Institutions as a Dimension of Sustainability

Institutions are defined differently by different disciplines; an in-depth analysis shows that a definition from political science is the most appropriate one in the sustainable development context. For instance, sociology and economics analyze two different directions of interaction (humans on organizations and vice versa), and historical analysis refers to organizations and cultural rules. In contrast, political science focuses on what is essential for a normative concept, the conditions or rules of decision making, including the most familiar kind of institutions (i.e., organizations) but complementing them with mechanisms and orientations (Spangenberg 2002).

Institutions have been described as essential to sustainable development because of their indispensable role in implementing social, economic, and environmental objectives, but they have been denied a role as a dimension in its own right. With this view, however, although the serving character is rightly emphasized (in a coevolutionary setting, each dimension serves all others permanently), independent institutional objectives are lacking, and the specific characteristics of the institutional system (e.g., its development dynamics and lead sciences) are neglected.

More recently, institutional issues have been subsumed under the "governance for sustainability" discourse, as indeed institutions and governance are partly overlapping themes. Furthermore, despite initially different research questions and methods (insti-

tutionalism starting from the structure, with governance more prone to the mechanisms), in both research communities the trend has been to recognize that structure and dynamics must be analyzed jointly (R. Kemp, personal communication, 2005; Spangenberg and Giljum 2005). However, the analytical categories are still quite different, although organizations and mechanisms cover both disciplines. Orientations (e.g., culture, value systems) are more often neglected in governance analysis, despite their role as a key constraint for modifying mechanisms and restructuring organizations for the sake of sustainable development.

Finally, governance for sustainable development is usually described as a process external to sustainable development itself; otherwise, it would be a prominent part of the institutional dimension. However, this way the development aspect is underem-phasized, and the institutional objectives such as equality, justice (including gender), and human rights are considered not as constitutive to sustainable development but as part of the governance processes supporting it. In the best cases, some of these objectives are internalized by integration into another dimension (usually the social one), but then the internal dynamic of sustainable development is still deprived of important institutional aspects.

Furthermore, merging the institutional and the social dimension is no remedy to the complexity challenge. As the interaction of agency and structure, of humans and society goes on, it must be analyzed within one dimension, which does not make it easier to describe. Rather, this implies a multilevel description of the merged socioinsti-tutional dimension.

The extended social dimension thus becomes a kind of a residual category, too complex to be integrated with the other dimensions on equal footing because it needs internal disaggregation to be operational. Thus, instead of mixing the social and institutional dimension into one category, in order to strengthen the role of social concerns a more structured view is preferable. Giddens calls this the duality of structure, referring to the interdependence of agency and structure, which are conceptually distinct but inseparable: Social structures enable as well as constrain human action (Jackson 2003). Once adopted, such distinct structure and agency concepts can guard against reductive social theory and help to unveil the full complexity necessary for substantial sustain-ability strategies. Consequently, because of the different actors, response systems, and lead sciences (humanities vs. social sciences), it makes sense to keep the difference between the two dimensions or capital stocks in mind.

For this purpose, and in analogy to the fruitful distinction between human and social capital in economics, we have defined the social dimension or human capital as the stock of personal (i.e., intraindividual) assets and capabilities, such as health, knowledge, dedication, experiences, and skills, their socialization and habits, attitudes, and orientations (the preferences of individuals as customers and citizens). It includes the agents and their human capital. The human capital stock is an aggregate or macro-level description of the sum of these individual assets and attitudes (whereas the rules governing them are part of the institutional dimension). Social objectives are focused on self-determination, the individual quality of life, and the ability to sustain oneself and all dependents on one's salary.

In contrast to that, the institutional dimension comprises the systems of interindividual rules structuring the activity of agents (i.e., the social capital of the society). Like the other dimensions, the institutional one has core objectives of its own (e.g., participation, access, gender justice; Table 7.1) but also interlinkage objectives (i.e., it enables but also limits the implementation of social, individual, economic, and environmental objectives).

Like any division, the one suggested here is artificial, but it is plausible because the separate systems thus defined are characterized by a different functional logic, different time structures, different normative objectives (self-fulfillment and quality of life vs. justice and cohesion), and different lead disciplines analyzing them (humanities vs. social sciences). Furthermore, using these definitions permits us to make the body of economic research on capital stocks usable for sustainable development analysis, such as the insight that both human and social capital are essential factors in the production of wealth, often more so than the human-made capital (Serageldin and Steer 1996). Processwise, keeping the human and social and the societal and institutional dimensions and capital stocks apart helps in distinguishing policies and outcomes (necessitating different indicators and monitoring systems for policy implementation and policy success), as in the case of education: School enrollment (institutional) is crucial, but it provides limited information about schooling success (human capital formation, social), as the Organization for Economic Co-operation and Development Program for International Student Assessment (PISA) studies have shown.

More generally, trade-offs between individual and social benefits and differences between societal efforts and individual achievements become more accessible if described as a linkage of two dimensions rather than an internal contradiction within one. One example of significant political relevance is the different concepts of justice as an indispensable element of sustainable development emerging from the social and the institutional perspective. Following the institutionalist concept of justice developed by Rawls (1971), a society can be considered just if the current situation has been the result ofjust rules, regardless of the actual pattern of distribution. Against this, Sen (1999) and others argue that just institutions are not enough, that justice is an individual (i.e., social) rather than an institutional phenomenon, depending on the capabilities of individuals to realize the potentials provided by the institutions.

This example illustrates the interaction of institutions (i.e., rules enabling and restricting human behavior) and behavior itself, which, in addition to external rules, is determined by a wide range of intrinsic factors and motivations. Individual preferences and orientations are part of the social or individual dimension, even if shared by many others, but once they become an element of distinction between social groups, they are an institutional phenomenon.1 Like other institutions such as visions of societal devel-

Table 7.1. Selected social objectives and criteria.

Institutional Sustainability Social Sustainability

Social security (systems, orientation) Public health (systems, orientation) Social integration

(mechanisms, orientation) Participation opportunities Gender equity

Justice and welfare orientation Freedom concerning the way of life

Having basic material security, meeting needs Enjoying physical and psychological safety Participating in social activities

Being politically active and empowered Benefiting from gender mainstreaming Enjoying and practicing solidarity Being able to choose an individual way of life

Sources: Empacher and Wehling (1999), Littig (2001), Kopfmuller et al. (2001).

opment, leitbilder,2 norms, relations, but also organizations and property rights, they are formed as social responses to challenges from the societal and the natural environment and the cooperation problems that emerge while we cope with them (Weisbuch 2000).

Following these lines of thought, the criteria for social sustainability from some major research projects can be divided into social and institutional ones. To illustrate the distinction, the corresponding institutional and social criteria from a number of studies are listed in Table 7.1.

The demarcation line between the institutional and the economic dimension or subsystem must be clarified as well. In the terminology applied here, the economic subsystem is made up by economic stocks and processes, inputs, and outputs, whereas the rules governing the economy—not the individual decisions—are institutional. Thus property rights, markets, and the public support for a competition-based system are institutional conditions of a market economy.

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