Public Goods, Civil Society and Sustainability

Abstract

This paper proposes a “public goods” approach to the development of “civil society” as a foundation for building a sustainable environment. Economists define “public goods” as goods that cannot be delivered through traditional marketplace mechanisms, such as fire protection and education. Civil Society organizations also can be viewed as public goods. A central feature of sustainable liberal democracies is the existence of intermediary civil society collective organizations. These organizational units are supported by macro-level governmental institutions under the rationale of providing citizens benefits that cannot be provided by the market or directly by the state. This approach provides an alternative to zero-sum conflicts and leads to compromise solutions that will gain taxpayer support. Research findings from a variety of places provide historical illustrations of the effectiveness of a public goods approach include: (1) the U. S. TVA organizational design during the New Deal and the contemporary cross-party appeal of criminal justice reform; (2) the formation of the European Coal and Steel Community - the forerunner of the European Union – which provides one-third of its budget for local-level sustainability projects; and (3) the successful vertical integration of smallholder cooperatives in East Africa that encourages sustainable family, community, and national development.

1. Introduction

Civil society organizations typically are defined as not being identified with government or the for-profit business sector. This would include, unions, voluntary associations, churches, agricultural cooperatives, and a variety of other organizations that receive a special “exempt” status within the tax code of liberal democratic nations [1]. An important effect of strong civil society organizations is that they enhance a nation’s ability to respond to exigencies, both internal and external.

The weakness of intermediary civil society organizations in Italy and Germany in the 1920s and 1930s facilitated the emergence of fascism. The evidence shows that individuals who were not attached to civil society organizations, like unions, were more vulnerable to appeals from authoritarian leaders like Hitler and Mussolini [2]. The absence of competing sources of information from civil society organizations was a major cause of the failure of the Soviet government to respond to technological change and the internationalization of supply chains in the 1980s and 1990s [3].

The decline in American membership in voluntary associations is linked with the appeal of “populist” authoritarian movements [4]. Research has found, for example, that individuals living in rural places have highly dense and kin dominated social networks that do not provide them with the kinds of support needed to adapt to social change. This contrasts with their counterparts in metropolitan areas who have more diverse social networks that gives them better access to resources to deal with life’s changing exigencies [5].

The critical question, then, is what can increase the growth of civil society organizations? The focus of this chapter is on the role of national-level political institutions in achieving this objective. Theda Skocpol points out that federal policies in the United States were instrumental in the development of civil society organizations, such as the Grange and the American Farm Bureau ([6], p. 3). Federal legislation, the Wagner Act, led to the protection of the right of workers to vote for independent union representation ([7], pp. 66–97).

The creation of the European Coal and Steel Community (ECSC), the forerunner of the European Union (EU) included a de facto recognition of the pre-WWI situation in which each of the nations engaged in the conflict contained a mix of competing ethnic, religious and language groups without any mediating mechanisms to resolve conflicts between them ([8]: (1)). It focused on creating a supra-national governmental structure with material incentives for nations and sub-groups within them to participate. As the European Union has evolved considerable attention has been given to ameliorating sub-national conflicts by focusing on regional development through its “cohesion policy”; a direct effort to build local-level civil society, which now accounts for one-third of the total EU budget [9, 10]. (My Italics).

2. The concept of public goods

The role of government in the formation and maintenance of civil society organizations highlights the importance of a “public goods.” Economists define Public Goods as goods that cannot be delivered through traditional marketplace mechanisms [7, 11].

Historically, successful definitions of something as a public good has involved considerable debate in the public arena. In the U. S., for example, fire protection through publicly funded fire departments was not achieved until the 19 Century [12]. Similarly, the idea that public education would benefit everyone was only achieved when voters were convinced that it was necessary to support a national economy from which everyone would benefit [13].

2.1 Defining public goods to support civil society

The most compelling argument to provide public resources to support the enhancement of civil society is that in the long run it saves money for taxpayers. There is evidence that disorganized local communities and neighborhoods become a spawning ground for high levels of personal despair, which is reflected in high rates of suicide and opiate addiction that increases costs for public health agencies and criminal justice administration [14, 15, 16, 17, 18]. Earlier studies by William Julius Wilson [19] described how neighborhood disorganization was as important as family dysfunction in generating persons who become tax burdens. The panel experiment analyzed by Chetty et al. [20] found that children under the age of 13 in the experimental group who moved to a more affluent neighborhoods performed much better than their peers in the control group who remained in the poor neighborhood.

More affluent neighborhoods typically contain families that are involved in various kinds of civil organizations and churches that provide various kinds of individual and family support.

Most important, taking the “public goods” approach avoids the oftentimes contentious arguments for building up poor neighborhoods that are based on a desire for “equity” [21]. Equity undoubtedly is appealing to many of us, but as we have seen in the recent adoption of criminal justice reform by conservatives, appealing to self-interest, in that case the money saved by reducing prison populations, can be more persuasive. Trautman [22] describes how Texas conservatives abandoned their “lock ‘em up” policy and passed criminal justice reforming, resulting in the closing of many prisons and saving Texas taxpayers billions of dollars.

The success of criminal justice reform is, in Tocqueville’s words, a recognition of “self-interest rightly understood” ([23], pp. 610–613). One immediate implication, suggested by the “Moving to Opportunity Experiment” [20] is to fund projects that disperse poorer populations into more affluent neighborhoods where their children would have the benefit of the higher civil society development within them.

3. An outline of a plan to build civil society as a public goods program

The first step in building a program to enhance the growth of civil society is to understand the source of the anger found among those to whom populist messages are appealing. The anger that provides the fertile soil for populist demagoguery in declining communities is not the loss of economic viability per se, but how this loss is interpreted by their residents. The crucial connection here is the perception by those who live in these places that the primary cause of their discomfort and sense of existential loss is caused by elite outsiders from the city who do not understand them [4]. At root this sense of loss is what Arendt [24], Armstrong [25], Frankl [26] and Fromm [27] describe as longing for a “connectedness.” Successful demagogues, such as Adolf Hitler, recognized this yearning for a spiritual connection to a lost community and built their mass movements on a “quasi-religious” appeal in which the leader occupies the role of prophet Burleigh [28]. Thus, a critical need is to somehow find positive ways in which an individual’s connection to the local community can be reinforced by participation in activities that enhance both the individual’s and the community’s willingness to look at new ways of adapting to the challenges posed by increasing globalization. Specifically, this requires linking community-level institutions and organizations to macro-level institutions and organizations that can provide the resources to achieve that goal.

The US New Deal TVA “cooptation” strategy created an institutional structure for involvement of local Tennessee Valley residents in decision-making on a massive federal dam project. This Depression era structure has allowed the TVA to adapt its programing to engage local citizens in new challenges today, such as climate change [29, 30].

The European Union is relevant because the primary goal for establishing its forerunner was to create mechanisms that would reduce the underlying causes of inter-communal conflict, within and between nations, that had created the conditions for the two world wars which had devastated so much of the European continent. The EUs “Cohesion Programs,” includes a money for research to more precisely understand how its programs might better fit with local social organization and cultures [31, 32].

A similar paradigmatic shift has occurred in approaches to overseas development programs supported by European and North American aid organizations. After witnessing failures of programs that focused exclusively on transferring technology and expertise in the immediate post-World War II period, donor organizations, including the World Bank, learned that the first step in developing effective programs is to identify, through on-the-ground research, the specific incentive and social network structures that are embedded within local cultures that are a source of community support and/or resistance to change [33, 34].

The motivations for creating what until then were unique organizational designs for civil society development in the examples just cited were based on a larger political entity facing a very real crisis of survival; the Great Depression in the United States, the devastation of post-World War II Western Europe and the Rwandan genocide. Oftentimes the twenty first century challenges facing communities do not have the immediacy of total economic collapse or the human suffering experienced in international conflicts or intra-national genocide. Nonetheless, the rapidity of change generated by technological innovation, climate change and mass migrations of populations from one place to another, generate massive costs to the sustainability of large numbers of local communities, which, in turn, results in both immediate- and long-term suffering for their residents as well as for the larger political entities in which they are a part.

Unfortunately, especially in the United States, substantive discussions about the underlying structural causes of community decline have been drowned out by the so-called “culture wars” on abortion, sexual orientation and so-called “identity politics.” It is important to point out that this obstacle to serious policy discussions of negotiated incremental reforms to address these issues has been promoted by the increasingly ascendant extreme left and right. Thus, there is undoubtedly some validity to the claims of those in the “left behind” rural communities that liberal metropolitan “elites” do not listen to them. This is reinforced by elite college campuses where speakers with alternative views are sometimes not allowed to speak [35]. Understanding how local community residents perceive the world especially how it is embedded in their earlier historical experiences, helps to account for their resistance to something that would obviously benefit them. A recent research study explains why a substantial portion of African American Detroit neighborhood residents resisted an offer by an environmental group to provide them with free trees:

The residents Carmichael [the researcher] surveyed understood the benefits of having trees in urban environments—they provide shade and cooling, absorb air pollution, especially from traffic, increase property values and improve health outcomes. But the reasons Detroit folks were submitting ‘no tree requests’ were rooted in how they have historically interpreted their lived experiences in the city, or what Carmichael calls “heritage narratives.” …. It’s not that they did not trust the trees; they did not trust the city…. A couple of the African American women Carmichael talked to, linked the tree-planting program to a painful racist moment in Detroit’s history, right after the 1967 race rebellion, when the city suddenly began cutting down elm trees in bulk in their neighborhoods. The city did this, as the women understood it, so that law enforcement and intelligence agents could better surveil their neighborhoods from helicopters and other high places after the urban uprising [36].

3.1 Revising the tax code to provide more resources for building community-level civil society

In the U. S. most of the discussion about economic inequality and proposals for remedying it quite rightly focuses on the need to adjust the tax code to bring more relief to especially disadvantaged households. Less attention, however, has been given to tax code reforms that would be specifically “place-based” and thus play a critical role in ameliorating the decline of communities that do not provide economic or social support for their citizens. In the U. S. this includes both declining cities, like Steubenville, Ohio [37] and “left behind” rural towns [4].

Collier [38] presents an outline of how a more place-based shift in the tax code could provide the material resources to assist declining places to become more sustainable, both socially and economically, while, at the same time, facilitate the adaptation of the societies in which they are located to adapt to the increasing globalization demands for higher levels of skills from its citizens. He argues that rather than focus solely on assisting individuals, it would be more efficient to support through tax revenue “clusters” of social support – i.e., social systems of social, emotional, health and mental health support for at risk families and children, as well as a concentration of material and human capital resources – i.e., physical infrastructure, especially communication technology, and incentives to attract highly skilled workers - for a twenty first century economy in struggling communities. This would mirror to some degree the agglomeration benefits that accrue to large metropolitan areas. Collier focuses on declining urban regions, but the tax revenue funded “cluster” principle he describes is applicable to rural places as well.

3.2 Expanding the role of cooperatives and unions in community development

There are two ways in which the cooperative organizational form holds promise for dealing with the local-level community challenges in the twenty first century. First, cooperatives have been able, over time, to adjust the services they provide to deal with a changing set of issues that local communities face. This is especially true with respect to their expanded influence in supporting infrastructure development in low population density rural communities. Today, for example, Electric Cooperatives are playing a major role in efforts to expand broadband service into rural areas [39, 40]. The U. S. Department of Agriculture’s Community Development Programs, through the Cooperative Extension Service, offers assistance to local communities for a variety of services [41], including those to assist in mental health [42]. The Dairy Farmers of America Cooperative recently announced the introduction of a new service to provide 24/7 access to mental health services to their members [43].

Second, since cooperatives are, by definition, self-governed by their members, they play a critical role in promoting the values and skills that build civil society. This, in turn, provides an anti-dote to the feelings of powerlessness that plague disconnected individuals in a mass society, thereby reducing the appeal of populist authoritarian demagogues. This function, which Tocqueville [23] saw in American small town voluntary associations in the 1830s was recognized in the post-genocide Rwandan government’s decision to make cooperative development a central part of its economic development programs [44].

Expansion of cooperatives, with the support of enabling legislation from state and national governments, can provide substantial support to many struggling communities. One of the most important developments in this respect has been the work of USDA Extension in supporting increased linkages between rural food producers and communities through the Community Supported Agriculture (CSAs) program. This is especially helpful to small-scale fruit, vegetable, and meat producers, both in building sustainable collective linkages among themselves, markets, and consumers, as well as dealing with legislatures when decisions are made about licensing and other matters that affect their businesses [45, 46].

The cooperative organizational model also can be applied in ways that will expand the effectiveness of “upstream” interventions to promote health and mental health care in struggling communities, especially those with increasing rates of suicide, addiction, and preventable deaths from lack of early intervention. Researchers have found, for example, that important contributors to increasing health costs in rural communities is the lack of coordination between entities that deal with housing, access to healthy food and identification of vulnerable persons with symptoms indicating early stages of health or mental health problems. The increased interest in engaging local communities, especially in preventive public health programs has resulted in an upsurge of research on how best to understand local social networks and culture to implement programs that not only improve community health but also reduce costs to taxpayers [47, 48, 49].

Another collective organizational model that can be adapted to contribute to community sustainability in the twenty first century is the union. The conceptualization of the union during the post-World War II industrial boom years in the United States is articulated by John Kenneth Galbraith’s [50], American Capitalism: The Concept of Countervailing Power, which was originally published in 1953 during the height of the post-World War II economic boom. His view was that the growth in size of mass production industries was matched by the growth in size of industrial unions, which, in turn, would bring overall benefits to workers, management and the public at large. This paradigm, however, has been seriously weakened by the increased mobility of capital and the internationalization of supply chains from the 1970s onward, and especially since the 1970s, by the increase in the application of robotics in industrial production [51]. This is reflected in the movement of significant portions of production overseas and the subsequent decline of union membership.

An alternative is to look at the German industrial organizational model in which unions and management play quite different roles than in the American case. In Germany union representatives sit on company boards and actively participate in day-to-day company policymaking. The impact of the 2007–2008 recession on workers in Germany versus the United States illustrates the practical outcome of the different organizational arrangements. When the recession hit mass production industries, like automobiles, in the United States, orders for new cars decreased and workers were laid off according to seniority. Alternatively, in Germany the boards, comprised of management and labor representatives, developed plans in which all workers would take a small cut in numbers of hours worked, with the government subsidizing the lost wages. This also reduced overall costs for unemployment benefits. The German industrial model, with the greater role for unions in day-to-day decision-making, is much more resilient than the American model in anticipating and adapting to external exigencies [52, 53]. It is important to emphasize that, as in the case of criminal justice reform, it is the convergence of interests, and the awareness of how working together can achieve their respective goals that provides an important incentive for both parties to support participation in the organization.

3.3 Bringing community-level civil society development into educational reform

A major obstacle to reversing the decline in many vulnerable communities is the lack of adequate job training. A promising start in this direction is the work of the National Association for Community College Entrepreneurship (NACCE) that is facilitating networks between employers, community college training programs and local community support groups in both rural and metropolitan areas. These efforts have attracted considerable support from a mix of state, local, federal, and non-governmental foundations as well as technical support from universities throughout the country [54].

3.4 Institutional adjustments to improve research support for understanding and developing strategies to enhance civil society

There is a wealth of individual community studies as well as important comparative studies of both urban neighborhoods and rural communities. A major weakness, however, is the insufficient development of national and international databases that can facilitate a cumulative growth in our understanding of what strategies and programs are most effective in facilitating the development of civil society, and, in turn, community resilience. This problem could be greatly diminished in ways that follow the model of the institutional structures that have produced such miraculous achievements in medical research in the twentieth and twenty first centuries.

There is a need for better coordination of data bases between the various agencies that fund research related to community sustainability. Currently, in the United States, for example, the National Institute of Health, the National Institute of Mental Health, the National Science Foundation, United States Department of Agriculture, Housing and Urban Development, and other agencies support various types of community-based research. One of the most important recent studies, the Moving to Opportunity Experiment [20], was funded by the Internal Revenue Service of the U. S. Treasury Department, which had a keen interest in identifying the effects of the neighborhood a child grows up in on his or her future earnings and thus his or her potential to be a tax burden or a taxpayer. A challenge exists, however, insofar as each agency has its own independent data base. The European Union has provided a very helpful alternative by funding cross-national studies of community development programs within the Union that provide empirically based comparative insights into the impact of local and regional social institutions and networks on the effectiveness of different approaches to community development [31]. Cross-national data bases obtained by international organizations like the UN [55], the World Bank [56] and OECD [57] also provide scientific bases of comparisons of the effect of national-level institutions on the ability of local communities to cope with change.

A striking finding from a cross-national database is the relationship between national institutions, participation in community and personal subjective happiness. The World Happiness Report [58], which is based on sample surveys of citizens’ subjective perceptions of the happiness of their lives in 156 countries, ranks Finland at the happiest place to live, followed by their Nordic neighbors Denmark, Norway, and Iceland. The United Kingdom ranks 15th and the United States is 19th. Finland and the other Nordic countries at the top of the happiness index have high performing capitalist economies but also have the highest levels of tax support for social support programs (see, e. g., [59]).

The Finnish model of rural policy has been reasonably successful in achieving coherence among sectoral policies oriented to rural areas (the so-called broad rural policy) and in tailoring specific programmes to promote rural development (the so-called narrow rural policy). The Rural Policy Committee has played a crucial role in the governance of rural policy, bringing together diverse actors, and advocating for rural communities. Key priorities for the future are delivering public services to an aging and dispersed population more equitably and efficiently, enhancing the competitiveness of an increasing number of non-farm related rural firms, and improving the business environment in rural areas by fulling utilizing their abundant natural amenities [60].

4. Conclusion

Civil society typically is thought of as distinct from government as well as private sector businesses. This is true in the way civil society organizations are formed, the incentives for persons who join them and, of course, their status in the tax code. But, as shown in the preceding discussion, the role of governments in promoting civil society organizations is quite central to their formation and preservation. The core rationale for governments promoting civil society is their contribution to a “public good,” either through enhancing the sustainability of communities by providing services to them that government itself is less willing or less capable of providing, or by creating a mechanism to reduce zero-sum conflict between groups within a society. This becomes a rationale for maintaining their existence, but, perhaps even more importantly, it is a justification for public expenditures, which always involves coercion, usually through taxes, for their maintenance. For sociologists, who historically have correctly identified the important role of civil society organizations in maintaining a liberal democracy, it is essential to devote much more attention to the political and economic institutions and processes that promote them.