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December 2012

Economics Training in Post-Communist Policy Networks

Leonard Seabrooke
University of Warwick

International Economic Organizations, such as the International Monetary Fund, are mainly known for making rules for international trade and finance, and for providing loans and structural adjustment programs to their member states during periods of crisis. Much of their time, however, is spent on monitoring their member states and training their officials. Within Work Package One, ‘European Actor-Networks in a Multipolar World’, André Broome and Leonard Seabrooke are studying how international organizations train officials in international policy training institutes. The case study focuses on identifying the analytic institutions created by international organizations and how they seek to embed particular intellectual frameworks as common sense solutions to a state’s policy problems. Providing and maintaining those frameworks means that those trained by international organizations are socialized during their education as well as engaging in policy networks to maintain their knowledge on how to treat particular problems. Broome and Seabrooke suggest that it is in these processes that there is a battle for influence over the types of ideas and concepts taught, with the European Commission also having a voice in how officials should be trained and what they should learn.

The focus on the research is the Joint Vienna Institute (JVI). From Vienna the JVI operates quietly in the background compared to the headline grabbing activities of the International Monetary Fund (especially in recent years in Europe) and has trained over 29,000 officials from transition economies, primarily post-communist states. The JVI was established in 1992 as a cooperative venture between five international organizations – the International Monetary Fund, the International Bank for Reconstruction and Development, the Bank for International Settlements, the Organisation for Economic Co-operation and Development, and the European Bank for Reconstruction and Development – as well as the Austrian central bank and Ministry of Finance. The original purpose of the institution was to provide economics training for officials from post-communist states during their transition following the dissolution of the Soviet Union. Of course the transformation of a country’s economic system cannot be achieved overnight and the JVI’s work in training officials has evolved over time as the economies have become more integrated into global, and European, capitalism. The institute was originally scheduled to shut down its operations in 1999, but the importance of the institute as an international policy training centre was recognised by the International Monetary Fund and other international organizations and the institute was extended into, eventually, a permanent international policy training centre.

The types of learning present at the JVI and what is being taught is of great interest in understanding how those working in economic policy in post-communist states made the transition to a more capitalist economic order. In this early phase JVI lecturers were explaining the nuts and bolts of how capitalism works, including elements such as the role of credit and bankruptcy. Today the institute provides training to officials from applied economics that details how to balance government budgets, to advanced courses in dealing with complex financial products and a whole range of complicated economic issues. It also places particular emphasis on learning through simulation, including studying a common range of cases where students work through practical problems, such as balancing a budget or understanding bank stress testing.

The project is particularly concerned with how the JVI has positioned itself at the centre of post-communist networks, and what kinds of influence the JVI has on economic ideas and policies in Eastern Europe. Broome and Seabrooke are examining what areas of economics training the JVI has had an impact and the strengths and weaknesses of particular policy networks compared to others. For example, one would expect that officials attending courses on central banking may not need the JVI so much due to the strength of central banking networks in Europe and the regular communication they have with their peers that permits knowledge transfer and mutual benchmarking. However, the JVI may be more important in areas such as a government budgeting or policy issues where the networks are thinner and concentrated bursts of training, such as at the JVI, have a great impact. In general the research is establishing how certain economic problems are treated through training and how ideas about addressing these problems are communicated. Certainly the importance of a common language and use of economic concepts in a consistent manner is a striking feature of the research conducted thus far. Such a common language permits policy networks to become wider and thicker, and also eases communication between post-communist states and international organizations, such as the International Monetary Fund.

The project work involves interviews with staff and leaders at the institute, participant observation of classes, and conducting surveys with students on attitudes towards participating in JVI courses and the likely impact of their studies on their career prospects. The research seeks to demonstrate how types of learning within international policy training institutes matter for European influence in economic knowledge in transition countries, and for the networks policymakers then engage. Broome and Seabrooke aim to show how international organizations’ analytic institutions can be the driving force behind efforts to change state behaviour, by changing how national actors think about how to address domestic and international economic problems, and how they conceive the appropriate role of the state in international policy coordination. The research is an integral part of a sub-package on international organizations within Work Package One on European Actor-Networks. In general this work package seeks to reveal how European actors operate within policy and business networks within Europe and in a multipolar world. The work package places greater stress on understanding how actors within network learn to improve policies, as well as the mechanisms by which these actors have policy influence.