The Moon and the Ghetto by Richard Nelson was recommended to me by Piret Toñurist at the OECD Observatory of Public Sector Innovation. I had worked with Piret last semester while writing the report about Anticipatory Innovation Government in the Basque Country. The work on anticipatory innovation has helped me to frame SenseMaker interventions as helping facilitate an innovation ecosystem and improve governance. There is a thread of public policy work that I hope to incorporate into my dissertation, because the government can be one of the best partners to establish human sensor networks. From an innovation governance angle, such a system could help monitor shifts in public value, emerging challenges, and social conflicts at-large. The SenseMaker system would contribute to the “complex action signaling system [that] is needed to assure that the separate economic actors will know what to do to coordinate their actions so as to optimize the system as a whole.” Nelson’s book seems to lay most of the basic groundwork for public sector innovation governance by asking key questions about why policy analysis had failed to bring about substantial social change.
The Moon and the Ghetto was published in 1977 by Richard R. Nelson, an economics professor who had previously been an economic analyst at the RAND Corporation. The long essay begins with the question: “If we can land a man on the moon, why can’t we solve the problems of the ghetto?” With the vast amount of resources and advanced technology that can get us the moon, Nelson says, what accounts for the “uneven development across different areas of wants?” Nelson breaks the book into three parts- the intellectual traditions of logical analysis, two case studies on childcare policy and supersonic transport and breeder reactors, and then a synthesis of a new approach to economic policy choice.
One of the challenges of innovation governance is adequately dealing with political economy as a complex adaptive system. Nelson critiques the assumption that most “problems are technical, and the correct answers a matter of professional judgement and calculation.” He also calls into question the ‘rationality’ of economics and the “logic-of choice approach” taken by many policy analysts. The blindness of many analysts due to their disciplinary training results in a static understanding of the economic system and cannot be attuned to changes in supply, demand, and public value. In Nelson’s words, “public administration has lacked two essential components of an effective intellectual structure- a useful normative apparatus, and an ability to make persuasive predictions.” To establish this ‘effective intellectual structure’ Nelson proposes an organizational analysis that recognizes how the structure of the governance system shapes policy proposals form and are implemented.
Here we see another connection between the top-down economic rationality and a bottom-up complex adaptive systems approach. There is an interesting connection to power that I hope to explore more later, because some of the learnings from complexity demonstrate that small actions might be much more powerful than top-down executive action when done at scale. Nelson explains this dynamic with policy: “Policies bubble up as actions taken or proposals generated from below, only a few of which can be subjected to top executive scrutiny.” In other words, policy is shaped by negotiations and actions at lower levels in the system. This flow of negotiation and action-reaction plays a normative role in establishing priorities and also future possibility. Decision-makers higher in the organizational hierarchy can claim a rational cost-analysis approach, but if this analysis is divorced from the current disposition of the system, then the policy will often fail. After all, the claim to one strategic innovation priority or another is basically arbitrary and based on a set of values- rational economic choice is just one belief system among many possibilities. Nelson asks, “why subsidies for one kind of R & D or for a certain industry but not for others?” The current system, in Nelson’s view, doesn’t provide a good answer.
The book helped me conceptualize a SenseMaker continuous capture story system as a tool for choice within the political economy. Nelson makes the point that the ‘organizational problem’ behind the ‘allocation problem’ rests on “choice of machinery to make the more detailed decisions.” This machinery must deal with economic organization as a complex adaptive system (“evolutionary adaptive system”) and measure shifts in public value, changes in supply and demand, to make innovations adaptive to a wide range of shifting conditions. I have theorized that institutionalizing SenseMaker capture in governmental activities would be one way to create a continuous capture system to continually monitor social conflicts and actively support actions to prevent violence. The needs and bright spots that emerge in SenseMaker in this context can help governments invest in positive peace- the mutually beneficial relationships. This is an alternative theory of change to the conflict monitoring/prevention angle on the assumption that investing in good relationships ultimately creates more value that wasting resources on a small number of outbreaks of violence. Also, the theory goes that positive relationships also build resilience and enable other mechanisms for preventing conflict in the first place. The language of policy analysis and governance systems makes it easier to explain the values proposition to different camps within government. It is difficult to explain a return on investment for R & D for resolving conflicts. However, if the SenseMaker system helps the public sector support innovation by increasing sensitivity to shifts in public value and emerging needs (aggregate demand), then the value is more immediate.
In future weeks, I hope to pick up on some of the questions around the politics of conflict resolution. After all, for something so central to all of our lives, why isn’t there more investment in it in the first place?
 Richard R. Nelson, The Moon and the Ghetto, 1st edition (New York: W. W. Norton & Company, 1977). 132.
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