Trade
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This event is presented in conjunction with the Japan Society of Northern California.

About the talk

Orthodox economic theory views cognition as taking place inside the skull and skin of individuals. For example, the contract theory of the firm is based on such premise. However, one of essential features of corporate firms can be seen as systems of group-level, distributed cognition.

From this perspective, Aoki identifies five generic types of organizational architecture in terms of three-way relationships between management's and employees' cognitive assets and physical tools of group-level cognition (e.g., computers, file, machines, etc.). He will discuss a variety of governance structures complementary to each of them. It is hoped that in this way, an essential aspect of a competitive form of architectural-governance evolving in global markets beyond national characteristics may be identified.

Aoki will conclude with a suggestion of information roles of equity markets subtly different from what the orthodox finance-property rights theory indicates.

About the speaker

Masahiko Aoki is the Henri and Tomoye Takahashi Professor Emeritus of Japanese Studies in the Economics Department, and senior fellow of Stanford Institute of Economic Policy Research (SIEPR) and Freeman Spogli Institute for International Studies (FSI) at Stanford University. He is a theoretical and applied economist with a strong interest in institutional and comparative issues. His preferred field covers the theory of institution, corporate governance, the Japanese and Chinese economies, and modularity.

Aoki's most recent book, Toward a Comparative Institutional Analysis, was published in 2001 by MIT Press. This work develops a conceptual and analytical framework for integrating comparative studies of institutions in economics and other social sciences based on game-theoretic apparatus. His research has been also published in the leading journals in economics, including the American Economic Review, Econometrica, the Quarterly Journal of Economics, Review of Economic Studies, the Journal of Economic Literature, and Industrial and Corporate Change.

Aoki is president of the International Economic Association (2005-2008) and a former president of the Japanese Economic Association. He is a fellow of the Econometric Society and the founding editor of the Journal of Japanese and International Economies, as well as an associate editor and member of the scientific advisory committees for various professional journals. He was awarded the Japan Academy Prize in 1990, and in 1998 he took the 6th International Schumpeter Prize. Between 2001 and 2004, Aoki served as the President and Chief Research Officer (CRO) of the Research Institute of Economy, Trade and Industry (RIETI), an independent administrative institution specializing in public policy research in Japan.

Aoki graduated from the University of Tokyo with a BA and an MA in economics and earned a PhD in economics from the University of Minnesota in 1967. He was formerly an assistant professor at Stanford University and Harvard University and served as both an associate and full professor at the University of Kyoto before re-joining the Stanford faculty in 1984 after sixteen years of absence. He became professor emeritus in 2004 to concentrate on research as well as be engaged in various international activities.

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Henri and Tomoye Takahashi Professor of Japanese Studies, Department of Economics, Emeritus
Senior Fellow at the Freeman Spogli Institute for International Studies, Emeritus
Senior Fellow at Stanford Institute for Economic Policy Research (SIEPR)
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Masahiko Aoki was the Henri and Tomoye Takahashi Professor Emeritus of Japanese Studies in the Department of Economics, and a senior fellow of the Stanford Institute of Economic Policy Research and the Freeman Spogli Institute for International Studies at Stanford University.

Aoki was a theoretical and applied economist with a strong interest in institutional and comparative issues. He specialized in the theory of institutions, corporate architecture and governance, and the Japanese and Chinese economies.

His most recent book, Corporations in Evolving Diversity: Cognition, Governance, and Institutions, based on his 2008 Clarendon Lectures, was published in 2010 by Oxford University Press. It identifies a variety of corporate architecture as diverse associational cognitive systems, and discusses their implications to corporate governance, as well their modes of interactions with society, polity, and financial markets within a unified game-theoretic perspective. His previous book, Toward a Comparative Institutional Analysis, was published in 2001 by MIT Press. This work developed a conceptual and analytical framework for integrating comparative studies of institutions in economics and other social science disciplines using game-theoretic language. Aoki's research has been also published in the leading journals in economics, including the American Economic Review, Econometrica, the Quarterly Journal of Economics, Review of Economic Studies, the Journal of Economic Literature, Industrial and Corporate Change, and the Journal of Economic Behavior and Organizations.

Aoki was the president of the International Economic Association from 2008 to 2011, and is also a former president of the Japanese Economic Association. He is a fellow of the Econometric Society and the founding editor of the Journal of Japanese and International Economies. He was awarded the Japan Academy Prize in 1990, and the sixth International Schumpeter Prize in 1998. Between 2001 and 2004, Aoki served as the president and chief research officer of the Research Institute of Economy, Trade, and Industry, an independent administrative institution specializing in public policy research in Japan.

Aoki graduated from the University of Tokyo with a B.A. and an M.A. in economics, and earned a Ph.D. in economics from the University of Minnesota in 1967. He was formerly an assistant professor at Stanford University and Harvard University and served as both an associate and full professor at the University of Kyoto before rejoining the Stanford faculty in 1984.

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Masahiko Aoki Speaker
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A major dimension of effective international cooperation on climate change will be to more successfully engage developing countries in curbing greenhouse gases. The carrots and sticks that have been used for compliance under the current international affairs regime have not given good prospects for the reduction of CO2. This is largely because of the mis-alignment of countries' interests and capabilities. Victor provides an innovative scenario on designing a new institutional framework that would engage developing countries based on current accession protocols used in international economic institutions such as the WTO, OECD, and IMF.

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The change of Russian foreign policy under President Putin, the war in Georgia, and the recent disputes over Russian gas exports cannot but affect Moscow's relations with the European Union. Looking back at the history of these relations in the 1960s and 1970s will provide the analyst with valuable insights and with recommendations for future European policy.

Dr. Mueller focuses not only on Russia's current relations with the EU but also the historical buildup to the current state of play. He examines the most recent issues straining the EU-Russia relationship and the dependence of the two powers on each other. Dr. Mueller also leads the audience from World War II to the USSR's eventual recognition of the EEC in 1988. 

Synopsis

Dr. Mueller begins by introducing the current status of both the EU and Russia. As it stands, Russia’s population of 142m people is outweighed significantly by the EU’s 500m. In addition, Dr. Mueller reminds the audience that the EU’s economy is 10 times the size of Russia’s. However, the two are important trade partners. To Russia, the EU represents more than 50% of its trade. To the EU, Russia represents its 3rd largest trading partner. However, the EU’s dependence on Russia for energy is crucial. Dr. Mueller explains how various integration efforts have come to very little. The 1997 Partnership and Cooperation Agreement has not been renewed, and the four common spaces approach the EU took to Russia has borne little fruit. Dr. Mueller reveals how relations are further strained by a variety of current issues such as debates over disarmament, democracy in Russia, and Kosovo.

In order to properly understand this, Dr. Mueller returns to the post-World War II period and the formation of the EEC in 1957. While Western European countries saw the EEC as an opportunity to unite and help each other in economic recovery after the war, the USSR perceived it as an economic base for NATO and an organization standing in the way of the USSR becoming Europe’s supreme power. Dr. Mueller describes how the Soviet Union was forced to change such an attitude because of the success of the EEC in raising wages in member states as well as Eastern European countries’ increasing dependence on it as an export partner. In 1962, Khrushchev took a new approach to all-European integration but his offer of formal relations fell through when de Gaulle vetoed the UK’s membership application into the EEC. Such efforts on the part of the USSR fell through once again in 1972 when the EEC was not interested in dealing with Comecon. Under Gorbachev, the USSR finally recognized the EEC in 1988. Dr. Mueller concludes by saying that while it was obvious that USSR did not really endorse Western European integration, it is surprising that the USSR did not see it as an opportunity to counter U.S. influence during the Cold War.

About the Speaker

Dr Wolfgang Mueller is a research fellow at the Austrian Academy of Sciences and a lecturer in Russian history and politics at the University of Vienna. His book on Soviet policy in Austria, Die sowjetische Besatzung in Österreich 1945-1955 (Böhlau 2005), was awarded the R.G. Plaschka Prize. Dr Mueller was a visiting scholar at the Freeman Spogli Institute's Forum on Contemporary Europe during the 2008-2009 academic year.

Encina Ground Floor Conference Room

616 Serra Street
Encina Hall E103
Stanford, CA 94305-6055

(650) 724-8020 (650) 725-2592
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Research Scholar, Austrian Academy of Sciences
Visiting Scholar, Forum on Contemporary Europe
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Dr Wolfgang Mueller, PhD in contemporary history and Russian studies (University of Vienna), is a research associate at the Austrian Academy of Sciences. Former professional affiliations include the Montreal Holocaust Memorial Centre, Canada, and the Institute of East European History, University of Vienna. Wolfgang Mueller was a visiting fellow at the Russian Academy of Sciences and a member of OSCE missions to the CIS area. He teaches Russian history and politics at the University of Vienna.

Research interests: Russian and Soviet foreign policy, international relations, the Cold War, European integration. Current research projects: continuities in Russian foreign policy behavior, the USSR/Russia and European integration; the revolutions of 1989.

Wolfgang Mueller’s book on postwar Soviet policy in Austria Die sowjetische Besatzung in Österreich 1945-1955 (2005) was awarded the Richard G. Plaschka Prize. Further publications include Sovetskaia politika v Avstrii: Dokumenty iz Rossiiskikh arkhivov (with N. Naimark, A. Suppan, G. Bordiugov eds. 2005); The Austrian State Treaty 1955: International Strategy, Legal Relevance, National Identity (with G. Stourzh, A. Suppan eds. 2005); “Stalin and Austria: New Evidence on Soviet Policy in a Secondary Theatre of the Cold War,” Cold War History 6 (2006) 1; Osteuropa vom Weltkrieg zur Wende (with M. Portmann eds. 2007); “Die UdSSR und die europäische Integration,” in From the Common Market to European Union Building (M. Gehler ed. 2009); Peaceful Coexistence or Iron Curtain? Austria, Neutrality, and Eastern Europe 1955-1989 (Forthcoming).

Dr. Mueller was a visiting scholar with the Forum on Contemporary Europe from October 2008 through March 2009.

Wolfgang Mueller Research Scholar, Austrian Academy of Sciences; Visiting Scholar, Forum on Contemporary Europe Speaker
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Daishiro Nomiya
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In activist communities worldwide, globalization has had an enormous impact, both in the composition of activist groups and the content of their messages. At the same time, regional concerns are playing a significant role in the ways protests are organized, managed, and deployed.

Regardless of their location or their target, it is clear that protest campaigns have, on the one hand, become increasingly globalized. The protests that took place during the July 2008 G8 Toyako Summit in Japan offer a case in point. Approximately one hundred transnational activists flew into Sapporo, a city located near the summit site, and joined various civil and protest activities. Over a loudspeaker, they broadcast statements denouncing the summit meeting as “antidemocratic” and “discriminatory against the poor.” These activists were drawn from East, Southeast, and Central Asia, as well as Europe and North America, and they voiced correspondingly global concerns—for human rights, global peace, and democracy, and against inequality and poverty. These themes echoed those of other major global protests, including demonstrations that took place against the International Monetary Fund and the World Trade Organization, the latter most notably in 1999 in Seattle. Indeed, protests of this kind represent what might be called an antiglobalization movement

On the other hand, global movements of this kind also appear to be organized on an increasingly regional basis. Though the activists who protested the Toyako Summit came from all over the world, and addressed topics of global importance, most of the participants came mainly from South Korea, Hong Kong, and Taiwan. Given this apparent dichotomy, the question arises: Will global social movements become regional?

One could argue that global social movements are and will remain regional, at least for the time being, for two practical reasons. First, the costs associated with flight to activist hubs near protest sites can be expensive. Second, the amount of time spent in transition to the protest site becomes a burden. The time doubles when taking into consideration the time spent to return to the originating country. These factors can be prohibitive especially to those based far away, but are less burdensome to regional activists, thus making it easier for nearby protesters to participate.

While time and cost are no doubt a concern, they may not be as important when compared with the other factors. Language is among these factors. Cooperative activities beyond the national borders are on the rise, yet many foreign activists do not speak the languages spoken in the countries where they protest. They invariably rely on English, widely accepted as the “global” language. Yet the levels of English fluency differ among participating activists, and this is a key factor. With their English ability, activists from Europe and North America tend to communicate with others on an individual basis, while those from nearby countries often rely on interpreters, especially when discussions delve into the details of the planned activity and necessary arrangements associated with it. Typically, interpreters are group leaders, well educated and knowledgeable about regional and global issues—and these individuals facilitate most intergroup communication.

Preestablished ties and preexisting communication can influence negotiation and cooperation processes among activists. Global social movements tend to enhance crossnational cooperation among participating activists—that is, activists who come together from different countries often regroup elsewhere, building on their previous cooperative activities. In the case of the 2008 G8 summit protests, regionalization was very much at work. Several months prior to the summit, Japanese media activists planned a temporary umbrella organization called the G8 Media Network, which helped to accommodate incoming foreign media activists and arranged international cooperative activities during the summit. As it happened, the foreign activists and groups that interacted with the G8 Media Network were actually regional, originating mainly from South Korea and Hong Kong. Under the auspices of the G8 Media Network, these groups of activists arrived prior to the summit and stayed until it concluded. Afterward, the same media groups discussed the continuation of crossnational cooperation. Though technically foreign, the dominant actors and groups who sought to continue cooperative activities were, in fact, only from neighboring countries.

Looking more closely at participants in the global protest activities provides further insight into contemporary global protest movements. At the 2008 G8 Summit protests, two different types of foreign participants were on display—those who had prior ties to host activist groups in Japan, and those who did not. The former group could be described as professional activists, whose preestablished ties ensure that they have good knowledge of a given protest’s scheduled activities. The professional group also organizes its own plans of action, precoordinated with domestic groups. The latter group tends to be traveling activists, a more or less independent and unorganized collection of individuals who enjoy traveling the globe and joining the activities offered at protest sites worldwide. The professional activist group is often drawn largely from neighboring countries in the region.

Most global social movements feature participants from around the world. At the same time, signs of regionalization also exist, making most protests both global and regional in nature. One could claim that the future of global social movements is regional. But whether global or regional, it is vital that we continue to study the composition of global protest movements and their abiding impact on civil society.

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Seema Jayachandran is an assistant professor in the Department of Economics at Stanford University. She is also a Faculty Research Fellow at the National Bureau of Economic Research (NBER), and a Research Affiliate of the Bureau for Research and Economic Analysis of Development (BREAD), Centre for Economic Policy Research (CEPR), and Stanford Center for International Development (SCID).

Her research focuses on microeconomic issues in developing countries, including health, education, labor markets, and political economy. Her work has been published in the American Economic Review ("Odious Debt," on sovereign debt incurred by dictators), Journal of Political Economy ("Selling Labor Low," on labor market risk in India), and the Quarterly Journal of Economics ("Life Expectancy and Human Capital Investments," on increased education caused by declines in maternal mortality in Sri Lanka), and other journals.

Her current projects are based in India, Nepal, and Zimbabwe. She also works on social issues in the United States. Previously she was a Robert Wood Johnson Scholar in Health Policy Research at the University of California, Berkeley. She also worked as a management consultant with McKinsey & Company in San Francisco. She earned a PhD and master's degree from Harvard University, a master's degree from the University of Oxford where she was a Marshall Scholar, and a bachelor's degree from MIT.

Seminar summary:

Seema Jayachandran's presentation focused on the problem of what to do about "odious debt" -- that is, debt lent to rogue regimes that ultimately must be borne and paid by successive (legitimate) governments. She asks to what extent the status quo can change so that lenders will not want to lend to illegitimate governments. Her solution lies in increasing the costs of lending to rogue regimes through a policy of loan sanctions. Adopting an ex ante posture, Jayachandran argues that interests rates for loans would move toward infinity if banks knew that future legitimate governments would repudiate the debts of past regimes, particularly if new governments would have the blessing of the international community to do so. The loan-sanctions solution addresses a challenge faced by the debt relief movement, which focuses on debt "overhang," which weakens a poor country's economy. Instead, loan sanctions focus on the notion that some debt is, simply, illegitimate. And while trade sanctions pose problems (Jayachandran mentions that trade sanctions are often easy to evade and hurt people more than government), loan sanctions prevent a sanctioned government from borrowing. Loan sanctions are also self- enforcing (e.g., a lender would not lend if that lender knew it was unlikely to be repaid). The author raised questions for debate about who or what international body would implement loan sanctions or policy, the problem of banks making short-term loans to dictators who pay, and defining bad behaviors narrowly (or broadly) enough so as to target rogue or illegitimate regimes.

Encina Ground Floor Conference Room

Seema Jayachandran Assistant Professor of Economics Speaker Stanford Univesity
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President Obama’s inauguration one week from today invites us to consider the
immediate agenda and outlook for U.S.-ROK relations. That agenda might usefully
address the following items:

  • Setting an appropriate tone and atmosphere for the bilateral relationship
  • Identifying first year goals for the alliance – and beyond
  • Crafting a mutually agreed vision and strategy for managing the challenges posed
  • by North Korea’s nuclear ambitions, economic frailty and looming succession
  • Confirming and strengthening overall alliance and security policy
  • Finding a way to proceed on KORUS – the Korea-U.S. Free Trade Agreement
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Don Keyser
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As the former President of Pakistan, Pervez Musharraf held "the world's most dangerous job," according to TIME Magazine. He has twice come within inches of assassination. His forces have caught more than 670 members of al Qaeda in the mountains and cities, yet many others remain at large and active, including Osama bin Laden. Long locked in a deadly embrace with its nuclear neighbor India, Pakistan has come close to full-scale war on two occasions since exploding a nuclear bomb in 1998. No stranger to controversy, President Musharraf has faced challenges with high stakes for the world at large. He offers an unparalleled view into the center of a region where the eyes of the world remain focused. President Musharraf's insights into Pakistan and its role in today's global challenges — from the economy to trade to energy — are not to be missed.

President Musharraf will be sharing his opinions and experiences in a keynote address entitled "Terrorism and Extremism: The Need for a Holistic Approach." This address will be followed by a unique conversation format with Stanford professor Scott Sagan, in addition to an audience question and answer session. During the question and answer session, students are encouraged to engage the speaker in an open and honest dialogue. The event aims to promote free speech and discussion on the Stanford campus.

This event is cosponsored by Stanford in Government (SIG), ASSU Speakers Bureau, the Public Policy Program, Stanford in Washington, the Center for International Security and Cooperation, the Freeman Spogli Institute for International Studies, the International Relations Program, the Abbasi Program in Islamic Studies, the Bechtel International Center, the Stanford Journal of International Relations, and the Muslim Student Awareness Network.

Memorial Auditorium
551 Serra Mall

Pervez Musharraf Former President of Pakistan Speaker

CISAC
Stanford University
Encina Hall, E202
Stanford, CA 94305-6165

(650) 725-2715 (650) 723-0089
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The Caroline S.G. Munro Professor of Political Science
The Bass University Fellow in Undergraduate Education  
Senior Fellow, Freeman Spogli Institute for International Studies
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Scott D. Sagan is Co-Director and Senior Fellow at the Center for International Security and Cooperation, the Caroline S.G. Munro Professor of Political Science, and the Bass University Fellow in Undergraduate Education at Stanford University. He also serves as Co-Chair of the American Academy of Arts and Sciences’ Committee on International Security Studies. Before joining the Stanford faculty, Sagan was a lecturer in the Department of Government at Harvard University and served as special assistant to the director of the Organization of the Joint Chiefs of Staff in the Pentagon.

Sagan is the author of Moving Targets: Nuclear Strategy and National Security (Princeton University Press, 1989); The Limits of Safety: Organizations, Accidents, and Nuclear Weapons (Princeton University Press, 1993); and, with co-author Kenneth N. Waltz, The Spread of Nuclear Weapons: An Enduring Debate (W.W. Norton, 2012). He is the co-editor of Insider Threats (Cornell University Press, 2017) with Matthew Bunn; and co-editor of The Fragile Balance of Terror (Cornell University Press, 2022) with Vipin Narang. Sagan was also the guest editor of a two-volume special issue of DaedalusEthics, Technology, and War (Fall 2016) and The Changing Rules of War (Winter 2017).

Recent publications include “Creeds and Contestation: How US Nuclear and Legal Doctrine Influence Each Other,” with Janina Dill, in a special issue of Security Studies (December 2025); “Kettles of Hawks: Public Opinion on the Nuclear Taboo and Noncombatant Immunity in the United States, United Kingdom, France, and Israel”, with Janina Dill and Benjamin A. Valentino in Security Studies (February 2022); “The Rule of Law and the Role of Strategy in U.S. Nuclear Doctrine” with Allen S. Weiner in International Security (Spring 2021); “Does the Noncombatant Immunity Norm Have Stopping Power?” with Benjamin A. Valentino in International Security (Fall 2020); and “Just War and Unjust Soldiers: American Public Opinion on the Moral Equality of Combatants” and “On Reciprocity, Revenge, and Replication: A Rejoinder to Walzer, McMahan, and Keohane” with Benjamin A. Valentino in Ethics & International Affairs (Winter 2019).

In 2022, Sagan was awarded Thérèse Delpech Memorial Award from the Carnegie Endowment for International Peace at their International Nuclear Policy Conference. In 2017, he received the International Studies Association’s Susan Strange Award which recognizes the scholar whose “singular intellect, assertiveness, and insight most challenge conventional wisdom and intellectual and organizational complacency" in the international studies community. Sagan was also the recipient of the National Academy of Sciences William and Katherine Estes Award in 2015, for his work addressing the risks of nuclear weapons and the causes of nuclear proliferation. The award, which is granted triennially, recognizes “research in any field of cognitive or behavioral science that advances understanding of issues relating to the risk of nuclear war.” In 2013, Sagan received the International Studies Association's International Security Studies Section Distinguished Scholar Award. He has also won four teaching awards: Stanford’s 1998-99 Dean’s Award for Distinguished Teaching; Stanford's 1996 Hoagland Prize for Undergraduate Teaching; the International Studies Association’s 2008 Innovative Teaching Award; and the Monterey Institute for International Studies’ Nonproliferation Education Award in 2009.     

Co-director of the Center for International Security and Cooperation
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Larry Diamond
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Bush gave democracy promotion a bad name, Larry Diamond writes in Newsweek. The new administration needs to get it right.

The new U.S. President will face more than one kind of global recession. In addition to the economic downturn, the world is suffering a democratic contraction. In Russia, awash with oil money, Vladimir Putin and his KGB cronies have sharply restricted freedom. In Latin America, authoritarian (and anti-American) populism is on the rise. In Nigeria, the Philippines and once again in Pakistan, democracy is foundering amid massive corruption, weak government and a loss of public faith. In Thailand, the government is paralyzed by mass protests. In Africa, more than a dozen fragile democracies must face the economic storm unprepared. And in the Middle East—the Bush administration's great democratic showcase—the push for freedom lies in ruins.

In the past decade, the breathtaking democratic wave that swept the world during the final quarter of the 20th century reversed course. Making democracy work proved harder than bringing down authoritarian rule. And receptive peoples everywhere were alienated by the arrogance and unilateralism of President George W. Bush's approach, which associated "democracy promotion" with the use of force and squandered America's soft power. Advancing democracy abroad remains vital to the U.S. national interest. But the next president will have to craft a more modest, realistic and sustainable strategy.

It's easy today to forget how far freedom has advanced in the past 30 years. When the wave of liberation began in 1974 in Portugal, barely a quarter of the world's states met the minimal test of democracy: a place where the people are able, through universal suffrage, to choose and replace their leaders in regular, free and fair elections. Over the course of the next two decades, dictatorships gave way to freely elected governments first in Southern Europe, then in Latin America, then in East Asia. Finally, an explosion of freedom in the early '90s liberated Eastern Europe and spread democracy from Moscow to Pretoria. Old assumptions—that democracy required Western values, high levels of education and a large middle class—crumbled. Half of sub-Saharan Africa's 48 states became democracies, and of the world's poorest countries, about two in every five are democracies today.

This great shift coincided with an unprecedented moment of U.S. military, economic and cultural dominance. Not only was America the world's last remaining superpower, but U.S. values—individual freedom, popular sovereignty, limited government and the rule of law—were embraced by progressive leaders around the world. Opinion surveys showed democracy to be the ideal of most people as well.

In recent years, however, this mighty tide has receded. This democratic recession has coincided with Bush's presidency, and can be traced in no small measure to his administration's imperial overreach. But it actually started in 1999, with the military coup in Pakistan, an upheaval welcomed by a public weary of endemic corruption, economic mismanagement and ethnic and political violence. Pakistan's woes exposed more than the growing frailty of a nuclear-weapon state. They were also the harbinger of a more widespread malaise. Many emerging democracies were experiencing similar crises. In Latin America and the post-communist world, and in parts of Asia and Africa, trust in political parties and parliaments was sinking dramatically, as scandals mounted and elected governments defaulted on their vows to control corruption and improve the welfare of ordinary people.

Thanks to bad governance and popular disaffection, democracy has lost ground. Since the start of the democratic wave, 24 states have reverted to authoritarian rule. Two thirds of these reversals have occurred in the past nine years—and included some big and important states such as Russia, Venezuela, Bangladesh, Thailand and (if one takes seriously the definition of democracy) Nigeria and the Philippines as well. Pakistan and Thailand have recently returned to rule by elected civilians, and Bangladesh is about to do so, but ongoing crises keep public confidence low. Democracy is also threatened in Bolivia and Ecuador, which confront rising levels of political polarization. And other strategically important democracies once thought to be doing well—Turkey, South Africa and Ukraine—face serious strains.

This isn't to say there haven't been a few heartening successes in recent years. Indonesia, the world's most populous Muslim country, has become a robust democracy nearly a decade after its turbulent transition from authoritarian rule. Brazil, under the left-leaning Luiz Inácio Lula da Silva, has also strengthened its democratic institutions while maintaining fiscal discipline and a market orientation and reducing poverty. In Africa, Ghana has maintained a quite liberal democracy while generating significant economic growth, and several smaller African countries have moved in this direction.

But the combination of tough economic times, diminished U.S. power and the renewed energy of major authoritarian states will pose a stiff challenge to some 60 insecure democracies in Asia, Africa, Latin America and the former Soviet bloc. If they don't strengthen their political institutions, reduce corruption and figure out how to govern more effectively, many of these democracies could fail in the coming years.

Part of the tragedy is that Washington has made things worse, not better. The Bush administration was right that spreading democracy would advance the U.S. national interest—that truly democratic states would be more responsible, peaceful and law-abiding and so become better contributors to international security. But the administration's unilateral and self-righteous approach led it to overestimate U.S. power and rush the dynamics of change, while exposing itself to charges of hypocrisy with its use of torture and the abuse of due process in the war on terror. Instead of advancing freedom and democracy in the Middle East, 2005 and 2006 witnessed a series of embarrassing shocks: Hamas winning in the Palestinian territories and Islamist parties winning in Iraq; Hizbullah surging in Lebanon and the Muslim Brotherhood surging in Egypt. After a brief moment of optimism, the United States backed away and Middle Eastern democrats grew embittered.

The new American administration will have to fashion a fresh approach—and fast. That will mean setting clear priorities and bringing objectives into alignment with means. The United States does not have the power, resources or moral standing to quickly transform the world's entrenched dictatorships. Besides, isolating and confronting them never seems to work: in Cuba, for example, this policy has been a total failure. This does not mean that the United States should not support democratic change in places like Cuba, Burma, Iran and Syria. But it needs a more subtle and sophisticated approach.

The best strategy would be to open up such places to the freer flow of people, goods, ideas and information. The next administration should therefore start by immediately lifting the self-defeating embargo on Cuba. It should offer to establish full diplomatic ties with Havana and free flows of trade and investment in exchange for a Cuban commitment to improve human rights. Washington should also work with Tehran to hammer out a comprehensive deal that would lift economic sanctions, renounce the use of force to effect regime change and incorporate Iran into the WTO, in exchange for a verifiable halt to nuclear-weapons development, more responsible behavior on Iraq and terrorism, and improved human-rights protection and monitoring. Critics will charge that talking to such odious governments only legitimizes them. In fact, engaging closed societies is the best way to foster democratic change.

At the same time, the United States should continue to support diaspora groups that seek peaceful democratic change back home, and should expand international radio broadcasting, through the Voice of America and more specialized efforts, that transmits independent news and information as well as democratic values and ideas.

In the near term, however, Washington must focus on shoring up existing democracies. Fragile states need assistance to help them adjust to the shocks of the current economic crisis. But they also need deep reforms to strengthen their democratic institutions and improve governance. This will require coordinated help from America and its Western allies to do three things.

First, they must ramp up technical assistance and training programs to help the machinery of government—parliaments, local authorities, courts, executive agencies and regulatory institutions—work more transparently and deliver what people want: the rule of law, less corruption, fair elections and a government that responds to their economic and social needs. This also means strengthening democratic oversight.

Second, we know from experience that these kinds of assistance don't work unless the political leaders on the receiving end are willing to let them. So we need to generate strong incentives for rulers to opt for a different logic of governance, one that defines success as delivering development and reducing poverty rather than skimming public resources and buying support or rigging elections. This will mean setting clear conditions that will have to be met before economic and political aid is doled out to governments.

The third priority is to expand assistance to independent organizations, mass media and think tanks in these fragile states that will increase public demand for better governance and monitor what governments do. This means aiding democratic professional associations, trade unions, chambers of commerce, student groups and organizations devoted to human rights, women's rights, transparency, civic education, election monitoring and countless other democratic activities. Ordinary people must be educated to know their rights and responsibilities as citizens—and be ready to defend them.

While Western countries have provided this kind of aid for more than two decades, economic assistance handed out at the same time has often undermined democracy efforts by subsidizing corrupt, abusive governments. Aid donors should thus strike a new bargain with recipients, telling them: if you get serious about containing corruption, building a rule of law and improving people's lives, we will get serious about helping you. Those that show a real commitment should get significant new rewards of aid and freer trade. Those unwilling to reform should get little, though the West should continue to fight disease and directly help people in dire need wherever they are.

Finally, the new president should keep in mind the power of example. Washington can't promote democracy abroad if it erodes it at home. The contradictions between the rhetoric of Bush's "freedom agenda" and the realities of Abu Ghraib, Guantánamo, torture, warrantless surveillance and boundless executive privilege have led even many of the United States' natural allies to dismiss U.S. efforts as hypocritical. Thus the new president must immediately shut down Guantánamo and unequivocally renounce the use of torture; few gestures would restore American credibility more quickly. The United States should also reduce the power of lobbyists, enhance executive and legislative transparency and reform campaign-finance rules—both for its own good and for the message it would send.

Make no mistake: thanks to the global economic crisis and antidemocratic trends, things may get worse before they get better. But supporting democracy abroad advances U.S. national interests and engages universal human aspirations. A more consistent, realistic and multilateral approach will help to secure at-risk democracies and plant the seeds of freedom in oppressed countries. Patience, persistence and savvy diplomacy will serve the next president far better than moralistic rhetoric that divides the world into good and evil. We've seen where that got us.

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(From the introduction) For more than a decade, international lawyers and international relations scholars have been fascinated by an ever-increasing number of international courts and tribunals. These are producing more international case-law, thereby replacing the traditional scarcity of international law precedents embodied in a few celebrated ICJ and PCIJ cases. Today, there is a host of frequently highly specialized international dispute settlement mechanisms like the WTO Dispute Settlement Body, the International Tribunal for the Law of The Sea, the International Criminal Court, various investment tribunals acting under The International Centre for Settlement of Investment Disputes (ICSID) Convention or other arbitration rules. All apply, interpret and probably ‘make’ international law. One question frequently raised in this context is whether these institutions contribute to the development of a single uniform body of international law or whether they make ‘their own’ ever more fragmented law. To the extent that they must apply specifically agreed upon rules, such as the WTO agreements, various bilateral investment protection treaties or the Law of the Sea Convention, etc., this is of course largely a false problem. In so far as they rely on common rules of international law, coherence vs. fragmentation does indeed arise and is a serious issue.

Scholars of international law have intensely debated these problems mostly under the heading ‘fragmentation’ of international law or ‘proliferation’ of international courts and tribunals. Gerhard Hafner has significantly contributed to this scholarly debate in a number of articles, and most importantly in a report prepared for the International Law Commission (ILC), which triggered the Commission’s work on fragmentation and was further pursued by Gerhard Hafner’s successor on the ILC, Martti Koskenniemi.

It thus appears appropriate to dedicate a few modest thoughts about these issues to a great international lawyer with whom I have had the privilege to work at the Department of International Law and International Relations at the University of Vienna during the last twenty years. Gerhard Hafner will understand that due to the space allotted in this liber amicorum, I must limit the scope of my remarks on fragmentation and proliferation to a specific subfield of international law. He will also appreciate that the chosen field is investment law and arbitration, which, in many respects, may be viewed as a test laboratorium of international law where many of the pertinent problems mentioned above have appeared in particularly visible form.

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Martinus Nijhoff Publishers in "International Law between Universalism and Fragmentation - Festschrift in Honour of Gerhard Hafner", J. Crawford/A. Pellet/I. Buffard/S. Wittich (eds.)
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Christian von Luebke
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At first sight, political turmoil in Thailand and the Philippines—repeated violent protests, impeachment battles, and military coups—gives the impression that democracy in Southeast Asia is on a downward spiral. One country in the region, however, has sustained a stable pluralistic democracy: the Republic of Indonesia.

In 1999, after thirty years of Suharto’s centralistic, authoritarian rule, Indonesia embraced far-reaching decentralization and election reforms. Within a brief period of two years, the Indonesian government reshaped its administrative architecture, including the devolution of local tax and service responsibilities to more than 400 district governments. In view of its deep-seated authoritarian traditions, beginning with Javanese kingdoms and sultanates, moving through Dutch colonialism (1619–1942), and ending with Suharto’s New Order (1965–98), Indonesia’s rapid shift toward democratic decentralization stands out as one of the most remarkable political transitions in recent history.

Particularly notable is the peaceful and competitive conduct of Indonesian elections. Over the last decade, local citizens have elected more than 30,000 local councilors and over 400 mayors, regents, and governors, with little violence or intimidation. High voter turnouts (around 70 percent) and high replacement rates of incumbent executives (roughly 40 percent) bear witness to rising electoral competition in local polities. While subnational elections display considerable flux, the upcoming presidential elections in July 2009 suggest continuity. The latest national polls, for example, predict a comfortable lead for President Susilo Bambang Yudhoyono (49 percent) over his main competitor, Megawati Soekarnoputri (36 percent).

The institutionalization of democracy and decentralization, however, has yet to translate into substantive public sector reforms. Indonesia continues to score low in global governance assessments. According to Transparency International and the World Bank, Indonesia’s government ranks 126th (out of 180) in terms of corruption, and 129th (out of 181) in terms of administrative efficiency for business start-ups. With the introduction of regional autonomy, these governance problems have, to a considerable extent, been decentralized to hundreds of districts. Yet, despite formally uniform institutional settings, local governments exhibit vast differences in regulatory quality, administrative efficiency, and anticorruption measures.

What motivates some local governments to perform better than others? Implicit in this question, which stands at the center of my research, is the idea that local democracy is not only an end in itself, but also a means for improving government outcomes. The pronounced policy differences that arise in Indonesia’s district polities provide a good opportunity to examine the workings of Indonesian local democracy or, to use a different terminology, the political economy of local decision-making.

The findings from controlled case comparisons and subnational datasets suggest that policy variations are best explained by differences in government leadership. Good policy environments emerge primarily in cases where local regents and mayors, whose career aspirations are tested by direct elections, skillfully use their office powers to forge reform coalitions and supervise bureaucratic practices. Societal reform pressures that arise from local parliaments, business chambers, and nongovernmental organizations, in comparison, tend to be less significant drivers of good governance. While broad-based interest groups continue to struggle with collective-action problems, district council members seem more concerned with provincial/national party elites (and their party list positions) than with representing local constituencies. Thus, in Indonesia’s early stage of democratic transition, where societal pressures are yet to fully unfold, much seems to depend on leadership efforts to initiate, facilitate, and oversee government improvements.

Under what conditions, then, are local leaders likely to act in the public interest, rather for private gain? While direct elections provide basic incentives, the direction and strength of these incentives also hinge upon existing socioeconomic structures. Government leaders need to accommodate interests of powerful economic groups in order to secure support for campaign funding and co-investments in public goods. Whether these interest alignments result in unproductive rent-seeking and corruption, or in constructive government reforms, depends on the constellation and transparency of economic powers.  The more economic powers become concentrated in specific sectors, groups, and firms, and the less public-private interactions are monitored by local media, the greater the likelihood that leaders will pursue self-preferential and collusive strategies.

As a result, it is plausible to assume that a moderate economic concentration and strong media presence are conducive to better governance. At this point, only some districts fall into this category. But as globalization and communication technologies progress, local polities are bound to become more economically diverse and politically informed. With growing political awareness and increased incentives for better leadership, it is likely that Indonesia, over time, will see more public-private symbioses for reform and, thus, bridge the gap between well-functioning elections on the one hand and poor governance
on the other.

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