Research Glossary
88 key terms and formulas from our research papers, organized alphabetically. Filter by paper to explore specific concepts.
Adaptation Finance
Funding for climate change adaptation (preparing for impacts) rather than mitigation (reducing emissions). Requires patient, non-extractive capital because returns are measured in avoided losses over decades, not financial yields.
Building a seawall costs $50M today but prevents $500M in flood damage over 50 years. Traditional finance struggles because returns are loss-avoidance, not revenue. PSC-G enables this.
Administrative Overhead
The first hidden cost of enforcement-based systems. Resources spent on monitoring, auditing, reporting, and compliance verification. These costs can consume 15-30% of program budgets in traditional grant systems. AoE designs eliminate most administrative overhead by making compliance natural rather than monitored.
Traditional grant compliance requires quarterly reports, site visits, and financial audits. PSC compliance is self-documenting—if capital recycles, the system is working. Administrative cost approaches zero.
Alignment Capital
Capital deployed in temporal alignment with beneficiary lifecycle needs. Unlike debt that demands repayment regardless of circumstances, alignment capital flows when beneficiaries are in need and recycles when they have capacity.
A student receives education funding during study (need period) and pays forward after career establishment (capacity period)—not during the stress of immediate graduation.
Alignment OperatorΛ (Lambda)
The operation that synchronises capital cycles with mission cycles. A system satisfies Λ when capital operates on the same timescale as the mission it serves—matching asset lifetimes, research timelines, or climate recurrence intervals.
A 30-year medical equipment fund matches the equipment lifecycle: deploy, use, generate revenue, pay forward, redeploy. The capital cycle (30 years) aligns with the mission cycle (equipment lifetime).
Alignment Operator (Λ)Λ (Lambda)
Measures how well capital deployment matches beneficiary lifecycle phases. High Λ means funding arrives when needed and recycling occurs when capacity exists. Λ = 1 represents perfect alignment.
Λ = Σ(funding × need_match) / Σ(funding)A scholarship that covers tuition during study years and expects pay-forward after 5+ years of employment has Λ ≈ 0.9. A loan requiring payments during study has Λ ≈ 0.3.
Alignment Operator (Λ) - RC-WDΛ (Lambda)
The operation that synchronises capital cycles with mission cycles. When K(t) = M(t), capital operates on the same timescale as the mission it serves. Healthcare capital matches healthcare timelines; infrastructure capital matches infrastructure timelines.
K(t) = M(t)A 30-year infrastructure program gets 30-year capital, not annual budget allocations. The capital cycle length matches the mission cycle length, eliminating temporal misalignment.
AoE Boundary Conditions
The limits of ease-based design. AoE works when: (1) preferred and non-preferred actions are distinguishable, (2) system designer controls friction factors, (3) future access has positive value, (4) identity can be shaped through system participation. When these conditions fail, traditional enforcement may be necessary.
AoE works well for capital recycling (clear actions, designer controls flows). AoE works less well for preventing violence (hard to make non-violence 'easier' than violence in conflict zones).
Architectures of Ease
A behavioural-systems theory of enforcement-free compliance. Rather than forcing desired behaviour through monitoring and punishment, AoE designs systems where the preferred action is simply the easiest action. Core thesis: 'People don't rise to the level of their values; they fall to the level of their systems.'
Spotify's subscription model achieves near-zero piracy not through DRM enforcement but by making legal streaming easier than torrenting. The architecture of ease eliminates the friction differential.
Balance Sheet Impact
How capital appears on beneficiary financial statements. PSC creates no liability (unlike loans), preserving borrowing capacity and credit standing.
A small business receives $50,000 PSC. Their balance sheet shows no debt, allowing them to still qualify for traditional bank loans if needed.
Behavioural Gradient FunctionP(compliance)
The core equation of AoE: probability of compliance as a function of three weighted mechanisms—friction differential (F), identity coupling (I), and future-cycle access (C). When the sum exceeds threshold, compliance approaches certainty without enforcement.
P(compliance) = σ[αF + βI + γC] where σ is the sigmoid functionA system with high F (preferred action is easy), moderate I (aligns with identity), and high C (valuable future access) achieves 95%+ compliance with zero enforcement budget.
Budgetary Gatekeeping
The power held by funders, governments, or institutions to control access to capital through discretionary allocation decisions. PSC weakens budgetary gatekeeping by making capital flows dependent on system performance rather than funder approval.
A hospital dependent on annual government grants must lobby each budget cycle. With PSC, the hospital's capital regenerates based on patient outcomes, reducing dependence on political gatekeepers.
Capability Return (REA)γ (gamma)
The value generated per dollar deployed beyond the capital itself. γ > 1.0 means each deployment creates additional value; γ = 1.0 means break-even; γ < 1.0 means value destruction.
γ = Total Value Generated / Capital DeployedEducation funding with γ = 1.7 generates $170K of economic value (higher earnings, productivity) from a $100K scholarship. This capability return compounds with recycling.
Capital Decay
The gradual reduction in available capital over cycles when R < 1.0. Even with 90% recycling, each cycle loses 10% of capital.
Capital after N cycles = C₀ × RᴺWith R=0.9, after 10 cycles: $100K × 0.9¹⁰ = $34,867 remaining.
Capital Evolution (RC-WD)Cₙ
The mathematical progression of regenerative capital through cycles. Capital at cycle n equals initial capital times recycling rate to the power (n-1). With high recycling rates, capital persists across multiple government transitions.
Cₙ = C₀ × Rⁿ⁻¹$100M initial capital with R=90%: after cycle 1 = $90M, after cycle 2 = $81M, after 10 cycles = $34M still operational. The fund survives multiple political transitions.
Capital Phase Space
A two-dimensional mapping of capital types by extraction rate (how much value is extracted from beneficiaries) and time horizon (how long capital persists). The four quadrants define debt, equity, grants, and regenerative capital.
Debt sits at high extraction/short horizon. Grants sit at low extraction/short horizon (depletes). Regenerative capital occupies the optimal quadrant: low extraction/long horizon.
Capital Productivity (λ)λ (lambda)
The value generated per dollar deployed in a single cycle. In extractive models, λ must exceed 1 + interest rate for the system to survive. In regenerative models, even λ slightly above 1 can compound to massive system value over time.
λ = Value Generated / Capital Deployed (per cycle)A workforce training program with λ = 1.5 generates $150K of economic value from a $100K deployment. Over multiple PSC cycles, this compounds dramatically.
Climate Discount Rate
The rate at which future climate benefits are discounted to present value. Traditional finance uses 5-10% (making 50-year benefits nearly worthless). PSC-G uses near-zero rates, properly valuing long-term adaptation.
PV = FV / (1 + r)^n — at r=7%, $1M in 50 years = $33K today; at r=1%, = $608KA $100M seawall preventing $2B damage in 2075 is 'worth' only $66M at 7% discount but $1.2B at 1% discount. PSC-G uses low rates aligned with actual intergenerational value.
Collaborative Design
The practice of including diverse stakeholders—especially beneficiaries—in the design of regenerative systems. Recognises that lived experience provides essential knowledge about cycle timing and alignment needs.
A scholarship redesign process includes recent graduates, current students, and employers to understand actual transition timelines rather than assumed ones, resulting in better-aligned pay-forward expectations.
Crowding Out
The third hidden cost of enforcement: extrinsic motivators (monitoring, penalties) can destroy intrinsic motivation. Once people are paid or punished for behaviour, they stop doing it for its own sake. AoE preserves intrinsic motivation by never introducing extrinsic controls.
Blood donation rates dropped when countries introduced payment—paying 'crowded out' the intrinsic motivation to help. PSC pay-forward rates exceed loan repayment rates because contribution remains voluntary.
Cycle Constitution
A governance mechanism that protects temporal integrity across political and organisational turnover. Like a constitutional separation of powers but for time—preventing short-term cycles from capturing long-term capital.
A cycle constitution might require supermajority approval to shorten fund horizons, multi-year deliberation for structural changes, and beneficiary consent for mission modifications.
Cycle Constitution (Ψ)Ψ (Psi)
A governance mechanism that protects temporal architecture from short-term pressures. Like a national constitution protects rights from temporary majorities, a Cycle Constitution protects long-term capital from impulsive redirection.
A Cycle Constitution might require supermajority approval to shorten fund horizons, multi-year deliberation periods for structural changes, beneficiary consent for mission modifications, and independent temporal guardians.
Cycle Durationτ (tau)
The average time between capital deployment and beneficiary pay-forward. Varies by sector: education (4-7 years), healthcare (2-3 years), small business (1-3 years).
Education scholarships have τ ≈ 5 years (graduation + job + financial stability + contribution).
Cycle Recognition
The cognitive skill of identifying temporal patterns in institutional systems—seeing where fragility cycles threaten missions and where alignment opportunities exist. The first step in regenerative design.
A policy analyst recognises that a 10-year infrastructure project is governed by 2-year budget cycles, identifying a fragility source that can be addressed through structural redesign.
Decoupling OperatorΔ (Delta)
The operation that separates capital cycles from fragility cycles (political, financial, capability, civic). A system satisfies Δ when its capital flow is insulated from short-term external pressures.
A PSC fund satisfies Δ because it doesn't require annual donor renewal, political approval, or depend on market conditions—it's decoupled from all four fragility cycles.
Decoupling Operator (Δ)Δ (Delta)
Measures the temporal gap between when capital is needed and when repayment is demanded. High Δ indicates severe misalignment (need-repayment timing mismatch). Traditional debt has high Δ; PSC minimizes Δ by waiting for capacity.
Δ = |T_need - T_repayment| / T_lifecycleA mortgage demands payment immediately (month 1) when the buyer has minimal equity. Δ ≈ 0.9. PSC housing would wait until equity builds. Δ ≈ 0.2.
Decoupling Operator (Δ) - RC-WDΔ (Delta)
The operation that insulates capital flow from fragility cycles. When δK/δF = 0, capital flow is independent of fragility cycle state. The capital keeps flowing regardless of political changes, recessions, staff turnover, or donor fatigue.
δK/δF = 0A PSC-based development fund satisfies Δ because it doesn't require annual parliamentary approval, isn't vulnerable to market conditions, and doesn't depend on any single staff member's continued employment.
Dependency Ratio
The proportion of an institution's operating capacity that depends on discretionary external funding. PSC reduces dependency ratio by converting discretionary grants into self-regenerating capital.
Dependency Ratio = Discretionary Funding / Total Operating BudgetA clinic with 80% of its budget from annual grants has high dependency. Converting half to PSC drops dependency to 40%, giving the clinic more mission autonomy.
Deployment Efficiencyγ (gamma)
The ratio of social value created per dollar deployed. Accounts for program overhead, targeting effectiveness, and impact multipliers.
γ = Social Value Generated / Capital DeployedA program with γ = 1.2 creates $1.20 of measurable social value per dollar deployed.
Donor Psychology Transformation
The shift in donor mindset from 'purchasing outcomes' (transactional giving) to 'seeding perpetual systems' (generative giving). PSC changes what donors expect and how they relate to the institutions they fund.
Traditional donors ask 'What did my money buy this year?' PSC donors ask 'How many cycles has my capital completed?' The relationship shifts from accountability for spending to celebration of regeneration.
Ease-Based Compliance
The design philosophy of making preferred behaviour the path of least resistance. Rather than asking 'how do we make people comply?' ease-based design asks 'how do we make compliance the natural default?' Achieves higher compliance rates at lower cost.
Organ donation rates: opt-out countries (ease-based) achieve 90%+ donation; opt-in countries (effort-based) achieve 15-30%. Same population, different architecture, vastly different outcomes.
Extraction Rate
The proportion of value that flows from beneficiaries back to capital providers as interest, dividends, or required returns. Regenerative capital has zero extraction—all value either stays with beneficiaries or recycles to help future beneficiaries.
Extraction = Value to Capital Providers / Total Value GeneratedA 7% interest loan extracts 7% annually. Equity extracts via dividends and governance. PSC extracts 0%—recycled capital helps new beneficiaries, not original funders.
Extractive vs Regenerative Logic
Extractive capital seeks return-to-source (interest, dividends, profit), creating drain on beneficiaries. Regenerative capital seeks system-strengthening, where returns flow back into the system to benefit future participants rather than external capital holders.
A traditional loan extracts $110K from a small business for a $100K loan (extractive). PSC provides $100K that cycles to help multiple businesses without extracting profit (regenerative).
Four Capital Classes
The complete taxonomy of capital: (1) Debt—extracts interest, creates liability; (2) Equity—extracts profit, shares ownership; (3) Grants—no extraction but terminal (capital depletes); (4) Regenerative Capital—no extraction, perpetual (capital recycles). PSC is the primary implementation of regenerative capital.
A foundation considering how to deploy $1M can choose: loans (get repaid + interest), equity investment (get ownership + dividends), grants (give away once), or PSC (give as gift that recycles).
Four Fragility Cycles
The four distinct cycles that can disrupt development capital: (1) Political fragility (elections, 3-5 years), (2) Financial fragility (recessions, 7-12 years), (3) Capability fragility (staff turnover, 2-5 years), (4) Civic fragility (donor fatigue, 2-4 years). RDF addresses all four simultaneously.
A climate adaptation project might survive political change only to be cut during a recession, then survive that only to lose key staff. RDF decouples capital from all four fragility cycles.
Four Structural Invariants (REA)R, γ, Δ, Λ
The four mathematical conditions that must hold for a capital system to be regenerative: R (recycling rate), γ (capability return), Δ (decoupling operator), and Λ (alignment operator). Together they define the regenerative criterion.
Regenerative = (R ≥ 0.8) ∧ (γ ≥ 1.0) ∧ Δ ∧ ΛTraditional grants fail on R (no recycling). Debt fails on γ (extracts rather than generates). Equity fails on Δ (coupled to market cycles). Only regenerative capital satisfies all four.
Fragility and Burnout
The fourth hidden cost of enforcement: systems requiring constant vigilance are inherently fragile. Enforcement capacity degrades under stress precisely when it's most needed. AoE systems remain stable under pressure because compliance doesn't depend on active monitoring.
During COVID, organisations with strict compliance requirements collapsed as monitoring capacity disappeared. PSC systems continued operating because compliance was structural, not supervised.
Fragility Cycles
Short-term, volatile cycles that can disrupt long-horizon missions if they control capital flows. Four types: Financial (markets, recessions), Political (elections, policy shifts), Capability (staff turnover, leadership changes), and Civic (public attention, donor fatigue).
A 100-year climate adaptation project fails because it's governed by 4-year political cycles—when governments change, funding disappears. This is political fragility disrupting mission alignment.
Fragility-Based Control
A mechanism where funders maintain influence over institutions by keeping them in a state of financial fragility—dependent on the next grant or allocation. Institutions in fragile states are more compliant with funder preferences.
A nonprofit that must re-apply for funding annually is more likely to align its programs with funder priorities, even if those priorities diverge from community needs.
Friction DifferentialF
The difference in effort, time, or cognitive load between taking the preferred action and taking an undesired alternative. When F > 0, the preferred action is easier. AoE designs maximise F by reducing friction on the preferred path and/or increasing friction on alternatives.
F = Eₙ − Eₚ (where Eₙ = effort for non-preferred action, Eₚ = effort for preferred action)Before PSC: applying for grants requires 200 hours of proposals (high friction). Alternative: not helping beneficiaries (zero friction). F is negative. After PSC: capital recycles automatically. F becomes positive.
Future-Cycle AccessC
The expected value of maintaining access to future system benefits. When defection costs future access (not through punishment but through natural system exclusion), cooperation becomes self-interested even without enforcement.
C = U(Aₜ₊₁) (expected utility of continued system access)App Store developers comply with rules not because Apple actively polices every app, but because losing access to future distribution (C) exceeds any benefit from rule violation.
Governance Technology
A structured mechanism that redistributes decision-making authority, alters incentive landscapes, and changes power relationships between actors. PSC functions as a governance technology because it transforms who controls capital flows and under what conditions.
Traditional grants concentrate power in the funder who decides each year whether to renew. PSC distributes this power—once capital is deployed, it cycles based on beneficiary success, not funder discretion.
Identity CouplingI
The degree to which an action reinforces or conflicts with a person's self-concept. When preferred behaviour aligns with identity ('I am the kind of person who...'), compliance becomes self-reinforcing rather than requiring external motivation.
I = Uᵢₐₑₙₜᵢₜᵧ(p) − Uᵢₐₑₙₜᵢₜᵧ(n)PSC graduates who pay forward aren't repaying a debt—they're continuing the story of being helped. The identity is 'part of a giving chain' not 'debtor.' I is maximised because paying forward confirms self-image.
Infinite Horizon Analysis
The mathematical framework for evaluating capital over perpetual time horizons. For regenerative capital with R > 0, system value approaches infinity as time extends, unlike terminal grants which have fixed finite value.
As N → ∞: TSV → γC₀/(1-R) when R < 1A $100K PSC fund with R=0.9 and γ=1.2 approaches $1.2M in perpetual system value, compared to $120K for a one-time grant.
Initial CapitalC₀
The starting capital pool for PSC deployment. Can be from donor gifts, foundation grants, government allocation, or institutional investment.
A donor contributes $100,000 to establish a PSC education fund. C₀ = $100,000.
Institutional Autonomy
The capacity of an institution to make decisions based on its mission and stakeholder needs rather than funder preferences. PSC enhances institutional autonomy by providing a stable capital base that doesn't depend on continuous external approval.
A university with PSC-funded scholarships can maintain admission standards without pressure to admit donor-preferred candidates, because the capital regenerates regardless of donor sentiment.
Institutional Fragility
The vulnerability of institutions to external shocks due to funding structure. Four fragility types: financial (market crashes), political (policy changes), capability (talent loss), and civic (mission drift). PSC reduces all four.
A nonprofit dependent on annual grants has high fragility—one policy change or donor exit collapses operations. PSC-backed institutions have reserves and recycling, reducing fragility.
Institutional Metabolism
The rate at which an institution processes resources, makes decisions, and adapts to change. Regenerative design requires matching capital metabolism to institutional metabolism for optimal alignment.
A fast-moving startup has high institutional metabolism (quarterly pivots), while a cathedral-building project has low metabolism (generational timescales). Capital structures must match these rhythms.
Intergenerational Capital
Capital designed to serve multiple generations, where beneficiaries include people not yet born. Requires time horizons beyond traditional investment (50-100+ years) and governance structures that persist across generations.
A climate infrastructure fund started in 2025 will still be disbursing capital in 2100, helping great-grandchildren of today's contributors. Traditional funds can't maintain this horizon.
Investment Horizon Optimization
Finding the time horizon that maximizes total value (financial + societal). Short horizons maximize liquidity; long horizons maximize compounding and systemic impact. Optimal horizon varies by sector.
Tech: 3-5 year optimal horizon (fast innovation). Infrastructure: 30-50 year optimal horizon (long payback). Traditional markets force tech horizons on infrastructure projects.
Lifecycle Mapping
The process of identifying beneficiary need phases (when capital is required) and capacity phases (when pay-forward is feasible). Critical for designing aligned capital structures.
Education: Need (ages 18-22), Transition (22-26), Capacity (26+). Housing: Need (purchase year), Transition (years 1-5), Capacity (years 5+).
Mission Cycles
The natural timescales required for missions to succeed. Four types: Asset lifetimes (equipment, infrastructure), Capability renewal (training, workforce), Climate adaptation (50-100 years), and Intergenerational (education outcomes, generational wealth).
Scientific research has a 15-25 year mission cycle (from hypothesis to breakthrough). When funded by 3-year grant cycles, the mismatch causes 40% of scientist time spent on proposals instead of research.
Mission Cycles (RC-WD)
The natural timescales required for different development missions to succeed. Four primary domains: Health (3-7 years for intervention cycles), Science (2-5 years for research cycles), Climate (3-15 years for adaptation), Infrastructure (5-30 years for construction and maintenance).
Scientific research has a 15-25 year mission cycle from hypothesis to breakthrough. When funded by 3-year grant cycles, the 5-8× temporal misalignment causes 40% of scientist time spent on proposals instead of research.
Number of CyclesN
The total number of deployment-and-return cycles over the analysis period. Determined by time horizon divided by cycle duration.
N = Time Horizon / τA 30-year analysis with 3-year cycles: N = 30/3 = 10 cycles.
Patient Capital
Capital with extended time horizons that doesn't require quick returns. Rare in traditional markets due to fund structures (7-10 year PE funds) and investor expectations. PSC is inherently patient—no return timeline pressure.
A traditional VC fund must exit within 10 years. A PSC education fund can operate for 100 years, adjusting to changing educational needs without exit pressure.
Perpetual Horizon
The time horizon characteristic of regenerative capital: infinite or perpetual, compared to debt (short), equity (medium), and grants (single-use). Achieved when R is sufficiently high that capital persists indefinitely.
At R → 1.0, capital horizon → ∞A traditional grant has horizon = 1 cycle (then depleted). A 10-year loan has horizon = 10 years. Regenerative capital with R = 0.95 operates effectively forever, still maintaining 60% of original capital after 30 cycles.
Perpetual Social Capital (PSC)
A fourth capital class alongside debt, equity, and grants. PSC is characterized by zero interest, no liability on beneficiary balance sheets, soft repayment obligations, and capital recycling.
A $100,000 PSC deployment to fund scholarships. Graduates are encouraged (but not obligated) to pay forward when financially able, recycling capital for future students.
Political Fragility
The vulnerability of development programs to electoral cycles and political ideology shifts. Elections every 3-5 years allow new governments to redirect, reduce, or eliminate programs based on political preferences rather than effectiveness.
A successful maternal health program established by Government A gets defunded by Government B, which prioritises different sectors. All accumulated capability—trained midwives, established protocols, community trust—dissipates.
Power Distribution IndexPDI
A measure of how concentrated or distributed decision-making authority is within a capital system. Higher PDI indicates more distributed power (more stakeholders involved in capital allocation decisions).
PDI = 1 - Σ(share_i²) where share_i is each actor's proportion of allocation authorityA traditional grant has PDI ≈ 0 (one funder decides all). A mature PSC system might have PDI ≈ 0.8 (beneficiaries, operators, and recycled capital all influence flows).
PSC-G (Governance Mode)PSC-G
PSC configured for long-horizon infrastructure funding, particularly climate adaptation. PSC-G pools operate over 50-100 year horizons with patient disbursement schedules, no extractive returns, and intergenerational recycling.
A climate adaptation pool for Pacific islands operates for 75 years, disbursing 10-15% annually for seawalls and relocation, with recycling from successful adaptation projects funding the next region.
Psychological Reactance
The second hidden cost of enforcement: when people feel their freedom is threatened by rules, they resist even beneficial compliance. Enforcement creates its own opposition. AoE avoids reactance by never requiring compliance—people choose the easy path voluntarily.
Students forced to attend study sessions often resist learning. Students who can drop in to convenient study spaces learn eagerly. Same outcome, opposite psychological experience.
R Factor (Recycling Rate)R
The proportion of deployed capital that returns to the pool through beneficiary pay-forward contributions. Ranges from 0 (no recycling, like a grant) to 1.0 (perfect recycling).
R = Capital Returned / Capital DeployedIf $100,000 is deployed and beneficiaries pay forward $85,000 over time, R = 0.85 (85% recycling rate).
Re:School
The educational program of the Institute for Regenerative Systems Architecture (IRSA), teaching regenerative design thinking. Curriculum spans foundations (RCT, PSC), architecture (RCA, AC), applications (PE, Climate, RCM), and synthesis (RAT).
A foundation executive completes Re:School and returns to redesign their organisation's entire grantmaking approach, converting 30% of grant budget to PSC structures within two years.
Recycling Rate (REA)R
The fraction of deployed capital that returns to the system for redeployment. The regenerative threshold is R ≥ 0.8; below this, capital depletes faster than it regenerates.
C_{n+1} = C_n × R + γ_nAn education PSC with R = 0.85 means 85% of deployed capital returns through graduate contributions. Over 30 cycles, this creates 26× more value than a single grant deployment.
Regenerative Architecture Thinking (RAT)
A cognitive framework for designing systems that strengthen over time. RAT synthesises the theoretical foundations of RCT, the mathematics of PSC, and the temporal governance of RCA into an applied design discipline.
A foundation leader uses RAT to redesign their grantmaking from annual cycles to perpetual capital structures, shifting from grant-making to system-building.
Regenerative Capital
A distinct capital paradigm that strengthens systems over time rather than extracting value. Unlike debt (which extracts interest) or equity (which extracts profits), regenerative capital flows through beneficiaries and returns to help again, building system capacity with each cycle.
A community health fund that trains nurses who later contribute back to train more nurses—each cycle strengthens the healthcare system rather than depleting it.
Regenerative Compounding Formula
The core equation governing regenerative capital growth: capital at cycle n+1 equals capital at cycle n times the recycling rate plus the capability return. This formula shows how R and γ combine for exponential system value.
C_{n+1} = C_n × R + (γ - 1) × C_0Starting with $100K (C_0), R = 0.85, γ = 1.5: after cycle 1, capital = $100K × 0.85 + $50K = $135K. The system grows despite 15% not recycling.
Regenerative Criterion
The test for whether a capital system is fully regenerative: it must satisfy both Δ (decoupled from fragility) AND Λ (aligned with mission). Most systems satisfy neither; endowments satisfy Δ but not Λ; grants satisfy neither; PSC satisfies both.
Regenerative = Δ ∧ ΛEvaluating a foundation: Does capital survive political changes? (Δ) Does deployment timing match mission needs? (Λ) If both yes, it's regenerative.
Regenerative Cycle Architecture (RCA)
A meta-theory of temporal governance in institutional systems. RCA formalises how capital must be architected to persist and strengthen across infinite horizons through cycle decoupling and alignment.
RCA provides the theoretical foundation for understanding why PSC works—it's not just a funding model, but the first complete instantiation of regenerative capital architecture.
Regenerative Design Practice
The applied methodology of creating institutions, capital structures, and governance systems that satisfy the regenerative criterion (Δ ∧ Λ). Combines analytical rigour with creative problem-solving.
A design team applies regenerative practice to a housing program: mapping beneficiary lifecycles, identifying when pay-forward capacity emerges, and structuring capital flows to match these natural rhythms.
Regenerative Development Finance (RDF)
A new architecture for development capital that survives political transitions. RDF is non-liability (no debt burden on beneficiaries), non-extractive (no profit extraction), and multi-cycle (designed to persist through multiple political and economic cycles).
A $500M health workforce program placed in RDF structure survives three government transitions over 20 years, training 4,000 nurses. Traditional ODA would have been redirected after the first election.
Regenerative Economic Architecture (REA)
The structural economics underlying regenerative capital systems. REA defines the four invariants (R, γ, Δ, Λ) that must hold for capital to regenerate rather than extract or deplete, providing the economic foundation for the entire research program.
REA explains why PSC works economically: it satisfies all four invariants—high recycling (R), positive capability returns (γ), decoupling from fragility (Δ), and alignment with beneficiary lifecycles (Λ).
Regenerative Threshold
The minimum values of R and γ required for a system to be self-sustaining. REA establishes R ≥ 0.8 and γ ≥ 1.0 as the thresholds below which capital depletes over time regardless of other factors.
R ≥ 0.8 AND γ ≥ 1.0A program with R = 0.7 and γ = 2.0 still depletes (losing 30% per cycle). A program with R = 0.9 and γ = 0.8 destroys value. Both invariants must exceed thresholds.
Self-Enforcing System
A system where the architecture itself produces compliance without external enforcement mechanisms. The three AoE mechanisms (F, I, C) combine to make non-compliance irrational from the participant's own perspective, not from fear of punishment.
Self-enforcing when: αF + βI + γC > threshold (compliance exceeds 90% without monitoring)PSC is self-enforcing: contributing is easier than not (F > 0), confirms identity as community member (I > 0), and maintains access to future capital cycles (C > 0). No enforcement needed.
Short-Termism
The systematic bias toward near-term returns over long-term value creation. Caused by quarterly reporting, fund manager incentives, and investor time preferences. Destroys value in infrastructure, R&D, and sustainability investments.
A CEO cuts R&D spending to hit quarterly earnings, boosting stock price today but reducing innovation capacity for decades. Estimated $1.7T in annual value destruction globally.
Six Structural Invariants
The necessary conditions for regenerative behaviour in any capital system: (1) Non-extractive, (2) Non-liability, (3) Multi-cycle regeneration, (4) Cycle-aligned deployment, (5) Decentralised agency, (6) Compounding system value.
PSC satisfies all six: no interest extraction, no debt on books, capital persists through cycles, deployment matches mission timing, beneficiaries choose pay-forward timing, and total value compounds over time.
Soft Repayment
A pay-forward obligation without legal enforcement, interest, or credit reporting. Beneficiaries contribute when financially able, based on moral rather than legal duty.
A scholarship recipient graduates, gets a job, and 3 years later contributes $5,000 back to the fund—not because they must, but because they want to help the next student.
State Capability
The accumulated institutional capacity of a state to deliver public services and execute long-term missions. Traditional development finance often creates dependency rather than building capability. RDF builds capability by funding training, systems, and knowledge transfer that persists beyond individual funding cycles.
A health ministry's capability includes trained staff, functioning systems, community trust, and institutional knowledge. When funding disappears, capability erodes. RDF preserves capability through multi-cycle funding.
System Capacity
The total capability of a public-good system (education, healthcare, infrastructure) to serve beneficiaries. Regenerative capital increases system capacity over time; extractive capital can hollow it out.
A school system with regenerative scholarship funding grows its capacity each year as graduates pay forward. A debt-funded system may shrink as graduates struggle with loan burdens.
System IRRSystem IRR
The effective annual return rate that would produce the same TSV if compounded. Allows comparison with traditional investment returns.
System IRR = (TSV/C₀)^(1/N) - 1If SVM = 26.7× over 30 years, System IRR ≈ 11.5% annually.
System Value Expansion
The phenomenon where total system value grows faster than deployed capital due to the combined effects of recycling and capability returns. REA formalises how R and γ interact to create non-linear value growth.
Total System Value = Σ(C_n × γ) over all cyclesTraditional $100K grant creates $100K-170K of value once. The same $100K in a regenerative system with R=0.9, γ=1.5 creates $2.67M of system value over 30 cycles—a 26× multiplier.
System Value Multiplier (SVM)SVM
The ratio of Total System Value to initial capital. Measures the total impact generated per dollar invested over the full time horizon.
SVM = TSV / C₀If $100,000 generates $2.67M in system value over 30 years (R=0.95), SVM = 26.7×
Systems Seeing
The practice of perceiving institutions as interconnected cycles rather than static structures. Involves mapping capital flows, identifying feedback loops, and understanding how time horizons interact.
Instead of viewing a university as buildings and staff, systems seeing reveals it as overlapping cycles: 4-year student cycles, 6-year tenure cycles, 30-year building cycles, and 100-year endowment cycles.
Temporal Governance
The practice of designing institutional rules that protect long-term missions from short-term pressures. RCA provides the formal framework for analysing and implementing temporal governance.
A university endowment has partial temporal governance (permanent capital) but fails full RCA criteria because it only deploys 5% annually—it's decoupled but not aligned with mission needs.
Temporal Intelligence
The developed capacity to think across multiple time horizons simultaneously. Enables designers to hold short-term operational needs alongside long-term systemic requirements without collapsing into either.
A climate fund manager exercises temporal intelligence by designing systems that respond to immediate disaster needs while maintaining 50-year adaptation horizons—neither sacrificing urgency for permanence nor permanence for urgency.
Temporal Misalignment
The structural gap between market evaluation cycles (quarters) and real value creation timelines (years to decades). Creates systematic underinvestment in long-term projects and pressure to prioritize short-term metrics.
Misalignment Coefficient = Value Creation Time / Market Evaluation CyclePharmaceutical R&D takes 15 years but markets evaluate quarterly. Misalignment coefficient = 60×. This creates pressure to cut long-term research for short-term earnings.
Temporal Misalignment (Development)
The gap between funding cycle length and mission cycle length. Annual budget cycles funding 30-year infrastructure creates 30× temporal misalignment—the project must survive 30 consecutive annual renewals, each an opportunity for disruption.
Misalignment = Mission Cycle / Funding CycleA 50-year climate adaptation program funded by 4-year electoral cycles has 12.5× misalignment. Each government change threatens discontinuity. RDF eliminates this by matching capital horizon to mission horizon.
Total System Value (TSV)TSV
The cumulative value created by capital as it cycles through multiple beneficiaries over time. Includes both deployment impact and residual capital.
TSV = γC₀(1-Rᴺ)/(1-R) + C₀RᴺA $100K deployment with R=0.9 over 10 cycles creates TSV of approximately $950,000.
Value Destruction from Misalignment
The economic loss from canceling long-term projects due to short-term pressure. Occurs when market cycles force evaluation before value materializes, leading to premature termination of valuable initiatives.
A climate infrastructure project with 30-year payback gets cancelled in year 3 due to quarterly earnings pressure. The $500M invested is lost; the $5B in avoided climate damage never materializes.