January 25, 2017

Unwanted advice. What Russian economic think tanks do with the independence they did not want

This post is a Review of the BOFIT policy brief 3/2016: “Domestic and external factors in the development of Russia’s economic think tank sector” by Yakovlev A., Freinkman L., Zolotov A. 

The paper considered for this review has been published as a policy brief of the Bank of Finland. The three authors are affiliated with the Association of Russian Economic Think Tanks (ARETT). The entire policy brief has two main themes: first, an attempt to summarise the emergence of Russian economic think tanks and, second, the recent problems these think tanks face after Russian authorities cut their funding. Despite the disadvantages of this article, it is worth reading. It shows how the Russian economic expert establishment on the one hand feels itself abandoned by the Russian authorities, and on the other hand craves to return under its patronage.

Theme 1:
The emergence of Russian economic think tanks

The authors of the brief start their narrative in the 1990s. They point out that until the beginning of 2000s, Western (primarily American) institutions strongly assisted the Russian and Eastern European market reforms with experts and funding. Yakovlev et.al acknowledge a significant contribution to the creation of the Russian economic think tank expert community made by organizations such as the World Bank, TACIS, USAID and Soros Foundation.

The authors then transition to the beginning of 2000s, stating that by that time the demand for economic analytics was represented not just by the Russian federal government, but also large business groups such as those headed by Mikhail Khodorkovsky, Oleg Deripaska and Andrey Vavilov.

The researchers state that this increase in the number and type of potential customers, though being clearly beneficial for Russian think tanks, somehow had a negative impact on the stability of Russia’s economic reform strategy. Thereby, they present it as motivation for the Russian government’s actions to follow, particularly the dismantling of Yukos Company and the subsequent submission of large businesses to Kremlin.

With this, the authors make an attempt to justify the actions of the Russian government in the 2000s, and keep this trend throughout the entire policy brief. They attribute the exodus of foreign assistance programs from Russia, not to the government’s crackdown on foreign NGOs, but to the boosting of federal R&D spending. This is only partly true considering, for example, the fate of Open Society Foundations (OSF), which is hardly mentioned by the authors. OSF experienced significant problems with Russian authorities as early as 2004 + only to be finally banned under the “foreign agent law” in 2015.+

The apparent sympathy of Yakovlev et.al. to the monopolisation of the think tank sector by Russian authorities can be explained by the fact that since the beginning of the 2000s, the federal government became the major client of Russian economic think tanks.  Moreover, they claim that under these conditions: “Russia’s economic policy analysis sector had recently reached its maturity”. However, the authors undermine their own argument by trying to present “Strategy 2020”+ as ‘a high point  in the development of Russia’s think tank sector’ because, although Russian authorities ordered this economic program to be written, it was never approved. Thus, according to the authors, the biggest achievement of the Russian economic think tanks is that their primary client ignored their major work. This fact alone questions the maturity of Russia’s economic policy analysis sector.

Theme 2:
The recent problems of economic think tanks

In order to identify the modern problems of the Russian economic think tank sector, Yakovlev et.al conducted two surveys in 2013 and 2015. The researchers selected their respondents among 38 ARETT members and 8 non-members. They also classified the participating think tanks into big and small, according to the number of key experts in them. The results were mostly predictable: large think tanks enjoy larger budgets, demonstrate higher level of development, and show more resilience to challenges.

Among the biggest challenges to Russian economic think tanks respondents named insufficient funding, disregard of the authorities (the customer) to their advice, and shortage of qualified staff. The authors hardly address the insufficient funding issue, only tangentially connecting it to the lack of international cooperation between the Russian think tanks and foreign funds due to the “foreign agent” law. The brief does not explain why the Russian federal government requests the advice of the economic expert community, but does not follow it. However, they thoroughly stop at the issue of the shortage of qualified staff and ascribe it to lack of “basic economic training” of many of Russian think tanks employees. With this, the authors keep undermining their own argument on the maturity of the Russian think tank sector.

After describing how the members of ARETT solved their financial problems with the USAID think tank grant, the authors reach rather unexpected conclusions. For example, they claim a superiority over the leading EU think tanks, which allegedly “shifted to influencing policy in Brussels”. Considering the almost zero-influence of the Russian economic think tanks on the Russian economic authorities, which they admitted to earlier in the text, it is puzzling how the competition between EU think tanks for influencing EU policy can be even considered a criticism.

Similarly, if Russia has “a large unsatisfied demand for economic policy analysis”, why did the ARETT members need a USAID grant to save themselves? If the demand for the economic expertise requires the emergence of new unconnected to Kremlin sources, why regret that “Russia’s current political leadership unfortunately fails to grasp the value of independent policy analysis”?

Final notes

Considering that one of the purposes of this brief appears to be to popularise (perhaps even advertise) the ARETT, many of the conclusions of Yakovlev et.al. seem to harm their cause rather than promote it. They claim to be independent, but clearly hope to recover governmental financing, which they received for 10 years. They claim to have insiders within the government, but fail to make that government listen. They state that the Russian economic think tanks industry is mature, but refute this statement by saying that the leading think tanks lack qualified staff. They admit that the Russian government demonstrates the increasing “intolerance of competition of ideas and concentration of demand to a few federal government institutions”, but claim that the problems of the Russian economic think tanks can be solved with an opportunity to work with the regional authorities and large businesses.

Maybe the reality is less contradictory. I would argue that the Russian sector of economic analytics is in deep crisis. Yakovlev et.al described this crisis in detail, however they deny it and even claim perfect competitiveness. I support my position with three arguments. First, the problems of Russian economic think tanks will not be solved by the demand of regional authorities, primarily, because the authors exaggerate this demand. With the current state of the Russian economy, if the regional authorities require economic experts, it is much cheaper for them to hire professionals from local universities, than look for an economic think tank in Moscow. Moreover, without the patronage of the federal government it can be pretty hard to ensure that the regional authorities will actually pay a think tank. For example, it took IRP 4 years of litigation to extract a part of their payment from the Volgograd authorities.+ Second, Kremlin submitted the large business players to its will in the beginning of 2000s. Therefore, with the aforementioned intolerance to the competition of ideas, it is very unlikely that the federal authorities will change their course of action out of sympathy to the financial problems of the ARETT members. Third, as I wrote in my previous post: the status-quo of the relationships between the government and think tanks became more arbitrary with the introduction of the foreign agent law in 2012. Now, the privileged position allows the ARETT members to enjoy the USAID grant. However, this can quickly change if some of the experts upset Kremlin.

About the author:

Ivan Polynin:  MA in Political Science from Central European University (Budapest, Hungary). He is an independent researcher currently working on the topic of authoritarian regimes and their supporters.

Read more from: Ivan Polynin