Towards Evidence-Based Reform of European Universities

After the Bologna agreement and the Lisbon Agenda, reform of European university systems has been higher on the political agenda. This is necessary, since most European universities have been suffering from stifling blankets of government regulation, having to make do with much less funds than their North-American counterparts and do not appear high on the various rankings of top universities in the world. Furthermore, the booming economies of China and India will nurture and boost world-class universities in the coming decades. Also, universities are essential in their links to business and society to make the European economy more innovative and competitive, especially as European industries approach the world technology frontier. We argue on the basis of the stylized facts that foremost European universities need more autonomy to select students, reward staff, design new programmes, attract more funds and compete better in an increasingly tough environment. Although the general principles of the policy reform agenda are clear, the details are not. The link between governance, funding and performance is not obvious and needs still further data and research. We conclude that reform of European universities should much more be based on the best available empirical analysis. (JEL code: I23)