Public Policy Modeling Causal Loop Diagrams Tuesday, October 21, 2014

1. Public Policy ModelingCausal Loop DiagramsTuesday, October 21, 2014 Hun Myoung Park, Ph.D. Public Management & Policy Analysis ProgramGraduate School of International Relations

2. Causal Loop Diagram 1 • A CLD or causal map depicts the structure of a system or a set of causal relationships among variables (activities) in a system • Used in system dynamics • But general tool to describe concepts (systems) and communicate with others

3. Causal Loop Diagram 2 • CLD consists of • Variables of a system. Interdependent (→V →), dependent (→V), and independent (V→) • Cause-and-effect relationships among variables, “S” for the same direction or “O” for the opposite direction • Feedback loop is a closed circuit of interconnection between variables. “R” for reinforcing feedback or “B” for balancing • Delay

4. Drawing a CLD 1 1. Identify a systemic problem that is chronic and recurring and has a history and/or pattern. 2. Set a boundary and level of simplicity

5. Drawing a CLD 2 3. Identify key variables (activities) that are significant events or phenomena that jointly influence the overall system. • Use nouns or noun phrases • Include “the level of,” “the amount of,” “the number of,” or “the size of,” if possible. • Use a neutral or positive term. Avoid such words as “failure” and “increase.”

6. Drawing a CLD 3 4. Begin with more interesting variable (activity) and work backward (begin with an effect and look for its cause) or move back and forth (both directions). 5. Indicate “cause-and-effect” relationship (direction of relationships) using a link and arrow. A departing point influences the destination (A→B).

7. Drawing a CLD 4

8. Drawing a CLD 5 6. Indicate the type of the relationship between two variables on the link. • + or S (same direction) means a positive relationship between two variables. When A increases, B will increases; When A decreases, B will decreases. • - or O (opposite direction) indicates a negative relationship. If A increases, B will decrease; when A decreases, B will increase.

9. Drawing a CLD 6 7. Delay means that it takes long time for an cause results in its effect. • Depicted by || or “Delay” on the link • “[M]ake system’s behavior unpredictable and confound our efforts to control that behavior.” (Anderson & Johnson,1997, p.57)

10. Drawing a CLD 7 8. If a link between two variables is not clear, redefine the variables or insert an intermediate variable between the two. 9. Keep revising iteratively; No CLD is ever finished. Begin with a simple CLD and try more challenging one incrementally. 10. Label feedback loop with either “R” for reinforcing or “B” for balancing

11. An Example of CLD 1 • “Work backward” begins with the important effect and then seeks subsequent cause-effect chains. • “Begin at the beginning” or work forward • “Go back and forth”

12. An Example of CLD 1 • Bank failure as a system problem • First ask, “What caused the bank failure?” • Probably “bank’s solvency” is the cause of “bankruptcy (bank failure).” • What is the relationship between the two variables? When bank’s solvency is low, bank failure is more likely (high). – or O • Then ask, “What caused bank’s solvency?” Probably…

13. An Example of CLD 3

14. An Example of CLD 4

15. Software for CLD • Vensim (https://vensim.com/) • iThink (http://www.iseesystems.com/) • STELLA (http://www.iseesystems.com/) • Powersim (http://www.powersim.com/) • Anylogic (http://www.anylogic.com/) • You may also try LibreOffice Draw or Microsoft Visio

16. Feedback Loop 1 • A feedback loop is a closed circle of interconnection between variables or a series of mutual cause and effect (causal relationships). • The loop is internally initiated by the system and insensitive to environment. • Mutual causation is the simplest feedback loop. A→B→A→B→…

17. Feedback Loop 2 • Initial cause and ultimate consequence is NOT distinguishable clearly. • “[E]verything is indeed connected to everything else, so, in principle, it doesn’t matter where you start” (Sherwood, 2002: 128). • “[C]ycling back means that what was originally a cause is now suddenly an effect” (Weick, 1979: 77).

18. Feedback Loop 3

19. Feedback Loop 4 • “[A]ny change made anywhere will eventually itself be changed by the consequences it triggers” (Weick, 1979: 77) • Given endless cause-effect chains, such distinction is almost meaningless in most circumstance. • The interdependent relationships in a structure (system) are more important.

20. Reinforcing Feedback Loop 1 • A reinforcing or positive feedback loop • A feedback loop with even number of negative signs (-) or O (i.e., 0, 2, 4, …). • Depicted by “R” or “+” in the center of a feedback loop • Self-reinforcing feedback or deviation amplifying feedback. • No regulation or control

21. Reinforcing Feedback Loop 2

22. Reinforcing Feedback Loop 3 • “Reinforcing loops can be seen as the engines of growth and collapse” (Anderson & Johnson, 1997: 54). • Destabilize the system and deviate from its equilibrium • Form a vicious circle or virtual circle

23. Balancing Feedback Loop 1 • A balancing or negative feedback loop • A feedback loop with odd number of negative sign (-) or O (i.e., 1, 3, 5, …). • Depicted by “B” or “-” in the center • Goal seeking feedback, stabilizing feedback, deviation-counteracting, or self-refraining feedback • Since circulation of feedback loop will produce balance or equilibrium.

24. Balancing Feedback Loop 2

25. Multiple Feedback Loop 1 • What if there are multiple feedback loops in a system? Some loops are balancing, while others are reinforcing • If “loops are of unequal importance,” then which feedback loop is dominating in the system? • Such dominating or the most important loop will determine the fate of the system in the end (Weick, 1979: 74).

26. Multiple Feedback Loop 2 • “[T]he greater the number of inputs to and/or outputs from an element, the more important that element is” (Weick, 1979: 75). • “[C]lose loop that contains the greatest number of these important elements” (Weick, 1979: 75-76)

27. Multiple Feedback Loop 3 • In case of equal importance • Count the number of negative loops • Count the total number of negative relationships (count whenever it appears in a feedback loop) • An odd number indicates a balancing or deviation-counteracting system • An even number indicates deviation-amplifying system (Weick, 1979: 76).

28. Change in a System • How to change a system? • Change in a relationship from – (opposite) to + (same direction) • Change in a relationship from – (same) to - (opposite direction) • Add some relationships • Delete relationships • Shock (external input) will be decayed without changing the structure of a system

29. Impact of DDT on Malaria 1

30. http://butane.chem.uiuc.edu/pshapley/Environmental/L37/1.htmlhttp://butane.chem.uiuc.edu/pshapley/Environmental/L37/1.html

31. Impact of DDT on Malaria 3

32. Impact of DDT on Malaria 4 • Loop 1 (Balancing): DDT Use→Mosquito →Disease • Loop 2 (Reinforcing): DDT Use→DDT in Breast Milk→Disease • Loop 3 (Reinforcing): DDT Use→DDT in Gecko→Cat→Rat→Disease • Loop 4 (Reinforcing): DDT Use→Wasp →Caterpillar→Thatch Roof→Disease

33. Economy and Population 1 • Sherwood (2002, pp.241-262)

34. Economy and Population 2 • Sherwood (2002, pp.241-262)

35. Economy and Population 3 • Sherwood (2002, pp.241-262)

36. Economy and Population 4 • Sherwood (2002, pp.241-262)

37. Economy and Population 5 • Sherwood (2002, pp.241-262)

38. Economy and Population 6

39. Economy and Population 7

40. Common Pool Resources

41. Corruption System