The University and the Economy

The University and the Economy

Pathways to Growth and Economic Development

Aldo Geuna and Federica Rossi

This book provides readers with an in-depth understanding of the many ways in which universities contribute to economic development and growth. It demonstrates the causal interactions between universities’ activities and economic outcomes, and presents up-to-date quantitative and qualitative data in support. The authors present the theoretical tools and evidence to explain the manner and degree to which universities’ activities impact the economy, as well as analysing the comparative strengths and weaknesses of specific university systems.

Chapter 5: Measuring universities’ performances: an international comparison

Aldo Geuna and Federica Rossi

Subjects: business and management, management and universities, economics and finance, economics of education, economics of innovation, education, management and universities, innovation and technology, economics of innovation


Several trends in university management and funding have led to increased interest in the measurement of the extent and the efficiency to which universities carry out their institutional activities. Firstly, universities have become increasingly accountable to the stakeholders that, directly or indirectly, finance their activities. These include both the agencies and the individuals that directly pay for the universities’ provision of services (ministries, public funding bodies, students), and the taxpayers who support public tertiary education through the tax system. Consequently, universities are increasingly called upon to justify the effectiveness and efficiency with which they employ their resources. The trend towards greater accountability of higher education institutions began with the emergence of the theory of ‘new public management’ (NPM) in the 1970s (Pollitt 1990). The key aspects of the NPM approach are the focus on the efficient management of resources and on performance assessment, the use of quasi-markets and outsourcing in order to promote competition, the emphasis on outcomes rather than procedures and the reliance upon short-term contracts and monetary incentives (Pollitt 1990; Hood 1991). Over time, this approach has spread from the United States and other English-speaking countries to other parts of the world (Pollitt 1990), including Southern Europe.

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