Productivity and Policy in Higher Education

Understanding and improving the performance of public higher education institutions is a matter of growing interest to university and government leaders. To this end, this article surveys dimensions of recent approaches to productivity measurement in higher education, illustrating trends, limitations and developments, and exemplifies these with reference to Australian universities. The article closes by discussing policy considerations that would help augment the design of policy, making comment on the implications for performance‐incentivised funding of higher education.     

Education production efficiency: Evidence from Brazilian universities

The purpose of this paper is to estimate the efficiency of higher education institutions in Brazil with emphasis on its determinants, taking particularly into account the relative efficiency of public and private institutions on the application of their resources. The availability of scores in standardized tests for Brazilian universities helps a lot with this task since they provide a widely accepted output measure. The difference between the scores of last-year and first-year students in ENADE is used to measure performance. There exists an entrance exam in Brazilian universities where they can screen out their students. Therefore we believe that students' characteristics should be considered a non-discretionary input and consequently explain the output. This specification implies that public institutions are more inefficient than private ones.     

Firms’ R&D Activity and Intensity and the University–Enterprise Partnerships

The interaction between universities and industry in areas concerned with science and technology is part of the broader national infrastructure involving other higher education institutions, public and private research organizations, and companies that are engaged in the generation, transfer, and use of knowledge, information, and technology. This interaction has become more formal, frequent, and planned since the 1970s, and has aroused a growing interest in governments and policy makers, from both developed and developing countries, who still regard it as an under-utilized scientific technological resource. However, it is important to point out that universities and firms are different social entities, presenting different nature and objectives, that, inevitably, affect and limit their interaction. This article aims to shed some light on one of these dissimilarities—that related to the firms’ R&D activity and intensity, that may influence their linkages with the academic world.     

Higher Education in the United States: Laissez-Faire,Differentiation, and Research

The U.S. higher education system stands out in three dimensions. First, it has the highest number of leading research universities. Second, it displays significant differentiation: multiple types of institutions offer services that differ in cost, prestige, etc. Third, it has a laissez-faire/free-market orientation: private and public entities are free to open schools and compete; essentially all schools enjoy substantial autonomy. This paper makes the case that these features are systematically related. The development of the American higher education market—which allowed market forces to operate and lacked centralized planning—contributed to the emergence of differentiation and a set of leading research universities.     

Competition and diversification in public and private higher education

The development of mass higher education and growing competition between higher education institutions has given increasing visibility to the issue of diversification. This article analyses the issue of programme diversification, using a panel of 181 Portuguese higher education institutions over the period 1995 to 2007, by comparing the behaviour of public and private institutions. The results show that the legal status of institutions is the major determinant of programme diversification, as private institutions are far more specialized than their public counterparts. The study also evaluates the role of other institutional variables, such as the institution’s size, age, location, institutional mission and research intensity, to explain differences in the diversification behaviour of higher education institutions. The results provide important insights, as competition has been thought to improve the performance of higher education institutions.     

Post-Lange Market Socialism: An Evaluation of Profit-Oriented Proposals

In recent years we have observed significant growth in the private sector in many higher education systems around the globe. This growth of private higher education is associated with high political expectations, notably concerning greater choice of programs and greater responsiveness of institutions to students' and labor markets' demands. Looking at the experience of several European and Latin American countries, this study analyzes the patterns of program diversification of public and private higher education and discusses the impact of the private sector for the diversification of higher education's supply. The results show a contrasting picture between political beliefs about privatization in higher education and its actual results, suggesting that private institutions tend to be far more specialized than their public counterparts.     

Japan's Higher Education Policies under Global Challenges

Over the past 20 years, Japan's higher education policy has been strongly influenced by national policies for achieving world-class excellence as a tool for economic and social development. However, Japan's universities, especially the top universities, have faced difficulties in maintaining an international presence, both in terms of academic excellence and the development of globally competitive human resources. This paper reflects on how national policies, especially economic and fiscal policies, have intervened in higher education since the beginning of the 21st century, and then investigates the impact of these policies and discusses the future perspective on Japan's higher education given the current global challenges.     

The growth–distribution nexus in a mixed regime of education with a status motive: On the macroeconomics of the welfare state

We develop a growth model with human capital accumulation to study the effects of status-driven motivation on individuals' choice between public or private education. This choice interacts with and exacerbates the effects of status, with implications for growth and distribution. More motivated individuals work harder and choose private education. In a majority voting/median voter setup, individuals choose a public education size for which there is no trade-off between long-term growth and inequality. We also highlight the conflict of interest between individuals with respect to the size of the public education sector and the tax rate that supports it. We thus highlight important interactions between the macroeconomy, social attitudes and educational institutions and derive results of interest in a variety contexts. We end by drawing policy conclusions among which, the idea that in democracies, higher growth and lower inequality are mutually compatible when the government promotes public education.     

The “swing of the pendulum” from public to market support for science and technology: Is the U.S. leading the way?

The structure and financing of science and technology activities are undergoing a slow, but profound, change. This change can be briefly characterized as a shift from relying and supporting public science to a stronger emphasis on “market-based” incentives for science and technology. In this paper we analyze this shift in a historical perspective, discussing both the theoretical explanations and the empirical trends of the ongoing change. While we do not claim to provide a comprehensive and exhaustive identification of the causes of this shift, we argue that it is largely driven by the perception of a shift of the U.S. policy towards market-based, rather than publicly supported, incentives for science and technology. This, in turn—given the strong economic performance of the United States over the 1990s—has influenced policies in most OECD countries, especially in Europe.We conclude by analyzing the evolution of research in U.S. higher education and find two major trends: an increasing diversity in the number of institutions of different types other than universities and a steady and continuous public funding of the leading U.S. universities. This has allowed the construction of an infrastructure now used largely by the private sector, but it also noted that the United States has not compromised public support for core areas or in those fields in which there is a clear perception that market incentives are not sufficient for meeting the strategic targets of the U.S. policy. The implication is that there is a considerable policy diversity in the U.S. practice and that all aspects of this diversity should be considered when using the United States as a reference.     

PRIVATIZATION AND PERFORMANCE: THE CASE OF FOUR AUSTRALIAN FINANCIAL INSTITUTIONS

ABSTRACT: This paper investigates the performance after privatization of institutions in Australian banking and insurance. Privatization was anticipated to improve firm performance in Australia and elsewhere, yet findings are mixed. A comparative institutional approach is taken to analyzing firm performance in the longer term which allows for further structural change. A CAMEL analysis of performance before and after privatization events is undertaken for four privatized institutions, two each from banking and insurance sectors. These are matched with private peer institutions. Privatized institutions are found to perform quite similarly to private peer institutions both before and after privatization.     

Managing academic innovation in Taiwan: Towards a ‘scientific-economic’ framework

Since the passage of the Science and Technology Basic Law in 1999, Taiwanese universities have taken a more “scientific-economic” approach to protect and commercialize their research. This research mainly examines innovation activities such as patenting, licensing, and incubated startups in the context of Taiwanese higher education institutions (HEIs). The “scientific-economic” framework used to analyze the strategic aspects influencing these academic innovations includes (1) intellectual property managerial capabilities, (2) the strength of external industrial partnerships, (3) the university entrepreneurial orientation, and (4) government research policy. Four hypotheses were developed. Data were collected via a questionnaire with all 122 HEIs in Taiwan surveyed.The research reveals that the aspects of intellectual property managerial capability, HEI-industry partnerships, and academic entrepreneurial orientation are useful to distinguish the university's innovation performance on patent grants, licensing incomes, and firm incubation. Also, government support on research plays a moderating role in academic innovation. Managerial and policy implications for managing innovation effectively in universities were drawn.     

UNIVERSITY COST STRUCTURE IN TAIWAN

In this paper we demonstrate that the measures of scale and scope economies may be elusive if failing to consider quality variation among universities and endogeneity of congestion in students’ learning and living facility utilization. Empirical results show that the private and highly congested universities have consistently underestimated the cost of congestion, which results in an upward bias in estimating the economies of scale and scope. Taking into account the quality of outputs in enrollments and the congestion factor, we find that the private and the more congested universities have much less scale and scope economies than the public and the less congested institutions. (JEL I21, H52, 9120)     

高等学校教学经费评估方案探讨

为了更好地体现分类指导,在现有的评估方案基础上,针对特殊类型的高校,分别制定相对应的评估方案,是我国高等教育改革和发展的需要。根据高校不同教育性质对教学评估方案加以完善,一方面,可以加强教学经费投入的评估力度,增强不同性质高校之间的可比性;另一方面,在为教育评估提供信息支持的同时,可以为高校其他决策提供强有力的支撑。     

Transforming Malaysia's Higher Education: Policies and Progress

Malaysia's higher education sector has a substantial number and diverse types of public and private providers, which have contributed toward improving access. Over time, with improved access, there are increasing policy efforts directed toward improving the quality of higher education to meet the desired human capital needed for advancing economic development. This paper assesses three key areas that have been undertaken to improve the quality of higher education, their measurements, achievements, outstanding challenges, and ensuing implications on future policy directions. The key performance indicators used for monitoring quality improvements show that some targets have been achieved. A review of the approach used to measure performance and a consolidation of the sector are needed for further quality improvement.     

Science studies: a guide for strategic management

The paper describes and discusses the current state of science studies research and its linkages to other fields, such as applied policy and management. It is argued that science studies is differentiated into science and technology studies, and science and technology policy research; and that these are twin interdisciplinary area of research in which a whole range of social scientists, as well as historians and philosophers are involved. The high degree of interdisciplinarity makes the field peculiarly difficult to categorize simply. Nevertheless, it is suufficiently mature and focused to be an established academic field in its own right; it possesses its own journal structure, specialized institutions, national and international professional associations, and teaching programmes. Research in science studies is potentially applicable-especially in the longer term-for policy-makers in the public and private sectors, as well as for public interest groups. However, the need to bridge a perched gap between acadmic studies and the needs of policy-makers is highlighted. Finally, a listing of emerging issues in the field is provided.     

The transient and persistent efficiency of Italian and German universities: a stochastic frontier analysis

Despite measures on the European level to increase the compatibility between the higher education sectors, the recent literature exposes variations in their efficiencies. To gain insights into these differences, we split the efficiency term according to the two management levels each university is confronted with. We separate short-term and long-term efficiency while controlling for unobserved institution-specific heterogeneity. We argue that the first term reflects the efficiency of the individual universities working within the country, while the second term echoes the influence of the overall country-specific higher education structure. The cross-country comparison displays whether efficiency differences between countries are related to the individual performance of their universities or their higher education structure. This allows more purposeful policy recommendations and expands the literature regarding the efficiency of universities in a fundamental way. Choosing Italy and Germany as two important illustrative examples, we show that the Italian higher education sector exhibits a higher overall efficiency value. With the individual universities working at the upper bound of efficiency in both countries, the remaining inefficiency and the gap between the countries are caused by persistent, structural inefficiency. Future measures should hence aim at the country-specific structure and not solely at the activities of single universities.     

DISAGGREGATING FIRMS IN ANALYSING THE COSTS AND BENEFITS OF THE UNIVERSITY–INDUSTRY RELATIONSHIP: BASED ON AN ANALYTICAL AND EMPIRICAL STUDY FROM SCOTLAND

It has been acknowledged that universities are key institutions in national and regional systems of innovation. This recognition has led to a rich stream of literature analysing the university–industry relationship. However, relatively little attention has been devoted to disaggregating the ‘industry’ side of this relationship and examining the costs and benefits to the disaggregated parties involved. In the present article, which draws on an analytical and empirical study from Scotland, it is suggested that it makes sense to distinguish between three kinds of firms in analysing the university–industry relationship: large national and international R&D-intensive firms, university spin-out firms, and established small- and medium-sized enterprises (SMEs) that have had little interaction with universities. The different costs and benefits facing these firms in their interactions with universities are analysed. It is concluded that the established SMEs confront relatively high costs in relating to universities. Finally, the policy implications are explored.     

The Design of Optimal Education Policies

This paper studies the education policy chosen by a utilitarian government. In the model, households differ in their income and in their children&'s ability; income is observed by the government, but ability is private information. Households can use private education, but cannot borrow to finance it. The government can finance education with income tax, but at the cost of blunting the individuals' incentive to exert labour market effort. The optimal education policy we derive is elitist: it increases the spread between the educational achievement of the bright and the less bright individuals, compared to private provision. It is also such that the education received by less bright individuals depends positively on their parental income. Finally, the optimal education policy is input regressive, in the sense of Arrow (1971, Quarterly Journal of Economics, 38, 175–208): households with higher income and brighter children contribute less in tuition fees towards the cost of the education system than households with lower income and less bright children.     

QUALITY AND ECONOMIES OF SCALE IN HIGHER EDUCATION: A SEMIPARAMETRIC SMOOTH COEFFICIENT ESTIMATION

This paper proposes a semiparametric smooth coefficient cost model to study the university cost structure where coefficients are an unknown function of the university's overall quality. A local least square method with a kernel weight function is used to estimate the cost function, and a simple statistic for testing a parametric model of the additive quality versus the semiparametric smooth coefficient model is applied. Empirical results from 56 universities in Taiwan show that, taking quality into account, higher education is subject to diseconomies of scale. In all categories—comprehensive and science/technology and public and private universities—the current university scale in Taiwan is too big to be cost efficient. (JEL I21, H52, 9120)     

Private labels, price rivalry, and public policy

The article examines (i) why low-quality private labels are introduced in some product categories and not in others, (ii) how the existence of a low-quality private label affects the pricing of a competing national brand, and (iii) how consumers’ surplus and welfare are affected by private labels. We find that the potential for private label introduction may—in return for national brand exclusivity in that particular retail store (exclusive dealing)—lead to price concessions from the producer of the national brand. If the national brand producer decides not to offer an exclusivity contract, a private label is introduced. In this case, private label introduction may lead to higher retail prices on national brands, which can be detrimental to consumer welfare as well as total welfare. We argue that our results have important implications for the interpretation of empirical results and the public policy towards national brands