“Self-Governance is possible”: an interplay between Complexity and Stability
Thursday, April 19th, 2012 by Antonio Manzalini“Tragedy of the Commons” was published for the first time by Garrett Hardin in 1968: theory concerns a dilemma in which multiple individuals, acting independently according to their self-interest, ultimately destroy shared limited resources (commons) even if it is clear that it is not in anyone’s interest to happen. However, when the economists start looking at biological ecosystems (humans a part), he then discovered that they work very well.
So let’s focus for a while on biological ecosystem.
When talking about ecosystems we know that an assembly of a certain number of species, each of which with feedback mechanisms that would ensure the population’s stability were it alone, can show sharp transition from overall stability to instability as the number and strength of interactions among species increase. In fact, this is a systemic behavior happening in complex systems, of which biological ecosystems are a category.
Well, this is the same kind of systemic risk of the recent financial crisis. In this paper “Systemic Risk in Banking Ecosystems” they draw analogies with the dynamics of ecological food webs and viral networks to explore the interplay between complexity and stability in simplified models of financial networks. They conclude the paper with some lessons that can be drawn for minimizing financial networks meltdowns. First more efforts are needed for assessing the system-wide characteristics of the financial network (e.g. risk management models). Another important aspect is need of having modular configurations to prevent instability contagion infecting a whole network: in fact, this is limiting the potential for cascades.
Now the third piece of the puzzle. Prof. Elinor Ostrom, (Indiana University) was awarded with the 2009 Nobel Prize in Economic Sciences (shared with Oliver E. Williamson) for the results she achieved in analysing how ecosystems communities are managing resources to their advantage. Prof. Elinor Ostrom and her collaborators have argued that consensual, self-generated governance can limit use of resources to sustainable levels, maintaining ecosystems in equilibrium. To learn more have a look at this paper about the Polycentric Governance of Complex Economic Systems. Self-governance, in ecosystems with humans, is then possible.
Well, we’ve elaborated several time about the vision of future networks being the communication fabric of ecosystems, where different Players are competing and cooperating. Let’s apply above reasoning to this. The (Nobel) conclusion is that future networks’ self-governance is possible provided we find and apply those autonomic rules governing the delicate interplay between complexity and stability. And these rules may have far reaching implications and impacts from a socio-economic viewpoint.
In this, Nature is ahead of us.





