Stanford University

Security

FSI scholars produce research aimed at creating a safer world and examing the consequences of security policies on institutions and society. They look at longstanding issues including nuclear nonproliferation and the conflicts between countries like North and South Korea. But their research also examines new and emerging areas that transcend traditional borders – the drug war in Mexico and expanding terrorism networks. FSI researchers look at the changing methods of warfare with a focus on biosecurity and nuclear risk. They tackle cybersecurity with an eye toward privacy concerns and explore the implications of new actors like hackers.

Along with the changing face of conflict, terrorism and crime, FSI researchers study food security. They tackle the global problems of hunger, poverty and environmental degradation by generating knowledge and policy-relevant solutions. 

The Political Economy of 'Lawfare'

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This talk will analyze the evolution of lawfare, what Jeremy Bentham called "an irregular system of warfare." Meierhenrich introduces lawfare as a conceptually and analytically distinct type of warfare, and a political strategy not previously theorized in any systematic fashion. In his conceptualization, lawfare is a revolutionary strategy for broadcasting power, by which he means a strategy aimed at the systematic and comprehensive overhaul of the foundations of politics and society. This strategy comprises, inter alia, constitutional enactments, ordinary legislation, presidential decrees, and other regulatory instruments. Based on evidence from cases, Meierhenrich illustrates the economy with which the strategy of lawfare may be used and the ingenuity that it requires. Restating an influential aphorism, he shows how law made the state, and the state made law. By so doing, he explains why this irregular system of warfare stands in much higher favor with men in general than that which is carried on by open force -- illustrating the dark side of democracy and the rule of law.

About the speaker:

Jens Meierhenrich is Assistant Professor of Government and of Social Studies at Harvard University, where he is also a Faculty Associate at the Weatherhead Center for International Affairs. He recently served as the Carlo Schmid Fellow in Trial Chamber II of the International Criminal Tribunal for the Former Yugoslavia, and has previously worked with Luis Moreno Ocampo, the Chief Prosecutor of the International Criminal Court. Professor Meierhenrich is the author of a genocide trilogy, forthcoming from Princeton University Press, comprising "The Rationality of Genocide," "The Structure of Genocide," and "The Culture of Genocide." His book "The Legacies of Law" on the function of legal norms and institutions in the transition to - and from - apartheid, is currently under review. Meierhenrich's publications also include a series of articles on comparative and international law and politics. Work in progress includes a book on judicial responses to the 1994 genocide in Rwanda, a comparative analysis of international courts and tribunals, and a long-term project on state formation and state collapse. He has conducted extensive field research in several international organizations as well as in Africa, Asia, Europe, and Latin America.

Jens Meierhenrich was a Rhodes Scholar at Oxford University, where he earned a D.Phil. in politics and international relations.

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Jens Meierhenrich Assistant Professor of Government and of Social Studies Speaker Harvard University
Seminars

Energy Crossroads: Building a Coalition for a Clean, Prosperous and Secure Energy Future

Decreasing our dependence on fossil fuels is the defining challenge of our nation, our world, and our generation. Shifting geopolitical and environmental realities are creating a unique opportunity for a revolution in the way we produce, consume, and think about energy resources. The complementary strategies of diversifying our mix of low-emitting energy sources and improving our energy efficiency are critical economic, environmental, and geopolitical goalsin many ways they are lynch pins upon which our common dreams depend.

Meeting this energy challenge will require a coalition of government and NGO policymakers, engineers, entrepreneurs, corporate leaders, academics, and student activists. Driven by concerns for the environment, economic growth, and national security, there are a growing number of energy-oriented groups. Too often, these groups work in isolation unaware of each other's presence, resources, and reach. Other times, they have had insignificant means to resolve their differences. Energy Crossroads is dedicated to promoting this coalition by convening a major conference of relevant stakeholders.

Featuring a Keynote Address by NY Times Columnist Thomas Friedman, "Green is the New Red, White and Blue."

This event is sponsored by Stanford University's Office of the President, the Woods Institute for the Environment, Freeman Spogli Institute for International Studies, Precourt Institute for Energy Efficiency, The Hoover Institution, School of Earth Sciences, Department of Civil and Environmental Engineering, Stanford Center on Ethics, Business Association of Stanford Engineering Students, ASSU Speaker's Bureau, Mohr Davidow Ventures, and The 11th Hour Project.

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Return to Southeast Asia, Lame Duck President Finding a Quiet Pond

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The 14th Informal APEC Economic Leaders' Meeting concluded on Nov. 19, 2006, and the participants had their photo taken in colorful Vietnamese traditional costumes called ao dai. Still in the shadow of the congressional election failure, President George W. Bush, realizing that a stable Asia is very important for the U.S. geostrategy, took advantage of the occasion to enhance the prestige of the United States. Just as American experts said, the Bush administration has probably become a lame duck now, but even a healthy duck needs to find a quiet pond.

"APEC's uniquely trans-Pacific character is an important political reason for U.S. to strengthen the group," Donald Emmerson, director of the Southeast Asia Forum of Shorenstein APARC at Stanford University, explained. "While APEC has lagged, East Asian regionalism has boomed. That has been good for East Asia. But U.S. and East Asian interests alike could be hurt if the Pacific Ocean ends up being split between rival Chinese and American spheres of influence."

However, the U.S. effort to save the Doha Round of trade talks with the Asia-Pacific Free Trade Agreement has yielded little. The Doha Round aimed to remove trade barriers in the world but was suspended due to some countries' agriculture protection policies. Washington had wanted to model the Doha Round upon the Asia-Pacific Free Trade Agreement. But U.S. officials never expected that there would be so many differences among the Asia-Pacific leaders, and that the economic development of Pacific Rim countries differ in thousands of ways. Despite the fact that the Hanoi Statement reiterated that supporting the Doha Round was APEC's priority, no material progress has been made.

"The U.S. is urging a last ditch effort to restart the talks through APEC," Professor Charles Morrison, president of the East-West Center located in Hawaii, says. "Whether or not APEC can do more than make a rhetorical statement of support is unsure. I feel that the APEC economies should agree to prepare new offers within a short period of time -- three weeks, for example -- to challenge the Europeans, Brazilians, Indians and others."

United States Steps Out to "Please" ASEAN

Seventeen years after its establishment, APEC now plays a decisive role in the international political arena. It has 40 percent of the world's population, 48 percent of the world trade volume and 56 percent of the world GDP. Since 1989, the economy in this region has grown by 26 percent, compared to only 8 percent economic growth rate in the rest of the world. With the double advantage of economic strength and rapid growth, China, being one of APEC's main economies and its "engine," has fully taken the limelight. On the other hand, the United States has been weighed down with countering terrorism in the Middle East.

"China has done very well in enhancing its relations with Southeast Asia in recent years," Sheldon Simon, professor of the Program in Southeast Asian Studies at Arizona State University, points out. "China has not only established a free trade forum for China and ASEAN countries, but also helped and influenced the area with its economy and culture. But I think that the United States has realized the importance of this area and come back to fasten its friendly relationship with the region."

The United States coming back to Southeast Asia and repairing its relations with the ASEAN countries is partly activated by China's increasing influence in the area.

"The naissance and growth of some democratic countries in Southeast Asia has received sympathetic response of democratic values from Washington," said Simon. "With the traditional friendly relations between the area and the United States, these countries value their friendship with the United States sometimes more than the trust in their neighboring countries. Geopolitics is also very important factor. The Asia-Pacific area is a very important to the world economy and the U.S. power structure. Therefore, the United States will not easily give it up."

Another motive for the United States to foster closer relations in the area is the common interest of countering terrorism. There are still some terrorist groups in Indonesia, the Philippines and southern Thailand.

"President Bush has a perfect attendance record at APEC meetings (Clinton missed two of them), which says that he does take APEC seriously and believes Asia is important to U.S. interests," Ralph Cossa, president of the Pacific Forum Center for Strategic and International Studies, said in an interview with the Washington Observer Weekly.

Besides attending the APEC summit meetings annually, Washington has recently activated several plans to "please" the ASEAN countries, including setting up a ministerial dialogue system with them and a platform for maintaining contact at the deputy finance minister level, even increased exchanges at the deputy defense secretary level.

The extent of U.S. efforts to foster cordial relations with Southeast Asian countries can also be seen in the increasingly friendly U.S.-Vietnamese economic and trade relations. The Bush administration is not only supporting Vietnam to enter the WTO, but has even proposed giving Vietnam Permanent Normal Trade Relations (PNTR) status.

"The reason that Bush failed to bring the gift of PNTR status to the APEC Hanoi summit is that the Congress dominated by the Republicans was lacking efficiency and could not pass the proposal in time," Simon explained. "But I think that it will be passed as soon as possible in the next month or by the Democrats who begin to dominate the Congress from next January."

Simon and Cossa both admit that Burma is an unharmonious element in U.S. relations with ASEAN. The Burmese dictatorial military government is really the most typical negative example of democracy for the United States. But ASEAN countries are reluctant to see Burma "punished" by the United States for ideological reasons. So Burma has become a sensitive issue in U.S.-ASEAN relations.

"This is a good way for him to interact with ASEAN since Myanmar is not there and this issue does not have to be addressed," said Cossa.

Simon, an expert of Southeast Asia affairs, points out ASEAN countries should be happy about the advantage they have with China and the United States vying for their attention. Being able to juggle the two big powers, Southeast Asia has gained many practical interests and financial aid for its economy, trade, security, culture and education.

"In a short period, there will not be any serious interest conflicts in the triangle balance of China, the United States and ASEAN," Simon told the Washington Observer Weekly. "ASEAN countries' only worry, if there is any, is an accidental spark in the U.S.-China military interaction in Southeast Asia such as the confrontation across the Taiwan Straits."

Turning the Asia-Pacific into a "Gigantic Enterprise?"

"The United States wants to demonstrate its continuing interest in the Asia-Pacific region. It is urging for a study of an Asia Pacific free trade area and support for an APEC business card, and both shifts of approach, illustrate its interest in and support for the APEC process," said Morrison.

An important subject for the APEC Hanoi summit is the "active discussion" of establishing an APEC free trade region. Former U.S. President Bill Clinton proposed for the first time in 1993 the setting up of such an economic zone. Before Bush's visit, Deputy U.S. Trade Representative Karan Bhatia suggested that establishing an APEC free trade zone would be a subject worth serious discussion. But his proposal did not receive a warm response from the host. The Vietnamese Deputy Foreign Minister Le Cong Phung stressed that establishing a free trade zone is a long-term objective and will not affect progress of negotiations with the WTO or other bilateral trade agreements.

"Regarding the study of the Asia Pacific free trade area, a number of economies were skeptical because it would be such a large undertaking," said Morrison. A similar plan was once axed in an APEC ministerial statement and the leaders attending this summit do not seem to have much interest in it.

Simon explained Bush's thinking on the subject: "Washington reiterated its intention to establish an Asia-Pacific free trade zone in order to save the precarious WTO Doha Round. Breaking the tariff barriers in the Asia-Pacific region will help continue to press relevant countries to concede in granting agricultural tax subsidies and hopefully open the door to the Doha Round."

The five-year Doha Round was suspended in July this year because six major WTO members -- the United States, the European Union, Japan, Australia, Brazil and India -- failed to reach agreement on market access for agricultural and non-agricultural products. Given the situation, the organizer said that the informal APEC economic leaders' meeting would provide a "good opportunity" to help restore the Doha Round talks. However, the Hanoi summit joint declaration just vaguely indicated that APEC will pursue further integration on issues such as energy in 2007. It would be extremely optimistic to expect that APEC will be able to remove all the tariff barriers in the region before 2010. Although the area produces 50 percent of the world's economic value, the styles and stages of economic development, the cultural backgrounds and political systems of the countries in the region vary a great deal, making it very difficult for these Asian countries to eliminate all these discrepancies and become fully integrated.

"Out of different worries, many Southeast Asian countries are actually not interested in the proposal though they do not speak out. Or we may say that it's not time yet now to change the Asia-Pacific region into a gigantic enterprise," Simon told Washington Observer Weekly.

Quite apart from who concedes what in return for what concession over the APEC free trade mechanism, the question arises: What geographical scope should a regional trade arrangement have? Who should be a party to the agreement and who should not?

There would appear to be three different ideas on the table: (a) the APEC-wide free trade area that the United States proposed at the recent summit in Hanoi; (b) the East Asia Summit-wide framework that Japan reportedly favors, which would include ASEAN + 6 (China, Japan, South Korea, India, New Zealand, Australia) but not the United States; and (c) the ASEAN Plus Three (China, Japan, South Korea) context that China seems to prefer, in which the exact positions of Tokyo and Beijing are not entirely clear.

"Without discussing the merits or demerits of each of these arrangements, suffice it to note that since ASEAN is common to all of them, the net effect of these alternative ideas is to strengthen the negotiating position of ASEAN," said Emmerson. "Then again, ASEAN will not necessarily be unified as to its preference for the three proposals. It will be interesting to look for the positions to be taken by individual ASEAN countries and for their collective effort to arrive at a single negotiating position, e.g., in the run-up to the ASEAN summit and the second the East Asia Summit in the Philippines next month."

Cossa has hope for 2007. "The U.S. in particular would like to see APEC moving faster, and will look ahead to next year, with Australia in the chair, for some real progress."

American Public Doesn't Share Washington's Interest in Southeast Asia

The prospect of economic and strategic cooperation brought about by APEC made for a lively week in Southeast Asia. But it stirred little response in the United States. According to the interviewed experts of Southeast affairs, the American public is still haunted by the situation in Iraq and the mid-term election. Even the U.S. media framed the event as Bush's first visit to a foreign country since the Republicans were defeated in the mid-term election.

"Because of the Congressional election, President Bush will want to show leadership rather than simply respond to the new Congress. Both Doha and the nuclear proliferation issue are examples," said Morrison.

Cossa holds a different view: "I don't think the elections will have any major impact on what Bush does or how he does it during this trip. Iraq is his legacy. What he does in Asia can make things better or worse at the margins but will likely be overshadowed by Iraq."

Simon echoed the sentiment. "On one hand, the Republican Party's defeat in the election cannot directly influence Bush's trip to Asia. On the other hand, Bush's economic achievements in the Southeast region will not add to his political record. In Asia, only the North Korea issue may sway the public opinion in the United States."

Yan Li, Washington Observer weekly - Issue No. 201, November 22, 2006

Reprinted by Permission February 12, 2007.

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More than a Club in the World

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"More than a Club in the World" has long been the slogan of the largest and perhaps greatest soccer club in the world. FC Barcelona was one of the first soccer clubs to be founded in Spain. It became a haven for Catalan sentiment when Catalan self-government and Catalan culture were proscribed during the dictatorship. It has since become a global enterprise with global commitments, while continuing to identify Europe's largest and most developed non-state culture.

About the Speaker

Joan Laporta is the president of Football Club Barcelona. He has a law degree from the University of Barcelona. He specializes in civil and trading law, and has his own firm, Laporta & Arbós Advocats Associats.

Mr. Laporta became president of FC Barcelona on June 15, 2003 and won a second presidential term in summer 2006. Under his leadership, the club has striven to promote the values that have traditionally been associated with Barça: Catalan nationalism, civilian duty, and universality. FC Barcelona has since become a club with an enormous public resonance. Their recent partnership with UNICEF is a statement of the club's continuing efforts to be at the forefront of solidarity projects with a global reach.

Sponsored by the Iberian Studies Program, Forum on Contemporary Europe, the Office of the Provost, Department of Athletics, and the Freeman Spogli Institute for International Studies

 

Event Synopsis:

Mr. Laporta details the early leadership of the club and the political challenges the club has faced, including the shooting of the club's president by Franco's troops during the Spanish Civil War, the opening of police files on the club when it did not support the regime, and attempts to change the club's name to "Espana." He emphasizes the club's strong history of integration, international spirit, and defense of rights and liberties. He explains that FC Barcelona survived the many obstacles of the 20th century because it is "more than a club" - it defends Catalan rights in Catalonia, democratic rights in Spain, and human rights worldwide. The club's social commitments include donating 7% of revenue to a foundation aimed at furthering the Millennium Development Goals, and partnering with UNICEF on development initiatives. 

With more than 4% of the population (247 million people) involved in soccer around the world, and more countries affiliated with FIFA than with the United Nations, FC Barcelona aims to adapt to a global environment while preserving its Catalan identity. Its players recognize that they are role models to fans across the world, and the club recognizes that its sporting, economic, and social facets work together to make the club successful. Mr. Laporta concludes by asserting that FC Barcelona today is in one of the best positions of the club's history.

 

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Arrillaga Family Sports Center
Stanford University
641 Campus Drive
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Joan Laporta President, Futbol Club Barcelona Speaker
Lectures

Property Rights and Property Wrongs: Survey Evidence on the Legitimacy of Privatization in Russia

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About the talk:

Are property rights obtained through dubious means forever tainted with original sin or can rightholders make their ill-gotten gains legitimate by doing good works? Using an experiment embedded in a survey of 1600 residents of conducted in Russia in October 2006, I find that the original sin of an illegal privatization is difficult to expunge, but that businesspeople can improve the legitimacy of property rights by doing good works, such as providing public goods.

About the speaker:

Timothy Frye is a Professor of Political Science at Columbia University. His research and teaching interests are in comparative politics and political economy with a focus on the former Soviet Union and Eastern Europe. He is the author of Brokers and Bureaucrats: Building Markets in Russia, (Michigan Press 2000), which won the 2001 Hewett Prize from the American Association for the Advancement of Slavic Studies. He has published articles on property rights, the rule of law, protection rackets, economic reform, presidential power, and trade liberalization. Current projects include a book manuscript on the politics of economic reform in 25 postcommunist countries from 1990-2002 and articles on property rights and the rule of law drawing on surveys of business elites and the mass public in Russia.

Timothy Frye received his Ph.D. in political science from Columbia University in 1997. He has an MIA degree from the School of International and Public Affairs at Columbia University, and a BA in Russian language and literature from Middlebury College.

This event is co-sponsored by the Center for Russian, East European and Eurasian Studies (CREES), under Title VI of the Department of Education.

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Timothy Frye Professor of Political Science Speaker Columbia University
Seminars

The Khodorkovsky Case: Human Rights and Rule of Law in Putin's Russia

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Robert R. Amsterdam, founding partner of the international law firm Amsterdam & Peroff, is counsel to the former Yukos head and political prisoner Mikhail Khodorkovsky. For more than 25 years, Mr. Amsterdam has represented corporations and investors in a variety of emerging markets lacking in rule of law, such as Russia, Nigeria, Venezuela, and Guatemala, overseeing complex commercial litigation and advising on political risk. He has delivered speeches before the Carnegie Endowment, the Cato Institute, Georgetown University, University College London, and Chatham House. He has published numerous opinion articles on energy politics and law in the Wall Street Journal, International Herald Tribune, the National Law Journal, the Guardian, and the Independent, among other media. Mr. Amsterdam maintains a blog at www.robertamsterdam.com and is working on a forthcoming book.

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Robert Amsterdam Speaker
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Understanding National Cohesion and Regime Coping Strategies in Saudi Arabia

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Dr. Joshua Teitelbaum is a Senior Research Fellow at Tel Aviv University's Moshe Dayan Center for Middle Eastern and African Studies, where he studies the politics and history of Saudi Arabia and other Persian Gulf countries, as well as Palestinian issues. He is the author of two acclaimed books: Holier Than Thou: Saudi Arabia's Islamic Opposition (Washington Institute for Near East Policy), and The Rise and Fall of the Hashemite Kingdom of Arabia (New York University Press), a study of the early modern history of Saudi Arabia. He has published numerous scholarly articles on the modern Middle East and his work has also appeared in The New Republic and The Jerusalem Report. He has been a visiting professor in Cornell University's Department of Near Eastern Studies and at the Jackson School of International Studies, University of Washington, and a Visiting Fellow at the Washington Institute for Near East Policy. He is currently Schusterman Visiting Associate Professor at CDDRL.

Dr. Teitelbaum is an Associate of the Proteus Management Group, US Army War College Center for Strategic Leadership, under the sponsorship of the Office of the Director, National Intelligence.

Dr. Teitelbaum is a native of the San Francisco Bay Area. He received his B.A. in Near Eastern Studies at UCLA and his M.A. and Ph.D. in Middle Eastern History at Tel Aviv University.

Reuben W. Hills Conference Room

Joshua Teitelbaum

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Encina Hall
616 Serra Street
Stanford, CA 94305-6055

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Senior Research Fellow at the Moshe Dayan Center for Middle Eastern Studies at Tel Aviv University
JoshuaTeitelbaum082007.jpg PhD
A native of the San Francisco Bay Area, Dr. Joshua Teitelbaum took his B.A. in Near Eastern Studies at UCLA and his M.A. and Ph.D. in Middle Eastern History at Tel Aviv University. He is the author of two acclaimed books: Holier Than Thou: Saudi Arabia's Islamic Opposition (Washington Institute for Near East Policy), and The Rise and Fall of the Hashemite Kingdom of Arabia (New York University Press), a study of the early modern history of Saudi Arabia. His edited volume - for which he has written the introduction - Political Liberalization in the Persian Gulf is forthcoming from Columbia University Press. He has published numerous scholarly articles on the modern Middle East and his work has also appeared in The New Republic and The Jerusalem Report. Dr. Teitelbaum is a Senior Research Fellow at Tel Aviv University's Moshe Dayan Center for Middle Eastern and African Studies, where he studies the politics and history of Saudi Arabia and other Persian Gulf countries, as well as Palestinian issues. He is CDDRL Rosenbloom Visiting Associate Professor for the Spring quarter of 2008.

Teitelbaum was a legislative aide to Congressman Paul N. McCloskey, Jr., of California's 12th District.

He has been a visiting professor in Cornell University's Department of Near Eastern Studies and at the Jackson School of International Studies, University of Washington, and a Visiting Fellow at the Washington Institute for Near East Policy. He has spoken at the Council on Foreign Relations, San Francisco's Commonwealth Club, the Middle East Institute, the Foreign Policy Research Institute in Philadelphia, the US Naval Postgraduate School, the Department of State's Bureau of Intelligence and Research, the Federal Bureau of Investigation, the Central Intelligence Agency, the US Army War College, the Italian Ministry of Defense, Israel's National Security Council, the Israeli Foreign Ministry, and most major university Middle East centers in the US and Canada. His comments and expertise have been sought by the New York Times, the Washington Post, the Wall Street Journal, the Los Angeles Times, Reuters, the Associated Press, the Baltimore Sun, the Jerusalem Post, Ha'aretz, Ma'ariv, Yediot Aharonot, the Straits Times and the Voice of America. He regularly reviews scholarly manuscripts for Cambridge University Press, Oxford University Press, New York University Press, Palgrave, and C. Hurst & Co.

Dr. Teitelbaum is an Associate of the Proteus Management Group, US Army War College Center for Strategic Leadership, under the sponsorship of the Office of the Director, National Intelligence.

CDDRL Visiting Associate Professor, Spring Quarters 2007, 2008 & 2009
Joshua Teitelbaum Senior Research Fellow at the Moshe Dayan Center for Middle Eastern Studies, Tel Aviv University; CDDRL Schusterman Visiting Associate Professor, Spring 2007 Speaker
Seminars

Project Timeline: Program for the Study of Biofuels, Poverty and Food Security

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A concept note about setting up an international program for studying the effects of the emergence of biofuels on global poverty and food security. 

The recent global expansion of biofuels production is an intense topic of discussion in both the popular and academic press. Much of the debate surrounding biofuels has focused on narrow issues of energy efficiency and fossil fuel substitution, to the exclusion of broader questions concerning the effects of large-scale biofuels development on commodity markets, land use patterns, and the global poor. There is reason to think these effects will be very large. The majority of poor people living in chronic hunger are net consumers of staple food crops; poor households spend a large share of their budget on starchy staples; and as a result, price hikes for staple agricultural commodities have the largest impact on poor consumers. For example, the rapidly growing use of corn for ethanol in the U.S. has recently sent corn prices soaring, boosting farmer incomes domestically but causing riots in the streets of Mexico City over tortilla prices. Preliminary analysis suggests that such price movements, which directly threaten hundreds of millions of households around the world, could be more than a passing phenomenon. Rapid biofuels development is occurring throughout the developed and developing world, transforming commodity markets and increasingly linking food prices to a volatile energy sector. Yet there remains little understanding of how these changes will affect global poverty and food security, and an apprehension on the part of many governments as to whether and how to participate in the biofuels revolution.

We propose an international collaborative effort to:

  • Understand and quantify the effects of expanding biofuels production on agricultural commodity markets, food security, and poverty;
  • Develop training programs and policy tools to harness the benefits and mitigate the damages from such expansion on both local and global scales; and
  • Build an international network of scholars and government officials devoted to studying and managing biofuels development and its social consequences
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Scott Rozelle
Rosamond L. Naylor
Kenneth Cassman

Irrigation Water Pricing Policy in China

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As water becomes scarcer in northern China, designing policies that can induce water users to save water has become one of the most important tasks facing China's leader. Past water policies may not be a solution for the water scarcity problem in the long run. This paper looks at a new water policy: increasing water prices so as to provide water users with direct incentives to save water. Using a methodology that allows us to incorporate the resource constraints, we are able to recover the true price of water with a set of plot level data. Our results show that farmers are quite responsive if the correct price signal is used, unlike estimates of price elasticities that are based on traditional methods. Our estimation results show that water is severely under priced in our sample areas in China. As a result, water users are not likely to respond to increases in water prices. Thus as the first step to establishing an effective water pricing policy, policy makers must increase water price to the level of VMP so that water price reflects the true value of water, the correct price signal. Increases in water prices once they are set at the level of VMP, however, can lead to significant water savings. However, our analysis also shows that higher water prices also affect other aspects of the rural sector. Higher irrigation costs will lower the production of all crops, in general, and that of grain crops, in particular. Furthermore, when facing higher irrigation costs, households suffer income losses. Crop income distribution also worsens with increases in water prices.

In summary, our paper provides both good news and bad news to policy makers. On the one hand, water pricing policies obviously have great potential for curbing demand and helping policy makers address the emerging water crisis. On the other hand, dealing with the negative production and income impacts of higher irrigation cost will pose a number of challenges to policy makers. In other words, if China's leaders plan to increase water prices to address the nation's water crisis, an integrated package of policies will be needed to achieve water savings without hurting rural incomes or national food security.

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Scott Rozelle
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