The following article appeared in the Lithuanian weekly ‘Laikas’ on June 2, 2006. The author looks into the work of scientific research institutes in Lithuania and evaluates their use to the state and the society at large.
Much attention in this article has been given to the activities and achievements of the Lithuanian Free Market Institute (LFMI). “Seemingly there is no proper counterbalance to these free-marketeers in Lithuania,” says journalist Jūratė Nedveckaitė and asks representatives from other scientific, but government funded institutes, why LFMI is so popular…
With kind permission of the editorial board of the weekly ‘Laikas,’ LFMI posts the translation of this article.
There are over 100 institutes of various types in Lithuania. Some are partly financed by the state, while others operate as non-governmental organizations and rely on donations from Lithuanian and foreign foundations. Institutes that are visible, demonstrate up-front attitudes and generate products that are useful for the society can be counted on one’s fingers, while establishments focusing on micro- and macro-economic issues are even fewer.
Even without favouring the Lithuanian Free Market Institute (LFMI) one can admit that this organization is as plain as a pikestaff. Founded in 1990, LFMI did not take long to gain a strong position among other similar institutions that were established back in the Soviet times. Perhaps the fact that LFMI attracted young economists-analysts of the post-independence period was one of the keys to its success. The rotation of the institute’s leadership was equally opportune. We all remember Elena Leontjeva and Ugnius Trumpa. LFMI’s current president, Remigijus Šimašius, is also well-known to society. Every one of them came up with new ideas while leading the institute. Likewise, few have not heard about Guoda Steponavičienė or Rūta Vainienė or Ramūnas Vilpišauskas. It did not take long for Giedrius Kadziauskas or Monika Kačinskienė to stand out either. It looks like making one’s way up at this institute depends on personal accomplishments and authority, but not favouratism or cronyism as in many government and public institutions.
Established as a counterbalance to LFMI, the Institute for Social Research
eventually dropped macroeconomics and focused on social issues. The young LFMI has even outstripped the Institute of Economics founded by grey-headed economic gurus. Seemingly there is no proper counterbalance to these free-marketeers in Lithuania.
LFMI does research on key economic and economic policy issues, develops conceptual reform packages, drafts and evaluates legislative proposals and aids government institutions by explaining how to better implement free market principles in Lithuania. LFMI also conducts surveys, issues economic literature and organizes conferences, workshops, and lectures. The institute’s mission says: “Educational activities are an integral component of LFMI’s work aimed at making free market ideas a part of the Lithuanian society’s life.”
LFMI has done an impressive amount of work throughout 2006 alone. Five analytical papers on tax issues, including the corporate income tax, excise duties, the copyright levy, etc.; seven articles and commentaries plus eight seminars, conferences and presentations. And all this about taxes alone.
The Institute has also worked on labour market regulation and produced two analytical research papers. It has come out with an innovative approach towards migration, a problem which has evoked a massive response in society lately. As many as nine articles and commentaries on migration have appeared. The research was crowned with a conference “Strategies to Manage Migration or Sound Every-Day Solutions?”
The energy sector has not received as much attention in 2006 as earlier but in any case five articles on this topic came out. Knowledge economy and healthcare warranted two articles each, plus a round-table discussion “Best e-Government Practices.” Transportation was the least discussed topic.
Notably, LFMI managed to stage three conferences-discussions in May alone. One of them was an international event designed to discuss the impact assessment of the Baltic States’ membership in the European Union. While other institutes are only getting ready to produce impact assessment analyses, LFMI is obviously outstripping them.
In addition to these activities, since 1994 LFMI has published a newsletter Laisvoji rinka (The Free Market) in Lithuanian and English. Since 2002 this quarterly newsletter has been disseminated electronically for free. LFMI also maintains a library which offers many rare books by foreign authors.
All this impressive work is being done by literally five experts assisted by a small administrative team. In comparison, the Lithuanian Institute of Agrarian Economics
, whose list of accomplishments is just as evocative, has over 20 analysts and 60 employees altogether, the institute’s website reports.
Research is time-consuming
Government-funded institutes present an altogether different picture. They all claim with one voice that scholarly work cannot be done in a hurry. Before starting analysis, one needs to collect and process data and only then one can go public. Yet, two facts are obvious: ability is lacking to adequately present information to society, and in many cases research findings become outdated before they see daylight.
Asked why LFMI is so prominent and faces no real opposition, Director of the Institute of Economics Prof. Dr. Habil. Eduardas Vilkas says that LFMI’s mission is to promote free market ideas, while the purpose of his organization is to do research, not advocacy. The latter kind of work is not so visible, the academician argues. „I think my work is known to the society, Eduardas Vilkas says. – Institutes like ours have to do research and nothing else. No doubt, research is dovetailed with the society to some extent and communicated where necessary. LFMI has qualified specialists who are active and good at free market theory, but these ideas are quite shallow at times.”
The Institute of Economics has focused on two directions lately. It is a co-author of the national economic development strategy. If compared with other government-funded institutes, the Institute of Economics has quite a small staff, about 10 employees, so about 80 persons from various types of scientific and government establishments were teamed up to create the strategy. The other focus of the institute is the implementation of econometric and general equillibrium models in the Lithuanian economy. As Prof. Vilkas says, this is applied research, not fundamental research, since methods are applied to the country’s economy. The institute receives most commissions from the Ministry of Economy.
No counterbalance left
Established as a counterbalance to LFMI, the Institute for Social Research pulled out of the competition with the free-marketeers. Eventually the institute began to more fully reflect its name and focused on social issues. Director of the Institute for Social Research Prof. Dr. Habil. Arvydas Virgilijus Matulionis admitted that the Macroeconomic Department, which was originally established at the institute, eventually dissolved. The institute switched to social issues which are organically related to other areas, such as demography and EU integration. The institute has mainly assisted the Ministry of Social Security and Labour.
Assistance for people with disability was one of the main business-oriented initiatives recently undertaken by the Institute for Social Research. As senior fellow Dr. Laima Žalimienė informed, research was carried out to elicit whether people with disability were interested and able to start a business and what kind of help they needed. Consultation, information and business development centres for people with disability are currently being established. In 2005 a project was launched within the framework of EQUAL programme. The project will be carried on throughout the first half of 2007.
„The government expected us to assess current problems, but we cannot do that without making research first. And research is costly. Besides, we lack experts on macroeconomics. We tried to attract some specialists but we failed to stand up to competition. The best economists work in banks and private organizations, but not at institutes like ours. We had to build our team literally from a scratch, but we failed to attract leading economists. We did have Prof. Dr. Habil. Jonas Čičinskas and Prof. Dr. Habil. Povilas Gylys join us but they quit, too. Dr. Romas Lazutka remains our main advocate,” the director of the Institute for Social Research said. At present the institute employs about 50 persons, of which about 40 are researchers.
There are all kinds of institutes: the Institute for Entrepreneurial Research, the Institute of Social Economy, the New Economy Institute, and others. Prof. A. V. Matulionis spares no criticism towards various organizations which haughtily label themselves as institutes. „If you work, you have to feel responsibility for your research and results.”
Why is LFMI so popular? Prof. A. V. Matulionis thinks that the media like LFMI’s team because they often challenge the government. „Our response to topicalities might be too lukewarm, but we cannot comment on one or another fact without analysing it first. For example, we investigated the social structure of our society. After a lengthy and comprehensive analysis we concluded that Lithuanians lead a normal life and are quite a bright nation. Our task is cause-and-effect analysis,” Prof. A. V. Matulionis explained.
The Institute for Social Research will soon release a publication „Lithuania: The First Year in the European Union.” This publication will present the findings of a research conducted in 2005. This is a big and interesting job, but we joined the European Union back in 2004.
It would be silly to require tangible, „material” benefit from scientific establishments. This is not their function indeed. Yet, research should be of some use for the state and for defining guidelines for its future development. Unfortunately, research institutes seem to be doing much of their analytical work only to put a tick and justify their existence.