Governing for sustainable development: rethinking governance and ecological economics

This chapter focuses on the relationship between ecological economics and robust interpretations of governance systems and networks. Although ecological economists have long recognized the importance of governance, their focus has tended to be on specific policy tools and more traditional views of institutions as externalities, or in more generalized models of governance that tend to ignore specific relationships between institutional structures, functions, rules and individual and collective agency. An integrated approach to ecological economics and governance is needed that appreciates that governance systems exist as both a property of ecosystems and as a property of social systems, and that the governance of social systems concerns more than attending to market failures and regulating market behaviors. To make this point we take a deeper look at the properties of governance functions as considered by public management, ecologists, anthropologists and sociologists. Second, we argue that ecological economics needs to better integrate contemporary theories and empirical studies of governance systems as networks of public, nonprofit and private sector organizations and institutions. The treatment of governance within the political science and public administration fields, as well as those who have tended to focus exclusively on the relationship between environmental governance and environmental policy is considered. Third, we examine how global scale considerations of sustainability of social ecological systems treat governance, and how the ecological economics field has historically approached questions of governance. We consider the place and purpose of governance within two of the more recent global frameworks focused on the sustainable management of social ecological systems: the Millennium Ecosystem Assessment (MEA) and the United Nations Sustainable Development Goals (SDGs). We then return to the literature relating to governance as it appears in ecological economics, followed by a look at the range of innovative policies, policy tools and market incentives that require governance response. These responses include the development of new market mechanisms in the form of payment for ecosystem services; the integration of ecosystem services performance indicators into government performance management systems and regulatory frameworks; and the development of new forms of quasi-governmental institutions as found in common asset trusts. We conclude with a set of enduring questions that can shape future considerations of the relationship between governance and ecological economics.