The Region

The Challenge of Economic Literacy in Post-Soviet Countries

Russia's economic crisis is the most immediate, but fear runs through the other transition economies of the former Soviet Union and Central and Eastern Europe. What can economic literacy mean in a region where the road to a market economy is so rough?

Patricia K. Elder | Vice President, EconomicsInternational, National Council on Economic Education

Published December 1, 1998  | December 1998 issue

In the course of just a few weeks in 1998, the Russian ruble fell precipitously, top officials in Yeltsin's government were fired or resigned, many Russian citizens with bank accounts began to wish they had relied on their mattresses, and lines forming outside shops harkened back to Soviet times. Russia's economic crisis is the most immediate, but fear runs through the other transition economies of the former Soviet Union and Central and Eastern Europe. What can economic literacy mean in a region where the road to a market economy is so rough?

For 70 years, education in the vast Soviet empire was driven by ideology and served the interests of the state. Schools, together with parents, youth organizations, mass media and the government, delivered uniform messages whose aim was the socialization of the next generation. The school curriculum reflected political ideology and carefully reinforced the prescribed relationships between individuals and the state. Textbooks, teacher training and retraining, and teaching methodology were shaped to meet the socialization function of schools. In support of the development of good Soviet citizens, values such as loyalty, hard work and respect for learning were inculcated in students; skills such as critical thinking and decision making were not promoted. University students took courses in political economy, while in secondary schools, the geography curriculum included descriptive treatments of economic features and institutions, and history courses featured ideologically based economic interpretations. "Economically literate" students were those who understood and accepted the economic roles of citizens and state as decreed by communist ideology.

If political ideology shaped the meaning of economic literacy in Soviet times, what gives it definition today? Why is economic literacy still such a faraway goal? And how can it be achieved?

It is tempting to dismiss the possibility of achieving economic literacy in the foreseeable future, given the widely held belief that true and lasting economic reform in much of the former Soviet empire will take a generation or more. In Russia, in particular, the current economic crisis is hampering reformers' efforts to rebuild civil society, but uncertainty and turmoil surrounding economic reforms impede educational reform throughout the entire post-Soviet region. Several important obstacles to the widespread development of economic literacy discussed below are rooted in the dynamics of educational reform rather than in the failures of economic reform:

  • no strong advocacy of economic literacy, resulting from weak or nonexisting partnerships among nongovernmental organizations, the private sector, governments and academic institutions;

  • an absence of consensus about the need for economic literacy or what constitutes it;

  • the diversion of attention of policymakers, particularly at the ministry level, from necessary curriculum reform to serious financial problems; and

  • tensions between education policymakers at central and local levels.

Addressing the first two obstacles, in particular, is critical for achieving widespread economic literacy in post-Soviet countries. Two key factors are: (1) mobilizing nongovernmental organizations or NGOs (that is, nonprofits), private business, academic institutions and government to work together to shape and implement public policy in economic education; and (2) articulating a vision of economic literacy as a critical requirement for democratic citizenship. This article considers how the shadow of the past interferes with the development of productive partnerships that focus on the need for economic literacy and that promote effective economic education policies and programs.

Advocates for Economic Literacy

Underlying these obstacles is a leadership vacuum that affects not only education, but most other social policy spheres in post-communist societies. Absent a coherent and overarching philosophy to replace the Soviet ideology, educational reform in these nations is driven by a curious combination of reformist vision, sober pragmatism, old-style politics and ongoing budgetary crises. For reasons both financial and political, ministries of education do not exercise the same authority they did in the past. Where once there was unquestioned central control, now the authority of ministries is challenged, and they are forced to share power with the regions. Regional-local tensions mirror those between central and regional levels. Not surprisingly, educational policymakers are more likely to focus on issues of structure, governance and finance than on curriculum reform.

Since 1991, various visionary reforms have been proposed by ministries of education in a number of the transition countries. Financial exigencies, political infighting and the inertia that plagues most bureaucracies have slowed down and sometimes halted these ministry-led educational reforms. Foreign observers often look to other institutions for leadership. In particular, nongovernmental organizations (NGOs) have entered the scene and are jockeying for position as they carry out their agendas.

NGOs, many with educational missions, are springing up throughout the former Soviet Union and Eastern and Central Europe, but a true independent sector cannot be said to have developed in most of this region. Although some NGOs implement economic education programs (for example, by developing textbooks and providing teacher training), they are generally not positioned to influence public policy. Reasons for this lie partly in the roles that NGOs fashion for themselves (often, either as self-styled watchdogs of government practice or as providers of services that the state no longer provides), and partly in their limited impact (many NGOs tend to have narrow missions and serve small audiences; some are criticized for providing self-improvement for selected individuals). Public policy influence, however, calls for drawing strength from constituencies representing a wider range of interests. This requires organizational leaders to address turf issues, to share information and contacts, and to be willing to coordinate efforts. But power sharing was not a valued survival strategy in Soviet times, and old habits die hard. Indeed, it is argued that some NGOs are little more than temporary job creation programs for former officials, future entrepreneurs or both.

On the bright side, economic education NGOs in post-Soviet countries offer some of the most innovative approaches to educational reform, often with support from Soros foundations, the European Community and partners from other countries (such as the National Council on Economic Education, or NCEE, which receives major funding for international activities from the U.S. Department of Education). Although few of the new NGOs have taken leadership in putting economic education on the national agenda in their respective countries, there are promising signs that this is beginning to change. For example, the recently formed Ukrainian Council for Economic Education brings together leaders from foundations, the private sector and a foreign NGO (the NCEE), to train Ukrainian teachers and trainers, translate and develop instructional materials and work with the ministry of education to include economics in the school curriculum. As more NGOs are willing to combine their energies and to overcome their reluctance to work with government agencies, academic institutions and other NGOs, the desired result will be heightened awareness of the need for economic understanding within the population at large and among policymakers.

Visions of Economic Literacy

Why is it so difficult to make a case for economic literacy in the transition countries? Few would argue against the need for young people to be able to function in a dramatically different economic system than their parents knew, but there is not yet a clear consensus about what behavior constitutes desirable functioning or what knowledge, skills and attitudes are needed to function satisfactorily.

In the six years that the NCEE has collaborated on teacher training and exchange programs in post-Soviet societies, U.S. participants have observed a distinctly different approach to economic education than that which underlies the National Council's philosophy. The driving force behind much economic education in the transition countries appears to be skills for individual economic success, and instruction is closely linked to the development of business knowledge and skills.* Economics is not typically part of the pre-university curriculum in post-communist countries, and when it is, it is more likely to include teaching about marketing, management and other business-related content, than to cover the fundamental economic concepts and ways of thinking included in economics courses in the United States. Similarly, university economics courses are typically a hybrid of economics and business. Missing is the idea of economic literacy for citizen participation.

This is hardly surprising, since economics instruction in Soviet times existed in the service of citizenship training, which is now discredited. Educational leaders are, appropriately, averse to "propagandizing" young people, and their cynicism about citizenship education is understandable. However, a democratic society requires the knowledgeable participation of its citizens; in this way, economic understanding supports civil society. In fact, one might argue that backlashes against market reforms are largely due to economic illiteracy among those who do not realize that the economic systems that have evolved in many of these countries are not democratic market economies. The spread of economic literacy will correct misunderstandings about the distorted nature of many of the reforms and their failure to be supported by the institutions necessary to the development of free market democracies.

The NCEE has long grounded its programs in the rationale that economic understanding prepares young people for multiple roles in society—as workers, consumers, and savers and investors—but most importantly, as citizens. NCEE's emphasis on critical thinking and decision making is mirrored in recent goals proposed by the Russian ministry of education. The National Council's purpose—to help young people learn how to "think, choose, and function in a changing global economy"—was never more relevant, not only in the United States, but also in the dramatically changing societies that are struggling to join the world as democratic market economies.


* The NCEE approach, on the other hand, addresses how economic knowledge can help citizens understand economic systems and the interrelated roles of businesses, households and government within our economy. The economics of business, entrepreneurship and personal finance are taught as important applications of economics rather than in isolation. Others might argue that "economics for citizenship" as described here is only one of several alternative approaches to economic education in the United States, and that other approaches drive instruction as well. The existence of competing approaches to economic education are part of our democratic tradition.

Elder is vice president of EconomicsInternational at the National Council on Economic Education (NCEE) in New York City. In her 13 years at the Council, Elder led the NCEE's programs for at-risk students before becoming the primary force in developing the NCEE's international programs. Since June 1995, under her leadership, the NCEE has conducted the economic education component of the International Education Exchange Program, funded by the U.S. Department of Education, that reaches large numbers of economic educators in post-Soviet countries and in Eastern and Central Europe.

Prior to joining the National Council, Elder taught middle school social studies and elementary school in Minnesota. Elder holds a doctorate in social science education from the University of Minnesota.