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Article

“Squaring the Circle”—The Disregarded Institutional Theory and the Distorted Practice of Packaging Waste Recycling in Romania

1
The Department of International Business and Economics, The Faculty of International Business and Economics, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
2
The Department of Finance, The Faculty of Finance and Banking, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
3
The Doctoral School in Economics and International Affairs, The Bucharest University of Economic Studies, 010374 Bucharest, Romania
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(22), 9440; https://doi.org/10.3390/su12229440
Received: 24 October 2020 / Revised: 1 November 2020 / Accepted: 9 November 2020 / Published: 13 November 2020
(This article belongs to the Special Issue Circular Economy in Small and Medium Enterprises)
The European Union (EU) remains one of the leading-edge jurisdictions on the planet in legislating and enforcing the circular economy, a token of its forthright environmental awareness. Still, given that the level of economic development across the EU member states is heterogenous, this concern, however generous it may be, looks too beyond “their” means and too ahead of “its” times. What the European policymakers seem to disregard is that top-down institutional constructions, as is the case with the EU’s overambitious environmental legislation, can end up in severe distortions. Imposing/importing an institutionalized arrangement without due preparation may fuel resistance to (even positive) change, as the biases it engenders translate into considerable costs and selective benefits. The present article attempts a novel approach within the literature, where the failure to achieve recycling targets is usually considered the fault of private businesses. Instead, our study explains suboptimal environmental results by the institutionalization of spiraling governmental interventions in markets, meant to make the arbitrarily set recycling/reuse targets artificially viable. Subject to EU rules, Romania’s packaging waste recycling market is a textbook case in revealing this outcome predicted by economic theory, as our statistical data suggest. The conclusion is that it is equally perilous to neglect the calibration of legislative targets according to institutional and economic development as it is to reject environmental claims based on their costs. View Full-Text
Keywords: circular economy; neo-institutional economics; environmental legislation; top-down institutions; recycling and reuse targets; market distortions; EU packaging waste directive; Romanian recycling industry circular economy; neo-institutional economics; environmental legislation; top-down institutions; recycling and reuse targets; market distortions; EU packaging waste directive; Romanian recycling industry
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MDPI and ACS Style

Jora, O.-D.; Pătruți, A.; Iacob, M.; Șancariuc, D.-R. “Squaring the Circle”—The Disregarded Institutional Theory and the Distorted Practice of Packaging Waste Recycling in Romania. Sustainability 2020, 12, 9440. https://doi.org/10.3390/su12229440

AMA Style

Jora O-D, Pătruți A, Iacob M, Șancariuc D-R. “Squaring the Circle”—The Disregarded Institutional Theory and the Distorted Practice of Packaging Waste Recycling in Romania. Sustainability. 2020; 12(22):9440. https://doi.org/10.3390/su12229440

Chicago/Turabian Style

Jora, Octavian-Dragomir, Alexandru Pătruți, Mihaela Iacob, and Delia-Raluca Șancariuc. 2020. "“Squaring the Circle”—The Disregarded Institutional Theory and the Distorted Practice of Packaging Waste Recycling in Romania" Sustainability 12, no. 22: 9440. https://doi.org/10.3390/su12229440

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