Do the world’s hardest problems need top-down or bottom-up solutions?

This week’s WEF meeting in Davos is appropriately placing an emphasis on the environment. 

One basic choice to be made is whether to propose, back and execute solutions which are top down, bottom up or which combine both perspectives. These would engender very different actions and likely different outcomes. A very basic but nevertheless important question is which approach is likely to be more effective. 

At first sight, the world’s hardest common problems,  like climate change and biodiversity depletion,  would seem to necessitate top-down solutions. Without a mechanism that compels everyone to act, there is little incentive for any individual government or company to act first, or even to act at all, since others may be tempted to free-ride. Also, given the magnitude and speed of the effort required to address such challenges, voluntary, self-paced, self-policed solutions could easily be insufficient. Furthermore, with decentralized solutions it is harder to even know what has been done. 

On the other hand, top-down solutions seem beyond reach. There is no global government to compel the adoption of global solutions, and differential participation from different nations is likely to be ineffective in addressing globally distributed problems. Nations have different political and economic contexts and motives, and they are unlikely to agree on common goals and mechanisms, as we have already seen with climate change. Also, the costs associated with material solutions may be too high to be politically viable, especially at a time when political fragmentation and polarization are weakening many government around the globe. 

So the choice would appear to be between a low probability of a sufficient solution or a higher probability of an insufficient one. One could choose to back both perspectives, creating essentially an aspirational solution and an insurance policy. Better still, however, would be if we could raise the probability of one, the impact of the other, and combine them in a mutually reinforcing manner.

Research has shown that bottom-up perspectives can be more effective than they first seem. For one thing, a relatively small number of transnational companies have disproportionate impact on various aspects of the earth system (Eg fossil fuels). In theory at least, one could make substantial progress by getting each sub-set of companies to agree on solutions in their respective domains. Secondly, a strategy consisting of multiple parallel efforts can better adapt to the heterogenous contexts of different industries and countries than a single top-down effort. Thirdly, taking action sooner accelerates learning and innovation, which can lead to better ultimate solutions than long labored-over top down solutions. 

The drawbacks of bottom-up solutions might also be overstated. Nordhaus proposed that the free-rider problem can be overcome by establishing “climate clubs,” in which members agree to obey rules but only these members receive benefits, like relief from tariffs and taxes. And while any individual bottom-up effort might seem to have less power than a top-down program, if many such efforts are undertaken in parallel, the cumulative impact could be great.

In an official Forum session on Climate Politics, we heard the case for cities spearheading climate action: they are small enough to get things done, to move quickly, to engage citizens, to experiment in parallel but mig enough to matter. For example Riyadh is putting in place a public transport infrastructure and planting a tree for every citizen and New York City’s pension fund was able to divest from fossil fuels.

Top-down and bottom-up efforts could also be combined in synergistic ways. Top-down approaches may be effective for raising awareness, defining the problem and establishing the facts. But inclusive bottom-up initiatives can shape public opinion, which shapes politics, which in turn shapes the possibility of top-down commitments and actions. 

We also heard the case in the Climate Politics session today for a multilevel approach to climate action: governments collaborating through COP, cities through Urban 20 and businesses through WEF and the World Business Council for Sustainable Development.

We can take hope from several occasions in human history when society has been galvanized by a common purpose and adopted effective structures for massive mobilization and collaboration on very hard challenges. Nations preparing for war can achieve remarkable and rapid coordination with the appropriate mix of urgency, existential threat, top down guidance and bottom up initiative. Putting a man on the moon and discovering the Higgs Boson are also good examples. Setting any controversy around objectives aside, the development programs for the atom bomb and for Intercontinental Ballistic Missiles are also examples of highly effective large-scale collaboration on complex problems. 

I am hoping to glean further hints from this week’s discussions in Davos on how we can apply lessons from such examples of successful large scale collaborations to problems like climate change. I do wonder though if we know enough about how they really work. In this case, perhaps WEF might be the right platform for funding a Global Center for Advancing the Science and Praxis of Collective Action?