A quality higher education system meets national and personal needs and underpins economic growth. A quality system must therefore comprise diverse institutions. A nation’s higher education system should not be judged solely on the output of its research-intensive universities. International comparisons highlight the strengths and weaknesses of national systems. Nevertheless, benchmarking must be done judiciously. The ‘best’ national system for a country will differ according to its stage of economic development, political structure, natural resources and population size. Comparisons are best made like-for-like. This chapter categorises the various functions performed by tertiary institutions: research, teaching and scholarship are cross-classified by whether they are internal activities or involve external engagement. The associated performance measures and data requirements are discussed. Some empirical results for selected outcomes are presented for 50 countries; the need to control for a country’s income level is emphasised. Outcomes are matched with determinants, especially types of funding. No clearly preferred model emerges, although research performance can be improved relatively quickly by targeted government funding. The split between private and public expenditure and between private and public institutions is not important so long as the structure is accompanied by policies that ensure appropriate total funding and promote competition between institutions.
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