaches, about the factors that may determine pertinence or not of a modelling approach and, by corollary,
for the exploration of alternative modes of reasoning.
Economic history can serve as a catalyst in re-orienting and stimulating theory and applied work so as to break
new ground both analytically and conceptually. Historical analysis can shed light on the presence of major
differences/variations in economic growth performances or on the reasons behind the non-recurrence of key
performance experiences. For example, in addressing growth questions, economic historians tend to stress two
key considerations:
n Relations between technical change and organizational/institutional changes, and
n Relations between, on the one hand, economic conduct and performance and, on the other, social and political changes
at other levels of society.
In this regard, economic history can offer the necessary depth of perspective for the comprehension of
similarities in growth performances along cyclical movements and epochal waves, even while clear differences
might appear over relatively shorter time spans. But also, the depth of time availed through the prism of
economic history can disprove presumptions about the
universality of applications projected by conclusions
reached on the basis of formal modelling (see textbox).
LGEGO addresses at length, within this comparative and
historical angle of reflection, the question of
macroeconomic policies, growth and equity (meaning,
in this context, economic income and wealth distribution).
As sustainability relates to inter and intra generational
equity, the question whether or not there are any general
lessons from economic growth theory concerning
regulation and distribution, is rather important for todays
considerations. As the LGEGO review points out,
several strands of economic analysis tend to favour the
view that inequality, especially wealth but also income
inequality, results in growth enhancing conditions. This
view is usually founded on three main arguments, each
supported by very specific assumptions.
n Based on the hypothesis or on historical evidence drawn from the not very recent past, that the propensity to save of the
rich is higher than the lower income brackets, it is concluded that more unequal societies will grow relatively faster than
more equal ones.
n The presence of investment indivisibilities in setting up new industries and in applying major innovations call for a
significant scale of resource allocations and/or of sunk costs. Consequently, in the absence of well functioning capital
markets, the pursuit and realization of such growth inducing major investment undertakings will depend upon the extent
of wealth concentration. And this because, given aggregate resource availabilities, the presence of wealth inequalities
will assure the necessary investment capabilities to cover needed entrepreneurial commitments.
n An incentive argument suggests that tax burdens can lead to the reduction of returns to saving, it is argued that higher
taxation lowers the incentives to invest and to accumulate capital. Consequently, the corresponding growth rates are
adversely affected as a direct outcome of the fiscal burden being applied.
The LGEGO review asserts that recent empirical studies based mainly on cross-country regressions, challenge
these sorts of premises, and the conclusions reached, about the presence of a fundamental trade-off between
economic efficiency and economic equity. Some of the findings of the recent studies strongly suggest that there
can be a negative correlation between average growth rates over time and indicators of economic inequality
(income, wealth, wage, etc.)
A number of analytical arguments have been offered with reference to these more recent empirical findings, in
an attempt to interpret development paths which express successful self sustaining growth patterns linked to
greater equality and, thus, to identify conditions (institutional? technological? societal?, etc.) that might be
favorable to the reconciliation of growth with equity objectives. LGEGO identifies four main areas of such
arguments, that either refute the traditional hypotheses upon which the policy trade-off between equity and
efficiency is being based or introduce key additional considerations. These four areas of alternative arguments
involve considerations which refer to:
Seminal work on the historical perspectives of so-
called economic backwardness and the
determinants of catching-up processes has stressed
the critical importance of pre-existing institutional
bases and of the effective implementation of needed
changes in organizational norms and practices.
Convergence is neither automatic nor costless (as
was, and still is, often assumed by orthodox
development theorists). Rather, major institutional
breakthroughs can prove catalytic in prompting and
accompanying high growth performances. This
argument has important consequences for avoiding
simplistic thinking about the dynamics of
harmonisation envisaged under EU structural
funding and the Accession process, and also for
thinking about any prospects of a transition towards
sustainability for European economies as a whole.
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(a) Dis-saving and/or unproductive investments by higher income brackets, especially the very rich;
(b) Lower levels of human and social capital attained through inequality, especially when relative and, even
more so, when absolute poverty increases;
(c) Distorting demand patterns (both in consumption and investment behaviour) through heavy import
leakages when inequalities are high; and
(d) Political implications in non-egalitarian societies that provoke greater uncertainties and/or social
disturbances. These uncertainties and conditions, which induce social unrest, distort savings and
investment patterns; they also undermine the consensus necessary for the introduction of growth
inducing reforms.
Without going into details, the lesson that can be taken is that if there is no clear basis for asserting a
growth/equity tradeoff within the framework of traditional economic growth theory alone, the wider but
analogous question of seeking to reconcile multiple objectives in sustainability policy remains a legitimate and
open one.

4.4 COMPLEXITY AND INSIGHT IN ECONOMIC ANALYSIS
This brings us, to close the section on economic aspects, to the importance of social learning and collective
intelligence through confrontation of analytical perspectives that may each carry insights but no one of which
should be given exclusivity.
The AITEG and LGEGO reviews have both strongly concluded that a diversity of observable economic change
processes e.g., innovation and employment dynamics or aggregate growth patterns is to be expected as
contingent outcomes of the complex dynamic processes by which socioeconomic systems reproduce themselves
over long time periods. The difficulty of simple or general theoretical accounts is intrinsic to the field. In
order to understand and explain the phenomena of economic development and change, and to provide robust
policy support, a complex approach to theorising is therefore required. Some key questions can be permanently
posed (e.g., with respect to the forms of innovation and the conditions of innovation uptake, or the proximate
sources of economic growth and their deepest
causes), and these enduring questions constitute
challenges to which economic theories and empirical
analyses must respond contingently by means
of ever-changing answers.
The fundamental differences in the conclusions
reached by theoretical constructs can, quite often, be
traced to the quite distinct conceptual foundations
and key assumptions upon which competing schools
of thought are erecting their theoretical paradigms.
As pointed out by several project reports under
review, since the theories behind the varying answers
organize our own thoughts and perceptions as to what
constitutes economic reality, the corresponding
implications are neither neutral nor limited to merely
theoretical concerns. On the contrary, the presuppositions at the outset of analysis carry through to conclusions
reached on the basis of specific theoretical constructs, which in turn can assume a major role in shaping decision
making or, at least, in rationalizing decisions and circumstances which serve specific objectives and interests.
Sometimes it is possible to give strong reasons for rejecting or limiting the scope of pertinence to specific
approaches (although this may be resisted due to intellectual and political inertia; see example given by LGEGO
in text box). But often, there is a plurality of analytical perspectives that each carry important insights but no
one of which is sufficiently comprehensive or robust to be accorded exclusivity. In such cases (which are the
general rule), it is important to develop a capacity for dialogue and learning through the interfacing of
different theoretical perspectives.
This is why there emerges, as a general finding from this part of the review, the rather important (but not entirely
new) conclusion that economics science advice for policy cannot be separated from deliberation. That this is not
a new finding can be gauged, in a formal sort of way, by the fact that a Nobel Prize in Economics was awarded
to Kenneth Arrow for (among other things) work first published in 1950 that demonstrated the impossibility of
establishing general rules for deciding problems of social choice in which peoples interests and value systems
INTELLECTUAL INERTIA
In the second half of the twentieth century, it took more
than three decades for prominent theorists trained in the
neoclassical tradition to recognize conclusively the
inappropriateness of their growth theories. It was only
after digesting the empirical evidence and the theoretical
critiques that they came to reject all the available
growth models throughout the 1950s, 1960s and the
1970s. Meanwhile, the mainstream neoclassical
paradigm had, after dominating economic thinking for
practically a century long period, come explicitly to
exclude pre-existing interpretations which contradicted its
assumptions and to marginalize alternative venues of
theorizing on economic growth issues. (source: LGEGO)
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differ (notably about the basis for societal choices). In brief, what Arrow showed was that, if the attempt is made
to advise on what is best for the society on the basis of a general rule (or set of criteria), then the choice will
be characterised by either authoritarianism (viz., dictatorship by one person or interest group) or incoherence
(internal inconsistency). If the attempt is made to avoid the flaws of dictatorship and inconsistency by
weakening the rule system, then either the advice will be indecisive or the possibility is opened up of outcomes
with features that are widely considered to be fundamentally socially unacceptable.
What is new relative to the Arrow result, but really not all that new for economic science, is the phenomenon
of scientific complexity and its cousin uncertainty. We are concerned here with classes of situations
characterised by three features that, as complicating factors for policy advice, reinforce and interfere with each
other (see textbox). These are
Scientific knowledge here economic
science advising of irreducible uncertainties
and/or irreversibilities associated with courses
of action;
Plurality of value systems, political and moral
convictions, and justification criteria within
society;
High decision stakes including economic
interests and strategic security concerns for
nations or entire communities (e.g., long-term
high levels of unemployment and poverty),
and also as will be discussed more in
sections that follow consequences of
environmental change for public health,
organism integrity and future economic
possibilities.
These features, characteristic of what Rittel and others in the soft systems tradition have termed wicked
problems, make difficult to formulate and justify simple rules of action. Apparently simple desiderata such as
maximise growth or maximum net benefit (with monetary cost-benefit analysis), or democratically that the
majority prevail, or (more recently) avoid risks (such as the precautionary principle applied to technology
innovation), all fall down: because, either they do not adequately address the decision issues (viz., they do not
furnish a clear counsel about what to do), or, the way that they do this does not have plausibility or
acceptability to key stakeholders. There is no clear-cut bridge between knowledge and right action.
This does not, however, mean that a reasoned base for policy is impossible. What is means is that, for wicked
problems, reasoning must be employed in a complex deliberative way. Forms of deliberative and regulatory
procedure must be established, that relativise the divergent scientific contributions, decision principles and
stakeholder positions, while not seeking entirely to dispose of any of them. The challenge here to
economists, as to policy support science everywhere is to work with a permanent "argumentation" between
the several different (and sometimes contradictory) positions. In the words of Rittel (1982), an analyst in such
circumstances needs to be like a midwife of problems, helping to raise into visibility, questions and issues
towards which you can assume different positions, and with the evidence gathered and arguments built for and
against these different positions".
10

As will be expanded in later sections of this Synthesis Report, these sorts of points when taken across to the
environmental and social facets of the sustainability terrain, remain entirely valid, especially in view of the
longer timescales, complexities of environmental system change and intergeneration equity aspects of natural
capital depletion considerations.

10
The citation here is to H. Rittel, H. (1982), "Systems Analysis of the 'First and Second Generations'", in: P. Laconte, J. Gibson &
A. Rapoport (eds.), Human and Energy Factors in Urban Planning, NATO Advanced Study Institutes Series, Martinus Nijhoff, The Hague,
pp.35-63. In fact, it may be seen that the compilation of this review report follows deliberately this precept of a plurality of insights, each
limited and open to question in itself. As outlined in Section 1above, we develop our review of project results in terms of the different
facets of sustainability, where we try to highlight the partial insights as candidates for collective intelligence and then to address, in a
dialectical process, the question of the extent to which (and the conditions under which) they can be reconciled with other partial insights or
appear to be in contradiction with other partial insights. We return to this deliberative perspective in Section 8concerning governance
and in Section 9bringing together key research recommendations.
COMPLEXITY, SUSTAINABILITY ANDEPISTEMOLOGY
Because this is a fundamental point for the angle of attack adopted for this
review/ synthesis as a whole, of projects, we mention a minimum of
relevant cross-references.
This three-point formulation is close to that developed by Silvio
Funtowicz and Jerry Ravetz to characterise the situations where a Post-
Normal Science practice may usefully be applied. See for example, S.
Funtowicz & J. Ravetz (1991), A new scientific methodology for global
environmental issues, in R. Costanza (editor, 1991), Ecological
Economics, Columbia University Press, New York, pp.137-152.
A didactic exposition of the complexity/impossibility theme, in the
context of sustainability and environmental governance, is found in
M. OConnor M. (2002), Social Costs and Sustainability, pp.181202 in
Daniel H. Bromley and Jouni Paavola (eds., 2002), Economics, Ethics and
Environmental Policy: Contested Choices, Blackwell Publishing, Oxford
(UK) & Malden (MA, USA).
Some of the underlying science and social science epistemology issues
are mentioned in M. OConnor (1999), Dialogue and Debate in a Post-
Normal Practice of Science: A Reflection, Futures, 31, pp.671-687.
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5
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5.1 THE ENVIRONMENT AND SUSTAINABILITY
As evoked already in Section 3, the systems approach to sustainability postulates an asymmetric
interdependence of the economic, social and environmental spheres: economic activity is embedded within the
social sphere; and human community (including the activity of the economic sphere) is materially embedded
within the biosphere. The economy, often the principal focus of development policy discourses and indicators,
depends for its viability on the vitality of the interpenetrating social and environmental spheres. The keynote of
the contemporary sustainability literature, since the precursors of the 1960s, is the identification of
environmental systems as assets a sort of natural capital that are both limited and fragile and whose
degradation can be irreversible.
11

In the diagram below, the environmental sphere is represented by the lower box and the economic sphere is
represented by the upper box. Analyses of the interface between the economic and environmental spheres can,
as suggested by the arrows, be developed in terms of the dialectically opposed notions of environmental
pressures and environmental functions/services. Governance on this interface seeks to ensure, as
complementary outcomes: (1) economic welfare through production of economic goods and services as
emphasised in traditional economics, and (2) the permanence of an ecological welfare base through assuring
maintenance of environmental functions.



Economic production and infrastructure
(Internal Organisation)

Economic pressures
on the
environment

Environmental functions/
services for the
economy


Geophysical and ecological processes and systems
(Internal organisation: functioning of Nature)

I
n
d
i
v
i
d
u
a
l

a
n
d

s
o
c
i
e
t
a
l


w
e
l
l
-
b
e
i
n
g




Ensuring a respect for conditions of natural and social system integrity upon which long-run economic activity
depends, thus appears as a key precept for sustainability policy. To the extent that the culprit is ill-advised
economic activity (with its negative impacts on social and environmental systems), it follows that an essential
component of governance for sustainability must be the regulation of the economic sphere in relation to the two
other spheres.
During the 1980s, the terms strong sustainability and strong criterion of sustainability were coined to signal
the guideline of maintenance (non-negative change) in the stock of natural capital, this criteria being set out as a
complement to the goal of accumulation (or, at worst, maintenance) economic capital. Ecological economists
have argued, from physical and life sciences perspectives, that ready substitutability between natural and
manufactured capitals should not be presumed. For example, thermodynamic irreversibility implies the
impossibility of substituting, beyond certain well-defined limits, away from environmental sources of free
energy as production inputs. Substitution may be reasonably easy between energy types, but this relative ease
applies only within the class of energy sources not between energy and other production inputs. Ecological
systems have complex spatial structures, and are interlocked with geophysical processes (such as hydrological
cycles) that extend over large (sometimes planetary) distances.

11
Concerning the social sphere, the analogous argument is that the gamut of the cultural forms, symbolic bonds and community
infrastructures constitute a sort of social capital upon which economic performance capacity also intimately depends. We return to the
social dimension in Section 6.
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Since there is no meaningful way of aggregating the grand diversity of natural resources, environmental services
and ecosystems, in practice the strong sustainability concept serves a didactic role, to signal the importance of
attention to maintaining environmental capacities or functions. Policy analysis will then focuss on the
identification of categories of critical natural capital classes of environmental resources or capacities
which, at a prescribed geographical scale, perform important environmental functions and for which no
substitute in terms of manufactured, human or other natural capital currently exist whose stocks ought to be
maintained at or above identified minimum levels. Thus, the maintenance of environmental functions (which
can be justified by a variety of ethical or environmentalist attitudes) is seen as not only an affirmation of
environmental values but also as a functional pre-condition for economic and social sustainability.
Such environmental sustainability considerations are already important inputs into many development policy
targets, evaluation procedures and objectives. For example, once environmental standards or thresholds are set,
it is possible to apply forms of multi-criteria and cost-effectiveness analysis to quantity the trade-offs between
economic output and environmental performance goals. Environmental policies can be formulated by, first,
scientific and political work to determine environmental standards or norms (for example, for pollution
emissions or natural resource consumption) and, second, to find the least-economiccost way of achieving the
defined norm(s). In practice, the setting of norms can have a highly controversial character and the
quantification of costs and benefits (and their distribution across different constituencies distributed through
space and time) can be very sensitive to, among other things, evaluation frameworks, model specifications,
timescales and so on. (This returns us to the considerations of complexity and deliberation already evoked in
Section 4.4 above.)
Of the set under review here, two projects ERPNET, SUE have specifically addressed the question of
analytical systems modelling modelling to explore prospects of reconciliation of economic with environmental
performance goals. We review their character and policy relevant findings in this section. Three other projects
POSTI, SUSTRA and GOV-PAR evoke the environmental dimensions of development with case studies
and institutional analysis in a discursive way and bring out a wide variety of considerations across the set of SEG
interfaces. We reserve discussion of these latter project findings to a later section, under the themes of inter-
disciplinary integration and governance (Section 8 below).

5.2 GLOBALISATION, ECONOMY AND ECOLOGY
Sustainability is simultaneously a global scale challenge and a multitude of local, territorial and national scale
challenges. The question of framing research strategies to take up this multi-scale challenge was addressed
notably by ERPNET
12
, an accompanying measure whose purpose was to explore options for bringing together
the different scientific disciplines involved in the research areas of globalisation, economy and ecology in an
integrated manner. Its principal product the report Globalisation, Economy and Ecology: Foundation and
Orientation for a Research Action Plan develops a set of arguments, with sectoral examples, about
appropriate analysis methods for addressing economic and environmental system dynamics.
The starting point of ERPNET is the assertion that economic globalisation affects (1) all regional economic
trends as well as (2) the state of biodiversity and therefore (3) the constraints and opportunities for national and
supranational governance. The analysis of resource-based sectors is proposed as a key facet of the interface
between the (global) economy and the environment. These sectors include agriculture, fisheries, forestry, energy
supply, mining, nature recreation and water supply. Globalisation will affect their structure, and will in turn be
influenced by the development of these sectors. In order to understand the development of particular resource
based sectors, environmental, geographical, genetic and institutional dimensions need to be considered in a
coherent way.
The report concludes that there is no single accepted theoretical basis that convincingly portrays, for the variety
of phenomena under consideration, the linkages between driving forces in sectors at the global level, their
translation into socio-economic phenomena at the regional level (such as economic specialisation), and the
expression of their ecological impacts at the local level. It is argued that, since no simple and general recipe for
such integration is available, a sectoral approach is appropriate. The proposed research strategy thus has a strong
focus on vertical integration (see textbox below), with discussions particularly of the agricultural sector as a
demonstration of this angle of attack. It also discusses analysis linkages to a higher order driver of ecological
impacts which is climate change.

12
ERPNET =Establishing a Multi-Disciplinary Thematic Research Network on Globalisation, Economy and Ecology. It
produced principally a report titled Globalisation, Economy and Ecology: Foundation and Orientation for a Research Action Plan written by
Jeroen van den Bergh of the Institute for Environmental Studies at the Free University of Amsterdam.
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Overall, the argument of ERPNET is that a good understanding of economy-environment linkages in a
globalisation context can be pursued through the use of two related analysis approaches, these being
(1) evolutionary or co-evolutionary systems approaches and (2) comparative sectoral analyses.
The evolutionary angle is helpful, it is suggested, at theoretical or conceptual level, as it allows the analysis of
structural social-economic changes in the context of environmental change.
13
An environmental/economic co-
evolutionary framework can thus support model construction, data search and policy design. Key concepts are
diversity, innovation, selection, multilevel systems, path-dependence, lock-in, self-organization and emergent
properties. Such an evolutionary paradigm opens up prospects of long-term perspectives in the social science of
globalisation and environment, as well for consistency with natural science insights on global environmental
change. Specific research questions in this context suggested by ERPNET are:
n Does economic growth select certain types of strategies by firms over others, which changes the composition of
businesses active in the world economy?
n Does globalisation accelerate technological inventions, innovations and diffusion (also to developing regions) that
contribute to sustainable development?
n Does globalisation stimulate convergence of welfare among countries, i.e. lead to a more equal international distribution
of welfare?
n Does globalisation lead to a loss of diversity in (local) environmental knowledge, culture and business strategies,
notably in resource based sectors, which will hamper adaptation to future environmental conditions?
n Or does globalisation also create new diversity that enhances opportunities for adapting to altered environmental
conditions?
n What does it mean that environmental regulation is endogenous in the long run and a global context? In particular, what
are the countervailing forces of economic growth (more support for stricter regulation) and more international openness
(more fear for competition)?
The second favoured approach is based on
gathering information on structural change,
as witnessed by changing economic sectors
(or sector classifications), sub-sectors, and
interactions or even cycles among these.
Input-output, network and vertical
integration analysis can be helpful here. In
particular, the study of raw economic data
used to construct national accounts offers
potentially much information that can serve
as an input to these analyses. The results of
these subsequently allow the linking of data
on physical flows through the economy to
data on decision-making and institutional
organisation. This in turn will support an
integrated analysis of economic and
environmental dimensions of globalisation.
Specific research questions suggested are:
n How can we measure the complexity of global product cycles and material-product chains?
n What will be the effect of regulation on such cycles and chains?
n Is there a shift from market-based interactions among specific activities in these cycles and chains to integrated,
planning-type of interactions?
n What are the implications, if any, of this shift for international trade and distribution of activities?

5.3 SCENARIO MODELING OF ECONOMIC-HUMAN-ENVIRONMENTAL
CAPITAL TRADEOFFS
Whereas the ERPNET work is essentially discursive and set at the level of programmatic intentions, the SUE
project had a more reduced and more analytical focus, addressing economy/environment and employment
dimensions of sustainability in multi-sector analytical modelling terms.
14
The SUE modelling very didactically

13
This argument is consistent with economic methodology conclusions from LGEGO, as noted earlier.
14
SUE =Modelling a Socially and Environmentally Sustainable EU.
VERTICAL INTEGRATION refers to the process through which
sequential processes previously organised in independent firms are
being co-ordinated more closely or even integrated within one
formal organisational structure (firm or business). It thus covers
more and less formalised arrangements, ranging from temporary
contracts and joint ventures to permanent take-overs and mergers.
Vertical integration can occur backwards or forwards, depending on
the perspective of the initiating or dominating firm or activity.
An evaluation of vertical integration in resource based sectors
involves the comparison of three separate effects, namely efficiency
losses through higher prices or foreclosing rival firms through using
market power, gains from lower transactions costs through co-
ordinated control, and changes in environmental externalities due to
different techniques and scales of activities. Whereas from a purely
environmental perspective vertical integration may sometimes be
undesirable, a complete economic-welfare analysis, involving the
three impacts mentioned, can give rise to a different evaluation.
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addresses the keynote question of environmental-economic sustainability, namely, the reconciliation of
economic capital accumulation (growth) and human capital maintenance (employment) goals with criteria of
wise use or husbandry of natural capital (most particularly energy). The central task of the project was the
development of a relatively aggregated multisectoral model for comparative scenario analysis, allowing
exploration of prospects of an economically, socially and environmentally sustainable development for Europe.
The scientific objectives were to:
develop a better understanding of the economic dynamics and their physical base, as well as of cost-relevant
resource-based economic feed-back mechanisms and rebound effects,
assess the impacts of implementing different strategies towards sustainable resource consumption upon
consumption, investment and economic growth potentials,
assess the related labour effects of different policy scenarios, based on economic developments
analyse strategies towards sustainable economies, by offering the opportunity to compare policy strategies
as refers to their respective impact on growth and employment,
develop strategies to enhance the move towards sustainable production and consumption patterns while
taking care in particular of the employment effects,
The policy/decision support by the model is considered as being
delivered through different scenarios and their comparison. Therefore
the SUE team formulated core questions in terms of the themes for the
scenarios to be developed:
(1) Two different reference scenarios (with a reference period from
1995 to 2020) against which to compare all policies tested. These are
(1a) a business-as-usual-scenario where trends observed for the
validation period (1985-1995) have been extrapolated into the future,
and which serves as a sort of benchmark of the (un)sustainability of
current trends in Europe, and (1b) a status-quo-scenario where 1995-
values have been maintained until 2020.
(2) Two pro-active policy scenarios that incorporate a spectrum of the
sorts of changes that would need to be introduced into the direction the
EU-15 economy development if negative consequences on natural
capital and employment are to be avoided.
As an example, one of the pro-sustainability scenarios tests out, within the limits of the highly aggregated model,
what would be the effect if the whole of the EU agricultural area was converted to organic agriculture.
According to the scenario, organic agriculture (as opposed to the business-as-usual intensive farming) is well
positioned to balance nutrient flows, and the currently set-aside land could be used for organic farming (+15% as
opposed to -20% in BAU). This opens the opportunity to reduce overproduction (in which case, the land
required under a 100% organic scenario would be 4% less than today).
The modelling further suggests that, by an appropriate selection of technologies and policies, it is possible to
obtain a significant increase in employment opportunities (as compared to business as usual, or even in absolute
terms) without damaging the environment or undermining economic capital accumulation (and, by inference,
competitiveness). The analysis thus suggests that it might be worthwhile to consider strong support for organic
agriculture, due to positive effects on biodiversity, employment, environmental balance and the economically
desirable reduction of overproduction.
Two general conclusions can be extracted from this work. First, while the model as used in SUE is not
sufficiently well specified for full confidence in quantitative results, there is a convincing demonstration of the
value of structural economy-environment modelling for exploring the opportunity spaces of future EU
economies. In particular, there is a very substantial scope, in technological terms, for achieving reductions in
key environmental pressures while maintaining economic capital accumulation. Second, however, it has to be
noted that achieving the sort of win-win-win result for economic, human and environmental capitals mentioned
above requires (in the model) a sophisticated combination of measures that have to be analysed one by one and
in their interactions, in order to find the right balance that avoids counterproductive systems side effects. It is
questionable whether, in reality, such a fine-tuning can be reliably achieved.
15
It can more prudently be
concluded (echoing also results from AITEG and SETI) that obtaining satisfactory outcomes for employment
levels in Europe given prevailing trends in international markets and innovation, is far from assured.

15
Once again, there are echoes here with the methodological arguments of the AITEGand LGEGOprojects.
THE SUE SCENARIO APPROACH
The basic question which all policy
scenarios were linked to was: By how
much would ceteris paribus an
x-fold reduction of the overall
material flows (including energy,
compared to current flows) over the
next y years, constrain the growth
potential of the EU 15 economy?
What are the implications for socio-
economic variables/indicators such
as employment, technology, well-
being in terms of material standard of
living etc.?
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6
66.
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6.1 SOCIAL QUALITY AND THE SOCIAL DIMENSION
The social dimension has often been the poor relation of sustainability related analyses. Indeed, the question
often arises, what do we mean by the social dimension. Is it the same as, or different from, concerns with
employment, equity and income distribution (etc.) as in economic welfare analysis?
An important group of projects notably WRAMSOC, DYNSOC, CHER, ENEPRI, ENIQ have
addressed, in social science terms, not only the employment concern but also a host of features that belong to the
social dimension, namely notions such as social capital and social cohesion, forms and dynamics of collective
identities (family, community, national identity and membership, concepts and realities of reciprocity and
obligation, and so on).
The first four of these projects have addressed, at different levels of theoretical abstraction and empirical detail,
the present situation and outlook for distribution of income and, more particularly, the capacities of Europes
existing and future economic systems for material social welfare provision (health services, family support,
investment in education, old age pensions, etc.). Effectively they consider social performance or outcomes with
reference to (inter alia) economic dynamism (e.g., macroeconomic performance, technology change) as an
enabling factor and/or a constraint. We review this work on the social-economic interface in more detail in
Section 7 below.
These four projects with very tangible social-
economic policy focus, are rounded out and in
many ways underpinned by the fifth of the
projects just mentioned, ENIQ
16
whose
preoccupation was in some ways more
fundamental social science, namely a
conceptual framing and operational
suggestions for indicators of social quality as a
useful tool for scientists, policy makers,
practitioners and citizens.
As emphasised in the ENIQ projects frame of
reference addressing indicators of social
quality (see textbox), the social sphere (as
distinct from the economic and political
spheres) is built up essentially through
relations of belonging and reciprocity. Lines
of tension exist at all boundaries between
different classes of collective identity, and also
within each class or community. Social policy
must, in this general context (which includes,
but is not limited to, the intra- and inter-
generational equity concerns of sustainability),
address considerations of justice and equity at two levels.
The primary level is that of the identification of the classes of community meriting respect and the
specification of the appropriate forms or norms for expression of that respect.
The second level then concerns the distribution of access to costs and benefits (viz., poverty, fairness or
unfairness in the distribution of opportunities and risks, etc.) within each broad class.
ENIQs work focussed, in both theoretical and empirical terms, on the development of indicators by which to
measure that is, to operationalise four key concepts considered to be conditional factors determining social
quality: socio-economic security, social cohesion, social inclusion and social empowerment. This meant, among

16
ENIQ =European Thematic Network on Indicators of Social Quality.
COMMUNITIES, SOCIAL BEING AND QUALITY OF LIFE
In the ENIQ* project, social quality is defined as:
... the extent to which people are able to participate in the social and
economic life of their communities under conditions which enhance their
well-being and potential....
The overall experience of social quality is attributed, in the ENIQ
framework, to four interdependent factors:
n Socio-economic security: relating to the material and other
resources that are available for the material security (provision of
protection by collective identities) and for the enhancement of the
interactions of individual people as social beings;
n Social cohesion: emerging as a function of collectively accepted
values and norms that define collective identities and enable trust
and community building [= social capital formation];
n Social inclusion: as a function of the accessibility of institutions,
networks and infrastructures that constitute collective identities and
facilitate self-realisation of individuals within communities;
n Social empowerment: as a function of individual capacities to
engage in and with collective identities in the pursuit of personal
and collective goals.
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other things, to design a preliminary index of social quality, to identify data gaps and requirements, to create the
basis for a new yardstick with which to assess the impact of social and economic policies and to develop
benchmarks for social quality. A set of national surveys have provided the first assessment of social quality and
the trends affecting it, within the conceptual framework developed by the network. Other scientific objectives
related to the processes involved in this work, engagement with wider research and policy communities and
dissemination. In addition ENIQ had explicit policy objectives concerning the creation of a explicit
theoretically grounded basis for policy making at national and EU levels.
Thus, ENIQ proposes a
prototype or preliminary
Index of Social Quality.
This is in a hierarchically
structured format, with the
four conditional factors of
social quality (as above)
which, in turn, are broken
out into 18 domains (see
table on right), then a total
of 50 sub-domains for which
there are proposed, in the
preliminary version, 94
specific indicators. In this
way, a robust tool has been
created for a new approach
to measuring the quality of
the social context of
everyday life and to
assessing the impact thereon
of social and economic
developments and policies.
In establishing the foundations upon which to develop indicators of social quality, ENIQ has made some
important contributions to social science support for sustainability policy. First of all it re-defined and analysed
the four conditional factors. Then, building on these foundations, it has also explored ways of representing the
relationship between the constitution of people as competent social actors and their actual experience of social
quality. The argument developed is that, underpinning the four conditional factors is a process which, via the
constant tension between self-realisation and the formation of collective identities, people become competent
actors in the field of social quality. Essential in this process are the rule of law, human rights and social justice,
social recognition/respect, social responsiveness and the individuals capacity to participate.
One important outcome of this theoretically based work and the complementary country studies, is that the
ENIQ team was able to highlight differences between social quality as developed in their own work, and the
many different quality of life measurements that are employed in policy and academic circles. The purpose, the
ENIQ writers insist, is not to downgrade an honourable tradition of quality of life research but to point out ways
in which their specific social quality perspective differs from it and to argue how the ENIQ developments help
to create a sound basis for policy evaluation and decisions. The essential difference is that, in contrast to the
open-ended meta-level idea of quality of life, social quality is theoretically grounded in social relations and
measured by outcomes that are defined by the same theory.

6.2 FROM SOCIAL QUALITY TO SOCIAL ASPECTS OF SUSTAINABILITY
A large fraction of the research and networking activities under review in this SYNTHESIS REPORT have
addressed questions of equity and poverty, hence questions that, depending on the frame of reference adopted,
touch on quality of life or social quality or capacities and viability for specific classes of collective identity. In a
variety of ways, indicators of poverty and social well-being have been applied, and complete indicator systems
have been designed, for cross-sectional and panel data, covering both the substantive aspects of access to
services and economic resources, and the relational aspects sometimes alluded to under the heading of social
capital such as collective identity and status in communities. This is the case notably:
ENIQ Domains of Social Quality

SOCIO-ECONOMIC SECURITY:
the extent to which people have resources over
time.
SOCIAL COHESION:
the extent to which social relations, based on
identities, values and norms, are shared
Financial resources
Housing and the environment
Health and care
Work
Education
Trust
Other integrative norms and values
Social networks
Identity
SOCIAL INCLUSION:
the extent to which people have access to and
are integrated into the different institutions and
social relations that constitute everyday life
SOCIAL EMPOWERMENT:
the extent to which the personal capabilities of
individual people and their ability to act are
enhanced by social relations
Citizenship rights
Labour market
Services (public and private)
Social networks
Knowledge base
Labour market
Openness and Supportiveness of Institutions
Personal relations
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for inter-national economic relations (SUSTRA, REGGLOB, as will be further discussed in Section 8
below), for which key classes of community include the active working populations (businesses and salaried
workers) of each country; and
for the spectrum of welfare services provision at EU and national levels (WRAMSOC, DYNSOC, CHER,
ENEPRI), as will be discussed in Section 7) for which key classes of community include vulnerable
populations of children, the aged, unemployed people of working age, the sick, invalid or infirm, and so on.
The various exercises of design and production of prototype indicator systems (notably CHER, DYNSOC,
ENIQ) have demonstrated the technical feasibility (and fastidiousness) of producing data systems permitting
cross-country comparisons; however this work has also highlighted limits to quantitative comparisons due to
variety across European societies (e.g., inter-relations between family organisation, household structure, labour
market participation, welfare regimes). At a qualitative level, a general finding that emerges from an overview
of the analyses of societal change trends is:
u Loss of societal cohesion: There is strong evidence of significant, perhaps critical erosion of social
cohesion within and between EU societies.
Notwithstanding the careful attention accorded by the ENIQ project, terms such as social cohesion are used
widely and with various meanings. Following the arguments of ENIQ, we must consider societal well-being
and, correspondingly, poverty and deprivation, as having both substantive and relational aspects. The
substantive aspects of access to services and economic resources relating to perspectives of material wealth
and poverty have been highlighted previously. The relational aspects such as collective identity and status in
communities are at the heart of what here is called social quality and also of what elsewhere is called social
capital, whose erosion (for communities) or deprivation (for individuals) lead to perspectives of social poverty.
This leads to the following general observation:
u Building communities: Several projects [e.g., WRAMSOC, and also ADAPT] highlight the stresses to
existing community structures due to rapid socio-economic change (EU enlargement, transition to market-
driven economies with globalisation), and suggest the importance of governance innovation and
rebuilding communities to cope with new challenges under radically changed conditions. The relational
considerations of collective identity and social status [highlighted in the work of ENIQ] apply notably to
the domains of international relations and national social welfare provision.
The question of communities and their relations is at the heart of social policy and of sustainability concerns.
Sustainability principles often emerge in situations of threats to specific values, communities and interests.
Arguments are developed by to justify and sustain the various interests under threat and, in some cases, to
evoke prospects of a coexistence of different
interests and forms of life. Public policy in all
domains must designate, construct and modify
the frontiers of community within and across
which different forms of duty, respect, and
solidarity are affirmed or denied. In this regard,
the feature that distinguishes the sustainability
literature relative to other writings on human
centred development is the extension of themes
of justice, respect and responsibility to include
future generations and also the non-human living
world. Sustainability ethics and politics are
about stewardship of current wealth with regard
to future generations of human society and with
regard to biodiversity. The conservation and
enhancement of ecosystems as habitats for living
biological diversity, may be motivated as much
by ethical convictions of respect and coexistence
and not just by utilitarian concerns of economic
opportunities and personal amenity (see textbox
Sustainabilitys Stakeholders).
One general way of analysing well-being and
poverty prospects is, once the classes of
community meriting respect have been specified, to identify directions of action and corresponding indicators for
the reduction of life-threatening stresses due either to undue VIOLENCE (of one community towards another) or
to INSUFFICIENCY of available means of subsistence.
SUSTAINABILITYS STAKEHOLDERS
(THE CLASSES OF COMMUNITY TO BE TAKEN INTO ACCOUNT)

THE PRESENT GENERATIONS, which, depending on governance scale
and circumstance may be taken to include:
Different groups of 'us' in our respective backyards;
Powerful political &economic elites (with their contested
legitimacies, including culture and religion);
the rest of humanity (the poor, the meek, or the people);
Different regions or territories (defined physically or politically)
within a country, continent or the world;
Different cultural groupings (specified along geographical,
linguistic, racial, ethnic, religious and other demarcation lines);
Those parts of us that are 'internalised' in the marketplace (as
actors of the economic sphere);
... and those parts of us that (as actors of the social sphere)
remain external to the economic sphere...
THE FUTURE GENERATIONS (with all the same internal demarcations
as the present ones).
The various species, living communities and habitats of THE NON-
HUMAN WORLD.
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The set of projects reviewed here have, for various classes of community, identified the demarcations
(institutional, temporal, geographical) that are applied at different scales, and explored problems of establishing
principles of, and limits to, respect and fairness towards other parties. It is important to note, however, the ways
that relative to the full spectrum of conciliation issues that sustainability engages the coverage of this
research appears as rather ad hoc.
u Several of the projects have addressed equity challenges for the present and next generations in a
perspective of societal change and welfare reform [e.g., WRAMSOC], but they did this without
systematically articulating the challenges across the two new stewardship frontiers (respect for nature
and the societal long term). Inter-generational justice questions have been addressed only partially:
formally but at a high level of abstraction in one contribution [LGEGO], and touched on diffusely in
several others [SUE, SUSTRA, POSTI, ERPNET].
u None of the reviewed projects has addressed specifically the human / non-human axis on ethical and
cultural planes. Non-human nature does not voice demands directly in political forums. Rather, actors in
the social and economic spheres relay societal claims about the status of nature and on behalf of the
environment into the political arena. This question of societies claims for and from non-human
communities could be made a point for ongoing research enquiry, to be developed as a topic of multi-
stakeholder deliberation.
The highlighting of these limitations of coverage does not constitute a criticism of the projects themselves, as
this feature stems directly from the specific scope and purposes of the EC research programme concerned.
Nonetheless, observation of these gaps leads us to the suggestion that there could be substantial benefits to be
gained through systematising reflection both conceptual and empirical on the classes of community,
vulnerability and poverty that, from a sustainability transversal standpoint, European social and economic (and
environmental) policy should address. This could become an integrative theme for ongoing research on
indicators for sustainability and social welfare provision (see Section 9 below).
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7
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At the price of a bit of schematic simplification, we have used themes of the ENIQ project, in Section 6 above,
to highlight some specificities of the social dimension. This allows us, still in a didactic manner, to set up
perspectives for analyses on the interfaces of social and economic dimensions. As earlier noted, each of the
projects DYNSOC, CHER, WRAMSOC, ENEPRI have addressed, at different levels of theoretical abstraction
and empirical detail, the present situation and outlook for distribution of income and, more particularly, the
capacities of Europes existing and future economic systems for material social welfare provision (health
services, family support, investment in education, old age pensions, etc.). We discuss the findings of these
projects now in more depth, as distinctive contributions to socio-economic facets of (sustainability) policy
science.

7.1 FAMILY, ECONOMY AND SOCIAL FRAMEWORKS
The DYNSOC
17
project focused on three major and interconnected aspects of peoples lives their families,
their experience of employment, and their incomes investigating not only the resources, circumstances and
behaviour of individuals, but also the interactions between individuals and the wider social frameworks within
which they live. This analysis made use of a fourfold welfare-regime typology that proposes:
a social-democratic regime, found in the
Scandinavian countries;
a liberal regime in the UK and Ireland;
a corporatist regime in continental Europe;
a residual welfare regime represented by
Portugal, Spain, Italy and Greece.
Immediately it can be seen that this project, like
others of the group we consider here in Section 7,
engages us in comparative institutional analysis at
both macro (national welfare and employment
policy) and micro (family) scales. In some
instances, it was found, this 4-fold typology
accommodated well the project findings; in other
instances the typology was less useful and so the
research suggest why it does not fit, and
appropriate alternatives (see textbox example).
The DYNSOC findings show, not surprisingly,
that national scale social policy does have a high
correlation to family patterns, and that welfare
policy regimes are significantly linked to forms of
well-being and patterns of behaviour.
In some cases, the causality of the links between policy and outcomes is unmistakable: for example, the re-
distributive nature of the Scandinavian tax and benefit systems leads to less inequality and lower levels of
poverty and deprivation in these countries, compared with others where redistribution is not a primary objective.
This is the case when a single year is considered, and the effect emerges even more strongly when multiple short
spells, or single longer spells, of poverty are considered. The same is true in reverse for the liberal and residual
welfare regimes where higher levels of poverty and inequality are observed both in terms of a single year of
poverty and, more markedly, when multiple or longer spells are considered. Thus, in terms of inequality and
poverty, a ranking of welfare regime types is observed, with social-democratic regimes at the top, followed by
corporatist regimes, with the liberal and residual regimes doing least to address poverty and inequality.
Another case where the links between policy and behaviour are clear is in the labour market transitions of older
people. In social-democratic and corporatist welfare regimes where exit routes from the labour market have been

17
DYNSOC =The European Panel Analysis Group on The Dynamics of Social Change in Europe.
WELFARE REGIMES & HOUSEHOLD STRUCTURES:
A 3- OR 4-FOLD TYPOLOGY?
The analysis of household structure and family status offers
a strong and simple hybrid typology of countries. It consists
of three groups rather than the four discussed earlier and
indeed may be viewed as something of a continuum from
north to south. The observed groupings were as follows:
a Nordic grouping, consisting of Scandinavia and the
Netherlands;
a northern/Protestant grouping consisting of the
continental European corporatist regimes, plus the UK;
and
a southern/Catholic grouping consisting of the
residual welfare regimes plus Ireland.
Household size increases substantially from north to south.
There are similar contrasts in age of first independent
household formation, with, for example, young men first
leaving home in Nordic countries on average about five
years earlier than in southern/Catholic countries.
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developed for older workers (schemes for early retirement, or partial retirement), job to non-job mobility among
older workers is higher than in other regime types, but transitions to unemployment are much rarer.
Detailed analysis of employment and unemployment showed that there is a marked degree of commonality
between European countries, as well as differences between countries and regime types. Similarities are
represented, first, by the low outflow rates, measured over a three-year period, from the states of employment,
self-employment, retirement and out of the labour force. Throughout the EU, the proportions leaving their
respective states were very low during the three-year observation window. The standard four regime typology is
found to work reasonably well for the analysis of these differences. In particular, the proportion of people
escaping from exclusion defined as being out of work over a 12-month period is higher in the residual
regimes. The social-democratic regimes have the lowest rates of downward mobility into full labour market
exclusion. But this is bought, in part, at the cost of lower rates of upward mobility into the fully employed
category: liberal regimes have the highest rates of this sort of upward mobility, followed closely by the
corporatist, then by the social-democratic, and then at some distance by the residual state regimes.
However, although correlations between policy and behaviour are often clearly visible, causality is sometimes
more difficult to establish. For example, there is a marked relationship between the quantity of day-care
provided for children by the state, on the one hand, and the extent of womens participation in the labour market
participation, on the other. But is this cause or effect? Does the policy cause the behaviour i.e. that mothers
stay at home or go out to work in response to the states provision of day-care or is it the case, to an extent at
least, that state provision of day-care has been driven by demand from working mothers?

7.2 ROLES FOR INDICATORS AND HOUSEHOLD PANEL DATA
A feature of DYNSOC is a set of strong recommendations about the best means of collecting and presenting
social and economic indicators on such topics as employment, income, labour market statistics, poverty, and
deprivation:
The importance of including longitudinal elements. A single spell of poverty lasting less than one year is
qualitatively not the same as repeated spells of poverty, or a single spell of several years in poverty in
terms of the probability of making an eventual exit from poverty, in terms of the associated non-monetary
deprivation, or in terms of longer-term social exclusion and reduction in life chances. Similarly, a single
short spell of unemployment is qualitatively quite different, in a multitude of ways, from repeated short
spells of unemployment, or a long-term spell of unemployment.
EU integration and the notion of the poverty line. At present, poverty in Europe is measured on a
country-by-country basis, using poverty lines defined in relation to the median purchasing power within
each country. As European integration progresses, there is also a case for defining a single European
poverty line, based on the median household income across Europe as a whole, adjusted for the cost of
living. This measure would increase the proportion of people observed to be poor in low-income countries
(in southern countries, plus new entrants to the EU) and would decrease the proportion calculated as poor in
higher-income countries. A standard European poverty line might accord better with peoples perceptions
of their financial situation than the current practice of defining country-specific poverty lines.
Poverty and deprivation. There is a high pertinence in developing multidimensional measures of
deprivation, rather than simple measures of poverty be these cross-sectional or longitudinal. Even when
deprivation is measured in terms of items of daily living which people cannot afford (where we might
expect relationships to be most straightforward), the income-poor are not always deprived, and the deprived
do not always have low incomes. In other aspects of life, such as living in high-crime areas, or social
isolation, there is virtually no association between poverty and deprivation. Simple measures of poverty
should be used alongside broader measures of deprivation; the two types of measures are distinct and both
useful. The policy debate has moved outwards, from a central concern with poverty to a more holistic
concern about broader aspects of social exclusion; reported statistics should mirror this shift in the debate.
Concerning the standard definition of economic activity. The practice of dividing people into those
employed, those unemployed and seeking work, and those out of the labour force, ought to be reconsidered.
This definition may understate the potential labour force of a country, since it assigns to the out of the
labour force group a sizeable number of people who are not actively seeking work, but who are in fact
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potential workers. They are relatively easy to identify by means of straightforward questions, and collecting
information on this group may greatly enhance the usefulness of labour market statistics.
18

This set of recommendations is reinforced and complemented, in a specific way, by the work of the CHER
consortium
19
which was established in 2000 to carry out a feasibility study for a data production and
dissemination exercise. The overall goal of CHER was the development of a comparative database for
longitudinal household studies by harmonizing and integrating micro datasets from a large variety of
independent national panels and from the European Community Household Panel (ECHP). The resulting
database covers demography, health, education and training, employment and activity, income and expenditure,
housing and household durables, and also some aspects of subjective information and social relations. The
potential of the CHER database for cross-national research is much greater than what is available from the
ECHP alone. For example:
It makes possible EastWest comparisons.
It can supply information about objective as
well as some selected subjective living
conditions, about the process of change in
various areas of life and about the links
between these areas and the changes
themselves.
A complementary database containing key
information about macro data, social security
and employment policies allows enhanced
analysis of social policies.
The CHER database has been and will continue to
be used to carry out analyses focusing on
understanding the dynamics of socio-economic
change in Europe. Researchers can now start with
a completed dataset rather than trying
independently to harmonize the smaller subset of
variables that is most useful for their research
topic.
The main advantage of longitudinal panel
information compared to cross-sectional
information lies in its potential for analysis of
socio-economic dynamics on the micro-level. A
classical example for illustrating the usefulness of
panel data is given in the field of poverty analysis:
before the existence of panel studies, cross-
sectional data only showed a certain percentage of
poverty in year one and another percentage,
perhaps the same, in year two. It was impossible
to know whether the poor population was the
same in year one and two, or how many of the
poor managed to exit from poverty. Panel data
shed light on these movements, since they make it
possible to follow individuals over a life cycle.
20

The added value to the ECHP from the CHER
project is that the CHER dataset can serve as a
gateway encouraging researchers to explore further
research questions available for those country

18
The DYNSOC project reports also note that the precise definitions of unemployment applied for analysis purposes were found
to be important in nearly all countries, with significant differences between a definition based on self-reported status, and one based on
standardised criteria. Among those who fail to qualify as unemployed on formal criteria, there are also important differences between
those who may be defined as outside the labour market, and those who retain some attachment to the labour market a hidden labour
force. However, these differences appear to be common across (nearly) all countries, with no systematic welfare-regime effects.
19
CHER =Consortiumof Husehold Panels for European Socio-economic Research.
20
This responds to a type of indicator need that was also recognised specifically by DYNSOC, see above.
The CHER Consortium pursued the following
tasks and procedures to create a comparable
longitudinal database:
n develop and (re) define rules for standardization
n build up and/or enhance/reconvert the respective panel
databases for comparability
n create documentation and users guides for the
resulting database
n collect and prepare key information taken from macro,
meso and institutional data and documentation
n improve information on and access to original country
panel data
n enhance the ECHP disposable data for scientific use
n enhance the data processing techniques for using panel
data
n set-up of an internet information system on household
panel studies
n create a bibliographical database
n run exemplary panel analyses in different research
fields.
Firstly, relevant subsets of variables for selected topics from
original panel data were dentified, and these variables were
made comparable by taking care to use standard
classifications (e.g., International Standard Classification of
Occupation [ISCO], International Standard Industrial
Classification of all economic activities [ISIC]) where
possible, not to collapse values (e.g., for nationality and
professions), not to top code variables (e.g., age or income
values), and by making a clear distinction between gross
and net income components and between original values
and imputed values (e.g., concerning income), as well as by
standardizing missing codes and imputation flags.
Secondly, a relational database structure was prepared to
support the analysis of the data, by naming the variables in a
consistent manner (appropriate for panel analyses), creating
a set of link variables (e.g., links to spouse, father and
mother) assuring the links to the original datasets, ordering
variables according to analysis requirements, reducing
unnecessary complexities in the original panel files,
providing information on household and individual level
and guaranteeing a user-friendly organization in file
structures.
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datasets for which the questionnaire is sufficiently in line with the ECHP questionnaire. For ease of use, CHER
includes a table of summary variables that are not directly available from the ECHP. Furthermore, CHER
includes more countries than are available in the ECHP and allows East-West comparisons and, finally, more
years of data are available for selected countries than were converted into ECHP format.

7.3 ANALYSIS OF WELFARE REGIMES AND WELFARE REFORM
The CHER database, together with information from existing macro data databases and institutional information
about social security (MISSOC) and employment policies (MISEP), is effectively a tool for improving (policy)
relevant socio-economic knowledge. To see the pertinence of this sort of database exploitation, it is sufficient to
consider again in this light the problmatique of the DYNSOC project (as above) and, by extension of
WRAMSOC and ENEPRI (see below).
The DYNSOC project has offered a snapshot
of similarities and differences in welfare
regimes and patterns of individual and human
behaviour, across the European space. Rather
importantly, it is concluded that despite the
striking and important cross-country
differences observed in almost all aspects of
the lives across the EU, there is a high degree
of commonality across countries in terms of
many of the processes involved. In a context
of globalisation this deeply historically
rooted commonality should not be overlooked.
The WRAMSOC project is more explicitly
focussed on understanding and thereby
influencing trends of change in European
welfare systems (see below). Through a
variety of documentary analyses and
interviews with policy actors, it has examined
changes in a range of policy areas for seven
EU countries and also at EU level.
The ENEPRI network has carried out work on
the subjects of labour markets, enlargement
and migration, population ageing:
consequences and policy issues; and ageing
and welfare systems.
In effect, relative to this sort of research activity, CHER provides a uniquely comprehensive database as a tool
for analysis. For example, this database enables researchers to do within-country comparisons at the same time
as cross-national comparisons (see textbox). International comparisons allow for some ranking of national
results concerning, for example, questions of poverty, unemployment or labour force participation. One
particularly relevant finding is the fact that advanced western-type states face socio-economic problems that are
similar, while the relative importance of these problems within national economies may be quite different.
The analyses conducted by both WRAMSOC
21
and ENEPRI
22
suggest an important tension between (in the
language of WRAMSOC) reforms based on retrenchment in response to fiscal pressures and demands that
welfare states contribute to competitiveness through cost savings, and reforms constituting attempts at
modernisation which for the purposes of this project means attempts to tackle new social risks and to
meet new aspirations of citizens. In the latter case, European welfare state policies are evolving to meet a

21
WRAMSOC =Welfare Reformand the Management of Societal Change.
22
The ENEPRI =European Network of Economic Policy Research Institutes was created in 1999/2000 at the initiative of the
Centre for European Policy Studies (CEPS), bringing together leading national institutes from a number of EU member states and
accession countries. The network fosters the international diffusion of existing research, help to co-ordinate research plans, conduct joint
research and increase public awareness of the European dimension of national economic policy issues. Activities include the organisation
of workshops and conferences, the publication of working papers and policy papers and the formulation of joint research programmes.
Use of the CHER database in comparisons of
regime performance in tackling social exclusion
Understanding poverty and the low social status often
ascribed to living in or on the verge of poverty requires
consideration of more than just the financial resources
available to individuals and their households. Access to
goods and facilities over time has been shown to have a
significant link with levels of poverty, but this association is
complex, and the dynamics of lacking basic items over time
are not restricted to households struggling to make financial
ends meet. Therefore, the relationship between the degrees
of non-monetary deprivation is explored. Non-monetary
deprivation is defined here as not possessing certain
household goods and living in a house that lacks facilities
and presents problems that impact on quality of life and on
income position. The CHER research made a comparison
of some selected monetary indicators of economic well-
being of children (up to 16 years of age) across Europe.
This addresses the incidence and relevance of family related
public transfers and allows an analysis of the connections
between (insufficient) family transfers and resulting child
poverty. Here poverty rates, poverty gaps, sequences of
poverty spells and income mobility are studied. The results
may help in assessing the role of family benefits for income
formation and income situation, e.g., empirical evidence on
how successful the different welfare regimes are in
safeguarding children from poverty.
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changing agenda of recognised citizen need, rather than simply defending (or even regressing relative to) the
status quo under changing circumstances.
The new risks in question here are partly a matter of changing visions and partly a matter of changing
economic and institutional conditions. WRAMSOC identifies three main classes:
In the context of trends sometimes called post-industrial society, sometimes called globalisation (etc.),
full employment for the active population is (for the meantime) a lost dream. Not only does this contribute
to fiscal stress across the whole welfare system, but also, as reforms introduce increased or different forms
of labour market flexibility with the goal of reducing unemployment, there are new profiles created of
exposure to job loss or job change situations.
Balancing paid work and family responsibilities, especially childcare or care of frail elderly relatives. The
general aging of populations in Western Europe means that there is a growing fraction of frail elderly people
in the population, many of whom are in need of regular or permanent care. Younger adults who, in a family
context, might be called upon to provide this care, usually have no perspectives of paid leave or welfare
support for this caring (which, from certain standpoints, is analogous to parent care of children).
As age, childbirth, family structure and immigration demographics and fiscal realities change, welfare
system restructuring (such as benefit conditionality, recommodification of pensions or other restrictions
to income support in conditions of unemployment) can reduce some categories of income entitlements or
rights, leading to new patterns of stress, deprivation or contention.
These problem areas are reiterated by ENEPRI who have carried out work notably in the fields of: Labour
markets, enlargement and migration; Policy rules, policy competition and economic modelling; Population
ageing: consequences and policy issues; and Ageing and welfare systems. According to ENEPRI, pressure on
welfare systems will increase not only due to enlargement and globalisation but also, and even more so, due to
the ageing of population. They note, for example, that the expected rise in longevity will lead to longer periods
spent in retirement, undermining the sustainability and viability of pension schemes. Consequently, pressure is
mounting to scale down early retirement plans in favour of an increase in the statutory retirement age. This
again will lead to an even more pronounced ageing of the labour force, with, notably, an increase in the average
age of a large number of professions and additional adjustment problems for a number of low-skilled labour
market groups....
Policy relevant findings of these two projects can, as in earlier sections, usefully be distinguished as, on the one
hand substantive and, on the other hand methodological.
As a general substantive finding, the WRAMSOC work in particular highlights ways that welfare regime
differences, determined in large part by responses to old risks,
23
are powerful factors in influencing the extent
and ways in which new risks are given recognition.
Also as a substantive finding, ENEPRI analysis highlights the ways that ageing of the EU member
populations is pushing policymakers to make welfare system reforms in directions of risk or cost reduction (as
the risk-return trade-off is worsened by falling returns and a narrowing contribution base) and to look at new
ways to invest in (the maintenance of) human capital. Because of the interdependency of countries and of
different facets of welfare regimes, this requires policy makers to reconsider ageing and pension systems in a
comprehensive framework. Risk can be absorbed by raising the effective retirement age, e.g., by indexing the
retirement age to life expectancy. At the other end of the age spectrum, there is a conflict between the need to
slow down the decline in fertility and the wish to raise (female) participation. Solving this conflict calls for a
system that stimulates a more equal distribution of labour over the lifetime, thus internalising external effects of
fertility. This diagnosis leads the ENEPRI researchers to make the suggestion that there is perhaps general and
increasing need for a pension system with three main elements: (1) a reformed pay-as-you-go pillar which is
actuarially fair, features a transparent notional account set-up, and freezes contribution rates at the current level;
(2) a funded component which is based on US-style grouped accounts that finance the impending aging burden,
and (3) to combat poverty the pension system should in all countries be augmented by a first pillar scheme with
re-distributive features that guarantee a minimum pension and strengthen human capital formation.
Overall, there is a strong suggestion across the diversity of analyses and diversity of social welfare models in
different parts of Europe that, notwithstanding reform efforts, the current EU prospects for human capital
maintenance and mobilisation are not good. Although WRAMSOC proposes that, notably in employment
centred issues there has been considerable evolution in the direction of new social risk recognition, all in all,

23
The WRAMSOC project seems here to adopt notions of welfare regime typology similar to that proposed, a lot more didactically,
by the DYNSOCproject mentioned above.
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the results and arguments of this project and others in related domains (ENEPRI, and also DYNSOC, AITEG,
CHER) suggest that:
Despite strong evidence that current employment policy and social welfare system designs are unlikely to
achieve societal goals for human capital maintenance and mobilisation, there is considerable institutional
inertia and, the reform/innovation process is slow even in the face of recognised new needs.
Given observable trends concerning economic capital accumulation, technology and markets (innovation,
globalisation) and demography, there will be difficulties with reducing the currently high unemployment levels
and there will be (worsening) difficulties with maintaining public investment in human capital (education, health
care, pensions) and financing institutionalised social welfare programmes.
As a general methodological finding, the ENEPRI work highlights the complexity of socio-economic system
dynamics and therefore reinforces messages already noted from AITEG about the need to look for simple and
robust ways of framing analysis, and to accept partial insights from a variety of models and methods. Proof of
this comes from the work in the field of policy rules, policy competition and economic modelling.
24
Given that
assessment of the effects of policy measures increasingly depends upon economic models encompassing features
considered as essential for the specific policies and measures assessed, it becomes important to allowing a
confrontation and comparison of the simulation properties of key national and internationally managed economic
models in order to assess the robustness and credibility of their findings.
For example, ENEPRI studies focussing on the results of simulations confirm a theoretically based hypothesis
that the absolute size of short-run cross-border externalities is rather low. The two basic transmission channels
working through trade and capital market cancel out each other to a large extent. The spillovers hardly seem to
pose any important threat to European economies and it is disputable whether they would call for a more
extensive cooperation framework. However, the
considerable variability of simulation results between
the models relating to the size and, at times, also the
sign of spillovers makes it impossible to have any great
confidence, from the simulation modelling, about what
will determine the real impact of economic policies
undertaken in one country on the economic variables of
the others (see textbox). This makes science based
policy coordination very complicated if not unfeasible,
as the policy-makers do not know or will not agree
about the true model according to which they could
coordinate their economic policies. Although we may
not know the right model (or, there may not even be
one, in a general sense), we do know that a bad choice
of model can certainly have welfare decreasing
consequences relative to system potentialities. Since
the currently used models are usually calibrated with
the use of historic data for the last couple of decades, if
some structural characteristics of economies change as a result of functioning of the monetary union, the
outcomes of the model simulations may be considerably different to the reality even if other features are
credible.
These sorts of features have led ENEPRI researchers to stress the need for identifying, where possible, simple
and robust bases for comparison of welfare regimes and their evolution. Detailed analyses with finely calibrated
simulations may not have a lot of added value if the variability of results across (among other things) model
types is know to be high. This applies to such domains as comparison of benefit systems and the generosity of
pension systems as a part of the question of the overall economic cost of ageing.
It can be concluded, that in the face of the observable stresses on the economic/social interface and the
difficulties of obtaining clear and robust simulation results for welfare reform policy it will not be easy to
achieve the reorientations of public policy, economic investment and societal partnerships desirable for
responding to new risks. In the context of our review theme of SEG aspects of sustainability, we should extend
this notion of new risks to those associated with environmental change and technological innovation (e.g.,
monitoring of health dangers, principle of precaution) and for technological and product use changes

24
This part of the ENEPRI work involved two large workshops both organised by the French CEPII and a conference organised by
the Netherlands Bureau of Economic Policy Analysis (CPB).
Model Contingency and
Care with formulating Policy Advice
Simulations with large-scale macroeconometric
models thus do not seem to provide a conclusive
evidence concerning the nature of the cross-border
spillovers of fiscal policies in the EMU. In general,
their absolute size is indeed rather small but, when one
disaggregates the average figures, an extremely
colourful picture appears. The absolute size of
spillovers varies widely among countries. And so does
their sign. Therefore, it seems improbable that the
EMU members would take the cross-border
externalities as a serious argument in favour of
strengthening of fiscal policy coordination. It is also
unlikely that the countries could agree on a concrete
mechanism that would be advantageous for all.
(Source: ENEPRI )
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contributing to environmental sustainability. In what ways should reforms to welfare regimes seek to take
account of the as-yet unborn or virtual members of our societies, the future generations?
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8
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This section might, in analogy with those preceding it, be titled governance aspects. But, as highlighted by our
4-spheres schema (Section 3), governance is transversal across the economic, social and environmental
spheres.
One part of what some commentators would call investment in social capital relates to building up capacity
within the political sphere for decisions and policymaking addressing the full spectrum of societal needs.
Among the conclusions that emerge from the discussions so far is that, while major progress towards
environmental sustainability of EU economies does seem to be technologically feasible on the basis of existing
knowhow (efficiency gains, environmentally friendly process and product innovation); when we look at the
institutional complexities and inertia of policy reform we can see that more sustainability is a societal choice
that, under prevailing conditions of fiscal stress, will be difficult to implement. GOVERNANCE for sustainability
means, as we have said, working with a triple bottom line the simultaneous respect for quality/performance
goals pertaining to the SOCIAL the ECONOMIC, and the ENVIRONMENTAL spheres. This also means, evidently, that
the political sphere must itself be geared towards sustainability. This brings several new challenges that are, in
part, challenges in capacity building that can be aided by socio-economic research.

8.1 INSTITUTIONAL COMPLEXITY, CHANGE AND DELIBERATION
The term sustainability is correlated, in science and policy circles, with the passage from a belief in simple
criteria of quality and choice, to an admission that things are complex. Governance and decision-making
emerge as argumentative processes about needs, power and the criteria for justification and legitimacy:
n The natural and technical sciences, although yielding ever-new insights allowing progress in productivity, quality of
services, comfort, reliability and so on, can neither fully master nor judge the significance of, the emergent systems
complexities that the science and technology practices themselves contribute to.
n Economic science, constructed for more than two centuries as the science (or art) of decision support for choices under
constraint, can help illuminate but not in itself resolve the crucial problems of social choice of our times, e.g., equity
and justice in the distribution of economic opportunity; health and environmental risks associated with innovation and
ecological change, integrity and viability of local as well as global communities.
Current progress in technology is characterised by an
extraordinary precision in engineering and functioning and,
at the same time, by a deepening of capacities for
intervention in natural processes modifications to
organisation at the scales of atoms (nuclear fission and
fusion), of molecular and cellular structures (gene spicing
and cloning technologies), and of ecosystems and planetary
climate dynamics. The resulting new forms of organisation
(or disorganisation) are dynamic (ecosystem change,
hydrological cycles, atmospheric circulation) or have a long
active life (radioactivity) or are potentially self-renewing
(genetically modified life forms). It is increasingly seen
that technological prowess, for all its marvels, constitutes a
self-renewing source of problems and risks (possible
future problems). This fuels anguishes within society and
policy dilemmas about the acceptability of the risks to be
run.
Several of the projects already mentioned have had important arguments, insights or analysis examples to offer
on such points. However, in the paragraphs that follow, we draw more particularly on the sub-set of projects not
yet reviewed, all of which have, in one way and another, a strong institutional analysis dimension. These
projects are PUBACC, ADAPT, SUSTRA, POSTI, and GOV-PAR. Among the principal themes to be
brought out, we mention in advance:
u Consequences of technological risks for governance: Controversies over scientific-technological
developments (energy, health, agriculture, infrastructures, etc.) have led, in many EU countries to civil
society initiatives to propose new forms of governance with emphasis on stakeholder and citizen
COMPLEXITY AND SUSTAINABILITY
The complexity that characterises sustainability policy
can be evoked by three interdependent considerations
(cf. Funtowicz & Ravetz on Post-Normal Science):
n Scientific knowledge advising of irreducible
uncertainties and/or irreversibilities associated
with courses of action;
n Plurality of value systems, political and moral
convictions, and justification criteria within society;
n High decision stakes including economic interests
and strategic security concerns for nations or
ethnic minorities (etc.), and also consequences of
environmental change for public health, organism
integrity and future economic possibilities.
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participation [PUBACC, POSTI]. These innovations have strong intellectual and societal justifications,
hence potential legitimacy, but they challenge directly the more traditional public accountability
provisions. Up until now, the new precepts and mechanisms of public accountability have not managed to
demonstrate stable and viable alternatives to the traditional forms.
u Policy roles for public deliberation: Several of the projects have documented initiatives for new
governance institutions based on a deliberative model of multi-stakeholder dialogue, where a full
spectrum of societal concerns and considerations can be brought to bear on the problems and, implicitly or
explicitly, power and legitimacy questions are raised [GOV-PAR]. The domains addressed include
(1) technology assessment and environmental risk governance [POSTI] and (2) trans-national dialogue
[SUSTRA] with the objective to democratise global governance relating to trans-national corporations
and trade policy.
u Diversity of conceptions about public accountability: There exist very significant differences in the
conceptions, expectations and operational conventions of public accountability across EU and candidate
countries [ADAPT, PUBACC]. Also, there are complex mixes of formal and informal accountability.
u Enduring institutional complexity: It is illusory to imagine a rapid convergence of governance
models and practices (e.g., based on simple transfer of procedures from western to eastern Europe or
from northern to southern Europe) and, indeed, it would be both premature and counterproductive to
push for a rapid pan-European harmonisation in this sense [ADAPT, PUBACC, SUSTRA, GOV-PAR].

8.2 PUBLIC ACCOUNTABILITY AND EU GOVERNANCE REGIMES
The PUBACC
25
project is one of several in the group under review that have sought to advance the
conceptualisation of public accountability within a contemporary perspective of governance, and to provide
comprehensive empirical and comparative analysis of recent, complex socio-political issues of public policy-
making. Carried out in 2001-2004 by a research team from the Czech Republic, Denmark, France, Germany,
Latvia, Portugal and the United Kingdom, it aimed to: (1) analyse public accountability in relation to three
different policy-making areas (GM crops, household waste, transport infrastructure projects) in the seven
national settings as well as at European level, and (2) discuss the significance of public accountability for
contemporary democratic governance and legitimacy.
The PUBACC research shows that there are substantial and significant differences in the conceptualisation (and
not just the practices) of public accountability in the seven countries analysed. This diversity needs to be taken
seriously when considering issues relating to policy effectiveness and public accountability at European level
(e.g. themes of the European Commissions White Paper on European Governance) and in relation to proposed
new forms of (multi-level) governance (as will be discussed also with reference to the GOV-PAR project
below).
The differences in both the conceptualisation and practices of public accountability can be explained with the
different historical, political and cultural traditions in the countries analysed. These different traditions are
characterised in terms of historical legacies, constitutional framings, the structures and functions of state
institutions, policy regimes, and the conceptualisation of civil society and the public sphere.
There is a significant difference between the provision of formal structures and procedures of public
accountability through state systems, on the one hand, and the practice and lived experience of public
accountability in policy-making and public sphere discourse, on the other.
This difference can be interpreted as a (relative) dysfunction of formal public accountability provisions, as
they do not manage to provide adequate responses to complex policy issues.
There has, correspondingly, been a growth in extra-parliamentary public accountability processes and
social mobilisation processes initiated by civil society actors within the public sphere in response to the
perceived dysfunction of formal public accountability provisions.
Hence, the processes of Europeanisation, especially in relation to Accession countries (the PUBACC case
studies include Portugal in the 1980s, the Czech Republic and Latvia in the late 1990s/early 2000s), has had a
double-sided (and for some people unexpected or counter-intuitive) impact on public accountability procedures
and discourses. On the one hand, democratisation and reform processes have fostered more visible formal public
accountability provisions (e.g. through the ratification of EU law in national legislation). But, on the other,
Europeanisation has often meant that effective real accountability processes rooted in countries specific histories

25
PUBACC =Public Accountability in Contemporary European Contexts.
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have been overlooked and even curtailed, due to the pressure to adopt EU law and regulation without in-depth
debate and scrutiny at national and sub-national level.
An example on these points is given by PUBACC of scientific-technological policy issues that, it was found, are
very differently characterised in the seven national contexts. Latvia and the Czech Republic have, to date,
experienced much less social and political controversy than the other countries considered in the project (where
scientific-technological issues have frequently been high up on the political and public agenda in recent years).
In several Western European countries, the often controversial nature of scientific-technological developments
as exemplified by GM crops, the BSE crisis, environmental pollution has led to attempts on the part of
state institutions, policy-makers as well as civil society actors to innovate in new forms of governance, with
emphasis on stakeholder and citizen participation. This, in turn, challenges more traditional public
accountability provisions. With the rising complexity and uncertainty of technological innovation, new
mechanisms of public accountability have been explored without, however, fully managing to provide successful
alternatives to traditional accountability mechanism to date.
These themes of (1) institutional variety across EU countries and (2) institutional change with sometimes
inconclusive or ambiguous effects, are also at the heart of the ADAPT
26
project which, again on the basis of
cross-country comparisons, draws a set of broad comparative conclusions regarding the Europeanisation of
regional and environmental policy-making and the extent of adaptation in the Cohesion (Greece, Ireland,
Portugal) and CEE (Hungary and Poland) countries under consideration. The principal findings from ADAPT
are:
The Europeanisation of regional and environmental policy-making has considerably impacted upon the
policy-making processes, administrative structures and institutions in all the countries under consideration
and has subsequently led to widespread learning and adaptation. Learning and adaptation have been more
extensive in Ireland regarding regional policy-making with Greece, Portugal, Poland and Hungary all
demonstrating slow learning tendencies and limited adaptation capacity. In the field of environmental
policy-making, the three Cohesion countries are much better off though learning and adaptation are on-
going processes with still a long way to go.
In the field of environmental policy-making all countries can be characterized as laggards facing high
policy misfits. Europeanisation has led to significant legal harmonization but has not been successfully
followed by the necessary institution-building and establishment/functioning of the required implementation
and enforcement mechanisms.
Despite serious attempts at decentralization of public administration and policy-making processes, the
central state continues to play the key role in policy-making, to dominate networks and partnerships and to
control the majority of power and financial resources setting considerable impediments for learning and
adaptation. Some of the bureaucratic requirements of the Commission (especially in the field of regional
policy-making) seem to be re-enforcing that trend.
ADAPT concludes (once again in resonance with PUBACC lines of argument) that a balance should be pursued
between ensuring legitimacy, which demands more extensive participation and involvement of a greater number
of local and regional authorities and social actors, and ensuring efficiency towards problem-solving and effective
monitoring and evaluation. The current trend in several member-states for more centralized methods presents a
potential threat towards the domination of the central state institutions and structures and demands an urgent re-
orientation towards a greater balance between central state and regional governance institutions.
Concerning human capital investment for regional/local community capacity building, the ADAPT project
proposes that the EU should also consider the allocation of special funds for the development of local and
regional capacity building to increase understanding and commitment at all levels of governance. This is seen as
an opportunity for the EU to deliberately promote human capital investment to facilitate and accelerate
adaptation.

8.3 MULTI-LEVEL AND PARTICIPATORY GOVERNANCE
All of PUBACC, ADAPT, GOV-PAR and SUSTRA have (each in their own ways) a focus on the multiple
scales of institutional organisation for governance or regulation of social and economic affairs and, more
especially, for pursuit (or non-pursuit) of sustainability goals.

26
ADAPT =EU Enlargement and Multi-level Governance in European Regional and Environmental Policies: Patterns of
Institutional Learning, Adaptation and Europeanisation among Cohesion Countries.
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The main guiding theme of the GOV-PAR
27
project is the hypothesis that under certain circumstances
participatory decision making leads to a higher degree of sustainable and innovative outcomes. Thus, the
identification of these conditions becomes the central purpose of the project linking together its theoretical and
empirical aspects. The theoretical bases for such an assumption were discussed with invited academic experts at
two GOV-PAR conferences one held in Florence in September 2000 and the other held in Athens in October
2001. The conference papers addressed key issues of the current debate on governance, and one of the core
questions had been: What does the shift from government to governance imply in respect to participation? If
one is trying to design an arrangement for participatory governance, one has to provide convincing answers to
two questions: (1) who should participate and, (2) how should they participate? This is not a simple question
because, in many situations, rules that facilitate the mechanics of governance may not conform to established
representative democracy principles.
Stakeholder involvement in policy debate does not lead per se to authentic participatory governance, let alone
sustainable and innovative outcomes. The GOV-PAR project therefore adopted a case study approach,
combining conceptual with empirical analysis. It tried to identify examples of participatory governance that
support a shift towards sustainable and innovative policy developments, with the hope of being able to
characterise opportunities for EU intervention to promote these sorts of developments. It identified different
governance mixtures in Germany, Greece and the UK, which reflected organisationally determined as well as
socially and culturally embedded particular arrangements, from where policy change has to start. The case
studies combined site, local or regional level analyses with analysis of EU level decisions on legislation and its
implementation at the national level.
The main empirical work of the project covered two different policy areas: (a) water supply and (b) enterprise
oriented environmental management systems, specifically the EU Eco-Management and Audit Scheme (EMAS).
Water supply is an issue that potentially concerns everyone. This implies, from a stakeholder mapping point
of view, a rather open network structure with unclear boundaries. Apart from a relatively clearly defined set
of actors officially responsible for water supply, the spectrum of holders can be widened depending on the
perception, articulation and organisation of interests. The ways that interested parties are actually involved
in governing a water supply system then depends on the political options that enable them to participate.
A crucial question is whether innovation and sustainability can be promoted (or be secured), through
participatory governance, in the context of rising privatisation of water supply as an industrial sector. In
many EU countries, the current conditions in the case of water supply are not very favourable for the
creation and development of participatory governance, nor very favourable for real progress towards
sustainable resource management outcomes. Indeed, against the background of the commodification of
water and the liberalisation of the water sector the options for governing water supply in a participatory way
are limited. In a context where a shift from government to governance runs in parallel with the marketisation
of water supply, a business-oriented way of co-ordinating societal interactions is more likely to be
successful in the short term than a new participatory way of policy-making that goes beyond traditional
forms of governance.
EMAS, on the other hand, has a more closed network structure because, by its nature as a management tool
in organisations, it involves only a defined set of actors and a clear boundary at the level of the organisation.
So participation is inherently restricted, unless a company decides itself to engage in a multi-stakeholder
consultation as a basis for its management and reporting strategy. A key question addressed is whether and
under what conditions EMAS becomes an effective instrument for achieving sustainability and innovation
by fostering participation. One suggestion is that, through systems of continuous reporting and
documentation, company and site management can access decentralised developed dispersed knowledge,
and can ensure that such knowledge is not lost when individual holders disappear or try to hold back
information. Under such conditions participatory governance arrangements at the site level can be created
through EMAS contributing to innovative and sustainable outcomes.
These two case study areas demonstrate that the much commented upon move from government to governance
and the related extension of governing activities far beyond a state-centred view of policy-making does not
automatically imply that the chances are improved to extend participatory policymaking or to broaden the
involvement of societal actors over different policy fields. On the contrary, the conditions for the development
of participatory governance, as well as the range of societal actors involved are very varied. The case study
findings of GOV-PAR thus reinforce, at their respective scales of analysis, the conclusions already noted from
PUBACC and ADAPT that institutional history and specific societal context really do matter for governance
effectiveness and accountability.

27
GOV-PAR =Achieving Sustainable and Innovative Policies through Participatory Governance in a Multi-level Context.
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It is not always convenient for mathematical modelling and bureaucratic standardisation, but institutional variety
(like language variety) really does exist and in a dynamic evolving way is likely to stay. This is a
coevolution process. Individuals and groups are not just objects guided by pre-existing institutional structures
and/or moved by overarching driving forces. Against the background of a specific institutional context, they
develop and pursue (as subjects) their policy objectives through goal-oriented interactions and, in more or less
determinate ways they contribute to changes to these contexts and driving forces. Finally, local specificities
and not least a range of soft or informal features, like the kinds of relationship between actor are quite
clearly crucial. Case studies identified a variety of specific circumstances where policy options or instruments
could or could not be used in a particular way principally because of these informal realities.

8.4 WHERE DOES INTER-DISCIPLINARY ANALYSIS FIT IN?
Although some of the projects under review here are rooted in a single discipline (e.g., economics or sociology),
all display openness to interdisciplinary perspectives and most affirm the necessity of multiple disciplines for
effective policy relevant analysis. This is especially clear when environmental considerations are included in the
economic or institutional analysis domains. The GOV-PAR project just mentioned provides good examples.
Water and the management of the terrestrial part of its circulation presents a seminal example of how
ecological, physical, social, and political processes must be considered together in the modes of organising,
regulating, controlling, and/or accessing resources. In this case it is the trend towards commodification and
corresponding re-regulations of arrangements for governing a common resource, which are of a particular
interest. Political science, economics, technology considerations and environmental systems knowledge
must all be brought into play.
The EMAS is a management system intended to foster environmental self regulation by companies (and also
public authorities) which are controlled indirectly by the state and answerable to the general public and
certain external and internal actors (from verifiers and customers to the neighbourhood and employees),
thereby leading to greater involvement by actors and to transparency of environmental effects. Although it
can be seen as a management domain, in fact effective implementation of EMAS requires real cross-
disciplinary communication, e.g., law, process engineering, environmental toxicology, marketing (and so
on) in the way that the scheme encourages enterprises to voluntarily adopt policies dedicated to legal
compliance and continuous real improvement in environmental performance beyond what is required by
law.
Since inter-disciplinary capacity is important, the question arises of the formation of human capital with
competencies in these complex terrains. Here, a unique contribution has been made by the POSTI
28
thematic
network, which has looked at needs for and effectiveness of interdisciplinary post-graduate education.
The POSTI team started from the premise that it is crucial to look across disciplinary boundaries in order to
approach complex issues such as sustainable and socially acceptable innovation. They organised a set of major
conferences focussed on various aspects of sustainable technological innovation, and also, more particularly,
constructed a database with more than 500 abstracts of graduate students dissertations centred on two
complementary themes: innovation aimed at saving the environment, and the issue of socially acceptable
innovation. Very little is publicly known on the content of this sort of research, and the ideas, insights and
beliefs that inform it and emerge from it. So, one purpose of the POSTI thematic network was to map this
emerging agenda and create a European forum for interaction between young academics in the field and their
seniors. On the basis of this work, they have made specific proposals for the establishment of a multi-
disciplinary RTD programme devoted to sustainable technological innovation. They also recommend thorough
revision of curricula in favour of various forms of increased multi-disciplinarity focused on sustainable
technological innovation.
29

On the distinctive point of human capital formation, the POSTI project has shown that there is much material of
scholarly interest and policy relevance contained within graduate students research work. In Europe, there is

28
POSTI =Policies for Sustainable Technological Innovation in the 21st Century: Lessons fromHigher Education in
Science, Technology and Society.
29
The POSTI network has also developed the related argument widely affirmed but less evenly put into practice that there
are important potential gains to be made by consciously and systematically integrating environmental concerns with social acceptability
concerns within policy making. Examples given include the relationship between customer awareness of, and demand for, environmentally
sound products in industrialised countries, and the potential transition from environment-exploiting to environment-sensitive FDI in less
industrialised countries. Broad overviews of potential policy integrations may help to avoid a policy in one realm being formed in parallel or
even in contradiction to a policy in another realm (i.e. social acceptability versus environmental concerns, or vice versa).
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actually a long tradition of research and training in issues related to science, technology and society; research
and training which draws on insights from anthropology, sociology, politics, history, philosophy, economics and
management studies. People trained within this sort of tradition have contributed much to our understanding of
the complex processes of scientific and technological change, and have played a significant roles in policy-
making across a variety of institutions. But, because of the continuing division of university education into
separate disciplines, it is often difficult to attain a critical mass of academic staff and students within a single
university. Scholars concerned with understanding the place of science and technology are often isolated within
their home departments and students experience difficulty obtaining financial and intellectual support for what
are necessarily interdisciplinary projects.
In other words, higher education contains potentially relevant resources of the needed interdisciplinary
competencies for sustainability policies. But the teaching programmes have only weak relays into wider societal
domains and the wealth of insights tucked away in these programmes constitutes only weak signals into
current policy formation and evaluation domains. This is a type of wealth that is more often than not
forgotten within relatively inaccessible archives. Recommendations thus include:
The employment of electronic archival systems that could make such work easily stored in a manner that it
can be found by others and retrieved.
Explicit incentives for transcending the established disciplinary barriers may also be needed, in order to
proceed forward with respect to sustainable technological change issues.
National and international higher education authorities should be encouraged to thoroughly revise the
curricula in favour of increased cross-subject communication channels (as a mild form of multi-
disciplinarity) as well as developing genuine multi-disciplinary curricula focused on sustainable
technological innovation.
Indeed this is a process which is already its starting phase in many countries. More large scale measures are,
however, needed in order to facilitate the fruitful mutual input of knowledge between hitherto insurmountable
walls between the traditional academic disciplines and cultures.
The POSTI analysis also makes the important point that, although explicit environmental policies and pro-active
strategies are critical as governance inputs for social and technological innovation aiming at sustainability, an
important question remains as to what actually constitutes a countrys, or a regions, or the EUs environmental
policy? A distinction between explicit and implicit policies is needed:
Many policies are today explicitly embedding or directly aimed at environmental improvements.
But the policies of, say, a country are, in part, constituted by implicit policy regarding the environment
within all other domains of policy making.
In other words, we have to ask what are the environmental aspects of the trade policy, the industrial policies
aimed at competitiveness, the tax system, financial policy, defence industry policy, systems of subsidies, public
health, education, policies towards developing countries?
u This means that, for meaningful policy analysis, three broad categories of public policies must be taken
into account in a systemic way. The first category is composed of the explicit policies. The second
category is made of the implicit policies, so all other domains of public policy may come into
consideration. The third and intermediary category is composed of particular cases, often belonging to
traditional policy making, which have a critical impact on environmental performance or social
acceptability, like e.g. the energy sector, the building industry and the urban development, or the
transportation sector.
30
Interdisciplinary and reflexive analysis capacities can help for better appraisal of
complex policy terrains.

8.5 INTERNATIONAL TRADE, ACCOUNTABILITY AND SUSTAINABILITY
We turn finally (in terms of the sequence of this reports review) to the international relations facets of
sustainability policy analysis, specifically with reference to the SUSTRA
31
project that has sought, in effect, to

30
A similar argument would be made regarding the relationship between innovation and social acceptability, e.g., there may be
explicit policies regarding social exclusion etc., but these need to be set in relation to implicit policies that promote certain dynamics of
technological innovation without necessarily having much regard for consequences in terms of vulnerable groups opportunities or
exclusion.
31
SUSTRA =Trade, Societies and Sustainable Development.
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transpose and explore a variety of participatory governance and public accountability themes (as already
mentioned) to the domain of international trade relations. Several projects of the set under review have evoked
the context of globalisation. The SUSTRA projects specific aims have been (1) to contribute to the
development of a theoretical framework for analysing the interactions, links and trade-offs between trade rules
and social and environmental protection objectives, and (2) to interpret the needs of civil society and to seek a
better understanding of the underlying motives of collective preferences and of the gradual building up of
international collective action in the domain of sustainable trade. These goals were pursued mainly through five
international workshops, on the following research and debate themes:
The first workshop was dedicated to a theoretical debate over the concept of global public good, and its usefulness in
analysing global challenges and in providing guidance to develop a consistent, credible and legitimate global plan for
trade and sustainable development.
The second workshop addressed the architecture of the global system of environmental governance.
The third workshop focused on the methodologies for assessing the process of trade liberalisation from a
sustainability perspective.
The fourth workshop addressed the issue of vested interests and resistance to trade and sustainable development
reforms.
The fifth workshop was dedicated to civil society participation into the European policy-making process: it
addressed the issue of the European governance of the trade negotiation process.
These are wide ranging and cross-cutting domains and, once again, this highlights that in order to address
sustainability challenges effectively, there needs to be a willingness and ability to work with partial and
complementary analyses coming from many different directions. The specific issue treated by SUSTRA of
participatory and deliberative processes associated with trade and sustainable development, is fairly recent in the
social science domain, and raises complex political, social and ethical questions. Moreover, it cuts across
several disciplines: researchers in sociology, political science, law and economics need to establish a common
language in order to be able to debate together and to identify the common areas of research that could benefit
from cross-fertilizing contributions.
Certain generalisations can nonetheless be made, sometimes of a paradoxical sort. First, the term sustainable
development is not a stabilized concept and, in reality, there is no strong consensus on what the pillars of
sustainable development should be. The rhetorical question Sustainability of what, why and for whom? can
have as many different (and legitimate) responses as there are stakeholders in the game... Different categories of
stakeholders, governments, international organizations, businesses and NGOs indeed define and redefine
sustainability within their own interpretative frameworks along different justification principles, following
their own interests and preferences. Second, this is typically an area in which traditional top-down approaches to
public decisions lack legitimacy, and for which in principle deliberative processes could help improve the
quality and acceptability of policy making. On this point, SUSTRA rejoins arguments made at length by GOV-
PAR and more diffusely by ADAPT and POSTI (see also Section 8.6 below). Third (and related), claims for
more equity, transparency and civil-society participation in the decision-making process are not just substantive
interest claims, they are often also indirect demands for new forms of social and political relations, in which
stakeholders can present their understanding of what sustainable development should achieve, and under what
conditions it should be implemented.
Scientific and social controversies combine to generate controversial universes, in which scientific theories and
visions of the world become social stakes around which strategic games are developing among economic and
social actors. Hence, cognitive issues and stakes of collective action are intertwined, giving rise to new forms of
strategic competition among social and economic actors, between present and future generations. From a
political science or governance point of view, the sorts of questions that arise as as follows:
What are the validation procedures to elicit the most representative justification principle?
What tests could be used to judge self-proclaimed and contradictory claims to represent future generations?
One response is to organize deliberation processes that form the foundation of the legitimacy of decisions on the
interaction between a plurality of visions and normative frameworks. In the context of international relations
this can see counter-factual in the extreme. But, it is important to recall the underlying motives of deliberation as
a political process/model. A deliberation process is not designed to aggregate self-interests but rather to foster
mutual learning, and to eventually transform preferences while converging on a policy choice that is oriented
towards some relevant notion(s) of the common good. What is important to the notion of public deliberation is
not so much that everyone participates, but more that there is a warranted presumption that public opinion is
formed on the basis of adequate information and relevant reasons, and that those whose interests are involved
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have an effective opportunity to make their own interests and their reasons for them known. This public use
of reason depends on civil society as a network of associations that institutionalises problem-solving
discourses on questions of general interest inside the framework of organized public spheres.
At the international level, the public sphere conceived as a pluralistic social realm of a variety of sometimes
overlapping or contending (often sectoral) publics engaged in trans-national dialogue can under certain
assumptions provide an adequate political realm with actors and deliberative processes that help to democratise
global governance practice. By fostering extended deliberation among those actors over the nature of problems
and the best way to solve them, participatory arenas could produce a pool of (trans-nationally) shared arguments
that would contribute to the emergence of a global public sphere. However, opening up political deliberation
in international organizations to the wider public debate would imply that the process of deliberation on global
politics could transcend boundaries between experts and stakeholders, officials and concerned or interested
citizens. These two spheres must mutually and reliably inform one another. This is not gained in advance. It
has to be ensured that information is made available to stakeholders, and that in turn stakeholder concerns reach
the agenda of those political or administrative bodies that formulate the decisions to be made in international
organizations. In other words, introducing deliberative procedures into international organizations needs to be
complemented with participatory practices in order to be able to push global governance towards
democratisation.
The SUSTRA project argues that, because the EU de facto plays the role of a true institutional laboratory (e.g.,
in which the notions of subsidiarity, political superstructures and horizontal management of cross-sectoral issues
have been progressively refined), one can legitimately hope that Europe could play a role in innovation at the
international governance level. Furthermore, it is argued, Europe has been increasingly aware of the necessity to
re-regulate its domestic markets in order to better integrate sustainable development requirements. This is where
Europe could exert stronger leadership: by negotiating accompanying measures and shared production of global
public goods as a central component of free trade agreements with third countries; by being more present in
discussions led by the international financial institutions and by demonstrating its willingness to impose at home
what it recommends for others.
One key theme here would be reconciling trade liberalization and the European social model. The inability of
the European governance to cope with the stresses imposed by trade liberalization (a facet of globalisation) on
expectations associated with the traditional (post-WWII) Western European social model, is a cause of loss of
legitimacy for European governance institutions. SUSTRA suggests that a possible improvement may be
through empowering the EU level with an autonomous capacity for compensating the social costs of trade
liberalization. Progressing toward a European regulatory regime for essential services of general interest may
also be needed, prior to undertaking new liberalization commitments under the General Agreement on Trade and
Services (GATS).
Finally, in order to achieve this international institutional innovation, it would be paradoxically necessary to
strengthen the national political deliberation on international relations and trade. With the enlargement to EU-
25, the capacity of individual Member States to pilot specific technical and tactical aspects of the negotiations
run by the Commission has been greatly reduced. Their essential role now relies on their capacity to ensure the
democratic control of the EU negotiating strategies. So a healthy political deliberation capacity at the Member-
State level remains crucial to the legitimacy of EU decision-making on trade.

8.6 OPPORTUNITIES AND RISKS OF PARTICIPATORY GOVERNANCE
Building a common future as envisaged for sustainability depends on sincere engagement by the participating
societies to principles of solidarity on agreed fundamental concerns, e.g., maintenance of the four capitals,
employment, poverty alleviation, and respect for human rights. It depends on high levels of trust, that is,
confidence within and across societies in the prospects of a worthwhile common future obtained through
cooperation. This is unlikely to be obtained without substantially better understanding of the diversity of beliefs
and practices affirmed by different actors and communities across European societies.
This concern is linked to the advocacy of deliberative governance and policy-making processes. Underlying the
advocacy and analysis of deliberative processes there are presumptions (of both theoretical and normative
characters) about legitimacy and power balance within society, and also a model of human nature that proposes
inter-subjective communication as a profound process of culture and community building. In this regard, there is
a strong underlying theme of several of the projects being reviewed, which we can summarise as follows:
Social science, dialogue and deliberation: In the prevailing conditions of societal uncertainty and stress,
there is a strong role for reflexive and hermeneutic approaches to policy, where the first goal is to obtain
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reciprocal understanding of the diversity of beliefs and practices affirmed by different actors and
communities. Mutual understanding does not always, in itself, produce capacity to live together.
Nonetheless, social science competences can help to document, in a comparative way, the expectations and
justifications being put forward, by different sectors of the community in various European societies, for and
against specific policies, regimes and strategies [SUSTRA, PUBACC, ADAPT, GOV-PAR].
In this context, and by way of partial synthesis of some of these governance themes, it is important to underline
the spectrum of opportunities and risks that are associated with the introduction of the new forms of participatory
governance. A transversal component of the GOV-PAR project with the theme Participatory governance in
multi-level context, has attempted to construct a theoretical understanding of participatory governance in its
multi-level (sectoral and territorial) context including an assessment of the risks and opportunities associated
with the success and failure of the emerging participatory forms of governance as a means to achieve innovative
and sustainable outcomes. This gives us a useful set of points in review. Three types of opportunities and three
types of risks were presented (as below) as a means to summarize and respond to the main questions of why,
who and what of the new participatory forms of governance:
Types of opportunities:
1. The opportunity of widening the forms of representation through governance. Given the growing crisis of the
political institutions and the democratic deficit in all levels of political representation, (bureaucratic and authoritarian
hierarchical decision making, majority rights, general vote etc.), new forms of governance (e.g. EMAS), based on
negotiation and bargaining, broadens legitimacy through the involvement of new types of actors and through new forms
of interest intermediation (e.g. committees, new bodies etc.)
2. The opportunity of broadening participation, which gives empowerment and access to holders, with or without
legal entitlements, can offer effective policy outcomes, which cannot be derived with the conventional forms of
government. The new co-operative partnerships, oriented on common tasks, go beyond legalistic rights, supporting co-
operation and widening forms of participation (e.g. at the European, national and local level).
3. The opportunity of continuous learning and improvement. New governance arrangements, give new opportunities
for permanent learning of the different actors involved. Learning and awareness refers to all holders, independently of
the success or failure of the policy outcome. Different actors, with different history and power, test their knowledge,
arguments and powers and learn from each other in the new forms of participation.
Types of risks
1. The risk of non-accountability. This is associated with the diffusion and probably dilution of responsibilities within
ad hoc governance agreements where unequal partners participate in a process of uneven distribution of costs and
benefits of a given policy. This dilution of responsibility makes the participants non-accountable in both political and
legal terms. Non-accountability feeds the temptation to pursue targets that no actor acting on each own could support.
This leads us to the increased danger of the reproduction of unevenness of power of participants, which are entering the
participation procedure based on different forms of legitimacy and power (e.g. legal entitlement, de facto power).
2. The risk of compartmentalisation of policymaking and policy implementation. This risk stems also organically from
the fact that the new governance arrangements are justified on a basis of abstract principles and then are implemented in
many different sectoral and territorial levels where they are interpreted and adapted in an ad hoc manner. This implies
the multiplication of inconsistencies and the undermining of synergies between particular policies that become apparent
in their parallel pursuit within the same territory without any ex ante, ongoing or ex post assessment of their combined
impact upon the territory. Furthermore, the danger of compartmentalisation of policy increases when we focus only on
the fragmented policy areas, or particular policy domains, in which new forms of governance emerge, without
examining the general political and socio-economic context, which undergoes drastic changes towards a shift from
public to private sector.
3. The risk of instrumentalisation of policy. The emphasis of problem solving and the effectiveness of policy
outcomes, combined with the dominance of a managerial rational and entrepreneurial spirit, may underestimate
important aspects of political legitimacy and social justice. The danger consists in the overestimation of the internal and
external functionality of the policy process and the dominance of a technocratic knowledge (e.g. managerial
assessment of policy outcome, benchmarking etc.), to the cost of democratic participation and the empowerment of civil
society.
The conclusion offered by GOV-PAR is that, against these types of risk, we should seek to envisage and
appraise the possible benefits stemming out of the mobilization of underused or isolated individual and
organisational resources and the achievement of consensus and active participation of an increasing percentage
of the population. In order to increase the possibility of the positive outcome we have to rethink important
aspects of democracy, participation, political legitimacy and social justice, not only in fragmented and specific
policy fields, but in all policy-making frameworks (in which the state still plays a crucial role) and at all levels
(especially at the global level, where the lack of political institutions and democratic participation is very
important). However, they suggest, we have to be prudent. Current conditions are characterized by rather high
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improbabilities of success (despite the fact that the meaning of success itself becomes conditional upon the
achievement of the fragmented partial targets of each particular governance agreement). Support for deliberative
processes is a reasoned choice underpinned by specific political and moral values, not a panacea in itself.
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9.1 SEG ASPECTS OF SUSTAINABILITY: RECAPITULATION
Summing up, it is reiterated that not all the projects and research network activities reviewed here had an explicit
preoccupation with sustainability. Because sustainability is such a cross-cutting term, much social research and
policy analysis addressing sustainability themes is, inevitably, dressing up old (and important) issues in new
jargon of our day. Transversal themes such as Research-Technology & Innovation, Regional Development,
Governance, Science & Society, and Social Indicators (which, in their own right, are all the objects of reviews
elsewhere in the present exercise), are being redrawn with the sustainability tinge.
Therefore, it is partly by transposition from the themes and findings of the projects that useful pointers are
obtained concerning sustainability policy challenges in the EU and related social science research opportunities
and needs. So the question arises, what are the specificities of sustainable development as a vision or projet de
socit, and how do these specificities translate into a distinctive spin on established social science and public
policies?
Without trying to cover all bases, some generalisations are useful. First, sustainability implies a (relative)
reorientation away from the production of value towards the maintenance of values (including cultural systems,
nature, and embodied values in patrimony and infrastructures). Second, sustainability with its themes of inter-
and infra-generational equity, poses questions of reconciliation: a durable (co)existence of diversity, including
antagonistic political-economic blocs. Third, sustainability as a problmatique (that is, a set of questions rather
than well-defined recipes) signals, in science and policy circles, the passage from a belief in simple criteria of
quality and choice, to an admission that things are complex. In particular:
n The natural and technical sciences, although yielding ever-new insights allowing progress in productivity, quality of
services, comfort, reliability and so on, can neither fully master nor judge the significance of, the emergent systems
complexities that the science and technology practices themselves contribute to.
n Economic science, constructed for more than two centuries as the science (or art) of decision support for choices under
constraint, can help illuminate but not in itself resolve the crucial problems of social choice of our times, e.g., equity
and justice in the distribution of economic opportunity; health and environmental risks associated with innovation and
ecological change, integrity and viability of local as well as global communities.
Sustainability covers policy-everything, albeit from a particular point of view. The underlying problem for
sustainable development policy is, sustainability of what and for whom? It has become commonplace to seek
out indicators for judging societal progress relative to specified goals. In this general framing, technologies,
investments and policies more generally, should be evaluated against sustainability criteria. In some economic
modelling approaches, the reference is a national income that is non-declining through time or a non-negative
change in net wealth. But, as is shown in a broad spectrum of empirical and conceptual analyses, this sort of
aggregate index abstracts away from the various dilemmas associated with a reconciliation between the various
interests and forms of life that are currently in conflict with each other and at risk.

9.2 SOCIAL SCIENCE AND SUSTAINABILITY POLICY
If science and economic analysis, on their own, can no longer provide sure and simple advice about what is good
and right for choices of technology and public policy, what are the guiding stars that research can provide in
these post-normal times? Much interesting research has been done; but there are still more questions here than
answers. Worse, there exist a plurality of relevant methods for studying science, policy, sustainability,
technology and society; and we observe a plurality of intellectual (and policy) communities each struggling,
within its distinctive frames, to understand society, science, technology, governance, and regional development
... and ... sustainability. This situation is a major challenge in itself,
32
and it may be useful to carry out social
science research simply with the goal of exploring and characterising the conditions for achieving dialogue
considered as interpretation and translation between different visions and versions of sustainability!

32
The European Commissions 6
th
Framework Programme Priority 7 Work Programme proposed (in its section 1.2) that
Research should analyse the forms of national, disciplinary and paradigmatic fragmentation of the social sciences and humanities in
Europe and propose practicable means to overcome this fragmentation....
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This much said, the potential social sciences contributions to sustainable development policies can usefully be
placed at two complementary levels.
Social science, especially of the reflexive sorts, is first of all an aid to human understanding before
becoming, second and circumstantially, also a tool for policy.
33

Then, at the instrumental level of application, social sciences can make contributions to the creation,
dissemination and use of knowledge in and for sustainability policies (e.g., education, science policy,
stakeholder deliberation, governance, etc.).
Framed in the language of economic analysis, sustainability is a problem of social choice. As has been amply
illustrated since the 1970s, technological and resource considerations may determine whether or not an economy
is capable of following a sustainable development time-path. But the society chooses its course, for or against
different considerations of sustainability, within the limits of what is possible. Social science can ask, how are
these choices motivated and justified at the various scales of
policy and decision-making? Social science can also help
explore and design institutional and communication conditions
for pursuing societal choices.
Put in other terms, SS&H research can help to build the needed
models and data bases for governance and policy but has the
potential, above all, to build up mutual understanding and
dialogue capacities necessary for robust policy formulation,
implementation and evaluation (see textbox, Sustainability
Policy & Dialogue).
Given the pace of socio-economic change, the stresses that this
induces for public policy, business and civil society actors, and
the wide disparities of habits, beliefs outlooks and expectations
across different stakeholder groups and nations of the enlarging
EU-25, the importance of this potential policy contribution of
SS&H research to building social learning dialogue capacity
cannot be over-estimated. This will be a theme underlying many
of the specific recommendations for future research that follow.

9.3 KEY RESEARCH REFRAINS
Social Learning and Governance: It will be important to build up documentation of good practices in
the framing of policy problems through multi-stakeholder deliberation about the merits and demerits of policy
alternatives. SS&H research could also address, for the spectrum of social and economic policy fields, prospects
for deliberative evaluation and governance practices with reference to unequal relations of power, the
communication gaps and, more generally, the question of the cultural, symbolic, economic and institutional
bases for trust the factors that can establish or diminish the willingness or a person, group or community to
make itself vulnerable in the expectation (or hope) of a benefit coming from association with others.
Meaningful policy analysis is complex. In general, three broad categories of public policies must be
taken into account in a systemic way. The first category is composed of the explicit policies. The second
category is made of the implicit policies, so all other domains of public policy may come into consideration. The
third and intermediary category is composed of particular cases, often belonging to traditional policy making,
which have a critical impact on environmental performance or social acceptability, like e.g. the energy sector,
the building industry and the urban development, or the transportation sector.
34
Interdisciplinary and reflexive
analysis capacities can help for better appraisal of the integration of sustainability considerations within and
across complex policy terrains.

33
Of course, it is more usually with a view to usefulness as a tool for policy that there is significant funding of social science
contributions in contemporary policy relevant research domains.
34
A similar argument would be made regarding the relationship between innovation and social acceptability, e.g., there may be
explicit policies regarding social exclusion etc., but these need to be set in relation to implicit policies that promote certain dynamics of
technological innovation without necessarily having much regard for consequences in terms of vulnerable groups opportunities or
exclusion.
SUSTAINABILITY POLICY & DIALOGUE
"... the policy process will enter the realm of
the hermeneutic where there is no prior
agreement on the key questions, appropriate
framework or essential facts. With an
expansion of worldviews and a broader
conception of knowledge, we will find little
consensus on questions, methodologies and
data for determining optima. Good
policymakers will be those who can lead
enlightening conversations between
scientists with different disciplinary
backgrounds and between people of
different cultures and knowledges."
Richard Norgaard (1988), "Sustainable
Development: A Co-evolutionary View", in
Futures, 20, pp.606-620.
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Deliberation with and about economic modelling: Economic modelling work must continue to ask and
explore the question: can pathways of infrastructure investment and eco-efficient innovation aiming to reduce
environmental pressures (e.g., greenhouse gases, chemical emissions) be simultaneously (a) economically viable
and (b) employment-intensive for timescales of 5 to 50 years? This is not only a modelling question. There are
many different modelling approaches and, each approach has its distinctive framing assumptions, permits
distinct classes of theory-mediated
results that are not readily comparable,
and distinct limitations.
35
Modellers can
be encouraged to adopt publicly the
principle of a reciprocal burden of proof,
exploring arguments for and against the
pertinence of each approach within a
deliberative process. This can help build
scientific capacity and can help make a
bridge from the analytical modelling to
the social learning and partnership
challenges of sustainability (cf. the EU
governance themes, on right).
Characterising sustainability as a problem of social choice: It has been illustrated by modelling,
environmental evaluation and scenario work since the 1970s, that technological and resource considerations
determine whether and in what ways an economy is capable of following a sustainable development time-path.
But the society chooses its course, for or against different considerations of sustainability, within the limits of
what is possible. Social science can ask (1) how are these choices motivated and justified at the various scales
of policy and decision-making and (2) how are these choices framed within different modelling frameworks?
This can help build bridges from modelling to qualitative social science research to civil society.
Precaution and responsibility: How far should principles of respect and precaution be pushed? The
Principle of Precaution has, since the 1990s, emerged as a proposed guideline in technology choices and
regulatory policy. Precepts of stewardship and precaution are justified not so much by calculations of risks and
expected outcomes (the data are inadequate by definition), but by arguments in terms of duty or responsibility,
respect or esteem for others as members of an extended community. These are ethical considerations whose
legitimacy depends largely on social and cultural norms and whose respect seems to imply constraints on current
economic interests and liberties. If a reasoned basis for action is to be established, forms of deliberative
procedure must be sought that permit those involved the stakeholders to maintain a permanent dialogue
or argumentation between the several non-reconciled principles or positions.
Sustainability as a knowledge partnership challenge: Research Area 3 in the EC 6
th
Framework
Programmes Priority 7, notably the paragraph 3.2, affirmed that, The EU is fully committed to the pursuit of
sustainable development as well as to the establishment
of a European Knowledge Society. Research may
address the compatibilities as well as possible tensions
between these two key strategic objectives. There is,
as yet, little consensus on what might be the economic,
symbolic and normative foundations for a European
knowledge based society and whether (and to what
extent) there are meaningful resonances with
sustainability.
Sustainability and other popular utopias:
Sustainability can be considered as a utopia
privileging notions of respect, equity and coexistence.
It may be interesting, as a part of foresight and policy
framing studies, to see the application of techniques
such as ethno methodology and hermeneutic social
science to obtain insights about different popular

35
For example, as mentioned in Section 5there is a convincing demonstration of the value of structural economy-environment
modelling for exploring the opportunity spaces of future EU economies including the scope, in technological and economic terms, for
achieving reductions in key environmental pressures while maintaining economic capital accumulation. It was noted, however, that
achieving the ideal win-win-win results for economic, human and environmental capitals mentioned cannot be guaranteed by following the
insights of any single model and, a deliberative process is necessary for identifying robustness of model insights and for justifying the
risks associated with all policy choices.
FROM THE EU STRATEGY FOR SUSTAINABLE DEVELOPMENT:
GOVERNANCE THEMES
n Improve Policy Coherence (through integrated policy assessment
and a better information base)
n Get Prices Right (to give signals about sustainability goals to
individuals and business)
n Invest in Science and Technology for the Future (promoting
innovation for sustainability goals)
n Improve Communication and Mobilise Citizens and Business (in
partnerships for sustainability)
n Take Enlargement and the Global Dimension into Account
(internal and external coherence of actions)
Globalisation, ICT and New Forms of Conviviality?
Ten years ago the Internet had hardly been born and gene
splicing was exotic laboratory experimentation. Ten years from
now, the penetration of the new IC technologies in the lives,
bodies and minds of the younger generations will be such that
the images of hard-wired micro-chips, cyborg creations and
genetically modified populations that have peopled a century of
science fiction literature and films, will be accepted as a banal
reality. We are, through the combined momentum of
instantaneous multimedia communications, planet-wide capital
flows and commodity commerce, genetic splicing and
demographic change, literally becoming what no man (or
woman) has ever been before. What new forms of violence and
conviviality might emerge in these new terrains of technology,
nature and human nature? Are they forms of sustainability?
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visions of sustainability, of possible forms of a knowledge based society, and of other dystopias and utopias, that
may be in the minds of current and future generations.
Uses and users of sustainability indicators: It has become commonplace to seek out indicators for
judging societal progress relative to specified goals. In this general framing, technologies, investments and
policies more generally, should be evaluated against sustainability criteria referring to all three classes of funds
social, economic and environmental and also to procedural political criteria. Exercises of design and
production of prototype indicator systems have demonstrated the technical feasibility (but also the
fastidiousness) of producing data systems permitting EU cross-country comparisons. However, experience is
still limited of experience with the mobilisation of indicators for building shared understandings of policy
challenges and options for action. Social science research could (1) highlight the diversity of action contexts and
scales within which sustainability indicators might have a place; and (2) highlight the complementarities
between quantified descriptions and qualitative considerations of the relational aspects of societal well-being
social capital formation such as collective identity and status in communities, and substantive considerations
of fairness and poverty (e.g., inter-relations between family organisation, household structure, labour market
participation, welfare regimes; notions of wealth and identity linked to the physical environment and patrimony).
Classes of community and poverty: There could be substantial benefit to be gained from research
systematising reflection both conceptual and empirical on the classes of community, vulnerability and
poverty that European social and economic (and environmental) policy should address. This could become an
integrative theme for research on social capital and on indicators for sustainability and social welfare provision.
Long term historical perspective on concepts of societal well-being. Just as environmental science and
policy benefits from insights about past environmental change, discussions of needs and prospects for welfare
system reform, governance models, systems in Europe would benefit from historical perspectives highlighting
the diversity of forms of community, poverty, cross-cultural communication and solidarity in Europes past. ..
Responsibility for future generations and the costs of sustainability: The provision for the needs of
future generations (just as the provision for the needs of old people, of children, and for other forms of
diversity) will involve various dilemmas of principled action and sacrifice. Systems complexities mean that
attempts at quantification of the trade-offs are shrouded in uncertainties, and this tends to feed controversy.
What are the different considerations of duties and costs? Social science can help to build this dialogue.
Comparative research on societal conceptions of nature: Actors in the social and economic spheres
relay societal claims about the status of nature and on behalf of the environment into the political arena.
Comparative analysis of societies claims for and from non-human communities, rooted in specific ethical,
cultural and economic histories, could be an important input to, and output from, multi-stakeholder deliberation.
These suggestions are made on the basis of themes and gaps emerging from synthetic appraisal of the projects
under review. No specific attempt has been made in this report, to reconcile these suggestions to other
components of research review.

Martin OConnor