Financial crisis, governance and sustainable island futures : comparing Iceland and Newfoundland and Labrador

Abstract

Economic sustainability is integral to full-spectrum sustainability and relates to governance, social, and environmental dimensions of sustainability. Financial crises can potentially cascade out from the economic sphere and amplify issues of political legitimacy and accountability, thereby becoming political crises. We compare the 2008 Iceland banking crisis and the ongoing Newfoundland and Labrador financial crisis to identify common factors that contributed to these separate crises. Methodologically, we take a comparative case study approach, relying on a broad range of secondary sources. Drawing on theoretical concepts from crisis studies and island studies, we identify several cross-cutting factors, including a political culture of anti-reflexivity in the pre-crisis period, as well as communication gaps in crisis response. As the crises unfolded, public anger played a provocative role, especially in Iceland. Lessons from this comparative analysis can contribute to building full-spectrum sustainability for small island states and subnational island jurisdictions.