Development games

OK here's a post that's been cooking in my head for a while…

In January we had a holiday in Pondicherry, an enclave in Tamil Nadu that was once a foothold of French colonial aspirations. Great surf, great weather and the only place on the planet where cafes offer the world's best breakfasts - both of them: masala dosa with South Indian coffee or fresh croissants and crepes with French press. Wonderfully quirky! Early one morning my daughter Sharhirah took me out for a run. Our usual morning runs are in the Himalayas so here at sea-level, in air so oxygen-rich it seemed like syrup, we scampered happily along, breathing easily. Beside us surf rising, breaking and ebbing slowly out was  the relaxed, easy rhythm of the sea's own breathing.  Fishing boats sillhouetted against a sultry sky completed an idyllic scene…..

Silhouettes against a sultry sky. An idyllic Pondicherry dawn... but watch your feet!

Silhouettes against a sultry sky. An idyllic Pondicherry dawn... but watch your feet!

…spoilt only by a man defecating on the pristine sand. And another. One more over there. “Watch your feet, Shar”

Welcome to Pondicherry where open defecation is as much part of culture as in the rest of India. But this town gains more from beaches and tourists than fishing and farming- why crap in your own bed?  Obviously the men squatting on the beach don’t see it that way (and it was only men -the women must creep out at night). Sure, Pondicherry's wealth comes from tourists but these guys aren't analyzing Pondicherry's economy, they’re just taking the cheapest defecation and sewerage disposal option.  "So what if tourists are put off?"  each reasons " Pondicherry's golden goose lays no eggs for me"

Clearly it would be better for everyone if the beaches were clean, people were healthy, tourists were happy and their dollars fairly distributed -some perhaps going to composting toilets or public sewerage. Men who defecate  on the beach are thinking as individuals, not as community so its likely their fishing boats are also scouring the ocean for every last fish to maximize their (short term) individual gain. As well as defecation it would be better if fishing were controlled. Then again it would also be better If rich people (like me) thought in terms of global community rather than openly defecating CO2 into thepristine atmosphere that laps around our cities.

I’m exploring game theory which analyses paradoxes of individual behavior in group contexts by simplifying the world to three essential elements: players, actions and payoffs. Games are a great way to understand our own natural thinking and behavior in groups. Last week some participants in a climate change game I facilitated  chose to get rich even as others in their community died. Afterwards we wondered together what “rich” and "community"  really mean. Game theory offers clues as to why people settle in stable patterns of behaviour (equilibria) even if those are obviously not the most beneficial and gives  insights on what might help them (i.e. us) make better decisions.

Here’s a version of the most famous game of all- the Tragedy of the Commons. Consider two villagers on the shores of a lake. Each can choose to fish with a net or use dynamite. Dynamite gets more fish but leaves many dead in the water. The choice is individual but the catch is dependent on what the other player does. That's the game.  Here’s the pay-off matrix:

                                                                              Fisherman 1

                                                                    Net                            Dynamite

                           Net                               300/300                            400/100

Fisherman 2

                          Dynamite                    100/400                            200/200

If both use nets each gets 300 kg of fish/year- plenty for their families and the fishery is sustainable. Should one use dynamite and the other a net, the dynamiter gets 400 kg- enough for his family plus extra to sell- but  the other gets only 100kg in his nets and can’t feed his kids. If both use dynamite each takes 200 kg but they leave many dead fish behind and thus degrade their fishery. What equilibrium (stable) strategy do they gravitate to?

Amazingly they settle on both dynamiting and destroying their fishery (aka crappng in their bed)!! Why?

Fisherman 1 reasons that If fisherman 2 uses a net he'd get 400Kg with dynamite vs the 300kg he's now taking with a net. If Fisherman 2  chooses dynamite fisherman 1 reasons he gets 200 kg with dynamite but only 100Kg if he chooses a net. Fisherman 1, rational self-interested man, sees dynamite is his best option whatever  fisherman 2 does. Fisherman 2 reasons similarly. Both choose dynamite and the resource degrades. Nevertheless there is no incentive for either to unilaterally change strategy because they are now taking home 200kg  of fish, but will get only 100 kg if they change to a net. In game theory a situation with no incentive for any player to unilaterally change strategy is a Nash Equilibrium. In this Nash equilibrium not only are they destroying their future livelihood, they also minimize their current total catch (400kg vs 500kg or 600 kg with other options). It’s bad all round but, as rational self-interested humans, they choose to kill their golden goose. (This is all similar to my "Hunting Stags" post last year)

Could regulation improve this? Imagine imposing a fine for overfishing with a value equivalent to what 200 kg fish is worth. With 200 subtracted from anyone using dynamite the payoff matrix is now:

                                                                                  Fisherman 1

                                                                        Net                         Dynamite

                               Net.                             300/300                          200/100

Fisherman 2

                             Dynamite                    100/200                              0/0

Now the Nash equilibrium has both fishing with nets. Any unilateral change gives a worse payoff than 300 kg fish. Furthermore, the total -600kg fish/yr- is the maximum for this population (of two) from this ecosystem. Wow! For anyone who says laissez faire  economics optimizes group productivity here’s proof that a little regulation can move rational human beings from bad options for themselves and the environment to better, even the best strategic decisions. They'll happily take 300kg fish/year for ever.  This is model sustainable development, isn’t it?

Ah, no! This is planet earth. Here things don’t work as they do in Game Theory land.* Here they bribe the fishery officer or threaten him or fish (with dynamite) at night or poison the water or use connections to get the rules changed, or... Legislation is not a panacea amongst flesh-and -blood rational economic men. Ask anyone trying to legislate against Chinese paying for rhinoceros poaching in Zimbabwe, illegal forestry in Cambodia or rational economic men emitting CO2 which they know wrecks livelihoods of the world’s farmers- and their own. We can’t legislate our way to development.

Is there another way? Could fishing without dynamite and self-enforced, population-wide quotas (i.e. policy) emerge from within the system? Yes, if rather than kg of fish taken (an output) we look at the fishermen’s behaviour attitudes, relationships and policy (outcomes in Outcome Mapping language). Changed behavior starts with new attitudes and relationships.  Imagine “How do I get the most fish for myself?”  changing to “how do we maximise our sustainable harvest?  One would start with a group meeting to explain the fishery and,just like traditional people often did before rational economic men developed them,  sit and talk, build relationships around the resource and talk some more. Ultimately, if a community owned common property resource decision emerged, complete with community owned rules and sanctions- that would be development. 

In Pondicherry the community conversation would involve beaches and fish and defecation and tourists and hotel waste and city council sewerage systems and much more. Development- Its all about how people understand themselves and their interests and processes for negotiating that.

Try this:

Development facilitates the emergence of beneficial, coherent human systems** Ideal, scale-appropriate decisions with self-enforced rules emerge only if people have flexible group boundaries, power-free relationships, complete information and open communication. Contributing those is development.  

Whenever human decisions result in actions that are not ideal at the scale they are played out there is room for development. This is true when individuals defecate on beaches and if a nation does not provide vaccines for its children. It would also be true should a  super-power be using torture in off-shore terror chambers. In all cases much better, scale-appropriate ways to solve problems could be found. Rational, individualistic economic man is currently enshrined in right-wing economics and right-wing development as the basic human unit. In my thinking it is but a tiny subset of valid ways for people to understand themselves.  Development would facilitate thinking in terms of family when dividing a cake but thinking as community when deciding where to defecate or who to include in the benefits of tourism. We'd see ourselves as regional players when establishing conservation areas. We'd define ourselves as Planetary Citizens when choosing to forego fossil fuels or distribute the riches derived from some having over-used it in the past. At each scale self-enforced rules controlling future behaviour would come out of the  relevant system as it evolves its solutions.

The primary challenge then, for us working in development, is contributing to attitudes and perspectives, adding context-appropriate  information and facilitating free communication so that boundaries become flexible and ideal scale-appropriate actions evolve.  

What do you think?

* There is a lot more to game theory than simple games that assume all players are rational and selfish. More on those more realistic games in future posts. 

** the phrase "maximise the emergence of beneficial coherence" is from David Snowden