The Brussels-based think tank, BRUEGEL, is rankling some feathers with its report on the performance of European universities, “Why Reform Europe’s Universities?” (full report loads in pdf form). According to its methods (which I won’t analyze–note attention to patenting below), American universities perform vastly better than European, with some American states beating out higher education in all European nations.

Chart from BRUEGEL Report

Explanations focus on spending, especially the amount spent on research. What I find interesting is that the report also focuses on the governance of universities,
noting that administrations of Americans universities have greater latitude in determining how to spend available funds.

There is considerable variation in university governance across states. States vary not only in the relative importance of private versus public universities, but also in the degree of autonomy granted by state authorities to public universities. Sometimes, even neighbouring states display sharp differences in governance. For instance, public universities in Illinois enjoy on average rather low autonomy, while their neighbours in Ohio enjoy high autonomy. These differences are persistent over time and often go back to the idiosyncratic origin of American universities, which in turn reflect differences in the preferences of university founders … .

Our strategy is to take US states’ differences in university autonomy as given and then ask the following question: Does a given investment in higher education produce more patenting in a US state if universities in that state are more autonomous? … The answer to our question is a resounding ‘yes’. As illustrated in Figure 2, the effect of additional spending on patenting is roughly twice as high for states with more university autonomy. Autonomy therefore greatly enhances the efficiency of spending.