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The Third Revolution Part Three: University of California bond issues

October 5, 2011

Now out in print and online, Part Three of the Research Fortnight series, The Third Revolution.

It follows on from Part Two, which covered the history of bonds issues by English universities, to look at the recent history of University of California.  UC has close to $13 billion of bond debt and rapidly rising tuition fees.

It is currently available to those studying or working at subscribing institutions.  Please choose the ‘campus access’ option on the right.  If that doesn’t work, please contact your relevant research office for a login.  If you still have trouble, please let me know.

  1. This is a useful piece. California makes an interesting parallel and certainly a welcome change from viewing the US as if Harvard and Princeton were the only universities worth talking about.

    There are some major differences between California and England (other than the weather) that are worth mentioning though:
    – By all accounts, California has a pretty grdlocked and disfunctional political culture. In England, the political class seem to be pretty clearly agreed that capped fees are the only way forward (and advance other proposals only when they feel sure they won’t have to implement them);
    – California is not a sovereign state, which creates the possibility of spending crises that no-one wants. In Britain, by contrast, we only get spending crises when the Government wants to have them, because if the Government wants a pound to spend, it can always just print one;
    – there is a strong and well-established tradition of political intervention in the running of the University of California (remember what happened to Clark Kerr);
    – perhaps most importantly, the University of California is a single system of vast size, whereas the UK has many independently governed institutions. Governance failures are probably more common in the UK, but when they happen they have less impact and are easier to address, because only xcomparatively small institutions are affected.

    Look forward to the next part.

  2. Thanks. These are all very valid points and ripe for further discussion. The difficulty for assessing what’s going to happen in the UK is that it is hard to find comparators. UC is imperfect for some of the reasons you cite, but I feel the changed requirements of governance from publicly-supported to privately financed will resonate here. Plus, the tuition fees bonds axis may also be crucial. Th easiest way to avoid some institutional difficulties down the line may be to ease the cap. If you’ve any other suggestions for comparators, I’d be very interested to hear about them.

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