American Enterprise Institute

History

Beginnings (1938–1954)

AEI grew out of the American Enterprise Association (AEA), which was founded in 1938 by a group of New York businessmen led by Lewis H. Brown. AEI's founders included executives from Bristol-Myers, Chemical Bank, Chrysler, Eli Lilly, General Mills, and Paine Webber.

AEA's early work in Washington, D.C. involved commissioning and distributing legislative analyses to Congress, which developed AEA's relationships with Melvin Laird and Gerald Ford. Brown eventually shifted AEA's focus to commissioning studies of government policies. These subjects ranged from fiscal to monetary policy and including health care and energy policy, and authors such as Earl Butz, John Lintner, former New Dealer Raymond Moley, and Felix Morley. Brown died in 1951, and AEA languished as a result. In 1952, a group of young policymakers and public intellectuals including Laird, William J. Baroody Sr., Paul McCracken, and Murray Weidenbaum, met to discuss resurrecting AEA.

William J. Baroody Sr. (1954–1980)

Baroody was executive vice president from 1954 to 1962 and president from 1962 to 1978. Baroody raised money for AEA to expand its financial base beyond the business leaders on the board. During the 1950s and 1960s, AEA's work became more pointed and focused, including monographs by Edward Banfield, James M. Buchanan, P. T. Bauer, Alfred de Grazia, Rose Friedman, and Gottfried Haberler.

In 1962, AEA changed its name to the American Enterprise Institute for Public Policy Research (AEI) to avoid any confusion with a trade association representing business interests attempting to influence politicians. In 1964, William J. Baroody Sr., and several of his top staff at AEI, including Karl Hess, moonlighted as policy advisers and speechwriters for presidential nominee Barry Goldwater in the 1964 presidential election. "Even though Baroody and his staff sought to support Goldwater on their own time without using the institution's resources, AEI came under scrutiny of the IRS in the years following the campaign," author Andrew Rich wrote in 2004. Representative Wright Patman subpoenaed the institute's tax papers, and the IRS initiated a two-year investigation of AEI. After this, AEI's officers attempted to avoid the appearance of partisan political advocacy.

Baroody recruited a resident research faculty; Harvard University economist Gottfried Haberler was the first to join in 1972. In 1977, former president Gerald Ford joined AEI as a "distinguished fellow." Ford brought several of his administration officials with him, including Robert Bork, Arthur Burns, David Gergen, James C. Miller III, Laurence Silberman, and Antonin Scalia. Ford also founded the AEI World Forum, which he hosted until 2005. Other staff hired during this time included Walter Berns and Herbert Stein. Baroody's son, William J. Baroody Jr., a Ford White House official, also joined AEI, and later became president of AEI, succeeding his father in that role in 1978.

The elder Baroody made an effort to recruit neoconservatives who had supported the New Deal and Great Society but were disaffected by what they perceived as the failure of the welfare state. This also included Cold War hawks who rejected the peace agenda of 1972 Democratic presidential candidate George McGovern. Baroody brought Jeane Kirkpatrick, Irving Kristol, Michael Novak, and Ben Wattenberg to AEI.

While at AEI, Kirkpatrick authored "Dictatorships and Double Standards", which brought her to the attention of Ronald Reagan, and Kirkpatrick was later named U.S. permanent representative to the United Nations. AEI also became a home for supply-side economists during the late 1970s and early 1980s. By 1980, AEI had grown from a budget of $1 million and a staff of ten to a budget of $8 million and a staff of 125.

William J. Baroody Jr. (1980–1986)

Baroody Sr. retired in 1978, and was replaced by his son, William J. Baroody Jr. Baroody Sr. died in 1980, shortly before Reagan took office as U.S. president in January 1981. According to Politico, the think tank "rose to prominence" in this period "as the primary intellectual home of supply-side economics and neoconservatism."

During the Reagan administration, several AEI staff were hired by the administration.

Christopher DeMuth (1986–2008)

In December 1986, AEI hired Christopher DeMuth as its new president, and DeMuth served in the role for 22 years.

In 1990, AEI hired Charles Murray (and received his Bradley Foundation support for The Bell Curve) after the Manhattan Institute dropped him. During DeMuth's tenure, the organization turned further to the political right.

AEI had severe financial problems when DeMuth began his presidency. During the George H. W. Bush and Bill Clinton administrations, AEI's revenues grew from $10 million to $18.9 million. Academic David M. Lampton writes that DeMuth was responsive to the financial power of "America's hard right".

The institute's publications Public Opinion and The AEI Economist were merged into The American Enterprise, edited by Karlyn Bowman from 1990 to 1995 and by Karl Zinsmeister from 1995 to 2006, when Glassman created The American.

AEI was closely tied to the George W. Bush administration. More than 20 staff members served either in a Bush administration policy post or on one of the government's many panels and commissions, including Dick Cheney and John R. Bolton. In an address to the institute, Bush said "I admire AEI a lot—I'm sure you know that", Bush said. "After all, I have been consistently borrowing some of your best people." In 2002, Danielle Pletka joined AEI to promote the foreign policy department. AEI and several of its staff—including Michael Ledeen and Richard Perle—became associated with the start of the Iraq War. Bush used a February 2003 AEI dinner to advocate for a democratized Iraq, which he said would inspire the remainder of the Mideast. In 2006–07, AEI staff, including Frederick W. Kagan, provided a strategic framework for the 2007 surge in Iraq. The Bush administration also drew on AEI scholars Leon Kass, who was appointed as the first chairman of the President's Council on Bioethics and Norman J. Ornstein, who headed a campaign finance reform working group that helped draft the Bipartisan Campaign Reform Act.

Arthur C. Brooks (2008–2019)

When DeMuth retired as president at the end of 2008, AEI's staff numbered 185, with 70 scholars and several dozen adjuncts, and revenues of $31.3 million. Arthur C. Brooks succeeded him as president at the start of the Late-2000s recession. In a 2009 op-ed in The Wall Street Journal, Brooks positioned AEI to be much more aggressive in responding to the policies of the Barack Obama administration. Under his leadership, AEI identified itself with "compassionate conservativism" and the maximisation of happiness. Politico said that Brooks "helped elevate [AEI] into a bastion of free-market orthodoxy and center-right policy wonkery during the Obama years", before leaving to become a "happiness expert" and self-help guru. In 2018, Brooks announced that he would step down effective July 1, 2019.

On March 25, 2010, AEI resident fellow David Frum announced that his position at the organization had been "terminated." Following this announcement, media outlets speculated that Frum had been "forced out" for writing a post to his FrumForum blog called "Waterloo", in which he criticized the Republican Party's unwillingness to bargain with Democrats on the Patient Protection and Affordable Care Act. In the editorial, Frum claimed that his party's failure to reach a deal "led us to abject and irreversible defeat."

After his termination, Frum clarified that his article had been "welcomed and celebrated" by AEI President Arthur Brooks, and that he had been asked to leave because "these are hard times." Brooks had offered Frum the opportunity to write for AEI on a nonsalaried basis, but Frum declined. The following day, journalist Mike Allen published a conversation with Frum, in which Frum expressed a belief that his termination was the result of pressure from donors. According to Frum, "AEI represents the best of the conservative world ... But the elite isn't leading any more ... I think Arthur [Brooks] took no pleasure in this. I think he was embarrassed."

Robert Doar (2019–present)

In January 2019, Robert Doar was selected by AEI's board of trustees to be AEI's 12th president, succeeding Arthur Brooks on July 1, 2019. In October 2023, Doar led an AEI delegation (including Kori Schake, Dan Blumenthal, Zack Cooper, and Nicholas Eberstadt, among others) to visit Taiwan to meet with President Tsai Ing-wen.

Personnel

As of 2025, AEI's officers include Robert Doar, Jason Bertsch, John Cusey, Kazuki Ko, Katheryne Walker, Kori Schake, Yuval Levin, Michael R. Strain, and Matthew Continetti.

AEI has a Council of Academic Advisers, which includes Alan J. Auerbach, Eliot A. Cohen, Eugene Fama, Aaron Friedberg, Robert P. George, Eric A. Hanushek, Walter Russell Mead, Mark V. Pauly, R. Glenn Hubbard, Sam Peltzman, Harvey S. Rosen, Jeremy A. Rabkin, and Richard Zeckhauser. The Council of Academic Advisers selects the annual winner of the Irving Kristol Award.

Board of trustees

AEI's board is chaired by Daniel A. D'Aniello. As of 2025, notable trustees include:

Cliff Asness, hedge fund manager and the co-founder of AQR Capital Management

Pete Coors, vice chairman of the board of Molson Coors Brewing Company

Harlan Crow, chairman and CEO, Crow Holdings, the Trammell Crow family's investment company

Ravenel B. Curry III, president, Eagle Capital Management

Dick DeVos, president, Windquest Group

Robert Doar, president, American Enterprise Institute

Behdad Eghbali, managing partner and cofounder, Clearlake Capital

Tully Friedman, chairman and CEO, Friedman Fleischer & Lowe

Christopher Galvin, former CEO and chairman, Motorola

Harvey Golub, retired chairman and CEO, American Express Company

Frank Hanna III, CEO, Hanna Capital

Raymond J. Harbert, executive chairman, Harbert Management Corporation

Bill Haslam, former Governor of Tennessee

Pat Neal, chairman of the executive committee, Neal Communities

Ross Perot Jr., chairman, Hillwood Development Company

Political stance and impact

AEI is a member of Atlas Network's group of free-market think tanks and is an associate member of the State Policy Network of conservative and libertarian think tanks.

In the 2000s, AEI was the most prominent think tank associated with American neoconservatism. Irving Kristol, widely considered to be one of the founding fathers of neoconservatism, was a senior fellow at AEI and the AEI issues an 'Irving Kristol Award' in his honour. Paul Ryan has described the AEI as "one of the beachheads of the modern conservative movement".

AEI has close ties with pro-Brexit politicians in the British Conservative Party. For instance, Sajid Javid, Michael Gove, Boris Johnson, and Liz Truss have all made regular appearances at its World Forum and other events, and Suella Braverman and Liam Fox have been hosted by it.

The institute has been described as a right-wing counterpart to the centrist Brookings Institution; however, the two entities have often collaborated. From 1998 to 2008, they co-sponsored the AEI-Brookings Joint Center for Regulatory Studies, and in 2006 they launched the AEI-Brookings Election Reform Project. In 2015, a working group consisting of members from both institutions coauthored a report entitled Opportunity, Responsibility, and Security: A Consensus Plan for Reducing Poverty and Restoring the American Dream.

According to the 2011 Global Go To Think Tank Index Report (Think Tanks and Civil Societies Program, University of Pennsylvania), AEI is number 17 in the "Top Thirty Worldwide Think Tanks" and number 10 in the "Top Fifty United States Think Tanks". As of 2019, the American Enterprise Institute also leads in YouTube subscribers among free-market groups.

Research programs

AEI's research is divided into seven broad categories: economic policy studies, foreign and defense policy studies, health care policy studies, political and public opinion studies, social and cultural studies, education, and poverty studies.

Economic policy studies

Economic policy was the original focus of the American Enterprise Association, and "the Institute still keeps economic policy studies at its core". According to AEI's annual report, "The principal goal is to better understand free economies—how they function, how to capitalize on their strengths, how to keep private enterprise robust, and how to address problems when they arise". Michael R. Strain directs economic policy studies at AEI. Throughout the beginning of the 21st-century, AEI staff have pushed for a more conservative approach to aiding the recession that includes major tax cuts.

In 2002, John H. Makin, an AEI resident scholar, published a report supporting President Bush’s tax cuts, writing that the cuts "played a large role in helping to save the economy from a recession". In the report, Makin suggested that further taxes were necessary in order to attain recovery of the economy and that Democrats in Congress who opposed the Bush stimulus plan were foolish for doing so.

As the 2008 financial crisis unfolded, The Wall Street Journal stated that predictions by AEI staff about the involvement of housing GSEs had come true. In the late 1990s, Fannie Mae eased credit requirements on the mortgages it purchased and exposed itself to more risk. Peter J. Wallison warned that Fannie Mae and Freddie Mac's public-private status put taxpayers on the line for increased risk. "Because of the agencies' dual public and private form, various efforts to force Fannie Mae and Freddie Mac to fulfill their public mission at the cost of their profitability have failed—and will likely continue to fail", he wrote in 2001. "The only viable solution would seem to be full privatization or the adoption of policies that would force the agencies to adopt this course themselves."

In 2006, Wallison moderated a conference featuring James B. Lockhart III, the chief regulator of Fannie and Freddie. In August 2008, after Fannie and Freddie had been backstopped by the US Treasury Department, Wallison outlined several ways of dealing with the GSEs, including "nationalization through a receivership," outright "privatization," and "privatization through a receivership." The following month, Lockhart and Treasury Secretary Henry Paulson took the former path by putting Fannie and Freddie into federal "conservatorship." As the housing crisis unfolded, AEI sponsored a series of conferences featuring commentators including Desmond Lachman, and Nouriel Roubini. Makin had been warning about the effects of a housing downturn on the broader economy for months. Amid charges that many homebuyers did not understand their complex mortgages, Alex J. Pollock crafted a prototype of a one-page mortgage disclosure form.

Foreign and defense policy studies

AEI's foreign and defense policy studies researchers focus on "how political and economic freedom—as well as American interests—are best promoted around the world". AEI staff have tended to be advocates of a hard U.S. line on threats or potential threats to the United States, including the Soviet Union during the Cold War, Saddam Hussein's Iraq, the People's Republic of China, North Korea, Iran, Syria, Venezuela, Russia, and terrorist or militant groups like al Qaeda and Hezbollah. Likewise, AEI staff have promoted closer U.S. ties with countries whose interests or values they view as aligned with America's, such as Israel, the Republic of China (Taiwan), India, Australia, Japan, Mexico, Colombia, the Philippines, the United Kingdom, and emerging post-Communist states such as Poland.

In 2015, AEI gave Israeli Prime Minister Benjamin Netanyahu its Irving Kristol Award.

AEI's foreign and defense policy studies department, directed by Danielle Pletka, is the part of the institute most commonly associated with neoconservatism. According to Vanity Fair, in 2002 it was seen "as the intellectual command post of the neoconservative campaign for regime change in Iraq". Prominent foreign-policy neoconservatives at AEI include Richard Perle, Gary Schmitt, and Paul Wolfowitz. Joshua Muravchik and Michael Ledeen (the latter seen as an "ultra neo-conservative") spent many years at AEI, although they departed at around the same time as Reuel Marc Gerecht in 2008 in what was rumored to be a "purge" of neoconservatives at the institute, possibly "signal[ing] the end of [neoconservatism's] domination over the think tank over the past several decades", although Muravchik later said it was the result of personality and management conflicts.

In late 2006, the security situation in Iraq continued to deteriorate, and the Iraq Study Group proposed a phased withdrawal of U.S. troops and further engagement of Iraq's neighbors. Consulting with AEI's Iraq Planning Group, Frederick W. Kagan published an AEI report entitled Choosing Victory: A Plan for Success in Iraq calling for "phase one" of a change in strategy to focus on "clearing and holding" neighborhoods and securing the population; a troop escalation of seven Army brigades and Marine regiments; and a renewed emphasis on reconstruction, economic development, and jobs.

While the report was being drafted, Kagan and Keane were briefing President Bush, Vice President Cheney, and other senior Bush administration officials behind the scenes. According to Bob Woodward, "[Peter J.] Schoomaker was outraged when he saw news coverage that retired Gen. Jack Keane, the former Army vice chief of staff, had briefed the president on December 11 about a new Iraq strategy being proposed by the American Enterprise Institute, the conservative think tank. 'When does AEI start trumping the Joint Chiefs of Staff on this stuff?' Schoomaker asked at the next chiefs' meeting."

Health policy studies

AEI scholars have engaged in health policy research since the institute's early days. A Center for Health Policy Research was established in 1974. For many years, Robert B. Helms led the health department. AEI's long-term focuses in health care have included national insurance, Medicare, Medicaid, pharmaceutical innovation, health care competition, and cost control.

The center was replaced in the mid-1980s with the Health Policy Studies Program. The AEI Press has published dozens of books on health policy since the 1970s. Since 2003, AEI has published the Health Policy Outlook series on new developments in U.S. and international health policy. AEI also published A Better Prescription in February 2010 to outline their ideal plan to healthcare reform, calling for putting the money and control in the hands of the consumers and continuing the market-based system of healthcare, a form of healthcare that "relies on financial incentives rather than central direction and control."

According to openDemocracy, "In the late 1990s, while he was funded by the tobacco industry, AEI fellow Roger Bate argued against the science which shows that exposure to tobacco causes cancer."

Helms long argued against the tax break for employer-sponsored health insurance, arguing that it distorts insurance markets and limits consumer choices.

Scott Gottlieb, also a medical doctor, rejoined AEI after a term as commissioner with the Food and Drug Administration. He has expressed concern about relatively unreliable comparative effectiveness research being used to restrict treatment options under a public plan.

Roger Bate's work includes international health policy, especially pharmaceutical quality, HIV/AIDS, malaria, and multilateral health organizations.

Paul Ryan, then-minority point man for health care in the House of Representatives, delivered the keynote address at a 2009 AEI conference on mandated universal coverage, insurance exchanges, the public plan option, medical practice and treatment, and revenue to cover federal health care costs.

Legal and constitutional studies

The AEI Legal Center for the Public Interest, formed in 2007 from the merger of the National Legal Center for the Public Interest, houses all legal and constitutional research at AEI. The institute was influential in the law and economics movement in the 1970s and 1980s with the publication of Regulation magazine and AEI Press books. Robert Bork published The Antitrust Paradox with AEI support. Other jurists, legal scholars, and constitutional scholars who have conducted research at AEI include Walter Berns, Richard Epstein, Bruce Fein, Robert Goldwin, Antonin Scalia, and Laurence Silberman.

The AEI Legal Center sponsors the annual Gauer Distinguished Lecture in Law and Public Policy. Past lecturers include Stephen Breyer, George H. W. Bush, Christopher Cox, Douglas Ginsburg, Anthony Kennedy, Sandra Day O'Connor, Colin Powell, Ronald Reagan, William Rehnquist, Condoleezza Rice, Margaret Thatcher, and William H. Webster.

Ted Frank, the director of the AEI Legal Center, focuses on liability law and tort reform. Michael S. Greve focuses on constitutional law and federalism, including federal preemption. According to Jonathan Rauch, in 2005, Greve convened "a handful of free-market activists and litigators met in a windowless 11th-floor conference room at the American Enterprise Institute in Washington" in opposition to the legality of the Public Company Accounting Oversight Board. "By the time the meeting finished, the participants had decided to join forces and file suit... . No one paid much attention. But the yawning stopped on May 18, [2009,] when the Supreme Court announced it will hear the case."

Political and public opinion studies

AEI's research program has published studies on political processes and institutions since the 1970s. The AEI Press published a series of several dozen volumes in the 1970s and 1980s called "At the Polls"; in each volume, AEI's researchers assess a country's recent presidential or parliamentary election. In the early 1980s, AEI researchers were commissioned by the U.S. government to monitor plebiscites in Palau, the Federated States of Micronesia, and the Marshall Islands. Ornstein led a working group that drafted the Bipartisan Campaign Reform Act of 2002.

AEI published Public Opinion magazine from 1978 to 1990 under the editorship of Seymour Martin Lipset and Ben Wattenberg, assisted by Karlyn Bowman. The institute's work on polling continues with public opinion features in The American Enterprise and The American and Bowman's AEI Studies in Public Opinion.

Social and cultural studies

AEI's social and cultural studies program dates to the 1970s, when William J. Baroody Sr., invited Irving Kristol and Michael Novak to take up residence at AEI. Since then, AEI has sponsored research on various issues, including education, religion, race and gender, and social welfare.

Supported by the Bradley Foundation, AEI has hosted since 1989 the Bradley Lecture Series. Notable speakers in the series have included Kristol, Novak, Allan Bloom, Robert Bork, David Brooks, Lynne Cheney, Ron Chernow, Tyler Cowen, Niall Ferguson, Francis Fukuyama, Eugene Genovese, Robert P. George, Gertrude Himmelfarb, Samuel P. Huntington, Paul Johnson, Leon Kass, Charles Krauthammer, Bernard Lewis, Seymour Martin Lipset, Harvey C. Mansfield, Michael Medved, Allan H. Meltzer, Edmund Morris, Charles Murray, Steven Pinker, Norman Podhoretz, Richard Posner, Jonathan Rauch, Andrew Sullivan, Cass Sunstein, Sam Tanenhaus, James Q. Wilson, John Yoo, and Fareed Zakaria.

Education policy studies at AEI are directed by Frederick M. Hess. Hess co-directs AEI's Future of American Education Project, whose working group includes Washington, D.C. schools chancellor Michelle Rhee and Michael Feinberg, the cofounder of KIPP.

AEI is a national allied organization of the American Federation for Children founded in 2010 by Dick and Betsy DeVos of the DeVos Family Foundation. The AEI were supportive of Betsy DeVos' positions when she served under Donald Trump as Education Secretary in 2017-21. Hess supported her plan to gut the Borrower Defense Rule, that enables defrauded students to seek debt relief. In a National Review op-ed, Hess praised DeVos’ proposal to base debt forgiveness on student income as “clearly better for colleges, taxpayers, and students”.

In a 2024 report co-authored with The Heritage Foundation, AEI argued that higher education institutions should not give faculty stipends to join or attend conferences of professional organizations because these groups make statements on political issues.

Funding

In the 1980s, about 60% of its funding came from organizations like Lilly Endowment, the Smith Richardson Foundation, the Rockefeller Brothers Trust and the Earhart Foundation. The remaining of their funding was from major corporations like Bethlehem Steel, Exxon, J.C. Penney and the Chase Manhattan Bank.

As of 2005, AEI had received $960,000 from ExxonMobil. Purdue Pharma, a company known as the maker of OxyContin, one of the many drugs abused in the opioid epidemic in the United States, donated $50,000 a year to the AEI from 2003 through 2019, plus contributions for special events, adding to a total greater than $800,000.

In the 2009 tax year, its four largest funders were a donor-advised fund, Donors Capital Fund ($2,000,000), Paul Singer ($1,100,000), the Kern Family Foundation ($1,071,912) and the Taipei Economic and Cultural Representative Office (TECRO), Taiwan’s equivalent to an embassy. Seventh largest was the US Chamber of Commerce ($473,000). In 2010, AEI received a US$2.5 million grant from the Donors Capital Fund. Foundations associated with the Koch brothers have been major funders of the Institute.

A 2013 study by Drexel University Sociologist Robert J. Brulle noted that AEI received $86.7 million between 2003 and 2010.

AEI received more than $1.6 million from the Charles Koch Foundation between 2011 and 2016, over $5 million from conservative donor advised funds DonorsTrust and Donors Capital Fund between 2012 and 2016, over $1.7 million from the Sarah Scaife Foundation between 2012 and 2016, $480,000 from the Bradley Foundation from 2012 to 2016, and $425,000 from the Coors Foundation between 2011 and 2016.

In 2014, the charity evaluating service American Institute of Philanthropy gave AEI an "A−" grade in its CharityWatch "Top-Rated Charities" listing. AEI's revenues for the fiscal year ending June 2015 were $84,616,388 against expenses of $38,611,315.

In 2017-2018, the AEI received significant funding from the Dick and Betsy DeVos Family Foundation, including $1 million in 2017.