Policy Brief #184

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

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

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

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

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

First Inventor to File

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

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

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

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

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

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

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

Best Mode and Invalidity

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

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

Supplemental Examination

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

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

Pre-Issuance Submissions

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

Prior Commercial Use Defense to Infringement

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

Post-Grant Review Proceedings

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

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

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

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

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

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

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

Other Provisions

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

Fee Diversion

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

Studies Mandated by the AIA

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

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

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

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

Conclusion

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

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EXECUTIVE SUMMARY

A few influential Americans have begun to suggest that the United States should reduce its long-standing security commitment to Taiwan. Some say that Taiwan itself has chosen to improve relations with China, so the island has less need for advanced U.S. weaponry and a defense pledge. Others argue that Washington, to avoid unnecessary tensions with a rising China, should accommodate Beijing on the most neuralgic issue—Taiwan.

The first group overstates the limits of the ongoing Taiwan-China détente. True, progress has been made in normalizing, liberalizing, and institutionalizing the economic relationship. But, to the disappointment of many Chinese, none has occurred on political and security issues, because the Taiwan public is not ready to go there and serious conceptual differences exist on how to get there anyway. So the prospects for cross-Strait relations in the near-term are for modest, incremental progress only, or a stall.

The second group misunderstands the benefits and costs of a significant American accommodation to China regarding Taiwan (e.g. by sharply cutting back arms sales). In fact, Washington has frictions with China on a growing list of issues. Conceding to Beijing on Taiwan will not help us elsewhere. Moreover, our friends and allies (e.g. Japan and Korea) will worry that the United States might sacrifice their interests next for the sake of good relations with China. Finally, the primary reason China has failed to incorporate Taiwan on its terms is not U.S. arms sales but because its negotiating position is unacceptable to the Taiwan public.

As China rises and seeks to reshape East Asia more to its liking, how the United States responds will be a critical variable. It needs the right mix of accommodation and firmness. Giving way on Taiwan will neither pacify Beijing nor assure our allies.

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Introduction

Should the United States abandon Taiwan? Until recently, even to pose such a question would have been unthinkable in Washington. While the U.S. relationship with Taiwan may have had its ups and downs over the past six decades, but the strong American commitment has endured. But now, individuals who previously served in senior positions in the U.S. government are calling it into question. Theirs is not a modest proposal, and it deserves careful examination.

Some observers believe that Taiwan has become a strategic liability. They remind us that China regards the settlement of the Taiwan problem as its internal affair, yet the United States continues to provide the island with advanced weaponry and at least an implicit pledge to come to its defense. They echo Chinese diplomats who argue that our arms sales are the major obstacle to good U.S.-China relations. (These diplomats also assert that U.S. arms sales both discourage Taipei to negotiate seriously with Beijing and encourage Taiwanese politicians who have separatist agendas.) Therefore, it is argued, the United States needs to reconsider fundamentally its security support for Taiwan.

The most prominent voice for this point of view is Zbigniew Brzezinski, Jimmy Carter’s national security adviser. He argues that the hostility that arms sales foster in Beijing precludes whatever strategic cooperation a declining United States can secure from a rising China. Moreover, he says, “it is doubtful that Taiwan can indefinitely avoid a more formal connection with China,” and points to some version of the unification formula Beijing used for Hong Kong as a possible basis. That in turn would end the island’s need to depend on the United States for its security.[1] Others in this camp, more or less, include retired admiral Bill Owens, retired ambassador Chas Freeman, Charles Glaser of George Washington University, and the members of a policy panel assembled by the Miller Center of the University of Virginia.[2]

To make the conversation even more interesting, there are two other versions of this abandonment idea, ones that start with how Taiwan has changed since 2008:

• At least one conservative Congressman, a long-time supporter of Taiwan, believes that Taiwan was now working with an “autocratic China,” and since he opposes autocracy, the island’s government no longer deserved his support.[3] That is, Taiwan has abandoned U.S. values, which is bad, so he has abandoned Taiwan.
   
• A Portland State University scholar has argued that Taiwan seems to have decided that its own best interests require it to accommodate to China and rely much less on the United States (as Finland accommodated the Soviet Union during the Cold War). But in his view, this is good for Washington because it eliminates a long-time burden.[4]  And a Taiwan scholar recently argued that it was in the island’s own interest to get out of the middle of the China-U.S. rivalry.[5]

In the abstract, it should not be surprising that some Americans are rethinking U.S. support for Taiwan. We live in a new world. China’s power and international role are growing. It is in the interest of the United States to maximize areas of cooperation and mutual benefit with Beijing where possible, even as we demonstrate firmness when it overreaches (as it has). It is not in the U.S. interest to act in ways that lead Chinese leaders to conclude that America pursues a policy of containment. So, this logic goes, perhaps Washington should end commitments that are so offensive to China that it will not cooperate with the United States on projects of strategic value to us. Moreover, as the People’s Liberation Army (PLA) becomes more capable, America may find it harder operationally to honor its commitments to Taiwan, even if it wished to do so.

Taiwan Shifts Strategy

To sort through these competing ideas, it is necessary to understand how U.S.-China-Taiwan relations have changed in the last five years and what it means for U.S. policy.

For twenty-five years, Taiwan has faced a serious dilemma. On the one hand, many Taiwan companies benefit from investing in China to produce goods for the Chinese and international markets. On the other hand, China wishes to end Taiwan’s separate political status on terms similar to that used for Hong Kong, which most Taiwan people oppose. From around 1995 to 2008, Taiwan’s response to China’s political goals was to emphasize the island’s sovereignty, which only led Beijing to fear that Taiwan’s leaders intended to create a totally independent country. China in turn built up military capabilities to deter what it feared, which only made Taiwan more anxious. Washington worried that this action-reaction spiral might lead to war, and it periodically opposed some of Taipei’s initiatives.

Ma Ying-jeou won Taiwan’s 2008 presidential election by articulating a different vision: that the island could better preserve its prosperity, freedom, dignity, and security by engaging China rather than provoking it. Engagement would focus first on enhancing economic cooperation, thus avoiding contentious and unproductive political arguments. Expanding business ties would yield concrete benefits for both sides of the Taiwan Strait. Opening Taiwan universities to Mainland students would fill out enrollments and expose Chinese young people to a democratic society. In short, Ma believed, Taiwan could give China such a large stake in peace that it would not dare to risk that stake by coercing the island into submission. He made significant progress during his first term in removing obstacles to business and liberalizing trade, most notably in reaching an Economic Cooperation Framework agreement with China in 2010, the first step toward creating a free-trade area. Taiwan bounced back fairly quickly from the global economic crisis and had 4 percent growth in 2011. A growing stream of Chinese tourists buoyed some sectors of the Taiwan economy, and the number of Mainland students grew steadily.

Ma had another reason for engaging China: the United States. Taipei’s relations with Washington had suffered before 2008 because U.S. officials feared Taiwan’s political initiatives would spark a Chinese over-reaction, creating a conflict that might require American intervention. The reduction of tensions that Ma’s policies brought about calmed Washington’s fears and increased U.S. confidence that Taiwan’s intentions were constructive. The Bush and Obama administrations responded by improving U.S.-Taiwan relations, by approving three large arms-sales packages and extending other benefits.

Yet Ma’s China policy was not a total accommodation to Chinese wishes. Even though Beijing in 2009 exerted pressure on Taiwan to move toward political and security talks, Ma pushed back, and for good reason. The Taiwan public was not yet ready to support them, particularly the approximately 25 percent who retain the goal of total independence. In any case, there were serious conceptual differences between the two sides, specifically whether Taiwan was a sovereign entity for purposes of cross-Strait relations and the island’s international role. On the security side, China continued to build up its military capabilities relevant to Taiwan—particularly ballistic and cruise missiles. According to one think-tank’s analysis, an intensive missile barrage by the PLA can now ground Taiwan’s air force in the very early stages of a conflict, and Taiwan’s current defense strategy depends on its aircraft getting off the ground.[6] So Ma has spurned Chinese proposals for a peace accord because he does not see how it would improve Taiwan’s security, and his caution has persisted to this day.

In effect, Ma has pursued a mixed or hedging strategy toward China: engage it in areas that both benefit Taiwan and encourage Chinese restraint (economics and education); deflect Beijing on proposals that are not in the island’s interests (politics and security); and preserve a good relationship with the United States (to guard against the worst). A significant part of the Taiwan public—known as the Green Camp—was not happy with Ma’s mix of engagement and firmness. They feared he had put the island on a slippery slope to subordination and unification on China’s terms. The Greens would have preferred more firmness and less engagement. Yet so far, Ma’s strategy has the backing of the majority of island’s public, usually known as the Blue Camp. In the last election apparently, around 55 percent of voters approved of his approach while 45 percent remained skeptical or deeply opposed. 

Back to the Question of Abandonment

The fact that Ma is hedging the island’s bets should be reassuring to Americans who worry that Taiwan is, in effect, “abandoning the United States” for the sake of relations with China. Such strategic appeasement would only be happening if Taipei were willing to concede to Beijing on political and security matters. Yet Taiwan has been unwilling to abandon its claim that it is a sovereign entity and accept a solution similar to that applied to Hong Kong. Instead, it asserts what Ma calls “the sovereignty of the Republic of China.” Moreover, Taipei sees a continuing need for a deterrent against China’s use of its growing military capabilities. Even as it sees the value of enhancing Beijing’s stake in peace, it does not fully trust statements of peaceful intentions. And it is certainly not prepared to terminate its special security relationship with the United States.[7]

The more difficult question is whether the United States, for the sake of its own relationship with China, should, in effect, abandon Taiwan. China believes that U.S. political and security support for Taiwan is the primary reason it has not achieved its unification goal, because it fortifies the confidence of the island’s leaders that they can get away with refusing to negotiate on PRC terms. So Beijing believes that if it could induce Washington to end arms sales to Taiwan’s military, drop even an implicit commitment to defend the island if attacked, and support unification, its problem would be solved. So China would be very pleased if the United States abandoned Taiwan, and has suggested that if only Washington ended arms sales, U.S.-China relations would be problem free.

American analysts have offered several compelling reasons why the United States should not dissociate itself from Taiwan as long as Taiwan desires American support:[8]

• Although Taiwan has at times been the most important source of U.S.-China conflict, it is not the only one. For example, Beijing’s goals in East Asia are not limited to bringing the island back into the PRC fold. In addition, it seeks to expand its security perimeter away from its eastern and southern coast, where it was for decades. That in turn has meant that the PLA navy and air force are operating increasingly in the traditional domain of U.S. and Japanese forces.[9] Removing Taiwan as a problem would in no way end or reduce this mutual impingement; it would only change its location. Taiwan aside, Beijing would still regard American “socialization” as negative.
   
• U.S. allies and partners—Japan, the Republic Korea, and others not necessarily in the Asian region—have have much at stake in Washington’s future approach to Taiwan. Simply put, a United States that would abandon Taiwan could abandon them. Of course, there may be hypothetical reasons why America might withdraw support that stem from Taiwan’s policies rather than its own commitment. So the reasons for any abandonment would be important. But the fear remains.
   
• Whatever China says, U.S. arms are actually not the reason that Beijing has been unable to bring Taiwan “into the embrace of the Motherland.” More to the point, China has not been able to persuade Taiwan’s government and public to accept its formula, which is called “one country, two systems” and was the one used for Hong Kong. If China were to make an offer that was actually to Taiwan’s liking, it would not refuse because of U.S. arms sales. Of course, a weak and friendless Taiwan might conclude that it had no choice but to settle on whatever terms it could extract. But that is not an outcome to which Washington should be a party (nor is it really in China’s interest to gain Taiwan through intimidation).
   
• Finally, how a status quo United States and a reviving China cope with each other—their key foreign policy challenge for the rest of the century—will be played out over the next few decades in a series of test cases. North Korea, maritime East Asia, and Iran are a few of them. Taiwan is another. While active U.S. opposition to Taiwan’s unification with the Mainland would understandably lead Beijing to infer that our intentions are hostile across the board, supporting Beijing’s approach when Taipei objects would be a serious demonstration of weakness.

Should the United States concede to China on Taiwan, the lessons that Beijing would learn about the intentions of the United States would likely discourage its moderation and accommodation on other issues like Korea or maritime East Asia; in that respect, America’s friends and allies are right. Continuity of U.S. policy toward Taiwan will not guarantee that China’s actions in other areas will support the status quo, but it increases the likelihood that it will. Conversely, a China that addresses its Taiwan problem with creativity and due regard to the views on the island says something positive about what kind of great power the PRC will be. A more aggressive approach, one that relies on pressure and intimidation, signals reason for concern about its broader intentions. In this regard, Taiwan is the canary in the East Asian coal mine.

A Slippery Slope?

Even if Taipei does not make a proactive strategic decision to appease Beijing, and even if Washington does not seek to curry Chinese favor by sacrificing Taiwan’s interests, there remains the possibility that Taiwan might undermine itself through inattention or neglect. That is, Taiwan might assume that Beijing’s intentions are so benign that it is prepared to accept some version of the status quo over the long term. Yet China has a different objective—ending Taiwan’s de facto independence more or less on its terms—and it may not have infinite patience. The danger is, therefore, that a frustrated China might seek to exploit the power asymmetry between the two sides of the Strait and intimidate Taiwan into accepting “an offer it can’t refuse.”

So what can Taiwan do to forestall that day? The first thing is to not create the impression in Beijing that the door on unification is closing forever—which Taiwan is currently doing. In addition, there are things it can do at the margin to strengthen itself and therefore increase the confidence needed to resist PRC pressure.

• Economically, sustain the island’s competitiveness in shifting to a knowledge-based economy, and by liberalizing its economic ties with all its major trading partners, not just China. This will require eliminating some protectionist barriers, but the structural adjustment thus created will work to Taiwan’s benefit.
   
• Politically, reform the political system so that it does a better job of addressing the real challenges that Taiwan faces (rather than focusing on relatively superficial issues).
   
• Also politically, foster a clearer sense of what it means to say that Taiwan or the ROC is a sovereign entity, not just for its role in the international system but also regarding cross-Strait relations.
   
• Militarily, enhance the deterrent capabilities of Taiwan’s armed forces in ways that raise the costs and uncertainties for Beijing if it were ever to mount an intimidation campaign.

None of these forms of self-strengthening will be easy. But they will buoy Taiwan’s psychological confidence and reduce the chances of PRC pressure in the first place.

Because the United States has an interest in China approaching its Taiwan “test case” in a constructive manner—that is, avoiding intimidation and accommodating Taiwan’s concerns—it should help Taiwan where it can to improve its odds. The most obvious ways are economically, by drawing Taiwan into the circle of high-quality liberalization, and militarily, by supporting innovative and cost-effective ways to enhance deterrence.

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Situated in the heartland, Missouri reflects the full range of American reality.

The state is highly urban yet deeply rural. It contains two bustling metropolises, numerous fastgrowing suburbs, and dozens of typically American small towns. Elsewhere lie tranquil swaths of open country where farmers still rise before dawn and the view consists mainly of rich cropland, trees, and sky.

Missouri sums up the best of the nation, in short.

And yet, Missouri also mirrors the country’s experience in more problematic ways.

The spread of the national economic downturn to Missouri, most immediately, has depressed tax collections and increased the demand for social services, resulting in a troublesome state and local fiscal moment. This has highlighted pocketbook concerns and underscored that the state must make the most of limited resources.

At the same time, Missourians, like many Americans, have many opinions about how their local communities are changing. They are divided—and sometimes ambivalent—in their views of whether their towns and neighborhoods are developing in ways that maintain the quality of life and character they cherish.

All of which explains the double focus of the following report by the Brookings Institution Center on Urban and Metropolitan Policy. Intended to speak to the simultaneous concern of Missourians for fiscal efficiency and communities of quality, "Growth in the Heartland: Challenges and Opportunities for Missouri" brings together for the first time a large body of new information about both the nature and costs of development patterns in the Show-Me State.

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Missouri's population is spreading out, adding to the costs of providing services and infrastructure across the state, according to a new study released today by the Brookings Institution Center on Urban and Metropolitan Policy.

The 84-page study, Growth in the Heartland: Challenges and Opportunities for Missouri, reports that Missouri's population is quickly dispersing, with smaller metropolitan areas experiencing some of the state's fastest growth and residency in unincorporated areas on the rise. Though new residents and jobs fueled prosperity in the 1990s, the report finds that growth has slowed in the past year, and suggests that the state's highly decentralized development patterns could become troublesome as Missouri contends with a slowing economy and serious budget deficits.

Sponsored by the Ewing Marion Kauffman Foundation, Growth in the Heartland provides the most comprehensive and up-to-date body of research and statistics yet assembled analyzing the direction, scope, and implications of development in Missouri. In addition to assessing the consequences of those trends for the state's fiscal health, economic competitiveness, and quality of life, the report addresses the potential role of state and local policy in shaping those trends in the future. Specific findings of the report conclude that:

• Growth in the Columbia, Springfield, Joplin, and St. Joseph metropolitan areas strongly outpaced that of the Kansas City and St. Louis metropolitan areas in the 1990s. Altogether the four smaller areas captured fully one-quarter of the state's growth and doubled the growth rate of the Kansas City and St. Louis areas.
  
  
• Population and job growth also moved beyond the smaller metro areas and towns into the state's vast unincorporated areas. Overall, residency in these often-outlying areas grew by 12.3 percent in the 1990s—a rate 50 percent faster than the 8.1 percent growth of towns and cities.
  
  
• Most rural counties reversed decades of decline in the 1990s, with eight in ten rural counties experiencing population growth and nine in ten adding new jobs. By 2000, more rural citizens lived outside of cities and towns than in them, as more than 70 percent of new growth occurred in unincorporated areas.

"Missouri experienced tremendous gains during the last decade, but the decentralized nature of growth across the state poses significant fiscal challenges for the future," said Bruce Katz, vice president of Brookings and director of the policy center. "The challenge for Missouri is to give communities the tools, incentives, and opportunities to grow in more efficient and fiscally responsible ways."

The Brookings Institution Center on Urban and Metropolitan Policy is committed to shaping a new generation of policies that will help build strong neighborhoods, cities, and metropolitan regions. By informing the deliberations of state and federal policymakers with expert knowledge and practical experience, the center promotes integrated approaches and practical solutions to the challenges confronting metropolitan communities. Learn more at www.brookings.edu/urban.

      

Why is Springfield's economy proving so resilient?

Several reasons come to mind: You're a manageably sized regional hub. You've got a university and important hospital assets. And you stand at the brink of an enormously attractive natural area -- the Ozarks.

More and more in today's footloose economy, jobs and people flock to livable places with affordable housing, vibrant downtowns, cultural amenities and lots of close-by outdoor recreation.

And Springfield's got all that. Well, OK: Downtown hardly buzzes with "24-7" meeting and living as yet. But the university keeps students around, and meanwhile, nearby Branson remains one of the nation's foremost "drive-to" cultural attractions. Likewise, the beautiful "lake country" draws visitors and second-home buyers from all over the Midwest. In this case natural beauty really is natural capital: The famous Ozarks ambience continues to support a $1-billion-a-year tourist sector to cushion the blows of any national economic downturn.

No wonder the region paced the state's growth in the 1990s and now holds on better in bad times. Greater Springfield has service jobs, rolling hills, lakes, Andy Williams, retirees and their pensions, and reasonably priced new subdivisions. What's not to like?

But here's the harder question: Can Springfield stay attractive? Can it stay resilient? The worry is that signs of strain have now appeared after a decade of fast growth.

Many of these strains my colleagues and I detailed in a recent Brookings Institution report I co-authored, titled "Growth in the Heartland: Challenges and Opportunities for Missouri."

Springfield, we demonstrated, sprawled in the 1990s. Yes, the city proper grew by 8 percent. But mostly population moved ever outward during the decade, and that, we said, has brought problems.

Thousands of people flocked to smaller outlying towns like Willard, Strafford, Republic, Clever, Nixa and Ozark, which hit "hypergrowth" in the 1990s and struggled to keep up. Christian and Webster counties grew unsustainably by 66 and 31 percent, respectively. And even more disturbing some 28,000 people settled in unincorporated fringe areas ill-equipped to accommodate them with modern sewers and good services.

The result: Septic and fertilizer seepage from scattered new homes exacerbates the water-quality problems that have fouled Lake Taneycomo and Table Rock Lake. Taxes are increasing as local governments strain to provide the necessary roads, services or sewer lines in places that never needed them. And with more sprawl coming, more traffic and more mini-malls could cost the region its reputation as the heartland of rural America -- quaint, scenic and friendly. The bottom line: Highly dispersed, low-density development may well be undermining the durability of its growth.

In that sense, the real test of Springfield's resilience lies ahead and turns on its ability to manage its growth to make it sustainable. What is more, the best way for Springfield to continue to grow in high-quality ways would seem to be to continue to set the standard for land-use and environmental reform in Missouri -- a state that has lagged on promoting sensible land use and planning.

As a state, after all, Missouri needs to update its badly outmoded planning statutes to provide its regions more tools to manage change.

It needs to promote regional solutions among its many localities. And it needs to better align its transportation and infrastructure investment policies with the principles of sound land use and sensible planning.

In this regard, what the state does -- or doesn't do -- to manage growth matters for Springfield because, ultimately, it is the state that sets the rules for what type of growth occurs all over. By remaining virtually laissez-faire on growth and development topics, the state of Missouri may well be undercutting its future competitiveness.

Given that, Springfield should take seriously the fact that with its strong growth, fresh voice and signature environmental assets, it is well positioned to lead the state in promoting reform.

So Springfield should step forward on these issues -- as the state's new economic driver, and as its most progressive region.

Already southwest Missouri business leaders have come together to protect the lakes. Now the region should show the way in other ways, by hammering out a regional system for managing fast growth; rationalizing local government competition; and insisting on state action to allow all regions to make headway.

For that is the way for the Springfield region to prosper: To help itself, it must help nudge the entire state along. Only in that fashion will a distinctive region maintain its distinctive vitality.

      

Executive Summary

Tax increment finance (TIF) is a popular and potentially powerful tool for places that need economic development the most yet have the least to spend. By allowing jurisdictions to use portions of their tax base to secure public-sector bonds, the mechanism allows fiscally strapped localities to finance site improvements or other investments so as to "level the playing field" in economic development.

However, poorly designed TIF programs can cause problems. Not only can they increase the incentives for localities to engage in inefficient, zero-sum competition for tax base with their neighbors. Also, lax TIF rules may promote sprawl by reducing the costs of greenfield development at the urban fringe. It is therefore critical that state legislatures design TIF rules well.

In view of this, an analysis of the way TIF is designed and utilized in Missouri shows that:

• Missouri law creates the potential for overuse and abuse of TIF. Vague definitions of the allowable use of TIF permit almost any municipality, including those market forces already favor, to use it. Weak limits on its use for inefficient inter-local competition for tax base touch off struggles between localities. And the inclusion of sales tax base in the program tilts it toward lower-wage jobs and retail projects, which rarely bring new economic activity into a region.
  
  
• Thanks to these flaws, TIF is used extensively in high-tax-base Missouri suburban areas with little need for assistance in the competition for tax base. This is especially true in the St. Louis metropolitan area. There, TIF money very frequently flows to purposes other than combating "blight" in disadvantaged communities' its classic purpose. In fact, less than half of the 21 St. Louis-area cities that were using TIF in 2001 were disadvantaged or "at-risk" when evaluated on four indicaters of distress. On another measure, just seven of the 20 suburban areas using TIF fell into the "at-risk" category.
  
  
• TIF is also frequently being used in the outer parts of regions' particularly in the St. Louis area. Most notably, only nine of the St. Louis region's 33 TIF districts lie in the region's core. Conversely, 14 of the region's 38 TIF districts lie west of the region's major ring road (I-270). These districts, moreover, contain 57 percent of the TIF-captured property tax base in the region. By contrast, the Kansas City region shows a pattern more consistent with the revitalization goals of TIF. The vast majority of the districts lie in the region's center city, though the huge size of the city means many are still geographically far-flung.

In sum, poorly designed TIF laws are being misused at a time when state and local fiscal pressures require every dollar be spent prudently. As a result, a potentially dynamic tool for reinvestment in Missouri's most disadvantaged communities threatens to become an engine of sprawl as it is abused by high-tax-base suburban areas that do not need public subsidies.

For these reasons, Missouri would be well-served by significant reforms in the laws governing TIF:

• The allowable purposes for TIF should be more strictly defined to target its use to places with the most need for economic development.
  
  
• Higher level review of local determinations that TIF subsidies will support net contributions to the regional or state economy (the "but-for" requirement) should be implemented.
  
  
• Local TIF administrators should be required to show that TIF subsidies are consistent with land-use and economic development needs both locally and in nearby areas.

If such reforms were put in place, TIF could be returned to its attractive main purpose: that of providing resources that would not otherwise be available to localities that badly need them to promote needed economic development and redevelopment.

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Executive Summary

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

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

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

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

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

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

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

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

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

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

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

      

Event Information

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

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

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

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

Event Materials

• Agenda
• Presentation
• Biographies

       

This is the fourth in a series of reports on the demographic and political dynamics under way in key “battleground” states, deemed to be crucial in deciding the 2008 election. As part of the Metropolitan Policy Program’s Blueprint for American Prosperity, this series will provide an electoral component to the initiative’s analysis of, and prescriptions for, bolstering the health and vitality of America’s metropolitan areas, the engines of the U.S. economy. This report focuses on two major battleground states in the South, Virginia and Florida, which serve as bookends to an emerging New South.

Virginia and Florida have eligible voter populations that are rapidly changing. White working class voters are declining sharply while white college graduates are growing and minorities, especially Hispanics and Asians, are growing even faster. These changes are having their largest effects in these states’ major metropolitan areas, particularly Miami and rapidly-growing Orlando and Tampa in Florida’s I-4 Corridor and the suburbs of Washington, D.C. in Northern Virginia. Other large metro areas in these states are also feeling significant effects from these changes and will contribute to potentially large demographically related political shifts in the next election.

In Virginia, these trends will have their strongest impact in the fast-growing and Democratic-trending Northern Virginia area, where Democrats will seek to increase their modest margin from the 2004 election. The trends could also have big impacts in the Richmond and Virginia Beach metros, where Democrats will need to compress their 2004 deficits. Overall, the GOP will be looking to maintain their very strong support among Virginia’s declining white working class, especially in the conservative South and West region. The Democrats will be reaching out to the growing white college graduate group, critical to their prospects in Northern Virginia and statewide. The Democrats will also be relying on the increasing number of minority voters, who could help them not just in Northern Virginia, but also in the Virginia Beach metro and the Richmond and East region.

In Florida, these trends will have their strongest impacts in the fast-growing I-4 Corridor (36 percent of the statewide vote), which, while Democratic2 trending, is still the key swing region in Florida, and in the Miami metro, largest in the state and home to 27 percent of the vote. The trends could also have big impacts in the South and North, where Democrats will be looking to reduce their 2004 deficits in important metros like Jacksonville (North) and Sarasota and Cape Coral (South). Across the state, the GOP needs to prevent any erosion of support among white working class voters, especially among Democratic-trending whites with some college. They will also seek to hold the line among white college graduates, whose support levels for the GOP are high but declining over time. Finally, the support of the growing Hispanic population is critical to GOP efforts to hold the state, but this group is changing generationally and in terms of mix (more non-Cuban Hispanics), which could open the door to the Democrats.

Both of these states are near the top of the lists of most analysts’ list of battleground states for November 2008. Florida was a very closely contested state in both 2000 and 2004 (especially 2000). But Virginia’s status as a battleground is new to 2008. Yet in both states the contested political terrain reflects the dynamic demographic changes occurring within them. With 27 and 13 electoral votes, respectively, all eyes will be on Florida and Virginia on election night.

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• Maps and Figures, Part One
• Maps and Figures, Part Two

       

Earlier this month, Missouri voters overwhelmingly rejected a 10-year, 3/4 cent sales tax increase to boost statewide transportation investment. With local referendums an increasingly popular method to raise transportation funding in an era of federal uncertainty, the result has lessons for Missouri’s transportation interests and the country as a whole.

Like many states, Missouri has a clear infrastructure deficit. A legislatively-mandated citizens committee found the state needs an additional $600 million to $1 billion in investment per year. The problem is finding the money. Outside of federal funds, the state primarily relies on a 17.3 cent gasoline tax and local property taxes to fund transportation projects, plus location-specific revenue streams like a half-cent sales tax in St. Louis city and county. Yet with Missouri residents driving less in recent years—down 5 percent per capita between 2000 and 2012-—there is less money available to fund critical projects.

This vote offered one remedy. The statewide bump in sales tax would’ve generated upwards of $5 billion over the ten-year period. The new monies would go to 800 projects across Missouri, primarily for roadways. The governance was a similarly unequal split, with the state department of transportation directly controlling all but 10 percent of the new revenue.

And this is where the referendum’s problems become clear. While each of the state’s seven transportation districts managed their own project list, there was no guarantee local sales taxes would be spent on local projects. There were also legitimate questions whether a heightened focus on roadways made sense in the face of falling statewide driving. This was at the heart of the opposition argument, led by Missourians for Better Transportation Solutions.

In many ways, the Missouri results reflect what happened in a failed 2012 Atlanta referendum. That transportation package contained a hodgepodge of road and rail projects, barely increased connectivity across the sprawling metro region and couldn’t align local interest groups. Much like Missouri, Atlanta has clear transportation needs—but voters sensed the current plan wouldn’t do enough to adequately improve their commutes and livability.

As Missouri’s transportation leaders regroup, they’d be wise to follow the “economy-first” lesson of successful referendums in places like Los Angeles, Denver and Oklahoma City. The common thread in all three was a great job proving the need for greater infrastructure investment. But as my colleagues outlined in a recent report, they also captured how transportation could support industrial growth and metro-wide economic health. Americans have proven time and again they’ll pay for transportation projects, but they want to know what they’re getting and how it will benefit their communities.

In this sense, I’m heartened by a recent Kansas City Star editorial related to their failed streetcar vote the same day. Even with a failed vote, the metro area still needs a better infrastructure network. The key is for public, private and civic leaders to continue working with the public to determine which transportation investments will best support regional economic growth for decades to come.

Ballot measures may fail, but they’ll always provide lessons to improve the plans that will pass.

       

The full story of the killing of Michael Brown, a young, black, unarmed man shot by a policeman in Ferguson, Missouri, is still unfolding—and the truth will not be known for some time. It is only after full investigations are completed that an objective evaluation of the incident can be made. Nonetheless, there is no doubt that the killing of the young man was unfortunate and has generated a serious debate about race relations in America, and on the relations between police and the communities that they are supposed to protect. The riots and massive looting portrayed not only the extent of criminality in America’s inner cities, but also the economic marginalization of the minority communities.

Coming not long after the successful U.S.-Africa Leaders Summit held in Washington, the Ferguson incident and the follow-up demonstrations have been rather unfortunate in as far as how Africans view America—in a way questioning America’s standing as a protector of human rights. The hostility towards the United States in regard to its treatment of African-Americans has dominated social media with claims that the incident shows that America should not claim leadership when it comes to human rights. Such criticisms by many other countries, including Russia and China, are widespread.

I was particularly surprised by the comments in the Kenyan media coverage of this topic. Here are some statements on the topic by readers of the most popular paper there—the Daily Nation:

(This is an apparent reference to the fact that the United States government issues travel advisories to countries like Kenya when such incidents occur and there are riots.)

(This statement is in reference to the U.S. government’s actions following the 2007-2008 post-election violence in Kenya.)

       

Municipal elections in Ferguson, Mo. are fast approaching. Amid the backdrop of the US Department of Justice identifying systemic racial bias by law enforcement and an over-reliance on traffic fines and court fees for revenue, there are great challenges to overcome.

It would be one thing if Ferguson was unique. It is not.

Ferguson (containing just over 21,000 people) is one of 91 jurisdictions in St. Louis County, each with its own governments to run, services to provide, and budgets to balance. This kind of governmental fragmentation, a product of state law, is repeated in many metropolitan areas across the country. Suburban fragmentation makes providing public services inefficient; complicates regional planning; and, according to a recent OECD report  diminishes economic growth, productivity, and social mobility.

The problems wrought by fragmentation have only been compounded in recent years by rapid economic and demographic changes. In the 2000s, suburbs in the nation’s largest metro areas became home to more poor residents and more African Americans than cities for the first time. Since 2000, the number of high-poverty neighborhoods (with poverty rates above 20 percent) more than doubled in the suburbs, while the number of majority-minority neighborhoods grew by almost half.

Many suburban communities dealing with rising poverty and new populations are ill-equipped to address growing and changing needs. That’s particularly true in places like Ferguson, where population and jobs have declined over the years. According to new Brookings research, residents of Ferguson lived near 14 percent fewer jobs in 2012 than they did in 2000. The resulting strains on local tax bases amount to one reason that local governments throughout the St. Louis region came to rely heavily on revenue-raising tactics like traffic fines and court fees.

Part of the mandate of the Ferguson Commission convened by Missouri Governor Nixon is to address the issue of governance, which will require confronting the region’s fragmented landscape. The commission can learn from states that have encouraged the sharing of services across municipalities or regions that are pursuing more collaborative approaches to respond to shared challenges around issues like housing, transportation, or community development.

But while these strategies can reduce the typically competitive approaches employed by neighboring suburbs, they still come up against deeper structural limitations that collaboration alone cannot overcome. The commission should consider a bolder response to the region’s fragmentation and fiscal challenges.

One model the commission can learn from is Minneapolis-St. Paul’s regional revenue sharing structure.

Established in 1971 by the Minnesota Fiscal Disparities Act, Minneapolis-St. Paul’s regional tax base sharing mechanism gives residents access to adequate resources for local services like public safety, irrespective of where they live. According to a study by Myron Orfield and Nicolas Wallace, the law has dramatically reduced tax disparities between high and low-income areas, allowing for reinvestment in the central cities and in fiscally challenged communities. And it has reduced the incentive for municipalities to “steal” revenue-generating land uses from neighbors (very frequently a waste of taxpayer dollars), promoting more integrated regional economic development.

The model works by mandating that each municipality within the designated seven-county area contribute 40 percent of its annual growth in commercial-industrial tax revenues to a regional pool. These resources are then redistributed to the participating municipalities based on local capacity. The mechanism helps equalize local available resources, filling local budget gaps where they exist, without undermining local autonomy.

For the vast majority of communities, the sharing program has meant lower taxes and better services. A 2012 study concluded that without the program, nearly 80 percent of the region’s 186 municipalities would have to raise taxes to maintain their current level of services. Revenue sharing has enabled the cities of Minneapolis and St. Paul to invest in higher quality public services like policing and education over the decades since the law was enacted. Many older suburbs bear less of the public burden for repairing old infrastructure, renewing public facilities, cleaning up brownfields, upgrading neighborhood housing, or dealing with abandoned properties. Even many developing bedroom suburbs have benefited from revenue sharing since these places often lack a strong commercial tax base, leading to shortages in infrastructure or education funding.

These results indicate that regional revenue sharing can enable at-risk suburbs like Ferguson to pay for basic services like public safety without relying excessively on fining their small citizenries.

The path to creating revenue sharing programs in our metropolitan areas runs through state legislatures. The Minnesota law was passed in the 1970s with “a unique coalition of central-city and suburban legislators working together to ensure the future economic vitality of the entire state.” The same case should be made today in Missouri to rural, urban, and suburban representatives alike. With better services and lower taxes for the vast majority of municipalities, the political math adds up.

As Orfield and Wallace put it, regions facing growing economic, social, and fiscal disparities have a choice: “allow the disparity to deepen or work to find solutions that can benefit all.” If we are serious about fixing Ferguson and other places like it, states across the country, starting with Missouri, must address the structural governance and fiscal flaws that lie at the heart of the matter. 

       

Event Information

As the prevalence of drug-resistant bacteria continues to rise, there is a pressing need for new drugs to combat infections by these organisms. However, research and development in this area has slowed, creating a public health concern that we lack the drugs necessary to treat multi-drug resistant infections. Challenges to promoting antibacterial drug development may be scientific, methodological, regulatory, or economic in nature.

On Wednesday, May 9, 2012, the Engelberg Center for Health Care Reform convened an expert workshop, "Facilitating Antibacterial Drug Development,” that explored solutions to methodological and regulatory challenges that could make the development process more efficient. This meeting brought together diverse multi-stakeholder experts—including medical product developers, health care professionals, researchers, patient advocates, representatives of the U.S. Food and Drug Administration, and other groups—to explore the following issues:

• Existing paradigms for antibacterial drug development;
• Novel approaches to further antibacterial drug development, including use of pharmacokinetics and pharmacodynamics, Bayesian methods, innovative clinical trial designs, new data sources, alternate clinical endpoints, and new regulatory tools; and
• Short- and long-term opportunities to advance the antibacterial drug development enterprise through collaboration among stakeholders, improved regulatory science, and other means.

For more information on FDA’s Antibacterial Drug Development Task Force, click here.

Event Materials

• May 9 Event Summary
• Antibacterial Drug Development Participant List
• Facilitating Antibacterial Drug Development Agenda
• Facilitating Antibacterial Drug Development Discussion Guide
• Panel 1 Brad Spellberg Presentation
• Panel 1 George Talbot Presentation
• Panel 1 John Powers Presentation
• Panel 1 Thomas Fleming Presentation
• Panel 2 George Drusano Presentation
• Panel 2 Scott Emerson Presentation
• Panel 3 Daniel Benjamin Presentation
• Panel 3 Edward Cox Presentation
• Panel 3 John Rex examples
• Panel 3 John Rex Presentation
• Panel 4 Helen Boucher Presentation

       

Event Information

As part of ongoing cooperative work with the U.S. Food and Drug Administration, the Engelberg Center for Health Care Reform has formed a council to bring together expert perspectives on the challenges facing antibacterial drug development. Designed to include representatives from academia, patient advocacy groups, industry, providers, and government agencies, the Brookings Council on Antibacterial Drug Development (BCADD), will convene twice a year to discuss pressing issues in the treatment of infectious diseases and potential steps to address them.  

The first BCADD meeting, held on August 30, 2012, brought stakeholders together to discuss the following:

• Ongoing antibacterial initiatives at FDA and the Clinical Trials Transformation Initiative
• Statistical and methodological approaches that could be harnessed to improve the efficiency of antibacterial drug development
• Balancing benefit-risk and uncertainty considerations with public health needs
• Next steps for council action

For more information on FDA’s Antibacterial Drug Development Task Force, click here.

Event Materials

• 30 antibacterial drug development summary
• Presentation Slides
• FINAL BCADD Discussion Guide 20120828
• FINAL May 9 Summary 20120828
• Participant List_Final

       

Event Information

As part of an ongoing cooperative agreement with the U.S. Food and Drug Administration (FDA), the Engelberg Center for Health Care Reform at Brookings has formed the Brookings Council on Antibacterial Drug Development (BCADD) to identify steps to address the major technical, regulatory, and financial barriers impeding antibacterial drug development. At the first meeting of the BCADD, stakeholders emphasized the importance of concentrating on discrete policy and program areas to revitalize the antibacterial drug development enterprise.

BCADD convened a diverse group of stakeholders, including FDA officials, industry and biotech representatives, payers, providers, clinicians, and academic researchers Wednesday, February 27, 2013, to discuss two of the economic challenges facing antibacterial drug development:

• Better understanding the potential role of incentives in drug discovery and development; and
• Identifying potential reimbursement models that can support both stewardship and expanded investment for antibacterial drug products.

Antibacterial development has moved slower than other therapeutic areas in part due to the challenges of achieving a return on investment under the current reimbursement system. New models are needed to incentivize research and development of antibacterial products and to separate reimbursement from unit sales in order to help preserve the effectiveness of existing and new antibacterial drugs. The workshop’s objectives are to support the development of pragmatic proposals for the larger stakeholder community to consider.

Event Materials

• meeting summary 20130925 FINAL
• Discussion Guide
• Participant List
• Presentation

       

The news Monday from the Centers for Disease Control and Prevention (CDC) on the incidence of resistant infections is disturbing but not surprising. CDC estimates that over two million Americans every year are affected by drug-resistant infections and of those, 23,000 die annually. The report notes that these figures are conservative and are likely an underestimate of the burden of resistant infections. While these numbers reflect domestic rates, antibiotic resistance is a global issue as well.

To further compound the issue, today’s antibiotic pipeline is nearly dry and has been for some time, with only a handful of large pharmaceutical companies and smaller biotech firms still engaged in antibiotic development. The threat of a so-called ‘post-antibiotic era’ – a time when there are no longer any effective antibiotic treatments – could become a reality without a concerted and comprehensive effort to combat this global threat. The evolution of drug resistance is an inherent risk of antibiotic use. The CDC report cited the development of new antibiotics and diagnostic tools, as well as programs and policies to support appropriate use of antibiotics, as being among the core strategies to combat resistance.

Clinical effectiveness and the relatively low cost of antibiotics have had the unintended consequence of contributing to overuse, accelerating the development of antibiotic resistance to all major classes of antibiotics. While there are some diagnostic tools available to support targeted treatment, it is often more time- and cost-effective for a physician to prescribe a relatively inexpensive, broad-spectrum antibiotic than to conduct a diagnostic test (if one exists at all). Antibiotic overuse can also be driven by patients who see antibiotics as safe and often low-cost cure-alls. Recognizing that these past patterns of overuse are dangerous, the clinical community is working diligently to curb inappropriate use and promote public health through stewardship and education programs. However, given the weakness of the current antibiotic development environment, it may be too little-too late; rates of resistance continue to rise globally while the number of effective therapies to treat many pathogens is dwindling. According to the CDC, resistance can be ”slowed but not stopped” – there will always be a need for novel antibiotics that can combat the evolution of these pathogens.

The current system for manufacturer return on investment for antibiotics, which are typically reimbursed at very low levels, is oriented towards volume sales. As a result, stewardship and educational programs geared toward limiting use of novel antibiotics create an ‘antibiotic development paradox.’ How can we incentivize investment in developing new effective antibiotics and also have successful programs that limit the use of these antibiotics in an effort to prevent or delay the development of resistance? Unless this fundamental conflict in the current business model is addressed, pharmaceutical firms are unlikely to expand development efforts.

How do we turn the tide?

There are several proposals that address aspects of the antibiotic development paradox with the goal of reinvigorating the antibiotic drug development ecosystem in a way that maximizes our ability to stay ahead of resistance. While none of these proposals alone will solve this problem, each could support the long-term goal of reinvigorating antibiotic discovery, development, and treatment.

Creating incentives for drug development

Antibiotic drug development has been a losing prospect for drug developers and has driven many of them to exit the antibiotic innovation space in the last few decades in favor of other therapeutic areas that have much larger markets and are easier areas to study. In order to make antibiotic development more attractive, various mechanisms have been proposed to stimulate or better reward successful clinical development. Incentives that can lower the financial risks associated with development include grants, tax credits, public-private partnerships, and intellectual property protections. Post-approval, prizes, advanced market commitments, and value-based pricing could all potentially provide additional incentives to invest in this research. Some potential incentives were discussed at the Incentives for Change: Addressing the Challenges in Antibacterial Drug Development workshop convened by Brookings in February 2013.

Balancing benefit and risk for severely-ill patients

Other incentives are related to the drug approval process. Novel mechanisms for expedited development and approval can speed time to market while still meeting traditional evidentiary requirements for safety and efficacy. In the last several years, a number of proposals – including from the Infectious Diseases Society of America and the President’s Council of Advisors on Science and Technology – have sought to reduce development time and cost and increase regulatory clarity through a more targeted clinical trial process directed at the highest-risk patients. A narrower study population would allow the U.S. Food and Drug Administration to make a more targeted assessment of the product’s safety, efficacy, and benefit-risk profile that could accelerate innovation for patients with serious drug-resistant infections. The need to steward these antibiotics, which was noted as a core action in the CDC report, would be especially important to both prevent the growth of resistance and to reduce the risk of adverse effects in less seriously-ill populations. Additional information on the proposed limited-use pathway and appropriate use is available on the Brookings website.

De-link reimbursement from return on investment

In order to attract investment for new antibiotic research, we must develop a business model that can support ongoing and expanding development without compromising the effectiveness of new therapies. Recognizing the need to “de-link” return on investment from the volume of antibiotics sold, efforts to move away from the volume-based reimbursement system could become an attractive path forward. Promising models, which were discussed at the Brookings workshop in February, included several guaranteed payment schemes supported by public funding. Taken to an extreme, such a system could even allow new antibiotics to be reserved indefinitely until needed, removing the developer’s incentive to sell any drugs in the years following approval. While such a program would likely be expensive (with sufficient returns estimated on the order of $1.75-2.5 billion over five years), government intervention is needed to fix this public health crisis and dangerous market failure. Its societal value in curtailing resistance and providing critical drugs would outweigh the cost to taxpayers.

The antibiotic development paradox will require a multi-pronged strategy that includes incentives to support front-end drug discovery and development, and new reimbursement policies that de-link unit volume sales from return on investment. However, this is by no means a quick fix. Even if this approach is successful, it will take decades for manufacturers to rebuild lost antibiotic development infrastructure and expertise, and to successfully develop and market new treatments. For the few drugs currently in development, even with expedited development and review pathways, they are still years from reaching the market.

       

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Antibacterial drug resistance is a global public health threat poised to worsen due to the combination of the inappropriate use of existing drugs and a marked decline in innovative antibacterial drug development. In order to tackle this problem, stakeholders must consider comprehensive strategies that address both drug development and stewardship.

On February 7, the Engelberg Center for Health Care Reform convened an expert workshop, “Modernizing Antibacterial Drug Development and Promoting Stewardship” to explore a two-pronged approach to combating antibacterial drug resistance that includes: 1) the development of pathogen-focused antibacterial drugs that target the most serious public health threats; and 2) stewardship efforts for all antibacterial products in order to preserve their utility. Participating stakeholders included experts from the drug development and health care industries, the clinical community, government, and academia. These stakeholders shared their insights on potential frameworks and evidentiary considerations for pathogen-focused drug development, and efforts underway to promote the appropriate use of commonly used antibacterial drugs in the ambulatory care setting.

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• Antibiotic Development Slides
• 07 antibacterial expert workshop discussion guide
• 07 antibacterial expert workshop public agenda
• 07 antibacterial expert workshop meeting summary

       

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Antibacterial drugs are a critical component of the nation’s public health armamentarium, and have saved millions of lives by preventing and treating a range of bacterial infections. However, antibacterial drug development has been hampered by challenges unique to the antibacterial drug market, which have stifled innovation and left patients and providers with fewer options to treat increasingly resistant infections. One consequence of the dwindling antibacterial drug pipeline has been a reduction in effective oral antibacterial drug treatment options, which are particularly important in the ambulatory and transitional care contexts. Recent proposals to re-invigorate the antibacterial pipeline are geared towards serious infections treated in the inpatient setting, which may lead to a greater focus on intravenous therapies. However, addressing both current and future needs in the infectious diseases space will require a balanced mix of both oral and parenteral antibacterial drugs.

In cooperation with the U.S. Food and Drug Administration (FDA), the Engelberg Center for Health Care Reform at Brookings held an expert workshop on November 20, 2014, to identify the most promising strategies to support oral antibacterial drug development. Participating stakeholders included experts from the drug development and health care industries, the clinical community, government, and academia. These stakeholders shared their insights on potential regulatory, scientific, and economic strategies to reinvigorate the oral antibacterial drug pipeline. 

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• Reinvigorating the Oral Antibacterial Drug Development Pipeline Agenda
• Reinvigorating the Oral Antibacterial Drug Development Pipeline Discussion Guide
• Biographies 20141118
• Reinvigorating the Oral Antibacterial Drug Development Pipeline Slide Deck

       

While antibiotics are necessary and crucial for treating bacterial infections, their misuse over time has contributed to a rather alarming rate of antibiotic resistance, including the development of multidrug-resistance bacteria or “super bugs.” Misuse manifests throughout all corners of public and private life; from the doctor’s office when prescribed to treat viruses; to industrial agriculture, where they are used in abundance to prevent disease in livestock. New data from the World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC) confirm that rising overuse of antibiotics has already become a major public health threat worldwide.

As drug resistance increases, we will see a number of dangerous and far-reaching consequences. First, common infections like STDs, pneumonia, and “staph” infections will become increasingly difficult to treat, and in extreme cases these infections may require hospitalization or treatment with expensive and toxic second-line therapies. In fact, recent estimates suggest that every year more than 23,000 people die due to drug-resistant infections in the U.S., and many more suffer from complications caused by resistant pathogens. Further, infections will be harder to control. Health care providers are increasingly encountering highly resistant infections not only in hospitals – where such infections can easily spread between vulnerable patients – but also in outpatient care settings.

Fundamental Approaches to Slowing Resistance

Incentivize appropriate use of antibiotics. Many patients and providers underestimate the risks of using antibiotics when they are not warranted, in part because these drugs often have rapid beneficial effects for those who truly need them.  In many parts of the world the perception that antibiotics carry few risks has been bolstered by their low costs and availability without a prescription or contact with a trained health care provider. Education efforts, stewardship programs, and the development of new clinical guidelines have shown some success in limiting antibiotic use, but these fixes are limited in scope and generally not perceived as cost-effective or sustainable. Broader efforts to incentivize appropriate use, coupled with economic incentives, may be more effective in changing the culture of antibiotic use. These options might include physician or hospital report cards that help impact patient provider selection, or bonuses based on standardized performance measures that can be used to report on success of promoting appropriate use.  While these might create additional costs, they would likely help control rates of drug resistant infections and outweigh the costs of treating them.

Reinvigorate the drug development pipeline with novel antibiotics. There has not been a new class of antibiotics discovered in almost three decades, and companies have largely left the infectious disease space for more stable and lucrative product lines, such as cancer and chronic disease. Antibiotics have historically been inexpensive and are typically used only for short periods of time, creating limited opportunities for return on investment. In addition, unlike cancer or heart disease treatments, antibiotics lose effectiveness over time, making them unattractive for investment. Once they are on the market, the push to limit use of certain antibiotics to the most severe infections can further constrict an already weak market.

Late last year, H.R. 3742, the Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013, was introduced and referred to the House Energy and Commerce Subcommittee on Health. If enacted, the ADAPT Act would create a streamlined development pathway to expedite the approval of antibiotics that treat limited patient populations with serious unmet medical needs. This could potentially reduce costs and development time for companies, thereby encouraging investment in this space. Regulators have indicated that they would also welcome the opportunity to evaluate benefits and risk for a more selective patient subpopulation if they could be confident the product would be used appropriately. The bill has received a great deal of support and would help address a critical public health need (I cover this topic in more detail with my colleagues Kevin Outterson, John Powers, and Mark McClellan in a recent Health Affairs paper).

Advance new economic incentives to remedy market failure. Innovative changes to pharmaceutical regulation, research and development (R&D), and reimbursement are necessary to alleviate the market failure for antibacterial drugs. A major challenge, particularly within a fee-for-service or volume-based reimbursement system, is providing economic incentives that promote investment in drug development without encouraging overuse.  A number of public and private stakeholders, including the Engelberg Center for Health Care Reform and Chatham House’s Centre on Global Health Security Working Group on Antimicrobial Resistance, are exploring alternative reimbursement mechanisms that  “de-link” revenue from the volume of antibiotics sold. Such a mechanism, combined with further measures to stimulate innovation, could create a stable incentive structure to support R&D.

Improve tracking and monitoring of resistance in the outpatient setting. There is increasing concern about much less rigorous surveillance capabilities in the outpatient setting, where drug-resistant infections are also on the rise. Policymakers should consider new incentives for providers and insurers to encourage a coordinated approach for tracking inpatient and outpatient resistance data. The ADAPT Act, mentioned above, also seeks to enhance monitoring of antibiotic utilization and resistance patterns. Health insurance companies can leverage resistance-related data linked to health care claims, while providers can capture lab results in electronic health records. Ultimately, this data could be linked to health and economic outcomes at the state, federal, and international levels, and provide a more comprehensive population-based understanding of the impact and spread of resistance. Current examples include the Food and Drug Administration’s (FDA) Sentinel Initiative and the Patient-Centered Outcomes Research Institute’s PCORnet initiative. 

Antibiotic resistance is an urgent and persistent threat. As such, patients and providers will continue to require new antibiotics as older drugs are forced into retirement by resistant pathogens. Stewardship efforts will remain critical in the absence of game-changing therapies that parry resistance mechanisms. Lastly, a coordinated surveillance approach that involves diverse stakeholder groups is needed to understand the health and economic consequences of drug resistance, and to inform antibiotic development and stewardship efforts.

Editor's note: This blog was originally posted in May 2014 on Brookings UpFront.

       

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On February 29, the Africa Security Initiative at Brookings held a discussion on Nigeria, nine months after the inauguration of President Muhammadu Buhari, the country’s first president to take office in a peaceful transition of power from one party to another. President Buhari, who previously ruled Nigeria in the mid-1980s after a military coup, inherits a country facing burgeoning population, low oil prices for its top export, and the Boko Haram extremist insurgency in the northeast. Buhari also inherited other problems such as unrest in the country’s delta and southeast regions, and a culture of corruption and human rights abuse and impunity throughout much of the country’s armed forces and police.

Less than a year into his presidency, Buhari has made progress in reforming the military, sacking some military leaders and injecting a bit more energy into the counter-Boko Haram campaign. But has he chosen the right priorities for Nigeria and fundamentally headed in the right direction, and what has been the impact on civilians, particularly in the northeastern part of the country? What additional role, if any, could the United States and the broader international community play to support additional reform?

We convened a panel to discuss these subjects. The panel, made up of independent experts with deep knowledge ranging from human rights to economics and finance to broader political and security sector reform, included EJ Hogendoorn of the International Crisis Group, Madeline Rose from Mercy Corps, Mausi Segun of Human Rights Watch, and Amadou Sy from The Brookings Institution. Senior Fellow Michael O’Hanlon, who directs the Africa Security Initiative at Brookings, moderated the discussion.

 

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• Examining the current state of Nigeria

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• Transcript (.pdf)

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• 20160229_nigeria_transcript

      

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

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

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

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

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

      

We are kicking off the new Millions Learning video series with a spotlight on Teach For All, one of the 14 case studies examined in the Millions Learning report. Teach For All is an international network of local, independent partner country organizations dedicated to improving educational opportunities for children and youth around the globe. From China to Bulgaria to Peru to Ghana, each partner organization recruits and trains recent top-performing graduates and professionals to teach in their country’s underserved communities for two years, with the ultimate goal of developing a cadre of education leaders, both inside and outside of the classroom.

In this video, Wendy Kopp, CEO and co-founder of Teach For All, discusses Teach For All’s unique approach to building a pipeline of future “learning leaders and champions” and the role that a supportive policy environment plays in enabling this process. Kopp then explains how Teach For All grew from the original Teach For America and Teach First in the United Kingdom to an international network of 40 partner countries, sharing her own lessons learned along the way.

To learn more about Millions Learning, please visit our interactive report, Millions Learning: Scaling up quality education in developing countries, and/or visit our webpage.

Video

• Getting millions to learn: Interview with Wendy Kopp of Teach For All

       

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U.S. policy towards South Asia has changed considerably over the last seven decades. The nature of U.S. engagement with different countries in the region has varied over time, as has the level of U.S. interest. While India and Pakistan have received the most attention from Washington, the United States has also been engaging with Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka, albeit to different degrees. 

On May 19, The India Project at Brookings hosted a panel discussion exploring the past and present U.S approaches towards South Asia, based on Senior Fellow Stephen Cohen’s new book, “The South Asia Papers: A Critical Anthology of Writings” (Brookings Institution Press, 2016). Panelists also assessed the Obama administration’s policies toward the region, and the challenges and opportunities that lie ahead for the next U.S. administration. Fellow Tanvi Madan, director of The India Project, moderated the discussion.

After the discussion, the panelists took questions.

Video

• U.S. policy toward South Asia: Past, present, and future

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• U.S. policy toward South Asia: Past, present, and future

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• Uncorrected Transcript (.pdf)

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• 20160519_south_asia_transcript

       

Extreme poverty around the world has decreased from around 2 billion people in 1990 living under $2 per day to 700 million today. Further, nine out of 10 children are now enrolled in primary schools, an increase over the last 15 years. Progress in both areas since 2000 has been part of the United Nations Millennium Development Goals, which set targets for reducing extreme poverty in eight areas, and which were the guiding principles for global development from 2000 to 2015. Today, the global community, through the UN, has adopted 17 Sustainable Development Goals to continue these poverty reduction efforts. 

In this new episode of Intersections podcast, host Adrianna Pita engages Brookings scholars Laurence Chandy and Rebecca Winthrop in a discussion of how digital technologies can be harnessed to bring poverty reduction and education to the most marginalized populations.

Listen:

Chandy, a fellow in the Global Economy and Development program at Brookings, says that the trends in getting people digitally connected "are progressing at such speed that they’re starting to reach some of the poorest people in the world. Digital technology is changing what it means to be poor because it’s bringing poor people out of the margins.”

Winthrop, a senior fellow and director of the Center for Universal Education at Brookings, says that "I think [education] access is crucial. And I do think that’s almost the first wave because without it we could work on all the ed tech—fabulous apps, great language translated content—but if you do not have the access it’s not going to reach the most marginalized."

Listen to this episode above; subscribe on iTunes; and find more episodes on our website.

Chandy was a guest on the Brookings Cafeteria Podcast in 2013; Winthrop has been a guest on the Cafeteria a few times to discuss global education topics, including: access plus education; investing in girls' education; and getting millions learning in the developing world.

       

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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Barack Obama’s presidency has witnessed widespread change throughout Africa. His four trips there, spanning seven countries, reflect his belief in the continent’s potential and importance. African countries face many challenges that span issues of trade, investment, and development, as well as security and stability. With President Obama’s second term coming to an end, it is important to begin to reflect on his legacy and how his administration has helped frame the future of Africa.

On July 19, the Center for 21st Century Security and Intelligence at Brookings hosted a discussion on Africa policy. Matthew Carotenuto, professor at St. Lawrence University and author of “Obama and Kenya: Contested Histories and the Politics of Belonging” (Ohio University Press, 2016) discussed his research in the region. He was joined by Sarah Margon, the Washington director of Human Rights Watch. Brookings Senior Fellow Michael O'Hanlon partook in and moderated the discussion.

Video

• President Obama’s role in African security and development

Audio

• President Obama’s role in African security and development

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• Uncorrected Transcript (.pdf)

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• 20160719_us_africa_transcript