The economic crisis happening across the world over the last few years describes a range of interdependencies and interactions,and has highlighted the fundamentalf laws of neoclassical economic theory: its unedifying focus on prediction and, above all, its inability to explain how the economy really works. As such, it is increasingly recognised that economic phenomena cannot be exclusively investigated as being derived from deterministic, predictable and mechanistic dynamics. Instead, a new approach is required by which history-dependence, organic and ever-evolving processes are (...) also accounted for. As this view implies new challenges and opportunities for policy, we will focus our attention on innovative components of Complexity Theory for the study of economics and the evaluation of public policies. (shrink)

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. (shrink)

The contemporary methodological debate about justice has centered around a dispute about the value of so-called ideal theory. I argue that justice performs a social-guiding function, which explains how people should respond to their limited and fallible abilities to realize justice institutionally. My argument helps to re-orientate the contemporary methodological debate. The obvious disagreement between many prominent supporters and skeptics of ideal theory obscures the fact that they are united by a false assumption: the practical value of justice exclusively consists (...) of its institution-guiding function. To capture the overlooked social-guiding function, a richer normative theory of justice is required; I show how such a theory can be supplied by “ideal-transitional” principles. (shrink)