ECU'nomist issue 2 by Economie Combinatie Utrecht 1992

Economics of the Kibbutz

The ECU’nomist

Spotlight: Stephanie Rosenkraz and Sergei Hoxha Ozymandias’ Russia Economics of Higher Education U.S.E. Academy: Erwin Bulte on Development

February 2015, YEAR 24, ISSUE 2

Letter from the Editor Dear fellow U.S.E. students, I hope you have all enjoyed the first edition of the ECU’nomist for this academic year. The team put a lot of time and effort to provide interesting and relevant articles for you and ensure that your reading experience is as pleasurable as possible. We are almost halfway done with the current academic year and for some of us we may have to step up our gears, while others are pretty much satisfied with how they’re doing. Nonetheless, for this second issue, the ECU’nomist has come up with more interesting reads that you hopefully find valuable. Without realising, we are already in the year 2015, in other words, time sure has passed! I caught myself writing 2013 in my notebook towards the end of 2014 when we are about to enter 2015. I don’t want to say I might have been stuck in the past, but maybe for that one day my mind actually might have lingered back to when I first started university. But this is no time to dawdle, whether in the past or present, because we have to focus on the future that is coming much quicker than we will ever anticipate. With that said, let me first bring your attention to Stephanie Rosenkranz and Sergei Hoxha who are the winners of this year’s U.S.E’s Outstanding Teacher Award and Teacher Talent Award, respectively. The ECU’nomist would like to express our sincerest appreciations to both these winners for their hard work and dedication. On the topic of future endeavours, in her interview, Stephanie gives some tips on what we can do to search for thesis ideas, this can prove to be highly useful for third years who are about to delve right into their bachelor theses in a few months’ time, while second or first year students can start to think ahead from now on. Sergei on the other hand has plenty to say about what we could potentially be interested in for our future career. As someone who also graduated from U.S.E, there are many things he can relate to us with, so be sure to read his interview with the ECU’nomist. Revolving on the theme of markets, David Ortan writes about the economics of Kibbutz, the Jewish village settlement first appearing in Ottoman Palestine in 1909. As with every issue we aim to include an interview with a working professional in a certain industry. We unfortunately were not able to do so for this particular issue due to the unavailability of the person we were meant to interview. To make up for it, Filippo Ricci writes about the latest Russian Bubble Burst. As for the U.S.E. Academy evenings, in this issue I wrote about Professor Erwin Bulte’s lecture on development economics. I am also happy to say that Mithra Madhavan is back on board and she writes an article about her exchange in Singapore. I used to live in Singapore myself and I can say that Singapore truly is a place with a fusion of many cultures and if you are interested to do an exchange there, learn from Mithra’s experience. In addition, we have two guest articles to include in this issue. Firstly, Vladislav Lyadkov writes about the economics of higher education, with special attention to the conditions in U.K. Secondly, Byung Hun Kim writes about how one makes money by just sitting in front of one’s own monitor, in fact, this is exactly how YouTubers make money, which will be the main focus of Byung Hun’s article. Last but not least, Dea Tusha will also contribute an article for this issue. Dea is a U.S.E. master student who also used to be a member of the Editorial Committee. In this issue she writes about the causes of the falling oil prices and its connection to market demand and political agendas. We still welcome freelancers to write for our next issues and on that note, we hope you enjoy the articles in this issue. Happy reading! Sincerely,

Annette Aprilana Chairman of the Editorial Committee 2014-2015

Letter from the Board

Dear Reader, The first couple of weeks of 2015 are over and the board hopes you made a good start to the new year. It’s time to think about your new year’s resolutions again. Did you manage to fulfil them so far? The board has only one big new year’s resolution, which involves making all the coming activities a big success! Fortunately, the few activities we had so far lived up to this. Both the first party of the year as well as the “speednetworking with alumni” were a success, and the board will try its best to continue this new year’s resolution in the coming six months. We are beginning period three. Half way through this academic year already! Time flies when you are having fun. And that is exactly how the ECU’92 board feels about these past months. So many fun and interesting activities were organised by you as ECU’92 members. Examples are the trip to Prague, the Career Day, an InHouseDay and some awesome parties. The board enjoyed your company and input for all these activities and would like to thank you for your contribution. It’s good to know that we have so many more activities to come. We will start period 3 of course with our monthly B.O.M.B., followed by the conference in February. In March ECU’92 will celebrate its 23rd birthday and in April the Study Trip will take place, enough days and evenings to look forward to. The board wishes you good luck with all the studying that is coming in period 3. And if you ever feel in need for a small break, stop by our room in Descartes and we will serve you coffee or tea made with love. Don’t forget that from 2015 onwards, every Wednesday from 12.30 till 13.30 it’s coffee hour in the ECU’92 room! Lots of coffee, tea and free cookies! The only thing you will have to bring is some nice stories. See you soon at one of ECU’92’s activities or at the ECU’92 room!

Rian van Groningen Chairman of the Board

Table of Contents

Economics of Kibbutz

Professor Stephanie Rosenkranz

Between Socialism and Zionism Winner of the Outstanding Teacher Award

Sergei Hoxha

Ozymandias’ Russia

Professor Erwin Bulte on Development

Exchange Abroad

Economics of Higher Education

It’s all About the Oil

Youtube Commentary

Buitex Goes to Prague!

Winner of the Teacher Talent Award

The empire collapses

The African Forest Edge

Mithra’s take on Singapore

A Case of the United Kingdom

Market Demand and Political Agendas Just a video on Youtube?

Fun times with the Activities Committee

The ECU’nomist is published every quarter online, as well as printed in a circulation of 500 for members, patrons and external contacts of ECU’92 Annette Aprilana | David Ortan | Filippo Ricci | Ronja Giesen | Mithra Madhavan Study Association ECU’92 Campusplein Utrecht T 030-2539680

www.ecu92.nl editorial2@ecu92.nl Published by Issuu

The economics of Kibbutz: between socialism and zionism By David OrČ&#x203A;an

The kibbutz (meaning in Hebrew

â&#x20AC;&#x153;communal settlementâ&#x20AC;?) is an institution which according to common wisdom employed in economics is deemed to fail. With common ownership of assets, equal sharing of land products and other collectivistic forms of property rights, this type of arrangement should be suffocated by problems of asymmetric information and in time become unworkable. However, this has not been the story of the kibbutzim. They served the basic needs of their inhabitants (things like food, shelter, education), were relatively easy to defend, which given the conditions of the Jewish settlers in these days was very important and contributed towards a greater goal, the creation of the state of Israel.

The first kibbutz appeared in what was then Ottoman Palestine, in 1909, a land with difficult geographical and physical conditions: a curious combination of desert and marshes. This form of rural settlement was part of the bigger plan of the Zionist movement to reclaim the historical Jewish lands of Palestine in order to create a Jewish state there. The land had been purchased using Jewish National Fund money and that is how the first kibbutzim appeared. Later on, under British Mandate Palestine of post-World War I, the kibbutzim, in addition to providing food and shelter for their communities, started to play a military role as well, being a stronghold for the Jews in the fights between them and the Arabs. Many members of the Jewish resistance

movement found shelter inside kibbutzim. They also provided temporary accommodation for the newly arrived Jews from Europe and elsewhere, making sure that the process of integration was done in a reasonable manner. The number of kibbutzim has greatly grown, reaching 214 in 1950 (one year after the creation of Israel) and sheltering over 67,000 people. Today, more than 100,000 live in these settlements. However, their importance has diminished mainly because of the development of urban settlements and the fact that the demand for them has decreased, Israel being now a modern economy, with well-diversified industries and a high standard of living.

Each kibbutz is organized in a similar fashion. It includes a residential area with homes, dining hall, library, school, medical facilities etc. and the agricultural fields. The more general and important issues faced by the kibbutz are decided upon by a general assembly, which is composed of all the members of the kibbutz. The more trivial matters like housing, day to day finance of different activities, education are decided by an elected council. This simple and democratic form of organisation works mainly because it is rarely the case that the kibbutz is the home of a large community (most of them do not have more than 1000 inhabitants). The idea of the kibbutz has, as one might already notice from the above mentioned, been a combination of Socialism and Zionism. On the one hand, common ownership of the means of production is still one of its main characteristics. On the other hand, the end goal was the creation of a Jewish state. Addressing the first characteristic, one can say that not only the form of ownership was very socialistic, but the whole work ethic was deeply left leaning, with no special status attached to any particular kind of job. However, one may wonder what else is there that has made it work for so long. Of course that at the very beginning what prevented highly capable people from leaving the kibbutz was the fact that things outside of it were very bad (very few economic opportuni-

ties) and the rule that once one left, one would lose all shares in the kibbutz itself. However, this still does not explain why the kibbutz worked and the Soviet style collective farms of Eastern Europe did not. The explanation must lie in the fact that the whole kibbutz concept is based on trust, which is there due to a relatively small and homogeneous community, with a common goal that has guided the people living there for most of its history: to create a land for all Jews and to improve their material and spiritual conditions, after centuries of anti-Semitism. This brings us to the second characteristic, the Zionist feature. We can see that after the stabilization of the land of Israel, the importance of the kibbutz decreased. This is partly due to diversification of economic opportunities, but also because the target of a Jewish state had been accomplished and individualism has replaced collective goals and actions. In a property rights system which favoured market failures in the form of both moral hazard and adverse selection, it was trust due to a common goal that made the kibbutzim quite successful. Although it contained a powerful Zionist feature, the concept of the kibbutz has never been close to the Judaic religion. Amos Oz wrote in his book “Under this Blazing Light” that the people of the kibbutz “lost their religious faith and abandoned the religious commandments but they had not given up their devotion

and drive and their thirst for the absolute”. Hence, the energy behind it was of an entirely secular manner, but it kept the determination of a religious movement. Besides the secular feature, which ran against some Jews’ strong beliefs, the kibbutz also deprived people’s lives of the very basics of privacy. This is indeed a disadvantage of a truly collective property, where in order to avoid free riding, monitoring has to be strong. And some did not like that either. Moreover, once the goals of the Zionists had been accomplished, what was left from the idea of the kibbutz, namely the socialist part, proved to be insufficient and dry. Again, quoting Amos Oz: “Life’ burst through with its infinite complexity that shatters the most acute and rounded and all-encompassing of ideologies.” The kibbutz life is one of the founding myths of Israel. It encompasses some of the very strong ideas of humanity: equality and statehood. From an economic point of view, it proved to be an efficient institution in the times prior to the creation of Israel and immediately afterwards. However, once things got on their way with the economy and the Israeli society progressed, the kibbutz proved its weaknesses and lost its importance. Today, most kibbutzim were either modernized and resemble very much modern farms or they were kept in place just because they remember the Israelis of their past struggles and efforts.

U.S.E.’s Superstar: Stephanie Rosenkranz By Annette Aprilana

disciplines. Throughout the years we have become more successful in doing that. This is not a weaker form of economics but it is economics plus something on top. It is also a challenge to be known as such. I think in the beginning it was considered more as something inferior, while by now we managed to make sure that it’s something superior to what we can get elsewhere.

Every year, U.S.E. students vote for

their favourite teachers to win the Outstanding Teacher and Teacher Talent Awards. This year, the Outstanding Teacher Award goes to the dedicated Professor Stephanie Rosenkranz. The ECU’nomist has prepared a special interview with Stephanie Rosenkranz to get to know her better and talk to her about her work and research. Not only does she enlighten us with how U.S.E. develops its courses with respect to the future trend of economics, but she also gives highly valuable advice! Could you tell us about your professional background? I did my PhD in Berlin as a member of one of the first graduate programs at the time in applied microeconomics. I then moved to Kellogg University, which is part of the Northwestern University in Chicago where I spent a year in postdoc. After that I moved to Bonn University where I did my Habilitation, which is kind of a second PhD thesis you have to write in Germany if you want to apply for professorship. When I was about to finish that, I saw the job openings here in Utrecht. At the time

the faculty was just built up from scratch. I got the position here first as an associate professor and then about three or four years later as a full time professor. How much freedom do you have in tailoring the microeconomics courses you teach? We agree as a faculty on some basic things like there should be components of other disciplines in the courses. I said that for microeconomics it makes sense to look at psychology and sociology, at least if I’m teaching the courses. Once we agreed on this niche, I had all the freedom to look into all those aspects from the other disciplines that I find most relevant. What makes the U.S.E. multidisciplinary approach unique in the courses taught? The challenging aspect if you want to do multidisciplinary economics is to not substitute important things in economics by offering something from another discipline. Rather, it is to manage to provide a solid economics education and then integrate aspects form other

In class, you mention that it will only be a matter of time until the traditional economics method is further integrated with methods coming from behavioural economics, is this the trend around which U.S.E. aims to develop its courses? I think this is a tendency that is present in economics. Economics is a social science with a lot of links to other disciplines. I see that the boundaries within the social sciences are getting more vague, which they have been for some time. Some 200 years ago they were just social sciences and then they split up into several disciplines. Maybe now we are in a process that converges these disciplines back into one large social science. The challenge will remain to emphasize and incorporate in all courses the fact that it is not a weak form of economics. It is to really emphasise and make sure this is also what we do in every course. Make sure the standards are high and add something to it. This only works if we have students that are also to some extent convinced that this is useful because it will require more effort from every student. I’m very hopeful that by being better at shaping our profile, we attract students who are willing to put in more because of the profiles. If someone who is just vaguely interested in economics comes here and expects to have a more laidback attitude, then such a student might become disappointed. I think you have to put in more here (in U.S.E.) to make the links to be open to the discussions. Don’t just open the textbooks, but also read the

Interview articles and make connections between the contents, because these things are not yet in the textbook. What is your latest research on? Ah, very interesting, there are two things. At the moment I’m working on how important the regarding preferences are in understanding everyday outcomes or decision making and I’m doing this together with Bastian and a higher PhD student of mine as well as a colleague form Nijmegen. We are specifically looking at fairness concerns because there is a debate in the literature where some authors say we have to consider fairness concerns as being the driving force in interaction. So we are trying to put this into a theoretical model, which we then test in the laboratory, for which we find evidence for marginal fairness theory. The other project I’m working on is putting up an experimental platform that takes experiments out of the laboratory. This platform enables people to participate in an experiment online where one will be paid as in the lab too. You have to know to what extent the population online is different from the population offline. I think it is a huge step forward into the direction of more valid conclusions from experimental economics. We are now testing it rigorously and have been investing and working on

it together with computer scientists in India. We are really in the last stage of the project that has lasted since summer 2012, so we’re almost there.

specific market, that specific decision making, that specific intervention in the government – why do they do that, does it make sense, can I understand it?

The challenge will remain to emphasize and incorporate in all courses the fact that multidisciplinary economics is not a weak form of economics

What is your response to being voted as the winner of U.S.E’s outstanding teacher award? *Chuckles* I’m very happy because I worked so hard last period that I became frustrated. At the end of the course you realise you could’ve done so many things better even if you put in so much time. I realise next year I still have to work harder on many aspects because they weren’t yet ideal. After investing so much time, it feels really good to receive some appreciation for what you did. This award really came at the right moment and now I am so happy that at least they recognise that I really mean it well.

How can one go about searching for theses ideas? The first way to approach this is to look at discussion paper series. Look at the programs of the latest conferences where economists meet, such as the American Economics Association meeting and the European Economics Association meeting. In the programs you see the research at the frontier, the questions people are working on at the moment. The other way to go is to observe the real world. Look into what is going on in this

Finally, do you have anything to say to U.S.E. students about their studies or future endeavours? You should really try to find something in this study that you are passionate about. It doesn’t need to be a big thing, but something you’re passionate about because then you can excel in it. You can go the extra mile it takes to convince others that you are the one they want for the job.

Interview with Sergei Hoxha By Annette Aprilana

Just before the Christmas break, I got to interview Sergei Hoxha, this year’s winner of the Teacher Talent Award. Sergei is not only a talented lecturer, but he is also a highly supportive and encouraging teacher. We sat down in Adam Smith for a small chat and he shared with me what goes on in his mind when he teaches. Read on to find out more about him and what he has to say about making the most of one’s studies here. Once again, a great thank you to Sergei and congratulations for winning the award.

Could you tell us about your professional background? I came to Utrecht about 8 years ago to start my bachelor’s degree and I was part of the Honours Programme too. In 2011 I started the research Masters with only 8 other people. Then in my second year I was offered to be a part-time student assistant teaching mathematics and microeconomics. I went from part-time to full-time and that’s what I’m doing right now. I started my career in Utrecht and this is my very first proper job working full time. What was the deciding factor that

made you choose to study in U.S.E? It was quite an interesting approach. I had the choice to go to Fudan in Shanghai, one of the best banking schools in the world. I was also financially supported from the government of China there. However, the choice to come to Utrecht was for three reasons. The first is that it is very close to home. The second is that they offered me a scholarship and thirdly, it was Utrecht in the Netherlands, which was quite highly ranked in Europe. So I thought, all right, let’s go to the west and see how things work out. Upon graduation, was there ever a debate between the choice to work in the private sector or plunge into the world of academia? I knew that I was going to stay in academia. But I did not know what position I’d have, whether it is to take a PhD or something else. I delayed my choice to follow a PhD, although I tried here and there in several cases. In the end it didn’t really work out the way I wanted it to in terms of matching. So right now at this very moment, I’m probably going to leave academia very soon – for some time. It’s basically to give myself a cer-

tain challenge in the outside world since I’ve been within the academic setting for a while. I’m looking at the banking sector and also at governmental agencies in the Netherlands that might be interesting. Last year you wrote for the ECU’nomist about your research on Digital Crowdfunding, how is the research coming along now? At this very moment I’m supervising a bachelor thesis written by Lulu, a student of mine and she’s also determining the effects of what makes crowdfunding projects successful. I’m still very keen on knowing this because it’s such a new topic to realise what there is to be said about it. Unfortunately, my own research has been going on and off for a year due to the time constraints. But the research that I’m doing with Lulu right now is going in the right direction. I am basically looking at what attracts bankers in a crowdfunding platform to enable them to invest in certain projects. What kind of student makes you proud? I like very active students. During the past period or so I’ve been a bit demoti-

Interview

vated here and there because a few of my students have just been staring and that just is not my cup of tea. I like students that keep notes and try to be engaged intellectually in the conversation and say something extra to what we’re doing. It’s a learning and an educating environment. It’s not just you knowing what I say, write it down and them remember it for the exam. That’s not how academia works, according to me. Any higher institution should basically trigger knowledge for the student to be able to say more than what the teacher says. It’s a public debate. What’s the toughest thing about being a tutor/junior lecturer? *Chuckles* I’m not sure, I have to think more about it. Back when I first started teaching, I felt like I was shivering in front of the class because I had 30 people waiting for me to have something to say. But then after some time I got acquainted with them and I got to know them better. Suddenly there’s a crowd in front of me and they’re waiting for something more to know so that’s what makes it exciting. I really enjoy my job but I don’t keep well with administration work. I try to

be very thorough when I assess students’ works but it’s a lot of work to do. When we’re marking exams and grading papers, there’s basically no free day. You have to be very thorough in where the student went wrong. What is your response to being voted as the winner of U.S.E’s teacher talent award? I was super thrilled, I was very happy. I guess there’s no better reward for a young professional who just started his career. When I chose to work for U.S.E. it was not just to have a certain transitory position until I find my own career path. It was something that I really liked doing even since my second year of research masters and it paid off in terms of my work. I’m quite sure that the list of teachers which were next to me are much more highly qualified and they deserve it as much as I do, yet it made me happy that students actually voted me. Finally, do you have any advice for students about their studies and future career? When I was a student, I always thought that I had the time to follow a certain

plan that was coming in the future. Then I realised that the plan was already left behind because I was pushing it into the future. It’s never too late to have a certain plan in your head or to even sketch on what you want to do, and aligning it with your desires is crucial too. Because if you do something you don’t like, then you’re probably going to hate it forever. Align your plans with your desires and invest all of your energy into doing it. So start thinking right now on what you want to invest yourself in and where you see your strengths being accelerated. A signal of your strength could be how passionate you are about a specific course, something that you understand quite intuitively. That’s how I got to know that I was more into microeconomics and finance. Another good signal could be finding an internship and realising what your strengths in that specific job are. It’s always a trial and error process. No one knows in the very beginning when starting to study economics whether economics is for him or not. It’s just a language of analysis right? It doesn’t necessarily have to be a very specific clear-cut plan but it should be a designed sketch in your mind of what it could be.

Ozymandias’ Russia By Filippo Ricci

A lot has happened in the past year. On March 18th, the Russian Federation and separatist Crimean government signed its treaty of accession. These events challenged our notions of sovereignty, similar to the US’ 2003 Iraq invasion. Sanctions ensued for the former, and now at the dawn of a New Year, we start to see the consequences of this Russian involvement. It’s a cold winter and Russia’s currency, the rouble, is falling alongside its economic prospects. The country’s economy is migrating towards a recession and its ability to provide austerity measures is being questioned. Who are the real culprits of this Russian financial crisis? Together we’ll explore the status quo and the rusty nuts and bolts which seem to be creating this disequilibrium.

Amidst the desperation caused by the weakening rouble, the Central Bank raised the interest rate to a soaring 17% (from a previous 10.5%). The rouble responded by sinking even further until its value literally halved and consequentially, the cost of imports doubled. And while this isn’t due only to these infamous Western sanctions, it does seem like Putin got burned: the Russian Federation will not get away with the annexation of the Crimean peninsula. Unfortunately, it’s not only our friend Vladimir who will carry this burden, Russian corporations and most importantly its people are the ones who carry the weight. A relevant example would be our Russian peers enrolled here at U.S.E. who will probably end up paying almost twice as much for our Bachelor programme. Many Russians took mortgages in US dollars, doubling their repayments. It’s a cold, dry winter. Russian gas-giant Gazprom stated that it would reduce up to 25% of its workers in an effort to reduce costs. Many Russian corporations took debt from Russian institutions; it is estimated that these companies need to repay a total of $650bn, but will probably be unable to due to the current international market. How will they

refinance their debt? It’s been suggested that Putin would default on these loans as a response to the Western sanctions. How will Vladimir Putin fix the Russian economy and how will this impact the global markets? As we’ve learned in class, if we want to prevent a currency devaluation we have several options. In Russia’s case, the Central Bank started to buy back its circulating currency by using its reserve fund. This raises the interest rate and the economy should generally benefit from a now higher level of capital inflows; except, it didn’t work. There is clearly some dissonance between investors and the Russian capital market. But for how long will Russia be able to use its depleting reserves? Let’s talk about black gold; let’s talk oil. While the higher rate of exchange for the Rouble does mean a decrease in imports, we should also see a more or less equal increase in exports. Russia’s primary export is oil, and while 10 euros can once again be considered gas money, Russia’s not going to get very far with it. The falling oil prices can be attributed to increased US and OPEC production. While it seems that OPEC is following suit, it does make us question how long these oil producers will play this game. To put things into perspective, Dubai was the world’s best performing market in 2014. Following the reduction in oil prices, its market went down nearly 40%. Qatar and Saudi Arabia are also falling into this ‘bear market,’ in which their stocks are down 20% or more. The heart of this crisis however, is not only the result of the plunging oil prices. In fact Chile 1982, Mexico 1995, Indonesia 1998 and Argentina 2002 all once shared this problem. The crisis is the result of high dependence on foreign debt. The private sector borrows, but when the currency starts sinking, so does the ability to repay this debt (consider that these debts are denominated in the currency

of the lender). It’s not an uncommon mechanism and it shouldn’t be shrouded in mystery. A shock like a fall in exports in a case like this one is akin to taking down bearing walls—everything falls over. Exports fall, and our IS (goods market) curve shifts left, interest rates lower and so does the currency. This mechanism has been going more or less consistently since Summer 2014, as the rouble slowly fell until the bearing walls collapsed. But when did this happen to Russia? Historically, the way these countries stacked all this foreign debt typically happened when they needed to finance their trade deficits. Historically, the oil prices were generally high, and given that oil is a fairly inelastic commodity, this all worked very well for Russia, so far as to consistently having a trade surplus. So why borrow so much money and where is it? It all boils down to massive foreign asset accumulation. In one example, it is extremely wealthy Russians buying houses in Upper-East Manhattan. This is not only true for luxury residences (this is the most obvious one), but for all kinds of foreign assets. Meanwhile, on the other side of the pond we realize that all those assets have been accumulating debt in Russia. Whilst some elite does earn his or her wealth fair and square, kleptocracy seems to dominate the higher ranks of Putin’s capitalism. But is seems that in this game of Russian roulette, the bubble finally burst, and the responsible ones are a combination of government foreign intervention, capital accumulation and corruption. Russia needs to keep its foreign capital from fleeing the country, a task which seems insurmountable. Much like Ozymandias—an alternative name for the Egyptian pharaoh Ramesses II–our friend Putin is now left with little up his sleeve. And like Ozymandias, the fate of history and the ravages of time have also imposed their sanctions—all prominent men and the empires they build are impermanent and their legacies fated to decay and oblivion.

I met a traveller from an antique land Who said: “Two vast and trunkless legs of stone Stand in the desert. Near them, on the sand, Half sunk, a shatter’d visage lies, whose frown, And wrinkled lip, and sneer of cold command, Tell that its sculptor well those passions read Which yet survive, stamped on these lifeless things, The hand that mocked them and the heart that fed: And on the pedestal these words appear: ‘My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!’ Nothing beside remains. Round the decay Of that colossal wreck, boundless and bare The lone and level sands stretch far away.” Sonnet by Percy Bysshe Shelley 1818

Professor Erwin Bulte on Development: The African Forest Edge By Annette Aprilana

Example I: Corruption and Behaviour When it comes to proper implementation of institutions, one of the central matters is one’s integrity and behaviour. Corruption is seen as a key factor impeding improvement in developing countries and it is endogenous and difficult to measure. Bulte asks, “Why is corruption bad? Does it lower investment?” In order to answer this question, we need to know how to measure corruption. One common method is to measure perceived corruption, which is to literally ask people whether they think their country is corrupt or not.

Picture: Professor Erwin Bulte.

As we all have probably heard, institutions are crucial as a determinant for a country’s growth. With proper institutions, countries’ incomes are higher and similar directions follow suit with other economic indicators too. But what does it mean to have better institutions and how should we study them? This question is much like the chicken and egg problem, what comes first? Does a good institution spur the success of a country, or does a successful country stimulate good institutions?

On November 27th, Professor Erwin Bulte was the speaker for the third U.S.E. Academy event in 2014. Professor Bulte is the holder of Utrecht’s Chair “Institutions and Development” and on that evening, he specifically used his research, “Experimenting at the African Forest Edge”, as the theme for his talk about institutions and development. He presented three real-life scenarios for illustrating his message.

However, Bulte prefers “to measure corruption by what people do”. He used an agricultural development project in Liberia in order to develop a method to measure corruption. This field experiment involved Bulte’s team to visit a village and request a favour to store grain bags in the chief’s hut. The team of experimenters came back two days later to the same village to pick up the bags. The experimenters wanted to find out whether the chief took grains from the bags by weighing the bags before and after leaving them at the chief’s hut. Although there may be flaws in the experiment, it can be a better measure of corruption than through the method of perceived corruption. Putting the bag of grains is a temptation already for the chief, forcing him to be placed in a situation where he might be corrupt. Perhaps he had valid reasons to explain his actions because he knows best the needs of the people from his village. However, when the chief is corrupt, there are indeed lower investment levels. Example II: Community-driven Development Governance at the local level is crucial in fostering development. This includes the cooperation between a leader and the people in a village. However, some hin-

drances to sound development caused by poor governance can originate from the chief himself. Chiefs can have considerable autonomy and tend to be despots. Darian Acemoglu says that powerful chiefs are the worst and as a result the more powerful they are, the less investment takes place. The experiment was carried out with two groups being formed. The village chief led one group, while the other group’s leader was a household head that was randomly selected. They were each given about $600 and told to invest this money in something for the village. Bulte’s team carried out the experiment having a “chief as despot” perspective. What they surprisingly found out was that the chief’s behaviour was unlike what they hypothesised. One hypothesis example is as follows: chiefs care less about implementation and do a worse job in the investment project. This didn’t turn out to be the case as they in fact did a better job. What this example shows is that thinking that the chief will actually be more corrupt and care less about community-driv-

U.S.E Academy

Top left: Lively meetings where everyone was invited to participate. Even children could vote as you can see. Bottom right and bottom left: part of the villagers’ finished projects. Top right: “part of a greater, on-going research effort in the region. We look at many different things, in many different villages. This project: a focus on so-called FEC communities (< 1 mile from Gola forest edge)”. Movie poster: Sierra Leone as the poster child for blood diamonds.

en development is not always the case. Randomly selected household heads may not have enough information about the needs of the villagers and may not feel the responsibility of ensuring good quality work. Whereas it is the chief villager’s job to know exactly what goes on in the village and to know exactly the needs of the people. The chief may then invest in more appropriate and fitting projects. Example III: Local Institutions and Conflict The last example concerns internal conflict within the workings of a local institution. This has adverse effects on investment and project success. If in the process to earn more income for a village inefficient and corrupt practices impede its development, people will question whether there are additional reasons to care about local governance. It is the absence of well-established institutions that resulted in the civil war in Sierra Leone due to the diamonds conflict. This is more a reason to show that time and energy are not allocatively

spent on building proper institutions, but rather on dealing with the actual conflict. Are local governance and “grievances” truly a major determinant of the civil war in Sierra Leone? It is indeed the case if there is a problem with the local governance where power is abused. However, the degree of which this power is abused can explain the differences in local conflict intensity. Therefore, it is necessary to have well-established institutions to minimise conflict as much as possible. Bulte observed that in the villages he visited, the number of ruling families inversely affects the number of conflicts, controlling for other variables. To wit, these ruling families have a monopoly power that allows them to abuse local justice, only to accommodate their greed. This causes more reason for grievances that in turn lead to conflicts. The greed for the potential income received from extracting the diamonds in Sierra Leone hindered the establishment and the proper running of a local institution. This in turn limited investment in other more

essential and necessary infrastructures, thereby hampering development. After the above three examples, the main message to take away is that institutions matter, and this is true especially at a local level, where new institutions cannot be introduced without looking at the strengths and weaknesses of the old ones. Multidisciplinary experiments in the area of development economics can help design efficient institutions in which old and new norms, rules and forms of behaviour are being valued. It is necessary for a developing country to have institutions to lead it forward and have economic growth. However, it is also crucial that the institutions that bring a country forward are well established. In that respect, nudges can be more effective than imposing outside institutions that prove to be weak compared to the local ones. However, it also takes a mental revolution to rid one of corruption, selfishness and greed for the betterment of society. However, that is indeed easier said than done.

Semester abroad at By Mithra Madhavan

Singapore is the kind of city I call “a

bundle of cultural confusion” and, for the most part, I mean that in a good way. On the surface, to a student studying in Europe it could seem very “Asian” just by the look of the people. Dig only slightly beneath the surface and you will find that Singapore is a city that has created its own unique cultural mix. The country (read: city) has put languages of each of its minorities to the forefront, namely, English, Chinese, Malay and Tamil. Finding sources to learn any of these languages is extremely easy, both in educational institutions as well as areas in the city to practice speaking these languages to the appropriate people. Anyone who made an attempt to feel comfortable in this place, with a little bit of effort, should at least be able to adjust. With that being said, Singapore is not for everyone. Rather than whom exactly it is for, let me state whom I think this city isn’t for. It isn’t for someone looking for a vibrant city that never sleeps. It isn’t for someone who is looking for a stereotypical “Asian” experience (open

to interpretation). It isn’t for someone who wants to be thrown completely out of their comfort zone, because the truth is, Singapore is a very comfortable place for anyone with the financial means to support themselves. It isn’t for someone in pursuit of chaos to get away from the relatively organized and reliable Dutch way of life. I have heard complaints and compliments in equal measure about how organized Singapore is. Those that love it claim that it is convenient because transportation is cheap and reliable compared to their respective European counterparts, and safety is at all times guaranteed. Arguments for the kind of infrastructure Singapore has have invariably included the fact that it is so “controlled”. There are regulations for the most bizarre things, like chewing gum, drinking (anything, including water) in public, and using public electronic sockets (considered theft of electricity, yes). However, despite all of this, I felt at home in Singapore. Let’s get a little personal now. To me, Singapore was the “bundle of cultural confusion” that I, too,

am. Being born in India, having grown up there till I was 10, then living in China for a few years, and then moving to the Netherlands led to my adoption of the strangest mix of “Eastern” and “Western” qualities. I am one, no less than the other. Singapore was where I could get the best of all worlds I knew. Living in a place where both, the people of the country and I share a native language seemed like a far-fetched dream. However, Singapore allowed me this luxury. I realized that placing importance on language is crucial to feel “at home” somewhere. I could speak English, Tamil and Hindi in many places. Of course, I was also able to go back to the days in China and practice the Mandarin that I, once-upon-a-time, used to fluently speak. Moreover, as a young Indian girl, I wanted to make sure that where I went on exchange, it would be a relatively safe place where my freedom to go out at any time of the day wouldn’t be limited. It can easily be argued that Singapore is the closest to perfect safety that any place has come. So it should come as no surprise that my semester in Singapore was

Exchange a highly emotionally charged decision. This, by no means, implies that everyone who goes there has to have a similar background as me or want to get a similar experience as I did there. For an exchange student, the academic experience in the host university would also be an important decision point. The National University of Singapore (NUS) is regarded as Singapore’s best university and by speaking to local students, it is apparent that admission at NUS is extremely competitive, even for Singaporean standards. The competitive attitude among students is the first thing that one notices as a distinguishing factor. The grading is relative to the rest of the class, as opposed to here and most Dutch universities, where students get an absolute grade, largely unaffected by the rest of the class’ performance. The competitive attitude manifests itself in some confusing ways though. On the one hand, students are extremely hard working and dedicated to their academics, striving to achieve the best grades they possibly can, while also pursuing extra-curricular activities that build their career prospects. On the other hand, this competition is somewhat kept on the “down low” with little in-class participation. According to a local student in one of my classes, this is a mutual understanding that students have in order to refrain from “bringing each other down” through discussions, debates and criticisms. This mentality is one that I still was not able to get a grasp of. However, it is part of the package.

It was interesting to get a sense of why there is such a desire for one student to stay on top of everyone else, and I realized that this was largely because of Singapore’s meritocratic society. The political system places such high importance on education, and rightfully so, in ensuring that its people use education as a basic necessity for any lifestyle improvements. Also, income inequality in Singapore is one of the highest among ASEAN countries, and a large distinguishing factor between the two extremes is the level of education that one has the opportunity to pursue over another. Still, even among the highly educated, competition is so high that just getting “decent” grades is less than sufficient. Pursuing internships and other academic experiences is common practice for students, in attempt to distinguish themselves from the rest. This rat race that results is one that can be dangerous and destructive if not handled carefully. However, for an exchange student it can be extremely eye opening and also motivating. The environment is conducive to academic growth because there are highly motivated students pressuring each other to keep working hard, and there are the necessary academic resources in the form of guest lectures and networking events to support students that want to expand their knowledge beyond the limitations of the usual classroom. I wouldn’t be doing justice to my semester abroad if I didn’t mention the best part about all of it: travel. Singapore is in

the heart of South East Asia, making it very easy and affordable to travel to several neighbouring countries. I ended up travelling to Indonesia, Malaysia, Hong Kong, Cambodia, and Vietnam, with a few weekend trips back home to visit my family in India. One regret of mine is not having gone to Myanmar, whose tourism industry has only recently really opened up, meaning that it is still in its authentic, original self. An exchange student’s experience is definitely incomplete without travel. It makes for great bonding with the friends one makes abroad, with great food, beautiful landscapes, adventure and spontaneity. My experiences of Singapore included the cleanliness, Singlish, talkative cab drivers offering life advice, the friends I made, the places I travelled, the career lessons, the life lessons, great food, signature late nights at Clarke Quay bridge, and others, more than I can fit in a few pages. So to anyone looking for a great adventure that you will be able to tell your future grandchildren about, if possible, do try to do some basic soul searching to figure out what you are currently missing, where you would like to study, where you would like to travel and what kind of people you would like to meet. That way, the shortlist of possible true to the experiences you want to give yourself, while discovering many other things along the ride!

Economics of Higher Education A case of the United Kingdom By Vladislav Lyadkov

It is of no doubt to most of us that in

today’s world, a higher education (be it a college or a university) plays an important role in the lives of many students trying to make it to the top in their career. Not only are the HR managers scrupulously looking through educational backgrounds when deciding on whether to take you in for a job, but through first impressions, people around may also judge one’s intellectual capabilities, from where one graduated. Obtaining higher education is proven to substantially increase the level of your expected earnings, to increase your economic mobility (ability to improve your income status) and to improve your job prospects in general. A lot more can be said about the increasing importance of higher education in the modern society. However, a really important question, that has been paid close attention to recently, is the affordability of such an education. To be fair, worry amongst many is well-justified. The most recent example is English university fees rising to £9000 per year from £3290 in the year 2010, which signals an emerging problem of the affordability of education. The issue was hotly debated since November 2010, when the British Government accepted the £9000 tuition fee cap and continued in 2012 when, despite numerous student protests and strikes, the tuition fee cap was put in force. While not all English universities accepted charging a full fee of £9000, more than 50%, according to most experts, already will do so by the end of 2014. The universities that are not willing to charge the £9000 tuition fee justify their action due to fear of losing too many students, which would have a negative impact on their reputation. Relevant to the issue of more expensive education is the amount of funding offered by governments in an effort to make higher education still financially viable, despite rising tuition fees. In UK for example, students do not have to pay the higher fees straightaway. Instead,

students are given out a loan, which can be repaid upon completing his or her university studies and subsequently upon finding a well-paid job. Moreover, ever since the change in the tuition fees, extra financial assistance is offered to students from the low-income families. You might then expect that the UK and the EU students (to whom the rise in the tuition fees was applied) are not to be strongly affected by the imposition of higher fees. As numbers show, however, it seems that domicile and EU students are clearly the “losers” of the English educational reform. Many prospective domicile and EU students were discouraged to even consider enrolling in UK universities. Between 2011/12 and 2012/13, the number of enrolments of UK domicile students decreased by 8% from 1,740,070 to 1,597,440. Similarly, the number of all other EU students decreased by 7% from 105,185 to 97,925.

supporters of the education reform also express the opinion that the new system stimulates competition in the market for higher education The evident impact of higher tuition fees is further demonstrated by the first ever reduction in the total number of undergraduate students (enrolled in UK universities) in the last 15 years. In 2012 when the tuition fee cap was put into force, the number of undergraduate students fell by around 6.5% from 192,000

to 180,000. Not only did funding for students prove to be very hard to obtain, but the fear of having to face a loan also made many UK students turn away from their dream of pursuing a higher education. In an attempt to “dodge” the debt payments, some UK students also found it viable to continue their education in other countries. Whether it is “going Dutch” at Maastricht University or studying a business degree at New York University, such cases of acquiring an “ïnternational experience” became a lot more frequent. The number of UK students going abroad for their bachelor degree has risen by a total of 6.8% from 2012 to 2014. In the year 2014, within a frame of an educational intelligence research poll conducted by the British Council, 37% of UK students expressed their desire to continue their higher education abroad. The same figure for the year 2013 was only 20%. The giveaway lesson from these statistics is pretty clear: education in the UK for a good fraction of UK and EU students is no longer as affordable as before. After all, was the tuition fee cap a pretty reckless move for the British government to make or were there good reasons for it? In 2011, the UK governmental higher education funding (provided by the Ministry of Education) was significantly reduced for an overwhelming majority of British universities. A cut of the 12.6% in the teaching, research and building budget in comparison to the year 2010 amounted to 940 million British pounds! Hence, universities had to seek other ways to find extra funding. Rise in tuition fees was thus partially driven by the deteriorated financial state of the higher education situation in general. Another reason for imposing the tuition fee cap, according to the House of Commons and the UK government, is to further move the burden of paying

Guest Article

for education from taxpayers to students themselves. Taxpayers are already paying too much tax for many other purposes. The tuition fee cap is thus deemed as the effective way to reduce tax burdens. Finally, supporters of the education reform also express the opinion that the new system stimulates competition in the market for higher education, since UK universities will now have a certain degree of freedom at what prices (tuition fees) to charge for their services. To be more specific, the freedom of charging a university fee within a range of £3200 to £9000 would imply that the universities offering high quality education would charge a high fee and the lowquality universities would charge a low

fee. Hence, in essence, a tuition fee cap should become an effective signaling mechanism. Opponents of an education reform, however, consider this argument to be flawed. They claim that for the perfect competition to establish in the sphere of a UK higher education, a lot more conditions, other than the freedom of price-setting, must be met. To conclude, like with most other government reforms, there are once again “winners” and “losers”. Students are definitely to suffer from the tuition fee cap, while universities and taxpayers are to benefit. Is the tuition fee cap overall economically efficient? In the short-run, most probably yes: universities will restore their lost funding, while

taxpayers will enjoy paying lower taxes. In the long-run, however, the perverse macroeconomic effects of the tuition fee cap may start showing: lack of a welleducated force and, as a consequence, higher levels of unemployment combined with the need to expand the social welfare programs. The issue of the education affordability will thus always be a huge concern not only now, but also in the future. In the start of September 2014, the following headline appeared in Canadian newspapers, namely TorontoSun and CBC: “13% rise in university tuition fees expected over next four years”. The game is on!

It’s All About the Oil By Dea Tusha

all, because when whole countries are involved in the market, the consideration of political agendas is unavoidably part of the equation. Obviously, the ramifications of shocks in oil prices are just as large in both scale and scope. Studies show that post World War II, surges in oil prices have been linked to consequent economic recession. Meanwhile, history has taught us that oil shocks could lead to full blown economic crises.

One would have to try very hard to

overestimate the importance of oil in the world’s economy nowadays. It suffices to have a look around any living environment to understand how much society depends on it. From carrying out the most basic everyday tasks, like driving to work, to supplying energy for plants and laboratories, where state of the art innovation takes place, we have yet to find a more effective, widespread energy fuel. But more than a necessary substance, in economics oil has come to represent a very intriguing concept. The ups and downs of oil prices and their causes and consequences for the economy at large make the topic of oil and the industry built around it a great example of how markets and institutions function, or sometimes don’t. When it comes to the determinants of oil prices, the market forces at play remain supply and demand, but given the magnitude of the players (big oil companies and even countries) their interaction goes beyond textbook microeconomics. For example, due to their competition-eroding and thus consumer-harming nature, cartels are usually illegal. And yet, OPEC, the Organisation of Petroleum Exporting Countries, which represents thirteen oil producing countries and determines global oil supplies to a great extent, effectively making it a cartel, is not only legal, but its decisions are internationally recognized. But that is not

With these considerations in mind, the present fall in oil prices becomes both a looming prospect of more economic trouble to follow and an interesting, economic version of a “whodunit” – finding the culprits and the victims of the latest oil shock. Prices have been steadily falling since June 2014, reaching record lows of less than $50 per barrel in the first weeks of 2015, a phenomenon not witnessed since 2009. In all this, one could easily point out the usual suspects, a mismatch of demand and supply, of expectations and reality.

even within the opec, countries seem to be playing “oil price chicken” and thus, have not agreed on a common strategy

On the one hand, demand from importing countries, such as the European Union, Japan and China has fallen. This has come as a result of weak economic activity, as well as the gradual switch to other types of fuel. On the other hand, expecting higher levels of demand has led the exporting countries to provide excess supply, which so far does not seem to be withered by the resulting decrease in prices. Why has OPEC not intervened to cut supply and restore higher prices? It could be that the producing countries have chosen to endure lower prices in order to keep their market shares. One can also not rule out the option that deep-seated political “grudges” may be an additional factor. For example, Saudi Arabia, one of the biggest oil producers in the world could live through a period of lower prices (thanks in large part to its reserves), if increasing oil prices would benefit Iran, a rival in the region. Even within the OPEC, countries seem to be playing “oil price chicken” and thus, have not agreed on a common strategy yet. On a more “refreshing” note, the usual balance of powers in determining oil

Guest Article prices may be rocked in a more fundamental and permanent manner by the introduction of new technology. The game changers in this scenario are US shale companies, which have invested heavily in a new drilling technique, known as fracking. This involves the injection of high-pressured fluids into deep rock formations, which allows for the subsequent release of natural gas and oil. Still in its beginnings, the technique is quite expensive, which makes such low selling prices strictly prohibitive for the fracking companies. Indeed, they would be the most vulnerable and would have the hardest time surviving competition at such prices, which could be one of the major reasons why the rest of the incumbent countries are putting up with the price fall. Clearly, this technique is still inefficient and far from being perfected, as it may have long-lasting

negative effects on the environment. But despite these issues, the high level of investment in these companies could be a reflection of the marketsâ&#x20AC;&#x2122; belief that fracking is here to stay. And perhaps that would mean that the power plays in the oil industry as we now know them would change. Finally, no tale of markets and institutions would be complete without a welfare analysis of sorts. While falling oil prices could translate to cheaper car rides for the average consumer, that would be too simplistic of an analysis. Indeed a decrease in the price of fuel would help to stimulate a feeble, slowly recovering

economy by lowering production costs. This would be good news, especially for importing countries, such as the members of the European Union. But if there is anything worse than increasing oil prices, it is fluctuating ones. Certainly, not all OPEC countries are happy or even willing to continue like this. Already smaller members like Venezuela and Iran are pushing for price stabilization. But at what time or price level that will happen is uncertain and markets do not like uncertainty. And while experts are busy trying to work out how this scenario will play out, the rest of us have at least some food for thought on oil, markets and institutions.

View from the V&D building. Photo by Filippo Ricci

YouTube Commentary: Just a video on YouTube? By Byung Hun Kim

Have you ever dreamt of making money by just sitting in front of your monitor? Well, then you must want to become like PewDiePie. Never heard of him? He is a video game commentator who caused a sensation on YouTube. Since 15 August 2013, PewDiePie’s channel has become the most subscribed channel, now having more than 33million subscribers on his channel. After his success, more people are joining YouTube and making commentaries, hoping to become the next PewDiePie. But how did the market for YouTube commentaries start? And how do these commentators earn money? Before all the glam and fame, commentaries were not popular on YouTube. Rather, it started from “Let’s Play” videos, where video gamers uploaded their video game “walkthroughs.” Later on, as the “Let’s Play” became popular, these types of videos have made it to YouTube. However, back then, the commentators did not upload their videos for fame and money. Uploading the video commentary was rather a hobby ‘till YouTube has launched its partner program to let people get paid for their hobbies. Just a year after the launch, successful partners were earning six-figure incomes (The NY times, 2008).

Now, you may be wondering how the commentators receive their paychecks for uploading the videos on their channel. When the commentator’s video channel attains a sufficient amount of views and subscriptions, YouTube views the channel as profitable and tries to reach out to him or her to offer a partnership. Once the partnership has been arranged, YouTube places a number of advertisements on every video that has been uploaded by the members. From the number of views recorded on the placed advertisements, YouTube raises the funds and as a form of gratitude, the commentators receive part of the funds. From this, most YouTubers earn approximately $5,000 – $10,000 a year, while major YouTubers earn more than $1million a year. After YouTube became more mainstream in 2009, the community grew significantly in size. It produced popular online celebrities, also known as e-celebrities and the number of sponsors who found the potential in video commentary has also increased. Not only that, but the YouTube market has also become an alternative option for marketing. As the influence of YouTubers grew on teenage audience, brands such as the gaming industry and cosmetic industries, which aim their products mostly at teenagers started to use the leverage of the famous YouTubers. It became a unique way of reaching out to new audiences across

different nations with a low budget. Furthermore, it became the most effective and the cheapest way of grabbing the attentions of young audiences. Popular YouTube commentators receive products first hand from companies as an endorsement to attract consumers from purchasing the products before launching. In particular, the game making companies profited the most out of this. One of the most famous case is “Amnesia: Dark Descent.” “Amnesia: Dark Descent” is a survivor horror game, which gained its popularity as YouTubers brought it to light. Nowadays horror genre games became popular and easy to come across in stores, but before then, these types of games were not welcomed in video game markets. A small community that has started as a casual hobby has now become the most influential online community for the new generation. The success of this remarkable new type of entertainment is a continuing story as it has powerful influences on teenagers, threatening the traditional media. Unlike other types of media, all it takes to grow the channel is nothing more than good wit and the well connectedness of the trends and fans on the channel. With innovative ideas and contents they have officially become the new source of media. They are the reason why teenagers never watch TV anymore. These talented wisecrackers who are leading the young generation are the YOUTUBERS.

ECU’92 Buitex Goes to Prague! By Willemijn Bruus

On Thursday night the 27th of November it all started: ECU’92’s Buitex went to Prague! Following the three months of preparation for this weekend, the Activities Committee was completely prepared for three days of culture, fun and partying. After a bus drive of almost twelve hours, we arrived at our hostel. As all of you who have been to Prague know, it is a very beautiful city, so a city tour was our very first activity. We visited the famous Charles Bridge and as rumour has it: if you make a wish near the “Crucifix Statue” which was situated halfway along the bridge, it will come true. We gratefully took advantage of this tradition to make a wish, and wished for three amazing days. As we later discovered, this myth was indeed true, as we had the best three days! We also saw the Jewish Cemetery and visited Old Town Square. The cold did not bother us too much as one of the participants came up with the following rule: whining to someone about the cold weather means buying a beer for the poor listener. In the end, lots of beers were bought.

In the evening we all had dinner together at a very fancy restaurant. It felt like we ended up at Hogwarts School of Witchcraft and Wizardry. Long tables were set up and we drank beer out of huge beer mugs. In the evening, it was obviously time to party. We went to Chapeau Rouge, a typical pub in Prague, with all 50 participants. If you would like to drink a lot of beer without spending too much money, Prague is your city. We were all very thankful for this and gladly drank a beer or two. Later on in the evening we went to Roxy, where the real party started. Lots of dance moves were tried out, and new love couples were formed. On Saturday, we visited Prague Castle, which is located on a hill. We enjoyed the beautiful view of Prague and saw the church and the changing of the guards. The most energetic participants climbed one of the towers, others visited the toy museum, and still others observed the St. Vitus Cathedral, walked through the Golden Lane or just simply enjoyed the Prague feeling while drinking some nice hot coffee.

Later that day some of us went to the Christmas market, which was located only a few meters away from the hostel. We heard Christmas carols and drank “gluhwein”. Most of the participants however, gladly made use of these couple of free hours by taking a nap to prepare for the second evening. At 22.00 we went to the famous club “Karlovy Lazne” also better known as the club with 5 floors. First we danced until the early hours. More detailed information can unfortunately not be given because: what happens in Prague, stays in Prague. What can be said though is that we showed Prague that Dutch students can definitely party. The next morning everyone looked great and there was absolutely no such thing as a lack of sleep. However, on our way back, it was a lot quieter than our bus drive on Thursday night. This probably had to do with the sad feeling of the end of what has been an amazing trip! Thanks to all the participants and especially to the Activities Committee, it was a “Buitex” to remember!

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