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Assessing options for military withdrawal in Iraq in 2020, the authors conclude that supporting a stable and friendly Iraq is in the continuing long-term interest of the United States—and that this does not require continuing the combat assistance mission in Iraq over the long run, but does require maintaining a small force of military advisers to help train and develop Iraqi military capabilities so that Iraq can defend itself.

With the coronavirus disease 2019 (COVID-19) pandemic causing economic dislocations worldwide, RAND researchers interviewed 21 small-business owners and found that the most common concerns focused on a need for assistance in covering fixed operating costs and on worker safety. Adjustments to existing policies were also discussed, such as clear rules for reopening businesses and coordinated reopening policies across neighboring jurisdictions.

This brief summarizes a series of reports about the geopolitical, economic, environmental, legal, informational, and military trends that are likely shape the contours of conflict through 2030.

This series of reports examines the key geopolitical, economic, environmental, geographic, legal, informational, and military trends that will shape the contours of conflict between now and 2030.

Russia and China represent distinct challenges to U.S. national security. Russia is not a peer or near-peer competitor but rather a well-armed rogue state that seeks to subvert an international order it can never hope to dominate. China is a peer competitor that wants to shape an international order that it can aspire to dominate. This Perspective assesses U.S. policy options in the competition among Russia, China, and the United States.

This brief summarizes a report that comprehensively examines non-violent, cost-imposing options that could be pursued to overextend and unbalance the Russian regime.

As the U.S. National Defense Strategy recognizes, the United States is currently locked in a great-power competition with Russia. This report seeks to define areas where the United States can compete to its own advantage. It examines Russian vulnerabilities and anxieties; analyzes potential policy options to exploit them; and assesses the associated benefits, costs, and risks, as well as the likelihood of successful implementation.

RAND explored eight plausible post-Brexit trade scenarios involving the UK, EU and U.S. after Brexit. Game theory insights were also used to create a better understanding of how different factors might affect the outcome of Brexit negotiations. The UK was found to be economically worse-off outside of the EU under most scenarios, particularly leaving the EU with no trade deal. It is in the UK's best interests to achieve a trade deal post-Brexit.

How Brexit affects the economies of the United Kingdom, Europe, and the United States will depend on the outcomes of the ongoing negotiations and decisions made about trade and investment. This calculator allows users to examine how the negotiations are likely to affect these three economies in the 10 years after Brexit negotiations conclude.

This brief outlines the Strategic Rethink project and describes research documented in the final volume of the project, focusing on three different strategic orientations to satisfy the greatest number of U.S. interests and objectives.

This report describes the likely evolution of Islamic State of Iraq and the Levant (ISIL) finances under three specific scenarios: a continuation of the current campaign, a negotiated settlement in Syria and political accommodation in Iraq, and military victory without negotiated settlement or political accommodation. Discussion of these scenarios offered ways to counter fundraising in ISIL territory and use financial information to damage ISIL.

Although armed conflict between the United States and China is not likely, the possibility is real enough to require prudent policies and effective deterrent measures. In the past six years, the range and capabilities of Chinese air and sea defenses have continued to grow, making U.S. forward basing more vulnerable and the direct defense of U.S. interests in the East Asia region potentially more costly.

Participating in insurgency is physically risky. Why do people do so? Using new data on 3,799 payments to insurgent fighters by Al Qa'ida Iraq, we find that: (i) wages were extremely low relative to outside options, even compared to unskilled labor; (ii) the estimated risk premium is negative; and (iii) the wage schedule favors equalization and provides additional compensation for larger families. These results challenge the notion that fighters are paid their marginal product, or the opportunity cost of their time. They may be consistent with a “lemons” model in which fighters signal commitment by accepting low wages.

Multinationals have become increasingly important to the world economy. Overseas production by U.S. affiliates is three times U.S. exports, for example. Who is investing where, for sales where? Much foreign direct investment is between high-income countries, but investment in some developing and transition regions, while still modest, grew rapidly in the 1990s. Adjusting for market size, much investment stays close to home; adjusting for distance, much heads toward the countries with the biggest markets. Foreign direct investment is more geographically concentrated than either exports or production. Thus U.S. affiliate production in Europe is 7 times U.S. exports to Europe; that ratio drops to 4 for all industrial countries and to 1.6 for developing countries. Multinational activity in high-income countries is overwhelmingly horizontal, involving production for sale to the host country market. In developing countries, a greater proportion of multinational activity is "vertical," involving manufacturing at intermediate stages of production. Thus only 4 percent of U.S. affiliate production in the European Union is sold back to the United States, whereas for developing countries the figure is 18 percent, rising to 40 percent for Mexico. Similarly, less than 10 percent of Japan's affiliate production in the EU is sold back to Japan, compared with more than 20 percent in developing countries. In models of horizontal activity, the decision to go multinational is a tradeoff between the additional fixed costs involved in setting up a new plant and the savings in variable costs (transport costs and tariffs) on exports. In models of vertical activity, direct investment is motivated by differences in factor costs. Tariffs and transport costs both encourage vertical multinational activity (by magnifying differences in factor prices) and discourage it (by making trade between headquarters and an affiliate more expensive). The major outward investors carry out much horizontal investment in large markets. For U.S. investors, this means Europe, especially the United Kingdom; for Japan and Europe, it means the United States. Most EU investments, however, stay within the EU. The major outward investors carry out much of their vertical investment closer to home: the United States, in Mexico; the EU, in Central and Eastern Europe; Japan, in Asia. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the location of economic activity. Anthony J. Venables may be contacted at a.j.Venables@lse.ac.uk.

This brief describes a report presenting the strategic choices the United States faces regarding the international economy over the term of the next presidential administration.

Amid intensifying debate over U.S. funding and resources, RAND researchers find that the economic benefits of U.S. overseas security commitments could far exceed the costs.

This report analyzes data from a survey of U.S. consumer preferences related to fixed telephone (landline), mobile telephone, fixed Internet, and mobile Internet services. It provides population-level estimates of participation in free and reduced-price telephone programs provided by the government, the bundles of services found in U.S. households, and the relative importance of each service in the lives of the respondents.

Using U.S. state-level data we show that agglomeration externalities influence the level of foreign-invested capital in a location. Our empirical model allows the separation of agglomeration effects from the rate of capital stock adjustment, two forces that previous research has conflated. We estimate an agglomeration elasticity of investment of 0.11 to 0.15 with respect to same-source-country investment, lower than previous estimates. We also investigate the influence of state policies and find that although general investment incentives do not affect the location of FDI, targeted policies such as unitary taxation and state foreign offices influence investment. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

States within the United States have long promoted goods exports to help their businesses and improve their economies. In contrast, promotion of services exports remains relatively unexplored, although the value of promoting services exports is potentially large. In 1995, services trade entered international discipline with the General Agreement on Trade in Services. In 2004, services trade made up more than one fifth of all U.S. trade. The United States routinely has a surplus in services trade. One barrier to state promotion of services exports has been the difficulty of measuring state services exports. This article discusses the potential of services trade for the states, reviews efforts to measure subnational services exports, and introduces a new method to estimate state-level services exports. This method can help state development officials better understand statewide economic trends, design programs, and approach federal policy makers about gaining advantages from future trade liberalization efforts.

In the 2001 Doha Development Round ministerial declaration, countries committed themselves “to the objective of duty-free, quota-free market access for products originating from LDCs.” In this light, this paper investigates the current tariff barriers put in place and preferences granted by the Triad countries regarding products from LDCs. It first investigates preferences in policy-the simple average tariffs faced by LDCs-and then looks at barriers in practice, analyzing the extent to which LDCs have been able to take advantage of the variety of preferences granted. It also explores the LDC tariff barriers against goods from other countries. It finds that Triad tariff barriers against LDC products have fallen dramatically and are especially low in the EU. However, barriers remain against certain products in which LDCs specialize, so that U.S. import-weighted tariffs for LDC goods are actually higher than U.S. import-weighted tariffs for goods of countries subject to MFN tariffs. Furthermore, the LDCs themselves tend to favor goods from the advanced industrial countries. These results indicate that there is still much room for tariff reductions for LDC goods, especially in the United States, and that such reductions must take account of LDC production capabilities.

Globalization of production is one of the dominant issues of the international economy. This paper explores how country characteristics influence the choice of developing country export bases by US multinationals. It separately analyses two types of exports by affiliates, exports to the headquarters country and exports to the rest of the world. The main findings are that favourable host country geography is related to production of both types of exports by multinational affiliates, and liberal policies toward multinationals are related to production of rest-of-world exports. Labor costs and taxes, traditional determinants, also prove important to one or both types of exports. More fundamentally, this research shows that country characteristics relate to the location of multinational production differently depending on the purpose of the production. Copyright 2004, Oxford University Press.

Using a data set of 72 manufacturing industries, this paper investigates the link between trade and skills by looking at the employment of engineers and scientists in manufacturing and the export success of the products they make. Major results are that the world buys U.S. manufactures that use engineering and scientific skill intensively in their production. The U.S. also imports these types of goods, though to a lesser degree. In addition, engineering and science content of U.S. manufacturing trade is becoming more important. Industries are using more engineers and scientists, out there also has been increased demand for engineering- and science-based goods, more so for exports than imports. Policies recommended include skill upgrading of the population through increased training of the less skilled and no new restrictions on the immigration of skilled foreigners.

This study identifies areas that are negatively affecting U.S.-Mexico relations and suggests that the two countries might take a binational approach to improving their long-term partnership.

In early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy. (JEL classification: D12, F14, L66, Q17)

Following the terrorist attacks of September 11, 2001, U.S. policymakers and their international counterparts quickly devised new programs for protecting seaports and the maritime supply chain. This paper focuses on one such program, the U.S. Container Security Initiative, which screens and inspects U.S.-bound ocean shipping containers at foreign ports. Calculations based on trade data and CSI program information makesit clear that the program has expanded rapidly and now covers about two-thirds of all U.S. containerized imports. However, the United States continues to receive containers from many foreign ports that are not participating in the CSI program and likely will never participate. In addition, CSI coverage of imports from countries that could reasonably be considered potential sources of terrorist activity is lower than overall CSI coverage. U.S. security planners can strengthen the effectiveness of the program by focusing on regions from which dangerous containers might arrive, and on shipping routes that terrorists might use.

This chapter describes the landscape of current US port security efforts. It takes a somewhat broader look at maritime security than container screening. In the years since 9/11, the US government has seized the notion that securing the nation’s seaports is an important element of a broader homeland security agenda. Indeed the speed with which broad federal legislation on port security was introduced and passed was remarkable. These laws and regulations present an important backdrop against which specific port security initiatives can be developed and implemented. This chapter describes how the securing of the US maritime transportation network is clearly of vital importance to providing more general protection to the nation from terrorist activity. Much has been done, however, without greater conviction on the part of those providing resources and with continued focus on the highest benefit tasks, the network will remain vulnerable to a terrorist event be unable to respond appropriately should an event occur.

In the work programme laid out by the Doha Ministerial Declaration of 20 November 2001 (WTO, 2001), the assembled trade representatives committed themselves ‘to the objective of duty-free, quota-free market access for products originating from LDCs [Least Developed Countries]’.1 Through a large number of programmes, the Triad economies of the European Union, Japan, and the United States already offer broad duty-free and preferential treatment to developing countries. Some, such as the Generalized System of Preferences programme (GSP), are decades-old. Others, such as the US African Growth and Opportunity Act (AGOA), the EU Everything But Arms (EBA) Initiative and Japan’s 99 Per Cent Initiative, are just getting started.

Focussing on the economics of terrorism in the post 9/11 world, this book brings together original research based on the collaborative efforts of leading economists and planners. The authoritative and expert contributors use a variety of methodological approaches and apply them to different types of terrorist attacks (on airports, highways, seaports, electric power infrastructure, for example).