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Valuation of Ecosystem Services in Institutional Context

market equilibrium or a natural steady state) come
at a cost—a loss of economic efficiency or a devia-
tion from nature’s potential. Put another way, mea-
surable gains can be made by ‘‘getting the values
right.’’
There are problems with each of the assumptions
above.We believe that values—in whatever units—
emerge fromthe interaction of systems, both people
with nature and people with people, and that this is
an ongoing process. This runs counter to the view
that values and preferences are static, and it chal-
lenges the belief in commensurability. Ecologists
above all should be leery of methods that purport to
describe simple mechanisms of trade-offs between
complementary goods. If ecology is the study of
connectedness, it should rise above the science of
anonymity, alienability, and fungibility. The interac-
tion of people with nature can be informed by
ecological science that recognizes the possibility of
multiple stable states, thresholds, and self-organiza-
tion. The interaction of people is enhanced by
institutions (for example, North 1990; Hanna and
others 1996) that do not simply reduce them to
individual, independently optimizing units but pro-
vide a framework for collective decision making
(Ostrom 1990). In this article, we suggest a synthe-
sis that is based on nonlinearities and dynamic
behavior of ecosystems and ecosystemservices stress-
ing the role of adaptive institutions. But we begin
with a short discussion of how scales of space and
time in coupled ecological and social systems create
inherent complexities and uncertainty.
COMPLEXITY AND RESILIENCE OF
ECOSYSTEMS
In a world of human dominance, complex systems,
and true uncertainty, it becomes increasingly diffi-
cult to assume that there will be only negligible
feedbacks of marginal change. Ecological, eco-
nomic, and social systems are so interwoven that
local and incremental actions may accumulate and
multiply into regional and global surprises. The
tyranny of small decisions may become instead the
rule, that is, that many locally rational choices will
create synergistic impacts that may spill over into
other areas, a phenomenon increasingly observed
inmany countries. The presence of threshold effects
and irreversibilities in life-support systems is a
warning against relying solely on consumer prefer-
ences as the basis for value. In situations where
ecosystems are losing ecological resilience (the
amount of disturbance that a system can absorb
without changing stability domains, sensu Holling
1973), it may even be irrational in decision making

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