Editor’s note: In this post, the third in a series drawing from Fergus Hanson's new book, "Internet Wars: The Struggle for Power in the 21st Century," Hanson analyzes the growing trend of online petitioning influencing policymaking, but argues the caveat that the nature of online campaigning is not always conducive to good policy.

Last federal election, the Obama campaign spent nearly $1 billion to get 66 million voters out to support the president’s victory.

So as the 2016 election approaches, large lists of politically-minded individuals have special value. And it just so happens in the last five years some very large lists have emerged.

These lists are controlled by online citizen-aggregation sites. The largest, Change.org, now reports more than 100 million users, but others are also huge: Avaaz reports 42 million and Care2 32 million.

So far, the operators of these sites have not directed their members in the same way as some of their overseas counterparts.

Two of the largest U.S. organizations—Change and Care2—are for-profit B-corporations and sell access to their membership, often for a hefty fee. They rely almost exclusively on petitions. This is probably driven by commercial motivations to grow membership with a view to selling access to it. But petitions are limited in their ability to effect change, especially as politicians become desensitized to them.

In other parts of the world, the model has evolved to become much more overtly political. A good example is one of the first movers in the space, GetUp!, an Australian-based group. It uses crowd sourcing to fund its secretariat, raising over $5.7 million from tens of thousands of micro donations averaging $11.50 each. It uses these funds to run successful high court challenges and other publicity (and pressure) generating stunts. It stations members at polling booths during elections and uses its members’ shareholder rights to hijack corporate meetings.

This trend is one of the radical new ways the Internet has allowed the masses to aggregate their voice in order to exert influence on decision makers. Suddenly, people are able to do this on a regular basis, outside formal structures like trade unions and political parties.

It also provides great influence to the individuals leading the campaigning sites. They can exercise this by shaping which campaigns have most prominence on a site and allocating in-house resources to help the campaigns they like with editing of material, generating media, and behind the scenes lobbying.

There is a now a long list of examples where these organizations have exerted significant influence on corporations and politicians, but in many ways they are still undergoing significant evolution.

The shift to a broader repertoire than simple petitions and more hands-on political engagement seems likely.

There is also a potential evolution underway in their politics. Most campaigning sites are openly progressive in orientation, but this is changing. In late 2012, Change.org controversially shifted its policy to allow advertising from non-progressively aligned groups. Conservative groups have also started to mobilize online, a prominent example being the Heritage Foundation in the United States, which now has a significant online presence.

Whatever their political leanings, the policy reality of this new force is messy.

The nature of online campaigning is not always conducive to good policy because the groups lack institutional policymaking expertise and often launch campaigns off the backs of crises, allowing little time to think through consequences.

Ironically, these people-power sites also face a question of legitimacy. Three hundred very vocal people with a clever campaign can sometimes drive change that the majority wouldn’t necessarily support. The nature of the Internet can also occasionally make it hard to distinguish between the views of local nationals and foreign citizens voicing their concerns from abroad. Finally, there is the question of the legitimacy of the heads of these organizations who can be unelected business people with out-sized influence.

This is not the only way the Internet is empowering citizens and disrupting global power dynamics. Internet Wars looks at three messy, but intriguing ways citizen power is reshaping the world.

Read the first part in the series, “Big issues facing the Internet: Economic espionage,” and the second, "Waging (cyber)war in peacetime."

Brookings John Austin provided Great Lakes regional economic context for a forum of Ohio and Pennsylvania business and civic leaders convened by Congressmen Jason Altmire (PA), and Tim Ryan (OH) to develop strategies for growing the bi-state regional economy.

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Ruy Teixeira joins NPR's Talk of the Nation host Neal Conan to discuss the Pennsylvania primary and the working-class vote.

NEAL CONAN: With us here in Studio 3A is Ruy Teixeira, a visiting fellow at Brookings Institution, co-author of the report "The Decline of the White Working Class and the Rise of a Mass Upper Middle Class." He's kind enough to be with us here. Thanks very much for coming in, nice to see you again.

RUY TEIXEIRA: Great to be here.

NEAL CONAN: And, what are some of the common themes that we see around these working class voters that Sherry Linkon was talking to us about?

RUY TEIXEIRA: Well, I think Sherry touched on a number of them. I think one critical theme, obviously, for this election is their level of economic discontent and their sense that the economic ground has shifted underneath their feet, and they are sort of wondering where they are going to go in the future, where their kids are going to go, sort of, where their way of life is going to go.

This is a matter of great concern to these voters because the last, you know, actually the last several years, have not been kind to them. But more broadly, you can look back, you know, 35 years and say the last 35 years has not been very kind to them. This has been a period when America, by and large, has grown not as fast as it did and incomes have not risen as fast as they used to, but it's been particularly bad for these voters.

Anyone with less than a four-year college degree has really done rather poorly since about the middle 1970s. So, there's a real question in their minds of what America has in store for them in the future. And they are very interested to hear what politicians have to say about it. So far, it hasn't seemed to work out quite so well.

And the other side of it is really touched on by the controversy that you're referring to which is their sense of cultural traditionalism, their sense that, especially the Democrats, perhaps, seem out of touch with that at times. It seems like they don't respect their way of life. It seems like their social liberalism gets in the way of connecting to these voters and really hearing what they have to say and what their commitments and priorities really are and a sense of elitism on their part.

And that's really what, I think, Obama's getting slammed on this, you know, in general, and of course, obviously the McCain and Clinton campaigns have some interest in pushing this, but it did give them an opening to raise this issue and argue that, in fact, he is elitist. And Democrats, if they wish to get away from this, they have to adopt - I think it's a little bit unfair to the remark once you look at it in context.

But nevertheless, the perception was there particularly, I think the stuff about guns and about religion. I mean, can't you, like, own a gun and go to church and not be clinging to it? Because you know, your economic way of life is deteriorating. Again, I don't think that's what he meant. But that's how it's being interpreted. And that's where the discussion is.

Listen to the entire interview »

Cities across America are undergoing massive demographic change, and Philadelphia is no exception. Understanding this change, and effectively managing it, will be key to our national progress and prosperity in this decade and beyond.

A new report from the Brookings Institution, "The State of Metropolitan America," describes a nation that has grown larger, more diverse, more suburban, and more educated in the first decade of this century. These characteristics offer the potential for a tremendous advantage among industrialized nations as the global economy becomes more integrated and more competitive.

The Philadelphia region, for instance, is now home to 92 colleges and universities - more than the renowned concentration of higher education institutions in the Boston area. In our research on the demographic transformation of the nation, we refer to Philadelphia as a "skilled anchor" - one of 19 metro areas, including Baltimore, Rochester, N.Y., and Boston, that have made a transition from manufacturing and shipping to service-based economies. Medical and educational institutions have often driven this transformation, along with specialized manufacturing.

Skilled anchors face challenges, however, due to other trends. While 32 percent of Philadelphia area residents over the age of 25 hold bachelor's degrees, only 21 percent of residents of the city itself have been educated beyond high school.

That is cause for concern, especially as baby boomers begin to retire - most notably in the suburbs, where more than 40 percent of the residents are boomers and seniors. The young people who will take their place in the workforce are not completing college education at the same rate as their predecessors. This is problematic considering that median household income declined during the 2000s, and higher education is closely correlated with higher wages.

Meeting the region's future workforce challenges - that is, connecting residents to high-quality jobs in the education, medicine, life-sciences, and pharmaceutical sectors - will require education policies that prepare all children for successful postsecondary education, so they can build on the economic momentum of the retiring baby boomers.

As part of the national Achieving the Dream Initiative, several foundations are working together to help community colleges in Michigan, Ohio, and Indiana improve completion rates for minority and low-income students who are most at risk of dropping out and not getting the skills and credentials they need to succeed in the workforce.

Other demographic trends represent challenges as well as opportunities. The Philadelphia region's foreign-born population grew by 30 percent in the 2000s, albeit from a relatively small base. Efforts to incorporate immigrants into the mainstream of economic and civic life - such as Philadelphia's language-access policy, its one-stop education office, and the region's emerging Metropolitan Caucus - are all praiseworthy. But more is required.

At the same time, while solutions must be built from the ground up, the Philadelphia region can't go it alone. The federal government can't wait for megacities such as Philadelphia to work out the massive transformation under way by themselves. There are macro-level federal responses to these trends that could and should emanate from Washington.

Among them are comprehensive immigration reform that includes explicit means for improving the integration of new Americans into our society and economy; a revamping of transportation and housing policy that reduces energy-inefficient sprawl, accommodates seniors, and provides access to employment centers; programs to increase postsecondary education for our emerging workforce; and a redoubling of efforts to make work pay for working families, such as the Earned Income Tax Credit.

Over the past decade, between two recessions, Philadelphia has made much progress. Today, the region must capitalize on its hard-earned gains and address emerging challenges with similar conviction.

This week will bring a cornucopia of new data, an econo-nerd's dream. Unfortunately for some of us nerds, there won't be any releases on state and local government finances. (The Census Bureau generally has to wait for all states to report and, as you can imagine, some states are laggards.)

However, there will still be a lot in this week's numbers for those who follow state and local government finances, pay into state and local coffers, or consume predominantly state and local public services like education, roads, and health care. Here are a few trends worth watching:

First, Tuesday's March S&P/Case Shiller house price indexes will be important for states whose fortunes are tied to real estate, especially in the West and Southwest. Macroeconomic forecasters are predicting home prices will decline slightly compared to one year ago but continue to increase month-to-month, suggesting that perhaps the market has hit bottom.

That would be good news for the housing sector. However, research from Federal Reserve Board economists Byron Lutz, Raven Molloy, and Hui Shan suggests that any boon to state and local revenues would be minor. They calculate the housing bust per se generated only a $22 billion drop in taxes over three years, equivalent to roughly 3 percent of annual state and local revenues excluding federal funds.

Meanwhile, the latest Census data suggest that state taxes are growing, but at a pace that is slower than usual. More worrisome, the pace appears to be moderating. In recent weeks, California, New York, New Jersey, Pennsylvania, and Rhode Island have all reported taxes coming in below projections. Also, local property taxes are likely to remain in the doldrums for some time. They tend to respond to house price changes with a delay and thus just started showing the effects of the housing bust in late 2010. Property taxes recently turned positive again, but these gains are anemic by historical standards and likely caused by rate hikes in some jurisdictions rather than improving property values.

Next up this week are Bureau of Economic Analysis revisions to first quarter GDP. Macroeconomists will be attuned to how the revisions compare to advance estimates and what this portends for the recovery. They might also take note of whether these governments are detracting from growth - as they have done by an average of 0.2 percentage points in each quarter since 2008 - or contributing to it as usual. State and local watchers will be more focused on state and local spending, which unlike previous downturns, has declined in real per capita terms and not yet recovered.

That leads us to the biggest number to watch this week - Friday's jobs report. State and local employment is already down by 665,000 jobs or about 3.5 percent from its pre-recession peak. Recent trends suggest that cuts may be abating, but this total masks differences across subsectors - state education has been adding jobs while losses continue in all other subsectors, especially at the local level.

Ongoing state and local job losses also distinguish this recession from previous downturns in the modern era. This may be in keeping with the depths of this Great Recession. However, it's hard to imagine state and local residents aren't feeling the pinch of higher property tax burdens or lower services. To take one example, Governor Jerry Brown has proposed closing California's $16 billion budget gap by converting state employees to a four day work week and closing state parks. From a macro perspective, the fiscal tightening may be over. But that doesn't mean state and local governments aren't still a real drag.

In July 2013, the World Bank decided to phase-out lending for new coal-fired power plants in middle-income countries, except in rare circumstances where no financially feasible alternatives to coal exist. This decision was made for a combination of reasons including concerns about local air pollution and global climate change, as well as evidence that these projects have little trouble attracting private capital without World Bank involvement. Now, policymakers are considering whether the World Bank’s policy should also cover projects designed to retrofit existing coal-fired power plants in middle-income countries by adding scrubbers and other technologies that increase efficiency and reduce air pollution. 

There are several fundamental questions underlying this debate: Is financing coal power plant retrofits a good use of World Bank resources? If so, should the World Bank insist on the use of best available technologies when it finances these retrofits? These questions are vitally important, as retrofit technologies are designed to minimize toxic air pollutants, including soot and smog, which are both dangerous for human health and the world’s climate. Older coal plants without retrofit technologies are less efficient, and emit more pollutants per unit of coal burned than those with retrofits applied. Evidence shows that soot and smog can cause respiratory illness and asthma, especially in children and elderly people, and can diminish local agricultural production by reducing sunlight. Furthermore, in many countries coal plants are the single largest source of carbon dioxide emissions driving climate change. 

To help inform the policy debate, this analysis surveys the technologies in use in more than 2,000 coal-fired power plants currently in operation, under construction, or planned in middle-income countries. The findings reveal that roughly 70 percent of these power plants rely on old, inefficient technologies. Retrofitting these plants would reduce pollution, increase efficiency and save lives. In middle-income countries that do not mandate coal retrofits, the World Bank could play a helpful role in financing those improvements, particularly as part of broader policy reforms designed to reduce climate pollution and increase efficiency across the power sector.

Importantly, however, the data also show that important qualifications should be made. First, because coal is a major source of greenhouse gas emissions and retrofits are likely to keep coal plants operating longer, the World Bank should insist that retrofit projects occur within a context of national and local policy reforms designed to abate greenhouse gas pollution. Toward this end, the World Bank should continue to help countries build capacity to adopt and enforce climate pollution controls and other offsetting actions and policies. Second, the World Bank should insist that projects it finances use best available pollution control technologies. Already, the substantial majority of coal retrofits completed to date in middle-income countries have used best available technologies. These retrofits were almost universally financed exclusively by private capital. The World Bank should not use its capital to support inferior retrofit technologies that are below the standards already adopted by the private sector in middle-income countries.

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In the developing world, more than 200 million children under the age of five years are at risk of not reaching their full development potential because they suffer from the negative consequences of poverty, nutritional deficiencies and inadequate learning opportunities. Overall, 165 million children (one in four) are stunted, and 90 percent of these children live in Africa and Asia. And though some progress has been made globally, child malnutrition remains a serious public health problem with enormous human and economic costs. Worldwide, only about 50 percent of children are enrolled in preprimary education, and in low-income countries a mere 17 percent. And though more and more children are going to school, millions have little to show for it. By some accounts, 250 million children of primary school age cannot read even part of a sentence. Some of these children have never been to school (58 million); but more often, they perform poorly despite having spent several years in school, which reflects not only the poor quality of many schools but also the multiple disadvantages that characterize their early life.

Ensuring that all children—regardless of their place of birth and parental income or education level—have access to opportunities that will allow them to reach their full potential requires investing early in their development. To develop their cognitive, linguistic, socioemotional and physical skills and abilities, children need good nutrition and health, opportunities for play, nurture and learning with caregivers, early stimulation and protection from violence and neglect.

The Case for Early Interventions 

The arguments for investing in children early are simple and convincing. Early investment makes sense scientifically. The brain is almost fully developed by age three, providing a prime opportunity to achieve high gains. We know that the rapid rate of development of the brain’s neural pathways is responsible for an individual’s cognitive, social and emotional development, and there is solid evidence that nutrition and stimulation during the first 1,000 days of life are linked to brain development. 

Early investment makes sense in terms of equity. The playing field has the highest chances of being leveled early on, and we know that programs have a higher impact for young children from poorer families. In the United States, for example, increasing preschool enrollment to 100 percent for low-income children would reduce disparities in school readiness by 24 percent between black and white children and by 35 percent between Hispanic and white children. We also know that equalizing initial endowments through early childhood development (ECD) programs is far more cost-effective than compensating for differences in outcomes later in life. 

Early investment makes sense economically. Investing early prevents higher costs down the road, and interventions yield a high return on investment. There is evidence of the benefits for the individual and for society more broadly. For instance, at the level of the individual, in Jamaica children participating in an early childhood stimulation program were found to have 25 percent higher earnings 20 years later compared with children who did not participate. At the economy-wide level, eliminating malnutrition is estimated to increase gross domestic product by 1 to 2 percentage points annually, while countries with school systems that have a 10-percentage-point advantage in the proportion of students

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The Girls’ Education Imperative

In 1948, the world’s nations came together and agreed that “everyone has a right to education,” boys and girls and rich and poor alike. This vision set forth in the Universal Declaration of Human Rights has been reinforced over the decades and today the girls who still fight to be educated are not cases for charity but actively pursuing what is rightfully theirs. In recent years, girls’ education has also received attention because, in the words of the United Nations, “education is not only a right but a passport to human development.” Evidence has been mounting on the pivotal role that educating a girl or a woman plays in improving health, social, and economic outcomes, not only for herself but her children, family, and community. Educating girls helps improve health: one study published in The Lancet, the world’s leading medical journal, found that increasing girls’ education was responsible for more than half of the reduction in child mortality between 1970 and 2009. The economic benefits are clear: former chief economist at the World Bank and United States Secretary of the Treasury Lawrence Summers concluded that girls’ education “may well be the highest-return investment available in the developing world” due to the benefits women, their families and societies reap. And because women make up a large share of the world’s farmers, improvements in girls’ education also lead to increased agricultural output and productivity.

Progress in Girls’ Education

Given the importance of girls’ education, for girls’ own dignity and rights and for a broad sweep of development outcomes, it is no surprise that global agendas have focused heavily on it. For more than two decades, girls’ education has been recognized as a global priority and incorporated into development targets, which has rallied governments, nongovernmental organizations (NGOs), foundations and international organizations. From the 1990 Education for All (EFA) Goals to the 1995 Fourth World Conference on Women in Beijing and to the 2000 Millennium Development Goals (MDGs), girls’ education has been a priority, particularly in international development communities. Perhaps the most influential of these has been the MDGs, which reinforce parts of the EFA goals by focusing two of their eight goals on education, namely on achieving universal primary education and achieving gender parity in both primary and secondary school.

Progress in enrolling children, especially girls, into primary school is seen by many as a development success story. Indeed there is much to celebrate. Since 1990, the number of girls in low-income countries enrolling in primary school has increased two-and-a-half times, from 23.6 million to nearly 63 million in 2012. This has translated into a large increase in the girl-boy ratio in low-income countries, from 82 to 95 girls per 100 boys in primary school. For low- and lower-middle-income countries combined, the number of girls enrolled reached over 200 million girls in 2012, an almost 80 percent increase, and globally two-thirds of countries have near-equal numbers of boys and girls enrolled at the primary level. 

In 1990, in South and West Asia, there were only 74 girls enrolled in primary school for every 100 boys, but by 2012 the region had achieved equal numbers of boys and girls in school.

This progress was largely made by the leadership of developing country governments that prioritized expansion of primary schooling opportunities and by the global community’s support of governments focused on reaching the MDGs. Some of the biggest gains have been in regions struggling the most. In 1990, in South and West Asia, there were only 74 girls enrolled in primary school for every 100 boys, but by 2012 the region had achieved equal numbers of boys and girls in school. Similarly, sub-Saharan Africa, which had the lowest levels of girls in school in 1990, has experienced marked improvement, with the girl-boy ratio increasing from 83 to 92 girls per 100 boys in primary school.

The focus on getting girls into school has helped close gender gaps in relation to other factors too, such as wealth and location of residence. The fact that family income and urban or rural locality are now the most likely indicators of school enrollment is a big victory for girls’ education. The World Inequality Database on Education (WIDE) shows that in India, for example, 38 percent of girls and 25 percent of boys of primary school age were not in school in 1992. By 2005, that gap had narrowed to 24 percent of girls and 22 percent of boys. However, today the gap between the richest and poorest children’s attendance is much starker—37 percent of children from the poorest 20 percent of families versus just 11 percent of the richest 20 percent are out of school. And in many areas, girls actually outpace boys, especially at higher levels of education. In one third of countries, there are now more girls than boys enrolled in secondary school. Also, girls often do better once in school, with boys making up 75 percent of grade-repeaters in primary school.

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

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

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

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

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

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

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

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

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

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

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

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

This presentation by Alan Berube to the Cleveland EITC Forum explains how boosting low-income families' participation in tax credits can help put the city's workers, neighborhoods, and the local economy itself on more solid financial ground.

The metro program hosts and participates in a variety of public forums. To view a complete list of these events, please visit the metro program's Speeches and Events page which provides copies of major speeches, powerpoint presentations, event transcripts, and event summaries.

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Should increasing exports be part of the solution to Greater Cleveland's -- and the nation's -- economic doldrums? Can export growth make this recovery job-filled rather than jobless?

That's a counterintuitive proposition, but one that is gaining traction in Northeast Ohio. Cleveland, Youngstown and other metros often see themselves on the losing end of globalization, as manufacturing has moved abroad and trade barriers and currency manipulations impede the entry of U.S.-made goods into foreign markets.

But exports bring tremendous benefits to workers, companies and the nation as a whole. Exporting companies tend to be more innovative. They pay higher wages across all skill levels. And they are a response to a new global reality: 95 percent of the world's customers live outside the United States.

Any successful export strategy, including the one that the Obama administration is developing, must start with where U.S. exports come from. Our major metropolitan areas are the nation's export hubs. In 2008, they produced about 64 percent of U.S. exports, including more than 62 percent of manufactured goods and 75 percent of services.

Northeast Ohio's major metros are leaders in exports, oriented toward global consumers in a way that most American regions are not. Exports contribute more than 12 percent of the gross metropolitan product in Akron, 13 percent in Cleveland, and a jaw-dropping 18 percent in Youngstown, compared to a national metro average of 10.9 percent.

Exports are also a source of much-needed jobs in these metros. As of 2008 (the most recent year for which we have data) there were 110,000 export jobs in the Cleveland metro and about 30,000 each in greater Akron and Youngstown. Every $1 billion in exports from the average metropolitan area in 2008 supported 5,800 jobs.

To leverage the powerful export activity already occurring in Cleveland and elsewhere, the Obama administration should connect its macroeconomic vision for export growth with the metro reality where the doubling will mostly occur.

For example, the president's export advisory council should include state and local leaders, and revamp export guidance and support to meet the needs of small firms, which find it hard to enter new markets.

But Northeast Ohio metros have their own work to do. The rate of export growth between 2003 and 2008 in Cleveland and Akron is lackluster when compared to the large metro average. U.S. companies dominate the global market in service exports, and the nation actually has a generous service trade surplus, but service exports' share of overall output in Northeast Ohio metros is smaller than the large metro average, and growth in service exports is slower.

Most troubling, Cleveland and its neighbors are underperforming when it comes to innovation, which is a critical ingredient for future international success. Metros that are manufacturing-oriented or export-intensive (or both) tend to create patents at a rate of just over five patents per 1,000 workers. But Cleveland, Akron and Youngstown fall short, with 2.8, 4.5, and 1 patent per 1,000 workers, respectively.

Northeast Ohio must accelerate its efforts to increase the region's innovation and export capacity, through regional organizations such as NorTech and JumpStart. Just as the president set an export goal for the nation, Northeast Ohio should embrace the opportunity to set its own aggressive export goals. Business groups, the Fund for Our Economic Future, universities and regional economic development organizations have made a start but need to devote more resources and collaborate to achieve those goals.

The region can make this happen. Organizations like the Manufacturing and Advocacy and Growth Network (MAGNET) and its partners, with support from the Fund and chambers, are working directly with companies to increase manufacturing innovation in Northeast Ohio, with increasing exports one of their major emphases.

The eighth and final Strategic and Economic Dialogue (S&ED) of the Obama administration will take place in Beijing next week. On the economic side, it will be difficult this year to make progress on specific outcomes; but it’s an important year for having a frank conversation about macroeconomic and financial policies.

One reason that it will be hard to get specific outcomes is that the Chinese leadership has shown that economic reform doesn’t rank very high on its list of priorities. After laying out an ambitious reform agenda in its Third Plenum resolution in 2013, implementation of reform has been slow, except in some aspects of financial reform. Recent speeches have emphasized the need to close zombie firms and clean up non-performing loans in the banking system, but specific plans have been modest. 

In terms of the agenda between China and the United States, the most important issue is negotiating a Bilateral Investment Treaty (BIT). Many important sectors are still closed to inward direct investment in China. It would help China’s transition to a new growth model to open up these sectors to competition and to private investment, and a BIT is a smart way to commit to these reforms. However, China has been slow to produce a credible offer on the BIT because enterprises and ministries with vested interests have opposed opening up and the leadership is apparently not willing to take them on.

Another factor affecting this S&ED is that it is the last for the Obama administration. I would argue that this is a good time for China and the United States to demonstrate that regular, high-level exchange produces results, increasing the likelihood that whatever administration comes next will want to maintain something similar. However, it is more likely that Chinese leaders will want to wait and see what administration they will be dealing with and to save deliverables for those future negotiations.

S&ED is an opportunity for the top economic officials in the two countries to frankly discuss their policy choices and to avoid mistakes that can come from miscommunication.

My experience with the first four S&EDs was that the conversation was more important than the deliverables, which have often been modest, incremental steps. This year, China will be very interested in hearing what the Federal Reserve thinks. May labor market data will be published on June 3, just in advance of the S&ED, so there may be more clarity about when the Fed is likely to raise interest rates. Regardless of when the Fed moves, both China and the United States have an interest in seeing a relatively stable exchange rate for the yuan. China’s central bank officials have emphasized that the country still has a large current account surplus, so depreciation of the trade-weighted exchange rate is not warranted. Depreciation would exacerbate imbalances and would work against the transformation of China’s growth model because it favors industry at the expense of services. 

But if the Fed continues to normalize interest rates and the dollar rises against other major currencies, China does not want to follow the dollar up. Hence, its emphasis on stable value of the currency relative to a basket. S&ED is an opportunity for the top economic officials in the two countries to frankly discuss their policy choices and to avoid mistakes that can come from miscommunication. The most important outcome of the S&ED may well be avoidance of policy mistakes, a subtle outcome that will not be reflected in headlines. 

China has provided foreign assistance since the 1950s, and is now the largest developing country to provide aid outside of the Development Assistance Committee (DAC), a forum of the world’s major donor countries under the Organization for Economic Cooperation and Development (OECD). Like its foreign policy more broadly, Chinese foreign assistance has adhered to the “Five Principles of Peaceful Coexistence” and emphasized the virtue of national self-reliance. At the same time, it has served a strategic purpose alongside other foreign policy priorities.

A slow start but a steady increase

Compared to top DAC donor countries, the scale of China’s foreign assistance is still relatively small. According to some estimates and OECD International Development Statistics, China’s gross foreign aid in 2001 was extremely limited, amounting to only about 1.8 percent of the total contribution by DAC donors. However, since launching its “Go Global” strategy in 2005, China has deepened its financial engagement with the world, and its foreign aid totals have grown at an average rate of 21.8 percent annually. In 2013, China contributed about 3.9 percent to total global development assistance, which is 6.6 percent of the total contribution by DAC countries and over 26 percent of total U.S. foreign aid. 

Millions of USD (Current)

Gross foreign aid provided by China versus major DAC donors

And the lion’s share goes to: Africa

Africa is one of China’s most emphasized areas of strategic engagement. Particularly since the establishment of the Forum on China-Africa Cooperation (FOCAC) in 2000, the relationship between China and Africa has gotten closer and closer. In 2009, African countries received 47 percent of China’s total foreign assistance. Between 2000 and 2012, China funded 1,666 official assistance projects in 51 African countries (the four countries that don’t have diplomatic relations with China—Gambia, Swaziland, Burkina Faso, and São Tomé and Príncipe—were left out), which accounted for 69 percent of all Chinese public and private projects. Among the 1,666 official projects, 1,110 qualified as Official Development Assistance (ODA)—defined by the OECD as flows of concessional, official financing administered to promote the economic development and welfare of developing countries. The remaining 556 projects could be categorized, also according to the OECD, as Other Official Flow (OOF)—transactions by the state sector that are not “development-motivated” or concessional (such as export credits, official sector equity and portfolio investment, and debt reorganization). (Note: in terms of dollar amounts, not included in the statistics here, most Chinese lending to Africa and other parts of the developing world is not concessional and is therefore not foreign aid.)

Zeroing in on infrastructure

About 61 percent of Chinese concessional loans to Africa are used for infrastructure construction, and 16 percent are for industrial development. The three areas that receive the largest allocations of Chinese concessional loans are transport and storage; energy generation and supply; and industry, mining, and construction. A small portion of the remaining allocations go to health, general budget support, and education. 

Some have interpreted these trends to mean that China is making an effort to export domestic excess capacity in manufacturing and infrastructure, especially considering the uncertainties of China’s economic transition. But the motivations are broader than that. China’s “Africa Policy”—issued in December 2015, in Johannesburg—clearly expresses the Chinese government’s belief that infrastructure construction is a crucial channel for African development. This notion could be connected to the domestic Chinese experience of having benefited from the technological diffusion of foreign aid and foreign direct investment in the construction sector. Moreover, in practice, China’s more than 20 years of experience in implementing international contract projects, as well as advanced engineering technologies and relatively low labor costs, have proved to be a comparative advantage in Chinese foreign assistance. In addition, by prioritizing the principles of non-interference and mutual benefit, China is more comfortable providing infrastructure packages (e.g., turn-key projects) than many other countries. 

Doing assistance better

Legitimate concerns have been raised about China’s tendency to facilitate authoritarianism and corruption, as well that its assistance does not always trickle down to the poor. As such, the state-to-state Chinese approach to providing assistance should be reformed. Globalization scholar Faranak Miraftab indicates that on-the-ground partnerships between communities and the private sector—mediated by the public sector—could achieve synergies to overcome certain shortcomings, creating a win-win situation. With deeper involvement by domestic assistance providers, Chinese foreign assistance could touch more people’s lives by tackling both the short- and long-term needs of the most under-resourced parts of civil society. Domestic assistance providers should exploring public-private partnerships, which among other benefits could yield increased foreign assistance services. By focusing on its comparative advantage in contributing to infrastructure projects that benefit the general public while also facilitating participation from civil society, Chinese foreign assistance could bring more concrete benefits to more individuals. 

China has already begun tackling these and other weaknesses. Although infrastructure and industry still account for the largest share of total official projects in Africa, China has intentionally strengthened its official development finance efforts in areas related to civil society. Projects have surged in the areas of social infrastructure and services, developmental food aid and food security, support to non-governmental organizations, and women in development, to name a few. Moreover, following President Xi Jinping’s promise at the United Nations summit in September 2015, an initial $2 billion has been committed as a down payment toward the China South-South Cooperation and Assistance Fund. The funding is primarily designed to improve the livelihoods of residents of recipient countries and diversify domestic aid providers (e.g., NGOs) qualified to participate or initiate assistance projects in the least-developed countries. 

In order to achieve positive results, it is critical for the Chinese government to carry out detailed management initiatives to engage civil society: for example, establishing a complete system for information reporting and disclosure (actions have already been taken in several ministries and bureaus), publishing guidelines for the private sector to develop assistance services overseas, and improving coordination and accountability among ministries and within the Ministry of Commerce. Although challenges still remain, Chinese foreign assistance is moving in a positive direction without abandoning its defining characteristics.