A complexity perspective on institutional design

The task of designing effective economic and political institutions requires substantial foresight. The designer must anticipate not only the behavior of individual actors, but also how that behavior will aggregate. Rising complexity brought about by increases in speeds of adaptation, diversity, connectedness, and interdependence make institutional design all the more challenging. Given the focus on equilibria, the extant literature on mechanism design might appear incapable of coping with this complexity. Yet, I suggest that a deeper engagement with the origins of the mechanism-design framework reveals insights that may help us design robust, adaptive institutions that can harness complexity
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DOI 10.1177/1470594X11433745
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