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Funding universities for efficiency and equity: research findings versus petty politics

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  • George Psacharopoulos

Abstract

The present paper starts by discussing the principles of public funding of universities. The size of the social returns to investment in education gives an indication regarding the most efficient use of resources, while the difference between the private and the social rates relates to issues of equity. The available evidence is contrasted to higher education funding policies in several countries. It is concluded that there is a divide between the research findings regarding efficient and equitable financing, and the actual public funding of universities. The reasons for this divide are discussed in the context of political economy, rent-seeking by several stakeholders and, above all, vote-seeking by politicians.

Suggested Citation

  • George Psacharopoulos, 2008. "Funding universities for efficiency and equity: research findings versus petty politics," Education Economics, Taylor & Francis Journals, vol. 16(3), pages 245-260.
    • Handle: RePEc:taf:edecon:v:16:y:2008:i:3:p:245-260
    DOI: 10.1080/09645290802338078
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    References listed on IDEAS

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    1. Chapman, Bruce, 2006. "Income Contingent Loans for Higher Education: International Reforms," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 25, pages 1435-1503, Elsevier.
    2. Heckman, James J. & Masterov, Dimitriy V., 2004. "Skill Policies for Scotland," IZA Discussion Papers 1444, Institute of Labor Economics (IZA).
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    Cited by:

    1. Józef Dziechciarz, 2015. "Measurement of Rate of Return in Education. Research Directions," Proceedings of FIKUSZ 2015, in: Jolán Velencei (ed.),Proceedings of FIKUSZ '15, pages 39-56, Óbuda University, Keleti Faculty of Business and Management.

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