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

Colander, David and Kupers, Roland
Princeton University Press: Princeton, NJ, 2014
ISBN 9781400850136 (pb)

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Reviewed by Flaminio Squazzoni
Department of Economics and Management, University of Brescia, Italy

Cover of book This is a must read for anyone interested in understanding the potential of a complexity approach for public and economic policy. It includes four parts that illustrate the complexity policy frame, explore its foundations, discuss the new role of government and lay down a path to the future. It is intellectually stimulating and might inspire new research and applications of social simulation as a policy modelling tool.

The first part is addressed to spell out what is a complexity policy. It also includes a short introduction to complexity science. Chap. 1 presents a new policy narrative that draws on the idea of viewing societies and markets as complex evolving systems, beyond the control of anyone, including government. It argues that policy must start from recognising that there is no ultimate compass other than a highly educated common sense, in which models can provide at best only half-truths. It aims to criticise the over-confidence of policy makers and the public opinion about the primacy of general, deterministic scientific models, which mostly depend on the rhetorical power of economics. It insists on the idea that complex social systems have their own endogenous forces, e.g., internal norms, that must be understood to be harnessed and exploited for public benefit, and that policy is not something taking place off-line, outside the systems, but a constitute part of the system behaviour (e.g., Squazzoni 2014). If this is seriously considered, the role of government is more that of working on framing people’s decisions towards a desirable outcome rather than over-imposing solutions and controlling behaviour. In this vein, Chap. 2 and 3 discuss the role of government as a “midwife, not a controller”, capable of harmonising market forces and pre-existing social norms. It includes a serious discussion about the limits of the market fundamentalism by suggesting that policy must provide social systems with an eco-structure to achieve collective benefits, which might combine top-down and bottom-up forces, rather than starting from pre-constituted external solutions based on a narrow view of human behaviour, i.e., rational choice paradigm.

The second part includes a classical overview of the limitations of economics that emphasises how economics lost sight of the complexity of economic systems by falling in love with abstract theory and mathematics. Chap. 6 touches upon the lack of foundations of macroeconomics. Chap. 7 provides a toolbox for complexity policy that revolves around classical complexity concepts, e.g., nonlinear dynamics, order and chaos, multiple equilibria, phase transitions and tipping points, networks and contagion. Chap. 8 illustrates the pillars of a complexity economics, by drawing especially on Brian Arthur’s work and presenting recent advances in economics achieved by behavioural economics, evolutionary game theory and network science. Chap. 9 reports on the “nudge” scientific and policy movement, where attempts to base policy on experimental and behavioural foundations have been made in UK and US. While this must be viewed as a great advance, the authors also correctly discuss certain limitations of the nudge approach, especially given its overconfidence on the role of government, who is typically supposed to know more than people about their own preferences, and the lack of attention to complex social dynamics, which have to do with the role of social contexts, including the fact that individuals are influenced by peers and other social pressures and not isolated atoms.

The third part presents norms policy as a means to exploit internal forces of social systems for collective benefit under the idea of “the economics of influence” and suggests measures to implement it. Chap. 11, which I found extremely stimulating, provides examples on how policy could work on social norms and reputational rewards to exploit beneficial forces that already exist in social systems. Chap. 13 illustrate what authors call “the ecostructure”, where government can lead by stepping back as steward of positive social forces.

The final part discusses the agenda for a policy change. I found it extremely valuable as it looks at certain institutional problems that revolve around the educational gap of social scientists for a complexity approach. It discusses negative implications of the historical path that divided social sciences in different disciplines, problems concerned with the traditional training of social scientists and the lack of transdisciplinary programmes. It also suggests a pars construens to reinvigorate social science that proposes a reform of the social science educational programmes, around five modules as follows: statistics and sociometrics, behavioural game theory, complexity and modelling, philosophy and methodology and a humanistic module. I agree with the authors that this is a serious problem to be tackled as soon as possible, if we want to have a social science fully equipped to respond to the global challenges that we have to cope with, from global financial crises to climate change.

To conclude, the book is an enthusiastic plea for complexity. It deserves to be read and is full of good ideas and brilliant inspirations. However, while I agree on the importance of discussing policy narrative and the intellectual framework, in many parts of the book there is a lack of concrete examples of complexity policy implementations. Reading this book, supporters of the conventional approaches could conclude that complexity is basically only an intellectual, philosophical challenge and that, when dealing with implementations and practices, conventional policy does not have any serious alternative yet. I believe that a next contribution on complexity policy should be based on a more systematic report on positive examples that could help people unfamiliar with complexity to appreciate concrete advancements that this approach can offer compared to standard policy approaches. Positive examples already exist, especially in social simulation and ICT policy research. Unfortunately, the two book’s authors forgot to look at them.

* References

SQUAZZONI, F (2014) A social science-inspired complexity policy: Beyond the mantra of incentivization. Complexity, 19 (6), pp. 5–13.

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