Public Policy Modeling

Causal Loop Diagrams

Wednesday, March 15, 2017

Hun Myoung Park, Ph.D.

Public Management & Policy Analysis Program

Graduate School of International Relations
 Systems Thinking
Emphasis on interactivity and dynamics of
activities.
Introduction of system dynamics
To describe the structure of a system
(physical and non-physical system)
To produce a causal map or calusal loop
diagram.

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 Causal Loop Diagram 1
A CLD or causal map depicts the structure
of a system or a set of causal relationships
among variables (activities) in a system
Used in system dynamics
But general tool to describe concepts
(systems) and communicate with others

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 Causal Loop Diagram 2
CLD consists of
Variables of a system. Interdependent (V
), dependent (V), and independent (V)
Cause-and-effect relationships among
variables, S for the same direction or O for
the opposite direction
Feedback loop is a closed circuit of
interconnection between variables. R for
reinforcing feedback or B for balancing
Delay
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 Drawing a CLD 1
1. Identify a systemic problem that is chronic
and recurring and has a history and/or
pattern.
2. Set a boundary and level of simplicity

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 Drawing a CLD 2
3. Identify key variables (activities) that are
significant events or phenomena that
jointly influence the overall system.
Use nouns or noun phrases
Include the level of, the amount of,
the number of, or the size of, if
possible.
Use a neutral or positive term. Avoid
such words as failure and increase.
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 Drawing a CLD 3
4. Begin with more interesting variable
(activity) and work backward (begin with
an effect and look for its cause) or move
back and forth (both directions).
5. Indicate cause-and-effect relationship
using a link and arrow. A departing point
influences the destination (AB).

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Drawing a CLD 4
E ffe c t 0
S

C au se 0

C au se 1

O
E ffe c t 1

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 Drawing a CLD 5
6. Indicate the type of the relationship
between two variables on the link.
+ or S (same direction) means a positive
relationship between two variables.
When A increases, B will increases;
When A decreases, B will decreases.
- or O (opposite direction) indicates a
negative relationship. If A increases, B
will decrease; when A decreases, B will
increase.
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 Drawing a CLD 6
7. Delay means that it takes long time for an
cause results in its effect.
Depicted by || or Delay on the link
[M]ake systems behavior unpredictable
and confound our efforts to control that
behavior. (Anderson & Johnson,1997, p.57)

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 Drawing a CLD 7
8. If a link between two variables is not
clear, redefine the variables or insert an
intermediate variable between the two.
9. Keep revising iteratively; No CLD is ever
finished. Begin with a simple CLD and try
more challenging one incrementally.
10. Label feedback loop with either R for
reinforcing or B for balancing

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 An Example of CLD 1
Work backward begins with the
important effect and then seeks
subsequent cause-effect chains.
Begin at the beginning or work forward
Go back and forth

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 An Example of CLD 1
Bank failure as a system problem
First ask, What caused the bank failure?
Probably banks solvency is the cause of
bankruptcy (bank failure).
What is the relationship between the two
variables? When banks solvency is low, bank
failure is more likely (high). or O
Then ask, What caused banks solvency?
Probably
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 An Example of CLD 3
B a n k F a ilu re
?

B a n k F a ilu re
O
?

B a n k F a ilu re
O
B a n k 's S o l v e n c y

B a n k 's S o l v e n c y

W ith d ra w a ls o f
Funds

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 An Example of CLD 4
B a n k F a ilu re
O

B a n k 's S o l v e n c y D e p o s ito rs '

C o n fid e n c e
O

B a n k F a ilu re
O O
W ith d ra w a ls o f
Funds

D e p o s ito rs '
B a n k 's S o l v e n c y
C o n fid e n c e
O

W ith d ra w a ls o f O
Funds
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 Software for CLD
Vensim (https://vensim.com/)
iThink (http://www.iseesystems.com/)
STELLA (http://www.iseesystems.com/)
Powersim (http://www.powersim.com/)
Anylogic (http://www.anylogic.com/)
You may also try LibreOffice Draw or
Microsoft Visio

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 Feedback Loop 1
A feedback loop is a closed circle of
interconnection between variables or a
series of mutual cause and effect (causal
relationships).
Mutual causation is the simplest
feedback loop. ABAB
The loop is internally initiated by the
system and insensitive to environment.

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 Feedback Loop 2
A closed circle requires that an activity
influences (comes back to) itself
eventually.
Initial cause and ultimate consequence is
NOT distinguishable clearly.
Given endless cause-effect chains, such
distinction is almost meaningless in most
circumstance.

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 Feedback Loop 3
[E]verything is indeed connected to everything
else, so, in principle, it doesnt matter where
you start (Sherwood, 2002: 128).
[C]ycling back means that what was originally
a cause is now suddenly an effect (Weick,
1979: 77).
[A]ny change made anywhere will eventually
itself be changed by the consequences it
triggers (Weick, 1979: 77)

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Feedback Loop 4

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 Feedback Loop 5
The interdependent relationships in a structure
(system) are more important than initial cause
or starting point.
Structure characterizes the system and
starting point does not matter.
Reinforcing feedback loop?
Balancing feedback loop?

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 Reinforcing Feedback Loop 1
A reinforcing or positive feedback loop
A feedback loop with even number of negative
signs (-) or O (i.e., 0, 2, 4, ).
Depicted by R or + in the center of a
feedback loop
Self-reinforcing feedback
Deviation amplifying feedback.
No regulation or control

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Reinforcing Feedback Loop 2
B a n k F a ilu re
O

O
D e p o s ito rs '
B a n k 's S o l v e n c y R (+ )
C o n fid e n c e
O

O
W ith d ra w a ls o f
Funds
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 Reinforcing Feedback Loop 3
Reinforcing loops can be seen as the engines
of growth and collapse (Anderson & Johnson,
1997: 54).
Destabilize the system and deviate from its
equilibrium
Form a vicious circle or virtual circle

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 Balancing Feedback Loop 1
A balancing or negative feedback loop
A feedback loop with odd number of negative
sign (-) or O (i.e., 1, 3, 5, ).
Depicted by B or - in the center
Goal seeking feedback, stabilizing feedback,
deviation-counteracting, or self-refraining
feedback

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Balancing Feedback Loop 2
B irth S

O
P o p u la tio n
S

B (-)

D e a th
S

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 Multiple Feedback Loop 1
What if there are multiple feedback loops in a
system? Some loops are balancing, while
others are reinforcing
If loops are of unequal importance, then ask,
Which feedback loop is dominating in the
system?
Such dominating or the most important loop
will determine the fate of the system in the end
(Weick, 1979: 74).

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 Multiple Feedback Loop 2
[T]he greater the number of inputs to and/or
outputs from an element, the more important
that element is (Weick, 1979: 75).
[C]lose loop that contains the greatest number
of these important elements (Weick, 1979: 75-
76)

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 Multiple Feedback Loop 3
What if there is no dominant feedback loop? All
feedback loops are equally important.
Count the number of negative loops
Count the total number of negative
relationships (count whenever it appears in a
feedback loop)
An odd number indicates a balancing or
deviation-counteracting system
An even number indicates deviation-amplifying
system (Weick, 1979: 76).
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 How To Change a System?
Change in a relationship from (opposite) to +
(same direction)
Change in a relationship from (same) to -
(opposite direction)
Add/delete some relationships
Shock (external input) will be decayed without
changing the structure of a system
Add/delete activities (new system)

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 Illustration of Causal Maps
Impact of DDT on Malaria
Economy and population
Corruption system
Electrical energy system
Common pool resources system

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Impact of DDT on Malaria 1

S
Disease (Malaria) DDT Use
S B1

O
Mosquito

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Impact of DDT on Malaria 2

DDT in Breast Milk

R2 S

S
Disease (Malaria) SDDT Use
S B1

O
Mosquito
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Impact of DDT on Malaria 3
DDT in Breast Milk

R2 S

S
Disease (Malaria) SDDT Use
S B1
S
Mosquito O S
# Rat DDT Accumulation in
O R3 Gecko (Lizard)
O
# Cat

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http://butane.chem.uiuc.edu/pshapl
ey/Environmental/L37/1.html

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Impact of DDT on Malaria 5
DDT in Breast Milk

R2 S

S
Disease (Malaria) S
DDT Use
S B1
S S
Mosquito O S
# Rat DDT Accumulation in
O R3 Gecko (Lizard)
# Thatch Roof Eaten O
and Destroyed O
S # Cat # Parasitic Wasp
R5
R4
S
O
# Caterpillar
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 Impact of DDT on Malaria 6
Loop 1 (Balancing): DDT UseMosquito
Disease
Loop 2 (Reinforcing): DDT UseDDT in
Breast MilkDisease
Loop 3 (Reinforcing): DDT UseDDT in
GeckoCatRatDisease
Loop 4 (Reinforcing): DDT UseWasp
CaterpillarThatch RoofDisease
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 Economy and Population 1
Sherwood (2002, pp.241-262)

D e a th R a te
S

D e a th s
B1 S
O
P o p u la tio n
B2 S
O
B irth s

S
B irth R a te
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 Economy and Population 2
Sherwood (2002, pp.241-262)

Disease

S
Death Rate
S
Deaths
B1 S
O
Population
R2 S
S
Births
S
Birth Rate
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 Economy and Population 3
Sherwood (2002, pp.241-262)

Disease

S
Death Rate
S
S
Economic Activity
Deaths
S S
O B1
Desire for Wealth Population
R2 S
S
Births
S
Birth Rate
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 Economy and Population 4
Sherwood (2002, pp.241-262)
Pollution
S

B3

Resource Consumption S
Disease
S

S
Death Rate

S S
Economic Activity
Deaths
S S
O B1
Desire for Wealth Population
R2 S
S
Births
S
Birth Rate
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 Economy and Population 5
Sherwood (2002, pp.241-262)
Pollution
S

Resource Capacity B3

Resource Consumption S
O
S S Famine Disease
S Competition for
Scarce Resources B5
B4 S S
War S
S Death Rate
S
S
Economic Activity
Deaths
S S
O B1
Desire for Wealth Population
R2 S
S
Births
S
Birth Rate
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Economy and Population 6

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Economy and Population 7

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 Corruption System
S P e n a lty
R3
S
A m o u n t o f B rib e

S R4

P ro fe s s io n & E th ic s
O
R2
S R 5
O
O
R is k o f B e in g A rre s te d B rib e ry
S O O

B1
S M in im u m S a la ry

E ffo rt o f In v e s tig a tio n

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 Electrical Energy System
Nuclear Power
S S

O O
Energy Shortage Electricity Price
O S

S S
Alternative Energy
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 Common Pool Resources
S R1 My Net Gain
My Egoistic Behavior S S

Resource Limit
B3
S
S
Net Gain per
Collective Action
O Individual
S
B4

Others' Egoistic S
R2 S
Behavior
S Others' Net Gain

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 Opium Market System
Terrorism (Insecurity)
O
S Governmental
S Corruption
O

S S
Trafficker (Smuggler) O O
O O
Government Capacity
(Anti-terror/anti-drug)

S
S
Opium Traffic O
Opium Price Social Development
S (Smuggle)
O (income, education)
S
Crop Cultivation
O

O O S
S
Opium Supply S Puppy Cultivation

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