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

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

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

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

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

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

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

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

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

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

       

The much-awaited rulings of the Permanent Court of Arbitration in The Hague—in response to the Philippines’ 2013 submission over the maritime entitlements and status of features encompassed in China’s expansive South China Sea claims—were released this morning. Taken together, the rulings were clear, crisp, comprehensive, and nothing short of a categorical rejection of Chinese claims.

Among other things, the court ruled China’s nine-dash line claim to the South China Sea invalid because of Beijing’s earlier ratification of the United Nations Convention on the Law of the Sea (UNCLOS). In a move that surprised many observers, the court also ventured a ruling on the status of every feature in the Spratly Islands, clarifying that none of them were islands and hence do not generate an exclusive economic zone (EEZ). Significantly, it ruled that Mischief Reef, which China has occupied since 1995, and Second Thomas Shoal, where China has blockaded Philippine marines garrisoned on an old vessel that was deliberately run aground there, to be within the EEZ of the Philippines.

In the neighborhood

Now that the rulings have been made, what are the implications and way forward for concerned states?

For the Philippines, the legal victory presents a paradoxical challenge for the new government. Prior to the ruling, newly-elected President Rodrigo Duterte indicated on several occasions that he was prepared to depart from his predecessor’s more hardline position on the South China Sea to engage Beijing in dialogue and possibly even joint development. He even hinted that he would tone down Manila’s claim in exchange for infrastructure investment. Given that the ruling decisively turns things in Manila’s favor, it remains to be seen whether the populist Duterte administration would be able to sell the idea of joint development of what are effectively Philippine resources without risking a popular backlash. This will be difficult but not necessarily impossible, given that the Philippines would likely still require logistical and infrastructural support of some form or other for such development projects. 

Since the submission of the Philippine case in 2013, China has taken the position of “no recognition, no participation, no acceptance, and no execution,” as described by Chinese professor Shen Dingli. Beijing continues to adhere to this position, and is likely to dig in its heels given the comprehensive nature of the court’s rejection of China’s claims. This, in turn, will feed the conspiracy theories swirling around Beijing that the court is nothing but a conspiracy against China. 

[T]he rulings are likely to occasion intense internal discussions and debates within the Chinese leadership as to how best to proceed.

Not surprisingly, in defiance of the ruling, China continues to insist on straight baselines and EEZs in the Spratlys. Away from the glare of the media however, the rulings are likely to occasion intense internal discussions and debates within the Chinese leadership as to how best to proceed. Many analysts have the not-unfounded concern that hawkish perspectives will prevail in this debate, at least in the short term—fed by the deep sensibilities to issues of security and sovereignty, and a (misplaced) sense of injustice. This would doubtless put regional stability at risk. Instead, China should do its part to bring the Code of Conduct it has been discussing with ASEAN to a conclusion as a demonstration of its commitment to regional order and stability, and the peaceful settlement of disputes. Beijing should also continue to engage concerned states in dialogue, but these dialogues cannot be conducted on the premise of Chinese “unalienable ownership” of and “legitimate entitlements” in the South China Sea. 

ASEAN will be hosting several ministerial meetings later this month, and the ruling will doubtless be raised in some form or other, certainly in closed-door discussions. For ASEAN, the key question is whether the organization can and will cobble together a coherent, consensus position in response to the ruling, and how substantive the response will be (they should at least make mention of the importance of international law to which all ASEAN states subscribe). For now though, it is too early to tell. 

U.S. policy

As an Asia-Pacific country, the United States has set great stock in the principle of freedom of navigation, and has articulated this as a national interest with regards to the South China Sea. There are however, three challenges for the United States as it proceeds to refine its policy in the region:

1. First, going by the attention it has commanded in Washington, it appears that the South China Sea issue has already become the definitive point of reference of America’s Southeast Asia policy. Southeast Asian states, on the other hand, have expressed their desire precisely that the South China Sea issue should not overshadow or dominate the regional agenda. Hence, even as the United States continues to be present and engaged on South China Sea issues in the region, equal attention, if not more, should be afforded to broaden the scope of their engagement. 
2. Second, in pushing back Chinese assertiveness in the South China Sea, the United States must be careful not to inadvertently contribute to the militarization of the region. There is talk about the deployment of a second carrier group to the region, and the U.S.S. John C. Stennis and U.S.S. Ronald Reagan are already patrolling the Philippine Sea. On the one hand, this is presumed to enhance the deterrent effect of the American presence in the region. Yet on the other hand, Washington should be mindful of the fact that China’s South China Sea claim is also informed by a deep sense of vulnerability, especially to the military activities that the United States conducts in its vicinity. 
3. Finally, in its desire to reassure the region, the United States has sought to strengthen its relations with regional partners and allies. This is necessary, and it is welcomed. At the same time however, Washington should also ensure that this strengthening and deepening of relations is undergirded by an alignment of interests and shared outlooks. This cannot, and should not, be assumed. 

       

The International Tribunal on the Law of the Sea has ruled on the case that the Philippines brought in 2013, challenging China's claims and behavior in the South China Sea. International lawyers and the policy commentariat has judged the ruling as a sweeping victory for the Philippines and a significant loss for China, which refused to acknowledge the tribunal's jurisdiction or to take part in the proceedings.

The question going forward is how China will respond. Will it double down on the aggressive and coercive activities of the past six years, behavior that has put most of its East Asian neighbors on guard? Will it continue to interpret the Law of the Sea in self-serving ways that very few countries accept? Or, might China recognize that its South China Sea strategy has been an utter failure and that its best response is to take a more restrained and neighborly approach? 

What got us here?

Critical as the next weeks and months will be, it is also useful to take a look back and examine recent events in the broad context of Chinese foreign and security policy over the last four decades. The premise of that reform policy, initiated in the late 1970s and early 1980s, was that a weak China could best ensure its security by engaging and accommodating the international community, in order to gradually build up all aspects of its national power. The most clear-cut feature of this strategy was to join the global economy: China accepted the leadership of the IMF and World Bank; opened the Chinese economy to international trade and investment; carved out critical roles in global supply chains; accepted the liberalization disciplines of the World Trade Organization; and, more recently, began to provide public goods to other developing economies. Not everyone has benefitted from China's economic engagement, but on balance it has been a signal success.

China's reformist leaders also recognized the value of taking an accommodating stance toward its East Asian neighborhood, of which the United States is a part. One side of accommodation was to execute a skillful diplomacy designed to reduce tensions and avoid conflict unless Beijing's fundamental interests were under threat. Accommodation's other side was to delay the modernization of the Chinese military and exercise restraint in the use of those capabilities that it did create. This made sense because China both lacked the power to challenge the United States and Japan militarily and needed the help of those and other countries to grow economically. 

That approach changed in the early 2000s, when Beijing judged that it would only be secure if it expanded its eastern and southern strategic perimeters into the East and South China Seas. That judgment had its own logic, which maritime territorial disputes and reports of maritime energy and mineral resources only intensified. Thus began a program to build the capabilities to project power into the maritime domain and then use them to press its claims. That campaign created frictions with its neighbors. An increasingly overbearing diplomacy didn't help China's reputation either. 

It’s your move, China

Another part of China's grand strategy has been to integrate itself in the system of international institutions, law, norms, and regimes—both global and regional. This step did not signify a fundamental acceptance of the international order that had emerged and evolved after World War II. Rather, it reflected a belief that China could and should use institutions, law, norms, and regimes to protect China's interests against hegemonic behavior by others, particularly the United States. (Conversely, the "West" believed that binding Beijing to "its" order would restrain Chinese bad behavior.)

The tribunal’s decision on the Philippines case was a clear blow to China's long-standing strategy to use international law to advance or protect its interests, prompting feelings of buyer's remorse. The hardy perennial that China has been the victim of humiliation at the hands of Western countries will only add to the resentful reaction. Of course, China rejects the widely-held view that it is bound by the ruling even though it did not participate in the case. Also, this is a court with no enforcement powers, so Beijing could simply ignore the ruling and use its military and law enforcement assets to continue its past pattern of aggressive and coercive actions—essentially increasing the salience of its military power. That course of action would only further push the test of wills between it and Washington, even though neither benefits from a downward spiral of increased competition and conflict.

Beijing could simply ignore the ruling...That course of action would only further push the test of wills between it and Washington, even though neither benefits from a downward spiral of increased competition and conflict.

China could go even further than simply doubling down. Contrary to the tribunal's ruling, it could treat the Spratly Islands as islands under international law; define them as a single unit for purposes of defining maritime boundaries; accordingly draw straight baselines around them; then declare for itself an exclusive economic zone that covered most of the waters of the South China Sea; and finally, over time, challenge the rights of other countries to freedom of navigation and the exploitation of natural resources. For the lay-reader, what is important here is that none of these actions would accord with the widely accepted principles of the Law of the Sea. (Ultimately, China might someday insist to the countries of East Asia that it will no longer tolerate their relying on China for economic prosperity and depending on the United States for security.)

On the other hand, China could conduct a serious assessment of how it has exercised its diplomatic, coercive, and legal power over the last half-decade. Is China really more secure after alienating its East Asian neighbors through heavy-handed diplomacy, stimulating a very public coercive counter-response from the United States (too public in my view), and suffered a significant defeat in the international court of law? Might a tactical retreat at this stage, including a recommitment to international law and institutions, better serve China's strategic interests than more domineering behavior?

A key principle of Chinese diplomatic statecraft beginning in the 1980s was taoguang yanghui, a phrase that basically means to exercise restraint as one steadily builds one's power. The Chinese national security establishment has forgotten that principle as it conducted its recent policy towards the South China Sea. It would do well to revive it.

       

This week, the richest business leaders and investors from around the world will gather in Davos, Switzerland, for the annual meeting of the World Economic Forum. In keeping with tradition, a small portion of the agenda will be devoted to global development and the plight of people living at the other end of the global income distribution.

Philanthropy is one way of linking the fortunes of these disparate communities. What if some of the mega-rich could be persuaded to redistribute their wealth to the extreme poor?

This question may feel hackneyed, but it deserves a fresh hearing in light of a dramatic reduction in the global poverty gap over the past several years (Figure 1). The theoretical cost of transfers required to lift all poor people’s income up to the global poverty line of $1.90 a day stood at approximately $80 billion [1] in 2015, down from over $300 billion in 1980. (Values expressed here are in 2015 market dollars.)

Figure 1. Official foreign aid now exceeds the annual cost of closing the poverty gap

Source: Authors’ calculations based on OECD, World Bank

This reduction can be unpacked into two parts. The first is a steep decline in the number of people living below the global poverty line. This is increasingly recognized as one of the defining features of the era. A U.N. goal to halve the poverty rate in the developing world between 1990 and 2015 was nearly achieved twice over. The second and lesser-known factor is the shrinking average distance of the world’s poor from the poverty line. In 1980, the mean daily income of those living below $1.90 was $1.09. In 2012 it was 25 cents higher at $1.34. (Values expressed here in 2011 purchasing power parity dollars.)   

Despite this good news, global poverty still demands attention. Hundreds of millions of people continue to suffer this most acute form of deprivation. In several countries, the prospects for ending poverty over the next generation, in line with a recently endorsed successor U.N. goal, appear challenging at best.

Figure 1 illustrates that in 2006, global aid flows exceeded the cost of the global poverty gap for the first time. This suggests that the elimination of extreme poverty should be possible simply through a more efficient allocation of aid. However, this confuses foreign aid’s goals and functions. The bulk of official foreign aid is used in the provision of public goods, such as physical infrastructure and strengthening institutions. Only 2 percent is directed to social payments and their administration. If the elimination of extreme poverty is to be achieved through targeted transfers, it depends on sources other than foreign aid.

The main source of transfers to the poor is welfare programs run and financed by developing countries themselves. These social safety nets have emerged as an increasingly prominent instrument in the toolkit of developing economy governments. Eighty-three percent of developing economies employ unconditional cash transfer programs, although many are small in scale. Several countries are in the process of building the apparatus for more accurate targeting and authentication through the assembly of beneficiary registries and the rolling out of identity programs. In at least 10 developing countries, social safety nets have succeeded in establishing a social floor by lifting all those people under the poverty line up above the threshold. In the vast majority, however, safety nets are insufficiently targeted or generous for that purpose, reflecting not only resource constraints, but also political choices that can be resistant to change.

A complementary approach is to consider the role of private mechanisms and wealth. NGOs were among the original pioneers of cash transfers in the developing world. More recently, the NGO GiveDirectly has designed a compelling new method of charitable giving that sends money directly to the poor using digital monitoring and payment technology. Its approach has received strong endorsements from independent charity assessors and has been validated by impact evaluations. Yet the scale of its existing donations remains tiny relative to the global poverty gap.

This is where Davos’s global elite could come into play: What difference could a philanthropic donation from the world’s richest people make?

Comparing billionaire wealth with the global poverty gap

To explore this question, we begin by identifying those developing countries that are home to a least one billionaire. (Our analysis is restricted to billionaires by data, not by the potential largesse of the world’s multi-millionaires. We focus our attention on billionaires in the developing world given the traditional focus of philanthropy on domestic causes.) Let’s assume that the richest billionaire in each country agrees to give away half of his or her current wealth among his or her fellow citizens, disbursed evenly over the next 15 years, roughly in accordance with the Giving Pledge promoted by Bill Gates. That money would be used exclusively to finance transfers to poor people based on their current distance from the poverty line. Transfers would be sustained at the same level for the full 15-year period with the aim of providing a modicum of income security that might allow beneficiaries to sustainably escape from poverty by 2030.

Table 1 summarizes the key results. In each of three countries—Colombia, Georgia, and Swaziland—a single individual's act of philanthropy could be sufficient to end extreme poverty with immediate effect. Swaziland is an especially striking case as it is among the world’s poorest countries with 41 percent of its population living under the poverty line. In Brazil, Peru, and the Philippines, poverty could be more than halved, or eliminated altogether if the billionaires could be convinced to match Mark Zuckerberg’s example and increase their donation to 99 percent of their wealth.

Table 1. The potential impact on poverty of individual billionaire giving pledges

Country	Cost per year to close the poverty gap	Wealthiest billionaire	Net worth	Poverty rate pre-transfer	Poverty rate post-transfer
Nigeria	$12,070 m	A. Dangote	$14,700 m	45%	43%
Swaziland	$85 m	N. Kirsh	$3,900 m	41%	0%
Tanzania	$1,645 m	M. Dewji	$1,250 m	40%	39%
Uganda	$1,035 m	S. Ruparelia	$1,100 m	33%	32%
Angola	$1,277 m	I. dos Santos	$3,300 m	28%	25%
S. Africa	$1,068 m	J. Rupert	$7,400 m	18%	14%
Philippines	$648 m	H. Sy	$14,200 m	12%	3%
Nepal	$144 m	B. Chaudhary	$1,300 m	12%	8%
India	$5,839 m	M. Ambani	$21,000 m	12%	10%
Guatemala	$215 m	M. Lopez Estrada	$1,000 m	12%	10%
Venezuela	$870 m	G. Cisneros	$3,600 m	11%	9%
Georgia	$40 m	B. Ivanishvili	$5,200 m	10%	0%
Indonesia	$845 m	R. Budi Hartono	$9,000 m	9%	6%
Colombia	$444 m	L. C. Sarmiento	$13,400 m	7%	0%
Brazil	$1,223 m	J. P. Lemann	$25,000 m	4%	1%
Peru	$95 m	C. Rodriguez-Pastor	$2,100 m	3%	1%
China	$3,072 m	W. Jianlin	$24,200 m	3%	2%

Source: Authors’ calculations based on Forbes, International Monetary Fund, PovcalNet, and the World Bank. Poverty rates post-transfer calculated based on average distance of the poor from the poverty line.  

In other countries—Nigeria, Tanzania, Uganda, and Angola—the potential impact on poverty is only modest. A number of factors account for differences between countries, but two factors that penalize African countries are especially noteworthy. First, the depth of poverty in Africa remains high, with 15 percent of the population living on less than $1.00 a day; and second, Africa has relatively high prices compared to other poor regions, which means more dollars are required to deliver the same amount of welfare.  

For those nations that have more than one billionaire, an alternative scenario is that the country’s club of billionaires makes the pledge together and combines resources to tackle domestic poverty. This would end poverty in China, India, and Indonesia—countries that rank first, second, and fifth globally in terms of the absolute size of their poor populations. The last two columns of Table 2 describe the results.

Table 2. The potential impact on poverty of collective billionaire giving pledges

Country	Cost per year of closing the poverty gap	No. of Billionnaires	Net Worth	Poverty rate pre-transfer	Poverty rate post-transfer
Nigeria	$12,070 m	5	$22,900 m	45%	42%
Swaziland	$85 m	1	$3,900 m	41%	0%
Tanzania	$1,645 m	2	$2,250 m	40%	38%
Uganda	$1,035 m	1	$1,100 m	33%	32%
Angola	$1,277 m	1	$3,300 m	28%	25%
S. Africa	$1,068 m	7	$28,550 m	18%	2%
Philippines	$648 m	11	$51,300 m	12%	0%
Nepal	$144 m	1	$1,300 m	12%	8%
India	$5,839 m	90	$294,250 m	12%	0%
Guatemala	$215 m	1	$1,000 m	12%	10%
Venezuela	$870 m	3	$9,600 m	11%	7%
Georgia	$40 m	1	$5,200 m	10%	0%
Indonesia	$845 m	23	$56,150 m	9%	0%
Colombia	$444 m	3	$18,500 m	7%	0%
Brazil	$1,223 m	54	$181,050 m	4%	0%
Peru	$95 m	6	$8,750 m	3%	0%
China	$3,072 m	213	$564,700 m	3%	0%

Source: Authors’ calculations based on Forbes, IMF, PovcalNet, and the World Bank. Poverty rates post-transfer calculated based on average distance of the poor from the poverty line.

This exercise is of course laden with simplifying assumptions. [2] It is intended to provoke discussion, not to provide definitive figures. Moreover, it is open to debate whether transfers represent the most cost-effective way of sustainably ending poverty, the extent to which transfers ought to be targeted, the efficacy of building private transfer programs alongside public safety nets, and whether cash transfers represent the most appropriate use of billionaires’ philanthropy.  

What is less contestable is that a falling global poverty gap presents an opportunity for more systematic efforts for poverty reduction. This raises the question: How low does the poverty gap have to fall before we explicitly design programs to bring the remaining poor above the poverty line? We would argue that we are already beyond this point, not least in countries that remain a long way from ending poverty. Were a billionaire at Davos to commit to using his or her wealth in this fashion, it could trigger a powerful demonstration effect of innovative solutions—not just for other billionaires, but for countries that are currently at risk of being left behind.

---

[1] The cost of the global poverty gap in 2015 is an overestimate compared with the World Bank’s tentative poverty estimate for the same year. This is due to a different treatment of Nigeria. For this exercise, we rely on data from the 2009/10 Harmonized Nigeria Living Standards Survey reported in PovcalNet, despite its well-documented problems, whereas the Bank draws on the 2010/11 General Household Survey.

[2] Simplifying assumptions include: zero administrative costs in identifying the poor, assessing their income, and administering payments with no leakages, or no portion of those costs being borne by billionaires; the efficacy of administering miniscule transfers to those who stand on the margin of the poverty line; and no change in the cost of closing the poverty gap in a country over time, whether due to population growth, an increase or decrease in poverty, or a change in prices relative to the dollar.   

      

A recent article in The Guardian caught my eye: “Report accuses government of increasing inequalities in developing countries by financing academies at the expense of state schools.” The report, conducted by the U.N. Committee on the Rights of the Child, was an attack on U.K. aid money being linked to private education providers since the rapid increase in such schools may be contributing to sub-standard education. In particular, they cited the U.K. government’s investments in the Nairobi-based and for-profit Bridge International Academies.

I’ve worked on private education extensively throughout my career and do not believe there is anything wrong with private schools, but in this particular case I couldn’t agree more. But to be clear, it’s the funding strategy that’s the problem.

Private schooling is on the rise in a number of poor countries, and Pakistan—where my education research is focused—is no exception. The majority of these schools are no longer the elite institutions of yore, but low-cost alternatives fighting for survival in a highly competitive environment. These schools have mushroomed in response to increased parental demand and poor public alternatives, but also to the greater availability of teachers in the local labor market.

More importantly, research increasingly demonstrates that there is absolutely nothing wrong with private schools. There's a summary of this research available here; specific examples on India (more here) and Pakistan are also available.

Some key are takeaways from this research are:

• Private schools charge low fees (about $1 to$2 a month in Pakistan).
• The quality is almost certainly higher compared to government schools in the vicinity.
• At least in Pakistan, there is no significant segregation between public and private schools in terms of parental wealth, education, or caste.
• The most significant barrier to attendance in low-cost private schools is not cost—it’s distance. Put simply, there just aren’t enough of them around.

If there is a cheaper and better alternative to public schooling, shouldn’t we encourage children to shift and thus improve the quality of education for all?

Perhaps. But when the rubber from these well-intentioned aid policies hits the road of rural Pakistan, Kenya, or Ethiopia, a very different sort of model emerges. Instead of supporting private schooling, donors end up supporting private schools (or at best private school chains), which is an entirely different action with little theoretical backing. In fact, economic theory screams that governments and donors should almost never do that.

Donors say the problem is that the low-cost private school market is fragmented with no central authority that can be “contracted with.” No one has a good model on how to work with a competitive schooling sector with multiple small players—ironically, the precise market structure that, according to economics, leads to efficiency.

In reality, I suspect the problem goes deeper. Most low-cost private school owners don’t do well at donor conferences. They don’t know how to tell compelling human-interest stories about the good they do. But what they are excellent at is using local resources to ensure that their schools meet the expectations of demanding parents.

The problems with foreign aid financing private schools

The first is a problem of accountability. Public schools are accountable, through a democratic system, to citizens of the country. Private schools are accountable to the parents. And donor-funded private school chains are account to the donors. While both citizen-led accountability and direct accountability to parents have problems, they are grounded in centuries of experience. It’s unlikely that donors in a foreign land, some of whom can’t visit the schools they fund for security reasons, can do better than either citizens or parents.

The second is a problem of market structure. When one private school or private school chain receives preferential treatment and funding, without allowing other private schools to apply for the same funds, the donor is picking winners (remember Solyndra?). The need for private schools as an alternative to government schools is insufficient justification for donors to put their thumbs on the scale and tilt the balance of power towards a pre-identified entity.

Adjusting the strategy

In a recent experiment, my colleagues and I gathered direct proof for this assertion. We gave untied grants to low-cost private schools with a twist. In certain villages, we randomly selected a single private school for the grant. In others, we gave the grant to every private school in the village. Our preliminary results show that in villages where we gave the grant to a single school, the school benefitted enormously from an increase in enrollment. Where we gave the grant to multiple private schools, the enrollment increase was split among schools. But only in the villages where we gave the grant to every school did test-scores for children increase.

What happened? When a single private school receives the grant, knowing that the other schools cannot react due to a lack of funds, they engage in “customer poaching” to increase their profits at the expense of others. Some have argued that Uber’s recent fundraising is precisely such an effort to starve competitors of funding.

When you equally support all private schools, customer poaching does not work, and the only way to increase profits and generate returns is to increase the size of the market, either through higher overall enrollments or through new quality offerings.

The first strategy supports pre-identified private schools and concentrates market power. The second, by providing opportunities for all private schools, improves education for children.

Sure, some private school chains and schools are making positive impact and deserve the support they can get. But funding such schools creates the wrong institutional structures and are more likely to lead to disasters than successes (Greg Mortensen and 3 cups of tea, anyone?).

In general, the Government’s responsibility towards the education of children is two-fold:

• Alleviate the market constraints that hold back private schooling without favoring one school over the other—letting parents decide who succeeds and who does not.
• Support and improve public schools to provide an alternative because there will always be children who cannot enroll in private schools, either because they are too expensive or because they are too far away, or because they don’t offer the instruction “basket” that some parents want.

In short, foreign aid should play no part in supporting private schools rather than private schooling.

       

       

       

       

       

From a distance, the finger-pointing and the hand-wringing over the seeming demise of plans to build rail to Dulles Airport make it appear that the project collapsed under its own weight.

The Dulles dust-up is not a unique disease, but rather a symptom of a much larger national transportation illness. As hard as it may be to think of a $5 billion mega-transportation project as a “microcosm” of anything, right now that is exactly how one should consider the Dulles rail controversy.

The disagreements about the planned 23-mile Metrorail line through Tysons Corner in Virginia, continuing to Dulles International Airport — stalled now due to ideological differences over the appropriate federal role in transportation — are a subset of a larger battle taking place.

Around the country, metropolitan-based civic and business leaders are constructing 21st-century visions for transit, engaging local governments in true regional decision making and leveraging private funding for infrastructure projects.

Formerly auto-centric metropolitan areas such as Los Angeles and Dallas have made transformative use of new investments in key transit corridors. Metropolitan Denver is embarking on arguably the most extensive transit expansion this nation has ever seen.

These regions have looked to transit to shape future growth, to provide more choices and to at least somewhat mitigate climate changes.

Unfortunately, most of this innovation is happening in spite of — rather than in conjunction with — the federal government.

The sad fact is that our national government takes an impeding and outmoded approach to transportation innovation, establishing starkly different rules that favor highways over transit projects.

This unlevel playing field has profound effects on metropolitan America and, by extension, on the economic competitiveness of the nation.

The federal program that funds new transit projects is totally discretionary and highly regulated by the U.S. Department of Transportation. Projects must prevail through an onerous review before final recommendation is made. Even then, each project is subject to the annual congressional appropriations process.

Clearly, some kind of competitive process is warranted. However, the current bureaucratic rigmarole is so torturous, it is no wonder that some metropolitan areas are forgoing the federal process completely and funding new transit segments on their own.

In addition, this administration’s inexplicably hostile approach to nonhighway projects has compounded the problem, resulting in shortsighted thinking that ignores the realities and challenges of the modern metropolis.

But no such federal gantlet governs highway projects. Simply put, the states do not have to seek federal permission to build them.

More inequity exists in terms of what the federal government is willing to contribute to investments.

Federal law created 50 years ago establishes 80 percent to 90 percent of the funding for highway projects. For transit investments, the contribution is much lower — just 47 percent, according to the Office of Management and Budget. The Dulles share is only 20 percent.

Finally, developers of federal transit projects must demonstrate a long-term ability to operate and maintain the facility.

Makes sense, right? It is one thing to create a project but, as the collapse of the bridge in Minneapolis underscored, maintaining it is entirely another. Yet recipients of highway dollars amazingly are not responsible for this.

All of this brings us back to the Dulles rail project. Understandably, many feel that the Department of Transportation’s lack of clear guidance and direction, astonishing miscommunication, unprecedented heavy-handedness and traditional, road-centric thinking may be too much to overcome.

Yet the hope is that cooler heads prevail. The focus now must be on making Dulles rail a negotiated success rather than a standoff failure, because too many benefits are on the line.

The project promises to transform a congested suburban corridor, contribute toward energy independence and take advantage of a unique private finance and development partnership to accommodate decades’ worth of metropolitan growth. It also will anchor Washington’s status as an international capital.

Right now, though, our outmoded transportation infrastructure, both here and around the country, is ill-served by an outmoded federal partner.

Robert Puentes is a fellow at the Brookings Institution’s Metropolitan Policy Program.

      

       

      

      

      

       

       

       

       

       

The city of Chicago is increasing retrofits by using stimulus dollars to expand the opportunity for energy efficient living to low-income residents of large multi-family rental buildings. To aid this target demographic, often left underserved by existing programs, the city’s new Multi-Family Energy Retrofit Program introduces an innovative model for retrofit delivery that relies on private sector financing and energy service companies.

Chicago’s new Multi-Family Energy Retrofit Program draws on multi-sector collaboration, with an emphasis on private sector involvement supported by public and nonprofit resources. Essentially, the program applies the model of private energy service companies (ESCOs), long-used in the public sector, to the affordable, multi-family housing market. In this framework, ESCOs conduct assessments of building energy performance, identify and oversee implementation of cost-effective retrofit measures, and guarantee energy savings to use as a source of loan repayment.

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Every 10 years, we have to count people. At least that's what Article 1, Section 2 of the Constitution says. It doesn't sound too complicated. But it is. Who gets counted, and how, determines not only congressional representation but how funding is distributed for a slew of federal programs that affect all of us. As we prepare to stand and be counted in 2010 -- and the U.S. Census Bureau is spending a lot of advertising money to make sure that everyone is -- let's note a few misconceptions about our population and the efforts to tally us up.

1. Immigration is the biggest force behind the nation's racial and ethnic diversity.

If immigration stopped today, we would still see substantial gains in our minority populations for decades to come. Recent Census Bureau projections showed that under a "no further immigration" scenario, the minority share of our population would rise from about 35 percent today to 42 percent in 2050. The preschool (under age 5 ) population would become minority white. The greater minority presence would arise from higher natural-increase rates for minorities than for the aging white population. This momentum is already in place: Since 2000, natural population increase accounted for 62 percent of the growth of Hispanics, the country's largest minority group, with immigration responsible for the rest.

Already, the District and four states (Hawaii, New Mexico, California and Texas) are minority white, and in six more, whites are less than 60 percent of the population. Minorities now make up more than 30 percent of the residents in half of the nation's congressional districts, compared with a quarter in 1992.

The census will tell us more about the dispersal of Hispanics and other groups to traditional white enclaves -- suburbs and the country's midsection. A majority of all Hispanic, black and Asian residents of major metro areas now live in the suburbs. And since 2000, according to recent estimates, the fastest Hispanic growth occurred in South Carolina, South Dakota, Tennessee and Arkansas.

Color lines within our population are blurring in a different way, too, with people who identify with more than one race. The number of mixed-race married couples more than doubled since 1990, and they make up nearly 8 percent of all marriages.

2. The country is getting uniformly older.

As a baby boomer, I am part of a demographic mob. As we age over the next 20 years, the nation as a whole will see a surge in senior citizens. But different parts of the country will be aging at different rates, largely because selective "younging" is going on. This is evident from census estimates showing that during the first nine years of this decade, 25 states -- mostly in the Northeast, Midwest and Great Plains -- and the District exhibited absolute declines in their child populations, while 25 others, led by Nevada and Arizona, showed gains.

This variation in where families and children live is poised to shape a young-old regional divide that could intensify over time. Census projections for 2020, made earlier this decade, showed median ages over 40 in Maine, West Virginia and Pennsylvania, compared with below 36 in Utah, Texas, Georgia and California.

3. Big states will keep getting bigger -- especially in Congress.

For much of the postwar period, the Sunbelt megastates of California, Florida and Texas just kept growing: They led all other states in adding congressional seats based on censuses since World War II. But the economic turbulence of this past decade will affect their political fortunes. Florida was one of the nation's growth leaders for the first half of the decade and was poised to gain as many as three congressional seats after the 2010 Census, tying or overtaking New York's congressional delegation. But the mortgage meltdown led to an unprecedented exodus from the state in the past two years. Florida's likely gain of one seat will be its smallest addition since the 1940 Census.

California is not positioned to gain any seats for the first time since statehood in 1850. Despite its status as an immigration magnet, the Golden State lost large numbers of people fleeing high housing costs during the bubble years. California might have even lost a seat had that bubble not burst.

Of the three Sunbelt behemoths, Texas will take the biggest prize, probably four congressional seats -- its largest increase since the 1880 Census. It was largely immune from the housing crisis late in the decade, while it gained Katrina-driven migrants from Louisiana.

4. The census is the main source of information about our population.

Not as much as before. Unlike previous censuses, the 2010 count will provide only bare-bones information that does little more than fulfill its constitutional mandate. The questions will include the age, sex, race, Hispanic origin and household relationship status of each individual, and the size and homeownership status of each household.

What happened to all the rich data on poverty, income, ancestry, immigration, marital status and some 30 other categories we have come to expect from the census? Those "long form" questions have been given to a sample of census respondents in every count going back to 1940 -- but they won't be handed out this year. The queries have been diverted to the Census Bureau's American Community Survey.

In 2005, the bureau began administering the ACS to 3 million households each year to elicit the same kind of information that was previously available only every 10 years. This large and sophisticated survey has already provided important and timely insights on changing poverty, immigration and migration patterns in this economic roller coaster of a decade.

5. New technology gives us much more demographic data than the census can.

Not true. Technological developments and data collected via the Internet do give us new ways of looking at the population, and complex surveys and estimates conducted by the Census Bureau and other organizations allow us to monitor change over the decade -- but there is no substitute for counting everyone. Aside from the census's constitutional mandate to provide the basis for congressional apportionment, a national headcount also allows us to know how many people live in the nation's cities, suburbs and neighborhoods and to break them down according to race, age and gender.

There are plenty of examples of a decennial census surprising the experts. The 2000 Census, for instance, discovered sharp population surges in many old, large cities. This was unanticipated for Chicago, which had experienced decades of decline. And the spread of the nation's Hispanic population into new states such as North Carolina far exceeded expectations.

Many government and private surveys, including the ACS, rely on the decennial census to make sure their work accurately reflects the population as a whole.

This census will also tell us more about small but growing groups, such as same-sex married partners and multiracial populations, whose presence and interests can change laws and public policies.

The Census Bureau's ad campaign urges Americans to answer "10 Questions in 10 Minutes" -- and those are still 10 very important questions, whose responses will guide us for the next 10 years.

      

Every 10 years — unfortunately, sometimes more frequently — legislative district lines are redrawn to balance population for demographic changes revealed by the census. What goes on is much more than a simple technical adjustment of boundaries, with ramifications that largely escape public notice.

Politicians often use redistricting as an opportunity to cut unfavorable constituents and potential challengers out of their districts. Barack Obama, for example, learned the rough and tumble of redistricting politics when Rep. Bobby Rush (D-Ill.) carved Obama's Chicago home out of Rush's congressional district after losing a 2000 primary challenge to Obama, then a state senator.

Incumbents can also use redistricting to move favorable constituents into their districts. Obama himself used the state legislative redistricting to extend his predominantly African American district north into a wealthy area of Illinois known as the Gold Coast. This new constituency allowed Obama to hone an effective biracial campaigning style that served him well when he ran for the U.S. Senate and the presidency.

Critically, these decisions are made with little or no public input or accountability. While Arizona and California are among the few states that give the public a chance to see and participate in how the boundaries are set, by using open redistricting commissions, most states gerrymander legislative lines behind closed doors. Figures from both major parties tilt the electoral playing field so much that one party is essentially assured of winning a given district, controlling the state legislature or winning the most seats in the state's congressional delegation. In other words, the democratic process is subverted. In this system, politicians select voters rather than voters electing politicians.

A 2006 Pew survey found that 70 percent of registered voters had no opinion about congressional redistricting. Among the few that expressed an opinion, some mistook the question to be about school districts rather than congressional districts.

For many reasons it has been hard to fault the public. An immense amount of population data must be sifted and then assembled, much like a giant jigsaw puzzle, to ensure that districts satisfy complex federal requirements relating to equal population and the Voting Rights Act, and varying state requirements that may include compactness and respect for existing political boundaries or communities. And access to these data and the software necessary to assemble and analyze them have long been out of public reach.

In the previous round of redistricting, according to a 2002 survey of authorities we conducted with our colleague Karin Mac Donald, most states did not provide any tools, facilities, dedicated assistance or software to support the public in developing redistricting plans. Many states failed to provide even minimal transparency by making data available, providing information about their plans online or accepting publicly submitted plans. Many redistricting authorities have not made firm plans to support transparency or public participation in the current round of redistricting.

In the coming year, however, technological advancements will enable anyone with a Web browser and an interest in how he or she is represented to draw district maps of his or her community and state that meet the same requirements as official submissions. Under the direction of scholars at the Brookings Institution and the American Enterprise Institute, and with consultation from an array of experts in redistricting issues, we have developed a set of principles for transparency and public participation. These principles have been endorsed by an array of stakeholders, including Common Cause and the League of Women Voters of the United States.

Americans will be able to participate directly in their democracy by offering plans to be compared with the politician-drawn maps. The public and even the courts will no longer have to accept that whatever is devised by politicians in the backroom.

The Wizard of Oz appeared powerful because he hid behind a curtain -- until it was pulled back. The time has come to pull back the curtain on redistricting. A good place to start is by passing Rep. John Tanner's Redistricting Transparency Act, which has 38 co-sponsors from both parties. If Congress will not act, state governments can follow the lead of the few states that provide for meaningful transparency and public participation. Failure to provide for transparency and public participation should be recognized for what it is: an obviously self-serving act, placing the interests of politicians above the public interest.

      

Presumptive Republican presidential nominee Donald Trump’s idea to withdraw American forces from Asia—letting allies like Japan and South Korea fend for themselves, including possibly by acquiring nuclear weapons—is fundamentally unsound, as I’ve written in a Wall Street Journal op-ed.

Among the many dangers of preemptively pulling American forces out of Japan and South Korea, including an increased risk of war between Japan and China and a serious blow to the Nuclear Non-Proliferation Treaty, such a move would heighten the threat of war between China and Taiwan. The possibility that the United States would dismantle its Asia security framework could unsettle Taiwan enough that it would pursue a nuclear deterrent against China, as it has considered doing in the past—despite China indicating that such an act itself could be a pathway to war. And without bases in Japan, the United States could not as easily deter China from potential military attacks on Taiwan. 

Trump’s proposed Asia policy could take the United States and its partners down a very dangerous road. It’s an experiment best not to run.

       

On the eve of the first anniversary of the Iran nuclear deal, Tehran has announced that Iranian-American Siamak Namazi (who has been detained since last October) and three other dual nationals have been charged with unstated crimes. Tehran’s acknowledgement of the charges—and the Obama administration’s anemic response to these arrests to date—underscore that managing tensions in the post nuclear-deal era remains complex, both for Washington and Tehran.

Siamak’s story

Last week, in a welcome but unavoidably symbolic gesture, Rep. Ed Royce (R-CA), chairman of the House Foreign Affairs Committee, and Rep. Gerry Connolly (D-VA) introduced a bipartisan resolution demanding that Tehran release Siamak, as well as his father Baqer. Siamak is a forty-something consultant who spent his formative years in the United States; his father, Baqer, served as a provincial governor under Iran’s monarchy and as a UNICEF official during his post-revolutionary exile. Outside their day jobs, both men long campaigned for greater engagement between Washington and Tehran. Like many in the Iranian diaspora, they returned to Iran whenever country’s shifting political winds seemed hospitable. 

It is a particularly cruel irony—and grotesquely consistent with the tactics of the Islamic Republic—that the diplomatic breakthrough that both Namazis hoped for precipitated their current nightmare. On the heels of the nuclear deal, Iranian security forces prevented Siamak from leaving the country; he was interrogated for months before he was brought to Iran’s infamous Evin Prison in October 2015. Then in February, Baqer was lured back to Iran on the false premise of visiting his jailed son; instead, he was arrested upon his arrival at the Tehran airport.

Unfortunately, their plight is not unique. Even after Tehran’s much-heralded release of five imprisoned Americans, including Washington Post reporter Jason Rezaian, in January, Tehran has arrested several other dual nationals on trumped-up charges. This includes Nizar Zakka, a Lebanese technology expert who holds a U.S. green card; Homa Hoodfar, a Canadian-Iranian academic; and Nazanin Ratcliff, a British-Iranian woman who was seized at the airport with her toddler daughter. They follow in the painful footsteps of many other dual nationals and countless Iranians arrested without cause.

Paranoia blues

You probably haven’t heard much about Siamak, Nizar, Nazanin, or Homa in the press. Some have deliberately avoided the spotlight, traumatized by their experience or hoping that an “inside strategy” to exert pressure within the system will generate results. It’s not hard; in the post-nuclear deal era, Iran’s abuses are overshadowed by ISIS atrocities, Brexit anxieties, and an unusually absurd American presidential campaign.

But Tehran’s targeting of Americans and others with foreign ties is a pattern that warrants public and policymakers’ attention, because it exposes the nature of Iran’s ruling system and the landscape for American influence in post-nuclear deal Iran. It may be tempting to dismiss these arrests on the grounds of bad luck or individual foolishness or the vagaries of Iran’s enduring power struggle. But none of those rationalizations—while perfectly plausible—does justice to the scope of the problem.

[T]hese arrests are purely political, the inevitable byproduct of a ruling system that is steeped in a culture of paranoia, particularly toward the West.

In fact, these arrests are purely political, the inevitable byproduct of a ruling system that is steeped in a culture of paranoia, particularly toward the West. As Iran’s leaders reopened to the world via the resolution of the nuclear impasse, they have instinctively sought to reinforce the ideological antipathies on which they built the post-revolutionary state. After all, flexing the muscles of theocratic authoritarianism offers a convenient way to persuade a population that is eager for change to steer clear of the temptations of globalization and “Westoxication.” Tehran’s deep-seated fears of a Western-orchestrated conspiracy to undermine the regime are echoed elsewhere; Egypt, China, and Russia have similarly clamped down on international organizations, with Americans and other foreign nationals caught in the crossfire.

For the Islamic Republic, seizing U.S. citizens is also a well-honed tactic for aggravating its foremost adversary in Washington. From the 1979 hostage crisis through the detention of U.S. sailors earlier this year, Iran’s insecure leadership appreciates the efficacy of using individual Americans as pawns in stoking bilateral tensions. It’s a maneuver that conveniently highlights the limits on Washington’s capacity to protect its own nationals abroad. As I wrote at the time of Rezaian’s arrest nearly two years ago: 

“When an Iranian-American is seized by the system, the world's sole superpower is forced to fall back on the least satisfying instruments of diplomatic influence: eloquent statements from the podium, third-party consular inquiries, and quiet efforts through cooperative interlocutors.”

The Congressional resolution appealing for the Namazis’ release represents an additional step in the right direction, but it also demonstrates the weakness of U.S. leverage in the wake of the nuclear deal. At the family’s behest, the resolution does not propose specific penalties that might; Siamak himself was a fierce critic of Washington’s use of sanctions as an instrument for influencing Iran policies. Unfortunately, that deference was probably unnecessary, as the Obama administration is particularly loathe to deploy new economic pressure against Tehran in these early days of the accord’s implementation. 

Shot in the foot

So these arrests go essentially unanswered, and the ripple effects deter Americans and Europeans from engaging in precisely the places and on precisely the issues where their contributions are most valuable. And when Washington appears unable to protect its own citizens from the long arm of Iranian repression, American advocacy on broader human rights issues carries even less credibility with Tehran. Given the proliferation of these cases around the world—launched by authoritarian regimes that fear a democratic contagion—Washington needs to devise an across-the-board strategy to counter intensifying efforts to target Western individuals and institutions. Imposing sanctions for each individual case would not be realistic or effective, but Washington should be prepared to deploy a clear, predictable and escalating set of responses for governments that routinely use American citizens as pawns for their authoritarian agendas.

For Tehran, dual nationals may seem like easy pickings, but ultimately these arrests—and the broad campaign of repression that has continued almost without interruption since the 1979 revolution—pose profound challenges for Iranian interests. After all, its far-flung, disproportionately well-educated, and wealthy diaspora could furnish Iran with a vast pool of talent and capital for its future development. But how many Iranian expatriates will trust their investments—and their personal freedom—to a system that baits 80 year old men into imprisonment and cleaves mothers from their young daughters (and then confiscates the baby’s British passport)? How can any foreign investor rely on official assurances and legal protections from a government that arrests individuals arbitrarily on the basis of wild-eyed conspiracy theories?

[U]ltimately these arrests...pose profound challenges for Iranian interests.

The risks should not be underestimated, and their repercussions will in time hit Iran hardest. This latest round of repression strikes at the very heart of what the nuclear deal was intended to accomplish—Iran’s rehabilitation from pariah status and its full reintegration into the global economy. Iranian leaders seem impervious to the one of the key lessons from their previous efforts to reopen the economy to the world: that provocative policies will undercut access to finance and the inclination of international investors.

Fundamentally, as I commented in January, after the Saudi embassy in Tehran was torched: 

“the requirements of any kind of resilient reentry to the global economy and achieving the stature that Iranians crave are simply incompatible with aspects of Iran’s official ideology. A state that refuses to rein in—or, more accurately, still relies on—semi-official vandalism will inevitably find its ambitions curbed instead…to fully come in from the cold, Tehran will have to disavow the revolution’s ideological imperatives.”

For an Iranian leadership that has complained incessantly about the slow pace of sanctions relief, there is an unabashed hypocrisy in this kind of self-sabotage, whose implications extend well beyond the economy. The arrests of dual nationals represent the tip of an iceberg of injustice that underpins—and will eventually undermine—the Islamic Republic. The stalwarts of the Iranian system have constructed an elaborate ideological and bureaucratic edifice aimed at preserving their own power. In the end, their disdain for rule of law and their phobias about Western influence represent greater vulnerabilities than any of the perceived threats that motivate the crackdown.

       

       

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As the 2016 election draws near, issues related to immigration and broader cultural change continue to dominate the national political dialogue. Now, an extensive new survey sheds light on how Americans view these issues. How do they feel about the proposed policy to build a wall on the U.S.-Mexico border or a temporary ban on Muslims entering the country? The survey of more than 2,500 Americans explores opinions on these questions and others concerning the current immigration system, immigrants’ contributions to American culture, and the cultural and economic anxieties fueling Donald Trump’s success among core Republican constituencies.

On June 23, Governance Studies at Brookings and the Public Religion Research Institute released the PRRI/Brookings Immigration Survey and hosted a panel of experts to discuss its findings. Additional topics explored in the survey and by the panel included perceptions of discrimination against white Americans and Christians, and the extent to which Americans believe that the uncertain times demand an unconventional leader.

Join the conversation on Twitter at #immsurvey and @BrookingsGov

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Although a few political analysts have been focusing on the white working class for years, it is only in response to the rise of Donald Trump that this large group of Americans has begun to receive the attention it deserves. Now, thanks to a comprehensive survey that the Public Religion Research Institute (PRRI) undertook in collaboration with the Brookings Institution, we can speak with some precision about the distinctive attitudes and preferences of these voters.

There are different ways of defining the white working class. Along with several other survey researchers, PRRI defines this group as non-Hispanic whites with less than a college degree, with the additional qualification of being paid by the hour or by the job rather than receiving a salary. No definition is perfect, but this one works pretty well. Most working-class whites have incomes below $50,000; most whites with BAs or more have incomes above $50,000. Most working-class whites rate their financial circumstances as only fair or poor; most college educated whites rate their financial circumstances as good or excellent. Fifty-four percent of working-class whites think of themselves as working class or lower class, compared to only 18 percent of better-educated whites.

The PRRI/Brookings study finds that in many respects, these two groups of white voters see the world very differently. For example, 54 percent of college-educated whites think that America’s culture and way of life have improved since the 1950s; 62 percent of white working-class Americans think that it has changed for the worse. Sixty-eight percent of working-class whites, but only 47 percent of college-educated whites, believe that the American way of life needs to be protected against foreign influences. Sixty-six percent of working-class whites, but only 43 percent of college-educated whites, say that discrimination against whites has become as big a problem as discrimination against blacks and other minorities. In a similar vein, 62 percent of working-class whites believe that discrimination against Christians has become as big a problem as discrimination against other groups, a proposition only 38 percent of college educated whites endorse.

This brings us to the issue of immigration. By a margin of 52 to 35 percent, college-educated whites affirm that today’s immigrants strengthen our country through their talent and hard work. Conversely, 61 percent of white working-class voters say that immigrants weaken us by taking jobs, housing, and health care. Seventy-one percent of working-class whites think that immigrants mostly hurt the economy by driving down wages, a belief endorsed by only 44 percent of college-educated whites. Fifty-nine percent of working-class whites believe that we should make a serious effort to deport all illegal immigrants back to their home countries; only 33 percent of college-educated whites agree. Fifty-five percent of working-class whites think we should build a wall along our border with Mexico, while 61 percent of whites with BAs or more think we should not. Majorities of working-class whites believe that we should make the entry of Syrian refugees into the United States illegal and temporarily ban the entrance of non-American Muslims into our country; about two-thirds of college-educated whites oppose each of these proposals.

Opinions on trade follow a similar pattern. By a narrow margin of 48 to 46 percent, college-educated whites endorse the view that trade agreements are mostly helpful to the United States because they open up overseas markets while 62 percent of working-class whites believe that they are harmful because they send jobs overseas and drive down wages.

It is understandable that working-class whites are more worried that they or their families will become victims of violent crime than are whites with more education. After all, they are more likely to live in neighborhoods with higher levels of social disorder and criminal behavior. It is harder to explain why they are also much more likely to believe that their families will fall victim to terrorism. To be sure, homegrown terrorist massacres of recent years have driven home the message that it can happen to anyone, anywhere. We still need to explain why working-class whites have interpreted this message in more personal terms.

The most plausible interpretation is that working-class whites are experiencing a pervasive sense of vulnerability. On every front—economic, cultural, personal security—they feel threatened and beleaguered. They seek protection against all the forces they perceive as hostile to their cherished way of life—foreign people, foreign goods, foreign ideas, aided and abetted by a government they no longer believe cares about them. Perhaps this is why fully 60 percent of them are willing to endorse a proposition that in previous periods would be viewed as extreme: the country has gotten so far off track that we need a leader who is prepared to break so rules if that is what it takes to set things right.

       

On June 23, Brookings hosted the release of the Immigrants, Immigration Reform, and 2016 Election Survey, a joint project with the Public Religion Research Institute (PRRI). The associated report entitled, How immigration and concern about cultural change are shaping the 2016 election finds an American public anxious and intensely divided on matters of immigration and cultural change at the forefront of the 2016 Election.

Dr. Robert Jones, CEO of PRRI, began the presentation by highlighting Americans’ feelings of anxiety and personal vulnerability. The poll found, no issue is more critical to Americans this election cycle than terrorism, with nearly seven in ten (66 percent) reporting that terrorism is a critical issue to them personally. And yet, Americans are sharply divided on questions of terrorism as it pertains to their personal safety. Six in ten (62 percent) Republicans report that they are at least somewhat worried about being personally affected by terrorism, while just 44 percent of Democrats say the same. 

On matters of cultural change, Jones painted a picture of a sharply divided America. Poll results indicate that a majority (55 percent) of Americans believe that the American way of life needs to be protected from foreign influence, while 44 percent disagree.  Responses illustrate a stark partisan divide:

74 percent of Republicans and 83 percent of Trump supporters believe that foreign influence over the American way of life needs to be curtailed.  Just 41 percent of Democrats agree, while a majority (56 percent) disagrees with this statement. Views among white Americans are sharply divided by social class, the report finds. While 68 percent of the white working class agrees that the American way of life needs to be protected, fewer than half (47 percent) of white college-educated Americans agree.

Jones identified Americans’ views on language and “reverse discrimination” as additional touchstones of cultural change. Americans are nearly evenly divided over how comfortable they feel when they encounter immigrants who do not speak English: 50 percent say this bothers them and 49 percent say it does not. 66 percent of Republicans and 77 percent of Trump supporters express discomfort when coming into contact with immigrants who do not speak English; just 35 percent of Democrats say the same.

 

Americans split evenly on the question of whether discrimination against whites, or “reverse discrimination,” is as big of a problem as discrimination against blacks and other minorities (49 percent agree, 49 percent disagree). Once again, the partisan differences are considerable: 72 percent of Republicans and 81 percent of Trump supporters agree that reverse discrimination is a problem, whereas more than two thirds (68 percent) of Democrats disagree.

On economic matters, survey results indicate that nearly seven in ten (69 percent) Americans support increasing the tax rate on wealthy Americans, defined as those earning over $250,000 a year. This represents a modest increase in the share of Americans who favor increasing the tax rate relative to 2012, but a dramatic increase in the number of Republicans who favor this position.

 

The share of  Republicans favoring increasing the tax rate on wealthy Americans jumped from 36 percent in 2012 to 54 percent in 2016—an 18 point increase. Democrats and Independents views on this position remained relatively constant, increasing from 80 to 84 percent and 61 to 68 percent approval respectively.

Finally, on matters of immigration, Americans are divided over whether immigrants are changing their communities for the better (50 percent) or for the worse (49 percent). Across party lines, however, Americans are more likely to think immigrants are changing American society as a whole than they are to think immigrants are changing the local community. This, Jones suggested, indicates that Americans’ views on immigration are motivated by partisan ideology more than by lived experience. 

At the conclusion of Dr. Jones’s presentation, Brookings senior fellow in Governance Studies, Dr. William Galston moderated a panel discussion of the poll’s findings. Karlyn Bowman, a senior fellow and research coordinator at the American Enterprise Institute, observed that cultural anxiety has long characterized Americans’ views on immigration. Never, Bowman remarked, has the share of Americans that favor immigrants outpaced the share of those who oppose immigrants. Turning to the results of the PRRI survey, Bowman highlighted the partisan divide influencing responses to the proposition that the United States place a temporary ban on Muslims. The strong level of Republican support for the proposal--64 percent support among Republicans--compared to just 23 percent support among Democrats has more to do with fear of terrorism than anxiety about immigration, she argued.

Henry Olsen, a senior fellow at the Ethics and Public Policy Center, remarked that many Americans feel that government should do more to ensure protection, prosperity, and security -- as evidenced by the large proportion of voters who feel that their way of life is under threat from terrorism (51%), crime (63%), or unemployment (65%).  In examining fractures within the Republican Party, Olsen considered the ways in which Trump voters differ from non-Trump voters, regardless of party affiliation. On questions of leadership, he suggested, the fact that 57% of all Republicans agree that we need a leader “willing to break some rules” is skewed by the high proportion of Trump supporters (72%) who agree with that statement. Indeed, just 49% of Republicans who did not vote for Trump agreed that the country needs a leader willing to break rules to set things right.

Joy Reid, National Correspondent at MSNBC, cited the survey’s findings that Americans are bitterly divided over whether American culture and way of life has changed for the better (49 percent) or the worse (50 percent) since the 1950s. More than two-thirds of Republicans (68 percent) and Donald Trump supporters (68 percent) believe the American way of life has changed for the worse since the 1950s. Connecting this nostalgia to survey results indicating anxiety about immigration and cultural change, Reid argued that culture—not economics—is the primary concern animating many Trump supporters.

       

Editors’ Note: Turkey’s failed coup may lead to the worsening of Europe’s migration crisis, writes Jessica Brandt. That’s because it could lead to the dissolution of a recent pact between Brussels and Ankara over the plight of refugees arriving on the European Union’s shores. This post originally appeared on Vox.

Turkey’s recent failed coup may lead to the worsening of Europe’s migration crisis. That’s because it could lead to the dissolution of a recent pact between Brussels and Ankara over the plight of refugees arriving on the European Union’s shores. Even before the events of last weekend, the fate of the agreement was uncertain amid quarrels between the parties. Now its future is even more in doubt.

Last year, more than a million migrants and refugees crossed into Europe, roiling politics across the continent. It’s a crisis EU chief Donald Tusk has described as an “existential challenge.”

Under the terms of the deal, Turkey agreed to accept the “rapid return of all migrants not in need of international protection crossing from Turkey into Greece and to take back all irregular migrants intercepted in Turkish waters.” In other words, almost all refugees who cross into Greece are slated to be returned to Turkish soil.

In return, the EU pledged to speed up the allocation of €3 billion in aid to Turkey to help it house and care for refugees, “reenergize” Turkey's bid for membership in the EU, and lift visa restrictions on Turkish tourists and businessmen.

But the European Commission has conditioned changes to the visa restrictions on better governance in Turkey. In particular, it requires a change in President Recep Tayyip Erdoğan’s controversial anti-terror law, which he has used to crack down on journalists and critics. Erdoğan was already adamantly against narrowing the law to protect free speech. Having now overcome a determined coup attempt, he is even less likely to do so.

Instead, it appears probable that he will further clamp down on civil liberties, acting on his authoritarian instincts and retaliating against his detractors. On Sunday, he suggested that he might reintroduce the death penalty, a practice Turkey abolished in 2004 as part of its bid for EU membership. Doing so would widen the gap in political culture between Turkey and Europe and, as German Foreign Minister Frank-Walter Steinmeier asserted forcefully on Monday in Brussels, derail the already limited possibility of reigniting accession talks.

The pact has already been strongly opposed by the European left, and particularly by humanitarian and human rights groups. Rising authoritarianism in Turkey would only increase resistance to the deal, making implementation even harder, especially if those groups were to scale back their activities on the ground.

That would not be without precedent. The United Nations High Commissioner for Refugees, Doctors Without Borders, and the International Rescue Committee, among others, have suspended some of their activities in refugee centers because they do not want to be involved in implementing a deal that they describe as constituting the blanket expulsion of refugees from Turkey back to Greece.

[A] crackdown could also undermine the legal basis of the agreement.

Crucially, a crackdown could also undermine the legal basis of the agreement. One of the agreement’s key provisions is that individuals who cross from Turkey into Greece will be sent back across the Aegean to Turkey. That hinges on the notion that Turkey is a “safe third country” for migrants. A crackdown could prompt refugees to argue that it isn’t.

If that were the case, deporting them to Turkey could be seen as constituting “refoulement”—the forcible return of asylum seekers to a country where they are prone to be subjected to persecution—which is forbidden under both international and EU law.

That’s a problem, since some analysts believe worsening conditions in Turkey could lead even more people seeking refuge to journey onward to Europe. In the past, Erdoğan has threatened to “open the gates” and send refugees streaming into Europe when displeased with the level of financial assistance from Brussels earmarked for managing the crisis. Preoccupied by troubles at home, he may see stability as in his interest and resist taking aggressive steps that would cause an open breach.

For both parties, finding a stable, though imperfect, accommodation—as they were poised to do prior to the events of last weekend—is still the most promising path forward. Let’s hope the parties take it. Managing Europe’s migration crisis depends on it.

       

       

       

Editor's Note: This discussion with John Turnbull, director of asset management at the Pike Place Market Preservation and Development Authority, is the first in a series of Q&As with urban practitioners for the Anne T. and Robert M. Bass Initiative on Innovation and Placemaking.

Pike Place Market in Seattle is a leading example of how intentional governance can help vibrant urban spaces reach their potential as platforms for innovation. John Turnbull, director of asset management at the Pike Place Market Preservation and Development Authority, sat down for an interview to tell us more about the market and the role of the Preservation and Development Authority (PDA) in its operation.

People outside Seattle tend to know Pike Place as a fish market, but it offers so much more. What makes the market special?

The Pike Place Market is a beloved part of Seattle and really unlike any other place. It’s open 363 days a year and provides space for local farmers, artisan vendors, and small businesses to thrive. It offers a wide range of social services, including a food bank, a health clinic, a senior center, child care and preschool, and assisted living for the elderly. It’s also home to nearly 500 residents who live in a mix of rent-subsidized apartments, market-rate units, and luxury condos as well as a boutique hotel and a bed-and-breakfast—all within the four-block district. Our sense of place depends on the permeability of private/commercial/public spaces, and we make a great effort to ensure that the corresponding mix of activity creates space for personal interactions.

Public support has always been a key component of the market’s success. It was first established in 1907 in response to public demand for fresh produce at fair prices. Seattleites kept the market from the wrecking ball in the 1960s and 1970s and have consistently provided public funds for capital investments—even in the midst of the Great Recession.

The market’s focus on supporting local independent business and one-to-one relationships is unique enough to create both a community sense of identity—Seattle’s “soul”—and an attraction for tourists and visitors. This has been part of the market’s identity for more than a century and has continued under the PDA’s stewardship these last 40 years.

How does the market operate? Who’s in charge?

The market’s been around since the early 1900s but its current governance structure dates back to the 1970s, when the market was almost leveled in the name of urban renewal. A group called Friends of the Market formed to fight the city’s redevelopment plans and in 1971 ran a successful ballot measure campaign to save the market. That ballot measure established the Market Historic District and created the Pike Place Market Historical Commission to make decisions about future construction and capital investments.

Commissioners are appointed by the mayor, half from a list drawn up by community organizations and half from people who live, conduct business, and own property in the market district. The commission was created to keep city government from dismantling the market, so its decisions on use, design, and business management are final, not just advisory. Overturning a commission decision requires a court appeal—and even then, appeals can be based only on questions of fair process and/or failure to follow commission guidelines.

The commission reworked the urban renewal plan to preserve the architectural and social fabric of the market. To support these goals, the city created an independent Preservation and Development Authority to oversee financial operations, development, and day-to-day management of the market. The charter [document download] that established the PDA in 1973 continues to be a guiding force for us—we refer to it all the time. It defines the PDA’s specific powers and responsibilities, which include managing the properties in the Market Historic District, supporting local farmers and small-business owners, and providing social services for low-income residents and others in the market community. Funding for social services and programs is coordinated by the Pike Place Market Foundation, which is separate from the PDA. 

How are decisions made?

The PDA executive director and staff handle day-to-day business operations, but most decisions concerning contracts, tenant relations, budgets, and the like are finalized by the PDA Council, a group of 12 volunteers who are appointed for four-year terms by either the mayor, the Pike Place Market Constituency, or the PDA Council itself (each appoints four councilmembers).

The charter created the PDA as a public steward for the market that’s much more nimble than a governmental agency and much more accountable to the surrounding community. The charter requires unusual transparency, including public meetings to approve any expenditures over $10,000; bond issues; donations made by the PDA; and adoption of the annual budget and capital budget. Meanwhile, new businesses, changes in business ownership, and modifications to buildings require approval from the Market Historic Commission, which has regular biweekly meetings that include time for public comment. Nothing happens behind closed doors.

How does the PDA get its funds and how is that funding deployed?

Over 60 percent of our revenue comes from commercial tenants, with residential rents, daystall rents and fees, parking fees, and incomes from various programs and investments making up the rest. This year we expect total revenues over $18 million, which is more than $1 million more than we projected for 2015.

About three-quarters of budgeted expenses come from tenant services, which include everything from maintenance and security to insurance, utilities, and property management. Another 14 percent goes to PDA management and administration, and the last 10 percent goes toward marketing and other programmatic expenses.

The charter also gives the PDA bonding authority, which we used for the first time this past year. The $26 million in bonds will pay down existing debt and finance the new MarketFront expansion that’s slated to open next year.

The PDA Council operates the market as a business, but it doesn’t make decisions strictly based on profit. We think about return on investment in terms of social benefit to the community. The council looks at a whole host of qualitative measures that aren’t easily captured by quantitative metrics. For instance, how do you measure “local pride”? That’s why we end up referring to our charter so often—and also why we encourage our constituents to use the charter guidelines to measure our results. 

So through the council and the charter, we’ve created a form of community-oriented economics that keeps us accountable to our constituents and lets us reinvest earnings to provide social services and keep residential and commercial rents low.

Lots of places are looking to innovation as a way to drive sustainable economic growth. Do you see Pike Place Market as a place for innovation?

Innovation is an important aspect of what happens in the market, though it looks different from what you might see in other more tech-oriented innovation districts. We offer highly localized small business incubation that’s focused on building a strong local economy. By providing a supportive environment for new businesses and strictly limiting opportunities to new ventures that haven’t yet built a customer base, we’ve created an active laboratory for experimentation.

We have a history of providing a solid base for new businesses—especially ones that are food-related. Starbucks, Sur La Table, and a large number of specialty food businesses got their start in the market. And there are an equally large number of culinary ventures whose lead chefs look to the market as a central source of inspiration and community. We support economic growth by helping new ventures get established—which for many involves developing an international presence—while also attracting customers to spend money in our community.

Seattle has grown by leaps and bounds in recent years, thanks in large part to a vibrant tech sector. How has this affected Pike Place Market?

Over the last few years, we’ve seen some significant changes in shopping patterns. Lots of neighborhoods now have weekly farmers’ markets, and grocery stores have been moving toward a more market-like shopping experience, which has meant fewer people shopping for groceries at the market. We’re also seeing more millennials and a lot more tourists, especially in the summer.

These changes got us thinking about what the market needs to do to stay relevant. Bringing in new businesses and younger entrepreneurs is part of this strategy, as are initiatives like our pop-up Express Markets, which bring fresh produce to different locations throughout the city mid-June through September. This summer we’re starting a weekly evening market at Pike Place so that local customers can shop without having to wade through the weekend tourist crowds.

We’ll always be hyper-local and focused on building a strong community of market patrons and vendors. That emphasis on personal connection sets the market apart—it’s something you just can’t replicate with e-commerce. 

       

       

       

       

       

       

       

There's been a lot of talk of Pittsburgh's "new economy" as a key reason for the city's star turn as host of this week's G-20 summit, but little has been said about the region's "next economy" -- what comes after the current slump.

It's beginning to be created under our noses.

Though seemingly abstract, the G-20's big-picture decisions -- on dialing down the extraordinary fiscal and monetary steps taken in the past year, building a new regulatory architecture for global finance, and starting the process towards a more balanced global economy and sustainable future -- have big implications for metropolitan areas.

Pittsburgh's stake in the G-20 deliberations goes beyond filling up local hotels and restaurants or hiring additional police -- and even beyond showcasing the region's resilience to the recession.

The fact is that Pittsburgh already is a global metropolis, with deep and growing ties to many of the G-20 countries because of its position as a supplier to the global steel industry (and still a maker of some types of steel), its burgeoning involvement in clean-energy sectors and its established position as a global center of education and health care.

Bayer, the German pharmaceutical conglomerate, has its U.S. headquarters in Pittsburgh, employing some 2,700 workers, including 1,200 at local medical-device manufacturer Medrad. Gamesa, the Spanish wind-energy giant, opened its first North American plant in Ebensburg, about 75 miles east of Pittsburgh. All told, more than 300 international firms from 26 different countries operate in the region, employing tens of thousands of people.

Pittsburgh's goods and services exports make up more than 14 percent of the region's gross metropolitan product, with the lion's share of goods headed to Canada, China, Japan and major economies in Europe -- all G-20 partners.

Given Pittsburgh's global status, the G-20 discussions have substantial implications for the future of the region's $100 billion economy.

The big question, at this summit and others in the future, is how to rebalance the global economy. The Great Recession followed a period of excessive consumption in the United States as Americans spent more on homes and consumer goods than they produced.

The fix is easy to state, but difficult to engineer. As Larry Summers, the head of the White House National Economic Council, said recently, "The rebuilt American economy must be more export-oriented and less consumption-oriented."

This rebalancing will require major and sustained action on currency values and trade policy in the United States as well as in large export economies like China, Germany and Japan (which will need to consume more). As this occurs, U.S. metro areas like Pittsburgh could benefit substantially given their unique assets and special niches.

While this won't quite be a 21st-century version of the equation "what Pittsburgh makes, the world takes," the combination of a more export-oriented trade policy and higher costs for carbon emissions (also to be discussed at the G-20 summit) present the region's economy with both opportunities and threats.

On the plus side, Pittsburgh could export more to the rest of the world and its steel-industry suppliers could benefit from increased exports by U.S. steelmakers. Higher prices for gasoline and jet fuel could mean that manufacturers and retailers in the United States would move away from far-flung networks of global suppliers and rely more on U.S. companies.

There is a potential downside for Pittsburgh, as well: for instance, as steelmakers in Germany and other countries export less and face higher costs of using U.S.-based suppliers, they might rely less on machinery and repair services from Pittsburgh.

To help ensure that the benefits of a rebalanced U.S. economy and a new climate regime outweigh the costs to the Pittsburgh area, local corporate, labor, political, university and civic leaders need a sharp regional business plan to guide the economic policies and innovation investments that they and the federal and state governments make in the Pittsburgh area.

Pittsburgh will have to continue to reclaim polluted industrial "brown fields" for post-industrial use -- an example for cities around the country and world.

Pittsburgh also will need to figure out how to draw more international traffic to its metropolitan airport, which currently offers only one direct flight to Europe.

The upshot: It is time for U.S. metropolitan regions to become more globally fluent and for national leaders to connect their big-picture policies to the fortunes of the urban areas that drive their economies. Only in this way can the United States, and Pittsburgh, move to the next stage of their economic evolution.

       

The “diversity explosion,” described in my recent book, is altering all parts of American life but particularly the lives of our younger population. As the white population ages and whites continue to decline in numbers among our under-30 population, as recent Census tabulations project, a growing portion of America’s children are racial minorities from a kaleidoscope of backgrounds in terms of their parents’ or grandparents’ place of birth. Origin countries include Mexico, China, the Philippines, India, Vietnam, El Salvador, Korea, the Dominican Republic, Guatemala, Jamaica, Colombia, Haiti, Honduras, Ecuador, Peru, Taiwan, Brazil, and others. 

A dramatic remaking of the nation’s child population is under way; in growing parts of the country growth of the child population is synonymous with the growth of minority children. More than one-third of the 100 largest metropolitan areas now have minority-white child populations. California and Texas house the largest number of these metropolitan areas, and Hispanics constitute the largest minorities. Florida, Georgia, and Arizona each contain more than one of these metro areas; the newest include Atlanta, Orlando, and Phoenix. And in many other “whiter” areas, such as Allentown, Pa. on the periphery of the New York megalopolis, the share of minorities among children is increasing. 

Of course, metro areas such as Los Angeles, Miami, and New York are used to accommodating large numbers of young children from dozens of foreign countries. Yet the first-generation immigrant children in large sections of the Southeast and Mountain West and scattered parts of “middle America” represent the front lines of the country’s diversity explosion. For an overview of U.S. county profiles by race and age, see the U.S. interactive map.

Material adapted from Diversity Explosion: How New Racial Demographics Are Remaking America by William H. Frey, 2014.

       

       

       

       

Egypt needs a new inclusive and equitable economic growth model. Unemployment has spiked since the 2011 revolution, clearing over 12 percent, a figure which is not expected to decrease for several years at least and the situation is even more dire for the country’s youth. While the likely IMF program will offer the macroeconomy a measure of relief, it cannot reverse decades of mismanagement. Egypt’s private sector may therefore not experience a recovery in the near future. The government’s situation looks similarly stressed as its gross debt is projected to rise from 73 percent of GDP in 2010 to 79 percent this year. Combined with the confusion surrounding the government’s structure and organization, it is unlikely that the public sector can fill the jobs gap or provide the needed high quality and affordable goods and services. However, the legal limbo surrounding inclusive business models (IBs) as well as intermediary support organizations (ISOs), which are supposed to provide the needed support to IBs, has unnecessarily shrunk this sector of the economy and disabled it from playing its necessary role.

In his inaugural speech, Egyptian President Mohamed Morsi portrayed himself as a president for all Egyptians, including the menial and underprivileged rickshaw drivers. The Muslim Brotherhood’s Al-Nahda Program emphasizes social justice and a consensus vision across all groups in society. The new leadership is committed to social innovation with “a national strategy to develop mechanisms to support innovation dealing with community issues.”

Although the constitution has not yet been drafted and there is currently no parliament, this moment in time contains a golden opportunity for the government of Egypt to capture the energy, civic engagement and entrepreneurial spirit in the country. Under Mubarak, Egypt’s economic growth and business policy reforms helped foster the private sector, but 85 percent of the population continued to live under $5/day and this ratio did not change during the decade of growth prior to 2008. Safeguards against abuse and incentives for inclusiveness were missing, and the economy became dominated by crony capitalism with wealth concentrated in the hands of a few. People’s perception of inequity and dissatisfaction with public services increased. The governance indicators of “Voice & Accountability” and “Control of Corruption” deteriorated from 2000 to 2010, even though there was a steady improvement in “Regulatory Quality.”

Egypt needs an enabling legal framework to promote a more equitable growth model. Such a framework should encourage forms of inclusive businesses (such as cooperatives) and ISOs that could help micro and small enterprises. These firms (with less than 50 employees) represent nearly 99 percent of all non-public sector, non-agricultural firms and provide about 80 percent of employment in Egypt. But their expansion has been restricted because of the weakness of the ecosystem of incubators, angel investor networks, microfinance institutions (MFIs) and impact investors necessary to allow young entrepreneurs to start up and grow. This policy paper argues that legal and regulatory reforms that encourage ISOs and allow new forms of inclusive business to register and operate are a necessary first step towards a new inclusive growth model.

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The United Nations will convene a major international conference on Financing for Development (FfD) in Addis Ababa, Ethiopia from July 13 to 16, 2015, to discuss financing for the post-2015 agenda on sustainable development. This conference, the third of its kind, will hope to replicate the success of the Monterrey conference in 2002 that has been credited with providing the glue to bind countries to the pursuit of the Millennium Development Goals (MDGs).

The analogy is pertinent but should not be taken too far. The most visible part of the Monterrey Consensus was the commitment by rich countries to “make concrete efforts towards the target of 0.7 percent of gross national product” as official development assistance (ODA). This was anchored in a clear premise that “each country has primary responsibility for its own economic and social development,” which includes support for market-oriented policies that encourage the private sector. While not all of the Monterrey targets have been met, there has been a considerable increase in resources flowing to developing countries, as a central plank of efforts to achieve the MDGs.

Today, aid issues remain pivotal for a significant number of countries, but they are less relevant for an even larger number of countries. The core principles of Monterrey need to be reaffirmed again in 2015, but if the world is to follow-through on a universal sustainable development agenda, it must address the multi-layered financing priorities spanning all countries. A simple “30-30-130” mnemonic helps to illustrate the point. There are 193 U.N. member states. Of these, only around 30 are still low-income countries (33 at the latest count). These are the economies that are, and will continue to be, the most heavily dependent on aid as the world looks to how it should implement the sustainable development goals (SDGs). Conversely, there are only around 30 “donor” countries (including 28 members of the OECD Development Assistance Committee, or DAC) that have made international commitments to provide more aid. For the remaining 130 or so emerging middle-income economies that have achieved higher levels of average prosperity, aid discussions risk forming a sideshow to the real issues that constrain their pursuit of sustainable development. The bottom line is that for most countries, the Financing for Development conference should unlock finance from many different sources, including but not exclusively aid, to implement the SDGs.

Addis will take place in the context of sluggish global growth, an upsurge in conflict, considerable strains in multilateral 2 political cooperation, and challenging ODA prospects in many countries.

There are other differences between Addis and Monterrey. Monterrey took place after agreement had been reached on the MDGs, while Addis will precede formal agreement on the SDGs by a few months. Monterrey was focused on a government-to-government agreement, while Addis should be relevant to a far larger number of stakeholders—including businesses, academics, civil society, scientists, and local authorities. Monterrey was held against a backdrop of general optimism about the global economy and widespread desire for intensified international collaboration following the terrorist events of September 11, 2001. Meanwhile, Addis will take place in the context of sluggish global growth, an upsurge in conflict, considerable strains in multilateral political cooperation, and challenging ODA prospects in many countries. In addition, regulators are working to reduce risk-taking by large financial institutions, increasing the costs of providing long-term capital to developing countries.

Against this backdrop, an Intergovernmental Committee of Experts on Sustainable Development Finance (ICESDF) crafted a report for the United Nations on financing options for sustainable development. The report provides an excellent overview of issues and the current state of global financing, and presents over 100 recommendations. But it falls short on prescribing the most important priorities and action steps on which leaders should focus at Addis.

This paper seeks to identify such a priority list of actions, with emphasis on the near-term deliverables that could instigate critical changes in trajectories towards 2030. At the same time, the paper does not aim to describe the full range of outcomes that need to be in place by roughly 2025 in order to achieve the SDGs by their likely deadline of 2030. Addis will be a critical forum to provide political momentum to a few of the many useful efforts already underway on improving global development finance. Time is short, so there is limited ability to introduce new topics or ideas or to build consensus where none already exists.

We identify three criteria for identifying top priorities for agreement in Addis:

• Priorities should draw from, and build on, on-going work—including the ICESDF report and the outputs „„of several other international workstreams on finance that are underway.
• Agreements should have significant consequences for successful implementation of the SDGs at the coun„„try, regional or global level.
• Recommendations should be clearly actionable, with next steps in implementation that are easy to under„„stand and easy to confirm when completed.

It is not necessary (or desirable) that every important topic be resolved in Addis. In practical terms, negotiators face two groups of issues. First are those on which solutions can be negotiated in time for the July conference. Second are those for which the problems are too complex to be solved by July, but which are still crucial to be resolved over the coming year or two if the SDGs are to be achieved. For this second group of issues, the intergovernmental agreement can set specific timetables for resolving each problem at hand. There is some precedent for this, including in the 2005 U.N. World Summit, which included timetables for some commitments. What is most critical is that the moment be used to anchor and advance processes that will shift toward creating a global financing system for achieving sustainable development across all countries. Committing to timetables for action and building on reforms already undertaken could be important ways of enhancing the credibility of new agreements.

In this paper, we lay out nine areas where we believe important progress can be made. In each area, we start from identifying a gap or issue that could present an obstacle to the successful implementation of the SDGs if left unattended. In some cases the gaps will affect all countries, in other cases only a subset of countries. But we believe that the package of actions, taken as a whole, reflects a balance of opportunities, responsibilities and benefits for all countries. We also believe that by making the discussion issue-focused, the needs for financing can be balanced with policy actions that will be required to make sure financing is effectively and efficiently deployed.

In addition to the nine areas listed below, there are other commitments already made which have not yet been met. We urge renewed efforts to meet these commitments, but also recognize that political and financial realities must be managed to make progress. Such commitments include meeting the Monterrey Consensus target to provide 0.7 percent of GNI in official development assistance (ODA), the May 2005 agreement of all EC-15 countries to reach that target by 2015, and bringing the Doha Development Round of trade talks to a successful conclusion. These remain important and relevant, but in this paper we choose to focus on new areas and fresh ideas so as to avoid treading over well-worn territory again.

       

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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