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Christophe Crombez
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The 2005-06 Academic Year got off to an exciting start for the European Forum. Following the recent terror attacks in Madrid and London, the Forum plans to be organizing a variety of events on the manners in which European countries and institutions are facing the threat of terrorism. In the first weeks of the Fall Quarter the European Forum hosted several European politicians, academics and authors. On October 12 John Bruton, European Union Ambassador to the United States and former Prime Minister of Ireland (1994-97), presented his views on Europe and the United States as global partners in a fascinating lecture for a crowd of about 100 faculty and researchers.

Earlier during the Fall term the European Forum was honored to welcome Latvian Foreign Affairs Minister Artis Pabriks. On September 21 he gave a lecture on Latvia's current challenges in foreign policy and homeland security, and answered questions on Latvia's relations with the United States and its position within the European Union.

During a visit to Stanford on October 4 German sociologist Heinz Bude, from the University of Kassel, presented his views on the most recent German elections from a broad, societal and historical perspective, paying attention to the 1968 student uprisings and their long-term impact on German society. Later on in October Christian Deubner, from the CEPII research center in Paris, shared his opinions on current developments in French politics, with a focus on the French rejection of the EU Constitution earlier this year and its impact on France's position in the EU.

On October 26 German author Peter Schneider offered his reflections on the cultural differences between Europe and the United States. He compared the relationship between the two continents to a marriage that has its ups and downs, but endures. In a seminar on November 3 Josef Joffe, Editor of the German newspaper Die Zeit, pointed at cultural, demographic, political and economic reasons to argue that the European Union is not about to become a new superpower. Both events drew much attention and a large audience from the Stanford community.

Later on in November there will be talks on the effects of the Europeanization of the holocaust on the attitudes toward Jews (November 16), by Werner Bergmann from the Technische Universität Berlin; and on Poland's current economic dilemma's (November 17), by Wojciech Bienkowski, from the Warsaw School of Economics.

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We investigate the demand for the rule of law in post-Communist economies after privatization under the assumption that theft is possible, that those who have "stolen" assets cannot be fully protected under a change in the legal regime towards "rule of law," and that the number of agents with control rights over assets is large. A demand for broadly beneficial legal reform may not emerge because the expectation of a legal vacuum increases the expected relative return to asset-stripping, and strippers may gain from a weak, corrupt state. The outcome can be inefficient even from the narrow perspective of the asset-strippers.

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Karla Hoff Speaker The World Bank
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The Philippines suffers from an ominous systemic deficit: the incapacity of democratic institutions to respond to pent-up social demands. A scant four years after a second "peoople power revolution" in 2001 brought down President Joseph Estrada on charges of involvement in illegal gambling, the country again finds itself in crisis. President Gloria Macapagal-Arroyo struggles to retain power as she faces allegations that close relatives are also involved in gambling syndicates and still more damaging accusations of complicity in fixing the May 2004 elections. Unlike in 1986 and 2001, when changes in leadership nurtured new hopes, the crisis of 2005 reveals a system desperately struggling for legitimacy. Prof. Hutchcroft will argue for well-considered institutional reform designed to break the cycle of recurrent crisis and tackle the country's perilous democratic deficit.

Paul D. Hutchcroft has written widely on Philippine politics and political economy, including Booty Capitalism: The Politics of Banking in the Philippines (1998). His current writing includes a book on state formation and territorial politics in the Philippines from the early American colonial period through the enactment of the Local Government Code in the 1990s; and an edited volume on Philippine political reform stemming from a workshop he organized in Manila in July. He has been a visiting fellow at the Asia Research Institute in Singapore and is now the associate chair of UW-Madison's Political Science Department.

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Paul Hutchcroft Associate Professor of Political Science Speaker University of Wisconsin - Madison
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A background paper is available.

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Visiting Scholar 2005 -2006
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He is at CDDRL as a Humboldt Fellow.

Christoph Zuercher CDDRL Visiting Scholar, Associate Professor Speaker Free University Berlin
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Pre-doctoral Fellow 2005 - 2006

Gideon Maltz is studying the role of presidential term limits in advancing democracy, strategies for more effectively enforcing term limits, and the question of term limits in the context of parliamentary systems. Gideon has worked as a Junior Fellow in the Democracy & Rule of Law program at the Carnegie Endowment for International Peace and as a Business Analyst at McKinsey & Company. He has also spent time working on comparative constitutionalism as a part-time consultant at the National Endowment for Democracy, on Sudan and Zimbabwe at the International Crisis Group, and on international trade at the law firm of Hogan & Hartson.

Gideon graduated with a B.A. in Ethics, Politics & Economics from Yale and is currently a third-year student at Stanford Law School. He is also a graduate fellow at the Stanford Center for International Conflict and Negotiation (SCICN).

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This report provides a preliminary examination of changes in village fiscal affairs between 2000 and 2004. The basis for this assessment is a survey of 101 villages in 50 townships in 25 counties in 5 provinces in China that was carried out between March and April of 2005. The provinces include Jilin, Hebei, Shanxi, Sichuan and Jiangsu. In each province, the counties, townships and villages were selected to provide a representative cross-section. Our village survey was complemented by an investigation into fiscal changes in each of the 50 townships. In this report, we focus on the revenue and expenditure implications of these changes at the village level. We provide an overall assessment for all 100 villages, but also examine village-level differences across provinces, as well as differences between villages in the richest and poorest quintiles of our sample.

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Report to the World Bank, Village Finance: Tax-for-Fee-Reform, Village Operating Budgets and Public Goods Investment
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Scott Rozelle
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Encina Columns is the biannual newsletter of the Freeman Spogli Institute for International Studies. The newsletter, published in the fall and spring, highlights recent news, events, policy analysis and accomplishments of the Institute and its research centers and programs.

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In a recent op ed, CDDRL's J. Alexander Thier discusses Afghanistan's landmark September 2005 elections. He notes, however, that while this is an encouraging sign, Afghanistan is far from out of the woods in terms of establishing itself as a stable state.

Afghanistan held its landmark legislative elections this Sunday. Almost exactly four years after 9/11, and the invasion that followed, Afghanistan will have, for the first time in its history, a democratically elected constitutional government. That is something remarkable, and cause to celebrate - but only in the way that one cheers hopefully during a tough game at halftime.

Everything we know about democracy promotion and post-conflict reconstruction tells us that Afghanistan is far from out of the woods. Even after significant international intervention, many failed states remain unstable, or relapse into conflict and chaos. Remember Haiti? The United States invaded in 1994 and oversaw reconstruction and elections in 1995 and 2000, as international forces slowly withdrew. By 2004, U.S. and United Nations Forces were dispatched to the troubled island again. Haiti is not an outlier. World Bank studies show that countries coming out of civil war are forty percent likely to return to war within five years. It took one horrific hurricane to turn New Orleans to chaos. Imagine the effects of 25 years of war.

One of the main reasons failing countries continue to fail is economic. Economic recovery after war provides one of the best measures of the likelihood of long-term stability. International assistance can play a key role in jump-starting the economy and paying for basic government services, but it can take a generation to return to pre-war standards of living. The problem is that donor countries tend to be most generous in the first few years of the crisis - when local capacity to do something with those funds is limited. And just when the government starts to get on its feet - usually around the four-year mark - the assistance dries up.

The Afghan economy has seen remarkable growth rates over the last four years, but that is only half good. There is a truly free market now in Afghanistan - free from the rule of law. Much of the growth has come from the booming opium trade and other smuggling operations. While a strong economy is necessary to rebuild state and society, a criminal economy will necessarily destroy them both.

Politically, Afghanistan is getting its first taste of real elections - but it is far from being a stable democracy. There were more than 5,000 candidates in the legislative elections this Sunday, violence was relatively low, and turnout decent - all signs that political participation is blossoming. But nobody knows who will run the new parliament, or how it will function. It has no building and no staff. The only other parliament in Afghanistan's history, from 1965 to 1973, is widely blamed for increasing the polarization that led to civil war there. Since armed warlords still dominate many parts of the country, they will undoubtedly be strongly represented in the new legislature. As we have seen in places like Liberia and Serbia, post-conflict elections can produce quite undemocratic leaders.

What does this mean for Afghanistan? First, it means that the next four years will be as important there as the last four. Afghanistan's leaders, elected and otherwise, must put the cause of their nation before their factional, ethnic and venal interests. For our part, the United States and its allies must continue to support Afghanistan, financially and militarily, until it gets out of the danger zone. That means the same level of support for at least another four years.

Second, it means we have to shift our mentality there from short term to long term. If the United States has one overarching goal, it must be to build a legitimate Afghan state that is strong enough to survive and competent enough to deliver results. The Afghan police and legal system remain in shambles. Afghanistan's school system was rated the worst in the world last year by the United Nations Development Program. More international support needs to go to education, training a capable Afghan government, and supporting the rule of law.

Finally, it means something a little more intangible: continued political attention. If Afghanistan falls off the policy agenda in Washington, London and Berlin, the dangers that lurk there will prosper. Lagging reconstruction is already creating support for the ongoing Taliban insurgency. An unchecked opium trade keeps warlord armies well fed.

On this anniversary, we must remember the true cause of those grim attacks four years ago: Bin Laden and Al Qaeda had free reign of a failed state in chaos. We may not be able to find bin Laden, but we know where Afghanistan is located.

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The attacks of September 11, 2001, and the U.S. invasion that followed have thrown Afghanistan from the periphery to the center of international affairs. Prior to these events, Americans knew very little about Afghanistan and its history, culture, and politics. This lack of knowledge highlights the need to inform the U.S. public about Afghanistan, as it appears that the Central Asian country will be central to U.S. foreign policy and international affairs for many years to come.

SIIS's Stanford Program on International and Cross-Cultural Education (SPICE), which serves as a bridge between the Institute and schools across the nation, is working to address this need by developing a curriculum unit on democracy-building in Afghanistan for advanced high school and community college students. SPICE's Eric Kramon, a master's student in international and comparative education, who received his BA from Stanford in 2004 in political science and history, is developing the curriculum unit with support from faculty and staff from Stanford's Center for Russian, Eastern European, and Eurasian Studies. Using a documentary film and a variety of engaging activities, the curriculum unit will provide students with an understanding of contemporary Afghan politics, the process of creating a new constitution for Afghanistan, and the complexities of democracy-building.

The curriculum is being developed around a documentary originally aired on PBS's Wide Angle entitled Afghanistan: Hell of a Nation, directed and produced by Tamara Gould. CDDRL fellow J. Alexander Thier served as the project advisor for the documentary, which follows Afghanistan's recent constitution-making process. The collaboration between SPICE and the filmmakers will enhance the pedagogical power of the curriculum and will facilitate more widespread understanding of contemporary Afghan political issues. According to Gould, Our goal in making Hell of a Nation was to bring the political drama unfolding in Afghanistan to life. Working with SPICE will allow us to reach the classroom with our film in ways that are far more effective than a national broadcast. Through SPICE, teachers will be able to use this curriculum to teach thousands of students more about Afghanistan, its new constitution, and the process of creating a democracy. This partnership between the filmmakers and SPICE is a win-win for us, and for teachers and students across the country.

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Jason M. Brownlee
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As the conflict in Iraq reminds us, nation building confounds its architects' designs with almost predictable regularity. Investments of time, resources, and specialized knowledge have not enabled large-scale political engineering. Instead, would-be nation builders have been frustrated by a proliferation of unintended consequences and their inability to elicit societal participation in their projects. Results depend more upon initial conditions prior to an intervention than the nation builder's exertions upon arrival.

Hence, the U.S. has performed most poorly when its mission required the most work (e.g., Somalia, Haiti, Iraq). Conversely, it has done best where it did less (Germany, Japan), deferring to old-regime civil servants and upgrading already functional institutions. Given the humbling record of Western powers at navigating the perils of macro-level political planning, the "how" of nation-building should be considered, in the formulation of Defense Secretary Donald Rumsfeld, a known unknown.

More likely, it is a known unknowable. The extent of unintended consequences and contingency in largescale political engineering makes disappointment certain and disaster likely.

Twentieth-century experiences belie the notion that nation-building successes will solve the problem of state failures. Forces trying to impose regime change and raise new state structures immediately grapple with societal inertia and their own deficit in understanding local politics.

This dilemma pushes would-be nation builders down one of two undesirable paths. Either they recognize their inability to restructure indigenous political arrangements or they attempt to do so in vain. Despite plans of change at the outset of nation building, those executing the project soon embrace a change of plans.

Thus, even the most committed states have been hampered by an inability to develop political capacity on the ground and improve upon the initial endowments of the country being occupied. Institutional value-added has been minimal, reflecting the problem of state instability back upon those who expected to solve it.

These patterns raise serious doubts about the chances of success in even the most well-intentioned of regimechange missions. They demarcate the limits of projecting state power abroad, whether for humanitarian or security purposes. The failures of imposed regime change lead to the conclusion that indigenous gradual political development-with all of its potential for authoritarianism and civil unrest-may be the optimal path for sustainable democratization and state building.

When comparing the uneven history of post-colonial development with the poor record of nation building we are left paraphrasing Churchill's endorsement of democracy as the worst kind of government except for the alternatives: Sovereign political development may be the worst form of government except for all those kinds of nation building that have been tried.

Infrastructural weakness is not a technical problem surmountable through systematic review of prior experiences. Indeed, the notion of "learning past lessons" deceptively implies that the current generation of academics and policymakers can succeed where their predecessors failed. The idea that nation building is a flawed but salvageable project prejudges its fundamental viability.

Once we have set our sights on rescuing an enterprise that has repeatedly frustrated its architects and their subjects, we screen out alternatives that more effectively serve the same development goals. We also risk funneling research down an intellectual cul-de-sac, at great cost in time, resources, and lives lost for those participating in failed regime-change missions. Therefore, a more productive direction for contemporary interest in nation building may mean backing up and reassessing the core problem of weak states, on one hand, and the limits of foreign intervention, on the other. Ensuring a positive impact on the country considered for intervention requires orienting the enterprise away from the takeover of state functions and toward the short-term provision of aid to local communities.

Apart from the futile pursuit of infrastructural power or the doomed deployment of despotic power (coercion), one can envision a third kind of influence, "regenerative power," which is exercised during relief efforts, such as emergency assistance following natural disasters.

Regenerative power involves neither the adoption of domestic state functions nor physical coercion. It denotes the ability of a state to develop infrastructure under the direction of the local population. For example, it means rebuilding a post office, but not delivering the mail. It is typified by the U.S. response to natural disaster relief within its own borders and abroad.

Regenerative power turns nation building on its head. Rather than imposing a blueprint from outside, participants respond to the needs of the affected community. It is restorative rather than transformative. There is no preexisting master plan for what the "final product" will be, but rather an organically evolving process in which the assisting group serves at the direction of the people being assisted.

The exercise of regenerative power is inherently limited in scale since it depends on local engagement rather than elite planning. It is inimical to macro-level ambitions but it also acquires a bounded effectiveness that imposed regime change lacks. Where nation building attempts to overwrite existing organization and only belatedly incorporates local understanding, disaster relief efforts and regenerative projects begin from the assumption that local communities know best their own needs. Existing social networks and patterns of authority are an asset, not a hindrance, and local know-how offers the principal tool for resolving local crises.

Rather than pursuing the often destructive delusion of interventionist state transformation, regenerative power starts from an interest in using state power for constructive purposes and a sober assessment of the limits of that aim. The assisting foreign groups serve under the direction of indigenous political leaders toward the achievement of physical reconstruction and emergency service provision.

With remarkable prescience Rumsfeld commented in October 2001, "I don't know people who are smart enough from other countries to tell other countries the kind of arrangements they ought to have to govern themselves."

The experience of twentieth century U.S. interventions and ongoing operations in Iraq supports his insight. Proponents of nation building or shared sovereignty arrangements have exaggerated the ability of powerful states to foster institutions in developing countries. The empirical record, from successful outcomes in Germany and Japan to dismal failures across the global south, shows the societies alleged to be most in need of strong institutions have proven the least tractable for foreign administration. Rather than transmitting new modes of organization, would-be nation builders have relied upon existing structures for governance.

This dependence on the very context that was intended for change reveals how little infrastructural power nation builders wield. They are consistently unable to implement political decisions through the local groups. Contrary to recent arguments that sustained effort and area expertise can enable success, nation building has foundered despite such investments.

Understanding that nation building is a "known unknowable" is crucial for redirecting intervention where it can be more effective. Advocates of humanitarian assistance should consider the merits of smaller, regenerative projects that can respond better to uncertainty and avoid the perils of large-scale political engineering.

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