IN QUEST OF A THEORY OF ADAPTIVE CHANGE

C. S. Holling, Lance H. Gunderson, and Donald Ludwig

In all things, the supreme excellence is simplicity. —Henry Wadsworth Longfellow

In the last decades of the twentieth century, cascades of changes occurred on a global scale. Collapse of the former Soviet Union and its continuing struggle for stability and for ways to restructure have propagated international reverberations far beyond its borders. Increases in connectivity through the Internet are stimulating a flowering of novel experiments that are affecting commerce, science, and international community. Migrations of people, some forced by political upheaval and some initiated as a search for new opportunity, are both threatening and enriching the international order. There have been dramatic changes in global environmental systems—from climate change that is already upon us, to the thinning of the stratospheric ozone layer. Novel diseases have emerged in socially and ecologically disturbed areas of the world and have spread globally, through the increased mobility of people. The tragedy of AIDS, and its origins, transformation, and dispersion because of land-use and social changes, is a signal of deep and broad changes that will yield further surprises and crises. More and more evidence indicates that global climate change has already produced an increase in severe weather that, combined with inappropriate coastal development, has caused dramatic rises in insurance claims and human loss of life. Still other more subtle changes linking ecological, economic, and social forces are occurring on a global scale, such as the typical example described in Box 1-1, regarding the collapse of fisheries.

These examples of global environmental change signal that the stresses on the planet have achieved a new level because of the intensity and scale of human activities. Are these activities leading to a world with impoverished natural endowments, even deeper inequities among peoples, and the ultimate collapse of civil society? Or is that too easy a conclusion? Contradicting projections of collapse is the possibility that human foresight and innovation can reverse those trends and develop paths that sustain natural diversity and create opportunity.

We do not intend to evaluate the degradation and potential for collapse of human and natural systems in this book. That has been done as well and as objectively as can be expected elsewhere (McNeill 2000). Even raising the question triggers controversy that is not particularly well founded on objective fact or adequate theory.

Instead, our purpose is to develop an integrative theory to help us understand the changes occurring globally. We seek to understand the source and role of change in systems—particularly the kinds of changes that are transforming, in systems that are adaptive. Such changes are economic, ecological, social, and evolutionary. They concern rapidly unfolding processes and slowly changing ones—gradual change and episodic change, local and global changes.

The theory that we develop must of necessity transcend boundaries of scale and discipline. It must be capable of organizing our understanding of economic, ecological, and institutional systems. And it must explain situations where all three types of systems interact. The cross-scale, interdisciplinary, and dynamic nature of the theory has lead us to coin the term panarchy for it. Its essential focus is to rationalize the interplay between change and persistence, between the predictable and unpredictable. Thus, we drew upon the Greek god Pan to capture an image of unpredictable change and upon notions of hierarchies across scales to represent structures that sustain experiments, test results, and allow adaptive evolution.

We start the search for sufficient theory by turning to examples where there is adequate history—examples of interactions between people and nature at regional scales. There we see patterns of change that are similar to the more recent global ones—but examples where there has been more history of response. These include dramatic changes in the ecosystems and landscapes of ecosystems, with subsequent changes for society and economic conditions. There have been spasms of biodiversity loss as a consequence of the intersection of climate extremes, poor land use, and global economic pressures. In places, such as in some nations in southeast Africa, these exacerbate political instability. The results are not only erosion of the natural world but also erosion of trust in the institutions of governance. But in other places there has been notable learning. Degraded systems have been restored, organizations restructured, and management revitalized.

How do we begin to track down the cause of the failures and explain the occasional successes? Consider some recent resource management failures:

• Some fisheries have collapsed in spite of widespread public support for sustaining them and the existence of a highly developed theory of fisheries management.

• Moderate stocking of cattle in semiarid rangelands has increased vulnerability to drought.

• Pest control has created pest outbreaks that become chronic.

• Flood control and irrigation developments have created large ecological and economic costs and increasing vulnerability.

A number of cases point to a common cause behind such examples of failure of management of renewable resources (Holling 1986; Gunderson et al. 1995a). In each case, a target variable (fish stock, meat production, pest control, or water level) is identified and successfully controlled. Uncertainty in nature is presumed to be replaced by certainty of human control. Social systems initially flourish from this ecological stabilization and resulting economic opportunity. But that success creates its own failure.

We now know that the stabilization of target variables like these leads to slow changes in other ecological, social, and cultural components—changes that can ultimately lead to the collapse of the entire system. A pattern of events emerges: at the extreme, the ecological system fails, the economic system reconfigures, and the social structures collapse or move on. Moderate, stabilized grazing by cattle reduces the diversity of the rangeland grasses, which eventually leads to fewer drought-resistant species, less permeable soils, and poor water retention. Pest control leads to more luxuriant growth of the host plants and hence creates more favorable conditions for survival and reproduction of the pest. Effective flood control leads to higher human settlement densities in the fertile valleys and a large investment in vulnerable infrastructure. When a large flood eventually overwhelms the dams and dikes, the result is often a dramatic reconfiguration of the social and economic landscape along the river. And, as described in Box 1-1, the initial success of fisheries leads to an increase in investment and overexploitation of the resource. When the fish stock shows signs of distress, management agencies become paralyzed, the public loses trust in governance, and human institutions are unable to make the required adjustments.

The pattern common to these examples leads to the first of two paradoxes that complicate any quick and easy predictions of collapse and disaster:

• Paradox 1. The Pathology of Regional Resource and Ecosystem Management

Observation: New policies and development usually succeed initially, but they lead to agencies that gradually become rigid and myopic, economic sectors that become slavishly dependent, ecosystems that are more fragile, and a public that loses trust in governance.

The Paradox: If that is as common as it appears, why are we still here? Why has there not been a profound collapse of exploited renewable resources and the ecological services upon which human survival and development depend?

The observed pattern of failure can be analyzed from an economic and human behavioral standpoint. According to one view, resources are appropriated by powerful minorities able to influence public policy in ways that benefit them. Hence inappropriate measures such as perverse subsidies are implemented that deplete resources and create inefficiencies (Magee, Brock, and Young 1989). A fundamental cause of the failures is the political inability to deal with the needs and desires of people and with rent seeking by powerful minorities.

But as part of the fundamental political causes of failure, there are, as well, contributing causes in the way many, including scientists and analysts, study and perceive the natural world. Their results can provide unintended ammunition for political manipulation. Some of this ammunition comes from the very disciplines that should provide deeper and more integrative understanding, primarily economics, ecology, and institutional analysis. That leads to the second paradox: the trap of the expert. So much of our expertise loses a sense of the whole in the effort to understand the parts.

• Paradox 2. The Trap of the Expert

Observation: In every example of crisis and regional development we have studied, both the natural system and the economic components can be explained by a small set of variables and critical processes. The great complexity, diversity, and opportunity in complex regional systems emerge from a handful of critical variables and processes that operate over distinctly different scales in space and time.

The Paradox: If that is the case, why does expert advice so often create crisis and contribute to political gridlock? Why, in many places, does science have a bad name?

We begin unraveling these paradoxes with an examination of the obstacles that arise not just from multiple, competing scientific perspectives but also from disciplinary hubris. The complex issues connected with the notion of sustainable development are not just ecological problems, or economic, or social ones. They are a combination of all three. Actions to integrate all three typically shortchange one or more. Sustainable designs driven by conservation interests can ignore the need for a kind of economic development that emphasizes synergy, human ingenuity, enterprise, and flexibility. Those driven by economic and industrial interests can act as if the uncertainty of nature can be replaced with human engineering and management controls, or can be ignored altogether in deference to Adam Smith's "invisible hand" of the perfect market. Those driven by social interests often presume that nature or a larger world presents no limits to the imagination and initiative of local groups.

Compromises among those viewpoints can be arrived at through the political process. However, mediation among stakeholders is irrelevant if it is based on ignorance of the integrated character of nature and people. The results may be momentarily satisfying to the participants but ultimately reveal themselves as based upon unrealistic expectations about the behavior of natural systems and the behavior of people. As investments fail, the policies of government, private foundations, international agencies, and nongovernmental organizations flop from emphasizing one kind of partial solution to another. Over the last three decades, such policies have flopped from large investment schemes to narrow conservation ones to, at present, equally narrow community development ones.

Each approach is built upon a particular worldview or theoretical abstraction, though many would deny anything but the most pragmatic and nontheoretical foundations. The conservationists depend on concepts rooted in ecology and evolution, the developers on variants of free-market models, the community activists on precepts of community and social organization. All these views are correct, in the sense of being partially tested and credible representations of one part of reality. The problem is that they are partial. They are too simple and lack an integrative framework that bridges disciplines and scales.

Partial Truths and Bad Decisions

The fields of economics, ecology, and organizational or institutional analysis have developed tested insights. Yet there is growing evidence that the partial perspectives from these disciplines generate actions that are unsustainable. One way to generate more robust foundations for sustainable decision making is to search for integrative theories that combine disciplinary strengths while filling disciplinary gaps. But before we can begin such a task, we should examine the partial constructs that characterize these fields.

Economics

Modern neoclassical economics has gone far in discovering the process whereby millions of decisions made by individuals give rise to emergent features of communities and societies (e.g., the rate of inflation, productivity gains, the level of national income, prices, stocks of various types of capital, cultural values, and social norms). Two factors make economic theory particularly difficult. First, individual decisions at any moment are themselves influenced by these emergent features and by past decisions. Learning, practice, and habit influence the moment as much as present prices do. Second, the emergent features that can be well handled by standard neoclassical economic theory and policy concern only fast-moving variables that define present conditions. The more slowly emergent properties that affect attitudes, culture, and institutional arrangements are recognized but are poorly incorporated. The high discounting commonly employed in applications of neoclassical economic theories does not allow the possibilities beyond a decade or two in the future to influence present decisions.

Economists know that success in achieving financial return from fast dynamics leads to slowly emergent, nearly hidden, changes in deeper and slower structures, changes that ultimately trigger sudden crisis and surprise. But the complexities that arise are such that many modern economists are frustrated in their attempts to understand the interactions between fast- and slow-moving variables that create emergent dynamics (Stiglitz 1998). Chapters 7, 8 and 10 begin to expose the consequences and solutions.

Ecology

Ecosystem ecologists, on the other hand, have made it plain for a long while that some of the most telling properties of ecological systems emerge from the interactions between slow-moving and fast-moving processes and between processes that have large spatial reach and processes that are relatively localized. Those interactions are not only nonlinear; they generate alternating stable states and normal journeys of biotic and abiotic variables through those states. Those journeys—measured in decades and centuries—maintain the diversity of species, spatial patterns, and genetic attributes. They maintain the resilience of ecological systems.

Variability in ecosystems is not merely an inconvenient characteristic of these productive, dynamic systems. It is essential for their maintenance. Ecologists are beginning to understand the way that variability and diversity are created by and sustain ecosystems because of interactions among slow and fast processes, large and small. Both Chapters 2 and 3 review and expand that understanding. Reducing variability and diversity produces conditions that cause a system to flip into an irreversible (typically degraded) state controlled by unfamiliar processes.

But ecologists limit their understanding and propose inadequate actions by largely ignoring the realities of human behavior, organizational structures, and institutional arrangements that mediate the relationships between people and nature.

Institutions and Organizations

Institutional and organizational theory and analysis do consider such features but in a largely static sense. They often stop short of the required integration of the three fields of inquiry. Institutional and organizational theory currently provides a fascinating understanding of the variety of arrangements and rules that have evolved in different societies to harmonize the relation between people and nature. Social scientists have gone far in describing the way people store, maintain, and use knowledge in stable circumstances. But they have not attended to the processes that control and maintain these institutions dynamically, the kind of dynamic causation that is present in economics and ecology.

In order to plan for sustainability, we need to know, and we need to integrate, how information is evaluated and counterproductive information rejected. How is new "knowledge" created from competing information sources and incorporated with useful existing knowledge? Which processes create novelty, which smother innovation, which foster it? Those questions are explored in Chapters 4, 5, and 13. Neither ecology, nor economics, nor institutional theory now deals well with these fundamental questions of innovation, emergence, and opportunity. That is what evolutionary theory is about.