At the core of GKC is a series of classes and initiatives that combine STEM skills with policy know-how in a way that’s meant to encourage students to leverage entrepreneurship and innovation in order to develop rapid, scalable solutions to national security issues. Students from both undergraduate and graduate level programs, regardless of their prior experience in national defense, are encouraged to participate.

“We’re really trying to empower students to pursue national security-relevant work while they’re here at Stanford,” explains Joe Felter, GKC’s director, co-founder, and senior research scholar at CISAC. FSI and CISAC have deep roots in this type of innovative, interdisciplinary approach to policy solutions GKC is working to implement. Michael McFaul, FSI’s director, is a founding faculty member and principal investigator for GKC, and David Hoyt, the assistant director of GKC, is an alumnus of the CISAC honors program.

Results from GKC’s classes have been very encouraging so far. Working through "Hacking for Defense," a GKC-affiliated class taught out of the MS&E department, Jeff Jang, a new Defense Innovation Scholar and MBA student, showed how implementing a rapid interview process and focusing on problem and customer discovery has allowed his team to create enterprise software for United States Air Force (USAF) fleet management that has vastly improved efficiency, reduced errors and enabled better planning capabilities into the workflow. Their product has been given numerous grants and awards, and the team has received signed letters of interest from 29 different USAF bases across the world.

In another GKC class, "Technology, Innovation, and Great Power Competition,” Abeer Dahiya and Youngjun Kwak, along with Mikk Raud, Dave Sprague and Miku Yamada — three students from FSI’s Ford Dorsey Master’s in International Policy program (MIP) — have been tackling the challenges involved in developing a domestic U.S. semiconductor strategy. They were among the student teams asked to present the results of their work to Dep. Sec. Hicks during her visit.

“Attending this class has been one of the highlights of my time at Stanford,” says Mikk Raud (MIP ‘22). “It’s been a great example of how important it is to run interdisciplinary courses and bring people from different fields together.”

He continues, “As a policy student, it was very insightful for me to learn from my peers from different programs, as well as make numerous visits to the engineering quad to speak to technical professors whom I otherwise would have never met. After meeting with and presenting to Deputy Secretary Hicks and hearing about the work other students are doing, it really hit home to me that the government does listen to students, and it really is possible that a small Stanford group project can eventually lead into significant changes and improvements of the highest levels of policy making.”

This kind of renewed interest in national security and defense tech among students is precisely what the Gordian Knot Center is hoping to foster. Building an interconnected innovation workforce that can “think deeply, [and] act quickly,” GKC’s motto, is a driving priority for the center and its supporters.

The Department of Defense recognizes the value of this approach. In her remarks, Dep. Sec. Kathleen Hicks acknowledged that reshaping the culture and methodologies by which the DoD runs is as imperative as it is difficult.

“My life is a Gordian knot, day in and day out at the Defense Department,” she quipped. Speaking seriously, she reminded the audience of the tremendous driving power DoD has had in creating future-looking national security defenses.  “Because of its sophistication, diversity, and capacity to innovate, the U.S. Defense Industrial Base and vibrant innovation ecosystem remains the envy of the world,” Hicks emphasized. “Every day, people like you are designing, building, and producing the critical materials and technologies that ensure our armed forces have what they need.”

But she also recognized that the challenges facing the DoD are real and complex. “There are many barriers in front of the Department of Defense in terms of what it takes to operate in government and to make the kinds of shifts we need in order to have the agility to take advantage of opportunities and partner effectively.” She reiterated that one of her key priorities is to accelerate innovation adoption across DoD, including organizational structure, processes, culture, and people.

Partnerships with groups like the Gordian Knot Center are a key component to breaking down the barriers to innovation facing our national institutions and rebuilding them into new, more adaptable bridges forward. While the challenges facing the Department of Defense remain significant, the work of the students in GKC’s classes so far proves that progress is not only possible, but can be made quickly as well.

The grand bargain led to China's continued growth. The drawback, however, was that this economic growth has been accompanied by the accumulation of local government debt with little transparency and central control. When the global financial crisis impacted growth rates, local deficits and debts spiked. In response, Beijing began to shut down backdoor financing and opened front-door options that were transparent and under the control of national authorities — but with limited success.

Reining in Local Government Financing Vehicles

The researchers posit that "only beginning in 2017 did the Communist Party’s own Central Leading Group on Finance and Economic Affairs and various government-related media begin to label local government debt as a threat to the economy, raising the alarm bells by calling it a 'gray rhino,' a likely high-impact threat that was being ignored." Why, then, didn’t Beijing quickly put a stop to local government debt? Why did central authorities wait until 2015 to put measures in place, and wait even longer to identify local government debt as an economic threat?

Oi and her colleagues explain that studies of policy implementation and regulation in China tell us that the national government faces information asymmetry problems, where localities can subvert upper-level directives because the center has imperfect knowledge of what local agents are doing. Such subversion is most likely when local interests are not aligned with Beijing’s. Now, in the wake of the COVID-19 pandemic, the question is whether the pendulum will swing back toward more tolerance of local debt for the sake of economic growth.

All indications, the authors agree, suggest that during COVID-19 and its aftermath, especially as China also has vowed to win and maintain the fruits of the battle against poverty “at all costs,” localities are going to need extra resources, borrowed or not. The center’s pendulum, at least for now, is swinging further away from fiscal discipline toward local incentives and growth.

Evading Institutional Reforms

Oi and her colleagues contend that the expansion of local government debt is a feature of China's developmental model, which aims to "circumvent rather than tackle difficult institutional reform, kicking the can down the road, opting for an easier fix to avoid the potentially high political costs.” 

The authors' primary takeaway is therefore that local government debt in China is not a local problem. Similar to other developing nations that depend upon local partners, China faces a dual-commitment problem: "growing the local economy without debt requires the central state to simultaneously commit to respecting its local agents’ access to and control over the fruits of local development (of which local fiscal resources are the most crucial part), while exercising credible fiscal discipline over precisely the same set of local agents that the center seeks to incentivize.”

For nearly three decades, Chinese central authorities have relied on the grand bargain to boost the nation's economic might. Oi and her colleagues reveal that the problem of local government debt reverberates to the highest echelons of the Chinese state decision makers and continues to present strategic challenges for the economic juggernaut.  

“Larry Diamond has no equal in the field of democracy studies. He is a giant not only in scholarship regarding how democracies rise, function and sometimes fail, he has long applied his knowledge to improve the practice of democracy through his work with international organizations and here at Stanford.” said Kathryn Stoner, Mosbacher Director of CDDRL and FSI Senior Fellow. She added that “Larry Diamond is truly an inspiration. I can think of no better way to celebrate this extraordinary person than with an extraordinary honor like the Mosbacher Senior Fellowship in Global Democracy. I am so grateful to the Mosbacher family for all that they have done for CDDRL, and for this especially wonderful tribute to Larry’s life and work.”

Diamond has served on the Stanford faculty since 1985. He is a senior fellow at FSI and the Hoover Institution and holds courtesy appointments in the departments of political science and sociology. He has taught and mentored thousands of students, including those in the Fisher Family Honors Program at CDDRL, FSI’s Ford Dorsey Master’s in International Policy (MIP) program, and democracy activists from around the world through CDDRL’s Draper Hills Summer Fellows Program, among others at Stanford. Among his many accolades, Larry received the Richard W. Lyman Award in 2013 for his service and generosity to Stanford alumni, as well as the Dinkelspiel Award in 2007 for excellence in teaching and mentoring Stanford undergraduates.

Diamond has also been an institution-builder both inside and outside of Stanford, having made contributions not only to CDDRL and Stanford’s Haas Center for Public Service (where he served as co-director from 2010-2016) but also to the National Endowment for Democracy where he serves as senior consultant to the International Forum for Democratic Studies. He has worked to shape public policy in many ways, from working for the Coalition Provisional Authority in Iraq, to campaigning more recently on behalf of ranked-choice voting initiatives in a variety of American states and cities.

“What Larry presciently labeled a ‘democratic recession’ a decade ago has metastasized into a very dark period for global politics,” said Michael McFaul, the director of the Freeman Spogli Institute for International Studies. “This newly endowed position will ensure FSI continues to be at the cutting edge of research, policy impact and education in the field of global democracy for many years to come.”

During his career of service to FSI and Stanford, Diamond has authored books like The Spirit of Democracy and Ill Winds, countless articles and edited books on democracy in various country and regional settings. He also served as a founding editor of The Journal of Democracy, which has become the most important academic source for writing on the subject.

“I am deeply honored by this generous gift from the Mosbacher family,” said Diamond. “Their extraordinary support will enable us to sustain and deepen our study of global democracy during an era when it faces its greatest challenge in decades. Working closely with brilliant Stanford colleagues, students and visitors is a great privilege, and I look forward to advancing the field well into the future.”

Learn More About Larry Diamond's Research

On October 6, 2021, the APARC China Program hosted the panel program, "Engaging China: Fifty Years of Sino-American Relations." In honor of her recently released book of the same title, Director of the Grassroots China Initiative Anne Thurston was joined by contributors Mary Bullock, President Emerita of Agnes Scott College; Thomas Fingar, Shorenstein APARC Fellow; and David M. Lampton, Professor Emeritus at Johns Hopkins School of Advanced International Studies (SAIS). Thomas Fingar also moderated the panel.

Recent years have seen the U.S.-China relationship rapidly deteriorate. Engaging China brings together leading China specialists—ranging from academics to NGO leaders to former government officials—to analyze the past, present, and future of U.S.-China relations.

During their panel, Bullock, Fingar, Lampton, and Thurston reflected upon the complex and multifaceted nature of American engagement with China since the waning days of Mao’s rule. What initially motivated U.S.’ rapprochement with China? Until recent years, what logic and processes have underpinned the U.S. foreign policy posture towards China? What were the gains and the missteps made during five decades of America’s engagement policy toward China? What is the significance of our rapidly deteriorating bilateral relations today? Watch now: 

For more information about Engaging China or to purchase a copy, please click here.