Uncertainty vs. Risk

Term

Uncertainty vs. Risk

Idea level

Concept

Definition

Uncertainty vs. Risk is a conceptual distinction articulated by Yuen Yuen Ang to differentiate the nature of indeterminacy in complex versus complicated settings. In complicated, machine-like settings, outcomes involve risk, defined as the probability of undesired outcomes that can be estimated and controlled, whereas in complex systems, outcomes involve uncertainty, understood as an open-ended space of possibilities—some negative, others positive—that cannot be known in advance and therefore require influence over adaptive processes rather than control.

Sources

First articulation:

• Ang, Yuen Yuen. How China Escaped the Poverty Trap (2016), Chapter 2, Table 2.1 (Complicated vs. Complex).

Theoretical Synthesis

• Ang, Yuen Yuen. “Adaptive Political Economy: Toward a New Paradigm.” World Politics (2024). Table 1 (reprinted from How China Escaped the Poverty Trap)

Genealogy

[Paradigm] AIM (Adaptive, Inclusive, Moral Political Economy)

→ [Pillar] Adaptive Political Economy (APE)

→ [Concept] Complex ≠ Complicated

→ [Concept] Indeterminancy: Uncertainty vs. Risk

→ [Model] Directed Improvisation

Quotes

“We face risks in complicated worlds but uncertainty in complex worlds.”

Complex systems can evolve and generate uncertainty, that is, possibilities that are beyond the anticipation and planning of agents within the system. Some possibilities are terrible, such as stock market crashes and outbreaks of war. Yet some possibilities are marvelous, such as scientific breakthroughs, artistic innovations, and the information revolution that we are currently experiencing.

To extinguish uncertainty is to extinguish possibilities, both terrible and marvelous.

Risks may be predicted and controlled to a varying extent, but possibilities may only be imagined.”

— Ang, How China Escaped the Poverty Trap, Chapter 2, p. 52

A world of complexity, however, is full of uncertainty. Even authoritarian leaders sometimes do not know what precise outcomes they prefer or what solutions may arise. In a complex world, as we find in political economies, influencing processes of change and empowering ground-level actors to find their own solutions promises to be more fruitful than trying to control exact outcomes.

— Ang, How China Escaped the Poverty Trap, Chapter 2, p. 49

Concept Constellation

Across Ang’s work, Uncertainty vs. Risk consistently co-appears with the following concepts and analytic themes:

• Adaptive Political Economy

• Complex adaptive systems

• Complicated ≠ Complex

• Influence vs. Control

• Possibility vs. probability

• Directed Improvisation

• Ambiguity

• In contrast to: Complicated; Mechanical Thinking; Industrial-Colonial Paradigm