FSI researchers consider international development from a variety of angles. They analyze ideas such as how public action and good governance are cornerstones of economic prosperity in Mexico and how investments in high school education will improve China’s economy.
They are looking at novel technological interventions to improve rural livelihoods, like the development implications of solar power-generated crop growing in Northern Benin.
FSI academics also assess which political processes yield better access to public services, particularly in developing countries. With a focus on health care, researchers have studied the political incentives to embrace UNICEF’s child survival efforts and how a well-run anti-alcohol policy in Russia affected mortality rates.
FSI’s work on international development also includes training the next generation of leaders through pre- and post-doctoral fellowships as well as the Draper Hills Summer Fellows Program.
The overall goal of the paper is to better understand the development of groundwater markets in northern China. Field survey shows that groundwater markets in northern China have emerged and are developing rapidly. Developing in a number of ways that make them appear somewhat similar to markets that are found in South Asia, groundwater markets in northern China also differ by the impersonality and case bases. The privatization of tubewells is one of the most important driving factors encouraging the development of groundwater markets. Increasing water and land scarcity are also major determinants that induce the development of groundwater markets.
This issue of Value in Health presents selected articles from the ISPOR Second Asia Pacific Conference held in Shanghai, March 2006. Under the leadership of ISPOR and the ISPOR Asian Consortium, the ISPOR AsiaPacific Conference is held every two years in Asia with a twofold mission: to help develop knowledge and capacity for health economics and outcomes research (HE/OR) in Asia; and to promote the use of HE/OR in policymaking processes in Asia, with the goal of improving efficiency in the allocation of resources. With "Improving Evidence and Outcomes in Health Care Decision-Making" as the theme, the Second ISPOR Asia-Pacific Conference was well received, achieving an unprecedented level of participation from the Asian communities. All articles included in this issue underwent the usual anonymous process of peer review.
Office of Technology Licensing
1705 El Camino Real
Palo Alto, CA 94306-1106
At first sight, political turmoil in Thailand and the Philippines—repeated violent protests, impeachment battles, and military coups—gives the impression that democracy in Southeast Asia is on a downward spiral. One country in the region, however, has sustained a stable pluralistic democracy: the Republic of Indonesia.
In 1999, after thirty years of Suharto’s centralistic, authoritarian rule, Indonesia embraced far-reaching decentralization and election reforms. Within a brief period of two years, the Indonesian government reshaped its administrative architecture, including the devolution of local tax and service responsibilities to more than 400 district governments. In view of its deep-seated authoritarian traditions, beginning with Javanese kingdoms and sultanates, moving through Dutch colonialism (1619–1942), and ending with Suharto’s New Order (1965–98), Indonesia’s rapid shift toward democratic decentralization stands out as one of the most remarkable political transitions in recent history.
Particularly notable is the peaceful and competitive conduct of Indonesian elections. Over the last decade, local citizens have elected more than 30,000 local councilors and over 400 mayors, regents, and governors, with little violence or intimidation. High voter turnouts (around 70 percent) and high replacement rates of incumbent executives (roughly 40 percent) bear witness to rising electoral competition in local polities. While subnational elections display considerable flux, the upcoming presidential elections in July 2009 suggest continuity. The latest national polls, for example, predict a comfortable lead for President Susilo Bambang Yudhoyono (49 percent) over his main competitor, Megawati Soekarnoputri (36 percent).
The institutionalization of democracy and decentralization, however, has yet to translate into substantive public sector reforms. Indonesia continues to score low in global governance assessments. According to Transparency International and the World Bank, Indonesia’s government ranks 126th (out of 180) in terms of corruption, and 129th (out of 181) in terms of administrative efficiency for business start-ups. With the introduction of regional autonomy, these governance problems have, to a considerable extent, been decentralized to hundreds of districts. Yet, despite formally uniform institutional settings, local governments exhibit vast differences in regulatory quality, administrative efficiency, and anticorruption measures.
What motivates some local governments to perform better than others? Implicit in this question, which stands at the center of my research, is the idea that local democracy is not only an end in itself, but also a means for improving government outcomes. The pronounced policy differences that arise in Indonesia’s district polities provide a good opportunity to examine the workings of Indonesian local democracy or, to use a different terminology, the political economy of local decision-making.
The findings from controlled case comparisons and subnational datasets suggest that policy variations are best explained by differences in government leadership. Good policy environments emerge primarily in cases where local regents and mayors, whose career aspirations are tested by direct elections, skillfully use their office powers to forge reform coalitions and supervise bureaucratic practices. Societal reform pressures that arise from local parliaments, business chambers, and nongovernmental organizations, in comparison, tend to be less significant drivers of good governance. While broad-based interest groups continue to struggle with collective-action problems, district council members seem more concerned with provincial/national party elites (and their party list positions) than with representing local constituencies. Thus, in Indonesia’s early stage of democratic transition, where societal pressures are yet to fully unfold, much seems to depend on leadership efforts to initiate, facilitate, and oversee government improvements.
Under what conditions, then, are local leaders likely to act in the public interest, rather for private gain? While direct elections provide basic incentives, the direction and strength of these incentives also hinge upon existing socioeconomic structures. Government leaders need to accommodate interests of powerful economic groups in order to secure support for campaign funding and co-investments in public goods. Whether these interest alignments result in unproductive rent-seeking and corruption, or in constructive government reforms, depends on the constellation and transparency of economic powers. The more economic powers become concentrated in specific sectors, groups, and firms, and the less public-private interactions are monitored by local media, the greater the likelihood that leaders will pursue self-preferential and collusive strategies.
As a result, it is plausible to assume that a moderate economic concentration and strong media presence are conducive to better governance. At this point, only some districts fall into this category. But as globalization and communication technologies progress, local polities are bound to become more economically diverse and politically informed. With growing political awareness and increased incentives for better leadership, it is likely that Indonesia, over time, will see more public-private symbioses for reform and, thus, bridge the gap between well-functioning elections on the one hand and poor governance
on the other.
North Korean leader Kim Jong-il’s apparent stroke in mid-August raises the possibility of near-term political succession in the Democratic People’s Republic of Korea (DPRK, or North Korea). This has prompted U.S. and Republic of Korea (ROK, or South Korea) planners—concerned with command and control of North Korea’s fissile material under conditions of regime disarray, internecine conflict, or collapse—to examine afresh the alliance’s assumptions, contingency plans, and political strategies.
The Korean Peninsula occupies a central place in the Chinese national security calculus. Chinese policy above all aims to avert military conflict on the Peninsula and regime collapse in the North. Conflict and collapse scenarios could embroil China in unwanted military action, imperil its long-term economic development program, jeopardize its crucial ties with the United States and South Korea, open the floodgates to North Korean refugees, and alter the Northeast Asian strategic landscape to China’s disadvantage.
For these and other reasons, China has emphasized the need for a peaceful, negotiated resolution of the problem posed by North Korea’s nuclear ambitions. It has encouraged North Korea to emulate, to the extent feasible, China’s own post-1978 economic reforms. At the same time, China has deepened political and commercial ties with South Korea, and sustained the North Korean regime through generous economic and military assistance.
China’s core interests—plus its special ties with North Korea’s military, party, security, and economic elite—have persuaded many outside observers that Beijing possesses not only unique insights into the Pyongyang regime’s internal dynamics but also potential leverage. Further, many assume that China, having both the need and ability to influence North Korea’s political succession, will do precisely that—shape, or if necessary impose, a North Korean succession that accords with China’s policy interests.
China has consistently denied having superior knowledge and usable leverage, and has adamantly rebuffed speculation regarding its national ambitions and potential actions.
Such disclaimers notwithstanding, some in the ROK and the United States postulate that national and alliance interests might best be served by “coordinating” with China on North Korean regime change/collapse scenarios. A few even argue that the alliance should “subcontract” this issue to China, thereby tacitly acquiescing in its intervention to ensure a peaceful, stable transition.
Despite the high stakes, crucial U.S.-ROK contingency planning seemingly has been approached in an environment that is rich in conjecture and hope, and poor in hard intelligence and agreed assessments.
Yet it is possible—indeed imperative—to do better than this. With respect to one small part of the complex whole—China’s interests, potential leverage, and likely actions—a starting point for rigorous
analysis might include the following issues and questions:
Knowledge : Does China in fact enjoy superior knowledge of internal DPRK decision-making? What are the sources of and limits upon such knowledge? How have the North Koreans approachedspecial bilateral ties with the Chinese in the realms of party-to-party affairs and military cooperation?
Are there reasons to believe that China contributed to North Korea’s nuclear program? If not, are there reasons to believe that North Korea shared any knowledge whatsoever of its activities with China? Has China sought to cultivate North Korean officials and, if so, when, and how successfully? How has North Korea reacted to any such Chinese activities?
Leverage: How much leverage does China enjoy over North Korean political, military, and economic decisions? What are the sources of such leverage? What are the constraints? How should one assess North Korea’s likely response to Chinese pressure? What options does North Korea enjoy in deflecting such pressure?
A Proactive Approach by China to North Korean Political Succession : What posture is China likely to adopt toward political succession in North Korea? What are its policy options? What assets does it hold? How does the issue of North Korean succession—including the possibility of regime chaos or collapse—fit into China’s broad strategic posture? What external considerations (especially those involving the ROK, the United States, Japan, and Russia) must China take into account?
ROK and U.S. Policy Considerations Regarding China’s Potential Involvement in a North Korean • Political Succession: What essential posture should the ROK and the United States adopt? On the one hand, should they enlist China’s cooperation in “managing” political succession in North Korea, or endeavor to minimize that involvement, instead addressing North Korean succession scenarios as primarily a task for the U.S.-ROK alliance? On the other hand, should they accept (and even tacitly encourage) China’s superior ability to effect a stable succession that preserves peace and stability? Should they broaden the scope of the current six-party talks to include formal discussion among “the five” (excepting North Korea)? Or should some other approach be adopted?
On one level, U.S. and ROK planners must urgently address these issues in order to have confidence that the two allies can deal smoothly with any North Korean political succession scenario. On a deeper level, a rigorous bilateral analysis of this type can serve to strengthen the U.S.-ROK alliance itself by fully illuminating a broader set of underlying national attitudes, interests, and priorities.
Asia’s economies have been hard hit by the current global financial crisis, despite in most cases enjoying strong macroeconomic fundamentals and stable financial systems. Early hopes were that the region might be “decoupled” from the Western world’s financial woes and even able to lend the West a hand through high growth and the investment of large foreign exchange reserves. But that optimism has been dashed by slumping exports, plunging commodity prices, and capital outflows. The region’s most open, advanced and globally-integrated economies—Hong Kong, Singapore, and Taiwan—are already in severe recession, with Japan, Korea and Malaysia not far behind, and dramatic slowdowns are underway in China, India, Indonesia, Thailand and Vietnam. What role did Asian countries play in the genesis of the global crisis, and why have they been so severely impacted? How is their recovery likely to be shaped by market developments and institutional changes in the West, and in Asia itself in response to the crisis? Will the region’s embrace of accelerated globalization and marketization following the 1997-98 Asian financial crisis now be retarded or reversed?
Linda Lim is a leading authority on Asian economies, Asian business, and the impacts of the current global financial crisis on Asia, and she has published widely on these topics. Her current research is on the ASEAN countries’ growing economic linkages with China.
Forthcoming in 2009 are Globalizing State, Disappearing Nation: The Impact of Foreign Participation in the Singapore Economy (with Lee Soo Ann) and Rethinking Singapore’s Economic Growth Model. She serves on the executive committees of the Center for Chinese Studies and the Center for International Business Education at the University of Michigan, where formerly she headed the Center for Southeast Asian Studies. Before coming to Michigan, she taught economic development and political economy at Swarthmore. A native of Singapore, she obtained her degrees in economics from Cambridge (BA), Yale (MA), and Michigan (PhD).
Philippines Conference Room
The U.S. financial crisis has spread around the globe. Financial globalization means that most countries and regions are not immune to the contagious effects of a financial crisis that originates in one country.
East Asian countries had already experienced the contagious effects of a financial crisis in 1997. That year, a financial crisis that broke out in Thailand and Indonesia reached Malaysia and then South Korea. Each of these countries reacted differently to the crisis. South Korea, Indonesia, and Thailand accepted International Monetary Fund (IMF) conditionalities that required neoliberal economic restructuring in return for emergency loans, while Malaysia rejected the IMF offer and instead encouraged the inflow of speculative financial capital, while reforming the banking and financial system. In the aftermath of the East Asian financial crisis, regional economic, financial and security cooperation were discussed among East Asian countries. These efforts resulted in the Chiang Mai Initiative, the Bond Initiative, the East Asian Summit, the Shanghai Cooperation Organization, and the Six Party Talks.
Thus, regionalism in East Asia was revived in response to external shocks, such as global financial volatility, endogenous opportunities such as East Asian market compatibility (Pempel, 2008), endogenous security threats such as the North Korean nuclear development, and exogenous opportunities such as "bringing in the U.S." (Pempel, 2008).
Nonetheless, East Asian regionalism is still at a low level of institutionalization compared to Europe. East Asian regionalism is still basically "bottom-up, corporate (market)-driven regionalism" (Pempel, 2005).
I will discuss the obstacles and the opportunities that Northeast Asian countries are facing since the end of the Cold War and the advent of globalization.
Hyug Baeg Im is Professor at the Department of Political Science and International Relations, Korea University, Seoul, South Korea. He is Dean at the Graduate School of Policy Studies and Director at Institute for Peace Studies. He received B.A. in political science from Seoul National University, M.A. and Ph.D. in political science from the University of Chicago. He was visiting professor at Georgetown University (1995-1996), Duke University (1997), Stanford University (2002-2003) and visiting fellow at International Forum for Democratic Studies, National Endowment for Democracy, Washington DC (1995-1996). He served as a presidential adviser of both Kim Dae Jung and Roh Moo Hyun presidency. His current research focuses on the impact of IT revolution and globalization on Korean democracy. His publications include “The Rise of Bureaucratic Authoritarianism in South Korea,” World Politics, Vol. 34, No. 2 (1987), “South Korean Democratic Consolidation in Comparative Perspective” in Consolidating Democracy in South Korea (Lynne Rienner, 2000) and “’Crony Capitalism’ in South Korea, Thailand, and Taiwan: Myth and Reality,” (co-authored with Kim, Byung Kook) Journal of East Asian Studies, Vol. 1, No. 1 (2001), “Faltering Democratic Consolidation in South Korea: Democracy at the End of Three Kims Era” Democratization, Vol. 11, No. 5(2004), “Christian Churches and Democratization in South Korea” in Tun-jen Cheng and Deborah A. Brown (eds.), Religious Organizations and Democratization: Comparative Case Studies in Contemporary Asia (M.E. Sharpe, 2006) and “The US Role in Korean Democracy and Security since Cold War Era,” International Relations of the Asia Pacific, Vol. 6, No.2 (2006).
Philippines Conference Room
Korea introduced three major health-care reforms: in financing (1999), pharmaceuticals (2000), and provider payment (2001). In these three reforms, new government policies merged more than 350 health insurance societies into a single payer, separated drug prescribing by physicians from dispensing by pharmacists, and attempted to introduce a new prospective payment system. The change of government, the president’s keen interest in health policy, and democratization in public policy process toward a more pluralist context opened a policy window for reform. Civic groups played an active role in the policy process by shaping the proposals for reform —a major change from the previous policy process that was dominated by government bureaucrats. However, more pluralistic policy process also allowed key interest groups to intervene at critical points in implementation (sometimes in support, sometimes in opposition), with smaller political costs than previously.
Strong support by the rural population and labor unions contributed to the financing reform. In the pharmaceutical reform, which was a big threat to physician income, the president and civic groups succeeded in quickly setting the reform agenda; the medical profession was unable to block the adoption of the reform but their strikes influenced the content of the reform during implementation. Physician strikes also helped them block the implementation of the payment reform. Future reform efforts in Korea will need to consider the political management of vested interest groups and the design of strategies for both scope and sequencing of policy reforms.
Soonman Kwon is Professor of Health Economics and Policy, and Director of the BK (Brain Korea) Center for Aging and Health Policy in Seoul National University, South Korea. After he received his Ph.D. from the Wharton School of the University of Pennsylvania, he was assistant professor of public policy at the University of Southern California in 1993-96. Prof. Kwon has held visiting positions at Harvard School of Public Health (Fulbright Scholar and Tekemi Fellow), London School of Economics (Chevening Scholar), Univ. of Trier of Germany (DAAD Scholar), and Univ of Toronto. He is on the editorial boards of Social Science and Medicine (Elsevier), Health Economics Policy and Law (Cambridge U Press), and Health Systems in Transition (HiT, European Observatory). He has occasionally worked as a short-term consultant of WHO, ILO, and GTZ (German Technical Cooperation) on health financing and policy in China, Cambodia, Lao PDR, Malaysia, Mongolia, Pakistan, Philippines, and Vietnam. He has also been a consultant of Korean government for the evaluation of its development aid programs in North Korea, Ecuador, Fiji, Mexico and Peru.
Philippines Conference Room
As China launches a new round of rural reforms after 2005 and associated initiatives, many questions arise regarding the nature of the institutions across the countryside through which leaders will attempt to implement their new rural development strategies. Has the political economy-one which was the foundation of the first round of rural reforms-changed since the early 1980s? How have the efforts of the mid-1990s to begin to create a new regulatory approach and reform the administrative apparatus in China's urban economy affected rural areas? Are institutions in rural China that allow the upper level government to implement its policies effective and are they facilitating the development of a local, sustaining system of governance?
This talk is part of the Stanford China Program Winter 2009 China Seminar Series titled "30 Years of Reform and Opening in China: How Far from the Cage?"
Philippines Conference Room
Encina Hall East, E404
Stanford, CA 94305-6055
Scott Rozelle is the Helen F. Farnsworth Senior Fellow and the co-director of Stanford Center on China's Economy and Institutions in the Freeman Spogli Institute for International Studies and Stanford Institute for Economic Policy Research at Stanford University. He received his BS from the University of California, Berkeley, and his MS and PhD from Cornell University. Previously, Rozelle was a professor at the University of California, Davis and an assistant professor in Stanford’s Food Research Institute and department of economics. He currently is a member of several organizations, including the American Economics Association, the International Association for Agricultural Economists, and the Association for Asian Studies. Rozelle also serves on the editorial boards of Economic Development and Cultural Change, Agricultural Economics, the Australian Journal of Agricultural and Resource Economics, and the China Economic Review.
His research focuses almost exclusively on China and is concerned with: agricultural policy, including the supply, demand, and trade in agricultural projects; the emergence and evolution of markets and other economic institutions in the transition process and their implications for equity and efficiency; and the economics of poverty and inequality, with an emphasis on rural education, health and nutrition.
Rozelle's papers have been published in top academic journals, including Science, Nature, American Economic Review, and the Journal of Economic Literature. His book, Invisible China: How the Urban-Rural Divide Threatens China’s Rise, was published in 2020 by The University of Chicago Press. He is fluent in Chinese and has established a research program in which he has close working ties with several Chinese collaborators and policymakers. For the past 20 years, Rozelle has been the chair of the International Advisory Board of the Center for Chinese Agricultural Policy; a co-director of the University of California's Agricultural Issues Center; and a member of Stanford's Walter H. Shorenstein Asia-Pacific Research Center and the Center on Food Security and the Environment.
In recognition of his outstanding achievements, Rozelle has received numerous honors and awards, including the Friendship Award in 2008, the highest award given to a non-Chinese by the Premier; and the National Science and Technology Collaboration Award in 2009 for scientific achievement in collaborative research.
Department of Political Science
Stanford University
616 Serra Street
Stanford, CA 94305-26044
Jean C. Oi is the William Haas Professor of Chinese Politics in the department of political science and a Senior Fellow of the Freeman Spogli Institute for International Studies at Stanford University. She is the founding director of the Stanford China Program at the Walter H. Shorenstein Asia-Pacific Research Center. Professor Oi is also the founding Lee Shau Kee Director of the Stanford Center at Peking University.
A PhD in political science from the University of Michigan, Oi first taught at Lehigh University and later in the Department of Government at Harvard University before joining the Stanford faculty in 1997.
Her work focuses on comparative politics, with special expertise on political economy and the process of reform in transitional systems. Oi has written extensively on China's rural politics and political economy. Her State and Peasant in Contemporary China (University of California Press, 1989) examined the core of rural politics in the Mao period—the struggle over the distribution of the grain harvest—and the clientelistic politics that ensued. Her Rural China Takes Off (University of California Press, 1999 and Choice Outstanding Academic Title, 1999) examines the property rights necessary for growth and coined the term “local state corporatism" to describe local-state-led growth that has been the cornerstone of China’s development model.
She has edited a number of conference volumes on key issues in China’s reforms. The first was Growing Pains: Tensions and Opportunity in China's Transformation (Brookings Institution Press, 2010), co-edited with Scott Rozelle and Xueguang Zhou, which examined the earlier phases of reform. Most recently, she co-edited with Thomas Fingar, Fateful Decisions: Choices That Will Shape China’s Future (Stanford University Press, 2020). The volume examines the difficult choices and tradeoffs that China leaders face after forty years of reform, when the economy has slowed and the population is aging, and with increasing demand for and costs of education, healthcare, elder care, and other social benefits.
Oi also works on the politics of corporate restructuring, with a focus on the incentives and institutional constraints of state actors. She has published three edited volumes related to this topic: one on China, Going Private in China: The Politics of Corporate Restructuring and System Reform (Shorenstein APARC, 2011); one on Korea, co-edited with Byung-Kook Kim and Eun Mee Kim, Adapt, Fragment, Transform: Corporate Restructuring and System Reform in Korea (Shorenstein APARC, 2012); and a third on Japan, Syncretism: The Politics of Economic Restructuring and System Reform in Japan, co-edited with Kenji E. Kushida and Kay Shimizu (Brookings Institution, 2013). Other more recent articles include “Creating Corporate Groups to Strengthen China’s State-Owned Enterprises,” with Zhang Xiaowen, in Kjeld Erik Brodsgard, ed., Globalization and Public Sector Reform in China (Routledge, 2014) and "Unpacking the Patterns of Corporate Restructuring during China's SOE Reform," co-authored with Xiaojun Li, Economic and Political Studies, Vol. 6, No. 2, 2018.
Oi continues her research on rural finance and local governance in China. She has done collaborative work with scholars in China, including conducting fieldwork on the organization of rural communities, the provision of public goods, and the fiscal pressures of rapid urbanization. This research is brought together in a co-edited volume, Challenges in the Process of China’s Urbanization (Brookings Institution Shorenstein APARC Series, 2017), with Karen Eggleston and Wang Yiming. Included in this volume is her “Institutional Challenges in Providing Affordable Housing in the People’s Republic of China,” with Niny Khor.
As a member of the research team who began studying in the late 1980s one county in China, Oi with Steven Goldstein provides a window on China’s dramatic change over the decades in Zouping Revisited: Adaptive Governance in a Chinese County (Stanford University Press, 2018). This volume assesses the later phases of reform and asks how this rural county has been able to manage governance with seemingly unchanged political institutions when the economy and society have transformed beyond recognition. The findings reveal a process of adaptive governance and institutional agility in the way that institutions actually operate, even as their outward appearances remain seemingly unchanged.
