COVID-19 and its ongoing health, economic, societal and political impacts have, once again highlighted that we live in an age of uncertainty and risk. Not only will COVID-19 and its impact be with us for a long time, it has triggered a structural transformation, that will continue to alter the global landscape, including causing distributional inequalities. This is the age of permacrisis with one challenge seamlessly followed by the next, from pandemics to economic and financial crises, from global conflict to migration, coupled with structural transformations that require fundamental reforms, including the technological revolution and the urgent need to address the existential threat of climate change.
Despite the relentless succession of crises over the last years, it doesn’t appear that policy-making has fully caught up with what the age of permacrisis entails. While policy and decision-making processes have had to respond quickly and in an unprecedented way at numerous points in the last years, systems and structures have not caught up. If we continue to live in an age of uncertainty and risk, that implies that we are not preparing adequately for the next crises that will hit us. While we have survived the previous crises, not preparing is a risky strategy, which is likely to go wrong at some future point and also does not help to minimise the collateral damage that each new crisis brings with it, including, for example, deepening inequalities. In short, being reactive is a sub-optimal response.
But what can be done? Policy-makers need to increase the capacity and capability to:
1. Anticipate and analyse – this entails investing in foresight and modelling, as well as fostering independent analysis and advice that can challenge existing orthodoxies. This is a role that think tanks can and should play, but it will require capacity building, as well as development of the sector, including incentivising the adherence to certain standards.
2. Prepare and invest - in a rapidly developing crisis, developing new instruments and systems is nearly impossible, so preparation is crucial. Building resilience and reducing vulnerabilities has to be a key aim of policy, for example by building contingency mechanisms and excess capacity/ redundancies, while recognising that this does not come for free.
3. Manage risk - there needs to be a much better understanding of how to manage risk, including a focus on both the probability of adverse events and their likely magnitude of impact. But managing risk does not mean becoming so risk-averse that it leads to inaction: opportunity costs from inactivity are high in an age of permacrisis.
4. React quickly and decisively. This entails creating the right tools and systems that can react in a crisis, for example emergency funds, automatic stabilisers and fast-track policy and decision-making processes. These mechanisms have to have the scope to act decisively; to stop a crisis from spiralling out of control often requires a disproportionately large response.
5. Follow the evidence/science – policy should aim to be evidence- and science-based, even in the midst of crisis, whilst recognising the inherent uncertainties and limitations.
6. Learn and adapt – no battle plan survives engagement with the enemy. Crises will always develop in unexpected ways, and it is inevitable that mistakes are made in the heat of the moment. For public authorities, and for politicians, this is a challenging environment but experience shows that those that can be honest also about their limitations, and implement the necessary changes arising from mistakes or changed circumstances, earn the highest credibility and trust.
7. Lead – Leadership is crucial in a crisis but it does not happen automatically. Leadership requires a clear allocation of responsibility as well as pre-defined principles that will guide decisions.
8. Communicate and deal with misinformation – it is becoming increasingly crucial not only to deliver the right policies but to also communicate honestly and effectively, as well as addressing misinformation, and even deliberate disinformation, head on. Leaders but also public servants and analysts need to become better communicators in a crisis environment.
9. Multitask – even in an age of permacrisis, there are long term challenges that citizens expect to be tackled, including inequalities, climate change and the well-being of citizens. In a crisis, it is essential to maintain a policy focus on long term policy objectives, not only given their importance in their own right but also because inability to address them reduces citizens’ acceptance of measures necessary to deal with immediate crisis.
10. Change mindsets – in the long run, the most important challenge is to change mindsets. Human beings tend to prefer stability and predictability over uncertainty, even if there are not only risks but also opportunities. But this is not the world we are living in and expectations will have to be managed better.
For the European Union, the required responses to the age of permacrisis are particularly challenging. The European dimension inevitably involves coordinating across borders, dealing with different political systems, preferences and sensitivities. However, there is no alternative when we deal with crises that are also inevitably cross-border, where EU member states are connected in a web of interdependency.
Despite the challenge of coordination, cooperation and leadership at the EU level, much has changed in recent year where the capacity and capability of the EU is concerned. That is not to say that all mistakes have been avoided but, equally, there have been many instances when the EU, collectively, has been able to take decisive action to deal with a crisis situation. However, this process is far from over. If we continue to live in an age of permacrisis, the EU will have to grow and adapt its capacity and capability further, building on the changes that have already taken place.
Written by Fabian Zuleeg
Fabian Zuleeg is Chief Executive and Chief Economist at the European Policy Centre.