Is There Any ‘Law of Requisite Variety’ in Construction of Indices for Complex Systems?

Abstract

The issue of design of indicators for complex socio-economic systems, described by multiple characteristics (variables) is considered in this paper primarily from the point of view of the purpose, for which the indicators are developed and used, and the available instruments, which can be used to achieve this purpose. Hence, the paramount importance is assigned to the correspondence between the space of observed variables and the space of possible actions or instruments, as potentially leading to the design of the “optimum indicators”. The close association between the design of indicators and the available (or also designed) policy instruments is justified in the framework of the classical decision making feedback loop. The proposal is illustrated with the case of a group of models from the modelling project that was carried out at the Systems Research Institute, Polish Academy of Sciences, in close collaboration with the Institute of Geography and Spatial Organization, also of the Academy, devoted to the development and implementation of a system of forecasting models for a series of variables, characterising the socio-economic situation of the capital province of Masovia, and its particular administrative units.