1. Executive Summary 2

2. Goals and Objectives 3

3. Proposed Activities 4

4. Evaluation 5

5. Track Record and Institutional Capability 6

6. Personnel Qualifications 7

7. Work Plan 8

8. Budget 9

A1. Resumes of Dr. Stephen Baba and Dr. Lan Wu Attachment

A2. Final narrative report of a similar project Attachment

This proposal seeks funding in the amount of $201,650 for the establishment of a summer intensive retraining program for 50 current Russian law professors. By retraining 50 Russian law professors in non-Marxist law and economics, much improved western style law and economics courses can be offered to over 20,000 Russian law students each year.

Over the past few years, historic progress has been made in Russia in moving towards a democratic society and a market economy. However, as the reform moves ahead, it has become increasingly clear that lack of an appropriate legal environment, both on the legislative and practical level, has become a hindrance of further progress. To meet this challenge, a new generation of law makers and practitioners is needed who not only understand the principles and technicalities of law suitable for a democratic society, but also that of the underpinning market economy. The long-term solution is to reform the education system from which future law makers and practitioners spring. Here the problem is the lack of qualified professors.

Law and economics education is fundamentally deficient in two ways in Russia. First, most instructors possess only fragmented and superficial knowledge of modern law and economics with little training in any advanced fields. Second, instructors' rote teaching methodology discourages learning. These two weaknesses, plus the fact that neither students nor teachers have lived in a well-functioning market economy, prevent Russian law students from learning law and economics at even the most basic level. Since Russian law schools take students directly from high schools, the only opportunity for Russian lawyers to learn economics is in law school.

Eurasia Economics Education (EEE) proposes to establish an intensive program specially designed to retrain current Russian law professors in law and economics. The self-contained program will retrain 50 professors from about 30 Russian law schools from 20 major cities. As a result, not only will the professors benefit as trainees, more importantly, law students will benefit through their improved quality of teaching. Over time, the retraining program will contribute significantly to the wide dissemination of the knowledge of law and economics to a large proportion of Russian lawyers. The emergence of lawyers with the basic knowledge of law and economics and economics is of vital importance to economic growth, which benefits everyone.

The proposed program will transfer both knowledge in law and economics and American teaching techniques. Four full-length intensive courses at the advanced undergraduate/masters level will be offered within seven weeks to small classes. Courses offered will be in microeconomics, macroeconomics, law and economics, and American business law. Courses will be taught by experienced American professors and incorporate classroom discussions and problem-solving exercises as integral parts of the curriculum. The American professors will also coach the trainees in designing new courses and curriculum. On a cost per college-course basis, the proposed retraining program is one of the most cost effective retraining programs available.

In less than six years tremendous progress has been made in Russia in its historical transformation to a democratic society and market economy. In fact, a weak but functioning democratic structure and mechanism at least at the federal level has been established; and the economy has basically been privatized. Despite these fundamental changes, many obstacles exist that hinder the country from achieving faster and further progress. Top among them is the severe lack of qualified law makers and practitioners. The persistent lack of laws and legal codes governing sectors/subsectors of the economy and the prevailing law-avoiding practice in almost all spheres of the society is testimony to the severeness of the problem. To meet the challenge, a new generation of law makers and practitioners is needed who must not only understand the legal technicalities of a democratic society, but also understand the principles of a market economy that underlie it. The long-term solution to the problem lies in reforming the present educational system from which law makers and practitioners are brought about. Here one key factor is the lack of qualified professors.

Law and economics education in Russia suffers from two major weaknesses: the instructors' lack of knowledge and their rote teaching methodology. No faculty trained during the Soviet era was taught non-Marxist economics. Likewise, it was impossible to learn law and economics, as needed today, on-the-job. Since then, a small number of Russians have been fortunate enough to attend Western degree programs. However, they are too few in number to significantly alter the overall dire picture of law and economics higher education. Most instructors have taught themselves a limited amount of modern law and economics, often by reading the textbook before teaching it. Because of the lack of systematic training, their understanding of modern law and economics as a discipline is fragmented and superficial and mixed with old socialist theories. Of the limited knowledge of law and economics they do possess, much is based on an understanding of the words but not the essence.

Law and economics is practice oriented, and the task for lawyers today is to apply principles of modern law and economics to solve real world problems. Characterized by a lack of interaction in the classroom, however, the predominant teaching style today fails miserably. To most, a professor means a reader who literally reads to students from prepared notes or a textbook. As a result, the give-and-take interaction normal in classrooms of American colleges and universities is a rarity. Problem-solving or case studies, emphasized in every American class, are not part of the curriculum. Exercises that nurture and develop problem-solving ability are at best tentative and sporadic, depending mostly on the personal interest of the instructor. Not surprisingly, most students lack this skill.

Thus, poor knowledge on the part of the instructors makes it impossible to teach good law and economics, while the outdated teaching methodology makes it impossible to teach law and economics well. One reinforces the other and together they prevent students from effectively learning law and economics even at the most basic level. The system and thus the lack of qualified law makers and practitioners will perpetuate itself until and unless both of these weaknesses are eliminated.

The importance of laws and lawyers in a market economy and democracy is well known and needs little discussion. In the USA, from the signers of the constitution to today’s congress, around half of all elected officials have been lawyers. Lawyers design, write and enforce the laws that protect free markets and democracy. It is largely a matter of semantics if one calls this "civil society," "rule of law," "institution building," "governance," or an "open society."

Of course the importance of laws has not escaped major donors, such as USAID. Since the disintegration of the former Soviet Union, Western donors have sent legal advisors to help write laws. While these programs are very cost effective even if only a fraction of the advise is followed, too often their advise is ignored because it takes more than a set of law books to make the legal system work; it takes lawyers who understand and believe in the laws. It takes lawyers who understand that the government shouldn’t fix prices (with a few exceptions such as natural monopolies). It takes lawyers who understand that the government should enforce private contracts (with a few exceptions) and not rewrite contracts. It takes lawyers who understand that the government should not own or run businesses or farms. Our program clearly complements Western legal advisors in helping western legal advise be accepted and practised.

The retraining activities will take place in Rostov-on-Don, Russia, in the summer of 1998. The program will be housed at Rostov State Economic Academy (RSEA). The academy is one of the major regional higher educational institutions in Russia. Under the leadership of the Rector, Dr. Vladimir Zolotarev, the academy has made much progress in making the required changes in a changing environment. With the high reputation it enjoys in the region, the academy has a wide network with other institutions, thus is in a perfect position to be the host organization for the proposed program. Co-operation between EEE and the academy started in 1996 in a survey project on economics higher education in Russia. Since then the two organizations have been working together on projects including distance learning in business administration and economics. The proposed program will benefit both organizations and will further their co-operation.

The retraining will consist of four courses taught within seven weeks by visiting American instructors. Courses offered will be in microeconomics, macroeconomics, law and economics, and American business law. Each participant will take all four courses. The aim is not only to provide the trainees with a solid understanding of the theories, but also to show, through the teaching of the applied courses, how theories are applied. The content of these courses will be comparable to that of standard three-credit hour advanced undergraduate/masters level courses at American universities.

To ensure best results from the interactive instruction, class size will be limited to twenty-five participants per section, with two sections per course. This will also provide a natural way to group trainees according to their initial knowledge of the subject matter. Accordingly, each visiting professor will teach two sections. Lectures will be held for each course every day Mondays through Fridays for seven weeks, with the total number of lecture hours delivered comparable to a regular fourteen-week three-credit course at American universities.

Given the importance of teaching methodology, class discussions and active participation will constitute an integral part of each course. In-class exercises and homework, such as case studies, that are pertinent to developing problem-solving techniques will also be an explicit part of the curriculum.

Curriculum development is an important component of the program to ensure implementing changes in teaching and curriculum. The American professors will meet regularly with participants to discuss courses and curriculum design, and to provide necessary assistance. Participants will be required to complete two course designs for courses they will teach in the 1998-1999 academic year.

All Russian participants must be current law school professors or instructors who teach economics to law students. With 25 participants per section, there will be places available for 50 participants taking four courses each. The participants will be from major law schools in European Russia with fewer proportionally from Asian Russia. Participants are partly self selected on the basis of their willingness to spend the summer studying for a small stipend. Fifty participants will then be chosen from the applicants on the basis the number of students they teach and the usual criteria.

The proposed program anticipates to retrain fifty Russian law professors. The program will transfer both American teaching methodology and law and economics knowledge in four courses at the standard advanced undergraduate level/masters at American universities. This aspect of the benefit of the program is immediate and measurable.

The effectiveness of the program in passing on law and economics knowledge can be measured by examinations, both halfway through the retraining and at the end. Those participants who pass the requirements will be issued a certificate of participation. During the course of the retraining, participants’ progress may also be monitored by quizzes. These will also provide feedback for possible improvements in our teaching. Teaching methodology lends itself less easy to be tested by conventional testing. But through regular in-class exercises and innovative activities such as mock lectures to be held by trainees in groups, we will be able to monitor and assess the progress they make in improving their teaching techniques and methodology.

One method to measure our own effectiveness is evaluations by the participants (student evaluations). To identify sources for potential improvement the first such evaluation will be conducted in the middle of the second week, followed by at least one more before the final evaluation at the end of the program. All evaluations will be anonymous. The format of the evaluation will be similar to that commonly used in American universities with its contents tailored to the specific conditions in the region. In particular, we want to ask for suggestions as to how to continue working with them and with the institutions to which they belong in the future. The teaching evaluation we designed and used in 1997 can be used as a model. The teaching evaluation and results are explained in more detail in the attached, "Final Narrative Report."

Another cumulative benefit that the program will yield is the improved understanding of law and economics by a large number of Russian law students as a result of the improved teaching of their instructors. It is possible to count the number of students these professors will teach in the next academic year. For example, in Yakutia, from the participants’ teaching schedules, we were able estimate that approximately 15,000 students in this academic year alone are benefiting from improved courses (see the attached Final Narrative Report). We believe the figure of 15,000 students helped can easily be exceeded because Yakutia, in sparsely populated Siberia, has a small student population.

EEE’s Co-Directors have developed, organized, taught and managed retraining seminars for professors in the NIS since 1992. Dr. Stephen Baba taught at the University of Kiev-Mohyla and at the Kazakhstan Institute of Management, Economics and Strategic Research (KIMEP) for two years. Dr. Lan Wu taught at KIMEP for three years. During this time, they received frequent requests to design appropriate professional help for professors at the country’s universities and institutes. Through daily informal contacts with students and lecturers, and through frequent, more formal contacts with the local academic, educational, and administrative communities there emerged an understanding of fundamental weaknesses in the Russian higher education and their dire consequences.

In 1995, USAID funded a seven-week intensive seminar for economics lecturers in Almaty, Kazakhstan organized and coordinated by Dr. Baba. Dr. Wu designed and conducted the microeconomic portion of the course. Fifty economics lecturers from all over the country attended the six courses in market economics. Participant evaluations rated the program a great success.

The 1995 seminar helped sharpen the understanding of existing problems, and narrow the focus on a training program best adapted to local conditions and most suited for remedying the weaknesses. As an institutional response, Eurasia Economics Education, a non-profit institute, was founded in March 1996. Eurasia Economics Education (EEE) focuses on retraining teaching staff in economics and business in Russia and the NIS. Organized as intensive training, retraining programs can have immediate impact by improving the teaching and curriculum in Russian higher education. Eurasia Economics Education is a tax exempt non-profit organization under IRS 501(c)3.

The founding philosophy of EEE is that a good understanding of the basic modern economics among a large portion of a population has been instrumental to the economic prosperity and individual freedom enjoyed in the West, and is crucial to the degree of success of those countries that are currently in transition from a centrally-planned to a market economy and from a communist regime to a democratic society.

We obtained funding from the Copperfield Fund and USAID via the Eurasia Foundation to retrain 50 economics professors in the summer of 1997 in Yakutia, Russia. The full-time retraining was in four subjects of economics at the intermediate level, and the total number of lecture hours delivered on each subject was comparable to a three-credit course at American universities. Four American professors taught four subjects of market economics which were microeconomics, macroeconomics, public finance, and money and banking. Fifty participants started the program and forty two participants successfully completed the seven-week program and received a certificate. Each participant also wrote concrete plans on how to incorporate new materials and new courses in their curriculum. According to the participants’ teaching schedules, nearly fifteen thousand students are benefiting directly from the retraining in the 1997-1998 academic year alone. The participants rated the program highly. More details are included in the attached, "Final Narrative Report."

Both co-directors of EEE hold a Ph.D. degree from a major US university and each has had several years of educational experience working in Russia/NIS. During his three years in Kazakhstan, Dr. Lan Wu played an important role in establishing the academic program and administrative structure of a Western-styled business school in Almaty and taught in the MBA/MA program there. In addition, he organized a number of executive training seminars. Dr. Stephen Baba had taught economics at Mohyla University in Kiev before his work in Kazakhstan in 1995. At Kazakhstan Institute of Management, Economics and Strategic Research he was the director of the MA Program in Economics, and he organized and secured funding for numerous projects at the Institute from USAID including the Summer intensive retraining seminar for economics faculty in Kazakhstan. Both co-directors have had research and policy-advising experience in the region (resumes attached). Dr. Wu or Dr. Baba will be in charge of the proposed retraining program in Russia, with the other being the US coordinator of the project. EEE has also a number of experienced associates who, on a need base, may also participate in the management of the project.

All teaching will be done by visiting American instructors, some from EEE and others from outside. All teaching staff at EEE hold Ph.D.s from US universities, and each has had teaching experience in the former Soviet Union. Each has also participated in the research and policy advising in the area.

The minimum qualification for teaching staff selected from outside EEE is an ABD or MBA with teaching experience, but we usually require a Ph.D. or J.D. Organizations such as Civic Education Project (CEP) are excellent sources for teaching staff. EEE has on file a list of several professors who taught for/with us in the past in NIS. If needed, EEE will also advertise in professional journals to enlarge its file of teaching staff. Special emphasis will be placed on prior teaching experience. We have had no problems recruiting professors to teach during the summer, since most professors have spare time in the summer.

Since Dr. Stephen Baba has already managed three large retraining programs with fifty or more professors, the routine is well established. Specifically the program will consists of three phases: the set-up phase, the execution phase and the follow up phase.

Set-up Phase: This phase will be prior to mid June, both on location and in the US. During this phase, we will decide on the exact teaching materials, select teaching staff, recruit participants, and work out all the logistics, including accommodation for the visiting foreign experts, teaching facilities, and possible accommodation for the participants. It is foreseen that one staff member from EEE will be in Russia during this phase to facilitate the progress. This phase is planned to take place in advance of the retraining to allow time for any emergencies that might arise.

Execution Phase: This phase will be from late June to mid August 1998 during which the proposed four courses will be taught. The retraining will start in mid to late June in the city of Rostov-on-Don. During the retraining the participants will also design two courses under the guidance of the American professors.

Follow-up Phase: This phase will be used to evaluate the impact of the retraining program as well as to assist the participants in implementing proposed changes in their teaching. EEE will maintain contacts with the participants, either directly or through our host organization. Follow-up help to the participants in their future teaching will be provided in terms of providing teaching materials, and advising. These follow-up activities will also provide EEE with a constant source of first-hand information on the law and economics higher education and possible suggestions for future retraining in the region. These activities will last for about one semester, i.e., till the end of 1998. All of these activities will be summarised and a report will be presented.

Dr. Lan Wu, 4 months at $5,000/month $20,000

Dr. Stephen Baba, 4 months at $5,000/month ......$20,000

BAT @ 25% of salaries ................................$10,000

Apartments ($1,000/person x 4 for visiting

American professors) $4,000

Apartment for an EEE staff ($1,000/person x 1) ..........$1,000

Office expenses (copying, paper, cartridges, etc.) ...$1,000

Telephone and fax ..........................................$1,200

May-June,1998 - set-up trip

Detroit-Moscow-Rostov(round trip) ..............................$2,000

Hotel and meals in Russia ($200/night/person x 30) $6,000

Train/Plane to major cities to recruit participants ....$1,500

June and August,1998

Major US ports-Moscow-Rostov

(5 round trips at $2,000/trip) .....………….......$10,000

(for 4 visiting US instructors and one EEE staff)

Hotel (going through Moscow to Rostov is likely

to involve a one night stop in Moscow each way)

Hotels in Moscow ($100/night/person x 10) .…...……...$1,000

(for visiting US instructors’ trip and one EEE

staff’s trip in June and August 1998)

Taxi in Moscow ($100/round trip x 12: airport-hotel) ......$1,200

Per Diem/Stipend for visiting US professors

($8,000 for 8 weeks x 4) $32,000

(no benefits except emergency medical evacuation)

Medical evacuation insurance 5 x $110…………………. .…$550

Translation of lectures and handouts

($6/hour x 200 x 4) $4,800

Translation for EEE staff for set up and administration $1,500

Local assistant from Rostov State Economic Academy $2,000

Books and photo-copies ($40/person/course x 50 x 4) $8,000

Classroom and office rent …………………………………….$2,000

Visa fees and courier services ............……..$1,000

Travel to Rostov ($200/person x 50) …..$10,000

Per Diem for participants ($500/person x 50) ………$25,000

Housing ($500/person x 50)… …………………$25,000

Bank transfer fee for above (1.5% x $60,000)… …………$900

l) Overhead/management costs (approximately 5%) $10,000

(costs of running offices in America, including partial

reimbursement for co-directors’ time)