The Case for Abolishing the Higher Education State Monopoly in Continental Western Europe

Journal of Economic Studies, Vol. 37, Issue 1, pp. 36-52

Posted: 25 May 2011

See all articles by Michael S. Mitsopoulos

Michael S. Mitsopoulos

Hellenic Federation of Enterprises

Theodore Pelagidis

University of Piraeus; Brookings Institution

Date Written: jan 1, 2010

Abstract

This paper seeks to prove that the abolition of state monopoly in the provision of educational services in Continental Europe will result for the members of the educational community in spending less time towards rent protection and more time towards educational activities, something that it should also benefit the consumers of these services. It also aims to prove that once deregulation reform is introduced, those that now fiercely resist to it will, rationally, accept the new status quo and adapt to it.

We present a model in which externalities affect the decision of the community of educational services providers to allocate time among their profession and towards opposing reform and protecting rents that follow from laws that establish state monopolies in the market for education services. The model proposed shows that, in the presence of such externalities, the introduction of reforms that remove the state monopoly will make the educational community to adapt to the new status quo by allocating less time to protect monopoly rents and oppose reform, and more time and effort towards educational related activities like research and publications, high quality teaching and tutorials, etc.

The prediction of the assumed model that no internal forces can lead to a departure from the unfavorable equilibrium that exists before reform, underlines the need of society to press ahead with reforms regardless of the objections raised by the affected interest communities.

Provides for the first time in the relevant literature, an analysis of the harms and drawbacks of the higher education state monopoly in Continental Western Europe.

Keywords: State Monopoly, Higher Education, Institutional Reforms

Suggested Citation

Mitsopoulos, Michael S. and Pelagidis, Theodore, The Case for Abolishing the Higher Education State Monopoly in Continental Western Europe (jan 1, 2010). Journal of Economic Studies, Vol. 37, Issue 1, pp. 36-52, Available at SSRN: https://ssrn.com/abstract=1840546

Michael S. Mitsopoulos (Contact Author)

Hellenic Federation of Enterprises ( email )

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Theodore Pelagidis

University of Piraeus ( email )

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