Review
Nigdar ni tak bilo
da ni nekak bilo…
It has never been in such a way
that it would not be in some way…
[ Miroslav Krleža: Ballads of Petrica Kerempuh ]
[1] Jože Mencinger, a doyen of Slovenian economists, provides an insightful, lucid, and at times humorous account of Slovenian economics. He stresses a subdued role of economics in the pre-transition period, when a task of academic economists was largely to provide theoretical (that is, Marxian) foundations to political and economic reforms shaped by politicians. He pictures a more active role of economists in the post-1989 era, both in professional debates and in policy-making directly, pointing out that several academic economists have served as ministers and resumed other posts in the government or participated in various decision-making bodies. He also notes that Slovenian economics as a field remains non-technical, and economics education rather weak.
[2] In my comments, I would like to expand on some of Jože Mencinger’s thoughts which remain undeveloped in his paper. I concentrate on the quality of economic education and incentives for research, and show that these areas leave much room for improvements. Because I believe that many of such improvements are hindered by the regional monopoly that prevails in Slovenian education, I also discuss barriers to the entry of new providers - the barriers which, as alluded to at the end of his paper by Jože Mencinger, seem to be particularly high in Slovenia.
[3] Cosmetic changes in the 1990s. State universities amended their economics programs in the early 1990s in recognition of political changes, but few other changes took place. Above all, economic faculty members retained their positions, with professors of Marxism and the theory of self-management switching overnight to market economics courses. 1 (Note1: Similar situation prevailed in other transition economies (see Pleskovič et al, 2000).) Most significantly, despite increased enrollment, the two economic departments put very little effort into attracting additional, competent faculty, and continue their policy of turning down well-qualified candidates from Western universities (see below). Moreover, the study process at economics departments continues to be characterized by the absence of methodological innovations and by “mass production”, that is, by the low intensity of faculty involvement per student. The student-faculty ratio, which was historically very high, increased in the 1990s.
[4] The quality of faculty members. Judged by two important criteria, the origin of PhD degrees and publishing records, the quality of the faculty members at the economic departments of the two state universities is poor. Eighty percent of the faculty at the Ljubljana department of economics earned their PhD degrees at the home institution, an additional 15 percent within the former Yugoslavia, and only two in Western countries (Vodopivec, 1998). At the Maribor department of economics all faculty members earned their PhD degrees in Slovenia or the former Yugoslavia. The majority of degrees was earned before 1990. Much better is the situation at the economic department of the School of Law in Ljubljana, where three out of five at the faculty have Western degrees.
[5] As a further measure of professional strength, let us examine the publishing record of the faculty at the Ljubljana department of economics. While all of the full professors have participated in international conferences with a contribution (often just an abstract) that was published in the conference proceedings, only half of them have ever published one or more articles in Western refereed journals (mostly in less renowned ones). The publishing record of associate professors is even worse - only 18 percent of them have published in Western refereed journals and 63 percent of them have participated with a published contribution at an international conference. Perhaps as a sign that hiring is getting more selective, assistant professors fare better than associate professors, with 40 percent of them having published in Western refereed journals and 80 percent participating with a published contribution at an international conference. This situation is aptly summarized by Professor Prašnikar of the Ljubljana economics department, who says that “judging the Slovenian economic profession by its publishing record abroad and by the number of citations in foreign journals, one must admit that its record is rather meager” (Prašnikar, 1995: 46).
[6] Inadequate hiring and promotion policies. How can one explain the poor publishing record and the high degree of inbreeding at the two state economics departments? The main problem are non-transparent procedures and the absence of competition in faculty appointments. First, because “lateral” entry - entry to senior academic posts from jobs outside academia - is virtually nonexistent, the most important recruitment decisions are those of hiring junior faculty members (“assistants”), which takes place immediately upon completion of their bachelor degrees. The pool of candidates for “assistants” consists nearly exclusively of students finishing their studies at the same school, and the selection is heavily influenced by the faculty member whose “assistant” is being recruited. The main entry channel for faculty - the recruitment of “assistants” - is thus characterized by limited competition and subjective selection. 2 (Note2: This contrasts sharply with the common practice in the United States and increasingly also in Europe, where a recruitment takes place among hundreds of highly competent candidates and at a much more appropriate level of professional maturity - after the candidates obtain their doctorates.)
[7] Second, “lateral” entry is prevented by biased recruitment policies, allowing insiders to protect their interests to the detriment of outsiders - and the society as a whole (technically, this protection is taking place, among others, by biased recruitment rules which require teaching experience - the experience to which access is prevented for some “external” candidates precisely because they lack the faculty appointment). 3 (Note3: To help reduce nepotism, cronyism, and inbreeding, World Bank (2000) emphasizes the importance of external peer reviews in appointing and promoting faculty. ) Particularly damaging is the aversion, even hostility, of Slovenian universities to Slovenians with foreign-earned PhD degrees. Rather than being hired as an “assistant,” a person with a foreign-earned PhD would have to be hired to a higher position in the hierarchy - for example, as a “docent” (equivalent to assistant professor in the U.S. system). Even when new courses are set and faculty members retire, all positions at that level are already taken and the candidate is usually seen as a direct opponent by incumbent faculty members. There are thus strong disincentives to hiring foreign-trained candidates even if they have superior research and teaching records and the ability to establish productive foreign links. At the economics departments, several candidates with degrees from top U.S. universities (including Massachusetts Institute of Technology and Yale) have repeatedly been rejected, even during the recent rapid increase in enrollments and the replacement of Marx by the market as an official ideology.
[8] Lack of incentives for research. As noted by Trošt (1996), because of a high student-faculty ratio, “instead of devoting their time to research, faculty members [of Ljubljana economics department] are forced to devote it to their pedagogical obligations.” However, the weak research and publication record of faculty is also the result of inappropriate incentives offered to them. As emphasized above, promotion policies are such that, once hired, faculty members have little incentive to excel at their teaching or research. To quote Janez Prašnikar again (1995: 46): “Because the quality of the pedagogical and research work had, up to now, virtually no effect on the position of faculty members, they are looking for opportunities to earn additional incomes. They engage in consulting and teaching at other schools, and even in setting up competitive programs.”
[9] Economics research at state universities is thus heavily neglected and lacks professional rigor and peer review. The critical mass for generating a stimulating environment for research is lacking. For example, there are no regular research workshops as outlets for a professional discussion about the research performed by domestic faculty. They continue to take advantage of earning opportunities outside the university and often outside the field of education, as they have few incentives to invest in teaching, and returns to research remain low.
[10] The above discussion shows that economic education and research suffer from numerous shortcomings. I have demonstrated at several places that such outcomes are inevitable consequence of the regional monopoly that prevails in Slovenian economics education (see for example, Vodopivec, 2001). Outside the two state universities, only elementary or introductory economic courses are taught at a few private business schools. The situation in economics departments is particularly critical, because current faculty members obtained their positions at a time when bowing to official ideology was more important than professional integrity or capability.
[11] Perhaps the only effective way to change an institution such as a state university, in which insiders have unchallenged power to protect the status quo, is by exposing it to competition - and undoubtedly, there is ample room for emergence of additional higher education institutions in Slovenia. However, Slovenia seems to be lagging behind other transition economies in promoting competition and diversity among the providers of business/economics education. In all transition countries presented in Table 1 the number of schools providing education in business/education is greater than 20 (including in countries of comparable size such as Estonia), except in Slovenia which has only 7 such schools. Moreover, Slovenia lags considerably behind other countries also by the number of private schools (which all sprouted in the 1990s). It is true that the demand for business/economics education in the 1990s increased more in other countries than in Slovenia (see ratio of the number of students in business economics in 2000 and in 1990), but in Slovenia the share of students in business economics is the highest among all countries, and thus the demand for business/economics education is quite large.
[12] Kraft and Vodopivec (2002) find that formal legal barriers to entry of new private providers generally are low enough to be non-binding, but many other barriers exist, especially barriers arising from resistance to entry by both government bodies and existing state schools. Slovenia certainly is the case in point. As a dean of one of the private schools I witnessed myself: (i) government bodies preventing the opening of new programs by private schools (members of such bodies overwhelmingly consist of faculty of the two incumbent state universities); (ii) intentional delays in approving credentials of faculty to be appointed at private schools; and (iii) difficulties of private schools in getting access to research funds and being listed in brochures announcing enrollment in tertiary education. Moreover, faculty of the Ljubljana department of economics lobbied intensely against the proposal to found a new gradual school of economics in Ljubljana, to serve the regional needs of South Eastern Europe. The leadership of the department also prohibited any kind of involvement of their faculty members at private schools (including such innocuous collaboration as writing case studies). 4 (Note4: In a surprising move, the department recently offered one of the private school a full-scale agreement on collaboration ranging from research and teaching to human resource areas. For sure, the offer does not resemble a collaboration on equal footing, as it stipulates that the decisions of the state school’s professional committees would be binding for the private school as well, while the private school’s faculty would only serve as non-voting members of these committees… That the department only changed its tactic of subduing its rivals is apparent also from its recent decision to limit the freedom of individual faculty to serve on appointment committees for external candidates - the department’s senate consent is now required. )
[13] The outputs and outcomes in the field of Slovenian economics can best be characterized by saying: “these are our best - and our only”. While undoubtedly economic research has tackled many economic fields and produced numerous studies, it is the quality of this work that matters - and the lack of sound competition in both research and education instill doubts that the incentives to produce high quality outputs have always been appropriate, and that all of these studies have been performed by the most qualified individuals. Procedures and practices prevailing in economics education discussed above corroborate such doubts.
[14] Let me conclude with the observation about the involvement of economists in the policymaking arena in the fields of my specialization - labor market, social protection, and education. Above all, I find a lack of public professional debate - for example, although I introduced controversial ideas at highly visible places, my proposals were not met by any comments or opposition (I argued for the introduction of a mandated funded pillar in the 1997 pension reform, heavily criticized the proposed labor code for the lack of flexibility, and proposed an introduction of tuition to public tertiary schools in the form of a delayed cost recovery scheme, a system which works successfully in Australia). Moreover, because of the lack of domestic expertise, the design of economic reforms in some areas was left to foreign experts or non-economists. For example, the task force in charge of preparing a new labor code and unemployment insurance law consisted predominantly of lawyers who lacked insight into substantial aspects of the proposed legislation.
Washington DC, 2002
| Number of schools | Enrollment | Ratio of students in business economics 2000/1990 | Share of students in business economics | |||
|---|---|---|---|---|---|---|
| Public | Private | Public | Private | |||
| Czech Rep. | 73 | 25 | 39,898 | 4,103 | 3.5 | 19.6 |
| Estonia | 17 | 15 | 7,231 | 7,331 | 4.1 | 25.2 |
| Lithuania | 36 | 17 | 25,860 | 3,386 | 2.5 | 21.5 |
| Poland | 53 | 91 | 72644 | 296,008 | 7.0 | 23.4 |
| Romania | 24 | 40 | 60,653 | 52,637 | 5.9 | 21.2 |
| Slovenia | 2 | 5 | 15,179 | 3,931 | 2.4 | 26.1 |
