CC BY
3DOI: 10.29141/2658-5081-2022-23-4-7
EDN: TPWBRH
JEL classification: A13, R58
Irina I. Rakhmeeva
Ural State University of Economics, Ekaterinburg, Russia
Konstantin V. Chernyshev Ural State University of Economics, Ekaterinburg, Russia
The moral paradigm: Reconciliation of efficiency and justice principles in regulatory decision-making
Abstract. The economic agents' surging demand for a human-centric approach of the government authorities, and the dissatisfaction with the efficiency of managerial decisions taken in the face of numerous external challenges (the pandemic, digitalisa-tion, and sanctions pressure) determine the need to search for the new foundations of state's regulatory policy. The research rethinks the longstanding public economic discussion on the concepts "efficiency" and "justice". The methodology of the study is the nexus of concepts of economic analysis of law, institutional economics, and moral economics, which uses a bio-socio-economic model of a person and relies on humanistic values. The methods are the logical deductive method and the semantic analysis employed to explore the key concepts. The article traces the evolution of economic and legal views on efficiency and justice with regard to the regulation of economic relations. The paper justifies the possibility of convergence of the phenomena under discussion in terms of their application while taking regulatory decisions within the moral economics paradigm by embedding justice as a component of the target condition of the socioeconomic system. To evaluate the regulatory decisions, the paper proposes using the concept of socioeconomic, or public, efficiency, which should be understood as the ability of a regulation to achieve a socially significant goal while upholding the generally accepted principles of justice and morality through the optimal use of available limited resources.
Keywords: justice; moral paradigm; moral economics; Keynes trilemma; socioeconomic efficiency; efficiency of norms.
For citation: Rakhmeeva I. I., Chernyshev K. V. (2022). The moral paradigm: Reconciliation of efficiency and justice principles in regulatory decision-making. Journal of New Economy, vol. 23, no. 4, pp. 137-152. DOI: 10.29141/2658-5081-2022-23-4-7. EDN: TPWBRH.
Article info: received August 18, 2022; received in revised form August 31, 2022; accepted September 14, 2022
Introduction
In search of the ways to weather the Great Depression, Keynes, after a personal
visit to Soviet Russia to study its experience, published an article The Dilemma of Modern Socialism (1932), where he postulated a trilemma about the impossibility of simultaneously maximising freedom, justice ("economically unsound things") and efficiency ("economically sound thing") - three motives that exist in the "soul of every socialist" [Keynes, 1932]. Since then, for a little less than a century, economists of all nationalities have perceived this statement as a maxim, most often narrowing it down to the dilemma of the need to choose between efficiency and justice. Without delving into the interpretation of the concept of freedom, accepting that free choice implies the ability to act and achieve goals in accordance with one's own value system, which includes ideas about justice and efficiency, in this article we consider the relationship of only two basic concepts.
The scientific paradigm of the 21st century, generated by the conflict between intensive digitalisation and globalisation of social relations and the need to preserve the identity, as well as the strengthening of Russia's confrontation with the "collective West", is based on humanistic values. Its core includes both institutional and moral economics, according to which the understanding of the society's welfare expands to the need to meet not only material, but also spiritual and moral needs.
The state socioeconomic policy is adopted through regulatory decision-making by which the regulator is forced to address the issues of ensuring justice and efficiency. Let us clarify that the paper will focus on the efficiency and justice of regulatory decisions that determine socioeconomic processes, which in the RomanoGerman legal system are implemented through the introduction of regulatory legal acts.
The key hypothesis of the study is the thesis not just about the possibility of reconciling justice and the efficiency of human actions in regulatory decision-making, but about the need to do this in order to achieve efficient development in the process of making such decisions.
The purpose of the paper is to prove this hypothesis. Therefore, first of all, we determine the concepts "efficiency" and "justice" in relation to regulatory decisions following their evolution in scientific thought as well as present their modern interpretation. The next objective involves the analysis of research on the ratio between efficiency and justice criteria in making regulatory decisions and the consequences of such decisions for socioeconomic systems. Finally, we introduce the concept "public efficiency" to examine regulatory decisions based on the synthesis of approaches to efficiency and justice.
Evolution of theoretical approaches to understanding the economic efficiency
of regulatory decisions
Becker was the one who initiated the inclusion of diverse social phenomena in the economic research programme as well proposed analysing them using the tools of neoclassical theory and concepts about the rationality of human behaviour, market equilibrium and stability of preferences [Becker, 1962; Becker, 1968]. Developing Becker's economic approach to crimes, which consists in the rational attitude of agents to punishments, his colleagues from the Chicago school laid the foundations for a new field of research - the economic analysis of law. One key task of the new discipline was to substantiate the conditions and ways to improve the efficiency of regulatory norms from the standpoint of socioeconomic well-being.
At the same time, "the very problem of the law efficiency can be raised only within certain types of legal understanding that recognise the right to control social practices and behaviour of people" [Churakov, 2019, p. 60]. Among the factors that foreshadowed the emergence and spread of a new direction in the research of legal institutions from the standpoint of economics, Sinitsyn calls "a lag between the legal regulation and the socioeconomic development" [Sinitsyn, 2017, p. 4].
The founders of the economic analysis of law, who came from countries with an Anglo-Saxon legal system, first of all Richard Posner, tried to build a simple model of social relations based on classical concepts of rationality and efficiency implying maximisation of the aggregate wealth of society, which eventually may have provoked long-time distrust of law schools of thought in this discipline.
In European countries, ideas about welfare differed. The principles of social market economy originated and were substantiated there [Nureev, 2007]. Richter introduced the concept of national efficiency, which transformed Posner's principle of wealth maximisation into the principle that society should achieve its goals, whatever they may be, while not wasting money and saving resources by reducing transaction costs [Richter, 2008, p. 30].
Ideas about human rationality have also transformed: the awareness of its limitations increased due to the specifics of not only cognitive, but also psychological and moral characteristics of man, such as the ability to self-control, the influence of emotions on decision-making, willpower, etc. [Arrow, 1987; Sunstein, Jolls, Thaler, 1998; Eide, Robin, Shepherd, 2006; Kuzminov, Bendukidze, Yudkevich, 2006]. Although even Hobbes' model of social order based on the realisation of rational agents' individual interests already considered the presence of feelings as a threat to rationality [Hobbes, 1650].
Taking into account the interdisciplinary nature of such an object of research as the efficiency of law, we need to establish its content from the standpoint of legal science.
Lawyers argue that the value of the norm lies in its ability to serve as an end and a means to satisfy needs, and "the principle of good faith is to maintain the legal regulation of relations that leads to the result, which is implied and pursued by the current law" [Medicus, Schuldrecht, 2000]. The efficiency of the rule of law is defined as "the ability to impact positively on social relations and... their participants in a given direction under the social conditions that actually exist during the period when they are effective in the country" [Fatkullin, Chulyukin, 1977, p. 26]. Pashkov and Yavich identify the following conditions of efficiency for the rule of law: this rule is efficient if it meets objective needs, provides for the optimal behaviour required to achieve the goal, and really ensures the onset of the actual result [Pashkov, Yavich, 1970, p. 41].
Under the influence of recent economic trends and legal concepts associated with them, the interpretation of the efficiency of regulatory decisions in economic thought has shifted from maximising net benefits to confidently achieving a given social goal (need) in an optimal way. The first approach can still be found in recent economic works. Odintsova, the author of one of the few Russian books on economics and law, describes the course of thought of an economist who talks about law in this way: "An economist compares two alternative legal solutions in terms of the ratio between their benefits and costs... The highest weight is attributed to a legal norm that is efficient or for which the cost-benefit ratio is in favour of the benefits" [Odintsova, 2009].
Evolution of theoretical approaches to understanding justice in economics
Economists have long been searching for justice and ways to eliminate inequality, primarily at the stage of distribution in the economic process. Even David Hume tried to resolve the contradiction between self-love and social obligations, putting forward the idea of the existence of a unifying quality that can lead to agreement. He argued that the theory of moral sense can be useful only when it imposes duties that meet the interests of everyone [Hume, 2006, p. 280].
The significance of this issue becomes especially obvious when economic ideas about justice according to the demands of society are so closely intertwined with political views that they turn into whole political currents, such as, for example, Marxism or liberalism.
Plato in his Republic compared justice with order and believed that the good cannot be calculated [Plato, 2017]. Aristotle held the opposite views: he pointed out that when measuring the good, it is necessary to take into account its relativity, since any activity strives to achieve some goal and receive the good, but everyone has their own understanding. The treatise Politics says that law serves as a measure of justice, and justice is impossible without the state [Aristotle, 2009].
The idea of justice includes the principles of the distribution of certain economic categories among certain members of society. Karapetov, a recognised lawyer and an expert in the economic analysis of law, believes that one key task of regulatory norms is "maximising allocative economic efficiency, i.e., the most efficient allocation of available resources" [Karapetov, 2016, p. 122].
Table below presents the most well-known approaches to determining the content of justice, taking into account two parameters - the object and the nature of the allocation. Table can become multidimensional when more parameters are added, for example, allocation subjects (those who make decisions) and recipients of the distributed good.
Approaches to determining the content of justice in economics
Nature of allocation Object of allocation
Income Utility Welfare Opportunities
Equality Egalitarian approach, Marxism Utilitarian approach Social liberalism
Maximisation The theory of social welfare (maximising the welfare of the whole society), the Rawlsian approach (inequality is permissible when the poorest members of society achieve the highest possible standard of living)
According to individual characteristics Market approach (capitalism)
Source: own compilation based on [Mill, 1848; Bentham, 1948; Arrow, 1951; Black, 1958; Galbraith, 1969; Rawls, 1971].
For our purpose, the nature of the allocation is divided into three groups: equal allocation, tending to the maximum function of a certain parameter and allocation depending on individual characteristics.
The egalitarian approach is based on the absolute equality of people in dignity and rights. Equality is the foundation of Marx's theory, in the view of which regulatory policy should be based on the values of self-realisation, solidarity, and the "tribal" nature of humanity. According to the Center for the History and Methodology of Economics of the Higher School of Economics, "this approach goes back to the tradition of natural law, assuming objective values, and thus goes beyond the deontological
justice developed by modern liberal thought in the spirit of Rawls" [Sushentsova, Mi-roshnichenko, Lymar, 2021, p. 116].
Following the rooting of the concepts such as utility and welfare in economic thought, ideas about justice have also transformed. Bentham, the ideological inspirer of the modern utilitarian approach, when speaking about the utility, understood it as the ability to bring benefit, advantage, pleasure and good, and saw "the task of authorities in stimulating the happiness of society by punishing and rewarding" [Bentham, 1948]. On the contrary, supporters of social liberalism see injustice precisely in the restriction of freedoms and opportunities, perceiving taxes on life, freedom and property as unfair. They consider the mission of the authorities to ensure equality of opportunities and protect the population from the consequences of economic crises and cataclysms.
The theory of social welfare posits the maximisation of the welfare of the whole society [Arrow, 1951; Black, 1958]. However, in its idealistic view, this theory turned out to be untenable and required further adjustments to both the criteria for optimal distribution and the interpretation of the concept of welfare. The Rawlsian function of public welfare deserves special attention, based on the postulate that inequality is permissible when the poorest members of society achieve the highest possible standard of living. At the same time, a balance is needed between the preservation of incentives for efficient work (production) and justice, equality, and dignity of the life of each individual [Rawls, 1971].
In his book The New Industrial State, Galbraith sought to simultaneously justify the market economy and find means to overcome the most acute social contradictions. There he justifies the market approach by the fact that a reasonable economic system allows all people, regardless of gender, to pursue socially acceptable personal goals [Galbraith, 1969, p. 295].
In general, the evolution of ideas about justice went from the idea of equal income distribution through understanding the different value of the same benefits to various individuals to ensuring an equal distribution of wealth and understanding the primacy of equal opportunities (equal access to education, positions, voting, etc.) for the development of the individual and society.
The contradiction between personal and public benefit deserves special attention. In society, this contradiction is removed by institutional design, which creates a system of checks and balances, not only punitive, but also stimulating.
Smith wrote that "each individual, intending only his own gain, is guided by an invisible hand towards a goal that was not at all part of his intentions. <...> Pursuing his own interests, he often serves the interests of society more efficiently than when he seeks to do so" [Smith, 1896, p. 237]. Commons in his Legal Foundations of
Capitalism indicates the basic principle of the "common good" - "let any person get rich insofar as he increases the common good, and not insofar as he gains his private wealth on the common good" [Commons, 1924]. Bibik attaches "universal scientific significance" to the theory of rational choice, and we share his opinion that this choice is based, among other things, on the ideas of retribution and reciprocity [Bibik, 2016, p. 29]. This idea underlies the game theory, which has found wide application in the research of cooperative decision-making.
Commons, the bearer of ideas about natural law born from customs ("customs are the raw material from which the justice system is built... law is a dead letter if it does not correspond to customs"), considered such law both fair and efficient, and saw the task of the regulator as legitimising good customs and weeding out bad ones. For example, he argues about the emergence of copyright: "... It is fair that the author receives a monetary income from his own talent and labour" [Commons, 1924]. Laws invented by the regulator from the standpoint of its own concept of justice and welfare may not meet the criteria of justice and efficiency. Commons defined law as "a complex set of desires and fears that human beings have for each other," and speaking about the correct volitional decision of an individual, listed such characteristics as reason, virtue, ethics and common sense in one row [Commons, 1924], i.e., equated efficiency with justice.
Methodological approaches to efficiency and justice in economic research of social relations
A research group led by Auzan measured the values of Russian society through the prism of the Keynes trilemma as a part of a sociological study. According to the results, in 2017, freedom and breadth of choice were in the first place, justice was in the second, and the efficiency of the state was in the third1. In 2020, as a result of the COVID-19 pandemic, the world turned upside down. Justice remained in second place, while the efficiency of the state and freedom swapped places, taking the first and third positions, respectively. We can assume that the events of 2022 related to the special military operation in Ukraine will lead to another coup of the triangle - justice will come out on top, efficiency will shift to second place, and freedom will remain in third place.
Economists should take into account the approaches of legal science, for which the principle of justice is fundamental when making regulatory decisions and subsequent consideration in court of their application. Thus, Karapetov notes that "the
1 Auzan A.A. (2020). We cannot be ready for all challenges all at the same time. The Bell. https://thebell.io/ nelzya-byt-odnovremenno-gotovymi-ko-vsem-vyzovam-ekonomist-aleksandr-auzan-v-proekte-priblizhaya-bu-dushhee.
main consideration that is taken into account [by the Supreme Court of the Russian Federation] is the question of the justice of such a decision and the possible consequences of its implementation in judicial practice" [Karapetov, 2016, p. 11].
The analysis of numerous works of economists and lawyers on the economic efficiency and social justice of regulatory decisions shows a great intransigence towards convergence on the part of legal science. This is how Sinitsyn describes it: "Modern Russian law is widely known for categorical and often mutually exclusive statements about law as the art of goodness and justice, and not a means of optimising the economic costs of business" [Sinitsyn, 2017, p. 13]. Here are just some of the views of modern scientists on this issue. So, Lushnikov, a lawyer, argues that different terminology in the legal and economic sciences generates mutual misunderstanding, "the key concepts of 'economic imperialism' include rarity, price, opportunity costs, benefits," therefore, "economic analysis of law does not imply an interdisciplinary dialog" [Lushnikov, 2017, p. 80]. The basis of economics, in his opinion, is efficiency, expediency, rationality, determinism, while justice, formal equality, freedom, and humanism are priorities for law [Lushnikov, 2017, p. 89]. The team led by Bogdanov believes that the improvement of civil legislation should be associated with the ideas of not economic, but social efficiency [Bogdanov, Bogdanov, Bogdanova, 2014, p. 12]. Bibik, defining justice as a culturally universal, basic category for the entire legal science and any legal system, argues that due to the "incompatibility of the goals and objectives of legal and economic behaviour, contradictions naturally arise between them... Social exchange, which is the basis of legal regulation, is closely linked to the concept of justice, whereas rational choice, which is the content of economic behaviour, is linked with the efficiency of the solution" [Bibik, 2016, p. 30].
Calabresi, one of the leaders of the integrated scientific field "law and economics", as far back as half a century ago has called for 'two-sided' relations, showing that "economic theory explores law, but sometimes this research leads to changes in economic theory, and not to changes in law or in the description of legal reality" [Calabresi, 2016, p. 21].
Lawyers often interpret the position of economists one-sidedly, without diving into attempts to apply approaches other than maximising benefits, such as maximising public welfare taking into account the rule of justice (research by Kaldor [1939], Hicks [1939], Rawls [1971], Richter [2008]) or modern concepts of sustainable development and the ESG (Environment, Social, Governance) principles. Churakov, a lawyer, gives such an example: "...From the viewpoint of economic efficiency, it is unprofitable to pay benefits to disabled people, but the social function of the state, on the contrary, implies mandatory payments to people with disabilities" [Churakov, 2019, p. 63]. The authors of this article categorically disagree that for economists, socially
important norms contradict state efficiency. At their core, they represent insurance for healthy or well-off people at the moment, since everyone is at risk of disability, loss of work or falling into other unfavourable circumstances. These norms are necessary for the stability and development of society, for financial support of people in difficult life situations, so that they have the opportunity to recover and in most cases remain part of the economically active population. Economists do not question the need to pay benefits - rather, they will, from the viewpoint of efficiency, assess the amount of benefits sufficient to ensure the life of a disabled person or the poor, but not leading to dependency [Churakov, 2019, p. 63].
The actual inconsistency of existing norms with the concepts of justice characteristic of a particular society leads to mass denial and non-compliance with laws, unrest in society, rallies and protests. We agree with Dementiev, who believes that "a negative assessment of the consequences of a new systemic institution transplantation for the social justice in society is a catalyst for mass opportunistic activity in relation to both this and other institutions" [Dementiev, 2004, p. 19].
We also share the approach of modern institutionalists, according to which "the need for trust in social interactions... has rational and mathematical justifications" [Martianov, 2018, p. 45], which means that long-term cooperative solutions, which include regulatory regulation, become efficient if they are not based solely on maximising selfish benefits, but also on the moral principles.
Results and discussion: Reconciliation of efficiency and justice principles
within a new scientific paradigm
A socially just norm should adequately express the "fundamental economic interests of participants in economic relations" [Vaypan, 2017, p. 126], correspond to the current interests and state of society [Ibid, p. 190], respect the 'risky nature' of entrepreneurial and investment activities [Ibid, p. 192]. In this thesis we see the inclusion of the principle of justice in the interpretation of economic efficiency, which corresponds to the basis of moral economics as a component of a new scientific paradigm.
Ignoring the principle of justice leads to socioeconomic inefficiency in the long run. The adoption of unjust regulatory decisions leads to opportunism, deliberate failure to comply with regulatory norms, and in the extreme stage - the destruction of the socioeconomic system. Schwab, the founder of the World Economic Forum in Davos, believes that strategies that are not trustworthy from the viewpoint of social justice can cause "social unrest, mass migration and armed extremism" [Schwab, 2017, p. 79].
Rakhmeeva's earlier econometric analysis showed a positive correlation between the level of digitalisation and the Gini coefficient. Moreover, the correlation is higher
in previous periods. According to the research results, we concluded that "the level of social stratification has a direct impact on the level of digital development in the medium term" [Rakhmeeva, 2021, p. 236].
According to Sukharev, "efficiency is determined by how much the real strength of institutions corresponds to the strength that was assumed when this institution was introduced... the criterion of following the rule determines its strength... From the viewpoint of costs, the institute may be inefficient in terms of individual costs and efficient in terms of social costs" [Sukharev, 2014, p. 150]. Kuhn, formulating the concept of a paradigm, argued that truth, purpose and good depend on the paradigm we think within [Kuhn, 1962].
In modern economics, a value-based approach to public administration is actively developing, which involves maximising the usefulness of government activities for citizens [Bannister, Connolly, 2014]. In the new scientific paradigm, moral values are included in the system of utility of economic agents, because when making decisions, no individual is free from his beliefs, even if he is not fully aware of them. Abolafia, best known for his sociological analysis of the players' behaviour on the stock exchange, came to the conclusion that "although market participants can be arbitrarily selfish and rational maximisers of utility, their actions are the embodiment of different cultures that depend on internal and external influences" [Abolafia, 1998, p. 70].
Psychological experiments in economics confirm the importance of justice in economic behaviour. In one of these experiments, two strangers had to divide a small sum of money between themselves by offering one another a certain option, while the second participant could agree or refuse, but refusal meant that both players lost the opportunity to receive money. Contrary to the classical theory of rational choice, which assumes that the second participant will agree to any reward, people in most situations chose to distribute the amount equally or did not agree [Cooter, Ulen, 2011, pp. 50-51]. The results of such experiments speak in favour of including ideas about justice that have value for the individual in economic models of a human to further justify managerial decisions.
According to the opinion of Thevenot, which we share, "when the limit of the action evaluation expands to the limit of humanity, the meaning of the coherence necessary in coordination, will coincide with the meaning of justice" [Thevenot, 2001, p. 113]. Therefore, when discussing the adoption of regulatory decisions on the meso-and micro-scale, we are forced to raise individual ideas about justice to the level of public opinion about socioeconomic justice.
Modern economic theory operates by maximising utility instead of maximising benefits. However, the very understanding of utility is also transformed. For an adherent of the moral paradigm, it will be equal to the sum of material and moral benefits.
The latter means satisfying the moral norms and principles of the individual, his understanding of justice. Traditionally, the objection is that economists cannot quantify moral income and associated costs, "reliably assess legal values" (social security, legal protection and fundamental legal values of customs) [Larenz, Wolf, 2004, pp. 79-80], and therefore, they cannot attach independent significance to values and take into account moral benefits in their models.
However, let us consider a situation where a regulatory norm is adopted without taking into account moral benefits, and therefore without an idea of justice in society. This situation leads to non-observance of the established rules, negative public attitude to the accepted norm, and possibly to public protests and rallies, loss of confidence in the authorities. In turn, this involves transaction costs for enforcement of norms and provision of punishments, and political costs for maintaining the level of loyalty to the authorities before elections and even the level of tax collection. For example, the adoption of norms related to the pension system (Russia, France) that do not meet the social expectations of the population may lead to withdrawal of payments to the pension fund and even protest manifestations.
In general, the lack of reliable legal institutions that guarantee citizens' rights to fair allocation and access to social and economic benefits boost the shadow economy. This, in turn, contributes to the formation of a social class of citizens and economic entities working in the shadow sector and living off income from shadow activities, whose interests "ultimately contradict the interests of the whole society" [Bunkovsky, 2015, p. 116].
A conscientious economic agent will strive to ensure "justice, but not justice subjectively understood by a particular person and a particular judge, but justice, as if 'prescribed' by law and values generally accepted in society and supported by law" [Nam, 2019, p. 30], that is, a socially approved norm. There is also an inverse dependence of ideas about social justice and legality on a number of important social factors, in particular on generational differences and the level of material well-being [Ustinkin, Savchenko, Samsonov, 2021, p. 162]. Therefore, an economist who takes into account future costs should include a moral component in consideration.
Regulation, born from the emerging social relations, is "the result of a cooperative strategy in human behaviour, due to which the justice of social exchange is ensured and the maximum efficiency of behaviour is achieved" [Bibik, 2016, p. 31]. Tikhomi-rov believes that in the modern world, "the norm acquires the meaning not only of the rule, but also of the recognised goals and values" [Tikhomirov, 2016, p. 7]. Thus, a socially just norm is both a derivative of cooperative regulatory decision-making and a guide of economic behaviour in accordance with public perceptions of the socioeconomic and moral efficiency of such behaviour.
We have shown above that lawyers and economists are interested in achieving the ultimate goal of regulation and this is where they see the regulatory norms efficiency. Summarising the above, we propose to introduce the concept of public efficiency for the analysis of regulatory decisions based on the synthesis of approaches to efficiency and justice. According to our interpretation, public efficiency is the ability of a regulatory norm to achieve a socially significant goal laid down in it, taking into account generally accepted principles of justice and morality through the optimal use of available limited resources.
Glazyev, while investigating the system of public administration in the countries of Southeast Asia, finds the sources of the 'Chinese economic miracle' in the 21st century in a combination of "mechanisms of socialist planning and market self-organisation, state and private ownership of the means of production, state control and personal entrepreneurship... harmonisation of the interests of various social groups... through joint work on the formation and execution of economic development plans in order to increase the welfare of the people", when "the equal force of economic interests worked for the common good" [Glazyev, 2016, p. 21]. The study of the Scandinavian socioeconomic model (the economy as a whole, the natural resources management, the educational system, the functioning of the labour market and the solution of inequality problems) on the basis of statistical data also prove that within such an economic system it is possible to achieve a high level of social justice with significant economic results [Dubrovin, 2022, p. 162].
The above confirms that a just regulatory policy can be not only efficient, but the most competitive.
Conclusion
The need to implement large-scale structural shifts in the economic space of the country and its regions implies balancing programmes not only in the field of resources, but also from the perspective of expected organisational and institutional changes and their consistency with the prevailing strategies of economic entities' behaviour. Concurrently, existing planning tools often ignore the relationship with market players and the established rules of the game (institutions) [Vasilev, Tuktarova, Akhmet-shin, 2013].
However, many modern economists take into account justice when making regulatory decisions, because they understand that an unjust norm will lead to the collapse of the system in the long run. They are not looking for short-term benefits, but look into the distance, understanding efficiency primarily as a desire for universal well-being.
Why, then, are inefficient (in relation to the concept of justice) norms adopted in certain countries and regions? Well, because decisions belong to politicians, not economists. Where the government is at the apex of the triangle of the social contract, and society and business are at its base [Auzan, Satarov, 2012, Petrov, Titkov, 2010], there the decisions are focused on maximising utility for power structures.
When justice is the main value in society and the fundumental principle of decision-making, its provision becomes a component of the target condition. In a moral economy, unlike traditional approaches, the indicator of development is not the gross domestic (regional) product, but the level of well-being of society, taking into account the preservation of the resource base for future generations. In this case, the question of efficiency as achieving the target condition at the lowest cost does not conflict with the principles of justice.
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Information about the authors
Irina I. Rakhmeeva, Dr. Sc. (Econ.), Head of Economic Theory and Applied Sociology Dept. Ural State University of Economics, Ekaterinburg, Russia. E-mail: i.rahmeeva@usue.ru
Konstantin V. Chernyshev, Bishop of Bakhchysarai, Vicar of the Simferopol and Crimea Diocese, Applicant for Candidate Degree in Economics of Regional, Municipal Economics and Governance Dept. Ural State University of Economics, Ekaterinburg, Russia. E-mail: animieg@usue.ru
© Rakhmeeva I. I., Chernyshev K. V., 2022
