Saturday, September 7, 2013

The Unintended Consequences of Ending Shared Governance

As I wrote in my last post, efficiency-minded legislators are raising questions about the role faculty play in decision-making on campuses across the University of Wisconsin System, and whether shared governance represents an expensive and wasteful practice.

I understand where these folks are coming from. Involving more people in decision-making is costly, in terms of time in particular.   But attending only to those costs without considering the benefits is short-sighted and will generate unintended consequences.  This is because economic evidence indicates that the costly process of shared governance generates cost-savings as well.  It seems that without the cost-savings generated by shared governance, college would be even more expensive for Wisconsin families.

Professor emeritus Robert Martin of Centre College explains this counter-intuitive process in a set of papers written over the last 15 years, and most recently summarizes his conclusions in a paper written for the American Enterprise Institute, titled "Higher education governance: a barrier to cost containment." That paper examines the hypothesis that former student Regent and current Representative Robin Vos expressed at the recent Regents meeting: that "facets of the governance structure push higher education toward higher costs, minimal transparency about outcomes, and a low level of quality control."

Martin finds that Vos is right in one sense-- the governance structure matters for college costs.  But his evidence points to the opposite conclusion that Vos and his colleagues reached-- the answer is increasing the faculty role in governance, not decreasing it. He describes this finding using clear and accessible prose in a piece authored for the Chronicle of Higher Education, "College costs too much because faculty lack power."  In it, he explains that "it is not the "shared" part of "shared governance" that has failed; quite the opposite. The fault lies in the withering away of the shared part. Reason and data alike suggest that the largest part of the problem is that it is administrators and members of governing boards who have too much influence over how resources are used."

In a recent email to me, Martin provided an analysis of the University of Wisconsin-Madison, where the trends mirror those described in his national work. In his words,

 I attach a Word file that contains a summary statistical table for University of Wisconsin-Madison (see below) that corresponds to Table 1 in my SSRN article with Carter Hill on "Measuring Baumol and Bowen Effects in Public Research Universities." There are several things to note. 

1) The dramatic increase in reported spending for instruction, research, and public service after 2008 [which supposedly] came out of overhead and into academics. See my SSRN article on "management" of financial reporting in higher education -- that article will be published this month in Challenge. [Note to readers: this paper concludes that while this apparent resource reallocation might be legitimate, they may also be indicative of a new "management" of financial reporting that simply reclassifies expenses, as frequently done by corporations.]

2) If you look at the pre- and post-2008 staffing patterns for academics versus administrative staffing you will see reductions in academic staffing and increases in administrative staffing after 2008. So, it is hard to explain where the supposed increases in academic spending and reductions in overhead spending could have come from.

3) Throughout the 1987 to 2008 period the university economized on the use of tenure track faculty while rapidly expanding the number of nonacademic professional employees.  If tenure track faculty are the primary cause of higher cost, it is clear they are not very good at looking after their own interest.  Clearly, tenure track faculty would want more of their own and fewer contract and part time faculty and would not prefer more administrative staff.


While I appreciate Robin Vos's attention to college costs, on behalf of Wisconsin families I do hope he will take this information into account when deciding how to work on lowering them.  Relying on instinct rather than evidence could have disastrous consequences for the state's future workforce.