2007 Annual Report Contents 6 10 14 Economic Global Economy Governance Studies and Development Studies

Home , Ana Marie Cox, Lael Brainard, Samuel Pisar

QUALITY. INDEPENDENCE. IMPACT. Brookings Annual Report 2007

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Foreign Metropolitan Support for Policy Policy Brookings 18 22 26

8 Engelberg Center for Health 3 Mission Statement Care Reform 4 President’s Message 17 Opportunity 08 5 Chairman’s Message 35 Brookings Institution Press 31 International Advisory Council Printing: Jarboe Printing 36 Center for Executive Cover Photographs: (front covers) Cameron Davidson/Folio, Inc., Education 32 Honor Roll of Contributors (inside covers) Matthew Borkoski 37 Strategic Plan: Brookings’s 38 Financial Summary Copyright ©2007 The Brookings Institution Tenth Decade 1775 Massachusetts Avenue, NW 40 Trustees Washington, DC 20036 Telephone: 202-797-6000 Fax: 202-797-6004 www.brookings.edu Library of Congress Card Number: 84-641502 ABC’s George Stephanopoulos listens to Opportunity 08 advisory committee co-chairs Thomas E. Donilon (left) and Kenneth M. Duberstein at the project launch in February. The Brookings Institution

Mission Statement Brookings’s mission is to conduct high-quality, independent research and, based on that research, to advance innovative, practical recommendations to advance three broad goals:

n Strengthen American democracy.

n Advance the economic and social welfare, security, and opportunity of all Americans.

n Secure a more open, safe, prosperous, and cooperative international system. A lswang

Ralph Ralph 3 PRESIDENT’S MESSAGE

hile this year provided particularly compelling reasons to look to the future, I’d like to glance briefly to an important— and exemplary—moment in the past. Sixty years ago, a Democratic secretary of state, George Marshall, proposed to a Republican-led Congress that America begin an ardu- ous and noble project: rebuilding Europe. For help, key W members of the House and Senate turned to Brookings. In less than a month, our scholars produced a 20-page report, containing eight recommendations for the goals, structure, and process of the Marshall Plan. Officially called the Euro- pean Recovery Program, the plan, incorporating many of our suggestions, was soon underway. It marked a high point in American history for bipartisanship, the country’s can-do spirit in action, and the receptivity of its leaders to bold, innovative, and practical ideas. Differences and similarities to that experience face us now. Not surprisingly for a presidential election year, bipartisanship has seen better days. But because this is the first race in eight decades without an incumbent president or vice president seeking the nomination of either party, the candidates and the elector- ate seem more open to fresh thinking—and there is a widespread appreciation that the United States faces a range of particularly acute challenges, both at home and abroad. Part of our challenge at Brookings is to align our agenda with that of the nation. In generating ideas about how to strengthen American democracy, advance the welfare and opportunity of all Americans, and promote a more secure and cooperative international system, we have recommitted ourselves over the last year to our core values: quality, independence, and impact. We are applying those standards to what we are doing in all five of our research programs, as well as to the increasing amount of interdisciplinary projects we have undertaken. As we make our own contribution to the debate about new directions for the country, our signature all-Brookings activity is Opportunity 08, which is already helping candidates and the public focus on critical issues. We have also identified five cross-cutting policy areas—energy, health care, competitiveness, education, and migration—which will require innovative ideas drawn from multiple programs. Health policy moves to the forefront of our attention with the creation of our new Engelberg Center for Health Care Reform. Thanks to the generosity of two trustees, Al Engelberg and Leonard Schaeffer, the center has already begun to address the crucial challenges of access, quality, and financing that face the U.S. health care system. As I hope will be apparent in the pages that follow, this past year has been one of exciting and promising change for Brookings. We’ve found new ways of reaching out across the country and around the world, recruited a number of new senior fellows, launched new projects—as well as new kinds of projects—and issued reports and held events that have enhanced our influence. As we build on our strength in the years to come, it is gratifying to know we can count on you, our supporters, for continuing investment in our capacity, mission, and vision.

John L. Thornton, Brookings chairman 4 CHAIRMAN’S MESSAGE

hen our scholars and trustees held a strategic planning retreat in February 2007, we concentrated on the task of applying to Brookings the concept of “smart growth”—a phrase we’ve borrowed from the vocabulary of our Metro- politan Policy Program and its studied approach to “urban sprawl.” There is no question Brookings must grow, given the Wmagnitude and complexity of the issues facing our nation and our world. The question is: how much, how fast, and in what areas? After an intense two-day discussion, three broad priorities emerged: broaden- ing the scope of our work in the United States; becoming a truly global think tank; and increasing our impact without sacrificing the quality or independence of our research. On the home front, our Opportunity 08 project has already hosted candidates and issue forums in Washington, D.C., Nevada, and New Hampshire. Upcom- ing fall 2007 events in the other early primary states of Iowa and South Carolina and spring 2008 events in battleground states such as Ohio and Florida will give Brookings a chance to hear from, and speak directly to, voters of both parties on solutions to major national challenges. As we build up our capacity to help tackle the daunting issue of health care, our colleagues on the board, Al Engelberg and Leonard Schaeffer, were particularly generous with their financial and intellectual resources. By supporting a new center and creating endowed chairs, they have paved the way on a renewed effort to boost the fundamental resources Brookings relies on to take advantage of quickly emerging policy issues. In the same spirit, another valued trustee, Chuck Robinson, has endowed a chair. Carlos Pascual, vice president and director of Foreign Policy, is, appropri- ately, the first to hold the Charles W. Robinson Chair in Foreign Policy. Meanwhile, we have opened an office in Beijing and will shortly open one in Doha—Brookings’s first facilities outside Washington. Understanding China’s role in this century has been a personal passion of mine, so it was a particular pleasure to help lead a Brookings Study Tour across China and to participate in the official opening of the Brookings-Tsinghua Center. The Center is well on its way to producing its first major study focused on financial system reform in China. Our new center in Doha will help convene the annual U.S.-Islamic World Forum in Doha. That project underscores our commitment to research and engagement on the crucial cultural divide that will determine what kind of world our children live in. In recognition of the comparable importance of India, Strobe is leading a study tour there early in 2008. Besides reaching out across the country and the world, we are also moving forward on the technological front, harnessing the newest broadcast power of the Internet. Our new Web site, www.brookings.edu, will greatly sharpen our ability to reach our increasingly far-flung and diverse audiences. Helping the world meet its challenges requires managing ourselves in a way that is both ambitious and disciplined. If we can meet the strategic goals we have set for the coming years, we will have established the momentum to further expand our quality, independence, and impact by our centennial in 2016. To ful-

t fill that ambition, we count on you for continuing support. L ambe r Strobe Talbott, Brookings president r ine Kathe 5

Economic Studies

he Economic Studies Program made great strides in health policy and macroeconomics this year, while also enhancing its core strengths in social, tax, and fiscal policy. From the growing recognition of the unique and innovative modeling work by the Center on Social and Economic Dynamics (CSED) to a Fiscal Wake-Up Tour that sent budget experts to 20 U.S. cities, audiences grew and people listened. T “Our scholars have successfully brought new approaches and compelling evidence to bear on key policy issues,” said William G. Gale, vice president and director of Economic Studies and the holder of the Arjay and Frances Fearing Miller Chair in Federal Economy Policy. “We will continue to offer clear, concise, and constructive analysis and policy options on topics that will, or at least should, come up in the 2008 presidential election campaign—and beyond.”

Arrivals and Departures Brookings welcomed new Senior Fellow Mark B. McClellan, a medical doctor and economist, and former official in the Clinton and Bush administrations, as the Leonard D. Schaeffer Director of the Engelberg Center for Health Care Reform. The Center epitomizes the Brookings mission with its charge to create and recommend policy options and communicate them through close relationships with policy-makers, the media, and health researchers (see Health, page 8). “The Engelberg Center is one of the timeliest and most ambitious ventures we have ever undertaken at Brookings,” said Strobe Talbott, president of Brookings. “And in Mark McClellan, it has the best leadership imaginable. He brings to the position of founding director the experience of a distinguished career in public service combined with an extensive academic background in both health policy and economics.” New editors were named for the Brookings Papers on Economic Activity: Lawrence H. Summers, N. Gregory Mankiw, and Douglas W. Elmendorf. Summers is a Harvard professor and former Treasury secretary. Mankiw is a Harvard professor and former chairman of the president’s Council of Economic Advisers from 2003 to 2005. Elmen- dorf, who also joined Brookings as senior fellow and the Edward M. Bernstein Scholar, has taught at Harvard and worked extensively in the policy arena, including at the Department of Treasury, the Con- gressional Budget Office, the Council of Economic Advisers, and the William G. Gale, vice president and director of Federal Reserve Board. They replace William C. Brainard, professor of

Economic Studies, speaks at an International A lswang Advisory Council meeting as member Nathaniel economics at Yale University, and George L. Perry, a senior fellow, who

Rothschild (right) listens. Ralph edited the journal for 26 and 37 years, respectively. 7 economic Studies

Peter Orszag—who wore many rich legacy of work on interna- generational mobility. The first called for an expansion of the hats, including director of the tional economics. report, authored by Senior Fellow earned income tax credit. Hamilton Project and the Retire- Ross Hammond was awarded and holder of the Cabot Family To help address problems of ment Security Project—left Brook- the Okun-Model Fellowship and Chair, Isabel V. Sawhill, finds unplanned pregnancies among ings in January to become direc- joined as a fellow in CSED, where that American men have less very young women, most of them tor of the Congressional Budget he works on agent-based models income than their fathers’ genera- outside of marriage, Brookings Office (CBO). Orszag stepped into that examine public health issues, tion did at the same age. launched the “Love, Sex, and the old job of Brookings colleague corruption, ethnocentrism, and Sawhill and Senior Fellow Relationships” effort to analyze Alice Rivlin, who was CBO’s trust. Brookings also welcomed Ron Haskins retain the helm the reasons for this problem with founding director from 1975 to Mark Duggan, one of the nation’s at the Center on Children and the aim of developing better strat- 1983. Jason Furman was hired as a top academic health economists, Families (CCF), which has egies for reducing these rates. senior fellow and replaced Orszag who spent his sabbatical from the become a key source on poli- This work reinforces the National at the Hamilton Project helm. Fur- University of Maryland here and cies that affect the well-being of Campaign to Prevent Teen Preg- man has White House and World received the Kerr Fellowship dur- America’s children and their par- nancy and other groups address- Bank experience; has taught at ing his stay. ents. The CCF annual response ing unwanted pregnancies. Yale, Columbia, and NYU; and is to the Census poverty report on Senior Fellow and Economic well grounded on a wide range of Navigating New Social Policies the day the new numbers are Studies Deputy Director Jeffrey policy issues. The Economic Mobility Project, released draws many reporters, Kling continued his work on the After 15 years at Brookings, a partnership of Brookings, the Hill staff, and analysts interested Moving to Opportunity experi- Senior Fellow Susan Collins Heritage Foundation, AEI, the in the Brookings perspective. ment, completing publication on accepted a post in June as the Urban Institute, and the Pew New York City Mayor Michael and engaging in public debate Joan and Sanford Weill Dean Charitable Trusts, was launched Bloomberg, who praised Brook- about the role housing vouchers of the Gerald R. Ford School of this year to broaden the current ings for having “risen above par- play in anti-poverty policy, educa- Public Policy at the University of debate over income inequality, tisanship,” offered his response tion policy, housing policy, and Michigan. She has left behind a economic insecurity, and inter- at the August 2007 event and public health. New Engelberg Center Becomes “Health Care” Hub hat will distinguish the Program, the Engelberg Center now tremendous sup- based research Engelberg Center for serves as the hub of all Brookings port of this pioneer- programs with Brook- Health Care Reform activity related to health policy, ing philanthropic ings’s research and W from similar projects ranging from the design of tax sub- investment. “With- policy development at other think tanks? That was one sidies to the effects of health costs out people like expertise. One of of many questions posed at the July on business competitiveness to opti- Al and Leonard, the initial projects 2007 launch of the new center at mal policy responses to infectious our health reform is to model differ- a press breakfast at the National diseases. It will work closely, in this efforts would lack ent approaches to Press Club. Founding Director Mark regard, with the new Global Health a solid platform. modifying current B. McClellan, also a recently named Initiative in the Global Economy More than anything, Medicare physician Brookings senior fellow, responded, and Development Program and with they’ve given us the and other provider “I view this as a ‘do’ tank, not a the Center on Social and Economic latitude to explore payments with an eye

think tank—a center for collaborat- Dynamics on disease outbreaks. many options and hu r Art Du r i t y toward impact on the ing on how to effectively accomplish The center’s creation was made their confidence to go forward Medicare Trust Funds. shared goals and ideas, not a cen- possible by the generous support independently.” A former commissioner of the ter for writing papers in an ivory of two Brookings trustees, Alfred B. Besides drawing on Brookings Food and Drug Administration and tower.” Engelberg and Leonard D. Schaeffer. scholars, the Engelberg Center has administrator of the Centers for Tackling such challenges fac- The Engelberg Foundation under- also joined with academic leaders. Medicare and Medicaid Services, ing the U.S. health care system as wrote the center’s operational One such collaboration this year McClellan was also a member of access, quality, and finance, the activities for the first five years. was with the Dartmouth Center for the President’s Council of Eco- center seeks practical solutions that An endowment gift established the Healthcare Policy Research and nomic Advisers, a senior director can transform the problem-riddled Leonard D. Schaeffer Director’s Reform, headed by Dr. Elliott Fisher. for health care policy in the White system into one that is high-quality, Chair, to which McClellan was The new joint Brookings-Dartmouth House, and a deputy assistant sec- innovative, and affordable. appointed. Program in Health Policy Research retary of the treasury. n As part of the Economic Studies McClellan acknowledged the is linking Dartmouth’s population- 8 Restoring Fiscal2007: Restoring Sanity ity the in books seminars. media and Brookings, at forums public Congress, of members former with meetings private included events Other media. local the and leaders, community and ness busi- politicians, local including city,each in people of hundreds reached and cities 20 than more in issues budget on forums local Wake-UpTourheld year this Fiscal Its debt. growing and ics demograph- changing of because ahead choices budget tough the on consciousness national raise to continued project (BNP) orities Pri- National for Budgeting The taxFiscaland Policy policies.publicby shaped are them, among links the and outcomes,theseassessedhow also Burtless income. household earningsand as well leisure,as care-giving,and personalcare, familyavailablefor includingtime well-being— family and individual indicatorsvariousof and work paid in spent time between links analyzedthe workers.He older andemployedparentsgroups: importantdemographictwo on interdisciplinaryanfocusing study WhiteheadChair, contributedto D. Nancyand C. John theless, schools. high military public and Guard YouthChalleNGe Program, careeracademies, Nationalthe training,JROTCJROTCand basic including training, military quasi- and military to approaches PriceHughexaminedlow several May.in published Fel-was Senior StrugglingLife,”Schoolinandin Educatingfor StudentsWho Are YoungPeople: Paradigm New A tagonKnowsaboutDeveloping series, the most recent being recent most the series, BNP has now published three published now has BNP FellowBurt- Senior Gary Pen-the What “Demilitarizing Restoring FiscalRestoring San- troversial policy options into options policy troversial new,introduce con- sometimes doctrine—to and ideology not evidence, and experience on based States—ideas United the throughout thinkers economic ing lead- from ideas policy innovative several year,forward second put its in now Project, Hamilton The ProjectHamiltonthe media. the in and Hill Capitol on heard repeatedly was (AMT) tax minimum alternative individual the for replacement progressive simple, a for push center’sThe subscribers. 3,000 than more to newsletter tronic elec- an of issues 20 e-mailed and options, reform tax of range wider a of analysis allow to model lation simu- its expanded tables, bution distri- 324 and commentaries and publications 52 produced TPC alone, year.2006 visible In highly another had Institute, Urban the and Brookings of venture joint a programs. eral fed- means-tested in tests asset the reforming and taxes, income federal of refunds split menting imple- inflation; for indexed and refundable saver’scredit the ing mak- automatic; saving retirement making including issues, policy of number a targeted has Project Security Retirement the workers, of millions American of prospects income retirement the improve to solutions common-sense William aide sional Hoagland. congres- Republican former and Stenholm Charles and Frenzel Williamrepresentatives former with co-authored Sawhill Isabel which “TamingDeficit,” ing the includ- deficit, the on series five-paper a released recently also project Joseph The scholar Antos. and by Rivlin AEI edited Alice Challenge, Spending Health The The TaxThe Policy(TPC), Center promoting to Dedicated

Ralph alswang regulatory policy,regulatory particular with on work their continued ston Win-Clifford and Litan, Robert FellowsCrandall, Senior Robert RegulatoryPolicy ideas. policy to contributions specific the and ect proj- the of philosophy economic overall the both including media, national major the of all in cussed dis- and cited frequently been has more lege effectively. privi- tax would tax inheritance an with tax estate the replacing that UniversitySchool ofLaw wrote LilyBatchelder atthe New York Gale—and Bill Director Studies alsochampioned byEconomic return-free through idea filing—an reducing America’staxburden suggested Chicago of University the at reform. Goolsbee tax Austan numerouspapers this spring on published Hamilton Brookings, of outside experts respected of tives sharing. cost any have not would families low-income costs; health their of percentage certain a pay to families typical require cost-sharing sive would that plan progres- a proposed that year this paper discussion a authored Furman Jason Director issues. breaking on all papers, dozen two than more published has project coverage. health universal for options to insurance unemployment expanding to approaches alternative from range that topics on ideas conflicting sometimes of span diverse a ents pres- project the independence, debate. for national Aiming the director of the CongressionalOffice.directorthe Budgetof Holtz-Eakin,former Douglas and (left) Burman TaxCommitteewith CenterDirectorPolicyLeonard WaysMeanstestifies Housebefore and the ProjectFurmanDirectorHamiltonJason (center) The Hamilton Project’swork Hamilton The perspec- the featuring Often the years, two than less In tation system. tation transpor- intercity and urban the of efficiency the on focuses work Winston’sResearch. Markets ital Cap- of Institute Nomura the and Brookings by jointly sponsored 2006, September in held services financial on conference Club Tokyoannual third the marizing Policysum- and Challenges, ties Opportuni- Institutions: and ments published co-editor YasuyukiLitan Fuchita, Withsectors. telecommunications and financial the on emphasis aggregate economy.aggregate the for as well as services and industry,agriculture, of sectors three the for productivity factor total and labor,education, capital, of contribution the of estimates produces that framework ing account- growth simple a using India and China of performances economic recent the compared ratesofsaving andinvestment. national of balances shifting the graphicchanges inaccounting for demo- of influence the explored estaround theworld. Theproject inter- of rates low unexpectedly dropinthe rate ofinvestment, and the in change significant more a tries,recent global trends show coun- industrial of rate savings the analyseshadprojected surgea in globaleconomy. While earlier the of regions major across ment invest- and saving of distribution examinedrecent changes inthe ChairinInternational Economics, whoholds theRobert V. Roosa SeniorFellow Barry Bosworth, economics internationalmacroand Bosworth and Susan Collins Susan and Bosworth New FinancialNew Instru- n 9

global trade negotiations. tradenegotiations. global ofRound Doha the futureof the on briefing Organization(WTO),privateBrookings a for Lamy,director-generalWorldTrade the of PascalDevelopment,Economyjoins and Global directorBrainard,presidentofand viceLael

ShAroN FArMer t Development and Global Economy below. videdplatforma forhighlighting many ofthe research projects outlined pro- also forum The each. for recommendations policy specific offered report,which ranked themost pressing global economic issues and theforum, Global released itsfirst Top 10Global Economic Challenges acrossthespectrum ofeconomic anddevelopment issues. Aspart of Forum,which spotlighted thetop international challenges forthe year and risks benefits.” the of understanding enhanced through globalization of potential and recommendationscanhelp leaders here andabroad harness thepower “We policy Economics. our International believe in Chair Schwartz L. presidentanddirector ofthe Global program andholder ofthe Bernard createdbyanincreasingly globalized world,” said Lael Brainard, vice toshape thepolicy debate onboth theopportunities andchallenges bordersandacross issues. Through comprehensive research, wework percentexpansion ofthe global labor force—has ledto greater economic 70 associated the India—and and China of emergence the that case the considertheTrade Adjustment Assistancelegislation, Brainard made economy.For example, asthe Senate Finance Committee geared upto tohelp theUnited States maintain itsleadership position inthe global alsandalso generated media interest aspolicy-makers sought newideas propos- policy Hill Capitol shape helped hearings congressional of series jobs. displaced permanently for unemployment, wouldensure qualified workers areprotected against wage loss, notjust tionimpacts. This legislation includes wagea insurance program, which globaliza- other and offshoring to due jobs their lost have who workers uncertaintyandproposed legislation that would expand federal aidto andspecialization. Onthe U.S. policy side, Congress took note ofthis rityofmany U.S. workers through intense economic global integration insecu- economic the to contributed also has it ways, many in economy Whileglobalization hashelped transform andstrengthen theU.S. EconomyGlobal a Competingin OneofGlobal’s newest offerings this year wasthe Global Agenda Brainard’s innovative wage insurance proposal and her testimony at a a at testimony her and proposal insurance wage Brainard’sinnovative powers,andthe road outof poverty. ersofthe global economy, therise ofnew economic driv- key the on thinking innovative of source preferred whichitsexpertise onglobalization hasbecome the ingsresearch program marks perioda ofgrowth during Brook- fifth the as anniversary one-year its of ebration Program’scel- Development and Economy Global he “Global focuses tightly on ideas that matter,that across ideas on tightly focuses “Global 11 12 GLOBAL ECONOMY ANDDEVELOPMENT furtherBrookings’s agenda onthe recruitinginternational talent to in strides important made Global PowersNewof Rise The critical institutions. governanceapproaches forthese new debated and sought leaders quotedextensively asinternational Bryant,andKen Rogoff were all Ralph Rieffel, Lex Linn, Bradford, transitions. leadership unexpected experiencedhighly visible and boththeWorld Bank andthe IMF subjectofgovernance reform as the on experts Global by citations withseriesa ofhigh-profile media systems. governance economic adapting for recommendations policy detailed contained that ume vol- edited influential an published and Worldyear and last IMF Bank siesand national delegations to the embas- various from resentatives rep- with seminars of series profile high- a convened Bradford Colin and FellowsLinn Senior Johannes ertyreduction, and energy security. pov- integration, financial global as tomeet such important challenges inadequate proving governance—is WorldIMF the and to Bank G8 economicgovernance—from the experts. Global other of work ongoing the through and tion, Worldthe on Tradebook Organiza- residence,who is working on a Pauljournalist-in- of Blustein, tradeportfolio with the arrival globalization. of lines front helpsmall businesses adjust tothe effectivesetof policies that would an proposing by challenge the with mitteeonSmall Business grapple Com- House the helped Brainard competitiveness. Additionally, safetynetto enhance American specificchanges tothe nation’s for need the underscored she uncertaintyforU.S. workers, and Thiswork wascomplemented global of system current The Globalenhanced its strong interest in both countries. both in interest strong generates and discussions Indianpolicy-makers atthe Delhi forumcontinues toinvolve top leadersinthe United States, the multinationalcorporations and mentandstrong interest from govern- Indian the in influence With strong reform. and policies education,microfinance, andland economy,political the on research specific with economy Indian the in trends current on focused inNewDelhi forthe third year, ledbyBarry Bosworth andheld security.mental environ- for technologies energy revaluation,andutilization ofnew currency liberalization, services ingandtransparency, financial open- markets capital greater on partnership through relationship enhancethis significant economic Thebriefing focused onways to EconomicDialogue meetings. theadministration’s Strategic of advance in May in experts andThornton China Center economicpriorities with Global PaulsonU.S.-China discussed Brazil. on research specialized suingcross-BRICs work aswell as pur- is and Oxford from Brookings Leonardo Martinez-Diazjoined omist.Political Economy Fellow econ- Indian resident a as serve to inWashington inthe fall of2007 Indiaandjoined Global full-time regardingenergy-sector reform in research on Patelworking Urjit is economy.India Economics Fellow andworkshops onthe region’s Asia,leading high-profile briefings butalso inSoutheast andEast workforward notonly onChina, WooWingThye Global’s propelled Trade Economics national and Inter- in Chair Century New and sia,India, China). Senior Fellow Rus- (Brazil, BRICs the on focus emergingpowers, with specific The 2007 India PolicyIndia Forum,2007 The U.S.Treasury Secretary Henry a strong framework for analyzing analyzing for framework strong a establishedin2006 andhas built HealthFinancing Initiative was Global Foundationthe grant, Gates Melinda & Bill substantial globalhealth issues. Funded bya developeddeepera portfolio on reducingpoverty grow, Global and health maintaining between Easterly. mist;andrenowned economist Bill Worldformer econo- Kharas, Bank isteroffinance inMexico; Homi Levy,Santiago min- deputy former Nigeria(see Ngozi, page 13); formerminister offinance for includingNgozi Okonjo-Iweala, numberofdistinguished experts, Additionally,Global brought ona theBrookings Blum Roundtable. and Initiative, Financing Health Global the Development, for ter Wolfensohnthe on Cen- efforts withinthelast year, focusing its globalpoverty research agenda Globalhasdeveloped robusta Poor the ofLives Improving the practitioners. and media, academics, policy-makers, of audience an attracted fall the theEconomy,” held inMoscow in Series,“The Role ofthe State in Conference China-Russia 2006 anddeveloping countries. The basedthink tanks intransition researcheconomic leading of alliance strategic a is Institute FellowErik Berglöf, theGlobal Senior by led and Economics tion Transi-of Institute Stockholm the Asthecritical linkages with partnership in Launched est youthpopulation,est accounting world’slarg- the of emergence the region’sthe pressingmostissues: challengeaddressingby of one development second-generation importantvisibleandstridesa on East YouthInitiative—has made primaryinitiatives—the Middle Center’sthe of One tiveness. effec- development increasing at researchglobalpovertyon aimed implementingprogramcoreofa Developmentfor continues policy-makers. key recommendationsforreform to offering traction, policy enhanced nationalStudies, 2006) further Inter- and Strategic for Center the and Press Institution (Brookings Povertyand Leadership American Means:Foreign Assistance,Global of publication reformingtheU.S. system. The analysisandpolicy counsel on ReformProject, offered extensive seniormanager ofthe Foreign Aid Unger,Noam and Brainard Lael Washington’s debate. aid foreign remainedleadinga voice in Foundation, Hewlett Global the financingproposals. atecurrent andpotential health evalu- who Griffin, Charlie and economists AmandaGlassman teamofexperts, including health Ferrantia Fellowde leads David impactofglobal health aid. Senior theeconomic efficiency and canbest supplement andimprove tohelp determine which proposals instruments financing innovative February2007. ForumAgenda Global in the powers economicat rising Thyethe WingWoodiscuss Chair Century EconomicsFellowNewIndia and Patel(left) Urjit The WolfensohnThe Center Withcritical support from SecuritybyOther

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peter krogh Brookings’sAfrican Ngozi T researchprojectswere and briefings public issues.Okonjo-Iweala’s financing health global accountability,and and transparencyfinancing, sectorsocial in nance goverand corruption Africa,reformin issues researcheconomic on focusedIwealaher powerfulvoice. Global’sAfricaportfolioa developmentgaveand ity parency,accountabiland - transnegotiations, debt Nigeria’sfiscalreforms, achievementson ing Okonjo-Iweala’soutstand - fellow.distinguished a as foreignaffairs Nigeria, for ministerof and finance ministerformerof the Okonjo-Iweala,Ngozi Programment welcomed At Brookings,AtOkonjo- and Developand - EconomyGlobal Brookings’s year,past his Okonjo-Iweala Deepens - - intellectualstimulation with providedme has and yearpast this me to home wonderful a been has “Brookingssaid:Iweala Okonjo-appointment, her ofannouncement the ing 2007.December Follow in beginning institution directorthe ofmanaging president,a becometo Zoellick,WorldBank Robertbyappointed wasshe yearas this recognized further evercoulddo.” cruncher number any economiesforward than movetomoreAfrica’s “done has heads”who “levelthe of one as noted Fairwas’sand Africa issue featuredalso in briefings. and speeches, interviews,media for drawingconstant requests Washingtonfollowing, stronga of subject the Her leadershipwasHer Okonjo-Iwealawas Vanity - P in 2004 and receivedand 2004the in Year”the of“Hero zine a selectedas Okonjo-Iwealations,was operaand - financing ment accountabilitygovernto - ness,transparency, and open- effortsbring to ForWorldBank. the her presidentviceofwas a Okonjo-Iwealament, governNigerian - the for work her to Prior Nigeria. in position either hold to firstwomanwasthe She foreignaffairs minister. the as then ministerand finance the first2006,as 2003fromtoment governNigerian - the in Brookings.” futurecollaboration with forwardlook and toily famBrookings the - of alwaysshall part remain development.ofissues I about thinking people best the of some with workto opportunities and erspective Okonjo-Iwealaserved maga- TIME trations must address.trationsmust adminis futureNigerian outstandingthat issuesof number a identified and measuresimplemented, majorlinedpolicythe reforms,economic out recentexperience with examinedIwealaNigeria’s Challenges,”Okonjo- Reforms:Progress and titled“Nigeria’s Economic workingherIn paper governanceand reforms. institutionalconduct and expendituremanagement, reforms,strengthen public structuralpursuement, macroeconomicenviron - improveto agenda the comprehensivereform a embarkedon Nigeria stagnation,economic University2006. in BrownLawsbydegreeof honoraryDoctoran with was2003.honoredShe Courageand in Visionfor EuromarketForum Award Followingyearsof - n - 13

Governance Studies

ven before the new Congress was sworn in, Senior Fellow and W. Averell Harriman Chair in American Governance Thomas E. Mann led a distinguished panel of experts in the substance and politics of the initial “100-hour” agenda of the new Democratic majority. Offering analyses early and fast is what has distinguished the Governance Studies Program from other expert commentators in a city that trades on Einformation and respects well-honed knowledge. Besides providing extensive insights in the months leading up to the 2006 midterm elections, Governance Studies forged ahead this year under a clearly defined mission to foster scholarship that improves the U.S. electoral process, “depolarizes” the party system, ensures the health of the judicial branch, balances constitutional protections with security interests, and upgrades the nation’s educational institutions. Under the leadership of Pietro S. Nivola, vice president and director of Governance Studies and the holder of the Douglas Dillon Chair in Governmental Studies, the program launched major projects examining partisan politics, electoral reform, and judicial challenges. This year, Governance Studies experts published nine books, which were often featured in the national press. The program’s experts also produced Brookings Policy Briefs, inaugurated the Issues in Governance Studies series with eight papers, and authored dozens of magazine articles, cover stories, and op-eds. “I am grateful for the support Brookings has given my efforts to strengthen Governance Studies,” Nivola said. “Our work continued to inform the public debate on important questions of politics and policy, and not just for the near term but also the longer haul.” Governance Studies fellows played key roles in congressional outreach, including giving congressional testimony and serving on one of the President’s major national task forces on education policy. Three scholars were awarded professional prizes, two by the American Politi- cal Science Association.

A Nation Divided The program continued its flagship project, a comprehensive study conducted jointly with the Hoover Institution at Stanford University on the sources and implications of partisan polarization in U.S. poli- Pietro S. Nivola, vice president and director of tics. With contributions from the nation’s leading scholars and experts, Governance Studies, moderates a panel with the project released Red and Blue Nation? Volume I: Causes and Char- Senior Fellows William Frenzel (left) and William acteristics of America’s Polarized Politics, co-edited by Nivola and David

A. Galston on how President Bush’s 2007 State A lswang of the Union Address will shape the last two W. Brady (Brookings/Hoover, 2006). Choice magazine cited the vol-

years of his term. Ralph ume as one of the year’s “outstanding academic titles,” and thousands 15 governance studies

of copies have been ordered newsletter subscriber base to for more than 200 university more than 3,000. course adoptions. With support Other election reform proj- from the John D. and Catherine ects highlighted the program’s T. MacArthur Foundation, the commitment to electoral scholar- Carnegie Corporation of New ship and impact. Visiting Fellow

York, and the Rockefeller Broth- Michael McDonald’s book, The Illinois Rep. Rahm ers Fund, contributing authors Marketplace for Democracy: Elec- Emanuel (left) chats convened a dozen public events toral Competition and American with Senior Fellow Thomas Mann at a around the country. Politics (Brookings, 2006), co- Brookings event on

Governance Studies hosted edited with the Cato Institute’s politics and government. r m er on Fa

various other activities sub- John Samples, was unveiled S ha r stantively aligned with this at a briefing on Capitol Hill in “What Should Be the Future of Global Warming is Over” for Brookings-Hoover partnership. September 2006 to considerable the Death Penalty?” Issues in Governance Studies. The For example, three of the project’s interest. Mann is also due to latter article provided the basis contributors—Senior Fellows E.J. release Redistricting: A Guide for Issues of the Future for a subsequent New York Times Dionne Jr. and Thomas Mann, Reformers, which is targeted at Governance Studies considered op-ed piece, followed by various and Visiting Fellow Peter Bein- citizens nationwide who may be how the political process might television appearances and finally art—published books on closely interested in the mounting efforts begin to look beyond the next the Atlantic Monthly cover story related topics. Beinart’s The Good to reform the congressional redis- election cycle, addressing the big- in April, “Hot Prospects.” Fight (Harper Collins, 2006) tricting process in certain states. gest domestic policy challenges The changing intersection of probed the Democratic Party’s that lay on the horizon. Senior religious life and public policy travails in fashioning a coher- Studies of Justice and Law Fellow Sarah Binder presented a has also warranted closer study. ent and forceful stance in for- Amid the current debate over paper, “Can Congress Legislate As E.J. Dionne commented at a eign affairs. Mann’s The Broken balancing liberty and security in for the Future?” at a discussion Brookings briefing this year on Branch (Oxford University Press, the war on terror, a broad con- with former Sen. Tom Daschle American Politics and the Reli- 2006), co-authored with Nor- sensus has emerged that legal and Nonresident Senior Fellow gious Divide, the new splits man Ornstein of AEI, described governance of this arena needs to Paul C. Light. As part of Senior are within the faith traditions dysfunctional consequences of be revised. Newly hired Fellow Fellow William A. Galston’s work themselves. arch-partisan strife in Congress. and Research Director in Public that will suggest ways of refor- Dionne’s co-edited volume, Is Law Benjamin Wittes heads the mulating the American welfare Educating America There a Culture War? A Dialogue Brookings effort to explore and state’s “social contract,” Galston Governance Studies incorporates on Values and American Public propose specific reforms that will published “Reviving the Social the activities of the Brown Center Life (Brookings, 2006), was the help place the war on terror on Contract: Economic Strategies to on Education Policy—one of the latest installment of the Pew a more solid legal footing for the Promote Health Insurance and country’s most reliable, indepen- Forum Dialogue Series on Reli- long term. Long-Term Care” for the Brook- dent sources of scholarly research gion and Public Life. Securing the independence ings Opportunity 08 project. on the problems of the nation’s of the judicial branch continues With the climate policy public elementary and secondary A Nation at the Polls to be a key topic for Governance debate heating up, Governance educational system. Under the With support from the John S. Studies, as illustrated by the April Studies experts made valuable direction of Senior Fellow Tom and James L. Knight Foundation Issues in Governance Studies brief, contributions to the public dia- Loveless, who holds the Herman and The Cabot Family Charitable “Judicial Independence and Judi- logue. Nonresident Senior Fellow and George R. Brown Chair in Trust, the Election Reform Proj- cial Accountability in the 110th Barry Rabe of the University of Education Studies, the Brown ect, headed by Mann and Nor- Congress and Beyond,” authored Michigan authored “Second Gen- Center continued its work on man Ornstein of AEI, continued by Russell Wheeler, Brookings eration Climate Policies in the the controversies over school and to synthesize existing research on guest scholar and director of the American States,” and Visiting class sizes, the role of charter the conduct and administration Governance Institute. The Judi- Fellow Mary Graham and Elena schools, and the state of math of American elections, and to cial Issues Forums, moderated Fagotto of Harvard University’s education. encourage improvements in the by Nonresident Senior Fellow Kennedy School of Government The center also convened system. The project, in its second Stuart Taylor Jr., had another co-authored “Reducing Green- a major conference at Brookings year, expanded its Web site good year, with widely attended house Gases Now.” Visiting Fel- in the fall, comparing the out- (www.electionreformproject.org) panel discussions on such topics low Gregg Easterbrook wrote comes of mathematics education and increased its bimonthly as: “Are Judges Political?” and “Case Closed: The Debate about internationally. n 16

Opportunity 08: The Countdown Begins

oters say they want to the project serves as a forum to Besides the launch event, pro- American political drama. In Reno, hear more from candi- discuss solutions to America’s most vocative public forums were held on Nev., in August, U.S. Sen. Joe Biden dates about the issues pressing policy challenges. The climate change, the future of the mil- and New Mexico Gov. Bill Richardson and less about par- papers were largely authored by itary and national security, and con- participated in a Democratic issue tisan politics. Ameri- Brookings’s leading experts on these necting the 2008 campaign to youth forum, which explored education and cans are increasingly topics, but also include papers by voters. Brookings Managing Director competitiveness. A Republican forum Vdemanding more than sound bites. partners at other institutions. The Bill Antholis and ABC News’s Rick two days earlier explored democracy They’re looking for forward-looking, papers and fact sheets are featured Klein moderated the climate change and foreign policy. fresh, constructive ideas, and imagi- on our Web site. A select number forum, which featured both Brook- Health care and the budget was native but realistic solutions to the will be released later this year as ings experts and advisors to Demo- a spotlight at a September forum pressing issues of the day. an edited volume by the Brookings cratic and Republican candidates. in New Hampshire. Looking ahead, The 2008 election is a rare thing Institution Press. At another forum highlighting how an Opportunity 08 event on energy in American politics: It features both The public component of the candidates propose to move forward is planned for Iowa in October and wide-open primaries in both political project was launched in February in the struggle against terrorism and a forum on national security is parties and the guarantee that there at an event moderated by ABC’s extremism, experts tackled national planned for Las Vegas in November. will not be an incumbent president George Stephanopoulos and Torie security. A fourth event focused on competi- or vice president in the general Clarke. The session featured a spir- Moving outside Washington, the tiveness and trade—two issues vital election. That means this election ited discussion on why and how project has targeted battleground to South Carolina’s economy—is set will provide a unique opportunity in issues will matter in the upcoming states, which are focal points in the for Charleston in January 2008. n modern times to discuss solutions presidential election. It showcased to America’s most pressing policy policy ideas on three pressing inter- Senior Fellow Isabel V. Sawhill discusses the budget deficit and the soaring costs of health challenges. national challenges—Iraq, China, and care at an Opportunity 08 issues forum at Saint Brookings launched Opportunity the broader Middle East. Anselm College in Manchester, N.H. 08 this year as a policy platform to Opportunity 08 is guided by help the candidates and the public a bipartisan advisory commit- focus on critical issues facing the tee chaired by Brookings trustees nation. Marrying quality research Kenneth M. Duberstein and Thomas with new outreach strategies, the E. Donilon. “This year’s campaign is project includes targeted publica- starting earlier than ever and candi- tions, policy forums, a media part- dates are searching for new policy nership with ABC News, and public ideas,” Donilon, a Democratic presi- discussions in key states. dential adviser for more than 20 As with all Brookings efforts, years, said. “I fully expect this to be the project starts and ends with an exciting, substantive race.” high-quality research. Opportunity “If this campaign is about ideas 08 features papers from Brookings and issues, people will engage,” experts on more than 30 domestic said Duberstein, an adviser to every and foreign policy issues, including Republican president since Nixon. tax policy, energy security, the defi- “Iraq is the main issue now, but if cit, and Iraq. candidates are going to maintain Under the able leadership of momentum, they will have to specifi- Michael O’Hanlon, a senior fellow in cally explain how they’re going to

Brookings’s Foreign Policy Program, make America different and better.” hu r Art Du r i t y

From 1928 to 2008 o find such an open since he and Coolidge had parties’ nominations were a stab at the nomination and apart from every other election election as 2008, you feuded since nearly the begin- wide open. lost. Gov. Adlai Stevenson won in the last 80 years—is that the T need to go back to ning of their term in office. The closest to such a wide- the Democratic nomination, and national dialogue was not about 1928, when President Calvin As a result, neither the sitting open election was that of 1952. proceeded to lose (badly) in the the policies of the incumbent Coolidge chose not to enter the president nor his vice presi- While fighting an unpopular national contest to Gen. Dwight administration. Instead, they race, saying that “Ten years dent sought the White House, war in North Korea, President D. Eisenhower. were contests about the future. in Washington is longer than though both were eligible to Harry Truman lost the New Though both those elec- That provided an opportunity any other man has had it—too run. Without an incumbent Hampshire primary and decided tions ended in Republican for the nation—and in the case long!” Coolidge’s vice president, president or vice president in not to run for office. His vice landslides, what they have in of 1928, for both parties—to Charles Dawes, also declined, the race, the contests for both president, Alben Barkley, took common—and what sets them look forward, not backward. n 17 Carlos Pascual (left), vice president and director of Foreign Policy, confers with Sen. Joseph R. Biden Jr. of Delaware before a “Conversation on Iraq”at Brookings in February. Foreign Policy

n a year marked by escalating international conflict, global challenges and opportunities, the Foreign Policy Program remained at the forefront of almost every major policy debate and challenge. “Foreign Policy experts have made a difference—sometimes affecting better outcomes, in other cases creating checks and balances on official policy, and always seeking to define a better course,” said Carlos Pascual, vice president and director of Foreign Policy and holder of the Charles W. Robinson Chair in IForeign Policy. The Middle East Challenges and Diplomacy Brookings remained at the forefront of applied policy research on the Middle East under the guidance of Martin Indyk, former U.S. ambassador to Israel and director of the Saban Center for Middle East Policy. The Saban Center boasts top analysts in Senior Fellows Daniel Byman, Kenneth Pollack, and Tamara Cofman Wittes. This year the center welcomed Suzanne Maloney, a political and economic expert on Iran, and Bruce Riedel, an expert on the Middle East, South Asia, regional diplomacy, and counterterrorism. The Saban Center brought together more than 60 high-level, bipartisan American and Israeli officials and opinion leaders for its third annual Saban Forum in Washington, D.C. Featuring Israeli Foreign Minister Tzipi Livni, former President Bill Clinton, and Israeli Vice Premier and former Prime Minister Shimon Peres, the forum shed light on the key issues in Israeli-Palestinian relations. Iraq remained a central issue for Foreign Policy. Brookings experts offered creative approaches to such challenges as brokering peace, managing a soft partition of Iraq, and containing the regional spillover of war. In May 2007, The Washington Quarterly published an article co-authored by Pollack and Pascual on “Political Reconciliation and Reconstruction in Iraq,” outlining the rationale and path for a diplomatic track that has been largely ignored. And following a trip to Iraq, Senior Fellow Michael O’Hanlon, holder of the Sydney Stein Jr. Chair in International Security, and Pollack argued that progress is being made there in a New York Times op-ed that created a buzz on Capitol Hill, in the Bush administration, and among the 2008 presidential candidates. The arguments by O’Hanlon and Pollack underscore the gap between military and political progress in Iraq, focusing attention on the question of what can be sustained militarily without a diplomatic effort to attempt to broker peace. The Iraq Index under O’Hanlon remained the most effective independent guide tracking progress and failure in Iraq. And Brookings hosted House Majority Leader Steny Hoyer of Maryland and Sens. Joseph Biden of Delaware, Chuck Hagel of Nebraska, and Jack Reed of Rhode Island to examine the situation in Iraq and its implications. Pascual, O’Hanlon, and Senior Fellows Dan Byman, Ivo Daalder, A lswang Philip Gordon, Susan Rice, and Peter Rodman—who joined Brook-

Ralph Ralph ings this year after serving as assistant secretary of defense for 19 foreign policy

between security and develop- Huang, Cheng Li, Wing Thye ment and raised awareness Woo, and China Energy Fellow among members of Congress and Erica Downs authored a number other policy-makers about the of important policy analyses and importance of state weakness to original pieces of research. U.S. national security. The Center for Northeast Brookings experts delved Asian Policy Studies remained into the controversial leadership a recognized leader in research of Pakistan’s President Pervez and analysis of Northeast Asian Musharraf—and implications for politics, demonstrating particular the United States—as the war expertise on the political standoff on terror continued. In testimony between China and Taiwan, the before Congress, Senior Fellow North Korean nuclear crisis, and Gen. David H. Petraeus, before being named commander of Multi-National Stephen Cohen argued that the the evolving U.S.-South Korea Force–Iraq, briefs a Brookings audience United States made a strategic relationship. Under the leader-

on transforming military training in r me on Fa mistake in basing our Pakistan ship of Richard Bush, who holds September 2006.

S ha r policy on President Musharraf, the Michael H. Armacost Chair international security affairs in Countering Transnational stating the United States “needs in Foreign Policy Studies, the the Bush administration—con- Threats to change the nature of the center operated a leading intel- tributed to the leading analyses Brookings launched the 21st relationship with a state whose lectual exchange program, hosting and recommendations on top- Century Defense Initiative collapse would be devastating to long-term visiting fellows from ics that included containing the (21CDI) this year with a speech American interests.” China, Hong Kong, Japan, South spillover effects of an Iraqi civil by Gen. David Petraeus, weeks Foreign Policy experts also Korea, and Taiwan. war, the role for the U.N. in Iraq, before he was named commander contributed to a Brookings-wide Lebanese public opinion, the of U.S. forces in Iraq. Directed energy initiative, producing crucial The Changing International Iraq Study Group, transforming by Senior Fellow Peter W. Singer, insights into the role of energy in Political Landscape military training, containing Iran, 21CDI hosted over 20 events that American and international secu- Foreign Policy launched a major and the Israeli-Hezbollah war in scrutinized the conduct of today’s rity decision-making and other new initiative called Managing Lebanon. wars and examined ways to pre- issues, including U.S. oil depen- Global Insecurity: American Lead- The Brookings-Bern Project pare America for future conflicts. dence, energy security in China, ership, International Institutions, on Internal Displacement, led by Brookings Senior Fellows Dan- Russia’s role in the world energy and the Search for Peace in the new Co-Director and Senior Fel- iel Benjamin, Riedel, and Singer economy, and the interface of 21st Century, with a speech by low Elizabeth Ferris, spearheaded launched a series of roundtable climate and energy policy. Senior Javier Solana, secretary general a new report titled “Iraqi Refu- discussions with leading experts Fellow David Sandalow’s book on of the Council of the European gees in the Syrian Arab Republic: and counterterrorism practitioners; U.S. oil addiction proposes a com- Union, in March. The project A Field-Based Snapshot,” which their work has underscored the prehensive plan for reducing oil focuses on reforming the United addresses how increasing sectar- complexity of the terrorist threat, dependence over a generation (see Nations and other multilateral ian violence in Iraq spawned a particularly its decentralization Strategic Plan, page 37). institutions as a crucial means to massive displacement of Iraqis. through al Qaeda affiliates emerg- address security challenges like At a time of great tension ing especially in North Africa and China’s Transition and nuclear proliferation, conflict, between the United States and the Middle East. Challenges in Asia bio-security, and energy and envi- the Islamic world, Brookings Gordon’s book, Winning the With China emerging as a major ronmental sustainability. also focused attention on the Right War: The Path to Security economic power and playing a The Center on the United vital need for frank and open for America and the World, probes growing role in the global com- States and Europe (CUSE) dialogue between Muslims and deeply into the so-called global munity, the John L. Thornton continued to offer a forum for non-Muslims at the 2007 U.S.- war on terror, forcing a look China Center, directed by Senior a richer understanding of Euro- Islamic World Forum. Spear- behind the rhetoric into what Fellow Jeffrey A. Bader, provided pean affairs and strengthened headed by Stephen Grand, the drives terrorist groups, while timely and independent analy- the dialogue about matters of forum covered issues ranging extracting from the Cold War les- sis, dialogue, and public policy common interest to Europe and from the Palestinian-Israeli con- sons that can inform the long-term recommendations. In addition America. Led by new director flict, Iraq, Iran, and Lebanon, to ideological battle against terrorism. to numerous articles, interviews, Daniel Benjamin and research the respective roles of religion Senior Fellow Susan Rice and media appearances through- director Jeremy Shapiro, the cen- and government. examined the relationship out the year, Senior Fellows Jing ter produced an array of books, 20 Brookings Goes Global rookings opened a center energy security, promoting healthy ship between an American think tank this year in Beijing and trade, protecting the environment, or and the Muslim world. is now opening one in preserving peace itself, the futures “The purpose of the Center B Doha, marking the first of the American and Chinese people will be to continue to expand the monographs, articles, and the time in Brookings history that the are increasingly intertwined. The rise Brookings tradition of independent, Web-based U.S.-Europe Analy- think tank has established facilities of China is likely to weigh heavily in in-depth research and quality public sis Series, and convened more outside of Washington. The Beijing shaping the geopolitics—and geo- policy programs to Qatar and the than 20 policy roundtables with and Doha centers play a key role economics—of the 21st century.” broader Muslim world through a true high-profile speakers, including in establishing Brookings as a truly The Beijing base will facilitate partnership between the oldest and the semiannual DaimlerChrysler global organization by creating a U.S. and Chinese scholars working largest American think tank—Brook- Forum on transatlantic relations. permanent overseas presence and independently and collaboratively on ings—and a visionary Muslim state— As Turkey prepared for on-the-ground research capability challenges facing China’s develop- Qatar,” said Hady Amr, the director presidential and parliamentary for Brookings experts. ment and U.S.-China relations. The of the Center. “In doing so, it will elections, Foreign Policy began Located on the campus of project will disseminate research seek to forge a lasting partnership a new review of the key role the Tsinghua University, the Brookings- findings in Mandarin and English. between the leading policy-makers country will play in regional and Tsinghua Center in Beijing brings “China, with a population of more and scholars of the United States, international security. Under the together scholars from Brookings than one-sixth of the world, has a and those of the Muslim world.” leadership of Mark R. Parris, a and China in collaborative work surging economy and an increas- The Doha Center is a project of former ambassador to Turkey, to increase the understanding of ingly proactive diplomatic strategy,” the Saban Center for Middle East the project brought prominent China’s growing influence on the said Xiao Geng, the director of the Policy at Brookings, which also Turkish experts and officials to world stage. The office was estab- Brookings-Tsinghua Center. “The houses its Washington counter- Washington for discussions on lished through the generosity of Brookings-Tsinghua Center is com- part—the Brookings Project on U.S. Turkey’s future and implications John Thornton, chairman of the mitted to being the ‘go-to’ place for Relations with the Islamic World. for Europe and the United States. Brookings Board of Trustees and the research and policy recommenda- Leading scholars and visiting fellows Senior Fellow Clifford Gaddy founding donor of the Institution’s tions to help U.S. and Chinese lead- at the Center will conduct indepen- focused on Russia’s economy recently launched John L. Thornton ers address long-term challenges like dent research on socioeconomic and and politics. Gaddy helped shape China Center. energy security, political and eco- geopolitical issues facing the Muslim thinking both inside and outside “Thirty years after the death nomic reform, and China’s regional world. The Center will also host Russia on that country’s long- of Mao, China is an economic and global security interests.” forums, workshops, and seminars to term development. powerhouse, a key member of the The creation of the Brookings inform the public policy debate on In April, in partnership with United Nations Security Council, Doha Center will realize the vision of these issues and will help convene the Cuba Study Group, Brookings and a world leader,” Thornton said. establishing a center for scholarship, the annual U.S.-Islamic World Forum hosted a conference to create a “Whether the issue is ensuring dialogue, and an influential partner- in Doha. n framework for policy change in Cuba. The discussions centered on policy options to empower Cubans within Cuba to act on opportunities to promote change from within. Since 2003, the conflict in Darfur has worsened, showing no signs of improvement. Brookings kept attention focused on one of the worst humanitarian disasters in the world and stimulated solutions to the crisis. Both Ferris and Susan Rice helped guide the political debate on policy options for Darfur by considering the role of U.N. peacekeeping forces, U.S. policy alternatives, and the gap between global public opinion and the seeming paralysis of the international community to respond to massive and well- chae ff e r documented violations of human S China Study Tour participants mingle at a reception

rights. n Jac in the Forbidden City in Beijing. Bruce Katz, vice president and director of the Metropolitan Policy Program, listens to a presentation on the renewal of the Great Lakes region, a cornerstone of the new Brookings Blueprint for American Prosperity. Metropolitan Policy

ow entering its second decade, the Metropolitan Policy Program has successfully built a demographic, economic, and place-based framework with which to understand the challenges facing metropolitan America. The program this year began a two-year effort to add up its decade of work to put forward a national blueprint for prosperity that builds from place-based successes. N In addition to the Blueprint project, Metropolitan Policy kept up its award-winning research on the full range of challenges facing Ameri- ca’s cities and metro regions. During the year, the program issued 57 reports, two books, 185 speeches, and 20 newspaper op-eds and Web commentaries. The public responded by downloading these publications from the Web site more than 760,000 times. Metropolitan Policy’s ample trend research demonstrated that poverty rates are on the rise in both cities and suburbs, with more poor people now living in suburbs than in cities. The Midwest bore the brunt of America’s manufacturing job loss. And the very emblem of the American Dream, the middle-class neighborhood, declined as the costs of daily necessities for working families rose. And as many communities grappled with greater economic insecurity, some simultaneously faced other rapid changes, such as the demands of new immigrants, refugees, and population growth in general—symbolized by the arrival of the 300 millionth American. “We are learning that political and civic leaders are craving solutions to achieving and maintaining economic prosperity,” said Bruce Katz, vice president and founding director of Metropolitan Policy and holder of the Adeline M. and Alfred I. Johnson Chair in Urban and Metropolitan Policy. “This was true in every case where we engaged during the past year. Fact-driven, comprehensive, and practical problem solving to achieve prosperity proved in demand and successful, whether applied at the metro, state, regional, or national level.”

Outside the Beltway and Across the Country In helping New Orleans track and shape the city’s rebuilding, Met- ropolitan Policy documented the progress, or lack thereof, in the region’s recovery throughout the year via the monthly Katrina Index. Using Census, IRS, and Postal Service data, the Index’s snapshot of the region has been a key resource for policy-makers and was featured on multiple occasions in The New York Times as an “op-chart.” In cooperation with the Greater New Orleans Community Data Center, n g A lswa Metropolitan Policy will continue the effort, now dubbed the New

Ralph Ralph Orleans Index, on a quarterly basis. 23 METROPOLITAN POLICY

On the policy front, Metro- and the growth of new service political campaign is 100 percent to revitalize the “Gateway Cities” politan Policy experts pushed for and innovation businesses. accurate. This was clear from of Massachusetts was embraced a quality economic turnaround “Charting Maine’s Future,” the recently completed indepen- wholeheartedly by Gov. Deval of the region, publishing a wide- released in October 2006, dent Brookings Institution report Patrick. The 11-city study won ranging proposal for a revived, argued forcefully that sustainable that exploded many myths about prominent coverage in The Wall inclusive, and sustainable New prosperity is not inevitable and Maine,” said Maine Gov. John Street Journal, USA Today, and Orleans. It included a continued suggested a state policy reform Baldacci. “The Brookings study The Boston Globe, as well as in commitment by federal, state, agenda. What is now known sim- has given us not just a blueprint the news media of all the mill and local government to work ply as “The Brookings Report” can to improve our economy, but a and manufacturing towns. together. fairly be said to have dominated way to lift the extensive pessi- Matt Fellowes’ 12-city study In Maine, the program the state’s policy discourse and mism that permeates this state.” of the inflated prices that lower- entered the state this year at a legislative activity. Thanks to the Perhaps most novel, and most income families pay for basic critical economic crossroads. report, “cut to invest” has become talked about in Maine, has been goods and necessities quickly After a period of demographic a familiar phrase in Maine, as Brookings’s proposal of a com- became the most frequently stagnation, Maine faced rapid have such terms as “industry clus- mission to identify inefficiencies e-mailed item on The New York development driven by a major ters” and “sustainable prosperity.” in state government and submit Times’s Web site. Unlike most acceleration of domestic in- “I know this may shock you, a reform package for savings and traditional anti-poverty initia- migration from Massachusetts but not everything you hear in a reorganization to the legislature tives, “From Poverty, Opportunity: for an up-or-down vote. Putting the Market to Work for As a first foray into multistate Lower Income Families” explored reform, “The Vital Center” exam- how strategic public investments ined the Great Lakes region’s can match or seed innovative industrial legacy and the eco- market solutions. nomic hangover from the seismic shifts in American manufacturing Abroad (see Great Lakes, page 25). Although the Metropolitan Policy To help state and local lead- Program relentlessly gathered ers nationwide understand their local data for its analyses, the regional economies and the policy program also looked abroad for options available to them, the both lessons and opportunities. program released several new Over the past year, Bruce Katz products from its Metropolitan was a senior adviser to a London Economy Initiative, a multiyear School of Economics initiative— undertaking. the global “Urban Age”—that With more than 16 million is designed to develop poli- people and nearly 8.6 million cies that can address the rapid jobs, America’s older industrial urbanization in China, India, and cities remain a vital—if under- elsewhere. valued—part of the economy. Katz’s presentation on “An They present a range of other Urban Agenda for an Urban Age,” physical, economic, and cultural delivered at a major international assets that, if fully leveraged, conference in Berlin in the fall, could serve as a platform for their demonstrated that cities and renewal. “Restoring Prosperity,” city regions are the vehicles for released in spring 2007, aimed to achieving major global objectives mobilize governors and legislative in the 21st century, and require leaders, as well as local constitu- radically different multidimen- encies, behind an asset-oriented sional interventions if they are to agenda for reinvigorating the mar- realize their potential. Rep. Jeff Flake (right) of Arizona and Rep. Luis V. ket in the nation’s older industrial Gutierrez of Illinois speak on immigration reform, cities. Closer to Home the prospects and possibilities, at a Brookings discussion in April. A report by Mark Muro, John The Greater Washington

shaRON shaRON FaRMER Schneider, and others on ways Research Program helped the 24 Great Lakes Renewal in the Global Era he Great Lakes region of Initiative recommendations. gram initiated the Great Lakes the United States made Taking a holistic approach, initiative under the leadership of America a global agri- Brookings has worked with lead- John C. Austin, a Brookings nonres- cultural and industrial ing environmental organizations to ident senior fellow and vice presi- city and region’s leaders to bet- powerhouse. Today, this leverage natural and environmental dent of the Michigan State Board of ter understand the issues and T highly integrated 12-state economic assets for economic development. Education, in response to growing options before them. The project region is working to reinvent itself For instance, the initiative recently interest among Great Lakes lead- influenced thinking and policy during a new era driven by global- released a cost-benefit analysis ers for strategic thinking about the development by providing analysis ization and by demographic and showing substantial returns to the future economy of the region. and interacting with elected and technological change. region if the Great Lakes were to The Great Lakes Economic appointed officials, community The Brookings Metropolitan Pol- be cleaned up. Initiative is supported by the Cana- leaders, the private and not-for- icy Program—in partnership with a The Great Lakes Economic Ini- dian Department of Foreign Affairs profit sectors, the media, and the network of academic, public policy, tiative is also a critical part of the and International Trade, CMS general citizenry. business and civic organizations— Brookings Blueprint for American Energy Corporation, the Commu- During the past year, the successfully completed the first Prosperity, which advances federal nity Foundation for Southeast Mich- focus was on reducing poverty phase of the Great Lakes Economic policies central to U.S. competitive- igan, DTE Energy, the Ford Motor through improved workforce Initiative. The initiative, launched in ness and provides independent and Company Fund, the Joyce Founda- development programming, 2005, culminated this year in the powerful ideas to shape the 2008 tion, KnowledgeWorks Foundation, monitoring the implementation development and dissemination of campaign debate and the work of Michigan State University, and the of year-old affordable housing a framing report, “The Vital Center: the next administration. University of Michigan. n policy recommendations made by A Federal-State Compact to Renew The Metropolitan Policy Pro- a housing task force co-chaired the Great Lakes Region.” Nonresident Senior Fellow John C. Austin The report, released in October by Director and Senior Fellow describes how the cities and states Alice Rivlin, initiating research on 2006, describes why the Great surrounding the Great Lakes are positioned school quality options for the city, Lakes region developed as it did to be global economic players. conducting research in support and how it is positioned today to of improving the city’s medical be a global economic player. Offer- safety net, and analyzing major ing a candid assessment of what trends and population movement assets the region can build on and in the Washington region. the challenges it must overcome, the report also identifies ways that Urban Markets Great Lakes states can strengthen The Urban Markets Initiative their economies. It urges the region was founded to identify informa- to collectively pursue an integrated tion gaps that create barriers to state, multistate, and national investment in urban markets, policy agenda. develop collaborative solutions, In addition to receiving substan- and facilitate usage. This year the tial media coverage, state, regional, project focused on developing a and local leaders have recognized constituency for alternative data the effort as a compelling one. in credit scoring, identifying new Reps. Vern Ehlers and John tools to understand economic Dingell of Michigan, as well as Sen. performance in underserved retail Carl Levin of Michigan, all co-chairs markets, and building awareness of the Great Lakes Congressional of critical information gaps like Caucus, have expressed interest informal economic activity. in using the report to guide policy. It also honored Urban Market Additionally, Gov. Jim Doyle of Wis- Pathfinders who demonstrated consin and Gov. Tim Pawlenty of excellence capturing market Minnesota are using the report to potential by investing in com- inform their regional and national munities. They included retailers, leadership agendas. developers, cities, and an investor The municipal leagues of the who cleared the path to urban region are also meeting, with market success to achieve better- Brookings support, to craft state performing stores and centers that and federal policy agendas for their better connect urban residents to organizations based on the Vital n g A lswa

retail goods and services. n Center and Great Lakes Economic Ralph Linda Steckley, vice president of development, consults with Trustee James D. Robinson III at a Brookings reception. Support for Brookings Donors Seed New Growth

hilanthropic generosity has been the foundation of Brookings since its inception in 1916, and the continued growth of programs depends on an ever-growing group of financial supporters. With important support from foundation, corporate, and individual donors, Brookings experts can conduct the cutting-edge research for which Brookings is known. As new policy challenges emerge, contribu- Ptors enable Brookings experts to explore solutions. Funding flow is balanced to respond to current issues as well as to undertake long- term research projects. Thanks to the critical support of its benefactors, Brookings is on sound fiscal footing after a five-year growth spurt. The annual budget has nearly doubled—from $36.5 million in 2002 to $60.6 million in 2007. Foundation, corporate, and individual donors provided the project and general operating support to achieve this tremendous growth and contributed to Brookings’s endowment. Commitments of new funds to Brookings increased 93 percent this fiscal year. The year ushered in a variety of challenging policy issues that were tackled with the intellectual rigor and multidisciplinary approach that remain Brookings’s hallmark. As events broke at home and around the world, Brookings experts had the flexibility to focus their attention on analyzing new developments and formulating policy recommendations to respond to them. This flexibility—to act in a timely way without waiting to secure specific project funding—comes in large part from Brookings’s endowment and increased general operating support. These crucial funds enabled experts to apply their research and policy- making skills when and where fresh insights mattered most. Of course, Brookings’s research agenda was not merely reactive; its scope extended to policy issues just over the horizon. Again, these flexible funds gave Brookings the latitude to explore important areas that have not yet gained wide attention but nonetheless loom in the future. And as Brookings sought to expand into new areas of study, endowment and general operating support provided critical seed funding to propel these ventures forward. Maintaining Brookings’s position at the forefront of the policy debate required the financial backing to remain competitive, not only in Washington, but also globally. Thanks to the generosity of Brook- ings Board Chairman John Thornton, Brookings launched the John L. Thornton China Center in conjunction with the Brookings-Tsinghua Center (BTC) at Tsinghua University in Beijing. The China Center and BTC focus on independent analysis and policy recommendations

Paul Morigi Paul to help U.S. and Chinese leaders address key long-term challenges. 27

Support for Brookings

As China is seen as the world’s foremost emerging power, and its rise is considered one of the most important geopolitical events of this century, Brookings is now well-positioned to have a lasting impact on U.S.-China relations.

Engaging Individuals in the Brookings Council The Brookings Council brings together thoughtful business and community leaders actively interested in policy issues, providing them with a first glimpse at Brookings research on wide- ranging and urgent issues.

Members of the Council a n g

Trustees Alan Batkin and Beatrice Welters w enjoyed opportunities this year socialize before the February Board dinner at the A ls to attend events in cities from U.S. Chamber of Commerce. al p h coast to coast, including nearly 20 R events in New York, Boston, San Francisco, Los Angeles, and Wash- Council members remain provides the resources to fulfill ington. These sessions allowed the essential partners in the advance- our critical mission of indepen- Welcoming New Trustees Council to engage with each other ment of independent public dent research and innovative and some of the best public policy policy research. The Brookings policy solutions. The commit- rookings’s Board of Trustees minds in the world today. endowment generates the funding ment of the Brookings Council is B draws from the nation’s fore- Such interactions were high- for approximately 19 percent of key to the continued success of most business executives, aca- lighted at the 2007 Brookings Brookings’s operating budget, but Brookings, its ability to provide demics, community leaders, and Council Annual New York Forum the remaining 81 percent comes high-quality analysis and realistic former government officials. The titled “Road to the White House: from the generous support of policy recommendations, and to Board, which meets three times Will Issues Matter?” President Brookings’s donors. As Brookings’s reaching a wide range of audi- a year, provides governance of Strobe Talbott moderated a panel leading benefactor, the Council ences for the greatest impact. Institution business, approves the of Brookings experts on issues Victor Fung, a member of the International fields of scholarly investigation, at the forefront of the 2008 Advisory Council, presents at a meeting at and safeguards the independence election—competitiveness and Brookings. of Brookings’s work. In 2007, international trade, energy and Brookings elected four new trust- the environment, and terrorism ees and one honorary trustee to and Iraq. Participating Council the Board: members were able to challenge Liaquat Ahamed panelists and offer their own Former Chief Investment Officer Fischer Francis Trees and Watts, Inc. informed responses, giving Brook- ings experts a chance to hear Steven A. Denning Chairman what is on the minds of Council General Atlantic LLC members and to reply with up-to- Alfred B. Engelberg the-minute analysis. Trustee Other Brookings Council The Engelberg Foundation events this year with dynamic, Bart Friedman cross-cutting dialogue included Senior Partner Cahill Gordon & Reindel Kenneth Pollack on the Middle East, Thomas Mann on the mid- a n g

Victoria P. Sant w President term elections, and Lael Brainard The Summit Foundation on international trade and the A ls al p h

global economy. R 28 Impact on Health Care Reform

ealth care is a pivotal policy issue that Brookings is tackling with health crises,” Schaeffer said. “As the focus on health care the help of several generous donors. “Brookings’s long history reform increases, the Center will prove to be a powerful of thoughtful impact on public policy has the potential to make force in shaping health policy.” Schaeffer has seen first- H a real difference in the steps that are taken to fix the broken hand the challenges of reforming the health care system, health care system,” said Alfred B. Engelberg. Engelberg and fellow trustee both in the private and public sectors. Currently the chair- Leonard D. Schaeffer made generous gifts this year to a new Brookings man of Surgical Care Affiliates, he was chairman and CEO endeavor in health care (see Engelberg Center, page 8). of WellPoint, Inc. until 2005 and previously served in the Engelberg, a Brookings trustee elected in May 2007, committed a lead Carter administration and in Illinois state government. Alfred Engelberg gift to create the Engelberg Center for Health Care Reform at Brookings. A The Engelberg Center’s agenda will focus on four key priorities for grant from the Engelberg Foundation underwrote the Center’s initial five- long-term change: improving the quality of medical care; increasing access year operational activities. Engelberg, a patent attorney with expertise in to affordable coverage; encouraging rapid and effective innovation for the the generic drug industry, currently devotes his time to philanthropic work development of more personalized medicines; and reducing costs for pub- and to policy issues related to affordable medicines lic and private programs. Brookings Senior Fellow Mark B. McClellan, M.D., and intellectual property rights in the United States Ph.D., has been appointed as the Center’s founding director, and will hold and around the world. the Leonard D. Schaeffer Director’s Chair. McClellan is a former commis- Schaeffer, a member of the Brookings Board sioner of the Food and Drug Administration and administrator of the Cen- of Trustees since 2000, committed $4 million to ters for Medicare and Medicaid Services. endow the Leonard D. Schaeffer Director’s Chair. These donors have set the philanthropic groundwork for others to fol- “The time has come to develop and enact reforms low, marking a pivotal moment to make a difference in the health care haeffer Sc that enhance cost control, clinical effectiveness, reform debate. Their confidence and support gives Brookings the opportu- c Ja Leonard and Pamela Schaeffer access to health care for underserved populations nity to have greater impact on arguably the most important domestic policy on the China Study Tour. and the preparation for and management of public issue today. n

The Vital Role of Foundations tion grants this year represented Global Economy and Develop- “We hope that this initiative will The generous support of 41 percent of total new project ment to support a new initia- encourage new investments in Brookings’s foundation donors funding commitments. tive that evaluates global health global health by identifying some enabled experts to conduct the Highlighted below are two financing proposals to determine of the most efficient and effective path-breaking research that helps foundations that provided signifi- the most effective ways to fund ways to give,” said Joe Cerrell, inform American policy-making, cant support to Brookings in fis- health care programs in develop- director of Global Health Advo- while also preserving a 91-year cal year 2007. ing countries. Brookings experts cacy for the Gates Foundation. commitment to quality, indepen- The Bill and Melinda are examining where financing The Rockefeller Founda- dence, and impact. Foundation Gates Foundation gave the larg- programs using public, commer- tion made more than $966,000 grants accounted for a majority of est foundation grant this year—a cial, philanthropic, and aid-based in new commitments in fiscal direct project support. Founda- two-year, $3.18 million grant to funds have the most impact. year 2007 to the Metropolitan Policy Program, helping Bruce Katsuhiro Nakagawa and Wanda Rapaczynski participate in an International Advisory Council Katz and his team of experts con- discussion on energy security and climate duct cutting-edge research and change. policy development to advance healthy metropolitan growth and economic prosperity. The program was honored to play a lead role in conceptualizing and organizing the U.S. component of the 2007 Rockefeller Founda- tion Global Urban Summit at the Foundation’s Bellagio Study and Conference Center in Italy. With this year marking the first time in history that half of the world’s population lives in urban regions, the Bellagio Summit convened leaders worldwide to explore opportunities to foster healthy and sustainable cities. The event

Pe t er Krogh offered the Metropolitan Policy 29 Doing Well By Doing Good: Charles W. Robinson

o make a planned gift to Brookings, it helps Robinson’s sage advice and wise counsel have been to be selfish. Does this sound like a contra- a cornerstone of the Brookings’s Board of Trustees Leadership Council, a group of diction? “Surprisingly, no,” said Brookings’s for the past 30 years. Elected in 1977, he became an major philanthropies, corpora- T Honorary Trustee Charles W. Robinson, who honorary trustee in 1984. Robinson currently operates tions, and community and civic established a charitable remainder trust in 2004—and several businesses, including Robinson and Associ- leaders that is guiding the design, added to it this year. ates, CBTF Co., and M Ship Co. With wide experience development, and marketing of Robinson funded the Charles W. Robinson Chair in industry and investment banking, Robinson also a forthcoming major reform ini- in Foreign Policy by adding $2 million to his existing worked with Henry Kissinger for three years and was tiative, Blueprint for American charitable remainder trust, bringing the total to over appointed deputy secretary of state in 1976. In the Prosperity. $3 million. “If I live for some time longer, as I seriously private sector, with M Ship and the U.S. Navy, Robinson Launched in 2006, the plan, I will gain from my gift to Brookings. To me, that’s recently created the prototype for the 80-foot boat Council is politically and geo- doing well by doing good! So, yes, I’ve been very happy Stiletto, whose breakthrough design earned it Time graphically diverse and includes to be selfish and to have provided well for Brookings at magazine’s selection as the best armed forces inven- representatives from many eco- the same time,” Robinson said. tion of 2006. nomic sectors. By participating Donors like Robinson, who make provisions for Robinson climbed the Great Wall during the 2006 in the Council, members have Brookings in their estate plans, assure Brookings a Brookings Study Tour to China, proving to all his the opportunity to interact with steady stream of income for years to come. By creat- durability. Although Brookings will not receive his Brookings research staff and a ing, and then adding to, a charitable remainder trust endowment gift during his lifetime, Robinson makes an nationwide network of city and with appreciated securities, Robinson increased his annual gift in an amount equal to an endowment distri- county elected officials, univer- income substantially from previously low-yielding bution to support the Robinson Chair, currently held by sity presidents, and metropolitan securities. Vice President Carlos Pascual. n business alliances. Some of the key founding corporate members Donor and Honorary Trustee Charles include Allstate, Bank of Amer- Robinson speaks at the May Board of Trustees dinner at the State Department ica, Countrywide Financial, H&R among a group that includes Eric S. Block, and Next Street Financial. Edelman (left), undersecretary of defense Throughout the year, Brook- for policy. ings Corporate Council members enjoyed many opportunities to interact with Brookings experts on a broad range of domestic and international topics. Brookings experts led discussions on such timely issues as energy and trade policy and the war in Iraq at the popular monthly lunch and breakfast series. The annual President’s Lunch featured Strobe Talbott offering his perspectives on the United States and the world in the context of the upcoming presidential election and looking ahead to the challenges that the

Pe t er Krogh next administration will face. Program a special opportunity to of these important benefac- nies made major contributions further a multiyear, Brookings-led tors, Brookings has maintained to Brookings this year, including Brookings Experts Lead Study effort to develop major federal its leadership in public policy Exxon Mobil Corporation, Pfizer, Tour to China reforms in the United States. research. Brookings is grateful AT&T, and Alcoa. Their generous The October 2006 Brookings for the financial and intellectual support demonstrates the high Study Tour to China gave 50 Corporate Investment in support that corporate donors value they place on commitment trustees and friends of Brook- Brookings Ideas provide, and the Institution’s to quality, independence, and ings an intense yet wide-ranging Corporate donors play a vital role scholars also value their business- impact. look at the world’s most populous at Brookings, deepening research world perspectives on important Business leaders also contrib- nation. The study tour—led by capacity and expanding impact. issues. uted financially and intellectu- Board Chairman John L. Thorn- Thanks to the generous support In particular, several compa- ally through the Metropolitan ton, President Strobe Talbott, 30

International Advisory Council

he International Advisory Council (IAC) helps Brook- ings create a meaningful Senior Fellow and Director of T dialogue with interna- the China Center Jeffrey Bader, tional business leaders, extend its and Senior Fellows Cheng Li, outreach and relevance to other Jing Huang, and Wing Thye countries, and increase its ability Woo—began with a brief stop in to inform the American public and the capital, Beijing. The travelers policy-makers about perceptions then made their way to Urumqi in other parts of the world. and Kashgar, in the ethnically Representing 20 countries on “autonomous region” of Xinjiang six continents, the IAC members on the edge of Central Asia. From provide invaluable advice and sup- there the group traveled to the port for Brookings as it becomes western city of Chongqing (with an increasingly global think tank. 32 million dwellers), back to They offer their diverse perspec- Beijing and on to Shanghai (see tives on developments in their China-Doha, page 21). regions along with candid insights Each city showed evidence of into how America and its policies the booming Chinese economy. are received. Construction cranes were hard The IAC held its second annual at work adding to the skyline of meeting in Washington, May 6–8, Shanghai, while Chongqing has 2007, with a focus on energy and Secretary of State Condoleezza Rice joins Brookings its implications for national policy, plans to harness the hydropower President Strobe Talbott at an IAC meeting.

of the Three Gorges Dam. The international security, develop- Pe t er Krogh delegation found many of the ment, and the environment. Members engaged in a focused set of conversations with Brookings scholars, political leaders, entrepreneurs, senior staff, and trustees—and with one another—as well as with Secretary of State Condoleezza Rice, Under- academic experts, and journalists secretary of State for Political Affairs R. Nicholas Burns, Assistant Secretary for East Asian and Pacific Affairs willing to talk forthrightly about Christopher Hill, and a number of U.S. senators and representatives. current issues of the day. The group had the privilege International Advisory Council Members of taking part in a 75-minute dis- Antoine van Agtmael, Chairman & CIO, Emerging Markets Management, LLC and Chairman of the IAC cussion with Premier Wen Jiabao Roger Agnelli, CEO, Companhia Vale do Rio Doce, Brazil in the ruling elite’s enclave of Mukesh Ambani, Chairman, Reliance Industries, India Zhongnanhai near the Forbidden Rahul Bajaj, Chairman, Bajaj Auto Limited, India City. A high point of the study James Balsillie, Co-CEO, Research in Motion, Canada tour was a visit to Beijing’s Tsing Antony Burgmans, BurGo B.V., Former Chairman, Unilever, The Netherlands hua University, where the group Gustavo A. Cisneros, Chairman & CEO, Cisneros Group of Companies, Venezuela participated in the launch of Ricardo Claro, Chairman, Compañía Sud Americana de Vapores, Chile the Brookings-Tsinghua Center, Hanzade Do˘gan, Vice President of Strategic Planning, Do˘gan Yayın Holdings, Turkey Brookings’s first overseas office. Victor Fung, Chairman, Li & Fung Limited, Hong Kong After almost two weeks in Kazuo Furukawa, President, Hitachi, Ltd., Japan China, the Brookings group Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, Prime Minister & Minister of Foreign Affairs, Qatar headed home awed by the prog- Nemir Kirdar, President & CEO, Investcorp, U.K. ress the Chinese have made in Anne Lauvergeon, Chair & CEO, AREVA Group, France a few short decades and sobered Frank Lowy, Chairman, Westfield Holdings, Australia by the magnitude of challenges Philip Mallinckrodt, Global Head of Corporate Development, Schroders, PLC, U.K. their nation faces. While there is Katsuhiro Nakagawa, Vice Chairman, Toyota Motor Corporation, Japan a temptation to think of China Hutham S. Olayan, President & CEO, Olayan America Corporation, Saudi Arabia in terms of a balance sheet of Victor Pinchuk, Founder, Interpipe Group, Ukraine positives and negatives, a static Marco Tronchetti Provera, Chairman, Pirelli S.p.A., Italy matrix fails to capture the sense Itamar Rabinovich, Israel of momentum and transforma- Wanda Rapaczynski, Chairman & President, Agora, Poland tion felt at every stop. Looking to Nathaniel Rothschild, Co-Chairman, Atticus Capital, U.K. the future, most came away with Tokyo Sexwale, Chairperson, Mvelaphanda Holdings & Mvelaphanda Resources, South Africa guarded optimism. n Marcus Wallenberg, Chairman, Skandinaviska Enskilda Banken AB, Sweden n 31 Honor Roll of Contributors

Cash Received $100,000–$249,999 Property-Casualty CEO Roundtable Community Foundation for July 1, 2006–June 30, 2007 Anonymous (2) Marco Tronchetti Provera, Pirelli & Southeastern Michigan S. Daniel Abraham C. SpA Steve and Roberta Denning Alcoa Foundation Steven Rattner and Maureen White European Union, Delegation of the $1,000,000 and Above Allstate Reliance Industries Limited European Commission Alfred and Gail Engelberg Roger Altman Charles W. Robinson Lawrence K. Fish Bill & Melinda Gates Foundation America’s Promise Rockefeller Brothers Fund Bart Friedman The William and Flora Hewlett AT&T Services Inc. Jacob Rothschild and the Saffery General Electric Foundation Foundation James Balsillie and The Centre Champness Trust Corporation as Fred Gluck The John D. & Catherine T. for International Governance Trustee of the Arrow Charitable Richard and Rhoda Goldman Fund MacArthur Foundation Innovation Trust William T. Grant Foundation The Rockefeller Foundation Bank of America Foundation Nathaniel Rothschild Jeffrey W. Greenberg Leonard D. Schaeffer Howard P. Berkowitz Robert E. Rubin William A. Haseltine, Ph.D. John L. Thornton Geoffrey T. Boisi and The Boisi Roger W. and Victoria P. Sant and Estate of Andrew Heiskell James D. Wolfensohn Family Foundation The Summit Fund of Washington The F.B. Heron Foundation Antony Burgmans, Unilever Schlosstein-Hartley Family Joel Z. Hyatt $500,000–$999,999 Canadian Department of Foreign Foundation Institute of International Education Anonymous Affairs and International Trade Searle Freedom Trust Johnson & Johnson Richard C. Blum and Senator Dianne Timothy C. Collins and Ripplewood Tokyo Sexwale James A. Johnson and Maxine Isaacs Feinstein Foundation, Inc. Spencer Foundation Kansai Institute for Social and Carnegie Corporation of New York The Council for the United States State Farm® Economic Research Annie E. Casey Foundation and Italy Surdna Foundation, Inc. Robert S. Kaplan Ford Foundation Countrywide Financial Corporation Taipei Economic and Cultural The Elbrun and Peter Kimmelman Government of Norway Alan M. Dachs Representative Office Family Foundation, Inc. The Pew Charitable Trusts Hanzade Do˘gan, Do˘gan Group of The Tata Group The Korea Foundation Embassy of Qatar Companies Toyota Anne Lauvergeon, AREVA The Bernard & Irene Schwartz Blair W. Effron and Cheryl Cohen U.S. Department of Energy Lawrence Livermore National Library Foundation Inc. Effron Antoine W. van Agtmael The Wallis Annenberg Grant for U.S. Chamber of Commerce Exxon Mobil Corporation William A. von Mueffling Leadership and Innovation of David and Marianna Fisher Wal-Mart Stores, Inc. Liberty Hill Foundation $250,000-$499,999 The Freeman Foundation The Wasserman Foundation Lumina Foundation for Education Anonymous The Victor and William Fung Stephen M. Wolf Government of Luxembourg Boston College Foundation World Economic Forum Robert E. Marks DaimlerChrysler Corporation Fund Goldman Sachs Foundation Ezra K. Zilkha National Association of Mutual Doris Duke Charitable Foundation Alec Gores Daniel B. Zwirn Insurance Companies (NAMIC) Mark T. Gallogly Michael D. Granoff Next Street Financial Brian L. and Myra S. Greenspun H&R Block $50,000–$99,999 The Olayan Group and The Greenspun Family The Heinz Endowments Anonymous (3) Open Society Institute Foundation Hitachi 10,000 Friends of Pennsylvania Todd G. Patkin Growsmart Maine Glenn H. Hutchins Robert John Abernethy Frank H. Pearl The Suzanne Nora Johnson & David Kenneth M. Jacobs Roger Agnelli, Companhia Vale do Robert Peck G. Johnson Foundation The Joyce Foundation Rio Doce PepsiCo, Inc. Living Cities, Inc. Nemir Kirdar Amgen, Inc. Phoenix Satellite Television Holdings, Charles Stewart Mott Foundation John S. and James L. Knight William A. Dunn Ltd. National Association of Home Foundation Rahul Bajaj Samuel Pisar, Ph.D. Builders Frank P. Lowy Berks Economic Partnership Inc. Research Institute for Housing Victor Pinchuk Foundation The Markle Foundation Caterpillar Inc. America Trust Fund Tokyo Club Foundation for Global Mindich Family Foundation Center for the New Economy James D. Robinson, III Studies National Science Foundation Raymond Chambers and The MCJ Jamie and Gretchen Rubin United Nations Maconda B. O’Connor, Ph.D. Foundation Sabancı University Tom O’Gara Citigroup Shell Oil Company Richard Perry City of Lancaster, Pennsylvania David Smilow Pfizer, Inc. Strobe Talbott and Brooke Shearer 32 Honor Roll of Contributors

The Andrew H. & Ann R. Tisch Loren W. Hershey, Esq. $10,000–$24,999 Ann M. Fudge Foundation Honda North America, Inc. Anonymous (2) John L. Furth Verizon Investment Company Institute ABA Section of Business Law The Gallup Organization Marcus Wallenberg Frank F. Islam Meena and Liaquat Ahamed Frederic and Anne Garonzik WellPoint Foundation ITOCHU International, Inc. Donald C. Alexander Foundation Beatrice W. and Anthony Welters Japan Bank for International American Enterprise Institute for General Electric Company J. McDonald Williams and the Dallas Cooperation Public Policy Research Goldman, Sachs & Co. Foundation The Robert Wood Johnson Loreen Arbus, Goldenson-Arbus George D. Gould University of Pennsylvania Foundation Foundation Global Business Coalition on HIV/ University of Toronto Joel and Ricki Kanter Larry D. Bailey AIDS, Tuberculosis and Malaria Herbert M. Kaplan and The Warren Liza Bailey Government of France $25,000–$49,999 Alpert Foundation Richard Bartlett Patrick W. and Sheila Proby Gross Anonymous KnowledgeWorks Foundation Robert Berne Marion Guggenheim ABN AMRO The Kresge Foundation John P. Birkelund Agnes Gund Abt Associates Inc. Daniel H. and Sunita Leeds Boston Consulting Group Robert D. Haas All Nippon Airways Lyondell Chemical Company Anders Brag James T. Hackett, Anadarko Allen & Company LLC Mario M. Morino Bristol-Myers Squibb Foundation Petroleum Corporation American Express Foundation David O. Maxwell Brodsky Family Foundation Harris Family Foundation Animal Health Institute Microsoft Corporation Daniel Brodsky Thomas J. Healey Aramco Services Company The Leo Model Foundation, Inc. The Andrea and Charles Bronfman June R. Hechinger Sandy and Stewart Bainum Jr. The Ambrose Monell Foundation Fund at Brandeis University F. Warren Hellman BASF Charles Perez Carter Cafritz Cynthia Helms Rex J. Bates Prince Charitable Trusts Conrad Cafritz E. David Hetz Alan R. and Jane Batkin Robert P. Quinn Cargill, Incorporated The Conrad N. Hilton Foundation The Boeing Company Raytheon Co. A.W. Clausen John and Pamela Humphrey British Embassy Joseph L. Rice III David J. Cohen Francis O. Hunnewell Louis W. Cabot Edgar and Lillian Rios and Judith and Stewart Colton Impaq International, LLC The Virginia Wellington Cabot The R & R Foundation Geoffrey J. Colvin Institute for Social Policy and Foundation Roche ConocoPhillips Understanding The Morris and Gwendolyn Cafritz Marshall Rose Karen and Everett R. Cook Shirley Ann Jackson, Ph.D. Foundation Marshall S. Ruben and Carolyn Corning Incorporated Foundation Benjamin R. Jacobs Embassy of Canada Greenspan Cuba Study Group The Japan Foundation Center for Cato Institute Charles Ryan Arthur B. Culvahouse Jr. Global Partnership Peter Chernin sanofi-aventis The Curtis Family Foundation Douglas M. Kaden Chevron Corporation Sheldon* and Elinor A. Seevak The Honorable Kenneth W. Dam and Kansai Electric Power Company, Inc. Citizens Charitable Foundation Joshua L. Steiner Marcia W. Dam James C. Kautz Civil Justice Reform Group David S. Steiner and Sylvia Steiner David E. R. Dangoor David Woods Kemper Memorial Cleveland Clinic Charitable Trust D. Ronald Daniel and Lise C. Scott Foundation The Coca-Cola Company Government of Switzerland Marti Dinerstein Brenda R. Kiessling Timothy D. Dattels Vincent J. and Pat Trosino District of Columbia Primary Care Marie L. Knowles Robert A. Day Tudor Investment Corporation Association Korea International Trade Association Deutsche Bank Americas Foundation Turkish Industrialists’ and Adam J. Dooley Patrick J. Landers Eli Lilly and Company Foundation Businessmen’s Association The Dow Chemical Company Toby Devan Lewis Samuel and Leah Fischer University of California, Berkeley Anthony Downs Gordon Litwin and Anne Luzzatto Todd Fisher University of Michigan Dr. Ronald and Beth Dozoretz Lockheed Martin Corporation The Lee and Juliet Folger Fund Visa USA, Inc. Mario Draghi London School of Economics Mitzi and Cyrus F. Freidheim Jr. Enzo Viscusi Richard J. Dumler Louisiana Disaster Recovery General Dynamics Corporation Westat William C. Eacho, III Foundation The German Marshall Fund of the John C. Whitehead James Elrod Frederic V. Malek United States Daniel H. Yergin and Angela Stent Roger C. Faxon Marathon Oil Corporation GM Foundation Roy Zuckerberg Fondation Nationale Des Sciences Marubeni America Corporation Harvard University Politiques Edward J. and Dale Mathias Matsushita Electric Industrial *deceased David Friend 33 Honor Roll of Contributors

Jim McCann U.S. Department of Homeland Ann and Vernon E. Jordan Jr. Bonnie and Richard Reiss The McGraw-Hill Companies, Inc. Security Thomas L. Kempner Warren B. Rudman Merrill Lynch & Co., Inc. The World Bank The F.M. Kirby Foundation, Inc. Henry B. Schacht Arjay and Frances Miller Vanderbilt University Robert P. and Arlene R. Kogod Francis H. Schott Mitsubishi International Corporation Fred Wilpon Edward M. Lamont James E. Staley Mitsui & Co. (U.S.A.) Wyeth James T. and Joan M. Lynn Linda G. Steckley and Peter Weitzel Mizuho Research Institute The Xerox Foundation Bruce K. and Virginia N. MacLaury Lawrence H. Summers James Mossman MassINC Toledo Community Foundation National Bureau for Economic $5,000–$9,999 New York University Laura D’Andrea Tyson Research, Inc. AARP Peter and Sarah O’Hagan U.S. Census Bureau NEC Corporation of America American Society of the French William A. Owens Frank Weil Donald E. and Susan Newhouse Legion of Honor Alan and Susan Patricof Richard B. and Francesca Stanfill Association of Muslim Social Pepco Holdings, Inc. Nye Scientists Principal Financial Group Morris W. Offit Automatic Data Processing, Inc. Foundation, Inc. Augustus K. Oliver Elizabeth E. Bailey Stanley and Louise Resor Eiji Ono The Bank of Tokyo-Mitsubishi UFJ Marie Ridder Dwight D. Opperman BP Alice M. Rivlin John E. Osborn Rhoda W. Brownstein Felix and Elizabeth Rohatyn PACCAR, Inc. William M. Cameron Frederic A. and Susan Rubinstein John G. Popp Ellen Chesler and Matthew J. Stanley M. Rumbough Jr. J. Woodward Redmond Mallow Sejong Institute Research Foundation-The City Roberta Cohen Alan B. Slifka University of New York Bruce B. Dayton Robert Solomon Daniel and Joanna Rose Kenneth M. and Jackie F. Duberstein Alan D. Solomont B. Francis Saul, II Charles W. Duncan Jr. Helmut Sonnenfeldt Ralph S. Saul Kay Enokido and Thomas C. Crouse Frederick Stavis Isabel V. Sawhill Elinor Farquhar Paul A. Verbinnen Michael P. and Paola Schulhof Alan Fleischmann and Dafna E. Denis Walsh The Paul D. Schurgot Foundation, Tapiero Fleischmann and Lauer The Washington Post Company Inc. Philanthropic Foundation Robert M. Weekley Paul and Deane Shatz Nancy M. Folger Eric Weinmann* Stanley S. Shuman and The Marc Dr. Leslie I. Gold and John P. Spain Malcolm H. Wiener Haas Foundation Lincoln Gordon Mary and Jeff Zients Stephanie and Fred Shuman Jeffrey C. Gore Kenneth Siegel Morton E. Goulder $4,999 and below Robert E. and Emily Smith Greater New Orleans Nonprofit Henry J. Aaron Sojitz Corporation of America KnowledgeWorks Zoë Baird Samuel M. and Helene K. Soref John Gutfreund Cabell and Shirley Brand Foundation Miriam and Peter Haas Fund Cesare Calari Andrew P. and Patricia Steffan Edmund A. and Barbara Hajim Morton and Shirley Cohen Sumitomo Corporation of America Henry and Nancy Hamlin Vishakha N. Desai Taconic Foundation Samuel Hellman, M.D. Thomas E. Donilon Nelson Talbott Robert A. Helman Draper and Kramer Foundation Chandrika Tandon Harold Hestnes Walter Y. Elisha Larry D. Thompson Evelyn Heyward Nancy M. Hewett, Ph.D. Toshiba America, Inc. Frank Hoch* The Hillman Company Ranvir K. Trehan Roy M. Huffington Wendell J. Knox Ellie Trowbridge* Martin D. Jacobson The Betty and John Levin Fund Andrew K. Tsai John R. Jakobson Donald F. McHenry University of Victoria Nicholas Jakobson Ellen M. Pechman Reuben Jeffery John Edward Porter The Fletcher Jones Foundation Helen Raffel *deceased 34 Brookings Institution Press

t’s not every year that a L. Byman and Kenneth M. Pol- ical and economic system made it pressure on the school districts Brookings Institution Press lack. In their book, Byman, a non- unstable and bound to collapse. to examine the ramifications author briefs White House resident senior fellow with Brook- Gaidar was a government of school size and class size. In officials, meets with Pakistani ings’s Saban Center for Middle official in Russia, eventually serv- Brookings Papers on Education President Pervez Musharraf, East Policy, and Pollack, a senior ing as acting prime minister in Policy: 2006/2007, Senior Fellow is interviewed by such diverse fellow and research director for Boris Yeltsin’s regime. He played Tom Loveless and Frederick M. publications as The Guard- the Saban Center, offer specific a major role in Russia’s economic Hess at the American Enterprise ian and The Muslim News, recommendations to U.S. policy- transition from communism. In Institute examined what we do I lectures at the London School makers for preventing the “disas- 2006, Gaidar became seriously know about optimal class size. of Economics, and has his book trous” spread of the conflict in Iraq ill, leading to speculation that he The edited volume includes other launch party at the House of to other nations in the region. had been poisoned by political nationally recognized experts on Lords in London. But all that hap- Two Brookings books this year enemies. the issue. pened to Akbar Ahmed, a visiting dealt with global poverty: Too Poor Among the Brookings books All together, Brookings pub- fellow at Brookings and author of for Peace? Global Poverty, Conflict, focused on important domes- lished about 50 books during the Journey into Islam: The Crisis of and Security in the 21st Century, tic issues was the 2007 edition year. A number were honored Globalization. In one of Brook- edited by Lael Brainard and Derek of Restoring Fiscal Sanity: The with prestigious literary awards. ings’s most popular books in 2007, Chollet, and Reducing Global Pov- Health Spending Challenge, The National “Best Books” Ahmed relates how he attempted erty: The Case for Asset Accumula- edited by Alice M. Rivlin and Awards included Through Their to reduce the fear and mistrust tion, by Caroline Moser. Brainard, Joseph R. Antos. Rivlin, a senior Eyes: Foreign Correspondents in

between the Islamic world and vice president and director, Global fellow at Brookings, and Antos, a the United States by Stephen the West by leading a group of Economy and Development, and health care expert at the Ameri- Hess. The International Politi- young American students on a Chollet, a nonresident fellow in can Enterprise Institute, present cal Science Association named tour of nine Muslim countries in the program, present papers by a a collection of papers warning Targeting Social Programs by Peter the Middle East, South Asia, and number of scholars detailing how that unless the growth of spend- H. Schuck and Richard J. Zeck- Far East Asia. combating poverty around the ing on health care—particularly hauser as an honorable mention “The interplay between the world can increase national and for the elderly—is controlled, winner in its Charles A. Levine Muslim and the American young international security. Using case there will be little money left for Memorial Book Prize competition. people during the tour showed histories from Ecuador, Indonesia, other important services. Another award-winning book there’s an opening for dialogue, and El Salvador, Moser, a nonresi- In a volume titled Boomburbs: from Brookings was The Geog- understanding, and closer rela- dent senior fellow, explains how The Rise of America’s Acciden- raphy of Opportunity: Race and tions between the two cultures,” providing the poor with assets, tal Cities, Robert E. Lang and Housing Choice in Metropolitan said Robert L. Faherty, vice presi- such as small loans to establish Jennifer B. LeFurgy make the America, edited by Xavier de dent and director of the Brook- businesses, can greatly improve point that places like Anaheim, Souza Briggs. This volume, which ings Institution Press. their lives. Calif.; Coral Springs, Fla.; and explores why segregation in hous- America’s current and future Another author with firsthand North Las Vegas, Nev., which ing persists, won the Paul Davidoff relations with the Islamic world knowledge of his subject is Yegor began as suburbs of large cities, Award, presented every two years are also the subject of another Gaidar, author of Collapse of an have grown rapidly into “acciden- by the Association of Collegiate important Brookings book—Things Empire: Lessons for Modern Rus- tal cities” of their own. Schools of Planning to the best Fall Apart: Containing the Spillover sia, which contends that the very The national policy push to book on planning that addresses from an Iraqi Civil War, by Daniel nature of the Soviet Union’s polit- leave no child behind puts extra social and racial justice issues. n 35 Center for Executive Education

rookings con- the inaugural conference still executive branch and to offer tives attended open-enrollment vened its first resonate. While supporting the open-enrollment seminars in the programs, spent up to a year on Conference for development of more than a Middle East and Europe. “The Capitol Hill as congressional fel- Federal Execu- thousand federal executives every widening global perspective has lows, or learned to become “every- tives in 1957. year through its public leader- become essential to every execu- day advocates” through company- In his open- ship curriculum, BCEE promotes tive working in this country,” said specific programs. In the last four ing remarks, Brookings’s research through Terry Goodwin, BCEE director. years, BCEE welcomed more than then-Brookings programs designed to illuminate “Brookings’s global reputation, 9,000 participants from 44 states BPresident Robert Calkins called critical policy issues. and the outside experts we tap and 24 countries. More than 20 the meeting “an experiment in As Brookings has sought to overseas, gives BCEE an oppor- Brookings experts are regular method” and encouraged “per- respond to the full range of chal- tunity to offer this kind of experi- contributors to BCEE programs. sonal, frank discussion.” The lenges facing an increasingly ence, helping America’s leaders to Guest speakers this year included conference planted the seeds for interdependent world, BCEE widen their horizons and to build Iraq Study Group co-chair the Brookings Center for Execu- worked with Brookings experts to useful networks worldwide.” Lee Hamilton; Rep. Stephanie tive Education (BCEE) and, 50 deliver intensive policy updates This year, growing numbers of Herseth Sandlin of South Dakota; years on, the ideas surrounding to defense strategists within the public and private sector execu- Ana Marie Cox, the Time.com correspondent formerly known as Former Rep. Lee Hamilton of Indiana signs copies Wonkette; and H.E. Amr Moussa, of the The Iraq Study Group Report at a Brookings secretary general of the League of Center for Executive Education event. Arab States. For the fifth year, BCEE provided professional education for hundreds of justices from state supreme courts and appellate courts. Also, BCEE introduced the Brookings Certificate in Public Leadership for federal executives who seek to develop the competencies the Office of Personnel Management requires of candidates seeking appointment to the Senior Executive Service. Twenty certificates were awarded in the first 18 months, with 60 participants actively engaged in the program. “The emphasis is on self-awareness and personal mastery, encouraging executives to develop new mindsets and practice different behaviors. Others concentrate on our policy programs, learning how to operate most effectively between branches of government,” said Goodwin. As BCEE prepares for its next half-century, it remains committed to providing innovative public leadership and public policy programs that underpin Brookings’s values and advance the abilities and careers of corporate and gov-

RALPH RALPH ALSWANG ernment leaders. ■ 36 Brookings Strategic Plan for Its Tenth Decade

any articulate voices at the Brookings Board of Trustees meeting in M May finalized a strategic plan to guide Brookings to its 100th anniversary in 2016. Concentrating on the first phase—the next two years—the plan sets out an agenda that is both ambitious and disciplined, and is consistent with our enduring mission and our mutually reinforcing values of quality, independence, and impact. The first phase will take us to January 2009. Besides having impact over those two years, January 2009 will be a critical moment STRATEGIC PLAN K

address a range PETER KROGH of challenges. Brookings will be well- Brookings’s Board Chairman John Brookings Trustee Daniel Yergin, chairman of prepared to help inform that effort. Thornton. “Just a few of our land- Cambridge Energy Research Associates, contributes Three factors guided priorities to the “All-Brookings” priority area of energy. mark contributions to public policy in developing this strategic plan: the thus far include implementation of needs of the country; the competi- the original Social Security system, tive advantages of Brookings; and design of the Marshall Plan, and the the capacity and independence of overhaul of homeland security. The our experts to ask the right ques- challenges of the future demand an tions and come to what they feel ever more strategically positioned are the right answers. Brookings.” In a process led by Brookings Increasing the reach and impact Managing Director William Antholis, of our research is also key to the five policy areas were designated as strategic plan. To prepare the Insti-

“All-Brookings” priorities—energy, PETER KROGH tution to reach wider audiences in health care reform, competitive- ing to contemplate what Brookings within these programs—econo- the rapidly advancing technological ness, education, and migration. can achieve in its second century mists, demographers, constitutional age, our redesigned Web site can “Leaders from both parties have and to commit considerable efforts experts, diplomats, and national now transmit audio-visual state- identified these policy areas as toward that achievement. And, it security strategists, among others. ments from our experts in imme- national priorities where coopera- took a chairman like John Thornton A strategic plan, of course, is diate response to breaking news. tion across the aisle is both possible to think through how ideas could only as good as the Institution’s Thousands of papers across the and necessary,” said Antholis. “With solidify into a real plan.” ability to deliver on its core goals. many fields of study can be eas- all five research programs offering The strategic plan reaffirms The strategic plan explains why we ily searched and downloaded by innovative ideas on these topics, the role and updates the agenda of need an additional $5 million a year policy-makers, academics, and the our depth and breadth make a sin- Brookings’s five research programs. in “fundamental resources”—reli- broad public. Besides being easily gular contribution to the national Each of the programs, under the able, flexible funds. The plan also accessible and able to broadcast a debate and to national action.” leadership of its director, aspires to lays out standards and benchmarks wealth of material, our new Inter- “Forging ahead to reach this provide a significant contribution for strategically smart and fiscally net presence projects a new look, point took constant, focused dis- to the public debate. Some of the sound growth. one that more boldly declares that cussion and an enormous amount most critical challenges and oppor- “An investment in Brookings Brookings has consistently been the of wisdom,” said Strobe Talbott, tunities facing the United States is a prudent one, as its second preeminent American think tank, president of Brookings. “It also took and the world require insights and century promises to be even more and intends to remain so into 2016 a committed group of trustees will- recommendations from the experts productive than the first,” said and beyond. ■ 37 STATEMENT OF ACTIVITIES Years Ended June 30, 2007 and 2006 (in thousands) (Unaudited)

temporarily permanently 2007 2006 Unrestricted restricted restricted total total OPERATING REVENUES Investment return designated for operations $ 12,496 $ 12,496 $ 11,096 Grants and contracts 1,521 $64,822 66,343 33,141 Contributions 4,734 4,734 3,466 Conferences 3,955 3,955 4,230 Brookings Press 2,482 2,482 2,533 Information Technology Services 21 21 25 Interest and dividends 268 268 157 Rental income, net 217 217 243 Visiting scholars 108 108 100 Other income 152 152 7 Net assets released from restrictions— Grants and contracts 35,613 (35,613) 0 0 total Operating Revenues 61,567 29,209 90,776 54,998

OPERATING Expenses Program services Economic Studies 9,787 9,787 7,598 Foreign Policy 12,850 12,850 11,130 Global Economy and Development 5,337 5,337 2,839 Governance Studies 2,298 2,298 1,864 metropolitan Policy Program 7,006 7,006 5,876 other research 934 934 233 center for Executive Education 5,527 5,527 5,133 Brookings Press 2,835 2,835 2,709 communications 2,242 2,242 1,113 total Program Services 48,816 48,816 38,495 Supporting services: Management and General information Technology Services 2,864 2,864 2,673 administration 6,516 6,516 5,022 interest expense 24 24 32 post-retirement benefits 111 111 131 total management and general 9,515 9,515 7,858 Development 2,412 2,412 2,453 total Operating Expenses 60,743 60,743 48,806 Operating revenues over operating expenses 824 29,209 30,033 6,192

NON-OPERATING ACTIVITIES Investment return in excess of amounts designated for operations realized gain on sale of investments 20,203 20,203 20,938 Unrealized gain from investments 28,207 28,207 3,968 interest and dividends, net 1,424 1,424 1,718 investment income allocation (12,496) (12,496) (11,096) contributions 1,883 1,883 973 reclassification of Temporarily Restricted net Assets based on Donor’s Consent (588) 588 Change in net assets from investment activities 37,338 (588) 2,471 39,221 16,501 INCREASE IN NET ASSETS 38,162 28,621 2,471 69,254 22,693 Net assets at the Beginning of the Year 203,982 42,036 46,414 292,432 269,739 Net assets at the End of the Year $242,144 $70,657 $48,885 $361,686 $292,432 38 STATEMENT OF FINANCIAL POSITION As of June 30, 2007 and 2006 (in thousands) (Unaudited)

2007 2006

Assets Cash and cash equivalents $ 8,293 $ 8,347 Accounts receivable 3,694 1,859 Grants and contracts receivable 52,680 26,984 Pledges receivable 2,471 1,102 Accrued investment income 321 514 Inventory 538 562 Investments, at fair value 291,704 251,199 Land, buildings and equipment, net 12,891 11,358 Other assets 1,687 616 total ASSETS $374,279 $302,541

Liabilities Accounts payable and accrued expenses $ 5,387 $ 3,102 Accrued compensated leave 1,884 1,685 Accrued post-retirement benefits 4,681 4,622 Notes payable 28 150 Deferred revenue 613 Operating Revenue550s total LIABILITIES 12,593 10,109 65% Gifts and Grants Net Assets Unrestricted 242,144 203,9824% Government Temporarily restricted 70,657 42,036 Permanently restricted 48,885 46,4141% total Net Assets 361,686 292,432Miscellaneous

total LIABILITIES AND NET ASSETS $374,279 $302,5414% Publications

6% BCEE

20% Endowment Notes: As a nonprofit and scientific organization, Brookings is exempt from federal income Operating Revenues Program Expenses taxes under section 501(c)(3) of the Internal 18% Economic Studies Revenue Code. The Institution also qualifies 65% Gifts and Grants 3% as a publicly supported organization under Other Research section 170(b)(1)(A)(vi) of the code. 4% 5% The Brookings policy is to make an annual Government Communications 6% investment spending allocation for the sup- 1% Publications Miscellaneous port of operations. This amount is calculated 6% based on 70% of the prior year’s spending Development 4% adjusted for inflation and 30% of 5% of Publications 10% Global Economy the market value of the investments as of 6% 11% December 31 of the prior fiscal year. Certain BCEE BCEE reclassifications of prior year balances have 5% 20% Governance Studies been made to conform to the current year Endowment 13% presentation. Metropolitan Policy Program A copy of the Institution’s audited finan- 23% cial statements is available by request. Fo reign Policy Program Expenses 18% 39 Economic Studies

3% Other Research

5% Communications

6% Publications

6% Development

10% Global Economy

11% BCEE

5% Governance Studies

13% Metropolitan Policy Program 23% Fo reign Policy TRUSTEES

John L. Thornton Jeffrey W. Greenberg Beatrice W. Welters William A. Haseltine, Ph.D. Mario M. Morino Chair of the Board Chairman and CEO Founder President Chairman The Brookings Institution Aquiline Holdings LLC The An-Bryce Foundation The Haseltine Foundation Venture Philanthropy Partners Chairman Strobe Talbott Brian L. Greenspun Daniel Yergin Haseltine Global Health, LLC Maconda Brown O’Connor, Ph.D. President Chairman and CEO Chairman Trustee The Brookings Institution The Greenspun Corporation Cambridge Energy Research Associates Teresa Heinz Kerry The Brown Foundation, Inc. Chairman Robert J. Abernethy Glenn Hutchins HONORARY TRUSTEES Heinz Family Philanthropies Samuel Pisar, Ph.D. President Founder and Managing Partner International Lawyer American Standard Development Silver Lake Partners Leonard Abramson F. Warren Hellman New York and Paris Co., Inc. Consultant and Member of the Boards Chairman Joel Z. Hyatt of Directors of Children’s Hospital Hellman and Friedman LLC Steven Rattner Liaquat Ahamed CEO of Philadelphia and Johns Hopkins Managing Principal Former Chief Executive Officer Current Media, LLC University Samuel Hellman M.D. Quadrangle Group LLC Fischer Francis Trees and Watts, Inc. A.N. Pritzker Distinguished Shirley Ann Jackson, Ph.D. Elizabeth E. Bailey Service Professor J. Woodward Redmond Alan R. Batkin President Chair and John C. Hower Professor of The University of Chicago President Vice Chairman Rensselaer Polytechnic Institute Business and Public Policy J.W. Redmond & Company Eton Park Capital Management The Wharton School Robert A. Helman Kenneth M. Jacobs University of Pennsylvania Partner Charles W. Robinson Richard C. Blum Deputy Chairman Mayer, Brown, Rowe & Maw President Chairman and President Lazard Frères & Co. LLC Zoë Baird Robinson & Associates, Inc., Blum Capital Partners, LP President Roy M. Huffington CBTF Co., and M Ship Co. Suzanne Nora Johnson The Markle Foundation Chairman and CEO Geoffrey T. Boisi Senior Director, Retired Vice Chairman Roy M. Huffington, Inc. James D. Robinson III Chairman and Senior Partner The Goldman Sachs Group, Inc. Rex J. Bates General Partner and Co-Founder Roundtable Investment Partners LLC James A. Johnson RRE Ventures Harold Hongju Koh Louis W. Cabot Vice Chairman Arthur B. Culvahouse Jr. Dean of Yale Law School Chairman Perseus, LLC Warren B. Rudman Chair Yale University Cabot-Wellington LLC Of Counsel O’Melveny & Myers LLP Ann Dibble Jordan Paul, Weiss, Rifkind, William A. Owens James W. Cicconi Wharton & Garrison Alan M. Dachs Chairman and CEO Senior Executive Vice President– Michael H. Jordan President and CEO AEA Investors LLC External and Legislative Affairs Chairman B. Francis Saul II Fremont Group AT&T EDS Corporation President and Chairman Frank H. Pearl B.F. Saul Company Kenneth W. Dam Chairman and CEO A. W. Clausen Vernon E. Jordan Jr. Max Pam Professor Perseus, LLC Retired Chairman and CEO Senior Managing Director Ralph S. Saul of American & Foreign Law Bank of America Corporation Lazard Frères & Co. LLC Former Chairman University of Chicago Law School John Edward Porter Former President Of Counsel CIGNA Corporation Partner The World Bank Akin Gump Strauss Hauer & Feld, Steven A. Denning Hogan & Hartson LLP Henry B. Schacht Chairman William T. Coleman Jr. Managing Director and Senior Advisor General Atlantic LLC Edgar Rios Senior Partner and The Senior Breene M. Kerr Warburg Pincus LLC Executive Vice President Counselor President Vishakha N. Desai, Ph.D. Americhoice O’Melveny & Myers LLP Brookside Company Michael P. Schulhof President and CEO Chairman and CEO The Asia Society Haim Saban D. Ronald Daniel Marie L. Knowles Global Technology Investments Chairman and CEO Director Retired Executive Vice President and Thomas E. Donilon Saban Capital Group, Inc. McKinsey & Company, Inc. CFO Joan E. Spero Partner Atlantic Richfield Company (ARCO) President O’Melveny & Myers LLP Victoria P. Sant Robert A. Day Doris Duke Charitable Foundation President Chairman James T. Lynn Mario Draghi The Summit Foundation Trust Company of the West Retired CEO Vincent J. Trosino Governor Aetna Life & Casualty Company President, COO and Vice Chairman Bank of Italy Leonard D. Schaeffer Bruce B. Dayton of the Board Chairman Jessica Tuchman Mathews State Farm Mutual Automobile Kenneth M. Duberstein Surgical Care Affiliates Charles W. Duncan Jr. President Insurance Company Chairman and CEO Chairman Carnegie Endowment for International The Duberstein Group, Inc. Lawrence H. Summers Duncan Interests Peace John C. Whitehead Charles W. Eliot University Professor Alfred B. Engelberg Harvard University Walter Y. Elisha David O. Maxwell Stephen M. Wolf Trustee Retired Chairman and CEO Retired Chairman and CEO Chairman The Engelberg Foundation David F. Swensen Springs Industries, Inc. Fannie Mae Lehman Brothers Private Equity Chief Investment Officer Advisory Board Lawrence K. Fish Yale University Robert F. Erburu Donald F. McHenry Chairman Chairman and CEO Chairman of the Board (Retired) Distinguished Professor in the Practice R.R. Donnelly & Sons Company Citizens Financial Group, Inc. Larry D. Thompson The Times Mirror Company of Diplomacy and International Managing Partner Senior VP of Governmental Affairs, Affairs Alpilles, LLC Cyrus F. Freidheim Jr. General Counsel and Secretary Henry Louis Gates Jr., Ph.D. School of Foreign Service President and CEO PepsiCo, Inc. Director Georgetown University James D. Wolfensohn Sun-Times Media Group, Inc. W.E.B. Du Bois Institute Chairman Andrew H. Tisch Harvard University Robert S. McNamara Wolfensohn & Company, LLC Bart Friedman Co-Chairman of the Board Former President Former President Senior Partner Loews Corporation Robert D. Haas The World Bank The World Bank Cahill Gordon & Reindel Chairman of the Board Laura D’Andrea Tyson Levi Strauss & Co. Mary Patterson McPherson Ezra K. Zilkha David Friend Professor Executive Officer President President and CEO Haas School of Business Lee H. Hamilton The American Philosophical Society Zilkha & Sons, Inc. Carbonite, Inc. University of California, Berkeley President and Director The Woodrow Wilson Arjay Miller Ann M. Fudge Antoine W. van Agtmael International Center for Scholars Dean Emeritus Former Chairman and CEO Chairman and CIO Stanford Graduate School of Business Young & Rubicam Brands Emerging Markets Management, LLC 40 Editors: Melissa Skolfield and Susan Kellam Writers: Juliet Bui, Shawn Dhar, David Jackson, Ron Nessen PRODUCTION COORDINATOR: Adrianna Pita Design and Print Production: The Magazine Group, Inc. Jeffrey Kibler, Adriana Guevara, Brenda Waugh