Governments should support the establishment of research centres

In the EU, a significant number of existing high‑level research centres focus on empirical studies of issues of public economic interest. Such centres aim to support, in a practical way, the competent bodies of the EU and national governments in the formulation of economic and social policies.

The existence of such structures forms an essential component of an evidence‑based decision‑making framework, especially due to the growing complexity of economic challenges- ranging from demographic shifts to technological transformation – that has further increased the need for robust analytical capacity within public institutions.

As a consequence, the role of research centres has expanded in recent years beyond traditional macroeconomic analysis to include work that integrates economics with social sciences, data science and environmental studies.

One such entity in Cyprus is the Centre for Economic Research, which operates within the framework of the University of Cyprus and is utilized by various government ministries and departments for the provision of expert advice on contemporary economic and social issues.

At a recent conference, various studies conducted by the centre, following assignments by the government, were presented.

Examples of such studies include an analysis of the impact of the Cyprus Recovery and Resilience Program on growth and employment, tax reform, climate change, the contribution of tourism to the economy and the evolution of labour productivity.

These studies demonstrate the breadth of policy areas in which scientific input is essential, particularly in small and open economies such as Cyprus, where external shocks can have disproportionate effects.

Moreover, the centre’s work highlights the importance of long‑term strategic planning, as many of the issues examined, such as productivity trends and climate‑related risks, require sustained monitoring and continuous policy adaptation.

Formulating government policies based on scientific studies is a best practice, which should be further enhanced through the promotion of the establishment of high‑quality research centres.

Important preconditions for the effective functioning of such centres include: staffing with highly qualified scientific personnel, co‑operation with other domestic and international academic institutions and research centres, facilitation of access to the required data by the statistical services, government institutions and private organisations and development of modern digital infrastructure that enables secure data sharing and advanced analytical work, including the use of big data and artificial intelligence tools.

An additional essential element is the dissemination of research outcomes to the wider public, since transparency enhances citizen trust and facilitates public debate on important policy issues. Public communication also helps strengthen democratic accountability and counter misinformation, provided complex economic issues are explained in a clear and accessible manner.

The scientific support of government decision‑making should not replace political consultation with political parties and stakeholders; on the contrary, it provides support by developing alternative scenarios and objectively analysing the macroeconomic and social impacts of government policies.

In this way, the risk of ad hoc decisions based on short‑term perspectives and/or pressures from organised groups, which do not take into account the long‑term interests of society, is limited.

Furthermore, structured scientific input allows policymakers to evaluate trade‑offs more effectively, particularly in areas where policy choices involve distributional consequences or long‑term fiscal commitments. By presenting evidence‑based projections and sensitivity analyses, research centres can help ensure that public debate is grounded in facts rather than inferences.

Governments should support the establishment of research centres, both of a general and specialised nature. In this respect, supportive policy measures include: establishing a legal and institutional framework, under the auspices of the competent deputy ministry, that safeguards independent operation and determines minimum quality criteria for the establishment of such research centres, in line with best EU practices, enhancing the practice of assigning policy‑related studies to research centres, setting up funding mechanisms that cover part of the centres’ budgets, with transparent and objective criteria and procedures, and encouraging complementary funding from competitive international programs and private organisations.

Additional measures may include the creation of national research networks, the promotion of joint projects with European institutions and the development of long‑term strategic research agendas aligned with national priorities.

Based on international best practices, it is crucial that governments cover only part of the total funding, thus maintaining incentives for research centres to seek additional financing resources and avoiding the establishment of research centres excessively dependent on the state.

This balanced funding model also promotes innovation, as centres are encouraged to pursue competitive grants, collaborate with industry where appropriate and continuously improve the quality of their research output.