Reinvigorating European academia

Richard Portes 04 September 2005

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Lavoce.info began in 2002, three years ago. The Centre for Economic Policy Research started operations 19 years before that. Lavoce.info has had an identifiable impact on economic policy discussion in Italy. CEPR has significantly improved the environment for economic research in Europe. Yet we may reasonably ask whether economic policy in Italy is better than three years ago, whether economic research in Europe has closed any of the gap with the United States that we identified in the mid-1980s.
Twenty-five years ago, there were several good economics departments in the UK and a few research centres on the Continent that had international standards (e.g., CORE in Louvain and IIES in Stockholm). CEPR introduced a new network model that brought together selected European economists in research programmes, conferences and workshops. It developed a community of researchers. It also supported some new research centres – IGIER at Bocconi, ECARES at Université Libre de Bruxelles – and others arose, like DELTA in Paris, IDEI in Toulouse, Tilburg, CREI in Barcelona, etc. New networks, too, have been formed – IZA and CESifo, for example, and there are other new organisations like the Fondazione Rodolfo Debenedetti that foster policy-relevant research. The European Economic Association gives some sense of identity to European researchers, and the new Journal of the European Economic Association has quickly established a high reputation.
All this has been positive, no doubt. But we still send most of our best students to the United States for doctoral work, and most of the best of these stay there at least for their first jobs. Nor is there any evidence of a greater eventual flow back to Europe. And it seems even harder now than a decade ago to get the best European PhDs jobs in good American economics departments.
There has been some rise in the relative importance of empirical research in Europe, but there is greater tension now between academic incentives and policy relevance. Young researchers are now more focused on publications in top journals. That is good for standards and for the long-run future of economics in Europe, but it does make them reluctant to put effort into activities that will not generate frontier research papers, at least until they acquire tenure or comparable senior status. And even some senior researchers are less inclined to let some part of their research be driven by policy issues. Nevertheless, European presence in the top economics journals has not yet expanded noticeably. The key obstacle to progress is the inadequate competition in European academic life. The UK’s Research Assessment Exercise has introduced competition among universities for researchers, because research performance as rated by a central body is now a major determinant of university funding. But this has come from the top down. Although it generates a market for researchers, the universities are still severely constrained in the incentives they can offer. There are national salary scales, and universities have little scope for independent fund-raising, nor is there a market for students. On the Continent, the situation is considerably worse: highly centralized funding; hardly any markets or competition, either for researchers or for students; a high degree of localism in recruitment of both; often pitifully low salaries, with little flexibility; little mobility across institutions, even less across borders, despite many EU programmes that fund cross-border research exchanges.
Those EU programmes are more a symptom of the underlying problem – the lack of academic markets – than a solution to it. Again, they are top-down. The procedures for defining the programmes and their content, the selection committees, the bureaucracy that runs them all gravitate to a lowest common denominator, dictated partly by political considerations, geographical distribution, and non-scientific criteria. A comparison with the US National Science Foundation is deeply unfavourable to Europe. Putting more money into the Framework Programmes will not help at all if much of it continues to go often to second-rate research and researchers whose main skills are in rent-seeking.
Moreover, the EU programmes have no real impact on the underlying structures that impede the development of centres of excellence, that block incentives, that make it politically unacceptable to differentiate among institutions, their degrees, and their standards. Even institutions that have pretensions to international status do not have recruitment practices that are open and rigorous like those of the good American universities. Europe has no economics departments in the international top 10, perhaps even top 15, but it does have two business schools (London Business School and Insead) that compete with the best in the US. The reason is simple: the business schools are essentially in the private sector and independent of the state systems. They do not have the wealth of their American counterparts, but they do pay market-determined salaries, and they know they must compete in order to survive. Their recruitment is completely international, in coverage and in standards, both for faculty and for students. They thrive on differentiation, on ‘branding’ their programmes. They have developed some degree of institutional loyalty among their former students, which helps in funding and more broadly in the spread of reputation.
At the European level, the authorities search for a ‘European role’ – i.e., a role for European institutions over and above what member states could provide. But they do not recognise that there is a coordination failure. Any given member state might find it politically impossible to move in the direction of the market unless there were pressure from the centre and understanding that others were having to do the same. This is, however, precisely the Lisbon process. Why can we not have it in the academic context as well as in more traditional single market domain? Just as we need a spontaneous European Voice to generalise the achievements of CEPR and lavoce.info, which have come from decentralised and cooperative initiatives, so we need to create the conditions for such initiatives throughout European academic life.

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Topics:  Welfare state and social Europe

Tags:  European academics

Professor of Economics at London Business School, Founder and Honorary President of CEPR

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