The tragedy of the time horizon

June 2023

The ‘tragedy of the commons’ is a widely understood concept. It refers to a situation where individuals, acting in their own self-interest, deplete or exploit a shared resource, leading to its degradation, despite the negative consequences for everyone involved. It highlights the conflict between individual and collective interests when managing common resources.

Adding a temporal component to this concept to reflect our responsibilities for the future or even for future generations, we arrive at the ‘tragedy of the time horizon’. It refers to a situation where entrenched short-termism undermines our ability to make decisions with long-term benefits. In parts this is also described as presentism, which often results in political and social myopia, with short-sighted decisions that prioritise current generations over future ones, who will be more affected by current decisions.

In today's fast-paced world, instant gratification and quick results dominate our lives. We are rather impatient and want it all and want it now. This threatens our ability to make decisions with long-term benefits. As individuals, organisations and societies, we must recognise and address this inherent bias towards immediate gains to ensure a sustainable and prosperous future for ourselves and generations to come.

The case of Cohesion Policy

The ‘tragedy of the time horizon’ is also visible in the context of EU Cohesion Policy. Already for a long time, it could be observed when impacts are studied and assessed shortly after the money has been invested. This despite the fact, that many investments in Cohesion Policy are about facilitating structural changes, and that it is well known that structural changes take time – sometimes even decades.

More recently, the ‘tragedy of the time horizon’ could also be observed in the employment of Cohesion Policy to respond to urgent crises, such as the pandemic or energy crisis. This led to a shift from long-term cohesion objectives and projects to short-term emergency measures.

No doubt, this was appropriate during the crises which required immediate action and a strong focus on short-term support. However, as the emergency eases it is important to refocus on long-term perspectives addressing structural change with high quality spending, otherwise Cohesion Policy risks increasing inequalities to the disadvantage of small towns and rural places. This would also increase cohesion challenges for people living in these areas.

Strengthening the long-term perspective, also calls for ambitious long-term perspectives. To use the recent crises as a chance for change and transition, it is important that Cohesion Policy programmes have clear strategic orientations and ambitious long-term perspectives. Cohesion Policy can play a crucial part in adjusting local and regional development to ‘new normals’ and start the transition towards future-wise and more cohesive socio-economic developments. This requires efforts to think long-term and identify place-specific paths towards a sustainable and inclusive vision for the area and engage with citizens, projects and financial instruments which are more complex and cumbersome.

This is a tall order, not just for Cohesion Policy, short-term thinking and short-term benefits outweigh long-term benefits, in particular when these will only materialise in another funding period or for another generation.

The urgency of short-term thinking

In the pursuit of success and profitability, many individuals and organisations tend to prioritise short-term gains over long-term sustainability. This approach is often driven by the desire for instant results. However, such short-term thinking risks to make decision in favour of short-term results – rather than long-term changes – and to neglect potential long-term consequences of our actions, impeding progress in various areas.

1. Environmental degradation. One of the most pressing global challenges we face today is environmental degradation, including the loss of biodiversity and climate change (see earlier blog post (Opens in a new window)). Short-term thinking often neglects the long-term impacts of resource depletion, pollution, and climate change. Failure to address these issues adequately results in severe consequences for future generations, including resource scarcity, biodiversity loss, and an unstable climate.

2. Economic volatility. Short-term thinking can also contribute to economic instability by disregarding long-term economic trends and their effects (see earlier blog post (Opens in a new window)). By focusing on short-term gains, we may disregard long-term investments in research, development and innovation, which are essential for sustained dynamins and growth. This may also lead to disregarding experimental actions which often are essential for innovation processes but do not guarantee success. Neglecting future economic contingencies can leave economies vulnerable to shocks, market downturns, and financial crises.

3. Social inequality. Addressing social inequalities and promoting equitable societies requires long-term vision and sustained efforts. However, short-term thinking often perpetuates inequalities by prioritising immediate gains for a few on the costs of investments in education, healthcare, and infrastructure that benefit the broader population. This myopic approach undermines social cohesion and hampers long-term societal progress.

A recent study published by DG REGIO illustrates that popular discontent has been growing in many parts of Europe (see link (Opens in a new window)). This has been partially fuelled by the fact that people feel neglected in a context of policy and economic developments striving for short term benefits. Accepting that more and more places facing development traps, and not offering answers for long-term development questions and positive future outlooks, risks increasingly to undermine our future perspectives.

Countering short-termism for long-term benefits

Recognising the importance of combating short-termism is the first step towards overcoming the ‘tragedy of the time horizon’.

As an antidote to ‘presentism’, future thinking and foresight processes allow exploring different possible and plausible futures. Although we cannot predict the future, we can definitely prepare for it. Foresight process and scenarios approaches can help to improve thinking about the future.

Thinking about how to increase resilience and future uncertainties supports decision-making in which costs and benefits are separated by very long time-lags. Furthermore, they are about intrinsically complex coupled social–ecological systems. They are also about producing global collective goods that go beyond the scope of unilateral ‘single-best efforts’ of any player.

To achieve this, we need to become better in thinking about the future. Most of all, we have to avoid becoming a ‘future fatigue’ in society. After a decade of crises in which social divisions have become stronger, it is increasingly difficult to establish a shared vision of what a positive future might look like. The future, it seems, is itself in crisis, and the ‘tragedy of the time horizon’ is just one sign of this.

Therefore, we need to stimulate discussions about a shared vision for Europe, its society and its spatial pattern, and how Europe can overcome its ‘crisis of social imagination’ and unleash  the power of imagination. Only then it will be possible to counter short-termism for long-term benefits.

by Kai Böhme