President Barack Obama’s visit to the George Herbert Walker Bush Library in College Station, Texas this week highlights the crucial role of America’s volunteer traditions in addressing critical issues at home and abroad. The two presidents will commemorate the 20^th anniversary of the Points of Light movement, championed by the 41^st president, and advance the United We Serve initiative of President Obama.

Michelle Nunn, CEO of Points of Light Institute and daughter of former Democratic Senator Sam Nunn noted in Huffington Post that “demand, idealism and presidential impact are leading American volunteerism to its…most important stage – the movement of service to a central role in our nation’s priorities.”

The bipartisan nature of America’s vibrant service movement is also reflected in the landmark Kennedy-Hatch Serve America Act signed into law by President Obama earlier this year and pending Global Service Fellowship legislation introduced by Senators Feingold and Voinovich.

In a recent Brookings Global Views policy brief, “International Volunteer Service: A Smart Way to Build Bridges,” Lex Rieffel, Kevin Quigley and I articulate policy options for the new administration to advance President Obama’s call for engaging service on the global level. President Obama’s speech in Cairo on June 4 called for turning “dialogue into interfaith service, so bridges between peoples lead to action – whether it is combating Malaria in Africa, or providing relief for a natural disaster.”

Following the president’s Cairo speech, the administration assembled a laudable Global Engagement Initiative across the administration to implement and track results in scaling up initiatives of service and interfaith action. The potency of coupling American service with foreign assistance was documented in Indonesia and Bangladesh through successive Terror Free Tomorrow polls showing increased favorable ratings for our nation and decreased support for terrorism.

The Building Bridges Coalition has organized an impressive array of over 210 organizations dedicated to expanding American volunteerism internationally, as part of a new “Service World” policy coalition gearing up for the 50^th anniversary of the Peace Corps. This new “international service 2.0” incorporates NGOs and faith-based groups, universities and corporations as new development actors advocating multilateral service and achieving impacts on issues ranging from Malaria to peacebuilding and climate change.

A Foundation Strategy Group report commissioned by Brookings and Pfizer, “Volunteering for Impact” assessed best practices in the increasing array of international corporations engaging volunteers such as IBM’s Corporate Service Corps, GE Volunteers and Pfizer’s Global Health Fellows.

Around the globe, initiatives such as Cross Cultural Solutions and an emerging global service and peacebuilding alliance in hot spots from Kenya to Mindanao are giving substance to the president’s call in Cairo. The collaboration of Presidents Clinton and G.H.W. Bush on humanitarian assistance after the tsunami, and this week’s service dedication with the Obama administration and former President Bush, bode well for the bipartisan extension of our nation’s noble voluntary service traditions in the international context where they are urgently needed.

      

       

Dear Members of the Senate,

As you know, the Senate has debated the merits of the filibuster and related procedural rules for over two centuries. Recently, several senators who are advocating changes to Senate Rule XXII have renewed this discussion. We write this letter today to clarify some of the common historical and constitutional misperceptions about the filibuster and Rule XXII that all too often surface during debates about Senate rules.

First, many argue that senators have a constitutional right to extended debate. However, there is no explicit constitutional right to filibuster.^[1] In fact, there is ample evidence that the framers preferred majority rather than supermajority voting rules. The framers knew full well the difficulties posed by supermajority rules, given their experiences in the Confederation Congress under the Articles of Confederation (which required a supermajority vote to pass measures on the most important matters). A common result was stalemate; legislators frequently found themselves unable to muster support from a supermajority of the states for essential matters of governing. In the Constitution, the framers specified that supermajority votes would be necessary in seven, extraordinary situations -which they specifically listed (including overriding a presidential veto, expelling a member of the Senate, and ratifying a treaty). These, of course, are all voting requirements for passing measures, rather than rules for bringing debate to a close.

Second, although historical lore says that the filibuster was part of the original design of the Senate, there is no empirical basis for that view. There is no question that the framers intended the Senate to be a deliberative body. But they sought to achieve that goal through structural features of the chamber intended to facilitate deliberation -such as the Senate's smaller size, longer and staggered terms, and older members. There is no historical evidence that the framers anticipated that the Senate would adopt rules allowing for a filibuster. In fact, the first House and the first Senate had nearly identical rule books, both of which included a motion to move the previous question. The House converted that rule into a simple majority cloture rule early in its history. The Senate did not.

What happened to the Senate's previous question motion? In 1805, as presiding officer of the Senate, Vice President Aaron Burr recommended a pruning of the Senate's rules. He singled out the previous question motion as unnecessary (keeping in mind that the rule had not yet routinely been used in either chamber as a simple majority cloture motion). When senators met in 1806 to re-codify the rules, they deleted the previous question motion from the Senate rulebook. Senators did so not because they sought to create the opportunity to filibuster; they abandoned the motion as a matter of procedural housekeeping. Deletion of the motion took away one of the possible avenues for cutting off debate by majority vote, but did not constitute a deliberate choice to allow obstruction. The first documented filibusters did not occur until the 1830s, and for the next century they were rare (but often effective) occurrences in a chamber in which majorities generally reigned.

Finally, the adoption of Rule XXII in 1917 did not reflect a broad-based Senate preference for a supermajority cloture rule. At that time, a substantial portion of the majority party favored a simple majority rule. But many minority party members preferred a supermajority cloture rule, while others preferred no cloture rule at all. A bargain was struck: Opponents of reform promised not to block the rule change and proponents of reform promised not to push for a simple majority cloture rule. The two-thirds threshold, in other words, was the product of bargaining and compromise with the minority. As has been typical of the Senate's past episodes of procedural change, pragmatic politics largely shaped reform of the Senate's rules.

We hope this historical perspective on the origins of the filibuster and Rule XXII will be helpful to you as matters of reform are raised and debated. Please do not hesitate to contact us if we can provide additional clarification.

Very truly yours,

Sarah Binder
Senior Fellow, Governance Studies, The Brookings Institution
Professor of Political Science, George Washington University

Gregory Koger
Associate Professor of Political Science, University of Miami

Thomas E. Mann
W. Averell Harriman Chair & Senior Fellow, Governance Studies, The Brookings Institution

Norman Ornstein
Resident Scholar, American Enterprise Institute for Public Policy Research

Eric Schickler
Jeffrey & Ashley McDermott Endowed Chair & Professor of Political Science, University of California, Berkeley

Barbara Sinclair
Marvin Hoffenberg Professor of American Politics Emerita, University of California, Los Angeles

Steven S. Smith
Kate M. Gregg Distinguished Professor of Social Sciences & Professor of Political Science, Washington University

Gregory J. Wawro
Deputy Chair & Associate Professor of Political Science, Columbia University

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• Download the Original Letter

      

Today could have been the day when Senate Democrats went nuclear – reining in minority party abuse of the filibuster with a simple majority vote.  That would have been my Super Bowl.  Instead, the Senate is poised to adopt a bipartisan set of modest (many say, meager) changes to the Senate’s cloture rule.   More like the Famous Idaho Potato Bowl, I say.

As many have noted (for starters, Ezra Klein here and Jonathan Bernstein here), the proposed changes to the Senate’s Rule 22 fall far short of what reformers had hoped for.  Much blame has been heaped on Harry Reid, the Democratic leader, and on a few senior Democrats, highlighting their resistance to abandoning the Senate’s sixty-vote threshold for bringing the chamber to a vote.  The reforms are modest, largely finding ways of speeding up the Senate once both parties have agreed on the matter at hand (for instance on the way to advancing a measure to the floor or after cutting off debate on a nomination).  Even if the changes may seem to many like small potatoes, I think there’s more to be gleaned from the Senate’s brush with reform.

First, take a little, give a little.  Today’s rule changes remind us that there is no free lunch when it comes to Senate reform.  That hurdle is built into Rule 22, given its requirement that 67 senators consent to a vote on efforts to reform Rule 22.  In the absence of majority willing to bear the costs of asserting the majority’s right to change its rules, Senate reform is necessarily bipartisan and incremental.  Reforms must secure the consent of the minority, or be packaged with changes judged equally important to the opposition.  (Recall that even when reformers reduced cloture to 60 votes in 1975, they paid a price: 67 votes would still be required to end debate on changing Rule 22.)  Today’s reforms allow a majority to circumvent filibusters of motions to proceed to legislative measures.  In return, the majority pays a price each time: The minority is guaranteed votes on two amendments, whereas previously recent leaders might have precluded all amendments by immediately “filling the tree.”  To be sure, this potentially dilutes the value of the rule change for the majority.   But concessions are dictated by the Senate’s inherited rules.  (And, of course, nothing is that simple when it comes to Senate rules; the majority may yet fill the tree, at least after the disposition of the minority’s amendments.)

Second, I suspect we might be underestimating the importance of a non-debatable motion to proceed for the majority party in a period of partisan polarization.  Judging from the increase in filibusters on the motions to proceed in recent years, minority parties have fought hard to keep bills off the floor that they oppose on policy or political grounds.   So long as the motion to proceed could be filibustered, majority and minority parties shared agenda-setting powers.  Today’s change grants the majority a slightly stronger hand in choosing the chamber agenda.  To be sure, the minority can still filibuster the bill and amendments beyond those newly guaranteed, but the reform undermines the minority’s ability to throw the majority off course.  Take immigration policy, for example.  Filibusters of the motion to proceed have kept the DREAM Act off the Senate floor in recent years.  Minority influence over the Senate’s agenda is diminished with today’s reform.

Third, these are leader-driven reforms, shaped by the unique burdens carried by the majority and (sometimes) minority leaders.  For example, the reforms speed up post-cloture debate on some judicial and executive branch nominations, and allow the chamber to hurry onto cloture votes on motions to proceed to legislative business when the minority offers a modicum of support.  No surprise that these housekeeping changes elicit little enthusiasm.   These changes don’t make it any easier for a majority to break sizable minority opposition.  And they potentially make it harder for rank and file senators to exploit the rules in pursuit of their own policy goals.  But from leaders’ perspectives, the reforms rein in the excesses of rank and file dissent when a bipartisan group is ready to move ahead.  As one Senate Democrat aide confided, “that’s all Reid ever really wanted.”

Finally, this episode highlights the limitation of the Constitutional option and other “reform-by-ruling” strategies.  There appears to have been a majority or near-majority support for securing only very limited reform of Rule 22.  Senators seem unwilling to use the tactic for a major overhaul of the Senate’s cloture rule—in part because of the fear of minority retaliation, in part because the filibuster rule likely serves as the foundation of senators’ power.   To be sure, Harry Reid aggressively used reform-by-ruling in the fall of 2011 to secure smaller changes to Rule 22 (as did Robert Byrd in the 1980s).  But we have to reach back nearly forty years to the 1975 reforms to find a Senate majority willing to go nuclear to impose major changes to Rule 22.  (Even then, reformers proceeded without the support of the majority leader, Mike Mansfield.)  Perhaps senators see the consequences of weakening Rule 22 in a different light when the parties polarize over policy problems and solutions, with senators nervous about curtailing extended debate when the tables turn on their majority.  Regardless, so long as majorities will only form to impose  minor reform by majority vote, those majorities will be forced to live under supermajority rules that daily frustrate their policy and political agendas.

And in the Senate’s world, those frustrating days can last for weeks!

       

I’m late to the conversation about whether or not Republican efforts to insist on sixty votes for cloture on Chuck Hagel’s nomination as Secretary of Defense constitutes a filibuster. Bernstein’s earlier piece ("This is what a filibuster looks like") and Fallows’ recent contribution provide good, nuanced accounts of why Republican tactics amount to a filibuster, even if some GOP senators insist otherwise. In short, the duck test applies: If it looks like a duck, swims like a duck and quacks like a duck, then …. it’s a filibuster!

Still, I think there’s more to be said about the politics and implications of the Hagel nomination. A few brief thoughts:

First, let’s put to rest the debate about whether insisting on sixty votes to cut off debate on a nomination is a filibuster or, at a minimum, a threatened filibuster. It is. Even if both parties have moved over the past decade(s) to more regularly insist on sixty votes to secure passage of major (and often minor) legislative measures and confirmation of Courts of Appeals nominees, we shouldn’t be fooled by the institutionalization—and the apparent normalization—of the 60-vote Senate. Refusing to consent to a majority’s effort to take a vote means (by definition) that a minority of the Senate has flexed its parliamentary muscles to block Senate action. I think it’s fair to characterize such behavior as evidence of at least a threatened filibuster—even if senators insist that they are holding up a nomination only until their informational demands are met.

Second, there’s been a bit of confusion in the reporting about whether filibusters of Cabinet appointees are unprecedented. There appears to have been no successful filibusters of Cabinet appointees, even if there have been at least two unsuccessful filibusters against such nominees. (On two occasions, Cabinet appointees faced cloture votes when minority party senators placed holds on their nominations—William Verity in 1987 and Kempthorne in 2006. An EPA appointee has also faced cloture, but EPA is not technically cabinet-level, even if it is now Cabinet-status). Of course, there have been other Cabinet nominees who have withdrawn; presumably they withdrew, though, because they lacked even majority support for confirmation. Hagel’s situation will be unprecedented only if the filibuster succeeds in keeping him from securing a confirmation vote.

Third, using cloture votes as an indicator of a filibuster underestimates the Senate’s seeping super-majoritarianism. (Seeping super-majoritarianism?! Egads.) At least two other recent Cabinet nominations have been subjected to 60-vote requirements: Kathleen Sebelius in 2009 (HHS) and John Bryson (Commerce) in 2011. Both nominees faced threatened filibusters by Republican senators, preventing majority leader Reid from securing the chamber’s consent to schedule a confirmation vote—until Reid agreed to require sixty votes for confirmation. The Bryson unanimous consent agreement (UCA) appears on the right, an agreement that circumvented the need for cloture. Embedding a 60-vote requirement in a UCA counts as evidence of an attempted filibuster, albeit an unsuccessful one. After all, other Obama nominees (such as Tim Geithner) were confirmed after Reid negotiated UCAs that required only 51 votes for confirmation, an agreement secured because no Republicans were threatening to filibuster.

Finally, what are the implications for the Hagel nomination? If Republicans were insisting on sixty votes on Senator Cornyn’s grounds that “There is a 60-vote threshold for every nomination,” then I bet Reid would have been able to negotiate a UCA similar to Sebelius’s and Bryson’s. But Hagel’s opponents see the time delay imposed by cloture as instrumental to their efforts to sow colleagues’ doubts about whether Hagel can be confirmed (or at a minimum to turn this afternoon’s cloture vote into a party stand to make their point about Benghazi). Of course, it’s possible that the time delay will work to Democrats’ benefit if they can make headlines that GOP obstruction puts national security at risk. (Maybe Leon Panetta should have jetted to his walnut farm to make the point before the cloture vote.) Whatever the outcome, the Hagel case reminds us that little of the Senate’s business is protected from the intense ideological and partisan polarization that permeates the chamber and is amplified by the chamber’s lax rules of debate and senators’ lack of restraint. Filibustering of controversial Cabinet nominees seems to be on the road to normalization—even if Hagel is ultimately confirmed.

       

Sen. Rand Paul has just completed his nearly thirteen hour filibuster against John Brennan's nomination to head the CIA. Breaking off his filibuster (because, he inferred, he had to pee), Rand was heralded for bringing back the "talking filibuster." There was much written (and tweeted) about his filibuster, which began with Paul’s dramatic:

"I will speak until I can no longer speak…I will speak as long as it takes, until the alarm is sounded from coast to coast that our Constitution is important, that your rights to trial by jury are precious, that no American should be killed by a drone on American soil without first being charged with a crime, without first being found to be guilty by a court."

I thought I would add a few late-night thoughts in honor of this day spent with C-Span 2 humming in my ear.

First, I think Jon Bernstein’s reaction to the filibuster was right on the mark.  There’s been a lot of enthusiasm for the talking filibuster today, from Ezra Klein's "If more filibusters went like this, there’d be no reason to demand reform," to Josh Marshall’s, "This is a good example of why we should have the talking filibuster and just the talking filibuster." But Bernstein raises a critical point: "Today’s live filibuster shows again just how easy it is to hold the Senate floor for an extended period." The motivation of recent reformers has been to reduce filibustering by raising the costs of obstruction for the minority. In theory, making the filibuster more burdensome to the minority—while putting their views under the spotlight—should make filibusters more costly and more rare. (Paul did note in coming off the Senate floor tonight that his feet hurt…) But as Bernstein points out, Paul believes in his cause, and it plays well with his constituencies. On the physical front, the tag-team of GOP senators rallying to Paul's cause also lessened the burden on Paul (as would have a pair of filibuster-proof shoes). That said, today's filibuster was a little unusual. The majority seemed unfazed by giving up the day to Paul’s filibuster, perhaps because the rest of Washington was shutdown for a pseudo-snow storm. Moreover, the Brennan nomination had bipartisan support, with Reid believing there were 60 senators ready to invoke cloture.  In short, today's episode might not be a great test case for observing the potential consequences of reform.

Second, keep in mind that this was a double-filibuster day. The nomination of Caitlin Halligan for the DC Court of Appeals was blocked, failing for the second time to secure cloture. With 41 Republican senators voting to block an up or down confirmation vote on Halligan, an often-noted alternative reform (which would require 41 senators to block cloture instead of 60 senators to invoke it) would have made no difference to the outcome. And what if the minority had been required to launch a talking filibuster to block Halligan’s nomination? Reid might have been willing to forfeit the floor time to Paul today.  But Reid would unlikely have wanted to give up another day to Halligan’s opponents. As Steve Smith has argued, the burden of talking filibusters also falls on the majority, which typically wants to move on to other business. "Negotiating around the filibuster," Smith has argued, "would still be common."  On a day with two successful minority filibusters (at least in consuming floor time and deterring the majority from its agenda), we can see why the majority might be reticent to make senators talk.

Third, let's not lose sight of the target of Rand's filibuster: The head of the CIA.  Although the chief spook is not technically in the president’s cabinet, the position certainly falls within the ranks of nominations that have typically been protected from filibusters.  Granted, that norm was trampled with the Hagel filibuster for Secretary of Defense. But rather than seeing the potential upside of today's talking filibuster, I can't help but see the downside: In an age of intense policy and political differences between the parties, no corner of Senate business is immune to filibusters.

All that said, what's not to like about a mini demonstration of a real live filibuster?!  Perhaps Paul's late day Snickers break was cheating.  But it was a good C-Span type of day overall, for filibuster newbies to Franklin Burdette devotees. Even Dick Durbin well after midnight seemed to be enjoying the fray. Perhaps there’s a silver lining for talking filibusters after all.

       

It seems the Senate could have a really hot summer. Majority leader Harry Reid (D-NV) has reportedly threatened to “go nuclear” this July—meaning that Senate Democrats would move by majority vote to ban filibusters of executive and judicial branch nominees. According to these reports, if Senate Republicans block three key nominations (Richard Cordray to head the Consumer Financial Protection Bureau, Thomas Perez at Labor, and Gina McCarthy at EPA), Reid will call on the Democrats to invoke the nuclear option as a means of eliminating filibusters over nominees.

Jon Bernstein offered a thoughtful reaction to Reid’s gambit, noting that Reid’s challenge is to “find a way to ratchet up the threat of reform in order to push Republicans as far away from that line as possible.” Jon’s emphasis on Reid’s threat is important (and is worth reading in full).  Still, I think it’s helpful to dig a little deeper on the role of both majority and minority party threats that arise over the nuclear option.

Before getting to Reid’s threat, two brief detours. First, a parliamentary detour to make plain two reasons why Reid’s procedural gambit is deemed “nuclear.” First, Democrats envision using a set of parliamentary moves that would allow the Senate to cut off debate on nominations by majority vote (rather than by sixty votes). Republicans (at least when they are in the minority) call this “changing the rules by breaking the rules,” because Senate rules formally require a 2/3rds vote to break a filibuster of a measure to change Senate rules. The nuclear option would avoid the formal process of securing a 2/3rds vote to cut off debate; instead, the Senate would set a new precedent by simple majority vote to exempt nominations from the reach of Rule 22. If Democrats circumvent formal rules, Republicans would deem the move nuclear. Second, Reid’s potential gambit would be considered nuclear because of the anticipated GOP reaction: As Sen. Schumer argued in 2005 when the GOP tried to go nuclear over judges, minority party senators would “blow up every bridge in sight.” The nuclear option is so-called on account of the minority’s anticipated parliamentary reaction (which would ramp up obstruction on everything else).

A second detour notes simply that the exact procedural steps that would have to be taken to set a new precedent to exempt nominations from Rule 22 have not yet been precisely spelled out.  Over the years, several scenarios have been floated that give us a general outline of how the Senate could reform its cloture rule by majority vote. But a CRS report written in the heat of the failed GOP effort to go nuclear in 2005 points to the complications and uncertainties entailed in using a reform-by-ruling strategy to empower simple majorities to cut off debate on nominations. My sense is that using a nuclear option to restrict the reach of Rule 22 might not be as straight forward as many assume.

That gets us to the place of threats in reform-by-ruling strategies. The coverage of Reid’s intentions last week emphasized the importance of Reid’s threat to Republicans: Dare to cross the line by filibustering three particular executive branch nominees, and Democrats will go nuclear. But for Reid’s threat to be effective in convincing GOP senators to back down on these nominees, Republicans have to deem Reid’s threat credible. Republicans know that Reid refused by go nuclear last winter (and previously in January 2009), not least because a set of longer-serving Democrats opposed the strategy earlier this year. It would be reasonable for the GOP today to question whether Reid has 51 Democrats willing to ban judicial and executive branch nomination filibusters. If Republicans doubt Reid’s ability to detonate a nuclear device, then the threat won’t be much help in getting the GOP to back down. Of course, if Republicans don’t block all three nominees, observers will likely interpret the GOP’s behavior as a rational response to Reid’s threat. Eric Schickler and Greg Wawro in Filibuster suggest that the absence of reform on such occasions demonstrates that the nuclear option can “tame the minority.”  Reid’s threat would have done the trick.

As a potentially nuclear Senate summer approaches, I would keep handy an alternative interpretation.  Reid isn’t the only actor with a threat: given Republicans’ aggressive use of Rule 22, Republicans can credibly threaten to retaliate procedurally if the Democrats go nuclear.  And that might be a far more credible threat than Reid’s. We know from the report on Reid’s nuclear thinking that “senior Democratic Senators have privately expressed worry to the Majority Leader that revisiting the rules could imperil the immigration push, and have asked him to delay it until after immigration reform is done (or is killed).” That tidbit suggests that Democrats consider the GOP threat to retaliate as a near certainty. In other words, if Republicans decide not to block all three nominees and Democrats don’t go nuclear, we might reasonably conclude that the minority’s threat to retaliate was pivotal to the outcome. As Steve Smith, Tony Madonna and I argued some time ago, the nuclear option might be technically feasible but not necessarily politically feasible.

To be sure, it’s hard to arbitrate between these two competing mechanisms that might underlie Senate politics this summer.  In either scenario—the majority tames the minority or the minority scares the bejeezus out of the majority—the same outcome ensues: Nothing. Still, I think it’s important to keep these alternative interpretations at hand as Democrats call up these and other nominations this spring. The Senate is a tough nut to crack, not least when challenges to supermajority rule are in play.

       

UPDATE 4: Sarah Binder explores the questions, "Why did the Senate go nuclear now, and what will be the consequences for future majorities eager to further curtail the filibuster?"

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UPDATE 3: Thomas Mann writes that "the routinization of the filibuster under Republican Leader Mitch McConnell (R-Ky.) — with a 60-vote threshold for action the new norm, rather than the exception — is a perversion of the intentions of the framers of the Constitution and Senate traditions."

Thomas Mann that "the routinization of the filibuster under Republican Leader Mitch McConnell (R-Ky.) — with a 60-vote threshold for action the new norm, rather than the exception — is a perversion of the intentions of the framers of the Constitution and Senate traditions."

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UPDATE 2: Sarah Binder writes that "this is big" in another new post on Monkey Cage blog, "Boom! What the Senate will be like when the nuclear dust settles." 

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UPDATE: Sarah Binder has a new post on Monkey Cage blog, in which she explains why GOP targeting of the D.C. circuit may not be as unprecedented as some think and why it would be difficult to parse out "acceptable" filibusters from those that aren't. "We'll learn soon enough," Binder writes, "if Democrats have the guts to go [nuclear] and, if so, whether that compels any Republicans to stand down."

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Over the past few weeks, Senate Republicans have filibustered President Obama's three nominees to the Court of Appeals for the D.C. Circuit, claiming alternatively that Obama was trying to pack the court and characterizing the court's caseload as lighter than other circuits. News reports now say that Senate Majority Leader Harry Reid is considering changing the filibuster rule for some executive and judicial nominees, the so-called "nuclear option.

In 2010, Brookings Senior Fellow Sarah Binder, an expert on Congress and congressional history, testified to the Senate that "the filibuster was created by mistake."

We have many received wisdoms about the filibuster. However, most of them are not true. The most persistent myth is that the filibuster was part of the founding fathers’ constitutional vision for the Senate: It is said that the upper chamber was designed to be a slow-moving, deliberative body that cherished minority rights. In this version of history, the filibuster was a critical part of the framers’ Senate.

However, when we dig into the history of Congress, it seems that the filibuster was created by mistake. Let me explain.

The House and Senate rulebooks in 1789 were nearly identical. Both rulebooks included what is known as the “previous question” motion. The House kept their motion, and today it empowers a simple majority to cut off debate. The Senate no longer has that rule on its books.

What happened to the Senate’s rule? In 1805, Vice President Aaron Burr was presiding over the Senate (freshly indicted for the murder of Alexander Hamilton), and he offered this advice. He said something like this. You are a great deliberative body. But a truly great Senate would have a cleaner rule book. Yours is a mess. You have lots of rules that do the same thing. And he singles out the previous question motion. Now, today, we know that a simple majority in the House can use the rule to cut off debate. But in 1805, neither chamber used the rule that way. Majorities were still experimenting with it. And so when Aaron Burr said, get rid of the previous question motion, the Senate didn’t think twice. When they met in 1806, they dropped the motion from the Senate rule book.

Why? Not because senators in 1806 sought to protect minority rights and extended debate. They got rid of the rule by mistake: Because Aaron Burr told them to.

Once the rule was gone, senators still did not filibuster. Deletion of the rule made possible the filibuster because the Senate no longer had a rule that could have empowered a simple majority to cut off debate. It took several decades until the minority exploited the lax limits on debate, leading to the first real-live filibuster in 1837.

Binder makes additional insightful points about the origin and historical uses of the Senate filibuster in that testimony to the Senate Rules and Administration Committee.

She also calls attention to another of Obama's recent judicial nominees: Ronnie White for the U.S. District Court for the Eastern District of Missouri, which is yet another window, she says, on the "evolving wars of advice and consent."

Binder also has data on whether Senate Minority Leader Mitch McConnell and the Senate GOP have "played fair" on President Obama's nominees.

For additional analysis about the filibuster, see Binder's "What Senate cloture votes tell us about obstruction," in which she wrote:

Ultimately, the rise of the 60-vote Senate in a period of polarized parties signals that the minority party has mastered the art of blocking the majority. Sometimes, the minority leader drives the opposition in his conference; other times, he follows it. Regardless, what’s true of the tango is also true of the Senate: It takes two parties to make it look good. The minority party no doubt often feels that the majority leader is too quick to call for a vote, and its members might reasonably oppose cloture on that ground. However, my sense is that far more often, majority leaders resort to cloture when they find themselves unable to cajole the minority party to cooperate. As the Senate GOP conference fractures between pragmatists and ideologues, securing GOP consent will likely become even harder. Counting cloture votes remains an imperfect — but still valid — method of capturing minority efforts to block the Senate.

Get all of Sarah Binder's research and commentary about the Senate filibuster on her bio page.

       

UPDATE: Sarah Binder writes that "this is big" in a new post on Monkey Cage blog, "Boom! What the Senate will be like when the nuclear dust settles." 

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Sen. Harry Reid has gone ahead with the so-called "nuclear option" to attempt to change Senate filibuster rules on some executive branch nominations, passing the rule change with a 52-48 vote. In their Vital Statistics on Congress report, Brookings Senior Fellow Thomas Mann and AEI Resident Scholar Norman Ornstein provide data on the number of attempted Senate cloture votes taken from 1979 to 2012, the 96th to 112th Congresses. The chart below demonstrates the average attempted cloture vote taken by party when that party was in the minority.

For more data on both attempted and successful cloture votes sine 1919, look up table 6-7 in Vital Stats (PDF).

Senior Fellow Sarah Binder, a leading expert on Congress and congressional history who called, in 2010, the Senate filibuster a "mistake," offered a recent analysis of Senate cloture votes, writing that "Counting cloture votes remains an imperfect — but still valid — method of capturing minority efforts to block the Senate."

More recently, Binder wondered whether "Democrats have the guts to go there and, if so, whether that compels any Republicans to stand down."

       

HHS Secretary Kathleen Sebelius may lose the most from the Senate’s rule change on the filibuster—and the Affordable Care Act may be healthier for it. I wrote last month on the FixGov blog that “Republicans are the Reason Secretary Sebelius Won’t Resign” (or be fired). That argument is no longer valid. My claim—the president’s inability to get her successor confirmed because of filibustering Republicans—is nullified by the Senate’s rule change, and the benefits may reach far beyond Obamacare.

The Implications of Filibuster Reform for Healthcare

Problems exist in HHS. No one denies it. However, for many appointees in the Department, the Senate rules served as a life preserver in a torrent of poor implementation, managerial failures, and bad PR. So long as the president faced the prospect of long-term vacancies among appointees overseeing ACA, the HHS leadership would be spared.

Today, that all changed. Moving forward, President Obama needs the support of only 51 Senate Democrats to replace top-level political appointees throughout the executive branch. This offers the president substantial breathing room. Nominees no longer need the support of every Democrat and a scarcely identifiable five Republicans. Instead, nominees can draw the ire of as many as four Democrats and still be confirmed.

Maybe Kathleen Sebelius is not to blame for the botched healthcare marketplace roll out. Maybe her Office did not give the thumbs up for the President to repeat “if you like your plan you can keep it.” Maybe she did not contribute to the poor salesmanship of the legislation from the start. However, if she was to blame (and perhaps if she wasn’t), her days in the president’s cabinet may well be numbered. The same may be true for deputies and other administrators in the Department who oversaw the weaker areas of the roll out of this law.

By repositioning HHS personnel or breathing new life into a Department facing continued struggles, the president may well ensure the administration of his signature legislation accomplishment improves. The right appointees can coordinate and communicate policy needs and goals up and down the bureaucratic hierarchy. Rather than settling for a program that meets or falls short of expectations, there is an opportunity to build an effective ACA.

Good Governance beyond Obamacare

The first half of October showed us that political actors in Congress contributed to a broken legislative branch. The second half of October showed us that political actors in the Administration contributed to a broken executive branch. Now is the time for the president to start anew and fix one branch, in the shadow of a Senate trying to fix itself.

In my piece from last month, I also argued that the filibuster rules in the Senate allow for the continuation of poor management and governance. If weak appointed personnel are causing policy problems, communication miscues, and other headaches for the president, the ability to replace them with something other than the word “ACTING” was limited by the 60-vote threshold.

President Obama, who has faced a string of personnel and management issues over the past year, now has greater freedom not simply to oust problematic appointees, but to install talented, effective leaders. With this ability comes a tremendous opportunity to jumpstart an administration that is sputtering.

Filibuster reform will not be the magical elixir that cures all of the ills in the Obama administration. Yet, it’s a good start. The President should channel the flashiness of his campaigns and loftiness of his rhetoric into a focus on real issues of governance.

       

In this podcast, congressional expert Sarah Binder explains why the Senate filibuster is a historical mistake. She talks about her research on Congress’s relationship with the Federal Reserve and addresses whether Congress is more polarized today than it has been in the past. Binder, a senior fellow in Governance Studies, is also a professor of political science at George Washington University and contributor to the Monkey Cage blog.

 

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Show notes:

• The Federal Reserve: Balancing Multiple Mandates (testimony by Alice Rivlin)
• Boom! What the Senate Will Be Like When the Nuclear Dust Settles
• Beyond the Horse Race to Lead the Fed
• Droning on: Thoughts on the Rand Paul “Talking Filibuster”
• Advice and Dissent: The Struggle to Shape the Federal Judiciary
• The History of the Filibuster

* In the image, Senator Henry Clay speaks about the Compromise of 1850 in the Old Senate Chamber. Daniel Webster is seated to the left of Clay and John C. Calhoun to the left of the Speaker's chair. (engraving by Robert Whitechurch, ca. 1880, Library of Congress)

       

The July 4th congressional recess’s pause in 2014’s record pace of judicial confirmations is a good time to explore the reason for the upsurge.

The 54 confirmations at 2014’s half-way point compare to 43 in all of 2013. What’s behind the increase? Some have said that the Senate’s November 2013 rules change—to allow a simple majority to end filibusters on most nominees—“has resulted in [the] sharp increase.” There is a lot of appeal (and even a little truth) to the claim, but beware the “post hoc ergo propter hoc” fallacy that if “B” follows “A”, “A” necessarily caused “B”.

There have been 61 confirmations since November 21. The rules change clearly enabled three of them. Late October and mid-November filibusters of three D.C. circuit appellate nominees were the immediate cause of the change, which in turn allowed their post-November confirmations.

Saying how many of the other post-November confirmations would have failed without the rules change is an exercise in informed speculation. Here’s one way to look at it: how many of those confirmations had enough negative votes to have sustained a filibuster under the old rule?

Invoking cloture—i.e., cutting off debate—under the old rule required 60 votes. Filibuster proponents were often able to prevent that by peeling off, if not 41 Nay votes, at least votes in the 30s, assuming not all 100 senators were present to vote. For this analysis, let’s set the bar at 34—the fewest number of votes that prevented a 60 vote cloture-invocation against any Obama nominee (most filibuster-sustaining votes were in the high 30’s and low 40’s).

Forty five of the 51 post-November district confirmations quite probably would have happened without the rules change. They had fewer than 34 Nays. And it’s hardly automatic that the six with at least 34 Nays would have been filibustered under the old rule. Senators can and do oppose a nominee but oppose filibustering her as well. Prior to the rules change, 12 district judges were confirmed even though they had at least 34 Nays. Only one of those needed a cloture vote to move to confirmation—33 voted against cloture and 44 voted against confirmation. (Cloture votes, a rarity before the rules change, have been routine since then, and they generally get around 30-40 negative notes. But these appear to be protest votes against the rules change, inasmuch as 27 of the 51 district confirmation had no Nays and another 14 had 20 or fewer Nays.)

So it’s reasonable speculation, but still speculation, that the rules change had no direct effect on district confirmations.

Circuit confirmations are a different story. The three D.C. nominees clearly owe their confirmations to the rules change. Three of the seven other circuit confirmations since November had well over 34 Nays (40, 43, and 45, in fact). One nominee had represented challengers to California’s since-overturned same-sex marriage ban; another, also a Californian, was nominated to a long-vacant seat that Republican senators claimed belonged in Idaho. The third, with 45 Nays, had authored Justice Department memos providing legal justifications for drone strikes against U.S. citizens. Successful filibusters against all three, under the old rule, seem quite plausible. (The other four post-rules-change nominees were confirmed with either no, or in one case, three negative votes.)

Bottom line: The rules change likely enabled at most twelve of the 61 post-rules change confirmations, and it more likely enabled only six.

The frenetic pace of 2014 confirmations is due mainly to Senate Democrats’ desire to secure as many as they can before the November elections and the possibility of losing control of the confirmation process.

       

For nearly fifteen hours between Wednesday morning and early Thursday, Senator Chris Murphy (D-CT), along with his Connecticut colleague Senator Richard Blumenthal (D) and Senator Cory Booker (D-NJ), led a filibuster on the floor of the Senate aimed at addressing gun control issues in the aftermath of last weekend’s mass shooting in Orlando. Other than learning that Wednesday is pizza night in the Murphy household, what else should we take away from this Mr. Smith Goes to Washington­-style exercise? Here are three lessons:

1. The real meaning of “I” in “I hold the floor until I yield the floor.”

Anyone who tuned into yesterday’s filibuster joined Senate procedure wonks (and faithful viewers of the West Wing) in the knowledge that a senator who holds the floor can yield to another senator for a question without yielding the floor. Indeed, 38 of Murphy’s 45 Democratic colleagues (as well as two Republicans, Senators Ben Sasse (R-NE) and Pat Toomey (R-PA)), came to the chamber yesterday to ask “questions.” In many cases, these were lengthy speeches—Senator Tammy Baldwin (D-WI), for example, read brief biographies of all 49 Orlando victims—in which the speaker satisfied the question requirement with a conclusion that asked Murphy for his reactions to their statement.

This kind of teamwork on extended speech-making is not unusual. When Senator Ted Cruz (R-TX) took the floor to talk for 21 hours about the Affordable Care Act in 2013, he took questions from nine fellow Republicans (as well as two Democrats). Last May, Senator Rand Paul (R-KY) got an assist from ten colleagues, including seven Democrats, during his filibuster of a bill extending the PATRIOT Act. The depth of Murphy’s bench not only reduced the energy he had to expend speaking, but also helped guarantee that the entire discussion was on-message and focused on the topic at hand; Murphy did not have to resort to reading the phone book to fill the hours.

2. In policy terms, it’s hard to know if the filibuster was a success…

When Murphy left the floor early Thursday morning, it was reported that Senate leaders had agreed to consider two gun control amendments: one that would address the ability of suspected terrorists to purchase guns and a second that would expand background checks for gun purchases. Details of the deal ensuring consideration are still emerging, but it is difficult to know if Murphy’s filibuster caused Senate leaders to agree to hold votes on them. It is possible that, had Democrats simply threatened to object to the motion to proceed to debate on the underlying spending bill, Republican leaders would have been forced to agree to consider the amendments for which Murphy and his allies were pushing. In the contemporary Senate, this is often how obstruction proceeds: without extended speeches and off the floor, with the two sides negotiating behind the scenes.

3. …but the political victory is perhaps more important

As my colleague Sarah Binder and her co-author Steve Smith wrote in their 1997 book on the filibuster, “encouragement from external groups…has given senators an incentive to exploit their procedural rights, sometimes leading them to block legislation with the filibuster or with holds and at other times leading them to use procedural prerogatives to force the Senate to consider issues of importance to parochial, partisan, or national constituencies.” On these grounds, Murphy’s filibuster was unequivocally a success in the eyes of its supporters. As the filibuster neared its end, Murphy reported that his office had received 10,000 phone calls supporting his efforts, and the hashtag #filibuster was trending on Twitter for much of the day. Even if the underlying amendments are not adopted—a real possibility that Murphy acknowledged in one of his final speeches of the evening—the visibility of the exercise is likely to pay political dividends for Democrats in the coming weeks.

       

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Having emerged from the largest municipal bankruptcy in American history, Detroit is now on surer financial footing and experiencing an economic resurgence. Due much in part to an unprecedented collaboration among philanthropy, business, and government, Detroit is benefiting from private and public sector investments downtown and across its neighborhoods. Today, there are revived neighborhoods, new businesses, a downtown innovation district, the M-1 RAIL transit corridor, and a spirit of creativity and entrepreneurialism.

On Tuesday, April 26, the Metropolitan Policy Program at the Brookings Institution hosted an event about Detroit’s rebound. Brookings Vice President of Metropolitan Policy Amy Liu opened the program and introduced Kresge Foundation President Rip Rapson, who presented findings from The Detroit Reinvestment Index, forthcoming research on what national business leaders think about the city. Rapson then moderated a panel of experts who discussed accomplishments to date and the work yet to come in furthering Detroit’s revitalization.

Join the conversation on Twitter at #DetroitResurgence

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Photos

Amy Liu opens the program

Rip Rapson gives remarks

Sandy Baruah, President and Chief Executive Officer, Detroit Regional Chamber; Stephen Henderson, Editorial Page Editor, The Detroit Free Press; Quintin E. Primo III, Co-Founder, Chairman and Chief Executive Officer, Capri Investment Group, LLC ; Jennifer Vey, Fellow & Co-Director, Robert and Anne Bass Initiative on Innovation and Placemaking, The Brookings Institution

Video

• Welcome and Presentation
• Panel

Audio

• How philanthropy, business, and government sparked Detroit’s resurgence

      

       

In the past decade, a remarkable shift has occurred in the development landscape. Specifically, acknowledgment of the central role of the private sector in contributing to, even driving, economic growth and global development has grown rapidly. The data on financial flows are dramatic, indicating reversal of the relative roles of official development assistance and private financial flows. This shift is also reflected in the way development is framed and discussed, never more starkly than in the Addis Abba Action Agenda and the new set of Sustainable Development Goals (SDGs). The Millennium Development Goals (MDGs), which the SDGs follow, focused on official development assistance. In contrast, while the new set of global goals does not ignore the role of official development assistance, they reorient attention to the role of the business sector (and mobilizing host country resources).

The U.S. Agency for International Development (USAID) has been in the vanguard of donors in recognizing the important role of the private sector to development, most notably via the agency’s launch in 2001 of a program targeted on public-private partnerships (PPPs) and the estimated 1,600 USAID PPPs initiated since then. This paper provides a quantitative and qualitative presentation of USAID’s public-private partnerships and business sector participation in those PPPs. The analysis offered here is based on USAID’s PPP data set covering 2001-2014 and interviews with executives of 17 U.S. corporations that have engaged in PPPs with USAID.

The genesis of this paper is the considerable discussion by USAID and the international development community about USAID’s PPPs, but the dearth of information on what these partnerships entail. USAID’s 2014 release (updated in 2015) of a data set describing nearly 1,500 USAID PPPs since 2001 offers an opportunity to analyze the nature of those PPPs.

On a conceptual level, public-private partnerships are a win-win, even a win-win-win, as they often involve three types of organizations: a public agency, a for-profit business, and a nonprofit entity. PPPs use public resources to leverage private resources and expertise to advance a public purpose. In turn, non-public sectors—both businesses and nongovernmental organizations (NGOs)—use their funds and expertise to leverage government resources, clout, and experience to advance their own objectives, consistent with a PPP’s overall public purpose. The data from the USAID data set confirm this conceptual mutual reinforcement of public and private goals.

The goal is to utilize USAID’s recently released data set to draw conclusions on the nature of PPPs, the level of business sector engagement, and, utilizing interviews, to describe corporate perspectives on partnership with USAID.

The arguments regarding “why” PPPs are an important instrument of development are well established. This paper presents data on the “what”: what kinds of PPPs have been implemented and in what countries, sectors, and income contexts. There are other research and publications on the “how” of partnership construction and implementation. What remains missing are hard data and analysis, beyond the anecdotal, as to whether PPPs make a difference—in short, is the trouble of forming these sometimes complex alliances worth the impact that results from them?

The goal of this paper is not to provide commentary on impact since those data are not currently available on a broad scale. Similarly, this paper does not recommend replicable models or case studies (which can be found elsewhere), though these are important and can help new entrants to join and grow the field. Rather, the goal is to utilize USAID’s recently released data set to draw conclusions on the nature of PPPs, the level of business sector engagement, and, utilizing interviews, to describe corporate perspectives on partnership with USAID.

The decision to target this research on business sector partners’ engagement in PPPs—rather than on the civil society, foundation, or public partners—is based on several factors. First, USAID’s references to its PPPs tend to focus on the business sector partners, sometimes to the exclusion of other types of partners; we want to understand the role of the partners that USAID identifies as so important to PPP composition. Second, in recent years much has been written and discussed about corporate shared value, and we want to assess the extent to which shared value plays a role in USAID’s PPPs in practice.

The paper is divided into five sections. Section I is a consolidation of the principal data and findings of the research. Section II provides an in-depth “data picture” of USAID PPPs drawn from quantitative analysis of the USAID PPP data set and is primarily descriptive of PPPs to date. Section III moves beyond description and provides analysis of PPPs and business sector alignment. It contains the results of coding certain relevant fields in the data set to mine for information on the presence of business partners, commercial interests (i.e., shared value), and business sector partner expertise in PPPs. Section IV summarizes findings from a series of interviews of corporate executives on partnering with USAID. Section V presents recommendations for USAID’s partnership-making.

Downloads

• WP94PPPReport2016Web

      

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.

       

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.

       

       

Yesterday the U.S. Economic Development Administration announced the winners of its i6 Green Challenge grant, awarding $12 million to six regions to accelerate clean technology commercialization.  

Of particular note is an energy efficiency gambit being developed in the Puget Sound region.

In that case, a portion of the $1.3 million of federal support that will now flow to Washington’s state’s Clean Energy Partnership will be dedicated towards the building out of BETI, the Building Efficiency Testing and Integration (BETI) Center and Demonstration Network. BETI is of more than passing interest to us because the testing net work was developed by a steering committee of industry experts and community stakeholders as part of the region’s metropolitan business planning effort, spearheaded by the Puget Sound Regional Council in conjunction with the Brookings Institution Metropolitan Policy Program.  

BETI will be a physical living laboratory space for innovators in the energy efficiency field to test their products, designs, and services prior to launching them into the marketplace. When built out, the concept will be an example of a U.S. metropolitan region examining its economic position, assessing needs and gaps, and moving assertively to challenge governments, philanthropists, and private sector to invest in potentially game-changing interventions.    

In that sense, with the prospect of a state match and copious follow-on private investment down the road, the i6 Green win demonstrates the potential power of bottom-up intentional economic development strategies.

      

With the economy still reeling from the effects of the recession, metropolitan areas have become increasingly willing to explore new approaches to economic development. Moving away from traditional one-size-fits-all approaches that emphasized Starbucks, stadium-building, and stealing businesses, metro leaders are instead crafting metropolitan business plans that grow jobs from within, building on their distinct market advantages.

By partnering with private industry, nonprofit intermediaries, universities, civic leaders, research institutions, and other interested parties, regional public sector leaders are working to strengthen their economies by focusing on those industries with the greatest potential for future growth.

For some regions, these efforts have involved helping existing firms make the transition to emerging industries. Northeast Ohio’s long struggle with post-deindustrialization was made worse by the Great Recession and the collapse of the auto sector and the foreclosure crisis.

In response, regional leaders came together to launch PRISM, the Partnership for Regional Innovation Services to Manufacturers initiative. The goal of PRISM is to help small and medium-sized manufacturers in old commodities industries, like steel and automotive, reinvent their products and business models to take advantage of growth opportunities in emerging markets like bio-science, health care and clean energy.

Led by the Manufacturing Advocacy and Growth Network (MAGNET), a regional intermediary organization, PRISM brings together higher education institutions, regional economic development organizations, and Ohio’s Edison Technology Centers to provide market research and business consulting services, increase firms’ access to capital and talent, and foster stronger relationships within growing industry clusters. [Full disclosure: The Brookings-Rockefeller Project on State and Metropolitan Innovation provided initial advisory support to PRISM.]

“Through PRISM, we hope to demonstrate that a growing manufacturing sector is not only possible, but desirable for the region,” says MAGNET president and CEO Daniel Berry. “Reclaiming the legacy of manufacturing innovation in Northeast Ohio will enable the region’s companies to create more well-paying jobs.”

In other parts of the country, partnerships are linking up existing industry strengths to create new growth opportunities. To ensure the Seattle region continues to be a global hub of innovation, public and private sector leaders have formed the Building Energy-Efficiency Testing and Integration (BETI) Center and Demonstration Network to develop new products, services and technologies around energy efficiency for customers around the world. BETI capitalizes and integrates this region’s distinct, competitive advantages – unparalleled software and information technology, strong sustainability ethos, an emerging building energy efficiency sector, and strong post-secondary institutions and talent that can support future demand. This is not a cookie cutter idea but one that can best work with the market formula found in the Puget Sound region.

With financial support from a federal i6 Green Challenge grant and a state match, BETI will help local businesses commercialize innovations in building energy-efficient technologies, platforms, and materials by providing product validation and integration services. In addition, BETI will foster greater collaboration among industry stakeholders, including businesses, entrepreneurs, trade associations, local and state government agencies, state universities, research networks, venture capitalists, and regional utilities.  

Both Northeast Ohio and the Puget Sound region arrived at these collaborative partnerships during the course of their efforts to develop metropolitan business plans. Like private sector business plans, these regional economic development plans are rooted in market dynamics and competitive assets. The metropolitan business planning process offers a framework for regional business, civic, and government leaders to assess their metro’s distinctive market position, identify pragmatic economic development strategies that capitalize on regional assets and set forth detailed implementation-ready plans for economic growth. Once established, these metropolitan business plans will act as roadmaps for metro economies as they drive the nation toward greater prosperity, increased job creation, and a leading position in the next economy.

      

       

As the Obama administration copes with Russia’s annexation of Crimea and continuing pressure on Ukraine, its actions invariably invite comparison to the Bush administration’s response to the 2008 Georgian-Russian war. But as the Obama White House readies potentially more potent economic sanctions against Russia, former Bush administration officials are bandying a revisionist history of the Georgia conflict that suggests a far more robust American response than there actually was.

Neither White House had good options for influencing Russian President Vladimir Putin. And this time, the fast-moving developments on the ground in Ukraine confront the United States with tough choices. Because the West will not go to war over Crimea, U.S. and European officials must rely on political, diplomatic and financial measures to punish Moscow, while seeking to launch negotiations involving Russia in order to de-escalate and ultimately stabilize the Ukraine situation. They are not having an easy time of it.

Neither did the Bush administration during the 2008 Georgia-Russia war. In a brief, five-day conflict, the Russian army routed its outnumbered and outgunned Georgian opponent and advanced to within a short drive of the Georgian capital, Tbilisi. Bush officials ruled out military options and found that, given the deterioration in U.S.-Russian relations over the previous five years, they had few good levers to influence the Kremlin. The sanctions Washington applied at the time had little resonance in Moscow.

In recent days, however, former Bush administration officials have described a forceful and effective U.S. response in Georgia. On “Fox News Sunday” on March 16, former senior White House adviser Karl Rove told Chris Wallace, “What the United States did was it sent warships to, to the Black Sea, it took the combat troops that Georgia had in Afghanistan, and airlifted them back, sending a very strong message to Putin that ‘you’re going to be facing combat-trained, combat-experienced Georgian forces.’ And not only that, but the United States government is willing to give logistical support to get them there, and this stopped them.”

Rove was echoing what former Secretary of State Condoleezza Rice wrote in a March 7 op-ed in The Washington Post: “After Russia invaded Georgia in 2008, the United States sent ships into the Black Sea, airlifted Georgian military forces from Iraq back to their home bases and sent humanitarian aid. Russia was denied its ultimate goal of overthrowing the democratically elected government.” Really? These statements do not match well with the history of the conflict.

War broke out the night of Aug. 7, when Georgian President Mikhail Saakashvili ordered his troops into the breakaway region of South Ossetia, after Russian forces shelled Georgian villages just outside South Ossetia. The Russians — by appearances, spoiling for a fight — responded swiftly with massive force. They turned the Georgian army back and overran much of Georgia.

As has been widelyreported, when the conflict began, one of Georgia’s five army brigades was serving as part of the coalition force in Iraq (not Afghanistan, as Rove claimed). On Aug. 10, U.S. C-17s began returning the brigade to Tbilisi, and it promptly went into combat.

The brigade was well-trained and experienced — but in counterinsurgency operations for Iraq, not combined arms operations. Facing a larger and far better-armed opponent, the brigade added little to the failing Georgian effort to halt the Russian advance. On Aug. 12, Moscow announced a cease-fire. French President Nicolas Sarkozy traveled to the Russian and Georgian capitals to formalize an end to the hostilities.

Did the U.S. airlift of the Georgian troops to Tbilisi change the tide of battle or Moscow’s political calculations? No. The Russian army handily drove them back.

What about the deployment of U.S. Navy ships to the Black Sea? The guided missile destroyer USS McFaul did enter the Black Sea to deliver humanitarian supplies to Georgia, passing through the Bosporus on Aug. 22 — 10 days after the cease-fire.

No evidence suggests these actions had much, if any, impact on Putin’s decision making. The Russians halted their offensive short of Tbilisi, figuring that occupying the capital was unnecessary. They thought — as did many in Georgia and the West — that the political shock of the rout would suffice to bring down Saakashvili’s government (though, in the end, it did not).

U.S. C-17s did fly humanitarian supplies to Tbilisi, but President Bush ruled out military action. His administration imposed modest penalties on Russia, ratcheting down bilateral relations, freezing a U.S.-Russia civil nuclear cooperation agreement and ending support for Moscow’s bid to join the World Trade Organization. U.S. officials found that they had little leverage to affect Moscow’s behavior.

The Obama administration has applied similar measures as it seeks to sway Putin again, but it has added a new penalty: visa and financial sanctions targeted at individual Russians, including some close to Putin. On March 20, the president also announced a new executive order to enable U.S. sanctions against key sectors of the Russian economy, including finance, energy and defense — the kinds of tough penalties that the United States has not previously applied against Moscow.

Despite the bluster of former Bush administration officials today, Washington in fact has a stronger hand in the current crisis in Ukraine in one other regard. In 2008, many European states held Saakashvili partially responsible for triggering the war with the Georgian advance into South Ossetia. Ukraine, by contrast, has acted with great restraint. This time, nearly all of Europe agrees that Russia’s actions are out of bounds. Sure enough, European states also appear more ready to sanction Russia than in 2008. Along with the various sanctions the U.S. alone has announced, European Union officials last week also announced visa and financial sanctions on individual Russians.

These moves might not end up shaking Putin from his course, but applying the new executive order could inflict real pain on the Russian economy — something Washington did not accomplish in 2008. Those who faced the challenge of punishing Russia over Georgia should understand the complexities of dealing with Putin and, at a minimum, cut the current administration a little slack.

Read the original article at POLITICO Magazine»

       

       

Policy Brief #175

As the nation strives to recover from the “Great Recession,” job creation remains one of the biggest challenges to renewed prosperity. Small businesses have been among the most powerful generators of new jobs historically, suggesting the value of a stronger focus on supporting small businesses—especially high-growth firms—and encouraging entrepreneurship. Choosing the right policies will require public and private decision-makers to establish clear goals, such as increasing employment, raising the overall return on investment, and generating innovations with broader benefits for society. Good mechanisms will also be needed for gauging their progress and ultimate success. This brief examines policy recommendations to strengthen the small business sector and provide a platform for effective programs. These recommendations draw heavily from ideas discussed at a conference held at the Brookings Institution with academic experts, successful private-sector entrepreneurs, and government policymakers, including leaders from the Small Business Administration. The gathering was intended to spur the development of creative solutions in the private and public sectors to foster lasting economic growth.

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	What incentives and assistance could be made available to “gazelles” and to small business more generally? What policies are likely to work most effectively? In the near term, government policies aimed at bolstering the recovery and further strengthening the financial system will help small businesses that have been hard hit by the economic downturn. Spurred by the interchange of ideas at a Brookings forum on small businesses, we have identified the following more targeted ideas for fostering the health and growth of small businesses (and, in many cases, larger businesses) over the longer run: Improve access to public and private capital. Reexamine corporate tax policy with an eye toward whether provisions of our tax code are discouraging small business development. Promote education to help businesses struggling with shortages of workers with particular skills, and promote research to spur innovation. Rethink immigration policy, as current policy may be contributing to shortages of key workers and deterring entrepreneurs who wish to start promising businesses in our country. Explore ways to foster “innovation-friendly” environments, such as regional cluster initiatives. Strengthen government counseling programs.

The term “small business” applies to many different types of firms. To begin, the small business community encompasses an enormous range of “Main Street” stores and services we use every day, such as restaurants, dry cleaners, card shops and lawn care providers. When such a business fails, it is often replaced by a similar firm. The small business community also includes somewhat bigger firms—in industries such as manufacturing, consulting, advertising and auto sales—that may have more staying power than Main Street businesses, but still tend to stay relatively small, with under 250 employees. While these two kinds of small businesses contribute relatively little to overall employment growth, they are a steady source of mainstream employment. If economic conditions do not support the formation of new businesses to replace the ones that fail, there would be a significant net destruction of jobs and harm to local communities.

Yet another type of small business has an explicit ambition for rapid growth. These high-growth companies are sometimes known as “gazelles.” According to the Small Business Administration, small businesses account for two-thirds of new jobs, and the gazelles account for much of this job creation. The most striking examples—such as Google and eBay—have tended to be in high-tech industries and were gazelles for a significant time before they graduated to be very large businesses. However, gazelles exist in all industry types and in all regions of the country, and the large majority are not grazing in the nation’s technology-dominated Silicon Valleys. According to one expert, the three largest industry categories for high-growth companies are restaurant chains, administrative services and health care companies. One non-high-tech example is Potbelly Sandwiches, a restaurant chain that began in Chicago. Another is the San Francisco-based Gymboree Corporation, a provider of child development programs and children’s clothing.

 

Fostering the Development of High-Growth Companies

High-growth small businesses represent only about 5 percent of total startups, making it important to determine how to spot and foster them. A key common characteristic is that growth is critically dependent on the entrepreneurs who start these companies; they are people on a mission, charismatic leaders who can inspire creativity and commitment from their staffs.

The age of these firms is highly correlated with when their growth is highest. Generally, the most dramatic growth occurs after at least four years of existence—and coincidentally lasts about four years—before it slows again to a more typical pace for small businesses. Of course, some firms such as Google defy this pattern and continue to experience high growth for many years.

Although dynamic small businesses can be found nearly everywhere and in many industries, some regions spawn more of them than others. These regions may have especially supportive features, such as a critical mass of potential workers with relevant skills, a social climate and network that encourage idea generation, locally available venture capital, or some combination of these factors.

Unfortunately, attempts to anticipate which companies or even industries are likely to produce gazelles are prone to error. Thus, excessive emphasis on national industrial policies that favor specific industries are likely misplaced. Without knowing how to target assistance precisely, broad strategies, such as assistance with funding, knowledge, contacts and other essential resources, may be the best approach to fostering high-growth businesses. Such support has the added value of also aiding Main Street businesses.

Many of the most promising policies focus on removing obstacles that hinder entrepreneurs with solid business plans from launching and expanding their businesses.

Funding

As a result of the burst of the dot.com bubble in early 2000 and the recent financial crisis, small businesses have found the availability of venture capital funds drastically diminished. The crisis has also made it more difficult to obtain funding from banks and other conventional means. These trends particularly affect the “missing middle” of small businesses—roughly, those with between 10 and 100 employees.

The venture capital market. Historically, venture capital has financed only a relatively small portion of small businesses, but those financed have tended to be the ones with the greatest growth potential. In recent years, firms that eventually grew to where they could issue initial public stock offerings generally relied more heavily on venture capital financing than the average small business.

The dollar value of venture capital deals funded today is only about one-fifth the size it reached at its peak. While the peak amount may have been too large, today’s value is probably too small. With their capital heavily invested in a small range of industries and locales, it seems likely that venture capital firms have missed a high proportion of potential investment opportunities. Further, “once burned, twice shy” funders have increasingly focused on larger, later-stage ventures. Consequently, mezzanine financing, which new companies need to survive and thrive in the critical early stages, is scarce.

The funding problems partly stem from venture capital firms today having less money to invest. Some investors who formerly contributed to such firms have become more risk-averse, and worse performance figures have discouraged new investors. Lack of venture capital affects some industries more than others, and even some green energy companies—viewed by some as one of the nation’s more promising industry sectors—have moved to China, where financial support is more readily available.

Bank lending. In contrast to large businesses, which can turn to capital markets for funding, many small businesses are dependent on banks for financing. Although the worst of the 2008–09 credit crunch is behind us, many small businesses still find it difficult to obtain bank loans. Community banks, a key source of small business financing, have been hard hit by losses in commercial real estate, which have limited their lending capacity. Further, many small business owners who historically would have used real estate assets as collateral for expansion loans can no longer do so because of declines in real estate prices. In addition, small businesses that have, in the past, used credit cards to purchase equipment and supplies have been hindered by reductions in credit limits.

Overall economic conditions

The high degree of uncertainty currently surrounding the economic and financing climate may have prompted many entrepreneurs and would-be entrepreneurs to hold off on growth plans. Despite their reputation as high-flying risk-takers, good entrepreneurs take only calculated risks, where the benefits outweigh the dangers. Uncertainties about the future trajectory of the economy merely increase risk without raising potential rewards.

Government policies

Government policies affect the climate for small businesses in many ways. For example, small businesses face substantial hurdles when entering the complicated world of federal grants and contracts. At the state level, severe budget shortfalls mean that even well-designed initiatives to boost small businesses may founder.

The Small Business Administration (SBA) assists the full continuum of small businesses through a variety of means. These include: an $80 billion loan guarantee portfolio; specialized counseling and training centers; specialized business development programs targeting the socially and economically disadvantaged; oversight to ensure that at least 23 percent of federal government contracts go to small businesses (with certain preferences for minority and women-owned businesses); and the Small Business Innovation Research and Small Business Investment Companies programs.

The Obama administration is attempting to broaden support for small businesses by bringing the SBA into multi-agency initiatives that tackle common problems. For example, the Departments of Energy, Commerce, Housing and Urban Development, Education, and Labor, along with the National Science Foundation and the SBA, are supporting a five-year, nearly $130 million Energy Regional Innovation Cluster.

Strength of “social capital”

Through the 1990s, the United States was a worldwide leader in fostering innovation and entrepreneurship and reaped the reward of employment growth. Current international comparisons suggest that we are now closer to tenth place among some 70 nations in our ability to support innovation. Much of what has kept our nation from remaining in the top spot appears to relate to insufficient cultural support for entrepreneurship.

Strong social networks in specific geographic regions appear to substantially bolster the growth of innovative businesses. These networks are built around entrepreneurial dealmakers who serve as the nodes of the network, forming connections among researchers, entrepreneurs and investors. Unfortunately, many regions and industries lack strong networks.

Access to decision-making information. Entrepreneurs need an array of information and advice about how to tackle the problems that arise at different stages in business development. The SBA reports that companies that have taken advantage of their long-term counseling programs, for example, have higher growth than companies that have not.

Opportunity for all. Social networks are self-selecting, and some people have to work extra hard to gain entry to a region’s network of entrepreneurs. While various organizations exist to help women and people of color access entrepreneurial skills and information, these efforts may not suffice. Under-representation of any group presumably would filter out a number of potential high-growth companies.

Workforce issues

A long-time strength of the American workforce, worker mobility has declined. This trend has been attributed in part to an aging population and in part to the current difficulty people have in selling their homes. Businesses report difficulty finding employees with the right training, especially at the technician level, where straightforward vocational training could help.

Global competition

Increasing global competition for good projects, entrepreneurs and capital is a positive trend from an international perspective, but runs counter to the national goal of promoting rapid growth in U.S. industry and employment. Today, many entrepreneurs can choose among starting a business here, in their home country, or even in a third, more hospitable nation. At the same time, current U.S. immigration policy hinders entrepreneurs from coming here to launch their companies. A recent report from The Brookings- Duke Immigration Policy Roundtable concluded that “educated workers with the knowledge and skills to innovate are critical” to the United States and recommended increasing the annual number of skilled visas.

 

Policy Goals for Small Business

Measuring Results

More work is needed to identify key policy goals and priorities related to small business success. Critically, what would constitute “improvement” in public policy regarding small business employment, and how would we measure it? Clearly, increasing the total number of jobs created each year (by both small and large businesses, net of job destruction) would be a positive outcome, all else being equal. Another potential goal would be improving the “quality” of the jobs created, as measured by average compensation or by job creation in new industries or geographic areas where unemployment is high. Creating “good jobs” that bring generous compensation would seem to be always desirable, but this outcome could conflict with other social goals, for example, if the jobs created required skills out of the reach of groups that are traditionally difficult to employ.

Slowing job destruction could be as important as increasing the creation of new jobs, but discouraging layoffs without increasing performance would do more harm than good. The trick is to raise the quality of marginal firms so that their improved performance allows them to retain employees they would otherwise have to let go.

A final key factor in setting policy goals that would support small businesses is measuring the cost to taxpayers of the initiatives that flow from the goals. This includes the subsidy cost contained in the federal budget, as well as costs and tradeoffs in society at large.

Changing Key Policies

Small businesses face both short-run and long-run challenges. With regard to the former, many small businesses have been hard hit by the recession and appear to be lagging behind larger businesses in their recovery. The cyclical struggles of this sector in part reflect the dependence of many small firms on the still-strained banking system for their financing; they also reflect the high toll that our extremely soft labor markets have taken on demand for Main Street goods and services. Thus, government policies aimed at broadly bolstering the recovery and further strengthening the financial system will yield important benefits to small businesses.

The government, in conjunction with the private sector, can also take steps that will foster an economic environment that is supportive of entrepreneurship and economic growth over the long run. Specific policy steps that might help small businesses (and, in many cases, large businesses) include:

Improve access to public and private capital. Implementing serious financial reform will reduce the likelihood that we will see a repeat of the recent credit cycle that has been so problematic for the small business sector. When credit market disruptions do occur, policymakers should be attentive to whether temporary expansions of the SBA loan guarantee program are needed to sustain lending to creditworthy borrowers. The SBA should also consider expanding the points of access to its loan programs through an expansion of its lending partners. Finally, the SBA (or a similar entity) might encourage venture capital funds to broaden their investments beyond familiar areas by systematically bringing these investors together with entrepreneurs from neglected geographic regions and business sectors.

Reexamine corporate tax policy. More thinking is needed about whether provisions in our tax code discourage small business development in a way that is harmful to the broader economy and that places the United States at a relative disadvantage internationally. For example, Congress might consider whether it would be beneficial, on net, to lower employment taxes as a way of spurring hiring at businesses with high-growth potential. In addition, some analysts believe there would be gains from increasing tax credits for research and development and further lowering taxes on capital equipment. A design priority in all cases should be simplicity, as complicated rules can limit take-up among smaller firms that do not have extensive accounting or legal expertise.

Promote education and research. Entrepreneurs report difficulty in finding workers with the skills they need for manufacturing, technology and other jobs that do not require four-year college degrees. Access to such educational opportunities, including tailored vocational training, should be affordable and ubiquitous.

At the university level, improvements are needed in the way academic research is brought to the commercial market. Continued public and private support for basic research might be wise, particularly if we are in a trough between waves of innovation, as some analysts believe. The large investments by the National Science Foundation, National Institutes of Health, Defense Advanced Research Projects Agency, and other ambitious public and private programs laid the groundwork for many of the high-growth businesses of today. It may be worth exploring whether support for research in “softer” areas than the sciences might do an equal or better job of inspiring innovations.

Rethink immigration policy. A reconsideration of limits on H1-B visas might help entrepreneurs struggling with shortages of workers with particular skills. In addition, current immigration policy discourages immigrants who want to establish entrepreneurial businesses in America. Any efforts to expand immigration are frequently perceived as “taking jobs away from Americans,” but studies have shown that new businesses create jobs for Americans.

Explore ways to foster “innovation-friendly” environments. Some regions of the United States clearly do a better job of encouraging innovation. Silicon Valley is the classic example, but there may be as many as 40 such clusters scattered around the country. While clusters often arise organically, typically near major universities, some states have made an explicit commitment to innovation and entrepreneurship. Examples include the Massachusetts Technology Collaborative and California’s Biological Technologies Initiative, involving community colleges statewide. Federal, state and local policymakers should keep a keen eye on ways of adapting best practices from these initiatives as information becomes available about which elements are most effective.

Strengthen government counseling programs. The SBA might do more to expand and tailor its already successful growth counseling programs to better meet the needs of both Main Street and potential high-growth businesses, as well as firms at different developmental stages. Any effort to expand small businesses’ opportunities for federal grants and contracts should be accompanied by significant streamlining of the application process.

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Food safety is not a problem unique to China, though it is certainly one of the country’s most pressing and persistent challenges. On April 28, 2016, the John L. Thornton China Center hosted a public event to discuss food safety in China and what new regulations might mean for consumers and businesses.

Revised food safety law a step in the right direction

China’s revised Food Safety Law, enacted in October 2015, is intended to strengthen the regulation of food companies in China and enhance oversight along the supply chain. The law imposes tougher consequences on violators of food safety regulations. The revised Food Safety Law is a step in the right direction, but improving food safety will require more than just new regulations. Greater inter-agency coordination is needed among the various government entities with regulatory responsibility for food safety, including the China Food and Drug Administration, the Ministry of Agriculture, the National Health and Planning Commission, and the General Administration of Quality Supervision, Inspection and Quarantine.

China has done relatively better in enforcing food safety and quality standards for its food exports than it has for its domestic food market. A disparity between export quality and what is found in local markets is not uncommon in developing countries. But after several large-scale food safety incidents, domestic Chinese consumers are now paying close attention to the quality of their food and are no longer willing to accept such a disparity. Setting and enforcing higher food safety standards domestically is important for maintaining public health and for increasing consumer confidence. The latter will take time but is an indispensable component of the consumption-driven economy that China seeks.

Industry consolidation needed

One of the biggest obstacles facing Chinese food safety regulators is a still-fragmented domestic food industry with many small players. The increase in regulatory requirements and inspections mandated by the new law will raise the costs of doing business and likely lead to industry consolidation, which would help make the domestic Chinese food industry more manageable from a regulatory perspective. Emerging trends that see consumers buying food products from small and perhaps unverified retailers online actually make the jobs of regulators more difficult. This is because products are harder to trace—and, if there is a problem, to recall—when transactions occur through nontraditional retail channels. Traceability is critical to ensuring food safety because it allows problematic food items to be identified. The responsible firm can then correct the situation and each actor in the supply chain can be held accountable.

The Chinese government is already supporting initiatives that aggregate production units at the farm level. These farmer production bases enable farmers to coordinate food production and marketing to larger retailers. Participating farms have been provided with safe pesticides and guidelines on pesticide application; they are also able to sell to large retailers directly. These direct farmer-retailer relationships allow for greater traceability and facilitate the spot-checking that is necessary for verification. This model holds promise for improving food safety, especially as it pertains to pesticide application, but it will need to be scaled up to have a meaningful impact on China’s domestic food market.

What can China learn from other countries?

Since China is not alone in facing food safety challenges, it can learn lessons from the experiences of other countries. According to Vivian Hoffmann of the International Food Policy Research Institute, “there are many ways in which the public sector can harness the capacity and energy of the private sector to make food safety regulation more efficient.” For instance, China could consider greater co-regulation, which is a strategy that involves the private sector in regulation. Allowing firms to give input when regulators are setting standards can help prevent situations where unattainable standards are either crippling for companies or just ignored altogether. Hoffman is clear to note that allowing firms to give input does not mean compromising on consumer safety. Rather, it would create a more transparent process that would allow companies time to work up to higher standards if necessary. Private companies could be involved in testing their own products, but verification testing would still be needed.

Open communication with consumers is also important. The risk-based approach to food safety, which is the international norm and which China has also adopted, entails a particular challenge: Sometimes what consumers think is the most dangerous aspect of the food supply is different from scientists’ perceptions and knowledge of risk. For example, scientists may focus on biological contaminants while consumers worry about pesticides and additives. The concerns of consumers should be taken into account when setting priorities, but experts also need to explain why their concerns may be different. Communication and transparency are essential for bridging this disconnect. Chenglin Liu of St. Mary’s School of Law similarly stresses transparency as a key ingredient in improving China’s food safety situation. Broader capacity building efforts—as it relates to rule of law, an independent judiciary, and independent journalism—will help improve the enforcement of regulations.

The country’s revised Food Safety Law is a step in the right direction, but it is not enough to resolve China’s food safety woes. Regulatory enforcement remains a challenge. Fortunately, it is by no means an insurmountable one. Vigilant consumers will continue to demand higher-quality and more-traceable food products, a trend that puts increasing pressure on regulators to enforce high standards and that also presents great opportunities for proactive businesses.

       

       

If you want to understand what drove the intense opposition to the nuclear deal with Iran in certain quarters of the American political establishment, as well as across the broader Middle East, all you have to do is look at the photos from Iranian president Hassan Rouhani’s inaugural tour of Europe this week. The most notorious shot shows plywood barricades concealing ancient Roman statues, apparently out of concern that their nudity would shock or offend the leader of an Islamic theocracy.

The alacrity with which Italian leaders jettisoned their values and historical legacy in hopes of gaining some advantage in Iran’s post-sanctions gold rush is precisely what nuclear deal opponents predicted and hoped to forestall. After all, a Europe that would so readily censor the treasures of its own glorious antiquity, in an obsequious gesture that was apparently unbidden by Tehran, is unlikely to jeopardize any budding business to penalize any Iranian infractions of the agreement, or to put pressure on Iran over any of its other objectionable policies.

As I wrote 10 months ago:

After a deal, the Islamic Republic will be back in business, its standing as an investment destination restored and its place in the community of nations effectively normalized. This is, of course, precisely what Tehran is seeking and what Hassan Rouhani was elected to the presidency to accomplish — redemption. An imperfect, incomplete redemption, but a new beginning nonetheless.

But redemption is precisely what [Israeli Prime Minister Benjamin] Netanyahu and other opponents of an Iranian deal are determined to prevent. They appreciate that once the current network of multilateral sanctions is unraveled, it will never be reinstated, absent some extraordinary provocation by Tehran. The presumption, then, is that the threat posed by Iran’s regional ambitions will never be successfully blunted. For Netanyahu—and for many in the American policy community—that is an unacceptable outcome. They believe, as the prime minister declared on Tuesday, that “If Iran wants to be treated like a normal country, let it act like a normal country.”

Netanyahu and other opponents of the deal did not achieve that goal. Much of the U.S. unilateral sanctions regime remains intact, and these measures—along with some residual uncertainty about the longevity of the nuclear deal—will restrain the horizons of Iran’s economic and geopolitical reintegration into the international community. But for all practical purposes, the Islamic Republic’s redemption is complete.

The alacrity with which Italian leaders jettisoned their values and historical legacy in hopes of gaining some advantage in Iran’s post-sanctions gold rush is precisely what nuclear deal opponents predicted and hoped to forestall.

So in the wake of this broad normalization, how can the world continue to nudge Tehran toward “acting like a normal country”? For starters, by restraining the impulse to placate ideological excesses of Iranian politics—or, for that matter, those of its neighbors.

The Italian deference to Rouhani is not without precedent: similar measures were taken last year to protect the delicate sensibilities of Abu Dhabi’s crown prince. And it was not without foundation—in 1999, photos of a previous Iranian president, Mohammad Khatami, enjoying an Italian state dinner provoked a furor among opponents of his reformist agenda because they revealed wine glasses on the tables.

However, there were an infinite number of ways for circumventing these civilizational conflicts without repudiating Italian artistic glory. To avoid a repeat of his Roman fiasco, Khatami simply adapted his future European visits to incorporate a greater number of official breakfast meetings, where abstinence was more easily ensured.

Iran’s rehabilitation without full-fledged reformation compounds the already urgent challenges of an unstable Middle East. Its reintegration can be a stabilizing force, but only if Tehran reconciles itself to the world, rather than the reverse.

       

       

       

Mark Muro, senior fellow and policy director of the Metropolitan Policy Program, discusses a plan to address the economic boom-bust cycle in states that rely heavily on “fracking” and how this plan can spur innovation, inclusive economic development, and de-carbonization in the U.S.

“Inclusive economic development is critical; it’s about widening the circle of prosperity to more people. An inclusive economy is a highly innovative one … one that provides many opportunities for building skills, and it is a sustainable one,” Muro says. “Sustainability is about smoothing the boom and bust cycles that are disruptive to people, communities, and the state economy. But it is also about a clean economy.”

Also in this podcast a Coffee Break from Eyerusalem Siba, research fellow with the Africa Growth Initiative in the Global Economy and Development program. Also stay tuned for our presidential election update with John Hudak.

Permanent trust funds: Funding economic change with fracking revenues (by Mark Muro and Devashree Saha)

Busted: State budgets feel fracking crash

Look to advanced industries to help drive productivity gains

Enabling female entrepreneurs and beyond

Bloomberg’s Clinton endorsement signals a big business problem for Trump and the GOP

Thanks to audio producers Mark Hoelscher and Zack Kulzer, plus thanks to Carisa Nietsche, Bill Finan, Jessica Pavone, Eric Abalahin, Rebecca Viser, and our intern Sara Abdel-Rahim.

Subscribe to the Brookings Cafeteria on iTunes, listen in all the usual places, and send feedback email to BCP@Brookings.edu