How does the context affect think tanks? A few hypotheses and research questions

10 July 2013
SERIES Think tanks and their context 8 items

This is the second post of a series on how context affects think tanks. The first post dealt with a number of challenges that a study into this relationship would face.

In this post I will outline some general hypotheses and research that I have been exploring over the last few years. This post is slightly longer the the first one.

I am not usually too keen to make sweeping generalisations when it comes to this issue. I have my own ideas, of course, but I like to think that they are ‘my’ ideas and therefore perfectly questionable. Others have information that I don’t. In some cases, however, I think it is possible to suggest some working rules of thumb -but even these should be taken with a pinch of salt. The following are only presented as an invitation to study them further, in different contexts and for different think tanks.

5 Hypotheses

At a more general level, I believe that think tanks are likely to be stronger if:

Hypothesis 1: There is, at least, one driving force. Whether it is the State, Elites (political, economic, intellectual, social, etc), the Market, Grassroots, or, even, the Aid Industry (although this is not sustainable), someone has to take the initiative. Think tanks do not emerge out of nothing. In China, without a doubt, the State has taken the initiative when it comes to the formation and support of think tanks; in Japan it has been the corporate world (see this paper on South East Asian think tanks).

In the US, the role of the driver has changed over the decades. In the late 1800s and early 1900s this was the role of philanthropists, then came policymakers, later on the military, then the corporate sector and private interests, and, much later, party political entrepreneurs.

In Africa, foreign Aid Agencies have held this role from before independence and, with some inspiring exemptions, are unlikely to let go any time soon.

Hypothesis 2: Other institutions are the strong. A society with a strong State, parties, markets, civil society, the media, academia, etc. is likely to have stronger think tanks. Weak institutions only allow for weak think tanks. Also, when other institutions are weak, think tanks tend to adopt some of the roles that they have failed to deliver and it is therefore harder to tell them apart from consultancies, NGOs, university departments, political movements, etc. This overlapping of functions can be positive but, more often than not, can lead to governance minefields and a complete lack of direction.

By ‘strong’ I do not mean ‘hard’ or ‘authoritarian’. Rather I am referring to them as professional, competent, well-funded, clearly defined, well-managed, etc. A strong media will work quite well with think tanks: providing them with an agenda, demanding their research and expertise, popularising their ideas, etc. A strong party system (even a single party system) will promote their formation, support their appeals for funding, inform their agendas, demand their ideas, transform them into policy solutions, etc. A healthy academic community will provide think tanks with new researchers, subsidise the long term investments in research that think tanks will need but are unlikely to afford, provide neutral spaces for think tanks to engage each other, etc. A strong private sector and market demands research and advice, pays for think tanks directly and indirectly, etc.

Hypothesis 3: There is domestic funding. A consequence of the strength of the institutions mentioned in hypothesis 2 is the availability of domestic resources. There is a clear difference between domestically funded and foreign funded think tanks. The organisational culture is different; the relevance of their analysis is always higher among domestically funded think tanks; their ability to connect between institutional fields is far greater among them, too. And the differences start to show as soon as small amounts of domestic funds begin to make an entrance. One only needs to spend some time talking to their staff and directors to notice this.

Domestic funding is also more predictable and manageable. Domestic funds come from the same political, economic and social communities that the think tanks and their researchers belong to. Funds are allocated and managed by policymakers, businesspeople and community leaders who the think tanks known well and interact with on a regular basis. And the decisions to fund or not are also domestic: whether they be political or economic, it is easy for think tanks to see these decisions coming miles ahead. More importantly, think tanks agendas emerge from the coexistence of fund and ideas.

But when it comes to foreign funders, these decisions are more difficult to understand and monitor; the relationships with the funders (often via country representatives based abroad) is impersonal and distant; and the disconnection of funds and ideas tends to culminate in research agendas driven by the interests of foreign funders rather than local researchers and policymakers. And this makes it difficult for think tanks to be relevant and therefore attractive to the few (and future) domestic funders. It is a perverse cycle.

Hypothesis 4: They have access to the right people. Besides money, the most important resource for think tanks is its human capital. A think tank without competent researchers, managers and communicators is as good as an empty tank. Even worse, a septic tank. It does not matter how much money a think tank has, without a great team think tanks will never be great.

The consequences of focusing on think tanks’ budgets and not on their capacity to use them properly are several: salary inflation that borders on the unethical, mismanagement and even embezzlement of funds, the eventual and inevitable poaching of highly qualified researchers from government agencies (who need them more), and the also inevitable damage to their reputation and to think tanks in general.

Hypothesis 5: They are not alone. A think tank director who has nobody to talk to, learn from/with, compare him/her self with, etc. is always going to struggle. A single (or a very few) large and well-funded think tank may be the pride of its donors but it is really more than a passing star. It is unsustainable.

Besides other think tanks, they also need popular and specialized publications, high level consultancies, corporations and policymaking bodies with research capacity, university research departments, advocacy organisations, programmatic parties, etc. In other words: Density.

10 Research questions

At a more specific level other things matter. And I would argue that they matter even more on a day-to-day basis for think tanks. These are more unpredictable that the factors mentioned above so I won’t offer hypotheses but rather outline some possible research questions (with a few answers thrown in by me):

Research question 1: How does labour legislation affect think tanks? Ray Struyk argues that about 70% of think tanks’ budgets go to their staff. Hence the capacity of think tanks to hire in the right conditions is crucial. Inflexible labour laws can be a real problem for think tanks whose income is not certain in the long term. Unlike other organisations, think tanks should expect their income to rise and fall with the political cycle; and they should be able to grow and shrink accordingly.

I have talked to many directors who have expressed concern about the way in which labour legislation affects this crucial adaptive capacity; either because it stops them from employing researchers for fear that they may not be able to afford them (and still be unable to let them go), or because it prevents them from rapidly responding to new opportunities by replacing their staff to match the new required skills.

Labour legislation can also affect the relationship of think tanks with their associates (non-resident researchers) as well as with interns.To be sure, I am not arguing for irresponsible and unethical employer behaviour; I was a union rep in my old job. But think tanks need to be better at understanding how labour policy affects their business models and be better at dealing with it.

Research question 2: How does tax legislation affect think tanks? Taxation can have significant effects on think tanks. One could assume that because they are usually non-for profits they do not need to worry about this, but this is not the case.  Tax policy can affect think tanks in many ways:

    • It can encourage or discourage philanthropists to fund think tanks: when asked, philanthropists tend to say that they would give more if the legislation encouraged them to do so “like in the USA”. It is not surprising that many millionaires in developing countries donate to US or UK based institutions and not their own.
    • It can limit the range of activities that think tanks can undertake: to maintain their tax exemptions, think tanks must be careful not to get involved in activities that may be considered ‘for profit’ by the authorities. For instance, short term consultancies or even trainings could be seen as profit making and subject to tax. This could affect the overall standing of the think tank as a non-for-profit.
    • Tax policy can also imply a significant burden for the organisation: not paying taxes does not mean not having to calculate them. All organisations need to follow tax rules and think tanks are not an exception. An overly complicated tax code can divert valuable time and resources away from research and communications. And this is especially important because think tanks are not always the most likely to attract the best qualified managers and accountants to help them with their finances and taxes.
    • The goods and services that think tanks need to operate may also be affected by government’s tax policy.

Research question 3: How does the exchange rate affect think tanks? Managing exchange rate volatility is one of the biggest worries for think tanks who depend on foreign funders.  With contracts in USD, GBP, EUR, CAD, AUD, etc. think tanks need to keep a close eye to small variations in the exchange rate or else risk making significant losses on their projects. This is particularly important for think tanks that seek to work regionally and employ researchers outside their country –implying having to deal with additional exchange rate challenges.

Inflation, too, can affect think tanks and their capacity to plan ahead and invest into the future.

Other cost associated to international financial transactions can have similarly important effects on think tanks capacity to work with peers and partners in their regions and globally.

Research question 4: How does access to the internet and other ICT affect think tanks? I am writing this in China but will not be able to publish it until I get back to the UK because I cannot access the On Think Tanks platform to upload it; nor can I find some of the documents that I need to finish the post. Access to international sources of information is important to me but crucial for a think tank. Without it, it can only rely on whatever is produced locally –and even that is increasingly available via digital media.

The internet is not only about websites, of course. Email communications, Skype, access to online databases, academic journals, national and international communities of practice and networks, etc. are the bread and butter of modern think tanks.

With slow internet speeds or unreliable access think tanks should struggle to keep up with their peers in other countries.  Their work is likely to be more parochial, particular, isolated, and outdated.

Research question 5: How does the nature of the political system affect think tanks?  There are two aspects of the political system that are worth considering: the political arrangement and the nature of the debate.

There is a great deal of work already on how the manner in which the State is arranged affects think tanks formation and development. Unfortunately, there are no global rules -and in fact lots of exceptions- but it is possible to use some common sense.

The greater the opportunities for influence the greater the space for think tanks to emerge -but they won’t unless there is a leading force behind them (hypothesis 1).

In the US, with a federal State and lots of levels of government and weak parties, there are plenty of opportunities for influence. Think tanks are one way in which citizens and interests groups have to do so.

In Britain, with fewer levels of government and stronger parties that control their main policy narratives there are fewer opportunities for influence so there should be many less think tanks. But there are quite a few think tanks and that is likely to be explained by other things: a political confrontational culture, a strong academia, a campaigning media that demands research and ideas from ‘wonks’, political infighting within the parties, etc. So exceptions are the rule… but exceptions can also make a lot of sense.

The nature of the debate that such arrangements generate is also important. Research on think tanks in Colombia exposed an interesting idea: during periods of political consensus think tanks lose their impetus and slowly melt away.  A small and healthy amount of political polarisation is useful for think tanks to find their space in a society.

Think tanks can also be used to break the consensus. So they can both be affected by the nature of the debate and at the same time affect it.

My sense, in any case, is that boring or unappealing politics is a turn-off for current and future thinktankers -and can therefore have a significant effect on the manner in which think tanks are run, the kind of people they attract, and the characteristics of the think tanks community.

American and British commentators have sometimes dismissed the German political and think tank scene as rather tame and boring (they have not said so in so many words but it is not difficult to infer). In the UK, the last years of the Labour government and the first years of the Coalition presented themselves in a similar light: with parties pretty much undistinguishable from each other, think tanks struggled to find their feet. There was a lot of ‘reinventing’ going on then.

Even single party States can show the level of healthy political debate that think tanks need. It is important to look beyond the big ‘indicators’ (is there multi-party democracy? freedom of the press?) and focus on the deeper stories that make up the Politics.

But, what is, I would ask, the right level of political polarisation that propels the think tank community forward? Surely, the answer will have to be specific to each political and policy space.

Research question 6: How does transport affect think tanks (within the city and with other national, regional, and global cities)? Getting the best people to work for a think thank is not always a matter of just having good people in a country or an interesting job description. If they cannot get to the think tank then they are as good as nothing. Good transport services within a city can help think tanks to employ researchers from ‘all walks of life’.

But good transport, within the city and in relation to other cities in a country, can also help them reach the different communities they need to be in touch with to be effective. Good transport means that a think tank does not have to be based right next to the centre of government or at walking distance from a university. They could very well be located in a suburb, a satellite city or even a busy down-town area and still be able to reach out to several groups at the same time and convene them without much trouble.

And the same would be true for international connections. Easy to reach airports would certainly help think tanks to convene experts from around the world.

Sure, the future of think tanks may be online. I have argued for this myself. But that is in the future. And even then personal interaction will be necessary. Think tanks may not need offices any more but they will still need public spaces and venues to convene their members and audiences.

Research question 7: How does procurement policy affect think tanks? Donors  are constantly asking think tanks to find new sources of funding. The problem is that if all donors ask the same, who can think tanks turn to? One of this alternative sources is the State. But in some countries, procurement policy makes it very hard for think tanks to access the kind of funding that they need. A study by Lardone and Roggero on public funding for think tanks in Latin America outlines the various kinds of funds available, their benefits and challenges.

In Indonesia, non-governmental-organisations (and think tanks are NGOs) cannot access public funds. In other countries, Peru for example, public procurement is too cumbersome for many small organisations to be able to manage more than a few consultancies.

Even bilateral donors who fund think tanks on a regular basis do not have think tank friendly policies. DFID, by and large, treats think tanks just as it treats consultancies and NGOs. And it is not the only one.

International donors, in particular, ought to pay greater attention to how they fund think tanks around the world. There is a clear disparity in the way that some think tanks are treated. A single funder (public and private) is likely to have one set of ‘rules’ for think tanks in developed countries and another for think tanks in developing countries; and even then they are likely to have ‘special rules’ for a few favourite or preferred think tanks in developing countries ( usually because of who leads them). It is not a matter of paying the same. Some think tanks in Africa and Asia demand to be paid the same, nominally, as think tanks in the UK or the US get paid. I prefer a Purchase Power Parity approach to funding think tanks in which the unit of comparison is the quality/quantity of output.

Research question 8: How does civil society legislation affect think tanks? This is obvious. Most think tanks are NGOs and are affected by the legislation that affects all NGOs. Usually, we focus on the general tone of the legislation: is is supportive of an open and free civil society? but pay little attention to the fine print.

For example, some codes are particularly demanding in relation to registration requirements which may not control what NGOs do but can have an effect on the number that register. Other legal frameworks include rules in relation to the source of funding that is allowed, the way it can be used, and how profits can be used (or not used). In Ecuador, for example, NGOs are not allowed to carry forward their profits into the next year and this has an effect on their capacity to accumulate reserves.

Overly controlling civil society regulation can affect the manner in which think tanks are run. In Ecuador, again, the State has deemed it necessary to dictate how long a director can stay in his or her post. This forces think tanks to change their leadership much often than it would be expected.

In many cases, civil society legislation makes it difficult for organisations with a political objectives (and all think tanks have political objectives -even if they are not partisan political) to register and NGOs; instead they have to remain as associations which can limit their capacity to access funds (public or private).

Research question 9: How does education policy affect think tanks? Education, education, education. I have banged on about the importance of looking at the education system of a country as a way into think tanks. But the study of the effect of the context ought to look at the detail as well as the bigger numbers: what are students being taught? And how?

Without critical thinking capacity think tanks cannot be expected to do their jobs. And critical thinking is not something that one can learn with a toolkit. This has to be introduced early on in someone’s education.

Later on, robust research methods and writing and communication skills need to be developed and deepened. Think tanks need these skills and cannot afford to development them themselves.

Another factor which can have an effect on think tanks is the manner in which subjects/disciplines are taught. I have always argued that one of the main problems with the Aid Industry is that it is full of ‘development experts’; generalists without a discipline. So I am all in favour for investing more in ‘traditional’ disciples such as economics, politics, science, history anthropology, sociology, engineering, medicine, art, etc. (governance, social development, gender, etc. are all fine but certainly not urgent in the developing world; and they are better learned from the perspective of a disciple). But think tanks need to be able to bring disciplines together and the manner in which they are taught affects this.

I went to a university where economists pretty much only talked to economists and studied little else but economics. It is great to have a strong grasp on the subject (even though I hardly ever practice it anymore I feel I can still manage as an economist) but I now realise that we were being trained to specialise. To work in a think tank one has to be able to work with other disciplines and therefore exposure to them, early on, would help.

Of equal importance is the manner in which the education system works. The balance between public and private, the role of the State in ensuring standards and quality, the balance between teaching and research at the tertiary education level, the focus on professional degrees as opposed to more practical qualifications, etc. All of these are bound to have an effect on think tanks’ most important input: people.

Research question 10: What kind of cities attract the best think tanks? This last factor (of this list) could be thought of as a bit of a personal indulgence. But in my experience, cities, the urban environment in which most think tanks are based, has an important effect on them. The characteristics of the city can affect think tanks in many ways, including:

    • A dynamic culture and arts scene that attracts interesting people -and interesting people is who make think tanks great.
    • A design and creative industry that can help think tanks develop their capacity to communicate to different audiences.
    • A strong financial and business sector that can be the source of much needed domestic philanthropy.
    • Green space (or open public space of any kind) make people happier -and this has an effect on all kinds of productive activity, including think tanks.
    • An identity, whether it is political, economic, social, cultural or sport related that gives the city a sense of pride and possibly even a source of competitive spirit in relation to other cities can forge a similar drive in the policy arena.
    • The presence of a sophisticated political class can inspire young bright minds to join politics -and think tanks are usually a good way in.
    • Good transport or a moderate size that allows for frequent interaction between members of the policy community including academics, students, policymakers, politicians, the media, activists, etc. will certainly help to develop the right relationships and nurture interesting spaces for debate -that think tanks can help to foster and need to develop their arguments.

These 10 research questions are an invitation for further research. There are others, I am sure. But I am not suggesting that there will be a single answer that will apply to all think tanks. Instead I think that each think tank has to pay greater attention to these factors and find out how they affect them in particular. Only by knowing how the context affects them will they be able to develop the right strategies to deal with it.

There is, of course, an overarching research question that we never ask -and it is difficult to ask. What is it about the culture of a society that promotes the support for, formation, and development of think tanks? 

Next week I will deal with some of the lessons that I learned from a recent visit to China. At a conference there, many of the key factors that affect think tanks in China were presented and discussed.