The Aid Community should start asking the right questions

Frans Lammersen and Jorge Moreira da Silva(Director) OECD Development Co-operation Directorate – DCD-DAC

In The Wealth of Nations, Adam Smith wrote that: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by a natural course of things.” Others were less optimistic. They argued that nations are rich or poor because of differences in religion, culture, endowments, and/or geography.

Modern economic development theories originate from thinking about how to reconstruct Europe in the aftermath of World War II. The European Recovery Program – or the Marshall plan – was based on the notion that economic growth can be stifled by local institutions and social attitudes, especially if these influence the domestic savings and investments rate. According to this linear growth model, a correctly designed massive injection of capital coupled with public sector intervention to address market failures would ultimately lead to industrialisation and economic development. Many other economic development theories have since followed, but none have been able to explain convincingly why some countries experience rapid economic growth and others not.

The development community has continued its quest for the missing ingredient to igniting economic growth. Candidates have included capital, technology, policies, institutions, better politics, and market integration. Every time we think we have identified what’s missing, we find that it is actually not something that can be provided from outside but turns out to be an endogenous characteristic of the system itself. Traditionally, development assistance has been rooted in a type of engineering, mass production, conveyor belt mentality, with agencies promoting “silver bullet” solutions for such complex problems as eradicating malaria, reducing vulnerability, improving resilience, strengthening connectivity, etc. Unfortunately, piecemeal or one step at time development programs often failed to deliver.

Increasingly, complexity thinking – a way of understanding how elements of systems interact and change over time – has found its way into the development discourse. After all, what could be more complex than promoting development, sustainability, human rights, peace, and governance? We should think of the economy and society as being composed of a rich set of interactions between large numbers of adaptive agents, all of which are coevolving. Based on this approach development is not just an increase in outputs, but the emergence of an interlinked system of economic, financial, legal, social, and political institutions, firms, products, and technologies. Together these elements and their interaction provide citizens with the capabilities to live happy, healthy and fulfilling lives.

Once we look at development as the outcome of a complex adaptive system instead of the sum of what happens to the people and firms, we will get better insights into how we can help accelerate and shape development. We would be more effective if we assess development challenges through this prism of complex adaptive systems. This could yield important insights about how best to prioritise, design, and deliver holistic development programs for achieving the multiple goals of inclusiveness, sustainability, and economic growth that underpin the 2030 Sustainable Development Agenda. There is increasing support in aid agencies for the idea that solutions to complex problems must evolve, through trial and error – and that successful programs are likely to be different for each local context, with its particular history, natural resources, and webs of social relations. The key for anyone engaged in the aid business is to put their own preconceived ideas aside and first observe, map, and listen carefully to identify the areas where change for the better is already happening and then try to encourage and nurture that change further.

Complexity matters particularly when the knowledge and capacities required for tackling problems are spread across actors without strong, formalised institutional links. Inherent to many complex problems are divergent interests, conflicting goals, or competing narratives. Moreover, it is often unclear how to achieve a given objective in a specific context, or change processes that involve significant, unpredictable forces. At the same time, it is important to emphasise that the counsel of complexity should not be taken as a counsel of despair for development. There has been immense social and economic progress, and development assistance has found to be helpful overall. Development co-operation has contributed to achieving economic objectives by helping developing countries connect their firms to international markets; achieving social objectives by making globalisation pro-poor and reducing inequalities, and to environmental objectives by adapting to climate change while exploiting comparative advantages.

Not all development challenges are inherently complex though. For those that are, complexity should not be used as an excuse for fatalism and inertia. Instead, we should strive to promote innovation, experimentation, and renewal. We should build partnerships to learn about the past, allowing us to shape approaches that are more likely to work and that are owned by the people we are trying to help. They will tell us what is working and what is not. Together we should build a narrative for change involving many different voices and perspectives. We should also be modest and realise that it might better to start small and learn and adapt as we go along in iterative processes of dialogue. We should keep looking for a change, scanning widely for new factors emerging in the wider world; listen to a wide range of opinions to be better able to anticipate and adapt and seize opportunities.

Embracing complexity where it matters will allow us to contribute more effectively to the 2030 Sustainable Development Agenda.

Read more: http://oecdinsights.org/2017/01/20/aid-and-complexity/