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On April 30, 2020, Vanda Felbab-Brown participated in an event with the Middle East Institute on the “Pandemic in Pakistan and Afghanistan: The Potential Social, Political and Economic Impact.”

On April 30, 2020, Vanda Felbab-Brown participated in an event with the Middle East Institute on the "Pandemic in Pakistan and Afghanistan: The Potential Social, Political and Economic Impact."

       




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The Political Crisis in Georgia: Prospects for Resolution

Event Information

June 17, 2009
4:15 PM - 5:30 PM EDT

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

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The government and opposition in Georgia remain locked in political stalemate. The opposition continues to hold rallies and to call for President Saakashvili to step down, and the opposition and government thus far have found no common basis for moving forward. All this plays out against a backdrop of lingering tensions in relations between Georgia and Russia in the aftermath of the August 2008 conflict.

On June 17, the Center on the United States and Europe (CUSE) at Brookings hosted Irakli Alasania, former Georgian permanent representative to the United Nations and currently the head of the Alliance for Georgia opposition group, for a discussion on the political crisis in Georgia and the prospects for resolution. After a decade of important positions in the Georgian government, Ambassador Alasania resigned from his position at the United Nations in December 2008 and has since been actively involved in the Georgian opposition. Brookings senior fellow Carlos Pascual introduced Ambassador Alasania and moderated the discussion.

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Election-Related Rights and Political Participation of Internally Displaced Persons: Protection During and After Displacement in Georgia

Introduction

Guaranteeing the right to vote and to participate in public and political affairs for all citizens is an important responsibility. Given the precarious position that IDPs can find themselves in and considering the extent to which they may need to rely on national authorities for assistance, IDPs have a legitimate and a heightened interest in influencing the decisions that affect their lives by participating in elections.   

Internally displaced persons often exist on the margins of society and are subject to a number of vulnerabilities because of their displacement. For instance, IDPs face an immediate need for protection and assistance in finding adequate shelter, food, and health care. Over time, they can suffer discrimination in accessing public services and finding employment on account of being an IDP from another region or town. IDPs also face an especially high risk of losing ownership of their housing, property, and land, something which can lead to loss of livelihoods and economic security as well as physical security. Women and children, who often make up the majority of IDP populations, face an acute risk of sexual exploitation and abuse.  

In addition to influencing public policy, elections can also be about reconciliation and addressing divisions and inequities that exist within society. For these reasons and others, IDPs should be afforded an opportunity to fully participate in elections as voters and as candidates.   

As noted in a press release of the Representative of the Secretary General of the United Nations on the Human Rights of Internally Displaced Persons following an official mission to Georgia in December 2005, 

“[IDP] participation in public life, including elections, needs promotion and support. Supporting internally displaced persons in their pursuit of a normal life does not exclude, but actually reinforces, the option of eventual return. … Well integrated people are more likely to be productive and contribute to society, which in turn gives them the strength to return once the time is right."[1]


[1] United Nations Press Release - U.N. Expert Voices Concern for Internally Displaced Persons in Georgia, 27 December 2005, available at http://www.brookings.edu/projects/idp/RSG-Press-Releases/20051227_georgiapr.aspx.

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Publication: International Foundation for Electoral Systems (IFES)
     
 
 




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From Responsibility to Response: Assessing National Approaches to Internal Displacement

Editor's Note: Launched at a December 5, 2011 event at Brookings, this study is based on a publication developed in 2005 by the Brookings-Bern Project on Internal Displacement: Addressing Internal Displacement: A Framework for National Responsibility.

EXECUTIVE SUMMARY

It is a central tenet of international law that states bear the primary duty and responsibility to protect the fundamental rights and freedoms of persons within their borders, including the internally displaced. While internally displaced persons (IDPs) remain entitled to the full protection of rights and freedoms available to the population in general, they face vulnerabilities that nondisplaced persons do not face. Therefore, in order to ensure that IDPs are not deprived of their human rights and are treated equally with respect to nondisplaced citizens, states are obligated to provide special measures of protection and assistance to IDPs that correspond to their particular vulnerabilities. Reflecting these key notions of international law, the rights of IDPs and obligations of states are set forth in the Guiding Principles on Internal Displacement (hereafter, “the Guiding Principles”).

Using the Guiding Principles as a departure for analysis, this study examines government response to internal displacement in fifteen of the twenty countries most affected by internal displacement due to conflict, generalized violence and human rights violations: Afghanistan, the Central African Republic, Colombia, the Democratic Republic of the Congo, Georgia, Iraq, Kenya, Myanmar, Pakistan, Nepal, Sri Lanka, Sudan, Turkey, Uganda and Yemen. The analysis seeks to shed light on how and to what extent, if any, governments are fulfilling their responsibility toward IDPs, with a view to providing guidance to governments in such efforts. In so doing, this study also seeks to contribute to research and understanding regarding realization of the emerging norm of the “Responsibility to Protect.” To frame the analysis, the introduction to this volume examines the connections among the concepts of national responsibility, “sovereignty as responsibility” and the “Responsibility to Protect” (R2P).

The comparative analysis across the fifteen countries, presented in chapter 1, is based on a systematic application of the document Addressing Internal Displacement: A Framework for National Responsibility (hereafter, “Framework for National Responsibility,” “the Framework”). Seeking to distill the Guiding Principles, the Framework outlines twelve practical steps (“benchmarks”) that states can take to directly contribute to the prevention, mitigation and resolution of internal displacement:

1. Prevent displacement and minimize its adverse effects.
2. Raise national awareness of the problem.
3. Collect data on the number and conditions of IDPs.
4. Support training on the rights of IDPs.
5. Create a legal framework for upholding the rights of IDPs.
6. Develop a national policy on internal displacement.
7. Designate an institutional focal point on IDPs.
8. Support national human rights institutions to integrate internal displacement into their work.
9. Ensure the participation of IDPs in decision making.
10. Support durable solutions.
11. Allocate adequate resources to the problem.
12. Cooperate with the international community when national capacity is insufficient.
     
 
 




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"From Responsibility to Response" Report Launch

Event Information

December 5, 2011
10:00 AM - 11:30 AM EST

Stein Room
The Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

On December 5, 2011, the Brookings-LSE Project on Internal Displacement held a private launch event for its report, From Responsibility to Response: Assessing National Approaches to Internal Displacement, which examines government response to internal displacement in fifteen of the twenty countries most affected by internal displacement due to conflict, generalized violence and human rights violations. The analysis presented in the report is based on the first ever systematic use as an assessment tool of the document, Addressing Internal Displacement: A Framework for National Responsibility, developed by the Brookings-Bern Project on Internal Displacement in 2005 to provide guidance to governments in their response to internal displacement.

Roberta Cohen (nonresident senior fellow at Brookings and former co-director of the Project) moderated the event, which featured remarks from the co-authors of the report, Elizabeth Ferris (senior fellow at Brookings and co-director of the Brookings-LSE Project on Internal Displacement), Erin Mooney (senior IDP and protection adviser at the United Nations and former deputy director of the Project) and Chareen Stark (senior research assistant, Brookings-LSE Project on Internal Displacement). In attendance were representatives from the US Department of State and international NGOs, as well as researchers from think tanks and universities.

Cohen opened the event by discussing the background and significance of the Guiding Principles on Internal Displacement. From the very beginning of discussions about internal displacement, there was an emphasis on the fundamental responsibility of national governments to protect and assist those displaced within their territory. And yet over the years there has been an awareness that international actors also have a role to play. She noted the positive strides that have occurred over the past twenty years in regards to government response to internal displacement. Country visits by the UN experts on IDPs—the Representatives of the Secretary-General on IDPs—have been instrumental to improving government response, in some instances leading governments to address internal displacement for the first time. Today, most governments understand their obligations and responsibilities to protect and assist IDPs; the challenge is often translating that understanding into concrete actions.

Elizabeth Ferris gave an overview of the Framework for National Responsibility, which was used to assess government response in each of the fifteen countries in the report (Afghanistan, The Central African Republic, Colombia, the Democratic Republic of the Congo, Georgia, Iraq, Kenya, Myanmar, Pakistan, Nepal, Sri Lanka, Sudan, Turkey, Uganda and Yemen). The Framework outlines twelve minimum steps—or benchmarks—that governments can take to address the protection and assistance needs of internally displaced persons within their territory, from preventing displacement to appointing a focal point on IDP issues, to facilitating the work of the international community. She explained the methodology used in the study and described the challenges the authors faced in conducting the research. For example, basic data on various aspects of government response was lacking in many instances and it was often difficult to determine the impact of a particular government policy in addressing internal displacement. In addition to analyzing the response of the fifteen governments on each of the twelve benchmarks, the study included four extended case studies commissioned for this report: Afghanistan, Georgia, Kenya and Sri Lanka.  Ferris discussed some of the overall findings of the study, noted that the Framework had proven to be a useful assessment tool for examining national responses to displacement, and suggested a number of areas where further research is needed. 

Erin Mooney briefed the audience on benchmark seven—designating an institutional focal point on IDPs—and benchmark ten—supporting durable solutions for IDPs. Mooney noted that designating a governmental focal point for addressing internal displacement is important for clarifying institutional responsibilities and, therefore, for increasing governmental accountability.  Of the 15 countries assessed, all but one had designated a national institutional focal point for addressing internal displacement. She discussed some of the challenges institutional focal points often face, including a lack of funding and a lack of political clout which often challenge their ability to coordinate across government agencies. Benchmark ten, the achievement of durable solutions, was one of the most complex and politicized areas of government action, and is  arguably the one in which government commitment to addressing displacement becomes most apparent. Governments tend to emphasize return as the primary solution to displacement, but, in situations where return has occurred, there is usually little information about whether IDPs have in fact achieved a durable solution. Mooney discussed some of the challenges the fifteen governments faced in finding durable solutions, noting that in none of the countries have durable solutions to displacement been fully achieved.

Chareen Stark discussed the report’s findings on benchmark one—the prevention of arbitrary displacement—and the study’s overall recommendations. Given that the study assessed governments already experiencing large-scale displacement and, in most instances, multiple waves of displacement, Stark said it was obvious that all fifteen governments had failed to prevent displacement. There were three major limitations to governments’ ability to prevent displacement: many of the governments are themselves parties to conflict; many of the governments assessed do not exercise effective sovereignty over all of their territory, due to the presence of nonstate armed actors and/or foreign militaries; and all of the assessed countries face financial and human capacity limitations. She explained that the study found that nearly half of the countries assessed had developed some sort of preventive measures (at least on paper), including several governments that had taken measures to prevent displacement from natural disasters but not conflict. Stark discussed some of these laws, policies and institutional mechanisms as well as the challenges to their effective implementation. She also outlined the report’s recommendations to governments of countries with IDP populations, such as developing and implementing laws and policies in line with the UN Guiding Principles on Internal Displacement and devoting adequate resources at the national and local levels.

Concluding the discussion, the panel responded to questions from the audience on issues such as incentives for governments to address internal displacement using the Framework for National Responsibility and challenges in data reporting and analysis.  Specific questions were also raised on benchmarks five (laws on internal displacement), six (policies on internal displacement), three (designating an institutional focal point for IDPs) and twelve (working with the international community).

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From National Responsibility to Response – Part I: General Conclusions on IDP Protection

Editor's Note: This is the first part of a two piece series on internal displacement that originally appeared online in TerraNullius. The second part is available here.

The Brookings-LSE Project on Internal Displacement recently released a study entitled "From Responsibility to Response: Assessing National Response to Internal Displacement." The study examined 15 out of the 20 countries with the highest number of internally displaced persons (IDPs) due to conflict, generalized violence and human rights violations—Afghanistan, the Central African Republic, Colombia, the Democratic Republic of the Congo, Georgia, Iraq, Kenya, Myanmar, Pakistan, Nepal, Sri Lanka, Sudan, Turkey, Uganda and Yemen.

According to estimates, these 15 countries represent over 70 percent of the world’s 27.5 million conflict-induced IDPs. Wherever possible, we also tried to include government efforts to address internal displacement by natural disasters. But in this and the subsequent blog post, we will focus on our main general conclusions as well as particular issues around housing, land and property (HLP) rights that emerged from our analysis (see Part II of this posting).

The study looks at how governments have fared in terms of implementing 12 practical steps (“benchmarks”) to prevent and address internal displacement, as outlined in the 2005 Brookings publication entitled "Addressing Internal Displacement: A Framework for National Responsibility." The 12 benchmarks are as follows:

1. Prevent displacement and minimize its adverse effects.
2. Raise national awareness of the problem.
3. Collect data on the number and conditions of IDPs.
4. Support training on the rights of IDPs.
5. Create a legal framework for upholding the rights of IDPs.
6. Develop a national policy on internal displacement.
7. Designate an institutional focal point on IDPs.
8. Support national human rights institutions to integrate internal displacement into their work.
9. Ensure the participation of IDPs in decisionmaking.
10. Support durable solutions.
11. Allocate adequate resources to the problem.
12. Cooperate with the international community when national capacity is insufficient.

Stepping back from HLP issues (to be addressed in a subsequent set of comments in Part II of this guest posting), we drew several key observations on our overall findings.

The study found that political will was the main determining factor of response to internal displacement. Governments cannot always control the factors that cause displacement, or may themselves be responsible for displacement, but they can take measures to improve the lives and uphold the rights and freedoms of IDPs. Internal displacement due to con­flict derives from political issues, and all aspects of a government’s response to it therefore are affected by political considerations, including, for example, acknowledgment of displacement, registration and collection of data on IDPs, ensuring the participation of IDPs in decision-making, assistance and protection offered to different (temporal) caseloads of IDPs, support for durable solutions, which durable solutions are supported, and the facilitation of efforts by international organizations to provide protec­tion and assistance to IDPs.

While none of the governments surveyed was fully protecting and assisting IDPs, four stand out in particular—Colombia, Georgia, Kenya and Uganda—for implementing their responsibility toward IDPs while three others—Central African Republic, Myanmar and Yemen—had particular difficulties in fulfilling their responsibilities toward IDPs. In Myanmar, the obstacles were primarily political while in Yemen and the Central African Republic, as in many of the countries surveyed, the limitations appear to arise primarily from inadequate government capacity.

The other eight countries were somewhere in between. For example, some, such as Nepal, have demonstrated a significant commitment at one particular point in time but have failed to follow through. Others, such as Sri Lanka, have at times demonstrated blatant disregard for their responsibility and have moved swiftly to try to bring an end to displacement. Sudan, Pakistan, and to a certain extent, Turkey, have very problematic records with respect to preventing displacement in one part of the country yet have supported efforts to bring an end to displacement in others. In some cases, such as Afghanistan and Yemen, the continuing conflict and the role of nonstate actors (and in Afghanistan, the presence of foreign militaries as well) have made it difficult for the government to respond effectively to internal displacement.

Prevention of internal displacement is paramount, but is probably the most difficult measure to take and the least likely to be taken in the countries as­sessed, which all had large IDP populations. Given the scale of displacement in the fifteen countries surveyed, it was to be expected that these governments would not have been suc­cessful in preventing displacement. Nearly half of the fifteen countries assessed had adopted some preventive measures on paper, but all fifteen have fallen short of actually prevent­ing displacement in practice.

Moreover, many national authorities themselves have been or are perpetrators of violence or human rights abuses that have led to displacement, and many states foster a culture of impunity for alleged perpetrators of serious human rights violations. Further, the presence of foreign military forces and/or non-state armed actors limits the abil­ity of many states to exercise full sovereignty over their territory and therefore to prevent the conditions that drive people into displacement. Some countries have taken steps to prevent dis­placement due to natural disasters or develop­ment but not due to conflict, indicating that the former is perhaps less politically taboo and/or practically less difficult to implement than the latter.

Sustained political attention by the highest authorities is a necessary, though not suffi­cient, condition for taking responsibility for IDPs. Nearly all of the governments surveyed, at least at some point, have exercised their responsibility to IDPs by acknowledging the existence of internal displacement and their responsibility to address it as a national prior­ity, for example, by drawing attention to IDPs’ plight. However, government efforts to raise awareness of internal displacement through public statements was not always a useful indicator of a government’s commitment to upholding the fundamental human rights and freedoms of IDPs.

Among the five countries with laws on or related to internal displacement, there were notable limitations to the scope of the laws and gaps in implementing them. Legislation was quite comprehensive in scope in at least two cases and was narrow in others, address­ing specific rights of IDPs or a phase of dis­placement. Other countries lacked a national legislative framework on IDPs but had generic legislation relevant to IDPs. Still others had laws that violated or could violate the rights of IDPs. Laws on internal displacement must be viewed in the context of other legislation and administrative acts applicable to the general population (e.g., those related to documenta­tion, residency, housing, land and property, and personal status), which this study reviews to the extent possible, particularly in the case studies on Georgia, Kenya, Afghanistan and Sri Lanka. In Africa, the region with the most IDPs, states have recognized in legally binding instruments the importance of addressing internal displace­ment by incorporating the Guiding Principles on Internal Displacement into domestic legisla­tion and policy.

Many of the governments surveyed have adopted policies or action plans to respond to the needs of IDPs, but adequate implementa­tion and dissemination were largely lacking. Nine of the countries surveyed had developed a specific policy, strategy or plan on internal displacement, implemented to varying degrees; those in six of these countries were still active at the time of writing. In addition, at least two countries had national policies in draft form, and one country that does not recognize conflict-induced displacement had a plan for mitigating displacement by cyclones and a plan on disaster risk reduction, although it did not discuss displacement. While in some cases positive steps had been taken, by and large im­plementation of policies on internal displace­ment remains a challenge and has, in some cases, stalled. Available information indicates that efforts to raise awareness of IDP issues and policies have largely been inadequate.

It is difficult to assess governments’ com­mitment of financial resources to address internal displacement, but some trends were identified. Addressing internal displacement, especially over time, is a costly venture. While it was difficult to obtain a full picture of a coun­try’s expenditure on IDPs, several countries allocated funds to assist IDPs, including a few that had no national laws or policies on IDPs. In at least two countries, funds for assisting IDPs seemed to diminish in recent years. In many countries, difficulties arise at the district or municipal levels, where local authorities bear significant responsibility for addressing internal displacement but face many obstacles, including insufficient funds, to doing so. Allegations of corruption and misallocation of funds intended to benefit IDPs at certain points has been observed in some of the countries as­sessed. Some countries seem to rely on inter­national assistance to IDPs rather than national funds.

National human rights institutions (NHRIs) contribute invaluably to improving national responses to internal displacement in a number of countries. In recent years, an increasing number of NHRIs around the world have begun to integrate attention to internal displacement into their work. NHRIs have played an impor­tant role in raising awareness of internal dis­placement, monitoring displacement situations and returns, investigating individual complaints, advocating for and advising the government on the drafting of national policies to address inter­nal displacement, and monitoring and reporting on the implementation of national policies and legislation. In particular, the NHRIs of six of the countries surveyed stand out for their efforts to promote the rights of IDPs in their countries. Interestingly, almost all of their work with IDPs is funded by international sources, raising the question of whether national governments themselves should not be doing more to increase their funding of NHRIs in order to support their engagement with IDP issues.

International actors are valuable resources for efforts aiming to improve government response to IDPs. In many cases, the past Representatives of the UN Secretary-General (RSGs) mandated to study the issue of internal displacement (Francis Deng and his successor Walter Kälin) and the current UN Special Rapporteur on the Human Rights of Internally Displaced Persons (Chaloka Beyani) had exercised significant influence on governments in encouraging and supporting action on behalf of IDPs. Along with these actors, UNHCR and the Brookings Project on Internal Displacement have provided technical assis­tance to support governments’ efforts to de­velop national legal frameworks to ensure IDPs’ access to their rights.

Durable solutions: Return was the durable solution most often supported by the govern­ments assessed. The Framework for National Responsibility identifies three durable solu­tions—return, local integration and settlement elsewhere in the country. However, the fifteen countries surveyed herein reflect a global ten­dency to emphasize return, often excluding the other durable solutions. Yet for solutions to be voluntary, IDPs must be able to choose among them, and local integration or settlement else­where in the country may in fact be some IDPs’ preferred solution. Especially in situations of protracted displacement, those may be the only feasible solutions, at least in the near future.

The most difficult benchmarks to analyze were those whose underlying concepts are very broad and those for which data was seemingly not publicly available. Chief among these were the benchmarks on preventing internal displacement (Benchmark 1), raising national awareness (Benchmark 2), promoting the participation of IDPs in decisionmaking (Benchmark 9), and allocating adequate resources (Benchmark 11). Analysis on all other benchmarks also faced data constraints as in many cases data were outdated or incomplete or simply were not available. Nonetheless, we found that the twelve benchmarks all directed attention to important issues in governments’ responses to internal displacement.

We also found that while protection is central to the Framework, the issue is of such importance that there should be a benchmark explicitly focused on it—and specifically on protection as physical security, provided to IDPs during all phases of displacement. This benchmark would also underscore the responsibility of governments to protect the security of humanitarian workers engaged with IDPs.

Overall, the study found that the Framework for National Responsibility is a valuable tool for analyzing government efforts to prevent dis­placement, to respond to IDPs’ needs for protection and assistance and to support durable solutions. But this study also reveals certain limitations to using the Framework as an assessment tool, particularly in terms of accounting for the responsibility of nonstate actors; accounting for national responsibility for protection, particularly during displacement; and accounting for causes of displacement other than conflict, violence and human rights violations.

Authors

Publication: TerraNullius
      
 
 




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From National Responsibility to Response – Part II: Internally Displaced Persons' Housing, Land and Property Rights

Editor's Note: This is the second part of a two piece series on internal displacement that originally appeared online in TerraNullius. The first part is available here.
 
This post continues our discussion of the study entitled "From Responsibility to Response: Assessing National Response to Internal Displacement" recently released by the Brookings-LSE Project on Internal Displacement.

Addressing housing, land, and property (HLP) issues is a key component of national responsibility. Principle 29 of the non-binding but widely accepted Guiding Principles on Internal Displacement emphasizes that competent authorities have a duty to assist IDPs to recover their property and possessions or, when recovery is not possible, to obtain appropriate compensation or another form of just reparation.

The 2005 Framework for National Responsibility – which set the benchmarks we applied in our current study – reaffirms this responsibility (in Benchmark 10, “support durable solutions”) and flags a number of the challenges that often arise, such as IDPs’ lack of formal title or other documentary evidence of land and property ownership; the destruction of any such records due to conflict or natural disaster; and discrimination against women in laws and customs regulating property ownership and inheritance. The Framework for National Responsibility stresses that, “Government authorities should anticipate these problems and address them in line with international human rights standards and in an equitable and non-discriminatory manner.”

The extent to which a government has safeguarded HLP rights, including by assisting IDPs to recover their housing, land, and property thus was among the indicators by which we evaluated the efforts of each of the 15 governments examined in our study. Our findings emphasized the importance of both an adequate legal and policy framework for addressing displacement related HLP issues and the role that bodies charged with adjudication and monitoring can play in ensuring implementation.

HLP Law and Policy Frameworks

One of the most encouraging signs of governments taking seriously their responsibility to address internal displacement has been the development, adoption and implementation in all regions of the world of specific laws and policies that respect the rights of IDPs. Some of the countries surveyed have developed laws, decrees, orders, and policies that protect IDPs’ HLP rights, but these measures are also not without their limits and challenges. A few examples are presented below.

In Colombia, while Law 387 on Internal Displacement (1997) stipulates the right of IDPs to compensation and restitution (Article 10), the government has been hard-pressed to establish measures enabling them to realize that right (see further, below). In Colombia, the constitutional complaint process – the acción de tutela petition procedure – has made the government accountable to IDPs and has influenced government policy toward IDPs, including the policy of allocation of government assistance such as housing subsidies.

In Georgia, the legal framework for IDP protection includes a property restitution law for IDPs from South Ossetia, adopted in 2007, which provided for the establishment of a Commission on Restitution and Compensation; however, this body never became operational and the status of the law is unclear following the August 2008 conflict. The State Strategy on IDPs, also adopted in 2007, protects IDPs against “arbitrary/illegitimate eviction” and sets out a large-scale program for improving the living conditions of IDPs in their place of displacement, all the while reaffirming their right to property restitution.[1]

Displaced families whose homes were destroyed or damaged during the August 2008 received $15,000 from the government to rebuild their homes, although many IDPs have held off reconstruction efforts due to concerns about insecurity. The RSG on IDPs recommended in 2009 the established of a comprehensive mechanism for resolving HLP claims for both the South Ossetia and Abkhazia conflicts. In addition, in 2010, Georgia adopted procedures for vacating and reallocating IDP housing, which, among other things, addresses those cases in which removal of IDPs from a collective center is ordered by the government and may require an eviction, and spells out safeguards for guaranteeing the right of IDPs.[2]

Iraq’s 2005 Constitution protects Iraqis against forced displacement (Article 44(2)). Through its Property Claims Commission, formerly the Commission on the Resolution of Real Property Disputes established by Order No. 2 (2006), Iraq has sought to recover property seized between 1968 and 2003, although significant gaps and challenges remain. For those internally displaced between 2006 and 2008, Prime Ministerial Order 101 (2008) sets out a framework for providing property restitution for registered IDPs with a view to encouraging and facilitating their return to Baghdad governorate, the origin of the majority of post-2006 IDPs and the location of the majority of post-2006 returnees. However, there have been few claims; many IDPs lack the necessary documentation, do not trust government institutions, fear retribution or cannot afford the requisite costs.[3]

In Afghanistan, where national authorities have not yet defined “internally displaced persons,” property and land rights of IDPs are either specifically addressed or generally implicated in substantive and procedural provisions found in a series of executive acts that have been issued since 2001, including the most IDP-specific of them, Presidential Decree No. 104 on Land Distribution for Settlement to Eligible Returnees and Internally Displaced Persons (2005). This decree sets forth a basic framework for distributing government land to both IDPs and returnees as a means of addressing their housing needs. However, IDPs seeking access to land are required to provide their national identity cards (tazkera) and documentation proving their internal displacement status—documentation which they may have lost. Moreover, the decree does not recognize other fundamental rights or needs of the internally displaced; it is valid only in areas of origin; and its implementation has been marred by inefficiency and corruption within the very weak ministry that is tasked with its implementation.

Although the 2006 peace agreement in Nepal  included a commitment to return occupied land and property and to allow for the return of displaced persons, four years after the peace agreement (and three years after the adoption of a national policy), between 50,000 and 70,000 people remained displaced.  Nearly half of the returnees interviewed by the Nepal IDP Working Group reported serious land, housing and property problems.  Of the more than 10,000 claims for compensation for property filed in 2007 only 2,000 families had received support to reconstruct or repair their houses by 2009.  It is widely reported that IDPs with non-Maoist political affiliations have been the least likely to recover land and property.

In Turkey, the government has yet to take full responsibility for displacement caused by its security forces against a largely Kurdish population. In its Law 5233 on Compensation of Damages That Occurred Due to Terror and the Fight against Terror (27 July 2004) and its Return to Village and Rehabilitation Program, displacement is defined in terms of “terrorism” or the “fight” against it. This law does not specifically focus on internal displacement, but it does benefit IDPs among other affected populations. Law 5233 and its related amendments and regulations compensate for “material damages suffered by persons due to terrorist acts or activities undertaken during the fight against terror” between 1987 and 2004. Compensation is provided for three types of damage: loss of property; physical injuries, disabilities, medical treatment, death and funerals; and inability to access property due to measures taken during “the fight against terrorism.”

According to the law, compensation is to be determined by damage assessment commissions (DACs) at the provincial level, with funding provided by the Ministry of the Interior. From 2004 to August 2009, the commissions received just over 360,000 applications. Of those, over 190,000 claims were decided: 120,000 were approved and the claimants awarded compensation; the remaining 70,000 were denied. Around $1.4 billion in compensation was awarded, of which close to $1.1 billion has been paid.[4] The existing legal and policy framework do not adequately address the obstacles to return, including the village guard system, insecurity and the presence of landmines and unexploded ordnance.

In Kenya, the government’s promotion of return included a National Humanitarian Emergency Fund for Mitigation and Resettlement of Victims of 2007 Post-Election Violence which was to meet the full costs of resettlement of IDPs, including reconstruction of basic housing, replacement of household effects and rehabilitation of infrastructure. But in practice, the government has been criticized for promoting return before conditions were safe. The government has also tended to focus on IDPs who own land and to attach durable solutions to land; there is no clear strategy for dealing with landless IDPs, such as squatters and non-farmers.

Awareness among IDPs as to their housing, land, and property rights under existing law – where there is law addressing those rights – is inadequate in many instances. For example, in Turkey, about half of IDPs surveyed in 2006 were not aware of their entitlements under the Return to Village and Rehabilitation Program or the Law on Compensation. [5]

National Human Rights Institutions and Constitutional Courts

In some cases, national human rights institutions (NHRIs) and constitutional courts have a critically important role to play in supporting as well as in holding governments accountable to guarantee the rights of IDPs. In a number of the countries our study examined, the work of NHRIs on internal displacement has included a focus on HLP issues.

In Georgia, for example, the Public Defender has been actively monitoring and reporting on the country-wide housing program begun in 2009 and has raised concerns about evictions of IDPs and the quality of housing in relocation sites. The Public Defender’s office also has undertaken a study on the conditions of the hidden majority of IDPs living in private accommodation rather than in collective centers.

The Afghanistan Independent Human Rights Commission has reported on and raised concerns about the large number of IDPs living in urban slums and informal settlements and about the fact that many IDPs were unable to return to their homes due to disputes over land and property.

Constitutional courts have in some instances played a role in strengthening the national legal framework for protecting the property rights of IDPs. Notably, Colombia’s activist Constitutional Court, in its Decision T-821 in October 2007, ordered the government to ensure respect for IDPs’ right to reparation and property restitution. In January 2009, the Constitutional Court ordered the government to comprehensively address land rights issues and to establish mechanisms to prevent future violations.

Subsequently, the government has sought to ensure these rights by adopting in 2011 the historic and ambitious Law 1448, known as the Victims and Land Restitution Law. In this law, government acknowledges for the first time ever the existence of an internal armed conflict in Colombia, and recognizes as “victims” those individuals or communities whose rights were violated under international humanitarian law or international human rights law. The law regulates reparations for all victims of the armed conflict since 1985 – numbering over 5 million – including through land restitution or compensation for IDPs which is to occur over the next decade.

However, restitution of land does not guarantee returnees’ security and may even endanger people given that land disputes and seizures remain a driving force of displacement. Aiming to prevent further victimization of returnees as a result of insecurity and violence, the government established a new security body, the Integrated Center of Intelligence for Land Restitution (Centro Integrado de Inteligencia para la Restitución de Tierras, also known as CI2-RT) within the Ministry of Defense. Additional participants include the Office of the Vice President, the Ministry of Justice and Interior, the Department of Administrative Security (DAS), Social Action (Acción Social), Incoder, and organizations representing victims of violence. Time will tell how successful the implementation of this ambitious law will be.

In Georgia, the Constitutional Court has also played an important role by recognizing the rights of IDPs to purchase property without losing their IDP status or in any way jeopardizing their right to return.

Conclusion

Securing HLP rights for IDPs is, of course, a key component of finding durable solutions to displacement. The study found that land and property disputes are almost always sources or manifestations of lingering conflict and often an obstacle to IDPs’ free exercise of their right to return.  While some governments have made efforts to provide mechanisms for property restitution or compensation, those mechanisms have rarely been adequate to deal—at least in a timely manner—with the scale and complexity of the problem. National human rights institutions and constitutional courts can play a key role in holding governments accountable for HLP and other rights and freedoms of IDPs.


[1] Government of Georgia, State Strategy for Internally Displaced Persons–Persecuted Persons, Chapter V.

[2] The Standard Operating Procedures for Vacation and Reallocation of IDPs for Durable Housing Solutions (2010) (www.mra.gov.ge)

[3] IDMC, Iraq: Little New Displacement but around 2.8 Million Iraqis Remain Internally Displaced: A Profile of the Internal Displacement Situation, 4 March, 2010, p. 240 (www.internal-displacement.org)

[4] IDMC, Turkey: Need for Continued Improvement in Response to Protracted Displacement: A Profile of the Internal Displacement Situation, 26 October 2009, p. 12, citing correspondence with the government of Turkey, 17 September 2009 (www.internal-displacement.org)

[5] Hacettepe University, Institute of Population Studies, "Findings of the Turkey Migration and Internally Displaced Population Survey," press release, 6 December 2006, cited in IDMC, Turkey: Need for Continued Improvement in Response to Protracted Displacement: A Profile of the Internal Displacement Situation, 26 October 2009, p. 11 (www.internal-displacement.org)

Authors

Publication: TerraNullius
      
 
 




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20200424 Politico Fiona Hill

       




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Building a more data-literate city: A Q&A with HyeSook Chung


DC KIDS COUNT, housed at the nonprofit DC Action for Children, is the DC chapter of a nationwide network of local-level organizations aiming to provide a community-by-community picture of the conditions of children. The 26 year-old project is funded by the Annie E. Casey Foundation and its aim is to provide high-quality data and trend analysis as well as help local governments monitor budget and legislative decisions based on evidence of what works for children and families. As we pointed out in our recent papers and a blog, developing reliable and comprehensive data is a critical step to building effective community partnerships and producing outcomes that improve economic mobility and health in a neighborhood.

We discussed these issues with HyeSook Chung, Executive Director of DC Action for Children.

Q. Please summarize the history of the DC Kids Count project. What motivated it, and how it has evolved over the last years?

A. As part of the nationwide Kids Count network, each chapter tracks a number of indicators on child and family well-being through an online database called Kids Count Data Center. Each chapter also releases a yearly data book which summarizes the state of child well-being within their state or locality. When DC Action for Children became the host of DC Kids Count in 2012, I wanted to rethink the way we presented our data to move beyond the traditional print format into the exciting realm of visualizing data. This led to the beginning of our partnership with DataKind, a group of dedicated pro-bono data scientists who worked with us to create an interactive, web-based data tool that maps out indicators of child well-being across DC’s 39 neighborhood clusters.

We know that the neighborhood children grow up in, and the resources they have access to, plays a huge role in shaping children’s future opportunities. The maps we created with our Data Tool 2.0  reveal sharp disparities in DC neighborhoods: some DC neighborhoods are wealthy and have many assets, while others are characterized by high levels of poverty. The many challenges that come with high poverty neighborhoods include: poorer performing schools, more crime, and less access to libraries, parks, and healthy foods.  

Q. What type of indicators do you gather? How many years does the data cover? What level of granularity does the data have?

A. We track a variety of indicators of child well-being, including demographics, economic well-being, health and safety. The data is housed online in two places: The KIDS COUNT Data Center and our Data Tool 2.0. The Data Tool 2.0 maps the most recent available data at the neighborhood cluster, while the Data Center allows for a wider range of geographies (citywide and ward level) and different timeframes.  Many of the indicators have data from 1990 to the present.

Q. How do you measure the data tool’s impact on policy and legislation?

A. We have made it a priority to conduct internal evaluations to assess the utilization of the online tool, but we also believe that measuring the tool’s impact must go beyond traditional web analytics. We regularly use the Data Tool 2.0 in our work with city officials and direct service providers to offer an overview of the social context in the city’s different neighborhoods.     

In a city where the allocation of resources is often guided by personal relationships and old-school politics, it is important to show clearly whether budget decisions are aligned with the needs of our children. We believe that our Data Tool 2.0 project can bring much needed transparency to the allocation of the DC government budget and help achieve agreement.

Q. The DC Kids Count project is helping build data capacity across organizations, with the aim of creating a more “data-literate” city. Could you tell us about some of these initiatives? 

A. Businesses like Amazon and Netflix increasingly focus on finding “actionable” insights from their data. For them, “big data” analytics can help answer tough business questions. With the right platforms for analytics, they can increase efficiency or even improve operations and sales.

In a similar manner, we at DC Action for Children believe that big data opens up the opportunity for us to improve and reshape our strategy and decision making process to better align services with the needs of DC children in the same way Amazon or Netflix does with their customers.

For instance, we are offering the Child and Family Services Agency technical and data analysis support for their Healthy Families Thriving Communities Collaboratives, which are a citywide network of community-based organizations designed to embed family supports in their communities. Their mission is to strengthen and stabilize families and to prevent child abuse and neglect by offering services in the form of case management and support. We use KIDS COUNT data at the ward and neighborhood levels to highlight needs in the community and inform their planning. This encourages the Collaboratives’ staff to look at data differently—integrating it as a vital part of their program planning and strategy.

Q. What are some of the obstacles and challenges you face in integrating the data, and updating it?

A. Historically, our data analysis looked at more traditional indicators, such as program enrollment and the number of child welfare cases. But now we think we can use our access to big data to pull out patterns within our datasets and help guide the decisions of the city administrators. For example, if we are trying to prevent future child abuse cases, we can look at patterns analyzing family and child data in specific neighborhoods. We can use the type of predictive analysis practiced in the for-profit business to help us serve DC children more efficiently and effectively.

One of the most significant obstacles we face is ensuring that the indicators are up-to-date. This can be an issue with government agencies since some of them are slow in their release of new data.  Moreover, there is also no standard format across local agencies for how data is collected and released. Furthermore, data is often aggregated at different geographical units, like zip codes or census tracts. To get the data ready to upload to our Data Tool, we must recalculate the data into neighborhood clusters.  

Q. What policy changes would help produce better data-sharing ecosystems? 

A. DC has in many ways demonstrated leadership in data sharing. The Office of the Chief Technology Officer works to make a large variety of datasets publicly available. We have also seen large investments over the years to create new data systems that track progress and service delivery for different agencies. But our city can do more to promote a data-sharing ecosystem. So can other cities.

While multiple agencies are adopting innovative data systems, the systems are often siloed and do not speak to each other. Moreover, since data is tracked differently across agencies, based on needs and requirements for reporting, it is difficult for agencies to share data both publicly and internally. It is also often difficult to get access to de-identified disaggregated data for richer analysis. We are glad that many agencies recognize the value of robust data collection, but more data transparency policies would give us a better understanding of the challenges that lie behind improving the wellbeing of children in the city.

Q. What are the next steps for the DC Kids Count project, and how do you expect it to grow over the next few years?

A. We just finished wrapping up some of the final work on our DataTool 2.0. In terms of next steps, we are working on a handbook that explains how we created our Data Tool so that other Kids Count chapters and organizations can replicate and adapt our tool.

We would also like to add local budget data to the asset maps to see if public investments align with the neighborhoods that need it the most. This would give us a more nuanced understanding of the geography of DC budget investments, including inequities in investments by geography and demographics.

Big data analytics has changed the way we focus our priorities and engage in business practices. I’m committed to this movement. I think that, through big data, we can also revolutionize the way we do policy.

***

In conclusion, DC Kids Count, housed at the nonprofit DC Action for Children, belongs to a larger, nationwide group of organizations helping to better coordinate regional development through data-driven decision making. By centralizing different government databases, and providing real-time, community level data, DC Kids Count can help local government entities allocate their resources more efficiently and creatively and help foster place-conscious strategies. The process behind compiling the data also illustrates many of the challenges—data sharing, interoperability of data systems, access to real-time data involved in building “data- sharing ecosystems.”

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America’s zip code inequality


Inequality remained a prominent theme in public debate during 2015, likely helped by the unexpected rise and resilience of democratic socialist Bernie Sanders' run for the Democratic presidential nomination. Although the labor market continued its slow recovery, wage growth remained fairly weak—especially for middle and low earners. The upper middle class continues to pull away from the middle, not least in terms of income and wealth.

But it has also become much clearer that inequality is a geographical issue, as much as a social and economic one. Whether the focus is on the more immediate matter of income inequality or the slower-burning issue of intergenerational mobility, there is huge variation between different places in the United States.

Not all cities are created equal…

National income trends are important, of course. But they can often disguise deep differences by place. The income required to be ‘rich,’ at least by comparison to those around you, varies significantly between different cities, for example. A household income of $100,000 puts you on almost on the top rung (around the 95th percentile) of the income ladder in Detroit. But to reach the same heights in San Jose, California, you’d need an income three times as great, according to calculations by my colleague Alan Berube.

There are also very large differences in the extent of income inequality in different metropolitan areas. Using the inequality measure used in another recent paper by Berube, the ratio between incomes at the 20th percentile and the 95th percentile, shows that while some cities have large gaps between rich and poor, others look almost Scandinavian in their egalitarian distributions. Here are the 20/95 ratios for the three most equal and unequal cities in the U.S.:

Intergenerational mobility varies—a lot—by place

In a groundbreaking research paper in 2014, Raj Chetty and his team at the Equality of Opportunity Project at Harvard showed that rates of intergenerational income mobility also vary considerably between different cities. It was always a stretch to compare the U.S. to Denmark on this front, given the colossal differences between the countries. But such comparisons became virtually unconscionable once the variations within the U.S. become apparent.

This year, Chetty and his co-author Nathaniel Hendren went a step further and a big step closer to showing a causal impact of place on the prospects for children raised in different locations. Again relying on large administrative datasets, the two scholars were able to show the variation in earnings for the folk hailing from, say, Baltimore versus Baton Rouge.

Professor Chetty presented his new research at a Brookings event in June (which you can view here), just weeks after the eruption of protest and violence in Baltimore following the death of Freddie Gray. One striking finding was that the worst place in America to grow up, in terms of subsequent earnings, is Baltimore City. Critically, Chetty’s research design allows him to show that these differences do not reflect the characteristics of the people of Baltimore; but the characteristics of Baltimore itself. This downward effect on earnings is particularly bad for boys, as we highlighted in an earlier blog:

In related work, Chetty and his colleagues also show that children who move to a better place see an improvement in their own earnings—and that the younger they are when they move, the bigger the impact. The children of families who move as a result of the U.S. Department of Housing and Urban Development’s Moving to Opportunity program showed sizable improvements in their own outcomes, as Jonathan Rothwell highlighted in his blog, 'Sociology’s revenge: Moving to Opportunity (MTO) revisited.'

Race, place and opportunity

One of the findings from Chetty’s earlier work is that race, place, and opportunity intersect in important ways. Cities with more segregation, and those with larger black populations, tend to show weaker upward mobility patterns. In order to understand the obstacles to upward mobility, policymakers have to adopt both a place-conscious (Margery Turner) and a race-conscious perspective. This policy was the subject of another Brookings event in November, with contributions from the Deputy Prime Minister of Singapore, the Governor of Delaware, and the Mayor of Newton, Mass. (The event can still be viewed here; for my highlights see this piece.) Being poor and black is generally not the same as being poor and white. Being poor in Cleveland is not the same as being poor in Charlotte.

On equal opportunity: think local, act local

Many states and cities are upping their game on issues of equality and opportunity, for both bad and good reasons. The bad reason is the relative inertia of the federal government. The good reason is a growing recognition that many of the levers for improving opportunity lie in the hands of institutions and agents at the state and metro level. Colorado has adopted a life-cycle opportunity framework and is pioneering efforts to integrate health and social policy. Charlotte has a high-profile taskforce (which I advise) on improving opportunity. Cincinnati has pledged to lift 10,000 children out of poverty within five years. Louisville is leading a push on school desegregation. Kalamazoo is adding greater student supports to its existing promise of free college. Baltimore’s program to reduce infant mortality has shown remarkable success. Durham, N.C. has rolled out a universal home visiting program.

Many of these efforts are building on the emerging ideas around 'collective impact,' harnessing local resources of many kinds around a clearly-articulated, shared goal. Given the scholarship showing just how much particular places influences individual and broader outcomes, this is likely to be where much of the most important policy development will take place in coming years. In terms of equality—and especially equality of opportunity—we need to think local, and act local, too.

     
 
 




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Income Inequality, Social Mobility, and the Decision to Drop Out Of High School


How “economic despair” affects high school graduation rates for America’s poorest students

MEDIA RELEASE

Low-Income Boys in Higher Inequality Areas Drop Out of School More Often than Low-Income Boys in Lower Inequality Areas, Limiting Social Mobility, New Brookings Paper Finds
“Economic despair” may contribute if those at the bottom do not believe they have the ability to achieve middle class status

Greater income gaps between those at the bottom and middle of the income distribution lead low-income boys to drop out of high school more often than their counterparts in lower inequality areas, suggesting that there is an important link between income inequality and reduced rates of upward mobility, according to a new paper presented today at the Brookings Panel on Activity. The finding has implications for social policy, implying a need for interventions that focus on bolstering low-income adolescents' perceptions of what they could achieve in life.

In “Income Inequality, Social Mobility, and the Decision to Drop Out Of High School,” Brookings Nonresident Senior Fellow and University of Maryland economics professor Melissa S. Kearney and Wellesley economics professor Phillip B. Levine propose a channel through which income inequality might lead to less upward mobility—often assumed to be the case but not yet fully proven. The conventional thinking among economists is that income inequality provides incentives for individuals to invest more in order to achieve the higher income position in society, but Kearney and Levine observe that if low-income youth view middle-class life as out of reach, they might decide to invest less in their own economic future.


See an interactive map of inequality by state, plus more findings »


The authors focus on income inequality in the lower half of the income distribution, as measured by income gaps between the 10th and 50th percentiles of the income distribution rather than income gaps between the the top and bottom of the income distribution, which has been more of a focus in popular culture. They show this "lower-tail" inequality is more relevant to the lives of poor youth because the middle is a more realistic ambition. Furthermore, their research could reconcile a puzzle: social mobility does not appear to be falling, despite the rise in income inequality. But, as Kearney and Levine point out, U.S. income inequality has been rising because the top of the distribution has been pulling away from the middle, not because the bottom is falling farther behind the middle.

The authors look specifically at high school drop-out rates through a geographic lens, noting the link between highly variable rates of high school completion and income inequality across the country. One-quarter or more of those who start high school in the higher inequality states of Louisiana, Mississippi, Georgia, and the District Columbia fail to graduate in a four-year period, as compared to only around 10 percent in Vermont, Wisconsin, North Dakota, and Nebraska—lower inequality states. Their econometric analysis goes on to show that low-income youth—boys in particular—are 4.1 percentage points more likely to drop out of high school by age 20 if they live in a high-inequality location relative to those who live in a low-inequality location.

Kearney and Levine examine a number of potential explanations for this link, including differences in educational inputs, poverty rates, demographic composition, and other factors. Ultimately, the evidence suggests that there is something specific about areas with greater income gaps that lead low-income boys there to drop out of school at higher rates than low-income boys elsewhere. The authors' research suggests that adolescents make educational decisions based on their perceived returns to investing in their educational development: a greater distance to climb to get to the middle of the income distribution could lead to a sense that economic success is unlikely—what they term “economic despair.”

"Income inequality can negatively affect the perceived returns to investment in education from the perspective of an economically disadvantaged adolescent,” they write. “Perceptions beget perceptions."

Digging into reasons students themselves give for dropping out, they find that low-income students from more unequal places are more likely to give up on their educational pursuits. Surprisingly, survey evidence shows that academic performance does not have as large an impact on low-income students in high inequality states: 51 percent of dropouts in the least unequal states reported that they dropped out because they were performing poorly, as compared to only 21 percent of students who dropped out in the most unequal states.

The finding suggests that economic despair could play an important role: if a student perceives a lower benefit to remaining in school, then he or she will choose to drop out at a lower threshold of academic difficulty. They also note that while the wage premium of completing high school should reduce the dropout rate, household income inequality has an offsetting negative effect.

The choice between staying in school and dropping out may reflect actual or perceived differences from the benefits of graduating. For instance, the authors note their past research showing that youth from low-income households who grow up in high lower-tail inequality states face lifetime incomes that are over 30 percent lower than similar children in lower inequality states. They also highlight other research showing that the overwhelming majority of 9th graders aspire to go to college, but by 11th grade, low-SES students are substantially less likely to expect they will enroll in college, even among those students with high test scores.

"There are important policy implications for what types of programs are needed to improve the economic trajectory of children from low-SES backgrounds," they write. "Successful interventions would focus on giving low income youth reasons to believe they have the opportunity to succeed. Such interventions could focus on expanded opportunities that would improve the actual return to staying in school, but they could also focus on improving perceptions by giving low-income students a reason to believe they can be the "college-going type." For example, interventions might take the form of mentoring programs that connect youth with successful adult mentors and school and community programs that focus on establishing high expectations and providing pathways to graduation. They could also take the form of early-childhood parenting programs that work with parents to create more nurturing home environments to build self-esteem and engender positive behaviors."

Read the full paper from Kearney and Levine here »

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Authors

  • Melissa Kearney
  • Phillip Levine
Image Source: © Steve Dipaola / Reuters
      
 
 




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Metropolitan Lens: How Baltimore’s new mayor can promote economic growth and equity


The mayoral election in Baltimore has brought local economic development strategies to the forefront. In a city in which inequality—by income, by race, and between neighborhoods—has increased in the past five years, the candidates have made it clear that more action must be taken to close disparities and improve economic outcomes for all residents. In a podcast segment, I commend the much-needed focus on equity but argue that the mayoral candidates should not lose sight of another critical piece of the equity equation: economic growth. Citing lessons from my recent paper, I outline strategies that Baltimore’s presumptive leaders should pursue—as well as several they should abandon—to place the city’s residents on the path to a more prosperous, equitable future.

Listen to the full podcast segment here: 

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Image Source: © ERIC THAYER / Reuters
      
 
 




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What genetic information can tell us about economic inequality


Income and wealth inequality in the U.S. is a stark reality.  Research from a variety of fields demonstrates that children born into poor families tend to end up less educated, less healthy, more prone to contact with the police, and less likely to accumulate wealth over a lifetime.  In contrast, children born into well-off families tend to exhibit better outcomes on all of these dimensions.

How should social scientists and policymakers understand and address intergenerational mobility in the U.S.? This question is difficult to answer—and highly politicized.  To start with, there are several possible mechanisms driving high intergenerational persistence of economic outcomes.  These are often characterized as factors related either to “nurture” or “nature.” 

The “nurture” hypothesis asserts that poor parents lack critical resources such as wealth or information.  Such parents may therefore find it difficult to make the education and time investments that would promote better economic outcomes for their children.  If this is true, then children born into poor families never reach their full potential because of a lack of household resources. 

A second possible mechanism is often referred to as the “nature” hypothesis.  Economically successful parents might be more likely to have successful children.  Such an account hinges on the idea that there are heritable biological traits or abilities that more successful parents “pass on” to their children.

To complicate the matter further, the mechanisms of nature and nurture almost certainly operate at the same time.  Moreover, it is likely that abilities and investments interact in complicated ways. For example, a particular investment might do more to improve the outcomes of a lower-ability child than a higher-ability child, or vice versa.  Understanding this process, and how it affects intergenerational mobility, is notoriously difficult.  However, greater clarity is precisely what is needed to guide effective policy. 

If a lack of investment is the dominant mechanism explaining intergenerational persistence in economic outcomes, then we as a society may be wasting human potential.  Policies correcting under-investments in human capital could therefore be justified as economically efficient. In contrast, if the intergenerational transmission of ability plays a role, then investments in poor children’s human capital may not be enough.  To clarify, it is critical to state that the distinction we make here between “high-ability” and “low-ability” individuals should not be interpreted as a claim that some people are naturally or biologically superior to others.  We use “ability” as shorthand to describe those traits that are rewarded in the existing labor market.  Even if these abilities are linked to heritable biological factors, this does not mean that their impact on life outcomes is immutable or fixed.  Modifying environments could substantially affect genetic disparities. The case of vision and eyeglasses offer one classic example.  There may well be biological factors that explain variation in eyesight “ability,” but these biological differences will matter more or less for life outcomes depending on the availability of glasses and other medical interventions.  In short, it is very possible that the consequences of biological differences can be moderated by appropriate changes in the environment.     

Until now, researchers have typically used variables such as cognitive test scores to measure ability endowments related to human capital.  Yet, these traditional measures are subject to the critique that they are the products of earlier investments in human capital. This makes it difficult to distinguish between the “nature” and “nurture” hypotheses using such data.  Two individuals with similar ability endowments but different levels of household resources are likely to exhibit different cognitive test scores, for example. 

Using genetic information to measure ability endowments can help us better understand the intergenerational transmission of human capital.  As a measure, genetic information has a clear advantage over cognitive test scores because it is fixed at conception. Advances in measuring differences in DNA across individuals, together with very recent advances in behavioral genetics research, now make it possible to link genetic differences across people to behavioral traits.  These new discoveries have even extended to educational attainment, which was once thought to be too complicated and removed from direct biological processes for genetic analysis.

In a recent research paper, we use genetic information to better understand the nature of intergenerational mobility.  We follow the cutting edge in behavioral genetics research, which guides us in computing a type of genetic “score” for any individual.  We compute this so-called “polygenic score” for each person in a sample of over 8,000 individuals from the Health and Retirement Study (HRS). The score, which appears to be related to cognition, personality, and facility with learning, has some predictive power for educational attainment. In particular, it explains between 3.2 percent and 6.6 percent of the variation across individuals (depending on the specification). Thus, knowing the exact value of an individual’s score will tell you very little about that person (over 90 percent of the variation is explained by other factors).  However, the average relationship in the population between the score and human capital outcomes can offer some important lessons.  

Using the polygenic score, we believe we can gain new insights into how ability endowments interact with an individual’s environment to generate economic outcomes.  There is a long-standing debate in the economics literature about how ability and investments interact.  One idea is that both ability and investments are needed for success, i.e., that they complement one another. Though our findings show evidence of this type of interaction, the story that emerges from our analysis is somewhat more nuanced.  We show that ability and the environment (measured by parents’ socioeconomic status or SES) complement one another for generating higher degrees, such as college completion, but substitute for one another in generating lower levels of educational attainment such as a high school degree.  In other words, our findings suggest that ability or being born into a well-off family are enough to get an individual through high school.  For college, however, ability and a well-off family are important predictors of success.

"In other words, our findings suggest that ability or being born into a well-off family are enough to get an individual through high school. For college, however, ability and a well-off family are important predictors of success."

Another set of results concerns the wages of high-ability individuals.  We show that individuals who completed college earned substantial returns on their ability starting in the early 2000s.  Individuals without a college degree did not. The post-2000 rise in returns may be driven in part by “skill-biased technological change.”   As new technologies are adopted in the workplace, the people who benefit most are those with the skills required to adapt to and master new ways of working.  It is not difficult to imagine that people with genetic variants associated with higher education may have found it easier to adapt to computers and other new technologies.  However, we also find that a higher polygenic score was not helpful for individuals who did not complete college, likely because the lack of a college degree shut them out of careers that would have allowed them to creatively use new technologies.  This is a troubling finding given the role of childhood SES in predicting college completion.  It means that poor children with high abilities are less likely to attend college and, subsequently, are less likely to benefit from their ability.  Again, these findings suggest wasted human potential.

Using genetic data to compare individuals from different socioeconomic backgrounds, we also find that children from lower SES backgrounds systematically acquire less education when compared to similarly capable individuals from high SES backgrounds.  Among other things, this suggests that access to education may be an important obstacle, even for the highest ability children.  Our analysis offers some suggestive evidence regarding which environments are especially harmful. For example, acute negative events like physical abuse in childhood can lead to a dramatic loss of economic potential—reducing financial wealth in late adulthood for the highest ability individuals by over 50 percent.

Of course, one must be very cautious when interpreting any genetic association.  In particular, it is important to think carefully about correlation versus causality.  The same parents that pass along genetic material predicting educational attainment may also be more likely to have the resources to invest in their children.  Still, since we base our comparisons on individuals from different socioeconomic backgrounds, but with similar polygenic scores, we offer evidence that economic disparities are not solely due to nature.

In summary, recent advances in behavioral genetics have identified specific genetic variants that predict educational attainment.  The fact that such genes exist confirms previous work (largely using data on twins) showing that “nature” matters for economic outcomes.  Our research demonstrates that “nurture” matters, too.  Perhaps more importantly, our research demonstrates that the roles of “nature” and “nurture” are intertwined and that understanding the role of “nurture” (in the form of human capital investments over the life-cycle) is key to understanding how “nature” (in the form of ability endowments) operates.  In particular, we show that similarly apt individuals with different childhood SES see very different returns to their ability.  This means that policies helping children born into disadvantaged circumstances may be justified not solely for ethical reasons rooted in social justice, but perhaps also as an economically efficient way to mitigate wasted human potential.

Finally, we believe that continued progress in understanding the mechanisms underlying how “nature” affects economic outcomes will eventually lead to policies that help people who are born with different abilities.  For example, our findings suggest that some individuals had more difficulty than others in adapting to new workplace technologies, such as computers. With a fuller understanding of this process, policymakers may be able to devise better training programs or improved school curricula that help individuals of all levels of ability to better respond to a changing technological environment.  In other words we believe that our research shows that learning more about the specifics of “nature” may help us to better “nurture” all individuals in society to help them to reach their full potential.      

Editor’s note: The authors contributed equally to this posting and to the research upon which the posting is based. They are listed alphabetically by last name.

Authors

  • Nicholas Papageorge
  • Kevin Thom
Image Source: Kim Kyung Hoon / Reuters
      
 
 




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2014 Midterms: Transparency of Money in Politics Means Trust in Government, Trust in Citizens


Editor's Note: As part of the 2014 Midterm Elections Series, Brookings scholars and outside experts will weigh in on issues that are central to this year's campaigns, how the candidates are engaging those topics, and what will shape policy for the next two years.

Since the Citizens United decision, political spending by outside groups has been shaping voters’ opinions before Election Day and public policy afterwards.  Spending patterns that began after the 2010 decision will continue during the upcoming midterms: nonparty, outside spending will flow through two distinct pipelines—super PACs and politically active nonprofits. This time around there seems to be a partisan split to the spending, with Democrats leaning towards super PACs and Republicans relying more on dark money nonprofits. But whichever tool is used to funnel money into competitive races, imperfect or non-existent disclosure rules leave voters unable to determine whether access and influence is being sold to highest bidder.

Shining a brighter light on super PAC and nonprofit campaign spending would not cleanse the system of all of its corrupting influences, but it would help to restore citizens’ trust in government by eliminating the secrecy that makes voters believe their elected officials have something to hide. More disclosure would also result in the equally important outcome of demonstrating that government trusts us, its citizens, with information about how the influence industry works.   

When Thomas Jefferson wrote, “Whenever the people are well-informed, they can be trusted with their own government...whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights,” he certainly could not have conceived of secret money’s impact on elections and policy-making. But every year that goes by with Congress failing to address secret campaign spending challenges the founding father’s time-tested wisdom.

When the Supreme Court decided Citizens United, it was either willfully blind or sorely naïve about the state of political finance disclosure. Justice Kennedy swept aside concerns about the corrupting influence of unlimited political spending by claiming that, “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions. . . This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Unfortunately, no such prompt disclosure existed at the time, nor has Congress been able to pass any improvements to the transparency regime since then. In the case of super PACs, while information about donors must eventually be disclosed to the Federal Election Commission (FEC), disclosures can be delayed by up to three months.  This is not an inconsequential delay, especially when contributions come are in the multi-million dollar range.

There is even less disclosure by politically active nonprofits.  Their overall expenditures are only disclosed after the election in annual reports filed with the Internal Revenue Service (IRS). The donors to dark money groups may never be known, as the law does not require the names of donors to such groups to be disclosed. Yet more than 55 percent of advertising has been paid for by dark money groups, and 80 percent advertising benefitting Republican candidates has been paid for with undisclosed funds according to the New York Times

Congress and the executive branch have no shortage of methods to make money in politics more transparent, but have so far failed to demonstrate they respect voters enough to entrust us with that information.  The Real Time Transparency Act (S. 2207, H.R. 4442) would ensure that contributions of $1000 or more to candidates, parties and PACs, including super PACs, are disclosed within 48 hours. It would also require electronic filing of campaign finance reports.  The DISCLOSE Act, S. 2516, would disclose contributors to political nonprofits entrusting voters with information that currently is only known to the candidates who may benefit from dark money contributions. 

Affirmative congressional action would be the strongest signal that government trusts its citizens, but executive branch agencies can also take important steps to make political finance information more transparent. The IRS is in the process of reforming rules to better clarify when a nonprofit is a political organization and thus must disclose its donors.  The Securities and Exchange Commission can likewise modify its rules to require publicly traded companies to disclose their political activities.

Many large donors have gone to great lengths to take their political activities underground, claiming they fear attacks in the form of criticism or boycotts of their companies.  But just as participating in the political process through contributing to election efforts is an expression of free speech, so is criticizing such efforts.  Yet until campaign finance information is fully and quickly made public, the first amendment rights of voters and their ability to participate fully in our democracy are drastically shortchanged.

Authors

  • Lisa Rosenberg
     
 
 




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Election 2016: Dumbing down American politics, Lawrence Lessig, and the Presidency


Editor’s Note: This post was originally published by the Institute of Governmental Studies. Thomas Mann is also Resident Scholar at IGS.

Donald Trump and the Amen chorus of Republican presidential aspirants may have appeared to monopolize the capacity to make fantastical claims about what’s wrong with America and how to fix it. But a rival has appeared on the scene, outlining a very different fantasy plan to run for president on the Democratic side of the aisle.

Harvard law professor Lawrence Lessig looks meek—a dead ringer for Mr. Peepers—yet is anything but. Lessig built an impressive career in legal scholarship on the regulation of cyberspace, and the mild-mannered, soft-spoken academic became a cult hero among libertarians fearful of increasing legal restrictions on copyright, trademark and the electromagnetic spectrum. But Lessig’s transformation into a political activist was spurred by his personal revelation that money in politics is the root of all our governing problems. Eliminate the dependence of elected officials on private donors and the formidable obstacles to constructive policymaking will crumble. Simple but searing truth, or a caricature of a complex governing system shaped by institutions, ideas/ideologies, and interests?

Lessig became a whirlwind of energy and organization to promote his new values and beliefs, leading efforts to “Change Congress,” convene a second constitutional convention, raise awareness of corruption in politics through the “New Hampshire Rebellion,” and start the “Mayday PAC,” a super PAC designed to end all super PACs. He wrote the bestselling book Republic, Lost: How Money Corrupts Congress—and A Plan to Stop It, delivered a series of popular TED talks, and tirelessly traveled the country with his PowerPoint.

With none of these enterprises yet bearing fruit, Lessig has decided to raise the stakes. He has announced that if he receives $1 million from small donors by September, he will seek the Democratic presidential nomination, running as a “referendum candidate.” His single-issue platform, built around the concept of “Citizen Equality,” consists of “true” campaign finance reform supplemented by electoral reform (to weaken the influence of gerrymandering) and voting rights. His goal is to use the election to build a mandate for political reform that will cure our democratic ills. Lessig will apparently have nothing to say about anything other than political reform, insisting that his issue should be and can be the number one priority of voters in the 2016 elections. If nominated and elected, President Lessig will serve in office only long enough to enact the Citizen Equality Act and then resign, turning over the powers and responsibilities of the office to the vice president. Recently he generously informed the Vice President that he would happily enable a third Joe Biden term by selecting him as his running mate.

The hubris of the Harvard Professor is breathtaking. In virtually every respect, his strategy is absurd. Lessig’s political reform agenda is stymied by Republicans, not Democrats. Why not direct his energies where the opposition resides? All of the current Democratic presidential candidates support the thrust of these reforms. But saying that this is their highest priority is likely to harm, not boost, their candidacies. Why would even the most ardent supporter of the three pillars of Lessig’s reform agenda cast a ballot solely on this basis? Big and important issues divide the two parties today and the stakes of public action or inaction are huge. We don’t have the luxury of using the election to try to build a mandate for a set of political reforms that would have no chance of passing in the face of GOP opposition and would be of only incremental utility if they did.

Campaign finance does play a corrosive role in our democracy and I have invested much of my career grappling with it. There is no doubt that money in elections facilitates the transfer of economic inequality into political inequality, and the spectacle of several hundred plutocrats dominating the finance of our elections should be a target of serious reform efforts in the courts and the Congress. At the same time it is foolish to imagine that campaign finance is the only route for private wealth to influence public policy or that its reform will dramatically transform the policy process. Money did not prevent the major legislative enactments of 2009-2010—including the stimulus, student loans, the Affordable Care Act, and financial services reform. Nor is it likely to be the critical factor on climate change, immigration, infrastructure or jobs and wages; which party wins the White House and whether control with Congress is unified or divided is key. If anything, the Lessig campaign is likely to weaken the forces for political reform by demonstrating just how small the relative priority for this action is.

Trump offers the country his outsider status, success in building his personal wealth, an outsized personality, a brashness in asserting how easily he can solve the country’s problems, and a hearty appetite for and skill in stoking the anger and fears of a segment of the country. He feeds the notion that a strong, fearless, wily leader, inexperienced and mostly uninformed in politics and governing, can be the man on a white horse saving a great country losing its exceptional status. His claim that all politicians are bought by private interests—a claim Lessig eagerly embraces—fits well with his grandiose claims that he alone can fix what ails the country. A significant segment of Republican voters, presumably not well versed in the American constitutional system are attracted to him, at least enough for him to be a factor in this election campaign.

Lessig is a far less commanding presence but his ambition burns no less than that of Trump. The notoriety, celebrity, and adoring audiences are heady stuff, even if on a much smaller scale. Lessig told Bloomberg that Trump’s candidacy is evidence that his reform message is taking hold. Lessig said, Trump “strikes people as credible when he says all these people (politicians) are bought—I used to buy them …Trump is saying the truth.” Lessig will be a minor figure in this election and the causes for which he fights are unlikely to advance from it. Both Lessig and Trump, despite their differences in visibility and importance in the election, will have contributed to the dumbing down of American politics, a reality that will bring tears to the eyes of civics teachers and political science professors across the country.

Authors

Image Source: © Brendan McDermid / Reuters
      
 
 




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Militias (and militancy) in Nigeria’s north-east: Not going away

Introduction Since 2009, an insurgency calling itself The People Committed to the Propagation of the Prophet’s Teachings and Jihad (Jama’tu Ahlis Sunna Lidda’awati wal-Jihad in Arabic) has caused devastating insecurity, impoverishment, displacement, and other suffering in Nigeria’s poor and arid North- East Zone.1 The group is better known to the world as Boko Haram, and although…

       




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The problem with militias in Somalia: Almost everyone wants them despite their dangers

Introduction Militia groups have historically been a defining feature of Somalia’s conflict landscape, especially since the ongoing civil war began three decades ago. Communities create or join such groups as a primary response to conditions of insecurity, vulnerability and contestation. Somali powerbrokers, subfederal authorities, the national Government and external interveners have all turned to armed…

       




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Are Obama and Ryan Proposals for an EITC Expansion Pro- or Anti- Mobility?


There’s at least one policy that both parties agree has been successful in combatting poverty: the Earned Income Tax Credit (EITC). And rightly so – in 2012, the EITC pulled 6.5 million people out of poverty, including around 3.3 million children. Politicians on both sides of the fence have put forward plans for expanding the EITC to unmarried childless adults, including President Obama and Rep. Paul Ryan who propose very similar expansions. As Dylan Matthews of Vox.com puts it: “Ryan's proposal is almost identical to President Obama's, included in his current budget; the only difference is that Obama would also increase the maximum age one can claim the EITC from 65 to 67.” There is however a large difference in the plans: how, and by whom, this expansion will be paid for.

Similarities in the Obama and Ryan EITC expansions

Created in 1975, the Earned Income Tax Credit is a refundable tax credit available to low income working Americans intended to both improve the lives of poor children and promote work. In keeping with these goals, families with more children are eligible for higher benefits and the credit increases as an individual’s earnings increase before plateauing and then tapering off.

Recently, there has been a growing consensus that we should expand the level of benefits available to childless workers – including a proposal from our own Isabel Sawhill. Obama and Ryan have presented proposals to expand EITC to childless workers with the express goal of targeting groups with low or declining workforce participation such as low-income, low-education men and women without children. Both proposals double the maximum credit for childless adults to around $1000 and increases the income level at which the benefit begins to around $18,000.

Budget or Spending Neutral: Paying for the EITC

Obama and Ryan take different approaches to funding the proposal. True to their party lines, Obama’s proposal is fiscally, but not spending neutral, whereas Ryan eschews higher tax rates in favor of cutting spending. Table 1 describes each plan’s funding proposal:

Funding President Obama’s EITC Expansion

The first portion of Obama’s funding mechanism is taxing carried interest as ordinary income. What is carried interest? In short, managers of certain types of investment groups, such as private equity firms or hedge funds, are entitled a share of the profits of the investment fund in excess of the amount of capital they invest in the firm. That share, which makes up about one-third of the income that private equity general partners receive, is taxed at the lower rate assigned to capital gains.

Supporters of the current policy argue that carried interest should be treated similarly to capital gains from a non-managing partner’s financial investment in the firm. In contrast, supporters of reform say that carried interest represents compensation for services (i.e., managing the fund), not a return on investment and should thus be treated like a salary for tax purposes. For a more thorough explanation of the arguments for and against this proposal, see the Tax Policy Center’s explanation of carried interest.

This change in the tax system would mainly impact the so-called One-Percenters – the average salary for a hedge fund manager is around $2.2 million a year. Taxing carried interest like wage and salary income would raise about $15 billion in revenue over five years, according to the Joint Committee on Taxation.

The second part of Obama’s plan to fund the expansion of the EITC is to close a loophole in current tax law that allows individuals who own their own professional services business to avoid paying payroll taxes by classifying some of their income earnings as profits from pass‐through entities. This proposal is similar to one proposed by Senate Democrats which would require Americans with incomes over $250,000 a year who work in professional services firms, such as law, consulting, or lobbying, that derive over 75% of their profits from the service of 3 or fewer individuals to pay payroll taxes on all income from their partnership in that firm.

Funding Rep. Ryan’s EITC Expansion

The first portion of Ryan’s funding mechanism suggests cutting funding for the following programs, which he describes as “ineffective”:

Table 1. Proposed budget cuts under Ryan’s Poverty Proposal

Program

Purpose

Social Security Block Grant

Flexible funding source that allows states to allocate funds to vulnerable populations, primarily low- and moderate-income children and people who are elderly or disabled. Initiatives funded through SSBGs include daycare, health related services, substance abuse services, housing, and employment services.

Fresh Fruits and Vegetables Program

Initiative that provides free fresh fruits and vegetables to students in participating elementary schools during the school day with the goal of improving children’s diet and health by changing attitudes about healthy eating.

Economic Development Administration

Government agency that provides grants and technical assistance to economically distressed communities with the goal of attracting private investment in these communities and job creation. Example initiatives include the Public Works Program and the Trade Adjustment Assistance for Firms.

Farmers’ Market Nutrition Program

Part of the Special Supplemental Nutrition Program for Women, Infants and Children, commonly known as WIC. WIC provides supplemental foods, health care referrals and nutrition education at pregnant and post-partum women, infants, and children up to 5 years of age who are found to be at nutritional risk. FMNP specifically provides WIC participants with coupons to buy fresh fruits and vegetables at farmer’s markets

Though Ryan describes these programs as ineffective, many of them provide valuable resources to the communities they serve.  Take for example, the Social Services Block Grant: it supports state services that reach 23 million people, about half of whom are children. Republicans have argued that “many of the services funded by the SSBG are duplicative of other federal programs,” citing a Government Accountability Office report . But in fact, the GAO report makes no mention of SSBG other than to note that one area in which there are not enough federally funded programs to meet need is child care, an area in which SSBG is a key source of state funding. Eliminating SSBG would only increase this gap in funding.

The other programs Ryan proposes cutting, though smaller than SSBG in scope, have important impacts as well. An evaluation of FFVP by outside consultants finds that this program significantly increased children’s intake of fruits and vegetables (both in school and at home) and increased children’s positive attitudes towards fruits and vegetables and willingness to try new fruits and vegetables.

Ryan also proposes reducing fraud in the Additional Child Tax Credit by requiring the use of Social Security Numbers. Currently, individuals can use either a SSN or the individual tax identification number (ITIN) which is given to individuals who pay United States taxes but are not eligible to obtain a SSN, such as undocumented immigrants. Claims for the ACTC by ITIN filers amounted to about $4.2 billion in pay outs in fiscal year 2010 and enacting this proposal is estimated to reduce federal outlays by about 1 billion dollars each fiscal year.

House Republicans have repeatedly argued that having the IRS pay out tax credits to undocumented workers is fraud. They claim that children with undocumented parents should not receive benefits and that such credits encourage illegal immigration. But this is a misleading characterization and puts the burden of parents’ immigration choices on the shoulders of low-income children. Eligibility for the child credit is tied to the child, not the parent and requires documentation of the child’s citizenship or residency. 82 percent of the children whose parent files with an individual taxpayer identification number are citizens. Undocumented workers are not committing fraud by claiming this credit for U.S.-born or legally resident children of immigrant parents and requiring SSNs would likely result in benefits being taken away from low-income children.

Ryan’s final source of funding is a reduction in “corporate welfare” such as subsidies to corporations for politically favored energy technologies and the Department of Agriculture’s Market Access Program which subsidizes international advertising costs for agricultural companies.

Winners and Losers under Obama's and Ryan’s EITC proposals

First, who benefits from expanding the EITC to childless workers? The Tax Policy Center’s analysis of the EITC proposal finds that those in the bottom quintile are most likely to benefit:

Source: Tax Policy Center, 2014

As the above graph shows, this tax credit is pretty successfully targeted at those who need the most help:  about one-quarter of those in the bottom income quintile would have lower taxes under the proposed expansion, but very few tax payers in higher income quintiles see any impact.

Next, who is paying for this expansion? In the graph below, we show the groups most likely to be affected by the proposed funding mechanisms, broken down by income quintile. In some cases, the group described is not necessarily a perfect match for those affected: for example, not everyone who reports capital gains is a hedge fund manager reporting carried interest as capital gains. But these populations can still give us a sense of the distributional effects of, in order, taxing carried interest as ordinary income;  closing tax loopholes for owners of S Corporations; cutting the Social Services Block Grant; cutting the Fresh Fruits and Vegetables Program; cutting the Farmers’ Market Nutrition Program; and requiring SSNs for the Additional Child Tax Credit.

The populations negatively affected by President Obama’s proposal are mostly concentrated among the top two income quintiles. For example, 75 percent of those reporting S Corporation profits are in the top two quintiles. In contrast, the populations negatively affected by Representative Ryan’s proposal are mostly concentrated in the bottom two quintiles.


Source: For data on means-tested benefits: Rector and Kim, 2008; For data on S Corporations: Tax Policy Center, 2011; For data on capital gains: Tax Policy Center, 2014


Ryan’s EITC is pro-mobility… but funding it may not be

Paul Ryan seems to be thinking seriously about the issues of poverty and social mobility. He is a reformer as well as an authentic conservative.

While his willingness to embrace EITC expansion is welcome, his proposed funding methods raise serious questions. Paying for anti-poverty programs by cutting anti-poverty programs runs the risk of being self-defeating. No doubt some of them are not working as intended. But reform is the answer, rather than abolition. Many of these programs help those in the deepest poverty - who in many cases are those least likely to benefit from welfare-to-work policies such as the EITC, according to recent research from the Center for Budget and Policy Priorities and from the National Poverty Center

Ryan's package is worthy of serious attention, not least from the perspective of social mobility. It is important, however, not to consider the impact of the EITC expansion alone, but also how - and by whom- it will be paid for. 

Authors

     
 
 




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The Earned Income Tax Credit and Community Economic Stability


This originally appeared in “Insight,” a publication of Grantmakers for Children, Youth, and Families.

For many in the United States, American poverty conjures images of urban blight or remote Appalachian hardship that motivated the War on Poverty in the 1960s. But the geography of poverty in the U.S. has shifted well beyond its historical confines (Kneebone and Berube, 2013). During the first decade of the 2000s, the poor population living in suburbs of the nation’s largest metropolitan areas for the first time outstripped the poor population living in central cities, and poverty continues to grow faster today in the suburbs.1 This trend has been even more pronounced for those living below twice the federal poverty line—equivalent to $48,500 for a family of four in 2015—which roughly mirrors the population eligible to receive the federal Earned Income Tax Credit (EITC).

Although it was not originally billed as an antipoverty program, in its 40 years, the EITC has become one of the nation’s most effective tools for lifting low-income workers and their families above the poverty line. In 2013 alone, Brookings estimates that the EITC lifted 6.2 million people, including 3.1 million children, out of poverty (Kneebone and Holmes, 2014). What follows is a discussion of the EITC’s growing importance to recipients in light of the new geography of poverty, its role in boosting local economies, and how expanding participation in the program and paying the credit differently could enhance its effectiveness as a local economic stabilizer.

The shifting geography of poverty challenges traditional approaches to combat poverty through investments in place.

When President Johnson declared a War on Poverty in 1964, poverty in the U.S. was primarily urban or rural. This was also the case in 1975 when the EITC was created: Nearly a million more low-income individuals at that time lived in rural areas or big cities than in the suburbs of major metropolitan areas.2 Place-based antipoverty interventions dating to the War on Poverty were thus designed with these two geographies—especially cities—in mind. Brookings estimates that today, the federal government spends about $82 billion per year across more than 80 place-focused antipoverty programs, spread across 10 agencies (Kneebone and Berube, 2013). Many are not well-suited to suburban contexts, for several reasons.

First, suburban poverty is more geographically diffuse than urban poverty. Suburban communities tend to be less densely populated than cities and larger in size, and cover more total area. Whereas centralized services might be appropriate in an urban context because they are easily accessible to many in need, it is more difficult to achieve those economies of scale in the suburbs, where residents live farther apart and have limited access to transit. Many competitive federal grant programs allocate points based on population served and population density, implicitly favoring large central cities.

Second, suburban municipalities may lack the experience and administrative capacity needed to sustain services for low-income families and communities. Cities have dealt with poverty longer, and have had more time to develop strategies and structures to support their poor populations. Some of this capacity stemmed explicitly from Community Action Agencies, one of the original War on Poverty programs, which was intended to spur local innovation. Small suburban communities by and large did not have this same experience. Because of their relatively small size, suburban governments may not be able to achieve the administrative scale needed to deliver effective safety-net programs.

Third, many suburban communities lack the economic scale and fiscal structure needed to fund services for low-income residents. Because many small municipalities are limited in how they are permitted to raise revenues—typically through a combination of property and sales taxes—they are especially prone to financial instability caused by the very economic conditions that also generate greater need for services. As poverty suburbanizes, small suburban communities simultaneously face rising demand and falling tax revenues to support those services. Moreover, tax “competition” among many small suburbs within a metro area can further erode the fiscal capacity and political will for these jurisdictions to support people in need.

The new geography of poverty makes direct investments in low-income individuals and families—like the EITC—even more important.

The mismatch between existing place-based antipoverty strategies and the places where poverty is growing fastest heightens the importance of investing directly and effectively in low-income individuals and families through programs such as the EITC. Following its expansion in the mid-1990s, the EITC became the most significant cash transfer program available to low-income working families. The Internal Revenue Service (IRS, 2014) estimates that approximately 79 percent of EITC-eligible taxpayers nationally claim the credit each year—a remarkably strong participation rate among federal safety-net programs.

The high program participation rate and growth over time in EITC expenditures reflects both increases in the credit’s generosity and growing need. In 2000, according to our analysis of IRS Stakeholder Partnerships, Education and Communities (IRS-SPEC) data, total EITC expenditures topped $42 billion (in 2013 dollars). In 2013, they approached $65 billion, equivalent to approximately 80 percent of the amount spent by the federal government on place-based poverty interventions.3

Analysis of IRS-SPEC data further suggests that the EITC’s geographic incidence closely tracks the shifting geography of need. From 2000 to 2013, the number of suburban filers claiming the EITC rose by 62 percent, compared to 33 percent in cities. Changes in the distribution of EITC claims mirrored changes in the location of poor and near-poor populations, particularly growth in the suburbs.4 And because lower-income suburban communities (where at least 40 percent of residents are poor or near-poor) are becoming more diverse, too—60 percent of their residents are non-white or Hispanic—the EITC also effectively reduces growing race-based income gaps in suburbs.5

EITC dollars support local economies.

The EITC benefits not only low-income families, but also the wider communities in which they live. Although it is widely regarded today as one of the country’s most successful antipoverty programs, the EITC was originally designed to be a temporary economic stimulus measure, in the Tax Reduction Act of 1975 (Nichols and Rothstein, 2015). During the 2000s, more local and state governments made a concerted push to expand participation in the EITC among eligible filers, in part to inject more federal dollars into their local economies (Berube, 2006a).

There are several mechanisms through which the EITC could benefit local economies. California State University researchers categorize the local economic impact of EITC refunds as the sum of direct effects (EITC recipients spending their refunds), indirect effects (business spending in response to EITC recipient spending), and induced effects (changes in household income and spending patterns caused by direct and indirect effects). Together, these effects represent the local “multiplier” effect (Avalos and Alley, 2010). Their estimates for California counties suggest that, in many cases, the credit creates local economic impacts equivalent to at least twice the amount of EITC dollars received.

Direct economic effects result from EITC recipients spending a portion of their refund locally, supporting local businesses and jobs. Consumer surveys show that low-income families spend a relatively large share of their income on groceries and other necessities, which tend to be purchased locally. Analysis of those surveys links tax refund season to increased likelihood of consumer activity as well as larger purchases (Adams, Einav, and Levin, 2009). People spend more, and more frequently, during tax refund season.

The EITC also supports local communities in less obvious ways. The concept of “tax incidence” reflects that the party being taxed, or receiving a tax credit, may not bear its full costs (or reap its benefits) because others shift their behavior in response to the tax. Along these lines, Jesse Rothstein estimates that as much as 36 cents of every dollar of EITC received flows to employers, because by enabling workers to better make ends meet on low wages, the credit effectively lowers the cost of labor. Those lower labor costs may, in turn, allow local employers to hire more local workers (Nichols and Rothstein, 2015).

Finally, emerging evidence suggests that progressive tax expenditures like the EITC can enhance intergenerational income mobility for local children, possibly by counteracting credit constraints that many low-income families face (Chetty, Hendren, Kline, and Saez, 2015). In areas with larger state EITCs, low-income children are more likely to move up the income ladder over time.

The local impact of the EITC depends on how, and how many, eligible filers claim the credit.

The local impact of the EITC also depends on whether eligible workers and families file tax returns and claim the credit. As noted above, the IRS estimates that 79 percent of those eligible to receive the EITC nationally claim it. Given local variation in characteristics associated with uptake, there is likely also considerable local variation in EITC participation (Berube, 2005). Efforts to increase participation locally can thus increase the level of investment communities receive from the program.

Research has identified several factors associated with EITC participation rates among the eligible population. Eligible filers less likely to claim the credit include those who live in rural areas, are self-employed, do not have qualifying children, do not speak English well, are grandparents, or recently changed their filing status (IRS, 2015). One study suggests that communities with moderately sized immigrant populations may exhibit lower EITC participation rates, due perhaps to less robust social networks or more dispersed/heterogeneous populations that may limit awareness of the credit (Berube, 2006b).

Recent research also suggests that EITC participation is higher in areas with more tax preparers, who may promote greater local awareness of the credit (Chetty, Friedman, and Saez, 2012). While individuals who enlist the help of tax preparers are more likely to receive the EITC, they may face significant fees that blunt the credit’s overall impact (Berube, 2006a). Expanding access to volunteer tax preparation services or simple, free online filing could help preserve more of the credit’s value for low-income families and their communities.

To maximize the EITC’s role as a local economic stabilizer, we should consider periodic payment options.

 The EITC already functions as an important antipoverty tool for low-income workers and families, and a boon to local economic stability. Communities should nonetheless be interested in efforts to connect taxpayers to a portion of their EITC throughout the year, rather than only as a lump-sum refund at tax time.

Debt features significantly on the balance sheets of EITC recipients. Recent research finds that about 95 percent of EITC recipients have debt of some kind, and that large shares of refunds are dedicated to debt payments or deferred expenses (such as car repair). Recipients do not use the majority of EITC refunds to pay for monthly expenses, despite the fact that their wages typically cover only two-thirds of those expenses (Halpern-Meekin, Edin, Tach, and Sykes, 2015).

Paying a portion of filers’ anticipated EITC periodically (and directly, rather than through employers like the defunct Advance EITC program) in smaller amounts over the course of a year could help them cope with these spending constraints and avoid taking on debt (Holt, 2008). By enabling families to better keep up with spending on regular items most often purchased locally—rent, food, vehicle maintenance—periodic payments could also support local economies. And by improving families’ liquidity, such payments could reduce reliance on high-cost financial products such as payday loans.

The EITC continues to gain importance as place-based strategies lag behind poverty’s suburbanization, and communities seek ways to maximize public investment in the face of budget constraints at all levels. The program lifts millions of working individuals and families out of poverty each year regardless of their location, and in doing so also supports community financial stability. An expanded EITC—at the federal, state, or local level—with options for periodic payment and better alternatives to high-cost tax preparation could provide even stronger support to low-income families and the places where they live.

References

Adams, W., Einav, L., and Levin, J. (2009). Liquidity constraints and imperfect information in subprime lending. American Economic Review. 99(1), 49–84. Retrieved from http://web.stanford.edu/~jdlevin/Papers/Liquidity.pdf

Avalos, A., and Alley, S. (2010). The economic impact of the Earned Income Tax Credit (EITC) in California. California Journal of Politics and Policy. 2(1). Retrieved from http://escholarship.org/uc/item/2jj0s1dn

Berube, A. (2005). Earned income credit participation—What we (don’t) know. Washington, DC: Brookings Institution. Retrieved from http://www.brookings.edu/metro/eitcparticipation.pdf

Berube, A. (2006a). Using the Earned Income Tax Credit to stimulate local economies. Washington, DC: Brookings Institution. Retrieved from http://www.brookings.edu/~/media/research/files/reports/2006/11/childrenfamilies-berube/berube20061101eitc.pdf

Berube, A. (2006b). ¿Tienes EITC? A study of the Earned Income Tax Credit in immigrant communities, Washington, DC: Brookings Institution. Retrieved from  http://www.brookings.edu/~/media/research/files/reports/2005/4/childrenfamilies-berube02/20050412_tieneseitc.pdf

Chetty, R., Friedman, J., and Saez, E. (2012). Using differences in knowledge across neighborhoods to uncover the impacts of the EITC on earnings (NBER Working Paper Series no. 18232). Retrieved from http://eml.berkeley.edu/~saez/chetty-friedman-saezNBER13EITC.pdf

Chetty, R., Hendren, N., Kline, P., and Saez, E. (2015). The economic impacts of tax expenditures: Evidence from spatial variation across the U.S. Retrieved from http://www.irs.gov/pub/irs-soi/14rptaxexpenditures.pdf

Halpern-Meekin, S., Edin, K., Tach, L., and Sykes, J. (2015). It’s not like I’m poor: How working families make ends meet in a post-welfare world, Oakland, CA: University of California Press.

Holt, S. D. (2008). Periodic payment of the Earned Income Tax Credit. Washington, DC: Brookings Institution. Retrieved from http://www.brookings.edu/research/papers/2008/06/0505-metroraise-supplement-holt

Internal Revenue Service. (2014). Statistics for tax returns with EITC. Retrieved from http://www.eitc.irs.gov/EITC-Central/eitcstats

Internal Revenue Service. (2015). About EITC. Retrieved from http://www.eitc.irs.gov/EITC-Central/abouteitc

Kneebone, E., and Berube, A. (2013). Confronting suburban poverty in America. Washington, DC: Brookings Institution Press.

Kneebone, E., and Holmes, N. Fighting poverty at tax time through the EITC. Retrieved from http://www.brookings.edu/blogs/the-avenue/posts/2014/12/16-poverty-tax-eitc-kneebone-holmes

Nichols, A., and Rothstein, J. (2015). The Earned Income Tax Credit (EITC) (NBER Working Paper Series no. 21211). Retrieved from http://www.nber.org/papers/w21211.pdf


1. For the 100 largest Metropolitan Statistical Areas by 2010 population, we define “cities” as the first-named city in the metropolitan area title as well as any other title city with population over 100,000. “Suburbs” are defined as the metropolitan area remainder.

2. Brookings analysis of decennial census data.

3. The IRS-SPEC data from which these estimates are derived are available through Brookings’ Earned Income Tax Credit Data Interactive: http://www.brookings.edu/research/interactives/eitc

4. We define the “near-poor” population as those with incomes below 200 percent of the federal poverty line, which is roughly equivalent to EITC eligibility.

5. Brookings analysis of American Community Survey data.

Authors

      
 
 




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New EITC payment options could boost family economic stability


As the holiday season rolls around each year, it often carries a hefty price tag that can strain family budgets. In a survey of low-income taxpayers using volunteer tax preparation services, three-quarters of respondents listed December as a time of year when it’s hardest to make ends meet. But it’s not the only one. Low-income families go through a constant year-round balancing act of juggling bills, going without, asking family and friends for help, and taking on debt when they fall behind.

Many of these families benefit from the Earned Income Tax Credit, which supplements earnings for low-income workers. The EITC has proven to be one of the nation’s most effective anti-poverty programs, and for some families can represent up to 40 percent of their annual income. For the one in five American households that receive the EITC in their refunds, tax time gives them a chance to catch up financially as they start the New Year. But by summer, many recipients once again find themselves struggling paycheck to paycheck to shore up budget gaps, or scrambling to deal with unforeseen financial shocks, like a car breaking down or an unplanned medical expense.

Providing alternative payment options that deliver the credit outside of tax time would go a long way toward boosting economic stability year round for these families. In his new paper “Periodic payment of the Earned Income Tax Credit revisited,” Steve Holt explores the range of proposals that have emerged in recent years to provide more options for delivering the EITC during the year, and shares some lessons learned from early experiments to test those options.

Most notably, the Center for Economic Progress in Chicago recently completed a year-long pilot which offered 343 households the option of receiving half of their expected EITC in four payments in advance of tax time. The results of the pilot were overwhelmingly positive. Compared to EITC recipients in the control group, participants who received periodic payments missed fewer bills and racked up fewer late fees. They were less likely to resort to payday lenders or have to borrow money from family and friends. And they reported less food insecurity and decreased financial stress throughout the year. What’s more, after completing the pilot, 90 percent of the participants reported a preference for periodic payment over the standard lump sum.

More experimentation needs to be done to determine effective ways to replicate and expand on the advanced-payment pilot in Chicago. And future experimentation should also include pilots that test proposals for deferred savings mechanisms. These options, like CFED’s Rainy Day EITC proposal, would allow EITC filers to put a portion of their credit in a savings account and receive a bonus match as an incentive to save. Though structured differently than advanced payment options, the end goal of deferred savings proposals is the same: providing greater financial stability to low-income families outside of tax time.

A growing share of our economy’s jobs are in the low-wage industries and occupations in which many EITC-eligible taxpayers work (as illustrated by new national, state, and metro data from Brookings MetroTax model on characteristics of the EITC-eligible population). The EITC is an incredibly effective policy tool that helps bridge the gap between what the labor market provides and what it takes to support a family. But we can make the EITC work better for working families by offering alternative payment options that can help promote economic security year round.

Authors

Image Source: © Mike Segar / Reuters
      
 
 




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The Drag on India’s Military Growth

Policy Brief #176

Recommendations
India's remarkable economic growth and newfound access to arms from abroad have raised the prospect of a major rearmament of the country. But without several policy and organizational changes, India's efforts to modernize its armed forces will not alter the country's ability to deal with critical security threats. Our research suggests that India's military modernization needs a transparent, legitimate and efficient procurement process. Further, a chief of defense staff could reconcile the competing priorities across the three military services. Finally, India's defense research agencies need to be subjected to greater oversight.

Introduction

India’s rapid economic growth and newfound access to military technology, especially by way of its rapprochement with the United States, have raised hopes of a military revival in the country. Against this optimism about the rise of Indian military power stands the reality that India has not been able to alter its military-strategic position despite being one of the world’s largest importers of advanced conventional weapons for three decades.

We believe that civil-military relations in India have focused too heavily on one side of the problem – how to ensure civilian control over the armed forces, while neglecting the other – how to build and field an effective military force. This imbalance in civil-military relations has caused military modernization and reforms to suffer from a lack of political guidance, disunity of purpose and effort and material and intellectual corruption.


The Effects of Strategic Restraint

Sixty years after embarking on a rivalry with Pakistan, India has not been able to alter its strategic relationship with a country less than one-fifth its size. India’s many counterinsurgencies have lasted twenty years on an average, double the worldwide average. Since the 1998 nuclear tests, reports of a growing missile gap with Pakistan have called into question the quality of India’s nuclear deterrent. The high point of Indian military history – the liberation of Bangladesh in 1971– therefore, stands in sharp contrast to the persistent inability of the country to raise effective military forces.

No factor more accounts for the haphazard nature of Indian military modernization than the lack of political leadership on defense, stemming from the doctrine of strategic restraint. Key political leaders rejected the use of force as an instrument of politics in favor of a policy of strategic restraint that minimized the importance of the military.

The Government of India held to its strong anti-militarism despite the reality of conflict and war that followed independence. Much has been made of the downgrading of the service chiefs in the protocol rank, but of greater consequence was the elevation of military science and research as essential to the long-term defense of India over the armed forces themselves. Nehru invited British physicist P.M.S. Blackett to examine the relationship between science and defense. Blackett came back with a report that called for capping Indian defense spending at 2 percent of GDP and limited military modernization. He also recommended state funding and ownership of military research laboratories and established his protégé, Daulat Singh Kothari, as the head of the labs.

Indian defense spending decreased during the 1950s. Of the three services, the Indian Navy received greater attention with negotiations for the acquisition of India’s first aircraft carrier. The Indian Air Force acquired World War II surplus Canberra transport. The Indian Army, the biggest service by a wide margin, went to Congo on a UN peacekeeping mission, but was neglected overall. India had its first defense procurement scandal when buying old jeeps and experienced its first civil-military crisis when an army chief threatened to resign protesting political interference in military matters. The decade culminated in the government’s ‘forward policy’ against China, which Nehru foisted on an unprepared army, and led to the war of 1962 with China that ended in a humiliating Indian defeat.

The foremost lesson of 1962 was that India could not afford further military retrenchment. The Indian government launched a significant military expansion program that doubled the size of the army and raised a fighting air force. With the focus shifting North, the Indian Navy received less attention. A less recognized lesson of the war was that political interference in military matters ought to be limited. The military – and especially the army – asked for and received operational and institutional autonomy, a fact most visible in the wars of 1965 and 1971.

The problem, however, was that the political leadership did not suddenly become more comfortable with the military as an institution; they remained wary of the possibility of a coup d’etat and militarism more generally.

The Indian civil-military relations landscape has changed marginally since. In the eighties, there was a degree of political-military confluence in the Rajiv Gandhi government: Rajiv appointed a military buff, Arun Singh, as the minister of state for defense. At the same time, Krishnaswami Sundarji, an exceptional officer, became the army chief. Together they launched an ambitious program of military modernization in response to Pakistani rearmament and nuclearization. Pakistan’s nuclearization allowed that country to escalate the subconventional conflict in Kashmir while stemming Indian ability to escalate to a general war, where it had superiority. India is yet to emerge from this stability-instability paradox.

We do not know why Rajiv Gandhi agreed to the specific kind of military modernization that occurred in the mid-eighties, but then stepped back from using this capacity in 1987 during the Brasstacks crisis. Sundarji later wrote in a veiled work of fiction and told his many friends that Brasstacks was the last chance India had to dominate a non-nuclear Pakistan.

The puzzle of Brasstacks stands in a line of similar decisions. In 1971, India did not push the advantage of its victory in the eastern theatre to the West. Instead, New Delhi, under uberrealist Prime Minister Indira Gandhi, signed on to an equivocal agreement at Simla that committed both sides to peaceful resolution of future disputes without any enforcement measures. India’s decision to wait 24 years between its first nuclear test in 1974 and the second set of tests in 1998 is equally puzzling. Why did it not follow through after the 1974 test, and why did it test in 1998?

Underlying these puzzles is a remarkable preference for strategic restraint. Indian leaders simply have not seen the use of force as a useful instrument of politics. This foundation of ambivalence informs Indian defense policy, and consequently its military modernization and reform efforts.

To be sure, military restraint in a region as volatile as South Asia is wise and has helped persuade the great powers to accommodate India’s rise, but it does not help military planning. Together with the separation of the armed forces from the government, divisions among the services and between the services and other related agencies, and the inability of the military to seek formal support for policies it deems important, India’s strategic restraint has served to deny political guidance to the efforts of the armed forces to modernize. As wise as strategic restraint may be, Pakistan, India’s primary rival, hardly believes it to be true. Islamabad prepares as if India were an aggressive power and this has a real impact on India’s security.

Imbalance in Civil-Military Relations

What suffices for a military modernization plan is a wish list of weapon systems amounting to as much as $100 billion from the three services and hollow announcements of coming breakthroughs from the Defense Research and Development Organization (DRDO), the premier agency for military research in India.

The process is illustrative. The armed forces propose to acquire certain weapon systems. The political leadership and the civilian bureaucracy, especially the Ministry of Finance, react to these requests, agreeing on some and rejecting others. A number of dysfunctions ensue.

First, the services see things differently and their plans are essentially uncoordinated. Coming off the experience of the Kargil war and Operation Parakram, the Indian Army seems to have arrived at a Cold Start doctrine, seeking to find some fighting space between subconventional conflict and nuclear exchange in the standoff with Pakistan. The doctrine may not be official policy, but it informs the army’s wish list, where attack helicopters, tanks and long-range artillery stand out as marquee items. The Indian Air Force (IAF), meanwhile, is the primary instrument of the country’s nuclear deterrent. The IAF’s close second role is air superiority and air defense. Close air support, to which the IAF has belatedly agreed and which is essential to the army’s Cold Start doctrine, is a distant fourth.

The Indian Navy wants to secure the country’s sea-lanes of communications, protect its energy supplies and guard its trade routes. It wants further to be the vehicle of Indian naval diplomacy and sees a role in the anti-piracy efforts in the Malacca Straits and the Horn of Africa. What is less clear is how the Indian Navy might contribute in the event of a war with Pakistan. The navy would like simply to brush past the problem of Pakistan and reach for the grander projects. Accordingly, the Indian Navy’s biggest procurement order is a retrofitted aircraft carrier from Russia.

India’s three services have dramatically different views of what their role in India’s security should be, and there is no political effort to ensure this coordination. Cold Start remains an iffy proposition. India’s nuclear deterrent remains tethered to a single delivery system: fighter aircraft. Meanwhile, the Indian Army’s energies are dissipated with counterinsurgency duties, which might increase manifold if the army is told to fight the rising leftist insurgency, the Naxalites. And all this at a time when the primary security threat to the country has been terrorism. After the Mumbai attacks, the Indian government and the people of India are said to have resolved to tackle the problem headlong, but today the government’s minister in charge of internal security, Palaniappan Chidambaram, is more under siege himself than seizing the hidden enemy.

Second, despite repeated calls for and commissions into reforms in the higher defense structure, planning, intelligence, defense production and procurement, the Indian national security establishment remains fragmented and uncoordinated. The government and armed forces have succeeded in reforms primed by additions to the defense budget but failed to institute reforms that require changes in organization and priorities.

The Kargil Review Committee, and the Group of Ministers report that followed, for example, recommended a slew of reforms. The changes most readily implemented were those that created new commands, agencies and task forces, essentially linear expansion backed by new budgetary allocations. The changes least likely to occur were those required changes in the hierarchy.

The most common example of tough reform is the long-standing recommendation for a chief of defense staff. A military chief, as opposed to the service chiefs, could be a solution to the problem that causes the three services not to reconcile their priorities. However, political leaders have rejected the creation of the position of military commander-in-chief, mainly for fear of giving a military officer too much power. Instead of a chief of defense staff, the government has tried to install an integrated defense staff that is supposed to undertake reconciliation between the services, but which really is a toothless body with little influence.

Lastly, the Ministry of Defense has a finance section deputed by the Ministry of Finance. This section oversees all defense expenditures, even after they have been authorized. Once the cabinet has approved a spending item, what authority does the section have to turn down requests? However, the finance section raises questions of propriety, wisdom and policy that should under normal circumstances be under the purview of the defense minister.

No Legitimate Procurement Process

Corruption in weapons procurement has been a political issue since the mid-1980s, when allegations of a series of paybacks in the purchase of Bofors artillery, HDW submarines and other items mobilized an opposition that removed Rajiv Gandhi from power in 1989. Since then, Indian political leaders have tried hard not to appear to be corrupt, going out of their way to slow down new purchases.

However, corruption is still a problem, as shown in the 2001 Tehelka expose of political leaders accepting bribes in return for defense contracts. Recently, Uday Bhaskar, the Indian Navy officer and defense analyst, wrote bitingly that for a number of years now the armed forces, which desperately need modernization, have been returning unspent funds to the treasury.

There is widespread recognition that corruption is morally venal and detrimental to the cause of Indian security. We believe, however, that the second- and third-order problems of corruption have unacknowledged impact on military modernization and capacity. The Defense Procurement Manual and Procedures on the Ministry of Defense’s website are the first steps in the right direction, but the Indian government has generally failed to build a transparent and legitimate procurement process.

The deep roots of corruption extend to military research and development and to the heart of India’s foreign relations. Since the mid-1970s, however, the DRDO embarked on a number of ambitious and well-funded projects to build a fighter aircraft, a tank, and missiles. All three projects floundered.

While the aircraft and tank projects have largely failed, the missile program is considered successful. The reputation of the success carried the director of the missile program, A.P.J. Abdul Kalam, to the presidency. Yet in 2010, no Indian missile in the arsenal of the armed forces has managed to alter the strategic equation with Pakistan or China. The Prithvi short-range missile is not useful because of its range and liquid fuel needs. The longer-range Agni models have gone through numerous tests without entering the army’s arsenal. Other variations, such as Nag and Akash, have limited strategic purpose.

The virtual monopoly over military research in state-owned labs has meant that the abundant energies of the Indian private sector have remained outside the defense industry. Where in the United States, small and medium-sized defense contractors form the backbone of the research complex, India is far from thinking along those lines. Despite recent efforts to include the private sector through various schemes, there continues to be distrust of private industry in the Indian defense establishment. We believe it is easier for a private foreign supplier to win a contract with the Ministry of Defense than it is for a small private Indian company to do so.

For decades, the Indian government has accepted dishonest promises made by DRDO as the basis for providing billions of dollars of support because of the persisting ideology of autarky. The greatest success of military research in India comes not from the DRDO, but from the Atomic Energy Commission, which built the nuclear devices. But the government has been unwilling to subject DRDO to public accountability. Instead, the head of DRDO serves as the defense minister’s scientific adviser. The two positions – of supplier and adviser – bring inherent conflict of interest, but this has not been an issue in India at all.

The second pattern of systemic corruption comes from the inability of the Indian defense system to wean itself from the supply of Soviet/Russian equipment. The reasons why India initially went to the Soviet Union for weapons are well-known. The United States chose Pakistan, India went to the Soviet Union. But that political decision was reinforced by ideas about the corruption-free nature of the state-owned Soviet defense industry and the profit-mindedness of western, and especially American, firms.

This characterization has always been untrue. Soviet/Russian suppliers have engaged in as much corruption as western firms, but because the Soviet Union was a closed system, the corruption – which was reported first in the press in the supplier countries – was never really reported in the Soviet Union. This tradition continues, though the Russian free press has been more critical of the country’s defense deals. Indeed, those who served as Indian ‘agents’ for the Soviet firms have highlighted the better business practice of Russians, a laughable matter in light of India’s recent travails with the retrofit and sale of the Russian aircraft carrier Admiral Gorshkov.

The tendency is reiterated in Indian preferences in dealing with the West as well. Western firms have always been seen as money-grubbing, an opinion that exists across the political spectrum and is prevalent in the civilian bureaucracy. New Delhi seems to prefer government-to-government foreign military sales, which are in turn causing some degree of protest from users who want longer-term maintenance arrangements with suppliers.

The political rapprochement between India and the United States has not yet filtered into the system for attitudes to change dramatically. India’s growing military supply relationship with Israel is instructive. The most successful Israeli firm in the Indian market is Israel Aerospace Industries (IAI), a state-owned company. IAI was quick to adopt the Russian model of operation in India: offering the DRDO co-development opportunities to win contracts. In contrast, American firms are reluctant to work with, let alone transfer high-end technology to a state owned enterprise. They would prefer to set up a subsidiary in India, which could retain control of the technology.

India has been one of the biggest importers of advanced conventional weapons in the last thirty years, but this sustained rearmament has not altered India’s strategic position. The armed forces push for modernization, but do not have the authority to mount the national campaign necessary for transforming the security condition of the country. Budget increases delivered by a rapidly expanding economy and access to western technology previously denied to India have led to optimism about Indian military power, but the dysfunction in India’s civil-military relations reduces the impact of rearmament. Arming without aiming has some purpose in persuading other great powers of India’s benign rise, but it cannot be the basis of military planning.

This Policy Brief is based on an earlier paper published by Seminar, New Delhi. Stephen Cohen is a senior fellow at the Brookings Institution. Sunil Dasgupta is director of UMBC’s Political Science Program at the Universities at Shady Grove and a nonresident fellow at Brookings. They are the co-authors of Arming without Aiming: India’s Military Modernization, published in September 2010 by the Brookings Institution Press.

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Tax Increment Financing in the Kansas City and St. Louis Metropolitan Areas

Executive Summary

Tax increment finance (TIF) is a popular and potentially powerful tool for places that need economic development the most yet have the least to spend. By allowing jurisdictions to use portions of their tax base to secure public-sector bonds, the mechanism allows fiscally strapped localities to finance site improvements or other investments so as to "level the playing field" in economic development.

However, poorly designed TIF programs can cause problems. Not only can they increase the incentives for localities to engage in inefficient, zero-sum competition for tax base with their neighbors. Also, lax TIF rules may promote sprawl by reducing the costs of greenfield development at the urban fringe. It is therefore critical that state legislatures design TIF rules well.

In view of this, an analysis of the way TIF is designed and utilized in Missouri shows that:

  • Missouri law creates the potential for overuse and abuse of TIF. Vague definitions of the allowable use of TIF permit almost any municipality, including those market forces already favor, to use it. Weak limits on its use for inefficient inter-local competition for tax base touch off struggles between localities. And the inclusion of sales tax base in the program tilts it toward lower-wage jobs and retail projects, which rarely bring new economic activity into a region.

  • Thanks to these flaws, TIF is used extensively in high-tax-base Missouri suburban areas with little need for assistance in the competition for tax base. This is especially true in the St. Louis metropolitan area. There, TIF money very frequently flows to purposes other than combating "blight" in disadvantaged communities' its classic purpose. In fact, less than half of the 21 St. Louis-area cities that were using TIF in 2001 were disadvantaged or "at-risk" when evaluated on four indicaters of distress. On another measure, just seven of the 20 suburban areas using TIF fell into the "at-risk" category.

  • TIF is also frequently being used in the outer parts of regions' particularly in the St. Louis area. Most notably, only nine of the St. Louis region's 33 TIF districts lie in the region's core. Conversely, 14 of the region's 38 TIF districts lie west of the region's major ring road (I-270). These districts, moreover, contain 57 percent of the TIF-captured property tax base in the region. By contrast, the Kansas City region shows a pattern more consistent with the revitalization goals of TIF. The vast majority of the districts lie in the region's center city, though the huge size of the city means many are still geographically far-flung.

In sum, poorly designed TIF laws are being misused at a time when state and local fiscal pressures require every dollar be spent prudently. As a result, a potentially dynamic tool for reinvestment in Missouri's most disadvantaged communities threatens to become an engine of sprawl as it is abused by high-tax-base suburban areas that do not need public subsidies.

For these reasons, Missouri would be well-served by significant reforms in the laws governing TIF:

  • The allowable purposes for TIF should be more strictly defined to target its use to places with the most need for economic development.

  • Higher level review of local determinations that TIF subsidies will support net contributions to the regional or state economy (the "but-for" requirement) should be implemented.

  • Local TIF administrators should be required to show that TIF subsidies are consistent with land-use and economic development needs both locally and in nearby areas.

If such reforms were put in place, TIF could be returned to its attractive main purpose: that of providing resources that would not otherwise be available to localities that badly need them to promote needed economic development and redevelopment.

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  • Tom Luce
     
 
 




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The Political Geography of America’s Purple States: Five Trends That Will Decide the 2008 Election

Event Information

October 10, 2008
8:00 AM - 10:00 AM EDT

First Amendment Lounge
National Press Club
529 14th St. NW, 13th Floor
Washington, DC

The Metropolitan Policy Program at Brookings, hosted The Political Geography of America's Purple States: Five Trends That Will Decide the 2008 Election, a briefing on a new series of reports on the political demography of "purple" states in the 2008 election.

Purple states-or states where the current balance of political forces does not decisively favor one party or the other-will play an undeniably pivotal role in the upcoming election and include: Virginia and Florida in the South; the Intermountain West states of Colorado, New Mexico, Nevada, and Arizona; Michigan, Missouri, and Ohio in the Heartland; and Pennsylvania.

On October 10, 2008 at the National Press Club in Washington DC, authors William Frey and Ruy Teixeira highlighted the political and demographic trends in these 10 battleground states, focusing not only on their role in the 2008 election, but their position as toss-ups in years to come.

The session opened with an overview of the demographic shifts shaping all the contested states studied, and evolved into a detailed presentation of the trends that are testing and reshaping the balance of their voting populations, focusing particularly on five trends that Frey and Teixeira believe will decide the 2008 election. Feedback from James Barnes, political correspondent for the National Journal, helped shape the conversation.

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The Political Geography of Virginia and Florida: Bookends of the New South

This is the fourth in a series of reports on the demographic and political dynamics under way in key “battleground” states, deemed to be crucial in deciding the 2008 election. As part of the Metropolitan Policy Program’s Blueprint for American Prosperity, this series will provide an electoral component to the initiative’s analysis of, and prescriptions for, bolstering the health and vitality of America’s metropolitan areas, the engines of the U.S. economy. This report focuses on two major battleground states in the South, Virginia and Florida, which serve as bookends to an emerging New South.

Virginia and Florida have eligible voter populations that are rapidly changing. White working class voters are declining sharply while white college graduates are growing and minorities, especially Hispanics and Asians, are growing even faster. These changes are having their largest effects in these states’ major metropolitan areas, particularly Miami and rapidly-growing Orlando and Tampa in Florida’s I-4 Corridor and the suburbs of Washington, D.C. in Northern Virginia. Other large metro areas in these states are also feeling significant effects from these changes and will contribute to potentially large demographically related political shifts in the next election.

In Virginia, these trends will have their strongest impact in the fast-growing and Democratic-trending Northern Virginia area, where Democrats will seek to increase their modest margin from the 2004 election. The trends could also have big impacts in the Richmond and Virginia Beach metros, where Democrats will need to compress their 2004 deficits. Overall, the GOP will be looking to maintain their very strong support among Virginia’s declining white working class, especially in the conservative South and West region. The Democrats will be reaching out to the growing white college graduate group, critical to their prospects in Northern Virginia and statewide. The Democrats will also be relying on the increasing number of minority voters, who could help them not just in Northern Virginia, but also in the Virginia Beach metro and the Richmond and East region.

In Florida, these trends will have their strongest impacts in the fast-growing I-4 Corridor (36 percent of the statewide vote), which, while Democratic2 trending, is still the key swing region in Florida, and in the Miami metro, largest in the state and home to 27 percent of the vote. The trends could also have big impacts in the South and North, where Democrats will be looking to reduce their 2004 deficits in important metros like Jacksonville (North) and Sarasota and Cape Coral (South). Across the state, the GOP needs to prevent any erosion of support among white working class voters, especially among Democratic-trending whites with some college. They will also seek to hold the line among white college graduates, whose support levels for the GOP are high but declining over time. Finally, the support of the growing Hispanic population is critical to GOP efforts to hold the state, but this group is changing generationally and in terms of mix (more non-Cuban Hispanics), which could open the door to the Democrats.

Both of these states are near the top of the lists of most analysts’ list of battleground states for November 2008. Florida was a very closely contested state in both 2000 and 2004 (especially 2000). But Virginia’s status as a battleground is new to 2008. Yet in both states the contested political terrain reflects the dynamic demographic changes occurring within them. With 27 and 13 electoral votes, respectively, all eyes will be on Florida and Virginia on election night.



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The Political Geography of Ohio, Michigan, and Missouri: Battlegrounds in the Heartland

This is the third in a series of reports on the demographic and political dynamics under way in key “battleground” states, deemed to be crucial in deciding the 2008 election. As part of the Metropolitan Policy Program’s Blueprint for American Prosperity, this series will provide an electoral component to the initiative’s analysis of and prescriptions for bolstering the health and vitality of America’s metropolitan areas, the engines of the U.S. economy. This report focuses on three major battleground states in the Midwest—Ohio, Michigan, and Missouri—and finds that:

Ohio, Michigan and Missouri all feature eligible voter populations dominated by white working class voters. However, this profile is changing, albeit more slowly than in faster-growing states like Colorado or Arizona, as the white working class declines and white college graduates and minorities, especially Hispanics, increase. The largest effects are in these states’ major metropolitan areas— Cleveland, Columbus, and Cincinnati in Ohio: Detroit in Michigan; and St. Louis and Kansas City in Missouri— especially in their suburbs.

In Ohio, these trends could have their strongest impact in the fast-growing and Democratic-trending Columbus metro, where Democrats will seek to tip the entire metro in their favor by expanding their margin in Franklin County and reducing their deficit in the suburbs. The trends could also have big impacts in the Cleveland metro (especially its suburbs), in the Cincinnati metro (especially Hamilton County) and in the mediumsized metros of the Northeast (Akron, Canton, and Youngstown). Overall, the GOP will be looking to maintain their support among the declining white working class, especially among whites with some college, who have been trending Democratic. Also critical to their prospects is whether the growing white college-educated group will continue its movement toward the Democrats.

In Michigan, these trends will likely determine whether the fast-growing and populous Detroit suburbs continue shifting toward the Democrats, a development which would tip the Detroit metro (44 percent of the statewide vote) even farther in the direction of the Democrats. The trends will also have a big impact on whether the GOP can continue their hold on the conservative and growing Southwest region of the state that includes the Grand Rapids metro. The GOP will seek to increase its support among white college graduates, who gave the GOP relatively strong support in 2004, but have been trending toward the Democrats long term.

In Missouri, these trends will have their strongest impact on the two big metros of Democratic-trending St. Louis (38 percent of the vote)—especially its suburbs— and GOP-trending Kansas City (20 percent of the statewide vote). The Democrats need a large increase in their margins out of these two metros to have a chance of taking the state, while the GOP simply needs to hold the line. The trends will also have a significant impact on the conservative and growing Southwest region, the bulwark of GOP support in the state, where the Republicans will look to generate even higher support levels. The GOP will try to maintain its support from the strongly pro-GOP white college graduate group, which has been increasing its share of voters as it has trended Republican.

These large, modestly growing states in the heartland of the United States will play a pivotal roll in November’s election. Though experiencing smaller demographic shifts than many other states, they are each changing in ways that underscore the contested status of their combined 48 Electoral College votes in this year’s presidential contest.



Table Of Contents:
Executive Summary » 
Introduction and Data Sources and Definitions » 
Ohio » 
Michigan » 
Missouri » 
Endnotes »

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Facilitating Antibacterial Drug Development


Event Information

May 9, 2012
8:30 AM - 2:30 PM EDT

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

As the prevalence of drug-resistant bacteria continues to rise, there is a pressing need for new drugs to combat infections by these organisms. However, research and development in this area has slowed, creating a public health concern that we lack the drugs necessary to treat multi-drug resistant infections. Challenges to promoting antibacterial drug development may be scientific, methodological, regulatory, or economic in nature.

On Wednesday, May 9, 2012, the Engelberg Center for Health Care Reform convened an expert workshop, "Facilitating Antibacterial Drug Development,” that explored solutions to methodological and regulatory challenges that could make the development process more efficient. This meeting brought together diverse multi-stakeholder experts—including medical product developers, health care professionals, researchers, patient advocates, representatives of the U.S. Food and Drug Administration, and other groups—to explore the following issues:

  • Existing paradigms for antibacterial drug development;
  • Novel approaches to further antibacterial drug development, including use of pharmacokinetics and pharmacodynamics, Bayesian methods, innovative clinical trial designs, new data sources, alternate clinical endpoints, and new regulatory tools; and
  • Short- and long-term opportunities to advance the antibacterial drug development enterprise through collaboration among stakeholders, improved regulatory science, and other means.

For more information on FDA’s Antibacterial Drug Development Task Force, click here.

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African Lions: A ‘new elite’ in the South African labor market?


While the South African labor market faces many large challenges, some more subtle trends might also be developing that undermine the country’s growth. Yes, the current level of unemployment stands at 24 percent. True, school dropout rates remain high: Only 50 percent of students will make it to the last year of high school, which means that the number of skilled workers in the country remains low. In addition, income inequality in South Africa is an overwhelming obstacle—with the country having one of the highest Gini coefficients (a statistical tool commonly used to measure inequality) in the world—and has been slowing its fight against poverty.

In their recent paper, Demographic, employment, and wage trends in South Africa, Haroon Bhorat, Karmen Naidoo, Morné Oosthuizen, and Kavisha Pillay examine important, perhaps precarious, trends in South African employment, such as the combination of South Africa’s weak educational system and labor demand biased toward skilled workers and the significant rise in temporary employment over full-time positions. However, the authors argue that perhaps the most interesting is the spike in public sector employment and the subsequent development of a new segment of the labor market, what they call a “new elite”: the unionized public sector employee.

The shift to services and the public sector

Like so many of sub-Saharan African countries, South Africa’s labor makeup (as well as contributions to GDP) has swiftly been shifting towards the services sector, especially since 2001. Table 1 clearly shows the dramatic shift in labor towards community, social, and personal (CSP) services and financial services: These two areas accounted for 73 percent of the shift in employment between 2001 and 2012 (Column 3). 

                                                            Employment Shares            Share of Change (ΔEi/ΔE) (a)   
   2001          2012   (2001-2012) 
Primary   0.15  0.07  -0.28
Agriculture   0.1  0.04  -0.2
Mining   0.05  0.02
 -0.08
Secondary   0.2  0.21
 0.21
Manufacturing   0.14  0.12
 0.04
Utilities   0.008  0.008
 0.004
Construction   0.05  0.07
 0.16
Tertiary   0.63  0.71
 1.08
Trade   0.21  0.21
 0.2
Transport   0.04  0.6  0.11
Financial  0.09  0.13  0.31
CSPS   0.17  0.22 0.42 
Private households   0.09  0.08  0.04
Total   1  1  1

Note: 1. CSPS stands for community, social, and personal services, which is predominantly made up of public sector employment.)

2.(a) The ratio of the percentage change in the share of employment to the overall change in employment over the period (share of change in employment). This measure shows, within each broad sector, where the sources of employment growth are. For example, employment in the tertiary sector is 1.08 times (or 108 percent of) the level of employment in 2001, which is the sum of the changes for all the industries within this sub-sector. CSPS then is the greatest contributor to employment growth in the tertiary sector.

Source: Bhorat et al. (2014) using PALMS dataset (2012).

Importantly, the authors emphasize, the CSP sector, which accounted for 42 percent of this shift, is mostly made up of public sector jobs—hinting that expansion of the public sector has contributed to this trend. The share of public sector employment rose to 17.5 percent by the end of 2014 from 14.2 percent in 2004. In addition, they note that the largest expansion of the public sector came in 2009, just after the global financial crisis, showing that the public sector was more capable of absorbing” excess unskilled and medium-skilled labor at times of economic and labor market distress.”

Another important trend the authors point to within the shift to the public sector between 2008 and 2014 is that a great number of jobs in which employment grew quickly involve unskilled workers (such as sweepers, farmhands and laborers, helpers and cleaners, construction and maintenance laborers, and garbage collectors) and medium-skilled workers (such as police and traffic officers, institution and home-based care workers, prison guards, cooks, and childcare workers) (Figure 1). For a deeper analysis of South African labor market’s skill needs, see the full paper.

Figure 1: Share of change in public sector jobs by detailed occupation (2008 Q1-2014 Q4)


Notes: These occupations are the largest 42 public sector occupations, making up 80 percent of total employment in the public sector in 2014, and 97 percent of the change in the number of public sector jobs over the 2008-14 period.

Source: StatsSA QLFS 2008Q1; StatsSA QLFS 2014Q4; own calculations.

From these trends, the authors infer that the South African government’s Expanded Public Works Program (EPWP)—which “creates jobs through government-funded infrastructure projects, through its non-profit organization and community work program, as well as through its public environment and culture programs”—has played a major part in the expansion of the public sector.

Interestingly, though, the authors also find that overall the public sector has a bigger proportion of high-skilled employees than the private sector), though, between 2008 and 2013 the public sector barely saw a change in its proportion of high-skilled workers. Rather, it experienced its largest growth in the medium- and low-skilled jobs, as noted in Figure 1. They note that this phenomenon suggests that “the state [is] able to absorb excess unskilled and medium-skilled labor at times of economic and labor market distress.” The private sector’s proportion of high-skilled workers, on the other hand, grew by 25 percent. There is then, they say, a “mismatch” between the supply and demand of South Africa’s labor market when it comes to high-skilled workers.

After exploring this trend, the authors also delve into the demographic differences between public and private sector workers. For example, they find that the average public sector worker is older (41 versus 38) and likely to have a higher educational level on average. There are more women in the public sector—52 percent compared to 44 percent. There are also more Africans—77 percent in the public sector (up from 72 percent in 2008) and 66 percent in the private sector (unchanged). The authors argue that these two statistics demonstrate that public sector has “transformed” its labor force at a faster pace since both are groups that historically have been marginalized in the South African labor market.

The impact of unions in the South African labor market

The public sector in South Africa also has a higher unionization rate: 69.2 percent compared to the private sector’s 24.4 percent rate in 2013). As public sector employment has grown, the authors say, so has its proportion of workers in unions. Unions in South Africa are influential, as the authors note, “Powerful labor unions are often associated with creating a wage premium for their members, given their ability to mobilize industrial action and negotiate in favor of their members during times of wage negotiations.”

Indeed, this seems to be the case. Past studies have found that bargaining power—as part of a bargaining council or a union—presents a wage premium.  The authors have similar results: The average public sector worker makes 11,668 rand ($1,209) per month compared to an average private sector employee (7,822 rand per month). Most importantly, though, when the authors disaggregate based on participation in a union, they actually find that, among non-unionized workers, the private sector employee actually receives a higher wage than the public sector worker, by about 952 rand per month. This finding, they say, suggests that the public sector premium might be tied to public sector union membership.

The authors admit a caveat: Public sector union workers tend to be white, older, and better educated than their non-unionized public sector counterparts. In fact, non-union public sector workers are 80 percent African and 10 percent colored[1] (two groups more likely to be under the EPWP). In addition, non-union occupations are usually less skilled (elementary occupations, service and sales occupations, and technical and associate professional occupations). However, they emphasize, “Ultimately though, the wage distributions above suggest that, at least in terms of earnings, a dual labor market may indeed be prevalent in the South African labor market.”  (For the authors’ full quantitative analysis, including an examination of how this trend interacts with state-owned enterprises and temporary workers, see the full paper.)

Thus, they argue, a “new labor elite” is forming.

Note: The African Lions project is a collaboration among United Nations University-World Institute for Development Economics Research (UNU-WIDER), the University of Cape Town’s Development Policy Research Unit (DPRU), and the Brookings Africa Growth Initiative, that provides an analytical basis for policy recommendations and value-added guidance to domestic policymakers in the fast-growing economies of Africa, as well as for the broader global community interested in the development of the region. The six papers, covering Mozambique, Kenya, Ghana, South Africa, Ethiopia, and Nigeria, explore the key constraints facing African economies as they attempt to maintain a long-run economic growth and development trajectory.


[1] In this paper, “African” is used to refer to people classified by the apartheid state as “native,” “Bantu,” or “black.” “Colored” refers mainly to people in the Western Cape province, and is an ethnic label for people of mixed ethnic origin who possess ancestry from Europe, Asia, and various Khoisan and Bantu tribes of Southern Africa.

Authors

  • Christina Golubski
      
 
 




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Figure of the week: Might a few outlier economies explain Africa’s abnormally high inequality?


On Thursday, July 7, the International Monetary Fund (IMF) revised its economic outlook for South Africa. Despite “considerable economic and social progress” since 1994, the IMF report cited high income inequality, among other factors, in its projection of slow growth and increased unemployment in the medium term. Earlier this year, in the Brookings Africa Growth Initiative’s Foresight Africa 2016, we explored this pressing problem—high income inequality—across the continent. The initial takeaway was that sub-Saharan Africa has greater in-country income inequality than other developing countries around the world. However, after separating seven outlier economies—Angola, the Central African Republic, Botswana, Zambia, Namibia, Comoros, and South Africa—we noted that income inequality, measured by the Gini coefficient, in the rest of the region actually mirrors the rest of the developing world, which currently stands at 0.39. All seven outlier economies have Gini coefficients above 0.55, a level reached by only four other countries worldwide: Suriname, Haiti, Colombia, and Honduras. 

It is important to explore precisely why this disparity exists. Notably, sub-Saharan Africa is not only an outlier in income inequality, but also in the relationship between economic growth and poverty reduction. Generally, in the developing world, every 1 percent of growth reduces poverty 4 percent. In sub-Saharan Africa, however, every 1 percent of growth only reduces poverty by 3 percent. In Foresight Africa 2016, Brookings Nonresident Senior Fellow Haroon Bhorat suggests that this disparity may be because of the commodity booms that have sustained growth periods in African economies, which bring extraordinary returns to capital but limited job growth. Alternatively, these commodity booms may have accompanied a fall in manufacturing output; growth is thus concentrated in the low-productivity services sector. In any case, this graph forces us to consider exactly what type of structural transformation is necessary for continued economic growth and acknowledge that inequality in sub-Saharan Africa might require different solutions in different countries.

For a more in-depth discussion on this issue, see Foresight Africa 2016 and Bhorat’s discussion of African inequality in relation to the Sustainable Development Goals.

Omid Abrishamchian contributed to this post.

Authors

  • Mariama Sow
      
 
 




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Accountability for early education–a different approach and some positive signs

Early childhood education in the United States is tangle of options—varying in quality, price, structure, and a range of other dimensions. In part as a result, children start kindergarten having had very different experiences in care and very different opportunities to develop the skills and dispositions that will serve them well during school. Systematic differences…

       




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Pandemic politics: Does the coronavirus pandemic signal China’s ascendency to global leadership?

The absence of global leadership and cooperation has hampered the global response to the coronavirus pandemic. This stands in stark contrast to the leadership and cooperation that mitigated the financial crisis of 2008 and that contained the Ebola outbreak of 2014. At a time when the United States has abandoned its leadership role, China is…

       




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The Renminbi: The Political Economy of a Currency

The United States and other countries have complained that China keeps the value of its currency artificially low, boosting China’s exports and trade surplus at the expense of its global trading partners. Arthur Kroeber explains how the ongoing currency conflict is rooted in two very different views about the function of exchange rates.

      
 
 




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Extending soldiers’ assignments may help the military maintain readiness

Following President Trump’s mid-March declaration that the COVID-19 outbreak constituted a “national emergency,” the Department of Defense (DoD) moved swiftly to implement travel restrictions for DoD employees intended to “preserve force readiness, limit the continuing spread of the virus, and preserve the health and welfare” of military service members, their families and DoD civilians. In…

       




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

       




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Reckless politicking: Lieberman to be named Israel's defense minister


On May 17, Egyptian President Abdel-Fatah el-Sissi did something Egyptian presidents have done many times before: he urged Israel and the Palestinians to renew negotiations for peace, this time by backing an international conference promoted by the French foreign minister.

But what made Sissi’s call particularly interesting is that he called on not just the leaders but also political "parties" to seize what he called “a real opportunity to find a long-awaited solution.” Sissi's call offered Israeli Prime Minister Benjamin Netanyahu an opportunity to accommodate Israel's newest best friend, Sissi, rather than the French themselves. It would not have brought peace, of course: though an international conference would offer a glimmer of hope to change some of the worst aspects of the current diplomatic deadlock, it would not solve any of the outstanding substantive issues between Israelis and Palestinians.

Sissi's reference to political parties was no coincidence: it fit perfectly with the domestic political needs of Netanyahu and of Opposition Leader Isaac Herzog, who were angling to bring the Zionist Union joint list into the government and give Netanyahu a much-needed parliamentary cushion beyond his current razor-thin coalition. 

Herzog first had to convince his own highly-reluctant party of the need to join its rival Netanyahu—and if peace was about to break out, how could they refuse? For about 48 hours it seemed like Herzog was indeed about to announce his decision to join the coalition, face the battle in his party, and become Israel's foreign minister.

Then something else happened. Rather than appointing Herzog as foreign minister, Netanyahu is now poised to bring back Avigdor Lieberman, a former foreign minister and Israel's least diplomatic politician. Lieberman won't be returning to diplomacy, however. Instead, he will get a significantly more powerful position, second only to the prime minister: minister of defense. In response, current Minister of Defense Moshe Ya’alon today resigned from the cabinet and the Knesset, refusing to take another cabinet position. He gave a scathing speech, saying that "[E]xtremist and dangerous forces have taken over Israel and the Likud movement."

In what can only be considered brilliant politicking—and reckless policy—Netanyahu jettisoned Ya’alon and Herzog in favor of his former associate and bitter personal rival, Lieberman.

In what can only be considered brilliant politicking—and reckless policy—Netanyahu jettisoned Ya’alon and Herzog in favor of his former associate and bitter personal rival, Lieberman. Herzog is left wounded and humiliated, played for a fool—the gravest sin in Israeli political culture. Netanyahu finds himself at the helm of an enlarged coalition (Lieberman brings with him five members of Knesset, after one member of his faction left the party today in protest of the move), safer from parliamentary shocks and from attacks from the right (the whole right wing is now inside the coalition. Lieberman will still likely criticize Netanyahu from within the government, but not quite as fiercely). 

A cynics’ cynic

Lieberman's pending appointment has been met with astonishment by the opposition in Israel, by many in the military which he will oversee, and indeed here in Washington—and with good reason.

Just these past few months, Lieberman has viciously attacked both Netanyahu and the military brass for what he claimed was a weak response to terrorist attacks. In but one example of many, Lieberman came to the defense of a soldier who the Israel Defense Forces (IDF) had decided to prosecute for killing a Palestinian assailant who had already been thoroughly subdued. The contrast to current Minister of Defense Moshe Ya’alon is striking: Ya’alon defended the military's decision and stressed the importance of ethical norms and of rules of engagement in the military. Ya’alon is very right wing on the Palestinian issue, but he has consistently shown an honorable stance in the face of attacks on democratic norms. 

Lieberman is ostensibly less right-wing on the Palestinian issue—sometimes. Though he is a settler himself, he has endorsed a two-state solution in very general theory, noting he would even move if peace necessitated it. His endorsement, however, has always been couched in the toughest language possible and in utter mistrust of Palestinian intentions or the chances of peace ever materializing. On the niceties of democratic norms, including military law, he is a cynics' cynic. Benny Begin, another former Likud minister and an avowed hawk, has called Lieberman's appointment “delirious.”

As minister of defense, these positions will be highly consequential. Not only will he be in charge of the military brass and its promotion, but he will have statutory authority over many affairs in the West Bank, which is under military rule. Any attempt to improve the daily lives of Palestinians (such as a project just announced to streamline checkpoints for Palestinians) will be under his purview. His open calls to bring down Hamas through a ground invasion of Gaza if there is another round of fighting with Hamas—voiced even while he was a cabinet member during the last round of fighting—will now carry the weight of the minister of defense.

What was Herzog thinking? 

For the past year, since Netanyahu formed his fourth government, Herzog had denied time and again that he was aiming to join Netanyahu rather than replace him. He bemoaned the cynicism of those who simply would not believe him. This week the masks came off. Negotiations between the sides were accelerated and Herzog began a difficult intra-party fight to justify such a move. "National unity" governments are quite common in Israel, starting with the emergency cabinet of 1967, on the eve of the Six-Day War, when a sense of imminent doom swept the country. 

These governments, however, are usually justified by either an acute crisis, like in 1967, or in order to resolve a political deadlock, such as between Shimon Peres' Labor and Yitzhak Shamir's Likud in 1984. Peres and Shamir even "rotated" the post of prime minister. Though the government was incapable of any meaningful diplomatic advances, on which it was divided, it succeeded in tackling hugely important challenges in the economy—bringing inflation down from an annual rate of over 444 percent (not a typo) in 1984, and in defense—extricating Israel from most of Lebanon, following the first Israeli Lebanon War. 

What would be the logic this time? Herzog was promising three things to his party members: a host of portfolios (jobs and titles but also influence on a range of domestic policy issues); a veto on some aspects of policy which Labor finds most damaging, including remote settlement construction and legislation seen as limiting democratic discourse in Israel; and a leading role in any negotiations with the Palestinians, staring with the French peace conference. 

The jobs for Labor would have been real. A veto on policy could have been important—Tzipi Livni, Herzog's non-Labor partner in the Zionist Union, played a crucial role in protecting democratic norms as minister of justice in Netanyahu's previous government. 

On peace, however, Herzog was offering fool's gold. Put it this way: if you think Herzog would have real autonomy to run negotiations with the Palestinians while Netanyahu is prime minister, I have two suggestions. First, ask Tzipi Livni, who had that exact task in the previous government and was accompanied to every negotiation by Netanyahu’s personal lawyer, Yitzhak Molcho. Livni, incidentally, was strongly opposed to joining Netanyahu this time around. 

Second, I have some great real-estate in a swamp in Florida I'd like to discuss with you.

Herzog had a political rationale as well. He is a natural minister and backroom politician: smart, hardworking and prone to pragmatic compromises. He is not a natural public politician. As Leader of the Opposition he has wowed no one with his charisma or ability to stand up to Netanyahu and offer a bold alternative. Better to be in the halls of power than in the open arena. With the prospects of a fierce leadership challenge in his own Labor Party, moreover, he would have bolstered his bona fides as a national leader and therefore give himself a bit more time—the most a politician in Israel can really hope for. 

If there was a political benefit to Herzog personally, the outlook for his Labor Party would have been dismal.

If there was a political benefit to Herzog personally, the outlook for his Labor Party would have been dismal. Having joined Netanyahu, it would have been very hard to present the party as an alternative to his rule. 

What now?

Netanyahu can now feel slightly more secure in his coalition, though once again at the mercy of the mercurial Lieberman. Lieberman will enjoy a powerful post that usually bestows its occupant with new popularity in Israel (the converse is true of the finance ministry). Finance Minister Moshe Kahlon will enjoy a wider coalition to pass his domestic legislation and budget; indeed he'd been pushing for enlarging the coalition since it was formed. 

In the opposition, Herzog is weaker than ever. After being led on by Netanyahu for months, breaking his own word on the negotiations and then losing his gamble, he is severely exposed to challenges within Labor. His party's image has taken a serious hit as well.

Herzog's weakness will allow others in the opposition to claim the mantle of alternative to Netanyahu. Already, Yair Lapid’s centrist Yesh Atid party is the main beneficiary, but others may emerge as well, especially from the ranks of former generals like Gabi Ashkenazi. 

Most importantly, Israel's actual policy may be affected significantly by this move. Of all the governmental posts, defense is the one that has the most effect on the crucial questions of security for Israelis (and on the daily lives of Palestinians). Instead of grand peace plans Herzog was selling, Netanyahu's political brilliance has wrought one of the most hardline governments Israel has ever had.

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Local elections could help unlock Palestinian political paralysis


Last month’s decision by the Palestinian Authority to schedule municipal elections in early October hardly registered in the West Bank and Gaza Strip, much less here in Washington. In light of Hamas’ recent decision to take part in the process, however, those elections have suddenly taken on new meaning. While the election of some 414 village, town, and city councils across the West Bank and Gaza Strip will not change the face of the Palestinian leadership or alter the diplomatic impasse with Israel, local elections have the potential to unlock the current paralysis within Palestinian politics.

Although Palestinian law calls for local elections to take place every four years, they have only been held twice since the creation of the Palestinian Authority (PA) in 1993, only one of which could be deemed genuinely competitive. The first and only local elections to take place in both the West Bank and Gaza Strip were held in 2004-05, in which Hamas—in its first foray into electoral politics—made major gains. Local elections were again held in 2012, although this time Hamas boycotted the process, preventing the vote from taking place in Gaza and allowing Fatah to declare a sweeping, if somewhat hollow, victory. 

Hamas’ decision to take part in this year’s local elections was therefore something of a surprise. Indeed, Hamas initially expressed dismay at the announcement, accusing the leadership in Ramallah of acting without consulting the other parties. Moreover, should the elections proceed as planned on October 8, they would be the first competitive electoral contest in the occupied territories since Hamas defeated Mahmoud Abbas’s ruling Fatah faction in the 2006 legislative election. Those elections triggered an international boycott of the PA which eventually led to the split between Fatah and Hamas and the current political paralysis.

If nothing else, Hamas’ entry into the elections averts another needless internal crisis in Palestinian politics. A boycott by Hamas would likely have further entrenched the political and geographic division between the Fatah-dominated West Bank and Hamas-ruled Gaza Strip, while dealing yet another blow to the beleaguered National Consensus Government, which despite being accepted by both factions in April 2014 has yet to physically return to Gaza. Movement on the reconciliation track could also help push the long-stalled reconstruction of Gaza, which has yet to recover from the devastating war of 2014.

Hamas has little to lose from participating in an election that is unlikely to significantly alter the political landscape one way or the other...[and Fatah] has little to gain from “winning” another electoral process that is largely uncontested.

What explains Hamas’ apparent change of heart? For one, Hamas may believe it has an advantage over Fatah, which continues to suffer from widespread perceptions of corruption and incompetence—a perception reinforced by the collapse of the peace process as well as the unprecedented unpopularity of President Abbas. Hamas may also view the upcoming vote as a way to gauge its current standing and future prospects in anticipation of long-awaited legislative and presidential elections. Either way, Hamas has little to lose from participating in an election that is unlikely to significantly alter the political landscape one way or the other. 

Hamas’ decision to participate in the elections is welcome news for Palestinian voters eager to see the return of competitive elections and a revival of political life after years of stagnation. It even helps Fatah, which has little to gain from “winning” another electoral process that is largely uncontested. More important, as the party that lost both parliamentary elections and a civil war in 2006-07 and that remains the chief proponent of a failed process, Fatah desperately needs a political victory of some kind as well as a basis on which to stake its claim to legitimacy and continued grip on power.

That said, it is important not to overstate the significance of local elections, which in the end will do nothing to address the deeper problems facing Palestinians in the occupied territories, whether from Israel’s continued occupation and its ever-expanding settlement enterprise or the ongoing political dysfunction within their own ranks. On the other hand, the prospect of the first competitive Palestinian elections in a decade represents a small but significant ripple in the otherwise stagnant waters of Palestinian politics.

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Don’t ignore class when addressing racial gaps in intergenerational mobility

It is hard to overstate the importance of the new study on intergenerational racial disparities by Raj Chetty and his colleagues at the Equality of Opportunity Project. Simply put, it will change the way we think the world works. Making good use of big data—de-identified longitudinal data from the U.S. Census and the IRS covering…

       




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Facilitating biomarker development and qualification: Strategies for prioritization, data-sharing, and stakeholder collaboration


Event Information

October 27, 2015
9:00 AM - 5:00 PM EDT

Embassy Suites Convention Center
900 10th St NW
Washington, DC 20001

Strategies for facilitating biomarker development

The emerging field of precision medicine continues to offer hope for improving patient outcomes and accelerating the development of innovative and effective therapies that are tailored to the unique characteristics of each patient. To date, however, progress in the development of precision medicines has been limited due to a lack of reliable biomarkers for many diseases. Biomarkers include any defined characteristic—ranging from blood pressure to gene mutations—that can be used to measure normal biological processes, disease processes, or responses to an exposure or intervention. They can be extremely powerful tools for guiding decision-making in both drug development and clinical practice, but developing enough scientific evidence to support their use requires substantial time and resources, and there are many scientific, regulatory, and logistical challenges that impede progress in this area.

On October 27th, 2015, the Center for Health Policy at The Brookings Institution convened an expert workshop that included leaders from government, industry, academia, and patient advocacy groups to identify and discuss strategies for addressing these challenges. Discussion focused on several key areas: the development of a universal language for biomarker development, strategies for increasing clarity on the various pathways for biomarker development and regulatory acceptance, and approaches to improving collaboration and alignment among the various groups involved in biomarker development, including strategies for increasing data standardization and sharing. The workshop generated numerous policy recommendations for a more cohesive national plan of action to advance precision medicine.  


Event Materials

       




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Beyond Madrasas: Assessing the Links Between Education and Militancy in Pakistan

Overview

Increasing educational attainment is likely to reduce conflict risk, especially in countries like Pakistan that have very low levels of primary and secondary school enrollment. Education quality, relevance and content also have a role to play in mitigating violence. Education reform must therefore be a higher priority for all stakeholders interested in a more peaceful and stable Pakistan. Debate within the country about education reform should not be left only to education policymakers and experts, but ought to figure front and center in national dialogues about how to foster security. The price of ignoring Pakistan’s education challenges is simply too great in a country where half the population is under the age of 17.

There has been much debate concerning the roots of militancy in Pakistan, and multiple factors clearly come into play. One risk factor that has attracted much attention both inside Pakistan and abroad is the dismal state of the national education sector. Despite recent progress, current school attainment and literacy levels remain strikingly low, as does education spending. The Pakistani education sector, like much of the country’s public infrastructure, has been in decline over recent decades. The question of how limited access to quality education may contribute to militancy in Pakistan is more salient now than ever, given the rising national and international security implications of continued violence.

The second half of 2009 witnessed not only the Pakistani government stepping up action against insurgents but also the release of a new Pakistan National Education Policy that aspires to far-reaching and important reforms, including a commitment to increase investment in education—from 2 to 7 percent of gross domestic product. Hundreds of millions of dollars in international education aid have been newly pledged by donor countries. This renewed emphasis on education represents a substantial opportunity to seek to improve security in Pakistan and potentially also globally over the medium to long term. Policymakers both inside and outside Pakistan should give careful consideration to whether and how education investments can promote peace and stability, taking into account what we now know about the state of the education sector and the roots of militancy.

This report takes a fresh look at the connection between schools, including but not limited to Pakistan’s religious seminaries, known as “madrasas,” and the rising militancy across the country. Poor school performance across Pakistan would seem an obvious area of inquiry as a risk factor for conflict. Yet to date, the focus has been almost exclusively on madrasas and their role in the mounting violence. Outside Pakistan, relatively little attention has been given to whether and how the education sector as a whole may be fueling violence, over and above the role of the minority of militant madrasas.

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The Power of Circumstance: A New Approach to Measuring Education Inequality


INTRODUCTION

In recent years, there has been a resurgence of interest in the issue of inequality. Part of this resurgence can be traced to new evidence of persistent and widening wealth gaps. Average incomes may be converging globally as a result of high growth in emerging markets, stronger growth in many poor countries, and slow growth in rich countries. However, the evidence also shows that within countries a parallel process of income divergence, marginalization and rising inequality is also taking place. Put differently, the rising tide of global prosperity is not lifting all boats.

Much of the international debate on inequality focuses on the distribution of income across and within countries. Other dimensions of inequality have received less attention. This is unfortunate. Amartya Sen has described development as “a process of expanding the real freedoms that people enjoy” by building human capabilities or their capacity to lead the kind of life they value. Income is a means to that end but it is a limited indicator of well-being. Moreover, a person’s income reflects not just personal choice but also their opportunities for improving health, literacy, political participation and other areas. Education is one of the most basic building blocks for the “real freedoms” that Sen describes. People denied the chance to develop their potential through education face diminished prospects and more limited opportunities in areas ranging from health and nutrition, to employment, and participation in political processes. In other words, disparities in education are powerfully connected to wider disparities, including international and intra-country income inequalities. This is why education has been identified as one of the most critical factors in breaking down the disadvantages and social inequalities that are limiting progress toward the United Nations’ Millennium Development Goals (MDGs)—development targets adopted by the international community for 2015.

Understanding patterns of educational inequality is critical at many levels. Ethical considerations are of paramount importance. Most people would accept that children’s educational achievements should not be dictated by the wealth of their parents, their gender, their race or their ethnicity. Disparities in educational opportunities are not just inequalities in a technical sense, they are also fundamental in equities—they are unjust and unfair. In an influential paper, John Roemer differentiated between inequalities that reflect factors such as luck, effort and reasonable reward, and those attributable to circumstances that limit opportunity (Roemer 1988).1 While the dividing line may often be blurred, that distinction has an intuitive appeal. Most people have a high level of aversion to the restrictions on what people—especially children—are able to achieve as a result of disparities and inherited disadvantages that limit access to education, nutrition or health care (Wagstaff, 2002). There is a wide body of opinion across political science, philosophy and economics that equal opportunity—as distinct from equality of outcomes—is a benchmark of egalitarian social justice. The theories of distributive justice associated with thinkers such as Amartya Sen, John Rawls, Ronald Dworkin and John Roemer argue, admittedly from very different perspectives, that public policy should aim at equalizing opportunity to counteract disadvantages associated with exogenous circumstances over which individuals or social groups have no control. Given the role of education as a potential leveler of opportunity, it is a national focal point for redistributive social justice.

Considerations of economic efficiency reinforce the ethical case for equalizing educational opportunities. Education is a powerful driver of productivity, economic growth, and innovation. Econometric modeling for both rich and poor countries suggests that an increase in learning achievement (as measured by test score data) of one standard deviation is associated on average with an increase in the long-run growth rate of around 2 percent per capita annually (Hanushek and Wößmann, 2010; Hanushek, 2009; Hanushek and Wößmann, 2008). Such evidence points to the critical role of education and learning in developing a skilled workforce. Countries in which large sections of the population are denied a quality education because of factors linked to potential wealth, gender, ethnicity, language and other markers for disadvantage are not just limiting a fundamental human right. They are also wasting a productive resource and undermining or weakening the human capital of the economy.

International development commitments provide another rationale for equalizing educational opportunities. This is for two reasons. First, the commitments envisage education for all and achievement of universal primary education by 2015. Second, there is mounting evidence that inequality is acting as a brake on progress toward the 2015 goals. Since around 2005, the rate of decline in the out-of-school population has slowed dramatically. Based on current trends, there may be more children out of school in 2015 than there were in 2009. Caution has to be exercised in interpreting short-run trends, especially given the weakness of data. However, the past three editions of the UNESCO Education for All Global Monitoring Report (GMR) have highlighted the role of inequality in contributing to the slowdown with governments struggling to reach populations that face deeply entrenched disadvantages (UNESCO, 2008, 2010, 2011). Therefore, picking up the pace toward the 2015 goals requires a strengthened focus on equity and strategies that target the most marginalized groups and regions of the world (Sumner and Tiwari, 2010; UN-DESA, 2009; UNESCO, 2010). It should be added that disparities in education relate not just to access, but also to learning achievement levels.

Accelerated progress in education would generate wider benefits for the MDGs. Most of the world’s poorest countries are off-track for the 2015 MDG target of halving income poverty and a long way from reaching the targets on child survival, maternal health and nutrition. Changing this picture will require policy interventions at many levels. However, there is overwhelming evidence showing that education—especially of young girls and women—can act as a potent catalyst for change. On one estimate, if all of sub-Saharan Africa’s mothers attained at least some secondary education, there would be 1.8 million fewer child deaths in the region each year. Thus while education may lack the “quick fix” appeal of vaccinations, it can powerfully reinforce health policy interventions.

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How US military services are responding to the coronavirus and the pandemic’s impact on military readiness

On this special edition of the podcast, four U.S. military officers who are participating in the 2019-2020 class of Federal Executive Fellows at Brookings share their expert insights about the effects that the coronavirus pandemic is having on the readiness of their respective services, and how their services are responding to the crisis. http://directory.libsyn.com/episode/index/id/14065544 Brookings…

       




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Amidst unimpressive official jobs report for May, alternative measures make little difference


May’s jobs gains, released this morning, show that only 38,000 new jobs were added this May, down from an average of 178,000 over the first four months of the year, and the least new jobs added since September 2010.

This year’s monthly job gains and losses can indicate how the economy is doing once they are corrected to account for the pattern we already expect in a process called seasonal adjustment. The approach for this seasonal adjustment that is presently used by the Bureau of Labor Statistics (BLS) puts very heavy weight on the current and last two years of data in assessing what are the typical patterns for each month.

In my paper “Unseasonal Seasonals?” I argue that a longer window should be used to estimate seasonal effects. I found that using a different seasonal filter, known as the 3x9 filter, produces better results and more accurate forecasts by emphasizing more years of data. The 3x9 filter spreads weight over the most recent six years in estimating seasonal patterns, which makes them more stable over time than in the current BLS seasonal adjustment method.

I calculate the month-over-month change in total nonfarm payrolls, seasonally adjusted by the 3x9 filter, for the most recent month. The corresponding data as published by the BLS are shown for comparison purposes. According to the alternative seasonal adjustment, the economy actually lost about 4,000 jobs in May (column Wright SA), compared to the official BLS total of 38,000 gained (column BLS Official).

In addition to seasonal effects, abnormal weather can also affect month-to-month fluctuations in job growth. In my paper “Weather-Adjusting Economic Data” I and my coauthor Michael Boldin implement a statistical methodology for adjusting employment data for the effects of deviations in weather from seasonal norms. This is distinct from seasonal adjustment, which only controls for the normal variation in weather across the year. We use several indicators of weather, including temperature and snowfall.

We calculate that weather in May had a negligible effect on employment, bringing up the total by only 4,000 jobs (column Weather Effect). Our weather-adjusted total, therefore, is 34,000 jobs added for May (column Boldin-Wright SWA). This is not surprising, given that weather in May was in line with seasonal norms.

Unfortunately, neither the alternative seasonal adjustment, nor the weather adjustment, makes todays jobs report any more hopeful. They make little difference and, if anything, make the picture more gloomy.

a. Applies a longer window estimate of seasonal effects (see Wright 2013).
b. Includes seasonal and weather adjustments, where seasonal adjustments are estimated using the BLS window specifications (see Boldin & Wright 2015). The incremental weather effect in the last column is the BLS official number less the SWA number.

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  • Jonathan Wright
Image Source: © Toru Hanai / Reuters
     
 
 




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Metropolitan Lens: Youth employment in the Washington, D.C. region


In a recent analysis, I highlighted how employment and disconnection among young people vary by age, race, and place. In this podcast, I dig deeper into the data on the Washington, D.C. region. Although the area generally performs well on employment measures, not all young people are faring equally well.

Listen to the full podcast segment here: 

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Image Source: © Keith Bedford / Reuters
      
 
 




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What does the Gantz-Netanyahu coalition government mean for Israel?

After three inconclusive elections over the last year, Israel at last has a new government, in the form of a coalition deal between political rivals Benjamin Netanyahu and Benny Gantz. Director of the Center for Middle East Policy Natan Sachs examines the terms of the power-sharing deal, what it means for Israel's domestic priorities as…

       




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Going Partisan: Presidential Leadership in a Polarized Political Environment

Brandon Rottinghaus articulates and finds support for an alternative strategy to the “going public” presidential leadership tactic. With the United States currently experiencing a hyper-polarized political environment, he argues that the president’s goal in “going partisan” is to directly mobilize local partisans and leaning partisans and indirectly engender greater party support of the president’s party within Congress. Ultimately there is a tradeoff with this strategy: while big losses are avoided and presidents can maintain a defensive position by keeping a minimum amount of opposition unified around the White House’s agenda, the fact remains that fewer substantial policy innovations or major agenda items are likely to be initiated or maintained.  

      
 
 




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What Will Be Bernanke’s Political Legacy?

As Ben Bernanke finishes his term as chairman of the Federal Reserve, Sarah Binder reflects on Bernanke's political legacy, and how he contributed to the Fed's standing in America's political system.

      
 
 




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Political Takeaways From the Federal Reserve Transcripts


The Federal Reserve last week released transcripts of Federal Open Market Committee (FOMC) meetings that took place in 2008 amidst a worsening global financial crisis. Sarah Binder describes what was found amongst the transcripts. Alongside financial and economic crises facing the Fed that year, the Fed faced a crisis as a political institution.  

      
 
 




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It’s the Family, Stupid? Not Quite…How Traditional Gender Roles Do Not Affect Women’s Political Ambition

In April of 2014, media outlets speculated whether Hillary Clinton’s future grandchild would impact her potential presidential campaign in 2016. Jennifer Lawless addresses the question of whether family roles and responsibilities affect a potential candidate’s political career. Lawless analyzes both female and male candidates and finds that traditional roles and responsibilities have little influence on candidates’ decision to run for office. 

      
 
 




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Footloose and Fancy Free: A Field Survey of Walkable Urban Places in the Top 30 U.S. Metropolitan Areas

Introduction

The post-World War II era has witnessed the nearly exclusive building of low density suburbia, here termed “drivable sub-urban” development, as the American metropolitan built environment. However, over the past 15 years, there has been a gradual shift in how Americans have created their built environment (defined as the real estate, which is generally privately owned, and the infrastructure that supports real estate, majority publicly owned), as demonstrated by the success of the many downtown revitalizations, new urbanism, and transit-oriented development. This has been the result of the re-introduction and expansion of higher density “walkable urban” places. This new trend is the focus of the recently published book, The Option of Urbanism: Investing in a New American Dream (Island Press, November 2007).

This field survey attempts to identify the number and location of “regional-serving” walkable urban places in the 30 largest metropolitan areas in the U.S., where 138 million, or 46 percent, of the U.S. population lives. This field survey determines where these walkable urban places are most prevalent on a per capita basis, where they are generally located within the metro area, and the extent to which rail transit service is associated with walkable urban development.

The first section defines the key concepts used in the survey, providing relevant background information for those who have not read The Option of Urbanism. The second section outlines the methodology. The third section, which is the heart of the report, outlines the findings and conclusions of the survey.

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Decreasing Demand for Suburbs on the Metropolitan Fringe


Drive through any number of outer-ring suburbs in America, and you’ll see boarded-up and vacant strip malls, surrounded by vast seas of empty parking spaces. These forlorn monuments to the real estate crash are not going to come back to life, even when the economy recovers. And that’s because the demand for the housing that once supported commercial activity in many exurbs isn’t coming back, either.

By now, nearly five years after the housing crash, most Americans understand that a mortgage meltdown was the catalyst for the Great Recession, facilitated by underregulation of finance and reckless risk-taking. Less understood is the divergence between center cities and inner-ring suburbs on one hand, and the suburban fringe on the other.

It was predominantly the collapse of the car-dependent suburban fringe that caused the mortgage collapse.

In the late 1990s, high-end outer suburbs contained most of the expensive housing in the United States, as measured by price per square foot, according to data I analyzed from the Zillow real estate database. Today, the most expensive housing is in the high-density, pedestrian-friendly neighborhoods of the center city and inner suburbs. Some of the most expensive neighborhoods in their metropolitan areas are Capitol Hill in Seattle; Virginia Highland in Atlanta; German Village in Columbus, Ohio, and Logan Circle in Washington. Considered slums as recently as 30 years ago, they have been transformed by gentrification.

Simply put, there has been a profound structural shift — a reversal of what took place in the 1950s, when drivable suburbs boomed and flourished as center cities emptied and withered.

The shift is durable and lasting because of a major demographic event: the convergence of the two largest generations in American history, the baby boomers (born between 1946 and 1964) and the millennials (born between 1979 and 1996), which today represent half of the total population.

Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town, according to a recent survey by the National Association of Realtors.

The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.

Over all, only 12 percent of future homebuyers want the drivable suburban-fringe houses that are in such oversupply, according to the Realtors survey. This lack of demand all but guarantees continued price declines. Boomers selling their fringe housing will only add to the glut. Nothing the federal government can do will reverse this.

Many drivable-fringe house prices are now below replacement value, meaning the land under the house has no value and the sticks and bricks are worth less than they would cost to replace. This means there is no financial incentive to maintain the house; the next dollar invested will not be recouped upon resale. Many of these houses will be converted to rentals, which are rarely as well maintained as owner-occupied housing. Add the fact that the houses were built with cheap materials and methods to begin with, and you see why many fringe suburbs are turning into slums, with abandoned housing and rising crime.

The good news is that there is great pent-up demand for walkable, centrally located neighborhoods in cities like Portland, Denver, Philadelphia and Chattanooga, Tenn. The transformation of suburbia can be seen in places like Arlington County, Va., Bellevue, Wash., and Pasadena, Calif., where strip malls have been bulldozed and replaced by higher-density mixed-use developments with good transit connections.

Reinvesting in America’s built environment — which makes up a third of the country’s assets — and reviving the construction trades are vital for lifting our economic growth rate. (Disclosure: I am the president of Locus, a coalition of real estate developers and investors and a project of Smart Growth America, which supports walkable neighborhoods and transit-oriented development.)

Some critics will say that investment in the built environment risks repeating the mistake that caused the recession in the first place. That reasoning is as faulty as saying that technology should have been neglected after the dot-com bust, which precipitated the 2001 recession.

The cities and inner-ring suburbs that will be the foundation of the recovery require significant investment at a time of government retrenchment. Bus and light-rail systems, bike lanes and pedestrian improvements — what traffic engineers dismissively call “alternative transportation” — are vital. So is the repair of infrastructure like roads and bridges. Places as diverse as Los Angeles, Phoenix, Salt Lake City, Dallas, Charlotte, Denver and Washington have recently voted to pay for “alternative transportation,” mindful of the dividends to be reaped. As Congress works to reauthorize highway and transit legislation, it must give metropolitan areas greater flexibility for financing transportation, rather than mandating that the vast bulk of the money can be used only for roads.

For too long, we over-invested in the wrong places. Those retail centers and subdivisions will never be worth what they cost to build. We have to stop throwing good money after bad. It is time to instead build what the market wants: mixed-income, walkable cities and suburbs that will support the knowledge economy, promote environmental sustainability and create jobs.

Publication: The New York Times
Image Source: © Frank Polich / Reuters
      
 
 




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Walk this Way:The Economic Promise of Walkable Places in Metropolitan Washington, D.C.


An economic analysis of a sample of neighborhoods in the Washington, D.C. metropolitan area using walkability measures finds that:

  • More walkable places perform better economically. For neighborhoods within metropolitan Washington, as the number of environmental features that facilitate walkability and attract pedestrians increase, so do office, residential, and retail rents, retail revenues, and for-sale residential values.

  • Walkable places benefit from being near other walkable places. On average, walkable neighborhoods in metropolitan Washington that cluster and form walkable districts exhibit higher rents and home values than stand-alone walkable places.

  • Residents of more walkable places have lower transportation costs and higher transit access, but also higher housing costs. Residents of more walkable neighborhoods in metropolitan Washington generally spend around 12 percent of their income on transportation and 30 percent on housing. In comparison, residents of places with fewer environmental features that encourage walkability spend around 15 percent on transportation and 18 percent on housing.

  • Residents of places with poor walkability are generally less affluent and have lower educational attainment than places with good walkability. Places with more walkability features have also become more gentrified over the past decade. However, there is no significant difference in terms of transit access to jobs between poor and good walkable places.

The findings of this study offer useful insights for a diverse set of interests. Lenders, for example, should find cause to integrate walkability into their underwriting standards. Developers and investors should consider walkability when assessing prospects for the region and acquiring property. Local and regional planning agencies should incorporate assessments of walkability into their strategic economic development plans and eliminate barriers to walkable development. Finally, private foundations and government agencies that provide funding to further sustainability practices should consider walkability (especially as it relates to social equity) when allocating funds and incorporate such measures into their accountability standards.

The Great Recession highlighted the need to change the prevailing real estate development paradigm, particularly in housing. High-risk financial products and practices, “teaser” underwriting terms, steadily low-interest rates, and speculation in housing were some of the most significant contributors to the housing bubble and burst that catalyzed the recession. But an oversupply of residential housing also fueled the economic crisis.

However, a closer look at the post-recession housing numbers paints a more nuanced picture. While U.S. home values dropped steadily between 2008 and 2011, distant suburbs experienced the starkest price decreases while more close-in neighborhoods either held steady or in some cases saw price increases. This distinction in housing proximity is particularly important since it appears that the United States may be at the beginning of a structural real estate market shift. Emerging evidence points to a preference for mixed-use, compact, amenity-rich, transit-accessible neighborhoods or walkable places.

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Image Source: Kevin Lamarque / Reuters