The recent run-up in global food prices is wreaking well-documented havoc throughout the developing world. As prices for major food staples have doubled or tripled over the past 12–18 months, food riots have broken out in more than a dozen countries, and the president of the World Bank has suggested that the rise in food prices will push 100 million people below the poverty line, undoing decades of economic growth almost overnight. FSE’s Peter Timmer calculates that high rice prices alone could cause the premature death of 10 million people in Asia. It is difficult to imagine an issue of more pressing global importance today.

Ongoing FSE research is focusing on which agricultural adaptations should be prioritized, for what crops, and in what locations.Getting prices down out of the stratosphere of course involves understanding what got them there in the first place. And while there is much disagreement over the primacy of different factors, most analysis seems to agree on three important contributors. The first is the recent expansion of biofuels production in the United States and the European Union, which has diverted corn and other grains from traditional feed and food markets into the production of fuel. Turning grain into fuel has been made increasingly profitable by the high and rising price of oil — the second factor in rising food prices — which, in addition to increasing demand for petroleum alternatives, has raised the production costs of farmers, raising transport costs and increasing the price of farm inputs like diesel and fertilizer. Finally, the agricultural and trade policies of various governments around the world have added to the problem, particularly as the nervous governments of a few key Asian rice exporters have attempted to stabilize domestic food supplies by restricting exports, helping send rice prices through the roof.

As these factors have come together in recent months, underwritten by longer-run trends of rising incomes and food demand in the developing world, many analysts have reached for the appealing metaphor of the “perfect storm,” invoking a situation in which everything that could have gone wrong did. But are things really as bad as they might have been?

Perhaps not. The recent spike in food prices saw only a half-hearted contribution from one of the main culprits in past short-run price swings: weather. A bad weather year that harms production in important producing regions often sends prices soaring. One of the best examples is an extreme el Nino event of the sort that occurs roughly once a decade, during which drought cripples rice production throughout much of Southeast Asia. Earlier work by FSE researchers showed that global rice prices can rise 50 percent or more as a result of extreme el Nino events.

The recent food price spikes were certainly not without influence from the weather. For instance, the much-cited long-run drought in Australia — traditionally a large wheat exporter — certainly has put upward pressure on global wheat prices, and there were modest weather-related declines in yield in other parts of the world (such as Russia and Ukraine). On the whole, however, supply disruptions over the past few years have been minor, and favorable weather is expected to result in record harvests for many large food- and feedproducing nations in coming months. But agricultural markets have hardly responded to this good news and prices remain at or near all time highs.

What then might a perfect storm actually look like? Add the effects of climate change to the current mix of biofuels, high oil prices, and trade restrictions, and the recent rise in food prices could be a small measure of things to come. Research is expanding rapidly in the field of climate change impacts, and researchers at FSE are at the forefront of understanding the implications of climate change for humanity’s ability to feed itself. The conventional wisdom has long been that a modest amount of climate change could actually be beneficial for global agriculture, with warming temperatures perhaps lengthening the growing season and expanding the areas in which we can grow crops. But recent work by researchers at FSE and others suggests that climate change could hurt agriculture immediately and, in some places, severely.

The rise in food prices will push 100 million people below the poverty line, undoing decades of economic growth almost overnight. High rice prices alone could cause the premature death of 10 million people in Asia.In a paper published in the January issue of the journal Science, an FSE research team led by David Lobell examined the likely effects of climate change on agriculture throughout the developing world. Combining data from a suite of climate models that simulate future changes in rainfall and precipitation with a host of historical data on climate and agricultural production, Lobell and colleagues found that by 2030 the production of staple crops in some of the poorest parts of sub- Saharan Africa could decline by 30 percent or more in the absence of adaptation, with somewhat smaller declines predicted for much of South and Southeast Asia. Production declines of this magnitude represent monumental declines in welfare for some of the poorest people on earth, the same populations currently being buffeted by high food prices.

Unfortunately, new evidence also questions the ability of higher latitude countries such as the United States to cover the production shortfalls in the developing world. Again contrary to perceived wisdom, this new work shows that climate change could immediately harm agriculture in this country and other large exporting regions, further constraining global supply. Such a climate-induced supply shock, in the context of the recent developments on the demand side for food, could give us a true perfect storm for high food prices. Recent price spikes might only pale in comparison.

Given the imminence and magnitude of the production decline possible and the attendant possibilities for rising food prices and hunger throughout the developing world, FSE researchers are turning from predicting impacts to assessing adaptation options. In particular, ongoing research is focusing on which agricultural adaptations should be prioritized, for what crops, and in what locations. To that end, FSE researchers recently received a $350,000 grant from the Rockefeller Foundation — one of the most important funders of agricultural research — to help the foundation prioritize agricultural investments in sub-Saharan Africa in the face of climate change. With the potentially severe impacts of climate change already on our doorstep, there is little time to lose.

The July/August issue of Health Affairs, the leading U.S.-based health policy journal, focuses on China and India. The special issue includes an article on China’s pharmaceutical policy by five contributors to Prescribing Cultures and Pharmaceutical Policy in the Asia-Pacific, a book forthcoming in 2009 from the Shorenstein Asia-Pacific Research Center series with Brookings Institution Press. Chapters on Korea and Japan by Soonman Kwon (Seoul National University) and Toshiaki Iizuka (Aoyama Gakuin University) also appear in Chinese translation in the journal Bijiao (Comparative Studies), along with an overview paper (“Pharmaceutical policy reforms to separate prescribing from dispensing in Japan and South Korea: Possible implications for China”) by Karen Eggleston, Asian Health Policy Program Director.

As Eggleston writes in the introduction to Prescribing Cultures, pharmaceuticals and their regulation play an increasingly important and often contentious role in the health care systems of the Asia Pacific.  For example, some economies such as China have extraordinarily high drug spending as a percentage of total health spending; India and a few others host thriving domestic pharmaceutical industries of global importance, while controversy surrounds patents, trade-related aspects of intellectual property (TRIPS), and pharmaceutical pricing within bilateral trade agreements (Australia-US, Republic of Korea-US); nations throughout the region struggle with appropriate regulation of drugs, from patents to evidence-based purchasing (e.g., Australia’s Pharmaceuticals Benefit Scheme) and direct-to-consumer advertising; deeply-rooted traditions of indigenous medicine are modernizing and integrating into broader health care systems; and policies to separate prescribing and dispensing re-write the professional roles of physicians and pharmacists, with modifications to accommodate cultural norms and strong economic interests. Effective prescribing and pharmaceutical use will be central to controlling infectious diseases, both old and emerging; protecting the global public good of antimicrobial effectiveness; and treating the growing burden of chronic disease in the Asia Pacific.

The forthcoming book will explore these issues in detail, through a multi-disciplinary lens. The first section of the book features chapters on pharmaceutical policy within seven selected health care systems of the Asia Pacific: South Korea, Japan, Thailand, Taiwan, Australia, India, and China. The second section focuses on the cross-cutting themes of prescribing cultures and access versus innovation. Taken as a whole, the contributions aim to provide an evidence base for policy while acknowledging the historical and cultural context that makes policies distinctive.

Clear evidence suggests the importance of health service provider payment incentives for achieving efficiency, equal access, and quality, including attention to primary, secondary, and tertiary prevention. “Pay for performance” may be on the cusp of significant expansion in Asia, and reform away from fee-for-service has been underway for several years in several economies. Yet despite the policy relevance, the evidence base for evaluating payment reforms in Asia is still very limited.

China in particular has been undertaking significant reforms to its health care system in both rural and urban areas. With the expansion of insurance coverage and need to resolve incentive problems like “supporting medical care through drug sales,” there is an urgent need for evaluating alternative ways of paying health service providers. Evidence from policy reforms in specific regions of China, as well as other economies of the Asia-Pacific, can provide valuable evidence to help inform policy decisions about how to align provider incentives with policy goals of quality care at reasonable cost.

To illuminate these questions, the Asia Health Policy Program and several collaborating institutions are planning to convene a conference on health care provider payment incentives on November 7-8, 2008 in Beijing. The conference will highlight and seek to distill “best-practice” lessons from rigorous and policy-relevant evaluations of recent reforms in China and elsewhere in the Asia Pacific.

The organizing committee – including health economists from Shorenstein APARC, Peking University, Tsinghua University, and Seoul National University – reviewed submissions in June 2008 and accepted sixteen. The conference papers cover payment issues in Korea, Japan, China, Taiwan, Thailand, Tajikistan, the Philippines, and the US, and the disciplines of economics, health services research/health policy, public health, medicine, and ethics. Topics include institutionalized informal payments; the impact of global budget policies on high-cost patients; public-private partnerships; public-sector physicians owning private pharmacies; evidence-informed case payment rates; payment and hospital quality; bonuses and physician satisfaction; physician prescription choice between brand-name and generic drugs; and differences in pharmaceutical utilization across insurance plans that pay providers differently (fee-for-service versus capitation).

Policymakers from China’s National Development and Reform Commission and Ministry of Health will also speak at the conference. Selected research papers will be published through the Shorenstein Asia-Pacific Research Center either in a special volume or in a special issue of an English-language health policy journal.

While in London, Senior Research Scholar Rafiq Dossani spent time discussing the reasons behind India's continued rise and his recent book India Arriving: How This Economic Powerhouse is Redefining Global Business with CNBC's Europe Tonight host Guy Johnson. You can watch the interview here CNBC - Europe Tonight

In Political Change in China: Comparisons with Taiwan, CDDRL's Democracy in Taiwan program marshals commentary from leading experts on what lessons, if any, Taiwan's experience of democratization might hold for China's future. The volume was co-edited by Larry Diamond and includes a chapter by Weitseng Chen, one of CDDRL's 2007-08 Hewlett Fellows.

Much existing literature champions renewables implementation on India’s Sagar Island as an unqualified rural electrification success story.  Photovoltaic (PV) and wind systems put in place by the West Bengal Renewable Energy Development Agency (WBREDA) have clearly brought benefits to many of the island’s residents.

The highly-touted community management system governing the projects has been successful at instilling local pride and overcoming the traditionally thorny problem of tariff non-collection.  At the same time, an on-the-ground look at the Sagar Island experience identifies some deeper liabilities of the business model guiding the renewables projects.  Two of the ostensible strengths of the Sagar Island implementation – the harmonious tariff collection associated with community management and the resources, competence, and assertiveness of WBREDA itself – can at the same time be considered weaknesses limiting the scope, sustainability, and replicability of the projects. 

This working paper considers these questions through a case study of a typical Sagar Island facility, the Mritunjoynagar PV power plant.  It finds that Mritunjoynagar’s inability to recoup its full operating and maintenance costs by providing appropriate incentives for profit maximization limits the expansion of the project and threatens its long-term sustainability, or at least the relevance of its business model in the absence of a highly-visible champion like WBREDA to ensure continued support.  For WBREDA and other agencies to sustain and replicate similar projects—and their attendant benefits—throughout India, they must adjust their economic model, as WBREDA is beginning to implicitly acknowledge in exploring a franchise model for future efforts.

WASHINGTON, July 8, 2008 — The National War Powers Commission, co-chaired by former Secretaries of State James A. Baker, III and Warren Christopher, today recommended that Congress repeal the War Powers Resolution of 1973 and substitute a new statute that would provide for more meaningful consultation between the president and Congress on matters of war.

In a report released today after 13 months of study, the Commission concluded that the War Powers Resolution of 1973 has failed to promote cooperation between the two branches of government and recommended that Congress pass a new statute – the War Powers Consultation Act of 2009 – that would establish a clear process on decisions to go to war.

“This statute does not attempt to resolve the constitutional questions that have dominated the debate over the war powers, and does not prejudice the president or Congress their right or ability to assert their respective constitutional war powers,” said Baker. “What we aim to do with this statute is to create a process that will encourage the two branches to cooperate and consult in a way that is both practical and true to the spirit of the Constitution.”

“We have tried to be as specific as possible in this report and in this legislation,” said Christopher. “We have defined the kinds of armed conflict that would be covered by the statute, and have laid out a clear course of action for both the president and Congress that is practical, constructive and deliberative.”

The War Powers Consultation Act of 2009:

• Provides that the president shall consult with Congress before deploying U.S. troops into “significant armed conflict” – i.e., combat operations lasting, or
• expected to last, more than a week.
• Defines the types of hostilities that would or would not be considered “significant armed conflicts.”
• Creates a new Joint Congressional Consultation Committee, which includes leaders of both Houses as well as the chair and ranking members of key
• committees.
• Establishes a permanent bipartisan staff with access to the national security and intelligence information necessary to conduct its work.
• Calls on Congress, to vote up or down on significant armed conflicts within 30 days.

The Miller Center of Public Affairs at the University of Virginia impaneled the National War Powers Commission in February 2007. This bipartisan commission met seven times over 13 months, interviewing more than 40 witnesses about the respective war powers of the president and Congress.

Commission members: Slade Gorton, former U.S. Senator from Washington; Lee H. Hamilton, former Member of Congress from Indiana; Carla A. Hills, former U.S. Trade Representative; John O. Marsh, Jr., former Secretary of the Army; Edwin Meese, III, former U.S. Attorney General; Abner J. Mikva, former Chief Judge of the U.S. Court of Appeals for the District of Columbia Circuit; J. Paul Reason, former Commander-in-Chief of the U.S. Atlantic Fleet; Brent Scowcroft, former National Security Advisor; Anne-Marie Slaughter, Dean of the Woodrow Wilson School of Public and International Affairs at Princeton University; and Strobe Talbott, President of the Brookings Institution.

Pulitzer Prize-winning historian Doris Kearns Goodwin served as the Commission’s historical advisor. John T. Casteen, III, President of the University of Virginia, and David W. Leebron, President of Rice University, served as ex officio members. John C. Jeffries, Jr., Emerson Spies and Arnold H. Leon Professor of Law of the University of Virginia School of Law, and W. Taylor Reveley, III, Interim President and John Stewart Bryan Professor of Jurisprudence at the College of William & Mary, served as Co-Directors of the Commission.

The James A. Baker, III Institute of Public Policy at Rice University, the Freeman Spogli Institute for International Studies at Stanford University, Stanford Law School, the University of Virginia School of Law, and the William & Mary School of Law served as partnering institutions.