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“Policy Scepticism†and the Impact of Northern Irish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints

  • Kristinn Hermannsson

    ()

    (Fraser of Allander Institute, Strathclyde University)

  • Katerina Lisenkova

    ()

    (Fraser of Allander Institute, Strathclyde University)

  • Peter McGregor

    ()

    (Fraser of Allander Institute, Strathclyde University)

  • Kim Swales

    ()

    (Department of Economics, University of Strathclyde)

This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010b) for the case of Northern Ireland. The motivation is to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of Northern Irish HEIs. A comparative analysis will follow in due course. A “policy scepticism†has emerged that challenges the results of conventional regional HEI impact analyses. This 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 publicsector expenditure constraints that are binding under devolution. We show how conventional impact analyses can be augmented to accommodate regional public sector budget constaints. 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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Paper provided by University of Strathclyde Business School, Department of Economics in its series Working Papers with number 1025.

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Length: 50 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:str:wpaper:1025
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  1. 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.
  2. 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.
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