Editor's Note: At a Zócalo Public Square* event, several experts were asked to weigh in on the following question: How should we most effectively measure happiness? Here is Carol Graham's response-

We must make it a measure that’s meaningful to the average person

Happiness is increasingly in the media. Yet it is an age-old topic of inquiry for psychologists, philosophers, and even the early economists (before the science got dismal). The pursuit of happiness is even written into the Declaration of Independence (and into the title of my latest Brookings book, I might add). Public discussions of happiness rarely define the concept. Yet an increasing number of economists and psychologists are involved in a new science of measuring well-being, a concept that includes happiness but extends well beyond it.

Those of us involved focus on two distinct dimensions: hedonic well-being, a daily experience component; and evaluative well-being, the way in which people think about their lives as a whole, including purpose or meaning. Jeremy Bentham focused on the former and proposed increasing the happiness and contentment of the greatest number of individuals possible in a society as the goal of public policy. Aristotle, meanwhile, thought of happiness as eudemonia, a concept that combined two Greek words: “eu” meaning abundance and “daimon” meaning the power controlling an individual’s destiny. Using distinct questions and methods, we are able to measure both. We can look within and across societies and see how people experience their daily lives and how that varies across activities such as commuting time, work, and leisure time on the one hand, and how they feel about their lives as a whole—including their opportunities and past experiences, on the other. Happiness crosses both dimensions of well-being. If you ask people how happy they felt yesterday, you are capturing their feelings during yesterday’s experiences. If you ask them how happy they are with their lives in general, they are more likely to think of their lives as a whole.

The metrics give us a tool for measuring and evaluating the importance of many non-income components of people’s lives to their overall welfare. The findings are intuitive. Income matters to well-being, and not having enough income is bad for both dimensions. But income matters more to evaluative well-being, as it gives people more ability to choose how to live their lives. More income cannot make them experience each point in the day better. Other things, such as good health and relationships, matter as much if not more to well-being than income. The approach provides useful complements to the income-based metrics that are already in our statistics and in the GDP. Other countries, such as Britain, have already begun to include well-being metrics in their national statistics. There is even a nascent discussion of doing so here.

Perhaps what is most promising about well-being metrics is that they seem to be more compelling for the average man (or woman) on the street than are complex income measures, and they often tell different stories. There are, for example, endless messages about the importance of exercising for health, the drawbacks of smoking, and the expenses related to long commutes. Yet it is likely that they are most often heard by people who already exercise, don’t smoke, and bicycle to work. And exercise does not really enter into the GNP, while cigarette purchases and the gasoline and other expenses related to commuting enter in positively. If you told people that exercising made them happier and that smoking and commuting time made them unhappy (and yes, these are real findings from nationwide surveys), then perhaps they might listen?

Read other responses to this question at zocalopublicsquare.org »

*Zócalo Public Square is a not-for-profit daily ideas exchange that blends digital humanities journalism and live events. 

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2016: The turning point

Policymakers and development practitioners now face a new set of challenges in the aftermath of the global consensus triumvirate Addis Agenda—2030 Agenda—Paris Agreement: [1] implementation, follow-up, and review. Development policy professionals must tackle these while at the same time including the three pillars of sustainable development—social development, economic growth, and environmental protection—and the above three global consensus’ cross-sectoral natures—all while working in a context where policy planning is still performed in silos. They also must incorporate the universality of these new agreements in the light of different national circumstances—different national realities, capacities, needs, levels of development, and national policies and priorities. And then they have to significantly scale up resource allocation and means of implementation (including financing, capacity building, and technology transfer) to make a difference and enhance novel multi-stakeholder partnerships to contain the surge of global flows of all kinds (such as migration, terrorism, diseases, taxation, extreme weather, and digital revolution) in a resolutely interconnected world. Quite an ambitious task!

Given the above complexities, new national and global arrangements are being made to honor the commitments put forth to answer these unprecedented challenges. Several African governments have already started establishing inter-ministerial committees and task forces to ensure alignment between the global goals and existing national planning processes, aspirations, and priorities.

With the international community, Africa is preparing for the first High-Level Political Forum since the 2030 Agenda adoption in July 2016 on the theme “Ensuring that no one is left behind.” In order to inform the 2030 Agenda’s implementation leadership, guidance, and recommendations, six African countries [2] of 22 U.N. Member States, volunteered to present national reviews on their work to achieve the Sustainable Development Goals (SDGs), a unique opportunity to provide an uncompromising reality check and highlight levers to exploit and limits to overcome for impact.

Paralleling Africa’s groundwork, the United Nations’ efforts for coordination have been numerous. They include an inter-agency task force to prepare for the follow-up forum to Financing For Development timed with the Global Infrastructure Forum that will consult on infrastructure investment, a crucial point for the continent; an appointed 10-representative group to support the Technology Facilitation Mechanism that facilitates the development, transfer and dissemination of technologies for the SDGs, another very important item for Africa; and an independent team of advisors to counsel on the longer-term positioning of the U.N. development system in the context of the 2030 Agenda, commonly called “U.N. fit for purpose,” among many other endeavors.

These overwhelming bureaucratic duties alone will put a meaningful burden on Africa’s limited capacity. Thus, it is in the interest of the continent to pool its assets by taking advantage of its robust regional networks in order to mitigate this obstacle in a coherent and coordinated manner, and by building on the convergence between the newly adopted texts and Agenda 2063, the African Union’s 50-year transformation blueprint, with the help of pan-African institutions.

Besides national and global, there is a third level of consideration: the regional one. Indeed, the three major agreements in 2015 emphasized support to projects and cooperation frameworks that foster regional and subregional integration, particularly in Africa. [3] Indeed, common and coherent industrial policies for regional value chains developed by strengthened regional institutions and sustained by a strong-willed transformational leadership are gaining traction towards Africa’s insertion into the global economy.

Africa has long made regional economic integration within its main “building blocs,” the eight Regional Economic Communities (RECs), a core strategy for development. The continent is definitely engaged in this path: Last summer, three RECs, the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC), launched the Tripartite Free Trade Area (TFTA) that covers 26 countries, over 600 million people, and $1 trillion GDP. The tripartite arrangement paves the way towards Africa’s own mega-regional one, the Continental Free Trade Area (CFTA), and the realization of one broad African Economic Community. If regionalization allows free movement of people, capital, goods, and services, the resulting increased intra-African connectivity will boost trade within Africa, promote growth, create jobs, and attract investments. Ultimately, it should ignite industrialization, innovation, and competitiveness. To that end, pan-African institutions, capitalizing on the recent positive continental performances, are redoubling their efforts to build an enabling environment for policy and regulation harmonization and economies of scale.

Importantly, infrastructure, without which no connectivity is possible, is undeniably the enabling bedrock to all future regionalization plans. Together with market integration and industrial development, infrastructure development is one of the three pillars of the TFTA strategy. Similarly, the New Partnership for Africa’s Development (NEPAD) Agency, the technical body of the African Union (AU) mandated with planning and coordinating the implementation of continental priorities and regional programs, adopted regional integration as a strategic approach to infrastructure. In fact, in June 2014, the NEPAD Agency organized the Dakar Financing Summit for Infrastructure, culminating with the adoption of the Dakar Agenda for Action that lays down options for investment mobilization towards infrastructure development projects, starting with 16 key bankable projects stemming from the Programme for Infrastructure Development in Africa (PIDA). These “NEPAD mega-projects to transform Africa” are, notably, all regional in scope.

See the full map of NEPAD’s 16 mega-projects to transform Africa here »

Supplementing NEPAD and TFTA, the Continental Business Network was formed to promote public-private dialogue with regard to regional infrastructure investment. The Africa50 Infrastructure Fund was constituted as a new delivery platform commercially managed to narrow the massive infrastructure finance gap in Africa evaluated at $50 billion per annum.

The development of homegrown proposals and institutional advances observed lately demonstrate Africa’s assertive engagement towards accelerating infrastructure development, thereby regionalization. At the last AU Summit, the NEPAD Heads of State and Government Orientation Committee approved the institutionalization of an annual PIDA Week hosted at the African Development Bank (AfDB) to follow up on the progresses made.

The energy partnerships listed below illustrate the possible gain from adopting trans-boundary approaches for implementation and follow-up: the Africa Power Vision (APV) undertaken with Power Africa; the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE) model accompanying the Sustainable Energy for All (SE4ALL) Africa Hub efforts; and the Africa GreenCo solution that is to bank on PIDA.

• Africa Power Vision: African ministers of power and finance gathered at the World Economic Forum (WEF) in Davos in 2014 decided to create the APV. The vision provides a strategic template harnessing resources to fast-track access to modern energy for African households, businesses, and industries. It draws up a shortlist of African-driven regional priority energy projects mostly extracted from the PIDA Priority Action Program, which is the PIDA short-term pipeline to be completed by 2020. The game changer Inga III hydropower project, the iconic DESERTEC Sahara solar project, and the gigantic North-South Interconnection Transmission Line covering almost the entire TFTA are among the 13 selected projects. The APV concept note and implementation plan entitled “From vision to action” developed by the NEPAD Agency, in collaboration with U.S. government-led Power Africa initiative, was endorsed at the January 2015 AU Summit. The package elaborates on responses to counter bottlenecks to achieve quantifiable targets, the “acceleration methodology” based on NEPAD Project Prioritization Considerations Tool (PPCT), risk mitigation, and power projects’ financing. Innovative design was thought to avoid duplication, save resources, improve coordination and foster transformative action with the setting up of dual-hatted Power Africa – APV Transaction Advisors, who supervise investment schemes up to financial closure where and when there is an overlap of energy projects or common interest. Overall, the APV partnership permits a mutualization of expertise while at the same time, since it is based on PIDA, promoting regional economic integration for electrification.

• ECOWAS Centre for Renewable Energy and Energy Efficiency: U.N. Secretary-General Ban Ki-moon launched the Sustainable Energy for All initiative worldwide as early as 2011 with the triple objective of ensuring universal access to modern energy services, doubling the rate of improvement of energy efficiency, and doubling the share of renewable energy in the global energy mix by 2030. Since its inception, SE4ALL prompted a lot of enthusiasm on the continent, and is now counting 44 opt-in African countries. As a result, the SE4ALL Africa Hub was the first regional hub to be launched in 2013. Hosted at the AfDB in partnership with the AU Commission, NEPAD Agency, and the U.N. Development Program (UNDP), its role is to facilitate the implementation of SE4ALL on the continent. The SE4ALL Africa Hub 3rd Annual Workshop held in Abidjan last February showed the potential of this “creative coalition” (Yumkella, 2014) to deliver on areas spanning from national plans of action, regionally concerted approaches in line with the continental vision, to SDG7 on energy, to climate Intended Nationally Determined Contributions (INDCs) made for the Paris Agreement. Above all, the workshop displayed the hub’s ability to efficiently kick-start the harmonization of processes for impact among countries. Forasmuch as all ECOWAS Member States opted-in to SE4ALL, the West African ministers mandated their regional energy center, ECREEE, to coordinate the implementation of the SE4ALL Action Agendas (AAs), which are documents outlining country actions required to achieve sustainable energy objectives, and from then Investment Prospectuses (IPs), the documents presenting the AAs investment requirements. As a result, the ECOWAS Renewable Energy Policy (EREP) and the Energy Efficiency Policy (EEEP) were formulated and adopted; and a regional monitoring framework to feed into a Global Tracking Framework, the SE4ALL measuring and reporting system, is now being conceived. The successful ECREEE model, bridging national inventory and global players, is about to be duplicated in two other African regions, EAC and SADC, with the support of the U.N. Industrial Development Organization (UNIDO).

• Africa GreenCo: Lastly, initiatives like Africa GreenCo are incubating. This promising vehicle, currently funded by a grant from the Rockefeller Foundation, envisions itself as an independently managed power trader and broker to move energy where needed. Indeed, Africa GreenCo aims to capitalize on PIDA power projects: In its capacity as intermediary creditworthy off taker, it plans to eventually utilize their regional character as a value addition to risk guarantee. To date, Africa GreenCo is refining the legal, regulatory, technical, and financial aspects of its future structure and forging links with key stakeholders in the sector (member states, multilateral development banks, African regional utilities for generation and interconnection called Power Pools) ahead of the completion of its feasibility study in June 2016.

The above-mentioned partnerships are encouraging trends towards more symbiotic multi-stakeholders cooperation. As they relate to home-crafted initiatives, it is imperative that we do not drift away from a continental vision. Not only do Africa-grown plans have higher chance of success than the one-size-fits-all imported solutions, but consistent and combined efforts in the same direction reinforce confidence, emulation, and attract supportive attention. It implies that the fulfillment of intergovernmental agreements requires first and foremost their adaptation to local realities in a domestication process that is respectful of the policy space. Mainstreaming adjustments can be later conducted according to evidence-based and data-driven experiments. Between these global engagements and national procedures, the regional dimension is the indispensable link: Enabling countries to bypass the artificiality of borders inherited from colonial times and offering concrete options to eradicate poverty in a united-we-stand fashion. Regional integration is therefore a prelude to sustainable development operationalization within Africa and a key step towards its active partaking in the global arena. Regionalization can also trigger international relations shift provided that it encompasses fair multilateralism and sustainable management of global knowledge. Indeed, the resulting openness and the complexity encountered are useful parameters to enrich the conception of relevant local answers.

These success stories show the great potential for new experiments and synergies. To me, they inspire the promise of a better world. The one I like to imagine is characterized by mutually beneficial ecosystems for the people and the planet. It encourages win-win reverse linkages, or in other words, more positive spillovers of developing economies on industrial countries. It is a place where, for example, an African region could draw lessons from the Greek crisis and the other way around: China could learn from Africa’s Maputo Development Corridor for its Silk Road Economic Belt. Twin institutes performing joint research among regional knowledge hubs would flourish. Innovative Fab Labs would be entitled to strive after spatial adventure with e-waste material recycled into 3D printers. In that world, innovative collaborations in science, technology, engineering, and math (STEM) would be favored and involve not only women but also the diaspora in order to develop environmentally sound technical progress. Commensurate efforts, persistent willingness, indigenous ingenuity, and unbridled creativity place this brighter future within our reach.

Beyond the recognition of the African voice throughout the intergovernmental processes, Africa should now consolidate its gains by firmly maintaining its position and safeguarding its winnings throughout the preliminary phase. The continent should urgently set singular tactics with the greatest potential in terms of inclusiveness and creation of productive capacity. While doing so, African development actors should initiate a “learning by doing” virtuous cycle to create an endogenous development narrative cognizant of adaptable best practices as well as failures. Yet the only approach capable of generating both structural transformation and informative change that are in line with continentally own and led long-term strategies is … regional integration.

The GOP presidential primary process has taken us to places we couldn’t have dreamed mere months ago. Donald Trump’s apparently ever-growing lead—and the foundering of more mainstream candidates like Ted Cruz, Marco Rubio, and John Kasich—carries serious implications for America’s role in the world. As top Republican strategists and political pundits alike toss around ideas for slowing Trump’s momentum—in part due to major concerns about how he’s staked out his foreign policy—I’ll add one more idea into the mix: convince Rubio and Kasich to agree, now and in public, to share a Republican ticket.

It would go like this: John Kasich would drop out of the presidential race before Tuesday, March 15—when winner-take-all votes occur in both Florida and Ohio—and encourage his supporters to vote for Marco Rubio (who performed better than Kasich on Super Tuesday). Rubio, appearing with Kasich at that press conference, would accept Kasich’s endorsement and then promise him the vice presidential spot on the ticket if he (Rubio) were chosen to be the Republican presidential nominee. This Rubio-Kasich team would be promised to the voters even as the primary process marched on. A vote for Rubio would henceforth be viewed (by the candidates and their allies at least) as a vote for Rubio-Kasich together.

The March 15 votes constitute perhaps the last best chance to stop Trump’s march to the nomination. More to the point here, they’re a chance of ensuring that a Republican candidate with a traditional internationalist worldview remains in the race until the convention. Even Hillary Clinton supporters should arguably welcome such a voice on the GOP side, as it could keep the national political discourse more constructive and less demeaning as November approaches.

To be somewhat more specific: Trump is known for his views critical of Mexico, many Muslims, immigration, refugees, trade, and U.S. allies like Japan and South Korea (in light of their purported unwillingness to share the burden of the common defense). He is also known for cozying up to President Vladimir Putin of Russia, and for vague but emphatic talk of getting America back in the habit of winning again. In addition, he advocates more extreme and ruthless measures in the war on terror. 

Whatever the risks, it certainly seems more promising than the path either one of them is on now.

While Rubio is no dove, he has wrestled with the intricacies and complexities of foreign policy during his time in the Senate, and much more than has Trump. He has serious views on the use of force and defense policy, seasoned by reality. Most centrally, he has a Reagan-like view of America’s place in the world—as a country that is stern and unyielding towards its enemies, but open and welcoming to the vast majority of foreigners and foreign nations. This positive, internationalist outlook is in marked contrast to Trump’s worldview. Kasich’s views are much closer to Rubio than to Trump, of course, though he may be more measured and moderate in some of his pro-defense views than Rubio. 

In many foreign policy issues and beyond, Rubio seems more conservative than Kasich. But of course, some divergence of views is inevitable for any eventual presidential ticket—it is even healthy, to an extent. And the kinds of expertise the two men bring to the national debate are largely complimentary, since Kasich has focused more on domestic policy in recent years and Rubio more on national security matters. In other ways, like their strong religious faiths, they seem natural teammates.

Shake it up

Of course, the goal of this Rubio-Kasich ticket would be to win both Florida and Ohio in March. These are not only delegate-rich, winner-take-all states in the nominating process, but key swing states in general elections. Whether or not the Democratic nominee could ultimately best that ticket come November, the Rubio-Kasich team would have a powerful call on super-delegates at any brokered Republican convention if it already had wins in the nation’s two most important swing states under its belt. It would have demonstrated strength in two states that the GOP nominee will badly want to win in the November election.

Polls show that Kasich is stronger than Rubio in Ohio and Rubio is stronger than Kasich in Florida; both trail Trump in both places. However, their combined tallies match up reasonably well with Trump. Beyond that, the shock effect of this kind of partnership—between an accomplished sitting governor and a bright young senator—could change the race’s dynamics enough to bring them even more votes. It will raise eyebrows and cause many to take a second look at the race. Whatever the risks, it certainly seems more promising than the path either one of them is on now.

The preemptive formation of a Rubio-Kasich presidential team in early March would be a highly unusual step. But it’s already a highly unusual year. Put differently, desperate circumstances call for desperate—or at least dramatic—measures. This kind of a true structural change in the primary process promises a greater likelihood of shaking GOP voters up than big speeches by Mitt Romney or warnings from other parts of the GOP establishment. Kasich and Rubio should consider it.

Not the least worrying feature of these chaotic times is that the members of my transatlantic analyst tribe—whether American or European—have stopped being smug or snarky about goings-on on the other side of the Atlantic. For two decades, the mutual sniping was my personal bellwether for the rude (literally) health of the relationship.

No more. Now my American neocon buddies are lining up to sign scorching open letters against the GOP frontrunner, begging the Brits not to brexit, and lambasting Obama because he’s not doing more to help German Chancellor Angela Merkel. Heck, they would even let him take in Syrian (Muslim Syrian, if necessary!) refugees if it helps her. 

My fellow Europeans have been shocked into appalled politeness by the recognition that The Donald has genuine competition in the U.K.’s Boris Johnson, France’s Marine le Pen, Hungary’s Viktor Orban, the Netherlands’ Geert Wilders, Slovakia’s Robert Fico, Turkey’s Recep Tayyip Erdoğan, or Russia’s Vladimir Putin. They recognize that the roar of Trump’s supporters is echoed on streets and social media websites across their own continent—including in my country, Germany, which is reeling after taking in more than a million refugees last year.

Adding to the general weirdness, parliamentarians of Germany’s Die Linke (successor to East Germany’s Communist party) have been casting longing glances at the Bernie Sanders phenomenon. "Who would have thought a democratic Socialist could get this far in America?" tweeted Stefan Liebich. His fellow Member of Parliament Wolfgang Gehrcke, a co-founder of the West German Communist Party DKP in 1968, wistfully confessed his regret on German national radio recently at never having visited the United States. The Linke has been getting precious little traction out of the turmoil at home, despite their chief whip Sahra Wagenknecht, who rocks a red suit and is herself no slouch at inflammatory rhetoric.

Like [political elites], we [analysts] mostly ignored or took for granted that the essential domestic underpinnings of foreign policy were hardwired into our constitutional orders: political pluralism, economic opportunity, inclusion.

One would have to be made of stone not to be entertained by all this. Rather less funny is the fact that we, the analysts, have been as badly surprised by these developments as the politicians. We are indeed guilty of much of the same complacency that political elites are currently being punished for on both sides of the Atlantic. Like them, we mostly ignored or took for granted that the essential domestic underpinnings of foreign policy were hardwired into our constitutional orders: political pluralism, economic opportunity, inclusion. In other words, a functioning representative democracy and a healthy social contract. 

That was a colossal oversight. George Packer’s "The Unwinding" is a riveting depiction of the unraveling of America. Amanda Taub, Thomas Frank, and Thomas Edsall have written compelling recent pieces about the fraying economic and social conditions which offer a potent explanation for the current dark mood of much of the American electorate. Yet "Europe" could be substituted for "America" in many of these studies with equal plausibility. 

A thread which runs through all these analyses is the enormous fear and anger directed at international trade—a feeling stoked masterfully by Trump, but likewise by his European counterparts. Another common element is the increasing inability of representative democracy and its politicians to deal with these problems—whether because they are being deliberately undermined (e.g. by Russia), or are simply overwhelmed by it all. 

“Europe“ could be substituted for “America“ in many of these studies with equal plausibility.

The implications for foreign and security policy are already on view. Western governments find themselves increasingly on the defensive at home as they try to grapple with fierce divisions in Europe and in the transatlantic alliance on how to handle war and human misery in the Middle East, to prevent Europe’s eastern neighborhood from succumbing to failure, to save a faltering transatlantic trade agreement, and to support and protect the liberal global order. Even Chancellor Merkel, who has been pushing hard for an EU-Turkey deal to manage the flow of refugees to Europe, is finding herself besieged at home by an insurgent challenger in form of the right-wing Alternative for Germany (AfD).

So, as you watch the primaries in Washington, D.C. and Wyoming (March 12) and Florida, Illinois, Missouri, Ohio, and North Carolina (March 15), you may also want to give some attention to three regional elections in my country. Three of Germany’s sixteen states or Länder—Baden-Württemberg, Rhineland-Palatinate, and Saxony-Anhalt—go to the polls, on what Germany’s media are already calling Super Sunday. The AfD, which was only founded in 2013 (when it narrowly missed the 5 percent threshold to get into the federal legislature), is already present in five states. It is expected to rake in double-digit percentages in all three upcoming votes.

One thing’s for sure already: There will be little to be smug about.

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In a long-awaited ruling prepared under the United Nations Convention on the Law of the Sea (UNCLOS), an arbitration panel has handed an unequivocal victory to the Philippines in its case against China, which it first filed in early 2013. The arbitration panel deemed invalid virtually all of Beijing’s asserted claims to various islands, rocks, reefs, and shoals in the South China Sea, determining that Chinese claims directly violated the provisions of UNCLOS, which China signed in 1982.

From the outset of Manila’s initiation of the arbitration process, Beijing has refused to participate. However, it did issue a position statement of its own in late 2014, claiming that the arbitration panel violated various UNCLOS provisions and additional agreements signed by the two governments. As the arbitration neared its conclusion, China released a steady stream of editorials and commentaries, claiming that the ruling sought “to deny China’s territorial sovereignty and maritime rights and interests in the South China Sea.” 

Beijing has repeatedly stated that “it does not accept any means of third party dispute settlement or any solution imposed on China.” At the same time, UNCLOS has no enforcement mechanism for carrying out the panel’s judgments. But Beijing’s repeated efforts at shaming and stonewalling have imposed an undoubted cost on its political standing in the region. Moreover, China’s signing of UNCLOS obligated Beijing to compulsory third party determination, though it is not the only power contesting this commitment. 

Beijing’s repeated efforts at shaming and stonewalling have imposed an undoubted cost on its political standing in the region.

The fundamental weakness of China’s policy defense was its reliance on various “historic claims” to most of the maritime expanses of the South China Sea, including areas that directly encroached on the sovereign territory of various neighboring states. Its claims have frequently been encapsulated in the nine-dash line, an ill-defined geographic demarcation initially appearing in a map prepared by cartographers in the Republic of China in 1947 (i.e., prior to the victory of the Chinese Communist Party in 1949). But China’s sweeping claims to “unequivocal sovereignty” failed to address the multiple layers of ambiguity and conflicting judgments found in various policy documents released by Beijing.

Moreover, the arbitration panel emphasized from the outset that its authority did not extend to determinations over sovereignty. Rather, its mandate (distilled from a list of 15 claims in Manila’s original brief) focused on Chinese claims to the continental shelf and to exclusive economic zones extending from land features, reefs, and rocks over which China claimed indisputable sovereignty. The Philippines also contested Chinese activities that infringed on the rights of Filipino fishermen, Beijing’s construction of artificial islands, and the operation of Chinese law enforcement vessels in various shoals. 

Even if Beijing persists in its angry defiance of the arbitration panel’s findings and continues to contest their legitimacy, the sweeping character of the rulings (in a document exceeding 500 pages in length) is impossible to deny. UNCLOS specifically states that land features not deemed an island are entitled only to a 12-mile territorial sea, not to an exclusive economic zone or to a continental shelf. In an especially controversial finding, the panel concluded that Itu Aba (known in Chinese as Taiping Island and the largest land feature in the Spratly Island group and controlled by Taiwan) was not an island; this has been strongly contested by Taipei as well as by Beijing.

The biggest looming issues will focus on how China opts to respond.

The biggest looming issues will focus on how China opts to respond in words and deeds. The arbitration proceeding has triggered strongly nationalistic responses from leaders and experts in China, with many alleging a hidden U.S. hand in the arbitration. American political and military support for the Philippines and other claimants and heightened U.S. air and maritime activities in the South China Sea—all justified as ensuring freedom of navigation in the vital waterways of the region—engenders additional angry responses from the Chinese leadership. 

Beijing continues to insist that it is prepared to enter into bilateral negotiations with Manila over various disputed claims. But with China claiming indisputable sovereignty over various contested features and possessing maritime capabilities that vastly exceed those of any other claimants, will it be prepared to demonstrate flexibility, restrain its responses, and give any credence to the diligent labors of the arbitration panel? Can Beijing envision quiet diplomacy, either with the United States or with regional claimants, as opposed to seeing itself as the endlessly aggrieved party? If Beijing doesn’t exercise restraint and instead takes steps that heighten the risks, these could readily pose new threats to the regional maritime order that cannot possibly be in anyone’s interest. 

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

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

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

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

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

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

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

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

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

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

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

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

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

At a legislative conference in Cambridge, Ohio, Bruce Katz stressed the importance of cities and metro areas to the state's overall prosperity. Acknowledging the decline of Ohio's older industrial cities, Katz noted the area's many assets and argued for a focus on innovation, human capital, infrastructure, and quality communities as means to revitalize the region. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Last week, we showed how the share of the nation’s venture capital going to the Bay Area has actually increased over the last decade and posed the question: Are San Francisco and Silicon Valley good models for most cities to imitate? And with the answer being “no,” what strategies should cities employ to bolster local capital networks?

The answer depends upon regions’ technical strengths—different technologies imply different venture capital strategies. A common assumption is that most cities look like Silicon Valley with software monopolizing venture funding, but in many places a mix of different technologies are far more important. Metropolitan level venture capital data from 2005 to 2015 from Pitchbook illustrates how different cities require different strategies.

In Cleveland, for example, more than three-quarters of deals are in clinical care services and medical devices driven by Cleveland Clinic’s world-renowned success in identifying and funding companies creating novel health care technologies. However, software and medical technologies require very different venture capital strategies. Software companies need upfront funding but can scale quickly with few additional funding rounds. Medical technologies require FDA approval and clinical trials, costly and lengthy processes, implying the need to consider whether regional venture capital efforts can provide not only seed funding but multiple rounds. If not, promising health care companies may flame out or relocated elsewhere.

Pittsburgh, on the other hand, has a far more mixed portfolio than either Cleveland or the Bay Area, one of the most diverse in the country. Pittsburgh’s top 10 technologies funded over the last decade include laboratory services, energy exploration, battery storage, medical devices, software, and electronic equipment—with none making up more than one-fifth the metro area’s portfolio. Pittsburgh’s mix of educational and non-profit institutions like Carnegie Mellon University, University of Pittsburgh and UPMC support research in engineering, software, medical technologies, and therapeutics. In addition private companies like Google, Alcoa, and the shale gas boom have provided the region with a blend of market opportunities that are extremely different than that of the Bay Area.

Equally important to the type of technologies funded is how venture capital deals are funded. In the Bay Area private venture capital firms represent the vast majority of funding both in terms of numbers of deals and overall value. Deals from accelerators and universities together equal less than one-tenth of what is invested by private venture capital firms. Given the many private investment firms in the Bay Area, universities and accelerators are better at creating and incubating technologies instead of funding them. Unfortunately, other markets lack such private sector assets and try to jumpstart investments through other methods.

Over the last decade, Pittsburgh made just 3 percent as many total venture deals as the Bay Area, but breaking that figure down by the funding source, universities outperformed in Pittsburgh. There they funded nearly 30 percent as many deals as universities did in San Francisco and Silicon Valley, a rate 10 times as high as would be expected based the Bay Area “norm.” One reason for this is Pittsburgh is relatively new to venture funding and may have more research assets than private venture capital firms. Therefore, university funds could fill an important capital gap.

A common worry is these non-private sector deals are poor investments that private firms, with superior market intelligence, simply refused to make. This argument is most persuasive in regions like the Bay Area where there is no shortage of private capital to fund good ideas. However in other regions these investments can prove to be smart precursors to private funding. Also, rarely do public institutions make investment decisions. Instead, public dollars are funneled through private investment firms to kick start regional activity. For example, Philadelphia’s new StartUp PHL fund is paid for by taxpayer dollars but investment decisions are made by First Capital, the city’s largest private venture capital fund. The fund requires recipients to stay in the city for at least six months after funding, with the hope to increase the number of growing technology companies in Philadelphia.

Cleveland and Pittsburgh are specific examples of a general point. Cities have unique technology competencies and pathways to venture capital. Economic strategies to attract outside, and bolster local capital, should reflect those attributes and not simply default to what seems to have worked in the Bay Area. 

Last week, we showed how the share of the nation’s venture capital going to the Bay Area has actually increased over the last decade and posed the question: Are San Francisco and Silicon Valley good models for most cities to imitate? And with the answer being “no,” what strategies should cities employ to bolster local capital networks?

The answer depends upon regions’ technical strengths—different technologies imply different venture capital strategies. A common assumption is that most cities look like Silicon Valley with software monopolizing venture funding, but in many places a mix of different technologies are far more important. Metropolitan level venture capital data from 2005 to 2015 from Pitchbook illustrates how different cities require different strategies.

In Cleveland, for example, more than three-quarters of deals are in clinical care services and medical devices driven by Cleveland Clinic’s world-renowned success in identifying and funding companies creating novel health care technologies. However, software and medical technologies require very different venture capital strategies. Software companies need upfront funding but can scale quickly with few additional funding rounds. Medical technologies require FDA approval and clinical trials, costly and lengthy processes, implying the need to consider whether regional venture capital efforts can provide not only seed funding but multiple rounds. If not, promising health care companies may flame out or relocated elsewhere.

Pittsburgh, on the other hand, has a far more mixed portfolio than either Cleveland or the Bay Area, one of the most diverse in the country. Pittsburgh’s top 10 technologies funded over the last decade include laboratory services, energy exploration, battery storage, medical devices, software, and electronic equipment—with none making up more than one-fifth the metro area’s portfolio. Pittsburgh’s mix of educational and non-profit institutions like Carnegie Mellon University, University of Pittsburgh and UPMC support research in engineering, software, medical technologies, and therapeutics. In addition private companies like Google, Alcoa, and the shale gas boom have provided the region with a blend of market opportunities that are extremely different than that of the Bay Area.

Equally important to the type of technologies funded is how venture capital deals are funded. In the Bay Area private venture capital firms represent the vast majority of funding both in terms of numbers of deals and overall value. Deals from accelerators and universities together equal less than one-tenth of what is invested by private venture capital firms. Given the many private investment firms in the Bay Area, universities and accelerators are better at creating and incubating technologies instead of funding them. Unfortunately, other markets lack such private sector assets and try to jumpstart investments through other methods.

Over the last decade, Pittsburgh made just 3 percent as many total venture deals as the Bay Area, but breaking that figure down by the funding source, universities outperformed in Pittsburgh. There they funded nearly 30 percent as many deals as universities did in San Francisco and Silicon Valley, a rate 10 times as high as would be expected based the Bay Area “norm.” One reason for this is Pittsburgh is relatively new to venture funding and may have more research assets than private venture capital firms. Therefore, university funds could fill an important capital gap.

A common worry is these non-private sector deals are poor investments that private firms, with superior market intelligence, simply refused to make. This argument is most persuasive in regions like the Bay Area where there is no shortage of private capital to fund good ideas. However in other regions these investments can prove to be smart precursors to private funding. Also, rarely do public institutions make investment decisions. Instead, public dollars are funneled through private investment firms to kick start regional activity. For example, Philadelphia’s new StartUp PHL fund is paid for by taxpayer dollars but investment decisions are made by First Capital, the city’s largest private venture capital fund. The fund requires recipients to stay in the city for at least six months after funding, with the hope to increase the number of growing technology companies in Philadelphia.

Cleveland and Pittsburgh are specific examples of a general point. Cities have unique technology competencies and pathways to venture capital. Economic strategies to attract outside, and bolster local capital, should reflect those attributes and not simply default to what seems to have worked in the Bay Area. 

In the United States, the official poverty rate for 2012 stood at 15 percent based on the national poverty line which is equivalent to around $16 per person per day. Of the 46.5 million Americans living in poverty, 20.4 million live under half the poverty line. This begs the question of just how poor America’s poorest people are.

Poverty, in one form or other, exists in every country. But the most acute, absolute manifestations of poverty are assumed to be limited to the developing world. This is reflected in the fact that rich countries tend to set higher poverty lines than poor countries, and that global poverty estimates have traditionally excluded industrialized countries and their populations altogether.

An important study on U.S. poverty by Luke Shaefer and Kathryn Edin gently challenges this assumption. Using an alternative dataset from the one employed for the official U.S. poverty measure, Shaefer and Edin show that millions of Americans live on less than $2 a day—a threshold commonly used to measure poverty in the developing world. Depending on the exact definitions used, they find that up to 5 percent of American households with children are shown to fall under this parsimonious poverty line.

Methodologies for measuring poverty differ wildly both within and across countries, so comparisons and their interpretation demand extreme care.

These numbers are intended to shock—and they succeed. The United States is known for having higher inequality and a less generous social safety net than many affluent countries in Europe, but the acute deprivations that flow from this are less understood. A crude comparison of Shaefer and Edin’s estimates with the World Bank’s official $2 a day poverty estimates for developing economies would place the United States level with or behind a large set of countries, including Russia (0.1 percent), the West Bank and Gaza (0.3 percent), Jordan (1.6 percent), Albania (1.7 percent), urban Argentina (1.9 percent), urban China (3.5 percent), and Thailand (4.1 percent). Many of these countries are recipients of American foreign aid. However, methodologies for measuring poverty differ wildly both within and across countries, so such comparisons and their interpretation demand extreme care.

This brief is organized into two parts. In the first part, we examine the welfare of America’s poorest people using a variety of different data sources and definitions. These generate estimates of the number of Americans living under $2 a day that range from 12 million all the way down to zero. This wide spectrum reflects not only a lack of agreement on how poverty can most reliably be measured, but the particular ways in which poverty is, and isn’t, manifested in the U.S.. In the second part, we reexamine America’s $2 a day poverty in the context of global poverty. We begin by identifying the source and definition of poverty that most faithfully replicates the World Bank’s official poverty measure for the developing world to allow a fairer comparison between the U.S. and developing nations. We then compare the characteristics of poverty in the U.S. and the developing world to provide a more complete picture of the nature of poverty in these different settings. Finally, we explain why comparisons of poverty in the U.S. and the developing world, despite their limitations and pitfalls, are likely to become more common.

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At a legislative conference in Cambridge, Ohio, Bruce Katz stressed the importance of cities and metro areas to the state's overall prosperity. Acknowledging the decline of Ohio's older industrial cities, Katz noted the area's many assets and argued for a focus on innovation, human capital, infrastructure, and quality communities as means to revitalize the region. 

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It can be hard to find good news lately in Ohio. Foreclosure filings are at record levels -- again. Income tax receipts plummeted by 35.6 percent from April 2008 to April 2009, and the downward trend continues in 2010. Unemployment remains high: The Cleveland region's jobless rate was 8.9 percent in December.

But the current devastation is only half the story. Ohio is in a paradoxical moment: The present is painful, but the future could be promising. And in another paradox, its manufacturing heritage is part of the reason why.

The pre-recession economy was driven by consumption, energy profligacy and financial bubbles. The next American economy must be very different: export oriented, low carbon and innovation fueled.

According to the World Bank, exports make up only 11 percent of the gross domestic product of the United States, compared to 40 percent in Europe, 40 percent in China, 36 percent in Canada, 22 percent in India and 16 percent in Japan. Only 4 percent of U.S. companies export. Less than 0.5 percent of U.S. companies operate in more than one country.

Ohio can lead the United States back into the export game, because the state still manufactures what the rest of the world wants, including medical instruments, electrical machinery and aircraft parts.

Brazil and China, two rapidly growing economies, are Ohio's third- and fourth-largest trading partners. The seven largest Ohio metros exported about $3.6 billion's worth of goods and services to Brazil, India and China in 2007 alone.

Cleveland is in the country's top quarter of large metros in terms of export intensity (the percentage of metropolitan-region output that is exported overseas). Every patient who comes from abroad to visit the Cleveland Clinic bolsters the region's service exports economy.

Low carbon is the second hallmark of the next U.S. economy, and it could spark a production revolution in Ohio and other manufacturing states.

The transition to a low-carbon economy is fundamentally about markets and products. We will need new energy supplies -- like wind and biomass -- and new machines -- like turbines and solar panels.

Also, we will need new kinds of batteries, new kinds of cars and energy-efficient appliances, smart meters and local food. All of these products could be designed, developed, built and grown in Ohio.

The state ranks seventh in the nation for total green-technology patents for 1998–2007, with strengths in batteries, hybrid systems and fuel cells.

According to a recent report by the Pew Center on the States, Ohio's number of clean-energy jobs grew by more than 7 percent between 1998 and 2007, even as the overall number of jobs in the state fell 2 percent.

Creating the products and services demanded across the globe, and those that fit with a low-carbon world, will take quantum leaps in innovation.

Already, the state is gaining some notice, attracting $46 million in venture capital investments in clean technology in 2008, more than triple the 2007 amount.

The state is in the top 10 nationally in science and engineering doctorates awarded, in academic research and development spending, and in small-business-innovation research awards, according to recent National Science Foundation data.

Cleveland's patent rate, another measure of innovative power, is above the national average.

We used to think that we could divorce innovation entirely from production, keeping the former here as we sent most of the latter abroad. But important innovations also emerge from the factory floor. Innovating more means producing more, and that production can take place in Ohio.

It is true that Ohio's job losses in manufacturing have been staggering, especially in the northeast corner of the state. But manufacturing doesn't have to be a millstone -- it can be a stepping stone toward the next economy.

It is this mindset that should drive Ohioans' policy decisions over the next year. It is not easy to raise spending on innovation, or vote for an additional $700 million for the Third Frontier, while pressing school districts and local governments to find more savings. But those hard choices will position Ohio for a stronger future.

The "Restoring Prosperity" report that the Brookings Institution and the Greater Ohio Policy Center released last week recommends 39 policies -- from rebuilding physical assets to reorganizing work-force supports to collaborating at the regional scale -- that can help Ohio strengthen its footing in an export-oriented, low-carbon and innovation-fueled world. Groups like the Fund for our Economic Future are already working to advance many of these ideas.

Last week, we showed how the share of the nation’s venture capital going to the Bay Area has actually increased over the last decade and posed the question: Are San Francisco and Silicon Valley good models for most cities to imitate? And with the answer being “no,” what strategies should cities employ to bolster local capital networks?

The answer depends upon regions’ technical strengths—different technologies imply different venture capital strategies. A common assumption is that most cities look like Silicon Valley with software monopolizing venture funding, but in many places a mix of different technologies are far more important. Metropolitan level venture capital data from 2005 to 2015 from Pitchbook illustrates how different cities require different strategies.

In Cleveland, for example, more than three-quarters of deals are in clinical care services and medical devices driven by Cleveland Clinic’s world-renowned success in identifying and funding companies creating novel health care technologies. However, software and medical technologies require very different venture capital strategies. Software companies need upfront funding but can scale quickly with few additional funding rounds. Medical technologies require FDA approval and clinical trials, costly and lengthy processes, implying the need to consider whether regional venture capital efforts can provide not only seed funding but multiple rounds. If not, promising health care companies may flame out or relocated elsewhere.

Pittsburgh, on the other hand, has a far more mixed portfolio than either Cleveland or the Bay Area, one of the most diverse in the country. Pittsburgh’s top 10 technologies funded over the last decade include laboratory services, energy exploration, battery storage, medical devices, software, and electronic equipment—with none making up more than one-fifth the metro area’s portfolio. Pittsburgh’s mix of educational and non-profit institutions like Carnegie Mellon University, University of Pittsburgh and UPMC support research in engineering, software, medical technologies, and therapeutics. In addition private companies like Google, Alcoa, and the shale gas boom have provided the region with a blend of market opportunities that are extremely different than that of the Bay Area.

Equally important to the type of technologies funded is how venture capital deals are funded. In the Bay Area private venture capital firms represent the vast majority of funding both in terms of numbers of deals and overall value. Deals from accelerators and universities together equal less than one-tenth of what is invested by private venture capital firms. Given the many private investment firms in the Bay Area, universities and accelerators are better at creating and incubating technologies instead of funding them. Unfortunately, other markets lack such private sector assets and try to jumpstart investments through other methods.

Over the last decade, Pittsburgh made just 3 percent as many total venture deals as the Bay Area, but breaking that figure down by the funding source, universities outperformed in Pittsburgh. There they funded nearly 30 percent as many deals as universities did in San Francisco and Silicon Valley, a rate 10 times as high as would be expected based the Bay Area “norm.” One reason for this is Pittsburgh is relatively new to venture funding and may have more research assets than private venture capital firms. Therefore, university funds could fill an important capital gap.

A common worry is these non-private sector deals are poor investments that private firms, with superior market intelligence, simply refused to make. This argument is most persuasive in regions like the Bay Area where there is no shortage of private capital to fund good ideas. However in other regions these investments can prove to be smart precursors to private funding. Also, rarely do public institutions make investment decisions. Instead, public dollars are funneled through private investment firms to kick start regional activity. For example, Philadelphia’s new StartUp PHL fund is paid for by taxpayer dollars but investment decisions are made by First Capital, the city’s largest private venture capital fund. The fund requires recipients to stay in the city for at least six months after funding, with the hope to increase the number of growing technology companies in Philadelphia.

Cleveland and Pittsburgh are specific examples of a general point. Cities have unique technology competencies and pathways to venture capital. Economic strategies to attract outside, and bolster local capital, should reflect those attributes and not simply default to what seems to have worked in the Bay Area.