Why Does the U.S. Have the Best Research Universities? Incentives, Resources, and Virtuous Circles

W. Bentley Macleod () and Miguel Urquiola

No 13203, IZA Discussion Papers from IZA Network @ LISER

Abstract: Around 1870 the U.S. had no research universities of note, while today it accounts for the largest number in the world. Many accounts attribute this transformation to events surrounding World War II. In contrast, this paper traces its origins to reforms that began in the 1870s. We first explain the origins of the American system's weakness at research. We then present an agency theory framework that highlights ingredients necessary for enhanced research performance. These include specialization and meaningful performance metrics. We then discuss reforms that put these ingredients in place. For example: the introduction of specialized and advanced teaching and the ensuing rise of disciplines/departments; the creation of academic journals; the introduction of selective admissions. Throughout, we emphasize the role played by the U.S. university system's free market orientation.

Keywords: personnel economics; human capital; education (search for similar items in EconPapers)
JEL-codes: J24 J44 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2020-04
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Journal of Economic Perspectives, 2021, 35 (1), 185 - 205

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Working Paper: Why Does the U.S. Have the Best Research Universities? Incentives, Resources, and Virtuous Circles (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13203

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