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Class Notes: Harvard Discrimination, California’s Shelter-in-Place Order, and More

This week in Class Notes: California's shelter-in-place order was effective at mitigating the spread of COVID-19. Asian Americans experience significant discrimination in the Harvard admissions process. The U.S. tax system is biased against labor in favor of capital, which has resulted in inefficiently high levels of automation. Our top chart shows that poor workers are much more likely to keep commuting in…

       




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The next COVID-19 relief bill must include massive aid to states, especially the hardest-hit areas

Amid rising layoffs and rampant uncertainty during the COVID-19 pandemic, it’s a good thing that Democrats in the House of Representatives say they plan to move quickly to advance the next big coronavirus relief package. Especially important is the fact that Speaker Nancy Pelosi (D-Calif.) seems determined to build the next package around a generous infusion…

       




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We can’t recover from a coronavirus recession without helping young workers

The recent economic upheaval caused by the COVID-19 pandemic is unmatched by anything in recent memory. Social distancing has resulted in massive layoffs and furloughs in retail, hospitality, and entertainment, and millions of the affected workers—restaurant servers, cooks, housekeepers, retail clerks, and many others—were already at the bottom of the wage spectrum. The economic catastrophe of…

       




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What Should Sustainable Development Goals Look Like?


Event Information

May 2, 2012
2:00 PM - 3:30 PM EDT

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

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The Millennium Development Goals were adopted in 2000 to encourage and monitor global social and economic developments through 2015. This frame has guided international development activities for the past decade and there is now a growing discussion on what the post-2015 international development framework should look like, and how economic, social and environmental pillars of development can be integrated.

On May 2, Global Economy and Development at Brookings hosted a discussion on the purpose of new development goals, the trade-offs in selecting specific indicators and the difficulties in integrating alternative development concepts into a single framework. The discussion also examined how events like the Rio+20 conference in Brazil can be used to advance the U.S. global development agenda. Panelists included Andrew Steer, incoming president, World Resources Institute; David Steven, nonresident fellow, Center for International Cooperation, New York University; Richard Morgan, director of Policy, United Nations Children’s Fund; and Brookings Nonresident Senior Fellow Colin Bradford. Brookings Senior Fellow Homi Kharas, deputy director of Global Economy and Development, moderated the discussion.

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Governance innovations for implementing the post-2015 Sustainable Development Agenda

Event Information

March 30, 2015
9:00 AM - 5:00 PM EDT

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

2015 is a crucial year for the international community. For the first time, all nations will converge upon a new set of Sustainable Development Goals applicable to advanced countries, emerging market economies, and developing countries, with the experience of implementing the Millennium Development Goals to build upon. Implementation is the critical component.

The Brookings Global Economy and Development program hosted a day-long private conference at the Brookings Institution in Washington, DC on Monday, March 30 to focus on “Governance innovations for implementing the post-2015 Sustainable Development Agenda.”

Hosted in collaboration with the Ministry of Foreign Affairs of Finland, this high-level conference drew on experiences from the North-South Helsinki Process on Globalization and Development carried out over the past 15 years. The Helsinki Process presaged many of the prerequisites for achieving accelerated progress by linking goal-setting to goal-implementation and by utilizing multistakeholder processes to mobilize society and financing for social and environmental goals to complement sound economic and financial policies. 

Download the conference agenda »
Download the related report »
Download the list of registrants »
Download the conference statement »


Brookings President Strobe Talbott shakes hands with Finland’s Minister of Foreign Affairs Erkki Tuomioja after welcoming participants to the conference.

Former President of Finland Tarja Halonen shares insights in the conference’s opening panel.

Over 75 conference participants from governments, multilateral institutions, civil society, the private sector, and think tanks participated in a number of roundtable discussions throughout the day.

President Halonen and Minister Tuomioja share lessons from the Helsinki process as conference participants consider paths forward for implementing the post-2015 Sustainable Development Goals.

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The role of multilateral development banks in supporting the post-2015 development agenda


Event Information

April 18, 2015
10:00 AM - 12:00 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

The year 2015 will be a milestone year, with the adoption of the Sustainable Development Goals (SDGs) and the post-2015 development agenda by world leaders in September; the Addis Ababa Accord on financing for development in July; and the conclusion of climate negotiations at COP21 in Paris in December. The draft Addis Ababa Accord, which focuses on the actions needed to attain the SDGs, highlights the key role envisaged for the multilateral development banks (MDBs) in the post-2015 agenda. Paragraph 65 of the draft accord notes: “We call on the international finance institutions to establish a process to examine the role, scale, and functioning of the multilateral and regional development finance institutions to make them more responsive to the sustainable development agenda.”          

Against this backdrop, on April 18, 2015, the Global Economy and Development program at Brookings held a private roundtable with the leaders of the MDBs and other key stakeholders to discuss the role of the MDBs in supporting the post-2015 development agenda.

The meeting focused on four questions:

  1. What does the post-2015 development agenda and the ambitions of the Addis and Paris conferences imply for the MDBs?

  2. Given the ability of the MDBs to leverage shareholder resources, they can be efficient and effective mechanisms for scaling up development cooperation, particularly with respect to the agenda on investing in people and to the financing of sustainable infrastructure. New roles, instruments and partnerships might be needed.

  3. How can MDBs best take advantage of the political attention that is being paid to the various conferences in 2015?   

  4. The World Bank and selected regional development banks have launched a series of initiatives to optimize their balance sheets, address other constraints and enhance their catalytic role in crowding in private finance. And new institutions and mechanisms are coming to the fore. But the responses are not coordinated to best take advantage of each MDB’s comparative advantage.

  5. What are the key impediments to scaling up the role and engagement of the MDBs?

  6. Views on constraints are likely to differ but discussions should cover policy dialogue, capacity building, capital, leverage, shareholder backing on volume, instruments on leverage and risk mitigation, safeguards, and governance. 

  7. How should the MDBs respond to the proposal to establish a process to examine the role, scale and functioning of the multilateral and regional development finance institutions to make them more responsive to the sustainable development agenda?   

  8. A proactive response and engagement on the part of the MDBs would facilitate a better understanding of the contribution that the MDBs can make and greater support among shareholders for a coherent and stepped-up role.

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Political decisions and institutional innovations required for systemic transformations envisioned in the post-2015 sustainable development agenda


2015 is a pivotal year. Three major workstreams among all the world’s nations are going forward this year under the auspices of the United Nations to develop goals, financing, and frameworks for the “post-2015 sustainable development agenda.” First, after two years of wide-ranging consultation, the U.N. General Assembly in New York in September will endorse a new set of global goals for 2030 to follow on from the Millennium Development Goals (MDGs) that culminate this year. Second, to support this effort, a financing for development (FFD) conference took place in July in Addis Ababa, Ethiopia, to identify innovative ways of mobilizing private and public resources for the massive investments necessary to achieve the new goals. And third, in Paris in December the final negotiating session will complete work on a global climate change framework. 

These three landmark summits will, with luck, provide the broad strategic vision, the specific goals, and the financing modalities for addressing the full range of systemic threats. Most of all, these three summit meetings will mobilize the relevant stakeholders and actors crucial for implementing the post-2015 agenda—governments, international organizations, business, finance, civil society, and parliaments—into a concerted effort to achieve transformational outcomes. Achieving systemic sustainability is a comprehensive, inclusive effort requiring all actors and all countries to be engaged.

These three processes represent a potential historic turning point from “business-as-usual” practices and trends and to making the systemic transformations that are required to avoid transgressing planetary boundaries and critical tipping points. Missing from the global discourse so far is a realistic assessment of the political decisions and institutional innovations that would be required to implement the post-2015 sustainable development agenda (P2015).

For 2015, it is necessary is to make sure that by the end of year the three workstreams have been welded together as a singular vision for global systemic transformation involving all countries, all domestic actors, and all international institutions. The worst outcome would be that the new Sustainable Development Goals (SDGs) for 2030 are seen as simply an extension of the 2015 MDGs—as only development goals exclusively involving developing countries. This outcome would abort the broader purposes of the P2015 agenda to achieve systemic sustainability and to involve all nations and reduce it to a development agenda for the developing world that by itself would be insufficient to make the transformations required.

Systemic risks of financial instability, insufficient job-creating economic growth, increasing inequality, inadequate access to education, health, water and sanitation, and electricity, “breaking points” in planetary limits, and the stubborn prevalence of poverty along with widespread loss of confidence of people in leaders and institutions now require urgent attention and together signal the need for systemic transformation.

As a result, several significant structural changes in institution arrangements and governance are needed as prerequisites for systemic transformation. These entail (i) political decisions by country leaders and parliaments to ensure societal engagement, (ii) institutional innovations in national government processes to coordinate implementation, (iii) strengthening the existing global system of international institutions to include all actors, (iv) the creation of an international monitoring mechanism to oversee systemic sustainability trajectories, and (v) realize the benefits that would accrue to the entire P2015 agenda by the engagement of the systemically important countries through fuller utilization of  G20 leaders summits and finance ministers meetings as enhanced global steering mechanisms toward sustainable development.   Each of these changes builds on and depends on each other.

I. Each nation makes a domestic commitment to a new trajectory toward 2030

For global goal-setting to be implemented, it is essential that each nation go beyond a formal agreement at the international level to then embark on a national process of deliberation, debate, and decision-making that adapts the global goals to the domestic institutional and cultural context and commits the nation to them as a long-term trajectory around which to organize its own systemic transformation efforts. Such a process would be an explicitly political process involving national leaders, parliaments or rule-making bodies, societal leaders, business executives, and experts to increase public awareness and to guide the public conversation toward an intrinsically national decision which prioritizes the global goals in ways which fit domestic concerns and circumstances. This political process would avoid the “one-size-fits-all” approach and internalize and legitimate each national sustainability trajectory.

So far, despite widespread consultation on the SDGs, very little attention has been focused on the follow-up to a formal international agreement on them at the U.N. General Assembly in September 2015. The first step in implementation of the SDGs and the P2015 agenda more broadly is to generate a national commitment to them through a process in which relevant domestic actors modify, adapt, and adopt a national trajectory the embodies the hopes, concerns and priorities of the people of each country. Without this step, it is unlikely that national systemic sustainability trajectories will diverge significantly enough from business-as-usual trends to make a difference. More attention needs to now be given to this crucial first step.  And explicit mention of the need for it should appear in the UNGA decisions in New York in September.

II. A national government institutional innovation for systemic transformation

The key feature of systemic risks is that each risk generates spillover effects that go beyond the confines of the risk itself into other domains. This means that to manage any systemic risk requires broad, inter-disciplinary, multi-sectoral approaches. Most governments have ministries or departments that manage specific sectoral programs in agriculture, industry, energy, health, education, environment, and the like when most challenges now are inter-sectoral and hence inter-ministerial. Furthermore, spillover linkages create opportunities in which integrated approaches to problems can capture intrinsic synergies that generate higher-yield outcomes if sectoral strategies are simultaneous and coordinated.

The consequence of spillovers and synergies for national governments is that “whole-of-government” coordinating committees are a necessary institutional innovation to manage effective strategies for systemic transformation. South Korea has used inter-ministerial cabinet level committees that include private business and financial executives as a means of addressing significant interconnected issues or problems requiring multi-sectoral approaches. The Korea Presidential Committee on Green Growth, which contained more than 20 ministers and agency heads with at least as many private sector leaders, proved to be an extremely effective means of implementing South Korea’s commitment to green growth.

III.  A single global system of international institutions

The need for a single mechanism for coordinating the global system of international institutions to implement the P2015 agenda of systemic transformation is clear. However, there are a number of other larger reasons why the forging of such a mechanism is crucial now.

The Brettons Woods era is over. It was over even before the initiative by China to establish the Asia Infrastructure Investment Bank (AIIB) in Beijing and the New Development Bank (NDB) in Shanghai. It was over because of the proliferation in recent years of private and official agencies and actors in development cooperation and because of the massive growth in capital flows that not only dwarf official development assistance (concessional foreign aid) but also IMF resources in the global financial system. New donors are not just governments but charities, foundations, NGOs, celebrities, and wealthy individuals. New private sources of financing have mushroomed with new forms of sourcing and new technologies. The dominance of the IMF and the World Bank has declined because of these massive changes in the context.

The emergence of China and other emerging market economies requires acknowledgement as a fact of life, not as a marginal change. China in particular deserves to be received into the world community as a constructive participant and have its institutions be part of the global system of international institutions, not apart from it. Indeed, China’s Premier, Li Keqiang, stated at the World Economic Forum in early 2015 that “the world order established after World War II must be maintained, not overturned.”

The economic, social and environmental imperatives of this moment are that the world’s people and the P2015 agenda require that all international institutions of consequence be part of a single coordinated effort over the next 15 years to implement the post-2015 agenda for sustainable development. The geopolitical imperatives of this moment also require that China and China’s new institutions be thoroughly involved as full participants and leaders in the post-2015 era. If nothing else, the scale of global investment and effort to build and rebuild infrastructure requires it.

It is also the case that the post-2015 era will require major replenishments in the World Bank and existing regional development banks, and significantly stronger coordination among them to address global infrastructure investment needs in which the AIIB and the NDB must now be fully involved. The American public and the U.S. Congress need to fully grasp the crucial importance for the United States, of the IMF quota increase and governance reform.  These have been agreed to by most governments but their implementation is stalled in the U.S. Congress. To preserve the IMF’s role in the global financial system and the role of the U.S. in the international community, the IMF quota increase and IMF governance reform must be passed and put into practice. Congressional action becomes all the more necessary as the effort is made to reshape the global system of international institutions to accommodate new powers and new institutions within a single system rather than stumble into a fragmented, fractured, and fractious global order where differences prevail over common interests.

The IMF cannot carry out its significant responsibility for global financial stability without more resources. Other countries cannot add to IMF resources proportionately without U.S. participation in the IMF quota increase.   Without the US contribution, IMF members will have to fund the IMF outside the regular IMF quota system, which means de-facto going around the United States and reducing dramatically the influence of the U.S. in the leadership of the IMF. This is a self-inflicted wound on the U.S., which will damage U.S. credibility, weaken the IMF, and increase the risk of global financial instability. By blocking the IMF governance reforms in the IMF agreed to by the G-20 in 2010, the U.S. is single-handedly blocking the implementation of the enlargement of voting shares commensurate with increased emerging market economic weights.  This failure to act is now widely acknowledged by American thought leaders to be encouraging divergence rather than convergence in the global system of institutions, damaging U.S. interests.

IV. Toward a single monitoring mechanism for the global system of international institutions

The P2015 agenda requires a big push toward institutionalizing a single mechanism for the coordination of the global system of international institutions.  The international coordination arrangement today, is the Global Partnership for Effective Development Cooperation created at the Busan High-Level Forum on Aid Effectiveness in 2011.  This arrangement, which recognizes the increasingly complex context and the heightened tensions between emerging donor countries and traditional western donors, created a loose network of country platforms, regional arrangements, building blocks and forums to pluralize the architecture to reflect the increasingly complex set of agents and actors. This was an artfully arranged compromise, responding to the contemporary force field four years ago.

Now is a different moment. The issues facing the world are both systemic and urgent; they are not confined to the development of developing countries, and still less to foreign aid. Geopolitical tensions are, if anything, higher now than then.  But they also create greater incentives to find areas of cooperation and consensus among major powers who have fundamentally different perspectives on other issues. Maximizing the sweet spots where agreement and common interest can prevail is now of geopolitical importance.  Gaining agreement on institutional innovations to guide the global system of international institutions in the P2015 era would be vital for effective outcomes but also importantly ease geopolitical tensions.

Measurement matters; monitoring and evaluation is a strategic necessity to implementing any agenda, and still more so, an agenda for systemic transformation.  As a result, the monitoring and evaluation system that accompanies the P2015 SDGs will be crucial to guiding the implementation of them.  The UN, the OECD, the World Bank, and the IMF all have participated in joint data gathering efforts under the IDGs  in the 1990s and the MDGs in the 2000s.   Each of these institutions has a crucial role to play, but they need to be brought together now under one umbrella to orchestrate their contributions to a comprehensive global data system and to help the G20 finance ministers coordinate their functional programs.   

The OECD has established a strong reputation in recent years for standard setting in a variety of dimensions of the global agenda.  Given the strong role of the OECD in relation to the G20 and its broad outreach to “Key Partners” among the emerging market economies, the OECD could be expected to take a strong role in global benchmarking and monitoring and evaluation of the P2015 Agenda.  The accession of China to the OECD Development Centre, which now has over fifty member countries, and the presence and public speech of Chinese Premier Li Keqiang at the OECD on July 1st, bolsters the outreach of the OECD and its global profile.

But national reporting is the centerpiece and the critical dimension of monitoring and evaluation.  To guide the national reporting systems and evaluate their results, a  new institutional arrangement is needed that is based on national leaders with responsibility for implementation of the sustainable development agendas from each country and is undertaken within the parameters of the global SDGs and the P2015 benchmarks.

V.   Strengthening global governance and G20 roles

G-20 leaders could make a significant contribution to providing the impetus toward advancing systemic sustainability by creating a G-20 Global Sustainable Development Council charged with pulling together the national statistical indicators and implementing benchmarks on the SDGs in G-20 countries.  The G-20 Global Sustainable Development Council (G-20 GSDC) would consist of the heads of the presidential committees on sustainable development charged with coordinating P2015 implementation in G-20 countries.  Representing systemically important countries, they would also be charged with assessing the degree to which national policies and domestic efforts by G20 countries generate positive or negative spillover effects for the rest of the world.  This G-20 GSDC would also contribute to the setting of standards for the global monitoring effort, orchestrated perhaps by the OECD, drawing on national data bases from all countries using the capacities of the international institutions to generate understanding of global progress toward systemic sustainability. 

The UN is not in a position to coordinate the global system of international institutions in their functional roles in global sustainable development efforts.  The G-20 itself could take steps through the meetings of G-20 Finance Ministers to guide the global system of international institutions in the implementation phase of the P2015 agenda to begin in 2016. The G-20 already has a track record in coordinating international institutions in the response to the global financial crisis in 2008 and its aftermath. The G-20 created the Financial Stability Board (FSB), enlarged the resources for the IMF, agreed to reform the IMF’s governance structure, orchestrated relations between the IMF and the FSB, brought the OECD into the mainstream of G-20 responsibilities and has bridged relations with the United Nations by bringing in finance ministers to the financing for development conference in Addis under Turkey’s G-20 leadership. 

There is a clear need to coordinate the financing efforts of the IMF, with the World Bank and the other regional multilateral development banks (RMDBs), with the AIIB and the BRICS NDB, and with other public and private sector funding sources, and to assess the global institutional effort as whole in relation to the P2015 SDG trajectories.  The G-20 Finance Ministers grouping would seem to be uniquely positioned to be an effective and credible means of coordinating these otherwise disparate institutional efforts.  The ECOSOC Development Cooperation Forum and the Busuan Global Partnership provide open inclusive space for knowledge sharing and consultation but need to be supplemented by smaller bodies capable of making decisions and providing strategic direction.

Following the agreements reached in the three U.N. workstreams for 2015, the China G-20 could urge the creation of a formal institutionalized global monitoring and coordinating mechanism at the China G-20 Summit in September 2016. By having the G-20 create a G-20 Global Sustainable Development Council (G-20 GSDC), it could build on the national commitments to SDG trajectories to be made next year by U.N. members countries and on the newly formed national coordinating committees established by governments to implement the P2015 Agenda, giving the G-20 GSDC functional effectiveness, clout and credibility.   Whereas there is a clear need to compensate for the sized-biased representation of the G20 with still more intensive G-20 outreach and inclusion, including perhaps eventually considering shifting to a constituency based membership, for now the need in this pivotal year is to use the momentum to make political decisions and institutional innovations which will crystallize the P2015 strategic vision toward systemic sustainability into mechanisms and means of implementation.

By moving forward on these recommendations, the G-20 Leaders Summits would be strengthened by involving G-20 leaders in the people-centered P2015 Agenda, going beyond finance to issues closer to peoples’ homes and hearts. Systemically important countries would be seen as leading on systemically important issues.  The G-20 Finance Ministers would be seen as playing an appropriate role by serving as the mobilizing and coordinating mechanism for the global system of international institutions for the P2015 Agenda.  And the G-20 GSDC would become the effective focal point for assessing systemic sustainability not only within G20 countries but also in terms of their positive and negative spillover effects on systemic sustainability paths of other countries, contributing to standard setting and benchmarking for global monitoring and evaluation.    These global governance innovations could re-energize the G20 and provide the international community with the leadership, the coordination and the monitoring capabilities that it needs to implement the P2015 Agenda. 

Conclusion

As the MDGs culminate this year, as the three U.N. workstreams on SDGs, FFD, and UNFCC are completed, the world needs to think ahead to the implementation phase of the P2015 sustainable development agenda. Given the scale and scope of the P2015 agenda, these five governance innovations need to be focused on now so they can be put in place in 2016.

These will ensure (i) that national political commitments and engagement by all countries are made by designing, adopting, and implementing their own sustainable development trajectories and action plans; (ii) that national presidential committees are established, composed of key ministers and private sector leaders to coordinate each country’s comprehensive integrated sustainability strategy; (iii) that all governments and international institutions are accepted by and participate in a single global system of international institutions;   (iv) that a G-20 monitoring mechanism be created by the China G-20 in September 2016 that is comprised of the super-minister officials heading the national presidential coordinating committees implementing the P2015 agenda domestically in G-20 countries, as a first step;  and (v) that the G-20 Summit leaders in Antalya in November 2015 and in China in September 2016 make clear their own commitment to the P2015 agenda and their responsibility for its adaption, adoption and implementation internally in their countries but also for assessing G-20 spillover impacts on the rest of the world, as well as for deploying their G-20 finance ministers to mobilize and coordinate the global system of international institutions toward achieving the P2015 agenda.

Without these five structural changes, it will be more likely that most countries and actors will follow current trends rather than ratchet up to the transformational trajectories necessary to achieve systemic sustainability nationally and globally by 2030.

References

Ye Yu, Xue Lei and Zha Xiaogag, “The Role of Developing Countries in Global Economic Governance---With a Special Analysis on China’s Role”, UNDP, Second High-level Policy Forum on Global Governance: Scoping Papers, (Beijing: UNDP, October 2014).

Zhang Haibing, “A Critique of the G-20’s Role in UN’s post-2015 Development Agenda”, in Catrina Schlager and Chen Dongxiao (eds), China and the G-20: The Interplay between an Emerging Power and an Emerging Institution, (Shanghai: Shanghai Institutes for International Studies [SIIS] and the Friedrich Ebert Stiftung [FES], 2015) 290-208.

Global Review, (Shanghai:  SIIS, 2015,) 97-105.

Colin I. Bradford, “Global Economic Governance and the Role International Institutions”, UNDP, Second High-level Policy Forum on Global Governance: Scoping Papers, (Beijing: UNDP, October 2014).

Colin I. Bradford, “Action implications of focusing now on implementation of the   post-2015 agenda.”, (Washington: The Brookings Institution, Global Economy and Development paper, September 2015).

Colin I. Bradford, “Systemic Sustainability as the Strategic Imperative for the Future”, (Washington: The Bookings Institution, Global Economy and Development paper; September 2015). 

Wonhyuk Lim and Richard Carey, “Connecting Up Platforms and Processes for Global Development to 2015 and Beyond:  What can the G-20 do to improve coordination and deliver development impact?”, (Paris: OECD  Paper, February 2013).

Xiaoyun Li and Richard Carey, “The BRICS and the International Development System: Challenge and Convergence”, (Sussex: Institute for Development Studies, Evidence Report No. 58, March 2014).

Xu Jiajun and Richard Carey, “China’s Development Finance: Ambition, Impact and Transparency,” (Sussex :  Institute for Development Studies, IDS Policy Brief, 2015).

Soogil Young, “Domestic Actions for Implementing Integrated Comprehensive Strategies:  Lessons from Korea’s Experience with Its Green Growth Strategy”, Washington: Paper for the Brookings conference on “Governance Innovations to Implement the Post-2015 Agenda for Sustainable Development”, March 30, 2015).

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The Iran nuclear deal: Prelude to proliferation in the Middle East?

Robert Einhorn and Richard Nephew analyze the impact of the Iran deal on prospects for nuclear proliferation in the Middle East in their new monograph.

      
 
 




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Iran’s regional rivals aren’t likely to get nuclear weapons—here’s why

In last summer’s congressional debate over the Iran nuclear deal, one of the more hotly debated issues was whether the deal would decrease or increase the likelihood that countries in the Middle East would pursue nuclear weapons. Bob Einhorn strongly believes the JCPOA will significantly reduce prospects for proliferation in the Middle East

      
 
 




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The African leadership transitions tracker: A tool for assessing what leadership change means for development

Editor's Note: In this blog, Vera Songwe introduces the African Leadership Transitions Tracker, a new interactive that aims to start a broader conversation about leadership transitions and what they mean for the region and beyond. On March 28, Nigerians voters will go to the polls to participate in their nation’s fifth election since the military…

      
 
 




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Benin’s landmark elections: An experiment in political transitions

Benin is the new field of dreams and promises kept. In a year when many countries on the continent are changing their constitutions to allow for incumbent presidents to run yet again, Benin, under President Yayi Boni, is respecting the term limits set down in its constitution. Thanks in part to pressure from the population,…

      
 
 




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Japan-Korea relations after Abe’s war anniversary statement: Opportunity for a reset?

In remarks delivered at the Heritage Foundation, Evans Revere discussed Prime Minister Abe’s statement marking the 70th anniversary of the end of WWII, and how the statement could in fact improve Japan-Korea relations.

      
 
 




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Collusion to Crackdown: Islamist-Military Relations in Egypt


Nearly two years after ousting President Muhammad Morsi, Egypt’s military continues to crack down on the Muslim Brotherhood. Much like during Egypt’s 1952-54 political transition, the recent interactions between the powerful armed state bureaucracy and the influential religious organization have had a major impact on the country’s political trajectory. In both instances, the military and Muslim Brotherhood initially cooperated before ultimately clashing violently. How has each entity determined what approach to take toward the other? What does a continued imbalance in civil-military relations mean for Egypt’s future?

In a new Brookings Doha Center Analysis Paper, Omar Ashour examines the legacies and patterns of cooperation and conflict between the leaderships of Egypt’s military and the Muslim Brotherhood. Relying on extensive field research, he analyzes how each entity has made its critical decisions regarding the other by applying various decision-making models. Ashour considers the impact of cost-benefit analysis, organizational dynamics, factional disputes, and psychological factors to gain a deep understanding of the leaders’ motives.

Read "Collusion to Crackdown: Islamist-Military Relations in Egypt"

Ashour concludes that Egypt's prospects for social stability and economic recovery will remain bleak if the relationship between the military and the Muslim Brotherhood is not redefined within institutional, democratic rules of political competition. He argues that Egypt’s military should embrace a balanced civil-military relationship to realize broad, long-term benefits and avoid otherwise inevitable and costly clashes with segments of Egyptian society. As for the Muslim Brotherhood, Ashour recommends that it reevaluate its recent decisions and work to develop a sustained, solid, and cross-ideological civilian front that can pressure the military to leave politics and allow for democratization.

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Publication: The Brookings Doha Center
Image Source: © Stringer . / Reuters
     
 
 




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Turn a Light On: Electricity Sector Reform in Iraq


The need to confront and drive back the forces of the Islamic State (IS) has pushed long-term reform efforts in Iraq far down the list of priorities. Yet pressing economic reforms – such as restructuring and rebuilding the country’s energy sector – increasingly seem a strategic necessity, as oil prices have fallen far below government projections. How can politicians be persuaded to invest in Iraq’s long-term future at a time of imminent security threats? How can the efforts to reform the Iraqi electricity network be harnessed to reestablish government authority in newly retaken areas?

Luay Al-Khatteeb and Harry Istepanian address these questions through analysis of past attempts at electricity sector reform. They argue that even before IS advances plunged Iraq into a deep political and security crisis, divisions within the Iraqi parliament and various government agencies had stymied efforts at reform. Still, they note that improving the provision of electricity is a clear opportunity to improve basic services to its citizens, boosting government legitimacy and acceptance in areas under its control, especially as it seeks to retake territory from IS.

Khatteeb and Istepanian hold that a comprehensive strategy is needed, one that incorporates an expanded role for the private sector, rationalized electricity tariffs, and a host of technical fixes to improve efficiency. Ultimately, they contend, much will depend on whether the government of Prime Minister Haidar al-Abadi views the IS threat as an excuse for inaction or an impetus for change.

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Publication: The Brookings Doha Center
Image Source: © Mohammed Ameen / Reuters
     
 
 




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Dealing with Delhi: How culture shapes India’s Middle East policy


Indian Prime Minister Narendra Modi’s recent visit to the United Arab Emirates revealed New Delhi’s intention to bolster bilateral relations with the Gulf states. It was the first visit by an Indian prime minister in over 30 years, demonstrating the country’s renewed focus on expanding ties with the region it has always called “West Asia.” Although India and the Middle East share a long history of trade, immigration and cultural exchange, relations have yet to reach their full potential.

Read "Dealing with Delhi: How culture shapes India’s Middle East policy"

In this policy briefing, Kadira Pethiyagoda highlights the importance of an under-reported aspect of the relationship – culture. The author explains the role it plays in India’s policies toward the region, particularly under the current government, and argues that Gulf states need to understand the impact of Indian values and identity. Pethiyagoda provides recommendations on how the Gulf states can, through better understanding the cultural drivers of Indian foreign policy, build stronger ties with India, thereby advancing both economic and strategic interests.

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Publication: Brookings Doha Center
Image Source: © Adnan Abidi / Reuters
      
 
 




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What do Americans think of the BDS movement, aimed at Israel?

Even as Americans are preoccupied with the impeachment process and a raft of other news developments, the issue of U.S. policy toward Israel has not escaped our national debate as of late. President Trump’s December executive order on anti-Semitism, which some saw as an attempt to limit free speech on Israel policy, followed a July resolution…

       




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Computer science can help Africans develop skills of the future

The world is well into the Fourth Industrial Revolution, and yet education systems have not kept pace. Young people are often not learning the skills they need to succeed in the 21st century and interact with their changing world, such as digital literacy, problem solving, and critical thinking. Despite widespread recognition of the importance of…

       




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Can leading universities be engines of sustainable development? A conversation with Judith Rodin

In our ongoing exploration of trends in higher education, we are looking at how leading higher education institutions can contribute to much needed social change both inside and outside their classroom walls. There is an increasing interest among universities around the world to actively contribute to the United Nations Sustainable Development goals, well beyond their…

       




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Nigeria’s 2015 Elections: Prologue to the Past?

In the 45 years since the Nigerian civil war ended in January 1970, Nigeria has often seemed on the verge of making significant political advances. While its population soared, however, the country stumbled through one contentious electoral exercise after another, interspersed with military rule. The recent 2015 elections, which elevated Muhammadu Buhari to the powerful…

      
 
 




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Nigeria’s Renewed Hope for Democratic Development

When the Union Jack was lowered in Nigeria on October 1, 1960, the potential of Africa’s most populous nation seemed boundless—and that was before its abundant reserves of petroleum and natural gas were fully known. However, Nigeria has since underperformed in virtually every area. A massive fuel shortage, just days before the historic change in…

      
 
 




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Model notices and plan sponsor education on lifetime plan participation


I appreciate this opportunity to share my thoughts about ways that retirement plans can provide clear, concise and objective information to participants that enables them to make appropriate decisions.  However, I would go beyond that to provide information that also motivates employees towards actions that will prove to be in their long-term best interest.

General Thoughts about Participant Communications

The shift from traditional pensions to the current defined contribution system places most of the responsibility for making decisions on the participant.  Automatic enrollment and similar features assist them by combining several formerly potentially complex decisions about whether to participate, how much to save and what investment vehicle to use into one question that the employee can effectively answer by doing nothing.  While the result may not be optimal in all situations, it is certainly better for the saver than not saving at all or waiting until he or she has all of the answers – a day that for many may never come.  For these reasons, automatic enrollment and escalation are extremely popular with both those who accept the automatic choices and those who opt out.

Unfortunately, at this time, automatic mechanisms are not available for every decision that an employee might need to make between starting to save and retirement.  Over time, additional mechanisms that are in development will further simplify these plans, but they are not available yet.  Today’s automatic mechanisms also do not necessarily affect the attitudes that participants may have about their saving balances and how they might be used.  To assist in these areas, effective participant communication is needed.

In order to be effective, communications and notices to employees must have a consistent message that regularly appears throughout an employee’s career.  No single notice, no matter how effectively worded or how timely it is provided, will be as effective as a regular series of messages.  And in order to be effective, notices and statements need to be geared to the needs of the participant rather than to provide legal cover to the plan sponsor for any unanticipated situation.  This requires that they be short, clear, simple and to the point. 

This need for regular communication as opposed to a single notice or series of notices is especially true for withdrawal options.  Whether the participant is leaving the employer or retiring, they need to have key information well in advance of when it is needed.  Otherwise, the saver may be influenced by others who are not acting in their best interests or make a decision based on advice from well-meaning, but poorly informed family friends.

An effective participant education plan for lifetime plan participation and effective withdrawal options should have at least three separate parts, which are detailed below.  These include effective information contained in the quarterly statement; notices at the time an employee leaves the plan due to a job change, and a pre-retirement education campaign. 

While all three must have consistent messages, they should also be tailored for specific circumstances.  What follows is a general discussion, as effective model forms require field-testing in focus groups and similar settings.  Unfortunately, forms developed by financial professionals with a deep understanding of key issues often gloss over important background information or have technical wording that confuses non-professionals. 

Another problem with many individual statements and notices is that they contain too much information.  The professionals who developed them recognize the limitations of projection models and seek to compensate by providing a range of results using differing assumptions.  Unfortunately, this either further confuses the reader or appears as a dense block of type that is usually completely skipped.  It is far better to provide a simple illustration with clear warnings of its limitations than to flood the employee with complex information that will be ignored.

Improved Statements with Income Illustrations and Social Security Information

The most important participant education tool is the quarterly statement they receive.  Properly structured, these statements can set the stage for more specific notices before an employee leaves the employer due to either a new job or retirement.  Today’s statements are often too long and inadvertently cause the employee to focus on account balances rather than seeing the retirement plan as a source of future income.  In many cases, they also fail to note that income from the plan should be added to Social Security for a better estimate of total retirement income.  Two major innovations would be to add both income illustrations and to combine 401k statements with the existing Social Security statement.

Income illustrations: Most of today’s quarterly statements focus almost exclusively on the amount that an individual has saved and how much he or she has gained or lost in the previous quarter.  This focus damages the ability of a participant to see the plan as anything other than a savings account.  Faced with a lump sum of retirement savings that may be a much higher amount than an individual has ever had and little or no practical experience about how to translate that amount into an income stream, it would be very easy for a worker to assume that he or she is much better prepared for retirement than is actually the case.  An income illustration would help savers to make earlier and better decisions about how much they may need to save and how best to manage their retirement assets.

The illustrations should also encourage participation both by including both current and projected balances and by showing the additional income that could be expected if the saver slightly increased his or her contributions. 

Including income illustrations for both current and projected retirement savings balances would have a greater incentive effect than just including current balances.  For younger employees, the very small amount of income that would be produced from their current retirement savings balances may discourage them from further savings and thus have the opposite effect of what is in their long-term best interest and the objective of this disclosure.  Including an income illustration for projected balances that assumes continued participation provides a clearer picture of the extent to which the amount that the individual is saving will meet his or her retirement income needs.

Studies show that an illustration of the additional income that can be derived from a higher level of saving is likely to stimulate the participant to increase his or her savings rate.  Plan sponsors should be encouraged to also include balance projections and income illustrations that show how much retirement income an individual would have if they modestly increased the proportion of their income that they contributed to their retirement savings plan.  For instance, in addition to the income illustrations based on their current balances and projected balances assuming their current savings rate, there might be an illustration based on saving an additional one percent of income and another three percent of income. 

Combining Social Security Statements with Quarterly Statements: As a further way of moving the focus of quarterly statements away from lump sums and investment returns and towards retirement income, an accurate estimate of projected Social Security benefits could be added to at least one annual quarterly statement containing an income illustration.  Some 401(k) providers already simulate Social Security benefits and provide this information to account owners, but these providers lack the income and work history data to make a truly accurate projection.  Collaboration between SSA and 401(k) plan administrators could result in adding information from the once annual Social Security statement to at least one 401(k) quarterly report each year.

Two sets of concerns about using Social Security information would need to be addressed: concerns about privacy and concerns about accuracy. Previous discussions of similar proposals failed because of privacy concerns, as many individuals do not want employers to have access to their Social Security information. Account holders’ privacy is a concern for 401(k) providers too, and providers go to great lengths to protect the confidential data in the quarterly statements. To assuage concerns about the data from SSA, Social Security data could be provided directly to 401(k) administrators rather than employers and included on an annual 401(k) statement only if the administrators meet certain SSA-developed privacy standards. Individuals could have control over this decision through the ability to opt in to the service or to opt out, if the service were automatic. This should preserve individual choice and satisfy persons especially concerned about privacy.

To ensure accuracy and consistency, income illustrations of balances in the 401(k) and SSA projections would need to be produced using compatible methodologies that allow the projected monthly income estimates to be combined for a complete picture of estimated retirement income. This is not a terribly difficult problem.  This reform will give people important information about how to plan their futures. They desperately need this information, and providing it should be fairly simple and cost-effective.

Using an Enhanced Statement as a Base for Additional Guidance and Education

An enhanced quarterly statement with a consistent message that retirement plan participation is intended as retirement income will set the stage for more effective education when the participant leaves the employer.  The current statement format that focuses on aggregate savings amount and the performance of investments sends the message that the balances could be used for other purposes.  This encourage leakage when employees change jobs and may leave the impression that the savers has sufficient resources to use part or all of that money for other purposes.

While the information on investment returns is important and should remain on the statement, it should be de-emphasized, with the focus moving to retirement income that it can provide.  As an aside, let me be clear that I do not favor eliminating the ability to withdraw savings before retirement in the event of an emergency.  For one thing, doing so would reduce participation, and could hurt vulnerable populations that have no other major source of savings.  However, the purpose of the quarterly statement should be to inform savers of their future retirement income, and its orientation should be towards that goal.

Encouraging Participants to Preserve Savings When They Move to a New Job

Several studies show that the biggest source of leakage occurs when employees change jobs.  Part of the reason for this loss of savings may be the way that employers handle the discussion about retirement assets upon separation.  A discussion that is centered on the open question of what should we do with your money may encourage savers to simply ask for their money as a lump sum.  This is especially true if the participant is not informed of the tax consequences of an early withdrawal and the potential effect on future retirement income.

On the other hand, if the participant has received a consistent message that the account is for retirement income, and is informed of the potential consequences of withdrawing the money, they would be less likely to take the funds and more likely to leave the money in the current employer’s plan or to roll it into a plan offered by the new employer or an IRA.  Of course, part of this decision would be determined by whether the current employer is willing to allow the money to remain in their plan or if they would prefer it to be moved to another location.

As a side note, the process of combining retirement savings from one employer to another would be much easier if there is a simple mechanism that can be used to make such transfers.  As I can testify from personal experience, it can be extremely complex to roll retirement money from one employers’ plan to another’s even for those of us who work in this field.  Plan administrators from both the sending and receiving plans make this process overly difficult in part because one party needs to know if it is a legitimate transfer as opposed to a withdrawal, and the other needs to know that the money it is receiving has the proper tax status.  While it is beyond the scope of today’s hearing, it is definitely worth the effort for regulators and if necessary legislators to simplify the process and encourage automatic rollovers between employers.

Contents of Model Notices for Participants Changing Employers:

Given this background, a disclosure notice provided to employees who are moving to another employer should include specific information about several topics.  However, a one-shot notice will be far less effective than an educational campaign that includes information about how poor decisions when changing jobs can adversely affect retirement security.  This information should not be limited to when an employee departs; it should also be included in regular communications.

When an employee moves to another employer, he or she needs to know:

  • Ability to retain fund in the account or roll them into another account: The employee should be informed that moving the money to another retirement account, ideally that of the new employer, is the best option.  He or she should also be informed if the current plan is willing to continue to hold the money.  Information about how to effect the rollover and/or a third party willing to assist with the transaction can be provided on a separate sheet.
  • Tax consequences of withdrawing the money: An early withdrawal from a traditional account is usually subject to both income taxes and a penalty.  The employer should be informed of both the combined marginal rate and the total amount of retirement money that will be lost by taking the money out of the system.
  • Effect on retirement security of withdrawing the money: Using an income projection, the participant should be shown that a withdrawal will potentially reduce their income at retirement by a certain dollar amount.  They should also be shown how long it will take to replace that amount of saving.
  • Potential costs of moving to the wrong IRA provider: Moving from a relatively low administrative cost employer plan into an IRA with higher fees could have a major effect on the eventual retirement income.  Participants should be informed of this and offered a separate sheet discussing how to tell if an IRA provider has appropriate fee levels.  This can ge general information rather than tailored to the specific employee.
  • Continuing to save at the same rate in the new employer’s plan: Finally, the employee should be encourage to start saving in the new employer’s plan at least at the same level that they have been contributing to the plan of the current employer.

These disclosures do not need to be extremely detailed or presented in legal terms.  If the participant cannot immediately understand what is being said, the information is essentially useless.  To relieve employers’ worry about legal liability, a model form that protects them from liability would be worth creating.  However, this information is important, and could have a major effect on whether the money leaks out of the retirement system or remains in it.

Finally, the term “model form” does not need to mean a single form.  In cases where a great deal of information needs to be available, one form could summarize the situation, while others provide more detailed information about certain subjects.  However, this does not mean that these other forms should be written in long, legalistic language.  Both the summary form and others should be in clear, concise language with appropriate graphics.

Assisting Participants to Make Appropriate Decisions When They Retire

Decisions about how to translate retirement savings into an appropriate income strategy can be among the most complex that an individual faces.  Even those of us who work in the field can find the decision about whether to use an annuity or longevity insurance to supplement other strategies daunting.  This confusion is only made worse by the focus of today’s quarterly statements on lump sums and investment performance.

Ideally, retirement income disclosures would be combined with an automatic enrollment-like withdrawal strategy that the employee could adopt simply by not opting out.  Unfortunately, while this is the subject of much research by both many groups and companies, it is not currently available.

To be most effective, education on retirement income strategies should not be delayed until the participant reaches a specific age.  Rather, it should begin with the design of the quarterly statement and continue with regular discussions of how to create a retirement strategy throughout an employee’s career.  Even if the participant does not pay much attention for many years, the information will form a backdrop that will be recalled when he or she starts to think about retirement.

Because retirement income strategies are complex, the notices should include both a short summary sheet and individual longer notices on specific topics.  Covered information should include:

  • An overview sheet with general information: A general discussion of how to think of retirement income as well as the general elements that can be combined to provide an appropriate amount of secure income.
  • The role of Social Security: Social Security pays an inflation-indexed annuity that serves as the basis for retirement income strategies.  Employees should be given information about how much they can expect, how to apply for benefits, and the value of delaying their benefits. 
  • What income options are in the employer plan: If the employer plan offers any income options, they should be disclosed and explained.  If not, the employee should be informed that they would need to go outside the plan and given advice on how to select a provider (see below).  This would include the potential problems of turning the money over to a broker to manage.
  • How long an individual is likely to live: Most people have no idea how long they could live in retirement.  A brief discussion of the average longevity for their specific gender and birth cohort along with a notation that average longevity means that half of them will live longer would be helpful.
  • Longevity insurance and how to use it:  Longevity insurance can be a valuable part of a retirement income plan.  How to think about it and choose a policy would be valuable.
  • Using immediate annuities and how to buy one: This is a separate discussion from longevity insurance.  While few of today’s retirees may be interested in immediate annuities, information on how to select one should be included.
  • Positives and negatives of a phased-withdrawal system: Most retirees will use a phased-withdrawal system for at least some of their retirement income.  This would briefly explain the value of one, the drawbacks of withdrawing a set percentage of savings each year, and how to choose a plan.
  • How to choose a financial advisor: Hopefully, may employees will seek the advice of a professional.  If the employer does not provide access to an adviser, tips on how to select one and what questions to ask would be useful.

Again, this is complex information, and employers should also be encouraged to sponsor seminars and counseling sessions for retiring employees.  As mentioned repeatedly, the value of this information and the employee’s receptivity to it would be much greater if it has been part of a regular communications strategy that is simple and accessible.

A Consistent Message Will Enhance Retirement Security

The contents of individual notices are important, but they will be much more effective if they are placed in the context of a communications strategy with a consistent message.  Making the focus of participant education the fact that the purpose of saving in the plan is to produce retirement income rather than lump sums will help participants understand the importance of rolling over their money when changing employers and of developing a sound income strategy when they retire.

Authors

Publication: US Department of Labor Advisory Council on Employee Welfare and Pension Benefit Plans
Image Source: © Max Whittaker / Reuters
      
 
 




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Class Notes: Harvard Discrimination, California’s Shelter-in-Place Order, and More

This week in Class Notes: California's shelter-in-place order was effective at mitigating the spread of COVID-19. Asian Americans experience significant discrimination in the Harvard admissions process. The U.S. tax system is biased against labor in favor of capital, which has resulted in inefficiently high levels of automation. Our top chart shows that poor workers are much more likely to keep commuting in…

       




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Trump’s politicization of US intelligence agencies could end in disaster

       




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Artificial Intelligence Won’t Save Us From Coronavirus

       




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Record-setting White House staff turnover continues with news of Counsel’s departure

With the recent departure of White House Counsel, Don McGahn (and premature announcement of his successor, Pat Cipollone), turnover within the most senior level of White House staff members bumped up to 83 percent. Ten of the twelve Tier One staff members have departed, leaving only Cabinet Secretary, Bill McGinley, and Chairman of the Council…

       




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Kirstjen Nielsen, secretary of Homeland Security, out amidst national emergency

Kirstjen Nielsen, the secretary of Homeland Security, submitted her resignation letter on Sunday, April 7, 2019, marking the 15th Cabinet-level departure in the Trump administration since January 2017. By contrast, President Obama had seven departures after three full years in office, and President George W. Bush had four departures after three full years. Cabinet turnover…

       




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A modern tragedy? COVID-19 and US-China relations

Executive Summary This policy brief invokes the standards of ancient Greek drama to analyze the COVID-19 pandemic as a potential tragedy in U.S.-China relations and a potential tragedy for the world. The nature of the two countries’ political realities in 2020 have led to initial mismanagement of the crisis on both sides of the Pacific.…

       




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Fewer field trips mean some students miss more than a day at the museum


As every good teacher knows, education is not just about academics. It is about broadening horizons and discovering passions. (The root of education is the Latin e ducere, meaning “to draw out.”) From this perspective, extra-curricular activities count for a great deal. But as Robert Putnam highlights in his book Our Kids, there are growing class gaps in the availability of music, sports, and other non-classroom activities.

Fewer field trips?

Schools under pressure may also cut back on field trips outside the school walls to parks, zoos, theaters, or museums. In the 2008-09 school year, 9 percent of school administrators reported eliminating field trips, according to the annual surveys by the American Association of School Administrators (AASA). That figure rose through the recession:

Just 12 percent of the administrators surveyed about 2015-16 said they had brought back their field trips to pre-recession levels. Museums around the country report hosting fewer students, from Los Angeles and Sarasota, to Minneapolis, and Columbia, Missouri. None of this is definitive proof of a decline in field trips, since we are relying on a single survey question. But it suggests a downward trend in recent years.

Museums help with science tests

If some children are missing out on field trips, does it matter? They may be nice treats, but do they have any real impact, especially when they take time away from traditional learning? There is some evidence that they do.

Middle school children with the chance to go on a field trip score higher on science tests, according to a 2015 study by Emilyn Ruble Whitesell.

She studied New York City middle schools with teachers in Urban Advantage, a program that gives science teachers additional training and resources—as well as vouchers for visiting museums. In some schools, the Urban Advantage teachers used the field trip vouchers more than others. Whitesell exploits this difference in her study, and finds that attending a school with at least 0.25 trips per student increased 8th grade scores by 0.026 standard deviations (SD). The odds of a student passing the exam improved by 1.2 percentage points. There were bigger effects for poor students, who saw a 0.043 SD improvement in test scores, and 1.9 percentage point increase in exam pass rates.

Art broadens young minds

Students visiting an art museum show statistically significant increases in critical thinking ability and more open-minded attitudes, according to a randomized evaluation of student visits to the Crystal Bridges Museum in northwest Arkansas. One example: those who visited the museum more often agreed with statements like: “I appreciate hearing views different from my own” and “I think people can have different opinions about the same thing.” The effects are modest. But the intervention (a single day at the museum) is, too. Again, there were larger effects for poor students:

All this needs to be put in perspective. In comparison with the challenge of closing academic gaps and quality teaching, field trips are small beer. But schools create citizens as well as undergraduates and employees. It matters, then, if we have allowed field trips to become a casualty of the great recession.

Authors

Image Source: © Jacob Slaton / Reuters
     
 
 




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Modeling equal opportunity


The Horatio Alger ideal of upward mobility has a strong grip on the American imagination (Reeves 2014). But recent years have seen growing concern about the distance between the rhetoric of opportunity and the reality of intergenerational mobility trends and patterns.

The related issues of equal opportunity, intergenerational mobility, and inequality have all risen up the agenda, for both scholars and policymakers. A growing literature suggests that the United States has fairly low rates of relative income mobility, by comparison to other countries, but also wide variation within the country. President Barack Obama has described the lack of upward mobility, along with income inequality, as “the defining challenge of our time.” Speaker Paul Ryan believes that “the engines of upward mobility have stalled.”

But political debates about equality of opportunity and social and economic mobility often provide as much heat as light. Vitally important questions of definition and motivation are often left unanswered. To what extent can “equality of opportunity” be read across from patterns of intergenerational mobility, which measure only outcomes? Is the main concern with absolute mobility (how people fare compared to their parents)—or with relative mobility (how people fare with regard to their peers)? Should the metric for mobility be earnings, income, education, well-being, or some other yardstick? Is the primary concern with upward mobility from the bottom, or with mobility across the spectrum?

In this paper, we discuss the normative and definitional questions that guide the selection of measures intended to capture “equality of opportunity”; briefly summarize the state of knowledge on intergenerational mobility in the United States; describe a new microsimulation model designed to examine the process of mobility—the Social Genome Model (SGM); and how it can be used to frame and measure the process, as well as some preliminary estimates of the simulated impact of policy interventions across different life stages on rates of mobility.

The three steps being taken in mobility research can be described as the what, the why, and the how. First, it is important to establish what the existing patterns and trends in mobility are. Second, to understand why they exist—in other words, to uncover and describe the “transmission mechanisms” between the outcomes of one generation and the next. Third, to consider how to weaken those mechanisms—or, put differently, how to break the cycles of advantage and disadvantage.

Download "Modeling Equal Opportunity" »

Downloads

Publication: Russell Sage Foundation Journal of Social Sciences
     
 
 




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How a U.K. Labour party meltdown could play out in wake of Brexit vote


Britain’s Conservative Party just tore itself apart over the EU referendum; David Cameron was forced to resign as prime minister. Yet the party in meltdown is Labour. Polling out this past weekend shows Labour drawing 31%, vs. 37% for Conservatives, if a general election were held tomorrow.

The Conservative Party, showing once again its extraordinary capacity for self-preservation, is closing ranks behind new Prime Minister Theresa May. Still, how can the Tories be riding so high after such a political omnishambles? One doesn’t have to look far for an answer: the hard-left Labour leader, Jeremy Corbyn.

Asked who is or would be the best prime minister, just 16% of British voters give Mr. Corbyn the thumbs-up, compared with 52% for Ms. May. Fewer than half of Labour supporters (48%) think Mr. Corbyn would be the best PM. In her first outing in the House of Commons, Ms. May easily trounced Mr. Corbyn. (Her performance was described by the left-leaning Guardian newspaper as a “brutally brilliant” debut.) No wonder most of his parliamentary colleagues have abandoned him, forcing a leadership contest.

Again, the Conservative Party has just presided over an amateurish, disastrous session of British political history. That Tories still dominate is less about their strength than their political opponents’ weakness.

So: What will happen? I’ve just been in London, and conversations with political insiders suggest that this is the most likely scenario to play out:

First, Jeremy Corbyn, having attracted many left-wingers onto party rolls, fends off challenger Owen Smith to retain the leadership of the Labour Party.

Next, the majority of Labour MPs set themselves up as a separate parliamentary group.

As the second-largest group in parliament, these MPs would become the official opposition. They could call themselves anything–say, New Labour Party. (Read this excellent summary of the constitutional implications by Meg Russell of the University College London). This means money and status. If the anti-Corbyn MPs can’t get a new leader, they’ll get a new party.

In the meantime, a few remaining anti-Corbyn MPs stay behind and try to recapture their party. The key here, for those interested in the details, is to take control of Unite, the U.K.’s largest trade union. (Unite’s leader, Len McCluskey, is a strong supporter of Mr. Corbyn and has rallied the union’s members behind him, but his term ends soon.)

If the Labour Party, reduced to a parliamentary rump, remains in Mr. Corbyn’s hands, the next general election would be the moment when the split becomes formal. The New Labour Party would try to attract Liberal Democrat and Green supporters, as well as pro-European conservatives.

Theresa May is likely to wait until the next scheduled general election, in 2020, to face voters. But if Labour were to split, she might decide to call a snap general election to take advantage of opponents’ disarray. Either way, it seems likely the Tories would win.

Center-left parties across the globe seem to be struggling to connect with the anxieties of ordinary voters, leaving them at the mercy of populist appeals. Between populist surges and volatile electorates, we are seeing destabilizing forces at work in politics. Strong political parties act as stabilizers in stormy waters. Whatever one’s individual politics, the fate of the Labour Party in Britain, and perhaps the Republican Party in the U.S., should concern us all.


Editor's note: This piece originally appeared in The Wall Street Journal

Publication: Wall Street Journal
Image Source: © Neil Hall / Reuters
      
 
 




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2020 and beyond: Maintaining the bipartisan narrative on US global development

It is timely to look at the dynamics that will drive the next period of U.S. politics and policymaking and how they will affect U.S. foreign assistance and development programs. Over the past 15 years, a strong bipartisan consensus—especially in the U.S. Congress—has emerged to advance and support U.S. leadership on global development as a…

       




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Will foreign aid matter in the 2020 election?

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In the shadow of impeachment hearings, dueling visions for the nation

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The Economic Consequences of Delays in US Climate Policy

A delay in the implementation of U.S. climate policy, whether the policy is an EPA regulation or a carbon tax, could mean more stringent policies are necessary later. Brookings scholars have conducted new economic modeling to compare the economic outcomes of modest climate policy action now with the potential consequences of more stringent policies later,…

       




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China’s carbon future: A model-based analysis

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Non-state actors in education in developing countries


Introduction

Reaching education goals in the coming years will require sharp increases in funding and better delivery. Despite a global focus on improving access to education, nearly 60 million children in developing countries remain out of primary school and increased investments have not translated to better education quality or improved learning outcomes (UNESCO 2015a). Even with an increase in domestic public expenditure, UNESCO estimates that the financing gap for delivering good quality universal education from pre-school through junior secondary levels by 2030 in low-income countries will be $10.6 billion, on average, between 2015 and 2030—over four times the level currently provided by official donors ($2.3 billion) (UNESCO 2015b).

Closing acute financing and delivery gaps that prevent access to quality education will be a major challenge, requiring all hands on deck. Domestic governments and foreign donors will need to step up their game substantially, but fiscal and capacity constraints are likely to prevent them remedying resource deficits on their own in the short term. Non-state actors—mainly religious and charitable organizations, private (“foundation”) schools, and a small number of for-profit schools—are already partially filling the gaps, although the precise extent of their services and their impact is unknown.

Determining the appropriate role of non-state actors in education is a contentious topic among specialists. Disagreements have revolved around serious normative issues, including such basic questions as whether non-state provision is consistent with the principle of education as a human right, and serious empirical questions relating to quality and equity implications. This discussion has been blurred by definitional issues (i.e., what is non-state and private education?); lack of clarity over distinctions between ownership, delivery, and financing; a lack of accurate data on current and potential provision rates; and an insufficient base of evidence from which to draw clear conclusions on the effectiveness of non-state engagement in education. These problems have made it difficult to generate comparisons across empirical studies, leading to significant variation in the interpretation of evidence. For some observers, evidence has fueled concern that non-state education is violating human rights principles (e.g., the report by the United Nations Rapporteur on Education),1 while for others it has provided encouragement that non-state engagement can help address financing and delivery challenges (e.g., Tooley 2009).

Our goal is to provide a neutral background to this debate and identify areas of common ground. Beginning with some big picture facts, this paper develops a detailed language around non-state actors in education. We then outline current issues and poles of debate around engagement of non-state actors in education and provide an assessment of the depth of available data and evidence. To close, we establish a typology and propose a framework for discussions around the role of non-state actors in basic education and how these actors can best contribute to the achievement of Education for All and the Sustainable Development Goals (SDGs). Our paper refers largely to basic education, including pre-primary, primary, and lower-secondary, as this is the main focus of much recent discussion around the role of non-state actors in education and an area of strong growth in developing countries.

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Using impact bonds to achieve early childhood development outcomes in low- and middle-income countries


The confluence of the agreement on 17 Sustainable Development Goals (SDGs, or Global Goals) in 2015, and the increased attention being paid to the role of non-traditional actors in contributing to shared prosperity, provide a unique opportunity to focus attention on attempts to identify promising new solutions to the barriers that impede the full development of the world’s youngest citizens. Current estimates indicate that 200 million children globally under the age of 5 are at risk of not reaching their development potential. With these goals, the global community has a tremendous opportunity to change the course of history. There is evidence that certain early childhood development (ECD) interventions—spanning the nutrition, health, water and sanitation, education, social protection, and governance sectors from conception to age 5—have high potential to help to achieve the SDGs related to child development. Furthermore, early childhood interventions have been found to improve adult health and education levels, reduce crime, and raise employment rates, which will be paramount to achieving global economic, climate, and physical security.

Impact bonds have the potential to address some of the main financing and delivery constraints faced in ECD. By providing upfront private capital, impact bonds could help to address service provider liquidity constraints and leverage public capital by allowing the government to connect preventive programs with future benefits to individuals, society, and the economy. Impact bonds also have the potential to drive performance management, support monitoring and evaluation, and create accountability, which all help to address quality and capacity constraints. By fostering innovation, experimentation and adaptive learning in service delivery, cost-effective solutions could be identified through impact bonds. By producing evidence of outcome achievement, impact bonds could shift the focus toward effective ECD programs. Finally, collaboration across stakeholders—a necessary component of impact bonds—has the potential to allow for alignment of interests and a win-win situation for investors, outcome funders, and program beneficiaries alike.

The high participation of non-state actors and potentially significant returns in ECD make it a promising sector for impact bonds. Unlike other services that may have entrenched interests, the multitude of agencies and non-state entities financing and providing ECD services potentially allows for more experimentation. The preventive nature of ECD programs also fits well with the core feature of SIBs, which is that preventive investments will result in valuable short- and potentially long-term outcomes. There is evidence that ECD interventions can have immense effects on later-life outcomes. For example, a longitudinal study of a program in Jamaica, in which participants received weekly visits from community health workers over a 2-year period, was found to increase the earnings of participants by 25 percent, 20 years later.

There may, however, be some particular challenges associated with applying impact bonds in the ECD sector. Impact bonds (and other Payment by Results mechanisms tied to outcomes) require meaningful outcomes that are measureable within a timeframe that is reasonable to the outcome funder (and investors in the case of an impact bond). Meaningful outcomes are outcomes that are intrinsically or extrinsically valuable. Intrinsically valuable outcomes that are measureable within a reasonable timeframe could be extrinsically valuable if they are proxies for long-term benefits to individuals, society, or the economy. The delay between ECD interventions and later-life results may prove an impediment in some cases. By identifying appropriate interim measures such as language development, socioemotional development, and schooling outcomes that may proxy for desirable longer-term outcomes, the issue of delay could be mitigated. For example, there is evidence that early stimulation and health programs can have statistically significant effects on schooling outcomes in the short-run. An increase in focus on the intrinsic value of short-term outcomes that result from ECD interventions, such as child survival, is also important.

As the global community moves beyond the Millennium Development Goals to a set of Global Goals and associated targets linked to measurable outcomes, there is an opportunity to demonstrate a commitment to invest in future generations. Leveraging upfront funding, focusing on outcomes through adaptive learning and testing new ways to deliver early childhood interventions more effectively are all means of achieving the ECD-related goals. Despite the hype around all of the new financing mechanisms, the keys to creating high-quality, locally appropriate programs remains simple—real-time collection of outcome data, the freedom to fail, and the flexibility to course-adjust. In some circumstances social service provision based on outcomes and adaptive learning may require mechanisms like impact bonds or other Payment by Results mechanisms. In other circumstances it may not. As this very nascent field continues to grow, more research will be needed to capture lessons learned, contextualize them within the larger landscape of ECD financing and service provision, and apply them to real-world social challenges with the world’s youngest and most disadvantaged populations at the forefront of the conversation. 

Read the previous report on the landscape of impact bonds across sectors and geography »

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South Africa is the first middle-income country to fund impact bonds for early childhood development


March 18 was an historic day for early childhood development (ECD) financing—the Departments of Social Development and Health of the Western Cape province of South Africa committed 25 million rand ($1.62 million) in outcome funding for three social impact bonds (SIBs) for maternal and early childhood outcomes. This is the first ever funding committed by a middle-income government for a SIB—to date no low-income country governments have participated in a SIB either—making South Africa’s choice to pioneer this new path especially exciting.

A SIB is a financing mechanism for social outcomes where investors provide upfront capital for services and a government agency repays investors contingent on outcome achievement. There are currently two active development impact bonds or DIBs (where a donor provides outcome funding rather than a government agency) in middle-income countries, one for coffee production in Peru and one for girls’ education in India. The South African SIBs, whose implementation was facilitated by the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town and Social Finance U.K. as well as other organizations, will be the first impact bonds in Africa.

We have been following closely the development of these SIBs over the last two years through our research on the potential applications of impact bonds for ECD outcomes, and recently hosted a discussion on the topic at Brookings. There are currently nine other impact bonds worldwide that include outcomes for children ages 0 to 5, including two recently announced impact bonds in the U.S. for nurse home-visiting in South Carolina and support for families struggling with substance abuse in Connecticut.

Impact bonds are well suited to fund interventions that have high potential returns to society; that require learning, adaptability, and combinations of services to achieve those returns; and that are not core government-funded services (often resulting in a relative proliferation of non-state providers). In our recent report, we find that a majority of evaluations show ECD can have unparalleled returns, but there are also a number of evaluations that show no significant impact or where impact fades out. Overall however, there are few evaluations relative to the number of service providers and interventions, an indication of how little we know about the effectiveness of the majority of service providers. For example, there are only 15 studies examining the effects of ECD interventions in low- and middle-income countries on later-life socioemotional development, which has been shown to be a critical determinant of success in school and life.

The case for government investment is strong, but continuous learning and adaptation is needed to ensure the high potential impacts are achieved. Tying payments to outcomes could help the ECD sector in three ways: it could encourage new government investment in ECD, it could encourage performance management and adaptability, and, crucially, it could help develop the knowledge base of what works in ECD. Unlike some other sectors where providers are able to finance their own operations to participate in a results-based (performance-based) contract through fees or other cash flows, ECD providers will almost always require upfront capital in order to reach the most vulnerable. Consequently, we find that, despite some significant challenges, ECD interventions are particularly well suited to impact bonds.

For this reason, there are three things we find particularly exciting about these new SIBs for early childhood development in South Africa:

  1. Collaboration of two departments to ensure a continuity of outcome measurement and, hopefully, achievement. Given their different mandates, the Department of Health will fund outcomes for pregnant mothers and children in their first 1,000 days and the Department of Social Development will fund outcomes for children ages 2 to 5. The Bertha Centre writes that “the funding will be made available to three community based organizations working with pregnant women and children up to five years of age with outcomes including improved antenatal care, prevention of mother to child transmission of HIV, exclusive breastfeeding, a reduction in growth stunting, and improved cognitive, language and motor development.” 
  2. The continuity of quality services is essential to sustaining the impacts of early childhood services, and this is the first set of impact bonds to address outcomes across the development spectrum from age 0 to 5. Selecting outcomes however, particularly for more complex learning outcomes for children ages 3 to 5, can be one of the greatest challenges for impact bonds in the ECD sector.

    A full list of recommended outcome metrics for ECD impact bonds is available in our report.

  3. Outcome fund structure. The SIBs in South Africa have been designed as impact bond funds, where the outcome funder issues a rate card of prices it is willing to pay for certain outcomes and multiple service providers are awarded contracts to provide those outcomes. This structure, which has been implemented in four instances in the U.K., could help facilitate impact bonds at greater scale than what we have seen thus far.
  4. At the Brookings event on impact bonds, Louise Savell of Social Finance U.K., explained that scale was critical in the South African case because there are few providers that work across the entire province. While the discussion around pricing outcomes in the U.K. was more focused on future value to the economy, the discussion in South Africa had to be more attuned to the price of providing services. These delivery prices differ greatly by township, which may result in different outcome payment prices by township. The impact bond designers also had to ensure the outcome price allowed for providers to serve the hardest to reach.

  5. Matching of private-sector outcome funds. This is the first impact bond to date where private-sector actors will augment outcome funds, in addition to serving as investors. Impact bonds take a great deal of work for a government agency to establish—though it will likely drop over time—and additional or matching of outcome funds will be critical to making this effort worthwhile for low- and middle-income country governments.

Looking forward, it will be interesting to compare and contrast the structure and design of these SIBs with the impact bonds for ECD outcomes in Cameroon, India, and potentially other countries as they launch in the coming years. Each impact bond must be designed taking into consideration the particular issues and challenges in a given context. However, sharing learnings from one impact bond to the next will likely improve both efficiency and quality of the impact bond implementation. 

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Supporting early childhood development in humanitarian crises


Event Information

June 8, 2016
4:00 PM - 5:30 PM EDT

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

Register for the Event

Unprecedented armed conflicts and natural disasters are now driving a global displacement crisis. According to the United Nations High Commission for Refugees, more than 60 million people are displaced worldwide, and half of them are children. These displaced children are hindered from developing cognitive and social-emotional skills—such as perseverance, emotional regulation, and conflict resolution—which are essential for school readiness and serve as the foundation for a more peaceful and stable future. However, through the development and testing of innovative educational strategies, we can build effective practices for improving young children’s learning and developmental outcomes in crisis contexts.

On June 8, the Center for Universal Education at Brookings and Sesame Workshop co-hosted a panel discussion to explore innovative strategies to meet the needs of young children in humanitarian crises. 

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Transcript

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Online webinar: Year-one results of the world’s first development impact bond for education


Event Information

July 5, 2016
10:00 AM - 11:00 AM EDT

Online Only
Live Webcast

On July 5, the Center for Universal Education at Brookings and the partners of the world’s first development impact bond for education held an online a discussion of the first year’s enrollment and learning results. The impact bond provides financing for Educate Girls, a non-profit that aims to increase enrollment for out-of-school girls and improve learning outcomes for girls and boys in Rajasthan, India. The UBS Optimus Foundation has provided upfront risk capital to Educate Girls and, contingent on program targets being met, will be paid back their principal plus a return by the Children's Investment Fund Foundation. Instiglio, a non-profit organization specializing in results-based financing mechanisms, serves as the program intermediary.

The webinar explored the experiences so far, the factors affecting the initial results, the key learnings, and ways these will inform the development of the programs it moves forward. The partners shared both positive and negative learnings to start a transparent discussion of the model and where, and how, it can be most effective.

Chaired by Emily Gustafsson-Wright, a fellow at the Center for Universal Education, the discussion featured Safeena Husain of Educate Girls, Phyllis Costanza of UBS Optimus Foundation, and Avnish Gungadurdoss of Instiglio. For further background on impact bonds as a financing mechanism for education and early childhood development in low- and middle-income countries, please see the Center for Universal Education’s report.

Further information on the outcome metrics and evaluation design in the Educate Girls Development Impact Bond » (PDF)

Watch a recording of the webinar via WebEx »

      
 
 




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Educate Girls development impact bond could be win-win for investors and students


On July 5, the results from the first year of the world’s first development impact bond (DIB) for education in Rajasthan, India, were announced. The Center for Universal Education hosted a webinar in which three stakeholders in the DIB shared their perspective on the performance of the intervention, their learnings about the DIB process, and their thoughts for the future of DIBs and other results-based financing mechanisms.

What is the social challenge?

Approximately 3 million girls ages 6 to 13 were out of school in India according to most recent data, 350,000 of which are in the state of Rajasthan. Child marriage is also a large issue in the state; no state-specific data exists, but nationwide 47 percent of girls ages 20 to 24 are married before age 18. According to Educate Girls, a non-governmental organization based in Rajasthan, girls’ exclusion is primarily a result of paternalistic societal mindsets and traditions. Given the evidence linking education and future life outcomes for girls, this data is greatly concerning.

What intervention does the DIB finance?

The DIB finances a portion of the services provided by Educate Girls, which has been working to improve enrollment, retention, and learning outcomes for girls (and boys) in Rajasthan since 2007. The organization trains a team of community volunteers ages 18 to 30 to make door-to-door visits encouraging families to enroll their girls in school and to deliver curriculum enhancement in public school classrooms. Their volunteers are present in over 8,000 villages and 12,500 schools in Rajasthan. The DIB was launched in March of 2015 to finance services in 166 schools, which represents 5 percent of Educate Girls’ annual budget. The DIB is intended to be a “proof of concept” of the mechanism using this relatively small selection of beneficiaries.

Who are the stakeholders in the Educate Girls DIB?

The investor in the DIB is UBS Optimus Foundation, who has provided $238,000 in working capital to fund the service delivery. ID Insight, a non-profit evaluation firm, will evaluate the improvement in learning of girls and boys in the treatment schools in comparison to a control group and will validate the number of out of school girls enrolled. The Children’s Investment Fund Foundation serves as the outcome funder, and has agreed to pay UBS Optimus Foundation 43.16 Swiss francs ($44.37) for each unit of improved learning and 910.14 francs ($935.64) for every percentage point increase in the enrollment of girls out of school. Instiglio, a non-profit impact bond and results-based financing intermediary organization, provided technical assistance to all parties during the design of the DIB and currently provides performance management assistance to Educate Girls on behalf of UBS Optimus Foundation. 

What were the first-year results of the DIB?

The outcomes will be calculated in 2018, at the end of three years; however, preliminary results for the year since the launch of the DIB (representing multiple months of door-to-door visits and seven weeks of interventions in the classroom) were released last week. The payments for the DIB were structured such that the investor, UBS Optimus Foundation, would earn a 10 percent internal rate of return (IRR) on their investment at target outcome levels, which were based on Educate Girls’ past performance data. The table below presents the metrics, target outcome level, year-one result, and the progress toward the target. 

Table 1: Educate Girls DIB Results from first year of services

What were the key learnings over the past year?

The DIB was challenging to implement and required DIB stakeholders to be resourceful.

First, the reliability of government data was a challenge, which necessitated flexibility in the identification of the target population and metrics. Second, given the number of stakeholders engaged and the novelty of this approach, the transaction costs were higher than they would have been for a traditional grant. This meant that strong and regular communication was crucial to the survival of the project.

The role of the outcome funder and investor were significantly different versus a grant.

The outcome funder spent more resources on defining outcomes, but spent fewer resources on managing grant activities. The investor utilized risk management and monitoring strategies informed by the activities in their commercial banking branch, which they have not used for other grants.

The DIB has changed the way the service provider operates.

In the video below, Safeena Husain from Educate Girls’ highlights the ways in which financing a portion of their program through a DIB differs from financing the program through grants. Safeena describes that in a grant, performance data is reported up to donors, but rarely makes it back down to frontline workers. The DIB has helped them to develop mobile dashboards that ensure performance data is reaching the front line and helping to identify barriers to outcomes as early as possible.

Based on the learnings from the implementation of the first DIB for education, this tool can be used to improve the value for money for the outcome funder and strengthen the performance management of a service provider. As the panelists discussed in the webinar, DIBs and other outcome-based financing mechanisms can help differentiate between organizations that are adept at fundraising and those that excel at delivering outcomes. However, service providers must be sufficiently prepared for rigorous outcome measurement if they plan to participate in a DIB; otherwise the high-stakes environment might backfire. In our research, we have closely examined the design constraints for impact bonds in the early childhood sector.

There are countless lessons to be learned from the stakeholder’s experience in the first DIB for education. We applaud the stakeholders for being transparent about the outcomes and true challenges associated with this mechanism. This transparency will be absolutely critical to ensure that DIBs are implemented and utilized appropriately moving forward.

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Image Source: © Mansi Thapliyal / Reuters
      
 
 




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