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Potential mechanisms for the social regulation of economies on global and local scales: an institutional analysis of ESG investment and community renewables

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  • Kazuhiro Okuma

    (Tohoku University)

Abstract

Under economic globalization, the ruling power of national institutions has been weakened. This poses an important question regarding how social regulation of the economy can be achieved in multilayered spatial scales ranging from local to global. Two recently emerging movements—global ESG investment and local community renewables—warrant attention as potential institutions for such regulation. Drawing on the régulation approach, this article analyzes these two movements to consider their significance and potential. ESG investment, driven by a coalition of NGOs and pension funds, reflects environmental and social concerns in global finance, which is the core of the current finance-led growth regime. Community renewables, meanwhile, by utilizing local natural resources with the participation of the local residents, create businesses that contribute to entrepreneurial regional development, which has been necessary since the end of Fordism. Both of these can be understood as the civil-society-led movements that directly incorporate environmental and social interests into dominant institutional forms under “glocalization.” These two movements can be considered viable, since they are compatible with current growth patterns. However, neither of the movements can achieve transformative changes for sustainability on its own, since each depends on external factors. That said, it is conceivable that individual/local actions and the global competitive environment could interact and produce cumulative change (i.e., coevolve). States will play an important role in this process by advancing such actions through national institutions.

Suggested Citation

  • Kazuhiro Okuma, 2019. "Potential mechanisms for the social regulation of economies on global and local scales: an institutional analysis of ESG investment and community renewables," Evolutionary and Institutional Economics Review, Springer, vol. 16(2), pages 523-541, December.
    • Handle: RePEc:spr:eaiere:v:16:y:2019:i:2:d:10.1007_s40844-019-00133-5
    DOI: 10.1007/s40844-019-00133-5
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    References listed on IDEAS

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    Cited by:

    1. Kazuhiro Okuma & Yuji Harada, 2022. "Robert Boyer, Les capitalismes à l’épreuve de la pandémie, La Découverte, 2020," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 511-522, April.

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    More about this item

    Keywords

    Institutional forms; Institutional hierarchy; Spatial scale; Glocalization; ESG investment; Community renewables;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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