Entrepreneurial approaches to Wicked problems.

Classnotes for Class 3 (September 16)

1. Revisiting Wicked problems

"Wicked problem" is a problem that is difficult or impossible to solve and can only be re-solved over and over again. Because of its nature, specifically the complex interdependencies that create and sustain these problems, any effort to solve on aspect of a wicked problem is likely to reveal and/or create other problems.

The concept was introduced by Horst Rittel and Melvin M. Webber in a 1973 treatise contrasting "wicked" problems with relatively "tame," soluble problems in mathematics, chess, and puzzle solving (check out the paper in this link).

2. Poverty (lack of economic development) in the Global South is definitively a wicked problem.

Paul Collier tells us in Chapter 1 of his book that the real challenge of development is that there is a group of countries at the bottom that are falling behind, and often falling apart. These countries are concentrated in Africa and Central Asia, with scattering elsewhere. He further argues that all societies used to be poor. Most are now lifting out of it, why are others stuck? The answer is traps.

3. Last class you guys discussed two of these traps: The conflict trap and the Natural Resources Trap. This class we will discuss the Landlocked with bad neighbors trap, and the Bad Governance trap.

3.1. First let’s review the conflict trap and the natural resources trap.

  • The conflict trap: For Collier you cannot trust the rebel discourse of concern for social justice: what else do you expect them to say? He argues that the sources of war are less romantic and political and more economic and natural:
  • Low initial sources of income (poverty)
  • Slow growth and, of course, decline (hopelessness)
  • Ease of rebellion because the state is weak. “Rebel leader Laurent Kabila, marching across Zaire with his troops to seize the state, told a journalist that in Zaire rebellion as easy: all you needed was $10,000 and a satellite phone.” (p. 21).
  • Dependence upon primary commodity exports
  • Geography matters: more civil war in mountainous countries.
  • Ethnic dominance
  • The experience of having been through a civil war roughly doubles the risk of another conflict.
  • The natural resources trap. “A low-income, resource-rich society that either is an ethnically diverse autocracy or acquires the instant lopsided democracy of electoral competition without checks and balances is likely to misuse its opportunities in ways that make it fail to grow.” (p. 51).
  • The Dutch disease: The resource exports cause the country’s currency to rise in value against other currencies. This makes the country’s other export activities uncompetitive.
  • The boom-and-bust phenomenon also makes it very hard for electorates to sort out when a government is making mistakes.
  • Resource rents make democracy malfunction (problems with checks and balances). But autocracy is also bad because of ethnic diversity.

3.2. The landlocked with bad neighbors trap.

  • Let’s make a list of landlocked countries (visit list of countries)
  • Let’s compared with a list of per capita income (visit list in wikipedia)
  • What about the neighbors….

3.3. Bad Governance -- Country Policy and Institutional Assessment

  • Review of basic concepts:
  • What are the functions of government? What is a minimalist government?
  • What are checks and balances?
  • What are the tools available to government to intervene in the economy?