The city of Chicago is increasing retrofits by using stimulus dollars to expand the opportunity for energy efficient living to low-income residents of large multi-family rental buildings. To aid this target demographic, often left underserved by existing programs, the city’s new Multi-Family Energy Retrofit Program introduces an innovative model for retrofit delivery that relies on private sector financing and energy service companies.

Chicago’s new Multi-Family Energy Retrofit Program draws on multi-sector collaboration, with an emphasis on private sector involvement supported by public and nonprofit resources. Essentially, the program applies the model of private energy service companies (ESCOs), long-used in the public sector, to the affordable, multi-family housing market. In this framework, ESCOs conduct assessments of building energy performance, identify and oversee implementation of cost-effective retrofit measures, and guarantee energy savings to use as a source of loan repayment.

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As the 2016 election draws near, issues related to immigration and broader cultural change continue to dominate the national political dialogue. Now, an extensive new survey sheds light on how Americans view these issues. How do they feel about the proposed policy to build a wall on the U.S.-Mexico border or a temporary ban on Muslims entering the country? The survey of more than 2,500 Americans explores opinions on these questions and others concerning the current immigration system, immigrants’ contributions to American culture, and the cultural and economic anxieties fueling Donald Trump’s success among core Republican constituencies.

On June 23, Governance Studies at Brookings and the Public Religion Research Institute released the PRRI/Brookings Immigration Survey and hosted a panel of experts to discuss its findings. Additional topics explored in the survey and by the panel included perceptions of discrimination against white Americans and Christians, and the extent to which Americans believe that the uncertain times demand an unconventional leader.

Join the conversation on Twitter at #immsurvey and @BrookingsGov

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

Dr. Robert Jones, CEO of PRRI, began the presentation by highlighting Americans’ feelings of anxiety and personal vulnerability. The poll found, no issue is more critical to Americans this election cycle than terrorism, with nearly seven in ten (66 percent) reporting that terrorism is a critical issue to them personally. And yet, Americans are sharply divided on questions of terrorism as it pertains to their personal safety. Six in ten (62 percent) Republicans report that they are at least somewhat worried about being personally affected by terrorism, while just 44 percent of Democrats say the same. 

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

74 percent of Republicans and 83 percent of Trump supporters believe that foreign influence over the American way of life needs to be curtailed.  Just 41 percent of Democrats agree, while a majority (56 percent) disagrees with this statement. Views among white Americans are sharply divided by social class, the report finds. While 68 percent of the white working class agrees that the American way of life needs to be protected, fewer than half (47 percent) of white college-educated Americans agree.

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

 

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

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

 

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

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

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

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

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

       

Economist Albert Hirschman’s marvelously perceptive little book with big ideas written in 1970 titled “Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States” provides a cornucopia of insights into understanding Brexit and the current state of global governance.  When it emerged American economist Kenneth Arrow marveled at its extraordinary richness, and political scientist Karl Deutsch, in his presidential address to the American Political Science Association, called it an “outstanding contribution to political theory.”

Economists assume exit to mean dissatisfaction with an organization’s product or the service leading to decline in demand for it. The value of exit lies in the certainty it provides in terms of the relationship between the customer or member and the firm. Political scientists think of how a firm handles its response to customer dissatisfaction as the exercise of voice by stakeholders. The value of voice is that it can lead to reform that ultimately determines the firm’s revival, an idea also advanced by scholar Clayton Christiansen in his book “The Innovator’s Dilemma.” An understanding of the conditions under which exit and voice are exercised requires the incorporation of the concept of loyalty. Loyalty makes voice more probable and exit less likely. But loyalty does not by itself make the exercise of voice more effective. That depends on the extent to which customers or members are willing to trade off the certainty of exit against the uncertainties of improvement in the deteriorating product, and their ability to influence the organization.  

Applying these ideas to Brexit suggests that the option of a U.K. exit was made more likely because of the limited voice of the U.K. in achieving reforms, coupled with the fact that Britain’s loyalty to the European Union was mixed at best. Its self-perception as “special people” was accompanied by long-standing skepticism about foreigners, including other Europeans.

Some have attributed Brexit to misjudgment by Prime Minister David Cameron about holding a referendum, poor management of migration policy by the EU including procrastination and downright misjudgment on migration, and they have termed the historic vote as nothing short of the beginning of the end of the post-World War II institutional frameworks, including the Bretton Woods institutions. They fear that the longest and most prosperous period of sustained peace in modern human history, enabled by post-war global architecture, may have come to an end.

The Economist is one proponent of this view, describing Brexit as multiple calamities. The British economy and polity are wildly off the rails, the newspaper notes. The prime minister has resigned with no obvious successor. The leader of the opposition is struggling to survive a coup. The pound hit a 31-year low against the dollar and banks lost a third of their value before stabilizing. Meanwhile there is talk in Scotland and Northern Ireland of secession.

But my own English friends, some of whom favored Brexit, talk about the high tax payments to the EU, oppressive overreach of the EU bureaucracy, and the fear of open borders leading to uncontrollable immigration from Eastern Europe, Turkey, and the Middle East. In short they see EU membership as all pain and no gain. On the surface Brexit has all the flavors ranging from nostalgia of self-rule to xenophobia.

Lessons for global governance?

There are already signs that exit is becoming the preferred option in various global governance organizations. Global loyalties are split, not just among great powers, but also between developed and developing countries. Voice and reform have not been effective.

Hirschman mentions leadership and timely action in sharing power with the next generation as a behavioral trait (often found in the animal kingdom) favoring voice. He contrasts that with exit, which he describes as a human behavior which assumes markets, including political markets, will solve problems.

Hirschman’s chapter “Exit and Voice in American Ideology and Practice” helps us to better understand the U.S. role in global governance. He notes that exit has been accorded “an extraordinarily privileged position in the American tradition” founded in its very creation as a land of immigrants, who, he reminds us, were opting for exit.  Indeed, like in Britain, “the neatness of exit over the messiness and heartbreak of voice” has persisted throughout U.S. history. In his last chapter, “Elusive Optimal Mix of Exit and Voice,” he does not come up with a recipe for some optimum mix of the two, nor does he recommend each institution has its own optimum mix, instead arguing conditions are seldom ripe for their optimum and stable mix—although it is possible to say there is deficiency of one or the other at a given point in time.

Today, it seems that the dominant mode of the post-World War II era, namely voice, is plainly revealing its inadequacy, so the other mode, exit, will eventually be injected once again.

Having had a leading role in founding the global architecture of the United Nation, Food and Agriculture Organization, and Bretton Woods institutions, the U.S. has had a strong voice in and loyalty to the Bretton Woods institutions as well as leadership roles commensurate with its historic roles. U.S. loyalty to the U.N. outside of the Security Council has varied among administrations, since voice in U.N. organizations is distributed more equally. The U.S. has opted for exit from specific U.N. organizations from time to time when it has disliked the dissenting views of other members. 

Others are also choosing to exit. China’s slightly increased shares in the International Monetary Fund and the World Bank after the financial crisis are nowhere near its weight in the global economy, thanks to European reluctance to accept a reduced voice. China and other emerging countries have exercised a partial exit option by establishing the Asian Infrastructure Investment Bank and the New Development Bank to meet the investment needs of developing countries.The U.S. considered the establishment of the two as a threat to its leadership and to the Bretton Woods institutions, viewing the acts as verging on disloyalty, whereas most U.S. allies have embraced membership in both. And yet the Asian Infrastructure Investment Bank is following on the footsteps of the Bretton Woods institutions as regards norms and rules.

To strengthen global governance requires strengthening “voice” and weakening incentives for “exit” from the U.N. and Bretton Woods institutions and other forums of global governance. The U.S. needs to also lead the effort to increase the rewards and reduce the cost of exercising voice. This would be a timely reminder, when politics seems to thrive on divisions, that leadership means forging inclusive institutions that serve all members. 

       

       

       

       

       

       

       

Amid anger and protests in Baltimore following the death of 25-year-old Freddie Gray from a spinal injury sustained after being arrested by police, much of the discussion has focused on the poverty-ridden neighborhood in which Gray grew up (Sandtown-Winchester, on the city’s west side). Conversation has centered around the economic disadvantages that Gray, his peers, and so many young adults are facing in certain neighborhoods throughout Baltimore and in other U.S. metro areas.

Metropolitan Policy Program Fellow Jennifer Vey spoke yesterday with CNN’s Maggie Lake on the poverty and economic inequality prevalent in Baltimore—particularly in impoverished neighborhoods like that of Gray’s and throughout the country.

In the interview, Vey says that, “it’s important to look at the events of the last few days in Baltimore against a backdrop of poverty, of entrenched joblessness, of social disconnectedness that’s prevalent in many Baltimore neighborhoods…but that isn’t unique to Baltimore, and I think that’s a really important point here, that we really need to put these issues in a much broader national context.

“I think what this really indicates is we’ve been operating under an economic model for quite some time that clearly isn’t working for large numbers of people in this country.”

Vey also discusses how we can work to break the cycle:

“What we’re really focused on at Brookings is trying to understand how cities and metropolitan areas can really be trying to grow the types of advanced industries that create good jobs, that create more jobs, and also focusing on how then, people can connect back to that economy. What can we do to make sure that more people are participating in that economic growth as it happens?”

She goes on to say that investment in education, workforce programs, and infrastructure are all key in incorporating everyone into a prosperous economy.

To learn more about poverty in Baltimore, read this piece by Karl Alexander.

       

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. Thanks to these assets, the six metro areas generate 80 percent of the state’s economic output even though they house 68 percent of its population. A true economic agenda for the state must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. In short, this brief finds that:

• To help Pennsylvania prosper, federal leaders must leverage four key assets that matter today—innovation, human capital, infrastructure, and quality places. These assets help increase the productivity of firms and workers, boost the incomes of families and workers, and can help the state and nation grow in more fiscally and environmentally responsible ways.
• These four assets are highly concentrated in the state’s economic engines, its metropolitan areas. There are 16 metro areas in the Commonwealth, ranging from Philadelphia, the most populous, to Williamsport, the smallest. The top six metropolitan areas alone generate the bulk of the state’s innovation (80 percent of all patenting), contain the majority of the state’s educated workforce (77 percent of all adults with a bachelors degree), and serve as the state’s transport hubs.
• Despite these assets, Pennsylvania’s metro areas have yet to achieve their full economic potential. For instance, Philadelphia and Pittsburgh enjoy strengths in innovation, but they both struggle to convert their research investments into commercial products and real jobs. The Scranton metro area is emerging as a satellite of the New York City region, but it’s hampered by the absence of frequent and reliable transportation connections and inadequate broadband coverage.
• Federal leaders must advance an economic agenda that empowers states and metro areas to leverage their assets and help the nation prosper. To that end, they should establish a single federal entity that works with industry, states, and metro areas to ensure that innovation results in jobs and helps businesses small and large modernize. The federal government should strengthen access and success through the entire education pipeline. They should overhaul and create a 21st century transportation system. And they should use housing policy to support quality, mixed-income communities rather than perpetuating distressed neighborhoods with few school and job options.

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This is the first in a series of reports on the demographic and political dynamics under way in 10 “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 Pennsylvania. Among its specific findings are:

• Pennsylvania is becoming a demographic “bridge” between Midwestern states like Ohio and other Northeastern states like New Jersey, as its new growth is tied to urban coastal regions. While often classed as a so-called “Rust Belt” state, its eastern and south central regions are increasingly becoming part of the nation’s Northeast Corridor, with new growth and demographic profiles that warrant attention in upcoming elections.
• Eligible voter populations indicate a state in transition, where minorities, especially Hispanics, and white college graduates are increasingly important, but where white working class voters continue to play a central role. While white working class voters continue to decline as a share of voters and are less likely to work in manufacturing and goods production, they are still a critical segment of voters, including in the fast-growing Harrisburg and Allentown regions where their absolute numbers are actually increasing.
• Recent Democratic victories in Pennsylvania have featured strong support from groups like minorities, single women, and the young but have also benefited from relatively strong support among the white working class, especially among its upwardly mobile segment that has some college education. Compared to 1988, both the latter group and white college graduates have increased their support for Democrats. And both groups have increased their share of voters over the time period.
• Political shifts in Pennsylvania since 1988 have seen the growing eastern part of the state swing toward the Democrats, producing four straight presidential victories for that party. The swing has been sharpest in the Philadelphia suburbs, but has also been strong in the Allentown region and even affected the pro-Republican Harrisburg region. Countering this swing, the declining western part of the state has been moving toward the GOP.
• Key trends and groups to watch in 2008 include the white working class, especially whites with some college, who, unlike the rest of this group, are growing; white college graduates; and Hispanics, who have been driving the growth of the minority vote.

These trends could have their strongest impact in the fast-growing Allentown region, which may move solidly into the Democratic column in 2008 and beyond, following the trajectory of the Philadelphia suburbs. The even-faster-growing Harrisburg region remains a GOP firewall, but the same trends could make that region more closely contested in 2008.

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

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

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

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

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

1. What types of crops does each country grow? 

2. Which cereals are most prominent in each country? 

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

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

5. How has area harvested been changing recently? 

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

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

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The start of the 21st century has been an auspicious period for global economic development. In the 1990s, a mere 13 emerging economies succeeded in growing at a speed at least twice that of the OECD countries, enabling rapid convergence on Western living standards. By the first decade of the 2000s, this number had mushroomed to 83. Accelerated rates of economic growth lay behind many of the recent success stories in global development, not least the fulfilment of the first Millennium Development Goal to halve the global poverty rate, five years ahead of the 2015 deadline. Yet in a number of places, growth has failed to take off, has undergone periodic reversals, or has benefited a few while leaving the majority short-changed.

On August 7-9, 2014, Brookings Global Economy and Development is hosting the eleventh annual Brookings Blum Roundtable on Global Poverty in Aspen, Colorado. This year’s roundtable theme, “Jump-Starting Inclusive Growth in the Most Difficult Environment,” brings together global leaders, entrepreneurs, practitioners, and public intellectuals to discuss what strategies exist for promoting inclusive economic growth in settings where standard prescriptions are not feasible or sufficient as well as what the comparative advantages are of different actors seeking to improve the prospects for inclusive growth and how can they most effectively collaborate with each other to increase their impact. 

This event is closed, but you can follow along on Twitter using #Blum2014.

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Choosing a health plan on one of the new public or private exchanges is no easy task. That’s especially true for those with medical conditions who want to be very sure the plan they enroll in will provide the services they need.

This challenge is not unique to buying health plans, however. It’s always hard for consumers to buy complex and technical services or products when they have little or no expertise in the field. Health insurance can be especially daunting, with so many factors to consider, and even the terminology can be confusing.

Standardizing choices and terms can be helpful to a point. Grouping health plans according to premiums and out-of-pocket costs – bronze, silver, gold and platinum plans – has worked well in the public exchanges. But standardization will always be in tension with innovation, and the reality is that most exchanges will carry a larger inventory of plans than what the typical consumer wants to scroll through. So the question of “choice architecture” – how the plans are filtered or screened – will come to the fore. 

Consumers will have many questions.  What is the price? How do I assess the trade-off between lower premiums and higher cost sharing? Is my doctor in the plan’s network? Are the drugs I take in the formulary (whatever that is)? Things can get real complicated real fast, and it can feel like there are too many, not too few, choices. No wonder some call that “choice anxiety”.

But that view overlooks how technology is likely to reduce choice anxiety in health care, just as it has for other complicated searches.  It used to take a librarian to find an obscure article or a travel agent to plan a vacation. Today a few keystrokes on Google locates the article, and Travelocity makes vacation planning a cakewalk, with everything from on-time flight arrival data to pictures of hotel rooms and customer reviews arranged by star ratings.

Expect technology to have the same dramatic impact on buying health coverage in the near future. There are several reasons for this:

The presentation of consumer information will get better. When large new markets for products and services are created and the demand for buyers’ information rises sharply, the incentive for entrepreneurs – both for-profit and nonprofit – to provide customer-friendly information also rises. We’ve already seen this in parts of the health care market where there has been plenty of choice. Millions of federal employees have for many years been able choose among a wide range of plans with differing benefits.  Many have turned to the highly regarded Consumers’ Checkbook to help them understand and readily compare plans in the federal program.

Checkbook has launched a similar comparison tool for the  Illinois exchange and recently won the Robert Wood Johnson Foundation’s (RWJF) first "Plan Choice Challenge," a nationwide competition to design a technology application that helps people choose their best health plan options.

Navigation technology will make searches simple and quick.  Most consumers don’t want to spend a lot of time comparing plans; they want to find the best buy for their situation as quickly as possible.  That’s why brokers have traditionally encouraged employers to offer their employees a carefully limited set of shopping choices, but we expect plan navigation technology to constantly improve the shopping experience in ways that will help customers search a larger inventory and still make choices more easily.   Stride Health, a San Francisco startup and finalist in the RWJF Challenge, has developed a recommendation technology that searches massive data sets on networks and formularies in seconds to help consumers find a “match” that fits their budget and health care needs.  (Full disclosure – author Joel Ario is an investor).  

Stride is one of more than 40 “web brokers” that has met federal consumer protection and privacy standards enabling it to work with the federal exchange to enroll subsidy-eligible individuals in coverage.  Expect increasing collaboration between public exchanges and private vendors, with a surge of apps and gadgets to make navigation easier and easier in health exchanges.

Technology will allow choices to be tailored to medical history.  Advances in technology won’t just make it technically easier to pick and choose by price and reputation. These advances will also empower Americans to base their choices on their likely medical needs. Today, tailoring your coverage to your medical condition usually means trying to get a doctor– or several doctors– to help you figure out what you should look for in a plan. Even with that help, for the average person it’s still a hit-or-miss proposition. But new forms of choice technology are beginning to utilize questions about medical history to guide buyers towards the plans that are most suited to their condition.  

Checkbook and Stride already allow consumers to enter more detailed health histories and get more sophisticated assistance, and this will only improve as exchanges publish more data in machine readable formats.   Expect more and increasingly sophisticated customized navigators, especially as patients get more access to their electronic medical records.  Also expect sellers to respond with products than bundle services to meet the new demand.

Does this mean that an iPhone app will be all that’s needed to ensure that every consumer can find his or her perfect plan? Not quite.  Health insurance marketplaces will continue to present thorny regulatory challenges.  Insurance regulators will need to guard against unfair practices, such as insurers’ designing benefit plans to drive away applicants with certain health conditions; privacy concerns will be raised whenever apps ask for medical history; and new forms of provider integration will test antitrust doctrine.

But one thing is clear. Improving technology will soon make picking the right health plan a far more precise and simple process – easy enough for many of our children to do on their smart phones or whatever gadget comes next.

      

One of the foundational notions of digital financial services has been the distinction between payment rails and services running on the rails. This is a logical distinction to make, one easily understood by engineers who tend to think in terms of hierarchies (or stacks) of functionalities, capabilities, and protocols that need to be brought together. But this distinction makes less sense when it is taken to represent a logical temporal sequencing of those layers.

It is not too much of a caricature to portray the argument —and, alas, much common practice— like this: I’ll first build a state-of-the art digital payments platform, and then I’ll secure a great agent network to acquire customers and offer them cash services. Once I have mastered all that, then I’ll focus on bringing new services to delight more of my customers. The result is that research on customer preferences gets postponed, and product design projects are outsourced to external consultants who run innovation projects in a way that is disconnected from the rest of the business.

This mindset is understandable given limited organizational, financial and human resource capabilities. But the problem with such narrow sequencing is that all these elements reinforce each other. Without adequate services (a.k.a. customer proposition), the rails will not bed down (a.k.a. no business case for the provider or the agents). In businesses such as digital payments that exhibit strong network effects, it’s a race to reach a critical mass of users. You need to drive the entire stack to get there, as quickly as possible. Unless, you develop a killer app early on, as M-PESA seems to have done with the send money home use case in the Kenyan environment.

It is tough for any organization to advance on all these fronts simultaneously. Only superhero organizations can get this complex job done. I have argued in a previous post that the piece that needs to be parceled off is not the service creation but rather cash management: that can be handled by independently licensed organizations working at arms length from the digital rails-and-products providers.

What are payment rails?

Payment rails are a collection of capabilities that allow value to be passed around digitally. This could include sending money home, paying for a good or a bill, pushing money into my or someone else’s savings account, funding a withdrawal at an agent, or repaying a loan. The first set of capabilities relates to identity: being able to establish you are the rightful owner of the funds in your account, and to designate the intended recipient in a money transfer. The second set of capabilities relates to the accounting or ledger system: keeping track of balances held and owed, and authorizing transactions when there are sufficient funds per the account rules. The third set of capabilities relates to messaging: collecting the necessary transaction details from the payment initiator, conveying that information securely to the authorizing entity, and providing confirmations.

Only the third piece has been transformed by the rise of mobile phones: we now have an increasingly inclusive and ubiquitous real-time messaging fabric. Impressive as that is, this messaging capability is still linked to legacy approaches on identity and accounting. Which is why mobile money is still more an evolution than a revolution in the quest for financial inclusion.

The keepers of the accounts —traditionally, the banks— are, of course, the guardians of the system’s choke points. There is now recognition in financial inclusion circles that to expand access to finance it is not enough to proliferate the world with mobile phones and agents: you need to increase the number and type of account keepers, under the guise of mobile money operators, e-money issuers or payment banks. But that doesn’t change the fundamental dynamics, which is that there still are choke point guardians who need to be convinced that there is a business case in order to invest in marketing to poor people, that there are opportunities to innovate to meet their needs, and that perhaps all players can be better off if only they interoperated. A true transformation would be to open up these ledgers, so anyone can check the validity of any transaction and write them into the ledger.

That’s what crypto-currencies are after: decentralizing the accounting and transaction authorization piece, much in the same way as mobile phones have decentralized the transaction origination piece. Banks seek to protect the integrity of their accounting and authorizations systems —and hence their role as arbiters of financial transactions— by hiding them behind huge IT walls; crypto-currencies such as Bitcoin and Ripple do the opposite: they use sophisticated protocols to create a shared consensus for all to see and use.

The other set of capabilities in the digital rails, identity, is also still in the dark ages. Let me convince you of that through a personal experience. My wallet was stolen recently, and it contained my credit card. I can understand the bank wanting to know my name, but why is the bank announcing my name to the thief by printing it on the credit card, thereby making it easier for him to impersonate me? The reason is, of course, that the bank wants merchants to be able to cross check the name on the card with a piece of customer ID. But as you can imagine, my national ID got stolen along with my credit card, and because of that the thief knows not only my name but also my address. That was an issue because I also kept a key to my house in the wallet. None of this makes sense: why are these “trusted” institutions subverting my sense of personal security, not to mention privacy?

The problem is that the current financial regulatory framework is premised on a direct binding of every transaction to my full legal identity. As David Porteous and I argue in a recent paper, what we need is a more nuanced digital identity system that allows me to present different personas to different identity-requesting entities and choose precisely which attributes of myself get revealed in each case, while still allowing the authorities to trace the identity unequivocally back to me in case I break the law.

The much-celebrated success of mobile money has so far really only transformed one third (messaging) of one half (payment rails) of the financial inclusion agenda. We ain’t seen nothin’ yet.

      

       

       

The mayoral election in Baltimore has brought local economic development strategies to the forefront. In a city in which inequality—by income, by race, and between neighborhoods—has increased in the past five years, the candidates have made it clear that more action must be taken to close disparities and improve economic outcomes for all residents. In a podcast segment, I commend the much-needed focus on equity but argue that the mayoral candidates should not lose sight of another critical piece of the equity equation: economic growth. Citing lessons from my recent paper, I outline strategies that Baltimore’s presumptive leaders should pursue—as well as several they should abandon—to place the city’s residents on the path to a more prosperous, equitable future.

Listen to the full podcast segment here: 

       

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

Dr. Robert Jones, CEO of PRRI, began the presentation by highlighting Americans’ feelings of anxiety and personal vulnerability. The poll found, no issue is more critical to Americans this election cycle than terrorism, with nearly seven in ten (66 percent) reporting that terrorism is a critical issue to them personally. And yet, Americans are sharply divided on questions of terrorism as it pertains to their personal safety. Six in ten (62 percent) Republicans report that they are at least somewhat worried about being personally affected by terrorism, while just 44 percent of Democrats say the same. 

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

74 percent of Republicans and 83 percent of Trump supporters believe that foreign influence over the American way of life needs to be curtailed.  Just 41 percent of Democrats agree, while a majority (56 percent) disagrees with this statement. Views among white Americans are sharply divided by social class, the report finds. While 68 percent of the white working class agrees that the American way of life needs to be protected, fewer than half (47 percent) of white college-educated Americans agree.

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

 

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

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

 

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

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

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

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

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