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“Policy Scepticism” and the Impact of Scottish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints under Devolution

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Author Info

  • Hermannsson, Kristinn
  • Lisenkova, Katerina
  • McGregor, Peter G.
  • Swales, J. Kim

Abstract

A “policy scepticism” has emerged that challenges the results of conventional regional HEI impact analyses. Its denial of the importance of the expenditure impacts of HEIs appears to be based on a belief in either a binding regional resource constraint or a regional public sector budget constraint. In this paper we provide a systematic critique of this policy scepticism. However, while rejecting the extreme form of policy scepticism, we argue that it is crucial to recognise the importance of the public-sector expenditure constraints that are binding under devolution. We show how conventional impact analyses can be augmented to accommodate regional public sector budget constraints. While our results suggest that conventional impact studies overestimate the expenditure impacts of HEIs, they also demonstrate that the policy scepticism that treats these expenditure effects as irrelevant neglects some key aspects of HEIs, in particular their export intensity.

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File URL: http://repo.sire.ac.uk/handle/10943/191
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Bibliographic Info

Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2010-54.

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Date of creation: 2010
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Handle: RePEc:edn:sirdps:191

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Related research

Keywords: Higher Education Institutions; Input-Output; Scotland; Impact study; Multipliers; Devolution;

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Cited by:
  1. Kristinn, Hermannsson & Peter G., McGregor & J. Kim, Swales, 2013. "Consumption Expenditures in Economic Impact Studies: An Application to University Students," SIRE Discussion Papers 2013-62, Scottish Institute for Research in Economics (SIRE).

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