Publication Date
2026
Description
This paper examines the relationship between economic development and environmental sustainability from Institutionalist and Post Keynesian perspectives. It contrasts these approaches with neoclassical resource and environmental economics, which frames ecological problems in terms of scarcity, intertemporal optimization, externalities, and market imperfections. The paper argues instead that environmental degradation and climate change are not merely deviations from efficient market outcomes, but social costs generated by the normal operation of capitalist economies. Institutionalist economics, especially the work of K. William Kapp, provides a framework for understanding these costs as embedded in production, institutions, and power relations, while Post Keynesian economics contributes an analysis centered on effective demand, endogenous money, distributional conflict, and demand-led growth. The paper also discusses ecological economics, radical environmentalism, Green Marxism, and degrowth, emphasizing their affinities and tensions with heterodox political economy. It argues that while degrowth raises important critiques of consumerism and ecological limits, it is problematic as a generalized development strategy for peripheral economies. In Latin America and the Caribbean, external constraints, commodity dependence, and financialization require a strategy based on green public investment, structural transformation, redistribution, regulation, and the relaxation of balance-of-payments constraints.
Type
Working Paper(unpublished)
Department
Economics
Language
eng