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.

Rural Development in China: New Challenges in a New Landscape

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The most important policy measures are those that improve the quality of rural Chinas human and physical resources and infrastructure that will provide the skills and abilities to rural residents that seek to integrate themselves into the nations industrializing and commercializing cities. Successful development policy, however, must also recognize that modernization is a long process that will depend on maintaining a healthy agriculture and rural economy.

While a rural development plan has many components, we restrict our attention to three broad issues: (a) the nature of Chinas new economic landscape and measures to enhance it; (b) changes that are needed to improve rural government and its partnerships with the rural population; and (c) reforms and investments that can improve Chinas resources: labor, land, capital, water, forests and the environment of the poor.

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Policy Briefs
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Journal Publisher
World Bank Policy Note
Authors
Scott Rozelle

Designing Competitive Wholesale Markets for Latin American Countries

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Executive Summary

 

The purpose of this paper is to present a general framework for electricity market design in Latin American Countries (LACs) that addresses the current problems facing electricity supply industries (ESIs) in this region. The major issue addressed is what market rules, market structures, and legal and regulatory institutions are necessary to establish a competitive wholesale market that provides the maximum possible benefits to consumers consistent with the long-term financial viability of the ESI.

The paper first presents a theoretical foundation for analyzing the electricity market design problem. A generic principal-agent model is presented and its applicability to the electricity market design problem explained. It is then applied to illustrate the incentives for firm behavior under regulation versus market environments. The impact of government versus private ownership on firm behavior in both market and regulated environments is also addressed using this model. This discussion is used to guide our choices for the important lessons for electricity market design in developed countries and LACs.  Using the experiences from ESI reform in developed countries, the paper presents five essential features of a successful wholesale electricity market. The first is the need for a sufficient number of independent suppliers for a competitive market to be possible. Merely declaring the market open to competition will not result in new entry unless no single supplier is able to dominate the market. Second is a forward market for electricity where privately-owned firms are able to sell long-term commitments to supply lectricity. This report argues that the conventional wisdom of establishing a competitive spot market first leading to a competitive forward market is an extremely expensive process in developed countries and is prohibitively expensive in developing countries. Third is the need for the active involvement of as many consumers of electricity as is economically feasible in the operation of the wholesale market.  This involvement should occur both in the long-term and short-term market. In the short-term market, there must be a number of buyers willing to alter their consumption of electricity in response to short-term price signals. Fourth is the importance of a transmission network to facilitate commerce, meaning that the transmission network must have sufficient capacity so that all suppliers face significant competition. This implies a dramatically different approach to determining the quantity and magnitude of transmission network expansions in a market regime.  The final lesson is the need to establish a credible regulatory mechanism as early as possible in the restructuring process. An important lesson from developed countries around the world is that the initial market design will have flaws. This implies the need for ongoing market monitoring to correct these flaws before they develop into disasters.

The paper then takes on the issue of the specific challenges to LAC restructuring. Rather than focus on the details of specific markets, the paper instead identifies a number of problems common to LACs and provides recommended solutions to each of these problems. A major theme of this section is a warning that short-term solutions to market design flaws can have longterm market efficiency costs. The paper identifies seven major challenges to Latin American ESI restructuring. The first is related to the problem of introducing wholesale markets in systems dominated by hydroelectric capacity. This section also deals with the related issue of using cheap hydroelectric power as a way to keep electricity prices low and the risk of electricity shortages high. The second issue is concerned with the difficulties of establishing an active forward market for electricity in LACs. The third relates to the LAC-specific challenges associated with establishing an independent and regulatory body. The fourth addresses the advisability of cost-based versus bid-based dispatch of generation units in LAC wholesale markets. The fifth is how to regulate the default provider retail electricity price in LACs. Sixth concerns the advisability of capacity payments mechanism for ensuring energy adequacy in markets where demand is expected to grow rapidly. The final issue is the role for government versus private ownership in LACs.

The report then discusses specific market design challenges in five LACs. These countries are Brazil, Chile, Colombia, Honduras, and Mexico. A number of these challenges are specific examples of the general challenges discussed earlier in the paper, whereas others are unique to the geography, natural resource base or legal environment in the country.

The report closes with a proposed market design that should serve as a baseline market design for all LACs. Deviations from this basic design could be substantial depending on initial conditions in the industry and the country, but the ideal behind proposing this design is to have a useful starting point for all LAC restructuring processes.

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Stanford University, Department of Economics
Authors
Frank Wolak

The brewing trade battle over GM crops will cost America dear, say Victor and Runge

Authors
David G. Victor
News Type
Commentary
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In an article appearing in The Financial Times, David Victor and C. Ford Runge argue that the pending WTO case over genetically modified foods will do the U.S. more harm than good.

America's farm lobbyists have long been pressing their government to launch a formal trade dispute against the European Union's ban on genetically modified crops. This week they got their way, as the US and more than a dozen allies started proceedings within the World Trade Organisation.

For US farmers - the world's top planters of GM crops - the case is a welcome chance to crack open a lucrative market. But the case may ultimately do their country more harm than good.

Now is a particularly bad time to embark on a dispute that will inflame anti-Americanism in Europe. In the broader, already deteriorating relationship with continental Europe, the US has much more important issues at stake, notably reviving the Doha round on trade and mending diplomatic relationships strained by the Iraq war. Moreover, a close look at the options reveals that each of the plausible outcomes from a dispute would leave the US worse off than before.

First, the US could pay the political costs of launching an inflammatory dispute and then lose. Most press accounts compare this case with one of the first disputes ever handled by the WTO: the EU's ban on beef that had been produced using hormones. The EU lost because its ban had no basis in science and in "comparable" areas of food policy it had adopted much less strict rules - a telltale sign that the ban was a protectionist gambit.

On the surface, the cases appear similar. Although the science on the health risks of GM food is contested, essentially all the credible evidence shows that these foods are safe, which would seem to indict the EU ban. But in critical ways the cases differ. Across the board, the EU is tightening food safety regulations in ways that seem irrational by standard cost/benefit tests but, crucially, are broadly non-discriminatory and consistent - the key tests for whether a trade ban is legitimate. Moreover, the GM ban is a temporary measure - unlike the permanent ban on beef hormones - and trade rules allow more flexibility for countries that implement temporary measures when they can claim the science is uncertain.

Second, the EU could change its rules in the middle of the dispute. For several years, EU bureaucrats have been designing a new set of standards that would "reopen" Europe's markets to GM foods if traders complied with onerous tracing and labelling requirements. This shift would make it harder for the US to win because trade laws are tolerant of labels that allow consumers to make the final choice. While the US might respond by dropping the suit, it would be more likely to redirect the dispute against the tracing and labelling rules. In the past, hotly contested trade disputes have usually taken on a myopic life of their own. Each side digs in and the political damage spreads.

Third is the most likely (and worst) outcome: the US could win. The victory would be Pyrrhic because the issues are fundamentally ones of morality and technology - they must be settled in the courts of consumer opinion. On this score, the beef hormones case is instructive. Even today, hormone-treated beef is no more able to find European consumers than it was before the US won its case; and the years of legal wrangling have led to counter-sanctions that have harmed a wide variety of unrelated products and industries. The antagonism over GM foods appears to be unfolding in much the same way.

A better strategy would have been to stay the course that US policy has followed ever since the controversy over GM crops broke out in the late 1990s. Time is on America's side because the technology is already proving itself in the marketplace and European opponents will find themselves increasingly isolated.

But now that Washington has pulled the trigger, what can be done? The greatest danger is that both sides of the Atlantic slide into a tit-for-tat retaliation. But a trade war will cause untold harm to an alliance already in stress and make it harder to rejuvenate the soggy world economy. Cooler heads must prevail.

In Europe, the critical need is to reform the moratorium on GM foods. Frustration over its inability to get the import ban lifted is what pushed Washington to this desperate act. In the US, serious movement in Europe must be seized as pretence to rescind the WTO case before the antagonisms of hearings, judgment, appeal and retaliation unfold.

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2002-2003 A/PARC Visting Fellows' Final Paper Presentations

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11:30 a.m.: "Digital Content Industry in the Information Technology Era" Eiji Tsujimoto, Impress Corporation (Advisor: Harry Rowen) 11:50 a.m. : "Internet Business Strategy for Newspaper Companies" Hiroshi Nozawa, Asahi Shimbun Company (Advisor: Russ Hancock) 12:10 p.m.: "Venture Capital and Entrepreneurship in the Silicon Valley and the Greater China Region" Joseph Huang, AllCan Investment Company (Advisor: Marguerite Hancock) 12:30 p.m. : "How Can Japan Make Effective Industrial Policies For Promoting New Technologies and Industrial Revitalization?" Kosuke Takahashi, Development Bank of Japan (Advisor: Mike Armacost) 12:50 p.m. : "The Difference of Information Strategy Between the USA and Japan" Tatsushi Tatsumi, Sumitomo Corporation (Advisor: Marguerite Hancock) 1:10 p.m. : "Comparative Study of Technology Policy for Small Business Between the USA and Japan" Hidetaka Nishimura, Ministry of Economy, Trade and Industry (Advisor: Mike Armacost) 1:30 p.m. : "How Can China Learn from U.S. Small Business Policies?" Tingru Liu, Infotech Ventures Comapany (Advisor: Harry Rowen) Lunch served to those who respond to Yumi Onoyama by 12:00 noon Tuesday, May 20, 2003. Please contact Yumi via email at yumio@stanford.edu.

Philippines Conference Room, Encina Hall, Third Floor, Central Wing

Muslim Southeast Asia and the Iraq War: The Politics of Backlash

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About the Talk: In Muslim-majority Indonesia and Malaysia, initial reactions to the American war in Iraq were overwhelmingly negative. Nor could support for American action be found among Muslim minorities in the Philippines, Singapore, or Thailand. But Southeast Asian Muslims were not equally or uniformly outraged. Complex and distinctive local contexts and agendas shaped Muslim anger and the responses to it. Dr. Emmerson will highlight these Southeast Asian settings and analyze the politics of anti-American backlash along a critical periphery of the Muslim world. Donald Emmerson is director of the Southeast Asia Forum at the Asia/Pacific Research Center at Stanford University. He teaches courses in international relations and comparative politics. His research interests focus on Islamism, regionalism, democratization, and US policy regarding Indonesia and Southeast Asia. Emmerson has testified before Congress in 1998, 1999, and 2001 on East Timor, Indonesia, and Southeast Asian topics. He assisted the Carter Center in monitoring Indonesia's national election and the UN vote on autonomy in East Timor. Members of the World Affairs Council: $5.00 Non-members: $8.00 Students with ID: Free To make a reservation, please contact the World Affairs Council at 415-293-4600. Cosponsored by the Asia/Pacific Research Center and Stanford Center on Conflict and Negotiation at Stanford University and the World Affairs Council of Northern California.

Stanford Law School, Alvarado and Nathan Abbott Way, Stanford University

Donald K. Emmerson

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Senior Fellow Emeritus at the Freeman Spogli Institute for International Studies
Affiliated Faculty, CDDRL
Affiliated Scholar, Abbasi Program in Islamic Studies
aparc_dke.jpg PhD

At Stanford, in addition to his work for the Southeast Asia Program and his affiliations with CDDRL and the Abbasi Program in Islamic Studies, Donald Emmerson has taught courses on Southeast Asia in East Asian Studies, International Policy Studies, and Political Science. He is active as an analyst of current policy issues involving Asia. In 2010 the National Bureau of Asian Research and the Woodrow Wilson International Center for Scholars awarded him a two-year Research Associateship given to “top scholars from across the United States” who “have successfully bridged the gap between the academy and policy.”

Emmerson’s research interests include Southeast Asia-China-US relations, the South China Sea, and the future of ASEAN. His publications, authored or edited, span more than a dozen books and monographs and some 200 articles, chapters, and shorter pieces.  Recent writings include The Deer and the Dragon: Southeast Asia and China in the 21st Century (ed., 2020); “‘No Sole Control’ in the South China Sea,” in Asia Policy  (2019); ASEAN @ 50, Southeast Asia @ Risk: What Should Be Done? (ed., 2018); “Singapore and Goliath?,” in Journal of Democracy (2018); “Mapping ASEAN’s Futures,” in Contemporary Southeast Asia (2017); and “ASEAN Between China and America: Is It Time to Try Horsing the Cow?,” in Trans-Regional and –National Studies of Southeast Asia (2017).

Earlier work includes “Sunnylands or Rancho Mirage? ASEAN and the South China Sea,” in YaleGlobal (2016); “The Spectrum of Comparisons: A Discussion,” in Pacific Affairs (2014); “Facts, Minds, and Formats: Scholarship and Political Change in Indonesia” in Indonesian Studies: The State of the Field (2013); “Is Indonesia Rising? It Depends” in Indonesia Rising (2012); “Southeast Asia: Minding the Gap between Democracy and Governance,” in Journal of Democracy (April 2012); “The Problem and Promise of Focality in World Affairs,” in Strategic Review (August 2011); An American Place at an Asian Table? Regionalism and Its Reasons (2011); Asian Regionalism and US Policy: The Case for Creative Adaptation (2010); “The Useful Diversity of ‘Islamism’” and “Islamism: Pros, Cons, and Contexts” in Islamism: Conflicting Perspectives on Political Islam (2009); “Crisis and Consensus: America and ASEAN in a New Global Context” in Refreshing U.S.-Thai Relations (2009); and Hard Choices: Security, Democracy, and Regionalism in Southeast Asia (edited, 2008).

Prior to moving to Stanford in 1999, Emmerson was a professor of political science at the University of Wisconsin-Madison, where he won a campus-wide teaching award. That same year he helped monitor voting in Indonesia and East Timor for the National Democratic Institute and the Carter Center. In the course of his career, he has taken part in numerous policy-related working groups focused on topics related to Southeast Asia; has testified before House and Senate committees on Asian affairs; and been a regular at gatherings such as the Asia Pacific Roundtable (Kuala Lumpur), the Bali Democracy Forum (Nusa Dua), and the Shangri-La Dialogue (Singapore). Places where he has held various visiting fellowships, including the Institute for Advanced Study and the Woodrow Wilson International Center for Scholars. 



Emmerson has a Ph.D. in political science from Yale and a BA in international affairs from Princeton. He is fluent in Indonesian, was fluent in French, and has lectured and written in both languages. He has lesser competence in Dutch, Javanese, and Russian. A former slam poet in English, he enjoys the spoken word and reads occasionally under a nom de plume with the Not Yet Dead Poets Society in Redwood City, CA. He and his wife Carolyn met in high school in Lebanon. They have two children. He was born in Tokyo, the son of U.S. Foreign Service Officer John K. Emmerson, who wrote the Japanese Thread among other books.

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Supplier-Managed IT Services Outsourcing: When Is It Worthwhile?

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This is a presentation of joint work with Dr. Rafiq Dossani, Shorenstein APARC. About the Talk: IT (Information Technology) outsourcing has become a standard approach for many Fortune 3000 and smaller companies to achieve cost-effectiveness. However, while outsourcing at the low end of the value chain has gained acceptance, many issues remain unresolved at the high end of the IT value chain. We develop a characterization of outsourcing firms, suppliers, and tasks that is useful in providing guidelines on when to outsource, and whom to outsource to. These guidelines for IT outsourcing strategies are based on a study of US customers, and Indian IT suppliers, involving questionnaires and interviews. To our knowledge, this is first study that has captured the supplier characteristics in the level of detail, which will be discussed by Dr. Akella in his talk. Professor Ram Akella is currently professor of IE and Management, and was the founding director, SUNY Center for Excellence in Global Enterprise Management. At Stanford, the University of California, Berkeley, and Carnegie Mellon University, as a faculty member and director, Professor Akella has led major multi-million dollar interdisciplinary team efforts in high tech and semiconductors. His current research interests include in process learning, quality, fab economic models, cost of ownership and financial justification for IT Management and equipment, production planning and control, and bio-informatics. His other interests are enterprise systems, IT and software, financial engineering, high tech and e-business, and range from cell and factory level design and control to enterprise-wide coordination and logistics, including supply chain management and contracts, financial engineering and investment, demand management, e-commerce and e-business exchanges, and product and process portfolios for risk management and design capacity management.

Daniel and Nancy Okimoto Conference Room

Ram Akella Professor, IE and Management SUNY
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The Competitiveness of Indian Manufacturing

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Daniel and Nancy Okimoto Conference Room

Pankaj Chandra Professor, Operations and Technology Management Speaker Indian Institute of Management, Ahmedabad, India
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