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Why Does the U.S. Have the Best Research Universities? Incentives, Resources, and Virtuous Circles

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  • W. Bentley MacLeod
  • Miguel Urquiola

Abstract

Around 1875 the U.S. had none of the world’s leading research universities; today, it accounts for the majority of the top-ranked. Many observers cite events surrounding World War II as the source of this reversal. We present evidence that U.S. research universities had surpassed most countries’ decades before WWII. An explanation of their dominance must therefore begin earlier. The one we offer highlights reforms that began after the Civil War and enhanced the incentives and resources the system directs at research. Our story is not one of success by design, but rather of competition leading American colleges to begin to care about research. We draw on agency theory to argue that this led to increasing academic specialization, and in turn, to more precise measures of professors’ research output. Combined with sorting dynamics that concentrated talent and resources at some schools—and the emergence of tenure—this enhanced research performance.

Suggested Citation

  • W. Bentley MacLeod & Miguel Urquiola, 2020. "Why Does the U.S. Have the Best Research Universities? Incentives, Resources, and Virtuous Circles," NBER Working Papers 28279, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28279
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    References listed on IDEAS

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    Cited by:

    1. Kyle Myers & Wei Yang Tham, 2023. "Money, Time, and Grant Design," Papers 2312.06479, arXiv.org.

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    More about this item

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • N0 - Economic History - - General

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