Event Information

Register for the Event

Welcome and Introduction:
Philip H. Gordon , Director, Center on the United States and Europe

Is the European Union Failing? Politics and Policy after the Referendums
Philip H. Gordon , Director, Center on the United States and Europe

Panelists:
Gerard Baker, The Times (London)
Joschka Fischer, Member of Bundestag and former German Foreign Minister
Noëlle Lenoir, President of the European Institute of HEC, former French Minister for European Affairs
Andrew Moravcsik, Princeton University/Brookings

Is Russia Lost? The Future of Russian Democracy and Relations with the West
Fiona Hill, Senior Fellow, The Brookings Institution

Panelists:
Daniel Fried, U.S. Assistant Secretary of State for European Affairs
Anatol Lieven, New America Foundation
Strobe Talbott, President, The Brookings Institution
Dmitri Trenin, Carnegie Moscow Center

Is America above the Law? A U.S.-Europe Dialogue about the War on Terror
Jeremy Shapiro, Director of Research, Center on the United States and Europe

Panelists:
Joschka Fischer, Member of Bundestag and former German Foreign Minister
Tom Malinowski, Human Rights Watch
Pauline Neville-Jones, Chair, British Conservative Party National and International Security Group
Victoria Toensing, former U.S. Justice Department Official
Ruth Wedgwood, Johns Hopkins-SAIS

       

Event Information

Register for the Event

On April 30, 2007, the Brookings Center on the United States and Europe held its fourth annual conference. As in previous years, the annual conference brought together scholars, officials, and policymakers from both sides of the Atlantic to examine the evolving roles of the United States and Europe in the global arena. Panel discussions covered some critical issues about Europe and the U.S.-Europe relationship: "The French Elections", "NATO and Afghanistan" and "Islam in Europe". Panelists included, among others, Lt. General Karl Eikenberry, Deputy Chairman of the NATO Military Committee; Ashraf Ghani, former Finance Minister of Afghanistan; Tufyal Choudhury of Durham University; Philip Gordon of the Brookings Institution; and Corine Lesnes from Le Monde.

8:30 a.m.		Continental breakfast available
8:50 a.m.		Welcome and Introduction Strobe Talbott, President, The Brookings Institution
9:00 - 10:30 a.m.		"The French Elections" Chair: Jim Hoagland, The Washington Post Panelists: Laurent Cohen-Tanugi, Skadden Arps; Notre Europe Corine Lesnes, Le Monde Philip Gordon, The Brookings Institution
10:30 - 10:45 p.m.		Break
10:45 a.m. - 12:15 p.m.		"NATO in Afghanistan" Chair: Carlos Pascual, The Brookings Institution Panelists: Lt. General Karl Eikenberry, Deputy Chairman of the NATO Military Committee Ashraf Ghani, former Finance Minister of Afghanistan Marvin Weinbaum, Middle East Institute
12:15 - 1:30 p.m.		Buffet Lunch (Saul/Zilkha)
1:30 - 3:00 p.m.		"Islam in Europe" Chair: Jeremy Shapiro, The Brookings Institution Panelists: Daniel Benjamin, The Brookings Institution Tufyal Choudhury, Durham University Jonathan Laurence, Boston College

The Center on the United States and Europe Annual Conference is made possible by the generous support of the German Marshall Fund of the United States

Transcript

• Transcript (.pdf)

Event Materials

• 20070430

       

Event Information

On May 20, 2008, the Center on the United States and Europe held its fifth annual conference. As is in previous years, the Conference brought together leading scholars, officials, and policymakers from both sides of the Atlantic to examine issues shaping the transatlantic relationship and to assess the evolving roles of the United States and Europe in the global arena.

Gary Schmitt of the American Enterprise Institute; Sir Lawrence Freedman of King’s College, London; Gideon Rachman of the Financial Times; former Norwegian Foreign Minister Jan Petersen; and Strobe Talbott, President of The Brookings Institution joined other prominent panelists and CUSE scholars for this year’s sessions. The series of panel discussions explored transatlantic relations beyond the Bush presidency, Sarkozy’s plans for France’s EU presidency, and the future of Russia under Medvedev.

Transcript

• Transcript (.pdf)

Event Materials

• 0520_europe

       

Event Information

Register for the Event

President Barack Obama has established a broad policy of engagement as a central feature of his administration’s foreign policy agenda. From the earliest days of his presidency, the president has reached out to Iran, Russia and other nations around the world, marking not only a turning of the page but possibly a whole new chapter in U.S. foreign policy. While Europeans have advocated for increased bi-lateral and multi-lateral dialogue for some time, several important questions remain. With which nations or groups should the United States and Europe engage and should there be limits to dialogue in some cases? What are the consequences if dialogue fails? Do Europeans and Americans now have the same agenda and goals for engagement?

On May 29, the Center on the United States and Europe at Brookings (CUSE) will host experts and officials from both sides of the Atlantic for the 2009 CUSE Annual Conference to address these issues. Panelists will examine the prospect of engagement with Iran and Russia, and how to deal with groups such as Hamas and the Taliban. After each panel, participants will take audience questions.

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20090529_cuse

       

Event Information

Register for the Event

With a U.S. Administration still popular across Europe and a new Lisbon Treaty designed to enhance the diplomatic reach of the European Union, transatlantic relations should now be at their best in years. But this is clearly not the case, with the strategic partners often looking in opposite directions. While the United States channels its foreign policy attention on the war in Afghanistan, counterterrorism and nuclear non-proliferation, Europe is turning inward. Despite its ambitions, the European Union has yet to achieve the great global role to which it aspires, or to be the global partner that Washington seeks. Moreover, the Greek financial crisis has raised questions about the very survival of the European project.

On June 2, the Center on the United States and Europe (CUSE) at Brookings and the Heinrich Böll Foundation hosted experts and top officials from both sides of the Atlantic for the 2010 CUSE Annual Conference. Panelists explored critical issues shaping the future of transatlantic relations in the post-Lisbon Treaty era, including Europe’s Eastern neighborhood and the role Russia plays, and the impact of the Eurozone crisis.

After each panel, participants took audience questions.

Audio

• From the Lisbon Treaty to the Eurozone Crisis: A New Beginning or the Unraveling of Europe?
• From the Lisbon Treaty to the Eurozone Crisis: A New Beginning or the Unraveling of Europe?
• From the Lisbon Treaty to the Eurozone Crisis: A New Beginning or the Unraveling of Europe?

Transcript

• Transcript (.pdf)

Event Materials

• 20100602_eurozone

       

There has been no shortage of news about South Africa’s recent economic and political turmoil—from its plummeting currency and slowing economy, to President Zuma’s cabinet shake-up, to weeks-long student protests over rising tuition fees in October.

Understanding what is driving political volatility requires understanding the central economic challenge facing South Africa’s major metropolitan regions: insufficient labor market opportunities for young people.

A recent Brookings report found that the unemployment rate among youth (ages 15 to 34) in Gauteng, the home province of the Johannesburg region, was nearly 40 percent, exceeding the 37 percent national rate. Young people continue to flock to Johannesburg, and the broader Gauteng City-Region that surrounds it, in search of economic opportunity. But the city-region has only created jobs at a 1.3 percent annual clip since 2000, far lower than peer regions like Shenzhen (8.2 percent), Istanbul (2.8 percent), and Santiago (2.4 percent), limiting its ability to absorb young workers. At the same time, the skills demands of the labor market have shifted as the region’s economy has transitioned from mining to more advanced services, creating a mismatch between what education and training systems are providing and what the labor market demands. This employment crisis matters for both economic competitiveness (output per worker growth, a rough measure of productivity, has stagnated since 2010) and economic justice (the unemployment rate for black South Africans is four times the rate for whites).

At a recent Global Cities Initiative event in Johannesburg local private, public, and civic leaders discussed both the immense scale of the youth unemployment challenge and an ambitious proposed solution: the youth skills empowerment initiative “Vulindlel’ eJozi” (a Zulu phrase meaning “open the way in Johannesburg”) created by the city of Johannesburg in partnership with the Harambee Youth Employment Accelerator. Of the approximately 1.6 million Johannesburg residents aged 19-34, just under half are not engaged in employment, education, or training. Vulindlel’ eJozi’s seeks to “reach 200,000 of these young people to meaningfully include and engage them in our economy over the next year.”

Vulindlel’ eJozi stands out for at least two reasons. Most glaringly is its sheer scale. Through its work with Harambee and other initiatives, the city of Johannesburg provided over 45,000 opportunities for youth to move towards employment during the first quarter of 2015. Second, the partnership leverages the resources and competencies of the private and civic sectors. Harambee has successfully trained and placed 20,000 youth in sustained formal employment with over 200 employers and ambitiously wants to engage 500,000 South African youth in their training programs. Constant employer feedback on what skills are demanded is one of the accelerator’s hallmarks, helping Harambee achieve higher trainee retention rates than industry averages.  

Youth unemployment, of course, is not a problem unique to South Africa. Recent Brookings research found that labor force participation, employment, and median earnings among American teens and young adults all declined between 2000 and 2014. How effectively the city of Johannesburg can build the institutional architecture to engage with private and NGO actors on a youth employment initiative at this scale will ultimately determine its success. These lessons could serve other cities well as they seek to deliver economic opportunity to their young people.

      

      

In his new book, “The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War,” Northwestern University economist Bob Gordon argues that the century between 1870 and 1970 was exceptionally good for U.S. households (particularly 1920 to 1950) but that the years since 1970 have been disappointing and the future looks disappointing too.

His postscript includes a few thoughts that deserve immediate attention in today’s economic policy debates: Whatever the causes of the distressing slowdown in the growth of productivity (the amount of stuff produced for each hour of work) and the increase in inequality, what policies might both increase productivity and decrease inequality? 

Many years ago, economist Art Okun argued that we had to choose between policies that increased efficiency and those that increased equity. Perhaps. But  if there are policies that could achieve both, it’s time to try them. 

Mr. Gordon lists several at the end of his book, some conventional and others less so. They include: 

1. Make the earned-income tax credit (a bonus paid by the government to low-wage workers) more comprehensive and generous, a complement to raising the minimum wage. The earned-income tax credit, most economists agree, encourages work. 

2. Reduce the share of Americans who are in prison, which is costly, disproportionately hurts the poor, and has long-lasting negative effects on former prisoners and their families. Also, legalize drug use to save money on enforcement, raise tax revenue, and eliminate the negative consequence a criminal record has on employment.

3. Shift financing of K-12 schooling from local property taxes to statewide revenue sources to reduce inequality and improve outcomes. Shift college financing from loans to income-contingent repayment administered through the income tax system, which is what Australia does.

4. Roll back regulations that hurt the economy and the less affluent, including copyright and patent laws (which have gone too far), occupational licensing (which is a barrier to entry and employment), and zoning and land-use regulations (which boost housing costs). 

5. Reform immigration laws to encourage high-skilled workers, including those trained at U.S. graduate schools. 

Mr. Gordon notes (Page 314) “the extraordinary investment” by state and local governments in education and infrastructure between 1870 and 1940 and cites the substantial boost to productivity created by the interstate highway system. He doesn’t put increased public infrastructure investment on his list, though it belongs there. 

Every presidential candidate should be asked what policies he or she would offer to increase the pace of U.S. productivity growth and to narrow the widening gap between winners and losers in the economy. Bob Gordon’s list is a good place to start.

---

Editor's note: this post first appeared in the Wall Street Journal Washington Wire blog.

      

       

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

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

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

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

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

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

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

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

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

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

      

Totaling more than $111,000,000.00, the 2014 North Carolina Senate contest between Kay Hagan and Thom Tillis is the most expensive Senate election in the nation’s history (not adjusted for inflation). As we investigated earlier this week, outside money has been flowing into American politics in the wake of the Supreme Court’s Citizens United decision in 2010.

When candidate and independent spending are combined, 2014 ranks among the most expensive, if not the most expensive, in history. However, understanding campaign spending takes more than a simple examination of total dollars. Spending differences across states can occur for a variety of reasons, including geographic size, population size, and the expense of media markets.

As a result, a more useful metric for understanding the magnitude of campaign activity is spending per voter, and 2014 offers an interesting case: Alaska. This year, Alaska saw a highly competitive Senate race in which both outside groups and candidates spend substantial amounts of money. Alaska ranks 47th in population with just over 700,000 residents and an estimated 503,000 eligible voters. After adjusting spending (both candidate and independent expenditures) for each state's estimated voting eligible population, Alaska's 2014 Senate race, unsurprisingly, ranks as the most expensive in US history.

Alaska originally ranked 6^th most expensive in 2014, with about $60 million spent total. But it jumps to first place in dollars spent per voter. Candidates and outside groups spent roughly $120 per voter in Alaska this year, about double the next most-expensive race, Montana 2012, where candidates and outside groups spent $66.5 per voter. By comparison, the $111 million Senate race in North Carolina—with a voting-eligible population of about 6,826,610—equaled only $16.25 per voter. That’s still far above the median spending per race for all three cycles ($7.3 per voter) but certainly serves to put the spending in context.

Relative to 2012 and 2014, in terms of both combined and per-voter spending, 2010 could be considered one of the cheaper cycles for Senate races thus far.

These data lend some support to the observation that, since Citizens (and more recently McCutcheon v. FEC) independent expenditures are quickly outpacing contributions to candidates. But given changes in reporting requirements and limited data, there is still a lot about outside spending we still don’t know.

All in all, candidate and outside group spending totaled just over a billion dollars in Senate races in 2014. The fact that North Carolina alone accounted for more than ten percent of that spending is astonishing, but no less remarkable is the intensity of spending per voter in Alaska. But if spending continues to grow as it has the last three election cycles, both of those records will likely be shattered in 2016.

      

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

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

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

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

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

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

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

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

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

       

       

       

Researchers from the Brookings Metropolitan Policy Program have released new Earned Income Tax Credit (EITC) data from the IRS on federal individual income tax filers. The interactive data are available for all ZIP codes, cities, counties, metropolitan areas, states, state legislative districts, and congressional districts in the U.S. Users can also find new MetroTax model estimates of the EITC-eligible population in 2012 based on the latest American Community Survey data.

From the 2012 MetroTax model, here are 10 facts about EITC-eligible tax filers

• 71.1 million people live in tax units that are eligible
• 31.1 million children live in eligible households
• 72.8% of eligible filers speak English
• 50.9% are white
• 36.1% received food stamps at some point in the last year
• 25.8% are married filing jointly
• 13.2% have earned a bachelor’s degree or higher
• The median adjusted gross income is $13,638
• 12.7% of eligible filers work in the retail trade industry
• 13.6% work in office and administrative occupations

Read the blog post by Jane Williams and Elizabeth Kneebone to learn more and also visit the EITC interactive.

      

In new Urban-Brookings Tax Policy Center analysis of Earned Income Tax Credit (EITC) take-up at the county level, Benjamin Harris, a fellow in Economic Studies, and Research Assistant Lucie Parker use zip-code level data on taxes and demographics to take a "fresh look" at the EITC. "Since its creation in 1975," they write, "the Earned Income Tax Credit has played a major role in the U.S. safety net." Earlier this year, Harris presented EITC take-up using IRS data from 2007. Compare that to the new list of ten counties with the highest share of EITC recipients below:

Rank	County	EITC Share (pct)
10	Sharkey Co., MS	50.5
9	Quitman Co., MS	50.7
8	Coahoma Co., MS	51.6
7	Starr Co., TX	52.1
6	Claiborne Co., MS	52.7
5	Humphreys Co., MS	53.0
4	Buffalo Co., SD	54.1
3	Shannon Co., SD	54.5
2	Holmes Co., MS	55.5
1	Tunica Co., MS	56.1

"The regional variation EITC claiming is stark," Harris and Parker conclude. "The counties with the highest share of taxpayers claiming the EITC are overwhelming located in the Southeast. ... [O]ver half the taxpayers in a large share of counties in Alabama, Georgia, and Mississippi claim the EITC. With few exceptions, almost all counties with high EITC claiming are located in the South. Relative to the South, the Northeast and the Midwest have much lower claiming rates. Moreover, average EITC benefit closely follows the pattern for share of taxpayers taking up the credit: in counties where more taxpayers claim the credit, the credit is larger on the whole."

Visit this U.S. map interactive to get county level data on share of taxpayers claiming EITC as well as average EITC amount, in dollars, per county.

      

Each year millions of low- to moderate-income Americans supplement their income by claiming the Earned Income Tax Credit (EITC) during tax season. Last year, 1 in 5 taxpayers claimed the credit and earned an average of nearly $2,400.

This tax season, some of those eligible for the EITC may also be able to claim, for the first time, a new credit created by the Affordable Care Act (ACA) to offset the cost of purchasing health insurance for lower-income Americans. It’s called the ACA premium tax credit.

To qualify for the ACA premium tax credit, filers need first to have an annual income that falls between 100 and 400 percent of the federal poverty line (between $11,670 and $46,680 for a single-person household in 2014). Beyond the income requirements, however, filers must also be ineligible for other public or private insurance options like Medicaid or an employer-provided plan.

Why the tax credit overlap matters

Identifying the Americans eligible for both credits is important because it sheds light on how many still need help paying for health insurance even after the ACA extended coverage options.

In a recent study of the EITC-eligible population, Elizabeth Kneebone, Jane R. Williams, and Natalie Holmes estimated what share of EITC-eligible filers might also qualify for the ACA premium tax credit this year.

Below, see a list of the top 10 states with the largest overlap between filers eligible for the EITC and those estimated to qualify for the ACA premium tax credit.* Notably, none of these states has expanded Medicaid coverage to low-income families after the passage of the ACA.

Nationally, an estimated 7.5 million people (4.2 million “tax units”) are likely eligible for both the ACA premium tax credit and the EITC. Nearly 1.3 million of those tax units are from the following ten states.

1. Florida

Overlap: 22.5 percent / 405,924 tax units
State-based exchange? No Expanded Medicaid coverage? No

2. Texas

Overlap: 21.4 percent / 513,061 tax units
State-based exchange? No Expanded Medicaid coverage? No

3. South Dakota

Overlap: 20.5 percent / 15,124 tax units
State-based exchange? No Expanded Medicaid coverage? No

4. Georgia

Overlap: 19.8 percent / 186,020 tax units
State-based exchange? No Expanded Medicaid coverage? No

5. Louisiana

Overlap: 19.6 percent / 86,512 tax units
State-based exchange? No Expanded Medicaid coverage? No

6. Idaho

Overlap: 19.3 percent / 28,855 tax units
State-based exchange? Yes Expanded Medicaid coverage? No

7. Montana

Overlap: 18.9 percent / 18,138 tax units
State-based exchange? No Expanded Medicaid coverage? No

8. Wyoming

Overlap: 18.4 percent / 7,276 tax units
State-based exchange? No Expanded Medicaid coverage? No

9. Utah

Overlap: 18.1 percent / 42,284
State-based exchange? No (Utah runs a small businesses marketplace, but it relies on the federal government for an individual marketplace) Expanded Medicaid coverage? No

10. Oklahoma

Overlap: 18.0% / 63,045 tax units
State-based exchange? No Expanded Medicaid coverage? No

* For the purposes of this list, we measured the overlap in “tax units,” not people. One tax unit equals a single tax return. If a family of four together qualifies for the ACA premium tax credit, they would be counted as one tax unit, not four, since they filed jointly with one tax return.

       

       

       

Executive Summary

At the invitation of President George W. Bush, the G20 leaders met on November 15, 2008, in Washington, DC, in response to the worldwide financial and economic crisis. With this summit meeting the reality of global governance shifted surprisingly quickly. Previously, major global economic, social and environmental issues were debated in the small, increasingly unrepresentative and often times ineffectual circle of G8 leaders. Now, there is a larger, much more legitimate summit group which can speak for over two-thirds of the world’s population and controls 90% of the world’s economy.

The successful first G20 Summit provides a platform on which President-elect Obama can build in forging an inclusive and cooperative approach for resolving the current financial and economic crisis. Rather than get embroiled in a debate about which country is in and which country is out of the summit, the new U.S. administration should take a lead in accepting the new summit framework for now and focus on the substantive issues. Aside from tackling the current crisis, future G20 summits should also drive the reform of the international financial institutions and address other major global concerns—climate change, poverty and health, and energy among others. With its diverse and representative membership of key countries and with a well-managed process of summit preparation and follow-up the new G20 governance structure would allow for a more inclusive deliberation and more effective response to today’s complex global challenges and opportunities.

Policy Brief #168

A Successful G20 Summit—A Giant Step Forward

Once announced, there was speculation that the G20 Summit would be at best a distraction and at worst a costly failure, with a lame duck U.S. president hobbled by a crisis-wracked economy and a president-elect impotently waiting at the sidelines, with European leaders bickering over seemingly arcane matters, and with the leaders of the emerging economies sitting on the fence, unwilling or unprepared to take responsibility for fixing problems not of their making.

As it turned out, the first G20 Summit was by most standards a success. It served as a platform for heads of state to address the current financial turmoil and the threats of the emerging economic crisis facing not only the U.S. and Europeans, but increasingly also the rest of the world. The communiqué unmistakably attributes blame for the crisis where it belongs—to the advanced countries. It lays out a set of principles and priorities for crisis management and an action plan for the next four months and beyond, and it promises to address the longer-term agenda of reform of the global financial system. Very importantly, it also commits the leaders to meet again in April 2009 under the G20 umbrella. This assures that the November G20 Summit was not a one-off event, but signified the beginning of a new way of managing the world economy. The U.S. Treasury, which apparently drove the decision to hold the G20 rather than a G8 summit and which led the brief preparation process, deserves credit for this outcome.

A Long Debate over Global Governance Reform Short-circuited

With this successful summit a number of unresolved issues in global governance were pushed aside virtually overnight:

• The embarrassing efforts of past G8 summits to reach out to the leaders of emerging market economies with ad hoc invitations to join as part-time guests or through the well-meaning expedient of the “Heiligendamm Process”—under which a G8+5 process was to be institutionalized—were overtaken by the fact of the G20 summit.
• A seemingly endless debate among experts about what is the optimal size and composition for an expanded summit—G13, G14, G16, G20, etc. —was pragmatically resolved by accepting the format of the already existing G20 of finance ministers and central bank presidents, which has functioned well since 1999. With this, the Pandora’s Box of country selection remained mercifully closed. This is a major accomplishment, which is vitally important to preserve at this time.
• The idea of a “League of Democracies” as an alternative to the G8 and G20 summits, which had been debated in the U.S. election, was pushed aside by the hard reality of a financial crisis that made it clear that all the key economic players had to sit at the table, irrespective of political regime.
• Finally, the debate about whether the leaders of the industrial world would ever be willing to sit down with their peers from the emerging market economies as equals was short circuited by the picture of the U.S. president at lunch during the G20 Summit, flanked by the presidents of two of the major emerging economies, Brazil and China. This photograph perhaps best defines the new reality of global governance in the 21st Century.

Is the G20 Summit Here to Stay?

The communiqué of the November 15, 2008 Summit locked in the next G20 summit and hence ordained a sequel that appears to have enshrined the G20 as the new format to address the current global financial and economic crisis over the coming months and perhaps years. Much, of course, depends on the views of the new U.S. administration, but the November 2008 Summit has paved the way for President Obama and his team to move swiftly beyond the traditional G8 and to continue the G20 format.

In principle there is nothing wrong with exploring options for further change. However at this juncture, we strongly believe that it is best for the new U.S. administration to focus its attention on making the G20 summit format work, in terms of its ability to address the immediate crisis, and in terms of subsequently dealing with other pressing problems, such as global warming and global poverty. There may be a need to fine-tune size and composition, but more fundamental changes, in our view, can and should wait for later since arguments about composition and size—who is in and who is out—could quickly overwhelm a serious discussion of pressing substantive issues. Instead, the next G20 Summit in the United Kingdom on April 2, 2009 should stay with the standard G20 membership and get on with the important business of solving the world’s huge financial and economic problems.

One change, however, would be desirable: At the Washington Summit in November 2008 two representatives for each country were seated at the table, usually the country’s leader and finance minister. There may have been good reasons for this practice under the current circumstances, since leaders may have felt more comfortable with having the experts at their side during intense discussions of how to respond to the financial and economic crisis. In general, however, a table of 40 chairs undoubtedly is less conducive to an open and informal discussion than a table half that size. From our experience, a table of 20 can support a solid debate as long as the format is one of open give and take, rather than a delivery of scripted speeches. This is not the case for a table with 40 participants. The G8 format of leaders only at the table, with prior preparation by ministers who do not then participate in the leaders level summits, should definitely be preserved. To do otherwise would dilute the opportunity for informal discussion among leaders, which is the vital core of summit dynamics.

What Will Happen to the G8 Summit and to the G7 and G20 Meetings of Finance Ministers?

As the world’s financial storm gathered speed and intensity in recent months, the inadequacy of the traditional forums of industrial countries—the G8 group of leaders and the G7 group of finance ministers—became obvious. Does this mean that the G8 and G7 are a matter of the past? Most likely not. We would expect these forums to continue to meet for some time to come, playing a role as caucus for industrial countries. In any event, the G20 finance ministers will take on an enhanced role, since it will be the forum at which minister-level experts will lay the ground on key issues of global financial and economic management to ensure that they are effectively addressed at summit level by their leaders. The G20 Summit of November 15 was prepared by a meeting of G20 finance ministers in this fashion.

It may well be that the dynamics of interactions within the G20 will cause coalitions to be formed, shifting over time as issues and interests change. This could at times and on some issues involve a coalition of traditional G7 members. However, with increasing frequency, we would expect that some industrial countries would temporarily team-up with emerging market country members, for example on agricultural trade policies, where a coalition of Argentina, Australia, Brazil and Canada might align itself to challenge the agricultural protection policies of Europe, Japan and the United States. Or in the area of energy, a coalition among producer states, such as Indonesia, Mexico, Russia and Saudi Arabia might debate the merits of a stable energy supply and demand regime with an alliance among energy users, such as China, Europe, Japan, South Africa and the United States. It is this potential for multiple, overlapping and shifting alliances, which creates the opportunities for building trust, forcing trade-offs and forging cross-issue compromises that makes the G20 summit such an exciting opportunity.

What Should Be the Agenda of Future G20 Summits?

The communiqué of the November 2008 G20 Summit identified three main agenda items for the April 2009 follow-up summit: (1) A list of key issues for the containment of the current global financial and economic crisis; (2) a set of issues for the prevention of future global financial crises, including the reform of the international financial institutions, especially the IMF and World Bank; and (3) a push toward the successful conclusion of the Doha Round of WTO trade negotiations.

The first item is obviously a critical one if the G20 is to demonstrate its ability to help address the current crisis in a meaningful way. The second item is also important and timely. The experience with reform of the global financial institutions in the last few years has demonstrated that serious governance changes in these institutions will have to be driven by a summit-level group that is as inclusive as the G20. We would hope that Prime Minister Gordon Brown, as chair—with his exceptional economic expertise and experience in the international institutions, especially the IMF—will be able to forge a consensus at the April 2 summit in regard to reform of the international financial institutions. The third agenda item is also important, since the Doha Round is at a critical stage and its successful conclusion would send a powerful signal that the world community recognizes the importance of open trade relations in a time of crisis, when the natural tendency may be to revert to a protectionist stance.

However, we believe three additional topics should be added to the agenda for the April 2009 G20 Summit:

• First, there should be an explicit commitment to make the G20 forum a long-term feature of global governance, even as the group may wish to note that its size and composition is not written in stone, but subject to change as circumstances change.
• Second, the communiqué of the November summit stated that the G20 countries are “committed to addressing other critical challenges such as energy security and climate change, food security, the rule of law, and the fight against terrorism, poverty and disease”. This needs to be acted upon. These issues cannot be left off the table, even as the global financial and economic crisis rages. If anything, the crisis reinforces some of the key challenges which arise in these other areas and offers opportunities for a timely response. The U.K.-hosted summit should launch a G20 initiative to develop framework ideas for the post-Kyoto climate change agreement at Copenhagen.
• Third, assuming the April 2009 summit commits itself—as it should—to a continuation of the G20 summit format into the future, it must begin to address the question of how the summit process should be managed. We explore some of the possible options next.

How Should the G20 Summit Process Be Managed?

So far the G7, G8 and G20 forums have been supported by a loose organizational infrastructure. For each group the country holding the rotating year-long presidency of the forum takes over the secretariat function while a team of senior officials (the so-called “sherpas”) from each country meets during the course of the year to prepare the agenda and the communiqué for leaders and ministers. This organization has the advantage of avoiding a costly and rigid bureaucracy. It also fosters a growing level of trust and mutual understanding among the sherpas.

The problem with this approach has been two-fold: First, it led to discontinuities in focus and organization and in the monitoring of implementation. For the G20 of finance ministers, this problem was addressed in part by the introduction of a “troika” system, under with the immediate past and future G20 presidencies would work systematically with the current G20 presidency to shape the agenda and manage the preparation process. Second, particularly for the countries in the G20 with lesser administrative capacity, the responsibility for running the secretariat for a year during their country’s presidency imposed a heavy burden.

For the G20 summit, these problems will be amplified, not least because these summits will require first-rate preparation for very visible and high-level events. In addition, as the agenda of the G20 summit broadens over time, the burden of preparing a consistent multi-year agenda based on strong technical work will be such that it cannot be effectively handled when passed on year to year from one secretariat in one country to another secretariat in another country, especially when multiple ministries have to be engaged in each country. It is for this reason that the time may have come to explore setting up a very small permanent secretariat in support of the G20 summit.

The secretariat should only provide technical and logistical support for the political leadership of the troika of presidencies and for the sherpa process, but should not run the summit. That is the job of the host member governments. They must continue to run the summits, lead the preparations and drive the follow-up. The troika process will help strengthen the capacity of national governments to shoulder these burdens. Summits are the creatures of national government authorities where they have primacy, and this must remain so, even as the new summits become larger, more complex and more important.

Implications for the Obama Administration

The November 2008 G20 Summit opened a welcome and long-overdue opportunity for a dramatic and lasting change in global governance. It will be critical that the leaders of the G20 countries make the most of this opportunity at the next G20 Summit on April 2. The presence of U.S. President Obama will be a powerful signal that the United States is ready to push and where necessary lead the movement for global change. President-elect Obama’s vision of inclusion and openness and his approach to governing, which favors innovative and far-reaching pragmatic responses to key national and global challenges, make him a great candidate for this role.

We would hope that President Obama would make clear early on that:

• He supports the G20 summit as the appropriate apex institution of global governance for now;
• He may wish to discuss how to fine-tune the summit’s composition for enhanced credibility and effectiveness but without fundamentally questioning the G20 framework;
• He supports cooperative solutions to the current financial crisis along with a serious restructuring of the global financial institutions;
• He will look to the G20 summit as the right forum to address other pressing global issues, such as climate change, energy, poverty and health; and
• He is ready to explore an innovative approach to effectively manage the G20 summit process.

These steps would help ensure that the great promise of the November 2008 G20 Summit is translated into a deep and essential change in global governance. This change will allow the world to move from a governance system that continues to be dominated by the transatlantic powers of the 20th century to one which reflects the fundamentally different global economic and political realities of the 21st century. It would usher in a framework of deliberation, consultation and decision making that would make it possible to address the great global challenges and opportunities that we face today in a more effective and legitimate manner.

Downloads

• Download

      

EXECUTIVE SUMMARY

In November 2008, President George W. Bush convened the first G-20 summit in Washington to address the worst global financial economic crisis since the Great Depression. This summit provided a long-overdue opportunity for a dramatic and lasting change in global governance. This was followed by the election of Barack Obama, who had campaigned on a distinctly different foreign policy platform compared with his Republican rival, Senator John McCain. These two events were no mere coincidence.

The global crisis has moved the United States, along with the rest of the world, toward a new global economic order, with the G-20 summit as one of the principal manifestations of the new global governance system. Of course, movement toward this new economic arrangement and progress toward reformed global governance are not inevitable. It will take a clear and sustained commitment to a new set of values and strong leadership, especially from President Obama and the United States, to ensure that the G-20 summit is not a short-lived exception to what had been a long-standing stalemate in global governance reform. The effectiveness of the G-20 in addressing the global economic crisis could lay the foundation for a new global order and provide the impetus for the many other necessary global governance reforms. Whether or not this happens will depend to a significant extent on the direction chosen by President Obama.

The president’s vision of inclusion and openness and his approach to governing, which favors innovative and far-reaching pragmatic responses to key national and global challenges, make him a great candidate for this role. In due course the G-20 summit can also serve as a platform for addressing other pressing global issues, including trade, climate change, energy and food security and reform of global institutions. To achieve such an outcome, President Obama and other world leaders need to demonstrate a clear vision and strong leadership starting at the G-20 Summit in Pittsburgh and beyond.

“Old Economic Order” versus “New Economic Order”

From recent debates on foreign policy and global governance, we have identified two different perspectives or sets of principles underlying the approaches toward U.S. and global foreign policy. Table 1 summarizes the key elements of what we call the “Old Economic Order” in juxtaposition to the “New Economic Order.”

Table 1: Old versus New Economic Order

(Note: This table is adapted from one first presented by the authors in a seminar at the IMF in June 2007. See www.imf.org/external/np/seminars/eng/2007/glb/bl030607.pdf )

In the Old Order, the nation state is the point of departure, stressing the importance of sovereignty and national interest as the key principles driving a unilateral and assertive foreign policy. In contrast, the New Order’s starting point considers that we live in a global society, where interdependency and recognition of common interests are the key principles to be pursued in reciprocal relations and with mutual respect across borders. Under the Old Order the rules of national power politics prevail, as competing blocs and fixed alliances strive for predominance, with “hard power” if necessary. Instead, the New Order operates on the basis of a new multilateralism, which builds on the prevalence of global networks in all spheres of life and multiple coalitions across borders, where bargaining for compromise and the tools of “soft power” prevail. Finally, the Old Order promotes the notion that a single economic and political model should prevail, while the New Order accepts that different economic and political models coexist and compete side by side.

In the most simple terms, the Old Order broadly reflects the principles underlying the foreign policy agenda of the Bush administration and Senator John McCain’s presidential platform, while the New Order approximates those underpinning the platform of Senator Barack Obama’s presidential campaign and of his administration’s foreign policy stance. Key elements of the Old Order (except the last one) have also been attributed to the current foreign policy approach of Russia, while New Order principles can be ascribed to the European Union.

In fact, what is reflected in these two approaches is the difference between twentieth-century principles of foreign policy versus principles appropriate to today’s realities. We believe there are three interrelated sets of drivers of change that necessitate moving from the Old Order to the New Order. These drivers include the changing global demographic and economic balance, emerging global threats and the need for a more effective global governance system.

Drivers of Change

The first driver of change is the shifting global demographic and economic balance. By 2050, the world population is projected to reach 9.1 billion, up from 6.4 billion today, with the increase occurring almost entirely in today’s developing countries. China is widely predicted to be the largest economy in the early 2040s, with the U.S. economy in second place and India’s in third. Other emerging market economies, including Brazil, Indonesia and Russia, will be important economic players, while individual European countries will recede in importance. Continental Eurasia will be the new hub of global integration as China, India, Russia, the European Union and the Middle East’s energy-producing countries knit their economies ever closer together. The United States will remain a superpower, but only one among others. Together, the major world powers will have to confront the fact that people in poorer and weaker states will feel left behind. Simultaneously, cross-border networks—economic and political, public and private, elite and grassroots, legitimate and illegitimate—will continue to grow and will weaken the traditional hold states have over the economic, financial, social and political actions of their citizens. These networks will create bonds that will either reinforce or undermine global stability.

The second driver of change is a set of emerging global threats:

• The current financial and economic crisis—triggered by poor macroeconomic management and lax financial regulation—reflects the realities of long-term financial imbalances among key economies. It proves the difficulties of managing a highly interdependent global financial system in the absence of agreed-upon global financial surveillance, supervision and regulation. It is likely that risks of global financial stress will continue in the coming decades.
• Global disparities will increase as the rich and the rapidly growing economies do well, while many poor and stagnating countries are left behind. There is potential for rising disparities within countries, too. These inequities will reinforce risks of domestic and cross-border conflict and terrorism. At the same time, the United States and other industrialized countries face a progressive loss of traditional industries, jobs and wages. Aging populations and overburdened pension systems will challenge their fiscal stability and may lead to groundswells of anti-globalization sentiments.
• Rising food and energy prices, environmental threats and the risks of global epidemics—reinforced by population pressures—particularly affect the poorest countries.
• Growing global interdependencies across borders and sectoral lines mean that individual countries can no longer address these threats alone and that a global response has to be coordinated across sectors.

The third driver of change is the growing and widespread recognition that the current system of global governance has become increasingly fragmented, ineffective, outdated and resistant to change. This systemic weakness is reflected in the persistent stalemate on many of the pressing global issues—most notably the Doha trade round—but also on global poverty, climate change and the risk of pandemics. Moreover, global institutions have become unrepresentative in the face of the changed global economic and political balances. Hence their legitimacy is suffering badly, and yet there is stalemate in the reform of individual international organizations.

Together, these three factors have made the principles of the Old Order irrelevant and strongly point in the direction of a New Order. They represent the new reality for governments, citizens and international institutions and force them to adopt new principles and reform existing institutions.

While the drivers are strong and the new global reality is seemingly unassailable, change is not inevitable. Old habits die hard. In the United States, traditions of self-reliance and “exceptionalism” continue to shape Americans’ views of the rest of the world. At the same time, the widespread belief in the virtues of unfettered markets and low taxes, the influence of special interests for protection (agriculture, labor, old industry, banking) and the prevailing fractiousness of political decision-making may well undermine President Obama’s efforts to move toward a new global paradigm. Compounding the entrenchment of the Old Order, new nations that are still recovering from centuries of colonialism—facing economic and political instability and wishing to catch up with the successful industrial countries—are lured to a strong sovereign nation state, unfettered control over their borders and their citizens, and a confrontational approach to foreign policy. Even the much admired willingness of the Europeans to give up sovereignty in favor of supranational institutions has its limits, not least when it comes to giving up their prerogatives of dominating the governing boards of the international financial institutions and other global forums.

Leadership, conviction and persistence will be required among many actors on the global stage to ensure there is progress toward effective reform of global institutions. This potential for change is exemplified by the recent emergence of the G-20 summit as a vehicle for global governance.

The G-20 Summit—Origins, Options and Obstacles

Origins. The G-20 summit had its origins in the annual meetings of the G7—the leaders of a group of seven major Western industrial countries who gathered annually starting in the 1970s, initially to enhance economic and financial policy coordination in reaction to a major financial crisis. After the break-up of the Soviet Union, the G8 was formed by the addition of the Russian Federation. The G8 increasingly became preoccupied with global economic and political issues—in effect assuming the role of a global steering group. But widespread criticism began to mount about its role. The G8 summits were seen as ritualistic in process, ineffective in impact and increasingly unrepresentative in the face of global population and economic shifts, and hence lacking in legitimacy as a global steering group. The onset of the global financial crisis in mid-2008 pushed President George W. Bush into convening the G-20 Summit on November 15, 2008.

The ministerial-level G-20 was first created in the aftermath of the 1997-98 East Asia financial crisis. By convening representatives from 10 industrialized economies and 10 emerging market economies, the G-20 presented a much more geographically and culturally diverse group than the G8. With about 90 percent of the world’s economy and two thirds of the world’s population, the G-20 is also much more representative than the G8. Emerging market economies have been fully engaged in managing the proceedings of the meetings of G-20 finance ministers and central bank governors. It is therefore not surprising that there had been persistent calls by some experts and politicians for using the G-20 as a platform to replace the G8. While moving from G8 to G-20 summit might not create an optimal global steering group, it is a pragmatic and effective step, especially in response to crisis.

Options. Will the G-20 be a short-lived experiment or will it prove an effective tool of global governance? Various options are under debate among experts and practitioners. One possibility is to return to the G8 summits like the one Italy hosted in 2009 and Canada plans to host in 2010. There is concern that the G-20 format is too unwieldy for effective exchanges among the key players. Hence, there will be continuing debates about reducing the size of the summit to somewhere between thirteen and sixteen members, as reflected in the recent proposal by the French President, Nicolas Sarkozy, to create a G14. However, there are pressures to expand the number of participants to include more countries and to expand regional representation. Then there are proposals to develop a constituency-based approach to membership, with universal participation as in the case of the international financial institutions. Further, German Chancellor Angela Merkel and a United Nations Commission chaired by Nobel laureate Joseph Stiglitz propose to establish an Economic Security Council at the UN.

None of these options will likely materialize in the foreseeable future. Instead there are two probable outcomes: The first is the continuation of the G-20 summit with a gradually expanding mandate beyond the current crisis. For this to be successful, it is critical that the G-20 format proves its effectiveness in the coming months and years. This outcome has three requirements: that the number of participants does not expand; that participants focus on a limited number of action items; and that a small but effective secretariat is established to support and monitor the G-20 summit with logistics and technical expertise.

The most likely alternative to the G-20 summit is what is frequently referred to as “variable geometry.” Under this scenario, selected world leaders would convene on specific topics in shifting constellations, with participation of the most important actors decided separately for each topic. For example, the G-20 might continue to meet on global financial and economic matters for some time to come, while different groups would convene for action on climate change, nuclear proliferation or other topics. Support for this plan appears to be emerging from the Obama administration. It co-convened the summit on climate change at the tail-end of the 2009 G8 Summit, hosts the September 2009 G-20 economic summit in Pittsburgh and has called for a summit on nuclear non-proliferation in the spring of 2010. The challenge for summits of “variable geometry” is the ever-shifting number and composition of participants, the difficulty of systematic organization and follow-up and continuing debates about who would convene the summits, when, and with what participation.

Obstacles. As we look ahead, we see a number of challenges for the evolution of global summits beyond the G8, whether toward an effective G-20 or some alternative, especially summits of variable geometry. These challenges emanate from the diverging interests of four sets of players: the United States, Europe, the new emerging powers and the rest of the world.

For the foreseeable future, active U.S. leadership is needed to overcome inertia and collective action problems in addressing global challenges and breaking the stalemate in global governance reform. The Obama administration appears to strongly support a paradigm shift toward a new global order, but so far has not announced its position on summit modalities.

Europe is a key player and has proven a major obstacle to global governance reform as it continues to claim far too many chairs at the G-20 (and in other global forums and institutions) for its economic and demographic weight. In effect, Europeans can either retain their over-representation, which gives them a fragmented voice and weakens their influence while also weakening the global institutions; or they can bundle their votes, chairs and voice for greater impact and to ensure more effective international organizations. Unfortunately, the current stalemate on internal EU governance reform blocks any new European approach to global governance reform.

The new emerging powers, especially China, India and Brazil, will face the challenge of moving beyond their traditional role of the “excluded” and “representatives of the South.” They will need to accept co-responsibility for solving global problems and creating effective global governance institutions. They will have to look beyond issue-specific South-South coalitions to North-South coalitions where it is in their and the global interest (e.g., the push for international financial institution reform, for EU for consolidation, for the completion of the Doha Round, etc.). There are hopeful signs that this is beginning to happen. South Korea’s leadership of next year’s G-20 represents a critical test of whether the new powers are ready to participate and conduct a G-20 forum at the leaders’ level, not only ministerial.

Finally, there is the challenge of how to include the “excluded.” The G-20 is much more inclusive than the G8, but it still leaves out a majority of countries with a third of the world’s population. Options for associating the rest of the world with the summit include ad hoc outreach (as the G8 has done), expanding regional representation (as already practiced with the EU), introducing a constituency approach (as for the IFIs) and seeking a closer alignment with the UN (perhaps through an Economic Security Council). With the exception of the first two—which risk further expanding the number of participants at G-20 summits—none of the other options are likely to materialize soon. However, G-20 leaders will have to be sensitive to the needs of the “excluded” and ensure that the interests of the poorest countries are not neglected.

Conclusion

Great changes in the economic and political balance among countries, global threats and an antiquated global governance system confront the world community today. With the economic crisis as an immediate driver and a new U.S. president, the G-20 summit format has the potential to make a real shift in the global economic order in which a new set of values underpin the way countries and people cooperate across borders. To the extent that President Obama has articulated his vision of the global order and America’s role in it, we believe he is headed in the direction that stresses common interests in a global society, the need for multilateral action and understanding for alternative approaches to economic and political development. This is very promising. The effectiveness of the G-20 in addressing the global economic crisis could lay the foundation for a new global order and provide the impetus for the many other necessary global governance reforms.

However, Europe, China and India are also critical for progress. Moreover, if President Obama is believed to fail the test of competence at home or a major shock hits the United States, a reversal is possible in the U.S. In any case, significant changes in global governance will take time to transpire. We may well see a long period of transition with only gradual improvement in current institutions. In the meantime, pressures for increased regionalism, bilateral deals among the big players, geopolitical competition among power blocs and growing instability and threats from the “excluded” will undermine international cooperation and the whole idea of a global order.

The G-20 summit forum represents a great opportunity for world leaders to begin to put into action the principles of a new global order. It will allow them to address the immediate global financial and economic crisis in a collaborative spirit. And in due course the G-20 summit can also serve as a platform for addressing other pressing global issues, including trade, climate change, energy and food security, and reform of global institutions. To achieve such an outcome, President Obama and other world leaders need to demonstrate a clear vision and strong leadership at the G-20 Summit in Pittsburgh and beyond.

Downloads

• Download

      

Policy Brief #184

The Leahy-Smith America Invents Act (AIA) approved in September 2011 constitutes the most significant overhaul of the American patent system in decades. This policy brief examines some key patent law changes and studies mandated by the legislation, and provides recommendations for companies on successfully navigating the new landscape. [Editor's Note: the legislation was signed into law by President Obama on September 16, 2011.]

Perhaps most notably, the new law will move the United States away from a “first to invent” system and closer to the “first to file” approach used in much of the rest of the world. Other important changes include a new proceeding in the U .S. Patent and Trademark Office (PTO) for third-party challenges to the validity of a recently issued patent, an expanded mechanism for a third party to provide information to the PTO that could be used to narrow or eliminate claims in a pending patent application being prosecuted by a commercial rival, and the introduction of a new, broadly applicable patent infringement defense based on prior commercial use.

	RECOMMENDATIONS
	Under the “first to file” provision of the AIA, companies should be more careful when producing pre-filing disclosures for venues such as conferences and trade shows, with the understanding that under the AIA those disclosures may play a much larger role than in the past with respect to patentability of the associated IP.   Under the AIA, rights to an invention prior to a filing date will depend more on the history of relevant disclosures and less on nonpublic, internal company documents such as laboratory notebooks. All companies—large and small—should consider how to modify their procedures for protecting, evaluating, and filing patents on their inventions accordingly.   The AIA provides a grace period during which inventors can disclose their invention without losing the right to patent it, but leaves uncertainty regarding the definition of “disclosure”. Companies should carefully monitor case law and PTO actions that will undoubtedly help clarify this issue in the coming years.   Companies should reevaluate the extent and manner to which they use provisional patent applications to preserve IP rights.   In light of the increased number of mechanisms available to challenge the validity of pending and issued patents, companies engaged in patent prosecution should reconsider the tradeoffs of performing their own thorough prior art searches during patent prosecution. By finding and disclosing relevant prior art to the PTO, companies may reduce the likelihood that the disclosed prior art will be used successfully against them in future validity challenges.

In addition, there are several other aspects of the AIA that do not change patent law, but may have far reaching consequences. For example, an AIA mandated study by the Government Accountability Office promises to furnish vitally important information on the economic impact of patent litigation by non-practicing entities, and will almost certainly influence future patent legislation. Under the AIA, the hurdles small businesses face in protecting their patents internationally will also receive attention through a PTO study.

It will take many years to develop a mature body of case law and legal scholarship on the full impact of the AIA. What is clear today is that it will profoundly impact the ways that patents are filed, prosecuted, and litigated in the coming years. Companies and other entities that retool their patent strategies to address these changes will be in a much stronger position to maximize the value of their intellectual property (IP) portfolios.

First Inventor to File

One of the most significant components of the AIA concerns the move from a first to invent system to a first to file system. Under this provision, which takes effect 18 months after the AIA is enacted into law, an inventor may win the race to create the invention but lose the race to file the corresponding patent application, and thus lose the right to patent the invention.

However, the AIA includes an important exception in the form of a grace period allowing an inventor or others who obtained information from the inventor to make disclosures regarding the invention in advance of filing a patent application, as long as the application is filed within one year after the first disclosure. Some form of grace period has been a feature of the U.S. patent landscape since the 19th century, and allows an inventor time to examine the commercial practicability of the invention, engage in discussions with potential partners and customers and secure the resources necessary to draft a patent application.

The inclusion of both first to file language and a grace period in the new patent law creates what could amount to a hybrid between first to invent and first to file. For example, in the case of two inventors who independently disclose the same invention immediately following its conception, both the pre-AIA “first to invent” law and the post- AIA “first to file” law can favor the earlier discloser, who is by definition the earlier inventor if the disclosure is truly immediate. However, in the absence of disclosure in advance of a patent filing, pre-AIA law favors the earlier inventor, while the AIA “first to file” provision will favor the earlier filer.

As a result, under the AIA inventors and the companies that employ them must think much more carefully about how to manage pre-filing disclosures. Put simply, silence can be costly. To the extent that a company remains quiet about an invention while contemplating whether or not to pursue patent protection, it stands exposed to the possibility of losing the right to do so if a competitor files first. A company wishing to avoid this risk faces the additional challenge that the AIA does not specifically define what constitutes “disclosure” sufficient to preserve patentability. The use of provisional patent applications, which offer advantages including a more formalized way to document the dates and content of disclosures than activities such as presentations at trade shows, should also be reevaluated in light of the AIA.

Some companies may find themselves targeted by competitors’ disclosures engineered specifically to foreclose patent opportunities. To reduce vulnerability to such attacks, companies can engage in preemptive “defensive” disclosures, but must be mindful of the impacts of these disclosures on their own patent filing deadlines.

In addition, employees engaged in intellectual property creation can be made aware that there is an increased need to pursue timely steps to secure patent protection on new inventions. Internal company systems for documenting, reporting, and rewarding innovations can be modified to better match the provisions of the AIA. Companies should also consider the budgetary impact of the AIA in terms of the amount and timing of expenditures.

It is important to recognize that the AIA leaves substantial differences between the patent laws in the United States and those in other countries. For example, unlike in the United States both pre- and post-AIA, in Europe an inventor’s own public disclosures in the year prior to a patent filing can be invalidating prior art. To the extent that for financial or other reasons a company needs to defer filing a U.S. patent application to a future date, in one sense the systems have actually moved farther apart. This is due to what amounts to a newly incentivized option to buy some measure of protection in the U.S. by disclosing in advance of a filing at the cost of losing patentability in Europe. This requires careful consideration of disclosure plans.

Best Mode and Invalidity

The AIA does not alter the requirement that a patent application must “set forth the best mode contemplated by the inventor of carrying out” the invention. However, somewhat paradoxically, for proceedings commenced on or after the date of its enactment, the AIA eliminates the alleged failure to follow this requirement as grounds for asserting invalidity.

This change has the potential to alter a fundamental compact between an inventor and the government that is at the core of the patent system, which grants a patent holder the right to exclude others from practicing an invention in exchange for disclosing the best mode contemplated by the inventor. The AIA eliminates the failure to make this disclosure as grounds for asserting invalidity. Some inventors may view this as creating an incentive to intentionally withhold information on how to best carry out an invention.

Supplemental Examination

The AIA creates a new supplemental examination procedure, effective one year after enactment, allowing a patent owner to request that the PTO perform a supplemental examination to “consider, reconsider, or correct information believed to be relevant” to a patent. Subject to certain exceptions, this process can prevent a patent from being “held unenforceable on the basis of conduct” relating to this information.

The supplemental examination provision is particularly relevant to inequitable conduct allegations that are frequently raised by defendants in patent litigation. Defendants often try to identify information relating to the prosecution of patents that have been asserted against them that, in their view, indicates inequitable conduct rendering the patents unenforceable. Supplemental examination provides a way for a patent owner to preemptively attempt to inoculate a patent against such allegations.

Pre-Issuance Submissions

Beginning one year after the AIA is enacted, third parties will have the option of providing pre-issuance submissions of prior art accompanied by “a concise description of the asserted relevance of each submitted document” to the PTO in connection with a pending application. Such submissions can be used, for example, to attempt to prevent or hinder the issuance of a patent that the submitting party views as detrimental to its interests. However, to the extent that a patent examiner finds the arguments provided through a pre-issuance submission unconvincing, the resulting patent might actually be strengthened, not weakened.

Prior Commercial Use Defense to Infringement

Since 1999, alleged infringers of business method patents have had access to a “prior use” provision that can constitute a defense against infringement, provided certain conditions are met. For patents issued on or after the date of enactment of the AIA, the prior use defense can be applied, subject to certain exceptions, to patent infringement claims covering a much broader range of subject matter “consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process.”

Post-Grant Review Proceedings

Post-grant review proceedings are conducted through the PTO in order to reconsider alreadyissued patents, and can lead to the confirmation, cancellation, withdrawal, or modification of patent claims. T he phrase “post-grant review” is sometimes used to broadly refer to multiple types of post-grant proceedings including the ex parte and inter partes reexaminations available under pre- AIA patent law, and sometimes to more narrowly refer to a specific new review option created by the AIA (in fact, in the AIA itself the phrase is used in both the broad and narrow meanings).

Under pre-AIA patent law, a requester wishing to initiate an ex parte or inter partes reexamination provides the PTO with one or more published prior art references and an explanation why those references, in the view of the requester, raise a “substantial new question of patentability.” The PTO can either grant or deny the request; if the request is granted, an ex parte reexamination proceeds without any further input from the requester (unless the requester is the patent owner), while in an inter partes reexamination the requester participates during the reexamination process.

Both types of reexaminations have proven to be highly effective ways for third parties to challenge the validity of issued patent claims, often in tandem with or as a lower cost alternative to challenges adjudicated through the Federal court system and the International Trade Commission. According to data released by the PTO in June 2011, 92% of the requests for ex parte reexamination filed since the proceeding was introduced in the 1980s have been granted, and fewer than one quarter of patents subject to ex parte reexamination have emerged without any claim changes or cancellations. Inter partes reexamination was introduced in 1999; since then 95% of inter partes reexamination requests have been granted, and only 13% of patents subject to inter partes reexamination have survived with all claims confirmed.

The AIA leaves ex parte reexamination in place, but a year after enactment will replace inter partes reexaminations with “inter partes review” proceedings adjudicated by a newly renamed Patent Trial and Appeal Board within the PTO. The pre-AIA threshold to grant an inter partes reexamination of a “substantial new question of patentability” will be replaced with a higher threshold requiring that the PTO find a “reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition.” This higher standard will also be applied to inter partes reexaminations filed during the transition period immediately following enactment of the AIA and preceding the shift to inter partes review. Inter partes review requests must be filed no earlier than nine months (and in some cases longer) after the grant or reissue of the patent being challenged.

Additionally, the AIA creates a new “post-grant review” process through which a petitioner who is not the patent owner can request the cancellation as invalid of one or more claims of a patent granted or reissued within the previous nine months. The PTO can authorize a post-grant review if the information presented by the petitioner, “if not rebutted, would demonstrate that it is more likely than not that at least one of the claims challenged in the petition is unpatentable.” Under the AIA this threshold can be satisfied not only using traditional invalidity arguments based on settled law, but also by a petition that raises “a novel or unsettled legal question that is important to other patents or patent applications.” This language amounts to an invitation to address “novel or unsettled” legal questions through the PTO, raising a number of issues relating to respective roles the courts and the PTO will play in resolving them.

For companies engaged in or threatened with patent litigation or those that simply want to launch a pre-emptive strike at patents held by a competitor, post-grant review introduces a new way to challenge patents. The AIA contains estoppel and other provisions intended to prevent a requester from having two bites at the apple by challenging a claim in both a PTO post-grant (or inter partes) review and a civil action or International Trade Commission proceeding. However, in some circumstances these provisions may turn out to be largely toothless, since patent cases often involve multiple defendants who form joint defense groups and engage in coordinated attacks on patent validity. There is nothing in the AIA preventing one defendant from challenging claim validity through a post-grant or inter partes review and another from simultaneously or later asserting invalidity of the same claims in the federal court system or at the International Trade Commission.

The AIA also expressly provides that, starting one year after enactment, statements by a patent owner filed in a federal court or with the PTO regarding claim scope can be cited to the PTO for consideration in ex parte, inter partes, and post-grant review proceedings to determine claim meaning.

Other Provisions

In addition to codifying many changes to patent law, including those described above, the AIA contains other provisions that will likely have a significant impact on the operation of the PTO and on future patent legislation. Several of these provisions are discussed below.

Fee Diversion

One of the most controversial aspects of the patent reform debate has pertained to the practice of fee diversion, which arises because the PTO takes in an amount in fees that exceeds its appropriation. The Senate version (S. 23) of the AIA passed in March 2011 provided for the creation of a fund that would have allowed the PTO roll over excess funds into future fiscal years. However, in the House version (H.R. 1249) passed in June 2011 that became the template for the final legislation, this provision was removed and replaced with a newly established “Patent and Trademark Fee Reserve Fund” to be held in the treasury and into which excess fees will be deposited. This approach does not cleanly put the fee diversion issue to rest, and the details of how the reserve fund will be managed in future years remain unclear.

Studies Mandated by the AIA

The AIA mandates several studies, including one to be performed by the Government Accountability Office to examine the “consequences of litigation by non-practicing entities, or by patent assertion entities,” to gather data, among other things, on the volume of litigation, the number of cases found to be without merit, the costs to patent holders, licensees, licensors, and inventors, the economic impact of this litigation, and the “benefit to commerce, if any, supplied by non-practicing entities or patent assertion entities that prosecute such litigation.”

“Non-practicing entities” and “patent assertion entities” are terms that are sometimes used to describe companies that have little or no business other than the assertion of patents. Patent litigation involving these entities has grown significantly in recent years, in large part due to the potential for large judgments and settlements. The GAO study provides an opportunity for an unbiased examination of a significant aspect of the litigation environment, and is likely to produce information that will be valuable in drafting future patent legislation.

The AIA also mandates that the PTO perform a study on international patent protections for small businesses. T he financial burden of obtaining international patent protection is particularly heavy for small companies due to the combined costs of performing many different country-specific filings. As a result, many small companies either avoid foreign filings altogether, or perform foreign filings only for a small subset set of countries and only for the patents that they believe to be the most valuable. A goal of the AIA-mandated study is to determine whether to recommend establishing a loan or grant program to help small businesses defray the costs associated with international patent protection.

It is likely the study will conclude that such a program would be beneficial to small businesses, but it is just as likely that implementing it will prove to be extremely difficult in the current budgetary environment. However, the study may influence future patent legislation in the United States and abroad, and may be useful in multilateral discussions regarding international patent protection.

Conclusion

The AIA will reshape how United States patents are obtained, challenged, and valued in acquisition, licensing, and litigation settlement discussions. Companies that overhaul their intellectual property strategies in light of the provisions of the AIA will be in a better position to maximize the value of their patent portfolios and to strengthen their options in patent litigation matters.

Downloads

• Download Policy Brief

       

Executive Summary

Census 2000 confirms that despite scant population growth in the 1990s, Kansas City remains at the core of a robust regional economy.

Population in Kansas City has changed little over the last two decades, and the city has dropped from 27th largest in the U.S. to 36th largest. Most neighborhoods in the city and its close-in suburbs failed to grow or actually lost population in the 1990s. Meanwhile, population boomed in the rest of the metro area, growing by a third since 1980. Today, only a quarter of the region's residents resides in Kansas City. Only a doubling of the city's immigrant population in the last decade forestalled greater population decline.

And yet, despite the stagnation of their city's population, residents' economic condition remained healthy. A high proportion of adults in Kansas City work, and employment is diversified among several industries. The city has a strong middle class, with gains in both moderate-income and high-income households in the 1990s. Real median income grew during the decade. Compared to other Living Cities, Kansas City's poverty rates remain low, its homeownership rates remain high, and its rental housing remains affordable. Still, significant income and educational attainment gaps by race and ethnicity point to opportunities to build a stronger minority middle class in Kansas City in the coming decade.

Along these lines and others, then, Kansas City in Focus: A Profile from Census 2000 concludes that:

• Kansas City lies at the heart of a rapidly decentralizing region. Kansas City's population grew nominally (1.5 percent) in the 1990s, after declining in the 1980s. The city itself was divided, however, with most neighborhoods in the southern half stagnating or losing population, and most in the northern reaches of the city gaining. Elsewhere in the metro area, population boomed by 16 percent in the 1990s. Outer parts of Johnson County (KS) and Jackson County (MO) grew rapidly, as did population in all suburban counties. Only one in four metropolitan residents lives in Kansas City today.

• The city's population is growing more diverse. Like most Midwestern cities, Kansas City's population remains predominantly white and black. The city lost white population in the 1990s, but gained residents of other races and ethnicities. International immigrants have contributed to the changing profile of the city and region. The number of foreign-born living in Kansas City more than doubled in the 1990s, and more than twice as many settled in the suburbs over the same period. What is more, the city's immigrant population itself is quite diverse; Mexico is the most common country of birth, but half come from countries in Asia, Europe, and Africa.

• Some parts of the urban core are attracting new residents, but others contain aging populations. With a little over 37,000 members, the 25- to 29-year-old population represents Kansas City's largest age group. These younger residents help account for the city's relatively small household size, and the significant degree of household turnover in neighborhoods around the downtown and northern parts of the city. Many neighborhoods in the city and inner suburbs, meanwhile, house significant shares of elderly residents. The growing representation of seniors is also reflected in the city's two largest household categories, childless couples and people living alone. Reversing a decline in the number of younger married-couple families in the city could be critical to maintaining neighborhood vitality and fiscal stability.

• Increasing educational attainment and high levels of work contribute to the economic success of most Kansas City residents. Unlike the trend in many other U.S. cities, Kansas City's income distribution actually "evened out" in the 1990s. Median household income in Kansas City grew at about the national average, and the poverty rate declined. The healthy economic profile of city residents owes to several factors. While unemployment has risen since Census 2000 was conducted, Kansas City's rate remains below the average for large cities. Likewise, high school and college degree attainment among city workers rank above national averages. Workers are also employed in a diverse set of industries throughout the region. Yet racial differences cut against these trends. As elsewhere, blacks and Hispanics in Kansas City significantly lag whites on educational attainment, and those gaps contribute to large disparities in household incomes by race and ethnicity.

• Kansas City is a "homeowner city," but some groups are not sharing in the benefits. Among the 23 Living Cities, Kansas City ranks fifth on its homeownership rate, which rose to 58 percent in 2000. The homeownership gap between whites and minority groups widened in the 1990s, however. The black homeownership rate in Kansas City did not increase at all over the decade, and the rate for Hispanics fell. Rents remain relatively affordable, however, and Kansas City ranks last among the 23 Living Cities in the share of renters who face housing cost burdens. While affordability may dissuade some renters from moving into homeownership, it may also present a chance for the city's families to save for ownership opportunities.

By presenting the indicators on the following pages, Kansas City in Focus: A Profile from Census 2000 is intended to give readers a better sense of where Kansas City and its residents stand in relation to their peers, and how the 1990s shaped the city, its neighborhoods, and the entire Kansas City region. Living Cities and the Brookings Institution Center on Urban and Metropolitan Policy hope that this information will prompt a fruitful dialogue among city and community leaders about the direction Kansas City should take in the coming decade.

Kansas City Data Book Series 1
Kansas City Data Book Series 2

      

Event Information

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

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

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

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

Event Materials

• Agenda
• Presentation
• Biographies

       

For more than a decade, government assistance to Afghanistan, Iraq, and Pakistan (the so-called AIP countries) has dominated United States aid efforts. And as the examples below illustrate, American institutions and mindsets found it extraordinarily difficult to adjust to aid in unsafe places. Cameron Munter draws on his experience as the head of the Provincial Reconstruction Team (PRT) in Mosul, Iraq in 2006 and as ambassador of the United States to Pakistan in Islamabad in 2011, with a description of U.S. reconstruction and state-building from which we may find lessons to consider in the future.

In 2006, when he went to Mosul as the first leader of the first PRT, the American civilian and military authorities in Baghdad painfully learned that the post-conflict situation would not correct itself. The undergrowth of our own bureaucratic structure prevented us from gaining a sophisticated understanding of our surroundings. Members of the PRT came and left after a few months, without passing on their hard-obtained knowledge. Local authorities quickly realized that the PRT had neither the money nor the firepower of the brigade commanders. And most of all, the guiding principles in place were still the creation of a kind of constitutional framework where political leaders, police, courts, businesspeople, and citizens would have institutions familiar to Americans, institutions that would work as we knew how to make them work.

Munter arrived in Pakistan at a time of great hope for U.S.-Pakistani relations. In 2011, in a series of meetings with the U.S. deputy secretary of state for resources and the head of USAID, Kerry-Lugar-Berman priorities took center stage: education, energy efficiency, job creation, special projects in the tribal areas, and public health. It is one thing to define a task and quite another to apply it to the specific context of a country in which security considerations prevent most USAID workers from even laying eyes on their projects. Overall, it seems the United States was much better at measuring its commitment to a prosperous, democratic Pakistan at peace with its neighbors by counting how much it spent and how fast rather than creating the proper relationship with those on the ground with whom it might have partnered.

Under these circumstances, what are lessons learned? When security is shaky, assistance is difficult. It may be that in situations like the AIP countries, we only have the capacity to engage in humanitarian aid and immediate reconstruction. If that is so, then the whole question of engagement in dangerous places is reopened: In a military setting, with military tasks, and thus a military system of organization, can civilian assistance succeed? Money spent is the way we measure commitment in such a setting, and that doesn’t bring the results we need.

Downloads

• Imagining assistance: Tales from the American aid experience in Iraq in 2006 and Pakistan in 2011

      

Editor's note: This article is part of a series marking International Women's Day, on March 8, 2016. Read the latest from Global scholars on bridging the gender inequality gap, women’s well-being, and gender-sensitive policies in sub-Saharan Africa. 

This Tuesday, March 8, marks the first International Women’s Day since world leaders agreed last September to launch the Sustainable Development Goals (SDGs) for 2030. A more rounded conception of gender equality marks one of the SDGs’ most important improvements compared to their predecessor Millennium Development Goals (MDGs). Two SDG targets help to illustrate the broadening geopolitical recognition of the challenges. They also help to underscore how much progress is still required.

A new target: Eliminating child marriage

The inclusion of SDG target 5.3 adds one of the most important new priorities to the global policy agenda: to “eliminate all harmful practices, such as child, early and forced marriage, and female genital mutilation.” Until only a few years ago, the child marriage portion of this target had received only scant international attention. The driving force advancing the issue has been Girls Not Brides, a fast-gelling coalition that now includes more than 550 civil society organizations from over 70 countries. The initiative was first spearheaded by Mabel van Oranje, the dynamic international policy entrepreneur.

At a practical level, ending child marriage faces at least two major challenges. First, it is largescale. Every year, an estimated 15 million girls around the world are married before the age of 18. Second, it is highly complex. There are no simple solutions to addressing cultural practices with deep roots. Impressively, Girls Not Brides has already published a thoughtful theory of change to inform policy conversations, accompanied by a menu of recommended indicators for measuring progress. Regardless of whether this specific theory turns out to be correct, the coalition deserves significant credit for advancing public discussions toward practical action and outcomes. One can only hope that every constituency that lobbied for an SDG target presents similarly considered proposals soon. The advocates for ending child marriage have already registered some early gains. In 2015, four countries raised the age of marriage to 18: Chad, Guatemala, Ireland, and Malawi.

A renewed target: Protecting mothers’ lives

The SDGs are also carrying forward the previous MDG priority of maternal health. Target 3.1 aims as follows: “By 2030, reduce the global maternal mortality ratio to less than 70 per 100,000 live births.” Formally this falls under Goal 3 for health and wellbeing, but it certainly represents a gender equality objective too. Part of that is by definition; mothers are female. Part of it is driven by the need to overcome gender bias; male decision-makers at all levels might overlook key health issues with which they have no direct personal experience.

As of the early 2000s, maternal mortality was too often considered a topic only for specialist discussions. One of the MDG movement’s most important contributions was to elevate the issue to the center stage of global policy. For example, former Canadian Prime Minister Stephen Harper made it a centerpiece among his own foreign policy priorities, including at the G-8 Muskoka summit he hosted in 2010.

Figure 1 shows an initial estimate of the gains across developing countries since 2000, as measured by maternal mortality ratios (MMR). The solid line indicates the actual rate of progress. The dotted lines indicate how things would have looked if previous pre-MDG trends had continued as of 1990-2000 and 1996-2001, respectively. (This is the same basic counterfactual methodology I have previously used for child mortality trends here and here, noting that maternal mortality data remain considerably less precise and subject to ongoing updates in estimation.)

The graph shows that developing countries’ average MMR dropped from approximately 424 deaths per 100,000 live births in 1990, down to 364 in 2000, and further to 233 in 2015. That works out to a 36 percent decline over the past 15 years alone, driven by acceleration in progress during the mid-2000s. Importantly, the value in 2015 was also at least 12 percent lower than it would have been under pre-MDG rates of progress—287 under 1990-2000 trends and 266 under 1996-2001 trends.

Figure 1: Developing country progress on maternal mortality, 1990-2015

A long road ahead

Whereas the MDGs focused on developing countries, the SDGs apply universally to all countries. In that spirit, and slightly different from the previous graph, Figure 2 shows an estimate of the current global MMR trajectory for 2030, extrapolating the rates of progress from 2005 to 2015. Drawing from available data for 174 countries with a current population of 200,000 or more, the world’s MMR is on course to drop from approximately 216 in 2015 to 163 in 2030. This would mark a 25 percent improvement, but falls far short of the global MMR target of 70. (These calculations follow a similar methodology to my assessment last year of under-5 mortality trajectories.)

Figure 2: Global maternal mortality - current trajectory to 2030

The mothers of nations

Although the SDG for maternal mortality is set at a global level (unlike the country-level target 3.2 for child mortality), it is worth assessing how many individual countries are trailing the MMR benchmark of 70. The geographic nature of the global challenge is underscored in Figure 3. It lists the number of countries with MMR above 70 across the respective years 2000, 2015, and—on current trajectory—2030. As of 2000, 90 countries still had MMRs greater than 70. By 2015, this was down to 77 countries. By 2030, on current rates of progress, the relevant figure drops only slightly to 68 countries.

Most notably, the figure for sub-Saharan Africa remains unchanged between 2015 and 2030, at 44 countries, even though most of the region is already experiencing major mortality declines. Rwanda, for example, saw its MMR plummet from 1,020 in 2000 to 290 by 2015. It is on track to reach 106 by 2030. Meanwhile, Sierra Leone saw a decline from 2,650 in 2000 to 1,360 in 2015, on a path toward 768 in 2030. The challenge is not a lack of progress. Instead, it is simply that these countries have huge ground to cover to reach the ambitious goal. On current trajectory, 11 African countries are on course to have MMRs of 500 or greater in 2030.

Figure 3: Scoping progress on SDG 3.1

Number of countries with maternal mortality ratios > 70

Women and girls deserve more

Although these two targets for child marriage and maternal mortality embody only a small portion of the SDGs’ broader gender equality imperatives, they reflect crucial aspects of the overall challenge. On the positive side, they provide inspiration for the ways in which long-overlooked issues can rapidly gain political and policy traction. But they also underscore the scale of the task ahead. The global challenges of gender inequality—ranging from discrimination to violence against women to inequalities of opportunity—all require dramatic accelerations in progress. On this International Women’s Day, we all need to recommit to break from business as usual. Our mothers, sisters, daughters, and partners around the world all deserve nothing less. 

Note: The maternal mortality figures presented above have been updated subsequent to the original post in order to correct for a coding error discovered in the original country-weighting calculations for global trajectories.

      

       

       

       

“We are not buildings artists; we are buildings leaders in society.” 

These stirring words of Juliano Mer Khamis, the charismatic founder of The Freedom Theatre (TFT) in Jenin refugee camp in Palestine, are coming true, despite his assassination five years ago. 

Against all odds, The Freedom Theatre, a beacon of creativity, discipline, and vision located in the heart of Jenin refugee camp, recently celebrated its tenth anniversary. Known for its fierce fighters and its conservatism, Jenin refugee camp, where over 16,000 live on one square kilometer, increasingly is known as well for its art. 

Juliano Mer Khamis returned to Jenin during the second Intifada to find his mother’s Stone Theatre (Arna’s Children tells her story) reduced - like so much of the camp—to rubble by Israeli tanks, and many of his mother’s student actors killed. In 2005 he joined forces with Jonatan Stanczak, currently Managing Director of TFT and Zakaria Zbeidi, a “Stone Theatre child” turned head of the Al-Aqsa brigades in Jenin, who later renounced militancy for cultural resistance. Together they rebuilt a theater in the camp, which evolved into The Freedom Theatre. 

Mer Khamis urged his acting students to wage a cultural intifada, warning that the occupation of the mind was more dangerous than the occupation of the body. Unlike many charismatic leaders, Mer Khamis developed an institution, not a cult of personality (even though he was adored). Following Juliano’s untimely and unsolved murder in 2011 — he was shot sitting in his car just outside the theater, with his infant son in his lap - the devastated theater soldiered on, a living testament to the powerful impact of his teaching and vision.

“When Juliano died he gave us the strength to continue and he showed us the strength we had in ourselves, so we kept going,”

Ahmad Matahen, age 24, a typical “child of The Freedom Theatre”, explained to me. Matahen joined in 2006; first as an actor, then as Juliano encouraged him to discover and exploit his individual talents, he moved into technology, engineering and stage design. He now studies stage design in Bethlehem, with the support of TFT, where he hopes eventually to work.

What a different future than Matahen might have had, if Mer Khamis had not invited in this street youth who had mocked the theater, and expressed his anger and frustration by throwing rocks at Israeli tanks. Matahen described the common attitude in Jenin:

“When you go to the camp and ask people what they want, they say they want to die. They have no jobs, no hope.”

When asked what he missed most after Juliano’s death, Matahen said “hugs”, something no one besides Juliano gave him. As a teenager, Ahmad, like so many of his contemporaries, saw his friends killed by the invading/occupying Israelis. Considered against the backdrop of trauma that pervades the camp, hugs are no small thing. They form the foundation for the self-confidence and sense of purpose that Matahen has gained from The Freedom Theatre.

High school dropout Ameer Abu Alrob defied his family and left his village to live and work at The Freedom Theatre. He traveled to India last year with a TFT group that also included two female acting students, for a ground-breaking, three-month Palestinian-Indian collaboration and tour with Janam Theater. Ameer and half of the other Palestinian student actors had never previously traveled outside Palestine, much less flown in a plane.

Through his experiences Ameer is not only broadening the horizons of his family and village, but, importantly, also introducing them to their own history through The Freedom Theatre productions such as The Siege. (One of the reasons Ameer dropped out was that school taught him nothing about his own environment and history).

Performed to date in Palestine and Great Britain, The Siege brings to life on stage the incident in 2002 during the second Intifada when armed Palestinian fighters along with some two hundred Palestinian civilians escaped the onslaught of Israeli gunfire and tanks by taking refuge in Bethlehem’s renowned Church of the Nativity. The trapped Palestinians - without food, water, or medical supplies - struggled to remain “steadfast”. After thirty-nine days, they surrendered, responding to the plea of a young mother whose baby’s life was at risk because the siege prevented her taking the infant to the hospital.

This decision, which reflected the fighters’ firm belief that the goal of their struggle was to help the Palestinian people, cost the insurgents dearly. In a European-brokered deal, they were exiled immediately upon exiting the Church — some to Europe and some to Gaza — with no hope of return (even though the European exile was supposed to last one year).

Nabil Al-Raee, The Freedom Theatre’s artistic director, explained that he wanted to re-open this important incident to present the Palestinian side, absent in the media. “This is the first time that we speak about these freedom fighters and tell their stories.” One and a half years of research, with travel to Europe and skype conversations with Gaza to interview those in exile, including personal friends of Al-Raee’s, were distilled into a visually stunning and dramatically taut production.

“The lesson of The Siege was putting weapons down,” 

according to one of the actors, Faisal Abu Alhayjaa, referring to the essential humanity of the Palestinian fighters, who would not harm a sick child for the sake of their cause.

This powerful message apparently was lost on New York’s acclaimed Public Theater which cancelled the production scheduled for this May. This alarming trend of performances cancelled/censored (take your pick) for political reasons will be examined at a conference at Georgetown University this June, where Al-Raee will speak.

Undeterred, The Freedom Theatre and its resolute supporters currently are seeking other American venues for The Siege. While some may see Palestinians on stage with machine guns, others, including sold-out audiences during The Siege‘s recent British tour, see, in the words of the Guardian review, “an unexpectedly compelling theatrical experience with a rough and ready energy, and in the very act of its telling, speaks for the voiceless and forgotten”.

In the tinderbox that is Israel-Palestine, The Freedom Theatre defies its seemingly hopeless environment, and is making a tangible difference in Jenin camp and beyond. Another child of the Theatre, an actor in The Siege and in the forthcoming feature film The Idol, Ahmed Al Rokh, described the change.

“We can feel the difference in the camp. Our audience is growing because the kids who first came now have families, and bring them. Now they understand that the theatre works for us and with us.”

In contrast to the situation in the developed world, where art is often considered discretionary, Faisal Abu Alhayjaa described art and culture in Palestine as “essential like water and bread”. Inspiring as it is, The Freedom Theatre’s story is not unique. The Palestinian Performing Arts Network (PPAN) includes many ensembles and organizations striving for dignity and agency through art.

Abu Alhayjaa sees the education and empowerment that comes through working in the arts generally, and The Freedom Theatre specifically, as vital to Palestine’s future.

“If there will be a liberation for Palestine, it will come with a generation that knows what they want, and that knows to think critically.”

That generation is being trained at The Freedom Theatre.

This piece was originally published by The Huffington Post.

       

For the last several years, the US government has been negotiating a free-trade agreement known as the Trans-Pacific Partnership (TPP) with 11 other countries across the Asia-Pacific and Latin American regions, which could have major impact on the pharmaceutical market.  When finalized it will be the largest free-trade agreement in history, impacting up to one-third of world trade and roughly 40 percent of the global gross domestic product. The deal has attracted a fair share of criticism from a wide range of groups, including concerns over proposed regulations for biologic drugs in participating countries. Specifically, critics are concerned about the length of data exclusivity granted to the companies that hold the patents on these drugs. Below is a primer on biologics and how they are being addressed in the TPP.

---

What are biologics and biosimilars?

Biologic drugs include any therapy derived from a biological source; a group which includes vaccines, anti-toxins, proteins, and monoclonal antibodies. Because they are typically much larger and more structurally complex than traditional ‘small-molecule’ drugs, they are also more difficult—and much more costly—to develop and manufacture. Biologics are also among the most expensive drugs on the market, costing an average of 22 times more than nonbiologic drugs. Avastin, a cancer drug, can cost more than $50,000 a year, while the rheumatoid arthritis drug Remicade can cost up to $2,500 per injection.

Given these high costs, there is substantial interest in encouraging the development of biosimilars, a term used to describe follow-on versions of an original biologic. Estimates of the potential cost savings vary substantially, but some have predicted that competition from biosimilars could reduce US spending on biologics by $44 to $66 billion over the next ten years.  In the European Union, biosimilars have been on the market since 2006, and a 2013 analysis found that, for the 14 biosimilars on the market, the average price discount was about 25 percent. By 2020, the overall cost savings are projected to total $16-$43 billion.

After the Affordable Care Act (ACA) was passed in 2010, the US Food and Drug Administration (FDA) developed an accelerated approval pathway for biosimilars, modeled after the pathway used for the approval of small-molecule generics. In order to meet the criteria for biosimilarity, the drug must share the same mechanism of action for the approved condition of use, and there must be no clinically significant differences between the two drugs in terms of purity, safety, or potency. FDA recently approved its first biosimilar, Zarxio, which is a copy of the oncology drug Neupogen.

What issues are being raised over data exclusivity in the US?

Under current FDA regulations, biologic drugs are granted 12 years of data exclusivity following approval. During this period of exclusivity, the FDA may not approve a biosimilar application that relies on the data submitted as part of the original biologic application. This form of temporary monopoly is distinct from patent protection, which is granted well before approval and is not related to clinical data.  Data exclusivity does not prevent another company from generating the data independently, but drug companies are unlikely to go to the considerable (and costly) effort of replicating a full course of clinical trials for a drug that is already on the market. (Though biosimilars may need to undergo some additional clinical testing under current FDA regulations, the amount of data required to support approval would certainly be less than what is required for an original biologic approval.)

The 12-year exclusivity period for biologics was established in the ACA following intense debate, and has continued to attract criticism. (By contrast, the period of data exclusivity is just five years for small-molecule drugs.) Supporters argue that given the greater cost and difficulty of bringing a biologic to market a longer period of exclusivity is necessary to incentivize innovation. Others argue that the resulting restrictions on competition keep drug prices unnecessarily high, inevitably putting a strain on the health system and keeping potentially life-saving drugs out of reach for many patients.

How would the TPP affect data exclusivity?

For the 11 countries besides the U.S. that are involved in the TPP, current data exclusivity protections range from zero (Brunei) to eight years (Japan). Under the Obama Administration’s current proposal, participating countries would increase those periods to match the US standard of 12 years. Curiously, this proposal directly contradicts the administration’s ongoing domestic efforts to lower the period of data exclusivity. Since the ACA passed, the Obama administration has repeatedly proposed reducing it to seven, arguing that this would save Medicare $4.4 billion over the next decade. Some have noted that, once the 12-year period is enshrined in the TPP, it will become significantly more difficult to change it through the US legislative process. Furthermore, imposing US standards on the 11 member countries would inevitably restrict competition at the global level, and many patient advocacy and international humanitarian organizations have argued that doing so would undermine the efforts of US global health initiatives like the Vaccine Alliance and the Global Fund to Fight AIDS, Tuberculosis and Malaria, which rely on price competition to manage program costs.

It is unclear whether the US will be successful in its efforts. There have been reports that the issue of data exclusivity has become a significant point of contention, and the US delegation may seek to compromise on its demands. It may, for example, negotiate exceptions for the poorer countries involved in the negotiation, as the Washington Post notes. However, the details of the negotiations are largely confidential, which makes it challenging to assess the possibilities, their relative advantages, or how the US Trade Representative (which is leading the US negotiations) is balancing the need to ensure adequate incentives for innovation with the need to control drug costs and facilitate patient access to potentially life-saving therapies.

Editor's note: Elizabeth Richardson, a research associate in the Center for Health Policy, contributed to the research and writing of this post. 

       

INTRODUCTION

With fewer than three years until the planned end-date of the United Nations Millennium Development Goals (MDGs), attention is rapidly turning to what will follow. The elaboration of the next global development agenda is a complex, multi-pronged process that is academic, political and practical, involving experts from a myriad of social and economic sectors and representing a cross-section of constituencies. While the formal U.N. process is still in the early stages, the ongoing discourse (predominantly occurring in the global north, but not exclusively) has introduced several potential frameworks for this agenda. This paper describes the leading frameworks proposed for the post-2015 global development agenda and discusses how education and learning fit within each of those frameworks. While many within the education community are working to develop a cohesive movement to advance an “access plus learning” agenda, it remains equally important to engage proactively with the broader development community to ensure that education fits within the agreed upon overarching organizing framework.

The frameworks described below represent a snapshot of current thinking in 2012. On the road to 2015, the education community will need to refine and sharpen its thinking with respect to how learning is incorporated into the prevailing framework. The seven frameworks that will be addressed in this paper are:

1. Ending Absolute Poverty
2. Equity and Inclusion
3. Economic Growth and Jobs
4. Getting to Zero
5. Global Minimum Entitlements
6. Sustainable Development
7. Well-Being and Quality of Life

Downloads

• Download the full paper

       

During his presentation at the University of Michigan/Urban Land Institute Real Estate Forum, Christopher B. Leinberger discusses the impact walkable urbane places has and will have on metropolitan development patterns, the market reasons for this change and how to strategically manage it.

This video is no longer available

      

Introduction

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

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

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

Watch Interview

Downloads

• Download

      

The campaign for the 2016 Presidential nominations has shaken the political kaleidoscope, and the pieces are still moving. The populist surge of both Donald Trump and Bernie Sanders has torn the carefully crafted campaign strategies of other candidates into tatters. Populism is trumping realism. Political nostrums – like how Evangelical Christians or women will vote – are being challenged almost daily. The political establishment looks like the Wizard of Oz, with feeble powers inside giant machines.

There are, then, many losers in 2016. But perhaps the biggest loser of all is public policy. Policy used to matter quite a lot; the very term “policy platform” implied a solid structure, on which candidates would stand. Today, the strength of a candidate’s policy prescriptions and the strength of their political support seem unrelated. Or if there is a relationship, it is an inverse one. Trump provides the most vivid example of the sundering of policy from politics. But the policies of Sanders don’t come close to adding up either. Trump’s ideas are wacky – but Sanders’ are weak.

Trump’s proposals (when clear enough to be assessed) have been judged to be wholly impractical by every expert who is not certifiable. You cannot, in fact, force a sovereign nation to pay for a 2,000-mile, $20-billion wall you are building to keep their people out. You cannot enact a “total and complete shutdown of Muslims entering the U.S.” You cannot impose a 45 percent tariff on Chinese goods. You cannot cut taxes, ignore entitlements and wipe out the national debt. You cannot deport 11 million people. To be clear, I mean “cannot” here in the narrow, policy sense, rather than in legal or moral terms.

But cries of foul from the policy analysts have fallen on deaf ears. Each time Trump makes a ludicrous suggestion, these experts fill the airwaves with their reasoned arguments against it, Trump ignores them, and his poll ratings go up. Every time an establishment expert attacks one of his proposals, his anti-establishment credentials are burnished.

Meanwhile, the uber-wonk of the Republican field, Jeb Bush, became a piece of political marginalia. He produced some thoughtful and sensible policy ideas, on student financing, economic growth, health care, energy, school reform, and so on. Look where that got him.

Trump has grasped an important truth about politics in the digital age. Policy statements do not need to be serious proposals. They are merely ways to signal to the electorate what your instincts are, and what kinds of things you care about. It doesn’t matter if they don’t pass muster in the DC think-tank community. They are essentially a long list of the candidate’s likes and dislikes – politics in primary colors.

At his rallies, Trump announces his plan to build a wall on the southern border of the U.S., and asks: “And who’s gonna pay for it?” Then he holds out the mike to the crowd. They dutifully shout back: “Mexico!” It’s not true, and it can’t be true, but it doesn’t seem to matter. If Trump wins and appoints Ben Carson, the U.S. will have a Secretary for Education who has wondered aloud if Joseph built the pyramids.

Over on the Democrat side, Hillary Clinton, a wonk to match Bush, continues to fight a nervously close battle against a man who seems to design his policies on a blank sheet of paper, never allowing the facts on the ground to dilute the purity of his vision.

To be clear: I’m not saying that Sanders and Trump are equivalent. Trump plays on fear and loathing; Sanders indulges utopian idealism. But like Trump, the main purpose of Sanders’ policies is to signal a broad set of values, rather than chart a realistic way forward. Even the most progressive analysts of health care policy, like my Brookings colleague Henry Aaron, consider the Sanders plan for a single-payer health care system to be a pipe dream. As Aaron writes: “We know that single-payer mechanisms work in some countries. But those systems evolved over decades, based on gradual and incremental change from what existed before. That is the way that public policy is made in democracies.” Indeed. But not the way public policy is being made on the campaign trail.

Likewise, Sanders’ fiscal policies simply do not stack up, even if he can make the economy grow like it’s the ‘60s (the 1860s, that is). But don’t take my word for it: ask ultra-liberal economist Paul Krugman. Or indeed the four Democrat former chairs of the president’s Council of Economic Advisers who jointly wrote to warn of the fuzzy math at the heart of Sanders’ tax and spending plans. Sanders is playing fantasy fiscal policy.

But just as the unhinged ideas from Trump are doing nothing to dampen his fans, so the unrealistic ones from Sanders are not putting off his core supporters. And just as the scorn of the establishment helps Trump, so the attacks from experts on the mainstream left on Sanders’ ideas bolster his image as a revolutionary idealist, refusing to accept the status quo.

We should be honest: it is only in exceptional circumstances that policy is likely to be the central ingredient of politics. The personality, vision and message of the candidate, and the efficiency of a political operation, are typically more important. We should also be honest that the aspirational nature of campaign pledges very often puts them well beyond reasonable reach. Remember Hoover’s “chicken in every pot and a car in every garage?” Presidents can’t make that kind of change happen.

But even if policies declared on the campaign trail have often been a stretch, they have at least been a stretch in the right direction. Even if they were aspirational, they were not bonkers. The capacity to propose sensible policy has historically been a necessary test of political candidates, with scholars and serious journalists acting as examiners. Good policy may not often win you an election, but really bad policy could lose one. Now, in a fragmented media market, this basic test of policy seriousness may no longer disqualify a candidate.

Most successful Presidential candidates have, once in office, attempted to follow through on most (75% according to one study) of their campaign promises. Obama tried for 80%, according to Politifact. But many of those being made this year cannot be taken seriously, even perhaps by the candidates themselves. They are positioning devices, rather than proposals.

For a scholar working in a public policy think-tank, these are of course disheartening trends. What use is there for policy analysis when it seems as if politicians barely need policies at all? But there are deeper dangers here. If policy and politics separate entirely, the people who end up in office are likely to have little regard for policies, or even the skills required to make them. This will reduce the chances that policies will be implemented successfully, or that they will be effective, and therefore make them even less relevant to an electorate already concerned that our governance system is broken. Worse, the careless disregard for facts, laws, costs, and even basic math is corrosive to the democratic process. It is too much, perhaps, to expect politicians to seek to make voters better informed about the key issues. But I think it is reasonable to hope they will not misinform them.

I hope that I am wrong. I hope that policy will make a political comeback. But I’m not holding my breath.

---

Editor's note: This piece originally appeared in Bloomberg Government.

       

In the U.S., the older and younger generations look very different. While older Americans are predominantly white, young Americans, like millennials, have more varied racial backgrounds. These demographic chasms have political implications: white, older Americans tend to favor conservative politics and have overwhelmingly voted for Republican candidates in past elections; younger Americans, regardless of racial identity, tend to lean left and support broadening social support programs.

In a podcast segment, I explore how these racial and political divides between generations will, no doubt, impact this year’s presidential election and races in the future.

Listen to the full podcast here:

       

       

       

Editor's Note: In an interview with La Repubblica's Rosalba Castelletti, Jonathan Laurence discussed the significance of the revelations that the United States has continued to spy on Germany, and what they mean for the future of the transatlantic relationship.

"È un momento delicato, ma non penso che la Germania abbia interesse ad esagerare le tensioni con gli Stati Uniti". A sostenerlo è Jonathan Laurence, professore di Scienze politiche al Boston College ed esperto di Relazioni transatlantiche presso il think tank Brookings Institution di Washington.

Professor Laurence, quest'episodio come inciderà sulle relazioni tra i due Paesi?

"La situazione è tesa. Berlino stavolta non ha espresso solo la consueta indignazione, ma ha compiuto un atto formale con l'espulsione del capo dei servizi segreti, perché è la terza volta che il popolo tedesco apprende di essere spiato dagli americani. La prima volta è successo con il Datagate, la seconda con l'intercettazione del cellulare della cancelliera e ora con due spie tedesche al soldo degli americani".

In cosa differisce quest'ultimo caso dai precedenti?

"Non si tratta di programmi d'alta tecnologia, ma di spionaggio più "vecchia maniera": documenti in cambio di soldi. Stavolta poi non c'è in ballo un problema di sicurezza internazionale. È un nuovo colpo per la reputazione Usa perché ancora una volta si dimostra indifferente alla sensibilità europea riguardo alla raccolta di dati".

E i tedeschi sono forse i più sensibili, visto che hanno sperimentato lo spionaggio della Gestapo e della Stasi...

"Di fatti. L'attuale cancelliera ha fatto il suo debutto in politica proprio dopo il crollo della Stasi. Ecco perché dobbiamo aspettarci che la Germania dichiari a gran voce la sua collera".

Cosa può fare l'amministrazione Usa per riparare?

"Qualcosa di più che cercare infruttuosi colloqui bilaterali o accordi di non spionaggio reciproco. La Germania non è ingenua, sa che i servizi americani hanno bisogno di operare soprattutto dopo il 2001, ma vuole che si lavori insieme. Non credo però che cerchi il conflitto. Berlino e Washington hanno bisogno l'una dell'altra sia sulle sanzioni contro la Russia in merito alla crisi Ucraina sia sull'accordo di libero scambio".

      

The 2015 Brookings Financial and Digital Inclusion Project (FDIP) Report and Scorecard evaluates access to and usage of affordable financial services across 21 geographically and economically diverse countries.

The FDIP Report and Scorecard seek to answer a set of fundamental questions about today’s global financial inclusion efforts, including: 1) Do country commitments make a difference in progress toward financial inclusion?; 2) To what extent do mobile and other digital technologies advance financial inclusion?; and 3) What legal, policy, and regulatory approaches promote financial inclusion?

John D. Villasenor, Darrell M. West, and Robin J. Lewis analyzed the financial inclusion landscape in Afghanistan, Bangladesh, Brazil, Chile, Colombia, Ethiopia, India, Indonesia, Kenya, Malawi, Mexico, Nigeria, Pakistan, Peru, the Philippines, Rwanda, South Africa, Tanzania, Turkey, Uganda, and Zambia. Countries received scores and rankings based on 33 indicators spanning four dimensions: country commitment, mobile capacity, regulatory environment, and adoption.

The authors’ analysis also provides several takeaways about how to best expand financial inclusion across the world:

• Country commitment is fundamental.
• The movement toward digital financial services will accelerate financial inclusion.
• Geography generally matters less than policy, legal, and regulatory changes, although some regional trends in terms of financial services provision are evident.
• Central banks, ministries of finance, ministries of communications, banks, nonbank financial providers, and mobile network operators play major roles in achieving greater financial inclusion.
• Full financial inclusion cannot be achieved without addressing the financial inclusion gender gap.

This year’s Report and Scorecard is the first of a series of annual reports examining financial inclusion activities around the world.

View the full report and a full compendium of the country rankings here.

Downloads

• Download the report

      

Editor’s note: This post is part of a series on the Brookings Financial and Digital Inclusion Project, which aims to measure access to and usage of financial services among individuals who have historically been disproportionately excluded from the formal financial system. To read the first annual FDIP report, learn more about the methodology, and watch the 2015 launch event, visit the 2015 Report and Scorecard webpage.

Convenient access to banking infrastructure is something many people around the world take for granted. Yet while the number of people outside the formal financial system has substantially decreased in recent years, 2 billion adults still do not have an account with a formal financial institution or mobile money provider.¹

This means that significant opportunities remain to provide access to and promote use of affordable financial services that can help people manage their financial lives more safely and efficiently.

To learn more about how countries can facilitate greater financial inclusion among underserved groups, the Brookings Financial and Digital Inclusion Project (FDIP) sought to answer the following questions: (1) Do country commitments make a difference in progress toward financial inclusion?; (2) To what extent do mobile and other digital technologies advance financial inclusion; and (3) What legal, policy, and regulatory approaches promote financial inclusion?

To address these questions, the FDIP team assessed 33 indicators of financial inclusion across 21 economically, geographically, and politically diverse countries that have all made recent commitments to advancing financial inclusion. Indicators fell within four key dimensions of financial inclusion: country commitment, mobile capacity, regulatory commitment, and adoption of selected traditional and digital financial services.

In an effort to obtain the most accurate and up-to-date understanding of the financial inclusion landscape possible, the FDIP team engaged with a wide range of experts — including financial inclusion authorities in the FDIP focus countries — and also consulted international non-governmental organization publications, government documents, news sources, and supply and demand-side data sets.

Our research led to 5 overarching findings.

1. Country commitments matter.

   Not only did our 21 focus countries make commitments toward financial inclusion, but countries generally took these commitments seriously and made progress toward their goals. For example, the top five countries within the scorecard each completed at least one of their national-level financial inclusion targets. While correlation does not necessarily equal causation, our research supports findings by other financial inclusion experts that national-level country commitments are associated with greater financial inclusion progress. For example, the World Bank has noted that countries with national financial inclusion strategies have twice the average increase in the number of account holders as countries that do not have these strategies in place.

2. The movement toward digital financial services will accelerate financial inclusion.

   Digital financial services can provide customers with greater security, privacy, and convenience than transacting via traditional “brick-and-mortar” banks. We predict that digital financial services such as mobile money will become increasingly prevalent across demographics, particularly as user-friendly smartphones become cheaper² and more widespread.³

   Mobile money has already driven financial inclusion, particularly in countries where traditional banking infrastructure is limited. For example, mobile money offerings in Kenya (particularly the widely popular M-Pesa service) are credited with advancing financial inclusion: The Global Financial Inclusion (Global Findex) database found that the percentage of adults with a formal account in Kenya increased from about 42 percent in 2011 to about 75 percent in 2014, with around 58 percent of adults in Kenya having used mobile money within the preceding 12 months as of 2014.

3. Geography generally matters less than policy, legal, and regulatory changes, although some regional trends in terms of financial services provision are evident.

   Regional trends include the widespread use of banking agents (sometimes known as correspondents)⁴ in Latin America, in which retail outlets and other third parties are able to offer some financial services on behalf of banks,⁵ and the prevalence of mobile money in sub-Saharan Africa. However, these regional trends aren’t absolute: For example, post office branches have served as popular financial access points in South Africa,⁶ and the GSMA’s “2014 State of the Industry” report found that the highest growth in the number of mobile money accounts between December 2013 and December 2014 was in Latin America. Overall, we found high-performing countries across multiple regions and using multiple approaches, demonstrating that there are diverse pathways to achieving greater financial inclusion.

4. Central banks, ministries of finance, ministries of communications, banks, non-bank financial providers, and mobile network operators have major roles in achieving greater financial inclusion. These entities should closely coordinate with respect to policy, regulatory, and technological advances.

   With the roles of public and private sector entities within the financial sector becoming increasingly intertwined, coordination across sectors is critical to developing coherent and effective policies. Countries that performed strongly on the country commitment and regulatory environment components of the FDIP Scorecard generally demonstrated close coordination among public and private sector entities that informed the emergence of an enabling regulatory framework. For example, Tanzania’s National Financial Inclusion Framework⁷ promotes competition and innovation within the financial services sector by reflecting both public and private sector voices.⁸

5. Full financial inclusion cannot be achieved without addressing the financial inclusion gender gap and accounting for diverse cultural contexts with respect to financial services.

   Persistent gender disparities in terms of access to and usage of formal financial services must be addressed in order to achieve financial inclusion. For example, Middle Eastern countries such as Afghanistan and Pakistan have demonstrated a significant gap in formal account ownership between men and women. Guardianship and inheritance laws concerning account opening and property ownership present cultural and legal barriers that contribute to this gender gap.⁹

   Understanding diverse cultural contexts is also critical to advancing financial inclusion sustainably. In the Philippines, non-bank financial service providers such as pawn shops are popular venues for accessing financial services.¹⁰ Leveraging these providers as agents can therefore be a useful way to harness trust in these systems to increase financial inclusion.

To dive deeper into the report’s findings and compare country rankings, visit the FDIP interactive. We also welcome feedback about the 2015 Report and Scorecard at FDIPComments@brookings.edu.

---

¹ Asli Demirguc-Kunt, Leora Klapper, Dorothe Singer, and Peter Van Oudheusden, “The Global Findex Database 2014: Measuring Financial Inclusion around the World,” World Bank Policy Research Working Paper 7255, April 2015, VI, http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/04/15/090224b082dca3aa/1_0/Rendered/PDF/The0Global0Fin0ion0around0the0world.pdf#page=3.

² Claire Scharwatt, Arunjay Katakam, Jennifer Frydrych, Alix Murphy, and Nika Naghavi, “2014 State of the Industry: Mobile Financial Services for the Unbanked,” GSMA, 2015, p. 24, http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2015/03/SOTIR_2014.pdf.

³ GSMA Intelligence, “The Mobile Economy 2015,” 2015, pgs. 13-14, http://www.gsmamobileeconomy.com/GSMA_Global_Mobile_Economy_Report_2015.pdf.

⁴ Caitlin Sanford, “Do agents improve financial inclusion? Evidence from a national survey in Brazil,” Bankable Frontier Associates, November 2013, pg. 1, http://bankablefrontier.com/wp-content/uploads/documents/BFA-Focus-Note-Do-agents-improve-financial-inclusion-Brazil.pdf.

⁵ Alliance for Financial Inclusion, “Discussion paper: Agent banking in Latin America,” 2012, pg. 3, http://www.afi-global.org/sites/default/files/discussion_paper_-_agent_banking_latin_america.pdf.

⁶ The National Treasury, South Africa and the AFI Financial Inclusion Data Working Group, “The Use of Financial Inclusion Data Country Case Study: South Africa – The Mzansi Story and Beyond,” January 2014, http://www.afi-global.org/sites/default/files/publications/the_use_of_financial_inclusion_data_country_case_study_south_africa.pdf.

⁷ Tanzania National Council for Financial Inclusion, “National Financial Inclusion Framework: A Public-Private Stakeholders’ Initiative (2014-2016),” 2013, pgs. 19-22, http://www.afi-global.org/sites/default/files/publications/tanzania-national-financial-inclusion-framework-2014-2016.pdf.

⁸ Simone di Castri and Lara Gidvani, “Enabling Mobile Money Policies in Tanzania,” GSMA, February 2014, http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/03/Tanzania-Enabling-Mobile-Money-Policies.pdf.

⁹ Mayada El-Zoghbi, “Mind the Gap: women and Access to Finance,” Consultative Group to Assist the Poor, 13 May 2015, http://www.cgap.org/blog/mind-gap-women-and-access-finance.

¹⁰ Xavier Martin and Amarnath Samarapally, “The Philippines: Marshalling Data, Policy, and a Diverse Industry for Financial Inclusion,” FINclusion Lab by MIX, June 2014, http://finclusionlab.org/blog/philippines-marshalling-data-policy-and-diverse-industry-financial-inclusion.

       

Editor’s Note: The Center for Technology Innovation released the 2015 Financial and Digital Inclusion Project (FDIP) Report on August 26^th. TechTank has previously covered the FDIP launch event and outlined the report’s overall findings. Over the next two months, TechTank will take a closer look at the report’s findings by country and by region, beginning with today’s post on India. 

With about 21 percent of the world’s entire unbanked adult population residing in India as of 2014, the country has tremendous opportunities for growth in terms of advancing access to and use of formal financial services.

In the 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard, we detail the progress achieved and possibilities remaining for India’s financial services ecosystem as it moves from a heavy reliance on cash to an array of traditional and digital financial services offered by diverse financial providers.

As noted in the 2015 FDIP Report, government-led initiatives to promote financial inclusion have advanced access to financial services in India. Ownership of formal financial institution and mobile money accounts among adults in India increased about 18 percentage points between 2011 and 2014. Recent regulatory changes and public and private sector initiatives are expected to further promote use of these services.

In this post, we unpack the four components of the 2015 FDIP Scorecard — country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services — to highlight India’s achievements and possible next steps toward greater financial inclusion.

Country commitment: An unprecedented year with no sign of slowing

India’s national-level commitment to promoting financial inclusion earned it a “country commitment” score of 100 percent. A historic government initiative helped India garner a top score: In August 2014, Prime Minister Narendra Modi launched the “Pradhan Mantri Jan-Dhan Yojana,” the Prime Minister’s People’s Wealth Scheme (PMJDY). This effort — arguably the largest financial inclusion initiative in the world — “envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension facility,” in addition to providing beneficiaries with an RuPay debit card.

As part of this effort, the program aimed to provide 75 million unbanked adults in India with accounts by late January 2015. As of September 2015, about 180 million accounts had been opened; about 44 percent of these accounts did not carry a balance, down from about 76 percent in September 2014.

The PMJDY initiative is a component of the JAM Trinity, or “Jan-Dhan, Aadhaar and Mobile.” Under this approach, government transfers (also known as Direct Benefit Transfers, or DBT) will be channeled through bank accounts provided under Jan-Dhan, Aadhaar identification numbers or biometric IDs, and mobile phone numbers.

The Pratyaksh Hanstantrit Labh (PaHaL) program is a major DBT initiative in which subsidies for liquefied petroleum gas can be linked to an Aadhaar number that is connected to a bank account or the consumer’s bank details. As of July 2015, about $2 billion had been channeled to beneficiaries in 130 million households across the country.

Mobile capacity: Ample opportunity for digital services, but limited awareness and use

India received 16^th place (out of the 21 countries considered) in the 2015 FDIP Report and Scorecard’s mobile capacity ranking. India’s mobile money landscape features an extensive array of services, and the licensing of new payments banks (discussed below) may drive the entry of new players and products that can improve low levels of awareness and adoption of digital financial services.

An InterMedia survey conducted from September to December 2014 found that while 86 percent of adults owned or could borrow a mobile phone, only about 13 percent of adults were aware of mobile money. Awareness of mobile money is increasing — the 13 percent figure is double that of the first wave of the survey, which concluded in January 2014 — but uptake remains low. The Global Financial Inclusion (Global Findex) database found only 2 percent of adults in India had a mobile money account in 2014.

Implementing interoperability across mobile money offerings, increasing 3G network coverage by population, and enhancing unique mobile subscribership could boost India’s mobile capacity score in future editions of the FDIP report.

Regulatory environment: Opening up the playing field to non-bank entities

India tied for 7^th place on the regulatory environment component of the 2015 Scorecard. The country’s recent shift to a more open financial landscape contributed to its strong score, although more time is needed to see how recent regulations will be operationalized.

India has traditionally maintained tight restrictions with respect to which entities are involved in financial service provision. Non-banks could manage an agent network on behalf of a bank as business correspondents or issue “semi-closed” wallets that did not permit customers to withdraw funds without transferring them to a full-service bank account. These restrictions likely contributed to the country’s slow and limited adoption of mobile money services.

However, 2014 brought significant changes to India’s regulatory landscape. The Reserve Bank of India’s November 2014 Payments Banks guidelines were heralded as a major step forward for increasing diversity in the financial services ecosystem. These guidelines marked a significant shift from India’s “bank-led” approach by providing opportunities for non-banks such as mobile network operators to leverage their distribution expertise to advance financial access and use among underserved groups.

While these institutions cannot offer credit, they can distribute credit on behalf of a financial services provider. They may also distribute insurance and pension products, in addition to offering interest-bearing deposit accounts.

We noted in the 2015 FDIP Report that timely approval of license applications for prospective payments banks, particularly mobile network operators, would be a valuable next step for India’s financial inclusion path. In August 2015, the Reserve Bank of India approved 11 applicants, including five mobile network operators, to launch payments banks within the next 18 months. As noted in Quartz India, the “underlying objective is to use these new banks to push for greater financial inclusion.” India has also made strides in terms of establishing proportionate “know-your-customer” requirements for financial entities, including payments banks.

While India has made significant progress in terms of promoting a more enabling regulatory environment, room for improvement remains. For example, concerns have been raised regarding the low commission rate for banks distributing DBT, with many experts noting that a higher commission would enhance the ability of these banks to operate sustainably.

Adoption: Access is improving, but promoting use is key

India ranked 9^th for the adoption component of the 2015 Scorecard. Recent studies have demonstrated that adoption of formal financial services among traditionally underserved groups is improving. For example, InterMedia surveys conducted in October 2013 to January 2014 and September to December 2014 found that the most significant increase in bank account ownership was among women, particularly women living below the poverty line. Still, further work is needed to close the gender gap in account ownership.

As noted above, adoption of digital financial services such as mobile money is minimal compared with traditional bank accounts (0.3 percent compared with 55 percent, according to the September to December 2014 InterMedia survey); nonetheless, we believe that the introduction of payments banks, combined with government efforts to digitize transfers, will facilitate greater adoption of digital financial services.

While PMJDY has successfully promoted ownership of bank accounts, incentivizing use of these services is critical for achieving true financial inclusion. Dormancy rates in India are high — about 43 percent of accounts had not been deposited into or withdrawn from in the previous 12 months, according to the 2014 Global Findex.

More time may be needed for individuals to understand how their new accounts function and, equally importantly, how their new accounts are relevant to their daily lives. A February 2015 survey designed by India’s Ministry of Finance, MicroSave, and the Bill & Melinda Gates Foundation found about 86 percent of PMJDY account holders reported the account was their first bank account. While this survey is not nationally representative, it provides some context as to why efforts to promote trust in and understanding of these new accounts will be key to the success of the program.

An opportunity for promoting adoption of digital financial services was highlighted during the public launch of the 2015 Report and Scorecard: As of June 2015, it was estimated that fewer than 6 percent of merchants in India accepted digital payments. The U.S. government is partnering with the government of India to promote the shift to digitizing transactions, including at merchants.

The next annual FDIP Report will examine the outcomes of such initiatives as we assess India’s progress toward greater financial inclusion. Suggestions and other comments regarding the FDIP Report and Scorecard are welcomed at FDIPComments@brookings.edu.