root300I’m often asked when I first realized that research on complexity begun by the physical sciences, could apply in useful ways to political economy.

Actually, there was no moment of epiphany; it was an “evolutionary” process.

My first work was in economic history. In the early 1980s, after completing my dissertation at the University of Michigan, I joined the faculty at Caltech. There I met Professor Murray Gell-Mann, the Nobel Laureate in physics, whose thinking encompassed economic history as well.

It was the iconoclast Gell-Man who first warned me that the tools of contemporary economics were inadequate, that they were in fact based on outdated science, designed for systems in equilibrium or for treating one part of a system as a microcosm of the whole. But social systems are not in equilibrium. They react to their environment, and their environment changes in response to them. The sum of the parts rarely equals the whole. The tools of economists miss the internal dynamics and system-level feedbacks, and therefore fail to take note of the implications of complexity on policy.

Gell-man went off to help establish the Santa Fe Institute, which undertook pioneering work in the study of complex systems.

Meanwhile, hoping to understand the escape from mass poverty and to discover the missing ingredient of economic growth, I was pulled in another direction, toward the “new institutional economics” of Ronald Coase, Douglass North and Oliver Williamson, seeking the `rules of the game’ that incentivize the behavior of individuals and motivates their social interactions.

Little did I realize that this intellectual journey would open doors into the policy environment, especially after the fall of the Eastern block revealed the weakness of centrally planned economies. I had many opportunities to introduce and transplant the institutions and incentives of modern capitalism to these societies, where the cultural antecedents were absent.

I learned a great deal about social development during this period and, in retrospect, am grateful for the opportunities to test the theories of new institutional economics. By then I was at the University of Pennsylvania, and my career took turned toward global development. For the next few decades, in addition to holding academic positions at various universities, I became involved with programs under USAID that were seeking what one might call “holistic” approaches to economic development.

I studied institutional capacity in French-speaking Africa. I traveled for the World Bank studying the economies of East Asia. I spent much of the decade studying and living in East Asia, consulting for the U.S. State Department, for the UN Development Programme, for the OECD, (Organization for Economic Cooperation and Development), for the IMF and the World Bank, the Asian Development Bank, and elsewhere.

That list is not meant to impress. It’s to show that the demand for expertise on building institutions in third world environments became a major specialization in the development community.

But what I was seeing was this: it wasn’t working.

Even after the reach of the new institutional economics expanded to include social norms, ideological values, asymmetric information, strategic behavior, voting, monitoring and enforcement, it failed to encompass an understanding of how dynamic feedback effects are transmitted or change over time. Like the previous approaches to setting goals and designing blueprints for filling gaps in social capacity, it rarely proved successful. In social systems one cannot intervene with only one effect. The paradigm of the New Institutional Economics was not wrong, it was just part of a much larger picture.

Then in 2001, as an adviser to the Undersecretary of the U.S. Department of the Treasury on development finance, I became part of the spectacle I was watching. From a front-row seat in the decision-making process, I observed that the tools, models, and frameworks with which we approach global development – and with which we judge the effect of our interventions – are inadequate.

More important, as a member of a large federal bureaucracy, I was in neither the right time nor place to revise my beliefs. The learning occurs before, not after, because once inside, one is overcome by the immense inertia of organizational protocol and routine; people do things because that is how things are done. What they see is how the organization sees.

After leaving the Treasury Department, I tried to confront that inertia with two books, asking questions that were being avoided.

Among the nations that are developing emerging economies, few have made significant progress in establishing a modern commercial/industrial order under democracy or a rule of law similar to that of the old nations of Western Europe and the United States. Capital and Collusion (2005) explored the anomalous policies of those nations that successfully engage the world economy and transform their productive capacities, despite an absence of institutional convergence, incentives to collude, endemic corruption, and mismanagement (hence the emphasis on “collusion” in the title). Then in 2008, Alliance Curse looked at the unanticipated consequences of U.S. aid and interventions on the trajectories of key nations that were the major beneficiaries of U.S. assistance. It asked two unfashionable questions: Why in many instances, did aid programs add to the persistent ungovernability and policy failure of developing regions, sometimes leaving recipients with diminished social and institutional capital? And why were the recipients consistently among the most corrupt regimes in the world? Writing Alliance Curse taught me that the narrative of globalization, and that of liberal internationalism encased within it, needs an entirely new script. The grand theories of social change, of which modernization theory was bedrock, failed to establish robust correlations between our expectations and what actually occurred. Its presumption that political democratization would follow naturally from economic development was wrong. Few transitions to modernization have been peaceful, and many different paths to modernization are possible.

Only by fully entering into the research of complex adaptive systems in order to understand the evolution of social institutions in the modern world have I been able to construct realistic formulations of the problems that have occupied much of my professional life.


Click here to view Hilton Root’s Curriculum Vitapdf-icon

Twitter icon


Hilton L. Root
Professor of Public Policy