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  • James Balzer

Agile Governance for a Resilient World: A Critique of Traditional Governance in a VUCA Era




Monocentrism in a VUCA Era


"We enter the next decade with interest rates at 5,000-year lows, the largest asset bubble in history, a planet that is heating up, and a deflationary profile of debt, disruption and demographics. We will end it with nearly 1bn people added to the world, a rapidly aging population, up to 800mn people facing the threat of job automation and the environment on the brink of catastrophic change. At the same time, 3bn more people will be connected online and global data knowledge will be 32x greater than today. The social, political and economic responses to these challenges, all heading to a boiling point this decade, will overhaul traditional paradigms."

- Bank of America Merrill Lynch, 'Transforming World: The 2020s' Report (Bank of America Merrill Lynch, 2019)


Unquestionably, the world faces a myriad of complex and multidimensional challenges, manifesting as chronic stresses and acute shocks. These are often categorised as ‘wicked problems’ - problems which have enigmatic, multi-causal derivations and even more unclear solutions. Accordingly, many classify the contemporary era as ‘VUCA’ - Volatile, Uncertain, Complex and Ambiguous. Disruption across social, economic, environmental, political and technological frontiers has become ubiquitous, and rapid change is the tenor of our times.




Figure 1 - The changing paradigm of global stresses

Source: Bank of America Merrill Lynch (2019)





Figure 2 - The most pressing threats of our time, and their causal pathways

Source: World Economic Forum (2021)


For a long time, public policy discourse has delegated governments as the solution providers to VUCA manifestations. This is at all levels of government - from multilateral organisations to the localised focus of municipal governments. Working in an often monocentric ‘command and control’ vertical coordination, government institutions are meant to collaborate and act in a coherent manner to proactively mitigate problems and reactively adapt to them.


In the past, this system has been sufficient, particularly prior to the era of rapid disruption the world finds itself in, characteristic of the Fourth Industrial Revolution. However, the rapid interconnection of the world via digital means and broader implications of Globalisation have rapidly led to an inextricable coupling of global phenomena at a much faster pace than traditional institutions could keep up with (see World Economic Forum, 2018).


COVID: The Canary in the Coal Mine


Consequently, the proliferation of VUCA threats, both in their quantity and complexity, beckons a reconsideration of monocentric governance and the role of government more broadly. COVID-19 was the canary in the coal mine for this revelation, especially through witnessing the ‘bureaucratic autonomy’ of traditional governmentality that stifled agile governance throughout the pandemic. As stated by Brown et. al (2021, p.6) “the problems governments need to solve are increasingly complex and horizontal, yet government is organised by vertical institutions and hierarchies”.


The World Economic Forum report titled ‘Agile governance: Reimagining Policy-making in the Fourth Industrial Revolution’ (World Economic Forum, 2018) critiques the bureaucratic and over-centralised modes of government and its inapplicability in regard to the growing proliferation of ‘wicked problems’. As the report states, “an implosion of confidence is occurring around the world as trust in mainstream institutions... is at its lowest point...there is an urgent need for a faster, more agile approach to governing emerging technologies and the business models and social interaction structures they enable” (Ibid, p.4).


In accordance with such promulgations, the response to COVID-19 has demonstrated the organisational vulnerabilities and incapabilities of traditional monocentric government institutions (Patrick, 2020). Even before the pandemic, Bauer & Ege (2016) discussed such through analysing the ‘bureaucratic autonomy’ of multilateral institutions, stifling decision making processes through a lack of ‘autonomy of will’ and ‘autonomy of action’. This is a result of the top-down, consensus driven and therefore politically guided decision making and prioritisation processes (ibid). Van Hecke et. al (2021) also discussed the influence of such characteristics in the COVID-19 pandemic, highlighting the WHO’s financial and procurement constraints impeding its ‘autonomy of action’ and its disjointed governance method leading to incoherent policy and program coordination. Additionally, limits on multilateral agencies' bureaucratic autonomy derive from their dependence on member states’ own priorities, resource constraints and governance structures (Ibid). For example, WHO has been accused of capitulation to political pressures from the People’s Republic of China, allegedly leading to a downplaying of the risk of COVID-19 (Babones, 2020). Furthermore, the G7 and G20 are subject to criticism regarding its incapacity to address global crises, similarly due to the lacklustre ‘autonomy of action’ and ‘autonomy of will’ (see Bernes, 2020; World Economic Forum, 2021).


Accordingly, The World Economic Forum (2021) also highlights the overarching risk of diminishing ‘institutional authority’ in undermining global resilience and risk management. This is exacerbated by inadequate ‘information collection and sharing’, with early response efforts to the pandemic hindered by sub-par data-sharing systems that would lead to real-time data provision and analysis (ibid). This highlights the monocentric and top-down sentiment guiding these institutions, and the need for innovation to engender resilience outcomes. Conjunctionally, The World Economic Forum (2021) also mentions the inadequacies in governmental decision-making, particularly including the establishment of existing pandemic mitigation doctrines, frameworks and strategies that allowed for rapid preparedness and action. This includes the polititicisation of the pandemic in certain jurisdictions, resulting in the ignoring of expert public servants and advisory bodies (see Maxmen & Tollefson, 2020). This was compounded by general public underlying ill-faith towards the media and scientific bodies, undergirded by the salience of misinformation (Ibid).


Historically, countries have used ‘ex post facto’ analysis of macroeconomic indicators to analyse trends and inform decisions, complemented by surveys and polling to test reactions to policies. However, in 2020, governments were forced to make a series of decisions in a short period of time—with limited information— compared with prior crises (Assi et. al 2020). As stated by World Economic Forum (2021, p.41), “as traditional policy development processes lag behind the rapid pace of technology innovation, citizens increasingly expect the private sector and other non-government entities to take on new responsibilities and develop new approaches to support the diversification and speed of governance”. Additionally, as stated by Duke Corporate Education (2019, p.5) “Today’s organizations are suffering from a severe case of structural lag where their internal time signatures are increasingly out of sync with the external pace of change”.


Agile Polycentricity - A Reimagination of Governance


Such concerns beckon a reconsideration of the role traditional government institutions can play in addressing the VUCA threats pervasive in our times.


Alternative ideas are well propagated through ‘The Bloomington School’, underpinned by the concept of ‘polycentrism’ and a dissatisfaction of exclusively monocentric ‘top-down’ approaches to governance (see Indiana University Bloomington, n.d.). In particular, The Bloomington School highlights the ‘human capacity for self-governance’, indicating there is rarely a single ‘best solution’ to wicked problems, but there is a role decentralised, individual and community decision-making can have in determining a more cohesive and resilience way forward (Ostrom, 2010). Rather than presume what is in the citizens’ interests as analysts, understand how citizens or group members understood these for themselves, and then how they chose to act upon them. Put cogently, “traditionally, governance in the public sense has been the remit of governments … However, governance is an activity that also occurs daily across privately held organizations, within formal and informal civil society organizations” (World Economic Forum 2018, p.6).


In particular, there is reasonable consternation towards the role monocentric government institutions play in facilitating ‘resilience’. ‘Resilience’, to paraphrase The Rockefeller Foundation, is a multifaceted approach to understanding how to prevent societal shocks and stresses, and how to recover from them once they occur (see Rockefeller Foundation, 2015). In particular, it focuses on key Environmental, Social and Governance (ESG) facets of society, through the pillars of ‘Health and Wellbeing’, ‘Economy and Society’, ‘Infrastructure and Ecosystems’ and ‘Leadership and Strategy’. Figure 3 highlights this framework, and provides sub-dimensional details. Importantly, it demonstrates the key functional aspects of resilient societies, including ‘flexible’, ‘redundant’, ‘robust’, ‘resourceful, ‘reflective’, ‘inclusive’ and ‘integrated’.


Figure 3 - ‘Resilience’ Framework, as Defined by the Rockefeller Foundation

Source: The Rockefeller Foundation (2015)


Additionally, Assi et. al (2020) propagates core principles and an established framework for engendering stronger societal resilience, as displayed in Figure 4.


Figure 4 - Governmental Resilience Framework

Source: Assi et. al (2020)


In particular, Assi et. al (2020) discusses specific methods for achieving such outcomes, including the faster and more comprehensive multi-source data gathering and analysis capabilities some governments implemented. This includes countries’ use of dashboards and real-time rendering of data, providing country-wide access to government efforts and responses to COVID-19. Such thinking promulgates the key principles of polycentricity and ‘Agile Governance’ - defined as “[shifting] the process of generating and enforcing top-down policies into a multistakeholder approach…It embraces constant evaluation or feedback through impact assessments” (Manantan, 2020).


In responding to the pandemic, there were some examples of notable success in enacting polycentric and agile governance. Namely, countries like South Korea and Taiwan demonstrated such governance principles (Manantan, 2020). In Taiwan, the National Health Insurance Administration and the National Immigration Agency created a joint-database enabling a risk assessment approach to identify possible passenger infections, which took QR code data and travel history and jointly shared such information among Taiwanese hospitals, pharmacies and clinics to extrapolate passenger infectivity risk levels. Likewise, Taiwan’s Digital Minister coordinated civil-society organisations to develop a mask supply and demand platform, which used big data available on the health insurance database to determine the availability of masks in local pharmacies or health centres using an online real-time map.


Furthermore, at the onset of the pandemic in South Korea, the Korean Center for Disease Control and Prevention (KCDC) utilised the Global Epidemic Prevention Platform (GEPP) system. The digital platform integrates global infection data from the national health authority and mobile data from Korean Telecom. Under the oversight of the KCDC, aggregated data is applied from the GEPP system for real-time monitoring of potential and confirmed cases from those who are traveling or visiting high disease risk-areas. Korean residents and citizens could also communicate or learn the latest information on infectious disease.


Likewise, Assi et. al (2020) highlights the need for “new forms of partnership with the private sector”, noting the need for more proactive efforts in this regard. Throughout the pandemic, good examples of this have included the temporary deregulation of competition laws in Australia, allowing supermarket competitors Woolworths, Coles and Aldi to coordinate supply chain resilience activities, ensuring Australians had sustained access to groceries. Another example of this was the World Economic Forum’s COVID Action Platform, aggregating up-to-date information from global governments, the WHO and vaccine manufacturers with over 1800 business executives and leaders. This in turn supported the supply of essential equipment through the Pandemic Supply Chain Network across a multitude of stakeholders (Ibid).


As the world continues to face more complex, multifaceted problems, the institutions responsible for reacting to them need effective reform in their structure, operations and capacity to react. Such outcomes are guided by polycentric and agile governance principles - underpinned by effective innovative and multi-stakeholder avenues for achieving such. Traditional monocentric and vertical institutions have evidently become outdated, and the world is moving at a pace substantially faster than the capacities of such governance models. This article provides some insight into what needs to be achieved in regard to such reforms, and how this might occur.

 

Bibliography


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