Dioscuri Research Project
Eastern Enlargement – Western Enlargement
Cultural Encounters in the European Economy and Society after the Accession
DIOSCURI Final Conference
Institute for Human Sciences, Vienna
April 20-22, 2007
Roumen Avramov
THINK TANKS IN THE WORLD OF APPLIED ECONOMICS.
A COMPARATIVE STUDY IN EASTERN EUROPE
Work in Progress
Please do not cite or circulate without permission of the author
Only for conference discussion
Methodological remarks
Cases included in this study provide the ground for a double comparative
outlook. The substance of the knowledge produced by them refers to what is broadly
defined as applied economics. As understood here, this field comprises research
supporting different stages of economic policy’s decision-making, reform engineering,
and the shaping of analytical tools utilized for macroeconomic monitoring. Although
the support is eminently empirical, it is implicitly or explicitly related to a set of
theoretical paradigms. The goals are thus akin to those of another comparative
exercise in the Dioscuri framework: the study on the reception of New institutional
economics in Eastern Europe. In the cases under review, however, is embedded an
additional – institutional – dimension. Encounters portrayed occur in quite diverse
realms that give their imprint. There is not a single variable (the country’s cultural
peculiarity), but rather a bunch of variables that molds the particular stories. Most
important among them is precisely the institutional setting with its historical,
functional and organizational idiosyncrasies.
Demand for applied economic knowledge in Eastern Europe has expanded
dramatically during the transition. It has been fostered by the new needs of
Governments in a changing environment (macroeconomic stabilization; structural
reforms), by IFI’s conditionality, and by the requirements of the private sector in a
growingly globalized and liberalized world. The initial offer of adequate expertise, in
turn, has lagged behind, due to inertia of the educational system, or to institutional
rigidities. After a more or less chaotic beginning, the main players emerged, and
currently there is a relatively well structured universe of entities in the field.
All the cases approached by Dioscuri concern communities (“tanks”) whose
aim is to “think” about the ongoing socio-economic changes and the appropriate
policies. With a degree of generalization, this allows the use of the label Think Tanks
(TT) as a common institutional tag for the collection. Different breakdowns are
possible. Regarding the status, typical profiles are represented: NGO (Bucharest 1-5;
Warsaw in certain respects; Belgrade); government institutions (Sofia; Ljubljana); a
government sponsored research institute (Zagreb); a private training center
(Budapest); and a business consultant (Prague).1 The time frame covers the entire
institutional history of the TT. Three cases aside (Budapest, Ljubljana, Zagreb), they
1
In order to comply with the requirements for anonimization, reference is made to the cases with the
name of the corresponding city.
2
have been established after 1989, embedding the ambiguities proper to institutionbuilding during that period. Personal stories, of course, go beyond the great hiatus,
accounting for a long gestation of cultural contacts. The interviewed actors of the
encounters are archetypal for this particular cluster of TT: academic and “free-lance”
scholars, university professors, government experts, NGO activists, consultants,
expatriates…2
Without reaching a (unnecessary) complete standardization, the case studies
follow similar methodological paths and explore comparable patterns of cultural
encounters, in accordance with the agenda adopted during the previous stages of the
project. Nevertheless, some noticeable disparities remain. The position of the
author/interviewer, the status of the respondents, and the focus of the narrative are,
for instance, quite different. The point of view of a “founding father” differs from the
standpoint of a current manager; the outlook of an insider is not strictly coherent with
the implicit attitude of a former employee. Moreover, the institutional distinctiveness
is a powerful marker that often diverts the attention towards (often quite interesting)
issues that pertain more to the life/statute of the respective establishment than to
cultural encounters in the field of economic knowledge.
Further on, the sample’s heterogeneity is due to the fact that the activities of
the TT included are not entirely overlapping. Economics is the main subject of the
institutes in Budapest, Bucharest - 4; Ljubljana, Sofia, Warsaw, Zagreb; there is a
strong presence of political sciences and legal studies in Belgrade and Bucharest - 1,
2, 3, 5; Prague is a pure consultancy business; Budapest is an educational unit.
What is more important, the cases do not cover exhaustively all the centers of
applied economic research. Although TT of the type included have grown as
important focal points, the NGO are actually overrepresented. So is their emphasis
on policy/reform proposals and on public advocacy. Only two (Ljubljana, Sofia) out of
twelve TT are analytical units directly attached to policy-making bodies, whilst typical
entities of the same vain, such as central banks’ research departments, are missing
from the sample. Universities and academic institutes are also absent. These gaps
are partly offset by the well represented studies on short-term forecasting
2
In my comparative work I have benefited from an illuminating personal experience. My long lasting
engagement with the Centre for Liberal Strategies in Sofia provided an insiders’ view: the profile of this
NGO is very close to many TT reviewed in Field 3/2. Beside, I am one of the founders of the Bulgarian
case in the sample. My view on its institutional path is unavoidably sensitive to the dichotomy between
the initial idea and its eventual realization.
3
methodology, macroeconomic modeling, and regular surveys that are the core of
applied economic research in the missing areas too. A useful supplement of
information could also be found in “neighbor” Disocuri fields.3
Having in mind those initial remarks, it can be claimed that the evidence
gathered is highly pertinent. The interviews and their first-stage processing shed light
on both the shaping of a “convertible” applied knowledge in Eastern Europe and its
main vehicles. They permit to articulate some hypotheses that address the ultimate
goal of Dioscuri: to understand the ways economic cultures interact, influence and
hybridize
each
other.
The
paper
explores,
in
particular,
the
existing
differences/similarities that emerge, in a specific field, from the comparison among
different types of institutions and across the eight participating countries.
Path dependence and transfer of ideas
A glance on the stylized comparative institutional history reveals the
importance of TT’s longevity. Time credentials are, however, an asset and a liability.
They add certain respectability and patina to the entity. At the same time, a longer
institutional existence exacerbates path dependence and blurs the transfer of ideas.
It is usually supposed that a post-1989 launch means a clean starting point.
The members of those organizations had no way to escape from their personal
intellectual past, but the creation of a TT during post-communism (at least in the first
several years) always emphasized a symbolic intention to depart from the existing
tradition. Actually, the interviewee’s accounts, as well as the case studies, clearly
highlight differences between the newly born and the “old” institutes.
Broadly speaking, TT whose history transcends the 1989 turning point
(Ljubljana and Zagreb are best examples) seem to be more exposed to conceptual
inertia, to inter-generation conflicts and adjustment tensions. They have inherited a
culture of competition avoidance, a taste for Government-sponsored projects, a
stronger sense of hierarchy, rules of soft career promotion, and vast experience in
the old-style games with the former (socialist) government elites. The situation is
depicted as “an organizational culture tolerant, individualistic and democratic but with
the high respect of hierarchy… The Institute did not face real (market) competition
because scientist were operating within the country and publishing [domestically].
3
Relevant complements are provided by the Czech and the Serbian case studies from Field 3/case 3
(New institutional economics).
4
This [was a] special pleasant position of “sleeping beauty”. … It was the leading
scientific state institution under gentle protection of political umbrella.”
4
Such
legacies concealed future conflicts that matured in an intensively changing social
context and complicated the adjustment process. During the transition years
power/social-status
struggles
in
those
TT
frequently
overshadowed/infected
ideological and theoretical controversies; internal frictions eclipsed the healthy
confrontation of ideas with the outside milieu; generational cleavages were, as a rule,
more intense.5
It has to be noticed that an older institution is not intrinsically conservative. The
Zagreb case provides a good example of a center that has known periods of
innovative research during the previous regime. Many interviewees allege that the
institute has reached its height during the 1980s when the international interest on
self-management was intense. Although the system was an official brand of the
dominant ideology in ex-Yugoslavia, it has been perceived in other communist
countries and in the West as a potentially subversive economic experiment. Selfmanagement opened doors abroad, providing a generation of economists with
opportunities for contacts that were inaccessible to others. The reverse side of this
path path-dependence was felt later, when the economic policy’s agenda changed
completely. With privatization and stabilization coming to the fore, the former exotics
became completely obsolete, while its proponents remained still influential. The
conflict was unavoidable: it provoked a brain-drain from the institute (“the younger
generation was left alone because older economists retired and the middle
generation “disappeared” 6), an openly gradualist position in the mid-1990s, and a
delay in the adjustment of the research program. Vested interests and attitudes had
erected intangible institutional and intellectual barriers in the ongoing Transition.
Another variety of path-dependence could be observed in Ljubljana. As a
successor of former planning entities, the TT has inherited a more benevolent stance
towards long-term programming and coordination. This led to its easy going
involvement in development policies and into the complex EU-driven machinery for
national planning. The institute probably contributed to the adoption of a more
4
Zagreb case study.
The story is in no way peculiar to applied economic research: it is a pattern proper to more mature
institutions notwithstanding the scope of their activity. Similar evidence is provided, for instance, from
educational units. (Cf. the Hungarian case study in Dioscuri 3/1.)
6 According to another respondent from the same case study, “after the middle generation left [in the
late 1990s] the elder and the young generation collided”.
5
5
gradualist approach in Slovenia during the 1990s: a strategy which is, inter allia,
welcomed in the interview with a typically “old-fashioned” director in Zgreb.
The newly established institutions (Belgrade, Bucharest, Sofia, Warsaw) have
had fewer problems with the sluggishness proper to elderly structures. As a rule,
conversion was smoother and those TT proved to be more appropriate vehicles of
mainstream economics. They are not, however, completely immune to the same kind
of strains. A scenario related in one of the case studies (Sofia) shows how
straightforward is the take-over of a “reformist” TT when it comes to a Government
institution. The change of the political landscape in the country lead to a two years
long complete reversal of the initial ideology and functions of the TT, hijacked by
economists with pronounced statist, dirigiste or cosmetically modified Marxist views.
An outrageous political and ideological intervention was carried out, the new
management openly depreciated the warning signals about inconsistencies in the
adopted macroeconomic policy. Risks of hyperinflation were completely disregarded.
The staff‘s assessment of the financial gap and of the pressing need for a stand-by
with the IMF had to be circulated privately to Government officials, due to the
reluctance of the management to transmit the message. Imperative instructions were
given for more optimistic growth forecasts. It is not by chance that this Government’s
policy was followed by the financial debacle of 1996-1997, that the event was not
foreseen by the management, and that the TT’s analytical capacity was not
employed in the immediate tackling of the crisis.
In the foreseeable future, the new entities would, probably, face generational
conflicts as well. It is observed in one of the interviews (Warsaw) that the younger
vintage in the institute is more liberal than the previous one and than the “young
economists that study at Western universities”.
Obviously, by building up own
history, the Transition-created institution develop new path-dependence cycles.
A crucial dimension of the past are the relicts of intellectual dissension and
contacts with the West during communism. This facet of the personal and institutional
memory definitely matters, with a greater impact during the early years. One key
difference among countries consisted precisely in the degree of openness before the
Transition. Poland, Hungary and Yugoslavia had a clear lead in this respect. This
explains, in particular, why the isolation of ex-Yugoslav republics by the UN sanctions
in the 1990s is reported to be felt as an unfair and discriminating ostracism that
effaced the former leadership of some institutions.
6
The examples of Warsaw and Budapest clearly illustrate the initial
comparative advantage of having economist trained abroad and/or exposed to
regular contacts with Western counterparts. This specific stratum7 was familiar (to a
different degree) with mainstream economics and more often than not brought the
legacy of a tense emancipation from the surrounding Marxist orthodoxy. Those were
the main players in the first steps of the reforms. They gave a strong pro-market seal
to the new TT and influenced directly policy-making by entering politics or serving as
advisers.
Differences with formerly more isolated countries tended to vanish gradually,
due to the inflow of younger experts, to the opening of the society and internet, to the
spreading of uniform knowledge and policies, and the activism of neophyte zealots.
The effect of the unevenly distributed initial stock of mainstream knowledge and of
the different paths of reforms during the socialist regime, however, never
disappeared completely. It had to do with subtle nuances in economic thinking, with
the style and radicalism of each country’s reform history. The Yugoslav selfmanagement tradition, again, corroborates this point. Having considered the
economy through that particular angle proved to be a futile innovation and a true
deadlock from the 1990’s perspective.
TT as mainstream institutions
Mainstream TT dominate the sample.8 Those institutions are treated as
emanation of the emerging middle class’ ideology (“firmly entrenched in the society’s
middle class” - Belgrade), or – in a slightly different mood – as “Western cultural
outposts” (Bucharest) and “internal Western institutions” (Warsaw). Part of them
(some Romanian NGO) are directly oriented to the political scenery.
The dominantly mainstream stance comes from three sources: the agenda,
the tongue, and institution-building.
The research and advocacy agenda of most of the twelve TT closely follows
their funding’s structure. It is acknowledged that financing imposes standards, one
respondent declaring openly that “if you live out of the donors’ money you have to
7
Cf. the evidence from the review on New institutional economics in Field 3.
“Mainstream” is loosely defined as the set of views on economics that are rooted into the
neoclassical tradition and that promote pro-market solutions for the economic/social issues. “Liberal” is
deliberately utilized as a synonym, although I am fully aware of the different connotations of the two
terms.
8
7
play by their rules” (Bucharest). So, NGO are essentially donors-driven. No doubt
that a certain ideological/intellectual connivance among the leaders of the venture is
a prerequisite. But in what follows demand (funding) leads the offer (by TT): supplyside economics does not function in the sector. The matching of the projects’ profile
with funding displays neat trends in this respect.
The more accurate public account is provided by the website of Warsaw. A
breakdown could be summarized as follows: half (55%) of the resources are of
supposedly “liberal” origin (EC, World bank, OECD, private foundations, foreign and
domestic private sector, own funding); 20% come from development sources (UNDP,
GDN); the Polish Government provides 11% of the resources while other countries’
public donors account for about 4%. This structure is mirrored by 17 ongoing projects
devoted
to
EU
topics
and
the
same
number
broadly
defined
as
“reformist/developmental” (non-EU European countries, Russia, Ukraine, CIS
countries).9 On the publication side, the “Studies and Analyses” Series have
launched (during 2005-2006) 21 titles devoted to the post-Soviet space (CIS,
Ukraine, Moldova, Belarus) funded mainly by UNDP and the Polish Government, 17
to analytical topics (competitiveness, industrial, labor or fiscal economics) supported
mostly by the EC, and a dozen dealing with EU/enlargement/accession issues. At the
same time, 9 books published in 2006-2007 are on transformation in excommunist/non EU countries, and two on enlarged Europe.
This pattern is noticeable, as well, in other TT that unveil their financing
structure. Bucharest-1 is a typical advocacy NGO bringing into the public debate
themes that constitute the core program of its funding sponsors – a handful of
prominent American think-tanks and foundations, EC and EC-supported European
institutes, the World Bank, foreign embassies… The same holds true for Bucharest-4
which produces applied analyses by drawing funds from some of the sources just
mentioned, from foreign banks and from the employers’ association.
It is not surprising that interests in the sample converge. The panoply of wellknown topics promoted by the leading funding centers appear almost everywhere.
Reform building, transparency, rule of law, accountability, good governance,
corruption, competitiveness, regional development, taxation, poverty are high in the
agenda of almost all the cases. The favorite EC campaigns (Lisbon strategy,
9
As updated in January 2007.
8
Knowledge-Based Society…) are also unavoidable. Beside, most of the TT under
review produce regular outlooks of the current economic policy and of economic
trends. Some idiosyncratic touch appears only where domestic funding is available:
occasional studies are commissioned by the authorities (central, municipal, regional),
branch associations, or private firms. The comments and proposals are, however, in
line with the mainstream general principles, and with the EU accession/membership
program.
This disparate agenda is made congruent by the proposed mainstream
precepts about transformations in very different political contexts or issues, and by
the common tongue. The TT community (at least the one represented in the Dioscuri
sample) speaks the same language, although in some instances it is not explicitly
structured. Applied economics’ has forged its own vernacular – the standards to write
an economic outlook, to edit a policy paper, to prepare a sectoral (market) study are
to a great extent uniform. So are the messages embedded which overwhelmingly
pertain to the liberal repertoire. Pushing to extremes, this institute’s indirect influence
is credited for the fact that “there is hard to find single one non-liberal economist in
Poland” (Warsaw).
Institutional patterns exert their own influence. TT in Eastern Europe are built
and inspired by foreign models. American and European archetypes are often quoted
by the interviewees. There is a declared strive to integrate global nets. The NGO-like
TT make up the core of a “Transition industry” whose specific funding and
international networking are rooted in mostly mainstream-thinking Western
institutions. NGO import not only ideas and/or knowledge, but also PR and
fundraising strategies, organizational know-how, behavioral examples. The flexibility
and the effectiveness of those organizations as “intellectual translators” have much to
do with the prevalence of the neoclassical economic paradigm in the East.10 The
case with the private consulting businesses (Prague, Budapest) is even neater: they
are, let say, liberal ex-officio, and do not need special incentives to adopt a promarket posture.
10
It is true that the very character of the problems with which most of the TT deal with (for example
structural reforms) induce less conventional approaches. New institutional economics is frequently a
more attractive conceptual framel and many TT-economists, indeed, profess (neo)institutionalist
views. But let observe that NIE is – if properly understood - also part of the neoclassical paradigm. (Cf.
Field 3 -New institutional economics.)
9
It could be presumed that Government entities (Ljubljana, Sofia, in a certain
sense Zagreb) should be more statist-oriented. This is not always the case, however.
For one side, those agencies are (to different degrees) the national counterparts –
and de facto mediators - of the Washington consensus’ pillars and of the EC
bureaucracy. Frequent direct contacts with the main vehicles of external
conditionality have shaped a better understanding of market realities and
macroeconomic equilibriums. At the same time, the staff of these analytical units is
often trained in IFI centers, Western universities or think-tanks. Mainstream
neoclassical economics easily became the common theoretical denominator to the
entire applied economics’ community, no matter who employs the experts. According
to one of the respondents from a Government agency (Sofia) “there is almost no
colleague doubting that the market could solve any problem and who does not
oppose state intervention”. This echoes another’s interviewee textbook statement
that “markets generally guarantee efficient allocation of resources, beside some
special situations of asymmetric information, moral hazard, public goods and external
effects” (Warsaw). Market-based solutions delineate an intangible possibility-frontier
that cannot be transgressed. According to one confidence (Warsaw) “I am basically a
liberal economist… educated in such a way … that you cannot say certain [nonliberal] things, it is not right to suggest or propose those things, that some solutions
are from the start, without longer discussion, considered to be wrong, inappropriate
bad in the longer perspective. And we are stuck in this certain dogma”.
The Market is more and more treated in the applied economists’ community
(at least by the younger generation) as unquestionable common sense and political
correctness. The split now shifts from the ideologically tainted question of the size of
the state (in any event to be minimalized) to the more down-to-earth one about the
functional place of its residual. “The right question about … the state in the economy
is not “how much of state…”, but rather the question of “in what areas of the
economy” state should be engaged in” (Warsaw).
Biases introduced by Governments are of another sort. The authorities try (or
are forced) to utilize this analytical potential for Brussels-inspired planning tasks. It is
not by chance that according to a recurring complaint by experts from one
Government TT (Sofia) it should be employed on a larger scale for alternative policy
scenarios assessments rather than for routine forecasting and/or “descriptive” tasks.
Distortions from Government/politics come also via the interpretation (or the
10
misinterpretation) of the analytical results. The State bureaucracy is not able to digest
them and to transmute in a coordinated way the messages to different branches of
the administration. So, a generally pro-market thinking produced by experts is rarely
converted into adamantly market-oriented policies. Institutional interests prevail by
corrupting, manipulating, or simply disregarding the experts’ outcomes. When/if
produced, “what if…” simulations and macroeconomic options are considered by the
users as simple sets of figures, not as a basis for informed public choice. “The
general understanding is that nothing depends from the [TT], and that the key
structural policy decisions are taken on the political level by skipping the expert
advice” (Sofia).
Some of the NGO-type TT entities declare to fear a possible intellectual
“contagion” from the State and have adopted special thresholds for public financing
(Bucharest-4, Warsaw). It does not seem, however, that complete isolation is either
possible or desirable. Even the most liberal TT (i.e. Warsaw) rely in a significant
scale on direct of indirect Government funding. There are, as well, many indications
that a synergy between experts in Government analytical centers (Central banks,
Ministries of Finance) and private TT could produce valuable results in the field of
applied economics.
The overall pre-eminence of mainstream TT should not conceal marginalities.
From one side, mainstream thinking is itself marginal among the public
understanding of economic phenomena. There is an appreciable distance between
the economists’ chiefly liberal discourse and the statist or communitarian societal
attitudes. The rift is better captured by the case of the consultant company (Prague)
whose employees are described as part of a relatively thin enclave of globalized
actors in a globalized city that sharply differ from the rest of the country. The case
study refrains from “any generalization of the observations on the whole area of the
Czech Republic” and the conclusions are considered “more appropriate for the
Prague environment”.11
From another side, mainstream displays its own nuances and marginalities.
Situated along an virtual scale of the degrees of “libertarianism”, the typical discourse
of applied economists will appear as moderate and less doctrinarian compared to the
11
Prague case study.
11
one used by the vocal NGO with “extreme” pro-market positions.12 This is related to
the inherent character of applied economics. As one interviewee (Warsaw) put it,
“you can divagate in [economic] theory, but the practice is quite simple… this is a
quite universal knowledge… middle-of-the-road economics [neither theory nor view
of the politicians], because in practical economics, you reject some extreme views.”
Further on, even if New institutional economics is treated as a variety of neoclassics,
its proposals are as a rule more institutional-sensitive (sometimes one would say
tolerantly statist) and pragmatic in the social engineering sense.
On the bottom of the virtual scale stay TT gravitating to the social-democrat
milieu which are left outside the sample.13 Although they profess variants of
keynesianism and, strictly speaking, should not be referred as mainstream, their
public language (at least concerning technicalities of applied issues) is also gradually
“normalizing”: the impact of neoclassical thinking is so strong that entering the
economic field means – almost by default – to accept the mainstream conceptual
frame. The extremely powerful discriminating factor Inside this apparently consensual
sphere is ideology, which still determines (or conceals) a great deal of public choice
decisions.
What kind of knowledge?
The case studies definitely confirm that TT (in more general terms - Eastern
Europe) produce applied knowledge and explicitly shy away from economic theory.
This feature is consensually shared by all the interviewed.
It is assumed that theory14 is unilaterally transferred from the West, that in this
academic field “all of us are importers” and theory-takers. The exchange is conceived
as one-way, conceptual transfers, as exclusively outside-in. Any claim for originality
is discarded ex-ante; the East seems to be condemned to produce at most “good
interpreters or faithful followers” (Belgrade), never new paradigms. Certainty is
12
Among the reviewed cases, Belgrade is closest to this profile. The existence of libertarian NGO is
mentioned in several countries (Bulgaria, Poland, Rumania). They are inspired by Hayekian thinking
and adhere to well-known international networkings. Some of those institutes are approached in Field
3/3 (New institutional economics).
13 Those NGO are less influential on economic issues and more active in the political domain. (Cf. the
Romanian case study). Their preferred institutional model is the German, scrupulously shared, statefunding of political foundations.
14 Theory is understood as the set of fundamental principles supporting economic knowledge. It is this
set that is considered “untouchable”. Otherwise, “pieces’ of theory are tested in many applied studies:
those are partial conceptual explanations and competing model testings that do not question the
fundamentals enounced (in a very brod sense) by the neoclassical paradigm.
12
widespread that in the internationalized “universal science” no room exists for
theoretical contributions by small, peripheral communities.
Theoretical parochialism is rooted in the understanding of economic
knowledge as the outcome of competition among patently unequal players. In that
division of labor Western economists are the source of theory and methodology (a
fiercely competitive area with no chance for outsiders), while Easterners are confined
to applied economics (a more friendly and universal sphere). “In the field of economy
Westerners are by far ahead of us and we can keep pace as much as we manage.
They can profit from us by testing their theoretical assumptions in our environment
and from having assistance from domestic experts in addition” (Belgrade). Economic
research in the area is considered as deliberately inductive and circumstantial, its
value-added laying basically in the acquaintance with the domestic context and/or in
the test of mainstream hypotheses against the reality of transition. The insider’s view
(information) on that reality is considered as the most precious asset of local
economists. If recycled into a broader comparative perspective, it could eventually
become rough material for theoretical generalizations. Local contributions “could
become a theoretical fact only if someone includes the outcomes in broader
comparative studies on Eastern Europe… we are accumulating unique knowledge on
the turbulences accompanying the building of a market economy from scratch, or on
the effect of large-scale and rapid structural reforms. Those are would-be
contributions for a theory of future structural reforms” (Sofia). The game with
analytical tools, in turn, is looser. Sophistication of instruments is acknowledged as
unavoidable due to the uncommon situations faced, and to the troubles with existing
data. Imagination is needed in order to adapt the standard requirements for
econometric tests to the available figures.
“Theoretical deficiency” is related to the sociology of a restricted scholarly
milieu as well. There is a general complaint about the absence of competitive
scientific environment, and of impartial peer review. In many areas no critical mass of
experts is available. Publishing abroad is top priority, considered as a personal
endeavor and, as a matter of fact, the websites of the TT display occasional cases of
publications in refereed journals. As a rule, however, the opinion is that research
output does not withstand international reviewing. Interviewees rate the bulk of the
publications as substandard, or acceptable for medium-class international journals.
Although papers abroad are highly prized, the career incentives to publish in
13
international reviews are not high. Domestic criteria still prevail in the hierarchy
promotion.
Encounters and counterparts
The case studies include numerous individual accounts of encounters
between the East and the West in the field of applied economics, under the umbrella
of diverse TT. We are far away from the sacralized contact during the communist
period that represented a serious asset in the immediate post-1989 events. Rapidly,
intercourses became routine, occurring in very different forms and institutional
settings. As it is now, professional experience and training abroad are widespread.
Foremost among the mediators have been the IFI that molded the predominantly
liberal attitudes among the expert community. The well-known phenomenon in
economic history of a “doctrinal conditionality” 15 is captured by interviewees, one of
them stressing that “when you are in debt you become less independent in thinking
and leading the economy” (Belgrade). Next to this classical channel, the variety of
the counterparts went growing. They include a plethora of archetypes, ranging from
academic scholars, through bureaucrats or ideologues/propagandists, to business
consultants. Each category possesses its own style, messages, tools, and impact
factor.
The usual conflict reported in the case studies concerns inadaptability of
imported experience to local conditions. Complaints abound about “standard models”
that are supposedly transposed without any critical assessment of domestic
peculiarities. The main advantage of Eastern experts is seen in their insider’s
knowledge: even more so because applied economics is considered as locally
sensitive in contrast to the universalism of theoretical economics. Major source of
proud are the cases in which arguments for domestic models have prevailed and
have been accepted by the foreign counterparts.
All this mind-set is reminiscent of a neo-colonial pattern of knowledge transfer
where the two parties are considered as intrinsically asymmetrical. A chronic motive,
expressed in different wording, is the feeling that Western experts depreciate their
Eastern counterparts. Experience is reported of ““second league” bad consultants
Cf. Roumen Avramov. Advising, conditionality, culture: money doctors in Bulgaria, 1900-2000. –In:
Marc Flandreau (Ed.). Money Doctors. The Experience of International Financial Advising 1850-2000.
Routledge. 2003
15
14
engaged by the EU… Local experts and their knowledge are first evaluated as
incompetent, but the same is latter used by consultants for their own gain and
promotion” (Zagreb). Such statements reflect a widespread, but somewhat epidermic
view. What is certainly confirmed from immediate and more distant past experience
is that more complex problems in the host country tend to attract the attention and
the action of higher quality foreign experts.
At the same time, it is widely acknowledged that the attitude assumes that
intellectual influence is by and large mutual. To what extent a useful blend will be
attained depends from many contextual factors: foreign experts’ commitment,
personal motivation from both sides, the degree of reciprocal curiosity, presence/lack
of prejudices, the readiness of local actors to exploit the expertise offered… “Foreign
experts are usually people that come, write down the equations and leave.” The
model’s coefficients are rarely estimated. ”When the consultant does not face a
particular interest [from the local side] he simply takes the money and leaves. We
remain with the equations and with the unspecified parameters. If there is no active
attitude from local counterparts [foreigners] minimize their effort and do not go
beyond a transposition of the ready-made product. If questions and doubts are
explicitly formulated, the outside experts become more active as well (Sofia).
Effectiveness of different channels of influence is also dissimilar. Interviewees
privilege the flexibility of private TT and, above all, of the business. As one
respondent (Sofia) declares, “much more ideas from the West have been absorbed
through the business, not through the administration. Bureaucracy is rigid, it resists
and only imitates, while permeability in the business’s encounters are two-way.”
A circular pattern of intellectual transfer is proper even to hard constraints
related to external conditionality. It is well known that important portions of applied
economic research on the East are performed by IFI.16 The entire adequate statistical
infrastructure in many places was build under the monitoring of foreign experts. The
reform packages supported by this knowledge are, nevertheless, not purely imported
products. They bear the traces of compromises and/or of ambiguous games of
insiders that succeed in capturing the outside pressure in order to impose items of
16
This has been more often the case during the first decade of the Transition than actually.
15
their own agenda.17 The final outcome is always more complex and hybrid than a
doctrinal manifesto.
A significant trend emerging from the encounters’ accounts is that, in the
course of transition, the “West” becomes a more nuanced symbolic concept. The
preconceived, monochromic and idealized concepts about capitalism, inherited from
the communist period are splitting. Understanding of the quintessence of capitalistic
behavior is evolving; images that superpose and clash with each other are growing in
complexity. They include old (fading out) clichés, those that permeated the public
scene recently, as well as representations based on personal experience with the
West. This subtle mix reconstructed from a myriad of direct encounters is described
in the Prague case study. “The expectations are not any more a product of the
communist legacy or of the lack of experience with capitalism. They are much more
structured by global context and by clear images of capitalism formulated after the
Velvet Revolution, spread and popularized through newspapers, university lectures,
specialized and expert magazines. And what is… striking for the Czech actors it is
the absence of the encounters with Western world that they had in mind. Actually, the
Czech actors meet the reality of a Western world which is in some aspects
incongruent with the ideal typical image that they have already constructed”.18
Of real importance for the richer representation of the West are the partners of
the corresponding TT. Inspiration/financing is coming from American sources, from
German Government-sponsored foundations, from British think-tanks, from French or
pan-European institutes. The respondents narrate how every particular associate
relays its own institutional culture (point of view) to the Eastern organization. Yet,
after the first impulse, the trajectory is not necessarily straight and the initial model
often bifurcates. Choices have to be made among alternative patterns: the shift from
French to an American training culture (Budapest) is a good example.
Spreading of a subtler point of view about the West is probably better captured
by the cases reporting contacts in everyday business. For the consultant (Prague) a
mix of different “Western” cultures is quite visible: one style (Italian in this instance) is
considered as even more “Eastern” in some respects than the local (more akin to the
German). Three layers of economic culture (Czech, Italian, German) are
17
The Sofia case provides an example of how a domestic TT can softly shape the messages
“returned” by IFI.
18 Prague case study.
16
amalgamating. In this interplay, proto-economic models reappear from oblivion, such
as the traits characteristic for the Austro-Hungarian economic tradition.
Evidence demonstrates (on a very small scale) that the image of the East is
also subject to change. The negative connotation of Eastern economic culture seems
to be reversible in certain aspects. In a seemingly overoptimistic mood, the case
study concludes that “during the post-communist period, the Czeh Republic was
typified as East in terms of an unknown, rather dangerous environment,
characterized by an underdeveloped legislative frame, heavy corruption and
potentially arising problems with communication. Nowadays, the general perception
of the Czech environment has been [positively] transformed.”
Finally, the interface between bureaucracies that accompanies the EU
accession (and eventually the membership) makes its own contribution to the
multidimensional cognition of the West. Government structures tend to reduce
differences among various cultural areas of “old Europe” essentially to dissimilar
administrative models, sectoral policies, and organizational profiles. This is definitely
a bleak understanding of cultural differences, but it adequately corresponds to the
administration’s mentality.
Looking at the key notion of surprises introduced by Dioscuri, one is inclined to
admit that the set of case studies under review substantiates a narrowing room for
cultural shocks. Stories of the older generation are often reminiscent of “revelations”.
For the younger one, dissimilarities are accepted as granted whilst – at least for
those working on applied subjects – there are fewer surprises concerning the
methodology utilized, the style of the presentation adopted, and the messages
delivered by Western counterparts.
Communicating ideas
Transmitting the messages in the domestic debate is problematical for many
of the TT dealing with economic policy. Difficulties arise partly from organizational
shortcomings. It is considered that Eastern TT are not efficient enough and the
answer to this issue is often sought in details of the institutional culture, in marketing
or PR measures.
A deeper cause, however, is the degree of intellectual independence of the
think tanks. Those that are perceived as Governmental organizations lose a great
deal of their credibility: impartiality is of crucial importance not only for the TT well17
being, but also for the clarity and the suitability of its proposals. Adopting a low-profile
strategy, exposing ties with political forces or demonstrating lack of autonomy vis-àvis the Government undermines reliability. Several interviewees relate stories of lost
institutional reputation (Zagreb, Ljubljana, Sofia) due to outside interventions in the
agenda, the conclusions, or the interpretation of applied studies. The price could be a
missed warning signal, a biased communication, irrelevant messages.
Ultimately, the question boils down to the intellectual weight of the respective
TT. A possible approach rates the institutions according to their effect on the public
debate. It is apparently surprising to hear a respondent asserting that his renowned
TT has an insignificant influence on Polish economic policy. From one side, the
statement is consistent with the observation of another interviewee from the same
organization that “the current level of understanding of economic ideas in society
[has barely progressed and] is similar to that of five or then years ago”. But from
another, NGO’s influence is subtler: the later respondent is also exact in saying (in an
exaggerated metaphorical tone) that it is to a large extent this TT’s merit that
nowadays there are only liberal economists in Poland. A correct appraisal should
recognize the appreciable role of TT for the overall intellectual climate. This is evident
for entities dealing with specific socio-political projects, or acting as advocacy groups,
notwithstanding the fact that in the eyes of their leaders, the respective TT’s
significance stands always higher than for their staff and - most of the time - for
outsiders. The divergence reflects quite different factors: trivial human vanity; direct
contact of the leaders with the “consumers” of the product; internal communication
setbacks…
Transmitting
the
messages
is
problematic
due
to
the
demand
quality/requirements as well. The usual customers of applied economic knowledge
are Government institutions, the media, politicians and the general public. Every one
of those categories possesses its own filter which distillates the content of the
messages delivered. It is pointed out, for instance, that in quest for headlines
journalists often miss the core of the information (or of the key findings). “They sink
into technicalities and are not able to generalize” (Sofia). With respect to politicians
TT are said “to be “rectifying”, rather than solicited, institutions about specific issues”
(Bucharest-4).
Neither the impact of organizations directly (functionally) involved in policymaking is automatically granted. Proximity to power centers does not necessarily
18
mean effective manipulation of their decisions. Rather often advices are not followed
due to political or other considerations. It is frequent that authorities make use of the
TT as devices for producing drafts of marginal importance and/or for symbolic
purpose.
The administration is unable to process efficiently more sophisticated expert
analysis: the shortcoming is structural, and it is related to intrinsically differing points
of
view.
Officials
are
inherently
shortsighted
and
trapped
by
vested
institutional/political interests, while the applied economist’s perspective privileges
the long term and the general-equilibrium (as opposed to partial, immediate) effects.
A typical complaint by interviewees from Government TT refers to the inconsistencies
among different policies and to the lack of coherence between the objectives of
various branches of the executive. Positivist economics clashes with everyday
policy’s goals, strategy fights with tactics. Theoretical fundamentals embedded in
experts’ recommendations are misunderstood or skiped. “The main problem is with
lacking mechanisms for integration between sectoral and macro-policies” (Sofia).
Hope is voiced that experts will have the chance to enforce a more suitable
coordination and a longer-term thinking through the integrating role of the newly
instituted EU planning/programming techniques. Skepticism remains strong,
however, being supported by testimonies that, in fact, TT do not test alternative
policies, and decision-making remains an eminently political (not professional)
process.
On another level, individual commitment is crucial for the ideas transferred and
for the strength of their impact. TT’s world is a highly personalized one. The leaders
are somewhere depicted as “powerful social entrepreneurs” (Bucharest) and they
actually imprint their mark on the respective institution. Stories of “founding fathers”
are recurrent among the case studies, although with different styles or outcomes:
public gestures of disagreement with compromises vis-à-vis the original radical
platform (Sofia, Warsaw); departures from the initial idea (Sofia); successful
development and transformation of the original project (Budapest). Every
personalized realm is prone to unsystematic shocks and it is not surprising that the
importance of random encounters with Western counterparts is stressed: “it is
noteworthy how important was one single crucial contact for the leader and founder
19
of the organization”.19 TT are often built around personal networks whose ideological
preferences could be easily traced back to fortuities of biographical episodes. The
fortune (and the message delivered) of a think tank is closely associated with its
chair’s social/public status. To the extent that most of the organizations in the sample
host experts that have been counseling the Executive or have served as Cabinet
ministers, the political exposure (vulnerability) of those TT is fairly high. Accounts
about disputes in Government TT with supervising bodies or with insiders abound.
Divergences are formally on ideas, but backstage generational and power struggles
are transparent. The NGO, from another side, try to maintain an equidistant dialogue
which often leads to colorless and oportunistic compromises.
The point is that applied economic research exercised in communities like the
depicted ones is unavoidably a sensitive activity whose messages are strongly
influenced by the socio-political context. TT are about ideas but ideas make their way
in a convex social space. The interviews and the case studies are plenty with
examples that illustrate the intense internal dynamics of the cultural encounters.
There are hardly rigid patterns in this movement, but the trajectories are subject to
two main conflicting forces: the powerful linear impetus of cultural adaptation to the
West which is usually embedded in the initial project; the cultural resistance and
path-dependence tending to divert reality from the original scenario. The gap is
produced by circumstances, by the gravitational field of institutional interests and –
not rarely - by misunderstandings and prejudices. Business logic plays an increasing
role in this respect.
Market shares
A trend of commercialization is clearly noticeable and narratives on market
shares are pervasive in the domain of applied studies. Growing awareness exists
that this area of knowledge becomes very competitive, that a business strategy
should be followed, and comparative advantages exploited.
The marketplace is a very particular and segmented one. A visible group of TT
in the sample behaves openly as business entities. Prague and Budapest, for
example, are authentic consulting/training firms. After an adjustment period they
have found their niche, calibrated the scale of their activities, and tailored their
19
Bucharest case study.
20
produce. The firms are small compared to Western standards but some of them are
appreciably larger than the Eastern competitors. Those TT are clearly demanddriven, and their survival depends entirely from the successful capturing of the needs
of a specific segment in the private sector.
A number of NGO stick to a similar line, although oriented to another type of
demand. Warsaw, the Romanian TT and (to a certain degree) Zagreb pursue a
business-like policy in a semi-public, opaque and occasional market where
networking, contacts with Governments, IFI, or European structures, and ties with
influential foundations in the USA and Europe are of prime importance. Those
entities do not refrain from pure consultancy and the prevailing opinion is that they
should develop their own consulting arm. The specifics of the output offered (reform
packages, stabilization measures, sectoral deregulation plans…), however, forcibly
orient them towards public policy issues.
The case with Government-owned TT is of a different specie. In general terms,
their research agenda is imposed by the need of the administration, although some
discretion is left to the staff: the command line is never strictly hierarchical and
personal curiosity still matters. “The lack of policy oriented tasks, declares one
respondent (Sofia), leads to studies that are mostly driven by individual interest and
curiosity. The fun is to write equations, but it would be much more interesting to have
a big problem on the table and to assess different options”.
During the transition years public institutions became a reserve – as well as a
transfer center- for experts versed in applied economics and having access to
relevant information. It is all the natural that part of them capitalized those assets in
the private sector, or pushed for commercialization of the (semi)public institutes. If
open privatization is not performed, ambiguous arrangements - as elsewhere in the
state domain - emerge. An example of the former is Budapest which completed the
entire cycle from a joint sock company of state banks (funded by the Central bank)
through a full-fledged private company acquired via a classical management buy-out.
The latter case is partially illustrated by Ljubljana and even better by Zagreb, whose
40% non-Government financing are (probably wrongly) pointed out as a shield for
certain operative autonomy. In fact (some respondents observe it) the institute relies
on the leniency generated by secure orders “from above” or on contracts that are still
arranged (in one or another way) with the help of the authorities. It “never bothered
about competition”. This TT is perceived by many as a typical public entity – hesitant
21
to take the risk of breaking completely the ties with the state; not knowing (not using)
properly its asset; destined to be privatized (commercialized) if desiring to survive in
a competitive environment.
Greater exposure to the market apparently transforms the TT into producers of
specialized applied knowledge, conform to international standards. A significant side
effect of this trend is the enhancement of their place as mediators in the West-East
transfer of economic know-how. Case studies trace a new contour of intellectual
transfer which is growing in importance: active and successful institutions (Warsaw,
some Romanian TT) expand locally (regionally) and explore seemingly promising
avenues
of
organizational)
East-East
is
networking.
drawn
from
From
Eastern
one
side,
experience
sister-institutions.
From
(including
another,
clients/partners are looked for in the East.
The process is both conceptually and economically comprehensible.
Re-
exported are messages and models that do not differ substantially from the originals,
but a touch of local expertise is supplemented to them. Idiosyncratic “transition
experience” and political economy of reforms are sold as worthy value-added to the
ready-made universal recipes for market transformations. Own history is capitalized.
Those advantages are, however, not permanent: fashion changes together with
economic success. If the Polish case, for instance, was a hit in the 1990s, the
eventual trivialization of its problems seems to undermine its appeal. Meanwhile,
other solutions like the Currency board arrangements in the Baltic republics and in
Bulgaria captured the interest. Exotic success stories sell better.
The economic rationale for the Eastern expansion is easy to formulate. It is
motivated by economy of scale considerations, by a natural impetus to leadership
and to growth after a certain threshold is attained, and/or by the fund cutting of
Western partner TT. There are not other but commercial considerations in exporting
market-oriented reforms in remote Central Asian autocracies or captured states like
Belarus or Ukraine. Warsaw has taken advantage of this opportunity in a large scale
by showing how sufficient funding for such projects is available from development
organizations (UNIDO) or from institutions driven by local/regional political interests
(like the Polish Foreign Ministry). The success of the policies promoted is, evidently,
far from secured. Reception of the knowledge transferred in the East is also
problematic. The only possible (marginal) conceptual gain is new insight about
22
cultural encounter of standard applied economics tools with bizarre and atypical
cases.
If a “run to the East” seems a promising commercial venture, anchoring within
the EU research space is a strategic issue. Only few TT from the sample (Budapest,
Warsaw) are in a posture to compete - and this only in restricted areas - on equal
footing with Western counterparts. Their research agenda continue to be split
between Transition and European issues. A complete reorientation towards Europe
is still not possible, Transition remaining an asset with potential to be exploited in the
mid-term future.
Concluding remarks: hybridity
It was assumed at the start of this comparative study that a substantial part of
the observed “dispersion” of cultural encounters in the field of applied economics
among eight countries could be explained by two independent variables: national
specifics and institutional patterns of the performer. The initial hypothesis was that
they have different weight, the institutional variable possessing stronger explanatory
power. At the end of the day this conjecture seems largely supported by evidence.
Undoubtedly, the general historical background plays a certain role. Differing
traditions of encounters during the communist period were essential for the style, the
swiftness and the quality with which applied research in each country entered the
Transition. But this factor is gradually losing significance for the content of the
activities. Beside, it is definitely of lesser consequence for applied studies than for
deeper strata of economic knowledge. What still (and increasingly) matter in the
“geographical” peculiarity of the encounters are the location, the size and the
potential of the national economy. As a rule, countries situated closer to the core and
better integrated to the EU have more chances to host TT that are competitive in the
European framework.
In turn, the narratives of the respondents and the case studies clearly outline
the prime importance of the organization’s profile, of its funding and networking. The
agenda of the entities represented in the sample is largely dependent from implicit or
explicit sets of encounters with Western counterparts. The main discriminating line
among TT passes along their organizational taxonomy, not along nationality. The key
brands (NGO, Government analytical units, consultants) could be identified in each
and every one country: uniformization and specialization in this universe are patent.
23
Sociology of knowledge is thus more pertinent than intellectual archeology for the
understanding of the transfer of ideas in the field of applied economics.
A final note is needed on one of the central concepts in Dioscuri’s ideology:
hybridity of the knowledge produced.
If reform prescriptions offered by TT are considered, the spectrum of the
underlying fundamentals is wide. According to the observed dominantly mainstream
stance, the measures proposed are usually on the pro-market side, but space is left
for pragmatic orientations. Social engineering allowing some state intervention is
accepted in many packages. The NIE paradigm is frequently (unequivocally or tacitly)
interiorized. Doctrinal coherence should not be expected from those exercises in
economic policy modeling/promotion. Rather the opposite, in most of the cases
eclecticism is present under the form of theoretical inconsistencies, and/or as the
successive adoption of contradictory conceptual schemes. This mix could scarcely
be interpreted, however, as the outcome of intercultural encounters: it is a blend of
views that are extensively represented in the West and have already permeated
applied economics research in Eastern Europe as well.
When it comes to macroeconomic and to more positivist studies, the
landscape is even more conventional. What can be found there are sets of tentatively
adequate models, diverse analytical tools, econometric fits of different quality,
contending (inappropriate or acceptable) conceptual frames, implicit ideological bias
or misunderstandings of the theory applied… All those symptoms are not hybrids
produced by the interaction of dissimilar milieu and intellectual traditions. In one way
or another, they surround every decent economic research. Applied economics is
perhaps the area most distant from the concept of hybridity introduced within the
Dioscuri project.20 As one respondent (Warsaw) put it, “applied economics is
universal knowledge – it is less pluralistic than theoretical economics where you can
find competing schools of economic thinking”.
Nevertheless, hybridity in the sense of a mix of two distant economic cultures
cannot be entirely discarded. Many of its signs are present in the discussion above.21
The quality and the requirements of applied studies’ local customers, for instance,
20
Field 1 and Field 2 scrutinize economic behavior which is naturally subject to the mix of different
cultures. Case 1 of Field 3 (Educational units) allows (if it is not the rule) eclectic teaching and Marxist
relicts. Case 3 (New institutional economics) is about a school that is transferred ambiguously (i.e in a
hybrid way) to the East.
21 Cf. Encounters and counterparts.
24
align offer to domestic standards. The organizational promiscuity of TT is a
hybridizing factor that corrupts or distorts the messages. It was observed that the
circular flow of information/precepts proper to foreign conditionality is hybrid by
definition: elements of both cultures are lost/added in translation. This is all the more
the case when it comes to re-channeling of Western messages in the East (Far-East)
by local TT. A permanent source of hybridity is the existing data supporting applied
research in the East. Its lacunas and inadequate (even if improving) quality incite the
deal of continuous theoretical compromises and crossbreeds. Faced to the existing
deficiencies, many economists gives up and “tries to circumvent econometrics….
After confronting a standard textbook with the available data, he/she rapidly
concludes that [standard] econometrics does not work with this information” (Sofia).
Not to mention the blend of economic cultures in everyday business where solutions
are tailored and personalized according to practical, not theoretically consistent,
considerations: “transmitted knowledge is not explicitly anchored in any economic
tradition” (Prague).
Beyond those heterogeneous and somewhat intermittent sources, lays a much
more fundamental dichotomy that is related not to technicalities or to the sociology of
the mediating agents, but to the essence of the Western economic culture itself.
Europe, in its actual configuration, is a profoundly hybrid cultural topos which
combines, in an often traumatic way, two conflicting principles – the statist, dirigist,
regulationist and interventionist philosophy; distinctly liberal and free-market values.
The former are entrenched in the EU bureaucracy’s functions and activities. The
latter are realized in the most far-reaching projects, such as the single market and
the eurozone.22 With its double face Europe delivers ambiguous messages and the
Eastern mediators easily succumb to hybridity, if not to tasteless eclectics.
Confronted to this confusing source of inspiration, they are free to make pragmatic or
opportunistic choices by mixing or by opting for what is more akin to the local
idiosyncrasy. Whatever their preference, they are secure to found a mirror image of
the chosen option somewhere in Europe.
22
The split has national connotations as well. The dirigist face is rooted in a French tradition, while the
market side is mostly related to the Anglo-Saxon one.
25