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Since the conflicts over Abkhazia and South Ossetia in the early 1990s, violence has erupted several times in Georgia, most notably in August 2008. Large-scale human rights violations characterized the August 2008 war, including the displacement of almost 150,000 people. By the time the fighting ended, Georgia had lost the last areas it controlled in South Ossetia and Abkhazia, and Russia subsequently recognized the independence of both. While most of those displaced in the August 2008 war have returned, over 200,000 people from earlier conflicts remain displaced.

On November 19, the Brookings-Bern Project on Internal Displacement will host a discussion of current issues around human rights, democracy and displacement in Georgia. The event will feature a presentation by Tinatin Khidasheli, international secretary of the Republican Party of Georgia, and Giorgi Chkheidze, executive director of the Georgian Young Lawyers’ Association. Following their remarks, Sam Patten, senior program manager for Eurasia at Freedom House, and Nadine Walicki, country analyst for the Internal Displacement Monitoring Centre, will join the discussion.

Senior Fellow Elizabeth Ferris, co-director of the Brookings-Bern Project, will provide introductory remarks and moderate the discussion. After the program, panelists will take audience questions.

Audio

• Human Rights, Democracy and Displacement in Georgia

Transcript

• Uncorrected Transcript (.pdf)

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• 20101119_georgia_human_rights

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Since the Rose Revolution in November 2003, Georgia has grappled with the many challenges of building a modern, Western-oriented state, including implementing political and economic reforms, fighting corruption, and throwing off the vestiges of the Soviet legacy. On the path toward a functioning and reliable democracy, Georgia has pursued these domestic changes in an often difficult international environment, as evidenced by the Russia-Georgia conflict in 2008.

On March 17, the Center on the United States and Europe at Brookings (CUSE) hosted President Mikheil Saakashvili to discuss Georgia’s approach to these challenges. A leader of Georgia’s 2003 Rose Revolution, Saakashvili was elected president of Georgia in January 2004 and reelected for a second term in January 2008.

Vice President Martin Indyk, director of Foreign Policy at Brookings, provided introductory remarks and Senior Fellow and CUSE Director Fiona Hill moderated the discussion. After the program, President Saakashvili took audience questions.

Video

• Georgia Is a Transformed Country
• Georgia Is a Valuable Asset to Europe
• The Key to Effective Change Is Youth

Audio

• From Popular Revolutions to Effective Reforms: The Georgian Experience

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• Uncorrected Transcript (.pdf)

Event Materials

• 20110317_saakashvili_transcript

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It’s a fair question to ask: what was all the fuss about last October? The elections in Georgia and Azerbaijan came and went and the results were no surprise. Azerbaijani incumbent Ilham Aliyev won and Georgia's Mikhail Saakashvilli did not. The Azerbaijani elections were bogus; the Georgian elections were not. So what? Life goes on.

But perhaps it is not that simple. Most outside observers saw these elections as a barometer of democratic progress in a region where the West — and the U.S. in particular — has invested time, resources and effort over more than 20 years to help these countries to build a better future for themselves. As stakeholders in the democratic process in the South Caucasus since Armenia, Azerbaijan and Georgia gained their independence in 1991, Europe and the U.S. must fuss over the outcomes of the Azerbaijani and Georgian elections. 

Beyond Election Day

Evaluating these elections and their impact on the domestic social and political landscape as well as foreign relations requires, however, a focus on more than just election day. The excellent report from the European Stability Inititive on the election observation mission to Azerbaijan makes a strong case for not judging democratic progress based only on how the elections may appear to be conducted on election day.

The Georgian elections proved that post-Soviet governments could change, politicians could change and a European path be chosen. The Azerbaijani elections proved that a regime could “buy” favorable reports from short-term observers imported for election day, carry on with election rigging, continue human rights violations and ignore international criticism, whether from the Department of State or the Organization for Security and Cooperation in Europe’s long-term observer mission.

Why the difference between the two neighboring countries? There are several reasons. First, Georgia’s generally free and fair 2012 parliamentary elections set a strong example for the 2013 presidential elections, and Georgia welcomed outside involvement and observation. Azerbaijan, on the other hand, prevented the visit of U.S. Deputy Assistant Secretary for Democracy and Human Rights Tom Melia before its elections. Second, Georgian political parties, including the opposition, agreed on electoral ground rules. Third, the Georgian population demanded leadership change. Fourth, the outcome of elections in Georgia was accepted as a transparent way to — for the first time in modern Georgian history — transfer political legitimacy.

Test of Democratic Evolution

The real test of democratic evolution has to do with actions — over a period of months before and after election day — as well as rhetoric that affect the integrity of the elections. The pre- and post-election environments in Azerbaijan consist of continuing intimidation of the political opposition and independent NGO leadership, suppression of freedom of expression and official dismissal of any need to change. While Georgia had a pretty good pre-election period, the post-election period remains fraught with challenges to the effectiveness of Parliament and other fragile institutions, and whether the current government will pursue criminal charges against former President Saakashvili.

Is it Our Business?

There are different views regarding whether democratic evolution — in its broadest sense — is our (e.g. the West, U.S.) business at all. Who are we — despite our support for democratic change — with all our defects to establish standards for others to follow? At least for the short-term the Maidan events in Ukraine put this point into practical focus. If a country wants to be part of the West there are certain standards of economic and political reform that must be met as part of that association. In other words values matter. The traditional excuses of geopolitical importance or interests of energy security for failure to accept even the minimal international norms for treatment of a country’s own citizens are gone.

A major issue for the post-election period has become the choice between closer association with the EU or Vladimir Putin’s Eurasian Union. This choice really is about values that countries choose to be identified by. Armenia and Georgia made clear choices at Vilnius summit for the Eastern Partnership: Georgia and Moldova for the EU; Armenia for Eurasian Union. Ukraine was asked to make a decision but chose to walk the line between short-run financial expediency and a long-term commitment to a European future. Azerbaijan decided to choose none of the above; “neutrality” the regime called it. All the while proclaiming — along with its apologists in the West — the strategic importance of Azerbaijani energy for Europe’s future.

These countries can no longer talk their way around this or employ foreign surrogates to do this for them. Arguments for overlooking bogus elections, corruption and human rights abuses based on overriding strategic importance to the U.S. (e.g. war against terror, Northern Distribution Network, energy security) are excuses for inaction on the fundamental values that must be at the core of our relationships in the 21st century.

When countries like Azerbaijan fail to live up to these standards we do not walk away. Rather we continue to insist on solid, value-based behavior by those who profess they are partners with us. That means economic and political reforms to complete the transition from post-Soviet to 21st Century status. This requires observance of human rights, respect for freedom of expression, and release of political prisoners. It also requires a pattern of increasingly democratic elections. That’s why we need to care about elections in the south Caucasus.

We must congratulate Tbilisi on its accomplishments in the October electoral process. At the same time we must encourage the Georgian government to move along with strengthening institutions like Parliament and the judiciary so Georgia can avoid a political justice system.

As the Obama administration copes with Russia’s annexation of Crimea and continuing pressure on Ukraine, its actions invariably invite comparison to the Bush administration’s response to the 2008 Georgian-Russian war. But as the Obama White House readies potentially more potent economic sanctions against Russia, former Bush administration officials are bandying a revisionist history of the Georgia conflict that suggests a far more robust American response than there actually was.

Neither White House had good options for influencing Russian President Vladimir Putin. And this time, the fast-moving developments on the ground in Ukraine confront the United States with tough choices. Because the West will not go to war over Crimea, U.S. and European officials must rely on political, diplomatic and financial measures to punish Moscow, while seeking to launch negotiations involving Russia in order to de-escalate and ultimately stabilize the Ukraine situation. They are not having an easy time of it.

Neither did the Bush administration during the 2008 Georgia-Russia war. In a brief, five-day conflict, the Russian army routed its outnumbered and outgunned Georgian opponent and advanced to within a short drive of the Georgian capital, Tbilisi. Bush officials ruled out military options and found that, given the deterioration in U.S.-Russian relations over the previous five years, they had few good levers to influence the Kremlin. The sanctions Washington applied at the time had little resonance in Moscow.

In recent days, however, former Bush administration officials have described a forceful and effective U.S. response in Georgia. On “Fox News Sunday” on March 16, former senior White House adviser Karl Rove told Chris Wallace, “What the United States did was it sent warships to, to the Black Sea, it took the combat troops that Georgia had in Afghanistan, and airlifted them back, sending a very strong message to Putin that ‘you’re going to be facing combat-trained, combat-experienced Georgian forces.’ And not only that, but the United States government is willing to give logistical support to get them there, and this stopped them.”

Rove was echoing what former Secretary of State Condoleezza Rice wrote in a March 7 op-ed in The Washington Post: “After Russia invaded Georgia in 2008, the United States sent ships into the Black Sea, airlifted Georgian military forces from Iraq back to their home bases and sent humanitarian aid. Russia was denied its ultimate goal of overthrowing the democratically elected government.” Really? These statements do not match well with the history of the conflict.

War broke out the night of Aug. 7, when Georgian President Mikhail Saakashvili ordered his troops into the breakaway region of South Ossetia, after Russian forces shelled Georgian villages just outside South Ossetia. The Russians — by appearances, spoiling for a fight — responded swiftly with massive force. They turned the Georgian army back and overran much of Georgia.

As has been widelyreported, when the conflict began, one of Georgia’s five army brigades was serving as part of the coalition force in Iraq (not Afghanistan, as Rove claimed). On Aug. 10, U.S. C-17s began returning the brigade to Tbilisi, and it promptly went into combat.

The brigade was well-trained and experienced — but in counterinsurgency operations for Iraq, not combined arms operations. Facing a larger and far better-armed opponent, the brigade added little to the failing Georgian effort to halt the Russian advance. On Aug. 12, Moscow announced a cease-fire. French President Nicolas Sarkozy traveled to the Russian and Georgian capitals to formalize an end to the hostilities.

Did the U.S. airlift of the Georgian troops to Tbilisi change the tide of battle or Moscow’s political calculations? No. The Russian army handily drove them back.

What about the deployment of U.S. Navy ships to the Black Sea? The guided missile destroyer USS McFaul did enter the Black Sea to deliver humanitarian supplies to Georgia, passing through the Bosporus on Aug. 22 — 10 days after the cease-fire.

No evidence suggests these actions had much, if any, impact on Putin’s decision making. The Russians halted their offensive short of Tbilisi, figuring that occupying the capital was unnecessary. They thought — as did many in Georgia and the West — that the political shock of the rout would suffice to bring down Saakashvili’s government (though, in the end, it did not).

U.S. C-17s did fly humanitarian supplies to Tbilisi, but President Bush ruled out military action. His administration imposed modest penalties on Russia, ratcheting down bilateral relations, freezing a U.S.-Russia civil nuclear cooperation agreement and ending support for Moscow’s bid to join the World Trade Organization. U.S. officials found that they had little leverage to affect Moscow’s behavior.

The Obama administration has applied similar measures as it seeks to sway Putin again, but it has added a new penalty: visa and financial sanctions targeted at individual Russians, including some close to Putin. On March 20, the president also announced a new executive order to enable U.S. sanctions against key sectors of the Russian economy, including finance, energy and defense — the kinds of tough penalties that the United States has not previously applied against Moscow.

Despite the bluster of former Bush administration officials today, Washington in fact has a stronger hand in the current crisis in Ukraine in one other regard. In 2008, many European states held Saakashvili partially responsible for triggering the war with the Georgian advance into South Ossetia. Ukraine, by contrast, has acted with great restraint. This time, nearly all of Europe agrees that Russia’s actions are out of bounds. Sure enough, European states also appear more ready to sanction Russia than in 2008. Along with the various sanctions the U.S. alone has announced, European Union officials last week also announced visa and financial sanctions on individual Russians.

These moves might not end up shaking Putin from his course, but applying the new executive order could inflict real pain on the Russian economy — something Washington did not accomplish in 2008. Those who faced the challenge of punishing Russia over Georgia should understand the complexities of dealing with Putin and, at a minimum, cut the current administration a little slack.

Read the original article at POLITICO Magazine»

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Recent events in Ukraine have raised important questions about Russian ambitions in the former Soviet space and the future political perspectives of the countries caught between Russia and the European Union. These countries are facing substantial obstacles in their efforts to maintain balanced relations with the United States, the European Union and the Russian Federation because of increased Russian political, economic and military pressures. In Ukraine, the annexation of Crimea and the ongoing turmoil in the East threaten the Ukrainian government's ability to maintain its independence and the sovereignty of Ukraine. Georgia and Moldova have expressed their intention to sign Association Agreements with the European Union, but increasingly face the prospects of destabilizing Russian economic sanctions and even the possible rekindling of their “frozen conflicts” in Abkhazia, South Ossetia and Transnistria.

On April 29, the Center on the United States and Europe at Brookings (CUSE) will host the ambassadors of Georgia, Moldova and Ukraine—Ambassadors Archil Gegeshidze, Olexander Motsyk and Igor Munteanu—as well as Eric Rubin, U.S. deputy assistant secretary of State for European and Eurasian Affairs, to discuss the dilemmas of these countries and possible solutions. Fiona Hill, director of CUSE, will introduce the speakers and moderate the discussion.

After opening remarks, panelists will take questions from the audience.

Audio

• A Discussion with the Ambassadors of Georgia, Moldova and Ukraine

Transcript

• Transcript (.pdf)

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• 20140429_ambassadors_transcript

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Russia’s annexation of Crimea in March and the continuing crisis in Ukraine have triggered the most heated confrontation between Russia and the West since the Cold War. The standoff over Ukraine has raised critical questions about Russia’s ambitions in the post-Soviet space and the future political perspectives of the countries caught between Russia and the European Union. Despite political and economic pressure and ongoing occupation by Russia, Georgia is pursuing democratic transformation and a path toward the West.

On May 5, the Center on the United States and Europe (CUSE) at Brookings hosted Georgian Defense Minister Irakli Alasania for an address on Georgia’s vision for Euro-Atlantic integration during a period of increased insecurity in the region. In his remarks, Minister Alasania shared his insights on the upcoming NATO summit and Georgia’s approach to enhancing its relations with the West while attempting to normalize relations with Russia to lower tensions still simmering from the war six years ago.

Irakli Alasania previously served as Georgia's permanent representative to the United Nations from 2006 to 2009 and before that as special representative of the president in Georgian-Abkhazian negotiations. He is the founder and chairman of the Our Georgia-Free Democrats Party and one of the founders of Georgian Dream Coalition.

CUSE Director Fiona Hill provided introductory remarks and moderated the discussion.

Audio

• Georgia's Euro-Atlantic Aspirations and Regional Security

Transcript

• Transcript (.pdf)

Event Materials

• 20140505_georgia_security_transcript

Today, the Center on the United States and Europe (CUSE) at Brookings hosted Georgian Defense Minister Irakli Alasania for an address on Georgia's vision for Euro-Atlantic integration during a period of increased insecurity in the region. In his remarks, Minister Alasania shared his insights on the upcoming NATO summit and Georgia's approach to enhancing its relations with the West while attempting to normalize relations with Russia to lower tensions still simmering from the war six years ago.

Minister Alasania said that his country's "path toward NATO and European integration is unchanged" and offered next steps on "how we're going to make sure that the credibility of the west, the credibility of NATO as an organization will continue to be relevant to safeguard the values that we all cherish: freedom, democracy, and a Europe whole and free."

"We are acting like a NATO country," he said. Continuing:

We are acting like a European country, because we believe that our future is within Europe. And we regard ourselves as a future member. And this is why we are preparing ourselves institution-wise, in terms of freedom, in terms of democracy, and the military capabilities when ... the historical opportunity will open up to Georgia to join NATO and the EU.

The defense minister added that "We are looking at the future." We:

cannot be dragged back to the confrontation of the early 1990s. And we want to make sure that our policies, our economic policies, our foreign policy, [are] specifically working to make sure that the Georgian people who elected us are now moving closer and closer to the European way of living standards. And this only can be done if the efforts that Georgia is making will be validated, will be appreciated by the NATO and the European countries.

One of the things we are looking forward to is the signing of the association agreement. The next step obviously is the NATO summit. And what the NATO summit will decide is how effectively they can assure the allies, but also the partners, like Georgia.

On Russia, Minister Alasania spoke in both hopeful and realistic terms, saying that:

We are now approaching foreign policy and specifically the issue with Russia with a rather mature approach. We don't have any illusions that Russia will change its behavior or policies toward Georgia's territorial integrity or NATO aspirations. But we do hope the diffusion of tensions, the decrease of the military rhetoric between the two countries, will serve Georgia's interests best.

And it will give us more space to develop ourselves, to develop our relationship with the Abkhazia and South Ossetian areas. This is the cornerstone of our policy actually. Be uncompromising on the territorial integrity. Be uncompromising on NATO aspiration, membership in NATO and the EU. But at the same time be sure that we are not going give a pretext to anybody in the region, specifically to Russians, to attack us politically or otherwise.

Listen to audio of the event below or on the event's web page to get the full conversation, which was moderated by CUSE Director Fiona Hill.

Audio

• Georgia's Euro-Atlantic Aspirations and Regional Security

Harsh geopolitical realities and historic legacies have pushed the South Caucasus states of Armenia, Azerbaijan, and Georgia back onto the foreign policy agendas of the United States, the European Union (EU), and Turkey, at a time when all three have pulled back from more activist roles in regional affairs. The South Caucasus states have now become, at best, second-tier issues for the West, but they remain closely connected to first-tier problems. To head off the prospect that festering crises in the Caucasus will lead to or feed into broader conflagrations, the United States, EU, and Turkey have to muster sufficient political will to re-engage to some degree in high-level regional diplomacy. In “Retracing the Caucasian Circle Considerations and Constraints for U.S., EU, and Turkish Engagement in the South Caucasus,” authors Fiona Hill, Kemal Kirişci, and Andrew Moffatt explore the rationale and assess the options for Western reengagement with Armenia, Azerbaijan, and Georgia given the current challenges and limitations on all sides. Based on a series of study trips to the South Caucasus and Turkey in 2014 and 2015, and numerous other interviews, the authors review some of the current factors that should be considered by Western policymakers and analysts.

Constraints and considerations for U.S., EU, and Turkish engagement in the South Caucasus:

• Divergent trends in the South Caucasus
• Russia’s influence in the South Caucasus
• Regional conflicts
• The United States’ diminishing role in the South Caucasus
• Failure to integrate the South Caucasus into the EU
• Foundering relations with Turkey
• Dashed expectations in the South Caucasus of Western engagement

Despite the challenges that have beset the West’s relations with the South Caucasus and the growing disillusionment in Armenia, Azerbaijan, and Georgia, giving up on engagement is not an option.

Policy options for the future:

• The United States, EU, and Turkey must work together, rather than separately
• “Under the radar” coordination on creative interim solutions and working with other mediators
• Focus on the development of “soft regionalism”
• Work with Georgia as the hub for furthering soft regionalism
• Devise adaptable policies as relations with Iran and China develop in the region

Downloads

• Retracing the Caucasian Circle: Considerations and constraints for U.S., EU, and Turkish engagement in the South Caucasus

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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

As the income inequality discussion continues to simmer across the country, municipal minimum wage ordinances have become hot topics of conversation in many cities. In January 2016, Seattle will implement its second step-up in the local minimum wage in 9 months, reaching $13 for many employers in the city and edging closer to a $15 an hour minimum that will apply to most firms by 2019. San Francisco will reach a $15 an hour minimum by July 2018. Yet cities as diverse as Birmingham, Chicago, Los Angeles, and Louisville have enacted or proposed similar minimum wage laws. It is too early to discern true impact of these local wage ordinances, but speculation abounds regarding whether or how the higher wage will affect firms and the earnings of low-wage workers.

Less prominent in debate and discussion about the minimum wage is the potential impact that higher minimum wage rates may have for nonprofit organizations. Nonprofits perform many critical functions in our communities—often serving the most at-risk and disadvantaged. Yet, fiscal constraints often place a low ceiling on what many nonprofits can pay frontline staff. As a result, many different types of nonprofit organizations—child care centers, home health care organizations, senior care providers—pay staff at rates near or below the targets set by the recent crop of local minimum wage laws. Our popular image of a minimum wage worker is the teen-age cashier at a drive-through window or the sales clerk at a retail store in the local strip mall, but many workers in these “helping professions” are being paid low wages.

Increases in the minimum wage are occurring at the same time that many nonprofit service organizations are confronted with fixed or declining revenue streams. Facing fiscal pressure, nonprofit service organizations may pursue one or more coping strategies. In addition to reductions in staffing or hours, commonly expected responses, nonprofits may cut back services offered, scale back service areas, or favor clients that can afford higher fees.

Such responses could reduce the amount and quality of the services provided to vulnerable populations. For example, elderly populations on fixed incomes may have fewer options for home care. Working poor parents may find higher child care costs prohibitively expensive. Employment service organizations may find it harder to place hard-to-serve jobseekers in jobs due to more competitive applicant pools.

At the same time, higher minimum wages could have positive consequences for nonprofit staffing and capacity. Higher wages could reduce employee turnover and increase staff morale and productivity. Organizations may not have to grapple with the contradiction of serving low-income persons, but paying modest wages.

The most recent set of wage ordinances take cities to unknown territory. Anticipating potential negative effects, Chicago has exempted individuals in subsidized employment programs from its recent minimum wage ordinance. The city of Seattle has set aside funds to help nonprofits meet the higher local minimum wage, but many nonprofit funding streams are beyond the city’s control and are not seeing similar adjustments.

In the coming years, more research on how local nonprofits are affected by local minimum wage laws needs to occur. We should expect there to be a mix of positive and negative effects within a particular nonprofit organization and across different types of organizations. Nonprofit organizations should be engaged as stakeholders in debates around higher local minimum wages. And, nonprofits should actively engage in research efforts to document the impact of higher wages. In particular, nonprofits should work to compile data that can compare staffing, service delivery, and program outcomes before and after wage laws phase-in. Such data could provide important insight into the impact of local wage ordinances.

We also should be careful not to confuse other challenges confronting the nonprofit sector with the impact of higher minimum wages. For example, private philanthropy to human service nonprofits has failed to keep up with rising need and declining public sector revenue streams in most communities—realities that may pose more serious challenges than minimum wage laws, but ones without an obvious scapegoat.

In the end, ongoing debate around local minimum wage ordinances should provide us with the opportunity to re-examine how we support community-based nonprofits as a society and assess whether that support fits with all that we expect the nonprofit sector to accomplish for children and families in our communities. 

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.

There are lots of good reasons to go to college, but the vast majority of prospective students in this country report[i] that they’ll go to college because they believe that it will improve their employment opportunities and financial wellbeing. And for the most part, they’re right. Despite many suggestions to the contrary, it’s very well documented[ii] that investments in higher education pay large dividends in the form of future earnings. This makes higher education one of the most important tools we have for generating social mobility. Regardless of an individual’s starting point in life, higher education offers access to greater financial well-being. Unfortunately, it’s not a fail proof system.

Investments in education, like investments in the stock market, do not come without risk. In financial markets, access to information is one way investors mitigate risk. Mutual funds, for example, disclose average returns over various time periods for certain categories of investments (e.g. large-cap funds, emerging market funds, technology funds, etc.), in addition to other information. These data, moreover, are widely and freely available through consumer-oriented websites like Yahoo Finance, Vanguard, and E-Trade. Yet, for higher education, students have had access to no analogous information until quite recently.

For decades, economists discussed the average benefits of a college education compared to a high school education with no regard to either field of study or institution. Finally, in 2009, the Census Bureau started collecting data that could be used to assess which majors pay the most,[iii] and then just a few months ago, the Department of Education released data on the earnings of alumni by institution, for all students who receive federal grants or loans. These data can be further analyzed, as we have done, to estimate the economic contribution of schools (or value-added) as distinct from the outcomes attributable to student characteristics (like test scores).[iv] Still, even with these data advances, students cannot compare earnings by major across institutions, except in a handful of cases using state data systems.

Here, we illustrate how data by major and institution can inform the decision of what to study and where using data from Texas. Suppose first that this student is a Texas resident and has decided she would like to pursue a bachelor’s degree at a public institution in her state.

Our data on alumni earnings by major comes from the Texas Higher Education Board, and we combine it with information on the net cost of tuition from the Department of Education’s IPEDS database as reported in the College Scorecard.[v] We use these data to estimate the ten-year return on investment for each institution in the state of Texas by major.   

We calculate an estimate of ten-year return by summing the average earnings faced by graduates over the first ten years following graduation[vi] and subtracting off the wage they would have received as a high school graduate without a degree (taking into account additional years of earnings when they would have been enrolled in college). To estimate this benchmark, we used data on Texas residents from the Annual Social and Economic Supplement to the Current Population Survey, obtained via IPUMS CPS.[vii] We then subtract the institution specific costs[viii] to get the ten-year financial return. Since education pays off over a lifetime, this isn’t the ideal exercise, but it’s still informative. We’ve estimated these returns based on the population of individuals who both complete their degree and do not go on to complete graduate study. Ideally, these estimated expected returns would be adjusted to account for how earnings and costs are affected by non-completion. Indeed, the average rate of completion across these schools is only 48 percent. This is a quick and dirty method for estimating returns that fails to take into account a number of selection issues,[ix] but we believe that it still provides an effective illustration of risk in higher education. 

Figure 1 illustrates the potential average outcome facing our Texas student, who is deciding between bachelor’s degree programs from the set of public institutions in her home state. We’ve plotted the distribution of financial returns for the set of potential expected outcomes, which are defined as all combinations of institution and major. To be clear, the distribution of potential outcomes would be far wider if we were using individual specific variation (i.e. the fact that some students will ultimately earn more than others, even with the same degree from the same institution) and the real possibility of non-completion.

We know that, on average, this student will face a positive return on her investment, wherever she chooses to go. The average rate of return across all possible choices facing this student is quite a sizeable 11.3 percent (or $216,000 in undiscounted 2014 dollars). At a systemic level that’s important.  Still, the standard deviation is 6.7, with a low return of a -6.6 percent (Animal Science at Sul Ross State) and a high return of 79.8 percent (Registered Nursing at UT Brownsville). Out of 1065 combinations of majors and schools, 19 yielded average negative returns. This was true even for two programs at the selective UT Austin campus (Visual and Performing Arts and Classics). 1.1 percent of students who graduated in 2004 were in a major-institution combination that yielded a net return below 4 percent. In such cases, they would have been better off putting their dollars into treasury bills.

Figure 1. Mean return on bachelor’s degree investment by institution and major, for Texas residents who graduated in 2004 from a Texas public college

Students who know what they want to major in could benefit greatly from knowing which school is likely to generate the largest pay off (it would be nice to know this in terms of learning as well as money, but that is another more complicated matter).

We’ve illustrated the distribution of potential outcomes for two different popular majors, Liberal Arts and Sciences and Electrical Engineering.[x] Both majors clearly offer a significant average rate of return across all institutions (12 for Liberal Arts and 20 for Electrical Engineering), but depending on which major they choose the student will face a different level of risk in their future earnings. The variation (standard deviation) in the expected rate of return across institutions is much larger for Liberal Arts majors (5.7) than for Electrical Engineering majors (3.7). Yet, while these facts may discourage people from pursuing a Liberal Arts major in the abstract, the plot below does show that some Liberal Arts majors out-earn their peers in electrical engineering. For example, Liberal Arts majors from UT Austin earned a higher return than electrical engineering majors at UT Dallas, the University of Houston, and three other UT campuses. Thus, these more detailed facts can actually encourage students to pursue majors that look economically bad for the average student but quite attractive at a particular school with a strong program.

Figure 2. Distribution of earnings 10 years after graduation for bachelor’s degree holders with an Electrical Engineering or Liberal Arts degree, for Texas residents and 2004 graduates from Texas public colleges 

The point is that college degrees, like other investments, are risky, but information goes a long way to clarify the nature of that risk and improve the quality of investment decisions. In addition to providing students and the public greater access to data on market performance of alumni, there are a number of innovations both in the policy arena and in the private market that could help make college investments less risky. First of all, innovative financing systems that allow students to pay for their investment over a longer period of time and tie repayment to earnings would greatly limit downside risk for students.  Second, institutions have the capacity to shoulder some of this risk, and a proposal known as risk-sharing[xi] is gaining some traction and would require schools to pay the federal government some portion of loan default losses. On a voluntary basis, some colleges have offered on-time graduation guarantees[xii] and wage guarantees.[xiii] And last, new business models in higher education could help mitigate risk. Part of the problem in the current system comes from the all-or-nothing regime in which students have to invest in a bundle of coursework (i.e. a degree) in order to reap significant returns. The growing prominence of new models, like micro-credentials[xiv] and coding boot camps,[xv] can offer alternatives that don’t require students to put all of their eggs in one basket.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Executive Summary

The Millennium Challenge Corporation (MCC) is one of the outstanding innovations of the eight-year presidency of George W. Bush. No other aid agency—foreign or domestic—can match its purposeful mandate, its operational flexibility and its potential muscle.

In the first year after it became operational in May 2004, however, the MCC made a number of mistakes from which it has not fully recovered. It also had the bad luck of facing an increasingly tight budget environment as its performance improved.

The MCC may not survive as an independent agency. Critics have advocated closing it down, while many supporters of foreign assistance reform would maintain the MCC program but consolidate it with the Agency for International Development and the President’s Emergency Plan for Aids Relief under a single individual with broad development responsibilities.

In our assessment, one of the singular achievements of this innovation is the “MCC effect”: steps taken by a number of countries to improve their performance against the MCC’s objective indicators in order to become eligible for an MCC compact.

A Rough Start

The Millennium Challenge Corporation started off in the wrong direction in 2004. New leadership a year later put the MCC back on track. Unfortunately, however, the MCC has not been able to recover quickly enough from its early mistakes to compete successfully for funding in the face of increasingly severe government-wide budget constraints. After more than four years of operation, it has not yet achieved “proof of concept.” As a result, its future as an independent agency is in jeopardy.

The Concept

In March 2002, six months after the 9/11 terrorist attacks, President George W. Bush announced a commitment to increase U.S. aid to low-income countries by $5 billion per year, representing a jump of 50 percent from the baseline level of official development assistance (ODA).

More remarkable than the size of the commitment was the nature of the commitment. It would not be more of the same. It would be better. It would reward good performance by focusing exclusively on poor countries implementing sound economic development and poverty reduction strategies, as reflected in objective indicators. It would achieve measurable results.

President Bush’s initial concept did not specify the organizational form of the new program. Instead of putting it under the State Department or Agency for International Development (USAID), President Bush opted for creating a special-purpose government corporation—the Millennium Challenge Corporation—to run the program.

Conception turned out to be the easy part. It took almost a year for the administration to send legislation proposing the MCC to Congress, and it took another year for the Congress to send authorizing legislation to the president.

While the purity of the MCC concept was compromised significantly in the process of obtaining enough votes in Congress to establish it, six key elements were preserved: rewarding good performance; country ownership; measurable results; operational efficiency; sufficient scale at the country level to be “transformational”; and global commitments at the rate of $5 billion per year.

The Record

Perhaps the biggest mistake in the MCC’s first year of operations was a failure to develop a good working relationship with the U.S. Congress. Some staffing choices gave the impression that the MCC had no interest in the experience and expertise that existed in USAID, the multilateral development banks and NGOs working in low-income countries. In retrospect, a third problem may have been starting compact negotiations with more than a dozen countries instead of building its portfolio of compact countries more slowly and carefully.

Paul Applegarth resigned as CEO in June 2005 and John Danilovich took over the following October. At that point, compacts had been signed with five countries. Funding problems were already visible. Against the original proposal seeking a combined $4.6 billion for the first two start-up years (reaching the target $5 billion in FY 2006), the budget request added up to only $3.8 billion, Congress authorized only $3.6 billion, and appropriations only reached $2.5 billion.

For the next three years, FY 2006 – FY 2008, the administration’s budget request for the MCC was straight-lined at $3 billion. Appropriations peaked in FY 2006 at $1.77 billion, and then slipped to $1.75 billion in FY 2007 and $1.482 billion in FY 2008 (after an across-the-board rescission). Thirteen more compacts were signed, bringing the total number of compact countries to 18. In addition, threshold agreements totaling $361 million were being implemented in 14 countries. At the end of FY 2008, cumulative MCC appropriations were $7.5 billion, and cumulative compact commitments were $6.3 billion.

As the Bush administration winds down and the Obama administration gears up, the MCC is in an awkward situation. It has recovered from its start-up problems and now has significant support in Congress and the development community. The evidence of an “MCC effect” is particularly notable. The compact countries are fans of the program, and other potentially eligible countries appear eager to conclude compacts.

However, the “measurable results” promised to an impatient Congress have not yet materialized. Since the first compact will not reach the end of its original four year lifespan until July 2009, it is too early to expect such results. Still, enough questions about the effectiveness of the MCC have been raised to strengthen the position of skeptics in the Congress.

A moment of truth is approaching. Assuming FY 2009 funding remains capped by continuing resolutions at a level no higher than $1.5 billion, the MCC will not be able to conclude more than three compacts averaging $400 million each during this fiscal year. While a strong case can be made for an independent aid agency operating at the rate of $5 billion per year, a rate of $1-$1.5 billion per year for a stand-alone agency is not so easy to justify. Meanwhile, an important coalition of foreign aid advocates sees the change of administration as an opportunity to consolidate a wide range of development and humanitarian assistance programs, including the MCC, into a single agency or cabinet-level department.

Findings and Recommendations

Our assessment of the MCC at the end of FY 2008 focuses on six operational issues and ends with a recommendation to the Obama administration. (The full assessment is in our working paper “The Millennium Challenge Corporation: An Opportunity for the Next President.”)

1. Objective indicators. From the outset, objective indicators of country performance have been at the core of the MCC approach to development assistance. The concept is simple: the MCC will provide funding to countries that excel against performance indicators in three areas: ruling justly, investing in people and providing economic freedom. Selecting countries is not so simple.

The MCC’s 17 indicators of country performance are state of the art. But they are not embedded in concrete. The MCC has been pushing hard for improvements. A number of the independent providers of these indicators have tightened their procedures and methodology, and others have shortened the time between data collection and dissemination. The publication of updated country “scorecards” on the MCC Web site each year provides an unprecedented level of visibility linking country performance to donor assistance. In general, the MCC’s indicators have met broad approval in the donor community.

The “MCC effect” has been the most important benefit of these indicators. The MCC’s indicators provide a comprehensive, objective and highly visible system for comparing a country with its peer group and showing where its performance falls short. One academic study found that eligible countries improved their indicators significantly more after the MCC was established than in the pre-MCC period, and that eligible countries improved their indicators significantly faster than developing countries not eligible for compacts.

The MCC’s objective indicator approach has been very successful. Still, it is important to recognize certain inherent limitations. Four are worth singling out:

• The majority of the measures used to measure performance are available only with a time lag.
• The indicators reveal relative performance, not absolute performance. Good performers on the basis of the indicators still face daunting challenges.
• Even a top performing country is likely to see its ranking slip on one of the indicators at some point during compact implementation. This can create a credibility problem for the program even when the underlying trend is positive.
• Measuring corruption is especially problematic. The corruption indicator is probably state of the art, but corruption has many elements, and there is no agreement on which weights to assign to each one.

Recommendation: Retain and continue to refine the objective indicators.

2. Country selection. Initially, the MCC was limited to funding low-income countries. Since FY 2006, the MCC has been able to commit up to 25 percent of its resources to lower-middle-income countries. For FY 2008, these were countries with annual per capita incomes between $1,736 and $3,595. Together, the two groups included 95 countries.

The MCC board reviews country scorecards once a year and decides which countries to add to the eligibility list. Selection is not automatic based on the indicators. The board considers a wide range of political, economic and social factors.

The MCC’s overall track record in selecting countries is good but not brilliant. At the end of FY 2008, there were 18 countries with signed compacts, five threshold countries that had been declared eligible for compacts, and three additional countries declared eligible that were not in the threshold program. The few selections that have been criticized are cases where political factors might have tipped the balance in favor of the country.

Most of the selected countries have small populations, perhaps because it is easier to be transformational in a small country. Even large countries, however, have poor regions and a case can easily be made that the MCC might have a greater impact by focusing on one poor region in a large country like India or Indonesia than on one entire microstate like Vanuatu.

Recommendation: As long as the MCC’s funding level remains below $2 billion per year, stick with the current approach to selection but avoid new cases where political factors appear to be overriding performance indicators. At higher funding levels, give greater weight to improvements in absolute performance so that the indicators will not be a constraint to adding countries and enlarging the MCC’s impact.

3. Compact design. Compact design can be broken down into four elements: preparation, size, content and choice of partner. One of the hallmarks of the MCC approach to development assistance is an exceptional degree of participation by the host country government and civil society. In a relatively short time, the MCC approach to country ownership has set a high standard to which other donor agencies should aspire.

Compact size is seriously constrained by the statutory five-year limit on the length of a compact and by the prohibition against concurrent compacts. The limit leads to unrealistic expectations: anyone who believes a five-year program can be transformational does not understand development. The inability to have concurrent compacts has led the MCC to bundle together activities that would better be pursued separately. Within these constraints, compact size so far is defensible.

Regarding content, one early criticism of the MCC centered on its bias toward infrastructure projects. Agriculture and infrastructure were the clear priorities at the outset, based on partner-country priorities. These two sectors still account for more than half of all MCC funding, but attention to other sectors has grown. For example, funding for education was absent from the first 10 compacts, but was present in five of the next eight.

This evolution may reflect congressional pressure to be active in the social sectors despite evidence that more investment to expand productive capacity and lower costs could have a greater poverty reduction payoff.

The MCC has also shied away from non-project funding (budget support), which has the advantages of being fast-disbursing, having very low overhead costs and avoiding performance failure by rewarding countries for results recently achieved. Similarly, the MCC has yet to use its considerable ability to leverage funding from private investors, especially for infrastructure projects.

On partnership, all of the compacts to date have been with national governments even though the MCC has the authority to enter into compacts with regional/municipal authorities and private sector parties such as NGOs. With this narrow focus, the MCC is probably missing some opportunities to have a bigger impact.

Our major concern is that the design of the 18 compacts concluded so far reflects very little innovation. They can be characterized as collections of the kinds of development interventions that USAID, the World Bank and other donors have been undertaking for decades. Perhaps in the attempt to overcome its early start-up problems and minimize congressional criticism, the MCC has been too risk averse.

Recommendation: Immediately remove the prohibition against concurrent compacts that is a disincentive to improving performance. Allow the MCC to extend compacts beyond five years when unanticipated complications arise. Provide encouragement from the White House and Congress to be more innovative in compact design.

4. Compact implementation. No MCC compacts have been completed, so assessment of their impact is premature. One problem is the lag from the date of compact signing to the date of its entry into force, which has lengthened from about three months for the first three compacts to 10 months for the 10th and 11th compacts. This reflects the MCC’s tactical decision to delay entry into force until the legal framework is in place and the implementing organization is up and running. The normal process of tendering for infrastructure projects accounts for some of the slowness, and bad luck has also created recent problems in the form of unanticipated increases in fuel and commodity costs.

The choice of an appropriate local implementing agency is both difficult and critical to success. The objectives of country ownership and capacity building/institutional development argue for selecting an existing government ministry or agency. Realities on the ground have led the MCC typically to establish a special-purpose organization (“accountable entity” in the MCC’s jargon). In effect, the MCC has promoted strict accountability at the expense of building partner-country capacity.

The MCC’s approach to monitoring and evaluation is a source of pride, but it could become the program’s Achilles’ heel. The MCC’s recent decision to make public the “economic rate of return” analysis for each new compact puts it at the head of the donor community. Other donor agencies have been unwilling to take this step, except in a more opaque form. A potentially critical problem with the MCC’s approach is latent in the micro performance benchmarks established for each compact. It seems likely that the results will be mixed at the end of most of the compacts. Given the high expectations created for the MCC’s impact, the failure to show superior results could undermine congressional support for the MCC going forward.

Finally, the MCC has largely lived up to its billing as a lean organization. It is now fully staffed at its ceiling of 300 positions. The MCC’s field offices, established after compact signing, are typically limited to two positions.

Recommendation: Continue to refine implementation techniques to the point of becoming a pace-setter and develop performance benchmarks that are less likely to generate disappointment.

5. Threshold Programs. The MCC has committed some $360 million to 16 “threshold” countries. Nearly all of these programs are managed by USAID. Two different visions seem to coexist. One vision is to prepare countries for a compact within a year or two. A second vision is to address a particular “target of opportunity” that will help a country qualify for a compact eventually. It is too soon to say how effective these programs have been under either approach.

However, the individual projects funded under the threshold programs have been indistinguishable from the typical USAID project involving a contract with an American firm to field a team of expatriate advisors focusing on a particular sector. A fundamental problem with the threshold programs is that they give the impression of trying to boost performance scores by short-term actions rather than rewarding the kind of self-generated progress that is more likely to be sustainable.

Recommendation: As long as MCC funding remains below $2 billion per year, shift funding of threshold programs to USAID funding. This will help to ensure that the activities being funded are of high value, and encourage USAID to take a more strategic approach to its operations in low-income countries.

6. Governance. The MCC legislation created a board of directors with five ex officio members and four private sector members. Having private sectors members on the board is one of the great strengths of the MCC, enhancing its objectivity and credibility, helping to ensure bipartisan support, and providing strategic links to the broader development community. By comparison to the boards of other government corporations, the MCC board is small in size and more biased toward public-sector members. Having the secretary of state chair the board weakens the image of the MCC as an agency focused on long-term development.

Recommendation: Amend the MCC legislation to add four more private sector members to the MCC board, allow the board to elect one of its private sector members as chairman.

The Existential Issue.

Although the MCC has not yet lived up to its promise, it still has the potential of offering the biggest bang for the buck among all U.S. development assistance programs. Six features are not only worth keeping but strengthening further: rewarding good performance; using objective indicators to guide the selection of countries; focusing on low-income countries; achieving a high degree of country ownership; avoiding earmarks and time limits on spending authority; and keeping staff small.

However, the current operating level of less than $2 billion per year is far below the original concept. Retaining a separate agency for such a small program within a much larger bilateral assistance program is questionable. With funding moving toward the pace of $5 billion per year, and with added authority to have concurrent compacts, the MCC can be more innovative and more transformational.

The MCC has the potential of being the world's leading "venture capitalist" focused on promoting economic growth in low-income countries. As a core component of a foreign policy that relies more on partnership with other countries, the Obama administration can realize this potential by affirming the MCC's bold mandate, strengthening its leadership, and boosting its annual appropriations to at least $3 billion beginning in FY 2010.R. Kent Weaver is a Senior Fellow in Governance Studies at the Brookings Institution and a Professor of Public Policy and Government at Georgetown University. He is the author of the forthcoming book Reforming Social Security: Lessons from Abroad.

Lex Rieffel is a nonresident senior fellow in Brookings's Global Economy and Development program. He is a former U.S. Treasury official and teaches a graduate course at George Washington University.

James W. Fox, formerly chief economist for Latin America at USAID, is an economic consultant.