Discussion by Tom Coupé, EERC-Kyiv

The three papers presented here all have been written by, and present the view of , people who

administer the programs that were established to improve economics education and research;

Robert Campbell as president of the international advisory board of EERC, William

Lyakurwa as Executive Director of AERC and Ramona Angelescu and Lyn Squire as

representatives of the Global development network. My discussion is written from the other

side – most of my comments are based on my 3 years as assistant professor at EERC Ukraine.

Some of my comments will be based on my experience as a participant in the research

competitions of GDN. I will also refer to what I think we can learn from the African

experience described by Dr. Lyakurw a

Despite the fact that it is now almost 15 years since the Soviet Union collapsed and Ukraine

became independent, and despite the fact that EERC-Ukraine now exists for almost 10 years,

the state of economics education and research in Ukraine is still far from what it should be.

Every year during the admission exams we see that many students of the so-called economics

departments have no clue about what economics really is. They still confus e economics with

marketing, accounting and management. The few tha t have had econometrics often studied

some theoretical concepts but never had any practical exercises. And students still think that

cheating on exams is acceptable and that you write a research paper by copy-and-pasting from

what is available on the internet.

The above mentioned problems are structural problems which are unlikely to be solved

quickly. I have two examples to illustrate this: I proctored an exam for undergraduate

economics students at a university that enjoys the reputation of being one of the best

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universities in Ukraine. Despite this, the professor was not intervening when students were

talking or looking at their neighbor’s sheets. Even more striking, students were allowed to

leave the classroom in groups, to have a smoke in the corridor. Second, a ‘Candidate NAUK’

(local version of a PHD) told me that during the defense of her thesis, one of the jury

members had told her that she should not report the standard errors of her regression

estimates. Both examples point at the core of the problem – the average professor has neither

the skills nor the attitudes that one would expect and require at a Western university. As a

consequence, the young aspirants have bad role models and old problems linger on.

MA programs like NES and EERC-Kyiv are successful in training their students in modern

economics and in changing, to a large extent, their attitudes towards cheating and

unprofessional behavior. And in that way, these MA programs have some influence on the

business environment where their graduates work. They have been very successful in

influencing the think thank sector – in Kyiv, the think thank sector is dominated by EERC

graduates. To what extent the think thanks have been able to influence the policy makers, is

more difficult to determine. Another way their graduates influence policy is through their

jobs at the offices of international institutions like the World Bank and the IMF. Direct

influence through graduates working for the politicians in parliament or in the government is

rather exceptional not in the least because of the low pay in the public sector. But even those

who, because of patriotic reasons, decide to work for the government are unlikely to use the

more advanced methods they study at the MA programs. Ministers don’t require regressions;

summary statistics will do as well.

The low pay for public sector workers also affects the success of the MA programs in placing

their graduates as teachers at local universities. Of the students that graduated from EERC-

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Kyiv and decided not to go for a PHD abroad, 5 at most are teaching at a local university. F or

those who went for PHD, the only place in Ukraine to go back to is EERC-Kyiv given that all

the other economics departments don’t pay more than a couple of hundreds of dollars to their

faculty members.

The low salaries paid by the universities make the existence of grant competitions like GDN

or EERC crucial. One of our alumni told me he would quit his job at a university if he had not

been successful in a grant competition. Grant competitions are thus important for maintaining

capacity. I think however that grant competitions and capacity ‘building’ should be separated

as much as possible – if we have a regional competition, quality should be the only factor to

determine who gets and who does not get a grant– it is not a good idea to give a grant to a

mediocre proposal of a citizen of country A, a country which has no capacity when there’s a

better proposal written by a citizen of country B, a country which has already some capacity

built up. Such a policy creates anger, discontent and a feeling of unfairness, among the

participants of the grant competition. If one wants to build capacity in country A, it’s in my

mind better to organize extra training sessions for country A’s researcher so as to make them

competitive in grant competitions. One specific way to build capacity is through MA

programs: alumni from the MA programs in Kyiv and Moscow typically do very well in the

grant competitions.

Because of the low number of MA graduates choosing for a career in academia, the MA

programs probably have had much more impact on their countries’ economics education

through their outreach efforts than through their graduates. Student conferences, outreach

conferences, seminar and summer schools have an impact on those who have already self-

selected into the profession of teachers and are likely to continue teaching. MA graduates in

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contrast interested in teaching go to the West for a PHD. Therefore, one should not expect

that creating a lo cal PHD program will lead to a substantial improvement in the level of

economics education in a country. Indeed if the level of such a local PHD program would be

of Western quality, its graduates would compete with Western graduates for Western jobs and

Western pay. Just like the MA’s they would not become low paid professor s at local

universities.

What would be the advantages of a local western-style PHD? It would strengthen the research

environment; professors would have an opportunity to teach more advanced courses, the MA

graduates would have an opportunity to get a good PHD degree in their own country. But if

they would want to work in academia after their PHD, going abroad would still be the most

likely option. Rather than starting a Western-style PHD program with PHD courses I am more

in favor of upgrading the existing aspirantura education. The ‘Joint Facility for Electives’ of

the AERC seems to me an excellent example , bringing aspirants from different regional

universities together and teaching them up-to-date contents and techniques. Combined with

research workshops where thesis proposals are presented, progress is monitored and theses are

defended, again like in the African model, you get a model that will revolutionize the level of

educators. T hat there is a demand from local educators to increase their knowledge can be

illustrated by the application statistics for 2 summer schools we will organize in July, together

with EERC Moscow and the European Economic Association. For each available place, we

had almost 3 applicants.

Rather than starting up a PHD program some might consider scaling up the efforts to build

capacity in economics education and research by opening more MA programs in other

regions. Here are some thoughts on this.

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First, the existing MA programs have been successful in creating centers of excellence in

economics education and research in Ukraine and Russia. Without doubt similar centers of

excellence can be created in other countries. However, none of the existing centers in the C IS

have reached the stage where they are able to be sustainable without the help of foreign

donors. EERC Ukraine has been successful in obtaining some funds from local oligarchs. The

ironic thing here is that the oligarchs that now support EERC are the oligarchs who were

opposed to the Orange Revolution. The orange government in contrast so far did not show

any interest in funding MA education and research in economics.

The local funds so far, however, are not enough to sustain the program: for the next two years,

about a third of EERC Kyiv’s budget will come from local donors. If, in order to support the

new centers, the existing donors decide to shift money from existing centers to new centers, I

fear that we will get more economics education and research in say Georgia and Kyrgyzstan

but (much) less in Ukraine and Russia.

Second, if the donors decide to create new centers, they should seriously consider giving

endowments to these centers rather than providing them with yearly, three-yearly or even

five-yearly grants. None of the existing centers in the CIS has been able to grow out of donor

support and it would be very optimistic to hope that new centers would do better. In Europe,

MA programs are mainly financed through government support, in the US mainly through

government support or through endowments. CEU in Hungary has an endowment of Soros;

CERGE gets quite a bit of government support. Nobody however expects much financial

support for MA education from government s in the CIS in the near future and philanthropy is

still scarce and very random, definitely not something one would want to count on 1.

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The support of the Kazakh government for an economics PHD seems to be an exception.

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The only way for donors to be sure to have a long lasting impact is by providing an

endowment to these institutions. Such an endowment would focus life at these centers on

quality and growth, rather than on survival. The annually returning question of ‘do we have

enough money for the next two years so we can enroll a new class rather than start shutting

down the program’ could then be replaced by the question: ‘how do we improve the quality of

our teaching and our research’. Focus on the second question would make it much easier to

attract, retain and motivate faculty and staff.

I wonder why donors are so reluctant to provide endowments – they either are convinced that

the problems they help to alleviate are temporary, that the projects they start will solve the

problems quickly or they hope somebody else will take over. I really would like to see some

statistics on the survival changes of donor-funded projects that have been started without an

endowment. Recently, USAID and the Soros Foundation gave $15 million to establish an

endowment for the American University of Central Asia. I hope this is a first sign that donors

understand the importance of endowments for educational programs.

Endowments would make it easier to retain faculty members, which is especially crucial since

the faculty members are the ones that have to build the new institution. People that come for

just one year have little incentives to invest time and effort in the improvement of the program

– by the time they know the program and see how it can be improved, they are already

thinking about their next job. And why would they write grant proposals to get additional

funding for teaching, research or outreach? By the time the grants gets approved they will

already have left the program. Longer term stays indeed leads to a feeling of ‘ownership’, the

faculty members become residual claimants, hence have interest in strengthening the program.

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If the donors would prefer not too give an endowment, a recommendation I would like to give

to the new centers is to start as ‘cheap’ as possible , that is combine some Western educated

PhDs with ‘upgraded’ local teachers. The latter, while not attaining the level of the Western

PhDs, can still provide a reasonable level of quality education. They can be paid a wage that

is high relative to local standards but low relative to international standards which makes long

run sustainability much easier to achieve. Moreover, donors should be flexible in terms of

how fast the money they give should be spent. Now, often money has to be spent within a

given period which is the best excuse to waste money.

To summarize, in my opinion, the efforts of donors to stimulate economics education and

research in the CIS have been successful – in Ukraine, for example, there is now a pool of

properly qualified economists available , who can supply government and business with

advice based on sound analysis. What remains to be done is putting more effort on getting

business and government to realize the importance of such advice and to try to increase the

impact we have on education at local universities.