The Role of Informal Institutions for Institutional Co-evolutionThe Case of the Wind Energy Industry in Germany and Britain

Camilla M. Chlebna MSc#12112222, Department of Planning

Supervisors:Prof. James SimmieDr. Dave VallerSellafield Nuclear Power Station, Cumbria, NW-England, UK

• Introduction• Theory Background

• Key Themes• Cases and Methodology

• Analysis• Framework• Findings

• Conclusions

PRESENTATION STRUCTURE

Influenced by economic geography as well as evolutionary, political and institutional economics

• Economy = open system with emergent properties(Sayer, 2000; Boschma & Frenken, 2007; Martin & Sunley, 2015)

• Co-evolution of formal institutional arrangements and technology(Polanyi, 1957; Perez, 1983; North, 1996; Nelson, 1998; Strambach, 2010)

• Consideration of individuals and society beyond the firm(Garud et al., 2007; Jackson, 2010; Bristow & Healy, 2014; Hassink et al., 2014)

Informal institutions shape individuals’ behaviour and are thus pervasive on all levels of society -> need explicit consideration

THEORY BACKGROUND

CASES & METHODOLOGY

Main Fieldwork36 semi-structured expert interviews in 2015

• 4 pilot interviews with academics• 32 interviews in main fieldwork

• 18 German, 18 British• 26 face to face, 10 phone

Used both as signposts and as immediate evidence+ descriptive, secondary data drawn in to ‘thicken the plot’

Fieldwork Research QuestionsWho tried to shape formal institutions over the years?

What motivated them?Were they successful?

Why? Why not?What are the interactions with and between institutions?

GER

MA

NY

BR

ITA

IN

(Global Wind Energy Council, 2015)

ANALYSIS

employers

Form

al in

stitu

tions

Org

anis

atio

nal f

orm

s of

in

stitu

tions

Info

rmal

inst

itutio

ns

Policy makers

Civil society agents

employers

Policy makers

Civil society agents

impact

impact

impactIndirect power

Indirect power

Power to change

Ongoing dynamic of re(production)

pressure

pressure

???

???

Con

text

???

???

FINDINGS

What motivated inventors and investors? Profit vs ideology

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

2

4

6

8

10

12

Wind power related applications as share of total applications [1978 – 2012, per mill]

GER GermanyGB Great Britain

“The governments have deliberately promoted and supported innovation through [tax. A]s an inventor I only have to pay 10% capital gains tax, rather than 40% when I sell my shares. That’s a fantastic incentive.” (interviewee B2)

(OECD, 2013)

“And this creates momentum. I know a lot of people, who, with this attitude [against nuclear power] invested in wind power, independent of whether they are going to become rich or not.” (interviewee G15)

BR

ITA

IN

GE

RM

AN

Y

FINDINGS

“I guess there is something within German society, a deep desire to manage without nuclear energy. Because this is apparent in all these surveys that three quarters of Germans oppose nuclear energy. This has been like that for a long, long time when there weren’t even such strong alternatives.” (interviewee G2)

approve strongly

approve somewhat

disapprove somewhat

disapprove strongly

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Approval: The anti-nuclear movement [1990]

Germany

Great Britain

Elitism

Attitud

es to

wards

RE-A

gains

t RE

Energ

y Sec

urity

Energ

y Affo

rdab

ility

Care f

or th

e env

ironm

ent-V

isual

attrib

utes

Attitud

es to

wards

RE-F

or R

E

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Other informal institutions most associated with 'positive attitude towards nuclear power' [per-

centage coverage]

“Most of our politicians come from Oxbridge […] and most of the chairmen of our big organisations and our financial institutions are of the same class of people.” (interviewee B3)

(EVS, 2015)

BR

ITA

INGE

RM

AN

Y

= Varied SME dominated industry in Germany vs

industry dominated by large, often foreign ruled companies in Britain

CONCLUSIONS

Germany

Rejection of nuclear power influenced behaviour across society leading to institutional co-evolution

• Motivated inventors and (independent) investors

• Drove citizens to put pressure on policymakers

• Triggered politicians to implement change (i.e. become institutional entrepreneurs)

• Consumer pressure but also change in management led to changes of business strategies

Britain

No comparable strength of sentiment, instead elitism and neoliberal ideology hindered institutional co-evolution

• Inventors/entrepreneurs focused on profit or lacking independent funding

• Citizens at best ambiguous at worst campaigning against wind energy

• No ‘champions’ for this industry amongst policymakers

• Lack of new entrants to challenge incumbents

THANK YOU FOR LISTENING

Camilla M. Chlebna MSc12112222@brookes.ac.uk

Please do not hesitate to contact me with any suggestions or feedback that you can offer.

International Student Initiative for Pluralism in Economics: http://www.isipe.net/

Fieldwork supported by

Slide 1Atomkraft Nein Danke!: Schoolmann S. http://www.nordland-virus.de/wordpress/?p=94. Hamburg, Germany. Accessed on 23rd February 2016. Nuclear Power Station, Sellafield, Cumbria, UK: http://www.thetimes.co.uk/tto/business/industries/utilities/article3247657.ece The Times Online, London, UK. Accessed on 19th May 2016.Slide 3Boschma RA and Frenken K (2007) Introduction: Applications of Evolutionary Economic Geography. In: K. Frenken ed. Applied evolutionary economics and economic geography. Cheltenham, UK: Edward Elgar. 326.Bristow G and Healy A (2014) Regional Resilience: An Agency Perspective. Regional Studies. 48 (5), 923–935.Garud R, Hardy C and Maguire S (2007) Institutional Entrepreneurship as Embedded Agency : An Introduction to the Special Issue. Organization Studies. 28 (7), 957–969.Hassink R, Klaerding C and Marques P (2014) Advancing Evolutionary Economic Geography by Engaged Pluralism. Regional Studies. 48 (7), 1295–1307.Jackson G (2010) Actors and institutions. In: G. Morgan, J. L. Campbell, C. Crouch, O. K. Pederson, & R. Whitley eds. The Oxford Handbook of Comparative Institutional Analysis. Oxford, UK: Oxford University Press. 63–86.Martin R and Sunley P (2015) Towards a Developmental Turn in Evolutionary Economic Geography? Regional Studies. 49 (5), 712–732.Nelson RR (1998) The Co-evolution of Technology, Industrial Structure, and Supporting Institutions. In: G. Dosi, D. Teece, & J. Chytry eds. Technology, Organisation and Competitiveness - Perspectives on Industrial and Corporate Change. Oxford, UK: Oxford University Press. 319–335.

BIBLIOGRAPHY & SOURCES I

Slide 3 continuedNorth DC (1996) Institutions, Institutional Change and Economic Performance. Cambridge, UK: Cambridge University PressPerez C (1983) Structural Change and Assimilation of New Technologies in the Economic and Social Systems. Futures. 15 (5), 357–375.Polanyi K, Arensberg CM and Pearson HW eds. (1957) Trade and Market in the Early Empires - Economies in History and Theory. Glencoe, IL, USA: The Free Press & The Falcon’s Wing Press.Sayer A (2000) Realism and Social Science. London, UK: SAGE Publications LtdStrambach S (2010) Path dependence and path plasticity: the co-evolution of institutions and innovation - the German customized business software industry. In: R. Boschma & R. Martin eds. The Handbook of Evolutionary Economic Geography. Cheltenham, UK: Edward Elgar. 406–429.Slide 4Global Wind Energy Council (2015) Global Wind Report - Annual Market Update. Brussels, BELSlide 6eurostat (2016) Foreign ownership of domestic inventions in patent applications to the EPO by priority year. Available at: http://ec.europa.eu/eurostat/web/products-datasets/-/pat_ep_nfgn.OECD (2013) REGPAT database, July. Available at: www.oecd.org/sti/ipr-statistics.Slide 7EVS (2015) European Values Study Longitudinal Data File 1981-2008 (EVS 1981-2008). ZA4804 Data file Version 3.0.0. Available at: https://dbk.gesis.org/dbksearch/sdesc2.asp?no=4804&db=e&doi=10.4232/1.12253.Slide 9Rethinking Economics Conference, London, 2015, author’s photo

BIBLIOGRAPHY & SOURCES II