Stanford University

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.

Mobilizing the State as Public Risk Mitigator

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Dr. Hilton Root, an academic and policy specialist in international political economy and development joined the Faculty of Pitzer, a member of Claremont Colleges, as Freeman Fellow from June 2003 to June 2005. Before joining, he served the current administration as US Executive Director Designate of the Asian Development Bank, and as senior advisor on development finance to the Department of the Treasury. Dr. Root was Director and Senior Fellow of Global Studies at the Milken Institute and was a Senior Research Fellow and Director of the Initiative on Economic Growth and Democracy at the Hoover Institution. His areas of expertise are international economics, economic development and policy reform, and Asian affairs.

As a policy expert, Dr. Root advises the Asian Development Bank, the IMF, the World Bank, the UNDP, the OECD, the US State Department, the US Treasury Department and USAID. He has completed projects in 23 countries. The analytical framework he contributed to the World Bank's Asian Miracle study, 1993, was part of the effort to put institutions on the development agenda. While at the ADB as chief advisor on governance, he was the principal author of the ADB's Board-approved governance policy. He presided over a committee on governance indicators at the OECD and initiated the restructuring of the Sri Lanka civil service as an advisor to President Chandrika Bandaranaike Kumaratunga. He was one of the principal contributors to the design of the Millenium Challenge Account of the Bush administration.

As an academic, he has taught at the University of Michigan, California Institute of Technology, the University of Pennsylvania and Stanford University. Dr. Root has written and lectured extensively, publishing six books and more than 100 articles. He is a frequent contributor to the Wall Street Journal Asia, the International Herald Tribune, Los Angeles Times and the Washington Post. He has published and presented in both the English and the French languages and has been translated into many languages including Chinese, Korean and Japanese.

He has been awarded honors for The Key to the East Asian Miracle: Making Shared Growth Credible (with J. Edgardo Campos), which won the 1997 Charles H. Levine Award for best book of the year by the International Political Science Association. The Social Sciences History Association awarded him the 1995 best book prize of its Economic History Section for The Fountain of Privilege: Political Foundations of Markets in Old Regime France and England. From the American Historical Association he received the Chester Higby Prize, 1986, for the best article among those published during the previous two years. He is on the board of a number of organizations and journals including the Open Society Institute, Center for Public Integrity and Review of Pacific Basin Markets and Policies. Dr. Root received his doctorate from the University of Michigan in 1983.

Encina Basement Conference Room

Hilton Root Professor or Economics Claremont Colleges, Claremont, CA
Seminars

Institutions and Impersonal Exchange: The European Experience

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Avner Greif, noted Stanford Economic historian, will speak on his current research. Avner Greif received his Ph.D. from Northwestern University and his B.A. from Tel Aviv University. His research interests include European economic history, the historical development of economic institutions, their interrelations with political, social and cultural factors and their impact on economic growth. His current research focuses on institutional development and economic growth in pre-modern Europe, as well as coercion and markets.

Greif's recent publications include "A Theory of Endogenous Institutional Change," (with David Laitin) American Political Science Review, 2004; "Cultural Beliefs and the Organization of Society: Historical and Theoretical Reflection on Collectivist and Individualist Societies," The Journal of Political Economy, (October 1994); and "Coordination, Commitment and Enforcement: The Case of the Merchant Gild" (with Paul Milgrom and Barry Weingast), The Journal of Political Economy, (August 1994).

Avner Greif is a faculty associate at CDDRL.

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Encina Ground Floor Conference Room

Avner Greif

Department of Economics
Stanford University
Stanford, CA 94305-6072

(650) 725-8936 (650) 725-5702
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Senior Fellow at the Freeman Spogli Institute, Emeritus
Bowman Family Endowed Professor in the Humanities and Sciences
avner_greif.jpg PhD

Avner Greif is Professor of Economics and Bowman Family Endowed Professor in Humanities and Sciences at Stanford. His research interests include European economic history: the historical development of economic institutions, their interrelations with political, social and cultural factors and their impact on economic growth. Some of his publications are: Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge University Press (March 2006); Impersonal Exchange without Impartial Law: The Community Responsibility System, Chicago Journal of International Law (2004); How Do Self-enforcing Institutions Endogenously Change? Institutional Reinforcement and Quasi-Parameters (with David Laitin), the American Political Science Review (2003); Analytic Narratives, Oxford University Press, 1998. Avner Greif received his Ph. D. in economics from Northwestern University, and his B.A. in economics and history - from Tel Aviv University.

Affiliated faculty at the Center on Democracy, Development, and the Rule of Law
Avner Greif The Bowman Family Endowed Professor in Humanities and Sciences and Professor, by courtesy of History, and Senior Fellow, by courtesy at SIEPR Speaker
Seminars

Adventures in Nation-Building: Afghanistan, U.S. Foreign Policy, and the Post-9/11 World

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CDDRL Fellow, J. Alexander Thier will discuss Afghanistan's experiences with nation building, particularly in the post-Taliban era. J Alexander Thier was legal advisor to Afghanistan's Constitutional and Judicial Reform Commissions in Kabul in 2003-2004, where he assisted in the development of a new constitution and judicial system. In 2002 Alex worked in Kabul as a Constitutional and Legal expert to the British Department for International Development, and as Senior Analyst for the International Crisis Group.

Encina Basement Conference Room

J Alexander Thier Visiting Fellow CDDRL
Seminars

Remembering Y2K: The Impact Today

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Rafiq Dossani
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Y2K was shorthand for the potentially disastrous failure of computer systems at the turn of the millennium. The problem: Many old software systems might read "00" as 1900--not 2000--a glitch that could lead to a cascade of errors and malfunctions. Year two thousand came, and nothing happened--well, not much anyway. A credit card mistake here. A satellite blackout there. But no lives lost. No global economic catastrophe. Monday, January 3 was just another workday. Yet with the benefit of hindsight the economic impact of Y2K on America was far greater than the $100 billion-plus government and business spent on fixing the computer glitch. Chris Farrell reports.

Chris Farrell: Remember the dot-com boom of the 1990s? It seemed as if every entrepreneur with a good idea and a PC could challenge established companies for customers. Brick-and-mortar companies jumped on the e-commerce bandwagon. The demand for digital workers soared. Long-time computer professionals hopped from job to job, pulling down more money with every employer. Newly minted college graduates juggled multiple job offers. But when the Y2K problem emerged in the latter part of the '90s business and government quickly realized there still weren't enough IT workers on hand to find and repair the computer glitch. The quick fix? Hire computer professionals overseas. And that temporary solution permanently changed the global economy.

Paul Saffo: Y2K was huge in getting the ball rolling on offshoring.

Farrell: Paul Saffo is director of the Institute for the Future, a high-tech think tank in Silicon Valley.

Saffo: But once they went overseas, they discovered it's not just a matter of cost. These programmers overseas are often better than the best you can get in the United States.

Farrell: Ireland, the Philippines, and Israel were among the more popular destinations for offshoring Y2K programming fixes. But India became the offshore capital. It had plenty of high-tech companies staffed with well-educated English speaking digital workers. Thanks to India's steep import barriers in the 1980s, no one could afford new computer systems. So Indian tech workers were the world's leading experts in the older software languages that needed upgrading. Suhas Patil is chairman emeritus of semiconductor maker Cirrus Logic.

Suhas Patil: And they were listening to their customers and what their needs were, and as the recognition came that systems had to be upgraded to not have the problem based on the Y2K issues, that's how they got their break.

Farrell: And made the most of the opportunity. AnnaLee Saxenian is Dean of the School of Information Management and Systems at the University of California, Berkeley.

AnnaLee Saxenian: I think the importance of Y2K was overwhelmingly about establishing Indian companies' reputation among US customers and helping begin a set of customer supplier relationships that have simply taken off in the last four years.

Farrell: Of course, Y2K contracts ended in 2000. Yet many Indian companies took advantage of their now sterling programming reputations to negotiate for more sophisticated work. Research. Software development. Accounting services. Long-distance medical advice. Rafiq Dossani is a senior research scholar at Stanford University.

Rafiq Dossani: India is now growing at 70-80 per cent a year in offshored services ... services which are maintaining an accounting system, maintaining an HR system, doing claims processing, that's growing easily at 70 per cent, maybe even higher.

Farrell: Offshore also came onshore during Y2K. The town of Mountain View lies at the heart of California's Silicon Valley. Housed in one of the many nondescript low-rise office buildings that crowd the region's business avenues is the Indus Entrepreneur, or TIE. It is a networking base for the Indian high-tech Diaspora.

Shankar Muniyappa: Y2K was a big opening as early as 98.

Farrell: Shankar Muniyappa is director of information systems for TIE. He came to America for Y2K-and stayed.

Muniyappa: Myself and many of us believe still believe this is the place where you need to be if you want to be middle of innovation.

Farrell: Some 30,000 Indian IT professionals now live and work in the Valley. Rafiq Dossani of Stanford University:

Dossani: At least 25 per cent of the start ups have Indian employees at fairly senior levels working for them. And ... there's a whole infrastructure therefore being built around them because it's a substantial number now, so you see shopping malls you see business services and so on catering to this particular immigrant community.

Farrell: That community is adding vitality to the American economy. Still, many American high-tech workers are threatened by the offshoring of white collar jobs. The numbers are murky, but according to Mark Zandi of Economy.com 370,000 non-manufacturing jobs moved overseas over the past fours years-with most of the information technology jobs going to India. Salaries are down too. Still, the big factor behind the loss of 1.5 million jobs lost since Y2K is improved business efficiency or productivity - not offshoring. And Y2K also played an important role in boosting business efficiency.

Economists initially looked at Y2K as a productivity killer.

Imagine a town threatened by a rising river. Every able-bodied person in town is put to work stacking sandbags. It's necessary work to save the town - but it's unproductive work. Nothing gets built. No food gets grown.

With the Y2K bug, programmers, chief information officers, project managers, and other digital workers were getting paid to do unproductive work - stacking sandbags of silicon. No innovative investments. No new productivity enhancing software.

But economists were wrong. Y2K wasn't a flood. Instead, think of it as clearing a path choked with underbrush. Once the trail is open, it is much easier to zip from point A to point B. Y2K gave companies an excuse to clean up their software and hardware underbrush - a critical factor in today's improved business productivity. Paul Saffo:

Saffo: A lot of companies said well, gosh, if we're going to have to spend all this money to fix our software let's also see what else we can do at the same time, so it was an invitation to replace a whole bunch of stuff. ... So it forced people to ask hard questions about how they were using things and in the best instances people really did become more efficient.

Farrell: The result? Companies used the new systems they installed to cut costs and work smarter - and hire fewer workers.

[Voice of Leonard Nimoy: "Do you have hard copies of all your important documents ... such as bank statements."]

That's Leonard Nimoy, Mr. Spock from Star Trek. He's narrating the Y2K Family Survival Guide video - one of thousands of products peddled by prophets of doom. Y2K did bring home how reliant we all are on computers. Many of us still don't back up critical data at home. The same isn't true for business and government. Many learned from Y2K just how vulnerable information systems are to a malicious attack or unforeseen disaster. Case in point: Y2K actually helped some businesses survive 9/11.

[News broadcast of President George W. Bush: "I've directed the full resources of intelligence and law enforcement communities to find those responsible and bring them to justice."]

The attack on the World Trade Center stopped trading on the New York Stock Exchange. Against the odds, that citadel of capitalism opened six days later.

John Koskinen: The reason the markets, securities markets, were able to open the Monday after the Tuesday of 9-11 was they still had the test scripts that had been developed in 1998 and 99.

Farrell: John Koskinen credits preparations for Y2K. He was President Clinton's Y2K czar.

Koskinen: ... they were able to in effect take all of those Y2K scripts and make sure that all the transactions with all of the major players would close. Without that they never would have been able to do it in the time frame with the confidence they had.

Farrell: A record 2.4 billion shares traded on the New York Stock Exchange the day it reopened.

Y2K was a unique economic event. Earlier jolts to the economy, like the 1973 oil price hike and the 2001 attack of 9/11, were shocks. But the Year 2000 arrived right on schedule. The surprise was how little immediate impact the much-feared transition had on the economy. Yet we're still living and working with the economic impact of Y2K five years later.

For Marketplace and American RadioWorks, I'm Chris Farrell.

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America and the New Asia

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Zbigniew Brzezinski has had a distinguished career in government and academia. From 1977 to 1981 he was the National Security Advisor to President Jimmy Carter. In 1981 he was awarded the Presidential Medal of Freedom for his role in the normalization of U.S.-Chinese relations and for his contributions to the human rights and national security policies of the United States. He is currently the Robert E. Osgood Professor of American Foreign Policy at the Paul Nitze School of Advanced International Studies, Johns Hopkins University, Washington, D.C.

The Oksenberg Lecture honors the legacy of Professor Michel Oksenberg (1938-2001) longtime member of Shorenstein APARC, senior fellow at the Stanford Institute for International Studies, and an authority on China. Professor Oksenberg was consistently outspoken about the need for the United States to engage with Asia in a more considered manner. In tribute, the Oksenberg Lecture recognizes distinguished individuals who have helped to advance understanding between the United States and the nations of the Asia-Pacific.

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Bechtel Conference Center

The Honorable Zbigniew Brzezinski Former National Security Adviser and Professor, American Foreign Policy Johns Hopkins University
Conferences
Walter H. Shorenstein Forum for Asia Pacific Studies
Oksenberg Conference

Writing Iraq's Constitution a Chance to Change History

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In an op ed for the San Francisco Chronicle, CDDRL Fellow J Alexander Thier notes the important decisions that will have to be embodied in the new Iraqi constitution if it is to be more than just a worthless piece of paper. Thier argues that the constitution will need to take into account Iraq's unique multi-ethnic and diverse religious character as well as enshrine democratic principles and freedoms for Iraq to move forward.
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Policies Matter: Why the Millennium Challenge Corporation Links Performance to Development Aid

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Sherri G. Kraham joined the Millennium Challenge Corporation (MCC) in March 2004 as its Director of Development Policy, working on a broad range of policy issues related to MCC's innovative approach to development. Ms. Kraham, a lawyer, transferred from the U.S. Department of State where she worked overseeing and implementing various U.S. Foreign Assistance including development, peacekeeping and security, humanitarian assistance, and human rights programs. She spent several years working on programs related to Iraq and prior to joining MCC, Ms. Kraham deployed to Baghdad working with the Coalition Provisional Authority as part of the first civilian team that worked on reconstruction following the war.

About the Millenium Challenge Corporation: President George W. Bush established the Millenium Challenge Account in order to link greater contributions from developed nations to greater responsibility from developing nations. The Millennium Challenge Account (MCA)is designed to concretely link assitance to performance by providing aid to those countries that rule justly, invest in their people, and encourage economic freedom. With strong bipartisan support, Congress authorized the Millennium Challenge Corporation (MCC) to administer the MCA and provided $1 billion in initial funding for FY04. President Bush's request for the MCA in FY 2005 was $2.5 billion of which Congress appropriated $1.5 billion. The President has pledged to increase funding for the MCA to $5 billion in the future.

Encina Basement Conference Room

Sherri G. Kraham Development Policy Director Millenium Challenge Corporation
Seminars

Proliferation Determinism or Pragmatism? How to Dismantle an Atomic Bomb Network

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Alexander H. Montgomery is a joint International Security Program/Managing the Atom Project Research Fellow at the Belfer Center for Science and International Affairs in the Kennedy School of Government at Harvard University and a Political Science PhD candidate at Stanford University. He has a BA in Physics from the University of Chicago, an MA in Energy and Resources from the University of California, Berkeley, and an MA in Sociology from Stanford University. He has worked as a research associate in high energy physics on the BaBar experiment at Lawrence Berkeley National Laboratory and as a graduate research assistant at the Center for International Security Affairs at Los Alamos National Laboratory. His research interests include political organizations, weapons of mass disruption and destruction, social studies of technology, and interstate social relations. His dissertation asks the question, "What US post-Cold War counterproliferation strategies towards potential nuclear states have been successful and why?"

Reuben W. Hills Conference
Room, East 207, Encina Hall

Alex Montgomery
Seminars

FSI International Conference: Challenges in a New Era

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A full day of speeches, discussions, and interaction on critical international issues.

MAIN SPEAKERS

Samuel R. Berger, Chairman of Stonebridge International and former National Security Advisor

Hans Blix, Chairman, Weapons of Mass Destruction Commission and former U.N. weapons inspector in Iraq

Paul Collier, Professor of Economics, Oxford University

Philip Zelikow, Counselor of the Department of State and former Executive Director of the 9/11 Commission

CHECK IN 7:30 AM

BREAKFAST & WELCOME 8 AM - 9 AM

WELCOME

John Hennessy, President, Stanford University

INTRODUCTORY REMARKS

Coit D. Blacker, SIIS Director, and William J. Perry, former Secretary of Defense

MORNING PLENARY SESSIONS 9 AM - 12:30 PM

Hans Blix on the risks of a new nuclear arms race and Paul Collier on governance and democracy.

LUNCH 1 PM

SPEAKER

Philip Zelikow, The United States and the World

AFTERNOON SESSIONS 2:30 PM - 5:45 PM

Breakout sessions with Stanford faculty, policy-makers, international academics, and journalists, on issues such as reform of the United Nations, our energy future, U.S. policy in Korea, the future of U.S./European relations, Russia, international criminal justice and peace, global climate change, and international responses to infectious diseases.

PARTICIPATING STANFORD FACULTY & SCHOLARS INCLUDE

Donald Kennedy, Larry Diamond, Michael Armacost, Gi-Wook Shin, Stephen Stedman, Scott Sagan, Christopher Chyba, Lynn Eden, David Victor, Allen Weiner, Alan Garber, Amir Eshel, Kathryn Stoner-Weiss, Doug Owens, John McMillan, and Dan Okimoto.

RECEPTION 6 PM

DINNER 7 PM

SPEAKER

Samuel R. Berger, U.S. Foreign Policy: The Road Ahead.

Frances C. Arrillaga Alumni Center

Conferences
FSI International Conference

Perry urges U.S. leadership in reducing nuclear terror threat

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While the improving U.S. economy remains the engine of growth for the world economy, an underlying trend involving "huge imbalances and risks" should be cause for serious alarm, Paul Volcker warned Feb. 11 during a speech on campus. Americans have virtually no savings, the former chairman of the Federal Reserve said, and the nation is consuming more than it is producing. Furthermore, Social Security and Medicare are threatened by the retirement of millions of baby boomers and skyrocketing health care costs. More broadly, he continued, the world economy is lopsided.

"Altogether, the circumstances seem as dangerous and intractable as I can remember," Volcker said during a keynote address at the second annual summit of the Stanford Institute for Economic Policy Research. "But no one is willing to understand [this] and do anything about it."

Volcker spoke at the end of a daylong conference that attracted about 450 corporate leaders, entrepreneurs, policymakers and academics. The event included discussions on the stability of the global economy, the U.S. economic outlook and the role of the Internet in helping to level the competitive playing field worldwide. The conference also featured sessions on outsourcing, Medicaid and Medicare, technology policy and the Sarbanes-Oxley Act, which was implemented in 2002 to restore investor confidence in corporate America following a series of bankruptcies and far-reaching accounting scandals.

During a morning session, William J. Perry, a former secretary of defense and a senior fellow at the Stanford Institute for International Studies, gave a chillingly stark assessment of the crisis of terrorism that was reinforced by George Shultz, a former secretary of state.

"I fear that we're headed toward an unprecedented catastrophe where a nuclear bomb is detonated in an American city," Perry said. "The bomb will not come in a missile at the hands of a hostile nation. It will come in a truck or a freighter at the hands of a terror group."

Perry, who holds the Michael and Barbara Berberian Professorship, said the "awesome military capability" of the United States has had unintended consequences in that it has increased the incentive for a hostile power, unable to compete in conventional warfare, to acquire weapons of mass destruction and launch terror attacks against America. U.S. military superiority is not particularly effective against such tactics, he said. "There exist terror groups, of which al Qaeda is the most prominent, that have the mission, the intent to kill Americans," Perry said. "They have the capability to do so; they have the resources to do so." A truly nightmare scenario would involve a terror group using nuclear weapons acquired clandestinely, he said: "After 9/11 that threat seems all too real."

Such a catastrophe is preventable, but the United States is not taking the necessary measures to avert it, Perry warned. Important steps should include a major expansion of the Nunn-Lugar Cooperative Threat Reduction Program with the support the G-8 group of industrialized nations. The program was created in 1991 to reduce the threat posed by the legacy of the Soviet nuclear arsenal and succeeded in dismantling and destroying weapons in Kazakhstan, Ukraine and Belarus. Furthermore, Perry said, a clear strategy of "coercive diplomacy" should be used against North Korea and Iran, followed by a major diplomatic initiative to convince other nuclear powers that the threats posed by terrorists are real and not just directed at Americans. "While America must show real leadership in dealing with this problem, [it] cannot deal with it alone," he said.

Shultz, the Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution, said the United States faces a huge problem in combating Islamic radicals intent on using terror to achieve their goals. "Eventually, what they want is to change the way the world works by creating a unified Islamic theocratic state," he said. "It's a worldwide agenda."

Shultz argued that the United States must help supporters of mainstream Islam understand the fundamental nature of the problem so they will take action against the radicals themselves.

"That's why Iraq is of such overwhelming importance," he said. "Here we have a country in the heart of the Middle East where there is a chance. If Iraq can emerge as a sensibly governed country--that's a gigantic event in the Middle East and in this war on terror. Our enemies recognize that just as well as we do, and that's why we're having so many problems."

Other measures that Shultz said should receive greater support include efforts to set up independent media in countries such as Iraq, as well as a revival and expansion of the U.S. diplomatic service, which he said was allowed to atrophy after the end of the Cold War. "We have developed an awesome military capability," he said. "We need a diplomatic capability that is as every bit as good." Shultz also stressed the need to reduce U.S. dependence on foreign oil. "We are out of our cotton-picking minds not to be doing much, much more to figure out how to use much, much less oil," he said to applause from the audience.

In the afternoon, Thomas Friedman, a columnist at the New York Times, also called for greater efforts to develop alternative energy supplies. This should be the "moon shot of our generation," he said.

Friedman discussed how the convergence of personal computers, cheap telecommunication and workflow software has changed the way the world works. In his upcoming book, The World Is Flat: A Brief History of the 21st Century, Friedman explained that the world has shrunk to the point where individuals, not countries or companies, are increasingly able to think and act globally. "And it's not just a bunch of white Westerners," he said. "It's going to be driven by individuals of every color of the rainbow."

Friedman told the audience that these technological advances quietly unfolded just as the 9/11 terror attacks, the Enron collapse and the dot-com bust grabbed America's attention. "People thought globalization was over but actually it turbo-charged globalization; it drove it overseas," he said. "9/11 completely distracted our administration, and then there was Enron. We have hit a fundamentally transformative moment and no one is talking."

In this new scenario, people anywhere in the world will be able to "innovate and not emigrate" if they have the required skills, Friedman said. This means that engineers in India and China will be able to compete on a level playing field with people in this country. "When the world goes flat, everything changes," he said.

To address this challenge, Friedman said the United States must radically improve science, mathematics and engineering education and encourage young people to enter these fields. "We're not doing that," he said. "In the next two years, five years, it won't matter. In 15 years, which is the time it takes to build an engineer, it will matter. We will not be able to sustain our standard of living."

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