sustainable development and coming to terms with complexity
TRANSCRIPT
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Sustainable development and coming to terms with complexity
The concept of sustainable development has been around for quite a while now. Accepted thinking now calls for attaining environmental sustainability, together with social and economic sustainability for development to be considered sustainable. Sustainability requires that all three elements jointly move
to a sustainable development path . In fact, U
Compared with the environmental sustainability paradigm, the entry of social and economic aspects with equal weight has raised the complexity of the development concept. This is true when considering aspect of measurability and predictability, but goes well beyond that. Once the expectation is that the development path would be analyzed and projected simultaneously from a social, economic, and environmental sustainability angle, we are
Assessing where we are Defining where we want to be Defining the path from where we are to where we want to be Defining the way in which UNDP could support our partners.
Moreover, we encounter significant departures from the linear thinking that used to characterize our understanding of development. Most notably, we see tipping points, as actions that appeared to have no measurable influence over outcomes for a prolonged period suddenly lead to marked change; extreme sensitivity to initial conditions and path dependence, as we see that similar actions in different countries/circumstances can lead to vastly different outcomes depending in part on what development path the country or local community has traveled before; and a patchwork of different circumstances
A
This small paper will try to outline how we can get to terms with the new notion of sustainable development and the resulting complexity, in the following senses:
Defining this three-‐dimensional sustainability concept; Determining ; and Suggesting ways for how we as UNDP could support our partner countries in moving along that
Just to be clear from the outset. This paper will NOT provide answers. It is way too soon to provide answers. What we can do at this stage is ask questions. Paraphrasing Lakatos; it is the heuristic aspect of asking questions -‐ and ever better questions -‐ that will step-‐by-‐step get us to a better explanation for what we see, where we go and what we can do .
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Complexity a short introduction
Although, as one might expect, there are many different ways of looking at complexity, Mr. Michael Quinn Patton1 provided a rather handy overview. He distinguishes Simple , Complicated and Complex , and subsequently adds Chaos , which he rather unceremoniously dismisses, but we will come back to that later. The neat overview is presented in the picture below.
On the horizontal axis we see Certainty , which means the on the vertical axis we see Agreement , which means the
agreement or
The level of social agreement and technical certainty about how to go about solving a problem determines whether the problem is in the arena of simple, (social or technical or both) complicated, complex, or in the arena of chaos (see picture 1). While this may sound vague maybe theorists agree and broadly understand an issue while actual decision this only underscores the point that what is chaotic for one actor may only be complex (or even simple) to others. But we can probably agree that the development process is at least complex for everyone involved.
Picture 1: Complexity made simple (from Patton)2
1 0 -‐110. 2 The picture shows neat lines of division between the different sections. In reality, the dividing lines may well be fuzzy. They should be taken
guish between different situations, and thus help to determine what kind of action would be more suitable. In addition, they are useful to discuss in a team, as it highlights the different perceptions about the problem (and possible solutions) at hand.
Far F
rom
Chaos massive
Close to
Zone of Complexity
Simple:
Plan, control Technically complicated: Experiment, coordinate expertise
Socially complicated:
Build relationships, create common ground
Agreem
ent
Certainty Far from Close to
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Imagine a vaccination campaign. Most people would agree it is useful and a lot is known about how to do such a campaign, hence it is moving into the direction of fairly simple. This does not mean simplistic
. It only means that the parameters are (fairly) well known and that it can be done, and replicated according to a fairly similar format . In a
: experience and knowledge about the past is reliable to predict the future. Even so, it is self-‐evident that a vaccination campaign can run into localized difficulties and needs to be adapted to local circumstances.
Designing a government-‐wide e-‐service system is very complicated and will need a lot of people from different backgrounds. But the principles are fairly well known and it can be done (but it can also fail, as has been shown many times). This
We may know that the way to solve the Greek crisis situation is to implement coordinated budgetary measures, write off part of the debt and put in place a common EU-‐level (or at least eurozone-‐level) fiscal policy platform that prevents the crisis from re-‐occurring. But the level of agreement in society in individual countries and also across countries seems rather low; witness the regular and increasingly virulent protests campaigns and the withering and dithering at EU Summits. Hence, we are dealing with
A problem may be both socially and technically complicated. For instance genetic engineering of agricultural plants is not an easy thing to do, while at the same time social acceptance of the procedure is not an acquis everywhere, to say the least.
Still, in all these situations, the processes are basically known and in principle an avenue of action with specific measures to be taken can be developed with a reasonable level of predictability.
This can change (and often changes) when we move to the arena of complexity. Complex situations are characterized by a high level of uncertainty concerning the outcome of the process, or even the process itself. In fact, many of the parameters in such a situation may not only be an unknown quantity or quality, they may in fact be unknowable. There is no standard way of moving forward, there is no overarching recipe of success. Even if in one place success is realised, the chances that this may be replicated elsewhere vary from good to slim, because the parameters determining the behavior of the system can change. Hindsight then does not lead to foresight.
We can provide the following overview of the characteristics of a complex system broadly following Snowden and Boone :
It involves large numbers of interacting elements that themselves can change; The interactions are nonlinear: minor changes can produce disproportionately large consequences;
The system has a history, and the past is integrated with the present; the elements evolve with one
another and with the environments; and evolution is path-‐dependent and often irreversible;
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Though a complex system may, in retrospect, appear to be ordered and have regularities, hindsight does not lead to foresight because the external conditions and the system s internal status constantly change;
There is a progression from ordered systems (where the system constrains the agents), to game-‐theoretic situations where the agents and the system constrain one another and also over time (but prediction is not necessarily ruled out), to chaotic systems (where usual methods for understanding the behavior of the system or predicting it fail to deliver the sort of precision that would be needed to guide development work).
Above we said that with entering social and economic sustainability into the equation the sustainable development paradigm moved into the arena of complexity3. Opinions regarding social and economic sustainability differ by society, age group, and ethnic and socio-‐economic groups; they will also likely change over time. Knowledge about what is, and about what is to be is sparse, with interrelations between environmental, social and economic sustainability. For instance, growing income inequality is likely to lead to social exclusion, depletion of resources like water may lead to conflict and deprive some sections in society of vital resources to live, while others may buy themselves out of trouble. Getting to terms with the exact nature of these relationships is difficult as many parameters interact with such a wide variability of possible course of development that reliable prediction of likely development is not obvious. However, to be relevant in development work, we need to get to terms with this complexity.
Annex 1 gives some more detail about the three elements that determine whether a development process in our case sustainable development -‐ is Simple, Complicated or Complex.
However, there is still chaos, which sits at the far right top-‐end in Figure 1 above. Here disagreement and absence of certainty are extreme with regard to both the present and the future. Such situations do exist. A regularly used example is the complex type of warfare that was witnessed in Rwanda and Eastern Congo. Several groups of armed people were running amok, unclear who they were targeting
did it and what they were going to do next. With hindsight, connecting dots, researching what was unknown, we understood a lot more. But imagine sitting in the middle of that. You see armed groups running around, killing. How do you act? Another often-‐used example concerns the first few hours immediately after the attacks of 9/11. One could witness the planes flying into the World Trade Center, but what was going on only became clear during the following days. Still, people had to act immediately, in a situation where they did not know what was going on or what would happen next.
In situations like that, you have no idea who is who, what they want and what this might mean for you. You have no idea how the situation may evolve and still you need to decide to act or not to act. How does one do this in situation like that? And here insights from Chaos Theory might be of some help.
3 One may justifiably argue that the original (environmental) sustainability paradigm was already in the realm of complexity. The modern sustainable development paradigm is then even more complex, where the concept of homeostasis could be helpful, i.e. the idea that some sort
uld be our main objective. In a sense, sustainability from the three angles is just a more specific description of this requirement.
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There is however, a little problem with this approach to chaos. These examples describe chaos as a temporary state of affairs, where order can be created through clever action that moves the situation to the complex and complicated arena. Now, what happens if in our case sustainable development it is not a temporary state of affairs, but permanently characterizing our operational environment?
Complexity and Chaos does complexity theory give an action perspective?
We now come back to Mr. Patton unceremonious dismissal of chaos. With Sustainable Development we are in a situation where we have incomplete information on the present situation, the
s specified only through the requirement of joint achievement of three sorts of sustainability, each with its own criteria, yet interrelated. Moreover, the process to reach that as yet not fully defined target is unknown, and the way to influence the development path is only partially known. This sounds very much like complexity, possibly bordering on outright chaos.
The above story can be agonizingly frustrating as it seems our action perspective and results-‐based approach has dissolved under the weight of our conceptual approach. Complexity and chaos have in common that in the development situation under review. With difficulties in assessing or analyzing what is and what is to be, and with some factors unforeseen (like technological innovation), at times we can only understand things in retrospect.
Snowden and Boone focus in their article on leadership, and suggest that because of the unknown unknowns, leaders [instead of attempting to impose a course of action] must patiently allow the path forward to reveal itself. They need to impose order in a complex context will fail, but those who set the stage, step back a bit, allow patterns to emerge, and determine which ones are desirable will succeed. They will discern many opportunities for innovation, creativity suggest that through discussing, setting clever barriers, stimulating to the complex development situation will emerge, and can subsequently be acted upon. The approach
the complex set of parameters we look at and the difficulty or impossibility to predict the development course of these parameters.
In a chaotic context, as Snowden and Boone argue that the search for the right answer is pointless: relationships between cause and effect are impossible to determine because they shift constantly and no manageable pattern exists a
Stop the bleeding, act to establish order; Sense where stability is present and from where it is absent;
Work to transform the situation from chaos to complexity, where emerging patterns can both help present future crisis and discern new opportunities.
Now, this is a somewhat unsatisfactory proposal. First because by providing an action perspective they do acknowledge ther as they do not provide any pointers as to what then appropriate actions would be to stop the bleeding, how you identify those areas where stability is emerging (we hav
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this sounds all too esoteric) and how finally you transform chaos to complexity. They seem to work on the premise that chaos is a crisis, in principle temporary and that needs to be pushed into the more comprehensible arena with strong and decisive top-‐down management. But what happens if chaos is not an acute crisis, if chaos in fact is characterizing the development context?
Pollitt4 complains about similar types of vagueness and lack of operational recommendations. He
Pollitt continues that he [ did not see that the added explanatory value attributable to complexity theory was very high5 He
key elements of the general backdrop of contemporary public administration. These are, principally, multiple and unpredictable interactions between many different kinds of organizations, combined with high-‐ -‐
. This brings us back again a bit closer to the sustainable development concept.
All in all, there does not seem to be a clear guidance from Complexity Theory for our desired action perspective. What we need is a framework for making sense of the different development situations we find ourselves in, for determining what we need to know and how we get that knowledge, what factors would deserve priority, and for figuring out how we can support our partners to handle those priorities. Maybe we should accept that at present the Complexity Theory has not yet sufficiently developed to allow a move from description to explanation, which in turn would allow the definition of an action perspective. But it
How can we move forward?
Although complexity theory correctly reminds us that not all development situations are the same, that in some situations hindsight does not lead to foresight, that different developments in society are likely to interact etc., it has not provided us with a clear methodology to develop our action perspective. The different elements mentioned by Snowden and Boone, however, as a possible response structure in a complex situation do have their value.
, reducing the attraction of Complexity Theory. It describes, makes aware, but hardly explains. There seems to be a danger that also because of its links to the more popular use of words like chaos and complexity it may be used as an excuse for failure to contribute to change.
But there is more, even if we fully agree with Pollitt recognizes some value in the overall complex theory approach. Hcharacterized by this combination of volatile elements. Indeed, some areas of public policy and
4 Christopher Pollitt: Complexity Theory and Evolutionary Public Administration, in Managing Complex Governance Systems, G. teisman, A. Van Buuren and L. Gerrits (eds). 5 Op cit. Pollitt refers to the other chapters in the same book. Italics by Pollitt.
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management are remarkably stable and predictable. Hectic change can exist alongside long-‐term
This insight can provide elements of our action perspective. For that part of the development challenges that are simple or complicated, many of our usual approaches may remain applicable. As for situations more in the arena of complexity: hectic change with little stability and predictability, we attempt to describe a dual action perspective in the context of sustainable development below.
Embrace reductionism and do not harm
The first issue to tackle is whether we can describe the core elements of sustainable development6 that we would like to see moving in the right direction? If so, four questions emerge:
a) What are these elements for sustainable economic, social, and environmental development? b) Can we measure (quantatively) or describe (qualitatively) these elements? If yes, what is their
current level, and what is the level we are aspiring to? c) Do we understand how the process works to get from where are to where we want to be? d) Can we identify o pull them to attain sustainability?
comprehensible issues, where we do have (sufficient) information about where we are, where we want to be, how the path goes from here to the future and how UNDP can assist different countries.
Secondly, the question of doing no harm is relevant. Although the theory about complexity may not help us much in defining an action perspective, it does remind us gravely about the inter-‐relations between different elements in our development paradigm and that action in one area may (and certainly will) have an impact in another area. While it may not be easy (or even possible) to describe how such interaction functions, there is a lot to say for avoiding a negative impact.
Can we break down the concept of Sustainable Development into comprehensible bits and can we measure them?
Breaking down the concept of sustainable development into comprehensible little bits is in fact what we have been doing all along. From the discussion above it may be clear that it is not ideal, but it may be as good as it gets. It may not be possible to have sufficient insight in all possible relations and hence describe and explain the complexity at the time when action is called for. But the overall idea seems clear; , a number of possible examples is provided in the table below:
Social Sustainability Economic Sustainability Environmental Sustainability Peace, stability and security Human Rights Reasonably equitable, inclusive
society
Growth sustained over years Permanently high employment Avoiding macroeconomic imbalances:
escalating inequality, relentlessly rising debt, unstable exchange rate.
Energy efficiency Climate change Biodiversity
6 Please see annex 2 for a description of sustainable development.
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description can be made relatively easily; it is much more complicated to agree on their future, sustainable value.
What is the development path?
are that push the present situation into the desired one. For instance, human rights could be broken down into:
Recognition / signing up to the relevant international conventions Having a national policy National organizational / institutional structure that has clear mandates, budgets and
responsibilities to implement the national policy Degree of non acceptance of discrimination etc.
In many areas we have a decent idea. Investments for instance in energy efficiency of buildings are likely to contribute to all three sustainable development components (reduction of energy use, of CO2 emissions, and of energy costs in turn leaving more money available for social or economic services).
However, more often than not we cannot predict how our contemplated actions together with likely developments in other intervening factors as well as actions of others will contribute to more sustainable development. We are in a situation of unknowns and complexity! A good way forward here is not to look for one way ahead, but to develop scenarios with different levels of likelihood, and risk assessment to ensure as much as possible that (a) no harm is done; (b) all relevant alternatives and appropriate trade-‐offs are weighed; and (c) development action designed according to one scenario can be adapted if it becomes clear another development scenario suits reality better.
How can UNDP best support national governments and possibly other actors in realizing this process?
Broadly speaking, UNDP in engaged in two different situations.
The first situation is non-‐chaotic according to model. It is reasonably safe to assume that we know the areas that in a contribute positively to sustainable development, where we want to stimulate change and we can reasonably expect improvements, or at least no harm, regardless of how other parameters in the overall system are moving (e.g., the energy efficiency example). Here the
standardized approaches and (policy and technical) advice would be provided to the governments.
The second situation is the one where we do not have that certainty. The advice provided by Snowden and Boone (see above) in complex situation does provide some guidance:
Open up the discussion, encouraging dissent and diversity Although we generally do not explicitly stimulate dissent, our inclusive approach e.g., to policy
complexity.
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Set barriers, limiting or delineating behavior
This is predominantly a matter of developing the national policies, strategies and legal instruments. However, in complex situations, we may need to re-‐think our approach to how exactly these should be developed: we may need to move from relying primarily on toward an
are uniquely related to their development situation. Hence, bringing experts with the technical competencies is still needed, while maybe more attention should be paid to (political) analysis, to stakeholder engagements in all its forms (incl. through social media), to scenario development, to risk management and similar areas.
Stimulate interest and , which are phenomena that arise when small stimuli and probes resonate with people This calls for what we generally
. There ar(blogs) about how the increasing soil erosion is making their life impossible. Truck-‐drivers may be asked to send an SMS each time they are asked to provide a bribe. A demonstration biogas installation, a pilot water heater on solar energy, etc. are more classical examples. The appointment of a woman as CEO of a large company, may fuel renewed interest in gender equality.
Manage starting conditions, monitor for emergresilience Here our approaches to quality assurance, monitoring and evaluation, and result management fairly well cover what is intended. However, stronger attention is to be paid to risk management, and the actual monitoring of potential risks. cost structure, it may well be optimal to build in flexibility for execution to respond to unforeseen shocks, and also some redundancy in project design to ensure that these shocks do not derail execution.
is not entirely the case. Three elements stand out where the UNDP (and the national governments) need to reflect.
Scenario development instead of linear and fixed policies and strategies
to policy and strategy development is to state the high level goals and the way in which these are to be realized. have a rather long shelf-‐life. However, in the fast changing world we are living in, the strategy to realize those high level goals may be overtaken by events The permanently changing conditions also call for flexibility and redundancy to allow for resilience (as discussed above).
al) conditions makes the formulation of medium and long term fixed plans less and less relevant. Instead, the elaboration of
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scenarios on possible developments in the sector under review, by changing the parameters according to different assumptions might provide useful insights. The emerging different development paths in various scenarios help determine the appropriate monitoring structures. Changing the assumptions (parameters) leads to different projections about the development path, and can help identify which indicators to monitor in our quest to ensure that actual developments meet expectations. The tricky part is identifying just a few of the possible infinite number of scenarios that can encompass most of the possible states of the world that are relevant for project design.
Flexibility in planning does not mean that governments, IGOs, and NGOs cannot be held accountable! Neither does it mean that mechanisms to transparently record and communicate high level results would not exist anymore. Changing realities do not mean that promises for improvements all of the sudden become redundant. Rather, the way in which they can be realized has to be adapted.
Risk analysis and risk management
Where above scenarios were promoted as a more suitable instrument to guide change management than the traditional medium and long term policy and strategy instruments, there are two core type of risks associated with this:
The likelihood and severity of the actual changing nature of the constituent elements of the factor that is under review. Hence, how likely is it that a specific assumption is valid or going to change? The monitoring system referred to above will follow the movements, but estimates have to be made how likely it is that changes may happen and how severe they may be. For the critical indicators that heavily influence the movement of the overall sustainability element, upstream monitoring and assessment needs to be done.
The whole approach is based on doing no harm. This then needs to be continuously followed that indeed no harm is being done.
About Weak Signals
An aspect not often -‐changers, and hence may pull you into
complex or chaotic situations characterized by abrupt change. For Encyclopedia Britannica, this was Wikipedia; for Barnes and Noble, and for Borders Bookstores, the e-‐Reader. Leaders of organizations and businesses need to identify such weak signals when there is a significant likelihood of ending up in either tail of the probability distribution of outcomes: catastrophic decline or extreme gains. Once such possible outcomes are identified, some resources need to be put into tracking the situation to see if it is evolving towards an emergent equilibrium consistent with these extreme outcomes; and into having a game-‐plan of how to respond. It is impossible to always make this call correctly. But the world is unforgiving to organizations or businesses that make a massively wrong call; and the payoff can be huge to having made the righwelcoming Borders customers with pictures of their Nook e-‐Reader the latter went bankrupt by not reading the weak signal a year ago that e-‐Readers are the way to remain afloat for booksellers). Thus,
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preemptively tracking potential outliers while laying out a response plan for both extreme positive and negative contingencies using a reasonable portion of the available resources, is the optimal response.
Unfortunately, we are not very good at reading weak signals today, and even worse at responding to them. The approach explained above would for UNDP arguably call for prompt action to massively reduce the time needed for recruiting top talent; more effectively deal with new/emerging donors; ensure a better balance between policy advisory and project work, and consistency among these; far more effectively coordinate what UNDP Bureaus and UN organizations say and do. Some or more could end up as -‐ herent and convincing way to deal with them in a short period of time, we might lose much of our relevance.
In lieu of conclusion
We started our debate in this paper to find out whether or not we can come to terms with the concept of complexity, and the theory that surrounds it, in relation to our overarching framework of wanting to contribute to sustainable development.
Above we argue that the complexity approach does help in describing our development situation, but that at least in our reading it does not provide great help in explaining it nor in defining what then our action perspective is, although they provide some methodological hints.
Our skeptical Pollitt, development situation is complex (or in chaos). That means that in those areas in theory it should be possible to describe, explain and reasonably predict development, and hence to develop an action plan.
In those areas where the development context is more complex, our complexity theorists do provide some hints on how to construct a response.
To bring the debate forward, we propose basically four questions:
a) Can we define the composite elements for sustainable economic, social, and environmental development?
b) Can we measure (quantatively) or describe (qualitatively) these elements? If yes, what is their
c) Do we understand how the process works to get from where are to where we want to be? d)
sustainability?
If the answer is yes to all of these, it is highly likely we are not in a complex or chaotic situation, but much more likely to be in a complicated or simple development situation.
If the answer is no, we are more likely to be in a development situation characterized by complexity.
Surprisingly, the response mechanism proposed by Snowden and Boone sits quite well with the overall UNDP approach. To paraphrase:
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Be inclusive Develop both visionary and more operational policies and strategies Attract interest, push the levers pilot projects Ensure quality control
Is all well then? Well no, not really.
First of all, we remain in rather untested waters as far as Complexity Theory is concerned. Although it has been around for quite some time now, there is precious little explanatory value documented from a large body of research (a lot of case studies, but there is little done in aggregated form) and there is precious little guidance on how to tackle complex situation beyond the somewhat disappointing statements by Snowden and friends.
In such an arena, skeptics -‐ as rather brilliantly represented by Pollitt have a field day. But they may be wrong. Absence of solid proof in a scientific sense does not mean all is untrue; and providing useful rules of thumb that can guide us much of the time (and in particular, help avert catastrophic mistakes) would be a worthwhile contribution.
Acting upon one of the core issues, that we believe that the UNDP should take (much) stronger on board, we propose that much stronger attention is to be paid to scenario development ,risks
sage dramatic change.
At this stage, we sought to write enticingly about complexity, but without pretending to know more than we do. To make headway from here, we first and foremost look forward to a lively debate on our website. Secondly, early 2012 we (the UNDP Bratislava Regional Centre) intend to organize a (virtual) event bringing in some of the more experienced theorists and experts to help us further on the road. This paper and the ensuing debate are intended to help shaping that event and formulate an appropriate set of questions. The answers to these questions would have to provide pragmatic, immediately usable guidance to (UNDP) advisors and practitioners on how to do development work in a complex world. Thus, the questions will have to be specific while covering the most important aspects of our work.
Bal zs Horv th
Albert Soer
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Annex 1: The determining elements of simple, complicated and complex
Three aspects are important in determining whether or not an issue is complex: Governance, Causal modeling, and Outcome specification.
Governance
The number of parties involved, that have a (significant) impact on the way in which each of the composite elements of the paradigm evolves, plays an important role. But even more important are the many different ways they can interact, and the various patterns (e.g., sub-‐groups with common interest, blocking coalitions) that can emerge. For each of the composite elements of sustainability (social, economic and environmental), there are many interrelated players and even more of these patterns, which, coupled with limits on the understanding of the nature of interaction the number of parties having an influence on the final outcome is large, while at the same time is only understood to some extent, making the process rather
Causal modeling
Here we look at three interrelated issues (causal strands, alternative causal mechanisms, and the nature of the causal stream (linear versus non-‐linear)
Causal strands. A single causal pathway leading to a well-‐specified outcome is simple; cause-‐effects relations are known and predictable. Several causal paths leading to multiple outcomes, all needing to be coordinated, is complicated; cause-‐effect relations are unknown but knowable with careful assessment. Uncertain causal paths for achieving desired outcomes, especially where causal connections are intertwined, and overlapping, constitute complexity; cause-‐effect relationships are unknown and unknowable before effects have emerged.
Alternative change mechanisms. A single, controllable change mechanism is simple. Different causal mechanisms operating within different contexts make the situation complicated. Overlapping mechanisms with interaction points at various intersections or time points can make the situation complex.
Nature of the causal stream, linear versus non-‐linear. Simple causal connections involve direct linear cause-‐effect connections (e.g. Big jump in basic needs after a disaster). Complicated causal connections involve several efforts aimed at the same outcome, where it is complicated to sort out the contribution of each effort to the eventual outcome; such complicated relationships can be non-‐linear, but are knowable with careful assessment, and at least partially predictable. Complexity includes nonlinear interactions and flows in which small actions can lead to large effects (nonlinearity) or vice versa, and the nature and degree of nonlinearity cannot be controlled or known in advance, or even after the event in most cases, because there are too many interacting variables to sort out.
Complicating factors in all these cases include dynamic feedback loops; interactions among causal pathways; and underlying common cause relationships that drive classes of causal pathways.
Outcome specification
Simple (change) processes involve one or a small number of clear, specific and measurable outcomes, not in conflict with each other, specified in advance. Complication (change) processes involve multiple, vague, and/or conflicting outcomes. A (change) process becomes complex when outcomes cannot be specified in advance because they are emergent; this makes pre-‐post comparisons and tracking changes against baselines especially challenging.
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Annex 2: Defining Sustainable Development
Development is sustainable if it meets the needs of the present without compromising the ability of future generations to meet their needs. This requires not depleting human capital, knowledge capital, natural capital and produced capital available to society over time (Arrow et al., 2004). It involves three pillars: economic, social and environmental sustainability. Each is indispensible for development to be sustainable. Implicit in the definition is the requirement to also avoid injecting large risks into subsequent
The current outcome of existing government policies and incentives for private sector is not consistent with long-‐term sustainability in several aspects. Failures of governments and markets, and weaknesses in civil society all contribute to this outcome.
A critical mass of changes in policies, institutions, regulation, and incentives is needed to markedly alleviate government and market failures, and develop and engage civil society. Such changes need to be consistent and feasible. Governments need to reverse dysfunctional policies currently pursued (such as massive fossil fuel subsidies), put in place improved institutions and regulation where markets fail, but retreat from areas where markets or civil society work best. They need to build or reverse the depletion of physical, social, and natural capital, while adhering to budget and social constraints. Micro-‐level sectoral policies need to complement this to provide local traction and address social and environmental tensions. Together, these can reset incentives for all to live and invest in line with economic, social and environmental sustainability.
Importantly, such a policy mix need not be perfect. It only needs to change incentives sufficiently to tip the balance toward sustainability in the billions of decisions made about current and future actions. Moreover, perfect global coordination is not required, only a minimum level of compatibility for the patchwork of national policies. Enough of the elements for effectively addressing -‐by-‐
shows that a steadily eroding situation reaches a tipping point when a dominant coalition for change rapidly coalesces. At that point, luck favors the well-‐prepared: those that have a consistent and credible proposal for the way ahead.
Sustainable development is complex. The three pillars each explored extensively in the past individually are not competing agendas. Every pillar is equally important. They are interconnected, introducing synergies and trade-‐offs (including inter-‐temporal ones). Inter-‐temporal trade-‐offs arise when stocks and flows interact, as in the case of migrant populations and remittance flows, or natural capital and commodity export earnings. The overlaps also produce some of the most interesting areas that are at the forefront of UNDP work, notably human development, inclusive and green growth, green jobs, the poverty-‐environment nexus (Figure 1). Additional factors also play a key role, notably demographic shifts that shape population structure, labor supply, and aggregate savings behavior. All these need to be considered when formulating policies. Finally, these processes are inherently nonlinear, adding a further element of complexity: tipping points can occur when social, economic or environmental tensions reach critical levels individually, or in combination.
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F igure 1: Three pillars
Economic: Issue of traditional growth based
on high use of energyenergy pricing, regulation, direct
government activities
EnvironmentalBiodiversity, water, food, energy, climate change
impact
SocialInclusion, access to
resources, green jobs, health, education, good
governance
Social incidence of pollution effects; G reen (and decent) jobs; Poverty-environment nexus; Social inclusion effects of environmental disasters