Students – Winners of all Competition!

Competition, we are constantly told, encourages individuals, institutions and companies to take the risks necessary for innovation and efficiency. But in higher education, competition often discourages risk taking, leads to overly cautious short-term decisions, produces a mediocre product for the price, and promotes excessive spending on physical plants and bureaucracies.
Ford Motor Company wants you to buy a Focus. VW wants you to buy a Golf. Knowing that you can buy either, both companies try to woo customers by designing a good car and selling it at a good price.
Universities do not compete in the same way. The student quota system, imposed by government and supported by the sector, guarantees that universities and colleges will get the expected number of students each year. “Top” universities are particularly well insulated from competitive pressure, since they get far more applicants than they can accept. Frankly, whether you have five or 10 applicants per place makes little difference.
This weakens the incentive to think about students at the institutional level. In elite universities, no one is worrying that if the courses are not good enough, if the faculty doesn’t teach well enough, if the feedback isn’t helpful enough, then they will fail to get enough students and go bust. Since their principal rivals cannot expand, they are all but guaranteed to get the students they need. As Nobel prize-winning economist Sir John Hicks remarked in 1935: “The best of all monopoly profits is a quiet life.”
Of course, many faculties teach well, but they do so because they believe they should. Others do not, and the pressures to change are muted
The government’s liberalisation of university entry is a sign that things may be moving in the right direction. It won’t lead to cuts in fees, but it might lead to better teaching. 

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