The Art of Escape: Liquidity Mechanisms

Article published in RCCS 82 (September 2008)The idea of “liquidity” as a characteristic of the present phase of modernity, which features in the most recent work of Zygmunt Bauman, invites comparison with Keynes. In both Bauman and Keynes, liquidity is applied to relationships that are easily revertible (or revertible at low cost) and to systems that are unstable and precarious due to the precariousness of the bonds that unite their constituent elements. In both authors, liquidity and speculation appear as rational responses to uncertainty and, at the same time, as individual strategies that contribute to increased risk at the level of the system. The two approaches are complementary and coherent. This comparative reading suggests the existence of transversal liquidity mechanisms that cut across different institutional domains, as described in this paper

Simulating the prospects of technological catching up

Local increasing returns associated with static and dynamic scale effects, knowledge spillovers, polarisation effects and the distance that separates different regions are among the most important driving forces behind the dynamics of economic and technological convergence. This paper puts forward a computational simulation model that seeks to integrate these factors. The modelling exercise was designed to achieve a better understanding of the relationship between the aspects underlying the specific trajectories of regional technological accumulation and the aggregate convergence/divergence patterns stemming from these trajectories. Analysis of the simulation’s results allows us to draw several conclusions. Firstly, it is shown that the opportunities for interaction and the resulting knowledge spillovers are a necessary but not sufficient condition for convergence. Moreover, up to a certain point, an increase in the opportunities for interaction between regions may lead to further divergence. Secondly, when spatial friction in the interactions is either relatively low or high, regions which could be “losers” for a given initial distribution of technological capabilities may become “winners” for another one (“history matters”). Conversely, for intermediate levels of spatial friction leading to central polarisation, history is largely irrelevant – irrespective of the initial space distribution of technological capability and sequence of chance events, a polarised centre-periphery pattern emerges. Finally, when spatial distance imposes high friction on interactions between regions, and when they do not have to be very similar in their levels of technological capabilities in order to learn from each other, regions in the core of “continental masses” benefit in terms of increased technological capability (“space matters”).

A escolha apesar da (in)comensurabilidade: Controvérsias e tomada de decisão pública acerca do desenvolvimento territorial sustentável

Report of the project BECOM This project is meant to explore decision making devices (namely instruments and procedures) and their role in dealing with conflicts between (incommensurable) values as they arise in the process of public decision-making concerning the sustainability of projects with major impact on environment. With the European Union Directive 2001/42/EC the assessment procedure known as Strategic Environmental Assessment (SEA) became a major instrument for implementing sustainable territorial development policies in the EU. Public decision is thus called to translate into practice the goal of territorial sustainable development - a guiding principle of public action that requires the composition of different and often contrasting definitions concerning desirable common goods to pursue (O'Neill 2007). However, the directive does not contain any indication in respect to the way in which this composition should be achieved, leaving thus room for controversies and varied, context-dependent, arrangements. In the literature concerned with public decision, the necessity to compose normative conflicting stances is addressed differently according to the approach to choice adopted. Two approaches, a monistic approach and a pluralistic approach, may be singled out as end points of a continuum. Both approaches have informed the definition of specific devices (instruments and procedures) to help public decision.The monistic approach to composition relies on commensurability. It has its basis in utilitarianism and its most sophisticated and influential contemporary applied form in cost-benefit analysis (Pearce et al. 2006; Posner 2004). According to this approach the resolution of conflicts of value requires their reduction to a common measure through which different values can be traded off with one another (Espeland and Stevens 1998). On the contrary, the pluralistic approach, supported by different theoretical traditions among which pragmatism stands out, claims that public choice may be rational in spite of value conflicts and incommensurability (Richardson 2002). Integrated and multicriteria approaches are devices of decision that try to operationalize the pluralistic approach to public decision. The project combines two different but interwoven explorations. The first is meant to analyse the translation of the monistic and the pluralistic approaches into "devices of decision" (cost-benefit analysis; integrated and multicriteria approaches). In particular, we aim at investigating how these devices (instruments and procedures) deal, technically, with value incommensurability and "moral difficulty", as well as with the epistemic uncertainty characterizing environmental issues. The second axis is devoted to the observation of how these devices have been enacted in controversies concerning large infrastructural projects, specifically airports, in two cases: the decision on the location of the new Lisbon airport and the decision on the extension of Milan airport. Through a comparative approach (Italy and Portugal) we are interested in addressing the role played by political cultures in the way these devices are implemented (Jasanoff 2007). In treating these tools and models of decision-making as specific socio-technical tools we are rejoining Science and Technology Studies (STS) in one of its recent trends of development: the move from studying how "hard" sciences participate in the shaping of our world in common towards studying, with the same purpose, the role of economics and social sciences (Callon 1998). The aim of the project is not advancing a formal model for decision making in socio-technical controversies involving value conflicts and incommensurability. Our contribution is rather directed towards a better understanding of how devices supporting public decision address issues of incommensurability in situations of normative and epistemic uncertainty. In particular, on the basis of the research results, we will work at pointing out some features of the devices (instruments and procedures) best suited to help transforming incommensurability in an opportunity for democratic debate concerning collective goals and means to pursue them. The theoretical and empirical exploration we propose is meant to develop a critical analysis of both the relevance of devices of decision in shaping public decision processes in socio-technical controversies and the pros and cons of the specific way in which they help in dealing with normative and epistemic uncertainty.Relatorio do projeto BECOM Este projecto pretende explorar dispositivos (instrumentos e procedimentos) de tomada de decisão e o papel que desempenham no modo como os conflitos entre valores (incomensuráveis) são geridos nos processos de tomada de decisão pública a respeito da sustentabilidade de projectos com impactos importantes no ambiente. Com a Directiva da União Europeia 2001/42/EC o procedimento de avaliação conhecido como Avaliação Ambiental Estratégica (AAE) tornou-se um importante instrumento das políticas de desenvolvimento territorial sustentável na UE. Com esta directiva os decisores públicos são chamados a traduzir na prática o objectivo de desenvolvimento territorial sustentável - um princípio orientador da acção pública que requer a composição de definições diversas e muitas vezes contrastantes dos bens comuns que é desejável perseguir (O'Neil 2007). Contudo, a directiva não contem nenhuma indicação a respeito do modo como esta composição deve ser conseguida, deixando espaço para controvérsias e arranjos variados, dependentes do contexto. Na bibliografia respeitante à tomada de decisão pública, a necessidade de compor dimensões conflituais do ponto de vista normativo é tratada de forma distinta consoante a abordagem à escolha adoptada. É possível identificar, como extremos de um continuum , duas abordagens: a abordagem monistica e abordagem pluralista. Ambas constituem fundamento para a definição de dispositivos (instrumentos e procedimentos) de apoio à tomada de decisão. A abordagem monista assenta na comensurabilidade. Com origem no utilitarismo e a sua forma contemporânea aplicada mais sofisticada e influente é a análise custo-benefício (OECD 2006; Posner 2004). De acordo com esta abordagem a resolução de conflitos de valor requer a redução de todos os valores a uma métrica comum que possibilite trade-offs entre eles (Espeland and Stevens 1998). A abordagem pluralista, apoiada em diferentes tradições teóricas, entre as quais se destaca o pragmatismo, defende, pelo contrário, que a escolha pública pode ser racional apesar dos conflitos de valores e da incomensurabilidade (Richardson 2002). As abordagens multicritértio e integradas são dispositivos de tomada de decisão que procuram operacionalizar a abordagem pluralista de tomada de decisão. Este projecto combina duas linhas de exploração diferentes mas inter-relacionadas. A primeira é dirigida à análise da tradução das abordagens monista e pluralista em "dispositivos de decisão" (análise custo-benefício; abordagens multicritério e integradas). Em particular, pretendemos investigar o modo como estes dispositivos (instrumentos e procedimentos) lidam com a incomensurabilidade e a "dificuldade moral", assim como com a incerteza epistémica que caracteriza as questões ambientais. O segundo eixo é dedicado à observação do modo como estes dispositivos têm sido operacionalizados em controvérsias respeitantes a grandes projectos infra-estruturais, especificamente aeroportos, em dois casos: a decisão acerca da localização do novo aeroporto de Lisboa e a decisão acerca do alargamento do aeroporto de Milão. Através de uma abordagem comparativa (Itália e Portugal) o nosso interesse dirige-se também à influência que as culturas políticas têm no modo como estes dispositivos são usados na prática (Jasanoff 2007). Tratando estas ferramentas e modelos de tomada de decisão como ferramentas sócio-técnicas especificas seguimos os Estudos de Ciência e Tecnologia numa das suas recentes tendências de desenvolvimento: a deslocação do estudo acerca do modo com as ciências "duras" participam na definição do nosso mundo comum para o estudo, feito com o mesmo objectivo, do papel da economia e das ciências sociais (Callon 1998). O objectivo do projecto não é propor um modelo formal de tomada de decisão em controvérsias sócio-tecnicas que envolvem conflitos de valor e incomensurabilidade. A nossa contribuição será antes dirigida a uma melhor compreensão do modo como os dispositivos de apoio à tomada de decisão lidam com a questão da incomensurabilidade em situações de incerteza normativa e epistémica. Procuraremos, em particular, com base nos resultados da pesquisa, assinalar algumas características dos dispositivos (instrumentos e procedimentos) que melhor contribuem para transformar a incomensurabilidade numa oportunidade para o debate democrático a respeito dos objectivos comuns e dos meios para os realizar. A exploração teórica e empírica que propomos pretende desenvolver uma análise crítica quer da influência dos dispositivos de tomada de decisão sobre os processos de tomada de decisão pública em controvérsias sócio-técnicas, quer das vantagens e inconvenientes dos modos específicos como eles ajudam a lidar com a incerteza normativa e epistémica

The Art of Escape: Liquidity Mechanisms

The idea of “liquidity” as a characteristic of the present phase of modernity, which features in the most recent work of Zygmunt Bauman, invites comparison with Keynes. In both Bauman and Keynes, liquidity is applied to relationships that are easily revertible (or revertible at low cost) and to systems that are unstable and precarious due to the precariousness of the bonds that unite their constituent elements. In both authors, liquidity and speculation appear as rational responses to uncertainty and, at the same time, as individual strategies that contribute to increased risk at the level of the system. The two approaches are complementary and coherent. This comparative reading suggests the existence of transversal liquidity mechanisms that cut across different institutional domains, as described in this paper

A arte da fuga: Os mecanismos da liquidez

A ideia de “liquidez” enquanto característica da fase actual da modernidade, presente na obra mais recente de Zygmunt Bauman, convida a uma leitura cruzada entre este autor e Keynes. Quer em Bauman, quer em Keynes, a liquidez aplica-se a relações que podem ser facilmente revertidas, ou revertidas a baixo custo, e a sistemas que, sendo caracterizados pela precariedade dos laços que unem os seus elementos constituintes, tendem a ser, eles próprios, instáveis e precários. Em ambos os autores, a liquidez e a especulação surgem como respostas racionais à incerteza e, ao mesmo tempo, como estratégias individuais que contribuem para o aumento do risco sistémico. As duas abordagens são complementares e coerentes. A leitura cruzada sugere a existência de mecanismos da liquidez transversais a diferentes domínios institucionais cuja identificação é aqui ensaiada.The idea of ‘liquidity’ as a feature of the ongoing phase of modernity, to be found in the most recent work of Zygmunt Bauman, invites a cross-reading of this author and Keynes. Both in Bauman and in Keynes, liquidity is linked to relations which can easily be reverted, or reverted at a low cost, and to systems which, characterised by the precariousness of bonds linking its constituting elements, tend, themselves, to be unstable and precarious. In both authors, liquidity and speculation appear as rational responses to uncertainty, and, at the same time, as individual strategies contributing to increased systemic risk. Both approaches are complementary and consistent. Cross-reading suggests the existence of liquidity mechanisms which are transversal to different institutional domains, identification of which is here essayed.L’idée de «liquidité» en tant que caractéristique de la phase actuelle de la modernité, présente dans l’ouvre la plus récente de Zygmunt Bauman, suscite une lecture croisée entre cet auteur et Keynes. Soit chez Bauman, soit chez Keynes, la liquidité s’applique à des relations qui peuvent être facilement réversibles, ou réversibles à bas prix, et à des systèmes qui, étant caractérisés par la précarité des liens unissant leurs éléments constitutifs, tendent à être, eux-mêmes, instables et précaires. Chez les deux auteurs, la liquidité et la spéculation surgissent comme réponses rationnelles à l’incertitude et, en même temps, comme stratégies individuelles qui contribuent à l’augmentation du risque systémique. Les deux approches sont complémentaires et cohérentes. Leur lecture croisée suggère l’existence de mécanismes de liquidité transversaux dans les différents domaines institutionnels dont l’identification est essayée dans cet article

Simulating the prospects of technological catching up

Local increasing returns associated with static and dynamic scale effects, knowledge spillovers, polarisation effects and the distance that separates different regions are among the most important driving forces behind the dynamics of economic and technological convergence. This paper puts forward a computational simulation model that seeks to integrate these factors. The modelling exercise was designed to achieve a better understanding of the relationship between the aspects underlying the specific trajectories of regional technological accumulation and the aggregate convergence/divergence patterns stemming from these trajectories. Analysis of the simulation's results allows us to draw several conclusions. Firstly, it is shown that the opportunities for interaction and the resulting knowledge spillovers are a necessary but not sufficient condition for convergence. Moreover, up to a certain point, an increase in the opportunities for interaction between regions may lead to further divergence. Secondly, when spatial friction in the interactions is either relatively low or high, regions which could be "losers" for a given initial distribution of technological capabilities may become "winners" for another one ("history matters"). Conversely, for intermediate levels of spatial friction leading to central polarisation, history is largely irrelevant - irrespective of the initial space distribution of technological capability and sequence of chance events, a polarised centre-periphery pattern emerges. Finally, when spatial distance imposes high friction on interactions between regions, and when they do not have to be very similar in their levels of technological capabilities in order to learn from each other, regions in the core of "continental masses" benefit in terms of increased technological capability ("space matters")