Europe's University Challenge

The university systems in the US and Continental Europe couldn't be more different. Which works better? The answer is clear: America's by a long shot.

European universities are generally based on three misguided principles:

  • taxpayers rather than students pay for university education;
  • faculty appointments are governed by public sector contracts and university procedures are often centralized and almost always inflexible;
  • salaries amongst teachers tend to be equalized as well as teaching quality amongst universities.

This system is supposedly more egalitarian than America's system of higher education, which many Europeans look down on as elitist. In reality, Europe's system typically produces less research, worse students (especially at the doctoral level), and is probably less egalitarian than the US system.

Having taxpayers cover the costs of university education is indeed redistributive, but in the wrong direction--the beneficiaries are most often the children of comfortable European families. Even taking a generous view, the best that can be said is that the system is neutral insofar as redistribution is concerned, because the wealthiest pay more taxes and use more university services.

In addition to favoring Europe's "haves," this system makes it virtually impossible for self-financed private universities to survive. In fact, this is probably the true motivation of Europe's free public university system: to maintain the state's monopoly on higher education.

But consider, instead, the US system: students pay for their education and, with part of the tuition these students pay, universities finance scholarships for deserving but poor students. Such a system is at least as "fair" as Europe's model, and probably more so than one in which taxpayers pay for everybody, including the rich. Indeed, recent research comparing education in the US and Italy finds that family income is more important in determining a student's success (measured in terms of his salary) in "egalitarian" Italy than it is in "elitist" America.

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But competition is as important as financing in determining a university's quality, because competition increases the merit of the product. This is true in the US system, where public and private universities coexist happily. The University of California at Berkeley is public. Stanford University, an hour away down the coast, is private. Both are among America's finest universities. Competition between them works because it involves fighting for the best students and offering scholarships to deserving poor ones.

By contrast, Europe's centralization and bureaucratization control over universities produces only mediocrity. Appointments in European universities are often governed by complex bureaucratic processes that involve countless "judges" chosen from all over a country. This process is supposedly designed to "guarantee" that the best are appointed. In reality, however, these judges make it easier for insiders to appoint their friends, rather than for the quality of research and teaching to determine who is hired.

Some countries, take France, are changing their systems by appointing a few academics from other countries onto hiring and promotion committees. While this is obviously a move in the right direction, it will produce few results.

The best American universities operate their hiring processes internally, relying on outsiders only for expert opinions on the quality of a candidate professor's research. What produces good appointments is the threat that mediocre professors will make it difficult to attract good students and large research grants.

Europe's tendency to equalize salary and treatment of professors and researchers also reduces the incentive to engage in good research and good teaching. If the only factor that increases a professor's salary is the passage of time, why make the extra effort to excel?

Of course, love of research and teaching is why many people join university faculties in the first place, but why not give these noble sentiments a helping hand with appropriate financial incentives? Low salaries are often part of an implicit bargain: in exchange for the bad pay, university administrators close their eyes to lazy teaching and research. Moreover, if salaries are low, how can university deans stop their faculty members from scouring the country to do lucrative consulting? The result is bad teaching, lousy research, and absentee professors.

US universities often use aggressive financial incentives and differential treatment of professors to reward good teaching and research. Also, the private nature of contracts between an American university and its professors creates healthy competition for talent and a flexible and efficient market for scientists.

The result is that it is not uncommon for a bright, productive young professor in America to earn as much, if not more, than older and less productive colleagues. In Europe, promising young researchers struggle and have to supplement teaching and research with outside jobs, while established professors earn good salaries.

Given these conditions, it should surprise no one that American universities nowadays are increasingly staffed by many of Europe's best scholars. What is surprising in the face of this brain drain is the power of the lobby of university professors in Europe to block reform.

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