Breaking the Loop to Close the Loop: A Thematic Synthesis of Social Barriers and the Legal-Policy Landscape Shaping Circular Business Models in Bangladesh

Abstract

Circular business models (CBMs) are increasingly promoted as a means of balancing industrial growth with resource and environmental constraints, yet their adoption in lower-middle-income economies remains limited. This review synthesizes scholarly and policy literature on the social barriers and legal-policy conditions influencing CBM adoption in Bangladesh, where export-oriented manufacturing, extensive informal recovery networks, and growing environmental pressures make circular economy (CE) transition particularly urgent. Drawing on institutional theory and the multi-level perspective, the study examines how socio-cultural and regulatory factors interact across regulative, normative, and cultural-cognitive dimensions. Three themes emerge. First, socio-cultural and market barriers include price-sensitive consumption patterns, low trust in secondary materials, perceptions linking status to new products, and limited community participation. Second, the regulatory framework is relatively extensive but remains fragmented, punitive, and weakly enforced, illustrated by implementation gaps in key waste management regulations. Third, a socio-institutional lock-in loop is identified, where regulatory uncertainty, delayed investment, weak market demand, and the marginalization of informal actors reinforce one another. The review develops six propositions explaining these reinforcing mechanisms, reframes informality as an institutional order rather than a residual category, and positions Bangladesh within the broader trajectory of South Asian CE research. A sequenced transition pathway is proposed that aligns institutional reform with industrial competitiveness and emerging international circularity requirements. The study explains why circular transitions stall and identifies practical pathways for accelerating change.