The Liberaltarian Case Against Excess Higher Ed Regulation

Matt Yglesias has been blogging a lot about  how progressives shouldn’t let the general deregulatory enthusiasm of pro-business conservatives dissuade them from opposing regulatory regimes that benefit rent-seeking incumbent firms to the detriment of everyone else. This reminds me of a state higher education regulatory issue that I imagine most people care little about: program approval.

States technically control access to the higher education market by building public colleges and universities and chartering private non-profit institutions, but that hardly ever happens anymore. Price controls are a mixed bag and hard to enforce–witness the proliferation of mandatory fees on many campuses that technically fall outside the umbrella of regulated tuition. In practice, state higher education regulatory bodies spend a lot of time approving and disapproving individual programs at existing public institutions.

Like many regulations, program approval and the broader coordination of institutional missions makes sense on a number of levels. Every public institution in a state can’t be focused on students with a median SAT of 1300, as much as they all might want to. And given the high cost of building and maintaining certain programs–medical schools are the obvious example–it’s a good idea to apportion them with some care.

But as is often the case, poorly-conceived regulations can create winners and losers with corresponding incentives for the winners to manipulate the process to their advantage. So it is in Maryland, where program approval is complicated by the state’s history of racial discrimination.

Program duplication was major component of  higher education segregation, as when Texas tried to justify denying Heman Sweatt admission to the University of Texas Law School by creating a makeshift law school for black students at what became Texas Southern. Like many states, Maryland had similar racist policies. But the way the state chose to fix them is odd (albeit backed by legal precedent) It decided that only historically black colleges and universities could offer certain programs, under the theory that more white students would then enroll.

The policy hasn’t worked very well. But once the government gives somebody a regulatory monopoly over a market, you can be sure that somebody will fight tooth and nail to keep it.  This dynamic reached a kind of apex of absurdity last year, when historically black Morgan State University objected to the University of Maryland University College creating a new online doctoral program in community college administration, the result being that UMUC was allowed to offer the program to anyone in the world except people who live in Maryland. Morgan State seems to have spent impressive amounts of time and energy over the last decade fending off attempts by other state universities to offer generally non-controversial programs like master’s degrees in business administration.

This makes sense from the standpoint of naked self-interest. But it’s hard to argue that minority students in Maryland benefit from preventing a well-regarded institution like the University of Maryland Baltimore County–whose student population is 43 percent non-white, whose record of producing minority PhDs in science, math and engineering is nationally-recognized, and whose president marched for civil rights in Birmingham with Martin Luther King–from offering a bachelor’s degree in electrical engineering. Yet that’s what happened.

The result is that state higher education regulatory agencies end up creating elaborate procedures for program approval, institutions that enjoy the fruits of regulatory restriction expend lots of resources protecting their turf, and meanwhile whole realms of higher education policy–like whether the programs in question are any good–remain essentially unexamined.