Productivity and Policy in Higher Education

• Author: Hamish Coates,Gwilym Croucher,Kenneth Moore
• DOI: http://doi.org/10.1111/1467-8462.12330
• Published date: 01 June 2019
• Date: 01 June 2019

The Australian Economic Review, vol. 52, no. 2, pp. 236–246 DOI: 10.1111/1467-8462.12330

Productivity and Policy in Higher Education

Kenneth Moore, Gwilym Croucher and Hamish Coates*

Abstract

Understanding and improving the perfor-

mance of public higher education institutions

is a matter of growing interest to university

and government leaders. To this end, this

article surveys dimensions of recent ap-

proaches to productivity measurement in

higher education, illustrating trends, limita-

tions and developments, and exemplifies these

with reference to Australian universities. The

article closes by discussing policy considera-

tions that would help augment the design of

policy, making comment on the implications

for performance‐incentivised funding of

higher education.

1. The Need to Study Productivity in

Higher Education

Understanding and improving the perfor-

mance of public higher education institutions

is a matter of growing interest to university

and government leaders. For their part,

university leaders have an evident, albeit often

difficult to realise, interest in ensuring that

available resources are converted as effi-

ciently as possible into the highest‐quality

outcomes. As the main purchases and often

consumers of higher education services,

governments too have sought to shape pro-

ductivity through a range of performance

measures and schemes. In a resource‐abun-

dant world, these and other perspectives

would align in aspiration and practice. In

such a world, governments would allocate

resources in ways that allow optimised

university operations and performance.

Public policy and financing are contingent,

affected by a host of political , historical and

cultural factors. While higher education con-

sumes a growing portion of expenditure in

most advanced economies, the study of higher

education finance is in its infancy (Lepori &

Jongbloed 201 8). Even if governmen t alloca-

tions could be optimised, their utility would

hinge on, and may be undermined by, complex

andfrequentlynonfinancial arrangements

within institutions. Institutional management,

for its part, at times remains far from an exact

science, involving many forms of arbitrage and

opaque allocation (e.g., Ginsberg 2011;

Lombardi 2013). Such uncertainties may

explain why t he performan ce‐based funding

schemes attempted by various governments

have delivered varying levels of success

* Moore and Croucher: Centre for the Study of Higher

Education, University of Melbourne, Melbourne, Victoria

3010 Australia; Coates: Institute of Education, Tsinghua

University, Beijing 100091 China. Corresponding author:

Coates, email <hamishcoates@tsinghua.edu.cn>.

© 2019 The University of Melbourne, Melbourne Institute: Applied Economic & Social Research,

Faculty of Business and Economics

Published by John Wiley & Sons Australia, Ltd