On the afternoon of March.17^th, Donald Kettl, Dean of MSPP (University of Maryland of School of Public Policy), and MSPP professor Kenneth Apfel visited National School of Development, Peking University. They delivered two speeches to academic researchers and graduate students at Peking University. 

 The event was anchored by Yao Yang, Dean of CCER (China Center of Economic Research). He pointed out that after the world financial crisis the government's role in public affairs management was highlighted. The social problems confronting the U.S. administration today may also be challenging the Chinese government tomorrow. He hoped the speeches given by two experts on public policy would provoke thoughts and ideas of the audience.

  Then, Professor Donald Kettl began to give his speech: “Challenges to Government in the 21^st Century”. He first raised two questions: the first one is whether the classic administration approaches, including rule of law, setting boundaries and exercising controls, would fit the new challenges posed by more complicated social problems. The next one is whether a particular problem is interconnected with other issues beyond border limits. For example, the air pollution in one country might damage environments of other regions.

  Based on these two questions, Professor Kettl introduced a dilemma of modern government, which is the constant “collision of administrative boundaries and policy practice”. The traditional practice in policy and administration was conducted through three steps: define a problem, assign responsibility and oversee results, and each of the three steps is based on setting boundaries. This model of practice gives prominence to the government power, because the people always trust those having accepted systematic training. But the problem is that the government may sometimes be incapable of setting boundaries, or bypass those boundaries already existing. The tragedy of Katrina-hit New Orleans shows that the federal government could not deliver efficient solutions to the social problems, because it was limited by the boundaries already set. Kettl commented that in this globalizing world, no single organization can control any problem that matters.

  Another problem stressed upon by Professor Kettl is the mismatch of scale. He cited a paragraph given by Daniel Bell in 1988, saying that “the nation-state is becoming too small for the big problems of life, and too big for the small problems of life. It is too small for big problems because there are no effective international mechanisms to deal with things…it is too big for small problems because the flow of power to a national political center means that the center becomes increasingly unresponsive to the variety and diversity of local needs.” Kettl concluded that the possible methods to raise the administration efficiency and effectiveness include transparency, output tracking and strengthening performance management. But questions should be also born in mind that how we hold officials responsible for outcomes they cannot control.

Finally, Professor Kettl gave some suggestions for further improvement. The first is establishing a new organization worldwide and making the decision-making process more hybrid and multi-lateral. Second, responsibility should be shared across multiple organizations, with responsibility defined by each organization's contributions to results. The final point is focusing on results that matter for people and replacing authority with information when authority structures don't match problems.

After the speech, Professor Kettl answered several questions from the audience. Some one asked him whether the bankruptcy of G.M. symbolized that the classic model of “boundary setting” also limited the development of the American business field. Kettl agreed on this point, commenting that the stereotype of “I never do this way, so I won't change” should be broken, and problem-solving mechanism should be adjusted with the changing situations. Another listener raised a question of “how the public policy management goes international”. Professor Kettl replied that an international organization with legal binding authority should be established and the local parochialism should give way to international cooperation and communication.

After the Q&A session ended, Professor Kenneth Apfel delivered his speech with the title of “Retirement policy challenges in the USA, and my initial observations about China's challenges.” He first compared the problems confronting both the U.S. and China in terms of pension issues. The American problems, he summarized, consist of slowly aging population, trend of early retirement, and fiscal strains in all tiers. But he thought the China's problems seem to be more severe, including very rapid aging population, retirement at a very early age, low coverage levels and high retirement benefit levels. Therefore both countries should take effective measures against these problems.

The World Bank's model to deal with pension issues is a multi-tier one, stated Professor Apfel. According to the World Bank model, the income of retired people comes from several balanced sources, such as family support, social assistance, universal foundation, employer pension and private savings. But this ideal model could not well explain part of the reality, especially for the low-income retired people, whose 60% or more of their income was dependent upon the social security. Professor Apfel said that 50% of the American old people would struggle under the poverty line as long as the social security was abolished.     

 Apfel also shared with the audience his outlook about the American future. He predicted that the social security replacement rate would decline by 10% until 2030 and more future benefit reductions may become likely. But the public health insurance may still face severe pressures given its wide coverage rate and the aging challenges. The Clinton and Bush administrations both failed in improving the social security system, and the new reform conducted Obama administration was still stuck in the bipartisan disputes. But for this reform Professor Apfel still cling to the hope.

Another suggestion made by Apfel was the delaying of retirement age, which would greatly improve economic security. But the government should play an important role by creating incentives for those working more and retiring late. In his opinion, Professor Apfel argued that the American pension issue is a big but manageable challenge and he was optimistic about the American future.

As for the Chinese situation, Apfel expressed his deep worries. He thought that the Chinese retired people rely too much of their income on the public pensions, and the early retirement age constraints the government finances, which seemed to be unsustainable as the Chinese society was aging very fast. Apfel suggested the Chinese government increase the transparency of the social security reform and management, curb corruptions and expand the social insurance coverage.

After the speech ended, Professor gave clear answers to the audience's questions, such as the effect of early retirement age on unemployment of young college graduates, and also social security reforms of the Chinese state-owned enterprises.

Professor Donald Kettl is currently the Dean of University of Maryland of School of Public Policy, and a nonresident senior fellow of Brookings Institution. He holds a doctorate degree from Yale University. Kenneth Apfel is a public policy professor of University of Maryland of School of Public Policy and once served as the Commissioner of the Social Security Administration from 1997 to 2001. Earlier this afternoon, both professors signed the memorandum of understanding between MSPP and National School of Development as representatives from the former.