The Case for Abolishing the Higher Education State Monopoly in Greece

Abstract

In Greece, the provision of tertiary education is permitted, by the constitution, only to 'public' institutions where faculty and administrators are civil servants and public officials respectively. We present a model that describes the situation observed in Greece, where the community of tertiary education providers decides in the name of the whole society on the extent to which the provision of these services is a (state) monopoly. We see that in the context of our model the society has to override the decision of the educational community regarding the provision of these services if it desires to see the community of educational services providers to allocate more time towards their profession and less time towards rent protection and/or extraction. Our model predicts that once reform, that is the removal of the state monopoly, is introduced the educational community that now allocates time to protect the monopoly rents and oppose reform will allocate more effort towards educational related activities and less effort towards rent protection while at the same time it will accept a new equilibrium in which education related activities are rewarded more generously. Descriptive statistics concerning higher education performance in Greece confirm that today tertiary education in Greece resembles to the textbook case of a monopoly.

Keywords: Higher Education, Greece, Institutional Reforms, Time Allocation, Nash Equilibrium, Voting

JEL Classification: I22, I28, K00