Dynamic Policy Model (DPM)

Overview

This article provides an overview of the Dynamic Policy Model (DPM) a policy instrument devised in response to the phenomenon of neo-liberal globalism which persists as the most influential and powerful theoretical construct shaping the course of human societies across the world. A Qualitative Statistical Model is developed to explore the thematic domain of neo-liberal globalism, being the scientific expression of latent substantive motives of nation-states as they undertake economising activities of allocation and redistribution.

A Functional Model is used to demonstrate the dynamic configuration of neo-liberal globalism as a universal mechanization of both social capital and urban capital. The theoretical foundation of this model derives from the conventional wisdom of statistical techniques as a matter of mathematical expediency such as to illustrate the DPM which clearly explicates an equilibrium condition of Qualitative Neutrality.

The qualitative statistical model is thus a rational paradigmatic device providing a framework with which to tangibly approach a theory of neo-liberal globalism. This feature is enhanced by the model’s amenability to intersect with orthodox IS-LM-BP macroeconomic model.

Turning to the theory of anti-globalism as an activity endogenous to the totalitarian hyper-structure of the international economy, the agenda of anti-globalism is thereby construed to reside within the functional model. In this context social capital as an engine of production is shown to comprise the institutional processes of social emancipation and market emancipation while the urban capital as an engine of circulation is designated to constitute the theory of localisation-systems and of earth-systems.

A series of brief case studies are included throughout to demonstrate the significance of Economic Freedom as an ultimate ambition of the nation-state.

The Qualitative Statistical Model

The qualitative statistical model presents the economic problem in terms of (a) the redistributive function and (b) the allocative function, taking the whole population as the reference group. This heterodox economic model demonstrates a qualitative neutral equilibrium as a consequence of the economising tendencies of society toward (a) urban development, as given by the Urban Capital Index; and (b) institutional development, as given by the Social Capital Index.

According to the central limit theorem, the reference group (population) is distributed according to normal distribution parameters. Mathematically, this is observed as the population and the cumulative domain of x as shown at Diagram 1. Together with the Qualitative Statistical Model (Diagram 2), the Redistributive Function (r) vertically intersects the urban capital/social capital equilibrium, and similarly, the Allocative Function (a) horizontally intersects at point (e). The y-intercept (a0) of (e) is definitive of the Normal Social Baseline. While the y-intercept (a1) is definitive of the Real (forced) Social Baseline, namely the Minimum Standard of Living. Therefore, the economising projects of government macroeconomic management is given as the redistributive function of Fiscal Policy (vertical dynamic) and the allocative function of Monetary Policy (horizontal dynamic) representing the government levers of dynamic economic growth. As a qualitative statistical model, the established equilibrium of the model is indicative of a Qualitative Neutrality that is optimally efficient toward the end goal of social equity represented by the vertical dynamic precisely corresponding to a line of Perfect Equality of qualitative neutrality.

The Dynamic Policy Model

The Dynamic Policy Model (Diagram 3) illustrates the discretionary policy framework of government fiscal policy and monetary policy.

The redistributive function is the fiscal policy frontier which provides urban capital up to the equilibrium point beyond which any further discretionary urban capital development incurs a trade-off of public externalities.

Public insurance extends the social safety net to a forced baseline in order to provide for an under stochastic load and accordingly the fiscal policy frontier is capped at the +3σ x-intercept representing the critical value trade-off. Here, the upper stochastic load suffers an absolute loss of public security and is thereby excluded in the redistributive function which is a zero sum gain in favour of the under-stochastic load. Therefore the redistributive function is linearly discretionary along the z-axis from o through to +3σ.

The allocative function is the monetary policy frontier which provides social capital up to the equilibrium point beyond which any further discretionary social capital development incurs a trade-off of private externalities. Private insurance extends the wealth frontier to a forced ceiling in order to provide for an upper stochastic load and accordingly the monetary policy frontier is capped at the -3σ x-intercept representing the critical value trade-off. Here, the under stochastic load suffers an absolute loss of discretionary spending and is thereby excluded in the allocative function which is a zero-sum gain in favor of the upper stochastic load.

The region of Dynamic Economic Development is therefore given as the disequilibrium condition of the fiscal policy frontier above or below the qualitative equilibrium of the redistributive function along the r-axis. In this way, the minimum level of qualitative neutral redistribution yields a public insurance sphere from 0 through to - ∞. Similarly, the minimum level of qualitative neutral allocation yields a private insurance sphere from 0 through + ∞.

Economic externalities arising from the Dynamic Policy Model are shown to occur consequential to conditions of disequilibrium above or below the qualitative neutral equilibrium along the r-axis. Thus the economising tendencies of society toward both contemporaneous urban (physical) economic development and institutional (social) economic development infer a dual-externalities outcome for the overall economy to the extent that any discretionary disequilibrium redistribution yields firstly, a contemporaneous oppositely directional change in the allocative dis-equilibrium along the r-axis such as to result in equivalent public and private externalities; and secondly, an equivalently sectoral enrichment and disutility outcome in each of the public insurance and private insurance domain.

Public externalities occur in the domain 0 through + ∞ and are distributed positively to Sector 3 which secures urban capital enrichment of disequilibrium redistribution and are distributed negatively to Sector 4 which suffers urban capital disutility. The disutility is a function of the incremental loss of absolute relative physical security. Correspondingly, private externalities occur in the domain 0 through - ∞ and are distributed positively to Sector 2 which secures social capital enrichment of disequilibrium allocation and are distributed negatively to Sector 1 which suffers social capital disutility. The disutility is a function of the incremental loss of absolute relative social, cultural and political security.

A Line of Perfect Equality corresponds to the redistributive function along the r-axis which intercepts the x-axis at 0. This line therefore represents the state of “perfect equality” of qualitative neutrality and accordingly global measures such as the United Nations Human Development Index (UNHDI) [1] inherently encapsulate these standard deviation differentials of equality.

Intersection with Macroeconomic Model

The Dynamic Policy Model intersects with the Macroeconomic IS-LM-BP Model along the qualitatively neutral allocative function whereby the sovereign monetary policy is theoretically in equilibrium with perfect capital mobility of the Balance of Payments (BP) line such as to establish the world interest rate as a natural consequence of external stability. This may occur under varying scenarios of exchange rate regimes, although the notion of Optimal Currency Areas (OCAs) [2] pioneered by Canadian economist Robert Mundell, suggests that in order to maximize economic efficiency, a broader geographical region and potentially the whole world may be a more appropriate sphere of the allocative function. If so, this would in turn yield greater qualitative neutrality.

The Functional Model

The Functional Model (Diagram 4) is the dynamic model of the Thematic Domain of Neo-liberal Globalism (Diagram 5) demonstrating the necessary confluence of institutional economics and urban economics, the latter increasingly known as economies of agglomeration or economic geography. This yields a conjunction space of qualitative neo-liberal globalism which occurs dynamically in the functional model as the configuration of social cohesion arising from the centripetal tendencies. The functional model, however, is also characterized by centrifugal tendencies that operate to “expel” both a lower stochastic load and an upper stochastic load. In conditions of qualitative neutral equilibrium, these loadings represent extreme sub-categeories as a function of human intelligence [3] such as f(7iq, isc), where 7iq represents the composite of each individual’sintelligence quotient measured as a composite of linguistic, logical-mathematical, visual-spatial, musical, bodily-kinesthetic, interpersonal, intrapersonal, and naturalistic intelligence and where isc represents the individual’s ability to actively engage social institutions. The crux of the functional model is the identification of social capital, namely the organisations and associations as well as the social norms and relationships that “glue” society together [4], being formative of centripetal processes of social cohesion.

Optimisation of the Functional Model

The relationship between economic development and global quality of life measures clearly indicates that efficient open market economies are significantly better adapted to meeting the quality of life needs of their constituents than those that are less open to trade and economic development[5]. Thus, the deficit of globalisation processes does not lie in the scheme of neo-liberal globalism per se, rather it is the way in which the global structures of international trade are adapted to interface with the diverse range of economic systems subject to differentials of contemporaneousness [6]. To this end, the World Bank broadly categorises world economies according to low-income, middle-income and high-income countries [7] as reflective of their gross national product and it is these contrasts that underlie the vast spectrum of collective “discontents” between and within nation states as they interface the market orthodoxy of the international economy. Therefore enquiries as to the appropriate focus of anti-globalisation cannot be globalisation itself, merely the semantic socio-cultural relations, the political terms and the operational mechanisms of neo-liberal globalism. Mittleman [8] has described the challenge thus, “… in other words, how can the contents of globalisation be revised so as to maintain its many important achievements and relieve the discontents?”

According to the qualitative statistical model, the implications of global discontents pertain to deficits in the state of social capital development and urban capital development which are necessarily rectified contemporaneously with dynamic economic growth. This in turn demands the rigors of economic development within the framework of free-market globalisation. Hence, Margaret Thatcher’s famous slogan of the 1980s “there is no alternative” is of enduring relevance to all (post)modern and developing economies. In this sense, the redistributive function and the allocative function may be further articulated as (a) development of social capital as an engine of production and (b) development of urban capital as an engine of circulation, respectively.

Social Capital as an Engine of Production

Social capital as an engine of production relates to the sociological and institutional basis of economic activity that combine to enable human capital development [9] and thereby the productive economy. The concept of social capital has been extensively theorized [10] and is defined by the World Bank as essentially, “the norms and networks that enable people to act collectively” [11]. This is a synergistic view [12] of the extent and efficacy of bridges between social capital and governance such that well-functioning states are those that exhibit optimal interaction of government and markets in civil society resulting in social and economic well-being. The obverse scenario of impoverished bridges between social capital and governance correlates with dysfunctional states. In this way, the entire realm of social capital is explicitly nested in terms of the end-goals of economic relations and thus, as an engine of production. Two key globalisation themes in the composition of social capital are the need for greater (a) social emancipation; and (b) market emancipation.

Social Emancipation

An anthropological view of globalisation denotes the inescapability of modernity resulting in imperial globality and it highlights the extensive human oppression arising out of the “new US-based form of imperial globality, an economic-military-ideological order that subordinates regions, peoples and economies world-wide” [13].

This is a counter hegemonic construct concerned with the increasing incongruence of the functions of social emancipation and social regulation best illuminated by the proliferation of regimes of selective inclusion and regimes of hyper-exclusion (the haves vs. the have nots). Human subjugation thereby ensues from the iniquitous tension caused by imbalance between expectations and experience. The need for social emancipation therefore, is contained within the logic of development, being the “philosophical foundation of the modern order”. This is especially harmful to non-Western cultures to the extent of enforcing a “hegemonic presentation and mode of knowing that claims universality for itself”.

Remedial schemes would thus extenuate a theory of translation that encourages bottom-up solidarity campaigns by promoting mutual understanding and intelligibility of resistance struggles. By facilitating articulation of exteriorities, multiplicities within modernity can lead to trajectories of multiple states within neo-liberal globalism. This means that anti-oppression measures are by necessity radically non-Western to the extent of gap-closure campaigns that empower both from the top-down and bottom-up by means of active de-Westernisation of power-structures and indeed of the emancipatory process itself. To this end, the relative de-centralisation of resistance movements is theorised within the Gramsci-Polanyi-Scott Triad [14] being elucidative of the forms, agents, sites and strategies of resistance.

Brief Case Study: Canadian-Nicaraguan cooperation in integrating gender awareness into social work curriculum.

In 1987 a development project of the Universidad Centroamericana and the University of Calgary undertook to integrate gender awareness into the social work curriculum of the Nicaraguan school. This was intended to help overcome the legacy of poverty, oppression and violence against women under the brutality of the Samoza National Guard, which fell to the Sandinistas National Liberation Front in 1979. Using funding of the Canadian International Development Agency, a Canadian project team conducted a 3 year collaborative project with the faculty of the Nicaraguan school. This involved two series of workshops: one with the faculty and another with the students and the community. It was found that most participants had high level awareness but lacked the theoretical framework. The workshops were conducted on-site and in the native language of the Nicaraguans. This facilitated “a process of sharing and mutual support… a form of development cooperation that goes beyond the financial relationship and is based on mutual knowledge, a common commitment and solidarity”. Institutional change in the form of “acompaňamiento” which means accompanying the process thus illustrates a method of empowerment appropriate to north-south international development practice. It is a concrete example of international institutional development embracing a de-Westernised framework [15].

In order for social emancipation as part of social capital to materialize as an engine of production, the government is confounded by challenges of managing the demographic transition program [16], of providing social welfare services to improve quality of life indicators (including the eight United Nations Millennium Development Goals for developing countries) [17], and the strategic development of bottom-up cultures that are reflective of the spatio-temporal context of the nation-state. In every case, the specter of institutional development is concerned with harnessing both informal (family based) and formal (societal based) networks in order to build social trust and enhance the efficacy of social networks. The exigency of institutional development is therefore configured by the prevalence of exteriority activity such as the “grey economy”, corruption, terrorism, as well as the general state of civilian social cohesion whereby notions of fatalism [18] and capricious cosmos [19] underline the authenticity of the social contract.

Market Emancipation

Institutions path dependence theory epitomizes the significance of market institutions as fundamental to economic growth and development. The case for market emancipation is the neo-liberal agenda of deterritorialisation and denationalization as the transformation enlarging open international economies. The purposive content of neo-liberal transformation has been explained by Brad de Long as follows.

"The first is that close economic contact between the industrial core [of the capitalist world economy] and the developing periphery is the best way to accelerate the transfer of technology which is the sine qua non for making poor economies rich (hence all barriers to international trade should be eliminated as fast as possible). The second is that governments in general lack the capacity to run large industrial and commercial enterprises. Hence, [except] for core missions of income distribution, public-good infrastructure, administration of justice, and a few others, governments should shrink and privatize." [20]

Similarly other economists have developed a general consensus as to the Six Prescriptions of development for industrializing economies effectively constituted by: (a) promotion of industrial development that will lead to future growth; (b) protecting industries so that they become internationally competitive; (c) prioritizing exports, if trade is to be an important part of strategy; (d) welcoming TNCs but direct them towards exporting; (e) promoting and regulating a domestic financial market; and (f) gradually and sequentially liberalising trade and the financial system [21]. Thus, the process of market emancipation is largely a task of governmental development of market institutions. This infers an open economy macroeconomic stance combined with the redistributive and allocative levers of astute fiscal policy and monetary policy. The progressive globalisation of economic relations ultimately aggrandizes to an interdependent global capitalism.

Governments of developing countries are conscripted to focus on the social emancipatory aspect of social capital development prior to the remedy of market emancipation. This is explained by the complex cycle of poverty [22] and the aggravating cycle of political instability [23] that beset struggling low income countries and that operate to consistently deter foreign direct investment. The profound challenges of realizing a genuine savings rate [24] and the mandatory demographic transition program represent critical economic development thresholds requisite to enable market emancipation and thence greater levels of international trade.

Brief Case Study: The Taiwan Miracle - a ‘Liberalisation Plus’ approach to Economic Development.

As one of the Asian Tigers, the Taiwan Miracle economy is distinctive for achieving high growth rates and rapid industrialization throughout the period 1960-1990. During this time, Taiwan effectively raised itself out of Third World conditions to become a highly industrialized, leading regional economy of Asia. The Taiwan case study expounds the benefits of foreign direct investment combined with institutional developments as the basis of sustained economic growth. In the first part, by the time of the end of a 50 year period of Japanese occupation, the Taiwan economy had achieved expertise in commercial agriculture and similarly a high standard of social order arising from the public works, education and bureaucratic institutions inherited from the Japanese. This state of the economy made the Taiwan project highly amenable to US Aid following WWII. Accordingly, in the second part, western finance erected massive new infrastructures, extensive communications network and improvements to the education system with the support and encouragement of the state as a central economic development agency. A process of technology transfer enabled rapid industrialization of Taiwanese manufacturing centered around Kaohsiung (export processing area) destined for the US. During the period 1953-1986 economic growth averaged 8.7% per annum and GNP grew by over 300%. By the time of the 1980s Taiwan had emerged as a technologically sophisticated regional economic power with comparable quality of life indicators. The final part demonstrates the Model of Global Shifts through the Product Life Cycle [25] whereby mass production of a standardized technology shifted from the core industries of the US to the emerging market of Taiwan whose economy subsequently matured to the point that Taiwan now specialises in manufacturing outsourcing to southeast Asia and China. The Taiwan Miracle is therefore a story of how state capacity combined with institutional market order provided enabling conditions for foreign direct investment and thereby rapid economic growth [26].

A coordinated government market emancipation regime that liberalises trade and the financial system is an essential tenet of institutional development to fit the national economy into the emerging global scheme of international political and economic relations. The growing prospect of deterritorialisation and denationalization engender a new jurisdiction of participation at the global level that enable nation-states to collectively coordinate the rules and regulations of their new regional-global architecture. However this can only proceed in the context of domination by the World Trade Organisation which emerged out of the GATT in 1995. The WTO is a self-proclaimed “revolution” [27] that now exerts conclusive authority according to the rules of trade of its international trade agreements extending to all areas of social, cultural, economic and environmental significance. Presently the key instruments of the WTO include: The GATT; The Agreement on Technical Barriers to Trade; The Agreement on Agriculture; The Agreement on Sanitary Measures and Phyto-Sanitary Measures; The Agreement on Intellectual Property Rights; The Agreement on Investment Measures; The General Agreement on Trade in Services; and The Agreement on Dispute Resolution. The powerful enforcement tools of the WTO require that the institutional market order of nation-states conforms to the edicts of its “economic constitution”.

Urban Capital as an Engine of Circulation

Urban capital as an engine of circulation concerns the localisation-systems and the earth-systems that enable circulation processes of the productive economy. This is associated with the state of infrastructures development, the increasing availability of “permissive” technology that consign the escalation of regionalization, as well as the earth-systems that provide atmosphere and natural resources of both aesthetic and economic value. Two key globalisation themes in the composition of urban capital are the need for greater management of (a) localisation-systems; and (b) earth-systems.

Localisation Systems

The idea of an urban hierarchy at the nation-state level that ultimately connects with and expatiates into a global urban hierarchy stems from the field of regional science in which urbanisation economies (based on social relations) combine with localisation economies (based on industrial relations) to progenerate economies of agglomeration. This is effectively the foundation of neo-liberal mandates toward global deterritorialisation based on socio-political regionalization of nation-state economies. The prevailing regionalisation triad of the European Union, Japan, and the US represents the new global architecture to which the growing trend toward advanced capitalism [28] coordinates by default, the clustering of populations and the clustering of economic activities. This means that the specific theory of localisation economies transfigures from a static transactional theory to a dynamic theory such as to originate trajectories of regionalisation [29]. This regional science model variegates into the geographic trajectory of development [30]. In this way the localisation-systems are grounded by place, yet calibrate and conjoin with other “systems” in quantum suffice to demonstrate a systems theory of localisation based on processes of cumulative causation, namely localisation-systems.

In order for localisation-systems to aggregate into exemplars of neo-liberal globalism, critical nodes in the systemic configuration must conform to the benchmark requirements of international trade. This is a state of strategic place [31] accorded the term Global City where global processes are created, facilitated and enacted. Global Cities are thus exemplary hosts of transnational and multinational corporations characterized by their ability to impact global affairs and the prevalence of highly developed professional services such as advertising, law, banking and finance, and accounting. The current alpha cities include London, New York, Los Angeles, Chicago, Paris, Frankfurt, Tokyo, Singapore and Hong Kong [32]. And it is the combination of the regional triad and the alpha cities of the world that assiduously mediate the commodity chains which perforate the north-south Brant Line [33] to interweave the producer-driven and consumer-driven commodity chains that effectively comprises the Global Supply Chain. This global supply mechanism engineers the new international division of labour. Therefore, in order for a nation-state to fully actualize in the open international economy, a progression of localisation-systems that acquiesces into the global arena is essential.

Brief Case Study: Techno polis’ of Japan.

In 1980 the Ministry of International Trade and Industry announced its plan to develop a techno polis throughout the Japanese Archipelago modeled on Stamford University’s Silicon Valley in the US. MITIs goal was to re-design the economic landscape of Japan. So rather than growing out of universities (the traditional way), the universities would relocate to the techno polis’, and it also provided a framework for decentralization of the production and R&D functions of high technology industries to local areas. Thus by the time of 1994, the techno polis program had evolved to some 24 cities across the Japanese Archipelago. Today the network of industrial park complexes provides both a localised hothouse of innovation as well as external economies of a specialized workforce and business and producer services. Japan’s renewed technological advancement includes industrial capabilities in semiconductor manufacturing, optical fibers, optoelectronics, optical media, facsimile and copy machines, industrial robots, and fermentation processes in food and biochemistry. Therefore by inventive central government coordination, the management of scarce land resources and the strategic distribution of localisation-systems of the techno polis program has enabled Japan to emerge as an Asian economic power and one of the leading alpha cities of the world [34].

A government open-door policy that is coordinated to meet the challenges of essentially asymmetric relations with the larger core-periphery world system is the mandate of neo-liberal globalism. It is both unavoidable and incumbent that nation-states undertake to regionalize and thereby globalize despite the (sometimes inordinately vast) differential of contemporaneousness. The geographic dispersion of alpha cities and beta cities provides the framework of a new geographic path dependency that provides a regional pathway for developing and advanced economies to gainfully participate in international trade by means of dynamic economic growth.

Earth Systems

Pragmatic environmental conservation implicitly presumes the appropriation of earth-systems into economic space of industrial organisation. The concept of earth systems encompasses the science of atmosphere, biosphere, lithosphere (geosphere), and pedosphere as well as the sub-category of ecosystems which includes agro ecosystems, coastal ecosystems, forest ecosystems, freshwater ecosystems, and grassland ecosystems. To this end the United Nations Millennium Eco-system Assessment [35] appertains to the Earth Summit’s Convention on Climate Change and Convention on Biological Diversity by explicating the key drivers of global ecosystems change.

Broadly, the demographic driver imparts the population load given by the level of urban development and identifies population growth projected to impact poorer countries of Africa, South Asia and the Middle East; the economic driver shows that international trade has accelerated improvements to human diet and also that energy and material productivity improve with overall macroeconomic productivity; the socio-political driver has shown a rise in elected governments coinciding with an increasing rate of emancipation of minorities such as local communities, women, and resource-poor households; the cultural and religious driver appropriately explains differences in consumption patterns; and the science and technology driver clearly evinces the way technological development propels GNP growth enabling improved human diets but simultaneously inducing externalities of ecosystem degradation such as eutrophication of freshwater ecosystems and hypoxia in coastal marine ecosystems. The line of logic of these drivers of global ecosystems change is that the interacting forces of population growth and income growth combined with technological advances has been the causal factor in degradation of ecosystems and of climate change.

General manifestations of ecosystems and climate change include: deforestation which is mostly due to commercial wood extraction, permanent cultivation, livestock development and extension of overland transport infrastructures (50% of which occurring in South America); improved marine fishing technology has nearly exploited all fish stock; excessive nutrient loading, especially of nitrogen and phosphorous is rapidly changing territorial, freshwater and marine ecosystems; climate change patterns show a higher mean (+0.6 Celsius) surface temperature, greater incidence of heat waves, the spread of arid areas and an increase in heavy precipitation causing increased incidence of floods and droughts resulting in higher sea level; while biological invasion (often caused by climate change patterns) has been detrimental to biodiversity it has also enabled improved human diet from introduced plants and animals. Hence, current specific examples of crisis places in the earth-system include: water shortages in Punjab, India; soil erosion in Tuva, Russia; fish kills off the coast of North Carolina in the US; landslides on the deforested slopes of Honduras; and fires in the forests of Borneo and Sumatra in Indonesia [36].

Studies by the World Resources Institute Pilot Analysis of Global Ecosystems (PAGE) [37] further highlights the impact of environmental damage with particular reference to: agricultural intensification and food production which must be offset by loss of biodiversity; water quantity which has been vastly improved by engineering works but which is threatened by future water scarcity given the competing interests of agriculture, urban and commercial sectors; water quality risks to human health such as water borne diseases and decline in freshwater biodiversity; the earth’s carbon storage whereby land use change accounts for some 20% of anthropogenic carbon emissions to the atmosphere; and biodiversity issues especially declining biological services such as pollination and nutrient cycling as well as overexploitation and competition from invasive species which deteriorate biodiversity (freshwater ecosystems are most at risk). Tentatively, the PAGE team is now undertaking an earth-systems approach in terms of using new remote sensing techniques to assemble a complete satellite-based global picture of the earth and its ecosystems accentuating sufficient detail required for national planning. This sort of information is useful to assess underlying sustainability of ecosystems, and to determine how this may configure with the broader economic project of neo-liberal globalism. In future it is anticipated that “new” technology may be developed to simultaneously provide market-related as well as environmental benefits.

Clearly then, awareness of the fragility of earth-systems and the impact of global economic activity on earth-systems is firmly on the international agenda. While the challenges of the global environment are being tackled by these peak agencies, local action is also being promoted within the framework of sustainable development which is defined by the Brundtland Report entitled Our Common Future [38], as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. This is closely allied to the biological concept of carrying capacity which is a function of a population’s impact on the ecosystem supporting it such as f(er,pn,rc) where er is the quantity of ecological resources, pn is the size of the population, and rc is the rate of resource consumption [39]. Therefore, sustainable development, while not easily measurable, establishes a purposive economic development benchmark practice that can be approached within the ecosystem context of the nation-state.

Brief Case Study: Watershed in India.

Between 1996 and 2001, the Indian government’s National Bank of For Agriculture and Rural Development in collaboration with the Indo-German Watershed Development Program, pioneered a sustainable development watershed project at the Darewadi Village which covered an area of 1,535 hectares. A participatory village-based model of eco-system rehabilitation was developed in response to the need to reclaim agricultural land in the drought-prone district. This involved villager education sessions to develop trust among the participants, followed by the election of a gram sabha (village assembly of 24 people) whom would be empowered to manage funds and oversee development activities. Next a temporary ban was placed on tree-cutting and grazing land designated for rehabilitation and over the course of 5 years, with the help of volunteer labour, tree and grassland planting and sustainable crop cultivation ensued alongside soil and water conservation measures such as irrigation systems and rainwater harvesting. By the time of 2001, land rehabilitation initiatives resulted in tree and grass plantings with a 65% survival rate, a higher water table, increased land under irrigation (from 197 to 381 hectares), new crops harvested (previously only pearl millet, now extended to include bajra, onion, tomato, wheat, jowar, maize and vegetables), agricultural employment increased from 3-4 months per year to 9-10 months per year, and the agricultural wage rate increased from 20-30 rupees per day to 40-50 rupees per day. The development of new skills and greater social cohesion among the villagers translates into a higher standard of human capital and social welfare. The Darewadi Project thus illuminates the way that an earth-systems regime of sustainable economic development can be factored into urban development programs [40].

In summary, effective governmental management of the earth-systems requires a comprehensive and collaborative effort of the international community which is fundamental to participation at leading international forums such as the UN and the peak environmental agencies. At the nation-state level, consumer awareness campaigns emanating from government environmental policy as well as bottom-up consumer action groups are as essential to sustainable conservation of the earth-system as much as larger measures such as WTO protocols for responsible corporate governance that approaches the earth-systems from a socio-economic sustainable development agenda.

Economic Freedom

Leading economists at The Fraser Institute have systematically studied the consistency of nation-states’ institutional and policy framework in securing economic freedom which is considered to be the cornerstone of personal choice, voluntary exchange, freedom to compete and security of privately owned property [41]. In this sense, economic freedom largely concords with laissez-faire philosophy, proscribing for a minimal level of government. Using statistical data from agencies such as the World Bank, the IMF and The Economist Intelligence Unit, economies are rated according to size of government (expenditures, taxes, and enterprises); legal structure and security of property rights; access to sound money; freedom to trade internationally; and regulation of credit, labour and business. By these criteria, the most advanced nation-states are those that exhibit the highest levels of economic freedom such as Hong Kong, Singapore, the United States, Switzerland and New Zealand where civic freedoms, quality of education and the labour force, efficiency of social and economic infrastructures and health and quality of life measures are most developed.

These conditions impart an exceptional level of institutional market order translating into a peace dividend which is an externality of enhanced global peace to be gained as a by-product of dynamic economic growth. Hence nation-states that enjoy economic freedom embody qualitative neutrality in terms of their ability to finely balance central projects of institutional development and urban planning. The prevalence of organised industrial centers and technology parks linking their major cities to the international economy is compatible with dynamic economic growth coordinated and financed with high levels of both public and private sector involvement. In this way, economic freedom represents the ideal qualitative neutrality of neo-liberal globalism.

The Meshwork Universe of Neo-liberal Globalism