Organizing Competition: Regulatory Welfare States in Higher Education

• DOI: 10.1177/0002716220965891
• Date: 01 September 2020
• Author: Tobias Schulze-Cleven
• Published date: 01 September 2020

276 ANNALS, AAPSS, 691, September 2020

DOI: 10.1177/0002716220965891

Organizing

Competition:

Regulatory

Welfare States

in Higher

Education

By

TOBIAS SCHULZE-CLEVEN

965891ANN THE ANNALS OF THE AMERICAN ACADEMYRegulatory Welfare States in Higher Education

research-article2020

Governments around the world have turned to higher

education to sustain economic development and social

welfare. This article uses the concept of the regulatory

welfare state (RWS) to examine how state authorities in

the United States and Germany have sought to spur

structural changes in the education sector. I argue that

policy-makers in both countries have pursued the goal

of organizing competition among universities by com-

bining fiscal and regulatory policies that strengthen

universities’ self-reliance, rivalry, and decentralized

decision-making. The analysis shows that understand-

ing cross-national patterns of institutional transforma-

tion requires putting countries’ evolving regimes of

state-university relations into historical perspective, and

that states’ shifting governance strategies are important

drivers of higher education’s contemporary reimagina-

tion. It also clarifies how regulatory approaches to

welfare provision have fostered the re-composition of

public infrastructures, raising pressing questions about

the quality and scope of the welfare that regulatory

approaches promote.

Keywords: higher education; university; welfare state;

regulation; competition; United States;

Germany

Around the world, governments have placed

higher education at the center of their

attempts to sustain economic development and

social welfare, hoping that colleges and univer-

sities will help to generate the human capital

that policy-makers see as necessary for the

twenty-first century’s “global knowledge econ-

omy.” The discursive embrace of higher education

has driven substantial growth in the sector, partic-

ularly in its more advanced offerings. Between

1995 and 2011 alone, the average expected cohort

share of graduates from theory-based academic

Tobias Schulze-Cleven is associate professor and co-

director of the Center for Global Work and Employment

at the School of Management and Labor Relations,

Rutgers University-New Brunswick. His research exam-

ines the comparative political economy of labor markets

and higher education across rich democracies.

Correspondence: tobias.schulzecleven@rutgers.edu

REGULATORY WELFARE STATES IN HIGHER EDUCATION 277

programs across the OECD rose by 20 percentage points and graduation rates

for doctorates doubled, while rates for shorter and more practical vocationally

oriented tertiary qualifications remained stable (OECD 2013, 55). Transformative

structural changes abound, both within universities and in their relationships

with broader society.

Core institutional features of higher education have rapidly evolved, including

universities’ forms of legal incorporation, their funding streams, approaches to

budgeting, human resource management practices, and modes of instruction

delivery. While local contexts continue to exhibit a wide degree of variation, there

have been clear cross-national tendencies: for the higher education sector’s

growth to increase the relative importance of private and for-profit universities;

for student tuition to develop into an important complement to (and even substi-

tute for) state subsidies; for universities’ internal financial allocations and steering

to become more flexible and “responsibility-centered”; for the labor conditions

of many academic workers to become more precarious; and for virtual teaching

and so-called MOOCs (massive open online courses) to gain prominence. Across

particular national contexts, many commentators see higher education as being

in “crisis,” which is a testament to the real tensions between the rising expecta-

tions of the sector’s contributions to individual and collective aspirations on one

hand, and the significant financial, organizational, and individual costs associated

with its structural reform on the other.

This article explores contemporary institutional changes in higher education

through the lens of the regulatory welfare state (RWS), a concept that David

Levi-Faur (2014) proposed to capture the growing role of regulation in states’

attempts to sustain the well-being of citizens. The purpose of the analysis is two-

fold. First, it seeks to leverage the RWS concept to uncover underappreciated

commonalities in higher education’s transformation across different national

contexts. Such findings are valuable for a better understanding of the global

dynamics of higher education reform, as well as for theorizing their broader

implications for national systems of democratic capitalism. Second, the analysis

strives to use newfound clarity on sector-level dynamics to refine theorizing on

the RWS itself, including Levi-Faur’s notion that regulation has come to the res-

cue of fiscal expenditures (Levi-Faur 2014, 610), which had supposedly “grown

to limits” by the end of twentieth century (Flora 1986).

The analysis focuses on state strategies to spur structural changes in higher

education across the United States and Germany, homes to world-leading univer-

sity systems.1 Each country closely represents a different institutional ideal type

identified in comparative political economy scholarship, with the “liberal” United

States relying far more heavily on market-based social coordination than “con-

servative” and corporatist Germany (Esping-Andersen 1990; Hall and Soskice

2001). In other words, from systems of social and labor protections to corporate

governance and finance, American institutions prioritize the choices of consum-

ers, workers, managers, and investors, leaving individuals exposed to the vicissi-

tudes of markets. Germany, in contrast, provides stronger institutional mechanisms

to pool resources for collective long-term benefit, whether through state-spon-

sored social insurance or by empowering cooperation between unions and