The Asia Health Policy Program at the Shorenstein Asia-Pacific Research Center, in conjunction with The Next World Program, is soliciting papers for a workshop, “Inequality & Aging,” held at the University of Hohenheim from May 4-5, 2018. The workshop will result in a special issue of the Journal of the Economics of Ageing, and aims to address topics such as:

• Population dynamics and income distribution
• The evolution of inequality over time and with respect to age
• Health inequality in old age
• The effects of social security systems and pension schemes on inequality
• Policies to cope with demographic challenges and the challenges posed by inequality
• Family backgrounds and equality of opportunities
• Demographically induced poverty traps
• Effects of automation and the digital economy in ageing societies
• Flexible working time and careers, and their long-term implications
• The dynamics of inheritances, etc.

Researchers who seek to attend the workshop are invited to submit a full paper or at least a 1-page extended abstract directly to Klaus Prettner and Alfonso Sousa-Poza by Sept. 30, 2017.

Authors of accepted papers will be notified by the end of October and completed draft papers will be expected by Jan. 31, 2018. Economy airfare and accommodation will be provided to one author associated with each accepted paper. A selection of the presented papers will be published in the special issue; the best paper by an author below the age of 35 will receive an award and be made available online as a working paper.

Researchers who do not seek to attend the workshop are also invited to submit papers for the special issue. Those papers can be submitted directly online under “SI Inequality & Ageing” by May 31, 2018.

For complete details, please click on the link below to view the PDF.

Sophia Hu, a Stanford student and prospective anthropology major, writes a summary of an annual forum that examines China’s health policy in comparative perspective

The Asia Health Policy Program held its Third Annual Forum on China’s Community Health Services and Primary Health Care Reform on June 22 in Beijing. The forum featured a diverse panel of speakers who addressed how to improve China’s primary care and community health care services. From discussing insurance plans to evaluating national policies and encouraging students to consider working as rural doctors, the speakers presented a wide array of research and experience. A brief summary of each presentation is detailed below.

Weichang Wang, director of the Ningxia Health Care Reform, discussed his experiences implementing a reformed health insurance payment system, originally developed by a team of researchers at Harvard and executed in Ningxia, China. Through this plan, his team created a medical insurance fund for the town that prioritized reimbursement for lower-level institutions, i.e. primary care centers. The plan resulted in increased accessibility, frequency of visits and patient satisfaction at primary care centers. It also saved money; however, some issues did arise such as how to develop accurate projections for the medical fund.

Quilin Chen of the Chinese Academy of Social Sciences, informed by his experience in Inner Mongolia, examined the disparity of hospitalization rates among different regions. He analyzed several factors, including financial incentives for patients and hospitals, regional differences in culture, and technological changes among primary care centers.

Jiaying Zhao of Australia National University and Shanghai University proposed using artificial intelligence (AI) to support primary care centers. She highlighted the benefits of AI, including how it can help inform physician decisions and bolster patient trust in primary care centers. Zhao, whose presentation motivated a spirited debate, shared important insights on the growing role of technology/CS in the health care field.

Jeroen Struijs of the Netherlands National Institute of Public Health and the Environment gave an overview of the primary care system in the Netherlands. With one of the most highly regarded systems in the world, the Netherlands prioritizes primary care-centric health care. He described how Dutch citizens seek care with their primary care physicians first – or face a penalty – before going on to specialists or hospitals. He also explained their bundled payment system. This system pays health services providers for a “bundle” of treatment for certain diseases, helping to align provider incentives with efficient convenient care, rather than fee-for-service which financially rewards quantity of services.

Hyuncheol Kim, an assistant professor at Cornell University, examined trends in long-term care insurance and public cancer screening programs in South Korea with a regression discontinuity design. His analyses helped to explain the relative success and failure of those programs. For example, his analysis was consistent with a theory that an intervention has a higher likelihood of failing if those receiving the intervention have other channels to receive benefits, i.e. patients are able to seek private as opposed to public insurance. His presentation also inspired discussion about primary care in Korea and the challenges Korea faces – similar to those in China – in trying to move away from a hospital-centric delivery system.

Lingui Li, director of Ningxia Medical University’s Public Sector Management Centre, delivered an overview of strategies to recruit health care workers in rural areas. He emphasized the need to balance primary public health service with primary clinical service and highlighted the dearth of doctors in villages.

Jinglin Yue, deputy dean of the Zhongshan University’s Institute of Public Administration, presented about his experiences establishing a hierarchical treatment system that aims to bring more people to primary care before pursuing treatment at hospitals. He explained the various incentives of the diverse interest groups involved, and emphasized the need for future government policies that support a 2-way referral system.

Xiaoguang Yang of Fudan University’s School of Public Health also described efforts to create a two-way referral system, based on his research of an integrated health system in Shenzhen. This initiative, using a people-centered reform paradigm, introduced the concept of “community of common destiny” to Luohu, China. The reformers tried to manage supply and demand using financial incentives to help providers including hospital groups coordinate in promoting a more integrated system.

Xiaoyun Liu of Peking University examined the efficacy of a new national program that contracts with students to commit to practicing medicine in rural areas in exchange for free medical school tuition. Using surveys, he gathered data on why students chose the program and where they chose to become rural doctors, among other factors. He then used this data to propose changes to enhance the effectiveness of the program.

Guanyang Zou, a researcher at Queen Margaret University, presented an overview of international experiences or “models” of health and social care that catered specifically to aging populations. These models included the integration of ambulatory medical care and aspects of social care and long-term care services.

Bei Lu of the University of New South Wales took an economic approach toward addressing the issue of long-term care for elderly populations. In her research, she worked closely with policymakers in Qingdao, China, and used a model to estimate how long-term care insurance could be structured so that the elderly could get optimal care without imposing a disproportionate financial burden on young taxpayers and fairly compensate providers.

Each presentation contributed important knowledge toward understanding primary care in China and elicited substantial discussion. This forum would not have been possible without the participation of the numerous speakers and the generous support of the Asia Health Policy Program and Chinese affiliates.

In a Q&A, SK Center Fellow Yong Suk Lee discusses U.S. policy toward North Korea and the viability of 'secondary sanctions'

North Korea launched its first intercontinental ballistic missile (ICBM) on July 3, a first for the country that has increasingly advanced proliferation and testing over the last three years despite condemnation from the international community.

The United States, following the ICBM launch, called for additional efforts to cut-off flows of currency into North Korea. Officials have said, as part of the proposals, they are considering ‘secondary sanctions’ that would target companies and financial institutions that deal with North Korea even beyond those already banned by U.N. Security Council resolutions.

Just returned from Seoul, SK Center Fellow Yong Suk Lee spoke with Shorenstein APARC about the effectiveness of historical sanctions on North Korea, one of his research areas. He also shared thoughts on U.S. policy toward North Korea and the viability of new sanctions.

Could you describe how sanctions have historically been applied on North Korea? What do they generally look like in terms of scope and whom do they often target?

Sanctions generally fall into three different categories: trade, travel and financial transactions, and in the case of North Korea, all three kinds have been applied. Trade sanctions, for example, have focused on minerals, technology and energy sources, with the goal of hindering the purchase of products that could aid in weapons development. Financial sanctions, for example, have sought to control flows of money to and from certain individuals and entities associated with the government. Whether sanctions are applied multilaterally through the U.N. or unilaterally, it’s difficult to enforce them especially in a country as closed-off as North Korea. It’s also difficult to identify how to draw the line between sanctions that only punish the bad behaviors of a few versus those that affect the broader population: that’s a balance policymakers attempt to strike.

Your research has looked at the impact of sanctions in both rural and urban areas of North Korea from the 1990s through the 2000s. How did you analyze their implementation and performance? In a technical sense, have sanctions been effective?

In the 1990s, sanctions on North Korea relaxed in concert with the Sunshine Policy, an effort by the South Korean administration under Kim Dae-jung to engage North Korea. By the early to mid-2000s, the international community began to increase sanctions again as North Korea continued its nuclear and weapons development. The goal of my research in analyzing those two time periods was to compare and understand the impact of sanctions within North Korea, particularly the impact on its domestic economy. Since there’s not much subnational data available, I identified a proxy for economic activity – nighttime lights as seen from outer space – that acted as an indicator of consumption, production and energy allocation across North Korea.

I found that certain areas became relatively brighter than other areas when sanctions increased. The capital Pyongyang, cities that share a border with China, and pockets where manufacturing is clustered all became brighter. This result indicates that sanctions were effective in a technical sense, yet were ineffective in reaching their intended target. The North Korean regime has found ways to reallocate resources toward urban areas where government officials and elites reside.

How has North Korea evaded potential effects of sanctions in the past?

North Korea has avoided effects of sanctions through internal actions, such as redistribution of resources to government officials and elites, like those patterns identified in my research, and also though external actions, such as trade with other countries. Increasing financial activities and trade with neighbor countries fills in some of the gaps caused by sanctions. North Korea has also maintained ties with African, Southeast Asian and Middle Eastern countries, some of which receive migrant workers from North Korea. Those workers often send remittances back to acquaintances in North Korea, thereby supporting its economy.

In a recent report, you’ve written about China’s relationship with North Korea and how that relationship has aided in the development of markets. Can you describe how the two are tied?

The relationship between China and North Korea is close. By sheer numbers, around 80 percent of North Korea’s trade is with China. All sorts of goods are exchanged through China. For example, goods produced in Western countries that are barred from directly trading with North Korea are often funneled through China. Especially outside of urban areas, North Koreans seek goods from China because they can’t otherwise access them. They also make money by selling goods, mostly minerals, to China. The China-North Korea border is quite porous, so you have a situation where a large number of individuals are engaging in small transactions, and although they may be disparate, the transactions add up.

Is there a strategy that provides hope that China will step up pressure on North Korea?

A lot of the debate, especially in the United States, is about putting pressure on China to do something about North Korea. But if you take a step back and think about it from the Chinese perspective, I think a valid question to ask is: why would China be interested in pressuring their neighbor? For the United States, the main issue with respect to North Korea is the nuclear threat. For China, Japan and South Korea, however, the main issue is not necessarily the nuclear threat but instead the issue of regional stability. So, while China remains important, it is one of many actors that are involved in addressing challenges related to North Korea. I think that point is largely missing from the debate.

U.S. policy has maintained that sanctions will encourage the North Korean regime to change its behavior. Could additional sanctions help?

New sanctions might help. If the intended goal is to decrease flows of currency into North Korea, it would make sense to impose sanctions on Chinese entities or individuals since they remain North Korea’s most prolific trade partners. But the question remains: would it encourage the Chinese government to change its position, and in turn, the North Korean government to bow to additional pressure? From my perspective as an economist, I don’t think enough incentives are at play for either country to react significantly. North Korea is one of the poorest countries in the world, and as history has shown, poor countries can survive in that manner for a long time. They find ways to adapt. Additionally, North Korea has nuclear weapons and the government sees them as leverage for maintaining the status quo.

What should officials keep in mind when considering sanctions?

Sanctions by their very nature are meant to inflict some harm, and that aspect alone does not sit well with the North Korean government. This, however, is where U.S. policy currently stands. It is caught in a deadlock. On one hand, the United States feels an immediate need to discipline the regime for its repeated missile launches under grounds that it threatens national security, and on another hand, the United States does not recognize North Korea’s nuclear program. Given this context, there is little room to consider tools of engagement.

There’s clearly no easy solution to the challenges posed by North Korea, and whatever the solution may be, it will consist of many steps. Over the long-term, I think slowly relaxing sanctions and pursuing quiet engagement with North Korea has greater likelihood of success. Putting aside political leadership and ideology for a moment, if North Koreans had an opportunity to engage in limited economic activities, it could create incentives. Economic development is already changing North Korea and might be its greatest motivation to come to the table to talk about change.

The United States has placed unilateral sanctions on other countries such as Iran, for example, which negotiated the 2015 nuclear deal, and Cuba, which saw opening and reforms in 2016. Do those cases provide lessons that could be applied to the North Korea case?

Iran, compared to North Korea, has a much larger population and holds a prominent position on the world’s stage. Sanctions on Iran carry weight because of the country’s economic ties across the world. That’s one aspect to keep in mind. Another is that Iran isn’t a totalitarian society. The government has to respond to its people to some degree. So, in general, there are more incentives that exist in Iran that could have influenced the decision to negotiate the 2015 Nuclear Deal.

As for Cuba, the case is also unique. The U.S. trade embargo that existed following the end of the Missile Crisis of 1962 lasted for decades not because of a continued existence of nuclear weapons, as in the case of North Korea, but I believe because of ideological issues that remained between two countries. Cuba wasn’t as isolated either, so it was able to conduct business with many countries during that time period. Sanctions have recently been lifted by the United States due to the passage of time and diplomatic efforts.

What happens when rising countries like China, India and Brazil collide with international organizations still operating from a post-World War II landscape?

That’s the question Phillip Lipscy, assistant professor of political science at Stanford University, addresses in his new book, Renegotiating the World Order. Lipscy analyzes how influential global organizations like the U.N. Security Council and International Monetary Fund react, or, in some cases, don’t react to pressures exerted by rising nations. While the influence of these international organizations has increased stability and peace, Lipscy details the hurdles rising countries must overcome to have a seat at the global table. He also discusses how established countries like the United States exert their influence in these matters.

The Stanford News Service interviewed Lipscy, who is also the Thomas Rohlen Center Fellow at Stanford’s Freeman Spogli Institute for International Studies, about his new book:

What is the major takeaway from your book?

My book examines how countries renegotiate their position in the world order. I specifically look at international institutions like the United Nations Security Council, International Monetary Fund (IMF), and European Union (EU). These institutions play important roles in the international system and they are often contested by countries that seek greater influence. I show that renegotiation plays out differently depending on the institution’s policy area: institutions in competitive policy areas tend to adjust flexibly or collapse as states exit, while institutions in noncompetitive policy areas can remain relevant even while resisting change.

Why is understanding institutional change in international relations important?

Before the early 20th century, renegotiating the world order often meant acquiring a strong military and fighting or coercing other countries. As I argue in the book, several transformations have made peaceful renegotiation more viable. Military confrontation has become more costly with the advent of nuclear weapons, and several factors – like joint democracy and economic interdependence – have made conflict less likely. At the same time, the rise of international institutions gives countries mechanisms to gradually and peacefully elevate their influence in the international system.

What motivates countries to pursue institutional change?

The motivations vary. The common theme is a sense of unfairness. For example, Japan’s economy grew rapidly after the conclusion of World War II in 1945. Japanese leaders felt that their country deserved international recognition and respect, but they were frustrated that their status in international institutions lagged behind.  Japan has never been a permanent member of the U.N. Security Council, and Japan ranked fifth in IMF voting power in 1980 despite having the world’s second-largest economy. Japanese nationals remain underrepresented in most international organizations, particularly in leadership posts. More recently, policymakers in countries like China and India have expressed similar frustrations.

Is this an important aspect of U.S. foreign policy as well?

Institutional change is not just a foreign policy priority for rising states. The United States has also sought institutional change on numerous occasions. For example, the U.S. has been critical of U.N. agencies that give only one vote to each member state while assessing financial contributions according to economic size. This creates situations where the U.S. pays the largest share of an agency’s budget but gets routinely outvoted by countries paying much less. The U.S. has pulled out of several international organizations over this type of concern. The U.S. withdrew membership from the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1985 after accusing the institution of over-representing Soviet interests. In the International Fund for Agricultural Development, the U.S. renegotiated voting rules in its favor by threatening to withdraw funding.

Can you talk about the role policy areas, both competitive and noncompetitive, play in international institutions? 

One of the key theoretical insights of the book is that characteristics of policy areas have predictable effects on political institutions, just like markets affect private firms. International institutions sometimes operate in policy areas where competition is fierce, like development aid. In these policy areas, it is easy to create alternative institutions or bargain for better outcomes by threatening exit. On the other hand, creating competition in the policy area of the IMF is challenging: to address international financial crises, you need adequate resources, access to sensitive information, and political cover provided by broad membership. It is very difficult to create a successful competitor to the IMF from scratch. This limits the bargaining power of dissatisfied states and effectively locks them in, even if they believe the institution is fundamentally unfair.

Your book points out that the composition of some of the world’s most important organizations – U.N. Security Council, IMF – are based on the world order in the immediate aftermath of WWII. What does it say that the makeup of these notable organizations hasn’t changed significantly in more than 70 years?

There has been some change. For example, the U.N. Security Council added some nonpermanent members in 1965 and the IMF has redistributed voting power on several occasions. However, it is also true that these institutions reflect what I call a “World War II effect.” The permanent five members of the U.N. Security Council are essentially the major Allied Powers of World War II, excluding important countries like Japan, Germany, India, and Brazil. Similarly, I show that the Axis Powers from World War II remain underrepresented in important areas like IMF voting shares and leadership positions in major international organizations. It is remarkable that some institutions are able to maintain these types of imbalances for many decades despite fundamental shifts in the international system: this is one of the puzzles that motivated me to write the book.

Recently, Harvard political scientist Graham Allison has argued that the U.S. and China may be “destined for war” because of China’s rising power. Do you agree with this?

China is vested in the international status quo to a much larger degree than historical rising powers. China’s economic rise in part has been fueled by economic openness promoted by the U.S. and major international organizations like the IMF and World Trade Organization. There are some exceptions, like development aid institutions, where Chinese dissatisfaction has led to the creation of alternative institutions. In my view, China’s new institutions, like the Asian Infrastructure Investment Bank, illustrate how China can increase its international influence and prestige without resorting to violence or coercion. Rather than seeing these institutions as threats, the U.S. should welcome them and cooperate with China to shape their trajectory.

Does your book have any implications for President Trump’s policies toward international institutions? 

The president wants to cut U.S. budgetary contributions toward international institutions like the United Nations. This has been something of a partisan issue for many years with Republican administrations pushing for similar policies: it is rooted in suspicion toward big government and unaccountable bureaucracies. It is true that international organizations can become inefficient and wasteful, so maintaining accountability is helpful and necessary. However, I worry that President Trump’s approach will be blunt and ineffectual. Combined with understaffing at the State Department, arbitrary budget cuts could put the U.S. at a serious diplomatic disadvantage as other countries seek to expand their international influence: precisely the type of international renegotiation that my book highlights.

Milenko Martinovich is a writer for the Stanford News Service.