The Angry Professor describes a new budgeting system at LSU:
Several years ago LSU moved to a business model budget. Under this
model, each department has control over its own funds. We might choose,
for example, to give everyone a big raise. Or, we might choose to hire
new faculty. We might purchase equipment, or furniture.As
with all such schemes, the administration makes sure that they will get
money from somewhere to sustain their bloated salaries. Each department
pays a "tax" to the college, which is determined by enrollments and
indirects as earned in "Year Zero" (the year before the new budget took
effect). If the department fails to generate at least the enrollments
and indirects earned in this year, the college will take the shortfall
out of the departmental budget. We’re not talking about that funny fake
money that colleges usually shuffle around, but real dollars: my
raises.
Some good things have come out this arrangement:
My department and several others have taken
advantage of the new model by "firing" the custodial staff provided by
Physical Facilities and hiring a private contractor to keep the
bathrooms looking spiffy. I must say, the bathroom has never looked
cleaner, and my office carpet has been vacuumed for the first time in
several years.
But, of course, the Angry Professor is angry.
In the social sciences, every department is trying to offer
statistics courses in house, so we now have about 8 courses titled
"Introduction to Statistics in [insert department name here]."
But why doesn’t the Coase Theorem and comparative advantage apply? The problem here can’t be the budgeting. I suspect a lack of property rights.
Each department is now in direct competition with every other for undergraduate enrollments.
Sounds good to me but the Angry Professor has a rebuttal:
The marginal departments, the ones with the
lowest possible academic standards, are pulling in vast numbers of warm
bodies and the tuition dollars associated with them. The departments that formerly only provided degrees to the football players are now thriving.
But grade inflation and the incentive to take easy courses in easy departments is nothing new, the only difference is that now the easy departments have funding commensurate with enrollments. The bottom line, therefore, is that the angry professor is angry at the students for not choosing classes more wisely.
A better grading system that takes into account the fact that some departments and professors grade easier than others would help students to make better choices. It’s not obvious to me, however, that on the whole the students aren’t making rational choices.
Thanks to Tom Slee for the pointer. I hope to say more about his interesting new book, No one Makes You Shop at Wal-Mart, in the future. Contrary to the title it’s about how markets fail, not a defense of Wal-Mart!
From the Angry Professor’s post:
It was hard enough to get department chairs to sign off on interdisciplinary grant proposals before, and now it’s almost impossible. Each chair wants the indirects to go exclusively to his/her department, or they quibble for weeks over who is getting the larger percentage.
It appears that the Coase Theorem is failing to apply for the usual reason: transaction costs.
I really think the incentive to take easy classes in easy departments is a symptom of general ed requirements. The first two years of undergraduate enrollment, give or take, are basically just a repeat of high school. I say let the individual departments have whatever requirements they wish for a degree, but eliminate the university-wide general requirements that make you waste a couple of years re-taking US History, basic biology, and some lame class in arithmetic.
There will still be some incentive to take easy courses from easy departments, sure, but at least students would not be forced to fill up essentially half of their collegiate experience with required courses that teach nothing and are generally used to pad the GPA.
There are colleges without core requirements? Most of them don’t require specific courses, but do require some menu of course-types. Meaning that departments compete for bodies to fill seats by offering courses that qualify for the “core” of Science, Literature, Social Science &c. I think all of that is a total waste of time, just have the university require X hours, Y GPA and no more than Z that are Pass/Fail, let the departments sort it out from there.
I think that’d still leave departments competeing for bodies, but departments whose degrees were valued higher on the job market would have an advantage rather than departments whose easy classes met the multicultural requirement.
The University I work at adopted a similar budgeting scheme a couple years ago. This resulted in the liberal arts and science and math colleges merging. Science and math had a lot of grant funding, liberal arts didn’t. But by combining the two, suddenly liberal arts gets to benefit from the grants that the physicists and biologists are pulling in.
There’s an easy solution to this: impose the same grade distribution on every department. If a bunch of slackers show up, they compete against each other and at least *some* will get bad grades. In addition, those who perform badly in tough departments can switch to easier ones and pushdown the worse students. (Some people say that’s what happens when physics and math “failures” come to econ depts and end up superstars
Comparative advantage rules!
NB: the same solution works WITHIN depts, eg, solving the problem of an “easy” professor who attracts “too many” students from the tough professor teaching the same course in the same quarter.
This solution blocks grade arbitrage, but does nothing for quality of teaching. With competition, students would have an incentive to find their niche.
Great post and great comments.
One observation: I assume tuition fees are fixed by the administration at some uniform rate. So this is a faux ‘marketplace.’ Different Departments are unable to charge higher prices for better quality product. Good students are unable to send a market signal that they are willing to make up the difference for high quality (demanding) courses that are losing bodies. The individuals responsible for this scheme don’t know basic market economics, or the elements of marketing pricing strategy. Imagine if Toyota had to charge the same fixed (low) price for a new Lexus as a lemon of a used car. What would happen to the quality of automobiles?
Zetland writes:
“There’s an easy solution to this: impose the same grade distribution on every department.”
I’d suggest a better (and simpler) solution would be to require that all COURSES of 30 or more students award grade such that the average grade is at most a “C”. Zetland’s solution to “impose the same grade distribution” by department is too aggregated.
Alex’s assertion that “It’s not obvious to me, however, that on the whole the students aren’t making rational choices” (in the absence of deterence measures against easy grading) is a clear indication to me that he has not been getting enough sleep. Get some sleep Alex!
Interestingly, LSU’s chancellor is Sean O’Keefe, the previous NASA Administrator. It’s really too bad O’Keefe didn’t try implementing something similar at NASA when he was its head.
RPW wrote “Well, if professors are worried about grade inflation, stop giving easy A’s. You are the ones in control.”
Yes true, and some departments are quite good about not inflating grades — where I teach, the economics department consistently hands out “C” as the average grade. But not all departments are equally principled. The reason is that administrators have been relying to greater and greater extent upon student evaluations of teaching as THE WAY to assess the quality of instruction being provided; with “quality of instruction” being a determinant in salary adjustments the incentive are perverse.
I spent some time in a University with a similar funding model, and I think the most significant barrier to this “market” working well is the lack of information/knowledge of the students.
The students taking introductory courses have never been to university before, they don’t know that some courses are better/easier than others, and if they do know that then they still don’t know which specific ones are good/bad/easy/hard/whatever. So what do they do? They either (1) take the version offered by their department, or (2) they ask their department.
Another issue: At our institution we wound up with a large department A realising that all “their” students were enrolling in a specific first year course at smaller department B, and taking a slice of funding with them. So department A set up a competing course, and then made their competing course a pre-requisite of for all their second-year courses, effectively mandating a large number of students into their potentially-inferior course, but keeping the funding. The particular case I am thinking of was motivated by financial concerns, but I can see that in other cases this behaviour could be academically justified (for example, if department B felt that department A should change the focus of their course). However, if department B has their funding tied to year 0 enrollments, they’re in trouble.
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