17 April 2012

Designing institutions?

Again and again, we prefer to design systems, laws, regulations and institutions that will, we hope (or pretend to hope) bring about certain outcomes. So:
The root problem of decarbonizing energy supplies, climate change, and many other aspects of environmental sustainability is the lack of institutions to reconcile the conflicting incentives of people involved in national democracies and other governments, globalization, and environmental sustainability. What will it take to save the Earth?, Joel E Cohen, 'New York Review of Books', dated 26 April (subscription)
and again:
The difficult challenges of our energy future include, first, designing and creating institutions that adjust the incentives of globalization and national governments .... (ibid)
I disagree. I think the composition, structure and activities of an organization should be not a precursor to, but a consequence of the way it achieves its goals. Designing institutions smacks of self-indulgence when facing urgent, potentially catastrophic challenges. Far better to reward the solution of our problems, whoever carries them out and however they do so, as would happen under a Social Policy Bond regime. Many of our problems are unprecedented in scale, and our knowledge of them and potential solutions is rapidly expanding. Designing institutions is in such circumstances will most likely be a waste of time; a laborious, contentious and divisive process that can easily be derailed, corrupted or endlessly delayed by vested interests opposed to any real change. (See also this earlier post.)

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