Jan Švejnar University of Michigan and CERGE-EI, Prague EU Conference on Social sciences and humanities in Europe Brussels, December 12-13, 2005 Improving Social Science Research and Competitiveness in Post-transition Economies

European Social Science Research (SSR) Setting SSR and policy applications important for Europe’s efficiency and competitiveness Europe’s SSR selectively catching up with that of the US, but still lagging and often losing on average US-type research centers in EU – hard to sustain (type of funding, scale) Net brain flow goes to America (SSR conditions) Globalization => single world labor market = in America Relative to the US, EU’s organization of (labor) markets and institutions based more on historical factors and political expediency than on SSR and efficiency

SSR in Post-transition Economies End of communism -- handicapped SSR, embryonic labor markets and limited competitiveness Progress in , but still lag on all three fronts SSR and education -- limited reforms; underfinanced Policy-oriented professional discourse often mediocre EU’s financing bureaucratic => limited assistance Cities like Prague excluded Best researchers become application grant bureaucrats or go to the US US system of SSR financing (NSF, NIH) -- a better model Small, dynamic teams (summer salary, data, analysis, and travel) Labor markets resemble those in EU and rate of return on education approaching western levels Countries competitive, but competitiveness conditional on low wages and efficiency of foreign-owned firms

Policy Implications for SSR Priorities Raising quality of EU’s SSR and its effect on policy Instruments Emphasis on (incentives for) publishing in leading journals Targeting grants on competitiveness, growth and employment Peer review by leading researchers, including those from the US Moving senior researchers temporarily into policy making Resources Increasing funding for SSR and linking it to results Reform of SSR institutions in new member countries University governance and quality Academies of Sciences v. Universities Funding (government, EU, tuition & fees)

Policy Implications Cont’d Spur innovation -- raise competition among researchers Allow for open access to grants (do not restrict entry) Simplify grant applications and reviews Fund researchers rather than institutions Find best fit between policy ideals and economic outcomes Fund analyses of alternative policies Allow for experimental designs of social programs Make micro data more readily available Mobilizing synergies between public and private sectors Tax policies, deregulation, other incentives Most promising research agendas Benefits of market forces and targeted government support Entrepreneurship, labor mkts., foreign and domestic investment Overall – focus on efficiency and quality of SSR (being first)