OVERVIEW:

SCID focuses on specific countries and regions as well as on policy issues common to all areas. At present, work is underway in India/South Asia, China/East Asia, and Latin America (with an emphasis on the larger economies of Argentina, Brazil, Chile and Mexico).

Projects involving cross-country studies of policy issues are chosen first because of their potential to yield important policy recommendations, and then because of both the availability of distinguished researchers whose areas of expertise are aligned with SCID’s interests, and the availability of funding for the projects.

In selecting the world’s largest developing nations as the focus of its research, SCID is able to analyze and compare experience that will help policy makers everywhere to improve their economies’ performance. China and India alone represent 40% of the world’s developing populations. By drawing upon lessons from research, governments will learn which policies can improve the economic prospects of their citizens.

REGIONS OF RESEARCH:

The primary activities of our India program include two conference series, one held at Stanford University and the second in India, and a program of research on policy relevant issues for the Indian economy.

Mirror Conferences held in Kolkata and Mumbai, December 2003: SCID took a team of researchers, headed by Prof. Roger Noll, Director, SCID, to Kolkata and Mumbai in December 2003. These conferences were organized in partnership with The Indus Entrepreneurs (TiE) and the Mumbai and Kolkata branches of the Confederation of Indian Industries (CII). Our goal was to develop relationships with the business community, and to invite them to partner with us in our objective of enhancing research-informed policy discussions on the major policy issues facing state governments in India. The considerable turnout at both conferences suggested our success in this endeavor.

The other members of the team included Prof. T.N. Srinivasan (Senior Fellow, SCID and Professor, Yale University); Prof. Barry Weingast (Stanford University); Prof. Frank Wolak (Stanford University); and Dr. Anjini Kochar (SCID). The focus of both conferences was infrastructural and institutional reform. Professor Weingast discussed the effect of India’s federalist structure on policy, drawing comparisons between India and China. Professor Wolak, a world expert on the design of systems for the delivery of electricity, and currently the Chairman of the California Independent System Operator for the New Competitive Supply Industry in California, raised issues related to introducing competitiveness into the electricity industry, drawing on his considerable experience and involvement in the formulation of electricity policy in both developed and developing economies. Prof. Srinivasan gave an overview and assessment of the Indian economic reform system, while Dr. Kochar discussed the design of education and social welfare policies.

In both Kolkata and Mumbai, we were fortunate to have the participation of Mr. N.K. Singh, Member, Planning Commission, speaking on the important issue of growing regional disparities in India, and on priority areas of concern in the years to come. Both conferences were also attended by high level members of the state Governments, including Dr. Asim Dasgupta, Finance Minister, the Government of West Bengal. Other members of the West Bengal Government who participated in the conference included Shri T.K. Bose, Principal Secretary School Education, and Dr. S. Sen, Principal Secretary Commerce and Industry. In Mumbai, the conference was attended by Mr. Vishwas Dhumal, Principal Secretary Industries and by Mr. Jayant Kawale, Principal Secretary Energy, Government of Maharashtra.

The Mumbai conference also featured talks by Prof. Gary Becker, Hoover Institute, Stanford University and the University of Chicago, by Prof. Gerhard Casper, past President, Stanford University, and by Dr. Rakesh Mohan, Deputy Governor, Reserve Bank of India. As a consequence of the very high level of participation, both conferences received considerable attention in the Media (press releases are attached).

Outreach Activities to Members of India’s Business Community: Recognizing the importance of partnering with businesses in India to ensure the success of our efforts, we have made special efforts to increase our outreach to members of India’s business community in recent months. While in India, our team, accompanied by Mr. Ramesh Yadava of TiE also traveled to Bangalore, for day-long meetings with Mr. Narayana Murthy of Infosys, and Mr. Asim Premji of Wipro. Our objective was to explain our mission, describe our activities, and invite their participation, particularly in our Mirror Conferences. Our meetings were highly successful: Mr. Naryana Murthy agreed to host our mirror conference for next year at the Infosys campus.

We have worked hard to initiate contacts with other Indian business houses. We recently opened a dialogue with Satyam Computer Services, Ltd., and hosted the chairman, Mr. B. Ramalinga Raju for a breakfast meeting at Stanford. We are delighted to report that he, too, has agreed to host a mirror conference in December of this year at Hyderabad. We are also exploring the possibility of collaborating with researchers at the BYRRAJU Foundation, which he heads, on evaluations of social sector programs.

Follow-up Research Projects with the Punjab Government, and with Research Institutes in Punjab: Following our successful conference hosted by the Punjab Government in Chandigarh, January 2003, we are committed to undertaking research on projects of special interest to the Punjab Government. Towards this end, Dr. Kochar visited Chandigarh in January 2004, and held discussions with members of the Punjab Government as well as researchers at the Center for Research on Rural and Industrial Development (CRRID), Chandigarh. As a result of her visit, SCID has prepared and submitted two research proposals, one to the Punjab Government for research on the Government’s new initiatives on elementary schooling, and one to CRRID, for research on fiscal decentralization and its effects on social sectors.

Annual Conference, June 3-5 2004, Stanford University: We continue to develop our plans for our Fifth Annual Conference, which will highlight issues related to Infrastructure. We are very pleased to report that we have received confirmation of attendance from the Chief Minister of the National Capital Territory of Delhi, Smt. Sheila Dikshit, and from the Chief Minister of Rajasthan, Smt. Vasundhara Raje. Others who plan to attend are: Dr. Rakesh Mohan, Deputy Governor, Reserve Bank of India; Dr. Anne Krueger, First Deputy Managing Director, International Monetary Fund; Mr. Shahi, Secretary, Government of India, Ministry of Power; and Mr. N.K. Singh, Member, Planning Commission.

Mirror Conferences, December 2004: As noted above, we are in the process of organizing our mirror conferences for this year, to be held in Bangalore and Hyderabad.

The Latin American program began in 2000, culminating in November with a general policy conference. Research presented at that conference emphasized fiscal and financial reforms. The primary focus is on issues affecting the Latin American countries with the largest populations: Mexico, Brazil, Chile, and Argentina.

The current scope of work is exploring labor market reforms, and an annual conference is scheduled for each November and will be held on or near the Stanford campus. Under Construction

TOPICS OF RESEARCH:

SCID faculty and researchers are continually identifying the topics that require worldwide attention. These topics are those with the chances for highest leverage results. A name researcher is brought on board to lead the research team. Once the research is completed, a conference is held to disseminate the findings. Topics SCID has undertaken or those that are underway include:

Education, 2000 Research on Education in Developing Countries was a conference funded by a generous grant from the Mellon Foundation. The research and conference, led by Professor Anjini Kochar, explored education policy in developing countries, and it brought together the foremost theoretical and empirical researchers working on education-related issues in developing areas (empirical papers used data from a variety of countries including India, Indonesia, Vietnam, Kenya, Mexico, and Thailand). The goal was to consolidate on-going research on the determinants of education, as well as the effects of education on growth, and to identify the areas where research is most required.

Finance Markets in Mexico, 2001, 2002 While the conference, coordinated and led by Professor Jose Antonio Gonzalez, held in 2001 focused solely on Mexico, the long-term plan is to have more widespread research throughout Latin America.

The Financing Private Enterprises in Mexico conference was the result of a joint research project with the Banco de México. The motivation of the project was that despite the fact that bank credit, the most important source of finance, plummeted from 10% of GDP in 1994 to 0.3% of GDP in 1999, domestic investment and economic activity returned to their pre-crisis levels relatively quickly. Thus the questions are: where are firms getting finance, are these new sources of funds sustainable, and are the characteristics of finance different?

The Conference presented ten papers as the first effort to portray a complete picture of private finance in Mexico. The policy implications are significant since private investment is emerging as an obstacle to sustainable, non-inflationary growth. The papers analyze each source of financing in Mexico, and the implications for economic growth and macroeconomic policy making.

Federalism and Globalization, 2002 This research project involved a team of researchers led by Professors Krueger and TN Srinivasan. They focused on seven countries; the developed economies of Canada and Australia and the developing economies of Argentina, Australia, Brazil, Canada, India, Mexico nd Nigeria. Researchers are investigating the evolving relations between central and local governments in a world of ever-increasing economic integration. An important focus of the research was the actual and potential development of direct relations between provinces/states and foreign investors and traders that bypass the central authorities, and the implications for economic management. Results were presented in a conference held in June 2002.