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Think Tanks Need a Development Strategy
Think tanks in Russia today are better developed than their counterparts in East European countries, said HSE Professor Andrey Yakovlev, Director of the Institute for Industrial and Market Studies, when he presented his report 'The Evolution of the Expert Community: New Think Tanks and Their Role in Shaping Economic Policy' at the annual conference of the Association of Russian Economic Think Tanks (ARETT).
Yakovlev gave a summary of the findings of a collaborative research project between the HSE and ARETT which examined the current status of Russian economic think tanks, focusing on 46 centres, including ARETT members and non-members. The authors conducted 12 in-depth interviews with think tank directors and two expert interviews with the President of the New Economic Association Victor Polterovich (see Economic Sociology, 2013, vol. 14, Issue 3), and the Director of ZIRCON Research Group Igor Zadorin (ibid., 2013, vol. 14, Issue 4).
Some of the key findings show that think tanks need to come up with new business strategies. Strong Moscow-based centres could find solutions by entering new markets, such as participating in international tenders, offering services to regional governments, and responding to the emerging corporate demand for expertise, while provincial think tanks, now struggling to survive, should seek to provide better quality of service – perhaps by collaborating with local universities and major analytic centres in the capital.
From Small Groups to Market Leaders
Good economic policy-making is impossible without expert knowledge. As Yakovlev put it, "Over the past decade, think tanks have played a major role in policies and strategies globally,". Back in the 1990s, Russia faced a shortage of high quality economic analysis. Many of the teams which later developed into independent think tanks grew out of projects supported by Tacis, the World Bank, USAID, and other international donors. "A major customer or a long-term grant at the start-up phase helped gain a foothold in the market and to be recognised as a new organisation, rather than just a group of experts," Yakovlev explained.
By the early 2000s, Russia already had a number of strong think tanks competing for ideas and supported by contracts from the Russian government and businesses as well as by international grants.
But the situation changed dramatically in the mid-2000s when demand for analytics in Russian business dropped sharply after the Yukos case and foreign foundations began to scale back their activity in Russia. At the same time, a massive growth of federally-funded R&D projects made federal ministries and agencies the main consumers of analytics.
The two ‘market leaders’ in winning contracts for federal research projects – the HSE and the ANE-IEP – actively recruited teams of experts and absorbed increasing numbers of government contracts.
Demand for Expertise Hit by Crisis
Russia's analytical expertise, like many other, things, didn’t escape the effects of the 2008-2009 crisis and subsequent events. Firstly, federal procurement dropped in absolute figures, and secondly, foreign funding became problematic because of the so-called 'foreign agents' law.
The study shows that the federal government is the main customer for economic analysis in Russia today.
Graph: The demand for expertise from federal agencies responsible for economics
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Source: The Evolution of the Expert Community: New Think Tanks and Their Role in Shaping Economic Policy
Between 2007 and 2012, the share of federal contracts in the portfolios of economic think tanks (ETT) grew. The authors note that major think tanks – ARETT members – also saw an increase in customers such as state-owned companies and universities, and foreign governmental and international organisations. However, the number of foreign and international NGO customers decreased. Major think tanks outside ARETT filled their portfolios with contracts from federal and regional authorities, with an emphasis on the latter .Smaller ARETT member centres also worked mainly for regional authorities. However, Yakovlev notes, smaller think tanks faced a negative growth of contractsand a 'soft takeover' by the market leaders.
The authors list some of the major challenges reported by Russian think tanks today.
Table TTs' economic situation
Smaller ARETT members Major ARETT members Major ARETTnon-memb. Total sample not enough funds for current operations 31% 0% 0% 11% enough funds to support only current operations 56% 55% 13% 48% enough funds for current operations and growth 13% 46% 88% 41% Number of respondents 16 22 8 46
Source: The Evolution of the Expert Community: New Think Tanks and Their Role in Shaping Economic Policy
Thus, according to 80% of respondents in the category, the challenge for smaller ARETT members is a shortage of funds available for serious analysis. Funding is less of a problem for larger TTs, both members and non-members of ARETT, but they are much more likely to face a shortage of qualified staff. Major TTs outside ARETT also note the problem of excessive government regulation, while more than 40% larger ARETT members report difficulties with getting their findings across to decision-makers.
A New Phase in the Development Strategy
Even though Russian think tanks have evolved substantially over the past twenty years, they are still in the early stages of their development and need to devise strategies to deal with the challenges posed by the current economic and political situation.
Since the federal government's demand for expertise has its limits, strong think tanks in the capital may consider geographic expansion to offer their services to the regional and international markets, including the CIS.
In any case, the demand is there and may even grow, Yakovlev suggests, as more companies ask for expertise to make better decisions in the context of excessive regulation and macroeconomic uncertainty. Well-established metropolitan think tanks may be in a better position to respond to this new demand than smaller provincial centres, but the provinces also face an acute shortage of quality analysis – which is likely to lead to the emergence of new think tanks, perhaps based in regional universities. But regions will continue to face a shortage of analytical skills. Cooperation between provincial and metropolitan think tanks may offer a solutionbut the emergence of new analytical teams and independent economic think tanks will require meaningful support from the government and businesses, perhaps something like the Moscow Public Science Foundation (MPSF) which in the early 2000s helped the establishment of today's leading think tanks.