Comparing Efficiency of Public Universities Among European Countries : Different Incentives Lead to Different Performances

In this paper we study the feasibility of the European EU2020 goal of increasing the number of higher education graduates, considering large differences in incentives and funding schemes between countries in Europe. We conduct an efficiency analysis on 13 Dutch and 58 Italian public universities. Our findings show that the relative efficiency of Italian and Dutch universities is strongly influenced by the policy perspective adopted. If the goal is to realize the European goals and minimize resources employed for obtaining a high number of graduates, Dutch universities turn out to be more efficient. However, Italian universities are much more efficient if the priority is to minimize the costs for a given level of activity, such as number of students. The main policy consequence of our findings is that it will be hard to realize European goals if not all countries have incentive scheme that are in line with these goals