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UNCERTAINTY AND THE ECONOMY SCOTT R. BAKER, NICHOLAS BLOOM, & STEVEN J. DAVIS REDUCING THE GLOBAL NUCLEAR RISK SIDNEY D. DRELL, GEORGE P. SHULTZ, & STEVEN P. ANDREASEN THE CUBAN MISSILE CRISIS AS INTELLIGENCE FAILURE AMY B. ZEGART RICH DONORS, POOR COUNTRIES M.A. THOMAS ALSO: ESSAYS AND REVIEWS BY WILLIAM INBODEN, DALIBOR ROHAC, JAY COST, ROBERT HERRITT, PAUL KENGOR
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3 UNCERTAINTY AND THE ECONOMY Policy instability, rocky recovery Scott R. Baker, Nicholas Bloom, & Steven J. Davis 15 REDUCING THE GLOBAL NUCLEAR RISK Sparing no effort to ensure safety and security Sidney D. Drell, George P. Shultz, & Steven P. Andreasen 23 THE CUBAN MISSILE CRISIS AS INTELLIGENCE FAILURE Fifty years of reluctance to draw an unwelcome conclusion Amy B. Zegart 41 RICH DONORS, POOR COUNTRIES The harm done when expectations exceed capacity M.A. Thomas 55 RELIGIOUS FREEDOM AND NATIONAL SECURITY Why the U.S. should make the connection William Inboden 69 ECONOMIC TRANSITIONS: LEARNING FROM CENTRAL EUROPE Policy prescriptions for the Arab world Dalibor Rohac
Books
81 THE EXPANDING POWER OF THE PRESIDENCY Jay Cost on The Presidents Czars: Undermining Congress and the Constitution by Mitchel A. Sollenberger and Mark J. Rozell 86 THE MARKET DEMOCRACY PROJECT Robert Herritt on Free Market Fairness by John Tomasi 91 THE ELITEST ELITE Paul Kengor on The Presidents Club: Inside the Worlds Most Exclusive Fraternity by Nancy Gibbs and Michael Duffy
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he u.s. economy hit bottom in June 2009. Thirty months later, output growth remains sluggish and unemployment still hovers above 8 percent. A critical question is why. One view attributes the weak recovery, at least in part, to high levels of uncertainty about economic policy. This view entails two claims: First, that economic policy uncertainty has been unusually high in recent years. Second, that high levels of economic policy uncertainty caused households and businesses to hold back significantly on spending, investment, and hiring. We take a look at both claims in this article.
Scott R. Baker is a Ph.D. candidate in the Stanford University Department of Economics, where Nicholas Bloom is a professor. Steven J. Davis is deputy dean of the faculty and William H. Abbott professor of international business and economics at the University of Chicago Booth School of Business. This essay is excerpted from Government Policies and the Delayed Economic Recovery, published by Hoover Press in August.
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200 Balanced Budget Black Act Monday 1st Gulf War Clinton Election
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50 2001 2003 2005 2007 2009 1985 1987 1989 1991 1993 1995 1997 1999 2011
Note: The index is an aggregation of four components: a scaled count of news articles that refer to the economy, uncertainty, and policy; a time-discounted sum of scheduled expirations of federal tax code provisions; and indexes of disagreement among professional forecasters about future cpi levels and about government purchases of goods and services. See text for details. Data and updates are available at www.policyuncertainty.com.
We start by considering an index of economic policy uncertainty developed in our 2012 paper Measuring Economic Policy Uncertainty. Figure 1, which plots our index, indicates that economic policy uncertainty fluctuates strongly over time. The index shows historically high levels of economic policy uncertainty in the last four years. It reached an all-time peak in August 2011. As discussed below, we also find evidence that policy concerns account for an unusually high share of overall economic uncertainty in recent years. Moreover, short-term movements in overall economic uncertainty more closely track movements in policy-related uncertainty in the past decade than in earlier periods. In short, our analysis provides considerable support for the first claim of the policy uncertainty view. The second claim is harder to assess because it raises the difficult issue of identifying a causal relationship. We do not provide a definitive analysis of the second claim. We find evidence that increases in economic policy uncertainty foreshadow declines in output, employment, and investment. While we cannot say that economic policy uncertainty necessarily causes these negative developments since many factors move together in the economy we can say with some confidence that high levels of policy uncertainty are associated with weaker growth prospects.
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useful feature of the news-based approach to measuring uncertainty is its flexibility. We exploit that flexibility to quantify the extent to which policy-related uncertainty accounts for overall economic uncertainty. We also use the news-based approach to uncover specific sources of policy uncertainty. For these exercises, we rely on data from Google News. The higher volume of news articles captured by Google News is especially useful when we slice the data into particular policy categories. Figure 2 shows two indexes. The lower data line is our Google Newsbased index of economic policy uncertainty, constructed using the method figure 2 Policy uncertainty and overall economic uncertainty, January 1985 to December 2011
2nd Dissolution Gulf War of USSR 1000 Russian 9/11 1st Gulf Financial Crisis/ Clinton War LTCM 1987 stock Election Bush market Asian Election crash Financial Recession Crisis Fears Lehman and TARP Debt Ceiling Dispute; Eurozone Crisis
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Overall Economic Uncertainty Policy-Related Economic Uncertainty 10 1985 1990 1995 Year 2000 2005 2010
Note: The index of overall economic uncertainty is a scaled count of Google News articles that refer to the economy and uncertainty. The index of policy-related uncertainty is a scaled count of Google News articles that refer to the economy, uncertainty, and policy.
3. Although much less pronounced, we also found elevated levels of policy uncertainty in 2010 and 2011 in several other categories: entitlement programs, health care, financial regulation, labor regulation, and sovereign debt and currency issues. In short, our analysis indicates that the historically high levels of policy uncertainty in 2010 and 2011 mainly reflect concerns about tax and monetary policy and secondarily a broader range of other policy-related concerns. We also approach the connection between economic uncertainty and poli10
2. The historically high levels of economic policy uncertainty in 2010 and 2011 predominantly reflect concerns about taxes and monetary policy. Policy uncertainty in these two areas is more than four times higher in the last two years than on average from 1985 to 2011, judging by frequency counts of news articles.
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Notes: Impulse response functions for industrial production and employment to a 112-unit increase in the policy-related uncertainty index (the measured increase from 2006 to 2011). Estimated using a monthly vector auto regression on data from 1985 to 2011.
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Preliminary conclusions
his article summarizes our efforts to measure economic policy uncertainty and assess its effects on economic performance. Our research is ongoing, but we can draw a few preliminary conclusions at this point: Policy uncertainty has been at historically high levels over the past four years. This conclusion finds support in our new index of economic policy uncertainty and in our analysis of the factors that precipitate big movements in the stock market. Policy-related concerns now account for a large share of overall economic uncertainty. Here as well, this conclusion finds support in both the analysis of our news-based indexes and in our investigation into the factors that precipitate big stock market moves. A rise in policy uncertainty, similar in magnitude to the actual change since 2006, is associated with substantially lower levels of output and employment over the subsequent 36 months.
We think the weight of the evidence and the lessons of economic theory argue for assigning some weight to the policy uncertainty view. If policymakers can deliver a policy environment characterized by greater certainty and stability, there will likely be a positive payoff in the form of improved macroeconomic performance.
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he times we live in are dangerous for many reasons. Prominent among them is the existence of a global nuclear enterprise made up of weapons that can cause damage of unimaginable proportions and power plants at which accidents can have severe, essentially unpredictable consequences for human life. For all of its utility and promise, the nuclear enterprise is unique in the enormity of the vast quantities of destructive energy that can be released through blast, heat, and radioactivity. To get a better grip on the state of the nuclear enterprise, we convened a group of prominent experts at Stanford Universitys Hoover Institution. The group included experts on nuclear weapons, power plants, regulatory experience, public perceptions, and policy. This essay summarizes their views and conclusions.
Sidney D. Drell is a senior fellow at the Hoover Institution, where George P. Shultz is Thomas W. and Susan B. Ford distinguished fellow. Steven P. Andreasen is a lecturer at the Humphrey School of Public Affairs at the University of Minnesota.
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he nuclear enterprise was introduced to the world by the shock of the devastation produced by two atomic bombs hitting Hiroshima and Nagasaki. Modern nuclear weapons are far more powerful than those early bombs, which presented their own hazards. Early research depended on a program of atmospheric testing of nuclear weapons. In the early years following World War II, the impact and the amount of radioactive fallout in the atmosphere generated by above-ground nuclear explosions was not fully appreciated. During those years, the United States and the Soviet Union conducted several hundred tests in the atmosphere that created fallout. A serious regulatory weak point from that time still exists in many places today, as the Fukushima disaster clearly indicates. The U.S. Atomic Energy Commission (aec) was initially assigned conflicting responsibilities: to create an arsenal of nuclear weapons for the United States to confront a growing nuclear-armed Soviet threat; and, at the same time, to ensure public safety from the effects of radioactive fallout. The aec was faced with the same conundrum with regard to civilian nuclear power generation. It was charged
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Three principles
t is evident that globally, the nuclear enterprise faces new and increasingly difficult challenges. Successful leadership in national security policy will require a continuous, diligent, and multinational assessment of these newly emerging risks and consequences. In view of the seriousness of the potentially deadly consequences associated with nuclear weapons and nuclear power, we emphasize the importance of three guiding principles for efforts to reduce those risks globally: First, the calculations used to assess nuclear risks in both the military and
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Reducing risks
o reduce these nuclear risks, we offer four related recommendations that should be adopted by the nuclear enterprise, both military and civilian, in the United States and abroad.
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he cuban missile crisis marks its 50th anniversary this year as the most studied event of the nuclear age. Scholars and policymakers alike have been dissecting virtually every aspect of that terrifying nuclear showdown. Digging through documents in Soviet and American archives, and attending conferences from Havana to Harvard, generations of researchers have labored to distill what happened in 1962 all with an eye toward improving U.S. foreign policy. Yet after half a century, we have learned the wrong intelligence lessons from the crisis. In some sense, this result should not be surprising. Typically, learning is envisioned as a straight-line trajectory where time only makes things better. But time often makes things worse. Organizations (and individuals) frequently forget what they should remember and remember what they should forget. One of the most widely accepted lessons of that frightening time that the discovery of Soviet missiles in Cuba constituted a stunning American
Amy B. Zegart is a senior fellow at Stanford Universitys Hoover Institution and the author, most recently, of Eyes on Spies: Congress and the United States Intelligence Community. She writes an intelligence column at foreignpolicy.com.
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intelligence success needs to be challenged. An equally stunning intelligence-warning failure has been downplayed in Cuban missile crisis scholarship since the 1960s. Shifting the analytic lens from intelligence success to failure, moreover, reveals surprising and important organizational deficiencies at work. Ever since Graham Allison penned Essence of Decision in 1971, a great deal of research has focused on the pitfalls of individual perception and cognition as well as organizational weaknesses in the policymaking process. Surprisingly little work, however, has examined the crucial role of organizational weaknesses in intelligence analysis. Many of these same problems still afflict U.S. intelligence agencies today.
he empirical record of U.S. intelligence assessments leading up to the crisis is rich. We now know that between January and October 1962, when Soviet nuclear missile sites were ultimately discovered, the cias estimates office produced four National Intelligence Estimates (nies) and Special National Intelligence Estimates (snies) about Castros communist regime, its relationship with the Soviet Bloc, its activities in spreading communism throughout Latin America, and potential threats to the United States. These were not just any intelligence reports. nies and snies were and still are the gold standard of intelligence products, the most authoritative, pooled judgments of intelligence professionals from agencies across the U.S. government. Sherman Kent, the legendary godfather of cia analysis who ran the cias estimates office at the time, described the process as an estimating machine, where intelligence units in the State Department, military services, and cia would research and write initial materials; a special cia estimates staff would write a draft report; an interagency committee would conduct a painstaking review; and a full-dress version of the estimate would go down an assembly line of eight or more stations before being approved for dissemination.1 The four pre-crisis estimates of 1962 reveal that U.S. intelligence officials were gravely worried about the political fallout of a hostile communist regime so close to American shores and the possibility of communist dominoes in Latin America. But they were not especially worried about risk of a military threat from Cuba or its Soviet patron. The first estimate, released January 17, 1962 (snie 8062), was a big-think piece that assessed threats to the United States from the Caribbean region over the next 20 years. Although the estimate considered it very likely that communism across the region would grow in size during the coming decade, it concluded that
1. Sherman Kent, The Cuban Missile Crisis: A Crucial Estimate Relived, originally published in Studies in Intelligence (Central Intelligence Agency, Spring 1964).
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The fourth and crucial estimate before the crisis was released September 19, 1962 (snie 85362). This time, however, the situation was vastly changed: Starting in mid-July, a stream of intelligence reporting from both technical and human sources began indicating a massive arms buildup. This reporting increased dramatically in August and September, and the estimates heading reflected these developments. Whereas the March and August estimates were blandly titled, The Situation and Prospects in Cuba, the Special National Intelligence Estimate of September 19th carried a more ominous title: The Military Buildup in Cuba. The estimate notes that between mid-July and early September, approximately 70 ships had delivered Soviet weaponry and construction equipment. That number was three to four times greater than total Soviet shipments for the entire first half of 1962. Indeed, so concerned was President Kennedy by the new intelligence that he made explicit public warnings on September 4th and again on September 13th that if the Soviets placed offensive weapons in Cuba, the gravest issues would arise, a warning understood to imply potential nuclear confrontation. Nevertheless, this crucial intelligence estimate still concluded that Soviet policy remains fundamentally unaltered. For the fourth time in nine months, a national intelligence estimate asserted that Soviet activities in Cuba were meant to deter an American attack there and sustain a vital ideological victory for the communist cause. Engrossed by the political threat of a strengthened communist regime in the Western hemisphere, the estimate considered but ultimately dismissed the possibility of a major offensive Soviet base. The establishment on Cuban soil of Soviet nuclear striking forces which could be used against the U.S. would be incompatible with Soviet policy as we presently estimate it, the estimate starkly concluded. The estimate justified this judgment at some length, noting that the Soviets had never placed any such weapons even in Soviet satellite countries before,2 that missiles would pose significant command and control problems, that they would require a conspicuously larger number of Soviet personnel in Cuba, and that the Soviets would almost certainly know that such a move would provoke a dangerous U.S. reaction. Two years later, Sherman Kent categorically concluded that the September
2. We know now that the Soviets had, in fact, deployed nuclear missiles to East Germany briefly in 1959 and that some U.S. intelligence officials suspected as much before the Cuban missile crisis broke. A January 4, 1961, memo from Hugh S. Cumming to the secretary of state, Deployment of Soviet Medium Range Missiles in East Germany, notes that a special intelligence working group has recently prepared a report which concluded that as many as 200 mrbms [medium range ballistic missiles] may have been moved into East Germany between 1958 and the fall of 1960. Yet this working group and its judgments never made it into the September 19, 1962, Cuba Special National Intelligence Estimate. Nor did the possibility of a precedent-setting Soviet nuclear missile deployment to a satellite country appear to reach the president. In the October 22, 1962, ExComm meeting, President Kennedy told his colleagues that no Soviet Eastern European satellite had nuclear weapons and that this would be the first time the Soviet Union had moved these weapons outside their own territory. Why the East German special intelligence report seems to have been unknown or disregarded by the estimating machine and its policymaking customers remains unclear.
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4. Raymond L. Garthoff, U.S. Intelligence in the Cuban Missile Crisis, Intelligence and National Security 13:3 (1998).
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Warning, the essence of warning is not presenting a list of iron-clad facts but anticipating and preventing the looming and murky danger of strategic surprise. To be sure, for most of 1962, there were no nuclear missiles in Cuba to be found.5 Still, none of the intelligence estimates sounded the alarm to be on the lookout for such a possibility; indicated specifically what factors, other than large numbers of troops, might conceivably change the assessment of Khrushchevs intentions; or urged policymakers to take seriously the idea that the Soviets could be up to something more. Quite the contrary. All four of the estimates had a distinctly reassuring quality to them, highlighting inferences and evidence in ways that suggested policymakers need not worry about a Soviet offensive base in Cuba. Rather than inoculating the Kennedy administration against the horrors of a possible Soviet missile surprise in Cuba, the estimates made the surprise all the more sudden, shocking, and total. Second, the contingency of history also cautions against finding intelligence warning success in chancy, happy outcomes. In the case of the Cuban missile crisis, each passing decade brings new and frightening evidence of how Kennedys seizing the initiative after seeing those u2 photographs of missile sites nearly led to nuclear disaster, not American victory. Transcripts of Kennedys secret Excomm meetings reveal that had the president made his decision on the first day of the crisis rather than the seventh, the United States would have launched an air strike against Soviet missiles in Cuba that could very well have triggered thermonuclear war. Scott Sagan has chronicled numerous instances during the crisis where mistakes (an American u2 pilot who accidentally flew into Soviet airspace, bringing with him American f102-a interceptors armed with Falcon nuclear air-to-air missiles) or routine military procedures (including a previously scheduled test tape of a Soviet missile attack that ran during the crisis and was mistakenly identified as a real incoming strike) nearly spiraled out of control. In 2002, scholars unearthed terrifying new evidence that one Soviet submarine captain actually did order preparations to launch a nuclear-tipped torpedo off the American coast. On October 27, bombarded by U.S. Navy depth charges and running out of air, the Soviet Captain gave the order to prepare a nuclear weapon for firing. Were going to blast them now! We will die, but we will sink them all. We will not disgrace our navy, the Soviet intelligence report quotes the Soviet captain as saying. But in the heat of the moment, another submarine officer, Vasili Arkhipov, convinced him to await further instructions from Moscow.6 In short, the mounting evidence of narrow misses during the crisis suggests that luck played a pivotal role, and that the outcome could easily have been tragic. One wonders whether observers would
5. Nor did Khrushchev give any indications that something was afoot. The Soviets mounted a substantial denial and deception program to keep the deployment secret.
6. Marion Lloyd, Soviets Close to Using A-Bomb in 1962 Crisis, Forum Is Told, Boston Globe (October 13, 2002).
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ing was so hard, intelligence research on the crisis has focused primarily on cognitive psychology and the pitfalls inherent in human cognition. Organizational explanations, by contrast, have remained an under-tilled area. While much has been made of bureaucratic politics in presidential decision-making, little has been done to examine the silent but deadly role of organizational weaknesses in intelligence during the Cuban missile crisis. But more recent analyses of the September 11 terrorist attacks and the faulty estimates of Iraqs weapons of mass destruction suggest that organizational weaknesses in intelligence can have devastating effects. And regarding the Cuban missile crisis, there are lingering questions surrounding such weaknesses. Why did estimators miss the signals of Khrushchevs true intentions? Rarely do we Signals and noise have been a major part of every examine the intelligence post-mortem since Pearl Harbor. Roberta Wohlstetter, who coined the terms, silent observed that intelligence warning requires analysts organizational to separate signals, or clues that point to an adverstructures and sarys future action, from a background that is filled with noise, or intelligence indicators that turn out processes that to be irrelevant, confusing, or just plain wrong. After determine the fact, of course, the signals are obvious. Like the whether signals detective-story reader who turns to the last page first, Wohlstetter writes, we find it easy to pick get noticed or out the clues.7 Detecting the right signals before disaster strikes, however, is another matter. ignored. Wohlstetters important insight warns against the perils of hindsight bias. But it has also generated analytic pathologies of its own, focusing our sites more on the ratio of signals to noise and the analytic techniques to improve individual perception than the organizational forces that cause signals to get noticed or missed. Each time an intelligence surprise occurs, commissions, congressional committees, and scholars are quick to ask, How many signals were there? How much noise existed? What analytic mistakes were made? The answer is always the same: too few signals, too much noise, too many erroneous assumptions or inferences. Rarely, however, do we examine the silent organizational structures and processes that determine whether signals get noticed or ignored, amplified or dispersed. We have missed the crucial role of organizations. A brief comparison of the Cuban missile crisis and the September 11 terrorist attacks illustrates the point. Immediately after the Cuban missile crisis, the steady refrain was that intelligence noise was tremendous while signals were scarce. cia Director John McCone wrote that his agency received
7. Roberta Wohlstetter, Cuba and Pearl Harbor: Hindsight and Foresight, Foreign Affairs 43 (196465).
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attending U.S. flight schools and wrote a memo urging that flight schools be contacted, specific individuals be investigated, and other intelligence agencies, including the cia, be notified. In Minneapolis, fbi agents arrested Zacarias Moussaoui, a suspicious extremist who wanted to fly 747s and paid $6,000 in cash to use a flight simulator but lacked all of the usual credentials. He became the only person convicted in the U.S. for his connection to the attacks. Third and finally, the fbis New York field office began searching for Khalid al-Mihdhar and Nawaf al-Hazmi, two suspected alQaeda operatives who ultimately hijacked and crashed American Airlines Flight 77 into the Pentagon. Yet because the fbi field office structure was highly decentralized, none of the agents working these cases knew about the others. And because a gaping divide separated domestic It is the case and foreign intelligence agencies, the cia and the that in 1962 , rest of the U.S. intelligence community never seized just as in 2001 , these or other fbi leads in time, either. Instead, the Phoenix memo gathered dust, alerting no one. the Central Moussaouis belongings (which included additional leads to the 9/11 plot) sat unopened for weeks as Intelligence Minneapolis agents tried to obtain a search warrant Agency was unaware of the Phoenix memo or the existence of another terrorist in fbi custody who could have central in identified Moussaoui from al-Qaedas training name only. camps. An fbi agent went searching blindly for alMihdhar and al-Hazmi in New York hotels, unaware that the Bureaus San Diego field office had an informant who knew both terrorists. In these cases, and 20 others, someone somewhere in the intelligence bureaucracy noticed something important. These and other signals were not drowned out by the noise. They were found, and then subsequently lost in the bowels of the bureaucracy. Even a cursory look at the Cuban missile crisis suggests that structural fragmentation appears to have played a similar role then, isolating and weakening signals rather than concentrating and amplifying them. In 1962, just as in 2001, the Central Intelligence Agency was central in name only. Created just fifteen years earlier, the cia had been hobbled from birth by existing intelligence agencies in the State, Justice, War, and Navy Departments, all of which vigorously protected their own missions, budgets, and power. The cia, in fact, did not control the intelligence budgets or activities of the Defense Intelligence Agency, the National Security Agency, or any of the military intelligence services, all of which reported to the secretary of defense. Whats more, the Bay of Pigs debacle of April 1961 made a weak cia even weaker. Kennedys own distrust was so great that he sacked cia Director Allen W. Dulles and replaced him with a man none of his inner circle trusted: John McCone, a Republican businessman with staunch anticommunist leanings and no professional intelligence experience.
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takenly interpreted the verification rule as an outright ban on publishing all reports of offensive Soviet weapons without definitive photographic proof. This same rigid bureaucratic division between analysis and photographic collection created a filter that appears to have hindered initial signal detection as well. According to the pfiab chronology, a September 9th report from Castros personal pilot claimed that there were many mobile ramps for intermediate range rockets, an item subsequently deemed significant. At the time, however, it was given only routine precedence because the cia analyst who saw it was charged with identifying information relevant for aerial surveillance, and thought the information was too general to be of targeting use. In short, preliminary evidence suggests that the same organizational barriers operating on 9/11 were Preliminary also at work during the missile crisis. Indeed, given evidence suggests the long and sordid history of intelligence coordination problems, it seems unlikely that Cuban intellithat the same gence reporting constituted a shining exception organizational where intelligence warning signals were collected, barriers operating assessed, and disseminated by a well-oiled coordination machine. Instead, in both cases, bureaucratic on 9/11 were jurisdictions and standard operating procedures also at work ended up creating invisible fault lines within and across intelligence agencies that kept signals from during the converging. Structural fragmentation made it likely missile crisis. that signals would get lost, even after they had been found. Why were all four of the pre-crisis estimates so consistent, even in the face of alarming new evidence of a Soviet military buildup? The four pre-crisis intelligence estimates of 1962 raise a second perplexing question: Why were these formal intelligence products so consistent even when intelligence reporting showed a dramatic uptick in Soviet military deployments to Cuba? Or more precisely, why did that final September 19th special estimate draw old conclusions about Khrushchevs intentions despite new evidence that the Soviets were sending weapons and personnel in unprecedented numbers at unprecedented rates in August and September? Recall that the estimate clearly indicated conditions on the ground had changed since the previous estimate, which was published on August 1, 1962. The September 19th estimate begins by defining its task as assessing the strategic and political significance of the recent military buildup in Cuba and the possible future development of additional military capabilities there. And it devotes substantial attention to discussing the precise nature of the buildup, declaring as fact that In July the Soviets began a rapid effort to strengthen Cuban defenses against air attack and major seaborne invasion. Notably, there are few estimative caveats in this section such as we judge, or we assess, or it is likely. Instead, the estimate states as a point
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not the product of a single mind, a single view, or even a single agency. They were collective reports that required interagency coordination and consensus. And that organizational fact of life tilted the whole estimating machine toward consistency over time. Why? Because consistency was what policymaking customers expected to find. Presidential advisors did not need to be convinced that the world essentially looked the same today as it did last month. But they did need to be convinced that the world looked different. Where consistency was a given, inconsistency had to be explained, justified, and defended. Changing a previous estimate required taking a fresh look, marshaling both new and old facts, and laying out what had shifted, and why. That, in turn, meant overcoming immense bureaucratic inertia convincing every intelligence agency involved in the estimating process that what Changing a it said or assessed or wrote or agreed to the last previous estimate time should be discarded or modified this time. required taking Changing an earlier estimate did not just take more work inside each agency. It took more work negotia fresh look, ating new agreement across them. Generating intermarshaling both agency consensus on a new estimate that said we have changed our collective minds was invariably new and old harder than producing a report that said once facts, and laying again, we agree with what we wrote last time. In short, organizational dynamics naturally gave conout what had sistency the upper hand. shifted and why. Political considerations exacerbated these problems. By political considerations, I do not mean to suggest that estimators bent their judgments to curry favor or told policymakers what they wanted to hear. Instead, my point is that switching course on an analytic judgment is always harder when the political stakes for the country and the administration are known to be high. In these situations, any new estimate that revises earlier judgments can be seized, however unjustifiably, as proof that earlier estimates were wrong. The political atmosphere surrounding the Cuba estimates was intense. The Cold War stakes had never been greater and the cia had already caused Kennedy a devastating defeat in the Bay of Pigs invasion just eighteen months earlier. Now, with midterm congressional elections just weeks away, the pressure to get Cuba right was tremendous. In this environment, an intelligence estimate that gave serious consideration to a new, more ominous reading of the Soviet buildup would almost certainly have been read as an indictment of earlier, less alarming estimates. And it would have contradicted earlier public assurances by the president himself, as well as his closest advisors, that the Soviet buildup was purely defensive in nature. Such considerations may not have been in the foreground of the estimates process, but it is hard to imagine that they were not in the background. At that precise moment, on that particular topic, consistency was a safe and prudent
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labor into subunits enables experts to tackle specialized tasks in specialized ways. On the other hand, however, specialization generates organizational structures and standard operating procedures that filter out information and keep an organization from learning. Standard ways of writing reports, assembly line production processes, and rigid communication channels all of these things help managers work across sub-units efficiently. But they also keep ideas that do not fit into the normal formats and channels from getting heard. Reports, for example, are written in certain ways, with certain types of information, for certain purposes, and certain audiences. This setup is designed to create a standard product precisely by weeding out nonstandard ideas and approaches. Organizations are filled with these kinds of standard formats and operating procedures. The trouble is that the more that things get done the same way Fifty years each time, the harder it is to do things differently. after the Cuban The entire system becomes a well-oiled machine that, by its very existence, keeps alternative ideas or missile crisis, ways of operating from getting through. intelligence Information that could be valuable to the organization remains hidden. Organizational structure crewarning is still ates its own kind of secrecy. plagued by many The estimates process in the Cuban missile crisis seemed ripe for structural secrecy problems. It was of the same highly specialized, with multiple units, offices, and challenges. agencies collecting and analyzing different pieces of the Cuba intelligence puzzle. It was also highly routinized. Kent himself describes the estimates process as a machine, with specific stations, regularized processes, and an assembly line production. The process was well-honed, and the product was highly standardized. Notably, one of the key features of the estimating machine was its evidentiary standard for revising earlier estimates or voicing dissenting views. Kent writes extensively about what it would have taken to revise the September 19th estimate or offer a dramatically different, stronger view of the buildup and concludes that the evidence was simply not there. These pre-October 14 data almost certainly would not, indeed should not, have caused the kind of shift of language in the key paragraphs that would have sounded the tocsin, he writes. The same was true of footnotes, which were ordinarily used for airing disagreements about evidence. In other words, the estimating process was all about data: collecting it, interpreting it, distilling it, and assessing what it meant. The machine started with evidence and ended with judgments. The cia directors approach never fit into this standard operating procedure. Indeed, McCone had it backwards. He did not have evidence in search of a judgment. He had a hypothesis in search of evidence. And there was no place in the National Intelligence Estimates or Special National Intelligence Estimates for such things. No wonder McCone never tried to inject himself into those reports. Instead, he
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ifty years after the Cuban missile crisis, intelligence warning is still plagued by many of the same challenges. Evidence misleads. Enemies deceive. Analysts misjudge. Failures result. The September 11 attacks and the faulty estimates of Iraqs weapons of mass destruction are potent reminders that intelligence warning remains, as Kent put it 48 years ago, a hazardous occupation. And yet, some of the most powerful barriers to effective intelligence warning remain relatively unexplored. Intelligence, at its core, is a collective enterprise. Organizations are not passive players, where individuals do all of the hard thinking and make all of the tough calls. Instead, organizations powerfully influence whether signals get amplified or weakened, whether analysis looks backward at continuity or leans forward toward disjuncture, and whether dissent gets highlighted or hidden.
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he shifting ideological winds of foreign aid donors have driven their policy towards governments in poor countries. Donors supported state-led development policies in poor countries from the 1940s to the 1970s; market and private-sector driven reforms during the 1980s and 1990s; and returned their attention to the state with an emphasis on governance and government social spending thereafter. Poor countries sometimes called low-income economies or least-developed countries have over the decades been a proxy battleground for the Western left and the right, with heated debates about the merits of infant industry protection, privatization of public utilities, government-provided health care, and the role of government more generally. Both liberals and conservatives in the West have more in common than they realize, however. Their policy preferences have evolved in the richest countries in the world, with well-financed governments that carry out an
M.A. Thomas is an associate professor of international development at the Paul H. Nitze School of Advanced International Studies at the Johns Hopkins University.
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ever-growing number of functions under the rule of law. Much of their sense of what is minimally acceptable in government is a relatively recent product of wealth. Yet they do not hesitate to apply their home-grown standards to governments in poor countries. While it may seem obvious that the governments of poor countries are themselves poor, donors have largely failed to appreciate the enormity of the gap between the revenues of poor country governments and of their own governments. They have taken for granted the government-provided prerequisites that make their favorite policies work at home. When their policy prescriptions fail in poor countries, donors blame the failure on corruption and weak political will for implementation. But even with clean government and the best will, many of their policy prescriptions are unlikely to succeed. The poorest countries do not have the resources to build weaker versions of Western governments. Their attempt to do so spreads government too thin, making it impossible for the government to deliver on its commitments and making both law and government policy declarations aspirational. Instead, poor countries will have to build sustainable governments commensurate with their resources, which will necessarily be governments of more limited function. Donors shrink before the hard choices, and their reluctance to acknowledge them undermines the quality of government in poor countries and deepens poor country aid dependence.
M.A. Thomas
boat is carried rapidly downstream. In fact, the 20th century saw an explosive growth in government spending, size, and functions throughout the industrialized world. In 1902 in the United States, for example, total government spending was about 0.8 percent of the gross domestic product, or about $36.7 billion in 2011 dollars. By 2010, total government spending had risen to 35 percent of gdp, or about $5 trillion. This expansion of spending was accompanied by an expansion in the number and the extent of government functions. A few of the new U.S. government activities of the 20th century include the creation of a social safety net through the Social Security Act of 1965 (including the creation of Medicare and Medicaid) and unemployment compensation, federal aid to public education and federal financial A fundamental aid for students, and a host of new regulatory activities and the bureaucracies to carry them out e.g., obstacle to protections against discrimination on the basis of race or gender, labor laws such as those providing development is for workplace safety and restricting child labor, the inability of environmental laws and regulations including the poor-country Clean Air, Water Quality, and Clean Water Restoration Acts and the Endangered Species Act, governments to and market-supporting laws and regulations such as implement the antitrust, securities, and consumer protection laws. In addition to new functions, older functions of govpolicies that ernment grew in extent, complexity, and quality. donors push. Staff-patient ratios dropped in hospitals and student-teacher ratios dropped in schools where computers are increasingly seen as necessary teaching technology. Nor was this expansion of government peculiar to the United States. Increased public sector spending prompted economist Adolph Wagner to propose Wagners Law in 1893. Wagners Law states that there is a long-run tendency for the public sector to grow in relationship to the size of the economy in industrialized countries. Advocates have pressed to expand notions of human rights, with concomitant obligations for governments. The Universal Declaration of Human Rights, drafted shortly after World War II with strong participation from socialist countries, specifies in Article 25 a persons right to food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. Similarly, Article 26 provides that everyone has the right to free and compulsory elementary education and to technical and professional education. While the drafting committee was deliberately ambiguous about the corresponding duty of states to supply these goods, these articles have been used to support an argument of government duty where such a duty has not simply been assumed.
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he donor community has come to see the inability of poor governments to implement the policies that donors consider to be essential as a fundamental obstacle to development. Donors are focused intently on strengthening and reforming poor governments, by financing projects and providing technical assistance. They condition aid on the creation of new institutions, civil service reform, strengthening of budget and public expenditure systems, training of political parties and election monitoring, promotion of decentralization, and improving public service delivery. As a consequence, the good governance agenda for developing countries grew in importance. In 2010, World Bank lending for the Public Administration, Law, and Justice sector comprised 18 percent of the banks loans. In 2009 in Niger, for example, the United Nations, the World Bank, France, Germany, Japan, Canada, Italy, the United States, Spain, Sweden, Luxembourg, and Norway were funding more than 100 projects aimed at reforming or strengthening governance and civil society. Included were projects focused on promoting childrens rights, promoting womens rights, reforming the juvenile justice system, anticorruption, conflict prevention, promoting the free flow of information, decentralization, and government capacity building. Most donor attention has focused on what is termed the lack of capacity of recipient governments, meaning the lack of trained personnel, equipment, and infrastructure. Donors have attempted to build recipient capacity through training programs, equipment drops, the construction of infrastructure such as schools, hospitals, government buildings, and roads, incentive programs, and direct budget support.
1. Chester Hartman, The Case for a Right to Housing, Housing Policy Debate 9:2 (1998). .
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Less attention has been given to the political constraints on the achievement of the good governance agenda because they are politically inconvenient. Many poor governments depend critically on the political support of persons who expect private benefits from government, such as government jobs, contracts, or opportunities for income generation through sale of influence or access to government property. While donors presume that the purpose of government is the delivery of public goods and services, this purpose is a distant second priority for those governments whose philosophy is, in the words of one development professional speaking privately, Capture the state, bleed it dry, help your friends, and screw your enemies. This is certainly an important constraint, because it means that there is fundamental disagreement between donors and many aid recipients about the purpose of government. Donors may Donors sometimes blame poor country governoverlook fiscal ments for their lack of political will to implement agreed reforms and projects. But there is an addiconstraints tional and equally important constraint that prebecause there are vents poor governments from implementing the no commonly donors policy agenda, including the governance agenda a constraint that is simultaneously very used metrics for obvious and somehow routinely overlooked. This is comparing the fiscal constraint. The governments of poor countries are themselves very poor too poor to afford government the type of government institutions and services wealth. upon which donors often insist. One reason why donors may be insufficiently focused on the fiscal constraint is that there are no commonly used metrics for cross-country comparisons of government wealth. Government budgets are too large to grasp intuitively. They are in different currencies. And as the countries themselves are not easily comparable, there is no reason to imagine that their governments should have the same budgets. A metric that could give an appreciation for available government resources for the provision of public goods and services might be revenue per capita. It is an admittedly crude measure because the size of the population is not the only factor that could influence the cost of providing government services, which is also influenced by factors such as quality of governance, area, population density, geographic remoteness, or the differing mix of public and private goods offered by different governments. But by looking at best estimates of revenue per capita, one can start to get an appreciation for the enormity of the gap between the resources available to donor and recipient governments. By way of comparison, in 1902 in the United States total government spending at all levels was about $438 per capita in 2011 dollars. In 2010, it was $16,417 per capita. Our data on government revenue is sketchy for poor countries, but drawing on data from the Central Intelligence Agency revenue per capita was about $77 in Niger in 2011, $64
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any political party, any government, is going to be under terrific pressure to spread education universally, but very, very thin. And nothing eats money more rapidly than universal free primary education. And yet, you may say, its the inalienable right of every child to have it.2) Uganda went on to adopt universal secondary education in 2007. Donors also contribute to the problem by failing to consider the cost to the recipient government of implementing donor supported and demanded policies, reforms, projects, and programs. And even where donors consider the initial costs to government of implementation, they often fail to consider recurring costs. For more than 30 years aid practitioners and scholars have called attention to the recurrent cost problem in aid, although donor awareness has not often translated into donor action. Donor funds pay for the construction of roads or schools but the future operation, maintenance, and repair costs fall on the aid recipient government. Too often the recipient government is either unwilling or unable to maintain the donor gift, and both donors and recipient governments ignore the liabilities that they are creating for future governments. As recently as 2005, donors issued the Paris Declaration in which they committed to provide support for recurrent costs, but there are few incentives for follow-through. Donors own budget cycles make it difficult for them to make long-term financial commitments, and supporting initial construction results in more visible and tangible outcomes that can be used to demonstrate donor effectiveness to their own domestic constituents. Efforts to convince donors to finance poor government budgets directly have been unsuccessful. While the recurrent cost problem is most obvious in infrastructure, where roads crumble and must be rebuilt after every rainy season, nearly every government policy and reform has implementation and recurrent costs. For example, donors support and demand legal changes, but rarely carry out an analysis of the cost of implementation of the policies for which the laws are vehicles. Antony Allott, a law professor at the University of Londons School of Oriental and African Studies, described in 1968 the failure to consider recurrent costs of legislative reform in the African context:
Whatever else African countries may lack in the way of modern armies, a literate population, an adequate infrastructure, large capital resources, and an experienced cadre of leaders at all levels, there is one thing they all have, which can be as rapidly and cheaply manufactured as paper money and which has the same tempting property of seeming to be available to solve all problems: that is legislative power.3
3. Antony Allott, The unification of laws in Africa, American Journal of Comparative Law 16:51 (1968).
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streams of funding. The dependence of poor country governments on donor funds gives donors strong leverage, which they in turn often use to press for expanded government obligations in a damaging downward spiral.
Delicate sensibilities
he premise of development is that poor countries economies will grow, and with economic growth comes increased revenue and a wider range of government policy choices. Poverty is not destiny, and there are a number of countries that, since the 1950s, have succeeded both in terms of economic growth and improved governance and graduated from the group of the poorest countries. But this still does not mean that Western governments are the ideal models for poor country governments, like hand-me-down pants into which one day every country will grow. There is no reason to imagine that every country in the world will one day be as rich as the richest countries, and even if so, it will not happen soon. If Burundi enjoyed a very respectable 5 percent growth in gross national income per capita year on year, it could aspire to be Mauritania in about 30 years and Botswana in 70. In the interim, rich countries economies will have been growing too, and doubtless their ideas of rights, entitlements, and government will have expanded further, forever moving the goalposts. While paying them substantial lip service, donors have largely failed to consider the implications for government function of the limited and unreliable revenue streams available to poor country governments. To be sure, there have been calls for greater donor harmonization, so that the ever growing number of aid donors does not collectively overwhelm understaffed poor governments with its projects and demands. And there have also been calls for more thoughtful sequencing and prioritization of the seemingly allencompassing donor governance agenda. But the problem is not just one of harmonization, or of sequencing or prioritization, which suggest that donors should put more thought into the question of how one builds a modern Western government. It is impossible for poor country governments to have modern Western governments with budgets of under $100 per person per year. Instead, sustainable and effective government in poor countries is likely to be very different in kind, with different and less expensive institutions and much more limited functions. Donors and aid recipients need to think about what an effective $100 per person government looks like, and what functions it will serve. The fiscal constraint is not the only constraint that prevents effective government in poor countries, but it is so important that even if there were no other constraints it would be enough to prevent poor governments from effectively carrying out their current mandates. Why then havent donors and recipients grappled with the question of what kind of government poor countries can really afford?
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the democratic institutions donors have worked to build or support in developing countries, cautioned:
Our argument is not that [less-developed countries] do not need or cannot afford democracy, any more than our comments about [the sustainability of infrastructure] development projects should be interpreted as a claim that these countries did not need schools or roads . . . Poor countries need democracy, but the democratic institutions and processes they can afford are limited, different from those in the established democracies, and probably less than ideal.6
While they were quick to disavow any claim that some poor countries cannot afford democracy, democratic rights, like any other rights, require money for meaningful implementation, and this means that it is indeed possible to be too poor to be a domestically sustainable democracy. If donors are to be effective they must be able to consider this and similarly awful possibilities in all seriousness, no matter how precious the value and no matter how uncomfortable the consideration. In fact, it seems likely that some of the poorest governments have insufficient resources to mount an effective government of even the most limited scope and functions. In that case, we must ask whether they are self-governing in any meaningful way, whether they can be in the foreseeable future, and what expectations donors and their own citizens should properly have of them.
Government lite
y pressing for broad unfunded mandates for poor governments, donors have helped set those governments up for failure and helped make rule of law and public accountability impossibilities, even as they claimed to be sponsoring interventions to strengthen rule of law and public accountability. Donors need to take poor government fiscal constraints seriously, and this will involve changing how they do business in a number of ways. Donors should ensure that all donor-supported or donor-demanded reforms or proposed interventions be accompanied by publicly available fiscal analyses that spell out the costs to the government (and implicitly, the public), including long-term recurrent costs. Such analyses are a standard part of the legislative and rulemaking process in the United States, but donors fiscal analyses tend not to look beyond the period of anticipated donor involvement. Poor governments lack the capacity to carry out such analyses themselves. Current thinking in development is that donors should not run parallel
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t the end of the 20th century, if one wanted to predict what security threats would preoccupy the United States over the coming decade, a good place to start would have been a little-noticed congressional testimony by a relatively obscure State Department official. On October 6, 1999, Robert Seiple, the first ambassador-at-large for international religious freedom, testified before the House International Relations Committee on the State Departments inaugural International Religious Freedom Report. Seiples remarks also unintentionally anticipated the conflicts and security threats that would confront the United States in the ensuing decade. Looking back, the regimes that he identified for severe violations of religious freedom overwhelmingly coincide with those the United States was already at war with or would soon go to war with, or that would emerge as first-order national security concerns.
William Inboden is a distinguished scholar at the Strauss Center for International Security and Law, an assistant professor at the lbj School at the University of Texas-Austin, and an associate scholar with the Religious Freedom Project at Georgetown University. He formerly served on the State Departments Policy Planning staff and as senior director for strategic planning at the National Security Council.
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In his testimony, Seiple announced the designation of Burma, China, Iran, Iraq, and Sudan as Countries of Particular Concern subject to sanction for severe violations of religious freedom. He also noted that the secretary also intends to identify the Taliban in Afghanistan, which we do not recognize as a government, and Serbia, which is not a country, as particularly severe violators of religious freedom. Seiple then cited Saudi Arabia and North Korea as two other countries that likely merited designation as severe violators. The State Department eventually did so designate both of them, adding North Korea to the list in 2001 and Saudi Arabia in 2004. With the sole exception of Burma, every single one of the countries cited by Seiple were or were to become major national security concerns if not outright targets of military action. (The recent The correlation diplomatic opening with Burma might make it the exception that proves the rule, if Burmas inchoate between religious reforms include religious freedom and eventually persecution and induce more pacific behavior and distance from North Korea and China). At the time of Seiples tesnational security timony, the U.S. had only months earlier concluded its participation in the nato war on Serbian forces threats is not in Kosovo, and would maintain a troop presence in a 21 st-century Kosovo and Bosnia for years hence. The U.S. had phenomenon; it also the prior year launched strikes on Sudan, Afghanistan, and Iraq. Just two years later would has existed for come the September 11 attacks planned by al a long time. Qaeda from its base in Afghanistan, with fifteen of the nineteen hijackers citizens of Saudi Arabia. Within months, a U.S.-led force responded by toppling the Taliban. The year 2001 also witnessed the tense confrontation between the U.S. and China over the Hainan Island ep-3 spy plane capture, anticipating the growing concerns over the next decade about Chinas assertive military expansion and challenge to American interests in the Indo-Pacific. In 2002 North Korea admitted to its advanced nuclear weapons program, and Irans uranium enrichment efforts came to light as well, which only added to concerns about Irans longstanding sponsorship of terrorism. And in 2003, the U.S. invaded Iraq. This correlation between religious persecution and national security threats is not just a 21st-century phenomenon of postCold War dislocations, but also holds true over the past century. Including World War II, every major war the United States has fought over the past 70 years has been against an enemy that also severely violated religious freedom. Such was the case with Nazi Germany, North Korea, North Vietnam, and Saddam Husseins Iraq. This characterized other conflicts as well. The Cold War standoff with Soviet communism featured an opponent that engaged in systemic religious persecution. Numerous smaller-scale military interventions, such as Lebanon in 1983, Libya in 1986 and 2011, Somalia in 1993, Bosnia
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religious-freedom policy at the State Department have been effectively quarantined. In the minds of many at the State Department, international religious freedom remains at best a boutique curiosity and at worst an annoying irrelevance, and the irf Office remains mired in the bureaucratic margins at Foggy Bottom. The issue of religious freedom simply is not taken seriously as a policy issue by the broader national security community. This neglect is especially paradoxical given the United States own history and religious diversity. As the Economist editors John Micklethwait and Adrian Wooldridge have observed, one of Americas oddest failures in recent years is its inability to draw any global lessons from its unique success in dealing with religion at home. It is a mystery why a country so rooted in pluralism has made so little of religious freedom. The trends are not all negative. Religious freedom Nations engaged is inseparable from religion, and the latter has in religious enjoyed something of a renaissance in recent years persecution arent as a subject of serious analytical interest to policymakers and foreign policy scholars. A proliferation automatically of recent books, articles, task forces, and confersecurity threats to ences have all elevated religion as a significant factor for good and for ill in international relations. the U.S., but This renewed attention seems to be following a theyre more renewal of religion itself. Monica Duffy Toft, Timothy Samuel Shah, and Daniel Philpott argue in likely to be. their new book Gods Century: Resurgent Religion and Global Politics that a dramatic and worldwide increase in the political influence of religion has occurred in roughly the past forty years. Yet while religion is now being treated more seriously as an analytic category, religious freedom is still neglected as a policy priority. This oversight is all the more troubling in light of the scale of the problem. As a recent Pew Forum on Religion and Public Life study found, nearly 70 percent of the global population lives under high restrictions on religious freedom. A few qualifications should be noted. First, correlation is not causation, and just because a country might happen to be designated by the State Department as a religious persecutor and the Pentagon for attack does not necessarily prove that one caused the other. Second, the question of how the United States defines a security threat can be highly contested, with the recent Iraq and Libya interventions being two obvious examples. This article does not argue that nations engaging in religious persecution automatically present security threats to the U.S., but rather that entities engaging in religious persecution both states and nonstates are on balance more likely to pose a security threat to the U.S. Third, religious freedom may in some ways function as a proxy for the larger basket of democratic rights and institutions, and its relationship with security threats might approximate the insights of the democratic peace theory. Yet this goes only so far. For example, democratic peace theory applies only to relations between nation58 Policy Review
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consider the perspective of the oppressor. In the cases of actors such as alQaeda, the Taliban, the Iranian regime, and Saudi Arabia, religious intolerance is intrinsic to their own self-definition. Their entire existence is predicated on a religious narrative that is coercive, exclusive, and deeply hostile to any manner of religious dissent or diversity and that often justifies, even mandates, violence. This contrasts with other democratic rights such as media freedom, which the Taliban, for example, certainly oppose but by which they do not define themselves. Recent scholarship has begun to explore the empirical connection between religious persecution and security concerns. A new book by Brian Grim and Roger Finke, The Price of Freedom Denied: Religious Persecution and Conflict in the Twenty-First Century, conducts a robust statistical analysis of religious-freedom condiJihadist tions and incidents of conflict in 143 countries and terrorism, concludes that to the extent that governments and societies restrict religious freedoms, physical persetheocratic cution and conflict increase. As intuitive as this regimes, and might be, Grim and Finke provide substantial data to reinforce it. Controlling for related factors like authoritarian democratic institutions and respect for other human powers are the rights and civil liberties, they find that religious-freemain national dom restrictions play a distinctive role in fomenting conflict. This holds across multiple geographies, security threats regime types, and religious demographics. In short, in this realm. whether a nation is communist or nationalist, Islamic or Orthodox or secular, religious-freedom restrictions cause instability. Admittedly, the fact of conflict and instability within other nations does not intrinsically constitute a security concern for the U.S. But they can often be a leading indicator, and sometimes cause, of a potential security threat. A theoretical model developed by Daniel Philpott helps distil the relationship between regime type and propensity for political violence. The two most salient factors are the level of differentiation between religion and state, and the political theology of the majority religion. In Philpotts words, Religious communities are prone to violence when they hold a political theology that interprets their scriptures, traditions, and divine commands so as to favor an integrationist state, one that both makes its religion official and suppresses other faiths. They also tend toward belligerence when they are faced with laws and institutions either secular or sponsored by another faith that suppress their own practice and expression. Either cause may operate alone, but the two may also interact, reinforcing each other. Integrationist states those that permit little or no independence for religious communities include theocracies that use the state to advance the majority religion and authoritarian regimes that bring religion under the tight control or suppression of the state. Conversely, states with high levels
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ology with jihadist groups, theocratic regimes are distinguished by a government with effective sovereignty over a nation-state, and which adopts a particular religious ideology. Saudi Arabia and Iran are the two most prominent examples. Theocratic regimes are inherently inimical to religious freedom, as they define the states legitimacy by the propagation of their religious ideology in all dimensions of social and political life including the suppression of both minority faiths and adherents of the majority faith who dissent from the regimes doctrine. Hence Iran significantly restricts, and sometimes persecutes, its religious minorities such as Bahais, Jews, and Christians, as well as dissident Muslims. Saudi Arabia notoriously prohibits any public worship by non-Muslims and does not allow a single non-Muslim house of worship in the entire country, despite the presence of literally States, like millions of non-Muslim residents, predominantly Hindus and Christians, among the many expatriates Pakistan, that living and laboring in the Kingdom. Saudi Arabias arent theocratic restrictions also apply to Saudi Muslims who do not follow the Kingdoms officially sanctioned Wahhabi but are facing Islam, such as the Shia or the Sunni reformers who significant have challenged the Kingdoms chokehold on internal pressure Islamic orthodoxy. The security challenges posed by Iran are well in that direction known, from Tehrans sponsorship of terrorism to are just as its attacks on American forces on Iraq to its nuclear weapons program. Less appreciated, though, is how worrisome. the Iranian governments religious intolerance directly shapes this security threat. Since the 1979 revolution and Ayatollah Khomeinis institution of the Velayat-e faqih system of rule by Islamic jurists, the supreme leader and the Council of Guardians have defined the religious nature of the Iranian state in opposition to any entities seen as resistant to the divine mandate. Two principles of this system stand out. First, it restricts the rights of non-Shia Muslims such as Sufis and Sunnis as well as nonMuslims such as Christians, Bahais, and Jews. Second, it endorses violence as an instrument against those defined as its opponents, whether non-Shia religious minorities or external nations such as the United States and Israel. Moreover, because both of these principles stem from Velayat-e faqih, the regime believes they carry divine sanction. In the most serious cases, dissenters against the regime, including Shia, have been executed under the capital offense of moharebeh, or waging war against God. Saudi Arabia shows that the government of a theocratic regime might not necessarily define itself as an opponent of the United States, since the House of Saud has been an American strategic partner since the beginning of the Cold War. Yet the intolerant version of Islam that the regime cultivates at home and exports abroad continues to pose a security concern. The most acute demonstration of this came on September 11, when fifteen of the nineteen hijackers were Saudi citizens whose formative years had included incul62 Policy Review
Equally worrisome are states that are not theocratic regimes but face internal pressures in that direction. Pakistan is a prominent example. On March 2, 2011, a Muslim extremist assassinated Minister for Minority Affairs Shahbaz Bhatti, Pakistans only Christian minister, for Bhattis criticism of Pakistans blasphemy law. This brought to international attention an issue that has preoccupied religious-freedom advocates for two decades. While ostensibly a democracy, Pakistan embodies many contradictions, including a blasphemy law that dictates the death penalty for Whoever by words, either spoken or written or by visible representation, or by any imputation, innuendo, or insinuation, directly or indirectly, defiles the sacred name of the prophet Muhammad. The law symbolizes Pakistans deeper religious fissures, yet it is more than merely symbolic. In practice it exacerbates religious extremism, provides a rallying point for Pakistans Islamists, and serves as a disturbingly effective weapon against religious minorities in Pakistan such as Christians and Ahmadi Muslims, not to mention progressive Muslims such as Punjab Governor Salmaan Taseer, also assassinated for his criticism of the blasphemy law. Pakistans inability or unwillingness to repeal the blasphemy law indicates its vulnerability to jihadist influences and continuing appeal to terrorists. Many of the same Islamist elements within the Pakistani security establishment, particularly the army and the InterServices Intelligence spy agency, that support the blasphemy law also maintain close ties with Pakistani militant groups such as the Harakat-ulMujahideen that appear to have helped shelter Osama bin Laden in his Abbottabad compound. Authoritarian powers. Not all authoritarian states violate religious freedom, but those that do are more likely to pose a security threat. Such
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regimes often also foment nationalism among their citizens and seek to bring any independent expressions of civil society under state control. Russia in the Putin/Medvedev era has increasingly adopted this model, as the state promotes the Russian Orthodox Church to sacralize Russian identity while restricting the practice of other faiths. So has China, as the Chinese Communist Party has embraced authoritarian capitalism with a nationalist edge. North Korea stands as an illustrative, albeit extreme, model with the Kim regimes personality cult, promulgation of its Juche version of communist ideology, and fierce persecution of religious believers. Particularities and differences notwithstanding, in all of these cases the authoritarian regime places the primacy of the state over any independent religious activity, and make the perpetuation of the states authority a The promotion transcendent goal. In these regimes, the states monopoly on political of religious power regards independent religious activity as an intrinsic threat, to be controlled or suppressed. The freedom can important qualification is independent. Often function as a authoritarian regimes permit or even encourage relimitigating factor gious activity that is subservient to the state, since religion properly controlled can serve to legitimate in ameliorating the state and bolster nationalism, or at a minimum existing security help pacify citizens. Thus Putin has increased state support for the Russian Orthodox Church, and threats. China permits religious observance only in registered outlets by its five recognized religions while subjecting independent religious groups to restriction or persecution. As Tom Farr has noted of China, the Communist government fears religion so vehemently that it admits capitalists into the Communist party but not religious believers. Authoritarian regimes also attempt to derive legitimacy from increasing their own power and projecting it abroad, particularly against perceived enemies or threats. Aaron Friedberg has observed that in China, the partys desire to retain power shapes every aspect of national policy. When it comes to external affairs, it means that Beijings ultimate aim is to make the world safe for authoritarianism, or at least for continued one-party rule in China. In a not-unrelated link, authoritarian governments also often disparage independent religious groups in their countries as agents of the West or American pawns. Moreover, because the United States occasionally advocates for religious liberty abroad, such advocacy sometimes increases the threat perception of authoritarian regimes that look suspiciously at such U.S. efforts. These regimes believe that religious groups contributed to the fall of the Iron Curtain and dissolution of communism in Eastern Europe, and are determined not to make the same mistake by allowing religious liberty. In Russia, trends of religious intolerance have mutually reinforced trends of political regression and the deterioration in Russia-U.S. relations. For
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Taliban rule were Afghan Muslims who did not share the Talibans Islamist predilections. Internationally, before September 11 the Talibans depredations provoked the ire of religious-freedom advocates and womens rights advocates but were otherwise largely dismissed by foreign policy professionals as unfortunate but irrelevant to national security concerns. Yet the very same conditions of religious intolerance that were appalling to human rights advocates were appealing to al Qaeda. This is by no means to say that a more vigorous push for religious freedom would have prevented the September 11 attacks. But at a minimum, more attention to the Talibans religious persecution might have also helped reveal the potential terrorist threat. Religious-freedom violations can also be a leading indicator of authoritarianism. As Peter Berger has Protection of observed of China as Beijing increases its repression religious freedom of independent religious groups, modern authoriwont guarantee tarian rulers have understood instinctively that uncontrolled religion can be a threat. By the same stable and selftoken, violations of religious freedom frequently governing states foreshadow other measures of tyranny. Thus Chinese Christians today may resemble canaries in a in Afghanistan coalmine, their fate sending out an alarm. Ameliorative. The promotion of religious-freedom and Iraq, but it protections may in some cases help ameliorate will make such potential security threats. Consider the case of states more likely. Pakistan. If the blasphemy laws were to be taken off the books, Islamists would lose a favored instrument for targeting religious minorities, intimidating moderate Muslims, and enhacing the Islamist reach in government and society. Pakistans maladies are legion, so the end of the blasphemy laws would hardly be a blanket palliative. But it could serve as one ameliorating measure to undermine extremist elements. In a related vein, American support for religious-freedom protections for peaceful Muslims in divided, fragile societies such as Afghanistan or Yemen would also aid counterterrorism efforts by building trust among the populace and increasing their confidence in sharing intelligence tips. Religious-freedom promotion can also help mitigate some of the enabling factors behind authoritarian security threats. Independent religious groups can often serve as bulwarks against the pretensions of the state to exert control over all aspects of the society. In the case of China, a substantial step for the Chinese government would be to allow its millions of unregistered house-church Christians to worship legally and regularize their role in Chinese society. Their newfound liberties would enable these Christians many of whom occupy important roles in Chinas intellectual and commercial classes to shape Chinese society in a more pacific direction while eroding the bellicose nationalism that the Chinese Communist Party relies on in part for its legitimacy.
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U.S. policy
oth the bush and Obama administrations have demonstrated at least a rhetorical appreciation for the relationship between religious freedom and broader security equities. For example, the Bush administrations 2006 National Security Strategy declared that against a terrorist enemy that is defined by religious intolerance, we defend the First Freedom: the right of people to believe and worship according to the dictates of their own conscience, free from the coercion of the state, the coercion of the majority, or the coercion of a minority that wants to dictate what others must believe. While the Obama administrations National Security Strategy does not address religious freedom, President Obama highlighted it in his 2009 Cairo speech as one of the key issues facing the Islamic world: People in every country should be free to choose and live their faith based upon the persuasion of the mind and the heart and the soul . . . Freedom of religion is central to the ability of peoples to live together. Yet in operational terms, the U.S. government has consistently treated religious-freedom promotion as at best a tertiary priority. While religious freedom exists as a normative good in its own right, its potential contributions to stability and security have been less explored, let alone appreciated.
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Understanding religious freedoms relationship with national security would mean moving it from the periphery towards the center of American policy. Designing effective implementation policies will remain a challenge yet a challenge worth embracing not only for American ideals, but for American security interests as well.
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hat practical lessons can the experience of postcommunist transitions in Central and Eastern Europe offer to countries that are attempting to overhaul their economic systems? With the Arab Spring, a window of opportunity has been opened in the Middle East and North Africa to put in place new institutions conducive to entrepreneurship, innovation, and economic growth. To be sure, the world today offers very few examples of genuine centrally planned economies. Even the worst performing low- and mid-income countries do have sizeable private sectors and experience with open markets. However, despite the wide-ranging scale of reform challenges in different societies, many countries in the mid-income world, which are undergoing significant political changes at the moment, will also need to privatize, remove distortionary subsidies, stabilize their public finances, and create space for the growth of the private sector.
Dalibor Rohac is the deputy director of economic studies at the Legatum Institute in London.
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Egypt, for instance, is suffering from an acute public finance problem, which is driven mostly by the existence of a distortionary subsidy system, aiming to keep prices of certain commodities low in order to help people in need. But, of course, indiscriminate subsidies to commodities chiefly benefit the wealthy and place a strain on public finance. Many Arab countries have sizeable public sectors roughly one third of Egypts economy is run by the military, for instance. As a result, a genuine transition to the market will necessitate privatizing state- and military-run enterprises albeit on a smaller scale than in countries where the whole of the economy was owned by the government. As a rule of thumb, Arab Spring countries suffer from suffocating barriers to entrepreneurship and corrupt bureaucrats enforcing those rules. The revolution in Tunisia was, after all, sparked by the self-immolation of Mohamed Many of the Bouazizi, an aspiring entrepreneur who was selling challenges fruit and vegetables illegally and was being harassed facing the Arab by the local authorities. Context-specificity matters, and the Middle East world today in 2012 differs from Eastern Europe in 1990. Still, many of the challenges facing the Arab world today are not that are not that different from those facing Eastern different from European economies twenty years ago. As a result, those facing one may hope that there are some lessons from Eastern Europe post-communist transitions that need to be kept in mind if the democratic transitions in the Middle twenty years ago. East are to succeed. Unfortunately, most current debates about economic and political transitions and desirable reform strategies are flawed, as they do not reflect the role played by dispersed knowledge in the economy and the incentive problems existing within the political sphere. It is not helpful to provide reform advice that is grounded in the assumption that reformers are omniscient and benevolent. After all, the central reason for the failure of planned economies was that they placed unrealistic epistemic and motivational demands on policymakers. In the same vein, many popular prescriptions for economic reforms implicitly assume that policymakers do not face cognitive constraints and that their motives are purely benevolent. This article, therefore, has the ambition to outline a few lessons that are more likely to pass the test of robustness with regard to less-than-ideal assumptions about policymakers knowledge and incentives. This essay is partly an attempt to rehabilitate the Washington Consensus. By focusing policymakers attention on variables that they could directly control, and by providing a simple laundry list of policies that are necessary, though not sufficient, for the success of transitions, this approach provided a more solid platform for economic transition than its alternatives. Although one might question the soundness of its economic fundamentals, it is not clear whether systematic improvements upon its
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of particular circumstances of time and place, which is seldom articulated and, therefore, difficult to communicate explicitly. One of the key functions of market prices is to communicate that knowledge and use it to make economic decisions. When frost suddenly destroys the crop of oranges in Florida, the price mechanism induces consumers to adjust their behavior, without them having any idea about the reasons for the sudden change in the supply of oranges. Price signals thus enable people to act on knowledge which they do not possess and which they could not reasonably be expected to collect. This feature of private markets does not depend on whether they are efficient in the neoclassical sense if anything, disequilibrium makes the role of price signals even more relevant than a situation of stationary equilibrium. By eliminating this mechanism, socialism placed unreasonable epistemic demands on the In economic planners who were expected to make economic transitions, decisions without being able to use the condensed bits of decentralized knowledge embodied in market macroeconomic prices. stabilization is Hayeks point about tacit knowledge was subtle. There was also a more mundane reason for the faila necessary ure of socialism, which had not been fully internalthough not a ized by the economic profession until recently. A sufficient part system where economic decisions were based on a process of bargaining over output and resources of any reform between factory managers and planners created perstrategy. verse incentives. Even if we agreed that socialist planning could, in principle, deliver efficient outcomes, it remains unclear whether the individual conduct needed to attain such outcomes is incentive-compatible. In planned economies, factory managers were motivated to provide planners with information that led them to either increase the factors of production given to companies and/or decrease the level of output relative to what it would otherwise have been. This public choice also led the planners to set prices artificially low, in order to induce shortages in product markets, because shortages created rents for those involved in the supply chain. These two considerations the problem of local knowledge and the problem of incentives in the government sector are central to our understanding of the economic problems of socialism. On a general level, problems of dispersed local knowledge and perverse incentives existing in the political sphere go a long way towards explaining the deficiencies of the political economy of the Arab world albeit the particular manifestations of these problems are different from those of centrally planned economies. Unfortunately, those two considerations were missing from most models that the economic profession had relied on, and the fall of communism caught many economists off guard just as the events of the Arab Spring caught off guard many observers of Middle Eastern politics. Yet, economists
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Macroeconomic stabilization
nsurprisingly, when asked for advice, economists turned their attention towards a subject they knew and understood: macroeconomic stabilization. Economic structures that emerged after decades of socialism were bound to produce sizeable macroeconomic imbalances once exposed to genuine market forces. Prices of consumer goods, which had been kept below equilibrium at the time of the planned economy, needed to increase in response to liberalization, creating upward pressure on inflation. At the same time, countries could expect current account balance crises to materialize, as the markets existing under the Council of Mutual Economic Assistance disintegrated. The restructuring of national industry, including the closing down of large and wasteful heavy industries, was likely to increase unemployment, and, therefore, to apply pressure on the social safety net and on public budgets. From whatever perspective one approaches economic transitions, it is clear that macroeconomic stabilization was a necessary albeit not a sufficient element of any successful reform strategy. With this understanding, a leading group of economists was prescribing a strategy of rapid, systemic changes to the post-communist countries, with a strong focus on restoring macroeconomic stability. This approach was dubbed the Washington Consensus, because at the time it reflected the dominant view of the U.S. Treasury, the imf, and the World Bank on the policies that either were or should have been adopted by Latin American countries in the 1980s. Very quickly, partly through the work of Jeffrey Sachs and others, the idea that rapid macroeconomic stabilization is the key to success in economic transitions was translated into policy practice in the transitional world. Apart from the emphasis on containing inflation and budget deficits, and tackling external imbalances, this perspective argued that rapid privatization and liberalization both on the domestic, microeconomic front and also with regard to external trade and capital flows were of the essence. This approach emphasized the existence of complementarities between various elements of economic reform. Plausibly, price liberalization, without prudent monetary policy, would result in rampant inflation rates. Similarly, without the imposition of hard budget constraints, liberalization would not induce the right behavioral responses on the part of the firms. And speed was essential because the fall of communism provided a window of opportunity for reforms, which was likely to close once the initial euphoria dissipated.
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These rapid reforms, accompanied by macroeconomic stabilization, worked. Sure, in all countries, output contracted in response to liberalization and the collapse of the Comecon markets. As a rule of thumb, this contraction was related to the initial conditions of the economy the less agile economies, more dependent on the production structures of the Soviet-run economic cooperation, suffered more than those able to reorient trade and economic activity towards Western markets. The Baltic and the Visegrad countries were able to make that transition very quickly and very effectively. In contrast, most countries of the former ussr have had serious troubles along the way. But that is not, by itself, an indictment of the shock therapy. It is rather an unfortunate result of the distortions created by the logic of Soviet-style central planning. After all, the slump was deepest in countries that can hardly be accused Is seems nave of following a radical program of economic reforms to think that such as Ukraine or Moldova. Even in Russia, the failure to transition fully privatization towards democratic capitalism cannot be blamed on should be the radical reforms package put forward by Yegor postponed until Gaidar and his kamikaze team in 1992. For a complex legal instance, the price liberalization of 1992 was far from complete and the overall program lacked credand judicial ibility. That was not Gaidars fault. Russians had seen numerous failed attempts to fix the economy, framework is and had little reason to believe that this time was in place. any different. The Russian liberalization program was accompanied by an extremely accommodative monetary policy. As a result, the hard budget constraints that the reformers were trying to impose on Russian enterprises were quickly relaxed by the inflow of cheap credit, resulting in a catastrophic inflation rate of 2,500 percent in 1992. Numerous other pitfalls occurred on Russias way towards a market economy the uncanny alliance between big businesses and regional governments is probably the single most striking one. It resulted in an economic structure that fostered local monopolies and prevented the exit and entry of various industries, thus hampering economic growth. It also had unfortunate political repercussions, resulting in the persisting one-and-a-half-party rule. But none of those unfortunate outcomes can be blamed on radical economic reforms most importantly because Russias reforms were not all that radical. All things considered, it would be ill-advised to label the shock therapy as a failure. Its proponents such as Jeffrey Sachs or Stanley Fischer were not claiming that rapid and wholesale reforms would solve all economic ills. They were merely pointing out that macroeconomic stability was a prerequisite for successful reform, a belief that was largely confirmed by the events of the 1990s and the 2000s.
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Privatization v. restructuring
apid privatization, which was an integral part of the radical reform packages implemented in Central and Eastern Europe, has probably been the most contentious aspect of the post-communist transitions, partly because of its perceived unfairness. In many countries, shrewd individuals with political connections found themselves in possession of large companies employing thousands of people and worth billions of dollars. Worse yet, many of the new owners were arguably not in an ideal position to restructure the companies they purchased, and neither was the legal environment always conducive to the smooth functioning of the private sector. Was there an alternative to rapid privatization? The idea that privatization should have been postponed until a complex legal and judicial framework was ready to fully accommodate private enterprise has become dominant in certain circles, both in the economic profession and among the general public. Yet that belief seems nave at best. Effective legal rules cannot be created instantly by government fiat. And, even if they could, they would require informed judges and lawyers to enforce them. Practical issues aside, there was one central reason for rapid privatization: credibility. Historically, communist economies were subjected to numerous reforms. In the ussr alone, significant reforms occurred in the 1920s, 1950s, 1960s, and 1980s. All of them either failed and/or were reversed at some later stage. In such circumstances, the commitment of reformers to a market economy, especially if they were connected in any way with the previous political elite, was contestable, and piecemeal reforms would have been perceived as reversible and lacking credibility. The only way the new political elite could signal its durable commitment to the new economic and political order was to use the brief window of opportunity for rapid and encompassing reforms, including privatization. It is beside the point whether an optimal sequence of small-scale reforms and restructuring could have, in principle, worked better. In a situation where commitment to the emerging market order was in doubt, wholesale and rapid reforms were necessary. The large scale of the newly created private sector and its mass character were thus seen as a greater constraint for potential re-nationalization. A large body of economic literature has tried to map the effects of privatization on economic performance. On a superficial level privatization has
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improved the economic performance of companies. Of course, the relevant question is whether the counterfactual to rapid privatization was more likely to produce good economic outcomes and that question is more difficult to answer unambiguously. The general conclusion of the literature on the economic effects of rapid privatization is that privatization of a company guarantees a genuine transfer of ownership only if specific institutions are in place. Thus, when privatization occurred in a good institutional environment, it had a positive effect on corporate performance. Conversely, most studies fail to demonstrate a strong negative effect of privatization on economic performance of enterprises when institutional conditions are adverse. Overall, it appears that privatization was a winning strategy, although its results were better in some contexts than in others. Sure, in institutionally weak countries privatization has led to stagnation and the decapitalization of companies, instead of better financial results and increased efficiency. However, renationalization or postponement of further privatization was unlikely to provide any major gain. As John Nellis, a former World Bank economist observed, governments that botch privatization are equally likely to botch the management of state-owned firms. So while rapid privatization in Central and Eastern Europe did not always live up to peoples expectations, weve yet to see convincing evidence that its alternatives would have been any better.
Arguably, economic transitions are even more complex than that. Unlike in a chess game, in the real economy the chess pieces have a volition of their own. If Washington Consensus-style policies were seen as societal engineering, to use Rolands characterization, it is not clear what we can call the institutionalist approach to economic reform. Not only does it require that policymakers are able to identify the measures that are the most likely to elicit popular support at the beginning of the transition, but also that they are able to sequence the reforms in a way that leads to the desired outcome. Even the question of identifying winners and losers from particular policy moves is a more complex task than first meets the eye. Counterintuitively, the World Bank economist Branko Milanovic demonstrated that the biggest winners of the post-communist transitions were pensioners a finding that is at odds with the popular perception of pensioners as the most vulnerable victims of the allegedly ruthless transition towards capitalism. More fundamentally, it is a mistake to expect the progress in the creation of functioning and well-enforced property rights in transitional countries to come primarily from the perfection of the legal system. Particularly in the case of more complex assets and more intricate market relationships, it is essentially impossible to identify the desirable legal mechanisms in advance, without actually observing the practices that emerge on the markets. Of course, institutional order is key to the functioning of the market economy. However, the rules of market order are not something that can be designed and imposed on market participants from above in no time. Institutions matter. But just affirming their importance is unlikely to be enough. If creating the right legal and regulatory setting for a market economy to exist appears complicated, one should recall that there are essentially no known ways of creating, through the means of public policy, the informal and cultural norms that typically support a market economy. At the same time, the interaction between economic reforms and the underlying set of informal norms, cultural environment, and the local set of expectations
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which are sometimes called metis by scholars such as Peter Boettke of George Mason University is critical for the success of the transition. In countries where metis was receptive to a radical turn to a market economy and representative government, this transition seems to have occurred successfully. Not only did voters in the Czech Republic, Poland, and Slovenia not punish the reform governments for the pain of the reform, they have continually supported the change, even when it came at a cost. Backlash and unintended economic outcomes occurred in places where the underlying metis was not congruent with the institutional change that the reformers were trying to impose. In Russia, for instance, the efforts of Gaidars government were not met with much sympathy, either from interest groups or the electorate, neither of which had a deep appreciation of the need for institutional change. Economics The differences in metis might have to do with cannot really geopolitics and geography. In Central European countries, populations shared a clear sense of direccapture the tion they wanted to be part of the democratic underlying and capitalist Europe. In many places, there was still a memory of pre-war years when those countries sources of had been reasonably well-governed and prosperous. social change In Russia, perceptions were different, as many saw that determine the collapse of the Soviet Union as a defeat for the whether reforms Russian nation at large. While the Czechs and the Poles embraced the prospects of eu membership and succeed or fail. the legal reforms that accompanied it, no similar prospects existed in Russia. No wonder that no significant momentum for reforms developed there. Although geography matters, it hardly tells us the whole story. Even among the relatively successful countries of Central Europe, we saw substantial differences in metis, which affected the results of transitions. In Czechoslovakia, for instance, there existed a stark difference between the perceptions dominant in the Czech and the Slovak parts of the country. Slovaks believed that the radical transition package embraced by Klauss government did not suit Slovak economic interests, which would have been better satisfied by a milder reform program. This divergence of views, fueled by decades of Slovak nationalism, resulted in the Velvet Divorce of 1993. In subsequent years, Slovaks had to discover capitalism and create a free market on their own, through an iterative process, which first involved cronyism and reckless corruption but later brought about some bold reforms, turning the country into one of the fastest growing economies in Europe. The Czechoslovak example shows that metis is not something immutable. Ideas change, and so do the prevailing sets of cultural norms and expectations. Unfortunately, economists are not particularly well equipped to explain and understand these shifts. And the economic profession is even less well suited to forecast, manage, or mastermind such shifts in advance.
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Fatal conceit
conomics can provide a willing reformer with a list of measures that are needed for a successful transition to market economy. In this respect, the old-fashioned laundry list of macroeconomic stabilization, liberalization, and privatization, implemented credibly and in a short time frame, gives as good a policy prescription as any other. Indeed, there is not much else that the prospective reformers are in a position to do. The idea that policymakers ought to design a perfect set of working institutions and legal norms ahead of the reforms, and that they carefully plan the sequence of gradual transitional steps, is a display of fatal conceit. To achieve that would require the policymakers to be at the same time omniscient and benevolent. Concurrently, economics cant really capture the underlying sources of social change that determine the success and failure of economic reforms. This should not come as a surprise, unless one adheres to a materialistic vision of society, in which institutions, culture, and ideas are mere by-products of its productive forces. After 1989, a change in ideas and rhetoric transformed much of Central and Eastern Europe into normal, prosperous countries. The same can happen again in the Middle East and North Africa.
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called for an executive that would have vast powers in foreign affairs, great limits in both managing domestic policy and initiating war, and above all a dependence on both the Congress and the sovereign states (and, eventually, the whole people). The debate over a strong executive branch would not end with the ratification of the Constitution, as vigorous presidents like George Washington and above all Andrew Jackson induced fears among ardent republicans that a creeping monarchism was afoot in the New World. Indeed, the extent of executive power became a focal point of the so-called Second Party System of 182460, as the National Republicans (later the Whigs) blanched at the strong executive leadership of Jackson King Andrew I, as he was derisively known as well as James K. Polk. The Abraham Lincoln presidency during the Civil War was the strongest executive the country had seen to date, but after Reconstruction the executive fell into the background for the next generation. Civil service reform took from the president a major source of his political power namely, patronage; the closeness of elections from 1876 through 1892 meant that no chief executive could really claim a governing mandate; and anyway the federal government had not yet claimed the kind of regulatory and redistributive powers needed to address the problems of industrialization, urbanization, and overexpansion into the West. In other words, the politics of the period were small, and so therefore was the executive branch. The progressive era brought a lasting change to this state of affairs. Presidents Theodore Roosevelt and
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Woodrow Wilson had a fundamentally different vision of the executive branch than their immediate predecessors, and indeed really any prior president going back to at least Jackson. They envisioned the presidency as the mediator of the national interest something quite distinct from what our Congresscentered Constitution prescribes and The standard text for any presidential history class remains Richard Neustadts Presidential Power, which unabashedly celebrates this modern presidency over the mere clerkship of the late 19th century. Whats more, presidential rankings by historians inevitably favor those commanders in chief who acted in a modern way fdr, tr, Wilson, etc. while leaders like Grover Cleveland and Coolidge are regularly dismissed as forgettable. How do we explain this change, in light of a written Constitution? After all, the very purpose of writing down the organizing principles of the government was to prevent slow alterations to the way politics is conducted. And yet, that is exactly what we have seen with the presidency. If anything, the only amendments to the Constitution since the 1700s have actually limited the power of the chief executive, formally limiting him to two terms, and yet the power of a Barack Obama is vastly superior to, say, Benjamin Harrison. What to make of this? An interesting quirk of our constitutional system is how it can be altered without amendment. If a leader usually the president takes power for himself that is not strictly within the boundaries established by the Constitution, and the people do not complain loudly and long enough, then the founding document is effectively amended, as a new precedent is established. This is the primary way that the country has developed an immensely powerful commander in chief, despite the fact that the Constitution dedicates less than 1,000 words to the executive branch. It has been in this manner that, over the last 100 years, the scope of the pres82 Policy Review
Enterprising chief executives innovate new pathways of power, are met with little resistance, and thus the innovations soon become norms. Most presidents since tr have contributed to this process, regardless of party or ideology.
thus saw the occupant of the White House as a ceaseless source of activity: communicating to the public about what the national interest requires, placing pressure on recalcitrant legislators, taking an active lead as head of a national political party, and generally rallying the nation to whatever cause he deems important. With the exception of the presidencies of Warren Harding and Calvin Coolidge from 1921 through 1929, this view of the presidency has more or less obtained ever since. Republicans and Democrats, conservatives and liberals, have all ascribed to it at least when their side resides at 1600 Pennsylvania Avenue. Whats more, this view has taken hold as a normative ideal both in the academy and the public at large.
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idency has grown: Enterprising chief executives innovate new pathways of power, are met with little resistance, and thus the innovations soon become norms. Most presidents since tr have contributed to this process, regardless of party or ideology. No president or political movement has ever reversed the trend, nor really ever tried. It is undeniable that this expansion of presidential power has disrupted the traditional relationship between the executive and legislative branches. We can see this in a number of different dimensions. The Framers, for instance, carefully separated the power to declare war and execute a war between the Congress and the president, but today the president has power to do both and Congress merely ratifies the decision after the fact. Similarly, the power to make domestic policy and execute it was intentionally divided between the two branches, but today Congress regularly issues directives so broad that the executive is tasked with formulating and executing policy. (In a similar vein, the Congress has agreed to an effective end-run around the constitutional provision that all tax bills must originate in the House. The Senate regularly constructs such bills, and places them as an amendment to some otherwise mundane piece of legislation passed by the House.) Additionally, presidents often engage in extra-legislative policymaking through the use of executive orders. Even though their authority does not trace back to the Constitution, executive orders from Lyndon Johnson and Richard Nixon actually established the highly contentious principle of affirmative action in federal contracting. There is also the broader and broader invocaOctober & November 2012 83
tion of executive privilege, which is not to be found in the Constitution either but is now commonly cited for purely political purposes. Another extra-constitutional innovation, known as signing statements, have effectively granted the president a line-item veto, something the Supreme Court has explicitly rejected as unconstitutional. Nevertheless, presidents use signing statements as legal cover not to implement portions of laws that they find unacceptable. erhaps most disconcerting of all these extra-constitutional innovations is the rise of the czars, the subject of an excellent new study by Mitchel Sollenberger and Mark Rozell. The two authors explicitly reject the utilitarian approach of presidential scholarship embodied in the works of researchers like Neustadt or Charles O. Jones, who focused on what works or doesnt work for the presidential agenda and instead adopt a public law frame to analyze the rise of czars. In other words, they are primarily interested in the extent to which czars are compatible with the traditional notions of republicanism, or rule by the people, as well as the system of checks and balances that give Congress oversight of many executive activities. They then define a czar as an executive branch official not confirmed by the Senate but possessing power to impose rules and regulations, oversee budgets, or coordinate executive policy responses. They find that czars exercise substantial power outside the traditional constraints imposed by the Constitution. Perhaps no better example can be found in the person of Steve
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Rattner President Obamas auto czar who set the terms of the bailouts of Chrysler and gm, based upon a rather tendentious reading of the tarp legislation, in ways that were contrary to longstanding rules in bankruptcy court and highly preferential to the United Auto Workers, a vital constituency of the Democratic Party. Though the czars have become an easy target of conservative criticism during the Obama years, it is a fact that presidents of both parties have made use of them. Indeed, it makes a great deal of sense because, unlike cabinet heads and other executive officers, czars operate independently of the Congress. Employing a very precise methodology for determining who really is a czar and who is mislabeled as such by the media, they find the first czars emanating (unsurprisingly) out of the Woodrow Wilson administration, and in particular the national response to World War I. fdr used czars to deal with the emergencies of the Great Depression and World War II, but in time czars transformed from an extraordinary position to deal with an extraordinary situation to a common appointment. Ronald Reagan had three czar positions, George H.W. Bush and Bill Clinton both had two, George W. Bush had eight, and Barack Obama who as a candidate complained about the executive excesses of his predecessor has a whopping twenty czars running around the West Wing, all of whom exercise substantial power independent of the Congress and, by extension, the people themselves. These czars like signing statements, executive orders, and the breakdown of clear lines of authority
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between congressional and executive war-making and domestic policymaking trace back to the progressive innovation of the vigorous executive. We should not be surprised that occupants of the three branches search everywhere and anywhere to expand their power at the expense of their constitutional rivals. The public pressure of the exuberant presidency has induced the occupants of the White House to push harder than ever, as they know full well that they will be evaluated at the ballot box and then by history not by how well they have executed their duties under Article II but how they have managed the entire country. Put another way, if the public is going to praise or blame the president for the quarterly Gross Domestic Product report, then it should come as no surprise that he will do anything and everything he can get away with to make sure the numbers are good. This should trouble those who cherish our constitutional regime, one that envisioned a republic in which the Congress would take the lead in public policy and that prized checks and balances above the utility of a vigorous executive. And it is for such readers that Sollenberger and Rozell provide an additional service. Going against the 60-year trend in scholarship that celebrates implicitly or explicitly the active and energetic model of presidential action, the authors offer a stark warning about the republics czarist regime:
We are deeply troubled by these developments. Czars are a constitutional aberration, a direct violation of the core principles of a system of separation of powers and governPolicy Review
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ment accountability. Presidents may find some utility in having czars. Many members of Congress may even be content to defer to the executive branch to undertake complex policy problems and the responsibility for any outcomes. Organized groups and many concerned citizens may also appreciate the seriousness that a president attaches to their issues when he appoints one person to solve them. None of that should override the rule of law. The constitutional framers did not create this delicately balanced system of separated powers for the convenience of officeholders or to achieve efficiency or immediate gratification of citizens. Different forms of government can better achieve those ends; ours should stay true to the principles of balanced and constrained powers. Czars do severe damage to our principles and the practice of creating and appointing them should be stopped.
Unfortunately, the authors stop short of how to remedy this situation, and perhaps with good reason. In Chapter Five, they note that the congressional response to the so-called imperial presidency of the Nixon administration was much heavier on the smoke than the fire, and after a few years of respite, we have seen the executive branch begin to encroach more and more, with little pushback from the other branches. That congressional inaction is worth considering in some detail. After all, the Constitution is what it is regardless of the informal innovations that have been heaped upon it in the last 100
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years meaning that Congress could, in theory, restore its primacy quite easily, if it were so inclined. Clearly, it is not as evidenced by the tepid response to Watergate as well as the widespread acceptance of the vast expansions of the executive under George W. Bush and Barack Obama. Why has Congress been so loathe to assert itself? The answer is as obvious as it is troublesome: The people do not want it to. Despite the bad publicity that has recently surrounded the czars, signing statements, presumptuous executive orders, and the like, the great majority of the people are sufficiently content with an active executive branch that they are willing to tolerate these excesses. Thus the rise of the czars, as well as other troubling aspects of the modern presidency, connect inevitably to the quantitative and qualitative growth of the federal government. Indeed, one cannot escape the warnings offered by Alexis de Tocqueville at the end of Democracy in America, when he conceived what a democratic tyranny would look like:
Our contemporaries are constantly excited by two conflicting passions: They want to be led, and they wish to remain free. As they cannot destroy either the one or the other of these contrary propensities, they strive to satisfy them both at once. They devise a sole, tutelary, and allpowerful form of government, but elected by the people. They combine the principle of centralization and that of popular sovereignty; this gives them a respite: They console themselves for being in tutelage by the reflection that they have
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chosen their own guardians. Every man allows himself to be put in leading-strings, because he sees that it is not a person or a class of persons, but the people at large who hold the end of his chain.
of soft despotism that provides cradleto-grave amenities along with the illusion of popular control.
This is a fair description of the modern, federal welfare state, which provides each citizen with a panoply of resources from birth until death. It is not practical for the United States Congress so often unruly, divided, and undisciplined to offer such a comprehensive program of entitlements. Instead, the most sensible place to vest this power is in the presidency that fulfills Tocquevilles condition of apparent freedom but comforting servitude. Viewed from this perspective, the imperial presidency and the weak congressional response to it make much more sense. The people have made a rational, cost-benefit calculation: Sure, a broadly powerful executive branch imposes upon areas constitutionally owned by the Congress, but it also makes sure Social Security checks are cut on time, Medicare pays the doctors, and the Head Start programs stay open. All the while a false sense of individual liberty is retained. At the close of the Constitutional Convention in 1787, Benjamin Franklin was asked, Well, Doctor, what have we got a Republic or a Monarchy? He responded, A Republic, if you can keep it. Maybe the rise of the imperial presidency including the troubling creation of this czarist regime is a sign that, somewhere along the way, weve lost the republican character of our government, and instead, as Tocqueville worried, embraced a kind
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By Robert Herritt
John Tomasi. Free Market Fairness. Princeton University Press. 368 Pages. $35.00. n e c o u l d h a r d ly imagine John Tomasis Free Market Fairness coming along at a more opportune time. Stump-speech rhetoric seems to have turned its attention (at least nominally) towards the concept of fairness. Questions concerning the distribution of income, although always present somewhere in Americas political conversation, have a starring role this election season. The proper role of government is up for debate again. But that Tomasi offers a clear-headed exploration of these and other issues during a moment of noticeable obtuseness and obfuscation in American politics is an accident of timing, incidental to his larger project, which is both ambitious and deeply needed. (As a matter of disclosure, I was a student of Tomasis.) Robert Herritt is a writer in New York City.
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Tomasis goal is to remake the conceptual landscape of liberal thought, the tradition of political philosophy of which Locke, Mill, Rawls, and Hayek were all canonical practitioners. The landscape hes referring to has been fixed for some time with libertarians and classical liberals situated on the right, sticking up for economic liberties and a formal notion of equality and often shunning lofty distributional schemes, and what Tomasi and others have called high liberals staking out a spot on the left, putting social justice concerns front and center and never being shy about using the states power to realize a substantive ideal of distributive justice. Its fair to say that most of the central disagreements that play out in the realm of liberal political theory and philosophy concern this division. And, as the two sides continue to push against one another, the prospects for progress seem bleaker by the day. As Tomasi describes this cold war of rival liberalisms, its economic freedom or social justice. Everyone has to choose. On the political level, as on the conceptual one, there exists no common ground. Thus the contestants enter battle knowing that, when the dust settles, one side will win and the other will lose. Tomasi admits from the outset that he has firmly fixed sympathies for libertarians and classical liberals. The author is at the same time eager to give credit to influential thinkers on the left for the theoretical headway they have made. But libertarians would benefit from getting over their particularly virulent case of what Tomasi calls social justicitis, and taking to heart some of
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the innovations and insights from high liberal thought. And as for the high liberals, that traditions disregard for economic liberties, Tomasi believes, isnt just unnecessary, given their moral commitments, but actually undermines their project. Property rights, Tomasi wants to tell high liberals, are rights too same as all the others.
Tomasi admits from the outset that he has firmly fixed sympathies for libertarians and classical liberals. The author is at the same time eager to give credit to influential thinkers on the left for the theoretical headway they have made.
Theres a tempting way to reconcile these two opposing schools, and one which Tomasi deserves credit for passing up. Its the fusionist tack, sometimes promoted by defenders of market-based policies, that says left liberals have their philosophy right but their economics wrong. Yes, some libertarians might say to the left, You should be concerned for the well-being of the poorest people; youre dead right that every citizen ought to have a fair shot at being prosperous and gaining access to affordable medical care; its unacceptable that so many lack a chance at developing the skills or acquiring the knowledge needed to succeed in modern society. If only you came around to the idea that markets can be har-
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nessed to these ends, and that ambitious public sector programs are often a dead end. There is a certain parsimony to this open your heart to Milton Friedman argumentative strategy. And it has been used compellingly by, for instance, Brink Lindsey in his work on whats been unfortunately dubbed liberaltarianism. This is a move in the right direction. But for Tomasis purposes this schematic is unsatisfactory, or at least incomplete. The problem isnt that high liberals in todays philosophy and political science departments are simply confused about public policy. Their disagreements with the right actually stem from much deeper differences in conceptions of what it means to be a person in society and, for that matter, what society is. A quick seminar on Hayek isnt going to do the trick. Free Market Fairness sketches out a new liberal project, one that accepts some of the most persuasive insights from both traditions of liberal thought and finds a new framework in which to arrange them. Tomasi calls it market democracy. This history winds its way from Locke, through Scottish Enlightenment thinkers David Hume and Adam Smith, landing finally on the Austrian economist Friedrich Hayek. The strain of liberalism that results is committed to (1) a thick conception of economic liberty grounded mainly in consequentialist considerations, (2) a formal conception of equality that sees the outcome of free market exchanges as largely definitive of justice, and (3) a limited but important state role in taxfunded education and social service programs. This is the classical liberalism that many of us know and some of us love. Its during this history lesson that Tomasi begins to build his case. One thread that runs throughout high liberalism that he is quick to point out is its disregard for property rights or any formal (as opposed to material) notion of equality. Of all the liberties enjoyed by free citizens, those pertaining to the economic realm the freedom to control the means of production, say, or to negotiate ones own employment terms are the least essential and thus able to be downgraded to some extent (often in the name of justice). This is true of high liberalism from its origins in 18th-century France, from Rousseau to John Stewart Mill and John Maynard Keynes. Keyness timing, Tomasi notes, was impeccable. Just as the crash of 1929 has made people think twice about markets, Keyness work shows another way. Breakthroughs in social science would seem to have enabled the government to exert precise control over the economy, realizing a more substantive conception of equality, correcting the failures of the market, and impos88 Policy Review
he path to market democracy starts with a thoughtful genealogy of the conflict of visions from which it is born. Tomasi traces classical liberalism back to John Lockes 1 6 8 9 Second Treatise of Government. Locke was writing against two strong undercurrents of English social life, he notes. First, the lingering social eddies of feudalism . . . second, a stream of worries springing from the recent attempts by a series of English kings to establish themselves as absolute monarchs.
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ing a form of distributional justice. The government, Keynes would have it, can now fix many of societys ills by spending money. And heres the kicker: All of this new spending isnt just the governments moral obligation; it actually stimulates the economy. Its a prospect that, not surprisingly, elicited a common response among politicians: Count me in. Enter John Rawls, easily the most influential political philosopher of the second half of the 20th century, who steps into a high liberal tradition that already has some momentum behind it, and devises an extraordinarily wellargued moral justification for its ideas of distributive justice. Somewhere along the way in the American academy, high liberalism triumphed. Debates over political philosophy largely became debates about which distributive model is best from a moral point of view. Those who saw the need to respect economic liberties as on par with, say, the right to equality of opportunity, found themselves in the minority. And when it came to advocating for concrete institutional set-ups, social democracy became a house favorite. omasi is here to deliver a message to many of his colleagues in the academy. Tamp down for a moment the conviction that a defense of economic liberties is but a wordy cover for corporate greed. And consider an idea that boasts an impressive pedigree: That much like those other political and civil liberties that many on the left hold dear, economic liberties are basic and necessary to respecting free citizens as the directors of their own lives a basic precondiOctober & November 2012 89
A consequentialist argument on the value of economic liberties, that they are part and parcel of the most efficient way to organize economic activity, is not enough. In order to persuade the left liberal that property rights and the like deserve a seat at the table, those rights must be revealed as a necessary condition for citizens to respect themselves and their fellow citizens as responsible self-authors. As for his brothers in arms in the classical liberal camp, Tomasi delivers a healthy dose of Benadryl to help them suppress their allergy to social justice. His strategy here is eminently reasonable, and involves something he calls the distributional adequacy condition, which states that a defense of any version of liberalism is adequate only if it includes the claim that the institutions being endorsed are deemed likely to
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bring about some desired distribution of material and social goods. Classical liberals may talk tough about the market being the best and sometimes the only way to distribute holdings. But deep down, and whether they advertise the fact or not, classical liberals do harbor concerns about the distributions of goods, and specifically, seem to endorse the condition that a set of political and economic institutions, in order to be fully justified, must be expected to work to the benefit of the least well-off. As Tomasi gives a sampling of some flagship classical liberal thinkers on this point, one starts to realize how uncontroversial his contention is. Locke and Smith, Madison, and, wouldnt you know, even Ayn Rand can be found expressing the concern that institutions benefit the least well-off. These appeals to both the left and right are in fact just demolition work, intended to clear some ground on which to start construction of his new liberal edifice. And yet, this stage-setting is the most valuable part of the book. Coaxing liberal thinkers out of their ideological caves is a project that Tomasi, with his decidedly grown-up tone and his deep reverence for the contributions of left liberals (most notably Rawls) to the liberal tradition, carries out well. The book concludes with Tomasis attempt to write the next (or at least a new) chapter in a liberal philosophical tradition that has been divided for at least a century. What he calls market democracy isnt itself a comprehensive new view, but rather a research project that Tomasi is inviting political theorists and philosophers to contribute to. Market democracy borrows from the
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left in its emphasis on justification. It demands that institutions be justifiable to all members of society including the least well-off. But it also takes seriously economic liberty in a way that places it squarely within the classical liberal tradition. In seeking to benefit the least well-off, we must take care to do so in ways that respect the autonomy and dignity of those citizens, Tomasi explains. In disregarding economic liberties, this is a requirement that left liberals have failed to fulfill. Market democracy, its important to understand, is merely a project, one within which can exist many different market democratic theories. His preferred theory is the one from which his book derives its title: free market fairness. This is an approach that tolerates material inequality in exchange for an institutional system that benefits the poorest among us through an emphasis on economic growth. Tomasi provides only a sketch, checking various boxes and demonstrating how such a theory through an emphasis on growth and a preference for market-centered policies can fulfill the many complex requirements of an upstanding liberal theory and address some of the trickier challenges often posed from left and right. Tomasis grand project is unlikely to inspire a new stripe of liberal theorist one who takes up arms with neither side in the ongoing turf war. Its more likely that the books lasting contribution will be for those who already consider themselves defenders of the free market, but who are selling many of their beliefs short through inadequate defenses that fail to address the lefts legitimate concerns about the poor in a convincing way. For those, Tomasi has
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shown not just in terms of policy and economics but, in fact, from the standpoint of moral philosophy that defenders of limited government and markets have a strong case. More than that, he has provided a philosophical starter kit to help those who defend some form of classical liberalism to participate in the moral discussion of politics at the highest level. longer for anyone to tell its story. A book on this club surely the worlds most exclusive seems a no-brainer. But isnt that what makes a brilliant concept? Somehow, all the other writers and journalists and historians missed this alluring subject until Nancy Gibbs and Michael Duffy came along. They have taken up the task of chronicling the club and all its intrigues, rivalries, and unique camaraderie. They have done so with a lengthy, detailed, well-written, wellresearched, nicely narrated, and ultimately fascinating page-turner. More than that, with The Presidents Club Gibbs and Duffy have also produced what is sometimes referred to in the book industry as an evergreen that is, a book relevant and revisable for recurring new editions with each and every president. And they have done so in a way accessible to the lay reader, the historian, and the scholar alike none of whom can ignore this extremely interesting book.
Nancy Gibbs and Michael Duffy. The Presidents Club: Inside the Worlds Most Exclusive Fraternity. Simon & Schuster. 656 Pages. $32.50.
By Paul Kengor
think we ought to organize a former presidents club. So quipped Herbert Hoover to Harry Truman on the grandstand at Dwight Eisenhowers inaugural ceremony on January 20, 1953. Fine, smiled Truman. You be the president of the club. And I will be the secretary. And with that, The Presidents Club was officially christened. For some reason, it has taken much
Paul Kengor is a professor of political science at Grove City College. His books include The Crusader: Ronald Reagan and the Fall of Communism and Dupes: How Americas Adversaries Have Manipulated Progressives for a Century.
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he presidents club traverses presidential relationships beginning with Truman and Hoover, followed by Eisenhower and Truman, Kennedy and his club, Johnson and Eisenhower, Nixon and Reagan, Johnson and Nixon, Nixon and Ford, Ford and Reagan, Ford and Nixon and Carter, Bush and Clinton, Bush and Bush, and Obama and his club. Amid these is a chapter on The Golden Age of the Club, a period when there were no less than six living members: Bill Clinton (the standing chief executive), Nixon, Ford, Carter, Reagan, and Bush. Gibbs and Duffy appropriately start the book with a post-presidential inter-
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view with Bill Clinton in his Harlem office, where the thinning, weary-looking ex-president ruminated on his experiences with the club. Clinton dwells on one president he misses Richard Nixon and another that he loves: George H.W. Bush. Clinton warmly tells the authors about a letter on Russia that Nixon wrote to him about a month before he died. And it was so lucid, so well written, says Clinton, that I reread it every year. Clinton, who during the Nixon presidency was anything but a Nixon supporter, said that when Nixon died, it felt like the loss of his mother: Just today I had a problem and I said to the person working with me, I wish I could pick up the phone and call Richard Nixon and ask him what he thinks we ought to do about this. Clinton was also touched by the wonderful letter the senior Bush left him. You will be our President when you read this note, wrote the man that Clinton unseated. I am rooting hard for you. It is this kind of unflinching grace, a patriotic, dutiful attitude of countryfirst/office-first, which is the chief rule in the club code. It is the common bond among club members as they happily assist the current reigning member. It is a code that (they all agree) must transcend party politics. As Gibbs and Duffy note, The Presidents Club has its protocols, including deference to the man in the chair . . . The club serves to protect the office. It also means that former presidents should not openly criticize the current occupant a code that most have followed (even when difficult), except for the rare exception, such as a Jimmy Carter (more on that later).
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The club members are permitted to support whomever they like during presidential campaigns indeed, this is expected but once a new president is elected, the others act as a kind of security detail. They are dedicated to the security of the office and the successor who occupies it. It is the office that must be upheld. In a nice line, Gibbs and Duffy state that the clubs secret handshakes are less about membership than stewardship. But more than that, there is camaraderie that the presidents feel and share. They have all held a job that is unspeakable, indescribable, and that truly only another president can understand. It must be something like what war veterans feel: Your uncle who can talk about Normandy or Vietnam only with a brother who had been there. And yet, it is more than that, an even heightened level of awareness and gravity, given that you, as president, decide on things like precisely those wars and battles. Indeed, Eisenhower, the old general-turned-president, who commanded the invasion of Normandy a decade before becoming president, referred to the enormity of these presidential decisions as soul-racking. Said Ike:
The nakedness of the battlefield, when the soldier is all alone in the smoke and the clamor and the terror of war, is comparable to the loneliness at times of the presidency, when one man must conscientiously, deliberately, prayerfully scrutinize every argument, every proposal, every prediction, every alternative, every probable outcome of his action, and then all alone make his decision.
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Each and every occupant of the Oval Office faces that loneliness. It usually comes right away, when the new president receives that first ominous briefing about what a nuclear war would look like, and meets that guy in the military uniform (always nearby) who is carrying the briefcase with the codes to launch a nuclear war a moment that stunned the young John Kennedy. There is an immediate sense, says one senior presidential adviser quoted by Gibbs and Duffy, of what did I get myself into? Ive been set up. This sudden awareness of the enormity of the job is accompanied by a sudden awareness that the only people who can relate, and who are available for counsel and wisdom, are the previous occupants. No one, write Gibbs and Duffy, with the exception of [the current presidents] predecessors, knows what this is like. In some cases, the immediate predecessor is from the other political party, and was not respected by the new president, but now suddenly is. When Bill Clinton was asked if he thought more or less highly of certain predecessors, he replied without hesitation that he now thinks more highly of them all. ll the presidential relationships covered by Gibbs and Duffy are worth the read, with twists and tales in each plot and subplot. The details range from interesting policy advice provided by former presidents to (sometimes) petty squabbling and unhealed scars from past rivalries and insults. Among my favorite relationships in The Presidents Club are the group of Eisenhower, Kennedy, lbj, and Nixon.
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Prior to the presidency, jfk had seen Ike as the old man (worse, the authors quote jfk once calling Ike that old ass-e). That disrespect changed almost immediately, as Kennedy received those briefings on a nuclear war and, more so, dealt with the Bay of Pigs and Cuban Missile Crisis two episodes the authors detail and narrate exquisitely. With that, Ike soon became jfks best friend. jfk needed him in many ways. That was even more so for jfks successor, lbj, another Democrat who found himself leaning on the Republican Eisenhower. The insecure lbj, who wanted nothing to do with foreign policy, let alone Vietnam, was confounded over what to do in Southeast Asia. As only lbj could put it, I left the woman I really loved the Great Society in order to get involved with that bitch of a war on the other side of the world. What to do with that bitch? lbj went to the only former president who had been Supreme Allied Commander of nato and had defeated Hitler. He would depend on Ike in an unprecedented way for a sitting president. Especially absorbing are Richard Nixons relationships with sitting presidents, especially with jfk. The two had always been close friends and political comrades, dating back to their days in Congress. It is one of those incredible quirks of presidential history that they ended up squaring off in one of the tightest and most dubious presidential contests in history, where Kennedys supporters engaged in widespread fraud, and where a remarkably gracious Nixon did not contest the final results and demand a recount. An arrogant jfk had begun the presidency by
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claiming, I dont know anybody who can do it any better than I can. A few months later, with the Bay of Pigs fiasco, he was singing a different tune. He met with his old friend Nixon, leaning on his shoulder. It really is true that foreign affairs is the only important issue for a president to handle, isnt it? said a depressed Kennedy to Nixon. I mean, who gives a sh-t if the minimum wage is $1.15 or $1.25, in comparison to something like this? Also compelling in The Presidents Club are the sections on Truman and Hoover. Harry Truman was always a very partisan Democrat, but he cast aside that partisanship in reaching out to Herbert Hoover, the Depression-discredited Republican. Hoover had been stung by fdr constantly trashing him, his record, his policies, even his character. fdr did not treat Hoover the way we hope and expect our presidents to treat each other today. Their relationship was toxic. Roosevelt couldnt stand him, said Truman of Hoover, and he hated Roosevelt. Truman corrected that slight, and then some. He saw Hoover as immensely talented, a resource to be tapped for literally the sake of humanity in the perilous post-war period. I knew what I had to do, said Truman of that challenging world, and I knew just the man I wanted to help me. And so, Truman employed Hoovers talents to an unprecedented degree. He enlisted Hoover in an intense effort to feed a Europe threatened by starvation and Soviet communism. When we think of that effort today, we think of the likes of George Marshall. Though Hoovers significant post-World War II role has been neglected by history, Truman made it happen. To say that
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Hoover appreciated this is an understatement. He needed it, and Truman helped despite carping and moaning by fellow Democrats who had turned Herbert Hoover into a giant grim reaper, a poster boy for the Great Depression. Ironically, Trumans relationship with the next Republican president, Eisenhower, did not go as well. At first, it was splendid pure respect. But it turned sour, largely because of some serious misunderstandings and some heightened sensitivities. At the center of the friction was Senator Joe McCarthy, who was anything but a friend of the Truman administration. Truman felt that Ike not only didnt rebuke the senator but embraced him purely for political reasons to win the presidency. The Truman-Ike split reached a climax during the 1952 campaign, degenerating into what the New York Times called a bitter Eisenhower-Truman affair. The two went at it in the newspapers. Truman charged that any man who would seek the support of the likes of McCarthy was unfit to be entrusted with the presidency and the nations nuclear arsenal. He served up a vintage Truman appraisal: I skinned old Ike from the top of his bald head to his backside. Ike was not amused. Offering his appraisal of Truman, Ike growled to an aide: The man is a congenital liar. And yet, in perhaps the most moving moment in The Presidents Club, Truman and Ike, after a lengthy period of separation, spontaneously came together again. It occurred at a terrible moment: the funeral of the sitting member of the club, John F. Kennedy. Suddenly, as the two ex-presidents watched the hearse, and Jackie
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Kennedy, and the fatherless Kennedy children, they realized how petty their past bickering now seemed. They had a quiet lunch together at Blair House. It was a touching reunion in which bygones forever became bygones. ikewise of special interest in The Presidents Club are the sections on Jimmy Carter, where the authors are rightly highly critical. James Earl Carter was always a problem for the Presidents Club, write Gibbs and Duffy. His campaign of good works overseas and political redemption at home did not make him an easy man to work with. Stubborn, fiercely independent, and on occasion unusually sensitive, Carter had the habit of saying the wrong thing at the wrong time. He could be relied upon to engage in awkward self-promotion when cool modesty was in order. Gibbs and Duffy describe Carter as a self-righteous, impatient perfectionist, and say that Carter gave the rest of the club members an unusual gift: something for all the others to complain about. When nothing else seemed to unite its members, the club often bonded over what an annoying cuss Carter could be. Every club has its black sheep, note the authors, and when Nixon died, Carter assumed that role seamlessly. The other club members learned they did not want to find themselves in Carters way that is, as he jetted around the world meeting with dictators in his redemptive mission to salvage his failed presidency. This is not to say that the authors lack any appreciation of Carter. After all, he has been an especially active expresident. Just ask Carter: I feel that my role as a former president is probaOctober & November 2012 95
bly superior to that of other presidents. Carter was excellent in Panama in 1989, monitoring the fraudulent elections orchestrated by Manuel Noriega and his goons. Carter bravely informed the world, amid a dangerous situation, that the dictator was stealing the election from his own people. Gibbs and Duffy rightly called it a gutsy performance. Carter stood strong even as Gerald Ford (also sent by the Bush administration to monitor the elections) left the heat of battle to go golfing. Nonetheless, even with the good he has done, Carter, perhaps more than any member of the Presidents Club, has frequently breached the code of honor. Gibbs and Duffy note that Carter has proven both immensely useful and infuriatingly mutinous. As to the latter, they cite Carters mission to North Korea in 1994. He had gone at Bill Clintons request, but with very specific and limited orders namely, to deliver a message and bring back intelligence regarding Kims nuclear program. Instead, Carter, after delivering a litany of incredibly nave assessments of the North Korean regime, came back and announced to the American media that he had brokered a historic deal with the Stalinist despot. As White House officials gathered around the tv and watched the Georgian disclose his breakthrough, they struggled to contain their rage, with one official shouting that Carter was a treasonous prick. That is just one sample of Carters doings, often contrary to the intentions of the sitting president. Plenty of added examples came during the presidency of George W. Bush, particularly regard-
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ing the war in Iraq. In fact, there are so many of these that one of my few criticisms of Gibbs and Duffy is that they didnt get them all. ibbs and Duffy wrap up with the current case of President Barack Obama. That chapter is a work-in-progress that already commands a revised edition. The salient characters of interest are ex-presidents Clinton and George W. Bush. The more that Obama blames Bush for every woe and self-inflicted wound, the more grist he provides to Gibbs and Duffy for an extended and engrossing revised chapter. Im sure they have been collecting a file. Obamas Bush-bashing is all the more grating when one considers the graciousness that Bush has shown to Obama from the outset, even as recently as June 2012, when Bush was pure grace during a ceremony at the White House. Bush would have been fully justified if he pulled Obama aside and said, Hey, buddy, could you stop blaming your fiscal disaster on me? But as Gibbs and Duffy document, Bush told Obama from the very start, shortly after the 2008 election: We want you to succeed. Why? Well, its the country and the office. As Bush told Obama, All of us who have served in this office understand that the office transcends the individual. Thats classic club. Beyond Obama and George W. Bush, the ongoing complex relationship between Obama and Bill Clinton is intriguing. Duffy and Gibbs note the tensions and jealousies and they have just scratched the surface. As I write, there is much more to this saga. As a fellow Democrat, Clinton is dutifully campaigning for the current club members reelection; he has not refrained, however, from early on in the campaigning occasionally saying nice things about Obamas Republican challenger. Clinton has honestly noted that Mitt Romneys business experience is impressive; in fact, sterling. Clinton has seemed to show himself as still a bit at odds with Obama, with whom he has had a complicated and sometimes bitter, uneasy relationship as most recently shown by Ed Kleins book, The Amateur, released too late for Duffy and Gibbs to work into their tome. They will need to. The Presidents Club is a fascinating window into our understanding of a most unusual and intriguing institution and group of individuals. It is an excellent work. The authors should be commended for a brilliant idea exceptionally researched and executed.
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