| 1. Networks of heterogeneous social actors |
In all social systems, the people involved can be thought of as networks of heterogeneous social actors, each one acting on a limited diet of information and self-interest. This is valid for taxpayers, citizens in general, and individuals performing other social roles, such as consumers. |
| 2. Emergence |
The behavior of the whole system is different from that of individual social actors and can be said to emerge from rules governing the actions of downstream social actors. Traffic, for instance, emerges when most people opt for driving at the same time, influencing, in turn, the decision of social actors in using other means of transportation or moving closer to their main destinations. |
| 3. Endogeneity |
The dynamics of systems arise spontaneously from their internal structure. Self-reinforcing and balancing feedback loops define how the system behaves over time. For instance, the more incentivized tax collection programs are expected, the more taxpayers avoid paying their taxes on time. |
| 4. Nonlinearity |
Effects are rarely proportional to causes. Instead, nonlinearities are the rule. A higher tax burden may produce less tax revenues. |
| 5. Scaling |
The Pareto principle, or ‘80-20 rule,’ is useful for explaining why problems such as income inequality persist. More generally, most social problems are caused by a small percentage of segments, groups, or individuals. |
| 6. Different time scales |
Changes in systems occur on many different time scales, and such scales sometimes interact among themselves. Many policies that address symptoms in a system, such as building roads to alleviate traffic, produce benefits in the short term, only to be defeated in the long term. |
| 7. Path dependence and hysteresis |
Decisions alter the state of the world, causing changes in the system and triggering other social actors to act in response. The new situation then constrains the path for subsequent courses of action. For instance, once a country chooses to rely on roads to connect its economic centers, it is very difficult to change its transportation system to trains, for instance. The same stickiness occurs in the taxation system. |
| 8. Delays, accumulation of stocks, and inertia |
Policies usually require a long time horizon to manifest their results. Material stocks (e.g., financial resources, people) and non-material stocks (e.g., reputation, human capital, trust) accumulate over the continuous passage of time. Moreover, delays in recognizing problems and changing the course of policies create strong inertia in social systems. |
| 9. Adaptation, learning, and exploitation |
Capabilities and decision-making rules employed by social actors change over time. Adaptive systems may balance exploitation and exploration. Many social actors strive to find points of exploitation in the system, as it is common in the taxation system: all tax holes will be exploited. |
| 10. Presence of surprising and counter-intuitive behaviors |
Causes and effects are distant in time and space. The natural tendency of human beings is to pay attention to concrete symptoms. Causes are often buried under deep layers of systemic structures. Traffic is the perfect example: it is caused not by excess vehicles, but by the inadequate management of scarce resources, such as roads and the right to pollute. |
| 11. Policy resistance |
The complexity of systems overwhelms our ability to understand them. Many seemingly obvious solutions fail or worsen the underlying problem, as it is the case of tax debt collection programs (see discussion in the main text). |
| 12. Temporal trade-off |
The long-term response of a system is often different from its short-term response. Effective policies often cause worse-before-better behavior, while superficial solutions tend to produce small improvements and then make the underlying problem worse over time. |
| 13. Resilience |
Resilience is a function of redundancy, modularity, and diversity. Complex social systems have different degrees of resilience. They typically absorb most of the ‘normal’ disturbance from the outside, but resilience is lost when the system is optimized for efficiency - this is when tipping points may be easily crossed. COVID-19 exposed how our national economies are deeply interconnected in an ‘efficient’ system, depending on raw materials from abroad, a situation that created bottlenecks, scarcity, and inflation. |
| 14. Local rationality |
Bounded rational social actors strive to reach their own goals, which often are in opposition to the goals of the entire system. Taxpayers may only care about their personal cost/benefit ratio when deciding whether to comply with the tax code. |
| 15. Balance of power and narratives |
In any social system, a balance of power favors some class or network of social actors. Groups who have access to political and economic channels often control the societal mechanisms of sense-making - perceiving and interpreting problems, opportunities, and enacting pressures for change. |
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Note. 
Note. Elaborated by the authors.
Note. Adapted from 
Source: Elaborated by the authors.