ABSTRACT
This chapter establishes a more explicit theoretical bridge between government agency and complexity economics. One of the challenges of the current research agenda on economics includes a more accurate theoretical account on the role of the state within a complex economic system. The idea of providing societal governance frameworks that ensure personal freedom and autonomy, and which prevent sedimented bureaucracies from stifling human creativity, is one worth of advocating for. Economic development is activity-dependent. New technologies create scope for new innovative activities, increasing returns and therefore productivity, which ultimately leads to structural change in the long term, together with an improvement in living standards. From an institutional perspective, standards are institutions that contain a considerable (but not the whole) amount of technological knowledge in codified form. Institutions co-evolve through processes of complex informal but also formal coordination that create common cultures, reputation mechanisms and mutually adapting expectations.
