The global reach of the EU

With the EU currently engaged in working out its budget for the coming period (2014-2020), and the British Government apparently resisting proposals for a modest real-terms increase in the budget, it's worth thinking a little about what the EU actually does with all our money. Here I shall mostly focus on some aspects of the EU's external relations.

The first thing to remember, though, is just how small the EU's total budget is. It's actually just under 1.25% of the overall EU Gross Domestic Product (GDP), and most of the spending goes to agriculture and the various structural funds.That doesn't leave much for all the other diverse things the EU does, both in Europe and across the wider world. Again, contrary to what many people tend to think, the EU bureaucracy is also surprisingly small. Given all this, you can see why, as presently constituted, the EU cannot possibly act as a sort of fiscal union for Europe, something that people often say would be needed for the Eurozone to work in the longer term. The EU budget, for instance, is minute as a fraction of Community GDP, compared to the US Federal Government budget in relation to the dollar area (the US and a few other territories).

Moving on to the EU's external relations, it turns out that all my recent and current work is funded by the EU, so I'll sketch a few points through three examples:

Tajikistan
When I mentioned to friends a few weeks ago that I was going to spend nine days in Dushanbe, the capital of Tajikistan, the main reactions were: (a) where is Tajikistan? And (b) why is the EU funding projects out there? Good questions, so let me try to explain.

Tajikistan is the smallest and poorest of the Central Asian Republics that were formed when the Soviet Union split up in 1991; it is located just north of Afghanistan. It experienced civil war in the 1990s and a good deal of economic mismanagement since then, though in the last few years the economy has been growing reasonably well and the public finances have returned to quite a healthy state. The EU has provided aid to the country ever since the Soviet Union broke up, and in recent years much of this aid has taken the form of technical assistance projects aimed at improving economic policy.

So my reason for going there was an invitation to contribute to the final stages of two of these projects, one on macroeconomic modelling and forecasting, the other on public financial management. Both projects involved a mix of outside experts and senior officials from the Tajik government working together to come up with solutions to various economic policy problems that fit the prevailing Tajik conditions. Not always an easy task, but an interesting one.

Turks and Caicos Islands (TCI)
These islands are in the Caribbean, and I'll be out there with a colleague from November 4th to 13th (arriving home on the 14th). Back in 2009, the British Government assumed direct control of the islands as a result of the TCI government's perceived corruption and incompetence, resulting in unsustainable budget deficits. The islands are one of the UK's overseas dependent territories, and as such, like the dependent territories of all EU Member States, they are eligible to receive EU aid through the European Development Fund (EDF). In the case of TCI, however, EU funding was suspended when the UK took over running the islands.

Our task for next week, therefore, is to assess the current economic situation of TCI, including the budget, in order to determine whether the islands have restored their economy sufficiently to be eligible for further EU funding. From what we already know, the islands obviously think they've done enough to turn things around, and with luck we'll end up supporting their view, perhaps with one or two added conditions. Also with luck, we might just manage to enjoy a little sunshine while out there, who knows...........

Falkland Islands
These islands are another UK dependent territory eligible for EDF support from the EU. My colleague and I have already almost finalised our report on the Falkland Islands supporting their EDF 10 funding, and proposing how it should be allocated in the next three years. However, the last major stage of the work involves spending two days in Brussels - November 15th and 16th - to discuss detailed points with Commission officials and to make sure we get the final report exactly right to meet EU requirements. As part of this work, I gather that a video link will be set up with the Falklands so that we can discuss some points with officials there, too.
____________

So that gives a little taster about the external activities of the EU. It's surprisingly diverse!

And after all this travel, to work on the above projects, I think that from November 17th I should be home at least until January.

Research ethics

From time to time we can read scandalous stories about research.

Someone has falsified their data, or their survey findings, to claim a result that is not really supported by the evidence. Quite properly, we are shocked when such stories crop up. They clearly do not represent the ethical, or honourable way to do research. On the other hand, given the pressures that exist in universities and research centres to get results and to deliver highly rated publications, it's easy to see why and how these things can happen. That's not at all to defend unethical research, of course, since that doesn't contribute to the generation of new knowledge and understanding of the world - which is what good research is surely all about.

But it does mean that institutions that deliberately put a great deal of pressure on their researchers to 'perform' and 'deliver' must always be on their guard to watch out for this sort of distortion. Moreover, undue pressure on researchers can sometimes lead not just to deliberate falsification, but also to honest mistakes committed in the rush to deliver results.

Such concerns about the quality and reliability of research are probably among the factors behind the increasing tendency for universities to insist that all research must be subject to some sort of ethical oversight, and for funding bodies to require a section on research ethics in their funding application forms. However, most of the new research ethics 'machinery' is actually not so much concerned with the aspect of research referred to above, namely its basic honesty and integrity, since this is still largely taken for granted. And anyway, how could the honesty of research be checked? I suppose the system still relies on peer pressure and the replication of experiments to highlight areas where some falsification or other distortion has occurred, though this is inevitably rather hit-and-miss. It also relies on occasional heavy penalties, like the loss of one's job, to provide negative incentives!

More mundanely, though still importantly, most of the new ethical machinery, at least in the social sciences, is more designed to ensure that where research might involve human subjects, the research is done in a way that involves voluntary and informed participation, without any pressure being placed on potential 'subjects' to take part. Within my own School, for instance, the ethical guidelines for research were recently updated, and it's clear that how we do research involving human subjects was a paramount concern.

This makes good sense, though it did seem to me that we were running a risk of being overly heavy handed in our approach. For the guidelines state that all the research we do must be subject to official ethical oversight, not only that where human subjects are or might be involved. This means that our ethics committee should, in principle, get to know about every single bit of research that goes on in the School. I would be surprised if the system works that well in practice, for I suspect that through a mix of ignorance and common sense, many of us will just get on with our perfectly respectable research without worrying about the ethical dimension - if we make a judgement at all, it will be that the research does not give rise to ethical issues. Now, I know that according to the rules we are not supposed to be the judges in our own cases, but I bet we often are.

For instance, a recent paper I wrote on North Korea (now published) was based on diverse secondary sources plus some of my earlier work on institutions related to transition to a market-type economy in Central and Eastern Europe. I didn't perform a survey, nor did I interview anyone, so although I didn't seek ethical approval for the work (and to be truthful, the idea never crossed my mind) it's hard to see what would have been done differently had I done so. And a good deal of research is like this.

Hence bringing ethical considerations into our research can be highly desirable if it helps to make us more careful and honest in what we do, and if it promotes good practice (as with the treatment of research involving human subjects), but we probably shouldn't push it too far. Nor should we make it overly bureaucratic.

Academic employment contracts

I was going to continue the discussion of the last posting on disruptive innovation and how it might impinge on our universities - and I shall come back to that topic quite soon. But almost by accident, while in the Budapest Corvinus University yesterday, I found myself talking about - and then thinking about - academic employment contracts. These have evolved over time, naturally, but they remain in many ways surprisingly open ended and almost informal.

When I first became a professor at Heriot-Watt University, back in 1985, my contract then basically said that I was appointed to be a professor, that I was responsible to the Principal of the University (in other words, he was formally designated as my line manager), and that I would be head of the then economics department for an initial five year spell. There was also a little about holiday, sick-pay, rules about consultancy and outside earnings, and stuff like that. But I don't recall anything in the contract that gave any clues as to what exactly a professor was supposed to do. In those days, I think, the presumption was that if you had got as far as becoming a professor, you should have absorbed enough of the 'ethos' and 'culture' of academic life to know what to do, without needing anything in the way of instructions or explicit guidance. And actually, that presumption was probably broadly correct.

Thus my contract provided at most a very sketchy outline of my role, while informal understandings across the academic community, and my personal goals to develop my own research, provided plenty of motivation and direction to keep me busy and (hopefully) productive. Moreover, I knew for sure that the Principal was not remotely interested in being an active line manager. He was clearly happiest when I just got on with the job (as defined by me), and was more than content to have the very occasional chat over lunch or a coffee for a quick update on what I was doing. Back then, we had no research assessments to contend with, no teaching quality assessments, no individual staff appraisal with annual targets and performance reports. So from a 'modern' perspective, it probably all sounds almost shockingly informal.

Even our external activities, including consultancy, were handled with considerable informality. It was taken for granted that as a professor, I would do some external examining for other universities, referee journal articles, and things like that, and I still do much of this, despite being officially retired. These are mostly unpaid activities (OK, external examining is not unpaid, but the remuneration is derisory; no one would do it for the money!) that most academics do as a routine part of being an academic. It goes with the territory - but there's nothing in our contracts about it.

As for consultancy, my 'old contract', long ago superseded by more restrictive conditions, allowed me to work up to one day per week outside the University without any special permission. I hardly ever took advantage of that provision, and the first time I worked for the World Bank, in 1990, I did consult the Principal about the project. I found myself in the bizarre position of trying to convince him that we should ask for an overhead contribution for the University (we did ask, and we got one), and I thought he might want the University to take a share of the income I was going to earn. 'No, no', he said, indicating that it was good for the University's reputation and standing to be engaged with bodies like the World Bank. He insisted that I keep all the money (which was not a huge sum, it must be admitted).

So much for the informality of the past, which was nevertheless perfectly compatible with working hard and being a productive academic, delivering a good, supportive teaching service to our students, and doing interesting research.

Nowadays, though, universities have shifted strongly in the direction of being more managerial, partly for external reasons to do with accountability - to funders, to the general public, to our students, etc. And partly for internal reasons, an increasing trend towards surrounding all our activities with extensive paper trails (for audit and accountability reasons, and also to provide protective documentation in the event of appeals and lawsuits), and towards thinking that we can get the best out of staff by managing/supervising them more closely. The last point, in my view, is just mistaken, but it seems to be the prevailing approach now.

Our contracts are probably a bit more precisely specified than they used to be, though they remain remarkably open ended. But in the academic working environment they are everywhere supplemented by quite detailed management of most of what we do. I sometimes wonder what this does  to academic incentives to do different things. In particular, service to the wider academic community is not managed, not incentivised (to use a truly horrible modern word) at all, and I wonder whether the next generation of academics will simply take the view that it is no longer part of the academic job. Or shall we move to a position where these external, and largely unpaid activities have to be properly paid for - so instead of a notional fee of £100, say, for examining a PhD, one would have to be paid, shall we say, £1500?

I would personally feel rather sad if the academic community did move far in this direction, as I like the traditional cooperative ethos and find that over the years it has given me the broad framework I have needed to manage the different strands of my work reasonably well. And I suppose I also feel that if institutions want their academics to deliver good work, it's not very wise to be overly prescriptive regarding what they should be doing. The academic 'job' is too complicated and diverse to be pinned down like that.

Modernising higher education: How to do it?

Well, here I am in Budapest, probably my favourite city, as a guest of the Budapest Corvinus University. My visit is paid for by the EU, through some funding to promote academic links and mobility between EU universities, and the deal involves me giving a lecture in the University, which for my present visit takes place this afternoon. My lecture will be on the theme of institutions and transition (to a market economy), something that has occupied much of my research time in recent years.

As has often been the case when I have visited Hungary, there is a lot of talk in the universities about reforming curricula and course structures, improving the teaching materials provided to students, and all that sort of thing. More worryingly, I think, there are strong centralising tendencies in Hungary just now, with the present government thinking that it can best control economic life - and, as it turns out, educational life, too - through controlling appointments to key positions. This seems to me quite an unhealthy and undesirable tendency, more about asserting political control and not much to do with improving quality, either in the economy or in the universities.

So how can we improve quality in the universities, either in Hungary or back home in the UK? And what, indeed, do we mean by quality?

My thoughts about this were stimulated at the beginning of September by an article written by John Kay for the Financial Times, in which he was discussing the disruptive aspects of significant innovations, and hence  the tendency for established firms to resist them. Let me simply quote his final paragraph:

'Economic growth is held back by industries where established interests are so powerful that disruptive innovation can be staved off for ever. Financial services is probably one. And education another. I often think of the contrast between the power of information technology to transform the process of learning, and the little progress that has been made towards actually doing so.'

On this view, new ideas, new approaches to teaching may not even originate in the established universities, because vested interests - used to old ways of doing things, and thinking they know best - will firmly resist major innovations, and will even complain loudly about the rise of upstart institutions trying to organise teaching differently. The traditional universities will protest about falling quality, when what they might really be resisting is the rise of wholly new types of educational 'product'. We don't know yet, but the next decade or so will undoubtedly reveal a rapidly changing market structure in the world of higher education, pointing in all sorts of new directions. Some of these will do well, some will, naturally, fail, as is quite normal.

For myself, I have spent my entire career in traditional universities, I am used to the models and methods of teaching that we employ, and have even accepted a few minor changes now and again, as systems evolve. But the way we teach now is not really vastly different from the way it was 30-40 years ago, aside from some bigger classes, larger seminar groups, and a bit more classwork and continuous assessment than we used to have. But all this does little more than scratch the surface of the traditional model, and how sure can we be that what we do is really the 'best' model for most of our students?

Moreover, even the quality assessments that are carried out now are based on the presumption that this model is indeed the right way to do things. So anyone offering something quite different, would have a hard time getting a good quality rating, I suspect. In this sense, the traditional model of the teaching function in universities is very much self-reinforcing, and resistant to change. Naturally, we regulate the system by controlling who has the power to award degrees and other qualifications, and such privileges are jealously guarded.

But nowadays there are many pressures that might open up higher education to disruptive innovation, and I'll write more about these in my next posting.

Too busy....

The last few weeks have been a bit crazy, far too much going on and too much work to do! Retirement wasn't supposed to be like this, was it?

Hence the lack of entries on this blog, but I hope to catch up in the next week or two as there's lots of interesting stuff going on in the university world. I've been reading lots, but have had no time to write anything for a while.

So what's my 'excuse', what's been keeping me so busy?

The problem really is that I like being retired not because I want to sit around doing nothing very much, but because it gives me the freedom to do what I want without worrying about teaching schedules, university bureaucracy, and the like. However, the world is such an interesting place that there seems to be an endless stream of potential projects and activities - some purely academic (and hence unpaid), and some taking the form of consultancy projects (and hence paid) - involving a variety of countries. And my main weakness is that when interesting things come along, I'm still not very good at saying 'no'.

Recent projects have been on North Korea (paper written and already published), study of investment in Kuwait (completed and approved), the Falkland Islands (on going), and on the UK's experience of the Private Finance Initiative (on going). Next week, however, I'll be a guest of the Budapest Corvinus University in Hungary, with only one lecture to deliver and otherwise a fairly light schedule. So I plan to use some of my time there catching up with University Life.

Incentives and University Finances

Now that the London Olympic Games are over, apparently judged by most to have been a resounding success, it's time to get back to business and think about our universities and how they operate.

Focusing on the reforms to university financing shortly coming through in England, with most universities set to charge much higher fees (mostly at or close to the legally set upper limit of £9000 per year per student), it is quite striking how little the government seems to have understood about incentives, both for institutions and for students.

Institutions
Universities naturally want to pull in student numbers, as that is where the bulk of their funding will be coming from, via the tuition fees. For home and EU students, the fees will either be paid up front, in cash, if the student's family so decides and has the necessary wherewithal; or a student loan will be taken out covering both the fee itself, and often the bulk of living costs. Where student loans are used, the university gets the full fee right away, and so has no need to worry about so called 'non-performing loans'.

But what about repayment of these loans? As noted, individual universities don't need to be concerned, but the Student Loans Company certainly does. For graduates who remain in the UK and work, repayments are collected by HMRC through their income tax returns, with any outstanding debt written off after 30 years. No repayments are made until a graduate is earning at least £21,000 per annum. Even with pretty decent administrative arrangements in place to collect these repayments, it is estimated that about 30% or so of outstanding student debt will never be repaid - due to low earnings, spells outside the labour market, and default. In the end, this shortfall will need to be picked up by the taxpayer, via the government's budget.

Now, this outlines the situation for UK students who continue to work in the UK after graduation. For UK students who work abroad, they still formally have an obligation to repay their loans (and this would catch up with them if they returned to work in the UK at some point), but it's not clear that there is any sort of enforcement mechanism in place to make that happen. Likewise for students from other EU member states. They, too, have an obligation to repay, but how can they be compelled to do so short of expensive and complicated court action in various countries? So the more pragmatic of these students might well conclude their their education at an English university is essentially free. Again, our taxpayers end up footing the bill.

The effect of all this has already been twofold:

(1) Universities have mostly felt free to set their fees at or near the maximum level, contrary to the government's stated expectations.

(2) The government has felt obliged to cap some elements of student numbers to constrain the possible public spending costs of the new student funding system.

I'm not convinced that the new funding model will prove to be viable for very long, so in a few years' time we can expect another round of re-thinking, one that will, I would hope, pay a bit more attention to institutional incentives.

Interestingly, the way in which universities deal with non-EU overseas students, at either undergraduate or postgraduate level, is totally different, and far more sustainable. For with students in these categories, we have had high fees for some years already and student loans are generally not available from the UK's Student Loans Company. Hence not only is there no contingent liability for the taxpayer to pick up, but institutions have to take great care to make sure they get their money. Normally, for instance, we don't even allow such students to register and start their courses until all or most of the fee is safely 'in the bank', and in the few cases of default students are unable to graduate (we don't allow anyone to graduate while in debt to the university), and their debts are pursued through the courts to the extent possible.

Students
Aside from deciding to pursue their higher education at an English university, young people have several other options:

(1) They can choose to get a job, either in the hope of getting training through work and possibly going to university later, or simply because they judge it to be a more suitable option for them than university.

(2) They can take a university course in another EU member state, benefiting from much lower fees. Increasingly, European universities are offering many courses taught in English, the academic quality is often high, and such overseas experience can often look very good on someone's CV (especially if another language is learned along the way).

(3) They can go to the USA for their higher education, which has the advantage of a common language (more or less). Fees are high, especially at the really good institutions, but the new high fees being charged in England might well push some students in that direction (if their families can pay).

(4) They can consider the rapidly expanding range of distance learning and online options to take their education forward. This is a huge topic in itself, and I'll return to it at a later date.

For now, the main point is that potential students have lots of options, and their choices are going to be influenced by the incentives they face, including both the fee levels, and their perceptions of the likely wages different types of course might lead to (though I must admit I hadn't a clue about that when I was a student myself!). Hence in designing policy, some attention ought surely to be paid to student incentives, too.

What makes universities special places?

In the past few months I've been part of a group at Heriot-Watt University overseeing a small project - involving some outside consultants - to produce a report estimating the economic impact of the University. Where possible, this impact is being assessed for the local area, for Scotland, for the wider UK; and since we also have a campus in Dubai, some attempt is also made to estimate the economic impact over there.

Our report isn't quite finalised, but it's almost done, and the draft final report should not need much further change. And I think it tells a pretty good story about the direct and indirect impact of the University on local and national incomes and employment, these impacts coming through various channels. What the University does with the report once it's completed remains to be seen, and I'm not sure whether anything much will be placed on the University website. But I imagine it will be useful for the University to have some reasonably firm estimates to quantify our impact when it engages in discussions with funders, the government, and so on. So overall, probably a useful exercise, and certainly an interesting one to have been (a small) part of.

It seems that reports like ours have recently become quite the thing for universities to do, as several Scottish universities and universities elsewhere have commissioned such reports in the last two-three years. I imagine that like us, institutions are thinking that at a time when budgets are under pressure, we need all the arguments we can muster to justify and protect our spending, and a well written report with some good solid numbers in it can surely only help.

However, it struck me a day or so ago, that all these reports - and not at all through any fault of the various consultants - lack one rather important dimension of what universities are all about. This has to do with their research and contribution to knowledge.  True, our report, and those of some other universities that I have read, do include research, but the impact of research is typically estimated via what we spend on it, supported by research grants and other diverse funding. What this means is that we're measuring research inputs, which is not too hard, but we're not measuring the outputs.

The problem is that measuring research output, especially across an entire institution containing numerous departments in different academic disciplines, is an absolute nightmare. Most research output takes the form of research papers published in academic journals or as book chapters, and since different disciplines have different styles of doing their research and reporting the results, the typical pattern of output is not at all the same in different departments. This is why the REF, and previously the RAE, effectively assess research across all UK universities by department (termed a Unit of Assessment). These exercises count publications, assess their quality, look at citations and other measures of impact, review PhD training and assess the research environment in each Unit. This is all quite complicated and time consuming so it is not done very often - hence the last Research Assessment Exercise was RAE2008, and the first run of the new Research Excellence Framework will be REF2014.

In terms of measuring research output, these exercises are a step in the right direction, since they are mostly measuring outputs in various ways, or attempting to do so. But how does this carefully measured research output all add up to a contribution to knowledge? And where is the time and space for creative thinking by academic staff in our universities? It seems to me that universities need to find a way of highlighting this aspect of their activities in a really positive way. For research is one of their core functions in society, and just measuring how much we spend on it, and how many jobs are associated with our research activity, seems fairly inadequate.

Perhaps the way forward would be for universities, periodically, to produce reports about these more intangible aspects of their research, their contribution to knowledge. If so, we need to think hard to figure out good ways of doing it! Such a report would have to show just what makes universities such special places, what makes them totally different from any other kind of organisation.

How do we measure an individual's research impact?

This is a subject that I thought I already understood fairly well, having expressed on this blog and elsewhere various sceptical views about the whole notion of impact, including some of the commentary about it that has come out in connection with REF discussions and the like.

Some of the debate about impact has certainly been pitched at a fairly low level, and has often not taken us a great deal further than the well worn territory of either assessing 'research quality' - of an individual or a department (or, more formally, a unit of assessment) - in quite subjective terms; or making the assessment on the basis of publication numbers, journal rankings and citation counts. Not only has this not advanced matters much beyond the old RAE system, but it is open to all the familiar arguments: how many articles to count; how far back to go; how to judge the quality of an individual article, etc. Like a lot of important things in life, research quality seems to be one of these things where 'we know it when we see it'.

However, a few days ago I was intrigued to find that I didn't really understand this topic of measuring research impact as well as I thought. It happened like this. I had been approached by a couple of academic bodies in Italy to help them with two tasks: (i) assessing the research quality of individual academics, by reading and ranking a selection of their papers; (ii) assisting Italian universities to make new appointments at professorial level. I presume my name was put forward by a colleague in Italy, but in order to take things forward the Italian academic bodies naturally asked me to provide my CV and to complete a couple of simple forms. Whether, in the end, the Italians ask me to do these academic tasks, remains to be seen, but completing their forms was unexpectedly challenging.

For one of the forms asked me for the h-index and g-index of my research, something that left me totally baffled as I've never heard of them. Just to deal with the forms I did a quick Google search using the string 'Paul Hare h-index'. To my surprise this came back with h = 5 and g = 7. I still had no idea what they meant so I just put them on the forms and sent them off as requested.

Once that was done, though, I had to investigate further.

It then turned out that the h-index originated in a paper by Hirsch published in a physics journal in 2005. His idea is a really simple one. If a researcher has an h-index of 22, say, it means they have 22 papers with 22 or more citations. The h-index is the maximum number of a researcher's papers where this property holds. Thus someone might have published 80 or so papers, but most will only have a handful of, or even no citations. With 80 papers, the h-index could turn out to be 25, if that researcher - among all his/her output - has 25 papers with at least 25 citations (and not 26 papers with at least 26 citations).

The g-index, by the way, is a modification of the h-index to weight more heavily the articles that gain more citations.

What you realise when you think about all this is that anyone's measure of h (or g) will depend on the specific database that is examined - what papers are included in it, what citations are counted, etc. This means it's not easy to get a wholly reliable measure of h, because available research publication and citation databases are nowhere near good enough. Whatever database is used, for any given researcher their h value should rise over time, implying that it's probably not a great indicator for early-career researchers. Moreover, if different databases are used to investigate a given individual, one can expect to find different h values. All one can say, then, is that the person's true h-value is at least as large as the largest value one manages to find.

To illustrate the effect of using an alternative database, I downloaded an amusing bit of free software called Publish or Perish (Harzing, A.W., 2007, Publish or Perish, available at this link). This searches through the Google Scholar database, and using this approach I found the following values for my research: h = 20 and g = 33. I still don't really know whether these values are good, bad or indifferent, as I haven't checked the corresponding values of any colleagues and haven't seen these research performance indicators reported before.

Should we try to use indicators like this in the forthcoming REF? It seems to me worth thinking about, despite the practical difficulties I have mentioned above.

More on publishing

Academics, even retired ones, are supposed to keep up a steady pace of publishing their research output, though in my case it can't really matter very much as I don't expect to be part of the forthcoming REF (Research Excellence Framework), for which the data are due to be collected during 2013, and the results published in late 2014.

Anyway, regardless of the REF, I guess I've been doing my bit recently. At the weekend I was proof reading a paper on North Korea that I thought was due to be published in the International Economic Journal early next year. It now seems the paper will come out in September this year, in just two months' time.

And a few days ago, my co-editor (Gerard Turley) and I finally submitted to Routledge our edited volume, Handbook of the Economics and Political Economy of Transition, which should be published in March 2013; see the publisher's web-pages for this book. We've been working on this volume for just over two years. It has involved us working out a structure for the volume, then commissioning a large number of contributions from experts in the field, mostly academics, but a few who have also served as ministers in or advisors to various Eastern European governments. This process went surprisingly well, with the submitted volume comprising our editors' introduction plus 37 contributions. Clearly it'll be a large book, so anyone wishing to buy it should get saving up right away.

The submission process itself was quite novel for me, as it was the first time I've submitted a book entirely electronically. In fact as co-editor I've never even printed out the whole thing, so I guess we've saved a tree or two. To make their life easier, the publisher wanted the text of each chapter in a separate file, with each table and figure also in a separate file. Hence our submission amounted to 186 files in all, bundled up in a single, large zipped file. Needless to say, for this to work, we had to be really careful with our file names.

The next step, I imagine, will be a steady stream of queries from Routledge as they work through the files and prepare everything for publication, but our main work as editors is done, and these final stages should not be too hard to fit in with whatever else we are doing. It's been an amazingly interesting project to work on, and I'm really impressed that so many contributors delivered their contributions to a very high standard, and more or less on time. I can say that now, though I must admit that the final weeks were marked by a certain amount of anxiety as we awaited the last few contributions.

The joys of publishing....

My latest venture has required me to learn a great deal about the publishing business, especially the more technical aspects of layout and design, and setting up an e-book. It's been a fascinating few weeks. Let me explain.

What happened was this. Back in 2010 I had a book published about my travels in Central and Eastern Europe since 1970, recounting my impressions of the hugely interesting places I've been lucky enough to visit over the years, and talking about some of the projects I've worked on as an economist. So the book was a curious mix of travel tale, a history of the region, and an account of what economists actually do when they do research or give policy advice in Eastern Europe.

At first the book was written just as a record for myself, and to some extent for friends and family. But I also wrote it because I realised that fewer and fewer of my students had any idea that Eastern Europe was under communist rule for several decades. Many had not heard of the Berlin Wall or the Iron Curtain, so not surprisingly they had no idea what transition - the process of shifting from a centrally planned economy to a more 'normal' market type economy - might entail. This is part of what my book sought to explain.

The book was published under the title: Vodka and Pickled Cabbage - The Eastern European Travels of a Professional Economist. Since I was never that bothered about making money from the book, I made the pdf-file of the book available on my own website, and it was also on the website of a US-based area studies association. Through these channels I gather that several thousand copies were distributed, and I still get e-mails giving comments on the book.

Unfortunately, in early 2011 I discovered that my publisher had gone into administration. At first it seemed that some other publisher might take over the rights to keep the book in print, but that fell through. Then a couple of months ago I finally wrote to the liquidators to find out what was happening. I never received a reply. This is why I finally decided to reissue the book myself, with a new cover (nicer than the original one, I think), using free software available through the Amazon company, CreateSpace. Using this, I set up the book for a print-on-demand paperback, in the process of which I learned a lot about formatting, style, layout, editing and the like. But I got there in the end and the book is now on Amazon - see link in right panel.

At the same time, since the original book had never been made available as an e-book, I decided to set it up for the Kindle. The formatting needed to do that was a bit fiddly, as I discovered, as my original book file for the paperback version turned out not to convert very well. In fact it's still not perfect, and when I have some time I may go back to it and tidy it up. One of the big advantages of this modern technology is that I can do this whenever I want, quickly and easily.

So now, of course, I hope someone will come along and buy the book...............

LIBOR: Bankers are not Gentlemen!

The revelations that have surfaced in the past couple of weeks over the setting of LIBOR (London inter-bank offer rate) have been nothing short of amazing, especially for a fairly simple-minded and even sometimes naive economist such as myself.

When we teach economics we spend a lot of time talking about markets and how they work, and we usually discuss markets in terms of the supply side, the demand side, and the (equilibrium) price. Curiously, though, when it comes to the details of price setting, we are often a bit vague, relying on the 'market mechanism' to set proper prices without thinking terribly much about what exactly the price should be. If we do give prices some thought, it is usually to argue that competition between firms will make sure any price distortions cannot last long - if a price is too high, new firms will enter the market; if it is too low, firms will fail and leave the market. And mostly this simple story seems to work quite well.

However, in markets where there are not multiple price setters, the story can break down badly as we discovered in the case of LIBOR. LIBOR is actually a really fundamental 'price' in the financial markets, since massive volumes of contracts (including some mortgages) pay an interest rate that is expressed as so many basis points (100 basis points make a 1% interest rate) above LIBOR. So if the way LIBOR is set is wrong, lots of folk - both firms and individuals - will end up paying the wrong price (interest rate) on their borrowing. Mostly, I imagine, they would end up paying too much (thereby raising bank profits), but sometimes the error could go the other way, and they would pay too little. Thus it's quite important that the LIBOR is set correctly and fairly.

Yet despite its importance, LIBOR is one of those prices to which most economists have paid absolutely no attention. Hence it was interesting, and quite a revelation (to me), to discover that it is set daily by the British Bankers Association (BBA) on the basis of submissions from their member banks. Each bank is supposed to submit data on the interest rate it has to pay that morning for inter-bank borrowings on the wholesale market for funds. The BBA apparently drops the four highest and the four lowest submissions, then averages the rest to set the LIBOR for that day. The whole process seems to me surprisingly informal, and it relies heavily on the truthful submission of the relevant data by the member banks. In other words, setting LIBOR is based on an assumption that bankers are 'gentlemen' in the old fashioned sense of being completely honest, faithful to the official 'rules of the game', and not at all out to play the system for personal gain.

Recent events revealed what one might have guessed if one had investigated the LIBOR price setting process at all carefully, which no one apparently did - though the regulators had at least started to ask the right questions, we gathered. This is that the bankers are not in fact the gentlemen they were naively assumed to be, and that they did, over an extended period, systematically strive to distort LIBOR by providing incorrect data to the BBA. In other words, they lied.

Why might banks do this? Well, there are two reasons that come to mind. First, the interest rate a bank has to pay to get funds in the wholesale market is sometimes viewed as an indicator of the health of the bank. If a bank can borrow cheaply, it is considered healthy; if it has to pay a high interest rate, this is deemed to reflect a market judgement that the bank is in poor shape. So this line of thinking might make a bank try to achieve a lower value for LIBOR than is really correct, by claiming that it doesn't have to pay much to get wholesale funds. Second, the bank might want to get LIBOR higher than it should be so that its customers then have to pay more for their loans and the banks make higher profits.

These factors push in different directions, but either way one can see that banks might have incentives not to be totally truthful. And with LIBOR set in such an informal and non-transparent way, it wasn't easy for anyone to verify what was really going on, not even the BBA itself. As a result, it was all too easy for this price-setting process, based on the regular and truthful submission of information, to break down.

Two lessons can be drawn from this sad and sorry episode. One is that economists need to think more carefully about the specific ways in which important prices in the economy are set, and the associated incentives that affect the various players in the relevant markets. Doing this could lead to a significant programme of rather important and interesting economics research. The other lesson is simply that setting LIBOR surely cannot continue to be done as it has been hitherto.

Higher education and growth

Last weekend I spent some time reading a very strange report, in fact the more I think about it, the stranger it seems. The report in question was produced by the think-tank, Institute for Public Policy Research (IPPR), for the University and College Union (UCU). Entitled Further Higher? Tertiary education and growth in the UK's new economy, the report was published earlier this month. It's discussing some really interesting and important issues, and to that extent the report is to be welcomed. However, some of the report's analysis is pretty shaky and quite confusing, and so in my view it should be read with great caution, and in a critical spirit.

In a nutshell, the report's line of argument goes like this:

1. Both the social and private returns to higher education have been substantial and will continue to be so.

2. The UK economy needs to get back to growth, and the opportunities offered by low-carbon sectors offer a good way of doing so. Two sub-sectors are examined in more depth, wind power and low-carbon vehicles.

3. These sectors are R&D intensive and call for a skilled labour force, including lots of graduates, especially in engineering. Hence there is potentially a big role for higher education in supporting such development.

4. And we all live happily ever after...........

Actually, the last point is my own addition, but you get the idea! The argument is clearly set out in the report, has a nice logical structure, and ends up with conclusions the universities will like. But let's not be too hasty to accept the whole thing at face value, for there are some flaws.

First, while the analysis of returns to higher education is broadly OK, it fails to take into account one factor emphasised in the more technical economic literature on the subject, namely so called selection effects. This is the point that those who go on to university are presumably drawn from the brighter and/or more hard working segments of the population, and many of them would have done well (i.e. earned more income) even without going to university. Hence the standard ways of measuring returns to higher education might overstate the returns to some extent. Universities are great places for work and study in any case, so we don't need to exaggerate their benefits.

Second, I thought the choice of sectors on which to focus was rather unfortunate, especially wind power. Technically, wind power is all that the report claims, but there was not a single word on the truly dire economics of wind power. Wind power requires massive subsidies to be viable at all, when compared with other means of generating electricity, and eventually we consumers pay - either through higher taxes, or through higher electricity prices. Now, I am not against some state support for new technologies in cases where there would be significant learning effects or other public benefits from support. However, I'm quite sceptical as to whether such a case can be made for wind power.

Last, the report's old fashioned approach to manpower planning was less than convincing. It tends to highlight a sector, project some growth and translate that into new jobs, and then note that much of the new jobs are in STEM subjects or management, finally implying that universities need to be supplying the additional graduates. Only once did the report mention that high salaries - in other words, incentives - might be needed both to draw more people into engineering, and to attract engineers into new sectors.

The conclusions of the report focused on two areas, namely: the problems of ensuring that we have a sufficiently skilled labour force; and creating better conditions for innovation, especially from universities to industry. One can't really disagree with these points, though more on incentives, worker flexibility (with lots of movement between sectors) would have been nice. But these are just my own views, and what really struck me when I reached the end of the report was just how little we understand about either of these issues, i.e. promoting a more highly skilled labour force and promoting innovation.

From open access to open study?

In some recent posts I have talked about moves towards open access for universities' research publications. Whether we shall get there or not remains to be seen, though pressure to move in that direction has certainly been building up. Meanwhile, the 'open online world' has been making its presence felt in the area of teaching, with increasing numbers of universities, including some of the leading ones in the United States, making some or all of their teaching material freely available to everyone - at no cost.

A few years ago now, MIT started putting its teaching materials online. What appeared ranged from hand-written notes and diagrams, presumably scanned in, through Powerpoint slides, to detailed and beautifully presented lecture notes. The material covered virtually all subjects taught at MIT. In one sense one could see all this as a marketing exercise, allowing MIT to show off the sheer quality and diversity of what it taught, and I imagine this would have helped both student recruitment and faculty recruitment.

At the same time it was the start of a novel approach to student learning. Students (or anyone, in fact) could download what they wanted, study it at leisure, and then move on to some other topic, or the same subject at a higher level, or whatever. Of course, without actually registering at MIT, and paying a fee, these students could not have their work assessed, they were unable to get any form of certificate showing they had followed a particular course and passed it, and they were unable to graduate with a degree. For some folk, just wanting to dip into a subject or update existing qualifications, this wouldn't matter at all; for others, really wanting and needing some paper qualifications, it would matter a great deal. Perhaps getting a taster of MIT's material will have encouraged quite a few people to take up serious studies, either at their local college or university, or even, in some cases, at MIT itself - if they could get through the highly competitive selection process for admission there.

More recently, other universities have been getting in on this act. Thus Stanford, in partnership with Michigan, Pennsylvania, Princeton and UC Berkeley, has established a business, Coursera, through which diverse courses are already offered for free. This business has been started with the help of some venture capital, though as yet it is not wholly clear how revenues will be generated - but I imagine students will need to register and pay a fee to get credits for the courses they have completed.

These amazing developments - that would have seemed like science fiction only a decade ago - seem to offer the possibility of wholly new ways of thinking about higher education, and getting a degree. For instance, suppose a student pays fees to various online providers to gain credits for particular courses, then decides to complete his/her degree by registering for a final year at a suitable institution operating in the traditional manner, and completes successfully. Overall, the student will have done enough for a degree, but whose degree will it be - the institution where he/she spent the final year? For a model like this to work, the credit transfer system would obviously have to be pretty flexible, and I suppose there would have to be some means of  monitoring the quality of the various courses - unless we relied on a highly uncertain mix of 'the market' and reputation to do that job for us.

And what about the implications of these developments for conventional bricks and mortar universities? Well, I'm sure some will survive, whatever happens, rather in the way that diverse handicrafts survive and even prosper in a largely mass production economy. Academics might find their jobs changing, with some writing course material for online providers (for a suitable fee, naturally), doing some research from home (perfectly feasible for many, especially in the arts and social sciences), and giving tutorials and advice sessions from home using Skype and the like. This sort of diverse and highly decentralised way of working is becoming increasingly possible - and therefore, I suspect, likely. With change along these lines, in another 10 or 20 years perhaps not many of us will still need our University offices........

More on open access publishing

Over the past few weeks the debate about open access publishing has been getting even more heated, though I'm not completely convinced that much light is being cast over the issue - there is a great deal still to be settled, it seems.

In mid-May, the Times Higher Education reported (May 17th, article by Elizabeth Gibney) that the EU was planning to insist that most of its 80 billion euros of research funding through the Horizon 2020 Programme should lead to outputs that should be published though an open-access model (probably from 2014 or so). This is in principle a huge boost for open access, though a lot will depend on the particular models of open access publication that evolve.

Last week, though, a study by the UK Publishers Association, The Potential Effect of Making Journal Articles Freely Available in Repositories after a Six-Month Embargo (not, it must be said, the nicest of titles!), claimed that some publishers of academic journals could go bankrupt if open-access policies became the norm. This might in fact be true, but the claim rather suggests to me that publishers remain wedded to the traditional, long established model of model of publishing research output, where the reader (or subscriber) pays. Surely publishers themselves should be thinking more about other possible models - then they might be able to lead rather than follow change, and be prepared for whatever new models might become the norm.

Later this month, a UK study group on open access led by Dame Janet Finch (former vice-chancellor of Keele University) is expected to report. This group is apparently thinking what fee levels would likely be needed to support publication of research papers - to be paid by the researcher, and hence forming part of the researcher's grant in the future. They appear to be thinking in terms of a so called 'cost neutral' fee of around £1450 per paper. To me this sounds quite a lot of money, and it has already attracted criticism for failing to address the controversial issue of publishers' profits.

Moreover, for researchers in disciplines where almost all research needs research grants, such charges for publications - access then being free for the reader - might prove manageable. But what about researchers in the arts and social sciences, where many good papers are written - and published - without the support of an external research grant? Will these academics, in the future, simply be told that of they want to publish anything,  they had better get themselves a grant to provide the funding?  I can't see this being very easy, but equally, departments might not want, or be able, to pay for publications by their staff either.

Likewise, what will be the implications of 'open access' for refereeing papers (peer review), refereeing research grant applications, journal editing and the like, all services that academics have traditionally performed more or less for free, as part of their job? None of this is yet clear, so there is much interesting discussion to come.

Student fees and government debt

A few days ago, I saw an interesting item on the BBC website suggesting that the move to higher tuition fees in English universities would significantly increase both public sector spending and public sector indebtedness.  The item was based on a recent report published by the Intergenerational Foundation (an organisation I had not previously heard of), written by Dr Andrew McGettigan. And the report does indeed make the claims that were highlighted by the BBC, backing them up with some careful calculation and analysis. The full report can be downloaded here, but for now, I just discuss a few key points.

(1) The government is in the process of cutting the annual HEFCE funding that pays for teaching in English universities by about £3bn. The idea was that this cash would be replaced, or more than replaced, by the higher student fees. As it has turned out, most universities are choosing to set fees at or close to the legal upper limit of £9000; assuming that enough students are recruited who are willing/able to pay such fees, universities will find that they are financially better off as a result of the government's reforms. However, because the money will now follow the students, there will be somewhat more competition between institutions to attract and retain students. This is claimed to be one of the benefits of these reforms in university financing.

(2) Most students will be able to pay the fees since they will have access to student loans from the government (via the Student Loans Company). Student funding provided in this way will not be shown as a cost for the Department for Business, Innovation and Skills (which currently has responsibility for the English universities), so this department will be shown as saving some money. But financing student loans is not free, and will be a charge on government, raising the outstanding government debt until enough graduates are paying down their loans to more than offset the new loans going to new students.

(3) This is where the story gets both messy and controversial, since the outcome of the new policies depends on a huge number of assumptions, extending a long way into the future.

(4) For students, they start to repay their loans once they graduate and achieve annual earnings over £21,000, paying back at the rate of 9% of income above the threshold, until either the loan is fully repaid, or until 30 years after graduation, when any outstanding loan is written off. If graduates have spells of low income, below the threshold, repayments are suspended. So from students' point of view, the financing of their studies should not prove too onerous.

(5) For the government, though, the picture is not so bright. If most graduates get jobs paying above the threshold and go through life as fairly high earners, then the repayment rate will be quite rapid and government will get most of its money back. But in practice outcomes will be more diverse, and the government is only expecting to get back about 70% of what is provided as student loans. It will get back a higher fraction from men than from women as women are still paid rather less than men, on average, and their labour market participation is also less due to their taking spells out of the labour market for child-bearing.

(6) The government officially expects the outstanding student loan debt to peak at about £50bn in 2030, whereas this report regards that as far too optimistic, with peak debt more likely to be about double the government's figure.

So whether the new funding model proves to be a good way of financing higher education remains to be seen. But it certainly won't be doing anything to help the UK's public finances for at least a couple of decades!

What future for the Eurozone?

I was already getting quite anxious about developments in the Eurozone when I received a very interesting e-mail from my colleague, Richard Stoneman, with whom I have worked on various countries and regions in the past - including most recently, my Falklands project mentioned before on this blog. Richard has been thinking about possible political impacts of a Greek exit from the Eurozone, a once unthinkable event that now looks increasingly likely.

What follows is the core of Richard's e-mail (sent 15/5/12 as the new French President was on his way to Berlin):

Well, after the calm early in the year, it looks like we have an end game. 

But for how long and where will it go?  Greece is the domino/the straw that might break the camel's back. But the real end game is further West; primarily Spain but it could get very unpredictable. In 1989 we belatedly realised huge change was coming in the East but no one foresaw the end game, let alone how far it went. The collapse of the Soviet Union was actually brought about by Russia which decided to leave. Within a few short years half of Eastern Europe was in the EU, one of the many unthinkable changes even as the Velvet Revolution unfolded.

I think we have entered a similar era of unpredictability. Some pointers:

• Greece obviously ever more unstable: if Syriza win the new election, I cannot see EU bending enough to keep Greece in the Euro.
• Greece also probably has an independent get out through Russia. Out of the Euro, cheap currency and lots of Russian help. Got to be a strategic opportunity for Putin and there are historical/religious links. Unlike Eastern Europe, Cyprus has never had antipathy to Russia. Without being an expert, Greece is presumably no different as its historical suffering has been at the hands of the Turks and, in WWII, the Germans;
• If the EU does bend, the rest of the PIIGS will be after softer terms. Whilst there is a strong case for the right sort of stimulus, it has got to be done within a debt reduction framework to be credible. It is increasingly unlikely that that circle can be squared within the Euro. Such a stimulus is probably only workable with a flexible currency that is not anchored by Germany;
• The EU seems to think it now has a sufficiently strong firewall to contain a Greek exit. I am dubious;
• Even if the firewall does prove stronger than most think, it does not change the question back from "when" to "if." Even if prolonged austerity did deliver a fit Spain, etc., to compete with Germany (a very big if), how much longer will Spain, etc., be prepared to put up with it? A collapse/diminution of the Euro beyond Greece has to remain a question of "when" not "if". And what will further delay do other than prolong recession in the north and depression in the south? As soon as there is a general conclusion that it is a "when" not an "if", a tipping point is reached and "when" is likely to happen quickly.

Maybe I am being premature, and a thunderstruck President Hollande has a solution. Perhaps I should wait for his plane to land. But what can he propose other than limited ideas like a big expansion of the EIB to fund public projects within the Euro straitjacket?

I was also concerned to hear Simon Johnson, former IMF Chief Economist, likening the Euro to the Titanic. He said Greece is just the tip the iceberg but really the Euro has already been holed below the waterline. Unfortunately, the Germans, the EU Commission and the ECB are on the bridge sailing on regardless, with no idea of the gaping hole below! A little trimming here and a change of direction there won't fix that.
________________________

To put it mildly, the message here is somewhat apocalyptic, but that doesn't mean it's wrong. Even Christine Lagarde of the IMF has acknowledged that a Greek exit from the Euro, while undesirable, is now to be regarded as a distinct possibility - and she noted that it would be a 'messy affair', which I suspect is IMF-speak for 'a complete shambles'! Hopefully our leaders, including here at home in the UK, are thinking hard both about how to mitigate any economic damage that will result from a possible Greek exit from the Euro, as well as about the quite complex political ramifications.

Improving school standards

This week it was reported that China, specifically Shanghai, performed best in all areas of the 2009 PISA survey of school attainment (see BBC website, OECD website). PISA is the OECD's Programme for International Student Assessment, and every three years it examines the performance of 15 year old school pupils in reading, mathematics and science. For PISA 2009, over half a million school pupils were surveyed, in over 70 countries and territories. The PISA test results are widely regarded as the most objective and reliable tool for assessing a country's educational standards, both absolutely and relative to others. Viewed over time, it shows how countries rise and fall in the world educational league tables.

Now, the results for Shanghai were actually published back in 2009, but the Chinese government has been reluctant to allow publication of results from other part of the country. Apparently, though, other parts of China also performed very strongly in PISA tests, even in areas where general living conditions remain quite poor. Poor provinces came out well, and it also turned out that differences in attainment between rich and poor pupils were surprisingly small. Reportedly, an underlying factor in these results is the idea of education as the key to social mobility and success, very deeply rooted in Chinese culture more or less regardless of social background.

Two points about the Shanghai results are of particular interest. First, the city has steadily advanced up the league table over the past 15 years, presumably the result of deliberate policies to foster high educational standards. Second, as the best performing region in the world, Shanghai's performance is now substantially above the OECD average performance, placing Shanghai in a strong position to do well economically in future years - assuming we accept the idea that a strong education system often underpins future economic growth.

In contrast, the UK's performance stands at around the OECD average in reading and mathematics, a little above the OECD average for science. This is not terrible, but it's not brilliant either. If the UK wishes to be a prosperous and competitive economy in 10 or 20 years time, it would certainly help if we could raise educational standards in our schools. In part this is a matter for government policy, and much is already being done in that area; in part, though, it is also a matter for popular culture. In other words, we somehow need to get across to people the basic idea that education is the key both to individual success and achievement, and to the UK's wider economic success.

Are we heading for the paperless university?

We often hear talk of the paperless office, but after more than 30 years of the PC and other impressive IT innovations, including the internet, most offices still seem to generate masses of paper and old fashioned paper files. But I've recently been wondering whether universities might nevertheless be moving in the paperless direction. Several strands have come together to set me thinking along these lines. Let's see what some of them are:

Library
It occurred to me recently that I can't recall when I last borrowed a book or a journal from our library! And that's not because I've given up reading. Rather, it's because most new material in areas that interest me comes out first in on line working papers from diverse sources, and most of the journals I read are also available on line these days. Also, colleagues from various other institutions and countries send me a good deal of material, and again, it's nearly all in the form of attachments to e-mails. This is a massive change in the 'information landscape' that has come about over the past 20-30 years, and it is continuing.

Personally, I confess to being quite old fashioned in two respects: I still like the look and feel of 'real' books, and therefore buy for myself the key books on anything I decide to work on; and second, I can't resist printing out a limited number of the articles I want to read, not least because then I don't have to sit in front of a computer screen all day.

Refereeing articles for journals
Increasingly, requests to referee come by e-mail, and the referee is invited to use the publisher's on line reporting system to provide feedback to the editors and to the paper authors. These on line systems vary a bit in quality and ease of use, but they're getting better all the time. Hence on line refereeing is becoming the standard method.

Travel and e-book readers
Many academics, including me, travel a good deal and often take books and various academic papers with them to read on the plane. Increasingly, academics travel with some form of e-reader to cut down on a lot of the weight. I haven't yet taken this course myself, but it can't be very long before I do. It's clearly the future for the travelling academic.

Teaching
This still requires real teachers and real students, but increasing amounts of our teaching materials - lecture notes, literature sources, essay topics, course outlines, problem sets, podcasts, etc., can be found on course websites and can be accessed whenever it suits the students. We used to hand out masses of photocopied notes and papers, and still do in some courses; but increasingly, we simply tell the students where they can find the material on line, and they can access it using their laptops or smartphones. Individual student queries are often dealt with by e-mail, though we do also meet students to discuss things personally. This will remain an important part of the learning experience, I would expect.

Essays and other student work
When I started life as an academic several decades ago, all essays were hand-written by the students, while student dissertations were sometimes typed (on a mechanical typewriter, just as I used for typing up my PhD), sometimes hand written. Nowadays we accept nothing that is not properly word processed, and even when we require hard copy (i.e. paper), we also normally require an e-mail or on line submission too. The latter enables us to do automatic checks for plagiarism, and also provides automatic templates for entering marks, comments, etc. All this has become quite standard in the last 5-10 years, and probably quite soon we shall stop asking for the paper copies.

Examining
This is more difficult to make electronic as students, both at undergraduate and MSc levels, usually write their answers in answer books that we provide. Someone then has to read and mark everything. However, we have experimented a little with automated examining in some quantitative/problem solving areas, and it has worked pretty well.  But in most examining, I think paper will remain with us for a while longer.

On the other hand, although PhD theses are always supplied on paper, the last few I have examined have also been supplied electronically, and all the needed report forms have been electronic too. Hence in this area, too, it can't be long before we can dispense with the print out and conduct the whole examining process electronically. Even the viva could be conducted using Sykpe, or some other mode of on line conferencing facility, so that we might even be able to cut down on some travelling (though it would be a shame to miss out on the occasional nice lunch with colleagues).
_____________

So where does all this amazing change leave us? Aside from leaving us gasping for breath, it seems to me to leave us with institutions that have automated rather successfully (i.e. made electronic and paperless) many of the important things they do, both in teaching and in research. I would see these developments as largely beneficial.

On the face of it, this should have freed up some academic time for improved student-professor interaction, and at times I think that works very well. But as ever, there is a downside that might need thinking about more carefully. This is the simple point that by making the creation of forms and documents so cheap and easy, the IT revolution we have been going through has also stimulated the demand for ever more forms and documents to be created to monitor just about everything we do in ever greater detail and depth. To put it mildly, I am not convinced this is such a great idea. Just because we can do something easily and cheaply, it doesn't mean we should.

The Examination Season Approaches

This is a time of year when it's wonderful to be retired, as I no longer have to set and mark diverse exam scripts at various levels, for various courses. As it happens I did do a tiny bit of teaching this year at the MSc level, and was hence asked to set one question for the exam, but my colleagues teaching the rest of the course will deal with the marking - unless unexpected points crop up where they might need to consult me.

For the students, naturally, this time of year is probably a bit less wonderful, as their teaching is largely completed and they just have a short revision period before the exams themselves get under way. At undergraduate level we examine the students each semester, so in the spring semester most students should have no more than four exams to cope with - very occasionally, a student might take five exams if they have some catching up to do; and final year students writing an honours dissertation will only have three, though the dissertation itself also has to be assessed. For most courses, students will also have done some essays that contribute towards their final mark, but exams usually provide the bulk of their assessment.

Most of the examinations we set in economics and management give the students lots of choice, for instance to answer three questions out of eight, though sometimes we set a batch of multiple choice questions or short essay questions that all have to be answered. All our exams, as far as I am aware, are closed book; students cannot take into an examination their textbooks or lecture notes, and the only permitted help is formula tables in quantitative exams, and English dictionaries for the many overseas students we have.

So that's what we actually do as regards assessment and exams. The question is, could we do better? Is our rather traditional model of examinations still suited to the modern world, or are there better models 'out there' that we could adopt? Let's think about some alternatives.

(a) Don't examine at all
On this model, we would just take the view that the experience of being at university for three or four years for the standard undergraduate programme, and surviving right through to the end, merits the award of a degree. End of story! This approach would make it hard to distinguish weaker and stronger students, of course, and employers might not be too pleased at the limited information provided about what students had done. But educationally, is this such a terrible idea?

(b) No exams, just a final short viva to judge student performance
This is a step beyond (a) in that it tries, in a rough and ready way, to distinguish between different qualities of student performance. When this sort of idea comes up it is sometimes protested that many students would be too nervous to do well in a viva, and that therefore it is unfair. But the same argument can be raised regarding exams (some people are good at them, others not), and yet they form the basis for our standard assessment model. It can also be argued that a viva is rather subjective, though when I've been asked to hold undergraduate vivas (e.g. occasionally as part of an external examining duty) I've found them interesting, informative and surprisingly helpful. So I think there could be some mileage here.

(c) Examine entirely through assessed coursework, no final exams
We already do this for some optional courses, but not for a whole degree programme. But why not extend the idea to all courses? One advantage, since there are no exams and no revision period, it that we could actually teach a bit more than we do. So we could cover more material or achieve somewhat greater depth, while the students write their essays, do projects, and so on. The whole educational experience could be very diverse and challenging. The possible snag is that it runs into problems of plagiarism, just copying chunks of material from websites. This is far too easy and tempting these days, though we are also learning to police it better. So it should be manageable. Some professional bodies and employers prefer to see our students examined, so they might not welcome this coursework approach. And just as some students are brilliant at exams, other really shine when doing coursework - would that be fair? Overall, I'm sure these snags could be managed if we wanted to follow this direction.

(d) The traditional model
This is either exams only or a mix of exams and coursework as outlined above. It works, we're all familiar with it, and it's been around for a long time. Is it still suited to the modern world? Well, I'm always very skeptical when folk claim that we live in a modern world and that 'therefore everything has to change'. As a general principle this seems to me to be pretty silly. Indeed quite the opposite, if something has been around a long time and still seems to work well, why rush to change it?

This line of argument suggests we just stick with the traditional model of assessment. However, it does also seem to me that we should regularly think about other options such as those above, not least because we gradually learn more about the educational process and how people learn, and in time this might lead us to prefer some other way of testing our students.

But nothing so radical will be happening in the current exam season!

Open Access

No, this has nothing to do with getting more students from poor backgrounds accepted for university degree courses. Instead, it's all about how we publish research.

For years now, debate has raged about whether research should still be published through the traditional model via academic journals - from which you would have to purchase a subscription - and books - which you would have to buy. On the face of it, this 'commercial' model has worked rather well for a long time, so why rush to change it, and why now?

The reason is quite simple, namely the internet and all the tricks and tools that go with it. Because we can now publish research more quickly and more openly, it is argued that we should. The case for moving in this direction has been argued by the Research Councils in the UK, occasionally by the Royal Society, by increasing numbers of researchers who resent the high journal prices and profitability of some of the larger publishers (notably Elsevier), and just this week by the Wellcome Trust. Wellcome wants to see all the research it funds becoming publicly and freely available within six months of publication, something that the traditional commercial journals certainly don't allow - they always charge a fee for access to articles in their journals, as I know myself, having sometimes had to pay it when I need something to which my university library has no subscription.

It seems to me increasingly likely that academic publishing will move in the direction of open access, but probably not immediately or completely. For although the traditional model of academic publishing has its drawbacks, it still has a lot going for it; and most importantly, the emerging new model is neither technically easy nor free, so new charging models will also be needed. Let's briefly review some features of the two models.

Traditional model

• It relies on largely voluntary refereeing services from academics, one of the many free services academics provide as part of their role in the academic community. I have very occasionally been paid a fee for refereeing, and it was always a purely notional sum (e.g. £15). Academics are generally happy to referee for journals of professional bodies whose journals don't make massive profits, less happy to do free work for profit makers such as Elsevier.
• Some journals now have submission fees, but most submissions are still free to the researcher. So research grants rarely need to include publication costs.
• Publishers handle refereeing, editing and publication, recouping their costs from library and individual subscriptions. For good economic reasons to do with market segmentation, institutional subscriptions are always far higher than individual ones.
• Publishers have incentives to market their journals, since that's the only way they can cover their costs and make any money.
• Over time, new journals appear and old ones occasionally 'die' or evolve into something else, so there is some dynamism in the market.
• Depending on the discipline, there are various methods of ranking journal quality.

New model - open access

This has not yet stabilised into a settled model yet; instead, it consists of several overlapping threads.

• Universities and other institutions are increasingly tending to establish public depositaries of their staff research publications.
• In addition, there are also subject-based depositaries.
• In both the above cases, it is important that depositaries are searchable online, and ideally if an item is in both an institutional and a subject-area depositary, the two versions should be the same. It is surprisingly hard in practice (and therefore costly) to achieve such consistency.
• There is now a proliferation of e-journals, some of which publish almost anything, while others operate a normal refereeing process before certifying an article as reaching a suitable standard. Some of these journals are still experimental and have received funding to set them up. But as to their funding model for the longer term, this is simply not clear (to me). A decent quality open access journal simply cannot be done for free - someone has to pay!
• Research funders (like Wellcome) are tending to demand early and open publication of research, and are starting to envisage a situation where research grants could include an element for publication costs. Then researchers would pay to get their papers published, the publisher in due course making the research available online for free. This seems to be the (desired) direction of movement, but most researchers are not there yet.
• In all the versions of open access that I have seen discussed, there seems to be little or no incentive to do any marketing. Material is made available, and users then have to find it. This aspect probably needs more thought than it has so far received.

So, we live in interesting times, and the world of academic publishing will look very different in a few years' time.

EU Aid for a Small Economy

As noted in previous posts, I have been 'plotting' a trip to the Falkland Islands (FI) for some time now, and finally it happened.

Together with a colleague, we have an EU contract to provide technical assistance to the Falkland Islands Government (FIG) to help them secure over 4 million euros of EDF 10 funding. Until this contract came along, I hadn't really understood that Brussels provided aid to the overseas territories of the member states, but apparently it does. In the case of FI, the amount of funding for the current period was decided some time ago, but as one has learned to expect of the EU, in order for the money actually to be disbursed, FIG has to submit a huge pile of quite complicated documentation to confirm that it meets the EU's criteria. Our task, then, is to study the economy of FI in order to help FIG prepare all the reports needed to get the money, intended as budget support for spending on economic diversification and rural development.

This trip south nearly didn't happen, as there were some delays over getting our contract properly signed off by the EU. However, approval came through just in time for us to confirm the flights out to Stanley. The last few days before we departed on March 25th were a bit crazy, though. In my case, I had a day in Brussels for briefing at the Commission, then a day in London for some Foreign Office briefing and a meeting with the FIG London Office. My colleague was working on another EU-funded project based in Barbados (yes, it's tough being a consultant..........), so he flew home just two days before we travelled to the Falklands. Amazingly we managed to get to Brize Norton in time to catch the flight, and the journey south, though long, was totally uneventful.

Arriving at the Mount Pleasant base in the Falklands is not one of life's great experiences, as it sits in the middle of a broad expanse of fairly dull heath land, and the whole area looks extremely monotonous. An hour later, arriving in Stanley, everything is completely different. A small town of only 2000 inhabitants, Stanley is right by the sea and is a very colourful place, with lots of geese and sea birds, as the above picture of Victory Green shows.

Once we settled in, we got down to work and quickly realised that aside from a lot of volatility in income from issuing fishing licences, the economy was in rather good shape, with full employment, no debt, and a general policy by FIG of aiming for budget balance. This very conservative approach to fiscal policy means they can easily cope with a couple of bad years, as the government holds reserves that are more than twice total public spending. Given this, it shouldn't prove too hard to convince the EU that the economy is being well managed. And we do still have the report-writing to do.

Needless to say, you can't go all that way without making a bit of time to visit the penguins. At the weekend in the middle of our visit we flew over to Carcass Island in the west and stayed at a lodge there. We were lucky with the weather and saw a wonderful variety of sea birds, including two types of penguin. The picture above shows yours truly in front of a colony of gentoo penguins.

The timing of our visit overlapped with the 30th anniversary of the invasion of the Falklands by Argentina, and as a result the place was full of journalists. These included several from Argentina itself, some quite liberal and open minded, some very hostile to the UK and interested only in broadcasting propaganda. However, we met some of the Argentine journalists in the Victory Inn, and at the personal level they were interesting to talk to. FIG basically wants good relations with Argentina, involving normal trade, fishing agreements, unrestricted travel, and all the usual things. Hopefully the present hostility from Argentina will not last too long.

Now, back to a bit more report writing........

What do universities do for us?

It seems to be quite fashionable just now to think of universities in terms of their contribution to the economy, and this can be done in a number of ways. Thus we can start by simply viewing the university as a large employer, generating incomes for its local community (wage payments, mainly), supporting local demand for goods and services in general - retailing, diverse other local services, etc. This is all very familiar and perfectly valid, though in most respects it doesn't really treat a university as anything different from any other large local employer. Yet somehow, we do often like to think of the university as a different sort of 'beast'.

Besides local income generation, universities also teach students at all levels, so that one of their principal 'outputs' (if I may put it that way), is a flow of graduates who move on to work in all areas of the labour force, both in the UK and overseas. Typically (on average, and varying between disciplines), graduates earn a wage premium over non-graduates, and by assessing this carefully we can arrive at an additional benefit of the university. In effect, we take the view that the university contributes to the process of making people more productive in the workforce.

Through their innovation and knowledge transfer activities, universities can also benefit local and national firms in many different ways. How effectively they do this will depend both on their skills in building local links and business partnerships, and on their main subject areas. Moreover, to the extent that this aspect of a university's activities is beneficial to business, we need to be thinking in terms of quite long-term, and usually highly uncertain benefits.

One way or another, though, all of the above is about economic benefits - no bad thing, but surely not the full story!

And recently, I've been reading a fascinating book that puts forward a much broader view of what universities are all about. This is Stefan Collini's book, What are Universities for? (Penguin Books, 2012). He argues forcefully, and I think rightly, for the value of intellectual investigations per se, taking the view that understanding our world, and helping others to do so, is both a socially valuable activity and the mark of a civilised society. He acknowledges, of course, that whatever universities do they have to live within their budgets; but at the same time, he argues that we should be far less defensive than we often are, and should not feel we always have to defend what we do in the university in terms of its putative economic benefits.

Given his starting point, it is not too surprising to find that Collini is no supporter of the modern idea of the 'student as customer', since he doesn't see the university as evolving into a new form of supermarket. Nor is he a fan of the modern audit and accountability ethos that besets our universities, as is evident from his remarks about the beginnings of research assessment back in the 1980s: 'This was a key step towards the all-devouring audit culture that has since so signally contributed to making universities less efficient places in which to think and teach.' (p34). In the same vein, Collini is very critical of our current approaches to making teaching more accountable through setting aims and objectives and the like, arguing that it tends to replace academic judgement with form filling and formal procedures.

Overall, he urges us to see our universities as custodians of an important part of our scientific, intellectual and artistic heritage, and valuing this properly calls for a wider and much more long-term perspective than is implicit in the current tendency to focus on the narrow economic benefits. I agree.

Thinking about university strategy

Like all large organisations these days, universities periodically spend some time reflecting on their strategy, and my own university is just now undertaking such an exercise. It seems to be an opportunity for a university to think about its strengths and weaknesses; to think where it wants to focus its energies in the coming years - meaning both subject areas, levels of study, and market segments (home and EU, attracting overseas students, full-time vs. part-time, distance learning, overseas campuses, etc.); to determine the most appropriate comparator institutions (against which we see ourselves directly competing); and to make sure that whatever we do, we do it within budget. Taken together, this is all quite demanding - strategy is not an easy business!

Given the uncertainties of life, a strategy is never going to take the form of a set of precise instructions for people within the institution to follow, it will be more like a framework, a set of guiding principles that shape how we think about the institution, and how we see it moving forward.

Ideally, too, a decent strategy needs to avoid the platitudes and management-speak that are so pervasive nowadays, aiming instead to set out a small number of quite concrete and understandable goals, while identifying the key constraints and challenges that have to be overcome in order to achieve them, or at least get the institution shifting in the right direction. If that can be done, there is a good chance that staff will see the strategy as something they can understand, relate to and support, which is surely at least half the battle. There is nothing worse than a strategy full of abstract and general notions that are neither understandable nor operational. So I hope my own institution will try to be both ambitious and very practical when our strategy is finally settled (in a few months' time).

As for the content of a strategy, it obviously has to address the main areas of a university's business, namely teaching (or, as we often term it more broadly nowadays, the student experience), research, links with business and the community, and the international dimension. In each area, we should be playing to our strengths, while differentiating ourselves from neighbouring institutions (it would be rather foolish for all the Edinburgh-based universities to end up looking pretty much the same, for instance) and enhancing our position in relation to our principal competitors.

Doing all this within budget is the real challenge, not least because a high proportion of UK universities, including my own, have already delayed lots of maintenance and refurbishment spending in recent years in order to avoid building up excessive deficits and debt. For a while this is absolutely fine and wholly understandable. But sooner or later there has to be some serious spending to upgrade facilities and services, otherwise the basic institutional infrastructure slowly runs down - buildings simply become shabby, and fail to deliver services of the needed quality. Finding the funds to redress such deficiencies and, more positively, investing to provide a wholly new level of service quality, will be the real measure of success of any new strategy.

Then there is the awkward matter of the changing higher educational landscape. Should we, for example, think of most of our provision in terms of on-campus, conventional, full-time degree programmes any longer, or should we be thinking more radically in terms of different modes and patterns of teaching/education, with new mixes of on campus tuition and distance learning, intermingled with massive use of IT to deliver material across the internet, to diverse devices (e-readers, mobile phones, PCs, etc.). And if we do move in such a direction, is it what students themselves really want, does it work as a model of education, what would it cost, and what would it imply for nature and quality of the overall student experience?

These seem to me to be important, interesting, and timely questions. I wonder how either my own institution, and many others, will answer them in the coming years.