Having walked along the line where the Iron Curtain used to separate Czechoslovakia and West Germany, Law Professor John Drobak, J.D., marvels over the remaining pieces of destroyed fence and the tremendous political upheaval they represent. But nearly as dramatic for Drobak, an expert in economic regulation, has been the opportunity to observe personally the rapid economic transformation of the Czech Republic following the collapse of communism.
"The country has undergone incredible economic change since I first began teaching an executive MBA program for Czechs and Slovacs at the United States Business School in Prague in 1991," Drobak said. "There was so much pollution and so many dilapidated buildings, much like Europe after World War II. But as the Czechs moved from a command economy to a market system, construction scaffoldings were everywhere, and a strong sense of the need to rebuild and transform the city emerged. Prague is now a jewel with renovated spires adorning magnificent buildings on every block."
The early 1990s were a critical time for the Czechs, who, in addition to restoring their infrastructure, simultaneously restructured their fundamental political, economic and social institutions, Drobak observed.
Drobak originally team taught the MBA course with Douglass C. North, Ph.D., the Spencer T. Olin Professor in Arts and Sciences and co-winner of the 1993 Nobel Memorial Prize in Economic Science. North was recruited by the business school in Prague to assist during the country's transition. The course, which Drobak has continued to teach each spring with other economists, focuses on the role of institutions and the basic legal and economic principles of competitive markets.
"One of the premises of the course is that a good legal framework and other institutions matter for economic growth -- with the right incentives, the economy will do well," Drobak said.
Over the last seven years, Drobak, his wife, Mary, and their children, Matt, 11, and Carolyn, 8, have kept in touch with a number of Drobak's former students during the family's annual spring sojourns to the Czech Republic. Drobak has watched with pride as alumni of his course have excelled as entrepreneurs and in positions with various new banks, telecommunications companies and consumer products firms.
These former chemists, physicists and mathematicians turned business people have shared with Drobak some of the biggest adjustments faced by private businesses -- the loss of the automatic safety net provided under the communist system and the demands of the labor marketplace.
"I had a student tell me he was working so hard that he had little time for his family," Drobak said. "That would never have happened before. Under the former system, there was little incentive to work hard."
In 1995, Drobak's expertise in institutionalized regulation and emerging economies led to a consultant role on constitutional provisions to help the growth of markets for the new government in the Republic of Georgia.
A self-proclaimed "economist wannabe," Drobak is a firm believer in the role of institutions -- the "rules of the game" in a society -- in a market economy. While neoclassical economic theory attributes modern economic growth to such factors as natural resources, the labor pool, physical facilities, technology and know-how, Drobak stresses the importance of institutions in structuring human interaction and affecting transaction costs. While these institutions can range from informal norms of behavior and business conventions to formalized codes of conduct, Drobak believes the most important formal institutions are legal ones.
Clear, transparent laws -- governing private commercial transactions and property rights, constraining the government's power to extract wealth, providing a criminal code and allowing for fair adjudication -- help markets become more efficient, Drobak said.
The insights Drobak has shared in Central Europe relate to his principle research interest -- economic regulation. Along with North and Lee Benham, Ph.D., professor of economics in Arts and Sciences, Drobak is one of the founders of the International Society for New Institutional Economics.
Currently, Drobak is working on a book dealing with the legal foundation for economic growth. Also forthcoming are essays on the role of legal institutions in economics and how changes in the law affect economic analysis.
Recently, Drobak teamed up with John V. Nye, Ph.D., associate professor of economics, to co-edit "Frontiers of the New Institutional Economics." The book includes Drobak's chapter on Credible Commitment in the United States -- Substantive and Structural Limits on the Avoidance of Public Debt. Additionally, a recent article by Drobak deals with the federal government's "credible commitment" to the preservation of slavery before the Civil War.
In yet another project, Drobak and Ronald S. Indeck, Ph.D., professor of electrical engineering in the School of Engineering and Applied Science and director of the University's Magnetics and Information Science Center, are in the second year of a two-year research project funded by a $275,000 grant from the National Science Foundation. Drawing upon theories from new institutional economics and cognitive science, Drobak and Indeck are studying technological innovation in the computer industry related to magnetic disk drives.
The project is a natural for Drobak, who received a bachelor of science degree in both electrical engineering and in management science from the Massachusetts Institute of Technology in 1970. Having also taken a number of undergraduate courses in economics, Drobak then found his interests reinforced at Stanford University School of Law, where some of his professors were beginning to apply economic analysis to legal problems. He received a law degree in 1973 from Stanford, where he was on the Stanford Law Review.
He clerked for a year on the California Court of Appeal and then practiced primarily corporate law at a New Haven, Conn., firm. In 1979, Drobak joined the Washington University law faculty. A fellow of the University's Center in Political Economy since 1988 and the Business, Law and Economics Center since 1993, Drobak also has held appointments at the John M. Olin School of Business and currently teaches in the Department of Economics.
Additionally, Drobak has served in a variety of administrative positions and on numerous School of Law and University committees. He was associate dean of the law school from 1986 to 1990 and currently is chair of the Faculty Senate Council. He was council chair in 1992-93 and has been on the council's Executive Committee and constitutional drafting committee.
Although a natural leader and team member, Drobak said his first love is teaching -- whether it's explaining the rules of the legal game through his first-year course on civil procedure or delving into the finer points of antitrust law and economic regulation. His passion and skill in teaching are not lost on the students at the law school, who have three times voted him "Teacher of the Year."
Drobak's long-standing partnership with North has been a highlight of his teaching career. For the last 10 years, Drobak and North have team taught at the University a more in-depth version of the course they offered in Prague. Their "Theory of Property Rights" course is open to both law and economics students.
North said their areas of expertise and their teaching styles naturally complement one another.
"John is a wonderful teacher," North said. "The way he interrogates the class members is very impressive. He is polite and gentle with them, but he gets them to pay a lot of attention. The students know not to come to class unprepared. They say in their evaluations that it's one of the hardest courses they have ever had, but that does not deter them -- we have a waiting list every year."
Junior Victor Resnick, who took the class recently, said Drobak and North presented the material in an exciting, thought-provoking manner. Of Drobak, Resnick added: "He really made you feel that whatever your opinion was, there was something valid in what you had to say. He was very good at taking what people said and linking it to his points."
"He used the Socratic method in a way that challenged people but also was very encouraging. You knew that when you answered, he wasn't going to lambaste you but would guide you through the process of learning how to think like a lawyer and spot legal issues. His enthusiasm for the law was contagious, making him a popular professor and one of my favorites."
Antitrust lawsuits consistently are making headlines, and Drobak expresses a wry appreciation for the ongoing Microsoft litigation, which keeps his classes current. The deregulation of pay telephones, the city of St. Louis' antitrust suit over the Rams football team and the Boeing/McDonnell Douglas merger all have found their way into his classroom.
Above all, Drobak said he would like his students to keep an open mind. "I try to teach my students to be precise and analytical, but also to be skeptical," he said. "I would like them to learn about the law or economics, but I try to keep the focus on their own analysis. Those skills will pay off a lot more in the long run."
-- Ann Nicholson
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