Regulation of program supply in higher education. Lessons from a funding system reform

Stijn Kelchtermans and Frank Verboven

No 2008/01, Working Papers from Hogeschool-Universiteit Brussel, Faculteit Economie en Management

Abstract: It has become well documented that the performance gap between European and US universities is at least partly due to lower spending on higher education in Europe. Rather than raising the public budget or promoting private contributions, many governments have attempted to make public spending more efficient in various ways. This paper reports on results from a proposed funding system reform in Flanders (Belgium), which aimed to save costs by reducing the diversity and duplication of study programs. We draw the following lessons. While reducing program diversity may save on fixed costs, this is typically insufficient to compensate for consumer surplus losses due to low student mobility. Furthermore, decentralized financial incentives mechanisms may be ineffective since they may often promote program cuts when this is undesirable, and vice versa. These findings illustrate the difficulties with regulatory reforms that mainly aim to reduce costs. Hence, the question how to raise total spending on higher education (whether through public or private means) cannot be avoided.

JEL-codes: C25 I2 I23 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008-01
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://lirias.hubrussel.be/handle/123456789/2231 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hub:wpecon:200801

Access Statistics for this paper

More papers in Working Papers from Hogeschool-Universiteit Brussel, Faculteit Economie en Management Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Janssens ( this e-mail address is bad, please contact ).