Think tanks and the European financial crisis

26 June 2012

Have think tanks played any role in the current European financial crisis? Stephen Boucher recently wrote an article for EurActiv in which he pointed out that their part has been limited due to the lack of attention that policy makers have paid to these institutions. Even though think tanks are undergoing a major wave of development and have been publishing material on European economic troubles, the nature of urgency of the financial crisis has resulted in policy makers looking for immediate solutions, having a rather short term mindset.

So how can think tanks maneuver in order to have a greater say in such a context? The key is innovation:

Nicolas Véron, senior fellow at Bruegel, one of the EU’s premier economic think tanks, defines the current challenge succinctly: “producing new thinking with old thinkers.” Think tanks have to identify the very narrow space for innovation, with governments handling urgency and not wanting revolutions, yet in need of innovative solutions. Finding this small opening for acceptable reform in today’s atmosphere of near panic is an art, which a few of the larger institutes have mastered.

A number of think tanks have managed to benefit from the crisis by being able to provide solutions to specific problems. For example, the Centre for European Policy Studies’ proposal for a European stability fund is now being discussed, as well as Bruegel’s analysis of Eurobonds. Others, like the Institute for Economic Affairs, have hopes that this crisis will mean that policy makers rethink the way the government is run, prioritising longer term ideas. Newer institutes such as the Institute for New Economic Thinking (INET) and the New Economics Foundation, as well as the Post-Carbon InstituteRe-Define, Economie & Générations, the Capital Institute, and the Council on Economic Policies, have emerged to challenge traditional neoliberal thinking and long term economic sustainability.

Unfortunately, there isn’t large demand for deeper reforms promoted by new think tanks just yet but it is interesting that a crisis has created an opportunity for new centres to emerge.