The New Resilience Paradigm

By Anthea Roberts & Jensen Sass

Anthea Roberts is a professor in the School of Regulation and Global Governance and Director of the Centre for International Governance and Justice at the Australian National University. Jensen Sass is a fellow in the School of Regulation and Global Governance at the Australian National University.

CANBERRA – When the world changes, policy paradigms change, too – or at least they should. Harvard economist Dani Rodrik recently argued that, instead of globalism, financialization, and consumption – the principles undergirding the declining neoliberal paradigm that has dominated global economic policymaking for the past 40 years – a framework that emphasizes production, jobs, and localism is needed. Rodrik calls this nascent paradigm “productivism.”

At a time when political polarization is increasing throughout the developed world, the core features of the productivist paradigm have found support on both the right and the left. But there is more to this paradigm shift than Rodrik’s narrative allows. Productivism is only one part of a broader, more profound transition away from neoliberalism’s preoccupation with efficiency toward a new paradigm that puts systemic resilience first.

To understand why a particular paradigm becomes ascendant, we need to identify the policy problems it must address. Neoliberalism’s assumptions regarding the ability of individuals and communities to adjust to trade shocks proved to be wildly unrealistic; the doctrine’s exponents were oblivious to its unintended consequences.

Trade liberalization was a boon to GDP, but most of the gains in developed countries went to the rich, while losses were borne disproportionately by already vulnerable groups. Simmering grievances in those communities went unnoticed in policy circles for many years before finding expression in populist movements. This anger is central to the growing bipartisan support for the pro-worker agenda that Rodrik describes.

Economic globalization reduced inequality between the developed and developing world, but it also increased geostrategic competition, particularly between China and the United States. Interdependence can be weaponized, but the neoliberal paradigm provides little guidance on how to address security concerns like economic coercion and supply-chain fragility. As a result, governments are now hastily trying to create anti-coercion tools and to reshore semiconductor manufacturing.

The neoliberal paradigm may have increased wealth, but it also increased carbon emissions, contributing to the current climate crisis. Its adherents couldn’t grasp that efficiency is desirable only up to a point. Short-term efficiency that maximizes wealth but undermines the environment is not sustainable – and it magnifies the shocks that individuals and communities are likely to face.

The world has become riskier and more uncertain, partly owing to neoliberal policies that exacerbated social, political, economic, and environmental vulnerabilities and are ill-equipped to respond to the crises they helped cause. Any new paradigm must enable policymakers to tackle domestic distributional and political conflicts as well as protracted global instability and uncertainty.

While productivism may help to address some of these challenges, it falls short of providing an overarching intellectual framework that can match neoliberalism’s emphasis on efficiency. Productivism is most concerned with the social inequities and attendant resentments generated by pro-market policies. Reshoring production and rebuilding infrastructure represent ways to manage some of the risks generated by economic interdependence and climate change.

But a paradigm that places resilience at its center would respond to all these problems more deeply and would have wider applications. Whether the focus is on communities, economies, or the environment, resilience represents a more important systemic value than efficiency or production.

Many define resilience as the ability to absorb shocks and adapt in order to carry on functioning. But it is also a systems concept – something that can be measured and designed. It shifts the focus of policy analysis away from decisions taken individually toward their effect over time on the system as a whole. As such, it discourages excessive attention to a single metric, such as GDP, or short-term returns. And it encourages a balance between diversification and concentration, and between independence and interdependence. Efficiency may contribute to resilience by increasing returns and adaptability, but not when pushed to the extreme of creating systemic fragility.

Much like productivism, it is too early to envision a fully-realized policy paradigm based on resilience. But the concept already possesses considerable intellectual clout, developed across numerous disciplines and applied in various policy areas. It is central to climate-change adaptation, disaster management, and sustainable development. Urban planners apply it to design cities that are better able to withstand climatic instability. Development specialists use it to consider how at-risk communities might respond to disasters. Resilience also appeals to many in national security and international business circles who anticipate disruption of critical supplies or critical infrastructure by extreme weather events or hostile actions.

Today’s turbulent world calls for prosperity that can withstand shocks and does not degrade the foundations of our societies. Economic growth must be inclusive enough to empower individuals and communities to flourish, without stirring polarization and backlash. We need an approach to globalization that enables countries to feel secure, even in the midst of growing ecological risks and geostrategic competition.

Whatever the next policy paradigm is, reconciling these demands would be its defining challenge. Productivism gets us part of the way; resilience promises to take us further.