Governance

FSI's research on the origins, character and consequences of government institutions spans continents and academic disciplines. The institute’s senior fellows and their colleagues across Stanford examine the principles of public administration and implementation. Their work focuses on how maternal health care is delivered in rural China, how public action can create wealth and eliminate poverty, and why U.S. immigration reform keeps stalling. 

FSI’s work includes comparative studies of how institutions help resolve policy and societal issues. Scholars aim to clearly define and make sense of the rule of law, examining how it is invoked and applied around the world. 

FSI researchers also investigate government services – trying to understand and measure how they work, whom they serve and how good they are. They assess energy services aimed at helping the poorest people around the world and explore public opinion on torture policies. The Children in Crisis project addresses how child health interventions interact with political reform. Specific research on governance, organizations and security capitalizes on FSI's longstanding interests and looks at how governance and organizational issues affect a nation’s ability to address security and international cooperation.

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A multitude of corporate governance reforms were enacted in Japan from 1997-2005. As a result of one of those reforms, beginning in 2003 Japanese companies had the option of choosing a committee system of corporate governance, one partially modeled on the American system, rather than the auditor system.

On May 14, SPRIE Researcher Robert Eberhart spoke at a SPRIE seminar about his current research assessing the effect of the Japanese reforms and the question of whether the corporate system in Japan will ultimately be converging with the Western model.

We compared two groups of committee system and auditor system companies and found that the firms using committee system governance, the so-called American model, were significantly valued higher as measured by Tobin's q--thirty- and forty-percent higher.

In researching the performance of Japanese companies under the committee system, Eberhart's current study has found significantly (30%-40%) higher Tobin's q scores for those companies following the committee system over those following the auditor system. This observation seems independent of other financial variables differentiating these companies. The research focused on 63 companies in the pharmacueuticals, electronics, and machine industries.

Tobin's q is the ratio of a firm's market cap to the replacement value of its assets. Since the change in Tobin's q was immediate, based on monthly data, this suggests a change in market evaluation, Eberhart noted, since the asset value would not have changed so quickly.

One possibility, Eberhart ventured, is that by opening themselves up to the committee system, management is indicating a confidence in the veracity of the firm's fiscal monitoring system, and the market is responding to that confidence.

Eberhart concluded by noting that these results are preliminary and further research is necessary to precisely determine the nature of these performance differences.

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Business Informatics

In today’s businesses information technology plays a central role. It is not only tightly knit into most enterprises’ core business processes but can also be a major source of innovation. For a considerable time the research in computer science has been concerned both with developing solutions that enable or facilitate particular business activities as well as with the provision of an infrastructure that is capable of providing the necessary data and computing capacity to these applications.

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In the third of three Payne Distinguished lectures under the heading of "Can the Poor Afford Democracy? A Presidential Perspective" former president of Peru Alejandro Toledo tackled "Economic Growth, Poverty, Populism, and Democracy."  Toledo told a rapt audience that it was time to move from theory and analysis to action, and said that he personally planned to devote the rest of his life to ending poverty and social exclusion in Latin America.  Twelve former presidents from Latin America have joined Toledo to develop a social agenda for democracy for the next 20 years and construct a matrix of key indicators to measure progress toward concrete goals, such as access to education, healthcare, adequate food, clean water, and technology. In addition to economic growth, investment, and trade, the group will monitor employment, salaries, income distribution, and povery reduction. Toledo expects to launch the social agenda for democracy, and a secretariat to monitor progress, in September when the presidents' group meets in Sao Paulo, Brazil under the leadership of Henrique Cardoso.

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A panel of Carnegie Russia experts presented analysis of the current state of Russia's political and economic development and the likelihood of continuity or change in Dmitry Medvedev's first term as president of Russia. The panel included scholars-in-residence at the Carnegie Moscow Center Nikolay Petrov and Maria Lipman and Carnegie senior associate Michael A. McFaul. Thomas Carothers, vice president for studies, served as moderator.

Petrov emphasized structural conditions delimiting the options available to the Russian leadership over the ability of any particular personality to radically change course. He noted that Medvedev, as Vladimir Putin's protégé, was unlikely to introduce major modifications to Putin's established trajectory and that he could not do so even if such was his desire.

He described his conception of the Kremlin-designed political system in Russia today, making reference to what he called the "mechanical configuration of power": the creation of elements that cannot operate indepedently and a highly hierarchical administration that is inherently inefficient and divorced from the realities of society.

Although poorly governed autocracies can last for a long time, if there is a crisis and Russia still lacks the democratic instruments to deal with it there could be a serious authoritarian retrenchment.
-Michael McFaul

At the same time, he argued that change is inevitable -- not because of Medvedev's intentions, but because of evolving facts on the ground, such as the demographic situation and the need to transition from recovery-based economic growth to modernization and expansion. Petrov said that one of the major features of the Russian regime -- controlled elections -- is becoming a source of major weakness as Russia faces a number of serious political, social, and economic challenges. Although these elections nominally legitimize the authorities, they do not provide any feedback from the population nor do they offer any opportunity for genuine political competition of the kind that could introduce diversity and accountability. He compared the Russian leadership to a dinosaur, with a small head far removed from the body politic.

Lipman focused on the evolution of the media from the relative pluralism of Boris Yeltsin's presidency to the tight control of Putin's system. She contrasted the interview Putin had as he was coming into the presidency in 2000 with the interview that his successor has recently had. While the journalists interviewing Putin were inquisitive and at times confrontational, Medvedev enjoyed a far more passive and respectful tone from the journalists who interviewed him. This, she said, was a sign of the success of Putin's project for the media.

She noted that the state and Gazprom were the two largest players in the national media market and that loyalty to the state is a requirement for sucess in any business sector, including media. The state's control of broadcast media is particularly important, as television is the overwhelmingly primary source of information for the Russian public. Meanwhile, on a regional level, journalists are routinely punished for attempting to uncover local malfeasance or corruption.

Although the Russian leadership has consolidated a majority of the media under its control, Lipman said, media with independent editorial content still exists. She speculated that there were a number of functions that having a tiny minority of independent media could serve: existing for the sake of external consumption, a valve to let off some steam, and potentially an in-house bulletin board for the use of elites to signal dissatisfaction or to inform the leadership of conflicts.

McFaul began his remarks by noting he would not use the term "democracy" to refer to the political system in place in Russia today. He said that political science as a discipline is struggling to properly code and understand systems such as Russia's and other countries whose regimes are "between" dictatorship and democracy. He illustrated this lack of clarity by referring to the lack of correspondence between various freedom coding scores when it comes to regimes that do not fall into either extreme of the political freedom spectrum.

With regard to Russia, McFaul noted the crucial significance of the fact that there was an election and that a new leader was appointed. In that way, he said, Russia is not like Uzbekistan. He elaborated on what he sees as three possible reasons that the Russian leadership decided to construct the system that exists today: (1) Putin has decided that this system is necessary for the modernization project he wishes to undertake; (2) in order to allow for theft by the elites, for which McFaul noted a controlled national media was crucial; and (3) to manage the transition. Now that Putin's plan for the transition has been fulfilled, it is an open question whether the regime can become a system for governance.

Having delineated the "why," McFaul put forward what he sees as the chief characteristics of the Russian regime: a lack of any defining ideology; little connection to citizenry -- the fact that this is not an autocracy of mobilization; no charismatic leader; the fact that the regime is not a military junta, and that a strategy of massive repression is not a viable alternative; the existence of foreign enemies, which is important for autocracies to survive; and the dependence of the regime's legitimacy upon performance, particularly in the economic sphere. McFaul believes Putin knows that this system is not sustainable over the long term, but that paradoxically he nonetheless emphasizes continuity. He expressed cautious hope that Medvedev's liberal-sounding speech in Krasnoyarsk -- which contained criticism of the current state of affairs in Russia and lacked a real precedent in recent Russian political history -- could signal a change in policy in the Kremlin.

He noted that he would not predict the future course of Russia's political development and reiterated his point about the failings of political science: although scholars can understand the structural conditions that make potential social and political crises in such regimes possible, the political science community does not do well at predicting when they will occur. McFaul sounded a note of warning on this point, saying that although poorly governed autocracies can last for a long time, if there is a crisis and Russia still lacks the democratic instruments to deal with it there could be a serious authoritarian retrenchment.

In response to questions, Petrov and Lipman made clear that they did not believe Medvedev's liberal rhetoric should be treated seriously. McFaul noted that such changes, if they were to take place, would likely occur at the margins and said that the situation is more optimistic than if hawk Sergei Ivanov had been chosen as president.

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Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055

(650) 726-0771 (650) 723-6530
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Northeast Asian Fellow, 2008-09
Jones,_Alisa.jpg MA, PhD

Alisa Jones received her MA from the School of Oriental and African Studies, University of London, and her PhD from the University of Leeds. She specialized in the history of modern and contemporary China with secondary interests in politics and education, writing her doctoral dissertation on history education policy and praxis in the post-Mao reform-and-opening period.

Recently, Jones collaborated on book projects that address the roles played by history textbooks, historiography, and popular culture in shaping public memory and national identities across East Asia and the ways in which the past has been contested in various domestic and international arenas. She is currently working on several related projects, examining the goals and content of history and citizenship education as well as the ways in which other public and private mechanisms (such as the legal system, patriotic campaigns, the media, the internet) have been used and abused to define the parameters of acceptable debate about the past and the claims on the citizens of the present and future it represents.

While at Shorenstein APARC, she will be researching and teaching on issues of historical memory, identity, conflict and reconciliation in the Northeast Asian region.

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Ten 2008 POSCO NGO Fellows were selected by the Fellowship admission committee during the second POSCO NGO Fellowship Conference held on May 1 and 2 at the University of British Columbia, Vancouver.

George Washington University:

Ms. Gyung Lan Jung, Center for Peaceful Future of Korea

Mr. Hyun-Mo Choi, Korea Migrant Workers' Human Rights

Indiana University:

Mr. Seoung-Hwan Jeon, National Council of YMCAs of Korea

Mr. Jae-Seok Kim, Gwangju Citizen's Coalition for Economic Justice

Columbia University:

Mr. Tae Ho Lee, People's Solidarity for Participatory Democracy

Mr. Boyoun Joung, Korea Youth Corps

University of British Columbia:

Ms. Jeong Sook Park, Korean Women Link

Ms. Hee-Seon Jeong, Seocho Volunteer Center

Stanford University:

Ms. Hye-Jeong Kim, Korea Federation for Environmental Movement

Mr. Hyun Gon Jung, Korean Council for Reconciliation and Cooperation

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