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A systems approach to systems restoration

A great article in The Guardian about the biggest river restoration project in Europe which is “on the way to being one of the most beautiful nature areas in Europe.”.

This is taking place in Southern Netherlands on the Meuse River.  reading the article, it struck me, how systems and interrelationships si key elements and outcomes of this project which involves a number of interventions (including natural interventions and rewilding) along the river all of which is resulting in the regeneration of the whole ecosystem in and around the river.

Restored, the Meuse River

“Construction work has already been completed along 50km of the Meuse River floodplain as part of the Border Meuse project to undo 500 years of world-renowned Dutch water engineering. Big infrastructure is at the heart of the Dutch “offensive” – as opposed to “defensive” – approach to sorting out rivers, which involves relandscaping entire catchments, rather than rewetting specific at-risk areas. This approach is particularly revolutionary given that the seed for this project was planted decades ago. By contrast, the UK has only started thinking about implementing natural solutions at scale in the past few years.

“Driving the length of the restored river – which runs from Maastricht to Roosteren – is like being in a time capsule. Some of the older sections of the project, further upstream, are already thronging with life. Borgharen, an area which has been farmed since at least Roman times, was one of the first sites to be let go. Dozens of sand martens are speeding into the cliff by the river to feed their chicks; there are blackcaps, stonechats, skylarks and swallows in the sky.”

“The river shape-shifts as it winds through the landscape. It is home to otters and beavers, and wolves – which are successfully spreading through the Netherlands – are believed to be watching the valley and could move in. Free-roaming animals such as galloway cows and konik horses (whose carcasses are sold as wild meat) graze along the banks. It is a reminder that nature isn’t picky – it will move into an old construction site and quickly transform it into something beautiful. People are free to walk the length of the river along a tangle of footpaths.”

Read the full article here

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Italian politics and an example of quick but insightful political economy analysis

Is quick and insightful political economy analysis possible? Or do quick and insightful contradict each other?

This question came to my mind while listening to one of an episode about Italy of One & Tooze the podcast hosted by Foreign Policy.

But let’s go step by step.

What is a political economy analysis?

Sarah Collinson in 2003, edited for the Overseas Development Institute a series of case studies on political economy analysis in the humanitarian sector. These were published in a paper with the title: Power, livelihoods and conflict: case studies in political economy analysis for humanitarian action.

In that paper, she provides the following definition:

Political economy analysis is concerned with the interaction of political and economic processes in a society: the distribution of power and wealth between different groups and individuals, and the processes that create, sustain, and transform these relationships over time

Political economy analysis reflect the belief that political concerns and economic concerns are part of and shape the development process and result from the constant bargaining that takes place over the use of limited resources in any country and any context.

We cannot think or try to understand social and economic problems without considering the inference that politics, incentives, and power structures have on those problems.

These studies are often commissioned as part of the design or international cooperation programme. The use of political economy finings varies. Sometimes they are one-off studies which are then put on a shelf. Other times, they inform discussions within programme teams and partners on the best ways forward.

These studies usually involve a team spread across different countries, some travels, and several months of work to review existing literature, conduct interviews of key informants, analyse the data, and write a report. I know this because I have led some political economy studies myself.

A few months ago, Cecilia Lutrell, sent me a paper by Pablo Yanguas that describes different ways to do political economy depending on the time and resources available: Making political analysis useful: Adjusting and scaling.

His main point is that political economy studies have to be useful. In order to be useful, they need to consider and adapt to the needs of a team, a programme and the resources available. In the paper he describes:

  • One hour political economy studies
  • One week of political economy studies
  • One month of political economy studies

I was a bit challenged by Yanguas’s suggestions. I realised I was too stuck on one way to to political economy and that we need to be adaptive and responsive to needs and consriucmatcnes when teend as ocindctign thes etsuides. Yanguas paper gave me soem concrete ideas on how to to that.

Then, a few weeks later, I was in the gym and listened to the One & Tooze podcast. To me Adam Tooze presented essentially a political economy of Italian politics which seems to me a very good example of a quick but insightful political economy of Italian politics. he must have prepared before teh podcast recording. He has accessed some relevant information nd resource sand summarised them for the episode.

Poltiical eocnpocmy cna be quick and insightbullf at the same time.

Anyhow, here the link to the full episode: Mario Draghi’s resignation means for Italy and Europe.

As always, please let me know what you think.

Photo credit: Ruslan Bardash on Unsplash

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The political economy of cryptocurrencies: all Ponzi scenes topple eventually

Posting the article of Robert Reich from The Guardian on the politics of cryptocurrencies, their influence on political systems, and the dangers of being back in the wild west finances of the 1920s

The Crypto Crash: all Ponzi schemes topple eventually

One week ago, as cryptocurrency prices plummeted, Celsius Network – an experimental cryptocurrency bank with more than one million customers that has emerged as a leader in the murky world of decentralized finance, or DeFi – announced it was freezing withdrawals “due to extreme market conditions”.

Earlier this past week, Bitcoin dropped 15% over 24 hours to its lowest value since December 2020. Last month, TerraUSD, a stablecoin – a system that was supposed to perform a lot like a conventional bank account but was backed only by a cryptocurrency called Luna – collapsed, losing 97% of its value in just 24 hours, apparently destroying some investors’ life savings.

Eighty-nine years ago, Franklin D Roosevelt signed into law the Banking Act of 1933 – also known as the Glass-Steagall Act. It separated commercial banking from investment banking – Main Street from Wall Street – to protect people who entrusted their savings to commercial banks from having their money gambled away.

Glass-Steagall’s larger purpose was to put an end to the giant Ponzi scheme that had overtaken the American economy in the 1920s and led to the Great Crash of 1929.

Americans had been getting rich by speculating on shares of stock and various sorts of exotica (roughly analogous to crypto). These risky assets’ values rose solely because a growing number of investors put money into them.

But at some point, Ponzi schemes topple of their own weight. When the toppling occurred in 1929, it plunged the nation and the world into a Great Depression. The Glass-Steagall Act was a means of restoring stability.

But by the 1980s, America forgot the financial trauma of 1929. As the stock market soared, speculators noticed they could make lots more money if they could gamble with other people’s money – as speculators did in the 1920s. They pushed Congress to deregulate Wall Street, arguing that the United States financial sector would otherwise lose its competitive standing relative to other financial centers around the world.

Finally, in 1999, Bill Clinton and Congress agreed to ditch what remained of Glass-Steagall.

As a result, the American economy once again became a betting parlor. Inevitably, Wall Street suffered another near-death experience from excessive gambling. Its Ponzi schemes began toppling in 2008, just as they had in 1929.

The difference was this time the US government bailed out the biggest banks and financial institutions. The wreckage was contained. Still, millions of Americans lost their jobs, their savings, and their homes (and not a single banking executive went to jail).

Which brings us to the crypto crash.

The current chair of the Securities and Exchange Commission (SEC), Gary Gensler, has described cryptocurrency investments as “rife with fraud, scams, and abuse”. In the murky world of crypto DeFi, it’s hard to know who provides money for loans, where the money flows, or how easy it is to trigger currency meltdowns.

There are no standards for risk management or capital reserves. There are no transparency requirements. Investors often don’t know how their money is being handled. Deposits are not insured. We’re back to the wild west finances of the 1920s.

Before the crypto crash, the value of cryptocurrencies had kept rising by attracting an ever-growing number of investors and some big Wall Street money, along with celebrity endorsements. But, again, all Ponzi schemes topple eventually. And it looks like crypto is now toppling.

Why isn’t this market regulated? Mainly because of intensive lobbying by the crypto industry, whose kingpins want the Ponzi scheme to continue.

The industry is pouring huge money into political campaigns.

And it has hired scores of former government officials and regulators to lobby on its behalf – including three former chairs of the Securities and Exchange Commission, three former chairs of the Commodity Futures Trading Commission, three former US senators, one former White House chief of staff, and the former chair of the Federal Deposit Insurance Corporation.

Former treasury secretary Lawrence Summers advises crypto investment firm Digital Currency Group Inc and sits on the board of Block Inc, a financial-technology firm that is investing in cryptocurrency-payments systems.

If we should have learned anything from the crashes of 1929 and 2008, it’s that regulation of financial markets is essential. Otherwise, they turn into Ponzi schemes that eventually leave small investors with nothing and destabilize the entire economy.

It’s time for the Biden administration and Congress to regulate crypto

Photo credit: Photo by Maxim Hopman on Unsplash

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Systems complexity

Wonderful illustration by #VirpiOinonen on #systems and #complexity. Made me think about the metaphor of missing the forest by focusing only on a tree. It reminds me of the times I sat with colleagues in offices planning programme results and outcomes four or five years down the line and the short time we had to look at what was outside the window or the door like Virpi shows in her drawing.

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What does systems thinking mean to you?

As I continue to explore and learn about systems thinking and how to apply it to the research and development work I do, I have started a short and self-taught course with the Open University on System Thinking in Practice.

I found quite interesting the question that is posed in the introduction of the course:

What does systems thinking mean to you?

As I am formulating my answer, I read the answers of some of the previous students which I have copied below. At the same time, if you have some minutes to spare, I am really interested to hear your answer to that question.

So, over to you now: what does systems thinking mean to you?

Let me know by answering using the Leave a Reply section below the post and thank you for taking the time to answer 🙂

Here are some of the answers posted on the OU course pages:

Frances: ‘Systems thinking is important for me because it helps extend my apparently natural way of thinking, providing tools for handling the complexity more adequately and helping deepen understanding; particularly regarding interactions – where once I would have known they were there but remained unsure of quite how some were operating and affecting the basic ‘central’ scenario. Also, by understanding more of the complexity I find this aspect helps me to retain an open mind on most topics, aids reducing prejudice and helps me work to what I feel may be a more balanced viewpoint.’

John: ‘It [systems thinking] allows me to tackle problems not only in a scientific way but in a holistic way which demonstrates a caring approach to all persons at all levels connected with the problem or system(s) involved.’

Sarah Smith: ‘Systems thinking is important for me because it has given me a new and better way to view complex situations, both in organisations and personally.’

Bob Saunders: ‘I recognise the need to take a holistic view of situations in my field of expertise – project management. So many projects fail because consideration of the human element is omitted, or badly covered by the project manager. “Systems” has helped me to grapple with the complexities.’