In the wake of the Global Financial Crisis, there has been a worldwide movement to reform the BA in economics. Israeli academia has not been immune to this trend: The Council for Higher Education (CHE), faculty and students have all acknowledged the need for reform (CHE report, November 2008 ; Van Leer conference, January 2011 ; Tel Aviv Cinematheque conference, May 2015). Nevertheless, progress has been exceedingly slow.
Why must we reform the Israeli BA in economics?
- By US and UK standards, the Israeli curriculum overemphasizes theory and technical tools at the expense of applications (see here and here).
- Students are not exposed to recent research, policy issues, institutions and historical events. For example, the typical graduate knows nothing about the Great Depression.
- The current curriculum advances a simplistic free market worldview while discouraging critical thought.
- Students do little reading and writing until the third year.
- Most students study economics within a dual program, typically economics and business administration. However, there is no integration between the disciplines.
- Our graduates are not well rounded and are underprepared for employment in the business and public sectors.
To achieve significant reform, we must begin by reevaluating the goals of the economics BA. Currently, we seek to train professional economists within a three-year dual program. This is a laudable but overambitious goal; as detailed above, the costs of pursuing it are unacceptably high. Instead, we should emulate Harvard University and seek to train “a better analyst, decision-maker, observer, and citizen no matter what path [one’s] future career takes.”
To implement a Harvard-style curriculum, we must reduce the number of required core courses (macroeconomics and microeconomics) and technical courses (mathematics, statistics and econometrics) in order to make room for more applied courses. Many readers will object vociferously: “You are diluting academic standards!” I respectfully disagree. On the contrary: A broader, more policy-oriented curriculum would better serve the 88% of Israeli BA graduates who do not continue to the MA level.
With this in mind, I propose the following reform:
- Reduce the number of core theory courses from six (or seven) to four. Reduce the number of technical courses from five to three. This will bring Israeli universities into line with Harvard.
- Improve the core courses by adopting the “applications before theory” approach, in which real world issues are used to motivate the study of theory.
- Introduce a cluster of required applied courses such as: Money, Banking and Financial Institutions, Applied International Economics, Economic History, Political Economy of Capitalism and Economy of Israel
These courses will expose students to topics such as shadow banking, the Subprime and European Debt Crises, the Great Depression, different models of capitalism, corporate lobbying, antitrust, regulatory failure, Israel’s housing problem, and economic inequality. In addition to policy-relevant insights from economic theory and empirical analysis, each course will incorporate readings from great economists past and present and the writing of short policy-oriented papers.
- Facilitate collaboration between economics and business faculty in order to achieve greater integration between these two disciplines.
In order to set the stage for a successful reform, we must anticipate and overcome the following obstacles:
- Today, no university can unilaterally change the curriculum without risking its academic reputation. Therefore, any significant change in the BA curriculum must be initiated and led by the CHE, and must be implemented universally.
- There is a shortage of faculty to teach the new courses. The universities should adopt a two-pronged approach to this problem: First, ask faculty to develop new policy-oriented courses, even if those courses are only loosely related to their research specializations. The CHE should provide curriculum development grants for this purpose. Second, diversify faculty research specializations by training and hiring new Ph.D.s (including Israelis who have studied abroad). To support faculty diversification, revise the existing promotion and tenure criteria, which strongly discourage specialization in economic history and (even more so) the history of economic thought. The CHE can help by increasing funding for policy-oriented research.
- To address the lack of suitable pedagogical material, the CHE should support the adaption and translation of foreign textbooks and online teaching resources.
In conclusion, it is painfully obvious that the Israeli BA economics curriculum is in need of fundamental reform. It is time to cross the Rubicon and adopt an American-style curriculum — a curriculum that is more policy-oriented and better grounded in economic reality. Will the transition be easy? Of course not. But I believe that with goodwill and a genuine spirit of cooperation, we can successfully meet the inevitable challenges and achieve the desired outcome: a new and improved economics BA curriculum that will immensely benefit students, faculty, employers and broader Israeli society.