Global Systemic Risk
Global Systemic Risk focuses on the robustness and fragility of global human-made organizational systems and is concerned with risks that have short- to medium-term likelihood and consequences, making it a fascinating topic to study.
About the Project
There is no better indicator of increasing globalization than the massive and accelerating increase in international transactions beginning in the late 1970s. These in turn have required the construction of a complex system of global nodes and links providing the channels through which these can flow. The interdependence of massive global interactions and structures has caused systemic risk to increase exponentially in recent times. Tangible risks—in systems as diverse as energy exploration and production, electricity transmission, computer networks, healthcare, food and water supplies, transportation networks, commerce, and finance—now threaten global political, economic, and financial systems that affect citizens of every nation. As a result, the study of risk has the potential to become an important and influential academic and policy field.
Led by program coordinator Miguel Centeno, the community — with a core group of 22 scholars — frames its multidisciplinary inquiry from a number of vantage points to better understand the nature of risk, the structure of increasingly fragile systems and the ability to anticipate and prevent catastrophic consequences. These include:
- computer science
- history of science
- operations research
- physical sciences
- public policy
The most obvious example of how interactive systems can lead to risk is the financial crisis of 2007-2008. Over and above regulatory failure and personal malfeasance, the manner in which declines in the real estate values of pockets of American suburbia led to the greatest economic challenge since the Great Depression reflects the interconnectivity and interdependence of financial institutions. The research community argues that other global systems may be subject to the same kind of emergent disruptions: those caused not by the characteristics of any single part, but from the interaction of large numbers of apparently autonomous agents. The global energy system, information networks, and air and sea transport may increase the efficiency of production and distribution, but may also make these more susceptible to catastrophic failure. Our food and epidemiological security, for example, may be improved by paying greater attention to how the systemic whole comes to represent more than the sum of its parts.
For more information, contact Jayne Bialkowski, program manager.