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The $10 billion Saudi university
A picture is here and yes they claim the finished version will have both male and female students and Western faculty. A question we've been asking over lunch lately is the following: how much would it really cost to set up a first-rate university -- and not just a technical school -- in Asia? Let's say an Asian businessman were willing to put up $10 billion in endowment: how good would the school be? I see three major problems:
1. Many Asian governments cannot precommit to respecting academic free speech; nor for that matter can the Saudis.
2. An excellent university must be part of an intellectual network near other excellent universities. Arguably with the internet this effect is weakening over time. Still, if they tripled my salary I wouldn't move to Saudi Arabia or for that matter Japan and that is for reasons related to network effects.
3. Such universities could not precommit to the governance systems (please don't laugh) that have been so effective in bringing American schools to dominate the world rankings. In fact the more money that one person or government gave, the greater the commitment problem might be. By these governance systems I mean faculty control of appointments, with academic-based monitoring by the Dean and Provost, independent boards, and Presidents willing and able to raise enough money to maintain financial independence for the future. That's a pretty tall order but you'll find all those qualities in the successful American colleges and universities. Long-run financial independence also requires a more general culture of philanthropy which is found only in the United States.
Technical schools aside, I do not expect American colleges and universities to lose their leadership role in the immediate future. And if they do, the real competitors will prove to be Europe, the UK, and Canada, not Asia.
Posted by Tyler Cowen on April 15, 2008 at 05:50 AM in Education | Permalink
Comments
So, you are also pessimistic about universities in China, HK and Singapore?
Posted by: Adrian at Apr 15, 2008 7:37:35 AM
I agree with most of TC's assesment. I
will add that network externalities
in the primary reason university
systems grow in fits and spurts.
At the end of the day, we must not
forget that universities can't thrive
unless there is demand for what they are
selling which is education and credentials.
In India at least there is big demand for
higher ed and I expect externalities to
kick in the next 25 yrs or so.
On a related note, the internet is less
of a threat to higher ed than is commonly
believed. Professional degress like the
MBA are going to face much more strenuous
competition from the CFA and similar such
examples.
Posted by: sa at Apr 15, 2008 8:31:42 AM
>> Long-run financial independence also requires a more general culture of philanthropy which is found only in the United States. <<
Home of the brave, land of the free. God Bless America. However, your notion is pure American chauvinism and elitism. You seem to give voice to the assumption that the American model is not only best but irreplaceable. Are you also implying that the value of a school can be measured by its endowment?
At many of the leading schools around the world, and you'll find institutions at least as old and prestigious locally as Harvard or Yale, which find means other than philanthropy to maintain financial independence.
The most absurd part of your statement is that past practices are the only model for the future. Among the other current and future means of maintaining financial independence are:
1. Government funding (donors are no less persuasive than government in advancing their agenda)
2. Licensing of intellectual property developed at the university (a successful medical research department could fund many unprofitable economics and literature departments)
3. The new American model: make those who can afford it pay exorbitant tuitions. Rather than wait for alumni donations, extract the money while the student is still reliant on the school. Who is to say what a top class education is worth to a Saudi prince?
Posted by: Dan Collier at Apr 15, 2008 8:52:30 AM
A mirage in the desert.....Why are all the people in the drawings European-looking?
Posted by: Chairman Mao at Apr 15, 2008 9:41:18 AM
Dan, your first and third proposals are not ways of obtaining long-term financial independence. Government funding is neither long-term nor does it lead to independence. The role of past donors in influencing the current policy of an institution is necessarily minimal, particularly in comparison to the influence of government in such a regime.
Raising tuition prices is again not a solution to long-term funding problems, since there is no guarantee of tuition revenue. The school would be at the "mercy" of market forces. Moreover I question whether that is the model at any American university. If anything the trend is towards free tuition, funded by endowments. I also imagine a Saudi prince would be willing to pay little more than the cost of an education at the best American university.
Posted by: Cliff at Apr 15, 2008 9:43:42 AM
My experience, from working in a Middle East university, is that the Arabs like building things, which is fun, but don't like runing things, which is boring. So shortly after the building phase is over the interests of the rulers moves on to the next big building project. They often don't want to spend a lot of money on operating these places, which means that the high-flying westerners they hire to run them leave in frustration after a few years, and management gets turned over to crooked, incompetent third-world administrators who are willing to work for less than westerners. Then it all goes to crap as cronyism, corruption and petty power-mongering supplants whatever commitment there was to academic integrity.
This story has been played out time and time and time and time again in the Middle East, and I find it unlikely (although not impossible) that the Saudis will break the cycle with this project.
Posted by: Bartman at Apr 15, 2008 9:50:24 AM
Quite a lot to disagree with today:
1. I imagine they would set up the technical school first, and later expand it. If I remember correctly, once upon a time MIT only taught mechanical and civil engineering.
Also, arguably the most important areas are the professional ones (engineering/business/law/medicine), and related areas (science/econ/other assorted subfields). Would the world really care if Harvard/Yale/Princeton all simultaneously dropped their english/womens studies/philosophy departments?
2. I'd go to Saudi Arabia for a year or two if they tripled my salary. Of course, they will only make such an offer to good people, rather than deadwood.
Also, the intellectual network need not include only other universities. Connections to industry are just as useful, if not more so.
Of course, I'm a little skeptical of this particular university. Everyone in the pictures is wearing a suit! I certainly could not work in the desert wearing a suit.
Posted by: mathgeek at Apr 15, 2008 9:54:33 AM
Surely what you need for a top-class university are top-class facilities, top-class faculty and top-class students. Money can buy all of those.
An awful lot of the Europeans who go to teach in the US do it (a) part-time and (b) for the money. Those who can that don't, go usually don't go because of emotional ties to their home country but more, academic freedom. Pressure to publish is far less at Oxbridge than at the top US universities for example.
If the Saudis (or anyone else) offer faculty enough money and academic freedom, people will go - even if only part-time. And if they offer cheap tuition they will get great students too.
Posted by: Finnsense at Apr 15, 2008 9:58:51 AM
An excellent university must be part of an intellectual network near other excellent universities. Arguably with the internet this effect is weakening over time.
My sense is that as more and more academics are part of two-academic-career couples the importance of being near other universities is increasing: a college/university can make an attractive offer to an academic, but if there aren't attractive opportunities for the spouse in the area, that offer is going nowhere.
Posted by: alkali at Apr 15, 2008 10:03:40 AM
Tyler,
There is an interesting new article in New York Magazine about NYU's plans to open a new full-service campus in Abu Dhabi. Here is the link:
http://nymag.com/news/features/46000/
Posted by: Robby at Apr 15, 2008 10:13:00 AM
"the governance systems (please don't laugh) that have been so effective in bringing American schools to dominate the world rankings": that gives insufficient credit to Hitler.
Posted by: dearieme at Apr 15, 2008 10:17:43 AM
There looks to be a pretty basic confusion here about the impact of funding on university independence. If the funding is non-marginal, it does not matter much where it comes from. Public authorities committment to the general funding of universities figures in my list of future liabilities that governments forget to enter into theri balance sheets. As a matter of accounting,it could and should take the form of giving the university a block of government debt; the efects would be no different.
Where the marginal funding comes from can be expected to influence university behaviour, and does so. If an Islamic government sets up a university and leaves its marginal funding to the Islamic tradition of charitable giving (arguably even more generalised than the US custom), curbs on the university's independence would not be the result of how it was financed. Equally, if the Chinese regime gives basic finance to a university and leaves its marginal finance to student fees and commercial earnings, the curbs on free thought won't be the result of financial pressures.
A lot of differnt things depress university quality, and with it stunt the growth of intellectual networks. Here in Spain the main problem is not the fact that almost all finance comes from the public sector, it is "endogamy". Good students - or at least students on good terms with the professors - get hired where they studied as undergraduates and stick there. Academic market pressures are beginning to erode that, and the main relevant policy measure is the effort in the European Union to widen and internationalise the academic market. wider and higher quality intellectual networking seems to be following in its wake.
Posted by: David Heigham at Apr 15, 2008 10:31:46 AM
Man, the comments accompanying that NY Mag article are laughable. It seems that far too many Americans, even sophitimacated Noo Yawkers, can't comprehend that the UAE is not Saudi Arabia.
Posted by: Bartman at Apr 15, 2008 10:36:54 AM
By having a government policy against Jews visiting the country they make importing an academic culture more difficult.
Posted by: OneEyedMan at Apr 15, 2008 10:38:53 AM
Tyler, I would look at the example of medical education in the U.S. as a past historical precedent.
In the 19th century, medical education in the U.S. was backward. Doctors graduated without ever seeing patients or practicing on cadavers. There were no entrance requirements for medical school (no college degree required). The best science and medicine was practiced in Europe, specifically Germany. Like Saudi Arabia today, the vast majority of endowments were parked in theology departments. Medicine got a small fraction of what theology got.
Then Johns Hopkins University opened in the 1870s, modeled not after American institutions like Harvard (which was atrocious), but after the finest German institutes of higher education. Its med school opened in 1893 but its labs opened immediately, at first staffed by professors who though American, had gone to Germany to study and learned their laboratory techniques there. Within 20 years, the students who came out of Hopkins were running the Rockerfeller Institute (set up around the same time and quickly the preeminent research institution in the world) and modeling other American medical schools along the Hopkins model.
A few points:
For areas such as basic science, the Saudi's might have success. It's hard and tedious to get grant money for research in say . . . medicine, which is expensive to research. There's a whole lot of scientists at the NIH fretting about funding (I used to work there). Also, depending on the research, scientific research may be less "political."
I would also note that the Saudis have committed to such far reaching reforms as . . . letting women be educated! If you're going to spend $10 to try to imitate the west, you might as well do it right. You can't clamp down too much.
Posted by: A C at Apr 15, 2008 10:40:19 AM
Tyler,
If they tripled your salary, you wouldn't go to Japan? Your daughter is out of the house now, right? There are a lot of restaurants that need to be reviewed in Japan. There are a lot of economic misconceptions that need to be cleared up in Japan. Maybe journal articles would be fewer and further between, but you could still do a lot of good and be earning three times as much. Four or five years there would probably give you enough material for at least two books on culture and econ. I think you can so easily scoff that 3x your salary because the offer doesn't really exist.
Posted by: scott clark at Apr 15, 2008 10:43:24 AM
Let's not forget the unbelievable subsidies that higher education gets in the United States ... grants, financial aid, student loans, student visas, etc.
The US federal government has a bigger pocketbook!
Posted by: Rob at Apr 15, 2008 10:49:03 AM
If the federal government subsidized any industry the way it subsidizes higher education, no other country would be able to compete either.
Posted by: Rob at Apr 15, 2008 10:52:23 AM
"the real competitors will prove to be Europe, the UK, and Canada, not Asia"
What about Israel?
Posted by: anonymous at Apr 15, 2008 11:09:48 AM
after a few years, and management gets turned over to crooked, incompetent third-world administrators who are willing to work for less than westerners. Then it all goes to crap as cronyism, corruption and petty power-mongering supplants whatever commitment there was to academic integrity.
I agree with this point by Bartman. This will continue to be one of the problems confronting the development of a top level education system in developing countries, and in countries without a culture of openness in general. Because of the lack of openness I also agree with Cowen's first and third points.
I would quibble a bit with his second point:
An excellent university must be part of an intellectual network near other excellent universities. I agree with the statement, but would suggest that it may be more applicable to the Saudi Arabian University of today, rather than 30 years from now. Middle Eastern Universities are developing quickly--the UAE is developing several, and they are saying (although talk is cheap) that they want to move away from being solely technical education toward the liberal arts model.If--a very big if--the Middle Eastern universities can overcome the problems noted by Bartman and Cowen, there may be enough to create some network effects. After all, it's a geographically small region, with easy access to Europe. And if a couple universities overcome those problems, they may put competitive pressure on the others to follow the same path.
I may have the opportunity to go teach on a temporary basis in the UAE in a few years, and I'd certainly take it. I might be less enthused about taking a tenure track job there. But it could be fun to try to help them build a new world class network of universities, if you're the ambitious type.
Posted by: James Hanley at Apr 15, 2008 11:12:15 AM
I go to the University of Toronto, and I would second your comment about competition from Canadian schools. My American friends tell me that they came up to Canada because their money goes further here - apparently, U of T can offer higher-quality education for about the same tuition as their public universities.
Incidentally, I also spent last year at the University of Edinburgh, which has been positively invaded by American students. I'm not sure what that's about - tuition is quite high and the quality of education is pretty low - maybe something cultural.
Posted by: Allison at Apr 15, 2008 11:16:15 AM
I go to the University of Toronto, and I would second your comment about competition from Canadian schools. My American friends tell me that they came up to Canada because their money goes further here - apparently, U of T can offer higher-quality education for about the same tuition as their public universities.
Incidentally, I also spent last year at the University of Edinburgh, which has been positively invaded by American students. I'm not sure what that's about - tuition is quite high and the quality of education is pretty low - maybe something cultural.
Posted by: Allison at Apr 15, 2008 11:18:06 AM
Vedanta University in India aims to "join the ranks of the world’s greatest Universities such as Harvard, Stanford, and Oxford."
http://www.vedanta.edu.in/
They plan to spend $3.2 billion in setting up the university.Posted by: Seth at Apr 15, 2008 11:19:10 AM
Dearieme was below 20th post when he /she uttered: Hitler
Posted by: karl at Apr 15, 2008 11:28:12 AM
Let me go ahead and ask: Why do you think that US/European schools are bound to retain their leadership role?
I wouldn't be so confident.
The biggest factor in determining a school's reputation, especially at the graduate / research level is how much money they have in the bank. $10 Billion dollars would put this university among the top in the world. They will certainly draw students and faculty.
I can't imagine that other universities in Asia or the Middle East couldn't do the same thing.
Of course, Dubai and the other UAE countries seem more interested in drawing in branch campuses of US-based schools, but they could just as easily start building their own.
Posted by: Brian at Apr 15, 2008 11:37:33 AM
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