Table of Contents

Economics, Evolution and the State

Economics, Evolution and the State

The Governance of Complexity

Edited by Kurt Dopfer

This book focuses on the emerging field of evolutionary economic policy, highlighting the interface between the state, markets, and the evolutionary complexity of modern economies. The contributors explore the possibilities and limitations of governance, and provide a unique platform for the advancement of modern evolutionary economic theory.

Chapter 13: Applying Evolutionary Economics to Public Policy – The Example of Competitive Federalism in the EU

Wolfgang Kerber

Subjects: economics and finance, evolutionary economics

Extract

Wolfgang Kerber 1. INTRODUCTION One of the major problems of evolutionary economics is its difficult and unclarified relationship to public policy questions.1 Often the problem arises that evolutionary reasonings can be used rather well for a sound critique of a wide range of policy recommendations. But due to the evolutionary argument of the openness of economic processes and the resulting Hayekian knowledge problem it seems often very difficult to derive positive policy proposals from evolutionary reasonings – leading to the danger of a general retreat from policy discussions. In this chapter it is suggested that evolutionary economics should take a pragmatic approach to economic policy questions: 1. Evolutionary economics should be pragmatic in a methodological sense, i.e. that in an ever-changing world economic policy can and has to be made despite the impossibility of eliminating all uncertainties in regard to its effects. Evolutionary economics should not restrict itself to theoretical and basic research but should also do research about the application of evolutionary reasonings to the solving of real-world problems including participation in policy discussions. For applying evolutionary arguments to policy questions we have to find a pragmatic way to combine evolutionary with neoclassical arguments, which to a certain degree will remain indispensable for many real-world problems. 2. 3. Instead of discussing these demands on evolutionary economics on a methodological or theoretical level, I would like to show in regard to a specific, hotly discussed policy question, how evolutionary economics can 296 Applying evolutionary economics to...

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