Introduction

President Obama has proposed expanding the Peace Corps and building a global network of volunteers, “so that Americans work side-by-side with volunteers from other countries.” Achieving this goal will require building on the success of the Peace Corps with a new combination of public and private initiatives designed to expand opportunities for volunteers to address critical global problems such as poverty, contagious diseases, climate change, and conflict.

We examine alternative service models, both domestic and foreign, and offer recommendations to the Obama Administration for harnessing the energy and skills of Americans eager to engage in volunteer work in foreign countries as part of a multilateral mobilization effort and smart power diplomacy.

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President Barack Obama’s visit to the George Herbert Walker Bush Library in College Station, Texas this week highlights the crucial role of America’s volunteer traditions in addressing critical issues at home and abroad. The two presidents will commemorate the 20^th anniversary of the Points of Light movement, championed by the 41^st president, and advance the United We Serve initiative of President Obama.

Michelle Nunn, CEO of Points of Light Institute and daughter of former Democratic Senator Sam Nunn noted in Huffington Post that “demand, idealism and presidential impact are leading American volunteerism to its…most important stage – the movement of service to a central role in our nation’s priorities.”

The bipartisan nature of America’s vibrant service movement is also reflected in the landmark Kennedy-Hatch Serve America Act signed into law by President Obama earlier this year and pending Global Service Fellowship legislation introduced by Senators Feingold and Voinovich.

In a recent Brookings Global Views policy brief, “International Volunteer Service: A Smart Way to Build Bridges,” Lex Rieffel, Kevin Quigley and I articulate policy options for the new administration to advance President Obama’s call for engaging service on the global level. President Obama’s speech in Cairo on June 4 called for turning “dialogue into interfaith service, so bridges between peoples lead to action – whether it is combating Malaria in Africa, or providing relief for a natural disaster.”

Following the president’s Cairo speech, the administration assembled a laudable Global Engagement Initiative across the administration to implement and track results in scaling up initiatives of service and interfaith action. The potency of coupling American service with foreign assistance was documented in Indonesia and Bangladesh through successive Terror Free Tomorrow polls showing increased favorable ratings for our nation and decreased support for terrorism.

The Building Bridges Coalition has organized an impressive array of over 210 organizations dedicated to expanding American volunteerism internationally, as part of a new “Service World” policy coalition gearing up for the 50^th anniversary of the Peace Corps. This new “international service 2.0” incorporates NGOs and faith-based groups, universities and corporations as new development actors advocating multilateral service and achieving impacts on issues ranging from Malaria to peacebuilding and climate change.

A Foundation Strategy Group report commissioned by Brookings and Pfizer, “Volunteering for Impact” assessed best practices in the increasing array of international corporations engaging volunteers such as IBM’s Corporate Service Corps, GE Volunteers and Pfizer’s Global Health Fellows.

Around the globe, initiatives such as Cross Cultural Solutions and an emerging global service and peacebuilding alliance in hot spots from Kenya to Mindanao are giving substance to the president’s call in Cairo. The collaboration of Presidents Clinton and G.H.W. Bush on humanitarian assistance after the tsunami, and this week’s service dedication with the Obama administration and former President Bush, bode well for the bipartisan extension of our nation’s noble voluntary service traditions in the international context where they are urgently needed.

International volunteer service is defined as an organized period of engagement and contribution to society by individuals who volunteer across an international border. There is growing interest in the potential of international service to foster international understanding between peoples and nations and to promote global citizenship and intercultural cooperation. Studies suggest that international service develops skills, mindsets, behaviors and networks that prepare volunteers for living and working in a knowledge-based global economy. Many believe that even short-term experiences abroad can begin to prepare participants for longer-term engagement and future international service.

International service may be growing in prevalence worldwide. In the United States, more than one million Americans reported volunteering abroad in 2008. Despite the scale of international service, its impacts are not well understood. Although there is a growing body of descriptive evidence about the various models and intended outcomes of international service, the overwhelming majority of research is based on case and cross-sectional studies, which do not permit conclusions about the impacts of international service. Scholars and practitioners in the field have called for rigorous research that documents impacts.

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President Obama’s emphasis on “smart power” diplomacy has thrust the need for international volunteer service into the global spotlight. On June 23, Global Economy and Development at Brookings and Washington University’s Center for Social Development (CSD) will host a forum examining how international volunteer service can address multiple global challenges simultaneously and build international cooperation. The forum will frame international service as an effective tool for increasing international social capital as well as building sustainable cross-cultural bridges.

This event begins with an address by service champion, Ambassador Elizabeth Frawley Bagley, who leads the Department of State’s Global Partnerships Initiative. Bagley is well poised to foster innovative public-private partnerships, an approach she describes as “Ubuntu Diplomacy: where all sectors belong as partners, where we all participate as stakeholders, and where we all succeed together, not incrementally but exponentially.” The need for multilateral approaches to development has been analyzed by Brookings scholars Jane Nelson and Noam Unger, who explore how the U.S. foreign assistance system works in the new market-oriented and locally-driven global development arena.

This spirit of cross-sector collaboration will carry the June 23^rd forum, beginning with a research panel releasing beneficiary outcome data from a Peace Corps survey completed with over 800 host country nationals, including community members, direct beneficiaries, and collaborators. Peace Corps colleagues, Dr. Susan Jenkins and Janet Kerley, will present preliminary findings from this multi-year study measuring the achievement of “helping the people of interested countries in meeting their need for trained men and women” and “promoting a better understanding of Americans on the part of the peoples served”. Aggregate data about respondents’ views of Americans before and after their interaction with the Peace Corps will be discussed.

This work complements the release of new data on the impact of international service on volunteers, which is supported with funding from the Ford Foundation and a joint Brookings-Washington University academic venture capital fund. Washington University’s CSD has studied international service over the last decade. The current research, first in a series from the quasi-experimental study, compares international volunteers’ perceived outcomes to a matched group who did not volunteer internationally: volunteers are more likely to report increased international awareness, international social capital, and international career intentions.

Building on the demonstrated potential of international service, policymakers and sector leaders will then discuss options for enhancing international service, and provide recommendations for bringing international service to the forefront of American foreign policy initiatives. This policy plenary will introduce and discuss the Service World policy platform: a collaborative movement led by the Building Bridges Coalition, National Peace Corps Association and the International Volunteering Initiative at Brookings. This powerhouse of sector leaders aims to scale international service to the levels of domestic volunteer service with increased impact through smart power policy proposals. What Service Nation did to unite Americans around domestic service as a core ideal and problem-solving strategy in American society, Service World hopes to do on a global scale.

Next week in New York City, the Points of Light Institute and the Corporation for National and Community Service will convene to further spotlight the Service World Platform at the 2010 National Conference on Volunteering and Service. This event will bring together more than 5,000 volunteer service leaders and social entrepreneurs from around the world, including local host Mayor Bloomberg. Michelle Nunn, CEO of Points of Light Institute noted in Huffington Post that “demand, idealism and presidential impact are leading American volunteerism to its…most important stage – the movement of service to a central role in our nation’s priorities.”

Nunn’s statement illustrates the momentum and power that make the voluntary sector a unique instrument in the “smart power” toolbox. According to successive polling from Terror Free Tomorrow, American assistance, particularly medical service, is a leading factor in favorable opinions toward the United States. A 2006 survey conducted in Indonesia and Bangladesh showed a 63 percent favorable response among Indonesian respondents to the humanitarian medical mission of “Mercy,” a United States’ Navel Ship, and a 95 percent favorable response among Bangladeshi respondents.

Personifying the diplomatic potential of medical service abroad is Edward O’Neil’s work with OmniMed. In the Mukono District of Uganda, OmniMed has partnered with the U.S. Peace Corps and the Ugandan Ministry of Health as well as local community-based organizations to implement evidence-based health trainings with local village health workers. Dr. O’Neil is now working with Brookings International Volunteering Initiative and Washington University’s CSD on a new wave of rigorous research: a randomized, prospective clinical trial measuring the direct impact of over 400 trained village health workers on the health of tens of thousands of villagers. 

In the words of Peace Corps architect and former U.S. Senator Harris Wofford, the pairing of new data and policy proposals on June 23^rd will support a “quantum leap” in the scale and impact of international service, advancing bipartisan calls to service from President Kennedy to Bush 41, Bush 43, Clinton and Obama.

Event Information

On June 23, Global Economy and Development at Brookings and Washington University’s Center for Social Development hosted a forum to examine how international volunteering and service serve as critical tools for meeting global challenges.

The forum framed international service as an integral component of “smart power” diplomacy and as a cost effective way to build cross-cultural bridges. Ambassador Elizabeth Frawley Bagley, special representative for global partnerships at the U.S. Department of State, delivered a keynote address on how the United States can better promote international service and its impact on American diplomacy, national security and global economies.

The research panel released new data on the impact of international service on volunteers, host communities and host country perceptions of volunteers from the United States. Policymakers and sector leaders discussed options for enhancing international service, and provided recommendations for bringing global service to the forefront of American foreign policy initiatives.

View the keynote speech by Ambassador Bagley »

Video

• Global Development's National Responsibility
• Emphasize Core Competencies in Volunteering
• Shared Global Responses to Shared Global Problems
• Young People Want To Make World Better Place
• Data Are Important to Enhancing Volunteerism

Audio

• International Volunteering and Service
• International Volunteering and Service
• International Volunteering and Service
• International Volunteering and Service

Transcript

• Full Uncorrected Transcript (.pdf)
• Welcoming Remarks, Opening Remarks and Keynote - Transcript (.pdf)
• Panel One - Transcript (.pdf)
• Panel Two - Transcript (.pdf)
• Closing Remarks - Transcript (.pdf)

Event Materials

• 20100623_volunteering
• 20100623_volunteering_intro
• 20100623_volunteering_panel1
• 20100623_volunteering_panel2
• 20100623_volunteering_closing_remarks

INTRODUCTION

In December 2011, the United Nations State of the World’s Volunteering Report was released at the U.N. headquarters in New York along with a General Assembly resolution championing the role of volunteer action in peacebuilding and development. The United Nations Volunteers (UNV) Program report states that:

The contribution of volunteerism to development is particularly striking in the context of sustainable livelihoods and value-based notions of wellbeing. Contrary to common perceptions, the income poor are as likely to volunteer as those who are not poor. In doing so, they realize their assets, which include knowledge, skills and social networks, for the benefit of themselves, their families and their communities…Moreover, volunteering can reduce the social exclusion that is often the result of poverty, marginalization and other forms of inequality…There is mounting evidence that volunteer engagement promotes the civic values and social cohesion which mitigate violent conflict at all stages and that it even fosters reconciliation in post-conflict situations...

The “South Africa Conference on Volunteer Action for Development” convened in Johannesburg in October 2011, and the July 2012 “Africa Conference on Volunteer Action for Peace and Development” co-hosted with the Kenya’s Ministry of East African Community, the United Nations and partners in Nairobi give further evidence to the rise of and potential for volunteer service to impact development and conflict. Indeed, in the aftermath of the 2011 Arab Spring, youth volunteer service and empowerment have emerged as a pivotal idea in deliberations aimed at fostering greater regional cohesion and development.

In “Foresight Africa: Top Priorities for the Continent in 2012,” Mwangi S. Kimenyi and Stephen N. Karingi note that: “One of the most important pillars in determining whether the positive prospects for Africa will be realized is success in regional integration… This year is a crucial one for Africa’s regional integration project and actions by governments, regional organizations and the international community will be critical in determining the course of the continent’s development for many years to come.”

The authors note the expected completion of a tripartite regional free trade agreement by 2014 and the expected boost to intra-African trade, resulting in an expanded market of 26 African countries (representing more than half of the region’s economic output and population). At the same time, the declaration from the “South Africa Conference on Volunteer Action for Development” calls on “Governments of Southern African member states and other stakeholders to incorporate volunteering in their deliberations from Rio +20 and to recognize the transformational power as well as economic and social value of volunteering in achieving national development goals and regional priorities, which can be achieved by facilitating the creation of an enabling environment for volunteering to support, protect and empower volunteers.” This speaks directly to the urgent need to factor the social dimension into the regional integration agenda in the different African subregions.

This paper includes examples of the growth of volunteer service as a form of social capital that enhances cohesion and integration across three regions: southern, western, and eastern Africa. It further highlights civil society best practices and policy recommendations for increased volunteering in efforts to ensure positive peace, health, youth skills, assets and employment outcomes.

The importance of volunteering to development has been noted in recent United Nations consultations on the Rio+20 convening on sustainable development and the post-2015 development framework. As the U.N. reviews its Millennium Development Goals (MDG) process, Africa’s regional service initiatives offer vital lessons and strategies to further achieve the MDGs by December 2015, and to chart the way forward on the post-2015 development framework.

But how does volunteerism and civic service play out in sub-Saharan Africa? What are its institutional and non-institutional expressions? What are the benefits or impacts of volunteerism and civic service in society? Our specific purpose here is to provide evidence of the different manifestations and models of service, impact areas and range of issues in three African regions. In responding to these questions, this analysis incorporates data and observations from southern, western and eastern Africa.

In conclusion, we provide further collective insights and recommendations for the roles of the Africa Union and regional economic communities (RECs), youth, the international community, the private sector and civil society aimed at ensuring that volunteerism delivers on its promise and potential for impact on regional integration, youth development and peace.

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Event Information

The Building Bridges Coalition was launched at the Brookings Institution in June 2006 to promote the role of volunteer service in achieving development goals and to highlight research and policy issues across the field in the United States and abroad. Among other efforts, the coalition promotes innovation, scaling up, and best practices for international volunteers working in development.

On June 14, the Brookings Institution and the Building Bridges Coalition co-hosted a 10th anniversary forum on the role of volunteers in achieving the United Nation’s Sustainable Development Goals for 2030 and on the coalition’s impact research. General Stanley McChrystal was the keynote speaker and discussed initiatives to make a year of civilian service as much a part of growing up in America as going to high school.

Afterwards, three consecutive panels discussed how to provide a multi-stakeholder platform for the advancement of innovative U.S.-global alliances with nongovernmental organizations, faith-based entities, university consortia, and the private sector in conjunction with the launch of the global track of Service Year Alliance.

For more information on the forum and the Building Bridges Coalition, click here.

Video

• Welcoming remarks and featured speaker
• Panel 1 — Role of volunteer service in achieving the 2030 Sustainable Development Goals
• Panel 2 — Policy perspective: National and international service in the next administration
• Panel 3 — One million Americans in global service: The role of faith-based service

Audio

• International volunteer service and the 2030 development agenda

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20160614_volunteering_development_transcript

Dear Members of the Senate,

As you know, the Senate has debated the merits of the filibuster and related procedural rules for over two centuries. Recently, several senators who are advocating changes to Senate Rule XXII have renewed this discussion. We write this letter today to clarify some of the common historical and constitutional misperceptions about the filibuster and Rule XXII that all too often surface during debates about Senate rules.

First, many argue that senators have a constitutional right to extended debate. However, there is no explicit constitutional right to filibuster.^[1] In fact, there is ample evidence that the framers preferred majority rather than supermajority voting rules. The framers knew full well the difficulties posed by supermajority rules, given their experiences in the Confederation Congress under the Articles of Confederation (which required a supermajority vote to pass measures on the most important matters). A common result was stalemate; legislators frequently found themselves unable to muster support from a supermajority of the states for essential matters of governing. In the Constitution, the framers specified that supermajority votes would be necessary in seven, extraordinary situations -which they specifically listed (including overriding a presidential veto, expelling a member of the Senate, and ratifying a treaty). These, of course, are all voting requirements for passing measures, rather than rules for bringing debate to a close.

Second, although historical lore says that the filibuster was part of the original design of the Senate, there is no empirical basis for that view. There is no question that the framers intended the Senate to be a deliberative body. But they sought to achieve that goal through structural features of the chamber intended to facilitate deliberation -such as the Senate's smaller size, longer and staggered terms, and older members. There is no historical evidence that the framers anticipated that the Senate would adopt rules allowing for a filibuster. In fact, the first House and the first Senate had nearly identical rule books, both of which included a motion to move the previous question. The House converted that rule into a simple majority cloture rule early in its history. The Senate did not.

What happened to the Senate's previous question motion? In 1805, as presiding officer of the Senate, Vice President Aaron Burr recommended a pruning of the Senate's rules. He singled out the previous question motion as unnecessary (keeping in mind that the rule had not yet routinely been used in either chamber as a simple majority cloture motion). When senators met in 1806 to re-codify the rules, they deleted the previous question motion from the Senate rulebook. Senators did so not because they sought to create the opportunity to filibuster; they abandoned the motion as a matter of procedural housekeeping. Deletion of the motion took away one of the possible avenues for cutting off debate by majority vote, but did not constitute a deliberate choice to allow obstruction. The first documented filibusters did not occur until the 1830s, and for the next century they were rare (but often effective) occurrences in a chamber in which majorities generally reigned.

Finally, the adoption of Rule XXII in 1917 did not reflect a broad-based Senate preference for a supermajority cloture rule. At that time, a substantial portion of the majority party favored a simple majority rule. But many minority party members preferred a supermajority cloture rule, while others preferred no cloture rule at all. A bargain was struck: Opponents of reform promised not to block the rule change and proponents of reform promised not to push for a simple majority cloture rule. The two-thirds threshold, in other words, was the product of bargaining and compromise with the minority. As has been typical of the Senate's past episodes of procedural change, pragmatic politics largely shaped reform of the Senate's rules.

We hope this historical perspective on the origins of the filibuster and Rule XXII will be helpful to you as matters of reform are raised and debated. Please do not hesitate to contact us if we can provide additional clarification.

Very truly yours,

Sarah Binder
Senior Fellow, Governance Studies, The Brookings Institution
Professor of Political Science, George Washington University

Gregory Koger
Associate Professor of Political Science, University of Miami

Thomas E. Mann
W. Averell Harriman Chair & Senior Fellow, Governance Studies, The Brookings Institution

Norman Ornstein
Resident Scholar, American Enterprise Institute for Public Policy Research

Eric Schickler
Jeffrey & Ashley McDermott Endowed Chair & Professor of Political Science, University of California, Berkeley

Barbara Sinclair
Marvin Hoffenberg Professor of American Politics Emerita, University of California, Los Angeles

Steven S. Smith
Kate M. Gregg Distinguished Professor of Social Sciences & Professor of Political Science, Washington University

Gregory J. Wawro
Deputy Chair & Associate Professor of Political Science, Columbia University

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"We are now locked in a rolling filibuster on every issue, which is totally gridlocking the U.S. Senate. That is wrong. It is wrong for America."

Who said that? Democrat Harry Reid, majority leader of the Senate? Guess again. Try former Republican leader Trent Lott, bemoaning the troubled state of the Senate in the late 1990s.

No recent majority leader of either party has been saved the headache of trying to lead a Senate in which minorities can exploit the rules and stymie the chamber. This is not a new problem. Harry Reid may face a particularly unrestrained minority. But generations of Senate leaders from Henry Clay to Bill Frist have felt compelled to seek changes in Senate rules to make the chamber a more governable place.

Some things never change.

Twice this week, the Senate has opened debate with its party leaders engaged in a caustic battle over Reid's plans to seek changes to Senate rules in January.

Read the full piece at CNN.com »

As the clock runs out on the dysfunctional 112th Congress, few have been impressed by its paltry record and balky performance. But pardon my glee: December has been a great month for students of Congress. First, the House leadership was handed a blistering defeat on its “Plan B” to resolve the fiscal cliff. Next, while their leaders were meeting to negotiate an 11th hour of the 12th month fiscal cliff deal, eight senators unveiled a bipartisan proposal to head off a Democratic threat to change the rules by majority vote. When it rains, it pours!

The reform package—addressing “talking filibusters” and filibusters on procedural motions – deserves a bit more attention. And it deserves an appropriate historical illustration: To the right, a 1928 Chicago Tribune cartoon that features not the talking filibuster…but a sleeping one. Seems that talking filibusters might have been few and far between even back then.

Ezra Klein and Jon Bernstein have detailed the proposed changes and weighed in here and here, as has Steve Smith by tweet here and here. Since then, a coalition of nearly fifty liberal groups has rejected the proposal out of hand as watered down reform. To these several perspectives on the McCain-Levin plan, I would add the following thoughts:

First, these are at best incremental reforms. The majority leader would essentially gain the right to set the Senate’s agenda by majority vote, as a four-hour debate limit would be imposed on the motion to proceed. But the majority leader would pay a price for that new power: He would lose his power to block amendments (by “filling the tree”) and the minority bill manager and leader would be newly guaranteed an amendment each upon consideration of a legislative measure. (The majority leader, it seems, might still be able to fill the tree after the guaranteed amendments are dispensed with.) This change leaves untouched the sixty-vote threshold for invoking cloture on the measure or other amendments, similar to the plans of Democratic reformers. In short, the change tries to address the grievances of both the majority (by circumventing filibusters of the motion to proceed) and the minority (by creating and guaranteeing amendment opportunities).

Second, the incremental nature of the reforms is not accidental. Ezra has a point when he argues that this is “filibuster reform for people who don’t want to reform the filibuster.” Still, the incremental nature of the proposal strikes me as the price of negotiating procedural change in a legislative body whose rules already advantage the minority party: The majority gets a little only by giving a little. The barrier to reform is entrenched in the Senate’s cloture rule, given the supermajority required for ending filibusters of proposals that curtail minority rights. A Senate majority could circumvent that barrier by going nuclear with 51 votes, but that strategy is not cost-free. To be sure, reformers claim to have 51 votes for a reform-by-ruling move. But it’s not clear to me yet that the majority would be willing to pay the accompanying costs of weathering the minority’s response to going nuclear.

Third, the rules address leaders’ interests more so than those of the rank and file. Some of the proposed changes are aimed at time management. For example, with the consent of the majority and minority leaders and a bipartisan handful of senators , the cloture process is sped up markedly. Similarly, the three debatable steps required to get to conference are condensed to a single motion (albeit one still subject to sixty votes if the minority objects). Other proposed changes alleviate the minority leader from objecting on his colleagues’ behalf, undermining individual senators’ ability to threaten to filibuster without actually showing up. Then again, there’s no enforcement mechanism in the proposal: Senators would be counting on the minority leader to play by the new rules and to abandon his practice of lodging objections on behalf of his absent colleagues. It’s fair to be skeptical that such informal reforms would ever stick.

Fourth, I think there’s promise in the proposal’s directive to the presiding officer to put questions to a (majority) vote when opponents no longer seek to debate a bill. I share skeptics’ views that majorities might rarely want to hold the minority’s feet to the fire to wear down the opposition and that minorities might at times relish the spotlight while holding the floor. But the proposal strikes me as a potentially valuable chance to see if the change would make a difference. If approved, the McCain-Levin proposal would be adopted as a standing order of the Senate for just the upcoming Congress, providing a testing ground for this version of the talking filibuster. (Standing orders are typically approved opening day by unanimous consent; would there be such consent for McCain-Levin or another negotiated proposal?)

Finally, it may be that incremental procedural change is all that a polarized Senate can agree on—especially if some Democrats are skittish about changing the rules by majority vote. Granted, majority senators won’t agree to the plan if it’s perceived as empowering the minority, not the majority, as Senator Harkin has suggested. Nor should they. In that case, an incremental package may be more than a polarized Senate can agree on—leaving the nuclear option as the only avenue for Democrats seeking to rein in the excesses of the Senate minority’s parliamentary rights.

Today could have been the day when Senate Democrats went nuclear – reining in minority party abuse of the filibuster with a simple majority vote.  That would have been my Super Bowl.  Instead, the Senate is poised to adopt a bipartisan set of modest (many say, meager) changes to the Senate’s cloture rule.   More like the Famous Idaho Potato Bowl, I say.

As many have noted (for starters, Ezra Klein here and Jonathan Bernstein here), the proposed changes to the Senate’s Rule 22 fall far short of what reformers had hoped for.  Much blame has been heaped on Harry Reid, the Democratic leader, and on a few senior Democrats, highlighting their resistance to abandoning the Senate’s sixty-vote threshold for bringing the chamber to a vote.  The reforms are modest, largely finding ways of speeding up the Senate once both parties have agreed on the matter at hand (for instance on the way to advancing a measure to the floor or after cutting off debate on a nomination).  Even if the changes may seem to many like small potatoes, I think there’s more to be gleaned from the Senate’s brush with reform.

First, take a little, give a little.  Today’s rule changes remind us that there is no free lunch when it comes to Senate reform.  That hurdle is built into Rule 22, given its requirement that 67 senators consent to a vote on efforts to reform Rule 22.  In the absence of majority willing to bear the costs of asserting the majority’s right to change its rules, Senate reform is necessarily bipartisan and incremental.  Reforms must secure the consent of the minority, or be packaged with changes judged equally important to the opposition.  (Recall that even when reformers reduced cloture to 60 votes in 1975, they paid a price: 67 votes would still be required to end debate on changing Rule 22.)  Today’s reforms allow a majority to circumvent filibusters of motions to proceed to legislative measures.  In return, the majority pays a price each time: The minority is guaranteed votes on two amendments, whereas previously recent leaders might have precluded all amendments by immediately “filling the tree.”  To be sure, this potentially dilutes the value of the rule change for the majority.   But concessions are dictated by the Senate’s inherited rules.  (And, of course, nothing is that simple when it comes to Senate rules; the majority may yet fill the tree, at least after the disposition of the minority’s amendments.)

Second, I suspect we might be underestimating the importance of a non-debatable motion to proceed for the majority party in a period of partisan polarization.  Judging from the increase in filibusters on the motions to proceed in recent years, minority parties have fought hard to keep bills off the floor that they oppose on policy or political grounds.   So long as the motion to proceed could be filibustered, majority and minority parties shared agenda-setting powers.  Today’s change grants the majority a slightly stronger hand in choosing the chamber agenda.  To be sure, the minority can still filibuster the bill and amendments beyond those newly guaranteed, but the reform undermines the minority’s ability to throw the majority off course.  Take immigration policy, for example.  Filibusters of the motion to proceed have kept the DREAM Act off the Senate floor in recent years.  Minority influence over the Senate’s agenda is diminished with today’s reform.

Third, these are leader-driven reforms, shaped by the unique burdens carried by the majority and (sometimes) minority leaders.  For example, the reforms speed up post-cloture debate on some judicial and executive branch nominations, and allow the chamber to hurry onto cloture votes on motions to proceed to legislative business when the minority offers a modicum of support.  No surprise that these housekeeping changes elicit little enthusiasm.   These changes don’t make it any easier for a majority to break sizable minority opposition.  And they potentially make it harder for rank and file senators to exploit the rules in pursuit of their own policy goals.  But from leaders’ perspectives, the reforms rein in the excesses of rank and file dissent when a bipartisan group is ready to move ahead.  As one Senate Democrat aide confided, “that’s all Reid ever really wanted.”

Finally, this episode highlights the limitation of the Constitutional option and other “reform-by-ruling” strategies.  There appears to have been a majority or near-majority support for securing only very limited reform of Rule 22.  Senators seem unwilling to use the tactic for a major overhaul of the Senate’s cloture rule—in part because of the fear of minority retaliation, in part because the filibuster rule likely serves as the foundation of senators’ power.   To be sure, Harry Reid aggressively used reform-by-ruling in the fall of 2011 to secure smaller changes to Rule 22 (as did Robert Byrd in the 1980s).  But we have to reach back nearly forty years to the 1975 reforms to find a Senate majority willing to go nuclear to impose major changes to Rule 22.  (Even then, reformers proceeded without the support of the majority leader, Mike Mansfield.)  Perhaps senators see the consequences of weakening Rule 22 in a different light when the parties polarize over policy problems and solutions, with senators nervous about curtailing extended debate when the tables turn on their majority.  Regardless, so long as majorities will only form to impose  minor reform by majority vote, those majorities will be forced to live under supermajority rules that daily frustrate their policy and political agendas.

And in the Senate’s world, those frustrating days can last for weeks!

It seems the Senate could have a really hot summer. Majority leader Harry Reid (D-NV) has reportedly threatened to “go nuclear” this July—meaning that Senate Democrats would move by majority vote to ban filibusters of executive and judicial branch nominees. According to these reports, if Senate Republicans block three key nominations (Richard Cordray to head the Consumer Financial Protection Bureau, Thomas Perez at Labor, and Gina McCarthy at EPA), Reid will call on the Democrats to invoke the nuclear option as a means of eliminating filibusters over nominees.

Jon Bernstein offered a thoughtful reaction to Reid’s gambit, noting that Reid’s challenge is to “find a way to ratchet up the threat of reform in order to push Republicans as far away from that line as possible.” Jon’s emphasis on Reid’s threat is important (and is worth reading in full).  Still, I think it’s helpful to dig a little deeper on the role of both majority and minority party threats that arise over the nuclear option.

Before getting to Reid’s threat, two brief detours. First, a parliamentary detour to make plain two reasons why Reid’s procedural gambit is deemed “nuclear.” First, Democrats envision using a set of parliamentary moves that would allow the Senate to cut off debate on nominations by majority vote (rather than by sixty votes). Republicans (at least when they are in the minority) call this “changing the rules by breaking the rules,” because Senate rules formally require a 2/3rds vote to break a filibuster of a measure to change Senate rules. The nuclear option would avoid the formal process of securing a 2/3rds vote to cut off debate; instead, the Senate would set a new precedent by simple majority vote to exempt nominations from the reach of Rule 22. If Democrats circumvent formal rules, Republicans would deem the move nuclear. Second, Reid’s potential gambit would be considered nuclear because of the anticipated GOP reaction: As Sen. Schumer argued in 2005 when the GOP tried to go nuclear over judges, minority party senators would “blow up every bridge in sight.” The nuclear option is so-called on account of the minority’s anticipated parliamentary reaction (which would ramp up obstruction on everything else).

A second detour notes simply that the exact procedural steps that would have to be taken to set a new precedent to exempt nominations from Rule 22 have not yet been precisely spelled out.  Over the years, several scenarios have been floated that give us a general outline of how the Senate could reform its cloture rule by majority vote. But a CRS report written in the heat of the failed GOP effort to go nuclear in 2005 points to the complications and uncertainties entailed in using a reform-by-ruling strategy to empower simple majorities to cut off debate on nominations. My sense is that using a nuclear option to restrict the reach of Rule 22 might not be as straight forward as many assume.

That gets us to the place of threats in reform-by-ruling strategies. The coverage of Reid’s intentions last week emphasized the importance of Reid’s threat to Republicans: Dare to cross the line by filibustering three particular executive branch nominees, and Democrats will go nuclear. But for Reid’s threat to be effective in convincing GOP senators to back down on these nominees, Republicans have to deem Reid’s threat credible. Republicans know that Reid refused by go nuclear last winter (and previously in January 2009), not least because a set of longer-serving Democrats opposed the strategy earlier this year. It would be reasonable for the GOP today to question whether Reid has 51 Democrats willing to ban judicial and executive branch nomination filibusters. If Republicans doubt Reid’s ability to detonate a nuclear device, then the threat won’t be much help in getting the GOP to back down. Of course, if Republicans don’t block all three nominees, observers will likely interpret the GOP’s behavior as a rational response to Reid’s threat. Eric Schickler and Greg Wawro in Filibuster suggest that the absence of reform on such occasions demonstrates that the nuclear option can “tame the minority.”  Reid’s threat would have done the trick.

As a potentially nuclear Senate summer approaches, I would keep handy an alternative interpretation.  Reid isn’t the only actor with a threat: given Republicans’ aggressive use of Rule 22, Republicans can credibly threaten to retaliate procedurally if the Democrats go nuclear.  And that might be a far more credible threat than Reid’s. We know from the report on Reid’s nuclear thinking that “senior Democratic Senators have privately expressed worry to the Majority Leader that revisiting the rules could imperil the immigration push, and have asked him to delay it until after immigration reform is done (or is killed).” That tidbit suggests that Democrats consider the GOP threat to retaliate as a near certainty. In other words, if Republicans decide not to block all three nominees and Democrats don’t go nuclear, we might reasonably conclude that the minority’s threat to retaliate was pivotal to the outcome. As Steve Smith, Tony Madonna and I argued some time ago, the nuclear option might be technically feasible but not necessarily politically feasible.

To be sure, it’s hard to arbitrate between these two competing mechanisms that might underlie Senate politics this summer.  In either scenario—the majority tames the minority or the minority scares the bejeezus out of the majority—the same outcome ensues: Nothing. Still, I think it’s important to keep these alternative interpretations at hand as Democrats call up these and other nominations this spring. The Senate is a tough nut to crack, not least when challenges to supermajority rule are in play.

UPDATE 4: Sarah Binder explores the questions, "Why did the Senate go nuclear now, and what will be the consequences for future majorities eager to further curtail the filibuster?"

UPDATE 2: Sarah Binder writes that "this is big" in another new post on Monkey Cage blog, "Boom! What the Senate will be like when the nuclear dust settles." 

UPDATE: Sarah Binder has a new post on Monkey Cage blog, in which she explains why GOP targeting of the D.C. circuit may not be as unprecedented as some think and why it would be difficult to parse out "acceptable" filibusters from those that aren't. "We'll learn soon enough," Binder writes, "if Democrats have the guts to go [nuclear] and, if so, whether that compels any Republicans to stand down."

Over the past few weeks, Senate Republicans have filibustered President Obama's three nominees to the Court of Appeals for the D.C. Circuit, claiming alternatively that Obama was trying to pack the court and characterizing the court's caseload as lighter than other circuits. News reports now say that Senate Majority Leader Harry Reid is considering changing the filibuster rule for some executive and judicial nominees, the so-called "nuclear option.

In 2010, Brookings Senior Fellow Sarah Binder, an expert on Congress and congressional history, testified to the Senate that "the filibuster was created by mistake."

We have many received wisdoms about the filibuster. However, most of them are not true. The most persistent myth is that the filibuster was part of the founding fathers’ constitutional vision for the Senate: It is said that the upper chamber was designed to be a slow-moving, deliberative body that cherished minority rights. In this version of history, the filibuster was a critical part of the framers’ Senate.

However, when we dig into the history of Congress, it seems that the filibuster was created by mistake. Let me explain.

The House and Senate rulebooks in 1789 were nearly identical. Both rulebooks included what is known as the “previous question” motion. The House kept their motion, and today it empowers a simple majority to cut off debate. The Senate no longer has that rule on its books.

What happened to the Senate’s rule? In 1805, Vice President Aaron Burr was presiding over the Senate (freshly indicted for the murder of Alexander Hamilton), and he offered this advice. He said something like this. You are a great deliberative body. But a truly great Senate would have a cleaner rule book. Yours is a mess. You have lots of rules that do the same thing. And he singles out the previous question motion. Now, today, we know that a simple majority in the House can use the rule to cut off debate. But in 1805, neither chamber used the rule that way. Majorities were still experimenting with it. And so when Aaron Burr said, get rid of the previous question motion, the Senate didn’t think twice. When they met in 1806, they dropped the motion from the Senate rule book.

Why? Not because senators in 1806 sought to protect minority rights and extended debate. They got rid of the rule by mistake: Because Aaron Burr told them to.

Once the rule was gone, senators still did not filibuster. Deletion of the rule made possible the filibuster because the Senate no longer had a rule that could have empowered a simple majority to cut off debate. It took several decades until the minority exploited the lax limits on debate, leading to the first real-live filibuster in 1837.

Binder makes additional insightful points about the origin and historical uses of the Senate filibuster in that testimony to the Senate Rules and Administration Committee.

She also calls attention to another of Obama's recent judicial nominees: Ronnie White for the U.S. District Court for the Eastern District of Missouri, which is yet another window, she says, on the "evolving wars of advice and consent."

Binder also has data on whether Senate Minority Leader Mitch McConnell and the Senate GOP have "played fair" on President Obama's nominees.

For additional analysis about the filibuster, see Binder's "What Senate cloture votes tell us about obstruction," in which she wrote:

Ultimately, the rise of the 60-vote Senate in a period of polarized parties signals that the minority party has mastered the art of blocking the majority. Sometimes, the minority leader drives the opposition in his conference; other times, he follows it. Regardless, what’s true of the tango is also true of the Senate: It takes two parties to make it look good. The minority party no doubt often feels that the majority leader is too quick to call for a vote, and its members might reasonably oppose cloture on that ground. However, my sense is that far more often, majority leaders resort to cloture when they find themselves unable to cajole the minority party to cooperate. As the Senate GOP conference fractures between pragmatists and ideologues, securing GOP consent will likely become even harder. Counting cloture votes remains an imperfect — but still valid — method of capturing minority efforts to block the Senate.

Get all of Sarah Binder's research and commentary about the Senate filibuster on her bio page.

Sen. Harry Reid has gone ahead with the so-called "nuclear option" to attempt to change Senate filibuster rules on some executive branch nominations, passing the rule change with a 52-48 vote. In their Vital Statistics on Congress report, Brookings Senior Fellow Thomas Mann and AEI Resident Scholar Norman Ornstein provide data on the number of attempted Senate cloture votes taken from 1979 to 2012, the 96th to 112th Congresses. The chart below demonstrates the average attempted cloture vote taken by party when that party was in the minority.

For more data on both attempted and successful cloture votes sine 1919, look up table 6-7 in Vital Stats (PDF).

Senior Fellow Sarah Binder, a leading expert on Congress and congressional history who called, in 2010, the Senate filibuster a "mistake," offered a recent analysis of Senate cloture votes, writing that "Counting cloture votes remains an imperfect — but still valid — method of capturing minority efforts to block the Senate."

More recently, Binder wondered whether "Democrats have the guts to go there and, if so, whether that compels any Republicans to stand down."

HHS Secretary Kathleen Sebelius may lose the most from the Senate’s rule change on the filibuster—and the Affordable Care Act may be healthier for it. I wrote last month on the FixGov blog that “Republicans are the Reason Secretary Sebelius Won’t Resign” (or be fired). That argument is no longer valid. My claim—the president’s inability to get her successor confirmed because of filibustering Republicans—is nullified by the Senate’s rule change, and the benefits may reach far beyond Obamacare.

The Implications of Filibuster Reform for Healthcare

Problems exist in HHS. No one denies it. However, for many appointees in the Department, the Senate rules served as a life preserver in a torrent of poor implementation, managerial failures, and bad PR. So long as the president faced the prospect of long-term vacancies among appointees overseeing ACA, the HHS leadership would be spared.

Today, that all changed. Moving forward, President Obama needs the support of only 51 Senate Democrats to replace top-level political appointees throughout the executive branch. This offers the president substantial breathing room. Nominees no longer need the support of every Democrat and a scarcely identifiable five Republicans. Instead, nominees can draw the ire of as many as four Democrats and still be confirmed.

Maybe Kathleen Sebelius is not to blame for the botched healthcare marketplace roll out. Maybe her Office did not give the thumbs up for the President to repeat “if you like your plan you can keep it.” Maybe she did not contribute to the poor salesmanship of the legislation from the start. However, if she was to blame (and perhaps if she wasn’t), her days in the president’s cabinet may well be numbered. The same may be true for deputies and other administrators in the Department who oversaw the weaker areas of the roll out of this law.

By repositioning HHS personnel or breathing new life into a Department facing continued struggles, the president may well ensure the administration of his signature legislation accomplishment improves. The right appointees can coordinate and communicate policy needs and goals up and down the bureaucratic hierarchy. Rather than settling for a program that meets or falls short of expectations, there is an opportunity to build an effective ACA.

Good Governance beyond Obamacare

The first half of October showed us that political actors in Congress contributed to a broken legislative branch. The second half of October showed us that political actors in the Administration contributed to a broken executive branch. Now is the time for the president to start anew and fix one branch, in the shadow of a Senate trying to fix itself.

In my piece from last month, I also argued that the filibuster rules in the Senate allow for the continuation of poor management and governance. If weak appointed personnel are causing policy problems, communication miscues, and other headaches for the president, the ability to replace them with something other than the word “ACTING” was limited by the 60-vote threshold.

President Obama, who has faced a string of personnel and management issues over the past year, now has greater freedom not simply to oust problematic appointees, but to install talented, effective leaders. With this ability comes a tremendous opportunity to jumpstart an administration that is sputtering.

In this podcast, congressional expert Sarah Binder explains why the Senate filibuster is a historical mistake. She talks about her research on Congress’s relationship with the Federal Reserve and addresses whether Congress is more polarized today than it has been in the past. Binder, a senior fellow in Governance Studies, is also a professor of political science at George Washington University and contributor to the Monkey Cage blog.

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Show notes:

• The Federal Reserve: Balancing Multiple Mandates (testimony by Alice Rivlin)
• Boom! What the Senate Will Be Like When the Nuclear Dust Settles
• Beyond the Horse Race to Lead the Fed
• Droning on: Thoughts on the Rand Paul “Talking Filibuster”
• Advice and Dissent: The Struggle to Shape the Federal Judiciary
• The History of the Filibuster

* In the image, Senator Henry Clay speaks about the Compromise of 1850 in the Old Senate Chamber. Daniel Webster is seated to the left of Clay and John C. Calhoun to the left of the Speaker's chair. (engraving by Robert Whitechurch, ca. 1880, Library of Congress)

Amy Liu’s recent paper, “Remaking Economic Development,” is disruptive in that it rightfully undercuts the shaky foundation of what draws many practitioners to the field: the idea that success is simply structuring transactions to attract new jobs and investment. These two metrics alone can’t diagnose the economic health or trajectory of a community. Instead, as the paper outlines, setting the right goals—measured by growth, prosperity, and inclusion—provides a much richer framework for a community’s trajectory, vibrancy, and opportunity.

Goal-setting clarifies how a community defines success and when it has been achieved, and promotes collaboration and increases buy-in from diverse stakeholders. If, as Liu argues, goals were designed to lead to growth, prosperity, and inclusion, metro areas would make dramatically different choices around policies, investments, and priorities, and people and communities would likely be in an overall stronger economic position.

However, these goals represent a longer-term proposition than conventional measures, and, perhaps naively, “Remaking Economic Development” fails to acknowledge the barriers that prevent most communities from setting the right goals:

1. Goals should focus on long-term interests, but election cycles prioritize clear near-term political wins. Meaty investments in infrastructure, workforce development, and fiscal policy reform needed to shift the competitive position of a community rarely yield easily defined and clearly increased short-term political capital.
2. Economies function as regions, but many municipal strategies are not aligned with regional goals. A metropolitan area is the logical unit to measure success, but civic leaders are elected from individual municipalities, or from a state that has a larger focus. Although it’s easier to market a region of 5 million people than a city of 650,000, in Detroit, intramural competition between cities and suburbs, suburbs and suburbs, and even neighborhoods within the city all undermine the cooperative effort to set goals regionally. The failure of mayors within a region to recognize their economic connectedness is a huge problem and fuels wasteful incentive battles over retail and other projects that are not economic drivers.
3. Goal-setting takes time, money, and requires data, but capacity is in short supply. Most economic developers and political leaders lack the framework, experience, and manpower to effectively lead a goal-setting process. And if the choice is between collectively setting goals or managing a flurry of “bird-in-hand” transactions, the transaction under consideration will always receive resources first. Leaders are primarily evaluated on near term jobs and investment figures; not having the time to lead a goal-setting process and, in many cases, lacking the approach and datasets to appropriately undertake this activity make goal-setting easy to eliminate.

Despite these obstacles, setting the right goals is critical to building healthy communities. To combat political challenges, strong collaboration between business and public sector leadership is crucial, as is the recognition of diverse sub-economies with different value propositions and opportunities. Leaders must ultimately acknowledge that near term wins mean little if they are leading down a path that will not fundamentally address the long-term investment climate and the region’s productive capacities, grow wages or address employment levels, and offer broad opportunities for diverse economic participation. The following steps can help:

1. Harness diverse, cross-sectoral perspectives. Fundamentally, businesses understand their industries better than anyone else; hence the public sector should identify ways to encourage growth, increased productivity, greater inclusion, and more competitiveness in targeted sectors by listening to businesses and jointly setting goals that marry private sector profit and public economic and social interests effectively. This approach may offset some of the other realities of short election cycles and limited capacity to participate in goal-setting or planning processes.
2. Identify unique roles for communities within a larger regional framework. Although competition between local cities may inhibit the most meaningful dialogue and alignment of interests, deeper analysis often produces greater clarity on the niche opportunities for different communities. For example, although Detroit has a strong manufacturing base, a major project requiring more than 40 acres will likely have better site options in the suburbs. In the same vein, companies seeking a vibrant urban campus with easy access to food, living, and other amenities are likely better suited to Detroit than one of the surrounding communities. That said, both companies are likely to draw employees from communities all over the region. Effective goal-setting includes analysis that should allow municipalities to uncover their niche opportunities within a larger regional framework.
3. Balance short-term and long-term priorities and successes. The truth is that near term investments are vital in creating momentum, providing stability, and creating jobs while long-term investments, policy decisions, and industry-focused asset development fundamentally position an economy to win over time. For example, incentives play an important role in offsetting competitive disadvantages in the short-term and should be used as a way to fill the gap while a community fixes the bigger economic challenges, ranging from exorbitant development costs to workforce development issues. The disconnect is that many communities are not focusing incentives on strategic, long-term priorities.

"Remaking Economic Development” elegantly exposes the shortsightedness toward aggressive deal-making that often prevents communities from thoughtfully building their long-term economic strength with an eye on growth, prosperity, and inclusion. Sadly, the economic development profession has historically focused on growth without much attention to prosperity and inclusion, which are arguably most important in building a sustainable economy. Goal-setting—painful as it may be—is the first step towards remaking the practice and establishing an honest foundation to build a better economy in the future.

Baltimore police officer Edward Nero, one of six being tried separately in relation to the arrest and death of Freddie Gray, has been acquitted on all counts. The outcome for officer Nero was widely expected, but officials are nonetheless aware of the level of frustration and anger that remains in the city. Mayor Stephanie Rawlings Blake said: "We once again ask the citizens to be patient and to allow the entire process to come to a conclusion."

Since Baltimore came to national attention, Brookings scholars have probed the city’s challenges and opportunities, as well addressing broader questions of place, race and opportunity.

• In this podcast, Jennifer Vey describes how, for parts of Baltimore, economic growth has been largely a spectator sport: "1/5 people in Baltimore lives in a neighborhood of extreme poverty, and yet these communities are located in a relatively affluent metro area, in a city with many vibrant and growing neighborhoods."
• Vey and her colleague Alan Berube, in this piece on the "Two Baltimores," reinforce the point about the distribution of economic opportunity and resources in the city:
  

  In 2013, 40,000 Baltimore households earned at least $100,000. Compare that to Milwaukee, a similar-sized city where only half as many households have such high incomes. As our analysis uncovered, jobs in Baltimore pay about $7,000 more on average than those nationally. The increasing presence of high-earning households and good jobs in Baltimore City helps explain why, as the piece itself notes, the city’s bond rating has improved and property values are rising at a healthy clip."

• Groundbreaking work by Raj Chetty, which we summarized here, shows that Baltimore City is the worst place for a boy to grow up in the U.S. in terms of their likely adult earnings:

• Here Amy Liu offered some advice to the new mayor of the city: "I commend the much-needed focus on equity but…the mayoral candidates should not lose sight of another critical piece of the equity equation: economic growth."
• Following an event focused on race, place and opportunity, in this piece I drew out "Six policies to improve social mobility," including better targeting of housing vouchers, more incentives to build affordable homes in better-off neighborhoods, and looser zoning restrictions.
• Frederick C. Harris assessed President Obama’s initiative to help young men of color, "My Brother’s Keeper," praising many policy shifts and calling for a renewed focus on social capital and educational access. But Harris also warned that rhetoric counts and that a priority for policymakers is to "challenge some misconceptions about the shortcomings of black men, which have become a part of the negative public discourse."
• Malcolm Sparrow has a Brookings book on policing reform, "Handcuffed: What Holds Policing Back, and the Keys to Reform" (there is a selection here on Medium). Sparrow writes:
  

  Citizens of any mature democracy can expect and should demand police services that are responsive to their needs, tolerant of diversity, and skillful in unraveling and tackling crime and other community problems. They should expect and demand that police officers are decent, courteous, humane, sparing and skillful in the use of force, respectful of citizens’ rights, disciplined, and professional. These are ordinary, reasonable expectations."

Five more police officers await their verdicts. But the city of Baltimore should not have to wait much longer for stronger governance, and more inclusive growth.

Executive Summary

If the main purpose of the Emergency Economic Stabilization Act of 2008 is to give banks confidence in each other, then enabling Treasury directly to bolster the capital positions of banks that need more capital may be an even more effective way to restoring confidence to the inter-bank market than the purchased of troubled assets. Whatever Congress may have intended about the pricing of the distressed assets, it also authorized a much more direct way to recapitalize the financial system and weak banks in particular: direct purchases by Treasury of securities that individual institutions may wish to issue to bolster their capital. At this writing, Treasury reportedly is considering ways do this. In this essay, we outline a specific bank recapitalization plan for Treasury to consider.

In particular, Treasury could announce its willingness to entertain applications for capital injections, using a set pricing formula. For publicly traded banks, Treasury could buy at the price as of a given date, such as the price one or more days before its plan was announced. For privately-owned banks, Treasury could use a price based on the average price-to-book value for publicly traded banks as of that date. To prevent government intrusion into the affairs of the banks, the stock should be non-voting. Treasury would make clear that it only would take minority positions. There should be no takeovers of more companies—AIG, Fannie and Freddie are quite enough. Treasury also should announce that it will dispose (or sell back to the bank) any stock acquired through these actions as soon as the financial system has stabilized and the bank is in sound financial condition (perhaps a time limit, such as three years, should be a working presumption).

We believe Treasury can accommodate a systematic recapitalization plan within the funding it has been given – initially $350 billion and another $350 billion later upon request to Congress (unless it disapproves) – by using the required disclosures about its asset purchases as a way of jump starting private sector pricing and trading of these securities. This should conserve Treasury’s resources it might otherwise use for asset purchases, and thus free up funds to recapitalize weak banks directly, but in an orderly fashion.

Treasury will have to be careful when it buys distressed assets to guard against the possibility that banks will just dump their worst stuff on taxpayers. The Department will also have to be careful when buying equity in banks. There cannot be an open invitation for bank owners to move assets out of the bank and then, in effect, say: “We don’t want this bank, you buy it.” To avoid this problem, Treasury should work closely with the FDIC and other regulators to determine whether or not a particular bank is eligible for an equity injection. The Department also may need to limit the scope of the recapitalization program to larger national banks, if it becomes infeasible to allow smaller banks to participate.

Making the Rescue Package Work: Asset and Equity Purchases [1]

The unprecedented financial rescue plan – technically the Emergency Economic Stabilization Act of 2008 (“EESA,” the “Act”, or the “plan”) -- has now been enacted by the Congress. One of the goals of the plan is to end the immediate panic in inter-bank lending markets, and on this basis several omens are not encouraging.

The Dow Jones stock index has been dropping daily, by large amounts, since EESA was enacted. The TED spread measures the difference between the interest rate on short term Treasury bills and the interest rate banks pay to borrow from each other (the LIBOR) and is a widely accepted measure of perceived risk in the financial sector. For several years this spread had hovered around 50 basis points or half a percentage point, reflecting the fact that lending to other financial institutions was considered almost as safe as buying Treasury bills. However, the spread shot up to 2.4 percentage points in July 2007 as the financial crisis hit, and it fluctuated widely in subsequent months. Following passage of the plan it remains even more elevated than it was last July—it was 3.8 percentage points as of October 7 and broke 4 percent on October 8. Financial institutions simply do not trust each other’s credit worthiness. Some of the market worries, of course, reflect the fragile state of the U.S. and global economies, but clearly the passage of the rescue plan itself has not calmed markets.

A second and related goal for the plan, according to media accounts, is to facilitate the recapitalization of the financial system, but the language of the bill is surprisingly coy about this. While the Act aims to “restore liquidity and stability to the financial system” it also directs the Treasury Secretary to prevent “unjust enrichment of financial institutions participating” in the asset purchase program. It is not yet clear whether Treasury will choose to recapitalize banks through its asset purchases – by buying them at prices above the values to which banks and other sellers have already written them down – or whether Treasury will simply use its purchases to stabilize prices for these securities and thus provide liquidity to the market, even if it may result in additional write-downs of their values (and thus additional reductions in capital).

Whatever Congress may have intended about the pricing of the distressed assets, it also authorized a much more direct way to recapitalize the financial system and weak banks in particular: direct purchases by Treasury of securities that individual institutions may wish to issue to bolster their capital. Of course, in normal times, such authority would be unnecessary because financial institutions would seek to tap private sources of capital first. But these are not normal times, to say the least.

If the main purpose of the plan is to give banks confidence in each other, then enabling Treasury directly to bolster the capital positions of banks that need more capital may be an even more effective way to restoring confidence to the inter-bank market. Accordingly, we outline here a possible supplementary bank recapitalization plan that we believe Treasury should pursue, at the same time it purchases distressed assets. As this paper is being completed on October 9, 2008, The New York Times reports that the Treasury is now considering such a move. We are encouraged by this and in this essay we provide both a rationale for doing so and some concrete suggestions for how such a direct recapitalization program might work. We do not support further nationalization of the banking system beyond what has already been done but we believe that the crisis has become so severe that the asset purchase plan on its own will not be enough to turn the current situation around. Additional capital is urgently needed and could be supplied by Treasury purchases of minority, non-voting equity stakes, or by warrants.

We believe Treasury can accommodate a systematic recapitalization plan within the funding it has been given – initially $350 billion and another $350 billion later upon request to Congress (unless it disapproves) – by using the required disclosures about its asset purchases as a way of jump starting private sector pricing and trading of these securities. This should conserve Treasury’s resources it might otherwise use for asset purchases, and thus free up funds to recapitalize weak banks directly, but in an orderly fashion, as we describe below.

Why Do Banks Need More Capital?

Financial institutions make money by borrowing money on favorable terms, that is, at low interest rates, and then lending it out at higher rates or by buying assets that yield higher returns. They may make money in other ways too, but the state of their balance sheets of assets and liabilities is crucial. In order to create a viable financial institution that can accommodate requests by depositors to take money out, someone has to put up capital and typically this comes from the equity in the company. The owners of the company have an incentive to keep this equity capital low and to build a large volume of borrowing and lending off a small base of capital—to increase leverage. This is because the profits earned are divided among the equity owners and the less capital there is, the higher the return on equity.

Governments for many years and in almost all countries have regulations in place setting capital requirements for banks in particular to stop them from taking too much risk in the pursuit of high returns and also protect any fund that insures their deposits against loss (the FDIC in this country). But some of our larger banks in recent years found a way around these rules by establishing “off-balance sheet” entities – Structured Investment Vehicles (“SIVs”) – to purchase mortgage-related and other asset-backed securities that the banks were issuing. In addition, large investment banks significantly increased their leverage in the years running up to the recent crisis, and were able to do so without mandated capital requirements. As a result, when the mortgage crisis hit, our financial system was weaker than was widely believed, and in the case of large banks in particular, than was officially reported.[2]

The mortgage crisis, which first surfaced in 2006 and has escalated rapidly since then, has hit bank balance sheets severely. As banks were forced to recognize losses on the mortgages they held in their portfolio, and especially to write down the values of their mortgage securities to their “market values” (even though the prices in those “markets” reflected relatively few “fire-sale” trades), they suffered reductions of their capital. Furthermore, the large banks that had created SIVs to escape such events found they could not hide from them when the SIVs could no longer roll over the commercial paper they had issued to finance their holdings of mortgage securities. To avoid dumping these securities on the market to satisfy their creditors, the banks took the SIVs back on their balance sheets, only to suffer further losses to their capital.

As we have seen, some of our largest banks – Washington Mutual and Wachovia, to name two – have not been able to survive all of this, and have been forced or are or being forced into the hands of stronger survivors. Other banks have been doing their best to shore up their capital bases by issuing new equity to replace the losses they have absorbed on delinquent loans and declining prices of their asset-backed securities. According to media reports, financial institutions (largely banks) worldwide have suffered over $700 billion in such losses to date, of which they replaced approximately $500 billion by issuing new equity.

But more losses are sure to come; indeed Secretary Paulson has said to expect further bank failures. Earlier this year, the International Monetary Fund projected that losses due to the credit crisis worldwide could hit $1 trillion. The IMF has recently upped that forecast to $1.4 trillion. If anything close to this latest forecast is realized, then many banks – here and abroad – will need to raise even more equity, but in a capital market that is now highly more risk averse than only a few months ago.

It is in this environment that banks have grown much less comfortable dealing with each other, even though they must to keep the financial system running. Every day, some banks have more cash on hand, or reserves, than they need to meet reserve requirements and ordinary demands for liquidity, while others are short of such funds. In the United States, banks thus trade with each other in the Federal Funds market while global banks borrow and lend to each other through the London Interbank market using the LIBOR rate of interest. The Federal Reserve’s main objective of monetary policy is to stabilize the “Fed funds” rate around a target, now just lowered to 1.5%, down from 2% where it has been for some months (and down from 5.25% before subprime mortgage crisis). To do so, the Fed has added a huge amount of liquidity to the financial system, even going so far this week as to buy up commercial paper issued by corporations, an unprecedented step. But the Fed does not and probably cannot control the longer term inter-bank market, in which banks lend to each other typically over a 3-month period.

The steep jump in the 3-month inter-bank lending rate – well over 4 percent – reflects two fundamental facts that EESA is designed to address. One is that banks don’t trust each others’ valuations of the mortgage and possibly other asset-backed securities they are all holding, precisely because the “markets” in those securities are so thin and thus not generating reliable prices. The second problem is that banks either are short of capital themselves, or fear that their counterparties are. No wonder that banks are so unwilling to lend to each other for a period even as short as three months – which in this environment, can seem like an eternity.

The capital shortage in the banking system, in particular, has severe implications for the rest of the economy. An institution that is short of capital is forced to cut back on its lending and this shows up in denials of lines of credit to companies and reductions in credit limits for consumers. Households cut back on spending; it is difficult to get a mortgage or a car loan; and companies reduce investment and curtail operations. And as we learn in any college course on banking, the impact of a loss of capital on bank lending can be multiplied. Each dollar of bank capital supports roughly ten dollars of overall lending in the economy. Each dollar of lost capital thus can result in ten dollars of lending contraction. The impact of an economy-wide bank contraction can be devastating for Main Street. The Great Depression was greatly exacerbated by the collapse of banks. The long stagnation in Japan was in large part the result of a failure to recapitalize the banks.

How bad is the current problem? We do not know how many banks, insurance companies or other financial institutions are in a weakened state, or perhaps even more important, may become weakened as the overall economy deteriorates. The official data published so far don’t really help on this score. The FDIC compiles information on the number and collective assets held by “problem banks,” or those in danger in failing. As of the second quarter of 2008, there were 117 such banks with assets of $78 billion up from 90 in the second quarter with assets of $28 billion., These figures did not include Washington Mutual, which would have failed had it not been bought by J.P. Morgan, or Wachovia, which at this writing, looks like it will be acquired by Wells Fargo (but also was in danger of failing without being acquired by someone). Together these banks hold more than $500 billion in customer deposits. Furthermore, according to recent media reports, even some large insurance companies (beyond AIG) may be having capital problems, having suffered large losses on the securities they hold in reserve to meet future claims.

Can the Asset Purchase Plan Succeed in Recapitalizing the Banks?

In principle, there are two ways in which the original Treasury asset purchase plan would recapitalize the banks. The first method is premised on the view that private markets are unwilling to supply capital to the banks because investors do not know how much their assets are worth. The Treasury, it is argued, would use its asset purchase plan as a way of revealing the prices of the assets and once that information is known, the banks will be able to raise new capital again from private markets. But better pricing will only attract capital if there are investors out there who are willing to supply it. Given the dramatic downturn in equities markets, finding such willing investors will be difficult, to say the least. Those investors that provided capital to banks early on in the crisis have been hit hard by the subsequent decline in equity prices and are reluctant to get burned again. When Bank of America said it would raise $10 billion from the markets, for example, its stock price fell sharply, suggesting there is a lot of market resistance to be overcome before private investors are willing to recapitalize the banking system.

Second, in principle, Treasury could recapitalize the banks by buying distressed assets at prices above those at which the securities are currently carried on the books of the institutions that sell them (original book or purchase value minus any write-offs).[3] In this case, the bank would be able to report a capital gain from its sale to the Treasury, a gain that would reverse, at least in part, the capital losses it had taken in the past and thereby add to its capital.

Treasury has said it will use reverse auctions[4] when it buys assets, and it is possible that the Department will be able to construct some auctions that will enable some holders of troubled assets to sell them to the Treasury at prices that earn a capital gain. But we are somewhat skeptical how many securities will fall into this category. For one thing, asset-backed securities are not homogenous, like traditional equity or bonds. In addition, it would be surprising in the current environment if reverse auctions would reveal prices that are above the written-down values of many of these securities. After all, an auction does not necessarily produce valuations that reflect the “hold to maturity” price rather than the “liquidation” price for the securities, as Fed Chairman Ben Bernanke suggested the purchase plan would accomplish.

Accordingly, we strongly suspect that Treasury will have to purchase many securities in one-on-one deals rather than through auctions. But in doing this, it may be both legally and politically difficult for the Treasury to pay prices in negotiations that are above the valuations banks or other sellers already have given them. Section 101 (e) of EESA specifically requires the Treasury Secretary “to take such steps as may be necessary to prevent unjust enrichment” of participating financial institutions, and Congress could construe such language to preclude such sales.[5] Furthermore, even if there were not a specific prohibition in the EESA, Treasury may wish to avoid the public criticism it would face if it purchased assets at prices that would allow participating institutions to book gains. And, in the case of sales at prices below the explicit or implicit price of the securities carried on an institution’s books, the sales will trigger further accounting losses and thus additional deductions from reported capital.

In short, we are not at all confident that the Treasury’s planned purchases of troubled securities, by themselves, will do much to recapitalize the banking system. This does not mean that the planned asset purchases will not deliver some needed help. Although at this writing the inter-bank lending market remains frozen even though EESA has been enacted and signed into law, one reason why banks and others may not yet have confidence that it will lead to a thaw in credit markets is that the guidelines for the asset purchases have not yet been issued. Once these guidelines are announced and the purchases begin, and the markets start to see real results, it is possible that some of the missing trust in the banking system will come back.[6]

However, Treasury may not need to spend, and for reasons elaborated below we do not believe it should spend, anywhere near the full $700 billion, or perhaps even most of the initial $350 billion tranche in borrowing authority, to liquefy the markets for mortgage and other asset-backed securities. EESA requires Treasury to publish (within two days) information about each of these purchases. We urge the Department to include in such publications (presumably on its website) regular data on the defaults and delinquencies to date of the loans underlying each batch of securities it purchases. Such information should enable financial institutions that are still holding similar securities not only to price them more accurately, but also to give market participants enough confidence to begin trading these securities without further Treasury purchases.

Husbanding its resources should be a prime objective for Treasury. In conducting its purchases of troubled assets, it should target first those asset categories that are the most illiquid. The main objective always should be jump-starting private sector activity or at least bringing greater clarity to the pricing of particular classes of securities. There is no need for Treasury, therefore, to make repeat purchases of similar securities (such as collateralized debt obligations issued within several months of each other, structured in roughly a similar way). Rather, the aim should be to make a market in as many different asset categories as are reasonably necessary to provide guidance to market participants, no more, no less.

Yet no one can be confident at this point that asset purchases alone will give banks sufficient confidence to begin dealing with each other at much lower interest rates. If the asset purchases do the trick, fine. But if they don’t, Treasury should make sure it has enough financial ammunition to pursue a second, more direct, strategy for restoring banks’ confidence – the direct bank recapitalization strategy to which we now turn.

Recapitalizing the Financial System Directly

Having the government put capital into financial institutions directly is not a new idea. It is the approach followed in this crisis for Fannie and Freddie and has been used in other countries. Sweden recapitalized its banks by adding capital to them during its crisis in the 1980s. Most recently, the British government has announced a sweeping bank recapitalization amidst the current crisis. And of more relevance to the U.S. situation, Congress specifically added authority in EESA for Treasury to make direct capital injections into banks.

In recent days, Treasury Secretary Paulson has acknowledged that the Department may take advantage of this authority and thus use some of its funds to buy equity in troubled banks. This is a welcome development. Even if Treasury’s asset purchase program restores confidence in the pricing of troubled securities, many banks still believe that many other banks lack sufficient capital, and thus can still be reluctant to lend to them. The fact that the FDIC stands ready (especially with its new unlimited line of credit at the Treasury) to assist acquiring banks in taking over failing banks is probably not sufficient, even with a successful Treasury asset purchase program, to provide this confidence. Bank lenders to failed banks can still lose money in such transactions, or at the very least may have difficulty accessing their funds for some period, at times when all banks seem to want or need as much liquidity as they can get.

How might such a capital injection program work? Treasury could announce its willingness to entertain applications for capital injections, using a set pricing formula. For publicly traded banks, Treasury could buy at the price as of a given date, such as the price one or more days before its plan was announced, as has been suggested by former St. Louis Federal Reserve Bank President William Poole.[7] For privately-owned banks, Treasury could use a price based on the average price-to-book value for publicly traded banks as of that date. To prevent government intrusion into the affairs of the banks, the stock should be non-voting. Treasury would make clear that it only would take minority positions. There should be no takeovers of more companies—AIG, Fannie and Freddie are quite enough. Treasury also should announce that it will dispose (or sell back to the bank) any stock acquired through these actions as soon as the financial system has stabilized and the bank is in sound financial condition (perhaps a time limit, such as three years, should be a working presumption).

The Treasury will have to be careful when it buys distressed assets to guard against the possibility that banks will just dump their worst stuff on the taxpayers. The Department also will have to be careful when buying equity in banks, especially if it decides to go for a broad, nationwide program. There cannot be an open invitation for owners to move assets out of the bank and then, in effect, say: “We don’t want this bank, you buy it.” This problem suggests that Treasury would need to work closely with the FDIC and other regulators to determine whether or not a particular bank is eligible for an equity injection. Treasury also may need to limit the scope of the program to larger banks, if it becomes infeasible to allow smaller banks to participate.

We presume that Treasury did not initially embrace the idea of a more systematic recapitalization of the banking system out of concern not to have any further government involvement in the banking system, especially on the heels of the Fannie/Freddie conservatorship and the Fed’s rescue of AIG. That Treasury is now considering direct capital injections indicates that this may no longer be a concern. In our view, limiting Treasury’s purchases to non-voting stock in any event would address this concern directly.

Conclusion

Ben Bernanke has compared the current financial crisis to a heart attack in the economy. For some heart attacks, it is enough to administer drugs and change diet and exercise habits. But in acute cases, major surgery is needed and the current crisis is in the acute phase. Direct surgery in the form of capital injected into financial institutions, along with direct asset purchases, should help calm the inter-banking lending market.

Based on recent monthly data it appears that GDP started to fall in mid-year and the economy is moving into recession so the proposals made here will not change that. Nor can the proposals compel banks to make loans to their traditional customers – consumers and businesses – in the current climate of fear. But Treasury can do something to mitigate that fear and thus, along with the recent further easing of monetary policy, likely additional fiscal stimulus and further homeowner relief, the Department will help reduce the severity of the current recession if it uses all the tools in its financial arsenal.

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Justin Wolfers’ column titled “Debunking the Easterlin Paradox, Again” dismisses Richard Easterlin’s work as just plain wrong. I argue here, as I have elsewhere, that where you come out on the Easterlin paradox depends on the happiness question (and therefore the definition of happiness) that you use, as well as the sample of countries and the period of time.

Richard Easterlin finds no clear country-by-country relationship between average per capita GDP and life satisfaction (among wealthy countries), despite a clear relationship between income and happiness at the individual level within countries. Easterlin also found – and continues to find, based on methods different from Wolfers’ – an absence of a relationship between life satisfaction and long-term changes in GDP per capita.

Different well-being questions measure different dimensions of “happiness”, and, in turn, they correlate differently with income (something they themselves show at the end of their last paper, and admit that the relationship between income and well-being is complex). The best possible life question – which Justin Wolfers and Betsey Stevenson primarily use in the first work, and also in the second – asks respondents to compare their life today to the best possible life they can imagine for themselves. This introduces a relative component, and, not surprisingly, the question correlates most closely with income of all of the available subjective well-being questions. Life satisfaction, which they use in the second work, also correlates with income more than open-ended happiness, life purpose or affect questions, but not as closely as the best possible life question.

Wolfers and Stevenson used the most recent and extensive sample of countries available from the Gallup World Poll, and, as the measure of “happiness”, the best possible life question therein, and challenged the Easterlin paradox. In more recent work, with Stevenson and Dan Sacks (2010), referenced in this blog, the authors look at the relationship between life satisfaction and economic growth, based on the World Values survey and GDP levels and the best possible life question, based on the Gallup World Poll. They isolate a clear relationship between life satisfaction and GDP levels, and their statistical analysis is spot on.

Recent studies by Kahneman and Deaton (2010), and Diener and colleagues (2010), for example, find that happiness in a life evaluation sense (as measured by the best possible life question) correlates much more closely with income than does happiness in a life experience sense (as measured by affect or more open ended happiness questions). This holds within the United States (Kahneman and Deaton) and across countries (Diener et al.).

My own work on Latin America, with Soumya Chattopadhyay and Mario Picon, tested various questions against each other and finds a similar difference in correlation, with affect and life purpose questions having the least correlation with income and the best possible life question the most. My work on happiness in Afghanistan found that Afghans were happier than the world average (on par with Latin Americans) as measured by an open ended happiness question, and 20 percent more likely to smile in a day than Cubans. Yet they scored much lower than the world average on the best possible life question. This is not a surprise. While naturally cheerful and able to make the best of their lot, the Afghans also know that the best possible life is outside Afghanistan.

Thus the conclusions that one draws on whether there is an Easterlin paradox or not in part rest on the definition of happiness, and therefore the question that is used as the basis of analysis. Wolfers and co-authors find a clear relationship between GDP levels and life satisfaction and best possible life – clearly important dimensions of well-being. Yet in the same paper they find much less clear relationships when they use happiness, affect and life purpose questions.  

There is also the question of the sample of countries, and whether one is examining cross section or time series data. The most recent debate with Easterlin is about the trends over time rather than cross-sectional patterns. Dropping the transition economies, as Easterlin does, may be a mistake, as Wolfers contends. But it is also important to recognize the extent to which including a large sample of countries that experienced unprecedented economic collapse and associated drops in happiness alters the slope in the cross-country income-happiness relationship (making it steeper). Wolfers also criticizes Easterlin for relying on financial satisfaction data for his Latin American time series sample (because there is not enough life satisfaction data); financial satisfaction correlates closely, but not perfectly, with life satisfaction. Easterlin’s technique allows for the inclusion of a much larger sample of middle income developing countries, a sample of countries that one can imagine is very important to the growth and happiness debate. Wolfers and co-authors use far fewer Latin American countries because comparable life satisfaction data is limited. Either approach is plausible and, as with all work with limited data, is not perfect. But I would not go as far as calling one or the other “plain wrong”.

Finally, there is the simpler question of giving credit where credit is due. We would not be having this debate, nor would we have a host of analysis on well-being beyond what is measured by income, had Easterlin not triggered our thinking on this with his original study of happiness and income over three decades ago (and his patient and thoughtful mentoring of many economists since then). In the big picture of things, Easterlin had the idea.

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Justin Wolfers, professor of Economics and Public Policy at the University of Michigan, re-joins Brookings, Vice President and Economic Studies Co-Director Karen Dynan announced today.  Wolfers was a visiting fellow from 2010-2011.

A world-renowned empirical economist, Wolfers will continue in his role as co-editor, along with David Romer of the University of California, of the Brookings Papers on Economic Activity (BPEA), the flagship economic journal of the Institution.  He will continue his focus on labor economics, macroeconomics, political economy, economics of the family, social policy, law and economics, public economics, and behavioral economics. His appointment as senior fellow will last 13 months.

Wolfers is also a research associate with the National Bureau for Economic Research, a research affiliate of the Centre for Economic Policy Research in London, a research fellow of the German Institute for the Study of Labor, and a senior scientist for Gallup, among other affiliations. He is a contributor for Bloomberg View, NPR Marketplace, and the Freakonomics website and was named one of the 13 top young economists to watch by the New York Times.  Wolfers did his undergraduate work at the University of Sydney, Australia and received his Master’s and Ph.D. in Economics from Harvard University.  He is a dual Australian-U.S. national and was once an apprentice to a bookie which led to his interest in prediction markets. 

“We are pleased to re-welcome Justin back to Economic Studies,” said Dynan. “His work continues to challenge the conventional wisdom, and we look forward to collaborating with him once again.” 

“Justin is outstanding at communicating economic ideas to a wide audience, as evidenced by his regular writings for media as well as his large social media presence,” added Ted Gayer, co-director of Economic Studies.

“I have enormous affection for the Brookings Institution, which provides not only a home for deep scholarly research, but also an unmatched platform for engaging the policy debate,” said Wolfers.  “The Economic Studies program has a rich history of being the go-to place for policymakers, and I look forward to coming back and engaging in debate with my colleagues there.”

One of global society’s foremost structural changes underway is its rapid aggregate shift from farmbased to city-based economies. More than half of humanity now lives in urban areas, and more than two-thirds of the world’s economies have a majority of their population living in urban settings. Much of the gradual movement from rural to urban areas is driven by long-term forces of economic progress. But one corresponding downside is that city-based societies become increasingly disconnected—certainly physically, and likely psychologically—from the practicalities of rural livelihoods, especially agriculture, the crucial economic sector that provides food to fuel humanity.

The nature of agriculture is especially important when considering the tantalizingly imminent prospect of eliminating extreme poverty within a generation. The majority of the world’s extremely poor people still live in rural areas, where farming is likely to play a central role in boosting average incomes. Agriculture is similarly important when considering environmental challenges like protecting biodiversity and tackling climate change. For example, agriculture and shifts in land use are responsible for roughly a quarter of greenhouse gas emissions.

As a single word, the concept of “agriculture” encompasses a remarkably diverse set of circumstances. It can be defined very simply, as at dictionary.com, as “the science or occupation of cultivating land and rearing crops and livestock.” But underneath that definition lies a vast array of landscape ecologies and climates in which different types of plant and animal species can grow. Focusing solely on crop species, each plant grows within a particular set of respective conditions. Some plants provide food—such as grains, fruits, or vegetables—that people or livestock can consume directly for metabolic energy. Other plants provide stimulants or medication that humans consume—such as coffee or Artemisia—but have no caloric value. Still others provide physical materials—like cotton or rubber—that provide valuable inputs to physical manufacturing.

One of the primary reasons why agriculture’s diversity is so important to understand is that it defines the possibilities, and limits, for the diffusion of relevant technologies. Some crops, like wheat, grow only in temperate areas, so relevant advances in breeding or plant productivity might be relatively easy to diffuse across similar agro-ecological environments but will not naturally transfer to tropical environments, where most of the world’s poor reside. Conversely, for example, rice originates in lowland tropical areas and it has historically been relatively easy to adopt farming technologies from one rice-growing region to another. But, again, its diffusion is limited by geography and climate. Meanwhile maize can grow in both temperate and tropical areas, but its unique germinating properties render it difficult to transfer seed technologies across geographies.

Given the centrality of agriculture in many crucial global challenges, including the internationally agreed Sustainable Development Goals recently established for 2030, it is worth unpacking the topic empirically to describe what the term actually means today. This short paper does so with a focus on developing country crops, answering five basic questions: 

1. What types of crops does each country grow? 

2. Which cereals are most prominent in each country? 

3. Which non-cereal crops are most prominent in each country? 

4. How common are “cash crops” in each country? 

5. How has area harvested been changing recently? 

Readers should note that the following assessments of crop prominence are measured by area harvested, and therefore do not capture each crop’s underlying level of productivity or overarching importance within an economy. For example, a local cereal crop might be worth only $200 per ton of output in a country, but average yields might vary across a spectrum from around 1 to 6 tons per hectare (or even higher). Meanwhile, an export-oriented cash crop like coffee might be worth $2,000 per ton, with potential yields ranging from roughly half a ton to 3 or more tons per hectare. Thus the extent of area harvested forms only one of many variables required for a thorough understanding of local agricultural systems. 

The underlying analysis for this paper was originally conducted for a related book chapter on “Agriculture’s role in ending extreme poverty” (McArthur, 2015). That chapter addresses similar questions for a subset of 61 countries still estimated to be struggling with extreme poverty challenges as of 2011. Here we present data for a broader set of 140 developing countries. All tables are also available online for download.

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Event Information

The Building Bridges Coalition was launched at the Brookings Institution in June 2006 to promote the role of volunteer service in achieving development goals and to highlight research and policy issues across the field in the United States and abroad. Among other efforts, the coalition promotes innovation, scaling up, and best practices for international volunteers working in development.

On June 14, the Brookings Institution and the Building Bridges Coalition co-hosted a 10th anniversary forum on the role of volunteers in achieving the United Nation’s Sustainable Development Goals for 2030 and on the coalition’s impact research. General Stanley McChrystal was the keynote speaker and discussed initiatives to make a year of civilian service as much a part of growing up in America as going to high school.

Afterwards, three consecutive panels discussed how to provide a multi-stakeholder platform for the advancement of innovative U.S.-global alliances with nongovernmental organizations, faith-based entities, university consortia, and the private sector in conjunction with the launch of the global track of Service Year Alliance.

For more information on the forum and the Building Bridges Coalition, click here.

Video

• Welcoming remarks and featured speaker
• Panel 1 — Role of volunteer service in achieving the 2030 Sustainable Development Goals
• Panel 2 — Policy perspective: National and international service in the next administration
• Panel 3 — One million Americans in global service: The role of faith-based service

Audio

• International volunteer service and the 2030 development agenda

Transcript

• Uncorrected Transcript (.pdf)

Event Materials

• 20160614_volunteering_development_transcript

Click here to read the blog in English »

2016: une année décisive

Les décideurs politiques et les spécialistes du développement sont désormais confrontés à une nouvelle série d’enjeux suite à l’établissement, par consensus mondial, du triumvirat composé du Programme d’action d’Addis-Abeba, du Programme d’action 2030 et de l’Accord de Paris [1]  : mise en œuvre, suivi et passage en revue. Les professionnels des politiques de développement doivent aborder ces enjeux tout en y intégrant ces trois piliers du développement durable que sont le développement social, la croissance économique et la protection environnementale, sans oublier les trois volets intersectoriels du consensus mondial précités, tout cela en opérant au sein d’un contexte dans lequel la planification des politiques reste accomplie de façon cloisonnée. Ils doivent également incorporer le caractère universel de ces nouveaux accords en tenant compte des différentes circonstances nationales ; à savoir les divers besoins, réalités, capacités, niveaux de développement nationaux, de même que les diverses priorités et politiques nationales. Ils doivent aussi accroître considérablement l’allocation des ressources et les moyens de mise en œuvre (comme le financement, le renforcement des capacités et le transfert de technologies) pour changer les choses et améliorer les nouveaux partenariats réunissant plusieurs parties prenantes en vue de restreindre les mouvements mondiaux de toutes sortes (notamment la migration, le terrorisme, les maladies, la fiscalité, les phénomènes météorologiques extrêmes et la révolution numérique) dans un monde résolument interconnecté. Il va sans dire que la tâche est très ambitieuse !

Ces difficultés sont à l’origine de nouveaux accords nationaux et internationaux visant à honorer les engagements pris pour répondre à ces enjeux sans précédent. Plusieurs États africains ont déjà commencé à créer des comités interministériels et des groupes de travail pour assurer l’alignement entre les objectifs mondiaux et les processus, les aspirations et les priorités actuels. 

L’Afrique prépare, en collaboration avec la communauté internationale, le premier Forum politique de haut niveau depuis l’adoption du programme d’action 2030 qui aura lieu en juillet 2016 et dont le thème sera « Veiller à ce que nul ne soit laissé pour compte ». Afin d’éclairer le leadership, l’orientation et les recommandations relatifs au Programme d’action 2030, six pays africains [2] parmi les 22 États membres de l’ONU se sont portés volontaires pour présenter des études nationales sur le travail accompli en vue d’atteindre les Objectifs de développement durable (ODD), soit une opportunité unique de fournir un examen objectif sans compromis et de mettre en avant les leviers d’exploitation et les limites à surmonter afin d’avoir un impact.

Les Nations Unies ont déployé de nombreux efforts de coordination parallèlement au travail de terrain réalisé par l’Afrique : en premier lieu, la création d’un groupe de travail interinstitutions chargé de préparer le forum sur le financement du développement de suivi synchronisé avec le Forum mondial pour l’infrastructure, qui consultera sur les investissements en infrastructures, un aspect crucial pour le continent ; un groupe composé de 10 représentants nommés dont la mission consiste à soutenir le Mécanisme de facilitation des technologies aux fins du développement, du transfert et de la diffusion de technologies pour les ODD, soit un autre aspect très important pour l’Afrique ; et enfin une équipe de conseillers indépendants dont la mission consiste à fournir des conseils sur le positionnement à plus long terme du système de développement de l’ONU dans le contexte du Programme 2030 communément appelé  « UN fit for purpose », parmi tant d’autres efforts.

Ces obligations bureaucratiques écrasantes pèseront à elles seules lourdement sur les capacités limitées de l’Afrique. C’est la raison pour laquelle le continent à tout intérêt à regrouper ses ressources en tirant parti de ses robustes réseaux régionaux pour atténuer cet obstacle de façon cohérente et coordonnée et en capitalisant sur la convergence entre les textes nouvellement adoptés et l’Agenda 2063, le programme de transformation mis en place par l’Union Africaine sur une durée de 50 ans, avec l’aide d’institutions panafricaines.

Outre les échelons nationaux et internationaux, il convient de tenir compte d’une troisième dimension : l’échelon régional. Ainsi, les trois principaux accords conclus en 2015 privilégiaient le soutien aux projets et aux cadres de coopération encourageant l’intégration régionale et sous-régionale, en particulier en Afrique. [3] C’est la raison pour laquelle des politiques industrielles communes et cohérentes relatives aux chaînes de valeur régionales formulées par des institutions régionales renforcées et portées par un leadership transformationnel volontariste s’imposent comme le meilleur moyen de favoriser l’insertion de l’Afrique au sein de l’économie mondiale.

L’Afrique considère depuis longtemps l’intégration économique régionale, partie intégrante de ses principaux « piliers », à savoir les huit Communautés économiques régionales (CER), comme étant une stratégie de développement de base.

Le continent s’est manifestement engagé dans cette voie : l’été dernier, trois CER, le Marché commun pour l’Afrique de l’Est et de l’Afrique australe (COMESA), la Communauté d’Afrique de l’Est (CAE) et la Communauté de développement de l’Afrique de l’Est (SADC) ont créé le Traité de libre-échange tripartite (TFTA) regroupant 26 pays, avec plus de 600 millions d’habitants et un PIB global de mille milliards de dollars US. Cet accord tripartite ouvre la voie à l’accord « méga-régional » de l’Afrique, la Zone de libre échange continentale (CFTA) et à l’instauration d’une vaste communauté économique africaine. Si la régionalisation permet la libre circulation des personnes, des capitaux, des biens et des services, c’est la connectivité intra-africaine accrue en découlant qui stimulera les échanges commerciaux au sein de l’Afrique, favorisera la croissance, créera des emplois et attira des investissements. Il devrait enfin faire démarrer l’industrialisation, l’innovation et la compétitivité. À ces fins, les institutions panafricaines, soucieuses d’exploiter les récentes performances favorables enregistrés par le continent, redoublent d’efforts pour créer un environnement propice à l’harmonisation des politiques et des réglementations et aux économies d’échelle.

L’infrastructure, sans laquelle toute connectivité est impossible, constitue indéniablement le fondement de tout futur plan de régionalisation. Outre l’intégration du marché et le développement industriel, le développement des infrastructures est l’un des trois piliers de la stratégie du TFTA. De la même manière, l’agence pour le Nouveau partenariat économique pour le développement en Afrique (NEPAD), l’organe technique de l’Union africaine (UA) chargé de planifier et coordonner la mise en œuvre des priorités continentales et des programmes régionaux, a adopté l’intégration régionale en tant que méthode stratégique pour l’infrastructure. Le NEPAD a d’ailleurs organisé, en juin 2014, le Sommet de Dakar sur le financement des infrastructures ayant abouti à l’adoption du Programme d’action de Dakar qui présente des options en matière de mobilisation d’investissements dans des projets de développement des infrastructures, en commençant par 16 projets bancables clés issus du programme de développement des infrastructures en Afrique (PIDA). Il est intéressant de noter que ces « mégaprojets du NEPAD visant à transformer l’Afrique » ont tous une portée régionale.

En complémentant les efforts du NEPAD et du TFTA, le Réseau d’affaires continental a été formé pour promouvoir le dialogue entre les secteurs public et privé sur la thématique de l’investissement en infrastructures régionales. Le Fond Africa50 pour l’infrastructure a été constitué en guise de nouvelle plateforme de prestation gérée commercialement en vue de combler l’énorme vide au niveau du financement des infrastructures en Afrique, un trou évaluée à 50 milliards de dollars US par an.

L’élaboration de propositions propres et les progrès institutionnels récemment observés témoignent de la détermination de l’Afrique à accélérer le développement des infrastructures, et donc la régionalisation. Lors du dernier sommet de l’UA, le Comité d’orientation des chefs d’État et de gouvernement a approuvé l’institutionnalisation d’une Semaine PIDA organisée par la Banque africaine de développement (BAD) en vue d’assurer le suivi des progrès accomplis.

L’élan des projets énergétiques régionaux en Afrique

Les partenariats énergétiques indiqués ci-dessous illustrent les avantages potentiels des méthodes de mise en œuvre et de suivi transfrontalières : l’Africa Power Vision (APV) réalisée avec Power Africa, le modèle du Centre pour les énergies renouvelables et l’efficacité énergétique(ECREEE) de la CEDEAO accompagnant l’initiative Énergie Durable pour Tous (SE4LL), une initiative mise en œuvre par la plateforme Africaine et la solution Africa GreenCo basée sur le PIDA.

• Africa Power Vision : Les ministres Africains de l’énergie et des finances réunis à l’occasion du Forum économique mondial (FEM) de Davos en 2014 ont décidé de créer l’APV. La vision fournit un modèle stratégique de mobilisation de ressources afin de permettre aux entreprises, aux industries et aux foyers africains d’avoir un accès plus rapide à l’énergie moderne. Elle dresse une liste de projets énergétiques basés sur des priorités régionales établies par l’Afrique et extraites en grande partie du Programme d’action prioritaire du PIDA, à savoir l’éventail de projets à court terme devant être achevés à l’horizon 2020. Le projet hydroélectrique Inga III qui changera les règles du jeu, l’emblématique projet solaire DESERTEC Sahara et la gigantesque ligne de transport d’électricité nord-sud couvrant la quasi-totalité du TFTA sont parmi les 13 projets sélectionnés. La note conceptuelle et le plan de mise en œuvre intitulés « De la vision à l’action » élaborés par le NEPAD, en collaboration avec l’initiative Power Africa dirigée par le gouvernement américain ont été approuvés lors du Sommet de l’UA de janvier 2015. Le paquet présente des mesures permettant de surmonter les impasses afin d’atteindre des objectifs quantifiables, la « méthode d’accélération » basée sur l’Outil de classement de projets par ordre de priorité (PPCT en anglais), l’atténuation des risques et le financement de projets d’électricité. Une conception innovante a été élaborée pour éviter les doublons, économiser des ressources, améliorer la coordination et encourager des actions transformatrices en établissant des Conseillers transactionnels Power Africa – APV portant deux casquettes, qui supervisent les plans d’investissement jusqu’à la clôture financière si et quand des projets énergétiques d’intérêt commun viennent à se chevaucher. Globalement, comme il est basé sur le PIDA, le partenariat APV permet de mutualiser les expertises tout en promouvant l’intégration économique régionale au niveau de l’électrification.

• Centre pour les énergies renouvelables et l’efficience énergétique de la CEDEAO : Le secrétaire général des Nations Unies, Ban Ki-moon a lancé l’initiative Énergie durable pour tous dans le monde entier dès 2011, dans le triple objectif de garantir l’accès universel à des services énergétiques modernes, doubler le taux mondial d’amélioration de l’efficacité énergétique et doubler la proportion d'énergies renouvelables dans le bouquet énergétique mondial à l’horizon 2030. Depuis sa création, SE4ALL a suscité un fort enthousiasme sur le continent et compte désormais 44 pays africains participants. Par conséquent, la plateforme africaine SE4ALL a été la première plateforme lancée en 2013. Organisée par la BAD en partenariat avec la Commission de l’UA, le NEPAD et le Programme des Nations Unies pour le développement (PNUD), son rôle consiste à faciliter la mise en œuvre de SE4ALL sur le continent. Le troisième atelier annuel de la plateforme africaine de SE4ALL tenu à Abidjan en février dernier a révélé le potentiel de cette « coalition créative » (Yumkella 2014) pour produire des résultats tant au niveau des plans d’action nationaux et des approches régionales concertées conformes à la vision continentale qu’à celui de l’ODD7 pour l’énergie et aux Contributions prévues déterminées au niveau national (CPDN) créés pour l’Accord de Paris. Avant tout, l’atelier a prouvé que la plateforme est capable de commencer efficacement à harmoniser les processus pour obtenir un résultat dans les différents pays. En dépit du fait que les États membres de la CEDEAO participent à SE4ALL, les ministres ouest-africains ont chargé leur centre énergétique régional, le CEREEC, de coordonner la mise en œuvre des Programmes d’action de SE4ALL (PA), qui sont des documents décrivant les mesures que doivent prendre les pays pour satisfaire les objectifs en matière d’énergies renouvelables et de là les Prospectus d’investissement (PI), les documents présentant les critères d’investissement relatifs aux PA. Par conséquent, la Politique relative aux énergies renouvelables (PER) et la Politique relative à l’efficacité énergétique (PEE) de la CEDEAO ont été formulées et adoptées. Un cadre de surveillance régional visant à enrichir un Cadre de suivi mondial, le système de mesure et de préparation de rapports SE4ALL, est en cours de conception. L’efficace modèle du CEREEC, en créant un pont entre les inventaires nationaux et les acteurs mondiaux, est sur le point d’être reproduit dans deux autres régions d’Afrique, la CAE et la SADC, avec l’appui de l’Organisation des Nations Unies pour le développement industriel (ONUDI).

• Africa GreenCo : Enfin, des initiatives comme Africa GreenCo sont en cours d’incubation. Ce véhicule prometteur, actuellement financé au moyen d’une subvention accordée par la Fondation Rockefeller, se veut à la fois un négociant et un courtier en électricité indépendamment géré dont la fonction consiste à déplacer de l’électricité là où elle est nécessaire. Ainsi, Africa GreenCo cherche à capitaliser sur les projets énergétiques du PIDA : en sa qualité d’acheteur intermédiaire solvable, elle prévoit d’utiliser à l’avenir son statut régional en guise de valeur ajoutée au niveau de la garantie contre les risques. À ce jour, Africa GreenCo continue à peaufiner les aspects juridiques, réglementaires, techniques et financiers de sa future structure et forge des liens avec des parties prenantes clés du secteur (États membres, banques de développement multilatérales, services publics africains de génération et d’interconnexion appelés pools énergétiques) avant l’achèvement de son étude de faisabilité en juin 2016.

Les partenariats précités indiquent des tendances encourageantes en direction d’une coopération plus symbiotique entre les différentes parties prenantes. Comme ils relèvent d’initiatives « faites maison », il est important de ne pas perdre de vue la dimension continentale. D’une part, les plans élaborés par l’Afrique ont plus de chances de réussir que des solutions importées uniformes et d’autre part, des efforts cohérents et combinés allant dans la même direction renforcent la confiance et l’émulation et attirent des soutiens. Ceci implique que pour remplir les accords intergouvernementaux, il est nécessaire avant tout de les adapter aux réalités locales à travers un processus d’intégration respectueux de l’espace politique. Cette intégration peut ensuite faire l’objet d’ajustements en fonction d’expériences fondées sur des données et des preuves concrètes. Entre ces engagements mondiaux et les procédures nationales, la dimension nationale demeure le lien indispensable : permettre aux pays de contourner le caractère artificiel de leurs frontières héritées de l’époque coloniale et leur offrir des choix concrets pour éradiquer la pauvreté dans l’unité. L’intégration régionale est donc le préambule à l’opérationnalisation du développement durable au sein de l’Afrique et une étape clé de son parcours en direction d’une participation active sur la scène mondiale. La régionalisation peut également faire évoluer les relations internationales, à condition qu’elle aille de pair avec un multilatéralisme équitable et une gestion durable des connaissances globales. C’est pourquoi l’ouverture qui en découle et la complexité rencontrée sont autant de paramètres utiles pour enrichir la conception de réponses locales pertinentes.

Ces réussites ouvrent de grandes perspectives en termes de nouvelles expériences et synergies. Elles représentent pour moi la promesse d’un monde meilleur. Celle que je me plais à imaginer est empreinte d’écosystèmes mutuellement bénéfiques pour les personnes et la planète. Elle encourage les liens inversés où tout le monde est gagnant, c’est-à-dire un monde où les économies en développement ont des retombées plus positives sur les pays industriels. C’est un monde où, par exemple, une région d’Afrique pourrait tirer des leçons de la crise grecque et vice-versa : un monde où la Chine pourrait tirer des enseignements du Corridor de développement de Maputo pour sa ceinture économique de la route de la soie. Un monde dans lequel des instituts jumelés effectuant des travaux de recherche conjoints dans les différents centres de connaissances régionaux prospéreraient, où des « fab labs » innovateurs pourraient ambitionner une aventure spatiale basée sur des déchets électroniques recyclés en imprimantes 3D. Dans un tel monde, des collaborations innovantes dans les domaines des sciences, des technologies, de l’ingénierie et des mathématiques (STEM) seraient encouragées. Celles-ci encourageraient la participation des femmes, et aussi celle de la diaspora en vue de développer des avancées techniques solides du point de vue écologique. Des efforts proportionnels, une volonté sans faille, une ingénuité autochtone et une créativité sans limites mettent cet avenir plus souriant à notre portée.

Au-delà de la reconnaissance de la voix africaine tout au long des processus intergouvernementaux, l’Afrique doit désormais consolider ses avancées en maintenant fermement sa position et en protégeant ses gains tout au long de la phase préliminaire. Le continent doit de toute urgence définir des tactiques spécifiques offrant le plus grand potentiel en termes d’inclusion et de création de capacités de production. Parallèlement, les acteurs du développement africain doivent démarrer un cycle vertueux d’apprentissage par la pratique en vue de créer une philosophie de développement endogène prenant en considération les meilleures pratiques adaptables et les échecs. Néanmoins, la seule approche capable de produire à la fois une transformation structurelle et un changement informé conformes aux stratégies à long terme propres au continent et dirigées par lui est… l’intégration régionale.  

[1] Issus respectivement des négociations intergouvernementales à l’occasion de la Troisième Conférence sur le financement du développement (FFD3), l’Agenda du développement post 2015 et la Conférence des Nations Unies sur les changements climatiques (COP21).

[2] Égypte, Madagascar, Maroc, Sierra Leone, Togo et Ouganda

[3] Comme précisé au Programme d’action d’Addis-Abeba par exemple : « Nous engageons instamment la communauté internationale, notamment les institutions financières internationales et les banques multilatérales et régionales de développement, à accroître leur soutien aux projets et aux cadres de coopération qui favorisent cette intégration régionale et sous régionale, notamment en Afrique, et qui améliorent la participation et l’intégration des entreprises et notamment des petites entreprises industrielles, en particulier celles des pays en développement, dans les chaînes de valeur mondiales et les marchés mondiaux. »

In 2015 the international community agreed on a set of ambitious sustainable development goals (SDGs) for the global society, to be achieved by 2030. One of the lessons that the implementation of the Millennium Development Goals (MDG s) has highlighted is the importance of a systematic approach to identify and sequence development interventions—policies, programs, and projects—to achieve such goals at a meaningful scale. The Chinese approach to development, which consists of identifying a problem and long-term goal, testing alternative solutions, and then implementing those that are promising in a sustained manner, learning and adapting as one proceeds—Deng Xiaoping’s “crossing the river by feeling the stones”—is an approach that holds promise for successful achievement of the SDGs.

Having observed the Chinese way, then World Bank Group President James Wolfensohn in 2004, together with the Chinese government, convened a major international conference in Shanghai on scaling up successful development interventions, and in 2005 the World Bank Group (WBG ) published the results of the conference, including an assessment of the Chinese approach. (Moreno-Dodson 2005). Some ten years later, the WBG once again is addressing the question of how to support scaling up of successful development interventions, at a time when the challenge and opportunity of scaling up have become a widely recognized issue for many development institutions and experts.

Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.”

In parallel with the recognition that scaling up matters, the development community is now also focusing on social enterprises (SEs), a new set of actors falling between the traditionally recognized public and private sectors. We adopt here the World Bank’s definition of “social enterprises” as a social-mission-led organization that provides sustainable services to Base of the Pyramid (BoP) populations. This is broadly in line with other existing definitions for the sector and reflects the World Bank’s primary interest in social enterprises as a mechanism for supporting service delivery for the poor. Although social enterprises can adopt various organizational forms—business, nongovernmental organizations (NGOs), and community-based organizations are all forms commonly adopted by social enterprises—they differ from private providers principally by combining three features: operating with a social purpose, adhering to business principles, and aiming for financial sustainability. Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.” (Figure 1)

Figure 1. Role of SE sector in public service provision

Social enterprises often start at the initiative of a visionary entrepreneur who sees a significant social need, whether in education, health, sanitation, or microfinance, and who responds by developing an innovative way to address the perceived need, usually by setting up an NGO, or a for-profit enterprise. Social enterprises and their innovations generally start small. When successful, they face an important challenge: how to expand their operations and innovations to meet the social need at a larger scale. 

Development partner organizations—donors, for short—have recognized the contribution that social enterprises can make to find and implement innovative ways to meet the social service needs of people at the base of the pyramid, and they have started to explore how they can support social enterprises in responding to these needs at a meaningful scale. 

The purpose of this paper is to present a menu of approaches for addressing the challenge of scaling up social enterprise innovations, based on a review of the literature on scaling up and on social enterprises. The paper does not aim to offer specific recommendations for entrepreneurs or blueprints and guidelines for the development agencies. The range of settings, problems, and solutions is too wide to permit that. Rather, the paper provides an overview of ways to think about and approach the scaling up of social enterprise innovations. Where possible, the paper also refers to specific tools that can be helpful in implementing the proposed approaches. 

Note that we talk about scaling up social enterprise innovations, not about social enterprises. This is because it is the innovations and how they are scaled up that matter. An innovation may be scaled up by the social enterprise where it originated, by handoff to a public agency for implementation at a larger scale, or by other private enterprises, small or large. 

This paper is structured in three parts: Part I presents a general approach to scaling up development interventions. This helps establish basic definitions and concepts. Part II considers approaches for the scaling up of social enterprise innovations. Part III provides a summary of the main conclusions and lessons from experience. A postscript draws out implications for external aid donors. Examples from actual practice are used to exemplify the approaches and are summarized in Annex boxes.

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