Humboldt-Universität zu Berlin - Resource Economics

Integrative institutions

Application of the analytical framework “Institutions of Sustainability” leads to the need for adequate theories on how to institutionalize sustainability? This raises the question: What is special about those institutions which bring about sustainability? To contribute to an answer we propose that achieving sustainability has to do with balancing two sorts of costs; the costs of integration and segregation by institutions.Integrative institutions hold decision makers liable for the transaction costs they cause, they have the duty to internalise them and no right to externalise them. Segregative institutions soften this restriction, relieving decision makers from transaction costs and placing their burden, at least partially, on others. Similarly, integrative institutions are rules that make the decision makers eligible for the beneficial effects they cause and hold them liable for the adverse effects. Segregative institutions allow deviations from this principle so that the decision makers may forego some benefits, which then accrue to others, but their liability for some adverse effects may also be reduced in a way that others have to accept nuisances. As a contribution to theory we suggest to conceptualize the problem of achieving sustainability as a choice and compromise between these integrative and segregative properties of institutions.


More information on the topic „Integrative and Segregative Institutions“ please find in the following paper: Hagedorn, Konrad (2015): Can the Concept of Integrative and Segregative Institutions Contribute to the Framing of Institutions of Sustainability? Sustainability 2015, 7, Issue 1.