Three main issues arise: networking, use

of new technologies, and entrepreneurship. Networking is the main factor enhancing opportunities for participants to secure
a job. A well-developed active alumni association is crucial toward achieving this goal.
MBA alumni can provide current participants
with new opportunities for employment.
Networking events, guest lectures by alumni, and alumni sponsorships are three main
instruments that business schools use for
this purpose. MBA participants should prepare for a workplace that makes significant
use of new technologies and social networking. Effective use of online social networks is
something many business schools fail to include in their curriculum. It is worth mentioning the most important issue here is the
development of awareness on the individuals part of their social footprint left behind,
and how this might influence opportunities
for securing a job. Recruiters and companies
use social networking to discover information about prospective applicants. Schools
should take this into consideration when
training MBA participants. Finally, the development of entrepreneurial skills and providing support for business start-ups based on
entrepreneurial ideas is something some,
but not all, business schools consider. Some
have established funding schemes to support MBA students in their entrepreneurial
endeavours, whilst a number of universities
allow students to make use of their support
infrastructure in the early stages of business
start-ups. Accrediting bodies, such as AMBA,
provide awards and scholarships to support entrepreneurship and innovation in the
MBA. Much progress is in place since Mintzbergs critique of the MBA. Business schools
and accrediting bodies addressed his criticism to a great extent, and redesigned their
MBA programmes to provide a transformational experience. Focusing on soft skills and
leadership, together with a debate-forumstyle classroom (Lorange, 2010), supporting
personal development and entrepreneurial
attributes, and access to a wide MBA community mean that despite the stagnating market the MBA will be a degree that is still in demand.
References:
Gill, R. (2004) Leadership Development in MBA Programmes, Business Leadership Review, I:II, July 2004, 1-4
Lorange, P. (2010) New Challenges for Value-Creation in the Modern Business School, Business Leadership Review, VII:IV, October 2010, 1-7
Mintzberg, H. (2004) Managers not MBAs; A hard look at the soft practice
of managing and management development, Berrett-Koehler Publishers,
Inc, San Francisco
Navaro, P. (2008) The MBA Core Curricula of Top-Ranked U.S. Business
Schools: A Study in Failure?, Academy of Management Learning and Education, 7, 1, 108-123

Anglohigher

Innovative fiscal policy and economic

development: a social totality view
By Aleksandr Gevorkyan, Adjunct Assistant Professor, School of Continuing and
Professional Studies, New York University, USA - www.nyu.edu & www.scps.nyu.edu
History teaches there are lessons to be
learned from the past. Regretfully, by that
standard, economic policy seems a poor
student in the context of recent macroeconomic failures. But it is not the point of this
brief note to add yet another criticism to
the economic disciplines vitae. It is however the point to suggest a more inclusive
approach.
In that regard recent experiences of the
post-socialist economies of Eastern Europe and former Soviet Union (EE and FSU
respectively) are telling and useful in terms
of practical applications, domestically and
elsewhere. Much of the insight in this note
is drawn from the recently published volume entitled: Innovative fiscal policy and
economic development in transition economies (Gevorkyan, 2011).
From the start it is important to recognize the social character of an economic
transformation, regardless of the affected
economic agent. Persons, both natural
and legal (eg corporate), make decisions
affecting the actions of other people. As
such, economic policy assumes that society has an inherently dynamic social character that leads the changes through the
ultimate transformational moment.
Neglect of that same moment, was the
problem of the famed shock therapy
(free market) reforms of early 1990s in the
EE and FSU. Much of the policy approach
was based upon the expectation of a
quick, almost revolutionary, adjustment.
This introduced the term transition, instead of the more fitting term transformation, into the economic parlance. The rest
is well-known and covered in literature.
The transition reforms resulted, despite
isolated successes initially, in wide-scale
social deterioration throughout the fragile
economies.
For many of the post-socialist states the
past two decades has been a learn-asthey-go experience of survival in the modern economy, dealing with a multitude of
mini and large-scale crises. What emerged
from the early 1990s were economic models characterized by rudimentary financial
systems, susceptible to capital market volatility; high unemployment and resulting
chronic outward migration; limited diversification with reliance on either primary
commodity exports or labor migrant remittances and financial transfers of other
sorts.

ISSN 2041-8469 (Online) www.anglohigher.com

Volume 4, Issue 1, Winter 2012

By the early 2000s things started to

change (in relative terms, since much of the
above still permeates the economic structures, though to a lesser degree than in
the 1990s). Characteristic of this stage has
been return of the state, often on par with
the private sector, in the economy and as
an implied social guarantor (e.g. bigger
net exporter countries with revenues accumulating from primary commodity exports). Across the transition map countries
posted high, at times double digit, growth
rates with some macroeconomic stability.
But the longevity of the relative improvements of recent years is subject to uncertainty, as so much hinges on a mix of external factors and internal characteristics.
On the external side, take for instance capital flows. Despite their emerging markets status, EE/FSU economies have been
subject to abrupt foreign currency funds
withdrawals and strong pressures on domestic currencies, e.g. Armenia, Hungary,
Russia, Ukraine -to name a few. These fluctuations translate into immeasurable social costs as the most meaningful external
factor remains the exchange rate and currency competitiveness. The story can easily be expanded to include other emerging countries (e.g. Argentina, Brazil, India,
Mexico, and smaller African and Asian
economies, but not China). There, too, consequences of exchange rate volatility play
an important role and have much longer
history of driving social instability. Aside
from being currency-crisis prone, the unifying feature of this larger group of economies is the limited industrial diversification
and implicit social obligations by the state.

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Copyright 2009-12 by Panethnic Limited, All Rights Reserved.

Moreover, in the present situation, returnmaximizing investors see very limited viable alternative investment opportunities,
as both advanced and emerging markets
remain in dire straits with vague promises
of recovery in the medium term. The risk
of significant loss remains undiversified
and omnipresent separating the financial
and real sectors (e.g. Knight, 1921; Keynes,
But while that may be accepted,
conventional analysis raises medium
term sustainability concerns of any
expansionary fiscal policy in the
current environment.
1936; Minsky, 1986; Dymski and Pollin,
1992). This leads to seemingly sporadic
movements in financial markets, affecting
larger society via a redefined fundamental uncertainty (Gevorkyan, 2011), holding
hostage a range of macroeconomic and
social processes.
For the less economically advanced countries, this is a make it or break it scenario. To counter severe macro-deterioration
a proactive fiscal policy is needed, aimed
at stimulating economic development, industrial diversification, and ultimately effective demand. But while that may be
accepted, conventional analysis raises medium term sustainability concerns of any
expansionary fiscal policy in the current
environment. Hence, comes in innovation
of application and use of non-traditional
funding sources to drive the fiscal effort.
A possible framework for analysis is captured in a fiscal net space, defined in
Gevorkyan (2011) that puts in one space
policy priorities (e.g. infrastructure, education spending or industrial policy) and
available alternative funding sources, other than taxation (e.g. wealth funds, remittances flows via migration bank; expatriate
financing-diaspora bond; and others). It is
implied in this analysis that the group of
countries affected, does not have the competitive means of ensuring sufficient financial flows in the international capital markets (most recently, one may add Greece,
Italy, and few others in the Eurozone to this
group of high-yield borrowers).
In this perspective innovative fiscal policy
is measured in terms of a range of funding
alternatives, access to resources and immediate policy actions for sustainable social development. In the immediate term,
this requires some ground work by the
state and establishment of the institutional base to deploy the new policies (a list of
proposals may include, for instance, an infrastructure fund, diaspora bonds, temporary labor migration mechanisms, a migra-

tion development bank, and others).

Finally, addressing the above problem of
fundamental uncertainty and guarding
against structural financial exposure to the
foreign sector, there seems to be benefit
in blending fiscal and monetary action. A
variety of attempts at such a blended approach have recently been tried by Brazil
and Russia, funded by injections of liquidity via international reserves into the banking system.
Similarly, earlier attempts to avoid or mitigate wide-spread banking crises were carried out by the U.S., U.K. and the Euro-zone
most recently. So far these actions have
helped preserve the larger banking systems from collapse and thwarted abrupt
domestic currency depreciation and outflow of foreign investments.
The concept of fiscal net allows an
easy visualization of what must be
done, but this requires a break from
dogmatic policy approaches to a
more relevant modern, innovative,
view of fiscal policy as a growth and
development stimulating tool in a
complex interlinked economy.
Emerging markets do have the means to
address the structural problems impeding
their development. This can be done with
attention to all the social implications of an
economic policy. The concept of fiscal net
allows an easy visualization of what must
be done, but this requires a break from
dogmatic policy approaches to a more relevant modern, innovative, view of fiscal
policy as a growth and development stimulating tool in a complex interlinked economy.
It is clear that an informed social policy,
which embodies both purely social and
more concrete economic and financial
measures, including fiscal policy, must be
founded in the theory of social totality. Indeed society in all of its complexity must
not be seen as the end result (to paraphrase Hegel, 1807).
It is dynamic and has evolved to its contemporary stage, and continues to evolve,
as a consequence of the sum of all individual actions that, at this individual level, are
dictated by correspondence to the evolution of social relations, or social institutional arrangements.
The lesson should be evident for all. In the
post-socialist world, social transformation
is still ongoing. Much is driven by inherited notions, but the potential role of innovative fiscal policy, applied full force, as a
non-restricting guide must not be underestimated.

4, Issue 1, Winter 2012

10 Volume
ISSN 2041-8469 (Online) www.anglohigher.com

References:
Dymski, G. and Pollin, R. 1992. Hyman
Minsky as Hedgehog: The Power of the
Wall Street Paradigm, in S. Fazzari and D.
Papadimitriou, eds., Financial Conditions
and Macroeconomic Performance: Essays
in Honor of Hyman P. Minsky, M.E.Sharpe:
27-62.
Gevorkyan, A.V. 2011. Innovative Fiscal Policy and Economic Development in Transition Economies. Oxford: Routledge,
http://www.routledge.com/books/details/9780415598071/
Hegel, G. W. F. 1977 [1807]. Phenomenology of Spirit. Reprint. Oxford University
Press.
Kalecki, M. 1937. The Principle of Increasing
Risk. Economica, Vol. 4(16):440-447.
Keynes, J.M. 1936 The General Theory of
Employment, Interest, and Money, Reprint.
New York, NY: Prometheus Books, 1997.
Knight, F. 1921. Risk, Uncertainty, and Profit. Boston: Hart, Schaffner & Marx; Houghton Mifflin Co.
Minsky, H. P. 1986. Stabilizing an Unstable
Economy. Yale University Press.

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