The development and functionality of resources

Abstract

With 20.000 signatures on the petition against shale gas, it can be stated that there are resistances towards the development of shale gas in the Netherlands (Schaliegasvrij Nederland, n.d.) Many people fear that in the Netherlands the same negative effects concerning the exploration of shale gas can occur as in the U.S. Though, it may be questioned if this indeed is possible. The insights which can help to answer this question can be achieved with the ‘Modernized Zimmerman framework’, which is developed and tested during this research. This framework is based on the theory of E.W. Zimmerman and theories on modern institutions and is developed to increase the understanding on the development and functionality of resources. The main question which is answered during this research is: To what extent is it possible to develop an institutional framework based on the theory of E.W. Zimmerman and new institutional economists that is constructive to generate insights on the development and functionality of a resource? The theory of E.W. Zimmerman (1888-1961) is chosen as the basis from which the framework is developed, as it explains which factors determine why and how a substance can be developed and function as a resource. According to Zimmerman, a substance can function as a resource if it least satisfies one objective, referred to by Zimmerman as a Want. Zimmerman explains that the development and functionality of resources is a dynamic process and explains what the relations between the factors, which are of influence on the development and functionality of resources, are. In addition, his approach is selected, because it provides an uneconomic approach on why resources are developed. This can provide different and original insights, than economic approaches, which often take the profitability and the demand of a resource as the main causes why resources are developed and function as they do. Zimmerman’s theory originates from 1951 and therefore it is somewhat outdated, especially in the field of institutions. Zimmerman is not very specific on the type of institutions present, the content of these institutions and how these are related, compared to the Modern institutional theories. In addition, the terms he uses in his theory are rather complex and he uses multiple terms for the same aspects. For this reason, his theory is improved by means of Modern institutional theories. The four layered model of Williamson and the adjusted version of this model, developed by Groenewegen and Koppenjan are used to increase the insights on the different types of institutions and their interrelations. These insights are also integrated in the framework. In addition, some of the vague terms of Zimmerman are replaced by the more modern, abstract and comprehensive terms of Groenewegen and Koppenjan. The result of the combination of the theory of Zimmerman and the Modern institutional theories, lead to the ‘Modernized Zimmerman framework’ provided in figure 1, which is tested with a case-study on shale gas in the U.S. Figure 1 Modernized Zimmerman framework The ‘Modernized Zimmerman framework’ provides a structured and scientific approach to analyze the development and functionality of resources and provides valuable tool to obtain important insights on the development and functionality of resources. Amongst others, it increases the understanding that it is unlikely that exactly the same effects are posed by the exploration of shale gas in the Netherlands as in the U.S. For this reason the resistances which can be expected in these countries will also be different. The reason for this difference can be found in the difference in institutions. These institutions are of strong influence on the development of the Technical system and therewith on the effect the resource will have on society. Also, the framework increases the understanding why the Technical system could evolve as it did and why there were no resistances towards shale gas in the U.S. until 2010. The case study on the shale gas development in the U.S. has also provided important insights on the development and functionality of shale gas in the U.S. These and the general insights which can be attained with the framework could be used by governments to develop an informed decision on if they want to exploit a resource, such as shale gas. By using the framework an increased understanding can be obtained on which resistances will be associated with the development of a resource and how these resistances evolve. Also, the framework can increase the understanding if, and how resistances could be overcome. Also, the framework is able to increase the understanding why a resource is developed and if it is able to meet these demands. Last, the framework provides an indication on the level of public acceptance which can be expected. When there are many resistances present, which cannot be overcome or will not be overcome for other reasons, the level of public acceptance is expected to be low. In addition, the factor Societal appraisal, the outcome of the model, also provides an indication of this public acceptance and provides guidance on which fields the resource should be improved to increase this acceptance. Thus it was possible to develop a framework, based on the theory of E.W. Zimmerman and modern institutional economist which is constructive in generating valuable insights on the development and functionality of resources. This framework is the ‘Modernized Zimmerman framework’. The framework can be used for further research towards the development and functionality of resources and the public acceptance. In addition the framework could be used to structure discussions with stakeholders. Finally, the framework could be used by governments to create more informed decision making processes on resources.