Entrepreneur Develops Technology to Monitor Police Interactions

By Leesa Newborn and Giovanna Dasilva

Transparency and government accountability are considered essential components to  maintaining a healthy democracy and reducing corruption. With the rise of  technological advancements in the digital media era, entrepreneurs can facilitate demands for transparency by developing online programs and apps that allow citizens to monitor government institutions and agencies. For example, Raheem AI, a chatbot powered by Facebook Messenger, enables citizens to anonymously report and rate their encounters with police officers, increasing transparency in law enforcement.

Brandon Anderson created Raheem AI in response to the fatal shooting of his romantic partner by police. Wanting to prevent this experience from happening to others, Anderson created the app in order to reduce and hold police accountable for misconduct.   

Anderson’s concerns mirror general attitudes toward law enforcement. According to a Gallup poll conducted in July 2017, 57 percent of Americans said that they had a “great deal” or “quite a lot” of confidence in the police. While approval ratings overall have risen compared to 52 percent in 2015, survey responses from minorities, Democrats, and adults aged 18-34 indicate a significant decline in confidence compared to previous years. For instance, Hispanic approval dropped from 59 percent in 2012-2014 to 45 percent in 2015-2017, and black approval ratings decreased from 35 percent to 30 percent over the same period.

Raheem AI is designed to monitor civilians’ interactions with law enforcement officers. Through the Facebook Messenger chatbot, people can rate and provide anonymous feedback of their encounters with police. This encourages more people to report not only due to the convenience of the online app interface, but also the confidentiality it provides.

A driving force behind the creation of the app, Anderson says, was the idea that police officers could improve their approach to policing as  citizens played a more active role in policing law enforcement and holding poorly rated officers accountable for their actions.Currently Raheem AI is in the beta testing phase in a few small police departments near Berkeley, California.

The Georgetown University Social Innovation and Public Service Fund (SIPS) provided grant money for Raheem AI. SIPS is a student driven program that supports Georgetown students and alumni striving to improve the world through social entrepreneurship. As Raheem AI began to gain notice, the White House also offered financial support to the project through My Brother’s Keeper, a program created by President Barack Obama to address the opportunity gaps faced by boys and men of color.

Social entrepreneurs such as Brandon Anderson are fundamentally altering the manner in which citizens interact with government institutions. User friendly programs focused on increasing transparency such as Raheem AI is just one example of how they are accomplishing this goal. In this way, they are well-suited towards bringing about meaningful social and political change.

 

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Jones Act Protectionism Hinders Puerto Rican Recovery Efforts

By Giovanna da Silva

On September 16, Category 5 Hurricane Maria made landfall on Puerto Rico with sustained winds of 155 miles per hour. Maria set the record as the strongest hurricane to hit the island in 89 years. With millions of displaced Puerto Ricans desperately in need of basic essentials, such as oil, food, and medicine, a little known law regulating maritime commerce–the Jones Act– hindered short-term emergency response efforts causing needless suffering. Further, the act is likely to impede long-term recovery of the island’s economy.

The Jones Act, formally known as the Merchant Marine Act of 1920, is a policy implemented to strengthen national security and protect the American shipbuilding industry from foreign competition. The act restricts the transport of goods in US ports to vessels that are built, owned, and operated by Americans.

Many economists agree that the Jones Act negatively impacts economic growth. Puerto Rico in particular suffers from the impact of Jones Act protectionism. Puerto Rican citizens pay more than necessary for consumer goods and other materials due to increased shipping costs, contributing to a higher cost of living. Given Puerto Rico’s geographic location, the island solely relies on shipping as a way to receive goods. Supermarket goods, for example, are priced 21 percent more than the US average. A study conducted by the New York Federal Reserve found while the price to ship a 20 foot container of goods from the US to Puerto Rico totals around $3,063, it only costs $1,504 to ship the same container to neighboring Santo Domingo, Dominican Republic, and $1,687 to Kingston, Jamaica.

Twelve days after Hurricane Maria hit Puerto Rico, President Donald Trump waived the Jones Act, issuing a 10-day suspension. This decision has come under fire from supporters of the act.

The first argument asserts that lags in initial relief efforts were due to poorly executed federal response efforts, not cargo coming into the island. In addition, relief and supplies already in ports faced delays due to the damage in infrastructure and lack of available truckers and gas to carry the cargo into the towns and countryside. This resulted in shortages in food, water, and other necessities

The second criticism argues that a 10-day waiver wasn’t enough time for Puerto Rico to recover from the storm’s destruction. Puerto Rico will have to build new infrastructure in the wake of the hurricane’s destruction. Some are still without cell phone service or electricity on the island. There are around 1,000 people in Puerto Rican shelters and thousands who relocated to Florida to escape harsh conditions on the island.  

Senators John McCain (R-Arizona) and Mike Lee (R-UT) have proposed legislation to permanently exclude Puerto Rico from Jones Act restrictions. While controversial, this may be an important step toward helping Puerto Rico rebuild its infrastructure and economy in the long run.  

 

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Saudi Arabian Entrepreneur Advances Women’s Rights in the Middle East

By Kristen Carpenter and Giovanna DaSilva

Earlier this year, Saudi Arabia became the first country to grant a robot by the name of Sophia full-fledged citizenship. Critics noted that while Sophia can roam the streets of the country unaccompanied, Saudi Arabia’s female citizens are not afforded this right. After all, women are still prohibited from working or travelling without permission from a male guardian. But these attitudes may be changing because of the efforts of Saudi entrepreneurs.

The Saudi Arabian government has implemented legislative reforms to allow women certain freedoms. Saudi Arabia, for example, recently legalized driving by women, an important milestone in advancing their rights in the kingdom.

Legislation alone, however, fails to fully address the oppressive culture women face in the country. Social entrepreneurship can play an important role in facilitating this change. Glowork, the first Saudi female job-matching service, aims to help women achieve economic independence through employment.

Khalid Alkhudair founded Glowork in 2011, after he witnessed the difficulties women face in obtaining employment. “We entered into companies that didn’t have women and convinced them to employ females,” Alkhudair remarks in an interview.

By partnering with the Saudi Ministry of Labor, Glowork has access to the Ministry’s employment database, which provides information on the 1.6 million jobless women in the country. Glowork receives a commission from the government for each job match. Additionally, the company acts as an advisor to the government in drafting legislation that supports increased presence of women entering the workforce. The company has successfully matched over 27,000 women with employment, facilitating economic growth and opportunities for female advancement. Glowork also mentors women through the hiring process at its career center. Its program, “A Step Ahead,” provides job training workshops and hosts job fairs. Outside of Saudi Arabia, Glowork currently has an office in Jordan with plans to increase its presence in Oman.  

Recently, Alkhudair designed a glowork smartphone app.  With this app, women are able to meet and connect with future employers, create digital resumes, and use geolocation to access an online map of businesses looking to hire nearby. Additionally, women use the app to communicate with one another, fostering a network of support and camaraderie.

The company’s success has spurred controversy among some citizens. In one instance, a grocery chain that employed 11 women through Glowork faced an organized boycott, leaving the owner no choice but to fire the women. Most efforts at integration, however, have been successful. As female presence in the public sphere increases, cultural attitudes will likely shift accordingly.

Currently, Saudi Arabia ranks 141 out of 144 countries in the World Economic Forum’s global gender gap index. While there is a long way to go in terms of equality, progress will continue to be made through social enterprises such as Glowork. Thanks to Khalid Alkhudair, Saudi women now have greater access to employment. Cultural shifts result from decentralized efforts as well as government mandates. For this reason, entrepreneurs wield significant power in driving social change.

 

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Hurricane Response Efforts are Most Effective When Decentralized

By Chad Thomas

According to the Federal Emergency Management Agency (FEMA), emergency responses to hurricanes aim to prevent further loss of life and  property damage. Effective emergency responses utilize local information and enable decentralized responses from within the disaster zone. Local information about necessary relief in affected areas aids response efforts. A decentralized response enables responders in the affected area to act as the disaster situation unfolds.

Residents, organizations, and governments have different responsibilities throughout emergency management phases. Before landfall, local officials near a hurricane’s projected path prepare supplies, initiate evacuations, and broadcast warnings and residents prepare for the hurricane. After disaster strikes, responders conduct rescue missions and provide relief, such as food, water, healthcare, and shelter.

In Florida, city and county emergency management directors and the governor can assume emergency management powers to direct resources within their jurisdictions after officials declare a state of emergency. The president can approve federal aid at the request of the governor. FEMA provides financial support and additional supplies to overwhelmed communities during the recovery phase.

Sparse information regarding the locations and needs of victims hinders disaster response efforts. Economists have studied how to overcome the problems of coordinating dispersed bits of localized knowledge such as those faced by responders to natural disasters—the so-called “knowledge problem—extensively.  Russell Sobel and Peter Leeson, for example, discuss Hayek’s information problem and state that an effective disaster response identifies the existence of a disaster, type of disaster, and proper allocation of resources in an attempt at addressing the knowledge problem. Economist Friedrich A. Hayek popularized the concept of the  information problem  in his essay, The Use of Knowledge in Society. Hayek wrote that a major economic challenge “is a problem of the utilization of knowledge which is not given to anyone in its totality.” Utilizing local information helps communities prepare for and manage the emergency on an as-needed basis within affected communities.

Ball State University economist Steven Horwitz credits decentralization  with enabling responders to make decisions about how best to manage supplies and overcome obstacles with local information. For example, decentralization in the Coast Guard and private organizations assisted effective responses following Hurricane Katrina. Responders from the Coast Guard did not have to constantly receive commands from higher officials to act in changing situations.  Before the storm hit New Orleans, Walmart and Home Depot stationed trucks filled with supplies in surrounding areas to quickly provide for those in need. The Coast Guard deployed rescuers around the Gulf of Mexico and rescued over 33,500 people from danger. When FEMA arrived in New Orleans, the agency prevented early responders, such as Walmart and the Red Cross, from bringing in some supplies. The Department of Homeland Security’s inspector general criticized FEMA for poor supply management and uncoordinated rescue missions.  

Disaster responses that utilize local information can  provide relief to victims, limit property damage, manage supplies, and rescue people.  Decentralization and coordination between private and public disaster relief efforts can further maximize the aforementioned benefits from local information.

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The Jones Act is Sinking the Growth of American Industries

By Giovanna DaSilva

The Merchant Marine Act of 1920, commonly referred to as the Jones Act, is a law enacted to protect the United States’ maritime industry, regulate commerce, and bolster national defense. While well-intentioned, the act fails to reflect the current needs of the United States. Repealing the Jones Act would prove beneficial to economic growth.

The Jones Act is a modern iteration of regulations imposed on maritime trade, going as far back as 1790. The act’s sponsor, Wesley Jones, wrote of the importance of facilitating the growth and development of a merchant marine in order to strengthen national defense and the shipping industry.

Today, proponents still argue the Jones Act is essential for maintaining jobs, fostering economic growth, and preserving the United States’ maritime industry. They posit that the act allows the American maritime industry to remain competitive in an era of globalization.

One of the main provisions of the act requires vessels that carry goods between American ports are: “owned by U.S. companies that are controlled by U.S. citizens with at least 75 percent U.S. percent ownership; at least 75 percent crewed by U.S. citizens; built (or rebuilt) in the United States; and registered in the United States.”

This requirement restricts market competition within the shipping industry, thus increasing the cost of shipping. The act negatively impacts Puerto Rico in particular. Instead of receiving shipments from neighboring islands at a substantially cheaper price, the island must pay for overpriced US shipments.

Increased domestic shipping costs incentivize states to import commercial goods from abroad instead of shipping goods from other states, to the detriment of domestic industries. Shipping Texas oil to Boston, Massachusetts costs three times more than importing similar oil from Europe.

Researchers Russ Kashian, Ike Brannon, and Jeff Pagel argue the Jones Act impedes the growth of several American industries. They cite estimates from transportation economists Joseph Francois and his colleagues, in the article, “Commercial Policy and the Domestic Carrying Trade,” who found that repealing the act would increase revenues in the water transportation sector  by $1.5 billion.The chemical, plastics and lumber sectors would also prosper. Alaska, Hawaii and Puerto Rico would realize around $5-15 billion more in annual revenue.

Florida, on the other hand, ranks second among the states in maritime jobs, and might see a decline in related employment and revenue. However, repeal of the Jones Act could increase economic growth by bolstering other sectors of the economy responsible for a large portion of the state’s GDP. Francois and his coauthors speculate that any jobs lost in the maritime industry could be replaced by growth in industries such as the  domestic water sector, agriculture, trade, and manufacturing.

Jones Act protectionism shields the shipping industry from market competition at the expense of increased costs to the American consumer and US industries. While politicians and interest groups champion the act as an “America first” policy, it is ultimately in America’s economic best interest to repeal the act entirely even if states such as Florida find themselves at a temporary disadvantage until they adjust to a more competitive global economy.

 

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A Brief History of Frenchtown

Jordan Greer

With Frenchtown development becoming one of the spotlight issues in the city of Tallahassee’s future economic redevelopment plans, a look at the social and economic context for this marginalized area of the city might be useful.

 On July 4th 1825, the federal government granted $200,000 worth of northern Florida territory to Marquis De Lafayette, a wealthy French military officer and veteran of the American revolutionary war.  He decided to establish a town in which slavery was outlawed. This attracted many French and and free black settlers to the area, which was named Frenchtown. Some dispute exists over whether the name comes from its French residents or from the black population’s connections to the abolitionist town of Frenchtown, New Jersey, which served as a temporary haven for free black persons prior to the U.S. Civil War.

From the 1920’s into the early 1970’s, despite sustained segregation and economic oppression under Jim Crow, Frenchtown went through a period of considerable economic growth. In 1929, Lincoln High School completed its fourth reconstruction, cementing the school as a foundation of employment and education for the neighborhood.  Frenchtown was made up of mostly high school and college-educated black professionals. The community grew to be a self-sustaining and thriving economy with local grocery stores, drug stores, and other small businesses.

The national civil rights movements of the time inspired community members and leaders in Tallahassee to partake in political activism. Organizations such as the NAACP, the Urban League, and the Southern Christian Leadership Conference began to spring up in the area. This activism was accompanied by the increasing mobilization of local churches. With the help of these organizations, Tallahassee saw several successful civil rights protests throughout the ’50s and ’60s.

The end of segregation in Tallahassee, as in other cities across the nation, led to unintended consequences for some minority neighborhoods, including Frenchtown. Unfortunately, at the end of Jim Crow-era policies of segregation, removal of the neighborhood’s institutions such as local hospitals and schools in favor of shifting funding to resources outside the neighborhood halted and eventually reversed Frenchtown’s growth.

In an interview for this article, Patrick Mason, FSU economics professor, lays out an economic picture of the devolution of Frenchtown:

“Frenchtown used to be a [primarily] middle income neighborhood … But the neighborhood experienced a period of wage stagnation and economic decline from about 74’ to 95’. Local businesses found it hard to compete with national chains in the grocery and the fast-food industries.”

Desegregation of schools led to the closure of Lincoln High-School in 1970 and its subsequent relocation to the southeast area of the city in 1975.  Mason remarks, “That was major. That’s removing a key institution from a community.”  Many residents left to be closer to the schools where their children were enrolled or where they worked.

This period of economic stagnation led to a migration of black residents away from Tallahassee. According to US Census data, in 1930 the population of Leon County was 65 percent black while today the number stands at a mere 35 percent.

Local businesses fostered economic growth, prosperity, and a sense of community among citizens during the height of Frenchtown’s history. While revitalization is no easy feat, city planners must be cognizant of the community’s vibrant history and the factors that facilitated its growth in order to create a new path forward.

 

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Challenges to Privatizing Flood Insurance

Giovanna Dasilva

The National Flood Insurance Program (NFIP), implemented in 1968 to address a market failure in the flood insurance sector, has been the subject of scrutiny following hurricanes Harvey and Irma. Increasing the scope of the private sector has often been cited as a potential solution to the NFIP’s pitfalls. However, there are challenges private companies must address for this to be a viable solution.

In Florida, 16 private insurance companies provide coverage for flooding, often at more competitive rates compared with the NFIP in lower-risk flood areas. Increasing private sector presence in these areas may benefit consumers by providing them with competitive pricing and different coverage options to choose from.

Private insurers must be capable of covering severe losses at the level the NFIP currently does, either by holding a large sum of capital in reserve or through reinsurance. Reinsurance, the “insurance for insurers,” allows private companies to take on more risk by assuming some of their costs in the event of a large-scale natural disaster. An expansion of the reinsurance market for flood insurance is necessary in resolving this issue.

The challenge of covering severe losses isn’t exclusive to the private market. Without loans from the US Treasury, the NFIP would not have been capable of covering the amount of damage incurred during Hurricane Katrina. The Government Accountability Office argues that it is unlikely the NFIP will be able to pay off its debt. A prerequisite to privatizing the flood insurance sector is forgiving the program’s accumulated debt.

Private insurers often complain that in order to accurately assess pricing for areas that are more prone to flooding, they must be able to access the NFIP’s flood map data. Unfortunately, sharing this information is unlawful due to federal privacy statutes. The declassification of NFIP flood map data is crucial to the success of the private sector.

Researchers Carolyn Kousky and Howard Kunreuther state that another issue with transferring public insurance policies to the private sector is that property owners in high-risk flood areas will experience sharp increases in insurance premiums.This is because private insurers price policies to account for risk, rather than offer artificially lower rates. Vouchers can assist lower-income families seeking affordable insurance in the private market.  

Depopulation, as seen in the case of Citizens Property Insurance, can be a vehicle to scaling back the NFIP. Depopulation refers to transferring a significant number of insurance policies to the private market. The Citizens Property Insurance Corporation was created by the State of Florida in 2002 to provide property insurance to those unable to afford policies from the private sector. It quickly became the most popular insurer in the state, in its height covering 1.5 million policies.  Depopulation allowed Citizens Insurance to gradually reduce the number of insurance policies they covered to the private market.

Privatizing the flood insurance industry could offer many benefits to consumers, including expanded choice and lower premiums for some. Although privatization is a promising solution, problems such as gaining access to flood maps and covering severe losses without government aid must first be resolved.

 

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