Publications

    Why the Trans-Pacific Partnership and Immigration Are Needed for the Middle Class

    David Dapice, June 2021 

    The US population aged 20–65, according to US Census projections, will grow by 355,000 a year this decade, and of that number, only 225,000 new entrants a year will likely be working and increasing the labor force. Yet, even after prepandemic employment is reached later this year or early in 2022, labor demand will continue to grow by millions of jobs far more than will be supplied by new entrants. If immigration policy and automation adjustments are not enough to make up for the deficit, there will be shortages and inflation, forcing the Federal Reserve to raise interest rates and perhaps cause a recession. Such a recession hurts middle- and working-class families. 

    The US has indicated it wishes to compete with China. China has already formed a large trade bloc in Asia, and the obvious alternative—the Trans-Pacific Partnership (TPP)—was negotiated by the US but was never even put up for approval, lacking support from politicians on both sides of the aisle. Given all this, it is worth asking: is the TPP actually bad for labor and the middle class?

     

    Cunningham, Edward, and Philip Jordan. 2020. “Our Path to “New Normal” in Employment? Sobering Clues from China and Recovery Scores for U.S. Industry.” Ash Center for Democratic Governance and Innovation. Read the full report Abstract

    Edward Cunningham and Philip Jordan, July 2020 

    The US National jobs reports for May and June exceeded expectations, and for many, this signaled that April was the true peak of American job losses and real recovery may be underway. Yet mounting evidence suggests that a job recovery is a long way off and that many jobs may not return.

    Part of the analytic disconnect stems from the fact that the global pandemic is a novel challenge for policymakers and analysts. We lack current, useful benchmarks for estimating the damage to the labor market, for estimating what recovery would look like, and for measuring an eventual recovery in jobs. Given this paucity of models, one place to look for patterns of potential recovery – particularly relating to consumption and mobility – is China.

    The Chinese economy is driven largely by consumption, urban job creation is driven by small and medium-sized companies, and China is several months ahead of the US in dealing with the pandemic’s economic and labor impact. An analysis of China’s experience may, therefore, offer important clues about our recovery here at home, and inform new models of thinking about American job recovery.

    William H. Overholt, December 2019

    This is an extensively edited, updated and expanded text of a lecture given for the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School on October 31, 2019. From the origination of “one country, two systems” in 1979 to today, this paper analyzes the history of the unique relationship between Hong Kong, Beijing, and the world.

    Arthur N. Holcombe, June 2017

    In this paper Holcombe discusses lessons from successful poverty alleviation in Tibetan areas of China during 1998–2016. In the period between 1978 and 2015, the World Bank estimates that over 700 million people have been raised out of poverty based on a poverty line of $1.50 per capita. It also estimates that about 48 percent of residual poverty in China is located in ethnic minority areas where top-down macroeconomic policies to reduce poverty have been least effective and where strategies to target poor ethnic minority households with additional financial, technical, and other support were not successful in overcom- ing cultural and other barriers to greater income and food security.

    Dapice, David, and Thomas Vallely. 2013. “Against the Odds: Building a Coalition”. Read the full report Abstract

    Using a New Federalism for Unity and Progress in Myanmar
    David Dapice and Thomas Vallely, March 2013

    When in 2010, the President of the Union of Myanmar, the Speaker of the Lower House and several ministers decided to push for a rapid political opening, they engineered what could be called a critical juncture. This critical juncture now provides the country with an opportunity to move forward, not only with faster economic growth, but also with better quality growth and political change that will unify the nation and create broad progress. In exploring a possible approach toward unity and progress, this paper uses the framework developed in Why Nations Fail, a recent book on economic and political development and also refers to the idea of “illiberal democracy“ articulated by Fareed Zakaria. The basic idea is that a broad coalition of the incumbent party, the democratic opposition, ethnic groups and the military is needed to fundamentally change Myanmar’s past failed orientation. This broad coalition should work for a new federalism in which states (at a minimum) have fairly elected governors and meaningful revenue sources so they can run many of their own affairs. Recognizing that central to real progress is a transition from a repressive, extractive and exclusive political system with crony businesses to a broadly inclusive political system that spreads economic opportunity, the paper argues that broad political and economic change need to go hand in hand.

    Rema Hanna, October 2012 

    This paper uses a unique data-set from Indonesia on what individuals know about the income distribution in their village to test theories such as Jackson and Rogers (2007) that link information aggregation in networks to the structure of the network. The observed patterns are consistent with a basic diffusion model: more central individuals are better informed, and individuals are able to better evaluate the poverty status of those to whom they are more socially proximate. To understand what the theory predicts for cross-village patterns, this paper estimates a simple diffusion model using within-village variation, simulate network-level diffusion under this model for the over 600 different networks in our data, and use this simulated data to gauge what the simple diffusion model predicts for the cross-village relationship between information diffusion and network characteristics (e.g. clustering, density). The coefficients in these simulated regressions are generally consistent with relationships suggested in previous theoretical work, even though in our setting formal analytical predictions have not been derived. This paper then shows that the qualitative predictions from the simulated model largely match the actual data in the sense that we obtain similar results both when the dependent variable is an empirical measure of the accuracy of a village’s aggregate information and when it is the simulation outcome. Finally, this paper considers a real-world application to community based targeting, where villagers chose which households should receive an anti-poverty program, and show that networks with better diffusive properties (as predicted by our model) differentially benefit from community based targeting policies.

    David Dapice, September 2012 

    Myanmar, long isolated from western economies due to its government, is one of the poorest and worst governed countries in the world. Ruled for many years by a reclusive dictator, senior general Than Shwe, it was dependent on China for diplomatic protection and arms. Trade and investment deals reflected its lack of alternatives. China’s “One nation, two oceans“ policy and Yunnan’s “Bridgehead“ strategy envisioned Myanmar providing access to the sea via gas and oil pipelines, deep sea ports, naval docking facilities and transport for Yunnan. Yunnan through its Southern Grid along with CPI (China Power International) saw Myanmar’s Kachin state as providing ample hydroelectric supplies for the landlocked Chinese province. Deals were signed under General Than Shwe without popular review or consultation with the Kachin whose state had most of the hydroelectric sites.

    David Dapice, May 2012 

    Electricity is a fundamental input to every modern economy. Electricity consumption per capita in Myanmar is among the lowest in Asia and had been growing very slowly since the 1980s. It gently grew from 45 kWh per capita in 1987 to 99 kWh in 2008, a 3.8 percent annual growth rate. However, since 2008, the production of electricity has jumped very quickly. This 50 percent jump in three years is about 15 percent per year, far higher than in the past. The CSO does not report any increase in installed capacity since 2009/10, so the existing system is being worked much more intensively. This creates problems, such as the risk of sudden outages from failures in generators. Indeed, there has been an increase in blackouts in the Yangon and Mandalay areas in the last year in spite of higher output; and even during the wet season. With increases in tourism, exports and overall economic activity, electricity demand will continue to soar. Even with 2011/12 output, estimated consumption in Myanmar is only about 160 kWh per capita, compared to 2009 consumption of over 250 kWh per capita in Bangladesh and nearly 600 in Indonesia. Vietnam had over 1000 kWh per capita in 2011.

    “For Vietnam, success is a choice.“ This sums up the verdict delivered by the Center’s Vietnam Program to the government of Vietnam in early 2008. In a country accustomed to outpourings of praise from multilateral donors for its economic performance, the sobering assessment was headline news. On January 15, 2008, a Vietnam Program delegation headed by Director Tom Vallely met with Prime Minister Nguyen Tan Dung in Hanoi, and presented him with this report. The paper was written in response to a request from Prime Minister Dung that the Vietnam Program conduct a critical analysis of Vietnam’s socioeconomic development strategy for the period through 2020.