Systemic Thinking for Policy Making

8. Systems-based Approaches for Development Co-operation to Meet Diverse Needs and Aspirations in an Interdependent World

Frank Sperling

Mauricio Lopes

Rahul Malhotra

Ana Fernandes

Abstract

An approach to development co-operation based on systems analysis is advocated to help decision-makers reconcile multiple objectives related to the social, economic, and environmental dimensions of sustainable development. Systems analysis examines how complex problems interact, how threats and risks can multiply, and where feedbacks might exist, making it possible to anticipate surprises or tipping points. It provides a pathway to effective translation of research into impacts, by developing instruments to bridge sectors and actors, as well as temporal, social, and spatial scales from global to regional, national, and subnational, thus facilitating the task of policy- and decision-makers to address global and national challenges. The need for collaboration to address global sustainability challenges runs counter to current political trends, where solutions advocated to address the needs of an individual country may prove detrimental by ignoring their international implications and longer-term consequences.

Introduction

In 2015, the international community laid out a collective vision for the future of humanity. Framed by the Sustainable Development Goals (SDGs), 17 globally applicable goals and 169 associated targets, this extraordinary agenda seeks to bring together economic, social and environmental dimensions of development to realise an inclusive and sustainable world by 2030 (UN, 2015).

International development co-operation will have a critical role to play to ensure that the universal ambition of the SDGs is indeed realised, and no one is left behind. Yet focusing on helping advance the economic prospects of individual countries is not enough in an increasingly interconnected but also fragmented world. The global agenda of the SDGs underscores this. With human activities now leading to global scale changes in the earth’s life support system, it requires integrated and long-term solutions, which are mindful of interactions between human and natural systems, from local to global scales. It requires a rethink of how we approach and plan development co-operation, as the past may no longer serve as guidance for future progress.

Entangled natural and human systems

Humankind is on the verge of falling victim to its own success story. It took well into the mid‑1800s for the world population to pass the one billion mark. Today, over seven billion people share the planet with the most recent billion added in less than a decade. No longer bound by local environmental limits through innovation, technological progress, and trade, economic productivity spread around the globe. Collectively we have never been as wealthy as today. Strong progress has been made over the recent decades towards ending extreme poverty, but partly due to increase in conflicts, we see also recent reversal in the advances made towards universal food security. For the first time in over ten years, the number of people suffering from chronic hunger has been rising again, increasing from 777 million people in 2015 to 815 million people (11 per cent of the total world population) in 2016 (UN, 2018). There remain profound inequalities within and across many countries.

Along with socioeconomic progress, human activities are now not only reshaping the local environment, but in their collective impact are exerting a dominant influence on global scale processes of the earth system (Crutzen, 2002). Climate change, biodiversity loss, land degradation, air and water pollution, and plastic waste are signalling environmental decline that is happening across scales, undermining the very life support systems we depend on.

This signifies a profound departure from the understanding of our relationship with the environment. For much of human history, nature was vast, its resources abundant, and humankind’s impact marginal. This is no longer the case. As we are affecting the earth’s life support system and in return will be affected by the changes, we must shift to a holistic view that recognises the entanglement of human and natural systems. Human development ambitions need to be aware of their impact across scales.

Evolving perspectives on sustainable development

Concern about the scale and consequences of our impact on the environment is not new, nor is the demand to change human behaviour. Sustainability considerations entered the mainstream of international and national policy discourse particularly since the report of the World Commission on Economy and Sustainable Development (WCED, 1987), also known as the Brundtland report, called for “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Yet despite growing awareness, attention, and promising initiatives, there was no transformative shift towards sustainability. As Ehrlich and others observed, “humanity has never been moving faster and further from sustainability than now” (Ehrlich et al., 2012).

The great acceleration of socioeconomic development and the accompanying resource use during 20^th and early 21^st century (Steffen et al., 2015) and also the growing concern among scientists that human induced environmental changes are crossing global scale limits beyond which human existence and development may be threatened (Rockström et al., 2009), call our current measures of performance and progress into question. There is agreement that change in human behaviour, institutions, and economic systems are needed. Yet there remains discord concerning how much change is necessary or feasible.

Part of the challenge lies in the amorphous concept of sustainable development itself (Ekins, 1993, Gomez‑Baggethun and Naredo, 2015). There are diverging options as to what sustainable development really means, and the role economic growth plays within this framework, i.e. whether it is a necessity or whether it impedes such a transformation. This is also reflected in the general interpretations of the extent to which natural capital is substitutable by human-made capital, i.e. the contrasting concepts of weak and strong sustainability (e.g. Neumayer, 2003). Schools of thought following the weak sustainability concept hold that natural resources are abundant, or resource constraints can be overcome through technical progress. Hence, sustainability is given if other forms of capital replace the depleted natural capital. This view gained considerable traction in mainstream economics. By contrast, strong sustainability concepts of ecological economics place limits on the substitutability of natural capital, i.e. renewable resources should not be depleted more rapidly than they can regenerate, while the use of non-renewables should be coupled with the development of alternatives prior to their depletion. The amount of pollution and waste must match the absorptive capacity of the environment.

The emergence of green growth and green economy as concepts sought to reignite the drive towards sustainable development prior to the 20-year anniversary of the Rio Earth Summit. Green growth, spearheaded by the OECD (2011) and the World Bank (2012), placed the spotlight on the role and quality of growth in promoting sustainable development. Other multilateral organisations adopted the concept to regional development contexts (e.g. AfDB 2012, 2013; ESCAP et al., 2012). The complementary concept of the green economy proposed by UNEP (2011) in collaboration with other UN bodies aimed to define and visualise an economy that achieves a balance between meeting human needs and welfare, while sustaining natural resources and processes.

There is a push to revise and update measures of economic performance. For example, there are growing efforts to assess the performance of countries in building and developing capital stocks, complementing the prevalent focus on growth as an economic performance metric. Aside from human and produced capital and financial assets, focus is increasingly being placed on better assessing the state of natural capital in the context of tracking the overall wealth of nations (Lange et al., 2018). Developing such comprehensive wealth estimates can help promote more-sustainable development policies and practices, but some natural capital is critical and (precautionary) limits to substitutability with other forms of capital should be considered (Cohen et al., 2018).

Consequently, the view of what constitutes development progress has grown more complex. The push for integrating the economic, social, and environmental dimensions, as called for in the Brundtland report, is growing. Development means delivering on multiple objectives and requires recognising the ambition of and working across sectors. In this context, the SDGs provide the goal posts, helping to define our collective aspirations, and by including environmental targets, provide also first guidance on how much natural capital we should aim to protect to ensure sustainability.

Guiding action: Comprehensive targets for sustainable development

The collective aim and ambition of the international community was laid out in the 2030 Agenda for Sustainable Development, which was adopted by the UN General Assembly (UN, 2015) and specified through the SDGs. The SDGs build on the successes and lessons learned from the Millennium Development Goals (MDGs). They continue an emphasis on ensuring that basic human needs are met but go beyond the scope of the MDGs. In contrast to the exclusive focus of the MDGs on developing countries, the SDGs are formulated as global goals. The SDGs aim to universally advance and ensure human welfare, while emphasising also stewardship of the terrestrial, marine, and climate systems. In addition, the SDGs are informed by or link to key environmental agreements, such as the Paris Agreement.

Encompassing 17 global goals and 169 associated targets, the potential for trade-offs but also synergies between various economic, social, and environmental objectives has been recognised (e.g. ICSU, 2017). The 2030 Agenda asks for the SDGs to be considered indivisible. No goal should be given preference, instead the SDGs should be addressed as a collective (UN, 2015).

However, at the starting point of the implementation process, it is clear that this is not the case. Countries that tend to score high concerning economic or social goals, perform lower with regards to environmental goals and vice versa. No country scores equally well across all goals (Sachs et al., 2018).

The need for comprehensive approaches to the SDGs is further underlined by the fact that these global goals need to be realised by collective actions in a more interdependent and complex world, which seems to be in a semi-permanent state of disruption (TWI2050, 2018). Changes in one part of the world may have ramifications in another. Countries may be confronted with multiple social, economic, and environmental changes at the same time. Hence, a worldview of complexity and interdependence needs to be embraced in development co‑operation.

The implementation challenge

Science has been very successful in describing complex and global environmental problems such as climate change, which in particular illustrates the need to work across thematic and disciplinary boundaries. To assess the consequences of increasing greenhouse gas concentrations and their impact on the climate and the environment, the climate system needs to be understood in its interplay with marine and terrestrial systems, including numerous and positive feedback loops across different spatial and temporal scales. Mitigating and adapting to climate change cuts across economic sectors and raises social and moral questions about equity within and across societies and generations, and it is hence directly linked to considerations for sustainable development (IPCC, 2014). Furthermore, strategic decisions addressing climate change also have implications for other environmental issues, such as efforts aimed at stopping biodiversity loss and reversing environmental degradation.

The challenge now lies in linking the understanding of biophysical systems with an understanding of human systems, moving from the scientific assessment of the scale of the problem to the analysis of the options for solutions. The complexities of these systems mean that solutions to these problems may be associated with uncertainties, diverse benefits, and trade-offs. Without understanding the embedded trade-offs and risks, how they can best be managed and synergies effectively harnessed, it remains difficult to mobilise the necessary political will and societal support.

Despite the scientific facts and general awareness, the global transformations towards sustainability have not happened, if we look at trends concerning major environmental issues. Atmospheric greenhouse gas concentration has reached new record levels (WMO, 2018), while a rapid decarbonisation of the energy system and net zero emissions towards the middle of the century are required to have a chance of meeting the objectives of the Paris Agreement (Rogelj et al., 2014). There is also scientific agreement that current land-use changes in conjunction with other environmental pressures are driving biodiversity loss. From 1910 to 2005, the appropriation of net primary productivity through human activities has roughly doubled, now reaching around a quarter of net primary production of potential vegetation (Haberl et al., 2014). Because of human pressure on the environment, species are going extinct at rates that exceed the natural background extinction rates by several orders of magnitude.

To solve these problems while further advancing human welfare, solutions are required that do not take singular perspectives, but instead relate to and account for diverse development needs and ambitions. Yet to a large extent, our academic, institutional structures, strategies and policies, and operational practices encourage silo-based approaches. In national public policymaking, the business delivery model has not kept pace with the increasing complexity and interdependence of our world (Oatley, 2019). The business model for development co-operation is often predicated on short-term, measurable outputs and not on relevant outcomes. This inevitably works against taking a more holistic view of development co‑operation and shapes how diagnostic, measurement, and decision-making tools are established (OECD, 2018a). Even the international bodies emerging from the Earth Summit, such as the United Nations Framework Convention on Climate Change (UNFCCC), the Convention on Biological Diversity (CBD), and the UN Convention on Combating Desertification (UNCCD) reflect this fragmented approach, where major global environmental challenges are tackled separate from and complementary to major mainstream economic questions.

A compounding trend is that more of the programming decisions are being made in donor headquarters, with declining trends in country programmable aid and declining use of local actors as partners (OECD, 2018a). The growing number and diversity of financial actors has made the landscape of financing for sustainable development more complex, leaving the international community unsure how those financial flows interact, and support or undermine each other. Clarity is also needed on how the economies of scale can be harnessed through the multilateral system and how this can be utilised for investments in global public goods as well as national development processes (OECD, 2018b).

The obvious conclusion is that the national and international policy environment for development co‑operation needs to embrace reform in order to contribute effectively towards a more sustainable world (Yan and Yifu, 2018). Policy coherence for development (PCB) is focused on avoiding or minimising negative spillover effects of various policies on the development prospects of developing countries. For example, this may entail avoiding situations in which Official Development Assistance (ODA) supports agricultural development of a recipient country, while tariffs and subsidised agricultural production in the donor country simultaneously undermine that country’s export opportunities. Further expanding this focus on policy coherence for sustainable development (PCSD) takes this a step further, moving beyond a “do-no-harm” approach towards a partnership approach based on “win-win” solutions, thereby helping to create synergies between economic, social, and environmental policies (OECD, 2016).

Political will is fundamental to advance change. One aspect to rethinking how development co‑operation between countries can be approached includes taking a fresh look at the relationship between donors, recipients, and other stakeholders. This is illustrated by an example on triangular co-operation (Box 8.1). Another aspect includes considering how an integrative policy environment can be underpinned by strong analytics, so that the dynamics and interdependencies can be better captured and inform development co‑operation. Da Silva et al. (2017) argue that development co‑operation should embrace complexity, thinking of “the economy as being composed of a rich set of interactions between large numbers of adaptive agents, all of which are co-evolving”.

Box 8.1. Triangular cooperation between Morocco, Costa Rica, and Germany for Sustainable Development

Triangular co-operation is an example where different partners that bring different resources and expertise are engaged to scale up impact and innovation for better development results (OECD, 2019). The beneficiary partner usually solicits support to tackle a specific development challenge, while the pivotal partner provides expertise and other resources, and the facilitator helps connect all partners, supporting the collaboration financially and technically. In this example of a triangular co-operation project between Costa Rica, Morocco, and Germany, the complementary strengths of the country partners were used when formulating three objectives for the project: an overall objective and two separate objectives for Costa Rica and Morocco. In the project Improving the Management and Sustainable Use of Forests, Protected Areas and Watersheds (2013-2016), Morocco and Costa Rica, with support from Germany, implemented a number of pilot projects that aimed to improve watershed management, to prevent forest fires, and to protect biodiversity.

Both recipient countries provided knowledge and received inputs from the other partners on managing forests and protected areas in a sustainable manner – an area where for example many Costa Rican state institutions and non-governmental organisations have vast experience and knowledge. Germany brought its knowledge in the management of processes and gave methodological and organisational impetus to the project. The project components involved representatives of governments, other state authorities, NGOs, and the private sector in order to identify best practices, and apply and institutionalise the lessons learned. Costa Rica implemented two pilot projects to improve watershed management, based on the Moroccan experience. Morocco implemented two projects in national parks and adopted Costa Rica’s system of payment for environmental services to design a financing system and a collaboration association to tackle forest issues. Germany provided knowledge of bilateral co-operation in the management process and offered organisational and methodological impulses. All partners contributed financially in equal measure.

Source: Case story shared by the Ministry of National Planning and Political Economy (MIDEPLAN) of Costa Rica and by Germany.

Identifying and managing trade-offs: The case for systems analysis

An understanding of the solution space for sustainable development pathways is required, which considers the interplay between diverse objectives at global, regional, national, and subnational scales. Long-term perspectives need to iteratively inform and respond to near term planning processes and investment processes. In short, there is a need for integrated and strategic planning processes across spatial and temporal scales that overcome the currently fragmented decision-making landscape.

Scientists have set out to provide guardrails that can guide human action at the global scale. These are scientifically informed value judgements. Rockström et al. (2009) have proposed planetary boundaries. The focus here is on sustaining biophysical conditions that support human life. Raworth (2017) has related the planetary boundary concept to necessary socioeconomic targets. The SDGs further describe goals and targets related to the social, economic, and environmental dimensions of sustainable development. These can serve as ingredients for visualising desirable futures.

With its emphasis on finding robust and adaptive solutions to given problems, systems analysis pays special attention to the interactions among multiple dynamic systems and the risks and uncertainties faced by policymakers. Essentially, systems analysis is a process that aims to understand complex, multilayered problems. It is about “solution science” that can serve as an analytical tool for decision-makers on how to reconcile multiple objectives, which relate to the social, economic and environmental dimensions of sustainable development.

The strength of systems analysis lies in its ability to provide an integrative and systemic perspective on complex problems, in understanding how they interact, how threats and risks can multiply, and where feedbacks might exist making it possible to anticipate surprises or tipping points. Also, systems analysis provides a pathway to effective translation of research into impacts, by developing new tools and instruments to bridge sectors and actors, as well as temporal, social, and spatial scales from global to regional, national, and subnational, thus facilitating the task of policy- and decision-makers to address global and national challenges.

Framing the global sustainable development pathways

Faced with the challenge to identify smart pathways to meet our collective needs while respecting planetary boundaries and the growing interdependencies between nations and economies, it also becomes clear how valuable a systems approach can be in charting a course toward a sustainable future for all. At the global level, systems analysis can be employed to assess the degree of transformation of social and economic systems that is required to realise such a future. IIASA has been at the forefront of such scenario driven analysis to determine the implications of different development trajectories for meeting energy, climate, food security, and environmental objectives.

The World in 2050 (TWI2050) initiative is an example of a multi-party effort to further consolidate our understanding of the level of transformation that is globally required to collectively meet the SDGs and sustain progress thereafter. To do so, TWI2050 has conducted a first review of transformations related to six themes considered to encompass major dynamics and drivers of development: human capacity and demography; consumption and production; decarbonisation and energy; food, biosphere and water; smart cities; and the digital revolution (TWI2050, 2018).

While science can provide important guidance, transformations cannot be designed and imposed from the top down. Broad public support and buy-in are also needed for each transformation, and their implementation must draw on a broad range of communities and sectors (Sachs et al., 2019). The scientific community should take on the challenge of developing tools and methods for multi‑stakeholder engagement and co-design that help identify perceived trade-offs, ensure technical feasibility of long-term pathways, and explain the urgency to act. Owing to the large number of stakeholders involved and the distribution of responsibilities between national and local levels, it is a must to define integrated strategies and ensure participatory design and implementation of transformations at the national and subnational levels.

Embedding local solutions in global sustainability contexts

Having a global perspective on sustainability is a necessity. But it is alone insufficient for implementation. Implementation predominantly happens at the national and subnational levels.

The need for collaboration to address global sustainability challenges runs counter to current political trends, which emphasise national level priorities over international collaboration. Therefore, policy and economic solutions may be advocated to address the needs of an individual country, which may ultimately prove detrimental by ignoring the international implications of those measures and their longer-term consequences.

It is therefore critical that a dialogue between national and global level concerns is established and through this dialogue, development pathways are being evaluated. The challenge lies in capturing the heterogeneous conditions that drive local or national decision-making processes and relating these to global level concerns, such as climate change, and collective ambitions, such as the SDGs.

The Food Agriculture Biodiversity Land and Energy (FABLE) Consortium, which brings together knowledge institutions from developing and developed countries, for example recognises the absence of long-term integrated planning capacities in the land-use space. The aim of FABLE is to strengthen model-aided, integrated analyses to support decision‑making processes in advancing the transition to sustainable food and land-use systems. Co-led by IIASA and the Sustainable Development Solutions Network (SDSN), FABLE works with country teams in developing national land-use development pathways and assessing their compatibility with global sustainability concerns (FABLE, 2019).

With the need to integrate global and local level concerns to advance sustainable development capacities, it is important to advance the capacity of countries to carry out context specific, multilayered analyses. Global analyses can provide a general framework, but it is in dialogue with national and subnational contexts where integrated analysis becomes relevant for guiding programmatic and project level initiatives. In Brazil, efforts are underway to build the infrastructure for integrating spatial information at levels most meaningful for operational decisions (Amann et al., 2018).

The concept of Strategic Territorial Intelligence (STI), which is currently being implemented by the Brazilian Agricultural Research Organization, Embrapa (Box 8.2) seeks to combine various geospatial methods of analysis to link information from environmental, agrarian, agricultural, infrastructure, and socioeconomic frameworks of the rural area, capturing interactions and also developing and disseminating methods, protocols, and generic instruments and practices for territorial information access, organisation, and analysis, not only by highly specialised experts but also by territorial actors themselves (Embrapa, 2019). Opportunities to further link local and regional realities with global modelling efforts should be considered. This will help to accommodate different context and scale-specific functions in support of decision-making processes about sustainable development pathways.

Box 8.2. The concept of strategic territorial intelligence (STI)

Strategic Territorial Intelligence (STI) is a concept that employs multidisciplinary knowledge on territories, looking at their configurations, strengths and dynamics to generate information to empower research organisations, policymakers and decision makers, and communities in the promotion of relations, interactions, and synergies conducive to sustainable development. STI considers that cities, forests, rivers, farms, and infrastructures such as roads, railroads, ports, energy networks, etc. are components of the geographic space in constant interaction at different levels and scales and in diverse functional arrangements. These components should be understood and considered in a more systemic, integrated way - as analogies of components of the metabolism in living organisms.

One of the major tasks of STI is the access to, and organisation and integrated analysis of territorial information on natural, agrarian, agricultural, infrastructural, logistical, social, and economic dimensions, at various temporal and spatial scales. It also seeks the development and dissemination of methods, protocols, and generic instruments and practices for territorial information access, organisation, and analysis, which can be used not only by highly specialised experts but also by territorial actors themselves. STI could also become a powerful tool of communication, allowing the development of narratives to increase public awareness of the dimensions and complexity of development - beyond the economic use of resources - but also covering aspects such as landscape, culture, traditions, and many specificities and values that can be found or developed from a functional territory. Considered in larger scales or even at country scale, STI can help to clarify the multiplicity of functional spaces (territories) in a certain geography and the heterogeneous needs that must be taken into account in order to build good, ethical governance and sustainable development in such spaces. In summary, STI can be seen as a way to bring geographic and functional reasoning to planning and to promote governance improvement at regional and national levels.

Systems analysis could become key to bringing STI to reality, considering its power to explore the main interlinkages among systems operating in territories, with their broad range of possibilities, impacts, risks, and uncertainties. Systems analysis at the territorial level could also help indicate scientific research, models, databases, and applied analytical tools useful for the solution of major problems and challenges in current or potentially functional geographic spaces. Integrated assessment, as a form of systems analysis, would help also emphasise systems interlinkages and comprehensive impact assessment of options available.

Concluding remarks

Development is confronted with simultaneously addressing national level development ambitions while responding to global changes and concerns. Living in the “age of complexity”, this is a daunting undertaking. It requires the bridging of sectoral interests and recognition of interactions that may play out across different spatial and temporal scales. It requires maintaining a long-term focus on national and global objectives while securing the capacity to adapt and react to rapid change.

Systems analysis offers development co-operation an analytical framework for assessing interactions between multiple objectives. This includes insights into transformations at the global scale to attain development pathways that are in line with the ambitions of the SDGs and planetary boundaries. Embedded in this, there is the need to build the capacity for national development pathways, which allow countries to evaluate the economic and ecologic implications of strategic choices in an integrated manner.

The diagnostic support provided by systems analysis should be seen in the context of a broader push within development co-operation to visualise sustainable futures and provide a roadmap towards these futures. It requires a focus on developing narratives that guide the strategic planning and implementation processes. This has to be understood as an iterative effort where short-term investments are placed in the context of long-term strategic ambitions of countries as well as global level sustainability concerns, such as the Paris Agreement. To be effective, an emphasis on systems‑based approaches needs to be matched by the appropriate enabling framework, which allows for the diagnostics to feed into integrated planning and cross-sectoral implementation efforts, overcoming the institutional fragmentation and barriers that still predominates today. It also needs to be matched with appropriate communication and outreach strategies, so that awareness, understanding and ownership of socioeconomic transformations towards sustainable development pathways are generated, bringing to life a collective vision for a sustainable future for all.

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