Background, Scientific Concept and Objectives of the Network


Konrad Hagedorn and Antonia Lütteken
Humboldt University of Berlin
Department of Agricultural Economics and Social Sciences




Introduction
Background of the Project
Why Create a Network Focusing on Research and Communication?
Research Requirements to Be Met by the Network
Proposed Network Activities for a Period of Four Years (1999-2002)
References
 
 

Introduction


CEESA is intended to become a network of interested scientists and experts and is oriented towards the following objectives:

In this paper, we will first point out how this idea came into being, for what reasons it was established, what the main goals are, which subjects of research are planned to be covered and how the process of communication will be scheduled over time. All these concepts should be regarded as preliminary suggestions which will be discussed and can be changed by the participants themselves.

Background of the Project


Throughout the history of mankind, the economic activity has always relied on the availability of natural resources used for production and consumption and on a well-functioning ecosystem because its services were indispensable. Although traditional societies have also experienced many cases of ecological crisis, most of them developed norms and procedures that protected the natural environment. However, this has changed substantially since modern technologies have increasingly enabled economic and political actors to deplete natural resources and to disturb or even destroy elements of and relationships in the ecosystem. Agriculture and its ecological impact on rural areas has given many examples of this problem.
Since we know as economists that the emergence of ecological problems is closely connected with the fact that environmental goods are public goods which require collective action and are otherwise not provided, theoretical reasoning has led to a conclusion that appears to be logical: In the process of constant development of new technologies we expect the mechanisms of economic competition to be always able to select the most favourable ones among the new opportunities. However, these mechanisms have not only selected those options that increased productivity and efficiency, but often gave priority to those ones that only gave the appearance of economic progress because they burdened external cost on nature and ecosystems. From this we have learned that we have to redefine progress, and some members of our discipline argue that this simultaneously means to redefine economics to a large extent.
In socialist systems, the economic coordination was neither separated from the political system nor left to market mechanisms and other pluralistic arrangements, but was integrated into the hierarchies of central planning. In principle, this presents a governance structure which could more easily prevent external cost to be allocated to nature. However, the inefficiencies of the system often left little scope for avoiding environmental pollution and damage. Therefore, the above conclusion is in sharp contradiction to empirical findings. During the socialist era the idea of sustainable development was obviously even more neglected in the Central and Eastern European countries (CEE countries) than in the western industrialized countries, a phenomenon that also applies to the agricultural sector. At present, problems of environmental protection and nature conservation increase in importance particularly within the agricultural sector and have, therefore, to be taken into account in the current long-lasting transition process. "Old" environmental issues deriving from the past and "new" problems of resource protection which result from the transition process itself have to be tackled simultaneously.
A variety of investigations regarding the environmental situation in transition countries demonstrate that there is considerable need for economic, institutional and political approaches in order to find adequate solutions that meet the requirements of sustainability. On the one hand, serious environmental damage have been documented in CEE countries, and also in the agricultural sector where particularly improper agricultural practices have caused severe environmental problems. On the other hand, areas showing a high biodiversity have been kept more or less untouched in economically less important regions. Some of them have now obtained a new status as protected areas.
The crucial question to be answered is whether and how the requirements of environmental protection and nature conservation will be taken into account in the process of restructuring the political and economic framework. This holds especially true of the agricultural sector. During the first years of transition, the impact of agriculture on the environment declined in most of the countries due to a lack of liquidity and other typical transformation problems like insecurity of property rights. After these difficulties have been overcome, economic recovery of the sector will lead to an increasing intensity of production. This will probably be correlated with the increase in negative impacts on natural resources if the process is not accompanied by adequate environmental measures and arrangements to achieve intensification in a sustainable manner.
The guiding question of our network will be whether the transition of the agricultural sector and the transition to sustainable development will be both achievable and compatible. The complexity of this subject can be highlighted by defining four main issues:

    1. Can the transition process cope with the requirements of environmentally sound development? - This initial question refers to the above-mentioned observation that natural capital and ecosystem services may be neglected in the transition process. This could be due to the fact that economic and political actors are dominated by the motivation to distribute land and other assets which secure long-term private income streams, and forget about the importance of public goods and institutions for providing these goods. In this respect, they have to cope with the additional difficulty that such "institutions for sustainability" cannot simply be copied from the western world, but also here they are still to be designed1 .
    2. Does the transition towards a market economy simultaneously facilitate a change towards the paradigm of sustainable development? - This extended question can be considered as a response to the insight that environmental protection cannot be achieved against the economic, social, political, cultural and ethical convictions and interests of the groups and actors involved. Instead of an isolated view on environmental issues an extended perspective integrating these aspects is required, and the network’s approaches and results on ecological and related economic questions must always be based on this understanding of sustainability.
    3. Will the traditional and the transformed agricultural institutions both support this transition towards sustainability? - This question emphasizes a central element regarding the theoretical foundation of the network’s activity. It is based on the hypothesis that both the transformation of agriculture and the transformation towards sustainability are an issue of institutional change. Adequate institutions are the basic pre-requisite for a political consensus on environmental objectives, for sufficient efforts of monitoring the environmental situation, for the design of policy instruments and efficient methods of implementation and evaluation. In this context, traditional institutions as well as new institutions emerging after 1990 have to be taken into account.
    4. What institutional and political changes are required and what is the role of international agreements and EU enlargement in this context? - The required changes of institutions and instruments may not only be endogenous to the transformation processes within a country, but can also derive from exogenous sources. The governments of transition countries may follow the objective to comply with international agreements on environmental protection, to be integrated into international programmes supporting them with funds, to achieve the desired membership in the European Union and NGOs whilst scientists can also stimulate cross-country discussion. Whether or not such transfers of rules and policies are feasible and what kind of difficulties and particularities they may bring about has to be analysed.

Why Create a Network Focusing on Research and Communication?


The basic idea of the project is to stimulate and initiateresearch and motivate publications in the field of environmental and agricultural economics and social sciences. Of course, this requires increasedcommunication and improved coordination between the people involved. CEESA is supposed to facilitate these processes. The following arguments show that there is a need for such an innovation:

As a consequence, all subjects and aspects CEESA will deal with have to be approached considering the interrelationship between two types of transformation, i.e. transformation of society and the economy towards a market-oriented system embedded in pluralistic arrangements of institutions, and transformation towards sustainability whatever the institutional and organizational structure required to achieve this fundamental change may be in the future.
Stimulating research and communication by CEESA network therefore has two objectives: Accordingly, the network’s orientation differs substantially from many other activities to be found in the same area: Research undertaken within the CEESA network may contribute to the wide range of research topics on societies under transition. As the transition process requires difficult political and economic changes and will, hence, take a long time, research has to focus on the political and economic feasibility of the process, the next steps of development, the temporary structures of agricultural organization and the obstacles against transition and sustainability. As far as research in the field of environmental economics and environmental policies in countries under transition is concerned, the political and institutional aspects of reforming or introducing agri-environmental practices and policies are of major importance. Of course, this also holds true if we consider medium and long-term impacts of agriculture on the natural environment.

Research Requirements to Be Met by the Network


The issue of pursuing the change of paradigm to sustainable development refers to the process of restructuring in the countries itself. In East Germany, the economic research on the transition of the agricultural sector could assume relatively favourable conditions for the process of change, resulting in a normative approach oriented towards the desired results of transformation. The situation in other Central and Eastern European countries is different, i. e., their political and economic conditions were more unfavourable for a rapid transition of the sector. Therefore, research has to focus on the political and economic feasibility of the process, which first requires a positive approach. The result of the transition process, which will be seen only in the far future, may, therefore, be considered as less important than the process itself concerning the next steps of development, the transitional structures of agricultural organizations, the obstacles against transformation as well as the medium and long-term environmental impacts of agriculture. As a consequence, a positive and process-oriented approach seems to be adequate.
This has conceptual consequences for the analysis of the transition process. Two factors are of main importance:

Within this framework, further research has to deal with the various problems of sustainable development in countries under transition. Nearly all of these fields of further research are linked to the complex institutional and political system in which transition takes place. Analysis has to focus mainly on the institutional and legal framework, the participating protagonists and organizations, adaptation of farming systems as well as impacts at the farm level and the political sphere, i. e. on politics and policies on the national and international level. The following main areas of research can be identified and from which a few issues have to be chosen to be studied by the CEESA Network2:
    1. Major environmental problems caused by agriculture in the CEE countries have to be quantified and analysed, with an attempt to explain the main reasons for environmental impacts of agricultural activities. In other words, the network to be set up may aim at developing a monitoring system based on ecological indicators and economic evaluation, including the causal connections responsible for the environmental problems. A comparative analysis between the participating countries regarding environmental hot spots in agriculture could be useful, focusing on common features and differences between countries. This could be the first step to be taken before starting analysis on the institutional and political level concerning the emergence of environmental damages. Country reports already elaborated on the "Present Environmental Situation in Agriculture" are initial studies leading to a more comprehensive analysis of interdependencies between agricultural practises, institutional arrangements and environmental impacts. Following the comparative approach, interesting questions are whether similar environmental damages are caused by different reasons and vice versa, i.e. whether similar legal and institutional arrangements lead to the same degree of environmental threats in the participating countries.
    2. In the course of privatization and restructuring of agricultural land and agricultural production units, decisions on institutional arrangements and the organizational form of agricultural production units have been made, which, in most cases, have long-term impacts on environmental protection and nature conservation. Often opposite priorities of land use and protection of natural resources have been competing with each other, e.g. in Poland where the privatization and utilization of protected areas for agricultural purposes is debated. Other examples, like Bulgaria, reveal the problem of contamination of agricultural land and the question of compensation of the former (pre-war) owners. Generally speaking, it is a question of property rights on the various components of natural resources and the question of how these rights should be distributed among the stakeholders involved. Sometimes, it may be difficult to harmonize the goals of "desired distribution of income streams resulting from agricultural property rights" and "allocation of nature according to sustainability criteria".
    3. Attention has to be paid to the conditions at the level of institutional arrangements and instruments of agri-environmental policies including implementation. Do implemented regulations and given legislation act as incentives for sustainable development and environmentally sound agriculture? How can the latter be improved? What kinds of systems of regulation and administration were established? How can the efficiency of institutions be increased and developed? What kinds of political measures may encourage and improve implementation? What is the role of international cooperation and international aid in promoting environmental policies and sustainable development?
    4. The question whether market-oriented use of natural resources will be compatible with sustainable development in agriculture also depends on mechanisms of participation and conflict resolution. This mainly refers to the actors participating in the process of establishing institutional arrangements and introducing policy instruments. Probably, many environmental groups may not have enough influence in the decision-making process on environmental policy. It is a question of balanced participation and collective action, who – i. e. what part of the rural community - is integrated in this decision-making process and what interest groups are included. The analysis of the agricultural and environmental framework has to take into account the structure of society as well as the structure of interest groups. Further research has to clarify whether the latter did already exist in the former political system or whether they have constituted themselves during the transition process, whether they could be integrated in the decision-making process without any constraints and whether they are actually representing the preferences of their members.
    5. On-farm research has to deal with the possibilities of adapting farming systems and farmers’ behaviour to the new conditions of future agricultural policies under EU conditions and simultaneously including sustainable, environmentally sound forms of agricultural production. Adequate strategies for farmers and decentralized strategies on regional levels have to be developed. Indicators of sustainable development should be elaborated for the purpose of international comparison. Furthermore, problems of implementation and acceptance of elaborated measures have to be analysed, including impact assessment on farm level.
    6. Since many CEE countries want to join the European Union, environmental demands on land use may increase in importance. For the agricultural sector so-called "CAP-style policies" are implemented step by step, in the five associated countries in particular. In comparison, harmonization of environmental policies has been much slower. One reason may be that there are no financial transfers from the EU in the field of environmental policies as may be expected by the countries in the field of agricultural policies. Nevertheless, the necessity of harmonization with EU standards and regulations and the problems of their implementation have to be analysed, particularly with regard to the costs.
    7. International organizations and international agreements such as the Rio Convention as well as cross-border cooperation like the "Pan European Ecological Network" or "Baltic 21" may play an important role in the process of sustainable development. They may influence the process of transition via the activities of protagonists and institutions and may act as driving forces towards sustainability.
    8. Sustainable agriculture is more a question of the overall system of agrarian culture than an isolated technical problem. That means that not only the cardinal questions regarding the ecological problems (such as degradation and overuse of natural resources) or economic problems (such as the risk of policy changes or globalization of markets etc.) are of major importance. The complex system of normative institutions and values that shapes the environmental awareness of the population and, hence, influences demand and supply of environmental goods has to be taken into account, too. This system of informal institutions may change in the course of the transition process, as well as the belief systems concerning the role of agriculture in the society. These changes and the impact on agricultural development as well as on natural resources in the countries under transition have to be included into the research.

Proposed Network Activities for a Period of Four Years (1999-2002)


The main elements for structuring the activities of the network are the workshops and the working periods between the workshops. This "CEESA process" can be outlined as follows (see also the attached Table at the end of the paper):

Four phases of research determined by five workshops for presentation, discussion and identification of research issues: Three different reports/studies should be elaborated: Presentation and publication of results: The priorities of research will be chosen depending on the interests and capacities of the CEESA participants. In particular, the first workshop will be used to collect suggestions and arguments and to decide on future research activities and adequate structures of cooperation. Further issues will be the formation of working groups and organization of research during the periods between the workshops, as well as the preparation of forthcoming publications and next workshops.

1. In economics and social sciences, institutions are usually defined as follows: “Institutions are the rules of a society or of organizations that facilitate co-ordination among people by helping them form expectations which each person can reasonably hold in dealing with others. They reflect the conventions that have evolved in different societies regarding the behavior of individuals and groups relative to their own behavior and the behavior of others. In the area of economic relations they have a crucial role in establishing expectations about the rights to use resources in economic activities and about the partitioning of the income streams resulting from economic activity – “institutions provide assurance respecting the actions of others, and give order and stability to expectations in the complex and uncertain world of economic relations” (Runge, 1981: XV)”, Ruttan, 1984, p. 2f.). Bromley (1989, p. 42) distinguishes between “conventions” and “entitlements”. “That is: A convention is a regularity (R) in human behavior in which everyone prefers to conform to R on the expectation that all others will also conform to R. A convention is a structured set of expectations about behavior, and of actual behavior, driven by shared and dominant preferences for the ultimate outcome as opposed to the means by which that outcome is achieved. On the other hand: An entitlement is a socially recognized and sanctioned set of expectations on the part of everyone in a society with regard to de jure or de facto legal relations that define the opportunity sets of individuals with respect to the opportunity sets of others”. In addition, we have to distinguish between institutions and organizations. We may mention as an example, “that schools, corporations, and futures markets obtain their meaning from institutions; such organizations only exist because there is a set of working rules which defines them. A corporation only exists as a separate legal entity by virtue of a set of working rules (entitlements) which defines what is and what is not, a corporation. The same holds true for futures markets, for schools, and for hospitals. Institutions define certain organizations or social programmes, but these programmes and organizations are best thought of as not being institutions, but as being defined by institutions” (Bromley, 1989, p. 43).

2.Based on this paper presented during the first CEESA workshop and during further discussions, participants have agreed on three main areas of activities and research done by CEESA: Sustainable Farming Systems (point 5, see above), Agricultural and Environmental Policies (points 3, 6 and 7) and Institutional Aspects in the Process of Sustainable Development (points 2 and 3). Under each research topic a working group was formed to prepare initial concepts of research and communication in the respective area. The detailed issues to be treated within the network will be subject to further discussion.

References


Bromley, Daniel W. 1989. Economic Interests and Institutions: The Conceptual Foundations of Public Policy, Oxford: Basil Blackwell.
Runge, Carlisle Ford. 1981. Institutions and Common Property Externalities: The Assurance Problem in Economic in Economic Development, Ph. D. Dissertation, University of Wisconsin-Madison.
Ruttan, Vernon W. 1984. Induced Institutional Innovation, Manuscript (42 S.). St. Paul: Department of Economics and Department of Applied and Agricultural Economics, University of Minnesota.

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