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All policies make sense based on their underlying assumptions; otherwise no one would be tempted to formulate them or carry them out. Yet, they often have unforeseen consequences that lead to very different outcomes than the ones imagined. Worse, unlike the characters in folk tales who end up realizing their mistake, the unforeseen consequences of policies are typically diffuse and indirect, therefore difficult to trace to their causes. In this fashion, we become lost in a maze of unforeseen consequences.

from this blog post.

The value of System Dynamics is exactly to surface the underlying assumptions, thus minimizes the unforeseen consequences.

It is becoming clear that current level of social security is too high for some countries to sustain.
Besides increasing taxes for social security (as well as narrowing down rich-poor gap, strengthen society and democracy), social security level will need to be “de-leveraged” to society’s “debt/economic fundamental level” for some “over-leveraged” societies.
The question is how to do it?

People need time to adapt. And this is a new “social security contract”, people did not prepare for this new state beforehand. It would be not fair to carry out it drastically – prepare for political revolutions or even wars.
So what can we do?

My idea: “de-leverage” retirement pension scheme in gradually increasing manner based on age.
For example, assuming the society’s “debt/economic fundamental level” can support 40% of the original amount of retirement pension and the statutory retirement age is 60 years:
People aged 60 years or above will still get 100% of the original amount of retirement pension.
People aged 59 years (1 more year to retire) will get 98%.
People aged 58 years (1 more year to retire) will get 96%.

People aged 30 years (1 more year to retire) will get 40%.
People aged below 30 years can stick to 40% of the original amount or devise new “social security contract” based on society’s new vision of future.

What do you think? Any unintended consequence? Inputs welcomed.

When you have economic contraction you also have a substantial contraction of the trust horizon. This deprives political institutions at the national and international level of the trust that would give them political legitimacy. They become stranded assets from a trust perspective. People no longer internalize the rules that those institutions are attempting to impose. The response is typically surveillance, coercion, and repression. This picture basically suggests that it is pointless to look for solutions from the top down. It is not solutions that will come from the top down but more problems.

So politicians typically make a bad situation worse as expensively as possible.

from a quote of this article.

My idea:
How about promote a culture that president who failed to be re-elected will still be welcomed to contend in the presidental election in the future?
This should encourage those in top position make the “worse before better” tough decision. If his/her decision is wise, he/she will be more likely to get re-elected when the effects manifest.

Policy makers need to be allowed to try.

Unfortunately, an understanding of the causes of violent conflict does not, in itself, provide a sufficient basis for implementing good policies and avoiding bad ones, though scholars sometimes believe this. Theory can help us understand the process by which violent conflict escalates. Promoting understanding is the role of the scholar. But effective political leadership requires a combination of understanding, toughness, vision, empathy, courage and the ability to communicate. Political leaders need the results of our theorizing. They need our understanding and our prayers as well.

from this inspiring paper. Its ten lessons are very valuable too.

Also, by courtesy of this paper, excerpt from The Electronic Oracle: Computer Models and Social Decisions‘s “Epilogue”:

We have said that computer modeling can add five important qualities to human understanding beyond what can be achieved by the mind alone.

1. Precision
2. Comprehensiveness
3. Logic
4. Explicitness
5. Flexibility

The great problems that threaten modern social systems – poverty and hunger, armaments and terrorism, environmental destruction and resource depletion – certainly would be helped if these five qualities became regular elements in human decision-making. But we have also said that these qualities cannot be realized unless modelers become compassionate, humble, open-minded, self-insightful, and committed. If those qualities would become regular elements in human decision-making the problems of the globe would certainly be solved.

There are several good points about Education for Sustainable Development (ESD) in this paper:

  • the notion of linking knowledge, values, perspectives, and skills/bahaviour (the head, the heart, the hands)… It [ESD] must connect the head to the heart to the hands [I would rephrase it as “connect the heart (value) to the head (reasoning, knowledge) to the hands (action)”].
  • Ultimately the benefit [effectiveness] of ESD must be measured in terms of change behaviour.
  • Education is not sufficient, but it is certainly necessary… reject the notion that either we educate or we use regulation and economic policy instruments.
  • [Some discussions about funding and political setback. It seems to me that the top-down approach of UN Decade for ESD failed to create sustainable commitment to ESD in individual nation or local level. Some things to do.]
  • It would be serious error to ignore the profound shifts in culture and social structure that are already underway in all parts of the globe. [People tends to overlook culture/paradigm shift because it is invisible / less salient, although the accumulation is ongoing and will create surprise when it is large enough to create visible shift to new state. So actually what we educators do is to keep accumulation, speed up the accumulation.]

His presentation is also inspiring:

ESD must:

  • be experiential, inquiry-based, place based, and action-oriented
  • teach students to think in systems terms
  • explain inter-relationships between ecosystems and social systems (including the economy, culture etc)
  • inspire concern for fellow humans and for the biosphere (which makes all life possible)
  • strengthen capacity to think and act for the future and not only for the present

These should be should familiar to System Dynamics/Systems Thinking educators.

Technologies for sustainability leadership

  • facilitation (leader as facilitator)
  • collaborative decision making
  • vision-based strategic action thinking and planning
  • scenario planning (including computer modeling of future scenarios)

I like the idea leader as facilitator, while facilitation for envisioning, scenario planning and collaborative decision making are basic elements of group modelling building.

Limits to growth is the insight gained from world modelling. It is also found in many other cases as well, including limits to growth of mature industry, overdrunk and collapse, housing bubble and dissolution of Soviet Union. They were really dazzling during their peak, and many thought they will grow forever. However, the result is, nothing have ever grown endless. Mostly due to physical limit. 0 is already nothing, you canot go below 0. One of the good recent example is the limit of US interest rate cut. In monetary theory, US economy can be stimulated by continue cutting interest rate, even into negative territory. But by doing so will bring unintended consequences that may harm US economy at the end. This means that the use of interest rate to stimulate economic growth has hit its limit.

Unfortunately, insight cannot be told. It is best understood when audiences found out themselves. It needs well-crafted exercise to guide audiences to explore. It needs motivating teachers who are good at the art of teaching. It needs engaging learners who are willing to learn. It takes time. These requirements are stiff. No wonder most modelling insights are failed to communicate.

Appreciation of the difficulty of dynamics is also an insight gained from building System Dynamics models. This may be why many System Dynamists are humble. We need to be prudent. Unfortunately, as with other insights, it is hard to be appreciated by simply telling. You need the war to appreciate the peace.

This is my insight about insight.

Policy should be built on the real cause of the problem, not the preferred guess.

… otherwise it won’t work, but unfortunately social problems are too complex to isolate the pure outcome of the intervention (all else equal). Is the result (success or failure) due to the policy itself or some factor else (or some combination of the factors)? The complexity of interconnections is probably why policy based on preferred guess is so popular in social sciences.

One good example is the policy to deal with the current global recession. New Keynesians argues for the fiscal stimulus while the neoclassical economists oppose it, although both haven’t provided a persuasive hypothesis (preferably validated with formal model) about why the global recession occur in the first place. Many policies proposed by economists are more ideology-driven than addressing the real cause.

Natural science practitioner – engineer/doctor;
Social science practitioner – policy maker.

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