Think Systemically, Act Collectively: Anticipating and responding to crises

Banner image: Shutterstock/TP71
Think Systemically, Act Collectively: Anticipating and responding to crises

This article is part of a series in which OECD experts and thought leaders – from around the world and all parts of society – address the COVID-19 crisis, discussing and developing solutions now and for the future.

To keep updated on all of the OECD's work supporting the fight against COVID-19, visit our Digital Content Hub.

At a news conference in August 1986, US President Ronald Reagan joked that, “The nine most terrifying words in the English language are: 'I'm from the Government, and I'm here to help'”. A year later, UK premier Margaret Thatcher would argue in Women’s Own magazine that, “There's no such thing as society…people must look after themselves first”. This thinking was in tune with an approach promoting deregulation, government disengagement and prioritising free market-based solutions.

Compare that with French President Emmanuel Macron’s March 2020 declaration on COVID-19: “What this pandemic reveals is that there are goods and services which have to be made independent of the laws of the market. To delegate our food, our protection, our ability to take care of our way of life to others is a folly. We have to take back control”.

However, COVID-19 is also revealing how unprepared some governments, and health sectors, were to face the pandemic. The lessons we must draw are not about how much market or how much government intervention is needed. Both have failed. If investments in coronavirus vaccines had continued after the emergence of SARS, the cost in human lives and of the economic containment would have been lower. The same can be said if health systems had been better equipped. Lower mortality rates in some countries confirm this.

There is no easy answer, but we need a full reflection after the worst crisis of our lifetimes to define better paths forward. This requires the type of reflection promoted by the OECD’s New Approaches to Economic Challenges (NAEC).

Economics loves physics, but it has difficulty to come to terms with the fact that the object of its affection has changed. We are not living in Newton’s linear world where actions cause predictable reactions. We are part of a complex system of natural, socio-political and economic systems that we reset constantly and which affect us constantly.

Complex systems are subject to emergent, disruptive crisis. The initial cause of the crisis usually appears insignificant at the time and is only identified afterwards. But that doesn’t mean crises cannot be foreseen. A NAEC Group meeting in September 2019 on Averting Systemic Collapse pointed out that “a new crisis could emerge suddenly, from many different sources, and with potentially harmful effects”. One practical step following from this analysis was to invite epidemiologist Joshua Epstein to the next major NAEC event to be held six months later, in March 2020. That conference was on “Integrative Economics”, which I would define as an economics that calls on the insights and methods of a range of disciplines to paint a realistic picture of how the economic system is shaped by and helps shape the broader “system of systems” it is part of.

A systems approach also suggests that while attention usually focuses on triggers – pandemics, natural disasters, geopolitical tensions – we also have to think about the stability, resilience and functionality of systems under any conditions.

Such complex systems are prone to cascading failure. Physics and other disciplines teach us a somewhat counterintuitive lesson on managing this: the more you attempt to optimise complex systems, the more unstable they may become. A systems approach also suggests that while attention usually focuses on triggers – pandemics, natural disasters, geopolitical tensions – we also have to think about the stability, resilience and functionality of systems under any conditions.

Systems such as financial markets or global value chains are designed for short-term efficiency, not long-term resilience. But when we talk about the properties of human systems, let’s not forget that these properties are largely the result of human decisions and behaviour. Policy choices that degrade public services, that emphasise short-term efficiency over long-term resilience, reduce our capacity to handle such crises and have left us vulnerable to the sort of systemic shock initiated by COVID-19.

Read: "A Systematic Approach to Dealing with COVID-19 and Future Shocks" from the OECD's New Approaches To Economic Challenges (NAEC).

Our emphasis on efficiency within the economic silo, the health silo, the environmental silo and other silos blinded us to the potential for spillovers and failures cascading from one domain to another, as well as to the brittleness of specific firms, industries, global value chains, and public systems.

We failed to understand the nature and origins of uncertainty; uncertainty is difficult to model, but it should not be ignored because of that!

An approach of resilience, based on the science of systems, would acknowledge that massive disruptions can and will happen. It is therefore essential that core systems have the capacity for recovery and adaptation to ensure their survival into the future. That may mean sacrificing efficiency, profitability or cost-effectiveness in the short-term. Or, as Ambassador of Slovenia to the OECD Sodin argued during that conference on Integrative Economics, sometimes just-in-time needs a dose of “just-in-case”. It may not be immediately efficient to build up medical stocks for an epidemic we hope will never happen, but when it does, we will be glad we had “too many” intensive care units, respirators and health and care staff. Medical research is costly, time-consuming and uncertain, so we have to rethink the funding of the basic science that can be transformed into vaccines or other applications when needed, and just as importantly, where needed. As we’ve seen, epidemics don’t respect borders, and nor will future catastrophes.

The radical uncertainty associated with complex systems makes it impossible to predict where the next crisis will come from (who would have guessed bats in the case of COVID-19?). This shouldn’t stop us from learning lessons from the past to prepare a systemic response for the future. Korea, for instance, built on its experience with SARS in 2003 to design the strategy it applied to the new coronavirus outbreak. Government units that had been created in the President’s office, in the ministries of health, welfare, and foreign affairs, and in municipalities were mobilised in a co-ordinated way.

Photo: Shutterstock/Patrick Foto

I’ve mainly talked about resilience as a strategy against negative events, but resilience can also mean being able to take advantage of new or revealed opportunities following a crisis to improve the system through broader changes. You could call this “bouncing forward” and not just bouncing back. We shouldn’t bounce about in a random way, crashing into each other and reacting only to the last impact or stimulus.

Systemic threats require co-ordinated, collective responses. The shift in thinking I outlined at the start of this article points the way to how this could be done. If our response to future crises is to be effective, we have to invest in governments’ capacities to anticipate and respond. We have to invest in the institutions that will be on the front line. We are asking so much more of them today: schools are now feeding poor children for instance, and hospitals beds are occupied by people who should be receiving social care.

More from the Forum Network: "Now is the time for a strong, sustainable and inclusive recovery" by Nicholas Stern, Professor of Economics and Government, London School of Economics & Dimitri Zenghelis, Senior Adivsor at the Wealth Economy Project at the Bennett Institute

We need stronger institutions: resilient enough to deal with complexity, perceptive enough to identify vulnerabilities, and humble enough to learn from one another and co-operate with each other. More than ever, we need to work together across disciplines, outside our reassuring silos and comfort zones, whether at the national or global level. We need better regulation and policy based on more realistic modelling and a better understanding of what markets can do and what should not be left to them. That means we need to go beyond maximising GDP and address the different factors that affect people’s well-being. All this calls for better governance frameworks at all levels.

Governments are the only human system big enough to co-ordinate our response to the systemic threats we are facing. Governments acting together could be a powerful system of systems, too. Together, we can overcome the COVID-19 crisis, tackle the climate emergency and be better prepared for crises yet to come.

Related Topics

Tackling COVID-19 Health
Climate Trade

Whether you agree, disagree or have another point of view, join the Forum Network for free using your email or social media accounts and tell us what's happening where you are. Your comments are what make the network the unique space it is, connecting citizens, experts and policy makers in open and respectful debate. 

Please sign in or register for FREE

If you are a registered user on The OECD Forum Network, please sign in

Go to the profile of Leslie Brissett
almost 3 years ago

The system of systems notion is a very timely one. How do we encourage governments to work together to strengthen the International Institutions and work the power vestiges in voting structures? The journey from Global Governance to Global Government could accelerate. This could be the time to discuss what it means to be Human. COVID-19 did not bring us to global collapse, the humans planning and running the systems did.