A new role for science in policy formation in the age of complexity?
Vladimir Šucha, Director General, European Commission, Joint Research Centre
The recent financial crisis was a wakeup call for both scientists and policy makers. It exposed new and unknown links between economic magnitudes but also between various parts of our modern, globalised world. It further helped to reveal the limitations of some approaches in economics as well as social sciences which proved to be unsuitable for this new world.
The crisis, above all, showed that the economy is a highly complex, dynamic and evolving undertaking, with the potential, at times, to produce unpredictable (and often undesired) outcomes. Finally, it showed the need to embrace more appropriately this complexity in the science underlying policy analysis as well as in the policy making process itself.
So, eight years on from the beginning of the crisis, have scientists and policy makers moved out of their comfort zone? Are new ways of thinking being embraced? Are they being applied in practice? What do we have to do to ensure that they result in better policies and, ultimately, fairer and more resilient societies?
As the European Commission’s science and knowledge service, the Joint Research Centre (JRC) is supposed to bridge the gap between science and policy makers, as is the OECD. Based on our experience, we believe that a good deal of progress has been made. However, there is still a lot of work to do if the science dealing with such complexity is to deliver its full potential.
Complexity science, of course, has been around for some decades now. It is the scientific study of complex systems, where many components interact producing a global conduct that could not easily be predicted using simple models only which are based on the ordinary inter-action between the individual constituent elements of such systems. Since such systems can be found in many areas of life, complexity science is used in a number of different fields, including biology, social sciences, computer science, transport, energy and critical infrastructure protection.
It has developed quickly in the last few decades. Concepts such as non-linearity, self-adaptation, emergence, chaotic dynamics and multiple equilibria, are now firmly established. Valuable tools have been developed, such as sensitivity analysis, scenario modelling and foresighting, network science and dynamic systems modelling, which allow these concepts to be applied appropriately.
Economics was relatively late to embrace these concepts and tools. However, following the crisis, there is an increased interest in applying them, particularly to financial markets.
The JRC is moving in this direction. For example, our researchers employ network science to estimate inter-linkages between the banking sector and other institutional investors and how shocks could propagate within the system.
However, our impression is that, in spite of the stronger interest in recent years, complexity economics still needs to spread more widely among economists. It should not be the preserve of a small number of outsiders only.
We also feel that it is still not as useful as it could be for policy making. This is because it remains rather abstract. In many cases, it can help us to understand the theoretical characteristics or basis of a phenomenon but it is still difficult to use it for practical problem solving. This may either be because the related models are not sufficiently detailed or because the data used are not sufficiently adequate for the problem under consideration.
There are, of course, many novel sources of data available. The task is to develop innovative paradigms for their collection, and also new methods for their analysis, since large amounts of data can often obscure rather than clarify an issue if the appropriate techniques for interpreting and making sense of them are not available.
Scientists, therefore, need to develop new approaches for gathering and organizing data, such as how to deal with Big Data or else text and data mining. They also need to explore models and tools for data analysis in a policy context, including indicators, innovative visualisations and impact evaluation methods.
The good news is that policy makers are now opening up, at least to some extent. Most of them now realise that attention to the inter-linkages between policy areas and the related objectives, and improving evidence on the simultaneous movement of various targets and policy levers, is essential.
They know that the impact of regulation cannot be judged only on the basis of its specific achievements inside a given context but that it may also produce unintended (and undesired) consequences in other areas outside the context under consideration. There is therefore a potential demand for the greater use of complexity science to understand such wider linkages in complex systems.
However, it can be difficult to explain counter-intuitive results to politicians and policy makers.
Equally, while scientists must make policy makers aware of the complexity of the systems they are dealing with, it is important not to overburden them. If they feel that these systems are so complex that no one can possibly understand or influence them, the result will be inertia and defeatism.
Moreover, there is little point in using complexity science to understand the linkages in systems, unless policy makers are prepared to strive for integrated solutions working with one another, across silos. All are committed to doing this in theory but it does not always happen in practice. DG JRC sees part of its role as organising forums on complex issues, where policy makers from different fields can meet, along with scientists from different disciplines.
It is also important to involve those stakeholders most affected by the phenomena under review. DG JRC is experimenting with new ways of directly involving stakeholders in the “co-design” of public interventions. This is all part of developing a multi-faceted perspective.
Finally, there is a job to do in helping policy makers and politicians to develop simple messages to persuade the public of the merits of the solutions arrived at using complex science.
These are only some very basic reflections on why DG JRC welcomes this event. We are keen to further extend our cooperation with OECD and the Institute for New Economic Thinking in the area of Complexity and Policy. By cooperating more closely, we believe that we can further improve the role of science in policy formation in our current world of ever increasing complexity.
The OECD is organising a Workshop on Complexity and Policy, 29-30 September, OECD HQ, Paris, along with the European Commission and INET. Watch the webcast: 29/09 morning; 29/09 afternoon; 30/09 morning