Brazil is a land of contrasts; at the same time that it is emerging as a global economic power, it is also one of the most unequal countries in Latin America. When "Lula" Da Silva and his Workers' Party ("PT") won the 2002 election, they intended to pay a historical debt to the poor. Lula envisioned a country with inclusive growth, where redistribution and poverty reduction were seen as prerequisites for economic growth, and not as competing policy objectives (Leubolt, 2013: 76). In doing so, his government not only changed the content of social policies, but also the very policy-making process. Lula's Fome Zero strategy takes a comprehensive approach to reducing hunger in Brazil. Fome Zero is an umbrella framework that includes programs aimed at increasing access to food, strengthening family agriculture, fostering income generating activities, and supporting partnership promotion and civil society mobilization.This brief presents an analysis of the Fome Zero policy targeting family agriculture, the Food Purchase Program (Programa de Aquisicao de Alimentos, "PAA"). In Brazil 30% of rural enterprises are family farms. They produce 38% of the agricultural value and employ over 70% of rural workers (Rocha, 2009: 58). On the other hand, in 2003 rural poverty was as high as 41%. Accordingly, PAA seeks to tackle rural poverty and food insecurity by guaranteeing demand in local markets for small producers through local government purchases of agricultural products. The first section of this brief presents the context in which PAA was conceived, followed by a summary of the implementation process. The following section presents an evaluation of the policy results. Finally, the analysis concludes with lessons learned and proposed changes.As previously mentioned, the PT election can be seen as the catalyst that propitiated the introduction of PAA. However, the formulation of social policies in Brazil started after the collapse of the military dictatorship in 1985. The 1988 Brazilian Constitution set in motion the decentralization process that empowered municipalities. Then, the government of Fernando Henrique Cardoso (FHC) focused on strengthening democratic institutions and economic growth. In addition, in the early 1990s municipalities across different states devised conditional cash transfer (CCT) schemes that benefited the poor. Moreover, during the FHC administration (1995-2002) the federal government launched CCTs at the national level (Bolsa Escola and Bolsa Alimentacao).The PT created a positive environment that enabled the formulation of Fome Zero, with elements that legitimized such social policies as PAA. First, with the transition to democracy social protection policies began to be seen as investments to further development and not as drainage of public resources. Second, the provision of social services had experienced a switch from a universalist model to one that prioritizes targeting vulnerable populations, i.e. CCTs. The third factor was the current economic growth, since the government would not have been able to establish redistributive programs without it. The fourth element was the country's poor social indicators. Despite experiencing growth, Brazil had high social exclusion and inequality because the rapid economic development was elusive to the poor. Finally, the fifth source of legitimacy was the PT election. Lula based his presidential campaign on a discourse of inclusive growth. He promised to eradicate poverty and to redistribute wealth in the country, while reaffirming his commitment to continue with the orthodox liberal monetary policies introduced in previous administrations.Rural poverty and food insecurity were the problems that drove the creation of the PAA policy. The PT designed the framework to address these issues through Fome Zero and the National Food and Nutritional Security Policy ("PNSAN"). However, it deliberately democratized and decentralized the policy debate. In a nutshell, Fome Zero is the articulation of a web of social protection policies and ministries and agencies and its, and PAA's, success relied on creating partnerships with key stakeholders (local governments, businesses and civil society organizations). The federal government created the Social Development Ministry ("MDS") to manage Fome Zero and its subsidiary policies. During the policy formulation process, the MDS organized meetings, workshops and symposia with a multiplicity of stakeholders. These encounters granted non-governmental organizations the possibility to exert influence in the policy process. Social movements also played a key role in the formulation of the National Law for Food and Nutrition Security ("LOSAN"). Furthermore, this law granted civil society participation through the newly created National Council for Food and Nutrition Security ("CONSEA"), which is present at the national, regional and local levels.It was important that the new policy aimed at reducing rural poverty avoid compromising the pro-export production model that had transformed Brazil into one of the world's largest food exporters. Policy-makers considered several traditional options, three of which were discarded for various reasons. An extensive agrarian reform redistributing land to the landless and small farmers would have reduced food outputs. A second alternative, to take no action, would assume that market forces would provide opportunities for poor peasants. The third scenario was to formulate several policies, scattered across different ministries without coordination. The selected policy option implemented by the PT followed a multi-sectoral approach. It sought to increase poor families' income through CCTs, (Bolsa Familia), aimed at feeding the vulnerable population via school meals, community kitchens and popular restaurants, and at strengthening family agriculture through credit and food purchase via PRONAF and PAA. Ultimately, this integral overarching policy focuses on guaranteeing food availability, improving food access and increasing food supply.Successful implementation of such a policy demanded a new policy model that articulates the different dimensions of the policy, while also facilitating the participation of multiple stakeholders. In short, CONSEA, MDS and the Inter-Ministerial Chamber on Food and Nutritional Security ("CAISAN") established the policy system. In such policy system, the national, state and municipal executive powers have the ability to adapt the policy to their local context. The system is crafted after receiving feedback from within the political structure, as well as from the civil society. The following diagram illustrates how the food security policy process works.Created by Law 10.969 in 2003, PAA is administered by MDS and the Ministry of Agricultural Development ("MDA"). PAA guidelines are defined by the Grupo Gestor ("Managing Group"), which is comprised of six ministries: MDS; MDA; Economy; Planning and Budgeting; Agriculture; and Education. The execution has two stages; first, at the national level in partnership with the National Supply Agency (CONAB), and second, decentralized execution involving the participation of state and municipal governments. These latter partnerships are crucial for PAA because the MDS and MDA budget are directed exclusively towards agricultural products procurement, while it is the local governments who ensure the system is operable to allow for the purchases.PAA includes four programs: Purchase for Immediate Donation, Incentives for Milk Consumption and Production, Direct Purchase and Stock Formation. The first two programs aim at buying produce and milk to redistribute among the vulnerable population. Between 2003 and 2010 they represented 39% and 37% of PAA budget, respectively. The objectives of Direct Purchase and Stock formation are to facilitate resources for the promotion of public and individual's stock formation that can guarantee food availability and fair prices for family farmers.PAA intends to benefit two groups of people: food producers and food consumers. The food producers are family farmers including fish farmers, fishermen, extractors, indigenous farmers, quilombolaand family farmers settled during the land reform. The food consumers group comprises people and families under social vulnerability, with imminent risk of nutritional and food insecurity, people assisted by national food and nutrition security programs, and children in public schools.The follow paragraph summarizes the main policy outputs. By the end of 2011 the program had reached over 204,000 small farmers, which is only 3.28% of the rural farmer population. PAA's target for 2013 is to buy products from 445,000 farmers. PAA is present in 2,300 municipalities across the country and targets the country's poorest regions. For instance, the Northeastern region receives 50% of PAA budget. In terms of resources, the MDS and MDA budget has risen from $52 million in 2003 to $585 million in 2013. In terms of food production, food purchases more than tripled between 2003 and 2010, from 135,800 to 426,400 tons. On average, PAA serves 25,000 institutions that feed over 15 million people.PAA has produced both intended and unintended outcomes. First, the program has increased rural farmers' income through food purchases. Now, local farmers produce and sell to local schools and hospitals. Moreover, PAA pays an extra 30% above the regular price for organic products, boosting local economies as a result. Second, producers not covered by PAA are indirect beneficiaries because they also enjoy higher local prices. Third, food stocks have also helped control price fluctuations. Fourth, there is greater diversity of products since PPA purchases more than 330 different items. Fifth, PAA has played an important role in the strengthening of associations and cooperatives. It also provides the stimulus to establish small agro-industries so that associations can process and add value to their production output.Two unintended outcomes attributable to PAA are an increase in price for some staple foods and the expansion of neo-patrimonial institutions, such as political corruption, patronage and clientelism at the local level. Thus, we can assume that the policy "winners" are MDS, CONAB, CONSEA, civil society organizations, farmers, vulnerable population benefited by PAA, local level authorities and local institutions (i.e. schools). On the other hand, three policy "losers" are those corporations in charge of selling food products to the government, farmers who cannot meet the PAA criteria, and low- and middle-income urban populations who must pay higher prices. Although negatively impacted by PAA, these groups do not threaten the viability of the policy. Corporations and big businesses still sell food products to the government because PAA cannot meet the food demand. Despite the fact that they cannot sell to PAA, farmers have a suitable environment that provides easy access to credit and encourages production. Finally, even though prices increased, so did the salaries of the middle-income population.PAA is an innovative policy because of its participatory model during the formulation process, which allows it to enjoy support from its beneficiaries and civil society organizations. Also, PAA's administration is notable since, given its multi-sectoral approach, six different ministries form the managing unit. Finally, the regular control and oversight done by social movements and the impending need to improve coordination among ministries make policy evaluation a necessary priority for PAA's success.In a short amount of time, PAA has already undergone three evaluation rounds (2005, 2008 and 2010). Each evaluation improves the policy and guarantees more popular support. For instance, after the last evaluation the government enacted Law 12.512/2011 and Decree 7.775/2012, which aims at facilitating coordination among the implementing bodies. It also raised the maximum farmer benefits from $1,250 in 2003, to $2,400 in 2006, to $4,100 in 2012. In addition, it encourages organic production by paying 30% above regular price. More importantly, the last policy redesign includes a gender component by establishing that at least 5% of PAA purchases must come from women's associations. Finally, it guarantees a quota of 30% of institutional purchases (schools and hospitals, among others) for small farmers.However, despite the iterative evaluation and redesign process, there is still room for improvement in the policy. Most importantly, PAA does not reach the poorest of the poor. Although the registration process is very efficient because it is based on another social program (PRONAF), the poorest farmers lack land titles, thus cannot be part of PRONAF or PAA. The policy could be improved with provisions enabling the inclusion of this group.PAA is helping with the national goals of poverty alleviation, however redefining its goals and incorporating strategic planning in rural development could improve PAA. More specifically, PAA should reconsider its strategy towards associativism and cooperativism. The policy could enhance further rural development by supporting associations and cooperatives in becoming artisanal industries that add value to their products.In conclusion, PAA intends to solve a social problem by addressing both the supply and demand sides. On one hand, PPA's objective is to eliminate hunger by guaranteeing food availability, improving food access and increasing food supply. On the other hand, PAA reduces rural poverty by providing opportunities to small farmers with market access and better prices. The policy has demonstrated positive results and has been constantly improved through iterative evaluations. With further strategic planning on how to help associations becoming the leaders of rural development the policy could achieve optimal positive impact.Sobre el autorMA International DevelopmentSchool of International ServiceAmerican UniversityLicenciado en Estudios InternacionalesUniversidad ORT - Uruguay
학위논문(석사)--서울대학교 대학원 :국제대학원 국제학과(국제통상전공),2019. 8. 김종섭. ; 본 연구의 목적은 글로벌 가치사슬 (global value chain, GVC), 혹은 여러 국가에 걸친 생산 단계의 분화 과정에 참여하여 특정 형태의 중간재 무역이 증가할 때, 숙련도가 다른 한국 노동자들의 임금에 차별적인 영향이 발생하는 가의 여부를 실증적 분석을 통해 검증하는 것이다. 최근 여러 개발도상국과 선진국에서 국가 내 불평등이 심화되는 현상이 관측되고 있으며, 이는 학계 및 정책입안자들 뿐만 아니라 일반인들의 주요 관심 대상이 되었다. 불평등이 정치적 안정성과 사회 통합에 영향을 미친다는 사실은 오랜 시간 인지되었다. 많은 국가 내에서 포퓰리즘과 시위가 늘어나는 등 정치적 갈등이 심화되고 있으며, 세계에서 경제 규모로 각각 1, 2위를 차지하는 미국과 중국 간의 무역 분쟁으로 현실화된 보호무역주의의 재등장은 오늘날 세계화와 불평등 사이의 상관 관계가 정치적으로 더욱 심각한 의의를 가진다는 것을 보여준다. 그러나 국제 생산 네트워크는 여러 국경을 넘나드는 글로벌 공급망 무역을 통해 촘촘하게 이어지는데, 이러한 글로벌 밸류 체인이 확산된 오늘날에는 관세, 쿼터, 그리고 기타 수입·수출 규제와 같은 비관세장벽의 비용이 더욱 높아졌다. 다시 말해 GVC 시대에서는 각 생산 단계를 거치며 수입 중간재가 국경을 여러 번 넘나들면서 관세의 비용이 누적·증폭되며, 전통적으로 내수형으로 여겨지는 농업과 서비스 같은 산업에 속한 생산과 고용 역시 해외 시장에 의존하는 경향이 커지는데, 이는 내수형 산업들조차 직접적으로 수출되는 제조업품 속의 부가가치로 체화되어 간접적으로 부가가치를 수출하기 때문이다. 따라서 과거 시대에 비해 무역 장벽은 고용과 임금에 더욱 부정적인 영향을 미칠 수 있을 뿐만 아니라, 양자간 무역의 직접적인 당사자 뿐만 아니라 간접적으로 국제 공급 사슬 무역에 참여하는 수많은 관련 국가와 산업들 모두에게 영향을 미칠 수 있다. 따라서 현대 사회에서 보호무역의 비용이 유래없이 높아진 만큼, 과연 그러한 정책의 밑바탕이 된 불평등 문제가 정말 무역에서 비롯된 것인지 정밀하게 연구하는 것은 아주 중요한 문제라고 할 수 있다. 1980년대와 90년대 초반까지 주류 경제학자들의 전반적인 의견은 무역이 불평등에 미친 영향이 미미했으며, 고숙련·저숙련 노동자들의 임금 격차가 벌어진 데에는 숙련 편향적 기술 진보와 같은 다른 요인들이 훨씬 중대한 효과를 미쳤다는 것이었다. 그럼에도 불구하고 세계화와 불평등의 관계에 대한 정책 입안자들과 일부 학계의 염려는 계속되어 왔으며, 특히 해외 아웃소싱 혹은 오프쇼어링과 임금 불평등의 관계에 대한 최근의 경험적 연구들은 여러 상반되는 결과들을 도출하였다. 한편, 글로벌 밸류 체인과 생산의 파편화가 확산된 상황에서는 무역의 잠재적인 숙련 편향적 효과를 새로운 GVC와 부가가치 무역 지수들로 연구하는 것이 중요하다. 이는 리카르도나 애덤 스미스 시대처럼 수출 속 부가가치가 거의 100% 국내에서 생산되는 것이 아니라 해외에서 수입한 중간재 혹은 다른 투입 요소가 차지하는 해외창출 부가가치 비중이 매우 커졌기 때문이다. GVC참여가 노동시장의 소득 재분배에 미치는 영향에 대한 최신의 경험적 연구들 역시 서로 상충되는 결과들을 내놓은 점에서, 더욱 정교한 방법론으로 다듬어진 실증 분석의 필요성이 제기된다. 특히 국제 공급 사슬 무역 속에 체화된 기술과 노동은 전통적 무역 이상으로 산업 고도화나 추가적인 노동 수요와 공급의 이동을 유발할 수 있기 때문에, 같은 GVC무역이라도 산업 혹은 국가에 따라 다른 영향을 미칠 수가 있다. 글로벌 가치 사슬에 가장 활발하게 참여하는 국가 중 하나인 한국의 사례가 중요한 또다른 이유는, 많은 경제학자들이 대학교와 같은 고등 교육에 투자를 해서 고숙련 노동의 비중을 높이는 것이 고숙련·저숙련 노동자 간의 임금 불평등을 해소할 수 있는 효과적 방안으로 제시하고 있고, OECD에서 가장 높은 비율의 고숙련 노동자를 보유하고 있는 한국의 경우 대학 교육 이수자의 지속적인 증가가 있었음에도 불구하고 임금 불평등이 해소되기는커녕 심화되었다는 점이다. 따라서 GVC와 임금 불평등의 구조를 연구하는 것은 GVC참여를 통해서 한국과 비슷한 방식으로 산업들의 기술 구조를 고도화하고자 하는 개발도상국들에게 좋은 참고가 될 수 있을 것이다. 한국의 예는 또한 선진국들에게도 중요한 의의를 가질 수 있다. 한국은 선진국 중에서 특이하게도 강건한 제조업 기반을 유지하고 있으며 반면에 서비스 산업이 상대적으로 낮은 비중을 차지하고 있다. 이런 산업 구조를 가지고 있음에도 GVC참여가 숙련 편향적인 효과를 보인다면, 최근 미국과 같은 선진국들이 보호무역을 통해 억지로 자국으로 (점점 낮은 부가가치를 차지하는) 생산·조립 단계 공정을 되돌리려는 "리쇼어링"을 유도하더라도 그들이 원하는 불평등의 개선 효과가 없을 수도 있다는 점을 함의한다. 산업 구조, 국가의 위치와 규모 등 수많은 요인에 따라 GVC참여가 노동 시장에 미치는 영향이 상이할 수 있는 바, 본 연구는 최근 축적된 국제 생산 분업에 대한 전반적인 선행 연구 분석과 함께 한국의 오프쇼어링, GVC관련 무역, 해외직접투자, 그리고 개발 및 산업 고도화 등의 다방면적인 질적 특성을 살펴봄으로써 이질적인 여러 종류의 GVC참여 방식이 국내 노동자들의 숙련도에 따라 임금에 어떤 상이한 영향을 미칠 수 있는지에 대한 가설을 설정한다. 본격적인 양적 회귀분석에 앞서 질적인 분석을 겸하는 이유는 GVC 무역 내에 체화된 업무와 숙련도를 알아야 노동 시장에 미치는 영향을 보다 정확히 파악할 수 있는 상황 속에서, 현재의 부가가치기준 무역 데이터조차 가치사슬 내의 정확한 산업 고도화 방향과 직무의 구성을 알기 어렵기 때문이다. 연구 가설들을 검정하기 위해 먼저 한국고용노동패널데이터 (KLIPS)에서 추출한 7,689명의 개인과 총 31,974개의 관측치로 이루어진 표본을 구성한 후 2018년 발표된 가장 최신 형태의 경제협력개발기구 (OECD) – 세계무역기구 (WTO) 부가가치 기준 무역 (TiVA) 지표들을 병합한다. 이 실증 분석 모형은 2005년부터 2015년까지 64개국간의 부가가치 무역을 추정하는 TiVA의 36개 산업 수준 지표들을 2009년부터 2017년까지의 개인 수준의 한국 노동자 데이터와 연결한다. 교육 수준으로 측정된 노동의 숙련 수준을 각 노동자가 속한 산업의 세 종류의 GVC 참여 지수 (총 참여율, 전방 참여도, 후방 참여도)와 함께 교차항에 넣어 상호 작용 효과 존재 여부를 살펴본다. 실증 분석을 위해 우선 변형된 Mincer 형태의 임금 모형에 종속변수인 각 개인 수준의 임금과 핵심 독립 변수인 노동 숙련도와 GVC참여율로 구성된 교차항과 함께 다양한 통제 변수와 고정 효과를 넣은 후, 패널 회귀분석을 실시한다. 이처럼 산업 수준 GVC 무역 지표를 개인 수준 임금 데이터와 통합시키는 방법론은 산업 수준 GVC 교역 지수를 산업 수준 임금 데이터와 연결 지은 기존 선행 연구에 비해서 동시적 인과관계로 인해 발생할 수 있는 내생성 편의 문제를 어느 정도 통제할 수 있다는 점에서 상당한 이점을 가진다. 실증 분석 결과 전반적으로 산업 수준에서의 GVC참여가 여러 숙련도로 나뉜 개인 노동자 수준의 임금에 유의미한 차등적인 효과를 보이는 것으로 나타났다. 우선 교차항을 고려하지 않았을 때 전방, 후방 및 총 GVC참여율 모두 다른 변수들을 통제했을 때에도 통계적으로 매우 유의미하게 임금을 높이는 것으로 보였다. 하지만 이와 동시에 GVC참여는 고숙련 노동자들에게 상대적으로 더욱 큰 긍정적 임금 효과를 주는 숙련 편향적 효과가 있는 것으로 나타났다. 여러 종류의 GVC참여 중에서도 전방 참여가 가장 큰 숙련 편향성을 나타내는 것을 드러냄으로써, 본 연구는 GVC참여의 종류를 구분하는 것이 매우 중요하다는 점을 확인하였다. 이는 한국의 노동 시장에 대한 선행 연구들이 거의 다루지 않은 부분일 뿐만 아니라, 최근에 세계 단위로 분석한 연구와 정 반대의 결과를 보여주기 때문에 기존 연구에 상당 부분 기여한다고 할 수 있다. 본 논문의 결과는 또한 동일한 형태의 GVC무역도 국가의 개별적 특성에 따라 체화된 숙련수준과 생산활동의 구성비에 따라 노동시장에 미치는 영향이 다를 수 있다는 점을 시사한다. 한편, 결과의 강건성 검증을 위해 다른 형태의 통제 변수와 모형, 그리고 대안적인 핵심 설명 변수로 시간 래그 변수와 총수출액 대비 부가가치 수출액의 비율(VAX Ratio)을 사용했을 때에도 전반적인 회귀 분석 결과는 유사하게 나오는 것으로 확인하였다. 본 연구는 한국의 경우 글로벌 공급 사슬 무역에 참여하는 것이 적어도 미시적인 수준에서 노동 시장에 숙련 편향적인 효과를 가져온다는 것을 밝히면서도, 동시에 모든 종류의 GVC참여가 노동자들의 전반적인 임금 수준에 긍정적인 영향을 미친다는 점을 보여줌으로써, 최근 불평등을 해소하는 정책으로 확산되는 보호무역주의는 최적의 해결책이 아니라는 경제학의 관점을 경험적 분석을 통해 확인하였다. 본 논문에서 무역과 노동 경제학이 가장 많은 부분을 차지하지만, GVC와 관련된 연구가 여러 학제간 교류가 활발한 간학문적인 분야라는 점과 최근의 무역 전쟁 및 불평등 문제가 정책적으로도 중대한 사안인만큼, 본 연구에 포함된 여러가지 이론 및 실증 분석의 결과들은 정치학, 국제관계학, 정치경제학, 사회학, 교육학, 행정학, 그리고 경영학과 같은 다양한 분야의 연구자들에게 유용한 결과를 제시한다. ; The main objective of this study is to elucidate how exposure to globalization in the form of participation in global value chains (GVCs), or the fragmentation of different stages of production across national and regional borders, has affected the wages of workers with different skill levels in the labor market of South Korea. The rise of income inequality within many developed and developing countries has once again captured the interest of academia, the public, and politicians. It has long been known that inequality affects political stability and social cohesion. Nowadays, political tensions run high in many nations, and as can be seen from various social phenomena such as the rise of populism, civil protests, and protectionism in the form of an ongoing trade war between the world's two largest economies, the U.S. and China, the potential relationship between globalization and inequality continues to have ever more serious political implications. However, the costs of trade barriers such as tariffs, quotas, and other non-tariff barriers such as import or export restrictions are now higher than ever, due to the importance of cross-border supply chain trade that links international production networks. In an era of GVCs, tariffs are escalated because inputs must cross borders multiple times, while production and employment in many seemingly domestic-oriented industries such as agriculture and services actually depend on foreign markets, because their value-added is indirectly embodied as inputs in manufactured exports. Thus, trade restrictions may lead to significantly greater negative impacts on wages and employment than in previous eras. Moreover, barriers aimed bilaterally at one country can affect numerous other countries that participate in production sharing. In light of the high costs of protectionism in the contemporary world, an examination of whether trade actually has adverse distributional effects is crucial. Until the 1980s and early 90s, the consensus of neoclassical economists was that trade only had a minor impact on inequality while skill-biased technical or technological change and other factors were far more important drivers of divergences in the income of high and low skilled workers. Nevertheless, public suspicion and concern over the relationship has been unabated, and more recent literature on the relationship between offshoring and income inequality has shown conflicting results. At the same time, the expansion of global value chains and fragmentation of production increases the importance of studying the potential effects of a skill bias in trade with new GVC and value added trade indicators, since nowadays foreign intermediate goods and services are significantly embodied in the final product exports of a country, unlike the age of David Ricardo or Adam Smith, when exports were only domestically produced. Empirical findings regarding the relation between GVC participation and its distributional impacts on labor have been mixed, furthering the case for continued empirical investigation. The case of Korea, one of the most heavily integrated developed countries in GVCs, is also important because many economists have suggested that more investment in the tertiary education of unskilled workers can alleviate income inequality, but Korea has been experiencing a rise in inequality in spite of having the largest proportion of high skilled workers among OECD countries when following ISCED classifications. As such, a careful examination of how GVCs affect wage inequality can provide useful insights for developing countries that want to consistently upgrade their industries akin to the path that Korea has followed. Likewise, Korea's case has important implications for developed nations: Korea is an outlier among developed nations because it has a remarkably robust manufacturing sector as compared to services, yet, the existence of a skill bias of global supply chain trade in spite of this may imply that current high income economies tempted to engage in protectionism to "re-shore" overseas production back into national borders (such as the U.S.) might not achieve the distributional results they intended. The lower value-added assembly stages of manufacturing coming back would not necessarily contribute to reducing inequality in the home country. A careful examination of the literature on the labor market impacts of international production sharing, as well as the qualitative characteristics of Korea's offshoring, GVC-related trade, foreign direct investment, and development - industrial upgrading trajectory are factored into the formulation of several hypotheses on how heterogeneous types of GVC participation might impact workers of different skills in Korea. This is to complement the limitations of value added trade data in showing the composition of business functions as well as direction of industrial upgrading, as finding the specific mix of tasks and skills embodied in GVC trade is crucial to understanding labor market impacts. To test these hypotheses, a panel data set consisting of 7,689 individuals and 31,974 individual-year observations is constructed by merging and matching data from the Korea Labor Income Panel Survey (KLIPS) with the updated 2018 version of the Organisation for Economic Co-operation and Development (OECD) – World Trade Organization (WTO) Trade in Value Added (TiVA) indicators, which are derived from the Inter-Country Input-Output (ICIO) database. This empirical model links the 36 industry-level indicators of TiVA, which covers 64 economies for 2005-2015, with the micro-individual level data of Korean workers from 2009-2017. The skill level of labor, measured in terms of educational attainment, is interacted with three different types of GVC participation indices (total, forward, and backward) of the respective industries in which the workers are employed each year. The wages of each individual worker, the dependent variable, are regressed on this product term of skills and GVC participation, using a variation of the Mincerian human capital wage equation along with various controls and fixed effects appropriate for this multi-dimensional panel data analysis. This approach of investigating the relationship between industry-level cross-border production sharing indicators on individual-level variables has a significant methodological advantage compared to many earlier studies using industry-level wage variables. Combining the two different levels can mitigate endogeneity concerns that may arise due to simultaneity bias. Overall, the findings of this study show that differences in GVC integration at the industry level indeed have heterogeneous effects on wages of individual workers classified in different skill groups. While all three types of GVC participation have positive effects on wages when controlling for other variables, the direction and magnitude of coefficients for each group of workers suggests the existence of a "skill-bias," in which increased GVC participation has a relatively favorable impact toward higher skilled employees as opposed to low or mid-skilled workers. This skill bias is strongest for forward participation, which underlines the importance of distinguishing between different types of GVC participation, a factor which was neglected in previous empirical studies combining sector-level GVC indicators with individual-level labor data. The fact that these results directly contrast with a recent cross-country study that found skill-biased effects for backward GVC trade rather than forward supply chain linkages, suggests that the country-specific business functions, skills, and tasks embodied within intermediate inputs trade affect the causal relationship between both types of GVC participation and labor market impacts, in line with this dissertation's analysis of Korea's specific position in GVC trade and development trajectory. Moreover, robustness checks show that the results are generally stable when estimated with complementary or alternative specifications of variables and models, including time lags and the Value Added Exports (VAX) ratio. At the same time, although there is a skill bias of global supply chain trade, this research shows that overall wages of workers are positively affected through all types of GVC trade, hence leading to the suggestion that the current protectionist sentiment spreading in the global economy is not the optimal answer to deal with inequality. Although the study mostly draws insights from and fills in the gap in contemporary international trade literature and labor economics, the multi-disciplinary relevance of the findings with respect to global value chains and within-country income inequality should be of interest to scholars and policymakers of many fields, including political science, international relations, political economy, sociology, educational studies, public policy, and business management among others. ; Abstract i Table of Contents v List of Tables and Figures vii I. Introduction 1 1. Background and Research Motivation 1 2. Overview of the Study 12 II. Literature, Theoretical Framework and Hypotheses 17 1. Literature Review 17 1.1. Global Value Chains (GVCs) 17 1.1.1 Concept, History and Terminology 22 1.1.2 GVCs and Value Added Trade Data 33 1.1.3 Importance of Trade in Value Added 42 1.1.4 The Role of Services 44 1.2. Labor Market Impacts of Trade and Offshoring 46 1.2.1 Benefits of Trade 51 1.2.2 Traditional Trade and Inequality 53 1.2.3 Trade in Tasks and Wage Effects 59 1.3 Traditional Proxy Measures of Offshoring Trade 64 1.3.1 Broad and Narrow Offshoring 64 1.4. Second Generation Offshoring Statistics 68 1.4.1 Vertical Specialization 70 1.4.2 VAX Ratio 73 1.5. The GVC Participation Index 76 1.5.1 Backward Participation (Foreign VA in Gross Exports) 78 1.5.2 Forward Participation (Domestic VA in Exports to third countries) 79 1.5.3 Total GVC Participation 79 1.5.4 Data Limitation: Absence of Business Functions and Tasks 81 1.6 Additional Labor Market Impacts of GVC Participation 83 1.6.1 The Smile Curve and Industrial Upgrading 85 1.6.2 Higher growth, development and productivity 93 1.6.3 Empirical Analyses on GVCs and Employment 96 1.6.4 Cross-country Analyses on GVCs and Wages 97 1.7 Korea and Global Value Chains 101 1.7.1 Korea's Prominent Role in GVC Trade 101 1.7.2 Factors underlying Korea's GVC participation 114 1.7.3 Korea's Export-Led Growth and Industrial Upgrading Path 116 1.7.4 Shifting to Higher Value Added Activities and Offshoring Assembly 122 1.7.5 Empirical Literature on the Labor Market Impacts of Globalization in Korea 128 2. Hypotheses Formulation 144 2.1. Model Predictions 144 2.2. Summary of Hypotheses 153 III. Data and Empirical Methodology 155 1. Data Sources and Sample 155 1.1. OECD-WTO Trade in Value Added (TiVA) Indicators 155 1.2. Korea Labor Income Panel Survey (KLIPS) 158 2. Econometric Analysis 161 2.1. Baseline Panel Regression Wage Equation Model 161 3. Variable Construction 163 3.1. Constructing Variables from KLIPS 163 3.2. Skills and Educational Attainment Variables 166 3.3. Constructing GVC Trade Variables from OECD TiVA 170 3.4. Alternative GVC Measures for Robustness Checks 172 3.5. Matching GVC Industries with KLIPS 174 IV. Results and Interpretation 177 1. Main Specification 177 1.1. Total GVC Participation 180 1.2. Forward GVC Participation 187 1.3. Backward GVC Participation 192 2. Further Robustness Checks 195 2.1. International ISCED Definition of Skills 196 2.2. Robustness to Endogeneity and Simultaneous Equation Bias 198 2.3. Individual Fixed Effects 199 2.4. Alternative Specifications: Time-Lagged GVC Trade Variables 202 2.5. Alternative Specifications: Value Added Export (VAX) Ratio 208 V. Conclusion 218 1. Contribution to Economics Literature 218 2. Contribution to Policy-Making and Other Academic Fields 222 3. Limitations and Suggestions for Future Research 223 List of References (Bibliography) 228 국문 초록 (Abstract in Korean) 260 ; Master
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My first post described a few anecdotes about what a warm person Bob Lucas was, and such a great colleague. Here I describe a little bit of his intellectual influence, in a form that is I hope accessible to average people.The "rational expectations" revolution that brought down Keynesianism in the 1970s was really much larger than that. It was really the "general equilibrium" revolution. Macroeconomics until 1970 was sharply different from regular microeconomics. Economics is all about "models," complete toy economies that we construct via equations and in computer programs. You can't keep track of everything in even the most beautiful prose. Microeconomic models, and "general equilibrium" as that term was used at the time, wrote down how people behave — how they decide what to buy, how hard to work, whether to save, etc.. Then it similarly described how companies behave and how government behaves. Set this in motion and see where it all settles down; what prices and quantities result. But for macroeconomic issues, this approach was sterile. I took a lot of general equilibrium classes as a PhD student — Berkeley, home of Gerard Debreu was strong in the field. But it was devoted to proving the existence of equilibrium with more and more general assumptions, and never got around to calculating that equilibrium and what it might say about recessions and government policies. Macroeconomics, exemplified by the ISLM tradition, inhabited a different planet. One wrote down equations for quantities rather than people, for example that "consumption" depended on "income," and investment on interest rates. Most importantly, macroeconomics treated each year as a completely separate economy. Today's consumption depended on today's income, having nothing to do with whether people expected the future to look better or worse. Economists recognized this weakness, and a vast and now thankfully forgotten literature tried fruitlessly to find "micro foundations" for Keynesian economics. But building foundations under an existing castle doesn't work. The foundations want a different castle. Bob's "islands" paper is famous, yes, for a complete model of how unexpected money might move output in the short run and not just raise inflation. But you can do that with a half a page of simple math, and Bob's paper is hard to read. It's deeper contribution, and the reason for that difficulty, is that Bob wrote out a complete "general equilibrium" model. People, companies and government each follow described rules of behavior. Those rules are derived as being the optimal thing for people and companies to do given their environment. And they are forward-looking. People think about how to make their whole lives as pleasant as possible, companies to maximize the present value of profits. Prices adjust so supply = demand. Bob said, by example, that we should do macroeconomics by writing down general equilibrium models. General equilibrium had also been abandoned by the presumption that it only studies perfect economies. Macroeconomics is really about studying how things go wrong, how "frictions" in the economy, such as the "sticky" wages underlying Keynesian thinking, can produce undesirable and unnecessary recessions. But here too, Bob requires us to write down the frictions explicitly. In his model, people don't see the aggregate price level right away, and do the best they can with local information. That is the real influence of the paper and Bob's real influence in the profession. (Current macroeconomic modeling reflects the fact that the Fed sets interest rates, and does not control the money supply.) You can see this influence in Tom Sargent's textbooks. The first textbook has an extensive treatment of Keynesian economics. It's about the most comprehensible treatment there is — but it is no insult to Tom to say that in that book you can see how Keynesian economics really doesn't hang together. Tom describes how, the minute he learned from Bob how to to general equilibrium, everything changed instantly. Rational expectations was, like any other advance, a group effort. But what made Bob the leader was that he showed the rest how to do general equilibrium. This is the heart of my characterization that Bob is the most important macroeconomist of the 20th century. Yes, Keynes and Friedman had more policy impact, and Friedman's advocacy of free markets in microeconomic affairs is the most consequential piece of 20th century economics. But within macroeconomics, there is before Lucas and after Lucas. Everyone today does economics the Lucas way. Even the most new-Keynesian article follows the Lucas rules of how to do economics. Once you see models founded on complete descriptions of people, businesses, government, and frictions, you can see the gaping holes in standard ISLM models. This is some of his stinging critique, such as "after Keynesian macroeconomics." Sure, if people's income goes up they are likely to consume more, as the Keynesians posited. But interest rates, wages, and expectations of the future also affect consumption, which Keynesians leave out. "Cross equations restrictions" and "budget constraints" are missing. Now, the substantive prediction that monetary policy can only move the real economy via unexpected money supply growth did not bear out, and both subsequent real business cycles and new-Keynesianism brought persistent responses. But the how we do macroeconomics part is the enduring contribution. The paper still had enduring practical lessons. Lucas, together with Friedman and Phelps brought down the Phillips curve. This curve, relating inflation to unemployment, had been (and sadly, remains) at the center of macroeconomics. It is a statistical correlation, but like many correlations people got enthused with it and started reading it as stable relationship, and indeed a causal one. Raise inflation and you can have less unemployment. Raise unemployment in order to lower inflation. The Fed still thinks about it in that causal way. But Lucas, Friedman, and Phelps bring a basic theory to it, and thereby realize it is just a correlation, which will vanish if you push on it. Rich guys wear Rolexes. That doesn't mean that giving everyone a Rolex will have a huge "multiplier" effect and make us all rich. This is the essence of the "Lucas critique" which is a second big contribution that lay readers can easily comprehend. If you push on correlations they will vanish. Macroeconomics was dedicated to the idea that policy makers can fool people. Monetary policy might try to boost output in a recession with a surprise bit of money growth. That will wok once or twice. But like the boy who cried wolf, people will catch on, come to expect higher money growth in recessions and the trick won't work anymore. Bob showed here that all the "behavioral" relations of Keynesian models will fall apart if you exploit them for policy, or push on them, though they may well hold as robust correlations in the data. The "consumption function" is the next great example. Keynesians noticed that when income rises people consume more, so write a consumption function relating consumption to income. But, following Friedman's great work on consumption, we know that correlation isn't always true in the data. The relation between consumption and income is different across countries (about one for one) than it is over time (less than one for one). And we understand that with Friedman's theory: People, trying to do their best over their whole lives don't follow mechanical rules. If they know income will fall in the future, they consume a lot less today, no matter what today's current income. Lucas showed that people who behave this sensible way will follow a Keynesian consumption function, given the properties of income overt the business cycle. You will see a Keynesian consumption function. Econometric estimates and tests will verify a Keynesian consumption function. Yet if you use the model to change policies, the consumption function will evaporate. This paper is devastating. Large scale Keynesian models had already been constructed, and used for forecasting and policy simulation. It's natural. The model says, given a set of policies (money supply, interest rates, taxes, spending) and other shocks, here is where the economy goes. Well, then, try different policies and find ones that lead to better outcomes. Bob shows the models are totally useless for that effort. If the policy changes, the model will change. Bob also showed that this was happening in real time. Supposedly stable parameters drifted around. (This one is also very simple mathematically. You can see the point instantly. Bob always uses the minimum math necessary. If other papers are harder, that's by necessity not bravado.) This devastation is sad in a way. Economics moved to analyzing policies in much simpler, more theoretically grounded, but less realistic models. Washington policy analysis sort of gave up. The big models lumber on, the Fred's FRBUS for example, but nobody takes the policy predictions that seriously. And they don't even forecast very well. For example, in the 2008 stimulus, the CEA was reduced to assuming a back of the envelope 1.5 multiplier, this 40 years after the first large scale policy models were constructed. Bob always praised the effort of the last generation of Keynesians to write explicit quantitative models, to fit them to data, and to make numerical predictions of various policies. He hoped to improve that effort. It didn't work out that way, but not by intention. This affair explains a lot of why economists flocked to the general equilibrium camp. Behavioral relationships, like what fraction of an extra dollar of income you consume, are not stable over time or as policy changes. But one hopes that preferences, — how impatient you are, how much you are willing to save more to get a better rate of return — and technology — how much a firm can produce with given capital and labor — do not change when policy changes. So, write models for policy evaluation at the level of preferences and technology, with people and companies at the base, not from behavioral relationships that are just correlations. Another deep change: Once you start thinking about macroeconomics as intertemporal economics — the economics that results from people who make decisions about how to consume over time, businesses make decisions about how to produce this year and next — and once you see that their expectations of what will happen next year, and what policies will be in place next year are crucial, you have to think of policy in terms of rules, and regimes, not isolated decisions. The Fed often asks economists for advice, "should we raise the funds rate?" Post Lucas macroeconomists answer that this isn't a well posed question. It's like saying "should we cry wolf?" The right question is, should we start to follow a rule, a regime, should we create an institution, that regularly and reliably raises interest rates in a situation like the current one? Decisions do not live in isolation. They create expectations and reputations. Needless to say, this fundamental reality has not soaked in to policy institutions. And that answer (which I have tried at Fed advisory meetings) leads to glazed eyes. John Taylor's rule has been making progress for 30 years trying to bridge that conceptual gap, with some success. This was, and remains, extraordinarily contentious. 50 years later, Alan Blinder's book, supposedly about policy, is really one long snark about how terrible Lucas and his followers are, and how we should go back to the Keynesian models of the 1960s. Some of that contention comes back to basic philosophy. The program applies standard microeconomics: derive people's behaviors as the best thing they can do given their circumstances. If people pick the best combination of apples and bananas when they shop, then also describe consumption today vs. tomorrow as the best they can do given interest rates. But a lot of economics doesn't like this "rational actor" assumption. It's not written in stone, but it has been extraordinarily successful. And it imposes a lot of discipline. There are a thousand arbitrary ways to be irrational. Somehow though, a large set of economists are happy to write down that people pick fruit baskets optimally, but don't apply the same rationality to decisions over time, or in how they think about the future. But "rational expectations" is really just a humility condition. It says, don't write models in which the predictions of the model are different from the expectations in the model. If you do, if your model is right, people will read the model and catch on, and the model won't work anymore. Don't assume you economist (or Fed chair) are so much less behavioral than the people in your model. Don't base policy on an attempt to fool the little peasants over and over again. It does not say that people are big super rational calculating machines. It just says that they eventually catch on. Some of the contentiousness is also understandable by career concerns. Many people had said "we should do macro seriously like general equilibrium." But it isn't easy to do. Bob had to teach himself, and get the rest of us to learn, a range of new mathematical and modeling tools to be able to write down interesting general equilibrium models. A 1970 Keynesian can live just knowing how to solve simple systems of linear equations, and run regressions. To follow Bob and the rational expectations crowd, you had to learn linear time-series statistics, dynamic programming, and general equilibrium math. Bob once described how tough the year was that it took him to learn functional analysis and dynamic programming. The models themselves consisted of a mathematically hard set of constructions. The older generation either needed to completely retool, fade away, or fight the revolution. Some good summary words: Bob's economics uses"rational expectations," or at least forward-looking and model-consistent expectations. Economics becomes "intertemporal," not "static" (one year at a time). Economics is "stochastic" as well as "dynamic," we can treat uncertainty over time, not just economies in which everyone knows the future perfectly. It applies "general equilibrium" to macroeconomics. And I've just gotten to the beginning of the 1970s. When I got to Chicago in the 1980s, there was a feeling of "well, you just missed the party." But it wasn't true. The 1980s as well were a golden age. The early rational expectations work was done, and the following real business cycles were the rage in macro. But Bob's dynamic programming, general equilibrium tool kit was on a rampage all over dynamic economics. The money workshop was one creative use of dynamic programs and interetempboral tools after another one, ranging from taxes to Thai villages (Townsend). I'll mention two. Bob's consumption model is at the foundation of modern asset pricing. Bob parachuted in, made the seminal contribution, and then left finance for other pursuits. The issue at the time was how to generalize the capital asset pricing model. Economists understood that some stocks pay higher returns than others, and that they must do so to compensate for risk. The understood that the risk is, in general terms, that the stock falls in some sense of bad times. But how to measure "bad times?" The CAPM uses the market, other models use somewhat nebulous other portfolios. Bob showed us that at least in the purest theory, that stocks must pay higher average returns if they fall when consumption falls. (Breeden also constructed a consumption model in parallel, but without this "endowment economy" aspect of Bob's) This is the purest most general theory, and all the others are (useful) specializations. My asset pricing book follows. The genius here was to turn it all around. Finance had sensibly built up from portfolio theory, like supply and demand: Given returns, what stocks do you buy, and how much to you save vs. consume? Then, markets have to clear find the stock prices, and thus returns, given which people will buy exactly the amount that's for sale and consume what is produced. That's hard. (Technically, finding the vector of prices that clears markets is hard. Yes, N equations in N unknowns, but they're nonlinear and N is big.) Bob instead imagined that consumption is fixed at each moment in time, like a desert island in which so many coconuts fall each day and you can't store them or plant them. Then, you can just read prices from people's preferences. This gives the same answer as if the consumption you assume is fixed had derived from a complex production economy. You don't have to solve for prices that equate supply and demand. Brilliantly, though prices cause consumption to individual people, consumption causes prices in aggregate. This is part of Bob's contribution to the hard business of actually computing quantitative models in the stochastic dynamic general equilibrium tradition. Bob, with Nancy Stokey also took the new tools to the theory of taxation. (Bob Barro also was a founder of this effort in the late 1980s.) You can see the opportunity: we just learned how to handle dynamic (overt time, expectations of tomorrow matter to what you do today) stochastic (but there is uncertainty about what will happen tomorrow) economics (people make explicit optimizing decisions) for macro. How about taking that same approach to taxes? The field of dynamic public finance is born. Bob and Nancy, like Barro, show that it's a good idea for governments to borrow and then repay, so as to spread the pain of taxes evenly over time. But not always. When a big crisis comes, it is useful to execute a "state contingent default." The big tension of Lucas-Stokey (and now, all) dynamic public finance: You don't want any capital taxes for the incentive effects. If you tax capital, people invest less, and you just get less capital. But once people have invested, a capital tax grabs revenue for the government with no economic distortion. Well, that is, if you can persuade them you'll never do it again. (Do you see expectations, reputations, rules, regimes, wolves in how we think of policy?) Lucas and Stoney say, do it only very rarely to balance the disincentive of a bad reputation with the need to raise revenue in once a century calamities. Bob went on, of course, to be one of the founders of modern growth theory. I always felt he deserved a second Nobel for this work. He's absolutely right. Once you look at growth, it's hard to think about anything else. The average Indian lives on $2,000 per year. The average American, $60,000. That was $15,000 in 1950. Nothing else comes close. I only work on money and inflation because that's where I think I have answers. For us mortals, good research proceeds where you think you have an answer, not necessarily from working on Big Questions. Bob brilliantly put together basic facts and theory to arrive at the current breakthrough. Once you get out of the way, growth does not come from more capital, or even more efficiency. It comes from more and better ideas. I remember being awed by his first work for cutting through the morass and assembling the facts that only look salient in retrospect. A key one: Interest rates in poor countries are not much higher than they are in rich countries. Poor countries have lots of workers, but little capital. Why isn't the return on scarce capital enormous, with interest rates in the hundreds of percent, to attract more capital to poor countries? Well, you sort of know the answer, that capital is not productive in those countries. Productivity is low, meaning those countries don't make use of better ideas on how to organize production. Ideas too are produced by economics, but, as Paul Romer crystallized, they are fundamentally different from other goods. If I produce an idea, you can use it without hurting my use of it. Yes, you might drive down the monopoly profits I gain from my intellectual property. But if you use my Pizza recipe, that's not like using my car. I can still make Pizza, where if you use my car I can't go anywhere. Thus, the usual free market presumption that we will produce enough ideas is false. (Don't jump too quickly to advocate government subsides for ideas. You have to find the right ideas, and governments aren't necessarily good at subsidizing that search.) And the presumption that intellectual property should be preserved forever is also false. Once produced it is socially optimal for everyone to use it. I won't go on. It's enough to say that Bob was as central to the creation of idea-based growth theory, which dominates today, as he was to general equilibrium macro, which also dominates today.Bob is an underrated empiricist. Bob's work on the size distribution of firms (great tweet summary by Luis Garicano) similarly starts from basic facts of the size distribution of firms and the lack of relationship between size and growth rates. It's interesting how we can go on for years with detailed econometric estimates of models that don't get basic facts right. I loved Bob's paper on money demand for the Carnegie Rochester conference series. An immense literature had tried to estimate money demand functions with dynamics, and was pretty confusing. It made a basic mistake, by looking at first differences rather than levels and thereby isolating the noise and drowning out the signal. Bob made a few plots, basically rediscovered cointegration all on his own, and made sense of it all. And don't forget the classic international comparison of inflation-output relations. Countries with volatile inflation have less Phillips curve tradeoff, just as his islands model featuring confusion between relative prices and the price level predicts. One last note to young scholars. There is a tendency today to value people by the number of papers they produce, and how quickly they rise through the ranks. Read Bob's CV. He wrote about one paper a year, starting quite late in life. But, as Aesop said, they were lions. In his Nobel prize speech, Bob also passed on that he and his Nobel-winning generation at Chicago always felt they were in some backwater, where the high prestige stuff was going on at Harvard and MIT. You never know when it might be a golden age. And the AER rejected his islands paper (as well as Akerlof's lemons). If you know it's good, revise and try again. I will miss his brilliant papers as much as his generous personality. Update: See Ivan Werning's excellent "Lucas Miracles" for an appreciation by a real theorist.
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I. IntroductionUS-China competition has been intensifying in Southeast Asia, a region of immense strategic significance given its economic heft, geostrategic location next to major sea lanes, and diplomatic convening power via the Association of Southeast Asian Nations (ASEAN). Amid this, there have been rising conversations about how Southeast Asian states are responding in this competition and the implications for Washington, Beijing, and other interested actors. For US policymakers in particular, this could have important effects on how Washington thinks about advancing key regional priorities such as diversifying supply chains and securing the first island chain extending out to the South China Sea. This policy brief explores the agency of Southeast Asian states amid US-China competition and ways interested actors can boost it. It is informed by conversations with policymakers and experts across all 11 countries in Southeast Asia, which included multiple trips across the region. The brief makes three main arguments: First, the contours of US-China competition are such that it represents one of manifold challenges for Southeast Asian states, wherein Washington and Beijing bring to bear different capabilities. Second, Southeast Asian states are already exercising agency within this competition through engagement, balancing, and shaping their environment. Third, actors (including the US and its partners) can help reinforce the agency of Southeast Asian states to advance a shared vision for a region that is free from coercion and conducive to open and fair competition. II. Contours of US-China Competition in Southeast AsiaUS-China competition is the latest in a series of phases of major power competition in Southeast Asia. Southeast Asia was under major power influence for centuries–from empires and open maritime routes linking it to China, India, the Middle East, and Europe to colonization. Southeast Asian states have also adjusted to multiple balance of power shifts over the decades. Those include the 1950s, with the advent of the Cold War in Asia; the 1970s with the US withdrawal from Vietnam, and Sino-US rapprochement; the 1990s with the Soviet Union's demise and a more engaged China and India; and the 2010s with increasing US-China competition and Washington's response (as illustrated in documents such as the 2018 National Defense Strategy). The lesson for much of Southeast Asia amid this reality is that exercising agency is essential to preserving autonomy. As former Thai foreign minister Thanat Khoman once succinctly observed, without agency, smaller countries would "become nothing but mere pawns of different size."Image CreditToday, as important as US-China competition is, it is also just one of a series of pressing priorities for Southeast Asian policymakers in their quest to manage challenges and maximize opportunities for growth and security. These include growing domestic pressures on regimes to deliver for their people; stresses on regional institutions such as ASEAN amid the proliferation of crises from Myanmar to the South China Sea, and minilateral institutions such as the Quad and AUKUS; and challenges to the rule of law, trade, and globalization. While aspects of US-China competition may offer sectoral opportunities for countries in areas such as semiconductors, the bigger worry is that this binary lens may disrupt Southeast Asia's status as the world's fifth-largest economy, with a market of nearly 700 million people and modestly high growth rates. For instance, Singapore's new fourth-generation of leaders, led by Lawrence Wong, have verbalized worries of US-China competition derailing the so-called "Asian century" unless actions are taken by regional states. Within this evolving competition, the US and China have different capabilities. This can begin to be discerned (non-exhaustively) by employing the so-called DIME framework, which analyzes the diplomatic, informational, military, and economic realms (see table below). For instance, the US has strengths across DIME–including its allied and partnership network, free media environment, and innovative foreign companies. But it also has limitations, including the lesser weight given to diplomatic resources relative to the military, as well as the difficulty of crafting a clear narrative that sustainably aligns a diverse domestic stakeholders in areas such as advancing a more active trade policy. An additional challenge is crafting policies that are both attractive to Southeast Asia but can also be sustained over time in the US domestic context despite changes in administrations. Within Southeast Asia, US strengths tend to be more visible to long-term security allies such as the Philippines or developed commercial and strategic hubs, including Singapore. Washington's limitations play out more in relatively less like-minded and lesser-developed countries, with Cambodia being a case in point in recent years.Image CreditUnsurprisingly, US and Chinese regional visions have built on their strengths. Take, for instance, Washington's free and open Indo-Pacific (FOIP) strategy, which has been sustained with some adjustments across administrations. In Southeast Asia, this combines areas such as values, partnerships, and military power, with lines of effort ranging from boosting partner maritime defense capacity to expanding development financing and people-to-people programs. Meanwhile, China's so-called "community of common destiny for mankind" (CCD) in Southeast Asia uses Beijing's strengths, such as its geographic proximity and economic heft as the region's top trading partner and a leading investor. Manifestations have included Belt and Road Initiative projects, subregional initiatives such as the Lancang-Mekong Cooperation mechanism, and the gradual development of security institutions and exercises. China is also leveraging its involvement in agreements, including the Regional Comprehensive Economic Partnership (RCEP), a pact that Washington was ineligible to join at the time due to the absence of a US-ASEAN free trade agreement relative to other ASEAN dialogue partners. III. Evolving Complex Regional Realities in US-China CompetitionThe contours of US-China competition are playing out amid complex, evolving regional realities. The dynamics of US-China competition in Southeast Asia are at times portrayed through lenses such as Southeast Asian states resisting choices being forced upon them by Beijing and Washington, or individual choices such as the China links in Malaysia's multibillion-dollar 1MDB scandal or the ongoing reporting on alleged Chinese naval facilities in Cambodia, despite Phnom Penh's denials. But more granularly, Southeast Asian states are contending with complex regional realities that relate to how countries think and act in an environment of multiple powers with respect to three areas: outlooks, actions, and perceptions.In terms of outlooks, though Washington and Beijing have tried to shape competing visions, Southeast Asian states have engaged with them only selectively as they also strive for a more inclusive, multipolar region. China's CCD was initially met with wariness in parts of the region. One official described it to the author as a "China-first concept in an Asia-first disguise" to create an exclusive China-Southeast Asia community reinforcing Beijing's dominance. Meanwhile, the US FOIP generated anxieties within parts of ASEAN about how a reaction to China's assertiveness by Washington–welcomed by some–could nonetheless lead Beijing to push back against efforts to counter its influence and even generate regional instability. This partly explains why the grouping's ASEAN Outlook on the Indo-Pacific ended up trying to shift the Indo-Pacific conversation away from geopolitics and toward concrete regional priorities such as connectivity and sustainable development, which would also include other actors beyond Washington and Beijing, including India. This balance between preserving the region's quest for growth and managing geopolitical challenges was a consistent theme in conversations with regional policymakers. Turning to the second area of actions, Southeast Asian states have tried to affect US-China competition in various ways, classified here through the categories of engaging, shaping, and balancing (see table below for a summary, with the caveat that though countries are classified by strategy in the examples, most employ multiple strategies simultaneously). This constitutes one aspect of their agency amid competition, which can be defined simply as exercising their capacity to act. In the engaging component, one strategy is "bargaining" to renegotiate terms, such as Myanmar's scaling back of the Chinese-backed Kyaukpyu project within the Belt and Road Initiative, with US assistance. Countries have also used "synching" to connect US-China competition to national priorities, such as Indonesia trying to attract investment, including from Beijing and Washington in sectors like critical minerals. Turning to balancing, one strategy is "diversification." This is typified by Vietnam's upgrading of its partnerships amid concerns about China, including the one with the US. A less appreciated one is "reinforcement," where countries consolidate neighborhood positions to offset foreign influence. An example here is what officials privately acknowledge about Thailand's sensitivities over issues such as the location of Chinese patrols in the Mekong subregion, and its reassertion of its own subregional strategic development frameworks such as the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS). The third component of shaping has to do with how Southeast Asian states adjust their internal and external environments. One internal strategy is "insulation" to shield the domestic environment from major power competition, such as Philippine officials voicing concerns about Chinese disinformation efforts regarding the South China Sea. One external strategy is "pathfinding" through innovative sectoral approaches. We have seen this in particular in Indo-Pacific geoeconomic dynamics, with a case in point being Singapore trying to structure sectoral digital and green agreements such as the Digital Economic Partnership Agreement despite the challenging environment for whole free-trade pacts.Image CreditThe third component is perceptions. Apart from how Southeast Asian states think and act, there is often also an array of domestic views on some of the manifestations of US-China competition among some Southeast Asian elites and the general population that may not necessarily be represented in national decisions. At a more superficial level, this can be seen in polling data, such as the overwhelmingly positive views of the US among the Vietnamese people relative to the caution in US-Vietnam ties exercised by the Communist Part of Vietnam. More granularly, this can also be seen in sentiments regarding particular initiatives undertaken by Washington or Beijing. For example, while the governments of Cambodia and Laos are often portrayed as being overly close to China, officials from both these countries at times privately admit they need to be responsive to societal concerns as well, rather than just advancing domestic regime legitimation. More publicized aspects of this include the fallout from the giant proliferating Mekong scam networks and communities negatively affected by some Chinese infrastructure projects. IV. Policy ImplicationsWhile it is clear that Southeast Asian countries have agency within the broader context of U.S.-China competition, it is also true that exercising that agency is a complex and uneven reality in the region. How countries respond is also likely to shift if US-China competition continues globally and multidimensionally with varying levels of intensity over time and differences in breadth, scope, and extent. This in turn raises the question of how Southeast Asian states themselves, as well as interested countries, can help boost regional agency. For the US, boosting agency would not only support Southeast Asian states, but also help advance US interests. Ideally, efforts to strengthen agency would both decrease the risk of countries being coerced in how they make their choices, as well as increase the opportunities for Washington to work with selected states to advance a shared vision of a multipolar order rather than one dominated by China. This effort to strengthen agency should obviously begin with Southeast Asian states themselves. At a minimum, governments should consider how to manage the impact of major power competition on core national functions that transcend particular regime interests, including the information environment and the so-called commanding heights of their economies, such as telecommunications. There are already instances of this at play, including Vietnam's spotlighting of a component of indigenization within its technology ecosystem and societal initiatives in the Philippines on combating fake news, despite enduring challenges. Beyond this, more capable and willing Southeast Asian governments should continue to socialize more active notions of agency. Indonesia's leadership role in keeping FOIP afloat is notable in this regard, as is Singapore's leaders' useful rhetorical distinction between passive hiding amid US-China competition and "active multi-engagement." Non-governmental actors also have an important role to play in shaping conversations about agency and ensuring that US-China competition is taking into account needs of Southeast Asia's citizens. Some of this builds on ongoing work, including efforts by the ASEAN-ISIS network (an association of think tanks recognized by ASEAN to foster regional cooperation and information exchange) at the Track Two level to continue to advocate for a more inclusive and well-rounded notion of Southeast Asia's security. This will be especially critical as US-China competition plays out in subregional, cross-border spaces that transcend nation states, from the Mekong to the Andaman Sea to the Sulu-Sulawesi Sea. The US and China also have a role to play. This starts with mindfulness of actions that undermine agency, be it China's portrayal of US allies such as the Philippines as being American puppets or US strongarming countries such as Malaysia on 5G, which came across to some officials as a less collaborative way to address legitimate security concerns. On the affirmative end, both sides should focus on upping their own competitiveness rather than undermining that of the other. For example, for the US, some of the inroads it can make stem from what might be termed China's "influence-trust gap" in parts of the region, where Beijing is seen as both the most capable and least trusted power. At the same time, the US cannot simply rely on Beijing's missteps to make gains of its own. Washington's focus should be on managing its "power-commitment gap." In that gap, there are questions about its ability to translate capabilities to sustained regional commitment that can address regional needs, especially in the economic domain, given domestic difficulties in areas that include trade. Addressing that requires a comprehensive approach, including leveraging tools such as the Development Finance Corporation, working with partners and crafting a narrative that showcases what Washington already does in the region through a series of actors, including companies that go beyond security. Other powers and interested actors also have an important role. Sectoral leadership can add to Southeast Asia's choices and reinforce agency beyond what Beijing and Washington do, with cases in point including Japan's leading role in infrastructure and Europe's role in the green economy. Supporting broader objectives such as preserving the rules-based order can help refocus the attention on shared goals beyond a Chinese or Western agenda, as is the case with support by India or South Korea in response to coercive Chinese actions in the South China Sea. Actors with a global perspective such as the United Nations or International Monetary Fund also can continue to help socialize the hopeful narrative of Southeast Asia's unique growth story, rather than a fearful one of a superpower battleground. This narrative puts the region at the center and empowers its countries instead of viewing them as objects of major powers.
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I. IntroductionUS-China competition has been intensifying in Southeast Asia, a region of immense strategic significance given its economic heft, geostrategic location next to major sea lanes, and diplomatic convening power via the Association of Southeast Asian Nations (ASEAN). Amid this, there have been rising conversations about how Southeast Asian states are responding in this competition and the implications for Washington, Beijing, and other interested actors. For US policymakers in particular, this could have important effects on how Washington thinks about advancing key regional priorities such as diversifying supply chains and securing the first island chain extending out to the South China Sea. This policy brief explores the agency of Southeast Asian states amid US-China competition and ways interested actors can boost it. It is informed by conversations with policymakers and experts across all 11 countries in Southeast Asia, which included multiple trips across the region. The brief makes three main arguments: First, the contours of US-China competition are such that it represents one of manifold challenges for Southeast Asian states, wherein Washington and Beijing bring to bear different capabilities. Second, Southeast Asian states are already exercising agency within this competition through engagement, balancing, and shaping their environment. Third, actors (including the US and its partners) can help reinforce the agency of Southeast Asian states to advance a shared vision for a region that is free from coercion and conducive to open and fair competition. II. Contours of US-China Competition in Southeast AsiaUS-China competition is the latest in a series of phases of major power competition in Southeast Asia. Southeast Asia was under major power influence for centuries–from empires and open maritime routes linking it to China, India, the Middle East, and Europe to colonization. Southeast Asian states have also adjusted to multiple balance of power shifts over the decades. Those include the 1950s, with the advent of the Cold War in Asia; the 1970s with the US withdrawal from Vietnam, and Sino-US rapprochement; the 1990s with the Soviet Union's demise and a more engaged China and India; and the 2010s with increasing US-China competition and Washington's response (as illustrated in documents such as the 2018 National Defense Strategy). The lesson for much of Southeast Asia amid this reality is that exercising agency is essential to preserving autonomy. As former Thai foreign minister Thanat Khoman once succinctly observed, without agency, smaller countries would "become nothing but mere pawns of different size."Image CreditToday, as important as US-China competition is, it is also just one of a series of pressing priorities for Southeast Asian policymakers in their quest to manage challenges and maximize opportunities for growth and security. These include growing domestic pressures on regimes to deliver for their people; stresses on regional institutions such as ASEAN amid the proliferation of crises from Myanmar to the South China Sea, and minilateral institutions such as the Quad and AUKUS; and challenges to the rule of law, trade, and globalization. While aspects of US-China competition may offer sectoral opportunities for countries in areas such as semiconductors, the bigger worry is that this binary lens may disrupt Southeast Asia's status as the world's fifth-largest economy, with a market of nearly 700 million people and modestly high growth rates. For instance, Singapore's new fourth-generation of leaders, led by Lawrence Wong, have verbalized worries of US-China competition derailing the so-called "Asian century" unless actions are taken by regional states. Within this evolving competition, the US and China have different capabilities. This can begin to be discerned (non-exhaustively) by employing the so-called DIME framework, which analyzes the diplomatic, informational, military, and economic realms (see table below). For instance, the US has strengths across DIME–including its allied and partnership network, free media environment, and innovative foreign companies. But it also has limitations, including the lesser weight given to diplomatic resources relative to the military, as well as the difficulty of crafting a clear narrative that sustainably aligns a diverse domestic stakeholders in areas such as advancing a more active trade policy. An additional challenge is crafting policies that are both attractive to Southeast Asia but can also be sustained over time in the US domestic context despite changes in administrations. Within Southeast Asia, US strengths tend to be more visible to long-term security allies such as the Philippines or developed commercial and strategic hubs, including Singapore. Washington's limitations play out more in relatively less like-minded and lesser-developed countries, with Cambodia being a case in point in recent years.Image CreditUnsurprisingly, US and Chinese regional visions have built on their strengths. Take, for instance, Washington's free and open Indo-Pacific (FOIP) strategy, which has been sustained with some adjustments across administrations. In Southeast Asia, this combines areas such as values, partnerships, and military power, with lines of effort ranging from boosting partner maritime defense capacity to expanding development financing and people-to-people programs. Meanwhile, China's so-called "community of common destiny for mankind" (CCD) in Southeast Asia uses Beijing's strengths, such as its geographic proximity and economic heft as the region's top trading partner and a leading investor. Manifestations have included Belt and Road Initiative projects, subregional initiatives such as the Lancang-Mekong Cooperation mechanism, and the gradual development of security institutions and exercises. China is also leveraging its involvement in agreements, including the Regional Comprehensive Economic Partnership (RCEP), a pact that Washington was ineligible to join at the time due to the absence of a US-ASEAN free trade agreement relative to other ASEAN dialogue partners. III. Evolving Complex Regional Realities in US-China CompetitionThe contours of US-China competition are playing out amid complex, evolving regional realities. The dynamics of US-China competition in Southeast Asia are at times portrayed through lenses such as Southeast Asian states resisting choices being forced upon them by Beijing and Washington, or individual choices such as the China links in Malaysia's multibillion-dollar 1MDB scandal or the ongoing reporting on alleged Chinese naval facilities in Cambodia, despite Phnom Penh's denials. But more granularly, Southeast Asian states are contending with complex regional realities that relate to how countries think and act in an environment of multiple powers with respect to three areas: outlooks, actions, and perceptions.In terms of outlooks, though Washington and Beijing have tried to shape competing visions, Southeast Asian states have engaged with them only selectively as they also strive for a more inclusive, multipolar region. China's CCD was initially met with wariness in parts of the region. One official described it to the author as a "China-first concept in an Asia-first disguise" to create an exclusive China-Southeast Asia community reinforcing Beijing's dominance. Meanwhile, the US FOIP generated anxieties within parts of ASEAN about how a reaction to China's assertiveness by Washington–welcomed by some–could nonetheless lead Beijing to push back against efforts to counter its influence and even generate regional instability. This partly explains why the grouping's ASEAN Outlook on the Indo-Pacific ended up trying to shift the Indo-Pacific conversation away from geopolitics and toward concrete regional priorities such as connectivity and sustainable development, which would also include other actors beyond Washington and Beijing, including India. This balance between preserving the region's quest for growth and managing geopolitical challenges was a consistent theme in conversations with regional policymakers. Turning to the second area of actions, Southeast Asian states have tried to affect US-China competition in various ways, classified here through the categories of engaging, shaping, and balancing (see table below for a summary, with the caveat that though countries are classified by strategy in the examples, most employ multiple strategies simultaneously). This constitutes one aspect of their agency amid competition, which can be defined simply as exercising their capacity to act. In the engaging component, one strategy is "bargaining" to renegotiate terms, such as Myanmar's scaling back of the Chinese-backed Kyaukpyu project within the Belt and Road Initiative, with US assistance. Countries have also used "synching" to connect US-China competition to national priorities, such as Indonesia trying to attract investment, including from Beijing and Washington in sectors like critical minerals. Turning to balancing, one strategy is "diversification." This is typified by Vietnam's upgrading of its partnerships amid concerns about China, including the one with the US. A less appreciated one is "reinforcement," where countries consolidate neighborhood positions to offset foreign influence. An example here is what officials privately acknowledge about Thailand's sensitivities over issues such as the location of Chinese patrols in the Mekong subregion, and its reassertion of its own subregional strategic development frameworks such as the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS). The third component of shaping has to do with how Southeast Asian states adjust their internal and external environments. One internal strategy is "insulation" to shield the domestic environment from major power competition, such as Philippine officials voicing concerns about Chinese disinformation efforts regarding the South China Sea. One external strategy is "pathfinding" through innovative sectoral approaches. We have seen this in particular in Indo-Pacific geoeconomic dynamics, with a case in point being Singapore trying to structure sectoral digital and green agreements such as the Digital Economic Partnership Agreement despite the challenging environment for whole free-trade pacts.Image CreditThe third component is perceptions. Apart from how Southeast Asian states think and act, there is often also an array of domestic views on some of the manifestations of US-China competition among some Southeast Asian elites and the general population that may not necessarily be represented in national decisions. At a more superficial level, this can be seen in polling data, such as the overwhelmingly positive views of the US among the Vietnamese people relative to the caution in US-Vietnam ties exercised by the Communist Part of Vietnam. More granularly, this can also be seen in sentiments regarding particular initiatives undertaken by Washington or Beijing. For example, while the governments of Cambodia and Laos are often portrayed as being overly close to China, officials from both these countries at times privately admit they need to be responsive to societal concerns as well, rather than just advancing domestic regime legitimation. More publicized aspects of this include the fallout from the giant proliferating Mekong scam networks and communities negatively affected by some Chinese infrastructure projects. IV. Policy ImplicationsWhile it is clear that Southeast Asian countries have agency within the broader context of U.S.-China competition, it is also true that exercising that agency is a complex and uneven reality in the region. How countries respond is also likely to shift if US-China competition continues globally and multidimensionally with varying levels of intensity over time and differences in breadth, scope, and extent. This in turn raises the question of how Southeast Asian states themselves, as well as interested countries, can help boost regional agency. For the US, boosting agency would not only support Southeast Asian states, but also help advance US interests. Ideally, efforts to strengthen agency would both decrease the risk of countries being coerced in how they make their choices, as well as increase the opportunities for Washington to work with selected states to advance a shared vision of a multipolar order rather than one dominated by China. This effort to strengthen agency should obviously begin with Southeast Asian states themselves. At a minimum, governments should consider how to manage the impact of major power competition on core national functions that transcend particular regime interests, including the information environment and the so-called commanding heights of their economies, such as telecommunications. There are already instances of this at play, including Vietnam's spotlighting of a component of indigenization within its technology ecosystem and societal initiatives in the Philippines on combating fake news, despite enduring challenges. Beyond this, more capable and willing Southeast Asian governments should continue to socialize more active notions of agency. Indonesia's leadership role in keeping FOIP afloat is notable in this regard, as is Singapore's leaders' useful rhetorical distinction between passive hiding amid US-China competition and "active multi-engagement." Non-governmental actors also have an important role to play in shaping conversations about agency and ensuring that US-China competition is taking into account needs of Southeast Asia's citizens. Some of this builds on ongoing work, including efforts by the ASEAN-ISIS network (an association of think tanks recognized by ASEAN to foster regional cooperation and information exchange) at the Track Two level to continue to advocate for a more inclusive and well-rounded notion of Southeast Asia's security. This will be especially critical as US-China competition plays out in subregional, cross-border spaces that transcend nation states, from the Mekong to the Andaman Sea to the Sulu-Sulawesi Sea. The US and China also have a role to play. This starts with mindfulness of actions that undermine agency, be it China's portrayal of US allies such as the Philippines as being American puppets or US strongarming countries such as Malaysia on 5G, which came across to some officials as a less collaborative way to address legitimate security concerns. On the affirmative end, both sides should focus on upping their own competitiveness rather than undermining that of the other. For example, for the US, some of the inroads it can make stem from what might be termed China's "influence-trust gap" in parts of the region, where Beijing is seen as both the most capable and least trusted power. At the same time, the US cannot simply rely on Beijing's missteps to make gains of its own. Washington's focus should be on managing its "power-commitment gap." In that gap, there are questions about its ability to translate capabilities to sustained regional commitment that can address regional needs, especially in the economic domain, given domestic difficulties in areas that include trade. Addressing that requires a comprehensive approach, including leveraging tools such as the Development Finance Corporation, working with partners and crafting a narrative that showcases what Washington already does in the region through a series of actors, including companies that go beyond security. Other powers and interested actors also have an important role. Sectoral leadership can add to Southeast Asia's choices and reinforce agency beyond what Beijing and Washington do, with cases in point including Japan's leading role in infrastructure and Europe's role in the green economy. Supporting broader objectives such as preserving the rules-based order can help refocus the attention on shared goals beyond a Chinese or Western agenda, as is the case with support by India or South Korea in response to coercive Chinese actions in the South China Sea. Actors with a global perspective such as the United Nations or International Monetary Fund also can continue to help socialize the hopeful narrative of Southeast Asia's unique growth story, rather than a fearful one of a superpower battleground. This narrative puts the region at the center and empowers its countries instead of viewing them as objects of major powers.
Inhaltsangabe: Introduction and Course of Work: In 2007, at their meeting in Tanzania, the central bank governors of the Southern African Development Community (SADC) laid out a strategy to strengthen regional integration, containing the development of a common market by 2015, fixed exchange rates by 2016, and, ultimately, a monetary union with a single currency in 2018. In pursuit of this agenda, a free trade area absent of intra-regional tariffs was arranged in August 2008 with a regional customs union to follow this year. The currently fourteen member countries of the SADC committed themselves towards achieving economic convergence and to deepen monetary cooperation. In the 21st century, Africa finds itself increasingly separated from economic developments in the remaining world and fails to prosper from increased globalization. Despite a large abundance in natural resources, many countries have suffered from an extremely poor economic performance, which mainly originated from internal strives and weak and distortionary policies. Inward looking governments, conducting clientele policies, are focused on reaping economic rents rather than on fostering growth. Furthermore, tribal conflicts and civil war have sparked recurring border conflicts with neighboring countries. Although Africa has seen a large number of regional arrangements and trading blocs throughout the continent, the overall success for growth and trade expansion was limited. Against this background, the formation of a monetary union is believed to counteract economic and political weaknesses, to improve regional cooperation and to enhance both the political and economic standing in the world. A monetary union and a common currency entails both gains and losses for its members. On the cost side, countries in a monetary union effectively loose the ability to pursue independent monetary policies and to use the exchange rate as adjustment instrument to stabilize the economy. On the other hand, countries inside a monetary union benefit from reduced transaction costs and the elimination of internal exchange rate volatility. Furthermore, countries which suffer from weak internal stability and high inflation rates benefit by using the fixed exchange rate in a monetary union as external anchor. By transferring the power over monetary policy to a supranational central bank, the risk of homegrown inflation and currency devaluations is banished and economic agents are able to borrow at more favorable interest rates. Both the gains and losses from a monetary union are determined by structural characteristics inside the countries. If, in total, the benefits from a single currency exceed the costs in that the constraints imposed by fixed exchange rates are not harmful to the economy, the countries constitute an optimum currency area. In essence, the theory of optimum currency areas considers the desirability for each country to join a monetary union. The trade off between costs and benefits is affected by three features: First, the degree of intra-country trade influences the gains in efficiency and reduced uncertainty from fixing the exchange rate. Second, the degree of correlation in output fluctuations determines whether a common monetary policy is adequate for all countries. And third, the response to output shocks is eased by several adjustment mechanisms, including price flexibility and factor mobility, which restore the initial equilibrium. The purpose of this study is to evaluate whether a monetary union in Southern Africa is both desirable and feasible from an economic point of view, to discuss institutional challenges and requirements, and to give direction for which countries are best candidates to form a monetary union. Both the motivation and requirements for a successful monetary union are drawn from the theory of optimum currency areas. Unfortunately, the various aspects of the theory have been gradually developed over time and are often confounded and fragmentary in theoretical work. The aim is therefore to first derive a framework that includes relevant benefits and costs, which are subsequently related to country-specific structural criteria. Since economic integration is an important aspect for Africa, emphasis will be put on the endogenous trade effects of monetary integration. Similarly, special attention is given to fiscal distortions and weak institutions, which are sources of high inflation rates and low monetary credibility. Next, the theoretical foundations are applied to the SADC to examine the suitability of countries to form a monetary union. Although a number of studies have discussed monetary integration in various parts of Africa (Masson and Pattillo 2001, Debrun, Masson and Pattillo 2005, and Houssa 2008, for instance, cover monetary unification in West Africa while Kishor and Ssozi 2009 analyze the East African Community), relatively little has been done concerning the SADC in particular. Relevant exceptions are Agbeyegbe, Bayoumi and Ostry, Buigut and Valev, Karras and Khamfula and Huizinga. However, while the studies mentioned typically focus on one aspect of the theory of optimum currency areas, there are very few attempts so far to include all relevant aspects in one framework. Overall, the findings suggest that a monetary union encompassing the whole SADC is infeasible at this stage, and unlikely in the foreseeable future. However, there is evidence for a monetary union consisting of a smaller group of countries, based on the long standing CMA arrangement. In addition to South Africa, Lesotho, Namibia and Swaziland, countries proposed for a monetary union are Botswana, Mozambique and Zambia. On the other hand, there is little evidence that the remaining countries would benefit from monetary unification in any time soon. Countries in the SADC generally differ much in their economic and political development. While some countries, namely South Africa, feature a relatively advanced economy, other countries like Congo and Zimbabwe experienced economic deterioration and high inflation rates. Especially the findings of low regional trade intensities do not hold much promise of large gains from transaction cost savings. Furthermore, both the comovement of business cycles and the correlation of output disturbances are strikingly low, indicating that a common monetary policy is unsuited for most countries. For a small number of countries with a history of high and volatile inflation rates, a common, stable currency would be however attractive in giving higher price stability and an institutional framework to insulate monetary policy from domestic fiscal pressures. Nevertheless, this path is unrealistic since it will be impossible to merge the interests of undisciplined countries with those of low inflation countries like South Africa. In sum, it is inadvisable to proceed with monetary unification to rashly. A monetary union is far from certain to promote regional integration and should not be seen as substitute for political initiatives to solve regional problems and restraining poor fiscal policies. The analysis is divided into three main sections: Section 2 reviews the theoretical implications from the theory of optimum currency areas. After introducing the benefits and costs from monetary unification, both the traditional and endogenous criteria are described to judge the desirability of a monetary union. Next, two models of monetary policy are presented so as to formalize the concept of monetary cooperation. Section 3 subsequently applies the criteria to the SADC. Special attention is given to the correlation of business cycles and comovement of output shocks. A structural vector autoregression analysis is carried out in order to separate underlying supply and demand shocks from output disturbances. Section 4 evaluates the feasibility of a monetary union in the SADC by drawing lessons from the CMA and EMU. Finally, further challenges in the transition to a monetary union are pointed out. Section 5 summarizes and concludes.Inhaltsverzeichnis:Table of Contents: List of Figuresiii List of Tablesiii List of Abbreviationsiii 1.Introduction1 2.Theoretical Foundations of the Optimum Currency Area Theory5 2.1Benefits and Costs of Monetary Integration7 2.1.1Benefits of Monetary Integration8 2.1.2Costs of Monetary Integration11 2.2Criteria of Optimum Currency Areas12 2.3Endogenous Effects in Monetary Integration17 2.4Policy Implications20 2.5Fiscal Distortions and Monetary Credibility22 2.6Theoretical Conclusions27 3.Theory and Empirical Evidence in the Southern African Development Community28 3.1The Economic Situation and Convergence in Southern Africa29 3.2Empirical Approaches of the Optimum Currency Area Theory and Evidence in Southern Africa38 3.3Correlation and Structure of Output Shocks and Business Cycles46 3.4Results52 4.Evaluating the feasibility of the SADC as a Monetary Union and future Prospects54 4.1The Experience of the Common Monetary Area56 4.2Lessons from the European Monetary Union58 4.3The role of Monetary and Fiscal Policies in Southern Africa60 4.4Challenges and the Path to a Monetary Union62 5.Summary and Conclusion68 AAppendix70 A.1Appendix for Section 2.570 A.2Appendix for Section 3.372Textprobe:Text Sample: Chapter 3, Theory and Empirical Evidence in the Southern African Development Community: To recapitulate: The main criteria which have been identified in the optimum currency area theory are (i) the correlation of output shocks, (ii) the extent of regional trade and production diversification, (iii) financial integration, (iv) price flexibility and factor mobility, and (v), inflation differentials and fiscal distortions. It is generally accepted that the formation of a monetary union requires participants to first achieve convergence in a variety of criteria. In this respect, fiscal and institutional convergence and low debt burdens are of special interest since both are a measure of sustainable economic policy. Furthermore, a similar level of per capita income indicates that countries have comparable institutional developments and interests. A monetary union that fails to satisfy these preconditions tends to be instable and may lack credibility from the very beginning. Over the last years however, a number countries in the SADC have experienced an increasing rate of divergence. The transition process in the SADC towards a monetary union is supported by a number of preceding arrangements. The Southern African Customs Union between South Africa, Botswana, Namibia, Lesotho and Swaziland has promoted a certain degree of regional trade. Economic integration has been however limited since the main objective of the customs union was to ease the collection of customs duties rather than industrial cooperation. Regional integration within the SADC advanced in 2008 with the Free Trade Area, which established zero tariffs for 85% of traded goods. However, for goods that have been declared as import-sensitive, most notably food and clothing, liberalization has been deferred. The overall impact on regional trade is therefore uncertain. Despite various efforts for trade liberalization in the past, political commitment has been low so far. Financial relations in the SADC are mainly limited to foreign direct investments. Nevertheless, some recent efforts have been made to harmonize national payment systems. Moreover, the SADC has agreed to work towards full currency convertibility. Since microeconomic data for Africa is scarce, the empirical evidence on optimum currency areas is mainly based on the correlation of output shocks and inflation or exchange rate differentials. Of the other criteria, factor mobility and price flexibility are especially hard to measure and estimates rely on very few observations. Not all of the criteria can therefore be analyzed in similar depth or for the same set of countries. Data was obtained from the World Bank World Development Indicators, the United Nations statistics division, the International Monetary Fund and the African Economic Outlook Database. 3.1, The Economic Situation and Convergence in Southern Africa: The SADC is unique among all regional arrangements in Africa due to the dominant role of South Africa. With a share of over 65% in real GDP (USD at 2000 prices) and 18% of the total population, South Africa is by far the largest and most industrialized economy in the region. In comparison, the remaining countries differ remarkably in size, income and economic structure. The Seychelles, the smallest country with little more than 85,000 residents, is the richest country with a real per capita income (in PPP) of over 19,000 USD in 2008 while Congo and Zimbabwe are among the poorest countries in the world with a real per capita income of approximately 290 USD and 185 USD respectively (see table 1). Life expectancy is low for most countries with an average of 53 years (ranging from 44 years in Zimbabwe to 73 years in the Seychelles) which is an indicator for the high poverty rate among the population. Income inequality as measured by the GINI Index varies considerably across contries, where South Africa (58), Angola (58) and Namibia (70) display one of the highest inequalities worldwide. Economic growth was robust for almost all countries since 1990 except in Congo and Zimbabwe and accelerated in Angola, Mauritius, Tanzania and Mozambique in recent years. Average annual GDP growth from 1990-2008 was highest for Angola (6.2%) due to increasing oil export revenues, but also the most volatile with a standard deviation of 10.5. In the four countries of the CMA, the growth performance was driven by the end of Apartheid in South Africa in 1994 and averaged to 3.7% from 1990-2008. The reeintegration of the South African economy in the world market attracted new foreign investors and trade, and more than tripled growth rates in the post-Apartheid period (from 1980-1992 the average was 1.1. On the other hand, Zimbabwe and until recently Congo experienced a drastic fall in income levels. While Congo still suffers from the aftermath of the civil war and political instability, Zimbabwe was run down by the Mugabe regime. Since at the same time these countries also have the lowest per capita income levels, it appears that the economies in the SADC diverge. Figure (4) illustrates the relationship between average per capita growth rates and relative income for 14 SADC members in the period 1990-2008. The results show that most countries with an initially high income level also had the highest average growth rates, which led to a widening of the income gap (striking examples are Botswana and Mauritius). The ambiguous relationship is a sign that positive developments in individual countries were determined by external factors rather than by improved regional cooperation. Production structure and trade: Production and export structures vary to a large extent among the SADC. While South Africa, Lesotho, Zimbabwe and Swaziland have a relatively advanced manufacturing sector, most other countries depend on primary goods production (except for Mauritius which is specialized in financial services). In the rural countries Malawi, Tanzania, Congo, Mozambique and Madagascar, agriculture still accounts for a large, although declining production share. Raw materials (mining and oil) are a main income source for Angola, Botswana, Zambia, Congo and Namibia and contribute to a large part of foreign reserves. Accordingly, those countries usually exhibit surpluses in their trade and current account (see table 1). Similar to production structures, the composition of merchandise trade reported in table (2) differs considerably across countries. A higher income level is generally associated with high export shares in manufacturing and primary products, while low income countries tend to export food products and import manufactures. As a result of different production and trade structures, the ratio of intra-industry trade are ineffectual small for all countries except South Africa, reflecting the low degree of industrialization. Regional trade in the SADC is dominated by South Africa, which exports high value manufactures in return for small amounts of raw material imports. Especially countries inside the SACU maintain important trade connections to South Africa. Commodity imports from South Africa represent on average over 44% of total imports in other SADC countries and account for approximately 80% of total imports in Lesotho, Swaziland, Namibia and Botswana (see table 3). On the other hand, export shares from the SADC towards South Africa amounts to only 15% on average with Swaziland (38%), Namibia and Lesotho (both 27%) having the strongest trade linkages. As a result, South Africa typically generates substantial regional trade surpluses. In contrast, trade integration among the remaining SADC countries is at very low levels, also because of a shortage in infrastructure. The only substantial trade flows are between neighboring Namibia and Angola (10% of Namibias exports), Zimbabwe and neighboring Zambia (14% of Zimbabwes exports) and landlocked Swaziland and Mozambique (9% of Swazilands exports). Although informal trade is assumed to account for a large proportion of total trade, most of the regional trade flows are negligible. To promote intra-regional trade, various efforts have been started in recent years. Overall trade has been substantially liberalized in the past and import restrictions reduced so that effective tariff protection rates declined in most countries. Accordingly, the average share of regional merchandise exports in percent to total merchandise exports increased from 8% in 1990 to 19% in 2008, and overall merchandise exports have grown on average by 10% per year since 1990.
Technical Report 2018-08-ECE-137 Technical Report 2002-09-ECE-006 Engineering of Enterprises a Transdisciplinary Activity Murat M. Tanik Ozgur Aktunc John Tanik This technical report is a reissue of a technical report issued September 2002 Department of Electrical and Computer Engineering University of Alabama at Birmingham August 2018 Technkal Report 2002-09-ECE-006 Engineering of Enter·prises A Transdisciplim•ry Activity Murat M. Tanik Ozgur Aktunc John Tanik TECHNICAL REPORT Department of Electrical and Computer Engineering University of Alabama at Birmingham September 2002 ENGINEERING OF ENTERPRISES A TRANSDISCIPLINARY ACTIVITY OVERVIEW Contributed by: Murat M. Tanik, Ozgur Aktunc, and John U. Tanik This module is composed of two parts: Part I surveys and defines Enterprise Engineering in the context of transdiscipline. Part II introduces Internet Enterprise and addresses engineering implementation consider ations. PART I ENTERPRISE ENGINEERING ESSENTIALS 1 INTRODUCTION When Henry Ford rolJed out his first automobile assembly during 1913, he created the archetype of single-discipline enterprise. Ford's adventure was a self-contained and efficient exercise in mechankal engineering. With no competition, no regulatory constraints, and no pressing need for cross-disciplinary partnerships, from design development to process development, all ideas primarily originated from Ford's own engineers. The world is a different place today. Automobiles are complicated hybrids of mechanical, electrical, electronic, chemicaJ, and software components. Modern 4 manufacturers must now pay dose attention to new technological developments in hardware (mechanisms associated with physical world), software (mechanisms associated with computational world), netware (mechanisms associated with communications), and peopleware (mechanisms associated with human element). The changes experienced in the automotive industry exemplify the needs of the ever increasingly complex nature of today's modern enterprise. In other words, the ubiqui tous existence of the ";computing element" forces us to take into account disciplinary notions, ranging from psychology to ecology. In one word, the world is becoming transdisciplinary. In this world of transdisciplinary needs, we need to approach designing of enterprises as engineers, moving away from the traditional ad hoc approach of the past. This module expl ai n~ the changes to be made to current enterprise organization in order to be successful in the networked economy. A brief definition of Enterprise Engineering is given as an introduction, foJJowed by a summary of Enterprise Engineering subtopics, namely modeling, analysis, design, and implementation. In the last section of Part I, the definition of an intelJigent enterprise is made with an emphasis on knowledge management and integration using Extensible Markup Language (XML) technology [1]. 2 DEFINITION The Society for Enterprise Engineering (SEE) defined Enterprise Engineering as ";the body of knowledge, principles, and practices having to do with the analysis, design, implementation and operation of an enterprise" [2]. Enterprise Engineering methods include modeling, cost analysis, simulation, workflow analysis, and bottleneck analysis. 5 In a continually changing and unpredictable competitive environment, the Enterprise Engineer addresses a fundamental challen ge: ";How to design and improve all elements associated with the total enterprise through the use of engineering and analysis methods and tools to more effectively achieve itsgoals and objectives" [3]. Enterpr.ise Engineering has been considered as a disdpline after its establishment in the last decade of the 20th Century. The discipline has a wor]dvicw that is substantial enough to be divided into sub-areas, with a foundation resting on several reference disciplines. In the Enterprise Engineering worldview, the enterprise is viewed as a complex system of processes that can be engineered to accompli sh specific organizational objectives. Enterprise Engineering has used several reference disciplines to develop its methods, technologies, and theories. These reference disciplines can be listed as the following: Industrial Engineering, Systems Engineering, Information Systems, Information Technology, Business Process Reengineeling, Organizational Design, and Human Systems [2]. 2.1 Understanding Enterprise Engineering Like most engineering profession als, Enterprise Engineers work on four main areas: modeling, analyzing, design, and implementation. One important issue facing Enterprise Engi neering is the development of tools and techniques to support the work of analyzing, designing, and imp1ementjng organizational systems. These tools must assist enterprise engineers in the initial transformation of functional, often disjoint, operations into a set of integrated business processes replete with supporting information and control systems [4]. To develop new models of enterprises, the enterprise should be analyzed 6 using process analysis, simulation, activity-based analysis, and other tools. Also an abstract representation of the enterprise and the processes should be modeled in a graphical, textual, or a mathematical representation. The . design issues in Enterprise Engineering consist of developing vision and strategy, integration and improvement of the enterprise, and developing technology solutions. Lastly, implementation deals with the transformation of the entetprise, integration of corporate culture, strategic goals, enterprise processes, and technology. We will take a look at these areas in the fol1owing section: • Enterprise Engineering Modeling (EEM), • Analyzing Enterprises, • Design of Enterprises, and • Implementation. 2.2 Enterprise Engineering Modeling Enterprise Engineering Modeling (EEM) is basically dealing with the abstraction of engineering aspects of enterprises and connecting them to other business systems. The model encompasses engineering organizations' products, processes, projects, and, ultimately, the ";engineered assets" to be operated and managed. EEM coordinates design and deployment of products and assets at the enterprise level. It integrates engineering information across many disciplines, allows engineering and business data to be shared through the combinatjon of enterprise IT (information technology) and engineering IT, and simulates the behavior of intelligent, componentbased models [5). 7 The selection and design of enterprise processes for effective cooperation is a prime objective of Enterprise Engineering. Enterprise models can assist the goal of Enterprise Engineering by helping to represent and analyze the structure of activities and their interactions. Models eliminate the irrelevant details and enable focusing on one or more aspects at a time. Effective models also facilitate the discussions among different stakeholders in the enterprise, helping them to reach agreement on the key fundamentals and to work toward common goals. Also it can be a basis for other models and for different information systems that support the enterprise and the business. The enterprise model will differ according to the perspective of the pers.on creating the model, including the visions of the enterprise, its efficiency, and other various elements. The importance of an enterprise model is that it wm provide a simplified view of the business structure that will act as a basis for communication, improvements, or innovations and define the Information Systems requirements that are \ necessary to support the business. The term business in this context is used as a broad term. The businesses or the activities that can be represented with Enterprise Engineering models do not have to be profit making. For example, it can be a research environment with the properties of an enterprise. Any type of ongoing operation that has or uses resomces and has one or more goals, with positive or negative cash flow, can be referred to as a business [6]. The ideal business model would be a single diagram representing all aspects of a business. However this is impossible for most of businesses. The business processes are so complex that one diagram cannot capture all the information. Instead, a business model is composed of different views, diagrams, objects, and processes: A business 8 model is illustrated with a number of different views, and each captu~cs infmmation about one or more specific aspects of the businesses. Each view consists of a number of diagrams, each of which shows a specific part of the business structure. A diagram can show a ~1ructure (e.g., the organization of the business) or some dynamic collaboration (a number of objects and their interaction to demonstrate a process). Concepts are related in the diagrams through the use of different objects and processes. The objects may be physical such as people, machines, and products or more abstract such as instructions and services. Processes are the functions in the business that consume, refine, or use objects to affect or produce other objects. There are cunently hundreds of modeling tools for enterprises, and many modeling techniques such as Integrated Definition Language (IDEF), Petri-Net, Unified Mode1ing Language (UML), and meta-modeling. Modeling involves a modeling language and the associated modeling tools. Different enterprises may need different modeling tools according to the nature of the enterprise. Before selecting the modeling tool, a detailed analysis should be made to select the most appropriate modeling language and the tool. For the software industry, UML has become the standard modeJjng language [7]. 2.3 Enterprise Analysis The increasing complexity of enterprises has stimulated the development of sophisticated methods and tools for modeling and analysis of today's modern enterprises. Recent advances in information teclu1ology along with significant progress in analytical and computational techniques have facilitated the use of such methods in industry. 9 Applying Enterprise Analysis methods results in a documentation that supports a number of programs, which are as follows: strategic information resource planning, information architecture, technology and services acquisition, systems design and development, and functional process redesign. Most organizations have a wealth of data that can be used to answer the basic questions supporting strategic planning: who, what, where, and bow much. By modeling with these data using an Enterprise Analysis toolset, the enterptise models can be built incrementally and in less time. The most important use of Enterprise Analysis is that it presents the organization's own business, demographic, and workload data in a compelling manner to tell the story. Whether they are used to support programs for acquisitions, information architectures, or systems development, Enterprise Analysis studies are rooted in the business of the organization and thus are easily understood and supported by executive management. 2.4 Enterprise Design The design of an enterprise deaJs with many issues, including development of a vision and a strategy, the establishment of a corporate cu.lture and identity, integration and improvement of the enterprise, and development of technology solutions. Optimization of several perspectives within an enterprise is the objective of Enterprise Design. Examples of enterprise perspectives include quality, cost, efficiency, and agility ,. and management perspectives s uch as motivation, culture, and incentives. For example, consider the efficiency perspective. The modeling task will provide ontologies (i.e., object libraries) that can be used to construct a model of the activities of a process, such as its resource usages, constraints, and time. Based on these models the efficiency 10 perspective will provide tools to design, analyze, and evaluate organizational activities, processes, and structures. These tools will also be capable to represent and model the current status of an enterprise and to analyze and assess potential changes. One issue is wbetber there exists sufficient knowledge of the process of designing and optimizing business activities/processes to incorporate in knowledge-based tools. The main goal of an Enterprise Design application is to deveJ~p a software tool that enables a manager to explore alternative Enterprise Designs that encompass both the stmcture and behavior of the enterprise over extended periods of time. lssues such as motivation, culture, and incentives are explored, along with other relevant parameters such as organizational structure, functions, activity, cost, quality, and information [8]. 3 STRATEGY FORMULATION FORE-BUSINESS Electronic commerce is becoming a growing part of industry and commerce. The speed of technological change is enabling corporations large and small to transact business in a variety of ways. Today, it is routine practice to transact some aspect of business electronically from e-mail to exchanging data via Electronic Data Interchange (EDI), World Wide Web (WWW), and various shades these technologies. Numerous benefits accrue to corporations when they use automated capabilities. In order to maximize such benefits, electronic enterprises must base their efforts on welJdeveloped strategies. In this manner, tbe probability of success is increased many folds. Embarking on electronic commerce or business should never be thought of as the sole quest of the information systems department. The following strategies are a synthesis of II best practices introduced to assist information systems departments to prepare the organization for the information age [9, 1 0]. 3.1 Strategy 1 - Improve Corporate System DeveJopment Skms In addition to developing technical skills, corporations must pay close attention to effective communication, eliminating cross-functional language barriers, and improving inadequate facilities in geographically dispersed systems. 3.2 Strategy 2 -Build a Proactive Infrastructure There must be a constant effort to keep up with technological changes. Frequently, these changes trickle down from the top as a result of various business strategies. For example, top managers may discover that they need video-conferencing capability, and the information technology people are under pressure to deliver it. This kind of approach will put the chief information officer(CIO) in a reactive posture, trying to put out fires as they appear. In putting out such fires, local resources may be used to satisfy higher level needs without any obvious benefits to local managers who may resent this fact and create barriers against success. CIOs should try to get the cooperation of all users in anticipating system needs. If users are not satisfied with an imposed system, they wiiJ try to build their bootleg systems for their own needs. Thus, project needs should be anticipated as far as possible and should be planned to meet both short-term goals of management and yield benefits for the development of the infrastmcture of the corporation in the Jong term. 12 3.3 Strategy 3 - Consolidate Data Centers A corporation embar1dng on developing an e-business system must realize that there do already exist semiautonomous data centers distributed throughout various geographical locations. There may have been a time when such data centers were desirable. Today, e-business demands integrated information systems, and the data centers must be consolidated. An integrated information system is far more effic ient in controlling corporate operations. Obviously, operating fewer facilities, maintaining minimum levels of inventory, and giving better service to customers will bring handsome returns to corporations. During the consolidation process, a number of problems of compatibility and standardization will occm, but tackling such problems is better than having semiautonomous data centers. 3.4 Strategy 4 - Standardize Data Structures As corporations grow, different data processing systems and data centers proliferate, especiaUy in transnational corporations. Consolidating data centers and systems as suggested in strategy 3 may not be sufficient. Corporations need to determine data needed at global levels and standarclize them. Standardization may not be possible for certain applications in an international setting since regulatory accounting of different countries may be a roadblock. However, this should not be taken as a signal for nonstandardization. Standardization will make useful information available throughout the corporation. For example, these days many corporations are adapting XML as part of data stmcture consolidation strategy. XML issues are addressed in the next section with more detail. 13 3.5 Strategy 5 - Accommodate Linkages with Cui-rent Strategic Allies and Provide Expansion for Future Str ategic Alliances Recent developments in globalization and Internet technology are spurring corporations to form sliategic alliances. Automobile manufacturers are, for example, forming alliances to influence prices and qualities of their raw materials and parts purchases. Similar alliances are growing at an accelerated pace in other industries. These alliances are designed to create not only purchasing power but also a variety of other mutual interests, from technological co-operation to joint production. 3.6 Strategy 6 - Globalize Human Resource Accounting As companies centralize their information systems through computerization, a global inventory of human skills should be developed. Frequent human resource problems arjse when Information Systems (IS) personnel focus locally rather than globally. Recmiting of specialists, for example, must be done not with a local perspective but with a global one. This will help eliminate possible redundancies with potential savings. 4 INTELLIGENT ENTERPRISES Enterprises competing in global markets assume complex organizational forms such as supply chain, virtual enterprise, Web-based enterprise, production network, e-business, and e manufacturing. Common traits of these organizations are willingness to cooperate, global distributed product development and manufacturing, and high coordination and communication. These traits have led the trend of transformation from 14 capital intensive to intelligence intensive entetprises [1 1]. Visions of the organization's future e-Business roles as an intelligent enterprise could be formulated as follows [12]: • Transparent - Intelligent enterprises will contain substantial amounts of information on capabilities, capacities, inventories, and plans that can be exchanged between tools, servers, and optimizing agents that will augment capabilities of their human masters. • Timely - Intelligent enterprises will be designed to meet a customer need exactly when the customer wants it. • Tuned - Through collaboration and sharing of knowledge, the intel1igent enterprise wiJl serve customer needs with a mjnimum of wasted effort or assets. 4.1 Knowledge Management and Integration with XML One important challenge for enterprises today is storing and reusing knowledge. For many organizations, up-to-dale knowledge of what is relevant and important to customers distinguishes their offerings. The challenge is to assimilate this rapidly changing knowledge about products and services quickly and distribute it rapidly to leverage it for improved performance and quality service. This means finding all knowledge that is embedded in and accessed through technologies and processes and stored in documents and external repositories and being able to share it quickly with the customers. The capital-based organization needs to transform into bigh-perforrn.ing, processbased, knowledge-based enterprises, characterized by agility, f lexibility, adaptability, and willingness to learn. To overcome the difficulties during the transformation, powetful tools are needed to manage the knowledge within the enterprise and to develop the 15 communication between the company and the customers. The key tool to be used within this process is XML, which will set the standards of communication and wm help to manage the knowledge [13]. To understand how XML will help us managing the knowledge, a def111ition of a knowledge-based business is needed. 4.2 Knowledge-Based Businesses The following six characteristics of knowledge-based business were defined in Davis and Botkin [14]. ~hese characteristics are actually guidelines for businesses to put their information to productive use. 4.2.1 The More You Use Knowledge-Based Offerings, The Smarter They Get This characteristic fits in the customer-defined offerings the companies give. For example, a credit card company can build a system that could understand the buying patterns of a customer that can protect the customer from fraud. A news agency can change the interface of its system to give the type of news that a newspaper or journal requests. Knowledge-based systems not only get smcuter but also enable their users to learn. For example, General Motors' computer-aided maintenance system not only helps novice mechanics to repair automobiles but also helps expe1t mechanics to refine their knowledge. As the technology advances, the amount of information that a mechanic needs to know expands rapidly. With tllis system a mechanic can leverage the knowledge of all mechanics using the system. As a result, the system continually improves, as does the service quality. 16 4.2.2 Knowledge-Based Products And Services Adjust To Changing Circumstances When knowledge is built into a product, the product may adjust itself in a smart manner to changing conditions. For example, a glass window that may reflect or transmit sunlight according to temperature is such a product. Producing tbese producl:s will not only be marketed well but also have important economical advantages. Tbe smart pr~ducts will guide their users as well. 4.2.3 Knowledge-Based Businesses Can Customize l1teir Offerings Knowledge-based products and servkes can determine customers' changing paltems, idiosyncrasies, and specific needs. For example, a smart telephony system can understand which language will be used on specific num bers~ also by using the voice recognition system, the need for telephone credit cards can be diminished. 4.2.4 Knowledge-Based Products A11d Services Have Relatively Short Life Cycles Many knowledge-based products have short life cycles, because they depend on the existing market conditions; their viability is short-lived. For example, the foreign exchange advisory services offered by a commercial bank are highly specialized and customized for corporate clients. Such services should be constantly upgraded to keep the profits and the proprietary edge. 4.2.5 Knowledge-Based Businesses Enable Customers To Act In Real Time Information becomes more valuable when it can be acted on constantly. A system that will deliver the tour book information while you are driving the car will have a great 17 value. An interactivity. added to the system will make the product's value even higher. Knowledge-based products can also act in real time. For example, a copier machine that calJs the maintenance provider when an error occurs wiJJ have a great value in this sense. 4.3 XML's Role in Business Applications The smallest cluster of knowledge is data. These are basic building blocks of information that come in four particular forms: numbers, words, sounds, and images. Manipulation of the data determines its value. The arrangement of data into meaningful patterns is information. For example, numbers can be arranged in tables, which is information; a series of sounds, which is music, can also be considered as information. Today, an important challenge for Internet-based businesses is using the information efficiently and in a productive way that will upgrade the information to knowledge. Thus, we say that knowledge is the application and productive use of information. The shift from the information to knowledge age will be via technology. The new enabling technologies of software development such as XML, J2EE, and Visual Studio are forcing e-businesses to build knowledge-based businesses. Here we will explain the most important enabling technology, XML, within the development of e~businesses. XML can be used effecti~ely for exchanging of business documents and information over the Internet. XML is a standard language that simultaneously presents content for display on the Intemet and describes the content so that other software can understand and use the data. Therefore XML can be a medium through which any business application can share documents, transactions, and workload with any other 18 business application [15]. In other words, XML can become the common language of ebusi. ness and knowledge management. One impmtant property of XML is providing .information about the meaning of the data. Thus, an XML-Jonnatted document could trigger a software application at a receiving company to launch an activity such as shipment loading. But to provide that level of data integration, trading partners would have to agree on definiti ons for the various types of documents as well as standard ways of doing business. In addition to facilitating e-commerce, having common defini tions and uses for data also enable an enterprise to better leverage the .knowledge ctmenrly stored in information silos. XML supports the searching and browsing of such information sHos [16]. It structures documents for granularity, such as alJowing access to sections within documents and fine-tuning retrieval Also, it annotates documents, which enables users to not restrict themselves to what is in the document. XML organizes documents by classifying documents into groups and supports browsing them. AdditionaiJy, it has Hyper Text Markup Language (HTML)-like linking options that help the information users to find the documents they arc seeking. Fig. I shows the tools that are common in the organization of information through XML. XML is the next evolution in knowledge management, and organizations are beginning to understand the potential of this technology to develop enterprise-wide information architectures. As a technology, XML does not bring any value to an organization. The value of XML wHI depend on how it js used within a company. The agreement on data definitions within an enterprise has always been a hard task. At rn.inlmum, XML should be implemented strategically within the organization. Ideally, the 19 Annotate Documents I RDF I Schemas J:: I XML I (.---, X-Poin- ter--, Fig. 1. Organization of information through XML. implementation should include strategic partners and other organizations that have a need to share data and information. XML is a majm advance in the standardization of information sharing across traditional information boundaries, both internal and external Information security and privacy issues are major concerns revolving around customer and corporate data flowing across wires. Successful knowledge management in a company often depends on having access to information outside the enterprise walls. XML can also be of value here by helping to improve the functioning of supply chains and the extranet. In conclusion, it becomes obvious that managing knowledge requires better tools. We need to create systems that manage documents, as people would do, and we know that better tools need better documents. Thus by building on a solid knowledge management strategy using XML, we believe an organization can gain competitive differentiation in the near future. 20 PART II INTERNET ENTERPRISE IMPLEMENTATION CONSIDERATIONS 1 INTRODUCTION In the first section of this module we introduced essential elements of enterprise engineering in abstract and general terms. Building on the notions explored in the first section, we will address here, specifics concerning designing and implementation of Internet enterprises. In this section, a review is provided of the key concepts and concerns an Internet enterprise engineering (IEE) project would encounter and need to address. Business engineering fundamentals, technologies, and strategies for the lrlternet such as Unified Modeling Language, Cosmos Model, Enterprise Maturity Model, Web Business . Models, Methods of Electronic Transaction, Online Contracts, Security Protocols, selected integrated development tools, Next Generation Internet, and Internet2 arc covered. Over 20 occupational roles within IEE are identified and described separately. A technology implementation platform and strategy are introduced, along with marketing and customer retention technologies and strategies on the Internet A detailed overview is provided of the various Internet business tools, technologies, and terminology for the systematic construction of new ventures on the Internet l7]. For convenience, all these issues are summarized in table fmm at the end of this section. 2 BUSINESS ENGINEERING FUNDAMENTALS 2.1 UML: Officially introduced in November 1997, UML has quickly become the standard modeling language for software development [6]. It bas a business model approach that provides a plan for engineering an orchestrated set of business functions. It 21 provjdes a framework by which business is to be performed, allowing for changes and various improvements in the process. The model is designed to be able to anticipate changes in business function in order to maintain an edge on the competition. One of the advantages of modeling in UML is that it can visually depict functions, relationships, and paradigms. UML is a recommended tool for business analysts to break down a large-scale business operation into its constituent parts. Capturing a business model in one diagram is not realistic, so it should be noted that a business model is actually composed of a number of different views. Each view is designed to capture a separate purpose or function without losing any important overall understanding of the business operation. A view is composed of a set of diagrams, each of which shows a specific aspect of the business structure. A diagram can show a structure or a kind of dynamic collaboration. The diagrams contain objects, processes, rules, goals, and visions as defined in the business analysis. Objects contain information about mechanisms in the business, and processes are functions that use objects to affect or produce other objects. Objectoriented techniques can be used to describe a business. There are similar concepts in business functions that mn parallel to object-oriented techniques of designconceptualization. Another advantage of UML is derived from the ability of business modelers and software developers to use the same conceplualization tools and techniques to achieve a common business end. Additionally, the power of UML is derived :from its ability to transcend tbe standard organizational chart [ 17]. 22 2.2 Cosmos Model: A generic approach for a business to manage change is through a holistic framework as described by Yeh in his three-dimensional model called Cosmos (Fig. 1). One of the important aspects of this model is that three dimensions exist interdependently because each dimension behaves as an enabler and an inhibitor to the other dimensions. The ";activity structure" dimension covers how work is structured in an organization, factoring in the steps and tasks that are taken to achieve an appropriate level of workflow. The ";infrastructure dimension" covers how resources are allocated and factors in the assets of an enterprise. The ";coordination dimension" covers how information is created, shared, and distributed. The cultural aspects of the enterprise are factored in here. The Cosmos model provides a conceptual space bounded by concrete factors for successfully navigating from one point of an organizational situation to another. Infrastructure Long-term vs. short-term objectives Activity Structure Stability vs. Flexibility Target Coordination Structure Modu]arity vs. Interconnectedness Fig. l. Cosmos model--holistic framework for managing change. [13) 23 The Cosmos model is an abstract tool for managers to guide their company along the best possible path. The trade-offs between the three dimensions at each point in the journey along the path are what the manager must determine to be most effective and best for the organization as a whole. In the case of work structure, there is an inherent tradeoff between stability and flexibility. In the case of a coordination structure, there is a tradeoff between strictly aligning of human resources with company objectives and providing each operating unit with sufficient autonomy. More autonomous organizations are generally organized with a greater degree of modularity, allowing for the ability to make rapid decisions by adapting to changing market conditions. In the case of infrastlucture, there is a trade-off between seeking short-term gain versus long-term gain. Overall, the Cosmos mode] provides an executive or project manager with another technique to visualize the overaJJ situation and path of an organization by laking into account the three dimensions that correspond to the three main forces that affect its future [ 18]. 2.3 Enterprise Maturity Model: In order to characterize a business in terms of its level of maturity, focus, activity, coordination, and infrastructure, please refer to Table l, provided by Yeh [18]. The table provides an overview of the various levels of enterprise maturity. 2.4 Web Business Models: Entrepreneurs who wish to start e-businesses need to be aware of e-business models and how to implement them effectively. The combination 24 of a company's policy, operations, technology, and ideology defines its business model. Table 2 describes in more detail the types of business models in existence today [6, 19]. 2.5 IVIethods of Elech·onic Transaction: There are various methods and mechanisms that merchants can collect income through electronic transactions. Table 3 provides the types of transactions covered such as credit card, e-walJets, debit cards, digital currency, peer-to-peer, smartcards, micro-payments, and e-billing [19]. 2.6 OnJine Contracts: An online contract can be accomplished throt1gh the use of a digital signature. Digital signatures are the electronic equivalent of written signatures. The Electronic Signatures in Global and National Commerce Act of 2000 (E-sign Bi11) recently passed into law were developed for use in public-key cryptography to solve the problems of authentication and integrity. The purpose of a digital signature is for electronic authorization. The U.S. government's digital authentication standard is called the Digital Signature Algorithm. The U.S. government also recently passed digitalsignature legislation that makes digital signatures as legally bindiqg as handwritten signatures. This legislation is designed to promote more activity in e-business by legitimizing online contractual agreements. 2.7 Security Protocols: Netscape Communkations developed the SSL protocol, developed as a non-proprietary protocol commonly used to secure communication on the Internet and the Web. SSL is designed to use public-key technology and digital 25 certificates to authenticate the server. in a transaction and to protect private information as it passes from one party to another over the Tnternet. SSL can effectively protect information as it is passes through the Internet but does not necessarily protect private information once stored on the merchant's server. An example of private information would be credit card numbers. When a merchant receives credit-card information with an order, the information is often decrypted and stored on the merchant's server until the order is placed. An insecure server wi th data that are not encrypted is vulnerable to unauthorized access by a third party to that information. SET protocol was developed by Visa International and MasterCard and was designed speci.tically to protect e-commerce payment transactions [20]. SET uses digital certificates to authenticate each party in an e-commerce transaction, including the customer, merchant, and the merchant's bank. In order for SET to work, merchants must have a digital certificate and special SET software to process transactions. Additionally, customers must have complementary digital certificate and digital walJet software. A digital wallet is similar to a real wallet to the extent that it stores credit (or debit) card information for multiple cards, as well as a digital certificate verifying the cardholder's identity. Digital wallets add convenience to online shopping because customers no longer need to re-enter their credit card information at each shopping site. 2.8 Integrated Tool Example: Drumbeat 2000: Macromedia Drumbeat 2000 is a tool capable of accepting and delivering complex infmmation and functionality through a web-interface [21]. The tool aids a visually skilled Web designer in competitively building a website without necessarily having to do any coding, which is useful in the 26 initial prolotyping phase. It is a tool that can interact with the back-end database with the ability to build a user-friendly client-side using Active Server Page (ASP) Web technology. ASP technology enables a real-time connection to the database, so any changes made to the database are immediately re flected on the client side. Macromedia D1umbeat 2000 claims to provide everything needed to build dynamic Web applications and online stores visually at a fraction of the typical development time and expense. The designers of Drumbeat 2000 also cl aim that the development environment can keep up with continuously evolving web technology, thus making it a future-oriented technology. 2.9 NGI: This initiatjve is a mulli-agency Federal research and development program began on October 1, 1997 with the participation of the following agencies: DARPA, DOE, NASA, NIH, NIST, and NSF (Table 4). These agencies arc charged with the responsibility of developing advanced networking technologies and revolutionary applications that require advanced networkjng. 2.10 Internet2: The Intemet2 is a consortium of over 180 uruversit ies leading the way towards a partnership with industry and government to develop advanced network applications and technologies in order to accelerate formation of a more advanced Internet. The primary goals of Internct2 are to create a leading edge network capability for the national research community, enable revolutionary Internet applications, and ensure the rapid transfer of new network services and applications to the broader Internet community. Through Intemet2 working groups and initiatives, Internet2 members are 27 collaborating on advanced app.lications, middleware, new networking capabilities, advanced network infrastructure, partnerships, and alliances [22). 3 OCCUPATIONAL ROLES IN illE In order to build, deploy, and maintain an Internet Enterprise, certain roles and positions most be filled for the organization to be effective. Table 5 lists and describes many of the relevant roles required within an enterprise initiative, such as Chief Privacy Officer (CPO), in addition to the more traditional organizational roles such as Chief Executive Ofilcer (CEO), Chief Technology Officer (CTO), and Chief Financial Officer (CFO) [20, 23]. 4 TECHNOLOGY IMPLEMENTATION AND STRATEGY 4.1 Microsoft Dotsmart Initiative: There are various approaches to imp.lementing strategic planning and technology implementations. For illustrative purposes, Microsoft is considered in this thesis to be one such approach for enterprise planning. Once the overall conceptualization and business pattern is created and a.ll the necessary occupational roles within the organization are identified, it is necessary to identify exactly which technology to utilize in order to build and implement the business venture. As the requirements of a business are analyzed, a useful guide is the Microsoft Dotsmarl Initiative. This mode of business analysis will help determine which business engineering concepts to use and what kinds of personnel are needed to 1un the operation. Additionally, the Microsoft Dotsmatt Initiative provides key points to address when building an Intemet operation from scratch. 28 4.2 Microsoft Technology Centers (MTCs): MTCs are areas designed for groups of entrepreneurs, Information Technology personnel, and businessmen for the rapid development. of robust e-commerce solutions. At these facilities, developers, entrepreneurs, and high-technology business persons use Microsoft Technology and the relevant knowledge to build enterprise solutions. The centers provide the essentials a team would need to develop an enterptise from the initial conception of the idea to launch. Microsoft provides essential equipment, support, and expe11ise, with an application of a ";best-practices" approach. These best practices have been tested before at MTCs, expediting the development progress and time to market. Laboratory sessions are designed to bring together an assortment of entrepreneurial individuals as they facilitate the development process using the latest Microsoft products. The MTCs offer customers wishing to capitalize on emerging Microsoft.NET technologies the service, infrastltlctme, and development environment to accelerate their projects and reduce thejr risk. The working laboratory is intended to help customers develop and test next-genera6on e-commerce technologies and demonstrate further the value of Windows platforms and other industry-standard systems for powering ebusiness. 4.3 Impact of XML: XML represents a more general way of defining text-based/ documents compared to Hypertext Markup Language (HTML). Both HTML and XML descend from Standard Generalized Markup Language (SGML). The greatest difference between HTML and XML is the flexibi lity of the allowable tag found in XML. An XMLbased document can define its own tags, in addition to including a set of tags defined by a 29 third-party. This ability may become very useful for those applications that need to deal with very complex data structures. An example of an XML-based language is the Wireless Markup Language (WML). WML essentially allows text pm1ions of Web pages to be displayed on wireless devices, such as cellular phones and personal digital assistants (PDAs). WML works with the Wireless AppHcation Protocol (W AP) to deliver this content. WML is similar to HTML but does not require input devi ces such as a keyboard or mouse for navigation. In the case of a PDA thal requests a Web page on the Intemet, a WAP gateway receives the request, translates it, and sends it to the appropriate Internet server. In response, the server replies by sending the requested WML document. The WAP gateway parses this document's WML and sends the proper text to the PDA. This introduces the element of device portability. 4.4 Microsoft.Net Initiative: Microsoft announced a new generation of software called Microsoft .NET. This software is intended to enable every developer, business, and consumer to benefit from the combination of a variety of new Internet devices and programmable Web services that characte1ize NGI. Microsoft is trying to create an advanced new generation of software that wiiJ drive NGI. This initiative is called Microsoft.NET and it.s key purpose is to make information available at any time, in any place, and on any device. 4.5 Microsoft BizTalk 0 1·chestration: For IEE purposes, BizTalk Server 2000 is the considered a nex t-generation software that plays an important role in forming the infrastructure and tools for building successful e-commerce communities. The core of 30 BizTalk Server offers business document routing, transformation, and tracking infras tructure that is mles based. BizTalk Server offers many services that allow for quickly building dynamic business processes for smooth integration of applications and business partners while utilizing pubJic standards to ensure interoperability. Essentially, BizTalk server provides a method to build dynamic business processes quickly. 4.6 Back-end Configurations Using Microsoft Technology: In the design of the backend of a website, special considerations must be given to security. This is done by providing a kind of safety buffer from the greater world of the Internet using a demiUtarized-zone (DMZ) strategy. The components of a DMZ such as the firewall, the front-end network, the back-end nelwork, and the secure network function as a security buffer from the outside world. 4.7 Rapid Economic Justification (RE.fl: The REJ framework makes it possible for IT and business executives to demonstrate how specific investments in IT will eventually benefit the business, ensuring in the process that the IT projects are aligned with the specific business strategies and priorities. IT investments play a critical role in Internet enterprises. Important decision-making at the early stages of any venture does require an effective methodology to identify the best strategic IT investments. Leaders in the upper echelon of organizations such as CEOs, CTOs, and CFOs are being overwhelmed with complex information. REJ may prove to be a reliable method to quickly evaluate the true value worth and potential of a company by taking into consideration its intangible IT assets. 31 In the past, companies developed metrics for the valuation of IT investments on the basis of cost improvements. Metric methodologies have focused on Total Cost of Ownership (TCO), whereas the strategic role of IT in boosting new opportunities for business has been largely ignored. Understandably, the benefits of IT can be traced to ways of measuring business value the traditional way. Unfortunately, current business practices are not necessarily adequately equipped to handle the complexities of the New Economy. Although the economic justification of IT projects has been researched extensively in the past decade, the problem is that these metiJods and techniques require too much data-crunching power and time to prepare. These unwieldy research techniques need to be replaced by a new and practical approach to quantify swiftly and accurately the true value of IT investments. 5 MARKETING AND CUSTOMER RETENTION 5.1 Online Marketing: The Internet provides marketers with new tools and convenience that can considerably increase the success of their marketing efforts. An Internet marketing campaign such as advertising, promotions, public relations, partnering and Customer Relationship Management (CRM) systems are all an integral prut of the marketing process. Table 6 describes the various techniques at the marketer's disposal when using the Internet as the medium of customer information delivery [19]. 5.2 CRM Systems: CRM is a general but systematic methodology using both business and technological techniques to maintain and grow a business's customer base. CRM systems enable a business to keep detaj led records on the activity of its c ustomers 32 by using new, sophisticated tracking systems on the Internet. Table 7 shows various areas where CRM technology and CRM business techniques can assist in managing a customer base [19]. 5.3 Web Design Technology Example: Dreamweaver Technology: Macromedia Dreamweaver is Web technology for building websites on the Internet without the need for programming directly in HTivlL [21]. Also, Web designers are easily able to create Web-based leaming content with Dreamweaver 4.0. A Web designer has the ability to create site maps of the website that can be easily maintained and enhanced. This is a very popular technology available on the market that can be used to make professional quality websites for marketing and promotional purposes. 5.4 Web Enhancement Technology Example: Flash Technology: Macromedia Flash is a multimedia technology for applications on the Web. This technology gives the user, especially one not artistically talented, the ability to develop interactive animations that can look quite impressive. A flash movie can be embedded into a Web site or run as a standalone program, and Flash is compatible with Dreamweaver. Flash movies can be made with sound and animation, so it is useful as a software tool to produce demonstrations at the user-interface. Flash can be used on CD-ROMs and allows for the construction of cross-platform audio/video animations and still jmages. 33 \ 6 SUMI\-IARY TABLES We would like to reiterate emphasis areas for Electronic Enterprise as listed in the introduction of this module. These are a) hardware (mechanisms associated with physical world), b) software (mechanisms associated with computational world), c) netware (mechanisms associated with communications), and d) peopleware (mechanisms associated with human element) [23, 24]. Following tables provide a useful Jist in all these areas. For convenience, we include all summary tables in following order: Table 1 Enterprise Maturity Levels Table 2 Web Business Models Table 3 Electronic Transactions Table 4 NGI Participating Agencies Table 5 Occupational Roles in lEE Table 6 Marketing Techniques on the Internet Table 7 Customer Relationship Management 34 Table 1 Enterprise Maturity Levels Levels Focus Activity Coordination Infrastructure 5. Whole Human-society Process Self-directed teams Long-term oriented; in engineering dominate orientation, harmony with methodology workplace; toLal personal mastery, nature, people institutionalized; alignment; open, heavy investments routinely do the Flexible and honest in IT, continuous right things: predictable communication improvement change is second process, right the channels institutionalized nature first time, value- throughout adderl activities only 4. Wise Stakeholders and Process monitored Organjzational Organi:z.ation community automatically for structure based on competency oriented in high performance; cross-trained case management; harmony with dominated by teams; vision continuing community; value-added al igned with the education; team-people routinely activities; high needs of the based structure; doing things right. degrl:e of society tenm-oriented HR Changes are concurrency; few policy planned and handoffs mannged 3. Mature Customer oriented; Process defined Vision defined Integrated customer's needs and is measured with extensive capacity, are anticipated; buy-ins, multi- con sol ida ted people are proud to functional project function; work here teams exist; investment in participatory training and work culture with force planning; managers as flattened coaches organization 2. Stable Competition- Process under Internal focus, Short-term focus, oriented reactive statistical control; control oriented, fragmented bench-marking as functional division capacity, little IT, a result of reaction, hierarchical, inflexible process, difficult to get has many information, no handoffs and a formal HR policy substantial number of non-value-added tasks I . Ignorant Disoriented- Fire-fighting Ad- No clear vision, Don' t know where chaotic hoc, unpredictable, resources exist fragmented Rumor mill rampant 35 e-Business Model Storefront Model Auction Model Portal Model Dynamic Pricing Model Comparison Pricing Model Demand-Sensitive Pricing Model Table 2 Web Business Models Description The~ storefront model is what many persons think of when they bear the word ebusiness. The storefront model combines transaction processing, security, online payment and information storage to enable merchants to sell their products on lhe web. This is a basic form of e-commcrce where the buyer and seller interact directly. To conduct storefront c-commerce, merchants need to organize an online catalog of products, take orders through their Web sites, accept pnyments in a secure envi ronment, send merchandise to customers, and manage customer data. One of the most commonly used e-commercc enablers is the shopping cart. This order-processing technology allows customers to accumulate items they wish to buy as they continue to shop. www.amazon.com is a good example. Forrester Research reveals that an estimated $3.8 billion will be spent on online person-to-person auctions in the year 2000 alone. This number is expected to rise to $52 billion for Business-to-Business (B2B) auctions. Usually auction sites act as forums through which Internet users can log-on and assume the role of either bidder or seller. As a seller, you are able to post an item you wish to sell, the minimum price you require to sell it, your item, and a deadline to close the auction. As a bidder, you may search the site for availability of the item you are seeking, view lhe current bidding activity and place a bid. They usually do not involve themselves in payment and delivery. www.ebay.com is a good example. Portal sites give visitors the chance to find almost everything they are looking for in one place. They often offer news, sports, and weather, as weU as the ability to search the Web. Search engines are h01i zontal portals, or portals that aggregate information on a broad range of topics. Yahoo! at www.yahoo.com is an example of a horizontal portal. America Online (AOL) www.aol.com is an example of a vertical portal because it is a community-based site. The Web has changed the way business is done and the way products are priced. Companies such as Priceline (www.pricelinc.com) and Imandi (www.imandi.com) have enabled customers to name their prices for travel, homes, automobiles, and consumer goods. The name-your-price model empowers customers by allowing them to choose their price for products and services. The comparison pricing model allows customers to polJ a variety of merchants and find a desired product or service at the lowest price (i.e. www.bottomdollar.com). The Web has enabled customers to demand bener, faster service at cheaper prices. It has also empowered buyers to shop in large groups to achieve a group rate (i.e., www.rnercata.com). Customers become loyal to Mercata because it helps them save money. 36 e-Business Model Bartering Model Advertising Model Procurement Model B2B Service Provider Model · Online Trading Model Online Lending Model Online Recruiting Model Online Travel Service Model TabJe 2 (Continued) Description A popular method of conducting e-business is bartering, offering one item in exchange for anotiier. If a business is looking to get rid of an overstocked product, iSolve ~isolve.com) can help sell it PotenHal customers send their pricing pre ferences to the merchant who evaluates the offer. Deals are often part barter and part cash. Examples of items typically bartered are overstocked inventory items, factory surplus, and unneeded assets. Forming business models around advertising-driven revenue streams is the advertising model. Television networks, radio stations, magazines, and print media usc advertising to fund their operations and make a profit. www.Iwon.com is a portal site that rewards users with raffle points as they browse the site's content. www.freemerchant.com offers free hosting, a free store builder, a free shopping cart, free traffic logs, free auction tools and all the necessary elements for running an e-commerce storefront. Frccmerchanl makes money from its strategic partnerships and referrals. The procurement model means acquiring goods and services with effective supply chain management via a B2B Exchange. ICG Commerce Systems (www.icgcommerce.com) is a site that enables businesses, customers, suppliers, purchasers, and any combination of these to interact and conduct transactions over the Internet. The system supports B2B, B2C, and all variations of these models. · B2B service providers make B2B transactions on the Internet easier. These e-businesscs help other businesses improve policies, procedures, customer service, and general operations. Ariba (www.ariba.com) is a B2B service provider. The online trading model is essentially securities trading on the Internet. Trading sites allow you to research securities and to buy, sell, and manage all of your investments from your desktop; they usually cost less. Charles Schwab (www.schwab.com) is a notable example. Companies are now making loans online. E-loan (www.eloan.com) offers creditcard services, home equity loans, and the tools and calculators to help you make educated borrowing decisions. Recruiting and job searching can be done effectively on the Web whether you are an employer or a job seeker. Refer.com (www.refer.com) rewards visitors for successful job referrals. Web surfers can search for and arrange for all their travel and accommodations online, and can often save money doing so. Cheaptickets (www.cheaptic kets.com) .is a similar site that helps customers find discount fares for airl.ine tickets, hotel rooms, cruise vacations and rental cars. 37 e-Business Model Online Entertainment Model Energy Distribution Model Braintrust Model Online Learning Model Click-and-Mortar Model Table 2 (Continued) Description The entertainment industry has recognized this and has leveraged its power to sell movie tickets, albums and any other entertainment-related content they can fit on a Web page. ICast.corn (www.icast.com) is a multimedia-rich entertainment site. A number of companies have set up energy exchanges where buyers and sellers come together to corrununicate, buy, sell, and distribute energy. These companies sell crude oil, electricity, and the products and systems for distributing them. Altranet (_www.altranet.com) also sells energy commodities. Companies can buy patents and other intellectual property online. Yet2 (www.yct2.com) is an e-business designed to help companies raise capital by selling intellectuaJ property such as patents and trademarks. Universities and corporate-training companies offer high-quality distance education directly over the Web. Click2learn ~www.click2 1earn.com) has created a database of products and services to elp mdtvtdunls and companies fi.nd the education they need. Brick-and-mortar companies who wish to bring their businesses to the Web must determine the level of cooperation and integration the two separate entities will share. A company that can offer its services both offline and o nline is called click-and-mortar, such as Barnes & Noble (www.bn.com). 38 Electronic Transaction T e Credit Card Transactions E-wallets Debit cards Digital Currency Table 3 Electronic Transactions Descrjption Merchant must have a merchant. account with a bank. Specialized Internet merchant accounts have been established to handle online credit card transactions. These transactions are processed by banks or third-party services. To faci litate the credit card process, many companies are introducing electronic wallet services. E-wallets allow you to keep track of your billing and shipping information so it can be entered with one click. Banks and businesses are also creating options for online payment that do not involve credit cards. There are many forms of digital currency; digital cash is one example. It is stored electronically and can be used to make online electronic payments. Digjtal cash is often used with other payment technologies such as digital wallets. Digital cash allows people who do not have credit cards to shop online, and merchants accepting digital-cash payments avoid creditcard transaction fees. 39 Examples Companies like Cybercnsh (www.cybercash.com) and ICat (www.icat.com) enable merchants to accept credit card payments online like www.Charge.com. www. visa.com offers a variety of ewallets. Entrypoint.com offers a free, personalized desktop toolbar that includes an e-wallct to facltitate one click shopping at its affiliate stores. In order to standardize e-wallet technology and gain wider acceptance among vendors, Visa, Mastercard, and a group of e-wallet vendors have standardized the technology with the Electronic Commerce Modeling Language (ECML), unveiled in June 1999 and adopted by many online vendors. Companies such as AroeriNet allow merchants to accept a customer's checking-account number as a valid form of payment. AmeriNet provides authorization and account settlement, handles distribution and shipping (fulfi11ment), and manages customer service inquiries. E-Cash Technologies (www.ccas.b.com) is a secure digitalcash provider that allows you to withdraw funds from your traditional bank account. Gift cash is another form of digital currency that can be redeemed at leading shopping sites. Web. Flooz (www.Jlooz.wm) is an example of gift currency. Some companies offer points-based rewards. www.beenz.com is an international, points-based currency system. Electronic Transaction Peer-to-peer Smart Cards Micropaymenls Table 3 (Continued) Description Peer-to-peer transactions allow online monetary transfers between consumers. A card with a computer chip embedded on its face is able to hold more information than an ordinary credit card with a magnetic strip. There are contact and contactless smartcards. Similar to smart cards, ATM cards can be used to make purchases over the Internet. Merchants must pay for each credit card transaction that is processed. The cost of some items could be lower than the standard transaction fees, causing merchants to incur losses. Micropayments, or payments that generally do not exceed $10.00, offer a way for companies offering nominal.ly priced products and services to generate a profit. 40 Examples cCash runs a peer-to-peer payment services that allows the transfer of digital cash via email between two people who have accounts at eCashcnablcd banks. Pay Pal offers a digital payment system known as X payments. PayPal allows a user to send money to anyone with an email nddress, regardless of what bank either person uses or whether the recipient is pre-registered with the service. EConnect has technology in the form of a device that connects to your computer and scrambles financial data, making it secure to send the data over the Internet. EpocketPay is another product developed by eConnect that allows a consumer to make secure purchases from the ePocketPay portable device. This device acts as a cell phone with a card reader built into it and will allow you to make secure purchases anywhere. Millicent js a micropayment technology provider. Millicent handles all of the payment processing needed for the operation of an e-busi ness, customer support, and distribution services. Millicent's services are especially useful to companies that offer subscription fees and small pay-per-download fees for digjtal content. c-Billi ng Electronic llill Presentment and payment (EllPP) offers the ability to present a company's bill on multiple platforms online. Payments arc generally electronic transfers from consumer checking accounts. 41 The Automated Clearing House (ACH) is the current method for processing electronic monetary transfers. Table4 NGI Participating Agencies _A~c~ro~t~1Y~n_l_ _~ E_x~p_a_n_si~n --- ~ --- ~--~ --- DARPA Defense Advnnced Research Projects Agency DOE Department of Energy (beg inning in PY 1999) NASA National Aeronautics and Space Administration NIH National Insti tutes of Health NIST National Institute of Standards and Tec hnology NSF National Science Foundation 42 Occupation Entrepreneur e-Commerce Program Manager Enterprise Architect Business and Infonnation Architect Table 5 Occupational Roles in illE Descdptjon An entrepreneur on the Internet is usually the person with the initial idea for the entire business and is involved in its early stages of inception before official management takes over. e-Commerce Program Managers are involved in enterprise-wide ecommerce initiatives and projects, managing e-cornmerce integration and overall business and technology architecture and infrastn1cture. Usually, they arc senior-level line managers who are effective at uniting the business and technology front by coordinating units within an organization and across the extended enterprise. Enterprise Arc hitects are involved in the definition, alignment, and refinement of the overall ente rprise architecture. Their responsibilities include seeing to it that many of the tasks of program management are can·ied out properly. More important, they must provide guidance so individual projects can make optimal use of infrastructure resources for e-Cornmerce. A balancing act between business requirements and tcchnologicnl capabilities is accomplished through their efforts . Enterprise Architects have a duty to identify the requirements, goals, and constraints of the project. They allocate responsibilities for each of the architectural elements. They are also responsible for lhe coordination of the modeling and design activities for the overall enterprise architecture. They are the chief e-commerce architects because they coordinate the work information, infrastructure and application architects. All architects and modelers should be completely capable in design patterns common to the many facets of business and technology. The design pattern movement has affected all aspects of analysis, design, and implementation of componentbased systems. Design patterns are the reusable material of architecture and have an important role in the complex distributed information systems lhat are conceived and developed today. Business and Information Architects have business domain knowledge, including business processes and logical information structures. They coordinate the work of business and technology analysts and modelers who develop abstract representations or business object models of the subjects, rules, roles, events, tasks, activities, and policies of the business domain. Application-neutral models that are built enable the reuse of business engineering analysis and design patterns and artifacts 43 Occupation Infrastructure Architect Application Architect Humru1 Factors Engineer Business Manager Internet Commerce Architect Table 5 (Continued) Description Infrastructure Architects identify the technical services required of the technology infrastructure to empower and support the logical busi ness and information architecture. They evaluate existing infrastructure services, s\~l ect those appropriate to a given project and acquire (via build or buy) new components needed in the infrastructure. They oversee the work of technical specialists in modeling the service architecture of the technical infrastmcturc. They maintain the technical components of the development repository. Application Architects coordinate the business process modeling activities across multiple projects and business domains. They coordinate the work of domain modelers and maintain the repository of business and component models. They evaluate existing business component services, sclectthose appropriate to a given project and (via build or buy) new components needed in the evolving business model. They maintain the business application components of thC development repository. Most importantly. tl1ey guide solution developers in blending the business object model with the infrastruchJre services needed to implement the models in an e~com merce platform. Human Factors Engineers are needed to design the next generation of user interfaces. While the graphical user Interface (GUD is recognized as the enabler of wide-spread personnl computing, task centered user interfaces provide assistance to end-users and can be a boon to productivity in the world of e-commerce. E-commerce transactions can involve a multitude of complex steps and processes. Well-designed user interfaces can help navigate and guide the user through these tasks, keeping track of the progress, and picking up where users leave off when transactions span multiple sessions of work. The Business Manager is responsible for the business approach on the Internet, creating and operating the Internet presence for the business, deciding what products and services are sold online, determining pricing, and establishing the key business relationships needed lo make a venture successful. This is primarily a business role, with particular attention paid to the success of the online business and bottom line. The Internet Commerce Architect is generally a systems analyst who turns the business requirements into a system design that incorporates the creation and management of content, the tnmsaction processing, fulfillment, and technical aspects of customer service 44 Occupation Solution Developer Content Designer Content Author Implementor Database Administrator Internet Sales and Marketing Customer Service Representative T~lble 5 (Continued) Description Solution Developers are application developers. They develop the use cases for the specific application at hand, compose solutions through extensive use of business object models, and use repositories. They assemble application components to implement c-commercc application. Unlike conventional programmers or programmer/analysts, they do not build or pmgram components. Instead, they assemble or glue together business solut ions from prefabricated components. They use highly integrated development environments (IDEs) such as IBM's VisuaiAge, Symantec's Visual Caf6, Sybase's PowcrJ, and Inprise's Jbuilder. Emerging Computer Assisted Software Engineering (CASE) tools and related methods will likely appear that tighten the link between business modeling and software development. Tools for understanding and managing business processes, such as Inte11icorp's LiveModel allows solution developers to build logical business that can automate the configuration and management of the SAP/R3 ERP system. The Content Designer is responsible for the look and feel of an Internet commerce system, including the graphic design, page layout, and user experience. The Content Author creates or adapts product information into a form that can be used for internet commerce, working within the design laid out by the content designer. The Impleme::ntor is responsible for creating any programs or software extensions needed to make the Internet commerce system work. For example, an Implementor might write the software or construct an ASP page using Drumbeat 2000 that takes product information from a database and dynamically renders it into a Web page. In the case that a database is used in the back-end, the Database Administrator (DBA) manages the creation and operation of the database to ensure its reliability, integrity, and performance. The Sales and Marketing team is responsible for focused efforts in promoting Internet-based commerce. Customer Service Representatives answer questions about products, assist buyers with registration or the purchasing of goods and services. 45 Occupation Component Developer Operations Manager System Supervisor System Administrator Security Officer Fulfillment Agent CPO Internet Lawyer Internet Accountant Table 5 (Continued) Description Component Developers usually build components in the form of coding projects. They are masters of component technology and know the intricacies of composition, delegation, and object-oriented systems analysis and design. They are proficient in component development languages (such as Java and C++), modeling standards (such as UMLand XMI), and distributed computing platforms (such as CORBA, DCOM, EJB). They understand and think in terms of architectural design patterns. In the meanti me, they will close the gap between business requirements and available components. Component developers must be highly qualified software engineers since quality'components do not just happen. They are carefully constructed using quality soflware engineering disciplines. Component Developers, therefore, must be highly trained specialists and masters of software quality processes such as CMM and ISO, as well as masters of component-based development methods. The Operations Manager is responsible for managing all service activities for the Internet commerce system. The System Supervisor manages the system staff. The System Administrator is responsible for the technical operations of the computer systems and networks. The Security Officer ensures that appropriate security measures have been taken in the design and implementation of the Internet commerce system. The Fulfillment Agent is responsible for shipping and handling of physical goods or delivery of services. In the case of digital goods, the fulfillment agent is responsible for overseeing the operation of the fulfillment system. The Chief Privacy Officer is io charge of measures for ensuring the security of vital company information, such as customer credit card numbers remains secure within the company network. An Internet Lawyer is a legal expert for Internet fu nctions. The .importance of this position cannot be overstated, because new laws and regulations could ki ll a company without legal assistance, prevention, or intervention. The Internet Accountant is responsible for ensuring that the proper accounting procedures have been followed for Internet-based transactions. 46 Technique Domain name FAQ Forum Networking Faci litation Promotions c-Business advertising Pay-per-click Pay-per-lead Pay-per-sale Webcasting Interactive Advertising Public Relations and press releases Trade shows Table 6 Marketing Techniques on the Internet Description The Universal Resource Locator (URL) represents the address of the domain name, which must be chosen with care because it reflects the company's values immediately and connotes immediate meaning to customers with its first impression. One can purchose a domain name at www.networksolutions.com. A frequently asked questions (FAQ) section contributes to a userfiiendly site. An onli ne forum on the website enables customers to congregate at a pre-de~ign at cd place on the site to post comments and to share ideas. This promotes site activi ty. It is important to make it easy for the customer to recommend a site to a friend. This can be accomplished with a quick button that brings up an email exchange. c-Business promotions can attract visitors to your s ite and can influence purchasing. Netcenlives.com is a company that can provide your business with customer reward programs. P ublicizing through traditional channels such as television slots, movies, newspapers, and magazines is effective. Pay-per-click is a mode of operation that calls for paying the host according to the number of click-throughs to a site. Pay-per-lead is a mode of operation that pays the host for every lead generated from the advertisement. Pay-per-sale is a mode of operation that pays the host for every sale resulting from a click through. Webcasting is a broadcasting technique on the Web that uses streaming media to broadcast an event over the Web. Interactive Advertising involves consumers in the advertising campaign. An example is WebRIOT, a game show on MTV. The game is aired on television, and viewers can join in the game at the same time by playing online. Public Relations (PR) and press releases keep customers and your company's employees current on the latest information about products, services, and intemal and external issues such as company promotions and consumer reactions. Trade shows arc excellent opportunities to generate site interest by speaking at conferences, which increases brand awareness 47 Table 7 Customer Relationship Management CR.M:Area Handling Sales tracking Transaction support Data-mining Call center Log-file analysis Cookie Customer registrntion Personalization One-to-one marketing Onsite Search engine Registering with Internet search engines Partnering Afffiiate Programs Culture management Description Handling is essentially the maintenance of out-bound and in-bound calls from customers and service representatives. Sales tracking is the process of tracing and recording all sales made. Transaction support entails technology and personnel used for conducting transactions. Data-mini ng is a wny to analyze information collected from visitors. Data-mining uses algorithms and statistical tools to find patterns in data gathered from customer visits. A call center gathers customer-service representatives who can be reached by an 800 number or through email, online text chatting, or real-time voice communications. A log-file analysis is a useful way to keep track of your visitors in tenns of site visits, including each visitor's location, IP address, time of visit, frequency of visits, and other key indicators. A cookie is a technology that keeps a profile on each visitor. Customer registration is an excellent method to create customer profiles because visitors fi ll out a form with personal information. Personalization technology can help a company understand the needs of its customers and the effectiveness of its website, thereby catering to the whims of the customer. One-to-one marketing such as e-mails confirms purchases and offers new products, showing customers that the business appreciates their patronage. Onsite Search engines allow people to find information relative to a subject of interest amidst the large amounts of information available on a personal website. Registering with Internet search engines is important because there are reportedly over 400 se::arch engines in usc on the Internet. This process makes a website known to the world by submitting the website as a searchable domain name in a sea of domain names. Partncring is a way of forming a strategic union with another company. Generally, legal contracts are usually written to define the relationship in a wf'ly to help a company provide customers with complimentary services and product<;. An Affiliate Program is an agreement between two parties that one will pay the other a commission based on a designated consumer action. Affi liate programs establish new income streams for companies and individuals that host the advertising affili ate websites. Culture management is the ability to understand and cater lo a target audience's patronage and culture, especially in global enterprises. 48 LIST OF REFERENCES [1] 0. Aktunc, ";The Role of Component Technologies on Enterprise Engineering,"; Masters Thesis, Department of Electrical and Computer Engineering, University of Alabama at Birmingham, 2002. [2] D.H. Liles, M.E. Johnson, L.M. Meade, and D.R. Underdown, ";Enterprise Engineering: A Discipline?"; Society for Ente1prise Engineering Conference Proceedings, June 1995. [3] L. Whitman, Enterprise Engineeiing IE8801 class webpage, http://webs.twsu. edu/enteng, 2002. [4] W.D. Barnett and M.K. 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Smirnov, ";Ontology-Driven Knowledge Integration for Consumer-Focused Smart Companies,"; Proceedings of the Twelfth Annual Conference of the Production and Operations Management Society, POM-2001, Orlando FL, 2001. [12] G.J. Cross, ";Now e-Business is Transforming Supply Chain Management,"; Journal of Business Strategy, March/April, pp. 36-39, 2000. [13] S. Chincholikar, 0. Aktunc, and M.M. Tanik, ";TheN-Queens Test-Bed,"; Technical Report 2001-1 0-ECE-0 11, Department of Electrical and Computer Engineering, University of Alabama at Birmingham, 2001. [14] S. Davis and J. Botkin, ";The Coming of Knowledge-Bases Business,"; D. Tapscott, eds., Creating Value in the Network Economy, Boston: Harvard Business School Publishing, 1999. 49
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ABSTRACTThis study offers a comprehensive overview of the Norwegian involvement in the Venezuelan peace process as a facilitator of the peace talks between the Venezuelan government and the opposition. It explains what Norway does as a facilitator (the process), as well as how (approach) and why (characteristics of Norway as a suitable mediator, and possible interests), not only in terms of the characteristics making Norway a suitable facilitator, but also its interests and motivations. The main goal is to draw attention to the importance and the usefulness of soft power tools for the achievement of foreign policy objectives and, in particular, peace-making. The study concludes that, for Norway, mediation as foreign policy is, in general but also in the case of Venezuela, the result of a combination of idealist, value-oriented motivations (humanitarian reasons and international stability), and realist, non-altruistic interests (status and access) arising from its constructed national identity and role conception. 1. INTRODUCTIONSince the early 2010s, Venezuela has been embroiled in a grave economic, political, and humanitarian crisis resulting in institutional disarray that reached critical point in 2017. It was in this year that the constitutional order was broken after Decision 156 of the Supreme Tribunal of Justice in Venezuela, whereby this organ attributed to itself the functions of the National Assembly, the country's legislative organ. Deemed unconstitutional by the political parties with a majority in the National Assembly, this move led to mass protests. The government reacted by calling for a new constitution to be drafted by a newly created Constituent National Assembly which, in August 2017, granted itself powers to pass legislation, thus overriding the National Assembly (Bronstein & Cobb, 2017). This was not recognised by the National Assembly but, in 2018, the Constituent National Assembly went ahead and blocked the participation of the main opposition parties in the presidential elections that year. These elections were rejected by a broad sector of the international community, among them the European Union (EU) and the Lima Group.1From 2017, Norway, with a population of just 5.5 million, has been exploring possibilities in Venezuela for political dialogue between the government of Nicolás Maduro and the opposition, first through the Norwegian Centre for Conflict Resolution (NOREF), an independent foundation that receives funding from the Norwegian Ministry of Foreign Affairs (MFA), and later, after 2019, with direct state involvement. Norway has built an image as a peace broker with its success in processes like the Oslo Accords between Israel and the Palestine Liberation Organisation (PLO), and in the talks between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC). But why did Norway decide to facilitate the peace talks in Venezuela? How does Norway approach peacebuilding in this conflict? This article aims to analyse the causes, process, approaches, and motivations for Norwegian mediation in Venezuela, in order to draw attention to the importance and the usefulness of soft power tools for the achievement of foreign policy objectives and, in particular, peace-making. I therefore explore the comprehensive role of Norway in the Venezuelan peace talks, the background, the process, and Norway's possible interests as a facilitator. I argue that,for Norway, mediation as foreign policy is, in general, but also in the case of Venezuela, the result of a combination of idealist, value-oriented motivations (humanitarian reasons and international stability), and realist, non-altruistic interests (status and access) arising from its constructed national identity and the way it perceives its role as a peace-making nation. As mentioned above, the Norwegian state became officially involved in the Venezuelan conflict in 2019. The domestic situation had come to a head on 23rd January when Juan Guaidó, leader of the opposition and president of the National Assembly, rejected the authority of Nicolás Maduro and declared himself acting president of Venezuela. However, the strategy failed when the military remained loyal to Maduro. Negotiation then became a last resort (NUPI 2020) and Norway began to facilitate negotiations between government and opposition, first in Oslo and then in Barbados, in 2019. These efforts led to further discussion between the parties through 2021 and 2022, in Mexico. In 2022, the war in Ukraine prompted changes in the positions regarding Venezuela of certain actors, notable among them the United States (U.S.) and the EU. As the Spanish Institute of Strategic Studies (Remacha, 2023) points out, U.S. concerns about energy security made it necessary to find a way of guaranteeing the international supply, and Venezuela was (and is) considered to be a strategic source. Contacts between the U.S. and Venezuela were made in 2022, and talks began about removing the sanctions imposed on the country. Given its economic situation, and the presidential elections due in 2024, Venezuela welcomed the rapprochement. If the sanctions were to be removed (at least partially), it was necessary to resume dialogue with the opposition, so in November 2022, negotiations recommenced in Mexico with Norway's mediation. Significant progress was made, and the release of previously frozen international funds was agreed upon (up to 3,000 million dollars earmarked mainly for public health, education, and food), as well as the lifting of some sanctions. Maduro's government is also aware that the 2024 elections should be held according to a model that respects democratic safeguards, with unrestricted participation by the opposition, so that results will be internationally recognised. Venezuela would then be able to resume relations with countries and regions like the U.S. and the EU, thus enabling international investment, particularly in the oil industry, and an improved economic situation (NUPI, 2020). Although the presidential crisis formally lasted until 5th January 2023 when Guaidó's acting presidency was abolished by the National Assembly, the political crisis with the opposition continues to the present day, in November 2023. 1.2. Research goals and objectivesThis study aims to explore the role of Norway as a facilitator in the Venezuelan peace talks, focusing on what it does (the process), how (approach), and why (characteristics of Norway as a suitable mediator, and possible interests). It seeks to demonstrate that, given Norway's national conception as a peacemaker, its strategy in Venezuela expresses a broad foreign policy endeavour that has humanitarian but also reputational and political motivations. More broadly, the importance of soft power tools for state actors to achieve their foreign policy objectives is discussed. Constructivism and Holsti's theory of National Role Conceptions (NRC) help to explain Norway's self-image as a peacemaker, while idealism and realism, together with Touval's "mediation as foreign policy" theory shed light on Norway's use of mediation as a foreign policy tool. Qualitative methods based on analysis of primary and secondary sources, complemented with semi-structured interviews with experts and officials of the Norwegian Ministry of Foreign Affairs, have been used. 1.3. Relevance and justificationNorway is a small country in terms of population but one with a notable ability to influence international affairs thanks to soft power. One of ways it exercises its influence is its internationally recognised image as a peacemaker, evidenced through its involvement in several peace processes. Indeed, since 1993, Norway has been engaged in 11 different peace processes (Norwegian Ministry of Foreign Affairs, 2019) with some major successes but also others that were limited. The case of Norwegian facilitation of the Venezuelan peace talks is studied for two main reasons. First, is its relevance in terms of policy significance, as it is an ongoing process, which leads to questions about why Norway acts as a facilitator, and the possible interests it has in doing so, apart from the goal of peace itself. Second, is the practical reason of the author's knowledge of the three languages relevant for this research (English, Spanish, and Norwegian), which is a valuable asset in terms of good understanding of the information from primary and secondary sources written in the three languages. This is an advantage in the research, as it allows cross-checking of information, and offers a broader perspective on the topic. 2. NORWAY AS A PEACEBUILDING NATIONScholars offer several explanations of Norway's involvement in peace processes arising from international conflicts. The result of a pragmatic foreign policy, it combines idealist and realist elements in a seemingly contradictory policy which, in fact, accommodates different domestic interests and maintains inter-party foreign policy consensus (Riste, 2001; Ekengren, 2022).From a constructivist perspective, the notion of Norway as a nation for peace partly comes from its conception of its role as a small, rich, peaceful state, with a clear focus on human rights and humanitarian assistance (Leira et al., 2007). While it is true that the so-called value-oriented (idealist) diplomacy wasstrengthened, above all in the 1990s, with the increased involvement of Norway in several peace processes, its self-image as a peacebuilding nation has always been present (Leira, 2015). The Norwegian peace activist and later Foreign Affairs Minister, Halvdan Koht (1873-1965), argued in 1902 that, although the fact of its being a small state could limit its flexibility in foreign policy actions, Norway could and should secure its status by promoting peace and development. More than 80 years later, in 1989, Jan Egeland, who would become State Secretary in the Norwegian Ministry of Foreign Affairs from 1990 to 1997, argued that a small, rich country like Norway could be more effective in promoting human rights and peace than old colonial powers or superpowers with their historical baggage and policies based on self-interest and dominance (Sørbø, 2018).Moreover, the notion of status, which is closely linked with the concept of identity, has been prominent in Norway since the nation's beginnings. Leira (2015) describes the pursuit of status as a peace-making nation in the 19th and early 20th century as a way of achieving independence (through moral authority), a means of saving money (as the policy for peace was cheaper than power politics), and as sound realpolitik for a small state. He also refers to the words of Ole Jacob Broch in 1864 when he argued that, when small states need to "engage in the strife of other states", they should do it decisively because, "for them, honour and prestige are even more important than for the greater powers" (Broch cited in Leira 2015, p.22).The role performance of Norway, or itsbehaviour with, and approach to foreign policy actions is, according to Gulbrandsen (2022), influenced by the logic of appropriateness (March & Olsen, 1998), dictated by the image the state has of itself, and constituting a basis for adopting a role in any specific context. In Holsti's view (1970), the main explanation for the role performance of a state arises from policy makers' conceptions of the role of the nation in a system (National Role Conception), but adoption of a role is also influenced by what he calls role prescriptions, which come from the external environment. In this case, if the Norwegian government and the Norwegian people have an image of Norway as a nation for peace, and if the external image they project in other countries is also that of a nation for peace, the logic of appropriateness and the role prescription will dictate that Norway will have to behave as a nation for peace, and thus engage in peacebuilding policy.For Skånland (2010) the Norwegian involvement in peace processes is the result of a discursive construction, amplified by the media, above all after 1993. Media coverage of the Norwegian involvement in the Middle East peace process gave a very positive picture of Norway in general, an image that was strengthened thanks to the perceived successes in the peace processes of Sri Lanka, Guatemala, and Mali. All this crystallised into three main discursive constructions: (1) the decisive significance of the Norwegian contribution for the outcome of peace processes, (2) the importance of peace promotion as a foreign policy tool, and (3) Norway's distinctive approach for peace promotion.Other authors emphasise Norway's peace engagement efforts from a more realist perspective and, in particular, as a policy instrument in its own right (Touval, 2003). Some, like Matlary (2002) argue that mediation is used as an institutionalised strategy for dealing with some of the challenges of being a small state, as well as for promoting Norway's interests in the international arena, and having some influence in international relations. As Stokke (2014) notes, although it has a small population, Norway has a disproportionate importance in other areas (fishing, oil and gas, shipping etc.), thus implying interests beyond its borders as well as influence in other domains because of this prominence. According to Matlary (2002), some Norwegian interestsidentified from a realpolitik standpoint are security (addressed through NATO), economic interests vis-à-vis the EU, access to political decision-making power in the EU and, outside the West, considerable economic interests in oil prices and oil export. Matlary, who collected data through a series of anonymous interviews with diplomats and politicians, alludes to the effects of value-oriented diplomacy in matters of matters and concludes that, apart from a good image and profile, what value-oriented diplomacy provides is access to other arenas where one needs the best possible entry. Her interviewees referred, above all, to access to the leaders of the U.S. Department of State through the policy of peace engagement, especially in the Middle East and, to a much lesser extent, to leaders of EU states. However, she says, it was difficult to collect specific insights into the effects of such access, a perspective shared by Stokke (2010, p.166) who argues that "the extent and manner in which recognition is translated into international influence is complex and may vary from one policy field to another and between different arenas of international relations. This means that it is notoriously difficult to detect and measure the direct benefits from peace engagement". Finally, another interesting perspective is that provided by Neumann (2011). For him, the peace and reconciliation efforts of medium and small countries are a means to maintain a system with which they are reasonably satisfied, because they are not as well equipped as bigger powers to deal with other (more violent) types of conflict resolution methods, and he refers specifically to the institutionalisation of peace and reconciliation efforts by Norway.To conclude, Norway's peacebuilding policy may be understood as apparently idealist (value-oriented diplomacy) and based on a self-image as a nation for peace, which includes both idealist (moral responsibility) and realist (influence in the international arena and security) motivations. Until now, there have been no major conflicts between those two angles (Stokke, 2014), but in an increasingly polarised world, it is becoming more and more difficult for Norway to maintain a balanced policy in peacebuilding processes. 3. THEORETICAL FRAMEWORKThis study draws on the theory of constructivism to explain Norway's national role conception and considers the notions of idealism and realism to explain mediation as its foreign policy. A theoretical framework based on such apparently antagonistic ideas is, perhaps, not very common but, as Barkin (2003) puts it, a constructivist epistemology and a classical realist theory are, in fact, compatible and, moreover, this kind of framework can be useful in International Relations (IR) theory, as it can specify the relationship between the study of power in IR and the study of IR as social constructions. Indeed, constructivism and perceptions can—and are—often applied to fulfil or justify realist objectives and policies.For the purposes of this study, I consider that mediation as foreign policy is a result of idealist (value-oriented) and realist (power) motivations arising from a constructed national identity and role conception.3.1. Constructivism and national role conceptionFor Barnett (2018), constructivism as an international relations social theory is "concerned about how to conceptualise the relationship between agents and structures, but it is not a substantive theory" (p.88). The basic premise is that the world is socially constructed, which means that "social reality is a product of human consciousness. Consciousness is created and constituted through knowledge that shapes meaning and categories of understanding and action; such knowledge and meanings can be institutionalised in social life; and this institutionalisation, in turn, shapes the construction of social reality" (p.88). These categories shape not only external reality but also its actors, which is an indicator of the importance of the social construction of interests and identity. For example, Norway's identity may shape its national interests, and one of those interests might be security, but the concept of security and how it can be achieved may be linked to Norway's identity.National Role Conceptions, a concept first developed by Holsti (1970), is defined as "the policymakers' own definitions of the general kinds of decisions, commitments, rules, and actions suitable to their state, and of the functions, if any, their state should perform [...] in the international system" (p. 245-246). These are, as mentioned in section 2, the main explanation for the role performance of a state, understood by Holsti as the "general policy behaviour of governments" (p. 245). Role performance is also influenced by what he calls role prescriptions, which come from the external environment and have, as some of their sources, system-wide values, the structure of the international system, and the traditions, rules and expectations of states expressed through various legal instruments (p. 246).The notion of national role conception is related to that of politics of identity, which, in Aggestam's words (1999), is a set of ideas that policymakers use to create a sense of solidarity and cohesion and thus to legitimise general trust in a nation's foreign policy. She argues that speeches sometimes reveal subjective we-feelings of a cultural community related to territory, myths, rituals, institutions, and customs, and she refers to the "institutionalisation" of national identity, which makes identity constructions relatively resistant to change. Moreover, citing March & Olsen (1998), she indicates that certain practices and rules of behaviour that legitimise and explain specific identity constructions are reinforced by such institutionalisation.The starting point of the present study is, therefore, the idea that Norway's national role conception is that of a small, rich, peaceful, democratic state, whose official discourse in peace engagement, especially since the 1990s, emphasises its altruistic contribution as a "peaceful nation that has the values, competences and economic resources" for such an endeavour, but whose work is also "beneficial for Norway's own interests" (Stokke, 2014, p.8).3.2. Idealism, realism, and mediation as foreign policyThere is no generally accepted definition of idealism because there is no settled ontology of the term but, according to Wilson (2012), it generally refers to any goal, idea, or practice that is considered impractical from a state perspective, for example the prohibition and disarmament of nuclear weapons, or global eradication of poverty. In IR it is normally used in both the broad and narrow senses. Broadly speaking, idealism seeks to transcend anarchy to create a more harmonious world order while, in the narrow sense, it is a doctrine tied to the inter-war period (1919-1939) and seen as emphasising the growing interdependence of mankind. I shall focus on the first meaning, which refers to "an approach to international politics that seeks to advance certain ideals or moral goals, for example, making the world a more peaceful or just place" (Wilson, 2019).Realism is a substantive theory of IR that considers states to be the main actors in the international arena, and mainly concerned with the pursuit of their own national interests, security, and struggle for power. Realists view the international arena as a sphere without justice, and with active or potential conflict among its members. They show scepticism about the relevance of ethical norms (Stanford Encyclopedia of Philosophy, 2017). This theory has a variety of ramifications but in this study I consider, first and foremost, classical realism because, although idealism is usually heavily criticised by realists, according to Barkin (2003), classical realism perceives the art of international politics as "the practical balancing of the demands of power on the one hand and morality on the other—a dialectic between power and morality [...]. Idealism, for the classical realist, is necessary to inform our actions and underlie our interests in the pursuit of international politics, but realism will always remain a necessary part of relations among states" (p.333). Also relevant is the perspective of neoclassical realism because, while classical realism focuses on the system-level factors, neoclassical realism considers domestic-level factors as variables that can shape foreign policy, which is highly pertinent if NRC theory is used to explain Norway's behaviour in the international arena. Neoclassical realism considers that "objective reality exists, but decision making is impaired by uncertainty and the complexity of the environment" (Rathbun, 2008, p.296).According to Touval (2003), mediation as foreign policy needs to be understood as a policy instrument, as distinct from mediation theory. He argues that it derives from the mediator's perception of the international system, its foreign policy objectives and strategies, and domestic needs. I would also argue that it stems from the mediator's own national role conception and self-perception. Touval (2003) considers that ending a conflict is no longer the main concern of the mediating state, but only a part of a broadly conceived foreign policy as the mediation is also shaped by affairs that are external to the conflict. He highlights three issues arising from a state's international and domestic concerns: (1) mediation is perceived by the public and the officials engaged in it as a moral obligation, which is seldom criticised; (2) foreign and domestic motivations, apart from being an incentive for states to engage in mediation, also shape their strategies and tactics of the mediation; (3) the mediation is evaluated not only in terms of settlement of a dispute, but also the primary goals motivating the mediation. Beriker (2017) offers an expanded perspective of Touval's work, arguing that once mediation is proven to be a viable foreign policy tool, engaging in mediation enables medium-sized powers to create a political space that otherwise would not be available. 4. METHODOLOGYThis study is both descriptive and explanatory, as it inquires more deeply into the events as well as exploring why and how Norway became involved in the Venezuela peace process from 2017 to May 2023. In a deductive approach, existing theories —NRC, mediation as foreign policy, idealism, and realism— are drawn on to explain Norway's behaviour in its peacebuilding policy. The epistemology used is empiricism, since the focus is explanation rather than interpretation, and the ontology is pragmatist because, while the world is understood as existing independently from social actors, the influence of these actors to shape social realities should also be taken into account, together with the fact that, in some cases, this may affect realities existing independently of them.The methods are qualitative, as information provided with quantitative methods would be too superficial for a study that seeks to determine the existence and the characteristics of Norway's engagement in the Venezuelan peace process. The analysis is primarily based on a range of online primary and secondary sources, including government reports, memorandums of understanding, recorded interviews, articles, and academic publications. I consulted these sources, first, for better understanding of the issues and to organise this material around the research question, as well as to identify possible gaps of knowledge. I then conducted semi-structured interviews, with an official from the Norwegian MFA (Ministry of Foreign Affairs) and a Norwegian academic, to fill some of the previously identified knowledge gaps, to record their perceptions, and to triangulate the documentary information thus gathered.The first interview, conducted by videoconference on 2 August 2023, was with Professor Benedicte Bull, from the University of Oslo and, inter alia, president of the Nordic Institute for Latin American Studies, whose research has been focused on Venezuela in recent years. The second was with David C. Jourdan, who coordinates the Norwegian MFA's facilitation team in the Venezuelan peace process. This interview was conducted in Oslo on 8 August 2023. Both Bull and Jourdan have given their consent to use their names in the present study. NOREF was also contacted but stated that it could not give interviews on the Venezuelan peace process. 5. ANALYSIS AND DISCUSSION5.1. Norwegian involvement in the Venezuelan peace processNo official documentary information about the specific manner Norway engaged in the Venezuela conflict during 2017 and 2018 has been found, apart from the mere fact stated in the NOREF website that it was engaged in talks on the conflict in those years. According to its strategic plan 2019-2023, NOREF is a "non-state actor that is able to complement formal Norwegian peacemaking efforts [... and] build directly on the Norwegian tradition of informal conflict resolution". This makes it possible "to support formal peace processes (track I), and informal back-channel conflict diplomacy (track 1.5 and 2)" (NOREF, 2019). This institution has a permanent staff of professionals, experts in conflict resolution, and is governed by a board whose director is appointed by the Norwegian MFA, and whose members come, in general, from different areas of the public sector. In the interview with David C. Jourdan of the Norwegian MFA (2023), he confirmed that NOREF's engagement consists of track 2 approaches. Moreover, he stressed that, although NOREF receives public funds and works closely with the Norwegian state, it is a separate, independent institution. Norway's involvement in the peace process after 2019, when it became public, is described in some detail below. 2019: the first official talksAccording to the Norwegian MFA (2023), Norway has been involved in Venezuela since 2018. However, it was only in May 2019 that talks between the Venezuelan parties, facilitated by Norway, first became public. In this early stage, the negotiations between the delegations of Nicolás Maduro and Juan Guaidó lasted until August 2019, and although significant progress was made, no agreements for solving the political conflict were reached. However, the Norwegian MFA (2023) stresses that these negotiations were a stepping-stone for further talks between the parties, which signed a collaboration agreement in June 2020, with the objective of using frozen funds in the U.S. for a joint response to the COVID-19 pandemic, with support from the Pan American Health Organisation. Several newspaper articles describing the negotiations during that year provide additional information that has been used in this study.In May 2019, Juan Guaidó sent a delegation to Oslo to participate in exploratory talks with representatives of Maduro's government to try to find a solution to the political crisis the country had faced since Guaidó declared himself acting president of Venezuela at the beginning of that year (NRK, 2019a), information that was confirmed by Jorge Valero, Venezuela's ambassador to the UN in Geneva, and the UN spokesperson in New York, Stephane Dujarric. The Norwegian Broadcasting Corporation (NRK) reported the talks for the first time on 15 May but, according to an anonymous source, this was the second time that the parties had been in Oslo, and negotiations had previously been taking place in Cuba.Shortly afterwards, on the night between 16 and 17 May, the Norwegian Ministry of Foreign Affairs issued a press release confirming that there had been contacts between key political actors in Venezuela as a part of an exploratory phase aiming to find a solution to the country's situation. The Maduro government representatives present at the talks were Héctor Rodríguez, governor of the province of Miranda, and Jorge Rodríguez, minister of Communication. The opposition representatives were Gerardo Blyde, member of parliament, and Fernando Martínez Mattola, who had been minister during the government of President Carlos Andrés Pérez.In the last week of May 2019, the Norwegian minister of Foreign Affairs confirmed that the parties would travel again to Oslo during the following week to continue with the process (NRK, 2019b). Almost at the same time, Juan Guaidó insisted that the meetings in Oslo were not part of a dialogue or negotiation, but a mediation in Norway (El Nacional, 2019). According to Voice of America/Voz de América (VOA) (2019a), Nicolás Maduro appeared a few days later on the Venezuelan public TV channel after the opposition declared that the conversations in Oslo that week had ended on 29 May without any agreement being reached. Maduro stated that conversations had been taking place in secret during the three previous months, that he was proud of his delegation, and that dialogue with the opposition had been constructive. Moreover, he insisted on his wish to find a peaceful solution for Venezuela. Indeed, VOA pointed out that Dag Nylander, a Norwegian diplomat who would become chief facilitator of the Venezuelan peace process, had been travelling to Caracas and meeting with the political actors involved in the crisis since January 2019.The peace talks resumed one month later in Barbados. On 11 July 2019, after three days of conversations, Norway announced that the negotiations would continue (Reuters, 2019). Yet, only a few weeks later, the Maduro government withdrew from the talks when the U.S. president, Donald Trump, announced his decision to block U.S. citizens from engaging in business in Venezuela and to freeze the country's assets in the U.S. According to the Venezuelan government, this had been instigated by Juan Guaidó, while the opposition accused the government of reneging on its commitment to dialogue. Norway's facilitator, Dag Nylander, took note that the planned meetings would not take place and emphasised Norway's role as a facilitator acting at the request of the parties and planning the meetings according to their availability. He added that the facilitation process would continue as long as the parties wished, and provided that there was a realistic position on a solution in the best interests of the Venezuelan people (VG, 2019).According to Bull (2023), Norway, as the facilitating country, was displeased when the talks went public in May, believing that this was premature and that it would complicate the peace process. She also stresses that the Trump administration had no clear strategy for ending the conflict and that, when the U.S. sanctions were announced, there had not been any proper coordination with Norway. She also notes that mentions of the U.S. seem to refer to a single homogeneous actor, when the reality is that there are many actors involved, among them the Pentagon and the Department of State, and these actors may work in different directions, sometimes disrupting a given policy. The Norwegian MFA (2023) confirms it was not aware of the U.S. sanctions that were announced in early August 2019. Both parties and facilitator were taken by surprise.2021: The signing of a Memorandum of Understanding and negotiation rounds in MexicoA year and a half later, in March 2021, new exploratory talks began after the Biden administration's position on Venezuela allowed the parties to negotiate a Memorandum of Understanding (MoU), which led to the launch of a new negotiation process, starting in August that year. On 5 August, the Mexican President, Manuel López Obrador confirmed that Mexico would host talks between the government of Venezuela and the opposition (Reuters, 2021) and, a few days later, the Norwegian government confirmed its involvement with a tweet (Ministry of Foreign Affairs, 2021a). The new negotiation process was launched in Mexico City on 13 August, with Dag Nylander as chief facilitator, Jorge Rodríguez representing the Venezuelan (Maduro's) government, and Gerardo Blyde representing the Unitary Platform (the opposition). A MoU —which I refer to in more detail in section 5.3— was released, defining the objective, agenda, method, and composition of the negotiation team. The Norwegian minister of Foreign Affairs, Ine Eriksen Søreide, declared in a press note that the parties were ready to negotiate constructively and that, in the process, they would consult members of civil society as well as political actors. She also noted that there was mutual agreement on the sensitive nature of the negotiations, which was necessary for giving the parties space to make progress (Norwegian MFA 2021b).A second round of negotiations took place at the beginning of September 2021. The parties released a joint statement reporting that two agreements had been reached, the first being to act jointly in the claim of Venezuelan sovereignty over Guyana Esequiba, and the second, a "partial agreement on the social protection of the Venezuelan people". The parties conveyed that the points to be addressed in the following round of negotiations would be "respect for the Constitutional Rule of Law", protection of the national economy, and measures for the social protection of the Venezuelan people.Between the second and the third rounds of negotiation, Erna Solberg, the Norwegian Prime Minister, spoke at the UN General Assembly on 21 September, referring to Venezuela as a country where human right violations were occurring. Her comment was criticised by Dag Nylander as it could, he said, damage the credibility of Norway's role. In a tweet on 25 September, the MFA reaffirmed its commitment as an impartial facilitator in the negotiations and declared that the statement in the UN should not be interpreted as being inconsistent with that (NRK, 2021). The Venezuelan government responded to this diplomatic hitch with a slight delay in proceedings when its representatives arrived one day late at the negotiation round scheduled in Mexico from 24 to 27 September, but which finally took place after 25 September (Euronews, 2021).After this third round of negotiations, the parties released a new joint statement, focused this time on the issue of inclusion and, specifically, on the need for a gender focus in the negotiations, identification of inclusive consultation mechanisms for political and social actors, and condemnation of xenophobic attacks on Venezuelan migrants that had recently occurred in Chile. According to an article by Diego Santander in the Spanish newspaper El Mundo (2021), this third round was so fraught with problems that no specific agreements were reached. Maduro's delegation insisted on its plans to include Alex Saab in the negotiation. Saab, a Venezuelan businessman, was accused of being Maduro's front man, and a key figure in the international economic and financial activities to circumvent the U.S. economic sanctions against his government. However, Saab had been arrested for money laundering in June 2020 in Cabo Verde and was extradited to the U.S. on the weekend of October 16.Negotiations, set for 17 October, were suspended on 16 October when the Maduro government decided not to participate in the next round of negotiations, because of Saab's extradition, which Jorge Rodríguez referred to as a "kidnapping" as it had been carried out "without a warrant and without due process" and accused the U.S. of trying to prevent the dialogue (Gilbert, 2021). The Norwegian government then tweeted that it was still convinced that the negotiations were the only solution for Venezuela, and that it would keep working to encourage the parties to continue (Norwegian MFA, 2021c). In Bull's opinion (2023), while the U.S. system may have its faults, the legal proceedings are independent from political powers so, on that occasion, there was little that U.S. politicians could do to stop the extradition.2022 — 2023: talks after the beginning of the war in UkraineIn March 2022, a new chapter of the dialogue began after the Russian invasion of Ukraine. A U.S. delegation formed by members of the Department of State visited Caracas to meet with the Venezuelan government and discuss an eventual isolation of Vladimir Putin. Some analysts also indicated that Venezuela was seen as a possible alternative oil supplier if the U.S. opted to restrict oil exports from Russia, which meant that removal of the sanctions on Venezuela could be considered (VOA, 2022a). Indeed, in May 2022, the U.S. announced that economic sanctions against Venezuela would be eased as a gesture in favour of reactivating the dialogues and also allowing the U.S. company Chevron to negotiate potential future activities with the state-owned oil and natural gas company PDVSA (Agobian, 2022). According to the Norwegian MFA (2023), these actions were a catalyst for the reactivation of the negotiations.Immediately after the announcement, Jorge Rodríguez and Gerardo Blyde met to discuss renewal of the talks (Ocando Alex, 2022a) but, by the end of May, according to Reuters, the Venezuelan government had demanded the withdrawal of Norway as a facilitator, and the presence of Russia (formally an accompanying country in the negotiations after 2021) as conditions for reactivating the negotiations. However, convinced that the Norwegians were their only guarantee for a successful process, the opposition disagreed (Oré, 2022). Bull (2023) specifies that the stance of the Venezuelan government might have been because it saw Norway as taking an excessively "pro-allies" position after the start of the war in Ukraine. She adds that Norway prefers to involve Russia and other big powers in the negotiations rather than excluding them, as they would provide legitimacy to the Mexico talks as the only acceptable platform for solving the Venezuelan political crisis. When interviewed, David C. Jourdan of the Norwegian MFA (2023), made it clear that Norway was never asked to relinquish its role as facilitator. Management of the process resides with the parties, which have remained committed to the MoU that names Norway as the facilitating country.On 21 and 22 June 2022, the Norwegian government held the Oslo Forum, an annual retreat focused on conflict mediation and peace processes. Around 100 conflict mediators, experts, peace process actors, and high-level decision makers from around the world gathered at Losby Gods Manor with the goal of sharing their experience on conflict resolution and peace diplomacy (Norwegian MFA, 2022). Among the peace process actors who attended the Oslo Forum were Jorge Rodríguez and Gerardo Blyde. A Norwegian source told VOA (2022b) that it was "probable" that the conversations would be initiated again, but "not immediately".On 14 September 2022, a group of 18 countries from the Americas and Europe agreed to call upon Maduro and the opposition to urge a resumption of the negotiations in Mexico (Ocando Alex, 2022b).Official negotiations began again on 26 November 2022. This time, a joint statement was issued indicating that the main agenda of the meeting would be social protection of the people. A partial agreement was reached, in which the measures agreed upon were: 1) creation of an organism to implement specific actions and programmes for the social protection of the Venezuelan people (Mesa Nacional de Atención Social, or MNAS); 2) creation of an organism auxiliary to the MNAS to evaluate its processes and the effects of implementation of the measurements adopted; 3) definition of the social areas which, requiring the most urgent attention, needed to be addressed through specific programmes, in particular the public health system, the national electrical system, development of the World Food Programme, educational infrastructure, and rebuilding of the infrastructure damaged as a consequence of the torrential rains in the latter half of 2022; 4) requesting from the UN support for the design and creation of a fund for social support of the Venezuelan people; 5) identification of frozen assets belonging to the Venezuelan state that might be progressively accessed and incorporated into this fund; 6) creation of a commission to assess and verify implementation of the agreement.After this meeting, the negotiations stalled again when the Venezuelan government accused the opposition of not complying with the agreement reached but, mainly and above all, because the frozen US$3,000 million that were to be incorporated into the Fund for the Social Protection of the Venezuelan People had not yet been released (August 2023). According to Maduro, this was a condition sine qua non for resuming the talks. The Colombian president, Gustavo Petro, organised a conference on 25 April 2023 in Bogotá, with representatives from numerous countries to discuss the Venezuelan situation. The shared positions of the Venezuelan government and the opposition were explained to the international community, in particular regarding the removal of sanctions, free elections, and reactivation of the peace talks. One of the shared positions for renewal of the talks was that of establishing the Fund for the Social Protection of the Venezuelan People (Ramírez Vargas & Alcalde, 2023). The message that came out of the Venezuela Conference of Bogotá was very clear: the UN trust fund for Venezuela should be set up as swiftly as possible. According to a Reuters report by Spetalnik, Sequera and Armas (2023), on 19 May the Biden administration notified the UN that the money could operate within the U.S. financial system, and that there would be no risk of creditors seizing it to repay the outstanding Venezuelan debt. Accordingly, the UN-administered fund could have been operative at the end of May 2023. However, the decision to establish the trust fund ultimately lies with the UN Secretariat in New York and some insiders allude to the complexity of the process involved and stress that establishing the fund depends on a number of factors. As of late August 2023, it had not been established by the UN. 5.2. Norway's distinctive approach to peace diplomacyIn an interview for the Centre of Humanitarian Dialogue, when asked about the distinctive approach of Norwegian diplomacy in international conflicts, Dag Nylander (2020) identified four main elements: (a) collaboration with Norwegian and international NGOs, (b) low-key diplomacy, (c) long-term commitment, and (d) the ability to make quick decisions.[5] In this section, these four elements will be briefly discussed.Norway's distinctive approach to its engagement in peace processes and with non-state actors was defined after the decentralisation of its foreign policy in the early 1990s. Humanitarian assistance and development policies called for closer cooperation between the Norwegian MFA and non-governmental actors and, according to Lehti (2014), this approach was extended to the area of peace-making. In the 1990s the Ministry responded positively to proposals and initiatives from various NGOs and well-connected individuals with regard to conflictive areas. The range of actors involved in peace-making was broadened, and Norway was then able to act beyond the bounds of government-centred diplomacy with a distinctive, more informal approach to peace diplomacy. Ann Kelleher and James Taulbe (2006) refer to this approach as "Track I½ Diplomacy", understanding Track I diplomacy as that with official representatives of governments and Track II diplomacy as that involving unofficial representatives and sectors of the civil society. An important feature of the collaboration between the state, NGOs and research institutions is that it is extensively funded by the state (Bandarage, 2011). Indeed, some Norwegian NGOs receive more than 90% of their funding from the state which, in Kelleher's view (2006), almost makes them quasi-governmental organisations.As for low-key diplomacy, Nylander (2020) affirms that activities pertaining to peace diplomacy rarely appear in the news, and that they are discreet and unnoticed, often with the involvement of low-level and mid-level diplomats, an approach that allows flexibility in seeking opportunities and in dealing with problems with relative freedom.Norway's long-term commitment to peace diplomacy is based on a broad political consensus for the promotion of peace and reconciliation. Hence, changes of government will not influence the country's engagement in any given conflict. According to the MFA (2000), the goal is not only ending violence but also support for economic, social, and political processes that lead to durable liberal peace in the country concerned.Finally, the ability of Norwegian diplomats to make quick decisions stems from the smallness of the country, not only in terms of population but also social distance. Dag Nylander (2020) mentions that the distance between a diplomat in the field and the ministry of Foreign Affairs is very short, and that it takes just a quick phone call or a text message, sometimes directly to the Minister, to obtain any clearance that may be needed. 5.3 Norwegian approach to facilitation the Venezuelan peace processNorway's approach to facilitation in Venezuela is consistent with its work in other peace processes. It began with secret talks between the parties (low-key diplomacy) and then, having advanced towards a more public and official format, it was formalised with the MoU signed in Mexico on 13 August 2021. In the MoU, the parties defined the agenda and methods for the talks. David Jourdan of the Norwegian MFA (2023) highlighted the importance of this Memorandum, which contains not only the agenda and format for the negotiations, but also a shared vision of the process and the country.As for the method, it is important to mention that it is based on a "nothing is agreed until everything is agreed" principle (comprehensive approach), although partial agreements can be reached if the parties consider that a subject has been sufficiently discussed and urgent action is required. This was the case with the two partial agreements on the Guyana Esequiba, and Social Protection of the Venezuelan people signed at the end of the talks in Mexico. This approach has its advantages, such as ensuring "big picture" negotiation, but it also comes with the risk the parties can renege anytime on anything they have agreed to. It was first used in other peace processes including Britain-Ireland in 1995, Palestine-Israel, and in Cyprus and Colombia. The Norwegian MFA (2023) emphasises that understanding the needs of the parties and ensuring that they are in charge of the process, has been key to making progress throughout the negotiations. The Venezuelan conflict is political in nature and requires political solutions, and the negotiation process provides a confidential space where the two parties have an opportunity to reconcile their interests. David Jourdan, sharing the MFA's approach to the political process, points out that Norway has probably been a more active facilitator in the Venezuelan negotiations than in other peace processes.An essential point of the MoU is participation, as it establishes mechanisms of consultation for political and social actors. The aim is for the process to be as inclusive and legitimate as possible. However, there is little information available as to whether this is actually the case and David Jourdan (2023) admits that it is not yet possible to speak of results in this area.Moreover, it should be noted that the Norwegian approach to facilitation, based on discretion and confidentiality, is one thing and how the parties actually behave is quite another matter. On more than one occasion, as can be seen in several documents and declarations, the Norwegian government has emphasised the need for the parties to be careful with their public declarations. In an interview with El País in February 2023, Anniken Huitfeldt, Norwegian Minister of Foreign Affairs, wryly acknowledges an anecdote sometimes repeated by high-profile Venezuelan politicians, according to which politicians will normally control themselves in public but, in private, tell someone else what they really think but, in Venezuela, the opposite occurs: what is said in private becomes amplified in front of a microphone (Lafuente 2023). Vicente Díaz, former director of the Venezuelan National Electoral Council, who participated in the talks held in the Dominican Republic, Oslo, and Barbados says that, since the process in Mexico was "very public" (as occurred in the Dominican Republic), it created difficulties for the parties, since national and international expectations were generated, which meant that more attention was given to audiences than to the talks (openDemocracy 2022). 5.4 Norwegian interests in VenezuelaIn this section and in keeping with the theoretical framework described above, I discuss four possible reasons for Norway's mediation in the Venezuelan conflict: (a) peace and stability (value-oriented diplomacy), (b) reputation, (c) political interests, and (d) economic interests.Value-oriented diplomacy focused on peace promotion makes sense for Norway, a country whose identity as a peaceful country and peace broker has existed at least since the late 19th century. Those values are so widely embedded that a broad political consensus exists among the population over a peace promotion policy, supported institutionally and by an extensive network of non-state actors coordinated by the state. Norway's constructed identity as a peace broker (especially intensified since the 1990s) means that the country acts as such. Moreover, promotion of such values makes even more sense when security has become globalised, and when a conflict in a faraway country can have humanitarian, political, economic, and ecological consequences in distant parts of the world. In this sense, value-oriented diplomacy may acquire realist motivations although, according to Bull (2023), this is discourse that appeared, above all from the 1980s, to justify Norway's involvement in peace processes. One of its proponents was the diplomat and former Labour Party politician, Jan Egeland.Ensuring peace and stability in Venezuela could, for example, (1) help to mitigate the external displacement crisis, which mainly affects neighbouring countries like Colombia and Ecuador as well as the U.S. and others in Europe, with all the humanitarian and economic consequences for those receiving refugees; (2) ensure Venezuela's participation, as a democratic state, in international organisations, thus promoting democratic values and human rights; (3) promote social and economic development in the country, which would create value for its nationals as well as attracting international investment and; (4) finally, through social and economic development, reduce the presence of paramilitary organisations in the country, including the Ejército de Liberación Nacional (ELN), which is involved in drug trafficking. During the interview with David Jourdan (2023), we shared these points and he replied that this may well be so, but that such possibilities could also arise as a consequence of a political settlement that includes the removal of the sanctions. He added that the main reasons for Norway's peace diplomacy are the goals of preventing and reducing human suffering, as well as contributing to peaceful societies and stability.Peace diplomacy does not give rapid results (when it actually gives results), but Norway sees it as a policy consistent with its values, and as one whose long-term effects are sufficiently relevant as to justify investment in it.When it comes to image and reputation, Norway's approach on peace has been used as a public diplomacy branding tool, together with the country's natural environment and gender equality, to solve one of the image problems of small countries: invisibility.Indeed, discretion and a low profile do not necessarily mean invisibility, and as long as the right aspects of Norway's peace diplomacy are emphasised in a public diplomacy strategy —for example its role as a facilitator, an engaged partner, and good multilateralist— the discretion that peace diplomacy requires would not be jeopardised (Leonard and Small, 2003). Success in mediation of the Venezuelan conflict would, of course, be positive for Norway's image as a peace broker, although this constructed image is also enhanced through pertinent media coverage mentioning the Norwegian involvement during the Venezuelan peace process. This can be explained by NRC theory since the Norwegian image is constructed not only through success in a certain process but also through the mediating process itself. To give one example, the Google search "peace talks Venezuela Norway" offers almost 4.85 million results, while the Spanish search with "mediación de paz Venezuela Noruega" offers 1.28 million results. Moreover, when Norway uses the word "facilitation"2 it transfers responsibility for the results to the parties, implying that it has the role of supporting and accompanying them, but it will not be responsible if the parties decide that they do not want to continue with the process. This safeguard for Norway's image as a peace broker applies to the Venezuelan case.Political influence has also been identified as one of Norway's possible interests. As Matlary (2003) notes, access to key international actors can result from Norway's engagement in peace processes, including in the case of Venezuela, especially in a context of international energy insecurity, and political tensions due to the high-profile conflict between Russia and Ukraine. In my interview with David Jourdain (2023), "close dialogue with key international stakeholders" together with increased political capital were mentioned as benefits that Norway could reap by engaging in Venezuela. He also pointed out that one of the key features of this conflict is the importance of the U.S. as an actor with the capacity to contribute to the outcome of the peace process.The U.S. is now particularly concerned to find new energy suppliers, and ensuring political stability in Venezuela could provide international legitimacy for oil and gas transactions with its government. Giovanna de Michele, internationalist lecturer at the Central University of Venezuela, told VOA that the best way to extract oil from Venezuela would be through U.S. companies, but the sanctions would have to be eased if this was to happen (Ramírez Vargas & Alcalde 2023). Norway offers an internationally recognised platform for making this possible: the talks in Mexico. It could therefore be a key actor in helping to resolve the political crisis in Venezuela while also supporting an ally, which would contribute to its status as a reliable partner of the U.S. However, as Matlary notes, it is difficult to quantify or define the scope of the access Norway gleans from its peace policy.Finally, with regard to economic interests, there are currently no Norwegian state-owned companies operating in Venezuela, although they can be represented through the investments of the Norwegian National Pension Fund3 in foreign companies that do operate in the country, for example, some Colombian companies, among them Bancolombia, Banco Popular, Banco Davivienda, and Cementos Argos. And, at the beginning of 2023, Ecopetrol, which is financed by Norfund, asked the U.S. for permission to negotiate with the state-owned company PDVSA to explore gas imports from Venezuela to Colombia (Quesada 2023). Among Norwegian investments in the U.S. are Chevron and Occidental Petroleum Corp, and the U.S. has recently given permission to Chevron to negotiate with the PDVSA and, at the end of 2022, a United Nations Commission on International Trade Law (UNCITRAL) court found that Venezuela was liable for discriminatory conduct in its payment of dividends from an oil and gas venture and ordered Venezuela to pay US$105 million to a Barbadian subsidiary of Occidental Petroleum Corp (Ballantyne 2022). If an improved political situation in Venezuela increases the revenues of these companies, it could also be positive for Norwegian investments.It should be added that, until 2021, Statoil (later Equinor), the national oil company of Norway, was present in Venezuela where it invested more than one billion dollars between 1995 and 2013 and participated in the Sincor heavy crude oil project with Total and PDVSA. However, due to concerns about the workforce and practical difficulties, Equinor pulled out of the project and transferred its 9.67% participation to CVP, a subsidiary of PDVSA, although it did keep its 51% stake in the exploration license of block 4 on Plataforma Deltana off Cocuina(Øye Gjerde, n.d.). Accordingly, Equinor participation in Venezuela is currently on hold but a greater presence in Venezuela of Norwegian companies, in particular from the oil and gas sector is possible if the country's situation improves.To sum up, although economic links between Norway and Venezuela do exist, they would seem to be limited and not sufficient to explain Norway's participation as a facilitator in the Venezuelan peace process. 6. CONCLUSIONSThe core question of this study is why and how does Norway facilitate the Venezuela peace talks? The results suggest that, for Norway as a facilitator of the Venezuelan peace process, the main goals of mediation-as-foreign-policy are humanitarian, security (better understood as promoting stability in the region), projection of its image as a peaceful nation and a peacemaker, and of its status vis-à-vis key international actors (especially the U.S.).All these goals can be explained through the Holsti's theory of National Role Conceptions (NRC) and Norway's own role prescription as a small, democratic, and peaceful nation, which means it would promote these values through altruistic (idealist) and non-altruistic (realist) actions and perspectives.Interestingly, economic factors do not seem to play a major role as a mediation-as-foreign-policy objective. The economic ties between Norway and Venezuela are presently not significant and, thanks to the diversification of the investment portfolio of the Norwegian National Pension Fund, Venezuela only represents a very small part of Norwegian economic interests.It is therefore relevant to consider the importance of constructivist aspects such as national values and self-conception in shaping the foreign policy of small countries, despite the apparent predominance of realpolitik aspects in an international context of increasing competition. These constructivist aspects offer key information for understanding and explaining the behaviour of small countries and should not be overlooked.Besides, it is worth reflecting on the definition of a mediation success in real, and in mediation-as-foreign policy terms. In the real sense, mediation is successful when it produces long-term reconciliation between the parties, in the eyes of a domestic audience while, for an audience external to the conflict, mediation may be successful simply when a peace agreement between the parties is signed. Meanwhile, for the mediating country or its allies, a mediation is deemed effective when foreign policy objectives are achieved. The approach used by Norwegian mediators in the Venezuelan process is similar to that of previous peace processes. It starts with the organisation of secret meetings and then advances towards a more public and official format. However, some distinctive traits of this peace process have been (1) a somewhat more active role of Norway as a facilitator when compared to other peace processes, (2) the weighty influence of the U.S. in causing setbacks or advances in the negotiations , and (3) premature publicity of this process, when the parties have been too eager to share their views with the press and the public, which may have been an obstacle for achieving progress. Despite these challenges, as of November 2023, Norway has continued to honour its long-term commitment to achieving a peaceful solution to the Venezuelan conflict.This study has created a first timeline of the Norwegian involvement in the Venezuelan peace process by means of consulting information in primary and secondary sources and, when relevant, adding further details obtained in interviews with two experts. This timeline provides an overview of the main milestones of the peace process while highlighting Norway's role as a facilitating country. Possible reasons for its engagement in the Venezuelan peace process have been identified. At a tactical level, the moral and security elements seem to be a high priority for people working in the field. These actors have considerable expertise in conflict resolution and perform their duties diligently. At a more strategic and state-centred level, besides the moral and security components, attention is given to building political capital by means of offering an attractive image to international stakeholders, especially close allies like the U.S. This is, therefore, an excellent example of the importance of peace diplomacy as a soft power tool for a middle-level country like Norway.The limits of the study arise from the nature of an ongoing mediation process. Since silence sometimes carries more weight than words and as discretion is necessary for the process to move forward, only limited information could be directly obtained from relevant actors in the peace talks. In terms of Norway's interests in certain areas, the limits of qualitative methods have not allowed quantification of the importance of each of these interests. The aim of the interviews was to obtain in-depth information that could confirm that such interests exist, and to provide distinctive details that might enrich knowledge of this peace process, rather than quantifying the results. Finally, now that Norway's possible interests as a facilitator have been identified, future research could be addressed at quantifying the weight of each of them in Norway's peacebuilding policy over the last two decades. 7. ReferencesAggestam, Lisbeth. "Role Conceptions and the Politics of Identity in Foreign Policy". ARENA Center for European Studies Working Paper, vol. 99/8 (1999). 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"Idealism in international relations" in: Dowding, Keith (ed.) Encyclopedia of Power, Thousand Oaks: Sage Publications, p. 332-333.Notes:1- Originally consisting of 12 Latin American nations and formally created on 8 August 2017, the Lima Group is a multilateral body whose goal is to explore mechanisms for a peaceful solution to the political crisis in Venezuela and restoration of a democratic order (Government of Colombia 2017).2- In this study, I use the terms "mediation" and "facilitation" interchangeably. However, mediation normally involves a formal mandate from the parties of a conflict, covering involvement in both the substance and process of the negotiation, while a facilitator is less directive (Greminger 2007).3- The Norwegian National Pension Fund, the world's largest sovereign fund, has investments in over 9,000 companies in 70 countries (Oljefondet n.d.). Key words: Venezuela, Norway, national role conception, mediation, peacebuilding, foreign policy, conflict resolutionDOI: https://doi.org/10.24241/docCIDOB.2024.15/enE-ISSN: 2339-9570
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Documents CIDOB: 15Winner of the Global Talent Award, launched by CIDOB and Banco Sabadell Foundation in the framework of Programa Talent Global.ABSTRACTThis study offers a comprehensive overview of the Norwegian involvement in the Venezuelan peace process as a facilitator of the peace talks between the Venezuelan government and the opposition. It explains what Norway does as a facilitator (the process), as well as how (approach) and why (characteristics of Norway as a suitable mediator, and possible interests), not only in terms of the characteristics making Norway a suitable facilitator, but also its interests and motivations. The main goal is to draw attention to the importance and the usefulness of soft power tools for the achievement of foreign policy objectives and, in particular, peace-making. The study concludes that, for Norway, mediation as foreign policy is, in general but also in the case of Venezuela, the result of a combination of idealist, value-oriented motivations (humanitarian reasons and international stability), and realist, non-altruistic interests (status and access) arising from its constructed national identity and role conception. 1. INTRODUCTIONSince the early 2010s, Venezuela has been embroiled in a grave economic, political, and humanitarian crisis resulting in institutional disarray that reached critical point in 2017. It was in this year that the constitutional order was broken after Decision 156 of the Supreme Tribunal of Justice in Venezuela, whereby this organ attributed to itself the functions of the National Assembly, the country's legislative organ. Deemed unconstitutional by the political parties with a majority in the National Assembly, this move led to mass protests. The government reacted by calling for a new constitution to be drafted by a newly created Constituent National Assembly which, in August 2017, granted itself powers to pass legislation, thus overriding the National Assembly (Bronstein & Cobb, 2017). This was not recognised by the National Assembly but, in 2018, the Constituent National Assembly went ahead and blocked the participation of the main opposition parties in the presidential elections that year. These elections were rejected by a broad sector of the international community, among them the European Union (EU) and the Lima Group.1From 2017, Norway, with a population of just 5.5 million, has been exploring possibilities in Venezuela for political dialogue between the government of Nicolás Maduro and the opposition, first through the Norwegian Centre for Conflict Resolution (NOREF), an independent foundation that receives funding from the Norwegian Ministry of Foreign Affairs (MFA), and later, after 2019, with direct state involvement. Norway has built an image as a peace broker with its success in processes like the Oslo Accords between Israel and the Palestine Liberation Organisation (PLO), and in the talks between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC). But why did Norway decide to facilitate the peace talks in Venezuela? How does Norway approach peacebuilding in this conflict? This article aims to analyse the causes, process, approaches, and motivations for Norwegian mediation in Venezuela, in order to draw attention to the importance and the usefulness of soft power tools for the achievement of foreign policy objectives and, in particular, peace-making. I therefore explore the comprehensive role of Norway in the Venezuelan peace talks, the background, the process, and Norway's possible interests as a facilitator. I argue that,for Norway, mediation as foreign policy is, in general, but also in the case of Venezuela, the result of a combination of idealist, value-oriented motivations (humanitarian reasons and international stability), and realist, non-altruistic interests (status and access) arising from its constructed national identity and the way it perceives its role as a peace-making nation. As mentioned above, the Norwegian state became officially involved in the Venezuelan conflict in 2019. The domestic situation had come to a head on 23rd January when Juan Guaidó, leader of the opposition and president of the National Assembly, rejected the authority of Nicolás Maduro and declared himself acting president of Venezuela. However, the strategy failed when the military remained loyal to Maduro. Negotiation then became a last resort (NUPI 2020) and Norway began to facilitate negotiations between government and opposition, first in Oslo and then in Barbados, in 2019. These efforts led to further discussion between the parties through 2021 and 2022, in Mexico. In 2022, the war in Ukraine prompted changes in the positions regarding Venezuela of certain actors, notable among them the United States (U.S.) and the EU. As the Spanish Institute of Strategic Studies (Remacha, 2023) points out, U.S. concerns about energy security made it necessary to find a way of guaranteeing the international supply, and Venezuela was (and is) considered to be a strategic source. Contacts between the U.S. and Venezuela were made in 2022, and talks began about removing the sanctions imposed on the country. Given its economic situation, and the presidential elections due in 2024, Venezuela welcomed the rapprochement. If the sanctions were to be removed (at least partially), it was necessary to resume dialogue with the opposition, so in November 2022, negotiations recommenced in Mexico with Norway's mediation. Significant progress was made, and the release of previously frozen international funds was agreed upon (up to 3,000 million dollars earmarked mainly for public health, education, and food), as well as the lifting of some sanctions. Maduro's government is also aware that the 2024 elections should be held according to a model that respects democratic safeguards, with unrestricted participation by the opposition, so that results will be internationally recognised. Venezuela would then be able to resume relations with countries and regions like the U.S. and the EU, thus enabling international investment, particularly in the oil industry, and an improved economic situation (NUPI, 2020). Although the presidential crisis formally lasted until 5th January 2023 when Guaidó's acting presidency was abolished by the National Assembly, the political crisis with the opposition continues to the present day, in November 2023. 1.2. Research goals and objectivesThis study aims to explore the role of Norway as a facilitator in the Venezuelan peace talks, focusing on what it does (the process), how (approach), and why (characteristics of Norway as a suitable mediator, and possible interests). It seeks to demonstrate that, given Norway's national conception as a peacemaker, its strategy in Venezuela expresses a broad foreign policy endeavour that has humanitarian but also reputational and political motivations. More broadly, the importance of soft power tools for state actors to achieve their foreign policy objectives is discussed. Constructivism and Holsti's theory of National Role Conceptions (NRC) help to explain Norway's self-image as a peacemaker, while idealism and realism, together with Touval's "mediation as foreign policy" theory shed light on Norway's use of mediation as a foreign policy tool. Qualitative methods based on analysis of primary and secondary sources, complemented with semi-structured interviews with experts and officials of the Norwegian Ministry of Foreign Affairs, have been used. 1.3. Relevance and justificationNorway is a small country in terms of population but one with a notable ability to influence international affairs thanks to soft power. One of ways it exercises its influence is its internationally recognised image as a peacemaker, evidenced through its involvement in several peace processes. Indeed, since 1993, Norway has been engaged in 11 different peace processes (Norwegian Ministry of Foreign Affairs, 2019) with some major successes but also others that were limited. The case of Norwegian facilitation of the Venezuelan peace talks is studied for two main reasons. First, is its relevance in terms of policy significance, as it is an ongoing process, which leads to questions about why Norway acts as a facilitator, and the possible interests it has in doing so, apart from the goal of peace itself. Second, is the practical reason of the author's knowledge of the three languages relevant for this research (English, Spanish, and Norwegian), which is a valuable asset in terms of good understanding of the information from primary and secondary sources written in the three languages. This is an advantage in the research, as it allows cross-checking of information, and offers a broader perspective on the topic. 2. NORWAY AS A PEACEBUILDING NATIONScholars offer several explanations of Norway's involvement in peace processes arising from international conflicts. The result of a pragmatic foreign policy, it combines idealist and realist elements in a seemingly contradictory policy which, in fact, accommodates different domestic interests and maintains inter-party foreign policy consensus (Riste, 2001; Ekengren, 2022).From a constructivist perspective, the notion of Norway as a nation for peace partly comes from its conception of its role as a small, rich, peaceful state, with a clear focus on human rights and humanitarian assistance (Leira et al., 2007). While it is true that the so-called value-oriented (idealist) diplomacy wasstrengthened, above all in the 1990s, with the increased involvement of Norway in several peace processes, its self-image as a peacebuilding nation has always been present (Leira, 2015). The Norwegian peace activist and later Foreign Affairs Minister, Halvdan Koht (1873-1965), argued in 1902 that, although the fact of its being a small state could limit its flexibility in foreign policy actions, Norway could and should secure its status by promoting peace and development. More than 80 years later, in 1989, Jan Egeland, who would become State Secretary in the Norwegian Ministry of Foreign Affairs from 1990 to 1997, argued that a small, rich country like Norway could be more effective in promoting human rights and peace than old colonial powers or superpowers with their historical baggage and policies based on self-interest and dominance (Sørbø, 2018).Moreover, the notion of status, which is closely linked with the concept of identity, has been prominent in Norway since the nation's beginnings. Leira (2015) describes the pursuit of status as a peace-making nation in the 19th and early 20th century as a way of achieving independence (through moral authority), a means of saving money (as the policy for peace was cheaper than power politics), and as sound realpolitik for a small state. He also refers to the words of Ole Jacob Broch in 1864 when he argued that, when small states need to "engage in the strife of other states", they should do it decisively because, "for them, honour and prestige are even more important than for the greater powers" (Broch cited in Leira 2015, p.22).The role performance of Norway, or itsbehaviour with, and approach to foreign policy actions is, according to Gulbrandsen (2022), influenced by the logic of appropriateness (March & Olsen, 1998), dictated by the image the state has of itself, and constituting a basis for adopting a role in any specific context. In Holsti's view (1970), the main explanation for the role performance of a state arises from policy makers' conceptions of the role of the nation in a system (National Role Conception), but adoption of a role is also influenced by what he calls role prescriptions, which come from the external environment. In this case, if the Norwegian government and the Norwegian people have an image of Norway as a nation for peace, and if the external image they project in other countries is also that of a nation for peace, the logic of appropriateness and the role prescription will dictate that Norway will have to behave as a nation for peace, and thus engage in peacebuilding policy.For Skånland (2010) the Norwegian involvement in peace processes is the result of a discursive construction, amplified by the media, above all after 1993. Media coverage of the Norwegian involvement in the Middle East peace process gave a very positive picture of Norway in general, an image that was strengthened thanks to the perceived successes in the peace processes of Sri Lanka, Guatemala, and Mali. All this crystallised into three main discursive constructions: (1) the decisive significance of the Norwegian contribution for the outcome of peace processes, (2) the importance of peace promotion as a foreign policy tool, and (3) Norway's distinctive approach for peace promotion.Other authors emphasise Norway's peace engagement efforts from a more realist perspective and, in particular, as a policy instrument in its own right (Touval, 2003). Some, like Matlary (2002) argue that mediation is used as an institutionalised strategy for dealing with some of the challenges of being a small state, as well as for promoting Norway's interests in the international arena, and having some influence in international relations. As Stokke (2014) notes, although it has a small population, Norway has a disproportionate importance in other areas (fishing, oil and gas, shipping etc.), thus implying interests beyond its borders as well as influence in other domains because of this prominence. According to Matlary (2002), some Norwegian interestsidentified from a realpolitik standpoint are security (addressed through NATO), economic interests vis-à-vis the EU, access to political decision-making power in the EU and, outside the West, considerable economic interests in oil prices and oil export. Matlary, who collected data through a series of anonymous interviews with diplomats and politicians, alludes to the effects of value-oriented diplomacy in matters of matters and concludes that, apart from a good image and profile, what value-oriented diplomacy provides is access to other arenas where one needs the best possible entry. Her interviewees referred, above all, to access to the leaders of the U.S. Department of State through the policy of peace engagement, especially in the Middle East and, to a much lesser extent, to leaders of EU states. However, she says, it was difficult to collect specific insights into the effects of such access, a perspective shared by Stokke (2010, p.166) who argues that "the extent and manner in which recognition is translated into international influence is complex and may vary from one policy field to another and between different arenas of international relations. This means that it is notoriously difficult to detect and measure the direct benefits from peace engagement". Finally, another interesting perspective is that provided by Neumann (2011). For him, the peace and reconciliation efforts of medium and small countries are a means to maintain a system with which they are reasonably satisfied, because they are not as well equipped as bigger powers to deal with other (more violent) types of conflict resolution methods, and he refers specifically to the institutionalisation of peace and reconciliation efforts by Norway.To conclude, Norway's peacebuilding policy may be understood as apparently idealist (value-oriented diplomacy) and based on a self-image as a nation for peace, which includes both idealist (moral responsibility) and realist (influence in the international arena and security) motivations. Until now, there have been no major conflicts between those two angles (Stokke, 2014), but in an increasingly polarised world, it is becoming more and more difficult for Norway to maintain a balanced policy in peacebuilding processes. 3. THEORETICAL FRAMEWORKThis study draws on the theory of constructivism to explain Norway's national role conception and considers the notions of idealism and realism to explain mediation as its foreign policy. A theoretical framework based on such apparently antagonistic ideas is, perhaps, not very common but, as Barkin (2003) puts it, a constructivist epistemology and a classical realist theory are, in fact, compatible and, moreover, this kind of framework can be useful in International Relations (IR) theory, as it can specify the relationship between the study of power in IR and the study of IR as social constructions. Indeed, constructivism and perceptions can—and are—often applied to fulfil or justify realist objectives and policies.For the purposes of this study, I consider that mediation as foreign policy is a result of idealist (value-oriented) and realist (power) motivations arising from a constructed national identity and role conception.3.1. Constructivism and national role conceptionFor Barnett (2018), constructivism as an international relations social theory is "concerned about how to conceptualise the relationship between agents and structures, but it is not a substantive theory" (p.88). The basic premise is that the world is socially constructed, which means that "social reality is a product of human consciousness. Consciousness is created and constituted through knowledge that shapes meaning and categories of understanding and action; such knowledge and meanings can be institutionalised in social life; and this institutionalisation, in turn, shapes the construction of social reality" (p.88). These categories shape not only external reality but also its actors, which is an indicator of the importance of the social construction of interests and identity. For example, Norway's identity may shape its national interests, and one of those interests might be security, but the concept of security and how it can be achieved may be linked to Norway's identity.National Role Conceptions, a concept first developed by Holsti (1970), is defined as "the policymakers' own definitions of the general kinds of decisions, commitments, rules, and actions suitable to their state, and of the functions, if any, their state should perform [...] in the international system" (p. 245-246). These are, as mentioned in section 2, the main explanation for the role performance of a state, understood by Holsti as the "general policy behaviour of governments" (p. 245). Role performance is also influenced by what he calls role prescriptions, which come from the external environment and have, as some of their sources, system-wide values, the structure of the international system, and the traditions, rules and expectations of states expressed through various legal instruments (p. 246).The notion of national role conception is related to that of politics of identity, which, in Aggestam's words (1999), is a set of ideas that policymakers use to create a sense of solidarity and cohesion and thus to legitimise general trust in a nation's foreign policy. She argues that speeches sometimes reveal subjective we-feelings of a cultural community related to territory, myths, rituals, institutions, and customs, and she refers to the "institutionalisation" of national identity, which makes identity constructions relatively resistant to change. Moreover, citing March & Olsen (1998), she indicates that certain practices and rules of behaviour that legitimise and explain specific identity constructions are reinforced by such institutionalisation.The starting point of the present study is, therefore, the idea that Norway's national role conception is that of a small, rich, peaceful, democratic state, whose official discourse in peace engagement, especially since the 1990s, emphasises its altruistic contribution as a "peaceful nation that has the values, competences and economic resources" for such an endeavour, but whose work is also "beneficial for Norway's own interests" (Stokke, 2014, p.8).3.2. Idealism, realism, and mediation as foreign policyThere is no generally accepted definition of idealism because there is no settled ontology of the term but, according to Wilson (2012), it generally refers to any goal, idea, or practice that is considered impractical from a state perspective, for example the prohibition and disarmament of nuclear weapons, or global eradication of poverty. In IR it is normally used in both the broad and narrow senses. Broadly speaking, idealism seeks to transcend anarchy to create a more harmonious world order while, in the narrow sense, it is a doctrine tied to the inter-war period (1919-1939) and seen as emphasising the growing interdependence of mankind. I shall focus on the first meaning, which refers to "an approach to international politics that seeks to advance certain ideals or moral goals, for example, making the world a more peaceful or just place" (Wilson, 2019).Realism is a substantive theory of IR that considers states to be the main actors in the international arena, and mainly concerned with the pursuit of their own national interests, security, and struggle for power. Realists view the international arena as a sphere without justice, and with active or potential conflict among its members. They show scepticism about the relevance of ethical norms (Stanford Encyclopedia of Philosophy, 2017). This theory has a variety of ramifications but in this study I consider, first and foremost, classical realism because, although idealism is usually heavily criticised by realists, according to Barkin (2003), classical realism perceives the art of international politics as "the practical balancing of the demands of power on the one hand and morality on the other—a dialectic between power and morality [...]. Idealism, for the classical realist, is necessary to inform our actions and underlie our interests in the pursuit of international politics, but realism will always remain a necessary part of relations among states" (p.333). Also relevant is the perspective of neoclassical realism because, while classical realism focuses on the system-level factors, neoclassical realism considers domestic-level factors as variables that can shape foreign policy, which is highly pertinent if NRC theory is used to explain Norway's behaviour in the international arena. Neoclassical realism considers that "objective reality exists, but decision making is impaired by uncertainty and the complexity of the environment" (Rathbun, 2008, p.296).According to Touval (2003), mediation as foreign policy needs to be understood as a policy instrument, as distinct from mediation theory. He argues that it derives from the mediator's perception of the international system, its foreign policy objectives and strategies, and domestic needs. I would also argue that it stems from the mediator's own national role conception and self-perception. Touval (2003) considers that ending a conflict is no longer the main concern of the mediating state, but only a part of a broadly conceived foreign policy as the mediation is also shaped by affairs that are external to the conflict. He highlights three issues arising from a state's international and domestic concerns: (1) mediation is perceived by the public and the officials engaged in it as a moral obligation, which is seldom criticised; (2) foreign and domestic motivations, apart from being an incentive for states to engage in mediation, also shape their strategies and tactics of the mediation; (3) the mediation is evaluated not only in terms of settlement of a dispute, but also the primary goals motivating the mediation. Beriker (2017) offers an expanded perspective of Touval's work, arguing that once mediation is proven to be a viable foreign policy tool, engaging in mediation enables medium-sized powers to create a political space that otherwise would not be available. 4. METHODOLOGYThis study is both descriptive and explanatory, as it inquires more deeply into the events as well as exploring why and how Norway became involved in the Venezuela peace process from 2017 to May 2023. In a deductive approach, existing theories —NRC, mediation as foreign policy, idealism, and realism— are drawn on to explain Norway's behaviour in its peacebuilding policy. The epistemology used is empiricism, since the focus is explanation rather than interpretation, and the ontology is pragmatist because, while the world is understood as existing independently from social actors, the influence of these actors to shape social realities should also be taken into account, together with the fact that, in some cases, this may affect realities existing independently of them.The methods are qualitative, as information provided with quantitative methods would be too superficial for a study that seeks to determine the existence and the characteristics of Norway's engagement in the Venezuelan peace process. The analysis is primarily based on a range of online primary and secondary sources, including government reports, memorandums of understanding, recorded interviews, articles, and academic publications. I consulted these sources, first, for better understanding of the issues and to organise this material around the research question, as well as to identify possible gaps of knowledge. I then conducted semi-structured interviews, with an official from the Norwegian MFA (Ministry of Foreign Affairs) and a Norwegian academic, to fill some of the previously identified knowledge gaps, to record their perceptions, and to triangulate the documentary information thus gathered.The first interview, conducted by videoconference on 2 August 2023, was with Professor Benedicte Bull, from the University of Oslo and, inter alia, president of the Nordic Institute for Latin American Studies, whose research has been focused on Venezuela in recent years. The second was with David C. Jourdan, who coordinates the Norwegian MFA's facilitation team in the Venezuelan peace process. This interview was conducted in Oslo on 8 August 2023. Both Bull and Jourdan have given their consent to use their names in the present study. NOREF was also contacted but stated that it could not give interviews on the Venezuelan peace process. 5. ANALYSIS AND DISCUSSION5.1. Norwegian involvement in the Venezuelan peace processNo official documentary information about the specific manner Norway engaged in the Venezuela conflict during 2017 and 2018 has been found, apart from the mere fact stated in the NOREF website that it was engaged in talks on the conflict in those years. According to its strategic plan 2019-2023, NOREF is a "non-state actor that is able to complement formal Norwegian peacemaking efforts [... and] build directly on the Norwegian tradition of informal conflict resolution". This makes it possible "to support formal peace processes (track I), and informal back-channel conflict diplomacy (track 1.5 and 2)" (NOREF, 2019). This institution has a permanent staff of professionals, experts in conflict resolution, and is governed by a board whose director is appointed by the Norwegian MFA, and whose members come, in general, from different areas of the public sector. In the interview with David C. Jourdan of the Norwegian MFA (2023), he confirmed that NOREF's engagement consists of track 2 approaches. Moreover, he stressed that, although NOREF receives public funds and works closely with the Norwegian state, it is a separate, independent institution. Norway's involvement in the peace process after 2019, when it became public, is described in some detail below. 2019: the first official talksAccording to the Norwegian MFA (2023), Norway has been involved in Venezuela since 2018. However, it was only in May 2019 that talks between the Venezuelan parties, facilitated by Norway, first became public. In this early stage, the negotiations between the delegations of Nicolás Maduro and Juan Guaidó lasted until August 2019, and although significant progress was made, no agreements for solving the political conflict were reached. However, the Norwegian MFA (2023) stresses that these negotiations were a stepping-stone for further talks between the parties, which signed a collaboration agreement in June 2020, with the objective of using frozen funds in the U.S. for a joint response to the COVID-19 pandemic, with support from the Pan American Health Organisation. Several newspaper articles describing the negotiations during that year provide additional information that has been used in this study.In May 2019, Juan Guaidó sent a delegation to Oslo to participate in exploratory talks with representatives of Maduro's government to try to find a solution to the political crisis the country had faced since Guaidó declared himself acting president of Venezuela at the beginning of that year (NRK, 2019a), information that was confirmed by Jorge Valero, Venezuela's ambassador to the UN in Geneva, and the UN spokesperson in New York, Stephane Dujarric. The Norwegian Broadcasting Corporation (NRK) reported the talks for the first time on 15 May but, according to an anonymous source, this was the second time that the parties had been in Oslo, and negotiations had previously been taking place in Cuba.Shortly afterwards, on the night between 16 and 17 May, the Norwegian Ministry of Foreign Affairs issued a press release confirming that there had been contacts between key political actors in Venezuela as a part of an exploratory phase aiming to find a solution to the country's situation. The Maduro government representatives present at the talks were Héctor Rodríguez, governor of the province of Miranda, and Jorge Rodríguez, minister of Communication. The opposition representatives were Gerardo Blyde, member of parliament, and Fernando Martínez Mattola, who had been minister during the government of President Carlos Andrés Pérez.In the last week of May 2019, the Norwegian minister of Foreign Affairs confirmed that the parties would travel again to Oslo during the following week to continue with the process (NRK, 2019b). Almost at the same time, Juan Guaidó insisted that the meetings in Oslo were not part of a dialogue or negotiation, but a mediation in Norway (El Nacional, 2019). According to Voice of America/Voz de América (VOA) (2019a), Nicolás Maduro appeared a few days later on the Venezuelan public TV channel after the opposition declared that the conversations in Oslo that week had ended on 29 May without any agreement being reached. Maduro stated that conversations had been taking place in secret during the three previous months, that he was proud of his delegation, and that dialogue with the opposition had been constructive. Moreover, he insisted on his wish to find a peaceful solution for Venezuela. Indeed, VOA pointed out that Dag Nylander, a Norwegian diplomat who would become chief facilitator of the Venezuelan peace process, had been travelling to Caracas and meeting with the political actors involved in the crisis since January 2019.The peace talks resumed one month later in Barbados. On 11 July 2019, after three days of conversations, Norway announced that the negotiations would continue (Reuters, 2019). Yet, only a few weeks later, the Maduro government withdrew from the talks when the U.S. president, Donald Trump, announced his decision to block U.S. citizens from engaging in business in Venezuela and to freeze the country's assets in the U.S. According to the Venezuelan government, this had been instigated by Juan Guaidó, while the opposition accused the government of reneging on its commitment to dialogue. Norway's facilitator, Dag Nylander, took note that the planned meetings would not take place and emphasised Norway's role as a facilitator acting at the request of the parties and planning the meetings according to their availability. He added that the facilitation process would continue as long as the parties wished, and provided that there was a realistic position on a solution in the best interests of the Venezuelan people (VG, 2019).According to Bull (2023), Norway, as the facilitating country, was displeased when the talks went public in May, believing that this was premature and that it would complicate the peace process. She also stresses that the Trump administration had no clear strategy for ending the conflict and that, when the U.S. sanctions were announced, there had not been any proper coordination with Norway. She also notes that mentions of the U.S. seem to refer to a single homogeneous actor, when the reality is that there are many actors involved, among them the Pentagon and the Department of State, and these actors may work in different directions, sometimes disrupting a given policy. The Norwegian MFA (2023) confirms it was not aware of the U.S. sanctions that were announced in early August 2019. Both parties and facilitator were taken by surprise.2021: The signing of a Memorandum of Understanding and negotiation rounds in MexicoA year and a half later, in March 2021, new exploratory talks began after the Biden administration's position on Venezuela allowed the parties to negotiate a Memorandum of Understanding (MoU), which led to the launch of a new negotiation process, starting in August that year. On 5 August, the Mexican President, Manuel López Obrador confirmed that Mexico would host talks between the government of Venezuela and the opposition (Reuters, 2021) and, a few days later, the Norwegian government confirmed its involvement with a tweet (Ministry of Foreign Affairs, 2021a). The new negotiation process was launched in Mexico City on 13 August, with Dag Nylander as chief facilitator, Jorge Rodríguez representing the Venezuelan (Maduro's) government, and Gerardo Blyde representing the Unitary Platform (the opposition). A MoU —which I refer to in more detail in section 5.3— was released, defining the objective, agenda, method, and composition of the negotiation team. The Norwegian minister of Foreign Affairs, Ine Eriksen Søreide, declared in a press note that the parties were ready to negotiate constructively and that, in the process, they would consult members of civil society as well as political actors. She also noted that there was mutual agreement on the sensitive nature of the negotiations, which was necessary for giving the parties space to make progress (Norwegian MFA 2021b).A second round of negotiations took place at the beginning of September 2021. The parties released a joint statement reporting that two agreements had been reached, the first being to act jointly in the claim of Venezuelan sovereignty over Guyana Esequiba, and the second, a "partial agreement on the social protection of the Venezuelan people". The parties conveyed that the points to be addressed in the following round of negotiations would be "respect for the Constitutional Rule of Law", protection of the national economy, and measures for the social protection of the Venezuelan people.Between the second and the third rounds of negotiation, Erna Solberg, the Norwegian Prime Minister, spoke at the UN General Assembly on 21 September, referring to Venezuela as a country where human right violations were occurring. Her comment was criticised by Dag Nylander as it could, he said, damage the credibility of Norway's role. In a tweet on 25 September, the MFA reaffirmed its commitment as an impartial facilitator in the negotiations and declared that the statement in the UN should not be interpreted as being inconsistent with that (NRK, 2021). The Venezuelan government responded to this diplomatic hitch with a slight delay in proceedings when its representatives arrived one day late at the negotiation round scheduled in Mexico from 24 to 27 September, but which finally took place after 25 September (Euronews, 2021).After this third round of negotiations, the parties released a new joint statement, focused this time on the issue of inclusion and, specifically, on the need for a gender focus in the negotiations, identification of inclusive consultation mechanisms for political and social actors, and condemnation of xenophobic attacks on Venezuelan migrants that had recently occurred in Chile. According to an article by Diego Santander in the Spanish newspaper El Mundo (2021), this third round was so fraught with problems that no specific agreements were reached. Maduro's delegation insisted on its plans to include Alex Saab in the negotiation. Saab, a Venezuelan businessman, was accused of being Maduro's front man, and a key figure in the international economic and financial activities to circumvent the U.S. economic sanctions against his government. However, Saab had been arrested for money laundering in June 2020 in Cabo Verde and was extradited to the U.S. on the weekend of October 16.Negotiations, set for 17 October, were suspended on 16 October when the Maduro government decided not to participate in the next round of negotiations, because of Saab's extradition, which Jorge Rodríguez referred to as a "kidnapping" as it had been carried out "without a warrant and without due process" and accused the U.S. of trying to prevent the dialogue (Gilbert, 2021). The Norwegian government then tweeted that it was still convinced that the negotiations were the only solution for Venezuela, and that it would keep working to encourage the parties to continue (Norwegian MFA, 2021c). In Bull's opinion (2023), while the U.S. system may have its faults, the legal proceedings are independent from political powers so, on that occasion, there was little that U.S. politicians could do to stop the extradition.2022 — 2023: talks after the beginning of the war in UkraineIn March 2022, a new chapter of the dialogue began after the Russian invasion of Ukraine. A U.S. delegation formed by members of the Department of State visited Caracas to meet with the Venezuelan government and discuss an eventual isolation of Vladimir Putin. Some analysts also indicated that Venezuela was seen as a possible alternative oil supplier if the U.S. opted to restrict oil exports from Russia, which meant that removal of the sanctions on Venezuela could be considered (VOA, 2022a). Indeed, in May 2022, the U.S. announced that economic sanctions against Venezuela would be eased as a gesture in favour of reactivating the dialogues and also allowing the U.S. company Chevron to negotiate potential future activities with the state-owned oil and natural gas company PDVSA (Agobian, 2022). According to the Norwegian MFA (2023), these actions were a catalyst for the reactivation of the negotiations.Immediately after the announcement, Jorge Rodríguez and Gerardo Blyde met to discuss renewal of the talks (Ocando Alex, 2022a) but, by the end of May, according to Reuters, the Venezuelan government had demanded the withdrawal of Norway as a facilitator, and the presence of Russia (formally an accompanying country in the negotiations after 2021) as conditions for reactivating the negotiations. However, convinced that the Norwegians were their only guarantee for a successful process, the opposition disagreed (Oré, 2022). Bull (2023) specifies that the stance of the Venezuelan government might have been because it saw Norway as taking an excessively "pro-allies" position after the start of the war in Ukraine. She adds that Norway prefers to involve Russia and other big powers in the negotiations rather than excluding them, as they would provide legitimacy to the Mexico talks as the only acceptable platform for solving the Venezuelan political crisis. When interviewed, David C. Jourdan of the Norwegian MFA (2023), made it clear that Norway was never asked to relinquish its role as facilitator. Management of the process resides with the parties, which have remained committed to the MoU that names Norway as the facilitating country.On 21 and 22 June 2022, the Norwegian government held the Oslo Forum, an annual retreat focused on conflict mediation and peace processes. Around 100 conflict mediators, experts, peace process actors, and high-level decision makers from around the world gathered at Losby Gods Manor with the goal of sharing their experience on conflict resolution and peace diplomacy (Norwegian MFA, 2022). Among the peace process actors who attended the Oslo Forum were Jorge Rodríguez and Gerardo Blyde. A Norwegian source told VOA (2022b) that it was "probable" that the conversations would be initiated again, but "not immediately".On 14 September 2022, a group of 18 countries from the Americas and Europe agreed to call upon Maduro and the opposition to urge a resumption of the negotiations in Mexico (Ocando Alex, 2022b).Official negotiations began again on 26 November 2022. This time, a joint statement was issued indicating that the main agenda of the meeting would be social protection of the people. A partial agreement was reached, in which the measures agreed upon were: 1) creation of an organism to implement specific actions and programmes for the social protection of the Venezuelan people (Mesa Nacional de Atención Social, or MNAS); 2) creation of an organism auxiliary to the MNAS to evaluate its processes and the effects of implementation of the measurements adopted; 3) definition of the social areas which, requiring the most urgent attention, needed to be addressed through specific programmes, in particular the public health system, the national electrical system, development of the World Food Programme, educational infrastructure, and rebuilding of the infrastructure damaged as a consequence of the torrential rains in the latter half of 2022; 4) requesting from the UN support for the design and creation of a fund for social support of the Venezuelan people; 5) identification of frozen assets belonging to the Venezuelan state that might be progressively accessed and incorporated into this fund; 6) creation of a commission to assess and verify implementation of the agreement.After this meeting, the negotiations stalled again when the Venezuelan government accused the opposition of not complying with the agreement reached but, mainly and above all, because the frozen US$3,000 million that were to be incorporated into the Fund for the Social Protection of the Venezuelan People had not yet been released (August 2023). According to Maduro, this was a condition sine qua non for resuming the talks. The Colombian president, Gustavo Petro, organised a conference on 25 April 2023 in Bogotá, with representatives from numerous countries to discuss the Venezuelan situation. The shared positions of the Venezuelan government and the opposition were explained to the international community, in particular regarding the removal of sanctions, free elections, and reactivation of the peace talks. One of the shared positions for renewal of the talks was that of establishing the Fund for the Social Protection of the Venezuelan People (Ramírez Vargas & Alcalde, 2023). The message that came out of the Venezuela Conference of Bogotá was very clear: the UN trust fund for Venezuela should be set up as swiftly as possible. According to a Reuters report by Spetalnik, Sequera and Armas (2023), on 19 May the Biden administration notified the UN that the money could operate within the U.S. financial system, and that there would be no risk of creditors seizing it to repay the outstanding Venezuelan debt. Accordingly, the UN-administered fund could have been operative at the end of May 2023. However, the decision to establish the trust fund ultimately lies with the UN Secretariat in New York and some insiders allude to the complexity of the process involved and stress that establishing the fund depends on a number of factors. As of late August 2023, it had not been established by the UN. 5.2. Norway's distinctive approach to peace diplomacyIn an interview for the Centre of Humanitarian Dialogue, when asked about the distinctive approach of Norwegian diplomacy in international conflicts, Dag Nylander (2020) identified four main elements: (a) collaboration with Norwegian and international NGOs, (b) low-key diplomacy, (c) long-term commitment, and (d) the ability to make quick decisions.[5] In this section, these four elements will be briefly discussed.Norway's distinctive approach to its engagement in peace processes and with non-state actors was defined after the decentralisation of its foreign policy in the early 1990s. Humanitarian assistance and development policies called for closer cooperation between the Norwegian MFA and non-governmental actors and, according to Lehti (2014), this approach was extended to the area of peace-making. In the 1990s the Ministry responded positively to proposals and initiatives from various NGOs and well-connected individuals with regard to conflictive areas. The range of actors involved in peace-making was broadened, and Norway was then able to act beyond the bounds of government-centred diplomacy with a distinctive, more informal approach to peace diplomacy. Ann Kelleher and James Taulbe (2006) refer to this approach as "Track I½ Diplomacy", understanding Track I diplomacy as that with official representatives of governments and Track II diplomacy as that involving unofficial representatives and sectors of the civil society. An important feature of the collaboration between the state, NGOs and research institutions is that it is extensively funded by the state (Bandarage, 2011). Indeed, some Norwegian NGOs receive more than 90% of their funding from the state which, in Kelleher's view (2006), almost makes them quasi-governmental organisations.As for low-key diplomacy, Nylander (2020) affirms that activities pertaining to peace diplomacy rarely appear in the news, and that they are discreet and unnoticed, often with the involvement of low-level and mid-level diplomats, an approach that allows flexibility in seeking opportunities and in dealing with problems with relative freedom.Norway's long-term commitment to peace diplomacy is based on a broad political consensus for the promotion of peace and reconciliation. Hence, changes of government will not influence the country's engagement in any given conflict. According to the MFA (2000), the goal is not only ending violence but also support for economic, social, and political processes that lead to durable liberal peace in the country concerned.Finally, the ability of Norwegian diplomats to make quick decisions stems from the smallness of the country, not only in terms of population but also social distance. Dag Nylander (2020) mentions that the distance between a diplomat in the field and the ministry of Foreign Affairs is very short, and that it takes just a quick phone call or a text message, sometimes directly to the Minister, to obtain any clearance that may be needed. 5.3 Norwegian approach to facilitation the Venezuelan peace processNorway's approach to facilitation in Venezuela is consistent with its work in other peace processes. It began with secret talks between the parties (low-key diplomacy) and then, having advanced towards a more public and official format, it was formalised with the MoU signed in Mexico on 13 August 2021. In the MoU, the parties defined the agenda and methods for the talks. David Jourdan of the Norwegian MFA (2023) highlighted the importance of this Memorandum, which contains not only the agenda and format for the negotiations, but also a shared vision of the process and the country.As for the method, it is important to mention that it is based on a "nothing is agreed until everything is agreed" principle (comprehensive approach), although partial agreements can be reached if the parties consider that a subject has been sufficiently discussed and urgent action is required. This was the case with the two partial agreements on the Guyana Esequiba, and Social Protection of the Venezuelan people signed at the end of the talks in Mexico. This approach has its advantages, such as ensuring "big picture" negotiation, but it also comes with the risk the parties can renege anytime on anything they have agreed to. It was first used in other peace processes including Britain-Ireland in 1995, Palestine-Israel, and in Cyprus and Colombia. The Norwegian MFA (2023) emphasises that understanding the needs of the parties and ensuring that they are in charge of the process, has been key to making progress throughout the negotiations. The Venezuelan conflict is political in nature and requires political solutions, and the negotiation process provides a confidential space where the two parties have an opportunity to reconcile their interests. David Jourdan, sharing the MFA's approach to the political process, points out that Norway has probably been a more active facilitator in the Venezuelan negotiations than in other peace processes.An essential point of the MoU is participation, as it establishes mechanisms of consultation for political and social actors. The aim is for the process to be as inclusive and legitimate as possible. However, there is little information available as to whether this is actually the case and David Jourdan (2023) admits that it is not yet possible to speak of results in this area.Moreover, it should be noted that the Norwegian approach to facilitation, based on discretion and confidentiality, is one thing and how the parties actually behave is quite another matter. On more than one occasion, as can be seen in several documents and declarations, the Norwegian government has emphasised the need for the parties to be careful with their public declarations. In an interview with El País in February 2023, Anniken Huitfeldt, Norwegian Minister of Foreign Affairs, wryly acknowledges an anecdote sometimes repeated by high-profile Venezuelan politicians, according to which politicians will normally control themselves in public but, in private, tell someone else what they really think but, in Venezuela, the opposite occurs: what is said in private becomes amplified in front of a microphone (Lafuente 2023). Vicente Díaz, former director of the Venezuelan National Electoral Council, who participated in the talks held in the Dominican Republic, Oslo, and Barbados says that, since the process in Mexico was "very public" (as occurred in the Dominican Republic), it created difficulties for the parties, since national and international expectations were generated, which meant that more attention was given to audiences than to the talks (openDemocracy 2022). 5.4 Norwegian interests in VenezuelaIn this section and in keeping with the theoretical framework described above, I discuss four possible reasons for Norway's mediation in the Venezuelan conflict: (a) peace and stability (value-oriented diplomacy), (b) reputation, (c) political interests, and (d) economic interests.Value-oriented diplomacy focused on peace promotion makes sense for Norway, a country whose identity as a peaceful country and peace broker has existed at least since the late 19th century. Those values are so widely embedded that a broad political consensus exists among the population over a peace promotion policy, supported institutionally and by an extensive network of non-state actors coordinated by the state. Norway's constructed identity as a peace broker (especially intensified since the 1990s) means that the country acts as such. Moreover, promotion of such values makes even more sense when security has become globalised, and when a conflict in a faraway country can have humanitarian, political, economic, and ecological consequences in distant parts of the world. In this sense, value-oriented diplomacy may acquire realist motivations although, according to Bull (2023), this is discourse that appeared, above all from the 1980s, to justify Norway's involvement in peace processes. One of its proponents was the diplomat and former Labour Party politician, Jan Egeland.Ensuring peace and stability in Venezuela could, for example, (1) help to mitigate the external displacement crisis, which mainly affects neighbouring countries like Colombia and Ecuador as well as the U.S. and others in Europe, with all the humanitarian and economic consequences for those receiving refugees; (2) ensure Venezuela's participation, as a democratic state, in international organisations, thus promoting democratic values and human rights; (3) promote social and economic development in the country, which would create value for its nationals as well as attracting international investment and; (4) finally, through social and economic development, reduce the presence of paramilitary organisations in the country, including the Ejército de Liberación Nacional (ELN), which is involved in drug trafficking. During the interview with David Jourdan (2023), we shared these points and he replied that this may well be so, but that such possibilities could also arise as a consequence of a political settlement that includes the removal of the sanctions. He added that the main reasons for Norway's peace diplomacy are the goals of preventing and reducing human suffering, as well as contributing to peaceful societies and stability.Peace diplomacy does not give rapid results (when it actually gives results), but Norway sees it as a policy consistent with its values, and as one whose long-term effects are sufficiently relevant as to justify investment in it.When it comes to image and reputation, Norway's approach on peace has been used as a public diplomacy branding tool, together with the country's natural environment and gender equality, to solve one of the image problems of small countries: invisibility.Indeed, discretion and a low profile do not necessarily mean invisibility, and as long as the right aspects of Norway's peace diplomacy are emphasised in a public diplomacy strategy —for example its role as a facilitator, an engaged partner, and good multilateralist— the discretion that peace diplomacy requires would not be jeopardised (Leonard and Small, 2003). Success in mediation of the Venezuelan conflict would, of course, be positive for Norway's image as a peace broker, although this constructed image is also enhanced through pertinent media coverage mentioning the Norwegian involvement during the Venezuelan peace process. This can be explained by NRC theory since the Norwegian image is constructed not only through success in a certain process but also through the mediating process itself. To give one example, the Google search "peace talks Venezuela Norway" offers almost 4.85 million results, while the Spanish search with "mediación de paz Venezuela Noruega" offers 1.28 million results. Moreover, when Norway uses the word "facilitation"2 it transfers responsibility for the results to the parties, implying that it has the role of supporting and accompanying them, but it will not be responsible if the parties decide that they do not want to continue with the process. This safeguard for Norway's image as a peace broker applies to the Venezuelan case.Political influence has also been identified as one of Norway's possible interests. As Matlary (2003) notes, access to key international actors can result from Norway's engagement in peace processes, including in the case of Venezuela, especially in a context of international energy insecurity, and political tensions due to the high-profile conflict between Russia and Ukraine. In my interview with David Jourdain (2023), "close dialogue with key international stakeholders" together with increased political capital were mentioned as benefits that Norway could reap by engaging in Venezuela. He also pointed out that one of the key features of this conflict is the importance of the U.S. as an actor with the capacity to contribute to the outcome of the peace process.The U.S. is now particularly concerned to find new energy suppliers, and ensuring political stability in Venezuela could provide international legitimacy for oil and gas transactions with its government. Giovanna de Michele, internationalist lecturer at the Central University of Venezuela, told VOA that the best way to extract oil from Venezuela would be through U.S. companies, but the sanctions would have to be eased if this was to happen (Ramírez Vargas & Alcalde 2023). Norway offers an internationally recognised platform for making this possible: the talks in Mexico. It could therefore be a key actor in helping to resolve the political crisis in Venezuela while also supporting an ally, which would contribute to its status as a reliable partner of the U.S. However, as Matlary notes, it is difficult to quantify or define the scope of the access Norway gleans from its peace policy.Finally, with regard to economic interests, there are currently no Norwegian state-owned companies operating in Venezuela, although they can be represented through the investments of the Norwegian National Pension Fund3 in foreign companies that do operate in the country, for example, some Colombian companies, among them Bancolombia, Banco Popular, Banco Davivienda, and Cementos Argos. And, at the beginning of 2023, Ecopetrol, which is financed by Norfund, asked the U.S. for permission to negotiate with the state-owned company PDVSA to explore gas imports from Venezuela to Colombia (Quesada 2023). Among Norwegian investments in the U.S. are Chevron and Occidental Petroleum Corp, and the U.S. has recently given permission to Chevron to negotiate with the PDVSA and, at the end of 2022, a United Nations Commission on International Trade Law (UNCITRAL) court found that Venezuela was liable for discriminatory conduct in its payment of dividends from an oil and gas venture and ordered Venezuela to pay US$105 million to a Barbadian subsidiary of Occidental Petroleum Corp (Ballantyne 2022). If an improved political situation in Venezuela increases the revenues of these companies, it could also be positive for Norwegian investments.It should be added that, until 2021, Statoil (later Equinor), the national oil company of Norway, was present in Venezuela where it invested more than one billion dollars between 1995 and 2013 and participated in the Sincor heavy crude oil project with Total and PDVSA. However, due to concerns about the workforce and practical difficulties, Equinor pulled out of the project and transferred its 9.67% participation to CVP, a subsidiary of PDVSA, although it did keep its 51% stake in the exploration license of block 4 on Plataforma Deltana off Cocuina(Øye Gjerde, n.d.). Accordingly, Equinor participation in Venezuela is currently on hold but a greater presence in Venezuela of Norwegian companies, in particular from the oil and gas sector is possible if the country's situation improves.To sum up, although economic links between Norway and Venezuela do exist, they would seem to be limited and not sufficient to explain Norway's participation as a facilitator in the Venezuelan peace process. 6. CONCLUSIONSThe core question of this study is why and how does Norway facilitate the Venezuela peace talks? The results suggest that, for Norway as a facilitator of the Venezuelan peace process, the main goals of mediation-as-foreign-policy are humanitarian, security (better understood as promoting stability in the region), projection of its image as a peaceful nation and a peacemaker, and of its status vis-à-vis key international actors (especially the U.S.).All these goals can be explained through the Holsti's theory of National Role Conceptions (NRC) and Norway's own role prescription as a small, democratic, and peaceful nation, which means it would promote these values through altruistic (idealist) and non-altruistic (realist) actions and perspectives.Interestingly, economic factors do not seem to play a major role as a mediation-as-foreign-policy objective. The economic ties between Norway and Venezuela are presently not significant and, thanks to the diversification of the investment portfolio of the Norwegian National Pension Fund, Venezuela only represents a very small part of Norwegian economic interests.It is therefore relevant to consider the importance of constructivist aspects such as national values and self-conception in shaping the foreign policy of small countries, despite the apparent predominance of realpolitik aspects in an international context of increasing competition. These constructivist aspects offer key information for understanding and explaining the behaviour of small countries and should not be overlooked.Besides, it is worth reflecting on the definition of a mediation success in real, and in mediation-as-foreign policy terms. In the real sense, mediation is successful when it produces long-term reconciliation between the parties, in the eyes of a domestic audience while, for an audience external to the conflict, mediation may be successful simply when a peace agreement between the parties is signed. Meanwhile, for the mediating country or its allies, a mediation is deemed effective when foreign policy objectives are achieved. The approach used by Norwegian mediators in the Venezuelan process is similar to that of previous peace processes. It starts with the organisation of secret meetings and then advances towards a more public and official format. However, some distinctive traits of this peace process have been (1) a somewhat more active role of Norway as a facilitator when compared to other peace processes, (2) the weighty influence of the U.S. in causing setbacks or advances in the negotiations , and (3) premature publicity of this process, when the parties have been too eager to share their views with the press and the public, which may have been an obstacle for achieving progress. Despite these challenges, as of November 2023, Norway has continued to honour its long-term commitment to achieving a peaceful solution to the Venezuelan conflict.This study has created a first timeline of the Norwegian involvement in the Venezuelan peace process by means of consulting information in primary and secondary sources and, when relevant, adding further details obtained in interviews with two experts. This timeline provides an overview of the main milestones of the peace process while highlighting Norway's role as a facilitating country. Possible reasons for its engagement in the Venezuelan peace process have been identified. At a tactical level, the moral and security elements seem to be a high priority for people working in the field. These actors have considerable expertise in conflict resolution and perform their duties diligently. At a more strategic and state-centred level, besides the moral and security components, attention is given to building political capital by means of offering an attractive image to international stakeholders, especially close allies like the U.S. This is, therefore, an excellent example of the importance of peace diplomacy as a soft power tool for a middle-level country like Norway.The limits of the study arise from the nature of an ongoing mediation process. Since silence sometimes carries more weight than words and as discretion is necessary for the process to move forward, only limited information could be directly obtained from relevant actors in the peace talks. In terms of Norway's interests in certain areas, the limits of qualitative methods have not allowed quantification of the importance of each of these interests. The aim of the interviews was to obtain in-depth information that could confirm that such interests exist, and to provide distinctive details that might enrich knowledge of this peace process, rather than quantifying the results. Finally, now that Norway's possible interests as a facilitator have been identified, future research could be addressed at quantifying the weight of each of them in Norway's peacebuilding policy over the last two decades. 7. ReferencesAggestam, Lisbeth. "Role Conceptions and the Politics of Identity in Foreign Policy". ARENA Center for European Studies Working Paper, vol. 99/8 (1999). 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"Idealism in international relations" in: Dowding, Keith (ed.) Encyclopedia of Power, Thousand Oaks: Sage Publications, p. 332-333.Notes:1- Originally consisting of 12 Latin American nations and formally created on 8 August 2017, the Lima Group is a multilateral body whose goal is to explore mechanisms for a peaceful solution to the political crisis in Venezuela and restoration of a democratic order (Government of Colombia 2017).2- In this study, I use the terms "mediation" and "facilitation" interchangeably. However, mediation normally involves a formal mandate from the parties of a conflict, covering involvement in both the substance and process of the negotiation, while a facilitator is less directive (Greminger 2007).3- The Norwegian National Pension Fund, the world's largest sovereign fund, has investments in over 9,000 companies in 70 countries (Oljefondet n.d.).Key words: Venezuela, Norway, national role conception, mediation, peacebuilding, foreign policy, conflict resolution
Overview and introduction "Which organizational forms produce science? Expansion, diversity, and cooperation in Germany's higher education and science system embedded within the global context, 1900-2010". Already the title of my dissertation manifests an approach that examines the topic of the development of scientific productivity in the German higher education and science landscape from different perspectives: levels, dimensions, and an extensive timeframe. Deriving from and contributing to the international research project "Science Productivity, Higher Education, Research and Development, and the Knowledge Society" (SPHERE), my research focuses on the investigation of the influence of higher education development and science capacity-building on scientific knowledge production, globally, comparatively, and considerable depth for Germany, a key science producer for well over a century. Focusing mainly on the different structures and institutional settings of the German higher education and science system, the dissertations shows how these affected and contributed to the long-term development of scientific productivity worldwide. The historical, comparative, and in-depth analyses are especially important in light of advancing globalization and internationalization of science, stronger networks of scientists worldwide, and the emergence of the "knowledge society". The research design combines macro- and meso-level analyses: the institutionalized and organizational settings in which science is produced. Since information about single authors was limited in availability, extensive micro-level analyses were not possible here, yet the research articles analyzed were all written and published by individuals working in organizations, which are in the center of analysis here. By reference to the dimensions expansion, diversity, and cooperation, I elaborated the frame of my investigation, and sorted my research questions, including country, organizational field and form, and organizational levels. The structure of this work (see outline) addresses these themes and the observed timeframe spans the years from 1900 to 2010 – more than a century (see section 1.2). My main goal was to investigate how and why scientists publish their research results in peer-reviewed journal articles. The point is to emphasize the importance of scientific findings/discoveries, because non-published results are non-existent for the scientific community. From the ways and in which formats scientists publish their work, we can deduce how science is organized (within and across disciplines). My dissertation analyzes publications in peer-reviewed journals, because they are the most important format – alongside patents in applied fields – to disseminate new knowledge in science, technology, engineering, mathematics, and health (hereafter STEM+ fields). Articles not only record new knowledge, but also contribute to the reputation of researchers and their organizations. Journal publications in reputable journals with peer-review have become the "gold standard" measure of scientific productivity. Within the last several decades, the scientization of many dimensions of societal life proceeded, and the generation of new knowledge increasingly became the focus of political, economic, and social interests – and research policymaking. Therefore, it is important to identify the institutionalized settings (organizations/organizational forms) in which science can best be produced. Here, the diverse types of organizations that produce science – mainly universities, research institutes, companies, government agencies and hospitals – were identified and differences and similarities of these organizational forms were analyzed on the basis of their character, goals, tasks, and the kinds of research their members produce. In a first step, I show why I structured my work at the interface of higher education research, science studies, and bibliometrics (see chapters 2 and 5). Analyzing publications is still the key task of bibliometrics, but the results are used by many other actors as well: higher education managers, politicians, and scientists themselves to make claims about the quality of science, to compare each other, or to influence the structure, organization, and output of the higher education and science system. While it is difficult to make direct statements about the quality of research on the basis of simply counting the number of research articles a scientist publishes, the quality of journals is used as a proxy to compare across disciplines. To measure quality, other parameters are necessary. Thus, here statements focus on the quantity of science produced, not on the intrinsic quality of the analyzed research articles, the specific research achievements of individual scholars, organizations or organizational forms, or even countries. Nevertheless, output indicators elaborated here definitely show the huge expansion of scientific production and productivity, the stability of the research university over time as the most important science producer in Germany, but also rising differentiation and diversification of the organizational forms contributing to overall scientific output. Furthermore, the start of a considerable and on-going rise in national and international collaborations can be dated to the early 1990s. The chapter about the multidisciplinary context (see chapter 2) discusses the relationship between higher education research and science studies in Germany as well as the special position of scientific knowledge in comparison to other forms of knowledge. Scientific knowledge is generated, distributed, and consumed by the scientific community. To get an overview about the most important studies in the field, and to contextualize my work within the already existing empirical studies, I describe the current state of research in chapter 3. Research questions Section 1.2 provides a detailed description of my research questions: Which organizational forms produce science? 1. How has worldwide and European scientific productivity developed between 1900 and 2010 in comparison? 2. How has the German higher education and science system been embedded in the global developments of higher education and science over time? 3. How has scientific productivity in Germany developed between 1900 and 2010? 4. Among all science-producing organizational forms, what do the key organizational forms contribute to scientific productivity? 5. Which organizational forms provide the best conditions for scientific productivity? 6. Which single organizations produce the most research in Germany? 7. What is the impact of increasing internationalization of research on national and international cooperation, measured in publications in scientific journals? Theoretical framework Theoretically (see chapter 4), I apply a neo-institutional (NI) framework to explore and explain both the tremendous expansion of higher education and science across the world and considerable differences across time and space in the institutional settings, organizational forms, and organizations that produce scientific research in Germany. Sociological NI focuses on understanding institutions as important in guiding social action and shaping processes of social development. Such an approach emphasizes the development, functioning, and principles of institutions. Milestones in NI describe the nexus of organization and society supposing that organizational structures express myths and reflect ideals institutionalized in their environment. While capturing, copying, and asserting these, structural similarity (institutional isomorphism) between organizations in society will be established. The concept of "organizational field" emphasizes relationships between organizations within an environment. Organizational fields (communities) consist of all relevant organizations. In section 4.1.2 I discuss the differences between institutions and organizations and the difficulty of a distinction of the terms, especially in German-speaking sociology, which does not distinguish clearly between these terms. Fundamentally, NI approaches differ in the dimensions or pillars and levels of analysis they privilege (see figure 5, p. 80), but they share fundamental principles and the theoretical framework. Thus NI is particularly suitable for a multi-level analysis of scientific productivity across time and space. The historical development of the German higher education and science system must analyzed considering also global developments, because on the one hand it had an enormous impact on the development of other systems worldwide, and, on the other hand, global trends affect the on-going institutionalization and organization(s) of science in Germany. Intersectoral and international cooperation is growing and becoming increasingly important, leading to diverse networks within and between higher education and science systems worldwide. The classical, national case study is hardly longer possible, because macro units like countries are highly interdependent, embedded in global, regional and local relationships, such that borders between the global and the national dimension are increasingly blurred. Nevertheless, countries are units with clearly defined boundaries and structures, thus they can be handled as units to compare. The theoretical perspectives and different levels of analysis addressed here are displayed in Figure 5. I apply the "world polity" approach as a broader lense with which to make sense of the truly global arena of higher education and science (macro level). The focus of this perspective is on global and international structures and processes, which developed over time. Through this perspective, I explore global diffusion and formal structures of formal principles and practical applications. Combining historical and sociological institutionalism helps to focus on developments and processes over time on the meso level, to explain how institutions have developed and change(d). The concepts of "critical junctures" and path dependencies are useful to explain these processes over time. To describe the transformation of knowledge production over the entire twentieth century, and to analyze different organizational forms that produce science in Germany, two prevalent theoretical concepts are discussed: Mode 1 versus Mode 2 science, and the Triple-Helix model to describe the relationship between science, industry and state. In "The New Production of Knowledge" Michael Gibbons and his colleagues describe the transformation of knowledge from an academic, disciplinary, and autonomous – "traditional" – organization of science (Mode 1) with a focus on universities as the key organizational form, to a more applied, transdisciplinary, diverse, and reflexive organization of science (Mode 2) that features a more diverse organization of science, relying on a broader set of organizations producing knowledge. Within the literature, debates center on whether this new model has replaced the old, and which of these models best describes the contemporary organization of science (here: the STEM+ fields). In turn, the Triple-Helix model preserves the historical importance of the universities. This approach assumes that future innovations emerge from a relationship between universities (production of new knowledge), industry (generation of wealth), and state (control). Data and methods In these analyses, only peer reviewed journal publications were used – as the best indicator for measuring the most legitimated, authoritative produced science. This focus enabled an investigation of publications in-depth and over a 110 year timeframe. Research articles in the most reputable, peer-reviewed, and internationally reputable journals are the gold standard of scientific output in STEM+. The data I used is based on a stratified representative sample of published research articles in journals in STEM+-fields. My measure relies on the key global source for such data, the raw data from Thomson Reuters' Web of Science Science Citation Index Expanded (SCIE) (the other global database is Elsevier's Scopus, which also indexes tens of thousands of journals), which was extensively recoded. Methodologically, my approach is based on a combination of comparative institutional analysis across selected countries and historically of the German higher education and science system, and the systematic global evaluation of bibliometric publication data (see chapter 6). The SCIE includes more than 90 million entries (all types of research), mainly from STEM+-fields. I focus on original research articles, because this type of publication contains certified new knowledge. The SPHERE dataset covers published research articles from 1900 to 2010. From 1900 to 1970, we selected data in 5-year-steps in the form of a stratified representative sample. From 1975 onwards full data is available for every year. Depending on the research question, either five or ten-year steps were analyzed. A detailed description of the sampling and weighting of the data can be found in chapter 6. In consideration of the criteria above, I analyzed 17,568 different journals (42,963 journals were included into the database if we count the same journals in different years), and a total of 5,089,233 research articles. To prepare the data for this research, it had to be extensively cleaned and coded. Very often our international research team found missing information on the country level and/or on the level of organizations/organizational forms. From June 2013 to December 2015, research in the archives of university libraries was necessary to manually add missing information, particularly organization location and author affiliations. In the field of bibliometrics, we find different methods to count publications. In this work, I mainly apply the "whole count" approach (see table 1, p. 126). This decision is based on the assumption that every author, organization, or country contributed equally to a publication. An overestimation of publications can't be precluded, because research articles are counted multiple times, if a paper is produced in co-authorship, which has been rising worldwide over the past several decades. The absolute number of publications (worldwide, Europe, Germany) is based on a simple counting of research articles (without duplicates, in cases of co-authored articles). Summary of the most important results The empirical part of my work is divided into three parts. In the following sections, I will present the most important findings. The global picture – higher education and science systems in comparison The central question of my research project was "which organizational forms produce science"? For a better understanding and classification of the results of my case study, I embedded the German higher education and science system into the European and global context. I answered the questions "how did the worldwide and European scientific productivity developed between 1900 and 2010 in comparison", and "how was/is the German higher education and science system embedded in global developments of higher education and science over time" as follows: First, I show that the worldwide scientific growth followed a pure exponential curve between 1900 and 2010 (see figures 3 and 10; pp. 50, 147) – and we can assume that this strong upward trend continues today. The massive expansion of scientific production had and still has a tremendous influence on societal developments, beyond simply economic and technical developments, but rather transforming society. I show that higher education and science systems worldwide exhibit communalities, which have led to similar developments and expansion of scientific productivity. The comparison of important European countries (Germany in comparison with Great Britain, France, Belgium and Luxembourg) uncovered the contribution of the development and spread of modern research universities and the extraordinary and continued rise in publication output (see section 7.2; Powell, Dusdal 2016, 2017a, 2017b in press). Within the global field of science, three geographical centers of scientific productivity have emerged over the twentieth century: Europe, North America, and Asia. Their relative importance fluctuates over time, but today all three centers continue to be the key regions in the production of scientific research in STEM+ journals. Especially in Asia, the growth rates have risen massively in recent years (Powell et al. 2017 in press). Second, I investigated that all countries worldwide invest more into research and development (R&D) (figure 9, p. 140). These investments have a clear impact on the scientific productivity of nations, yet there are important differences between countries in absolute production and productivity rates. Alongside direct investments in R&D or the application of patents in STEM+-fields that influence the expansion of science, the capacity for producing more knowledge fundamentally depends on rising student enrolments, a growing number of researchers, the widening of research activities into various arenas of society, the development of products, and the (re-)foundation of universities (Powell, Baker, Fernandez 2017 in press). As part of the higher education expansion and massification during the 1960s and 70s, the numbers of researchers and students rose tremendously. The growth of scientific publications thus results from the on-going institutionalization of higher education and science systems worldwide. The growth of publications is also explained by the steady growth in the number of researchers working within these growing – and increasingly interconnected – systems. Third, I could reject the argument of Derek J. de Solla Price that the pure exponential growth of scientific literature has to flatten or would slow-down several decades after the advent of "big science" (see paragraph 2.4; figure 4 and 10; p. 53, 147). Although radical historical, political, economical, and technical events (see figure 11, p. 150) led to punctual short-term decreases in publication outputs, the long-term development of universities and other organizational forms producing science led to sustained growth of scientific publications, with the numbers of publications rising unchecked over the long twentieth century. In 2010, the worldwide scientific productivity in leading STEM+ journals was about one million articles annually. Fourth, I could show that the absolute numbers have to be put into perspective and standardized in relation to the investments in R&D, the size of the higher education and science systems, the number of inhabitants (see figure 12, p. 159), and the number of researchers (table 3, p. 162; figure 13, p. 164). The initial expansion of scientific publications in STEM+-fields is based on a general growth of higher education and science systems. The different institutional settings and organizational forms that produce science have an impact on scientific productivity. The selected country case studies – Germany, Great Britain, France, Belgium and Luxembourg – demonstrate that systems with strong research universities are highly productive; they seem to provide conditions necessary for science. As a result, not only the number and quality of researchers is important, but also the institutional and organizational settings in which they are employed. Fifth, in international comparison, Germany continues to contribute significantly to scientific productivity in STEM+ fields. With an annual growth rate of 3.35%, Germany follows the United States and Japan. In 2014, German governments invested €84.5 billion in R&D – 2.9% of overall GDP. The EU-target of 3% by 2020 was barely missed. In 2010, Germany produced 55,009 research articles (see table A5). In comparison to Great Britain, France, Belgium and Luxemburg, Germany still leads in scientific output in Europe –comparing just the absolute numbers. The size of the country itself and the institutionalization of the higher education and science systems influence publication outputs, of course, with these absolute numbers in relation to other key indicators showing a different picture. Standardized by the number of inhabitants, Germany published less articles per capita than Belgium and Great Britain. The number of researchers amounted to 327,997 (FTE) in 2010. The ratio of inhabitants to scientists was 1,000:4. Among these countries studied in-depth, Luxembourg and Great Britain had more researchers per capita than did Germany. The interplay of the organizational forms of science in Germany between 1900 and 2010 On the basis of the analysis of the global and European contexts, and development of worldwide scientific productivity over time in chapter 7, I started the in-depth case study of Germany. Bridging this overview and the following in-depth analyses is a chapter on the institutionalization of the German higher education and science system (see chapter 8). Here, I described the most important institutions and organizations and the organizational field – universities, extra-university research institutes and universities of applied sciences. Furthermore, I discussed the differences between West and East Germany during their division (1945–1990). Summarizing the most important results shows that the development of publications in Germany follows global and European trends (on a lower scale) (see figure 16, p. 208). Over time, Germany experienced pure exponential growth of scientific publications and a rising diversity of organizational forms that contribute to scientific productivity (see sections 9.1 and 9.3). I answered the following three research questions: "how has the scientific productivity in Germany developed between 1900 and 2010", "among all science producing organizational forms, what do the key organizational forms contribute to scientific productivity", "which organizational forms provide the best conditions for scientific productivity", and "which single organizations are the most research intense in Germany"? First, the growth curve of scientific publications in Germany turns out as expected – it shows pure exponential graph, comparable with the worldwide and European development of scientific productivity between 1900 and 2010. Here, too, cataclysmic events such as the two world wars and the Great Depression as well as reunification had only short-term (negative) impact (figure 11, p. 150) on scientific productivity, without even a medium-term slow-down or flattening of the curve. By 2010, the total number of publications in STEM+ fields by researchers in German organizations topped 55,000 in one year alone. Second, a detailed examination and comparison of the development of scientific productivity in West Germany and East Germany between 1950 and 1990 showed that the growth rate of Germany (altogether) was based mainly on steady growth of scientific publications in West Germany (see figure 17, p. 211). The growth curve of the former GDR was quite flat and proceeded on a very low level. As a result, I conclude that the GDR's higher education and science system, based on its academy model, did not provide conditions for scientific productivity as optimally as did the BRD. Third, a detailed analysis of the "key classical" organizational forms of science – universities and extra-university research institutes – show that universities were and are the main producers of scientific publications in STEM+ from 1975 to 2010 (see figure 18, p. 217). On average, university-based researchers produced 60% of all articles and defended their status against other organizational forms, which leads to the rejection of the Mode 2 hypothesis. Non-university publications reached an average of 40%. But that does not mean that other organizational forms were not producing science as well. The percentage share of articles is ultrastable and shows only marginal variations. The thesis that the proportion of university publications should decrease over time can be rejected for the period from 1975 to 2010. This suggests that scientific productivity of universities is actually rising, since despite decreasing financial support (R&D) in favor of extra-university research institutes, the universities produced more research articles with less resources over time. Fourth, although not only scientists within universities and research institutes publish their research in scientific journals, jointly these organizational forms have produced more than three-quarters of all research articles since 1980. Already in the earlier years, they produced a large number of scientific articles. Other organizational forms also generate scientific knowledge (for an extensive description of the organizational form matrix, see table 4, pp. 222f.). Especially scientists in firms, government agencies, and hospitals publish articles in peer-reviewed journals in STEM+ (see figures 19 and 20; pp. 220, 246). Indeed, the universities have been the driving force of scientific productivity for more than a century. With their specific orientation to basic research and their linkage of research and teaching, they provide conditions that facilitate the production of science. Universities are among the oldest institutions with a high degree of institutionalization. All other organizational forms (academies, associations, infrastructures, laboratories, military, museums and non-university education) were identified in the dataset played only a minor role and were summarized in the category "further types". Fifth, the analysis of the ten most research-intensive single organizations in Germany in the year 2010 confirmed the results. Only universities and institutes were part of this group. A summary of publications of single institutes under their umbrella organizations shows that the institutes of the Max Planck Society and of the Helmholtz Association are the leading science producers in Germany, outpacing the scientific productivity of universities, but only when aggregating the contributions of dozens of individual institutes (see table 5, p. 259f). An analysis of single institutes shows that these research institutes cannot compete with universities, because of their size and the number of researchers. The Charite – Universitätsmedizin Berlin, a hybrid organization, is another leading science producer in Germany. National and international cooperation of scientific research Finally, increasing internationalization of research has impacted on national and international cooperation. leading to collaboratively-written publications in scientific journals. Through advancing globalization, national and international scientific cooperation increased in volume and importance. International cooperation in STEM+ is facilitated by the reputation of the research organization and of the co-authors, higher visibility within the scientific community and more possibilities for interdisciplinary research as well as better or more specialized facilities. Today, more than a third of all research articles worldwide are produced in scientific collaboration; only around a quarter are single-authored articles. In contrast to Humboldt's principle "in Einsamkeit und Freiheit" (in loneliness and freedom), research is no longer done by one scientist, but is much more likely the result of collaboration. Research networks are increasingly important, and researchers share their common interests on a research question, publishing their results in joint publications. Researchers, organizations, and indeed countries differ in the ways they organize their research and thus how they enable research and collaboration. This depends on location, size, higher education and science system, the organizational field and organizations. Here, varying patterns of scientific cooperation were presented, showing a massive increase in scientific collaboration in (inter)national co-authorships over time. Until the 1990s, researchers in all investigated countries (France, Germany, Great Britain, USA, Japan, China, Belgium, Luxembourg) published their research articles mainly as single-authored papers. Only since the 1990s have co- and multi-authored publications risen (considerably): In 2000, only a third of all publications were published by one author. In 2010, the proportion reached its lowest level with only one-fifth of all papers single-authored (see table 6, pp. 279f). Countries differ considerably in their amount of collaboratively-written research articles. References Powell, J. J. W. & Dusdal, J. (2016). Europe's Center of Science: Science Productivity in Belgium, France, Germany, and Luxembourg. EuropeNow, 1(1). http://www.europenowjournal.org/2016/11/30/europes-center-of-science-science-productivity-in-belgium-france-germany-and-luxembourg/. Last access: 13.12.2016. Powell, J. J. W. & Dusdal, J. (2017a): Measuring Research Organizations' Contributions to Science Productivity in Science, Technology, Engineering and Math in Germany, France, Belgium, and Luxembourg. Minerva, (). Online first. DOI:10.1007/s11024-017-9327-z. Powell, J. J. W. & Dusdal, J. (2017b in press). The European Center of Science Productivity: Research Universities and Institutes in France, Germany, and the United Kingdom. IN Powell, J. J. W., Baker, D. P. & Fernandez, F. (Hg.) The Century of Science: The Worldwide Triumph of the Research University, International Perspectives on Education and Society Series. Bingley, UK, Emerald Publishing. Powell, J. J. W., Baker, D. P. & Fernandez, F. (2017 in press). The Century of Science: The Worldwide Triumph of the Research University, International Perspectives on Education and Society Series. Bingley, UK, Emerald Publishing. Powell, J. J. W., Fernandez, F., Crist, J. T., Dusdal, J., Zhang, L. & Baker, D. P. (2017 in press). The Worldwide Triumph of the Research University and Globalizing Science. IN Powell, J. W., Baker, D. P. & Fernandez, F. (Hg.) The Century of Science: The Worldwide Triumph of the Research University, International Perspectives on Education and Society Series. Bingley, UK, Emerald Publishing. ; Überblick und Einleitung Bereits der Titel meiner Dissertation "Welche Organisationsformen produzieren Wissenschaft? Expansion, Vielfalt und Kooperation im deutschen Hochschul- und Wissenschaftssystem im globalen Kontext, 1900-2010" verspricht, dass sich dem Thema der Entwicklung wissenschaftlicher Produktivität in Deutschland aus verschiedenen Perspektiven (Analyseebenen, Dimensionen und Zeitrahmen) genähert werden soll. Eingebettet in das international vergleichende Forschungsprojekt Science Productivity, Higher Education, Research and Development, and the Knowledge Society (SPHERE) rückt meine Dissertation die Analyse des Einflusses der Hochschulentwicklung und der wissenschaftlichen Kapazitätsbildung auf die wissenschaftliche Wissensproduktion in den Vordergrund. Es interessiert mich, wie die im deutschen Hochschul- und Wissenschaftssystem vorherrschenden Strukturen und institutionellen Settings die langfristige Entwicklung wissenschaftlicher Produktivität beeinflusst und verändert haben. Besonders vor dem Hintergrund einer voranschreitenden Globalisierung und Internationalisierung der Wissenschaft, einer weltweiten Vernetzung von Wissenschaftlern und der Herausbildung einer Wissensgesellschaft. Die Annäherung an den Forschungsgegentand erfolgt auf der Makro- und Mesoebene: den institutionalisierten und organisationalen Settings, in denen Wissenschaft produziert wurde und wird. Da Informationen zu einzelnen Autoren nicht zur Verfügung standen, können keine Aussagen auf der Mikroebene getroffen werden, wenngleich Publikationen natürlich immer von Individuen verfasst werden und nicht von den hier untersuchten Ländern oder Organisationsformen und Einzelorganisationen. Anhand der Dimensionen Expansion, Vielfalt und Kooperation wird der Untersuchungsrahmen abgesteckt und eine Ordnung der Fragestellung vorgenommen, an denen die Struktur der Arbeit ausgerichtet ist. Der Zeitrahmen der Arbeit umfasst die Jahre 1900 bis 2010, also mehr als ein Jahrhundert (siehe Abschnitt 1.2). Ziel dieser Arbeit ist es darzulegen, warum Wissenschaftler ihre Ergebnisse in Form von Zeitschriftenartikeln publizieren. Es geht unter anderem darum, die Wichtigkeit wissenschaftlicher Erkenntnisse hervorzuheben, da nicht publizierte Ergebnisse für die Wissenschaft nicht existieren und sich aus der Art und Weise, wie publiziert wird, die Organisation der Forschung innerhalb und übergreifend einer Disziplin oder eines Fachs ableiten lässt. In den in dieser Arbeit untersuchten Fächergruppen Mathematik, Ingenieur-, Natur- und Technikwissenschaften sowie Medizin (im Folgenden angelehnt an die englische Abkürzung STEM (Science, Technology, Engineering and Mathematics) plus Medicine als STEM+ bezeichnet) spielen Publikationen in peer reviewed Zeitschriften eine wichtige Rolle – neben Patenten in den angewandteren Fächergruppen sind sie heutzutage das wichtigste Publikationsformat. Sie dienen nicht nur der Dokumentation generierten Wissens, sondern sind auch ein Anzeiger für die Reputation eines Forschers und dienen der Messung wissenschaftlicher Produktivität. Zeitschriftenpublikationen in hochklassigen Zeitschriften, die einem peer review Verfahren unterliegen, können als gold standard zur Messung wissenschaftlicher Produktivität herangezogen werden. In den letzten Jahrzehnten kam es zu einer zunehmenden Verwissenschaftlichung vieler gesellschaftlichen Teilbereiche und die Generierung wissenschaftlichen Wissens rückte immer weiter ins Zentrum des politischen und wirtschaftlichen Interesses, unabhängig davon, wo es produziert wurde. Aus diesem Grund werden die Orte und institutionellen Settings (Organisationen, Organisationsformen) wissenschaftlicher Produktivität (hauptsächlich Universitäten, außeruniversitäre Forschungsinstitute, Unternehmen, Behörden und Ressortforschungseinrichtungen und Krankenhäuser) identifiziert und voneinander abgegrenzt. Indem ihre Gemeinsamkeiten und Unterschiede anhand ihrer Aufgaben und Ziele sowie der Art der Forschung diskutiert werden. In einem ersten Schritt lege ich dar, warum ich diese Arbeit an der Schnittstelle zwischen Hochschul- und Wissenschaftsforschung und der Bibliometrie angelegt habe (siehe Kapitel 2 und 5). Publikationsanalysen werden zwar immer noch als Hauptaufgabe der Bibliometrie gesehen, aber ihre Ergebnisse werden auch von anderen Akteuren wie Hochschulmanagern, Politikern und Wissenschaftlern genutzt, um einerseits Aussagen über die Qualität der Wissenschaft zu treffen, aber auch um sich miteinander zu vergleichen oder steuernd in die Struktur und Organisation einzugreifen und Aussagen über den Output des Hochschul- und Wissenschaftssystems zu treffen. Direkte Aussagen über die Qualität der Forschung auf Basis der Anzahl an Zeitschriftenartikeln, die ein Wissenschaftler publiziert, können nicht getroffen werden, es kann aber über die Qualität einer Zeitschrift (Impactfactor) ein Proxi gebildet werden, mit dessen Hilfe Vergleiche zwischen Disziplinen getroffen werden können. Um wissenschaftliche Produktivität zu messen, müssten ergänzende Parameter hinzugezogen werden. Aus diesem Grund werden in dieser Arbeit lediglich Aussagen über die Quantität wissenschaftlicher Produktivität getroffen, nicht aber über die Qualität der untersuchten Zeitschriftenartikel, die Forschungsleistung einzelner Wissenschaftler, Organisationen oder Organisationsformen und einzelner Länder. Nichtdestotrotz zeigen Indikatoren zur Messung wissenschaftlichen Outputs eine große Expansion wissenschaftlicher Produktivität, eine Stabilität der Universitäten im Zeitverlauf und die Wichtigkeit Deutschlands als Wissensschaftsproduzent sowie eine steigende Differenzierung und Diversifizierung der Organisationsformen. Zudem können die 1990er Jahre als Startpunkt steigender nationaler und internationaler Kooperationen gesehen werden. In Kapitel 2 zum multidisziplinären Kontext der Arbeit zeige ich, in welcher Beziehung sich die Hochschul- und Wissenschaftsforschung in Deutschland zueinander befinden. Wissenschaftliches Wissen nimmt eine Sonderstellung im Vergleich zu anderen Wissensformen ein, da es unter bestimmten Bedingungen, die von der wissenschaftlichen Gemeinschaft selbst bestimmt werden, generiert und verbreitet wird. Um einen Überblick über die wichtigsten Studien innerhalb meines Feldes zu bekommen, und um meine Arbeit in den empirischen Kontext zu rücken, beschreibe ich in Kapitel 3 dieser Arbeit den aktuellen Forschungsstand. Forschungsfragen Abschnitt 1.2 stellt einen detaillierten Überblick über die dieser Arbeit zugrunde liegenden Forschungsfragen bereit: Welche Organisationsformen produzieren Wissenschaft? 1. Wie hat sich die wissenschaftliche Produktivität weltweit und im europäischen Vergleich zwischen 1900 und 2010 entwickelt? 2. Wie war/ist das deutsche Hochschul- und Wissenschaftssystem in die globalen Entwicklungen der Hochschulbildung und Wissenschaft im Zeitverlauf eingebettet? 3. Wie hat sich die wissenschaftliche Produktivität in Deutschland zwischen 1900 und 2010 entwickelt? 4. Unter allen Wissenschaft produzierenden Organisationsformen, was tragen die "klassischen" Formen zur wissenschaftlichen Produktivität bei? 5. Welche Organisationsformen stellen die besten Bedingungen für wissenschaftliche Produktivität bereit? 6. Welche Einzelorganisationen gehören zu den forschungsstärksten in Deutschland? 7. Welchen Einfluss hat die zunehmende Internationalisierung der Forschung auf nationale und internationale Kooperationen in Form von Publikationen in Zeitschriftenartikeln? Theoretischer Rahmen Theoretisch (siehe Kapitel 4) basiert meine Arbeit auf einem neu-institutionellen (NI) Ansatz zur Untersuchung und Erklärung der Expansion des Hochschulwesens und der Wissenschaft weltweit. Trotz des allgemeinen Wachstums wissenschaftlicher Produktivität bestehen beträchtliche Unterschiede zwischen den institutionellen Settings, Organisationsformen und einzelner Organisationen, die maßgeblich zur wissenschaftlichen Produktivität beitragen. Der soziologische NI konzentriert sich auf das Verständnis von Institutionen und Organisationen. Institutionen sind ein wichtiger Baustein, um soziales Handeln und Prozesse der Gesellschaftsentwicklung zu verstehen. Organisationen und Institutionen stehen in einer wechselseitigen Beziehung zueinander. Die zentralen Annahmen des NI wurden von Walter Powell, Paul DiMaggio und Richard Scott formuliert. Meilensteine: der Zusammenhang von Organisation und Gesellschaft und die Annahme, dass formale Organisationsstrukturen Mythen zum Ausdruck bringen, die in ihrer gesellschaftlichen Umwelt institutionalisiert sind. Indem Organisationen diese Mythen erfassen, kopieren und zeremoniell zur Geltung bringen, werden Strukturähnlichkeiten (Isomorphien) zwischen Organisationen und der Gesellschaft hergestellt. Das Konzept der "organisationalen Felder" dient der Beschreibung der Beziehung zwischen verschiedenen Organisationen und beinhaltet alle relevanten Organisationen, die sich mit ihrer gesellschaftlichen Umwelt auseinander setzen. In Abschnitt 4.1.2 werden die Unterschiede zwischen den Begriffen Institutionen und Organisationen diskutiert, da diese besonders in der deutschsprachigen Soziologie nicht trennscharf genutzt werden. Grundsätzlich unterscheiden sich Ansätze institutioneller Theorie in ihrer Anwendungsebene, sie sind aber durch ihren Überbau miteinander verschränkt. Folglich ist der NI als theoretische Basis besonders gut geeignet, um eine Mehrebenenanalyse der wissenschaftlichen Produktivität zeit- und ortsübergreifend durchzuführen. Die historische Entwicklung des deutschen Hochschul- und Wissenschaftssystems kann nicht ohne eine Berücksichtigung der globalen Entwicklungen durchgeführt werden, da es einerseits einen enormen Einfluss auf die Entwicklung anderer Systeme weltweit hatte/hat und andererseits globale Entwicklungen die Institutionalisierung und Organisation der Wissenschaft in Deutschland beeinflussen. Intersektorale und internationale Kooperationen sind im Zeitverlauf angewachsen, werden immer wichtiger und führen zu ausgeprägten Netzwerken innerhalb und zwischen Hochschul- und Wissenschaftssystemen weltweit. Aufgrund einer zunehmenden Verzahnung einzelner Länder und den damit einhergehenden Wechselwirkungen zwischen den unterschiedlichen Analyseebenen (makro, meso, mikro) ist eine klassische, nationalstaatliche Analyse nicht mehr zielführend. Nichtsdestotrotz können Länder als vergleichbare Einheiten gesehen werden, da sie über klar definierte Grenzen und Strukturen verfügen. Die unterschiedlichen theoretischen Perspektiven und Analyseebenen werden in Abbildung 5 genauer beschrieben. Der theoretische Ansatz der "Weltkultur" bietet eine breitere Linse des soziologischen NI auf die globale Arena. Der Fokus liegt auf globalen und internationalen Strukturen und Prozessen, die sich über lange Zeit entwickelt haben. Mit Hilfe dieser Perspektive können globale Diffusion und formale Strukturen der Entkopplung von formalen Grundsätzen und praktischer Anwendung erklärt werden. Zusammen nehmen der historische und soziologische Institutionalismus zeitliche Entwicklungen und Prozesse in den Blick, die erklären, wie Institutionen entstehen und sich verändern. Die Konzepte critical junctures und Pfadabhängigkeit sollen helfen diese Prozesse auf der Mesoebene zu verstehen. Um die Transformation der Wissensproduktion im Zeitverlauf des 20. Jahrhunderts zu verstehen und um zu analysieren, welche Organisationsformen an der Produktion wissenschaftlichen Wissens beteiligt waren, werden zwei theoretische Konzepte herangezogen: Modus 1 versus Modus 2 Wissenschaft und das Triple-Helix Modell zur Beschreibung der Beziehung zwischen Wissenschaft, Industrie und Staat. In The New Production of Knowledge beschreiben Michael Gibbons und seine Kollegen den Wandel der Wissenschaft von einer akademischen, disziplinären und autonomen, traditionellen, Organisation der Wissenschaft (Modus 1) mit einem Schwerpunkt auf Universitäten als wichtigste Organisationsform, hin zu einer anwendungsorientierteren, transdisziplinären, diversen und reflexiven Organisation der Wissenschaft (Modus 2), die eine diversere Organisation der Wissenschaft unterstützt und auf einem breiteren organisationalen Setting der Wissensproduktion beruht. Innerhalb der Literatur wird diskutiert, ob das neue Modell das alte ersetzen soll und welches der Modelle die gegenwärtige Organisation der Wissenschaft am besten beschreibt. Im Gegensatz hierzu bleibt beim Triple-Helix Modell die historische Rolle der Universitäten erhalten. Der Ansatz geht davon aus, dass zukünftige Innovationen aus einer Beziehung von Universitäten (Wissensproduktion), Industrie (Generierung von Wohlstand) und dem Staat (Kontrolle) resultieren. Daten und Methoden In dieser Arbeit werden ausschließlich Publikationen in peer reviewed Zeitschriften als Kennzeichen wissenschaftlicher Produktivität herangezogen. Dieser Schwerpunkt ermöglicht mir eine tiefgreifende Analyse von Publikationen über einen Zeitraum von mehr als einem Jahrhundert. Zeitschriftenartikel in hochklassigen und möglichst internationalen Journalen bilden den gold standard wissenschaftlichen Outputs in den hier untersuchten Mathematik, Ingenieur-, Natur- und Technikwissenschaften sowie der Medizin (STEM+). Meine Daten basieren auf einem stratifizierten, repräsentativen Sample (siehe ausführlich Kapitel 6) publizierter Zeitschriften, die als Rohdaten aus Thomson Reuters Web of Science Science Citation Index Expanded (SCIE) zur Analyse zur Verfügung stehen (eine vergleichbare Datenbank stellt Elseviers Scopus bereit). Methodologisch wird eine Kombination aus einer vergleichenden institutionelle Analyse ausgewählter Länder, eine historische Untersuchung des deutschen Hochschul- und Wissenschaftssystems und eine systematische, globale Auswertung bibliometrischer Publikationsdaten angestrebt. Der SCIE umfasst mehr als 90 Millionen Einträge (gespeichert werden nahezu alle Typen wissenschaftlichen Outputs), hauptsächlich aus den oben genannten Fächergruppen. Diese Arbeit beschränkt sich auf originale Zeitschriftenartikel (Originalmitteilungen), da lediglich dieser Publikationstyp zertifiziertes und neues Wissen enthält. Der SPHERE Datensatz umfasst publizierte Zeitschriftenartikel aus den Jahren 1900 bis 2010. Von 1900 bis 1970 wurden die Daten in 5-Jahres-Schritten mittels einer geschichteten Zufallsstichprobe ausgewählt. Ab 1975 stehen die Daten vollständig und ab 1980 in Jahresschritten zur Verfügung. Abhängig von der untersuchten Fragestellung werden die Daten in 5-Jahres- oder 10-Jahres-Schritten analysiert. Eine detaillierte Beschreibung des Samplings und der Gewichtung der Daten kann den Abschnitten 6.2.2 und 6.8 entnommen werden. Unter Berücksichtigung dieser Kriterien werden 17.568 unterschiedliche Zeitschriften (42.963 Zeitschriften, wenn dieselbe Zeitschrift in unterschiedlichen Jahren mehrfach berücksichtigt wird) und 5.089.233 Forschungsartikel untersucht. Um die Daten für die Analyse aufzubereiten muss eine intensive Vorarbeit geleistet werden. Sie werden umfassend (nach-)kodiert und bereinigt. Besonders häufig sind Fehler oder fehlende Informationen auf Ebene der Länder und/oder der Organisationen/Organisationsformen, in denen die Forschung betrieben wurde. Im Zeitraum von Juni 2013 bis Dezember 2015 habe ich die Originalzeitschriften und -artikel in Online-Zeitschriftendatenbanken oder Archiven verschiedener Universitätsbibliotheken eingesehen, begutachtet und mit Hilfe einer Excel-Tabelle katalogisiert und fehlende Informationen, wenn vorhanden, ergänzt. In der Bibliometrie werden verschiedene Vorgehensweisen diskutiert, wie Publikationen gezählt werden können. Die Analysen dieser Arbeit basieren hauptsächlich auf der whole count Methode (siehe Tabelle 1). Die Entscheidung basiert auf der Annahme, dass jeder Autor, jede Organisation, oder jedes Land gleichermaßen zu einer Publikation beigetragen hat. Folglich kann es zu einer Verzerrung bzw. Überschätzung der Ergebnisse kommen, da Zeitschriftenartikel mehrfach gezählt werden, wenn sie in Form von Forschungskooperationen publiziert wurden. Um die absolute Anzahl an Publikationen (weltweit, Europa, Deutschland) zu ermitteln, wird die Gesamtzahl an Artikeln pro Jahr (ohne Duplikate) berechnet. Zusammenfassung der wichtigsten Ergebnisse Der empirische Teil meiner Arbeit ist in drei Teile untergliedert. Die folgenden Abschnitte fassen die jeweils wichtigsten Ergebnisse zusammen. The Global Picture – Hochschul- und Wissenschaftssysteme im Vergleich Im Mittelpunkt meiner Dissertation steht die Frage, welche Organisationsformen Wissenschaft produzieren. Um die Ergebnisse der detaillierten Fallstudie einordnen und bewerten zu können, erfolgt zunächst eine Einbettung in den globalen und europäischen Kontext. Die forschungsleitenden Fragen, wie hat sich die wissenschaftliche Produktivität weltweit und im europäischen Vergleich zwischen 1900 und 2010 entwickelt und wie war/ist das deutsche Hochschul- und Wissenschaftssystem in die globalen Entwicklungen der Hochschulbildung und Wissenschaft im zeitverlauf eingebettet, wird folgendermaßen beantwortet: In einem ersten Schritt wird gezeigt, dass das weltweite wissenschaftliche Wachstum zwischen 1900 und 2010 exponentiell verlief und dieser Trend vermutlich bis heute anhält (siehe Abbildungen 3 und 10, S. 50, 147). Die massive Ausdehnung wissenschaftlichen Wissens hatte und hat auch heute noch einen großen Einfluss auf gesellschaftliche Entwicklungen, die nicht auf den wirtschaftlichen und technischen Fortschritt beschränkt sind. Ich werde darstellen, dass Hochschul- und Wissenschaftssysteme weltweite Gemeinsamkeiten aufweisen, die zu einer ähnlichen Entwicklung und Ausweitung wissenschaftlicher Produktivität geführt haben. Im Vergleich wichtiger europäischer Länder (Deutschland im Vergleich mit Großbritannien, Frankreich, Belgien und Luxemburg), kann gezeigt werden, dass zwischen der weltweiten Ausweitung der Wissenschaft, dem Anstieg an Publikationen und der Expansion von modernen Forschungsuniversitäten ein Zusammenhang besteht (siehe Abschnitt 7.2; Powell, Dusdal 2016, 2017a; 2017b im Druck). So wurde ein globales Feld der Wissenschaft aufgespannt, das als übergeordneter Rahmen fungiert. Drei geografische Zentren wissenschaftlicher Produktivität werden im Zeitverlauf identifiziert: Europa, Nordamerika und Asien. Sie haben zu unterschiedlichen Zeitpunkten an Bedeutung gewonnen oder verloren, doch zum heutigen Zeitpunkt tragen sie alle zur wissenschaftlichen Produktivität in den untersuchten Fächergruppen bei. Allerdings sind besonders in Asien die Wachstumsraten massiv angestiegen (Powell et al 2017 im Druck). Zweitens investieren alle Länder weltweit in Forschung und Entwicklung (FuE) (siehe Abbildung 9, S. 140). Diese Investitionen haben einen Einfluss auf ihre wissenschaftliche Produktivität. Zwischen einzelnen Ländern sind zum Teil große Unterschiede in der absoluten Publikationszahl und der relativen wissenschaftlichen Produktivität feststellbar. Nicht nur Investitionen in FuE tragen zur Expansion der Wissenschaft bei, sondern auch die Anmeldung von Patenten, höhere Studierendenzahlen, eine gestiegene Anzahl an Forschern, die Ausweitung von Forschungsaktivitäten in viele gesellschaftliche Teilbereiche, die Entwicklung von Forschungsprodukten und Neugründungen von Universitäten (Powell, Baker, Fernandez 2017 im Druck). Im Zuge der Hochschulexpansion und der Massifizierung der Hochschulbildung in den 1960er und 70er Jahren sind besonders die Studierendenzahlen und die Anzahl der Wissenschaftler extrem angestiegen. Es kam also zur Ausweitung des kompletten Hochschul- und Wissenschaftssystems und nicht nur zu einer Erhöhung der Anzahl an Publikationen. Im Umkehrschluss kann ein Teil des Anstiegs wissenschaftlicher Publikationen auf eine steigende Anzahl an Wissenschaftlern zurückgeführt werden. Drittens kann die von Derek J. de Solla Price aufgestellte These, dass das exponentielle Wachstum wissenschaftlicher Literatur irgendwann abflachen müsse, wiederlegt werden (siehe Abschnitt 2.4; Abbildungen 4 und 10, S. 53, 147). Obwohl einschneidende historische, politische, wirtschaftliche und technologische Ereignisse sowie Ereignisse bezogen auf die Hochschulen und Wissenschaft (siehe Abbildung 11, S. 150) kurzfristig zu einer Verringerung der Publikationszahlen geführt haben, wurde die Wachstumskurve nicht nachhaltig beeinflusst. Im Jahr 2010 wurden weltweit fast eine Million Zeitschriftenartikel in den Natur- und Technikwissenschaften sowie der Medizin publiziert. In Abschnitt 7.2.2 zeige ich, dass die Anzahl der publizierten Zeitschriftenartikel im Verhältnis zu den Ausgaben für FuE, der Größe der Hochschul- und Wissenschaftssysteme und der Anzahl der Einwohner (siehe Abbildung 12, S. 159) und Wissenschaftler (siehe Tabelle 3, S. 162; Abbildung 13, S. 164) relativiert werden müssen. Die anfängliche extreme Expansion der wissenschaftlichen Publikationen in den Mathematik, Ingenieur-, Natur- und Technikwissenschaften sowie der Medizin basiert auf einem allgemeinen Wachstum der Hochschul- und Wissenschaftssysteme (siehe oben). Unterschiedliche institutionelle Settings und Organisationsformen, in denen Wissenschaft produziert wird, haben einen Einfluss auf die wissenschaftliche Produktivität. Anhand der ausgewählten Fallbeispiele (Deutschland, Großbritannien, Frankreich, Belgien und Luxemburg) werde ich darlegen, dass Hochschul- und Wissenschaftssysteme, die über forschungsstarke Universitäten verfügen, höchst produktiv sind. Es kommt also nicht nur darauf an, wie viele Wissenschaftler innerhalb eines Systems beschäftigt werden, sondern auch darauf, in welchen institutionellen Settings sie arbeiten. Fünftens, im internationalen Vergleich trägt Deutschland immer noch erheblich zur wissenschaftlichen Produktivität in den untersuchten Fächern bei. Mit einer Wachstumsrate von 3,35% Prozent folgt Deutschland den USA und Japan. Im Jahr 2014 wurden in Deutschland 84,5 Mrd./€ für FuE von der Regierung bereitgestellt. Dies entspricht einem Anteil von 2,9 Prozent des BIP. Somit wurde der EU-Richtwert von 2020 von 3 Prozent lediglich knapp verfehlt. Im Jahr 2010 wurden in Deutschland insgesamt 55.009 Zeitschriftenartikel in den STEM+-Fächern publiziert (siehe Tabelle A5 im Anhang). Im Vergleich der absoluten Zahlen mit Großbritannien, Frankreich, Belgien und Luxemburg nimmt das Land die Spitzenposition ein. Die Größe des Hochschul- und Wissenschaftssystems hat somit einen Einfluss auf die Publikationsleistung. Werden die Zahlen in einem nächsten Schritt mit anderen Schlüsselindikatoren in Beziehung gesetzt, verändert sich die Leistung der miteinander verglichenen Systeme zum Teil erheblich. Gemessen an der Einwohnerzahl werden in Deutschland weniger Zeitschriftenartikel publiziert als in Belgien oder Großbritannien. Die Anzahl der beschäftigten Wissenschaftler betrug in Deutschland im selben Jahr 1000:4. Nur in Luxemburg und Großbritannien ist das Verhältnis von Wissenschaftlern zur Einwohnerzahl größer. Das Zusammenspiel der Organisationsformen der Wissenschaft in Deutschland von 1900 bis 2010 Auf Basis der Analysen zum globalen und europäischen Kontext der Entwicklung wissenschaftlicher Produktivität im Zeitverlauf (siehe Kapitel 7) folgt eine tiefgreifende, institutionelle Analyse des deutschen Hochschul- und Wissenschaftssystems (siehe Kapitel 8). Sie dient als Ein- und Überleitung zur detaillierten empirischen Auswertung der Daten zum deutschen Hochschul- und Wissenschaftssystem. Hier werden die wichtigsten Institutionen und Organisationen sowie das organisationale Feld der Wissenschaft (Universitäten, Fachhochschulen, außeruniversitäre Forschungseinrichtungen) vorgestellt. Zudem diskutiere ich die Unterschiede zwischen Ost- und Westdeutschland zur Zeit des geteilten Deutschlands (1945-1990). Eine Zusammenfassung der wichtigsten Ergebnisse zeigt, dass die Entwicklung der Publikationszahlen in Deutschland dem weltweiten und europäischen Trend (im kleineren Umfang) folgt (siehe Abbildung 16, S. 208). Es kam sowohl zu einer Expansion des wissenschaftlichen Wissens in Form eines exponentiellen Anstiegs an Publikationen, als auch zu einer Erhöhung der Vielfalt wissenschaftlicher Produktivität im Zeitverlauf (siehe Abschnitte 9.1 und 9.3). Die folgenden vier Forschungsfragen werden beantwortet: Wie hat sich die wissenschaftliche Produktivität in Deutschland zwischen 1900 und 2010 entwickelt? Unter allen Wissenschaft produzierenden Organisationsformen, was tragen die "klassischen" Formen zur wissenschaftlichen Produktivität bei? Welche Organisationsformen stellen die besten Bedingungen für wissenschaftliche Produktivität bereit? Welche Einzelorganisationen gehören zu den forschungsstärksten in Deutschland? Wie oben beschrieben, verläuft das Wachstum wissenschaftlicher Produktivität in Deutschland zwischen den Jahren 1900 und 2010 exponentiell. Die Kurve ist vergleichbar mit der weltweiten und europäischen Entwicklung, wenn auch in kleinerem Umfang. Zwar hatten auch hier verschiedene Ereignisse, wie der Zweite Weltkrieg, die Weltwirtschaftskrise oder die Wiedervereinigung, einen kurzfristigen Einfluss, allerdings kam es zu keiner Verlangsamung oder Abflachung des Wachstums (siehe Abbildung 11, S. 150). Bis ins Jahr 2010 wuchs die Anzahl der publizierten Zeitschriftenartikel in Deutschland auf 55.009 an. Zweitens, zeigt eine detaillierte Betrachtung der wissenschaftlichen Produktivität Westdeutschlands im Vergleich zu Ostdeutschland, dass der Anstieg der gesamtdeutschen Publikationszahlen auf einem Anstieg der Zahlen in Westdeutschland basiert (siehe Abbildung 17, S. 211). Zwischen 1950 und 1990 verlief die Kurve der wissenschaftlichen Produktivität in der DDR flach und auf einem niedrigen Niveau. Hieraus kann geschlossen werden, dass das Hochschul- und Wissenschaftssystem der DDR, aufbauend auf seinem Akademiemodell, keine guten Bedingungen für wissenschaftliche Forschung bereitgestellt hat. Drittens, zeigt die detaillierte Analyse der "klassischen" Organisationsformen der Wissenschaft, Universitäten und außeruniversitäre Forschungsinstitute, dass Universitäten im Zeitraum von 1975 bis 2010 in den STEM+-Fächern die Hauptproduzenten wissenschaftlicher Zeitschriftenartikel waren und sind (siehe Abbildung 18, S. 217). Im Untersuchungszeitraum beträgt der prozentuale Anteil der universitätsbasierten Forschung im Mittel 60 Prozent. Somit verteidigen sie ihren Status als wichtigste Organisationsform gegenüber anderen. Die Modus 2 Hypothese, dass es im Zeitverlauf zu einem Absinken des prozentualen Anteils der Universitäten kommen muss, wird verworfen. Der Anteil der Nicht-Universitäten liegt hingegen im Durchschnitt bei 40 Prozent. Obwohl die Richtigkeit der folgenden Aussage nicht empirisch überprüft werden kann, wird davon ausgegangen, dass es sich tatsächlich sogar um einen Anstieg wissenschaftlicher Produktivität der Universitäten im Zeitverlauf handelt. Unter Berücksichtigung einer Verschiebung der zur Verfügung stehenden finanziellen Mittel für FuE zugunsten der außeruniversitären Forschungsinstitute haben die Universitäten im Zeitverlauf mit weniger Forschungsgeldern immer mehr wissenschaftliche Zeitschriftenartikel publiziert. Viertens, obwohl nicht nur Wissenschaftler innerhalb von Universitäten und Forschungsinstituten Zeitschriftenartikel veröffentlichen, haben diese beiden Organisationsformen zusammen mehr als drei Viertel aller Publikationen seit den 1980er Jahren verfasst. Aber auch schon in den Jahren zuvor ist ihr gemeinsamer Anteil sehr hoch. Zu den wichtigsten Wissenschaftsproduzenten gehören neben ihnen die (Industrie-)Unternehmen, Behörden und Ressortforschungseinrichtungen und Krankenhäuser (für eine ausführliche Beschreibung der Matrix der Organisationsformen siehe Tabelle 4, S. 222f und Abbildungen 19 und 20, S. 220, 246). Dennoch sind die Universitäten die treibende Kraft wissenschaftlicher Produktivität seit mehr als einem Jahrhundert. Mit ihrer speziellen Ausrichtung auf Grundlagenforschung stellen sie die besten Bedingungen für wissenschaftliche Forschung bereit und gehören zu den ältesten Institutionen mit einem hohen Institutionalisierungsgrad. Universitäten sind widerstandsfähig gegenüber Veränderungen und critical junctures haben keinen negativen Einfluss auf ihre wissenschaftliche Produktivität. Alle anderen im Datensatz gefundenen oder aus der Theorie abgeleiteten Organisationsformen (Akademien, Vereine/Gesellschaften, wissenschaftliche Infrastrukturen, Laboratorien, Militär, Museen und nichtuniversitäre Bildungseinrichtungen) spielen nur eine untergeordnete Rolle und wurden in der Gruppe "sonstige" Organisationsformen zusammengefasst. Fünftens, eine Auswertung der zehn forschungsstärksten Einzelorganisationen Deutschlands im Jahr 2010 bestätigt die oben beschriebenen Ergebnisse, da lediglich Universitäten und außeruniversitäre Forschungsinstitute dieser Spitzengruppe zugehören. Eine Zusammenfassung der Publikationen der Institute unter ihrer Dachorganisation zeigt, dass die Institute der Max-Planck-Gesellschaft und der Helmholtz-Gemeinschaft maßgeblich zur Produktion wissenschaftlichen Wissens in Deutschland beitragen. Sie übertreffen zusammengezählt die Publikationstätigkeit einzelner Universitäten bei weitem (siehe Tabelle 5, S. 259f). Eine Einzelauswertung der Institute zeigt aber auch, dass sie allgemein genommen, aufgrund ihrer Größe und der Anzahl der Wissenschaftler, nicht mit den Universitäten konkurrieren können. Zudem gehört die hybride Organisation, die Charité – Universitätsmedizin Berlin zu den führenden zehn Wissenschaftsproduzenten im deutschen Hochschul- und Wissenschaftssystem. Nationale und internationale Kooperationen wissenschaftlicher Forschung Im letzten empirischen Kapitel der Arbeit wird auf der Makroebene die Frage beantwortet, welchen Einfluss die zunehmende Internationalisierung der Forschung auf nationale und internationale Kooperationen in Form von Publikationen in wissenschaftlichen Zeitschriften hat. Durch die voranschreitende Globalisierung und Internationalisierung haben nationale und internationale Kooperationen stark zugenommen. Zu den wichtigsten Gründen für (internationale) Kooperationen in den Mathematik, Ingenieur-, Natur- und Technikwissenschaften sowie der Medizin zählen unter anderen die Reputation der Forschungsorganisation und der Mitautoren, eine höhere Sichtbarkeit innerhalb der wissenschaftlichen Gemeinschaft, mehr Möglichkeiten für interdisziplinäre Forschung oder auch eine bessere Ausstattung der Labore. Heute sind bereits ein Drittel aller Forschungsartikel weltweit das Ergebnis wissenschaftlicher Kooperationen und lediglich ein Viertel wird von einem Autoren verfasst. Übertragen auf die Organisation der Forschung bedeutet der von Humboldt geprägte Leitsatz "in Einsamkeit und Freiheit", dass wissenschaftliche Forschung nicht mehr in alleiniger Verantwortung eines Wissenschaftlers durchgeführt wird, sondern das Ergebnis von Kooperationen ist. Netzwerke werden immer wichtiger, um gemeinsame Interessen zu teilen, an einer Fragestellung zu arbeiten sowie die aus der Forschung gewonnenen Erkenntnisse gemeinsam zu publizieren. Wissenschaftler, Organisationen und Länder unterscheiden sich dahingehend, wie sie ihre Forschung organisieren und folglich auch darin, wie sie ihre wissenschaftliche Zusammenarbeit gestalten. Diese Wege sind abhängig von der geografischen Lage und Größe des Hochschul- und Wissenschaftssystems, dem organisationalen Feld und den Einzelorganisationen. In dieser Arbeit werden unterschiedliche Muster wissenschaftlicher Zusammenarbeit präsentiert. Die Ergebnisse zeigen einen massiven Anstieg wissenschaftlicher Kooperationen in Form von gemeinsamen Publikationen im Zeitverlauf. Bis in die 1990er Jahre hinein publizierten die Wissenschaftler in den hier untersuchten Länder (Frankreich, Deutschland, Großbritannien, USA, Japan, China, Belgien und Luxemburg) hauptsächlich in Alleinautorenschaft. Erst danach kam es zu einem Anstieg an Kooperationen: Im Jahr 2000 wurden lediglich 37 Prozent aller Artikel von einem Autor verfasst. Im Jahr 2010 erreichte der Anteil einen Tiefststand von lediglich einem Fünftel Alleinautorenschaften (siehe Tabelle 6, S. 279f). Allerdings unterschieden sich die Länder hinsichtlich ihres Anteils an Ko-Autorenschaften zum Teil deutlich voneinander. Literatur Powell, J. J. W. & Dusdal, J. (2016). Europe's Center of Science: Science Productivity in Belgium, France, Germany, and Luxembourg. EuropeNow, 1(1). http://www.europenowjournal.org/2016/11/30/europes-center-of-science-science-productivity-in-belgium-france-germany-and-luxembourg/. Zugriff: 13.12.2016. Powell, J. J. W. & Dusdal, J. (2017a): Measuring Research Organizations' Contributions to Science Productivity in Science, Technology, Engineering and Math in Germany, France, Belgium, and Luxembourg. Minerva, (). Online first. DOI:10.1007/s11024-017-9327-z. Powell, J. J. W. & Dusdal, J. (2017b im Druck). The European Center of Science Productivity: Research Universities and Institutes in France, Germany, and the United Kingdom. IN Powell, J. J. W., Baker, D. P. & Fernandez, F. (Hg.) The Century of Science: The Worldwide Triumph of the Research University, International Perspectives on Education and Society Series. Bingley, UK, Emerald Publishing. Powell, J. J. W., Baker, D. P. & Fernandez, F. (2017, im Druck). The Century of Science: The Worldwide Triumph of the Research University, International Perspectives on Education and Society Series. Bingley, UK, Emerald Publishing. Powell, J. J. W., Fernandez, F., Crist, J. T., Dusdal, J., Zhang, L. & Baker, D. P. (2017, im Druck). The Worldwide Triumph of the Research University and Globalizing Science. IN Powell, J. W., Baker, D. P. & Fernandez, F. (Hg.) The Century of Science: The Worldwide Triumph of the Research University, International Perspectives on Education and Society Series. Bingley, UK, Emerald Publishing.
How to Cite This Article: Ahmadi Doulabi M, Sajedi F, Vameghi R, Mazaheri MA, Akbarzadeh Baghban AR. Socioeconomic Status Index to Interpret Inequalities in Child Development. Iran J Child Neurol. Spring 2017; 11(2):13-25.AbstractObjectiveThere have been contradictory findings on the relationship between Socioeconomic Status (SES) and child development although SES is associated with child development outcomes. The present study intended to define the relationship between SES and child development in Tehran kindergartens, Iran.Materials & Methods This cross-sectional survey studied 1036 children aged 36-60 month, in different kindergartens in Tehran City, Iran, in 2014-2015.The principal factor analysis (PFA) model was employed to construct SES indices. The constructed SES variable was employed as an independent variable in logistic regression model to evaluate its role in developmental delay as a dependent variable.Results The relationship between SES and developmental delay was significant at P=0.003. SES proved to have a significant (P<0.05) impact on developmental delay, both as an independent variable and after controlling risk factors.Conclusion There should be more emphasis on developmental monitoring and appropriate intervention programs for children to give them higher chance of having a more productive life. 1. Haghdoost AA. Complexity of the Socioeconomic Status and its Disparity as a Determinant of Health. Int J Prev 2012; 3(2):75. 2. Behavioral and social sciences research. Measuring Socioeconomic Status. e-Source 2013; Available from:http://www.esourceresearch.org 3. Bradley RH, Corwyn RF. Socioeconomic status and child development. 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Robert Wade on Zombie Ideas, Being inside the World Bank, and the Death of Ethics in Economics after the Marginal Revolution
The global economy is at the core of some of the main issues in contemporary International Relations. But how do we understand the global economy and what impact does that have on how we deal with the power politics around it? A fault line seems to have emerged between those who take economic theory seriously and those who denounce it for being part of the problem. Informed by his training as an anthropologist, Robert H. Wade—professor at the LSE—takes a different tack: he bases his engagement with the way in which Adam Smith has been appropriated to advocate for a dominant view of 'free markets' on real-world economics and in-depth accounts of insiders. In this Talk, Wade—among others—discusses experimentation in international economic regimes, why the International Financial Institutions don't fight economic crises, and the powers and perils of being inside the World Bank.
Print version of this Talk (pdf)
What is, according to you, the biggest challenge / principal debate in current International Relations? What is your position or answer to this challenge / in this debate?
If we'd reframe your question as being more broadly about global studies, I think that one of the really fundamental questions is how and why it is that the precepts of neoliberalism have penetrated into every nook and cranny of Western societies, and have penetrated to a very large extent many non-Western countries.
This has happened especially, but not only, through the agency of the IMF and the World bank, which have imbued these neoliberal principles; through the mechanism of graduate education: children of the elites in developing countries go out to American, British, other Western universities, and they learn that this is 'true' economics, or 'true' IPE, or 'true' Political Science, and then they come back and implement these same principles and make them a reality back home. But across the globe, this even holds for the Nordic countries. In Iceland and other Nordic countries, from the 1980s, networks of people sharing a belief in neo-liberal precepts, began to form and sort of place each other in key positions within the state, and in politics, and built a momentum in this direction. These precepts have become understood as just natural, as in Margaret Thatcher's 'there is no alternative'.
I live in the UK, and the great bulk of the British public really does believe that the government is just like a household writ large, and the same rules of budgeting that apply to the household should apply to the state. That when times are tough the household has to tighten its belt, cut back on spending, and it is only fair that the government does the same, and if the government does not, if the government runs a deficit in hard times, then the government is being irresponsible. And this is a completely mistaken and pre-Keynesian idea, but it is a 'zombie idea'—that is, however much arguments and evidence may be mounted against it, it just keeps coming up and up and up, and governments come to power riding on this zombie idea and a flotilla of related ideas.
The persistence of this zombie idea is all the more amazing as we just had a global financial crisis in 2007/8, which would prompt a rethinking of these ideas. But these neoliberal precepts have been, if anything, more strongly reinforced. In previous hard times—and obviously the 1930s depression is the exemplary case—there has been a stronger move towards, what you could call, social democratic precepts. But not this time! Indeed, even after the crisis, the whole of the European Union with 500 million people is even more thoroughly structured on the basis of these ideas. I am thinking of what is popularly known as the Fiscal Compact signed by the EU Member States in 2012, which commits all governments to balance budgets all the time—that is, first, the structural deficit may not rise above 0.5 percent of GDP. Second, the public debt may not rise above 60 percent of GDP. Third, automatic financial sanctions are levied on governments that exceed these two thresholds. Fourth, the whole procedure is supervised by the European Commission, and this is presented as in the name of sound budgeting. This package is presented as justified by the proposition that government is a household writ large. The most elementary principles of Keynesian macroeconomics show why this is not simply mistaken, but a disaster, and will keep generating recessionary pressures. It is sold as a kind of excuse for avoiding to put in place the essential conditions for the monetary union, namely, a common budget and a sizable transfer mechanism to the regions just as exists in the United States. But they do not want to do that, but still they call this agreement 'cooperation', which is all about not cooperation, but about writing these dictates around this zombie idea written into the very basic architecture of the EU. Beyond EU politics, it materializes all the way down to, I don't know, the function of the privatization of the Post Office, it goes all the way down to the sort of capillaries of how universities are run, and the incentive systems that have placed upon academics, and there is very little pushback. The one reason, why I am almost completely delighted about Jeremy Corbyn's election as the leader of the Labour party, is that this is one small case of where there seems to be some concerted pushback against these zombie ideas. The point being that the established Labour party basically bought into this whole set of neo-liberal ideas. It combined maintaining the overall structure of inequality in society with more emphasis on providing some help to the poor, but they had to be hardworking poor.
Yet, one knows that there can be dramatic changes in the prevailing zeitgeist of norms. One knows that there can be big changes in the space of a few decades and the question is can one imagine a scenario in which they might be a big change in norms back to a more kind of social-democratic direction. So where will this take place? Because of technological change in the labor market, there is a real big crisis of employment with many middle-class jobs cut out and polarization in the labor market. This might then induce a political movement to have a much bigger change in income distribution than anybody with power is now talking about. Talk of re-distribution these days is really almost entirely around redistribution through the state, but the point I would make is that if there is to be any significant reduction of inequality, especially inequality at the top, there has to be more attention to changes in market-income distribution.
Let me explain. The share of profits in national income has been going up and the share of labor income has been going down. So we should harness the shareholder structure of the market to affect a more equal income distribution by enabling a much wider section of the population to buy into the profit share. At the moment the profit share goes to senior executives and equity holders, but equity holders are highly concentrating at the top of the income and wealth distribution. If equity earners could be spread much more equally, then a much wider section of the population would get income, while they sleep so to speak. We could institute something like trusts, whose members could be the employees of a company, the customers, the neighbors of the company, and the trust would borrow on capital markets and take out insurance against the repayment of the lending of loan and then it would buy shares, it would use that borrowed money to buy shares in the company, and the company would pay out dividends on the shares and then that dividend income coming out of profits would be distributed to the members of the trust. That would be a way of getting the rising share of profits in national income distributed out to the population at large. I particularly like this metaphor of "earning income while you sleep", since at the moment it is only the rich people, who are earning income while they sleep. Somehow that facility of earning income while you sleep has to be made much more widely and available—by using the market against itself, so to speak.
How did you arrive at where you currently are in your thinking about International Relations?
I suppose the starting point was really this; my father was a New Zealand diplomat, so we moved quite often. By that time I was twelve my parents were posted to Colombo, Ceylon as it was called then. After having lived just in Western countries, I suddenly encountered at this very formative age Colombo and Sri Lanka. I was just amazed by that experience; by the color, the taste, the exoticness, but I was also very struck by how the many boys at the same age as me, were walking around with no shoes. I particular remember this boy carrying a baby on his shoulder, the baby looked half-dead and covered in scabs, and I think it was then I got the idea of just how unequal the world was. Then at university I studied economics, but I also visited my parents in Kuala Lumpur, Malaysia and I got another sense of that great disparity in wealth and living standards. At this time I had come across Adam Smith and the wealth of nations question and that helped to encapsulate or to crystalize my interests. So I wanted to go the Institute of Development Studies in Sussex and got enrolled for a PhD in economics, but en route I spent several weeks in India and during that time I began to dwell upon just how boring and how useless everything I studied under the name of microeconomics. I kept thinking of these dreadfully dry textbooks of marginal cost curves and marginal revenue curves and utility function and difference curves etc., which I had forced myself to sit exams in. By this time I had done a little bit of fieldwork, living on Pitcairn Island in the middle of the Pacific.
When I got back to Sussex after fieldwork I announced that I wished to not do a PhD in economics, but to do one in anthropology thinking all the time, that this would actually be more use for understanding why for example India, where I had been, was so very poor. So that's what I did: a PhD in anthropology… In some ways I regard that as having been a mistake, because the sort of mainstream of anthropology is very far away from the Adam Smith questions. Having done the degree in anthropology, pretty soon I began to change direction and pay much more attention to the state, to the state bureaucracy. I went to India and I studied the Irrigation Department and other related departments. I went to South Korea and I studied state irrigation agencies and I went to Taiwan and I studied the state more broadly. So I was kind of moving up from my Italian village, moving kind of up the scale in terms of state agencies and then the state as a whole.
Then I went to work for the World Bank in the 1980s and my main reason for doing that was not to do the research the World Bank wanted me to do, but rather to study the World Bank from the inside as fieldwork. If in some ways switching to anthropology was a mistake, in other ways it was not, because I approached those kind of Wealth-of-Nations-questions in a way very different from how economists approached them. For example when I went to Taiwan and studied the trade regime, the first thing I did was to go and talk to people who operated through the trade regime, whereas I noticed that the published works by economists celebrating Taiwan's free trade regime was based on what the rules said and what certain government officials told them was the case. They had never actually talked to people who traded through the trade regime. If they would have, they would have learned about all the covert controls that went on such that there was quite a distinction between the liberal face of the trade regime and the reality of the trade regime. The reality was that the government was managing trade in line with industrial policy, but the government absolutely did not want the world to know that. So all this was kept hidden and I was really regarded as rather unwelcome visitor—and in fact to this day my book Governing the Market (1990, read the introduction here) is not well received in Taiwan. It says the government of Taiwan did a good job of managing the market, but they want the world to believe that Taiwan is a free trade country. So that is the kind of intellectual trajectory that I have been on.
So I think that the value of the anthropology PhD was that it really taught me, in practical terms, the meaning of the anthropological maxim, which is 'soaking and poking'. To put it another way—I love this—anthropologists are social scientists, who believe that the plural of anecdote is evidence. And indeed I place a lot of weight on anecdotes, on gossip, on the stories people tell, whereas economists would be much happier reducing, let us say, South Korea's trade regime to one data point in a matrix, and then compare that data point with, let us say, Malaysia's data point to see how the trade regimes are correlated with growth, or something like that, and that is really not my interest.
What would a student need to become a specialist in IR or understand the world in a global way?
Despite what I've just said, I do think that a graduate training in economics is very useful, provided one does not believe it. And that is really difficult, because the socialization pressures are intense: if you do not say the right things—which are neoliberal type things on the whole—then you will likely not get a high grade. But I have noticed that economists tend to know how to think, how to make arguments, they tend to understand the idea of causality, and that may seem an astonishing thing to say on my part, because it implies that students coming from other disciplines are often weak in understanding the very basic ideas of causality, but that is my experience. I had many students coming from, who knows, IR or Political Science or Sociology or Anthropology, who clearly do not have much idea of causality; they can describe things, but they find thinking in terms of cause and effect, in terms of independent and dependent variables, in terms of left and right side, they just find it difficult. So I do think that there is a lot to be said for studying economics, and mastering the maths, provided that the critical facility is not lost. That is point number one.
Point number two is that I think that there is a huge premium on doing fieldwork, and the field work maybe in developing countries, but when I say field work, I don't just mean going out to villages, going out to see poor people 'over there'. I am talking of fieldwork inside bureaucracies: to try and understand the culture, the incentive systems that people are working under—fieldwork at home so to speak, in the countries one comes from. From the students' point of view, it is clearly much easier to sit in the LSE library to do the research. So in my marking I give quite a premium to a student actually doing fieldwork, going out and interviewing, and having the experience of writing up and interpreting the interviews and somehow fitting it back into a larger argument—but really few students actually do that, and I think that that is a real, real big mistake. Mind you, the same risk holds for fieldwork in economics as it does for studying economics: I encourage students to work for (do fieldwork in, experience) the World Bank; and several have—but to the best of my knowledge almost none of them has kept their critical perspective. They really come to buy into it.
The relations between states are settled either through diplomacy or warfare. Why would we have to focus on economics to understand IR?
Because economics—such as for example balances of payment, surpluses and deficits—set the constraints and incentives on countries in terms of their relationships with each other. A great deal of diplomacy is driven by economic pressures: diplomacy to get other countries to for example open their markets, or to cut deals with countries—'if you do this, we will do that'—deals that may relate to areas that are rather different, for instance if you buy more of these of our exports, we will help you fight such and such country, because the manufactures are in my constituency.
So, in a way, the way you framed the question is part of the reason why I react against the discipline of IR: because it tends to treat diplomacy, war, and so on, as somehow rather separate from economic pressures, and I see these economic pressures as very powerful drivers of both of the other two things. As another example, one of the drivers of the Syrian conflict was that there was an acute drought (like Weizman observed in Theory Talk #69, red), which meant that many people were rendered destitute; rural areas flooded into the cities, and the Assad regime just was—understandably—unable to cope; and large numbers of young men, concentrated in cities, rootless and with no jobs, just were recruiting fodder for the Wahhabi sect. I have always thought of economics—not so much as in the making choices in conditions of scarcity, that is sort of Lionel Robin's definition—in the sense of Alfred Marshal, about how people make a living, as a very fundamental driver of a lot of what happens in International Relations.
Pikkety recently published Capital in the 21st Century, causing quite the stir. But why would inequality between people matter for IR?
Let me comment by invoking a very contemporary exhibit—the migration crisis in Europe now. Maybe a decade ago I looked at the figures and if you took the average income of the EU-15 prior to latest extensions and then expressed the average income of countries outside of the EU—including sub-Sahara Africa—as a percentage, then there was a really dramatic falling away of income levels relative to the EU, in countries all around the EU and whether you took market exchange rates or purchasing power parity. If you went round to sub-Sahara Africa and took the average, it was more like two percent in market exchange rates and seven percent in purchasing power parity; and the 'problem' is that there is certainly here a rather thin slither of sea between Africa and the promised land of Europe and to the east there are these great open planes, where armies can go up and down to the speed of light, so to speak, but people can also move pretty quickly across these planes.
So all one has to do—and this might just be only a bit of an exaggeration—if one is on the poor end of this poverty pyramid is hop across the border and you have a chance at least of getting a very appreciable increase in living conditions and income, with which you can then get savings to remit back to home. So the migrations pressures are just huge. So that is one reason for linking inequality to issues in International Relations—really fundamental issues, and very very difficult to dissolve.
You've done anthropological fieldwork inside the World Bank—an institution drawing a lot of criticism from its detractors in IR. Can you shed some kind of light about what kind of 'animal' the World Bank is?
First of all, let me say that at the micro-level—the level of the people you know and the people I know inside the World Bank—I agree that there are people doing a lot of good work. But if you look at the organization more generally—the World Bank and also the IMF—they are clearly instruments mainly of US foreign policy—and any number of US senators, members of the House, have basically said that. When they are defending the International Financial Institutions (they often criticize them), they do so by saying they are important for US foreign policy. And you have to look at the governance structures to see how it is that the US in particular—but Western states more generally—have from the beginning, through the very Articles of Agreement, created a structure which locks in their power, and has made it very difficult for other countries (including Japan) to significantly increase their shareholdings. The US has kept the presidency of the Bank and the much less recognized Number Two position of the IMF, and has used these positions to have a very strong influence.
Just to illustrate what the Bank and the Fund do: at the time of the East-Asian crisis—specifically the Korean crisis in 1997-1998—the IMF mission was in Seoul. The negotiations were in a hotel there. David Lipton from the US Treasury (and a former student of Larry Summers who was by then Deputy Secretary) was just down the corridor of where the negotiations took place, and every so often the IMF people would walk out of the negotiations and consult with David Lipton, then come back in and—as Paul Blustein reports in his book called The Chastening—often said something rather different from what they had been saying before they consulted with David Lipton.
Just to take another example, the US being able to appoint the president of the Bank—to appoint a person known personally to the Treasury Secretary or to the Secretary of the State, or both—is really of great value: when there is a 'trustful relationship'—or a relationship of dependency, the president being dependent on those who appointed him in the Administration—it is possible for those people in the Administration, or people close to them, to just ring up the president of the Bank, and talk in a very informal, confidential, trustful way about what is happening in Latin America, or what is happening in the Middle East, and what the US thinks the Bank should or should not be doing in those places. Larry Summers appointed a protégé of his to one of the regional development banks, and this person—who is very senior in the bank—told me that Larry would frequently ring him, while he is being driven home in the evening from the Treasury, just to have a chat about how things were going in her region, and to pass on suggestions about what the Bank should be doing there, and to get intelligence from her about what was happening in the region, and so on. The point is that, making these personal connections is of immense value, but at the same time, the US Congress, in particular, is very much against having a big Bank against allowing a capital increase for the World Bank—so that the bank could, as it should be doing, increase its lending for infrastructure investment ten times. It is just a complete scandal how little the Bank has been lending for the past 20 years or more for infrastructure, for roads and power stations and so on. The US does not want the Bank providing socialistic competition with the private sector: it says these things are for the private sector to do, and the Bank has to take care of poverty, because the private sector is not interested in poverty.
So the US wants to keep the presidency of the Bank, it wants to keep, secondly, its unique veto right on the big decisions, such as decisions on whether to increase the capital base—but provided those two things are met it does not care that much about the Bank. In the case of the Fund, the US is also very powerful, but of course the Europeans have a bit more relative power. Right now I think the world is in an even more dangerous sort if financial condition than might appear, because the IMF is acutely short of secure or guaranteed lending resources, so if there is to be another round of crisis—as I think is entirely likely within the next five years—the Fund depends upon borrowing short-term from member countries, like on six months terms, but member countries can say 'no', and that means that the Fund's ability to fight crises is quite constrained. The Fund should implement what was agreed in 2010 by all the member countries represented on the board of the IMF: to roughly double the quote of the guaranteed lending resources, that is, resources the countries actually hand over to the Fund, over which they actually give up country control. All the relevant capitals ratified it with one exception—the US—because Congress refused because the individual barons, who are not under that much party discipline, each said to the Treasury: 'look, the question of the IMF is of zero significance to my electorate, so if you want my vote on the IMF, you have to give me things that I want like projects in my constituency and so on'. The Treasury added up the demands of the people, whose vote had to be won, and it considered those demands were just way, way, way over the top. As long as a Democrat is in the presidency, while the House is controlled by Republicans the world is sort of held hostage to this. Beyond this example, this actually entails a structural problem: the US blocking or producing a gridlock in international organizations, because the Congress is hostile to international organizations, because Congress sees it to imply a loss of US sovereignty. The only way to end this gridlock is to end the US veto in the Fund and the Bank, but the problem is that the US can veto any measures.
One response of the big developing countries is to create bypass organizations—such as the Asian Infrastructure Investment Banks, such as the new Development Bank, such as the Contingent Reserve arrangement the BRICs have established, and then a growing number of sort of regional development banks. And I think that that is a good thing, but it does raise questions about coordination, about who is looking after, if you will, the global interests, global issues such as climate change. In short, we need a genuine World Bank, rather than the American-Bank-in-the-World we have today.
You engage thoroughly with economics and economic theory. Now there seem to be two kinds of critical approaches to economics in IPE: one criticizes its rationality as flawed, and another buys into its rationality but attempts to point out where actual policy gets it wrong. Where do you stand in this?
If you take the example of how the EU attempted to impose fiscal rules on Greece, you see a notion of rationality which draws upon these very primitive notions that I referred to right at the beginning, where the government is just a household writ large, and the same set of rules that apply to the budgeting of the household must apply to the government as well. Here, the assumption is that any macroeconomic proposition must have microeconomic foundations, that it must be derivable from propositions about microeconomic agents acting in this sort of self-maximizing way, and if you cannot derive macroeconomic propositions from those micro foundations, then there is something unreliable, un-rigorous about your macroeconomics. So what are then the sources of these micro-economic assumptions?
This leads us to one fundamental and almost completely unaddressed weaknesses of economics can be traced back to the Marginal Revolution in the late 19th century. From that moment onwards, there has been an attempt to model economics on physics, and that was very explicit on the part of people like Pareto and Walras, and Jevons, early Marginalist thinkers. They even drew up tables with terms of physics, like velocity, on one side, and then corresponding terms in economics on the other. That had a huge benefit in terms of the 'science' of economics, because it cut economics loose from Adam Smith's and other classical economists' preoccupations with issues of morality and ethics. Adam Smith thought his most important book was not the Wealth of Nations but his Theory of Moral Sentiments, on which he was working, revising yet again, when he died. For Smith, economics and morals were never separate worlds, but intimately related. So for him, the Theory of Moral Sentiments and the Wealth of Nations were just twins. The point about the marginalist revolution, and the embrace of physics as the model, was that it cut economics free of all that sort of subjective stuff about values. So economics after the marginalist revolution set off with the assumption that not production, but the movement of individuals in markets engaged in trading with each other became the center of gravity of economics. Making the study of exchange rather than the study of production central was analogous to, say, Boyle's Law in physics. Boyle's Law in physics explained the movement of molecules in gasses, as a function of the pressure applied to the gas. So why did they make that analogy?
The point of likening of individuals in microeconomic actions with molecules in gasses was the following. Everybody knows that we do not apply any consideration of ethics or moral sentiments to the movement of the molecules in gas, so neither should we apply any notions of ethics or moral sentiments to the movements of individuals in market exchanges. And that was the way that all considerations of ethics, of morality were just removed from economics. I for instance asked the question to well-known American growth theorist, as we were walking down the street in Providence at Brown University: 'is it moral for people to freeride?' And he said, 'yes of course, provided they do not break the law'. So ethics and questions of morality have been almost completely expunged from economics in a way that would horrify classical economists including Smith; and a particular idea of rationality has been an important part of cleansing economics from those moral considerations. George DeMartino, editor of the Oxford Handbook of Professional Economics Ethics which just appeared has a wonderful phrase to capture this—'econogenic harm': the harm built into the way that economics, professional economists work.
Haven't specific fields, like development economics—a field you engage with yourself—advanced to overcome these weaknesses in economic theory?
Let me root my answer again in observations about the linkages between theory and practice, for it is in practice that economic theory really does its work and its politics becomes visible. It always amazes me we have had a development industry in place for roughly the past 70 years with vast numbers of people, organizations, money all orchestrated underneath this umbrella of development; yet if you go back and read what the early writers about development and economic growth said—I am thinking of people like Paul Rosenstein-Rodan, Myrdal, Hirschman, Prebisch, but also Moses Abramovitz. If you go back and look at what they were saying, it seems to me that we have not advanced all that much. Sure, we have advanced a lot in terms of econometric techniques, but in terms of substance we have not. One conclusion I draw from that is that it is really important that international regimes—for example, World Bank and IMF loan conditions, but also WTO regimes—give room for experimentation, because it is really not the case that 'there is no alternative'. This Washington Consensus agenda has clearly not been effective in accelerating production, upgrading it, and production diversification, or export upgrading, or export diversification. So, there should be written into the regimes a lot of room for experimentation. But this isn't there because of the political origin of these regimes; because of what western countries want for the rest world, namely, to open the rest of the world to their markets.
In the 80s there were a lot of experts in industrial development in the World Bank and they did good work, promoting industrial growth and investment in productive infrastructure. But then Anne Krueger came in as chief economist, and brought in a whole lot of people with her—who, like here, were arch-neoliberals. The industrial growth people were invited to find employment elsewhere, or to rebrand themselves as experts in who knows what, environmental assessment, primary education, or good governance. There was no room for them. This also fitted well with some bad experiences the Bank had had with investing in infrastructure. It had gotten into a lot of trouble with large-scale infrastructural interventions such as roads and dams and the like from, especially, US NGOs mobilizing Congress—which then put pressure on the Treasury and so on. My lament throughout this whole conversation has been that we seem to have become just locked into this direction that was set in the 1980s, and it is very difficult to see what kind of economic catastrophe would be necessary to give a sufficient shock to reroute the global system of economic governance.
So after the 1980s, the Bank sort of backed off and began saying that development, economic development, was about poverty reduction—the slogan of the Bank became, 'our dream is a world free of poverty'. You can understand that shift partly in terms of pulling out of the concern with production to get into safe territory, but also because poverty reduction seemed to sort of take care of inequality, because you reduced inequality to poverty—to the poor 'over there', and we can feel good about helping them; but we do not want talk about inequality, which involves us, because then there is the question of justice of our income.
But then the most recent turn is that we're seeing a renewed push for infrastructure in the World Bank and western development agencies. I think that you can link this recent infrastructure push to uncertainty about the sources of economic growth. In the West there is a real question about sustaining economic growth without housing bubbles and stock market bubbles—in other words, without endogenously building financial instability. There may well be a similar sort of issue in terms of the growth of developing countries.
Last question. Adam Smith seems to be constantly present in your work as a critical interlocutor. How come?
I kind of engage in a critical debate with Adam Smith, but especially with people today, who believe his ideas. I often start to frame arguments in terms of his famous 40 word summary of the causes of the relative wealth of nations, which he actually wrote in 1755, which is to say long before the first edition of the Wealth of Nations. I will just tell you what these 40 words say, and then I will tell you the significance of them. He said:
'Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism than peace, easy taxes, and tolerable administration of justice; all the rest being brought about by the natural course of things.'
So I am struck by how today many economists say or imply that this is essentially right; you need some qualifications of course, but essentially that is the nub of it. You might have to translate peace, easy taxes, tolerable administration of justice into more modern terms, but that is the essence of it. For example, Gregory Mankiw—Professor of economics at Harvard, former chair of the National Council of Economic Advisers during the Bush administration, and author of a very popular textbook in economics—said in the Wall Street Journal in 2006: Adam Smith was right to say that – and then he gave the 40 word quote. The renowned economists Timothy Besley and Torsten Persson wrote Pillars of Prosperity, which also begins with Smith's 40 words, and they even see the book as a kind of elaboration, but in that same kind of spirit, of Smith's basic idea. So my point is that these ideas are still current; they are still the sort of front of a lot of neoliberal thinking. I am just astonished these ideas all these centuries later remain so powerful. I have had at the back of my mind the idea of organizing an international competition to provide a contemporary 40 word statement, which is sort of equivalent to Smith's, which would obviously have to be of a more global character, encompassing the globalized world economy.
Robert Hunter Wade worked at the Institute of Development Studies, Sussex, 1972-95, World Bank, 1984-88, Princeton Woodrow Wilson School 1989/90, MIT Sloan School 1992, Brown University 1996-2000. Fellow of Institute for Advanced Study, Princeton 1992/93, Russell Sage Foundation 1997/98, Institute for Advanced Study, Berlin 2000/01. Fieldwork in Pitcairn Is., Italy, India, Korea, Taiwan. Research on World Bank 1995-continuing. Author of Irrigation and Politics in South Korea (1982), Village Republics: The Economic Conditions of Collective Action in India (1988, 1994), Governing the Market: Economic Theory and the Role of Government in East Asia's Industrialization (1990, 2003). Latter won American Political Science Association's award of Best Book in Political Economy, 1992.
Related links
Faculty profile at LSE Read Wade's The Piketty phenomenon and the future of inequality (2014, real-world economics review) here (pdf) Read Wade's Capitalism and Democracy at Cross-Purposes (2013, Challenge) here (pdf) Read Wade's Rethinking Industrial Policy for Low Income Countries (2007 ADB Conference paper) here (pdf) Read Wade's Bringing the State Back In (2005, IPG) here (pdf) Read Wade's Is Globalization Reducing Poverty and Inequality? (2004, World Development) here (pdf) Read Wade's Creating Capitalisms (Introduction to 2003 book 'Governing the Market') here (pdf)
Untersuchungen zur Rohstoffeffizienz der Forst-Holz-Kette vor dem Hintergrund der Forstreform in Ghana Im Jahr 1994 wurde in Ghana eine Forstreform durchgeführt, mit dem Ziel, das Artenspektrum der kommerziell nutzbaren Bäume zu vergrößern, den Holzverlust in der Forst-Holz-Kette zu reduzieren sowie die Verarbeitungsprozesse in der Holzindustrie zu optimieren. Um den Erfolg dieser politisch motivierten Ziele sicherzustellen, wurden ein Exportverbot für Rundholz und Mindestpreise für den Verkauf von Holz auf dem Stock erlassen, die an die internationalen Marktpreise angepasst waren. In dieser Arbeit soll die Effizienz dieser Maßnahmen genauer beleuchtet werden. In einem ersten Abschnitt werden die Auswirkungen des Exportverbots von Rundholz (LEB=log export ban) ab 1995 auf die weiter verarbeitende Industrie, die Preisentwicklung auf nationaler und internationaler Ebene sowie die Nutzung des vorhandenen Artenspektrums mit statistischen Methoden untersucht. Dafür standen zwei Zeitreihen der Timber Industry Development Division (TIDD), einer Abteilung der Forstkommission von Ghana, zur Verfügung. Der erste Datensatz umfasst den Zeitraum von 1984 bis 2005, während der zweite, detailliertere Datensatz die Periode von 1995 bis 2005 abdeckt. Im zweiten Abschnitt der Arbeit wurde die bei Holzerntemaßnahmen erzielte Rundholzausbeute analysiert. Dazu wurden im Rahmen von Fallstudien Holzerntemaßnahmen mit detaillierten Untersuchungen begleitet. Verglichen wurden die aufgrund der Dimension und der Qualität der eingeschlagenen Bäume verwertungstechnisch objektiv nutzbaren Holzmengen mit denjenigen Rundholzmengen, die tatsächlich zur Verarbeitung gelangten. In die Untersuchung wurde die Kontrolle und Ausführung der Arbeit miteinbezogen. Aus den Ausbeutedaten wurden Modelle zur Berechnung eines angemessenen Stockpreises sowohl für einzelne Baumarten als auch als Durchschnittswerte entwickelt. Ein weiterer Arbeitsschritt befasste sich mit der Schnittholzausbeute im Sägewerk. Ebenfalls im Rahmen von Fallstudien wurden das eingesetzte Rundholz und das daraus erzeugte Schnittholz hinsichtlich Volumen und Qualität verglichen und die Gründe für Ausbeuteunterschiede analysiert. Die Analyse des Produktionsprozesses deckte dabei auf, welche Faktoren bei welchen Arbeitsschritten zu den beobachteten Verlusten bei der Schnittholzausbeute beitragen. Dabei wurden sowohl technische Faktoren als auch Motivation und Ausbildungsstand der Arbeiter berücksichtigt. Auswirkungen des Exportverbots – Entwicklung der Exportmengen In dem Zeitraum vor Inkrafttreten des Rundholzexportverbots in den Jahren 1984 bis 1985 betrug das Gesamtexportvolumen von Holz und Holzprodukten ca. 5,7 Mio. m³. Daran hatten Rundholz- und Sägeholzexporte einen Anteil von 55% bzw. 39%, während die Anteile von veredelten Produkten deutlich niedriger waren: Furnier 4,1%, Sperrholz 0,4% und Fertigwaren aus Holz 1,4%. In den Jahren zwischen 1996 und 2005, in denen sich das Rundholzexportverbot auswirkte, betrug das exportierte Gesamtvolumen von Holz und Holzprodukten 4,5 Mio. m³. Daran hatte das Sägeholz einen Anteil von 54%, während der Anteil weiterverarbeiteter Produkte deutlich zunahm: Furnier 21,3%, Sperrholz 10,5% und Hobelware bzw. Holzprodukte 14,2%. Die Analyse der Wirkung des Exportverbots für Rundholz aus Ghana zeigt, dass durch diese Maßnahme ein deutlich höherer Anteil der Wertschöpfung im Land verbleibt. Vor allem die Herstellung von Furnieren, Sperrholz und veredelten Holzprodukten stieg deutlich an. In dieser Hinsicht wird die Hypothese gestützt, dass ein Exportverbot von Rundholz die Produktion von höherwertigen Waren im Inland fördert. Weitere Faktoren für die beobachtete quantitative Zunahme und den Wertzuwachs bei den verarbeiteten Produkten dürften auch die Verknappung des Rundholzangebots, die hohen Exportzölle auf Halbfertigwaren (Sägeholz) und finanzielle Investitionsanreize seitens des Staates sein. Preisentwicklung für Exportprodukte Die Untersuchung zeigte, dass der aggregierte Preisindex für alle Holzprodukte, die vor Inkrafttreten des Rundholzexportverbots exportiert wurden, in der Zeit von 1984 bis 1995 inflationsbereinigt um 129% anstieg, während der aggregierte Preisindex nach Inkrafttreten des Rundholzexportverbots im Zeitraum von 1996 bis 2005 um 3% fiel. Dabei stiegen die Exportpreise für die verschiedenen Produkte in unterschiedlichem Ausmaß: Sägeholz um 109%, Furnier um 238%, Sperrholz um 142% und verarbeitete Holzprodukte um 102%. Im Zeitraum nach Eintreten des Rundholzexportverbots ergaben sich demgegenüber folgende Veränderungen in den Preisen: Sägeholz +14,8%, Furnier -21,9%, Sperrholz -47% und verarbeitete Holzprodukte -31,7%. Während die Exportpreise für Furnier an stärksten anzogen, fielen die Preise von Sperrholzprodukten aus tropischen Hölzern, da billige Sperrhölzer auf Nadelholzbasis den Markt eroberten. Auch der stetig ansteigende Einsatz von Holzwerkstoffen wie MDF und OSB im Möbelbau und im konstruktiven Bereich verdrängen tropische Sperrhölzer aus dem Markt. Ein weiterer Grund ist schließlich der starke Konkurrenzdruck auf diese Produkte durch Sperrholz aus chinesischer Produktion. China war bis vor kurzem noch ein wichtiger Importeur von tropischem Sperrholz, ist heute aber bereits einer der größten Exporteure. Die Ursachen für die Preisrrückgänge sind vermutlich auch in globalen Ereignissen zu sehen, wie beispielsweise dem Zusammenbruch der asiatischen Märkte in den Jahren 1997 und 1998, sowie der schwachen Nachfrage nach Waren auf internationalen Märkten zwischen 2000 und 2001, die u. a. aus der wirtschaftlichen Rezession der drei stärksten Volkswirtschaften (USA, Japan, Deutschland) resultierte. Anteil weniger genutzter Baumarten (LUS) Der Anteil der weniger genutzten Baumarten (LUS – lesser used species in Ghana, auch als "Pink" und "Green"-Baumarten bezeichnet) an der Exportmenge blieb auch während des Exportverbots für Rundholz relativ gering. An der Gesamtexportmenge (ca. 4,1 Mio. m³) der sechs Hauptprodukte, die zwischen 1995 und 2005 aus Gahana ausgeführt wurden, betrug der Volumenanteil der "Pink" und "Green" Baumarten nur 12,5% bzw. 1,3%. Die marktgängigen "Scarlet" und "Red"-Baumarten nahmen dagegen einen Mengenanteil von 49% bzw. 29,4% ein, während sonstige Baumarten zu 7,7% beitrugen. Detaillierte Analysen der Statistiken zeigen, dass veredelte Produkte wie Fußböden und Paneele nahezu vollständig aus "Scarlet" und "Red"-Baumarten hergestellt wurden. Der Anteil dieser Baumarten macht bei diesen Produktgruppen 87% bzw. 90% aus. Beide Produktgruppen gehören zu den höchstbezahlten Exportprodukten. In der Regel fordern Kunden und Verbraucher die spezifischen Holzeigenschaften dieser Holzartengruppen, woraus die hohen Anteile bei den hochwertigen Produkten zu erklären sind. Es steht zu erwarten, dass diese Holzarten auch in Zukunft in Produktgruppen dominieren. Wie erwartet, hat der Mengenanteil von luftgetrockneten Sägeholz aus "Scarlet" Baumarten von 83 % im Jahr 1995 auf etwa 6 % im Jahr 2005 abgenommen, während luftgetrocknetes Schnittholz aus den weniger genutzten "Pink"-Baumarten gegenläufig von 6 % im Jahr 1995 auf 22 % in 2005 anstieg. Die Substituierung von "Scarlet" durch "Pink" Baumarten spiegelt die zunehmende Knappheit dieser verwertungstechnisch geschätzten Baumarten wieder. In den letzten Jahren wurden durch die Forstverwaltung erhöhte Abgaben auf einfaches, luftgetrocknetes Schnittholz erhoben, welches aus den zunehmend knapper werdenden Hauptbaumarten hergestellt wird. Auch darin könnte die wachsende Bevorzugung der weniger genutzten Baumarten in diesem Produktbereich erklärt werden. Entgegen der Erwartungen blieb jedoch der hohe Anteil der Hauptbaumarten im Bereich des kammergetrockneten Sägeholzes stabil. Die Bevorzugung der "Scarlet" Baumarten für diese Produkte ist nicht zuletzt auf deren deutlich besseres Verhalten bei der künstlichen Trocknung zurückzuführen. Forschungsvorhaben und verbesserte praktische Erfahrungen über die technische Trocknung der bisher weniger genutzten Baumarten könnten dazu beitragen, dass auch in diesem höherwertigen Bereich zunehmend eine Substitution stattfindet. Ausbeuteverluste und mögliche Ursachen in der Forst- Holz-Kette Die Frage der Ausbeuteverluste und ihrer möglichen Ursachen entlang der Forst-Holz-Kette wurde methodisch im Rahmen eines Fallstudien-Ansatzes untersucht. Dazu wurden die Nutzungsgebiete von drei unterschiedlichen Konzessionären (A, B, D) ausgewählt, die von ihrer geographischen Lage und ihrer Struktur her für die primäre Holzverarbeitung durch die Industrie in Ghana typisch sind. Insgesamt 135 Bäume aus neun Baumarten wurden für diese Studie ausgewählt. Dabei handelt es sich um die für die Vermarktung bedeutendsten Baumarten. Das theoretisch holzindustriell verwendbare Volumen aller Bäume in dieser Studie belief sich auf 2.177 m3, d. h. im Durchschnitt 16 m3 je Baum. Tatsächlich aufgearbeitet und zum Sägewerk transportiert wurden jedoch nur 1.638 m3 oder 12 m3 je Baum. Damit betrug die durchschnittliche Ausbeutequote 75+/-11,82%, während gut 25% (539 m3) des an sich industriell verwendbaren Holzes als Hiebsreste im Wald verblieben. Sowohl der Zopfdurchmesser als auch die Länge dieser Reststücke, wie auch ihre Qualität wären durchaus für eine weitere Bearbeitung im Sägewerk geeignet gewesen. Während der Feldaufnahmen konnten ungenügende Arbeitstechniken und mangelhafte Überwachung als die wichtigsten Gründe für diese geringe Rundholzausbeute identifiziert werden. Dabei spielt auch die herrschende Praxis, nach der der Stockpreis ermittelt wird, den die Firmen an den Staat entrichten müssen, eine Rolle: Da nur für das tatsächlich aus dem Wald exportierte Holz gezahlt werden muss, ergibt sich für die Konzessionäre kein finanzieller Anreiz dafür, die gefällten Bäume möglichst vollständig industriell zu nutzen. Aus diesem offensichtlichen Missstand wurde die Notwendigkeit abgeleitet, Modelle zu entwickeln, die zur Bestimmung der gesamten potentiell vermarktbaren Holzmenge eines stehenden Baumes herangezogen werden können, um so den Stockpreis (stumpage fee) rechnerisch zu bestimmen. Auf der Basis der Versuchsergebnisse wurden drei allometrische Funktionen berechnet, die für eine Schätzung des nutzbaren Volumens herangezogen werden können. Für die Bildung von baumartenspezifischen Modellen wurden drei in Ghana vom Mengenaufkommen her wichtige und markgängige Baumarten herangezogen: Akasaa (Chrysophyllum albidum), Wawa (Triplochiton scleroxylon) und Ofram (Terminalia superba). Darüber hinaus wurden auch generelle Modelle ohne spezifischen Bezug auf einzelne Baumarten entwickelt. Als Datengrundlage dafür wurden neben den drei genannten Hauptbaumarten die Arten von neun weiteren Baumarten herangezogen. Im Allgemeinen hatten artenspezifische Modelle eine bessere Vorhersagbarkeit als gemischte Modelle. Der Grund könnte in der höheren Homogenität der beobachteten und der vorhergesagten Variablen bei den artenspezifischen Modellen liegen. Die Modelle, die auf der Basis der Variablen Brusthöhendurchmesser (DBH) und kommerziell nutzbarer Schaftlänge (L) die nutzbare Holzmenge schätzen, waren jenen Modellen überlegen, die als Variable lediglich den DBH heranziehen. Allerdings ist eine zutreffende Ermittlung der kommerziell nutzbaren Schaftlänge stehender Bäume in der Praxis schwierig. Auch die nur auf dem DBH basierenden Modelle konnten die sägefähigen Stammholzanteile einschließlich stärkerer Kronenanteile mit hinreichender Genauigkeit schätzen. Ein so genanntes Log-Tracking-System, das in Ghana eingeführt werden soll, könnte die Anwendung dieser Modelle in der Praxis begünstigen. Wenn mit ihrer Hilfe die tatsächlich genutzten Stammvolumina zuverlässiger als bisher ermittelt werden, kann mittels der entwickelten Modelle auf das reale, nutzbare Volumen der Bäume auf dem Stock zurückgeschlossen werden, und eine realistische Bestimmung des Stockgeldes (stumpage fee) wäre so möglich. Die Nutzung der entwickelten Modelle in der Praxis zur Festsetzung eines realistischen Stockpreises haben jedoch ihre Grenzen: Wenn sich im Zeitablauf die Ausbeuterelationen fundamental ändern, müssen durch aktuelle Untersuchungen die hier aufgestellten Modelle neu parametrisiert werden. Ausbeuteverluste und mögliche Ursachen im Sägewerk Um die Ausbeute von Schnittholz in der weiteren Bearbeitungsstufe zu bestimmen, wurden im Rahmen der Fallstudie in 4 Sägewerken (A, B, C, D) insgesamt 189 Stämme eingeschnitten. Dazu wurden folgende, für Ausbeute und Qualität ausschlaggebende Faktoren aufgenommen: • Dimension und Volumen des eingesetzten Rundholzes • Zeitraum zwischen Fällung und Verarbeitung der Stämme • Risse, Fäule, Pilzbefall und sonstige Fehler am Rundholz • Schnittbild • Einschnitttechnologien • Qualität des Einschnitts (Maßhaltigkeit) • Volumen und Qualität des erzeugten Schnittholzes Die durchschnittliche Schnittholzausbeute lag bei 28,3% und war damit deutlich niedriger als die in vergleichbaren Studien angegebenen Werte. Die Ausbeute schwankte zwischen nur 1,9% für die Baumart Otie (Pycnanthus angolensis), die im Sägewerk A eingeschnitten wurde, bis hin zu 52.6% für Mahagonie (Khaya ivorensis), eingeschnitten in Werk B. Es konnte festgestellt werden, dass die geringe Qualität und die hohen Materialverluste überwiegend auf die lange Lagerzeit zwischen Fällung und Einschnitt zurückzuführen waren. Alle Otie-Stämme (Pycnanthus angolensis) und die meisten der Wawa –Sägestämme (Triplochiton scleroxylon) zeigten tiefe Risse an der Stirnseite sowie starken Pilzbefall, was zu hohen Ausbeuteverlusten führte. Für die Baumart Otie (Pycnanthus angolensis) wurden durchschnittliche Zeiträume von 6 Monaten vom Einschlag bis zum Einschnitt ermittelt, für Wawa immerhin noch 4 Monate. Eine entscheidende Schwachstelle ist also die mangelhafte logistische Planung. Die unflexible Ausrichtung in der Schnittholzproduktion auf nur wenige exportgängige Liefermaße verursachte einen hohen Volumenanteil an Sägeresthölzern, die bei einer entsprechenden Einschnittgeometrie und Sortierung durchaus zu Fußböden, Paneelen oder anderen Produkten hätten weiterverarbeitet werden können. Um die Maßhaltigkeit der verwendeten Einschnitttechnologien zu bestimmen, wurden zusätzlich an 267 Brettern in sägefrischem Zustand Breite und Stärke ermittelt. Die Ergebnisse der Studie zur Maßhaltigkeit des Schnittholzes weisen darauf hin, dass veraltete und schlecht gewartete Sägentechnik für große Volumenverluste beim Einschnitt verantwortlich sind. Schwankungen der Maßhaltigkeit von 2 bis 17% innerhalb eines Brettes konnten bei der untersuchten Schnittware festgestellt werden. Die Streuung der Maßhaltigkeit zwischen den Brettern war signifikant höher, was wiederum eine schlechte Wartung bzw. Justierung der Einschnittaggregate bestätigt. Abschließend muss kritisch angemerkt werden, dass mit 4 Fallstudien der Stichprobenumfang bei der Bestimmung der Einschlagvolumina sowie der Ausbeuteuntersuchungen bei Schnittholz im Sägewerk keine statistisch repräsentativen und auf ganz Ghana verallgemeinerbare Aussagen zulassen. Dennoch sind die Ergebnisse insofern richtungweisend, als dass Ursachen und Faktoren für die hohen Material- und Wertverluste entlang der Forst-Holz-Kette in Ghana aufgezeigt werden. Damit können Lösungsansätze für die logistischen und technischen Probleme erarbeitet, ein effizientes Controlling konzipiert und innovative Ansätze für eine erweiterte Produktpalette entwickelt werden. Diese Maßnahmen sind dringend notwendig, um eine nachhaltige Bewirtschaftung der Naturwälder Ghanas sicherzustellen und den knappen Rohstoff Holz effizienter zu nutzen. ; SUMMARY: Assessment of raw material utilisation efficiency of the forest-wood chain as influence by the forest sector reform in Ghana. The 1994 forest sector reform in Ghana placed priority on downstream processing, utilisation of lesser-used species (LUS) and improvement of processing efficiency in the timber industry of Ghana. To ensure the success of these policy goals, a ban on exportation of logs was introduced and stumpage fees were adjusted to reflect the realistic timber prices on the international market. This thesis was designed to assess the raw material utilisation efficiency under the influence of the forest sector reform and forest-wood processing chain. The thesis set out to investigate the effects of the log export ban (LEB) policy on the downstream processing, the growth of volume and the prices of the export wood products, and the utilisation of the various timber species. Two sets of time series data as compiled by the Timber Industry Development Division (TIDD) of the Forestry Commission of Ghana were analysed with statistical regressions. The first set of data spanned from 1984 to 2005 whilst the second more detailed data set was compiled from 1995 to 2005. This thesis further assessed, on a case study basis, logging recovery and examined the effect of lax supervision on the logging recovery, and thus justifying the need to develop models to predict the total merchantable volume and logically, the realistic stumpage volume and fees. It continued to assess the sawnwood processing recovery and quantified the volume loss due to sawnwood thickness over-sizing and sawing variation and investigated other factors that contribute to the low sawnwood recovery so as to provide managers and operators with insight into their operation performance and identify ways to improve production. Export market- Volumes Before the LEB policy in the years from 1984 to 1995, the total export volume of wood and wood products was about 5.7 million cubic metres. Out of this volume, log and sawnwood exports accounted for about 55 % and 39 % respectively whilst the contributions from veneer, plywood, and processed wood exports were 4.1 %, 0.4 % and 1.4 % respectively. In the years between 1996 and 2005, the total volume of wood and wood products exported during the LEB policy was about 4.5 million cubic metres. Veneer, plywood, and processed moulding showed increasing shares in the export market, contributing respectively 21.3 %, 10.5 % and 14.2 % during this period, whilst sawnwood accounted for 53.9%. The results of the study showed that the implementation of the log export ban policy in Ghana caused increases in the volume shares of the value-added products such as veneer, plywood and processed wood, which is in agreement with the theory that an LEB policy stimulates the production of value-added products. However, important factors such as shortage of timber supply, high export taxes on the primary products (sawnwood), and investment incentives may have played significant roles in increasing the volume of these products. Export market- Prices The study found that the aggregate price index of all the wood products exported before the LEB policy increased by 129 % compared to the decline of the aggregate price index by -3.9 % during the LEB policy. The growth in the export prices of sawnwood, veneer, plywood and processed wood before the LEB policy were respectively 109 %, 238 %, 142 % and 102 % compared to the corresponding growths or declines of 14.8 %, -21.9 %, -47 % and -31.7 % during the LEB policy. Whilst the export prices of veneer appear to have been bolstered by the increasing market share of re-constituted panels such as MDF and OSB, those of plywood from the tropical forests were eclipsed by the increasing substitution of tropical plywood by softwood plywood and other panels such as MDF and OSB in furniture, millwork, and mouldings production. Another important contributing factor to the decline in the prices of plywood is the intense competition from China, which until recently was a major importer of tropical plywood, and is now a major exporter of plywood. The need to find new markets for tropical plywood could help revive its export trade. These decline in prices also appears also to have been caused by such global factors as the collapse of the Asian economy in 1997 and 1998, and the weak demand for international commodity in 2000 and 2001, resulting from the economic recession of the world's three largest economies (U.S.A., Japan and Germany). Export volume of the traditional (scarlet and red) and the Lesser-Used Species (LUS) (pink and green) species During the LEB policy, the export volume shares of the LUS (pink and green species) stayed relatively low. Out of the total export volume of 4,074,570 m³ of the six main products exported from 1995 to 2005, pink and green species (LUS) contributed only 12.5 % and 1.3 % respectively. Furthermore, scarlet and red species had a respective volume share of 49 % and 29.4 % whilst "other species" contributed 7.7 %. The results indicated that flooring and moulding products were almost exclusively produced from the traditional timber species. About 87 % of the flooring and 90 % of the moulding products were produced from both the scarlet and red species. These two products are among the highly-priced export products. The flooring and moulding products are generally used for decoration purposes and the traditional and highly-valued timber species such as the scarlet and red species are expected to dominate the choice of species for these products. This fact probably explains the high volume contribution of the traditional timber species to the production of flooring and moulding products. In the face of a limited supply of the primary timber species, scarlet and red species obviously should be reserved for the highly-priced products such as flooring and moulding. As expected, the trend in the volume share of air-dried (AD) sawnwood produced from the scarlet species showed a substantial decrease from 83 % in 1995 to about 6 % in 2005, whilst air-dried sawnwood from the pink species increased from about 6 % in 1995 to about 22 % in 2005. The substitution of the scarlet species by the pink species reflects the increasing shortage of supply of the former. Another reason could be the result of systematic efforts by the stakeholders in forest management in Ghana to substitute the LUS species for the scarlet in the production of sawnwood (AD) by imposing levies on sawnwood (AD) produced from the primary timber species. Contrary to expectation, kiln-dried (KD) sawnwood had the most stable volume share from the scarlet species, decreasing only marginally from about 86 % in 1995 to about 84 % in 2005. Technical difficulties in developing kiln-drying schedules for the LUS species may explain a higher percentage volume share of the scarlet species used to produce sawnwood (KD). The logging efficiency and the development of allometric models to predict the realistic stumpage volume In a case study approach, a total of 135 trees from nine timber species were sampled from three logging sites of mills A, B and D to allow for the assessment of logging recovery and the development of models to predict the total merchantable volume. The mills were selected according to the prevailing sawmill industry structure in Ghana. The main species were selected on the basis of their forest availability and economic importance. Wawa (Triplochiton scleroxylon), for example, constitutes about 21 % of Forest Inventory Project (FIP) class 1 volume greater than 70 cm in diameter (see Ghana Forestry Department 1989) and hence justifies its higher selection percentage. The merchantable volume of all the trees sampled from the three studied mills totalled 2,177 m³, averaging 16.0 m³ per tree. The logs that were extracted from this total merchantable volume by the mills amounted to 1,638 m³, averaging 12 m³ per tree. The average logging recovery rate of the three studied logging sites was 75±11.82 % whilst 25 % (539 m³) of the merchantable volume was left at the logging site as residues. On the basis of the small-end diameter and length values, the merchantable wood residues were of sufficient quality to warrant their utilisation. For example, the small-end diameter of the residues ranged from 41 cm for ofram (Terminalia superba) to 60 cm for wawa (Triplochiton scleroxylon) whilst the average length of the residues also varied between 4.2 m for sapele (Entandrophragma cylindricum) and 8.5 m for wawa (Triplochiton scleroxylon). The study identified insufficient working techniques and lax supervision as one of the major causes of low logging recovery and the existing practice of fixing stumpage fees gives only weak economical incentives to improve volume recovery. Therefore the need to develop models to predict the total merchantable volume as a basis for adjusted stumpage fee calculation, was justified. To fix realistic stumpage fees, which take into account the true potential of the harvested trees, three allometric equations were developed to allow for comparison in terms of predictive accuracy. Three main species, namely akasaa (Chrysophyllum albidum), wawa (Triplochiton scleroxylon), and ofram (Terminalia superba) were sampled for the construction of the species-specific based models. The mixed-species based models were developed from the three main species and six additional tree species. In general, the species-specific models had a better predictive power than the mixed-species based models and this could be attributed to the relatively higher homogeneity of both the observed and predictor variables of the species-specific based models. Among the mixed-species based models, those that predicted the total merchantable volume indirectly from the log volume had the highest predictive power. The log tracking system which is being introduced in Ghana could benefit from these models. When logging data are available (through the log tracking system) the models could be used to predict the realistic stumpage volume. These models however, were found to perform relatively better for small-sized trees than for large-sized trees over (20 m³). The models that predicted the total merchantable volume from DBH and the total merchantable length had better fits than those that used only DBH as a predictor variable. Nevertheless they have little practical importance because of difficulty in measuring the total merchantable length in the forest. These models have however theoretically showed that, by including the merchantable branches, the general form of allometric equation did not substantially change. DBH as a predictor of the total merchantable volume has several advantages. It is easier and simpler to use since forest inventories include DBH measurements. For the mixed-species based models that predicted the total merchantable volume from DBH only, the site-specific models had a higher predictive power than a single model developed for all-sites, indicating that for a higher accuracy, DBH may be a good predictor of the total merchantable volume of tree species at a specific site. The use of these models, however, presents a limitation. If logging efficiency of individual mills changes substantially over time, the model may have to be validated periodically before it could be applied. Sawmill efficiency In order to determine sawnwood recovery in a case study approach, a total of 189 saw logs were sampled from four mills (Mills A, B, C and D). In order to assess the factors that affect sawnwood recovery, the following inquiries and observations were made and recorded: • Log dimensions (length, diameter at both ends) • Time between felling and processing of logs, • Prior to processing, each sampled saw logs was inspected for defects such as end-splits, rots and fungal blue stain. • Log breakdown technique, • Edging and trimming techniques and • Quality of trimming off-cuts The average sawnwood recovery (28.3 %) found in this study was substantially lower than the reported average recovery rate in the previous studies. The sawnwood recovery ranged from 1.9 % for the otie (Pycnanthus angolensis) processed at mill A to 52.6 % for the mahogany (Khaya ivorensis) processed at mill B. The study found that the poor log quality, resulting mainly from long storage periods between felling and processing, had a substantial effect on the sawnwood volume recovery. All of the otie (Pycnanthus angolensis) saw logs and most of the wawa (Triplochiton scleroxylon) saw logs sampled had end-splits and were severely infested with fungal blue stain and thus their low recovery was expected. The low sawnwood recovery reported in this study could be mainly attributed to a lack of proper management of logs and a lack of adequate logistic planning. For example, the period between felling and processing of the otie (Pycnanthus angolensis) logs was about six months whilst due to logistical problems and poor planning the period between felling and processing of the wawa logs sawn at mill D was about three months. In addition, 267 green sawn boards were sampled from the mills to quantify the sawnwood volume loss due to thickness over-sizing and sawing variation. The results of this study indicated that the volume that could have been gained by reducing the sawnwood thickness over-sizing and sawing variation ranged from about 2 % to 17 % in volume of the sampled sawnwood. The study also found that between-board sawing variation was substantially higher than within-board sawing variation indicating that lack of setworks repeatability could be the major cause of the loss in volume. It was observed that the studied mills concentrated their production on sawnwood in export dimensions and grades. Therefore, off-cuts and trim ends that could have been processed further into mouldings, battens, floorings, and other products were discarded or sold at cheaper prices. The limited supply of timber resources give every reason for sawmills in Ghana to optimise fibre recovery from every tree that is felled. Even though this thesis studied only a limited number of cases, which represent a small fraction of the forest and sawmill industry in Ghana, there is a reason to believe that conditions prevailing in other operations are not very different from those observed in these case study mills. Ghanaian sawmills stand to benefit economically if they could improve their logistical planning and integrate production lines devoted to recovering fibre from off-cuts and trimmings.
Issue 28.4 of the Review for Religious, 1969. ; EDITOR R. F. Smith, S.J. ASSOCIATE EDITORS Everett A. Diederich, S.J. Augustine G. Ellard, S.J. ASSISTANT EDITOR John L. Treloar, S.J. QUESTIONS AND ANSWERS EDITOR Joseph F. Gailen, S.J. Correspondence with the editor, the associate editors, and the assistant editor, as well as books for review, should be sent to R~EVIEW FOR RELIGIOUS; 612 Humboldt Building; 539 North Grand Boulevard; Saint Louis, Missouri 63~o3. Questions for answering s.hould be sent to Joseph F. Gallen, S.J.; St. Joseph's Church; 321 Willings Alley; Philadelphia, Pennsylvania + + + REVIEW FOR RELIGIOUS Edited with ecclesiastical approval by faculty members of the School of Db.'inity of Saitxt Louis University, the editorial ottices being located at 612 Humboldt Building; 539 North Grand Boulevard; Saint Louis, Missouri 63103. Owned by the Missouri Province Edu-cational Institute. Published bimonthly and copyright ~) 1969by REvIr:W. voR REt.mlOt:S at 428 East Preston Street; Bahimore, Mary-land 2t202. Printed in U,S.A. Second class postage paid at Baltimore, Maryland and at additional mailing offices, Single copies: $1,00. Subscription U.S.A. and Canada: $5.00 a year, $9.00 for two .years; othei countries: $5.50 a year, $10.00 for two years. Orders should indicate whether they are for new or renewal subscriptions and should be accompanied by check or money order paya-ble to REVIEW FOR RELIGIOUS in U.S.A. currency only. Pay no money to persons claiming to represent REVIEW FOR RELIGIOUS. Change of address requests should include former address. Renewals and new subscriptions, where ac¢om. panied by a remittance, should be sent to REVIEW VOR RELIGIOUS; P. O. Box 671; Baltimore, Maryland 21203. Changes of address, business correspondence, and orders not accompanied by a remittance should be sent:to REVIEW FOR RELIGIOUS ; 421:1 East Preston Street; Baltimore, MarTland 2120'2. Manuscripts, editorial cor-respondence, and books for review should be sent to REVIEW FOR RELIGIOL'S; 612 Humbold t Building; 539 North Grand Boulevard; Saint Louis "Missouri 63103. Questions for answering should be sent to the address of the Questions and Answers editor. JULY 1969 VOLUME 28 NUMBER 4 SISTER ELAINE MARIE PREVALLET, S.L. Reflections .on . Pr a and Religious Renewal It is fairly commonplace today that in all the talk of religious renewal the most neglected area is that of prayer. One might hazard the guess that this area is one of the most basic and most in need of rethinking and genuine renewal; one might also hazard the guess that people do not talk in depth about it because they do not know what to say. Like other areas of.renewal, there is question of what can be changed and what must remain. iEqually, there is growing realization that it will not be su~ient, to change the horarium and the outward form ur:less there is also renewal of the inner dynamic of /, prayer. To change structure may indeed be the likeliest ',,.¢-,way to achieve the change in process and attitude. If that is so, as the structure begins to change, new develop-ments in our understanding of prayer may arise from the life and experiences of renewal-minded religious com-munities during the next decade. What will be needed, however, is much sharing of and reflection upon the experience of religious, and sensitivity to new insights into the character of their prayer. We shall attempt here only to indicate some general areas of difficulty or de-velopment which characterize our present situation; Two observations may be in order at the outset. First, the difficulty with the concept of prayer is no doubt due to the pace and noise of modern society; but it is, I believe, more largely due to the crisis of faith which characterizes our age. When the basic notion of God is under so much scrutiny, and when one finds so much un-certainty as to the meaning and validity of believing in God at all, then obviously the concept of pra~e.r cannot remain untouched. For the nature and meaning of prayer will be determined by the character or concept of the one to whom one prays. Even though our under-standing of God must be constantly changing and growing, yet it must be in some fundamental way secure 4- Sister Elaine Ma-rie, S.L. is the chairman ol the de-partment of theol-og~ at Loretto Heights College; 3001 South Fed-eral; Denver, Colo-rado. 802S6:!2, ~ VOLUME :28, 1969. ÷ ÷ ÷ REVIEW FOR RELIGIOUS 532 in faith. If we are not sure of God or it we do not know what our relationship to Him is, we cannot, be sure ot praye~---whether we should pray or how much we should pray. Hence, the difficulties in prhyer are closely tied to difficulties in faith.1 Secondl), it seems to me an unnecessary obfuscation of the issue to speak ot work as prayer. Prayer must, ot course, have an intimate connection with life and must therefore be related to work; but it aids neither our understanding nor our prayer to say that work is prayer. Prayer, as I shall refer to it, contains an essential com-ponent ot consciousness, reflection; it includes what has traditionally been named meditation. It may indeed occur that one prays--reflects upon meanings and values in the light ot the gospel message or one's understand-ing ot God--while one works. But to equate the two seems to me to be playing with words, the result being the loss ot the meaning ot prayer. Reflection takes time, effort, concentration. We are not a patient society, not used to being quiet; we are used to looking tot quick pragmatic results. Prayer demands patience and quiet; and it will often produce no immediate, demonstrable result. Hence, the tendency is to want to leave prayer aside, and one way ot doing this is simply to make facile verbal equation between work and prayer. The;~is~ sue is then quickly settled. When we are lett to our own in the matter that is, it we have provided no set time or place or fre-y.~] quency-~our experience will probably be that prayer will, sooner or later, simply drop out ot the picture. It will be pushed out by more immediate demands, more concrete "work to do." Yet it seems essential that the lives ot religious have a dimension ot depth and that religious themselves have what might be called a con-sciousness ot ultimacy. They must have a certain steady perspective, a clear focus. They must have this, not just for themselves, but [or others, as part of their service. Yet, in the immediacies that make up daily living, perspective and focus are easily lost; depth quickly turns shallow and empty. It seems necessary, then, to provide for oneself time and quiet to ponder meanings and values in the light ot the gospel message or in the light o[ one's understanding ot God. It is necessary to deepen one's understanding o[ faith, to reflect on the meaning ot God's loving presence. Finding God in prayer is a necessary concomitant to recognizing His presence in XA good treatment of this situation is given by Douglas Rhymes, Prayer in the Secular City (Philadelphia: Westminster, 1967), espe-cially pp. 12-25. all things. Obviously, this is saying nothir~g new. It is simply reasserting the value of balancing action with contemplation.2 Let us now consider some perspectives which may prove valuable to the development of prayer at the present time. Christianity and Personalism From all sides we become aware that we are living in an age of "the person," an age which has a new realiza-tion of the value, the uniqueness, the importance of the human person. In this context, Christianity shows itself as eminently propounding the value of the human per-son: the Christian revelation of God as Trinity is, after all, a revelation of God as personal, as communicating Persons. The Incarnation speaks of the personal love of God for man and His desire to be in communion with man; the Resurrection of Christ speaks of the continuing possibility for man to be in personal communion with God through the humanity of Christ. These three central dogmas of the Christian mystery indicate that man's re-lationship with God is a deeply personal one, allowing whatever is deepest and most unique in each man to find its expression and its fulfillment in his relationsh.ip with the Divine Persons. If we seek to understand prayer, therefore, we may well begin with simply this affirmation of man as person and God as Persons. We may move from that to a second affirmation, equally involving the dimensions of person, and speak of presence. For the possibility of being per-sonally present to another is one of the highest preroga: tives of man. Here again the Trinity speaks of personal presence as belonging to God Himself; the Incarnation speaks of the presence of God to man in Christ, and the Resurrection speaks of the continuing presence of the risen Christ to His followers. If we wish a basis for personal prayer, we need no other starting point than these fundamental Christian affirmations. We can under-stand personal prayer as involving the presence of the Three Persons who are God, and, most especially, the presence of the risen Christ. To be conscious of this presence requires faith, but also deliberate effort--time and concentration--to reflect upon the faith-datum and its significance. ~ We do not wish to assert priorities here; it is not a case of either/or, but of both/and. Equally, we do not wish to deny that when faith is deeply lived, there need be no disjunction, between work and prayer. But given our human situation, it seems safe to say, minimally, that thought is necessary for finding and maintain-ing meaning and perspective. -:;- ", -- 4- ÷ ÷ Prayer and Renewal VOLUME 28, 1969 Sister Elain~ Mari~ REVIEW FOR RELIGIOUS Individual Prayer We can move from here to ask what characterizes the relationship between the risen Christ and the believer, and therefore what the qualities of prayer will be.~ We can treat these briefly under the headings of love, need, and thanksgiving. If we examine any love relationship, we will find that it always involves a personal petition to be accepted and loved by the other. Hence love always involves prayer to the other--a petition, implicit or explicit, for under-standing, for acceptance--simply for communion. In the last analysis, what any such prayer seeks is com-munion of heart and mind, reconciliation of under-standing and wills. Expressed simp!y, we want to be one with the person to whom we are praying:' we want him to understand our prayer, and we want to understand him as he receives our prayer. It is here that meditation on the life of Christ in the Gospels finds its importance. For the risen Christ now is the same Christ who lived the inciden~ ts portrayed in the Gospels; He is now, as it were, the result of the experiences which He assimilated dur-ing His earthly life. The mysteries of His life on earth live on in Him, and they must be entered into by any-one wishing to know Him as He is now. To use an analogy: I am as I am now because of what has hap-pened to me in the past. Anyone who wants to under-stand me deeply ~nust understand certain of the signifi-cant experiences that have formed me, have given my life direction. And in the measure that another under-stands in a deep and compassionate way my past, in the measure that another has been able to enter into my past, to experience it with me, the other will under- Stand me. So in our attempt to come to union of heart and mind with Christ: insofar as we penetrate the experience de-picted in the gospel, we come to understand the living Christ who is now as He is because of those experiences. If we want to know the Christ whom we are petitioning, then we will need to know Him through the Gospels.* Further, in any love relationship, the one whom we love finally determines both the character and the con-tent of a prayer; in some sense then, the one addressed in prayer has a major role in creating the prayer. We * Much of the following is drawn from M. Nddoncelle's analysis in God's Encounter with Man (New York: Sheed and Ward, 1964). * For a more detailed and carefully nuanced presentation of the place of contemplation of the Gospels in Christian life, see David Stanley, "Contemplation of the Gospels, Ignatius Loyola, and the Contemporary Christian," Theological Studies, v. 29 (1968), pp. 417--45. will ask for what the one petitioned can give, and we will ask it in a way we know to be acceptable to him. Reflection upon this will perhaps give a direction for thinking about the questions so often posed these days: why should I pray? for what should I pray? If one re-flects that the one receiving the petition is God, loving and personal, then one might conclude that one could ask God for anything, for nothing is impossible to Him. However, if one considers more deeply the person of Christ, and, knowing Christ, knows also His deepest concerns, then one would be led to pray not for trivia but to seek in prayer a communion in His concerns. The Christ of the Gospels has as His deep concern the genuine well-being of men, their relationships, their dignity, their fulfillment. Our prayer, then, if it really considers the one petitioned and seeks communion with Him, will result in a sharing in His concern for men, communion in His outlook with respect to the needs of men, communion of understanding of the Christian task. Thus, if we have sought genuine com-munion with Christ, our prayer will impel us outward-- to meet the needs o£ the neighbor. This means also that we need not leave behind or abstract from our own daily living and working in prayer, but rather that we try to come to see how Christ's concern, His outlook, His understanding, can be translated by us into our con-crete situations. From the other side, the one petitioned would want to understand us as we approach him in prayer--why we pray, what its content means, and to respond in the way that will fulfill the deepest need of the one praying. Love does not refuse the petition of love, yet must be at liberty to answer as love knows best. Hence prayer can never be an effort at manipulation; it can never seek to use the other as the instrument of its own advance. Love approaches the autonomy of the other, approaches him freely and leaves the other free in response. Again, then, love is seeking nothing so much as communion; it is entering into the myster~ of the other, it is allowing two freedoms to meet, it is allowing its own develop-ment to be charted by the free response of the other. Prayer will accordingly always contain an element of surrender. But we can approach prayer also from the angle of existential human need. To seek communion with an-other is really to seek to fulfill a deep human need--the need to come to terms with human existence as incom-plete, to free oneself from self-sufficiency. To recognize one's own need, to approach another in need is, con-trary to our tendency to sufficiency, deeply human and + Prayer and Renewa! VOLUME 28, 1969 Sister Elaine Marie REVIEW FOR RELIGIOUS 536 deeply fulfilling. To pray to another is to offer oneself as apprentice, to be willing to learn, to admit that we do not know or cannot do, that we are not in complete mastery of the course of our destiny, that we do not always perceive the meaning of events. Being ready to admit our insufficiency and approaching Christ to try to see things as He sees them, to seek thus a reconciliation of our mind and heart with His is already fulfilling an existential demand: that we, humanly, are limited, are needy, that we find fulfillment only in communion. To pray, then, belongs to the truth of human nature; it is an impulse that genuinely expresses and fulfills a deep need of human existence. The attitudes of love and of need come together in the basically Christian prayer of thanksgiving. For we turn to Christ as the effective sign that we are loved by God, that His love has touched our humanity and opened it. In relationship with Him we recognize that our human need is not a burden but a joy, the joy of being creatures, the joy of being redeemed and accepted as sons of a loving Father. In Christ, then, we need not make a pre-terise of sufficiency but can freely and lovingly admit our need and turn to him for acceptance, for a perspective which is fuller than our own and can complete and cor-rect it. Because we are creatures in need, yet because He lives to be in loving communion with us, our prayer of need is already thanksgiving. For our deepest existential need is to be accepted and loved as we are and thus brought to transcend ourselves. Communion with God in Christ can do this in a way that no human communion can. It is Christ who most fully recognizes and accepts the human condition as creaturely, as unredeemed, and who exists only to meet us "where we are," and to bring us beyond ourselves to the Father. When we turn to Christ in prayer, it is then already thanksgiving that He is there, that He knows us and loves us as .we are, that we can be in communion with Him. Community Prayer What distinguishes community prayer from individual personal prayer is, obviously, the presence of the com-munity. But this factor can provide us with some ma-terial for reflection. We may start with the premise that each individual has been touched and loved by God; each is uniquely related to God in Christ. Further, each individual has his own gift for the building up of the Body of Christ. For a community to be a community in any profound Christian sense, there must be among the members a sensitivity to the part played by each, an ap-preciation of the unique gift which, each possesses, a willingness to help each other be what he or she is in- tended to be. There must be a sense of belonging to each other, of being for each other, of affecting each other by what each says and does and is. There must be, then, some sense of communion. It is perhaps precisely the phenomenon of the com-munity that has been neglected in our previous methods of community prayer. If we take seriously the presence of Christ in each other, then .we have to admit that each member of the community may be a "word" of Christ to us. Community prayer might well include some oppor-tunity to listen to the word of Christ from within the community. This would presuppose that the members approach community prayer with the mentality of being "present" to each other, as well as to God; it would mean that we make some effort to be conscious and aware of the others with us at prayer, instead of regard-ing them as a source of distraction. The community at prayer adds a new dimension--the presence of Christ in each other--to our way of approaching Him in prayer. One might, in this context, suggest that some of the prayer we address to Christ ought, in fact, to be a prayer to the community. A prayer of loneliness, of weariness, of discouragement, might more practically be met by Christ in the community than by Christ addressed ver-tically. This implies, of course, great openness among the members of the community, sensitivity and receptivity to human needs. The basis for such prayer can be seen in this passage from Origen: Take the case of a man who is of the number of those who have acquired more than sufficient of the needs of life and charitably hears the request of a poor man who petitions God for his wants. It is clear that this man too will accede to the petition of the poor man. For he obeys the will of the Fa-ther who brings together .at the time of prayer the one who prays and the other who can grant the prayer and cannot, because of God's kindly provision, ignore the needs of the former. We must not, therefore, think that when these things hap-pen they happen by chance. For He who has numbered all the hairs on the head of the saints brings together in harmony at the time of prayer both him who can do a service, giving ear to him who is in need of His benevolence, and the one who devoutly prays? God answers men's prayer by bringing the community together so that men may, in Christ, meet the needs presented there. One may, evidently, speak one's need-- or in other words, pray--to Christ through the commu-nity, and it is in this way that He answers one's prayer. To do this in the explicit context of Christian prayer ÷ ÷ ÷ Prayer and Renewal sOrigen, Prayer, xi, 4-5; translated in Origen: Prayer, Exhorta- VOLUME tion to Martyrdom, trans. John J. O'Meara (Westminster: Newman, 1954), pp. 45-6. 537 REVIEW FOR RELI@IOUS 5S8 seems to provide a genuine opportunity of deepening one's faith in the presence of Christ in the community, as well as drawing attention to our responsibility to meet the needs of others--an end toward which prayer to Christ must always lead us. Further, it is our human experience of what it means to be related as persons that is always our prime analo-gate for understanding our relationship with God in Christ. Community prayer may provide us with deep experiences of what it means to be persons in commu-nity, and therefore might greatly aid our understanding of what we mean when we speak of God as Persons, or of the Trinity, Community prayer will be improved, it seems, if we consider it not only as individuals gathering to recite together the same prayer, but as individuals gathering, sensiti~ce to and aware of each other, to say who they are together: that they have common desires, common needs, a common faith. They can profess at once their faith in God and in each other, their trust in God and in each other. They may gather to say to God and to each other that they are sinful, that they need forgiveness from God and from each other. They may listen and respond together to Scripture or to other readings that would bring them together in communion with Christ in heart and mind, and in communion of conviction and purpose with respect to their task in the world. We do not wish to deny the value of structured com-munal forms of prayer such as the Divine Office. These can provide a welcome balance for the more personal, subjective form suggested above. We wish only to sug-gest that on occasion some way of acknowledging and being aware of the presence of each other in prayer may be an important factor in preventing community prayer from becoming formalized, and may be a way of keeping ~t relevant to the life and needs of the community. It becomes, then, a means of growth in faith and in love both for God and for each other, and thus a means of really creating genuine Christian community. If individ-ual prayer seeks communion of heart and mind with Christ or the persons of the Trinity, then community prayer must have as an added aim a communion of heart and mind with the community. It seems obvious that this is somewhat difficult if nothing is done to make one aware of the presence and needs of the community members. Community prayer must aim at making a conscious community in Christ--by sharing in ioy and sorrow, need and suffering with each other, in the presence of Christ. A community becomes a community precisely by acknowledging needs and praying to and for each other. A community, then, comes together to pray, but it is also formed into a genuine and meaningful commu-nity through its sharing in prayer. From a different angle, reflection upon our experience of the community indicates that all members of a reli-gious community do not have the same gift of prayer. Given the premise that each individual has his own gift for the building up of the Body of Christ, it seems evi-dent that some individuals are, by temperament and by gift, more disposed to prayer-.and reflection than others. Perhaps this is an area where the fruits of one's gift for the Body must be seen in a communal context: that if' we have in our community someone with a gift for prayer, we all share in the benefits of his or her reflec-tion, his prayerfulness. This in no way dispenses the other members not so gifted from any effort in this direc-tion. Each person must be concerned about acquiring the dimension of depth in his faith life, must be con-cerned about communion of heart and mind with Christ. Yet if it is our experience that even in religious commu-nities all do not have the same gift, we may profit from trying to understand that experience. All must be sensitive to this gift in their midst, ap-preciate it, and encourage its development. Equally, all can benefit from those who do have a special gift of prayer. But this implies that the one so gifted must be openhearted enough to share his insights and reflections, for this is part of the responsibility connected with the gift of prayer as contributing to the building up of the Body of Christ. Doubtless we need to reflect more deeply upon the matter of responsibility to and for the gift of prayer. No prayer is purely individual. All prayer be-longs to and is at the service of Christian community. Sacramental Prayer Sacramental prayer may now be ,seen as incorporating and epitomizing all the elements present in other forms of prayer. Christ is present to each individual who par-ticipates in sacramental action; each is uniqt~ely re-lated to Him. The community is also present--present there to each other and to God. Christ is present in the community. But He is also present, acting through the symbols used in sacramental action. Here, once again, we need to be conscious not only of ou.r vertical relationship to Him, but also of the other members of the community, aware of them and present to them. We need, further, to be conscious of how Christ is present in sacramental signs: we need to have reflected deeply upon the natural meanings involved in each of the sacramental signs, but also upon their specific Christian meaning, shared and understood by the com-munity. For Christ will act toward us according to the meaning of these signs. Each sign says something to us ÷ Prayer and Renewal~ VOLUME~281 1969, ".~ + ÷ ÷ Sister Eioine Marie REVIEW FOR RELIGIOUS 540 as individuals loved and touched by God, but also to us as a community. Sacraments are occasions when we gather as a community to celebrate, in specific, signify-ing ways, God's loving us and His acting through Christ in our midst. Ideally, then, sacramental action should include some opportunity for explicit awareness of the community. How this may be done with greatest effectiveness may vary. A communal celebration of penance might include, individual "prayer" to the community, or the commu-nity's praying together to acknowledge its communal blindness, inertia, and negligence, its need for forgive-ness, for Christ's redeeming love. It might include some action or gesture to signify forgiveness of one another as mediating, along with the sacramental sign, the forgive-ness of Christ. The Eucharistic prayer is more easily recognized as communal, since our eating of the one bread and drink-ing of the one chalice say that we already share, in Christ, a communion of life with Him and with each other. The signs of food, and Christ's presence to us through these signs, as well as the presence of the com-munity there, both say that we are creatures who need the sustenance and nourishment of faith and hope and love; we need this nourishment from Christ, but also from one another. This is eminently the sacrament of thanksgiving, as we return to God, in and with Ghrist, all that we have and are. The Eucharist is in a very real sense the highest point of our prayer, both individual and communal; it is the culminating point of our presence to and communion with Christ and the Chris-tian community. It should be an occasion of real cele-bration of our community in Christ. More thought will need to be given to the matter of celebrating, and how our awareness of each other, of our community, can be given recognition in Eucharistic celebration. Conclusion This is obviously only a sketch of some lines along which we might watch for development in the prayer life of religious communities. There is urgent need that religious be convinced of the value of prayer and de-termined to realize its value and meaning in forms suit-able for our times and within the thought patterns of our age. We have undertaken the task of wholesale re-newal of religious life, including its most mysterious dimension, that of prayer. If we fail in this task, some-thing deep and nourishing for our lives and the life of the Church will simply die. Only if we succeed will we find strength, vitality, and meaning to enable us to make our contribution to the Body of Christ in the twentieth century. It is worth our best efforts. EDITED BY THOMAS F. O'MEARA, O.P. Community and Commitment COMMUNITY There* is a new burst of awareness and[desire for com-munity both within and without the Church. The need for community lies deep in the heart of ~tlan. Religious and apostolic life cannot find its source} realization, or sign value simply in the fact that a gr~oup of men or women dress alike and perform certain ritual actions together Human relations are too profound, too deep 1y explore~, too important for this-superfiCial bond. Why do religious live in community? In some way it must be to enable and to enrich a human, Christian, apostolic, and celibate life. Each of these aspects calls for commu-nity and must find it or be frustrated. For-the present generation, isolated and made anxious by advancing technology, community is essential. A! new view of religious life must emphasize its importan.ce and its roots in the New Testament. Community exists to help the person develop as a person, to help the Christian develop !as a Christian. Community must be an adult familial ~ommunity, for this is basic to man. If a man does not create one through marriage, he must find another form, for man cannot live totally alone ~nd live healthily. R~.ligious commu-nity life, like the Christian individual, i~ a place where nature and grace meet. The charisms of the Spirit, the times, the heritage of the order, the psychological needs of persons are an array of aspects highl:ighting the im-portance of community. Community supports the indi-vidual in his apostolate; it gives hir~ direction and encouragement. But community is not jffst the backdrop * This article is excerpted from a paper feceS,' tly prepared by a group of midwestern Dominicans. The title ofI the ful.1 paper is "Towards a Theology of the Dominican Life in the United States Today." The article presented here has been edited b~ Thdmas F. O'Meara, O.P. I + 4- 4, Father Thomas O'Meara, O.P., is a member of Aquinas Institute School of Theology; St. Rose l~riory; Dubuqqe, Iowa 52001¢ " - . ; VOLUME 28;.1959: ¢'.,' 541 T. F. O'Meara, O.P. REVIEW I~OR RE~L[GIOUS ~2 for activity; it is essential to effective Christian life and apostolate. Apostolate and community are correlatives. Neither can be defined without the other. We are in-volved in a communal apostolate and an apostolic com-munity. We do not yet know how the rather recent re-discovery of the importance of community will effect a more profound level of community life; but we do know that for the United States and the American life style this rediscovery is extremely important, perhaps more important (and more advanced) when compared to the life style of Europeans. The previous form of routine, joint prayer (which is not the same as communal prayer), tolerant charity, frustrating or limiting obedience was insufficient. It often led to seeking a "family" outside of the priory rather than bringing friends into our family. The jurid-ical description of community is insufficient, since community is primarily a human and Christian, a psy-chological and socio-theological reality. Law can neither form nor direct true community; it can only give a very few boundaries beyond which community could not exist. From these legal lines to real community is a long road, but it is a road which the Christians could begin to traverse if they would emphasize grace, not law. If the Church is a microcosm of the world, the reli-gious community is a microcosm of the society in which it lives. The religious community should be a kind or type of Christian community, a model for it. By its very existence in communal sharing and dedication to preaching the gospel, the religious community shows it is not the world. But the religious community is in the world. It shares in human communities--in their life and in their structures. By baptism and vows we look to a special fulfillment beyond the merely social community of family and city. This is possible, however, only by listening closely to the insights of the gospel, to the Church, and to the contributions of the secular sciences. Psychology can be seen as a kind of praeparatio evan-gelica for healthy community life, for charity, maturity, honesty, joy, and dedication. We must learn what is the correct size for a community of men or of women, as determined by social and psychological studies; how a community can best be directed; what is the importance of work; whether one community needs a single apostolic goal or whether these can be pluralistic. Neither theology nor canon law have all the information on this; social psychology and management planning must help. We will see below that the community is the source of authority. The superior exemplifies the spirit of the community. He inspires and coordinates the ac-tivities of the community flowing from their life and work. He is not, primarily, a secretary, a bookkeeper, or a control center for daily life. The community should be open because Christian Iove is open; the community is mature and the superior a guide rather than a controller because this reflects the Christian (not the Jewish) idea of God. No closed community is happy. Jesus Christ was not closed in upon himself. Christian community-apostles must not be just intellectually open, but emotionally and psychologically open to change, to newness, to risk. To be such, the religious community must be physically open to the com-munities it borders. Religious communities cannot be fortresses, for these are anachronistic. Rather they must be dynamic centers of the Christian prophetic word en-gaging in conversation and cooperation with the world. Privacy and silence have a purpose, but they are not absolutes; they are ordained to dialogue and mission, and so cannot object to a reasonable openness of a com-munity to those for whom we exist. Just as vatican II showed that the world was vastly complex and different, and emphasized the local church as the New Testament does, so too a new view of reli-gious life will emphasize the local community. This is where religious life will be lived or will die out. The novitiate and a few houses of so-called strict observance cannot be the norm, especially in the United States where such a "norm" would be viewed as hypocritical. The local community will either attract novices to its kind of life or none will come, since young Americans are now attracted to concrete persons and what they are doing, not to ancient saints or romantic descriptions. The local community is all-important, and the province is seen as the coordinating center of creative and respon-sible local communities. VOWS IN C01V[MUNITY The Vows as Commitment to Christian Community and Ecclesial Apostolate The vows are directed towards community member-ship and activity. Since they are acts of persons, they have personal implications such as lasting celibacy, per-sonal mortification and denial, communal sharing, and so forth. But the community dimension can no longer be eclipsed by the personal; it is the community way of life which asks for celibacy; it is a particular level of apostolic efficiency and potential which requests poverty; and obedience is basically not the submission to one man's direction in the details of li[e, but the entrance into a community with its own necessary leadership. Vows are a lasting commitment to service through corn- Community and Commitra~nt VOLUME 28, 1969 munity for the kingdom of God. Obedience is commit-ment to community; poverty exists for service, peace, and equality; chastity is essential to this kind of dedication. Because of the importance of the New Testament record and an individual's commitment, we must have a Biblical theology of commitment-in-vows. We 'must have not only a Biblical theology of the vows, but a sociology and psychology of them as well. The vows are not re-straints but liberating influences. Are the vows the same as every and any commitment to a religious community? Do they have positive sign value today, as the Council de-mands they should? Does their nomenclature get in the way? Perhaps it is possible to see different levels of active commitment following evangelical counsels: these levels would be introductory (novitiate), temporary and termi-nal (auxiliaries), permanent but open to dispensation, and final. We must be wary of stating a theology of vows in terms of any dualism or any triumphalism. We cannot take for granted our identification of virginity with virtue, poverty with righteousness, or the religious life with a higher state. The vows, like the religious life, cannot be absolutes since they are means. How can Americans rediscover, emphasize, and expli-cate the goals towards which the vows tend. If these goals die out or escape achievement, the vows no longer have any real purpose. The keeping of a vow without any purpose or success is not in keeping with Jesus' reli-gious thought. Vows are means to love, to zeal, to open-ness, to adaptation, to maturity, to Christian apostolic success, to service. Vows do not permit us to have no concern for the future of ourselves or our society, to have no interest in others, to withdraw, to escape decisions and responsibilites, persecution and defamation, to es-cape the necessity of worrying about life and livelihood, to ignore the effectiveness of our community and the Roman Catholic Church. The purpose of the vows is to communicate Christ through a personal and communal life in God. 4. 4. 4. T. F. O'Meara, O.P. REV|EW~ FOR RELIGIOUS 544 Chastity A theology of religious chastity avoids every dualism. It never loses sight of the goodness of human emotions and sexuality, the permanent role sexuality plays in a balanced personality. Chastity is not a means of not-getting- involved in the world, of "avoiding near occa-sions of sin." Chastity is not a way of playing safe, nor are sins against chastity the most horrendous of the religious life, adding "malice" to sexual disorder. A re-ligious~ chastity can be a .selfishness of great proportions. Chastity must search seriously for its justification, and each must ask whether he justifies his living of a life which is not creative of human family; he asks this question not just once at perpetual vows but throughout his life. It is not at all clear that Americans today are more involved in sexual immorality than in the past, although they are certainly barraged with the glorification of sexuality. Still, the seriousness of not sharing one's life with another human being, the potential ambiguity of sexual abstinence, and the gift of creating a family should not be set aside easily. Does celibate chastity as a commitment to a community of Christian service have the theology and sign value for today it deserves? How do religious love in a human way? How is sexuality present in a love for the community and the world? Psychology must help to determine the dynamics and limitations of chastity in each individual, and the particular conditions which this or that province or house must take into ac-count. Chastity allows for a certain level of Christian dedica-tion to the apostolate and sanctity. It is academic to ask whether this is better or best, since only the individ-ual with his God-given vocation has a "place" in the sight of God. Chastity allows (it does not insure or cause) dedication: (a) to many persons rather than a few; (b) to areas of work which are dangerous or demanding in an exceptional way; (c) to an intensity of work in quality and quantity. Chastity is connected with the revolution-ary, missionary, and suffering nature of the Christian apostolate insofar as the celibate preacher of the gospel can go where a family cannot. Ghastity and poverty allow a certain economic and social independence, a freedom from political or economic systems which may be perversely harming human life and development. Poverty Poverty is not simply the absence of normal or special consumer goods. Amid growing American affluence, poverty is an evil, and the American mentality is intent upon its elimination. Christian "poverty" can have value in America as a sign of Christian eschatology and as an identification with the downtrodden and persecuted. In the present social and political upheavals within the United States, it has become clear that some religious who "practiced" poverty (sometimes in ludicrous detail) at the same time possessed a mentality which was un-sympathetic to the poor. Poverty must be seen, then, as a sign of the worldly and transcendent kingdom of God, of the "already" and "not yet" of the Christian mission. There are three aspects of poverty within the religious life, aspects which must be constantly tested as to whether they have a contemporary voice and to whether ÷ ÷ ~ommunity and Commitment VOLUME 2~ 1969 T. F. O~Meara, O.P. REVIEW FOR RELlflIOUS they are kept in the right balance. (1) Poverty of the individual and community must be proportionate to the particular apostolate and community. Poverty must smooth the road to effective apostolate and Christian Service. We must not let privileges, traditions, "contacts" little by little lead us away from service to the poor and persecuted. (2) Poverty has sign value: it frees us for work for the kingdom of God which is coming; it pro-claims our faith in divine providence and in the power of Christ to become the center of the evolving world. Our faith in Christ above and within the world is active now and in the future. (3) Poverty frees us for work among persons and proclaims the primacy of the personal, Christian, spiritual over the material. Wealth is power; but poverty affarms faith in another power, a power which is ultimately greater because it influences not mountains or machinery but persons and ideas. Vatican II emphasized the importance of real sign value to poverty, the importance of personal poverty and of corporate poverty. The latter demands real financial sharing on a national and international level as integral to the living of the vow of poverty. The Constitution on the .Church in the Modern World asks that we take up dialogue with the world as it is. With regard to the eco-nomic dimensions, we see that technological society has given us means of great value and importance. Wealth is good, and the assumption---dominant from the origins of man--that poverty and sickness were inevitable and frequent is now questioned by American youth, scien-tists, and polity. The correct direction of this nation's wealth and power would be a greater byproduct of our dedication to poverty than our supercilious contempt of all who possess or study wealth. In short, are we "using" our poverty for people? Poverty not only allows us to be especially dedicated to apostolates, but demands that we employ well time and energy in our areas of work. Poverty can mean em-ploying secretaries, jet travel, electronic media, and so forth in order to reach in a year (or a day) thousands more than Paul or Dominic contacted in a lifetime. On the personal level, poverty can easily be rendered mori-bund by establishing a life where all needs are filled im-mediately within a fully ordered house. Poverty means lack of security but trust in God. Poverty should prepare religious for living in the present era where the models and, concepts of the religious life are being hotly debated and seriously questioned. Poverty and faith are corre-lates; poverty and routine or unchallenged life are con-tradictions. Poverty rejects any defense of the past which turns priories, publications, apostolates, liturgies, and so forth into the displays of a museum. This is espe- cially true in the United States where we have practically no past and where our mentality is future oriented. Very practically, poverty is a commitment to commu-nity life. The American religious wants to know where and who this community is. He takes for granted his right to have some information on how the large amounts sacrificed or earned are being spent. The United States' Church has experienced many cases of poor planning, excessive construction of buildings, un-needed schools and apostolate.s, waste or diffusion of sums of money. The Christian who commits himself to poverty in a community has an obligation to see that that community itself is not sinning against poverty, and clearly superiors must answer not only to God but to the members of the community who freely offer their earnings. The spirituality and life of r~ligious in the area of poverty are not helped but rather frustrated by re-mote, corporate decisions on the expense of money. Can we not expect that a religious who sees money wasted will hesitate to remain within the community or to con-tinue his work and sacrifice? Obedience Thomas Aquinas emphasized the theological impor-tance of God's creation and agents. God acts directly in His world rarely. Similarly, obedience is not just a per-sonal relationship to God, and a superior never fully takes the place of God or Jesus Christ. Obedience is a commitment to God's kingdom revealed to us in Christ as present in a special ecclesial community. Obedience like authority involves community. Americans are raised in the Anglo-Saxon tradition of law. This tradition is often almost in contradiction to certain RoMan and European philosophies of law. The British and American legal mentality looks to a mini-mum of laws and a maximum of obedience; this is allied to equity but does not tend toward dispensation. Clearly the spirit of religious constitutions of the past and the Code of Canon Law stem from another philoso-phy. That is why the Constitution of the United States with 190 years of amendments fills only a few pages, while the laws of the community of "Christian freedom" are numerous. This national difference will influence American reaction to laws, authority, and obedience in the religious life. The purpose of authority is not to rule over the de-tails of the life of children, but to enable their matura-tion and sanctity. Adulthood, participation, and deci-sion- making can and should belong to all the members of a community in a society where political maturity is taken for granted. From the point of view of charisms, Community and Commitment VOLUME 28~ 19~9 54~ T. F. O'.~e~,~'a~ O.P. REVIEW FOR RELIGIOUS 548 the Spirit cannot be relegated to the mind of the supe-rior, nor will educated Christians accept the point of view that the will of the superior is always God's positive (as contrasted with His permissive) will. Education and adulthood render implausible the Neoplatonic idea that the superior informs the inferiors, because he always knows--intellectually or theologically--more than they do. Rather, the superior brings to focus the will of the community when it is holy and reasonable, or solves dilemmas presented by opposing parties. Traditions of democracy, initiative, consensus, and Aquinas' emphasis on nature with grace and secondary causes under God have been obscured by later spiritual theologies. There is a crisis in communities over whether differ-ent points of view exist, or whether bureaucratic con-trol can yield to political maturity. Today's crisis of obedience cannot be solved by more laws, stricter cen-sures, and tighter controls. This will only lead to the sin of forcing schism and apostasy. Mature Christians can-not renounce their own consciences over what seems er-roneous or insignificant. The crisis of obedience shows that a new kind of person is emerging in the Western world. He is quite different from either the Medieval peasant or the European bourgeois. His education, social responsibility, and creative initiative can either be used within the community, or he can be rejected. But he will not choose to live as a non-person, stripped of his own existence and potentiality--for neither common sense nor Christian virtue would suggest that he do so. There is a crisis in the Church today centering in the realization of authority. This is not simply "a crisis of authority." What is at issue is not that authority, even that infallible authority exists, but how it exists. This crisis is of great extent and needs a solutio~frather than a repression. The crisis is stimulated by the ever in-creasing role played by the mass media in Church affairs, by Vatican II's theology of collegiality, and by the transi-tion of the Church from a feudal or immigrant power to a vital stimulus within a pluralistic society. The crisis is particularly acute in the United States due to our lack of roots in the past history of the Church, to the American political mentality, and to the tension arising from past attempts to merge these two. The future should not be allowed to witness a growing division be-tween our standard style of administration on the one hand, and the majority of religious, especially the young, on the other. The New Testament recognizes even within its nor-mative pages a certain pluralism in Church forms. An example of this is found in St. Paul's First Letter to the Corinthians, Chapters Twelve through Fourteen. Different gifts are given to different members of the Church by the same Spirit. Every member of the Church does not have the same function, just as each part of the body does not have the same function. Though these members have different rules, a unity still exists from the members' re-lationship to Christ. There is a diversity in the Church, but it is a diversity which is unified in Christ. All of these gifts are given for the upbuilding of the Church. In this view of the Church given by St. Paul, there is definitely an emphasis on a plurality in Church forms, but a pluralism which is unified in Christ. Yet, the division, isolation, and frustration felt by many religious do exist. Where does it come from? Cen-tral authority often seems to be irrelevant. Why? Perhaps because it offers negative laws post factum rather than leadership before and during the moments of decision. This kind of authority is frustrating to those who have not been consulted and whose circumstances militate against the decision taken; it is irrelevant to many who may with risk choose to prefer real community and effec-tive apostolate to belonging to a long established group. The following three ideas are guidelines by which to measure practical decisions on renewing the concrete realization of government. (1) Charity. Charity is primary. Past constitutions have given the impression that holiness and charity come infallibly from obedience. Experience teaches that this is not true. Love for the community and the in-dividuals in it must have a certain primacy over systems, machinery, and political goals. Love is prior to obedience and is the original cause of obedience. The present crisis will not be solved without a greater emphasis on love for the individual person. (2) Freedom. It is the purpose of neither the vow of obedience nor of government to plan each individual's life and day. There should be an atmosphere freely to be lived in, not a minute horarium to be conformed to. Vatican II's Church in the Modern World begins with man, his dignity, and freedom; religious should not be afraid to follow that example. The purpose of au-thority should be to offer maxrmum help with minimum legislation. (3) Comumunity. Freedom, education, and personal maturity are some of the catalysts for today's crisis in religious community. Until we are accustomed to col-legial decisions at all levels, we will have anguish and potential death in American religious institutes. Three things are involved in the government of a community vis-a-vis the new problems: (1) the struggle for real com-munity life; (2) the necessity to be, without sacrificing heritage or unity, pluralistic; and (3) the desire for the ÷ ÷ ÷ Community and Commitment VOLUME 2BI 1969 549 T. F. O'Meera, REVIEW FOR RELIGZOUS 550 apostolate to correspond to personal needs and exigen-cies of society, and to help form community. It is clear that we do not have all the answers as to how to form this new community life on either the per-sonal or the structural basis. Clearly some things must go and others stay. But we must strive towards what is mentioned immediately above, for they are fundamen-tal to what religious life claims to be. The struggle to-wards this is itself good. Complaints about impending doom and disaster fail in Christian hope. The struggle is evangelical, since the vocation and following that Jesus preached include uncertainty. In the past we created a world where we conquered the future by avoid-ing it, by being static. We must not be afraid of uncer-tainty or risk and even danger in evaluating and living life. Political philospophy tells us that there are two ques-tions in the renewal of political structure: (1) What is your model of person? What kind of people are you deal-ing with? (2) In the light of what is best suited for these persons, who decides and governs? In considering our political structures, have we overlooked the first question? In regard to the second, decision and consul-tation should penetrate into the community as far as they can. This is a principle not only of politics but of a Christian theology of virtue. Today, we do not really have conflict within the de-velopment of representation and pluralism in govern-ment; we have a conflict as to whether pluralism and collegiality should be allowed to exist at all. This con-flict is disastrous, for new forms of realizing authority in religious community can be combated in America only at the price of a Pyrrhic victory, the decline of religious life. How are mature American religious to come to realize that representation and political discussion about the leadership and direction of the order is not evil. The Acts of the Apostles record discussion among the Apostles. For an American, not to question, noi to engage in the realm of political life is to be immature. We must not allow the leaders of men and women religious (who are not on the same theological plane as bishops) to become persons who mix the sacred with the secular like kings of divine right. Some attempt must be made to open more lines of communication, to broaden the base of author-ity, to give the greatest possible representation, to recognize the responsibility of local communities for their lives, to allow for pluralism and even dissent--all within the context of religious obedience to those in of-rice. How this is to be done without weakening authority is a challenging but far from insuperable question. To ~nany [rom other cultures, the entire view may seem bizarre or even dangerous. However, it is a legitimate possibility within ecclesial religious life, and it is the normal and traditional political mentality of Americans. Actually, obedience will grow where love has primacy; zeal will become more intense where consultation (with or without final agreement) has made it feel worthwhile. While commitment to Christian community-apostolate is destroyed by depersonalization and autocracy, it is increased through openness and honesty. Community and Commitment VOLUME 28, 1969 55! ANTHONY D. HECKER, S.J. Attitudes, Unity, and Renewal ÷ ÷ ÷ Anthony Hecker, s.J., writes fa'om Coleran House; 19 Linnaean Street in Cambridge, Massa-chusetts 02138. ' REVIEW FOR RELIGIOUS In this age of renewal, both in the Church and in re-ligious orders, I would like to present for your considera-tion my reflections on those factors which could inhibit renewal. I refer to the need of greater communication between the so-called "New Breed" and the consequently so-called "Old Breed." I personally would prefer to ignore all such labels not only because of the divisions which they hint at but also because of the divisive-ness which they foster. I would like to do an in-depth study of the problems which I have observed both in my own order and in other orders with which I have come into some contact. However, because of various and sundry limitations, I must acknowledge that the following is neither a total study nor an in-depth study; rather it is simply my past and present reflections con-cerning these problems, about which 1 have a genuine concern. I present these reflections to you because I think that any attempt toward renewal will become operation-ally successful only insofar as there is unity among the members of the renewing order. At present I think that there is at least some lack of unity and that the source of that lack of unity is in our attitudes toward one another. It could easily be the case that my portrayal of these attitudinal difficulties is at least excessive, at most er-roneous. Nevertheless, by presenting these reflections to you, I hope at least to foster some reflection concerning unity and ways in which it might be improved. First, I would explain that, although I am relatively "young" and am a scholastic, I do not intend to castigate merely the "old" religious. (Indeed, I would hope that nothing that I say is construed, or misconstrued, as castigation of any person or group of persons.) The problems of communication cannot be facilely attributed to any one person or group of persons; we are all re-sponsible to a greater or lesser extent. Second, I would note that the basic problem of communication has its foundation in attitudes--attitudes toward the non-peer groups, especially those attitudes which are founded on implicit, and, hopefully, not recognized, presuppositions concerning the non-peer groups. I also want to state the several presuppositions which will be implicit throughout the rest of this discussion. First, we should not confuse unity with uniformity. For example, the excessive concern with mode of dress (ex-cessive because the concern exceeds that warranted by the subject matter) is more a question of uniformity than unity. External symbols do not foster unity; they can at best point to a unity which may or may not exist. A corollary principle, which I hesitate to state because of the apparent note of castigation contained therein, is that common life does not mean reducing everything to the lowest common denominator. I would willingly and forcefully declare that common life is necessary for unity. When, however, common life is proclaimed as a principle of uniformity, as well as of unity, then not only are the unifying aspects pushed below the horizon but also any further use of common life as a principle of action and decision is viewed by the subject with suspicion and dis-trust, rightly or wrongly. A second presupposition of this discussion is that dif-ferent attitudes or manners of acting should not be so facilely assigned a value parameter. That is, when some-one's attitudes or actions are even radically different from our own, we should not assume that they are wrong; much less should we arbitrarily impute base motives to them. For example, is it not more probable that certain priests and religious prefer not to perform "folk" or "liberal" liturgies because they think that they cannot find God so easily or so fully in such liturgies because of the "distrac-tions" inherent in such liturgies, than it is that their preferences are because they are "old fogies" or "die-hard conservatives"? Conversely, is it not more probable that certain priests and religious prefer to perform "folk" or "liberal" liturgies because they think that they can find God more easily and more fully in such liturgies because those "distractions" actually aid them in lifting themselves up to God, than it is that their preferences are because they are "always seeking new and exciting things"? A preference for uniformity would demand that one or the other view prevail. A preference for unity would allow the recognition that unity is not opposed to diversity. An all-pervasive value orientation would de-mand that one or the other view be declared good or better, and that the other be declared bad or worse. A view that would recognize the worth of a value orienta-tion but would also realize that it is not universally ÷ ÷ ÷ ~/OLLIME 2$, 19~9 A. D. Hecke~;$.]. REVIEW FOR RELIGIOUS 554~ applicable would allow the recognition that several different, views can prevail simultaneously. There are many ways of approaching God, even within one (Jesuit) general framework. The primary concern of this discussion, then, is to con-sider attitudes of religious toward other religious. I would begin by stating, even categorically, that dogmatism among "liberals" is at least an implicit denial of the very essence of liberalism. A liberal, if he is a true liberal, must accept the conservative on his own--the conserva-tive's- terms; a liberalism that excludes anyone because they have a different viewpoint is, at best, a caricature of liberalism. How then, can liberals castigate conservatives because they are not liberals? Should the true liberal have, and manifest, a desire to proselytize everyone everywhere, to malte everyone liberals whether they want to be or not? To all these questions I must answer, No. Lest my answer be interpreted as a non-liberal attitude toward those "liberals," I would state that my answer is based upon my own reflections concerning what a liberal is. Accordingly, I would ask those "liberals" to help me to understand their view of liberalism and how that view is compatible with their attitudes. On the other hand, I would state, even categorically, that dogmatism among "conservatives" or "traditional-ists" is at least an implicit denial of the very essence of tradition. Dogmatism here leads to fossilization of tradi-tion. Can the true conservative deny that there is any development in our understanding of God and of our relation to Him, indeed that development is inspired by the Spirit? Can the true conservative deny that there are a variety of ways of approaching God, that God can be "all things to all men"? (Would they really limit God in this way?) If they do not allow for the continuous workings o[ the Spirit, are they not left with merely the dead letter of the past? Indeed, is not this continuous and varied working of the Spirit a presupposition of Ignatius in the Spiritual Exercises (Annotations 4, 15, 18), and is it not probable that Ignatius intended these as principles of Christian living as well as principles to be used in the Spiritual Exercises? Can the true conserv-ative demand uniformity of thought--that we all think alike--rather than unity of thought--that we agree on certain common goals and then proceed in our various ways to foster attainment of those goals? Would it be possible for the conservative, and the liberal as well, to accept the distinction between "accepting a view" and "agreeing with a view" (accepting a view as valid despite the fact that it is not a view he can personally agree with)? A second attitude that I would consider is the emo- tional generalizati.on of a response to a particular aspect of another person. This attitude appears to predominate among the younger religious, perhaps only because of my greater contact with them; it might be just as prevalent among older religious. What I mean by this attitudinal problem is that, at least occasionally, a person will ob-serve a limitation in another person (real or imagined) and then proceed to generalize--the person can do noth-ing right. The particular observation becomes generalized into an attack on the person of the person. For example, a student may discover that a particular facultymember has a character fault let us say pride. Rather rapidly the student will become convinced that that person is a poor teacher and/or advisor. I will grant that I have ob-served few religious with this problem, but unfortunately some of these few are quite vociferous. Even were their judgments true, I think it an extreme lapse of charity to commit such character assassination. Unfortunately, also, too many younger religious are not critical enough in evaluating these unsolicited reports. They might hear from a vociferous few that a teacher cannot teach and readily accept it as fact, without even experiencing the teacherl Finally on this problem, too many religious, young and old alike, engage all too frequently in destructive criti-cism. It seems, at times, to be almost a preoccupation, occasionally even descending to a type of "Can you top this?" session. Needless to say, all these manifestations of the same general attitude are destructive of unity, all the more pernicious because it results in a gradual and insidious erosion of unity, unnoticed and unreflected upon. Can we not accept the limitations of each other without bandying them all about? If we must talk about the limitations of another, let us in all charity and honesty talk about them with the person most concerned--the person with the limitation. Let us build one another up in charity rather than tearing one another down, and thus destroying the very fabric of our various orders. The third and final attitudinal area I would concern myself with is that of suspicion and distrust--not al-together unrelated to destructive criticism. What I mean by this is the tendency of too many of us to presume the worst of each other and, accordingly, to impute poor motives. This attitude is, I think, founded on at least two; more fundamental problems: lack of understanding and lack of faith in the good will of others--two problems which closely interact upon each other. Lack of understanding appears to know no boundaries. It is prevalent between younger and older religious, between subjects--regardless of age--and superiors. That ÷ ÷ ÷ ÷ ÷ A. D. Hecker, $.1. REVIEW FOR RELIGIOUS between subjects and superiors seems to be more heavily influenced by a lack of faith; it will be treated in its proper place. Conversely, the lack of understanding between younger and older religious seems to be prior to, and causative of, the lack of faith. This lack of under-standing is, I think, intimately linked with the problem of unity. Unity is not that sort of thing which can be readily and simply assumed as existing between a group of men or women with common goals; nor can it be fostered and maintained by a total reliance upon sym-bolic acts and customs. Unity is something that has to be worked at in a real way by all the members of a group. Unity demands that all in the group understand one another; and to understand one another requires both work and patience. The urgent, and apparently natural, impulse to be understood seems to force us to give a primacy to this aspect of our interpersonal rela-tions. I wonder if this is not a false assigning of priorities. Could it not be that in order to be understood we must first understand others? Could it not be that in order to express ourselves in a manner that others can under-stand, in order to express ourselves in the thought pat-terns of the others, we must first understand the others? Of course it should also be realized that to simply understand the thoughts or expressions of others does not suffice. This is merely a token or surface understand-ing. To properly understand other persons, at least an attempt must be made to understand the social, emo-tional, psychological, and philosophical tensions and views that influenced those persons during their forma-tive years. For example, do younger religious under-stand, and realize the consequences of, the circumstances in which their elders grew up? (There is the fact that absolutism was not only prevalent in theology but that it also permeated all aspects of life and thought-- Einstein and such thinkers were not public knowledge, and thus not influential on public patterns of thought, until the forties; the social sciences were not influential until the mid-fifties; apologetics was a major concern throughout the entire course of. studies. Now when apologetics is given such an all-pervasive primacy, should it be surprising that the critical faculty 'is highly devel-oped, and that there should be a great concern to preserve and protect all aspects of the Catholic faith--incidentals as well as essentials?) On the other hand, do the older religious understand, and realize the consequences of, the circumstances in which the younger religious grew up? (There is the fact that Einstein's theory was public knowledge, and thus permeated all aspects of life and thought; the social sciences Were in full flowei', and thus the greater concern about freedom and interpersonal relations; Teilhard de Chardin was influential in shaping a new worldview-- readily taught to and accepted, perhaps uncritically, by the younger men.) I do not not mean to imply by all this that the new is better than the old, nor that the old is better than the new. Rather I am attempting to point out the fact that there are in any of the orders today two--at least two--- quite different ways of viewing the world, views that underlie and permeate all aspects of life of the various persons. I reiterate, neither is better, they are just simply different. Accordingly, to understand any thought, view, or opinion of another person, that thought, view, or opinion must be understood in the context of that per-son's way of viewing the world. Of course, there will be the few, with either worldview, who are incapable of understanding the other worldview of the other person; but this does in no way imply that Christian charity is no longer needed. Because we do not understand the other person's point of view, we should not assume that he is wrong, or foolish, or operating with ill will; neither should we ridicule or antagonize him. We should ap-proach those few, then, with the realization that a greater demand may be made upon our charity--they may ridicule or antagonize us but we need not respond in kind--and with a determination that we shall improve our relations with them. These last remarks lead us to a consideration of the lack of faith in the good will of the other person. There seems to be this lack of trust between old and young; but, more importantly, there seems to be some mutual lack of trust between superiors and subjects. Certainly the latter, but I think also the former, implies a limitation in our practical spirituality. What I mean by this is that, while supernatural faith is directed primarily to God, in that very fact it should also be directed toward men. Faith in God includes faith in God's loving kindness and grace-full influence upon men, especially upon men who have committed themselves totally to God. Accordingly, to say that one has faith in God and yet to manifest a radical lack of faith in men totally committed to God involves one, to some extent, in a contradiction. To point out what I have referred to as a limitation in our practical spirituality I would use, by way of ex-ample, our attitude toward what the Jesuits refer to as the "plus-sign." We seem today to disdain the term "plus-sign" and all that it connotes. On those rare occurrences when we do use it we manifest what we think that it means. Too often we apparently mean that we have al-ready judged the other person, thus fostering a negative image of him in ourselves, but that we will give him the ÷ ÷ ÷ Renewal VOLUME 2~ 1969 557 benefit of the doubt and not report him. I submit that the "plus-sign" does not connote this negative attitude but rather one that is quite positive. It is not an act which follows upon judgment but is an act which pre-cedes judgment. It is a humble admission of the fact that too little is known of the other person, especially of his degree of deliberation, to judge him on the basis of a solitary act. It is the suspension of judgment as opposed to rash judgment. I would suggest that this might be what Ignatius was referring to in the Praesupponendum to the Spiritual Exercises. I would also reiterate that it is doubt-ful that Ignatius wrote this to be used solely in the con-text of the Exercises; rather it was intended also as a principle of Christian living. In the light of all this, when we disagree with someone in principle, or concerning policy, should we seek out negative reasons for his position, especially if we do not understand his point of view or frame of reference? When we disagree with superiors in principle, or con-cerning policy, and realize that we cannot effect a change, would it not be more healthy and mature to seek out their reasons for maintaining the present system even while we continue to represent our views? Of course another requirement of our interpersonal relations is patience. Even if superiors were to agree that some changes might be beneficial, time would often be re-quired before they could be effected. Conversely, if changes are effected, how can we be so sure that they are failures after only three or four months of operation, especially if we have had little contact with that area? I would close as I began: emphasizing that these are some of my reflections concerning unity, at least limited, possibly erroneous. It was my intention, and is my hope, that these reflections might be a means of stimulating reflections on the problems of unity and ways in which the present degree of unity might be improved. A. D. Hecker, S.]. REVIEW FOR RELIGIOUS 558 EDWARD R. TRUBAC Long-term Financial Planning for Religious Communities Faced* with scarce resources generated by a growing number of apostolates combined with a declining number of vocations, religious communities have increasingly turned to planning in order to allocate these resources in the best way possible. However, present planning has gen-erally been of a short-term nature principally designed to meet the rather immediate needs of the religious com-munity. Many decisions have been made without a clear notion of their long-run financial implications and with-out a careful analysis of alternative proposals. In my talk I would like to begin by discussing some basic principles of planning, then apply these principles to the long-range needs of religious communities, and conclude by tracing some of the financial implications of planning decisions, Basic Principles of Planning In referring to long-range planning, I am not talking about an informal annual get-together in which adminis-trators meet to give their opinions about the course of the future. Neither am I referring to the kind of planning which is initiated because of some kind of crisis, such as a sharp decline in profits for a firm or a sudden increase in instructional expenses for a school. This kind of plan-ning is really not planning at all; in fact, it ilIustrates the costs associated with a lack of planning in which options to act and shape events are restricted as one is forced to react and adapt to a given situation. Long-range planning is a formal, organized process in which a person or group of persons is 'specifically * This is the text of a talk given on February 26, 1969, at the Conference for Religious in Financial Management held at the University of Notre Dame. ÷ ÷ Edward R. Tru-bac is assistant pro-lessor of finance; University of Notre Dame; Notre Dame, Indiana 46556. VOLUME 2~ 1969 charged with developing a plan of what the organization should look like in five or ten years; the basic purpose of the plan is to mobilize the available resources of the or-ganization in a way that will best achieve its objectives: Firms which have adopted formal plans often seek new ventures through mergers, acquisitions, product line diversifi-cation, or market expansion. They are not satisfied with main-taining the status quo unless they determine, after careful analysis, that this is the best possible course of action. And, in some instances, a company can improve its performance significantly by planning ways to increase the efficiency of cun-ent operations, rather than following the more glamorous but more risky diversification route? To repeat, long-range or strategic planning, to use the more popular term, is essentially concerned with the eval-uation of alternative courses of action (with the stress on the word alternative) in an effort to select the best course of action for the future. And by best course of action, I mean the one that best meets the objectives of the organi-zation. ÷ ÷ ÷ Edward R. Trubac Planning Principles and the Long-Term Needs of Religious Communities This approach is obviously applicable to religious communities as well as to business firms. Like firms, re-ligious communities have in the past few yeais become more actively engaged both in "product line diversifica-tion" and efforts designed to improve the efficiency of current operations. For example, some alternatives that might be grouped within a long-term planning framework for a typical religious community would be: (a) Should the community continue to own and op-erate small hospitals, should only large ones be consid-ered, or should the community relinquish ownership ~ind merely staff hospitals and homes? (b) Is it advisable to continue the two-year college in its present form on the motherhouse campus or should it be discontinued and a house of formation set up near a university campus? (c) Should the community continue in elementary edu-cation, should expansion in secondary schools be consid-ered, or should sisters accept teaching positions in secular institutions? (d) Should a religious community operate only in schools andhospitals, or should many of the members be actively engaged in some of the various types of social work that are open to today's sister? A correct though obviously superficial answer to the REV1EW FOR RELIGIOUS x Harold W. Henry, "Formal Long-range Planning and Corpora-tion Performance," Michigan Business Review, November, 1968, 560 p. above questions would be to do what you think is best. But what is best is again dependent on your objectives. And while you may start with general goals, acceptable guidelines for decision-making must be phrased in con-crete and measurable terms. Here business firms have a decided advantage over non-profit organizations. For while a firm may have as its general objective the opera-tion of a diversified, growing, and profitable worldwide manufacturing business, its specific objective will prob-ably be couched in terms of a specified rate of return on investment; the evidence of the firm's success in meeting this goal can easily be gleaned from its financial report. For the typical religious community, the honor and glory of God and the sanctification of its members would adequately reflect its general objectives, these goals to be specifically achieved through the external works of char-ity of caring for the sick, social work, and the education and training of youth. But while the subobjectives of business firms (for example, a specified rate of return on investment) lend themselves to rather precise measure-ment and, therefore, evaluation, those of religious com-munities do not. First, it is difficult to identify measurable goals in health care, social work, and education, particu-larly Catholic education. And if you cannot specify your objectives in measurable terms, how can you accurately evaluate your operations? This is a problem that most non-profit institutions have in common. Moreover, even if you could express the objectives of each apostolate in meas-urable terms, there would still be the problem of com-paring different units of measurement; in other words, a firm can estimate the expected contribution of each new venture or product in terms of a common denominator-- profit. But how does a religious community, trying to maximize the benefits from its various activities, compare the gains from medical care with the gains from educa-tion when these benefits are expressed in different units of measurement? Finally, religious congregations are faced with the unique problem of structuring a community life that will maximize spiritual development as they al-locate their resources to their various works. Measurable Guidelines for Allocating Resources to the Various Apostolates Because of the difficulties in defining measurable units of output, value judgments will necessarily play a large role in the choice of community works. However, I do think there are some objective guidelines that should not be ignored. First, religious communities are constrained in selecting apostolic works by the specialized nature of their resources, both people and buildings. While people probably constitute the chief constraint, I am familiar ÷ ÷ Financial Planning VOLUME 213, 1969 REVIEW FOR RELIGIOUS with several cases o~ communities who have experienced difficulties in changing the pattern of their activities be-cause of the problems involved in liquidating their in-vestment in buildings and equipment. Now when I use the term constraint in referring to people, I do not mean to use it in a negative sense. If members of a religious community are competent in and motivated toward, for example, the medical care field, then the community should be in that area (one of the first steps in the planning process should be an inventory of talents and attitudes for the various works). Each apostolate can easily be broken down into several sub-apostolates that are in urgent need of competent and highly motivated people. To take the medical care apos-tolate as an example: (a) Religious communities strong in administrative personnel will continue the traditional pattern of ownership and manage-ment. (h) Some will wish to retain ownership and policy making responsibility but will be unwilling to pr.epare religious for administration. They will utilize religious m direct service to patients and in purely spiritual roles and will be obliged to place administration in the hands of seculars. (c) Others may give only direct care while still others, de-pending on their preferences and training, may engage in home nursing, care for the aged or programs for retarded and handicapped people.* Financial Considerations in the Planning Process Financial considerations must also play a roIe in plan-ning the optimal mix of activities. I would like to see religious communities, in formulating their long-term plans, estimate their expected net financial return on in-vestment in each of the apostolates under consideration; that is, they should calculate the financial costs and bene-fits of each apostolate. I am certainly not suggesting that if a community never expects to cover its expenses from a particular activity that it should drop that work. What I am saying is that it would be very useful to identify the apostolates that are expected to operate at financial losses over the next five to ten years. Because if projections show that certain activities will not generate sufficient income to meet expenses, then a decision to subsidize that apos-tolate will have to be made in the light of projected total financial resources, including income on investments, con-tributions, debt financing, surplus generating apostolates or a combination of all these approaches. I should like to digress for a moment and mention that while the expansion or contraction of investments in the various apostolates should not hinge merely on their ex- ~John J. Flanagan, S.J., "What I~ the Catholic Hospital Apos-tolate?" Hospital Progress, March, 1966, pp. 50-1. pected financial returns, there are other investments, those which are not directly involved in attaining the objec-tives of the order, where financial factors should domi-nate. Here I am including not only financial assets such as stocks and bonds but also such assets as the farm owned by many religious congregations. Apart from special con-siderations, such as the community's sensitivity to charges of its being land rich, the farm should be evaluated solely on the basis of its expected financial rate of return. The evaluation technique would basically first involve deter-mining the current investment in the farm in terms of equipment and building values plus the current market value of the land. One would estimate the net dollar re-turn on the farm for the next five or ten years including as your return both estimated net income from the farm and expected appreciation bf land values. An expected rate of return should then be secured by discounting these future dollar returns to the present; this rate would be compared to the return on alternative investment op-portunities. If the expected rate of return on the farm is less than 5%, the existing rate on time deposits, then one would be well advised on that basis to dispose of the farm. Determining the Costs of Apostolates In calculating the expected net financial return from each apostolate, the first step would be to examine cost experiences in the recent past as a basis for future cost projections; data for the past three to five years should be sufficient for this exercise, although it should be stressed that the usefulness of past data for projection purposes is inversely related to the degree of change experienced by the community in the recent past. Securing this infor-mation may well present some problems since the stand-ard chart of accounts used by many religious communi-ties is not structured around the various apostolates. There are usually separate accounts for the generalate, provincialate, and local houses; in addition, expenses are usually categorize.d along input (salaries, travel expenses, supplies, and so forth) and institutional (junior .college on the motherhouse campus) lines rather than focusing on the various outputs (medical care, educational work, social work) of the community. The junior college prob-ably serves more than one apostolate and these educa-tional costs should be allocated to the various works of + the community. In the same vein, the category travel ex- + penses will also include costs associated with a variety of ~" apostolates. In addition, an attempt should be made, where possible, to allocate administrative expenses among .1~i.na~.ia't P!anning the different works of the community. I am not advocat-ing a wholesale overhaul of the accounting systems, of VOLUME aa, ~96~, religious communities. I am merely suggesting a supple- 563 REV]EW FOR RELIGIOUS mental technique designed specifically for long-term plan-ning purposes that will facilitate the cost projections for each of the various apostolates. In ferreting out all costs, the focus should primarily be on the educational, administrative, maintenance, and re-tirement costs associated with placing and sustaining peo-ple in the various apostolates; per capita expenses in each of these categories for each of the apostolates should be derived, summed, and projected into the future; this re-suiting figure should then be multiplied by the estimated number of people in each of the community's activities in order to secure a total estimated cost figure for each apos-tolate. Capital expenditures on building and equipment directly associated with the works of the community (par-ticularly hospitals and colleges as a result of the contin-uing trend toward separate ificorporation and ownership) should ordinarily not be treated as an expense to the com-munity although there are certainly numerous cases where, for example, debt service requirements generated by building programs could not be met by the school or hospital and constituted a severe financial drain on the religious community. One of the great advantages of identifying costs, for ex-ample, the costs of educating sisters, is that it permits one to price and compare alternative approaches to supply-ing the same or approximately the same type of educa-tion. Although I will readily admit that considerations other than financial are extremely important and even overriding in certain situations, still the right kind of fi-nancial information will at least permit a comparison of the costs of sending a person to be educated at the junior college for sisters on the motherhouse campus with the cost of education at a university. The question of which costs less will require careful analysis but the cost differ-ential will probably not be as great as might be deter-mined from examining the accounting records of many religious communities; that is, the cost may not be ap-preciably less to send a person to junior college and may, in fact, be more expensive. One of the hidden costs I am alluding to is the failure of many religious communities to fully account for the contributed services of the mem-bers of the order who are teaching in these colleges. By contributed services, I mean in this case the salary that a member of the religious community could have earned teaching at a university minus her maintenance costs at the motherhouse that are met by the community. For ex-ample, if the subsistence needs of a religious teaching at a junior college for sisters are valued at $2,000 a year while she could have earned $10,000 annually teaching at a university, then the contributed services would total $8,000. A recent survey by one of the graduates of our program in institutional administration indicated that only 50% of the junior colleges surveyed included con-tributed services in their budget as an expense to be met by the community. This omission gives a very distorted picture of the true costs of operating junior colleges. A less hidden but perhaps more controversial cost is that of depreciation. The traditional argument against non-profit institutions depreciating their capital assets is that the needed funds are not generated from operating income as with a business firm, but are commonly ob-tained through fund-raising campaigns. I feel, however, that all costs should be identified, regardless of how they are met. Moreover, communities may find donations to be a very undependable source of funds in the future. As a further point, most hospitals depreciate their capital as-sets. This policy on the part of hospitals of accounting for depreciation has been given added stimulus by third party payments which explicitly recognize depreciation as a reimbursable cost (for example, Medicare). As these third party payments become more widespread in the area of education, accounting for depreciation expenses will correspondingly grow in popularity. Again, it should be emphasized that identifying the education costs of sisters prods administrators to trace out alternative cost patterns. Another possibility, for ex-ample, is the growing practice of affiliate membership in which the person finances her own college education if at all possible, but maintains regular contacts with the con-gregation. This policy, of course, would be the least ex-pensive (it would also meet the problem of people leav-ing the community after being educated but before earning any return for the community); but the issue of the impact on vocations would certainly have to be care-fully explored. A similar analysis should be applied to maintenance, administrative, and retirement costs. Past cost data allo-cated among the various apostolates should be secured as a basis for projecting total costs in the future. The pro-jected cost of current procedures should then be com-pared with cost projections of alternative ways of meeting these needs. Projecting Net Financial Returns from Each of the Apostolates After the cost information has been properly processed, the last step in this exercise would require the projection of net financial returns for each of the various apostolates. These financial returns vary widely, depending on the particular activity. It should come as no surprise that the financial returns to religious communities are particu-larly meager from the Catholic secondary and elementary ÷ ÷ + Finandal Planning VOLUME 28, 1969 REVIEI/V FOR RELIGIOUS school apostolates. For religious teaching in colleges and universities and especially for those working in the medi-cal care area where contributed services are considered as reimbursable costs, the financial returns are competitive with those received by lay people with similar qualifica-tions and experience. But the salary and fringe benefits received by the typical sister teaching in a Catholic ele-mentary school (and this is irrespective of whether the school is community or diocesan owned) falls far short of even meeting the expenses incurred by the community in placing the sister in that position. The most detailed in-formation concerning this issue has been derived from Father Ernest Bartell's study on the financing of Catholic education. The data go back to 1963-64, but they serve their illustrative purpose. They show that the per capita contributed services of religious teaching in two dioceses averaged $5425 in one diocese and $3572 in the other.3 Contributed services are specifically defined as the salary that could have been earned by the religious teaching in the public school minus all recorded parish expenditures on behalf of the religious teachers, including cash sal-aries, gifts, and convent maintenance. In addition, a rental charge imputed on the parish investment in con-vent living facilities should be deducted; this charge would be equivalent to the earnings foregone by the parish on a comparable commercial investment. In his study Father Bartell also estimated that if one religious order teaching in one of the dioceses were just to break even and recoup its educational and retirement investment in its members, then it would have had to re-ceive $1057 yearly from each of its teachers over an aver-age working life of 40 years, even assuming that these payments could be invested at 5% during the lifetime of the religious teacher.4 Since the members of this order annually remitted, after current expenses, only $360 each back to the motherhouse, the $700 difference might be looked upon as a subsidy paid by the religious commu-nity to the diocese. Now, I am not going to strongly argue for or against this particular subsidy although I do believe that alter-native ways of reducing it should be carefully examined. One way might be to negotiate with diocesan authorities for salary increases. Another possible approach might be state aid where the contributed services of the sister would perhaps be recognized as a reimbursable cost, as in the medical care field. Or the community might simply 8 Ernest J. Bartell, C.S.C., "Efficiency, Equity and the Economics of Catholic Schools," Catholic Education Today and Tomorrow: Proceedings of the Washington Symposium on Catholic Education, 1968, pp. 12-3. *Ibid., p. decide that its estimated total financial resources will be sufficient to subsidize this apostolate. Conclusion In conclusion, I would like to see a statement along the following hypothetical lines included in the formal plan of each religious community. In deciding on the op-timum amount of resources to be devoted to apostolate A, B, C, and D, we have considered alternative ways of meeting the expenses associated with each activity and have chosen the best alternative for each. Next, in esti-mating the net financial benefits [or each of the aposto-lates over the next five to ten years, we project that activ-ity A will run a large deficit. But despite this expected deficit, we wish to keep our commitment to this aposto-late and estimate that apostolates B, C, and D will gener-ate a surplus of a sufficient size which when combined with income on investments and expected donations will meet the deficit in A. I strongly feel that this type of approach will add a more realistic dimension to community planning. Finandal Planning VOLUME 28, 1969 567 LOUIS TOMAINO Religious Community and the Johari W ndow ÷ ÷ Louis Tomaino is the associate di-rector of Worden School of Social Service; Our Lady of the Lake Col-lege; San Antonio, Texas 78207. REVIEW FOR RELIGIOUS 568 The building of effective human community is gen-erally regarded as one of the most critical issues facing religious orders now and in the near future. Such community spirit is essentially a group phenomenon and it may be that certain findings in group dynamics are very relevant to religious communities. In this paper we are concerned mainly with communities of women. In evaluating the kinds of relationships present in human community, a conceptual model designed by Joe Luft and Harry Ingham for use in the National Train-ing Laboratories seems particularly helpful. It is called the Johari Window.1 This model, although not prepared specifically for religious, states that the sister by her actions and words in the community, projects a kind of "window" of herself which is viewed by others. Other members of the community likewise project similar windows and the sum total of these projections is a powerful dynamic which fashions group relationships in that community. The Johari Window represents four kinds of informa-tion which governs the flow of relationships among community members involved. This includes: A. Things the sister knows about herself and the community and about her feelings about others. B. Things the sister does not know about herself and the community and about her relationships with others. C. Things others in the community know about the sister and the community. D. Things others do not know about sister and the community and about the relationships therein. By "things" we mean sisters' thoughts, impulses, desires, fears, fantasies, prejudices, hopes, dreams and goals. Thus, sister's Johari might look like this: a Joseph Luft, "Johari's Window," Human Relations Training News, v. 5 (1961), p. 6. Things known by others Things unknown by others Things known by sister THE ARENA (open area of the re-lationship) THE FACADE (are~ of hidden de-fenses) Things unknown by sister THE BLIND SPOT (realities not recog-nized) THE UNKNOWN (unexplored reali-ties) 1. The Arena--This is that part of the relationship which is open: ". the cards are on the table." This refers to that part of sister that is completely honest because she faces community issues in the open. When group issues or problems are known and faced by all members openly, we say that these things are in the arena. 2. The Blind Spot This area comprises those thoughts, feelings, and so forth which sister has, but of which she is not aware. However, others in the com-munity do see these things in her because her actions and words make them visible. For example, the sister with definite authoritarian leanings may not recognize this tendency in her interactions with others, but others see itl 3. The Facade--This area consists of feelings, moti-vations, and so forth which sister has, but keeps hidden for whatever reason, oftentimes because she may con-sider their revelation as inappropriate. Therefore, while she knows these things about herself, other community members are not able to perceive them. 4. The Unknown--This includes those aspects of sister's group relations which are unexplored, latent, unconscious, and simply not known. The goal in building community is to make the Arena as large as possible so that conditions for com-munication are improved through openness, free inter-change and productive action. Everything we have said so far about sister can truly be said about community. Realistically, the obstacles to developing real com-munity cannot be dealt with until they are known. These hurdles cannot even be accurately identified until sister and the community develop an open arena where issues can be placed. Therefore, how does one go about establishing a large arena? Let's consider two processes termed exposure and feedback and how they may be utilized to alter sister's Johari. If she really opens up with other sisters, if she + lohari Win¢lo~ is not too insecure to discuss her own doubts and questions, sister will be revealing something of her-self. This is exposure. She will humanize herself by demonstrating that she too is subject to many of the hazards faced by others. Whitaker2 refers to four kinds of openness. Verbal openness, or the process of using direct words to express to another exactly what we mean. ,4ffective openness or the sharing with others our personal experience of boredom, depression, anger, warmth, fantasy, and physical contact. Physiologic open-ness as shown through expressing a blush, hunger, or a headache. No purpose openness is the occasional idle hour, the no-point-in-it encounter, where people are "just there" with no visible goals in mind. To do this comfortably requires real open-endedness. In performing these kinds of things the sister shows part of herself and neutralizes some of her facade. The horizontal line of the Johari is moved downward, thereby enlarging the arena, eliminating some facade and mak-ing the unknown area smaller. Feedback means simply a way of securing some knowl-edge about ourselves as individuals and as community members. It is indispensable to establishing lines of communication and to changing ourselves. This idea urges that the sister create opportunities whereby others may give her feedback on herself. This feedback might tell her things about herself which she did not previously know and thereby elimi-nate some blind spot. The perpendicular line of the Johari" is moved laterally which makes the arena larger, the blind spot smaller, and the unknown is further diminished. If the Sister desires and secures both feedback and exposure, her Johari would look like this: Feedback REVIEW'FOR RELIGIOUS ~ Carl Whitaker, M.D., "Open Communication from the Psycho. therapist," Existential Psychiatry, Spring, 1966, pp. 55-8. The large arena suggests that something is really happening in the life of this sister. Blind spots (I didn't realize you thought I didn't like you) are clarified. The unknown is decreased (I'm glad we both know how we feel on this point), and energies previously used to maintain facades are now diverted to more constructive purposes. The possibilities for communica-tion and change are vastly enhanced with things now put into the arena where they can be managed. We are suggesting, in effect, that those religious groups characterized by large arenas have created conditions favorable to building effective community. The sum of individual Johari's in the group tends to promote a general or average Johari for the whole community. The larger the arena, the greater the chance for ef-fective community. The question might indeed he raised: Of what value to community life are blind spots, facades, or unknowns? Some other, and extreme, windows sometimes seen in both individuals and communities are as follows: The large unknown tells that this sister desires neither feedback nor exposure. She is strictly official and operates by "the rule." Other sis-ters never get to know her. In this situation the sister is willing to expose, hence the small facade. She tolerates no feedback from others in the community and thereby does not know what others think of her. This sister constantly seeks feed-back from others but is not willing to put herself "on the line" with others. Hence the large facade. Too much facade breeds conditions for mistrust. Needless to say, the climates generated by such win-dows are not conducive to developing the kinds of + atmospheres associated with productive community life. + ÷ Some Findings about Sisters Jay Hall and Martha Williams developed a Personnel Relations Survey~ inventory of 60 items which, when s Jay Hall and Martha Williams, Personnel Relatio~ Survey, ~ohari Window VOLUME 28, 1969 571 taken by individuals, projects for them a personal Johari Window profile. Group profiles can also be averaged out on this test. In the past year this writer has administered the Johari Test to approximately 600 sisters from various congregations as part of Group Dynamics Workshops. Using a total sample of 500 sisters we are able to secure interesting data on the kinds of windows projected by sisters. Hall and Williams constructed their questionnaire in such a way that it yields a Johari for the respondent relative to his subordinates, to his colleagues, and to his superiors. It also illustrates an "average" Johari for each respondent. The generalizations about sisters which can be made from the 500 taking the test are these: 1. Sisters tend to be slightly more open than other groups tested in workshop (ex-school teachers, social workers, policemen). Given the goals and values of religious group life, however, the sisters do not appear to be significantly more open than other less cohesive groups. 2. Sisters tend to be less open with their superiors than with subordinates or colleagues. This may be a product more of unapproachable superiors than of reti-cent sisters. Sisters revealed greater facade with su-periors than with the other two groups. 3. Arenas were larger with colleagues than with the other two groups. 4. Sisters seem to be more concerned with feedback than with exposure which seems to be typical of most groups. Out of a possible high score of 50 the sisters tallied an average score of 35 for feedback and 29 for exposure. In summary the general relationship tendencies of the 500 sisters appeared as shown on following page. Looking at the type of window projected by sisters suggests information which may be helpful in develop-ing greater openness among sisters, hence more effective community. The survey shows that sisters tend to be less open with superiors than with the two other groups. How can openness be achieved in this area? Many modern theo-logians stress the fact that religious obedience can be thought of as a shared responsibility. The Holy Spirit speaks through the entire community and not only through the superior. It seems, therefore, the re-sponsibility of each individual sister to contribute to REVIEW FOR RELI$10U$ unpublished training inventory, Southwest Center for Law and the 572 Behavioral Sciences, University of Texas at Austin, 1965. E u r e 5 10 15 20 '25 30 35 45 50 5 Feedback ) 20 25 30 35 40 45 50 community development by sharing her ideas, sugges-tions, and other Johari "things" with others. If the spirit works through each person, how can the commu-nity know the will of God if each is not willing to share? In making decisions which affect the community each sister assumes a great responsibility. It has been found that decisions reached via consensus tend to be more accurate than individual or minority decisions. Consensual thinking in the community can be gained through open discussion, sharing, and listening on the part of each community member. Although arriving at such decisions in community meetings may be time consuming, their very importance suggests that the group might well afford the time involved. Creating an atmos-phere of openness requires conscious work over months or even years. Thus, we seem to be saying that human community can be nurtured by development of a large arena through the conscious use of both openness and feed-back. The documents of Vatican II, especially the Church in the Modern World, lend eloquent support to this idea as seen in the following statements: h¯f eT wheh epnr itmheit mivue lCtithuudrec hof. pbreohveivdeerds ,w aenr ee xoaf monpele h oefa rct oamndm ounneity mind, and found nourishment in the teaching of the gospel and in the sacred liturgy, especially the Eucharist. Let such a life continue in prayerfulness and a sharing of the same spirit. As Christ's members living fraternally together, let + ÷ lohari Window VOLUME 28, 1969 573 them excel one another in showing respect and let each carry the other's burdens. For thanks to God's love poured into hearts by the Holy Spirit, a religious community is a true fam-ily gathered together in the Lord's name and rejoicing in His presence . In fact, brotherly unity shows that Christ has come; and from it results great apostolic influence (Decree on the Appropriate Renewal o[ the Religious Li[e, n. 15). Thus it is evident to everyone that all the faithful of Christ of whatever rank or status are called to the fullness of the Christian life and to the perfection of charity. By this holi-ness a more human way of life is promoted even in this earthly society (Dogmatic Constitution on the Church, n. 40, par. 3). The People of God and the human race in whose midst it lives render service to each other. Thus the mission of the Church will show its religious, and by that very fact, its su-premely human character (The Church in the Modern World, n. 11). Let .chapters and councils faithfully acquit themselves of the govermng role given to them; each should express in its own way the fact that all members of the community have a share in the welfare of the whole community and a responsibility for it (Decree on the Appropriate Renewal of the Religious Life, n. 14). Christ arouses not only a desire for the age to come, but by that very fact, He animates, purifies and strengthens those noble longings too by which the human family strives to make its life more human (The Church in the Modern World, n. 38, par. 3). Through her individual members and her whole commu-nity, the Church believes she can contribute greatly toward making the family of man and its history, more human (The Church in Modern World, n. 40, par. 5). ÷ ÷ Louis Tomaino REVIEW FOR RELIGIOUS 574 JOSEPH F. ROCCASALVO, S.J. The Presence of Christ in Christian Community The presence of Christ in the Christian community is a fascinating topic, but one that is not easy to treat in a free and familiar style. This is so, because we face a difficult and important question: how can we adequately recognize this presence in our experience. In reading any answer, no matter how well formulated, we must avoid the mistake of expecting too much. The bodily Christ is hidden from our view. Unlike the Apostles who walked with Him in Jerusalem or stood close by when He preached from the waters of Galilee, His visible counte-nance cannot now be seen, touched, or handled. It is not that we feel He hides Himself capriciously; yet there are times when we are overwhelmed by our desire to see Him, without resorting to any writer's conception or artist's portrait. We are tempted to cry out: "Christ, come forthI Let Your loyal followers look upon You. Draw the screen that conceals Your presence from our hu-man eyes." But despite our pleas there is no physical ap-pearance, and we would not dare to hope for one. In addressing myself to the preceding difficulty, I shall formulate my answer through an indirect use of con-cepts. By this I mean that such concepts will try to illumine for the reader the experience they point to, without intending to adequate it entirely. Since we are dealing with the most personal dimension of Christianity, our faith or commitment to a Person, its ultimate signifi-cance must lie beyond the frontier of language in the do-main of mystery. Yet granting this radical incommuni-cability in the final analysis, one may use concepts as long as it is remembered that they are open to the term towards which they aspire. The reader, then, must be like one who contemplates an horizon. Beyond the outline of words he seeks perspectives which he can barely discern but which draw him precisely because of the mystery he + Joseph A. Roc-casalvo, s.J., is a member of Wood-stock College in Woodstock, Mary-land 21163. VOLUME 28, 1969 ÷ ÷ ÷ Joseph F. Roccasa~o, $.$. REVIEW FOR RELIGIOUS senses in them. The formulation is of value, not only for what it says, but also for what it may suggest. As a point of departure for this analysis, we must start with our experience. In assigning content to this word we take. it to mean the whole range o~ the self's active relationship with the other, or the entire range of reality as disclosed to me and to which I respond. But this is my experience: it is the real as disclosed to one who is a Christian, committed to the Church and the faith of the Church. Since faith is part of my experience, part of the real as disclosed to me, it must necessarily be a Christian experience, including all that the life of faith includes. Here it must be recalled that my faith is first and foremost a commitment to a Person who has invited me to share a life in which He Himself will be my ful-fillment. In other words, my faith is a total response of mind and heart to Christ who has entered my world and lived His li~e in our midst. What, then, is the purpose of a Christian who reflects upon his experience to which his faith is interior? Since my personal relationship with Christ is a lived conviction, an intimate part of the reality that discloses itself to me, I shall try in my reflection to spell out the implications of this total commitment. I undertake this task because I am compelled by my freedom to take a personal stand towards my life and to be fully responsible for that stand. I must use the reasoned reflection of the philo-sophical method to avoid doing this naively. In brief, I shall try to discern by analysis how my personal commit-ment to Christ makes Him present to me, not in terms of revelation or the magisterium of the Church, but as dis-closed in my lived experience. This reflection, then, will help make me a more responsible and responsive Chris-tian. As I have indicated, the faith which is interior to my lived experience is fundamentally a personal commit-ment of mind and heart to the Person of Clu-ist. He has spoken to me in time, using words which He has in-tended for all men. Included within these words is the promise of continued presence, in spite of visible ab-sence: "Where two or more are gathered in my name, I am in the midst"; or, "If anyone will love me. I will mani-fest myself to him." Still again He tells us: "I am with you all days, even to the consummation of the world." While I cannot expect that His presence will be manifest by some physical appearance, I may rightly expect, through trust in His personal promise, some kind of experimental awareness of His presence in and through the gathered Christian community. Our inquiry can be placed in the form of a thesis statement: whether or not there is a special presence of Christ, experienced within the Chris- tian community. If there is, how can it be described phenomenologically, and what are the requisites for this partictalar theophany? Our question can be restated more dynamically: when I experience my witness to this Person in communion with other Christians, how does He "draw nigh"? Is His presence a diffused, unthematized one, con-comitant with the consciousness of the Christian com-munity; and if this is so, how may it be thematized upon reflection? This analysis, of course, does not necessarily exclude His coming-to-presence in other ways. Before we can discover what is the special character of Christ's presence in the witnessing Christian community, we must first analyse the meaning of this rather elusive word. ~Nhat does it mean to have someone or something present? The dictionary tells us. that the word is used in at least two distinct senses: first, it can mean physical presence, namely, that which is or stands before one, in view or at hand; that which is spatially located in this place and not elsewhere. Second, the word may have a temporal significance, referring to contemporaneous pres-ence, or that which is not past or future, but is operative in the time that is now. It is precisely in these two senses of physical and contemporaneous presence that phe-nomenologists like Luijpen have described man's terres-trial life as an intentional existence in and towards the world through knowledge and love. Through knowledge the world is physically and con-temporaneously present to my consciousness as I am to it, for to know is simply to exist as present with the world. Therefore, it is through this co-presence of knowledge that the world begins to disclose itself and be for a man. ~,Vithin this disclosure the meaning of the world refers itself to other human presences, so that as I live I realize that the world presents itself, not merely for me, but for the other also. The world is present to us both, one we mutually encounter. My presence in the world is emi-nently co-presence. Gradually I begin to realize that the presence to me of persons is radically different from things. While the latter are unaware of me, in fact, are indifferent to my stature as a man, my presential awareness of persons tells me that they may take my presence uniquely into account, re-sponding warmly to my whole world of needs, concerns, and achievements. I have given the other access to myself in a way that is beyond the power of things. Of course, the responsiveness of the other to me is subject to degrees of encounter. For instance, I can meet someone with cordiality, shake hands with him, and sit down to dinner and conversation. On the other hand, I can speak to the same person on the telephone, or merely notice him on the opposite side of the street without speaking to him at The Pr,~ence o~ Christ 4, ÷ Joseph F. l~occo~a~vo, $.]. REVIEW FOR RELIGIOUS all. Our mutual presence to one another can remain on a distant, functional level, or it can open itself to more pro-found degrees of responsiveness. Through love my reply to the other's presence is a reply to his unique personhood. He has become for me a cen-ter of new meaning, so that whenever he comes within the range of my presence, I experience an appeal to con-sent to his, to accept it, to support and share it. He now becomes a presence which I cherish, someone who stands lovingly before me when he is visibly in view. Even when he is physically absent, his unique subjectivity grows into an atmosphere which encompasses me and abides, despite the most engrossing tasks. This is what is meant by being-loved. The other's loving presence makes my personal life be more fully and by his affection, aids and favors it. I no longer face the future as an isolated self-presence, and this alone is perhaps the most profound witness of love's contemporaneity: it has created a "we" that brings plenitude and happiness. Having seen from the preceding analysis how the per-son is present, to me through knowledge and love, we can now pass on to the next step in our analysis of Christ's communal presence. Since the Christian community is fundamentally made up of persons who confess a com-mitment to this Person as interior to their, experience, for the sake of ordered procedure we shall first describe the growth of the individual person's unique response to Christ, and then inquire what role the community played in its development. Someone may object, however, that description of such an affective relationship with Him is difficult, if not impossible, because as subject of my love, He does not come within the scope of the senses. This objection would be valid, were His visible presence abso-lutely necessary to sustain such a relationship. But as we shall see, bodily absence does not a priori exclude a personal confrontation with Him. Since "He was made in all things like unto man, sin alone excepted," or, in other words since He is wholly man, my loving commit-ment to Him will follow an interpersonal pattern. He will not let me doubt His intimate friendship with me, nor will He let me think that He is far removed to another sphere or order of creation. We are both persons, and to ascertain the degrees of encounter with one another is to see applied the formulations derived, from the phe-nomenology of love. Let us look back, for a moment, and see how presential knowledge of Him blossomed into the presence of love. As a Christian who steps back and reflects upon the history of his love for Christ, I discover that initially my contact with Him was a certain mild acquaintance, mostly derived through insertion in the world of other Christians. Through dialogue this man was seen as a source and center of activity, a Person of boundless understanding, tender heart, and constancy in action. There was a certain generous and uplifting quality about Him, which made Him both admirable and attractive. The personal dynamism of this man was present to me as something known, though somehow memorable. He was contemporaneously present to my life via the intentional-ity of knowledge. Gradually the knowledge of this man becomes in-teriorized and the remoteness of history vanishes. He is no longer a figure of the past, nor His life a fact of some past history, preserved through a lasting record. His words have a vitality which make them come alive for me, while those of other men are dead, or living only in books and monuments left behind. This man's words are timeless, and as they have beckoned to all men of all ages, they beckon to me now and call for my response: "I am the way and the truth and the light"; and again, "Come to me all you who are burdened and I will refresh you." The sheer radiance of.this man becomes indispensable in my eyes and wakens me to a new life. Admittedly His presence is not a bodily one, but in some ineffable way, His spirit is operative and quickens me now, so that He is contemporaneous with my life. His appeal to come and follow Him, to accept, support, and share His subjec-tivity is one to which I utter an uncompromising yes. I commit myself to this Person, adopt His name, and set Him up for my ideal. He is now not merely one whom I respect at a distance, but one for whom I care. I plan my destiny not alone, but with Him, for He is more to me than some unblemished truth or way of enlightenment. My whole being is seized by the desire to let Him be as He declared Himself: my very God. He is now the center of my experience, my faith, and what formerly existed as an object known in the knower, is now replaced by one who is cherished as a beloved is in a most intimate friend. This sense of togetherness between Christ and myself does not involve His bodily presence, to be sure. But it is not absolutely necessary that there be such a nearness to sustain our love. In order for two people to continue loving one another, it is not requisite that each be visibly on hand for the other. In fact, in the separation of two people in love, their affective response is still a con-temporaneous experience of a lasting bond. Their mu-tual love, despite distance, remains as a tonality, as an abiding atmosphere that permeates each other no matter what the task. How often have we heard it said: "I do not forget you; you are always in my thoughts." We do not reflect on the deep reality that lies beneath these words. We do not understand, or rather, realize, that when two ÷ ÷ The Presence Christ VOLUME 28, 1969 ,579 ÷ ÷ ÷ Joseph F. Roccasalvo, S.J. REVIEW FOR RELIGIOUS 580 persons are united in love, they do not need to lie visibly side by side like two bodies. They are already in each other. This is the principle of all love union, and in particular, of the intimate friendship which is that union's highest form. So it is with myself and Christ to whom I have committed my life. Indeed I look forward hopefully (as anyone who has loved) to the time when we may be reunited in a face to face encounter. But for the extent of my waking life, this Person shall remain an abiding presence for me, operative within the center of my experience. At this point in our analysis, someone might offer the following conscientious objection: how was it possible to have achieved such a loving relationship with Christ, let alone sustain His contemporaneous presence, when one never had the occasion to confront Him in person? Is it not necessary to "ground," in some way, my power to respond? It is here that one must analyse the delicate role of the Christian community in aiding the growth of my personal commitment to Christ. Since I have discovered Him as the personal center of my life, He has also been disclosed as that center to which the common-unity of Christians offer their affirmation of love. Therefore, my commitment to this Person is not an insulated one. In fact, His presence as a presence-to-be. responded to in love would not have been possible if, anterior to my coming, there had not been a community that already celebrated their loving relationship to Him. This community was a "formative milieu," into which I was inserted and which allowed for this growth and re-sponsiveness in love. Therefore, just as I can only grasp myself as a person through the communal presence of other persons who appeal to me for a unique reply, so also I can only grow in a loving, presential awareness of Him insofar as He is disclosed in and through the Christian community. We will better see the roIe of the community as the place of His presence by seeking to un-derstand what transpires within its interior. In the community of Christians, the Person of Christ is the link which binds us, one to the other. This is so, because He is the point of agreement
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With President Milei's election in Argentina, dollarization is suddenly on the table. I'm for it. Here's why. Why not? A standard of valueStart with "why not?'' Dollarization, not a national currency, is actually a sensible default. The dollar is the US standard of value. We measure length in feet, weight in pounds, and the value of goods in dollars. Why should different countries use different measures of value? Wouldn't it make sense to use a common standard of value? Once upon a time every country, and often every city, had its own weights and measures. That made trade difficult, so we eventually converged on international weights and measures. (Feet and pounds are actually a US anachronism since everyone else uses meters and kilograms. Clearly if we had to start over we'd use SI units, as science and engineering already do.) Moreover, nobody thinks it's a good idea to periodically shorten the meter in order to stimulate the economy, say by making the sale of cloth more profitable. As soon as people figure out they need to buy more cloth to make the same jeans, the profit goes away. PrecommitmentPrecommitment is, I think, the most powerful argument for dollarization (as for euorization of, say, Greece): A country that dollarizes cannot print money to spend more than it receives in taxes. A country that dollarizes must also borrow entirely in dollars, and must endure costly default rather than relatively less costly inflation if it doesn't want to repay debts. Ex post inflation and devaluation is always tempting, to pay deficits, to avoid paying debt, to transfer money from savers to borrowers, to advantage exporters, or to goose the economy ahead of elections. If a government can precommit itself to eschew inflation and devaluation, then it can borrow a lot more money on better terms, and its economy will be far better off in the long run. An independent central bank is often advocated for precommitment value. Well, locating the central bank 5,000 miles away in a country that doesn't care about your economy is as independent as you can get!The Siren Vase. Greek 480-470 BC. Source: The Culture CriticPrecommitment is an old idea. See picture. It's hard. A country must set things up so that it cannot give in to temptation ex post, and it will regret and try to wriggle out of that commitment when the time comes. A lot of the structure of our laws and government amount to a set of precommitments. An independent central bank with a price-level mandate is a precommitment not to inflate. A constitution and property rights are precommitments not to expropriate electoral minorities. Especially in Argentina's case, precommitment is why full dollarization is better than an exchange rate peg or a currency board. A true exchange rate peg -- one dollar for one peso, as much as you like -- would seem to solve the temptation-to-inflate problem. But the country can always abrogate the peg, reinstitute currency controls, and inflate. An exchange rate peg is ultimately a fiscal promise; the country will raise enough taxes so that it can get the dollars necessary to back its currency. When that seems too hard, countries devalue the peg or abandon it altogether. A currency board is tougher. Under a currency board, every peso issued by the government is backed by a dollar. That seems to ensure adequate reserves to handle any conceivable run. But a strapped government eyes the great Uncle-Scrooge swimming pool full of dollars at the currency board, and is tempted to abrogate the board, grab the assets and spend them. That's exactly how Argentina's currency board ended. Dollarization is a burn the ships strategy. There is no return. Reserves are neither necessary nor sufficient for an exchange rate peg. The peg is a fiscal promise and stands and falls with fiscal policy. A currency board, to the governmentFull dollarization -- the country uses actual dollars, and abandons its currency -- cannot be so swiftly undone. The country would have to pass laws to reinstitute the peso, declare all dollar contracts to be Peso contracts, ban the use of dollars and try to confiscate them. Dollars pervading the country would make that hard. People who understand their wealth is being confiscated and replaced by monopoly money would make it harder -- harder than some technical change in the amount of backing at the central bank for the same peso notes and bank accounts underlying a devalued peg or even an abrogated currency board. The design of dollarization should make it harder to undo. The point is precommitment, to make it as costly as possible for a following government to de-dollarize, after all. It's hard to confiscate physical cash, but if domestic Argentine banks have dollar accounts and dollar assets, it is relatively easy to pronounce the accounts in pesos and grab the assets. It would be better if dollarization were accompanied by full financial, capital, and trade liberalization, including allowing foreign banks to operate freely and Argentinian banks to become subsidiaries of foreign banks. Absence of a central bank and domestic deposit insurance will make that even more desirable. Then Argentinian bank "accounts" could be claims to dollar assets held offshore, that remain intact no matter what a future Peronist government does. Governments in fiscal stress that print up money, like Argentina, also impose an array of economy-killing policies to try to prop up the value of their currency, so the money printing generates more revenue. They restrict imports with tariffs, quotas, and red tape; they can restrict exports to try to steer supply to home markets at lower prices; they restrict currency conversion and do so at manipulated rates; they restrict capital markets, stopping people from investing abroad or borrowing abroad; they force people to hold money in oligopolized bank accounts at artificially low interest rates. Dollarization is also a precommitment to avoid or at least reduce all these harmful policies, as generating a demand for a country's currency doesn't do any good to the government budget when there isn't a currency. Zimbabwe dollarized in 2009, giving up on its currency after the greatest hyperinflation ever seen. The argument for Argentina is similar. Ecuador dollarized successfully in much less trying circumstances. It's not a new idea, and unilateral dollarization is possible. In both cases there was a period in which both currencies circulated. (Sadly, Zimbabwe ended dollarization in 2019, with a re-introduction of the domestic currency and redenomination of dollar deposits at a very unfavorable exchange rate. It is possible to undo, and the security of dollar bank accounts in face of such appropriation is an important part of the dollarization precommitment.) The limits of precommitmentDollarization is no panacea. It will work if it is accompanied by fiscal and microeconomic reform. It will be of limited value otherwise. I'll declare a motto: All successful inflation stabilizations have come from a combination of fiscal, monetary and microeconomic reform. Dollarization does not magically solve intractable budget deficits. Under dollarization, if the government cannot repay debt or borrow, it must default. And Argentina has plenty of experience with sovereign default. Argentina already borrows abroad in dollars, because nobody abroad wants peso debt, and has repeatedly defaulted on dollar debt. The idea of dollar debt is that explicit default is more costly than inflation, so the country will work harder to repay debt. Bond purchasers, aware of the temptation to default, will put clauses in debt contracts that make default more costly still. For you to borrow, you have to give the bank the title to the house. Sovereign debt issued under foreign law, with rights to grab assets abroad works similarly. But sovereign default is not infinitely costly and countries like Argentina sometimes choose default anyway. Where inflation may represent simply hugging the mast and promising not to let go, default is a set of loose handcuffs that you can wriggle out of painfully. Countries are like corporations. Debt denominated in the country's own currency is like corporate equity (stock): If the government can't or won't pay it back the price can fall, via inflation and currency devaluation. Debt denominated in foreign currency is like debt: If the government can't or won't pay it back, it must default. (Most often, default is partial. You get back some of what is promised, or you are forced to convert maturing debt into new debt at a lower interest rate.) The standard ideas of corporate finance tell us who issues debt and who issues equity. Small businesses, new businesses, businesses that don't have easily valuable assets, businesses where it is too easy for the managers to hide cash, are forced to borrow, to issue debt. You have to borrow to start a restaurant. Businesses issue equity when they have good corporate governance, good accounting, and stockholders can be sure they're getting their share. These ideas apply to countries, and the choice between borrowing in their own currency and borrowing in foreign currency. Countries with poor governance, poor accounting, out of control fiscal policies, poor institutions for repayment, have to borrow in foreign currency if they are going to borrow at all, with intrusive conditions making default even more expensive. Issuing and borrowing in your own currency, with the option to inflate, is the privilege of countries with good institutions, and democracies where voters get really mad about inflation in particular. Of course, when things get really bad, the country can't borrow in either domestic or foreign currency. Then it prints money, forcing its citizens to take it. That's where Argentina is. In personal finance, you start with no credit at all; then you can borrow; finally you can issue equity. On the scale of healthier economies, dollarizing is the next step up for Argentina. Dollarization and foreign currency debt have another advantage. If a country inflates its way out of a fiscal mess, that benefits the government but also benefits all private borrowers at the expense of private savers. Private borrowing inherits the inflation premium of government borrowing, as the effective government default induces a widespread private default. Dollarization and sovereign default can allow the sovereign to default without messing up private contracts, and all prices and wages in the economy. It is possible for sovereigns to pay higher interest rates than good companies, and the sovereign to be more likely to default than those companies. It doesn't always happen, because sovereigns about to default usually grab all the wealth they can find on the way down, but the separation of sovereign default from inflationary chaos is also an advantage. Greece is a good example, and a bit Italy as well, both in the advantages and the cautionary tale about the limitations of dollarization. Greece and Italy used to have their own currencies. They also had borders, trade controls, and capital controls. They had regular inflation and devaluation. Every day seemed to be another "crisis" demanding another "just this once" splurge. As a result, they paid quite high interest rates to borrow, since savvy bondholders wanted insurance against another "just this once."They joined the EU and the eurozone. This step precommitted them to free trade, relatively free capital markets, and no national currency. Sovereign default was possible, but regarded as very costly. Having banks stuffed with sovereign debt made it more costly. Leaving the euro was possible, but even more costly. Deliberately having no plan to do so made it more costly still. The ropes tying hands to the mast were pretty strong. The result: borrowing costs plummeted. Governments, people and businesses were able to borrow at unheard of low rates. And they did so, with aplomb. The borrowing could have financed public and private investment to take advantage of the new business opportunities the EU allowed. Sadly it did not. Greece soon experienced the higher ex-post costs of default that the precommitment imposed. Dollarizaton -- euroization -- is a precommitment, not a panacea. Recommitments impose costs on yourself ex post. Those costs are real. A successful dollarization for Argentina has to be part of a joint monetary, fiscal, and microeconomic reform. (Did I say that already? :) ) If public finances aren't sorted out, a default will come eventually. And public finances don't need a sharp bout of "austerity" to please the IMF. They need decades of small primary surpluses, tax revenues slightly higher than spending, to credibly pay down any debt. To get decades of revenue, the best answer is growth. Tax revenue equals tax rate times income. More income is a lot easier than higher tax rate, which at least partially lowers income. Greece and Italy did not accomplish the microeconomic reform part. Fortunately, for Argentina, microeconomic reform is low-hanging fruit, especially for a Libertarian president. TransitionWell, so much for the Promised Land, they may have asked of Moses, how do we get there? And let's not spend 40 years wandering the Sinai on the way. Transition isn't necessarily hard. On 1 January 1999, Italy switched from Lira to Euro. Every price changed overnight, every bank account redenominated, every contract reinterpreted, all instantly and seamlessly. People turned in Lira banknotes for Euro banknotes. The biggest complaint is that stores might have rounded up converted prices. If only Argentina could have such problems. Why is Argentina not the same? Well, for a lot of reasons. Before getting to the euro, Italy had adopted the EU open market. Exchange rates had been successfully pegged at the conversion rate, and no funny business about multiple rates. The ECB (really the Italian central bank) could simply print up euros to hand out in exchange for lira. The assets of the Italian central bank and other national central banks were also redenominated in euro, so printing up euros to soak up national currencies was not inflationary -- assets still equal liabilities. Banks with lira deposits that convert to Euro also have lira assets that convert to euro. And there was no sovereign debt crisis, bank crisis, or big inflation going on. Italian government debt was trading freely on an open market. Italy would spend and receive taxes in euros, so if the debt was worth its current price in lira as the present value of surpluses, it was worth exactly the same price, at the conversion rate, in euro. None of this is true in Argentina. The central problem, of course, is that the government is broke. The government does not have dollars to exchange for Pesos. Normally, this would not be a problem. Reserves don't matter, the fiscal capacity to get reserves matters. The government could simply borrow dollars internationally, give the dollars out in exchange for pesos, and slowly pay off the resulting debt. If Argentina redenominated interest-bearing peso debt to dollars at a market exchange rate, that would have no effect on the value of the debt. Obviously, borrowing additional dollars would likely be difficult for Argentina right now. To the extent that its remaining debt is a claim to future inflationary seigniorage revenues, its debt is also worth less once converted to dollars, even at a free market rate, because without seigniorage or fiscal reforms, budget deficits will increase. And that leads to the primary argument against dollarization I hear these days. Yes it might be the promised land, but it's too hard to get there. I don't hear loudly enough, though, what is the alternative? One more muddle of currency boards, central bank rules, promises to the IMF and so forth? How do you suddenly create the kind of stable institutions that Argentina has lacked for a century to justify a respectable currency? One might say this is a problem of price, not of quantity. Pick the right exchange rate, and conversion is possible. But that is not even clearly true. If the state is truly broke, if pesos are only worth anything because of the legal restrictions forcing people to hold them, then pesos and peso debt are genuinely worthless. The only route to dollarization would be essentially a complete collapse of the currency and debt. They are worth nothing. We start over. You can use dollars, but you'll have to export something to the US -- either goods or capital, i.e. stock and bonds in private companies -- to get them. (Well, to get any more of them. Lots of dollars line Argentine mattresses already.) That is enough economic chaos to really put people off. In reality, I think the fear is not a completely worthless currency, but that a move to quick dollarization would make peso and peso claims worth very little, and people would rebel against seeing their money holdings and bank accounts even more suddenly worthless than they are now. Maybe, maybe not. Just who is left in Argentina counting on a robust value of pesos? But the state is not worth nothing. It may be worth little in mark to market, or current dollar borrowing capacity. But a reformed, growing Argentina, with tax, spending, and microeconomic reform, could be a great place for investment, and for tax revenue above costs. Once international lenders are convinced those reform efforts are locked in, and Argentina will grow to anything like its amazing potential, they'll be stumbling over themselves to lend. So a better dollarization plan redeems pesos at the new greater value of the post-reform Argentine state. The question is a bit of chicken and egg: Dollarization has to be part of the reform, but only reform allows dollarization with a decent value of peso exchange. So there is a genuine question of sequencing of reforms. This question reminds me of the totally fruitless discussion when the Soviet Union broke up. American economists amused themselves with clever optimal sequencing of liberalization schemes. But if competent benevolent dictators (sorry, "policy-makers") were running the show, the Soviet Union wouldn't have failed in the first place. The end of hyperinflation in Germany. Price level 1919-1924. Note left-axis scale. Source: Sargent (1982) "The ends of four big inflations." A better historical analogy is, I think, the ends of hyperinflation after WWI, so beautifully described by Tom Sargent in 1982. The inflations were stopped by a sudden, simultaneous, fiscal, monetary, and (to some extent) microeconomic reform. The fiscal problem was solved by renegotiating reparations under the Versailles treaty, along with severe cuts in domestic spending, for example firing a lot of government and (nationalized) railroad workers. There were monetary reforms, including an independent central bank forbidden to buy government debt. There were some microeconomic reforms as well. Stopping inflation took no monetary stringency or high interest rates: Interest rates fell, and the governments printed more money, as real money demand increased. There was no Phillips curve of high unemployment. Employment and the economies boomed. So I'm for almost-simultaneous and fast reforms. 1) Allow the use of dollars everywhere. Dollars and pesos can coexist. Yes, this will put downward pressure on the value of the peso, but that might be crucial to maintain interest in the other reforms, which will raise the value of the peso. 2) Instant unilateral free trade and capital opening. Argentina will have to export goods and capital to get dollars. Get out of the way. Freeing imports will lower their prices and make the economy more efficient. Capital will only come in, which it should do quickly, if it knows it can get out again. Float the peso. 3) Long list of growth - oriented microeconomic reforms. That's why you elected a Libertarian president. 4) Slash spending. Reform taxes. Low marginal rates, broad base. Subsidies in particular distort prices to transfer income. Eliminate. 5) Once reforms are in place, and Argentina has some borrowing capacity, redenominate debt to dollars, and borrow additional dollars to exchange pesos for dollars. All existing peso contracts including bank accounts change on the date. Basically, you want people to hold peso bills and peso debt in the interim as claims on the post-reform government. Peso holders have an incentive to push for reforms that will raise the eventual exchange value of the peso. 6) Find an interim lender. The central problem is who will lend to Argentina in mid stream in order to retire pesos. This is like debtor in possession financing but for a bankrupt country. This could be a job for the IMF. The IMF could lend Argentina dollars for the purpose of retiring pesos. One couldn't ask for much better "conditionality" than a robust Libertarian pro-growth program. Having the IMF along for the ride might also help to commit Argentina to the program. (The IMF can force conditionality better than private lenders.) When things have settled down, Argentina should be able to borrow dollars privately to pay back the IMF. The IMF might charge a decent interest rate to encourage that. How much borrowing is needed? Less than you think. Interest-paying debt can simply be redenominated in dollars once you pick a rate. That might be hard to pay off, but that's a problem for later. So Argentina really only needs to borrow enough dollars to retire cash pesos. I can't find numbers, but hyper inflationary countries typically don't have much real value of cash outstanding. The US has 8% of GDP in currency outstanding. If Argentina has half that, then it needs to borrow only 4% of GDP in dollars to buy back all its currency. That's not a lot. If the peso really collapses, borrowing a little bit more (against great future growth of the reform program) to give everyone $100, the sort of fresh start that Germany did after WWII and after unification, is worth considering. Most of the worry about Argentina's borrowing ability envisions continued primary deficits with slow fiscal adjustment. Make the fiscal adjustment tomorrow."You never want a serious crisis to go to waste," said Rahm Emanuel wisely. "Sequencing" reforms means that everything promised tomorrow is up for constant renegotiation. Especially when parts of the reform depend on other parts, I'm for doing it all as fast as possible, and then adding refinements later if need be. Roosevelt had his famous 100 days, not a 8 year sequenced program. The Argentine reform program is going to hurt a lot of people, or at least recognize losses that had long been papered over in the hope they would go away. Politically, one wants to make the case "We're all in this, we're all hurting. You give up your special deal, preferential exchange rate, special subsidy or whatever, but so will everyone else. Hang with me to make sure they don't get theirs, and in a year we'll all be better off." If reforms are in a long sequence, which means long renegotiation, it's much harder to get buy in from people who are hurt earlier on that the ones who come later will also do their part. The standard answersOne standard critique of dollarization is monetary policy and "optimal currency areas." By having a national currency, the country's wise central bankers can artfully inflate and devalue the currency on occasion to adapt to negative shocks, without the inconvenience and potential dislocation of everyone in the country lowering prices and wages. Suppose, say, the country produces beef, and exports it in order to import cars. If world demand for beef declines, the dollar price of beef declines. The country is going to have to import fewer cars. In a dollarized country, or with a pegged exchange rate, the internal price of beef and wages go down. With its own country and a floating rate, the value of the currency could go down, leaving beef and wages the same inside the country, but the price of imported cars goes up. If lowering prices and wages causes more recession and dislocation than raising import prices, then the artful devaluation is the better idea. (To think about this question more carefully you need traded and non-traded goods; beef, cars, and haircuts. The relative price of beef, cars, and haircuts along with demand for haircuts is also different under the two regimes). Similarly, suppose there is a "lack of demand'' recession and deflation. (90 years later, economists are still struggling to say exactly where that comes from.) With its own central bank and currency, the country can artfully inflate just enough to offset the recession. A country that dollarizes also has to import not-always-optimal US inflation. Switzerland did a lot better than the US and EU once again in the covid era. This line of thinking answers the question, "OK, if Argentina ($847 bn GDP, beef exports) should have its own currency in order to artfully offset shocks, why shouldn't Colorado ($484 bn GDP, beef exports)?'' Colorado is more dependent on trade with the rest of the US than is Argentina. But, the story goes, people can more easily move across states. A common federal government shoves "fiscal stimulus" to states in trouble. Most of all, "lack of demand" recessions seem to be national, in part because of the high integration of states, so recessions are fought by national policy and don't need state-specific monetary stimulus. This is the standard "optimal currency area" line of thinking, which recommends a common currency in an integrated free trade zone such as US, small Latin American countries that trade a lot with the US, and Europe. Standard thinking especially likes a common currency in a fiscal union. Some commenters felt Greece should keep or revert to the Drachma because the EU didn't have enough common countercyclical fiscal policy. It likes independent currencies elsewhere.I hope you're laughing out loud by now. A wise central bank, coupled with a thrifty national government, that artfully inflates and devalues just enough to technocratically exploit price stickiness and financial frictions, offsetting national "shocks" with minimum disruption, is a laughable description of Argentina's fiscal and monetary policies. Periodic inflation, hyperinflation and default, together with a wildly overregulated economy with far too much capital and trade controls is more like it. The lure of technocratic stabilization policy in the face of Argentina's fiscal and monetary chaos is like fantasizing whether you want the tan or black leather on your new Porsche while you're on the bus to Carmax to see if you can afford a 10-year old Toyota. Another reason people argue that even small countries should have their own currencies is to keep the seigniorage. Actual cash pays no interest. Thus, a government that issues cash earns the interest spread between government bonds and interest. Equivalently, if demand for cash is proportional to GDP, then as GDP grows, say 2% per year, then the government can let cash grow 2% per year as well, i.e. it can print up that much cash and spend it. But this sort of seigniorage is small for modern economies that don't have inflation. Without inflation, a well run economy might pay 2% for its debt, so save 2% by issuing currency. 2% interest times cash which is 10% of GDP is 0.2% of GDP. On the scale of Argentinian (or US) debt and deficits, that's couch change. When inflation is higher, interest rates are higher, and seigniorage or the "inflation tax" is higher. Argentina is living off that now. But the point is not to inflate forever and to forswear bigger inflation taxes. Keeping this small seigniorage is one reason for countries to keep their currency and peg to the dollar or run a currency board. The currency board holds interest-bearing dollar assets, and the government gets the interest. Nice. But as I judge above, the extra precommitment value of total dollarization is worth the small lost seigniorage. Facing Argentina's crisis, plus its catastrophic century of lost growth, lost seigniorage is a cost that I judge far below the benefit. Other countries dollarize, but agree with the US Fed to rebate them some money for the seigniorage. Indeed, if Argentina dollarizes and holds 10% of its GDP in non-interest-bearing US dollars, that's a nice little present to the US. A dollarization agreement with Argentina to give them back the seignorage would be the least we can do. But I don't think Argentina should hold off waiting for Jay Powell to answer the phone. The Fed has other fires to put out. If Argentina unilaterally dollarizes, they can work this sort of thing out later. Dollarization would obviously be a lot easier if it is worked out together with the US government and US banks. Getting cash sent to Argentina, getting banks to have easy payment systems in dollars and links to US banks would make it all easier. If Argentina gets rid of its central bank it still needs a payment system to settle claims in dollars. Accounts at, say, Chase could function as a central bank. But it would all be easier if the US cooperates. Updates:Some commenters point out that Argentina may be importing US monetary policy just as the US imports Argentine fiscal policy. That would lead to importing a big inflation. They suggest a Latin American Monetary Union, like the euro, or using a third country's currency. The Swiss franc is pretty good. Maybe the Swiss can set the world standard of value. Both are good theoretical ideas but a lot harder to achieve in the short run. Dollarization will be hard enough. Argentines have a lot of dollars already, most trade is invoiced in dollars so getting dollars via trade is relatively easy, the Swiss have not built out a banking infrastructure capable of being a global currency. The EMU lives on top of the EU, and has its own fiscal/monetary problems. Building a new currency before solving Argentina's problems sounds like a long road. The question asked was dollarization, so I stuck to that for now. I imagined here unilateral dollarization. But I didn't emphasize enough: The US should encourage dollarization! China has figured this out and desperately wants anyone to use its currency. Why should we not want more people to use our currency? Not just for the seigniorage revenue, but for the ease of trade and international linkages it promotes. The Treasury and Fed should have a "how to dollarize your economy" package ready to go for anyone who wants it. Full integration is not trivial, including access to currency, getting bank access to the Fed's clearing systems, instituting cyber and money laundering protocols, and so forth. Important update: Daniel Raisbeck and Gabriela Calderon de Burgos at CATO have a lovely essay on Argentinian dollarization, also debunking an earlier Economist article that proclaimed it impossible. They include facts and comparison with other dollarization experiences, not just theory as I did. (Thanks to the correspondent who pointed me to the essay.) Some quotes:At the end of 2022, Argentines held over $246 billion in foreign bank accounts, safe deposit boxes, and mostly undeclared cash, according to Argentina's National Institute of Statistics and Census. This amounts to over 50 percent of Argentina's GDP in current dollars for 2021 ($487 billion). Hence, the dollar scarcity pertains only to the Argentine state....The last two dollarization processes in Latin American countries prove that "purchasing" the entire monetary base with U.S. dollars from one moment to the next is not only impractical, but it is also unnecessary. In both Ecuador and El Salvador, which dollarized in 2000 and 2001 respectively, dollarization involved parallel processes. In both countries, the most straightforward process was the dollarization of all existing deposits, which can be converted into dollars at the determined exchange rate instantly.in both Ecuador and El Salvador, dollarization not only did not lead to bank runs; it led to a rapid and sharp increase in deposits, even amid economic and political turmoil in Ecuador's case....There is a general feature of ending hyperinflation: People hold more money. In this case, people hold more bank accounts once they know those accounts are safe. Short summary of the rest, all those dollar deposits (out of mattresses into the banking system) allowed the central bank to retire its local currency liabilities. Emilio Ocampo, the Argentine economist whom Milei has put in charge of plans for Argentina's dollarization should he win the presidency, summarizes Ecuador's experience thus:People exchanged their dollars through the banks and a large part of those dollars were deposited in the same banks. The central bank had virtually no need to disburse reserves. This was not by design but was a spontaneous result.In El Salvador also, Dollar deposits also increased spontaneously in El Salvador, a country that dollarized in 2001. By the end of 2022, the country's deposits amounted to 49.6 percent of GDP—in Panama, another dollarized peer, deposits stood at 117 percent of GDP.El Salvador's banking system was dollarized immediately, but the conversion of the circulating currency was voluntary, with citizens allowed to decide if and when to exchange their colones for dollars. Ocampo notes that, in both Ecuador and El Salvador, only 30 percent of the circulating currency had been exchanged for dollars four months after dollarization was announced so that both currencies circulated simultaneously. In the latter country, it took over two years for 90 percent of the monetary base to be dollar‐based.Cachanosky explains that, in an El Salvador‐type, voluntary dollarization scenario, the circulating national currency can be dollarized as it is deposited or used to pay taxes, in which case the sums are converted to dollars once they enter a state‐owned bank account. Hence, "there is no need for the central bank to buy the circulating currency" at a moment's notice.Dollarization starts with both currencies and a peg. As long as people trust that dollarization will happen at the peg, the conversion can take a while. You do not need dollars to soak up every peso on day 1. Dollarization is, above, a commitment that the peg will last for years, not a necessary commitment that the peg will last a day. I speculated about private borrowing at lower rates than the sovereign, once default rather than inflation is the only way out for the sovereign. This happened: ... as Manuel Hinds, a former finance minister in El Salvador, has explained, solvent Salvadorans in the private sector can borrow at rates of around 7 percent on their mortgages while international sovereign bond markets will only lend to the Salvadoran government at far higher rates. As Hinds writes, under dollarization, "the government cannot transfer its financial costs to the private sector by printing domestic money and devaluing it."A nice bottom line: Ask people in Ecuador, El Salvador, and Panama what they think:This is yet another lesson of dollarization's actual experience in Latin American countries. It is also a reason why the vast majority of the population in the dollarized nations has no desire for a return to a national currency. The monetary experiences of daily life have taught them that dollarization's palpable benefits far outweigh its theoretical drawbacks. Even more important update:From Nicolás Cachonosky How to Dollarize Argentina The central problem is non-money liabilities of the central bank. A detailed plan. Many other blog posts at the link. See his comment below. Tyler Cowen on dollarization in Bloomberg. Great quote: The question is not how to adopt a new currency, it is how to adopt a new currency and retain a reasonable value for the old one. Dollarization is easy. Hyperinflate the Peso to zero a la Zimbabwe. Repeat quote. Emilio Ocampo on dollarization as a commitment device. One of the main reasons to dollarize is to eliminate high, persistent, and volatile inflation. However, to be effective, dollarization must generate sufficient credibility, which in turn depends critically on whether its expected probability of reversal is low.... The evidence suggests that, in the long-run, the strongest insurance against reversal is the support of the electorate, but in the short-run, institutional design [dollarization] can play a critical role.Fifty years ago, in testimony to U.S. Congress, Milton Friedman argued that "the whole reason why it is an advantage for a developing country to tie to a major country is that, historically speaking, the internal policies of developing countries have been very bad. U.S. policy has been bad, but their policies have been far worse. ... (1973, p.127)."In this respect, not much has changed in Argentina since. Craig Richardson explains how dollarization failed in Zimbabwe, a wonderful cautionary tale. Deficits did not stop, the government issued "bonds" and forced banks to buy them, bank accounts became de linked from currency. Gresham's law prevailed, the government "bonds" circulating at half face value drove out cash dollars. With persistent government and trade deficits there was a "dollar shortage."
