Stanford University

The Post-Washington Consensus

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(excerpt) The last time a global depression originated in the United States, the impact was devastating not only for the world economy but for world politics as well. The Great Depression set the stage for a shift away from strict monetarism and laissez-faire policies toward Keynesian demand management. More important, for many it delegitimized the capitalist system itself, paving the way for the rise of radical and antiliberal movements around the world.

This time around, there has been no violent rejection of capitalism, even in the developing world. In early 2009, at the height of the global financial panic, China and Russia, two formerly noncapitalist states, made it clear to their domestic and foreign investors that they had no intention of abandoning the capitalist model. No leader of a major developing country has backed away from his or her commitment to free trade or the global capitalist system. Instead, the established Western democracies are the ones that have highlighted the risks of relying too much on market-led globalization and called for greater regulation of global finance.

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Journal Articles
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Foreign Affairs
Authors
Francis Fukuyama

Spending Without Taxation: FILP and the Politics of Public Finance in Japan

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Governments confront difficult political choices when they must determine how to balance their spending. But what would happen if a government found a means of spending without taxation? In this book, Gene Park demonstrates how the Japanese government established and mobilized an enormous off-budget spending system, the Fiscal Investment Loan Program (FILP), which drew on postal savings, public pensions, and other funds to pay for its priorities and reduce demands on the budget.

Although other governments have operated systems of policy finance, none have approached the Japanese system in size or been structured to deliberately relieve pressure on the budget so that it could remain balanced and low-tax. Park lays out a compelling puzzle leading us to ask why and how the Japanese created this system, why and how it was allowed to grow to such immense size, and then why it has begun to be reformed and wound down.

-Leonard Schoppa, University of Virginia

[P]rovides a compelling rationale for FILP's importance in Japan's postwar political economy. . . . [N]o one has brought to bear the sustained focus, historical scope, or analytical rigor that Gene Park has with this book.

-William W. Grimes, Boston University

Park's book argues that this system underwrote a distinctive postwar political bargain, one that eschewed the rise of the welfare state and Keynesianism, but that also came with long-term political and economic costs that continue to this day. By drawing attention to FILP, this study resolves key debates in Japanese politics and also makes a larger point about public finance, demonstrating that governments can finance their activities not only through taxes but also through financial mechanisms to allocate credit and investment. Such "policy finance" is an important but often overlooked form of public finance that can change the political calculus of government fiscal choices.

Gene Park is an assistant professor in the Department of Political Science at Baruch College. He has also been a Shorenstein Fellow at the Walter H. Shorenstein Asia-Pacific Research Center, and a visiting scholar at the Japanese Ministry of Finance's Policy Research Institute. He was also the receipient of a Fulbright IIE fellowship. He has a PhD in political science for the University of California, Berkeley.

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Gene Park
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9780804773300

Physician Ownership of Non-Physician Medical Services

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Dr. Brian Chen's research has examined the tradeoffs between moral hazard and efficiencies in the integration of physician and non-physician medical services in the presence of asymmetric information. He has looked at a policy intervention in Taiwan that prohibited self-referrals of patients to physician-owned pharmacies unless the physician group integrated pharmacy services into the clinic by hiring an onsite pharmacist. He found that the policy reduced drug expenditures by close to thirty percent among physicians that did not have an onsite pharmacist. However, these physicians responded by increasing the overprovision of diagnostic services not covered by the policy, thereby reducing the effectiveness of the policy. Forty-five percent of the clinics that did not have an onsite pharmacist prior to the policy hired one subsequent to the implementation of the policy. Overall, after integration, the policy applied to only seventeen percent of clinics, and only reduced average discretionary expenditures by about two-point-five percent. Chen's research also shows that despite the reduction in drug utilization, patients treated at clinics without an onsite pharmacist did not have greater observable adverse health events than patients treated at integrated clinics. His results show that moral hazard costs of self-referral incentives are large, that the “safe harbor” exemption severely reduces the effectiveness of the policy, and that the exemption explains much of the recent integration of ancillary services into physician offices.

Dr. Brian Chen recently completed his Ph.D. in business administration in the Business and Public Policy Group at the Haas School of Business, University of California at Berkeley. He received a Juris Doctor from Stanford Law School in 1997, and graduated summa cum laude from Harvard College in 1992.

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Brian Chen

Shorenstein APARC
Stanford University
Encina Hall, Room E-301
Stanford, CA 94305-6055

(650) 736-0771 (650) 723-6530
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2011 AHPP/CEAS Visiting Scholar
IMG_5703.JPG JD, PhD

Dr. Brian Chen is currently a visiting scholar with the Asia Health Policy Program and Center for East Asian Studies at Stanford University. He was recently Shorenstein Asia-Pacific Research Center's 2009-2010 postdoctoral fellow in Comparative Health Policy. As a visiting scholar, Dr. Chen will conduct collaborative research about health of the elderly and chronic disease in China.

As an applied economist, Chen’s research focuses on the impact of incentives in health care organizations on provider and patient behavior. For his dissertation, Chen empirically examined how vertical integration and prohibition against self-referrals affected physician prescribing behavior. His job market paper was selected for presentation at the American Law and Economics Association’s Annual Meeting, the Academy of Management, the Canadian Law and Economics Association, the Conference on Empirical Legal Studies, and the First Annual Conference on Empirical Health Law and Policy at Georgetown Law Center in 2009.  The paper was also nominated for best paper based on a dissertation at the Academy of Management.

Chen comes to the Shorenstein Asia-Pacific Research Center not only with a multidisciplinary law and economics background, but also with an international perspective from having lived and worked in Taiwan, Japan, and France. He has a particularly intimate knowledge of the Taiwanese health care system from his experience as an assistant to the hospital administrator at a medical college in Taiwan.

During his past residence as a postdoctoral fellow with the Asia Health Policy Program, Chen conducted empirical research on cost containment policies in Taiwan and Japan and how those policies impacted provider behavior. His work also contributed to the program’s research activities on comparative health systems and health service delivery in the Asia-Pacific, a theme that encompasses the historical evolution of health policies; the role of the private sector and public-private partnerships; payment incentives and their impact on patients and providers; organizational innovation, contracting, and soft budget constraints; and chronic disease management and service coordination for aging populations.

Dr. Brian Chen recently completed his Ph.D. in Business Administration in the Business and Public Policy Group at the Haas School of Business, University of California at Berkeley. He received a Juris Doctor from Stanford Law School in 1997, and graduated summa cum laude from Harvard College in 1992.

Brian Chen 2011 AHPP/CEAS Visiting Scholar Speaker Stanford University
Seminars

Health, Gender, and Migrant Workers in China

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This colloquium will feature presentations by two visiting scholars from China. First, Dr. Huijun Liu will present research on health risks associated with gender imbalance in China. The problems of abnormal sex ratio at birth and high female infant mortality have plagued many Asian countries with a strong male preference and gender inequality. In China, these problems having lasted for more than twenty years and contributed to a serious gender imbalance in the population. As a direct consequence, “surplus men” or “forced bachelors,” are expected to increase to more than 30 million. Dr. Liu will discuss the potential health risks and other social problems likely to be exacerbated by this large-scale gender imbalance in China.

Second, Dr. Dahai Zhao will present “How Is Health Insurance Coverage Utilized among Migrant Workers in Shanghai, China?” According to the regulations of the Chinese national and Shanghai municipal governments, migrant workers employed in Shanghai should all be entitled to the Shanghai Migrant Worker Hospitalization Insurance (SMWHI) without premium and the vast majority should also have coverage through the New Rural Cooperative Medical System (NRCMS). Dr. Zhao will present results from research, conducted jointly with Dr. Wei Yu and Dr. Alan M. Garber, examining the status of the coverage and utilization of health insurance among migrant workers employed in Shanghai. Through their study, they found that a significant minority of migrant workers in Shanghai still had no health insurance, and that health insurance utilization among migrant workers was strongly limited by hospital location.

Huijun Liu is an associate professor in the Public Policy and Administration School at Xi'an Jiaotong University, China. She received her PhD in management science and engineering from the Management School of Xi'an Jiaotong University. Her main areas of research focus on gender imbalance, reproductive health, vulnerability, and social support. Her current research focuses on how gender imbalance and migration amplify the risk of HIV transmission in China. Liu has published over twenty papers in Chinese academic journals, including China Soft Science, Population and Economics, Psychological Science Advance, Collection of Women's Studies, and Modern Preventive Medicine.

Dr. Zhao is an assistant professor with the School of Public Economics and Administration at Shanghai University of Finance and Economics (SUFE), and a fellow with the Center for Health Policy at SUFE. He earned a master's degree in medicine in 2005 and a PhD in 2008, both from Fudan University, China.

Daniel and Nancy Okimoto Conference Room

Huijun Liu

Shorenstein APARC
Stanford University
Encina Hall, Room E301
Stanford, CA 94305-6055

(650) 862-7601 (650) 723-6530
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huijun.jpg PhD

Huijun Liu is an associate professor in the Public Policy and Administration School, Xi'an Jiaotong University, China. She received her PhD in management science and engineering from Management School of Xi'an Jiaotong University. Her main areas of research focuses on gender imbalance, reproductive health, vulnerability and social support. Her current research focuses on how gender imbalance and migration amplify the risk of HIV transmission in Chinese transformation society.

Liu has published over twenty papers in Chinese academic journals, which was featured in China Soft Science, Population & Economics, Psychological Science Advance, Collection of Women's Studies and Modern Preventive Medicine.

2010-2011 Visiting Scholar
Huijun Liu 2010-2011 Visiting Scholar Speaker Stanford University
Dahai Zhao Visiting Scholar at Center for Health Policy Speaker Stanford University
Seminars

Democratic Reform in China: Personal Reflections

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Professor Li Liang Dong of the Central Party School's Politics and Law Department advises directly senior officials in the Chinese Communist Party.  Professor Li received his doctorate from the Central Party School in Law.  His main research areas are:  democratic perspective, Western political thought, and political theory. 

Some of his key works include: "Contemporary Chinese Studies of Public Opinion" (Central Party School Press, 1996), "Mao Zedong and Chinese farmers" (China Farmers Press, 1993), "Contemporary Chinese Democracy Studies" (Contemporary World Press, 2001 edition) and "Third Wave and the Chinese Democracy" (Central Party School Press, 2001 edition).  He has published over 300 articiles.  Professor Li has hosted discussions on topics including "Public Discussion in China",  "Societal Transitions", and "Study of Political Stability".

Co-sponsored by The Center for Deliberative Democracy at Stanford University

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Li Liang Dong Professor, Department of Politics and Law Speaker Central Party School, Beijing, China
Seminars

Pantech Fellow John Everard discusses North Korea’s markets and ruling elite

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As the world continues to wonder about the possibility of a regime change, North Korea, in the grip of a record-breaking harsh winter, has asked for international food aid. Does this spell social and political unrest? John Everard, the 2010-2011 Pantech Fellow at the Stanford Korean Studies Program, was quoted recently in the Washington Post and the New York Times, regarding North Korea’s markets and ruling elite perspectives about food distribution within the context of the current situation.
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Winter on the Tumen River in North Korea.
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Interview with U.S. Ambassador to the ROK Kathleen Stephens

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U.S. Ambassador to the Republic of Korea (ROK) Kathleen Stephens presented the talk "U.S.-Korea Relations: Where We've Been, Where We're Going" on March 2 at the Walter H. Shorenstein Asia-Pacific Research Center. In a post-event interview with Yonhap News, Ambassador Stephens discussed key points in the U.S.-ROK relationship, and spoke to her experience as an ambassador and as a Peace Corps volunteer in the ROK.

Q. While the ROK-EU Free Trade Agreement (FTA) will come into force on July 1, the ROK-U.S. FTA is still awaiting approval from the U.S. Congress. Could you tell us about the prospects for Congressional approval of the deal?

"It was such a significant issue that even President Barack Obama mentioned the trade deal during his State of the Union address in January, and he also called on Congress to ratify it ‘as soon as possible.' Therefore, you will likely see in the coming weeks the submission of the legislation to Congress, and I expect that it will pass through both the House and the Senate after a robust discussion of it. I think that with the Administration and many stakeholders in the United States from business to workers to individual states and communities saying how important this is for the American economy and for Korea-U.S. relations, I'm very optimistic about the ratification process."

Q. The Six-Party Talks aimed at resolving the North Korean nuclear issue have been at a stalemate for more than two years. Some officials, such as Senate Foreign Relations Committee Chairman John Kerry, argue that the United States should have bilateral dialogue with the North to smooth the way for the resumption of the [Six-Party] Talks. What do you think we need now to resume the stalled Six-Party Talks?

"U.S. Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell and U.S. Special Representative for North Korea Policy Stephen Bosworth already mentioned this issue in details at a Senate Foreign Relations Committee hearing on the North Korean issue yesterday (March 1). We all agree that it is very important to improve inter-Korean relations, and we also understand that when we verify that the North truly wants to see a tangible improvement in its relations with the ROK, we should be ready to accept bilateral and multilateral dialogue."

Q. Regarding Mr. Bosworth's mention about food aid to the North, some observers speculate that there will be some change in the stalled U.S.-North Korea relations.

"(Shaking her head) The U.S. approach on the provision of humanitarian assistance including food assistance internationally has always been a principled one based upon an assessment of the need and the ability to monitor in an appropriate way to ensure the assistance gets to those who are most needy. We are applying those same principles to any consideration of humanitarian assistance to North Korea, and therefore, he [Amb. Bosworth] did not indicate any particular change."

Q. The "Jasmine Revolution" is sweeping the Middle East. Considering the lack of social networking services and a different type of regime in North Korea, it may be difficult to draw a direct comparison [between the Middle East and North Korea,] but do you think that the pro-democracy movements in the Middle East could affect North Korea?

"To be honest with you, I do not know. It is difficult to speculate on it because North Korea is certainly one of the most isolated places in the world when it comes to the availability of news about the outside world."

Q. While the ROK-EU Free Trade Agreement (FTA) will come into force on July 1, the ROK-U.S. FTA is still awaiting approval from the U.S. Congress. Could you tell us about the prospects for Congressional approval of the deal?

"It was such a significant issue that even President Barack Obama mentioned the trade deal during his State of the Union address in January, and he also called on Congress to ratify it ‘as soon as possible.' Therefore, you will likely see in the coming weeks the submission of the legislation to Congress, and I expect that it will pass through both the House and the Senate after a robust discussion of it. I think that with the Administration and many stakeholders in the United States from business to workers to individual states and communities saying how important this is for the American economy and for Korea-U.S. relations, I'm very optimistic about the ratification process."

Q. Recently, the issue of redeploying U.S. tactical nuclear weapons to the ROK in the event of a contingency on the Korean Peninsula stirred up some controversy. Some observers also point out that it is possible for the United States to assist the ROK with tactical nuclear weapons as part of its extended deterrence. If the ROK wants, is there a possibility that the United States will redeploy its tactical nuclear weapons to USFK?

"Our position is very clear on this, and we reaffirmed it at a Senate hearing yesterday (March 1). We want to see the complete denuclearization of the Korean Peninsula. That means no nuclear weapons in North Korea. There are no nuclear weapons right now in South Korea. In terms of the ROK, it's our assessment that the reintroduction of these weapons is neither desirable nor needed."

Q. President Obama, in his speeches, praised the ROK especially for its education. In the ROK, however, many people point out that the education problem is very serious. What is your take on this?

"So many Koreans talked about it. Those who are currently living in the ROK or those who have been watching the ROK's education system may know that education is such an important issue for Koreans. Personally, I am also well aware of (Koreans') education fervor as well as the stress incurred by children and families due to excessive [education-related] competition.

President Obama seems to think that every education system has some problems, and he appears to want to introduce Korea's education fervor and parents' active interest in education to the United States. In my opinion, President Obama believes that in this aspect, the ROK is a good model.

However, as everybody knows it, there is no such thing as a perfect education system. Therefore, while the United States learns education fervor from the ROK's education system, the ROK could learn a wider variety of teaching methods from the United States."

Q. Would you raise your child in a Korean-style education system?

"Since my son has already grown up, I can only give you a hypothetical answer. The biggest challenge would be language, but I can say 'Yes.' This is because I know that the ROK also has many good schools and teachers. However, when it comes to sending my child to ‘hagwon,' a private institute, I would need to discuss with Korean parents, teachers and friends."

Q.  Could you tell us about U.S.-ROK relations and public sentiments in both countries now and at the time of your assignment to the ROK? When you arrived in the ROK, U.S. beef imports were a "big issue."

"The ROK and the United States have a very friendly alliance, and they are deepening and expanding it day by day. In addition, I think that I am lucky that I have served in the ROK at a time when I can contribute to creating the best and strongest relationship in the world.

When I arrived in the ROK in September, 2008, I received a truly warm welcome from the ROK—although it is a Korean tradition. When I went out on the streets, many people, who had concerns or expectations about ROK-U.S. relations, recognized and approached me and said that they wanted to see an improvement in ROK-U.S. relations. This is a message showing that the ROK-U.S. relations are very important, and we are actually working together to maintain a good relationship. 

Even President Obama said that (the bilateral relationship) ‘has never been better than it is today.' (A fluent Korean speaker, Stephens repeated the same phrase in Korean.)"

Q. Unlike other U.S. Ambassadors to the ROK, you travel across the ROK to reach out to Koreans, even gaining the nickname "Star Ambassador." Is there any special reason?

"Thank you very much for appreciating my efforts. Whenever I am assigned to a certain nation, I think that I must understand the nation and its people because that is what a diplomat and an Ambassador is supposed to do. To me, Korea this may have been a little easier than it was for my predecessors. This is because I lived in the ROK before, I speak Korean, and I feel comfortable with Korean culture.

I visited the ROK in 1975 for the first time, and I wanted to know how much the ROK and Koreans' thought have changed ever since, and I watched actual changes with interest.   

Q.  This might be a little premature, but you are going to leave office in six months. Do you have any future plans? Are you going to continue to work to strengthen ROK-U.S. relations?

"(Laughter) This is my third time to live in the ROK. It is a great honor to serve as the U.S. Ambassador to the ROK. In my third year in office, I still have many things to do, including the ROK-U.S. FTA, but after leaving office, I hope to continue to make contributions to this great (U.S.-Korea) relationship for the rest of my life. In fact, I do not know what to do after leaving office, but I will always carry a huge interest in and commitment to this relationship."

Q. This year marks the 50th anniversary of the foundation of the Peace Corps. You actually worked as a Peace Corps volunteer in the ROK. What does the Peace Corps mean for you? How did your service in the ROK affect you today?

"Thank you for asking that question. The Peace Corps is still engaging in various activities around the world, and I think that it is the best program ever from the United States Government. I can say that this program has inspired the United States and people around the world throughout many generations.

It is true that while serving in the ROK as a Peace Corps member, I underwent a series of difficulties which I had never experienced before. It was not easy for a young woman to adapt to living and working in a nation which she hardly knew.

At that time, I needed to completely assimilate into a Korean organization. I serve in many countries as a diplomat, but it is about working at a U.S. Embassy, a U.S. institution.  Therefore, it is difficult to compare it with Peace Corps activities. I think that at that time, I had experience which was totally new mentally, physically, and emotionally. However, any Peace Corps member has such experience.

[Through such experience,] I witnessed the strength and various talents of Koreans in person, and that has had an enormous impact on my life.  

Translation by Yonhap News. Republished with permission.

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U.S. Ambassador to the ROK Kathleen Stephens, speaking at Shorenstein APARC on March 3, 2011.
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