1. An Agenda for Reforming European Universities André Sapir Senior Fellow, Bruegel Professor of Economics, Université Libre de Bruxelles

2. Joint work with  Philippe Aghion, Harvard University  Mathias Dewatripont, Université Libre de Bruxelles  Caroline Hoxby, Stanford University  Andreu Mas-Colell, Universitat Pompeu Fabra

3. European Space of Higher Education  European universities are often dysfunctional in their two functions: teaching & research  The Bologna process is breaking down some barriers and structures higher education in 3 cycles: –Bachelor –Master –Doctorate  Bologna focuses on undergraduate education. We focus on graduate education: where Bologna meets Lisbon Graduate education Undergraduate education

4. The undergraduate level  Little mobility: proximity matters  Hence different systems of selection and fees can more or less continue to co-exist: –Selection prior to entry & no fees –Selection prior to entry & moderate fees –Selection prior to entry & high fees –Selection after entry & moderate fees

5. The graduate level  The EU produces as many doctorates, even in science and engineering, as the US.  But too many universities produce doctorates. Hence the level of excellence is too low.  The graduate level is where Bologna meets Lisbon: –Advanced professional Masters provide high-skilled human capital for technology-based enterprises (engineers) –Research Masters and Doctorates provide the human capital for research in universities and the private sector

6. University research performance  The Shanghai ranking –>0: it exists and it is objective –<0: it has various defects  Country performance index –Sum of Shanghai scores –Divided by population

7. Country performance index (US=100) Top50100200500 EU 1513264167 EU 2510213254 Italy 0 01134 Spain 0 0 014 France 3 152945 Germany 0173767 Belgium 0 061122 Netherlands205176131 Sweden 7117179217 Switzerland97166229230 UK72 8699124 California234199163103

8. Explaining country performance HE funding HE funding (as % of GDP) (€0,000 per student) publicprivatetotal Italy0.80.21.0 5.61.4 7.0 Spain1.00.31.3 4.01.2 5.2 France1.00.21.2 7.51.2 8.7 Germany1.10.11.211.50.912.4 Belgium1.40.21.610.61.612.2 Netherlands1.30.31.610.61.612.2 Sweden2.10.22.318.91.820.7 UK1.40.21.6 8.43.111.5 EU 251.10.21.2 7.31.4 8.7 US1.51.83.116.6 19.936.5

9. Explaining university performance  Bruegel survey of 200 European universities in S-500 –71 responses –66 useful responses  Sample: 66 universities in 10 countries –17/43 UK- 5/11 SW –11/40 DE- 4/12 NL –9/23 IT- 4/7 BE –6/9 ES- 2/5 DK –6/8 CH- 2/3 IE

10. Explaining university performance StudentBudget Public Autonomy number student status Budget Hiring Wage Italy44.910.11.00.90.40.0 Spain44.8 7.01.00.50.50.0 Germany26.2 9.60.90.00.90.0 Belgium21.711.30.50.41.00.0 Netherlands21.420.50.80.80.80.2 Sweden27.116.20.80.91.01.0 Switzerland12.826.20.80.10.80.0 UK14.624.50.50.91.00.9

11. Explaining university performance CharacteristicsCorrelation coefficient Budget per student + 0.61 University governance Public status - 0.35 Budget autonomy + 0.16 Hiring autonomy + 0.20 Wage-setting autonomy + 0.27

12. Explaining university performance Variable Effect on research performance Size of the university+ Age of the university+ Budget per student+ Budget autonomy + Interaction between budget and autonomy+  Need to control for size and age of the university  Main explanatory variable is budget per student  But budget autonomy (not the other governance variables) is also important  Interaction between money and autonomy: having budget autonomy doubles the effect of additional funding on university research performance

13. What to do? 1.Increase university funding 2.Increase university autonomy 3.Increase competition and mobility 4.Connect Bologna and Lisbon

14. Funding  Level of funding: increase by 1% of GDP  Private vs. public: agnostic  Fees: undergraduate vs. graduate: professional vs. research  Student aid  Gifts and endowments

15. Autonomy  Every university should be autonomous: legal standing, hiring policy, pay scale, etc.  (Self-) governance: find a balance between external and internal constituencies, between efficiency and cohesion

16. Competition and EU mobility  General principle: fostering excellence  Competition for and mobility of students: need for standardized European tests  Competition for and mobility of faculty: portability of pension rights. Also: no-endogamy principle.  Competition for research funds: the ERC example  Competition fosters specialization and excellence

17. Connecting Bologna and Lisbon  Graduate fellowships: for starting graduate studies  Graduate programs

18. The European dimension  Universities are and should remain the primary responsibility of MS or regions.  However Europe has an important role to play: –In fostering mobility of students and faculty –In fostering excellence through the allocation of budgetary resources –In benchmarking institutions and MS/regions –In helping MS taking commitments to reform their systems