Economic institute not up to scratch

February 20, 1998

ONE OF Germany's leading economic think tanks, the Munich-based Ifo institute, faces downgrading after receiving a critical report from the science council which advises the federal and state governments on public funding for research and university bodies.

The council, whose recommendations are not binding but are usually followed by governments, said: "The quality of scientific work (at Ifo) often does not meet the standard of a research body on the blue list of institutions qualifying for federal and state funding."

It recommended that Ifo be funded in future as a "service institution", meaning it would continue to receive funding from federal and state bodies but at a reduced level.

The council report on four economic research institutes said Ifo had veered away from pure research to become mainly a data-gathering institution. Too few Ifo employees had earned doctorate degrees, the institute did not cooperate enough with universities and it did not have an overall scientific research programme.

Ifo is one of Germany's six leading economic research think tanks that produce a joint twice-yearly economic forecast for the economics ministry. It is also well known for its monthly business confidence surveys. Ifo, which has an annual budget of DM33 million (Pounds 11.38 million) a year, denied deficits in its methodology and theory. It said the full implications of the report were not yet clear but it did not expect lay-offs among its 238 staff.

The council gave the Kiel Institute of World Economics (IfW) a glowing report, described the work of the German Institute of Economic Research (DIW) in Berlin as mainly positive, and recommended that the Rhineland-Westphalia Institute for Economic Research (RWI) in Essen maintain its blue list funding providing it made some improvements.

Writing in the German daily Suddeutsche Zeitung, Klaus Zimmermann, professor of national economics at the University of Munich, said one reason for current problems in Germany's economic research institutes such as Ifo was that their large structures resulted in a slow approach.

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