No abstract

The "circular economy" package put forward by the European Commission in 2015 is an ambitious plan in the area of environmental protection. The aim of this legal framework is to replace what is nowadays referred to as the "linear economy", in which people consume and throw away, with an economic system which supposedly reuses all its available resources. In spite of its probably good intentions, the circular economy package contains at least one directive which under current economic conditions is practically inapplicable in countries such as Romania. The packaging waste directive, which we speak of, focuses on raising mandatory recycling rates above the current levels. Past experience has shown that the present recycling system in Romania was unable to fulfil even the exiting, more modest targets. The lack of a necessary infrastructure in waste management and collection, combined with poor legislative measures made fulfilling individual environmental obligations a real challenge for producers of packaged goods. All the more, the recycling targets increase, without being correlated with the other conditions required for their completion, would place an undue burden on producers, that would also trigger a significant rise in consumer prices, especially in the area of foodstuff products.

The European Union (EU) remains one of the leading-edge jurisdictions on the planet in legislating and enforcing the circular economy, a token of its forthright environmental awareness. Still, given that the level of economic development across the EU member states is heterogenous, this concern, however generous it may be, looks too beyond “their” means and too ahead of “its” times. What the European policymakers seem to disregard is that top-down institutional constructions, as is the case with the EU’s overambitious environmental legislation, can end up in severe distortions. Imposing/importing an institutionalized arrangement without due preparation may fuel resistance to (even positive) change, as the biases it engenders translate into considerable costs and selective benefits. The present article attempts a novel approach within the literature, where the failure to achieve recycling targets is usually considered the fault of private businesses. Instead, our study explains suboptimal environmental results by the institutionalization of spiraling governmental interventions in markets, meant to make the arbitrarily set recycling/reuse targets artificially viable. Subject to EU rules, Romania’s packaging waste recycling market is a textbook case in revealing this outcome predicted by economic theory, as our statistical data suggest. The conclusion is that it is equally perilous to neglect the calibration of legislative targets according to institutional and economic development as it is to reject environmental claims based on their costs.

No abstract

Economic concepts are not mere ivory tower abstractions disconnected from reality. To a certain extent they can help interdisciplinary endeavours at explaining various non-economic realities (the family, education, charity, civilization, etc.). Following the insights of Hoppe (2001), we argue that the economic concept of social time preference can provide insightswhen interpreted in the proper context-into the degree of civilization of a nation/region/city/group of people. More specifically, growth and prosperity backed by the proper institutional context lead, ceteris paribus, to a diminishing of the social rate of time preference, and therefore to more future-oriented behaviours compatible with a more ambitious, capital intensive structure of production, and with the accumulation of sustainable cultural patterns; on the other hand, improper institutional arrangements which hamper growth and prosperity lead to an increase in the social rate of time preference, to more present-oriented behaviours and, ultimately, to the erosion of culture.