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The Free-Marketeers get up. Even when the economy is in bad shape more and more think tanks get launched

Article originally published in Frankfurt Allgemeine Zeitung under « Die wirtschaftlichen Freigeister stellen sich auf die Hinterbeine » on 11 august 2005. Translation by Dr. Hardy Bouillon, Head of Academic Affairs for the Centre for the New Europe.

In Eastern Europe they spring up like mushrooms: during the last three years the number of « free market think tanks », i.e. think tanks for free market and liberal thinking, in countries of relatively decent wealth has enormously grown – exactly there where the lack of money does not make it seem likely to happen. From the Russian Hayek Foundation (founded in 2002), named after the economist and social philosopher Friedrich August von Hayek, the Albanian Liberal Institute (2003), the Bulgarian Society for Individual Liberty (2003) and the Slovakian Institute for Free Society (2003) to the Economic Policy Research Institute in Macedonia, that was founded this February: liberal research and consulting institute are spreading quickly.

They do not hold back with their liberal credo: The Moskow Hayek Foundation describes themselves on the internet audaciously as « research center with its own neo-liberal political niche ». Their outspoken goal is to assist the capitalist process in Russia ». The Albanian Liberal Institute wants to push the « doctrine of Laissez-faire, to limit the role of government and to stand up for civil rights « . And the Bulgarian Society for Individual Liberty will take care for a broader recognition of the « values of liberty »: « inviolability of every individual’s personal dignity, property, and life, individual responsibility, equality before the law, unrestricted economic initiative and competition ».

Why in Eastern Europe? « In these countries the discussion about economic policy after the collapse of socialism has liberated itself from the elites », says Sacha Kumaria from the Stockholm Network, a London-based platform for think tanks in constant dialogue. The Stockholm Network was founded in 1997 by young British journalist Helen Disney in collaboration with six institutes: the Centre for the New Europe (CNE, Brussels), the Edmund Burke Foundation (Netherlands), Timbro (Sweden), the Circulos de Empresarios (Spain), Paradigmes (France) and the Social Market Foundation (Great Britain). Today the Network includes 130 Western and Eastern European « Think tanks ».

Not only in Eastern Europe, but also in the West new free market institutes are founded which are devoted to educate the public and consult politicians. In 2001 the German Council on Public Policy was established. Guided by sociologist Michael Zöller it is concerned with transatlantic comparisons, analyses and questions of political order. Also in 2001, Anthony Livanios, political consultant for Nea Demokratia, founded the Hellenic Leadership Institute in Athens. The former economics minister Alain Madelin, who ran in 2002 for French Presidency and lost, founded his Cercles Liberaux in the very same year.

However, « Think tanks » are not a refuge for washed-up politicians who look for solace and a job. To senior scientist the opportunity to promote the competition of ideas and to provide politics with background knowledge is a welcome tool to bridge the gap between theory and practice. Courageous young doctorates find a way to start their career or to take an extra job. After finishing her doctorate at the University Paris Dauphine in 2003, economist Cécile Philippe started with the help of CNE her own institute – the Institut Economique Molinari in Belgium. And in 2004 the Istituto Bruno Leoni was founded in Milan, guided by the lively 24 years old Alberto Mingardi – a kind of libertarian Wunderkind, who in the age of 17 wrote and published his first book and has read every eminent piece ever written in classical liberal literature.

« The growth of these think tanks’ in Europe goes on for seven years now « , says James McGann, Senior Fellow at the Foreign Policy Research Institute (FPRI) in Philadelphia. The number of left-wing institute has grown in a similar way. « Think tanks » are fashionable: More than half of the 4500 « Think tanks » in the world, whatever ideology, were established after 1980 – « as a result of globalisation, the end of the cold war and the appearance of new transnational problems », explains McGann. « One has to be careful », warns McGann. Most of well-funded and long-established « Think tanks » in Europe have still a social democratic leaning. « We cannot talk of a parity between left and right in Europe, neither with respect to number nor to impact. »

In the United States it is the other way round. According to an analysis of political scientist Andrew Rich (City College in New York) the number of « Think tanks » in the US has grown from 60 in 1960 to more than 300 by today, two third are « right or center right » – which include classical liberal institutes. Hence there the left-wing groups are fighting for public recognition. Some 80 American sponsors committed themselves last weekend to donate at least one million dollar each, to establish a network of (social democratic) liberal « Think tanks » in collaboration with the newly founded « Democracy Alliance » that is closely tied with the Democrats.

The « inferior » classical liberal and conservative Think tanks in Europe already are so efficiently networking as their partners in the US, according to McGanns, « to the effect that it looks as if there were more of them ». Their public « visibility » – their effect in the media and their access to politics had grown noticeably. The Stockholm Network is a typical case of efficiency promoting and publicity creating infrastructure that gives free market orientated « Think tanks » more room to manoeuvre and hence more weight. For instance, if a British institute needs a German pro free-market expert in environmental issues, Kumaria and his colleagues send around e-mails through the network until someone is found who knows such an author. The London-based institute also commissions research studies, publishes and markets studies, especially on welfare dependency, health care, education and globalisation.

However, the Stockholm Network is yet not as effective as the famous American Atlas Economic Research Foundation – one reason being that it cannot do financial sponsoring. Atlas promotes a « society of free and responsible individuals ». With an annual budget of some 3 million dollars, the foundation directed by Alejandro Chafuen helps « intellectual enterprisers » around the globe in practical and financial issues, e.g., to establish « Think tanks » find appropriate staff, disseminate their work, help finding sponsors and connect with each other.
The renowned Mont Pèlerin Society, a loose connection of liberal thinkers around the world, helps networking too. Over the last years, the balance of power among university professors and Think tank members has changed noticeably in that society, founded in 1947, noticeably to the benefit of the latter. In addition and following the US model, since last year free-market think tanks in Europe meet regularly for « Resource Bank Meetings », a kind of « idea fair » that offers besides a huge conference program opportunities for think tanks and guests to « network ». Upon an initiative of French economics professor Pierre Garello and German philosopher Hardy Bouillon, the first meeting of that kind took place last year in a town close to Sofia. The next « European Resource Bank » will take place in October in Vilnius, and in 2006 the venue will be in Vienna.

The liberal activists do not fear rivalry for sponsors – finally they have the same free-market goal. Hence some participants grin when reporting that it could happen that one private donor promises 1,000 dollars and hints that there would be « much more » if the result would be right. No five minutes later he would ring up another small think tank offering the same bait. This neither hurts nor creates trouble among the community. Competition is good for business – and who could life up to this without bitterness, if not the defenders of free market and competition. FPRI-expert McGann comes up with the same conclusion: « The company among the free market think tanks is much stronger than that of their opponents. »

McGann views Eastern Europe as the one who fuels the boom of state-independent and non-partisan think tanks of the Anglo-Saxon type in Europe, a boom that in the meantime is also visible in Western Europe. However, behind the Eastern European « think tanks » there is a lot of initiative, paradigm, practical help and, last but not least, money from the US. « The most free-market think tanks’ in Eastern Europe are fuelled by American sources – be it private or government money », confirms Yordanka Gancheva of the Economic Policy Research Institute in Macedonia. « Almost all money from European sources goes through the hands of our government and hardly ever reaches the independent free-market think tanks’. » The little institute lived until now on 37,000 dollars seed money from the Trust for Democracy, a financial institute, installed by the German Marshal Fund, USAID and the C.S. Mott Foundation.

The Center for Entrepreneurship and Economic Development (CEED) in Podgorica (Montenegro) writes studies by proxy of the European Agency for reconstruction, USAID and the World Bank. A team of 14 people has an annual budget no bigger than 160,000 dollars.
To many of the free market institutes, official money is not more than seed money; most of them reject any government money. Hence the 15 year old and politically very influential Lithuanian Free Market says on its website: « Financial independence is crucial for relentless pursuit of the Institute’s mission. Therefore we mobilize resources for our cause from private sources. » Followed by an overview of their donators – a list starting with Philip Morris, Lithuania, going over Hansabankas and leading to Boehringer Ingelheim and Pricewaterhouse Coopers. Miroslav Prokopijevic of the Free Market Center (FMC) in Belgrade stresses too: « FMC is only privately funded. And Atlas plays an eminent role in this. »

The Eastern European institutes frankly talk about their budgets and sponsors as the American paragons do. « We are libertarians. We have nothing to hide », says Dragana Radevic of CEED. In the US, it is easy to get information about the financial streams that fuel these institutes. The Heritage Foundation, one of the biggest and most influential conservative « think tanks » in Washington – which by the way backs the Moscow Hayek Foundation -, has an annual budget of nearly 35 million dollars; who are the sponsors can be checked online in the business report. An even more detailed overview is provided by Media Transparency, a database of critics of conservatives, who accurately list more than 21,000 donations since 1985, in sum more than 1.25 billion dollars. The main sponsors of the Heritage Foundation, directed by Edwin Feulner, are tax-exempt foundations: the Olin Foundation, who intentionally cut back their funding, the De Vos Foundation, the Bradley Foundation, the Castle Rock Foundation, sponsored by the Coors brewer family, and, finally, the Charles Koch Charitable Foundation.

Most of these big private « charities » donate their money – which is not as exuberant as in former days – within the United States; in Europe such finance sources are noticeably scarcer. Next to domestic and overseas foundations as Atlas and Earhart Foundation, here mainly private individuals and corporations act as founders. In the US, many of these firms – market leaders in their branches – treat their support overtly and view their commitment as an advertisement. For instance, Exxon Mobil publishes a list, in which the company clearly states that it promotes « scientific research for free market solutions » and names the sums: out of a widely dispersed budget for « Policy Information and Policy Research » of 5.6 million dollars in 2002, 30,000 went to the Cato Institute and 405,000 dollars to the Competitive Enterprise Institute.

In Western Europe corporations have difficulties with sponsoring. They fear to put their market-friendly concern into danger by being to frank to the suspicious Europeans. If a pharmaceutical corporation finances scientific research and policy consultancy in the area of health care, they arouse suspicion that the policy concern is only superficial and it is all about money. Contrary to the US, the European public is not used to the idea that one could go along with the other. For instance, companies like Microsoft, Pfizer or Merck do not like to make their charities public – but still belong to the most reliable sponsors of free-market « think tanks », in America and Europe, in Eastern as well as in Western Europe.

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