The Great Accountability Ripoff

By Richard Vedder

The Spellings Commission and the Department of Education, continuing into this administration, have criticized colleges and universiites for their lack of accountability and transparency, particularly their failure to provide consumers with useful information that would make college choices easier for potential students. In response, two groups (the National Associaiton of Independent Colleges and Universities) and a combined effort of the Association of Public Land Grant Colleges and Universities and the Association of State Colleges and Universiites) announced with great fanfare a couple of years ago their own user friendly accountability systems, with lots of information to be available to students that would help make good college choices. Rather than be regulated in the matter, the colleges were responding voluntarily. (see the accompnaying blog by Doug Lederman giving more details of these efforts and the new study assessing them).

At the time, I wrote favorably about these efforts, but I also expressed skepticism whether they really would provide the necessary kinds of information. My fears, apparently, are justiified, as the new report of Chad Alderman of the Education Sector and Andrew Kelly of the American Enterprise Institute indicate. There is little data available in these accountability systems to make easy inter-institutional comparisons. They are not terribly user friendly. And so on.

This gets to the critical higher education problem --the failure to provide good useful information is because there are virtually no incentives to do so --indeed, there are considerable disincentives. Why, for example, if US News says you are the 15th best liberal arts college, should you reveal data that shows you are not as good as schools ranked, say, 40th or 60th? Why take risks and tell people too much about what you do? Limited interinstitutional tests of knowledge by the Intercollegiate Studies Institute are embarassing for many top schools --seniors at Duke seem to know less than freshmen, for example. More comprehensive data might extend the embarassment into catastrophe for some of these schools --School X is simply not worth the $40,000 the school asks.

I am becoming totally convinced that fundamental restructuring of higher education is necessary --we need revolution, not evolution --because evolution is slow, costly, self-serving and ineffective. Revolution means dealing aggresively with the three I's of reform --information, incentives, and innovation. We have to make colleges WANT to change in a positive manner, and that is very, very difficult in a system where governments and private donors drop money out of airplanes (or the equivalent) over college campuses and student homes to finance an increasingly costly and inefficent system.