By Richard Vedder
Bryan O'Keefe and I ventured out to the George Mason University Law School yesterday, where I was giving a standard academic presentation. An unexpected bonus was a delightful lunch with Professor Lloyd Cohen, who previously wrote a thoughtful review of my book GOING BROKE BY DEGREE.
Lloyd put a little different twist on something I have been saying for years. I have been saying that the non-profit nature of universities leads to reduced accountability, limited metrics to evaluate performance, and blurred lines of authority. But Lloyd summed it up: "who owns the university?" It is a property rights issue. There are no stockholders, although in some state universities taxpayers (citizens) would claim collectively they own the institutions. But at better schools, faculty act like they own them, making decisions generally not within the pay grade of a large group of rank-and-file employees. University administrators sometimes act like they own the institutions, often extracting some of the cash surpluses generated to better their own lives financially and vocationally. The trustees think they hold title, but usually abdicate authority.
The issue of university "ownership" goes to the heart of many problems facing universities today, along with the lack of incentives to behave efficiently with the best interests of the customers and society as the primarily consideration.