Economics Ph.D. Education in Central and Eastern Europe.

Svejnar, Jan

Prepared for ACES Panel on "Graduate Economics Education in Transition Economies, " ASSA Meetings, Boston, January 2000.

1. Background

Most Central and Eastern Europe (CEE) countries started in 1989 from a centralized system of economics education that consisted of several tracks of Communist party approved non- or semi-analytical courses, as well as a track of rigorous training in mathematics and statistics. The mathematics and statistics track usually attracted a minority of students. Its curriculum was moderately related to the functioning of a centrally planned or labor-managed economy; it was rarely applied to the functioning of a western style market economy.

In most CEE countries, the traditional system of economics education consisted of a 4-5 year program leading to an "engineering (Ing.) degree" that arguably corresponded to a master's degree in the United States. The engineering degrees were awarded by Economics Faculties of general universities or by specialized Universities of Economics. These universities, as well as separate economics institute(s) of each country's Academy of Sciences were also granting a "candidate of science (CSc.) degree" to post-graduate students who worked as researchers at these institutions and completed a dissertation. The candidate of science degree was often taken to correspond to the U.S. Ph.D. degree, although the candidate was usually not required to carryout systematic course work and often worked under relatively loose supervision of a single senior researcher or faculty member, In the format of the candidate of science studied, as well as in the formal separation of universities and research institutes, the Soviet-style system did not formally differ too much from the traditional system in Western Europe. However, it differed markedly from the U.S. system where Ph.D. studies require (at least) two years of rigorous course work and comprehensive examinations prior to the dissertation research and where the economics departments of research universities are also the main institutions for research in economics.

Except for the mathematics and statistics track, the traditional CEE system of economics education produced graduates that were much less analytically oriented than their U.S. counterparts at the M.A. and Ph.D. levels. Graduates of the mathematics and statistics track were relatively comparable to their western counterparts in a number of "pure" theory areas. However, there were few of these technically educated individuals who also had good economic intuition or the kind of economics background that would make them be good applied theorists or applied econometricians. Overall, with notable exceptions such as Janes Kornai, there were few "home grown" CEE economists who embodied the combination of economic understanding and analytical skills to be able to contribute analytically to the understanding of the main economic issues arising in the CEE or western economies. Moreover, while there were a number of CEE economists educated in the west (e.g., Josef Brada, Stasek Gomulka, Branko Horvat, Jan Kmenta, Richard Quandt, Jacek Rostowski, George Staller, Jaroslav Vanek, Stanislaw Wellisz, and myself), with the notable exception of Horvat they did not exert direct influence on economics education and research in CEE.

2. Principal Changes during the Transition

Economics education has undergone a major transformation in Central and Eastern Europe during the 1990s. Most countries have undertaken a major reform of the system of higher education in general, switching to the Western system of B.A., M.A., and Ph.D. degrees and introducing a degree of democratization and autonomy to the universities and institutions of higher education. The success in the actual implementation of western economics education has been mixed, with mosr success being achieved at the undergraduate level. At the B.A. level (first three years of university education), one has observed a fairly uniform switch to western-style economics education throughout CEE. This has been accomplished in part by the widespread use of standard western textbooks and in part by the ease of retraining traditional faculty in undergraduate instruction. However, one observes major differences across countries and educational institutions in the quality and type of education at the M.A. and especially the Ph.D. levels. As I discuss below, there are very few institutions that have truly achieved U.S. standards at the M.A. and Ph.D. levels. In my assessment, the Center for Economic Research and Graduate Education -- Economics Institute (CERGE-EI) in Prague is currently the only CEE institution with a truly American-style Ph.D. program, while the Economics Program at the Central European University (CEU) in Budapest is the only institution with a U.S. style M.A. program. For the purposes of analyzing the relative success of these two institutions, note that both represent new initiatives rather than a reformation of existing departments or Faculties of Economics.

There are several reasons for the uneven development and success of graduate economics education in CEE. First, the move to a greater self-governance of faculties and universities has frequently cemented the position of communist-era professors, few of whom have been able and willing to retrain themselves so as to be able to teach modern western economics at the M.A. and Ph.D. levels. This is a general problem, not just one affecting economics education.

Second, in a number of countries it has taken a large part of the 1990s to attenuate the traditional divide between the universities and the Academy of Sciences. With the universities traditionally focusing on teaching and the academies on research, it has been difficult to create an integrated approach to a quality Ph.D. level education.

Third, government spending on education and research has been stagnant or falling as a percentage of GDP. With private philanthropy developing only slowly, tuition and fees being limited for public institutions by nationwide laws and regulations, and foreign assistance being dependent on a tangible promise and demonstration of quality, institutions in most CEE countries have found it difficult keep academic salaries from lagging dramatically behind those in the private sector.(1) This has in turn made it difficult for them to attract and develop new talented faculty, or prevent existing faculty from engaging in excessive consulting activities rather than focusing on academic research and student supervision. In particular, most serious CEE institutions have been given an opportunity to develop new programs and bring visiting faculty through the numerous private, bilateral and multilateral programs of western assistance, but few have succeeded in converting this opportunity into long-lasting development of a quality Ph.D. program.

Fourth, most institutions have not established incentive schemes that would place emphasis on academic research and quality instruction. This and the preceding factors have also made it difficult to attract back western-educated nationals who might return under more favorable conditions.

Fifth, business courses have been generally preferred by students to the more difficult economics courses. Most students also prefer to go into business, as low-paying academic jobs have little appeal and demand for policy-oriented research is still limited. As a result, many Economic Universities have emphasized the development of a business school rather than economics curriculum.

In view of the above factors, the success of the development of a quality graduate program in economics has depended crucially on the quality, far-sightedness and agility of the top management of the universities and academies of sciences, and of the economists spearheading the development of the graduate economics programs.

3. Principal Economics Ph.D. Programs in Central and Eastern Europe

Virtually every CEE country now has at least one Ph.D. program in economics. The curricular requirements, quality of faculty and students, and the library and computer facilities differ dramatically across the programs. In this section, I briefly review the principal programs. I start with CERGE-EI, currently the most advanced Ph.D. program in the region, and I use it as a benchmark in discussing other programs.

The Center for Economic Research and Graduate Education -- Economics Institute (CERGE-EI)

CERGE was founded in Prague in 1991. The founding was the culmination of two years of intensive efforts by Josef Zieleniec and me to establish an American-style Ph.D. program for the former Societ bloc countries. These efforts stemmed from our realization that the former Soviet bloc had virtually no western-trained economists who could teach modern economics at an advanced level, perform analytical research and formulate economic policy in the post-communist era of a transition to a market economy. In collaboration with Richard Quandt of Princeton University and the Andrew W. Mellon Foundation, Kevin Sontheimer of the University of Pittsburgh, and Rector Radim Palous of Charles University we founded CERGE as an American-style Ph.D. program and research center of Charles University.

From the start of its operations, CERGE was hindered in its development by the scarcity of local faculty who could be rigorously retrained and assume teaching responsibilities, severe space constraints and uncertainties in the building allocated to CERGE, and the budgetary restrictions facing Charles University. From this environment emerged the idea of integrating CERGE's activities with those of the newly formed Economics Institute (EI) of the Czechoslovak Academy of Sciences in order to create a viable, self-sustaining entity --CERGE-EI.

In the spring of 1992, the Academy reviewed its own economic research, carried out a background study of CERGE, and decided to reorganize its economics program along the lines of CERGE. The Academy abolished its three institutes dealing with economics and created a new economics institute (EI) that shared CERGE's research and public service missions and whose activities would be gradually integrated with those of CERGE to form CERGE-EI. In order to carry out this reorientation, the Academy appointed me as the first Director of EI, provided a budget for EI and permitted the Academy building that housed the abolished Institute of Economics to be used by CERGE-EI.

The integration of CERGE and EI activities has been intentionally quite all-encompassing, reflecting the fact that either institution alone would be too small to have a chance of becoming a world-class institution of research and Ph.D. education. The two institutions have therefore been designed to have the same goals and share the same building, library, and computer facilities. Moreover, virtually all faculty/researchers and staff members have had joint appointments and have been subject to the same criteria for hiring, evaluation and extension of contracts.(2) These employees have also been receiving substantial salary supplements so as to attract quality individuals and reduce turnover.

CERGE-EI is governed by an international Executive and Supervisory Committee (ESC), together with the director of CERGE-EI. The ESC is currently composed of Phillipe Aghion of UCL and Harvard, Orley Ashenfelter of Princeton University, Randall Filer of Hunter College, Jan Hanousek of Charles University, Miriam Klipper, Esq., Petr Kratochvil of the Academy of Sciences of the Czech Republic, Gerard Roland of the Free University of Brussels, Jan Svejnar of the University of Michigan, Rector Ivan Wilhelm of Charles University, and Josef Zieleniec of Charles University. Over the last several years, Angus Deaton of Princeton University, Kevin C. Sontheimer of the University of Pittsburgh, Frantisek Turnovec of Charles University and Andreas Worgotter of the Institute of Advanced Studies in Vienna were also active members of the ESC.

By adhering quite strictly to the American-style Ph.D. model with its major emphasis on courses, examinations and research, the CERGE-EI initiative has achieved considerable success in fulfilling its principal missions. Each year, about 50 carefully selected students from all over the former Soviet bloc have been enrolled in a summer preparatory semester. Most of the incoming students have a strong mathematics or engineering background, but in general they know little economics. During the summer term, they are therefore taught primarily intermediate micro and macro economics. At the end of the summer term, the 25-30 best students are admitted into the Ph.D. program. During the first year of the program, they take U.S.-style Ph.D. courses in micro and macro economic theory, statistics and econometrics. At the end of the first year, the students have to pass general (comprehensive) examinations in these fields. In the

second year of studies, the students select three areas of specialization and take two-semester long (U.S.-style) courses in each of them. When they pass general (comprehensive) examinations in two of these fields, they are admitted to the Ph.D. thesis writing stage.

In view of the strict adherence to the U.S.-style program, CERGE-EI has succeeded in enrolling the top students from throughout Central and Eastern Europe, bringing in quality visiting faculty from around the world, and retraining some of the existing economists who have started co-teaching and gradually fully teaching the demanding Ph.D. courses. Between 1991 and 1999, CERGE-EI admitted over 200 graduate students into its Ph.D. program. Of these, about 30% are Czech nationals, 17% are from Romania, 12% are from Slovakia, 10% are from Russia, and the rest are from Albania, former Yugoslavia and the rest of the former Soviet bloc. Women constitute over 30% of the CERGE-EI student body.

The first doctoral thesis was defended at CERGE-EI in 1995, three were defended in 1996, and 15 theses were defended by the end of 1999. The demand for the graduating Ph.D.s has been considerable. The graduates have taken on influential jobs in the government, private sector and academe. The academically best ones have been offered jobs as assistant professors at CERGE-EI and most have taken them.

Apart from recruiting the best CERGE-EI students, CERGE-EI has also been actively recruiting new Ph.D.s on the world market. Since 1997, CERGE-EI has each year interviewed over twenty Ph.D. candidates at the job market held at the American Economic Association Meetings and hired 4-5 new Ph.D.s each year as assistant professors. At present there are 14 full time faculty members at CERGE-EI and the goal is to bring this number to 30 in a steady state.

In terms of research, CERGE-EI has produced over 200 working papers, a number of which have been published or accepted for publication in western economics journals such as the American Economic Review, European Economic Review, Review of Economics and Statistics, Journal of Mathematical Economics, Journal of Economic Policy, Journal of Comparative Economics, Journal of Development Economics, and Economics of Transition. Numerous studies have also been used by officials in the Czech government, as well as in international organizations such as the EBRD, World Bank, IMF, and OECD to form and evaluate policies. Of the several dozens papers presented by scholars from Central and Eastern Europe at the last three annual meeting of the European Economic Association, over one-half were by faculty and graduate students of CERGE-EI.

A number of CERGE-EI researchers have served as economic advisors to the President and Prime Minister of the Czech Republic, Governor of the Central Bank, Minister of the Economy and Minister of Trade and Industry. In 1992 and 1994, the European Community's Secretariat of the ACE Program designated CERGE as its "Recognized Centre of Excellence in Ph.D. Studies in Economics" in Central and Eastern Europe. In 1993 and 1994 CERGE-EI was also officially recognized as one of the Centers of Excellence in Economics Education in Central and East Europe by the US AID.

As might be expected, an initiative such as CERGE-EI requires considerable resources. Indeed, CERGE-EI' s consolidated annual budget of about $2.5 million reflects the ability of all the involved individuals and institutions to generate the needed funds. Charles University has generally contributed about 15 percent of the total budget through CERGE and the Academy of Sciences about 25 percent through EI.(3) About 60 percent of the total budget has come from western and increasingly also other local sources. The Executive and Supervisory Committee has from the start placed great emphasis on fundraising as a pre-condition for establishing and maintaining high quality education and research. In this context, an important institutional development was the founding in 1993 of the CERGE-EI Foundation in the United States and in Europe. The establishment of the CERGE-EI Foundations constitutes a conscious effort to place CERGE-EI's fundraising effort on a solid and independent footing. The Boards of the Foundations have attracted key business and academic leaders and the foundations together with the ESC have proved that they can overcome the withdrawal of the first wave of western sponsors from Central and Eastern Europe and ensure that the flow of funds is adequate for CERGE-EI's development.(4)

The CERGE-EI initiative has thus created an important regional institution in a geographic area that has suffered from economic, social and political fragmentation along national and ethnic lines. If the development of CERGE-EI is successfully completed, the institution will educate a significant number of Central and Eastern European economists who will be influential in the academic and policy decision-making in their respective countries. Since CERGE-EI places great emphasis on academic excellence, exposes the students to the western academic environment, and operates on the principles of openness, academic integrity, tolerance and non-discrimination, it is poised to have a major impact on the quality of economic thinking as well as on the sociopolitical culture in these societies. The fact that many of the top academic, government, and private sector economists will have common professional roots at CERGE-EI will also be conducive to more cooperative and coordinated policy efforts at the regional level in the future. Finally, since the universities and academies of sciences were artificially kept apart in the Soviet-type system, the CERGE-EI initiative also constitutes a pioneering project of integrating the corresponding units of a university and an academy of sciences.

The principal challenge facing CERGE-EI is to maintain and further develop academic excellence and financial strength. The two goals are interrelated, since the substantial flow of funds from external sponsors has been conditioned by the academic promise of CERGE-EI and the ability and willingness of the Executive and Supervisory Committee to enforce quality standards and vouch for the quality of CERGE-EI's operations. At the conceptual and operational levels, the greatest challenge for CERGE-EI has been to provide quality supervision for graduate students at their thesis writing stage. The existing faculty is good but young and hence inexperienced in dissertation supervision. The Executive and Supervisory Committee has hence decided to bring on an ongoing basis leading senior academics from the west to assist in thesis supervision over the next several years.

The Economics Department at the Central European University (CEU)

The CEU economics program was started by George Soros and Roman Frydman as a 12 month M.A. program in Prague in 1992. In 1995, the program was moved to the Budapest campus and it was expanded to two years, with the first year taught at Essex University in the United Kingdom. In 1998 the Essex part of the program was transferred to Budapest. Over the years, the teaching staff has developed from a largely visiting faculty to a 1999 body of five full-time professors, five half-time professors, and eight recurrent visiting professors. Jacek Rostowski, the head of the economics department, played an important part in its development during this period.

The department accepts about 50 students each year and by 1999 it has graduated almost 200 M.A. students. About one-half of the graduates continue their studies at Ph.D. programs in the United States or Europe and roughly one-half go straight into full-time jobs, largely in the private sector in their home countries, but the ratios vary considerably across different years. The department accepts students from virtually the whole post-communist region. The annual budget is approximately $750,000. Costs are being kept down through the recruitment of faculty and staff from the region. Thanks to the Open Society Institute network, the CEU admits students from all over the post-communist region. This information network is an important asset that also benefits other institutions, including CERGE-EI.

Until recently, the CEU had too few permanent professors to provide a stimulating environment for research. However, that impediment is being attenuated by increasing the visiting faculty, strengthening the links to the Hungarian academic community, and launching of a weekly economics seminar together with the National Bank of Hungary and the Hungarian Academy of Sciences.

In the fall of 2000, CEU will enroll its first Ph.D. class. The Ph.D. program will be headed by Fabrizio Coricelli of the University of Sienna, while the Chair of the Economics Department will be Matyas Sylvestre. The program is designed as an American style Ph.D. program, including two years of courses, general (comprehensive) examinations and dissertation research.

The principal question is whether the Ph.D. program will have sufficient resources allocated for its success. As the CERGE-EI experience indicates, Ph.D. studies are much more demanding in terms of quality faculty time than a masters program. At present, it is unclear whether the multiple cost of an M.A. program will be forthcoming for the new Ph.D. program at CEU. Assuming it will, CEU and CERGE-EI will constitute two premier Ph.D. programs in the region.

Hungarian Ph.D. Program in Economics and Management

The so-called Budapest-Pecs Ph.D. network program was launched in 1993 as a cooperative venture between Hungarian universities and research institutes of the Hungarian Academy of Sciences. The Budapest University of Economic Sciences (BUES) and the Janus Pannonius University at Pecs (JPU) are the leading universities in this network. During the 1990s both have made significant steps towards modernizing their undergraduate and graduate training programs. BUES especially has been recognized for its leading role in curriculum reform and other higher education institution in Hungary have used BUES as the main source of recruitment of young economics and management teachers and sought its assistance in planning their doctoral programs and teaching particular subjects.

Both universities now have a critical mass of faculty members who have undergone training in the West. Their undergraduate programs are well-established and many of their faculty members are becoming known in the West and receive invitation to participate in research and teaching. As part of an EU program, the number of well-established researchers has been increased in the mid- and late 1990s. The launching of the joint Ph.D. program has been a means of consolidating early success and maintain the momentum for further development.

The aim of the doctoral program under the direction of Erno Zalai is to align higher economics education in Hungary with the more developed educational systems of the world. As a result, co-operation with domestic and foreign institutions is deemed indispensable to secure high standards and reputation.

About 10-12 students are admitted into the economics Ph.D. program each year, with 2-3 dropping out during the course of study. The students are required to complete core (theory, statistics and econometrics) courses in the first year of study and take a qualifying exam at the end of the first year. In the second year the students take courses in specialization fields (theoretical economics, applied economics and financial economics) as well as elective courses. The course work takes two years and is followed by dissertation work. Some students take their second year at a foreign university.

The Budapest-Pecs Ph.D. program is one of the most successful national Ph.D. programs in Central and Eastern Europe. It has not been designed and funded at the same level as CERGE-EI, but it is clearly an accomplished and promising program. The challenge is to maintain the development momentum and ensure that the quality of instruction and Ph.D. research matches the quality in leading western programs.

Programs in Poland

During the communist period, Poland had one of the most developed economics programs in Central and East Europe. The best known programs were at the Faculty of Economic Sciences of the Warsaw University, the Warsaw School of Economics, the Faculty of Economies at the University of Gdansk, and the Institute of Econometrics and Statistics of the University of Lodz. In general, Polish universities continue in the traditional system, whereby doctoral studies do not entail compulsory course work and only senior faculty members (those with the so-called habilitation) are allowed to supervise doctoral students. However, the Faculty of Economic Sciences of the Warsaw University and the Warsaw School of Economics have recently created an interesting joint doctoral program. As a result, I briefly describe the developments at these two institutions and the joint program below.

The Economics Faculty at Warsaw University

During the 1990s, the Faculty of Economic Sciences at Warsaw University benefited from the assistance provided by Stanislaw Wellisz of Columbia University and others in launching innovative economics curricula at the B.A. and M.A. levels. At present, the faculty runs a three-year B.A. program and a five-year M.A. program jointly with the Catholic University of Leuven, Columbia University and University of Sussex. The Faculty also operates on its own a three-four year Ph.D. program for post M.A. students.

Warsaw School of Economics

At present, Warsaw School's College of Economic Analyses is arguably the best economics program in Poland. However, the standard doctoral program of the College is quite traditional, as described above. Students hence need not take a series of classes and examinations, and they do not have to write papers before their dissertation. In practice, students do take some graduate-level courses in mathematics, micro- and macro-economics, econometrics, and some other areas.

Compared to CERGE-EI, the standard doctoral programs at the Economics Faculty of Warsaw University and at the College of Economic Analysis of the Warsaw School of Economics are relatively traditional. However, they has considerable strength in a number of technical areas and may develop into a western-style program. The Ph.D. students often write their dissertations while they are affiliated as researchers at various research institutions, such as the economics Institute of the Polish Academy of Sciences or CASE in Warsaw.

The Joint Ph.D. Program

The doctoral program administered jointly by the College of Economic Analysis of the Warsaw School of Economics and the Faculty of Economic Sciences of Warsaw University is designed along the lines of an American Ph.D. program. The students must take classes in graduate macro- and microeconomics, mathematics for economists, game theory, and econometrics. The program also offers short (two-week) intensive courses in various specialized areas of economics. These courses are taught by visiting professors (usually of Polish origin) from Western Europe and North America. Partial funding for the visitors is provided by a grant from the Batory Foundation, financed by George Soros. There are usually five such visiting professors selected each year by the Program Committee composed of professors Janusz Beksiak (Warsaw School of Economics), Urszula Grzelonska (Warsaw University), Stanislaw Welisz (Columbia University), Wojciech Charemza (Leicester University), Wojciech Maciejewski (Warsaw University), Teresa Slaby (Warsaw University), Honorata Sosnowska (Warsaw School of Economics), and Wlodzimierz Siwinski (University of Warsaw).

Given the limited resources that are available for the joint doctoral program, the program appears to be designed efficiently and seems to achieve the purpose of educating the students systematically in the first year Ph.D. level courses and selectively in various areas of specialization. The principal problem faced by the program is that it does not have sufficient resources to offer full time second year courses, attract new Polish or other Ph.D.s from western universities, and provide thorough supervision of the doctoral dissertations in all principal areas of economics.

Other Ph.D. Programs in Central and East Europe

A number of Central and East European universities have Ph.D. programs in economics. However, compared to CERGE-EI as well as the other programs discussed above, these programs are relatively unstructured and require little or no systematic course work at the Ph.D. level. The emphasis in these programs is on individual study and research, with the student often working under a loose guidance of an adviser or a committee. Several institutions have invested in preparing a western-style Ph.D. program that they are planning to launch in the near future. In view of the large number of cases, I only provide several examples for illustration below.

Slovakia

Comenius University in Bratislava has since 1997 worked under a cooperative agreement with the University of Pittsburgh. The program, headed by Kevin Sontheimer of the University of Pittsburgh and Pavel Brunovsky of Comenius University has involved training in Bratislava and in Pittsburgh of faculty from the Faculty of Mathematics and Physics of the Comenius University. It is expected that a western style Ph.D. program will be launched by the retrained faculty within a year.

A quality M.A. program has been developed at The Academia Istropolitana Nova in Bratislava. The Academia was established in 1996 as a new independent institution of graduate education. Its English language program is comparable to the first two years of a Ph.D. program. The program in applied economies is organized in cooperation with the University of Pittsburgh and the University of Technology and the Institute for Advanced Studies, both in Vienna)

Slovenia

Under communism, Yugoslavia was more open than the Soviet bloc and economics education always included some principles of market economics. The curriculum was further reformed in the 1990s, although it has not reached the degree of restructuring observed in the Czech Republic or Hungary.

Slovenia restructured its two economic programs at the Economics Faculties of Ljubljana and Maribor Universities. Western textbooks are used and many faculty members have participated in international conferences and exchange programs with Western Europe and the United States. Several faculty members at Ljubljana have U.S. Ph.D.s or have taught in the United States. However, despite relatively attractive salaries, the Ljubljana and Maribor Faculties have found it difficult to hire and retain young Slovenians with Ph.D. degrees from U.S. or Western European universities.

The Ph.D. program at the University of Ljubljana is intended for students who finished their M.A. degree. The program consists of course work in theory and econometrics and individual research program beyond. The program hence provides a relatively rigorous base but relatively little structure beyond. There is at present a concerted effort spearheaded by Dusan Mramor, Janez Prasnikar, Ales Vahcic and others to develop the Ph.D. program further.

A potentially important initiative that could lead to an American-style Ph.D. program is currently being developed by William Bader, Boris Pleskovic and Milan Vodopivec. This program may be funded jointly by the United States, European Union, The World Bank, and private foundations as part of the Stability Pact for the Balkans. The program might be located at one of the existing Slovenian institutions and it could greatly enhance the process of developing a modern Ph.D. program in Slovenia.

Croatia

Croatia's has traditionally been Western-oriented, with a number of Croatian economists having M.A. and Ph.D. degrees in economics from western universities. Because of its involvement in the war in Bosnia, Croatia has been excluded from the EU PHARE program since 1992. This has contributed to its international isolation, which has in turn led to a lowering of teaching and research standards. Many good young economists have migrated from academia to government or abroad.(6)

The University of Zagreb has the strongest economics faculty in Croatia. It has a four-year undergraduate program, a two-year M.A. program and a relatively unstructured Ph.D. program beyond the M.A. level. With appropriate level of resources, the program could be developed considerably.

Bulgaria

Given the economic difficulties in the country, Bulgaria has done well in reforming its higher economics education. A Western-style degree system was introduced and Bulgaria has attracted considerable international support, primarily from the EU. Sofia University has the most advanced graduate program in economics. In addition to a four-year B.A. program in economics, it offers a 1.5 year M.A. program in collaboration with Erasmus University, and a 3.5 year Ph.D. program. Two to four Fulbright professors teach economics at the university each year and since 1997 a consortium of four French universities has cooperated with its Faculty of Economics.

Romania

Romania has about 100 institutions of higher education, including 40 new private institutions.(7) It has adopted a Western-style degree system and recognizes Western degrees for teaching. Some universities, such as the Alexandru loan Cuza University of Iasi, have collaborative arrangements with French, Italian, and U.S. universities.

A number of universities have a Ph.D. program but the requirements and the quality of the programs usually does not measure up to the standards set in the west or at CERGE-EI. Interestingly, the group of academically best prepared students enrolling at CERGE-EI in Prague are Romanians, usually with a mathematics or engineering background.

4. Concluding Comments

As the discussion in this paper indicates, the establishment and maintenance of a quality American-style Ph.D. program is possible, but extremely demanding in the context of the transition economies in Central and Eastern Europe. The preconditions for success are careful planning and coordination both locally and internationally, allocation of considerable financial resources, strict supervision and enforcement of quality, and above all great devotion of personal time and effort on the part of a group of western and local economists. Experience indicates that establishing a quality local program is also difficult, but relatively more feasible with limited resources. Finally, an examination of the various Ph.D. programs indicates that most of them produce graduates that are not trained at anywhere near the same level as their U.S. counterparts.

In preparing the paper, I have benefited from discussions and correspondence with Marek Dabrowski, Marek Gora, Laszlo Halpern, Matyas Koman, Cristina Negrut, Boris Pleskovic, Janez Prasnikar, Kevin Sontheimer, Honorata Sosnowska, Ales Vahcic, Milan Vodopivec, and Erno Zalai. None of them are responsible for any views or possible factual errors contained in this paper.

Notes

(1.) Pleskovic et al. (1999) note that public expenditure on education has remained around 5-6% of GDP in CEE. They also find that foreign donor organizations spent an estimated $35 million in 1997-98 to support economics education and related activities in the 20 countries of East-Central Europe and the former Soviet Union included in their study.

(2.) The exception are several policy-oriented, senior researchers who were hired in EI at the time of its establishment and who operate under separate rules.

(3.) The Academy has also made a major contribution by providing the EI building in downtown Prague that hosts CERGE-EI.

(4.) Hence, after the primary initial sponsor of CERGE-EI, US AID, terminated its activities in the Czech Republic in 1996, The Sarah Scaife Foundation finished its successful three-year involvement with CERGE-EI in 1994, and two other key sponsors, the Andrew W. Mellon Foundation and the Pew Charitable Trusts started gradually to conclude their operations in Central and Eastern Europe, many predicted that this would signal the downfall of CERGE-EI. Yet, the ESC and CERGE-EI Foundation have successfully obtained support for CERGE-EI from other sources. In particular, they secured multi-year support from a number of corporate foundations, including Citicorp, Philip Morris, Coca Cola, State Street, IBM, Monsanto, Chase Manhattan, Boeing, and Marx Brother Foundation. Moreover, The Ford Foundation awarded a three-year grant to CERGE-EI.

(5.) See Pleskovic et al. (1999).

(6.) See Pleskovic et al. (1999).

(7.) See Pleskovic et al. (1999).

References

Pleskovic, B., A. Aslund, W. Bader, and R. Campbell. 1999. "A Proposed Strategy to Address Critical Economics Education and Research Needs in Transition Economies," World Bank, Mimeo, March.

Jan Svejnar William Davidson Institute at the University of Michigan Business School, Department of Economics, University of Michigan, and CERGE-EI, Prague