2004 ANNUAL REPORT CONTENTS 8 Foreign 11 Policy Studies China Initiative 14 Saban Center for Middle East Policy

Home , Alexander Vershbow, Brooke Shearer, Madeleine Albright, Maureen White, Strobe Talbott

INDEPENDENT RESEARCH SHAPING THE FUTURE

ANNUAL REPORT THE 2004

1775 Massachusetts Avenue, NW Washington, DC 20036 www.brookings.edu BROOKINGSINSTITUTION 2004 ANNUAL REPORT CONTENTS 8 Foreign 11 Policy Studies China Initiative 14 Saban Center for Middle East Policy

15 The Poverty and Global Economy Initiative

16 29 Governance Environment and Energy Project Studies 30 The Brookings Institution Press

31 Center for Executive Education 20 Economic 2 About Brookings BROOKINGS 4 Chairman’s Message Studies 5 President’s Message 6 A Week at Brookings 34 Founder’s Society 35 Brookings Council 26 36 Major Gifts Metropolitan 38 Endowed Chairs Policy 39 Contributors 41 Financial Summary 43 Trustees 44 Brookings by the Numbers

Editor: Stephen G. Smith, Vice President for Communications Copyright ©2004 The Brookings Institution 32 Writers: Ron Nessen, Patrick Gavin 1775 Massachusetts Avenue, NW Design and Print Production: The Magazine Group, Inc. Washington, DC 20036 Support for Jeffrey Kibler, Virginia Reardon, Brenda Waugh Telephone: 202-797-6000 Production Coordinator: Adrianna Pita Fax: 202-797-6004 Printing: Jarboe Printing www.brookings.edu Brookings Cover Photograph: Fisher/Folio Library of Congress Card Number: 84-641502 THE BROOKINGS INSTITUTION

he Brookings Institution is an independent, nonpartisan research organization that seeks to improve the performance and the quality of U.S. public policies. Experts at Brookings have blue-ribbon academic credentials as well as long experience in business, government, and nonprofit organizations.Their research, aimed at offering practical approaches to policy questions, is presented in language that is both engaging and accessible to the general public. ■ Brook- ings has four main research programs: Economic Studies, Foreign Policy Studies, Governance Studies, and Metropolitan Policy. It also sponsors a variety of Tcenters and initiatives devoted to research areas including global poverty, national security, welfare reform, human rights, tax and budget policy, education, public service, regulatory policy, and particular regions around the world, including Europe, the Middle East, North- east Asia, and South Asia. ■ A major focus of the Brookings Institution’s efforts is to ensure that its research is effectively disseminated. Scholars write books, policy briefs, journal articles, and op-ed pieces.They testify on Capitol Hill and hold private, off-the-record meetings with policymakers, their staffs, and other experts seeking their advice. Brookings conducts regular press briefings open to the public at its Washington headquarters, which is also home to a television and radio studio. Most Brookings research is available at www.brookings.edu. ■ Brookings is named for entrepreneur and philanthropist Robert S. Brookings, whose leadership was instrumental in its early development. In 1916, a group of reformers founded the Institute for Government Research (IGR), the first private organization devoted to analyzing public policy issues at the national level. In 1922 and 1924, Robert Brookings, one of IGR’s backers, established two supporting sister organizations: the Institute of Economics and a graduate school bearing his name. In 1927, the three groups merged to form the Brookings Institution. ■ Today, Brookings is financed largely through the support of philanthropic foundations, corporations, and individuals and by an endowment. Funds are devoted to carrying out research and educational activities. Brookings also undertakes some unclassified government contract studies, reserving the right to publish its findings. ■ A Board of Trustees is responsible for supervising Brookings, approving its areas of investigation, and safeguarding the independence of its work.The Institution’s president Reporters question is its chief executive officer and is responsible for formulating and setting policies, recom- Charles “Jack” Pritchard, a visiting fellow in Foreign

mending projects, approving publications, and selecting staff. WILLIAMS TOM Policy Studies, after his return from a trip to North Korea 2 CHAIRMAN’S MESSAGE PRESIDENT’S MESSAGE

ear the end of the year, I made one of my regular visits to onpartisan public-policy research based on empirical evi- Brookings and got a glimpse of the Institution at its best, dence is an especially rare and valuable commodity in a from a somewhat unusual angle. I thought I would share this presidential election year. In 2004, Brookings’s job was to vignette of Brookings life because I think it captures the shed light on the issues that generated so much heat in the Nspirit and energy of the Institution. Ncampaign: Iraq,America’s relations with its allies, the federal deficit, One of China’s new, important regional leaders, Governor Zhang taxes, jobs, health care, stem-cell research, same-sex marriage, and Wenyue of Liaoning Province, was making his first visit to the United education. States. He had agreed to spend a morning at Brookings as part of what As our scholars brought their individual expertise to bear on ques- he hoped would be a crash course on American political, economic, tions that often polarized the electorate—tough issues on which neither and social trends. Richard Bush, director of the Brookings Center for major political party has a monopoly on truth or wisdom—they held to Northeast Asian Policy Studies, and his team organized a five-hour a high standard of civil discourse. For example, debating the war in Iraq briefing that gave the governor a good feel for America’s priorities and and its messy aftermath, our scholars kept their minds open to one allowed him to share his own thoughts on the problems and opportuni- another—and to the facts as they became clearer.Those who had ties he faces in trying to reform a region at the heart of China’s rust belt. accepted U.S. intelligence estimates about Iraq’s weapons of mass Brookings scholars were able to relate their work to many areas of destruction as a basis for military action recalibrated their analysis and vital interest to Governor Zhang.Amy Liu of our Metropolitan Policy adjusted their recommendations when no such weapons were found. program briefed him on innovative and sophisticated ideas about what Scholars in our Foreign Policy Studies department identified the makes cities successful—essential information for an official who will problems besetting the reconstruction effort and recommended a series oversee some of the largest and most rapid urbanization in history. Tom of changes, many of which the administration adopted during the year. Mann of Governance Studies briefed him on the intricacies of U.S. pol- Our new Center on the United States and Europe helped maintain a itics, providing crucial guidance for someone who hopes to bring his transatlantic dialogue at a time of intense strain between the U.S. and its economy into ever-closer alignment with the economy in the United key allies. States. Finally, Richard Bush gathered a high-powered group of Wash- On the home front, our economists’ estimates of the costs and distri- ington policymakers who engaged the governor in a lively lunchtime butional effects of the tax cuts proved useful to congressional staffs on chat about the future direction of U.S.-China relations.All in all, Brook- both sides of the aisle. Journalists and editorial writers across the country ings supplied a coherent framework for the important tasks ahead, and relied on a Brookings report,“Restoring Fiscal Sanity,” for authoritative, the governor was so grateful that he was still speaking of it weeks later. objective information about the federal budget. In the last debate with Providing this sort of clear, objective, and useful framework is what Senator Kerry, less than three weeks before the election, President Bush Brookings has always done best.What it does better than ever is respond himself used the term “fiscal sanity” three times—and promised to halve quickly and on an even wider range of issues. Because 2004 was a presi- the deficit within five years. dential election year, much of the activity at Brookings focused on Meanwhile, the deficit is forcing a reinvention of the American fed- John L. Thornton domestic politics. In a steady stream of forums, policy briefs, books, arti- Strobe Talbott eral system. Governors, county commissioners, and mayors are under KATHERINE LAMBERT KATHERINE cles, interviews, and website commentaries, our scholars assessed the LAMBERT KATHERINE increasing pressure to look for ways at the state and local levels to bol- state of the economy, the threat of terrorism, the occupation of Iraq, and ster economic innovation, equitable and efficient public services, urban other issues facing American voters. regeneration, and balanced growth.They need all the help they can get, We also began establishing the Brookings China Center, which I and they are getting it from our Metropolitan Policy program, which hope in coming years will become the leading American source of over the past eight years has taken sophisticated policy analysis far high-quality, objective research about China. Brookings pushed forward beyond the Beltway—to upstate New York,Pennsylvania, Missouri, on other international fronts as well, notably in South Asia, where our Florida, Georgia, Missouri, North Carolina, and California. scholars are in partnership with two Indian think tanks.The Saban Cen- Our Governance Studies program contributed to public understand- ter for Middle East Policy continues to provide indispensable connec- ing of the drama with a series of forums and policy papers that exam- tions to—and within—a region riven by conflict. ined everything from the effects of the “permanent campaign” to the I want to thank you for your continued support of Brookings and role of money and the new campaign finance law. In the weeks before encourage you to experience firsthand, the way I have, the work of our the voting, our scholars zeroed in on many of the factors that would outstanding scholars.At the Brookings website, www.brookings.edu, it’s prove decisive on Election Day, including the impact of all-out efforts to easy to download our best new research, print it, and review it at home mobilize constituencies and boost turnout. or while you travel. Like me, you’ll feel invigorated by the quality of Once the voters re-elected President Bush, he asked Democrats to our scholars’ work. It’s original, fact-driven, and fair-minded. Please feel help him make “this country stronger and better,” and John Kerry, free to get back to Brookings with your reactions. Our scholars wel- preparing to return to work in the Senate, pledged to reach across the come your feedback, and don’t mind a bit if you challenge their think- “partisan divide.” Brookings went about its own business in precisely ing.The contest of ideas, after all, is what Brookings is all about. ■ that spirit all year, and we will continue to do so in 2005, whatever challenges it holds for the nation at home and abroad. ■

4 5 Clinton stressed the mists undertook the proj- fessor William and the North Koreans interdependence between ect in hopes of finding a G. Mayer. Pan- admitted to reprocessing the United States and the way to get the budget back elists discussed plutonium. Islamic world and dis- in balance. Attending the the cascading Much of Pritchard’s A Weekat Brookings armed his Islamic audience luncheon were journalists primary and conversations with Vice FRIDAY, JANUARY 9, TO THURSDAY, JANUARY 15, 2004 by first admitting Ameri- from BusinessWeek, The caucus system Foreign Minister Kim Kye Work at Brookings tends to mirror the pace of official Washington, with slower Promotion of International Universal Education; can mistakes and pointing New York Times, The Wall that has short- Gwan focused on the pos- periods when Congress is in recess and during the dog days of summer. As the Trade on efforts to allow Seyyed Camel Al-Keilani, to problems Muslims face Street Journal, The Wash- ened the nomi- sibility of future six-party New Year’s holiday approached, and with many lawmakers back in their districts, elements of a market minister of finance in the in their own countries. ington Post, and other nation process talks that would involve Brookings scholars tied up loose ends and took vacation time with their families. economy into North Korea. Iraqi interim government; “There are honest and major news outlets. The to a sprint. One North Korea, South Korea, TOM WILLIAMS TOM It was the calm before the storm: When the calendar flips to a new year, Pritchard had been and Edward Djerejian, perplexing misunderstand- luncheon proved timely for Budget talk: Robert Rubin and Dan Crippen discuss of the pan- Japan, China, Russia, and especially an election year, Brookings scholars know that business will be brisk struck by the vibrant activ- director of the Baker Insti- ings. That’s why this meet- another reason, coming “Restoring Fiscal Sanity” elists, Mayer, the United States. The along Think Tank Row. ity he saw in Pyongyang, tute at Rice University and ing is a good thing,” he said. the day after a 60 Minutes was co-author Bush administration had So it was during the second week of January 2004, a week busier than whose streets buzzed with chair of the U.S. Commis- After Clinton’s speech, interview with Paul O’Neill, devolving responsibility with Andrew E. Busch of a consistently demanded a most but less hectic than some. The seven-day stretch provided a snapshot of Brookings in action. bicycles and automobiles. sion on Public Diplomacy. the audience, many of the former Bush adminis- to the states, and new Brookings book, The “complete, irreversible, Markets teemed with ven- The conference schedule whom were hostile to the tration Treasury secretary, reducing federal pork. Front-loading Problem in and verifiable” dismantling FRIDAY, JANUARY 9 ifa Al-Thani, the emir of where that sort of thing can dors selling clothing, food, was carefully designed to United States, gave the whose book, The Price of ■ A “larger government Presidential Nominations. of North Korea’s nuclear ore than 9,000 miles Qatar, opened the week- take place,” he said. “It’s and electronics. All of this allow for informal interac- former president a stand- Loyalty, warned of a loom- plan” relied both on tax program and had refused Mfrom 1775 Massachu- end’s events with a blunt useful.” differed greatly from the tion among attendees, ing ovation. Others praised ing “fiscal crisis.” increases to sustain gov- THURSDAY, to deal directly with the setts Avenue, Brookings assessment of the Arab- Peter W. Singer, Brook- stringent conditions during including extended coffee him for his clear, honest ernment activity and on JANUARY 15 country or offer any con- scholars joined 150 leaders Israeli conflict and the ings’s national security fel- his first visit in 1997, sug- breaks and a free Saturday explanation of U.S. inten- TUESDAY, new spending initiatives. n his first public com- cessions besides an assur- from the United States and need to push harder to low, directed the forum. He gesting that the quality of evening that prompted tions in the Middle East. JANUARY 13 ■ A “better government Iments since returning ance not to attack it. In the 37 Muslim countries in resolve the stalemate in said that merely holding life had improved markedly. many delegates to arrange At the close of the t a standing-room-only plan” called for im- from North Korea, Charles months after Pritchard’s Doha, Qatar, for the first the Middle East. He also the conference was an As Pritchard looked out private dinner parties. Dur- weekend, Singer hailed the Aevent in Falk Audito- proved government Pritchard spoke to an over- visit, the Bush administra- U.S.–Islamic World Forum. announced the opening of important step. “The fact the window, he thought ing the day, roundtable dis- conference as a powerful rium, three blue-ribbon efficiency and effective- flow crowd in Falk Audito- tion appeared willing to The forum—a new initiative a Brookings office in Doha that we were able to con- about his recent visit to a cussions spilled into the hall- convening body and a cata- panels discussed the 98- ness through a combi- rium about his trip and the adopt a more flexible of the Brookings Project to help organize the vene such a diverse group nuclear facility in Yong- ways and participants could lyst for action. “This has page “Restoring Fiscal nation of spending cuts future of U.S.–North Korea approach. on U.S. Policy Towards the U.S.–Islamic World project. of important leaders helped byon and what he would be seen arguing, nodding in become the meeting place Sanity” report. Panelists and revenue increases diplomacy. He chose his More than 80 members Islamic World, a Saban Al-Thani’s opening advance communication— say to the American public agreement, and swapping for U.S. and Muslim lead- included former Treasury that would balance the words carefully, putting off of the national and inter- Center for Middle East Pol- address set the tone for the that, by itself, is progress.” when he returned home. e-mail addresses. Among ers,” he said. “The fact that Secretary Robert E. Rubin, budget while maintain- more detailed comment national press were in icy program that was cre- weekend. Discussions in On his answering machine the spontaneously organ- we saw both agreement as former Congressional Bud- ing government at its until after delegation met- attendance, and Pritchard ated after the September subsequent plenary sessions SATURDAY, at Brookings, more than ized dinners were ones for well as the venting of anger get Office Director Dan L. current size. allurgist Siegfried S. later wrote an op-ed arti- 11 attacks—targets the need and working groups were JANUARY 10 50 interview requests delegates from Israel and demonstrates exactly why Crippen, Urban Institute The authors briefed Hecker could testify before cle about his visit for The for constructive dialogue substantive but sometimes n Beijing, visiting fellow awaited his response. Palestinian areas and from this conference was so President Robert D. Reis- Congress on their findings the Senate Foreign Rela- New York Times. between policymakers and tense, reflecting the charged ICharles “Jack” Pritchard Back in Doha, the con- India and Pakistan. important and successful.” chauer, former Congress- on several occasions and tions Committee. In his Wall Street Jour- opinion shapers in the political environment. sat in his hotel room, ference convened several The casual get-togeth- The forum will follow up man John Edward Porter made numerous media “The only piece of infor- nal column that morning, United States and across A particularly interest- watching the snow fall on panels throughout the day ers spurred action on sev- the Doha meetings with a (R-Ill.), and members of appearances. The project mation I will give you Al Hunt praised the Muslim states and commu- ing exchange occurred the bustling streets below. to examine the Iraq war, eral fronts: “Track 2” peace series of joint initiatives— the nine-scholar team that generated more than 80 today,” Pritchard said, “is Restoring Fiscal Sanity nities. The Doha confer- between Fox News Chan- He was sorting out conver- the Middle East peace discussions (unofficial, civil- research, publications, and had spent three months articles in major daily and that the spent-fuel facility— project. “If, as politicians ence aimed to create a nel’s Tony Snow and Al sations and impressions process, free trade and ian diplomacy), a foreign outreach—designed to working on the project. weekly publications. the storage pond—was of both parties insist, the much-needed venue for Jazeera’s deputy manag- from his previous five days economic development, policy caucus of American strengthen ties between Rubin said that the empty.” The pond once long-term goal is to get candor and cooperation ing editor, Maher Abdullah, in North Korea. education, and the role of Muslim leaders, and a part- the United States and the United States faced a “hor- WEDNESDAY, held 8,000 spent fuel rods. back to a balanced budget between the United States who both spoke on a panel Pritchard, who left his the private sector in easing nership between a U.S. Islamic world. rendous long-term situa- JANUARY 14 Since transporting the rods in good times, the report and the Islamic world. examining the media’s cov- Bush administration post tensions between Muslim foundation and the Egypt- tion,” adding that “the risks ess than a week before to a safe location would this week by the Brookings Sheikh Hamad bin Khal- erage of the Middle East. as special envoy for nego- countries and the United ian government to build an MONDAY, are severe and they need Lthe Iowa caucuses, have been extremely dan- Institution is even more Martin tiations with North Korea States. Speakers included American nursing school in JANUARY 12 to be taken very seriously.” Brookings rang in the elec- gerous and impractical, sobering….To get to a bal- Indyk, direc- in August 2003, had trav- Marwan Muasher, foreign Cairo were established. ack in Washington, The authors argued tion year with a briefing many in the delegation anced budget in a decade, tor of the eled to Pyongyang as part minister of Jordan; BBrookings held a press that achieving fiscal bal- titled “‘Front-loading the concluded that the rods the Brookings experts fig- Saban Cen- of an unofficial U.S. dele- Mohammed Dahlan, former SUNDAY, JANUARY 11 luncheon to unveil its ance would be difficult but Primaries: The Wrong had been reprocessed to ure, would require elimi- ter and one gation invited by the North interior minister for the have come a long Restoring Fiscal Sanity possible, and they pre- Approach to Presidential extract plutonium from the nating virtually all federal of the con- Korean government. Dur- Palestinian Authority; “Iway to spend a short project so that journalists sented three options for Politics?” Panelists included spent fuel, which could grant-in-aid programs for veners of the ing his visit, he met with Richard Holbrooke, former time because I believe that would have background for reducing the deficit over Brookings Journalist-in- then be used to build a education, housing, job forum, wit- Vice Foreign Minister Kim U.S. ambassador to the this is an important meet- the next night’s State of the next 10 years: Residence Ron Nessen, sen- nuclear weapon. Although training, the environment, nessed the Kye Gwan and former United Nations; Qazi Hus- ing, being held in the the Union address and the ■ A “smaller government ior fellow Thomas E. Mann, Pritchard said that the and law enforcement. But dispute and Deputy Ambassador to the sein Ahmed, leader of the proper place,” said former release of the president’s plan” advocated less visiting fellow and Colby reprocessing center was that still wouldn’t do the applauded it. United Nations Li Gun, and Jamaat-e-Islami Party of President Clinton in a budget on February 2. Con- spending by scaling College Professor Anthony not functioning at the time trick; $134 billion more in

KHALED MOUFTAH/AFP/GETTY IMAGES KHALED MOUFTAH/AFP/GETTY “This is the was briefed by a member Pakistan; Gene Sperling, speech that closed the cerned about the swelling back business subsidies, Corrado, and Northeastern of his visit, a five-megawatt tax increases for that year Doha: President Clinton and the Emir of Qatar meet at only place of the Committee for the director of the Center for Doha conference. deficit, Brookings econo- restricting entitlements, University Associate Pro- reactor was operational, would be necessary.” ■ the January conference 6 7 Foreign Policy Studies

n a year when the Iraq war, the nuclear crises in North Korea and Iran, and continuing concern about terrorism dominated the headlines, the Foreign Policy Studies program, directed by Vice President James B. Steinberg, once again served as a key resource for government, news media, and the public. Brookings scholars offered an informed, objective view of world events and innovative policy ideas as they testified before Congress; advised the executive branch; presented their recommenda- Itions and opinions in newspapers, journals, and magazines; and shared their expertise on news and talk programs. In addition to examining urgent topical events, Brookings experts researched, analyzed, and commented on a range of other issues of growing importance in the 21st century, such as America’s strained ties with Europe, its evolving relationship with China and key partners in East Asia (Japan, Korea, and Taiwan), and its complex interactions with the Islamic world. Critical issues such as global climate change, the international rules governing the use of force, and homeland security were also at the forefront of Brookings scholarship. These efforts resulted in new and expanded research centers, projects, and initiatives. Iraq, of course, was a major focus at home and abroad, and Foreign Policy Studies brought to bear its expertise, drawing on the Saban Cen- ter for Middle East Policy, directed by senior fellow Martin Indyk, former U.S. ambassador to Israel and former assistant secretary of state for Near East affairs, and other Brookings analysts, including Ivo Daalder, Philip Gordon, and Steinberg. The primary Brookings scholar on Iraq was Kenneth Pollack, director of research for the Saban Center and former Iraq specialist at the CIA and the National Security Council. He provided keen analysis based on his government experience and firsthand observations in Iraq after the war. The Iraq analysis by Foreign Policy scholars was quoted in more than 1,500 newspaper and television news reports. Brookings scholars also wrote more than 60 op-ed articles on Iraq for major newspapers. In one of the most innovative examples of Brookings scholarship, senior fellow Michael O’Hanlon, who holds the Sydney Stein Jr. Chair, Senior fellow Ivo Daalder, flanked by and senior research assistant Adriana Lins de Albuquerque compiled a Robert Kagan of the Carnegie Endowment, periodic “Iraq Index” to quantify and track progress and setbacks in left, and Javier Solana, the EU’s foreign policy chief, assesses U.S.-Europe relations reconstruction and security during the post-war period.The Index is

after Iraq WILLIAMS TOM published regularly on the op-ed page of The New York Times. 9 FOREIGN POLICY STUDIES or plans to develop, special Asian and Pacific issues. He Jin Wei will lend to the China Initiative expertise. These areas became the initiative’s first initiative his expertise on include energy security, full-time senior fellow in China’s economic inte- hina—a huge Working closely with political and economic July and is an expert in gration. Wei has served nation, the partners in China, the ini- reform, urban develop- Chinese military and secu- as an advisor to the Central to understanding the world’s most tiative will develop timely, ment—and developing bet- rity affairs and elite politics. International Monetary larger context of the war and its populous. Its independent analysis and ter understanding between Before joining Brookings, Fund, a faculty research aftermath is America’s long-term economy policy recommendations to the elites and ordinary he was associate professor fellow with the National relationship with the Islamic Cdeveloping rapidly, its help U.S. and Chinese lead- people in China and of political science and co- Bureau of Economic world.The Brookings Project on political institutions evolv- ers address key long-term between China and the director of the Asian Stud- Research, and a research U.S. Policy Towards the Islamic ing more slowly. Halfway challenges. rest of the world. Brook- ies at Utah State University. fellow with Harvard Uni- World is a unique research and around the globe from the “When you ask govern- ings will also continue to versity’s Center for Inter- outreach program focused on United States, it casts a ment officials and busi- focus on key issues that ■ Kenneth Lieberthal, a national Development. this important issue. Directed by large shadow across the nesspeople in the United are the subject of ongoing renowned Sinologist from national security fellow Peter W. world stage. States where to go for research, including China’s the University of Michigan, “The addition of these Singer, the project is supported “The rise of China and information and under- important regional and was the National Security experts, plus the continuing by the John D. and Catherine T. its impact on the world is standing about China, global security interests. Council senior director for contributions of Richard MacArthur Foundation, the Ford the most important geopo- you get eight different Underscoring Brook- Asia under President Clin- Bush, director of Brookings’s Foundation, the Education for litical event of the 21st cen- answers,” Thornton says. ings’s commitment to the ton. He is taking a sabbati- Center for Northeast Asian Employment Foundation, the tury,” says Brookings Board “In China, when you ask initiative is the affiliation cal from the university to Policy Studies, provides the United States Institute of Peace, Chairman John L. Thorn- who in the West knows the of highly regarded schol- join Brookings as a visiting program with an excellent the Government of Qatar, and ton. “The U.S.-China rela- most about China, they ars with the project: fellow and help shape the core group of eminent Sinol- individual donors. tionship is the central rela- reply, ‘No one.’ China initiative. ogists and a solid base from The controversy over the U.S. tionship of the 21st century. “We want the answer ■ Jing Huang is a distin- which to launch our new military intervention in Iraq spot- Our two countries must in both cases to be guished professor and ■ Economic Studies pro- and important work on lighted a growing international understand each other with ‘Brookings.’ ” award-winning author on gram senior fellow Shang- China,” Steinberg says. ■ debate on the rules and institu- much greater depth.” Thornton—who has tions that should govern the use of So strongly does Thorn- taught at Tsinghua Univer- force.To help inform the discus- ton believe in the need for sity in Beijing and else- sion at home and abroad, Brook- the two nations to under- where in the provinces— ings has launched a two-year pio- stand and cooperate with says Brookings intends to neering project, Force and each other that he pledged develop deep ties with Legitimacy in the Evolving Inter- $1 million a year for the government officials, national System, led by Steinberg James Steinberg, director of Foreign next five years to fund a scholars, intellectuals, and Daalder. Policy Studies, opens the inaugural new Initiative on China. All business executives, and Brookings scholars, together conference of the Center on the United four research programs what he calls “the new States and Europe with their counterparts from WILLIAMS TOM joined forces to work generation of Chinese Europe, China, Russia, Mexico, critical questions about priorities work, the Foreign Policy Studies The program launched the under the direction of leaders.” While the initia- South Asia, and South Africa, will and strategies to deal with the ter- team was joined by visiting fellow Center on the United States and James B. Steinberg, vice tive will be based at Brook- examine the institutional arrange- rorist threat to the United States. Richard Falkenrath, former deputy Europe (CUSE), reflecting a long- president and director of ings, it also will have an ments and rules governing the use Even before 9/11, Brookings homeland security advisor and term commitment to this issue. Foreign Policy Studies. As ongoing presence in China. of force, and formulate recom- scholars were in the forefront in deputy assistant to President Bush. Representing an expansion of former deputy national “China has an inex- mendations for revising those considering homeland security. The war in Iraq has strained Brookings’s Center on the United security advisor under haustible need for good arrangements. This work accelerated after the America’s relationship with States and France, CUSE com- President Clinton, Stein- ideas,” Thornton says, “so “This project is a natural out- attacks and included reviews of Europe, particularly with long- prises separate research programs berg played a large role in Brookings is a good partner.” growth of our work on alternative homeland security efforts and standing allies such as France and that focus on France, Italy, and U.S.-China relations. He points to what he foreign policy strategies for the intelligence reform.The Markle Germany. But other developments Turkey. “We need to do some- calls the “applied research” United States,” Steinberg says, Foundation supported Steinberg have also had an impact as Europe “The Center significantly thing different from the Brookings has conducted “including studies on power and in a research project focused on continues to modify traditional broadens the scope of our work normal think-tank focus on for decades, research that cooperation among nations, and understanding and reducing the concepts of sovereignty and the on America’s relationship with its U.S.-China relations,” helped in creating the Mar- on the future of arms control.” obstacles to information sharing nation-state in favor of economic most important allies,” says Philip Steinberg explains. “We shall Plan, the United The project is supported by across sectors and borders. and political union. Given the Gordon, director of CUSE. need to seek a greater Nations, and many other grants from the Carnegie Corpo- O’Hanlon, along with several strategic importance of these CUSE’s inaugural conference, understanding of internal important post–World War ration of New York, the William Brookings colleagues, is writing a changes for the United States, the held at Brookings in April, fea- issues facing China’s lead- II institutions. and Flora Hewlett Foundation, the book-length study evaluating the Foreign Policy Studies program tured a panel of guests from the ership and the conse- The Initiative on China MacArthur Foundation, and the progress on homeland security placed high priority throughout United States and Europe, includ- quences of these issues will focus on areas in Rockefeller Brothers Fund. and offering recommendations for the year on analyzing the transat- ing Javier Solana of the European for China, the U.S., and the which China has special The war in Iraq also raised improvement.To help with this lantic relationship. Union; Pascale Andreani, Euro- world at large.” needs and Brookings has, The economic bustle of the new China as seen along Nanjing Road in Shanghai 10 11 pean affairs advisor to the French Brookings Chairman John L. examines both the foreign policy omy Initiative, shared between the the gap between the natural sci- Another book, Corporate War- organization in Syria that seeks to prime minister; and Klaus Schar- Thornton has long taken an active consequences and the internal Foreign Policy Studies and Eco- ences and the policy community. riors:The Rise of the Privatized Mili- raise awareness of issues such as ioth, Germany’s deputy foreign interest in China’s development, dynamics of a Russia in transition. nomic Studies programs, which The program’s first Science and tary Industry, by national security civil society, minority rights, and minister. and he provided generous support Hill and Gaddy are documenting focuses on the risks and opportu- Technology fellow was Michael fellow Peter Singer, was short- democratization. In spring 2004, the Center also to help launch the Brookings Ini- the rise of Russia as an energy nities associated with the new Levi, former director of the listed for the Gelber Prize.Among published a major new study of tiative on China.With activities in superpower and analyzing the global economy and on the pro- Strategic Security Project at the the notable reviews of Foreign ■ Abdel Monem Said Aly, an transatlantic diplomacy concerning both the United States and China, implications for Russia and its found challenge of poverty. Federation of American Scientists, Policy Studies work was “Destiny Egyptian journalist, joined the Iraq,“Allies at War:America, the initiative’s goals are to deepen partners in the international com- An important related project is who completed a book with at 60 Degrees C,” published late Saban Center as a visiting fellow Europe, and the Crisis Over Iraq,” U.S. understanding of political, munity.The two scholars are also senior fellow Susan Rice’s multi- O’Hanlon titled The Future of last year in The Economist, review- to write a monograph on U.S.- by Gordon and Jeremy Shapiro, social, and economic issues in studying poverty and emigration year, multidisciplinary study of the Arms Control; the second is ing Gaddy and Hill’s book The Egypt relations. CUSE director of research. China, and to assist policymakers in Central Asia and their effects on relationship among global poverty, Michael B. d’Arcy, an atomic Siberian Curse: How Communist Sponsors of CUSE include the in both countries as the relation- the countries of Central Asia and inequality, and U.S. national secu- physicist who comes to Brookings Planners Left Russia Out in the ■ Flynt Leverett, former senior German Marshall Fund of the ship evolves (see story, page 11). on Russia—the primary destina- rity. In addition, senior fellow Ann from the National Institute of Cold. director for Middle East policy at United States, the Daimler- More broadly, East Asia remains a tion of Central Asian émigrés. Florini examined the increasingly Standards and Technology. In addition to the program’s the National Security Council, Chrysler Corporation, the Coun- region of paramount importance The assassination attempt important role of the supranational The path-breaking work of permanent scholars, each year a joined the Saban Center as a visit- cil for the United States and Italy, for the United States.The Foreign on Pakistani President Pervez and transnational institutions and Senior fellow Richard Brookings scholars has been number of extraordinary scholars ing fellow to write a monograph, Bush assesses the the Luso-American Foundation, Policy Studies program continued Musharraf late last year, the peri- arrangements that are shaping chances of halting a widely recognized by their peers. from around the world join the due for publication in late 2004 or and a number of individual its commitment to analyzing criti- odic emergence and capture of al global governance in the 21st cen- nuclear build-up in This year, America Unbound:The program for project-specific work. early 2005, on Syria since the donors. cal issues in that region through Qaeda members in Pakistan, and tury. She also is looking into the North Korea Bush Revolution in Foreign Policy,by Notable additions in the past year death of Hafiz al-Asad. Although most of the world’s the Center for Northeast Asian the violent chaos on the border issue of transparency. WILLIAMS TOM Daalder and former senior fellow included the following: attention is focused on the Middle Policy Studies (CNAPS). between Pakistan and Afghanistan Senior fellow Roberta Cohen around the world who have been James Lindsay, won the 2003 ■ Rizwan Zeb, a research analyst East, Foreign Policy Studies con- Under the leadership of Direc- make Foreign Policy Studies sen- and nonresident senior fellow forced from their homes by Lionel Gelber Prize for outstand- ■ Ammar Abdulhamid, a Syrian at the Institute for Regional Stud- tinues to explore other issues of tor Richard Bush, holder of the ior fellow Stephen Cohen’s new Frances Deng co-direct the armed conflict, internal strife, nating writing on international affairs author and political activist, came ies in Islamabad, Pakistan, joined long-term strategic concern as Michael H.Armacost Chair, book, The Idea of Pakistan, particu- Brookings-SAIS Project on Inter- ural disasters, or other crises, but and received honorable mention to Brookings as a guest scholar in Brookings as a visiting scholar to well, including the emergence of CNAPS completed its fifth year of larly timely. nal Displacement, which promotes have stayed within their national for the Arthur Ross Prize, which the Islamic World project.Abdul- continue his work developing rec- China as a political and economic a program that brings mid-career Nearly every day brings a national, regional, and interna- borders and, therefore, often are honors books that analyze impor- hamid runs DarEmar, a publishing ommendations for resolving the force and global power. professionals from countries in the reminder that policymakers and tional efforts to help people not protected by international tant current events. house and nongovernmental India-Pakistan conflict. ■ region to Brookings to con- the public in the United agreements. duct research and network States need to deepen their Nigel Purvis, Brookings Francis M. Deng, co-director of the with their U.S. counterparts. understanding of the com- scholar on the environment, devel- Brookings-SAIS Project on Internal Dis- The addition to the plex political, social, and opment, and global issues and a placement, reports on his visit to Darfur CNAPS staff of visiting fellow economic dynamics of this former deputy assistant secretary Charles “Jack” Pritchard, for- region. In addition to com- of state for oceans, environment, mer special envoy for negotia- pleting his manuscript, and science, worked with col- tions with DPRK (North Cohen, also an expert on leagues in Foreign Policy and Korea) and senior director for India, helped lead the Economic Studies to provide a Asian affairs with the Brookings partnership with unique perspective on global envi- National Security Council, the Observer Research ronmental issues. During the past deepened Foreign Policy Foundation, an emerging year, he led research on the conse- Studies expertise on Japan and think tank in New Delhi. quences of global climate change. Korea. Brookings scholars do Purvis’s expertise was augmented The trial of oil mogul not merely comment on by that of environment scholar Mikhail Khodorkovsky, tur- current events; they also David Sandalow, former executive moil in Georgia, and the discover and explain the vice president of the World grinding war in Chechnya newest trends and most Wildlife Fund and a former gov- were reminders that Russia compelling forces underly- ernment official specializing in and its former empire ing the longer-term trajec- environmental issues (see story, remained important compo- tory of U.S. foreign policy. page 29). nents of the global political Lael Brainard, the New Thanks to the generous sup- TOM WILLIAMS TOM WILLIAM PHILPOTT/REUTERS/CORBIS and economic landscape. Century Chair in Interna- port of the John D. and Catherine Defense Secretary Donald Rumsfeld discusses a Senior fellows Fiona Hill tional Trade and Econom- Senator Hillary Rodham Clinton (D-N.Y.) describes T. MacArthur Foundation, the study of public service by Brookings senior fellow and Cliff Gaddy are engaged ics, directs Brookings’s how trips to Iraq and Afghanistan shaped her views on program has added a Science and Paul Light fighting terrorism

in an ongoing project that Poverty and Global Econ- Technology fellow to help bridge MICHAEL CORCORAN THOMAS 12 13 Global Poverty

he Poverty and Global Economy Initia- Saban Center and Global tive, were made possible Economy Ini- by grants from Richard C. believe that ideas can from the region to hash out Qatar, brought broker to keep both sides talking, tiative is “an Blum, the initiative’s found- move nations to approaches to key issues. together 165 informally at least, laying the foun- incubator for ing funder, and the William “ action. I wanted to With so much governmental, political, busi- dation for future reconciliation. Tideas,” says Director Lael and Flora Hewlett Founda- bring together the best public, and news media attention ness, academic, The Israeli-Palestinian conflict Brainard. tion. Other funding came minds from the United focused on Iraq during the past media, and civil and the war in Iraq are not the This unique initiative from the General Electric States and the Middle year, it’s not surprising that the society leaders only issues that the Saban Center is multidisciplinary—what Foundation and the Alfred East to engage in a Saban Center devoted considerable from the sees as vital to its mission of creat- Brainard calls “a pioneer- P. Sloan Foundation. creative dialogue, to conduct in-depth resources to analyzing the war and United States ing dynamic initiatives to improve ing approach”—drawing At the conference, par- studies,I and to generate policy initia- its aftermath. Much of the analysis and 38 Muslim the region and the world. expertise from Brookings ticipants laid out a forward- tives that could improve our world,” was done by Kenneth Pollack, countries. Research fellow Tamara Cof- scholars in areas ranging looking strategy for the explains entrepreneur Haim Saban, director of research for the Center Former man Wittes, an expert in political from foreign policy, eco- United States: increasing who founded the Saban Center for and a former Iraq expert at the CIA President Clin- development, thinks that democra- nomics, and governance and restructuring foreign Middle East Policy at Brookings. and the National Security Council. ton and Sheikh tizing the Middle East is a national to development, law, and aid; expanding interna- “The Saban Center was estab- “There is certainly much room Hamad bin security imperative. She has begun environmental science. tional trade through multi- lished to apply a long view and seri- for argument over how well the Khalifa Al- a major research project to evalu- Twenty Brookings scholars, lateral agreements while ous research to the quandaries and United States is handling Iraq and Thani, the emir ate U.S. aid for promoting democ- working in collaboration protecting workers and opportunities the United States faces what we should be doing differ- of Qatar, were racy in the Arab world and to with experts from 10 coun- farmers; and directing in the Middle East—the threats of ently,” Pollack wrote in a Saban the keynote explore new strategies for encour- tries, are involved in the more money, from both war, the opportunities for peacemak- Center policy analysis paper after speakers. Clin- aging political and economic initiative. government and private Residents of Manila scrounge for food at a waste dump

ing, the scourge of terrorism, and the a trip to Iraq. Pollack frequently ton, a member WILLIAMS TOM reform in the region. The goal, says Brainard, sources, to development in challenges of political and economic shares his knowledge and insights of the Saban Martin Indyk, director of the Saban Center, led a wide-ranging Another major focal point in the New Century Chair in poor countries. project found, only 7,500 of the Center for Govern- development,”says Saban, chairman with various U.S. government Center’s Inter- examination of challenges facing the U.S. in the Middle East the Middle East is Iran.Visiting International Trade and Such joint government Peace Corps volunteers ment and Business at of the Center’s International Advi- agencies and the military on national Advi- fellow Shaul Bakhash, a professor Economics, “is to offer and private involvement in were placed in other coun- Harvard’s Kennedy School sory Council and its primary source developing, implementing, and sory Council, declared:“We can- research—that answer these chal- of history at George Mason Uni- compelling recommenda- addressing the challenges tries, less than half the and Ngaire Woods of of financial support. revising policy approaches. not understand U.S.-Islamic lenges and are able to promote versity, provides expertise on that tions, founded on fact- of globalization is a major peak strength in the 1960s. Oxford University, Florini Saban Center Director Martin Looking beyond Iraq, the most relationships unless we understand more positive interaction with the complex country.At Brookings, he based research and sound focus of the initiative. One Among the ideas sug- is investigating the corpo- Indyk, former U.S. ambassador to profound and urgent long-term the sweeping scope of the interde- Muslim world.” initiated the Iran Working Group, analysis. We hope our example is the work of gested by the project were rate role in influencing Israel and former assistant secre- issue confronting the United States pendent world, its enormous ben- The other major source of which held a series of discussions work will materially shape Brookings scholar Michael collaborations between the the rules that govern tary of state for Near East affairs, is its relationship with the Islamic efits, and its persistent inequalities tension in the Middle East that about Iran’s foreign policy and the policy debate on how Kremer. In his book Strong Peace Corps and other globalization. She is also says the year was a challenging world.America must develop poli- and instabilities.” directly affects U.S. interests the future of U.S.-Iran relations. to reduce global poverty, Medicine, Kremer pro- international volunteer examining what incen- one for his scholars. cies to reduce the appeal of violent The Doha conference will is the Israeli-Palestinian conflict. Bakhash is working on a book lead to practical recom- posed a system of govern- organizations in new areas tives exist to encourage “From proliferation of religious extremism while improv- become an annual event.And Through the generous support of examining Iran’s political structure mendations, and capitalize ment incentives that would of assistance, such as com- corporations to adopt and weapons of mass destruction to ing its relations with Muslim states working-group meetings will be S. Daniel Abraham, the Saban and its reform movement. Ken on the opportunities pre- encourage pharmaceutical bating and treating abide by codes of public the war on terrorism, from Arab and communities. held in other parts of the Islamic Center has established an ongo- Pollack also recently completed a sented by globalization in companies to undertake HIV/AIDS. responsibility. political reform to promoting Toward this end, Brookings world.The Project on U.S. Policy ing, informal dialogue called book, The Persian Puzzle: Conflict the areas of trade, invest- risky and expensive Senior fellow Ann The Poverty and Global peace between Israel and the established the Project on U.S. Pol- Towards the Islamic World also “Track 2.” Participants have Between Iran and America, which ment, and economic research to develop vac- Florini is examining the Economy Initiative is also Palestinians, from the American icy Towards the Islamic World. organizes other meetings of high- included current and former looks at the history of the coun- development.” cines and medications for role that corporations play studying offshoring—the intervention in Iraq to persuading Directed by Peter W.Singer, level policymakers in Washington, Israeli and Palestinian cabinet tries’ relationship and the future In the summer of 2004, diseases like malaria and in achieving—or hindering— loss of American jobs to problematic states like Iran, Libya, Brookings’s national security fellow, hosts visiting fellows from Muslim ministers, legislators, and security of U.S. policy toward Iran. the Poverty and Global tuberculosis, which prima- the UN’s Millennium Devel- lower-wage countries. and Syria to change their behav- the project is a major research and nations, issues monographs and officials, along with officials of the The work of visiting fellow Economy Initiative, the rily affect people in poor opment Goals in poorer At a standing-room- ior, the Saban Center is at the cut- outreach program supported by analysis papers, and publishes a U.S. State Department and the Flynt Leverett, former National Aspen Institute, and Real- countries. Under his plan, countries. Approximately only workshop, U.S. gov- ting edge of the policy debate, Brookings, the government of book series through the Brookings National Security Council. Security Council senior director izing Rights: The Ethical governments, international 1,400 companies have ernment economists and applying its expertise to the Qatar, the John D. and Catherine T. Institution Press. One discussion focused on for the Middle East peace process Globalization Initiative organizations, and private agreed to abide by a set of statisticians looked at immense challenges confronting MacArthur Foundation, the Ford “The rise of extremism and developing criteria to ensure the under President Bush, is focused brought together more foundations would commit principles in the areas of available data on off- the United States in this troubled Foundation, the Education for terrorism is directly linked to successful implementation of on states in the Middle East that than 40 international lead- to buying and distributing human rights, environ- shoring and identified region,” Indyk says. Employment Foundation, and the deeper problems of governance, Prime Minister Ariel Sharon’s pro- have traditionally been viewed as ers from the public, pri- the drugs. ment, and labor. But critics research gaps that make The Saban Center’s staff mem- United States Institute of Peace. economic growth, and the security posal for Israel to withdraw unilat- “problematic,” such as Syria, Libya, vate, and nonprofit sectors Another initiative proj- claim that corporations are it more difficult to develop bers, who have both policy and Early in 2004, the project of citizens,” Singer says.“As a erally from the Gaza Strip and and Iran. Leverett is writing a for a conference titled ect, directed by visiting not living up to their com- a policy agenda. The academic expertise, conduct in- staged the first U.S.–Islamic World result, we face new actors, new parts of the West Bank. book on Syria’s foreign policy, the “America’s Role in the scholar Lex Rieffel, was mitments and are, instead, workshop followed two depth research and analysis and Forum, to promote dialogue and challenges, and new threats in the At a time when no official history of its relations with the Fight Against Global aimed at strengthening exploiting labor as global- high-profile forums with present innovative ideas for resolv- build networks of cooperation 21st century.To deal with them, Israeli-Palestinian exchanges are United States, and the strategies he Poverty.” and expanding the role of ization advances. members of the U.S. ing these challenges.The Center between American and Muslim the United States has to develop possible, the Saban Center has been believes America should adopt to This event, and other the Peace Corps. At the Working with John Senate on offshoring also brings together major figures leaders.The conference, in Doha, new strategies—based on solid able to use its standing as an honest affect Syria’s behavior. ■ activities of the Poverty beginning of 2004, the Ruggie and Jane Nelson and U.S. trade policy. ■ 14 15 Governance Studies

ith 2004 a presidential election year, the views of many Governance Studies scholars—experts on polling, campaigning, fund-raising, redistricting, media coverage, polarization of the electorate, and other political topics—were much in demand by both scholarly publications and the news media. WTake Thomas E. Mann, the W.Averell Harriman Chair at Brookings and one of the nation’s best-known political experts. His writings on the election appeared in publications ranging from the Election Law Jour- nal to Reader’s Digest. He also gave nearly 1,500 television, radio, and newspaper interviews in the year leading up to the election. Stephen Hess, who has served as an aide to presidents dating back to Dwight D. Eisenhower and is an expert on the news media’s role in politics, was not far behind with almost a thousand interviews. By offering their knowledge and insights to a wide variety of audi- ences—from the academic community and policymakers to reporters and the general public—Governance Studies scholars were fulfilling the Insti- tution’s mandate “to ensure that its research is effectively disseminated.” Media interviews were but one part of the election year activities of the Governance Studies program. A major undertaking of the program was the Election 2004 project. In a series of public forums and policy papers, the project examined both short- and long-term factors surrounding the presidential election process.These issues included the primaries, the post-primary period, the effects of the “permanent campaign,” how impending elections affect actions by an incumbent president and Congress, and the role of money and the new campaign finance law in the 2004 election. The purpose of the forums presented by the project was to “foster an informed civil dialogue” among scholars, officeholders, candidates, and advocacy groups.“Our goal was to provide the public, academic community, and members of the media with accurate, balanced information to help them understand and cover the 2004 elections,” says Pietro Nivola, the new vice president and director of Governance Studies. Other Brookings activities during the run-up to the election included a conference, directed by Mann, to kick off a multiyear project on the effects of congressional redistricting. Coincidental with Nivola’s appointment, Governance Studies tight- Senior fellow Thomas Mann, flanked by ened its focus to the study of political institutions in the United States visiting fellow Anthony Corrado, left, and journalist-in-residence Ron Nessen, and other countries.The Center on Social and Economic Dynamics, weighs the impact of “front-loading” WILLIAMS TOM and research involving economics in developing countries, were the presidential primaries 17 GOVERNANCE STUDIES series of forums at Brookings reading of supposedly Mann for Political Seasons that examined partisanship, objective conditions in the role of issues, how cam- the country. nalysis and called 527s—after a provi- break the unhealthy nexus paigns affect election out- ■ The primacy of foreign testimony by sion of the tax code under among large donors, politi- comes, and voter mobiliza- policy and national secu- Thomas E. which they register—gar- cal parties, and elected offi- tion and turnout. rity in the campaign. returned to the Economic Studies Carol Graham, who directed Mann, the nered a lot of attention for cials and to restore the A final forum, shortly ■ The sudden collapse of program; global governance issues Governance Studies for the past Brookings Insti- the ads they ran for and effectiveness of a long- after the election, analyzed Howard Dean and the moved to the Foreign Policy two years, has returned to the Atution’s resident expert on against Bush and Kerry. standing ban on corporate how election mandates are speed with which Democ- Studies program. Economic Studies program, where elections and politics, Some 527s spent signifi- and union contributions in defined and promoted, and rats rallied behind Kerry. “The purpose of Governance she has undertaken a research played an important role in cant amounts of money federal elections—were what impact this has on ■ The enormous amounts Studies,” Nivola says,“is to explain study on the economics of happi- winning congressional and, given their avowed largely achieved, he says. politics and policy. of money spent on TV how and why policymaking institu- ness, which measures the interac- approval of the new cam- purpose of influencing fed- To Mann, the most sur- “We wanted to see advertising in battle- tions in the United States and tion between government deci- paign finance law and eral elections, should have prising election develop- whether we could provide ground states before the abroad perform as they do, and sions and citizens’ well-being (see establishing its constitu- been required to register as ment was that Kerry, after some added value to the party conventions. sometimes to suggest changes that story, page 23). tionality in a critical political committees and opting out of the public discussion of the 2004 ■ The continuing decline in could improve that performance.” Nivola’s own scholarly work Supreme Court decision. abide by the contribution matching-fund program in election by bringing in election and public Over the years, Governance included a monograph titled “The How does Mann think limits in federal law, accord- January, raised almost as scholars who have done affairs coverage by net- Studies research projects have Political Economy of Nuclear the new rules worked in the ing to Mann. much money in campaign serious research on the work and local TV. examined national electoral sys- Energy in the United States” and Pietro Nivola, the new director of first presidential election Nonetheless, the most contributions as Bush did, campaigns and elections,” ■ The emergence of TV tems, campaign finance, legislative two policy briefs,“Wave of the Governance Studies, discusses the since they were enacted, influential 527s—those chal- rather than being outspent Mann says. comedy programs as politics, executive organization, Future: Federalism and the Next competing imperatives of wartime given what he calls the lenging Kerry’s and Bush’s four-to-one as anticipated. Mann also shared his legitimate sources of powers and civil liberties

budgetary procedures, management Phase of Welfare Reform” (writ- ALSWANG RALPH “staggering” amount of military records—did not Remarkable unity and views of the election in op-ed information about candi- of public bureaucracies, the news ten with Isabel Sawhill and Jen- tive is supported by a $2 million The worldwide threat of ter- cash raised by both George particularly benefit from motivation among Demo- articles and media inter- dates, particularly among media, jurisprudence and legal sys- nifer Noyes) and “Fiscal Millstones grant from Brookings trustee and rorism was the ominous backdrop W. Bush and John F. Kerry? campaign finance loop- crats and an extraordinary views—sometimes as many as younger voters. Mann tems, forms of federalism, local on the Cities: Revisiting the Prob- San Francisco investment banker for many of the issues studied by “I am pretty upbeat holes. They spent relatively increase in small donors, 25 interviews in one day. He thinks these programs administration of educational insti- lem of Federal Mandates.” Richard C. Blum. Brookings scholars.The Center on about the positive effects little money to broadcast many via the Internet, were provided regular briefings on offer better commentary tutions, the delegation of commu- As a result of the departmental One of the program’s most Social and Economic Dynamics of campaign finance their ads; far more people largely responsible for the campaign to the ambas- than many of the cable nity services to nonprofits, and the reorganization, the Poverty and important events of the past year focused on the danger that the reform,” says Mann, senior learned about their mes- Democrats’ achieving near sadors of Britain, Canada, news “scream” shows. role of religious organizations. Global Economy (PGE) Initiative, was a presentation by PGE Initia- United States might be attacked fellow and holder of the W. sages from intense media parity with the Republicans, France, Italy, and Germany. Mann says he was most “The aim of this body of work a major undertaking of the Gover- tive Director Lael Brainard and by biological weapons. Averell Harriman Chair. coverage than from seeing Mann says. And he took part in on-line concerned about how our has been to shed light on the nance Studies program, became a Graham of the findings in their Leading the effort was senior “None of the dire warnings the ads, Mann says. In any “The new law proved not video conferences with audi- governing institutions per- implications of institutional stand-alone project that will also book, The Other War: Global Poverty fellow Joshua M. Epstein, who by critics about harmful case, he says, the 527 ad to be the ‘Democratic sui- ences abroad through the formed in the past four arrangements and, where feasible, draw on the work of scholars in and the Millennium Challenges teamed up with Johns Hopkins and unanticipated conse- campaigns were dwarfed by cide pill’ forecast by some State Department. years. The parity between to delineate reforms that could two other programs: Foreign Pol- Account.Their appearance in New Professor Don Burke to develop quences from the law have the ads run by the candi- party insiders,” he con- What did Mann consider the parties and their promise net benefits to society,” icy Studies and Economic Studies. York City was sponsored by the computerized models of the come to pass.” dates, parties, and political cludes. “A disparity in the major developments in increasing ideological polar- Nivola says. Now in its second year, the initia- United Nations Development Pro- effects of such an attack and of The legislation prohib- action committees. resources between the two the campaign? ization has poisoned rela- gram and the Ford Foundation. various responses. Previously they ited political parties from “The point is not to ban- candidates and their parties ■ The increasing impor- tionships within Congress Senior fellow E.J. Dionne, Jr., and journalist Another event that drew atten- had focused on a hypothetical raising “soft money”—con- ish or restrict political did not determine the out- tance of the Internet for and between both ends of Jane Eisner exchange views on national service and the responsibilities of tion to the problem of poverty anthrax attack.This year, they tributions not subject to advertising,” Mann adds. “It come of the 2004 election.” fund-raising and for Pennsylvania Avenue. citizenship in developing countries was the looked at what would happen if federal limitations on their is to ensure that those Campaign finance issues organizing. “Grappling with the seri- BREAD conference—Bureau of terrorists spread smallpox germs in source and size. But the working for or against fed- were by no means Mann’s ■ The growing gulf ous domestic and foreign Research and Economic Analysis the United States. parties, Mann says, adapted eral candidates play by the only focus during the race. between Democratic and policy challenges of the next of Development—sponsored Epstein and Burke were remarkably well by attract- same set of rules governing In partnership with Larry Republican voters—not several years,” Mann says, jointly by Brookings and the Cen- invited to become part of a core ing record amounts of political contributions.” Bartels, a professor at just in their views of the “will require a much less ter for Global Development.The team in an initiative called “hard money” donations. The key objectives of the Princeton’s Woodrow Wilson candidates and the partisan and more accom- conference brought together lead- MIDAS—Models of Infectious Outside organizations, campaign finance law—to School, Mann organized a issues but also in their modative environment.” ■ ing economists in the develop- Disease Agent Study—sponsored ment field. by the National Institute of Gen- “Part of the conference was eral Medical Sciences (NIGMS). Jeremy M. Berg, director of transmission rate, weather patterns, spread of disease,” says Elias A. major agenda items, new issues open to the public,” says Graham, This team is on permanent call to NIGMS. individual susceptibility, and social Zerhouni, NIH director. constantly arise for Governance one of the organizers.“That por- provide advice and help develop Epstein, Burke, and their col- interactions.The models also evalu- As the year ended, Governance Studies scholars to analyze, tion was designed to increase the responses in the event of a leagues won a $150,000 grant from ate various methods of containing Studies began another exciting including legislative initiatives, awareness by the public and poli- national emergency caused by an the National Institutes of Health the disease, such as vaccination, political project: examining how the shifting political balance of cymakers of the scholarly research outbreak of infectious diseases. (NIH) to create highly visual, user- contact tracing, and quarantine. the president, senators, and House power, the increasingly sharp on third-world poverty issues.” “MIDAS is designed not only friendly computer models of disease “The computer models created members read and respond to the divisions between conservatives The annual Brookings Trade to help prepare us for infectious- outbreaks.The models graphically through this initiative will help us mandate of the election results. and liberals, and the need to Forum focused on the links between disease crises but also to be an depict what would happen based determine the best strategies to While budget deficits and the adjust political institutions for ■ DAVID SCULL DAVID trade, poverty,and inequality. active part of the response,” says on the disease incubation period, detect, control, and prevent the war on terrorism continue as the Internet age. 18 19 Economic Studies

e believe that the nation’s fiscal situation is out of control and could do serious damage to the economy in coming decades, sapping our national strength, making it much more difficult to respond to unfore- seen contingencies, and passing on an unfair burden to future generations. Our purpose is to document the enormity of the problem, to inform citizens about why budget deficits matter, to suggest the kinds of specific steps that need to Wbe taken, and to challenge others to do the same. That was the declaration of purpose for the Restoring Fiscal Sanity project, the major undertaking of the year by the Brookings Economic Studies program.The project both sounded a clarion warning about federal budget deficits, which could grow to $700 billion a year within a decade, and offered three options for avoiding that tidal wave of red ink. “One of our proposals relies primarily on spending cuts to balance the budget, one primarily on revenue increases, and a third plan includes a mix of the two but reallocates spending to improve the government’s effectiveness,” explains Isabel Sawhill, a Brookings vice president and director of Economic Studies. Sawhill, who holds the Cabot Family Chair, was co-editor, with senior fellow Alice Rivlin, of a book, a policy brief, and a lengthy report outlining the causes, likely effects, and possible solutions to the deficit problem. “Good budget choices can strengthen the economy,” Sawhill and Rivlin wrote.“Bad choices can weaken it.” They concluded that “not all budget deficits are harmful—indeed, recent deficits have ameliorated the recession that began in 2001.”However, “large, persistent deficits weaken the economy and lower family incomes.” While Sawhill, Rivlin, and the seven other Brookings scholars who worked on the project (Henry J.Aaron, Lael Brainard,William G. Gale, Ron Haskins, Michael O’Hanlon, Peter R. Orszag, and Charles Schultze) generally favored the “better government”option, not all agreed with every aspect of the plan. Some preferred elements of the “bigger government” or “smaller government” blueprints, some endorsed tougher fiscal policy, and others supported less constrained deficit targets. “Indeed, our disagreements on such matters reflect, in microcosm, the disagreements in the country at large,” Sawhill says. Senior fellow Alice Rivlin, left, and Isabel The federal budget, and the growing deficits, began to dominate the Sawhill, vice president and director of Economic Studies, listen to panelists at thinking and conversations of the Economic Studies scholars more than the unveiling of their report, “Restoring two years ago.

Fiscal Sanity” WILLIAMS TOM “We constantly wrestled with this issue,” recalls Gale, deputy director 21 ECONOMIC STUDIES Economics of Happiness

sychologists and the political sustain- income change doesn’t mat- have long used ability of market-oriented ter as much as other fac- studies of happi- economic growth in 17 Latin tors, such as harvest yields.” of the program and the Arjay and arrived from the printer ness to assess American countries and “Frustrated achievers,” Frances Fearing Miller Chair in just one day before a the state of Russia. far from being the poorest Federal Economic Policy. luncheon at which it was Ptheir patients. But could Using happiness surveys in the sample, fall in the “We realized there was a void presented to journalists lawmakers use the data to and economic variables to middle income levels and in the public arena,” says senior from BusinessWeek, CBS assess the state of their measure how people in tend to be more urban, fellow Robert Litan.“No one was MarketWatch, Congres- nations, and even base those countries perceive more aware of their peers’ producing a comprehensive alter- sional Quarterly, Financial policy decisions on the their lives and how those lifestyles, and more subject native budget that was supported Times, National Journal, results? perceptions are affected by to income volatility. They by serious data-based research and The New York Times, An emerging social sci- globalization, Graham and also have a higher fear of analysis—spin-free.” National Public Radio, ence field pairs traditional colleague Stefano Pettinato unemployment and are Litan presented the case for The Wall Street Journal, indicators—marital and eco- found that when individuals more concerned about rela- launching the Restoring Fiscal The Washington Post, and nomic status, for example— assess their own well-being, tive income differences, Sanity project to Brookings Presi- other news outlets. with the factors that affect relative income differences which causes them, says dent Strobe Talbott and the Brook- The authors also pre- the economic climate, are often as important as Graham, to “place them- ings trustees in the spring of 2003. sented their findings in including globalization and absolute income gains. selves lower on a notional Their response, in short:“Go testimony to congres- the divide between rich and “There’s a big gap,” Gra- economic ladder.” do it.” sional committees, dis- poor. Researchers say hap- ham says, “between assess- That tendency trans- The project, which is partially cussed their conclusions piness data could ultimately ments by technical econo- lates to assumptions that supported by a grant from the and recommendations on transform the way govern- mists, who evaluate the are relevant to decision- Annie E. Casey Foundation, was television and in newspa- ments make decisions, with aggregate benefits of glob- makers. Frustrated achiev- designed to stimulate an informed per interviews, and wrote policymakers using well- alization on poverty and ers, she says, are more and thoughtful national debate several op-ed articles. being indicators to track a inequality and generally likely to support taxing the about the dangers of running per- This publicity blitz raised country’s happiness in the give positive appraisals, incomes of the rich and to sistent federal budget deficits, and the awareness of policy- same way they now moni- and the very negative have lower prospects of about ways to restore fiscal balance. makers, the news media, tor economic conditions. assessments by the aver- upward mobility; they also Sawhill, who succeeded Litan and the public about the Several years ago, Carol age laymen in poor coun- tend to be less satisfied as director when he became vice need to confront the Graham, a senior fellow at tries, who tend to focus on with the market economy Senior fellow Carol president for research and policy deficit problem and to Brookings and the director micro-level trends and on and are less likely to prefer Graham studies the at the Ewing Marion Kauffman take action to fix it. For of the Center on Social and the differences between the democracy to any other relationship between feelings of well- Foundation, decided that the analy- example, The Washington Economic Dynamics, was winners and losers.” form of government. being and economic sis would be most useful and effec- Post and a number of conducting research in Surveys of well-being At a June 2004 briefing conditions tive if released in January 2004, just other major newspapers Peru on the effects of glob- provide a tool that may at Brookings on the eco- MACCORMACK FORREST ahead of President Bush’s State of devoted editorials to the Senior fellow Peter Orszag testifies alization on income distri- help bridge this analytical nomics of happiness, Gra- The panelists—who also economies are increasingly before the House Committee on the the Union speech, the publication report’s findings and Budget bution when a survey and conceptual divide, Gra- ham joined a panel of included Diener, a psychol- interdependent. of the president’s FY2005 budget, recommendations. turned up unexpected ham says. In the Peru sur- experts to discuss the ogy professor at the Univer- “Research on happi- and the presidential primaries. The Brookings schol- results: More than half the vey, almost half of the peo- relevance of happiness sity of Illinois; Jeffrey Sachs, ness,” she says, “can help This tight deadline meant that ars also teamed up with people who had made sig- ple who had earned the research to debates on fis- director of Columbia Univer- us explain unsolved policy

the scholars had less than 60 days eight other organizations WILLIAMS TOM nificant income gains over most money over 10 years cal and macroeconomic sity’s Earth Institute; and puzzles…such as the to prepare their first drafts.“It was representing a broad swath of the Conn.) spoke at the event, along ways,” Talbott says. He cites “a 10 years were frustrated, described their current sit- policy, social welfare, the Gregg Easterbrook, author impact of inequality very ambitious to try to do this in ideological spectrum—the Con- with scholars from Brookings and combination of focus and honesty” while the poorest people in uation as negative or very international economy, and of The Progress Paradox: on individual well-being, the short time frame we had,” cord Coalition, the Committee the other organizations. as necessary to solve America’s fis- the sample were largely negative compared with the foreign aid. How Life Gets Better While and the very contentious Sawhill says.“I admit that I didn’t for Economic Development, the The Restoring Fiscal Sanity cal problem and says that “both are satisfied. past. Graham calls these “Happiness economics,” People Feel Worse—agreed debate on the effects of know if we’d be able to pull it off.” Committee for a Responsible project was the first step in an found in abundance” in the To try to understand the respondents “frustrated says Andrew Oswald, an that happiness data can pro- globalization on poverty But they did.The project’s initial Federal Budget, the Center for ambitious, long-range Brookings Restoring Fiscal Sanity project. results, Graham turned to achievers.” economics professor at the vide a fuller picture of the and inequality worldwide. findings were submitted for com- Budget and Policy Priorities, the undertaking to reexamine national Much of the data and analysis literature on happiness, and Another group had University of Warwick, “can impact of economic changes And by discovering unex- ment to other experts and then to Heritage Foundation, the Progres- priorities, rethink what functions for the project was developed by in 2002 she wrote Happi- earned little or no money actually put a dollar value and policy decisions on the pected public frustration in an advisory board composed of sive Policy Institute, the New the federal government should and the Brookings-Urban Tax Policy ness & Hardship: Opportu- during the same period but on tangible and intangible public. some contexts, happiness business leaders and former cabinet America Foundation, and the should not perform, and reconsider Center—particularly through the nity and Insecurity in New said their situation was very forces…. So, for example, For Graham, understand- surveys may ultimately members from both political parties. Urban Institute—to sponsor an how to pay for such programs. work of Gale and Orszag, the Market Economies. The positive. Graham, who labels we now have dollar values ing how people judge their provide policymakers with With their suggestions in hand, event on Capitol Hill to discuss “We have the opportunity, Joseph A. Pechman Senior Fellow book charts the relation- these respondents “Pollyan- for the…happiness or financial status—and its predictive tools or, at the the scholars went into overdrive the deficit and possible solutions. through our work on this pro- in Economic Studies, on creating ship between “subjective nas,” says members of this unhappiness from aircraft relation to that of their least, better insights into to revise their drafts for the final Senators John McCain (R- gram, to address our nation’s fiscal realistic fiscal assumptions and well-being”—a term coined group are usually “quite noise, fear of crime, unem- peers—is crucial in an envi- potentially unstable social report.The 98-page document Ariz.) and Joseph Lieberman (D- future in new and more creative examining the revenue conse- by psychologist Ed Diener— rural people, for whom ployment, and inflation.” ronment where national situations.” ■ 22 23 ECONOMIC STUDIES

quences of different tax proposals: not only changing the size of the Import Competition, and the Job- roundtable discussions that bring In collaboration with the Cen- for example, modifying or eliminat- global economic pie but also less Recovery,” which concluded together policymakers, private-sector ter for Strategic and International ing the Alternative Minimum Tax, redistributing pieces of that pie that a surprisingly sharp increase in representatives, and researchers to Studies, Brainard plans to conduct making recent tax cuts permanent, within and between countries. productivity by American workers, refine a set of proposals regarding additional research on ways to and adopting a value-added tax. “The objective is to set a pol- rather than a loss of jobs to workers taxes, health care, research and make U.S. foreign aid a more effec- The Tax Policy Center, funded icy agenda to make America feel overseas, was the real cause of the development, education and training tive instrument of national policy.A at Brookings by the Lumina more secure in the international slow pace of job creation after the in the United States and abroad, high-level bipartisan commission Foundation for Education, the economic environment while giv- most recent economic recession. trade policy, consumer privacy, will be created to study the strate- Open Society Institute, and Well- ing India, China, and other devel- “A careful look at U.S. import development, and cyber security. gic goals of aid policy and evaluate spring Advisors LLC, is frequently oping countries the chance to data—especially for service imports, The economic benefits of how well the current aid program mentioned as a source for infor- benefit from the international where most offshoring growth globalization have been slow to supports those objectives. mation on various tax proposals trading system,” Brainard says. occurred—indicates that while the reach some developing countries. Looking back at this crowded and their consequences.The Cen- “Bob Litan and I published a total number of jobs affected by In a book titled The Other War: agenda and ahead to new issues, ter has developed a website calcu- policy brief aimed at helping offshoring had increased, that num- Global Poverty and the Millennium Sawhill cites two big challenges lator that can estimate the effects America to keep its competitive ber was still small relative to mil- Challenge Account, Brainard, Carol facing Economic Studies: of those proposals. edge through education, tax, and lions of jobs affected by the pro- Graham, and others examined ■ Making sure that the program In the longer term, one of the research-and-development poli- ductivity surprise,” Schultze wrote. development assistance issues, paris working on the most impor- major trends affecting the federal cies, while addressing worker dis- The offshoring project eventu- ticularly the Bush administration’s tant topics with the potential budget is the growing number of placement through wage insurance ally will include a conference at program designed to reward to influence policy. older Americans.The oldest baby and trade adjustment assistance.” Brookings, an edited volume of democratization and free markets ■ Preserving the program’s inde- boomers turn 60 in just two years, Charles Schultze produced essays, a short monograph aimed at and discourage corruption in pendence in an increasingly raising urgent questions about another policy brief,“Offshoring, the general public, and a series of developing nations. partisan environment. ■ Senior fellows Henry Aaron, left, Lael whether Social Security and other Brainard, and Charles Schultze offer government and private pensions ways to cut the federal budget

are saving and investing enough to WILLIAMS TOM provide comfortable incomes for a sound financial footing. and Jeanette Weinberg foundations Brookings scholars also zeroed retirees. Coping With Methuselah, edited and by the Foundation for Child in on the economic challenges The problem is exacerbated by by Aaron and William Schwartz of Development. posed by accelerating globaliza- the fact that Americans are retiring the University of Southern Cali- Sawhill and Haskins, the proj- tion.The Poverty and Global younger and living longer. fornia, examined how revolution- ect’s co-directors, produced a pol- Economy Initiative, directed by A number of Brookings schol- ary advances in medicine are likely icy paper pointing out the need to Lael Brainard, is funded primarily ars—including Barry Bosworth, to slow or stop the aging process, improve Head Start. Michael Cas- by Richard C. Blum and the the Robert V.Roosa Chair; Gary extend life, cure illnesses, affect the tle (R-Del.), chairman of the William and Flora Hewlett Foun- Burtless, the John C. and Nancy government’s finances, and raise House Subcommittee on Educa- dation, with additional funding D.Whitehead Chair; Henry Aaron, thorny ethical issues for society. tion Reform, said their paper from the General Electric Founda- the Bruce and Virginia MacLaury This book was funded by a grant helped shape his bill to improve tion and the Alfred P.Sloan Foun- Chair; and Orszag—analyzed this from the Robert Wood Johnson the preschool program. dation.The initiative develops challenge and offered ideas for Foundation. Sawhill and Haskins also pro- practical ideas for capitalizing on dealing with it. In dealing with another govern- duced new data and analysis the opportunities that globaliza- In a book titled Saving Social ment social program, Congress demonstrating the powerful effects tion offers in trade, foreign invest- Security, Orszag and Peter Diamond became hopelessly deadlocked of work and marriage on helping ment, and economic development. of the Massachusetts Institute of when trying to extend and improve people to escape poverty. Brainard, the New Century Technology proposed changes in welfare reform. Nevertheless, the In related analysis, Burtless Chair in International Trade and benefits and payroll taxes that Welfare Reform and Beyond proj- concluded that single mothers are Economics, and Susan Collins are would take into account longer life ect continued to produce important more likely to work now, since the leading a project with other expectancies and the fact that ear- research and recommendations on implementation of welfare reform. Brookings scholars, including lier generations of retirees received the topic, which policymakers Contrary to expectations, most of Litan and Schultze, to study off- more from the system than they praised and used in formulating leg- these single mothers appear to shoring—exporting service jobs contributed during their working islative proposals.This research is have maintained their employment formerly performed in the United years.These changes, the authors funded by the Annie E. Casey, gains through the recession that States to countries with lower wrote, would eliminate the antici- David and Lucile Packard, Charles began in 2001.Additionally, child labor costs.The project is explor- Senior fellows Ron Haskins, left, and pated long-term deficit in the Stewart Mott, Ford, John D. and poverty rates rose far less than in ing the economic consequences of William Gale discuss the implications of soaring deficits

Social Security fund and put it on Catherine T. MacArthur, and Harry previous economic downturns. this new phenomenon, which is WILLIAMS TOM 24 25 Metropolitan Policy

he issues closest to home often have the greatest impact on Americans’ lives: traffic, sprawl, high housing prices, low-paying jobs, lackluster downtowns, and declining older suburbs. In recognition of that fact, the Brookings Center on Urban and Metropolitan Policy was elevated this year to the Metropolitan Policy program. It is now one of the four broad policy study programs at Brookings—along with TEconomic Studies, Foreign Policy Studies, and Governance Studies— and the first new program created since 1948. “This change is a powerful affirmation of the importance of metropolitan issues to the domestic and global challenges that Brookings seeks to address through its research, analysis, and public education,” says Bruce Katz, who had directed the Center and is now vice president and director of the program.“We look forward to continuing our comprehensive approach to urban studies with even greater vigor and impact, and with the permanent backing of the larger institution.” Katz also credits the Fannie Mae Foundation, an early and steadfast supporter, for the Metropolitan Policy program’s growth and success since the Center’s creation eight years ago. The rust-belt state of Pennsylvania served as a major focus for Katz and his staff during the past year.They analyzed the problems of older declining communities and proposed ways to improve the state’s economy.The project, supported by the Heinz Endowments and the William Penn Foundation, culminated in a report titled “Back to Prosperity:A Competitive Agenda for Renewing Pennsylvania.” “The report contends that Pennsylvania’s economic future depends on revitalizing its demographic mix and curbing some of the nation’s most radical patterns of sprawl and abandonment,” says Katz, who holds the Adeline M. and Alfred I. Johnson Chair.“It concludes that these trends are not inevitable and can be reshaped if the state embraces a dynamic new vision of economic competitiveness, which also includes reviving its older cities and towns.” Twenty newspapers across Pennsylvania wrote about the report when it was released. More than 100 follow-up stories covered such topics as state spending strategies and practices, the “brain drain” from Pennsylvania, brownfield environmental cleanups, local government con- Bruce Katz, vice president and director solidation, and Governor Edward Rendell’s efforts to pass economic of the Metropolitan Policy program, speaks in Williamsport, Pennsylvania, on stimulus legislation.

ways to revitalize that state’s economy MARK NANCE Like most of the Metropolitan Policy program’s work, the Pennsyl- 27 METROPOLITAN POLICY At the Russell Fiord Environment and Energy Wilderness in Alaska, ice falls from Hubbard Glacier

o help policy- United States can pursue Chairman and CEO John makers shape at home and abroad.” Rowe, Science magazine vania report was intended to be a before congressional committees. gram released seven analyses of the with support from Living Cities, a innovative “Brookings’s foreign pol- Editor-in-Chief Donald blueprint for action, not a schol- The series also targeted issues 2000 Census data, which yielded consortium of 17 major financial, solutions to icy and economics exper- Kennedy, and National arly thesis.As the scholars hoped, facing specific state, metropolitan, some startling findings: a steep philanthropic, and public-sector climate change tise, its convening power, its Wildlife Federation Presi- the report had a galvanizing effect and local governments. For decline of concentrated poverty in organizations. Tand other environmental reputation for rigorous and dent and CEO Larry on state officials. instance, a report titled “Slanted central cities during the 1990s, Because the issues confronting issues, Brookings this credible research—these are Schweiger. Rendell proposed an $800 mil- Pavement” examined how using growing suburbanization of immi- cities, towns, and suburbs are not year inaugurated its powerful tools for helping Just after the confer- lion bond referendum to expand fuel tax revenue in Ohio for high- grants during the same period, unique to the United States, the Environment and Energy shape sound and practical ence, Sandalow wrote a open-space preservation and revi- way construction and repairs sprawl-producing housing con- program extended its work inter- project. The project environmental policies,” New York Times op-ed talize older communities. State shortchanges cities and suburbs in struction in traditionally slow- nationally.A joint project with the will search for ways to Sandalow says. piece on global warming agencies began revising infrastruc- favor of rural areas.“Slanted Pave- growth areas, and a continuing London School of Economics improve environmental For its inaugural effort, with Stuart Eizenstat, chief ture and economic development ment” prompted The Cincinnati brain drain from Northeastern and is examining the role of major policies that reflect politi- the project tackled one of negotiator for the Clinton programs to create more balanced Enquirer to publish an editorial Rust Belt metropolitan areas to demographic and market forces in cal, economic, and global the toughest environmen- administration at the growth patterns and level the play- urging the state government to warmer, faster-growing regions. shaping the modern American and concerns. In his strategic tal issues facing the world Kyoto conference. ing field between older and newer revise the distribution formula, and In addition to these national British metropolis.The aim is to plan, Brookings President today: climate change. The Environment and communities. Leaders in the Penn- the report is being used by interest studies, the program released the identify government policies that Strobe Talbott identified While many people across Energy project also spear- sylvania Legislature signaled their groups to lobby for such a change. first batch of its local analyses of help communities in both coun- environmental issues as the political spectrum headed three other events. intention to appoint a commission Another report,“Washington’s the 2000 Census.The databooks, tries address economic, social, and one of the most important readily acknowledge the The “Global Challenges for

to identify reforms that deserve Metro: Deficits by Design,” found covering 23 locales, assembled key development challenges. research areas for the problem of global warm- U.S. Energy Policy: Energy IMAGES MICHAEL MELFORD/GETTY legislative attention. that Washington, D.C., has the information in an accessible for- Katz travels regularly to Britain Institution. ing, there’s little agree- Geopolitics, Global Envi- Should the U.S. Join?” Sandalow is working with Key constituencies in the state, only subway system in America mat, with tables, charts, and maps to meet with British scholars, phi- The project has ment on a solution. Envi- ronment, and Domestic According to Sandalow, Brookings Economic Stud- including 10,000 Friends of Penn- without a dedicated source of augmenting the text. lanthropists, and government offi- received seed funding ronmentalists and industry Policy Options” conference American approval of the ies senior fellows Peter R. sylvania (an alliance of organiza- funding, relying solely on fare pay- The program is working cials to discuss mutual concerns from Brookings trustees leaders have widely vary- gathered national political treaty “would help protect Orszag and William G. Gale tions and individuals that was ers and annual local government closely with corporate, civic, and such as revitalizing distressed Stephen M. Wolf and Louis ing views, and policymak- leaders, business execu- U.S. national security, on the environmental con- Brookings’s principal partner in appropriations to maintain and community leaders in Baltimore, housing, rejuvenating older indus- W. Cabot, and Brookings is ers are caught in between. tives, and foreign policy advance U.S. economic sequences of tax policy. the project) and a network of expand the system. Chicago, Kansas City, Miami, and trial cities, and increasing the assets actively seeking core sup- To help close that gap, experts to discuss how interests, and protect the Purvis has partnered with regional business groups, are using That was not the only project Minneapolis/St. Paul to advance a of the working poor. port from other sources. the project organized and clean-energy technologies marine environment.” McKibbin and Wilcoxen to the report to build broader coali- that focused on Brookings’s variety of locally selected reforms Along with British Chancellor The project is working hosted “U.S. Climate Pol- and energy efficiency The project is taking an model India’s energy sector. tions that cross jurisdictional lines. hometown. Brookings Greater based on the census analyses. of the Exchequer Gordon Brown, closely with valued part- icy: Towards a Sensible could strengthen the U.S. interdisciplinary approach Purvis will spend the The program’s other major focus Washington, directed by senior fel- Katz says the Metropolitan Katz was invited to participate in ners, including the Pew Center” in June. The two- economy, help protect the to its research in order to next year writing a book was the Transportation Reform low Alice Rivlin, studied neigh- Policy program is making consid- the 100th-anniversary celebration Center on Global Climate day conference drew the environment, and enhance take into account the com- about U.S. climate-change Series, launched in 2003 and hitting borhood revitalization, affordable erable progress in finding ways to of the Joseph Rowntree Founda- Change, the National Com- largest crowd of any U.S. security. At the plex and interdependent diplomacy and pursuing high gear in 2004 with support housing, poverty in the central increase the incomes and assets of tion, one of the largest independ- mission on Energy Policy, Brookings event this year— “Transatlantic Dialogue on web between nature and further research on from the Ford, Joyce, John D. and city, primary health care, and infra- low-income working families, and ent social policy research and and the World Resources both in person and on-line, Global Climate Change” government. The project energy security. Sandalow Catherine T.MacArthur, Charles structure maintenance. to ensure that these households development charities in Britain. Institute. via a live webcast—and fea- conference, Brookings wel- will draw on the expertise will write on clean energy Stewart Mott, and McKnight foun- “These activities are contribut- have access to quality employment At the event, Katz released the During the next year, tured an all-star lineup of comed more than 50 of Economic Studies schol- and on issues relating dations. It provided recommenda- ing to better government at the and educational opportunities. report “Neighborhoods of Choice the project will focus on science, industry, and gov- American and European ars Warwick J. McKibbin to the governance of tions for establishing the proper fed- local level, while demonstrating “A central feature has been our and Connection,” which showed four areas: climate change ernment representatives leaders to identify areas of and Peter J. Wilcoxen, the world’s oceans, eral role in national transportation that a good think tank can also be work to demonstrate the distribu- how community leaders and and energy security; from the United States and agreement for future authors of Climate Change including the impact policy, financing transportation proj- a good neighbor,” Rivlin says. tion and impact of the Earned policymakers on both sides of oceans governance; tax abroad. Panelists included transatlantic cooperation Policy After Kyoto: Blue- of new technologies on ects, expanding transit services, and For her work on such projects, as Income Tax Credit [EITC], per- the Atlantic can embrace a new policy and the environ- Secretary of Energy on climate policy. And in print for a Realistic marine conservation. reducing traffic congestion. well as for her long service in senior haps the most powerful anti- neighborhood design that will ment; and poverty and the Spencer Abraham, Chair- April the project held a Approach. Purvis has The task could not be The transportation series had federal and city economic positions, poverty program in the federal attract residents of all economic environment. man of the White House’s forum on the Law of the teamed with Brookings sen- more important. As Talbott an immediate impact at the federal Rivlin received the Lifetime arsenal,” Katz says.A study pub- classes and provide access to “We need enduring Council on Environmental Sea treaty, with a keynote ior fellow Lael Brainard to has said: “Because of and state levels.The U.S. Congress Achievement Award from the D.C. lished as part of this work analyzes high-quality education, job solutions to the challeng- Quality James L. Con- address by Senator look at ways to make third- humankind’s mastery of incorporated Brookings’s propos- Chamber of Commerce this year. how the EITC is distributed training, and other routes to ing environmental prob- naughton, Senators John Richard G. Lugar (R-Ind.). world economic develop- technology, we now have als—on such topics as transporta- “Listening to Dr. Rivlin speak among cities, suburbs, and rural economic opportunity. lems facing the world,” McCain (R-Ariz.) and That event was an ment environmentally the capacity to destroy tion needs of the elderly, low- is like being in an advanced col- areas in all 50 states. Katz’s speech topic at the says senior fellow Nigel Joseph Lieberman (D- example of the project’s sound. Sandalow will team ourselves. We can do so income car ownership, and transit lege classroom where a top profes- The Metropolitan Policy pro- Rowntree anniversary assembly Purvis, who co-directs the Conn.), former CIA Direc- focus on issues related to with Economic Studies today, and quickly, in a reforms—into federal legislation. sor offers clear and intriguing gram also is working to enhance was “What the U.K. can learn project with Brookings tor R. James Woolsey, oceans governance. San- experts and others to thermonuclear war…or we Several Brookings scholars who views on a variety of complex public and private investment from U.S. neighborhood policy.” environment scholar David World Bank President dalow made the case for examine how to redirect can do so tomorrow, more worked on the series, including subjects,” said Chamber of Com- in low-income neighborhoods Few people know the subject bet- Sandalow. “Our objective is James Wolfensohn, British the Law of the Sea treaty agricultural subsidies so slowly but no less com- Anthony Downs, Margy Waller, merce President Barbara Lang. through its Urban Markets Initia- ter than Katz and his colleagues at to craft practical and cost- Energy Minster Stephen in a policy brief, “Law of that they promote environ- pletely, through the ruina- and Robert Puentes, testified The Metropolitan Policy pro- tive, launched during the past year Brookings. ■ effective solutions that the Timms, Exelon Corporation the Sea Convention: mentally friendly biofuels. tion of our environment.” ■ 28 29 bers of foreign Executive Education embassies in the Wash- ington area. The highly he Brook- ues such as Capitol Hill, grams with other leading successful program drew Brookings Institution Press ings Center the Federal Reserve, the associations to expand participants from 11 for Execu- Supreme Court, and for- its reach and impact. nations to Brookings. t was a banner season for proposals for U.S. policy.” in the daily newspaper Asian Age. tions” that “bristled with insights.” that is both theoretically and tive Educa- eign embassies results in Major programs devel- The program was the Brookings Institution Robert L. Faherty, vice presi- Among other books published Among the Brookings books empirically strong” in finding tion (BCEE) an enriching and unpar- oped in the past year repeated for new Press, measured by the dent and director of the Press, by Brookings were four in a series receiving awards was America “answers to previously unexplored Tcreated a timely special alleled learning experi- included: embassy personnel at number, quality, and rele- says Pickering’s praise perfectly of Pew Forum Dialogues on Reli- Unbound:The Bush Revolution in questions about the nature of pol- program, “Inside Wash- ence for participants. “Defense Leadership the request of past par- vance of books published, describes the kinds of books that gion and Public Life.These vol- Foreign Policy, by senior fellow Ivo itics.”The Urban Politics Award ington: The New Political “And the Brookings and Management Pro- ticipants. BCEE also has as well as by the number of Brookings seeks to publish. umes, edited by senior fellow E.J. H. Daalder and James M. Lindsay, was given to Mega-Projects:The Landscape,” to prepare Institution’s reputation gram” (DLAMP): BCEE developed customized awards earned by titles that Brookings President Strobe Dionne Jr., Jean Bethke Elshtain, which won the Lionel Gelber Changing Politics of Urban Public executives for possible ensures an independent received a multiyear con- programs at the request appeared during the previous year. Talbott published Engaging India: and Kayla Drogosz, brought Prize for the best book on inter- Investment, which the Press co- changes in the White and balanced range of tract from the Defense of a number of embassies. IThe more than 50 books pub- Diplomacy, Democracy, and the Bomb, together the voices of scholars, national relations.The Gelber published with the Lincoln Insti- House, Executive Branch viewpoints,” Goodwin lished in 2004 covered a wide a revealing account of the inten- tute of Land Policy.And the Leon departments, and Con- says. range of topics, including interna- sive discussions that the United Epstein Award went to A Voice for gress after the 2004 The variety of pro- tional trouble spots, President States conducted with India and Nonprofits, by Jeffrey M. Berry. elections. gram offerings, from Bush’s foreign policy, and the role Pakistan during the two and a half This award is given to a book “This program is leadership and policy of religion in American life. years after the two countries deto- “that has made an outstanding intended to help govern- issues to customized Pakistan and India—both nated nuclear devices in May 1998. contribution to research and ment and corporate programs, is designed hugely populous, both armed with As President Clinton’s point scholarship on political organiza- executives to understand to meet the specific nuclear weapons, both emerging man in the high-stakes talks,Talbott tions and parties.” how these changes will needs of individuals as strategic players on the 21st- was able to reconstruct in rich detail In addition, national security affect national policy- and organizations. century world stage—were the one of the most intriguing and con- fellow Peter W.Singer won the making and their organi- Brookings scholars subjects of two critically acclaimed sequential diplomatic dramas of our APSA’s Gladys M. Kammerer zations,” says William M. such as Thomas E. Mann,

Brookings books. time:Talbott’s mission was nothing Award for Corporate Warriors:The Goodwin, senior director Michael O’Hanlon, Lael MACCORMACK FORREST BCEE head William Goodwin In The Idea of Pakistan, Foreign less than persuading the two coun- Rise of the Privatized Corporate Mil- of BCEE. Brainard, Robert Litan, Policy Studies scholar Stephen tries not to escalate their rivalry into itary Industry, published by Cor- For almost half a cen- and Paul Light are fre- Department to design “Economics Institute Senior fellow Stephen Cohen, author of a Cohen offered a panoramic por- a nuclear exchange. highly praised book on Pakistan, meets with nell University Press. tury, BCEE has been pro- quent speakers at BCEE and implement a leader- for Judges”: This flag- trait of that complex country— Talbott described his extensive Robert Faherty, right The National Press Club pre- viding programs which programs. But they are ship course for civilian ship course of the Judi-

from former British colony and talks with Indian Minister of MACCORMACK FORREST sented its Arthur Rowse Award offer executives the real- not the only headliners. executives as part of the cial Education Program is homeland for India’s Muslims to External Affairs Jaswant Singh, in journalists, and policy leaders who jury called the book “an incisive for the best book of press criti- istic, practical public- Speakers at recent pro- DLAMP program. The sponsored by the AEI- military-dominated state plagued which they not only grappled with spoke not only from their knowl- examination of U.S. foreign pol- cism to senior fellow Stephen policy and leadership grams included former Pentagon established the Brookings Joint Center by political chaos, sectarian vio- the urgent issues of arms control edge of important public-policy icy under President George W. Hess and Marvin Kalb for The education that is relevant Secretary of Defense program to develop a for Regulatory Studies lence, uneven economic growth, and nonproliferation but also dis- issues but also from a set of moral Bush. Anyone who seeks to Media and the War on Terrorism, to their professional goals. William Perry; former new generation of execu- and organized by BCEE. and several nuclear crises with its cussed their broader visions of concerns, often shaped by their understand America’s role in the which the Press co-published “Even as new execu- Secretary of State tives to fill the roles of The two-week program larger neighbor and rival, India. U.S.-India relations and the poten- religious commitments. world and the shape of the new with Harvard University’s Shoren- tive education providers Madeleine Albright; current leaders who will teaches state judges Cohen explored whether Pak- tial for economic and strategic Three of these books dealt global order will find this book stein Center on the Press, Politics, have emerged in the past former White House retire in large numbers in basic concepts in eco- istan can fulfill its promise and join cooperation between their countries. with welfare reform and poverty, invaluable and compelling.” and Public Policy. decade, executives con- spokesman Michael the coming decade. The nomics, finance, account- the community of nations as a func- A Financial Times review called economics and justice, and U.S. America Unbound also received Choice magazine, published by tinue to seek learning McCurry; Supreme Court program has 1,300 active ing, statistics, and scien- tioning partner or whether it will the volume “an admirably lucid foreign policy; the fourth looked honorable mention for the Arthur the American Library Association, opportunities at BCEE Justice Clarence participants and expects tific methodology to help dissolve into a failed state, perhaps and candid memoir…an excellent more broadly at the place of reli- Ross Award, awarded annually by named Shrewd Sanctions: Statecraft because they expect—and Thomas; former Con- to admit an additional them deal with complex dominated by Islamic extremists. book.”The reviewer, Sunil gion in American politics. It the Council on Foreign Relations. and State Sponsors of Terrorism,by receive—programs that gressman Lee Hamilton, 300 candidates each year. cases. A review in Foreign Affairs Khilnani, director of South Asia included a debate between former ForeWord magazine, which reviews Meghan L. O’Sullivan, as one of give them valuable co-chairman of the 9/11 BCEE’s course for More than 260 judges described the book as an “authorita- studies at the School of Advanced New York Governor Mario books from independent and aca- the outstanding academic books of knowledge and insight to investigative commis- DLAMP is modeled after took part last year. In the tive work of broad scope and metic- International Studies at Johns Cuomo and Indiana Congressman demic publishers, gave the volume the year. ForeWord gave its award current policy issues,” sion; and Amtrak Presi- its hallmark program coming year, BCEE ulous research which will surely Hopkins University in Washington, Mark Souder, who discussed how its award for best political science for best book on business and eco- Goodwin explains. dent David Gunn. Executive Leadership in expects to organize four become required reading on Pak- said that while Talbott’s effort to their faith-based convictions have book.And the Economist magazine nomics to May the Best Team Win: “Our programs also Following the success a Changing Environment. more judicial programs, istan.”The reviewer, Pervez Hood- resolve the India-Pakistan standoff shaped their careers as public ser- named America Unbound one of Baseball Economics and Public Policy, broaden the outlook of of programs in the past One participant in the including a symposium bhoy, a nuclear physicist in Pakistan, seems as if it took place in a distant vants.Their debate served as a the outstanding books published by Andrew Zimbalist. executives, thus enhanc- year for such organiza- inaugural course described on punitive damages. added,“Cohen’s facts are indis- era of diplomacy,“its lessons res- basis for short essays from dozens in 2003. “This was an unusually large ing their decision-making tions as the Association DLAMP as “the best sin- In one of last year’s putable, his logic cold and clear…” onate powerfully into the present.” of influential voices in American Three Brookings books were number of awards for a publisher skills.” of International Educa- gle week of training I’ve sessions, the judges Former U.S.Ambassador to Less than a month after its pub- intellectual and political life. cited by the American Political of public-policy books,” Faherty BCEE’s access to tors, the American Coun- experienced.” dined at the Supreme India Thomas R. Pickering called lication in India,Talbott’s book had Reviewing the book in The Science Association (APSA). says. “They reflect the Press’s experts—including gov- cil of Engineering Com- Expanded Outreach Court, where they heard Cohen’s book “a must read” that risen to the number-two spot on New York Times, Peter Steinfels Senior fellow Sarah Binder’s Stale- continued commitment to pub- ernment officials, mem- panies, and the Credit to Embassies: Last remarks from Justice “brings together the key threads, that country’s nonfiction best-seller referred to the “star-studded list” mate: Causes and Consequences of lishing quality books that address bers of Congress, politi- Union Executives Society, spring, BCEE offered its Antonin Scalia and for- analyzes succinctly the challenges, list.The list, compiled by the Bahri of contributors and applauded the Legislative Gridlock received the an array of important policy issues cians, lobbyists, and BCEE plans to continue first “Inside Washington” mer Solicitor General and makes sensible and workable Brothers bookstore chain, appeared “nearly endless buffet of reflec- Richard Fenno Award for “a work and concerns.” ■ journalists—and to ven- developing joint pro- program to staff mem- Theodore Olson. ■ 30 31 Support for Brookings “Everyone knows that Brookings is the very best prototype of influential Washington think tanks”

igh praise, especially considering the source: United Nations Secretary-General Kofi Annan, who was speaking to the Brookings Board of Trustees and their guests at UN Headquarters in New York City. In the first-ever trustees meeting outside Washington,Annan congratulated Brookings “on the priority you have given to international issues and to opening up Hyour Institution to people and ideas from outside the United States.” Speaking in the UN Delegates Dining Room,Annan lauded Brook- ings’s “conscious effort to broaden your agenda and to put your skills at the service of the global community.” He cited, for example, work on global poverty reduction and internally displaced persons. These comments by a UN secretary-general in the setting of the United Nations symbolically underscored the fact that Brookings research and analysis now affect policy decisions around the world. Trustees and friends of the Institution were instrumental in helping Brookings broaden its international scope. Brookings Board Chairman John L.Thornton pledged $1 million a year for five years to fund a new Initiative on China.With offices in Washington and Beijing, the initiative will conduct analysis and make recommendations to leaders in both countries for meeting policy challenges in the years ahead (see story, page 11). At their New York meeting,the trustees heard from Mark Malloch Brown, head of the UN Development Program, who discussed the dire straits of tens of millions of poor people who live in developing countries. Speaking at a reception in the UN’s West Terrace, Brown said the Millennium Challenge Account, established by President Bush, is “an extremely important strand of development” that rewards countries striving toward democracy and free markets. The trustees mingled with high-ranking diplomats, including John D. Negroponte, then U.S. representative to the United Nations and sub- sequently U.S. ambassador to Iraq; two former UN ambassadors, Richard C. Holbrooke and Donald F.McHenry (now an honorary Brookings trustee); the UN representatives from China, Egypt, and Japan; and Germany’s ambassador to the United States. Kofi Annan, his wife Nane Annan, center, and Linda Steckley, Brookings’s vice FIRST-EVER BROOKINGS STUDY TOUR president for development, chat at the Brookings trustees dinner at the United In September, Brookings President Strobe Talbott led Brookings’s first-

Nations. SCULL DAVID ever study tour, to Russia and Estonia. Eighteen travelers, including 33 Brookings Council

yrus F. Freidheim, offshoring were highlighted as Jr.—Brookings well, with Brookings President trustees, Council members, and group’s arrival and described it to The tour’s final stop in sit behind a desk in Washington, trustee, retired chair- Strobe Talbott and Foreign Pol- other friends of the Institution, the tour members. Moscow was the elegant old reading press accounts or intelli- man and CEO of icy scholars James B. Stein- signed up for the 10-day trip. The group heard the media’s Spaso House, the American gence reports, and get a full, tex- CChiquita Brands International, berg, Philip Gordon, Lael They arrived in Moscow a week view of government press policies embassy residence, for lunch with tured picture of a foreign coun- Inc., and the Brookings Coun- Brainard, and Martin Indyk after the Beslan school massacre when it participated in a nation- Ambassador Alexander Vershbow. try—especially one that is going cil’s current chairman—notes leading Council presentations and just as President Vladimir ally televised discussion with rep- The career diplomat talked can- through transformation.You have that Council members “con- in New York and Washington Putin seized more centralized resentatives of Moscow news didly about U.S.-Russia relations to incur some jetlag and see the tribute over $6.5 million annu- last spring. power. organizations.The Russian pan- and gave a preview of later U.S. situation.” ally to ensure that Brookings “The compelling presenta- On the study tour, most of the elists felt that they had been mis- government complaints about continues the rigorous, inde- tions by scholars, followed by exchanges with government offi- led by the government about Putin’s handling of Beslan and INVESTING IN BROOKINGS pendent, and practical research direct and lively interaction cials, U.S. embassy representatives, the Beslan hostage crisis.They seizure of appointment power for Helping policymakers, the news for which it is renowned.” between scholars and mem- and members of the Russian news expressed concern that Russia no Trustee Robert McNamara at a special provincial governors. media, and the public to more Founded in 1984, the Brook- bers of the audience, are what media focused on the Beslan longer has an independent Brookings screening of “The Fog of War,” The group then traveled to St. clearly “see the situation” in ings Council has been the pri- distinguish Brookings events slaughter and Putin’s power grab. national television network and a documentary about the former defense Petersburg, where tour members foreign policy, economics, gover- mary source of general operat- and result in Council mem- secretary Brookings Russia specialists Fiona worried that government censor- visited the Hermitage Museum in nance, and metropolitan life is ing funds for 20 years. The bers’ vying to host the Council Hill and James B. Steinberg, vice ship could be applied to newspa- the former palace of the czars, the mission of the Brookings Council is a select group of in their city,” says Brookings

president and director of the For- pers, magazines, and the Internet. WILLIAMS TOM attended a performance of Giselle, Institution. business and community lead- trustee Bart Friedman, a sen- eign Policy Studies program, who Later, members of the group the blame on provincial political framework to confront terrorism,” and met with professors at the The many worthwhile projects ers who are actively engaged ior partner in the New York were in Moscow on other busi- assembled in a Kremlin conference leaders. Ivanov’s comments came Ivanov said.“We were found European University. under this mission cost more than in the intellectual life of the law firm of Cahill Gordon & ness, joined the tour and added room for a briefing by Russian immediately after Putin had taken wanting in this respect.” He also The last stop on the trip was $40 million every year.The annual Institution. Reindel. their expertise to the crash course national security advisor Igor over appointment of provincial conceded that the Russian gov- Tallin, capital of the Baltic republic draw from Brookings’s endow- Council donors enjoy invita- In addition to the many on modern-day Russia. Hill had Ivanov.“We were not ready” for governors, who previously had ernment had not been completely of Estonia, an ancient town with a ment covers only about 25 percent tions to Brookings events that opportunities for involvement been present at a three-hour what happened at Beslan, he been elected. forthcoming about the incident vibrant nightlife.At lunch with the of expenses.As a nonprofit organi- address national and interna- with the Institution, including meeting with Putin just before the acknowledged. He placed much of “We need a more unified with the public or the press. Brookings group, youthful and zation, Brookings relies on the tional economic, political, and participation in events such as energetic Prime Minister Juhan generosity of individuals, corpora- social policy challenges. Events the Fall Brookings Board of Parts outlined his vision for the tions, private foundations, and held last year in cities across Trustees/Council dinner, Coun- government. He is cur- tion in 1974 and was Like Robert S. Brook- country. other organizations to contribute a the country provided Council cil donors also receive compli- Founder’s Society rently president of Robin- elected CEO in 1975, a ings and his wife, Isabel— Between meetings, the tour significant portion of the balance. supporters with a first look at mentary copies of newly any forward- “I’ve been associated son & Associates, presi- position he continued to the Institution’s original participants encountered the cul- The Brookings Institution reached Brookings research on a range released Brookings publica- thinking with the Brookings Insti- dent and chairman of hold after the company supporters—Charles tural contrasts inherent in a Russia a remarkable milestone during the of timely issues. tions, policy briefs and Presi- donors, like tution for over a quarter DYNA YACHT, Inc., and merged with Connecticut Robinson and Ralph Saul entering the 21st century: a new past year with more than $32 mil- “Direct contact with schol- dent’s Letters, and a subscrip- Brookings century,” Robinson says. president of Mangia Onda General to form CIGNA recognize the vital role IKEA across from a memorial to lion in gifts and commitments—an ars in small group settings is a tion to the Brookings Alert Mtrustees Charles W. Robin- “Today, more than ever, Co. In 1974, he was Corporation in 1982. His that planned giving has in the tank traps that helped stop 84 percent increase over the previ- unique aspect of involvement e-mail updates. son and Ralph S. Saul, I am convinced of the appointed undersecretary accomplishments in the fortifying Brookings’s Hitler’s invasion; block-long signs ous year. with the Council that distin- “Generous funding from the have made long-term important role Brookings of state for economic worlds of public service future financial strength. in English for Levi’s and flat- “Brookings’s donors ensure the guishes Brookings from other Brookings Council helps make commitments to the plays in producing the affairs and in 1976 and the private-sector Brookings can be screen televisions amid centuries- Institution’s ongoing financial policy organizations,” Freid- possible Brookings’s significant Brookings Institution by highest-quality research became deputy secretary health-care industry are named as a beneficiary old Orthodox and Byzantine health and our ability to continue heim says. impact on policymaking,” says including a provision for that has a direct impact of state during the Ford exceptional. of planned gifts—such churches; MTV competing with the mission of independent, non- During the past year, Coun- Linda Steckley, vice president the Institution in their on our government’s administration. “As the country’s pre- as bequests, retirement other channels programming ballet partisan public policy research and cil supporters participated in of development. estate plans. domestic and foreign Another important mier think tank, Brookings funds, and insurance and classical music. education,” says Linda Steckley, discussions about key policy “We are pleased to recog- Robinson and Saul policy.” member of the Brookings has a distinguished tradi- policies—and life-income The participants also visited an vice president of development. issues with senior Brookings nize the more than 250 have designated Brook- He adds, “I am pleased family, Saul has been a tion of independent, non- gifts, such as charitable example of what Russians see as “Working closely with Brook- scholars, government officials, corporations and individuals ings as the beneficiary of to give Brookings my sup- trustee since 1982 and partisan analysis of issues remainder trusts and their future—a sophisticated brew- ings scholars, the trustees and business leaders, and other that make up the Council,” irrevocable charitable port now and to ensure was the vice chairman of of national importance,” charitable remainder ery that hopes to export its prod- Brookings Council led the effort interested parties. Steckley says (see list, page remainder trusts, which that it will continue in the the Board from 1985 to Saul says. “Brookings has annuity trusts. Some uct to the United States to com- to provide the Institution with the Economic Studies senior 39). “Brookings is delighted distinguishes them as future.” Robinson has 1991. He became an hon- consistently taken the planned gifts allow pete with Budweiser and Sam financial resources necessary to fellows Isabel Sawhill and that the Council has reached members of the Founder’s served as a Brookings orary trustee in 1994. time to see that the facts donors, like Robinson Adams. conduct independent research, Peter R. Orszag led sessions this significant 20-year mile- Society. The lasting trustee since 1977 and Saul began his career are straight and that the and Saul, to enjoy tax “The Brookings expedition to launch exciting initiatives, and on the federal budget and stone and looks forward to legacy they provide will was elected an honorary as a foreign service offi- opinions expressed by and income benefits Russia,”Talbott says,“reminded expand our international reach.” national economy in New York, welcoming many new individu- help ensure that Brook- trustee in 1984. cer with the U.S. Embassy the scholars are well- during their lifetimes me of a cardinal lesson that I The President’s Special Initia- Boston, and Washington. For- als and corporate representa- ings remains a strong and Robinson has had a in Prague, then the capital documented. I believe while making a learned in two decades as a jour- tives Fund is key to the Institu- eign policy topics such as the tives who are committed to objective voice in future long and distinguished of Czechoslovakia. He this is an important her- significant commitment nalist, and also one of which I was tion’s ability to broaden its Middle East, U.S.-Europe rela- independent, nonpartisan policy debates. career in business and joined the INA Corpora- itage to preserve.” to Brookings. ■ reminded as a diplomat:You can’t research agenda in a timely way. tions, international trade, and policy research.” ■ 34 35 This commitment made the issues. The Annie E. Casey Reliance Industries Lim- Combined Individual/Foundation/Corporate Gifts Carnegie Corporation the Foundation supported ited of India, one of South single largest foundation Brookings’s work on a host Asia’s foremost companies, ndividuals and organi- the President’s Special Initia- icy programs,” says Brook- research and policy ideas but The result was a $5 mil- donor to the Foreign Policy of crucial urban and social made a $100,000 gift of zations that provide tives Fund and the other half ings President Strobe Talbott. also to significantly affect lion commitment to estab- Studies program this year policy issues, including ongo- unrestricted support to funds to support Brook- for the Saban Center for Mid- the Middle East policy lish the Initiative on China and underscored the coming research on welfare Brookings in 2004. The ings research believe in dle East Policy. GIFTS TO ENDOW THE debate in Washington. within the Foreign Policy mitment of Brookings and reform, support for low- Institution is grateful for Ithe quality and impartiality It is often difficult to SABAN CENTER FOR Studies program, directed Carnegie to building a safer, income working families, this generous support from of its scholarly research. obtain funding for cutting- MIDDLE EAST POLICY JOHN L. THORNTON by James B. Steinberg. The more secure world. transportation issues faced one of South Asia’s fore- They don’t contribute edge projects. The Special To further perpetuate the AND THE INITIATIVE announcement of Thorn- Carnegie also made by the poor, and parental most companies. The kind because of the kind of per- Initiatives Fund provides work of the Saban Center for ON CHINA ton’s gift was made to the important grants to Brook- choice in K–12 education. of flexible funding that sonal and emotional ties that seed money for projects that Middle East Policy, it was When John L. Thornton Board of Trustees at its ings projects on U.S. political The Casey Foundation Reliance is providing is graduates often feel toward the president believes are essential that a substantial agreed to teach a leadership March meeting. issues, including Congres- also provided key funding for extremely valuable to their alma maters. They important to the future of endowment be established. seminar for the Management For Thornton’s col- sional redistricting and the Urban-Brookings Tax Pol- Brookings’s ability to don’t give to Brookings the Institution but that do This year, Roland and and Public Administration leagues on the board, the implementation of the Vol- icy Center and for Brook- respond to events as they because it is an advocacy not have immediate funding. Dawn Arnall of Ameriquest schools at Tsinghua Univer- gift reinforced the idea that cker Commission’s recom- ings’s Budgeting for National occur and to produce top- group that promotes particu- A gift of this size, to be used Capital Corporation in sity in Beijing, he envisioned Brookings’s work has enor- mendations for reorganizing Priorities project, which notch research and analysis. lar causes. They don’t con- at the president’s discretion, Orange, California, and Eric a seminar of 20 men and mous potential but comes at the federal government. showed how the federal DaimlerChrysler Corpo- tribute because Brookings is gives Brookings the opportu- L. Smidt, president of Central women from the next gener- substantial cost. Thornton The John D. and budget deficit affects pro- ration made a major grant sympathetic to a political nity to address strategic pri- Purchasing, Inc., in Camar- ation of China’s leaders. challenged his colleagues to Catherine T. MacArthur grams for poor and low- in support of the Center party or philosophy. orities and maximize the illo, California, made gener- Hundreds of students join him in raising their Foundation continued its income working families. on the United States and Their altruism is of the Institution’s flexibility to ous gifts of $540,000 each applied for admission to his sights in regard to financial strong tradition of major In 2004, the Casey Foun- Europe (CUSE), which was highest order, driven by civic focus quickly on timely pol- to initiate the endowment class. support for the Institution. funding for the Institution in dation was Brookings’s single launched in 2004. The grant concern and deep engage- icy issues. for the Saban Center. For Thornton, this also As Brookings enters a 2004. With grants totaling largest foundation donor, will support Brookings’s ment with public-policy At a time when the war Brookings is also grateful presented an opportunity to new era, leading to the 2016 nearly $1 million, MacArthur’s with a dozen grants totaling leading-edge research on issues. on terror must be fought to Beny Alagem, co-founder learn. He interviewed each centennial, the chairman has support was critical to Brook- more than $1.4 million. It has transatlantic relations and The following are some with ideas as well as arms, of Packard Bell Electronics, applicant before selecting appropriately raised the ings’s work on both urban been a major partner of the organization of the of Brookings’s most gener- the original thinking and who contributed $180,000 those who would participate standard for leadership. and global issues. Brookings for more than a DaimlerChrysler U.S.-Europe ous contributors: innovative programming of as part of a three-year com- in the seminar. He asked The Foundation gave sig- decade. Forum on Global Issues, a the Saban Center are provid- mitment to the endowment. questions about their lives FOUNDATIONS nificant funding for the proj- “Time and time again the high-level policymaker MAJOR INDIVIDUAL ing policymakers with fresh These commitments and oth- and backgrounds, their The strong support of Brook- ect on Force and Legitimacy Brookings Institution has dialogue that meets twice GIFTS perspectives. Additionally, ers to come will provide the thoughts on China’s role in ings’s foundation partners in the Evolving International produced results that are each year. DaimlerChrysler’s the Center brings together financial security to continue the world in the 21st century, was critical to the Institu- System. The project has two balanced, authoritative, and support of Brookings and THE GREENSPUN leaders who otherwise would the work of Indyk and his and how each of them hoped tion’s growing international aims: to examine the trends relevant to the policy CUSE underscores the FAMILY have no appropriate forum colleagues in the years to influence the future of presence in 2004, as well as that are challenging the debate,” says Douglas W. global reach of the Institu- The Greenspun family is for civil discourse. ahead. their country. to its ongoing work on effectiveness of the existing Nelson, president of the tion’s research. among the most philan- Under the direction of Brookings is grateful for The series of conversa- domestic issues. approach to collective secu- Casey Foundation. “Our part- In 2004, a growing num- thropic in Las Vegas. The Martin Indyk, the Center has the leadership of Haim tions further convinced The financial resources Brookings Council members Elbrun and Peter Kimmelman in Moscow rity and to develop proposals nership not only has allowed ber of companies in Japan, during the Russia study tour. Greenspuns have had a become recognized in the Saban, a trustee of the Insti- Thornton of the importance that foundations provided to for adapting the system to us to benefit from Brook- Taiwan, Hong Kong, and major impact on the Univer- United States and abroad for tution, who developed the of China in international Brookings enabled its schol- contemporary reality. ings’s guidance and insight South Korea provided sup- sity of Nevada at Las Vegas its thoughtful and provoca- concept and provided the trade, politics, and econom- ars to conduct innovative The MacArthur Founda- but, more importantly, has port to Brookings in recogni- and the Nevada Cancer Insti- tive research and programs. resources to found a policy ics in the years ahead. As research on the critical tion also invested in Brook- advanced our efforts to tion of its contribution to tute. This year their charita- For many years, the Green- center at Brookings devoted the highest-profile American regions and issues that drive ings’s groundbreaking work assure to every child the understanding the global ble commitments extended spun family has supported entirely to the Middle East. to join the faculty at American policy. Three foun- on poverty and politics in core promises of American economy and international to Washington and, through efforts to bring peace to the Since its inception, the Tsinghua, he is uniquely dations deserve special Central Asia, a complex and life.” affairs. Brookings’s research Brookings, to other parts of Middle East. Their support Saban Center has been com- aware of how rapidly life in recognition: increasingly important agenda touches on many the world. will enable the Saban Center mitted to providing analysis China is changing. So rapidly, The Carnegie Corpora- region. MAJOR CORPORATE issues that affect these com- Brookings trustee and to expand those efforts at a of events in the region and in fact, that it is impossible tion of New York made a MacArthur continued to GIFTS panies, from international Council member Brian L. time of intensified violence to engaging in long-term to grasp the dynamics and major grant to Brookings in be a major contributor to Brookings’s 2004 fiscal trade and exchange-rate Greenspun, president and and terrorism in the region. research projects on Middle scope of the change unless 2004 for general support of Brookings’s Metropolitan Pol- year brought financial economics to China-Taiwan editor of the Las Vegas Sun, “In the years ahead, the East policy issues. Saban one is there on a regular the Foreign Policy Studies icy program, providing both support from corporate relations and developments along with his wife, Myra, and Greenspuns’ generous com- Center scholars are regularly basis. program. This two-year, general support and funding benefactors across a range on the Korean Peninsula. the Greenspun family, commitment will guarantee quoted in the news media As chairman of the $800,000 award provides for its work on transporta- of industries. Several major Brookings thanks each of mitted $1 million to the Insti- Brookings has the resources and participate in press Brookings Board of Trustees, flexible funding that allows tion reform in metropolitan gifts this year helped its corporate donors for their tution to support two critical to respond to new chal- briefings, forums, confer- Thornton began thinking scholars to conduct long- areas. strengthen the Institution’s support in 2004, not just for areas of research and pro- lenges and opportunities, ences, symposia, and study about his goals for Brookings. term research on the Brookings’s growing commitment to research the financial resources they gramming. Half their gift, to while also ensuring the con- groups. These activities pro- He wanted his first project to regional, technological, and emphasis on international on international issues, from contributed, but for their be dispersed over the next tinued strength of one of our vide an opportunity not only benefit his shared passions: structural issues that shape developments has not dimin- economics to foreign policy valuable insights and per- five years, is designated for most important foreign pol- to disseminate the Center’s China and the Institution. the global security agenda. ished its focus on domestic to governance. spectives on many issues. ■ 36 37 HONOR ROLL OF CONTRIBUTORS

The Fund provides seed money tives Fund during 2004, reinforc- Brookings’s research and commu- $500,000 plus The Starr Foundation $25,000 to $49,999 University of Wisconsin–Madison Anonymous State Farm Insurance Companies Robert John Abernethy Verizon Communications for the Brookings president to ing Brookings’s flexibility and nications activities and enables our Roland and Dawn Arnall Stuart Family Foundation Alcoa Foundation Visa U.S.A. Inc.

take advantage of strategic oppor- responsiveness to significant devel- BAYER DANIEL scholars to react to events as they Richard C. Blum and Senator Swedish International Development American Express Foundation John C.Whitehead Richard C. Blum, founding donor of the tunities by instituting new multi- opments at home and abroad,” unfold.” Dianne Feinstein Cooperation Agency American Honda Motor Co., Inc. The World Bank Poverty and Global Economy Initiative, Taipei Economic and Cultural Repre- disciplinary research projects.The Steckley says. at a conference in Aspen The following pages highlight Annie E. Casey Foundation Aventis President’s Fund also provides The President’s Fund is only key commitments from individu- Department for International Devel- sentative Office The Bank of America Foundation, $10,000 to $24,999 opment, United Kingdom Tokyo Club Foundation for Global Inc. Brookings researchers with a head one type of unrestricted funding corporate and individual donors, als, corporations, and private foun- Aon Corporation Government of Japan, United Nations Studies Rex J. Bates Aramco Services Company start on critical projects when that enables Brookings to act along with a number of founda- dations that have propelled Brook- Human Security Trust Fund Union of Chambers of Commerce of Alan R. Batkin Automatic Data Processing, Inc. there has not been time to secure quickly when global crises tions, who make these vital gifts ings forward and solidified its Claude R. Lambe Charitable Foundation Turkey The Boeing Company BellSouth Corporation funding. demand immediate analysis and to the Institution,” Steckley says. internationally recognized role as Living Cities, Inc.:The National The Harry & Jeanette Weinberg BP America, Inc. Bertelsmann Stiftung “We are pleased that we were response. “They support the critical infra- a source of independent research Community Development Initiative Foundation Eli Broad The Boston Consulting Group, Inc. The John D. & Catherine T. The Vincent Wilkinson Foundation Caterpillar Inc. Bristol-Myers Squibb Foundation able to expand the Special Initia- “We are very grateful to our structure that undergirds all of that shapes the future. ■ MacArthur Foundation World Economic Forum Center for Global Development The Andrea and Charles Bronfman Cheryl and Haim Saban ChevronTexaco Corporation Fund $50,000 to $99,999 Citigroup Global Markets Inc. Rhoda W.Brownstein Policy, Economic, and G. Gale, Economic Studies These additional $250,000 to $499,000 American Legacy Foundation Citizens Bank Foundation Richard C. Bush Endowed Chairs Governance Studies Senior Fellow. endowments are greatly Anonymous (2) AT&T Robert A. Day Cargill, Incorporated The Cabot Family Charitable Trust District of Columbia Primary Care The Carlyle Group Senior Fellow. The New Century Chair in valued by the Brookings Carnegie Corporation of New York Fannie Mae Foundation The Virginia Wellington Cabot Association Center for Policy Studies n an environment of on Asia. Chairholder: The W. Averell Harriman International Trade and Eco- Institution: Arjay and Frances Miller Foundation Thomas E. Donilon CIG International, Inc. economic uncer- Richard C. Bush, Director Chair was established by nomics was established by Charles Stewart Mott Foundation The Morris and Gwendolyn Cafritz William A. Dunn CIGNA tainty, Brookings’s of Northeast Asian Policy the W. Averell & Pamela Toyota to support research The Edward M. Bernstein The Pew Charitable Trusts Foundation Ford Foundation Civil Justice Reform Group endowment provides Studies. C. Harriman Foundation on international trade and Scholars Fund U.S. Chamber of Commerce University of California–Berkeley Harry Freeman A.W.Clausen Timothy C. Collins Cyrus F.and Mitzi Freidheim, Jr. The Cleveland Foundation Ia steady source of finan- The Herman and George to support research in economics. Chairholder: Alan M. Dachs German Institute for International and The Community Foundation of cial support and plays an R. Brown Chair was estab- American governance. Lael Brainard, Economic The John C. Bowen $100,000 to $249,999 Anonymous Lawrence K. Fish Security Affairs Louisville integral role in helping the lished by the Brown Foun- Chairholder: Thomas E. and Foreign Policy Studies Endowed Presidential Fund S. Daniel Abraham Foundation for Child Development Rollin M. Gerstacker Foundation Cummins, Inc. Institution build on its dation Inc. of Houston in Mann, Governance Stud- Senior Fellow. Beny Alagem Freddie Mac Community Relations The Philip L. Graham Fund DoubleClick Inc. extraordinary record of 1994 to support research ies Senior Fellow. The Robert V. Roosa The Carliner Endowment Boston College Donor Assisted Fund of The William T. Grant Foundation The Dow Chemical Company Community Foundation of the William A. Haseltine, Ph.D. Mario Draghi achievement. in education policy. The Adeline M. and Chair was established for Economic Studies Canadian Department of Foreign National Capital Region The Heinz Endowments Eastman Kodak Company The endowment not Chairholder: Diane Alfred I. Johnson Chair through the generosity of Affairs and International Trade DaimlerChrysler Corporation Bart Friedman Samuel J. Heyman Julie Finley only enhances the long- Ravitch, Governance was established by then– numerous donors to honor The Juliet & Lee Merrit Estate of Mary Lily David GE Foundation Joel Z. Hyatt Richard W.Fisher term financial security of Studies Nonresident Brookings Chairman former Brookings trustee Folger/Folger Fund Fellowship Government of Denmark Jeffrey W.Greenberg ITOCHU International Inc. Ford Motor Company Fund the Institution, it also pro- Senior Fellow. James A. Johnson in sup- Robert V. Roosa and to Exxon Mobil Corporation The J.P.Morgan Chase Foundation Johns Hopkins University Embassy of France The Korea Foundation Johnson & Johnson Family of General Motors Corporation vides a way for Brookings The Cabot Family Chair port of research on urban support research on inter- The Robert and Virginia The Freeman Foundation Law & Economics Consulting Group, Companies Goldman, Sachs & Co. to honor key donors and was established by the and metropolitan policy. national economics. Hartley Fellowship Georgetown University The German Marshall Fund of the Inc. Michael H. Jordan Jerome H. Grossman, M.D. important members of the Cabot Family Charitable Chairholder: Bruce Katz, Chairholder: Barry P. United States Estate of Henrietta Lockwood Nemir Kirdar Marion Guggenheim Brookings community in Trust. Chairholder: Isabel Vice President and Direc- Bosworth, Economic Stud- The Ed Hewett Fellowship Brian L. and Myra S. Greenspun and Luso-American Foundation The Embassy of the Republic of Agnes Gund perpetuity. V. Sawhill, Vice President tor of Metropolitan Policy. ies Senior Fellow. Fund the Greenspun Family National Defense University Korea James A. Harmon Government of Norway Daniel H. and Sunita Leeds F. Warren Hellman We are pleased to rec- and Director of Economic The Bruce and Virginia The Sydney Stein Jr. Estate of Andrew Heiskell Maconda Brown O’Connor, Ph.D. Local Initiatives Support Corporation Cynthia Helms ognize the scholars who Studies. MacLaury Chair was estab- Chair was established by The Robert S. Kerr Fund The William and Flora Hewlett Foundation John M. Olin Foundation, Inc. Matsushita Electric Industrial Hewlett-Packard held endowed chairs dur- The Douglas Dillon Chair lished in honor of Brook- former Brookings trustee The Robert Wood Johnson The David and Lucile Packard University of Michigan Japan Bank for International ing fiscal year 2004 and was established by the ings’s fourth president, Sydney Stein Jr. to support The Oscar E. Kiessling Foundation Foundation Microsoft Corporation Cooperation the donors who made it Dillon Fund to support Bruce MacLaury, and his research on international Fellowship James A. Johnson Frank H. Pearl Eric M. Mindich The Kansai Electric Power Company, Pfizer Inc. Allen J. Model Inc. possible. research in government wife, Virginia. Chair- security. Chairholder: The Joyce Foundation Phoenix Satellite Television Holdings Mario M. Morino Herbert M. Kaplan studies. Chairholder: Paul holder: Henry J. Aaron, Michael E. O’Hanlon, For- The Okun Model Fellowship Ewing Marion Kauffman Foundation John S. and James L. Knight Limited Embassy of the Netherlands James M. Kemper, Jr. ENDOWED CHAIRS C. Light, Director of the Economic Studies Senior eign Policy Studies Senior Fund for Economic Studies Foundation Rutgers,The State University of New New School University Brenda R. Kiessling The Michael H. Armacost Center for Public Service. Fellow. Fellow. The Henry Luce Foundation Jersey Samuel Pisar, Ph.D. Peter and Elbrun Kimmelman Chair was established The Stephen and Bar- The Arjay and Frances The John C. and Nancy The Pechman Fellowship The Markle Foundation John L.Thornton Prince Charitable Trusts Marie L. Knowles The Tinker Foundation, Inc. Steven Rattner and P.Maureen White Korea International Trade Association through the generosity of bara Friedman Endowed Fearing Miller Chair was D. Whitehead Chair was Fund The McKnight Foundation U.S. Department of Housing and Foundation, Inc. Michael A. Lacher numerous donors to Fellowships were estab- established by Brookings established by Brookings William Penn Foundation Property-Casualty CEO Roundtable Urban Development Raytheon Patrick J. Landers honor former Brookings lished by Brookings trustee Arjay Miller and trustee John Whitehead The Ralph S. Saul Embassy of Qatar The Urban Institute The Rockefeller Foundation Philip Mallinckrodt President Michael H. trustee Stephen Friedman his wife, Frances Fearing and his late wife, Nancy. Endowment Fund Reliance Industries Limited WellPoint Health Networks Inc. Felix G. Rohatyn Marathon Oil Corporation Armacost by supporting and his wife, Barbara. Miller, to support research Chairholder: Gary Burtless, Rockefeller Brothers Fund Stephen M.Wolf Ralph S. Saul Robert E. Marks Ezra K. Zilkha Alfred P.Sloan Foundation Marubeni America Corporation research in foreign policy Fellowship recipient: on federal economic pol- Economic Studies Senior The Ezra K. Zilkha The Sandler Family Supporting Vincent J.Trosino The McGraw-Hill Companies, Inc. studies with an emphasis Nigel Purvis, Foreign icy. Chairholder: William Fellow. Endowment ■ Foundation Eric Smidt U.S. Environmental Protection Agency Robert S. McNamara 38 39 STATEMENTS OF ACTIVITIES Years Ended June 30, 2004 and 2003 (in thousands)

Merrill Lynch & Co., Inc. Ellen Chesler and Matt Mallow John G. Popp Donald F.McHenry Mitsubishi International Corporation Hong Ching-Son William F.Pounds Priscilla J. McMillan Mitsui & Co. (U.S.A.), Inc. Geoffrey J. Colvin J.Woodward Redmond Mary Patterson McPherson TEMPORARILY PERMANENTLY 2004 2003 Morgan Stanley Corning Incorporated Foundation Marie Ridder Nathan Associates, Inc. UNRESTRICTED RESTRICTED RESTRICTED TOTAL TOTAL NEC USA Jay and Patrisha Davis Coupe Charles W.Robinson Henry Oechler, Jr. OPERATING REVENUES NERA Arthur B. Culvahouse, Jr. James D. Robinson, III John F.Olson Investment return designated for operations $10,503 $10,503 $11,191 Netherlands Ministry of Foreign Alan Curtis Daniel and Joanna S. Rose William A. Owens Grants and contracts 530 $26,257 26,787 12,107 Affairs Kenneth W.Dam Jamie S. Rubin Paul L. Peck, Jr. Donald E. Newhouse Marcia W.Dam Stanley M. Rumbough, Jr. John Edward Porter Contributions 3,096 555 3,651 2,586 Nissho Iwai Foundation D. Ronald Daniel and Lise C. Scott Henry B. Schacht Principal Financial Group Foundation, Conferences 3,132 3,132 3,566 Novartis Pharmaceuticals Corporation Judy T. Davis Leonard D. Schaeffer Inc. Brookings Press 2,765 2,765 2,654 NTT USA Bruce B. Dayton Sheldon and Elinor A. Seevak Quadrangle Development Group Information Technology Services 55 55 49 NYK Line Government of the District of John A. Shane Dorothy P.Rice Interest and dividends 7 7 27 Eiji Ono Columbia Alan B. Slifka Rozanne L. Ridgway PACCAR Foundation Domitilia M. dos Santos Robert E. and Emily L. Smith Alice M. Rivlin Rental income, net 61 61 300 Pepco Holdings, Inc. Anthony Downs Robert Solomon Judith Rodin, Ph.D. Visiting scholars 375 375 244 The Pittway Corporation Charitable Charles W.Duncan, Jr. Helmut Sonnenfeldt Blair Ruble Other income 358 358 86 Foundation Eli Lilly and Company Foundation Joan E. Spero Warren B. Rudman Net assets released from restrictions- B. Francis Saul, II Jenfei Fan Myron Sponder Francis H. Schott Grants and contracts 17,137 (17,137) 0 0 Michael P.Schulhof Alan Fleischmann Frederick Stavis Richard W.Snowdon, III The Paul D. Schurgot Foundation, The Lee and Juliet Folger Fund Joshua L. Steiner S. Frederick Starr Total Operating Revenue 38,019 9,675 47,694 32,810 Inc. Jonathan H. Francis Strobe Talbott and Brooke Shearer Linda G. Steckley and Peter A.Weitzel Shell Oil Company Foundation Tom Fraser Andrew H.Tisch SunTrust Banks, Inc. OPERATING EXPENSES The St. Paul Travelers Companies, Inc. David Friend Toyota John Train Operating programs: Andrew P.and Patricia Steffan Ann M. Fudge U.S. Department of Labor Transwestern Commercial Services Economic Studies 10,428 10,428 9,765 Sumitomo Corporation The Furth Family Foundation U.S. Department of State Laura D’Andrea Tyson Government of Switzerland Richard N. Goldman Antoine W.van Agtmael Paul A.Volcker Foreign Policy Studies 7,157 7,157 6,493 The University of Sydney Lincoln Gordon Enzo Viscusi Walker & Dunlop Governance Studies 4,283 4,283 6,073 Taiwan Cement Corporation Jeffrey C. Gore James M.Walsh West Group Other research 771 771 217 Taiwan Semiconductor Education and Morton Goulder Hermine Warren Karen Hastie Williams Center for Public Policy Education 4,010 4,010 3,629 Culture Foundation Vartan Gregorian Eric Weinmann YMCA of Metropolitan Washington Brookings Press 3,337 3,337 3,140 Nelson Talbott Patrick W.and Sheila Proby Gross Malcolm H.Wiener Zachry Construction Corporation Toshiba America, Inc. John H. Gutfreund Wiley, Rein & Fielding LLP Communications 989 989 1,104 Tudor Investment Corporation Peter E. and Mimi Haas James M.Wootton Additional Donors Total Operating Programs 30,975 30,975 30,421 The USAA Foundation,A Charitable James Hackett World Zionist Organization Michele D. Bertrand Supporting services: Trust Samuel Hellman, M.D. John Brown Management and General U.S. Department of Transportation Robert A. Helman $500 to $4,999 Richard Brown Information Technology Services 2,156 2,156 2,199 Union Pacific Railroad Company Harold Hestnes Robert E.Asher Peter Clement Administration 3,761 3,761 3,845 The Washington Post Marshall M. and Doris B. Holleb Martin N. Baily Lawrence W.Crispo Harvey L.Weiss Roy M. Huffington Zoë Baird Jean Davis Interest expense 111 111 142 James D.Wolfensohn John W.and Pamela Humphrey BB & T Craig T. Enoch Post-retirement benefits 746 746 743 Wyeth Francis O. Hunnewell Daniel J. Callahan, III Harvey Galper Total management and general 6,774 6,774 6,929 The Xerox Foundation Shirley Ann Jackson, Ph.D. Morton Cohen Raymond L. Garthoff Development 1,927 1,927 1,875 Daniel H.Yergin and Angela Stent Martin Jacobson The Doctors Company Gerson Lehrman Group Total Operating Expenses 39,676 39,676 39,225 Janet M. Johnson Double H Housing Corporation Robert M. Heller $5,000 to $9,999 The Fletcher Jones Foundation Draper and Kramer Foundation Esther V.Hewett Operating revenues over (under) Leonard Abramson Robert S. Kaplan Eaton Corporation Roslyn Kaiser operating expenses (1,657) 9,675 8,018 (6,415) American Society of the French James C. Kautz Henry L. Gates, Jr., Ph.D. Bruce Katz Thomas L. Kempner Legion of Honor Gertrude Greenslade Kimberly Kay NON-OPERATING ACTIVITIES The F.M. Kirby Foundation, Inc. Ronald M.Ansin and Mayor Jim Robert D. Haas George Kolt Investment return in excess of amounts Stork Robert P.Kogod Lee H. Hamilton Herbert S. Levine Elizabeth E. Bailey Henry R. Kravis Ron Haskins John Linker designated for operations: The Bank of Tokyo–Mitsubishi, Ltd. Marc E. Leland Nancy M. Hewett, Ph.D. Mark C. Medish Realized gain (loss) on sale of investments 9,100 9,100 (10,880) Bank One Bruce K. MacLaury The Hillman Company Richard Miles Unrealized gain from investments 21,203 21,203 15,192 Richard A. Bartlett Michael Maharam Roland A. Hoover Bruce Parrott Interest and dividends, net 1,855 1,855 3,261 Stephen Maharam Ernest A. Bates, M.D. David P.Hunt Judyth Pendell Investment income allocation (10,503) (10,503) (11,191) Walter E. Beach Edward J. Mathias The JBG Companies William B. Quandt Greg Behrman Herbert P.McLaughlin, Jr. Ann and Vernon E. Jordan, Jr. Charles B. Saunders, Jr. Contributions-Permanent Endowment 1,669 1,669 215 Peter L. Briger, Jr. Thomas G. Mendell Kaiser Permanente Andrew Solomon Change in net assets from non-operating John Brock Clifford L. Michel Phillip Kaiser Edwin M.Truman activities 21,655 1,669 23,324 (3,403) Christopher H. Browne National Council of Applied Lea Kenig Lloyd Ulman INCREASE (DECREASE) IN NET ASSETS 19,998 9,675 1,669 31,342 (9,818) Economic Research Conrad Cafritz Douglas Kiessling Gary Wenell Net assets at the Beginning of the Year 155,096 16,971 44,795 216,862 226,680 William M. Cameron Augustus K. Oliver Macy’s East, Inc. Caterpillar Foundation John E. Osborn David O. Maxwell Net assets at the End of the Year $175,094 $26,646 $46,464 $248,204 $216,862 40 41 STATEMENTS OF FINANCIAL POSITION TRUSTEES As of June 30, 2004 and 2003 (in thousands)

John L. Thornton Jeffrey W. Greenberg Vincent J. Trosino Robert F. Erburu Arjay Miller 2004 2003 Chair of the Board President, COO and Chairman of the Board (Retired) Dean Emeritus The Brookings Institution Brian L. Greenspun Vice Chairman of the Board The Times Mirror Company Stanford Graduate School ASSETS President and Editor State Farm Mutual Automobile of Business Strobe Talbott Las Vegas Sun Insurance Company Henry Louis Gates Jr. Ph.D. Current Assets President Chairman Mario M. Morino Cash and cash equivalents $1,787 $3,038 The Brookings Institution William A. Haseltine Ph.D. Laura D’Andrea Tyson Department of African and African Chairman and Managing Director President Dean American Studies Morino Group Accounts receivable 1,416 2,582 Zoë Baird Haseltine Associates London Business School Harvard University Grants and contracts receivable, current portion 13,573 6,209 President Maconda Brown O’Connor The Markle Foundation Teresa Heinz (leave of absence) Beatrice W.Welters Robert D. Haas Ph.D. Pledges receivable, current portion 523 785 Chairman Founder Chairman of the Board Chairman of the Board Accrued interest and dividends 103 231 Alan R. Batkin Heinz Family Philanthropies An-Bryce Foundation Levi Strauss & Co. The Brown Foundation, Inc. Inventory 817 778 Vice Chairman Kissinger Associates Inc. Samuel Hellman M.D. Stephen M. Wolf Lee H. Hamilton Samuel Pisar Ph.D. Other assets 337 262 A.N. Pritzker Distinguished Managing Partner President and Director International Lawyer Total current assets 18,556 13,885 Richard C. Blum Service Professor Alpilles LLC The Woodrow Wilson International New York and Paris Chairman and President The University of Chicago Center for Scholars Blum Capital Partners L.P. Daniel Yergin J. Woodward Redmond Grants and contracts receivable, net of current portion 7,185 3,772 Joel Z. Hyatt Chairman F.Warren Hellman President Pledges receivable, net of current portion 1,087 83 James W. Cicconi CEO Cambridge Energy Research Chairman J.W.Redmond & Company General Counsel and INdTV LLC Associates Hellman and Friedman LLC Investments, at fair value 219,286 197,114 Executive Vice President Charles W. Robinson Land, buildings and equipment, net 11,999 12,796 AT&T Shirley Ann Jackson Ph.D. HONORARY TRUSTEES Robert A. Helman President President Leonard Abramson Senior Partner Robinson & Associates, Inc., TOTAL ASSETS $258,113 $227,650 Arthur B. Culvahouse Jr. Rensselaer Polytechnic Institute Consultant and Member of the Mayer, Brown, Rowe & Maw CBTF Co., and M Ship Co. Chair Boards of Directors LIABILITIES O’Melveny & Myers LLP Ann Dibble Jordan Children’s Hospital of Philadelphia Roy M. Huffington James D. Robinson III and Johns Hopkins University Chairman and CEO Chairman Current Liabilities Alan M. Dachs Michael H. Jordan Roy M. Huffington Inc. RRE Ventures Accounts payable and accrued expenses $2,312 $3,406 President and CEO Chairman and CEO Elizabeth E. Bailey Fremont Group EDS Corporation Chair and John C. Hower Professor James A. Johnson Judith Rodin Ph.D. Accrued compensated leave 1,478 1,351 of Business and Public Policy Vice Chairman President Emerita and Fox Deferred revenue 695 856 Kenneth W. Dam Marie L. Knowles The Wharton School Perseus L.L.C. Leadership Professor Max Pam Professor Executive Vice President and University of Pennsylvania University of Pennsylvania Note payable, current portion 450 450 of American & Foreign Law CFO (Retired) Vernon E. Jordan Jr. Total current liabilities 4,935 6,063 University of Chicago Law School Atlantic Richfield Company Rex J. Bates Senior Managing Director Warren B. Rudman (ARCO) R.J. BATES Lazard Frères & Co. LLC Of Counsel Thomas E. Donilon Of Counsel Paul,Weiss, Rifkind,Wharton Note payable, net of current portion 600 1,050 Executive Vice President Harold Hongju Koh Louis W. Cabot Akin Gump Strauss Hauer & Feld & Garrison Post-retirement benefit obligation 4,374 3,675 Law and Policy Dean Chairman LLP Fannie Mae Yale Law School Cabot-Wellington LLC B. Francis Saul II TOTAL LIABILITIES $9,909 $10,788 Yale University Breene M. Kerr President and Chairman Mario Draghi A. W. Clausen President B.F.Saul Company NET ASSETS Vice Chairman and Managing William A. Owens Chairman and CEO (Retired) Brookside Company Director President and CEO Bank of America Corporation Ralph S. Saul Unrestricted $175,094 $155,096 Goldman Sachs International Nortel Networks James T. Lynn Former Chairman Temporarily restricted 26,646 16,971 William T. Coleman Jr. CEO (Retired) CIGNA Corporation Kenneth M. Duberstein Frank H. Pearl Senior Partner and Senior Aetna Life & Casualty Co. Permanently restricted 46,464 44,795 Chairman and CEO Chairman and CEO Counselor Henry B. Schacht Total net assets 248,204 216,862 The Duberstein Group Inc. Perseus L.L.C. O’Melveny & Myers LLP Jessica Tuchman Mathews Director and Senior Advisor President Lucent Technologies Inc. Lawrence K. Fish John Edward Porter Lloyd N. Cutler Carnegie Endowment for TOTAL LIABILITIES AND NET ASSETS $258,113 $227,650 Chairman, President and CEO Partner Senior Counsel International Peace Michael P. Schulhof Citizens Financial Group Inc. Hogan & Hartson Wilmer, Cutler, Pickering, Hale and Private Investor Notes: Program Expenses Operating Revenues 32% Dorr LLP David O. Maxwell As a nonprofit and scientific organization, Brookings Economic Studies Richard W. Fisher Steven Rattner Chairman and CEO (Retired) Joan E. Spero is exempt from federal income taxes under section Vice Chairman Managing Principal D. Ronald Daniel Fannie Mae President 2% 54% Kissinger McLarty Associates Quadrangle Group LLC Director Doris Duke Charitable Foundation 501(c)(3) of the Internal Revenue Code.The Insti- Other Research Gifts and Grants McKinsey & Company, Inc. Donald F. McHenry tution also qualifies as a publicly supported organiza- Cyrus F. Freidheim Jr. Haim Saban Distinguished Professor in the John C. Whitehead 3% Chairman of the Board and CEO Chairman and CEO Robert A. Day Practice of Diplomacy and Chairman Communications 1% tion under section 170(b)(1)(A)(vi) of the code.The Government (Retired) Saban Capital Group Inc. Chairman and CEO International Affairs Lower Manhattan Development Brookings policy is to make an annual investment Chiquita Brands International Inc. Trust Company of the West School of Foreign Service Corporation 6% Leonard D. Schaeffer Georgetown University spending allocation for the support of operations.This Development 2% Miscellaneous Bart Friedman Chairman and CEO Bruce B. Dayton James D.Wolfensohn amount is calculated based on 70% of the prior year’s 10% Senior Partner WellPoint Robert S. McNamara President Publications Cahill Gordon & Reindel Charles W. Duncan Jr. Former President The World Bank spending adjusted for inflation and 30% of 5% of the 7% Publications Lawrence H. Summers Chairman The World Bank market value of the investments as of December 31 of David Friend President Duncan Interests Ezra K. Zilkha 12% the prior fiscal year.A copy of the Institution’s audited CPPE 8% General Partner Harvard University Mary Patterson McPherson President CPPE Orchid Partners Walter Y. Elisha Vice President Zilkha & Sons Inc. financial statements is available by request. Certain David F. Swensen Chairman and CEO (Retired) The Andrew W.Mellon Foundation 13% reclassifications of prior year balances have been made Governance Studies 28% Ann M. Fudge Chief Investment Officer Springs Industries Inc. to conform to the current year presentation. Endowment Chairman and CEO Yale University 22% Young & Rubicam Inc. 42 Foreign Policy Studies 43 Brookings by the Numbers (July 1, 2003–June 30, 2004)

■ Brookings’s rank among Washington think tanks in press ■ Number of guest and visiting fellows: 44 citations: 1 ■ Number of research assistants: 43 ■ Average monthly total of Brookings mentions in various print,TV,radio, wire, and web outlets: 1,164 ■ Number of current Brookings scholars who have served in the government or in an international agency: 65 ■ Average number of Brookings mentions each month in the New York Times, Washington Post, and Los Angeles Times:67 ■ Number of times that Brookings scholars testified at Con- gressional hearings: 27 ■ Number of op-eds written by Brookings scholars for U.S. and international newspapers: 188 ■ Number of Brookings scholars who testified before the National Commission on Terrorist Attacks Upon the ■ Number of op-eds by Brookings scholars published in the United States (9/11 Commission): 4 New York Times, Washington Post, and Los Angeles Times:57 ■ Number of languages spoken by Brookings scholars: 14 ■ Number of TV and radio interviews conducted in the Brookings Studio: 1,028 ■ Number of Policy Briefs published: 21

■ Number of subscribers to the Brookings Alert on the web ■ Number of books published by the Brookings Institution BROOKINGS (as of October 1): 22,500 Press: 52

■ Number of employees at the Brookings Institution’s head- ■ Number of scholarly journals published by Brookings: 8 quarters: 281 ■ Number of articles written for the Brookings website: 47 ■ Number of Brookings resident and nonresident scholars: 147 ■ Number of public briefings at Brookings: 56 ■ Number of Brookings scholars who are resident senior fellows: 43 ■ Average audience size for a briefing in Falk Auditorium: 107

■ Number of Brookings scholars who are nonresident senior ■ Dollar value of the Brookings Institution endowment (as fellows: 44 of June 30, 2003): $219,286,000