Working at NES –– what does this mean to a foreign professor? Gerhard Toews and Michele Valsecchi are discussing the advantages of being here, describing the difference they see between NES students and others abroad and giving the details of their academic and research activity in Russia.
–– When choosing Russia, between which options did you choose? What criteria did you use?
Michele Valsecchi I think that ending up in Russia is partly the result of my choice and partly the result of the academic job market, which is quite peculiar. I applied to many countries, including Russia. In the end, in my case, the choice for the type of position that I really wanted was between the Netherlands and Moscow. I had previous experience in several Western European countries, and I guess that life in the Netherlands would be similar to those. Instead, Russia represented a cultural adventure for me. That's one of the main reasons I chose Moscow.
Gerhard Toews My choice was more constrained. For me, it was very clear that I'm not leaving Europe. I had three points: one personal, one professional, and one I would call “idealistic''. The personal one: I wanted to live in a big city, which essentially reduced the number of locations to London, Paris, and Moscow. Professionally, I wanted to work in a city in a country where what I'm doing is relatively more relevant. I'm working on natural resources: oil, gas, and coal. And this restricted the choice for the two countries, which are Norway and Russia. And the last, idealistic point relates to the fact that in the last 10 years, we have seen a deterioration of the relationship between Eastern and Western Europe. I was born in the former Soviet Union, so I speak Russian, it's my mother tongue, and I know Russian culture. So if I'm not going to Moscow, who else would go? I felt obliged to go because I assume that this exchange of academics is an important part of keeping the relationship between Western and Eastern Europe alive.
–– How did your relatives, friends, significant others react when you told them about your decision to come to work here in Russia?
Michele Valsecchi The majority of them were stunned that I was even considering Russia and implicitly or explicitly recommended against. Most of them were concerned about the Russian political agenda. Only a minority of them were in line with what I was thinking. However, I think many of them simply had no idea about what Russia is actually like since they have only this image coming from the international media, which might or might not be true.
My research is about development economics and the economics of weakly institutionalized countries. That's why Russia is a good setting for what I do. Moreover, I have a slightly more adventurous personality relative to some other people. I also had the sense that you can have a bigger impact here than elsewhere with your job.
Gerhard Toews As for me, I had much more information, and there were much fewer issues, because I'm familiar with the Russian culture. And in most cases, most people who are close to me, including family and friends, actually supported the decision and didn't discourage me. All my arguments in favor of Moscow were supported by my social circles.
–– How long are you going to work here in Russia, at NES? Do you want to develop your academic career here?
Gerhard Toews NES is part of the international community, and as a consequence, it works exactly the same way it would work in any other high-level economics institution in the rest of the world. Once we're here, the tenure clock starts ticking. That means we have a limited number of years to publish in journals of sufficiently high quality. To be accepted by NES for the longer term you're given several years to do so, and you have a frequent reevaluation of what you have done. Therefore, how long we stay here is not only a personal choice, it's also a decision of the NES tenure committee. They will consider whether we have done a sufficiently good job for staying here. As for me, I came here to stay: I've never had the plan to come here to work for two years and then leave.
Michele Valsecchi For me the answer is pretty similar to Gerhard's. Before coming here, I changed countries a bit too much, so I really wanted to settle down. In an academic career, the time horizon depends on the tenure clock which is going to be eight years. Then the choice to stay or not depends on us, but also on other people. Since I changed countries before, I can do it again, but I would prefer to avoid the need to do it.
–– What kind of opportunities in comparison with other universities does working at NES give you?
Gerhard Toews There are at least two things. The first one is the position of NES in Russia, relative to the position of any other university I would personally have the chance to go to. There are only a few institutions in Russia that are part of this global club of universities. NES is hiring internationally and, thus, they choose people who have received an excellent economic education in the very best universities. NES in terms of economics has a reasonably high position.
This means, for instance, that we have lots of access to great data. Just an example: we're now collaborating with Interfax, one of the big data providers in Russia. One of the things they've been offering is the Russian firm-level census linked to many other data sets. And while they have initially generated this product just for large banks, we are now also having access to it. So we started cooperating: they provide us with the data, and we in return suggest what and how they can improve and fix. This turned out to be quite a fruitful exchange. And the fact that we were able to start collaborating with Interfax, in the first place, is due to the NES position within Russia. A similar institution in another country, like in the Netherlands and the UK, wouldn't have such access to data.
I would also say that Ruben Enikolopov is creating a very pleasant working environment in which he gives people lots of opportunities to develop and provides resources if he sees that people are pushing in the direction he considers to be the right one.
Michele Valsecchi There is the advantage of living in Moscow, which is a very rich city from the cultural point of view, in terms of amenities, and I think it's wildly underrated internationally. It's also an open door to the rest of Eastern Europe and Central Asia, which represents yet another opportunity.
Workwise, I totally agree with Gerhard’s point that being in a number one institution within a country is always better than being in No. 4, No. 10, or No. 20 in another country, even if these other places are equal or better. Because by being in institution No. 1 in the country, you do get privileged access to donors, institutions or data. For example, at the onset of Covid, at a certain point, it looked like one of the government agencies might have involved us in trying to come up with a quick response to the virus and help out with our statistical analysis of the government response. That felt like a great opportunity to have an impact and gave us the feeling of being able to influence the policy area here. I'm not sure whether it happened or not, but you do get this sense that there's a chance you can have an impact. We are also collaborating with Yandex which is, again, one of the biggest conglomerates here. That's also another good opportunity.
NES is a small school, which has some disadvantages, but also some strong advantages. First, it's more similar to family-oriented institutions than a normal big university, which is great because you're involved in the decision-making. There is a sort of personal relationship with colleagues that can be very tight and very pleasant. Even simple things like going for lunch at normal, non-Covid times, are very nice. Second, the fact that we are in a small school means that we can adapt more flexibly to the changing education market. In the past 5-10 years, data science has become more important, and then you see that the school creates data science and economics programs. Other fields of economics are developing, and we're trying to integrate them as well. The main idea is that we can respond more quickly to the changing environment in a way that I personally appreciate very much.
–– Have you adapted your teaching practice to the Russian context? How do your approaches to teaching differ from what you see here, in Russia? What can you give students that others cannot?
Gerhard Toews I don't think I changed anything. I've been teaching before. Obviously, I've been teaching here much more, and hence my skills have matured and changed. The quality of students we end up being working with is incredibly high. It's so high that they're somehow responsible for the quality control of our teaching. This means they will make sure that you teach them the right way on a high level. If you say something incorrectly or not sufficiently precisely, they will tell you. And that forces you to be very engaged in a good way. I think this is really great. I guess, this is not something which I would have had if I would have stayed in Germany or the UK.
–– Have you ever received questions you could not answer?
Gerhard Toews Of course, repeatedly! This is true for both the undergraduate and graduate levels. Students are very, very good. What I tend to do, I go home, check the answer, and at the beginning of the next class, I answer the question. The thing that I've discussed repeatedly with a Spanish colleague of ours, Marta Troya Martinez, is the point that the Russian system is really good in the technical dimension, meaning, students are great at math. But relative to other universities in economics, in particular, it is not as good, let's put it that way, in terms of how to express your thoughts clearly in words. So transforming a mathematical equation into words and making it accessible to, for example, your parents, I would argue, is difficult for students. I try to push students to write essays. And I think this is useful in particular because it allows economists, who are predominantly formally trained in math and statistics, to communicate with the rest of the world and make sure that people understand them.
Michele Valsecchi All of our Russian colleagues studied abroad: they do have a PhD that they got in English in the US or Western European institutions. Therefore, they are trained in English with the same textbooks, the same material that Gerhard and I have access to. So there is no bonus we bring in terms of something that they wouldn't have been able to do. But of course, both Gerhard and I came with our narrow expertise in certain fields that were developing here only partially before. Therefore, we do bring expertise, not because we are foreigners, but because we specialize in the fields that were underdeveloped here.
However, being a foreigner, I personally bring a bit of a different mentality. I suspect that teaching is somewhat rigid here. Instead, I'm used to having a dialog with students, so I give them a question during the class, discuss alternative answers , and therefore, make them active participants. This is good for them because active participation means better learning. And it's also good for me because I enjoy getting out of my box. I come with five possible explanations to an argument from papers and theories, and then ask, what kind of potential explanations the students might have. Often, I get surprised because some of them come up with explanations that were not obvious at all! It is also a good way to show them that science is an open field, in which some doors have not been opened before or have been only partially open. I think the students appreciate this kind of approach, even though it requires a lot of preparation from my side.
I noticed another thing that is different from other universities. Since we are a small institution, there is a lot of talking among the students across cohorts. So if you do a good course, the students will pass this information to the next students and tell them to attend it even if it's difficult. Another difference is that here students work differently from previous institutions I've been to. It seems that here approximately 80 percent of the students in the last year of their bachelor's or the second year of the master's program, work. They have outside responsibilities, which means that on the one hand, they are very smart. But on the other hand, they systematically overbook themselves. They want to do the program, they want to work in consultancies, those who want to apply for PhD, want to be teaching assistants and/or research assistants. It is astonishing, but at the same time, it means that no matter how smart they are, sometimes the outcome is mediocre because of this.
Another thing is that we give a lot of nurturing to students. Relative to any other place I've ever been or heard of, we do provide an incredible amount of assistance to students in terms of feedback during courses, but especially when it comes to supervision for bachelor and master thesis. I've never seen anything like this.
–– How do you organize your research activity here in Russia?
Gerhard Toews During your PhD and certainly during your postdoc or as an assistant professor, you create a profile for yourself. You choose a set of topics that define you as an academic. For me, this stage has been reached already before I came to Russia: my topic is natural resources. I am trying to understand how the extraction of natural resources impacts the economic performance of a country, how it links to the activity of the government, and how we could potentially prepare for the moment when the country is going to run out of its main resource. The area didn't change much when I arrived here. But since the choice of coming to Russia was partly driven by that, of course, I was able to start projects here using, for instance, local data and the data from Interfax.
Michele Valsecchi My research interests are broadly the same now as they were when I came here. So far I have only one semi-developed project on Russia, so I'm not taking advantage of the situation yet. This is partly because of the language barrier, meaning that it takes more time for me to acquire that sort of fixed knowledge of the institutional setting and the Russian setting to produce research. As I mentioned earlier, my field of research is related to a weakly institutionalized setting. So I’m certainly interested in studying these aspects. But of course, much depends on finding interesting national cases in the past that can be evaluated, and available data. So far, I haven't really found plenty of worthy examples, but I think they exist. When I do come across them, I will push them up.
–– Key discoveries today are being made at the borders of different sciences. Where should we expect these discoveries, which parts of economic life do you observe the most?
Michele Valsecchi A good distinction is made in terms of methodologies. I think there is a big frontier that is expanding: it is the use of data science in economics, which is becoming more and more relevant, as more data appears in big datasets. They are so huge that they need to be used differently, structured with a different approach, techniques and frames of mind. The interaction with geography, digital maps, and machine learning also expands economics into data science. It is not really a new thing anymore, but the relationship between economics and psychology is increasingly becoming very common. Then, of course, there is economic history and therefore, the mix between history and economics. By the way, Russia is a great place to study history.
The interaction between economics and politics is obvious, but in the last two years, due to the pandemic it has become clear that economics can also contribute to health. This is a shared opinion with many economists I met. But when you talk to non-economists, it's amazing how small is the fraction of people who understand the concept of externality and the fact that my behavior affects the behavior of other people. Understanding the concept of externalities determines your choice to vaccinate or not. Actually, it's hard to emphasize too much how different Russia is from the rest of the world, or at least the rest of Western Europe and the US. Here culture comes into play in a way that is amazing! It's very difficult for me to explain to people abroad the fact that Russia was the first one to have a vaccine and yet after one year, there is only a small percentage of the population that took it. This shows you how much culture is at play when it comes to economic and health choices and how much economics matter.
Gerhard Toews I can just follow up on what Michele said in two dimensions. First, I completely agree that some 20 years ago, economics was reasonably rigidly defined. Only certain topics were considered to be economics. Nowadays, the interactions between economics and particular other social sciences are becoming mainstream, so it's quite common that economists work on health, work with anthropologists, talk to psychologists, and so on. Second, there is one thing, which Michele also mentioned but I want to stress a bit more, and which I think could be particularly fruitful in Russia. This is the collaboration between historians and economists. I assume that the USSR was very successful in destroying both subjects, economics, and history. The state wanted to have a planned economy and history, which meant history to be somehow rewritten. Consequently, since 1990, those two fields, in particular, are going through a renaissance. And I think for Russia the collaboration in this sphere in particular can end up being very fruitful. Andrey Markevich, one of our colleagues here at NES, is one of the top people in this field. During the last two years, I have spent quite a bit of time in the state archives in Moscow. And I have the impression there are so many possibilities in terms of data that are available and can be used to analyze research questions. I think there is work for generations of economic historians to come.
Michele Valsecchi One additional point came to my mind, which I think might be useful for Europe, for a broader audience. As Gerhard said, the view of economic success changed a lot in the last 20 years. Economics used to be about how to allocate resources optimally. But now it's more of a toolbox: what questions can I answer using the methodological tools that I have? Therefore, the range of questions has expanded incredibly and has invaded other fields from psychology to history, politics, and so on. People even talk too much of this colonial approach of economics towards other disciplines.
It's important to emphasize that people outside economics do not know this. Especially when they are 17 years old and need to choose what to study, they don't know this. When I was between 23 and 27, I started talking to different people about what I was trying to do as a researcher. These were the first preliminary steps, the questions I was trying to answer. And then I realized that many people got interested and told me: “I didn't know that economics was about that, I didn't know that you could do that in economics, I thought that economics was all about inflation and prices”. And I was telling them about totally different things. So it's important that this message that economics is different and much more powerful than people (especially kids) might think. You can answer a wide range of questions and you don't need to be stuck with optimal taxation.
–– Gerhard, the question to you considering your area of expertise. Now we talk much about ESG, about the transition to green energy, and so on. How would you evaluate the efforts for this transition to green energy? Do you see them and are they more important in the time of Covid?
Gerhard Toews Let me say that the energy transition is a politically motivated transition, which is not driven by economic forces, so we are not moving out of coal and oil because it is becoming more expensive. No, it's still cheaper than the alternative. So if we don't push for this transition politically, it would happen neither in Europe, nor in the US. But people seem to understand what’s going on, they are forward-looking. They see that as we keep polluting, it might have severe long-term consequences. So anticipating the future, let's try and take actions now and push our respective governments towards a transition, meaning that it is coming from the people via their representatives in politics. Now, is this transition happening? Do I see this change in preferences within Russia? I can say that I have observed this in the last three years, because I’m teaching this and one part of my course is climate change and evidence for climate change. In general, I also see students being more convinced that climate change is happening. We do observe the change in global temperature, we do see that this may have severe long-term consequences for kids. And consequently, we should incentivize firms to act more environmentally friendly and societies to be more environmentally friendly. So I do seem to see a transition, and this is not because I learned how to present it better.
–– How do you feel, is this social pressure rising?
Gerhard Toews Yes, absolutely. There is no doubt about this. I have a beautiful example, which I use in class. Roughly 30 years ago, Shell, one of the big oil companies, decided to drop one of the offshore rigs in the North Sea. They've been planning to do it, and nobody knew about this. But then a couple of journalists with the help of Greenpeace made this case public. Once the German society heard about this, what happened was the Germans collectively stopped using Shell petrol stations for a week. If you have 80 million people stopping consuming your product, you will immediately be incentivized to act accordingly. Then Shell apologized and took care of the offshore rig and decided not to drop it to the North Sea. So this is a kind of a classic case that happened in the early 90s, but it is increasingly happening now. And of course, for this to happen, it's important that people hear about this. As long as people are not aware, they cannot act. So in this dimension, journalism and the provision of information about such cases is important. How does this change during the Covid times? I would argue that one of the good things about Covid is the fact that we stopped traveling. It is good because it has dramatically reduced our consumption of oil and hence, the CO2 emissions. So I generally consider it to be the best thing which Covid gave us in the last one and a half years.
–– Michele, the question regarding your area of expertise and your paper on immigration in Covid times, based on the Italy data. Do you think it is possible to use your methodology which allows you to identify which regions are more exposed to return migration, in Russia?
Michele Valsecchi This project started with an instant book that NES produced to show the ability and willingness to provide policy advice to the Russian government. It was a chapter, which came out of the idea of making a comparison between Italy and Russia. The part on Italy became a full paper.On the NES website, you can find this electronic book with the chapter with my coauthor, economist Tatiana Mikhailova, where there is a part on Russia. We use data on migration to Moscow from each oblast in Russia, and try to predict where Covid will expand based on that. The big difference between Italy and Russia was that at least at that time for Italy, there was data on Covid infections and deaths. And for Russia, there was not. So in that chapter, you will only see a sketch for Russia. But later, some of our colleagues, Ruben Enikolopov and Maria Petrova, and then two other researchers, Georgy Egorov and Alexei Makarin, wrote a paper that uses this intuition and tries to look at the relationship between the arrival of Covid to the region and the number of people that previously went to Moscow. The relationship seems to be robust also for Russia. Similar relationships have been found also for the US and China, I believe. So it seems to be a general phenomenon.
Speaking about the case of Russia, the data on the migration factors are not as good as for Italy. For Italy, I have data from province to province before Covid started. And for Russia, you do have data at the oblast level, which is a much larger entity. The second thing is that the data on Covid infections and deaths is much worse for Russia than for most other countries. That's because Russia decided to count Covid deaths only if the person was dying of this virus and nothing else. So if a person had a preexisting condition that interacted with Covid, he or she was still not going to be counted as a Covid death. That's a choice that, let's say, was debatable, and this is an example of how much data collection matters to do policy-relevant work.
–– As foreign researchers, how do you deal with the quality of the collection of data in Russia? Is this a problem?
Michele Valsecchi At a certain point for the Covid case, we tried to collaborate with MTS, the mobile phone company, which could have provided amazing data on the mobility of individuals. That is something that I do for Italy: I use mobile phone tracking data. We could have done it for Russia, too, and we could have used this privilege, the collaboration of NES with MTS. But in the end, we didn't do that because MTS was not willing to put any sort of human resource in the data generation costs. That's an example of a collaboration that could have happened but didn't. In principle, things in Russia can be done. But my feeling is that you need to construct the data from scratch, which is worth it when you're looking in the medium/long-run, but when it comes to doing a fast project for a fast policy response, is not the ideal situation. You want the data to be ready. Collecting it is a job that requires a lot of effort. So the fact that it was not done already by some other institution prevented me and other people from doing a good job for Russia as we did for Italy.
–– I want you to give advice to foreign professors who are thinking about coming to Russia or who have already made their choice in favor of Russia. What would you say to them?
Gerhard Toews I guess for me it's a bit tricky, giving my background. My answer to this would be: they will obviously like it. There is this concept of opportunity cost that you like. And one of the things which people experience when they go through life is what would have been if? You make a decision, you choose a partner, you choose a location to live, you decide to get an education in this field. Many people look back at the point of the decision and think: but what if? And then they start dreaming. Once in a while, they conclude: my life would have been so much better if I then… This feeling is painful. So many people are familiar with this. I can say that after deciding to come to Moscow, I don't think I had a single time in the last three years when I doubted that that was the right decision. Moreover, I was positively surprised by so many things here.
Michele Valsecchi I would put it like this: come to Moscow for a week, and then you will see whether you like it or not. Come to NES for a week, and then you will see whether you like it or not. I suspect that, once you come to NES, you will never go back.