Just as a quick disclaimer is a nonpartisan educational organization. The institute takes no position on any issues. The views expressed in this report are mine and mine alone. Im going to make some brief comments on the report. And we will invite our two distinguished discussants up to the stage. Then i will sit with them and will ask a few questions and we chat about this topic of dismantling the corruption nexus until about 4 pm. Then we will take questions from the audience. And we were dismissed promptly at 430. What is this all about . I am a political scientist. This means our study and explain how the political world works. Not my job to offer my opinion. It is my job to explain how things work. My work stems from actual personal frustration. Letting you know my opinion. I have been frustrated with being able to predict terrible outcomes in the worlds authoritative regime. Looking around and seeing terrible things that are going to happen. Then being frustrated by the fact that i am unable to do anything about. What are these things . It is involved in every single word. That are among the worst human rights abuses. Authoritative regime didnt end just as violently or suddenly as they began. They are generally horrific in how they deal with individual people and individual rights all around the world. In authoritarian regimes, corruption is a feature. Not a bug. All of this is terrible for markets anywhere. Especially in the long run. However, we have to recognize and know that authoritarian regimes around the world are sovereign states. They are not interconnected with our market and our politics in any number of ways that are quickly expanding. Changing and deepening. What this means is that it prevents our policymakers with a court challenge. How are you going to go about addressing authoritarian regimes and authoritative corruption without sacrificing our own value. Without harming our own interest as free societies. Or without harming our own capitalist market. How are we going to do this . We should not shy away from using our military and economic power to defend our friends and ourselves. This deepening and expanding means that these traditional methods of dealing with National Security threats such as military interventions and sanctions tend to treat these states as unitary isolated actors are going to become less and less successful over time. On the congress thought of that, liberal institutions such as the World Trade Organization or the United Nations that tend to depend upon the dreams are the hopes of people for better actions are going to continue to fall prey to the liberal actors around the world looking to influence them and bend them to the old will. Essentially what im saying, liberty needs a strategy. Democracy needs a strategy. The role of law needs a strategy. America especially needs a strategy for navigating the post war era of authoritative regime. To sum it up in a sentence, i was say we need to consolidate gains and liberty when it already exists. Lead by example. Consolidate games where they exist and lead by example. You may say, easier said than done. It really is pretty simple. What i have done is created a handy new concept. Can help explain why. The authoritative corruption exists is the growing convergence of illicit state and nonstate actors. Reinforcing the strength and survival. In other words, that is kind of a big definition. In other words, authoritative governments, they abuse their access to u. S. Markets to prolong their own home and gain strength. Terrorist groups use these exact same methods and avenues to support and gain strength. The nexus is where we need to focus. The problem is that it overlaps into free societies and free markets as well. In the report, what i did, i characterize modern great power competitions is not a clash of civilization but as a clash of governments system. This is freedom versus authoritative. Corruption however one wants to conceptualize it is first the method through which authoritatives around the world seeks to remain in office. A method the use remain in office. Second, it is the channel through which they infect free countries and free economies with greater amounts of corruption. To be clear about this, getting to the time. All authoritative regimes in my view are a form of autocracy. Questions all of our enemies and authoritative regimes. Not all authoritative regimes are enemies. We have a lot of regimes that we are friendly with. That is okay. That is no reason to simply turn a blind eye to the corruption that existed in those countries. We need some adjustment. Summary calibrations. The first aspect before i get into the policy, the first is that American Foreign policy in general needs to make a clear distinction between the people that suffer and the regimes and leaders that create those conditions for those people. In other words, china is not the enemy. The communist party is. Iran is not our enemy. The ayatollahs are. Russia and north korea are not our enemies. The regimes are. To better understand these threats, as i have said many times and nonviolent manner, domestically what we need to do is look in the mirror. We need to deal with the abuse of anonymous Shell Company formations in the United States. Second, i would say give the Financial Crimes Enforcement Network a clear mission. What are they doing in the world. What are they trying to do . Third, deal with the Money Laundering in a more systematic way in real estate. It is outlined in the report. Fourth, evaluate how the Global Network of Foreign Trade zones around the world work. There were some 3500 zones around the world that we do not know much about. We dont even have a similar definition for them in understanding how that works with all sorts of trade fraud and issues related to this. Fifth i would say reevaluate the role of the foreign agents registration act. Are going to the report as well. Finally give the private sector a greater role in anticorruption efforts worldwide. This could be done very simply by amending the foreign corrupt practices act. To punish the demand side of bribery. Looking internationally outside of the United States, what i think is we need to formalize the group of seven. The g7. The g7 should be made as a formalized institution only for established democracies. It is what it essentially is. It does not have a charter. In the charter, i think we need to provide a clear mechanism for ascension to the charter. To provide an attractive for other countries to reform. We also need to have a clear method for expulsion. It is something that other International Institutions like and receive problems with that across europe and other places. Leslie, i would say the Financial Action task force. Needs to find ways to refine the mutual recording. Also needs to step up to stop focusing on trade based Money Laundering. It is one of the least understood most pervasive worst elements of moneylaundering problems around the world that is right under our noses. In conclusion, i would say the role of law and democracy are roads with no set end point. I would say it is time to begin road improvements. That is how we win this round of great power competition. Thank you and now i would like to call my 2 was. I will tell you all a little bit about them and we will sit down and have a discussion. Consulting firm that uses the methods to address business problem. Is a member of the American Academy of arts and sciences. On the counselor preservation. The 2007 recipient of the prize. Among other honors, he is the author of 21 books including the spoils of war. And the conflicts that made our greatest present. The dictators handbook. Why bad behavior is almost good politics. The prediction years gained using the logic of brazen self interest. And my favorite, the logic of political survival. Is also author of more than 140 articles and major in newspapers. The new york times. The wall street journal. The independent financial times. It to our documentary about his political forecasting. Is a doctorate in political financing. Doctorate from the university of heidrick. He joins the International Republican institute as president. He leads the team of nearly 600 global experts. To motivate people to engage in the political process and got politicians and dormant officials to be responsive to citizens. Previously served as counselor and director of the program. Of the United States. Is served as a member of the u. S. Secretary of states policy planning staff. He has taught at georgetown university. Is also been a columnist for Foreign Policy and has served as an advisor to six president ial campaigns. Please join me in welcoming them. Welcome. How did you like my little speech. I have been told i can be a little evangelical. Apologies for that. I want to start basketball for you. You have had advance copies of the report and had a chance to look them over. Im curious from your own personal perspectives. We have two different perspectives on this. Wanted to see what you thought about it. That is extremely important questions. You started to talk this afternoon with a list of problematic types of people. I thought you left somebody off the list that is fundamental to addressing the issues. That is we the people. The leaders that we elect. Mindful of the dictators handbook. Is almost always good policy. Corruption is not an accident. It is not a consequence of bad people. What a bad institution. As you indicate. Unfortunately, as you also indicate, democratic governments exploit the opportunities that corruption provides. But rather to make deals with democrats. We give you money for for me. Give you a pass on corrupt activities. In exchange you will give us policy concessions. We have extracted. From egypt. In exchange for which we essentially pay the money. We want the pakistani government to pursue militants. We give the money to pursue. We face as the people in a very tough problem. We want those policies to be conceded to us. The governments in power need to pay off the cronies to stay in power. We give them the money to pay them off. We have a difficult decision to make in tackling corruption which is a disaster for the people in the countries that are most victimized by it. That is to also address how do we satisfy our constituents at home on important policy areas to do our bidding. That is my concern. I am in agreement with everything in the report. It is pretty precise. We do have to address why we the people are rewarding dictators. That is something we have been reluctant to do. I am here because i like to report a lot. There are a lot of people out there who understand that we are in a great power competition. They essentially think the solution to that is the budget. Of course that has to be part of it. They are using nonmilitary not kinetic instruments to corrupt and assault open society. You argued the corruption nexus. Where there are lots of checks and balances, overstate resources, you end up with gross abuses. All sorts of corrupt forms. One she is often your paper is that corruption in such a country does not stay in such a country. Corruption is essentially laundered of the country. Into the west. You argued that we havent in our capacity. It is in our warehouse to take on this issue of corrupt authoritative actors in great power forms are working actively to subvert and weaken our leadership in the world. The point out very compellingly that we talk about these separate strands of threats. As if they were separate things. Mass migration. Conflict that produces failed states. All sorts of pathologies. Competitors like russia and china. Human trafficking. All of these syndromes emanate from similar calls. It is governments that have been correct. This takes different forms in a country that is poor and weak. Thinking about the difference between libya and china. The blowback or the fallout is right to our shore. I really like the argument. The solution to dismembering the corruption nexus. The solution lies in Democratic Capitalism. Free people and free markets build together. Free People Living under represented institutions do not there pathologies are brought in ways that threaten america. Three People Living in well covered societies governed by role of all and federal institutions actually look after themselves quite well. All of the challenges to us emanate in cases where that is not true. You also argue that dependence on illicit Transnational Networks is the achilles heel. Of corrupt authoritative. They rely on international nonstate actors. To preserve the world and to launder money. To educate their children. Twopart resources offshore. Ultimately, in a century that will take technological information, democracies open society should still have a invented. A fundamental advantage. Our way of life is more attractive. We care about we the people. In ways that they do not. We need to seize on some of those advantages. Safeguard our societies. I want to respond to what she said. Keep this conversation going. To try to make it very clear that i do not think Democratic Capitalisms are perfect. There was one graph in their initials the individual observations of corruption. Is a terrible different thing to measure. Were talking about in a very abstract way. There is trade based Money Laundering. Transactional bribery. Grand corruption. There is also a star. I tried to make it clear that these types of elites. They will feel robbed and commit crimes. In order to get the public goods that they need to keep our exist in all countries. That is just a human trait. There artificially called and curated into a smaller group. And getting to what you said about us dropping off countries with for me. I see that and i have read all your research on that. I sort of think of it like peace in the middle east is a public good. If youre bribing that off, that fits into the model for how a large Winning Coalition regime or democracy works. I would assume as this carries on in the future and we saw some of these photos, there would be less means to do that. Maybe you can respond to this with the transparency stuff that you have worked on. Again making information more credible. Is that a way that we could possibly hold more capacity in weaker states to get more information out there . More transparency in government compels government. More publicity about the absence of transparency in many governments is also critical ingredient in educating for example the american public. On what the difficulty is are in some new places that we do with. So that they will then increase the priority that they have forcing federal governments overseas as opposed to concessions at home. I do think that is part of the recipe care. I think another part to your comments is the promotion of democracy. We have never been good at it. Sincere in my opinion about doing adequately. There much more to be compliant on policy questions with what we want in exchange for money. The fundamental problem in corruption which you learned to as they depend on very few people to keep them in power. If you depend on very few people to keep you in power, the easiest way to stay in power or the most efficient way to stay in power is to let those people feel and be corrupt as long as they are loyal to you. If we put more effort into making our commitments to dictators contingent on their meeting some benchmarks, you deliver more free press. You deliver more competitive system. We would do more for you. We are going to do more because you promised you would that. I guess we have to give you more. You have not fulfilled the promise. There is a strategic dissembling that goes on. Is very troubling. If years ago, i was just looking. At the time, Hillary Clinton spoke about how great it was that they were becoming a democracy. We love that. They have an incentive to access reformers for the first two years in power as similar where the money is. Within the first two years, there were more risk of being overthrown the democrats. After those first two years, the survival prospects were terrible. The survivor process of dictators were excellent. The first window is the opportunity to let them into the concert reforms that we were talking. Another just put out a new report. I wanted to ask you what that was all about. Is a summary of how that relates possibly to what i am talking about. That i wanted to ask you guys. What is going on. I said in my comments that the Chinese Communist party is the enemy. Meaning that they are the ones doing everything. I read a blog recently about billions of people out of poverty. That was the Chinese People that did that. The communist party just allow them to do it for themselves. The question is, what i worry about with china is domestic stability. When it collapsed in 1991, out of nowhere, some people predicted it. Did not harm us too much because we did not trade with them. That happens in china today, my worry is that that is a massive grip that we are totally unprepared for if there is domestic instability. We tend to treat it as a monolithic kind of last forever. We did the same thing with the ussr. I am curious what you guys fall on the china question. Just two quick points about china. Chinas developmental similar in scope. Just because theyre 1. 4 billion chinas. Is not singular in terms of trajectory. If you wanted to destroy a company, it is a great one to fall in. The rebuilt that economy was to begin open in the late 70s. Chinas experience was replicated in an earlier year by japan. China is the new asian tiger. It is displacing horrible economic and strategic balances. That is point number 1. There is a lot of talk which i love to pick up in the discussion about china having a superior model. Has created a middleclass. The Worlds Largest. Without political liberty. Hong kong were two weekends ago, 25 percent of the population was in the street. 2 million were protesting in mainland china. People are as rich as in germany and france. There were still postings protesting the infringement of their political expression. The argument that somehow being chinese which is somehow not by you democratic freedoms is untrue. We have seen taiwan. It does not by the tradeoff. More broadly on china in the world. America and europe remain the Worlds Largest foreign investment. With that said, there is a lot of chinese money rushing around different parts of asia. It is not. The concept. It is not led by the private sector. That is led by state owned enterprises. In some cases private Chinese Companies that are using state provided forms of finance to go out and expand. China is that his capacity at home. A lot of these deals that china is doing. In different parts of the world do have the effect. Whether intended or not of corrupting local politics. A lot of deals that are not transparent at all. Involves tradeoffs the countrys sovereignty. The people in the countries understood the politicians were trading away sovereign rights to import facility. Those people in that country may protest the form of chinese engagement. Youre seeing in reaction to this. In many parts of the world. Chinese money is not going away. It is a phenomenon in the world were living in. This report begins our engagement on this is to help countries build the political resiliency and have a strong Effective Institution so they can have healthy relationships with china. Accountability transparency. The politics often subdued. Forms of other engagements. Strong competitive politics as part of how they can protect their sovereignty. I think it is wonderful. I like your work. I like that you point out that there was a lot of hype. And other things. It is something for us to watch. The corruption aspect of it. It is the infecting corruption into other states. And retarding the growth and development. You have made a living off of predicting the future. Was that you think about the future of domestic stability in china. I did a book in 1996. Was a bestseller until july 2, 1997. No longer to be found. I think there is a significant probability that the chinese political system and the communist party will implode in about 15 years. China faces a fundamental problem. The resolve in a fundamentally bad way. The problem they face is that in order for the party to survive in the mid to late 70s, they need a new economic model. This is creating an interesting tension. You have a lot of wealthy people. Is actually in the northwest of the country. They are not demonstrating. They want to participate. How did they get to participate in the reform . The Chinese Government if they want them to be part of the economic miracle, they need to shift money to them. By taxing more heavily. To become wealthier. The government is in the world. The solution is political survival. That will put themselves ahead of the economy. 15 or so years. The longerterm effects. With regards to people who believe that the chinese have a better economic model. I like to make a very simple observation. It is the second largest economy in the world today. What is the second largest economy since 1819. It was china. What did chinas economy do the various forms. Dictatorships depend on wealth. Was the lack of the better time. Well Economic Policy booklet. You may get lucky. The produce very good economy. You may get unlucky. Produces the common. The difference is a performance between democracy and hypocrisy. It is the variation and the predictability. The kind of chug along. Dating back. Faster citizens. This is not a good model of economic development. This is a disastrous model. There is a lesson in my view. We could take. They have cracked down on the corruption of this political opponents. Not tracked on the corruption of his inner circle. He has no problem with his relatives. With at least as a starting place try to find our domestic constituents back down more seriously. On the corruption of governments that are in the event our adversaries. Are not helping us to be more secure. Are not helping us to be more prosperous. Go after those who create problems for our citizens. As a starting place. Is pretty badly behaved government. s assembly government. Is a pretty corrupt government. It is not doing anything to advance freedom in the world. We should be doing more to target the leaders and their cronies. His opponent. Is that sacrifice our values . It advances our values. We have no need to do business with those folks. We should do more than just Pay Lip Service to their problem. We should make life difficult for them. Russia is not our adversary. The pizza and government does. The north Korean People will love to be free and prosperous. Kim jongil is not a word about how well theyre doing. We should be tough on him. We should cut off his access to international banking. We should make it in the interest of others in powerful positions to ask themselves, are we going down the right path . This is where i came up with the nexus. We have been trying really hard for a long time to cut the scary off from banking access or from trading axis. We have been trying sanctions to have the runoff. What is happening, they find ways to connect. Child abuse trading with north korea. They are still moving goods all around the world. Theyre doing it by relying on these transnational criminal organizations. Are increasingly contracting with terrorist organizations. Using technology in new ways to get around it. In looking at it long enough, i have come to the conclusion that we have been trying to target them. When you talk about corruption, theres always this like squeezing a bag of sand. You try to clamp down on bad behavior. It just quizzes out all sorts of other directions. There for to fall back on this leadership idea that we should strengthen our position at home. Be more transparent at home and clear about what it is were doing. Need the rest of the world to compress down on this balloon of authoritative corruption. As Free Democratic capitalist states around the world. I think you layout an excellent strategy. For how to tackle this problem. There is also a bottomup strategy through which to tackle this problem. It is based on the fact that people everywhere hate . Take Political Office. That she does not have a lot to do with United States. People in iran hated. People in russia hated. Vitamin cs defenses real estate in russia. He has worked billions. 160 billion. We are having an american conversation. What america can do. Is also a conversation to be had about how we can support good people in all of the societies who are angry about it because it is there money. There living in these authoritative states. They are poor with the leaders are rich. One way is to decide whether taking Political Office make you rich. In these countries it does. The key to wealth is political power. What do we do about that. Like to say about the work. Working almost 90 countries around the world. Other leaders. To try to level the Playing Field. Or build a Democratic Practice. We think that is in the american interest. I would distinguish between close societies and open societies. Office very difficult to access and operate. Want to work with insiders to map the networks to figure out who is making money and how Political Office. One can empower investigative journalist even in these societies to the data digging. What is going on. Civic activist in these countries can shine a spotlight and organize around these abuses. For instance lucky has done in russia. To spotlight the clipped state of the patent regime. That is what happens in close societies. Competitive societies that is the transition. I think it is all about balancing executive tower. Having defective institutions. Were Political Parties can compete in politics based on ideas. We can better constrain self interested behavior. Politicians are running on a platform to deliver their citizens. While taking office for personal gain. To check executive power to prevent the worst forms of executive corruption. One can strengthen the legislator. The judiciary. The legislative branch and the Judicial Branch are going to be the most effective checks on abuse of executive Authority Just like they are in the United States. Three, will be investing in responsive local government. It is not about what politicians are doing in the capital. Really about that local government level. That is were citizens connect with governments most directly. That is were instilling a democratic culture in the citizens even if it is holding their city council accountable. For that little puny city budget. That is a way to address these issues in a bottomup way. Again, people in all of these countries care about these issues more than we do. Where living in a rigid society. Many people are not. Theyre looking for ways to organize. So that they can influence exactly the kind of things youre talking about. Let me take this opportunity to explain my take on this. I think youre doing the lords work. I think it is wonderful. Just keep complimenting you. Anyways, looking at how our democracy promotion. I have been thinking about this a lot. Looking at how it works. I want to ask you about the election side of it. In the political institution, it was only maybe less than 10 years ago that a book was written. As of the governments of legislators as well. We started doing that. There is a book on competitiveness and. I have been talking to people a lot. Every five years they hold an election. There is not the party competitions. That does not involve very important. This is the close societies we cannot get into. We want your building capacity in that is great. I am thinking about ways to reach in those other liens. To the close ones. Im thinking about the role that marcus democracy promotion. I think we have sort of moved away from that. In the whole area. I wanted to sort of get your take on what we should be doing. This is why i wanted to put in their triple iris budget. I went with him in the foreign to give the private sector a greater role in anticorruption blocked from participating in deeply authoritarian countries or they are not invited or are limited in how they can, the private sector or is there. Those are their markets. We are all integrated. If we can incentivize a greater role for the divided sector actually promoting greater parties free and fair elections, better clean governance, transparency measures, is that an avenue that could be explored or is it being explored . There is an obvious self interest for American Companies in operating in rule of law societies where Property Rights are protected, whether our dispute settlements in courts, where there is a commercial dispute. Companies, western, japanese, other democratic companies are taking an inordinate risk. There can be a high reward for high risk. Yes, there is a broad interest. We are having a washington conversation about good public policy, but if you were an investment lounge and you are a group of corporate titans, maybe some of you are, you would say look, you will make more money in an open society that is prosperous and democratic and has rule of law. You may make a lot of money in a very short time in a corrupt autocratic society, but at any time that government can come in and seize your assets or steal your intellectual Property Rights which is happened to literally trillions of American Business dollars. You are assuming inordinate political risk. My question for you is, will Companies Operating in more authoritarian regimes, actually put their Business Practices at risk, their shortterm profits at risk . That is a good question. Maybe has something to say about it . I do. Competitive legislatures are more competent than we have made them out. For many very large corporations doing business in countries, they would like open, free societies. It is also true that if they sacrifice business to try to promote open and free societies, they get squeezed out by chinese firms, other firms that dont care about that. It is a problematic dynamic because while in the long run it is clearly in their interest, every longrun decision is a set of small shortterm decisions. We keep our jobs or lose our jobs moment to moment, not in 10 years. We have to make all these short term decisions that we hope will be longterm. With regard to competitive legislatures it is a little bit complicated meeting may be. But it is in the interest of an autocratic dictator to have either factions within his or her one Political Party or to have competing parties. The reason it is in the dictators interest, you want the people who are helping to keep power to work hard for you. If there is nobody else who might get rewarded instead of them, then they will free ride. It is in the interest of the dictator to have factions or seeming competitors so they can say, you want the rewards or you want the rewards . Who is going to work harder . Bigamy also want to know who is against you. Yes, we can seize this in different societies. I did a study a number of years ago on why on aid to tanzania did not have more of an impact. Tanzania is a multiparty system in which one party, the ccm wins about 97, 90 something percent of the vote. But they preserve a competitive system. They are always judged to have free and fair elections. They are free and they are fair in the sense, we counted, people can vote for multiple candidates. But, they have structured the system so that the opposition is severely divided. The average constituency at least i did this study, had 10 Political Parties competing. You expect two parties because if you come in third, you get nothing. If youre coming in second, you get nothing. You have to end up. So, the third party has an interest in backing the second party to get something. But, the government has promoted this. It promoted 10 parties person, 10 parties per constituency. They got more people because they bandwagon. So, we have to look at not just whether there are competitive legislatures, but what the institutional structure is behind them. It is a much more subtle phenomenon than just the existence of multiple parties. Russia has multiple parties. I am not worried about vladimir burton not winning the next election. I am very confident that he will win. I am also confident that he has no doubt he says he is going to change the constitution first . The great moment of opportunity for converting an autocrat into a democrat, there are two opportunities. One opportunity is when that person is newly in office. So, they have a better chance of making it through the first couple years by emulating the democrats. We could lock them in by providing rewards where they are creating the things that left them into a democratic government. Free speech, freedom of assembly. It does not mean they will get kicked out by free elections . They may, jj rollings when he bankrupted ghana converted the company into a democratic society, ran and won. Because he was then doing a good job. That is a window that we dont exploit that we should. That two year window will open up. Fidel castro was very old, yes i know they have a new guy. He is decoration. We could make a real difference there. The other is, when a leader is believed to be very sick. When a leader is believed to be very sick, the leaders cronies can no longer count on the leader to keep paying them. You cant pay beyond the grave. When a leader is sick, they have a natural incentive to liberalize so they do not face revolution. We could step in at those moments. We monitor the health of leaders. We could help to turn those countries into a better direction. A less corrupt direction. And i add to the last, list of sickness, very old age because old age is a terminal illness. Has been forced out of power at age 95. Algeria . Yes, exactly. We have not exploited that opportunity to influence and transform the government to have genuinely competitive politics. We have sat on the sideline and simply watched. That is a terrible policy mistake. Man make a quick point about elections . We understand when a country has a fake election, we understand what it is all about. But, there is also an interesting phenomenon for the leader of a oneparty state gets overconfident. He lives in an information vacuum were all his courtiers tell them they are hugely popular. We have seen two examples of that within the past year. Actually more, just to give two examples, one is in malaysia which had a oneparty system for over six decades. There was a nexus, an authoritarian corruption nexus between the ruling party that ruled for over six decades and is nasa leads, etc. The former party had gerrymandered the system so that any election was bound to favorite. Somehow, an Opposition Coalition got together, worked very hard and won the election. One of the first acts of the new government was to actually freeze chinese infrastructure projects. They opened the books and found extraordinary forms of corrupt practices powered not just by china but also saudi arabia and other foreign actors. That is one example. Another example is the multis maldives. A dictator there who had won in an election and basically eviscerated Democratic Practice decided to hold an election last september. 90 of people voted and they voted him out. They voted him out resoundingly there was no way out. Others moved in to make sure he stepped down. Others within the armed forces to observe the election outcome. This new government, always very troubled, these new governments that take over and have to dig out of various corrupt dealings by their predecessors. The new government has a very different look. So, just two examples of where elections have consequences even in single party systems, the next one will be venezuela. Maduro knows that if they had anything like a free and open election, he and his cronies would be long gone. The fear of many observers is that maduro will be forced into an negotiation where his aunt is to hold an election but as long as he sits in power and holds the reins in the election, they will take the Playing Field and steal the election because he cannot afford to have a free election. In venezuela, i think the u. S. Government unofficial position as i deduce is that should venezuela announce a move toward elections to resolve this terrible stalemate that has produced more refugees in syria, more refugees than in syria without a war. They will need someone to oversee the election so that it actually reflected the will of the people because otherwise crooks will steal the election. I wrote about that with untangling venezuelas authoritarian web. We have the cover of the report that is actually taken from the hyperinflation that comes out of the corruption of authoritarian rule. We are going to begin transitioning to questions from the audience. I have two general questions. Make sure you formulate your statement in the form of a question and make it brief and be prepared to state your name. Before we do that, lets get the microphones ready. I want to ask the two panelists two more brief questions. I make the claim that ideology is not as important today than it, as it was during the cold war. We do not have these big fights. Authoritarianisms are very dispersed and not connected. Do you agree with that or how would you each approach that . I partially agree with it. If i may borrow from karl marx, ideology is the opiate of the masses. I dont think ideology was important in the soviet period. I think it was decoration to give people an organizing principle. What was important was coming to power and being in power however you could. That was true when xerxes was around and that was true today and everywhere in between. So, i think it is not important today and was never important. You say it is not an ideological contest, it is a contest of systems. It is not driven primarily by governments. Right. So, yes, i accept that. There is a contest of symptoms, systems. I think americans have gotten used to the idea of a contest of systems because unless you were coming of age and very engaged during the cold war, you have lived through a 30 year period in which essentially there has not been a contest of systems, right . We are back to that. I still think we hold inordinate advantages living in the free world. We know where people, where hightech talent wants to immigrate to. They do not want to move to russia or iran. We know that the greatest source of ingenuity that are unleashed happen in a free and open society. But authoritarian leaders corrupt. Competitors are waging their own campaign. It is very interesting because used to have these debates do these leaders actually realize, do they think they are competing . Do they think there is a contest of systems . Just in the last few years they have said exactly that. Even if americans want to have an objective value neutral conversation about geopolitics and great power competition, the leaders of russia and china are actually positing a contest of systems think democracy is in decay. It does not perform, and under delivers, it is demagogic, it is populist, whatever you will. They are making a claim that their systems in different ways are superior. Lets test that proposition. I think is standing up to it will make it, but that leads perfectly into my second question which has to do with the democratic decline, authoritarian resurgence narrative that is going on. I have written a few things going on looking at the data and how this comes together and whether if democracy is really in decline around the world or authoritarianism is reallys, really resurgent, i tend to be skeptical just from the view that i look at, that part of writing this report came out of my concern that a lot of salt, scholars that i look up to, historians, people of great prominence, are very worried about democracy around the world and very concerned about it. That concerns me that they are concerned. Part of writing this report was to sort of give a little back to the faith in Democratic Capitalism and how freedom and free markets work so that we can sort of change that narrative. I am curious what you think about where democracy is, is it in a death spiral or are we on the way back, how do you view this . It is not a death spiral, it has been a setback. It will oscillate back and forth. There something simple to understand that tells us about that cycle. That is, the difference in the institutional interest of leaders, ordinary citizens and the disenfranchised and they cronies who keep a leader or a coalition who keeps the leader in power. The interest of leaders is to have as autocratic a government that depends on as few people as possible. Those of the leaders who survive in power the longest. They can enrich themselves the most. It is great to be a dictator if you are the dictator. For citizens, their interests are best served by democratic governments that depend on a lot of people. Then, it is too expensive to bribe people. For the members of the Winning Coalition so to speak, the people or leader needs to keep them in power. Theres are the interests that will dictate that oscillation. Their interests look like the nike swoosh. You have a Small Coalition here and a Big Coalition there. Their welfare is high when the coalition is small. It drops as the Coalition Gets bigger. As the Coalition Continues to get bigger, it rises and it passes this high point. Inside this bowl, you have revolutions, coups, you have instability, you have poverty and misery. If you cross this line, you cannot improve the welfare of your insiders except by becoming more accountable, more transparent and have a more democratic government. Inside here, you can. When there is a coup, for example, coup makers like to increase the ratio of how many the leader needs to keep them in power. You need to disenfranchise people or enfranchise a lot of people and then need a lot and move this way. When they move this way you get liberalization. You eventually get democratization. Oscillation does not end always in democracy but it certainly does not end always in autocracy. It leans in favor of democracy. Good point. So a couple quick pieces to this. One is that people power is in motion in the world. In hong kong, venezuela, sudan, algeria, you have seen this flourishing of democratic activism despite the socalled democratic. People are voting with their feet including in the arab world for Democratic Political opening and political change. Whatever we in our western malays are talking about, they are not really listening. They want greater rights and dignity and opportunity. That is one part of the answer. Two, i actually think dictators live in great fear and insecurity. So, maduro has cuban bodyguards. He does not trust venezuelans to protect his personal security in his own country. Think about it for a minute. He has foreign bodyguards. What does that say about him, right . China, today, has more people working in the internal Security Service than they do in their entire armed forces. China has the biggest armed forces in the world by number but more people in the Chinese Military than any other country but there are more people in the military protecting the regime from its own public, right . I could go on and on with these sort of examples. It is worth reminding ourselves, we say congress is not exercising its function, or europe is looking messy these days, but there are different variations of good and bad politics. Okay, that is a great point on the people power. We will take a question here. We will go to you second. Right here in the blue shirt. Please state your name and the question. Hello, i am chris, i am currently a policy analyst contracting for the dod. A decade ago i gained plenty of firsthand knowledge about cargo vessels just in how the chinese dictators abuse our open market system. I also got familiar with the fen phen aspect. I question is primarily directed toward daniel but i also welcome any discussion from the others as well. Daisha the achilles heel for authoritarian regimes going back to china, how big of a role did the socalled triad gangs and the snakeheads play in propping up the ccp and what more can we do to crackdown on to them and stomp them with the proverbial achilles heel, so to speak. Thank you. To take another one . Want to take a couple . Lets take a couple. What is your name and where youre from . I am an economics student at dartmouth. Thank you for being here. Doctor twinning, i read your opinion piece on the Washington Post about russias meddling. And, democratic assistance groups. In the time that we live in with more and sentiments about possible retreat of the u. S. From germany and realization that our foreign aid might not be as effective or development aid, what do you see radley speaking as the role of the u. S. Government and different institutions in protecting democracy or addressing problems in the world when we say them. Is it moral dimension or political strategy . Thank you, a question over here . This gentleman right here with the blue shirt. Getting all the questions. Hello, thank you. I am a law student at Liberty School of law. The u. S. Has many are narrative today my we talked about russia and china, but many of our strategic allies such as Saudia Arabia and to a growing extent, india, how do we utilize targeted sanctions against individuals who may be part of strategic allies to the United States . Shall we start answering . I do not know a whole lot about organized crime in china. It seems to me that when we think about really malevolent chinese export now, the danger is this controlled society that has been built. This hightech controlled society in china that has been built using these tools of surveillance that the chinese are now exporting to other autocracies to really help control their own citizens. Not just other autocracies, i am told that lowgrade serbia now has Something Like 1000 chinese cameras in its central areas to do quite, quote unquote crime prevention. Of course, those things could be used for other purposes, as well. Personally i worry a little less about private Illicit Activity in china than we do about the strength of the Chinese State that allows these extraordinary forms of social control better than exported to other countries. On the u. S. Role in supporting democracy in the world and the Development Budget, my predecessor is now running. Marcus green. He is in charge of this extraordinarily, extra ordinary budget development. My impressions is that i am not sure we are spending our Development Budget which is a tiny, tiny fraction of the broader, it is very tiny, but it is meaningful in the world, that we are spending it and all the right ways. I think the way you make the case of the American People about the Development Budget and supporting democracy and other good causes is that they, a, it is the right thing to do. We have founding principles in our country and we want to help others enjoy the same rights and freedoms as we got help from abroad when we established our own constitutional republic. That is one. Two, it is much less expensive, much cheaper to help build decent societies than it is to try to inoculate ourselves against the violent spillover when those societies go haywire. To give an example we have not talked about much, Central America today, we are having a great debate. We do have an immigration crisis. We have a whole lot of people coming out of broken gangster societies. In central and south america including venezuela. Flocking to our shores and were having a debate about preventative measures to protect the border, in fact i would argue, addressing the of the source through rule of law and Human Security would be much more costeffective. This is one of the things i brought up in the report. They are called free trade zones in Central America. This is ideal with a lot of stuff and criminal organizations as well. These people have jobs doing legal things. They are not going to immigrate or committing crimes. Furthermore, with the chinese, i think making it with the governments own interest to take care of it themselves. With china you can look at fentanyl. It is representative, responsible for 76,000 u. S. Deaths. It was mailed through the ups system, there are gangs making money. It is all about the profit motive. If youre concerned about gangs and what they are doing, it is about the profit motive. Same with immigrants, same with development, they are seeking, theyre just like all of us. They want to make a profit but some people are more risk acceptance and intend to do criminal activities. You give them an opportunity to do what they want to do for a legal dollar, they will do it. I want to go back to the foreign aid. I really dont want us to lose sight of how much our political interests dictate how poorly foreign aid money is used if we are interested in promoting democracy. It is true that foreign aid is a tiny amount of money. But, when you consider that most foreign aid goes to dictators and not to benefit the people in their countries we have to understand that it is a tremendous amount of money when it is going to a small group of people in each of the recipient countries. It is being divided over a very small pool. I hope i am remembering the statistic correctly. I believe it is the case. A 1 increase over average per capita foreign aid increases the survival prospect of an autocrat by 32 per year. That is, they have a one third better chance of being in Office Next Year than they would have had without that small increment over average foreign aid. That is what foreign aid is buying. They are giving us policies we want in exchange for that money. It is not so easy to translate foreign aid into a democracy promotion tool. The sad reality is that if you ask the question, four questions, who gives aid, how much do they give and how much do they get . The answer is it is an equilibrium. It is not the case that we and other European Countries are giving foreign aid to dictators not realizing that they are going to steal the money. We understand that they are going to steal the money. That is the implicit deal. You get the money, we get the policies. The policies that we want. If we ignore that, we are going to be in the Wishful Thinking world and get it wrong. I have thought about this a whole lot. I proposed before that one way to do this is to get measurable results. There is conditionality but there are political obstacles. I proposed that you could spend that money on National Statistics offices in countries in order to get better information that then you could measure and would tend to have. Many years ago we had the millennium challenge grant. The millennium challenge grant was designed to reward countries that have better human rights and better democratic governance principles. For the first several years of the millennium challenge grant, we spent Something Like 3 of it because in the state department, those charged with this problem they could not agree unquantified standards for measuring human rights and governance because it meant denying money to governments that were doing things we wanted. It wasnt that they didnt know how to do it, it is not because there are not measures out there in the literature, it is because it ran into exactly this. We will have another panel on that very soon. Getting to what you do, i will call for more questions in a second, but for using sanctions , of course with friendly authoritarian states, that is always going to be a diplomatic challenge and a problem. With authoritarian ones, it should not be that big of a problem. Iran, for example but a skyscraper in downtown new york. It took the doj Something Like 78 years to investigate and find out who owned it to go through it. Because of these Shell Companies. That is why i come back to the anonymity of Shell Companies and dealing with transparency. There should be a way for when we do make the bold step of sanctioning a human rights abuser, especially one that is an adversary that might threaten National Security, we should have a way to find out what it is that they own. There is a Government Accountability report from 2017 where they went and found over 1000 highsecurity leases and we could not figure out who owned them. The implication out of that is that the gsa is renting fbi and hsa buildings to agencies that are investigating china or russia that might be owned by people in china or russia but we dont know. That is sort of a problem, i would think. If i could just, since the two countries you gave as examples were saudi arabia and india, and another wifi was an , lumping those two together seems to be wholly inappropriate india has one of the worlds better human rights records. India is not an autocratic state. It is a competitive democracy. It has been a competitive democracy at least since 1967 when the Congress Party faced its first real threats to power. One could argue it was a Democratic Party much earlier from its beginning. You may not like some of the policies that the Indian Government adopts and this goes exactly to the point i am making with regards to aids and bribing dictators. One of the reasons that democratic countries, despite their rhetoric in fact in their behavior seem reluctant to promote democracy is that the people in another country may elect a government whose policies people here or in britain or france or wherever dont like. The nature of democracy is that the people who get elected in the democracy must do what their constituents want, not what our constituents want. When we give aid to democracies, we have to give them more money to get smaller policies. They have to charge more so that they can reward their constituents in other ways. So, saudi arabia is an entirely different picture from india. They do not have a good human rights record. They do not have a competitive government. Saudi arabia is doing with the king and royal family want. The Indian Government is doing what their voters want. That may not be what we want, but it is what their voters want. We have time for a few more questions. I run a development from focused on u. S. Id with our main client being the opposite of transition initiatives. Within the usaid development and within the state department and drl and other organizations which are focused on helping transition to democracy, how are we doing as these organizations have come a long way, particularly oti which was founded in the mid90s to help Eastern European governments move from autocracy to democracy and they arguably had a great influence on the democracy wave which occurred. That is the question. I just that is a comment, i read your book, i loved it and read both of them. The chapter that i reflected on which i felt was the weakest was the chapter on the influence of foreign aid because i think it broadens the category of foreign aid such that the correlation is very difficult to tell. We will have another panel on that one, also. Become the question goes back to the policy changes that we have made as a government instituting assistance programs to assist with transition, how are we doing and how can we improve . Let me observe with regard to the book that they were technical papers for all the evidence, the evidence is very sharp. I think usaid is a Great Organization. I spoke there a few years ago about this being a Great Organization with great people who are really well intentioned. I will are you doing . Soso. Why is that . There are several reasons. You will know better than i do. The department of defense often will raise the concerns, security when you want to do something that they dont like. More importantly, very few governments are transformed through aid or through any sort of foreign diplomatic or economic effort. Governments are transformed overwhelmingly into democracies from within, not from outside. So, you can help, be, but you are never going to have a huge impact. We see as you have mentioned, the world has backslid on democracy. Your efforts have not backslid. Leaders like dictatorships. So, finding a way to get the peoples will to dominate is very tough without them doing it themselves. One more question here. And we will take one in the back, the red tie. Hello, my name is daniel demartino. I am from venezuela. I have a vested interest in this, right . A big reason authoritarian governments survive is because of the help of other authoritarian governments. I completely agree with the report. With all your recommendations, but how can democracies stop corporations between state actors, not just private actors. There other things in uganda, things like that. I am sorry to hear we have 15 seconds to answer this. Who wants to take it . I wanted to followup that you actually preempted me on your point about the limited value or the limited role of foreign assistance. The world has changed so much. I are has been in business for 35 years. Certainly after the fall of the wall in 1989, the Playing Field was open for the west broadly to go in and try to help them critic societies, often new ones, stand on their own two feet. Then there was a big debate in the west about should we engage, should we intervene met or should we not . That world is gone. Everywhere i go in the world, i bump into russian interests, chinese interests, iranian interests, turkish interests, saudi interest and indian interests, right . That includes, that includes Africa Latin America you mentioned russia and venezuela. By one count, the number of countries intervening in venezuela, america is not on that list. Countries that are actively intervening include cuba, russia, china, iran. I think this conversation about how we use foreign assistance, how we are strategic, it needs to reflect that all these actors who have very different and, interests are actively engaged. If we dont, theres a question about how we intervene in the civilian since not the military since. But if we say we are going to stay home and let those societies solve their own problems, the russians and the chinese and the iranians might not let them solve their own problems. It is a different landscaped. I did a paper a few years ago on competitive aid getting, giving or theres more than one donor. It is exactly this problem. The short story of that is, there are two consequences when you have competitors for the outcomes you want. You pay a higher price to get a lesser outcome. In the case of venezuela, in my view, too much focus has been placed on trying to raise a revolution which is very risky and very difficult. What is needed in venezuela and my view is for the military leaders to conclude that they are better off not backing maduro than they are backing him. To me, the likely outcome and venezuela, if the cards are played right is, either a coup and as i said, when you have a coup, you can move and more likely tilt in the democratic direction. Or, for them to back the revolution. As long as they are getting paid, potentially by the russians, the cubans, that is not going to happen. So, we have to find a way to find a significant component of the general staff that understands that their future is brighter without maduro. We have not been doing that. We are out of time, everybody. Please join me in thanking our guests. Thank you to ai. Everybody be safe. There has been discussion about an appearance before congress. Any testimony from this office would not go beyond our report. It contains our findings and analysis and the reasons for the decisions we made. Which is those words carefully and the work speaks for itself. The report is my testimony. I would not provide information beyond that which has already been made public in any appearance before congress. Former special Counsel Robert Mueller is said to appear before two committees of congress. At 9 am eastern he gives testimony to the house judiciary committee. Later in the day he will take questions from the house intelligence community. Both are open sessions. Our coverage of the testimony will be live on cspan 3, online at cspan. Org listen with the radio at. On tuesday, the head of u. S. Southern command testifies on the National Defense strategy in central and south america. That is live at 3 pm eastern on cspan 3. Our live coverage starts at 10 am eastern on c span3, online on cspan. Org or listen free on the cspan radio app. Andrew jackson drops from 13th to 18th place. Dwight eisenhower rises from the ninth to the fifth spot. Word is your favorite president rank . And that and more about the lives and leadership skills of 44 chief executives in c spans the president s. What is available wherever books are sold or at c span. Org the president s. Transportation secretary elaine chao and others discussed infrastructure at an event hosted by the Heritage Foundation and the washington