Observations from the Roundtable: Stability in an Emerging World

Tuesday, May 14, 2019
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The world’s population is being reordered. From 2020 to 2060, the working-age populations (15-64) of Europe, South Korea, and Japan are projected to shrink by over 140 million people, and, come 2060, Germany and Japan will have more people over the age of 70 than under the age of 20. The U.S. working-age population will also likely grow in that period, but as the U.S. Census Bureau has observed, the growth will be driven primarily by immigration. At the same time, sub-Saharan Africa’s working-age population will increase by nearly one billion. That region plus nine countries—India, Pakistan, Egypt, Iraq, the Philippines, Afghanistan, Guatemala, and Honduras—will account for the vast majority of the world’s new working-age men and women, over 1.4 billion in total.

This startling dichotomy is the product of what Jack Goldstone and Larry Diamond describe as “twin demographic challenges:” a demographic implosion in the advanced industrial democracies due to persistently low fertility rates and a demographic explosion in some developing regions due to persistently high fertility. So the developed democracies, for the most part, have aging populations and shrinking workforces, while those of sub-Saharan Africa and the developing nations listed above have rapidly expanding youth and working-age populations. In other words, the balance of the world’s population is shifting south, and the bulk of the world’s new babies will be born into countries of which many have weak governing institutions—as we explored in previous volumes, sub-Saharan Africa, parts of the Middle East, and the Northern Triangle of Central America suffer from poor governance—and are disproportionately affected by a deteriorating climate. The sources and implications of this “toxic brew,” as Goldstone and Diamond call it, are myriad and analyzed in detail in their paper. In lieu of reciting their work, which we recommend in the strongest terms, let us focus on a few salient issues and chiefly on their implications for U.S. policy.

What will happen to the advanced democracies as they age? With fewer young people and an older workforce, they will see shortfalls in the labor force, particularly blue-collar work; an unbalanced population, with more elderly and fewer working-age people to support them; and productivity deceleration, as the productivity of workers plateaus as they get into middle age. We should aim for new technologies to catalyze the productivity growth needed to mitigate against the lost workers, but as we learned in our discussion of the future of the U.S. economy, most tasks still require humans. So developed democracies will also have to lean on immigration to sustain their workforces.

Fortunately, there will likely be many migrants looking for new homes. Unfortunately, the outlook is not so simple. Migrant flows likely will be unsteady, more boom and bust than steady stream, and, as Jack Goldstone has described it, immigration flows are like river basin flows, both floods and droughts can be ruinous.

Why do we predict floods of people into the advanced democracies? Because governance is poor and, in some cases, getting worse in the regions that will experience a population explosion. International assessments of governance quality show negative trends for political rights, civil liberties, and the rule of law in sub-Saharan Africa. The Middle East and North Africa have even worse governance, with particularly predatory governments in Egypt, Syria, and elsewhere. Central America's Northern Triangle—comprised of Guatemala, El Salvador, and Honduras—lacks almost any rule of law, has stunningly low per capita income and government revenues, and is wracked by violence. Moreover, in each of these regions, fertility remains high; good governance can create the conditions that reduce fertility—such as better education, particularly for women and girls, employment opportunities, and child and health care—but weak governments rarely do. Add climate change, with the attendant extreme weather events and oscillations and rising sea-levels, and we have Goldstone and Diamond’s “toxic brew.”

Bad governance encourages people to emigrate in search of opportunity and increases the likelihood of conflict or civil war, which generate refugee crises. The Western world saw the results of such crises in the past decade. The surge of migrants to the United States from Central America overwhelmed our unprepared immigration system, while Europe was disrupted by the Syrian refugee crisis triggered by state failure, climate change, and conflict. The political and social costs of these experiences are evident today; waves of anti-immigration sentiment tend to succeed waves of unmanaged immigration. And we can reasonably expect to face more similar crises.

It is, therefore, in the direct interest of advanced democracies to help improve the quality of governance, reduce fertility, create economic opportunity, and handle the effects of climate change in these developing regions. Of course, governance, fertility, and economic opportunity are intertwined. It is hard for countries to generate sustained economic growth and widespread opportunity when burdened with poor, particularly predatory, governance. It is also necessary to improve access to and the quality of education, especially for girls, and economic opportunities, especially for women, as well as health and child care, family planning services, and the like. As Jack Goldstone showed in a previous contribution to our project, improving secondary education for women in sub-Saharan Africa is the crucial factor to reducing fertility there. The example of Bangladesh shows that by taking a few key steps, governance can be “good enough” to quickly and dramatically lower fertility.

The advanced democracies should endeavor to increase the “supply” of good governance through the carrot of foreign aid and assistance and the stick of international pressure. They should also encourage in-country, bottom-up “demand” for good governance, which will be critical to the establishment of long-term stability and growth. To address the supply side, they can focus on improving the rule of law through assistance in combatting crime, promoting transparency and counter-corruption efforts, and supporting political reforms. The United States, for example, could reduce violence in Central America by abandoning its misguided “war on drugs” and developing a better, more demand-oriented drug control policy. Developed states could also support non-governmental organizations and indigenous civil society, encouraging the kind of home-grown demand for more opportunities and better governance that would form the foundation of long-term growth.

During the roundtable discussion, participants noted that younger populations tend to be eager to mobilize and engage in political activism, leading to heightened political tensions and greater instability, but a country’s population tends to grow more stable and deliberative—and more democratic—as they age. So history would suggest that if the developing states with rapidly growing populations can lower their fertility rates and increase the median age of their societies, they will move in the right direction. There are, however, notable exceptions to that rule, including China. The People’s Republic of China has a median age over 35 and is headed towards being a fully “developed” state, but, defying the trend, it remains autocratic. It has progressed through the cycle of reducing fertility and capitalizing on the demographic dividend, and now faces demographic challenges similar to or even worse than those of the advanced democracies.

We can take a few lessons from the example of China. Even before the introduction of the one-child policy, its fertility rate declined sharply from over six births per woman to under three in just over a decade. However, with the harsh one-child policy, China created a ticking demographic timebomb. Gender selection led to a severe imbalance of boys over girls. Families shrunk, creating increased burdens on non-family means of support for the elderly. And the working-age population is now shrinking. So we should be careful what we wish for when talk about fertility reductions, but we can also take comfort in knowing that as an immigrant-friendly nation, the United States has the means to ameliorate its own demographic realities, a privilege China does not enjoy. Finally, China’s remarkable progression reminds us that societies will not inevitably follow the U.S. lead as they age and develop. Despite its self-inflicted ills, China is a compelling counterexample to the United States for young countries given its undeniable progress in bringing millions out of poverty, and the Chinese government is advertising itself as such. And in so doing, it makes a compelling case for the United States and advanced democracies to seize the initiative.

While looking abroad, the wealthy democracies must also put their own houses in order. They will face ever-larger surges of people seeking opportunity or refuge inside their borders. They must, of course, control their own borders—such is the right and the responsibility of a sovereign state—but they also should recognize that, as their workforces shrink, they need immigration to sustain their economies and support the elderly. And they often have a moral responsibility to absorb deserving refugees and asylum seekers. As we have learned in recent years, leaders will have to balance the social and political costs with the benefits of immigration, and they should establish policies to welcome, absorb, and manage migration in a more orderly and valuable way. Disorder breeds distrust in immigration, and distrust leads to instability.

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We find ourselves at an inflection point, in need of good governance. Yet good governance is in short supply these days. The United States and its European partners, whose leadership shaped the second half of the 20th century, have seen their institutions come under attack or atrophied. Some democracies, as our colleague Mo Fiorina writes in this volume, are struggling to adapt to early demographic and technological changes. Meanwhile, authoritarian systems are strengthening their grips on society and increasing in number, with China, in particular, looking to these technologies to rearrange society and help the CCP implement a modern authoritarian state. And as we've described above, many developing countries have failed to establish stable, effective institutions. Stability everywhere seems precarious.

Against this backdrop, the United States should work with like-minded advanced democracies to address the preeminent challenges of the emerging world. Indeed, the United States enjoys an almost unique position. Unlike the vast majority of developed countries, we are projected to experience population growth in the coming years, thanks to both (so far) moderate fertility rates and immigration. As a nation of immigrants, we have a firm foundation to build on, an ability to welcome, absorb, and assimilate peoples from all over the world, and a common civil creed around which to unite a diverse society. We can set the example for those countries less experienced in taking in and governing over diversity.

The United States also possesses unmatched economic capacity and political authority. We remain the preeminent economic and military, and we enjoy the general support of the other advanced democracies. That coalition of the willing, led by the United States, would have the capacity to balance against authoritarian influence, motivate international engagement, and rally the world’s wealthiest states around the common concerns outlined above. And the United States, in many ways still among the leaders in addressing climate change through its market- and regulatory-driven pursuit of natural gas, efficiency gains, advanced technology development, and its laboratories of climate policy in the states, can lead on that account as well, as discussed in our previous volume on health and the environment.

Of course, the United States has its own internal drivers of instability and discontent, recounted in the papers by our colleagues Mo Fiorina, Alice Hill, and Charlie Hill. It is no secret that trust in and satisfaction with government has waned, and that democracies struggle to adapt to demographic and technological change. The costs of that democratic distemper, as Mo Fiorina calls it, include civil disorder, the breakdown of social discipline, the debility of elected leaders, the alienation of citizens, and the loss of trust in nearly all institutions of civic and political life, aside from the military. But we have seen this movie before, and it was far more violent; as Mo writes, the era of “1970s”—beginning with the late 1960s—saw a crisis of democracy in both the United States and abroad, notably in the United Kingdom. Then, as now, the crisis was driven in large part by the sense that government had failed—engaging in misbegotten foreign wars and presiding over weak economies—as well as by social and technological phenomena—migration and the ubiquity of media sound bites, for example. In some ways, he writes, the crises of both the 1970s and today reflect the fundamental truth that democratic systems articulate interests well but aggregate them poorly. However, the distemper of the 1970s gave way to a generation of prosperity and strength. And it did so largely because electorates chose leaders who committed themselves to solving hard problems and earned long-lasting, stable majorities as a result.

What made those leaders successful? From where we saw it, they trusted in the proven success of classical, orthodox policies. The Reagan administration committed to peace through strength and responded to the stagflation of the 70s with sound monetary policy to get the money supply under control, weathering short-term political backlash in doing so. They prioritized their political capital in remarkably effective ways. Despite a challenging world, they resisted the reactionary impulse and pursued sound policies that worked. We can learn from that example. New problems—shifting demographics and new technologies—demand firm responses but not necessarily new ones, and when confronted with the threat of global instability, the leadership of the United States is indispensable.

The emerging problem of climate change and its severe environmental effects is emblematic of the sort of new problems governments must identify and respond to, ones that cut across conventional governance authorities. We have pursued the implications for public health previously, and Alice Hill’s contribution to this volume explains how portions of U.S. infrastructure in particular are inadequate in the face of new dimensions on the old problem of weather. Extreme weather events, such as superstorm Sandy in 2012, are increasing in intensity and frequency; the number of “billion-dollar events” has increased, as have federal disaster appropriations. That trend will continue because we lack resiliency in our built environment. A richer American populace builds in more marginal or threatened areas. But building codes do not account for future climate risks. And we lack common planning for future events, which is problematic considering weather does not respect jurisdictional boundaries.

The solutions to the problem of resiliency are straightforward and informed by past experience, if sometimes unpleasant. Alice Hill provides a detailed blueprint, which includes reflecting the true risk of flooding in National Flood Insurance Program rates; stopping building and rebuilding in high-risk areas—a practice that can itself exacerbate the effects of climate change; and changing building codes to reflect the higher risk to infrastructure from extreme weather events. All of her recommendations highlight the enduring challenge governance in a time of transition, but they particularly emphasize the role of state and local governments, which tend to be more adaptive. The federal government can provide broad incentives to change codes and encourage people to move out of high-risk areas, but ultimately jurisdictions must coordinate, adapt, and prepare themselves based upon local buy-in and in light of local conditions. Put another way, even with an accelerating and irreversible challenge such as climate change, the U.S. federalist model and its agile, adaptive sub-national entities will be crucial to the enduring stability and health of the nation.

Finally, we will not presume to summarize Charlie Hill, but we echo his call for a national renewal of education. This is a time of rapid technological change, but the humanities—the study of the human experience—remains an indispensable teacher. We can learn how to take on new and complex problems from the study of the past, and we can help restore our democracy through the study of our founding principles, the common creeds that have bound a diverse society together.

The future described above is already appearing, and it will affect the United States, Europe, and all other developed states. Simply put, it is in our immediate economic and security interest to prepare for and manage the emerging world as best we can. To help developing regions reduce fertility, generate economic opportunities, reduce violence, and establish stable, secure governments that protect the rule of law and individual rights. To strengthen our own governing, democratic institutions and restore confidence and trust in government. To address the immediate threat of climate change and build resiliency. And to adapt our own policies so that we may better balance, absorb, and assimilate those seeking to make a better life for themselves within our borders. We are a nation of immigrants and have been made immeasurably stronger by our openness and ability to welcome and assimilate diversity. Maintaining that ability will be a foremost challenge of the emerging world.