Social Cohesion and Development

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From sustainable development to green growth:The abandonment of the social .... the Economic and Social Commission for Asia and the Pacific of the United Nations ... interested parties, mainly by introducing a “green” accounting system and ...

Social Cohesion and Development

Vol. 6, 2011

From sustainable development to green growth:The abandonment of the social character of development Βαβούρας Ιωάννης 10.12681/scad.9574

Copyright © 2011 Ιωάννης Σ. Βαβούρας

To cite this article: Βαβούρας (2011). From sustainable development to green growth:The abandonment of the social character of development. Social Cohesion and Development, 6, .

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Κοινωνική Συνοχή και Ανάπτυξη 2011 6 (1), 27-35 Social Cohesion and Development 2011 6 (1), 27-35

From sustainable development to green growth: The abandonment of the social character of development* Ioannis S. Vavouras, Panteion University

Από την βιώσιμη ανάπτυξη στην πράσινη μεγέθυνση: Η εγκατάλειψη του κοινωνικού χαρακτήρα της ανάπτυξης Ιωάννης Σ. Βαβούρας, Πάντειο Πανεπιστήμιο.

ABSTRACT Sustainable development, the basic social, economic and ecological strategy of the late 20th century at the national and international level, is gradually giving its place to green growth. This change is associated with important socioeconomic adjustments. We argue that although green growth has moved away from the one-dimensional concept of economic growth, by incorporating the environmental dimension, apart from the economic one, at the same time it neglects the social aspect that constitutes the third dimension of sustainable development. Therefore, the widely proposed in recent years green growth strategy could be characterized as a major social drawback.

ΠΕΡIΛΗΨΗ Η βιώσιμη ανάπτυξη, η βασική κοινωνική, οικονομική και οικολογική στρατηγική του 20ου αιώνα σε εθνικό και διεθνές επίπεδο, αντικαθίσταται σταδιακά από την πράσινη μεγέθυνση, αλλαγή η οποία συνδέεται με τη σειρά της με σημαντικές κοινωνικο-οικονομικές προσαρμογές. Υποστηρίζουμε ότι, παρά την απομάκρυνση της πράσινης μεγέθυνσης από τη μονο-διάστατη έννοια της οικονομικής μεγέθυνσης, μέσω της ενσωμάτωσης της περιβαλλοντικής διάστασης, η στρατηγική αυτή ταυτόχρονα αγνοεί την κοινωνική διάσταση η οποία αποτελεί την τρίτη διάσταση της βιώσιμης ανάπτυξης. Ως εκ τούτου, η ευρέως προτεινόμενη στρατηγική της πράσινης μεγέθυνσης θα μπορούσε να χαρακτηριστεί ως σημαντική κοινωνική οπισθοχώρηση.

KEY WORDS: Sustainable development, green growth, environment, ecology.

ΛΕΞΕΙΣ-ΚΛΕΙΔΙΑ: Βιώσιμη ανάπτυξη, πράσινη μεγέθυνση, περιβάλλον, οικολογία.

1. Introduction

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he systematic comparison of the strategies of green growth and sustainable development that is the basic objective of the present paper requires the careful distinction between the concepts of “economic growth” and “economic development” that underlie them. We begin therefore our analysis by defining the two terms. The term “economic growth” simply expresses the expansion of production over time or the increase in the economy’s real output and the income it generates. Given that gross domestic

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product (GDP) is the measure of a country’s overall output, the term “economic growth” can be defined as the rate at which total or per capita real GDP is increasing over time. The growth rate of total real GDP expresses the extent of the increase in the overall output of the economy, whereas the growth rate of per capita GDP expresses very generally how much the averageincome person’s financial well-being has improved. It is noted that GDP is the total value of goods and services produced within a country during a given period of time, usually a calendar year, by all factors of production. The term “economic development” has a broader meaning and expresses the increase in social welfare. It presupposes not only an increase in real output but also that this increase is combined with significant reforms in the structure of the economy and the distribution of real output. In other words, economic development is associated with significant changes in the institutional and technological framework within which real output is produced and distributed. We must point out that economic growth is a necessary, but not a sufficient condition to ensure economic development, which reflects the age-old struggle of humans to improve their wellbeing. The most important structural changes with which economic development is associated are: the diminishing share of the agricultural sector and the growing share of industry (especially manufacturing) and services; the introduction of more efficient production techniques; the upgrading of skills; improvements in the quality of life and distribution of income; and the entire population’s participation in the process of economic development. Thus, although economic growth means “reproduction”, or the expansion of overall production, economic development means economic and social “transformation”. Therefore, whereas economic growth is limited to a quantitative dimension, economic development has a qualitative dimension in addition to the quantitative one. More formally, in contrast to economic growth – which is a one-dimensional process in the sense that it is investigated on the basis of just one criterion, i.e. increased real GDP – economic development is a multi-dimensional process associated with significant changes in the structure of the economy, in the social structure, in the quality of production factors, in the habits of individuals and in institutions, as well as with limiting the unequal distribution of income.

2. The issue of sustainable development

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he issue of “sustainable development” acquired a broader meaning and was recognized as a global objective in 1987 by the UN’s World Commission on Environment and Development in its report entitled “Our Common Future”, usually referred to as “the Brundtland Commission Report” or simply “Brundtland Report” that became highly influential. However, as an idea sustainable development had already been espoused in 1980 by some international organizations or programs namely the International Union for the Conservation of Nature in its World Conservation Strategy,1 the World Wildlife Fund and the United Nations Environmental Programme (Pearce, Barbier and Markandya, 1980: ix), in an effort to combine economic development with the preservation of the environment. The United Nations Conference on Environment and Development held in Rio de Janeiro in 1992 adopted the “Rio Declaration on Environment and Development”, which defined sustainable development as the development that “meets the needs of the present generation without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987: 43) and promoted sustainable development as a global ideal

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of sustained social well-being across generations and a basic concept embodying three components: social, economic and environmental. It was acknowledged that ignorance of the interactions between nature, economy and society was the main reason for large-scale policy failures with respect to both the environment and development. At the same time, the actions that needed to be taken to achieve the goals of sustainable development were outlined. Its Action Plan “Agenda 21” contained guidelines for setting up decision-making structures aimed at the sustainability in the belief that an integrated system of environmental and economic accounting would constitute a first step in the direction of incorporating sustainability into the management of the economy. At the same time a Commission on Sustainable Development was established (UN, 1993). A significant global milestone with respect to sustainable development as global strategy was the Johannesburg Summit in 2002, called the World Summit on Sustainable Development which, a decade after Rio, reconfirmed the three fundamental dimensions or components of sustainable development: economic, environmental and social.2 The economic component focuses mainly on ensuring constant economic growth, in turn regarded as necessary for the continuous improvement of social well-being. The environmental component concerns primarily the respect for the limits of the ecosystem in order to maintain its stable productive base, ensure the protection and quality of natural resources so that they are not over-exploited or their quality is diminished, and safeguard biodiversity. The social component chiefly focuses on ensuring inter and intra generational equality, social integration and cohesion, civic participation, social mobility and respect for cultural diversities. The definition of the concept of sustainable development adopted in 1992 is obviously not a rigorous one. On the contrary, it is very broad and rather human-centered, in the sense that although reference is made to human needs, these remain undefined, while no specific environmental or social dimensions of sustainability are set out clearly. In particular, it ignores the limitations imposed by technology and social organization on the ability of the environment to cover present and future human needs. Right from the start, however, the multidimensional nature of sustainability was recognized and the fact that it cannot be measured with a single indicator. The UN Commission on Sustainable Development formulated a large number of sustainable development indicators, which fall into four groups: economic, social, environmental and institutional (UN, 2001). At the same time, it acknowledged that the economic dimension of development is the “means” for serving its social dimension, which is the “aim” of sustainable development, whereas the environmental dimension of development is the “basis” of sustainable development. This acknowledgement is obviously of high social importance. The indicators of sustainable development, as formulated by the Commission on Sustainable Development, provide some arithmetically expressed indices of the various aspects of sustainable development. However, even if it is agreed that these indicators are important, in the sense that they provide satisfactory approaches to the varying aspects of the phenomenon of sustainability, the measurement of sustainable development continues to constitute an extremely difficult undertaking. This occurs because the various individual indicators cannot be aggregated to give us one sole sustainability index based on a single criterion or even just a few. The problem is complicated by the fact that the partial indicators do not have the same socio-economic significance for all countries, so that questions arise of weighting them. Even Agenda 21 is regarded as constituting a political text, rather than a technical guideline (Purvis and Grainger, 2004: 7). Owing to the lack of a broader agreement over the precise meaning of the term sustainable development and to all the above difficulties, assessing the sustainability of development to this

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day presents many problems and weaknesses and is necessarily based on value judgments. In this regard, in an effort to incorporate certain aspects of sustainability, some composite indexes have been formulated, such as the Human Development Index, the Environmental Sustainability Index, the Index of Sustainable Economic Welfare, the Ecological Footprint and the Genuine Progress Indicator. However, even these indexes have been heavily criticized. The basic points on which these composite indexes are criticized include the arbitrary selection and weighting of their individual indicators and the arbitrary estimation of their figures. Yet we must admit that despite all its imperfections, sustainable development has raised issues with respect to limitations or “morality” of development, which the traditional theory of economic growth, as well as the economic policy implemented by governments, had hitherto usually ignored, while the governments of both developing and developed countries previously pursued the unlimited economic growth strategy. Gradually it began to be recognized that the unlimited increase of the overall output could disrupt the balance in the relations between man and the environment and that for this reason their economic policy models had to be altered, mainly by incorporating the environmental dimension. However, it should not be ignored that sustainability itself is a dynamic concept. Even if an economy satisfies the sustainability criterion today, it might not do so in the future, if the scale of the particular economy becomes too large relative to the natural capital base of the economy (Dasgupta, 2007: 5).

3. The issue of green growth

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t the level of international organizations, the green growth approach was first adopted by the 5th Ministerial Conference on Environment and Development in Asia and the Pacific of the Economic and Social Commission for Asia and the Pacific of the United Nations Economic and Social Council, held in Seoul in March 2005 (UNESCAP, 2005). The Conference recognized that Asia and the Pacific constitute a region that, in recent decades, experienced the highest worldwide rates of economic growth and that these rates exert ever increasing pressures on the assumed capabilities of the member-states’ regional environment, constituting a very serious challenge to its environmental sustainability. At the same time the view was expressed that only through economic growth could poverty be eliminated in this particular region. Thus the region’s most significant requirement, according to the Conference, was to aim for economic growth in an environmentally sustainable manner, without exerting undue pressure on these countries’ environmental capabilities, or jeopardizing their environmental sustainability (UNESCAP, 2005: 1). With a view to avoiding the errors of the traditional model of non-sustainable economic growth that the region’s member states had pursued in the past, that could be succinctly summarized as: “Grow first, clean up later”, the Conference declared that one of the most urgent issues in the region was to explore a model of environmentally sustainable economic growth, which the Ministerial Declaration referred to as “green growth” (UNESCAP, 2005: 4). It was proclaimed that green growth would provide a win-win solution for the environment and the economy alike, giving special emphasis to improving environmental sustainability, a goal that would be achieved by (UNESCAP, 2005: 4-5): (a) Limiting the environmental pressures caused by economic growth, mainly by improving ecological efficiency (eco-efficiency), incorporating the environmental cost in market prices and improving environmental sustainability of production and consumption. (b) Improving the environmental performance of the member states and other

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interested parties, mainly by introducing a “green” accounting system and ecological taxes (through which the tax burden would be transferred from ecologically beneficial activities to those that pollute and fail to use resources efficiently), as well as by the proper management of natural resources and wastes. (c) Promoting collaboration and reciprocally enhanced relations between the environment and the economy, primarily by exploiting the opportunities provided by the market for environmental investments in infrastructures, in the environment industry, in environmentally acceptable technologies and in environmentally-friendly goods and services. From the above analysis it is understood that green growth comes through increasing the ecoefficiency of consumption and production and creating a synergy between the economy and the environment (Chung and Lee, 2005: 2). Four years later, in June 2009, the Ministerial Council Meeting of the OECD’s member states3 signed the “Declaration on Green Growth”.4 In the belief that recovery from the global financial crisis of 2007-2008 required a strategy for economic growth different from the one followed in the past, the OECD countries declared that they would step up their efforts to implement green growth strategies, recognizing that the concepts of “green” and “growth” are not mutually conflicting but can on the contrary be compatible. They further declared that they would encourage “green” investments and the sustainable management of natural resources (OECD, 2009a: 1). “Green” investments would contribute to economic recovery in the short term and would help create the environmentally friendly infrastructures required to achieve a “green” economy in the long term, in the conviction that public investments should be consistent with the strategy of sustainable growth. The OECD attaches enormous significance to “green” investments, and recognizes that the term “green growth” signifies that investments in the environment constitute a new source of economic growth (OECD, 2009b: 1). In addition, the signatories to the Declaration called upon non-OECD member states, the private sector, civil society and other international organizations to collaborate closely with OECD by complying with the Declaration, and at the same time asked OECD to work out a “Green Growth Strategy” (OECD, 2009a: 2). This strategy would quantify the potential effects of green growth and estimate the cost of implementing the transition to a sustainable economy, on both the national and supranational level. The basic aim of the strategy was to promote a new comprehensive model for green growth.5 In general, the Green Growth Strategy would (OECD, 2009b: 2): (a) Develop a new framework for growth accounting that would take explicitly into consideration the repercussions of economic growth on the environment and human welfare. (b) Provide specific means and policy proposals to assist governments to fine-tune policies that would contribute to the more effective transition to a sustainable economy. (c) Examine the ways in which OECD member states could support green growth in emerging economies and developing countries. (d) Investigate the opportunities for creating employment, emphasizing the jobs that would be created by green growth. From the above brief historical review, it can be concluded that the concept of green growth was initially developed for a specific region of the world, a large part of which in the period after 1965 witnessed rates of economic growth that no other region on earth had ever experienced. Researchers and international organizations alike hastened to describe these countries –based on an economic policy of unlimited economic growth oriented towards exports, mainly of industrial products (initially labour-intensive) – as the countries of the East Asian “miracle”.6 In the economy, however, it seems that miracles do not happen. It is recognized today by these same countries that the constantly high economic growth rates that once constituted their primary policy objective,

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now exert steadily increasing pressures on their environmental capabilities and constitute a very serious challenge to their environmental sustainability, thus obliging them to abandon traditional economic growth models and turn to models of environmentally sustainable economic growth. We should not omit however at this point to refer to Young’s prophetic article who as early as in 1995 showed that the high economic growth of the East Asian countries should be mainly attributed to the dramatic rise in factor inputs than to total factor productivity growth (Young, 1995). Then, as a way out of the financial crisis of 2007-2008, the issue of green growth was adopted by the OECD member states which include most of the economically developed countries of the world, such as the United States, Japan, Germany, France and Canada. That happened in the belief that the effort to recover from the crisis demanded an economic development strategy different from what these countries had pursued in the past. United States played a leading role to the advancement of the green growth strategy. The “Green Recovery” (Pollin et al., 2008) is the most prominent relevant country level released report showing that the United States could create two million jobs by investing in a rapid green economic recovery program that would strengthen the economy.

4. Observations, comparisons and conclusions

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rom the preceded analysis it is evident that green growth is based on the strategic selection of an economic growth model, taking into account certain environmental aspects. It is a concept invented to overcome the trade-off between economic growth and environmental conservation (Mori and Ueto, 2007: 1). It could thus be argued that green growth has moved away from the one-dimensional concept of economic growth, since in addition to the economic dimension, it incorporates the environmental one as well. At the same time, however, it neglects the social dimension that constitutes the third component of sustainable development. In fact, if we recall that the UN Commission on Sustainable Development noted that the economic dimension of development was the “means” for serving its social dimension, which it considered the “aim” of sustainable development, with the environmental one as “basis” for sustainable development, it is evident that in the effort to reconcile the “means” with the “basis”, the “aim” of sustainability has been neglected. It should be pointed out that sometimes, in the context of the green growth strategy, the view has been expressed that some social goals are served indirectly, in particular the goal of combating poverty, since it is accepted that the increase in the real per capita income, with which economic growth is linked, helps curb absolute poverty. But this cannot be taken for granted, since the high economic growth rates shown by various developing countries have not led to the elimination of poverty. Indeed it has been argued by international organizations, especially by the United Nations Development Programme and the World Bank, that to deal effectively with the problem of poverty, economic growth must be specifically oriented toward the poor (pro-poor growth).7 At this point arises the issue of defining the term “pro-poor growth”. In its most prevalent definition, economic growth is in favour of the poor if it benefits the poor more than the non-poor. Empirical research seems to indicate however that, in most cases, economic growth tends to work against rather than in favour of the poor. Traditional economic growth policies with emphasis on capital-intensive production methods, on replacing imports and on non-balanced economic growth (favoring the urban sector), as a general rule have not to date contributed significantly to

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combating poverty. Major declines in economic activity, as a result of intense economic disruption, can lead to greater inequalities in the distribution of income and to absolute poverty, which will then be extremely difficult, if not impossible, to curb effectively, at least for a long period of time, until the economy begins to pull out of the recession and enters the stage of recovery. The most basic argument that has been used in favour of abandoning sustainable development in favour of green growth is that sustainable development so far remains a general concept without specific substance. In 2006, in a text from the Economic and Social Commission for Asia and the Pacific, the view was expressed that, although more than ten years had elapsed since the international community had espoused sustainable development, and after many international conferences had been held, some investigation should be made of the degree to which sustainable development had played a part in protecting the planet. This view argued that the term constituted no more than a fine rhetorical ruse that was used to reconcile manifestly conflicting interests (UNESCAP, 2006: 7). Also in 2008 the Executive Secretary of the Economic and Social Commission for Asia and the Pacific stated that the participants in the 5th Ministerial Conference on the Environment and Development in March of 2005 in Seoul, agreed to move beyond the rhetoric of sustainable development and follow the path of green growth (UNESCAP, 2008). Although focusing our investigation on the direct links between economic activity and the environment may to some degree facilitate measurements and improve comparisons, as it concentrates on the environmental sustainability of economic growth, significant social dimensions of sustainable development, such as health and income distribution, are abandoned.8 We admit that incorporating environmental repercussions into the cost and benefit of economic activities is not an easy task. Estimates cannot fail to be largely based on value judgments, since the analysis of the social costs and benefits of economic activities is among the most controversial subjects in the field of economics, and the core of a methodology known as “social cost-benefit analysis”. Indeed there does not appear to be any agreement among economists and environmentalists, not even regarding the concept of sustainability, as the former focus on “economic sustainability” whereas the latter focus on “ecological sustainability”.9 Efforts have of course been made by international organizations to incorporate economic and ecological sustainability into the systems of national accounts, so that the physical or monetary aspect of sustainability can be measured,10 but with limited success until now.11 In view of the above analysis we have to conclude by arguing that green growth has evolved as a strategy that isolates the economic and environmental dimensions of development. It largely remains a political slogan that has not evolved into a strictly defined concept suitable for shaping and evaluating policies that in any event cannot be comprehensive for the additional reason that the social dimension of development is consciously ignored.

Notes * An earlier version of the paper was delivered to the Conference Copenhagen 2009: The Environment in the Maelstrom of a Global Crisis held at the Panteion University, Athens, 26-27 February 2010, by the European Centre for Environmental Research and Training. The author expresses his thanks to Dr Marina Angelaki for her helpful comments. 1. See in this regard the International Union for the Conservation of Nature (World Conservation Union) (1980), in which it is pointed out that for development to be sustainable it must take into account social and ecological factors, as well as economic.

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2. See paragraph 8 of the Political Declaration on Sustainable Development, Johannesburg 2002 in UN (2002). 3. In which representatives of Chile, Estonia, Israel, Slovenia and the European Union also took part. 4. See OECD (2009a). This Declaration was signed by: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, the United States and the European Community. 5. See in this regard OECD (2009b: 2). 6. See e.g. World Bank (1993). 7. See, for example, UNDP (2007). 8. See Encyclopedia of Earth, “Measuring sustainable economic growth and development”, http://www.eoearth.org. 9. See Encyclopedia of Earth, “Measuring sustainable economic growth and development”, http://www.eoearth.org. 10. See in particular the United Nations System of Integrated Environmental and Economic Accounting (SEEA, 2003). 11. See for example various papers in Ecological Economics (2007: 589-724).

Bibliographical references Chung R.K. and Lee H.-H. (2005), Towards Environmentally Sustainable Economic Growth (Green Growth) in Asia and the Pacific, UNESCAP (www. unescap.org). Ecological Economics (2007), Special Issue on Environmental Accounting, vol. 61, no. 4, pp. 589724. Encyclopedia of Earth, “Measuring Sustainable Economic Growth and Development”, http:// www.eoearth.org. Dasgupta P. (2007), “Measuring Sustainable Development: Theory and Application”, Asian Development Review, vol. 24, no. 1, pp. 1-10. International Union for the Conservation of Nature (World Conservation Union 1980), World Conservation Strategy, Gland, Switzerland. Mori A. and Ueta K. (2007), “Beyond Green Growth: Sustainable Development in East Asia“, Discussion Paper no. 132, Kyoto University. OECD (2009a), Declaration on Green Growth, (C/MIN(2009)5/ADDI/FINAL). OECD (2009b), OECD and Green Growth. Pearce D., Barbier E. and Markandya A. (1990), Sustainable Development: Economics and Environment in the Third World, Edward Elgar, London. Pollin R. et al. (2008), Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy, Center of American Progress, Political Economy Research Institute, University of Massachusetts-Amherst. Purvis M. and Grainger A. (eds) (2004), Exploring Sustainable Development: Geographical Perspectives, Earthcan, London.

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UN (1993), Department of Economic and Social Affairs, Division for Sustainable Development, Earth Summit, Agenda 21, The United Nations Programme of Action from Rio. UN (2002), Department of Economic and Social Affairs, Global Challenge, Global Opportunity: Trends in Sustainable Development, The World Summit on Sustainable Development, Johannesburg. UN (2001), Department of Economic and Social Affairs, Division of Sustainable Development, Indicators of Sustainable Development: Guidelines and Methodologies, New York. UN Economic and Social Commission for Asia and the Pacific (UNESCAP) (2005), Annotated Provisional Agenda, E/ESCAP/SO/MSCED(05)/L.2, January. UN Economic and Social Commission for Asia and the Pacific (UNESCAP) (2006), Green Growth at a Glance: The Way Forward for Asia and the Pacific. UN Economic and Social Commission for Asia and the Pacific (UNESCAP) (2008), Greening Growth in Asia and the Pacific. United Nations Development Programme (UNDP), International Poverty Centre (2007), “Analyzing and Achieving Pro-Poor Growth”, Poverty in Focus, March. Young A. (1995), “The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience”, Quarterly Journal of Economics, vol. 110, pp. 641-680. World Bank (1993), The East Asian Miracle: Growth and Public Policy, Oxford University Press, Washington D.C. World Commission on Environment and Development (1987), Our Common Future, Oxford University Press, Oxford.

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