Stanford University

Oxford Chancellor Christopher Patten Spoke at Stanford Institute for International Studies

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On April 7, The Rt. Hon. Lord Christopher Patten of Barnes delivered the Spring 2005 Payne Lecture before a large audience in the Bechtel Conference Center.

Lord Patten's address - The Transatlantic Family: Counseling, Mediation, or Divorce - although focused on American-European relations, extended to a myriad of global issues facing the transatlantic partnership. The lecture drew on Patten's exceptional public service experience, notably as the last British Governor of Hong Kong (1992-1997), EU Commissioner for External Relations (1999-2004) and Chancellor of Oxford University (2003-present).

Patten began by rebutting the notion that the U.S. is or should be an imperial power. Speaking about America, Patten observed: "You bucked what some historians going back to Thucydides believed to be almost a dictate of natural law, and refused to translate power into territorial aggrandizement and conquest. There is no real American settlement abroad. Most Americans who live overseas inhabit rich countries, not poor ones. Your universities do not, unlike Milner's Oxford, train an imperial cast of administrators. You don't seize territory though you're concerned about military bases and energy sources." America has pursued the most successful great power strategy since Augustus's Rome, Patten argued, not through imperialism, but by a tri-part policy of building institutions of global governance, persuading Europe to turn its back on xenophobic nationalism, and using American economic power and development assistance to foster market-based prosperity abroad. "That was the world in which I grew up, a world where there was stability, peace and growing prosperity year after year, but there wasn't much gratitude for the superpower."

From the very beginning many Europeans showed ingratitude and demonstrated "a particular European condescension masquerading as sophistication" Patten remarked. France in particular has displayed "petulant ingratitude". Even during the Clinton presidency, he added, there were some rows, though on the whole it was a storm-free relationship. Since 2001 however Americans and Europeans have perceived a growing gap between them on several issues, including the Middle East Peace Process, changes in US policy over North Korea, and abrogation of the ABM Treaty. The Bush administration's position on the Kyoto Protocol, in particular, impacted European public opinion negatively. By the time the Iraq crisis unfolded, Patten asserted, it appeared to confirm for many Europeans that America has turned to unilateralism. Patten emphasized that unlike President Bush who, he argued, won the 2004 Presidential election as a war President, in Britain Tony Blair, if he wins the general elections on May 5th this year, will do so not because of the war but despite it. Patten also expressed the fear that the Iraq experience will make it far more difficult to secure public support for any course of action, which will involve asking the public to put their trust in governments, and in the intelligence community in particular. About the wider Middle East he stated: What is a geostrategic issue for the United States is Europe's backyard.

Turning to what should be done to prevent the fracturing of the Transatlantic Alliance, Patten stressed that a rupture would be bad for Europe, the United States and the world at large "because whether you are talking about matters political or economic, the world is best served when transatlantic relations are in good shape". To prevent the relationship from deteriorating Americans and Europeans should first manage the relationship better. "We shouldn't take one another by surprise", he observed. Europe should also spend more on security, especially on better airlift capacity and special forces. "If we're going to be treated seriously as a partner, we have to be able to punch a little closer to our economic weight from time to time", Patten said; "too often Europeans are reluctant to accept that the maintenance of the international rule of law does sometimes require the use of force", he added. America and Europe should also spend more on development assistance, and the promotion of democracy, the rule of law and good governance. The objective of spreading democracy to the countries of the Arab League is not an impossible one. More broadly, Patten observed that "We need to identify those areas where it's imperative that we work together". Europe is never likely to be a significant contributor to a political settlement in Korea, he argues, but it can play a big role in Africa, the Balkans, in the Middle East, in Iran, and in dealing with Russia. On the latter, Patten was decisive: "If we want peace and stability in Moldova, in the south Caucuses, in the Ukraine, then Russia is going to have to stop creating trouble. It's got to abandon its present attitude to spheres of influence, and this is a point which we should put pretty bluntly, in my judgment, to President Putin. We talk in Europe regularly about a strategic relationship with Russia based on shared values. I have to say I don't see much evidence of the shared values."

The approach to global governance since World War II has been remarkably successful, Patten concluded. Recent surveys about attitudes in international affairs show that the majority of Americans, even after the Iraq war, want Europe to play a larger part in sharing world leadership. Patten expressed hope that that is a challenge Europeans will live up to. Europeans should be America's "super partners", Patten concluded, rather than its "supine followers" or "super snipers".

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The Transatlantic Relationship - A View From Germany

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From the outset, the transatlantic relationship has been more than a mere marriage of convenience. It encompasses a community of states, which are committed to common values, ideals and interests. Europe and North America can look back on a common cultural and intellectual history and they are bound together by a cultural affinity.

Transatlantic relations have benefited from the conscious decision made by the US not to withdraw from Europe in 1945, as it had done after the end of the First World War but, rather, to maintain a long-term presence. This injected an element of stability into Western Europe, which made it possible to tackle the European integration project.

Naturally, there are also conflicts of interests and areas of friction within this community of values. The transatlantic community has never been a perfect community of interests. We are each other's cousins, not identical twins.

Current contentious issues are not limited to the military action by the United States against the regime of Saddam Hussein in Iraq. Europe and the U.S. also have divergent viewpoints on issues such as climate protection, the death penalty or relations with international organizations. However, leading politicians on both sides of the Atlantic know that it is in everyone's interest to deal responsibly with such differences.

The visit by President Bush to Brussels and to Germany at the start to his second term as American president has helped to refocus the transatlantic relationship.

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Bernd Westphal Consul General Consulate General of Germany in San Francisco
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Inside the Kremlin: Soviet and Russian Leaders from Lenin to Putin

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This unit introduces students to key elements of Soviet and Russian history through the philosophies and legacies of six of its leaders - Lenin, Stalin, Khrushchev, Gorbachev, Yeltsin, and Putin. Each lesson features a 30-minute lecture about one of the leaders by a Stanford University professor. Activities utilize primary source documents, statistics, political propaganda posters, and quotes.

Brzezinski Assesses Asia

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Zbigniew Brzezinski, former national security adviser to President Jimmy Carter, delivered the Oksenberg Lecture March 9. Brzezinski asserted that by the year 2020, the "world's five most important countries" likely will be, in the following order, the United States, the European Union, China, Japan and India. The event was presented by the Stanford Institute for International Studies.
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The Trans-Atlantic Family - Counseling, Mediation or Divorce

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Christopher Patten, Rt. Honorable Lord Patten of Barnes and Chancellor of Oxford University; former Governor of Hong Kong; and former External Affairs Commissioner of the European Union, is Stanford IIS's 2005 Distinguished Payne Lecturer.

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The Honorable Christopher Patten Chancellor of Oxford University
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Frank E. and Arthur W. Payne Lecture Series

Political Reform in the Middle East: How Far Is It Going?

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Marina S. Ottaway specializes in democracy and post-conflict reconstruction issues. She is a Senior Associate of the Carnegie Endowment for International Peace in the Democracy and Rule of Law Project, a research endeavor that analyzes the state of democracy around the world and the efforts by the United States and other countries to promote democracy. Her new book, Democracy Challenged, a comparative study of semiauthoritarian regimes in Africa, the Caucasus, Latin America, and the Middle East, was published in January 2003. Her current works focus on political transformation in the Middle East and reconstruction in Iraq and Afghanistan.

She is also a lecturer in African Studies at the Nitze School for Advanced International Studies at Johns Hopkins University. Ottaway carried out research in Africa and in the Middle East and taught at the University of Addis Ababa, the University of Zambia, the American University in Cairo, and the University of the Witwatersrand in South Africa.

She received her undergraduate educatin at University of Pavia, Italy and her Ph.D. from Columbia University. Ottaway's selected Publications include, Democracy Challenged: The Rise of Semi-Authoritarianism (Carnegie, 2003); Funding Virtue: Civil Society Aid and Democracy Promotion, edited with Thomas Carothers (Carnegie, 2000); Africa's New Leaders: Democracy or State Reconstruction? (Carnegie, 1999)

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Marina Ottaway Senior Associate Carnegie Endowment for International Peace
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Mobilizing the State as Public Risk Mitigator

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Dr. Hilton Root, an academic and policy specialist in international political economy and development joined the Faculty of Pitzer, a member of Claremont Colleges, as Freeman Fellow from June 2003 to June 2005. Before joining, he served the current administration as US Executive Director Designate of the Asian Development Bank, and as senior advisor on development finance to the Department of the Treasury. Dr. Root was Director and Senior Fellow of Global Studies at the Milken Institute and was a Senior Research Fellow and Director of the Initiative on Economic Growth and Democracy at the Hoover Institution. His areas of expertise are international economics, economic development and policy reform, and Asian affairs.

As a policy expert, Dr. Root advises the Asian Development Bank, the IMF, the World Bank, the UNDP, the OECD, the US State Department, the US Treasury Department and USAID. He has completed projects in 23 countries. The analytical framework he contributed to the World Bank's Asian Miracle study, 1993, was part of the effort to put institutions on the development agenda. While at the ADB as chief advisor on governance, he was the principal author of the ADB's Board-approved governance policy. He presided over a committee on governance indicators at the OECD and initiated the restructuring of the Sri Lanka civil service as an advisor to President Chandrika Bandaranaike Kumaratunga. He was one of the principal contributors to the design of the Millenium Challenge Account of the Bush administration.

As an academic, he has taught at the University of Michigan, California Institute of Technology, the University of Pennsylvania and Stanford University. Dr. Root has written and lectured extensively, publishing six books and more than 100 articles. He is a frequent contributor to the Wall Street Journal Asia, the International Herald Tribune, Los Angeles Times and the Washington Post. He has published and presented in both the English and the French languages and has been translated into many languages including Chinese, Korean and Japanese.

He has been awarded honors for The Key to the East Asian Miracle: Making Shared Growth Credible (with J. Edgardo Campos), which won the 1997 Charles H. Levine Award for best book of the year by the International Political Science Association. The Social Sciences History Association awarded him the 1995 best book prize of its Economic History Section for The Fountain of Privilege: Political Foundations of Markets in Old Regime France and England. From the American Historical Association he received the Chester Higby Prize, 1986, for the best article among those published during the previous two years. He is on the board of a number of organizations and journals including the Open Society Institute, Center for Public Integrity and Review of Pacific Basin Markets and Policies. Dr. Root received his doctorate from the University of Michigan in 1983.

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Hilton Root Professor or Economics Claremont Colleges, Claremont, CA
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Institutions and Impersonal Exchange: The European Experience

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Avner Greif, noted Stanford Economic historian, will speak on his current research. Avner Greif received his Ph.D. from Northwestern University and his B.A. from Tel Aviv University. His research interests include European economic history, the historical development of economic institutions, their interrelations with political, social and cultural factors and their impact on economic growth. His current research focuses on institutional development and economic growth in pre-modern Europe, as well as coercion and markets.

Greif's recent publications include "A Theory of Endogenous Institutional Change," (with David Laitin) American Political Science Review, 2004; "Cultural Beliefs and the Organization of Society: Historical and Theoretical Reflection on Collectivist and Individualist Societies," The Journal of Political Economy, (October 1994); and "Coordination, Commitment and Enforcement: The Case of the Merchant Gild" (with Paul Milgrom and Barry Weingast), The Journal of Political Economy, (August 1994).

Avner Greif is a faculty associate at CDDRL.

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Avner Greif

Department of Economics
Stanford University
Stanford, CA 94305-6072

(650) 725-8936 (650) 725-5702
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Senior Fellow at the Freeman Spogli Institute, Emeritus
Bowman Family Endowed Professor in the Humanities and Sciences
avner_greif.jpg PhD

Avner Greif is Professor of Economics and Bowman Family Endowed Professor in Humanities and Sciences at Stanford. His research interests include European economic history: the historical development of economic institutions, their interrelations with political, social and cultural factors and their impact on economic growth. Some of his publications are: Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge University Press (March 2006); Impersonal Exchange without Impartial Law: The Community Responsibility System, Chicago Journal of International Law (2004); How Do Self-enforcing Institutions Endogenously Change? Institutional Reinforcement and Quasi-Parameters (with David Laitin), the American Political Science Review (2003); Analytic Narratives, Oxford University Press, 1998. Avner Greif received his Ph. D. in economics from Northwestern University, and his B.A. in economics and history - from Tel Aviv University.

Affiliated faculty at the Center on Democracy, Development, and the Rule of Law
Avner Greif The Bowman Family Endowed Professor in Humanities and Sciences and Professor, by courtesy of History, and Senior Fellow, by courtesy at SIEPR Speaker
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Adventures in Nation-Building: Afghanistan, U.S. Foreign Policy, and the Post-9/11 World

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CDDRL Fellow, J. Alexander Thier will discuss Afghanistan's experiences with nation building, particularly in the post-Taliban era. J Alexander Thier was legal advisor to Afghanistan's Constitutional and Judicial Reform Commissions in Kabul in 2003-2004, where he assisted in the development of a new constitution and judicial system. In 2002 Alex worked in Kabul as a Constitutional and Legal expert to the British Department for International Development, and as Senior Analyst for the International Crisis Group.

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J Alexander Thier Visiting Fellow CDDRL
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Remembering Y2K: The Impact Today

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Rafiq Dossani
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Y2K was shorthand for the potentially disastrous failure of computer systems at the turn of the millennium. The problem: Many old software systems might read "00" as 1900--not 2000--a glitch that could lead to a cascade of errors and malfunctions. Year two thousand came, and nothing happened--well, not much anyway. A credit card mistake here. A satellite blackout there. But no lives lost. No global economic catastrophe. Monday, January 3 was just another workday. Yet with the benefit of hindsight the economic impact of Y2K on America was far greater than the $100 billion-plus government and business spent on fixing the computer glitch. Chris Farrell reports.

Chris Farrell: Remember the dot-com boom of the 1990s? It seemed as if every entrepreneur with a good idea and a PC could challenge established companies for customers. Brick-and-mortar companies jumped on the e-commerce bandwagon. The demand for digital workers soared. Long-time computer professionals hopped from job to job, pulling down more money with every employer. Newly minted college graduates juggled multiple job offers. But when the Y2K problem emerged in the latter part of the '90s business and government quickly realized there still weren't enough IT workers on hand to find and repair the computer glitch. The quick fix? Hire computer professionals overseas. And that temporary solution permanently changed the global economy.

Paul Saffo: Y2K was huge in getting the ball rolling on offshoring.

Farrell: Paul Saffo is director of the Institute for the Future, a high-tech think tank in Silicon Valley.

Saffo: But once they went overseas, they discovered it's not just a matter of cost. These programmers overseas are often better than the best you can get in the United States.

Farrell: Ireland, the Philippines, and Israel were among the more popular destinations for offshoring Y2K programming fixes. But India became the offshore capital. It had plenty of high-tech companies staffed with well-educated English speaking digital workers. Thanks to India's steep import barriers in the 1980s, no one could afford new computer systems. So Indian tech workers were the world's leading experts in the older software languages that needed upgrading. Suhas Patil is chairman emeritus of semiconductor maker Cirrus Logic.

Suhas Patil: And they were listening to their customers and what their needs were, and as the recognition came that systems had to be upgraded to not have the problem based on the Y2K issues, that's how they got their break.

Farrell: And made the most of the opportunity. AnnaLee Saxenian is Dean of the School of Information Management and Systems at the University of California, Berkeley.

AnnaLee Saxenian: I think the importance of Y2K was overwhelmingly about establishing Indian companies' reputation among US customers and helping begin a set of customer supplier relationships that have simply taken off in the last four years.

Farrell: Of course, Y2K contracts ended in 2000. Yet many Indian companies took advantage of their now sterling programming reputations to negotiate for more sophisticated work. Research. Software development. Accounting services. Long-distance medical advice. Rafiq Dossani is a senior research scholar at Stanford University.

Rafiq Dossani: India is now growing at 70-80 per cent a year in offshored services ... services which are maintaining an accounting system, maintaining an HR system, doing claims processing, that's growing easily at 70 per cent, maybe even higher.

Farrell: Offshore also came onshore during Y2K. The town of Mountain View lies at the heart of California's Silicon Valley. Housed in one of the many nondescript low-rise office buildings that crowd the region's business avenues is the Indus Entrepreneur, or TIE. It is a networking base for the Indian high-tech Diaspora.

Shankar Muniyappa: Y2K was a big opening as early as 98.

Farrell: Shankar Muniyappa is director of information systems for TIE. He came to America for Y2K-and stayed.

Muniyappa: Myself and many of us believe still believe this is the place where you need to be if you want to be middle of innovation.

Farrell: Some 30,000 Indian IT professionals now live and work in the Valley. Rafiq Dossani of Stanford University:

Dossani: At least 25 per cent of the start ups have Indian employees at fairly senior levels working for them. And ... there's a whole infrastructure therefore being built around them because it's a substantial number now, so you see shopping malls you see business services and so on catering to this particular immigrant community.

Farrell: That community is adding vitality to the American economy. Still, many American high-tech workers are threatened by the offshoring of white collar jobs. The numbers are murky, but according to Mark Zandi of Economy.com 370,000 non-manufacturing jobs moved overseas over the past fours years-with most of the information technology jobs going to India. Salaries are down too. Still, the big factor behind the loss of 1.5 million jobs lost since Y2K is improved business efficiency or productivity - not offshoring. And Y2K also played an important role in boosting business efficiency.

Economists initially looked at Y2K as a productivity killer.

Imagine a town threatened by a rising river. Every able-bodied person in town is put to work stacking sandbags. It's necessary work to save the town - but it's unproductive work. Nothing gets built. No food gets grown.

With the Y2K bug, programmers, chief information officers, project managers, and other digital workers were getting paid to do unproductive work - stacking sandbags of silicon. No innovative investments. No new productivity enhancing software.

But economists were wrong. Y2K wasn't a flood. Instead, think of it as clearing a path choked with underbrush. Once the trail is open, it is much easier to zip from point A to point B. Y2K gave companies an excuse to clean up their software and hardware underbrush - a critical factor in today's improved business productivity. Paul Saffo:

Saffo: A lot of companies said well, gosh, if we're going to have to spend all this money to fix our software let's also see what else we can do at the same time, so it was an invitation to replace a whole bunch of stuff. ... So it forced people to ask hard questions about how they were using things and in the best instances people really did become more efficient.

Farrell: The result? Companies used the new systems they installed to cut costs and work smarter - and hire fewer workers.

[Voice of Leonard Nimoy: "Do you have hard copies of all your important documents ... such as bank statements."]

That's Leonard Nimoy, Mr. Spock from Star Trek. He's narrating the Y2K Family Survival Guide video - one of thousands of products peddled by prophets of doom. Y2K did bring home how reliant we all are on computers. Many of us still don't back up critical data at home. The same isn't true for business and government. Many learned from Y2K just how vulnerable information systems are to a malicious attack or unforeseen disaster. Case in point: Y2K actually helped some businesses survive 9/11.

[News broadcast of President George W. Bush: "I've directed the full resources of intelligence and law enforcement communities to find those responsible and bring them to justice."]

The attack on the World Trade Center stopped trading on the New York Stock Exchange. Against the odds, that citadel of capitalism opened six days later.

John Koskinen: The reason the markets, securities markets, were able to open the Monday after the Tuesday of 9-11 was they still had the test scripts that had been developed in 1998 and 99.

Farrell: John Koskinen credits preparations for Y2K. He was President Clinton's Y2K czar.

Koskinen: ... they were able to in effect take all of those Y2K scripts and make sure that all the transactions with all of the major players would close. Without that they never would have been able to do it in the time frame with the confidence they had.

Farrell: A record 2.4 billion shares traded on the New York Stock Exchange the day it reopened.

Y2K was a unique economic event. Earlier jolts to the economy, like the 1973 oil price hike and the 2001 attack of 9/11, were shocks. But the Year 2000 arrived right on schedule. The surprise was how little immediate impact the much-feared transition had on the economy. Yet we're still living and working with the economic impact of Y2K five years later.

For Marketplace and American RadioWorks, I'm Chris Farrell.

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