The Emergence of Global Systemic Risk

The authors argue that the world constitutes a tightly coupled, global complex system that endogenously generates systemic risks and vulnerabilities as it grows more complex. After discussing complexity, risk, and networks as key elements of their framework, they provide case studies of global systemic risk in trade, finance, infrastructure, climate change, and public health. The piece concludes that “risk analysis also teaches us that it may be the very structure of—and protocols followed by—an organization to manage local risks that ultimately produces the larger systemic risks. We believe this endogeneity of risk within global systems may represent the most important sociological lesson from this analysis” (p. 78).