Stanford University

International Relations

FSI researchers strive to understand how countries relate to one another, and what policies are needed to achieve global stability and prosperity. International relations experts focus on the challenging U.S.-Russian relationship, the alliance between the U.S. and Japan and the limitations of America’s counterinsurgency strategy in Afghanistan.

Foreign aid is also examined by scholars trying to understand whether money earmarked for health improvements reaches those who need it most. And FSI’s Walter H. Shorenstein Asia-Pacific Research Center has published on the need for strong South Korean leadership in dealing with its northern neighbor.

FSI researchers also look at the citizens who drive international relations, studying the effects of migration and how borders shape people’s lives. Meanwhile FSI students are very much involved in this area, working with the United Nations in Ethiopia to rethink refugee communities.

Trade is also a key component of international relations, with FSI approaching the topic from a slew of angles and states. The economy of trade is rife for study, with an APARC event on the implications of more open trade policies in Japan, and FSI researchers making sense of who would benefit from a free trade zone between the European Union and the United States.

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
Lectures
Frank E. and Arthur W. Payne Lecture Series

The 'Upstream' Problem in Constitutionalism

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Eugene Mazo is a post-doctoral fellow and research scholar at CDDRL, a John M. Olin fellow in law and economics at Stanford Law School, and a fellow of the Stanford Center on Conflict and Negotiation (SCCN). Educated as both a lawyer and a political scientist, he specializes in the fields of law and democracy, law and development, and law and globalization. His work has appeared in scholarly journals and in popular media outlets such as the International Herald Tribune, the San Jose Mercury News, and the Washington Post.

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Eugene Mazo Post Doctoral Fellow CDDRL
Seminars

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
Seminars

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
Seminars

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
Seminars

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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America and the New Asia

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Zbigniew Brzezinski has had a distinguished career in government and academia. From 1977 to 1981 he was the National Security Advisor to President Jimmy Carter. In 1981 he was awarded the Presidential Medal of Freedom for his role in the normalization of U.S.-Chinese relations and for his contributions to the human rights and national security policies of the United States. He is currently the Robert E. Osgood Professor of American Foreign Policy at the Paul Nitze School of Advanced International Studies, Johns Hopkins University, Washington, D.C.

The Oksenberg Lecture honors the legacy of Professor Michel Oksenberg (1938-2001) longtime member of Shorenstein APARC, senior fellow at the Stanford Institute for International Studies, and an authority on China. Professor Oksenberg was consistently outspoken about the need for the United States to engage with Asia in a more considered manner. In tribute, the Oksenberg Lecture recognizes distinguished individuals who have helped to advance understanding between the United States and the nations of the Asia-Pacific.

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The Honorable Zbigniew Brzezinski Former National Security Adviser and Professor, American Foreign Policy Johns Hopkins University
Conferences
Walter H. Shorenstein Forum for Asia Pacific Studies
Oksenberg Conference

Industry and academic R&D leaders consider the globalization of R&D in Asia in SPRIE-sponsored panel

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In light of the rise of Asia in research and development (R&D) and the challenge it poses on American supremacy, SPRIE invited industry and academic R&D leaders for a panel discussion entitled "The Globalization of R&D" on February 10, 2005. The panel included Dr. John Seely Brown, visiting scholar, Annenberg Center, USC; Dr. Kris Halvorsen, vice president and director, Solutions and Services Research Center, Hewlett-Packard; and Dr. Yoshio Nishi, director of research at the Center for Integrated Systems, director of Stanford Nanofabrication Facility, National Nanotechnology Infrastructure Network. Participants discussed a wide array of issues, including the economic rationale for new models of R&D, national/regional comparative advantage in R&D, and the coordination of global R&D.

The Economic Rationale for New Models of R&D

Dr. Nishi highlighted the economic rationale behind the quest for new models of R&D. While back in the early 1990s, a $200 million investment in R&D would grant a semiconductor company a one-year lead in technology, by the early 2000s, a one-year lag would transpire with the same investment level. Such an escalation of R&D cost points to the mounting importance of the efficiency of R&D--or as Dr. Nishi put it, the importance of generating "the right technology at the right time for the right cost." The economic forces will not only alter how R&D activities are organized and distributed within and across firms, markets, regions, and countries but also influence the breadth and depth of knowledge searches. For example, R&D alliance might become a viable and lucrative scheme for cost/risk sharing in R&D. The search for non-silicon-based devices might rise in importance as silicon fabrication reaches its limits. By the same token, the division of innovative labor across nations/regions might deepen to further exploit respective comparative advantages.

Regional Comparative Advantage in R&D

One strand of development is the globalization of R&D, which necessitates comparative advantages across regions. Dr. Brown maintained, "I'm moving my analysis from individual firms to [regional] 'niches.' What I see happening is that thousands of [regional] niches are developing all over the place. What's interesting is how dynamic these niches are in building their unique capabilities." The availability of innovative talents, for example, varies significantly across regions. Invoking "the law of large numbers," Dr. Brown pointed out that given its enormous population size, Asia could produce a large number of engineers, even if they are only a tiny fraction of the total population. Currently, the U.S. produces 50,000 engineers every year; the number is 500,000 for Asia--and it is rapidly growing. Meanwhile, more and more immigrant talents choose to return to their home countries after receiving higher education and some work experience in the U.S. Few U.S. companies can afford to ignore such alarming trends. "We need to move with the market for talent," commented Dr. Halvorsen who overseas HP's global R&D activities. Take HP's R&D effort in Bangalore, India as an example. The effort had a humble start in the mid-1980s. Yet, within ten years, the number of local technical staff grew to 3,000. Today, the number is approaching 10,000.

Market-specific demand also pushes R&D to relocate. As Dr. Halvorsen put it, "when success depends on [geographical] closeness, … you need to do design in close loop with the rest of the activities." Furthermore, overseas R&D might well find its way back into the U.S. As explained by Dr. Brown, "The rise of the middle class in China and India at 1/10 of the price point [of the U.S.]" could spur innovations at 1/10 of the price point. Innovations taking place in China or India might be totally unheard of in the U.S. and eventually finds its way into the U.S. market.

The Coordination of Global R&D

While the globalization of R&D brings many promises, it also poses acute challenges to firms that need to coordinate R&D efforts across national boundaries. As Professor William Miller pointed out, "Increase in R&D cost forces specialization. Then you have to put together an assembly of specialists. The problem is that they are everywhere. Therefore, being able to pull them together becomes the differentiator." The story of Li & Fung serves as a perfect example. Li & Fung is a global leader in the apparel business. In 2002, the company contracted with 7,500 factories in 37 countries and generated a revenue of $5 billion. In an industry with thin margins of a few percent, the company continues to uphold a return-on-equity of 30-50%. Yet, Li & Fung owns no factories. Its competitive advantage lies entirely in its expertise in assessing and orchestrating the unique capabilities of each of the 7,500 suppliers. As Dr. Brown summed up, "Making money will depend less on what you own than on what you can mobilize--[i.e. the ability to] orchestrate."

In a parallel argument, Dr. Halvorsen proposed the new model of "meta-national" R&D. Different from the traditional multinational setup, where R&D is orchestrated from the center and diffused to the peripheral, in a meta-national setup, innovation for different parts of the system are consciously placed in different parts of the world. Advances are made in parallel and feedbacks flow bi-directionally.

An even more decentralized model was advanced by Dr. Brown. Dubbed a "swarm ecosystem," such a system is characterized by one (or more) assemblers and hyper-competition among a constellation of component suppliers. The assembler merely provides the focal model with no detailed design, and leaves it to the component suppliers to compete for coming up with the best fit. In this model, the assembler does not orchestrate the development process from top-down; rather, progress is made from the bottom-up. Yet, at the end of the day, only the fittest component suppliers survive and the result is a highly efficient and competitive system that best exploits its own niches.

Other Issues

Panelists and the audience also engaged in lively discussions about intellectual property rights, organizational learning, institutional innovations, the role of public policy, and the impact of culture on innovation. The globalization of R&D--particularly rising competencies in Greater China and their network of relations to Silicon Valley and their worldwide implications--is a new priority area of research for SPRIE.

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Global Transfer of Virtual Water and Nutrients Related to Industrialized Animal Production Systems

The global trade in grain and meat between nations is extensive and is projected to grow considerably in the short term. The concept and quantification of "virtual water" involved in these trade exchanges has led to new insights of the larger consequences of global transfers in commodities. FSE will host a small international team of scholars, including economists, ecologists, and livestock specialists to scope out this issue and to expand this concept to include energy and nutrients. By documenting trends, developing scenarios for the future, the group is proposing ways to achieve desired outcomes in a way that is sustainable for the life systems needed to fuel industrial livestock systems.

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Consequences of Increased Global Meat Consumption on the Global Environment: Trade in virtual water and nutrients

Policies Matter: Why the Millennium Challenge Corporation Links Performance to Development Aid

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Sherri G. Kraham joined the Millennium Challenge Corporation (MCC) in March 2004 as its Director of Development Policy, working on a broad range of policy issues related to MCC's innovative approach to development. Ms. Kraham, a lawyer, transferred from the U.S. Department of State where she worked overseeing and implementing various U.S. Foreign Assistance including development, peacekeeping and security, humanitarian assistance, and human rights programs. She spent several years working on programs related to Iraq and prior to joining MCC, Ms. Kraham deployed to Baghdad working with the Coalition Provisional Authority as part of the first civilian team that worked on reconstruction following the war.

About the Millenium Challenge Corporation: President George W. Bush established the Millenium Challenge Account in order to link greater contributions from developed nations to greater responsibility from developing nations. The Millennium Challenge Account (MCA)is designed to concretely link assitance to performance by providing aid to those countries that rule justly, invest in their people, and encourage economic freedom. With strong bipartisan support, Congress authorized the Millennium Challenge Corporation (MCC) to administer the MCA and provided $1 billion in initial funding for FY04. President Bush's request for the MCA in FY 2005 was $2.5 billion of which Congress appropriated $1.5 billion. The President has pledged to increase funding for the MCA to $5 billion in the future.

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Sherri G. Kraham Development Policy Director Millenium Challenge Corporation
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