crisis or opportunity economic degrowth for social equity and ecological sustainability introduction to this special issue abstract this article reviews the burgeoning emerging literature on sustainable degrowth this is defined as an equitable downscaling of production and consumption that increases human well being and enhances ecological conditions at the local and global level in the short and long term the paradigmatic propositions of degrowth are that economic growth is not sustainable and that human progress without economic growth is possible degrowth proponents come from diverse origins some are critics of market globalization new technologies or the imposition of western models of development in the rest of the world all criticize gdp accounting though they propose often different social and ecological indicators degrowth theorists and practitioners support an extension of human relations instead of market relations demand a deepening of democracy defend ecosystems and propose a more equal distribution of wealth we distinguish between depression i e unplanned degrowth within a growth regime and sustainable degrowth a voluntary smooth and equitable transition to a regime of lower production and consumption the question we ask is how positive would degrowth be if instead of being imposed by an economic crisis it would actually be a democratic collective decision a project with the ambition of getting closer to ecological sustainability and socio environmental justice worldwide most articles in this issue were originally presented at the april 2008 conference in paris on economic degrowth for ecological sustainability and social equity this conference brought the word degrowth and the concepts around it into an international academic setting articles of this special issue are summarized in this introductory article hueting d alessandro and colleagues van den bergh kerschner spangenberg and alcott discuss whether current growth patterns are un sustainable and offer different perspectives on what degrowth might mean and whether and under what conditions it might be desirable matthey and hamilton focus on social dynamics and the obstacles and opportunities for voluntary social action towards degrowth lietaert and cattaneo with gavalda offer a down to earth empirical discussion of two practical living experiments cohousing and squats highlighting the obstacles for scaling up such alternatives finally van griethuysen explains why growth is an imperative in modern market economies raising also the question whether degrowth is possible without radical institutional changes

sustainable de growth mapping the context criticisms and future prospects of an emergent paradigm article i nfo sustainable de growth is both a concept and a social grassroots northern movement with its origins in the fieldsofecologicaleconomics socialecology economicanthropologyand environmentalandsocialactivistgroups this paper introduces the concept of sustainable de growth by mapping some of the main intellectual influences fromthese fields with special focus on the francophone and anglophone thinking about this emergent notion we propose hypotheses pertaining to the appeal of sustainable de growth and compare it to the messages enclosed within the dominant sustainable development idea we scrutinize the theses contradictions and consequences of sustainable de growth thinking as it is currently being shaped by a heterogeneous body of literature and as it interacts with an ample and growing corpus of social movements we also discuss possible future paths for the de growth movement compared to the apparent weakening of the sustainable development paradigm

liquidity risk and occupational choices we explore which financial constraints matter the most in the choice of becoming an entrepreneur we consider a randomly assigned welfare program in rural mexico and show that cash transfers signi cantly increase entry into entrepreneurship we then exploit the cross household variation in the timing of these transfers and find that current occupational choices are significantly more responsive to the transfers expected for the future than to those currently received guided by a simple occupational choice model we argue that the program has promoted entrepreneurship by enhancing the willingness to bear risk as opposed to simply relaxing current liquidity constraints

detroit after bankruptcy a case of degrowth machine politics it is widely accepted that neoliberalism is intensified in times of crisis and jamie peck has argued that austerity urbanism has been implemented at the urban scale since the 2008 financial crisis this article questions whether this narrative of neoliberal expansion is applicable in cities where crisis is so severe that economic growth seems highly unlikely i focus on detroit whose recent declaration of bankruptcy signals the recognition among local officials and elites that the city s decline cannot be reversed with out of the box neoliberal policies instead the city s bankruptcy precipitated a breakdown of an interscalar growth coalition and local actors have embraced a plan for detroit s future which diverges from austerity urbanism favoured by extra local investors in significant ways importantly local actors have embraced a plan that seeks to improve the quality of life for the city s residents in the context of irreversible degrowth i refer to this as degrowth machine politics and i ex

social class and the spirit of capitalism one of the key social transformations that accompanied the british industrial revolution was the economic decline of the aristocracy standard theories of wealth inequality cannot explain why the aristocrats in spite of their superior wealth and education failed to be the main protagonists and beneficiaries of industrialization we discuss recent research based on a model of endogenous preferences that is consistent with the demise of aristocracy jel 010 040

credit constraints entrepreneurial talent and economic development in this paper we formalize the view that economic development requires high rates of productive entrepreneurship and this requires an efficient matching between entrepreneurial talent and production technologies we first explore the role of financial development in promoting such efficient allocation of talent which results in higher production job creation and social mobility we then show how different levels of financial development may endogenously arise in a setting in which financial constraints depend on individual incentives to misbehave these incentives depend on how many jobs are available and this in turn depends on the level of financial development such complementarity between labor market and financial market development may generate highly divergent development paths even for countries with very similar initial conditions

environment versus growth a criticism of degrowth and a plea for a growth in recent debates on environmental problems and policies the strategy of degrowth has appeared as an alternative to the paradigm of economic growth this new notion is critically evaluated by considering five common interpretations of it one conclusion is that these multiple interpretations make it an ambiguous and rather confusing concept another is that degrowth may not be an effective let alone an efficient strategy to reduce environmental pressure it is subsequently argued that a growth i e being indifferent about growth is a more logical social aim to substitute for the current goal of economic growth given that gdp per capita is a very imperfect indicator of social welfare in addition focusing ex ante on public policy is considered to be a strategy which ultimately is more likely to obtain the necessary democratic political support than an ex ante explicit degrowth strategy in line with this a policy package is proposed which consists of six elements some of which relate to concerns raised by degrowth supporters

do middle classes bring about institutional reforms abstract we reexamine the association between poverty the middle class and institutional outcomes using a newly developed cross country panel dataset containing detailed information on the distribution of income and expenditure when the size of the middle class increases measured as the proportion of people with income above 10 us dollars a day in purchasing power parity ppp terms social policy on health and education becomes more active and the quality of governance regarding democratic participation and official corruption improves this does not occur at the expense of economic freedom as an expansion of the middle class also implies more market oriented economic policy on trade and finance in these respects the impact of a larger middle class appears to be more robust than those of lower poverty lower inequality or higher gross domestic product gdp per capita

no condition is permanent middle class in nigeria in the last decade the economic debate on existence and definition of the middle class has become particularly lively in many developing countries despite this growing interest the identification of the middle class group in these countries remains quite challenging building on a recently developed framework to define the middle class this paper tries to estimate the nigerian middle class size in a rigorous quantitative manner by exploiting publicly available panel data the expenditure associated to a 10 percent probability of falling into poverty is estimated and this is used as the middle class threshold for nigeria the threshold expenditure for the middle class in nigeria is found to be 378 39 naira per capita per day 2010 ppp relying on this threshold and through survey to survey imputation the size of nigeria s middle class in 2003 is also estimated the results show that there has been considerable improvement on the size of the middle class and poverty reduction between 2003 and 2013 poverty decreased between 2003 and 2013 from 45 to 33 percent while the middle class increased from 13 percent to 19 percent nevertheless the results still paint a heterogeneous picture of poverty and the middle class in nigeria where the largest portion of the population although above the poverty threshold continues to live with average or high vulnerability to poverty

the economic lives of the poor in what turned out to be a rhetorical master move the 1990 world development report from the world bank defined the extremely poor people of the world as those who are currently living on no more than 1 per day per person measured at the 1985 purchasing power parity ppp exchange rate in 1993 the poverty line was updated to 1 08 per person per day at the 1993 ppp exchange rate which is the line we use in this paper poverty lines have always existed indeed 1 per day was chosen in part because of its proximity to the poverty lines used by many poor countries 1 however the 1 a day poverty line has come to dominate the conversations about poverty to a remarkable extent

in defence of degrowth abstract this article defends the proposal of sustainable degrowth a starting premise is that resource and co2 limits render further growth of the economy unsustainable if degrowth is inevitable the question is how it can become socially sustainable i e a prosperous and stable rather than a catastrophic descent pricing mechanisms alone are unlikely to secure smooth adaptation a full ensemble of environmental and redistributive policies is required including among others policies for a basic income reduction of working hours environmental and consumption taxes and controls on advertising policies like these that threaten to harm the economy are less and less likely to be implemented within existing market economies whose basic institutions financial property political and redistributive depend on and mandate continuous economic growth an intertwined cultural and political change is needed that will embrace degrowth as a positive social development and reform those institutions that make growth an imperative sustainable degrowth is therefore not just a structuring concept it is a radical political project that offers a new story and a rallying slogan for a social coalition built around the aspiration to construct a society that lives better with less

when does economic growth reduce poverty and strengthen the middle class a state level sector specific analysis of peru using novel state level data of peru from 1997 to 2010 we investigate how growth in different sectors affects poverty rates and the middle class our results indicate that only the manufacturing sector seems to robustly decrease poverty growth in the service sector emerges as a meaningful predictor of a rising middle class allowing for regional differences we find substantial variation across the 25 peruvian states with large shifts in magnitudes signs and statistical importance beyond the immediate implications for peru these findings highlight the importance of analyzing the link between economic performance and poverty rates on a subnational level policy implications are likely to differ substantially depending on the source of economic growth and regional particularities

how does income redistribution affect households material footprint abstract this paper presents a study of the evolution of spanish households material footprint for the period 2006 to 2013 the method proposed combines the multiregional input output model with spanish national data on household consumption according to social group material footprint has been affected by the 2008 economic crisis in relative terms the share of spanish households material footprint with respect to total material footprint decreased drastically from 70 7 in 2006 to 50 8 in 2011 this reduction can be mainly attributed to the construction sector crash 34 4 of the reduction is due to construction materials followed by biomass 29 metals 27 1 and fossil fuels 26 1 by type of household the material footprint exhibits a scale effect while consumption and income levels grow and this is accompanied by a global teleconnection effect which varies from 62 for biomass to 64 for metals to 82 for construction materials to 95 for fossil fuels given the context of increasing income inequality we perform one redistribution simulation from high to middle and low income households finding a material footprint increase in all cases the most materialized consumer basket is that corresponding to households with incomes between 1500 and 1999 euros above that income level the growing weight of expenditures on services reduces the use of materials importantly social income redistribution and environmental material footprint sustainability will become incompatible if responsibility is transferred only to households

the developing world s bulging but vulnerable middle class summary western notions of the middle class are of little obvious relevance to developing countries instead the middle class is identified here as those living above the median poverty line of developing countries even if still poor by rich country standards over 1990 2005 economic growth and global distributional shifts allowed an extra 1 2 billion people to join the developing world s middle class four fifths came from asia and half from china many of those in this new middle class remain fairly close to poverty only 100 million of the 1 2 billion would not be considered poor in any developing county economic growth typically came with an expanding middle class

returns to capital in microenterprises evidence from a field experiment small and informal firms account for a large share of employment in developing countries the rapid expansion of microfinance services is based on the belief that these firms have productive investment opportunities and can enjoy high returns to capital if given the opportunity however measuring the return to capital is complicated by unobserved factors such as entrepreneurial ability and demand shocks which are likely to be correlated with capital stock the authors use a randomized experiment to overcome this problem and to measure the return to capital for the average microenterprise in their sample regardless of whether they apply for credit they accomplish this by providing cash and equipment grants to small firms in sri lanka and measuring the increase in profits arising from this exogenous positive shock to capital stock after controlling for possible spillover effects the authors find the average real return to capital to be 5 7 percent a month substantially higher than the market interest rate they then examine the heterogeneity of treatment effects to explore whether missing credit markets or missing insurance markets are the most likely cause of the high returns returns are found to vary with entrepreneurial ability and with measures of other sources of cash within the household but not to vary with risk aversion or uncertainty

brother can you spare some time sustaining prosperity and social inclusion in america s metropolitan regions understanding the factors and processes that help regions sustain economic growth has become a topic of increasing interest in recent years we examine factors associated with the length of growth spells for the 184 largest regions in the united states from the period 1990 2011 we find that growth duration is positively related to a number of factors one might expect including lower levels of reliance on manufacturing and a higher proportion of the population with middle education levels however we also find that the length of growth spells is strongly related to lower levels of metropolitan income inequality and to measures of social and spatial segregation suggesting that more equitable and more integrated regions are better able to sustain growth

assessing food insecurity in latin america and the caribbean using fao s food insecurity experience scale abstract the complexity of the operational concept and definition of food insecurity has complicated the study of the food insecure and efforts to determine clear policy directions previous findings on the prevalence and severity of food insecurity are inconsistent and often depend on the measure used to overcome limitations in food security measurement the food and agriculture organization of the united nations developed the food insecurity experience scale which is the first survey protocol to measure people s direct experience of food insecurity on a global scale using this new measure our study contributes to the understanding of the food insecure by examining the determinants of food insecurity within and across countries in latin america and the caribbean lac using a series of multilevel linear models we find the three determinants associated with the largest increase in the likelihood of experiencing food insecurity in lac are low levels of education limited social capital and living in a country with low gdp per capita results suggest the need to promote education of the most vulnerable encourage social interactions that help build individuals social capital and adopt gender sensitive programs the results also suggest the need for a shift in policy from short term strategies to long term efforts that sustain household productive capacity and employment to promote sustained economic growth

the poor get poorer tracking relative poverty in india using a durables based mixture model abstract i propose the use of a durables based mixture model to identify the consumption class structure of a population the mixture model decomposes the marginal distribution of durables ownership across all households into three conditional distributions one each for lower middle and upper classes along with their weights in the population distribution endogenously determining class membership this approach provides a potentially deeper understanding of the dynamics of classes in particular the lower class than can be obtained using poverty lines or pca alone it avoids many well known problems with expenditure data ameliorates the impact of changing survey designs and enables an analysis of the behavior and membership of classes over time i use the mixture approach to show that the urban lower class in india became smaller but poorer during the 1990s

why so much stability one of duncan black s 1958 more important contributions was a classically simple proof that with complex issues and majority voting a stable outcome is unlikely this very simple proof that there would normally be no motion which can get a majority against all others and hence that any possible outcome is dominated by another has been elaborated and made more precise by later work without most improbable conditions endless cycling would be expected this is particularly true when logrolling is present as it normally is if we look at the real world however we observe not only is there no endless cycling but acts are passed with reasonable dispatch and then remain unchanged for very long periods of time thus theory and reality seem to be not only out of contact but actually in sharp conflict it is the purpose of this article to demonstrate that our existing theory when properly looked at does indeed imply a relatively stable outcome to voting in some cases however this stability will not be a true equilibrium because a random member of a large set will be chosen and then that random outcome will be left unchanged for long periods of time it does not dominate all other outcomes but is retained merely because of its particular history there are already several possible explanations for the observed stability in the literature we will take them up as they become relevant to the general line of reasoning i should however warn the reader that my own previous work including joint work with buchanan will play a major role here this may simply reflect egotism but i think that some of the early work which is now partially forgotten can provide solutions for more modern problems much recent public choice work has involved spatial models and these models frequently ignore logrolling the reason presumably is that it is very hard to put logrolling in a two dimensional diagram we shall begin considering such special models and assume that the issues are the sort that does not lead to logrolling and then turn to more complex logrolling problems with respect to the first situation in which logrolling does not occur there is already one possible explanation for the observed stability in the literature

what is middle class about the middle classes around the world we expect a lot from the middle classes jim frederick writing in time magazine in 2002 stated china s burgeoning middle class holds the key to the future of the country in a more academic vein easterly 2001 concludes based on a comparison of a large number of countries that countries that have a larger middle class tend to grow faster at least if they are not too ethnically diverse in another article birdsall graham and pettinato 2000 rue the shrinking of the middle class the backbone of both the market economy and of democracy in most advanced societies in the face of burgeoning globalization the economic historian david landes writing about the wealth and poverty of nations 1998 explains england s early ascendancy in terms of the great english middle class of the eighteenth and nineteenth centuries of course there is nothing new about this faith in the middle class it follows a long line of theorizing going back at least to max weber 1905 at least three distinct arguments are traditionally made in one new entrepreneurs armed with a capacity and a tolerance for delayed gratification emerge from the middle class and create employment and productivity growth for the rest of society for a formalization of this argument see acemoglu and zilibotti 1997 in a second perhaps more conventional view the middle class is primarily a source of vital inputs for the entrepreneurial class it is their middle class values their emphasis on the accumulation of human capital and savings that makes them central to the process of capitalist accumulation for example doepke and zilibotti 2005 2007 the third view a staple of the business press emphasizes the middle class consumer the consumer who is willing to pay a little extra for quality in this view the middle class demand for quality consumer goods feeds investment in production and marketing which in turn raises income levels for everyone murphy shleifer and vishny 1989 1 this essay asks what we should make of these arguments in the context of today s developing countries starting from data on patterns of consumption and investment by the middle class we look for what is distinct about the global middle class especially when compared to the global poor defined as those whose per capita daily consumption valued at purchasing power parity exchange rates is below 2 a day who were the subject of a previous essay in this journal banerjee and duflo 2007b in particular is there anything special about the way the middle class spend their money earn their incomes or bring up their children

aggregate capital productivity in the us economy 1964 2001 in the decomposition of the us macroeconomic pre tax rate of profit as the product of profit share and capital productivity this paper considers the role of capital productivity over the period 1964 2001 the primary finding is that prior to 1982 capital productivity fell because capital deepening proceeded faster than labour productivity growth whereas from 1982 to 1997 the opposite occured if prior to 1982 the us economy was characterised by marx biased technical progress what requires explanation is why labour productivity continued to grow after 1982 in the absence of sufficient capital deepening the paper explores various hypotheses contrasts neoclassical and classical notions of technical change and investigates the robustness of its results to the productive unproductive distinction and to accounting for changes in capacity utilisation

on the stability of legislative outcomes this paper argues that by arranging vote trades in the face of information costs legislative committees contribute to the stability of legislative outcomes a structure of permanent committees and subcommittees facilitates informational specialization and helps legislators acquire experience in their specializations committees arrange vote trades by adjusting amounts of recommended spending on separate items in bills that receive majority support each legislator is allotted a roughly equal amount of legislative spending that he can influence plus an additional amount that depends on his skill and experience as a committee member

less is more the influence of aspirations and priming on well being abstract if resource consumption is to be reduced through economic de growth individuals in industrialized countries may have to accept a reduction in their consumption levels in democratic societies implementing this process requires the consent of a majority of the population however as long as people have high reference levels of consumption lower consumption will induce feelings of loss and hence evoke resistance this paper summarizes recent experimental evidence on some of the factors that determine the utility costs involved in decreasing consumption the results suggest that the acceptance of economic de growth would be facilitated if people s material aspirations were moderated and the extent to which material achievements are emphasized in our daily environment were reduced an analysis of the financial and economic crisis that developed during 2008 suggests that it will not contribute to either of these points rather by increasing the public s focus on the economic sphere even beyond pre crisis levels it may lead to a further decrease in the acceptance of de growth policies in the population

centralized vote trading this paper presents a model of centralized vote trading in a legislature in this model legislators trade only with party leaders who set prices at which they will buy needed vote changes and sell promises to pass or defeat particular bills each legislator trades away votes on bills of little concern to him and of high concern to leaders and purchases promises from the leaders to pass or defeat particular bills of high concern to the legislator relative to the price the leguslator must pay

future green economies and regional development a research agenda abstractfuture green economies and regional development a research agenda regional studies the past 30 years have seen an explosion of interest and concern over the detrimental impacts of economic and industrial development despite this the environmental agenda has not featured substantially in the regional studies literature this paper explores a range of options for regional futures from a clean tech economy and the promise of renewed accumulation through to more radical degrowth concepts focused on altering existing modes of production and consumption ecological sustainability and social justice in so doing it investigates the potential role of regions as drivers of the new green economy drawing on research into sustainability transitions

an econometric model of a public university s income and enrollments abstract an econometric model of a public organization s income and outputs is applied to a public university and contains equations representing legislative demand for enrollments students attendance demand and university supply the results support the hypotheses that supply and the two demands determine the university s instructional funding and enrollments and that interest groups affect legislative demand while per student legislative funding for high cost graduate and professional students was not found to exceed that of undergraduates evidence is presented that these enrollments are financed by the estimated discretionary funds resulting from the legislature s high cost of controlling academic activities