2014 was a relatively friendless year for the Democratic Republic of Korea (DPRK or North Korea). It publicly lost its best friend and patron, China, to its erstwhile nemesis, the Republic of Korea (ROK or South Korea), when Presidents Park Geun-hye and Xi Jinping celebrated their growing friendship at the July summit in Seoul. Recently, retired PLA General Wang Hongguang wrote in the Chinese language site of Global Times, which is closely linked to the Chinese Communist Party, that China tired of cleaning up North Korea’s “mess” and would not step in to “save” North Korea if it collapses or starts a war.[1] And there is a vigorous debate in Beijing on whether the DPRK should be treated on a “normal” basis with China’s interests as the sole guide and purpose or be treated as a special case needing China’s indulgence and protection.[2] Since the Sony hack of November, North Korea has been under tighter scrutiny, both real and virtual, by Seoul, Beijing and Washington, accompanied by tighter sanctions in the new year. Bludgeoned by global condemnation of its atrocious human rights record, Pyongyang’s pariah status has intensified. Only Russia has been warming up to North Korea out of its own economic and political self-interest.

Is there any sizable country with good intentions for the region that is not giving up or beating up on North Korea? Is there any country Pyongyang likes and possibly even trusts? Mongolia stands out as the sole candidate, and it is friendly with both the East and the West.

Since the 2000s, Mongolia has played an increasingly constructive and steady role in in its bilateral ties with the DPRK and in its promotion of peace and cooperation in Northeast Asia. President Tsakhiagiin Elbegdorj, who visited Pyongyang in 2013, was the first head of state to reach out to the DPRK since Kim Jung Un assumed power and helped author the “Ulaanbaatar Dialogue on Northeast Asia Security,” which held its first meeting in June, 2014. It is a unique forum that combines official (track one) and unofficial academic/think tank/NGO (track two) participants, on a variety of important regional issues. The goals are to decrease distrust among nations and increase cooperation and peace. Both the DPRK and the ROK (Republic of Korea or South Korea) were represented at the inaugural meeting, as were the United States, China, Russia, Japan, and some European nations.

The UB Dialogue, as a consultative mechanism, has the potential to bring together policymakers, international organizations such as the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and civil society entities and facilitate a range of initiatives related to economic cooperation; military transparency; environmental issues; non-traditional security threats; regional stability, cultural and educational exchange among the participants, including the two Koreas. These are official agenda items and goals of the UB Dialogue. With the Six-Party Talks nearly defunct and inter-Korean relations unable to address regional issues that affect the peninsula, Mongolia may be able to serve as a “Geneva or Helsinki of the East” as some observers have suggested.

Mongolia’s expanding global presence

Mongolia is uniquely positioned as the only country in Northeast Asia that enjoys good relations not only with North Korea but also South Korea, the United States, China, Russia, and Japan.

Mongolia’ relations with the United States, Canada, and Western Europe have steadily improved and deepened since the late 1980s. In recent decades, both Democratic and Republication administrations in Washington have enjoyed mutually warm and collaborative relations with Mongolia. President George W. Bush was the first sitting U.S. president to visit the country in 2005; he thanked the Mongolians for sending troops to join U.S.-led forces in Iraq and Afghanistan and for supporting anti-terrorism initiatives. Former Secretary of Defense Donald Rumsfeld also visited in the same year. In 2007, President Nambaryn Enkhbayar visited Washington to co-sign the Millennium Challenge Corporation Compact with President Bush. The next (and current) leader, President Elbegdorj, met U.S. President Barack Obama at the White House in 2011, as did the first civilian Minister of Defense, L. Bold. Vice President Joe Biden included Mongolia on a three-country Asia visit in August, 2011; China and Japan were the other two. A year later, Secretary of State Hilary Clinton took her turn in Ulaanbaatar. The most recent visit by top-level U.S. officials to Mongolia was by Secretary of Defense Chuck Hagel in April 2014.

Mongolia’s pursuit of the “third neighbor” policy allows the country to develop cooperative relations with the United States, Western Europe, ASEAN nations and others partly as “an air pocket” from its economic and security reliance on Beijing and Moscow. The softer side of this diplomatic push has been demonstrated by Ulaanbaatar’s membership in the Organization for Security and Cooperation in Europe and its previous chairmanship of the Community on Democracies.”[3]

Western experts on Mongolia applaud the way the country has developed a unique “peacekeeping niche” that facilitates participation in UN peacekeeping activities, international anti-terrorism measures, and humanitarian actions. For its small population of about three million, Mongolia takes on a heavy load of peacekeeping activities, ranking 26^th on the UN’s list of contributing nations.[4]

Since 2003, Mongolia annually hosts the “Khaan Quest” peacekeeping exercises for the purpose of tactical advancement and capacity building for its Mongolian Armed Forces (MAF) and for the improvement of regional confidence building. Although the United States and NATO play prominent roles, the Quest has attracted more diverse participants over the years so that by 2012, the number of interested parties expanded to include representatives from China and India as well as an array of developing nations such as Vietnam and Cambodia. These exercises are acknowledged as gatherings devoted to strengthening international cooperation and interoperability on peacekeeping initiatives around the world.[5]

On the economic side, Mongolia has been diversifying its external relations, with the maintenance of sovereignty and the related desire to reduce its overwhelming dependence on China as important goals. Expansion of economic relations is driven in part by a desire to participate in and benefit from global standards investment funds, and market access is a national priority. In that context, Mongolia’s relations with the West have been constructive and collaborative. For example, in 2013, the United States Trade Representative Michael Froman and Mongolia's Minister for Foreign Affairs, Luvsanvandan Bold, signed the Agreement on Transparency in Matters Related to International Trade and Investment between the United States of America and Mongolia. The Agreement commits the parties to provide opportunities for public comment on proposed laws and regulations and to publish final laws and regulations in Mongolian and English in order to facilitate access, openness, fairness, and procedural coherence in international trade and investment between Mongolia and other countries. “Additional commitments address the application of disciplines on bribery and corruption.” This type of administrative and legal modernization and the incorporation of measures to prevent and correct corruption are exemplary measures that could be helpful to the DPRK and other countries that are unfamiliar with or lagging in appropriate frameworks for doing business with diverse international actors.

Maintaining sovereignty between giants

China and Russia have vied for influence over Mongolia for many decades, from the time when Mongolia was in the Soviet sphere in influence to the present. Although 89 percent of foreign trade in 2013 was with China and Russia provides about 75 percent of Mongolia’s gasoline and diesel fuel and much of its electricity, Ulaanbaatar is assertively broadening and deepening its economic interests with the two big neighbors, especially greater transportation access and cheaper costs (vital to the landlocked nation), participation in the development of the New Silk Road corridor, and the construction of a Russian oil and gas pipeline through Mongolia that reaches China. All three countries have mutual interests and investments in developing Mongolia’s well-endowed mining industry.

But being sandwiched between two giants means Mongolia has to be prudent in preserving its sovereignty and independence, and Ulaanbaatar has done so in practical ways, balancing the two large powers’ interests with its own. The 2010 National Security Concept’s “One-Third Clause” sets a clear limit on the proportion of foreign direct investment from any one country: one-third. Legislation limits (foreign) state-owned companies from gaining control of strategic assets. And as numerous bilateral security and military cooperation agreements link Mongolia with China and Russia, UB has strategically and legally created elbow room for its autonomy. The government’s National Security and Foreign Policy Concepts outline a specific policy of not allowing foreign troops the use of its territory. Such preservationist measures to maintain sovereignty and independence in economic and security terms would be welcome examples to a North Korea which zealously prioritizes national sovereignty.

Mongolia and the Korean peninsula

Mongolia’s potential role as a non-nuclear peace broker in the region was further evidenced by its successful hosting of DPRK-Japan negotiations since 2012, which have yielded bilateral progress on longstanding abduction issues. In March 2014, Ulaanbaatar hosted the first-ever reunion between the parents of one of the abductees, Megumi Yokota (whom North Korea claims is dead), and her daughter, son-in-law, and their child who live in North Korea. Mongolia also served as a neutral venue for high-level talks on normalizing Japan-DPRK relations back in September 2007 as part of the Six-Party Talks framework. Asia Times reported that “arranging this recent meeting reflected Ulaanbaatar's ‘contribution to satisfy regional stability in Northeast Asia’ and how it could play a role in deepening understanding and normalizing DPRK-Japan relations.” President Elbegdorj's administration took particular care in staging the negotiations, including the use of the official state compound in Ikh Tenger as the meeting place. According to Alicia Campi, an American expert on Mongolia and the author of the AT article, Ikh Tenger was requested by the North Koreans.[6]

Mongolian President Elbegdorj is often described as an activist head of state, both for his focused efforts on developing Mongolia internally and advancing the country’s role and contributions internationally. One of his main foreign policy priorities is to promote regional economic integration and cooperation and peace and security. Dialogue and trust-building, two key components of his approach, coincide with ROK President Park Geun-hye’s emphasis on trustpolitik and the proposed Northeast Asia Peace and Cooperation Initiative (NAPCI). Both NAPCI and the UB Dialogue seek to chip away at distrust among Northeast Asian countries and increase collaboration and cooperation through multi-layered activities, including mutually reinforcing Track 1, 1.5 and 2 gatherings. Both emphasize multilateral cooperation on non-traditional security issues and people-to-people exchanges as ways to help build trust and resolve regional problems step by step. NAPCI held a track 1.5 forum in October 2014 in Seoul. In sharp contrast to its reaction to the first UB Dialogue of June that year, the DPRK flatly rejected the invitation to participate in the Seoul dialogue and criticized NAPCI as a cover for pressuring Pyongyang to relinquish its nuclear program and for reunification by absorption.[7]

There is no reason why the Ulaanbaatar Dialogue and NAPCI cannot be complementary and mutually reinforcing. Given that trust in inter-Korean relations is non-existent while Mongolia has gained deeper trust with both Koreas over the past two decades, NAPCI activities could benefit from Mongolia’s unique position in its relations with the DPRK. Ulaanbaatar potentially can serve as a neutral meeting ground, literally and metaphorically, for Pyongyang and Seoul. Moreover, given that the NAPCI seeks to maintain a cooperative relationship with other multilateral bodies and places emphasis on complementarity and inclusiveness, working with and supporting successful rounds of the UB Dialogues would be a principled move on the part of South Koreans. Moreover, engagement with North Korea through the UB Dialogue most likely represents an easier path to increasing inter-Korean trust than bilateral efforts and even easier than the NAPCI. South Korea’s domestic divisions and bitter left-right infighting tend to weaken the government’s position in approaches to the North. Seoul’s military standoff and competition with the North, its alliance with the United States, and participation in international sanctions regimes all cause suspicion in Pyongyang. In short, Seoul’s complex list of concerns and goals, some of which are contradictory to the spirit and practice of trust-building and cooperation with North Korea, create difficult conditions for progress through NAPCI alone.

In addition to lacking this baggage, Mongolia has unique standing with both North and South. It is a former Soviet satellite state that asserted full independence in 1990, and it is notable for successfully transitioning from a communist state to a vibrant democracy without civil war or bloodshed. President Elbegdorj’s 2013 speech in Pyongyang contained strong enunciation of the tenets of liberty. At the elite Kim Il Sung University in Pyongyang, he addressed students with these bold words: "No tyranny lasts forever. It is the desire of the people to live free that is the eternal power." And the Mongolian government has been keeping its border open to North Koreans who risk the arduous journey out of the DPRK and has permitted its airlines to transport them to South Korea.

Additionally, Mongolia has become a model of economic modernization and prosperous participation in the global economy. Although it faces some economic imbalances, its GDP rate was sky-high at 11.7 percent in 2013. There are good lessons to share with North Korea, and President Elberdorgj has made it clear that Mongolia would be very willing to work with the DPRK on economic development, IT, infrastructure, the management of mining precious earth resources and refineries. The two countries also engage in a worker exchange program, affording DPRK citizens the opportunity to breathe the air of freedom and to be exposed to South Korean television programming while they reside in Mongolia.

In recent years, Mongolia has pursued multiple types of people-to-people activities involving North Koreans, including academic exchanges, northeast Asian mayoral forums, and women’s parliamentary exchanges including female leaders from both Koreas. In June 2015, the second Track 2 conference of the UB Dialogue will convene in Ulaanbaatar with scholars from across the region and the United States with the theme of “Energy, Infrastructure, and Regional Connectivity.”

Sports and cultural initiatives in the past years have included international boxing matches in Ulaanbaatar with boxers from the DPRK, ROK, Mongolia, Russia and China. In 2013, Mongolia established an International Cooperation Fund which has supported children’s summer camps, basketball training and other exchanges with the DPRK in order to promote positive peace and people-to-people development in the region.

In the humanitarian arena, food aid to the DPRK has been channeled through international organizations, and the two countries have cooperated on physician exchanges. Prior research by Caprara and Ballen, conducted in cooperation with United Nations Special Envoy for Financing the Health Millennium Development Goals and for Malaria, has noted the additional soft power benefits of cooperative service development projects.

A recent global development forum hosted at the United Nations Asia-Pacific headquarters in Bangkok launched an Asia Pacific Peace Service Alliance which could build on these bilateral and regional exchanges in the critical area of humanitarian action and development in North Korea. An International Youth Leaders Assembly has been proposed in Ulaanbaatar for June, 2015, which would further the role of youth in fostering track two initiatives of service and dialogue.

Dr. Tsedendamba Batbayar, Mongolia’s Director of Policy Planning in the Ministry of Foreign Affairs and Trade, visited Washington in November, 2014 and noted the broad range of Mongolia-DPRK exchanges. Together with Mongolia Ambassador Bulgaa Altangerel, he emphasized his country’s desire to serve as a fair broker and mediator for the Northeast Asia region and to pursue prudent and practical measures to help build bridges of understanding between the people of North Korea and other parties.

But despite its uniquely constructive approach to dealing with the DPRK and other regional neighbors, Mongolia faces unique challenges in the mediator role it seeks to achieve. First, Ulaanbaatar has been able to gain Pyongyang’s trust because of the quiet diplomacy it has pursued, staying behind the scenes and out of the limelight. This has enabled a steady channel to the Pyongyang elite, and a focus on bilateral interests has been maintained. In short, drama has been avoided. But if Mongolia plays a more high-profile role with North Korea and multilateral actors, it will most likely be difficult to avoid some drama—posturing, rhetoric, and standoffs—emanating from various parties. Second, any increased or intensified involvement of China, Russia, and the United States in UB-led dialogue could come with the headache of big power arrogance and competition over leadership. The value of Mongolia’s role and activities for regional cooperation and peace stems from the fact that Ulaanbaatar does not assume airs or seek to dominate others. Whether China, Russia, and the United States would be able to refrain from seeking leadership and disproportionate influence in UB-led initiatives is highly questionable. Third, with respect to peninsular issues, for the UB Dialogues to gain more acceptance and credibility regionally and internationally requires that the DPRK become a consistent and collaborative presence at gatherings. Whether any nation or actor has the capacity to deliver consistent and collaborative participation by Pyongyang is an open question.

In addition, some observers believe that the impasse between North Korea and other nations is not simply the result of a trust deficit, but reflects mutually exclusive goals. While Mongolian mediation may not be able to solve the nuclear issue, it can be an effective channel – among others – for increasing communication, finding common ground, and beginning to ease tension.

Mongolia is the one Northeast Asian country that has kept its emotional cool and balanced policy interests with North Korea and other regional actors. It has not tripped over its own feet by politicizing historical grievances with its neighbors. Rather, it has exercised a calm can-do approach while its neighbors have engulfed themselves in hyper-nationalistic and ideological mire. And it has smartly used diplomacy and entrepreneurship to make friends and develop its own economy and people. These are significant assets that can be of benefit not only to UB but also to the region.

Recommendations

1. The Obama administration should actively support the Ulaanbaatar Dialogue process and encourage Seoul to find common cause in advancing greater regional dialogue and collaboration with the Mongolians through Track 2 and 1.5 processes. A precedent for this can be found in the case of Oman, which the current administration effectively tapped for back channel dialogue with Iran, kick-starting the present nuclear talks. Also, support by Washington would build on a prior exchange with Mongolia hosted by the Korea Institute for National Unification (KINU), where scholars noted potential benefits from three-way economic cooperation and the possibility of providing the North Koreans with a proven model of transformation from a closed statist system to a prosperous and more open system.

2. ROK President Park’s proposed regional cooperation mechanism should receive serious attention together with the Ulaanbaatar initiative. The two parallel efforts could benefit from being part of inter-connected strategies to defuse regional tension and forge greater trustpolitik.

3. The UN ESCAP headquarters can serve as an important multilateral bridge for humanitarian aid together with the multi-stakeholder Asia Pacific Peace Service Alliance (APPSA), which was launched at the UN headquarters in Bangkok last October. The U.S. Agency for International Development (USAID) could partner with UN ESCAP and the World Food Program to establish a verifiable humanitarian aid regime, building on prior food aid oversight protocols developed during the Bush administration. Mongolia also would be an excellent candidate for the training of an international volunteer corps for potential disaster and humanitarian relief and economic development projects concerning the DPRK and the broader Northeast Asia region. Mongolia has excellent working relations with the U.S. Peace Corps, which also helped facilitate the recent launch of the APPSA.

4. In the context of peninsula unification planning, regional economic cooperation on private and multi-stakeholder investment projects and the enabling of market-friendly policies could be further explored with Mongolia and other Northeast Asian partners in areas such as infrastructure, energy, and technology.5. Cultural and educational exchanges between Mongolia and the DPRK could be expanded on a multilateral basis over time to include the ROK, China, Russia, Japan and ASEAN nations together with UNESCO to further cultural bases and norms of peace.

Volunteerism remains a powerful tool for good around the world. Young people, in particular, are motivated by the prospect of creating real and lasting change, as well as gaining valuable learning experiences that come with volunteering. This energy and optimism among youth can be harnessed and mobilized to help meet challenges facing our world today and accomplish such targets as the United Nations 2030 Sustainable Development Goals (SDGs).

On June 14, young leaders and development agents from leading non-governmental organizations (NGOs), faith-based organizations, corporations, universities, the Peace Corps, and United Nations Volunteers came together at the Brookings Institution to answer the question on how to achieve impacts on the SDGs through international service.

This was also the 10th anniversary gathering of the Building Bridges Coalition—a multi-stakeholder consortium of development volunteers— and included the announcement of a new Service Year Alliance partnership with the coalition to step up international volunteers and village-based volunteering capacity around the world.

Brookings Senior Fellow Homi Kharas, who served as the lead author supporting the high-level panel advising the U.N. secretary-general on the post-2015 development agenda, noted the imperative of engaging community volunteers to scale up effective initiatives, build political awareness, and generate “partnerships with citizens at every level” to achieve the 2030 goals.  

Kharas’ call was echoed in reports on effective grassroots initiatives, including Omnimed’s mobilization of 1,200 village health workers in Uganda’s Mukono district, a dramatic reduction of malaria through Peace Corps efforts with Senegal village volunteers, and Seed Global Health’s partnership to scale up medical doctors and nurses to address critical health professional shortages in the developing world. 

U.N. Youth Envoy Ahmad Alhendawi of Jordan energized young leaders from Atlas Corps, Global Citizen Year, America Solidaria, International Young Leaders Academy, and universities, citing U.N. Security Council Resolution 2250 on youth, peace, and security as “a turning point when it comes to the way we engage with young people globally… to recognize their role for who they are, as peacebuilders, not troublemakers… and equal partners on the ground.”

Service Year Alliance Chair General Stanley McChrystal, former Joint Special Operations commander, acclaimed, “The big idea… of a culture where the expectation [and] habit of service has provided young people an opportunity to do a year of funded, full-time service.” 

Civic Enterprises President John Bridgeland and Brookings Senior Fellow E.J. Dionne, Jr. led a panel with Seed Global Health’s Vanessa Kerry and Atlas Corps’ Scott Beale on policy ideas for the next administration, including offering Global Service Fellowships in United States Agency for International Development (USAID) programs to grow health service corps, student service year loan forgiveness, and technical support through State Department volunteer exchanges. Former Senator Harris Wofford, Building Bridge Coalition’s senior advisor and a founding Peace Corps architect, shared how the coalition’s new “service quantum leap” furthers the original idea announced by President John F. Kennedy, which called for the Peace Corps and the mobilization of one million global volunteers through NGOs, faith-based groups, and universities.

The multi-stakeholder volunteering model was showcased by Richard Dictus, executive coordinator of U.N. Volunteers; Peace Corps Director Carrie Hessler-Radelet; USAID Counselor Susan Reischle; and Diane Melley, IBM vice president for Global Citizenship. Melley highlighted IBM’s 280,000 skills-based employee volunteers who are building community capacity in 130 countries along with Impact 2030—a consortium of 60 companies collaborating with the U.N.—that is “integrating service into overall citizenship activities” while furthering the SDGs.

The faith and millennial leaders who contributed to the coalition’s action plan included Jim Lindsay of Catholic Volunteer Network; Service Year’s Yasmeen Shaheen-McConnell; C. Eduardo Vargas of USAID’s Center for Faith-Based and Community Initiatives; and moderator David Eisner of Repair the World, a former CEO of the Corporation for National and Community Service. Jesuit Volunteer Corps President Tim Shriver, grandson of the Peace Corps’ founding director, addressed working sessions on engaging faith-based volunteers, which, according to research, account for an estimated 44 percent of nearly one million U.S. global volunteers

The key role of colleges and universities in the coalition’s action plan—including  linking service year with student learning, impact research, and gap year service—was  outlined by Dean Alan Solomont of Tisch College at Tufts University; Marlboro College President Kevin Quigley; and U.N. Volunteers researcher Ben Lough of University of Illinois Urbana-Champaign.

These panel discussion directed us towards the final goal of the event, which was a multi-stakeholder action campaign calling for ongoing collaboration and policy support to enhance the collective impact of international service in achieving the 2030 goals.

This resolution, which remains a working document, highlighted five major priorities:

1. Engage service abroad programs to more effectively address the 2030 SDGs by mobilizing 10,000 additional service year and short-term volunteers annually and partnerships that leverage local capacity and volunteers in host communities.
2. Promote a new generation of global leaders through global service fellowships promoting service and study abroad.
3. Expand cross-sectorial participation and partnerships.
4. Engage more volunteers of all ages in service abroad.
5. Study and foster best practices across international service programs, measure community impact, and ensure the highest quality of volunteer safety, well-being, and confidence.

Participants agreed that it’s through these types of efforts that volunteer service could become a common strategy throughout the world for meeting pressing challenges. Moreover, the cooperation of individuals and organizations will be vital in laying a foundation on which governments and civil society can build a more prosperous, healthy, and peaceful world.

Downloads

• Download full paper

Event Information

On Wednesday, June 2, the Center for Universal Education at Brookings hosted a discussion on the need to refocus the international education dialogue from school enrollment to learning achieved in developing countries. Participants, who included education experts from academia, international organizations and government, assessed the current state of systematic efforts at the global level to measure learning outcomes.

Center for Universal Education Co-Director and Senior Fellow Jacques van der Gaag opened the event by charting the landscape of learning, including education outside the primary school classroom, during early childhood development and the importance of acquiring both cognitive and non-cognitive skills for ensuring learning outcomes.

View the event summary »

Event Materials

• 20100602_education_learning_presentation_clarke
• 20100602_education_learning_presentation_gove
• 20100602_education_learning_presentation_naidoo
• 20100602_education_learning_presentation_savelyev
• 20100602_education_learning_presentation_woessman

Event Information

On December 4 to 6, the Center for Middle East Policy at Brookings hosted its 12th annual Saban Forum, titled “Israel and the United States: Yesterday, today, and tomorrow.” The 2015 Saban Forum included webcasts featuring remarks by Israel’s Minister of Defense Moshe Ya’alon, Chairman of the Yesh Atid Party Yair Lapid, National Security Adviser to President George W. Bush Stephen Hadley, Secretary of State John Kerry, Israeli Prime Minister Benjamin Netanyahu (via video), and former Secretary of State Hillary Rodham Clinton. The forum’s webcast sessions focused on the future for Israelis and Palestinians, Iran’s role in the Middle East, spillover from the war in Syria, and the global threat posed by the Islamic State and other violent jihadi groups.

Over the past twelve years, the Saban Forum has become the premier platform for frank dialogue between American and Israeli leaders from government, civil society, business, and the media. As a result, the Saban Forum is a seminal event, generating new ideas and helping shape the future of the U.S.-Israel relationship.

Join the conversation on Twitter using #Saban15

Video

• A conversation with Moshe Ya’alon, Israel’s minister of defense
• How to restore order in the Middle East
• Keynote address: U.S. Secretary of State John Kerry
• Address by Israeli Prime Minister Benjamin Netanyahu (via video)
• Keynote address: Former U.S. Secretary of State Hillary Rodham Clinton

Audio

• Saturday, December 5, 8:00pm - How to preserve Israel as a Jewish and Democratic state

Transcript

• Uncorrected Transcript--Keynote address: Former U.S. Secretary of State Hillary Rodham Clinton (.pdf)
• Uncorrected Transcript--Address by Israeli Prime Minister Benjamin Netanyahu (.pdf)
• Uncorrected Transcript--How to preserve Israel as a Jewish and Democratic state (.pdf)
• U.S. Department of State Release--Remarks by Secretary of State John Kerry (.pdf)
• Uncorrected Transcript--How to restore order in the Middle East (.pdf)
• Uncorrected Transcript--A conversation with Moshe Ya'alon, Israel's minister of defense (.pdf)

Event Materials

• Uncorrected TranscriptKeynote addressFormer Secretary of State Hillary Rodham Clinton
• Uncorrected TranscriptAddress by Israeli Prime Minister Benjamin Netanyahu
• Uncorrected TranscriptHow to preserve Israel as a Jewish and Democratic state
• US Department of State ReleaseRemarks by Secretary of State John Kerry
• Uncorrected TranscriptHow to restore order in the Middle East 2
• Uncorrected TranscriptA conversation with Moshe Yaalon Israels minister of defense

Event Information

2016 Richard C. Holbrooke Forum

On February 5, the Foreign Policy program at Brookings hosted the American Academy in Berlin for the 2016 Richard C. Holbrooke Forum for a two-part public event focusing on the global refugee crisis. Brookings Isaiah Berlin Senior Fellow in Culture and Policy Leon Wieseltier delivered featured remarks on the moral dimensions of the refugee crisis. Wieseltier is currently completing an essay on certain moral, historical, and philosophical dimensions of the refugee crisis. Michael Ignatieff, Edward R. Murrow professor of practice at the Harvard Kennedy School, moderated a question and answer session following Wieseltier’s remarks.

The second panel featured experts addressing the first-step policies needed to ameliorate the crisis. Bruce Katz, Brookings centennial scholar, Tamara Wittes, director of Brookings’s Center for Middle East Policy, Elizabeth Ferris, research professor at Georgetown University and Brookings nonresident senior fellow, spoke to the multiple aspects of the refugee crisis. Brookings Executive Vice President Martin Indyk moderated the panel discussion.

Bruce Jones, vice president and director for the Foreign Policy program, provided introductory remarks.

Join the conversation on Twitter using #RefugeeCrisis

Video

• The global refugee crisis: Moral dimensions
• The global refugee crisis: Practical solutions

Audio

• The global refugee crisis: Moral dimensions and practical solutions

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20160205_refugee_crisis_transcript

Politics follows geopolitics, or so it has often seemed throughout history. When the Athenian democracy’s empire rose in the fifth century B.C.E., the number of Greek city-states ruled by democrats proliferated; Sparta’s power was reflected in the spread of Spartan-style oligarchies. When the Soviet Union’s power rose in the early Cold War years, communism spread. In the later Cold War years, when the United States and Western Europe gained the advantage and ultimately triumphed, democracies proliferated and communism collapsed. Was this all just the outcome of the battle of ideas, as Francis Fukuyama and others argue, with the better idea of liberal capitalism triumphing over the worse ideas of communism and fascism? Or did liberal ideas triumph in part because of real battles and shifts that occurred less in the realm of thought than in the realm of power?

These are relevant questions again. We live in a time when democratic nations are in retreat in the realm of geopolitics, and when democracy itself is also in retreat. The latter phenomenon has been well documented by Freedom House, which has recorded declines in freedom in the world for nine straight years. At the level of geopolitics, the shifting tectonic plates have yet to produce a seismic rearrangement of power, but rumblings are audible. The United States has been in a state of retrenchment since President Barack Obama took office in 2009. The democratic nations of Europe, which some might have expected to pick up the slack, have instead turned inward and all but abandoned earlier dreams of reshaping the international system in their image. As for such rising democracies as Brazil, India, Turkey, and South Africa, they are neither rising as fast as once anticipated nor yet behaving as democracies in world affairs. Their focus remains narrow and regional. Their national identities remain shaped by postcolonial and nonaligned sensibilities—by old but carefully nursed resentments—which lead them, for instance, to shield rather than condemn autocratic Russia’s invasion of democratic Ukraine, or, in the case of Brazil, to prefer the company of Venezuelan dictators to that of North American democratic presidents.

Meanwhile, insofar as there is energy in the international system, it comes from the great-power autocracies, China and Russia, and from would-be theocrats pursuing their dream of a new caliphate in the Middle East. For all their many problems and weaknesses, it is still these autocracies and these aspiring religious totalitarians that push forward while the democracies draw back, that act while the democracies react, and that seem increasingly unleashed while the democracies feel increasingly constrained.

It should not be surprising that one of the side effects of these circumstances has been the weakening and in some cases collapse of democracy in those places where it was newest and weakest. Geopolitical shifts among the reigning great powers, often but not always the result of wars, can have significant effects on the domestic politics of the smaller and weaker nations of the world. Global democratizing trends have been stopped and reversed before.

Consider the interwar years. In 1920, when the number of democracies in the world had doubled in the aftermath of the First World War, contemporaries such as the British historian James Bryce believed that they were witnessing “a natural trend, due to a general law of social progress.”[1] Yet almost immediately the new democracies in Estonia, Latvia, Lithuania, and Poland began to fall. Europe’s democratic great powers, France and Britain, were suffering the effects of the recent devastating war, while the one rich and healthy democratic power, the United States, had retreated to the safety of its distant shores. In the vacuum came Mussolini’s rise to power in Italy in 1922, the crumbling of Germany’s Weimar Republic, and the broader triumph of European fascism. Greek democracy fell in 1936. Spanish democracy fell to Franco that same year. Military coups overthrew democratic governments in Portugal, Brazil, Uruguay, and Argentina. Japan’s shaky democracy succumbed to military rule and then to a form of fascism.

Across three continents, fragile democracies gave way to authoritarian forces exploiting the vulnerabilities of the democratic system, while other democracies fell prey to the worldwide economic depression. There was a ripple effect, too—the success of fascism in one country strengthened similar movements elsewhere, sometimes directly. Spanish fascists received military assistance from the fascist regimes in Germany and Italy. The result was that by 1939 the democratic gains of the previous forty years had been wiped out.

The period after the First World War showed not only that democratic gains could be reversed, but that democracy need not always triumph even in the competition of ideas. For it was not just that democracies had been overthrown. The very idea of democracy had been “discredited,” as John A. Hobson observed.[2] Democracy’s aura of inevitability vanished as great numbers of people rejected the idea that it was a better form of government. Human beings, after all, do not yearn only for freedom, autonomy, individuality, and recognition. Especially in times of difficulty, they yearn also for comfort, security, order, and, importantly, a sense of belonging to something larger than themselves, something that submerges autonomy and individuality—all of which autocracies can sometimes provide, or at least appear to provide, better than democracies. 

In the 1920s and 1930s, the fascist governments looked stronger, more energetic and efficient, and more capable of providing reassurance in troubled times. They appealed effectively to nationalist, ethnic, and tribal sentiments. The many weaknesses of Germany’s Weimar democracy, inadequately supported by the democratic great powers, and of the fragile and short-lived democracies of Italy and Spain made their people susceptible to the appeals of the Nazis, Mussolini, and Franco, just as the weaknesses of Russian democracy in the 1990s made a more authoritarian government under Vladimir Putin attractive to many Russians. People tend to follow winners, and between the wars the democratic-capitalist countries looked weak and in retreat compared with the apparently vigorous fascist regimes and with Stalin’s Soviet Union.

It took a second world war and another military victory by the Allied democracies (plus the Soviet Union) to reverse the trend again. The United States imposed democracy by force and through prolonged occupations in West Germany, Italy, Japan, Austria, and South Korea. With the victory of the democracies and the discrediting of fascism—chiefly on the battlefield—many other countries followed suit. Greece and Turkey both moved in a democratic direction, as did Brazil, Argentina, Peru, Ecuador, Venezuela, and Colombia. Some of the new nations born as Europe shed its colonies also experimented with democratic government, the most prominent example being India. By 1950, the number of democracies had grown to between twenty and thirty, and they governed close to 40 percent of the world’s population.

Was this the victory of an idea or the victory of arms? Was it the product of an inevitable human evolution or, as Samuel P. Huntington later observed, of “historically discrete events”?[3] We would prefer to believe the former, but evidence suggests the latter, for it turned out that even the great wave of democracy following World War II was not irreversible. Another “reverse wave” hit from the late 1950s through the early 1970s. Peru, Brazil, Argentina, Bolivia, Chile, Uruguay, Ecuador, South Korea, the Philippines, Pakistan, Indonesia, and Greece all fell back under authoritarian rule. In Africa, Nigeria was the most prominent of the newly decolonized nations where democracy failed. By 1975, more than three-dozen governments around the world had been installed by military coups.[4] Few spoke of democracy’s inevitability in the 1970s or even in the early 1980s. As late as 1984, Huntington himself believed that “the limits of democratic development in the world” had been reached, noting the “unreceptivity to democracy of several major cultural traditions,” as well as “the substantial power of antidemocratic governments (particularly the Soviet Union).”[5]

But then, unexpectedly, came the “third wave.” From the mid-1970s through the early 1990s, the number of democracies in the world rose to an astonishing 120, representing well over half the world’s population. What explained the prolonged success of democratization over the last quarter of the twentieth century? It could not have been merely the steady rise of the global economy and the general yearning for freedom, autonomy, and recognition. Neither economic growth nor human yearnings had prevented the democratic reversals of the 1960s and early 1970s. Until the third wave, many nations around the world careened back and forth between democracy and authoritarianism in a cyclical, almost predictable manner. What was most notable about the third wave was that this cyclical alternation between democracy and autocracy was interrupted. Nations moved into a democratic phase and stayed there. But why?

The International Climate Improves

The answer is related to the configuration of power and ideas in the world. The international climate from the mid-1970s onward was simply more hospitable to democracies and more challenging to autocratic governments than had been the case in past eras. In his study, Huntington emphasized the change, following the Second Vatican Council, in the Catholic Church’s doctrine regarding order and revolution, which tended to weaken the legitimacy of authoritarian governments in Catholic countries. The growing success and attractiveness of the European Community (EC), meanwhile, had an impact on the internal policies of nations such as Portugal, Greece, and Spain, which sought the economic benefits of membership in the EC and therefore felt pressure to conform to its democratic norms. These norms increasingly became international norms. But they did not appear out of nowhere or as the result of some natural evolution of the human species. As Huntington noted, “The pervasiveness of democratic norms rested in large part on the commitment to those norms of the most powerful country in the world.[6]

The United States, in fact, played a critical role in making the explosion of democracy possible. This was not because U.S. policy makers consistently promoted democracy around the world. They did not. At various times throughout the Cold War, U.S. policy often supported dictatorships as part of the battle against communism or simply out of indifference. It even permitted or was complicit in the overthrow of democratic regimes deemed unreliable—those of Mohammad Mossadegh in Iran in 1953, Jacobo Arbenz in Guatemala in 1954, and Salvador Allende in Chile in 1973. At times, U.S. foreign policy was almost hostile to democracy. President Richard Nixon regarded it as “not necessarily the best form of government for people in Asia, Africa, and Latin America.”[7] 

Nor, when the United States did support democracy, was it purely out of fealty to principle. Often it was for strategic reasons. Officials in President Ronald Reagan’s administration came to believe that democratic governments might actually be better than autocracies at fending off communist insurgencies, for instance. And often it was popular local demands that compelled the United States to make a choice that it would otherwise have preferred to avoid, between supporting an unpopular and possibly faltering dictatorship and “getting on the side of the people.” Reagan would have preferred to support the dictatorship of Ferdinand Marcos in the 1980s had he not been confronted by the moral challenge of Filipino “people power.” Rarely if ever did the United States seek a change of regime primarily out of devotion to democratic principles.

Beginning in the mid-1970s, however, the general inclination of the United States did begin to shift toward a more critical view of dictatorship. The U.S. Congress, led by human-rights advocates, began to condition or cut off U.S. aid to authoritarian allies, which weakened their hold on power. In the Helsinki Accords of 1975, a reference to human-rights issues drew greater attention to the cause of dissidents and other opponents of dictatorship in the Eastern bloc. President Jimmy Carter focused attention on the human-rights abuses of the Soviet Union as well as of right-wing governments in Latin America and elsewhere. The U.S. government’s international information services, including the Voice of America and Radio Free Europe/Radio Liberty, put greater emphasis on democracy and human rights in their programming. The Reagan administration, after first trying to roll back Carter’s human-rights agenda, eventually embraced it and made the promotion of democracy part of its stated (if not always its actual) policy. Even during this period, U.S. policy was far from consistent. Many allied dictatorships, especially in the Middle East, were not only tolerated but actively supported with U.S. economic and military aid. But the net effect of the shift in U.S. policy, joined with the efforts of Europe, was significant.

The third wave began in 1974 in Portugal, where the Carnation Revolution put an end to a half-century of dictatorship. As Larry Diamond notes, this revolution did not just happen. The United States and the European democracies played a key role, making a “heavy investment . . . in support of the democratic parties.”[8] Over the next decade and a half, the United States used a variety of tools, including direct military intervention, to aid democratic transitions and prevent the undermining of existing fragile democracies all across the globe. In 1978, Carter threatened military action in the Dominican Republic when long-serving president Joaquín Balaguer refused to give up power after losing an election. In 1983, Reagan’s invasion of Grenada restored a democratic government after a military coup. In 1986, the United States threatened military action to prevent Marcos from forcibly annulling an election that he had lost. In 1989, President George H.W. Bush invaded Panama to help install democracy after military strongman Manuel Noriega had annulled his nation’s elections. 

Throughout this period, too, the United States used its influence to block military coups in Honduras, Bolivia, El Salvador, Peru, and South Korea. Elsewhere it urged presidents not to try staying in office beyond constitutional limits. Huntington estimated that over the course of about a decade and a half, U.S. support had been “critical to democratization in the Dominican Republic, Grenada, El Salvador, Guatemala, Honduras, Uruguay, Peru, Ecuador, Panama, and the Philippines” and was “a contributing factor to democratization in Portugal, Chile, Poland, Korea, Bolivia, and Taiwan.”[9]

Many developments both global and local helped to produce the democratizing trend of the late 1970s and the 1980s, and there might have been a democratic wave even if the United States had not been so influential. The question is whether the wave would have been as large and as lasting. The stable zones of democracy in Europe and Japan proved to be powerful magnets. The liberal free-market and free-trade system increasingly outperformed the stagnating economies of the socialist bloc, especially at the dawn of the information revolution. The greater activism of the United States, together with that of other successful democracies, helped to build a broad, if not universal, consensus that was more sympathetic to democratic forms of government and less sympathetic to authoritarian forms.

Diamond and others have noted how important it was that these “global democratic norms” came to be “reflected in regional and international institutions and agreements as never before.”[10] Those norms had an impact on the internal political processes of countries, making it harder for authoritarians to weather political and economic storms and easier for democratic movements to gain legitimacy. But “norms” are transient as well. In the 1930s, the trendsetting nations were fascist dictatorships. In the 1950s and 1960s, variants of socialism were in vogue. But from the 1970s until recently, the United States and a handful of other democratic powers set the fashion trend. They pushed—some might even say imposed—democratic principles and embedded them in international institutions and agreements.

Equally important was the role that the United States played in preventing backsliding away from democracy where it had barely taken root. Perhaps the most significant U.S. contribution was simply to prevent military coups against fledgling democratic governments. In a sense, the United States was interfering in what might have been a natural cycle, preventing nations that ordinarily would have been “due” for an authoritarian phase from following the usual pattern. It was not that the United States was exporting democracy everywhere. More often, it played the role of “catcher in the rye”—preventing young democracies from falling off the cliff—in places such as the Philippines, Colombia, and Panama. This helped to give the third wave unprecedented breadth and durability.

Finally, there was the collapse of the Soviet Union and with it the fall of Central and Eastern Europe’s communist regimes and their replacement by democracies. What role the United States played in hastening the Soviet downfall may be in dispute, but surely it played some part, both by containing the Soviet empire militarily and by outperforming it economically and technologically. And at the heart of the struggle were the peoples of the former Warsaw Pact countries themselves. They had long yearned to achieve the liberation of their respective nations from the Soviet Union, which also meant liberation from communism. These peoples wanted to join the rest of Europe, which offered an economic and social model that was even more attractive than that of the United States. 

That Central and East Europeans uniformly chose democratic forms of government, however, was not simply the fruit of aspirations for freedom or comfort. It also reflected the desires of these peoples to place themselves under the U.S. security umbrella. The strategic, the economic, the political, and the ideological were thus inseparable. Those nations that wanted to be part of NATO, and later of the European Union, knew that they would stand no chance of admission without democratic credentials. These democratic transitions, which turned the third wave into a democratic tsunami, need not have occurred had the world been configured differently. That a democratic, united, and prosperous Western Europe was even there to exert a powerful magnetic pull on its eastern neighbors was due to U.S. actions after World War II.

The Lost Future of 1848

Contrast the fate of democratic movements in the late twentieth century with that of the liberal revolutions that swept Europe in 1848. Beginning in France, the “Springtime of the Peoples,” as it was known, included liberal reformers and constitutionalists, nationalists, and representatives of the rising middle class as well as radical workers and socialists. In a matter of weeks, they toppled kings and princes and shook thrones in France, Poland, Austria, and Romania, as well as the Italian peninsula and the German principalities. In the end, however, the liberal movements failed, partly because they lacked cohesion, but also because the autocratic powers forcibly crushed them. The Prussian army helped to defeat liberal movements in the German lands, while the Russian czar sent his troops into Romania and Hungary. Tens of thousands of protesters were killed in the streets of Europe. The sword proved mightier than the pen.

It mattered that the more liberal powers, Britain and France, adopted a neutral posture throughout the liberal ferment, even though France’s own revolution had sparked and inspired the pan-European movement. The British monarchy and aristocracy were afraid of radicalism at home. Both France and Britain were more concerned with preserving peace among the great powers than with providing assistance to fellow liberals. The preservation of the European balance among the five great powers benefited the forces of counterrevolution everywhere, and the Springtime of the Peoples was suppressed.[11] As a result, for several decades the forces of reaction in Europe were strengthened against the forces of liberalism.

Scholars have speculated about how differently Europe and the world might have evolved had the liberal revolutions of 1848 succeeded: How might German history have unfolded had national unification been achieved under a liberal parliamentary system rather than under the leadership of Otto von Bismarck? The “Iron Chancellor” unified the nation not through elections and debates, but through military victories won by the great power of the conservative Prussian army under the Hohenzollern dynasty. As the historian A.J.P. Taylor observed, history reached a turning point in 1848, but Germany “failed to turn.”[12] Might Germans have learned a different lesson from the one that Bismarck taught—namely, that “the great questions of the age are not decided by speeches and majority decisions . . . but by blood and iron”?[13] Yet the international system of the day was not configured in such a way as to encourage liberal and democratic change. The European balance of power in the mid-nineteenth century did not favor democracy, and so it is not surprising that democracy failed to triumph anywhere.[14] 

We can also speculate about how differently today’s world might have evolved without the U.S. role in shaping an international environment favorable to democracy, and how it might evolve should the United States find itself no longer strong enough to play that role. Democratic transitions are not inevitable, even where the conditions may be ripe. Nations may enter a transition zone—economically, socially, and politically—where the probability of moving in a democratic direction increases or decreases. But foreign influences, usually exerted by the reigning great powers, often determine which direction change takes. Strong authoritarian powers willing to support conservative forces against liberal movements can undo what might otherwise have been a “natural” evolution to democracy, just as powerful democratic nations can help liberal forces that, left to their own devices, might otherwise fail. 

In the 1980s as in the 1840s, liberal movements arose for their own reasons in different countries, but their success or failure was influenced by the balance of power at the international level. In the era of U.S. predominance, the balance was generally favorable to democracy, which helps to explain why the liberal revolutions of that later era succeeded. Had the United States not been so powerful, there would have been fewer transitions to democracy, and those that occurred might have been short-lived. It might have meant a shallower and more easily reversed third wave.[15] 

Democracy, Autocracy, and Power

What about today? With the democratic superpower curtailing its global influence, regional powers are setting the tone in their respective regions. Not surprisingly, dictatorships are more common in the environs of Russia, along the borders of China (North Korea, Burma, and Thailand), and in the Middle East, where long dictatorial traditions have so far mostly withstood the challenge of popular uprisings.

But even in regions where democracies remain strong, authoritarians have been able to make a determined stand while their democratic neighbors passively stand by. Thus Hungary’s leaders, in the heart of an indifferent Europe, proclaim their love of illiberalism and crack down on press and political freedoms while the rest of the European Union, supposedly a club for democracies only, looks away. In South America, democracy is engaged in a contest with dictatorship, but an indifferent Brazil looks on, thinking only of trade and of North American imperialism. Meanwhile in Central America, next door to an indifferent Mexico, democracy collapses under the weight of drugs and crime and the resurgence of the caudillos. Yet it may be unfair to blame regional powers for not doing what they have never done. Insofar as the shift in the geopolitical equation has affected the fate of democracies worldwide, it is probably the change in the democratic superpower’s behavior that bears most of the responsibility.

If that superpower does not change its course, we are likely to see democracy around the world rolled back further. There is nothing inevitable about democracy. The liberal world order we have been living in these past decades was not bequeathed by “the Laws of Nature and of Nature’s God.” It is not the endpoint of human progress.

There are those who would prefer a world order different from the liberal one. Until now, however, they have not been able to have their way, but not because their ideas of governance are impossible to enact. Who is to say that Putinism in Russia or China’s particular brand of authoritarianism will not survive as far into the future as European democracy, which, after all, is less than a century old on most of the continent? Autocracy in Russia and China has certainly been around longer than any Western democracy. Indeed, it is autocracy, not democracy, that has been the norm in human history—only in recent decades have the democracies, led by the United States, had the power to shape the world.

Skeptics of U.S. “democracy promotion” have long argued that many of the places where the democratic experiment has been tried over the past few decades are not a natural fit for that form of government, and that the United States has tried to plant democracy in some very infertile soils. Given that democratic governments have taken deep root in widely varying circumstances, from impoverished India to “Confucian” East Asia to Islamic Indonesia, we ought to have some modesty about asserting where the soil is right or not right for democracy. Yet it should be clear that the prospects for democracy have been much better under the protection of a liberal world order, supported and defended by a democratic superpower or by a collection of democratic great powers. Today, as always, democracy is a fragile flower. It requires constant support, constant tending, and the plucking of weeds and fencing-off of the jungle that threaten it both from within and without. In the absence of such efforts, the jungle and the weeds may sooner or later come back to reclaim the land.

[1] Quoted in Samuel P. Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: University of Oklahoma Press, 1991), 17.

[2] Quoted in John Keane, The Life and Death of Democracy (New York: W.W. Norton, 2009), 573.

[3] Huntington, Third Wave, 40.

[4] Huntington, Third Wave, 21.

[5] Samuel P. Huntington, “Will More Countries Become Democratic?” Political Science Quarterly 99 (Summer 1984): 193–218; quoted in Larry Diamond, The Spirit of Democracy: The Struggle to Build Free Societies Throughout the World (New York: Times Books, 2008), 10.

[6] Huntington, Third Wave, 47.

[7] Odd Arne Westad, The Global Cold War: Third World Interventions and the Making of Our Times (Cambridge: Cambridge University Press, 2005), 196.

[8] Diamond, Spirit of Democracy, 5.

[9] Huntington, Third Wave, 98.

[10] Diamond, Spirit of Democracy, 13.

[11] Mike Rapport, 1848: Year of Revolution (New York: Basic Books, 2009), 409.

[12] A.J.P. Taylor, The Course of German History: A Survey of the Development of German History Since 1815 (London: Routledge, 2001; orig. publ. 1945), 71.

[13] Rapport, 1848, 401–402.

[14] As Huntington paraphrased the findings of Jonathan Sunshine: “External influences in Europe before 1830 were fundamentally antidemocratic and hence held up democratization. Between 1830 and 1930 . . . the external environment was neutral . . . hence democratization proceeded in different countries more or less at the pace set by economic and social development.” Huntington, Third Wave, 86.

[15] As Huntington observed, “The absence of the United States from the process would have meant fewer and later transitions to democracy.” Huntington, Third Wave, 98.

Downloads

• Is Democracy in Decline? The Weight of Geopolitics

For years, corporate campuses like Silicon Valley were known for innovation. Located in suburban corridors that were only accessible by car, these places put little emphasis on creating communities where people work, live and go out.

But now, as the economy emerges from the recession, a shift is occurring where innovation is taking place. Districts of innovation can be found in urban centres as disparate as Montreal, Seoul, Singapore, Medellin, Barcelona, and London. They are popping up in the downtowns and midtowns of cities like Atlanta, Cambridge, Philadelphia, and St. Louis.

These are places where advanced research universities, medical complexes, and clusters of tech and creative firms are attracting businesses and residents.

Other innovation districts can be found in Boston, Brooklyn, San Francisco, and Seattle, where older industrial areas are being re-imagined and remade, leveraging their enviable location near waterfronts and city centres and along transit lines. Innovative companies and talented workers are flocking to these areas in abundance.

Even traditional science parks like Research Triangle Park in Raleigh-Durham are scrambling to urbanise to keep pace with their workers' preference for walkable communities and their companies' desire to be near other firms.

In these districts, leading anchor institutions and start-ups are clustering and connecting with one another. They are coming together with spin-off companies, incubators, and accelerators in the relentless pursuit of new discoveries for the market.

These areas are small and accessible, growing talent, fostering open collaboration, and offering housing and office space as well as modern urban amenities. They are both competitive places and "cool" spaces.

The growth of innovation districts is being driven by private and civic actors like universities, philanthropies, business associations and business improvement districts. Yet local governments play an important role in accelerating the growth of districts and maximising their potential . Three roles stand out:

1) Mayors are leading efforts to designate districts

Barcelona's former mayor Joan Clos set his eyes on transforming his city into a "city of knowledge". Through extensive, focused public planning and investment, Clos designed an innovation district from the debris of a 494-acre industrial area, which was scarred and separated from the rest of the city by railroad tracks. His vision included burying these tracks, increasing access via a new public tram, designing walkable streets, and creating new public spaces and housing.

Today, the area is a 21st-century urban community with 4,500 firms, thousands of new housing units, and clusters of universities, technology centres, and incubators.

Across the Atlantic in Boston, former mayor Tom Menino declared the South Boston waterfront an innovation district in 2010. Menino persuaded innovators like MassChallenge to move to the district and exacted important concessions from developers (including land for innovation-oriented retail, shared labs and other spaces, and micro-housing) to help realise the district's vision.

2) Changing land-use laws to build spaces with a mix of facilities

Barcelona and Research Triangle Park, for example, developed bold master plans encouraging the "mixing" of large and small firms, research facilities, housing, restaurants, and retail and outlining where to create open spaces for networking. Cambridge, Massachusetts, by contrast, has allowed incremental moves from rigid, antiquated rules to encourage similar outcomes in Kendall Square .

3) Supporting scarce public resources with large private and civic investments

In New York , former mayor Michael Bloomberg deployed $100m in municipal capital to prepare the infrastructure necessary to lure Cornell and Technion universities to Roosevelt Island. In other cities, including St Louis and Seattle, local resources are financing infrastructure improvements to buttress and accelerate private growth.

Given that many innovation districts are adjacent to low-income neighbourhoods, cities like Philadelphia are considering smart use of school investments to prepare disadvantaged youth for good jobs in the Stem (science, technology, engineering, and math) economy.

As this decade unfolds, we should expect more cities to use their powers in the service of this new model of innovative, inclusive, and resilient growth.

This opinion originally appeared in The Guardian

Innovative activity and innovation districts are not evenly distributed across cities. Some metropolitan areas may have two or three districts scattered about, while other cities are lucky to have the critical mass to support even one strong district. London, however, a global city with nearly unparalleled assets, can best be understood as not just a collection of innovation districts but as a contiguous “city of innovation.” 

Our understanding of that innovative activity has taken a leap forward with the publication of a new report by the Centre for London called "Spaces to Think". Even for a paragon of innovation, a critique such as this is imperative if the city desires to maximize its assets while continuing to grow in a sustainable and inclusive manner. Much as we have recommended that urban leaders across the United States undertake an asset audit of their districts to identify key priorities, "Spaces to Think" focuses on 17 distinct districts, mapping their assets, classifying their typologies, and identifying governance structures.

The 17 study areas in "Spaces to Think"

The report provides lessons applicable to many cities.

Having identified, across all 17 districts, the three major drivers of innovative activity—talent, space, and financing—it becomes clear that the main hurdle for London, as a global magnet of talent and capital, is affordable physical space: “Increasing pressure for land…risks constraining London’s potential as a leading global city for innovation.” Similar to hot-market cities across the United States, many of the study areas of greatest promise are older industrial areas, such as Here East, Canary Wharf, and Kings Cross, where large plots of underutilized land have been reimagined as innovation districts. 

But who is prepared to undertake new regeneration projects? The report places significant responsibility on London’s many universities—whose expansions already account for much of the large-scale development opportunities in the city—for a “third mission” of local economic development. It is universities, the report notes, that are “devoting increasing amounts of money, resources, and planning to building new or redesigned facilities…pitched as part of a wider regeneration strategy, or the creation of an innovation district.” 

A second concern is the democratization of the innovation economy. Already a victim of rising inequality, London’s future growth must reach down the ladder. As we’ve argued, with intentionality and purpose, innovation districts can advance a more inclusive knowledge economy, especially given that they are often abut neighborhoods of above-average poverty and unemployment. Spaces to Think expands upon four key strategies: local hiring and sourcing practices for innovation institutions; upskilling of local residents through vocational and technical programs within local firms; increased tax yield, especially given recent reforms in which “local authorities retain 100 percent of business rates”; and shared assets and rejuvenation of place. This final lever requires inclusive governance that encourages neighborhood ownership of the public realm.

Finally, the report notes that, while there is much diversity of leadership in the study areas—some are university-led, some are entrepreneurial, some are industry-led—“good governance and good relations between institutions, are at the heart of what makes innovation districts tick.” This issue is at the heart of our work moving forward: identifying and spreading effective governance models that encourage collaboration and coordination between the public, private, and civic actors within innovation districts.

We are pleased that this future work will be strengthened by a new partnership between the Bass Initiative on Innovation and Placemaking and the Centre for London. The ambition of this Transatlantic Innovation Districts Partnership is to increase our mutual understanding of innovation districts found in Europe through additional qualitative and quantitative analysis and to integrate European leaders into a global network, all to accelerate the transfer of lessons and best practices from districts across the world.

I came across an interesting chart in yesterday’s Morning Money tipsheet from Politico that struck me as a something that sounded intuitively correct but was, in fact, not. It's worth a comment on this blog, which has served as a forum for discussion of jobs numbers throughout the recovery.

Between last week’s BLS employment report and last night’s State of the Union, we’ve heard a lot about impressive job growth in 2015. For my part, I wrote on this blog last week that the 2.6 million jobs created last year makes 2015 the second best calendar-year for job gains of the current recovery.

The tipsheet’s "Chart of the Day," however, suggested that job growth in 2015 was actually lower-than-average if we adjust for the change in the size of the labor force. This is what was in the tipsheet from Politico:

CHART OF THE DAY: NOMINAL JOB GROWTH — Via Hamilton Place Strategies: "Adjusting jobs data to account for labor force shifts can help shed some light on voters' economic angst, even as we see good headline statistics. … Though 2015 was a good year in terms of job growth during the current recovery and had higher-than-average job growth as compared to recent recoveries, 2015 actually had lower-than-average job growth if we adjust for the change in the size of the labor force." http://bit.ly/1OnBXSm

I decided to look at the numbers.

The authors propose that we should "scale" reported job gains by the number of workers, which at first seems to make sense. Surely, an increase in monthly employment of 210,000 cannot mean the same thing when there are already 150 million employed people as when there are just 75 million employed people.

But this intuition is subtly wrong for a simple reason: The age structure of the population may also differ in the two situations I have just described. Suppose when there are 75 million employed people, the population of 20-to-64 year-old people is growing 300,000 every month. Suppose also when there are 150 million employed people, the population of 20-to-64 year-olds is shrinking 100,000 per month. 

Most informed observers would say that job growth of 210,000 a month is much more impressive under the latter assumptions than it is under the first set of assumptions, even though under the latter assumptions the number of employed people is twice as high as it is under the first assumptions.

BLS estimates show that in the seven years from December 2008-December 2015, the average monthly growth in the 16-to-64 year-old (noninstitutionalized) U.S. population was 85,200 per month. That is the lowest average growth rate of the working-age population going back to at least 1960. Here are the numbers:

Once we scale the monthly employment gain by the growth in the working-age population, the growth of jobs in recent years has been more impressive—not less—than suggested by the raw monthly totals. Gains in employer payrolls have far surpassed the growth in the number of working-age Americans over the past five years.

Headline writers have been impressed by recent job gains because the job gains have been impressive.

Social Security is the most popular legacy of Franklin Roosevelt's New Deal. Last year almost 60 million Americans received benefits from the program. Payments amounted to over $875 billion, nearly a quarter of all federal spending.  For more than two decades, most discussion of Social Security, at least in Washington, has centered on its funding shortfall. Contributions to the program are not high enough to pay for all benefits scheduled under current law. The Social Security Trust Fund is expected to be depleted around 2030. If Congress does not address the funding problem before reserves are exhausted, monthly payments will have to be cut about one-fifth.

Despite the projected shortfall, Democrats in Congress have begun to argue that Social Security benefits should be expanded rather than cut.  Senators Bernie Sanders and Brian Schatz have offered proposals to boost monthly pensions while at the same time shoring up Social Security finances through tax hikes on high-income Americans. 

That Democratic voters and lawmakers embrace these ideas is not surprising. But opinion polling suggests such reforms also enjoy broad support among self-identified independents and Republicans. For example, 57 percent of Republicans (versus 71 percent of Democrats) favor increasing cost-of-living adjustments in the benefit formula. Forty-eight percent of Republicans (versus 67 percent of Democrats) favor boosting the minimum benefit available to low-wage workers who have contributed for many years to the program.  Seventy-four percent of Republicans (versus 88 percent of Democrats) favor raising taxes in order to protect benefits. These polling numbers were obtained in 2013, but more recent polls show similar opinions. Even if debates among Washington insiders and GOP lawmakers focus on how to trim benefits in order to keep Social Security solvent, poll results suggest Senator Sanders holds views closer to those of the typical voter.

One question for both voters and policymakers is whether the aged population is really the most deserving target for additional government spending.  Much of the discussion of voter disaffection in the current election cycle has focused on the stagnation of middle class incomes and the rise in inequality.  While these represent major problems for families headed by a working-age person, they have not been notably troublesome for the nation’s elderly.  The incomes of the elderly, unlike those of the nonelderly, have increased steadily over the past three or four decades.  For low- and middle-income retirees, incomes have clearly improved. The same cannot be said for the incomes of low- and middle-income working-age families. Income inequality among the elderly has increased, to be sure, but much more slowly than among working-age families.

In new research with my colleagues Barry Bosworth and Kan Zhang, I have examined trends in real incomes and inequality among the nation’s elderly and compared them with the same trends in working-age families. We show that inequality has increased among both the elderly and nonelderly, but it has increased much faster among families headed by prime-age and younger adults than among families headed by someone past age 62.  More to the point, real money incomes have increased much faster among middle- and low-income aged families compared with middle- and low-income working-age families. 

Our estimates of the annual rate of change in real money income are displayed in the chart below. The changes are estimated over the period from 1979 to 2012 based on data reported in the Census Bureau’s annual income survey. The top panel shows changes in families with a head who is less than 62. The bottom panel shows changes in families with a head older than 62.  Each bar shows the annual rate of change in real income at the indicated position of the income distribution, either for nonaged families (in the top panel) or for aged families (in the bottom panel).  At the top of the two income distributions—that is, at the 98^th income percentile—real income gains are virtually the same in the two groups.  Further down the income ladder, the income gains differ noticeably, with bigger differences the further down we go.  Middle- and low-income working-age families have clearly fared much worse than families with an equivalent position in the old-age income distribution.

Estimates of income growth based solely on pre-tax cash incomes, such as the ones in the chart, almost certainly understate the improvement families have seen in their living standards, as I have argued elsewhere (here and here).  However, the understatement is bigger in the case of elderly and low-income Americans than it is for the nonelderly and affluent.  If we adjust family incomes to reflect the taxes families owe and the monetary value of their noncash benefits, the relative improvement in the standard of living of older Americans is even greater than is shown in the chart. Under almost any plausible income definition, the elderly have fared better than the nonelderly, especially at the bottom of the income distribution.

The income statistics do not prove the policy reforms urged by Congressional Democrats are unneeded or undesirable. Their proposals spring from an accurate reading of a long-term trend toward less pension coverage — ironically, a trend that has mainly affected working-age adults.  Whereas workers in the 1950s through the 1970s enjoyed continuous improvement in their access to employer-provided retirement benefits, the improvement ceased after 1980. Since that time, private-sector workers have seen reductions in the coverage and generosity of their employer-sponsored pensions. If the private sector voluntarily provides less retirement protection, it does not seem unreasonable to expect the government to provide more.

A crucial reason the nation’s elderly population fared better compared with the nonelderly after 1980 is that Social Security and Medicare provided them government protection that was far more generous (and more costly to taxpayers) than the protection available to working-age adults and their youngsters. The gap was especially glaring in the case of families headed by low-wage breadwinners, who have suffered sizeable reductions in pay and employment opportunities. In the years since 1980, their losses have been only modestly compensated through changes in the tax code and expansions of public health insurance.

Changes in the labor market make it important to protect future retirement benefits provided through Social Security. The same labor market developments make it even more urgent to expand the employment opportunities and improve the protections and work supports offered to working-age breadwinners.  In 2016, the weakening of future income protection for the aged is mostly theoretical. In contrast, the sinking fortunes of less skilled working-age adults are anything but theoretical. They are plain to anyone who can read Census and Bureau of Labor Statistics reports. If taxpayers can identify additional resources to pay for major new initiatives, my vote is for programs that improve the prospects of struggling wage earners. The equity arguments for such an initiative seem to me more persuasive than the case for an across-the-board benefit hike targeted on retirees.

Editor's note: This piece originally appeared in Real Clear Markets. 

Event Information

The financial sector has undergone major changes in response to the Great Recession and post-crisis regulatory reform, as a result of the Dodd-Frank Act and Basel III. These changes have created serious questions about the sector’s role in supporting economic growth and how it affects financial and overall economic stability.

On June 8, the Initiative on Business and Public Policy at Brookings explored the intersection of the financial system and economic growth with the goal of informing the public policy debate. The event featured a keynote address by Richard Berner, director of the Office of Financial Research and other participants with a wide range of views from a variety of backgrounds. Among other issues, the experts considered the changing landscape of the financial sector; growth-promoting allocation and investment decisions; credit availability for low- and moderate-income households; the ideal balance between growth and stability; and the impact of the 2014 midterm elections on regulatory reform.

 Follow the conversation at @BrookingsEcon or #Finance.

Video

• Keynote remarks by Richard Berner
• The financial sector: How has it changed?
• The view from the trenches
• The future of the U.S. financial sector

Audio

• Can the financial sector promote growth and stability?

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• Aaron Kleins presentation
• 20150608 BAER slides
• 20150608 MEHTA slides
• 20150608_financial_sector_stability_transcript

Australia's economic performance has been the standout among advanced economies for several decades. With economic growth at nearly twice the pace of US or Germany over the past decade, a remarkable 25 years without a recession and a large, highly competitive mining sector despite the end of the resources boom, Australia remains a strong economic participant in a region of the world where future global growth is likely to be generated.

But with drivers of growth over the past 25 years unlikely to be the engines of growth in coming decades, now is not a time for complacency. And if there's one lesson from Britain's decision to leave the EU, it's that that disruptive forces are sweeping through the global economy. Australia, with its cohesive politics and economic success, has been able to avoid the worst of these problems, but the dangers are present if the economic challenges are not met.

To start with, the impacts of the reforms of the 1980s and 1990s are fading. The investment boom in mining is over, and the prices for mining and agricultural exports will probably remain subdued with slower growth in China. While Australia's incomes were boosted by the improved terms of trade, this has partially reversed. The housing boom will inevitably eventually slow.

As evidenced by the results of the Brexit referendum, there is a distrust of the political and economic elites that have led the world's biggest economies. Disruptive, rapid changes in technology have not led to broad-based productivity growth. Workers in many countries have been left with stagnant incomes and governments with rising public debt.

Industry policy has a bad name among American economists who see it as a manifestation of "capture" where special interests are able to obtain subsidies from taxpayers or special protections that are not in the national interest. The modern theory of industry policy, however, recognises that a well-designed policy can actually help markets work better, therefore helping an economy like Australia's make the transition to a new growth path when faced with changing economic conditions. Productivity is the key to high growth and rising incomes – and well-designed industry policy can help.

Structure of trade competitiveness

Take, for example, Australia's manufacturing sector. Mostly because of comparative advantage, it is the smallest among all advanced economies relative to the size of its economy. In 2010, Germany had 21.2 per cent of its workforce in manufacturing while Australia's was 8.9 per cent. While it's not surprising that Australia's structure of trade competitiveness differs from Germany's because of its enormous export strength of mining and agriculture, it will benefit by taking advantage of its highly skilled workforce and the potential to develop industries based on this human capital – including advanced manufacturing industries.

One of the traditional strengths of the American economy is the close link that exists between leading universities and businesses – an area Australian policymakers are seeking to improve upon. At MIT and Stanford, professors of engineering, biology, finance or economics finish their lectures and head off to the companies they run or advise. They often enlist graduate or undergraduate students to help them with their commercial projects and these collaborations often result in jobs as well as experience. There is a danger in this model if pure research loses out to business interests, but the interaction between academia and the practical needs of companies can largely improve both research and business profitability. It's worth recalling that even the giants of science in the 18th century were motivated by the need to improve navigation or build new machines or design buildings. Funding for research should support greater industry-university cooperation as highlighted by the Watt Review.

Another important element in Australia's continued economic success is the growth of its service industries. With most jobs in these industries, the performance and productivity of services will be the largest determinant of Australia's living standards. Productivity comparisons between Australia and the United States show that Australian productivity lagged behind the US as recently as the mid-1990s, but there has since been substantial catch-up taking place. Smart regulation that promotes competition and rewards innovation are necessary to bring up the laggards. While there is a continuing debate about the possible end of productivity growth in advanced economies, Australia can still do much to catch up to global best practice.

The winners of this weekend's election will be charged with answering an important question: what is the role of government in a modern economy? How they answer that will determine future prosperity for all Australians.

Martin Baily is a senior fellow at the Brookings Institution in Washington and a former chair of the US President's Council of Economic Advisers. He has been invited by the Australian Ministry of Industry Innovation and Science to report on lessons from the US for policies to enhance economic growth, innovation and competitiveness.

Warwick McKibbin AO, is the director of the Centre for Applied Macroeconomic Analysis in the ANU Crawford School of Public Policy and is a non-resident senior fellow at the Brookings Institution.

Editor's note: this opinion first appeared in Australian Financial Review.

This weekend’s election results in Turkey were a surprise to the vast majority of Turkish pollsters and pundits, myself included. The ruling Justice and Development Party (AKP) won nearly 50 percent of the popular vote. The party can now form a single-party government, even if it doesn’t have the supermajority necessary to remake the Turkish constitution. What happened?

As with much in life, the result does make sense in hindsight. Prior to the June 7 election, President Recep Tayyip Erdoğan and the AKP leadership had supported a Kurdish peace process, in part in the hope of gaining Kurdish votes. In that election, however, not only did the AKP fail to win new Kurdish votes, but support for the Nationalist Action Party (MHP)—a far-right Turkish nationalist party—swelled, apparently out of frustration among nationalist Turks with the AKP-led peace process with the Kurds. In other words, the AKP had the worst of both worlds.

Erdoğan and the AKP leadership, recognizing the political problem this posed for them, allowed the peace process to collapse amid mounting instability driven by the Syrian civil war. This, combined with disillusionment with the MHP leadership due to their perceived unwillingness to form a coalition government, drove about two million MHP voters to the AKP this weekend. The exodus shows, in a sense, what close substitutes the two parties can be among a more nationalist voting bloc.

The controlled chaos that resulted from the collapse of the peace process—combined with the escalating refugee crisis, the fear of ISIS attacks, and the struggling economy—helped the government politically. Voters evidently recalled that it had been the AKP that brought the country out of the very tough times of the 1990s.  

In contrast, the opposition parties seem to lack leadership and appear to promise only internal squabbles and indecisiveness. Craving security and stability, voters have now turned to the one party that appears to have the strength to provide it. In that sense, Erdoğan’s nationalist gambit—which was actually a well-conceived series of political maneuvers—worked. Even some one million conservative Kurdish voters returned to the AKP.

These voters perhaps did not notice the irony that the government had also engineered the instability they feared. In part, this success derives from government’s control over the media. These elections may have been free, in the sense that Turkish voters can cast a ballot for the candidates they want. But they were not fair. The state maintained tight control over traditional and social media alike. Freedom House and the Committee to Protect Journalists, among others, have cast doubt on Turkey’s press freedom credentials. Real opposition voices are difficult for media publish or voters to see on television. Thus, for example, Selahattin Demirtaş, the leader of the pro-Kurdish Peoples' Democratic Party (HDP) and the most charismatic opposition politician in Turkey, had essentially no air time during the campaign.

There are some important upsides to the election results. For one, HDP again passed the 10 percent threshold to remain in parliament. That will help mitigate—though hardly erase—the polarization that grips the country, and will hopefully make government reconsider its abandonment of the Kurdish peace process.

More significantly, the AKP does not have what it needs to convert Turkey’s government structure into a presidential system, which would be a bad move for the country. The election results will undoubtedly revitalize Erdoğan’s push for a presidential regime in Turkey. But that requires changing the constitution, and the AKP did not achieve the supermajority that it would need to do that on its own.

Critically, changing to a presidential system will require some support from the opposition and even more importantly popular support via a referendum. As political strategists around the world have learned, people tend not to vote on the actual referendum item, per se, but based on more general opinions of their leadership. So to win a referendum on the presidential system, Erdoğan and his AKP colleagues would need to show improvements in the economy, in the security situation, on the Kurdish issue, on Syrian refugees, and on national stability more generally. Instability in Turkey, particularly the renewal of violence in the Kurdish region, will deter investment and deepen the economic slump throughout the country.

With its new majority, AKP leaders are now in a position of strength to negotiate with the HDP over Kurdish issues. The refugee crisis also means the government also has more leverage with the EU. If it chooses to use its strength to reach positive agreements on those fronts, the outcomes could be very good for the Turkish people.

To actually win a referendum on the presidential system, Erdoğan would have to work to depolarize his country. While the presidential system itself would not be good for Turkey, the process of getting there might be.