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Think of a bumblebee. With its overly heavy body and little wings, supposedly it should not be able to fly--but it does.... This is how so-called analysts view the Swedish economy. We 'defy gravity.' We have high taxes and a large public sector, and yet, Sweden reaches new heights. We are still flying, so well that many envy us for it today. --Goran Persson, Swedish Prime Minister, March 10, 2000 (1) Many mainstream economists have been predicting the demise of the Swedish model of social democratic capitalism for decades. But the Swedish welfare state, while slightly smaller in scope than it once was, is still largely intact. Furthermore, the Swedish economy has outperformed that of the United States and most OECD (Organization for Economic Co-operation and Development) countries for the past decade (see Table 1). So the question arises, why is the Swedish bumblebee still flying? Indeed, why is it soaring despite the opinions of so many observers that it is doomed to fail? The argument that the Swedish model was doomed to failure rested on two ideological artifices. The first was a simplistic application of the theory of comparative advantage. This theory implies that exogenously determined resource endowments and factor costs are the primary determinants of trade flows and the location of production. Second, critics tended to assume that government intervention is inherently inefficient relative to the wonders of the market system, and in an era of globalization, countries must reduce the size and scope of government to compete internationally. The Swedish resurgence in the last decade indicates that there are serious flaws with this analysis. A more sophisticated explanation of the forces determining the location of production can be provided by the theory of comparative institutional advantage. This theory seeks to go beyond standard analysis to consider the institutional factors that better explain trade patterns. Part of this explanation includes the fact that

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This book addresses the problem of how to make a large-scale socio-technical transition to renewable energy, so as to realize an environmentally sustainable economy in the long run. Transition thinking has in a short time managed to occupy a central position in the policy debate on sustainable development. The transition approach offers an innovative view on the role and content of public policy, compared with traditional views from economic, administrative and political sciences. The main motivation for using this notion is that while it links up with the system-wide approach of sustainable development, it has the advantage of shifting the attention from a vague end goal (blueprint) to the processes leading towards this goal. These processes in turn provide a concrete basis for thinking about appropriate public policies, taking account of the complex relations between technologies, institutions and behaviours. This book offers perspectives from a wide range of disciplines, addressing macro, regional and local scales. Contributions come from mainstream economics, evolutionary economics, sociology, political sciences, innovation studies, spatial economics and decision theory. Important lessons are also drawn from historical transitions. Managing the Transition to Renewable Energy will appeal to academics and researchers in environmental science and economics, environmental and technological policy advisors, evolutionary economists and researchers on technological innovation