How to Plan when you don’t know what is going to happen? Redesigning aid for complex systems

They’re funny things, speaker tours. On the face of it, you go from venue to venue, churning out the same presentation – more wonk-n-roll than rock-n-roll. But you are also testing your arguments, adding slides where there are holes, deleting ones that don’t work. Before long the talk has morphed into something very different.

So where did I end up after my most recent attempt to promote FP2P in the US and Canada? The basic talk is still ‘What’s Hot and What’s Not in Development’ – the title I’ve used in UK, India, South Africa etc. But the content has evolved. In particular, the question of complex systems provoked by far the most discussion.

I started off with the infamous US military mindmap of Afghanistan. Although ridiculed at the time, the map looks like a genuine and nuanced effort to understand the country and is probably fairly typical of the complexity of power and relationships in any given country. The point is that such a system is complex, not complicated. Complicated means if you study it hard, you can predict what happens when you intervene. In contrast a complex system has so many feedback loops and uncertainties that you can never know how it will react to a stimulus (say $100m in aid, or an invasion….).

The crucial point is that most political, social and economic systems look like the map. Yet the aid business insists on pursuing a linear model of change, either explicitly, or implicitly because a ‘good’ funding application has a clear set of activities, outputs, outcomes and a MEL system that can attribute any change to the project’s activities – a highly linear approach. Other organizations – say forest fire managers, or the military, seem more able to cope with complexity, although I found out from a woman in one seminar who had served in Afghanistan that the power map was actually drawn up by a consultant, who was promptly sacked after showing the slide to General Petraeus, so maybe the soldiers aren’t so comfortable with complexity after all.

In denying complexity is obliged either to seek islands of linearity in a complex system (vaccines, bed nets), which may not always be the most useful or effective places to engage, or to lie – writing up project reports to turn the experience of ‘making it up as you go along’ that epitomises working in complex systems into the magical world of linear project implementation, ‘roll out’, ‘best practice’ and all the rest. That not only wastes a lot of staff time and energy, it also reduces the ability to learn about how to work best in complex systems.

So how should the aid system change? Overall, we need to think though ‘How to plan when you don’t know what is going to happen’ (my best effort at explaining complexity without resorting to jargon). Here are my bullet points, and brief explanations:

Fast feedback: if you don’t know what is going to happen, you have to detect changes in real time, but also have the institutions to respond to thatinformation (as was not the case recently in the Sahel).

Focus on problems, not solutions: Drawing on Matt Andrews’ work, the role of outsiders is to identify and amplify problems, but leave the search for solutions to local institutions. (At the World Bank, Shanta Devarajan pointed out the contradiction between this approach and NGOs’ preference for big, simple solutions – end land grabs, no to user fees. Ouch.)

Rules of thumb, not best practice toolkits: I am told that the US marines do not go into combat brandishing Oxfam toolkits and online resources on best practice. They operate on rules of thumb – take the high ground, stay in communications and keep moving. They improvise the rest. Aid workers on the ground operate far more like this than our project reports admit. If we were honest about it, we could have a better discussion on how to improve those rules of thumb.

Some possible approaches that spring to mind (and I would love to hear examples of others)

Work on the ‘enabling environment’ rather than specific projects: things like norms, rights or access to information

Evolutionary/Venture Capitalist approach: run multiple experiments and then zero in on what seems to be working best. Example, the Chukua Hatua project in Tanzania

Convening and Brokering: Get dissimilar local players together to find solutions – the outsiders’ job is to support that search, not do it themselves. Example, the TAJWSS water project in Tajikistan

But any attempt to move in this direction raises some fundamental challenges to the current structures of the aid industry:

Results for grown ups: The current approach to measuring results favours linearity. But rejecting results altogether is the wrong approach – both because even those who recognize the central role of complex systems still want to know if they’re doing any good, and because the results people control the cash. No results, no funding. We need to get much better at ‘counting what counts’, and reclaim the idea of ‘rigour’ for qualitative and other methods better suited to complex systems.

Who to employ? Risk-taking, entrepreneurial, maverick searcher types have a hard time in an aid business dominated by bureaucratic procedures and risk aversion. Moreover, working in complex systems requires deep local knowledge of formal and informal power maps, something expats on a two or three year posting are unlikely to acquire. How do we turn the tables to attract and retain searchers, and value locally embedded knowledge?

Short Term v Long Term: Funding and project cycles are short term, change in complex systems is often long term. How can we bridge the gap, for example by combining good, plausible stories about the short term, with more rigorous impact assessment in the long term (how often do we go back and study the effects of an intervention 10 or 20 years after the funding has ended?)

How to keep/build political support given that working in complex systems means acknowledging a lack of control over what takes place and limits to attribution (no you can’t ‘badge’ the Arab Spring as created by Oxfam, USAID or anyone else, sorry). It also means greater tolerance of failure – a venture capitalist approach means accepting 9 failed start-ups for every 1 big success, but imagine what aid critics would do with a 90% failure rate. And how do we communicate and sell this approach to the public after systematically dumbing down the aid and development story for decades? (From buy a goat and save the world, to a post-goat narrative….)

Ben Ramalingam has been thinking about this for years, and writing about it on his Aid on the Edge of Chaos blog. His book of the same name is due out later this year, so let’s hope it can settle a lot of these issues (and doubtless raise many more).

Evidence and results wonkwar final salvo (for now): Eyben and Roche respond to Whitty and Dercon + your chance to vote

In this final post (Chris Whitty and Stefan Dercon have opted not to write a second installment), Rosalind Eyben and

Chris Roche reply to their critics. And now is your chance to vote (right) – but only if you’ve read all three posts, please. The comments on this have been brilliant, and I may well repost some next week, when I’ve had a chance to process.

Let’s start with what we seem to agree upon:

• Unhappiness with ‘experts’ – or at least the kind that pat you patronizingly on the arm,
• The importance of understanding context and politics,
• Power and political institutions are generally biased against the poor,
• We don’t know much about the ability of aid agencies to influence transformational change,
• Mixed methods approaches to producing ‘evidence’ are important. And, importantly,
• We are all often wrong!

We suggest the principal difference between us seems to concern our assumptions about: how different kinds of change happen; what we can know about change processes; if how and when evidence from one intervention can practically be taken and sensibly used in another; and how institutional and political contexts then determine how evidence is then used in practice. This set of assumptions has fundamental importance for international development practice.

Firstly, we understand social change to be emergent and messy. Organised efforts to direct change confront the impossibility of any of us ever having a total understanding of all the sets of societal relationships and contested meanings that generate change and are in constant flux. New inter-relational processes are constantly being generated that in turn affect and change those already in existence. Complexity theory privileges a concern for process as much as goals and supports an approach that seeks to make a difference by working through relationships rather than focusing on narrowly defined pre-set projects and outcomes. It encourages being explicit about values and a concern for how an organisation’s intervention is judged by others, in particular by those that are meant to ultimately benefit, and the creation of effective feedback mechanisms – including, but not limited to, those produced by high quality research.

At their best, development practitioners often have to surf the unpredictable realities of national politics, spotting opportunities supporting interesting new initiatives, acting like entrepreneurs or searchers, rather than planners. They are keeping their eye on processes and looking to ride those waves that appear to be heading in the direction that matches their own agencies’ mission and values, and which can support local coalitions for change.  On the contrary, assuming that development practitioners are in control and that change is predictable – as expressed through some of the demands of evidence-based planning approaches – prevent them from responding effectively to feedback in an often unpredictable and dynamic policy environment, and can, if badly managed, chain them to a desk. Ben Ramalingam’s blog site – Aid on the Edge of Chaos – offers current insights on complexity thinking in development.

That it is relatively easier to eradicate rinderpest in cattle and build bridges than tackle police corruption or reduce violence against women is because the first are examples of what Dave Snowden describes as complicated problems and the latter are complex – an effect of there being so many collaborators involved in non-routine interventions with absence of consensus among them.  Such issues can’t be ‘solved’ like a Sudoku puzzle. In that respect, we were puzzled by Chris and Stefan’s two examples of what we would describe as complex issues. We found the first – the effect of political quotas for women in rural India – to be somewhat superficial and wondered why so little reference was made to the considerable number of studies from political sociology on the same topic that ask more probing questions and arguably provide more insightful understanding of what has been learnt in different contexts.  The World Bank study on whether top-down large scale interventions can stimulate bottom-up participation was on the other hand  puzzling for exposing myths that perhaps only World Bank staff had previously believed in, while ignoring the very considerable body of sociological and anthropological knowledge on this topic. It led us to wondering whether you need economists to find something out for it to be accepted as evidence.  Perhaps that explains some of ‘the evidence-barren areas in development’………

Which brings us to the second set of assumptions about how we know and therefore what is judged as evidence.  This is about more than pluralism and mixed methods, though we recognise that recent advances, in this case funded by DFID, are important.  Let’s start by insisting that a criterion for rigorous research is that it should be explicit about its assumptions or world-view. We suggest that a weakness in many studies is that they usually focus solely on the methodological and procedural and render invisible their ‘philosophical plumbing’. The evidence-based approaches that Stefan and Chris advocate are imposing a certain view of the world, just as our approaches do. Their claims to the contrary foreclose any possible discussion about the different intellectual traditions in interpreting reality.  Theory invites argument and debate.

An interesting paper by Greenhalg and Russell on evaluating health programmes notes how experimental approaches often ignore thetricky philosophical and political questions. Like the authors of that article, we take an approach that recognizes the partial (in both senses of the word) nature of our knowledge. How does this approach try to deal with unavoidable bias?  Through seeking to use dialogic, democratic methods in which multiple perspectives and understandings of what is at stake are explored, and the use of multiple and hybrid approaches.  The implications for practice are to be involved in mutual single and double-loop learning and adaptation as you go along. This does not preclude specific studies commissioned from ‘experts’, but it is not they alone who should define the problem nor should they assume that only their kind of knowledge has validity for collective efforts to try to secure greater equity and social justice.  Knowledge and power are bed-mates.  Our critique of ‘expertise’ – the laboratory references are an extreme example of the trend – is that expertise often uses its power to ignore other ways of knowing and doing, something Chris and Stefan would seem to agree with. Might it be that some of these ways might prove to be pretty good at tackling police corruption or reducing violence against women?

This is where reflexivity comes in.  Those of us working as practitioners, bureaucrats and scholar activists in international development cannot escape the contradiction that we are strategizing for social transformation from a position in a global institution – international development – that can and does sustain inequitable power relations, as much as it succeeds in changing them. Reflexive practice seeks to address these power inequities by recognizing that (a) many problems we seek to address are the products of human interaction – and some very important problems for people with less voice go ignored for that reason, and  (b) even if people are in agreement about there being a problem, they will often offer multiple diagnoses for its existence, and thus of course (c) multiple solutions, which need to be debated democratically with different kinds of evidence, based on alternative ways of knowing, and having the space to be heard.

We are heartened to note that Chris and Stefan believe “that all actions by external actors will interact with political forces and vested interests” and that “in many of the settings where development actors want to make a difference, power and political institutions are biased against the poor”. We would therefore assume that a reflexive donor would recognise that their power and agenda need examination as much as anyone else’s.

Chris and Stefan suggest ‘the commitment to evidence has opened up the space fundamentally to challenge conventional, technical approaches to aid.’ We would agree, but it would seem that the exception to this is when it comes to addressing the power of donors such as DFID, being honest about the domestic political pressures they are under, and assessing the possibility that their behaviour (including how evidence-based approaches are managerialised) may on occasions be undermining processes of development and social transformation. Is DFID drawing upon anthropologists or ethnographic researchers, as the Police in the UK have recently done, to understand how its policies on, for example, results or value for money change behaviour in the agency, and its relationships with others?

To imply that we are suggesting that ‘it is not worth trying to provide the best and most rigorous evidence to those who need to make difficult decisions’ is simply a wilful mis-stating of our position. On the contrary we are arguing there is more ‘evidence’ out there than some seem to admit because their world view precludes seeing this as such. Where we in particular see the need for more evidence is about how the evidence-based and results agenda plays out in practice. How it affects the behaviour of development agencies and their staff as well as their ability to support the promotion of the kinds of transformational change which are likely to make a significant difference to the lives of people living in poverty and injustice. It is odd that those that argue for more evidence seem rather reluctant to admit that this is needed!

This is a debate we are keen to pursue further in the upcoming Big Push Forward conference on the Politics of Evidence.

Science and the Crisis of Uncertainty: Book Review of ‘The Blind Spot’

One of my New Year’s resolutions was to read more books and fewer papers – books often push authors deeper, forcing them to identify and develop their underlying assumptions and ideas, whereas papers (whether single or in edited volumes pretending to be books) are often a rehash of their existing thinking, garnished with a dollop of new data. First up was William Byers, The Blind Spot: Science and the Crisis of Uncertainty, (Princeton, 2011).

I think this book is important, but appropriately, given the title, I’m not certain. It’s pretty deep, conceptual and full of subtle argument, and trying to summarize it on a blog is always likely to reduce it to a bunch of platitudes. It’s also full of maths, because the author is a maths and stats prof at Concordia University in Montreal, so lots of red meat for any mathematicians out there, but I won’t dwell on that out of compassion for the numerically challenged….

For Byers, the overarching theme of the ‘new science’ – which seems to mean anything since Einstein –  is ‘the emergence of limits’ – limits to reason, deductive systems, certainty, objectivity, in short, limits to what we can know. This is in part because the nature of science has changed from ‘being to becoming’; from structure to process – e.g. evolution, complexity theory etc.

At the heart of this evolution is ambiguity – multiple equally valid ways of understanding a particular phenomenon, epitomised by wave-particle duality in subatomic physics. But ambiguity is painful because ‘our culture remains in a ‘classical’ state, yet the frontiers of science have moved on.’ Even in scientists ambiguity induces a ‘state of vertigo’ and many opt instead for the lure, however illusory, of scientific certainty.

In contrast, Byers thinks that creativity in science and elsewhere lies in trying to live with ambiguity. ‘The whole book is about that ungraspable dynamism that generates the scientific world.’ He cites no less an authority than Leonard Cohen: ‘There’s a crack in everything. That’s how the light gets in.’

Although the book celebrates uncertainty, it acknowledges that ‘the islands of relative certainty science has carved out are of immense importance and the scientific method itself is one of humankind’s prime hopes for the future’. But it contrasts the science of certainty with the ‘science of wonder’ (great quotes from Einstein on the ‘cosmic religious feeling… that is the strongest and noblest reason for scientific research.’)

In Byers’ view ‘It is the science of certainty that is engaged in a battle to the death with the religion of certainty. The science of wonder is perfectly compatible with the religion of wonder, for ultimately they are the same thing.’

The book builds to an increasingly spiritual conclusion, captured in TS Eliot’s revelatory poem, Burnt Norton

‘At the still point of the turning world. Neither flesh nor fleshless;
Neither from nor towards; at the still point, there the dance is,
But neither arrest nor movement. And do not call it fixity,
Where past and future are gathered. Neither movement from nor towards,
Neither ascent nor decline. Except for the point, the still point,
There would be no dance, and there is only the dance.’

The job of a thinker is to endure the tensions, frustrations and vertigo in order to gain the insights that come from trying to experience the ‘still point’.

The book’s only real disappointment is its rather weak conclusion, in which he fails to connect this thinking with the challenges faced by society in 21stC (despite the blurb’s claim that this is its intention – I suspect interfering editors looking for a more popular hook). He asserts (but doesn’t try to prove) that it is the retreat from ambiguity that is responsible for some (largely unspecified) modern malaise, including global warming and the ‘dream of technology as total control’ and embracing it that will solve the problem (s).

Anyway, I thought it was interesting, perhaps because I once studied physics, but what’s all this got to do with development? Well, science is seen as the aspirational goal of a lot of development thinking – solving problems, identifying cause and effect – along with all those subjects that call themselves ‘social sciences’. So understanding what is really going on in the activity known as ‘science’ may help us avoid mistakes built on a crude or simplistic picture of what scientists do. Byers (above) quotes Warren Buffett’s wonderful ‘All I can say is, beware of geeks bearing formulas’.

But since reading it , I’ve mainly been thinking about the book almost as a highbrow self-help text. As a development generalist, a lot of the time I’m linking – feeding in examples and insights from other bits of the development world, challenging what people are doing or thinking on a particular issue. Often, I’m not at all certain of where I’m going – the absolute opposite of a specialist endlessly laying down best practice on the same X or Y. The lesson I take from Byers is that being uncertain may be uncomfortable, but it can also be creative, so don’t immediately head for the nearest intellectual comfort zone – keep skating on the thin ice and something will turn up. Take comfort in the discomfort.

You can hear Byers talks about the book here.

Thick problems, thin solutions and the future of NGOs

Normally I avoid discussions about the future of NGOs like the plague – they either involve a bunch of academics with only the vaguest idea of what we actually do all day, or a lot of senior managers emitting sonorous pronouncements on how we need to be more agile in a multi-polar world and use twitter a lot. But every six months or so, I dip in to see what’s new, so this week I joined a discussion at Hivos, an interesting Dutch NGO that is doing some big picture thinking and producing some extremely funky materials on ‘digital natives’, among other things.

Hivos had commissioned a paper by Mike Edwards (development thinker and NGO watcher) to get the ball rolling. Mike’s core argument was that we face a disjunction between ‘thick problems and thin solutions’. Thick problems are ‘complex, politicised and unpredictable’, while ‘thin solutions’ are the preferred operating system of the aid industry, desperately seeking linear causation so it can ‘prove’ its impact (and justify its existence) with lots of monitoring, evaluation etc.

“The world of international development is excited by the power of markets and technology, but not by the slow arc of building better institutions or changing values and relationships; by the efficiency of Results-Based Management but not by the task of democratizing foreign aid; by the ability of Randomized Control Trials to forecast interventions that deliver the best returns, but not by debates about what this means for the deeper dimensions of wellbeing; by “value-for-money” among NGOs as sub-contractors, but not by the need to establish financial independence for groups that are rooted in the South.”

He adds some nice explanations for this trend, and argues that these solutions are ‘not going to get us anywhere near a sustainable human future’, and that the role for NGOs is to ‘act as bridges between ‘thick’ and ‘thin’, reintroducing ideas of transformation (of power, structures etc) back into development.

I buy some, but not all, of this. Real life (as opposed to the uncluttered conceptual landscape of the aid industry) has always been ‘thick’ – multiple factors, messy and unpredictable change, leaving leaders, citizens and social movements to navigate through the fog of history using a blend of values, instinct, opportunism and analysis. To my mind, Mike also gives too much importance to civil society organizations per se – his paper barely mentions the role of the state, democratic institutions, faith groups etc.

He’s too dismissive of the results agenda (he doesn’t think we can beat them, i.e. start measuring what counts, not just what can be counted – ‘quantiphilia is not a contest NGOs can win’ – and argues we shouldn’t join them in the first place.) And although I would personally love to heed his call to give up on international institutions and close our offices in Geneva, New York etc, I think he’s wrong to portray these institutions as on the way out. There are too many global problems that will (eventually) require global solutions/institutions, and we need to be engaged in that thankless task. Ditto his argument for leaving humanitarian response to ‘consulting firms and other specialists’, although we probably agree on the need to shift towards building national capacity to reduce risk and respond to disasters.

So much for the paper, what about the discussion? It was pretty ‘wide-ranging’, as they say, so I’ll just add a few observations on the subtexts to the conversation.

Firstly gloom – the Dutch NGOs feel under political and economic siege right now from government, right wingers and the media, attacking everything from senior salaries to aid effectiveness.

Secondly, we kept skirting around one of the underlying questions in the evolution of the aid industry – what replaces market forces as a driver of change? Speakers contrasted the development scene with the Fortune 500, where big companies rise and fall from year to year. Not so the UN, aid agencies or NGOs. Does the lack of destruction also stifle creation, blocking the appearance of development Googles and Microsofts to break in, crush the existing powers and transform how we work or think? And does the absence of market forces to drive product differentiation explain why we all do the same stuff, herding after the latest development fads (value chains, microfinance, RCTs, whatever)?

In response some, like Owen Barder, think we need to find ways to introduce or mimic market forces in aid. But I think it’s also worth thinking about how other non-market institutions (governments, religious organizations, universities) improve their record on innovation, accountability and competition. In the world of INGOs, decentralization is happening fast, both internally and through the appearance of new start-up affiliates in the emerging economies (Oxfam India and the like) who will surely challenge for power within the NGO network. Maybe large NGOs should also get better at spotting, supporting and adopting innovation from its most likely source – new or smaller NGOs?

Thirdly, the discussion didn’t distinguish clearly enough between complicated and complex processes (and I’m not sure which of these constitute Mike Edwards’ ‘thick’ category). Complicated problems can be solved by thinking and studying harder. Complex ones are inherently insoluble – there is just no way of predicting that one man’s self-immolation will trigger a revolution. Complicated problems require NGOs to become cleverer; complex ones require them to think differently – to get better at spotting incipient big changes as early as possible, at finding ways to respond (promoting good change, preventing bad change), at learning how to take risks in a fog of rapidly moving events where we can never know enough to be absolutely sure.

There are also things we could do differently (or better) in response to complex processes. One is bearing witness – how is the latest shock hitting poor people, women in the informal sector etc? There is a huge gap in gathering rapid, realtime data on this that academics are not currently filling. We did it a bit on the financial crisis and food price spike and plan to do more of it in the future.

Finally, what is our role in a really big downturn and/or prolonged period of stagnation and austerity in INGOs’ traditional power bases – Europe and North America? One option is to hunker down, defend the gains (such as aid budgets) and seize the odd opportunity (like the Robin Hood Tax). Another is to say ‘there’s not much we can win here, and we have huge challenges coming down the track – let’s step back from the trench warfare of advocacy in Europe and America. Instead we should shift resources to the emerging powers (growing and changing fast, and so more open to influence) and/or long-term prophetic visioning on things like the future of economic growth, even if it damages our access to those in power today (second cartoon). As one person summed it up – do we want to be right or relevant? (And yes, in true NGO fashion, the answer is of course ‘both’).

This post also appears in an online forum hosted by The Broker. Feel free to join in the navel-gazing…….

How can you regulate the beat of a butterfly’s wing?

OK, this may be a bit pointy headed, but it has got me thinking. I ran an early draft of this post past Ben Ramalingam (see pic), who thinks a lot about this kind of thing, and include some of his comments here.

Fact one: we NGOs are always calling for the regulation of what are called ‘negative externalities’ – where the actions of one actor cause much wider ‘pollution’ – of the environment, or society, or the economy, for which they are not normally held responsible. That can involve ‘pricing in the externality’ eg by taxing polluting activities, or simply trying to stop or reduce it through regulation.

Fact two: a number of development wonks, such as Ben and Owen Barder, are trying to get our colleagues to take complexity and systems thinking more seriously. One aspect of that is that in tightly coupled, complex systems, it’s very hard to predict when one minor action (a new government in Greece saying ‘hey, we’ve got no money’, or a Tunisian stallholder setting himself on fire, or chaos theory’s best known example/conundrum, ‘can the beat of a butterfly’s wing in Brazil set off a tornado in Texas?’) might trigger large-scale and unforeseen (and unforeseeable) changes.

So what happens when you put these two together – how on earth can you regulate or tax butterflies and the disastrous externalities they may cause? This is discussed with relation to the financial crisis on the FT’s alphaville blog:

“Part of the difficulty in designing better regulations is that it’s hard to price the sum of the actions of individuals. No one looks at themselves as the butterfly that caused the hurricane in Europe.

How many people on structured credit desks thought they were doing a bad thing by trading financial products that were going to blow up in the crisis? And you can bet that most of the people at AIG Financial Products thought that they were doing a good job at something that was a low risk business. Sure, a few people clocked it, and AIGFP made the decision to get out of some segments of the businesses when worrying signs emerged. How many people who worked there would have believed their actions would result in a $182bn bailout financed by taxpayers?”

The answer would probably be to reduce the overall level of fragility of the system – putting in firebreaks such as dividing up retail and investment banks (the so-called narrow-banking approach) or putting limits on size.

This may also require a shift in how we think about markets and economies, of the kind Eric Beinhocker has written about (see my three posts, here, here and here).

Finally, Ben says we might also need to think about more use of scenarios (think about Rumsfeldian known knowns, unknown unknowns etc) and create more dynamic forms of regulation, that change as the context changes, and that kick in when certain thresholds seem to be appearing (I guess that includes things like the circuit breakers on the stock market that kick in when prices vary by more than a certain amount in the course of a day – any other examples?)

Ben has blogged about whether catastrophes can be predicted – and reckons the jury is still out. He quotes Ben Bernanke’s reflections, which are hard to argue with:

“Like weather forecasters, economic forecasters must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect… To be sure, historical relationships and regularities can help economists, as well as weather forecasters, gain some insight into the future, but these must be used with considerable caution and healthy skepticism.” (emphasis added by Ben R)

It might be very hard to do much more – you can’t regulate for specific butterflies, or even prove causality when the hurricane hits, but you can improve anticipation in general, and try to have adaptive measures in place. Any other thoughts?

The full Alphaville blogpost is worth a browse, and the comments contain this lovely analogy of the Robin Hood Tax:

‘Think of spam email: when sending emails is essentially free, sending out millions of spam emails can be profitable even if a fraction of respondents would take the bait. But if you had to pay even a nominal charge, even less than a penny, per email sent, that ‘business model’ would essentially become loss making in many cases. The Tobin tax would have a similar effect on a lot of this ‘phantom liquidity’ we get across many markets through high frequency traders – who, after all, are playing a zero sum game mostly, with their profits essentially being losses for a lot of other players. A small transaction cost might just be enough to discourage a lot of this socially useless activity.’

[h/t Rob Nash]

Revealed – the capitalist network that runs the world

From the New Scientist

As protests against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere. But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

From Orbis 2007, a database listing 37 million companies and investors worldwide, researchers pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power.

The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had

ties to two or more other companies, and on average they were connected to 20. When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies.

“In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank, says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

One thing won’t chime with some of the protesters’ claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.

The top 50 of the 147 superconnected companies:

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

[h/t Chris Roche]

So the world is complex – what do we do differently?

Spent yesterday discussing the implications of complexity theory for development (previous discussion on this blog here) at a seminar organized by the UKCDS, a body that promotes interdisciplinary research on development. It was totally gripping, not least because two of my gurus were there – Eric Beinhocker, whose brilliant book on evolution and economics, The Origin of Wealth, you absolutely must read (it took me three posts to review, here, here and here), and Robert Chambers of IDS.

The purpose of the day was not to bury old thinking (linear change, the economy as a system of static equilibrium), although Ben Ramalingam did that in passing: ‘the linear Newtonian model is staggering around the global stage like a mortally wounded Shakespearean actor’ – nice. Rather it was to delve into the ’so what’, or as Eric Beinhocker put it, the journey of complexity theory from a ‘Sunday morning’ idea that shapes the way you see the world, to something that makes you do things differently when you get to work on Monday morning.

Here are some of the suggestions that surfaced in the discussion (other participants, please add the ones I missed):

First, the purpose of development interventions, whether by states, companies, civil society organizations or aid donors, must move from deluded attempts at ‘creation’ of development from blueprints, first principles etc to acceleration of the evolutionary process that drives development in the real world. One way to think about that shift is to look separately at the three processes that constitute evolution – variation, selection and amplification (see Beinhocker posts for more on that).

Variation: facilitate, encourage and if necessary, fund emergence of new ideas, institutions and approaches e.g. from private sector, CSOs. The legal system and other institutions can help or hinder.

Selection: Academics, media or NGOs can identify new variations, study them and spread the knowledge, acting as a lubricant in the selection process. Deliberately looking for outliers, both of success and failure – known as positive deviance – is one way to promote this within development institutions.

Amplification: Too big for most development actors, but they can do advocacy to larger bodies (states, companies) to replicate success.

Second, we need to ‘wallow in failure’ – Beinhocker’s description of the US military’s determination to learn from past defeats. Failure is the essential engine of evolution, as much as success. We need to admit it, study it, learn from it (but then stop funding it….). Lots of kudos for Engineers Without Borders for introducing a website where NGOs can discuss their failures.

Third, we really need to improve the sales pitch, starting with the word ‘complexity’. Geeks revel in using the word, but it’s toxic for politicians and normal people (not the same thing), who usually want simple messages and ‘what do I do’ checklists. Beinhocker talks to them about real world economics, evolution (at least everywhere except Kentucky), adaptiveness, resilience – anything but call it complexity.

We also need to boil down some simple rules of engagement in working in a world of complexity, equivalent to the US marines combat instructions of ‘take the high ground, stay in contact, keep moving and improvise the rest’. The Santa Fe Institute, which gave birth to a lot of this thinking, has a rather more sedentary set of rules – study whatever you want, but you must attend lunch at 12 and tea at 4, where you will interact with other members. Robert Chambers reckons that participatory, bottom up approaches are a perfect response to a complex world (he promised to write something on this for the blog – v exciting.) He also suggested the System of Rice Intensification as a model – a few basic rules, but the rest depends on responding to local conditions.

Finally, we need case studies – of success and failure, both of responses to complexity and what happens when you ignore it. Hopefully Ben Ramalingam’s forthcoming book, with the same title as his blog, Aid on the Edge of Chaos, will include a lot of these.

Back in 1997, Robert Chambers asked if the new physics provided ‘a deep paradigmatic insight, an interesting parallel, or an insignificant coincidence’ for development practitioners. He now believes the answer is that this is a new paradigm. Got a feeling I’ll be posting more on this in the coming months.

And just in case this is all too abstract, and because it’s a really cool video, here’s some bouncing jelly (jell-o if you’re the other side of the Atlantic). There is no way to describe this or predict the movements with linear, Newtonian or any other maths – we need to change our thinking.

How can better models of change sharpen up our work on development?

Regular visitors to this blog will know that I’ve been doing quite a lot of floundering about thinking on different models of change (e.g. what triggered the revolution in Egypt? What does complexity theory add to/subtract from our thinking about development?) Partly it’s because in my ideal world, every time an NGO or research institution publishes some recommendation for change (of policy, practice, attitudes) it would include a power analysis of how/when it might actually come about – the drivers, blockers and waverers among different political and social actors, and the possible triggers for change. The largely meaningless phrase ‘political will’ would be banished forever. Well, I can always dream….

I set out where I’ve got to at IDS last week – there’s nothing like presenting to a room packed with illustrious academics and sharp-witted students to get the mental juices flowing (as well as exposing every weakness and confusion in your arguments).

The powerpoint is here, and you can listen to the lecture here, so I won’t rehearse the whole thing. Rather here’s a few reflections on the discussion.

Levers v Envelopes:
It feels like the discussion on change is getting unhelpfully polarised between two camps. On one side are what I call the ‘levers people’, who prefer to work with predictable, plannable change models – they are basically looking for levers of change they can pull, whether through advocacy or programming, to make change happen. They want lots of rigorous monitoring and evaluation to help improve the quality of such work.

On the other side are the ‘envelope people’, who see change as complex, emergent and unpredictable, essentially an unknowable black box, and so are highly sceptical of attempts to plan (‘log frame-ism’), pull levers or measure impact. Ros Eyben, an archetypal envelope person, reckons (slightly tongue-in-cheek) that if we administered a Myers-Briggs personality test to the two camps, we would find a pretty exact split – levers people need predictability; envelopers relish paradox and surprises. If true, it doesn’t bode well for the dialogue between them.

Horses for Courses:
But surely the most appropriate model of change varies according to the change process? Expanding service provision, or infrastructure, lends itself to the levers model, whereas social transformation may well be best captured by envelope models. One approach that partly captures this ‘horses for courses’ approach is the Cynefin framework (see diagram), which divides up change processes into four categories:

Simple: relationship between cause and effect is obvious to all

Complicated: relationship between cause and effect requires investigation and/or the application of expert knowledge.

Complex: relationship between cause and effect can only be perceived in retrospect

Chaotic: there is no relationship between cause and effect at systems level

I think we could probably learn a lot from an institution that specialises in (and plans for) working in chaotic environments – the military. How do you combine the planning necessary to make sure troops are equipped, both physically and mentally, for combat, with the improvisation and agility required in combat?

Another (pretty obvious) part of the ‘horses for courses’ approach is that lever people have much more success explaining past changes than future ones (various aphorists are credited with saying ‘I never make predictions, especially about the future’). But we (NGOs, activists, anyone interested in change) live and work at the place where the (largely) unknowable, emergent future and the (on a good day) analysable past collide, namely the present. Shades of TS Eliot and Four Quartets.

The question is, can thinking more analytically about change help us operate more effectively in the present – Eliot’s ’still point of the turning world’? I think it can – one example: with better understanding of both envelopes and levers, we should be able to spot opportunities for advocacy much quicker. Change is rarely a single moment, but a process, spread over months and years – the Egyptian and Tunisian upheavals are far from over. Often the earlier you get involved, the more impact you can have. How have organizations been using their change models to develop advocacy priorities, partnerships etc in such countries, or have they merely been trying to work out if there is a humanitarian emergency requiring a relief effort? Indeed, could better change models help development people become as agile and decisive in their response to events as their humanitarian colleagues, showing the same dynamism in responding to advocacy opportunities as we currently do to humanitarian threats?

Which brings me to my final rumination. It’s notable how quickly these discussions revert to what are essentially management and recruitment issues. How do we equip existing advisers on livelihoods, healthcare, disaster relief etc, who may see themselves primarily as technical specialists, to think systematically about change? And that may mean thinking about who we recruit in the first place – working on the cusp between levers and envelopes, spotting opportunities quickly, being entrepreneurial, coping with uncertainty may all require a very different kind of person than simply grinding through the Plan (back to Myers Briggs again).

All comments and suggestions welcome – I’m trying to sort out my work programme on this, and need all the help I can get.

[Update: really useful comments, keep em coming!]

Drivers of Change in Egypt: Mulling over the comments on last week’s post

Here’s my reaction to a couple of dozen very helpful comments and links on last week’s posts on this blog and the Guardian site, along with a couple of new articles.

There are two main clusters of comments: the most important is probably the one that distinguishes between the drivers of change, and the dynamics of change. Thinking in terms of drivers (as I largely did in my first post) is a bit static, despite the name – you unpack context, institutions, agents and events to get a reasonably comprehensive X-ray of the actors in the drama, but just knowing the cast-list doesn’t tell you much about the play. That’s where the dynamic comes in.

I sometimes use this diagram to show the different kinds of dynamics. Some (on the right hand side) are fairly predictable and linear – if you build more schools, fund education and train more teachers, you can predict improve educational outcomes. Others, like the revolution in Egypt, are much less so. And here the comments from Ben Ramalingam and Chris have focussed on the topic of Complexity (on which Ben is writing a book, by the way). I blogged a while back on this (based on a 2008 paper by Ben) and reckon it’s worth going back to – particularly the comments from Chris Roche, Chris Mowles and others.

Ben sees what has happened in Egypt as an example of dynamic, self-organized, non-violent and entirely unpredictable change, almost completely outside the sphere of ‘usual suspects’ in development – state, NGOs, trade unions, old media etc. The key mechanisms driving such ‘emergent change’ include feedback (e.g. the army failing to repress early protests) and amplification (via social media and others).

To which my reaction is, “is this a purely descriptive exercise, or does it give us useful information either about what is happening in Egypt, or elsewhere? What is the ‘so what’ of this analysis, eg in terms of advocacy and influencing in the post-revolutionary environment?”

The second cluster of comments further refines the breakdown of drivers of change. On the Guardian, Apollo13 asks (and answers) the fascinating question, why did Mohammed Bouazizi’s act of self sacrifice trigger a revolution, when similar previous acts by others caused barely a ripple? Rosemary points to the power of example, in this case learning from peaceful protest movements in Serbia. Cristina and Kate ask what role was played by more ‘formal’ civil society organizations, and all the funding for capacity building and training programmes, whether national or international – anyone got any info? Jennifer points to the importance of ‘power within’ – the lightbulb moment when people lose their fear.

The Economist this week dwells on the generation gap, likening today’s upheavals to 1968 in Europe:

“The frustration of the vast throngs in Cairo and Tunis was directed not so much at the leaders themselves as at what they stood for: paternalistic, unaccountable authority….. [They] echo the upbeat message and youthful promise of the 1960s in the West. Like the Western youth of that era, young people across the Middle East have inherited a world of immensely greater possibilities than the one inhabited by their parents. Even in the tribally conservative, religion-saturated cities of Saudi Arabia, drag-racing, daredevil youths take over quiet boulevards on weekend nights. By internet and text, they exchange jokes about ageing royal princes.

Since the fall of Mr Mubarak, numerous mini-revolutions have taken place across Egypt. Journalists have overthrown their editors, workers their union leaders, professors their university deans. Even the police have returned to the streets, striking to demand the removal of the senior officers they blame for their disgrace.”

Finally, Soren, Ben and others wonder what happens next, in particular what role the army will play. To see the wisdom of whoever warned ‘never make predictions, especially about the future’, have a look at successive weeks’ graphics from the Economist. The first is an attempt at a table of at-risk countries, the second shows what was happening a week later – top marks on Yemen, Egypt and Libya, but what about Bahrain and Tunisia?

So. Anyone fancy doing a drivers of change analysis on Yemen or Libya?

Newton v Complexity: Robert Chambers on competing aid paradigms

This is taken from a longer two part piece by Robert Chambers on the excellent ‘Aid on the Edge of Chaos’ blog. Worth spending some time studying the diagrams.

“Today we can see two broad paradigms at work in international development. On the one side are Neo-Newtonian practices – those processes, procedures, roles and behaviour which emphasise standardisation, routines and regularities in response to or assuming predictabilities. On the other side, we can see what I call adaptive pluralism, which demands creativity, invention, improvisation and originality in adapting to and exploiting change.

The diagrams below build suggest some of the ways in which  different elements of each paradigm are mutually reinforcing.

Elements in a Paradigm of Neo-Newtonian Practice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Elements in a Paradigm of Adaptive Pluralism

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There are two points to make. First, it is not an either-or. These ways of thinking about the world need to co-exist in a much healthier manner than they do currently. Rosalind Eyben has written about how the formal, reductionist side of the aid system often overlays the adaptive side of the system, resulting in cognitive dissonance. It must be possible to get a better, more honest, and realistic, balance between the two.

Second, and to build on this, establishing a better balance needs to be grounded in the challenges we face right now, otherwise it is likely to be abstract and meaningless. Let me ask for suggestions of approaches, things we know that can be done better, where we might attempt paradigmatic win-wins. Maybe it is about furthering the results agenda through participation and local ownership. Perhaps it is developing more socially grounded alternatives to the logical framework. Maybe it is about how large databases and social networks can be developed in tandem in order to enhance aid transparency. Perhaps it is about how uncertainty and context can be better addressed within aid bureaucracies. In the wider world, areas come to mind where bridging the paradigms may be increasingly essential: climate change, urbanisation, HIV-AIDS, and the link between farming and animal health immediately come to mind.

However, here my own prejudices have to come to the fore. There is little doubt in my mind that the neo-Newtonian paradigm has become more and more dominant in development action, if not development thinking. It exerts a powerful influence – for better or for worse – on the way much of the system works. For balance, we need a countervailing pull. For the paradigmatic win-wins which I touched upon earlier to be recognised and acted upon, we need to understand better how adaptive pluralism can add value to development efforts, and how it can be accorded the status it deserves.”

 Aid on the Edge of Chaos also posted recently on positive deviance (see my post on that here)