International Development

FSI researchers consider international development from a variety of angles. They analyze ideas such as how public action and good governance are cornerstones of economic prosperity in Mexico and how investments in high school education will improve China’s economy.

They are looking at novel technological interventions to improve rural livelihoods, like the development implications of solar power-generated crop growing in Northern Benin.

FSI academics also assess which political processes yield better access to public services, particularly in developing countries. With a focus on health care, researchers have studied the political incentives to embrace UNICEF’s child survival efforts and how a well-run anti-alcohol policy in Russia affected mortality rates.

FSI’s work on international development also includes training the next generation of leaders through pre- and post-doctoral fellowships as well as the Draper Hills Summer Fellows Program.

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Alex Thier
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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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This paper presents empirical evidence on a specific mechanism through which demographic transition affects economic growth. The evidence provides support for the models of demographic transition emphasizing the demand for children. Using a panel of African countries during 1985-2000, I show that the AIDS epidemic effects the total fertility rates positively and the school enrollment rates negatively. These patterns are consistent with the theoretical models that argue the existence of a precautionary demand for children in the face of uncertainty about child survival. Parents, who are faced with a high mortality environment for young adults, choose to have more children and provide each of them with less education, leading a reversal in the fertility transition and a reduction in the aggregate amount of human capital investment. The empirical estimates show that a country that has witnessed the average increase in AIDS incidence for Africa, have 0.8 more births and 30 percentage points less primary school enrollment since 1985. The results imply lower economic growth and welfare for the current and future African generations.

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CDDRL Working Papers
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This paper examines two related questions: what effects do infectious diseases exert on growth and development, and are they quantitatively important? We present evidence on the effect of health and infectious diseases on economic development using Hansen's (2000) endogenous threshold methodology. Taking into account various proxies for infectious diseases as potential threshold variables we show that countries are clustered in regimes that obey different growth paths and thus provide direct evidence of threshold effects. Motivated by this evidence we propose an epidemiological overlapping generations model where the transmission and incidence of an infectious disease depend upon economic incentives and rational behavior. The economic cost of the disease comes from its effect on mortality (infected individuals can die prematurely) and morbidity (lower productivity and/or lower flow of utility from a given consumption bundle). Our main theoretical finding is that if infectious diseases are particularly virulent or debilitating, growth- or development-traps are possible. Numerical results from a calibrated version of the model show that threshold effects of diseases are quantitatively important and in particular, significant health interventions are required to propel disease addicted countries to a high-growth trajectory.

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The pace of policy reform is important in new democracies, where the status quo policies, established by non-democratic regimes, may be far from the preferences of popular majorities. Slowing policy reform slows down governmental implementation of democratic policy mandates. This, in turn, may offset (at least partly) the positive effects of broader participation and greater accountability.

Whether the net impact of procedural reform is to accelerate or to slow policy reform depends on the particular procedures involved, and the political context. In this paper, the authors consider a procedure that, on the surface, appears likely to accelerate reform, thereby promoting change in the policy status quo. This is a sunset rule.

This paper focuses on the sunset rule adopted in South Korea, at the end of the Kim Young Sam administration. Kim's support for the sunset rule at the end of his term is puzzling. Why would a lame duck president support a rule that would seem to limit the life of the regulations passed in his own term?

Jeeyang Rhee Baum, is Assistant Professor of Political Science at the University of California, San Diego. She earned her Ph.D. in political science at the University of California, Los Angeles. Her research interests include comparative political institutions, administrative law, and bureaucracies with a particular emphasis on East Asia. Her most recent publications include: "Presidents Have Problems Too: The Logic of Intra-branch Delegation in East Asian Democracies", British Journal of Political Science (forthcoming) and "Breaking Authoritarian Bonds: The Political Origins of the Taiwan Administrative Procedure Act", Journal of East Asian Studies.

Philippines Conference Room

Jeeyang Baum Assistant Professor Speaker University of California, San Diego
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We provide a simple framework relating cultural distance, genetic distance and differences in income per capita. We estimate the model empirically by regressing current income differences between pairs of countries on measures of geographical and genetic distance ("coancestor coefficients"). We find a significant effect of genetic distance on income differences, while geographical distance (i.e., geodesic distance between major cities) is negative and insignificant when genetic distance is controlled for. Differences in latitude across countries help explain income differences even when genetic distance is controlled for, which is consistent with Jared Diamond's hypothesis regarding a Eurasian advantage in development. We uncover similar patterns of coefficients for differences in human capital, institutions, population growth, and investment rates. Finally, we estimate the structural effects of differences in institutions, human capital, population growth, and investment rates on differences in income per capita using our set of geographic and genetic distances as instruments. Overall, our findings support the view that environmental and cultural barriers play an important role in the diffusion of innovations and development across countries.

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Alina Mungiu Pippidi holds a PhD in Social Psychology from the University of Iasi, Romania. She is a Professor of Political Communication at the Romanian National School of Government and Administration, a consultant for the World Bank and UNDP in Romania, and the Director of Romanian Academic Society. She is a former Shorenstein Fellow of Harvard University and Fellow of the World Academy of Art and Science. She has authored many books and articles on the Romanian transition, post-Communist political culture and nationalism.

Encina Ground Floor Conference Room

Alina Mungiu-Pippidi Professor of Political Communication
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Since the 1980s, simultaneous trends in Taiwan toward globalization and localization have contributed to people's construction of a past promoting local solidarity. Such rewriting of Taiwanese consciousness has relied heavily on a "rediscovery" of cultural traditions corresponding to Pingpu identity. (Pingpu identity is debated as an indigenous or a mestizo identity and used to claim that Taiwan is not Chinese.) Professor Pans examination of the development of Pingpu identity over the past ten years focuses on the 1996 event "We are All Pingpu" and uses both ethnographic and historical materials to analyze the role of Pingpu identity in rewriting Taiwanese conscious-ness.

Dr. Pan's research addresses the following questions: Who are the Pingpu? Why do some Taiwanese choose to be identified as Pingu while others do not? What is the significance of Pingpu identity for present-day Taiwanese consciousness? How has Pingpu identity been constructed? How and why do people rewrite the past when an identity is being created?

This is the final seminar in the Taiwan Seminar Series hosted by Shorenstein APARC.

Okimoto Conference Room

Inghai Pan Institute of Ethnology, Academia Sinica, Taipei,Taiwan
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In the coming years, few if any countries will more preoccupy the foreign policy attention of the United States than Iran. The United States has long lacked a viable and coherent policy toward Iran. Perhaps for the first time since the fall of the Shah's regime in 1979, the United States seems determined to try to forge one. The United States must move swiftly to chart a bold, new course that addresses all three of America's principal national interests with Iran. Our policy should seek to halt the development of an Iranian nuclear bomb, to end the regime's support of terrorist groups, and to help the democratic movement in Iran. Each of these goals is vital, but they are also intertwined. Compared to autocracies, democracies are more transparent about their foreign policy intentions and their military capabilities. Only when we have a government in Iran that is truly accountable to its people and to the rule of law will we be able to achieve a permanent and verifiable halt to that country's pursuit of nuclear weapons and its support of international terrorism.

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Hoover Institution Press
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Michael A. McFaul
Larry Diamond
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Among the different types of capital resources, venture capital as practiced in Silicon Valley is broadly acknowledged as being an important constituent of a high technology, entrepreneurial habitat. In the past two decades, policy makers from different regions have learned much from its experience.

The IT industry attributes its success partly to venture capital investments in early, risky, stages. Looking ahead, other industries will emerge in the knowledge economy. Within Taiwan and Mainland China, information related industries still dominate investment, yet in Silicon Valley emerging industries including biotechnology, medical instruments and nanotechnology have recently been attracting as much venture capital as the IT industry.

Today, venture capitalists from Silicon Valley and Taiwan are probing what they perceive as growing investment opportunities in Mainland China, On the other hand, the immaturity of its private equity market and the undeveloped state of exit mechanisms there is causing venture capitalists to hesitate to made large investments. Currently, Taiwan's venture capital faces low price-earnings ratios in its 1,400 publicly listed companies. This has contributed to a decline in VC investment. The Taiwan government expects to further liberalize the financing environment to bolster it as a regional center for domestic and international corporations.

This conference will address the influence of the system of capital on regional innovation and entrepreneurship in the United States, Taiwan, and Mainland China. The focus will be on the venture capital industry, corporate venturing and other institutions of capital related to regional industrial development.

Here are some questions to be addressed in this conference:

  • What is the pattern of venture capital investing in high-tech start-ups in the Greater China Area?
  • What are the trends in this industry?
  • How, specifically, does venture capital promote innovation and entrepreneurship?
  • What are the similarities among independent venture capital funds, corporate venture funds, angel funds, and commercial bank involvements?

Conference Organization

Conference Chairman

  • Dr. Chintay Shih, Dean of College of Technology Management, National Tsing Hua University, and Special Advisor, Industrial Technology Research Institute

Co-chairmen

  • Dr. Paul Wang, Chairman, Taiwan Venture Capital Association
  • Dr. Henry Rowen, Co-director, SPRIE
  • Dr. William Miller, Co-director, SPRIE

Executive Director

  • Dr. Sean Wang, Director General of Industrial Economics and Knowledge Center in Industrial Technology Research Institute

Conference Secretariat

  • Industrial Economics and Knowledge Center, Industrial Technology Research Institute (IEK/ITRI)

Conference Organizing Secretariat

  • ITRI: Yi-Ling Wei, Peter Lai, Frank Lin, Shu-Chen Huang
  • TVCA: Teresa Yang, Michael Chen, Riva Su
  • SPRIE: Marguerite Gong Hancock (Stanford)/Martin Kenney (UC Davis)

Auditorium, The Grand Hotel,
1 Chung Shan N. Road, Sec. 4, Taipei, Taiwan

Conferences
Authors
Michael A. McFaul
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It remains painfully true, more than three years after Sept. 11, that even highly educated Americans know little about the Arab Middle East. And it is embarrassing how little our universities have changed to educate our nation and train experts on the wider Middle East.

For believers in a good liberal arts education, it has long been a source of consternation that faculties in political science, history, economics and sociology lack scholars who know Arabic or Persian and understand Islam. Since Sept. 11 it has become clear that this abdication of responsibility is more than an educational problem: It also poses a threat to our national security.

The case for bolstering faculty and curriculum resources devoted to the Muslim Middle East is, of course, obvious from an educational perspective. The region is vast. Islam represents one of the world's great religions and provides not only an intellectual feast for comparative study in the social sciences and humanities but also an indispensable comparison and contrast for more familiar religions and ways of life. Particularly in the era of globalization and the information revolution, there is little excuse for universities' continuing to betray the liberal ideal of educating students in the ways of all people.

Our national security interest in this area should also be obvious. As in the Cold War, the war against Islamic extremism will not be won in months or years but in decades. And as in the Cold War, the non-military components of the war will play a crucial role.

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