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Review & Outlook - 12/05/2005

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The State of Business and Economics Education in Armenia

Armenian News Network / Groong
December 5, 2005

By David Joulfaian

Armenia has a long and proud tradition of education and training in
mathematics and the sciences, as well as in the arts and music. Given
the very same historic legacy, however, Armenia began its independence
in 1991 endowed with very few professionals trained in finance,
management science, and economics. The absence of such professionals
and training institutions has left its marks on the governance and
management of the economy, with consequences so deleterious that they
raise doubts on whether Armenia will become a fully functioning
economy any time soon. (1)

The conventional wisdom on the state of scholarship in economics and
finance in Armenia is not a positive one. The insights gained from
some Armenians in Yerevan, or recent immigrants, in particular those
educated in the US, at best portray a dismal picture of the state of
education. These are at times joined by non-Armenians who amplify such

Such impressions are perhaps the byproduct of limited knowledge of the
quality of the current educational system. The unflattering views
often expressed by some Armenians either reflect a long absence from
Armenia or the passing of a number of years since graduation, as well
as a total lack of contacts and ties to current faculty and students.

I. What Do Business, Economics, and Finance Students Study?

It is important to explore what Armenian students are taught prior to
addressing or assessing the quality of education in Armenia. The
following is the curriculum at Yerevan State University (YSU), both
undergraduate and graduate.

Bachelor's Degree:

In the first year, and focusing on relevant subjects, students take
two Calculus courses, two in Analytical Geometry and Linear Algebra,
and two Introduction to Economics. In the second year, they take two
courses in Probability and Statistics, and one course each in
Operations Research, Economic History, Economic Informatics, World
Economy, and Economic Geography. In year three, students take courses
in Statistics, Firm Economics, International Economics, History of
Economic Thought, Microeconomics, Econometrics, Macroeconomics,
Business Law, Financial Markets, Accounting and Auditing, Agricultural
Economics. And in year four, they take Finance, Banking, Labor
Economics, Management, Marketing, Service Industry Economics, and
Governmental Regulation of Economy.

There are also some mini courses and term papers that may vary by
specialization. These are in addition to a number of other courses
unrelated to the field such as history and foreign languages, among
others. Total enrollment is about 1,100 students.

Master's Degree:

The Master's degree offers six specializations. These are (1) Theory
of Economics, (2) Simulation of Economy, (3) Management Information
Systems, (4) Economic Policy and Business Management (MBA is a more
appropriate title), (5) Finance, and (6) International Trade. Total
enrollment is about 200.

All students enrolled in the Master's program are required to take
courses titled Current Issues (field specific), Public Management,
International Economic Systems, Concept of Human Development,
Econometrics, Non-Banking Financial Industry, and write a Master's
thesis. Additional courses, tailored to the field of specialization,

1. Theory of Economics

Transition economics, History of Armenian Economic Thought, Theory of
Human Capital, Theory of Welfare Economics, Business Law, General
Economics, Armenian Migration Issues, Social and Economic Reforms in
Armenia, Theory of Economic and Political Risk, Psychological
Economics, Development Economics, Firm Theory, and Financial Relations
in Transition Economy.

2. Simulation of Economy

Simulation of Microeconomic Processes, Production and Operations
Management, Application Techniques of Evaluation Theory, Investment
Theory, Econometric Methods of Financial Activities Analysis,
Multidimensional Statistical Analysis, Simulation of Foreign Economic
Relations, Simulation of Macroeconomic Processes, Game Theory, and
Management Information Systems.

3. Management Information Systems

Management Information Systems, Modeling of Financial Decisions of
Firm Management, Data Communication, Networks and Information
Economics, Database Analysis and Design, Networks Administration,
Modeling of Financial Decisions of Firm Management, Project
Management, and E-Business.

4. Economic Policy and Business Management

Production Management, Personnel Management, Psychology of Management,
Financial Management, Innovations Management, Marketing Analysis,
Assessment of Intellectual Property, Flow of Funds Management, Public
Income Management, Strategic Management, Corporate Management, Risk
Management Insurance, and Bank Management.

5. Finance

Corporate Finance, Banking Management, Budgeting, Financial Analysis,
Monetary Policy, Fiscal Policy, Bank Accounting and Audit, Investment
Policy, and Risk Management and Insurance.

6. International Trade

International Trade, International Finance, International Management,
World Trade Organization, International Financial Institutions,
International Financial Operations, International Marketing, Foreign
Trade Financing, Flow of Funds Management, International Business
Organization, and Foreign Investment.

Ph.D. and DBA Degrees:

The degree of Doctor of Philosophy (Ph.D.) in Economics or in Finance,
as well as the Doctor in Business Administration (DBA) do not
exist. In addition, no courses are offered beyond the Master's
degree. Instead, students are awarded the title of Candidate
(teknatsu) of Science after completing the Master's program, and
passing exams in philosophy, general economics, and their field.(2)
They are also required to defend a thesis and have at least three
publications. Beyond the Candidate or Teknatsu, the title of Doctor of
Science is awarded after publishing three articles in international
journals and ten articles in domestic journals, in addition to
completing and defending of dissertation (book).

II. A Critical Assessment

A cursory examination of the course requirements above is suggestive
of the depth of the curriculum and the exposure of students to
scholarship in economics, business administration, and finance. It is
true that some of the course titles or specializations seem odd, or
that the required coursework exceeds what we are accustomed in the
US. In a way, one may view the coursework as the equivalent of double
and triple majoring in economics, finance, and business majors. With
limited employment opportunities, such overload may very well be
optimal as students acquire a diverse set of skills. Overall, this
curriculum gives an unambiguous indication of the transition to modern
teachings. However, it says very little about the content of the
courses and the quality of education.

One may employ a number of criteria in evaluating and ranking
universities and faculty, and the underlying quality of education.
This may be done through publication records of faculty, employment
placements and the quality of the students, among others. Virtually no
research is visible in peer reviewed journals in Economics, Finance,
and Management Sciences from any institution in Armenia. Thus, we are
unable to evaluate the quality of Armenian institutions through a
review of the literature.(3)

As an alternative to research by faculty, placement of students can be
used in evaluating the quality of education. Employers do care about
the competency and qualifications of employees, and are very likely to
be sensitive to their training in the hiring decision. Unfortunately,
employment opportunities are very limited in Armenia. Again, we are
unable to gauge the training and qualification of students, and, by
proxy, the quality of the educational system in Armenia.

An unconventional approach may require direct interaction with
students during their studies. For instance, a visiting scholar may
teach an advance course in economics and gauge students' preparedness
and training in economic theory. Or, in another example, the visitor
may require a term paper and indirectly evaluate their training in
statistics and econometrics.  Interacting with students also has the
added benefit in that they invariably volunteer information on the
shortcomings of the coursework and their training in meeting their

It is the latter approach that I resort to in my evaluation. In
October of 2005, I spent three weeks at Yerevan State University
teaching Public Finance as a Fulbright Senior Specialist, focusing on
the economics of taxation. The course is generally comparable to that
taught to mostly seniors in the US, but slightly modified to emphasize
the importance of econometric estimation and empirical findings in the
literature. The syllabus was structured around Harvey Rosen's textbook
of Public Finance, and students were assigned homework problems sets,
and a research paper.  Classes met Monday through Saturday for a
period of three weeks, and lectures were conducted in English without
translation into Armenian. The student body included both graduate as
well as undergraduate students.

The Master's students seemed to be familiar with textbooks authored by
Mas-Colell (and Whinston and Green), Romer, and Sargent, authors of
textbooks in Microeconomics and Macroeconomics that are also familiar
to first year Ph.D. students in the US.  This is a clear signal of the
progress in transition that Armenia has made. Indeed, most of my
students were very comfortable with the microeconomic foundations of
public finance. In many ways this is remarkable, given a near total
lack of textbooks in Armenia. Indeed, libraries often have only one
copy of a textbook available for all students. Some students, those
who can afford it, may gain access to Russian translations or older
editions. At times, students desperately search online for free
resources. Often, however, students may photocopy relevant chapters
from the single textbook in the possession of the professor. Software
such as Matlab or Mathematica that facilitate the teaching of graduate
level economics simply do not exist.

Progress is also made in the graduate teaching in quantitative
analysis, particularly econometrics, but seemingly at a slower pace
than the advances made in theory. The teaching is more at the level of
Gujarati and Maddala introductory textbooks, but nevertheless
represents much of an improvement over my priors. Indeed, textbook
availability in this area seems to be more critical than in other

As for the post-Masters students, their training is of an unknown
quality and I am not in a position to evaluate it. The absence of
course work, however, is striking. In contrast, students in a typical
economics Ph.D.  program in the US may take up to three courses each
in Microeconomics, Macroeconomics, econometrics, in addition to a
variety of courses. Students may specialize, and take relevant
courses, in Microeconomics, Macroeconomics, Econometrics,
International Economics, Finance, Industrial Organization, Public
Economics, Urban Economics, Labor Economics, Health Economics,
Economic Development, and so on. For the most part, these
specializations do not yet formally exist in Armenia.

While the preparedness of students and their training in theoretical
economics, business administration, and finance, may be quite
competitive with that in the US through the Master's program, two
shortcomings of the educational system are quite visible to the casual
observer. First, internship or cooperative programs, or other
mentoring opportunities do not exist in order to provide students with
practical experience and training.  Second, and perhaps even more
critical, is that the (imported) textbooks employed make very little
reference to the economic and business activities in Armenia. Students
are not likely to be able to draw links between the theory they are
taught and the economic reality of Armenia.

III. Concluding Comment

Judging from the experience of Yerevan State University, Armenia has
come a long way since its independence in the teaching of economics,
business administration and related fields. YSU undergraduate and
Masters students receive an education that is quite competitive,
particularly given the limited resources. This is also quite
impressive given that faculty compensation is at best a tiny fraction
of that enjoyed by their western counterparts.

There is little doubt that education in these fields will continue to
improve. But there is equally little doubt that this will not happen
overnight or anytime soon. Textbook availability, support for
research, and training of faculty and students have to be addressed
adequately for a timely improvement in scholarship.

It should be noted that the evaluation of education in Armenia thus
far is viewed from the prism of YSU. Other universities and
institutions of higher learning may or may not have made the same
progress observed at YSU.  Undoubtedly, however, they all suffer from
a lack of textbooks, training, and research funding. This is
remarkable given that so much technical assistance and training
related aid has poured and continues to be poured into Armenia, yet so
little of that seems to filter down and benefit students and
institutions of higher learning.


1. Armenia's per capita GDP (average income) is about $1,000, or
   slightly over $3,000 in PPP (adjustment for differences in the cost
   of living). The latter is less than 10 percent of that of the US.

2. The Candidate of Science is viewed in Armenia as the equivalent to
   the Ph.D. in the US.

3. Not a single article can be found in EconLit that is published by
   an Armenian affiliated with an Armenian institution of higher
   learning. This may mean that research is not visible, and not
   necessarily not carried out.

David Joulfaian is a Washington based economist, and may be contacted

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