Review
[1] These comments on what is an interesting and readable report by Linas Čekanavičius consist of two parts. The first part is intended to highlight and discuss the main points of the report and in the process to identify points that could usefully be expanded. The second part aims to be more forward looking and analytical and to consider why, at present, the development of economics in Lithuania remains limited and to offer some suggestions for future action.
[2] Here it is emphasised that pre-war Lithuanian economists were mainly concerned with, on the one hand, establishing modern economics as an academic discipline in Lithuania and on the other, also with the development of institutions and policies needed in newly independent Lithuania such as the “system of finances, statistics and monetary policy”. Indeed it is noted that the leading economists worked in precisely these fields - finance, statistics and macroeconomics. The discussion is all too brief. It would have been of interest to know who or what shaped the ideas of the pre-war Lithuanian economists - where were the linkages? Did the main influences originate in Scandinavia? In Germany? Or perhaps in Austria? - so that perhaps interest in the ultra-liberal ideas of von Mises and Hayek in the early 1990s actually represented a return to pre-war ideology? Also of interest is the extent to which Marxist/socialist ideas were debated in Lithuania at that time. Certainly, in neighbouring Latvia socialist ideas were rather prevalent in intellectual circles at that time.
[3] Much more space is devoted to the Soviet period. The report gives a vivid account of the way in which official Marxist-Leninist ideology and the Soviet system in general combined to stifle original thought in economic science in Lithuania.
[4] Mathematical economics, regarded by the Soviet authorities as ideologically innocuous, represented an exception to the general repression of original thought in economics and Lithuania had several prominent exponents of this genre, who managed to achieve publication in Western economic journals. It would be of interest to know a little more of their work e.g. what were their Western publications? Where did the Lithuanian mathematical economists stand within the overall Soviet scheme of things.
[5] Two schools of mathematical economics are identified in the report and it is suggested that, in contrast to the school of Vilkas, which was concerned mainly with modelling theory, the school of Rayatskas “was predominately concerned with the application of known mathematical methods and models to the solution of economic problems .... and various optimisation methods were widely employed at the national, regional and enterprise level”. It would be of interest to know how much actual influence they had in practice. This question also applies to some of the other research mentioned in the report, devoted to descriptive and/or prescriptive analysis of particular sectors or enterprises. The suspicion is that in practice the influence of economists was rather limited and it would be useful to have this confirmed (or perhaps disconfirmed).
[6] Finally, it would be of interest to identify the linkages and networks available to and exploited by Lithuanian economists over this period. It is clear that contact with the West was very limited and presumably contact with Moscow was extensive. However, what about the other Baltic republics? Or what about contact with economists in other Soviet bloc countries such as Hungary or Lithuania’s neighbour Poland?
[7] In the post-1989 situation (and for the Lithuania post-1991) it was recognised in the West that the Soviet inheritance in economics would be inadequate to meet the needs of a market economy. Accordingly a variety of agencies from the EU, Soros, the US, Canada as well as individual European countries, developed initiatives aimed at reforming the economics profession in CEE and FSU countries, including Lithuania, thereby aiming to enhance capacity and to formulate and implement economic policy.
[8] Although this is not explicit in the report, many of these initiatives seriously underestimated how difficult and lengthy the reform process would prove to be and it is still by no means complete. This is recognized in the report. Thus it is stated the reforms in teaching programmes “were neither as deep or as comprehensive as one would wish them to be. In many cases changes in study programs were of a rather ‘cosmetic’ nature, Western-like titles masking the low quality contents of the course”. The basic problem has been that existing staff have managed to hang on to their positions and continue to dominate the delivery of the new programmes. According to the report “the change of elites in economics was rather insignificant, as ‘old-timers’ firmly held their privileged positions by virtue of the degrees and titles secured in the past”. This occurred despite a “nostrification” process aimed at re-validating Soviet degrees.
[9] As someone who has participated in programmes aimed at reforming economics in the Baltic states these remarks sum up very succinctly the reality of how existing faculty have managed to retain their positions and influence. This institutional capability to reproduce itself in substance, while at the same time appearing to introduce quite radical changes has been quite seriously underestimated by outsiders. Even today this is not fully or widely understood. So it is refreshing and informative to have this stated and confirmed by an insider.
[10] It is much to be regretted that the mathematical economics programme was abolished at the University of Vilnius in the early years of reform. However, all is not lost ..... mathematical economic has recently been revived as a ‘minor’ or sub-programme at the university and its first graduating class was in 2001, with some of its graduates being successful in finding PhD positions abroad. Moreover, if one inspects the list of publications (more discussion of these below) the only ones which are in peer refereed Western journals have appeared in rather quantitative outlets e.g. Journal of Finance or Econometric Theory. So the tradition of mathematical/quantitative economics has survived from the Soviet period. Arguably, there is also a continuity with pre-war when ‘finance’ and ‘statistic’ were noted as areas of specialisation.
[11] The discussion of the Soviet system in the report brings out rather well the emphasis on quantity rather than quality of publications and it is suggested that this remains largely true in Lithuania today. This is certainly the case in Latvia also but somewhat less so in Estonia where university lecturers in economics do get rewarded for publication in genuinely international journals.
[12] The list of publications offered here is interesting but it would be more informative if we knew on what basis the selection has been made. Are these publications meant to be the best? Are they meant to be representative? It would also be useful have a breakdown by institution/department. For example, Kaiyrs and Leipus have publications in quite prestigious quantitative Western journals - are these people in a university? If so are they in an economics department? Or perhaps in a maths or statistics department? If not where are they located? For example there is some evidence that research takes place at the Bank of Lithuania, at the Statistical Bureau and at other places. In some cases work done at such institutions is supported by technical help from the EU and other international sources of technical assistance to official bodies.
[13] Box 1 is also interesting, e.g. academic staff in economics and business management appears to have grown in 1999 as compared with 2-4 years earlier, but they have become less productive per capita except in producing publications in Lithuanian journals. Incidentally, what does ISI stand for in ‘ISI rated publications’.
[14] Perusal of the list of publications suggests that there are rather few joint publications with foreign/Western authors. A larger list would probably reveal the same thing. This suggests that Lithuanian economists are rather weakly integrated with counterparts abroad.
[15] It would be of some interest to undertake an explicit study of the outcome in terms of publications of the Phare ACEprogramme. This programme has been aimed at developing Eastern European capacity in economics through joint research of various kinds e.g. joint research projects, fellowships and studentships and Lithuania has been reasonably successful in participating in this programme.
[16] As noted earlier, in the West, research output and especially its quality is overwhelmingly the most important criterion of scientific achievement. The evidence from Box 1 shows that by international standards the performance of Lithuanian economists has been poor. Less than one in ten academics had any kind of international publication, and even when local publications are taken into account, productivity (average no of publications of any kind is less than one per academic) is very low. Other measures of progress/integration, such as the numbers of international students or visiting staff in Lithuanian universities, would also be of interest.
[17] However, one looks at it, one is forced to conclude that after 10 years of transition the state of the economics profession in Lithuania is considerably behind its counterpart in the West and from casual evidence (and this conference may confirm or disconfirm this impression) also behind counterparts in some of the other eastern European transition/candidate countries.
[18] Thus, despite some successes, the reform programmes such as Tempus, Phare ACE etc have not succeeded in bridging the gap between Lithuania and the leaders of the profession in Europe. Indeed, by analogy with GDP per head, Lithuania is some way below the European average also in the achievements of its economics profession.
[19] What to do about it? The first point to emphasise is that the root of the problem does not lie with the individual adequacy of Lithuanian economists. At the same time this outcome is no accident, but rather it is a direct consequence of the system of incentives faced by economists which is rooted in an inadequate priority awarded to research. High quality research is simply not valued and hence not rewarded sufficiently either in the universities or perhaps in government. In a way this is another legacy of the Soviet period when economic research was simply not regarded as a basis for action.
[20] Moreover, salaries in universities remain low, so many university lecturers do a variety of outside jobs including teaching at private educational institutions. Getting an adequate income is more important than doing research.
[21] Outside programmes such as Phare ACE or the more recently introduced series of research competitions for Eastern Europe organised through the Cerge-EI in Prague under the auspices of the Global Development Network, can help but they have often been regarded as another means of supplementing income rather than as an opportunity to do serious research.
[22] My own institution, the Baltic International Centre for Economic Policy Studies (BICEPS), is aimed at promoting high-quality policy-oriented research, especially through attracting young returning Western-trained into research in the Baltic states, but it faces the problem that at present it is funded entirely from outside. Ultimately Lithuania itself has to revalue the priority it gives to economic research and to introduce incentive structures that will support it.
[23] A final word on what might be done from within the European economics profession itself. If one attends major economics conferences such as the European Economic association annual meetings, economists from Lithuania and the Baltic states in general are virtually not present. They are clearly under represented even in per capita terms. On the other hand, participants from other CEE countries are not hard to find and indeed they have been encouraged by special terms for attendance for economists from transition countries. This does not seemed to have worked for the Baltic states and perhaps there is a case for a special ‘infant industry’ status for the Baltic economics profession.
Riga, 2002
