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Complexity and the Art of Public Policy

Complexity and the Art of Public Policy: Solving Society's Problems from the Bottom Up

Copyright Date: 2014
Pages: 320
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  • Book Info
    Complexity and the Art of Public Policy
    Book Description:

    Complexity science-made possible by modern analytical and computational advances-is changing the way we think about social systems and social theory. Unfortunately, economists' policy models have not kept up and are stuck in either a market fundamentalist or government control narrative. While these standard narratives are useful in some cases, they are damaging in others, directing thinking away from creative, innovative policy solutions.Complexity and the Art of Public Policyoutlines a new, more flexible policy narrative, which envisions society as a complex evolving system that is uncontrollable but can be influenced.

    David Colander and Roland Kupers describe how economists and society became locked into the current policy framework, and lay out fresh alternatives for framing policy questions. Offering original solutions to stubborn problems, the complexity narrative builds on broader philosophical traditions, such as those in the work of John Stuart Mill, to suggest initiatives that the authors call "activist laissez-faire" policies. Colander and Kupers develop innovative bottom-up solutions that, through new institutional structures such as for-benefit corporations, channel individuals' social instincts into solving societal problems, making profits a tool for change rather than a goal. They argue that a central role for government in this complexity framework is to foster an ecostructure within which diverse forms of social entrepreneurship can emerge and blossom.

    eISBN: 978-1-4008-5013-6
    Subjects: Economics, Political Science

Table of Contents


    • CHAPTER 1 Twin Peaks
      (pp. 3-18)

      Traveling from Amsterdam to Johannesburg on business, one of us settled into his seat and opened up theEconomistmagazine. Because of the mountainous terrain below, he knew that the flight would likely be rough, as the hot air from the plains rose above the mountainous terrain below and slammed into the colder upper layers of the atmosphere. Luckily, this flight was smooth as the pilots were outrunning the turbulence. Settling back into his seat he started reading an article² about the other’s work:

      In 1996, David Colander of Middlebury College, in Vermont, expressed his dissatisfaction with decades of economics...

    • CHAPTER 2 Government With, Not Versus, the Market
      (pp. 19-30)

      When you drive into the town of Drachten in the Netherlands, you will see a major intersection with no traffic lights, no sidewalks, no stop signs, no police directing traffic. Given this lack of control, you might expect to see chaos, but you don’t. Instead, you see traffic flowing normally, sometimes a bit slower than that in other cities, but on average a bit faster. You also see fewer accidents, and fewer overall problems than in most similar-sized intersections. Voilà, there we have it—a demonstration of how life can be improved by just getting rid of government.

      This is...

    • CHAPTER 3 I Pencil Revisited: Beyond Market Fundamentalism
      (pp. 31-43)

      People who believe in the free market are generally much closer to a complexity frame than are those who primarily put their faith in governmental planning and control. In fact complexity may well often be loosely equated with pure laissez-faire, but complexity includes government, seeing it not as planner or controller, but as a natural partner with existing institutions in a search for useful parameters of action. We have called this joint search an “activist laissez-faire” policy. While the terms “activist laissez-faire” and “laissez-faire” may look similar in the standard policy frame, they are quite different in terms of how...

    • CHAPTER 4 The Complexity Policy Frame
      (pp. 44-64)

      Now that we’ve described the market fundamentalist and the state control policy frames, we’re ready to spell out the complexity policy frame in more detail. The first thing to note about the complexity policy frame is that whereas the market fundamentalist and the state control model arrived at simple definitive answers to policy, the complexity policy frame does not. It is not able to tell you one policy is theoretically better than another policy. It sees policy as having no set theoretical answer. It is a frame that gets guidance from theory, but does not prescribe definitive answers. Policy decisions...


    • CHAPTER 5 How Economics Lost the Complexity Vision
      (pp. 67-88)

      InThe Worldly PhilosophersRobert Heilbroner tells a story of a dinner John Maynard Keynes had with Max Planck, the physicist who was responsible for the development of quantum mechanics. Planck turned to Keynes and told him that he had once considered going into economics himself, but he decided against it—it was too hard. Keynes repeated this story with relish to a friend back at Cambridge. “Why, that’s odd,” said the friend. “Bertrand Russell was telling me just the other day that he’d also thought about going into economics. But he decided it was too easy.” That story captures...

    • CHAPTER 6 How Macroeconomics Lost the Complexity Vision
      (pp. 89-108)

      Last chapter we told the story of how economics lost complexity. That story wasn’t complete because it was restricted to one branch of economics—microeconomics. There is another branch of economics—macroeconomics—and in this chapter we tell the story of how macroeconomics developed as a separate field in an attempt to add aspects of complexity to the standard model with the aim of improving policy advice, but how those aspects of complexity were quickly lost it again. Instead of dealing with the macro economy as a complex system, macro economists focused on dottingis and crossingts. Going back...

    • CHAPTER 7 Complexity: A New Kind of Science?
      (pp. 109-130)

      While economics was retreating from a Classical way of thinking that included many elements of complexity, other branches of science were moving in the opposite direction—recognizing the interconnectedness of complex systems and starting to deal with it. In physics quantum mechanics was discovered; in mathematics there were discoveries of fractal geometry and advances in nonlinear dynamics; in biology, researchers developed a deeper understanding of ecosystems. But arguably the largest difference in science was caused by the computer revolution. As University of Wisconsin economist Buz Brock once told us, think of how your driving habits would change if a Ferrari’s...

    • CHAPTER 8 A New Kind of Complexity Economics?
      (pp. 131-155)

      While Stephen Wolfram was pursuing his fiercely independent path, in 1986 a number of eminent scientists, such as physicists Murray Gell Mann and David Pines and chemist George Cowan, founded the Santa Fe Institute. These were not intellectual lightweights; they were all eminent scholars, several of them Nobel laureates. For example, Murray Gell Mann’s brilliance in many ways matched Wolfram’s. He was an equally precocious child, entering Yale at fifteen, and he made essential contributions to quantum physics at a young age. A polymath, he named the elementary particles that he identified “quarks,” after a reference in James Joyce’sFinnegan’s...

    • CHAPTER 9 Nudging toward a Complexity Policy Frame
      (pp. 156-176)

      Economics has both a policy branch and a scientific branch. In the last chapter we discussed the interface of complexity with the theoretical sphere of economics. In this chapter we discuss the interface of complexity with the policy sphere of economics.

      The argument we are making in this book is that accepting a complexity vision of the economy changes the way one thinks of economic policy—not in a marginal way through changes at the edges, but in a fundamental way—the vision one has of the role of government, the role of the market, and how government interacts with...


    • CHAPTER 10 The Economics of Influence
      (pp. 179-194)

      Even as the cutting edge of economics is integrating complexity into its thinking, most economists still fall back on the standard model when thinking about economic policy. In figure 1, they see only the vase, not the profiles of the figures. This means that policy makers fall back on the standard policy frame as well. This is lamentable, but understandable. It is lamentable because it prevents the new complexity policy frame and the bold initiatives, which the new complexity frame opens up, from being explored. It is understandable because evolutionary forces have created a natural conservatism in framing issues. The...

    • CHAPTER 11 Implementing Influence Policy
      (pp. 195-213)

      Policy is about trying to achieve some goal—whether big hairy audacious goals for societies’ welfare or a better way of managing traffic.² In any case the goals of complexity policy are the same as those the standard policy model should have. We say “should have” because the standard economic policy frame has become overwhelming connected with a single goal—maximizing aggregate output as measured by GDP. As we discussed, that connection is not inherently part of the standard policy frame; it is just a shortcut, which if one includes all the caveats to it that all the originators included,...

    • CHAPTER 12 Laissez-Faire Activism
      (pp. 214-236)

      The Prussian army was one of the most successful fighting forces in history. Stephen Bungay, a British military historian, explains its success through its bottom-up leadership structure. It was a structure that had few but purposeful rules and minimal interventions from the top. He relates the story of the three leadership rules of the Prussian army:¹

      1. A commanding officer should always give an order for an outcome, never for an action. This leads the person receiving the order to reflect on and interpret it with all his prior knowledge and in its relevant context.

      2. The subordinate officer receiving...

    • CHAPTER 13 Getting the Ecostructure of Government Right
      (pp. 237-256)

      The last chapter described an ecostructure policy that was designed to expand bottom-up social policy, making society able to achieve its social goals without having to use direct government policy. In many ways the greater the amount of direct government intervention, the less successful the system has been in getting the bottom-up ecostructure right. This is the insight that market fundamentalists emphasize. What they miss, in our view, is that people have social goals, and they need some way to achieve those social goals. Achieving social goals is part of having a good life. To the degree that the existing...


    • CHAPTER 14 Getting the Ecostructure of Social Science Education Right
      (pp. 259-269)

      Ultimately, education is the way society replicates thinking, and the best way to change a system is to change it replicator dynamics early on, before a frame becomes more engrained. So in the long term, social policy is, in large part, shaped not in the halls of Congress but in the classrooms around the country where policy makers, academics, and the general public receive their training, and where they have embedded in them the policy frame they use. Small changes at this embryonic policy stage are likely to have much larger and more substantial effects than much larger changes at...

    • CHAPTER 15 The Lost Agenda
      (pp. 270-280)

      We began this book with a twin peaks metaphor: When you have climbed a mountain looking for the highest peak, only to discover that there are higher mountains off in the distance, you will have to make it down first, before starting up the new mountain. And to reach the top of the new mountain, you will likely have to adopt new techniques and methods. This book has been a discussion of those new techniques and methods to address the societal challenges we face. These new approaches change the way policy is framed. The book is an attempt to provide...