Why is U.S. higher education so dominant? And why is Harvard #1?

Shailendra Raj Mehta reports:

The key innovation was alumni control of the Board of Trustees. This is what made possible several desiderata on the Rosovsky (1991) and (Aghion, Dewatripont et al. 2007) lists in the first place. This is what simultaneously allowed autonomy, continuity of purpose, large  endowments and the ability to weather turbulence. The role of alumni trustees has not been fully examined so far. Now, to be sure, Rosovsky does talk about the role of independent trustees. Certainly it is true that in one sense the trustees of US schools are often truly independent in that they provide a buffer against interference from the political and other domains. Further, they are usually able to take a view of the institution independent of the interests of the faculty. But, in fact, the trustees are not independent or uninterested observers at all. This is on account of the fact that the Board of Trustees, at least in the top US schools, consists primarily of alumni, the group which has the highest permanent stake in the reputation of the university.

…Therefore, whichever measure of school quality that we use – rank, school selectivity or endowment, we find that same result – the greater the degree of alumni control, the higher the quality of the school.

…so why is Harvard #1? This question, then becomes easy to answer. Except for a few brief years in its early days and a decade in the middle, for almost its entire existence, a period of nearly 400 years, Harvard has been controlled by its alumni.

The paper is here (pdf), interesting throughout.


Couldn't agree more. If so much of your own personal capital is tied up in an asset that depends largely on a continued reputation, one will tend to take care of the institution. Further, significant networking was predicated on a sort of enforced collective generosity, with some sense of influence - even control - a necessary precondition. Nobody will throw money over and over into a black hole (except, perhaps, in taxes... and that's less 'throwing' and more coercive). Finally, as the years passed, students whom the school had treated well tended to be the most involved - and inclined to ensure that students after them were also treated generously - which further led to a sense of gratitude and a 'pay it forward' mentality. Nickel-and-diming the students at an institution is ultimately destructive of the institutional financial welfare, particularly in the area of alumni donations.

Abolish all government regulation of medical treatment.

Let the sick and the injured subscribe to private evaluation services who will advise on the suitablility and safety of proposed treatment. (These evaluation services might be a branch of health insurance companies.) This will, in turn, create business opportunities for statisticians who can determine which evaluation providers and which practitioners have the best track record. Everyone concerned will, of course, voluntarily conform to the highest standards of accuracy in data collection and openness in publishing the results.

Ooops - put that under the wrong topic!

Schools get their research funding from the federal government, not their alumns.

So, I suspect what you are measuring with Harvard and some west coast schools is the political connectedness of the institution (faculty serving administrations, passing work to colleagues or knowing what will be hot, Senators and representatives bringin' home the education pork, defense officials making sure Darpa spends some money in certain districts).

Here is a living example: Richard Shelby

From Wiki:

The Shelby Hall Research Center at the University of Alabama named for Senator Shelby and his wife, a professor emerita at that university. The 200,000 square feet (19,000 m2) square foot new center opened in 2007 and combines mathematics, chemistry and biology research in one building.
The Richard C. and Annette N. Shelby Interdisciplinary Biomedical Research Building at the University of Alabama at Birmingham opened in April 2006. The building, costing $90 million, 12 stories high, with 323,000 square feet (30,000 m2)square feet, increased UAB's available research space by 25%. Shelby was instrumental in securing federal funds for the building.
The Senator Richard C. and Dr. Annette N. Shelby Center for Engineering Technology, part of the Ginn College of Engineering at Auburn University, was dedicated on April 18, 2008. Shelby helped secure $30 million of the $54 million cost of Phase I of the project.[39]

From the National Academy of Sciences:

The federal government finances somewhat less than half the research and development (R&D) conducted in the United States. Private industry funds about half; colleges, universities, and other nonprofit organizations such as foundations play smaller but still important roles (Figure 1).

Word. Harvard was the center of puritan/unitarian thought. The puritans conquered America in 1865. The universities took over the US Federal Government in 1932. The US Federal Government then took over the United States in the 1960s. The United States then took over the world in 1945. We're all puritans now.

I think this is my favorite "why economists are so silly" thread since Alex tried to figure out why the Tapanzee bridge was built next to the Rockefeller estate when their was more suitable limestone or something 3o miles away. Naturally, this mystery required more than a few equations to solve.

Does anyone have a source for which colleges were considered most prestigious across historical time? Were HYP dominant (among US institutions) throughout US history, or were there others that faded?

HYP were dominant throughout US history, largely because there weren't many other colleges. It was a much smaller population back then. The main institution that has lost relative prestige since the colonial/revolutionary period is the College of William and Mary, which while it still persists, does not retain the kind of national profile that the ivies have.

*Ahem* What about mine own Massachusetts Bay Colony Institute of Technologickal Arts?

They're #1 in pranking Harvard.

Isn't their main target/ inspiration for pranks in California?

The pdf was most helpful: a model even poor communities could adapt with a constantly tended-to pool of knowledge-based skills, used in equilibrium terms.

It would be interesting to consider Notre Dame in this context.

It's also interesting that Berkeley is #2 on the list in the presentation, as it is a weak counterexample to the alumni control issue. Of the 16 appointed Regents of the University of California, only 3 are Berkeley alumni, and 2 others are UCSB alumni. On the other hand, two Regents are appointed from the alumni association, and of the 5 elected ex-officio Regents, two are Berkeley alumni also.

Why? As an alumnus myself, there is nothing different. The vast majority of the alumni are conservative Catholics, so any of the board that aren't alumni themselves are certainly still living up to the hopes and dreams of the alumni. It is one of the few (perhaps only) such institutions available, so it will continue to attract the kind of student that supports it. And a few legacy students such as myself that didn't get into MIT...

Daniel, that's precisely why it would be of interest. In both the Harvard and Notre Dame cases, alumni are influential, but the alumni base is substantially different attitudinally. If any of the Harvard board are conservative Catholics, that's incidental and not important to why they are on the board.

Suggesting that Harvard's alumni are most interested in the #1 prestigious school while Notre Dame's alumni are most interested in a Catholic school? Although Notre Dame is a conservative Catholic institution, it is still firmly grounded in a liberal education. The alumni are just as interested in having a strong educational ranking (#19 on some chart when I was attending). They differ in style, not in substance. I think you'd be better served comparing Harvard to Liberty U.

This is not convincing to me at all. Wouldn't you expect alumni of highly ranked schools to *want* to be involved more? It is not surprising at all that rank and alumni involvement correlate.

"Their alumni were very involved" seems like a poor description of Harvard's success, and "get your alumni involved more" maybe not bad but certainly insufficient advice for a school hoping to climb the ranks.

US higher education is so dominant, because our labour market is so large and high wage. People from all over the world want to come here, because it gives them access to the US labour market.

I think one must distinguish between Harvard at the indergraduate level and Harvard at the graduate-education level.

I am not sure that Harvard is so great at the undergraduate level. Start with brights kids anxious to meet other bright kids with good financial and social connections. Then you can teach them anything well or not well and they still come out bright kids. What is Harvard's value-added intellectually. I know what its value-added is socially, economically and business-connection wise. As long as Harvard doesn't do too bad educationally, it makes sense to continue to view Harvard as a focal point for the rest of the "value". There are heavy costs to this changing.

In any event, among "truly" smart people the University of Chicago is viewed as number one.

It's something of an open secret among those involved in higher education that for undergraduate education Dartmouth and Princeton are the superior choices in the Ivy League.

It is a little know secret that the best and the brightest attend the best school in the country, [insert your school name here].

What's the annual tuition at [insert your school name here] and how does it compare to Wossamotta U?


What is your maximum willingness to pay?

And, can you get a loan that is guaranteed by someone other than us?

IMHO the best undergrad education in the US is to be had at the "teaching colleges". Good teachers and good researchers are two very different personalities and any overlap is quite rare and coincidental. In fact, often, a strong drive to excel in research actually detracts from good teaching.

I wonder if the whole system may not be better off if undergraduate education were entirely decoupled from the Research+Grad_School machinery. Is there any synergy at all?

What is going on here? There is no best for all categories of student. Almost none of my high school class would have survived my college experience while I benefited in many ways.

I'm not persuaded at all, for two reasons.

First, Harvard is the university of choice for the elite in the most "dominant' country in the world, a country with a huge labor and consumer market, that has had the highest world GDP for over a century, etc. So why wouldn't an university in this position be "dominant"? What can you say about the make-up of the Board of Trustees in this situation, other than "well it doesn't seem to screw a good thing up"?

Second, I assume that "dominant" in this context translates into the tautology of "highest reputation". I've seen arguments, some made by other commentators on this site, that in terms of imparting knowledge undergraduate education at Harvard is not really that good, especially given what you would expect from its situation and reputation.

So how does the governance of this institution differ from that of Oxford during the nineteenth century?

It is well established that one attends Harvard for the prestige and connections. The board promotes exactly this attitude, to the benefit of students and alumni. What's not convincing?

However, the studies that show that those accepted by Harvard, but did not attend Harvard, do not have statistically different outcomes than Harvard alumni seems to indicate that Harvard is very good at identifying talented students rather than providing any special benefit. So you should have your children aspire to be accepted by Harvard and then go wherever they want.

One always has to separate undergrad from grad education. As has been pointed out, you don't need outstanding undergrad education for H to be worthwhile. However, the puzzle that needs explaining is the dominance of graduate education and advanced research at the elite US schools vis a vis everyone else. Indeed, one could argue that the undergrad schools have free ridden off this reputation and network to the point where they are actually worse than many institutions here and abroad for pure education as opposed to networking.

The success of the US is about the upper tier research. The fact that it's more than money and GDP can be seen by the relative failure of Japan's schools to do well in the international market relative to its vast wealth and high human capital. Even when some measures show catchup in publications and citations, it's still the case that elite scholars from abroad would prefer most top US institutions to top schools anywhere in the world especially once we control for country of origin.

Having spent many years at Harvard, I have yet to observe a single educational outcome which I could connect to this alleged "alumni control" of the university.

Maybe in some of the buildings where classes are taught? Aren't they mostly named after generous alumni?

Alumni do not seem very successful at preventing affirmative action for racial minorities at elite school.

Female admissions -- maybe. Most people have daughters.

Affirmative Action was a positive signal for many years, and I don't believe it has become a negative signal for the elite in our nation yet. A hot topic to be sure, but the elite aren't concerned with libertarian views.

Harvard is a little complex in its governance structure. There is the Board of Overseers, all of the members of whom are elected by the alumni. Since the late 1800s (from my recollection), this organization has had little power. It mostly "advises", "counsels", and "consents". The President and Fellows of Harvard College -- now that's where the real power is. Those guys don't get elected by the alumni and not every member is an alumnus/alumna.
So I'm not sure what the author meant by "alumni control" at Harvard since the real power is in the hands of a board that is not actually answerable to the alumni.

The veracity of any educational system ought to be measured by knowledge production, not opinion production. In other words, the ability to apply knowledge to improve the world, rather than opine about it.

Very interesting, thanks for sharing.

Wiki wrote: "it’s still the case that elite scholars from abroad would prefer most top US institutions to top schools anywhere in the world especially once we control for country of origin."

I agree, and let me give three reasons why.

1. Full professors at the top USA universities, especially in law, medicine, business, and economics, are better paid than they would be anywhere else in the world. Being a professor at Harvard, Princeton, Chicago or Stanford also comes with enormous prestige.

2. To my knowledge, the only country whose research funding is of the same calibre as that of the USA (esp. NSF and NIH), is Germany. Ready access to ample research grants is an imperative in academic science and engineering.

3. In the USA, universities are administered by Associate Deans, who started out as line academics, with the very valued assistance of their PAs, typically middle aged women with master's degrees in humanities. These people often have sound academic judgement. They also know when to take advice from the chaired professors. The result is that most line academics in a good USA university don't need to get involved in admin issues and in the making of academic policy other than deciding who to hire and promote.

I teach in an English speaking university outside the USA. A major drawback of the university system in my part of the world is bureaucratic and HR stupidity. For starters, pay varies by rank but not by discipline. The admin detail required to introduce a new course is grim, pompous, and shot through with political correctness. My university went whole hog whoring after Chinese students, but did not think to require them to submit TOEFL scores. Teaching evaluations are taken very literally as evidence of instructional quality. The result is that line academics are constantly locking horns with bureaucratic stupidity. Universities here are constantly under threat by power-hungry philistines with IQs of 120. A good university is administered by liberally educated people with IQs of 150, who detest the trappings of rank and power.

I do not wish to denigrate the value of trustees who are alumnae. But the post omits a crucial adjective:

Successful alumnae

The trustees of a major private university (e.g., Tulane or better) are leading business executives, who value philanthropy and who have demonstrated competence in dealing with large sums of money. It is my understanding that if one is invited to join the Trustees at Harvard or Stanford, one is expected to make a nontrivial gift every year (100-500K, say) and a multimillion dollar gift at least once, enough to endow a chair, say. Better yet, enough to kick start the fundraising for a new building.

It is easier to make a lot of money in North America than anywhere else on earth. The reasons include a huge local market (economies of scale and scope), a high rate of technological innovation, politics that are relatively free of envy, and a legal system that is very supportive of private property. But Andrew Carnegie laid down, a century ago, the quid pro quo: those who do very well by the North American economy are expected to give some of it back in the form of philanthropy. The USA has the largest nonprofit sector of any nation. In 2011, nonprofits took realised $870B from the sale of goods and services, and gave away goods and services costing $280B.

Folks, the full paper is at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2039675

The statistical details about the governance of the top 100 schools (well 102 out of the top 103 schools to be precise - one school refused to share the data, and there were ties for 99th place) are given there. The higher the degree of alumni control the higher the 1) rank 2) endowment and 3) selectivity.

Some of the objections listed above are anticipated and answered in the paper. Do take a look.

Thanks to everyone for a vigourous discussion. Happy to step into the debate if Tyler permits.


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