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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

Author

Listed:
  • Kristinn Hermannsson

    (Fraser of Allander Institute, Department of Economics, Strathclyde University)

  • Katerina Lisenkova

    (Fraser of Allander Institute, Department of Economics, Strathclyde University)

  • Peter McGregor

    (Fraser of Allander Institute, Department of Economics, Strathclyde University)

  • Kim Swales

    (Department of Economics, University of Strathclyde)

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.

Suggested Citation

  • Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "“Policy Scepticism†and the Impact of Scottish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints under Devolution," Working Papers 1015, University of Strathclyde Business School, Department of Economics.
    • Handle: RePEc:str:wpaper:1015
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    References listed on IDEAS

    as
    1. Siegfried, John J. & Sanderson, Allen R. & McHenry, Peter, 2007. "The economic impact of colleges and universities," Economics of Education Review, Elsevier, vol. 26(5), pages 546-558, October.
    2. Jan Oosterhaven & Dirk Stelder, 2002. "Net Multipliers Avoid Exaggerating Impacts: With A Bi–Regional Illustration for the Dutch Transportation Sector," Journal of Regional Science, Wiley Blackwell, vol. 42(3), pages 533-543, August.
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    Cited by:

    1. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "An HEI-Disaggregated Input-Output Table for Wales," Working Papers 1021, University of Strathclyde Business School, Department of Economics.

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    More about this item

    Keywords

    Higher Education Institutions; Input-Output; Scotland; Impact study; Multipliers; Devolution.;
    All these keywords.

    JEL classification:

    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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