Keywords: economic sustainability, systems analysis, sustainability criteria, Orientor theory, sustainable development, governance, economic development
Economic sustainability of the economy: concepts and indicators
Every society can be described as comprising four dimensions, the economic, social, environmental and institutional. Each of them is a complex, dynamic, self-organising and evolving entity in its own right, making the coupled system one of tremendous complexity. For this system to be sustainable, each of the four subsystems has to maintain its capability to survive and evolve, while the interlinkages of the subsystems must enable a permanent co-evolution. Finding the appropriate level of complexity for descriptions and models is a necessary precondition for adequate analysis and to avoid wrong prognoses. As this level of complexity is beyond the analytical capacities of current economic theories, a system analysis perspective is presented as a framework for discussing the co-evolution of economy, society, and nature. In this context, the economic, social, environmental and institutional sustainability of the economy can be defined and economic theories can be assessed regarding their usefulness for the description of a complex evolving system, like the economy. Unfortunately, there are few applications of the rather abstract system analysis of complex evolving systems to the economy so far. Consequently, before using it for assessing the sustainability of economic development processes, sustainability must be defined for such systems. This is the raison d'être of Orientor Theory, providing the means to assess the sustainability of the economic system, albeit still on a rather abstract level. Based on systems and Orientor theory, the paper derives suggestions for criteria of the sustainability of the economy, and in particular its economic sustainability.