Competition, we are constantly told, encourages individuals, institutions and companies to take the risks necessary for innovation and efficiency. But in higher education, competition often discourages risk taking, leads to overly cautious short-term decisions, produces a mediocre product for the price, and promotes excessive spending on physical plants and bureaucracies.
The construction arms race on campus is the most visible example of competition run amok. To become more attractive to potential consumers, many colleges and universities undertake overly ambitious expansions. In some cases, new facilities contribute to educational programs, but too often they are tangential and trap institutions in a costly cycle: The new athletic center, dorm or student center starts to look faded when competing schools open theirs, and it never ends.
It’s about “keeping up with the Joneses,” an official at Wright State University said in a Dayton Daily News article last fall detailing why colleges in Ohio were spending hundreds of millions of dollars on student centers and other nonacademic attractions in a down economy. In Georgia, state legislators are reviewing questionable practices used to fund 173 projects to build student housing, parking garages, stadiums and recreation centers.
Private universities with large endowments often start the cycle. Schools such as Harvard University and New York University, for example, take on billion-dollar debts. In a trickle-down effect, less affluent schools also feel pressure to borrow and spend -- money they do not have.