Handbooks of Research on Public Policy series
Edited by Robert Geyer and Paul Cairney
Chapter 26: The international financial crisis: the failure of a complex system
This chapter will evaluate the ongoing global international financial crisis since 2007 using a complex systems perspective. The global financial system has the attributes of a complex social system outlined in the introduction to this book. As a result, it requires a systemic application of policy interventions. The chapter explores the relevance of complex systems methodology and concepts to theorizing about the international political economy. The international and national economies are argued to be systems that display the behaviour previously identified by scientists and social scientists as symptomatic of a complex structure. At the core of this are dynamic and unpredictable interactions and feedback. A number of key concepts used previously by social scientists who apply complexity theory, and by the editors of this volume, are discussed with reference to their possible explanation of economic behaviour. In particular, this chapter applies the seminal work of the environmentalist and systems theorist, the late Donella Meadows, and seeks to develop further her conceptual articulation of how policy makers can intervene in economic systems and the current crises. Key concepts include reinforcing feedback, balancing feedback, and self-organization.
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