Robert Zoellick's Address at 2012 PRGS Commencement

PRGS policy panel at Commencement 2012

At the Friday night Commencement Weekend policy discussion (l-r):
Susan Marquis, James Thomson, Francis Fukuyama, and Robert Zoellick

Introduction

Good afternoon, President Rich, Dean Marquis, faculty, students, parents, families, and friends.

It is a great honor to share this special occasion, and to congratulate all of you – students and teachers, family and friends, for the hard work and achievement that today’s celebrations commemorate.

You can be proud of what you have accomplished.

I hope you are excited about the opportunity that you have to shape and lead public policy. Your job now is to help change the world for the better. That’s a great responsibility – and a privilege. Congratulations!

I’d like to say a few words about my fellow honorees and friends, Jim Thomson and Frank Fukuyama. Both have been exceptional public servants. They have also shown how public service can be found outside government.

Jim made important contributions to defense and security policy while serving at the U.S. Department of Defense and the National Security Council. Yet Jim’s most lasting legacy is likely to have been through his leadership of RAND, where he has contributed so much by transforming RAND after the end of the Cold War, and by increasing the breadth and reach of RAND’s work around the globe. All of us owe Jim a big thanks for being an architect and builder of a unique institution.

I first met Frank in early 1989, when he served on the Policy Planning Staff at the U.S. Department of State, at a moment when change in the world was shifting to hyper-speed. I benefited from Frank’s extraordinary intellectual and analytical contributions, and have continued to do so through his cutting-edge thinking on democratization and international political economy. Frank is one of a rare breed: a true public intellectual.

Yet there is one other sterling quality of both men: They are decent, considerate, and kind colleagues. Leaders of organizations, and of public debate, can be nice people, too. That is something better to learn at the beginning of your career than at the end.

A New Age of Globalization

This is a significant moment to be graduating – and to be taking on policy problems.

It is a time of challenge around the world: Debt. Jobs. Hunger and malnutrition. Health care costs. Climate. Energy security. Foreign policy challenges – Iran, Syria, Yemen, Afghanistan…and beyond. A changing international economic system – with implications for politics and security.

It is also a time of tremendous opportunity.

Take a step back for a moment and consider today’s global landscape: Developing countries – many of which were colonies during the last century – are now the engine driving the global economy. Over the past five years, they have accounted for around two thirds of global growth.

Today, China alone is consuming over 60 percent of the world's cement and iron ore; almost half the world's coal, lead, steel – and pigs; forty percent of the world’s eggs; almost a third of the world's soybeans.

Some of these figures may well decline as China is built, and China’s economy will need to shift to a different structure of growth. But India and others are still to follow.

For the decade before the financial crisis, economies in Sub-Saharan Africa were growing at about 5 percent a year. Today, most African countries have already recovered and returned to that rate. Africa, too, can become a future pole of growth in the world economy.

Today, developing countries – even as they remain home to billions of poor people – are looking to one another for ideas. Mexico’s and Brazil’s conditional cash transfer systems are revolutionizing thinking about public assistance through innovative safety net programs; Turkey’s economic success is providing an example for reformers in North Africa and the Middle East; India’s IT services offer inspiration for Ghana, Kenya, Nigeria, Tanzania and others.

Developing countries are increasingly sources of investment: In 2010, investment flows from developing countries reached around $210 billion – more than half of which went to other developing countries.

Here’s the point: We are moving into the next age of globalization – an age of multiple poles of growth; an age when emerging markets are increasingly important in all aspects of the global system: trade; commodities; currencies and exchange rates; finance; investment; knowledge; development; the environment; and security, too.

It’s a tectonic shift in the global landscape, and it’s happened roughly over the past ten years – a microsecond in historical terms.

Global business and investors are aware of these changes, and are racing to catch up.

But policymakers are still behind.

The Third World is an outdated concept. With the end of the Cold War and the demise of the Second World, at a minimum developing countries should have moved up a place! But the real point is that developing countries are not just some subsidiary category. They are not just dependencies – or charity cases. They are diverse. They are growing – economically and in influence. They want to be the stewards of their own futures. They want more voice in the global system, and the world needs them over time to assume more responsibilities within that system.

2012 is an incredibly exciting time to be entering the public policy world. A time of flux. A time when ideas – and action – can shape the future.

Increasingly, policymakers will need to break free of old constraints to connect the private sector to public policies.

All across the developing world, the World Bank is encountering a new pragmatism about involving the private sector in areas that used to be dominated by public monopolies: infrastructure; education; health care; skills training; delivery of public services. Advanced economies should be taking note, too.

Diplomacy needs to change as well. We need to develop effective ways to get the assistance of the private sector in shaping international public policy. Earlier this week, I attended the G-20 Summit in Mexico. The sessions for government leaders were preceded by a B-20, where business groups identified problems and solutions. APEC, created in 1989 just as the Cold War was ending, was perhaps the first new international body that incorporated business – and academia – in its design. The Rio+20 meeting going on in Brazil this week was a carnival of private and public sector activity. That is the challenge, too – to make this new diplomacy effective, to shift from divisive debates or stilted exchanges between the public and private sectors to inter-active problem-solving.

The Quantitative – and Qualitative

The world you’re entering needs your know-how – the analytical and practical skills to actualize solutions to the world’s problems.

The Pardee RAND Graduate School has provided you world-class training in quantitative skills. You are well versed in data analysis, game theory, decision matrices, and linear regression models.

This training offers an excellent foundation.

But what is really exciting about making public policy isn’t evaluating and analyzing and predicting.

It’s getting stuff done.

And if you really want to get stuff done outside the classroom, quantitative analysis needs to be to be complemented by qualitative analysis – the political, bureaucratic, behavioral, social, cultural, and ethical skills.

Today, I would like to share five lessons that may be the start of your post-grad experience.

First: History is Important.

I recently attended Harvard’s John F. Kennedy School of Public Policy for a faculty seminar. Henry Kissinger had also visited recently, and his observation about government was revealing. The two most useful disciplines for government service, Kissinger said, are history and philosophy. Neither is taught at the Kennedy School. Fortunately, one reason for my visit to Harvard was to discuss the teaching of “Applied History.”

History offers perspectives on problems. Two other Harvard professors, Richard Neustadt and Ernest May, called it Thinking in Time – the idea that when we consider current challenges we can draw on history – to assess today’s issues within the stream of events. History does not offer a cookbook of policy recipes. In fact, May and Neustadt warned that the use of historical analogies is fraught with pitfalls. And they observed that “Human experience also includes discontinuity, sudden, sharp, and hard to foresee, if foreseeable at all.”

Yet the Founding Fathers of the United States – who led one of the great discontinuous events of all time – drew on history actively. They looked to Plutarch’s Lives for studies of character. They studied the classical age for insights on republics and liberties. They designed a document – an unusual written Constitution – drawing on the experience of modern European history. A few of them wrote the Federalist Papers, a compendium of applied history, analysis, and advocacy to explain their new Constitution.

Thinking in time suggests questions to ask before one rushes to produce that favorite of policy-makers, the options paper. What is the history of the issue? How have other people tried to solve this or similar problems? What worked and what didn’t? What institutions have been involved – and what is their history? What people are involved – and what is their history? Rather than asking “what’s the problem?”, policymakers would do better to say, “Tell me the story.”

How can we understand ethnic conflict – from Kosovo to South Sudan – if we don’t know the story behind the fighting, sometimes going back hundreds of years?

How can we understand the challenges the Eurozone is facing today if we do not know the story of Germany and Europe? Or even the more recent history of Germany’s unification?

How can we understand China’s view of the world today and China’s place in it if we do not know how China tells its own story of humiliation and revival in the modern era?

Thucydides, an exiled former maker of policy, discussed the value of history this way: …those who want to understand clearly the events which happened in the past and which (human nature being what it is) will at some time or other and in much the same ways be repeated in the future.

That great student of humankind, Mark Twain, said it this way: “History may not repeat itself,” Twain said, “but sometimes it rhymes.”

Second: Look at the Whole Elephant.

There’s a well-known fable about several blind people who are asked to describe an elephant. One feels the leg and says, “an elephant is like a pillar.” Another holds onto the trunk, and say “it’s like a big snake.” Their descriptions are accurate – but limited.

To solve problems, one needs to consider multiple dimensions. When I consider a problem, it is now instinctive for me to think about the institutions involved, the authorizing environment, possible coalitions, likely opposition, implementation, legal issues, resource dimensions, communications – and how the problem fits into a stream of other issues. The whole elephant. Because if you look only at the foot, you are likely to miss the toothache that prompts the kick.

Let me offer an example. At the end of 2007 food prices surged around the world, and the stress was exacerbated by soaring fuel prices. Some of the economists at the World Bank said that returns from high commodity prices would allow most countries to offset the danger. Others suggested that the problem would be best handled by humanitarian agencies, not long-term development institutions.

They were looking at the problem through a wide-angle and long-term lens. They were missing what was right in front of our eyes: tens of millions of poor people with no cushion to soften the blow. Families going without meals. Farmers who couldn’t get the inputs they needed. Food riots breaking out.

We needed to disaggregate producers and consumers within countries. We needed to get people through the short-term to get to the long-term. We also needed to see – even as we were meeting immediate needs – how we could increase farm production and productivity in poorer countries so people could increase their earning power.

We reached out to civil society groups to build support, gain information, and assist partners in the field. Through these networks, we connected the agricultural, humanitarian food, and nutrition policy communities, which often go their separate ways.

We created a rapid financing facility to support basic inputs for farmers, especially small ones. Our funding was constricted, so we created a trust fund to mobilize other resources.

To help countries boost productivity and production, our public and private sector arms worked across the agricultural value chain – research, property rights, seeds, irrigation, fertilizer, storage, marketing – as well as fostering private sector development.

We put our financial expertise to work to help countries manage the risk of future crises – through weather derivatives, crop insurance, and access to futures markets.

This was a big elephant. To try to steer it, we had to see all of the beast.

Third: Don’t Just Analyze a Problem – Solve It.

At all the public places where I’ve worked, I have been able to learn from colleagues who are extremely skilled. They have studied the data, they know the research, sometimes they even wrote the book.

But textbook answers are not enough – one also needs to understand the political economy context. If the best textbook solution does not work for our client, we haven’t solved the problem.

Bringing the perspective of a problem-solver – not just an analyst – is also a good lesson for your relationships with bosses. George Marshall told his colleagues: “I don’t just want you fellows sitting around asking me what to do. I want you to tell me what to do.”

As the U.S. Trade Representative, I supervised and participated in many negotiations. The key to our completion of so many Free Trade Agreements was that we had a team that knew the objective was to consult, yes; analyze, yes; work with Congress, yes – but most of all – to close the deal. Decide.

If you put yourself into the shoes of the decision-maker – and ask yourself what would help that person, whether through preparation, decision, or follow-through – or ask yourself what would you decide – you are more likely to one day become the decision-maker yourself.

Ownership is also important in solving problems. Solutions are not just disconnected answers to problem sets. Ownership leads to legitimacy and effectiveness.

One of Afghanistan’s most successful development projects is the National Solidarity Program, or NSP, which the World Bank helped launch in 2003. The NSP created more than 20,000 elected Community Development Councils and empowered them with modest grants – whether to invest in micro-hydro generators, schools, roads, irrigation, erosion, or water supply projects.

I met with a women’s council in an Afghan village. They brought information, insights, and add-ons to the project we funded. Equally important, the women felt they could accomplish things. They discussed other problems. They supported one another. They started small businesses together, and others became customers.

So far, the NSP has reached more than 17 million Afghans in all 34 provinces, and has an economic rate of return of close to 20 percent. When the Taliban have attacked projects, villagers defend them. The Government of Afghanistan is now considering how to use the local Development Councils to help with the delivery of public services.

Fourth: Don’t Forget the Public in Public Policy.

After all, the policies we work on belong to the public.

Just as you are graduating at a time of enormous change, I was fortunate to be faced with enormous changes early in my career. In 1989, I worked for Secretary of State James Baker as the Cold War came to the end and served as the lead official in the “two plus four” negotiations for Germany’s unification.

U.S. policy toward German unification was based in part on a careful reading of the mood of the German public, East and West. Our diplomats in East Berlin had concluded that East Germans wanted a so-called “third way” between capitalism and communism. We sensed they were wrong. We realized that most East Germans wanted what their West German cousins already enjoyed.

This insight meant that West Germany was the one legitimate state in the eyes of most Germans. Unification would be a takeover by West Germany, not a merger. We also saw that the human momentum behind unification posed risks if the diplomatic process stalled. And speed could be an asset: the public momentum that drove unification kept its opponents off balance.

Yet public opinion was not only a matter for Germans. To agree to Germany’s unification within NATO, President Gorbachev had to come up with an explanation he could use at home. It was in the U.S. interest to help.

Executive branch officials – often backed by experts and studies – can get frustrated by legislators and their processes. But legislatures are the representatives of the public. One needs to listen to what these representatives say – and don’t say. The most effective executive branch officials try to help legislators develop explanations for the votes they are being asked to take.

The World Bank is making openness to the public into an asset and a tool. We instituted a far-reaching “Access to Information” policy modeled on the U.S. and Indian Freedom of Information Acts.

In 2010, the World Bank launched our Open Data, Open Knowledge, Open Solutions Initiative. We have placed all the World Bank Group’s data, project information, and knowledge online – in real time and for free. We have mapped all our projects so anyone with an Internet connection can now download our data, analyze it, and come up with their own development solutions. Our next step is to make the information interactive.

Our aim is to “democratize development” so that a network of publics can see what we are doing, add their information, and contribute to development solutions.

Fifth: Build in feedback loops.

I encourage my colleagues to anticipate. Think ahead to prepare for uncertainties.

Dwight Eisenhower pointed out that “plans were worthless, but planning is everything.” As Helmuth von Moltke, the German military strategist explained, “No battle plan survives first contact with the enemy.”

So it is with most policy planning. The planning process leads one to consider all dimensions of a problem, and how they interrelate. Successful public executives start with planning, but then need to continually seek intelligence, assess implementation, and make adjustments – all while avoiding loss of momentum or even paralysis. The information is never perfect.

Some of you may be familiar with the “OODA loop” – a concept first developed by a U.S. Air Force colonel and strategist. The OODA loop stands for “Observe, Orient, Decide, and Act” – and the idea is to tighten the loop as much as possible, so one continually reorients and acts more quickly. The concept was originally applied to combat operations – but I have found that it is useful in many situations.

An OODA loop is just a way to think about ongoing learning. Part of learning is being honest – with yourself and others.

The World Bank Group draws wonderful, committed, and intelligent people. But we have to safeguard against a special risk. Most of our staff have been high performers. Admitting failure is not natural. They are also deeply committed to helping those most in need. So when our staff has worked hard and long on a project to overcome poverty, it is hard to admit when things go wrong. It’s just human nature to say “it could have worked, it should have worked, I really wanted it to work.” We need to acknowledge when “it didn’t work.”

Of course, we prefer success. But if poverty were so easy to overcome, someone would have done it long ago. All of us make mistakes. The key is to acknowledge them, learn, and move on. The real sin is ignoring mistakes, or worse, seeking to hide them.

Conclusion

I have always considered public service to be the highest calling. So I am pleased you are pursuing careers in public policy. You have the opportunity to make history.

You were probably drawn to the Pardee RAND Graduate School because you wanted to serve. That involves great responsibility, a public trust. Respect the public you serve, even when you disagree.

A lot of public policy is about the art of the possible. Compromise is not necessarily a dirty word.

Ultimately, I hope you have a passion for getting stuff done. That’s the real challenge – beyond what you’ve read in books, written in papers, the numbers crunched, the theories devised and tested. Because in the end, it is about putting those technical skills to work to get things done.

Many public officials seem content to hold posts, be part of the flow of events, analyze and comment, attend the meetings.

Be a doer. Keep your eye on achieving results. On accomplishing things.

This is what’s exciting about your future careers.

You can make a difference.

All best wishes as you do so.

My RAND ?

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