The Challenge of Sustainable Development: How can complex system reasoning help?
Vice President, World Bank Institute
Last modified: September 25, 2007
Economic systems present for analysis a set of problems that cannot simply be decomposed to reduced forms that are easy to resolve as separate and independent sub-systems. Closed form solutions, while elegant, do not resolve many of the complex remaining problems in economics. This constraint is even more relevant when looking at issues in development economics or sustainable development, where interaction between physical, natural, social and economic sub-systems further enhances the complexity of even simple phenomena in economic systems. Among the key challenges facing development practitioners are questions such as economic growth patterns, including issues related to divergence and convergence, as well as regional variations. What makes the difference in growth trajectories is still a highly debated question. Other emerging challenges include those related to the mobility of people--migration and urbanization—which have historically led to major social transformation, and it is not clear what current patterns of city formation and migration will lead to. Disease burdens have been shifting over the last 20 years and will continue to shift, including the emergence of new types of epidemics. What will be the global effect of responses at the firm and country level to these shifting challenges? Water, food production, and climate change are pressing problems. Do we know the main levers to pull for development results? Trade and globalization has its supporters and detractors. What does interconnectedness lead to in economic welfare terms? Knowledge and learning have also become fundamental in conversations on speeding up economic growth or resuming growth in stagnant economies. Will the spread of ideas cause fundamental shifts in behaviours of individuals, countries, and economies? The emerging interdisciplinary "sciences of complexity" have provided new methods and tools for tackling these problems. These approaches demonstrate a shift of perspective in economics and allow a new outlook to emerge. In this paper, we use empirical evidence to highlight the key problems and challenges facing development practitioners, uncovering where possible, the areas in which the science of complexity can help. A review is also presented of the key contributions made by participants at the conference to resolve some of these problems.