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151. AI and the US Economy: Optimism, Pessimism, or Realism?

Author:
Fredrick Hernandez, Zach Moller, and Gabe Horwitz
Publication Date:
01-2024
Content Type:
Special Report
Institution:
Third Way
Abstract:
There were 130 websites on the internet in 1993; today there are 1.1 billion.1 Over those 30 years, the US economy quadrupled in nominal size and tripled in per capita income.2 The digital age has been very good for America. But it has also concentrated wealth and opportunity. The richest American in 1993 would only be the 101st richest today in inflation-adjusted dollars.3 There are now 735 billionaires living in America today, compared to fewer than 75 in the world in 1993.4 Meanwhile, the gains for the middle class were not stellar. Real median household income grew a solid, but not spectacular, 32% during the internet age. Most of that gain accrued to the two-fifths of working age America with a college degree.5 “50% to 70% of the changes in the US wage structure are intimately linked to automation, particularly digital automation,” MIT economist Daron Acemoglu estimates.6 That was the digital age. What about the artificial intelligence age? Ask McKinsey partner Michael Chui about AI and he says “it can be great not only for companies but for humankind.”7 But Eliezer Yudkowsky, co-founder of the Machine Intelligence Research Institute, said that if someone builds an over-powered AI, he expects “that every single member of the human species and all biological life on Earth dies shortly thereafter.”8 What seems clear is that whether we’re addressing the future of humankind or the well-being of the workforce, policymakers and industries must make intentional choices to get the best of AI and avoid the worst. Since AI will change the way we work and learn, this paper unpacks different economic projections to give policymakers a better read on what this technology will do to everything from American GDP to skill training. Broadly speaking, there are three distinct perspectives on AI and the economy. Optimists predict AI will elevate the working class, accelerate our national prosperity, and lower costs. Pessimists say AI will contribute to income inequality in the United States, jobs will be automated out of existence, and large corporations will gain far more than workers and families. Pragmatists accept AI will have positive benefits to the economy but acknowledge the mixed bag of how it will affect jobs and generally call for specific actions to mitigate harms and spread benefits. Below, we explore the key takeaways from each perspective. This is a product in a multi-year series to help educate policymakers on the implications and policy choices confronting Congress and the Administration on next generation Artificial Intelligence.
Topic:
Science and Technology, Economy, Artificial Intelligence, Digital Technologies, and Optimism
Political Geography:
North America and United States of America

152. Washington's and Taiwan's Diverging Interests Doesn't Make War Imminent

Author:
Hargisl Shirley Martey
Publication Date:
02-2024
Content Type:
Special Report
Institution:
Third Way
Abstract:
We are a month from the Taiwan 2024 election that sent shockwaves around the world. President-elect, Lai Ching-te (賴清德), dared to utter the world ‘independence” in a strike against the longstanding One China Policy (一个中国政策) in his successful campaign to lead the nation. The election was important enough for an increasingly assertive President Xi Jinping (习近平出席) to try (and fail) to influence the election’s outcome. Xi has been rattling cages for the last several years and has made no secret of his desire to bring Taiwan under Beijing’s thumb without explicitly ruling out the use of force. Meanwhile, a busy President Biden has had his hands full keeping allies committed to Ukraine, battling Putin-sympathetic members of Congress, while also dealing with cascading crises in Israel and the Middle East. With that as our backdrop, does Lai’s election, Xi’s frustration, and Biden’s preoccupation mean we are closer to conflict in the Taiwan Strait? In this brief analysis we argue that at present the answer is “no.” And we make this call by looking at the vantage points and early actions of each country. For America, the Taiwan election has put the country on alert. For Taiwan, domestic concerns are mainly driving voters – not cross-Strait policy. For the People’s Republic of China (PRC; 中华人民共和国), ignore the rhetoric because they’ve followed their Taiwan election disappointment by returning to their standard playbook.1 But stay tuned…. perhaps they’re saving the fireworks for Lai’s May 20 inauguration.
Topic:
Foreign Policy, National Security, Politics, Elections, and Strategic Interests
Political Geography:
China, Taiwan, North America, and United States of America

153. Competing Values Will Shape US-China AI Race

Author:
Valerie Shen and Jim Kessler
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Third Way
Abstract:
President Biden’s AI executive order reflects a set of values recognizable to all Americans: Privacy, equal treatment and civil rights; free speech and expression; the rule of law; opportunity and free market capitalism; pluralism; and advancement of global leadership as the beacon of a free world. President Xi Jinping’s government has also issued AI regulations with values recognizable to China: Collectivism and obedience to authority; social harmony and homogeneity; market authoritarianism and rule of state; and digital world hegemony to restore China’s rightful place as the Middle Kingdom. The United States and China may share similar broad goals for “winning” AI along the lines of leading innovation and advancement, spurring broad-based economic growth and prosperity, achieving domestic social stability, and becoming the clear global influencer for the rest of the world—but they define those goals and seek to achieve those ends through very different values. Those values embedded in our respective AI policies and underlying technology carry high-stakes, long-term national and economic security implications as US and Chinese companies compete directly to become dominant in emerging global markets. They also share similar fears that reflect each country’s values. China worries that AI could cause social unrest if information to a sheltered population is too real and unfiltered. America fears that AI could cause social unrest if information Americans receive is too fake. And that massive disinformation and algorithms that rile the population could threaten our democratic system. Why do these value differences matter when it comes to the AI race? Below, we outline six contrasting values that we believe will be the most determinative in how the US-China AI competition plays out. We argue that understanding our different values-based approaches illuminates our respective advantages and disadvantages in this competition. It assesses who is currently set up to “win” across key metrics and determines how to lean into our democratic advantages or mitigate some practical disadvantages compared with the PRC, this will ultimately win the AI marathon.
Topic:
Science and Technology, Artificial Intelligence, and Strategic Competition
Political Geography:
China, Asia, North America, and United States of America

154. Designing a New Paradigm in Global Trade

Author:
Ryan Mulholland, Trevor Sutton, and Timothy Meyer
Publication Date:
05-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
How a successful Global Arrangement on Sustainable Steel and Aluminum could function while delivering maximum benefits to workers and the environment.
Topic:
Climate Change, International Trade and Finance, Markets, Treaties and Agreements, Sustainability, and Metals
Political Geography:
Global Focus and United States of America

155. Centering Access, Quality, and Equity and Justice in a Beyond 30×30 Ocean Strategy

Author:
Angelo Villagomez, Jasmin Graham, and Alia Hidayat
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
The Biden administration should deliver an ocean conservation framework that includes new metrics for success.
Topic:
Climate Change, Environment, Oceans and Seas, Joe Biden, and Equity
Political Geography:
Global Focus and United States of America

156. The Road to Baku, Belém, and Beyond: A 5-Year Outlook for U.S. International Climate Finance

Author:
Courtney Federico
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
The United States must work to establish an ambitious new international climate finance goal this year at COP29 as part of a five-year plan to scale resources to combat the climate crisis.
Topic:
Climate Change, Diplomacy, Climate Finance, and Conference of the Parties (COP)
Political Geography:
Global Focus and United States of America

157. 3 International Climate Priorities for 2024

Author:
Anne Christianson, Trevor Sutton, and Frances Colon
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
As President Joe Biden’s first term draws to a close, his administration must deliver on three international climate policies to catalyze a 21st-century clean energy economy and avoid the worst impacts of climate change.
Topic:
Climate Change, Diplomacy, Economy, Inflation, Renewable Energy, Resilience, and Joe Biden
Political Geography:
Global Focus and United States of America

158. Extreme Heat Is More Dangerous for Workers Every Year

Author:
Jill Rosenthal, Rosa Barrientos-Ferrer, and Kate Petosa
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
Federal and state governments should step up efforts—including adopting heat standards—to address increased on-the-job heat-related injury, illness, and death.
Topic:
Climate Change, Health, Labor Issues, Regulation, and Heat Waves
Political Geography:
Global Focus and United States of America

159. Cement and Concrete Companies Leading the Net-Zero Transition

Author:
Jamie Friedman
Publication Date:
07-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
New technologies spurred by federal support show a cleaner path forward for the highly emissive cement and concrete industry.
Topic:
Climate Change, Industry, Carbon Emissions, Green Transition, Net Zero, and Concrete
Political Geography:
North America and United States of America

160. At Home or Abroad, U.S. Firearms Should Not Fuel Violence, Instability, and Abuse

Author:
Allison McManus and Laura Kilbury
Publication Date:
07-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
Congress and the Biden administration should strengthen the U.S. Department of Commerce’s efforts to prevent American firearms from reaching adversaries and fueling global violence and rights abuses.
Topic:
Foreign Policy, National Security, Weapons, and Gun Violence
Political Geography:
Israel, Latin America, and United States of America

161. Revitalizing U.S. Trade Remedy Tools for an Era of Industrial Policy in an Interconnected World

Author:
Ryan Mulholland
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
To implement an effective industrial policy, the United States needs to update its trade enforcement toolkit to meet the challenges of the modern world and utilize its existing trade authorities differently.
Topic:
Industrial Policy, International Trade and Finance, Economy, and Economic Development
Political Geography:
China and United States of America

162. Asset Price Changes, External Wealth and Global Welfare

Author:
Timothy Meyer
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
U.S. equity outperformance and sustained dollar appreciation have led to large valuation gains for the rest of the world on the U.S. external position. The author constructs their global distribution, carefully accounting for the role of tax havens. Valuation gains are concentrated and large in developed countries, while developing countries have been mostly bypassed. To assess the welfare implications of these capital gains, the author adopts a sufficient statistics approach. In contrast to the large wealth changes, most countries so far did not benefit much in welfare terms. This is because they did not rebalance their portfolios and realize their gains, while they were further hurt by rising import prices from the strong dollar.
Topic:
Globalization, Financial Markets, Currency, Valuation, and Foreign Assets
Political Geography:
North America and United States of America

163. Mild Deglobalization: Foreign Investment Screening and Cross-Border Investment

Author:
Vera Z. Eichenauer and Feicheng Wang
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Openness to foreign investments is associated with risks. To mitigate these risks, many high-income countries have strengthened the control of foreign investments over the last decade in an increasing number of sectors considered critical. Investment screening distorts the market for cross-border investments in controlled sectors, which might lead to unintended economic effects. This is the first cross-country panel study to examine the economic effects of investment screening mechanisms. We combine deal-level data on cross-border mergers and acquisitions (M&A) for the period 2007–2022 with information on sectoral investment screening. Using a staggered triple difference design, we estimate a reduction of 11.7 to 16.0 percent in the number of M&A in a newly screened sector. The effects are driven by minority acquisitions and deals involving a foreign government or state-owned enterprises or US firms as investors. There is no reduction in the number of deals within the EU/EFTA, most of which are not subject to screening. The findings call policymakers’ attention to weighing the benefits of national security and the economic costs of introducing investment screening.
Topic:
Globalization, International Trade and Finance, National Security, Foreign Direct Investment, Investment, Geoeconomics, Global Capital Allocation, and Deglobalization
Political Geography:
China, Europe, and United States of America

164. Nuclear arms control policies and safety in artificial intelligence: Transferable lessons or false equivalence?

Author:
Eoin Micheál McNamara
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
Multiple nuclear arms control treaties have collapsed in recent years, but analogies associated with them have returned as possible inspiration to manage risks stemming from artificial intelligence (AI) advancement. Some welcome nuclear arms control analogies as an important aid to understanding strategic competition in AI, while others see them as an irrelevant distraction, weakening the focus on new frameworks to manage AI’s unique and unprecedented aspects. The focus of this debate is sometimes too narrow or overly selective when a wider examination of arms control geopolitics can identify both irrelevant and valuable parallels to assist global security governance for AI. Great power leaders frequently equate AI advancement with arms racing, reasoning that powers lagging behind will soon see their great power status weakened. This logic serves to intensify competition, risking a spiral into more unsafe AI practices. The global norm institutionalization that established nuclear taboos can also stigmatize unethical AI practices. Emphasizing reciprocal risk reduction offers pragmatic starting points for great power management of AI safety. This research is part of the Reignite Multilateralism via Technology (REMIT) project, funded by the European Union’s Horizon Europe research and innovation programme under Grant Agreement No. 101094228.
Topic:
Defense Policy, Arms Control and Proliferation, Cybersecurity, Economic Policy, Artificial Intelligence, and Strategic Competition
Political Geography:
Russia, Europe, and United States of America

165. China as the second nuclear peer of the United States: Implications for deterrence in Europe

Author:
Jyri Lavikainen
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
China’s nuclear build-up will make it a nuclear peer adversary of the United States in the 2030s. The US will have to deter both Russia and China, as well as other regional adversaries, with forces geared to engage in one major war at a time. If two major wars occur either simultaneously or sequentially, US military capability will be put under great stress. In the event of a second war, the US may find itself in a situation of conventional military inferiority, which it might have to compensate for with greater reliance on nuclear weapons. Since the US remains the ultimate guarantor of European security, its deterrence challenges elsewhere affect European security as well. Thus, even the possibility of war in the Indo-Pacific is a European security issue. European NATO allies can help mitigate the two-peer problem by permanently taking on a greater share of the burden of Europe’s conventional defence. At the same time, the effectiveness of NATO’s nuclear capability must be enhanced. A strategic defeat for Russia in the war in Ukraine would postpone Russia’s ability to pose a military threat to Europe. Ukraine’s NATO membership would further serve to reduce the threat of another major war in Europe.
Topic:
Security, NATO, Nuclear Weapons, and Deterrence
Political Geography:
Russia, China, Europe, and United States of America

166. Bridging the Gap: Accelerating Technology Adoption for Sustainable Food Production

Author:
The Chicago Council on Global Affairs
Publication Date:
04-2024
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
Emerging AgTech innovations have the potential to radically improve the sustainability, profitability, and accessibility of US-produced food. Rapid adoption of agricultural technological (AgTech) innovation is required to meet the future needs of a safe and sustainable US agricultural system that generates more food despite a confluence of obstacles jeopardizing agricultural productivity, while establishing consumer trust to ensure food innovation is accepted by society. With climate change and growing populations putting increasing pressure on our food systems to produce, farmers and their supply chain partners must find a way to rise to food production challenges through the rapid adoption of technology and scientific innovation. However, a recent history of AgTech innovations that failed to achieve widespread consumer acceptance underscores the importance of consumer buy-in for technical innovation in agricultural production. We need to rebuild consumer trust of new technology in food production, streamline and coalesce processes that expedite innovation, and ensure new innovation is accessible and profitable for growers. Based on a June 2023 roundtable, the second in a series of regular convenings, the white paper "Bridging the Gap: Accelerating Technology Adoption for Sustainable Food Production" explores the current development, challenges, and potential of emerging AgTech innovations, and concludes with action recommendations designed to remove barriers and expedite the next generation of AgTech integration in US food production.
Topic:
Agriculture, Science and Technology, Food Security, Sustainability, and Productivity
Political Geography:
North America and United States of America

167. Calculable Losses? Arms Transfers to Afghanistan 2002–21

Author:
Matt Schroeder
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Small Arms Survey
Abstract:
Following the Taliban’s assumption of control in Afghanistan in August 2021, uncertainty has persisted about the scale, scope, and specific elements of the arsenal it captured from the previous regime. A new report from the Small Arms Survey, based on hitherto unpublished official data, provides the most refined picture to date of the arsenals captured by the Taliban. Calculable Losses? Arms transfers to Afghanistan 2002–21—a new Briefing Paper from the Small Arms Survey’s Contributing to Preventing Arms Proliferation from, within, and to Afghanistan project—analyses the publicly available data on arms exports to Afghanistan, identifies gaps in this data, and provides previously unreleased data obtained from the US government.
Topic:
Arms Control and Proliferation, Taliban, and Weapons
Political Geography:
Afghanistan, South Asia, and United States of America

168. Retrospectiva, incógnitas y conjeturas: imaginando la OTAN tras la guerra de Ucrania

Author:
Carlos López Gómez
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Journal on International Security Studies (RESI)
Institution:
International Security Studies Group (GESI) at the University of Granada
Abstract:
Tras el final de la Guerra Fría, la OTAN experimentó una profunda transformación en cuanto a su composición, objetivos, acciones y alcance geográfico. La invasión rusa de Ucrania ha hecho que en los últimos dos años se haya concentrado de nuevo en las funciones tradicionales de la disuasión y la defensa de sus miembros. El artículo explora las variables y condicionantes de las que dependerá el papel de la OTAN en el futuro.
Topic:
Foreign Policy, Defense Policy, NATO, Deterrence, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, and United States of America

169. El final de la Pax americana. La evolución del sistema internacional. Los nuevos equilibrios

Author:
Adela M. Alija
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Journal on International Security Studies (RESI)
Institution:
International Security Studies Group (GESI) at the University of Granada
Abstract:
En este artículo, partimos de la idea de que no estamos todavía ante una redefinición de del orden mundial creado tras la Segunda Guerra Mundial y la Guerra Fría. Ahora bien, nos encontramos ante un cuestionamiento profundo del sistema y ante desplazamientos en los equilibrios de poder que parecen mostrarnos el final de una era. El orden (o desorden) mundial del siglo XXI en el que nos encontramos está marcado por elementos que introducen incertidumbre e inseguridad. Recesión económica, pandemia, guerra, crisis diversas, desaceleración de la globalización (o quizá desglobalización) … hacen un mundo complejo y desordenado. Sobre todos estos elementos mencionados, la guerra en Ucrania representa un momento decisivo para la construcción de un nuevo orden mundial. El concepto de Pax Americana es discutible y ha sido discutido ampliamente, como analizaremos en nuestro artículo. Si consideramos el término desde la perspectiva de la supremacía de Estados Unidos en el sistema internacional, no cabe duda de que el orden mundial del siglo XX ha estado marcado por el poder estadounidense. El final de la pax americana daría lugar a un nuevo orden mundial, el orden liberal internacional habría finalizado y un nuevo orden “postoccidental” se estaría construyendo. Pero, ¿qué clase de orden? La sustitución de la pax americana y, por lo tanto, del orden liberal occidental, es todavía imprecisa. En conclusión, los objetivos de nuestro artículo son: analizar la evolución del concepto de Pax americana, entendido como símbolo de la hegemonía de Estados Unidos y Occidente en el mundo, analizar el contexto de crisis de dicha hegemonía y, por último, analizar las distintas vías de cambio del sistema internacional, partiendo de la base de que está en una fase de transición y transformación todavía incierta.
Topic:
Geopolitics, International Order, Pax Americana, and Post-Cold War
Political Geography:
Global Focus and United States of America

170. China Maritime Report No. 42: Invasion Plans: Operation Causeway and Taiwan's Defense in World War II

Author:
Ian Easton
Publication Date:
10-2024
Content Type:
Special Report
Institution:
China Maritime Studies Institute, U.S. Naval War College
Abstract:
During World War II, the United States and the Empire of Japan each developed plans and marshaled forces for a climactic battle over Taiwan. Both sides regarded the island as an area of strategic consequence. Code-named Operation CAUSEWAY, the American invasion of Taiwan would have been the largest amphibious campaign in the Pacific Theater and the largest sea-air-land engagement in world history. Strategists in Japan believed the attack was coming and designed a blueprint for the defense of Taiwan and the Ryukyu Islands called SHO-GO(捷 2 号作戦, or “Operation Victory No. 2”), which envisioned a bloody campaign of annihilation. Japanese camouflage, concealment, and deception efforts in Taiwan were effective at hiding many capabilities from American intelligence. In recent years, Taiwanese military officers have drawn lessons from Taiwan’s wartime history to improve their defense plans. They highlight the need to stockpile, update beach defenses, mobilize whole-of-society support, expand underground bunker complexes, and prepare for a long fight and layered defense campaign. One important lesson of this history for the U.S. Navy and Joint Force is that deterrence worked before. It can work again. Under certain circumstances, the United States and Taiwan may be capable of preventing a PRC invasion of the island. But a tremendous amount of hard work will be needed to realize that goal. By revisiting the history of Taiwan-focused war plans, we may better assess current challenges and develop insights that could inform future strategic, operational, and tactical decisions.
Topic:
History, Military Affairs, Maritime, World War II, People's Liberation Army (PLA), Invasion, and Operation Causeway
Political Geography:
China, Taiwan, Asia, and United States of America

171. China Maritime Report No. 41: One Force, Two Force, Red Force, Blue Force: PLA Navy Blue Force Development for Realistic Combat Training

Author:
J. Michael Dahm
Publication Date:
09-2024
Content Type:
Special Report
Institution:
China Maritime Studies Institute, U.S. Naval War College
Abstract:
Since the mid-2010s, there has been a concerted effort to professionalize a PLAN “blue force” as an opposition force, or OPFOR, in maritime exercises and training. The People’s Liberation Army (PLA) routinely refers to its blue forces as metaphorical “whetstones” used to sharpen the PLA for a future fight against enemies of the People’s Republic of China (PRC). Efforts to develop a PLAN blue force appear to have accelerated over the past several years in response to Chairman Xi Jinping’s decade-long demand for more realistic combat training. This report examines recent developments in the PLAN’s blue force. It comprises four sections. Part one provides background on PLAN efforts to professionalize its maritime blue force. Part two describes the PLAN’s blue force training units. Part three examines companies producing equipment and virtual environments for China’s blue force units, while part four discusses current blue force capabilities. The report concludes with a summary of findings and implications for the United States, its allies, and partners.
Topic:
Armed Forces, Maritime, People's Liberation Army (PLA), and Military Training
Political Geography:
China, Asia, and United States of America

172. The Strategic Adjustments of China, India, and the US in the Indo-Pacific Geopolitical Context

Author:
Binh Nguyen, Hiep Tran, Co Nguyen, and Vuong Nguyen
Publication Date:
04-2024
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
Since the beginning of the XXI century, the Indo-Pacific region has become the “focus” of strategic competition between the world’s great powers. This area included many “choke points” on sea routes that are strategically important for the development of international trade, playing an important role in transporting oil, gas, and goods around the world from the Middle East to Australia and East Asia. The article analyzed the geostrategic position of the Indo-Pacific region and the strategic adjustments in foreign affairs of some major powers in this region, specifically the US, China, and India. To achieve this goal, the authors used research methods in international relations to analyze the main issues of the study. In addition to reviewing previous scholarly research and reviews, the authors used a comparative approach to assess the interactions between theory and data. The authors believed that these data are important for accurately assessing the strategic importance of the Indo-Pacific region, and this area was an important trigger for the US, China, and India to make adjustments to its foreign policy. If the US proposed a strategy called “Free and Open Indo-Pacific” (FOIP), India’s strategy was called the Indo-Pacific Initiative. China’s Indo-Pacific strategy was clearly expressed through the “String of Pearls” strategy and the “Belt and Road Initiative” (BRI). As a result, in the geopolitical context of the Indo-Pacific region, the competition between major powers (the US, China, India...) is also becoming fiercer and more complex. It has a significant impact on other countries in the region.
Topic:
Geopolitics, Trade, and Strategic Interests
Political Geography:
China, India, United States of America, and Indo-Pacific

173. The Taiwan election result: A strategic opportunity for a calmer Taiwan Strait

Author:
Mikael Mattlin and Jyrki Kallio
Publication Date:
01-2024
Content Type:
Commentary and Analysis
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
Taiwan held combined presidential and legislative elections last weekend. The international media generally expected that a win by Lai Ching-te (DPP), who in the past has favoured independence, would lead to tensions and even conflict in the Taiwan Strait. However, there are several reasons why the opposite could be the case.
Topic:
Security, Defense Policy, Elections, and Lai Ching-te
Political Geography:
China, Taiwan, Asia, and United States of America

174. Defense Cooperation Agreements in northern Europe: Strengthening the United States’ global position, transatlantic relations, and regional deterrence and defense

Author:
Charly Salonius-Pasternak
Publication Date:
09-2024
Content Type:
Commentary and Analysis
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The US has concluded or updated bilateral Defense Cooperation Agreements (DCAs) with all Nordic states. These DCAs enhance regional deterrence, enable operational and tactical cooperation from day one in the event of war, and provide broader regional and global benefits.
Topic:
Defense Policy, Deterrence, Transatlantic Relations, and Defense Cooperation
Political Geography:
Europe, Nordic Nations, and United States of America

175. Mapping Fragility – Functions of Wealth and Social Classes in US Household Finance

Author:
Orsola Costantini and Carlo D'Ippoliti
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Which households are more exposed to financial risk and to what extent is their debt systemically relevant? To provide an answer, we advance a new classification of the population, adapted from Fessler and Schürz (2017), based on the type of wealth families own and their sources of income. Then, we investigate data from eleven waves of the Survey of Consumer Finances (SCF), a triennial survey run by the U.S. Federal Reserve, to explore the association of different debt configurations and motives to get into debt with our class distinctions. Our new approach allows us to assess competing hypotheses about debt and financial vulnerability that have so far been analyzed separately in disconnected strands of literature. The results of our study reinforce and qualify the controversial hypothesis that relative poverty and inequality of income and access to services have been important factors explaining household indebtedness and its relationship with economic growth over time.
Topic:
Debt, Poverty, Inequality, Finance, Fragility, and Income Distribution
Political Geography:
North America and United States of America

176. Labor Market Volatility and Worker Financial Wellbeing: An Occupational and Gender Perspective

Author:
Julie Yixia Cai
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
One emerging but underexplored factor that is likely to contribute to group racial earnings disparity is unstable work schedules. This is often detrimental for hourly workers when volatility is frequent, involuntary, or unanticipated. Using data from 2005-2022 monthly Current Population Survey and its panel design, this study follows a group of hourly workers across a four-month period to assess whether labor market volatility relates to their financial well-being, focusing on low-wage care and service occupations as well as female workers and workers of color. The findings are threefold: In general, during economic expansion periods, nonwhite workers often benefit more in terms of wage growth compared to their white counterparts. Second, net of other characteristics, on average, greater volatility is associated with lower earnings, and this is mostly driven by those holding jobs in low-wage service sectors and healthcare support roles. Last, the earnings consequences of volatility vary significantly by the type of low-wage jobs a worker holds and their gender and race, but this is only true when volatility happens in a job. Specifically, when working within the same employment spell, female workers, particularly those of color and those working in low-wage service and care jobs, earn significantly less when facing greater volatility than their male counterparts or those working in non-service, non-care occupations.
Topic:
Economics, Inequality, Finance, Labor Market, and Gender
Political Geography:
Global Focus and United States of America

177. Considering Returns on Federal Investment in the Negotiated “Maximum Fair Price” of Drugs Under the Inflation Reduction Act: an Analysis

Author:
Edward W. Zhou, Paula G. da Silva, Debbie Quijada, and Fred D. Ledley
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Inflation Reduction Act (IRA) of 2022 contained landmark provisions authorizing government to negotiate a “maximum fair price” for selected Medicare Part D drugs considering the manufacturer’s research and development costs, federal support for discovery and development, the extent to which the drugs address unmet medical needs, and other factors. This working paper describes federal investment in the discovery and development of the ten drugs selected for price negotiation in the first year of the IRA as well as the health value created through Medicare Part D spending on these drugs. We identified $11.7 billion in NIH funding for basic or applied research leading to approval of these drugs with median investment costs of $895.4 million/drug. This early public investment provided a median cost savings to industry of $1,485 million/drug, comparable to reported levels of investment by industry. From 2017-2021, Medicare Part D spent $126.4 billion (median $10.7 billion) for these products before rebates. Excluding two products for diabetes, Medicare Part D spending was $97.4 billion and the total health value created was 650,940 QALYs or $67.7 billion (WTP/QALY=$104K) representing a negative residual health value of -$29.7 billion (before rebates). We argue that a negotiated fair price should provide returns on both private and public investments in these products commensurate with the scale and risk of these investments, with the principal return on public sector investments being the residual health value (net price) accruing to those using the product. These empirical data provide a cost basis for negotiating a fair price that rewards early government investments in innovation and provides social value for the public.
Topic:
Economics, Health, Public Health, Pharmaceuticals, and Public Investment
Political Geography:
North America and United States of America

178. Tilting at Windmills: Bernanke and Blanchard’s Obsession with the Wage-Price Spiral

Author:
Servaas Storm
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Bernanke and Blanchard (2023) use a simple dynamic New Keynesian model of wage-price determination to explain the sharp acceleration in U.S. inflation during 2021-2023. They claim their model closely tracks the pandemic-era inflation and they confidently conclude that “… we don’t think that the recent experience justifies throwing out existing models of wage-price dynamics.” This paper argues that this confidence is misplaced. The Bernanke and Blanchard is another failed attempt to salvage establishment macroeconomics after the massive onslaught of adverse inflationary circumstances with which it could evidently not contend. It misrepresents American economic reality, hides distributional issues from view, de-politicizes (monetary and fiscal) policy-making, and sets monetary policymakers up to deliver significantly more monetary tightening than can be justified on the basis of more realistic model analyses.
Topic:
Economics, Monetary Policy, Inflation, Macroeconomics, and Wages
Political Geography:
North America and United States of America

179. The Diffusion of New Technologies

Author:
Aakash Kalyani, Nicholas Bloom, Marcela Carvalho, Tarek A. Hassan, Josh Lerner, and Ahmed Tahoun
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We identify phrases associated with novel technologies using textual analysis of patents, job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs relating to new technologies. First, the development of economically impactful new technologies is geographically highly concentrated, more so even than overall patenting: 56% of the most economically impactful technologies come from just two U.S. locations, Silicon Valley and the Northeast Corridor. Second, as the technologies mature and the number of related jobs grows, hiring spreads geographically. But this process is very slow, taking around 50 years to disperse fully. Third, while initial hiring in new technologies is highly skill-biased, over time the mean skill level in new positions declines, drawing in an increasing number of lower-skilled workers. Finally, the geographic spread of hiring is slowest for higher-skilled positions, with the locations where new technologies were pioneered remaining the focus for the technology’s high-skill jobs for decades.
Topic:
Development, Economics, Science and Technology, Innovation, and Labor Market
Political Geography:
North America and United States of America

180. Implications of the Inflation Reduction Act for the Biotechnology Industry

Author:
Cody Hyman, Henry Dao, Gregory Vaughan, and Fred D. Ledley
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Inflation Reduction Act of 2022 contains landmark provisions authorizing the government to negotiate the price of selected drugs covered by Medicare Part D. The biopharmaceutical industry has criticized these provisions as a threat to innovation arguing that reducing future revenues could disincentivize equity investment in biotechnology. This research examines the sensitivity of private and public equity investment in the biotechnology industry to drug price indices and market conditions from 2000-2022. The analysis shows that equity financing and valuation in the biotechnology industry were strongly associated with equity market conditions but not indices of either producer or consumer drug prices. These results do not support claims of an association between changing drug prices and the availability of equity capital to emerging biotechnology companies, which currently sponsor the majority of all clinical trials. These results add to evidence that the IRA may not have a negative impact on pharmaceutical innovation.
Topic:
Economics, Health, Inflation, Innovation, Biotechnology, Public Investment, and Inflation Reduction Act
Political Geography:
North America and United States of America

181. Scale and Scope in Early American Business History: The “Fortune 500” of 1812

Author:
Richard Sylla and Robert E. Wright
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Fortune magazine began publishing annual rankings of U.S. corporations by revenue in 1955. Ever since, scholars and forecasters have analyzed changes in the Fortune 500 to help inform their judgments about industry concentration and the relative importance of different sectors of the economy. Unfortunately, earlier data are scarce, especially before the Civil War. Through extensive research we have created a sort of historical “Fortune 500” going back to 1812, ranked by corporate capitalization, which we share here. Numerous insights can be drawn from this dataset, including the historical dominance of the banking and finance sectors and the early importance of manufacturing. Perhaps the larger significance of being able to come up with a Fortune 500 for 1812, though, is the fact that even with a population of only about 7.5 million, U.S. already had more business corporations than any other country, and possibly more than all other countries put together, securing its role as the world’s first “corporation nation.” The ease of incorporating businesses released a lot of entrepreneurial energy that helped to build an ever-expanding economy and by the end of the 19th century, the U.S. would be the world’s largest national economy with tens of thousands of corporations.
Topic:
Economics, History, Business, and Industry
Political Geography:
North America and United States of America

182. Tesla as a Global Competitor: Strategic Control in the EV Transition

Author:
Matt Hopkins and William Lazonick
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
In this paper, we assess the implications of Elon Musk’s strategic control over Tesla, the pioneering company that has become central to the electric vehicle transition. We document how, as Tesla’s CEO for 16 years, Musk has exercised strategic control to direct the transformation of the company from an uncertain startup to a global leader. Now that Tesla is profitable corporate predators (aka hedge-fund activists) may challenge Musk’s strategic control—a possibility of which the CEO is well aware. To retain his control over Tesla as a publicly listed company, Musk depends on holding a sufficient proportion of Tesla’s shares outstanding to possess the voting power to fend off predatory value extractors. In addition to accumulating Tesla shares by investing $291.2 million at early stages of the company’s evolution, Musk has relied upon massive stock-option grants from the Tesla board, under the guise of “compensation”, in 2009, 2012, and 2018, to boost his shareholding and, with it, his voting power. Hence the Delaware Court of Chancery’s decision in January 2024 to rescind Musk’s 2018 stock-option package—by far the largest ever granted to a corporate executive—poses a threat to Musk’s strategic control at Tesla. As the “Technoking” of Tesla strategizes to maintain his control over the company’s decision-making, anyone concerned with the role that Tesla will play in the evolving EV transition should be asking how CEO Musk might use, or abuse, his powerful position.
Topic:
Science and Technology, Economic Competition, Electric Vehicles, Tesla, and Energy Transition
Political Geography:
Global Focus and United States of America

183. Setting Pharmaceutical Drug Prices: What the Medicare Negotiators Need to Know About Innovation and Financialization

Author:
Öner Tulum and William Lazonick
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Mandated by the Inflation Reduction Act of 2022, the U.S. government through the Centers for Medicare and Medicaid Services (CMS) is negotiating with pharmaceutical companies over the “maximum fair price” of ten drugs in wide use by Medicare patients. Over the next few years, the number of drugs whose prices are subject to negotiations will increase. The pharmaceutical companies contend that a “fair” price would be a “value-based price” that enables the companies’ shareholders to capture the value that the drug creates for society. Invoking the dominant “maximizing shareholder value” ideology, the argument for value-based pricing assumes that it is only a pharmaceutical company’s shareholders who make the risky investments that fund drug innovation. Pharmaceutical executives and their lobbyists warn that a lowering of drug prices will reduce investments in new drugs. The purpose of this paper is to enable CMS negotiators to respond to these arguments by showing a) why drug-price regulation is required, given the relation between scale economies in supplying drugs and price inelasticity of drug demand; b) how the pharmaceutical companies with which they are negotiating prices are, in general, not using their profits from unregulated drug prices to fund drug innovation but rather to fund distributions to shareholders in the form of cash dividends and stock buybacks; c) that publicly listed pharmaceutical companies do not typically rely upon investment by shareholders to fund drug innovation; and d) that investment in drug innovation entails “collective and cumulative learning” in foundational and translational research that is both antecedent and external to the investments in clinical research that a pharmaceutical company may make to bring a safe and effective drug to market.
Topic:
Economics, Health, Finance, Innovation, Pharmaceuticals, and Medicare
Political Geography:
North America and United States of America

184. Good Policy or Good Luck? Why Inflation Fell Without a Recession

Author:
Thomas Ferguson and Servaas Storm
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes claims that the Federal Reserve is principally responsible for the decline of inflation in the U.S. We compare several different quantitative approaches. These show that at most the Fed could plausibly claim credit for somewhere between twenty and forty percent of the decline. The paper then examines claims by central bankers and their supporters that a steadfast Fed commitment to keeping inflationary expectations anchored played a key role in the process. The paper shows that it did not. The Fed’s own surveys show that low-income Americans did not believe assurances from the Fed or anyone else that inflation was anchored. Instead, what does explain much of the decline is the simple fact that most workers nowadays cannot protect themselves by bargaining for higher wages. The paper then takes up the obvious question of why steep rises in interest rates have not so far led to big rises in unemployment. We show that recent arguments by Benigno and Eggertson that shifts in vacancy rates can explain this are inconsistent with the evidence. The biggest factor in accounting for the strength in the economy is the continuing importance of the wealth effect in sustaining consumption by the affluent. This arises, as we have emphasized in several papers, from the Fed’s quantitative easing policies. Absent sharp declines in wealth, the continuing importance of this factor is likely to feed service sector inflation in particular.
Topic:
Economics, Monetary Policy, Federal Reserve, Inflation, and Macroeconomics
Political Geography:
North America and United States of America

185. Grand Strategy: Shield of the republic

Author:
Christopher McCallion
Publication Date:
03-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
Grand strategy is a state’s theory about how to provide for its own security. Leaders must decide how to best translate scarce means into political objectives. Limited resources and the high stakes of national survival force leaders to prioritize. Military power is dependent on wealth, industry, geographical endowments, population size, and effective domestic institutions. The various conditions in which states find themselves help motivate and constrain the grand strategy formulated by their leaders. The United States is still the most powerful, secure, and prosperous country in the world, with a favorable geographic position and many internal advantages. U.S. grand strategy has historically been concerned with preventing the rise of a regional hegemon in Eurasia by maintaining the balance of power. With the collapse of the Soviet Union, the United States became the only great power in the world. Unfortunately, it squandered the “unipolar moment” by pursuing a costly and counterproductive grand strategy of “liberal hegemony,” which has left it overextended. The United States’ secure geostrategic position and the improbability of a Eurasian hegemon allows it to adopt a grand strategy of restraint. This shift will help the United States to preserve its power, minimize risks, and adapt to the rise of new great powers. This strategy requires the United States to adopt a more rigorous definition of its vital interests and to shift to its allies the main burden of defending themselves.
Topic:
Security, Defense Policy, Geopolitics, Grand Strategy, and Unipolarity
Political Geography:
North America and United States of America

186. Grand Strategy: The Balance of Power

Author:
Christopher McCallion
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
The “balance of power” refers to the distribution of capabilities among states, as well as a possible equilibrium between them. A state’s military power is based on several factors, especially its economy and population. To survive in an anarchic world, states “balance” against rivals that threaten to become overwhelmingly powerful. This can include “internal balancing,” by which states build up their own capabilities, and “external balancing,” where states form alliances. Primacists and restrainers disagree about the balance of power. Primacists believe global hegemony is optimal and stable. Restrainers believe the pursuit of global hegemony is quixotic and self-defeating, leading to overextension and provoking counterbalancing by other powers. The United States is extremely powerful and secure thanks to its economy, geography, population, and military, among other factors. The prospect of a potential Eurasian hegemon emerging is remote. China is a formidable great power that warrants attention, but its geography makes expansion difficult, and it can be counterbalanced principally by other states in East Asia. A rough balance of power exists in both Europe and the Middle East, and therefore there’s no potential hegemon on the horizon in either region. The United States’ pursuit of primacy discourages allies from providing for their own defense to balance against threats, while uniting adversaries seeking to counterbalance the United States. The United States should instead encourage its capable allies to take responsibility for their own defense while seeking to keep its competitors divided through prudent diplomacy.
Topic:
Defense Policy, Diplomacy, Grand Strategy, and Balance of Power
Political Geography:
North America and United States of America

187. Challenges to Chinese blue-water operations

Author:
Mike Sweeney
Publication Date:
04-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
Despite having the world’s largest navy, important questions can be asked about China’s ability to challenge the U.S. Navy on a global scale. A number of factors—geography, logistical infrastructure, force structure, and command culture—all argue that China cannot do so at this time. In particular, China would need to significantly expand the number and caliber of its overseas bases in order to support large-scale, blue-water operations by the People’s Liberation Army Navy (PLAN). China currently has just two overseas bases—at Djibouti and Cambodia—and both are of limited capacity. Absent such a basing network, the PLAN is reliant on at-sea replenishment, a capability that is inherently vulnerable in wartime. China possesses some quality at-sea replenishment vessels but not nearly in sufficient quantities to support widespread global operations. While Chinese naval aviation has shown important improvements over the last year, the PLAN does not appear to have the logistical capacity to sustain high-tempo carrier operations outside the First Island Chain for an extended period of time. Super-quiet Chinese nuclear submarines would be game-changers in terms of Chinese blue-water operations. But thus far China has not shown mastery of the requisite technologies to build boats with this capability. It would also take China several years to grow a fleet of super-quiet submarines once the necessary technological challenges have been solved. Structural issues with the Chinese economy raise new concerns about Beijing’s ability to fund a blue-water navy over the long term. Such calculations must include the expense of ship construction, but also the massive operations and maintenance budget needed to deploy a potential navy of over 400 ships.
Topic:
Defense Policy, Armed Forces, Navy, Economy, and Submarines
Political Geography:
China, Asia, North America, and United States of America

188. Grand Strategy: Geography

Author:
Christopher McCallion
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
Geographic distance and the current state of military technology interact to favor defense while diminishing the threat of conquest. The stopping power of water in particular obstructs the ability of even the most powerful states to project power overseas. Proximate land powers are the most likely to engage in security competition and conflict, while distant or sea powers are relatively isolated from potential adversaries. This strategic insularity is even greater if a state has a large and diversified economy and the resources to be relatively self-sufficient. The United States is separated from other great powers by thousands of miles of ocean to both its east and west, and is the most powerful, prosperous, and secure state in the world. However, many of the same conditions which make the United States secure also make it difficult to project power, carry out wars far abroad, and maintain military primacy on land in Eurasia. The United States should both embrace its abundance of security and accept the limits to its offensive power, using its position as a continent-sized maritime power to act as an offshore balancer rather than a hegemon on the flanks of the Eurasian landmass.
Topic:
Security, Grand Strategy, Geography, and Balance of Power
Political Geography:
North America and United States of America

189. No silver bullet: Aid is not a shortcut to victory for Ukraine

Author:
Michael DiMino
Publication Date:
06-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
Delayed or insufficient Western aid is often blamed for Ukraine’s lack of success on the battlefield. The truth is more complicated. There is no aid “silver bullet” for what ails Ukraine’s war effort. More aid alone is unlikely to make a decisive difference in the outcome of the war, especially if Ukraine’s structural disadvantages and strategic deficiencies remain unaddressed. More aid is unlikely to fundamentally change the conflict because Ukraine lacks the manpower necessary to use it to generate enough new combat power to retake lost territory. Moreover, the West does not currently possess the industrial capacity needed to fulsomely sustain an indefinite Ukrainian war effort. Russian adaptability and battlefield innovation have successfully blunted the effectiveness of several Western weapon systems. And Ukrainian doctrine and tactics remain suboptimal even in the third year of the war, meaning Kyiv has failed to employ the aid it does receive with maximal effectiveness. Neither Washington nor Kyiv has articulated a clear theory of victory for Ukraine. Western aid was always a stopgap to buy Ukraine time, not a regime-change project to bring about the dissolution of the Russian state. Instead of continuing to placate maximalist fantasies of total victory, the U.S. should advocate for a shift to a defensive strategy and openness to a negotiated settlement that ends the war, such that a sovereign and independent Ukrainian state can be preserved in the face of fighting to collapse.
Topic:
Weapons, Military Aid, and Russia-Ukraine War
Political Geography:
Russia, Europe, Eurasia, Ukraine, and United States of America

190. A new NATO agenda: Less U.S., less dependency

Author:
Benjamin Friedman
Publication Date:
07-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
The United States should aggressively reduce its force presence in Europe. This would be consistent with NATO’s original balancing purpose and U.S. expectations then that garrisoning Europe was a temporary expedient, not a permanent tool of U.S. dominance. The Russian threat, despite being energized by NATO expansion, is insufficient to demand the current defense effort devoted to it in Europe, whether it’s Americans or Europeans making that effort. The results of Russia’s invasion of Ukraine underline this happy point: Russia has proven weaker than conventional wisdom held, and the advantages of defense evident in the war bode well for the territorial status quo NATO defends in Europe. A U.S. drawdown in Europe is unlikely to spark a European defense renaissance, but even so, the balance of power in Europe will remain intact, and the United States will be better off with the freed-up resources and reduced risks.
Topic:
Defense Policy, NATO, Russia-Ukraine War, Dependency, Balance of Power, and Burden Sharing
Political Geography:
Russia, Europe, North America, and United States of America

191. Grand strategy: Alliances

Author:
Christopher McCallion
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
Defense Priorities
Abstract:
Alliances are usually temporary arrangements among states to counter—or “balance” against—a specific common threat. The United States’ Cold War alliances, by contrast, have become seemingly permanent. States tend to balance power when they face a major threat. Bandwagoning, by contrast, is a particularly poor option for states with the capability to put up a fight. When threatened, states tend to join forces in alliances rather than surrender their national survival to the whims of a more powerful aggressor. Alliances, however, entail costs and risks. These include the dangers of being drawn into war through entanglement and entrapment, the deleterious effect on deterrence by allies that neglect their defense by “free-riding,” and the moral hazard produced by enabling allies to act like “reckless drivers.” Over time, the United States has shifted from a deep skepticism of “entangling alliances” to a global network of security dependents that are treated as an end in themselves, rather than a means to an end. This posture has left the United States overextended, while encouraging allies to neglect their own capabilities and preparedness. The United States can and should significantly reduce its alliance commitments, particularly in Europe and the Middle East, where threats to the U.S. are remote and local powers can balance adversaries. In Asia, the United States should act as a backstop to the regional balance of power rather than a vanguard.
Topic:
Foreign Policy, NATO, Grand Strategy, Alliance, Balance of Power, and Burden Sharing
Political Geography:
Europe, North America, and United States of America

192. Rethinking Africa Command

Author:
Mike Sweeney
Publication Date:
10-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
As debate grows over U.S. policy towards Africa, consideration should be given to altering the continent’s status under the Department of Defense’s Unified Command Plan (UCP). Eliminating Africa Command (AFRICOM) under the UCP would both signify a policy shift away from a counterterrorism focus and ease the process of implementing that change within the policymaking bureaucracy. Establishing a three-star subcommand, nested under European Command (EUCOM), would still allow the United States to use force in Africa, when necessary, but would reduce the prominence of military power in U.S. policy toward the continent. AFRICOM and EUCOM essentially share much of their force structure; this unique relationship would facilitate the transition to the proposed three-star subcommand. Altering the U.S. military footprint in Africa should also be considered in the context of any changes to policy and command arrangements. Making specific recommendations at this time is complicated by the opaqueness of the current footprint.
Topic:
Foreign Policy, Defense Policy, Armed Forces, Counter-terrorism, Africa Command (AFRICOM), and European Command (EUCOM)
Political Geography:
Africa, North America, and United States of America

193. A defensive approach to Ukraine military aid

Author:
Jennifer Kavanagh
Publication Date:
11-2024
Content Type:
Commentary and Analysis
Institution:
Defense Priorities
Abstract:
The next administration is likely to continue U.S. military aid to Ukraine to some degree, yet thus far decisions about what aid to provide have been reactive and not connected to any strategy. The United States should use its military aid to push Ukraine to adopt a defensive strategy that will be more sustainable for the Ukrainians given manpower shortfalls and more responsible and fiscally feasible for the United States, while also reducing the risk of Russian escalation. This would be in line with America’s priorities in Ukraine, including preventing a Russian victory and preserving a sovereign Ukraine at lowest possible cost and without direct involvement in the war. This strategy would also put Ukraine in a good position for a settlement that trades some land for a ceasefire and supports Ukraine’s longer-term defense. A Ukraine aid framework centered on a defensive strategy would see the U.S. provide air defense, anti-tank mines, the material and equipment to build fortifications, short-range artillery and limited short-range missile variants, small uncrewed aerial systems, and some armored vehicles for transport. In many cases, however, quantities would be limited by the needs of U.S. forces or other U.S. partners. The U.S. would not provide most types of aircraft, long-range missiles, tanks, or other weapon systems that are primarily offensive in nature and could cross a redline for Vladimir Putin.
Topic:
Defense Policy, Weapons, Military Aid, and Russia-Ukraine War
Political Geography:
Russia, Europe, Eurasia, Ukraine, and United States of America

194. The Practice, Promise and Peril of EU Lawfare

Author:
Steven Blockmans
Publication Date:
05-2024
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Power generates law and its interpretation, irrespective of whether it serves the cause of international justice. Despite its many shortcomings, the rules-based international order (RBIO) tries to advance that cause. But as a concept, the RBIO is now being rejected by China, Russia and parts of the so-called “Global South” for what they claim is the Western hegemonism and liberal values that underpin it. The fact that these countries have voluntarily signed up to the international covenants that enshrine the legal doctrines to strengthen the sovereign rights of weaker countries, especially in the context of economic relations, makes it hard to sympathise with the argument that the RBIO should be replaced by another concept, especially one that is advanced by autocracies. The RBIO has been partially shaped by the European Union (EU), a community of law that encodes the aspiration of “good global governance” in its constitutional DNA. With the waning “Brussels effect”—the soft power of EU law in shaping international rules and standards, the EU should consider how to instrumentalise the law to protect and promote its foreign policy interests, first and foremost the protection and promotion of the RBIO. This report unpacks the notion of “lawfare” and conducts a comparative analysis of such practices by the US, China, Russia, Ukraine, Turkey and others to assess the promise and peril of the EU using the power of the law to its strategic advantage.
Topic:
International Law, Sanctions, European Union, International Order, and Russia-Ukraine War
Political Geography:
Russia, China, Europe, Turkey, Ukraine, and United States of America

195. The Washington Summit: NATO-Ukraine

Author:
Henrik Larsen
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. In the first brief of the series, Henrik Larsen looks at the additional steps NATO might take in Washington to help Ukraine defeat Russia’s aggression. There is seemingly no common appetite to advance Ukraine’s membership status, but the Alliance is likely to take a new role in coordinating the delivery of lethal aid. It may also agree an initiative to secure more stable longer-term financing of military assistance. Even so, it is hard to see that NATO’s support and solidarity represent a genuine commitment to Ukraine’s future security.
Topic:
Security, NATO, Alliance, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and United States of America

196. The Washington Summit: Burden-sharing

Author:
Tony Lawrence
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. In the third brief of the series, Tony Lawrence looks at the perennial question of burden-sharing. The Allies will probably not agree to raise the 2% of GDP spending guideline. But in any case, their focus on this metric hides the real picture of how responsibility for security is shared across the Alliance. The European Allies certainly need to step up in all areas, but they should also consider reframing the burden-sharing discussion.
Topic:
NATO, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

197. Keeping the Americans In

Author:
Rachel Hoff
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. The European Allies will closely watch this year’s US elections, concerned that a second Trump Presidency may have devastating consequences for transatlantic relations. In the sixth brief of the series, Rachel Hoff looks at US rhetoric and attitudes towards NATO. The good news is that polling shows that the majority of Americans are favourable towards NATO and support Article 5. But this support drops if the European Allies fail to meet NATO’s defence spending guidelines. Whoever wins the election in November, Europe will need to pull its weight to keep the US engaged.
Topic:
Defense Policy, NATO, Deterrence, Transatlantic Relations, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

198. Ukraine’s Practical Steps towards NATO

Author:
Maksym Skrypchenko
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. Ukraine recognises that while it is unlikely to be invited to join NATO any time soon, there is much it can do to prepare itself in advance of a formal invitation. In the final brief of the series, Maksym Skrypchenko describes Ukraine’s progress in implementing its defence reform agenda, focusing on its record of adopting NATO standards, and outlines the challenges of doing so in wartime. The continuing support of NATO Allies will be essential to these efforts.
Topic:
Defense Policy, NATO, Reform, Alliance, Deterrence, and Russia-Ukraine War
Political Geography:
Europe, Ukraine, and United States of America

199. Japan, NATO, and the Diversification of Security Partnerships

Author:
Elena Atanassova-Cornelis, Takuya Matsuda, Bart Gaens, and Nele Loorents
Publication Date:
09-2024
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
The US-led military alliances remain an integral part of the defence and deterrence strategies of countries in the Indo-Pacific and Euro-Atlantic regions. Whereas the European security architecture is centred on a multilateral alliance, that is, NATO, the Asian security order is rooted in the hub-and-spokes system – the network of US-led bilateral alliances with key partners in Asia, such as Japan. Bringing in experts from Europe and Japan, this report examines the key shifts in the allies’ threat perceptions and strategic thinking on policy responses. It also explores the rise of informal security alignments designed to address both traditional and hybrid challenges and exemplified by the minilateral-type security cooperation pursued by Japan. Finally, the report zooms in on the growing interlinkages between security in the Indo-Pacific and Euro-Atlantic regions, as evidenced by the deepened security ties between like-minded partners. The report argues that the Russian invasion of Ukraine should be seen as a critical juncture for alliance politics. Military alliances are now increasingly being operationalised to enhance military readiness and effectively generate combat power in case of a contingency. The US-Japan alliance, the report finds, should be perceived as a manifestation of some of the broad and enduring changes in the role of alliance politics in international security, which are observable both in the Western Pacific and Europe. While the US-led alliance remains a key pillar of the security and defence policies of the ‘junior’ allies, notably Japan, the report highlights the allies’ uncertainties about the sustainability of the American security commitments, both in the Indo-Pacific and Euro-Atlantic region. Assessing Japan’s updated conceptualisation of security in the context of the Ukraine war and the rise of hybrid threats, the report detects a sense of urgency in Tokyo to develop a diverse set of capabilities and expand security partnerships. Australia, India, and the Republic of Korea remain a priority in terms of alignment cooperation. At the same time, the changing nature of security challenges is steadily raising the importance of cooperation with geographically distant partners, as seen in Tokyo’s evolving security partnership with the EU and NATO. Japan’s strategic partnership diplomacy exemplifies a broader trend of strategic diversification. Tokyo has been successful in utilising alignment policy to promote an interconnected network and accomplish issue-based, functional cooperation in various areas. From NATO’s perspective, addressing hybrid challenges requires collaboration with various actors, including geographically distant players. Minilateral and multilateral formats involving a small group of like-minded countries can provide NATO with the opportunity to work closely with Japan and other Indo-Pacific partners on specific issues, such as cyberattacks and disinformation campaigns.
Topic:
Security, NATO, European Union, Resilience, and Hybrid Threats
Political Geography:
Japan, China, Europe, South Korea, and United States of America

200. Advise, Assist, Enable: A Critical Analysis of the US Army's Security Force Assistance Mission During the War on Terror

Author:
John A. Nagl and Marshall Cooperman
Publication Date:
11-2024
Content Type:
Special Report
Institution:
Foreign Policy Research Institute (FPRI)
Abstract:
The U.S. Army struggled to build capable host-nation security forces in Iraq and Afghanistan because it did not give those security force assistance (SFA) missions the priority and support they deserved. Both the selection and training of U.S. advisors were highly flawed. The Army also struggled to ensure the selection of high-quality personnel into the host-nation forces. Much of the SFA effort was conducted in an ad hoc manner, without sufficient funding or strategic prioritization. Today, the Army has corrected many of the issues that plagued its SFA formations during the War on Terror by creating a permanent Security Force Assistance Command and six Security Force Assistance Brigades. It is essential for the Army to maintain and support these formations to ensure that the bitter lessons of Iraq and Afghanistan are not forgotten.
Topic:
Security, Foreign Policy, Armed Forces, and Counter-terrorism
Political Geography:
Afghanistan, Iraq, North America, and United States of America