‘Start-Up Nation’ or shtetl?

To halt the collapse of Israeli economics education, a paradigm shift is needed.

An aerial shot of Tel Aviv during Israel's annual Independence Day airshow, April 19, 2018 (photo credit: ANNA AHRONHEIM)
An aerial shot of Tel Aviv during Israel's annual Independence Day airshow, April 19, 2018
(photo credit: ANNA AHRONHEIM)
A recent report on the state of economics education in Israel commissioned by the Council of Higher Education has sounded a code-red alarm: the ability of the country to train world-class economists is collapsing. Pockets of excellence survive here and there in the large research universities, but the writing is on the wall.
The marvelously creative community of top-notch research economists this country fostered in the past has, by and large, been disbanded – to other professions or to foreign countries. Hebrew University and Tel Aviv University were ranked 32 and 20 (respectively) among economics departments worldwide in 1990-1994 but have now fallen to places 78 and 73. Other departments in Israel struggle to make it into the top 200. What happened? Money is an easy suspect. The demise of top-notch economics research in Israel and precipitous fall of the best Israeli departments in international rankings follows the explosion of salaries in US economics departments, so a shoot-from-the-hip explanation assigns the travails of Israeli economics to the inability of the country (with its heavy defense burden and fast-growing population) to offer its academic economists salaries commensurate with those in the US. “Cry, the beloved country, we are doomed by the lack of money, there is nothing we can do” – this is the heartbreaking explanation emanating from the hallways of academia and the corridors of power.
This diagnosis, which focuses exclusively on money that is unlikely to ever be found, is responsible for a pernicious paralysis that has brought Israeli higher education in economics to the cusp of final collapse. Clearly, extra money would help, but money alone will not solve the problem and a substantial improvement can be accomplished without it. Instead of mourning that Israeli economic departments are shorter in resources than top US ones, it is necessary to act now: to rejoin the race for global excellence, top Israeli economics departments must internationalize.
The most striking difference between the top Israeli economics departments and their successful counterparts abroad is not buildings or the quality of faculty. It is the almost total lack of international faculty or students. The top departments seem mired in a parochial time-warp where students and faculty are almost exclusively Israeli, whereas top PhD programs everywhere have opened their doors wide to recruit the best doctoral candidates and faculty worldwide without regard for their nationality or their intentions to remain in the country in the long run.
That international mindset – and not simply generous doctoral fellowships or high salaries – is essential to attract students and faculty and climb back up international rankings. Israeli economics departments must reap the benefits of globalization and build a thriving international research community locally instead of sitting passively and suffering a hemorrhage of Israeli talent abroad and a withering of research capacity.
This model – excellence and internationalization at home – has been adopted with spectacular success by many education systems in Europe (prominently the UK), which have managed to rescue themselves from the very oblivion threatening top Israeli economics departments. It does require, of course, an immediate switch to English of the whole ecosystem of economics graduate education in research universities: courses, course materials, departmental web sites, faculty meetings, administration, etc.
To be implemented, the model requires some resources, for sure, but nothing on the scale of the US Ivy League. It does not require dynamiting public universities by paying economists substantially higher salaries than their colleagues in other fields.
It does require, however, strong political will: the Council of Higher Education must implement in full and immediately the strongly-worded recommendations of the foreign experts it has commissioned to report on the state of Israeli economics education instead of dithering and waiting as it has done for so long.
It requires urgent action by the top universities to ditch byzantine recruitment procedures and rules which might have been harmless in a local market but are a death sentence in global a environment. It requires the cooperation of our (admittedly overworked) remaining colleagues in top Israeli economics departments, who must abandon a defeatist mindset that leads them to accept decay and look to the US to train their students. It requires the urgent involvement and cooperation of all the stakeholders in vibrant, frontier Israeli economic research: universities, the Bank of Israel, the government, the financial community, the private sector, and academics, of course.
Israel’s well-being stems from its scholarly, scientific and technical excellence.
A further weakening of Israel’s economic education will not only result in a dangerous fall in the country’s human capital but will also have a dire, direct impact on its economy. The startup nation must behave more like a startup than like a shtetl when it comes to economic research and education.
Philippe Weil and Eyal Winter are professors of economics at the Brussels Free University and the Hebrew University, respectively. They served as members of the commission set up by the Council of Higher Education to evaluate the state of economic education in Israel which presented its report in November 2017.