Confronting Environmental Issues
Edited by Richard P.F. Holt, Steven Pressman and Clive L. Spash
Chapter 13: The Sustainable Economic Development of Traditional Peoples
James Kahn and Alexandre Rivas INTRODUCTION There have been many models of economic growth advanced through the years, all of which put some degree of emphasis on investment and the development of capital stocks. However, in addition to the degree of emphasis on investment, an important distinction between Post Keynesian and neoclassical models is that neoclassical models assume path-independence and Post Keynesian models assert path-dependence. One potential contribution of ecological economics and discussions of sustainable development to the Post Keynesian perspective is that the consideration of environmental capital and the potential of irreversible destruction of environmental capital during the growth process lend strong support to the idea that growth is path-dependent. Neither the lack of policy prescriptions of the neoclassical model nor the conventional policy prescriptions of Post Keynesian models will assure the proper preservation of environmental capital. The problem of choosing a growth path becomes even more severe when considering growth of the informal sector, particularly among traditional peoples. The protection of environmental capital and the development of appropriate social capital through policy interventions are critically important. This question of the appropriateness of capital becomes even more pressing when dealing with traditional populations in rural areas. If capital accumulates according to market forces, the capital will concentrate in industrial centers and not in the rural communities. Unfortunately, traditional Post Keynesian models do not pay much attention to the distributional aspects of growth policy, particularly to the regions populated by traditional peoples. Under either type of policy, the only options...
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