Fiscal decentralization and the performance of higher education institutions: the case of Europe
1 : Bureau d'économie théorique et appliquée
(BETA)
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Website
université de Strasbourg, CNRS : UMR7522, Université Nancy II
P E G E 61 avenue de la Forêt Noire 67085 STRASBOURG CEDEX -
France
2 : Univesrity of Liège
This paper empirically evaluates the impact of fiscal decentralization onthe performance of higher education systems. To test this relationship,we build up a panel dataset composed of European countries. Country-level performance is measured by an indicator using data from the Shanghai ranking. Using a dynamic panel approach, we find that a higher shareof government spending coming from decentralized levels of governments leads to an improvement of the performance of research-intensive higher education institutions. This result is confirmed by the use of an instrumental variable approach. We argue that a more decentralized higher education system increases the ability to attract and retain top scholars.