Mark Szabo

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prospect theory and the good friday agreement

This is a topic of interest that will support my research into solving environmental conflicts. This article critically examines Hancock, L. E., Weiss, J. N., & Duerr, G. M. E. (2010). Prospect theory and the framing of the Good Friday Agreement. Conflict Resolution Quarterly, 28(2), 183–203), and applies the learnings to my research. 

While the authors’ contribution is valuable to my research, as discussed below, there are some challenges with their analysis that need to be considered.  First of all, the correlation between the communications undertaken by the primary influencers and the results of the vote is not clearly articulated. Firstly, the influencing parties had different communication strategies when framing their positions. The unionists were almost purely prospect theory-driven, focusing on the cost of continued violence and ongoing loss of political control to the English. However, the republicans focused on the idea that the struggle for reunification must be ongoing and the GFA is one step forward in that struggle. The Yes Campaign, on the other hand, focused primarily on the positive benefits of peace. The authors’ conclusion that the net effect of these divergent communication strategies was consistent with prospect theory is tenuous. Had the authors undertaken an analysis of voter perceptions and reasons for voting, the authors could have made a stronger correlation between the communication and the outcome.

Second, the authors are attempting to expand prospect theory to group decisions, and this is theoretically shaky ground that they do not acknowledge or address. As discussed in Question 1 of this paper, prospect theory examines individual cognition and its applicability to group decisions and negotiations has been called into question by Levy (1996), Shogren (2008), and even to a certain extent by Kahneman (2003). Others, such as McDermott (2004, 2009) indicate that it can be applied in a larger political context. The point is that the authors make a significant omission by not at least mentioning this challenge and addressing it directly. 

Third, to a certain extent they slightly mischaracterized prospect theory in the abstract of the paper, where they say that effective use of prospect theory involves “framing the preferred choice as less risky than the alternative (Hancock, et al., 2010, p. 183).” This mischaracterizes the role of risk and carries through the discussion, causing a missed opportunity. The relevant point of prospect theory is that individuals overweight negative outcomes, and even more so when those are framed as certainties, going outside what behavioural economic theory would call rationality. Because of this, the application of prospect theory in the analysis is confusing and muddled, although the correct result is reached. 

Fourth, the universal applicability of this analysis is limited by the fact that all the leaders were essentially on the same side at the point of analysis. The challenge at that time was to convince the electorate, not change the frames of the disputing parties. The power of prospect theory is not diminished by this fact, but it bears consideration. The main concern is that, even if one assumes that the “yes” side were uniformly framing communications in line with prospect theory, which they were clearly not, there is no analysis of the “no” side in this discussion. That would have been instructive as a point of reference.   

Lastly, the analysis of reference points is thin. The authors correctly point out that the reference point need not be the status quo, but they do not go further into examining the change in n examination of voter's pre-existing reference points would have helped inform the differences in how the elites created their reference points.

Despite the aforementioned challenges, the analysis can be helpful to my research. First, because the GFA hinged on a public referendum, this analysis helps to underscore the impact of non-government influence groups like the Yes Campaign group. While most environmental conflicts take place largely in the administrative sphere, the battles are also fought in the public forum, formally and informally. It would have been helpful to have a more definitive correlation between the Yes Campaign and the outcome of the referendum, particularly because the Yes Campaign did not focus on the certain negative. 

Second, by focusing on the frames of the decision makers the authors have helped pave the way towards analyzing conflicts on the basis of the directing minds of a dispute, and the extent to which their frames influence the eventual outcome. 

Third, the choice of the GFA, in part because of the long-standing nature of the dispute, is applicable to the types of environmental conflict I intend to examine. A longer duration will presumably provide for more entrenched frames and more communication data that can be interrogated. The end result, that a campaign that focused (arguably) on the certain negative was impactful in carrying the day, and also driving enduring post-decision support because it set more realistic expectations, is a powerful learning. 

Do We Need New Institutional Characteristics?

An inductive reading of Asah, et al. (2012), who successfully applied a preference assessment voting approach to an intractable environmental conflict, will point to some useful considerations for institutional qualities. These qualities were also elaborated on in Question 3, where I discuss institutional considerations regarding public participation in EA. 

(1) Emphasize Individuals: The forum must facilitate cognitive reframing in the key participants, but also force them to consider the frames of other parties in their deliberations, and it must do so by minimizing the bias, social and interpersonal influences that so often derail solution-finding. 

(2) Research Expertise: The forum must involve independent third parties qualified to analyze a recursive communication model and act in concert with a moderator role. 

(3) Moderator Role: A moderator is required to ensure a smooth and agenda-minimal process unfolds.  

(4) Recursive Communications: The forum must reflect the learnings from the preference analysis back to the parties involved, so that there is a sufficient level of recursive communication among the participants. 

Institutional Implementation 

(a) Municipal Government 

I will also not be dealing with municipal government considerations, simply because my choice of focus is on oilsands-related conflict, which are not substantively addressed at a municipal administrative level in Canada. My research will certainly inform municipal and local disputes and I expect there to be a potential contribution at that level, however I will not be addressing that level of involvement in my research. 

(b) Federal Government

Because my chosen research focus is on oilsands-related conflict I need to be cognizant of both federal and provincial frameworks. In terms of federal legislation, however, recent changes make it unlikely that a new (or modified existing) institution will be tenable in the near future, so my recommendation will focus on the provincial level, which has more opportunity in this regard. The following outlines my findings regarding the federal level. 

In terms of a recursive preference communication approach to conflict resolution, any federal participation looks increasingly unlikely given recent legislative changes. The Canadian Environmental Assessment Act, 2012 (“CEAA”) dramatically reduces the level of federal involvement in environmental assessments, from several thousands down to “a few hundreds annually,” and reduces the scope of those few remaining assessments, focusing only on those that have "potentially significant environmental effects on matters of direct federal responsibility. (Gibson, 2012, p. 179).” While a download to the provinces might actually be a welcome devolution of federal power, Gibson (2012) points out that federal analyses will be undertaken after proposals have been submitted, which means there will be little or no direct influence in the planning stages. Gibson (2012) also notes an increase in ministerial discretion in the process decisions, which may reduce public influence and increase the politicization of decisions. 

On October 25, 2013, the Canadian Environmental Assessment Agency issued a list of the types of projects which would no longer require federal assessment, including “in-situ” oilsands developments in which the bitumen is processed on site - a very energy-intensive process - as well as industrial facilities, some pipelines, etc. (CBC, Oct 25, 2013). Given the current move by the federal government in the direction of devolving assessment responsibility to the provinces, the bulk of my focus will be on provincial frameworks. 

(d) Provincial Government

The new Alberta provincial energy regulator (the “AER”) is an appropriate alternative to consider in terms of examining the need for a “new institution,” however recent issues have arisen that point to the fact that the AER is not currently amenable to, or mandated with, the level of public engagement that recursive preference communication approach will require, although there is now judicial pressure to move in that direction. 

In previous questions I have pointed out that the AER faces several challenges which would need to be addressed if it were to be an appropriate venue for this type of approach. First, there is a policy gap between the AER and both federal and provincial governments, who have devolved responsibility but who have not changed the AER’s mandate. In the Jackpine case the AER was not equipped to handle the fallout from Shell’s uncooperative change in approach. In Bernum they were not mandated to deal with the environmental issues of fracking and flaring, since no parties brought it to their attention. In the Pembina case, they were seen to be too exclusionary in terms of who would be allowed standing to raise concerns with an application, which clearly indicates they have not been given a proper mandate to enact the relevant provincial environmental legislation.  

Environmental conflicts are inherently wicked, and the symptoms of wickedness can only be removed by leadership. If the province’s energy sector is to live up to the expectations of provincial legislation, the AER needs to be mandated, equipped and funded to act in a more proactive, governance-oriented role.  

References 

Asah, S. T., Bengston, D. N., Wendt, K., & Nelson, K. C. (2012). Diagnostic reframing of intractable environmental problems: case of a contested multiparty public land-use conflict. Journal of environmental management, 108, 108–19.

Gibson, R. B. (2012). In full retreat: the Canadian government’s new environmental assessment law undoes decades of progress. Impact Assessment and Project Appraisal, 30(3), 179–188.

Hancock, L. E., Weiss, J. N., & Duerr, G. M. E. (2010). Prospect theory and the framing of the Good Friday Agreement. Conflict Resolution Quarterly, 28(2), 183–203.

Kahneman, D. (2003). A perspective on judgment and choice: mapping bounded rationality. The American psychologist, 58(9), 697–720.

Levy, J. S. (1996). Loss aversion, framing, and bargaining: The implications of prospect theory for international conflict. International Political Science Review, 17(2), 179–195.

McDermott, R. (2004). Prospect Theory in Political Science: Gains and Losses From the First Decade. Political Psychology, 25(2), 289–312. 

McDermott, R. (2009). Prospect Theory and Negotiation. In G. Sjöstedt & R. Avenhaus (Eds.), Negotiated Risks: International Talks on Hazardous Issues (pp. 87–109). Berlin, Heidelberg: Springer Berlin Heidelberg.

New environmental review rules anger oilsands critics. (2013, October 25). CBC News, pp. 5–7.

Shogren, J. F., & Taylor, L. O. (2008). On Behavioral-Environmental Economics. Review of Environmental Economics and Policy, 2(1), 26–44.