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DEVELOPING NATION: A System Dynamics Nodel
John M. Richardson dr.
The American University - Washington, D.C.
ABSTRACT.
This paper describes a model of a prototypical developing nation. The
purpose of the model is to understand why violence and violent repression
are so pervasive in the development process.. Further it is intended to
show how violence affects and is affected by other aspects of development.
The model, which is programmed in micro dynamo, has three sectors,
POPULATION, ECONOMY, AND GOVERNMENT. Preliminary results show that
fluctuations in economic growth can lead to outbreaks of violence and
deteriorating economic performance.
PROBLEM DEFINITION AND REFERENCE MODE
This paper describes DEVELOPING NATION, a system dynamics model of a
prototypical developing nation. In its present form, the model is generic
and theoretical. The present version has not been developed with a specific
client in mind. I would describe the model, rather, as an exploratory
contribution to the theory of development. Later versions will be adapted
to the needs of development organizations with whom I work regularly. The
model will also be used, possibly in the form of a game, for educational
purposes.
DEVELOPING NATION'’s purpose is to represent the dynamics of violence in the
development process. Further it is intended to show how violence affects
and is affected by other aspects of development. Violence, instability
and violent repression are endemic, costly and tragic realities for the
peaple of of virtually all Third World nations. The forms of violence -
guerilla warfare, mass demonstrations, revolutions and the repressive
activities of governments intended to control these outbreaks - consume
desperately needed resources and inflict widespread human suffering. If we
better understand the causes of violence, perhaps we can begin to reduce or
eliminate it.
During the past two years we have collected time series data on violent
behavior in about twenty five nations. The data collection process
continues. Figure 1 presents a typical reference mode, based on events data
(Banks, 1974), During the period from 1925 through 1944, the nation
described, Argentina, suffered from numerous outbreaks of violence directed
against the government.
In the historical literature, these outbreaks of violence are mostly
“explained” by specific circumstances and personalities (Forgette, 1981).
But the same patterns of violence are characteristic of many, if not mast,
Third World nations. With slight modifications, the reference mode diagram
u
oe
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FIGURE 1. CIVIL VIOLENCE IN ARGENTINA, 1925-1966
(Data from Banks, 1974)
1
C_] STRIKES, RIOTS AND DEMORSTRATIONS (Ro, of Incidents)
ssw REVOLUTIONS AND GUERILLA WARFARE (No. of Indidents)
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19
cl
aS HO 45 cy 3s rs - os
for Argentina would be applicable to Iran, to Egypt, to Nigeria, and to
scores of other Latin American, African and Asian nations. Thus the goal of
developing a generic model to represent the dynamics of violence does not
seem unreasonable.
Although the focus here is on violence and development, the research has a
broader long term goal. That goal It is to provide answers to the question:
"how can development, oriented toward ending hunger and meeting basic human
needs, occur without violence or violent repression?" All too often well
meaning efforts to modernize third world nations and to promote political
stability have been, ineffective, counterproductive or, in some cases, even
tragic. The study of system dynamics sensitizes us to the fact that in
order to solve a problem, one must first be able, through modeling, to
generate it. DEVELOPING NATION is a step in this direction.
STATE OF THE ART
A detailed review of the voluminous literature on violence and development
would not be appropriate. But a brief overview may be helpful. One
important source is the numerous of course numerous historical studies of
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individual revolutions and of the process of revolution. Brinton’s. classic
(1938) is probably the best known.
Quantitatively oriented political scientists have also been concerned with
the issue of political violence. The work of Ted Robert Gurr and various
associates is particularly well known (1981,1970,1972). Gurr’s influential
writings emphasize regression-based causal models of cross sectional data.
He argues - as does this paper - that “conflict events have similar
properties and causes across all contemporary nations” (1972, p. 7).
In a comprehensive survey article, Gurr noted the curvelinear relationship
between economic development and violence. He argued that transitional
societies are particularly susceptible to collective violence and that
violent conflict intensifies in periods of rapid socioeconomic change (1972,
pp. 36,7) Mancur Olson (1964) reached similar conclusions. Forgette
(1981) found that in the area of basic human needs, “progress” in
development could lead to instability under certain conditions. This
literature for the most part, uses case studies or static and attempts to
infer longitudinal conclusions from statistical analysis of cross sectional
data.
There is also an extensive literature that views collective violence from a
psychological perspective. The classic works of Dollard et. al. (1939) and
Berkowitz (1962) and Dollard et. al. are well known have and provided the
basis for numerous case studies as well as psychologically oriented cross
sectional analyses (for example Feierabend and Feierabend, 1964; Fierabend,
. Fierabend and Nesvold, 1969).
Among system dynamicists, Khalid Saeed has shown the greatest“ interest in
the issues addressed here. A model presented at the 1982 system dynamics
conference focused on the relationship between economic growth and political
instability (1982). Related work has looked and broader issues in the field
of development with particular emphasis on Pakistan (1980, 1982). .
Some of the principal feedback loops in DEVELOPING NATION are presented in
Figures 2 and 3.
In figure 2, major growth loops are presented. This representation of the
development process is consistent with mainstream literature in the field of
economic development (Kuznets, 1971, Rostow, 1981). Emphasis is on
growth in productivity, particularly in the capital sector. A strengthened
productive sector, makes resources available throughout the society, not
only for consumption but for education, human services and the development
of infrastructure. In the 1940s and 70s, government was often assumed to be
the key element in the development process. But recently increased emphasis
has been given to the development of a viable private sector. (Bauer, 1972;
Bauer and Yamey, 1978).
Figure 4 identifies major sources of violence and stagnation in the
development process and presents the major dynamic hypothesis of the
DEVELOPING NATION model. In this representation, rising output and the
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FIGURE 2. MAJOR GROWTH LOOPS IN THE DEVELOPMENT PROCESS
GOVERNMENT.
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PRODUCTIVITY =,
DESTRUCTION
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improved communications, and higher literacy associated with the development
process produce not only increased consumption, but rising expectations.
Given the fact that Third World nations are susceptible to world economic
fluctuations, that rising inequality tends to be associated with rapid
economic growth, and that economic development is, at best an uncertain
process, expectations are often unmet. This leads to the intensification of
demands and, not infrequently, to the violent expression of demands. These
expressions are often viewed as threatening by the government. In most
Third World nations, the concept of nationhood and the legitimacy of the
government are not well established. (Soedjatmoko, 1980; Nyererre, 1961)
In some, political leaders are committed to the maintenance of their own
privileges and the privileges of an elite class of political supporters.
Governments respond to threats with repressive policies by diverting
resources to the military and by an increased use of military forces for
internal security. Foreign assistance may also be requested for these
purposes and both major aid giving nations, the USA and the USSR have been
happy to provide this kind of assistance to their allies. Resentment
increases and the performance of the economy declines. When violence does
break out, economic performance suffers further as needed resources are
diverted and the attention of political leaders focuses on maintaining
political stability.
In brief, the dynamic hypothesis of DEVELOPING NATION is that the potential
for violence is inherent in the development process and that typical
government responses to initial signs of violence tend to exacerbate
frustrations and reduce the national capability for stable development: in
the long run. More specifically, it is argued that “normal” fluctuations in
economic performance can create the potential for violence and for its
mirror image, violent repression.
MODEL STRUCTURE
Figure 4 pictures the major sectors and principal interrelationships of the
DEVELOPING NATION model. This section will describe the general functions
of each sector. In the next section a more detailed description of two areas
violence and satisfaction/dissatisfaction will be presented.
The POPULATION sector models basic population dynamics, demand for
consumption goods, satisfaction and dissatisfaction. Levels of satisfaction
and dissatisfaction determine the potential for violence and, when it
occurs, the duration and intensity of violence. Violence is “triggered” by
random events. The probability of such events occurring increases as the
potential for violence increases. Consumption demands are met by allocations
to personal consumption from the economic sector and other needs are met by
human services allocations from the government sector. Increased levels of
development, as measured by personal consumption per capita, reduee death
(and later birth) rates and increase the productivity of the labor force.
The GOVERNMENT sector receives revenues from the economic sector and
allocates them to to human services and to the maintenance and development
of its security establishaent. Decreased allocations to human services
generate political pressures to increase the allocation. The national
\
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FIGURE 4. MAJOR SECTORS AND INTERRELATIONSHIPS
pei eer een amc Oe aT
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1 POPULATION DYNAMICS ‘VIOLENCE !
@ BIRTHS AND DEATHS E @ POTENTIAL VIOLENCE |
© DEMOGRAPHIC TRANSITION ¢ VIOLENCE - INTENSITY & |
1 ‘© DEMAND FOR CONSUMPTION 2 Pee AS) DURATION”
! @ PERSONAL CONSUMPTION @ PROBABILITY OF VIOLENCE !
! © SATISFACTION - @ TRIGGERING EVENTS |
i © DISSATISFACTION
! !
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DESTRUCTION OF
. CONSUMPTION | PRODUCTIVITY CAPITAL FROM
Er eres eee pat VIOLENCE
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OUTPUT & \ REPRESSION AND
LEVEL OF REPRESSIVE
DEVELOPMENT POLICIES
“ECONOMY SECTOR GOVERNMENT SECTOR
@ PRODUCTIVE CAPITAL ; enti SECURITY FORCES .
ROBE LON: RODUCTION AND ourpur | * SUBSIDIES & REPRESSION te
INVESTMENT SAVINGS AND INVESTMENT coftaent: ‘@ ECONOMIC DEVELOPMENT
@ ALLOCATION OF OUTPUT cern nice POLICIES
@ LEVEL OF DEVELOPMENT HUMAN SERVICES
© GENERAL SERVICES
security establishment also generates political pressure to increase its
share of the budget. Its capability to do this increases as its size
increases, Also, it is more effective in exerting pressure in turbulent
times than in placid ones. The government's repressive policies limit the
expression of demands and the outbreak of violence. When violence does
break out, the capability of the security forces is be a factor in
determining its intensity and duration. The government can be the recipient
of foreign aid which can be allocated to consumption, investment, human
services or national security, or, in the form of investment subsidies, it
can be used to stimulate the economy.
A simple ECONOMY sector generates output and allocates it in response to
demands for consumption, for allocations to government and for savings. The
internal dynamics of the model affect the relative weight given to each of
these priorities. In addition, parameters can be set to reflect differing
social choices about these matters. When violence breaks out, productive
capital can be destroyed, thus reducing output. As noted above, the
productivity of the labor force is also affected by its level of
satisfaction and dissatisfaction as well as by the level of development.
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There are nine major levels in three sectors of DEVELOPING NATION,
approximately approximately 200 variables and constants and, excluding the
definition of constants and initial values, about 90 equations. The model
is written in micro dynamo and runs on an IBM PC-XT with 128K of memory. It
is not, then, a large model, but it is too large to be fully documented
here. What will be done is to present some of the amore interesting
features. (The model and full documentation can be obtained by sending two
discs, plus return postage and $10.00 to the author.)
A DETAILED DESCRIPTION OF TWO FORMULATIONS
A. RATIO OF PERSONAL CONSUMPTION TO DESIRED PERSONAL CONSUMPTION
One of the more interesting formulations in the model is the calculation of
the ratio of personal consumption to desired personal consumption (RPCDPC).
A DYNAMO flow chart of this is presented in Figure 5.
FIGURE 5. PERSONAL CONSUMPTION AND DESIRED PERSONAL CONSUMPTION
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The ratio of desired personal consumption per capita to actual personal
consumption per-capita (RPCDPC) is the principal determinant of changes in
levels of satisfaction and dissatisfaction. Dissatisfaction levels are also
affected by the level of violence (violence actually reduces dissatisfaction
in a kind of cathartic process) and by perceived levels of repression (which
increase dissatisfaction. RPCDPC is, then a highly sensitive variable in
the model and is responsive to changes in performance and expectations.
Desired personal consumption per captia (DEPCPC) is adjusted to reflect the
actual performance of the economy, personal consumption per capita (PCPC). -
However the adjustment is affected by psychological processes that might be
categorized on the general heading, optimisa. It is assumed that when
things are getting better, people assume that they will continue to do so.
And even when things are getting worse there is the expectation that they
will get better, and dissatisfaction when they don't, at least for a while.
Thus, changes in personal consumption desires (CPCD) are affected not anly
by recent experience but by the perception of recent trends (TPCPC).
In the model, expectations associated with trends (MEPC) exert a much more
positive effect on desires when the economy is improving than when it is in
decline. In addition, there are differing adjustment times for EPCD when
the economy is in a growth mode (DPCATG) and when it is in decline (DPCATD).
The former is defined as three years, the latter as six. It is assumed,
then at it takes a good deal more time for people to adjust their desires
downward in worsening conditions than it does for them to adjust desires
upward when things are getting better.
This formulation of the potential gap between expectations and -performance
is of course, very general, but I believe that understanding and modeling
this kind of relationship is one of the keys ta understanding the causes of
violence in the development process. Gaps between expectations and perfor-
mance can arise when there is inequality in a society, when comaunications
or advertising raise hopes that cannot be fulfilled, when one class or
ethinc group is clearly in a superior or inferior position in the saciety.
And the gaps are exacerbated, of course, by normal fluctuations in economic
performance and by failures in policy. Hogogenious countries with
relatively modest, stable patterns of economic growth would seem to have the
best prospects for stable development.
The modeling of satisfaction (SAT) and dissatisfaction (DIS) may also merit
brief comment for two reasons. First, the two variables are separate levels
affected in different ways by RPCDPC and other phenomena. Thus it is
possible to have positive levels of dissatisfaction and satisfaction and the
same time. The second comment is that I am not entirely happy with this
formulation. Although there is ample precedent for discussing concepts like
frustration and satisfaction as aggregate attributes of a society in the
sociological and political science literature, I do not believe it is
consistent with good system dynamics practice. In later versions of the
model I intend to represent satisfied and dissatisfied individuals as well
as numbers of people in opposition of the government and participating in
violent incidents.
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B. VIGLENCE
A dynamo flow chart for the formulation of outbreaks of violence is
presented in Figure 4. There are two level variables, intensity of
potential violence (IPV) and intensity of violence (V).
FIGURE 6 POTENTIAL VIOLENCE AND THE GUTBREAK OF VIOLENCE
Increases in IPV are caused by dissatisfaction. Decreases are caused by a
normal lifetime of intensity of violence, by high levels of satisfaction and
by outbreaks of violence. When violent outbreaks occur, it is assumed that
the potential for future violence is reduced, at least temporarily. This is
consistent with Brinton’s view (19XX). Gurr and Lichbach point out, on the
other hand, that outbreaks of violence can breed additional violence(1981).
I believe that both theories are accurate, but on different time horizons.
The loop described by Gurr and Lichbach is not presently incorporated in the
formulation.
A violent outbreak occurs when there is a catalytic triggering event (TEV)
that initiates it. The equation for TEV incorporates a somewhat unusual use
of the NOISE function:
TEV. K=FIFGE(0,1,NOISE()+.,PV.K),
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where PV is the probability of violence. The equation for PV is:
PY. K=(1-(1/EPVD.K#1/EPVPV.K) ) #EPVS.K#EPYRP.K
where: EPVD is the effect of dissatisfaction (DIS)
EPVPV is the effect of potential violence (IPV)
EPVS is the effect of satisfaction (SAT
EPVRP is the effect of perceived repressiveness (LREPP)
Dissatisfaction and the intensity of potential violence are positively
related to the probability of violence. Satisfaction and perceived
repressiveness are negatively related, though for different reasons.
When an violent outbreak occurs, its intensity will be determined by the
intensity of potential violence. If there is no repression, the half life
of violence is assumed to be one year (NLV=2). Higher repressive
capabilities, on the part of the government can reduce that. There is a
relationship between the repressive capabilities of the government and the
perceived level of repression, the latter being determined by repressive
policies as well as capabilities. A government can be quite repressive, yet
not have the capability to put down an insurrection when it oceurs (an
excellent example would be the Tsar‘s government at the time of the Russian
Revolution.) The converse can also be true.
PRELIMINARY RESULTS
Two runs are presented here to illustrate the type of results obtainable
from the aodel. The first, presented in Figure 7, is made of behavior that
might be termed, moderate, stable growth. Output grows at a rate of between
3.4% at the beginning of the run and 4.3% at the end of the run.. Population
growth is about 2.4%. Qutput per-capita and personal consumption per-capita
approximately double during the run. There is a very moderate growth in the
size of government and in the marginal propensity to save. Personal
consumption, as a fraction of total output, declines from about 80 to about
78 per-cent.
In this run, satisfaction rises slightly above the normal value of ten.
Because the government has imposed moderate repressive policies, there is
also a modest amount of dissatisfaction. At the end of the run, the
intensity of potential violence is about ten per-cent of its potential
maxigua. There have been three very modest expressions of dissent, in the
form of violence, but they have had no serious consequences for the economy
or the society.
The moderate growth mode provides an example of a stable society in which
desires and performance have been kept in realistic balance. The mode is
unrealistic for at least two reasons. First, fluctuations in economic
performance are endemic in developing nations. Second, even without
fluctuations, influences from the “outside world" or from inequities in the
society would almost certainly create a wider expectations-performance gap
than is represented here. The made does, however, provide useful point of
reference.
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FIGURE 7. MODERATE GROWTH MODE
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The run pictured in Figure 8 tests the hypothesis that fluctuations in
economic performance are, in themselves, a major source of instability in
developing nations. This run is similar to the moderate growth made, up to
1955, But after this year, we assume that increasing modernity and closer
links to the developed world lead to fluctuations in the economy. The
hypothesis is tested by varying productivity, using a sine wave input, over
a period of ten years with an amplitude of plus or minus 25 per-cent.
Figure 8 is illustrative graphic output from this run. Fluctuations in
output and output per capita lead to unmet expectations. The result is
rising levels of .potential violence and violent outbreaks that become
stronger, more frequent and longer in duration. Savings are shifted to in
personal consumption in response to political pressures .for increased
consumption. This results in a diminished stock of capital and reduced
output. Problems in the economy are increased by reduced productivity (due
to the dissatisfaction of the labor force) and by the destruction of capital
due to violence. By 1975, the behavior mode of the economy has shifted from
growth to decline. The decline continues throughout the remainder of the
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run. By the end of the run, in 1995, violence is endemic in the society.
Both output and personal consumption are below 1945 levels.
FIGURE 8. FLUCTUATING ECONOMIC PERFORMANCE
20.0008 +
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PAGE-9
This run provides modest evidence, I believe, that the model is capturing
some of the basic dynamics of violence in the development process. Like the
first run described, it is not intended to be “realistic”. It does provide
useful insights and can serve as a basis for further experimentation with
the model.
CONCLUSION
DEVELOPING NATION has now completed the first phase of its own development.
The model is robust and produces reasonable, provocative results. It offers
one theory about the reason that intermediate stages of the develapaent
Process are so frequently characterized by violence. It suggests the
importance of desires and expectations in development. It supports the
conventional wisdom that inequitable developing nations are likely to be
more unstable than equitable ones.
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The opportunities for further work with the model seem promising. Although
individual sectors have been subjected to exhaustive sensitivity analysis,
I have just begin to explore the implications of the overall structure. This
work will continue. Because of its accessability and relative simplicity,
the model should be useful in its present form as an educational tool. It
would be valuable to parameterize the model for specific developing nations.
I believe that the formulation of potential violence and the outbreak of
violence should be refined. Disaggregated versions of the model could
address problems involving education, disparities between rural and urban
sectors, the gaps between rich and poor and ethnic diversity.
The overall goal of this project, as noted above, is to provide answers to
the question “how can development, oriented toward ending hunger and meeting
basic human needs occur without violence or violent repression.“ DEVELOPING
NATION has begun to identify issues that underlie this question more
sharply.
REFERENCES
Banks, Arthur S., Domestic Conflict Behavior, Ann Arbor: Interuniversity
Consortium for Political Research, International Relations Archive, 1974.
Bauer, Peter T., Dissent on Development. Cambridge: Harverd University -
Press, 1972.
: and Basil S. Yamey, “The Third World and the West: An
Economic Perspective,” in [he Third World: Premises of U.S. Policy. San
Francisco: Institute for Contemporary Studies, 1978.
Berkowitz, Leonard, Aggression: A Social Psychological Analysis. New York:
McGraw Hill, 1962.
Brinton, Crane, The Anatomy of Revolution. New York: Norton, 1938.
Dollard, John et. al., Erustration and Aggression. New Haven: Yale
University Press, 1939.
Feierabend, I.K. and R.L., “Aggressive Behaviors within Polities, 1948-1962:
A Cross National Study." Journal of Conflict Resolution, 1964, Number 10,
pp. 249-271.
Feierabend, I.K and R.L., and Betty Nesvold, "Social Change and Political
Violence: Cross National Patterns." In H.D. Graham and Ted Gurr, eds.,
j ii} in rica: Hi ical and Comparative Perspectives Washington,
D.C.: National Commission on the Causes and Prevention of Violence, 1769.
Forgette, Eloise M., Civil Violence and the Satisfaction of Basic. Human
Needs. Unpublished Doctoral Dissertation, The American University,
Washington, D.C., 1981.
Gurr, Ted R., "The Calculus of Civil Conflict." Journal of Social Issues,
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Volume 28, Number 1, January, 1972, pp. 27-47.
‘Sond omuamees ’ Why Men Rebel. Princeton: Princeton University Press,
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wenn and Mark Lichbach, “The Conflict Process: A Formal Model.”
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Nyerere, Julius K., “One Party Government", Spearhead: The Pan African
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Olson, Mancur, "Rapid Growth as a Destabilizing Force." Journal o
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Rostow, W.W., The World Economy: History and Prospect. Austin & London:
University of Texas Press, 1978.
Saeed, Khalid, Economic Growth and Political Instability. Unpublished model
documentation, MIT, August 19, 1982.
eee eman nem! Rural Development and Income Distribution: The Case of
Pakistan. Tinpublished Ph.D. Thesis, MIT, 1980.
saat siete ’ "Worker Compensation and Income Distribution in Agrarian
Economies: Patterns and the Underlying Organization." Dynamica, Volume 9, ©
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Soedjatmoko, De
Press, 1780.
opment and Freedom, Ishizaka Lectures 2 Tokyo: Simul
