Governance and Degrowth. Lessons from the 2008 Financial Crisis in Latvia and Iceland

Åsa Nyblom, Karolina Isaksson, Mark Sanctuary, Aurore Fransolet and Peter Stigson
Additional contact information
Åsa Nyblom: IVL Swedish Environmental Research Institute, P.O. Box 210 60, SE-100 31 Stockholm, Sweden
Karolina Isaksson: VTI Swedish National Road and Transport Research Institute, Box 55685, SE-102 15 Stockholm, Sweden
Aurore Fransolet: Centre for Studies on Sustainable Development (DGES), Université libre de Bruxelles, CP 130/03, Avenue F.D. Roosevelt 50, 1050 Brussels, Belgium
Peter Stigson: Projektengagemang AB, P.O. Box 47146, 100 74 Stockholm, Sweden

Sustainability, 2019, vol. 11, issue 6, 1-16

Abstract: This paper investigates the role of governance dimensions in socio-economic transitions in line with degrowth, i.e., an equitable downscaling of the economy. Our focus is on experiences from the 2008 economic crisis in Latvia and Iceland. Although these cases are not in themselves examples of degrowth, we see them as important sources of empirical learning from major socio-economical transitions; furthermore, we see crises as possible starting points for future degrowth transitions. This paper applies a governance framework to explore the vast differences in management strategies and crisis outcomes in Latvia and Iceland. In Iceland, public resistance led to a shift in policy measures such that economic inequality and the negative social consequences of the crisis decreased. In Latvia, public resistance existed but had no strong influence. The outcome in Latvia included none of the elements of equitable downscaling found in the case of Iceland. These two cases show how differences in formal institutional arrangements, political culture and societal trust affect different governance dimensions during a time of crisis. The analysis illustrates the importance of institutional and governance dimensions in major socio-economical transitions, and demonstrates how they influence the kind of transition that can be realized.

Keywords: degrowth; equitable downscaling; governance; institutions; policy; radical socio-economic transitions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:6:p:1734-:d:216247

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