Trade
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Nathan Nunn is an Assistant Professor of Economics at Harvard University. Professor Nunn was born in Canada, where he received his PhD from the University of Toronto in 2005. Professor Nunn’s primary research interests are in international trade, economic development, and economic history. He is an Associate editor of the Journal of International Economics and an NBER Faculty Research Fellow.

One stream of Nunn’s research focuses on the relationship between historic events and current economic performance within Africa. In “Historical Legacies: A Model Linking Africa’s Past to its Current Underdevelopment”, published in the Journal of Development Economics in 2007, Nunn develops a game-theoretic model showing how the slave trade and colonial rule could have had permanent long-term effects on economic performance. In “The Long-Term Effects of Africa’s Slave Trades” (Quarterly Journal of Economics, 2008), Nunn documents the long-term adverse economic effects of Africa’s slave trades.

A second stream of Professor Nunn’s research focuses on the importance of hold-up and incomplete contracting in international trade. He has published research showing that a country’s ability to enforce written contracts is a key determinant of comparative advantage (“Relationship-Specificity, Incomplete Contracts and the Pattern of Trade”, Quarterly Journal of Economics, 2007).

Summary of talk:

In his presentation "The Slave Trade and the Origins of Mistrust in Africa", Nathan Nunn offers an empirical investigation into the relationship between Africa's Slave Trade (1400 to 1900) and its culture of mistrust today. The project is an individual-level analysis of whether members of heavily enslaved ethnic groups in Africa display lower levels of trust today. The underlying argument posits that the slave trade created a culture of "enslave or be enslaved", where a non-trivial proportion of slaves were actually tricked and sold off into slavery by their own friends or family members. These conditions left a legacy of mistrust that has persisted to this day.

The empirical analysis relies on estimates of slave flows and records of slaves' ethnic membership. It also relies on 2003 Afrobarometer survey data to measure individual attitudes of trust toward neighbors, family members, local councilmen and co-ethnics in 17 sub-Saharan African countries. The results indicate a negative effect of Africa's slave trade on individual levels of trust: ethnic groups most affected by the slave trade are most likely to be distrusting today. The results further show that this occurs not through the effect the slave trade had on the locality in which the individual currently resides, but rather through the effect the slave trade had on that individual's ethnic ancestors.

» Paper: "The Slave Trade and the Origins of Mistrust in Africa" (pdf)

Encina Ground Floor Conference Room

Nathan Nunn Assistant Professor of Economics Speaker Harvard University
Seminars
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This daylong discussion, attended by roughly 40 scholars and practitioners from universities, labor organizations, corporations and NGOs, focused on how companies can move beyond monitoring and compliance to build socially and environmentally responsible supply chains.

At two workshops in 2008, the group discussed a few key strategies, leading Josh Cohen and Rick Locke to seek funding for a new research center. These included:

  1. Scaling up codes of conduct
  2. Reinvigorating national regulation
  3. Combining labor standards and trade rules

The event on January 29th covered the following topics, summarized below:

Panel 1.   Recent research on ethical consumption

  • Michael Hiscox, Jens Hainmueller, Sandra Sequeira (Harvard)
  • Margeret Levi (University of Washington)
  • Yotam Margalit (Stanford University)
  • Dara O’Rourke (GoodGuide, UC Berkeley)

Selected findings:

  • The Average “Fair Trade” effect is 9%, based on a coffee experiment with Whole  Foods
  • Consumers are willing to pay some premium for social labels (7.3-13.1%)
  • Berkeley: Personal health and wellness and the environment outrank labor concerns for consumers of products listed on GoodGuide.com

Panel  2.   Best practices in the environmental area that might be carried over to labor/trade

  • Edgar Blanco (MIT)
  • Bonnie Nixon (HP)
  • Erica Plambeck (Stanford)
  • Charles Sabel (Columbia)

Selected discussion points:

  •  Compliance-based regulation no longer works; there are new roles for NGOs, government, and public-private partnerships in creating incentives for suppliers
  • Suppliers care most about volume and length of contracts; since not everyone is Wal-Mart, buyers may need to come together to encourage ethical behavior

Panel 3.   New regulatory strategies in labor markets in emerging economies

  • Salo Vinocur Coslovsky, Massachusetts Institute of Technology
  • Mary Gallagher, University of Michigan
  • Andrew Schrank, University of New Mexico
  • Rick Locke, Massachusetts Institute of Technology

Selected discussion points:

  • Evidence from Brazil shows that law enforcement operates in parallel with private auditors in monitoring suppliers, becoming “shock troops of sustainable development”; some issues require state regulation
  • There may be trade-offs between bureaucratic efficiency and equity in a compliance system, as in the Dominican Republic
  • In some cases, the state’s role is to delegate work so private sector can police more effectively

Panel 4.   Looking Forward

  • Caitlin Morris (Nike)
  • Marcela Manubens (Phillips-Van Heusen)

Selected discussion points:

  • Key issue is how to tie labor and environmental agenda together; for some companies, environmentalism is self-interest—materials like bamboo often resonate with designers. But who makes the bamboo shirt is less of an issue. One option is to derive cost savings from environmental policies and direct that money to programs for workers.
  • Big question: in an entry-level sector, how far across the spectrum from minimum or entry-level to living wage do we go? How do we measure progress? Is it a 3% increase in labor value /product each year?
  • Another issue in need of further exploration: where upgrading doesn’t reach lower down in the supply chain. There’s got to be a virtuous circle where technical upgrading and labor issues can be joined
  • Environmental issues have won the battle because regulatory environment incents companies to care about it, and consumers care, too—it’s become hip. Maybe what’s needed is to institutionalize the “triple bottom line” approach to business such that companies with good labor policies get tax breaks.

» Notes and Presentations (password protected)

Co-sponsored with the Global Supply Chain Management Forum

Panel Discussions
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A new moral, ethical, and legal framework is needed for international human rights law. Never in human history has there been such an elaborate international system for human rights, yet from massive disasters, such as the Darfur genocide, to everyday tragedies, such as female genital mutilation, human rights abuses continue at an alarming rate. As the world population increases and global trade brings new wealth as well as new problems, international law can and should respond better to those who live in fear of violence, neglect, or harm.

Modern critiques global human rights fall into three categories: sovereignty, culture, and civil society. These are not new problems, but have long been debated as part of the legal philosophical tradition. Taking lessons from tradition and recasting them in contemporary light, Helen Stacy proposes new approaches to fill the gaps in current approaches: relational sovereignty, reciprocal adjudication, and regional human rights. She forcefully argues that law and courts must play a vital role in forging a better human rights vision in the future.

CISAC Conference Room

Helen Stacy Senior Fellow Speaker CDDRL
Workshops
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Scott Rozelle is the Helen F. Farnsworth Senior Fellow in the Freeman Spogli Institute for International Studies. Dr. Rozelle received his BS from the University of California, Berkeley; and his MS and PhD from Cornell University. Before arriving at Stanford, Rozelle was a professor at the University of California, Davis (1998-2000) and an assistant professor in the Food Research Institute and Department of Economics at Stanford University (1990-98). Currently, he is a member of the American Economics Association, the American Agricultural Economics Association, the International Association for Agricultural Economists, the Asian Studies Association, and the Association of Comparative Economics. He also serves on the editorial board of Economic Development and Cultural Change, Agricultural Economics, Contemporary Economic Policy, China Journal, and the China Economic Review.

Dr. Rozelle's research focuses almost exclusively on China and is concerned with three general themes: a) agricultural policy, including the supply, demand, and trade in agricultural projects; b) the emergence and evolution of markets and other economic institutions in the transition process and their implications for equity and efficiency; and c) the economics of poverty and inequality.

In the past several years, Dr. Rozelle's papers have been published in top academic journals, including Science, Nature, American Economic Review, and the Journal of Economic Literature. He is fluent in Chinese and has established a research program in which he has close working ties with several Chinese collaborators and policymakers. He is the chair of the International Advisory Board of the Center for Chinese Agricultural Policy; a co-director of the Agricultural Issues Center (University of California); and a member of Stanford's new Food, Security, and the Environment Program.

CO-SPONSORED BY LIBERATION TECHNOLOGY

Richard and Rhoda Goldman Conference Room

Scott Rozelle Helen F. Farnsworth Senior Fellow Speaker Stanford University
Seminars
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Many resource dependent states have to varying degrees, failed to provide for the welfare of their own populations, could threaten global energy markets, and could pose security risks for the United States and other countries.  Many are in Africa, but also Central Asia (Turkmenistan, Kazakhstan, Azerbaijan), Southeast Asia (Cambodia, Burma, East Timor), and South America (Bolivia, Colombia, Ecuador) Some have only recently become – or are about to become – significant resource exporters.  Many have histories of conflict and poor governance.  The recent boom and decline in commodity prices – the largest price shock since the 1970s – will almost certainly cause them special difficulties.  The growing role of India and China, as commodity importers and investors, makes the policy landscape even more challenging.

We believe there is much the new administration can learn from both academic research, and recent global initiatives, about how to address the challenge of poorly governed states that are dependent on oil, gas, and mineral exports.  Over the last eight years there has been a wealth of new research on the special problems that resource dependence can cause in low-income countries – including violent conflict, authoritarian rule, economic volatility, and disappointing growth.  The better we understand the causes of these problems, the more we can learn about how to mitigate them.

There has also been a new set of policy initiatives to address these issues: the Kimberley Process, the Extractive Industries Transparency Initiative, the World Bank’s new “EITI plus plus,” Norway’s Oil for Development initiative, and the incipient Resource Charter.  NGOs have played an important role in most of these initiatives; key players include Global Witness, the Publish What You Pay campaign, the Revenue Watch Institute, Oxfam America, and an extensive network of civil society organizations in the resource-rich countries themselves.

Some of these initiatives have been remarkably successful.  The campaign against ‘blood diamonds,’ through the Kimberley Process, has reduced the trade in illicit diamonds to a fraction of its former level, and may have helped curtail conflicts in Angola, Liberia, and Sierra Leone.  Many other initiatives are so new they have not been have not been carefully evaluated.

This workshop is designed to bring together people in the academic and policy worlds to identify lessons from this research, and from these policy initiatives, that can inform US policy towards resource-dependent poorly states in the new administration.

» Workshop memos (password protected)

Philippines Conference Room

Stephen Haber Speaker Stanford
Brian Phipps Speaker State Department
Petter Nore Speaker Norad
Nilmini Gunaratne Rubin Speaker Senate Foreign Relations
Michael Ross Moderator UCLA
Macartan Humphreys Speaker Columbia
Kevin Morrison Speaker Cornell

CISAC
Stanford University
Encina Hall
Stanford, CA 94305-6165

(650) 725-1314
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Senior Fellow at the Freeman Spogli Institute for International Studies
Theodore and Frances Geballe Professor in the School of Humanities and Sciences
Professor of Political Science
james_fearon_2024.jpg PhD

James Fearon is the Theodore and Frances Geballe Professor in the School of Humanities and Sciences and a professor of political science. He is a Senior Fellow at FSI, affiliated with CISAC and CDDRL. His research interests include civil and interstate war, ethnic conflict, the international spread of democracy and the evaluation of foreign aid projects promoting improved governance. Fearon was elected to the National Academy of Sciences in 2012 and the American Academy of Arts and Sciences in 2002. Some of his current research projects include work on the costs of collective and interpersonal violence, democratization and conflict in Myanmar, nuclear weapons and U.S. foreign policy, and the long-run persistence of armed conflict.

Affiliated faculty at the Center for International Security and Cooperation
Affiliated faculty at the Center on Democracy, Development, and the Rule of Law
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James D. Fearon Speaker Stanford
Karin Lissakers Speaker Revenue Watch Institute
Basil Zavoico Speaker International Monetary Fund (former)

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CDDRL Postdoctoral Fellow 2008-2009
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Desha Girod is a postdoctoral fellow at the Center on Democracy, Development and Rule of Law at Stanford University where she manages the program Evaluating International Influences on Democratic Development.  Her research focuses on the influence of external actors on political and economic development.  In 2009, she will join the faculty of the Department of Government at Georgetown University.
Desha Girod Speaker Stanford
Ian Gary Speaker Oxfam

CDDRL
Stanford University
Encina Hall
Stanford, CA 94305-6055

(650) 723-0676 (650) 724-2996
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Senior Fellow at the Freeman Spogli Institute for International Studies, Emeritus
Graham H. Stuart Professor of International Relations
Senior Fellow at the Hoover Institution, Emeritus
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Stephen Krasner is the Graham H. Stuart Professor of International Relations. A former director of CDDRL, Krasner is also an FSI senior fellow, and a fellow of the Hoover Institution.

From February 2005 to April 2007 he served as the Director of Policy Planning at the US State Department. While at the State Department, Krasner was a driving force behind foreign assistance reform designed to more effectively target American foreign aid. He was also involved in activities related to the promotion of good governance and democratic institutions around the world.

At CDDRL, Krasner was the coordinator of the Program on Sovereignty. His work has dealt primarily with sovereignty, American foreign policy, and the political determinants of international economic relations. Before coming to Stanford in 1981 he taught at Harvard University and UCLA. At Stanford, he was chair of the political science department from 1984 to 1991, and he served as the editor of International Organization from 1986 to 1992.

He has been a fellow at the Center for Advanced Studies in the Behavioral Sciences (1987-88) and at the Wissenschaftskolleg zu Berlin (2000-2001). In 2002 he served as director for governance and development at the National Security Council. He is a fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations.

His major publications include Defending the National Interest: Raw Materials Investment and American Foreign Policy (1978), Structural Conflict: The Third World Against Global Liberalism (1985), Sovereignty: Organized Hypocrisy (1999), and How to Make Love to a Despot (2020). Publications he has edited include International Regimes (1983), Exploration and Contestation in the Study of World Politics (co-editor, 1999),  Problematic Sovereignty: Contested Rules and Political Possibilities (2001), and Power, the State, and Sovereignty: Essays on International Relations (2009). He received a BA in history from Cornell University, an MA in international affairs from Columbia University and a PhD in political science from Harvard.

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Stephen D. Krasner Moderator Stanford
Corinna Gilfillan Speaker Global Witness
Workshops
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The impact of intellectual property laws on national economic development is complex and poorly understood. With limited success, studies have attempted to analyze the degree to which intellectual property protection and enforcement spurs development and the point at which it ceases to contribute, or worse, hinders development. Prior to the adoption of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement), the lack of harmonization in intellectual property protection across countries enabled analysis of locational determinants for investment and knowledge transfer. Analysts hypothesized that the TRIPS Agreement would reduce investment selectivity decisions based on strength of Intellectual Property Rights (IPR) protection, and investors would focus on regions with high rate of returns.

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There is a potential for large gains in the efficiency of energy use with substantial economic payoffs: in buildings, motor vehicles, traffic control, electricity grids, industry. All of these applications involve the use of information technologies. This workshop will focus on demand and efficiency topics that are becoming increasingly salient.

This invitation-only workshop involves three important actors on the world energy scene: California and Mainland China are large consumers of oil while Taiwan, for its size a substantial consumer of oil and emitter of greenhouse gases, plays a leading role in information technologies. California’s size and commitment to energy efficiency makes its role an important one within the US while China’s ongoing urbanization has major energy implications.

This workshop is the first in a series with the goal of convening leading experts from these three regions to focus on key energy-economic efficiency issues, form a research agenda and collaborate on possible solutions.

Topics for discussion will include:

  • strategic policy choices, especially the challenges posed by cap-and-trading of carbon emissions
  • improving industry use of energy
  • urbanization 2.0: transportation and buildings
  • how IT helps green the planet, including the use of smart meters 
  • how consumers respond to better data
  • new venture capital investments in clean tech
  • energy efficiency start-ups in Silicon Valley

Preliminary agenda:

Day 1: Tuesday, February 17

8:00 am – 8:30 am Check-in and Continental Breakfast

8:30 am – 8:45 am Introduction

Professor Henry Rowen, Co-Director, Stanford Program on Regions of Innovation and Entrepreneurship

8:45 am – 9:45 am Keynote

“How to Think About Energy Efficiency” 
Dr. James Sweeney, Director, Precourt Institute for Energy Efficiency, Stanford University

10:00 am Strategic Choices

Moderator: Marguerite Hancock, Associate Director, SPRIE 

10:00 am – 10:45 am

Overview: “Trading Carbon in California”   
Dr. Lawrence Goulder, Chair, Economics Department, Stanford University; Member, California Public Utilities Commission

10:45 am – 12:00 pm Panel

“Taiwan’s 2025 Carbon Reduction Goals: Options and Challenges” 
Dr. Robert J. Yang, Senior Advisor, Industrial Technology Research Institute

“A Synthesis of Energy Tax, Carbon Tax and CO2 Emission Trading System in Taiwan” 
Dr. Chi-Yuan Liang, Research Fellow, Institute of Economics, Academia Sinica & Professor, National Central University

“Measurement of Energy Efficiency in Taiwan and Relevance to CO2 Decoupling” 
Dr. Chung-Huang Huang, Dean, College of Transportation and Tourism, Kainan University and Professor, Department of Economics, National Tsing Hua University

1:00 pm Industry Uses

Moderator: Dr. Chin-Tay Shih, Dean of College of Technology Management, National Tsing-Hua University

1:00 pm – 1:45 pm

Overview: “Improving Energy Efficiency in Industry” 
Dr. Eric Masanet, Principal Scientific Engineering Associate, Energy Analysis Dept., Lawrence Berkeley National Laboratory

1:45 pm – 3:00 pm Panel

“Technology R&D and Industry Development of Distributed Energy System in Taiwan”
Dr. Hsin-Sen Chu, Executive Vice President, Industrial Technology Research Institute

“Energy Saving Potential and Trend Analysis in Taiwan” 
Dr. Jyh-Shing Yang, Senior Consultant, IEK/ITRI and Professor, National Central University

“Industrial innovation toward low carbon economy in Hsinchu Science Park”
Dr. Kung Wang, Professor, School of Management, National Central University, Taiwan

3:15 pm – 5:30 pm The Urban Environment: Buildings and Transportation

Moderator: Dr. William Miller, Co-Director, Stanford Program on Regions of Innovation and Entrepreneurship

Framing Remarks: Dr. Lee Schipper, Precourt Institute for Energy Efficiency, Stanford University

"Integrated management of energy performance of buildings, building portfolios, and cities"
Dr. Martin Fischer, Professor of Civil and Environmental Engineering, and Director, Center for Integrated Facility Engineering, Stanford University

“Challenges, priorities and strategies for energy efficiency in the electric car industry”
Mr. Fred Ni, General Manager, BYD America Corporation

"Urban Motorization in China: Energy Challenges and Solutions"
Ms. Wei-Shiuen Ng, Consultant, previously with World Resources Institute

Title TBA—delivered via video link
Mr. David Nieh, General Manager of Planning and Development, Shui On Land Corporation

 

Commentator: Dr. Fang Rong, Researcher, Center for Industrial Development & Environmental Governance, Tsinghua University

 

Day 2: Wednesday, February 18

8:00 am – 8:30 am Check-in and Continental Breakfast

8:30 am How IT Helps Green the Planet

Moderator: Dr. John Weyant, Deputy Director, Precourt Institute for Energy Efficiency

8:30 am – 9:00 am

“Challenges for Energy Efficiency Innovation and Convergence with Green Environmental Technology”
Dr. Simon C. Tung, General Director, Energy and Environmental Research Laboratories, ITRI

9:00 am – 10:00 am Panel: Two Perspectives on California Initiatives

“Demand Response: Time-differentiating technologies, rates, programs, metrics and customer behavior” 

Dr. Joy Morgenstern, California Public Utilities Commission

“The PG&E Smart Meter Program” 
Ms. Jana Corey, Director of AMI Initiatives, The Pacific Gas and Electric Co.

10:00 am – 10:30 am

Overview: “Behavioral Responses”
Dr. Carrie Armel, Research Associate, Precourt Institute for Energy Efficiency

10:45 a.m. – 12:00 p.m. A Conversation on IT’s Impact on Energy

Moderator: Professor Henry Rowen, Co-Director, Stanford Program on Regions of Innovation and Entrepreneurship

  • Dr. Banny Banerjee, Associate Professor, Mechanical Engineering, Stanford University
  • Dr. Sam Chiu, Professor, Management Science and Engineering, Stanford University 
  • Dr. Hsin-Sen Chu, Executive Vice President, Industrial Technology Research Institute
  • Dr. Lee Schipper, Precourt Institute for Energy Efficiency, Stanford University

1:00 p.m. – 3:00 p.m. Operating in the Cleantech Space

Moderator: Dr. Craig Lawrence, Accel Partners

  • Mr. Mike Harrigan, VP Business Development, Coulomb Technology (charging hardware and software infrastructure for electric vehicles)
  • Mr. David Leonard, CEO Redwood Systems (LED lighting management systems)
  • Mr. Frank Paniagua, Jr., CEO GreenPlug (intelligent DC charging for consumer electronics devices)

3:15 p.m – 4:30 p.m. A Venture Capital Perspective

Moderator: Dr. William Miller, Co-Director, Stanford Program on Regions of Innovation and Entrepreneurship

  • Mr. Maurice Gunderson, Senior Partner, CMEA Capital
  • Dr. Marc Porat, CEO, Calstar Cement
  • Dr. Marianne Wu, Mohr Davidow Ventures

    Bechtel Conference Center

    Henry S. Rowen Moderator
    William F. Miller Moderator
    Marguerite Gong Hancock Moderator
    Workshops
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    Seema Jayachandran is an assistant professor in the Department of Economics at Stanford University. She is also a Faculty Research Fellow at the National Bureau of Economic Research (NBER), and a Research Affiliate of the Bureau for Research and Economic Analysis of Development (BREAD), Centre for Economic Policy Research (CEPR), and Stanford Center for International Development (SCID).

    Her research focuses on microeconomic issues in developing countries, including health, education, labor markets, and political economy. Her work has been published in the American Economic Review ("Odious Debt," on sovereign debt incurred by dictators), Journal of Political Economy ("Selling Labor Low," on labor market risk in India), and the Quarterly Journal of Economics ("Life Expectancy and Human Capital Investments," on increased education caused by declines in maternal mortality in Sri Lanka), and other journals.

    Her current projects are based in India, Nepal, and Zimbabwe. She also works on social issues in the United States. Previously she was a Robert Wood Johnson Scholar in Health Policy Research at the University of California, Berkeley. She also worked as a management consultant with McKinsey & Company in San Francisco. She earned a PhD and master's degree from Harvard University, a master's degree from the University of Oxford where she was a Marshall Scholar, and a bachelor's degree from MIT.

    Seminar summary:

    Seema Jayachandran's presentation focused on the problem of what to do about "odious debt" -- that is, debt lent to rogue regimes that ultimately must be borne and paid by successive (legitimate) governments. She asks to what extent the status quo can change so that lenders will not want to lend to illegitimate governments. Her solution lies in increasing the costs of lending to rogue regimes through a policy of loan sanctions. Adopting an ex ante posture, Jayachandran argues that interests rates for loans would move toward infinity if banks knew that future legitimate governments would repudiate the debts of past regimes, particularly if new governments would have the blessing of the international community to do so. The loan-sanctions solution addresses a challenge faced by the debt relief movement, which focuses on debt "overhang," which weakens a poor country's economy. Instead, loan sanctions focus on the notion that some debt is, simply, illegitimate. And while trade sanctions pose problems (Jayachandran mentions that trade sanctions are often easy to evade and hurt people more than government), loan sanctions prevent a sanctioned government from borrowing. Loan sanctions are also self- enforcing (e.g., a lender would not lend if that lender knew it was unlikely to be repaid). The author raised questions for debate about who or what international body would implement loan sanctions or policy, the problem of banks making short-term loans to dictators who pay, and defining bad behaviors narrowly (or broadly) enough so as to target rogue or illegitimate regimes.

    Encina Ground Floor Conference Room

    Seema Jayachandran Assistant Professor of Economics Speaker Stanford Univesity
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    Larry Diamond
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    Bush gave democracy promotion a bad name, Larry Diamond writes in Newsweek. The new administration needs to get it right.

    The new U.S. President will face more than one kind of global recession. In addition to the economic downturn, the world is suffering a democratic contraction. In Russia, awash with oil money, Vladimir Putin and his KGB cronies have sharply restricted freedom. In Latin America, authoritarian (and anti-American) populism is on the rise. In Nigeria, the Philippines and once again in Pakistan, democracy is foundering amid massive corruption, weak government and a loss of public faith. In Thailand, the government is paralyzed by mass protests. In Africa, more than a dozen fragile democracies must face the economic storm unprepared. And in the Middle East—the Bush administration's great democratic showcase—the push for freedom lies in ruins.

    In the past decade, the breathtaking democratic wave that swept the world during the final quarter of the 20th century reversed course. Making democracy work proved harder than bringing down authoritarian rule. And receptive peoples everywhere were alienated by the arrogance and unilateralism of President George W. Bush's approach, which associated "democracy promotion" with the use of force and squandered America's soft power. Advancing democracy abroad remains vital to the U.S. national interest. But the next president will have to craft a more modest, realistic and sustainable strategy.

    It's easy today to forget how far freedom has advanced in the past 30 years. When the wave of liberation began in 1974 in Portugal, barely a quarter of the world's states met the minimal test of democracy: a place where the people are able, through universal suffrage, to choose and replace their leaders in regular, free and fair elections. Over the course of the next two decades, dictatorships gave way to freely elected governments first in Southern Europe, then in Latin America, then in East Asia. Finally, an explosion of freedom in the early '90s liberated Eastern Europe and spread democracy from Moscow to Pretoria. Old assumptions—that democracy required Western values, high levels of education and a large middle class—crumbled. Half of sub-Saharan Africa's 48 states became democracies, and of the world's poorest countries, about two in every five are democracies today.

    This great shift coincided with an unprecedented moment of U.S. military, economic and cultural dominance. Not only was America the world's last remaining superpower, but U.S. values—individual freedom, popular sovereignty, limited government and the rule of law—were embraced by progressive leaders around the world. Opinion surveys showed democracy to be the ideal of most people as well.

    In recent years, however, this mighty tide has receded. This democratic recession has coincided with Bush's presidency, and can be traced in no small measure to his administration's imperial overreach. But it actually started in 1999, with the military coup in Pakistan, an upheaval welcomed by a public weary of endemic corruption, economic mismanagement and ethnic and political violence. Pakistan's woes exposed more than the growing frailty of a nuclear-weapon state. They were also the harbinger of a more widespread malaise. Many emerging democracies were experiencing similar crises. In Latin America and the post-communist world, and in parts of Asia and Africa, trust in political parties and parliaments was sinking dramatically, as scandals mounted and elected governments defaulted on their vows to control corruption and improve the welfare of ordinary people.

    Thanks to bad governance and popular disaffection, democracy has lost ground. Since the start of the democratic wave, 24 states have reverted to authoritarian rule. Two thirds of these reversals have occurred in the past nine years—and included some big and important states such as Russia, Venezuela, Bangladesh, Thailand and (if one takes seriously the definition of democracy) Nigeria and the Philippines as well. Pakistan and Thailand have recently returned to rule by elected civilians, and Bangladesh is about to do so, but ongoing crises keep public confidence low. Democracy is also threatened in Bolivia and Ecuador, which confront rising levels of political polarization. And other strategically important democracies once thought to be doing well—Turkey, South Africa and Ukraine—face serious strains.

    This isn't to say there haven't been a few heartening successes in recent years. Indonesia, the world's most populous Muslim country, has become a robust democracy nearly a decade after its turbulent transition from authoritarian rule. Brazil, under the left-leaning Luiz Inácio Lula da Silva, has also strengthened its democratic institutions while maintaining fiscal discipline and a market orientation and reducing poverty. In Africa, Ghana has maintained a quite liberal democracy while generating significant economic growth, and several smaller African countries have moved in this direction.

    But the combination of tough economic times, diminished U.S. power and the renewed energy of major authoritarian states will pose a stiff challenge to some 60 insecure democracies in Asia, Africa, Latin America and the former Soviet bloc. If they don't strengthen their political institutions, reduce corruption and figure out how to govern more effectively, many of these democracies could fail in the coming years.

    Part of the tragedy is that Washington has made things worse, not better. The Bush administration was right that spreading democracy would advance the U.S. national interest—that truly democratic states would be more responsible, peaceful and law-abiding and so become better contributors to international security. But the administration's unilateral and self-righteous approach led it to overestimate U.S. power and rush the dynamics of change, while exposing itself to charges of hypocrisy with its use of torture and the abuse of due process in the war on terror. Instead of advancing freedom and democracy in the Middle East, 2005 and 2006 witnessed a series of embarrassing shocks: Hamas winning in the Palestinian territories and Islamist parties winning in Iraq; Hizbullah surging in Lebanon and the Muslim Brotherhood surging in Egypt. After a brief moment of optimism, the United States backed away and Middle Eastern democrats grew embittered.

    The new American administration will have to fashion a fresh approach—and fast. That will mean setting clear priorities and bringing objectives into alignment with means. The United States does not have the power, resources or moral standing to quickly transform the world's entrenched dictatorships. Besides, isolating and confronting them never seems to work: in Cuba, for example, this policy has been a total failure. This does not mean that the United States should not support democratic change in places like Cuba, Burma, Iran and Syria. But it needs a more subtle and sophisticated approach.

    The best strategy would be to open up such places to the freer flow of people, goods, ideas and information. The next administration should therefore start by immediately lifting the self-defeating embargo on Cuba. It should offer to establish full diplomatic ties with Havana and free flows of trade and investment in exchange for a Cuban commitment to improve human rights. Washington should also work with Tehran to hammer out a comprehensive deal that would lift economic sanctions, renounce the use of force to effect regime change and incorporate Iran into the WTO, in exchange for a verifiable halt to nuclear-weapons development, more responsible behavior on Iraq and terrorism, and improved human-rights protection and monitoring. Critics will charge that talking to such odious governments only legitimizes them. In fact, engaging closed societies is the best way to foster democratic change.

    At the same time, the United States should continue to support diaspora groups that seek peaceful democratic change back home, and should expand international radio broadcasting, through the Voice of America and more specialized efforts, that transmits independent news and information as well as democratic values and ideas.

    In the near term, however, Washington must focus on shoring up existing democracies. Fragile states need assistance to help them adjust to the shocks of the current economic crisis. But they also need deep reforms to strengthen their democratic institutions and improve governance. This will require coordinated help from America and its Western allies to do three things.

    First, they must ramp up technical assistance and training programs to help the machinery of government—parliaments, local authorities, courts, executive agencies and regulatory institutions—work more transparently and deliver what people want: the rule of law, less corruption, fair elections and a government that responds to their economic and social needs. This also means strengthening democratic oversight.

    Second, we know from experience that these kinds of assistance don't work unless the political leaders on the receiving end are willing to let them. So we need to generate strong incentives for rulers to opt for a different logic of governance, one that defines success as delivering development and reducing poverty rather than skimming public resources and buying support or rigging elections. This will mean setting clear conditions that will have to be met before economic and political aid is doled out to governments.

    The third priority is to expand assistance to independent organizations, mass media and think tanks in these fragile states that will increase public demand for better governance and monitor what governments do. This means aiding democratic professional associations, trade unions, chambers of commerce, student groups and organizations devoted to human rights, women's rights, transparency, civic education, election monitoring and countless other democratic activities. Ordinary people must be educated to know their rights and responsibilities as citizens—and be ready to defend them.

    While Western countries have provided this kind of aid for more than two decades, economic assistance handed out at the same time has often undermined democracy efforts by subsidizing corrupt, abusive governments. Aid donors should thus strike a new bargain with recipients, telling them: if you get serious about containing corruption, building a rule of law and improving people's lives, we will get serious about helping you. Those that show a real commitment should get significant new rewards of aid and freer trade. Those unwilling to reform should get little, though the West should continue to fight disease and directly help people in dire need wherever they are.

    Finally, the new president should keep in mind the power of example. Washington can't promote democracy abroad if it erodes it at home. The contradictions between the rhetoric of Bush's "freedom agenda" and the realities of Abu Ghraib, Guantánamo, torture, warrantless surveillance and boundless executive privilege have led even many of the United States' natural allies to dismiss U.S. efforts as hypocritical. Thus the new president must immediately shut down Guantánamo and unequivocally renounce the use of torture; few gestures would restore American credibility more quickly. The United States should also reduce the power of lobbyists, enhance executive and legislative transparency and reform campaign-finance rules—both for its own good and for the message it would send.

    Make no mistake: thanks to the global economic crisis and antidemocratic trends, things may get worse before they get better. But supporting democracy abroad advances U.S. national interests and engages universal human aspirations. A more consistent, realistic and multilateral approach will help to secure at-risk democracies and plant the seeds of freedom in oppressed countries. Patience, persistence and savvy diplomacy will serve the next president far better than moralistic rhetoric that divides the world into good and evil. We've seen where that got us.

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