Institutional change in a transitional economy: the reform of economics higher education in Mongolia

International Journal of Educational Development 19 (1999) 423–439www.elsevier.com/locate/ijedudev

Institutional change in a transitional economy: the reform ofeconomics higher education in Mongolia

Bernard Waltersb,*, David Hall a, Frederick Nixsonb, Peter Stubbsb

a School of Education, University of Manchester, Manchester M13 9PL, UKb School of Economic Studies, University of Manchester, Manchester M13 9PL, UK

For publication 24 February 1999

Abstract

This paper discusses the problems of implementing a European Union Technical Assistance to the Commonwealthof Independent States (of the former Soviet Union) (EU/TACIS) project to reform Mongolian Economics Higher Edu-cation with the ultimate objective of improving the process of economic policy making. It emphasises the importanceof historical, economic and administrative context for the design and implementation of project activities. Projectactivities are reviewed and the problems of implementation discussed in terms of the aid relationship and the particularcircumstances of transition economies. The paper concludes that, while the project’s immediate objectives in terms ofcurriculum reform have been achieved, the sustainable change necessary to deliver the central, long-term objectiveremains elusive. 1999 Elsevier Science Ltd. All rights reserved.

Keywords:Mongolia; Economics; Higher education; Transition

1. Introduction

In late 1995 the University of Manchesterbecame the lead institution for the delivery of theEU/TACIS project to reform economics highereducation in Mongolia over the years 1996–1998.1

This reform was centred on the chief institutiondelivering economics education in Mongolia: the

* Corresponding author. Tel:1 44-0161-275-4841; fax:144-0161-275-4928; e-mail: [email protected]

1 The Reform of Economics Education in Mongolia. Projectnumber: MG94.01/02/.01/B003. The other institutions involvedin this project were: the Free University of Amsterdam; TrinityCollege, Dublin; University of Oporto, Portugal; University ofHelsinki, Finland.

0738-0593/98/$ - see front matter 1999 Elsevier Science Ltd. All rights reserved.PII: S0738 -0593(99 )00014-0

National University of Mongolia’s EconomicsInstitute, renamed the School of Economic Studies(henceforth the SES) during the course of the pro-ject. The general objectives of this project were:

To adapt higher education in the EI (EconomicsInstitute) to the requirements of the free marketeconomy by strengthening the teaching and ana-lytical research capabilities of the EI in the fieldof economics and thus contributing to the quali-tative improvement of the decision-making pro-cess relating to the implementation of Mongol-ian economic policy.

This was translated into a number of specificcommitments, which included reform of the eco-

424 B. Walters et al. / International Journal of Educational Development 19 (1999) 423–439

nomics curriculum for the undergraduate and post-graduate degrees on western lines and encourage-ment of a western research orientation in theinstitution. This paper focuses on the problemsencountered in our efforts to implement these com-mitments, attempts a preliminary evaluation of theproject and seeks to identify the crucial constraintson the achievement of its objectives. To our knowl-edge there have been no similar projects within theTACIS programme and no publicly availableevaluations.2 In addition, although based on thespecific experience of educational reform in Mong-olia, the issues raised and problems confronted areof wider relevance to other projects involving insti-tutional change within transitional economies.3

The Schools of Education and of EconomicStudies of the University of Manchester jointlyprovided the main educational and economicsinputs for this project,4 which included attachmentsof Mongolian academics in Manchester and else-where, study tours by Mongolians and technicalassistance by academics and administrators fromManchester. The project also established a full-time office in the SES to support project activitiesand provided resources to develop a library andindependent learning centre. Finally, a network ofmodern computers with supporting general andeconometric software and a radio modem link to

2 An investigation of the TACIS website indicated only twopossibly comparable programmes in the higher education sec-tor. These were: The reform of the international managementinstitute in Kiev; Curriculum development in the odessa statemaritime university. However, on further investigation therewas relatively little overlap. In addition, there were no detailedevaluations publicly available. A similar inspection of theWorld Bank website failed to identify any curriculum reformprojects in higher education.

3 The transitional economies, as they are defined by the TheWorld Bank (1996), are the formerly planned or commandeconomies of central and eastern Europe, the Russian federationand the other republics of the former Soviet Union, and theAsian economies of Mongolia, China and Vietnam. Althoughvery different, the Russian federation and its immediate satel-lites including Mongolia exhibit certain similarities, in part aris-ing from the speed of their attempt to move to a market econ-omy.

4 The project has a number of other components viz. Englishlanguage development, administrative reform, distance learningand the development of income generating activities. Thesecomponents are not discussed explicitly in this paper.

the internet were purchased and installed toenhance the educational and research base. How-ever, despite these concrete activities, it becameclear that success, in the sense of effecting real,self-sustaining change so as to meet the project’soverall objective, depended on carefullyimplementing the activities within the particularhistorical, economic and cultural milieu of the hostinstitution. The interaction between project activi-ties and these contexts generated difficulties ofimplementation which form the substantive core ofthis paper.

A central factor was Mongolia’s severe poverty.Gross domestic product (GDP) per capita in 1994was estimated at US$330 per annum (InternationalMonetary Fund, 1996).5 Moreover, it continued toundergo radical institutional and structural changein conditions of severe macroeconomic instabilityand recession despite being 8 years into transitionand after 70 years of communist government, farlonger than any other country outside the SovietUnion. A related factor was the geographic andpolitical isolation which left a twofold legacy.Although successive general elections indicatelittle evidence of a desire to return to communism,there was, nevertheless, some evidence that thespeed and extent of economic and social dislo-cation since 1990 had fostered a desire to re-cap-ture the certainties of the old system. On the otherhand, it was clear that many Mongolians, parti-cularly the young and those with some exposure towestern education or culture, enthusiastically, butperhaps uncritically and naively, embraced newideas particularly regarding political democracyand the role of the market. Tension between thesecompeting views is a particular problem for edu-cational reform of a subject with a large ideologicaldimension such as economics, and coloured theacceptability of the project’s objectives, in certaininstances hampering implementation.

The problems of economic disruption and ideo-

5 There is an unusually wide range of estimates of Mongol-ian per capital GNP of which the IMF’s estimate is at the lowerend; Kim (1996) gives details. By contrast the United NationsDevelopment Programme (1997) ranks Mongolia as a mediumhuman development economy, which is based upon an inexplic-ably high estimate of GDP per capita.

425B. Walters et al. / International Journal of Educational Development 19 (1999) 423–439

logical dislocation are particular to the transitionaleconomies. However, it was soon evident that theproject’s success also required careful attention tothe problems characteristic of all aid relationships.Specifically, the framing of the Terms of Reference(henceforth TORs) illustrated the difficulties ofconstructing a project where there was little cul-tural or linguistic common ground. The resultantimprecision and occasional ambiguity in the word-ing of objectives and activities and their translationallowed damaging debates to occur about theboundaries of project activities. Shared under-standing of technical words across cultural and lan-guage barriers was difficult, reflecting the moregeneral problem of generating ‘ownership’ of theproject by the host institution. In addition, charac-teristic limits to absorptive capacity restricted thespeed of implementation. These included theadministrative limitations endemic in the bureau-cratic legacy of a command economy and theinternal politics of the institution, which raised bar-riers which careful diplomacy could lower butnot eliminate.

The third essential context which constrained theproject was that of the broad characteristics of thehigher education system within which reform tookplace. Curriculum reform cannot be abstractedfrom the existing curriculum, teaching and learningstyles and the educational level of students. Theseconstrain the extent and, crucially, the pace of cur-riculum change.

2. The Mongolian context

2.1. The economy in general

Mongolia is a landlocked country, bordering onthe Russian Federation to the north and China tothe south, east and west. It is one of the most thinlypopulated countries in the world, with 2.3 millionpeople in a land area of 1.6 million square kilo-metres. Poorly developed transport and communi-cations systems have exacerbated Mongolia’s iso-lation, as has its political and economic history.Following the national revolution of 1921, theMongolian People’s Republic in 1924 opted to fol-low the ‘non-capitalist road’ of development and

to integrate its economy increasingly with that ofthe Soviet Union (SU) in an attempt to break outof its chronic economic backwardness (Sanders,1987, Chapter 4).

Until the middle 1980s, the growth of the Mong-olian economy was generally judged ‘robust’ (TheWorld Bank, 1992, p. 4). Both the The World Bank(1994) and the Asian Development Bank (1994)estimate the annual average rate of growth of GDPat market prices for the period 1981–1990 (1982–1990 in the case of The World Bank) at 5.6%.Growth slowed after 1988 and become negative inthe post-reform period. The World Bank (1992, p.4) has argued plausibly that by this stage Mongol-ia’s capital-intensive, import-dependent, centrallyplanned economy had become incapable of self-sustaining growth. By the second half of the 1980s,Mongolia had reached the limits of its chosenmodel of development, constrained by geography,history and politics as well as the inward-lookingheavy industry strategy of industrialisation. Theeconomy depended overwhelmingly on the FSUfor trade, financial and technical assistance, wasdominated by largely unprofitable public sectorenterprises, and was clearly unable to cope withthe twin external shocks of the cessation of capitalflows from the FSU (which had accounted for upto 30% of GDP) and the collapse of the Councilfor Mutual Economic Assistance (CMEA) in 1991(The World Bank, 1992, p. 4).

In 1984 the fall of Tsedenbal, Mongolia’s leaderfor much of the post-war period, initiated an econ-omic and political reform process (Gibbons, 1992),and in 1986 Mongolia launched a programme ofpolitical reform and economic liberalisation. Itsbroad aims were the acceleration of development,the application of science and technology to pro-duction, the reform of management and planning,greater autonomy for enterprises and a more appro-priate balance between individual, collective andsocial interests. In general, these reforms were notsuccessful and the economic and political situationdid not improve (Gibbons, 1992, p. 2). Partly as aconsequence, and no doubt influenced by thechanges that were occurring in the SU, populardemonstrations in Ulaan Baatar in March 1990 ledto the first multi-party elections 4 months later. TheMongolian People’s Revolutionary Party (MPRP)


won the election with 68% of the popular vote andpledged to turn Mongolia into a ‘market orientedeconomy’ and create a pluralistic society with newpolitical and administrative structures guaranteeingfundamental human rights, democracy and free-dom of information (Collins and Nixson, 1991, p.3).6 A new Constitution was adopted in January1992, and a second general election held in July1992 with the MPRP retaining power. In June 1996the MPRP (the former communists) lost power toan opposition coalition (the Democratic Union),which won 50 of the Mongolian Parliaments 76seats (The Economist, 1996, p. 75). There has beenconsiderable political turbulence since that elec-tion, with two changes of prime minister during1998. However, all of the governments between1990 and mid 1999 have remained committed tothe creation of a market economy and the processof reform.

Since the implementation of orthodox ‘shocktherapy’ policies7 in 1990 and the collapse of theSoviet Union in 1991, the Mongolian economy hasundergone a painful transition. Gross domestic pro-duct (GDP) at market prices declined for four con-secutive years (1990–1993 inclusive) leavingnational income 20% lower, with exports andimports more than halved. Real private consump-tion per capita declined by a third and real invest-ment fell by two thirds. Inflation reached 330% in1993 (The World Bank, 1994). Although there hassince been some improvement with positivegrowth between 1994 and 1997 of 2.3, 6.3, 2.4 and3.3%, respectively, in 1998 the economy was stillwell short of its pre-reform level of income, andthe problem of inflation had not been satisfac-torily mastered.8

6 The process of economic reform has been consistent withthe ruling IMF/World Bank consensus. It has included the abol-ition of central planning, macroeconomic stabilisation, liberalis-ation and de-regulation and privatisation. For an overview, seeThe World Bank (1992); for a more critical perspective seeNixson (1998).

7 Shock therapy is the term used to describe the simultaneousstabilisation, liberalisation, privatisation policies recommendedby the international institutions for the transition to the mar-ket economy.

8 For a fuller description of the economic difficulties experi-enced by Mongolia during its transition see Nixson et al. (1999).

The social consequences of ‘adjustment’ havealso been dramatic. Official unemployment in 1994was estimated at 8.5%. In 1997 it was 7.6% andexpected to rise. However, the estimated realunemployment rate in 1997 was 17.9% (see Bolor-maa and Clark in Nixson et al., 1999). Real wageshalved between 1990 and 1992 and probablydeclined by a further third in 1993. They have notrisen substantially since that time (Bolormaa andClark, ibid.). According to official estimates, theproportion of the population living below the pov-erty line rose from 16% in 1992 to 26.5% in April1994. The figure for 1997 still remains over a quar-ter of the population. Approximately one in everyfour poor persons belongs to families in whichnobody is employed (Nixson et al., 1999).

Pain and difficulty were inevitable in the reformprocess in Mongolia, but they have been intensi-fied, in the words of The World Bank, by the ‘sev-ere external shocks’ applied to the economy. Mon-golia was undoubtedly ill-equipped to deal withthose shocks, but to focus on them alone is to neg-lect the internal dynamics of the transition process.It could be argued that since 1990 successivegovernments have pursued policies that have deep-ened the crisis brought about by the shocks andhave further harmed the well-being of the popu-lation. The Government in 1990 preferred ‘shocktherapy’ to a more carefully sequenced and gradu-alist reform process. This choice was the Govern-ment’s own, although perhaps influenced byforeign advisers:9 there was, for example, externaltechnical assistance in drafting the privatisationprogramme and the law on direct foreign invest-ment (DFI).

The Mongolian economy has thus suffered anumber of self-inflicted wounds, including ill-defined or non-existent development objectives,inappropriate sequencing of the reform process,and hasty and ill-advised privatisation measures.Great weight has been given to the orthodox policyprescriptions of the International Monetary Fund(IMF), The World Bank and other institutions andindividuals that represent the ‘Washington Consen-

9 Although there were some contrary views expressed. SeeCollins and Nixson (1991).


sus’ and, arguably, too little attention has been paidto those who advocated a more balanced, and per-haps more cautious, approach to economic reform.Critically, Mongolia lacked a well trained body ofindigenous economists able to provide alternativeperspectives grounded in Mongolia’s specific his-torical and economic circumstances. The project toreform economics education in Mongolia was anelement of the wider attempt to remedy this short-age.

2.2. The educational context

Until 1990, when total expenditure on educationaccounted for 17.6% of government expenditureand 11.3% of GDP (Wu, 1994, p.xv), Mongoliainvested heavily in education. Between 1990 and1992, government expenditure and educationexpenditure were cut by 57.6 and 56%, respect-ively. By 1993, the allocation to education hadbeen reduced to 15.2% of the state budget and to3.8% of GDP. Economies included halting capitalinvestment in education, retrenching non-instruc-tional staff, cutbacks in foreign financing of univer-sity students, inflationary erosion of real value ofstudent stipends and charging tuition fees in post-secondary and higher education (Wu, 1994; Inter-national Monetary Fund, 1996).

Higher education has also been restructured.Before 1990 the Mongolian State University(renamed the Mongolian National University in1992) was the only university in Mongolia, witheight other higher education institutions. Since thenfour other universities have been created and anumber of specialised institutes once attached toparticular ministries have become colleges (theEconomic College, for example). In 1992 univer-sities adopted new degree structures, and research,previously conducted by specialised institutesunder the Academy of Science, was integrated withteaching in universities. For example, the Econom-ics Research Institute of the Academy of Sciencemerged with the SES. The State Planning Com-mission relinquished its control of universityadmissions and the setting of enrolment quotas(Wu, 1994, pp. 6–7; Bray et al., 1994).

Mongolia’s 10 years of primary and secondaryschooling, which are the entry point to university,

are not comparable to 11 or 12 years of schoolingoffered by many other countries. This limited sec-ondary cycle curtails the curriculum, requiringhigher education to make up for part of the short-fall. Total years of schooling for a Mongolian uni-versity graduate are thus at least a year fewer thanfor students in most industrialised economies, andthe reform of higher education will eventuallynecessitate the reform of senior secondary edu-cation (Wu, 1994, p. 7).

Data about the educational levels across thecountry as a whole exemplify the prior attainmentof undergraduate students entering the SES. In1993 the United Nations Development Programme(UNDP) estimated adult literacy at 93% (UnitedNations Development Programme, 1997, p. 136).Enrolment rates in education were also high, with98% enrolled at primary level, 85% at secondarylevel and 15% at tertiary level (Wu, 1994, p. 2).However, there is reason to believe that these lev-els may have been eroded in recent years, giventhe dramatic decline in GDP and in expenditure oneducation noted above. The effects of such hugeshifts in educational expenditure and their impactupon students entering the SES are difficult toevaluate fully, but there is manifest evidence of thedisruption that reduced funding has caused in theschool system. Some local education authoritieshave been unable to meet the cost of heatingschools in the intense Mongolian winter and have,therefore, closed them during the winter months.During 1994 a month long teachers’ strike precipi-tated the closure of virtually all schools in thecountry. Funds for teaching and learning materialshave been negligible due to the prior claims onschool budgets of teachers’ salaries, electricity,heating and transportation (Robinson, 1995, p. 5).

Undergraduate students, other than a very smallproportion consisting primarily of the sons anddaughters of Russian expatriates, have progressedto the SES from a centralised Mongolian curricu-lum determined at national level which containedno elements dealing specifically with economics orbusiness. However, two developments wereexpected to change this situation. Firstly, the Edu-cation Law of 1991 leaves 25% of the school cur-riculum free for teachers and schools to shape atlocal level, which could result in economics or


business-related studies being offered in somelocal authorities. Secondly, there is now a nationalprogramme of in-service training on curriculumdevelopment and change for primary and second-ary schools, part of which involves the creation ofnew curricula and learning materials in the area of‘economics and society’, as part of a social studiescourse to be taught in secondary schools through-out Mongolia. Although the time for this course islimited to 18 h of classroom work, it means thatundergraduates now entering the SES will havebeen introduced to some basic economic conceptssuch as inflation, unemployment and the relation-ship between demand and supply.

The Mongolian Government recognises thedemands that the move to a market economy willmake on the education sector. Two documents inparticular—The Management Development Plan(1992) and The Mongolian Education and HumanResource Master Plan (1994–1998)—emphasisethe importance of developing economic and mana-gerial capabilities and making higher educationinstitutions more autonomous, flexible andresearch-oriented (Raffo and Boldbaatar, 1996).

The training of economists at university level inMongolia began in 1947 with the creation of anEconomics sub-faculty within the Humanities Fac-ulty of the MSU. A full Economics Faculty wasestablished in 1950, separated from the MSU in1959 and reintegrated in 1967. In the 1992 reforms,the SES remained within the newly named MNUand the former Economics College of Zavkhan inwestern Mongolia became a branch institute withinMNU. When the project formally commenced in1995, the SES comprised Departments of Econom-ics, Management, Marketing, Accounting, Stat-istics, Computer Science, Banking and Finance,Mathematics, Foreign Languages and a PopulationTeaching and Research Centre.

The curriculum normally offered to undergrad-uate students at the SES is a 4 year course. Thenature of the student experience depends to anincreasing extent, as students progress from thefirst year to the fourth year, upon their choice ofspecialist areas of study.10

10 Specialist degrees are awarded in the following areas: Stat-istics; Accounting; Banking; Demography with Statistics; Eco-

3. The nature of the project

3.1. The terms of reference

The full terms of reference of the project are notreproduced in this paper but the project’s generalobjective refers explicitly to the ‘field of econom-ics’.11 However, Mongolian and Western under-standing of this apparently unambiguous phrasediffered sharply. In Mongolia, as in other tran-sitional economies, a degree from an institutionsuch as the SES traditionally represented a trainingfor a specific career path, very often with a strongvocational element. This is true of all of the non-economics degrees within the SES. Since thedemise of the institutions of central planning andstate direction of industry, this is no longer the casein economics. Nevertheless, the characterisation ofthe subject as a skills-basedtraining has remained.The variety of degree programmes within the SESindicates that economics as a discipline had prim-arily a managerial, applied emphasis. As in othercentrally planned economies, “… an ‘economics’course did not cover extensively principles of eco-nomics, but rather topics normally covered in typi-cal management or general business courses”(Vredeveld and Ispirodonova, 1994, p. 261; thequotation refers to Bulgaria). Mongolian expec-tations of a vocational emphasis may also havebeen raised by the fact that the sponsor was theUNDP Management Development Program. Instrong contrast, western tradition conceives eco-nomics as adisciplinedeveloping a way of think-ing which provides a general purpose introductionto a wide range of jobs, careers and professionswith, typically, the skill-based content of such jobsacquired on the job or via professional organis-ations and post-degree qualifications.

This difference in the perception of the subjectand, therefore, of the relevant boundaries of theproject’s key objective led to considerable prob-lems between what the host institution was legit-imately expecting and what the providing insti-

nomics; Finance; Information Science; Insurance; Management;Marketing; Tax.

11 Appendix A provides a synopsis of the project’s objectives,outputs and activities.


tution felt authorised and empowered to deliver.With hindsight, the failure to appreciate this ambi-guity in the specification of project activities andoutcomes at the initial, framing stage is, perhaps,not surprising. The long-term objective was quiteclearly stated as “strengthening the teaching andanalytical research capabilities of the Institute (theSES) in the field of economicsand thus contribu-ting to the qualitative improvement of the decisionmaking process related to the implementation ofeconomic policy” (emphasis added). The immedi-ate objectives were that the SES should be organ-ised to reflect the demands of a market economy,that it should be the leading provider in Mongoliaof training courses and materials at both under-graduate and graduate levels adapted to the realitiesof the market economy, and that it should be “cap-able of providing high level economic policyadvice and contract research activities to the publicand the private sector that reflect the realities ofthe market economy”.

Ambiguity arose in the sections relating to pro-ject activities and outputs. These refer to assistancein revising syllabuses and curricula related to eco-nomicsand management training, and to the avail-ability of revised and operational syllabuses in eco-nomics and management training by the end of theproject. The TORs no longer see the project aspurely economics focused, and a possible conflictof interest arises between economics educationperse and management. This ambiguity permitted abroader interpretation of the project’s remit by theMongolians and generated a gap, for some parts ofthe SES, between expectation and provision which,initially at least, compromised the project’s credi-bility. For example, with management included,business education and training with other relatedskills such as accountancy arguably enter the pic-ture. This avoidable dilemma arose from the his-torically and culturally bounded determination ofthe subject’s domain. However, the reasonable,albeit western, interpretation of the TORs was thatthis was primarily an economics projectdeveloping undergraduate and postgraduate curric-ula and research and consulting capabilities. Theimmediate objective was to provide a model ofwestern good practice: the Manchester degree and

its supporting structures furnished a legitimatetemplate.

3.2. The Manchester BA(Econ)

The objective of constructing a market-orientedeconomics degree programme requires decisionsabout content and structure. Although it wasrealised that it risked accusations of the impositionof a possibly inappropriate and culturally specificmodel it was decided that the first stage was to bethe formulation of first year courses in microeco-nomics, macroeconomics and quantitativemethods, in line with the content and typical struc-ture of first year course levels in British univer-sities.12 Manchester University’s first year econom-ics courses served as prototypes. Apart from thefact that the technical assistants were familiar withthese courses, there was another strong reason fortheir choice: the BA(Econ) at Manchester is a gen-eral social science degree which draws studentsfrom a wide background, with a substantial pro-portion from overseas, who will proceed after theirfirst year to an extremely varied range of special-isms, including economics, economic history,accounting, sociology, anthropology, governmentand social policy; it is also available to non-facultyentrants such as geographers and computer scien-tists and supports students studying for degrees inrelated subjects such as accountancy and finance.Given the wide range of courses and degrees in theSES which are fed from the core courses, it wasconsidered that the Manchester model would offera useful starting point, as well as providing anobvious grounding at an internationally acceptablefirst year standard.

3.3. Economic literacy

Before the Manchester model could be applied,it was necessary to assess the degree to which stu-dents entering the SES were familiar with funda-

12 The re-formulation team were well aware of the criticismlikely to emerge from this decision. However, the TOR wasvery specific: “… that economics teaching and research will beorientated towards mainstream economics similar to that taughtat universities in western market economies.”


mental economic concepts. Accordingly, an econ-omic literacy test (Soper and Walsted, 1987) wasconducted with the first and second year students.It included 46 questions designed to assess theeconomic understanding of students with respectto basic macro, micro and international economicconcepts, applying five of Bloom’s six originaltaxonomies—knowledge, comprehension, appli-cation, analysis, and evaluation.13

A test which compared SES students with finalyear US high school students was deemed appro-priate, since the first year at the SES is, as notedabove, regarded as equivalent to the final year ofpre-university schooling offered in the majority ofwestern educational systems. The performance ofSES students in some respects compared favour-ably with some categories of results obtained byUS high school students.14 However, the progressof the SES students between their first and secondyears of study was evidently modest comparedwith US students’ progress between grades 11 and12, suggesting that significant improvement in theireconomic understanding would be required if theywere to reach international standards of attainment.Clearly the SES’s expectations that their first yearstudents would match the economic comprehen-sion of western school-leavers were not beingrealised. There were also significant discrepanciesbetween the performance of students in differentdepartments within the SES, suggesting that theestablishment of a common core for all first andsecond year students at the SES should go someway towards reducing such large discrepancies.The conduct of the tests was less than ideal, butthe results were judged to be significant enough tooffer an aid to policy formulation on the project.

3.4. Delivery mechanism

The establishment of a Western style degreeinevitably involves a considerable one-way transfer

13 The details of the questions asked and the quantitativeanalysis of the answers are available on request from MrDavid Hall.

14 Rural students from US high schools scored substantiallylower than SES students drawn from predominantly rural aim-ags—even though it might be expected that US students wouldscore more highly because of the cultural specificity of the tests.

of information. However, a specific requirement ofthe project was that all changes must be negotiated,agreed and, indeed, owned by the SES and its staff.For this reason the establishment of the SES degreeprogramme was conceived in terms of a dual pro-cess consisting of visits and meetings both inManchester and Ulaan Baatar. Groups of Mongol-ian academics visited Manchester for, initially, 2month attachments. Their brief was to observe, col-lect materials and interrogate the Manchesterapproach for both content and structure, and toundergo intensive English language training.15

These visits were supplemented by return visits byManchester academics and administrators givingseminars to staff in Ulaan Baatar. These initialseminars covered administrative structures, degreestructures, teaching methods, course content,examinations procedures, evaluation techniquesand procedures and structures to support researchand consultancy.

Logically, assistance in the early phases wouldconcentrate on the reform of undergraduate coursesin the first and second years, known locally as thefoundation and core years, respectively. There waslittle point at first in reforming courses for the lateryears of students who would have started in anunreformed programme: as students proceededthrough the course, the years concerned could bereformed on a rolling basis.

4. Issues in implementation

The implementation of the project met a rangeof difficulties in addition to the ambiguity whichsurrounded the term economics discussed in theSection 3.1 above.

4.1. Institutional issues of organization

A central issue in seeking to change behaviouralpatterns is the underlying culture of organizations(Handy, 1985, Chapter 7). After three generationsunder a command economy, with a key role played

15 Language training at Manchester was supplementary to the(very successful) programme operating in Ulaan Baatar.


by a foreign patron state, the very idea of localinitiative and innovation had become extremelystifled; moreover, there was no strong prior tra-dition of commercial ability and entrepreneurship.This shortcoming pervaded many areas of activityin Mongolia, with the result that for many mem-bers of staff in the SES there was an acutedilemma: they had been inculcated with an ethos ofpassive acceptance, simply doing what they wereinstructed to do, yet they were being enjoined toaccept and implement a radical revision, from dia-metrically different foreign patrons, upsetting thereceived but now discredited wisdom of their pastsystem. For the young staff, this was an opport-unity, yet one for which they lacked experience;for the older staff, it was a threat, requiring thattheir experience, which would normally have beena valuable intellectual asset, be completely dis-carded.

4.2. Lack of collegiality

A specific but related problem which seemed toarise out of Mongolia’s particular experience as atransitional economy we identify as a lack of col-legiality. This expressed itself in a variety of ways.There appeared to be very little staff involvementin the design of curricula as a whole. Course andcurriculum development were determined in astrongly top-down manner. There was no mech-anism equivalent to a formal faculty board, or evento specific departmental meetings. Without sucharrangements, it was not clear how there could besystematic analysis of courses and curricula, withfeedback on their effectiveness, student assess-ment, and a host of other central issues. In addition,staff members perceived their responsibilities verynarrowly: they were to teach specific courses forwhich they were solely responsible, and in whichtheir teaching contact hours largely determinedtheir salary, and of which they were, under-standably, very possessive. They could neitherexpress general responsibility for the SES, nor forthe individual development of students beyondtheir individual courses. Concern for teaching andexamination standards had no means of expression,and neither could staff contribute generally to the

rational structure of courses with appropriate pro-gression towards degree combinations.

4.3. Resource shortages

An important constraint upon the teaching andlearning strategies employed within the SES wasa severe shortage of learning resources. The short-age of teaching and learning materials hamperedboth staff and students and acted as a brake uponinternally generated curriculum development. Themain problem was a shortage of Mongolian langu-age-based materials which meet the needs of cur-rent economics and business courses. In banking,for example, Mongolian texts reflected the needsof a banking system set up to service a heavilyplanned economy with little or nothing related to abanking system in a transitional economy. Libraryfacilities at the SES itself were especially poor withvery small stocks of largely outdated Russian lang-uage texts. Although there was a severe shortageof modern Mongolian texts at the main universitylibrary, there was an adequate collection of up-to-date English language economics and businesstexts but unfortunately very few staff or studentsunderstood enough English to use them. It is notsurprising, therefore, that an inquiry conductedamongst 87 students in the pre-implementationstage of the project established that only 33% ofthem claimed access to texts even when they wereavailable. Again, some members of staff at theInstitute had written short booklets including textand/or problem solving exercises which had beencommercially published. These booklets, whichhad been written for particular courses andincluded some satisfactorily modern materials,were sold to students for a minimal sum. However,such booklets were available for a relatively smallminority of first and second year courses.

The lack of suitable texts for staff and studentswas compounded on a number of occasions bysimple shortages of paper, reflecting both nationalshortages of paper and restricted local funding. Itmeant that few handouts were made available tostudents at either seminars or lectures. A survey of87 students drawn from all four undergraduateyears revealed that only 16 of the 29 coursesoffered in the first semester provided formal study


materials. Often lecturers had written extensivenotes on the courses which they taught, but wereunable to reproduce them for distribution to stu-dents, so that much time in lectures was wasted asstudents copied down notes written on a black-board or read out aloud by lecturers.

5. Issues in programmes and curricula

5.1. Course design

Seminars devoted to the content of core coursesrevealed serious problems about programme andcourse design. Investigation into the curriculumstructure of the undergraduate programme at theSES revealed a number of anomalies. The totalstudent contact time in terms of lectures and sem-inars varied from one specialist area to another,once students had completed their first year at theSES. The number of courses studied in years twoto four varied from one specialist area to another.Progression for students from general to morespecialised courses was not always clear and thestructure of the undergraduate degree did notalways offer students a clear progression from theirearlier years towards more specialised study of aparticular area in their later years.

5.2. Inappropriate content

There were several dimensions to this problem.First, it became quickly apparent that it was inad-visable to concentrate narrowly on some absolutewestern standard of content for introductory eco-nomics courses. The individual circumstances ofMongolia are such that a specific course about thecharacteristics and problems of developing andtransitional economies is a necessary adjunct toany course on economic principles. In particular,the presumptions which the typical western studentbrings to their studies, for example, ideas of pro-perty rights, types of business structures, forms ofbanking organisation, are unlikely to be wellgrounded, at least for some years, in the typicalMongolian student. This has profound implicationsfor courses based, as the SES’s micro and macroe-conomic courses were, on standard western text-

books, relayed through lectures and abbreviateddistributed notes.

Second, economics courses, and the replace-ments initially proposed by the SES, were uni-formly too demanding, if measured against thecontent of equivalent courses at western univer-sities. A similar problem was evident in mathemat-ics, where courses appeared to be taught withoutreference to the needs or level of understanding ofstudents taking the economic theory courses; andthere appeared to be no means to rectify or evenaddress this schism. The results of the EconomicLiteracy Test suggest that student backgroundknowledge in economics amongst entering studentswas lower than in a western university, and thatfailure rates were extremely high in economics,suggesting a reduction in content, and an increasein context. In particular, the technical knowledgeand technical skills required of career-track econ-omists were more appropriate to second and, some-times, third year undergraduates (corresponding tothird and fourth years at the SES). Moreover, tech-nical skill seemed to be regarded much morehighly than any consideration of understanding,and there was minimal linkage to Mongolian cir-cumstances. This resulted in courses in which therewas only a very limited relationship between theexposition of economic principles and the Mongol-ian economy in practice. The mode of instruction,with a strong emphasis on lectures based heavilyon foreign texts and multiple-choice assessmenttechniques, produced a very mechanistic form ofinstruction.16 Nonetheless, repeated suggestionsthat course content be reduced were stronglyresisted. In part this may have reflected the directlinkage between contact teaching hours and salar-ies, which would suffer if there were re-structuringtowards more self-directed student work. However,there seemed little concern that students’ abilitiesor workrate were legitimate constraints on course

16 The results of this were apparent in the second yearmicroeconomics course. Despite the fact that the students insecond year are arguably at about the same level as first-yearBritish undergraduates, the texts designated for the SES coursewere far too advanced. In addition, it was questionable whethersome of the theoretical structures being taught from these textsapplied in the contemporary Mongolian context.


and programme design. In addition, the need tointegrate courses into a coherent programme struc-ture, involving the provision of materials and atten-tion to student progression, met only limited recog-nition.17

5.3. Pedagogic issues

The dominant approach to the learning processwithin the SES can best be described as a knowl-edge transmission approach to learning, whichtreated undergraduate students largely as passiveobjects in relation to their learning. The lecturerswere the sources of knowledge which they passedon to students in both lectures and seminars. Therewas little opportunity for students to enquire,investigate or explore: instead the emphasis wasvery much upon the acquisition of knowledge. Thiscan be characterised as the view that teaching iscoterminous with learning, dispensing knowledgeas some form of commodity. Factual disseminationwas the dominant and preferred form of teaching.This approach to the learning process, combinedwith a severe shortage of materials which studentscould use to complement lectures, led to whatmight be described as a culture of undergraduatedependency in which students depended almostexclusively upon the knowledge imparted by theirlecturers. This view is reinforced by survey resultswhich indicated the impression of 66% of studentsthat their teacher’s lecture notes were probably suf-ficient for satisfactory progress on the course. Thisapproach was strongly reflected in very high con-tact hours which left virtually no time for individ-ual, small group or non-directed study.

Not surprisingly, the assessment system at theSES both reflected and reinforced the dominantmodel of learning. The emphasis was upon testswhich sought to ascertain the knowledge acquired

17 An example of this concerned the teaching of macroecon-omics. While there were two microeconomics courses in thefirst 2 years, there was only one course in macroeconomics,given in the first year. The successor course was not offereduntil the fourth year, by which time most students would haveproceeded to non-economics specialisations for which thesecond macroeconomics course was, in principle, preparingthem.

by students. Although occasionally there were testswith short writtten answers, examinations weretypically either multiple choice or oral answers.There was little opportunity for students to writeat length on particular issues or to be examined oninvestigations based upon their own research.

The dependence of multiple choice and oralquestions meant that there was no second marking.Not surprisingly, there was no system of externalexaminers. The external examiner system is farfrom universally employed among western univer-sities, and would be difficult to introduce at theSES (though not impossible); but the SES regimemeant that courses were, in effect, hermeticallysealed, and that the process of student assessmentyielded hardly any practical feedback informationas to student understanding, had no appeal pro-cedure, and was potentially open to corruption. Amore student-centred approach to examinations,and, implicitly, to course design, was discussed butmet with much resistance and a certain misunder-standing. Problems in the area of assessment wereparticularly apparent in the economics coursestaught at the SES. For example, the second yearmicroeconomics course had the highest failure rateof all the SES second year subjects—about 25%—and was said by students to be the most difficultcourse of the year. Such failure rates are notunknown in the UK, but they appeared more dis-turbing when the mode of assessment was exam-ined.18 A course failure rate of 25%, when a candi-date could achieve the pass mark by chance pluscareful attendance, was a cause for serious reflec-tion and concern. It would seem that pressure forintellectual respectability was distorting the struc-ture of courses beyond the appropriate level ofstudent ability, and indeed beyond the levelrequired to form awell-understoodbase for stu-

18 Marks for the course were allocated according to the fol-lowing proportions: attendance at lectures, 25%; term-time mul-tiple choice assessments, 25%; examination multiple choicetests, 50%. Multiple choice questions required students tochoose one of four possible answers and the overall pass markis 44%. Thus a student who attended all lectures and gave ran-dom answers to multiple choice questions could expect to gainthe following marks under the above headings: attendance atlectures, 25%; term-time tests: 25%3 0.25, 6.25%; examin-ation 50%3 0.25, 12.5%; total, 43.75%.


dents, the majority of whom proceeded to non-eco-nomics courses later in their degree. To someextent, this was understandable given the paucityof teaching resources, especially textbooks in Mon-golian, so that the appropriation of corresponding(and usually difficult) western technical texts wasan easy expedient, conferring authority on the tea-chers but offering little to the students, who, aswe noted earlier, had limited English and restrictedaccess to the texts concerned.

5.4. Organisational structure, administrativelimitations and quality assurance

It was evident that many of the problems of, forexample, collegiality and pedagogy, arose fromadministrative limitations. The administration ofthe SES was very compartmentalised so that notmerely were there serious problems of coursedesign and delivery with inappropriate and ill-thought out progression, but there were also simpleadministrative failings which some elementaryreorganisation could address. For example, someof the economics courses taught in the first 2 yearsinvolved significant duplication of lectures: theymight be given by separate teachers to specialistgroups of students who elected for different laterspecialisations. Although there was a problem con-cerning the availability of large lecture theatres—or rather their habitability because of financialproblems of heating during the severe Mongolianwinter—some rationalisation of these small dupli-cated lecture classes seemed most desirable, notleast as a means to release resource for other teach-ing reforms that are desirable. Again, the prevail-ing salary structure was a disincentive to reform.

It was clear that without the reform of theadministrative structure of the SES and the insti-tution of mechanisms for quality assurance inteaching, there were likely to remain serious andcentral problems at the SES.19 In addition, theestablishment of mechanisms which ensuredaccountability among the staff and responsibility

19 These issues are to be addressed in a second project whichwill focus more specifically on university level administrativereform.

to the university and society at large seemed anecessity. The role and composition of specialistsubsidiary committees and boards which enhancecollegiality was reviewed; in particular, the impor-tance of undergraduate course and examinationsboards in which the department as a whole vestsresponsibility was emphasised. A suitable structureof committees offering a forum for staff and forthe development of policy is a pre-requisite for anysuch sense of community. Of course, nobody seeksa plethora of administrative structures but there didappear to be unfulfilled roles for a computer users’committee, an examinations committee, a researchcommittee and an overall faculty or school com-mittee with inclusive membership, plus the possi-bility of departmental committees as appropriate,as well as a promotions committee if a formalstructure for staff appraisal and promotion eventu-ated.

Human resource management also posed prob-lems. As remuneration depended on teaching con-tact hours, with little or no reference to class sizeor nature of contact, the suspicion and misgivingevident in regard to teaching reforms which webroached was understandable. For example, com-bining lecture groups into larger sizes wouldreduce immediate remuneration, with no offsettingadvantage to the staff concerned. The seriousnessof this restriction is all the more apparent given thevery low level of academic salaries in the Mongol-ian Republic. There were also problems for olderstaff, who had taught subjects under the old regimewhich were now outmoded, and found it difficultto adapt to the change of political and academicculture. In addition, there appeared to be no sys-tematic mechanism for career progression. Therewas no recognised criteria of teaching, adminis-tration and research, linked to an explicit pro-gression of grades of lectureship and professor, norany formal method of assessment or appraisal ofperformance. The introduction of a variety of dif-ferent methods of staff assessment and appraisaldepending on the different objectives of the exer-cise were suggested and outlined: peer review;student course appraisal; appraisal by senior col-leagues; comments from external examiners; andexternal appraisal including inspection by the fund-ing ministry on the lines of the UK’s Higher Edu-


cation Funding Council (HEFC). Of course, all ofthese reforms required a restructured academiccontract which was formally beyond the remit ofthe project. Nevertheless, reform of the academiccontract seemed crucial if curriculum change wasto succeed. The inherited structure offered noincentive to the teaching changes discussed above,and no incentive to innovation in teaching methodsat large.20

5.5. Research and consultancy

The inadequacies of career and salary structurecompromised the SES’s express desire to foster aculture of research, since research appeared to bemore or less unrewarded, and could reduce the lec-ture’s teaching time. Involvement in, and under-standing of, research by SES staff seemed limited,and there was little acceptance that this wouldbecome an important staff responsibility. The for-midable difficulties of adjusting to western patternsof thought, and the insulation of teaching from peerscrutiny, are probably even more acute for some-thing as personal and exposed as research. Moreinterest was evidenced in the discussion of admin-istrative and academic structures than in theabstractions of research. Again, reform of thecareer and promotion path would seem to be a pre-requisite for the establishment of a research cul-ture. Nevertheless, some simple structures basedon the perspective of an individual pursuing anidea to publication could encourage researchactivity. Progress to publication was depicted as

20 Many of our discussions came to focus on the mechanism,or rather the absence of such mechanisms, for quality assurance,as considered by the HEFC’s divisions of quality audit and ofteaching assessment in the United Kingdom. The DQA system-atically reviews, inter alia, the following issues in its insti-tutional audits: institutional mechanisms for quality assurance:(i) mechanisms for quality assurance in the design, approvaland review of programmes of study; (ii) mechanisms for qualityassurance in teaching and learning, including the monitoring ofstudent progress; (iii) mechanisms for quality assurance in stud-ent assessment and award classification procedures; (iv) mech-anisms for quality assurance in staffing; (v) mechanisms forverification, feedback and enhancement processes; (vi) mech-anisms for responding to views and feedback and disseminatinginformation about subsequent action.

an iterative process of presenting ideas at severaldifferent levels and in different media for criticalresponse. An idealised progression from workshop,internal seminar, external seminar, conference anddiscussion paper before submission to journal, withfrequent review and re-writing between stages, wasadumbrated. Specifically, it was recommended thatthe SES should establish an internal and externalseminar programme and a discussion paper series.

6. Other general issues

The absorptive capacity of the School of Econ-omic Studies is limited and this constrained boththe extent and rate of progress. For policy changesto be successful, there must be an effective mech-anism of implementation, in which two criticalelements can be found. One is collegiality, whichfosters mutual support and improvement, to thebenefit of individuals and the institution. The otherelement is the focus of principal–agent analysis,namely a system of information and incentives(Stiglitz, 1993, pp. 566–572). An effective systemof rewards requires that the principal (theuniversity) knows the value of the work done bythe agent (the lecturer), and that the agent respondsto the incentives made available to him/her by theprincipal, be they positive such as salary or pro-motion, or negative such as stagnation or dismissal.We have seen in the course of our analysis thatthere were severe limitations on the effectivenessof the principal–agent relationship in the SES. Themeasurement of teaching effectiveness was prob-lematic, and the reward to academic ability andinnovation difficult to administer. There was someevidence that staff took extra employment in orderto supplement their low pay. If so, the internalincentive of salary was inevitably diluted by suchoutside earnings. At the upper end of the rewardspectrum, incentives could become perverse: ablerstaff benefitting from the project by learningEnglish, acquiring higher degrees, foreign contactsand research skills, becoming attractive targets forother employers. Thus there was a high staff turn-over, with faculty members who had visited theUK and/or participated in the training seminarsheld at the SES moving to other institutions. This


internal brain drain, especially severe after the newgovernment came to power in mid-1996,21 maywell be of social benefit in terms of the ultimateeffects of the project (taking to other institutionschanged attitudes and new skills developed in partthrough their participation in the project) but it car-ries private costs in damaging the achievement ofthe project’s immediate objectives. Moreover, theshortages of staff which high turnover betokensrestrict the use of sanctions for poor performance,thus diluting the effectiveness of the principal.

There were a limited number of competent andcommitted faculty members with adequate Englishlanguage capabilities. These were individuals whoinevitably were already highly committed in theareas of activity (teaching, consultancy) and thusthe time that they were able to make available forparticipation in the project was limited.

The absorptive capacity of the SES was alsoeffectively limited by the lack of coordination (orindeed in some cases lack of cooperation) betweenthe major donors. For example, other donorsoffered scholarships to central faculty memberswhich weakened the ability of the project to trainstaff and ensure that they stayed in the host insti-tution.

The aid relationship between donor and recipientalso raised a number of issues. It has long beenrecognised that tensions can arise between donorand recipient with respect to,inter alia, theinterpretation of terms of reference, possible con-flict of objectives, the balance between training andmaterial/hardware inputs, and the more specificindividual expert/counterpart relationship. Whileevery effort was made to encourage recipient own-ership of the project, each side evidently retainedan agenda not wholly consistent with that of theother.

Such differences of view and interpretation cantake surprising forms. Given Mongolia’s history,geography, institutions and poverty, one mightquestion the appropriateness or usefulness of trans-ferring western orthodox economic theory to be

21 Several of the younger, enthusiastic members of staff inthe SES left to take up positions in the new government or inthe central bank.

taught to Mongolian undergraduates. Yet, contraryto what might be expected, many of the Mongolianeconomists apparently seek textbook orthodoxywithout the critical perspective! The seminars heldin the SES considered a range of issues which wereparticularly relevant to Mongolian development—issues of market failure, the importance of insti-tutions, the role of the state in the developmentprocess, the nature of market/exchange relation-ships, issues of entrepreneurship, competition andregulation in a post-privatisation economy, as wellas discussions of economic development issueswithin the structuralist tradition—but these theaudience often seemed to consider peripheral tomainstream analysis. This in part reflected a tech-nocratic tradition within the former Soviet systemof economic analysis, but also represented simplya switch from one orthodoxy to another withouttoo much intellectual soul-searching.

7. Conclusions

In assessing any project, one needs to be awareof both proximate and ultimate effects of technicalcooperation (Casson et al., 1986, Chapter 6). Proxi-mate effects relate to the direct or immediate objec-tives (project outputs) in terms of trained person-nel, the development of skills and increasedinstitutional capabilities. Ultimate effects arelonger term and are expected to result from projectoutputs. They are more difficult to evaluate andassociate with a particular project because theyoften have the character of joint products with earl-ier or other activities. We would expect educationsector projects, ceteris paribus, to generate parti-cularly significant ultimate effects.22 Nevertheless,a number of clear conclusions emerge at this stagefrom our specific experience which moderate theachievement of both proximate but also, perhaps,

22 Casson et al. (1986, Chapter 6) surveys the studies evaluat-ing the effectiveness of technical cooperation projects in theeducation sector. It appears that projects dealing with curricu-lum and materials development are successful in achieving theirplanned results but poor at disseminating them throught the edu-cational system.


ultimate objectives for this project, and otherslike it.

The administrative restructuring of SES wasjudged a success by independent monitors. Apartfrom its new name and legal status, there was anew director and a new system of job descriptionsand contracts. New, participative committees wereset up for planning; teaching; research and con-sultancy; and personnel. Course reformulationmade much progress, and an Independent LearningCentre was promoting the use of learning packs forindependent study. English and information tech-nology instruction were proceeding well, andsenior personnel had been appointed to manage theconsulting and research functions, though therewas much remaining to be done in those areas. Ourjudgement is that research and consultancy areinherently long-term issues. Research requiresskills which will remain scarce until a cadre ofstaff with overseas research degrees can beassembled and retained. The major research outputthus far is a text on the Mongolian economy thatwill be published in both English and Mongolian(Nixson et al., 1999). Consultancy was also prob-lematic because there was no local tradition of con-sultancy enterprise in this area, limited knowledgeof potential consultancy markets, and limited mar-ketable skills. Areas for attention noted by theassessors included the master’s degree, whichneeded urgent restructuring, and strategic directionas a whole, for which a formal plan was needed.Notwithstanding their early fears which we notedabove, the SES staff were said to be highlyappreciative of the project.

In general, we observe first thatproject contextis all important: in this we include historical, insti-tutional, administrative and political dimensions.The characteristics of the transitional economy, itsmanagerial and administrative peculiarities and theparticular characteristics of the sector within whichthe project is located must all, as far as possible,influence the framing of the project document andthe TORs. In our project, the TORs posed prob-lems, obliging the participants to learn by doing.This is a common experience which cannot andshould not be avoided. But there were structuralfactors, perhaps not identified either when theTORs were formulated or during the inception

visit, which had a profound effect on implemen-tation. With hindsight we can see how TORs mightwell have been formulated differently if projectcontext had been more fully appreciated at an earl-ier stage, but intimate knowledge of context isoften lacking in the early stages.

Second, theabsorptive capacityof the host insti-tution must be properly assessed. This conditionsthe initial planning of project activities and, cru-cially, the speed of implementation. However,absorptive capacity is partly determined by whatwe have referred to as the aid relationship itself,and by the dynamics that develop as the project isimplemented. Managerial capabilities and commit-ment, in both the host and the provider institutions,the quality of leadership, and staff changes andturnover which affect leadership, all determineabsorptive capacity. These factors were highly sig-nificant in our own experience; they all need care-ful and continuous monitoring as a projectadvances.

Third, the framework within which the receivinginstitution operates constrains what is feasible.Although this project was primarily within the SESit could not ignore conditions and changes occur-ring elsewhere in the education system. The overalleducation dimensionhad to be taken fully intoaccount. In particular, reform of higher educationcannot be treated in isolation from the curriculumand level of student attainment in the secondarysector. Nor can courses be reformulated and degreestructures transformed without careful attention tothe needs of an emerging market economy and thepotential job markets which are likely to be gener-ated. This poses taxing problems for providers,who cannot forecast the progress of the economywith any degree of certainty, and for hosts, some ofwhose staff may be wedded to old views of centralplanning while others embrace an oversimplifiedview of how markets perform.

The key proximate objective of our project wasto enhance substantially the capacity of the SESto develop and sustain the processes of curriculumimprovement and development, to introduce newprogrammes of study as appropriate, at both under-graduate and postgraduate levels, and to establishand develop its research and consultancy capabili-ties. As Casson et al. (1986, p. 208) point out, the


raison d’etre of technical cooperation is to help thehost institution towards a healthy self reliance.They further argue (Casson et al., 1986, p. 209)that self reliance has three dimensions:

I a general ability todetermine knowledge needsthat cannot be met domestically, to identifywhere such needs can be met, to know how toacquire this knowledge andhow to adopt anduse it at home;

I the ability to undertake domestic research,problem solving and problem formulation;

I the ability to sustain these capabilities.

A purely technocratic approach to the transfer ofknowledge can help the achievement of proximateobjectives and seemingly solve the ideologicalproblem inherent in economics. We have arguedabove, from observation, that the Mongolians havetended to transplant one set of ideological certain-ties for another. The real challenge is to developa critical approach to the knowledge that is beingtransferred with the ultimate objective being thedevelopment of a Mongolian SES that is able togo beyond narrow textbook models and develop aricher and more creative intellectual and scholarlyenvironment and tradition.

For the project to be judged a success, it mustachieve objectives which encompass ultimate aswell as proximate objectives. Ultimate objectivesare inherently more difficult to evaluate, since theyextend far beyond the project boundaries. A uni-versity can be seen as an intellectual capital goodssector, able to reproduce itself and to supply keyinputs to other sectors vital to the developmentprocess. Sustainability is the result of the effective-ness with which the project transfers knowledgeand ensures its absorption by the host institutionand also the concomitant development of capabili-ties. Proximate project objectives are met throughthe establishment of those capabilities, but ultimateobjectives are only met through their further devel-opment, refinement and strengthening throughoutthe economy (Nixson, 1991).

Acknowledgements

We would like to thank Dr Jane Harrigan andMr Carlo Raffo of the Schools of Economic Stud-

ies and of Education respectively in the Universityof Manchester for their detailed comments. Anyremaining errors are, of course, of our ownmaking.

Appendix A

Project synopsis

Project title: Reform of economics education inMongolia

Project no.: MG94.01/02/.01/B003

Country: Mongolia

Project objectives

1. The EI to be organised in such a manner as toreflect the demands of a market economy;

2. The EI to be the leading provider, in Mongolia,of training courses and materials at BSc andMaster’s level adapted to the realities of a mar-ket economy;

3. The EI to be capable of providing high leveleconomic policy advice and contract researchactivities to the public and private sector thatreflect the realities of the market economy.

Planned outputs

1. Administrative procedures in the NUM revisedand documented for transfer to other institutes.

2. A strategic plan for the EI published and sup-ported by a medium term marketing and finan-cial strategy.

3. First year foundation courses operational inEnglish and IT.

4. Revised economics and management courseimplemented in the first three undergraduateyears.

5. Training workshops mounted by EI staff for


180 colleagues in CMDI and Zavkhan Econom-ics College.

6. A functioning materials development capacityin the EI and first trials of distance learningmaterials for first year students.

7. A functioning research and consultancy ser-vice institutionalised.

8. Four papers on the economic transition in Mon-golia accepted for publication in internationaljournals.

Project activities

1. Trained administrative staff document revisedprocedures to support centralised records.

2. Strategic planning for the EI based on analysisof records.

3. Information Technology and English depart-ments upgraded.

4. EI staff reformulate BSc and master’s coursesand disseminate to other Mongolian institutes.

5. Economics and management staff supported inselecting, generating and trialling materials.

6. Assessment systems revised to monitor studentprogress and lay groundwork for distance learning.

7. Income generating activities mounted and docu-mented to inform financial administration andplanning.

8. EU mentors support five policy-orientated rese-arches into the Mongolian economy.

Project starting date: 1/10/95Project duration: 36 months

References

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Institutional change in a transitional economy: the reform of economics higher education in Mongolia

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