2003–2004 Transitions News from the Center for Economic Research and Graduate Education - Economics Institute, a joint workplace of Charles University and the Academy of Sciences of the Czech Republic
Rebuilding Iraq hortly after the fall of Saddam Hussein’s regime, recog- Snizing the critical impact of economic training on the success of reform, CERGE-EI offered to provide doctoral study in Prague for two Iraqi students. Dr. John Agresto, senior advisor to the Iraqi Ministry of Higher Education and Scientific Research (MHESR) thanked CERGE-EI for its offer to help train Iraq’s future economic leadership, writing, “The desire for free markets and a free society is strong in Iraq. But the way there is difficult and the ob- stacles many.” From its first days, CERGE-EI has been at the crux of transition countries’ struggles to move from totalitarian, centrally-planned economies to market democ- racies. Experience in the post-communist world has dem- onstrated that early intervention to establish an effective higher education system is a critical component of support- ing the enormous political and social changes necessary to build democracy and prosperity. The first student from Iraq, Twana Salih, was admitted directly to the PhD program and arrived in February. Other students will come from Iraq for the summer Preparatory Semester after having completed the Spring 2004 Distance Learning Program (see “DLP” p.3.) Based on their per- formance during the summer and the availability of funding, they will be invited to Prague for further study. The New Director Scholarly exchanges have also been initiated between CERGE-EI and Iraqi faculty. rofessor Lubomir Lizal was appointed by “This office [MHESR],” continues Dr. Agresto, “is PCharles University and the Academy of Sci- pleased and proud of our connection with CERGE-EI. ences of the Czech Republic as the second Direc- While we have a number of worthy scholarship and ex- tor of the combined CERGE-EI, effective July 1, change programs, this particular program is perhaps the 2003. Professor Lizal was recommended for the most generous and probably the one most needed…. What position from a strong field of internal and exter- you are doing…will go a long way toward making the fu- nal candidates by a committee of Executive and ture here in Iraq freer and more prosperous.” Supervisory Committee (ESC) members and other distinguished academics. “I’m happy to be handing over the reins to CERGE-EI has been joined the effort to assist Iraq by Mirek Lizal. He is a highly-regarded scholar of the the Ministry of Foreign Affairs of the Czech Republic, economic transition and has played a key role in which will provide tuition support for a limited number important policy debates, especially on EU acces- of students to study at CERGE-EI, and by Czech TV sion issues,” says outgoing Director Jan Hanousek, foundation People in Need, which is underwriting who held the position from 1999–2003. “Mirek students’ travel to Prague. If you are interested in aiding is ideally suited to lead CERGE-EI through its next this critical effort, please contact the CERGE-EI set of challenges.” (For Professor Lizal’s background Foundation at
Directors’ Letters
Jan Hanousek writes: Lubomir Lizal writes:
Dear Friends of CERGE-EI, Dear Friends of CERGE-EI, We’ve had tremendous success in meeting each of In reflecting on CERGE-EI’s goals as its new Director, CERGE-EI’s goals in the past four years. On the education I find that, thanks to Jan Hanousek’s dynamic leadership front, CERGE-EI received accreditation from the New York and the work of the many others at CERGE-EI, I am State Board of Regents with highest commendation. Each inheriting a healthy, vibrant institution with exciting year the number of applicants continues to grow, with challenges ahead. I see three aspects to our development. 248 students seeking study at CERGE-EI in 2003. The First, how can we improve what we already do well, entering class has gone from 23 in 1999 to an average of i.e. graduate education and research? We must expand the 39 over the last four years. Each year the number of countries size and variety of entering classes and mentor students represented in our entering class expands, and we have made to complete the program, with quality uncompromised. As a major commitment to enrolling students from those countries from the post-communist world enter the EU there countries having the most difficult time navigating the will be an explosion in the need for economists with the transition. In terms of production, dissertation defenses expertise of CERGE-EI graduates. CERGE-EI’s autonomy tripled, from 4 a year in the two years prior to my tenure to and unique assets enable us to respond to the changing needs 12 a year in my last two years in office. We’re also meeting of our students and their employers, and we are investigating our goal of quality as we attract scholars from top U.S. and possible additions to our degree programs. European programs to our faculty and as our graduates Along this same line, CERGE-EI needs to expand the get jobs at top institutions and organizations both in the faculty and provide an environment that both nurtures and region and internationally (see “Alumni,” p.19). We’ve challenges them. In my first year as director, CERGE-EI expanded our educational mission to teach undergraduate hired two terrific new faculty members and tenured four students from the U.S. about the history and potential current ones (see pp.12–13). Our facilities, library, and of Central Europe as they forge friendships with classmates technology must also be kept on the cutting edge to ensure from the region (see “Study Abroad,” p.15). We’ve renovated that faculty and students alike have the tools needed to do our 19th century palace into a 21st century facility, built an incisive research. Increasingly, that research will address audio-visual lab, and expanded the library to become the issues beyond the transition, such as understanding the largest facility for economics in Central and Eastern Europe, complex unknowns of EU accession and globalization. an open-stack resource that serves not just CERGE-EI but Second, how can we help build stability and prosperity the larger academic and business community. in the developing world? We are expanding outreach Being involved in such a rapidly growing and changing programs to build capacity at institutions going through institution presents constant challenges and endless their own transitions to become modern economics programs opportunities. While I hope that I have been able to provide (see “Urals State,” p.3), bring modern economics education a vision for the future and a sense of what can be possible, I to geographic areas lacking access (see “Success,” p.3), and know that everything we have achieved, and will achieve, assist countries just beginning their transitions from relies on the contributions of many people: the academic command to market economies (see “Iraq,” p.1). staff and advisors, our students, and our donors and funding Finally, how can we make our finances more stable so agencies. I thank you all for your support and forthright we can realize these goals? CERGE-EI is cost-effective; the critiques. I feel good about what we – the faculty, students, annual budget is less than the cost of a single Abrams M1 alumni, ESC, Nadace and CERGE-EI Foundation boards tank. The return on investment, however, is measured not – have accomplished in the last four years and about in targets destroyed but in the lives our graduates touch and handing over the reins of leadership to Mirek Lizal. I also the insights they generate. Yet, the hardest part of my job is look forward to devoting more time to my research and to convincing donors that success is a reason to keep funding, working with the remarkable men and women who teach not a reason to stop support. I extend my heartfelt gratitude and study at CERGE-EI. to past supporters and invite you to join us in our ventures to come. Page - 3 Distance Learning Success Well over a decade into the transition, modern undergraduate training is still not available at many regional universities in post-communist countries. In the past this has meant that most CERGE-EI students have come from a limited number of major centers, but no longer. In order to offer an opportunity for students from more remote regions to succeed in eco- nomics PhD training, CERGE-EI has begun a Dis- Urals State Cooperation tance Learning Project (DLP) in conjunction with the University of Hradec Kralove for students with good “For the democratic development of Russia, it’s very prior knowledge of algebra and calculus and proficiency important to build good educational institutes not just in English. in Moscow, but throughout the country,” says Professor Klara Sabirianova, formerly Associate Dean at Urals Developed by CERGE-EI faculty members Daniel State University in Ekaterinberg, Russia, and currently Munich, Sergey Slobodyan and Viatcheslav Vinogradov, Assistant Professor at the University of Michigan’s the DLP uses the internet to provide applicants while William Davidson Institute. “CERGE-EI is a successful they are in their homelands with economics courses that example of reform within a state university but with a prepare them for rigorous CERGE-EI PhD studies. new governance structure and teaching model and a Through extensive interaction with professors and grad- new way of thinking about the relationship between uate student tutors, students’ study skills and habits teaching and research. If we could have centers like this can be trained while they become familiar with modern throughout the region, it could have a huge impact.” economics concepts. Participation in the DLP provides the CERGE-EI admissions committee with much more As part of its mission to introduce new methods of extensive information about eventual applicants than economics education and research to post-communist is typically available. countries, CERGE-EI, with the help of two grants from USAID, is partnering with the William Davidson A pilot test of the program was conducted in the Institute (WDI) in Ann Arbor, Michigan, and the spring of 2003 and included students from Armenia, School of Economics at Urals State University (USU) Croatia, Estonia, France, Georgia, Mexico, Kazakhstan, to establish the Russian-American Business Institute Poland, Russia, Tajikistan, and Turkey. Students stud- (RAMEC) at Urals State in Ekaterinberg. USU already ied undergraduate level microeconomics and macro- had a good model for undergraduate economics train- economics, supplemented with special modules in ing, but was uncertain of how to build a modern gradu- applying mathematics to economics. All five Central ate program, especially the critical step of incorporating Asian DLP students who had been recommended for research. “In Russia, university professors are paid to the Preparatory Semester by the DLP faculty were ad- teach. My colleagues have the talent and enthusiasm mitted to the PhD program in Fall 2003. (Two of these [for doing research],” continues Professor Sabirianova, students are profiled in the box on p.8.) One student “but they don’t have enough access to the research related that he passed one of the DLP quizzes while on network and have only limited information, so they don’t realize what they can achieve.” Continued on page 8 CERGE-EI is providing support for RAMEC through exchange and training programs, data sharing, capacity building for managing nonprofit organiza- tions, and joint research on major transition topics. The core collaboration involves three projects, one on transition economy efficiency comparing the Czech Republic and Russia, a second (also involving WDI) on labor market studies of the Czech Republic and Estonia, and a third on the impact of foreign direct investment on product selection by domestic firms. Continued on page 19 Page - 4
While CERGE-EI has had success in building a strong core of young faculty, support for permanent senior faculty of comparable quality is beyond the young institution’s means. This problem has been addressed by an innovative program of long-term visiting faculty who spend up to a quarter of their time in Prague each year.
“I could not know, as I stood on the deck chatting Jan Svejnar with Josef about possibly bringing some Czech students to Pitt for PhD work, that I would be returning to It’s hard not to believe in destiny if you are Jan Prague for Josef’s conference in 1989, nor could I have Svejnar. As a student in his last year of high school dreamed that by year’s end, a mass movement spear- and the son of a pro-reform Czech economist at the headed by university students would topple the com- ILO in Geneva during the Dubcek era, Jan fled Czecho- munist government and end 20 years of Soviet slovakia in 1970 with his guitar, skis and 13-year-old occupation. Almost overnight, the basic conditions sister, one step ahead of the police who were about to were established to create a new democracy with a revoke his exit visa. Eighteen years later, Svejnar was market economy, and the need for economic reform an economics professor at the University of Pittsburgh, was staggering. after earning his BA from Cornell and his Princeton “I saw an incredible opportunity to give something PhD, when a chance encounter with a Czech researcher back to my birth country and to apply the tools a superb at a conference in Vienna would, yet again, profoundly American university education had given me. I would alter his life. also need to call upon the research and organizational “As the Danube riverboat glided through Vienna’s experience I had gained as a college professor, as a di- lush suburbs Svejnar spied a pensive middle-aged man rector of a couple of programs while teaching at Cornell, standing by the railing. “Can I buy you beer?” the and as a consultant for the OECD and the World Bank. genial Svejnar asked. “The others were talking and The question was how we could pull it together when drinking and enjoying themselves after a long day of so much assistance was needed and there were so many conference presentations," Svejnar relates now. “I saw avenues it could take.” him standing apart Talks with Josef Zieleniec led the two economists from everyone else. I to decide that building a first-rate economics PhD pro- wanted to know what gram based in a transition country would be the best his story was.” He was way to contribute. “It’s the old story of ‘Give a man a Josef Zieleniec, a fish and he can eat for a day. Give him a net, teach him senior researcher at how to use it, and he can feed his family for a lifetime.’ the Czechoslovak This is what we needed to do, not just bring in experts Academy of Sciences, from the West to make suggestions and leave, but to which was expecting grow a whole new generation of economists right here him to organize in the in Central Europe who would be grounded in the cul- next year the first in- ture and experiences of their homelands and also have ternational economic the skills and the commitment to take their countries conference in Czecho- into the future. It made sense to locate the new Center slovakia since 1948. for Economic Research and Graduate Education He had been sent to (CERGE) in Prague to focus the program regionally, Vienna to see how these conferences were done. so it could draw students from all the former Soviet “Unfortunately, his sponsors had given him little Republics.” Austrian currency for food or local transportation, and In the uncertain early days of the transition, the certainly nothing for beer.” This act of interest and hurdles to making CERGE a reality were significant, kindness by the young Czech emigre professor initi- but how to organize it and how to support it finan- ated a friendship that continues to this day and, over cially were most critical. In a rough division of labor, the next 16 years, would result in the formation of the Zieleniec handled the Prague end of things, finding most successful and far- reaching of the post-commu- space and dealing with the bureaucracy. Svejnar handled nist education initiatives, CERGE-EI. the U.S. side, fund-raising, finding faculty, and forging
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English by listening Jan Kmenta to the radio and puzzling through “If you have a goal in life, then go for it. Persever- newspapers with ance is the key to success. This what my mother taught an English/Czech me and what I tell my students,” says Jan Kmenta, dictionary.” While Professor Emeritus of Economics and Statistics at the this experience has University of Michigan and one of the world’s most given Professor respected econometricians. Such a characterization Kmenta empathy might cause the unassuming Professor Kmenta to raise with CERGE-EI his eyebrows over his dark-framed glasses. CERGE-EI students, none of has been extremely fortunate to have him as a visiting whom are native professor since 1992, an experience that has brought English speakers, him full circle back to the country of his birth and the in their struggles aspirations of his youth. with the language, Perseverance was a quality Jan Kmenta would need he points out, “They in great measure as the experiences of his youth drove have one great advantage that I did not – the CERGE-EI him away from Czechoslovakia and his goal of becom- English department.” (See English, p.10.) ing a statistician. Born in 1928, he survived Prague’s The terms of Jan’s visa required him to work under Nazi occupation to enter the Czech University of government contract as an indentured laborer for two Technology in 1947 with great hopes for his own future years. “My first job was literally breaking rocks in a and for that of his country. “After the liberation, we stone quarry, far from anything like a university. I put believed the days were over forever when the front page all of my effort into getting transferred to Sydney, where news would be the names of those executed the night I finished out my contract working as an orderly in a before. Then in 1948 the Communists seized power TB hospital.” He began evening study at Sydney and began repressing all dissent. I was in a student University, supporting himself by day as an accountant. resistance group, and when a close friend was arrested Again, perseverance paid off; he graduated with first- I knew I would be next. When the police queried my class honors and became a naturalized Australian citizen mother as to my whereabouts, she told them, ‘If you in 1955. After teaching for two years, he won a had a twenty-year old son, you wouldn’t know where Fulbright Scholarship for graduate study in economics he was either!’” It would be two years before Jan’s at Stanford University. parents would know even if he were alive. “At Sydney University statistics was taught in the With the help of a family friend, Jan escaped to economics department, very much along British lines, West Germany. “I thought this was just temporary emphasizing argumentation and verbal sophistry rather and that the Western powers would never let the than rigorous analysis. Stanford was a revelation! Not Communists take over Czechoslovakia. I had no doubt until my studies there did I learn that all economics is that within six months, I’d be riding back on an American about optimization subject to constraints.” Using his tank, throwing chocolate to the cheering crowds.” background in mathematics and statistics, Jan thrived Instead, it was the beginning of a long exodus from in this atmosphere where economics was emerging as a family, homeland, and educational opportunity. After science, and where he had close contact with professors, more than a year in German refugee camps, Jan got a such as Arthur Goldberger and Nobel Prize winner visa to emigrate to Australia, at that time the only country Kenneth Arrow, who chaired his thesis committee. other than Venezuela that would take Czech refugees. Over the course of his more than forty-year career “When I arrived, the only English words I knew Professor Kmenta has produced an impressive body were ‘I love you.’ I spent my spare time learning of innovative work. In addition to his path-breaking
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These distinguished economists are committed to CERGE-EI and devote significant energy to mentoring students and their junior colleagues, returning repeatedly over a period of several years. The articles on these pages tell the remarkable stories of two very long-term “Friends of CERGE-EI.” Page - 6
Svejnar Continued from page 4 alliances with American academic and philanthropic institutions. “I threw myself into it completely, talking to any- one who would listen about the critical need for grow- Sponsored Students ing the expertise for the reforms that needed to hap- Fall 2003–Spring 2004 pen, not only at once but well into the future, until these fledgling democracies had fully made the transi- tion to healthy free-market economies,” Svejnar said. Citigroup Endowment I was only too aware of how fragile such changes could Alexandr Cerny, 4th year, Czech Republic be from memories of my father and the Dubcek re- Ekaterina Goldfain, 3rd year, Russia forms of 1968–70. The communist establishment saw Karin Joeveer, 4th year, Estonia them as such a threat that it triggered the Soviet inva- Eugen Kovac, 3rd year, Slovakia sion and occupation of the next two decades.” rd Since founding CERGE in 1991 with Josef Zieleniec Teodora Paligorova, 3 year, Bulgaria (who became Foreign Minister in the first Czech gov- ernment and is currently a Senator in the Czech Par- Coca-Cola Foundation liament), Jan Svejnar has continued to work towards Vitezslav Babicky, 4th year, Czech Republic improving the economic health of the region. In 1993, rd soon after Czechoslovakia split into two countries, he Dmitri Kolyuzhnov, 3 year, Russia rd was asked to head the Economics Institute, a research Katarina Svitkova, 3 year, Slovakia arm of the Academy of Sciences of the newly created Anton Tyutin, 4th year, Russia Czech Republic. Svejnar accepted on condition that EI be merged with CERGE to form a new entity, Altria Group CERGE-EI. nd “It was not an easy task. Old attitudes die hard. Zvezda Dermendzhieva, 2 year, Bulgaria As in other communist countries, research and higher Meruyert Kenshimova, 2nd year, Kazakhstan education were kept totally separate. It took six years Yulia Rychalovska, 2nd year, Ukraine to houseclean and hammer out a joint workplace Viorel Roscovan, 2nd year, Moldovia agreement, but now CERGE-EI is recognized as the model for other institutions in successfully integrating Mobility Support th these two functions.” Jan Bena, 4 year, Czech Republic In addition to his continuing involvement with Karin Joeever, 4th year, Estonia CERGE-EI’s development through teaching and pre- siding over its Executive and Supervisory Committee, Saint-Gobain Professor Svejnar’s research agenda has evolved to re- th flect his fascination with transition problems and his Andrei Medvedev, 4 year, Belarus keen interest in public policy. In 1994 he became eco- nomic advisor to Czech President Vaclav Havel until Havel’s retirement in 2002. As his reputation in the field of transition grew, Professor Svejnar was tapped to be co-director of the Transition Programme at the “I’m always interested in building bridges, in Center for Economic Policy Research (CEPR) in Lon- connecting the people and the resources. For example, don, a member of the board of trustees of National WDI and CERGE-EI have entered into a partner- Council for Soviet and East-European Research ship with Urals State University in Ekaterinberg, (NCSEER) in Washington, and a consultant to both Russia to revamp its economics program.” (See Urals the European Bank for Reconstruction and Develop- State, p.3.) Although Professor Svejnar concludes his ment (EBRD) in London and the Organization for WDI directorship in May 2004, he continues to re- Economic Cooperation and Development (OECD) in main active at CERGE-EI, serving on both its aca- Paris. In 1996, the University of Michigan offered him demic and financial boards. “When I think about it, the prestigious Everett E. Berg Professorship and asked I’m amazed at what we’ve accomplished, but I also him to head the William Davidson Institute (WDI), know that as CERGE-EI matures, its best work is yet which specializes in transition issues. to come.” Page - 7
Kmenta Continued from page 5
Monte Carlo studies of the Cobb-Douglas production tremendous resource to governments for designing and function, published from1963–66, his most signifi- implementing public policy. cant achievement came in 1967 when he provided an “Where would I like to see CERGE-EI go in the approximation of the CES production function, which future, aside from continuing to do what it already does simplified an extremely complex mathematical equa- well? I’d like to see the local faculty continue to take tion to a formula that could be easily estimated, giving on more academic and administrative leadership. I’d the nascent field of industrial organization a new set like to see it find new ways to extend its reach to other of powerful tools for studying firm efficiency. transition and developing countries, through projects Professor Kmenta regards his textbook, Elements like the DLP and GDN. For instance, a country such of Econometrics, one of the most widely used and as Iraq, which was as heavily collectivized as former translated textbooks in the field for the past several Czechoslovakia, could learn a great deal from our decades, as his greatest accomplishment. “I am really experience with the transition process. Most impor- pleased this book has reached so many people. It’s tantly, I’d like to see CERGE-EI continue striving for wonderful to be at a conference in Rio or Delhi, and excellence in advancing economic knowledge, and have someone say ‘I learned econometrics from your imparting the ideal that even seemingly impossible goals book.’” Professor Kmenta authored or co-authored two can be attained.” more books plus numerous articles and research reports. He also served for many years as an editor of the Review of Economics and Statistics and the Journal of the American Statistical Association. His teaching career has included positions at Stanford, the University of Wisconsin, Michigan State, and the University of Michigan. In 1989 and 1991 the Michigan Economics Society honored him with their “Best Professor” Award. Fluent in German, he has also taught at the University of Bonn, and for many summers at the University of Saarland, which awarded him an honorary doctorate in 1989. In reflecting on his 13 years at CERGE-EI, Pro- fessor Kmenta observes that, “It was a miracle – creating a thoroughly American graduate program under the circumstances that prevailed in the region, with the inherited fossilized and politicized system of university education, the split of teaching and research, and the bureaucratic web of rules and vested interests! I had hoped that by now, more than a decade into the transition, more universities in the former communist countries would look like CERGE-EI. But it is clear to me that it will take much longer for a truly effective system of higher education to evolve. “This is why CERGE-EI is so necessary – it’s a successful model of what can be accomplished. It’s doing a first-rate job of training a new generation of economic leaders, who are a scarce resource and will CERGE-EI hosted Madeline Albright, United States remain so for some time. With its great students and Secretary of State during the Clinton Administration, research environment, it’s one of maybe three places and Michal Zantovsky (not pictured), the newly- between Germany and Siberia where young native- appointed Ambassador of the Czech Republic to Israel born economists with PhDs from excellent Western and translator of Albright’s book, Madam Secretary, universities would consider taking a job. I also know into Czech. They spoke with students, faculty and from my experience reviewing grant proposals for guests at a CERGE-EI/NYU symposium in Prague funding agencies that CERGE-EI is the source of in October 2003. most of the best research in the region, as well as a Page - 8
DLP Success Continued from page 3 a trip in the countryside. He found an internet coffee Ulanbek Mamatov, (photo, right) from the Kyrgyz bar in a small town and took the quiz surrounded by Republic, learned about CERGE-EI while browsing cattle on one side and an automobile junk pile on the the internet. For him, the DLP was “a great opportu- other, physical evidence of the program’s success in the nity, though virtual, to develop relationships with purposes for which it was designed – bringing modern instructors…and get the background I needed in a short economics education to even the most remote regions. time. It provided the foundation of my future studies at CERGE-EI, offering books, materials and guidance oth- Based on the success of the pilot program, CERGE-EI began full-scale operation of the DLP in the spring of erwise unavailable to me. Without the work in the DLP 2004. Local partners provide students with the loan I would have been in trouble in the Preparatory Semes- of textbooks and access to the internet while CERGE-EI ter, which contained more mathematics and was harder, maintains control of academic material. As resources faster and more overwhelming.” Ulanbek reports that become available to support more participants, part- so far he finds CERGE-EI to be an excellent environ- nerships will be established in additional regional cen- ment in which to study, one the he would recommend ters throughout the transition countries. A list of local to any potential PhD student. partners and more information on the CERGE-EI DLP can be found on the web at: www.cerge-ei.cz/DLP. Umed Temurshoev, (photo, left) from Khorog, a little town in Tajikistan, graduated summa cum laude from the American University in Central Asia in Bishkek, Kyrgystan, where he learned about CERGE-EI after its representatives visited AUCA. “I believed from the beginning that my success depended on mastering the material in the DLP, so I completed it at the same time I was finishing my bachelor’s thesis.” Umed likes CERGE-EI’s approach to economics, where the “math- ematical description of phenomena is made in ways much closer to reality than I learned in his undergradu- ate studies.” Umed believes the CERGE-EI program is “undoubtedly one of the most solid economic educa- tions to be found in Europe.”
Student National Origins 2003
CERGE-EI continues in its goal of educating the future economic leaders of countries in transition throughout the world. The national diversity of our student body can be seen in the chart below. About 60% are men; 40% are women.
Czech Republic 18% Poland, Hungary & Slovakia 23% Russia 14% Romania 3%
Albania, Bulgaria, Other Former Former Yugoslavia Soviet States 7% 13% Central Asian Other Ukraine Republics 12% 7% 3% Page - 9
Left to Right: Peter Latham, MA, Applied Linguistics, Kings College, University of London; Sarah Peck, MA, Cultural and Linguistic Anthropology, Temple University; Laura Mentz, MA, Rhetoric and Linguistics, Catholic University; Richard Stock, MA, Literature and Theory, University of Illinois at Urbana-Champaign; Lawrence Smith, MA, Teaching English as a Foreign Language, University of Reading. CERGE-EI English Department
ompleting a Ph.D. program is an ambitious undertak- ing duties currently focus on assisting students and faculty Cing, even when one is familiar with the education in polishing their professional papers. process and is operating in one’s own language. Incoming The CERGE-EI English program is unique among CERGE-EI students face the double challenge of having little major doctoral programs in economics. The support it pro- experience with an “American-style” education as well as not vides is important to success in the profession and a signi- being native speakers of English. The primary purpose of the ficant factor in attracting both students and faculty to CERGE-EI English Department is to provide students with CERGE-EI. As an increasing percentage of students in the skills necessary to successfully participate in economic doctoral programs in the United States come from non- research and publication at the highest levels. English speaking backgrounds, visitors to CERGE-EI fre- Laura Mentz, head of the English Department, says, “The quently observe that the innovative program at CERGE-EI teaching philosophy is process-oriented and focuses on each and the integral role English instruction plays in its doc- student’s individual needs, in line with current effective lan- toral program provide a model that should be adopted at guage-learning strategies. This method is especially impor- their own institutions. tant in CERGE-EI’s situation, where the students need to With growth in the number of students in recent years, learn not only language but also a whole culture of academic the department has expanded to its current five members. discourse. The goal is to teach these skills in the first two It is now standard that CERGE-EI English instructors have years, then support advanced students in the process of writ- an M.A. in Teaching English as a Foreign Language (TEFL), ing their dissertations with intensive one-to-one guidance or a related field, and several years of teaching experience in on their writing.” higher education. All English faculty, three Americans and Beginning in 1991 with no defined department and a two Britons, are native speakers with continuing research single instructor (who was responsible for teaching both stu- interests in TEFL and other fields. dents and staff), by 1996 the CERGE-EI English depart- Each member of the English Department usually has ment had grown to three instructors who taught students taught most of the students at least once by the end of a academic writing, provided editing assistance for the whole cohort’s first year at CERGE-EI. This familiarity brings a institution, and aided the administrative staff with their feeling of community that is not often found in higher edu- English. At this time CERGE-EI decided to upgrade and cation. The English and economics programs have evolved professionalize the English Department, granting its mem- to be more integrated, with professional, specialized lan- bers full faculty status. From 1997 to 2002, under the guid- guage instruction filling the needs of the students and the ance of Sarah Peck and Will Seng, the department intro- institution as the result. In the summer of 2003 this inter- duced a well-articulated curriculum focused on academic connection was recognized when a member of the English writing and presentation skills. Remedial courses were de- Department faculty, Richard Stock, was named Deputy veloped for those who lacked basic grammatical skills. Edit- Director for Graduate Studies at CERGE-EI. Page - 10 New Faculty CERGE-EI consistently seeks to expand the scope of its faculty. These two rising young economists are typical recent additions to CERGE-EI’s accomplished staff. Libor Dusek grew up in Petr Zemcik’s research in- Jihlava, a small historic city terests are financial econom- in the beautiful highlands of ics, macroeconomics and Vysocina, Czech Republic. time series econometrics. An economics graduate of His teaching includes inter- the Faculty of Social Sci- national finance and eco- ences, Charles University, he nomics of transition. A earned his PhD from the member of the Academy University of Chicago in of Economics and Finance 2003. Libor has worked as and the Midwest Econom- an advisor to Czech Minis- ics Association, he also ref- ter Vladimir Mlynar, as an economic researcher at the erees for the Journal of Applied Econometrics and Com- Liberal Institute in Prague, where he conducted a parative Economic Studies. Born in Zilina, Slovakia, policy project on deregulation of the Czech electricity Petr grew up in Olomouc, Czech Republic. He received industry, and as a research assistant to Prof. Michael his first MSc with Honors in Econometrics and Block at the Progress and Freedom Foundation. “From Operations Research from the Prague School of Eco- him I learned to think like an economist – about nomics and received his second MA degree and his everything!” PhD from the University of Pittsburgh. Having specialties in public economics, law and Dr. Zemcik subsequently taught at the University economics, and industrial organization, he is interested of Pittsburgh, Southern Illinois University, and in applied micro, both empirical and theoretical, Concordia University, Montreal. He has also worked especially if it is policy-relevant. His latest research for the National Science Foundation and PHARE on concerns the political economy of retirement age and various projects. the deadweight costs of forced retirement. Dr. Zemcik had diverse reasons to accept the Working at CERGE-EI, Dr. Dusek feels, provides position of financial economist at CERGE-EI and a remarkable combination of teaching at an American- returning home after working in the U.S. for almost style PhD program, doing solid research, and living in 11 years. He is now enjoying his principal research his homeland. “I think CERGE-EI has made amazing interests while working at a world-class institute, espe- progress over its 12 years and I feel excited about the cially relishing CERGE-EI’s access to financial data on opportunity of contributing to its future development.” emerging markets and to the Prague Stock Exchange. Austin and Noguera WB News Editors CERGE-EI permanent faculty members, Professors Andrew Austin and Jose Noguera, were named coor- dinating editors for the World Bank’s Transition Newsletter in November 2003. Their function as coordinating editors is to find, commission or write research-based work aimed at a policy audience. The World Bank newsletter, “the Newsletter about reforming economies,” is published regularly by the Development Economic Research Group [DECRG] of the World Bank and reports on economic, business and social information in the world’s transition economies. Transition Newsletter also chronicles lending activities of the World Bank and the International Mone- tary Fund and tracks related research, publications and meetings. Dr. Boris Pleskovic, Research Administrator and Vice-Chair of the Research Committee at the World Bank, is the Managing Editor. Page - 11 First Faculty Tenures at CERGE-EI ERGE-EI achieved a major milestone in June statistics and applied econometrics, including dynamic C2003 when Byeongju Jeong became the first models of transition economies, privatization, and faculty member granted tenure by the Executive applied finance. The author of many articles, his work and Supervisory Committee (ESC). Four more faculty, has appeared in the Journal of Economic Perspectives, Jan Hanousek, Stepan Jurajda, Lubomir Lizal, and the Journal of Comparative Economics, Economics of Kresimir Zigic, were awarded tenure in January 2004. Transition and the European Economic Review. “Tenured faculty are the heart of an academic insti- Professor Hanousek was the first joint Director of tution,” said Jan Svejnar, ESC chairman. “They provide CERGE-EI, from July 1999 to June 2003. both stability and leadership. The appointment of core faculty who will increasingly assume responsibili- Stepan Jurajda graduated from the Prague School ty for CERGE-EI’s future is a major step towards of Economics (1992) and received his MA (1995) and sustainability.” PhD (1997) from the University of Pittsburgh. He joined the CERGE-EI faculty in 1997. In 1999, he Each candidate for tenure was thoroughly reviewed became the first Czech economist to win a NATO by external evaluators and a committee of senior Post-Doctoral Fellowship and was a Visiting Research economists from the ESC. “These terrific young Fellow at Princeton University. His work on labor economists are to be congratulated for their excellence economics and applied econometrics has been sup- in research, teaching, and service. The independent ported by the Volkswagen Foundation, the EU, and external evaluators made clear that our candidates were the National Science Foundation and published in the equal in quality and reputation to those receiving tenure Journal of Econometrics, and the Industrial and Labor at major western programs” said ESC member Professor Relations Review. Orley Ashenfelter of Princeton University. These permanent appointments are financed by endowment Lubomir Lizal, who is the current Director of gifts from the Citigroup Foundation and the Andrew CERGE-EI, received his Masters (1992) from Czech W. Mellon Foundation. “We are grateful for the Technical University and his PhD (1998) in economics support that has made this important development from CERGE-EI. Mirek has held fellowships at the possible,” said Randall K. Filer, CERGE-EI Foundation Tinbergen Institute, the University of Pittsburgh and President and Professor at CUNY. the University of Michigan. He joined the CERGE-EI faculty in 1998, specializing in the economics of Byeongju Jeong has a BA from the University transition, applied microeconomics, industrial organi- of Texas (1991), and an MA (1994) and PhD (1996) zation and econometrics. He has been awarded from the University of Minnesota. Since 1997, Bee has research grants from the EU, the GDN, and the World been an assistant professor at CERGE-EI. His academic Bank, for whom he has also been a consultant. His interests include monetary, macro, international and articles have appeared in journals such as the Review development economics, and his articles have been of Economics and Statistics and Emerging Markets published in the International Economic Review and Review. the Journal of Development Economics, among others. Professor Jeong currently holds a World Bank Research Kresimir Zigic holds a BA (1982) and MA Fellowship and a GDN Research Grant. (1988) from the University of Zagreb, where he served on the faculty through 1990. Kreso came to Prague Jan Hanousek received his PhD in statistics from in 1991 to join CERGE-EI’s first cohort and became Charles University in 1989 and was among the first its second graduate, in 1996. A CERGE-EI faculty faculty hired at CERGE-EI. Honza has held visiting member since 1995, Kreso specializes in the interna- appointments at Princeton University and the Univer- tional economics and industrial organization including sity of Pennsylvania. He held CERGE-EI’s first the economics of innovation and R&D policy. His named faculty chair, having served as Citigroup articles have appeared in such journals such as the Professor of Financial Markets from 1997 to 2003. In European Economic Review and the Journal of 2002, Czech President Vaclav Havel appointed him Development Economics. a full professor (a national title in Central Europe), making Honza one of the youngest Czech academics For more information on CERGE-EI faculty and ever to be so honored. His interests center around students, go to www.cerge-ei.cz and click on
Integrity and CERGE-EI
One of the motivating principles of CERGE-EI is to ingrain in current and future leaders of the transition economies an understanding that free markets do not mean unconstrained markets. Capitalism requires an underlying framework of transparency and absence of corruption. This framework is important in established economies as well as emerging markets, as has been driven home by recent activities of two key members of the board of directors of the CERGE-EI Foundation, USA, as well as by ongoing work at CERGE-EI.
John Reed became interim Chairman and CEO of the New York Stock Exchange in late September 2003, to replace former Chairman Richard Grasso, whose $140 million compensation package helped to create an uproar concerning improper NYSE board activities. Reed’s long career in banking, including his term as Chairman and CEO of Citigroup from 1985 to 2001, had been untainted by scandal, and he was chosen for that reason, as well as for his long-standing reputation for financial acumen. Jamie Dimon, CEO of Bank One Corp., said at Reed’s appointment, “John has a strong moral compass and is enormously respected.” Reed has set an ambitious set of tasks for himself during his time at the NYSE, including major reform of the organization’s governance structure to remove conflicts of interest between the exchange’s regulatory and market promotion roles. Mr. Reed has been a CERGE-EI Foundation director since 1997 and has been a vital supporter of the program, personally and professionally.
Miriam Z. Klipper, who has been an integral member of both the CERGE-EI Executive and Supervisory Committee and the U.S. Foundation since their inceptions, is Assistant District Attorney in New York County. In this capacity, she recently brought an indictment on 15 counts of Grand Larceny in the First Degree and two counts of Criminal Possession of Stolen Property in the First Degree against Viktor Kozeny, a resident of The Bahamas, who was charged with stealing $182 million from clients of 15 investment funds managed by Omega Advisers, a private Manhattan firm. Among the investors were Columbia University, which lost $15 million, and the Common Fund, a non-profit educational investment fund, which lost $4.5 million. The international insurance firm AIG also was an investor. Manhattan District Attorney Robert Morgenthau credited Ms. Klipper for conducting the lengthy and difficult investigation, including gathering evidence from Eastern Europe, the Channel Islands and Switzerland, showing that Kozeny had illegally manipulated the sale of privatization voucher options for personal profit, among other charges. Ms. Klipper had also played a role in investigating former executives of U.S.-based Tyco Corporation for schemes to defraud public investors.
These activities by board members in the U.S. echo the role being played by CERGE-EI faculty and students in the transition countries. When the World Bank commissioned a major study calling for reform of Czech capital markets, CERGE-EI Professors Jan Hanousek and Randall Filer joined the study team to provide local expertise and CERGE-EI students were employed to conduct data analysis. The consolidation and stabilization of the Czech banking sector in recent years has been the responsibility of Czech National Bank Governor Zdenek Tuma, a former CERGE-EI faculty member, assisted by Bank Board Member Michaela Erbenova, a graduate of CERGE-EI. Josef Zieleniec, founder and first director of CERGE-EI, was a Czech representative to the Constitutional Convention of the European Union in 2003 and a member of the convention’s working group on economic governance. During 2003, he also worked with Transparency International, the only international non-governmental organization devoted to combating corruption, to design changes to strengthen the Czech Republic’s law on corruption and conflicts of interest.
Research conducted at and/or supported by CERGE-EI has focused on issues of corruption, financial market structure, tax avoidance and the underground economy in countries as diverse as the Czech and Slovak Republics, Romania, Ukraine, Russia, Croatia and Bulgaria. Page - 13
2003 CERGE-EI Income and Expenses CERGE-EI’s 2003 budget was $3.0 million, excluding grant-financed expenditures on research and other programmatic activities. The distribution of income by sources and expenses by categories is shown below.
2003 INCOME SOURCES Interest & Earned Income incl. Endowment Income 6.7% Charles University Grant Overheads 22.1% 8.0% Individual Donations 7.7%
International Organizations 14.4% Foundation & Academy of Sciences of CR Government Grants Corporate Donations 26.7% 0.9% 13.5% 2003 EXPENSES Physical Plant & Building Renovation 12.7% Permanent Faculty Seminar & Research Support 26.4% 1.7% Materials & Supplies 7.1% Library 10.0% Senior Part-Time Faculty 4.4% Computer Department 4.3% Development & Public Relations Support Staff Student Stipends & Mobility 6.4% 8.6% 18.4%
Global Development Network Projects
ERGE-EI has continued as the Central European coor- summaries and completed papers, are available for the first Cdinating institution for the Global Development two rounds of the completed competition. Network (GDN), charged with assisting in developing The fourth round is being run during 2003–2004, with indigenous research capacity in Central Europe. grants beginning in January 2004. As with the third round, The most significant project undertaken, in terms of CERGE-EI has obtained a supplemental grant of $190,000 budget and interest throughout the region, was the third from the World Bank’s Education Policy Research Initia- round of the Regional Research Competition. Out of over tive to commission and sponsor research projects dealing 130 applications from throughout the region, 33 research with education policy and reform in transition countries. grants were made to scholars from more than 20 institu- CERGE-EI’s goals are to support innovating research in tions in 10 countries. The recipients of these grants met at this important area and to build an ongoing network of CERGE-EI in early August 2003 to discuss their prelimi- scholars dealing with education policy issues. nary results and receive feedback on their projects from Among the topics under investigation in the third and CERGE-EI faculty and scholars drawn from universities fourth round are: Transparency of Monetary Policy in the and research institutes in Western Europe and the U.S. EU Accession Process, Cost-Sharing and Accessibility of These projects focus on social policy reform, monetary Higher Education, Labor Market Flexibility and Commut- policy of EU accession counties, impact and efficiency of ing in the Baltic States, Reform Models of the Czech educational reforms, labor market flexibility and commut- Pension System, Education of Roma minorities, and Tax ing between states in the Baltics, and other policy impact- Harmonization in EU Countries. For a full list of projects ing issues. Final results, including non-technical policy supported, go to: www.cerge-ei.cz/gdn/#rrc. Page - 14 Working Papers
Long before being published in peer-reviewed journals, CERGE-EI research is available as discussion and working papers. Discussion papers are preliminary and available only from their authors; they are listed at: www.cerge-ei.cz/publicat. Working papers appear when research is closer to final form and can be downloaded in their entirety from the CERGE-EI website. Selected abstracts are:
Michal Kejak, Stephan Seiter, and David Vavra, “Accession Trajectories and Convergence,” no. 219 The effect of EU accession on several Central European countries is analyzed using a small open-economy version of a two-sector endogenous growth model. Initial conditions and accession conditions generate substantially different convergence paths.
Polona Domadenik, Lubomir Lizal and Marko Pahor, “Effect of Macedonian Enterprise Break-Ups on Performance” no. 216 Using firm-level data, the effects of enterprise break-ups on firm performance is studied. The performance of enterprises that remained intact is compared to the performance of those that experienced spin-offs and the newly established subsidiaries. Results suggest that breakups were guided managerial self-interest rather than efficiency or performance.
Jiri Podpiera, “Does CPI Approximate Cost-of-Living?: Evidence from the Czech Republic,” no. 214 An original method based on a simultaneous partial equilibrium model evaluates second order bias in the CPI approximation of the Cost-of-Living. The substitution bias, i.e., the difference between the growth rate of the CPI and the growth rate of the COL, ranges from -0.83 to 0.51 percentage points a year. On average, the bias statistically vanishes at a time horizon of five quarters.
Dirk Engelmann and Hans-Theo Normann, “An Experimental Test of Strategic Trade Policy,” no. 212 When firms compete in a Cournot duopoly and know the subsidy decisions when choosing output, the theoretical prediction is that firms are subsidized. Experimental results find that governments only rarely subsidize. Not subsidizing is rational given our observa- tion that firms do not play according to the subgame perfect equilibrium when subsidies are given.
Evzen Kocenda and Jan Svejnar, “Ownership and Firm Performance after Large-Scale Privatization,” no. 209 The effect of ownership on post-privatization performance is analyzed for Czech firms. Concentrated foreign ownership improves economic performance, but domestic private ownership does not, relative to state ownership. Foreign firms engage in strategic restructuring by increasing profit and sales, while domestic firms reduce sales and labor cost without increasing profit.
Jose Noguera and Susan Linz, “A Theoretical Model of Barter in Russia,” no. 207 The growth of barter transactions in Russia during the 1990s is explained by the high opportunity cost of using fiat money and a tight credit market making it optimal for firms to barter if they have access to that transaction technology. Less risky firms will rely on barter and managers may avoid restructuring because it jeopardizes their access to alternative transaction technologies.
Jan Babetski, Laurence Boone and Mathilde Maurel, “Exchange Rate Regimes and Supply Shocks Asymmetry: the Case of the Accession Countries,” no. 206 This paper reviews the pros and cons of early EU enlargement. Time varying correlations that differentiate between the transition and the most recent period find an ongoing process of demand shock convergence, but supply shock divergence.
Sergey Slobodyan, “Indeterminacy and Stability in a Modified Romer Model,” no. 205 This paper considers the well known Romer model of endogenous technological change and its extension where different intermedi- ate capital goods are complementary. Necessary and sufficient conditions for the steady state to be interior and strictly positive are derived, with the steady state being determinate only if the model parameter values belong to a certain set.
Dietrich Earnhart and Lubomir Lizal, “Effects of Ownership and Financial Status on Corporate Environmental Performance,” no. 203 The effects of corporate ownership structure and financial performance on environmental outcomes is analyzed in a transition economy. Privately owned firms have better environmental records because they perform better financially. Concentrated ownership also increases environmental performance.
Stepan Jurajda and Heike Harmgart, “Sex Segregation and Wage Gaps in East and West Germany,” no. 202 Occupational and firm-level sex segregation and wages are examined for West and East Germany, where anti- discrimination policies were recently implemented. Social-security wage records from 1992 and 1995, including a matched employer-employee sub-sample, shows large differences in the size of the wage gap, but not in the degree of segregation across Germany.
David Vavra, “Strategic Interactions, Social Optimality and Growth,” no. 199 The impact of strategic interactions among a small number of research-intensive firms on the rates of growth is analyzed when investment decisions impact production behavior of rivals. The type of competition can have a great effect on the rate of growth.
Juraj Valachy, “Price Setting in Transition: The Effect of Takeover on a Petroleum Firm,” no. 197 When the largest Slovak petroleum firm was controlled by its managers, only negative changes in input prices were reflected in the output price. After the takeover of the firm by a foreign strategic investor, gasoline prices reacted symmetrically to input prices but asymmetrically to competitors’ prices. Page - 15
U.S. Study Abroad Thrives at CERGE-EI
The Undergraduate Program in Central European Studies (UPCES), CERGE-EI’s U.S. undergraduate study-abroad program in Prague, has been blossoming since its first semester in Fall 2001. UPCES is attracting growing numbers of highly motivated and academically gifted students from top U.S. universities, including the University of Michigan, University of California, Brown, Boston College, Princeton, Cornell, Purdue and Columbia.
UPCES growth is the result of continued marketing, exposure, and student word-of-mouth extolling its excellent faculty, quality facilities, and focused priority on solid academics. These qualities separate UPCES from other study abroad experiences in Prague’s crowded market and have allowed the program to continue to attract motivated students and prestigious institutions.
CERGE-EI provides core instructors, and UPCES’ partnership with the Faculty of Humanities of Charles University (FHS), under the leadership of Dean Jan Sokol, brings leading scholars in the areas of politics, history, and the visual arts to the program. UPCES also employs a number of independent scholars from Charles University and the Academy of Sciences of the Czech Republic to teach important topics in sociology, language, literature, and cultural studies.
A significant recent development for UPCES is its exchange agreement with the University of California system. UPCES at CERGE-EI serves all 10 campuses of the University of California as its study center in Prague. In the yearlong program, designed by UC and UPCES, UC students spend the fall in either Moscow or Budapest, then come to Prague to study with UPCES in the spring. In addition, through this agreement students from the FHS and CERGE-EI can take advantage of the exchange opportunity to attend UC campuses.
A basic UPCES philosophy is that its students should return to their home institutions showing measurable academic progress, in contrast to the problem occurring with many study-abroad programs of students having lost academic ground upon returning to the U.S. In many cases, poor academic quality and high student-teacher ratios in study-abroad programs contribute to this lag. UPCES, however, has focused on steady expansion while maintaining the intimacy necessary for an outstanding academic focus. This process ensures UPCES’ ability to provide the best atmosphere for academic and social development while accommodating the program’s need to grow. With 20 enthusiastic students by its fifth semester, UPCES is a vibrant addition to the CERGE-EI community.
For more information, please visit the UPCES website at: http://www.cerge-ei.cz/abroad. Page - 16
2004 PhD Aurelijus Dabu- Assistant Professor at Tilburg Uni- sinskas (Lithuania) is now Senior versity (The Netherlands) in Fall Economist at the Bank of Estonia, Alumni Notes 2003 teaching graduate economet- responsible for inflation analysis. rics at the Department of Econo- As an EU accession country, there metrics and Operations Research is considerable interest in Estonia nance of my contacts at CERGE-EI and is a member of CentER, T.U.’s as to what the rate of inflation will quite important. I was very glad to business and economic research in- be and whether Estonia will man- find out that Tallinn has a small but stitute. Pavel credits CERGE-EI age to satisfy the Maastricht con- very nice and lively Old Town. Also, with introducing him to econom- vergence criterion to join the euro I enjoy that Tallinn is located by the ics “in an interesting and rigorous zone. “In this context,” Aurelijus sea.” way, making use of my previous writes, “I am expected to improve mathematical education, facilitating the ‘inflation block’ of the Esto- While completing her thesis, my understanding on both an in- nian macroeconomic model and external student Dana Hajkova tuitive and deeper level. I also re- assess Estonia’s prospects to satisfy (Czech Republic) is working as an ceived a significant amount of train- the inflation criterion.” Aurelijus economic analyst in the Country ing at CERGE-EI in crucial skills is also teaching undergraduate Studies Division of the OECD in such as academic writing, presen- macroeconomics at the Estonian Paris, currently preparing the Eco- tation, etc., and a wealth of knowl- Business School and will co-teach nomic Survey of the Czech Republic. edge about the job market and a doctoral course in advanced She is very much enjoying her work working in academics to help me macro at Tallin Technical Univer- and credits CERGE-EI with prepar- to prepare and successfully start my sity in Spring 2004. Aurelijus ing her for it, with a “solid back- academic career. I think this kind spent the summer of 2003 as a ground in economic theory and of program and support is to some visiting researcher at the Estonian econometrics” and the “personal sup- extent exceptional for a European central bank and based on his port, encouragement, and help” she university and very good for performance and the pending received from her professors. She is CERGE-EI students. completion of his CERGE-EI continuing to work on her disserta- “I want to use the time and re- PhD the Bank offered him a tion (“Essays on Corporate Financ- sources available to me now to go permanent position as “the first ing in Transition”), and her develop- on with my research agenda. My wife ‘new’ (non-soviet-type) PhD at ment as an economist (“For this, and I are settled in Tilburg, arrang- the Bank.” CERGE-EI gave me a good basis!”), ing our household and having our Aurelijus says, “I am happy but she is also taking the opportunity first child in this relatively quiet and with the work environment at the to explore the beautiful city and coun- child-friendly place.” ECB, although there is the short- tryside with her husband, Jan Hajek. coming of there being no senior Galyna Vereshchagina (Ukraine), economists working here on a 2003 graduate Pavel Cizek who will defend her PhD disserta- permanent basis, making mainte- (Czech Republic) was appointed tion at CERGE-EI in the spring of Page - 17
2004, has accepted a position as Assistant Professor in the Economics Department at the University of Iowa, to begin in fall 2004. “Believing I should focus on my strong points and better developed skills in the begin- ning of my career, this opportunity to work with a number of people in Iowa pursuing research in my field seemed a tremendous opportunity.” Galya’s economics interests are in the fields of social security systems, insur- ance, financial derivatives, and equi- librium in macroeconomic modeling. In perhaps an ideal example of Expansion of Boards international mobility in economics, while Galyna was leaving for Iowa, CERGE-EI’s Executive and Supervisory Committee (ESC), which ap- 1996 CERGE-EI PhD Karel Janda proves hiring and promotion of faculty, oversees coordination of CERGE-EI’s (Czech Republic) returned from six various sources of support and ensures the institution’s academic standards, years at the University of Iowa to join added three new members in 2003. Joining the ESC were Professors Richard the faculty at the Institute of Eco- Blundell, Roger Gordon and Michelle White. Richard Blundell is nomic Studies, Charles University Leverhulme Research Professor at University College London and Research and the University of Economics in Director of the Institute for Fiscal Studies, London. A fellow of the British Prague. Academy and the Econometric Society, he is the recipient of the Economet- ric Society’s 2000 Frisch Prize. In 2004 Professor Blundell is serving as Jacek Cukrowski (Poland), President of the European Economic Association. Roger Gordon is Professor CERGE-EI’s first PhD graduate of Economics at the University of California at San Diego. In addition, (1995) has just accepted a position he is currently an Editor of the Journal of Public Economics, a Research as Senior Regional Adviser for Mil- Associate of the National Bureau of Economic Research and the Centre for lennium Development Goals (MDG) Economic Policy Research, and a Fellow of the Econometric Society. Previ- at the United Nations Development ously he taught at Princeton University and the University of Michigan. Program’s Regional Center in Bratis- Michelle White is Professor of Economics at the University of California lava, Slovakia, where he will be respon- at San Diego after having previously taught at the University of Pennsyl- sible for programs “covering all areas vania, NYU and the University of Michigan, as well as in Beijing and of economic and social life for 22 Moscow. An Associate Editor of the Journal of Economic Perspectives, she countries in transition, so I hope that is also a Director of the American Law and Economics Association and a in a short time I will know even more Research Associate at the National Bureau of Economic Research. about the region.” In addition to these external members, five CERGE-EI faculty mem- bers, Byeongju Jeong, Jan Hanousek, Stepan Jurajda, Lubomir Lizal, and Martina Lubyova (Slovakia, Kresimir Zigic, who achieved tenure in 2003 and 2004, have also been PhD 2002), has moved from New appointed to the ESC. (See “First Tenures,” p.11.) Delhi, India, to Moscow, where she is serving as Senior Employment In May 2003, Raymond J. Batla joined the Board of Directors of the Specialist in the International Labor CERGE-EI Foundation. Mr. Batla is the managing partner of the inter- Organization’s Regional Office for national offices of Hogan & Hartson L.L.P., one of Washington D.C.’s Eastern Europe and Central Asia. major legal firms. Mr. Batla has been especially active in international energy project financings, including the first significant project financing Peter Silarszky (Slovakia, PhD closed in Central and Eastern Europe without governmental credit or per- 2001) was accepted into the World formance guarantees. Fluent in Czech, Mr. Batla served as a member of Bank’s highly competitive Young Pro- the International Observer Delegation to the 1990 National Elections in fessionals Program, which enrolls ap- the Czech and Slovak Federal Republic. He founded the firm’s Prague office proximately 30 out of 10,000 appli- in 1991 and was resident in Prague through 1993, when he moved to the cants each year and is the main entry firm’s London office. He is a member of the bars of Texas and the District point for careers as professional of Columbia, is admitted to practice before the U.S. Supreme Court and is economists at the Bank. a Registered Foreign Lawyer with the Law Society of England and Wales. Page - 18
Naming Opportunities ENDOWMENT Citigroup Foundation The functions and purposes of CERGE-EI are as diverse as the need for spon- The Andrew W. Mellon Foundation sors, and the opportunities are as great for CERGE-EI supporters as for the Jan Svejnar and Katherine Terrell Institution and the countries it serves. Benefactors can be involved in many different giving and naming opportunities: CERGE-EI DONORS 2002–04 √ Visiting Faculty: Annual Cost per Professorship (4–6 available per year) BENEFACTORS $30,000 annually, or $500,000 endowment: ($100,000 and Above) For senior visitors to assist in thesis supervision and research coordination. Donors can fund a visiting professorship with their names attached and may specify a region, Altria, Inc. country of origin, or a particular specialization in academics or research. Citigroup Foundation √ Permanent Professorship: Annual Cost per Professorship (20 available per Coca-Cola, CR, s.r.o. year) $30,000 annually, or $500,000 endowment: John S. and Cynthia Reed Foundation For supplemental compensation and research support to promising young faculty so The World Bank as not to lose them to more lucrative jobs in the West or the private sector. Faculty may be supported in specific fields of economics according to the donor’s wishes. PATRONS √ English Language Professorships: Annual Cost per Professorship (4 per year) ($50,000 up to $100,000) $15,000 annually, or $250,000 endowment: Alan Brown For qualified ESL teachers to train graduate students to write clearly and effectively Deutsche Bank in English, and to ensure that scholarship at CERGE-EI is presented effectively to State Street Foundation the world. √ Student Fellowships: Annual Cost per Student (120 per year) $13,500 DONORS annually, or $200,000 endowment: ($10,000 to $50,000) Sponsors can designate that scholarship recipients be from specific countries or re- Anonymous gions or specialize in particular fields of economics. Ceska sporitelna √ Student Mobility: Cost per Student Semester (12 per year) $7,000: Compagnie de Saint Gobain To enable outstanding advanced students to spend a semester or a year in Western SIS Europe or North America as a part of their dissertation research. √ Publications: Annual Cost $20,000: CONTRIBUTORS To distribute the results of CERGE-EI research to the international community. (Up to $10,000) This program funds the working and discussion paper series, et al. Konrad Adenauer Stiftung √ Library: Journal Collections in a Specific Area (10 per year) $8,000; Book Raymond J. Batla Collections in a Specific Area (10 per year) $5,000: Beltfilm, s.r.o. To maintain and deepen the largest and most current collection of economic litera- ture in Central and Eastern Europe, which is housed in one of the few open-stack CK Patriot Travel libraries in the region. Donors may sponsor general collecting or a particular field. Faculty of Social Sciences, Charles U. √ Computer Facilities: Cost per Faculty or Student Lab Computer (20 per year) Randall Filer and Barbara Forbes $2,500; Network Maintenance (per year) $20,000: Blanka Hadova To replace and upgrade on a 5-year cycle over 100 computers used by students and Robert and Margaret Hollback faculty. Costs include network connections and software. Miriam Klipper √ Seminar Series: Annual Cost per Series (4 per year) $10,000: Eugene and Ellen Layman To bring leading scholars to CERGE-EI to share ideas with local scholars. Potential William and Jutta Lewis donors may wish to fund seminars in particular areas of economics. KMa, s.r.o. √ Virtual CERGE-EI: Annual Cost (per year) $50,000: Lubomir Lizal To develop and maintain an on-site audio-visual center that will enable teleconfer- Marketa Mlikova encing, videotaping, and real-time video transmission of seminars, forums, panel The Page and Otto Marx Foundation discussions, dissertation defenses and classes, opening CERGE-EI events to a world MCM, s.r.o. audience through the Internet. Ministry of Foreign Affairs, C.R. √ Post-Doctoral Fellowships: Annual Cost per Fellowship (2 per year) $12,000, NIF I three-year commitment requested: Philip Morris (Tabak), CR To provide summer salary and research support to CERGE-EI graduates who accept Oldrich Picek academic employment at other universities in transition countries. Richard Quandt The unique venture at CERGE-EI is possible only through the Gerard Roland support and understanding of both Charles University and the Miroslav Singer Jan Svejnar Academy of Sciences of the Czech Republic, Wasserstein Perella Foundation as well as the generosity of our sponsors. Page - 19
CERGE-EI CERGE-EI Foundation USA Supervisory Boards Orley Ashenfelter, Professor, Princeton University Raymond J. Batla, Jr., Managing Partner, Executive and Supervisory Committee Hogan & Hartson, LLP Prof. Philippe Aghion, Harvard University Alan Brown, Group CIO and Chairman, Prof. Orley Ashenfelter, Princeton University State Street Global Advisors, Ltd. Prof. Richard Blundell, University College London Louis C. Camilleri, Chairman and CEO, Prof. Randall K. Filer, City University of New York Altria Group, Inc. Prof. Roger Gordon, University of California, Douglas N. Daft, Chairman and CEO, San Diego The Coca-Cola Company Prof. Jan Hanousek, CERGE-EI Randall K. Filer, Professor, City University of New York Prof. Byeongju Jeong, CERGE-EI Miriam Klipper, Asst. District Attorney, Prof. Stepan Jurajda, CERGE-EI New York County, New York Ms. Miriam Klipper, Asst. District Attorney, Jan Kmenta, Professor Emeritus, University of Michigan New York County, New York William W. Lewis, Director Emeritus, Prof. Jan Kmenta, Professor Emeritus, The McKinsey Global Institute University of Michigan Richard E. Quandt, Professor Emeritus, Prof. Lubomir Lizal, Director, CERGE-EI Princeton University Dr. Petr Nejedly, Academy of Sciences of the John S. Reed, Chairman and CEO, retired, Citigroup Czech Republic Jan Svejnar, Professor, University of Michigan Prof. Richard Quandt, Professor Emeritus, Princeton University Nadace CERGE-EI CR Prof. Gerard Roland, ECARE and Stepan Jurajda, Assoc. Professor, CERGE-EI University of California, Berkeley Josef Kotrba, Partner, Deloitte & Touche, C.R. Prof. Avner Shaked, University of Bonn Martin Kratochvil, Director, Bonton, a.s. Prof. Joseph Stiglitz, Columbia University Tomas Prochazka, Administrator, The Golem Club. Prof. Jan Svejnar, University of Michigan Dipak K. Rastogi, Vice Chairman, Emerging Markets, Prof. Michelle White, University of California, Citigroup San Diego Miroslav Singer, Corporate Finance & Recovery Director, Prof. Ivan Wilhelm, Rector, Charles University PricewaterhouseCoopers, CR Prof. Josef Zieleniec, Senator, Parliament, Czech Republic Nadace Patron: Prof. Kresimir Zigic, CERGE-EI Josef Zieleniec, Senator; Parliament, Czech Republic
Urals Cooperation Continued from page 3 Through these research projects, the USU faculty The collaboration has extended the opportunities and students are introduced to methods and standards for growth and development of all three partner insti- of modern scientific inquiry maintained at CERGE-EI tutions. Commenting on USU reinventing itself as a and WDI. As part of the research collaboration process, modern economics research institution by emulating CERGE-EI faculty give lectures at USU on theoretical the successes of CERGE-EI, Professor Sabirianova approaches to transition economics with special empha- observes, “Many people have the idea that Russia’s prob- sis on the micro- and macroeconomics of the reform lems are so specific that an American model could never process, plus other aspects such as the effects on work there. Because CERGE-EI is a good translation political economy and input markets. The fact that of a U.S. higher-education model to a transition-country CERGE-EI is located in the region means that USU situation, nobody can blame us for trying something students and faculty can come to Prague relatively often that won’t work. We already know it works!” for workshops and conferences at various stages of For more project details, go to: the research. It gives them the opportunity not only
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