Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Why Does the United States Have the Best Research Universities? Incentives, Resources, and Virtuous Circles
Journal of Economic Perspectives
vol. 35,
no. 1, Winter 2021
(pp. 185–206)
(Complimentary)
Abstract
Around 1875, the US had none of the world’s leading research universities; today, it accounts for the majority of the top-ranked. Many observers cite events surrounding World War II as the source of this reversal. We present evidence that US research universities had surpassed most countries’ decades before World War II. An explanation of their dominance must therefore begin earlier. The one we offer highlights reforms that began after the Civil War and enhanced the incentives and resources the system directs at research. Our story is not one of success by design, but rather of competition leading American colleges to begin to care about research. We draw on agency theory to argue that this led to increasing academic specialization, and in turn, to more precise measures of professors’ research output. Combined with sorting dynamics that concentrated talent and resources at some schools—and the emergence of tenure—this enhanced research performance.Citation
MacLeod, W. Bentley, and Miguel Urquiola. 2021. "Why Does the United States Have the Best Research Universities? Incentives, Resources, and Virtuous Circles." Journal of Economic Perspectives 35 (1): 185–206. DOI: 10.1257/jep.35.1.185Additional Materials
JEL Classification
- I23 Higher Education; Research Institutions
- N31 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: Pre-1913
- N32 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: 1913-