No Dominant Solutions

We were reading Bobby Jindal’s Legacy by Dan McLaughlin in the National Review and thought that it is hard to have a dominant solution to a problem in the real world.  A dominant solution is, we think -it has been a long time since grad school, is when somebody is better off and nobody is worse off.  In the real world it is hard to avoid somebody being worse off.  Free trade is a common example.  It makes both countries better off but they could be some folks in one of the countries that are worse off.  It is possible that governments could find a dominant solution by taxing the surplus created and taking actions to eliminate the problems of the worse off.  Alas, governments tend not to be that effective.

In particular, we were struck by Jindal’s University reforms.  Jindal reduced direct funding and increased scholarships.  He also made them more accountable by using enrollment to determine funding.  He also allowed schools more leeway in setting tuition.

Sidebar: Louisiana, McLaughlin reports, has 14 state universities, more than many larger states, and Jindal tried to eliminate redundancies.  In particular, he tried to merge the historically black Southern University of New Orleans with mostly white University of New Orleans that are just two blocks apart.  Of course, there would be great savings in administrative costs but it fell one vote short.  Wisconsin has a larger area and a larger population with 11 comprehensives (bachelors and master) and two granting doctorates as well as two year campuses called colleges.  We think that 13 (11 + 2) compares to Louisiana.  If so, 14 is too many.  We have often argued that the many Wisconsin campuses have led to useful competition but the less successful need to trimmed.  We would have supported Jindal’s proposal to merge schools.  End Sidebar.

Leeway for tuition, scholarships, and funding based on enrollment are great ideas.  Wisconsin schools are fighting for leeway in setting tuition.  Of course, the successful schools are more interested in tuition hikes.  The less successful schools face a more elastic demand curve.  Scholarships allow a school to adjust price to compete for students of lesser means or great quality.  It allows public schools to compete with private schools that have great pricing flexibility.  Funding based on enrollment seems obvious.  Who could be against these changes?  Generally, it would be the less competitive departments and schools.  Before reforms their funding is assured.  After reforms they could be reduced or eliminated.  Their local legislators share their pain.

There is a real issue for the university too.  They need to support some low enrollment departments to be a university.  Some times there are compact solutions like teaching Russian via distance learning or having a large Biology lecture to support small lab sections.  Other times the solutions involve departments and colleges.  The many administrators need to earn their money.  Sometimes they will earn it by reducing the number of administrators.

We need to encourage freedom for state universities so they will compete to produce the best outcomes.  Jindal took steps in that direction.  The result won’t be perfect.  Give the schools some leeway and evaluate them based on their results.


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