No. We should exempt workers earning the lowest wages.

Social Security faces a serious funding problem. The program takes in too little money to pay all that has been promised to future beneficiaries. Government forecasters predict Social Security’s reserve fund will be depleted between 2030 and 2034. There are two basic ways we can eliminate the funding gap: cut benefits or increase contributions. A common proposal is to increase the age at which workers can claim full retirement benefits. For people nearing retirement today, the full retirement age is 66. As a result of a 1983 law, that age will rise to 67 for workers born after 1959.

When policymakers urge us to raise the retirement age, they are proposing to increase the full retirement age beyond 67, possibly to 70, for workers now in their 30s or 40s. This saves money, but it also cuts monthly retirement benefits by the same percentage for every worker, unless workers delay claiming benefits. The policy might seem fair if workers in future generations could all expect to share in gains in life expectancy. However, new research shows that gains in life expectancy have been very unequal, with the biggest improvements among workers who earn top incomes. Life expectancy gains for workers with the lowest incomes have been small or negligible.

If the full retirement age were raised, future retirees with high lifetime earnings can expect to receive some compensation when their monthly benefits are cut. Because they can expect to live longer than today’s retirees, they will receive benefits for a longer span of years after 65. For low-wage workers, there is no compensation. Since they are not living longer, their lifetime benefits will fall by the same proportion as their monthly benefits. Thus, “raising the retirement age” is a policy that cuts the lifetime benefits of future low-wage workers by a bigger percentage than it does of future high-wage workers.

The fact that low-wage workers have seen small or negligible gains in life expectancy signals that their health when they are past 60 is no better than that of low-wage workers born 20 or 30 years ago. This suggests their capacity to work past 60 is no better than it was for past generations. A sensible policy for cutting future benefits should therefore preserve current benefit levels for workers who have contributed to Social Security for many years but have earned low wages.

Editor's note: This piece originally appeared in CQ Researcher.

It’s time to spend less money on health care for older Americans. There, I’ve said it. But I’m not saying this because I’m some self-centered millennial – I’m turning 69 this summer. I’m saying it because, for older Americans especially, our health system has become a giant, expensive repair shop. It’s not a set of programs and supports to help us age the best way we can – mentally as well as physically.

Here’s what I mean. Thanks to American physicians’ training and financial incentives, the first thing most doctors will ask an elderly patient is “What’s the matter with you?” not “What matters to you?” In other words, they focus on the ailments they can try to fix with expensive technology, surgery or drugs, rather than ask what is important to you and how can they help enhance the quality of your life. 

If you do have a medical problem, it is not always best to concentrate exclusively on fixing it. Sometimes it is better to avoid “cures” that have severe side-effects that can reduce your quality of life. And sometimes the physician should really be calling a local social service agency or volunteer organization to figure out how you can continue living close to your friends of all ages, rather than steering you to a well-equipped nursing home that only houses seniors.

It’s not that physicians are bad people. It’s that for multiple reasons we tend to “over medicalize” aging in America by focusing too much on repairing people and not enough on preventive actions or maintenance care. For instance, Medicare and also Medicaid (for which low-income seniors qualify) will spend tens of thousands of dollars to repair a hip fracture, or to cover the cost of nursing home care. But there are few public resources available to modify a home to reduce the likelihood of ever having a fall, such as by replacing a bathtub with a walk-in shower. 

One reason for this pattern is our tendency as Americans to want to throw money at fixing problems once they become crises rather than to take prudent steps earlier to avoid the problem. Some would say that explains many of our foreign policy mishaps. It certainly explains our infrastructure problems, from poisoned water in Flint, Michigan, to deteriorating bridges on our interstates. 

But there’s another key reason. Unlike most other major countries, we spend a lot on medical care and proportionately much less on a range of other services, from transportation and in-home care to nutrition assistance – ongoing services that can both improve quality of life and reduce the likelihood of later medical problems. Other industrialized countries spend an average of roughly $2 in social services for every $1 on health care. We spend about 90 cents per health dollar. Sure, we can do medical wonders, but for many older Americans the balance is wrong. Too much expensive surgery and drug therapy. Too little on making aging easier and safer.

So what can we do to focus more on “what matters?” rather than on “what’s the matter?”

For starters we can encourage physicians and hospitals that look beyond their office walls at the things needed for a better life. The Affordable Care Act – or Obamacare – did take a step in this direction by penalizing hospitals if certain elderly discharged patients are readmitted within 30 days. The result? Hospitals are starting to look at improving the home safety of elderly patients rather than functioning simply as a repair shop. That could mean fewer falls and other incidents resulting in calls to 911.

We also need to encourage physicians to spend more time talking with older patients about their life goals and planning for possible health setbacks, just as prudent Americans talk to planners about their financial future. Medicare is helping this by now paying physicians for conversations about end-of-life planning. But Medicare and private insurance ought to cover time spent in much broader conversations about patients’ goals in aging. Perhaps even more important, medical schools need to provide much better training for physicians on how to conduct those conversations – today few physicians do that well.

The other step needed is to give government agencies and programs much greater leeway to “braid” together health, housing, social service and other funds so that we can age more safely – and happily – in our community. If we did that, we’d likely end up spending much less on medical procedures and much more on other things that actually improve physical and mental health. 

In this election year, those are “Medicare cuts” all seniors should embrace.

Editor's note: This piece originally appeared in Inside Sources.

Much public focus is being given to a broader role for hospitals in improving the health of their communities. This focus parallels a growing interest in addressing the social determinants of health as well as health care policy reforms designed to increase the efficiency and quality of care while improving health outcomes.

This interest in the community role of hospitals has drawn attention to the federal legal standards and requirements for nonprofit hospitals seeking federal tax exemption. Tax-exempt hospitals are required to provide community benefits. And while financial assistance to patients unable to pay for care is a basic requirement of tax-exemption, IRS guidelines define the concept of community benefit to include a range of community health improvement efforts.

At the same time, the IRS draws a distinction between community health improvement spending–which it automatically considers a community benefit–and certain “community-building” activities where additional information is required in order to be compliant with IRS rules. In addition, community benefit obligations are included in the Affordable Care Act (ACA).

Specifically, the ACA requires nonprofit hospitals periodically to complete a community health needs assessment (CHNA), which means the hospital must conduct a review of health conditions in its community and develop a plan to address concerns. While these requirements are causing hospitals to look more closely at their role in the community, challenges remain. For instance, complex language in the rules can mean hospitals are unclear what activities and expenditures count as a “community benefit.” Hospitals must take additional steps in order to report community building as community health improvement.

These policies can discourage creative approaches. Moreover, transparency rules and competing hospital priorities can also weaken hospital-community partnerships. To encourage more effective partnerships in community investments by nonprofit hospitals:

• The IRS needs to clarify the relationship between community spending and the requirements of the CHNA. 
• There needs to be greater transparency in the implementation strategy phase of the CHNA. 
• The IRS needs to broaden the definition of community health improvement to encourage innovation and upstream investment by hospitals.

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Editor's note: On March 16, Paul B. Ginsburg testified before the California Senate Committee on Health on fostering competition in consolidated markets. Download the full testimony here.

Mr. Chairman, Madame Vice Chairman and Members of the Committee, I am honored to be invited to testify before this committee on this very important topic. I am a professor of health policy at the University of Southern California and director of public policy at the USC Schaeffer Center for Health Policy and Economics. I am also a Senior Fellow and the Leonard D. Schaeffer Chair in Health Policy Studies at The Brookings Institution, where I direct the Center for Health Policy. Much of my time is now devoted to leading the new Schaeffer Initiative for Innovation in Health Policy, which is a partnership between USC and the Brookings Institution. I am best known in California for the numerous community site visits over many years that I led in the state while I was president of the Center for Studying Health System Change; most of those studies were funded by the California HealthCare Foundation.

The key points in my testimony today are:

• Health care markets are becoming more consolidated, causing price increases for purchasers of health services, and this trend will continue for the foreseeable future despite anti-trust enforcement; 
• Government can still play an effective role in addressing higher prices that come from consolidation by pursuing policies that foster increased competition in health care markets. Many of these policies can be effective even in markets with high degrees of concentration, such as in Northern California.

[1] Gaynor, M., and R. Town, The Impact of Hospital Consolidation – Update, Robert Wood Johnson Foundation Synthesis Report (June 2012).

[2] Baker, L. C., M.K Bundorf and D.P. Kessler, “Vertical Integration: Hospital Ownership Of Physician Practices Is Associated With Higher Prices And Spending,” Health Affairs, Vol. 35, No 5 (May 2014).

[3] Chapin White and Megan Egouchi, Reference Pricing: A Small Piece of the Health Care Pricing and Quality Puzzle. National Institute for Health Care Reform, Research Brief No. 18, October 2014.

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Given the lackluster healthcare exchange enrollment numbers, unaffordable coverage, and increasing overall healthcare costs, President Obama is wrong to think the Affordable Care Act (ACA) needs just a few tweaks – its most fundamental aspects need to be rethought. Obama’s essay marks the first time a modern sitting president has had a piece published in the journal.

Much of the progress made under the ACA expanding healthcare coverage to the uninsured has been thanks to increased enrollment in Medicaid -- not the exchanges -- a harbinger of even less progress to come.  Secretary of Health and Human Services Sylvia Burwell sharply adjusted down projections of new exchange enrollees in 2016 to 1.3 million. Furthermore, the Congressional Budget Office (CBO) has estimated that over the next decade, as the population increases, coverage will expand only modestly and the proportion of the uninsured will cease to decline.

Six key areas in the ACA are flawed -- and need to be fixed if healthcare reform is to meet its promise and not have rampant cost problems:

1. Subsidies still leave plans too expensive. Congress must continue income-related subsidies while making coverage affordable to both households and taxpayers, which is “no easy task” because it could drive up costs of the ACA considerably.
2. The Cadillac tax needs to be fixed. While better than nothing, it doesn’t confront the underlying problem of health insurance being tax deductible, which is regressive and inefficient. One suggestion is a modification of the Cadillac tax that makes any excess plan costs above a cap be considered taxable income to the employee, as opposed to an excise tax.
3. Increase federalism in the healthcare system. States should apply for waivers under Section 1332, which takes effect in 2017 and gives states flexibility to meet the law’s goals while retaining its basic protections. The Administration has made a serious mistake in dragging its feet and acting overly restrictively with states who could launch their own bold and far-reaching experiments, as it has itself in encouraging conservative states to expand Medicaid under the ACA.
4. The exchanges need to be the primary vehicle for health insurance – not Medicaid expansion. Equalizing the subsidy structure for exchange plans and the tax treatment of employer-sponsored benefits, more employees would go on the exchanges which gives them greater choice and portability.
5. Replace the Independent Payment Advisory Board with a premium support system for Medicare. Premium support would enforce a long-term budget for Medicare by allowing greater control of the beneficiaries themselves, as opposed to imposing payment and price controls; it would also accelerate innovation in the design and pricing of Medicare services.
6. The ACA should focus more on the “upstream” determinants of health – beyond just medical services. We need to find ways to blend health, housing, transportation, social services and other items to reduce the need for costly medical services, he writes.

If it were a separate economy, the US health system would be equivalent to the first or sixth largest economy in the world. It is both pragmatic and principled to recognize that achieving agreement on how to redesign an economy that large, or to do it successfully in 1 piece of legislation, is beyond the capabilities of the federal government. That is why core parts of the ACA need to be reassessed and revised and why empowering the US system of federalism to adapt and experiment with this law is so important.

Read "The Future of the Affordable Care Act: Reassessment and Revision."

On April 10th and 11th, the heads of state and government from nearly every state in the Americas will meet in Panama City for the Seventh Summit of the Americas. The leaders present in Panama preside over a region that has advanced far and fast on key political and economic indicators since the first of these meetings was held in Miami in 1994. At the Miami Summit, the legacy of the Cold War was very much present, and the specter of war, military dictatorship, armed revolution, financial crises, and political instability still hung in the air. 

In 2015, the region is by and large more democratic, economically prosperous, free from war, and the last insurgency in the region—Colombia’s—is winding down as peace is discussed between the government and its opponents at talks hosted by Havana. The beginning of a rapprochement between the United States and Cuba in December 2014 broke down one of the last remaining obstacles to an event that is truly inclusive of every country in the Western Hemisphere. 

In comparison to the rest of the world—where in the past year we have witnessed terrorist attacks in Paris, war in Ukraine, insurgency in Yemen, and saber-rattling around the South China Sea—the Western Hemisphere appears to be relatively better off. While there are a small number of countries that face challenging circumstances, especially among the fragile states of the Caribbean basin, these problems mostly threaten local rather than regional order. Given this picture, what lessons can we learn from the Western Hemisphere, and from U.S. policy towards the region, as we contemplate how best to improve global order?

Drawing the right lessons from history

The Americas have a long history of developing regional norms that promote the peaceful resolution of conflicts. Since the founding of the Panamerican Union in 1890, which transformed into the Organization of American States (OAS) in 1948, the countries of the hemisphere have embedded these norms of peace into their multilateral institutions. While frequently criticized, it is important to remember that the OAS has presided over the elimination of inter-state conflict in the Americas. 

Today, Latin American states resolve territorial disputes at the International Court of Justice rather than on the battlefield. The last war in the region, between Peru and Ecuador in 1995, occurred two decades ago. Given how rare militarized disputes are at home, Latin American soldiers frequently serve as peacekeepers in United Nations missions around the world. Latin Americans have become good at peacemaking and peacekeeping, something that other regions of the world would do well to emulate.

When it comes to domestic politics, most leaders in the region now understand the political and economic principles that contribute to stability. Governments have become much better about economic governance, which means that as South America’s economy cools off this year, fiscal problems will be manageable and localized rather than region-wide and existential, a sharp contrast with the 1980s and 1990s. 

Leaders in the region have learned that promoting polarization for short-term political advantage is all too likely to produce instability, coups, and revolution. To minimize the risk that domestic political violence might reoccur in the future, states in the region have self-consciously examined the legacy of their authoritarian pasts, using innovative processes such as truth and reconciliation commissions—initially in Argentina in 1983—but also drawing on traditional courts to prosecute perpetrators of past abuses.  

In the 21st century, successful coups d’état have become rare, and when they do occur, as was the case in Honduras in 2009, the region collaborates to ensure a return to democracy. Here again is an area where Latin America has led the way through policies that reduce the likelihood of domestic conflicts that threaten internal stability or global order.

The importance of revisiting unworkable U.S. policies 

At this Summit in Panama, President Barack Obama will be able to credibly claim that he has listened to his Latin American counterparts and has begun to change policies that had become obstacles to improving regional order. At the 2009 and 2012 Summits (they occur every three years), U.S. policies on drugs, immigration, and Cuba had made President Obama the target of growing criticism from other leaders. In fact, many governments had made it clear that they would not attend the 2015 Summit if Cuba was not invited. 

Since 2012, the Obama administration has taken steps to address these concerns. It has taken executive action to reform immigration policy, signaled greater openness to drug policy liberalization by states such as Uruguay, and initiated a historic normalization of relations with Cuba. In each of these areas, the United States has shifted from policies that were largely unilateral towards its neighbors to policies that emphasize collaboration and partnership. This reflects U.S. learning that unilateralism produces blowback, strengthens its political adversaries in the region, and undermines its interests in the long run. This is a lesson worth considering as we think about our policies towards troubled regions of the world.

The risk of forgetting lessons learned

Yet not all countries and all politicians have remembered these lessons, and some of them have learned the wrong ones. In Argentina, macroeconomic stability is at risk due to a feud between the government and its international creditors. The result is a country cut off from international capital markets at a time when its economy is suffering the effect of declining commodity prices. Venezuela faces a deep crisis that has at its heart the highly polarizing politics practiced by the governing party and an unreasoning attachment to an unworkable economic model. Key countries such as Brazil have lost interest in hemisphere-wide institutions, as indicated by their refusal to appoint an ambassador to the OAS or pay their membership dues. And the region as a whole has become so attached to multilateralism and politics by consensus that is has forgotten how to work together when individual member states deviate from regional norms of democracy and human rights, as is occurring today in Venezuela.

So while the recent history of the Americas offers insights into policies that contribute to a peaceful and stable regional order, it also illustrates that these achievements are not irreversible. Let us hope that future generations do not have the relearn these lessons anew. At this and future Summits, there must be a commitment to preserving the gains made in peace, democracy, human rights, and economic prosperity, but also a new emphasis on developing workable mechanisms to address deviations from the norms and practices that have contributed to making the Americas a relative safe and orderly region of the world.

For more information, check out Emily Miller's post on U.S. priorities at the Seventh Summit of the Americas.

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

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Show notes:

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

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

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

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

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

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

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

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

3. …but the political victory is perhaps more important

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

Event Information

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

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

Join the conversation on Twitter at #DetroitResurgence

Photos

Amy Liu opens the program

Rip Rapson gives remarks

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

Video

• Welcome and Presentation
• Panel

Audio

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

Gasoline purchases are an essential part of the American way of life. There were about 250 million motor vehicles in the United States in 2008 – just under a vehicle per person. Americans drive an average of more than 11,000 miles per year and gasoline purchases are an essential part of most households’ budgets. Between 1995 and 2003, gasoline prices in the U.S. averaged about $1.49 a gallon, with average prices rising above $2.00 in 2004. By the summer of 2008, gasoline prices had reached a national average of $4.11 per gallon. At that time, Americans earning less than $15,000 a year were spending as much as 15 percent of their household income on gasoline – double the proportion from seven years earlier. In addition, unpredictable fuel costs make planning monthly household expenditures difficult, which can be detrimental to individual welfare and even to the overall economy.

Gasoline prices fell in the aftermath of the 2009 economic crisis. Prior and during the financial crisis, rising gasoline prices were seen as a symptom of an uncertain economic situation, as well as evidence of the questionable sustainability of our future oil supply. Gasoline prices abated along with the decrease of economic activity that accompanied the onset of the recession, reaching their minimum in late December 2008. A few months later, as the economy entered a gradual recovery phase, gasoline prices also trended upward. In contrast to the previous period of great uncertainty about future oil supplies, however, these price trends were considered more positively as signs of the U.S. economic recovery.

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

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

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

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

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

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

Read other responses to this question at zocalopublicsquare.org »

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

Access to information and communication technology through cell phones, the internet, and electronic media has increased exponentially around the world. While a few decades ago cell phones were a luxury good in wealthy countries, our data show that today over half of respondents in Sub-Saharan Africa and about 80 percent of those in Latin America and Southeast Asia have access to cell phones. In addition to making phone calls and text messaging, cell phones are used for activities such as accessing the internet and social network sites. Meanwhile, the launch of mobile banking gives access to these technologies an entirely new dimension, providing access to financial services in addition to information and communication technology. It is estimated that in Kenya, where the mobile banking “revolution” originated, there are some 18 million mobile money users (roughly 75 percent of all adults). Given the expanding role of information technology in today’s global economy, in this paper we explore whether this new access also enhances well-being.

Neither of the authors is an expert on information technology. The real and potential effect of information technology on productivity, development, and other economic outcomes has been studied extensively by those who are. Building on past research on the economics of well-being and on the application of the well-being metrics to this particular question, we hope to contribute an understanding of how the changes brought about by information and communication technology affect well-being in general, including its non-income dimensions.

Our study has two related objectives. The first is to understand the effects of the worldwide increase in communications capacity and access to information technology on human well-being. The second is to contribute to our more general understanding of the relationship between well-being and capabilities and agency. Cell phones and information technology are giving people around the world – and particularly the poor – new capabilities for making financial transactions and accessing other services which were previously unavailable to them. We explore the extent to which the agency effect of having access to these capabilities manifests itself through both hedonic and evaluative aspects of well-being.

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"Happiness." "Contentment." "Subjective well-being." Can we measure how happy people are and if so, what can we do with this information? In this podcast, Carol Graham, the Leo Pasvolsky Senior Fellow and author of The Pursuit of Happiness: An Economy of Well-Being, explains how happiness/well-being research works and why it matters for public policy in the U.S. and globally.

In the podcast, Graham explains two dimensions of understanding well-being, the "Benthamite/hedonic" and the "Aristotelian/eudemonic." She explained them in this earlier publication:

Those of us involved focus on two distinct dimensions: hedonic well-being, a daily experience component; and evaluative well-being, the way in which people think about their lives as a whole, including purpose or meaning. Jeremy Bentham focused on the former and proposed increasing the happiness and contentment of the greatest number of individuals possible in a society as the goal of public policy. Aristotle, meanwhile, thought of happiness as eudemonia, a concept that combined two Greek words: "eu" meaning abundance and "daimon" meaning the power controlling an individual’s destiny.

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Show notes:

• "Why Aging and Working Makes us Happy in 4 Charts," Carol Graham
• Happiness Around the World, Carol Graham
• "The Decade of Public Protest and Frustration with Lack of Social Mobility," Carol Graham
• "Evidence for a midlife crisis in great apes consistent with the U-shape in human well-being," Andrew Oswald and others
• "You Can’t Be Happier than Your Wife: Happiness Gaps and Divorce," Cahit Guven and others
• Aristotle's definition of happiness
• The life of philosopher Jeremy Bentham
• Gallup World Poll

See more charts like this in Carol Graham's newest post on the relationship among work, age and happiness.

In "Why Aging and Working Makes us Happy in 4 Charts," Carol Graham describes a research paper in which she and co-author Milena Nikolova examine determinants of subjective well-being beyond traditional income measures. One of these is the relationship between age and happiness, a chart of which resembles, remarkably, a smile.

As Graham notes:

There is a U-shaped curve, with the low point in happiness being at roughly age 40 around the world, with some modest differences across countries. It seems that our veneration of (or for some of us, nostalgia, for) youth as the happiest times of our lives is overblown, the middle age years are, well, as expected, and then things get better as we age, as long as we are reasonably healthy (age-adjusted) and in a stable partnership.

The new post has three additional charts that showcase other ways to think about factors of happiness.

Editor’s Note: Admission rates this year are at an all-time low, while anxiety about the college admission process remains high. Carol Graham and Michael O’Hanlon write that an Ivy League degree does not necessarily determine happiness or success.

This year's college admission process in the United States was by most measures tougher than ever. Only about 5 percent of applicants were accepted at Stanford and many admission rates at other schools were comparably daunting. Meanwhile, our nation's teenagers are exposed to a background of noise about America's supposed economic decline, which would seem only to increase the pressure to get a head start on that declining pool of available high-paying and highly satisfying careers. In the Washington, D.C. area, this sense of malaise was compounded this year by a spate of suicides at a prestigious local high school, with the common thread reportedly being a sense of anxiety about the future among the teenagers.

Of course, some of this story is timeless, and reflects the inevitable challenges of growing up in a competitive society. But much of it is over-hyped or simply wrong. We need to help our college-bound teenagers maintain a sense of perspective and calm as they face what is among life's most exciting but also most stressful periods. As two proud Princeton grads, we recognize the value of a high-quality education and the social and professional networks that come with an Ivy League degree. But we also know from intuition and experience that a similar kind of experience is achievable in many, many other places in our country, fielding as it does the best ecosystem of higher education institutions in the history of the planet. And increasingly, there is a strong body of research to back this claim up.

Higher Education Is Important

First, though, it is worth noting one incontrovertible fact: higher education is important. Sure, there can be exceptions, and some people may not have the opportunity at a given point in life to pursue either a two-year or four-year college degree or graduate education. But it is a reality in America's modern economy, due to trends with globalization and automation. Those with college degrees continue to do better than previous generations in this country; those without have seen their incomes stagnate or even decline on average for a generation now, as our colleague Belle Sawhill has shown. Another Brookings colleague, Richard Reeves, cites evidence that college graduates have higher marriage rates, higher wages, better health, greater job security, more interesting work and greater personal autonomy.

However, where you go to college matters less than if you go, by any number of measures. This is not to say it is unimportant. But whether you are interested in happiness while in college, satisfaction later in life or even raw monetary income, the correlation between gaining a Harvard degree and achieving nirvana is less than many 18-year-olds may be led to believe.

Begin with the question of happiness--a new and scientifically measurable arena of social science. It turns out you can learn a lot about how happy people are by asking them, and then applying common-sense statistical methods to a pool of data. For one of us, this has been the focus of research for over a decade. While money matters to happiness, after a certain point more money does not increase many dimensions of well-being (such as how people experience their daily lives), and in general, it is less important than good health or fulfillment at the workplace, on the home-front and in the community. Happier people, meanwhile, tend to care less about income but are more likely to value learning and creativity. And they are also likely to have more positive outlooks about their own futures, outlooks which in turn lead to better labor market and health outcomes on average.

An Atmosphere For Success

Yale or Amherst graduates are no more likely to find happiness than those who attended less prestigious schools. A new Gallup poll, inspired largely by Purdue president Mitch Daniels, finds that the most important enduring effects of the college experience on human happiness relate to personal bonds with professors and a sense of ongoing intellectual curiosity, not to GPA or GRE scores.

America can provide this kind of stimulation and this kind of experience at thousands of its institutions of higher learning. To be sure, elite universities, with their higher percentage of dedicated and outstanding students, create an atmosphere that can be more motivating. Yet it can also be much more stressful. Students at somewhat less notable institutions may need a bit more self-motivation to excel in certain cases, but they may also find professors who are every bit as committed to their education as any Ivy Leaguer and perhaps more available on average.

It is true that networks of fellow alums from the nation's great universities are often hugely helpful to one's career prospects. But a surprising number of institutions in our country have such networks of committed graduates, professors and other patrons. And while Harvard grads may be a dime a dozen in a place like D.C., those hailing from somewhat less known or prestigious places arguably watch out for each other even more, compensating to a large extent for their smaller numbers.

Even on the narrower subject of financial success, the issue is not cut and dried. Sure, the big and prestigious universities tend to be richer, and their graduates on average make more money. But much of that is because the more motivated and gifted students tend to choose the elite schools in the first place, driving up the average regardless of the quality of education. For the 18-year-old who was just turned down by his or her top couple of college choices and having to settle for a "safety" school, it is not clear that this turn of fate really matters for long-term financial prospects. Assuming comparable degrees of drive and motivation, students appear to do just as well elsewhere. In 2004, Mathematica economist Stacy Dale compared students who willfully went to less prestigious schools with their cohorts at the most prestigious universities and showed little discernible income differential.

America is blessed by a wonderful new generation of young people; as parents of five of them, we see this every day. Maybe those of us who have been through some of life's ups and downs need to work harder to help them take down the collective stress level a notch or two. No graduating child should be unhappy because they are going to their second or third choice of college next fall. With the right attitude and encouragement, they will likely do well—and be happy—wherever they go.

One of global society’s foremost structural changes underway is its rapid aggregate shift from farmbased to city-based economies. More than half of humanity now lives in urban areas, and more than two-thirds of the world’s economies have a majority of their population living in urban settings. Much of the gradual movement from rural to urban areas is driven by long-term forces of economic progress. But one corresponding downside is that city-based societies become increasingly disconnected—certainly physically, and likely psychologically—from the practicalities of rural livelihoods, especially agriculture, the crucial economic sector that provides food to fuel humanity.

The nature of agriculture is especially important when considering the tantalizingly imminent prospect of eliminating extreme poverty within a generation. The majority of the world’s extremely poor people still live in rural areas, where farming is likely to play a central role in boosting average incomes. Agriculture is similarly important when considering environmental challenges like protecting biodiversity and tackling climate change. For example, agriculture and shifts in land use are responsible for roughly a quarter of greenhouse gas emissions.

As a single word, the concept of “agriculture” encompasses a remarkably diverse set of circumstances. It can be defined very simply, as at dictionary.com, as “the science or occupation of cultivating land and rearing crops and livestock.” But underneath that definition lies a vast array of landscape ecologies and climates in which different types of plant and animal species can grow. Focusing solely on crop species, each plant grows within a particular set of respective conditions. Some plants provide food—such as grains, fruits, or vegetables—that people or livestock can consume directly for metabolic energy. Other plants provide stimulants or medication that humans consume—such as coffee or Artemisia—but have no caloric value. Still others provide physical materials—like cotton or rubber—that provide valuable inputs to physical manufacturing.

One of the primary reasons why agriculture’s diversity is so important to understand is that it defines the possibilities, and limits, for the diffusion of relevant technologies. Some crops, like wheat, grow only in temperate areas, so relevant advances in breeding or plant productivity might be relatively easy to diffuse across similar agro-ecological environments but will not naturally transfer to tropical environments, where most of the world’s poor reside. Conversely, for example, rice originates in lowland tropical areas and it has historically been relatively easy to adopt farming technologies from one rice-growing region to another. But, again, its diffusion is limited by geography and climate. Meanwhile maize can grow in both temperate and tropical areas, but its unique germinating properties render it difficult to transfer seed technologies across geographies.

Given the centrality of agriculture in many crucial global challenges, including the internationally agreed Sustainable Development Goals recently established for 2030, it is worth unpacking the topic empirically to describe what the term actually means today. This short paper does so with a focus on developing country crops, answering five basic questions: 

1. What types of crops does each country grow? 

2. Which cereals are most prominent in each country? 

3. Which non-cereal crops are most prominent in each country? 

4. How common are “cash crops” in each country? 

5. How has area harvested been changing recently? 

Readers should note that the following assessments of crop prominence are measured by area harvested, and therefore do not capture each crop’s underlying level of productivity or overarching importance within an economy. For example, a local cereal crop might be worth only $200 per ton of output in a country, but average yields might vary across a spectrum from around 1 to 6 tons per hectare (or even higher). Meanwhile, an export-oriented cash crop like coffee might be worth $2,000 per ton, with potential yields ranging from roughly half a ton to 3 or more tons per hectare. Thus the extent of area harvested forms only one of many variables required for a thorough understanding of local agricultural systems. 

The underlying analysis for this paper was originally conducted for a related book chapter on “Agriculture’s role in ending extreme poverty” (McArthur, 2015). That chapter addresses similar questions for a subset of 61 countries still estimated to be struggling with extreme poverty challenges as of 2011. Here we present data for a broader set of 140 developing countries. All tables are also available online for download.

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The year 2015 was a big one for global development policy debates, marking the end of the Millennium Development Goals (MDGs) and the launch of the new Sustainable Development Goals (SDGs), also known as the “Global Goals.” But how much did major media pay attention?

Last September, Christine Zhang and I published a working paper that examined mentions of the MDGs across major English-language press and academic outlets from 2000 through 2014. We blogged highlights from the original paper here. 

More recently, we updated some of the results to account for last year’s major MDG-SDG debates and events. Figure 1 adds 2015 newspaper data on the MDGs and also includes SDG mentions over the entire time period.

Figure 1: MDG and SDG mentions across 12 major newspapers, 2000-2015

Note: The 12 newspapers included are the Los Angeles Times (USA), The New York Times (USA), USA Today, and The Washington Post (USA), the Financial Times (UK), The Guardian (UK), The Independent (UK), The Daily Telegraph (UK), The Economist (UK), The Globe and Mail (Canada), the South China Morning Post (Hong Kong SAR), and The Sydney Morning Herald (Australia). Source: LexisNexis, authors’ calculations.

Here are three key takeaways from the new graph:

• First, by measure of article counts, 2015 was the second most prominent year for media coverage of the interlinked MDG-SDG agendas. But it only saw 62 percent as much coverage as the MDGs received in 2005, the year of the U.N. Millennium Project’s final report (January), the Gleneagles G-8 summit (July), and the U.N. World Summit (September). 

• Second, global summits have consistently helped to ramp up media attention and debate. The years 2005, 2008, 2010, and 2015 all stand out as the top years for references—the same years in which the U.N. convened major summits linked to the MDGs and, in 2015, the SDGs. But U.N. summits do not guarantee attention. Notably, the 2012 Rio+20 summit that initially called for the SDGs did not cause a big splash in the media outlets examined.

• Third, recent years saw a discernible transition from MDG references to SDG references. By 2015, fully 41 percent of the relevant articles referenced only the SDGs, 30 percent mentioned both the SDGs and the MDGs, while only 29 percent mentioned the MDGs alone. 

To be clear, these results do not provide a complete assessment of MDG-SDG media references in recent years, especially because social media and other new digital technologies now account for such a large share of public debate. (Note that the graph also excludes developing country newspapers, some of which we examined in the original working paper and similarly updated with 2015 results, but those do not make much difference to the overall story.) Thus one should not consider Figure 1 a definitive analysis of whether SDG advocates were successful in their public outreach campaigns last year.  From a research perspective, the simple new-ness of “new media” renders long-term comparisons difficult. Restricting the data sample to print media offers one way to benchmark apples-to-apples coverage across the period of interest back to 2000.

That said, a seasoned media observer once suggested to me that traditional news outlets are inherently less connected to the bottom-up nature of emerging SDG conversations, and hence less likely to cover the SDGs accurately than new media channels in which user-generated content helps to drive the conversation. It’s an interesting hypothesis worth testing. 

At a minimum, 2015 was a significant year for public conversations about the MDGs and SDGs, even if it might not have matched the peak year of 2005. An interesting line of research could seek to explain why.  In any case, for analysts of the new SDGs, more sophisticated forms of global media benchmarking will undoubtedly be in order through to the new deadline of 2030. 

In 2015 the international community agreed on a set of ambitious sustainable development goals (SDGs) for the global society, to be achieved by 2030. One of the lessons that the implementation of the Millennium Development Goals (MDG s) has highlighted is the importance of a systematic approach to identify and sequence development interventions—policies, programs, and projects—to achieve such goals at a meaningful scale. The Chinese approach to development, which consists of identifying a problem and long-term goal, testing alternative solutions, and then implementing those that are promising in a sustained manner, learning and adapting as one proceeds—Deng Xiaoping’s “crossing the river by feeling the stones”—is an approach that holds promise for successful achievement of the SDGs.

Having observed the Chinese way, then World Bank Group President James Wolfensohn in 2004, together with the Chinese government, convened a major international conference in Shanghai on scaling up successful development interventions, and in 2005 the World Bank Group (WBG ) published the results of the conference, including an assessment of the Chinese approach. (Moreno-Dodson 2005). Some ten years later, the WBG once again is addressing the question of how to support scaling up of successful development interventions, at a time when the challenge and opportunity of scaling up have become a widely recognized issue for many development institutions and experts.

Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.”

In parallel with the recognition that scaling up matters, the development community is now also focusing on social enterprises (SEs), a new set of actors falling between the traditionally recognized public and private sectors. We adopt here the World Bank’s definition of “social enterprises” as a social-mission-led organization that provides sustainable services to Base of the Pyramid (BoP) populations. This is broadly in line with other existing definitions for the sector and reflects the World Bank’s primary interest in social enterprises as a mechanism for supporting service delivery for the poor. Although social enterprises can adopt various organizational forms—business, nongovernmental organizations (NGOs), and community-based organizations are all forms commonly adopted by social enterprises—they differ from private providers principally by combining three features: operating with a social purpose, adhering to business principles, and aiming for financial sustainability. Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.” (Figure 1)

Figure 1. Role of SE sector in public service provision

Social enterprises often start at the initiative of a visionary entrepreneur who sees a significant social need, whether in education, health, sanitation, or microfinance, and who responds by developing an innovative way to address the perceived need, usually by setting up an NGO, or a for-profit enterprise. Social enterprises and their innovations generally start small. When successful, they face an important challenge: how to expand their operations and innovations to meet the social need at a larger scale. 

Development partner organizations—donors, for short—have recognized the contribution that social enterprises can make to find and implement innovative ways to meet the social service needs of people at the base of the pyramid, and they have started to explore how they can support social enterprises in responding to these needs at a meaningful scale. 

The purpose of this paper is to present a menu of approaches for addressing the challenge of scaling up social enterprise innovations, based on a review of the literature on scaling up and on social enterprises. The paper does not aim to offer specific recommendations for entrepreneurs or blueprints and guidelines for the development agencies. The range of settings, problems, and solutions is too wide to permit that. Rather, the paper provides an overview of ways to think about and approach the scaling up of social enterprise innovations. Where possible, the paper also refers to specific tools that can be helpful in implementing the proposed approaches. 

Note that we talk about scaling up social enterprise innovations, not about social enterprises. This is because it is the innovations and how they are scaled up that matter. An innovation may be scaled up by the social enterprise where it originated, by handoff to a public agency for implementation at a larger scale, or by other private enterprises, small or large. 

This paper is structured in three parts: Part I presents a general approach to scaling up development interventions. This helps establish basic definitions and concepts. Part II considers approaches for the scaling up of social enterprise innovations. Part III provides a summary of the main conclusions and lessons from experience. A postscript draws out implications for external aid donors. Examples from actual practice are used to exemplify the approaches and are summarized in Annex boxes.

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Quoting Walt Whitman in his speech to a joint meeting of Congress last week, Indian Prime Minister Narendra Modi declared: “there is a new symphony in play.” He was referring to the relationship, but there were some new themes in his speech as well, in addition to a few familiar, predictable ones.

The old

Shared Democratic Values. Modi’s speech covered some of the same ground on shared democratic values as his predecessors. Referring to Congress as a “temple of democracy”—a phrased he’s used in the past for the Indian parliament—and to India’s constitution as its “real holy book,” he stressed that freedom and equality were shared beliefs. In a section that elicited laughter, he also commented that the two countries shared certain practices—legislatures known for bipartisanship and operating harmoniously. Also par for the course was Modi’s emphasis on India’s diversity. An implicit response to critics of India on human rights (including minority rights), freedom of the press, and tolerance of dissent, Modi noted that India’s constitution protected the equal rights of all citizens and enshrined freedom of faith. Echoing former prime minister Atal Bihari Vajpayee’s words on unity in diversity, he asserted “India lives as one; India grows as one; India celebrates as one.” 

Terrorism. Like Vajpayee and Manmohan Singh before him, Modi highlighted the challenge of terrorism, stressing it was globally the “biggest threat.” Acknowledging existing India-U.S. counter-terrorism cooperation, he called for more, including an approach “that isolates those who harbor, support and sponsor terrorists; that does not distinguish between ‘good’ and ‘bad’ terrorists; and that delinks religion from terrorism.” Like his predecessors, Modi did not explicitly mention Pakistan, but alluded to it. He asserted that while it was a global problem, terrorism was “incubated” in India’s neighborhood. In what seemed like a reference to the Congressional hold on the subsidized sale of F-16s to Pakistan, the Indian prime minister also lauded that body for “sending a clear message to those who preach and practice terrorism for political gains. Refusing to reward them is the first step towards holding them accountable for their actions.” 

The Indian Economy. From Jawaharlal Nehru onward, prime ministers have outlined their domestic objectives in speeches to Congress, highlighting the reforms they’ve undertaken. Modi did too, highlighting India’s growth rate and economic opportunities, while acknowledging that much remained to be done. And there were also subtle responses to criticisms of Indian economic policy: for example, the remark about legislative gridlock suggested that American policymakers should understand why some reforms in India are taking time; the quip about India not claiming intellectual property rights on yoga was a rejoinder to those who give India a hard time about intellectual property rights (especially in the pharmaceutical sector). He also noted that in the past “wagers were made on our failure,” and yet Indians have time and again found a way to survive and succeed.

The new

Anti-Declinism. For those promising to make America great again, Modi had a message: it already is. In a speech to the U.S.-India Business Council the day before, he exuded optimism—not just about India, but the United States as well, asserting that, to him, “America is not just a country with a great past; it is a country with an exciting future.” In his speech to Congress, he referred to the U.S. as “great” at least four times and spoke of its “innovative genius.” Recalling that he’d thus far visited half of all American states, he noted what he believed was the United States’ “real strength”: Americans’ ability to dream big and be bold. 

In an election year when the nature and extent of American engagement with the world is being debated, Modi acknowledged the country’s global contributions and called for a continued U.S. role in the world. He applauded—and led members of Congress in a round of applause—for “the great sacrifices of the men and women from ‘The Land of the Free and the Home of the Brave’ in service of mankind.” With the exception of Nehru, who paid his respects at the Tomb of the Unknown Soldier, Indian premiers have tended not to mention American troops—partly a result of differing views on the Korean, Vietnam, and Iraq wars. Modi, on the other hand, explicitly mentioned U.S. efforts in Afghanistan, where “the sacrifices of Americans have helped create a better life.” 

In a more challenging, complex, and uncertain world, he asserted that U.S.-Indian engagement could make an impact, by “promoting cooperation not dominance; connectivity not isolation; respect for global commons; inclusive not exclusive mechanisms; and above all adherence to international rules and norms.” (No prizes for guessing the country that went unnamed). 

The Open Embrace. Modi-Obama hugs have fueled many a tweet. But the speech signaled and reflected a much broader embrace—an India-U.S. one that has been in the works for at least the last 17 years but has become much more visible in the last two. In 2000, addressing Congress, Vajpayee called for the two countries to “remove the shadow of hesitation that lies between us and our joint vision.” Not all his compatriots will agree, but Modi declared: “Today, our relationship has overcome the hesitations of history” and recalled Vajpayee labeling the two as “natural allies.” Listing the ways the relationship had grown closer, he emphasized that this “remarkable story” was not a partisan effort: “[t]hrough the cycle of elections and transitions of administrations the intensity of our engagements has only grown.” He also talked about what the two countries could do together, and stressed that the relationship was good for India. While he’s previously called the United States “a principal partner in the realization of India’s rise as a responsible, influential world power,” he went further this time, stating: “In every sector of India’s forward march, I see the U.S. as an indispensable partner.” 

Not a Free-Rider. But throughout the speech, Modi asserted that this relationship benefited both countries “in great measure,” with a “positive impact on the lives” of people in each. Echoing Singh, he noted that many members of Congress indeed believed that “a stronger and prosperous India is in America’s strategic interest.” Modi made the case that India is not a free rider—that through its businesses, market, talent, and diaspora it is contributing to American economy and society. The day before, in his speech to business leaders, he stressed that India was also “poised to contribute as a new engine of global growth” (and made a pitch for support to such “democratic” engines).

Modi furthermore highlighted Indian contributions to global and regional peace and prosperity, noting, for example, that its “soldiers too have fallen in distant battlefields” for freedom and democracy (alluding to the millions that fought in the World Wars). He also highlighted India’s efforts in Afghanistan, its troop contribution to U.N. peacekeeping operations, its role in humanitarian assistance and disaster relief operations in Maldives, Nepal, and Sri Lanka, and its evacuation operations in Yemen in which it rescued Americans as well. In addition, Modi noted India’s contributions of ideas, whether yoga or non-violent protest. And he stressed that India would be a responsible stakeholder and security provider—one that, in partnership with the United States, could “anchor peace, prosperity and stability from Asia to Africa and from Indian Ocean to the Pacific. It can also help ensure security of the sea lanes of commerce and freedom of navigation on seas.” But he also called for international institutions to reflect this role and “the realities of today.”

Members of Congress, for their part, will look to see whether and how Modi’s rhetoric will translate into reality. The prime minister suggested that it won’t always be the way the United States would like. He didn’t use the term “strategic autonomy,” but talked of “autonomy in decision-making”—while noting that it, as well as “diversity in our perspectives,” weren’t bad things for the partnership. And, as is his preferred style, he came up with 3Cs to characterize the state of the relationship: “comfort, candor, and convergence.” Whether they remain characteristic of the partnership, and to what degree, will partly depend on who is the next U.S. president and how she or he sees the U.S. role in the world and India’s place in it.

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

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

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

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

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

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

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

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

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

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Event Information

A conversation with USAID Administrator Gayle Smith

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

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

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

 Join the conversation on Twitter using #AIDeval

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• Assessing the impact of foreign assistance: The role of evaluation

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• Uncorrected Transcript (.pdf)

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• 20160330_usaid_evaluation_transcript

Almost two years ago, I alerted readers to a contest, sponsored by the Bill and Melinda Gates Foundation through the Global Development Network, to develop new ideas to improve the impact of development cooperation. The Next Horizons Essay contest 2014 received 1,470 submissions from 142 countries, from which 13 winners were selected.

Four of the winners took part in a roundtable at the Brookings Institution yesterday. Here’s a quick synopsis of the main takeaways.

There is a lot of experimentation happening in the delivery of aid, and most aid agencies are thinking hard about how to position themselves to contribute more to the sustainable development goals. In part, this is because these agencies are mission-driven to improve impact. The current system of aid replenishments of multilateral institutions forces them to compete with each other by persuading donors that they are best deserving of the scarce aid budgets being allocated. Even bilateral aid agencies find themselves under budgetary stress, asked to justify the impact of their lending compared to a counterfactual of channeling the money through a multilateral agency or of contributing to an appeal from the United Nations for humanitarian assistance or climate financing.

Stephen Mwangi Macharia talked about using development assistance to promote social impact investing. He noted the problems of sustainability, dependence, and ownership that can arise in traditional aid relationships and argued that social entrepreneurs can avoid such pitfalls. The question then becomes how donors can best help build the market infrastructure to support such efforts. Stephen’s idea: develop a social impact network initiative to build entrepreneurs’ capacity to develop “bankable” projects and to have a database to help match entrepreneurs and funders. 

There is certainly a lot of interest in social impact investing. According to the Global Impact Investing Network, around $60 billion are already under management (although mostly in developed countries) and the market is growing rapidly. Some questioned the role of aid donors however, noting that they could reduce incentives for others (universities, non-profits, etc.) who charge a fee for business development, awareness raising, and other market services. Others questioned the risk tolerance of donors for impact investing and a culture in many countries where business is viewed suspiciously when it tries to intentionally generate positive social and environmental impacts. As an aside, Judith Rodin, president of the Rockefeller Foundation, has noted that the development of impact investing was one of the accomplishments that she was most proud of.

Ray Kennedy suggested that vertical funds, because of better governance and a sharper focus, should be a preferred channel for development assistance. Interestingly, his argument was not based on advocacy for a particular sector, but on the improved adaptability of these institutions. His evidence provided several examples of how vertical funds changed in response to changing global conditions, and, he argued, such change is a highly desirable virtue in our rapidly changing times.

Of course, the recommendation to favor vertical funds did not go unchallenged. There was a lively discussion about the comparative advantage of different institutions and the dangers of mission creep by more effective institutions into space left open by less effective institutions. Yet, most agreed that new platforms were being fluidly created to solve new problems, and that a “mixed coalition,” to borrow a phrase from one of the participants, was part of the preferred solution.

Yuen Yuen Ang took on the problem of local ownership directly. It is easy to talk about local ownership, she said, but few agencies do anything about it in their actual operations. Instead, they promote best practice ideas, some of which may fail even the basic test of “do no harm.” Basing her arguments on the complexity of how organizations change, she advocates specific internal reforms: diversify staff experiences and backgrounds beyond economics and finance; carve out time for staff to pursue “non-standard” approaches; and build a bank of examples about “best-fit” approaches that have been shown to work in weak institutional settings.

A lively discussion followed on best-fit versus best-practice approaches and, indeed, on whether there is a trade-off between the two or whether the issue is how to balance both at the same time. There was agreement that best-practice applies to some issues, especially where global standards have developed (debt management or anti-money laundering, perhaps). Best-fit is more useful when judgement and a deep understanding of local conditions are required. Some questioned the role of external donor agencies in such contexts, however.

Dan Honig argued for greater autonomy of field-based staff. Based on an extensive and unique data set, he was able to test the impact of the degree of autonomy on project success. The econometrics show significant impact of autonomy on certain activities and in certain situations. When the context is fluid and unpredictable, as in fragile states for example, or when judgement is required, as in institutional development, then autonomy can help. But when desired outcomes are easily measurable, such as school or road construction, then autonomy makes little difference.

During the discussion, there was agreement that too much of a focus on metrics could be distortionary and, in fluid situations, could be damaging. The theme of donor risk aversion came up again, but this time coupled with the idea that metrics, however false and misleading they might be, provide comfort and cover for bureaucrats. A sympathetic hearing was given to former United States Agency for International Development Administrator Andrew Natsios’ concept of “obsessive measurement disorder.” But, participants also warned of the need to show that the costs of autonomy, in the form of larger field presence and a limited ability to scale up, outweighed the benefits.

It was refreshing to see new evidence and multidisciplinary approaches being brought to bear on development effectiveness. The four themes highlighted in these essays—making markets work for the poor, improving agency governance, local ownership and contextualization, and decentralization and autonomy—resonated with those participants who are, or had been, active in aid agencies. I thank the Global Development Network and the Bill and Melinda Gates Foundation for this initiative, as well as to the winning scholars for injecting new ideas into the discourse.

In the course of two days last week, the U.S. Congress passed two foreign aid bills.

What’s more, in the course of five months, Congress has passed three foreign aid bills!

All three bills passed with strong bipartisan leadership and support.

Equally important, all three bills reflect a new era of a more modernized approach to assistance.

The bills avoid many of the problems of past aid legislation, including micromanagement, earmarks, and requirement of frequent reports that are seldom read by members of Congress or their staffs. Each bill was developed in cooperation with the Obama administration and reflects its policies and civil society priorities. And they emphasize strategic approaches, results, use of data, monitoring and evaluation, and learning.

The Foreign Assistance Accountability and Transparency Act of 2016, sponsored by Republicans Sen. Marco Rubio and Rep. Ted Poe and Democrats Sen. Ben Cardin and Rep. Gerry Connolly, is grounded in important principles of foreign aid reform. It enacts into law key policies advocated by the Modernizing Foreign Assistance Network and supported by the U.S. Global Leadership Coalition and many other international development and foreign policy organizations. Robust evaluation and aid transparency, first elevated as elements of the Millennium Challenge Corporation by the Bush administration and later adopted by the Obama administration across all foreign affairs agencies, are institutionalized by the bill. The bill calls for two reports 18 months after enactment, not annual, year-after-year reports, which had been the normal practice and usually resulted in shelves of unread reports. One report will be from the president outlining the monitoring and evaluation guidelines called for in the report, and the other report will be from the Government Accountability Office assessing those guidelines.

This type of independent, objective evaluation is essential to improving assistance; it assesses what we have tried and improves our understanding of what does and does not work. When aggregated across multiple evaluations of similar programs, it produces new knowledge and learning.

Transparency, another important element of aid reform, brings multiple benefits. It provides all stakeholders, including Congress, U.S. taxpayers, intended beneficiaries, government officials, and civil societies in recipient countries, with data and information that allows them to understand where and how assistance is used. It provides data that is critical to making informed decisions. And it keeps agencies and programs focused on their mission and objectives by permitting public scrutiny and accountability.

The Global Food Security Act of 2016, sponsored by Republicans Sen. Johnny Isakson and Rep. Chris Smith and Democrats Sen. Bob Casey and Rep. Betty McCollum, writes into law the administration’s initiative Feed the Future. The core of the bill is a mandate of the president to coordinate a comprehensive U.S. global food security strategy—such a forward-looking strategy will help gain stakeholder buy-in and ultimately provide more consistent, rationale policies and programs. Also included are guidelines that we know from experience produce good development—measurable goals and performance metrics, solid monitoring and evaluation, clear criteria for selecting targets, alignment with local policies and priorities, multi-sectoral approaches, building local capacity and resilience, and partnership with the private sector. The bill authorizes funding for food security but does not earmark it—meaning the funds are authorized but are not required to be expended. And the bill calls for only a single report to Congress a year after the issuance of the strategy.

The third bill, the Electrify Africa Act of 2015, sponsored by Republicans Sen. Bob Corker and Rep. Ed Royce and Democrats Sen. Ben Cardin and Rep. Elliot Engel, is centered on a comprehensive energy strategy for Africa. Similarly, the legislation calls for a strategy that is flexible and responsive to local communities and for policies that promote transparent and accountable governance, local consultation, and monitoring and evaluation. The bill requires two reports, the first within six months of enactment to transmit the strategy and the second three years after enactment to report on implementation. The bill directs U.S. government agencies to use accountable and metric-based targets to measure effectiveness of assistance and to leverage private and multilateral finance.

For those who say that Congress does not support foreign assistance, let’s hope this legislative triple-hat puts that to rest. Similarly, for those who say the Congress does not understand a more effective approach to development, maybe it’s time to become a believer.

Chattanooga a few years ago faced what many smaller cities are struggling with today—a sudden decline after years of prosperity in the "old" economy. This case study offers a roadmap for these cities by chronicling Chattanooga's demise and rebirth.

Chattanooga is located in the southern end of the Tennessee Valley where the Tennessee River cuts through the Smoky Mountains and the Cumberland Plateau. The city’s location, particularly its proximity to the Tennessee River, has been one of its greatest assets. Today, several major interstates (I-24, I-59, and I-75) run through Chattanooga, making it a hub of transportation business. The city borders North Georgia and is less than an hour away from both Alabama and North Carolina. Atlanta, Nashville, and Birmingham are all within two hours travel time by car.

Chattanooga is Tennessee’s fourth largest city, with a population in 2000 of 155,554, and it covers an area of 143.2 square miles. Among the 200 most populous cities in the United States, Chattanooga—with 1,086.5 persons per square mile—ranks 190th in population density.2 It is the most populous of 10 municipalities in Hamilton County, which has a population of 307,896, covers an area of 575.7 square miles, and has a population density of 534.8 persons per square mile.

With its extensive railroads and river access, Chattanooga was at one time the “Dynamo of Dixie”—a bustling, midsized, industrial city in the heart of the South. By 1940, Chattanooga’s population was centered around a vibrant downtown and it was one of the largest cities in the United States. Just 50 years later, however, it was in deep decline. Manufacturing jobs continued to leave. The city’s white population had fled to the suburbs and downtown was a place to be avoided, rather than the economic center of the region. The city lost almost 10 percent of its population during the 1960s, and another 10 percent between 1980 and 1990. It would have lost more residents had it not been for annexation of outlying suburban areas.

The tide began to turn in the 1990s, with strategic investments by developing public-private partnerships—dubbed the “Chattanooga way.” These investments spurred a dramatic turnaround. The city’s population has since stabilized and begun to grow, downtown has been transformed, and it is once again poised to prosper in the new economy as it had in the old.

This report describes how Chattanooga has turned its economy around. It begins with a summary of how the city grew and developed during its first 150 years before describing the factors driving its decline. The report concludes by examining the partnerships and planning that helped spur Chattanooga’s current revitalization and providing valuable lessons to other older industrial cities trying to ignite their own economic recovery. 

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Introduction

Ohio has already taken important steps to address the state’s ongoing foreclosure crisis, yet the crisis continues, causing distress for thousands of families and individuals, and destabilizing cities, towns and neighborhoods across the state. Therefore, the state, its local governments and private stakeholders need to do still more to deal more effectively with the crisis and its impacts on the state’s housing stock, cities and neighborhoods.

What is often termed the “foreclosure crisis” is actually a multi-dimensional crisis, in which the collapse of the housing bubble, the devastation caused by the lax and often irresponsible credit practices that accompanied and perpetuated that bubble, the resulting freeze on commercial and consumer credit, and the worldwide recession are interwoven, and can only with great difficulty be untangled. In Ohio, those forces are further exacerbated by profound changes to the state’s historical economic underpinnings. Ohio cannot solve the crisis by itself, but it can significantly mitigate its impact on people, neighborhoods, and towns and cities. These mitigating efforts will also help preserve the value of homes and neighborhoods in the state, and place Ohio in a stronger position to benefit from the future economic recovery.

The paper begins with a short summary of current conditions and the actions the state has already taken to address the wave of foreclosures, followed by a discussion of areas for future action. This discussion will address mitigating both the individual and community impacts of foreclosure, but will give particular emphasis to the critical issue of softening the blow of foreclosure on communities, which up to now has been less of a focus for state action.

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