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Authority and Commitment: Why Universities, Like Legislatures, Are Not Organized as Firms

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  • Scott E. Masten

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This paper explores the functions and limitations of democratic governance by analyzing the allocation of decision‐making authority in colleges and universities. Contrary to the conventional perception that large numbers and heterogeneity of voters and issues undermine the efficiency of democratic decision making, data on the allocation of authority for thirty‐one decision areas in 826 US colleges and universities show democratic governance to be more prevalent in larger, “full‐service” research universities than in smaller liberal arts colleges and special‐curriculum institutions. State‐ and church‐affiliated institutions, meanwhile, tend to be governed more like firms. The results overall are consistent with economic theories of political organization that view democratic governance primarily as a means of enhancing the credibility of commitments rather than as a method of aggregating preferences. “Educational systems, like governments, apparently can never be rational, never a logical and economical means to a definite end. Rather must they be always makeshifts.” —J.P. Munroe (1899) “Never did a dean lack legitimate reasons by which to color his bad faith” —Machiavelli, The Dean (1513)

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  • Scott E. Masten, 2006. "Authority and Commitment: Why Universities, Like Legislatures, Are Not Organized as Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(3), pages 649-684, September.
    • Handle: RePEc:bla:jemstr:v:15:y:2006:i:3:p:649-684
    DOI: 10.1111/j.1530-9134.2006.00113.x
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    Cited by:

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    2. Ian Ayres & Colin Rowat & Nasser Zakariya, 2011. "Optimal voting rules for two-member tenure committees," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(2), pages 323-354, February.
    3. Jens Prüfer & Uwe Walz, 2013. "Academic faculty governance and recruitment decisions," Public Choice, Springer, vol. 155(3), pages 507-529, June.
    4. K. Sonin & I. Khovanskaya & M. Yudkevich, 2008. "Budget Uncertainty and Faculty Contracts: A Dynamic Framework for Comparative Analysis," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 12.
    5. Uwe Jirjahn, 2009. "The Introduction of Works Councils in German Establishments — Rent Seeking or Rent Protection?," British Journal of Industrial Relations, London School of Economics, vol. 47(3), pages 521-545, September.
    6. Nasirov, Shukhrat & Joshi, Amol M., 2023. "Minding the communications gap: How can universities signal the availability and value of their scientific knowledge to commercial organizations?," Research Policy, Elsevier, vol. 52(9).
    7. Соколов М. М. & Лопатина С. Л. & Яковлев Г. А., 2018. "От Товарищества К Учреждениям: Конституционная История Российских Вузов," Вопросы образования // Educational Studies Moscow, National Research University Higher School of Economics, issue 3, pages 120-145.
    8. Elizaveta Sivak & Maria Yudkevich, 2013. "Academic Profession in a Comparative Perspective: 1992–2012," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 7(3), pages 38-47.
    9. Joshua C. Hall, 2020. "Academia in Anarchy: 50 years on," Public Choice, Springer, vol. 183(3), pages 405-416, June.
    10. Kiri, Bralind & Lacetera, Nicola & Zirulia, Lorenzo, 2018. "Above a swamp: A theory of high-quality scientific production," Research Policy, Elsevier, vol. 47(5), pages 827-839.
    11. Giacomo Degli Antoni & Magalì Fia & Lorenzo Sacconi, 2019. "Academic Shared Governance And Performance: Theoretical Issues And Empirical Evidence," Econometica Working Papers wp69, Econometica.
    12. Соколов М. М., 2019. "Трансформирующие И Селективные Системы: Исследование По Сравнительной Социологии Академических Рынков И Карьер," Вопросы образования // Educational Studies Moscow, National Research University Higher School of Economics, issue 2, pages 35-77.
    13. Scott E. Masten, 2013. "The enterprise as community: firms, towns and universities," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 6, Edward Elgar Publishing.
    14. Mikhail Sokolov, 2019. "Transformative and Selective Systems: A Study in Comparative Sociology of Academic Markets Careers," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 2, pages 35-77.
    15. Daraio, Cinzia & Bonaccorsi, Andrea & Geuna, Aldo & Lepori, Benedetto & Bach, Laurent & Bogetoft, Peter & F. Cardoso, Margarida & Castro-Martinez, Elena & Crespi, Gustavo & de Lucio, Ignacio Fernandez, 2011. "The European university landscape: A micro characterization based on evidence from the Aquameth project," Research Policy, Elsevier, vol. 40(1), pages 148-164, February.
    16. Nicola Lacetera, 2009. "Different Missions and Commitment Power in R&D Organizations: Theory and Evidence on Industry-University Alliances," Organization Science, INFORMS, vol. 20(3), pages 565-582, June.
    17. Scott E. Masten & Jens Prüfer, 2014. "On the Evolution of Collective Enforcement Institutions: Communities and Courts," The Journal of Legal Studies, University of Chicago Press, vol. 43(2), pages 359-400.
    18. Prüfer, J. & Walz, U., 2009. "How Does the Governance of Academic Faculties Affect Competition Among Them?," Discussion Paper 2009-49, Tilburg University, Center for Economic Research.
    19. Cunningham, Brendan M., 2009. "Faculty: Thy administrator's keeper? Some evidence," Economics of Education Review, Elsevier, vol. 28(4), pages 444-453, August.

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