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.

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The international law rules governing "indirect" expropriations of property reveals a tension between the interest, on one hand, of protecting rights of foreign property owners and investors and, on the other hand, the interest of protecting the sovereign authority of states to regulate in further of public welfare goals. The tension is embodied in the formal doctrine. Thus, a state is responsible under international law for regulation that unreasonably interferes with the foreign owner's enjoyment of his or her property. At the same time, however, the doctrine recognizes that regulation "commonly accepted as within the police power of states" does not give rise to liability for a regulatory taking.

International courts and tribunals are reluctant explicitly to substitute their judgment for that of sovereign state parties before them with regard to the legitimacy of or justification for the particular police power goals those states have decided to pursue through a given regulatory measure. This results in artificially truncated approaches to indirect expropriation cases. In some cases, tribunals focus only on the effect of a regulatory measure on the owner, without regard to the state's purpose. More recent developments in state practice suggest that whenever a state claims a public welfare purpose for regulation, it will not constitute an indirect expropriation of property.

Nevertheless, implicit in the decisions of international tribunals and the practice of states in negotiating property claims settlements is a normative assessment of the legitimacy of the particular police power or public welfare purposes to be served by a particular regulatory measure. These implicit assessments have been keyed not to the socio-political standards of the state adopting the regulation, but to international standards. As such, the question of whether a regulatory measure constitutes an indirect expropriation under international law will depend in part on the extent of international acceptance of the particular substantive public welfare purposes a regulatory measure seeks to advance. Future scholarship should evaluate decisions of international tribunals and state practice to develop clearer and more explicit guidelines on the question of which classes or categories of regulatory purposes are accepted by both developed and developing states as requiring property owners to bear the costs or regulation, and which require the state to provide compensation.

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International Law Forum (Du Droit International)
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Who is Vladimir Putin?

Since the rise to power in Russia of this obscure bureaucrat and former KGB agent in the fall of 1999, two groups in the West have answered this question very differently.

For some bankers, investors and diplomats, Russian President Vladimir Putin was a godsend. On his watch, Russia's 1998 devaluation and rising oil prices began to fuel economic growth for the first time since the collapse of the Soviet Union. If not personally responsible for the turnaround, Mr. Putin did initiate reforms designed to sustain it over the long haul. He replaced the personal income tax with a 13% flat tax, cut corporate taxes, balanced the budget, paid foreign debts, legalized land ownership, supported the restructuring of the big monopolies, and even began to tackle sensitive social services reforms. Compared with the last years of Boris Yeltsin, Mr. Putin looked like a dedicated proponent of capitalism.

In parallel to this storyline of Vladimir Putin as hero, a more sinister subplot emerged. As liberal tax reforms sailed through the Russian parliament, Mr. Putin's team was implementing illiberal political changes. During the Putin era, all national television networks effectively came back under the state control. The closing of TVS last month was the final blow. Russian soldiers have continued to abuse the human rights of Russian citizens living in Chechnya. (To be sure, Chechen fighters have practiced similar inhumane tactics, but two wrongs don't make a right.) Human rights organizations have been harassed, journalists imprisoned, and Western aid workers thrown out of the country. Of course, Mr. Putin personally rarely intervened in these rollbacks of democracy. But that's the point: he did nothing to stop these obvious steps toward authoritarian rule.

These two Vladimir Putins -- economic reformer and democratic backslider -- have lived side-by-side without meeting. Business people brushed aside the crackdown on the media as a necessary response to the anarchy unleashed during the Yeltsin era. The apologists claim Vladimir Gusinsky and Boris Berezovsky, the two media magnates who were forced to flee the country to avoid jail, got what they deserved: Mr. Putin wasn't suppressing freedom of the press, only limiting the power of corrupt oligarchs. Some bold voices in the business community even championed interim dictatorship in Russia as the only way to provide the stability for investment and economic growth.

For their part, critics of Mr. Putin's anti-democratic policies undermined the punch of their analysis by exaggerating the Russian president's ruthlessness and failing to recognize his accomplishments in other sphere. They cast Mr. Putin as a new dictator who has more in common with Stalin than Boris Yeltsin or Mikhail Gorbachev.

Last week, the arrest of billionaire Platon Lebedev brought the two Vladimir Putins together. Mr. Lebedev runs Menatep, the bank for the Yukos financial-industrial group headed by Mikhail Khodorkovsky, Russia's richest man. Like Mr. Lebedev and others in the Yukos-Menatep organization, he made his fortune by using personal relationships with government bureaucrats to acquire state assets -- in this case, oil and mineral companies -- for a song.

When Mr. Putin first came to power, many billionaires worried the new Russian president would redistribute property rights once again, this time to a new set of cronies. Instead, Mr. Putin implicitly offered the oligarchs a deal: you keep what you had before as long you run your companies without looking for government handouts and get out of politics.

Unlike Vladimir Gusinsky or Boris Berezovsky, Mr. Khodorkovsky eagerly accepted this bargain. He and his team kept out of jail and built Yukos into one of Russia's most profitable, most transparent, and most Westernized companies. He grew to be first among equals among Russia's other oligarchs. He also began to operate differently than the rest, establishing his own foundations, charitable causes, and think tanks. In this election year, he also openly donated money to two of Russia's largest political parties, Yabloko and the Communists. Mr. Khodorkovsky calculated that all this fell within the bounds of the implicit pact between the Putin administration and the oligarchs.

Last week's arrest, and the police questioning of Mr. Khodorkovsky, suggest that the Russian president interprets the pact differently. Mr. Khodorkovsky's economic power and political ambitions threatened Mr. Putin. So the president changed the rules of the game. Economic deals of the past once thought to be beyond scrutiny are now suddenly in question. If there are now new rules, then the alleged claim against Mr. Lebedev -- that he illegally acquired assets in the 1994 privatization of the Apatit fertilizer company -- or similar ones, could be leveled against nearly every businessman who operated in Russia since the early 1990s.

If these new informal rules are being remade to scare Mr. Khodorkovsky away from politics, then the arrest of Platon Lebedev is even more sobering. It means that Russians are not allowed to try to influence electoral outcomes -- an essential feature of even the most minimal democracy. Of course, oil tycoons should not be allowed to deploy their financial resources to skew the electoral playing field. But the enforcement of campaign finance laws is the tool that most democracies use to address this problem, not random arrest.

Arbitrary rule by the state is not only undemocratic. It's bad for business. A state that isn't constrained by checks and balances, the rule of law, the scrutiny of an independent media, or the will of the voters is unpredictable at best, predatory at worst. Two weeks ago, Mr. Lebedev probably would have argued that President Putin's economic accomplishments outweighed its democratic failures. Today, he probably has a different view. So should the rest of us.

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Wall Street Journal (Europe)
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Michael A. McFaul
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George W. Bush wants Americans and the world to believe that the fall of Saddam Hussein's regime two months ago represented a defeat for tyranny and a victory for liberty. No one has devoted more words to framing regime change in Iraq in these terms than the president.

In the debate leading up to the war, Mr. Bush and his administration focused primarily on Iraq's acquisition of weapons of mass destruction and the threat they posed to the US to justify military action. After military victory, however, Bush has emphasized the larger objective of promoting liberty in Iraq and the greater Middle East, especially because the search for weapons of mass destruction has produced such limited results. This mission statement for Iraq echoes convictions Bush stressed in every major foreign policy speech given since Sept. 11.

The president, however, has one big problem in pursuing this foreign-policy agenda. Few believe he is serious. Around the world, many see an imperial power using its military might to secure oil and replace anti-American dictators with pro-American dictators.

At home, isolationists in both the Republican and Democratic parties shudder at the folly of another Wilsonian mission to make the world safe for democracy.

Both at home and abroad, observers of Bush's foreign policy are confused by the mixed messages it sends. Was the war against Iraq undertaken to eliminate weapons of mass destruction or to spread liberty?

Bush faces an even more daunting challenge in making his commitment to democracy-promotion credible - the perception of hypocrisy. Bush has shown more concern for bringing freedom to Afghanistan and Iraq than to Pakistan or Saudi Arabia.

If Bush is truly committed to a foreign-policy doctrine of liberty-promotion, none of these criticisms is insurmountable. But they must be addressed. Especially now, with end of war in Iraq, what Bush says and does will define the true contours of his foreign-policy doctrine. Is it a liberty doctrine? Or does the language of liberty camouflage ulterior motives?

We will know that Bush is serious about promoting liberty if he credibly commits to four important tasks.

First, and most obviously, he must devote intellectual energy and financial resources to securing new regimes in Afghanistan and Iraq that, if not full-blown democracies, at least show the potential for democratization over time. To date, the record of achievement in both places is spotty. Bush has to keep these two countries at the top of his agenda, making regime construction as important as regime destruction. If democratizing regimes do not take hold in these countries, then Bush has no credibility in promoting liberty elsewhere.

Second, if Bush is serious about his stated mission, then he must give more attention to developing, funding, and legitimating the nonmilitary tools for promoting political liberalization abroad. The Marines cannot be used to promote democratic regime change in Iran, Saudi Arabia, Russia, or Uzbekistan. Wilson had his 14 points and Truman his Marshall Plan. Kennedy created the Alliance for Progress and the Peace Corps. Reagan started the hugely successful National Endowment for Democracy. Bush needs to lend his name to similar grand initiatives.

Third, in future speeches, Bush must flesh out the next phase of his liberty doctrine by explaining his priorities. Even the most powerful country in the world cannot bring liberty to every person living under tyranny all at once. But the president does owe the American people and the world a clearer game plan. It is no accident that Bush has given top priority to promoting democratic regime change in places where autocratic regimes were also enemies of the US. Fine, but what principles guide the next moves? There are also countries in which the promotion of political liberalization at this time could actually lead to less freedom, not more. What are the criteria being used to identify such places? To win supporters to his mission, Bush must present a rationale for the next phase of democracy promotion.

Fourth, even if the US does not have the capacity to promote freedom everywhere all the time, the president can make his commitment to liberty more credible if he develops a consistent message about his foreign-policy objectives, no matter what the setting. Words matter. Advocates of democracy living under dictatorship can be inspired by words of support from an American president. They can also become frustrated and despondent when the American president refrains from echoing his liberty doctrine when visiting their country. For instance, Bush's failure to speak openly about democratic erosion on his recent visit to Russia was a big disappointment to Russian democrats.

Some will always believe that the US is just another imperial power, not unlike the old Soviet Union, Britain, France, or Rome, exploiting military power for material gains. But for others of us who want to believe that the US has a nobler mission in the world, we are waiting on the president to give us signs of a long-term credible commitment to promoting liberty abroad.

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Christian Science Monitor
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Michael A. McFaul
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A short while ago, one of the worlds most brutal and entrenched dictatorships was swiftly toppled by the military force of the United States and the United Kingdom. The 2003 Iraq war was launched to disarm Saddam Hussein, but for many of its advocates and supporters, the more compelling aim was to bring about regime change. In fact, the goal is not simply regime change but a sweeping political transformation in that country  and, it is hoped, in states throughout its neighborhood  towards what has never existed there before: democracy.

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Policy Review
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Larry Diamond
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To most analysts of international affairs, whether based in London, Moscow or Washington, President Vladimir Putin's behavior during the run up to the U.S.-led war in Iraq was very predictable. From a classic realpolitik perspective, Putin behaved rationally. Russia had concrete interests in the preservation of the status quo in Iraq, and U.S. military intervention threatened those interests.

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Moscow Times
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Michael A. McFaul
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Following the successful migration of semiconductor foundries business to Taiwan, IC design houses are now flowing to Asia. As a result, the opportunities for venture capital investments in Greater China are increasing. Based on on-the-ground experience gained during the past ten years dealing with high-tech venture businesses between Silicon Valley and Asia, Jesse Chen will share his unique perspective on the changing dynamics of risks, timing, business sectors etc. for optimizing investments in the high tech industry in Greater China.

Jesse Chen is managing director of Maton Venture. Maton is a global venture with strategic investors and VC partners from the U.S., Europe, Japan, and Taiwan. Launched in October 1997, Maton now has thirty-two portfolio companies across Semiconductor, Communication, Software and other Information Technology industries. As of December 2002, three have gone public and five have been acquired. Jesse currently serves as board member for eleven companies.

Before Maton, Jesse co-founded BusLogic, Inc. in 1988 and served as CEO and president until it was acquired in 1996. BusLogic designed and marketed ASIC, Board and Software for the computer storage industry. Under Jesse's leadership, BusLogic achieved twenty-two quarters of consecutive growth and profitability, yielding BusLogic's first investor more than sixty times return of investment within six years. BusLogic is now part of IBM.

Jesse also served as chairman of the Global Monte Jade Science and Technology Association from 1998 to 2000 and served as Chairman of Monte Jade West from 1997 to 1998. Monte Jade has more than one thousand high tech corporate members throughout North America and Asia and more than fifty are public companies.

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Jesse Chen Managing Partner Maton Venture
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Encina Hall Ground Floor Conference Room E008

Andreas Wimmer Speaker
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Seeking to tap the huge potential of Greater China, many in Asia seek to replicate the Silicon Valley model. Yet, as much art as it is science, successful VC investing has proven to be uneven in Asia. Why? With respect to innovation, why is it that Asians have good reputations for replicating but not creating cutting edge technology? Is there a disconnect when this is compared to the experiences of U.S. high-tech icons, such as Intel and Apple, filled with Asian-born -- and in many cases educated -- scientists and businessmen? How does the Silicon Valley experience track with Singapore's determined efforts to promote creativity? What lessons, if any, are applicable to Greater China? With respect to entrepreneurship in Greater China, it is clear that Hong Kong, Taiwan and the Mainland are full of hard-driving individuals seeking to build wealth and prosperity. However, in some ways, is there perhaps an overabundance of entrepreneurship? Are there too many in this part of the world who want to be in charge and too few to follow and implement? How can a more productive form of entrepreneurship be fostered?

About the speaker
Dr. Ta-lin Hsu is chairman and founder of H&Q Asia Pacific (H&QAP), a premier private equity firm investing in Asia and the U.S. since 1985. Through ten offices in the region, H&QAP invests in a variety of high-growth sectors, including technology, biotech, financial services, media and branded consumer products. H&QAP manages sixteen funds with approximately $1.6 billion in assets invested in over 250 portfolio companies. Three of these funds comprise $1.1 billion in assets and invest on a diversified basis across the Asia Pacific region while the remaining thirteen funds are country funds.

Dr. Hsu holds numerous advisory positions with governmental and industry organizations. He was a founding member of the prestigious Technology Review Board of Taiwan, a group established to advise the Executive Yuan on all technology matters. Dr. Hsu was also a founder of the Monte Jade Science & Technology organization, the premier nonprofit organization promoting technology exchange between Taiwan and the U.S. He was also a founder and first president of the Bay Area Chapter of the Chinese Institute of Engineers, the largest Chinese-American engineering society in the U.S.

Dr. Hsu received his Ph.D. degree in electrical engineering from the University of California, Berkeley following a M.S. in electrophysics from the Polytechnic Institute of Brooklyn and a B.S. in physics from National Taiwan University. He was a staff scientist at Allied Chemical for two years before joining IBM Research Laboratories in 1973. Dr. Hsu worked at IBM for twelve years, reaching the position of senior manager in the research division -- with corporate responsibility for advanced research and development of mass storage systems and technology -- before joining Hambrecht & Quist as a general partner in 1985.

Dr. Hsu is an Advisory Board Member of the the University of California, Berkeley, Haas School of Business, a member of the Council on Foreign Relations, and a member of the Board of Trustees of the Asia Foundation.

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Dr. Ta-Lin Hsu Chairman and Founder Hambrecht & Quist Asia Pacific
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For nearly a century, political scientists have developed typologies and models of political parties in an effort to capture the essential features of the partisan organizations that were the objects of their analysis. The end result is that the literature today is rich with various categories of party types, some of which have acquired the status of 'classics' and have been used by scholars for decades (e.g. Duverger, 1954; Kirchheimer, 1966; Neumann, 1956). We believe, however, that the existing models of political parties do not adequately capture the full range of variation in party types found in the world today, and that the various typologies of parties, based on a wide variety of definitional criteria, have not been conducive to cumulative theorybuilding. This article, therefore, is an attempt to re-evaluate the prevailing typologies of political parties, retaining widely used concepts and terminology wherever possible, consolidating and clarifying party models in some cases, and defining new party types in others. This is for several reasons.

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Party Politics
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Larry Diamond
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