Review
[1] I would like to emphasize three issues that are present, but unevenly developed in the report: the role of legacies; the East-West interface; some aspects of the actual agenda.
[2] The main point is on legacies. Economic knowledge develops in a continuum even when it seems, at first glance, that profound breaks appear. The actual status of economic science in Bulgaria is as much the product of the immediate past, as of the pre-1944 intellectual background. If the communist legacy is the “first-order” explanatory variable, the more distant past constitutes a kind of test for the limits of the intellectual achievements possible in a “spontaneous” environment.
[3] Both, the specific social background and particular theoretical affinities shaped the pre-1944 profile of economic knowledge in Bulgaria. 2 (Note2: The report proposes a taxonomy based on “pragmatics versus theoreticians”. In my view this is not the more adequate classification and the inclusion of politicians in the first category is misleading.)
[4] Looking at the doctrinal fundamentals, a noteworthy feature was the absence of clear-cut “corner ideologies”: neither “pure” conservatism, nor liberalism had a strong impact in economic science. Those were traditionally marginal currents and, as a whole, “free market” capitalism was seen as an alien addendum to the traditional economic structure of the country. In turn, etatisme developed as a consensus ideology, taking often corporativist, populist and even totalitarian nuances.
[5] The form of theoretical knowledge was characterized by a deceiving lack of original conceptual contributions and by marginality. Economic theory taught in local universities was eclectic and epigone. When a global vision was needed to face major economic challenges, projects produced were either kind of “plagiaries” or peripheral social utopia with systemic drive towards collectivist ideologies. Reliance on outside authorities was the rule, with the corresponding humility and excuse of “smallness”. There was a marked disbalance in the areas of development of theoretic knowledge. It is not by chance that fiscal studies attained relatively higher levels compared to monetary research in a hardly monetized and etatiste economy.
[6] In a sense this profile of economic knowledge prepared intellectually the coming communism. With a strong dogmatic and casuistic component, with many stable semantic constructs, with the respectability gained by Marxism, the era of the scholastic communist “political economy” was open ex ante.
[7] The national heights in economics were elsewhere, in descriptive, and to a lesser degree applied research. Outstanding achievements were produced in “mapping” the economy through monumental descriptive frescoes. Business cycle phenomenology was particularly well captured according to leading international standards.
[8] A corollary of this bias was the decent technical expertise offered, by the 1930s, in the field of economic policy. The interaction between expert knowledge and economic policy, however, was not successful. As a rule, the socium ignored expert advice and generated its own, hybrid responses. Intents to overcome this lack of communication produced, from time to time, projects based on “enlightenment” principles, starving to minimize the errors of economic policy and trying to “coordinate” opposing interests.
[9] Roots of this intellectual landscape could be traced in the specific and unclear social fabric. Entire social strata were missing. The national bourgeoisie cultivated a close dependence from the state, middle class and liberal professions were extremely weak, corportivist and collectivist ideologies (especially cooperativism) prospered.
[10] The role of the research institutions mentioned in the report deserves to be further stressed. The Bulgarian Economic Association (BEA) shaped the cognitive standards in the economic profession, the politically correct discourse, and the public debate. BEA’s influence, however, was not only related to its intellectual appeal, but to a great extent to the fact that it was a first-order pool for the recruitment of the political establishment. Otherwise, the Association faced a narrow interest among the general public and strong utilitarian expectations.
[11] The highest pre-1944 Bulgarian achievements in economics were attained by the Statistical Institute for Social Studies (SISS) (1935-1938). Its institutional design created a remarkable harmony between demanding scientific standards, elitism and organizational autonomy. The construct rested on several pillars. The Russian émigré Oscar Anderson (residing for two decades in Bulgaria) assumed a strong and internationally recognized leadership: he created a full-fledged “one-man institute” like those of N. Kondratieff(Moscow), E. Wagemann(Berlin) or W. Mitchell (USA). Effective and well regulated contacts with technocratic government institutions were carefully designed. Financing (Rockefeller Foundation, Bulgarian National Bank, Agricultural Bank) was wisely mixed and conflict of interests avoided. The research program was completely in line with mainstream economics. Finally, a high-level international research network was established, including R. Frish’s Institute in Oslo and League of Nations (Tinbergen-Haberler) projects. The short-lived SISS experience demonstrated that - under particular circumstances - convertible positivist knowledge could be produced in a peripheral country.
[12] European economic knowledge was the driving force for Bulgarian economic science. East-West contacts in the field of economics, however, have never been easy or comfortable.
[13] Western formation of many Bulgarian economists did not mean an automatic interiorization of Western values. The rule was superficial absorption, while powerful feedback from local culture often “corrupted” the imported clichés.
[14] Western influence penetrated through different channels. The main one was, undoubtedly, foreign creditors’ conditionality. Let observe that an essential, implicit, creditor’s asset is to “impose” a particular economic ideology i.e. to impose the standards according to which debtor’s national economic policy is assessed. Theory means power and vice-versa. A problem (even a cultural shock) arises when there are fundamental differences between foreign and local economic values, as it was the case between the dominantly liberal foreign advisers’ societal model and the traditionally etatiste and collectivist Bulgarian economic mentality. Memorable (latent or open) ideological conflicts developed with the League of Nations’ (LN) doctrine (inspired from the 1920 “Brussels” orthodoxy), or recently with the difficulties in absorbing the “Washington consensus”. Agents of foreign conditionality were powerful enough to design the frame of the needed reforms, but never in a position to implement them smoothly and to obtain relatively “pure” and coherent social forms or institutions.
[15] Pertinent foreign advisers (J. Rueff , L. Pasvolsky) managed to capture the reverse signals. They focused the specific circumstances, not dogmatic principles, preached a kind of conceptual humility (to stay on firm theoretical grounds, but taking into account the uniqueness of each particular case), discarded fashionable “financial esthetic” (J. Rueff), tried to avoid the temptation to proceed too fast.
[16] At the junction of foreign conditionality with local policy are the IFI’s counterparts in the host country. They play a key role in the intellectual transfer, being the privileged interlocutors of foreign advisers, the main vehicle of their messages, the translators of the confronting positions to a common conceptual language. To find the right counterpart was not always an easy task in the relatively narrow Bulgarian “convertible” elite.
[17] A particularly interesting topic is the identification of the national sources of intellectual influence on economic elites. The predominant one in pre-war Bulgaria was French and German, while the direct Anglo-Saxon influence was weak. Anglo-Saxon impact was enormously important, however, through the macroeconomic paradigm of the LN and, eventually (in the 1990s), through the IMF. A clear affinity of Bulgarian official science to doctrinal clichés in the economic “metropolis” could be observed. Cohorts of economists regularly excelled in producing dogmatic texts along the German (pre-war) or Soviet (post-war) doctrine.
[18] Conditionality mattered. It created, for example, official language by introducing words and notions in a sort of semantic vacuum. In several instances the Bulgarian elite - inexperienced in practical matters, or rooted in a very different cultural tradition, - adopted a specific professional language precisely through foreign conditionality. This was the case in the early XX century, but also in the early 1990s when the IMF slang gradually supplanted the communication codes of a completely Marxist-indoctrinated professional milieu. Conditionality created data, as well, by setting out a comprehensive and explicit economic statistics. Pressures for more reliable fiscal figures needed by foreign monitoring were permanent throughout the century. Completely missing monetary (including Central Bank) statistics were designed during the 1990s. Finally, conditionality mastered institutions, the reform of Bulgarian National Bank in the 1920s being a particularly emblematic case.
[19] The 1990s saw changes in conditionality style, not so much in its substance. National specifics of conditionality tend to fade away. Western influence becomes overwhelmingly bureaucratized. Commercialization is widespread, with a burgeoning consultancy-providing industry relying on revenues from large scale propagation of standardized “conceptual” products (up to entire macroeconomic reform packages). Doctrinal standardization is extreme - “politically correct” clichés are reproduced today by an infinite number of voices. Banalisation of the economic profession and easier communication produce uniform cultural formatting. Economic issues are immediately “codified”. Conditionality becomes a depersonalized activity, while marking personalities with a global vision are notoriously absent.
[20] In post-communist transition economy IFI turned out to be central vehicles of transfer of economic knowledge. Theirs is, however, a specific kind of knowledge - a mix of pragmatic, conservative, common sense fiscal and monetary policy rules. IFI (past and present) are types of laboratories that do not secrete theory, but easily applicable standardized “doctrines”. They are an essential source of more or less rough material recycled by academia. Research departments of post-war IFI harbor high-level professionals that do not pertain to a single theoretical framework. The purely academic motivation in conditionality enforcement is scarce. Theoretical interest towards a small country like Bulgaria is fostered only when the country becomes a test case. Two examples could be mentioned - the LN arranged Stabilization loans of the 1920s, when Bulgaria was a part of a select group of countries adopting a new stabilization scheme, and (from 1997 onward) with the implementation of a currency board. These specific situations tended to attract the interest of first-order foreign economists
[21] My views on the communist legacy in economic science differ to some extent from those in the report.
[22] Marxism - in the communist context - could hardly be treated as a paradigm. A paradigm is supposed to be critically discussed through hypothesis testing, subject to changes and eventually “falsified”. This was obviously not the case with the rigid Marxism, considered as an unmovable official state ideology.
[23] Referring to the existing research institutes it should be observed that their role was twofold. On the one hand, they produced “official critical thinking” that was entirely inside the status quo, never challenging the fundamentals of the regime. The results (even the most “critical”) were never part of a truly mainstream theoretical framework.
[24] On the other hand, the official institutions tolerated “soft dissident knowledge”. These places were in no way intellectual deserts. Control and inaccessibility of Western economics should not be overestimated (as the report tends to do) at least since the mid-1970s. Researchers who really desired so had the possibility to be informed (at low cost in public and academic libraries) about the main trends in mainstream economic knowledge. The much more tangible barriers (in Bulgaria) were the scarcity of foreign language skills, education and the social context. Education, in particular, was completely indoctrinated, so that - even for those who tried to fill the gap - entire formational building blocks of Western economic theory were missing. Insertion into the mainstream context was further obstructed by the lack of social (career) incentives to develop such knowledge, given the strongly dogmatic professional milieu and non-existent contacts with the Western scientific community. It should be added that after 1947 non-Marxist economists faced a single dilemma: between ostracism from universities (research institutions) and opportunistic coexistence.
[25] At the end of the day the “dissident choice” was quite restricted. Mathematical methods (as elsewhere in communist countries) offered the possibility of internal emigration and implicit rejection of Marxism. Results, however, were disappointing. Generalizations, as a rule, remained inside the dominant discourse. Applied econometrics was of poor quality, inconsistent with mainstream patterns. Some marginal Western areas (such as large-scale models and input-output analysis) were over-represented due to their compatibility with the socialist - “naturalistic” and demonetized - conception of the economy and with planning practices. Misinterpretation of Western theories was also frequent as a result of limited understanding of their substance, and (above all) of their context. The case with “economic cybernetics”, cited in the report, is one of the most adequate illustrations of this phenomenon: it is not an example of Western influence (as interpreted in the report), but rather the contrary, the demonstration that simple transposition of fashionable theories does not represent authentic critical thinking. The only additional refuges available were the possible choice of more technical (less ideological) research issues, or the studies of capitalist economies (a semi-open window to the realities of the market). It should be noted, as well, that the more empirically oriented economists developed marvels of sagacity and uncommon skills in dealing with the statistically biased communist realm.
[26] On the whole, Bulgaria did not produce radical “dissident” economic knowledge in its two possible dimensions - a critique of the regime’s fundamentals based on mainstream theories, or the formulation of original theoretical insight explaining (in a mainstream framework) the functioning of a communist economy. The only exceptions, in my view, are the results of V. Antonov on inflation, growth and cycles in the Bulgarian economy published in the second half of the 1980s.
[27] Bulgaria faced transition with an inadequate legacy mix in economic science - lacking insightful pre-war tradition and one of the most dogmatic socialist intellectual inheritance. Much had to be built from scratch.
[28] The short-lived Bulgarian perestroika (a pale mimicry of the Soviet original) was only a half step ahead. It boiled down, mostly, to a failed intent of a new generation’s revenge against the sterile scientific establishment in place. Perestroika generated strong critical pathos and sometimes-bright esthetic discourses (closer to “economic poetics”) but almost no practically and theoretically consistent visions and analyses. At the outset of transition few coherent ideas were available while a cohort of “naïve liberals” invaded the public scene.
[29] After 1989 the landscape in economic science slowly evolved, facing many institutional and conceptual problems.
[30] Transition expert knowledge was gradually fragmented, privatized and politicized. Some of the new institutions (NGO, think tanks) have a potential to perform serious research, but the dominant trend transforms most of them into political mediators. They are typically producing “soft (minor) science” of dubious quality, competing for networking rent and existing at the edge of consultancy business. As most of the projects are foreign financed, demand creates imported discourses and agenda.
[31] The remaining traditional research units suffer from low budgeting and spontaneous adverse selection. Markets and Government absorbed dynamic and “convertible” people from academic institutes. The institutes themselves are evolving into nutshells-like structures hosting independent individual projects. Universities are, by definition, conservative and inertial. Top faculty is renewed very slowly, old curriculums are often recycled only superficially or incoherently, poorly translated or compiled textbooks are used, while at the same time the demand for economic education is booming.
[32] The change in the profile of the “transition economist” is a long and controversial process. The first generation started with a typically depreciated and idle intellectual background. It was impossible to cope rapidly with the “formational holes” and to bring together the dispersed archipelago of meaningful knowledge. Cosmetic changes, mimicry and superficial notions of market were widespread. Etatiste instincts reappeared at the first contact with Government where many economists acquired new positions: the state generates its own, intrinsic, anti-liberal values. Former intellectual networks desegregated at the touch of political power. Economists in Government (sometimes better trained and influential community) faced the inherent limits of bureaucratically produced knowledge and the ambiguity of its messages.
[33] The growing up of a critical mass of mainstream economic knowledge is largely a generation phenomenon. While the gap in practical expertise is filled relatively rapidly, “theoretical deficit” will subsist longer. The maturing of a new generation formatted in contact with the West is necessary. Education at Western universities is the most effective catalyst, but brain drain and educational mobility are equally important. They produce an “international-Bulgarian” research community that will fill the gap in a mid-term perspective.
[34] The role of EU accession and of scientific cooperation with Europe is essential. The experience with “assistance” research programs (ACE, TEMPUS) in this respect has so far produced mixed results. No doubts, they were precious mobility instruments and generated a wide range of otherwise inaccessible opportunities. At the same time, those instruments fostered mid-level standards as well. An international of mediocritas tended to emerge, while the number of opportunistic applications inflated. Networks of vested interests appeared. For many Western universities and research centers the programs were seen mainly as important sources of additional subsidies. At this stage it seems wiser to privilege two axes: the support of more spontaneous contacts, based on excellence and high quality research; the assistance in building basic educational facilities and in students’ (incl. PhD) mobility.
[35] As a whole, EU accession is a harmonizing factor with enormous learning impact on domestic elites. It will probably not preclude the trend of growing euroscepticism that is to be expected among the scientific community in mid-term perspective. This trend, however, is not alarming: it should instead be considered as a healthy indicator of deeper economic insight.
[36] Several remarks could be formulated on the research agenda in economic science.
[37] It is probably unreasonable (and unnecessary) to expect outstanding developments in “high theory”. In small countries this is an area of seldom, personal, achievements that rarely correlate with the institutional strength of economic research. The universal use of English as lingua franca and global virtual communication are downgrading the importance of the country’s size for its potential contribution to “high theory”.
[38] Economic research is returning to its pre-war status, marked by a strong emphasis on pragmatic and technical issues. The apparent “de-scientification”, in this perspective, is a natural trend, an answer to the hypertrophy of “science” under the communist regime and to the change in social values. Science has been - understandably - displaced by business. This is not necessary a drama. It should rather be considered as a healthy adjustment to reality.
[39] “Economics of transition” should less and less be considered as a specific branch of economics. No new theoretical knowledge, strictly speaking, can be produced in this field. “Transition economics” is simply the “economics of extremes” - extreme cases of market economy, of market failures and of market distortions. Every transition problem could be formulated in the framework of mainstream theories.
[40] The Bulgarian economic policy agenda stayed basically unchanged during the past century. It could be summarized by two dominant topics - how to stabilize, how to enforce delayed reforms. Those are the issues where most economic research was done. Looking at more details, however, it seems that sectoral market studies are lagging behind macroeconomics. More efforts should be directed in the sophistication of those areas.
[41] History is a continuum and a critical rethinking of the pre-communist past is of foremost importance. The goal, however, should not be so much to build bridges reaching past intellectual traditions. The really challenging exercise is to try to reconstruct core economic mentalities, to identify (and overcome) recurring national behavioural patterns, theoretical and institutional bias that reappear spontaneously and perseveringly during the “second birth” of capitalism in transition countries.
Sofia, 2002
