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As part of a new initiative on Greater China, SPRIE has selected two outstanding young scholars as the inaugural SPRIE Fellows at Stanford for research and writing on Greater China and its role in the global knowledge economy. Xiaohong (Iris) Quan and Doug Fuller, from the University of California, Berkeley and MIT, respectively, will join the SPRIE research team for the 2005-2006 academic year.

The primary focus of the program is the intersection of innovation and entrepreneurship and underlying contemporary political, economic, technological, and/or business factors in Greater China (including Taiwan, Mainland China, Singapore). Topics of particular interest include, but are not limited to, university-industry linkages, globalization of R&D, venture capital industry development, networks and flows of managerial and technical leaders, and leading high technology clusters in Greater China. Industries of ongoing research at SPRIE include semiconductors, wireless, and software.

SPRIE Fellows at Stanford will be in residence for at least three academic quarters, beginning in fall 2005. Fellows take part in Center activities, including research forums, seminars, and workshops throughout the academic year, and will present their research findings in SPRIE seminars. They will also participate as members of SPRIE's team in its public and invitation-only seminars and workshops with academic, business, and government leaders. Fellows will also participate in the publication programs of SPRIE and APARC.

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Coit D. Blacker
Heather Ahn
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It is with great pleasure that I announce that Professor Gi-Wook Shin will assume the directorship of the Shorenstein Asia-Pacific Research Center commencing September 1, 2005. Gi-Wook is well qualified to assume this role and to provide APARC with the same kind of leadership he has brought to the Korean Studies Program.

When Professor Shin left UCLA four years ago to come to Stanford, he left the largest Korean studies program in the nation. It must have been quite a gamble for him to come here since there was little by way of Korean studies at Stanford. With true entrepreneurial spirit, Professor Shin has built an impressive and dynamic Korean studies program at SIIS. It hosts luncheon seminars, workshops, and conferences, and has sponsored many Korean scholars, government officials, and business leaders who spend time at Stanford as visiting scholars. It also supports an active research program spearheaded by two postdoctoral research fellows and two Pantech professional fellows. Stanford is steadily becoming a world-class center for contemporary Korean studies.

I have great confidence that Gi-Wook will continue his outstanding work in his new role as the director of Shorenstein APARC. Gi-Wook's strong leadership will prove invaluable in the years to come as the Institute grows and as the International Initiative unfolds. Please join me in congratulating and supporting Gi-Wook in his new role.

Best regards,

Coit. D. Blacker, Director, Stanford Institute for International Studies

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The offshoring of service provision is rapidly becoming the next stage in globalization. As in any new emerging trend, there are new business and investment opportunities emerging. However, remarkably little is known about the scope of the phenomenon and what is happening in the leading corporations and the new business models entrepreneurs are introducing.

On June 17, 2005, Stanford University's Asia-Pacific Research Center is organizing a one-day seminar partially sponsored by the Alfred P. Sloan Foundation and others on the globalization of services. The presentations will be made by international and U.S. industry leaders and entrepreneurs describing their offshore service activities and leading academic researchers studying offshoring.

The conference will (1) Compare outsourcing locally and globally, examining differences that arise from differences in skills, institutions, regulations, technologies, process and coordination requirements, (2) Take a global view of the value-chain, examining the quantity and quality of skills in service delivery, migration and process management, verticals, and the impact on ownership structures and complexity of work done. (3) Examine the roles of cross-border participants: venture capital, product developers, etc..

Speakers will include representatives of established outsourcers from India, Mexico, Pakistan, the Philippines and the U.S., established multinationals that offshore work to their own subsidiaries, startups and niche firms that do cross-border work, providers of the supporting infrastructure banks, venture capitalists, law firms, etc. Academicians from Oxford University, Stanford University, the University of California and other academic bodies will also participate.

Case studies and academic papers on outsourcing/offshoring to be presented at the conference:

  1. Trade Finance (DSL)
  2. UK HR industry (Oxford University)
  3. Software and chip design (Tensilica)
  4. Software application services (TCS)
  5. Back-office finance & accounts (Agilent)
  6. Call Center/Multiple Services Firms (TRG, PLDT, I-OneSource, IT United)
  7. HR development for US firms undertaking Indian operations (Globalex)
  8. Legal aspects of establishing Indian operations (Thakker and Thakker)
  9. Network management (GTL)
  10. Enterprise software as a service (Ketera)
  11. HR and value-addition (Stanford University/UC Davis)
  12. Applying process and technology for value-addition (Gecis)
  13. Managing inhouse work (IBM Daksh)
  14. Transitioning outsourcing from the US to India (e4e)

Bechtel Conference Center

No longer in residence.

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Rafiq Dossani was a senior research scholar at Stanford University's Shorenstein Asia-Pacific Research Center (Shorenstein APARC) and erstwhile director of the Stanford Center for South Asia. His research interests include South Asian security, government, higher education, technology, and business.  

Dossani’s most recent book is Knowledge Perspectives of New Product Development, co-edited with D. Assimakopoulos and E. Carayannis, published in 2011 by Springer. His earlier books include Does South Asia Exist?, published in 2010 by Shorenstein APARC; India Arriving, published in 2007 by AMACOM Books/American Management Association (reprinted in India in 2008 by McGraw-Hill, and in China in 2009 by Oriental Publishing House); Prospects for Peace in South Asia, co-edited with Henry Rowen, published in 2005 by Stanford University Press; and Telecommunications Reform in India, published in 2002 by Greenwood Press. One book is under preparation: Higher Education in the BRIC Countries, co-authored with Martin Carnoy and others, to be published in 2012.

Dossani currently chairs FOCUS USA, a non-profit organization that supports emergency relief in the developing world. Between 2004 and 2010, he was a trustee of Hidden Villa, a non-profit educational organization in the Bay Area. He also serves on the board of the Industry Studies Association, and is chair of the Industry Studies Association Annual Conference for 2010–12.

Earlier, Dossani worked for the Robert Fleming Investment Banking group, first as CEO of its India operations and later as head of its San Francisco operations. He also previously served as the chairman and CEO of a stockbroking firm on the OTCEI stock exchange in India, as the deputy editor of Business India Weekly, and as a professor of finance at Pennsylvania State University.

Dossani holds a BA in economics from St. Stephen's College, New Delhi, India; an MBA from the Indian Institute of Management, Calcutta, India; and a PhD in finance from Northwestern University.

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Senior fellow and contributing author, %people1%, comments in <i>Nature</i> on the release of the Millennium Ecosystem Assessment--a four year endeavour that explores the link between human well-being, the status of ecosystems and their sustainable use.

How can ecosystems provide sustainable services to benefit society?

Four years in the making, the Millennium Ecosystem Assessment (see Nature 417, 112-113; 2002) is released this week (starting 30 March). This gigantic endeavour explores the link between human well-being, the status of ecosystems and their sustainable use.

What has this assessment taught us about developing our planet, and will it, or should it, be continued? To answer the first part of this question, the assessment is an invaluable record of where we stand now, and why. But for it to be useful, the answer to the second part of the question must be 'yes'. We need to take a consistent approach to measuring the status and trends of the world's ecosystems. To take one example, the Convention on Biological Diversity has set the target of reducing the rate of global loss of biodiversity by 2010. But the data to evaluate whether this goal is being met are not readily available, as biological diversity is more than just an enumeration of species present or absent - it includes parameters such as the populations of species and the ecosystems in which they reside. In addition, biodiversity is just one of the many aspects of change in ecosystems and their related functions assessed in the Millennium Ecosystem Assessment. Only from a periodic audit of the state of our natural resource base can we determine if we are indeed approaching sustainability.

At present, there are no formal plans to repeat the Millennium Assessment. There should be, and we hope that the informal discussions among the current sponsors will bear fruit from the seeds sown by the many smaller, ongoing sub-global assessments that were stimulated by the assessment.

Achievements and goals

The Millennium Ecosystem Assessment took a new pathway of evaluating the status of the Earth's human support systems. Rather than the standard environmental audit, the new assessment places audits of numbers of organisms and so on into the context of how ecosystem changes have affected human well-being, and how they may do so in the foreseeable future. It had to find a link between the status of biotic systems and the status of individuals in various societies in the world to estimate the capacity of ecosystems to provide services that benefit society. Many of these links are obvious, but others have not been appreciated, nor have all these linkages been quantified. In essence, we had to make a large leap from the current styles of evaluations of status and trends in ecosystems to an entirely different approach - an ecosystems services database related to how ecosystems and societies operate, and how they interrelate.

Current status of ecosystems

Human societies have made marked progress in increasing provisioning services, such as crops and livestock, to meet the demand of a growing population (see Box 1). Food is more abundant and cheaper than in the past. Despite these dramatic accomplishments, there are still more than 850 million undernourished people, and some advances in production are at the cost of other services essential for human well-being, such as ocean fisheries, wood for fuel, genetic resources and - perhaps the most important - fresh water. It is the poor in many nations that are most directly dependent on services from ecosystems, and the degradation of these systems can exacerbate their poverty. Millions of people face the reality of the declining availability of cheap protein from local fisheries, inadequate water for sanitation or live on degraded landscapes.

There are a number of issues that cloud the goal of sustaining a high level of provisioning services. The use of fertilizer in agriculture has greatly increased to meet food demand, but at the cost of polluting off-site unmanaged ecosystems, such as groundwater, rivers and coastal fisheries. In many regions, water for irrigation is being pumped from groundwater and in some cases from fossil sources. Rivers are dammed and diverted for irrigation, altering ecosystems that depend on this water - causing the loss of many of the services they provided.

Further, we are diminishing crucial 'regulating' services responsible for climate, erosion, air- and water-quality control, as well as for the regulation of pests and natural hazards. We are losing these services due to massive land-surface conversion, atmosphere alteration, eutrophication, overharvesting and the impact of invasive species. The Millennium Assessment concluded that 60% of the ecosystem services evaluated were either being degraded or being used unsustainably.

As an example, cultivated systems (areas where at least 30% of the landscape is in croplands, confined livestock production or freshwater aquaculture) now cover a quarter of the Earth's surface, partly by conversion of temperate grasslands, Mediterranean-climate forests and many tropical ecosystem types. Forests have essentially disappeared from 25 countries, with 9.4 million hectares being lost annually from the Earth's surface. Historically important fisheries have collapsed or are overfished, one third of the mangrove forests for which there are historical data have been lost, as have 20% of the coral reefs, with a further 20% degraded. Nearly 40% of the rivers of the world have been fragmented. Species and populations of species are being lost at unprecedented rates, while at the same time the global biota is becoming homogenized owing to the introductions of alien species to new regions. These examples represent major losses of pieces of the biosphere machinery, which have a serious impact on the delivery of ecosystem-regulating services - impacts such as greater prevalence of infectious diseases in disrupted ecosystems, adverse effects on local climates by ecosystem modification, and the loss of flood protection (as in the recent tsunami in Indonesia).

What we can do

The drivers of change in ecosystems and their services will continue in direction and intensity. So how can these trends be reversed to achieve sustainability and to relieve the negative impacts of the loss of services to society, particularly to the disadvantaged? New pathways and approaches can and must be taken. But these are major initiatives, which will mean profound changes in the way global society operates. As learned in the Millennium Assessment, favourable responses need to take place at all levels, from the local to the global. Global mechanisms do not necessarily solve local problems, yet are an important part of the overall solution. At the same time, local players and solutions can feed into regional and global approaches. The players at these different levels address different decision-makers, who can collectively put in place the major changes that are needed for ecosystem sustainability.

The Millennium Assessment examines the merits of options for mechanisms and policies, to accomplish the goal of maintaining and enhancing the delivery of ecosystem services to society. Some of these require major reorganization in the way we do business. At present, our organizational structures address separately the issues of a single resource, such as agriculture, fisheries or the environment. There is little interaction within and between each issue, and much less again with trade and the treasury bodies. The lesson of the Millennium Assessment is that all these resource issues are interrelated: action on one issue has consequences for another. It is crucial to address how to minimize the trade-offs (biodiversity or clean water for agricultural yield), either on-site or by managing landscapes. One important example of how this process can work is the EU system of directives for nitrate accounting on landscapes.

Some institutional innovations are moving towards more integrated views of issues and responses to them. For example, Britain has a government department for Environment, Food and Rural Affairs. These are all closely interrelated domains, but in other countries are often handled by competing agencies. Elsewhere, interagency groups are evolving to address central issues such as climate change, but their effectiveness is hampered by competitiveness and politics. We need new kinds of institutions in better positions to achieve sustainability of ecosystems that provide for human well-being.

We must also try to improve the economics. Although provisioning services are enmeshed in the local (and increasingly global) marketplace, regulating services are not. We must accelerate our ability to value ecosystem-regulating services at the national level, as well as the ecosystem services that provide crucial cultural amenities, and ensure that these values are considered in decision-making.

Some progress is being made. Costa Rica has established a system of conservation payments, under which contracts are brokered between international and domestic 'buyers' and local 'sellers' of sequestered carbon, biodiversity, watershed services and scenic beauty. On a global scale, the Ecosystem Marketplace consortium is beginning to track transactions, pricing trends and buyers' requests on the carbon, water and biodiversity markets. It is predicted that the global carbon market will reach US$44 billion by 2010.

We need to eliminate the subsidies that promote the excessive use of ecosystem services and evaluate more carefully the trade incentives that damage ecosystem services. We must work harder to educate the public on the strong links between sustainable ecosystems and the lives of humans. The role of new technologies in more efficient use of natural resources is crucial and needs more incentives.

There is plenty that can and needs to be done to deal with the crisis that has already enveloped us. The path is open for scientists to quantify, to a much greater extent, the way in which the operation of ecosystems is directly linked to human well-being, and hence model the course of human activities on future outcomes of the delivery of these services. The Millennium Assessment is certainly providing a strong stimulus for such studies.

Millennium Assessment

Acknowledgements. We thank the scientists, reviewers and members of the review board who provided input to the Millennium Ecosystem Assessment, and the sponsors of this work.

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The stellar performance of BP's emission control program has led many observers, inside and outside BP, to ascribe success to the firm's emissions trading system. As countries and other firms have considered the adoption of trading systems they often point to BP's pioneering experience as a guiding star. Yet no study has ever explained the operation and impact of BP's trading system. Which factors truly drove the leaders of BP's business units to cut emissions? What lessons should be learned from BP's experience to guide other trading systems? We focus on these questions, drawing heavily on interviews with key corporate policymakers at BP as well as managers in key business units (BUs) that were actually involved in trading.

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Joshua C. House
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Many critiques have been made of the U.S. Intelligence Community's performance in thwarting terrorist attacks (i.e. 9/11) and understanding the proliferation of WMD (i.e. Iraq). Given the reports from the 9/11 and WMD commissions as well as last year's legislation establishing the position of National Intelligence Director, what in fact are the deficiencies of the Intelligence Community and what changes have the best chance of correcting them and preventing future intelligence failures?

This seminar will feature a panel discussion by three experts on intelligence issues. They will focus their comments on the issues, challenges, and potential solutions for improving the U.S. Intelligence Community capabilities to provide timely warning and accurate assessments of future threats. They will then invite comments, questions, and discussion.

Sidney Drell is a professor of theoretical physics (Emeritus) at the Stanford Linear Accelerator Center and a senior fellow at the Hoover Institution. As a physicist and arms control specialist, he has been a leader in providing essential technical advice to the U.S. Government on national security issues. He is an active member of JASON, a group of distinguished scientists, and has served on a number of boards, including the President's Foreign Intelligence Advisory Board, the President's Science Advisory Committee, and the Non-Proliferation Advisory Panel.

Keith Hansen is a consulting professor of international relations teaching courses on U.S. intelligence and arms control/proliferation. His 35-year government career included seven years on the National Intelligence Council, where he managed numerous national intelligence estimates and other interagency studies on strategic and nuclear issues, and where he served as the National Intelligence Officer for Strategic Programs and Nuclear Proliferation.

Henry Rowen is Director Emeritus of the Asia/Pacific Research Center, professor of public policy and management (emeritus) at Stanford's Graduate School of Business, and senior fellow at the Hoover Institution. He was Assistant Secretary of Defense for International Security Affairs in the Department of Defense (1989-1991), Chairman of the DCI's National Intelligence Council (1981-1983), President of RAND Corporation (1968-1972), and Assistant Director of the U.S. Bureau of the Budget (1965-1966). Most recently, he was a Member of the President's Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction.

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Henry S. Rowen was a senior fellow at the Hoover Institution, a professor of public policy and management emeritus at Stanford University's Graduate School of Business, and a senior fellow emeritus of the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC). Rowen was an expert on international security, economic development, and high tech industries in the United States and Asia. His most current research focused on the rise of Asia in high technologies.

In 2004 and 2005, Rowen served on the Presidential Commission on the Intelligence of the United States Regarding Weapons of Mass Destruction. From 2001 to 2004, he served on the Secretary of Defense Policy Advisory Board. Rowen was assistant secretary of defense for international security affairs in the U.S. Department of Defense from 1989 to 1991. He was also chairman of the National Intelligence Council from 1981 to 1983. Rowen served as president of the RAND Corporation from 1967 to 1972, and was assistant director of the U.S. Bureau of the Budget from 1965 to 1966.

Rowen most recently co-edited Greater China's Quest for Innovation (Shorenstein APARC, 2008). He also co-edited Making IT: The Rise of Asia in High Tech (Stanford University Press, 2006) and The Silicon Valley Edge: A Habitat for Innovation and Entrepreneurship (2000). Rowen's other books include Prospects for Peace in South Asia (edited with Rafiq Dossani) and Behind East Asian Growth: The Political and Social Foundations of Prosperity (1998). Among his articles are "The Short March: China's Road to Democracy," in National Interest (1996); "Inchon in the Desert: My Rejected Plan," in National Interest (1995); and "The Tide underneath the 'Third Wave,'" in Journal of Democracy (1995).

Born in Boston in 1925, Rowen earned a bachelors degree in industrial management from the Massachusetts Institute of Technology in 1949 and a masters in economics from Oxford University in 1955.

Faculty Co-director Emeritus, SPRIE
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Sidney D. Drell Professor of theoretical physics (Emeritus) Speaker Stanford University
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In 2004, SPRIE launched the three-year Greater China Networks (GCN) research program. Its goal is two-fold. First, the GCN seeks to advance understanding of the systems of innovation and entrepreneurship that drive Greater China's ascendance in high technology. Second, it will study the nature and impacts of the region's integration into the global knowledge economy. The research agenda includes a focus on activities or institutions that underpin systems of innovation and entrepreneurship, especially for the new generation of ascending high tech regions in Greater China. These include university-industry linkages, globalization of R&D, venture capital, new firm formation and development, and flows of technology and business leaders.

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Has the Bush administration used the War on Terror to consolidate power in the executive branch? Is the United States in danger of undermining civil liberties and laying the foundation for an American police state? Arguing against conventional wisdom the authors answer these questions with an emphatic No. Drawing on evidence from the USA Patriot Act, the creation of the Department of Homeland Security, the Transportation Security Administration, intelligence reform, and the detention of enemy combatants, the authors argue that what is most striking about US homeland security policy in the wake of 9-11 is just how weak the response of the American state has been. This outcome is contrary to both conventional wisdom and theoretical expectation. The authors argue that this puzzle is best explained by focusing on the institutional structure of US domestic politics.

Jay Stowsky is an adjunct professor at the University of California, Berkeley's School of Information Management and Systems (SIMS) and is the executive drector of UC Berkeley's Services Science Program. Previously, he directed UC Berkeley's program on Information Technology and Homeland Security at the Goldman School of Public Policy and served in the Clinton administration as senior economist for science and technology policy on the staff of the White House Council of Economic Advisers. Stowsky has also served as associate dean at UC Berkeley's Haas School of Business and as director of research policy for the University of California system. He has authored several studies of U.S. technology policy, including "Secrets to Share or Shield: New Dilemmas for Military R&D in the Digital Age," in Research Policy (Vol. 33, No. 2, March 2004) and "The Dual-Use Dilemma," in Issues in Science and Technology (Winter 1996). He is co-author, with Wayne Sandholtz, et al., of The Highest Stakes: The Economic Foundations of the Next Security System (Cambridge Oxford University Press, 1992).

Matthew Kroenig is a PhD candidate in the Department of Political Science at UC Berkeley and a Public Policy and Nuclear Threats Fellow at the Institute of Global Conflict and Cooperation. Kroenig's dissertation research explains the conditions under which states provide sensitive nuclear assistance to nonnuclear weapons states. Previously, he was a research associate with the Information Technology and Homeland Security Project and has also served in government as an intelligence analyst.

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Matt Kroenig PhD Candidate Speaker Department of Political Science, UC Berkeley
Jay Stowsky Adjunct Professor Speaker School of Information Management and Systems, UC Berkeley
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Shapiro presents research he conducted with David A. Siegel, a student in Stanford's Graduate School of Business:

A review of international terrorist activity reveals a recurring pattern of financially strapped operatives working for terrorist organizations that seem to have plenty of money. This observation is hard to square with traditional accounts of terrorist financial and logistical systems, accounts that stress the efficiency with which terrorist financial networks distribute funds while operating through a variety of covert channels. In order to explain the observed inefficiencies, we present a hierarchical model of terror organizations in which leaders must delegate financial and logistical tasks to middlemen for security reasons; however, these middlemen do not always share their leaders' interests. In particular, the temptation always exists to skim funds from any financial transaction. To counteract this problem, leaders can threaten to punish the middlemen. Because logisticians in international terrorist organizations are often geographically separated from leaders, and because they can defect to the government if threatened, violence is rarely the effective threat it is for localized groups such as the IRA. Therefore leaders must rely on more prosaic strategies to solve this agency problem; we focus on leaders' ability to remove middlemen from the network, denying them the rewards of future participation. We find that when the middlemen are sufficiently greedy, and when the organization suffers from a sufficiently strong budget constraint, that leaders will choose not to fund attacks in equilibrium because the costs of skimming are too great. Further, we show there can be important non-linearities in terrorists' response to government counter-terrorism. Specifically, we find that given constrained funding for terrorists, government efforts will yield few results until they reach a certain threshold, at which point cooperation between leaders and middlemen in terrorist groups breaks down leading to a dramatic drop in the probability of terrorist success.

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Jacob N. Shapiro
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On March 25, 2005, Stanford University Press will publish Prospects for Peace in South Asia, the inaugural book in a new series of "Studies of the Asia-Pacific Research Center." Designed to showcase APARC's cutting-edge research on contemporary Asia, the series will feature the varied work of the Center's faculty and the unique interdisciplinary perspective that informs it. According to Andrew Walder, director of APARC, "We are delighted to begin this series with Stanford University Press, which has a large and distinguished list of books on modern East Asia. It is a perfect way to showcase the best of the scholarly work to come out of APARC." Two more books have recently been added to the series pipeline.

Prospects for Peace in South Asia addresses the largely hostile, often violent relations between India and Pakistan that date from their independence in 1947. The most persistent conflict between the two neighboring countries over Kashmir has defied numerous international attempts at resolution.

The struggle over Kashmir is rooted in national identity, religion, and human rights. It has also influenced the politicization of Pakistan's army, religious radicalism, and nuclearization in both countries. Dossani and Rowen's incisive volume analyzes these forces, their impact on relations between the two countries, and alternative roles the United States might play in resolving the dispute. While acknowledging the risks, the book is optimistic about peace in South Asia. The key argument is that many of the domestic concerns -- such as territorial integrity and civilian-military rapprochement -- that had fueled the conflict have now abated.

"Volatile relations between India and Pakistan reflect issues deeper than territorial ambitions over Kashmir and predate their nuclear capability. That is a key theme of the book. The book is particularly timely: as India turns increasingly vibrant and globally important and Pakistan begins to clear the shadows of its past, policymakers need to understand the issues that will drive relations into the long-term," said Rafiq Dossani, co-editor, senior research scholar at APARC, and director of its South Asia Initiative. The volume's co-editor, Henry S. Rowen, is director emeritus of APARC, senior fellow at the Hoover Institution and emeritus professor of Public Policy and Management at Stanford's Graduate School of Business.

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