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CANCELED – A conversation with Fiona Hill on public service

Out of an abundance of caution regarding the spread of COVID-19, this event has been canceled. We apologize for any inconvenience. In the face of domestic political polarization and heightened foreign policy challenges — from geopolitical competition to ongoing non-state threats such as hybrid warfare and public health emergencies — public service by nonpartisan professionals has…

       




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What might the drone strike against Mullah Mansour mean for the counterinsurgency endgame?


An American drone strike that killed leader of the Afghan Taliban Mullah Akhtar Mohammed Mansour may seem like a fillip for the United States’ ally, the embattled government of Afghanistan’s President Ashraf Ghani. But as Vanda Felbab-Brown writes in a new op-ed for The New York Times, it is unlikely to improve Kabul’s immediate national security problems—and may create more difficulties than it solves.

The White House has argued that because Mansour became opposed to peace talks with the Afghan government, removing him became necessary to facilitate new talks. Yet, as Vanda writes in the op-ed, “the notion that the United States can drone-strike its way through the leadership of the Afghan Taliban until it finds an acceptable interlocutor seems optimistic, at best.”

[T]he notion that the United States can drone-strike its way through the leadership of the Afghan Taliban until it finds an acceptable interlocutor seems optimistic, at best.

Mullah Mansour's death does not inevitably translate into substantial weakening of the Taliban's operational capacity or a reprieve from what is shaping up to be a bloody summer in Afghanistan. Any fragmentation of the Taliban to come does not ipso facto imply stronger Afghan security forces or a reduction of violent conflict. Even if Mansour's demise eventually turns out to be an inflection point in the conflict and the Taliban does seriously fragment, such an outcome may only add complexity to the conflict. A lot of other factors, including crucially Afghan politics, influence the capacity of the Afghan security forces and their battlefield performance.

Nor will Mansour’s death motivate the Taliban to start negotiating. That did not happen when it was revealed last July’s the group’s previous leader and founder, Mullah Mohammad Omar, had died in 2013. To the contrary, the Taliban’s subsequent military push has been its strongest in a decade—with its most violent faction, the Haqqani network, striking the heart of Kabul. Mansour had empowered the violent Haqqanis following Omar’s death as a means to reconsolidate the Taliban, and their continued presence portends future violence. Mansour's successor, Mawlawi Haibatullah Akhundzada, the Taliban’s former minister of justice who loved to issue execution orders, is unlikely to be in a position to negotiate (if he even wants to) for a considerable time as he seeks to gain control and create legitimacy within the movement.

The United States has sent a strong signal to Pakistan, which continues to deny the presence of the Afghan Taliban and the Haqqani network within its borders. Motivated by a fear of provoking the groups against itself, Pakistan continues to show no willingness to take them on, despite the conditions on U.S. aid.

Disrupting the group’s leadership by drone-strike decapitation is tempting militarily. But it can be too blunt an instrument, since negotiations and reconciliation ultimately depend on political processes. In decapitation targeting, the U.S. leadership must think critically about whether the likely successor will be better or worse for the counterinsurgency endgame.

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Uncertainties and black swans in the U.S.-India relationship


Editors’ Note: International relations almost never progress in a linear fashion. In this excerpt from a new Brookings India briefing book titled “India-U.S. Relations in Transition,” Tanvi Madan examines some of the high-impact but low-probability events that may affect the relationship in the future: so-called “black swans.”

U.S. Secretary of Defense Ashton Carter recently said that the U.S.-India defense partnership would become “an anchor of global security.” But in an increasingly uncertain world, the partnership between these two large and relatively stable democracies can also potentially be a critical anchor of stability more broadly. Here are some black swans—low-probability, high-impact and, in hindsight, predictable events—that could exacerbate regional and global uncertainty and instability, and affect both countries’ interests and, potentially, their relationship. 

  • Regional Assertiveness: What might be the impact of greater Chinese or Russian assertiveness—even aggression? How might Russian actions against Ukraine, Georgia, or even a NATO member change not just U.S. calculations, but India’s as well? How will it affect their bilateral relationship? What about a China-U.S. confrontation over Taiwan or in the South China Sea? Or Chinese action against a country like Vietnam, with which India has close ties and which the United States is increasingly engaging? What if there is a sudden or serious deterioration of the situation in Tibet, perhaps in the context of a leadership transition? 
  • Chaos in India’s West: What happens if there is political uncertainty in Saudi Arabia, a country with which the United States has close—albeit tense—ties, and which is India’s largest oil supplier and home to millions of Indian citizens? How will the United States and India react if Iran, after all, decides to acquire nuclear weapons? What about the chain reaction either of these scenarios would set off in the Middle East? Closer to India, what if Afghanistan relapses into a total civil war? Or if there is a sharp downturn in stability within Pakistan, with the establishment challenged, the threat of disintegration, and challenges posed by the presence of nuclear weapons? 
  • Shocks to the Global Economy: What if a confluence of circumstance leads to a major spike in oil prices? What will the impact be of a major economic crisis in China, not just on the global economy or Chinese domestic stability, but also in terms of how Beijing might react externally? How will the United States and India deal with this scenario? And what if the eurozone collapses under the weight of refugee flows, Britain’s threatened exit, or national financial crises? 
  • The Epoch-Defining Security Shock: Both the United States and India have suffered major attacks relatively recently—the United States on September 11, 2001 and India on November 26, 2008. But what if there is another major terrorist attack in either country or on the two countries’ interests or citizens elsewhere? Or a major cyber incident that takes down critical infrastructure? 
  • Environmental Challenges: What if rising sea levels cause a catastrophe in Bangladesh resulting in thousands, if not hundreds of thousands, crossing over into India? And then there are the various climate change-related challenges that can perhaps be considered “white swans”—more-certain events, whose effects can be more easily estimated. 

In addition, one could think of domestic black swans in each country and some in the bilateral context. These might include dramatic domestic political developments, or a spark causing a major backlash against immigrants in the United States or American citizens in India. 

As the U.S.-India partnership has developed, and India’s regional and global involvements have increased, the U.S.-India conversation—and not just the official one—has assumed greater complexity. This will help the two countries tackle black swans in the future. So will the further institutionalization of discussions on global and regional issues of the sort already underway. Amid the day-to-day priorities, there should be room for discussing contingencies for black swans in dialogues between the U.S. Deputy Secretary of State and the Indian Foreign Secretary, in the two countries’ dialogue on East Asia, and in discussions between the two policy planning units.

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Festering global problems require more globalized financing


If the vision of the Sustainable Development Goals (SDGs) is that Mother Earth is heading for trouble and we must collectively solve global problems, then the underfunding of global public goods (GPGs) must be addressed. As the world becomes increasingly globalized, the need for global public goods increases: from action on climate change, financial stability, limiting the spread of diseases, management of conflicts, responding to natural disasters, terrorism, and cyber-warfare. At some level even the eradication of extreme poverty and more inclusive and sustainable development could be considered a global public good because more poverty and unequal development breeds conflict, increases environmental stress, state failure, terrorism, and piracy, thereby increasing the need for the global public goods required to address these issues.

Missing in the recently agreed Addis Ababa Action Agenda (AAAA) and in the Paris Conference of Parties (COP21) are steps that should be taken at a global level that will positively impact many countries, such as:

  • A global set of standards on migration to curb exploitation and human rights standards for the migrant population;
  • Better coordination of monetary and fiscal policies so as to avoid huge volatility in financial markets, which have large costs on vulnerable countries;
  • Strengthened global disaster response mechanisms to handle increasing climate volatility and natural disasters;
  • No agreement on a global tax institution demanded by many developing countries and civil society groups; and,
  • No progress on carbon taxation.

There is considerable underfinancing of GPGs as it is difficult to get countries to pay for activities outside their borders. Official Development Assistance (ODA) has fallen well short of the agreed target of 0.7 percent of GDP—and in fact is closer to just 0.2 percent. GPG funding from ODA is estimated at only about 10 percent of the total. This problem even afflicts other sources of financing. Multilateral development bank (MDB) financing also underfunds regional, multi-country projects for addressing regional public goods as countries are unwilling to use their country allocations for multi-country projects even if the return on them is higher than the marginal country project.

Global thematic funds to support specific development challenges—Global Alliance for Vaccination and Inoculation (GAVI), Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), Global Environmental Fund (GEF) and earlier funds like the Consultative Group for International Agricultural Research (CGIAR)—have been successful in addressing specific development challenges through projects in specific countries, especially for agriculture, the environment, and health. They have also drawn in private philanthropic financing in addition to public resources. But global funding for global public goods has not had the same success, and systematic and sustained financing for disasters, biodiversity, desertification, and even for Ebola outbreaks has been difficult.

The Green Climate Fund, which will begin its work this year and will devote 50:50 share of funding for adaptation and mitigation has very limited funding so far – despite the commitment to provide $ 100 billion per year over and above ODA. But neither the AAAA, nor the SDG’s address many of the trade-offs involved between climate change and poverty eradication. COP 21 also did not provide greater guidance on these matters – despite high expectations that it would. Given the need for rapid economic growth to eradicate poverty for the LDC’s  as well as their need to deal with huge adaptation costs, it probably makes sense not to focus excessively on mitigation in these countries. These countries would increase their global carbon footprint by at best 2-3 percent of the total carbon emissions. The big tradeoffs will arise in the need for rapid growth in middle-income countries to address poverty and their increased emissions, which will accompany faster growth.

Protection of biodiversity is given specific mention in the AAAA, and the Global Strategic Plan for Biodiversity for 2011-20 is endorsed along with its 20 Aichi biodiversity targets. But progress in meeting these targets is slow and at current trends unlikely to be achieved. The AAAA does not address this slow progress or suggest ways to accelerate it. It does endorse the U.N. Convention to Combat Desertification and the African Union Green Wall Initiative; but again with no specificity on how progress on these commitments will be accelerated. The same is true of the attention on oceans and marine resources, where the U.N. Convention on the Law of the Sea is mentioned but with no concrete steps on how to finance, enforce, and protect vulnerable areas, especially the small island developing states (SIDS).

Private philanthropic foundations have played important catalytic roles, such as efforts by the Ford Foundation and the Rockefeller Foundation to help jump-start the Green Revolution in the 1960’s, and the eventual creation of the CGIAR. A somewhat similar role has been played by the Bill & Melinda Gates Foundation for global public health. But no such foundations exist for many underfunded issues, such as disaster relief, peacebuilding, and desertification. These types of activities can be much better funded by more globalized revenue sources. The AAAA does not even mention the need for any such revenue sources.

A key GPG is peacekeeping, international security, and the prevention of conflict. Surprisingly, military spending is also not touched upon in the AAAA but has increased sharply. It dropped in the late 1990s following the end of the Cold War, from $1.5 trillion to around $1 trillion globally, but has increased again to almost $ 2 trillion today. Cutting military expenditure—especially in many developing countries where it exceeds 4 percent of GDP—would be an important step and shifting some of those resources to peacekeeping and conflict prevention would improve public spending.

With the AAAA pushing for new modes of financing, its surprising that for GPG financing more global sources of finance are not considered. At least four such options exist and could go a long way towards financing the SDGs. The first is a carbon tax or auctioning of carbon emissions permits. This is an idea with huge appeal as it will also help dissuade use of fossil fuels and could lower emissions globally, but is opposed by all the major emitters. Carbon taxes have been used in several countries to reduce fossil fuel use without any damage to long-term growth. Emission permits have also been used in some countries to reduce emissions of some harmful chemicals. But they have not been used internationally.

The second is a so-called “Tobin tax,” a tax on all foreign exchange transactions, which might also discourage destabilizing short-term volatile capital movements. The third is to add a pollution tax on all shipping and air travel – whose pollutions costs are not fully captured by existing taxes and fees imposed on them. The fourth is to allow issuance of SDRs to finance GPG’s.

Unfortunately, all these proposals are currently opposed by the major G-20 countries for various reasons. While several European countries—and even some developing ones—have introduced carbon taxes, still more remain opposed to carbon taxation. The Tobin tax idea has been around now for several decades and is considered an anti-globalization proposal even if its revenues were to be used to finance GPGs.  At times in the past, some countries have imposed a tax on foreign exchange transactions, with the explicit purpose of slowing down volatility in capital markets.

Global taxation has the connotation of supra-nationality, which many rich country legislatures—especially in the U.S.—would oppose. One way around this might be to specify how these resources would be used or to use them through MDBs where the richer countries have a controlling vote. To some extent the Global programs—GAVI, GFATM, CGIAR, and now the Green Climate Fund—have done that, but their financing remains much too dependent on national budgets and not on automatic revenue-raising mechanisms. National lotteries have been used in some countries to raise resources for specific causes; global lotteries could be an option for financing some specific global goods. But the world must move to some global means of revenue-raising if it wants to address GPGs seriously. Private financing, innovative financing, and public-private partnerships touted in the AAAA and COP21 can be crowded in, but without more international public financing to address market failure, financing the SDG’s will be difficult.

The world needs to heed Ben Franklin advice in another context “We must hang together or surely we will hang separately.”

Authors

  • Ajay Chhibber
     
 
 




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Assessing the impact of foreign assistance: The role of evaluation


Event Information

March 30, 2016
3:00 PM - 4:30 PM EDT

Saul/Zilkha Rooms
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

A conversation with USAID Administrator Gayle Smith



On March 30, Global Economy and Development at Brookings and the Modernizing Foreign Assistance Network (MFAN) hosted Gayle Smith, administrator of U.S. Agency for International Development (USAID) for an address on the fifth anniversary of the USAID policy on evaluation.

A principal recommendation of the Presidential Policy Determination on Global Development, signed by President Obama in 2010, was greater accountability for U.S. foreign assistance funds, including evaluation of development programs. In 2011, USAID adopted a formal policy on evaluation and since has average some 200 evaluations a year.

Among the issues that will be addressed during the event are the success and challenges in implementing the evaluation policy, the use of alternative evaluation methods, and building a system and process for turning evaluations into learning. Administrator Smith was introduced by Brookings Senior Fellow George Ingram. Following her address, he moderated a panel discussion of Ruth Levine, Wade Warren, and Jodi Nelson.

 Join the conversation on Twitter using #AIDeval

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Transcript

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Five years after Busan—how does the U.S. stack up on data transparency?


Publish What You Fund’s 2016 Aid Transparency Index is out. And as a result, today we can assess whether major donors met the commitments they made five years ago at Busan to make aid transparent by the end of 2015. The index is also a window into the state of foreign aid transparency and how the U.S.—the world’s largest bilateral donor—stacks up.

The global picture

On the positive side, the index found that ten donors of varied types and sizes, accounting for 25 percent of total aid, have met the commitment to aid transparency. And more than half of the 46 organizations included in the 2016 index now publish data to the International Aid Transparency Initiative (IATI) registry at least quarterly.

At the same time, the index’s assessments show more than half of the organizations still fall into the lowest three categories, scoring below 60 percent in terms of the transparency of their information.

The U.S. picture

Continuing its leadership on transparency, the Millennium Challenge Corporation comes in second overall in the index, meeting its Busan commitment and once again demonstrating that the institutional commitment to publishing and using its data continues.

Otherwise, at first glance, U.S. progress seems disappointing. The five other U.S. donors included in the 2016 index are all in the “fair” category. Seen through a five-year lens, however, these same five U.S. donors were either in the “poor” or “very poor” categories in the 2011 index. So, all agencies have moved up, and three of them—U.S. Agency for International Development (USAID), Department of the Treasury, and the U.S. President's Emergency Plan for AIDS Relief—are on the cusp of “good.”

In the two biggest U.S. agencies that administer foreign assistance, USAID and the State Department, the commitment is being institutionalized and implemented through more systematic efforts to revamp their outdated information systems. Both have reviewed the gaps in their data reporting systems and developed a path forward. USAID’s Cost Management Plan identifies specific steps to be taken and is well under way. The State Department Foreign Assistance Data Review (FADR) involves further reviews that need to be executed promptly in order to lead to action. Both are signs of a heightened commitment to data transparency and both require continued agency leadership and staff implementation.

The Department of Defense, which slid backwards in the last three assessments (and began at the "very poor" category in 2011), has for the first time moved into the "fair" category.  It is still the lowest performing U.S. agency in the index, but it is now publishing 12 new IATI fields. It is moving in the right direction, but significant work remains to be done.

The third U.S. National Action Plan (NAP) announced last fall—the strongest issued by the U.S. to date—calls for improvements to quality and comprehensiveness of U.S. data and commits the U.S. to doing more to raise awareness, accessibility, and demand for foreign assistance data. This gives all U.S. agencies the imperative to do much more to make their aid information transparent and usable.  

Going forward—what should the U.S. being focusing on?

The overall challenge has been laid out in the third NAP:

  • Almost all of the U.S. agencies need to improve the breadth and depth of the information they are publishing to meet IATI standards. Far too often, basic information—such as titles—are either not published or are not useful.
  • The Millennium Challenge Corporation should continue its leadership role, especially on data use. All agencies should be promoting the use of data among their own staff and by external stakeholders, especially at country level. Feedback will go a long way toward helping them improve the quality of the data they are publishing and thereby help them meet the IATI standards.
  • USAID must finish the work on its Cost Management Plan, including putting IATI in the planned Development Information Solution. Additionally, more progress needs to be made on the follow-up to the Aid Transparency Country Pilot Assessment to meet the needs of partners.   
  • The State Department needs to follow through on including IATI in the new integrated solution mapped out in its data review.

The leadership of all foreign affairs agencies needs to work harder to make the business case for compiling, publishing, and using data on foreign aid programs. Open data, particularly when it is comparable, timely, accessible, and comprehensive, is an extremely valuable management asset.  Agency leadership should be its champion. So far, we have not seen enough.

U.S. progress on aid transparency was slow to start. It is still not where it needs to be. But with a modest but concerted push, three additional agencies will be in the “good” category and that is a story we can start to be proud of.   

We look forward to continued progress and to the day when all U.S. foreign aid meets transparency standards—a day I believe will be an important one for the cause of greater development, better governance, democratic participation, and reduced poverty worldwide.

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Five years after Busan—time to raise the bar in aid transparency


Spring has sprung and once again Publish What You Fund has issued its Aid Transparency Index (ATI). Once again most of the multilateral development banks (MDBs) receive high grades rated as very good. And once again I ask whether those grades are well deserved? At the heart of my question is whether aid agencies are disclosing sufficient information during the critical implementation stage of a project.

Last year we reviewed the practices of 8 aid agencies, 7 of which consistently receive the highest accolades in the ATI. What was evident from our review was the serious asymmetry of the type of aid data released to the public. A major target at Busan in 2011 when donors made commitments to aid transparency and in the establishment of the ATI has been the reporting of aid flows and the projects approved by each agency. There has been growing emphasis since then on reporting information on the results of those projects. But there has been very limited progress in the release of information during project implementation.

The importance of such information should be obvious. It is during project implementation that the various stakeholders need to monitor project progress, report on issues requiring attention, and make changes to ensure achievement of the desired results. It is insufficient to only disclose who wins a contract; consideration should be given to publishing the contracts, reporting on its execution, and disclosing amendments to the contracts. And it is not enough to simply publish the resettlement action plan for a project; how that plan is being implemented must be reported. Real time reporting is the key to being able to adapt and make changes as projects evolve.

Adapting the ATI

It is very evident that the International Aid Transparency Initiative (IATI) and the ATI have had a major positive impact on raising the level of transparency of aid agencies. Discussions with various agencies illustrate how they are keen to getting higher scores each year, carefully analyzing the indicators to guide their actions. However, with only a limited focus and weighting of reporting on project implementation in the ATI, there is no incentive to fill this important gap. 

In its 2016 report, Publish What You Fund has indicated that it will be reviewing its indicators later this year and intends to raise the bar. It would be timely to include information on project implementation in those revisions. One challenge is how to develop indicators that are similarly relevant across a wide variety of aid agencies. Implementation information is most critical for agencies that finance longer-term projects, especially infrastructure, such as the MDBs.  One option is to consider a set of indicators to better “incentivize” the relevant agencies and refer to these as ATI+.

Reviewing the use and abuse of protecting deliberative information

The MDB’s, in their major disclosure reforms since 2010, adopted a principle that “deliberative” information would not be disclosed in order to foster candid and open dialogue within the organization and between the organization and the client country. As per the World Bank’s policy, “The Bank, like any institution or group, needs space to consider and debate, away from public scrutiny.” This excludes emails, notes, and other exchanges either internally or with member countries.

As a result, the project supervision reports, which managements use to monitor projects under execution and are generally published twice a year, were divided between disclosed versus undisclosed sections. The undisclosed sections would offer space for reporting on confidential project concerns including potential corruption. Our review of the disclosed reports suggests that most aid agencies’ task managers tend to take a cautious approach, placing most information in the undisclosed sections. Stakeholders outside the MDB, such as local civil society groups, then, often only see truncated information.

While the adoption of the “deliberative” principle is understandable, its application places a serious responsibility on management to ensure that this is applied with considerable restraint. The MDBs should review the application of this principle and assess the type of information released during implementation.

It is indeed time to raise the bar on transparency and to focus on the most critical information required to ensure results. This is not the moment for complacency with high grades.

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Chinese foreign assistance, explained


China has provided foreign assistance since the 1950s, and is now the largest developing country to provide aid outside of the Development Assistance Committee (DAC), a forum of the world’s major donor countries under the Organization for Economic Cooperation and Development (OECD). Like its foreign policy more broadly, Chinese foreign assistance has adhered to the “Five Principles of Peaceful Coexistence” and emphasized the virtue of national self-reliance. At the same time, it has served a strategic purpose alongside other foreign policy priorities.

A slow start but a steady increase

Compared to top DAC donor countries, the scale of China’s foreign assistance is still relatively small. According to some estimates and OECD International Development Statistics, China’s gross foreign aid in 2001 was extremely limited, amounting to only about 1.8 percent of the total contribution by DAC donors. However, since launching its “Go Global” strategy in 2005, China has deepened its financial engagement with the world, and its foreign aid totals have grown at an average rate of 21.8 percent annually. In 2013, China contributed about 3.9 percent to total global development assistance, which is 6.6 percent of the total contribution by DAC countries and over 26 percent of total U.S. foreign aid. 

Millions of USD (Current)

Gross foreign aid provided by China versus major DAC donors

And the lion’s share goes to: Africa

Africa is one of China’s most emphasized areas of strategic engagement. Particularly since the establishment of the Forum on China-Africa Cooperation (FOCAC) in 2000, the relationship between China and Africa has gotten closer and closer. In 2009, African countries received 47 percent of China’s total foreign assistance. Between 2000 and 2012, China funded 1,666 official assistance projects in 51 African countries (the four countries that don’t have diplomatic relations with China—Gambia, Swaziland, Burkina Faso, and São Tomé and Príncipe—were left out), which accounted for 69 percent of all Chinese public and private projects. Among the 1,666 official projects, 1,110 qualified as Official Development Assistance (ODA)—defined by the OECD as flows of concessional, official financing administered to promote the economic development and welfare of developing countries. The remaining 556 projects could be categorized, also according to the OECD, as Other Official Flow (OOF)—transactions by the state sector that are not “development-motivated” or concessional (such as export credits, official sector equity and portfolio investment, and debt reorganization). (Note: in terms of dollar amounts, not included in the statistics here, most Chinese lending to Africa and other parts of the developing world is not concessional and is therefore not foreign aid.)

Zeroing in on infrastructure

About 61 percent of Chinese concessional loans to Africa are used for infrastructure construction, and 16 percent are for industrial development. The three areas that receive the largest allocations of Chinese concessional loans are transport and storage; energy generation and supply; and industry, mining, and construction. A small portion of the remaining allocations go to health, general budget support, and education. 

Some have interpreted these trends to mean that China is making an effort to export domestic excess capacity in manufacturing and infrastructure, especially considering the uncertainties of China’s economic transition. But the motivations are broader than that. China’s “Africa Policy”—issued in December 2015, in Johannesburg—clearly expresses the Chinese government’s belief that infrastructure construction is a crucial channel for African development. This notion could be connected to the domestic Chinese experience of having benefited from the technological diffusion of foreign aid and foreign direct investment in the construction sector. Moreover, in practice, China’s more than 20 years of experience in implementing international contract projects, as well as advanced engineering technologies and relatively low labor costs, have proved to be a comparative advantage in Chinese foreign assistance. In addition, by prioritizing the principles of non-interference and mutual benefit, China is more comfortable providing infrastructure packages (e.g., turn-key projects) than many other countries. 

Doing assistance better

Legitimate concerns have been raised about China’s tendency to facilitate authoritarianism and corruption, as well that its assistance does not always trickle down to the poor. As such, the state-to-state Chinese approach to providing assistance should be reformed. Globalization scholar Faranak Miraftab indicates that on-the-ground partnerships between communities and the private sector—mediated by the public sector—could achieve synergies to overcome certain shortcomings, creating a win-win situation. With deeper involvement by domestic assistance providers, Chinese foreign assistance could touch more people’s lives by tackling both the short- and long-term needs of the most under-resourced parts of civil society. Domestic assistance providers should exploring public-private partnerships, which among other benefits could yield increased foreign assistance services. By focusing on its comparative advantage in contributing to infrastructure projects that benefit the general public while also facilitating participation from civil society, Chinese foreign assistance could bring more concrete benefits to more individuals. 

China has already begun tackling these and other weaknesses. Although infrastructure and industry still account for the largest share of total official projects in Africa, China has intentionally strengthened its official development finance efforts in areas related to civil society. Projects have surged in the areas of social infrastructure and services, developmental food aid and food security, support to non-governmental organizations, and women in development, to name a few. Moreover, following President Xi Jinping’s promise at the United Nations summit in September 2015, an initial $2 billion has been committed as a down payment toward the China South-South Cooperation and Assistance Fund. The funding is primarily designed to improve the livelihoods of residents of recipient countries and diversify domestic aid providers (e.g., NGOs) qualified to participate or initiate assistance projects in the least-developed countries. 

In order to achieve positive results, it is critical for the Chinese government to carry out detailed management initiatives to engage civil society: for example, establishing a complete system for information reporting and disclosure (actions have already been taken in several ministries and bureaus), publishing guidelines for the private sector to develop assistance services overseas, and improving coordination and accountability among ministries and within the Ministry of Commerce. Although challenges still remain, Chinese foreign assistance is moving in a positive direction without abandoning its defining characteristics. 

Authors

  • Junyi Zhang
      
 
 




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Encouraging transformations in Central Asia

Nearly 30 years ago, the countries of Central Asia emerged from decades of Soviet domination. The rapid disintegration of production and trade linkages established in the Soviet Union led to deep recessions, with per capita incomes falling to about half of their pre-independence levels by the middle of the 1990s. In 1997, the private sector…

       




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Unpacking the China-Russia ‘alliance’

The United States appears to be settling in for a protracted period of great power military competition. Ever since Russia seized Crimea and militarily intervened in Ukraine, and as China moved onto islands across the South China Sea while claiming almost all surrounding waterways, American defense officials determined that rogue states and terrorist organizations should…

       




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CVE’s relevance and challenges: Central Asia as surprising snapshot

       




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The Metropolitan Transportation Authority is Not Alone in its Financial Struggles

Even in comfortable times, the service cutbacks and fare increases being proposed by the Metropolitan Transportation Authority would have sparked outrage from New Yorkers. Coming in the depths of the most serious economic crisis since the Great Depression, things seem that much worse.

Not that it's any consolation to frustrated New York transit riders and taxpayers, but you are not alone. Transit agencies like the MTA are reeling nationwide; all are suffering from factors at least some of which they really can't control without some legislative help.

This is not to deny the pain that could occur unless the state comes up with a rescue plan. In its 2009 budget, the agency proposes painful service cutbacks and fare increases to help cover a projected deficit of around $1.5 billion.

No fewer than 51 transit agencies around the country are in the same financial situation. For example, the Massachusetts Bay Transportation Authority that runs Boston's smaller transit system is chewing over major service cuts and fare increases if the state doesn't help cover its $160 million deficit.

The fact that so many transit agencies are struggling may come as a surprise. After all, didn't Washington just pump a lot of money into infrastructure as part of the $787-billion American Recovery and Reinvestment Act? Wasn't public transit a big part of that law?

Yes. The stimulus package provides $8.4 billion to be spent on transit this year. That's a helpful shot in the arm to metropolitan transit agencies that Washington ordinarily relegates to second-class status. And the MTA will receive the largest portion of this money: more than $1 billion. Even by today's standards, that's nothing to sneeze at.

But how much will it really help? Federal rules in effect since 1998 stipulate that this money can be spent only on capital improvement projects and not to finance gaps in day-to-day operating expenses.

Surely there is no transit service without capital - the buses, trains, tracks and other facilities that make the system run. However, operating costs - which are generally about twice as high as capital expenses for the largest transit agencies - cover the salaries of the workers who keep the system running, as well as the debt contracted to pay for capital projects.

So as the federal government aims to put Americans back to work on shovel-ready, temporary construction jobs, transit agencies are looking at the likelihood of laying people off from stable, permanent positions.

Why the disconnect?

The response in Washington is predictably stubborn: Recovery money cannot be used for operating expenses because operating is not a federal role.

You would think that the pressure of this policy would lead to transit agencies that are self-sufficient - where passenger fares pay the full costs of operating the system.

But large metropolitan transit agencies generally "recover" only about one-third of their costs from subway riders and about one-quarter from bus passengers. The MTA has the highest cost-recovery ratio among all subway operators - its fares pay for two-thirds of operating costs.

For large bus systems, the MTA's New York City Transit ranks second only to New Jersey's in terms of the share of operating costs paid for by riders. The Long Island Rail Road is the seventh among the 21 commuter rail systems in the country, recovering from fares close to half of its operating costs.

So what should be done to close the MTA's budget gap?

For one thing, lawmakers in Albany need to recognize that the state contributes a lower proportion of the MTA's budget from its general revenue than other states provide to their transit agencies from general revenue. In New York, about 4 percent of all the MTA operating costs are covered by the state budget; in other states, transit agencies are getting closer to 6 percent.

Raising state general fund support to national levels would be a good place to start helping the MTA.

Another idea is to get Washington to help. Not in doling out more money, but in stepping aside and empowering metropolitan agencies to spend their federal money in ways that best meet their own needs.

Specifically, the federal rules could be changed to allow transit agencies to spend their transit capital stimulus dollars on operating expenses. Certainly, agencies have capital needs as well, but particularly in these stressful economic times they should have the short-term flexibility to use those federal dollars to meet their immediate problems.

Over the long term, some form of federal competitive funding for operating assistance also might provide the right incentive - or reward - to states and localities to commit to funding transit.

Based on their level of commitment, metropolitan agencies, localities and states that legislatively dedicate a stable stream of funds could potentially receive federal operating assistance, perhaps as a matching grant. The federal government would be helping those who help themselves.


The New York metropolitan area cannot afford to have a transit system that is hampered from operating at its fullest and most efficient potential.

An extensive transit network like the MTA provides important transportation alternatives to those who have options and basic mobility for those who don't. It can help mitigate regional air-quality problems by lowering overall automobile emissions and slowing the growth in traffic congestion.

It also can provide economic benefits by creating development opportunities around transit stations and help enhance regional economic competitiveness as an important and attractive metropolitan amenity.

Such a functioning network plays a fundamental role in attracting highly skilled labor and talent, which we know is so important in 21st century metropolitan America.

Publication: Newsday
      
 
 




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Women’s work boosts middle class incomes but creates a family time squeeze that needs to be eased

In the early part of the 20th century, women sought and gained many legal rights, including the right to vote as part of the 19th Amendment. Their entry into the workforce, into occupations previously reserved for men, and into the social and political life of the nation should be celebrated. The biggest remaining challenge is…

       




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Nigeria and Boko Haram: The state is hardly always just in suppressing militancy


In this interview, Vanda Felbab-Brown addresses issues of terrorism, organized crime, and state responses within the context of Boko Haram’s terrorism, insurgency, and militancy in the Niger Delta. She was interviewed by Jide Akintunde, Managing Editor of Financial Nigeria magazine.

Q: The Boko Haram menace has been with Nigeria for seven years. Why is it that the group does not appear to have run out of resources?

A: Boko Haram has been able to sufficiently plunder resources in the north to keep going. It has accumulated weapons and ammunition from seized stocks. It also taxes smuggling in the north. But its resources are not unlimited. And unlike other militant and terrorist groups, such as ISIS or the Taliban, Boko Haram faces far more acute resource constraints.

Q: Boko Haram is both an insurgent and a terrorist group. Does this explain why it is arguably the deadliest non-state actor in the world and the group that has used women for suicide bombings the most in history?

A: Boko Haram’s record in 2015 of being the deadliest group is a coincidence. Very many other militant groups have combined characteristics of an insurgency and a terrorist group. Its violence belies its weaknesses as much as its capacities.

Boko Haram’s resort to terrorism, often unrestrained terrorism and unrestrained plunder, reflect its loss of territory and most limited strategy calibration and governance skills. Its terrorist attacks, including by female suicide bombers, also reflect the limitation of the military COIN (counter-insurgency) strategy. For instance, after the international clearing, little effective control and “holding” is still exercised by the Nigerian military or its international partners.

Q: Although many views have rejected economic deprivation or poverty as the root cause of the insurgency, almost everyone agrees that military victory over the group would not help much if economic improvement is not brought to bear in the Northeastern Nigeria – the theatre of the insurgent activities. Is this necessarily contradictory?

A: Economic deprivation is hardly ever the sole factor stimulating militancy. There are many poor places, even those in relative decline compared to other parts of the country, where an insurgency does not emerge. But relative economic deprivation often becomes an important rallying cause. And indeed, there are many reasons for focusing on the economic development of the north, including effectively suppressing militancy but it also goes beyond that. Improving agriculture, including by investing in infrastructure and eliminating problematic and distortive subsidies in other sectors, would help combat insurgency and prevent its reemergence.

Q: While Nigerians remain befuddled about the grievances of Boko Haram, we are clear about the gripes of the militants in the oil-rich Niger Delta: they want resource control, since the Nigerian state has been unable to develop the area that produces 70 per cent of the federal government’s revenue. So, is the state always just and right in suppressing militant groups?

A: Indeed not; the state is hardly always just in suppressing militancy, even as suppressing militancy is its key imperative. Economic grievances, discriminations, and lack of equity and access are serious problems that any society should want to tackle. Even if there are “no legitimate grievances,” the state does not have a license to combat militancy in any way it chooses. Its own brutality will be discrediting and can be deeply counterproductive.

The Nigerian state’s approach to MEND (Movement for the Emancipation of Niger Delta) is fascinating: essentially the cooptation of MEND leaders through payoffs, but without addressing the underlying root causes. The insurgency quieted down, but the state’s approach is hardly normatively satisfactory nor necessarily sustainable unless new buyoffs to MEND leaders are again handed over. But that compounds problems of corruption, accountability, transparency, and inclusion.

Q: We can raise the same issue about economic justice in the way criminal and terrorist organizations operate their underground economies. How flawed have you found the alternative social orders that the leaders of criminal and terrorist organizations claim to foster?

A: The governance – the normative, political, and economic orders -- that militant groups provide are often highly flawed. They often underdeliver economically and they lack accountability mechanisms, even when they outperform the state in being less corrupt and providing swifter justice.

However, the choice that populations face is not whether the order that militants provide is optimal or satisfactory. The choice that matters to people is whether that order is stable and better than that provided by the state. So the vast majority of people in Afghanistan, for example, say they don’t like the Taliban. But they don’t like corrupt warlords or corrupt government officials even. It’s not the absolute ideal but the relative realities that determine allegiances or at least the (lack of) willingness to support one or the other.

Moreover, the worst outcome is constant contestation and military instability. A stable brutality is easier to adjust to and develop coping mechanisms for than capriciousness and unstable military contestation.

Q: The Nigerian amnesty programme seemed to be a model in resolving issues between the state and the non-state actors in the Niger Delta, given the quiet in that region in the past few years of the programme. But since the political power changed at the federal level, we are seeing signs of the return of sabotage of oil installations. What models, say in Latin America or elsewhere, can help foster more sustainable peace between governments and non-state actor militant groups?

A: I don’t think that the MEND programme is a model, precisely because of the narrow cooptation I alluded to. Many of the middle-level MEND commanders as well as foot soldiers are dissatisfied with the deal. And much of the population in the Delta still suffers the same level of deprivation and exclusion as before. The deal was a bandage without healing the wounds underneath. It’s a question how long it will continue sticking. Despite its many urgent and burning tasks and a real need to focus on the north, the Nigerian government should use the relative peace in the Delta to move beyond the plaster and start addressing the root causes of militancy and dissatisfaction there. 

This interview was originally published by Financial Nigeria.

Authors

Publication: Financial Nigeria
Image Source: © Reuters Staff / Reuters
       




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France's pivot to Asia: It's more than just submarines


Editors’ Note: Since President François Hollande’s 2012 election, France has launched an Asia-wide initiative in an attempt to halt declining trade figures and improve its overall leverage with the region, write Philippe Le Corre and Michael O’Hanlon. This piece originally appeared on The National Interest.

On April 26, France’s defense shipbuilding company DCNS secured a victory in winning, against Japan and Germany, a long-awaited $40 billion Australian submarine deal. It may not come as a surprise to anyone who has been following France’s growing interest in the Asia-Pacific for the past five years. Since President François Hollande’s 2012 election, the country has launched an Asia-wide initiative in an attempt to halt declining trade figures and improve its overall leverage with the region.

Visiting New Caledonia last weekend, Prime Minister Manuel Valls immediately decided on the spot to fly to Australia to celebrate the submarine news. Having been at odds in the 1990s over France’s decision to test its nuclear weapon capacities on an isolated Pacific island, Paris and Canberra have begun a close partnership over the last decade, culminating in the decision by Australia’s Prime Minister Malcolm Turnbull, in power since September 2015.

Unlike its Japanese competitor Mitsubishi Heavy Industries (MHI), DCNS promised to build the submarine main parts on Australian soil, creating 2,900 jobs in the Adelaide area. The French also secured support from U.S. defense contractors Lockheed Martin and Raytheon, one of which will eventually build the twelve shortfin Barracuda submarines’ combat systems. Meanwhile, this unexpected victory, in light of the close strategic relationship between Australia and Japan, has shed light on France’s sustained ambitions in the Asia-Pacific region. Thanks to its overseas territories of New Caledonia, Wallis and Futuna, French Polynesia and Clipperton Island, France has the world’s second-largest maritime domain. It is also part of QUAD, the Quadrilateral Defence Coordination Group that also includes the United States, Australia and New Zealand, and which coordinates security efforts in the Pacific, particularly in the maritime domain, by supporting island states to robustly and sustainably manage their natural resources, including fisheries.

France is also attempting to correct an excessive focus on China by developing new ties with India, Japan, South Korea and Southeast Asian countries, which have all received a number of French ministerial visits. France’s overseas territories also include a presence in the southern part of the Indian Ocean, with the islands of Mayotte, Réunion and the Scattered Islands, and French Southern and Antarctic Territories, as well as the northwest region of the Indian Ocean through its permanent military presence in the United Arab Emirates and Djibouti. Altogether these presences encompass one million French citizens. This sets France apart from its fellow EU member states regarding defense and security in the Asia-Pacific, particularly as France is a top supplier of military equipment to several Asian countries including Singapore, Malaysia, India and Australia. Between 2008 and 2012, Asian nations accounted for 28 percent of French defense equipment sales, versus 12 percent during 1998–2002. (More broadly, 70 percent of European containerized merchandise trade transits through the Indian Ocean.)

Despite its unique position, France is also supportive of a joint European Union policy toward the region, especially when it comes to developments in the South China Sea. Last March, with support from Paris, Berlin, London and other members, Federica Mogherini, the EU’s High representative for Foreign Affairs and Security Policy, issued a statement criticizing China’s actions:

“The EU is committed to maintaining a legal order for the seas and oceans based upon the principles of international law, as reflected notably in the United Nations Convention on the Law of the Sea (UNCLOS). This includes the maintenance of maritime safety, security, and cooperation, freedom of navigation and overflight. While not taking a position on claims to land territory and maritime space in the South China Sea, the EU urges all claimants to resolve disputes through peaceful means, to clarify the basis of their claims, and to pursue them in accordance with international law including UNCLOS and its arbitration procedures.”

This does not mean that France is neglecting its “global partnership” with China. In 2014, the two countries celebrated fifty years of diplomatic relations; both governments conduct annual bilateral dialogues on international and security issues. But as a key EU state, a permanent member of the UN Security Council and a significant contributor to the Asia-Pacific’s security, France has launched a multidimensional Asia policy.

All of this should be seen as welcome news by Washington. While there would have been advantages to any of the three worthy bids, a greater French role in the Asia-Pacific should be beneficial. At this crucial historical moment in China's rise and the region's broader blossoming, the United States needs a strong and engaged European partnership to encourage Beijing in the right direction and push back together when that does not occur. Acting in concert with some of the world's other major democracies can add further legitimacy to America's actions to uphold the international order in the Asia-Pacific. To be sure, Japan, South Korea and Australia are key U.S. partners here and will remain so. But each also has its own limitations (and in Japan's case, a great deal of historical baggage in dealing with China).

European states are already heavily involved in economic interactions with China. The submarine decision will help ensure a broader European role that includes a hard-headed perspective on security trends as well.

Publication: The National Interest
       




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When middle-class incomes collapse, how you gonna pay next month’s rent?

As the coronavirus forces businesses to lay off workers or reduce hours, millions of Americans are seeing their incomes plummet. One of the most pressing concerns (besides staying healthy) is whether these households will be able to pay next month’s rent. Being able to afford decent quality, stable housing in a safe neighborhood is an…

       




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The impact of the coronavirus on mortgage refinancings

Mortgages, whether purchase or refinance, require a long to-do list. If any of the steps in the chain cannot occur, the ability to get a mortgage is jeopardized. The unprecedented shutdowns caused by COVID-19 threaten to break multiple links in the mortgage chain. This article examines what is at risk for one segment of the…

       




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Anti-money laundering rules: An emergency assistance roadblock

While America’s 30 million small businesses are fighting for their lives against the COVID-19 recession, emergency assistance is facing a roadblock: anti-money laundering (AML) rules. Unless Treasury changes this system, which it can, it will cost American businesses and banks billions of dollars, slow down funds when time is of the essence for keeping Americans…

       




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U.S. chairmanship of the Arctic Council: The challenges ahead


This weekend the United States will assume the chairmanship of the Arctic Council for a two-year term. While the Obama administration has been preparing for this for several years, it remains to be seen how the president will balance the concerns of most Arctic residents who view development of the region as vital to improving their economic and social livelihood and those individuals inside and outside the administration who want to limit development out of concern for the how economic development may cause local environmental degradation while also accelerating climate change.

The National Strategy for the Arctic Region

As part of this preparation, in May 2013, the president launched a new National Strategy for the Arctic Region based on three principles

  1. Advancement of U.S. security interests defined as ensuring the ability of our aircraft and vessels to operate, in a manner consistent with international law through, under, and over the airspace and waters of the Arctic; to support lawful commerce; to achieve greater awareness of activities in the region; and to intelligently evolve our Arctic infrastructure and capabilities including ice-capable platforms as needed;
  2. Pursue responsible Arctic regional stewardship defined as protection of the Arctic environment and conservation of its resources, establishment of an integrated Arctic management framework, charting of the Arctic region, and employment of scientific research and traditional knowledge to increase understanding of the Arctic;
  3. Strengthen international cooperation defined as working through bilateral relationships and multilateral institutions, including the Arctic Council, to advance collective interests, promote shared Arctic state prosperity, protect the Arctic environment, and enhance regional security, and to work toward U.S. accession to the United Nations Convention on the Law of the Sea.

Undergirding these principles were commitments to make decisions using the best available information, to foster cooperation with the state of Alaska, other international partners, the private sector, and to consult and coordinate with Alaskan natives to gain traditional knowledge. As part of this new strategy, the president appointed Admiral Robert J. Papp Jr. as the U.S. special representative for the Arctic in July 2014. Shortly after his appointment, and in several major speeches since, including one at Brookings, the admiral has stated that the administration’s agenda centers on stewardship of the Arctic Ocean including insuring its safety and security, improving economic and living conditions for the regions’ inhabitants, and addressing the impacts of climate change on the region. 

The administration’s new policy was buttressed in January 2015 by an executive order designed to enhance coordination of all the various agencies responsible for different aspects of federal oversight of the Arctic (Alaska). Paradoxically, however, the fact that the reorganization came nearly in tandem with the announcement of new wilderness restrictions on the exploration of oil and gas in the Arctic National Wildlife Refuge (ANWR) and the Arctic Coastal Plain. This announcement left many Alaskans skeptical on how further restrictions on development of the state’s resources could be viewed as improving economic and living conditions of people in the region. In a February 2015 meeting of Arctic Council Senior Arctic Officials (SAOs) in Yellowknife, Canada, the administration looked to put meat on the bones of what it intended to pursue upon assumption of the chairmanship of the Arctic Council. This resulted in an additional elucidation of 15 broad themes that had originally been presented in a Virtual Stakeholder Outreach Forum on December 2, 2014 in Washington, D.C..

Streamlining Arctic policy and key questions

The announced reorganization of government agencies and lines of authority dealing with U.S. Arctic and Arctic Council policy has done little or nothing to streamline the overlapping and sometimes conflicting policies governing natural resource development or energy projects in Alaska. These overlapping jurisdictions are well highlighted in a major new National Petroleum Council (NPC) report, Arctic Potential: Realizing the Promise of U.S. Arctic Oil and Gas Resources. This report was prepared at the request of Energy Secretary Moniz to address how best to pursue prudent development of Alaska’s offshore oil and gas resources and ironically issued shortly after the president’s closing of ANWR. Whether or not the White House was even aware of the NPC’s report, which represented months of substantive work by many people, remains open to question.

The Arctic reorganization plan did little to resolve some key questions as to actually who is in charge of Arctic policy in the United States. While Admiral Papp was named “Coordinator” of the U.S. Arctic Council Chairmanship, this position is not listed in the Council’s enabling documents. Historically, the foreign minister or the secretary of state of the country chairs the Council while a career diplomat chairs the meetings of the senior officials dealing with the day-to-day activities of the Council. It appears that Admiral Papp has neither of these positions. In any case, it looks from the organizational chart that the White House science advisor will be the real coordinator of U.S. Arctic policy.

The chief problem that U.S. Arctic policy must resolve is that while in the Arctic Council we have to address issues affecting the entire Circumpolar North, our domestic Arctic policy centers only on Alaska, where a slew of domestic agencies have overlapping and often conflicting oversight and regulatory responsibilities. The situation is made still more complex by the large amount of the state that is owned by the federal government. This makes it almost inevitable that any resource development project by private or state interests will run into federal government restrictions, in terms of needing to cross federal land to get a resource to market, permitting to ensure that water resources are not polluted, or making sure that fish and wildlife habitats are not disturbed, etc.

Our Arctic policy also suffers from an acute lack of awareness by most Americans that we are an Arctic nation with a huge maritime boundary and very limited resources (ice-worthy ships, proper navigation charts and aids, lack of port facilities, lack of search and rescue capabilities, lack of knowledge of what fishery resources we possess) to protect it. While many of these issues lie outside the scope of the Arctic Council, many are cross-cutting with our Arctic neighbors, most notably with increased traffic in the region (from tourism, fishing, energy development, and shipping) comes the increased possibility of an accident. Currently, the United States does not have the capable means (both in terms of timely response and adequate infrastructure) to respond to an accident in the Arctic, which could be catastrophic, as all of these industries are active and gaining popularity every day.

Core questions for the administration

As the United States takes the helm of the Arctic Council, there are several core issues that the administration must address. Some critical questions are: What is the U.S. position on the development of the Arctic’s oil, gas, mineral, and fishery resources? What specific action is the United States prepared to support in the Arctic Council to uplift the standard of living of Arctic people across the Circumpolar North? Given that each icebreaker costs at least $700 million and that we only have one in operation, what resources are we prepared to expand to build a fleet capable to respond to events in the Arctic? Should any of these expenses be viewed as vital to our national security and defense, and if so, which budget should they be taken out of? What role does the United States in its chairmanship role see for closer interaction between the Arctic Council and the Arctic Economic Council? Would the United States support the closing off of certain ecologically sensitive parts of the Arctic to all commercial exploitation? Finally, how does the administration in its Arctic Council leadership role get its Arctic policy in sync with that of the state of Alaska in its recently released Alaska Arctic Policy Implementation Plan?

Other Arctic nations surpass the United States in terms of Arctic policies. Norway, Russia, Canada, and even Denmark (through complicated ties with Greenland’s claim on the Arctic) all have the Arctic at the front and center of policymaking decisions. I hope to see these issues addressed as the United States moves to enact effective policy on the Arctic over the next two years as the alternative is too great a risk and too great a wasted opportunity. 

     
 
 




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With Russia overextended elsewhere, Arctic cooperation gets a new chance


Can the United States and Russia actually cooperate in the Arctic? It might seem like wishful thinking, given that Russian Prime Minister Dmitry Medvedev asserted that there is in fact a “New Cold War” between the two countries in a speech at the Munich Security Conference. Many people—at that conference and elsewhere—see the idea as far-fetched. Sure, Russia is launching air strikes in what has become an all-out proxy war in Syria, continues to be aggressive against Ukraine, and has increased its military build-up in the High North. To many observers, the notion of cooperating with Russia in the Arctic was a non-starter as recently as the mid-2015. There have been, however, significant changes in Russia’s behavior in the last several months—so, maybe it is possible to bracket the Arctic out of the evolving confrontation.

These and other matters were the subject of discussion at a recent conference at the Harriman Institute of Columbia University in New York, in which we had the pleasure to partake last week.

Moscow learns its limitations

Russia steadily increased its military activities and deployments in the High North until autumn 2015, including by creating a new Arctic Joint Strategic Command. There have been, however, indirect but accumulating signs of a possible break from this trend. Instead of moving forward with building the Arctic brigades, Russian top brass now aim at reconstituting three divisions and a tank army headquarters at the “Western front” in Russia. News from the newly-reactivated airbases in Novaya Zemlya and other remote locations are primarily about workers’ protests due to non-payments and non-delivery of supplies. Snap exercises that used to be so worrisome for Finland and Norway are now conducted in the Southern military district, which faces acute security challenges. Russia’s new National Security Strategy approved by President Vladimir Putin on the last day of 2015 elaborates at length on the threat from NATO and the chaos of “color revolutions,” but says next to nothing about the Arctic.

The shift of attention away from the Arctic coincided with the launch of Russia’s military intervention in Syria, and was strengthened by the sharp conflict with Turkey. Deputy Prime Minister Dmitri Rogozin—who used to preside over the military build-up in the High North—is these days travelling to Baghdad, instead. Sustaining the Syrian intervention is a serious logistical challenge on its own—add low oil prices into the mix, which threw the Russian state budget and funding for major rearmament programs into disarray, and it’s clear that Russia is in trouble. 

The shift of attention away from the Arctic coincided with the launch of Russia’s military intervention in Syria, and was strengthened by the sharp conflict with Turkey.

The government is struggling with allocating painful cuts in cash flow, and many ambitious projects in the High North are apparently being curtailed. In the squabbles for dwindling resources, some in the Russian bureaucracy point to the high geopolitical stakes in the Arctic—but that argument has lost convincing power. The threats to Russian Arctic interests are in fact quite low, and its claim to expanding its control over the continental shelf (presented at the U.N. earlier this month) depends upon consent from its Arctic neighbors.

Let’s work together

Chances for cooperation in the Arctic are numerous, as we and our colleagues have described in previous studies. The current economic climate (i.e. falling oil prices, which makes additional energy resource extraction in most of the Arctic a distant-future scenario), geopolitical climate (sanctions on Russia targeting, amongst others, Arctic energy extraction), and budget constraints on both ends (Russia for obvious reasons, the United States because it chooses not to prioritize Arctic matters) urge us to prioritize realistically.

  • Improving vessel emergency response mechanisms. Though many analysts like to focus on upcoming resource struggles in the Arctic, the chief concern of naval and coast guard forces there is actually increased tourism. Conditions are very harsh most of the year and can change dramatically and unexpectedly. Given the limited capacity of all Arctic states to navigate Arctic waters, a tourist vessel in distress is probably the main nightmare scenario for the short term. Increased cooperation to optimize search and rescue capabilities is one way to prepare as much as possible for such an undesirable event. 
  • Additional research on climate change and methane leakage. Many questions remain regarding the changing climate, its effects on local flora and fauna, and long-term consequences for indigenous communities. Increasingly appreciated in the scientific community, an elephant in the room is trapped methane in permafrost layers. As the Arctic ice thaws, significant amounts of methane may be released into the atmosphere, further exacerbating global warming.
  • Expanding oil emergency response preparedness. The current oil price slump likely put the brakes on most Arctic exploration in the short term. We also believe that, unless all long-term demand forecasts are false, an additional 15 million barrels of oil per day will be needed by 2035 or so—the Arctic is still viewed as one of the last frontiers where this precious resource may be found. At the moment, Arctic states are ill-prepared to deal with a future oil spill, and more has to be learned about, for instance, oil recovery on ice and in snow. The Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic was an important first step.
  • Preparing Bering Strait for increased sea traffic. As the Arctic warms, increased sea traffic is only a matter of time. The Bering Strait, which is only 50 miles wide at its narrowest point, lacks basic communication infrastructure, sea lane designation, and other critical features. This marks another important and urgent area of cooperation between the United States and Russia, even if dialogue at the highest political level is constrained. 

Can the Arctic be siloed?

There is no doubt that the current cooled climate between Russia and the other Arctic states, in particular the United States, complicates an ongoing dialogue. It is even true that it may prohibit a meaningful conversation about certain issues that have already been discussed. 

Skeptics will argue that it is unrealistic to isolate the Arctic from the wider realm of international relations. Though we agree, we don’t think leaders should shy away from political dialogue altogether. To the contrary, in complicated political times, the stakes are even higher: Leaders should continue existing dialogues where possible and go the extra mile to preserve what can be preserved. Russia’s desire for expanding its control over the Arctic shelf is entirely legitimate—and opens promising opportunities for conversations on issues of concern for many states, including China, for that matter.

Realists in the United States prefer to focus on expanding American military capabilities, their prime argument being that Russia has significantly more capacity in the Arctic. While we would surely agree that America’s current Arctic capabilities are woefully poor, as our colleagues have described, an exclusive focus on that shortcoming may send the wrong signal. 

We would therefore argue in favor of a combined strategy: making additional investments in U.S. Arctic capabilities while doubling down on diplomatic efforts to preserve the U.S.-Russian dialogue in the Arctic. That may not be easy, but given the tremendous success of a constructive approach in the Arctic in recent years, this is something worth fighting for. Figuratively speaking, that is.

      
 
 




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The halfway point of the U.S. Arctic Council chairmanship


Event Information

April 25, 2016
2:00 PM - 3:30 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Register for the Event
An address from U.S. Special Representative for the Arctic Admiral Robert J. Papp Jr.

On April 24, 2015, the United States assumed chairmanship of the Arctic Council for a two-year term. Over the course of the last year, the United States has outlined plans within three central priorities: improving economic and living conditions for Arctic communities; Arctic Ocean safety, security, and stewardship; and addressing the impacts of climate change. Working with partners on the Council, U.S. leaders have moved forward policies ranging from joint efforts to curb black carbon emissions to guidelines for unmanned aerial systems conducting scientific research. With half of its short chairmanship behind it, what has the United States accomplished over the last 12 months? What work remains to be done?

On April 25, the Energy Security and Climate Initiative (ESCI) at Brookings hosted U.S. Special Representative for the Arctic Admiral Robert J. Papp, Jr. for a keynote address on the state and future of U.S. leadership in the Arctic. ESCI Senior Fellow Charles Ebinger moderated the discussion and audience Q&A.

Join the conversation on Twitter using #USArctic

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Audio

      
 
 




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Rewarding Work: The Impact of the Earned Income Tax Credit in Chicago

The federal Earned Income Tax Credit (EITC) will boost earnings for over 18 million low-income working families in the U.S. by more than $30 billion this year. This survey finds that the EITC provided a $737 million boost to the Chicago regional economy in 1998, and lifted purchasing power in the city of Chicago by an average of $2 million per square mile. Large numbers of Low-income working families lived not only in inner-city Chicago neighborhoods, but also in smaller cities throughout the region like Aurora, Joliet, Elgin and Waukegan. The survey concludes by describing steps that state and local leaders could take to build on existing efforts to link working families to the EITC, such as increasing resources for free tax preparation services, helping EITC recipients to open bank accounts, and expanding and making refundable the Illinois state EITC.

 

EITC National Report
Read the national analysis of the Earned Income Tax Credit in 100 metropolitan areas. It finds that the EITC provided a $17 billion stimulus to these metro areas in 1998, and that the majority of EITC dollars flowed to the suburbs.
National Report 10/01
EITC Regional Reports
Read the local analysis of the Earned Income Tax Credit in 29 metropolitan areas. Using IRS data to analyze the spatial distribution of working poor families, the surveys find that the EITC is a significant federal antipoverty investment in cities and their regions.
29 Metro Area Reports  6/01

 

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Chicago’s Multi-Family Energy Retrofit Program: Expanding Retrofits With Private Financing

The city of Chicago is increasing retrofits by using stimulus dollars to expand the opportunity for energy efficient living to low-income residents of large multi-family rental buildings. To aid this target demographic, often left underserved by existing programs, the city’s new Multi-Family Energy Retrofit Program introduces an innovative model for retrofit delivery that relies on private sector financing and energy service companies.

Chicago’s new Multi-Family Energy Retrofit Program draws on multi-sector collaboration, with an emphasis on private sector involvement supported by public and nonprofit resources. Essentially, the program applies the model of private energy service companies (ESCOs), long-used in the public sector, to the affordable, multi-family housing market. In this framework, ESCOs conduct assessments of building energy performance, identify and oversee implementation of cost-effective retrofit measures, and guarantee energy savings to use as a source of loan repayment.

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A Chicago-Area Retrofit Strategy: Coordinating Energy Efficiency Region-Wide

The Center for Neighborhood Technology, a Chicago-area nonprofit promoting urban sustainability, has a long-run vision of a Chicagoland building energy-efficiency system, which, if started up quickly, would help to effectively deploy relevant stimulus dollars in the near-term. Its activities focus on ramping up existing weatherization and retrofit programs in the short-term to take best advantage of current stimulus dollars while at the same time building the institutional capacity to launch and sustain a new regional initiative aimed at coordinating energy efficiency information, financing, and service delivery for the seven-county region over the long-term.

The Center for Neighborhood Technology (CNT) is using ARRA and other resources to work toward a long-run vision of a sustainable regional energy efficiency system. CNT envisions a centrally-coordinated initiative— either through a new stand-alone entity or a formalized network—to manage the financing, marketing, performance monitoring and certification, information provision, supply chain development, and customer assistance required to efficiently scale up the delivery of retrofit services for all types of buildings across the Chicago region.

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Mexico’s COVID-19 distance education program compels a re-think of the country’s future of education

Saturday, March 14, 2020 was a historic day for education in Mexico. Through an official statement, the Secretariat of Public Education (SEP) informed students and their families that schools would close to reinforce the existing measures of social distancing in response to COVID-19 and in accordance with World Health Organization recommendations. Mexico began to implement…

       




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COVID-19 is a chance to invest in our essential infrastructure workforce

Even as the COVID-19 pandemic keeps millions of people home and many businesses shuttered for social distancing, up to 62 million essential workers are still reporting to their jobs in hospitals, grocery stores, and other critical industries. They are on the frontlines against the coronavirus, vital to our public health and economic survival. Of them,…

       




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Trust and entrepreneurship pave the way toward digital inclusion in Brownsville, Texas

As COVID-19 requires more and more swaths of the country to shelter at home, broadband is more essential than ever. Access to the internet means having the ability to work from home, connecting with friends and family, and ordering food and other essential goods online. For businesses, it allows the possibility of staying open without…

       




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Technological Scarcity, Compliance Flexibility and the Optimal Time Path of Emissions Abatement

ABSTRACT

The overall economic efficiency of a quantity-based approach to greenhouse gas mitigation depends strongly on the extent to which such a program provides opportunities for compliance flexibility, particularly with regard to the timing of emissions abatement. Here I consider a program in which annual targets are determined by choosing the optimal time path of reductions consistent with an exogenously prescribed cumulative reduction target and fixed technology set. I then show that if the availability of low-carbon technology is initially more constrained than anticipated, the optimal reduction path shifts abatement toward later compliance periods. For this reason, a rigid policy in which fixed annual targets are strictly enforced in every year yields a cumulative environmental outcome identical to the optimal policy but an economic outcome worse than the optimal policy. On the other hand, a policy that aligns actual prices (or equivalently, costs) with expected prices by simply imposing an explicit price ceiling (often referred to as a "safety valve") yields the opposite result. Comparison among these multiple scenarios implies that there are significant gains to realizing the optimal path but that further refinement of the actual regulatory instrument will be necessary to achieve that goal in a real cap-and-trade system.

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Unmaking the presidency

The extraordinary authority of the U.S. presidency has no parallel in the democratic world. Today that authority resides in the hands of one man, Donald J. Trump. But rarely, if ever, has the nature of a president clashed more profoundly with the nature of the office. From the moment of his inauguration, Trump has challenged…

       




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Charts of the Week: Chinese tech, social distancing, aid to states

In this week's Charts of the Week, a mix of charts from recent Brookings research, including China's technology, social distancing, and aid to states. Growing demand for China’s global surveillance technology In a new paper from the Global China Initiative, part of a release focused on China's growing technological prowess worldwide, Sheena Chestnut Greitens notes…

       




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Want to ease tensions in the Middle East? Science diplomacy can help

Science diplomacy can help countries in the Middle East and elsewhere solve on-the-ground challenges and improve standards of living for their citizens. But it can also lay groundwork for improving relations in a region often defined by tension (if not outright conflict) through functional, scientific cooperation that is less politicized.

      
 
 




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Principles for Transparency and Public Participation in Redistricting


Scholars from the Brookings Institution and the American Enterprise Institute are collaborating to promote transparency in redistricting. In January 2010, an advisory board of experts and representatives of good government groups was convened in order to articulate principles for transparent redistricting and to identify barriers to the public and communities who wish to create redistricting plans. This document summarizes the principles for transparency in redistricting that were identified during that meeting.

Benefits of a Transparent, Participative Redistricting Process

The drawing of electoral districts is among the most easily manipulated and least transparent systems in democratic governance. All too often, redistricting authorities maintain their monopoly by imposing high barriers to transparency and public participation. Increasing transparency and public participation can be a powerful counterbalance by providing the public with information similar to that which is typically only available to official decision makers, which can lead to different outcomes and better representation.

Increasing transparency can empower the public to shape the representation for their communities, promote public commentary and discussion about redistricting, inform legislators and redistricting authorities which district configurations their constituents and the public support, and educate the public about the electoral process.  

Fostering public participation can enable the public to identify their neighborhoods and communities, promote the creation of alternative maps, and facilitate an exploration of a wide range of representational possibilities. The existence of publicly-drawn maps can provide a measuring stick against which an official plan can be compared, and promote the creation of a “market” for plans that support political fairness and community representational goals.

Transparency Principles

All redistricting plans should include sufficient information so the public can verify, reproduce, and evaluate a plan. Transparency thus requires that:

  • Redistricting plans must be available in non-proprietary formats.
  • Redistricting plans must be available in a format allowing them to be easily read and analyzed with commonly-used geographic information software.
  • The criteria used as a basis for creating plans and individual districts must be clearly documented.

Creating and evaluating redistricting plans and community boundaries requires access to demographic, geographic, community, and electoral data. Transparency thus requires that:

  • All data necessary to create legal redistricting plans and define community boundaries must be publicly available, under a license allowing reuse of these data for non-commercial purposes.
  • All data must be accompanied by clear documentation stating the original source, the chain of ownership (provenance), and all modifications made to it.

Software systems used to generate or analyze redistricting plans can be complex, impossible to reproduce, or impossible to correctly understand without documentation. Transparency thus requires that:

  • Software used to automatically create or improve redistricting plans must be either open-source or provide documentation sufficient for the public to replicate the results using independent software.
  • Software used to generate reports that analyze redistricting plans must be accompanied by documentation of data, methods, and procedures sufficient for the reports to be verified by the public.

Services offered to the public to create or evaluate redistricting plans and community boundaries are often opaque and subject to misinterpretation unless adequately documented. Transparency thus requires that:

  • Software necessary to replicate the creation or analysis of redistricting plans and community boundaries produced by the service must be publicly available.
  • The service must provide the public with the ability to make available all published redistricting plans and community boundaries in non-proprietary formats that are easily read and analyzed with commonly-used geographic information software.
  • Services must provide documentation of any organizations providing significant contributions to their operation.

Promoting Public Participation

New technologies provide opportunities to broaden public participation in the redistricting process. These technologies should aim to realize the potential benefits described and be consistent with the articulated transparency principles.

Redistricting is a legally and technically complex process. District creation and analysis software can encourage broad participation by: being widely accessible and easy to use; providing mapping and evaluating tools that help the public to create legal redistricting plans, as well as maps identifying local communities; be accompanied by training materials to assist the public to successfully create and evaluate legal redistricting plans and define community boundaries; have publication capabilities that allow the public to examine maps in situations where there is no access to the software; and promoting social networking and allow the public to compare, exchange and comment on both official and community-produced maps.



Official Endorsement from Organizations – Americans for Redistricting Reform, Brennan Center for Justice at New York University, Campaign Legal Center, Center for Governmental Studies, Center for Voting and Democracy, Common Cause, Demos, and the League of Women Voters of the United States.

Attending board members – Nancy Bekavac, Director, Scientists and Engineers for America; Derek Cressman, Western Regional Director of State Operations, Common Cause; Anthony Fairfax, President, Census Channel; Representative Mike Fortner (R), Illinois General Assembly; Karin Mac Donald, Director, Statewide Database, Berkeley Law, University of California, Berkeley; Leah Rush, Executive Director, Midwest Democracy Network; Mary Wilson, President, League of Women Voters.

Editors Micah Altman, Harvard University and the Brookings Institution; Thomas E. Mann, Brookings Institution; Michael P. McDonald, George Mason University and the Brookings Institution; Norman J. Ornstein, American Enterprise Institute.

This project is funded by a grant from the Sloan Foundation to the Brookings Institution and the American Enterprise Institute.

Publication: The Brookings Institution and The American Enterprise Institute
Image Source: © Lucy Nicholson / Reuters
     
 
 




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Why a Trump presidency could spell big trouble for Taiwan


Presumptive Republican presidential nominee Donald Trump’s idea to withdraw American forces from Asia—letting allies like Japan and South Korea fend for themselves, including possibly by acquiring nuclear weapons—is fundamentally unsound, as I’ve written in a Wall Street Journal op-ed.

Among the many dangers of preemptively pulling American forces out of Japan and South Korea, including an increased risk of war between Japan and China and a serious blow to the Nuclear Non-Proliferation Treaty, such a move would heighten the threat of war between China and Taiwan. The possibility that the United States would dismantle its Asia security framework could unsettle Taiwan enough that it would pursue a nuclear deterrent against China, as it has considered doing in the past—despite China indicating that such an act itself could be a pathway to war. And without bases in Japan, the United States could not as easily deter China from potential military attacks on Taiwan. 

Trump’s proposed Asia policy could take the United States and its partners down a very dangerous road. It’s an experiment best not to run.

      
 
 




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The Iran deal: Off to an encouraging start, but expect challenges


One year after its conclusion, the Joint Comprehensive Plan of Action (JCPOA) remains controversial in Tehran and Washington, with opponents unreconciled to the deal and determined to derail it. Republican attacks against the deal will keep the controversy alive for most of this election year.

But opponents have had to scale back their criticism, in large part because the JCPOA, at least so far, has delivered on its principal goal—blocking Iran’s path to nuclear weapons for an extended period of time. No one can dispute that Tehran has sharply reduced its capacity to produce fissile materials for nuclear weapons and would need at least a year to rebuild enough capacity to produce a single bomb.

Iran’s positive compliance record has not given opponents much ammunition. The IAEA found Iran in compliance in its two quarterly reports issued in 2016. True, Iran temporarily exceeded the agreed ceiling on heavy water but quickly rectified the infraction, which most observers attributed to the practical difficulty of ensuring that production overages are exported in a timely way rather than to an intention to circumvent the limit. Critics have also pounced on a German report that Iran’s illicit attempts to procure nuclear and missile items continued in 2015. But Tehran’s requirement to import all nuclear items for its permitted civil nuclear program through the JCPOA’s procurement channel—and stop procuring items outside the channel—did not kick in until January 2016, and neither Washington nor Berlin has information that illicit efforts continued after that time.

Murky missile issue

Iran’s ballistic missile tests present a more complicated compliance issue. Due to a compromise reached in the negotiations, missile activities are not covered in the JCPOA and Security Council resolution 2231 simply ”calls upon” but does not legally require Iran to cease those activities (as did the U.N. Security Council resolutions replaced by 2231). As a result, Iranians argue they are not legally bound to cease missile testing, and Russia and China essentially support their argument. 

The administration and Congress are right to oppose Iran’s provocative and destabilizing missile activities. But they are not on strong legal or political grounds to treat the issue as a compliance violation. Rather than invoking the Iran nuclear deal, Washington and its partners will need to counter Iran’s missile programs with other policy tools, including interdictions of procurement attempts, Missile Technology Control Regime restrictions, U.S. diplomatic efforts with suppliers, missile defenses, and sanctions.

An uncertain path ahead

So, from the standpoint of Iran implementing and complying with its nuclear commitments, the JCPOA has operated well for its first year. But challenges to the smooth operation and even the longevity of the deal are already apparent.

A real threat to the JCPOA is that Iran will blame the slow recovery of its economy on U.S. failure to conscientiously fulfill its sanctions relief commitments and, using that as a pretext, will curtail or even end its own implementation of the deal. Iranians are understandably frustrated that the benefits of sanctions relief have not materialized as quickly as expected. But international banks and businesses have been reluctant to engage Iran not because they have been discouraged by the United States but because they have their own business-related reasons to be cautious, including the inadequate regulatory standards of Iran’s financial system, low oil prices in an oil-dependent economy, and fear of running afoul of remaining U.S. sanctions. In an effort to ensure that Iran will reap the economic rewards it deserves, the Obama administration has bent over backwards to inform foreign governments, banks, and businesses of what sanctions relief measures entitle them to do, but Iranian officials continue to complain that it is not doing enough.

[W]e can say the nuclear deal is off to a promising start...[s]till, it is already clear that the path ahead will not always be smooth.

Legislation proposed in Congress could also threaten the nuclear deal. Many proponents of new sanctions legislation genuinely seek to reinforce the deal—for example, by renewing the Iran Sanctions Act without attaching poison pills. But for some other members of Congress, the bills are designed to undercut the JCPOA. In a July 11 statement of policy, the administration threatened to veto three House bills, stating that they “would undermine the ability of the United States to meet our JCPOA commitments by reimposing certain secondary economic and financial sanctions lifted on ‘Implementation Day’ of the JCPOA.” For now, the administration is in a position to block new legislation that it believes would scuttle the nuclear deal.

But developments outside the JCPOA, especially Iran’s regional behavior and its crackdown on dissent at home, could weaken support for the JCPOA within the United States and give proponents of deal-killing legislation a boost. So far, however, there are no clear indications that the JCPOA has contributed either to more moderate or more provocative behavior. Indeed, consistent with statements by Supreme Leader Ali Khamenei, there have been few changes in Iran’s behavior toward its neighbors in the last year.

A potential wildcard for the future of the JCPOA is upcoming governing transitions in both Washington and Tehran. There will be more continuity in policy toward Iran and the JCPOA if Hillary Clinton becomes president, although she is likely to take a harder line than her predecessor. Donald Trump now says he will re-negotiate rather than scrap the deal, but in practice that could produce the same result because a better deal will not prove negotiable. With President Hassan Rouhani up for re-election next year and the health of the Supreme Leader questionable, Iran’s future policy toward the JCPOA cannot be confidently predicted.

A final verdict on the JCPOA is many years away, not just because of the challenges mentioned above but also because of the crucial uncertainly regarding what Iran will do when key restrictions on its ability to produce weapons-grade nuclear materials expire after 15 years. However, we can say the nuclear deal is off to a promising start, as even some of its early critics now concede. Still, it is already clear that the path ahead will not always be smooth, the longevity of the deal cannot be taken for granted, and keeping it on track will require constant focus in Washington and other interested capitals. 

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Affordable Care Encourages Healthy Living: Theory and Evidence from China’s New Cooperative Medical Scheme

On May 25th, 2016, the Brookings-Tsinghua Center and China Institute for Rural Studies hosted a public lecture on the topic –Affordable Care Encourages Healthy Living: Theory and Evidence from China's New Cooperative Medical Scheme, featuring Dr. Yu Ning, assistant professor of Economics at Emory University.

      
 
 




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Want to ease tensions in the Middle East? Science diplomacy can help

Science diplomacy can help countries in the Middle East and elsewhere solve on-the-ground challenges and improve standards of living for their citizens. But it can also lay groundwork for improving relations in a region often defined by tension (if not outright conflict) through functional, scientific cooperation that is less politicized.

      
 
 




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Better schools or different students? Immigration reform and school performance in Arizona


Donald Trump has made waves during this year’s election cycle by taking a hard line on illegal immigration. This, however, builds on years of heated debate among policymakers. It is also an enduring hot-button issue in Arizona, which has passed several immigration laws over the years.  In 2010, the passage of SB 1070 brought national attention to this debate.  Deemed the strictest immigration law to date, SB 1070 sought to achieve “attrition [of illegal immigrants] through enforcement” by requiring law enforcement to detain any person whom they believed to be residing in the country illegally. Although SB 1070’s effects on individuals and families have been well documented, little is known about its impact on students and schools. To this end, we sought to estimate the relationship between the passage of SB 1070 and school-level student achievement.

We anticipated that anti-immigration policies would primarily affect children from the families of undocumented immigrants. Such effects could be observed in different ways. For instance, the emotional and psychological distress of these children could result in a decline in average test scores at the school-level. On the other hand, students might have left the country or the state under the threat of being deported in which case school-level test scores would rise (since these students often perform below their peers). To this end, we considered three scenarios: 

  1. Immigrant children remain in the state but experience higher levels of stress.  As a result, average school-level test scores will drop while Hispanic enrollment remains the same.
  2. Children of undocumented immigrants leave the state, which results in a drop in Hispanic enrollment accompanied by an increase in school-level test scores.
  3. Or, the first two scenarios occur simultaneously and we do not observe any change in test scores since the two effects would cancel each other, but note a slight decrease in Hispanic enrollment.

In order to see which of these hypothetical scenarios is supported by the data, we first estimated the relationship between the passage of SB 1070 and average school-level reading test scores. We then attempted to unpack the mechanism through which such an effect might have taken place. To this end, we used publicly available data on school-level achievement and enrollment collected by the Arizona Department of Education (ADE). Given the targeted nature of the policy and the demographics of immigrants in Arizona, the majority of whom are of Hispanic or Mexican descent, we focused on schools that traditionally enroll large proportions of Hispanic students. We identified schools with high (more than 75 percent) shares of Hispanic students as those whose average achievement and student composition are most likely to be affected by immigration reform. We contrasted changes in school-level achievement and enrollment in those schools with schools that enroll less than 25 percent Hispanic students, as these schools are less likely to experience any changes as a result of tightening immigration laws.

Figures 1 and 2 show trends in the average percentage of students passing the state reading test and average Hispanic enrollment at these schools between 2006-2007 and 2011-2012.           

Figure 1. Average Percent of Students Passing AIMS Reading

 

Figure 2. Average Hispanic Student Enrollment

Clearly, the rate of growth in school-level reading scores was much higher for high Hispanic schools after the passage of SB 1070 in 2010 (Figure 1). At the same time, there was a significant decrease in Hispanic enrollment in these schools (Figure 2). Thus, it appears the second scenario is likely driving the patterns we observe.

The data also suggest that the trends for high Hispanic and low Hispanic schools started diverging before the passage of SB 1070 - after the 2007-2008 school year.  This happens to be the year that Arizona passed an even more restrictive, though less controversial, immigration law – the Legal Arizona Workers Act (LAWA). LAWA required Arizona business owners to verify the legal status of their employees using E-Verify, an online tool managed by the federal government. Although LAWA used a different mechanism, similar to SB 1070 it sought to achieve the attrition of undocumented immigrants from the state. 

We then would anticipate both laws to have similar effects on school-level achievement and Hispanic enrollment. Indeed, we estimated that LAWA likely led to an average increase of roughly 4 percent of students passing the state reading test at high Hispanic schools. This was accompanied by an average loss of 38 Hispanic students per school. Because the passage of SB 1070 was preceded by the passage LAWA as well as a language policy that would have affected treatment schools, disentangling the effects of these two policies is not straightforward. However, based on our analysis, we estimate that SB 1070 is associated with an average increase of between 1.5 percent and 4.5 percent of students passing the state reading test at the school-level accompanied by an average loss of between 14 and 40 Hispanic students. 

Despite the fact that we cannot pin down the exact magnitude of SB 1070’s effect on school-level achievement, our analysis shows that when Arizona passed restrictive immigration laws in 2008 and 2010, it looked as if the state’s lowest performing schools were improving rapidly. This, however, likely had more to do with the changing composition of schools as an indirect though anticipated effect of immigration policies than with policies aimed at improving student achievement. 

Despite this, the Arizona Department of Education took credit for these gains. Similarly, Arizona was recently recognized as one of the nation’s leaders in growth on the National Assessment of Educational Progress (NAEP) over the last ten years. Although wrongly attributing these gains may seem harmless at first glance, it is important to remember that Arizona is viewed by many as a model for controversial education reforms like school choice and high-stakes accountability. It is easy to imagine how policymakers might look at increasing test scores in Arizona and wrongly attribute them to these kinds of reforms. That’s not to say that these policies don’t have merit. However, if other states adopt education policy reforms under the assumption that they worked in Arizona, then they might find that these policies fail to deliver.

Authors

  • Margarita Pivovarova
  • Robert Vagi
Image Source: Jonathan Drake / Reuters
     
 
 




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Exit, voice, and loyalty: Lessons from Brexit for global governance


Economist Albert Hirschman’s marvelously perceptive little book with big ideas written in 1970 titled “Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States” provides a cornucopia of insights into understanding Brexit and the current state of global governance.  When it emerged American economist Kenneth Arrow marveled at its extraordinary richness, and political scientist Karl Deutsch, in his presidential address to the American Political Science Association, called it an “outstanding contribution to political theory.”

Economists assume exit to mean dissatisfaction with an organization’s product or the service leading to decline in demand for it. The value of exit lies in the certainty it provides in terms of the relationship between the customer or member and the firm. Political scientists think of how a firm handles its response to customer dissatisfaction as the exercise of voice by stakeholders. The value of voice is that it can lead to reform that ultimately determines the firm’s revival, an idea also advanced by scholar Clayton Christiansen in his book “The Innovator’s Dilemma.” An understanding of the conditions under which exit and voice are exercised requires the incorporation of the concept of loyalty. Loyalty makes voice more probable and exit less likely. But loyalty does not by itself make the exercise of voice more effective. That depends on the extent to which customers or members are willing to trade off the certainty of exit against the uncertainties of improvement in the deteriorating product, and their ability to influence the organization.  

Applying these ideas to Brexit suggests that the option of a U.K. exit was made more likely because of the limited voice of the U.K. in achieving reforms, coupled with the fact that Britain’s loyalty to the European Union was mixed at best. Its self-perception as “special people” was accompanied by long-standing skepticism about foreigners, including other Europeans.

Some have attributed Brexit to misjudgment by Prime Minister David Cameron about holding a referendum, poor management of migration policy by the EU including procrastination and downright misjudgment on migration, and they have termed the historic vote as nothing short of the beginning of the end of the post-World War II institutional frameworks, including the Bretton Woods institutions. They fear that the longest and most prosperous period of sustained peace in modern human history, enabled by post-war global architecture, may have come to an end.

The Economist is one proponent of this view, describing Brexit as multiple calamities. The British economy and polity are wildly off the rails, the newspaper notes. The prime minister has resigned with no obvious successor. The leader of the opposition is struggling to survive a coup. The pound hit a 31-year low against the dollar and banks lost a third of their value before stabilizing. Meanwhile there is talk in Scotland and Northern Ireland of secession.

But my own English friends, some of whom favored Brexit, talk about the high tax payments to the EU, oppressive overreach of the EU bureaucracy, and the fear of open borders leading to uncontrollable immigration from Eastern Europe, Turkey, and the Middle East. In short they see EU membership as all pain and no gain. On the surface Brexit has all the flavors ranging from nostalgia of self-rule to xenophobia.

Lessons for global governance?

There are already signs that exit is becoming the preferred option in various global governance organizations. Global loyalties are split, not just among great powers, but also between developed and developing countries. Voice and reform have not been effective.

Hirschman mentions leadership and timely action in sharing power with the next generation as a behavioral trait (often found in the animal kingdom) favoring voice. He contrasts that with exit, which he describes as a human behavior which assumes markets, including political markets, will solve problems.

Hirschman’s chapter “Exit and Voice in American Ideology and Practice” helps us to better understand the U.S. role in global governance. He notes that exit has been accorded “an extraordinarily privileged position in the American tradition” founded in its very creation as a land of immigrants, who, he reminds us, were opting for exit.  Indeed, like in Britain, “the neatness of exit over the messiness and heartbreak of voice” has persisted throughout U.S. history. In his last chapter, “Elusive Optimal Mix of Exit and Voice,” he does not come up with a recipe for some optimum mix of the two, nor does he recommend each institution has its own optimum mix, instead arguing conditions are seldom ripe for their optimum and stable mix—although it is possible to say there is deficiency of one or the other at a given point in time.

Today, it seems that the dominant mode of the post-World War II era, namely voice, is plainly revealing its inadequacy, so the other mode, exit, will eventually be injected once again.

Having had a leading role in founding the global architecture of the United Nation, Food and Agriculture Organization, and Bretton Woods institutions, the U.S. has had a strong voice in and loyalty to the Bretton Woods institutions as well as leadership roles commensurate with its historic roles. U.S. loyalty to the U.N. outside of the Security Council has varied among administrations, since voice in U.N. organizations is distributed more equally. The U.S. has opted for exit from specific U.N. organizations from time to time when it has disliked the dissenting views of other members. 

Others are also choosing to exit. China’s slightly increased shares in the International Monetary Fund and the World Bank after the financial crisis are nowhere near its weight in the global economy, thanks to European reluctance to accept a reduced voice. China and other emerging countries have exercised a partial exit option by establishing the Asian Infrastructure Investment Bank and the New Development Bank to meet the investment needs of developing countries.The U.S. considered the establishment of the two as a threat to its leadership and to the Bretton Woods institutions, viewing the acts as verging on disloyalty, whereas most U.S. allies have embraced membership in both. And yet the Asian Infrastructure Investment Bank is following on the footsteps of the Bretton Woods institutions as regards norms and rules.

To strengthen global governance requires strengthening “voice” and weakening incentives for “exit” from the U.N. and Bretton Woods institutions and other forums of global governance. The U.S. needs to also lead the effort to increase the rewards and reduce the cost of exercising voice. This would be a timely reminder, when politics seems to thrive on divisions, that leadership means forging inclusive institutions that serve all members. 

Authors

  • Uma Lele
      
 
 




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How to defeat terrorism: Intelligence, integration, and development


My partner was caught at the Istanbul airport during the latest terrorist attack. She hid in a closet with a few people, including a small girl, disconcerted and afraid. And when the attack was over, she saw the blood, desolation, chaos, and tears of the aftermath. This was a horrific moment. Yet, it paled in comparison to what the injured and dead and their relatives had to suffer.

It seems that terrorism and political violence are becoming more prevalent and intense. They have been, however, long brewing and have affected many countries around the world. In the 1980s, my home country, Peru, suffered immensely from terrorism: The badly called “Shining Path” organization, with its communist ideology and ruthless tactics, terrorized first rural communities and then large cities with deadly bombs in crowded places and assassinations of official and civil society leaders.

A few years ago, Phil Keefer, lead economist at the World Bank, and I edited two books on what we perceived to be the main security threats of our time: terrorism and drug trafficking. We thought that the answers had to come from research, and we tried to gather the best available evidence and arguments to understand the links between these security threats and economic development.

After the myriad of recent terrorist attacks—in Istanbul, Munich, Nice, Bagdad, Brussels, and Paris, to name a few—we found it important to recap lessons learned. These lessons are not just academic: Understanding the root causes of terrorism can lead to policies for prevention and for reducing the severity of attacks. To defeat terrorism, a policy strategy should include three components: intelligence, integration, and development.

Intelligence. A terrorist attack is relatively easy to conduct. Modern societies offer many exposed and vulnerable targets: an airport, a crowded celebration by the beach, a bus station at peak hours, or a restaurant full of expats. And the potential weapons are too many to count: a squadron of suicide bombers, a big truck ramming through the streets, two or three comrades armed with semi-automatic guns. It is impossible to protect all flanks, and some of the measures taken to prevent the previous terrorist attacks are, well, frankly silly. For a strategy to have any chance against terrorism, it should be based on intelligence. Intelligence implies understanding the motivations, leadership structure, and modus operandi of terrorist organizations, and developing a plan that can anticipate and adapt to their constantly morphing operations. Importantly, the ideological dimension should not be ignored because it explains the extremes to which terrorists are willing to arrive: A suicide attack requires a person who has muted both his basic survival instinct and all sense of natural compassion for others. It was radical communism in the 1970s and 1980s; it is a perverted and fanatical misrepresentation of Islam nowadays. An intelligence strategy that targets the sources of terrorism, both the perpetrators and the social movements that underlie them, should be the first component of the campaign against terror.

Integration. Foreigners living in the U.S. like to make fun of Hollywood movies and the social rituals that Americans go through each year: Halloween and Thanksgiving are in many respects more popular than Christmas. Yet, thanks to these cultural norms along with widespread economic opportunities and equality under the law, the U.S. has mostly succeeded in what many countries, including some European ones, have failed: the integration of people of different ethnic, religious, and cultural backgrounds. The U.S. is no paradise of integration, but the social melting pot does work for immigrants: Within a generation or two, Mexican Americans, Italian Americans, Iranian Americans, and so forth are just Americans, with a single national identity and, at least by law, the same rights and obligations. In some European countries, in contrast, many immigrants feel like second-class citizens. There is little that can inflame more hatred than the feeling of being excluded, and a misguided search for a sense of belonging can be the trigger that incites religious, ethnic, and ideological radicalization. This may explain why France has suffered more from terrorist acts perpetrated by their own residents than the U.S. or U.K., that paradoxically are substantially more engaged in the war against ISIS and al-Qaeda. Social integration—especially of immigrants—through explicit and targeted programs from education at an early age to immigration and citizenship reforms is a key component in the fight against terrorism.       

Development. One of the puzzles in the evidence on terrorism is that while it tends to be led (and sometimes even perpetrated) by well-off and educated people, it represents the complaints and grievances of the disenfranchised, the poor, and the unemployed. The hundreds of thousands of unemployed and discouraged young men in places as diverse as Afghanistan, Somalia, South Africa, and Brazil are the potential armies of common and political violence. In South Africa and Brazil, lacking an overriding communal ideology, this violence is expressed in robberies, homicides, and common crime. In Afghanistan, Iraq, and Syria, the violence is mostly political, taking the shape or at least the cover of religious fundamentalism. Somehow in Somalia, violence has adopted both criminal and political expressions: We worry about Somali pirates as much as we do about Somali jihadists. (On the link between vulnerable youth and violence, it is telling that the name of the main terrorist organization in Somalia, al-Shabaab, means literally “The Youth”) But there is hope. A couple of decades ago, thousands of unemployed young people joined terrorist organizations in Cambodia, Colombia, and Peru, when these countries were fragile. Since their economies started growing and providing employment, these armies for criminal and political violence have started to fade away. Investing in development, conducting economic reforms, and providing (yes, equal) opportunities is the third component of a winning strategy against terrorism.

A sound military and police strategy is undoubtedly important to counter terrorism. However, it’s not sufficient in the long run. If we want to defeat terrorism permanently and completely, we need to tackle it comprehensively, using political and military intelligence, social integration, and economic development.

For more, please see Keefer, Philip and Norman Loayza, Editors. Terrorism, Economic Development, and Political Openness. Cambridge University Press. 2008.

Authors

  • Norman Loayza
      
 
 




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After the emergency: What European migration policy will eventually look like


For months, Europe has been dealing with the hectic, day-to-day struggles of managing a massive migrant crisis. While those challenges dominate in the short term, European leaders must also start thinking about medium- to long-term reforms to the European Union’s asylum and migration policies.

European governments have made clear that they want to reform the Common European Asylum System. The European Commission has proposed reforms of its own, which to become laws would need to be approved by both the Council and the European Parliament. But while these proposals are certainly steps in the right direction, they don’t go far enough in addressing structural weaknesses in Europe’s migration and asylum policies.

Positive momentum in a number of key areas

There are several areas where the Commission has already proposed good reforms:

  1. The Commission is proposing to recast a directive aimed at standardizing the processing of asylum procedures across Europe into a fully-fledged regulation. This is good news. The persistent variation in the implementation of asylum procedures across the EU highlights this necessity. Unlike directives, which need to be transposed into national legislation, regulations are immediately and simultaneously enforceable across all member states. 
  2. A directive specifying the grounds for granting international protection is to be replaced by a more stringent regulation, which is also a good thing. It’s problematic that asylum seekers from the same country of origin enjoy dramatically different acceptance rates across EU member states. Combined, these changes should force member states to comply with international standards on asylum procedures and increase opportunities for migrants to get asylum (particularly in countries that have applied more restrictive criteria).
  3. The Eurodac system, which establishes a pan-European fingerprinting database, is now likely to be expanded as well. It would store data on third-country nationals who are not applicants for international protection. But implementation is again a challenge, since Croatia, Greece, Italy, and Malta already struggle to fingerprint new arrivals (something over which infringement proceedings are still ongoing). 
  4. To attract highly skilled professionals, the Commission is working to make the EU Blue Card scheme more appealing. While member states will retain the right to set their own annual migrants quota, Blue Card procedures and rights will be harmonized across the EU. The minimum length of an initial contract offer will be lowered to six months, salary thresholds will be reduced, and the Blue Card will be offered to migrants granted asylum. Other measures—including a directive aimed at students and researchers and another facilitating intra-corporate transfers—are also steps in the right direction. 
  5. Finally, the Commission has proposed making permanent a pan-European resettlement scheme that was launched during last summer’s migrant crisis. That’s also a good thing. The framework would harmonize resettlement procedures and financially incentivizes member states to favor the European framework over national ones. At the same time, it would allow asylum seekers to move to Europe without risking their lives trying to cross the Mediterranean. However, given that member states will still determine how many people to resettle annually, the long-term impact of the scheme remains to be seen. 


German Interior Minister Thomas de Maiziere watches as a migrant from Babel in Iraq has his fingerprints taken, during a visit to Patrick-Henry Village refugee centerin Heidelberg, Germany. Photo credit: Reuters/Kai Pfaffenbach.

Far more needed but little appetite among national capitals

There are several policy areas where far more should be done: 

  1. There is at least one area where the EU is still planning reforms but of a far more limited nature, and that’s on the current directive on basic standards for housing, healthcare, and employment. In private conversations, EU officials stress that the sheer numbers of migrants make it hard for even the best-performing countries to implement this directive. Put simply, member states do not have the political will to do more than what they are already doing. The EU is therefore, understandably, proposing a more moderate reform: it aims to improve reception conditions throughout the EU without dictating to member states how to do so.
  2. Less privileged migrants must be provided with safe avenues to contribute to Europe’s economy. Legislation allowing seasonal workers into the Union for a maximum of between five and nine months within any twelve-month period already goes in this direction. Forums connecting local industry associations and countries of origin to better match labor demand and supply would also be welcome. Armenia, Azerbaijan, Cape Verde, Georgia, Morocco, Moldova, and Tunisia—which enjoy mobility partnerships with the EU—would benefit from such an approach. More can be done if the political will amongst European capitals is there.
  3. Finally, Europeans must ensure that migrants feel welcome to stay. The EU is aware of the need to adequately integrate third-country nationals, but European capitals are in the driver’s seat when it comes to integration. Directives aimed at facilitating family reunifications, integrating long-term residents, and streamlining administrative processes do what they can in this respect. However, the paths to integration and to welcoming foreigners chosen by European countries are exceedingly different, and for the time being likely to remain so. Because of this and until policymakers put integration at the top of their national agendas, foreign nationals will likely continue to struggle. 

Dublin: Still the elephant in the room

The Dublin regulation, which outlines which member state should be responsible for handling asylum applications, still must be radically revised. This is the elephant in the room and the core of the current asylum refugee framework. Member states should consider the Commission’s proposals for a corrective mechanism in case of migrant surges, a new system for allocating applications across the EU based on a distribution key or, ideally, the centralization of competences to the European Asylum Support Office

Informal conversations with top national and European officials suggest that the corrective mechanism is the most likely proposal to be accepted by the member states and therefore adopted. Under such an agreement, Dublin would be maintained, but automatic relocations would start in case of exceptional migrant surges—with hefty fines imposed by the Commission on those member states refusing to play their part. Unfortunately, this is not good enough. Such an approach does not address the underlying structural unfairness and unsustainability of a system that leaves the burden of processing arrivals overwhelmingly on frontline states. 

The current situation exemplifies a significant failure of governance that harms the interests of migrants and member states alike. At present, the Dublin Convention largely ignores the needs of migrants in terms of family reunification, language skills, and cultural integration. Unfortunately, the corrective mechanism for the Dublin Convention does nothing more than provide some relief in case of acute emergencies. Meanwhile, it leaves frontline states to continue facing on their own a crisis that only Europe as a whole could solve. “European leaders” still think and act through national perspectives.

Moving along despite European governments

The European Commission faces both legal and political constraints that limit its scope of action. Whenever it can, it is pushing for a significant overhaul of European asylum and migration policies. However, once more, its initiatives are hampered by the so-called “interests” of the member states. For the time being, we are likely to see some degree of integration in the fields of asylum and migration policies. But because of national vetoes, progress is slow and proposals are often watered down. 

      
 
 




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Turkey’s failed coup could have disastrous consequences for Europe’s migrant crisis


Editors’ Note: Turkey’s failed coup may lead to the worsening of Europe’s migration crisis, writes Jessica Brandt. That’s because it could lead to the dissolution of a recent pact between Brussels and Ankara over the plight of refugees arriving on the European Union’s shores. This post originally appeared on Vox.

Turkey’s recent failed coup may lead to the worsening of Europe’s migration crisis. That’s because it could lead to the dissolution of a recent pact between Brussels and Ankara over the plight of refugees arriving on the European Union’s shores. Even before the events of last weekend, the fate of the agreement was uncertain amid quarrels between the parties. Now its future is even more in doubt.

Last year, more than a million migrants and refugees crossed into Europe, roiling politics across the continent. It’s a crisis EU chief Donald Tusk has described as an “existential challenge.”

Under the terms of the deal, Turkey agreed to accept the “rapid return of all migrants not in need of international protection crossing from Turkey into Greece and to take back all irregular migrants intercepted in Turkish waters.” In other words, almost all refugees who cross into Greece are slated to be returned to Turkish soil.

In return, the EU pledged to speed up the allocation of €3 billion in aid to Turkey to help it house and care for refugees, “reenergize” Turkey's bid for membership in the EU, and lift visa restrictions on Turkish tourists and businessmen.

But the European Commission has conditioned changes to the visa restrictions on better governance in Turkey. In particular, it requires a change in President Recep Tayyip Erdoğan’s controversial anti-terror law, which he has used to crack down on journalists and critics. Erdoğan was already adamantly against narrowing the law to protect free speech. Having now overcome a determined coup attempt, he is even less likely to do so.

Instead, it appears probable that he will further clamp down on civil liberties, acting on his authoritarian instincts and retaliating against his detractors. On Sunday, he suggested that he might reintroduce the death penalty, a practice Turkey abolished in 2004 as part of its bid for EU membership. Doing so would widen the gap in political culture between Turkey and Europe and, as German Foreign Minister Frank-Walter Steinmeier asserted forcefully on Monday in Brussels, derail the already limited possibility of reigniting accession talks.

The pact has already been strongly opposed by the European left, and particularly by humanitarian and human rights groups. Rising authoritarianism in Turkey would only increase resistance to the deal, making implementation even harder, especially if those groups were to scale back their activities on the ground.

That would not be without precedent. The United Nations High Commissioner for Refugees, Doctors Without Borders, and the International Rescue Committee, among others, have suspended some of their activities in refugee centers because they do not want to be involved in implementing a deal that they describe as constituting the blanket expulsion of refugees from Turkey back to Greece.

[A] crackdown could also undermine the legal basis of the agreement.

Crucially, a crackdown could also undermine the legal basis of the agreement. One of the agreement’s key provisions is that individuals who cross from Turkey into Greece will be sent back across the Aegean to Turkey. That hinges on the notion that Turkey is a “safe third country” for migrants. A crackdown could prompt refugees to argue that it isn’t.

If that were the case, deporting them to Turkey could be seen as constituting “refoulement”—the forcible return of asylum seekers to a country where they are prone to be subjected to persecution—which is forbidden under both international and EU law.

That’s a problem, since some analysts believe worsening conditions in Turkey could lead even more people seeking refuge to journey onward to Europe. In the past, Erdoğan has threatened to “open the gates” and send refugees streaming into Europe when displeased with the level of financial assistance from Brussels earmarked for managing the crisis. Preoccupied by troubles at home, he may see stability as in his interest and resist taking aggressive steps that would cause an open breach.

For both parties, finding a stable, though imperfect, accommodation—as they were poised to do prior to the events of last weekend—is still the most promising path forward. Let’s hope the parties take it. Managing Europe’s migration crisis depends on it.

Authors

Publication: Vox
      
 
 




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Development Seminar | Unemployment and domestic violence — New evidence from administrative data

We hosted a Development Seminar on “Unemployment and domestic violence — new evidence from administrative data” with Dr. Sonia Bhalotra, Professor of Economics at University of Essex. Abstract: This paper provides possibly the first causal estimates of how individual job loss among men influences the risk of intimate partner violence (IPV), distinguishing threats from assaults. The authors find…

       




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Class Notes: Income Segregation, the Value of Longer Leases, and More

This week in Class Notes: Reforming college admissions to boost representation of low and middle-income students could substantially reduce income segregation between institutions and increase intergenerational mobility. The Alaska Permanent Fund Dividend increased fertility and reduced the spacing between births, particularly for females age 20-44. Federal judges are more likely to hire female law clerks after serving on a panel…

       




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At climate summits, the urgency from the streets must be brought to the negotiating table

COP25, the annual global climate summit that ended last weekend in Madrid, offered a visible public spectacle, but little substantive progress. Part of the problem was that the summit — technically known as the 25th session of the Conference of the Parties to the United Nations Framework Convention to Combat Climate Change (UNFCCC) — was…

       




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Building and advancing digital skills to support Seattle’s economic future


Summary: Why digital skills matter

As the influence of digital technologies in the global economy expands, metropolitan areas throughout the United States face the task of preparing residents for an increasingly technology-powered world. Most jobs now require basic computer literacy to operate email and other software, while jobs specific to information technology (IT) require advanced skills such as coding. At home, residents need access to the Internet and consumer technologies to do homework, shop at online retailers, communicate with one another, or check real-time traffic and transit conditions.

Digital technologies hold out the promise of more widely shared prosperity, but achieving that vision will require every person to have basic digital skills—the ability to use digital hardware and software to manage information, communicate, navigate the web, solve problems, and create content.1

While some metro areas have made important advances on digital skills acquisition, the effects are not ubiquitous. The Census Bureau found that only 73 percent of U.S. households subscribed to in-home broadband service in 2013, leaving 31 million households without a high-speed in-home connection.2 Pew Research Center finds that over one-third of U.S. adults doesn’t own a smartphone, while 7 percent of smartphone owners lack high-speed Internet access at home and have few ways to get online beyond their smartphone.3 Another survey finds that 29 percent of Americans have low levels of digital skills, and many of these persons tend to be older, less educated, and lower-income.4

In an advanced economy, all residents deserve an opportunity to obtain digital skills. It is up to leaders in each U.S. metropolitan area to determine how best to meet this need. As with any social challenge of this scale, meeting it will require pragmatic problem-solving and deep collaboration across the public, private, and civic sectors.

This brief summarizes the results of a workshop held in Seattle to explore these issues. While the findings from the workshop discussions are unique to the Seattle region—making its leaders and residents the primary audience for this brief—the workshop approach can be replicated in any metropolitan area interested in addressing digital skills shortfalls and developing solutions tailored to residents’ needs.

Introduction: Digital skills and the Seattle metropolitan economy

Metropolitan Seattle is well positioned to prosper in the information era. Advanced industries—including global leaders in aerospace and IT—power the regional economy and have created an impressive network of patent-producing firms that employ over 295,000 people.5 The region’s households actively participate in the digital economy as well, as evidenced by a broadband adoption rate of 82 percent.6 Collaborations bringing together firms, public utilities, and government institutions make Seattle a national leader in the use of data monitoring to reduce energy usage.

However, for the region to maintain its position in the years ahead, it will need to cultivate a more inclusive economy that gives every resident the opportunity to acquire the skills needed to succeed in the digital era.

Like most U.S. metro areas, metropolitan Seattle continues to struggle with digital inclusivity. Strong broadband adoption across the region masks lagging adoption rates in many low-income neighborhoods and communities of color.7 A skills mismatch between job openings requiring digital skills and the education and skills training of area residents contributes to income inequality.8 This inequality, though less marked than in other cities with similar high-tech economies, continues to increase, with the highest-earning households experiencing rising incomes while lower-income households’ earnings stay relatively flat.9 Meanwhile, more than 45 percent of jobs in the region are more than 10 miles from downtown Seattle and Bellevue, and over two-thirds of poor households now live in the suburbs.10 This kind of job sprawl and suburban poverty limit many residents’ physical access to economic opportunity.

But the Seattle area has the assets to address these challenges. The region has a legacy of direct private-sector support for professional skills development and a huge network of IT firms that can expand such efforts. Government agencies and civic institutions already manage programs to promote digital skills acquisition. In addition, there is a regional ethic of supporting equitable economic growth, seen most recently in Seattle’s landmark living wage policy and Sound Transit’s discounted fee system for lower-income riders.11

In an effort to address Seattle’s digital skills gap, the Brookings Institution Metropolitan Policy Program convened a group of leaders from the public, private, and civic sectors to discuss how to continue building a regionally inclusive digital skills infrastructure. The workshop consisted of brief presentations from Brookings experts and local leaders, group discussions of current efforts and challenges, and break-out groups to identify specific barriers and discuss strategies and next steps to improve future outcomes.

The following is a distillation of the key themes and lessons from the workshop.

1. Commit to ongoing collaboration

There is a clear consensus among Seattle-area leaders that basic digital skills are essential for everyone. The tough part is ensuring that all residents in the region have the opportunity to acquire these skills.

This challenge implicates a wide range of stakeholders, from municipal and county government, public libraries, and universities to area businesses, education and training providers, philanthropies, and nonprofits.

Many of these actors already manage their own initiatives, to great effect. Programs like the Seattle Goodwill’s Digital Literacy Initiative are working to increase the number of people with 21st-century digital skills, particularly among traditionally underserved populations. The private sector is advancing a similar agenda with major initiatives, such as Microsoft IT Academy and Google’s Made With Code, that promote computational thinking through computer science. Meanwhile, nonprofit training programs like the Ada Developers Academy as well as for-profit training providers such as Code Fellows and General Assembly are getting more people on pathways into tech-intensive careers that pay well.

However, despite this demonstrated willingness to act, coordination of activities across the region remains a challenge. Most initiatives operate independently from one another, often resulting in duplicative efforts and missed opportunities for greater impact. Furthermore, current efforts often concentrate activities in either the central cities or specific portions of the three-county region, thereby excluding those who live in other parts of the metro area. For example, the city of Seattle’s excellent digital equity programs extend only to the city limits and are not available in South King County. Without more collaboration, the region will not be able to take full advantage of its creativity, resources, and capacity for pragmatic problem-solving.

By committing to ongoing collaborative action, leaders in the Seattle region will be well positioned to design, launch, and maintain smart solutions to the digital skills challenge today and in the future.

2. Identify a convener and organize for action

Once stakeholders commit to collaborative problem-solving, they must then determine how best to organize for action. Identifying a neutral convener organization can help expedite this process. Designating a convener ensures that there is a single organization tasked with driving the group’s agenda forward and fostering greater collaboration among stakeholders.

The role of convener involves a handful of specific tasks that help keep the group on track and in regular contact. Organizing regular group meetings, delegating critical tasks like research into best practices, and managing communication within the group are all critical functions for the convening organization. To take just one example, the Community Center for Education Results (CCER) fills the convener role for the many stakeholders involved in the Road Map Project, which is working to improve student outcomes in South Seattle and South King County.12

The Seattle area is fortunate to have a number of organizations that could act as convener. Potential candidates include the Workforce Development Council of Seattle-King County (WDC), the Seattle Public Library, the University of Washington, or one of the many large philanthropies in the region.

Regardless of which organization ultimately takes on this role, selecting a convener marks a crucial first step toward an actionable, collaboratively developed digital skills agenda for the Seattle region.

3. Develop a shared vision for digital skills acquisition

Crafting a shared vision for digital skills acquisition will strengthen the group’s work by ensuring that all involved are on the same page. That vision can support the creation of a coordinated regional plan, which will help stakeholders take advantage of economies of scale and ensure the greatest return on resources invested. This plan should take particular care to address challenges faced by traditionally underrepresented groups, including women and people of color as well as those in lower-income communities.13 Ending the persistent lack of diversity in tech-oriented careers will require a concerted effort on the part of all stakeholders involved.14

To start, the convener’s first task should be organizing a time for stakeholders to sit down, develop a shared vision, and determine the next steps necessary to achieve that vision. Conducting an audit of existing programs in the region that support digital skills acquisition can be a good place to begin. This inventory will highlight any overlapping initiatives while also providing information on gaps in the digital skills infrastructure that will need to be addressed.

In addition, the group should work with the private sector to identify the digital skills needed in various industries and begin to map out pathways into tech-oriented careers. This information will ensure that the solutions developed are informed by current and projected industry demand.

The industry-sector panels convened by WDC offer one possible approach. Under this model, WDC serves as convener, bringing together key stakeholders from industry, education, workforce development, labor, nonprofits, and other relevant areas to identify shared challenges and engage in collaborative problem-solving. The outcomes and activities of the sector panel are determined by the group, with WDC facilitating the process throughout. WDC has a demonstrated record of success in organizing sector panels for the maritime and health care industries, and it could apply the same techniques to industries requiring digital skills.

Preliminary research will provide the data and analyses necessary for truly evidence-based solutions that respond directly to specific challenges in the region. Once this baseline research is completed, the group can begin problem-solving in earnest. To start, the group should identify a punch list of action items that can be easily accomplished in order to start building a record of successful collaborations.

As the group designs these solutions, it should also take care to establish performance management systems that track progress over time. Monitoring the performance of each solution implemented will also support efforts to refine and course-correct programming over time.

4. Adopt new roles to accomplish regional goals

With a new, shared vision of the community’s digital skills infrastructure in hand, stakeholders will need to align their individual initiatives to that goal and, in some cases, redefine their roles in order to support the broader vision.

These new roles should leverage each organization’s core strengths rather than require them to develop new ones. For example, metropolitan Seattle’s public libraries are already community-meeting spots that specialize in information exchange, offer free access to the Internet, and host a variety of classes for the public. This current work positions the libraries to serve as an information clearinghouse for digital skills programs offered in the region, ranging from job-skills training to classes on smartphone use. Likewise, academic experts at the University of Washington and other postsecondary institutions could help create a new curriculum for teaching applied digital skills to diverse populations.

At the same time, organizations should be open to adapting their core projects in order to fill gaps in the region’s digital skills infrastructure. For example, technology firms like Microsoft and Google could draw on their extensive civic philanthropic efforts and employee skills-training programs to provide basic, applied digital skills and computer science training that enhances the regional workforce. Such efforts could build on Microsoft’s IT Academy model and Google’s support for programs at the Boys and Girls Clubs, which could be repurposed to address adult needs rather than those of children and teens.

As individual organizations adopt new roles, they will need to ensure that services are available to residents across the entire metropolitan area. Anchored by its Department of Information Technology and its Digital Equity Initiative, the city of Seattle has an impressive record of boosting digital skills within the city proper. But the vast majority of area residents live outside Seattle. Furthermore, over 60 percent of the region’s poor households now live in the suburbs. As a result, regional actors like Puget Sound Regional Council, Sound Cities, and county governments face enormous pressure to serve residents across the three-county metro area.

To start, organizations should work together to conduct metrowide surveys of digital equity issues, perhaps following the model employed by Seattle’s Digital Equity Initiative. This quantitative and qualitative data will set the baseline for the entire region and will help organizations set achievable benchmark goals for the years ahead.

5. Create a regional digital skills brand and marketing strategy to galvanize action

In order to communicate the shared vision to area residents, stakeholders should develop and publicize a new regional brand that positions the Seattle region as a leader in digital skills adoption and more equitable economic outcomes.

The associated marketing campaign can counter misconceptions about digital skills and the tech industry, maximize awareness of individual stakeholders’ projects, and minimize costs for each organization. Working together, stakeholders can reach the broadest possible pool of local residents with a cohesive message that encourages digital skills and computer science skills acquisition. Furthermore, by directing residents to centralized

information centers like local public libraries, the campaign will connect individuals with experts who can help them find the best programs for their needs.

In crafting this branding effort, the Seattle area should look to similar campaigns for inspiration. One example is Portland, Ore.’s We Build Green Cities campaign, a trade-based effort to leverage Portland’s international reputation for environmental sustainability and design in order to increase the region’s exports. Baltimore’s Opportunity Collaborative offers a more equity-focused model that brings together local and state public agencies, nonprofit organizations, and universities to solve common workforce, housing, and transportation challenges. A digital skills marketing campaign patterned after existing efforts will allow the region to capitalize on proven models when positioning itself as a leader in digital skills adoption that supports more widely shared prosperity.

Conclusion

The Seattle region stands at a crossroads. It has the industrial assets for continued growth that fosters ongoing innovation and provides jobs that pay well. It also has a commitment to shared prosperity, best represented by the public, private, and civic actors that support better wages, affordable transportation options, and education and training focused on science, technology, engineering, and math (STEM) occupations. The region should build on these efforts by advancing a shared vision for digital skills and undertaking the sustained collaboration necessary to make that vision a reality.

Additional resources

The Boston Consulting Group, “Opportunity for All: Investing in Washington State’s STEM Education Pipeline” (2014).

The Boston Consulting Group and the Washington Roundtable, “Great Jobs Within Our Reach: Solving the Problem of Washington State’s Growing Job Skills Gap” (2013).

Capital One and Burning Glass, “Crunched by the Numbers: The Digital Skills Gap in the Workforce” (2015).

City of Austin, “Digital Inclusion Strategy 2014” (2014).

City of Seattle Department of Information Technology, Community Technology Program, “Information Technology Access and Adoption in Seattle: Progress Towards Digital Opportunity and Equity” (2014).

Communities Connect Network, “Defining Digital Inclusion for Broadband Deployment & Adoption” (2014).

Maureen Majury, “Building an IT Career-Ready Washington: 2015 and Beyond” (Seattle: Center of Excellence for Information & Computing Technology, 2014).

Seth McKinney, “Economic Development Planning in Seattle: A Review and Analysis of Current Plans and Strategies” (Seattle: University of Washington Evans School of Public Policy, 2013).

Seattle Goodwill, “Digital Literacy Initiative: Overview” (2014).

Seattle Goodwill, “Digital Literacy: Theoretical Framework” (2014).

Angela Siefer, “Trail-Blazing Digital Inclusion Communities” (OCLC and Institute of Museum and Library Services, 2013).

Tricia Vander Leest and Joe Sullivan, “ICT Training and the ABCs of Employability: YearUp’s Jobs Program for Urban Youth” (Seattle: University of Washington Center for Information & Society, 2008).



Endnotes

1. Go ON UK, a United Kingdom charity focused on cross-sector digital skills, defines basic digital skills across these five categories. Many other definitions of digital skills and related terms like digital literacy exist. For more information on the Go ON UK definition, see www.go-on.co.uk/basic-digital-skills/ (accessed June 2015).

2. This includes households with only a dial-up connection (1.2 million), households with Internet access but without a subscription (4.9 million), and households without Internet access (24.9 million) (Brookings analysis of U.S. Census Bureau, 2013 One-Year American Community Survey, Table B28002 data).

3. Aaron Smith, “U.S. Smartphone Use in 2015” (Washington: Pew Research Center, 2015).

4. John Horrigan, “Digital Readiness: An Emerging Challenge Beyond the Digital Divide,” presentation at the Information Technology and Innovation Foundation, June 17, 2014, available at http://www2.itif.org/2014-horrigan-readiness.pdf?_ga=1.119517193.1896174784.1435243775 (accessed June 2015).

5. Mark Muro et al., “America’s Advanced Industries: What They Are, Where They Are, and Why They Matter” (Washington: Brookings Institution, 2015).

6. Seattle has the 16th highest broadband adoption rate across 381 metropolitan areas (U.S. Census Bureau, 2013 One-Year American Community Survey estimates data).

7. Based on the Federal Communication Commission’s tract-level broadband subscribership data, neighborhoods with lower adoption rates also are the neighborhoods with higher poverty rates and non-white population rates, based on U.S. Census data (Brookings internal calculations of FCC and U.S. Census Bureau data).

8. Capital One and Burning Glass, “Crunched by the Numbers: The Digital Skills Gap in the Workforce” (Boston: Burning Glass Technologies, 2015), available at http://104.239.176.33/wp-content/uploads/2015/06/Digital_Skills_Gap.pdf (accessed June 2015).

9. Households at the 95th percentile grew their annual incomes by over $23,000 from 2007 to 2013, while incomes for households at the 20th percentile went down by nearly $500 (Alan Berube and Natalie Holmes, “Some Cities Are Still More Unequal Than Others—An Update” (Washington: Brookings Institution, 2015).

10. Elizabeth Kneebone, “Job Sprawl Stalls: The Great Recession and Metropolitan Employment Location” (Washington: Brookings Institution, 2013); Elizabeth Kneebone and Natalie Holmes, “New Census Data Show Few Metro Areas Made Progress Against Poverty in 2013” (Washington: Brookings Institution, 2014).

11. Lynn Thompson, “Seattle City Council Approves Historic $15 Minimum Wage,” Seattle Times, June 2, 2014; Sam Sanders, “Seattle Cuts Public Transportation Fares for Low-Income Commuters,” National Public Radio, March 2, 2015.

12. More information on the entire Road Map project is available at http://www.roadmapproject.org/ (accessed June 2015).

13. For more on the importance of distinguishing the lived realities of women of color from those of white women, see, among others: Kimberlé Williams Crenshaw, “Mapping the Margins: Intersectionality, Identity Politics, and Violence Against Women of Color,” Stanford Law Review 43, no. 6 (July 1991): 1241-99.

14. Charles M. Blow, “A Future Segregated by Science?” New York Times, February 2, 2015, available at www.nytimes.com/2015/02/02/opinion/charles-blow-a-future-segregated-by-science.html (accessed June 2015).

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Image Source: © Anthony Bolante / Reuters
      
 
 




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What Pike Place teaches us about place governance: A Q&A with John Turnbull


Editor's Note: This discussion with John Turnbull, director of asset management at the Pike Place Market Preservation and Development Authority, is the first in a series of Q&As with urban practitioners for the Anne T. and Robert M. Bass Initiative on Innovation and Placemaking.

Pike Place Market in Seattle is a leading example of how intentional governance can help vibrant urban spaces reach their potential as platforms for innovation. John Turnbull, director of asset management at the Pike Place Market Preservation and Development Authority, sat down for an interview to tell us more about the market and the role of the Preservation and Development Authority (PDA) in its operation.

People outside Seattle tend to know Pike Place as a fish market, but it offers so much more. What makes the market special?

The Pike Place Market is a beloved part of Seattle and really unlike any other place. It’s open 363 days a year and provides space for local farmers, artisan vendors, and small businesses to thrive. It offers a wide range of social services, including a food bank, a health clinic, a senior center, child care and preschool, and assisted living for the elderly. It’s also home to nearly 500 residents who live in a mix of rent-subsidized apartments, market-rate units, and luxury condos as well as a boutique hotel and a bed-and-breakfast—all within the four-block district. Our sense of place depends on the permeability of private/commercial/public spaces, and we make a great effort to ensure that the corresponding mix of activity creates space for personal interactions.

Public support has always been a key component of the market’s success. It was first established in 1907 in response to public demand for fresh produce at fair prices. Seattleites kept the market from the wrecking ball in the 1960s and 1970s and have consistently provided public funds for capital investments—even in the midst of the Great Recession.

The market’s focus on supporting local independent business and one-to-one relationships is unique enough to create both a community sense of identity—Seattle’s “soul”—and an attraction for tourists and visitors. This has been part of the market’s identity for more than a century and has continued under the PDA’s stewardship these last 40 years.

How does the market operate? Who’s in charge?

The market’s been around since the early 1900s but its current governance structure dates back to the 1970s, when the market was almost leveled in the name of urban renewal. A group called Friends of the Market formed to fight the city’s redevelopment plans and in 1971 ran a successful ballot measure campaign to save the market. That ballot measure established the Market Historic District and created the Pike Place Market Historical Commission to make decisions about future construction and capital investments.

Commissioners are appointed by the mayor, half from a list drawn up by community organizations and half from people who live, conduct business, and own property in the market district. The commission was created to keep city government from dismantling the market, so its decisions on use, design, and business management are final, not just advisory. Overturning a commission decision requires a court appeal—and even then, appeals can be based only on questions of fair process and/or failure to follow commission guidelines.

The commission reworked the urban renewal plan to preserve the architectural and social fabric of the market. To support these goals, the city created an independent Preservation and Development Authority to oversee financial operations, development, and day-to-day management of the market. The charter [document download] that established the PDA in 1973 continues to be a guiding force for us—we refer to it all the time. It defines the PDA’s specific powers and responsibilities, which include managing the properties in the Market Historic District, supporting local farmers and small-business owners, and providing social services for low-income residents and others in the market community. Funding for social services and programs is coordinated by the Pike Place Market Foundation, which is separate from the PDA. 

How are decisions made?

The PDA executive director and staff handle day-to-day business operations, but most decisions concerning contracts, tenant relations, budgets, and the like are finalized by the PDA Council, a group of 12 volunteers who are appointed for four-year terms by either the mayor, the Pike Place Market Constituency, or the PDA Council itself (each appoints four councilmembers).

The charter created the PDA as a public steward for the market that’s much more nimble than a governmental agency and much more accountable to the surrounding community. The charter requires unusual transparency, including public meetings to approve any expenditures over $10,000; bond issues; donations made by the PDA; and adoption of the annual budget and capital budget. Meanwhile, new businesses, changes in business ownership, and modifications to buildings require approval from the Market Historic Commission, which has regular biweekly meetings that include time for public comment. Nothing happens behind closed doors.

How does the PDA get its funds and how is that funding deployed?

Over 60 percent of our revenue comes from commercial tenants, with residential rents, daystall rents and fees, parking fees, and incomes from various programs and investments making up the rest. This year we expect total revenues over $18 million, which is more than $1 million more than we projected for 2015.

About three-quarters of budgeted expenses come from tenant services, which include everything from maintenance and security to insurance, utilities, and property management. Another 14 percent goes to PDA management and administration, and the last 10 percent goes toward marketing and other programmatic expenses.

The charter also gives the PDA bonding authority, which we used for the first time this past year. The $26 million in bonds will pay down existing debt and finance the new MarketFront expansion that’s slated to open next year.

The PDA Council operates the market as a business, but it doesn’t make decisions strictly based on profit. We think about return on investment in terms of social benefit to the community. The council looks at a whole host of qualitative measures that aren’t easily captured by quantitative metrics. For instance, how do you measure “local pride”? That’s why we end up referring to our charter so often—and also why we encourage our constituents to use the charter guidelines to measure our results. 

So through the council and the charter, we’ve created a form of community-oriented economics that keeps us accountable to our constituents and lets us reinvest earnings to provide social services and keep residential and commercial rents low.

Lots of places are looking to innovation as a way to drive sustainable economic growth. Do you see Pike Place Market as a place for innovation?

Innovation is an important aspect of what happens in the market, though it looks different from what you might see in other more tech-oriented innovation districts. We offer highly localized small business incubation that’s focused on building a strong local economy. By providing a supportive environment for new businesses and strictly limiting opportunities to new ventures that haven’t yet built a customer base, we’ve created an active laboratory for experimentation.

We have a history of providing a solid base for new businesses—especially ones that are food-related. Starbucks, Sur La Table, and a large number of specialty food businesses got their start in the market. And there are an equally large number of culinary ventures whose lead chefs look to the market as a central source of inspiration and community. We support economic growth by helping new ventures get established—which for many involves developing an international presence—while also attracting customers to spend money in our community.

Seattle has grown by leaps and bounds in recent years, thanks in large part to a vibrant tech sector. How has this affected Pike Place Market?

Over the last few years, we’ve seen some significant changes in shopping patterns. Lots of neighborhoods now have weekly farmers’ markets, and grocery stores have been moving toward a more market-like shopping experience, which has meant fewer people shopping for groceries at the market. We’re also seeing more millennials and a lot more tourists, especially in the summer.

These changes got us thinking about what the market needs to do to stay relevant. Bringing in new businesses and younger entrepreneurs is part of this strategy, as are initiatives like our pop-up Express Markets, which bring fresh produce to different locations throughout the city mid-June through September. This summer we’re starting a weekly evening market at Pike Place so that local customers can shop without having to wade through the weekend tourist crowds.

We’ll always be hyper-local and focused on building a strong community of market patrons and vendors. That emphasis on personal connection sets the market apart—it’s something you just can’t replicate with e-commerce. 

Authors

  • Jessica A. Lee
      
 
 




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Confronting Concentrated Poverty in Tough Economic Times

I want to begin by saying how grateful we were at Brookings to partner with the Federal Reserve System on this concentrated poverty project. We like to think that at Brookings we know a lot about this subject, but it was only through this partnership with the Fed that we were able to ground this understanding in the experiences of the 16 communities across the United States that were the focus of the report’s case studies.

The report demonstrates that in addition to managing the macroeconomy, the Fed also possesses a unique and powerful understanding of the U.S. economy from the ground up, which is absolutely necessary for designing smart policy in turbulent times like these.

I want to also give special thanks to my colleagues David Erickson and Carolina Reid at the San Francisco Fed. They played several roles in this project for me: intellectual partners, co-conspirators, mood lighteners, and Fed sherpas. It can be tough for foreigners like myself to navigate this system, and they lightened my load throughout the project. I also want to thank my Brookings colleague Elizabeth Kneebone, who performed a lot of the data analysis for this project.

I want to argue three points, largely policy points, in my remarks this morning.

First, the current economic climate makes the issue of concentrated poverty, and our response, more relevant, not less.

Second, major near-term investments our country makes to resolve the economic crisis can and should provide meaningful opportunities for the most disadvantaged families and communities.

And third, our longer-run efforts to assist high-poverty areas and their residents must take account of the economic challenges and opportunities that manifest at the regional, metropolitan level.


To begin, let’s review where we were when the Fed and Brookings joined forces on this effort in May 2006.

  • The unemployment rate was 4.7 percent, a five-year low.
  • Payrolls were expanding every month for the third consecutive year.
  • The poverty rate, while still above its low in 2000, was dropping.
  • The federal deficit was a relatively manageable 2% of GDP.
  • The Dow was above 11,000, and on its way up.
  • And the 2008 general election promised a storied matchup between party favorites Hillary Clinton and Rudy Giuliani.
A lot can happen in 30 months!

In the wake of record house-price declines and financial market fallout, the economic outlook today is grim. The unemployment rate is 6.5 percent and rising. One projection suggests that the downturn could eventually increase the ranks of the nation’s poor by anywhere from 7 to 10 million. And amid declining revenues and increased expenditure needs, the U.S. budget deficit is expected to top $1 trillion this year.

In short, the situation for the lowest-income communities and their residents is not encouraging.

And neither is our starting point.

As Paul Jargowsky’s research has shown, the incidence of concentrated poverty in America dropped markedly during the 1990s, after two decades of increase. Some combination of a tight labor market and policy changes to promote work and break up the deepest concentrations of poverty seemed responsible for that decline.

But as Elizabeth and I found in a recent Brookings report, we may have given back much of that progress during the first half of this decade. The population in what we termed “high working poverty” communities rose by 40 percent between 1999 and 2005. This suggests that America’s high-poverty areas may have never really recovered from the modest downturn we experienced at the beginning of the decade.

Now, with all the turmoil in our economy, it would be easy to lose sight of these places and their residents, who even seem to have missed out on the benefits of recent growth.

But if we are to meet the enormous challenges facing our country—economic, social, and environmental—we simply can’t afford to take a blind eye to the continuing problem of concentrated poverty.

As decades of research and this report have shown, concentrated poverty magnifies the problems faced by the poor, and exacts a significant toll on the lives of families in its midst.

This report greatly enhances our understanding of how high-poverty communities of all stripes bear these costs. Moreover, it suggests that the contemporary circumstances of these communities owe not just to long-term market dynamics, but also to policy choices made over several decades’ time—some deliberate in their intent, and some producing unfortunate unintended consequences.

Today we’re at an important inflection point for policy. With the economy souring, we don’t have the luxury of using an “auto-pilot” strategy of macroeconomic growth to reach the most disadvantaged places and their residents. Quite the opposite—just as these communities are often “last in” for economic opportunity during boom times, they seem to be “first out” when things shift into reverse.

But the specific nature of the current crisis also poses added challenges for high-poverty communities.

That is because many of these areas were ground zero for risky subprime lending over the last several years. In many of the case-study communities in the report, half or more of recent home mortgages were high-cost subprime loans.

Now, they are on the front lines of the fallout. Our calculations of HUD data show that census tracts where the poverty rate was at least 40 percent in 2000—the conventional definition behind concentrated poverty—have an estimated foreclosure rate over 9 percent, roughly double the nationwide average.

This poses both an immediate and a long-term threat to what little stability these communities possess.

Over the short term, these areas face problems associated with heightened property neglect, vacancy, and abandonment. Not only can those conditions breed crime and disorder, but also they can accelerate a process of further disinvestment from high-poverty neighborhoods, which are all too familiar with that cycle of decline.

Over the long run, the public sector will work to return foreclosed properties in these neighborhoods to productive use. But there is a danger that we may once again re-concentrate poverty in these neighborhoods if these assets are not managed and deployed strategically.

In sum, recent trends and a perilous road ahead merit a meaningful policy response to the challenges facing areas of concentrated poverty and their residents.

This brings me to my second point, which is that near-term policy choices can ameliorate the impacts of the current crisis on areas of concentrated poverty.

In less than 50 days, a new administration will take office in Washington, facing economic challenges of a scale not seen in decades.

The president-elect and his advisors have signaled that they are ready to “do what it takes” to stimulate the economy, create and protect jobs, and catalyze investment in new sectors to spur longer-term growth.

I believe that policies advanced by the new administration and Congress in the first few weeks of the new year, if designed and executed well, could matter greatly for the fortunes of the nation’s high-poverty communities.

First, a comprehensive strategy to deal with the foreclosure crisis is sorely needed. This would feature, first and foremost, a broad plan to forestall the rising tide of mortgages, including many in high-poverty communities, headed for default due to falling home prices, economic dislocation, and poor underwriting.

However, even a sweeping, generous approach will not prevent the inevitable. Especially in high-poverty areas, more loans will fall into foreclosure, more people will lose their homes, and fiscally-strapped local governments will be left to manage the consequences of increasing vacancy and abandonment.

The Neighborhood Stabilization Program enacted by Congress and the Bush administration during the summer of 2008 represents an initial effort to arm state and local leaders with the resources to tackle the neighborhood impacts of rising foreclosures.

But significant deterioration of the economy in the intervening months suggests that the problem may now be of a much larger scale than was originally anticipated. What’s more, many local governments lack the capacity, expertise, and legal authorities to use existing or additional resources strategically.

So the new administration, and HUD in particular, will need to consider a further round of response—using some mix of fiscal, regulatory, capacity-building, and bully pulpit powers—to help cash-strapped local governments mitigate the impacts of foreclosure on their most vulnerable communities.

Second, there seems to be wide agreement that the economic recovery package should include a series of measures that inject money into the economy right away.

So the package will provide immediate assistance to families, communities, and governments hit hard by the downturn, in the likely form of extended unemployment and increased food stamp benefits, increased state and local aid, and low- to middle-income tax cuts, spending designed to make a real economic impact in the next several months.

A couple of details here are of real consequence to communities of concentrated poverty.
  • Income tax cuts included in the package should be refundable, like the Earned Income Tax Credit, or EITC. Boosting the EITC, for instance, would provide additional help to workers most likely to be hit hard by the downturn, and target resources to families most likely to spend the additional cash immediately. As the report shows, at least 30 percent, and as many as 60 percent, of families in the case-study communities today benefit from the EITC.
  • Unemployment insurance benefits should be extended, but also modernized. As the case studies showed, work among residents of high-poverty communities is often seasonal or part-time, even in a good economy. As a result, many laid-off workers from poor areas in several states may not qualify for benefits due to outmoded eligibility rules. Therefore, in addition to extending weeks of eligibility for UI, Congress and the new administration might also consider providing incentives to states to expand the pool of workers who could benefit from the program during the downturn.
Third, infrastructure will clearly figure prominently among the spending priorities in the recovery package.

Yet there is a significant risk that focusing dollars primarily on projects that states deem “shovel-ready,” as has been discussed, will repeat mistakes of the past. It would primarily subsidize road-building at the metropolitan fringe, and do little to enhance long-run economic growth, or provide better opportunities for low-income people and the places they live.

Infrastructure investments of the magnitude under consideration must not only create jobs, but also promote inclusive and sustainable growth. That means setting strict criteria for federal investment, including a real assessment of costs and benefits that considers economic, environmental, and social impacts. As the report shows, poor infrastructure often acts as a barrier to the economic integration of high-poverty communities into their larger municipal and regional areas.

To that end, we should also consider providing direct support for large, cash-strapped municipal governments that they could use to modernize and preserve roads, bridges, transit, water, sewer, and perhaps even broadband infrastructure. At the same time, we should hold them and grantees at all other levels of government accountable for connecting younger, disadvantaged workers and communities to the jobs that result.

In short, what happens in the first several weeks of the new year here in Washington could, if structured properly, provide meaningful support and opportunity for low-income areas and their residents. At a minimum, this might avert the sort of backsliding these communities suffered during the much milder recession we experienced earlier this decade.

So that brings me to my third and final point, which is that, over the longer term, we must advance policies that actively link the fortunes of poor communities to those of their regional neighbors. As you probably heard or read, our division at Brookings is named the “Metropolitan Policy Program.”

Our mission is to provide decision makers with cutting-edge research and policy ideas for improving the health and prosperity of cities and metropolitan areas.

You might ask, why metropolitan? After all, this is not a term that most Americans use, think about, or even recognize, even though 85 percent of us live in metropolitan areas. A friend of the program once told us that it sounded like a combination of “metrosexual” and “cosmopolitan.” Not exactly what we were going for.

More specifically, what relevance does “metropolitan” have for addressing the challenges of concentrated poverty?

Well, the report points to skills and employability problems that hold back residents of high-poverty communities. If the route to improving the lives of families affected by concentrated poverty runs in part through the labor market, then we must devise strategies and solutions that respect and respond to the geography of that market—which is metropolitan.

The report also points to housing problems, of various stripes, that segregate the poor in these communities and make their daily lives more difficult. Housing markets, too, are metropolitan—and housing dynamics in the wealthiest parts of each metro are inextricably linked to those in the poorest parts.

The fact is, our national economy—and that of most industrialized nations—is largely the aggregate of its individual metropolitan economies. In the United States, the 100 largest metro areas account for 12 percent of our land mass, hold 65 percent of our residents, and generate three-quarters of our Gross Domestic Product. They possess even greater shares of our innovative businesses, our most knowledgeable workers, the critical infrastructure that connects us to the global economy, and the quality places that attract, retain, and enhance the productivity of workers and firms.

And as the report shows, regions—both metropolitan and non-metropolitan—each retain distinctive clusters that shape their individual contributions to the national economic pie. Photonics in Rochester. Hospitality and tourism in Atlantic City and Miami. Manufacturing in Albany, Georgia. Agriculture and business services in Central California. These clusters do not possess equal strength or equal potential, but they define the starting point for thinking about the regional economic future of these areas, and economic opportunities for their residents.

Not only are the assets of our economy fundamentally metropolitan… increasingly, our challenges are, too. In 2006, we found that for the first time, more than half of the poor in metropolitan America lived in suburbs, not cities. While poor suburban families don’t yet concentrate at the levels seen in the communities in this report, they are trending in this direction. Between 1999 and 2005, the number of suburban tax filers living in “moderate” working poverty communities rose by nearly 50 percent.

So what does recognition of our metropolitan reality imply for longer-run policies to help the poorest communities and their residents?

Bruce has argued elsewhere that our nation must embrace a new, unified framework for addressing the needs of poor neighborhoods and their residents. He has termed this, Creating Neighborhoods of Choice and Connection. Neighborhoods of choice are communities in which lower-income people can both find a place to start, and as their incomes rise, a place to stay. They are also communities to which people of higher incomes can move, for their distinctiveness, amenities, or location. This requires an acceptance of economic integration as a goal of housing and neighborhood policy.

Neighborhoods of connection are communities that link families to opportunity, wherever in the metropolis that opportunity might be located. This requires a much more profound commitment to the “educational offer” in these communities and the larger areas of which they are a part. It also requires a pragmatic vision of the “geography of opportunity” with regard to jobs, housing, and other choices.

If we take this vision seriously, then our interventions must operate within, and relate to, the metro geography of our economy. This means viewing the conditions and prospects of poor areas through the lens of the broader economic regions of which they are a part, and explicitly gearing policy in that direction.

A simple example relates to the geography of work. In the Springfield, Massachusetts metro area, roughly 30 percent of the region’s jobs still cluster in the neighborhoods close to downtown, including Old Hill and Six Corners. In the Miami metro area, by contrast, only 9 percent of the region’s jobs lie close to its downtown, implying transportation needs of a quite different scale for Little Haiti’s residents. In response, we should empower metropolitan transportation planners to address the unique nature of these spatial divides, and measure their performance on creating inclusive systems that overcome them.

This metro lens applies to workforce development as well. Labor market intermediaries are some of the most promising mechanisms for bridging the information and skills divide between poor communities and regional economic opportunity. One of the highest performers, the Wisconsin Regional Training Partnership, works in the home region of one of our case-study communities, Milwaukee. If workforce policies and funding at all levels of government were to emphasize employer partnerships, provide greater flexibility, and reward performance, we could grow more capable institutions like these that serve the needs of low-income communities and regional firms alike.

A metro perspective can apply to school reform as well. We have called for a new focus at the Department of Education on supporting proven, successful educational entrepreneurs—charter management organizations like KIPP, human capital providers like Teach for America, student support organizations like College Summit. The demand for these entrepreneurial solutions extends well beyond the highest-poverty neighborhoods. Federal education policy should consider investing in these entrepreneurs at the metropolitan scale, to aggregate a critical mass of those organizations, serve a significant percentage of the area’s children, and drive positive changes in the entire public education environment.

Finally, our housing policies must embrace metro-wide economic diversity, which is a hallmark of neighborhoods of choice and connection.

This means expanding housing opportunities for middle-income families in deprived neighborhoods. We simply cannot continue to cluster low-income housing in already low-income areas, perpetuating the sort of economic segregation evident in so many of the case-study communities, and thereby consign another generation to a childhood amid concentrated poverty. Likewise, we must guard against the possibility that the current foreclosure crisis leads to a re-concentration of poor households in neighborhoods that were just beginning to achieve greater economic diversity.

But this is a two-way street. It also means creating more high-quality housing opportunities for low-income families in growing suburban job centers. Requiring or providing incentives to metropolitan areas to engage in regional housing planning, alongside regional transportation planning, may be a necessary first step. Those plans could also apply a more rational screen to the development choices that have fueled sprawl, and thereby added to the social and economic isolation of the lowest-income communities.

Let me end where I began.

This is both an auspicious and a challenging moment at which to wrestle with the problem of concentrated poverty in America.

Auspicious in that we are approaching the dawn of a new government in Washington that has signaled concern for our nation’s low-income residents and communities, recognition that metropolitan economies are the engines of our prosperity, and a pragmatic commitment to doing what works.

Challenging in that making progress against concentrated poverty, and improving opportunity for those in its midst, is a tall order when the macroeconomy isn’t cooperating.

But the current economic climate is not an excuse to avoid this problem; rather, it’s an imperative to act, strategically and purposefully.

That means doing the big near-term things the right way, so that low-income communities and their residents do not bear an excessive brunt of the downturn, and so that they participate meaningfully in our eventual economic recovery.

And it means getting the long-term vision right, so that policy advances sustainable, metro-led solutions that connect poor neighborhoods and poor families to opportunity in the wider economy around them.

The Federal Reserve System has tremendous, well-earned credibility for understanding and advancing dialogue around the future of our nation’s economic regions. I look forward to continuing to work with the Fed to increase public understanding of concentrated poverty, and to make tackling it a crucial element of strategies to promote regional and national prosperity.

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Publication: Federal Reserve Board of Governors
     
 
 




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How to Reverse the Trend of Concentrated Poverty

One of Cleveland's neighborhoods made the Washington scene earlier this month.

Alas, it wasn't up for a multibillion-dollar bailout.

Instead, the Central neighborhood and 15 other communities across the United States were the centerpiece of a new report published by the Federal Reserve System and the Brookings Institution.

These communities share a simple, disappointing characteristic. In 2000 - the peak of the last economic boom - at least 40 percent of their residents lived below the federal poverty line. That was about three times the national average.

No American needs to look very far to find places like these. Concentrated poverty affects manufacturing cities like Cleveland, and Albany, Ga.; immigrant gateways like Miami, Fla., and Fresno, Calif.; and rural areas like eastern Kentucky and northern Montana. About 4 million poor Americans live in these areas of extremely high poverty.

How did this happen? Policy decisions made decades ago - like clustering thousands of the Cleveland region's public housing units in the Central neighborhood - helped shape their trajectory. So too did economic changes, like the long-run loss of decent-paying manufacturing jobs, or - in rural areas - mining and agricultural jobs.

By allowing poverty to concentrate in these places, we've magnified the problems their poor residents face. For instance, many low-income children in these communities start school not yet "ready to learn." On top of that, though, they attend schools burdened with lots of other poor kids who face similar challenges, and deal with higher levels of neighborhood crime that affect their mental health and educational performance.

The challenges of concentrated poverty extend to many other areas: low adult work-force skills and employment, poor-quality housing and a lack of investment by mainstream businesses.

And that's in a good economy. Today, Central - and thousands of other high-poverty communities like it across the nation - faces even more significant challenges as the United States enters what may be its worst recession in decades.

So what should Washington do for these places and their residents in the face of such difficult circumstances?

First, we must not lose sight of them in the economic turmoil. That's especially true because the roots of this crisis, in the subprime mortgage market, grew in many very poor neighborhoods like Central. As a result, home foreclosure rates in high-poverty communities are more than double the national average.

To stabilize these hard-hit communities, Washington must adopt new measures to prevent foreclosure and provide additional resources and guidance for state and local governments to help them cope with the rising numbers of vacant properties.

Second, a forthcoming economic stimulus package from Washington that could amount to half a trillion dollars or more should not bypass these neighborhoods and their residents.

That implies the need for immediate federal aid to sustain basic public services in states like Ohio, where the deficit for this year already tops $1 billion. It also suggests providing direct assistance to struggling workers and their families, through enhanced unemployment benefits and tax credits.

At the same time, the infrastructure dollars in the package - which could amount to more than $100 billion - must be spent strategically. States should not be permitted to go on expanding highway capacity at the metropolitan fringe, to the detriment of poor communities near the urban core. Cities like Cleveland, and metropolitan organizations like the Northeast Ohio Areawide Coordinating Agency, should get their fair share of new transportation funds. And funds should be set aside for training programs that provide low-income residents with a pathway to decent jobs.

Third, we have to rethink neighborhood policy over the longer term.

For too long, government has funded housing, schools and economic development in these communities as though they were islands unto themselves.

That's not how the real economy works. These neighborhoods are part of larger regional labor and housing markets. Decisions made across the Cleveland region, such as where firms locate new jobs, or where families buy homes and send their kids to school, ultimately dictate whether neighborhoods like Central can become real neighborhoods of choice and better connected to economic opportunity.

Public policy must leverage that real economy for the benefit of lower-income residents, by building on smart regional strategies like the Fund for Our Economic Future and WIRE-Net in Northeast Ohio. It should diversify housing in poor communities, but also encourage affordable housing development in wealthier parts of metropolitan areas.

Cleveland's Central neighborhood, like other high-poverty communities across the United States, faces a tough road ahead. Short-term opportunities, and long-term strategies, are needed to help its next generation of residents overcome the challenges of concentrated poverty.

Authors

Publication: Cleveland Plain Dealer
     
 
 




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Supermarket Access in Low-Income Areas

The Brookings Metropolitan Policy Program and The Reinvestment Fund (TRF) performed a detailed analysis of supermarket access in 10 metropolitan areas, and the results are discussed in a new video, “Getting to Market."

Results from the analysis encourage users to view the locations of, and generate reports about, low-supermarket-access communities within the 10 metropolitan areas. This is highly useful data for those working at the national and local levels to tackle the problem of inadequate access through public policy and private investment. You can also access these data alongside any of PolicyMap’s 10,000 data indicators and full functionality at www.policymap.com

For those interested in other metropolitan areas, TRF has made available a nationwide analysis of low-supermarket-access communities at www.trfund.com.

Media Memo »


Profiles of 10 Metropolitan Areas (PDFs)

 Atlanta, GA  Little Rock, AR
 Baltimore, MD  Los Angeles, CA
 Cleveland, OH  Louisville, KY
 Jackson, MS  Phoenix, AZ
 Las Vegas, NV  San Francisco, CA

Below are samples of data found on our interactive map


Map of the San Francisco area showing Low Access Areas with the access score for the area. Access scores are the degree to which a low/moderate-income community's residents are underserved by supermarkets.


Map of Baltimore showing Low Access Areas against the estimated percentage of families that live in poverty.


Map of Cleveland showing Low Access Areas against the estimated population above the age of 65.

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Challenges Associated with the Suburbanization of Poverty: Prince George's County, Maryland

Martha Ross spoke to the Advisory Board of the Community Foundation for Prince George’s County, describing research on the suburbanization of poverty both nationally and in the Washington region.

Despite perceptions that economic distress is primarily a central city phenomenon, suburbs are home to increasing numbers of low-income families. She highlighted the need to strengthen the social service infrastructure in suburban areas.

Full Presentation on Poverty in the Washington-Area Suburbs » (PDF)

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