Publications by Type: Newspaper Article

2006
Christia, Fotini, and Sreemati Mitter. 2006. “Hamas at the Helm”. Publisher's Version Abstract

Nablus, West Bank

THE crescent has risen. The militant Islamic group Hamas won an astonishing 76 of 132 seats in the Palestinian legislative elections this week. The United States and the European Union must finally recognize Hamas's ascendance as a fait accompli.

Until now, these key third parties have equivocated: they pressed Israel to allow Hamas to participate in the elections but threatened to cut aid and ties to a Hamas-dominated Palestinian Authority. The practical reality, however, is that Hamas is a pivotal player in Palestinian politics, and no peace process can succeed without at least the tacit acceptance of its leaders. Moreover, Hamas's participation in Palestinian politics is not necessarily a bad thing, and resisting it will very likely do more harm than good.

As a political party, Hamas revealed itself to be disciplined, pragmatic and surprisingly flexible. It fielded well-regarded candidates, including doctors and academics. In some cases, Hamas aligned itself with independents once affiliated with the secular Fatah party. And although the Hamas charter calls for the destruction of Israel and the liberation of Palestine “from the river to the sea,” the party's campaign manifesto made no mention of these goals.

Instead, when asked about making peace with Israel, Hamas representatives offered nuanced, if evasive, answers. As Ziad Daiah, a Hamas representative in Ramallah, told us: “We are not interested in the Oslo-type peace process that went on for 10 years and wasted time. But if Israel will start new negotiations, with direct benefits for Palestinians in a useful time frame, we will accept that.”

Judging from the thousands of green posters plastered around the West Bank and Gaza, external matters like the peace process were not central to Hamas's electoral agenda. Rather, its campaign focused on popular concerns like fighting corruption, establishing good governance and restoring the rule of law. Hamas's victory speeches have emphasized the need to revamp public services.

To be sure, we should be careful not to read too much into Hamas's electioneering. The Hamas charter retains poisonous language toward Israel, and the group has yet to renounce its views on the place of violence in the Palestinian resistance. And Hamas's Islamist agenda continues to alarm many secular Palestinians, even those who welcome its entry into politics.

Still, Hamas statements indicate that these attitudes are not set in stone. As Mohammed Ghazel, a Hamas leader in Nablus, told the Israeli newspaper Ha'aretz, “The charter is not the Koran.” And Hamas has done more than any other armed faction to honor the truce that President Mahmoud Abbas brokered in February. Although Israel continues to arrest its members, Hamas has done little to retaliate. Such restraint might have been an electoral strategy, but it still proves that if the incentives are right, Hamas can hold its fire.

In any case, the United States and Europe cannot trumpet democratic ideals abroad and then ignore the popular will of Palestinian voters, 78 percent of whom turned out for this election. Refusing to engage with Hamas, however skeptical one may be of its intentions, will only further legitimize the party; it could even give rise to violence. Moreover, cutting off aid to the Palestinian Authority, which is already in a fiscal crisis and enormously dependent on foreign aid, could bankrupt it, further destabilizing the region.

Hamas has indisputably become the force to be reckoned with in Palestinian politics. Even Israel seems to have awakened to this reality. A radio reporter recently asked Shimon Peres, the former Israeli prime minister, about negotiating with Hamas. “We are not fighting against a name,” he said. “We are fighting against a situation. If the situation changes, then what difference does a name make?”

If the Israelis are contemplating engagement, it's time the Americans and Europeans did, too.

Fotini Christia is a fellow at the Olin Institute for Strategic Studies at Harvard. Sreemati Mitter works for the Palestinian Initiative for the Promotion of Global Dialogue and Democracy in Ramallah, West Bank.

Ashbrook, Tom, and Amartya Sen. 2006. “Identity and Violence”. Publisher's Version Abstract

Nobel prize-wining economist Amartya Sen has long since looked beyond the numbers of development and growth and into the affairs of the human heart. What he sees there these days he finds deeply troubling.

From East to West, he warns, people around the world are being boxed into narrow, dangerous understandings of their own identity. Reduced from full and complex human beings to simply Muslim, Christian, Shiite, Sunni, Jew.

Sen has a bone to pick with Samuel Huntington's “Clash of Civilizations” thesis. It is the road to hell, he says. But maybe we were already on it.

Hear Nobelist Amartya Sen talk about identity, violence and what he calls the “illusion of destiny”.

Listen to On Point with Tom Ashbrook and Amartya Sen.

Amartya Sen is Lamont University Professor at Harvard University and a Faculty Associate at the Weatherhead Center for International Affairs.

Patterson, Orlando. 2006. “A Poverty of the Mind”. Publisher's Version Abstract

Cambridge, Mass.

Several recent studies have garnered wide attention for reconfirming the tragic disconnection of millions of black youths from the American mainstream. But they also highlighted another crisis: the failure of social scientists to adequately explain the problem, and their inability to come up with any effective strategy to deal with it.

The main cause for this shortcoming is a deep-seated dogma that has prevailed in social science and policy circles since the mid-1960's: the rejection of any explanation that invokes a group's cultural attributes—its distinctive attitudes, values and predispositions, and the resulting behavior of its members—and the relentless preference for relying on structural factors like low incomes, joblessness, poor schools and bad housing.

Harry Holzer, an economist at Georgetown University and a co-author of one of the recent studies, typifies this attitude. Joblessness, he feels, is due to largely weak schooling, a lack of reading and math skills at a time when such skills are increasingly required even for blue-collar jobs, and the poverty of black neighborhoods. Unable to find jobs, he claims, black males turn to illegal activities, especially the drug trade and chronic drug use, and often end up in prison. He also criticizes the practice of withholding child-support payments from the wages of absentee fathers who do find jobs, telling The Times that to these men, such levies “amount to a tax on earnings.”

His conclusions are shared by scholars like Ronald B. Mincy of Columbia, the author of a study called “Black Males Left Behind,” and Gary Orfield of Harvard, who asserts that America is “pumping out boys with no honest alternative.”

This is all standard explanatory fare. And, as usual, it fails to answer the important questions. Why are young black men doing so poorly in school that they lack basic literacy and math skills? These scholars must know that countless studies by educational experts, going all the way back to the landmark report by James Coleman of Johns Hopkins University in 1966, have found that poor schools, per se, do not explain why after 10 years of education a young man remains illiterate.

Nor have studies explained why, if someone cannot get a job, he turns to crime and drug abuse. One does not imply the other. Joblessness is rampant in Latin America and India, but the mass of the populations does not turn to crime.

And why do so many young unemployed black men have children—several of them—which they have no resources or intention to support? And why, finally, do they murder each other at nine times the rate of white youths?

What's most interesting about the recent spate of studies is that analysts seem at last to be recognizing what has long been obvious to anyone who takes culture seriously: socioeconomic factors are of limited explanatory power. Thus it's doubly depressing that the conclusions they draw and the prescriptions they recommend remain mired in traditional socioeconomic thinking.

What has happened, I think, is that the economic boom years of the 90's and one of the most successful policy initiatives in memory—welfare reform—have made it impossible to ignore the effects of culture. The Clinton administration achieved exactly what policy analysts had long said would pull black men out of their torpor: the economy grew at a rapid pace, providing millions of new jobs at all levels. Yet the jobless black youths simply did not turn up to take them. Instead, the opportunity was seized in large part by immigrants—including many blacks—mainly from Latin America and the Caribbean.

One oft-repeated excuse for the failure of black Americans to take these jobs—that they did not offer a living wage—turned out to be irrelevant. The sociologist Roger Waldinger of the University of California at Los Angeles, for example, has shown that in New York such jobs offered an opportunity to the chronically unemployed to join the market and to acquire basic work skills that they later transferred to better jobs, but that the takers were predominantly immigrants.

Why have academics been so allergic to cultural explanations? Until the recent rise of behavioral economics, most economists have simply not taken non-market forces seriously. But what about the sociologists and other social scientists who ought to have known better? Three gross misconceptions about culture explain the neglect.

First is the pervasive idea that cultural explanations inherently blame the victim; that they focus on internal behavioral factors and, as such, hold people responsible for their poverty, rather than putting the onus on their deprived environment. (It hasn't helped that many conservatives do actually put forth this view.)

But this argument is utterly bogus. To hold someone responsible for his behavior is not to exclude any recognition of the environmental factors that may have induced the problematic behavior in the first place. Many victims of child abuse end up behaving in self-destructive ways; to point out the link between their behavior and the destructive acts is in no way to deny the causal role of their earlier victimization and the need to address it.

Likewise, a cultural explanation of black male self-destructiveness addresses not simply the immediate connection between their attitudes and behavior and the undesired outcomes, but explores the origins and changing nature of these attitudes, perhaps over generations, in their brutalized past. It is impossible to understand the predatory sexuality and irresponsible fathering behavior of young black men without going back deep into their collective past.

Second, it is often assumed that cultural explanations are wholly deterministic, leaving no room for human agency. This, too, is nonsense. Modern students of culture have long shown that while it partly determines behavior, it also enables people to change behavior. People use their culture as a frame for understanding their world, and as a resource to do much of what they want. The same cultural patterns can frame different kinds of behavior, and by failing to explore culture at any depth, analysts miss a great opportunity to re-frame attitudes in a way that encourages desirable behavior and outcomes.

Third, it is often assumed that cultural patterns cannot change—the old “cake of custom” saw. This too is nonsense. Indeed, cultural patterns are often easier to change than the economic factors favored by policy analysts, and American history offers numerous examples.

My favorite is Jim Crow, that deeply entrenched set of cultural and institutional practices built up over four centuries of racist domination and exclusion of blacks by whites in the South. Nothing could have been more cultural than that. And yet America was able to dismantle the entire system within a single generation, so much so that today blacks are now making a historic migratory shift back to the South, which they find more congenial than the North. (At the same time, economic inequality, which the policy analysts love to discuss, has hardened in the South, like the rest of America.)

So what are some of the cultural factors that explain the sorry state of young black men? They aren't always obvious. Sociological investigation has found, in fact, that one popular explanation—that black children who do well are derided by fellow blacks for “acting white”—turns out to be largely false, except for those attending a minority of mixed-race schools.

An anecdote helps explain why: Several years ago, one of my students went back to her high school to find out why it was that almost all the black girls graduated and went to college whereas nearly all the black boys either failed to graduate or did not go on to college. Distressingly, she found that all the black boys knew the consequences of not graduating and going on to college ("We're not stupid!" they told her indignantly).

SO why were they flunking out? Their candid answer was that what sociologists call the “cool-pose culture” of young black men was simply too gratifying to give up. For these young men, it was almost like a drug, hanging out on the street after school, shopping and dressing sharply, sexual conquests, party drugs, hip-hop music and culture, the fact that almost all the superstar athletes and a great many of the nation's best entertainers were black.

Not only was living this subculture immensely fulfilling, the boys said, it also brought them a great deal of respect from white youths. This also explains the otherwise puzzling finding by social psychologists that young black men and women tend to have the highest levels of self-esteem of all ethnic groups, and that their self-image is independent of how badly they were doing in school.

I call this the Dionysian trap for young black men. The important thing to note about the subculture that ensnares them is that it is not disconnected from the mainstream culture. To the contrary, it has powerful support from some of America's largest corporations. Hip-hop, professional basketball and homeboy fashions are as American as cherry pie. Young white Americans are very much into these things, but selectively; they know when it is time to turn off Fifty Cent and get out the SAT prep book.

For young black men, however, that culture is all there is—or so they think. Sadly, their complete engagement in this part of the American cultural mainstream, which they created and which feeds their pride and self-respect, is a major factor in their disconnection from the socioeconomic mainstream.

Of course, such attitudes explain only a part of the problem. In academia, we need a new, multidisciplinary approach toward understanding what makes young black men behave so self-destructively. Collecting transcripts of their views and rationalizations is a useful first step, but won't help nearly as much as the recent rash of scholars with tape-recorders seem to think. Getting the facts straight is important, but for decades we have been overwhelmed with statistics on black youths, and running more statistical regressions is beginning to approach the point of diminishing returns to knowledge.

The tragedy unfolding in our inner cities is a time-slice of a deep historical process that runs far back through the cataracts and deluge of our racist past. Most black Americans have by now, miraculously, escaped its consequences. The disconnected fifth languishing in the ghettos is the remains. Too much is at stake for us to fail to understand the plight of these young men. For them, and for the rest of us.

Orlando Patterson, a professor of sociology at Harvard and a faculty associate of the Weatherhead Center for International Affairs, is the author of Rituals of Blood: Consequences of Slavery in Two American Centuries.

Two years ago Paulette Cole had a big idea that would alter the fundamental nature of her company. She not only wanted its furniture to be environmentally conscious; she wanted, to whatever degree possible, every chair, lamp and pillow sham to have social resonance beyond the cash-and-carry transaction, whether that meant the preservation of a dwindling rain forest or help for an impoverished, widowed weaver. So she called a meeting with her senior management and laid out a new business plan.

Not everybody was thrilled. “Some people thought my vision was flaky,” Ms. Cole said. A few staff members later chose to leave, she said, in “a natural peel-away of people who didn't understand that vision.”

“They didn't understand,” she said, “that we were in a position to create the demand.”

Ms. Cole's company isn't just the kicky little boutique that could. It is ABC Carpet and Home, the trendsetting Manhattan department store, which had nearly $80 million in sales last year, according to Hoover's business reports. It is where pricey Frette sheets share sales floors with French handmade chocolates and antique Chinese beds. But increasingly ABC shoppers can also buy jewelry made by Ugandan women afflicted with AIDS, ceramics whose proceeds go to foster schools in rural Guatemala and $1,000 gift certificates that help support Masai girls who refuse to undergo genital mutilation.

“Knowing that your investment in a product actually has a positive effect on somebody's life makes the design in your hands more important,” Ms. Cole, 46, ABC's president and chief executive, said recently at her engagingly funky Manhattan apartment, where breakfast is taken at an elaborately carved Anglo-Indian table in a stainless-steel kitchen. “My goal is for the store to be 100 percent responsible design.”

She may never reach that level, she admitted, but she said that 20 percent of ABC's stock now fulfills the goal. That's 3 percentage points more than last year, she explained, and it includes ambitious offerings like made-to-order solar energy systems and furniture with all-organic upholstery. The store's packing materials have been replaced with biodegradable alternatives, and all inks used in packaging and stationery are soy-based. A trailer from “An Inconvenient Truth,” the documentary that opened last night on Al Gore and his campaign about global warming, is shown on continuous loop on the second floor amid furniture made from sustainable materials.

The company promotes not only the ABC Home and Planet Foundation, which encourages people to “align their spending choices with their personal values,” but also its associations with 15 organizations including Doctors Without Borders and the Rainforest Action Network. As Home Furnishings News, an industry weekly, put it this week in its cover story about environmentally correct home products, ABC “has made social consciousness a mainstay of its business plan.”

Back in the 1990's, however, ABC was best known for its boho bling. Working with her husband and co-chief executive at the time, Evan Cole, Ms. Cole transformed the carpet business that her paternal great-grandfather founded in 1897 into a hippie-chic lifestyle destination. She was the engaging but somewhat reserved creative director; the flamboyant Mr. Cole attended to the bottom line and pumped up the publicity volume.

The huge display windows seemed decorated by Miss Havisham with help from Tim Burton, with piles of lovingly battered antiques and artfully dusty candelabra. Indoors was—and still is—an extravaganza of elegant flea-market finds (ormolu-encrusted headboards, Art Deco dressing tables) and boutiques leased to name-brand manufacturers (Harvey Electronics, Mitchell Gold furniture, Pratesi linens).

Profits soared, but the Coles's partnership took a beating. Two of their children died in infancy (the couple have a daughter, Lena, who is 11), and professional disagreements drove them further apart. Mr. Cole's eagerness to expand ABC's reach (a branch opened at Harrods in London in 1998) clashed with his wife's rising interest in making social issues an official company statement.

“Post-9/11, I took a leave of absence,” Ms. Cole said, adding diplomatically, “It was the most realistic scenario.” With her daughter often in tow, she went to Mexico, Morocco, Peru and points beyond, experiencing what she called “a different level of travel.” She sought out environmentalists, became involved in anti-hunger campaigns and studied poverty in the developing world. “I chose to look at things the business didn't allow me to experience,” she said.

Ms. Cole also began to see the possibility of using ABC as a soapbox for her causes. It was a vision her husband did not share. The couple divorced, and Mr. Cole sold her his shares in the family-owned company. He now lives in Los Angeles, where he founded H. D. Buttercup, a 100,000-square-foot home furnishings mall. Once Ms. Cole became the company's sole chief executive she began to steer it in a new direction.

Concerns over fair-labor issues and environmental responsibility are fast becoming part of the home furnishings world, but not all shoppers will become converts. As Marshal Cohen, the chief industry analyst at the NPD Group, a market research company in Port Washington, N.Y., and the author of “Why Customers Do What They Do” (McGraw-Hill) put it in a telephone interview, “In many cases the consumer is not overly responsive to philanthropic causes.”

“It's a big challenge convincing people that there's a good reason behind a higher price point,” Mr. Cohen said. “Often the most successful way to do that is through the lifestyle connection, to convince consumers to do the right thing or the healthy thing, which is why the fastest-growing segment of the beverage industry is organic milk.”

But according to a study of shoppers' behavior at ABC from June to November of last year, customers willingly paid up to 20 percent more for products bearing labels that cited a positive social impact—in particular, the use of fair labor practices in their manufacture. (The study, by Michael J. Hiscox, a government professor at Harvard, and Nicholas F. B. Smyth, a Harvard senior, compared purchases of similar products to see if the presence of the labels made any difference; they did.)

In a store like ABC, with affluent customers and a reputation for a commitment to social causes, Dr. Hiscox and Mr. Smyth wrote, the data showed that “firms that switch to labeled goods could charge between 10-20 percent extra and expect sales to rise, with stronger effects likely for luxury goods (like candles) than for normal goods (such as towels).”

Dr. Hiscox explained via e-mail on Tuesday that ABC was the focus of his study because Ms. Cole was “bold enough to participate in our study when other retailers would not, because they were worried about raising the labor standards issue with their customers.”

Ms. Cole may be raising the consciousness of ABC, but her concerns are not purely altruistic. “Beauty is the major criterion for me,” she said. “This isn't charity; this is commerce. If there's a product I fall in love with that doesn't have a socially redeeming value attached to it, I might not be able to resist it.”

And when that happens, she has a practical, unapologetic solution: “It just won't get a ‘Good Wood’ label.”

Michael J. Hiscox is a professor of government at Harvard University and a faculty associate of the Weatherhead Center for International Affairs.

Larry Summers's experience says much about what Harvard—and any great university—should look for in a president.

Summers was not forced out by a radical segment of the faculty of arts and sciences. He was not forced out because bold visions threatened a complacent faculty. Most faculty in arts and sciences are eager to reinvigorate undergraduate education, strengthen cutting-edge science, internationalize the university, develop the Allston campus, and encourage collaboration among the schools. Any president of Harvard at this time would have essentially the same goals.

Achieving such goals requires raw intelligence, which Summers has in abundance. But more crucial to leadership than IQ is the ability to inspire others with your vision and to help them come to see it as their vision, too. You must understand the culture of an institution even as you try to change it. Business Week wrote: “Summers joins the ranks of recent leaders brought in to generate change in organizations only to misfire and fail, [such as] Carly Fiorina at Hewlett-Packard.”

Giving orders goes only so far. As the late Richard Neustadt, America's premier student of the US presidency, put it: Presidential power is the power to persuade.

During his presidency, Summers planned the Allston campus and rationalized the budget, but failed to make progress toward his central academic goals. He came in with much political capital, but frittered it away on battles he did not need to fight. He alienated even those—from all disciplinary and ideological backgrounds—most committed to his goals and to Harvard.

Take one of Summers's highest priorities—reforming the undergraduate curriculum. Successful curricular reform requires that hundreds of instructors change their behavior in hundreds of classrooms that cannot be policed. The hard part about curricular reform is not finding the right answer, because there is no single right answer. The hard part is inspiring and persuading.

Harvard's justly famed (though now outdated) Core Curriculum of the 1970s succeeded not because of its rationale or rules, but because the process of reform itself reinvigorated an entire generation of instructors who (for several decades) then took teaching more seriously. Most Harvard faculty agree that our undergraduate education needs change, perhaps even radical change. But to forge a consensus out of many creative but discordant ideas requires deft leadership. That was what Derek Bok brought to the task then. That is the quality Harvard should seek now in its next president.

Bold statements and a forceful personality are not enough. Indeed, clumsily applied, boldness and forcefulness can lead to weakness. What was most dispiriting about Summers's final year to those who shared his values was that he relinquished the capacity to say no, even to bad ideas. “Superman is surrounded by kryptonite,” said one irrepressible colleague. “Now is the time to move.” Political correctness was not the root of the problem, and politically correct decisions could not solve it.

One especially misguided idea is that deans and presidents should be chosen by faculty. Harvard is already unduly decentralized, and faculty-chosen executive leadership is a recipe for blandness. Larry Summers understood that perfectly well, but having squandered political capital through four arrogant years, he acquiesced in unwise limits on presidential discretion. Harvard's next leader must have sufficient emotional and social intelligence to preserve the ability to say no.

Above all, the power to persuade depends on the capacity to maintain trust. Colleagues need to believe that leaders will not only act honorably but speak truthfully. Once a faculty comes to believe that their president is “less than truthful” (as a former dean reportedly said of this president), the basis for leadership of any kind has vanished.

Harvard is a strong university. Its faculties, including its Faculty of Arts and Sciences, want bold change. Professors do not agree on exactly what the changes should be. That is the nature of a great faculty—the more creative, the more likely to disagree. But Harvard faculty have followed strong leaders in the past, and they will follow them in the future. What Harvard needs now is a boldly reformist leader, but one who actually knows how to make reform happen.

Robert D. Putnam is the Malkin Professor of Public Policy at Harvard University and a member of the Executive Committee of the Weatherhead Center for International Affairs.

PERHAPS THE biggest surprise about this week's election results, in which the terrorist group Hamas won a majority of seats in the Palestinian parliament, is that it was a surprise to us at all. There are two main reasons why.

First, many in this country have fallen victim to the notion that if today's rogue states are bad neighbors, democratization will make them good neighbors. A central pillar of the current Bush administration's foreign policy is that dictators make bad neighbors. In other words, we can expect authoritarian governments to start wars and support terrorism more readily than democratic governments.

When the current US administration first took office, the security concern of the day was “rogue states,” a euphemism for Afghanistan, North Korea, Iraq, and Iran. After Sept. 11, the threat of rogue states morphed into the terrorist threat, along with the conviction that because these states were led by dictators, they would be more susceptible to terrorism and they would eventually have “to be dealt with.”

But apt as the characterization of these states might have been, and as troubling as they were to their respective neighbors, the corollary does not follow. It is not the case that democratic states necessarily make good neighbors on account of their form of government alone.

Japan is a democracy, but China does not rest easy on that account, even though Japan has no formal military to speak of, and even though pacifism is a part of its constitution. Democracies, even traditional allies, often don't see eye to eye; and historically they are as likely to start wars as dictatorships.

Second, most Americans buy into the romantic notion that “there are no bad people, only bad leaders.” By extension, giving power to the people must result in “good” policy. The trouble is, what is “good” depends on where you sit. If you live among the minority of states that are rich and getting richer, then war and violence are a bad idea: There is little to gain and everything to lose. If, however, you live among the majority of states that are poor and getting poorer, then war and violence seem a good idea: There is everything to gain and nothing to lose. Thus, as in Woodrow Wilson's day, exporting democracy is as useful for gaining domestic political support as it is destructive as foreign policy.

Logic notwithstanding, we have a real-world example of what happens when the people of a poor Islamic state are offered democracy. In the early 1990s, Algeria's government held democratic elections to head off widespread dissent and riots. The Islamic Salvation Front—the first legal Islamic political party in North Africa—worked hard to win. When the Algerian people were given a choice (twice), they chose the theocracy (twice), and the government of Algeria was toppled by a military coup that repudiated the election results and imposed martial law.

What can we learn from this?

First, the United States and its allies have the power to bring their own foreign policies in line with their professed democratic values. It may be difficult, but the United States must stop supporting military dictatorships simply because they are “allies in the war against terror.” The United States must also support Israel by pressuring it to concede to a genuine Palestinian state, while at the same time guaranteeing Israel's security.

Second, the more democratic Palestinians and Iraqis become, the less likely they are to support US strategic and economic interests. Israel is a strategic interest for the United States; but it is unlikely that given a choice, most people in the Middle East would accept Israel's right to exist. In other words, ideal election outcomes may not result in ideal foreign policy outcomes, from a US perspective.

Countering the popular appeal of groups such as Hamas requires controlling habitat, not population. Killing terrorists can't stop the violence until and unless you destroy the habitat that produces them. That in turn demands serious effort at providing basic needs, such as food, shelter, clean water, education, and healthcare.

Hamas has historically done much better at providing for the basic needs of Palestinian Arabs than the Palestinian Authority (Fatah). That's why Hamas won, and that's why, when seeking to export democracy, the United States and its allies must remain careful of what they wish for.

Monica Duffy Toft is an associate professor at the Kennedy School of Government and assistant director of the John M. Olin Institute of Strategic Studies at Harvard University.

Lamont, Michèle, and Éloi Laurent. 2006. “Le mal américain”. Publisher's Version Abstract

La presse américaine la plus féroce a chroniqué avec consternation et délice l'annus horribilis de la France, et c'est peu dire, que les réactions à l'épisode funeste du CPE ne furent pas tendres. Mais, dans le concert harmonieux des moqueries faciles, des critiques narquoises et des attaques virulentes (pas toutes injustifiées), une note dissonante s'est fait entendre. Alors que le New York Times avait fait paraître quelques jours plus tôt un article particulièrement fielleux à l'endroit du «modèle» français, certains de ses lecteurs, dont les opinions furent reproduites plus tard, ont réagit vigoureusement—en sens inverse. L'un des réfractaires, s'étonnant que les Américains eux-mêmes ne défilent pas dans les rues, s'indignait du fait que ses concitoyens aient accepté «sans broncher» au cours des années récentes «la disparition de la sécurité des emplois, la destruction du système des retraites et l'érosion des revenus au profit du 1% d'Américains les plus riches». Il accuse ces derniers d'avoir confisqué les fruits de la croissance économique.

Aussi sommaire que puisse paraître ce constat, il n'est pas très éloigné de la réalité qu'économistes et sociologues dévoilent, étude après étude, depuis dix ans. C'est l'économiste Edward Wolff qui, parmi les premiers, dans un ouvrage de 1995, attira l'attention de l'opinion américaine sur le creusement vertigineux des inégalités de revenu et de richesse depuis le milieu des années 80. Dans un article d'octobre 2002, s'appuyant en partie sur les travaux de Thomas Piketty et d'Emmanuel Saez, Paul Krugman exprimait même la crainte d'une régression collective vers les niveaux d'inégalité victoriens du «Gilded Age» («l'âge doré», et non «l'âge d'or», du début du XXe siècle). Il y a quelques mois, les recherches de Robert Gordon ont confirmé que cette tendance s'était encore accélérée dans la période la plus contemporaine, alors même que la productivité de l'économie américaine atteint des sommets. Au total, selon l'économiste de Northwestern, la croissance annuelle des revenus de 90% des Américains n'a été que de 0,3% depuis 1973, contre 3,4% pour les 1% les plus riches et 5,6% pour les 0,1% encore plus riches. Une des conséquences de ce retournement du progrès social est que les inégalités de revenus entre le PDG et le travailleur américain moyen sont passées d'un facteur 27 en 1973 à un facteur 300 en 2000.

Le problème crucial n'est pas seulement que les inégalités de revenu augmentent, c'est que la mobilité sociale qui les rend tolérables décline, comme le montrent plusieurs études, complexes et discutées, dans la période récente. L'accès de plus en plus difficile à une éducation supérieure, qui se privatise à tous les niveaux de sélectivité (droits d'inscription en hausse, financements publics en baisse), est au centre du blocage de l'ascension sociale et du caractère explosif de la dynamique inégalitaire. Parce que l'université fonctionne de moins en moins bien comme machine à redistribuer les cartes sociales, les classes se sédimentent progressivement, et la peur du déclassement, bien analysé par Barbara Ehrenreich, grandit.

Pour spectaculaires qu'ils soient, les écarts de revenu et d'éducation ne sont qu'une partie de l'iceberg d'inégalités que l'Amérique est en train de découvrir. Sous la plume de deux journalistes du New York Times, une série d'articles a montré l'année dernière comment les inégalités sociales conduisaient à des inégalités de santé et finalement de qualité de vie, la possibilité de pouvoir se faire soigner correctement et à temps impliquant des conséquences souvent irréversibles dans un pays où l'espérance de vie est effroyablement faible compte tenu du poids des dépenses de santé (parmi les plus élevées du monde). L'inefficacité du système n'explique pourtant pas tout de l'exclusion sociale. Les inégalités de santé sont encore aggravées par les codes et les structures culturels, qui laissent peu de place symbolique aux perdants sociaux. Et pourtant, dans le cadre d'un programme d'étude de la Russell Sage Foundation, la sociologue Leslie McCall a montré que les Américains sont non seulement en majorité défavorables aux inégalités sociales, mais qu'ils y sont de plus en plus sensibles.

Sans faire de psychologie collective hasardeuse, il n'est donc pas impossible que la volée de bois vert administrée à une France jugée «malade», «archaïque» et «dépassée» soit au moins en partie le symptôme des doutes et des frustrations des Américains au sujet de leur propre adaptation à un nouvel ordre économique dans lequel les insécurités individuelles augmentent et les protections collectives s'affaiblissent. Cette charge peut se lire comme la revanche de l'Amérique sur un système culturel en quête de refondation. Mais qu'importe la rhétorique: le (la) prochain(e) président(e) devra impérieusement répondre à la montée de l'angoisse sociale et au dénouement du lien civique d'un côté comme de l'autre de l'Atlantique.

Michèle Lamont is professor of sociology and African and African-American Studies at Harvard University. She is also a faculty associate of the Weatherhead Center. Éloi Laurent is an economist at l'Observatoire Français des Conjonctures Economiques in Paris and a visiting scholar at the Center for European Studies at Harvard University.

President George W. Bush has complained that opponents tend to “misunderestimate” him. Could he be misunderestimating his North Korean opponent, Kim Jong Il?

At his recent press conference, President Bush's exchange with CNN White House correspondent Suzanne Malveaux left observers scratching their heads.

Malveaux: “Four years ago you labeled North Korea a member of the ‘axis of evil.’ Since then it's increased its nuclear arsenal, it's abandoned six-party talks, and now these missile launches…”

Bush: “That's an interesting statement: ‘North Korea has increased its nuclear arsenal.’ Can you verify that?”

Malveaux: “Well, intelligence sources say—if you'd like to dispute that, that's fine.”

Bush: “No, I'm not going to dispute, I'm just curious.”

Malveaux: “It's increased its nuclear capabilities. It's abandoned six-party talks, and it's launched these missiles.”

Bush: “Yes.”

Malveaux: “Why shouldn't Americans see the US policy regarding North Korea as a failed one?”

Unquestionably, Bush is familiar with the basic facts about North Korea's expansion of its arsenal of plutonium during his presidency. However, his response suggests an extreme case of cognitive dissonance. Given his image of Kim Jong Il, the score in the face-off between the leader of the world's most powerful nation and one of the weakest states on the globe does not compute.

This discrepancy is enhanced by Bush's personal distaste for North Korea's “Dear Leader,” in Pyongyang-speak. Calling him “a pygmy,” whom he “loathes,” the president views him as “irrational” and “strange.” How then is it possible that in the contest to prevent North Korea's acquisition of nuclear weapons, the score today is Kim Jong Il 8, Bush 0?

Unpalatable as they are, the brute facts cannot be denied. When Bush entered office in 2001, North Korea had one to two bombs' worth of plutonium, according to CIA estimates. That material had been diverted from its Yongbyon research reactor during the presidency of George H.W. Bush and reprocessed to extract the plutonium in 1991.

Today, according to American intelligence estimates, Kim Jong Il has acquired an additional eight bombs' worth of plutonium and thus has an arsenal of as many as 10 weapons. Furthermore, he has restarted his operational production line, making two additional bombs of plutonium every year.

If one widens the lens to the broader US objectives in its policy toward North Korea, the bottom line is even worse. After taking office in 2001, the Bush administration rejected the Clinton approach to North Korea as a “flagrant failure” and trumpeted a new approach. The essence of the Bush administration's North Korean policy was: no North Korean nuclear weapons; no ambiguity about violations of the terms of the 1994 Agreed Framework; no more missile tests; and no rewards to induce better behavior on Pyongyang's part. Before the end of the first year in office, this policy had taken the further step to “regime change.”

In contrast, Kim Jong Il's overriding objective has been regime survival, including the survival of the dear leader himself and his family. In addition to sustaining the regime, he wanted money, oil, and food to keep his desperate economy afloat. And the extent that he could get away with it, he wanted to produce additional fissile material for additional nuclear weapons as well.

Measured against their respective objectives, which of the parties deserves higher marks? Kim Jong Il often seems crazy, but he may be crazy like a fox.

Graham Allison is director of the Belfer Center for Science and International Affairs at Harvard's Kennedy School of Government and a faculty associate of the Weatherhead Center. He is a former assistant secretary of defense and author of Nuclear Terrorism: The Ultimate Preventable Catastrophe.

Inskeep, Steve, Stephen M Walt, and John Mearsheimer. 2006. “Researchers Say U.S. Policy Influenced by Israel”. Publisher's Version Abstract

Aired Monday on Morning Edition, NPR

“The Israel Lobby and U.S. Foreign Policy” is a controversial paper written by John Mearsheimer and Stephen Walt, professors at the University of Chicago and Harvard's Kennedy School of Government. They talk to Steve Inskeep about their view of the influence Israel exerts on Washington. It's a view disputed by many.

Listen to Morning Edition with Steve Inskeep, John Mearsheimer and Stephen Walt

Stephen Walt is a faculty associate of the Weatherhead Center for International Affairs.

TEHRAN—Today marks the seventh anniversary of the student protests that took post-revolutionary Iran by storm. On July 9, 1999, after the forcible closure of several liberal media outlets and a coordinated attack on a dormitory at the University of Tehran, Iranian students poured into the streets by the thousands, calling for political reform. Just as at Tiananmen Square a decade before, the Iranian students gave the world a glimpse of what might be—only to be quickly silenced by Ayatollah Ali Khamenei's Revolutionary Guard.

Naturally, Iran's regime will not celebrate today's anniversary, but neither will Iran's opposition. The Iranian student movement is a shambles—divided, confused and lacking any cause for celebration. In extensive conversations with students and student veterans of the 1999 protests, who asked to remain anonymous because of fears about their safety, I found that one message emerged loud and clear: Iran does not need another revolution, but it is in desperate need of reform.

The atmosphere at the University of Tehran is eerily quiet these days. Nothing remains from the 1999 protests, which were in fact the most notable outbreak of unrest since the Islamic Revolution 20 years earlier.

The protests were directed at the rule of the ayatollahs, and they revealed the pronounced internal divisions between the reformist president, Mohammed Khatami—then in the middle of his first term—and Iran's supreme leader, Ayatollah Khamenei. Khatami, who was trying to loosen Khamenei's tight control of the judiciary, security services and media, was facing strong resistance from the clerics when the students came to his aid. But unlike the Islamic Revolution, in which the legitimacy of the country's whole system was called into question, the 1999 protests sought reform within the existing regime, and for an Islamic democracy, that would be in accordance with Iran's constitution.

That reform didn't happen, and now, under President Mahmoud Ahmadinejad's leadership, the process has been completely sidelined. The Iranian political scene is dominated by the nuclear issue. Confrontation with the West has made the public more tolerant of authoritarian methods, damaging reformers and making concern for individual rights and civil liberties seem utterly irrelevant. The student movement very much wants a reemergence of the reform process, but it has no good ideas on how to make it happen.

Indeed, the student movement has found no place in Iran's new political reality, and its stance has moved from the politics of realistic change to the politics of survival through inaction. The old guard—the 1999 student leaders—is either in jail or abroad, and those of its members still in Iran desperately want out. Their successors—the new leaders of the liberal student union Daftare Tahkim Vahdat—have no organized structure and are weak and fragmented. Their manifestos espouse a Marxist ideal—the orthodox left as they call it—and surreal plans for communist change. These are mostly poor students from Iran's provinces who find themselves repelled by the big city's bourgeois way of life. They see the move to the left as an outlet for change, but they have no real ideological base or sense of direction. “The government could crush them any day, but they don't because it is convenient to have some sort of weak opposition,” said a student participant in the 1999 protests and a former member of the group. “It makes the regime look more democratic.”

Said another disillusioned veteran of the 1999 student uprising: “Everyone talks about radical change, but nobody wants to do anything about it, and they don't want it to come from America.…We need to bring together the student movement, the women's movement, the workers' movement and the ethnic minority movements and create a united front to face the regime's radical ideas.”

When I asked this person about his contribution to the student movement, he told me he is working on a book. “I am using the U.S. student protests from the late 1960s to show the students that revolution and radicalism is a bust,” he said, adding that “lessons may come from America after all, but they will be for reform, not revolution.”

The writer is a fellow in National Security at the John M. Olin Institute for Strategic Studies of the Weatherhead Center for International Affairs at Harvard. She is currently at the International Center for Persian Studies, University of Tehran.

Allison, Graham T., Jr. 2006. “Assessing our Adversaries”. Publisher's Version Abstract

As the World Trade Center and Pentagon attacks become a more distant memory, many Americans comfort themselves with the thought that 9/11 was a freak accident or a 100-year flood. Yesterday's arrest of 21 suspected terrorists, who were in the operational stage of preparation to blow up airplanes en route from Britain to the United States, serves as another stark wake-up call to the brute fact that so many find so hard to believe: There are a large number of people in the world who seriously want to kill us.

As we applaud the diligence of British security services that unraveled this plot, there are deeper questions Americans should reflect on. Why are so many people prepared to give up their own lives to kill Americans? Why are there so many people in the world who support them? Why do so many people believe that their methods are justifiable?

A year into the war in Iraq, Secretary of Defense Donald Rumsfeld posed a similar question to his four closest colleagues in the Pentagon in a memo that was subsequently leaked. About US strategy in the global war on terrorism, he asked: “Are we capturing, killing, or deterring and dissuading more terrorists every day than the madrassas and the radical clerics are recruiting, training, and deploying against us?”

Assessing our adversaries' numbers dynamically and seeking to understand their motivation clinically is not to sympathize with them, but to attempt to design better strategies to defeat them. That requires understanding how our actions increase sympathy, support, and incentives for would-be killers. As commanders of US forces in Iraq have observed, if by calling down airstrikes on a house containing one terrorist and 10 innocents we subtract one terrorist but recruit 10 replacements, we move backward in our mission.

Nine months after 9/11, Al Qaeda announced its goal to kill four million Americans. As an affiliated website stated: “We have the right to kill four million Americans—two million of them children—and to exile twice as many and wound and cripple hundreds of thousands” to compensate for the Muslims killed by what Osama bin Laden called the “Jewish-Christian crusaders.”

One can only imagine how bin Laden's target number is growing as the war in Iraq continues, and now as Israel pursues its campaigns in Gaza and Lebanon.

The capture of the would-be plane bombers in London should cause us to reflect on our longer-run strategy for what the president has rightly called the “long war” on terrorism. In that war, there are today more people who see the United States as the major threat to themselves than there were on 9/11. In that war, the war in Iraq has caused more people around the world to support terrorists who want to kill us. Clearly, we must continue efforts at monitoring, disrupting, capturing, incarcerating, or eliminating determined killers. But a strategic reassessment of our longer-term strategy for the war on terrorism would highlight at least three areas that require substantial change on our part.

First, we must acknowledge that the surest way to generate terrorists is to occupy their territory. The French learned this in Algeria; the Israelis, in the occupation of Lebanon from 1978 to 2000. To the extent that US troops are seen as occupiers in Iraq or Israeli troops occupiers in Lebanon, history would predict we motivate terrorists. The quiet, unadvertised withdrawal of US forces from bases in Saudi Arabia removed one of bin Laden's raison d'etre: to force American and other “crusaders” to remove their troops from Arab lands.

Second, we must recognize that most of the actions required to discover and capture terrorist plotters like the “London 21” will be taken by other governments—or not at all. However great our effort, it cannot approach the extent and effectiveness of the British government in Britain, the Saudi government in Saudi Arabia, the Pakistani government in its country. But gaining their assistance will require greater sensitivity to these governments' and their citizens' concerns on issues at the top of their agendas. To Americans who ask why we care that majorities even in allied countries disapprove of the United States and especially the Bush administration and believe that America is the greatest threat to international security, the answer is that their cooperation in outing a jihadist in their midst may be essential to our security.

Finally, we must delegitimize terrorism—making it as internationally unacceptable as slavery or piracy.

As President Bush has rightly said, we live in a “dangerous world.” Effectively combating this threat will, however, require more imagination and harder choices in the long run.

Graham T. Alliston, Jr. is a Faculty Associate of the watherhead; Douglas Dillon Professor of Government and Director, Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University

 

2005
Warikoo, N. 2005. “In a Teenage Waistland, Fitting In.” The Washington Post. Publisher's Version

Electing a Parliament under the new permanent Constitution was a significant achievement for the Iraqi people, who once again faced down terrorist violence and political intimidation to demonstrate their desire for a democratic future. For better or worse, in the election's aftermath, the United States will almost certainly begin to withdraw its military from Iraq in 2006. But that does not mean that the time has come to disengage. On the contrary, a broader, more diverse engagement with Iraqi society is needed to help Iraqis develop the institutions, practices and values essential to real and enduring democracy.

As President Bush emphasized in his second inaugural address, change of this sort—from tyranny to democracy—is a generational challenge. Our strategy in Iraq must be generational as well. We should reorient our efforts and reallocate some of our resources as our military presence scales down. The needs of Iraqi civic institutions, from the news media and universities to professional associations and nongovernmental organizations, are both vast and urgent. While the National Endowment for Democracy, the United States Agency for International Development and others have done important work to bolster such groups, overall, American efforts have so far been inadequate.

Higher education is a case in point. In a country whose median age is about 19.5 years, universities play a crucial role in shaping public opinion and producing future leaders. Today's Iraqi political parties, like the Baath party before them, understand this—so much so that Iraq's universities have become battlegrounds, with dozens of students and educators killed. Iraq's elite tends to emerge from the country's most competitive academic programs, including those for medicine, engineering and science. That the first two prime ministers of postwar Iraq, Ayad Allawi and Ibrahim al-Jafaari, were trained as doctors is no accident.

But after decades of neglect, brain drain and sanctions, Iraq's universities and colleges are unable to train sufficient numbers of professors or schoolteachers to educate the next generation. Today, Iraq's 20 public universities and more than 40 technical colleges and institutes struggle to educate more than 250,000 students annually. Hundreds of millions of dollars are needed to build the system back up to where it was before Saddam Hussein took power; billions will be needed to meet today's regional standard, set by countries like Qatar.

How can we help build a better Iraq unless we focus on its vast population of young people, whose views of their country and its politics have yet to harden into dogma? But despite higher education's strategic importance, American support for it has been paltry. From 2003 to 2005, a United States Agency for International Development program allocated $20 million to building partnerships between American and Iraqi universities. That program ended without a successor; no agency funds are allocated for Iraqi higher education for 2006. The American Embassy in Baghdad backed the founding of an American University in Iraq in Sulaimaniya, but future support is uncertain.

The State Department offers Fulbright scholarships to about 30 Iraqis annually to study at universities in the United States. But these concentrate on the humanities and social sciences, rather than the scientific and technical disciplines that attract Iraq's best and brightest. With few exceptions, American educational institutions have not tried to fill this gap.

The costs being equal, which is the better investment in Iraq's future: some 250 annual scholarships for future Iraqi leaders to study in the United States, or another fighter jet? We can greatly expand our efforts to reach out to Iraqi elites across the board, from ministry technocrats to journalists to doctors. Conferences and seminars, often in the region, have begun to reconnect Iraqis to the outside world. We can find other ways to bypass the current security situation by dramatically increasing our investment in communications technology like the Internet (including access to seemingly mundane but critical resources, like online journal databases) and video conferencing.

We should expand "train and equip" programs for Iraqi editors, journalists, and publishers. We should also increase financing for the National Endowment for Democracy, the United States Institute of Peace and other organizations that are helping Iraqis build and sustain civic institutions. Such investments cannot be postponed and must not be considered merely "supplemental." We need to lock them into our budgets today.

But the United States government should not carry the load alone. Americans of all types—including educators, management consultants and municipal officials—can contribute and need to step forward. More organizations should follow the lead of Columbia University's Center for International Conflict Resolution, which works with civic leaders in regions of Iraq that are relatively peaceful. American trade unions, professional associations, educational institutions, journalists, students, human rights activists, scientists and business executives should establish ties with their Iraqi counterparts.

So far, many Americans who opposed the war have not extended a helping hand to the Iraqi people in its aftermath. Others sit on the fence. With elections under a new Constitution, the time has come to focus on Iraq's future and put aside the politics of the past.

A strategy that emphasizes building Iraqi civil society may clear the way for bipartisan cooperation, as well as for more international participation. To be sure, if the United States does not do the heavy lifting, the lifting will not get done. Many partners have already paid heavily for their engagement in Iraq. The North Atlantic Treaty Organization is virtually tapped out in Afghanistan. Germany, France and others face domestic challenges. Nonetheless, persuading the Germans, for example, to train 100 Iraqis as vocational educators would be infinitely easier than trying to convince them to put one military trainer on the ground.

To many ears, it sounds unrealistic, even idealistic, to say that we should begin concentrating our efforts on improving Iraq's civic life at its grassroots. But such a strategy is a realistic response to the challenges we and our Iraqi allies face, as well as a hedge against possible reversals.

Those in office under the new Constitution will almost certainly seek to advance their own interests—personal, party, sectarian, ethnic, tribal—just as their predecessors in the transitional government did. Some tactics will be savage. Powerful militias will continue to stoke fear. Islamists will try to silence secular voices. Sunni extremists will mount attacks, and the attacks will provoke retaliation. Having seen the evidence of death squads and new torture chambers, we should be under no illusions about the dark possibilities of the coming era. Some leaders will try to make their power permanent. Should we expect otherwise, where the political stakes are still often life and death?

While we work with the party leaders of today, a new generation will determine what kind of country Iraq becomes. The forces we hope prevail should be the Shakespeare scholar turned newspaper editor, the architect leading an organization devoted to spreading Internet connections among students, and the independent candidate for Parliament advised by the National Democratic Institute. Promoting their success is not an "extra," but is essential to long-term strategic success.

We must not underestimate the tenacity of the Iraqi people or lose sight of the lessons of history. Photocopiers, after all, became samizdat weapons against Soviet tyranny. American unions assisted their brethren behind the Iron Curtain in becoming independent forces for change. A once jailed playwright eventually led the Czech Republic. Serbian youth groups galvanized the peaceful uprising that toppled Slobodan Milosevic. Videos of that success inspired activists in Ukraine and elsewhere. And leaders of Georgia's Rose Revolution were once Muskie fellows in the United States.

Secretary of State Condoleezza Rice has correctly emphasized that the political transition process in Iraq will not be a "straight line." It will be long, difficult, and bloody. It will be uncertain. There will be more setbacks, even if the insurgency is checked. But our current predicament in Iraq centers on the question not of when to withdraw, but of how to broaden and deepen our engagement.

Just like Europe in the late 19th century, east Asia is experiencing a period of extraordinary industrialisation, economic growth and arms build-up. Warships have been deployed to mark positions on territorial disputes, chauvinism and national stereotyping abound and crucial countries fail to deal adequately with—or learn from—the past. In Europe such developments ended in disaster. Is Asia repeating Europe's mistakes?

Europe overcame its war-prone past through the process of community building and today has established internal peace by working in unison towards two goals. The first was economic integration, an approach that Asia has emulated with extraordinary success, resulting in unprecedented intra-regional trade, transnational investment and networks of multinational production. But this economic interdependence is no guarantee against disastrous escalation of conflicts. Given the region's present economic interdependence, war in Asia would be even more disruptive and costly than it was in 20th century Europe. Will that prevent governments from unleashing a military conflict? Remember that the first world war broke out amid Europe's most advanced international trade integration and that, as Europeans know all too well, chauvinism is capable of drowning all rationality.

Europeans put their relations on a radically different footing by basing their policies on three premises: first, every nation must honestly and credibly face its wrongdoings and failures of the past; second, a clear distinction must be made between the actual guilty parties and the nations they came from; and, third, between the guilt of the perpetrators, now mostly dead, and the surviving generation who are responsible for preventing a repetition. It is perhaps understandable that facing historical facts is painful for some, but it is hard to understand why the honour and memory of people long dead is more important than the future of the living and their chance to live in peace and prosperity

The reconciliation between France and Germany and later between Germany and Poland paved the way for others to follow. Much was done jointly, for example by establishing common commissions to review schoolbooks, organising youth exchanges, or promoting city partnerships. Demonstrative gestures and credible acts of asking for forgiveness were crucial. In this respect China, Japan and Korea should play a role similar to that of France, Germany and Poland

What mattered particularly in Europe and what is missing in Asia now is a transnational consensus among governments and societal elites to combat nationalism as it existed in Europe. On the contrary, nationalist tendencies are being fostered by governments. In a mistaken belief in the short-term gains in such policy, they neglect the long-term cost of conflict they are likely to induce. Europeans owe their success partly to governments choosing to ignore extremist voices in partner countries as expressions of minorities that should not derail co-operation and reconciliation.

Moreover, as Europe has shown, the process of reconciliation and political co-operation is not a one-way street. Positive gestures should be acknowledged and rewarded by the other side. On the 60th anniversary of the end of the second world war, Prime Minister Junichiro Koizumi of Japan did not visit Yasukuni Shrine, which commemorates Japan's war-dead. Instead, by attending a secular ceremony with Emperor Akihito while apologising to Japan's wartime victims, he did exactly what many Asians had hoped and asked for. But this gesture will only work if the outstretched hand is seized and neighbours such as China and South Korea react positively.

Using the leeway gained from his recent poll victory, Mr Koizumi could now make a courageous step in this direction. Though his visit to Yasukuni Shrine this week took place in a semi-official manner, it has regrettably pointed in the opposite direction and unleashed the predictable cycle of accusations and resentment. Asia's achievements towards economic integration and interdependence are now threatened by rising political tensions and nationalism in the region. Acts of reconciliation and co-operation by governments and elites are therefore urgently necessary to strengthen community building. As Asia becomes increasingly important to global peace and the international economy, the world can only hope for such a development.

Israeli Prime Minister Ariel Sharon's plan to disengage from the Gaza Strip by evacuating Israeli settlements there and withdrawing troops is scheduled to begin today. Advocates of a negotiated Israeli-Palestinian peace agreement, based on a genuine two-state solution, have understandable misgivings about Sharon's ultimate intentions. Nevertheless, they have fully supported the Gaza initiative, and, indeed, they must do everything in their power to ensure its success.

Disengagement from Gaza would set an important precedent for evacuating settlements in the West Bank—an essential condition for establishing a viable, contiguous Palestinian state. It is particularly important that this precedent is set by Sharon, a key architect of the settlement project (even though, from Sharon's point of view, a major purpose of disengaging from Gaza is to make it possible to hold on to most of the West Bank and the settlements there). Failure of the Gaza disengagement would set the opposite precedent by demonstrating that the settler movement and its supporters—a distinct minority in Israeli society—can exercise a veto over any step toward peace, even a modest step that has the support of a broad consensus in Israeli society.

Along with their full support of the Gaza disengagement, advocates of a negotiated peace have rightly stressed the critical importance of carefully planning for the day after. Otherwise, the disengagement could easily become a dangerous trap for proponents of a two-state solution.

As a unilateral initiative, it has succeeded in marginalizing negotiations and diverting attention from efforts, such as the Road Map, to move toward establishment of a Palestinian state. It has focused the internal debate in Israel on the pros and cons of disengagement at the expense of addressing final-status issues. It has given Sharon an excuse for putting off negotiations toward ending the occupation of the West Bank and an opportunity, in the meantime, to continue expanding and consolidating West Bank settlements and erecting the separation barrier within the West Bank and the area of East Jerusalem. It has fostered within the Israeli public (despite its majority support for a negotiated two-state solution) a sense of pessimism about further progress and an inclination to put final-status negotiations on hold, while waiting to see what happens in Gaza in the aftermath of the disengagement.

This attitude, which plays right into Sharon's hands, probably reflects fatigue arising from the internal Israeli conflict over the evacuation of the Gaza settlements and reluctance to take further risks without assurance of Palestinian reciprocation, which, of course, cannot be offered in the absence of a bilateral process.

Perhaps the greatest threat to the peace process posed by the Gaza disengagement would be linking the resumption of negotiations to what happens in Gaza in the wake of the Israeli withdrawal. According to this view, further steps in the peace process would depend on evidence that Palestinian President Mahmoud Abbas can establish an effective government in Gaza and prevent anti-Israeli violence. But the unilateral character of the Israeli withdrawal severely undermines the prospects for a post-disengagement Gaza that is governable, economically viable, and peaceful.

Unless there is detailed planning, in close coordination and cooperation between Israel and the Palestinian Authority, and with the active support of the international community, Gaza may end up being cut off from the outside world, restricted in the ability to move people and goods across its borders, lacking in opportunities for economic activity and development, plagued by internal violence and lawlessness, and possibly devastated (if there is anti-Israeli violence during the disengagement, which is likely to draw a massive response).

If Gaza is left in disarray, Abbas will not be able to govern effectively or prevent terrorist actions, and he might even lose power. More generally, in order to maintain public support and control violence in the West Bank, as well as in Gaza, Abbas needs to achieve concrete benefits in the daily lives of the population and show progress in negotiations toward an end of the occupation and the establishment of a Palestinian state. Thus, to condition negotiations on Abbas's effectiveness in governing Gaza and controlling violence creates a vicious circle. Only coordination before the Gaza disengagement and the resumption of negotiations immediately after the disengagement will enable Abbas to govern effectively and control violence.

Under the circumstances, there are two clear priorities at this time for the proponents of a negotiated two-state solution.

First, in the preparation, execution, and follow-up of the Gaza disengagement, it is essential to assure in every way possible that Gaza emerges from the process as a secure, economically viable, and governable area, and to strengthen the hands of Abbas and his administration by enabling them to present concrete achievements on the ground and in the peace process to the Palestinian population.

The United States and its partners that drew up the Road Map must encourage Israeli and Palestinian coordination and cooperation for a secure withdrawal and disposition of the properties left behind in the settlements; by helping to plan and coordinate arrangements for mutual security and movement across Gaza's borders; by providing financial and technical assistance for economic development, for reopening the airport, and for building a seaport in Gaza; and by providing international observation and peacekeeping teams. The United States could make a significant contribution by appointing a high-level envoy and a team of monitors to help coordinate and implement agreements, as urged by Brit Tzedek v'Shalom, the US-based Jewish Alliance for Justice and Peace.

Second, it is essential to put the resumption of negotiations over the final terms of the two-state solution on top of the agenda for the coming fall. The United States and the international community can make important contributions by encouraging an immediate return to the negotiating table, reminding the parties of their obligations under the Road Map, and offering ideas for the outlines of a final agreement.

The most important work, however, needs to be done within and between the two societies, with an emphasis on countering the pervasive mood of pessimism and mutual distrust, reviving the lost sense of possibility, and creating a vision of a positive common future.

Joint, non-official Israeli-Palestinian efforts to formulate the terms of a final agreement, such as the Geneva initiative, have made extremely valuable contributions by demonstrating that a pragmatic solution to the conflict that addresses the vital concerns of both parties is possible. But, even though majorities on both sides have consistently supported a negotiated two-state solution, the two publics have not fully embraced these initiatives because of their profound mutual distrust. The initiatives ask the public to make major concessions, on deeply emotional and existential issues, at a time when they have no confidence that the other side will reciprocate and follow through on its commitments. The Gaza disengagement has, if anything, increased the level of mutual distrust and the reluctance to make risky concessions.

There is a need, therefore, to go beyond pragmatic formulations, essential though they be, in order to overcome the profound mutual distrust and assure the public that it is possible to negotiate a solution that is fair, safe, and conducive to a better future for both peoples. Calls for renewed negotiations and proposals for a final agreement, like the Geneva initiative, must now be complemented and framed by a joint vision of a principled peace, based on a historic compromise that meets the fundamental needs of both peoples, validates the national identity of both sides, and allows them to declare an end to the conflict consistent with the requirements of attainable justice.

A jointly constructed framework for a principled peace might include the following components:

  • Acknowledgment of both peoples' historic roots in the land and authentic links to it.
  • Expression of regret for the suffering that the two peoples have caused each other in the pursuit of their national aspirations.
  • Recognition that this destructive conflict cannot be solved by military means and commitment to ending it with a historic compromise, whereby the two peoples agree to share the land to which both are so deeply attached in a way that allows each to fulfill its national aspirations in a state of its own, in peaceful coexistence with its neighboring state.
  • Affirmation that the logic of the historic compromise requires each people to make adjustments in its national narrative—in particular, for Palestinians to accept limitations on the return of refugees to the state of Israel, for Israelis to remove settlements with extraterritorial rights from the Palestinian state, and for both to give up the claim to exclusive sovereignty over Jerusalem or its holy places—in order to enable the other to maintain its national existence and express its national identity in its own state.
  • Development of a positive vision of a common future for the two peoples in the land to which both are attached and which they have agreed to share a vision that contemplates a secure and prosperous existence for each society, mutually beneficial cooperation in various spheres between the societies, regional development, and stable peace and ultimate reconciliation.

Might poor countries gain when their best and brightest leave?

In the 2002 football World Cup, France, the reigning world champions, suffered a humiliating defeat to unfancied Senegal. All 11 members of the victorious Senegalese team had played for European clubs. They were not alone. By 2000, the first and second divisions of Europe's leagues had poached enough African players to field 70 teams. So, have greedy European clubs deprived Senegal of its best footballers, or has the prospect of a lucrative career in Europe encouraged more Senegalese to take up the beautiful game?

This question is posed by a new book, Give Us Your Best and Brightest, by Devesh Kapur and John McHale. The authors are development economists first, football fans second (if at all). But they see the emigration of African players as a highly visible example of the “brain drain”. Less visible, but more worrying, is the departure of the poor world's doctors, nurses and teachers to more lucrative job markets in the rich world. Ghana, for example, has only 6.2 doctors per 100,000 people. Perhaps three-quarters of its doctors leave within ten years of qualifying.

The answer to the Senegal conundrum is of course "both": the best players leave, and the dream of emulating them motivates many others to take their place. The real question is whether the second effect outweighs the first, leaving the game in Senegal stronger or weaker than it otherwise would be. A few economists, including Andrew Mountford, of Royal Holloway (part of the University of London), and Oded Stark, of the University of Bonn, think the net effect of the brain drain is similarly ambiguous. The prospect of securing a visa to America or Australia should tempt more people in poor countries to invest in education. Mr Stark calls this a "brain gain". If the temptation is strong enough, and the chances of landing a visa low enough, the poor country could even come out ahead: it might gain more qualified (if disappointed) doctors and engineers than it loses.

As with all debates about the brain drain, theory has run ahead of evidence. The numbers on international flows of people are much patchier than those on cross-border flows of goods or capital. In a recent paper, Mr Stark and his co-authors investigate internal migration instead. The rural villages of Mexico lose many of their brightest sons and daughters to jobs in cities or border towns. Those Mexicans who leave their home villages tend to be better educated than those who stay. But despite this, the example the leavers set (and the job leads they provide) raises the average level of schooling of those left behind. Because they can aspire to a world beyond the village, even if they never reach it, young Mexicans have an added reason to stay in school beyond a ninth year, the authors show.

Branches picked bare

Even if the brain drain does leave a country with a better-educated populace, is this necessarily a good thing? Education is not free, and some of those who gambled on a diploma as a ticket overseas will regret their decision. But Mr Stark assumes that people in poor countries tend to demand too little education. A person's productivity depends on the skills of those around him, as well as his own. Because of these spillovers, an individual's education is worth more to the economy as a whole than it is to himself, and he will underinvest in it as a result. Mr Stark sees limited emigration as one way to fix this market failure.

India's software engineers are perhaps an example of this principle at work. Indian students had little reason to learn computer coding before there was a software industry to employ them. But such an industry could not take root without computer engineers to man it. The dream of a job in Silicon Valley, however, was enough to lure many of India's bright young things into coding, and that was enough to hatch an indigenous software industry where none existed before.

India's valley-dwellers represent just one contingent in a much larger diaspora. According to the most exhaustive study of the brain drain, released last month by the World Bank, there were 1.04m Indian-born people, educated past secondary school, living in the 30 relatively rich countries of the OECD in 2000. (An unknown number of them acquired their education outside their country of birth, the report notes.) This largely successful diaspora is more than just something to envy and emulate. Its members can be a source of know-how and money, and provide valuable entrées into foreign markets and supply chains.

But Messrs Kapur and McHale think India's relatively happy experience with its educated emigrés is more likely to be the exception than the rule. Its million-strong brain drain represents just 4.3% of its vast graduate population, according to the Bank. By contrast, almost 47% of Ghana's highly educated native sons live in the OECD; for Guyana, the figure is 89%. This is not a stimulative leeching of talent; it is a hemorrhage.

Emigration, as Mr Stark suggests, might be a spur to greater accomplishment, and the poor world's talent, like Senegal's footballers, deserves a chance to compete on a global stage. But it is not easy to run a managed "emigration" policy. The drain of educated minds from poor countries is mostly determined by host countries' rules, not home countries' interests. There will be tremendous pressure to loosen those rules in the future, not least because, as the baby-boom generation retires, it will seek to "backfill the taxpaying workforce behind it," as Messrs Kapur and McHale put it. The rich world no longer welcomes the tired and the huddled; it looks set to compete ever more fiercely for the bright and the qualified.

Estévez-Abe, Margarita. 2005. “Koizumi's new party”. Publisher's Version Abstract

Another victory for Japan's governing Liberal Democratic Party. What's new? This time a lot. Japanese politics has changed forever.

This month's election was not just another victory for the LDP over the Democratic Party, its major contender. More important, it was also a victory for incumbent Prime Minister Junichiro Koizumi in his attempt to centralize power within his own party and unite the forces in favor of change. Call it the UK-ization of Japan.

Whether voters intended it or not, Koizumi's landslide victory means that the dice have been cast in favor of a British-style parliamentary system that centralizes power in the hands of the prime minister. The election results promise to transform Japan and its relations with the rest of the world.

Four years ago, Koizumi bid for the presidency of the governing Liberal Democrats by vowing to "destroy the LDP." In his post-election interview, Koizumi boasted that "the old LDP was destroyed and a new party emerged." He is right. He effectively rendered the old protectionist wing of the LDP powerless, by simply refusing to let it to run for office under the LDP banner. Instead, he nominated a whole crop of first-time candidates to run.

More than a quarter of the LDP candidates elected this month are new faces. Nothing like this has ever happened before. In the past, LDP prime ministers never controlled the party nomination. From now on, the LDP will be more like the British political parties. The Democratic Party will have to follow the suit.

The days of weak leaders are over in Japan. With or without Koizumi, the change in leadership style is here to stay. Japan introduced a number of important institutional reforms in the 1990s, including a change in the electoral rules in 1994, and the strengthening of the cabinet and the prime ministerial office in the late 1990s.

All these changes were designed to turn Japan in-to a British-style parliamentary democracy. Koizumi is a product of this new political structure. He was the first to understand how the new political rules of the game worked. Under them, individual politicians cannot survive by bucking party leaders. Koizumi's victory has taught ambitious politicians the need to rally behind a strong leader. There is no going back.

What will happen now? In the short run, there will be bolder policy shifts. Postal privatization is just the first step. We can expect Japan to address its multiple challenges.

Japan is experiencing an unprecedented degree of demographic aging. By 2025, nearly a third of the population will be above 65. In the United States, in contrast, less than one-fifth of the population will be older than 65. Japan also has one of the worst fiscal deficits among the industrialized countries. Major reforms to address these issues are finally on the agenda. The most likely scenario is a reduction in benefits for the elderly as resources shift toward the active working population.

Tax increases will most likely take two forms. One is a moderate hike in the consumption tax rate coupled with a social security reform that increases the government's commitment to a basic social minimum. The other is elimination of existing tax loopholes.

Internationally, Japan has to redefine its role in the world. Japan's so-called Peace Constitution has prevented the country from deploying its troops abroad for military purposes. Koizumi wants to change Article 9 of the Constitution in order to legitimate the Self Defense Forces as a "military" and to facilitate future deployments outside Japanese territories.

With only one year of his term remaining, Koizumi may not deliver all these reforms himself. But the "new party" that he brought to power is likely to carry forward this agenda.

The end result is likely to be a Japan that looks very much like Britain both domestically and internationally. Japan will develop a more pro-market face and be ready to take on a more active role in the U.S. global security strategy.

American business and policy makers will certainly find the new Japan easier to understand and to deal with. Whether a country like China will welcome the change is another issue.

Before its rise to fame as a battleground in the war on terror, Afghanistan was known as a bubbling geyser of the Cold War. During the 1980s Afghan communists, installed and backed by the Soviet Army, struggled for years to overcome resistance from US-backed mujahideen. Now—over a decade after the Soviet withdrawal and bloody ethnic strife that followed—the communists are making a comeback. Running for office in today's Afghan parliamentary elections, they have assumed the mantle of modernism against fundamentalism. And in the highly unstable and ethnically fragmented political landscape, the United States seems to have found a friend in their former foe. Arguably, there is some logic to this apparent madness; but our new-found love for the communists could prove perilous unless handled with care.

Indeed, the former communists—along with some newly returned Afghan diaspora—are the only locals with experience in running a country: They are the only literate bureaucrats around. And in a country plagued by illiteracy and ravished by decades of civil war, the scarcity of trained local officials has made them a desirable commodity. Similarly, former comrades are the only Afghans who are tried and tested in party organization. The Afghan communist party, regardless of its factionalism and shortcomings, was a true party of sorts: It had cadres, a semi-formalized membership structure, as well as women's wings and youth organizations. Peter Dimitroff, the country director of the National Democratic Institute, a leading, mostly US-funded NGO, appreciates the irony in his organization's support for former communist groups. "We support all registered parties, but we support some in a deeper fashion. We like groups that get together on the basis of ideas not ethnicity or geographical background. That is why we are supporting groups like the communists with US money, which is kind of funny... They are good guys and well organized. They are the closest to a professional political party you can get."

In the traditionalist and highly conservative Afghan political context, the former communists are openly "women-friendly," fielding a sizeable number of female candidates. Given the party's gender equity policy, it is hardly surprising that some of the leading women on the political scene have a communist affiliation. And the female quota—which stipulates that 25 percent of the parliamentary seats will have to be filled by women even though they make up only 10 percent of the candidates' pool—will undoubtedly boost not only female but also communist representation in parliament.

Laudable though the former communists' agenda may be, the risks associated with backing a former foe—particularly one with such a negative precedent in Afghanistan—can easily outweigh the benefits. First, our support for the former communists risks alienating the local population. UN Political Affairs Officer Eckhart Schiewe says that US rhetoric on the war on terror closely echoes Soviet justifications for the invasion of Afghanistan. "Once again a major world power has chosen to depict the conflict in Afghanistan as the forces of good against the forces of evil, much like the Soviet Union did," according to Schiewe. "The communists are back in business."

Afghans appear highly apprehensive, if not outright negative, about a potential communist return. According to former Afghan president Burhanuddin Rabbani, "some Western governments working in our country have given place to those who entered on the tanks of the [Soviet] invaders of our country... indirectly telling us that it was bad to stand against the Soviets, the Taliban, and terrorism."

Rather than using remnants of an "evil" empire (the former communists) to take down the new evil-doers (the fundamentalists), and risk alienating the local population, the United States should concentrate on good practices. A young Afghan, who blamed Russia "for everything that has gone wrong in Afghanistan in the last 30 years," attributed the resilience of the Afghan communists to the Soviets' human capital strategy. "The Soviets offered a significant number of scholarships to Afghans and trained scores of people in the Soviet Union. These people then came back to Afghanistan as the staunchest supporters of Soviet ideology," he said. "The Americans, if they want to succeed in winning the hearts and minds of Afghans, need to establish educational exchange programs. They should stop worrying about weapons of mass destruction and instead concentrate on building human capital. Trained people make the best ideological weapons. And this is what Americans need: ideological weapons of mass construction."

Judging by the Afghan communists' return and resilience, the United States can possibly outsmart its current enemy by learning from its former one. But to do it right, it would have to train its own people rather than rely on what the Soviets left behind.

Americans normally shrug off newspaper headlines overseas, unconcerned by what the rest of the world thinks of us. But the events of recent months have turned a not-so-flattering mirror back upon the US, forcing us to think seriously about what it is the rest of the world is seeing.

The hurricanes that struck America's Gulf coast this autumn were just the beginning of a series of storms—both physical and political—that have done significant damage to the already fragile US image overseas. Seen through the eyes of an international audience, the images of destitute African Americans left to fend for themselves in a wasted New Orleans, of Tom DeLay, Speaker of the House, indicted and of a White House struggling to salvage a Supreme Court nominee and belatedly waking up to the dangers of bird flu, combined to create a powerful impression of insensitivity and ineptitude. Coming on the heels of a war that cast grave doubt on US leadership, these storms and our response threaten America's stature in the world.

The US's ability to shape world events rests on three pillars. The first is our economic and military power. The second is others' belief that we are using that power properly. And the third is confidence in US competence. When other countries recognise our strength, support our aims and believe that we know what we are doing, they are more likely to follow our lead. If they doubt our power, our wisdom or our ability to act effectively, US global influence shrinks. Even before the storms, the Iraq war was corroding all three elements of US power. Our armed forces have been weakened and our economy burdened by the costs of occupation, and the abuses at Abu Ghraib jail are a stain on the US's reputation.

The new Iraqi constitution will not end the insurgency and the bungled occupation has given others ample reason to doubt the US's ability to handle complex political challenges. At home, the aftermath of the storms has made matters worse in every way, as noted by foreign observers. The Russian newspaper Novosti described the US as "a giant on legs of clay, with one foot planted in New Orleans and the other in Baghdad". Germany's Die Zeit asked: "How can America expect to save the world when it cannot even save itself?"

Katrina reinforced foreign perceptions of the US as a wealthy but heartless country where racism is endemic and safety nets are lacking. The China Daily said these events revealed "just how fragile much of America's social fabric is" and Japan's Asahi Shimbun declared that "Katrina showed the world the seriousness and the sorrow of the racial disparities facing the US".

Finally, the inept US response to sequential natural disasters reinforced foreign doubts about America's competence. As Austria's Salzburger Nachrichten put it: "How is it possible that the country is so ill prepared?"

Thus, as Americans turn to the task of reconstruction, we must do so in a way that restores confidence in our values and our abilities. First, to ensure that the US's overall power remains intact, President George W. Bush must ask the American people to accept the full burden of their national ambitions. If we want to repair the damage the storms wrought, prepare for bird flu, maintain a military that is second to none, have world-class schools and exercise energetic global leadership, it is going to cost money—and it is going to require sacrifices from those who have it, rather than those who do not. Anyone who says differently is either lying or deluded.

Rebuilding New Orleans is also an opportunity to demonstrate our commitment to provide for all our citizens. If New Orleans is rebuilt with condominiums for the rich, financed by cutting needed social programmes, or if the reconstruction effort is derailed by corporate greed and congressional pork, the rest of the world will have even more reason to question our values and competence. But if reconstruction is swift and New Orleans becomes a showcase of local opportunity and social justice, we will begin to restore the world's faith in US leadership.

In the past, the US was respected because its public institutions could set ambitious goals and then achieve them: recall the New Deal, the Manhattan Project, the Marshall Plan and the moon landing. This stormy season produced tragedies for many but we now have the opportunity to show what America can do. The world is watching; we had better not blow it.

Much of the recent debate on global economic imbalances has centred on Chinese exchange-rate policy. China has a balance of payments surplus. The People's Bank of China has been buying some $20bn a month in its attempt to keep the renminbi's parity with the US dollar stable.

American legislators are concerned about the advantage that a weak currency gives Chinese exporters. The US Treasury has given the Chinese six months to act on the currency and has appointed Olin Wethington as a special envoy to carry the message to Beijing. The Chinese authorities fear that a currency appreciation might worsen social and regional imbalances. An appreciation might slow job creation in manufacturing, worsening urban unemployment. It would lower the relative price of agricultural products, thus reducing rural income. Is there an alternative solution?

Excessive savings are at the root of the imbalance in China. In spite of China's impressive investment rate, its domestic savings rate is even higher and it attracts massive foreign direct investment. This abundance of savings is what is expressed in the external imbalance. A misallocation of resources occurs. Consumption is foregone, sacrificing the welfare of today's low-income generation not for the benefit of future, wealthier generations but in order to accumulate unneeded low-yielding foreign assets.

A reduction in China's savings rate could correct the imbalance. It would lead to faster growth and job creation and improve the welfare of the present generation. It would reduce the balance of payments surplus and stimulate faster global growth through increased exports to China. The increased internal demand would raise the rate of return of investment projects in China that cater to the domestic market. With proper macroeconomic management, even higher rates of investment and growth could be achieved.

But can China grow even faster than its current high rate? High growth becomes unsustainable when the economy becomes constrained by an insufficient supply of critical inputs. Usually, investment demand exceeds savings, bringing about a destabilising current account deficit. In other cases, high growth is checked by labour shortages and inadequate infrastructure. These shortages create inflationary pressures associated with currency depreciation, rising labour costs and bottlenecks.

In spite of China's rapid growth, these symptoms appear to be absent. The country exhibits an excess of savings over investment. Policymakers are concerned about unemployment rather than labour shortages. Infrastructure is expanding at an impressive pace. Inflation has remained low, with core inflation (excluding energy and food) almost nil. This suggests that the economy's speed limit may well be higher than the current growth rate.

An acceleration of growth would create pressures towards real appreciation, because the supply of importable goods is usually more elastic than that of non-tradables. In the context of faster job growth and incipient inflationary pressures, the Chinese authorities would be much more willing to allow an appreciation of the renminbi.

The reduction in savings could be engineered through either fiscal or monetary expansion. There are reasons not to choose the latter. First, an eventual credit expansion would be channelled through an already fragile banking system. Credit booms often end in tears. Second, a credit-induced expansion is likely to allocate the additional spending to those who can provide collateral. This would have the wrong distributive consequences both socially and regionally.

A fiscal solution has several advantages. First, it can be targeted to favour the regions and the social groups that have fallen behind. Second, it avoids the problem-ridden banking system. Third, it can address other developmental and social goals, such as housing, urban development and infrastructure. Moreover, the country can afford a fiscal expansion. Its debt level is barely 26 per cent of gross domestic product.

A fiscal solution is not without dangers. These include corruption, the risk of poorly designed programmes, allocations that are not compatible with sustainable development and the creation of entitlements that may be difficult to reverse.

As a response to the 2001 recession, the US Treasury allowed the fiscal deficit to widen by more than 5 percentage points of GDP. Public debt was put on a rising trend. When Mr Wethington meets the Chinese authorities, he might mention the US experience with expansionary fiscal policy. After all, what is good for the goose...

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