“Policy scepticism” and the impact of Scottish Higher Education Institutions (HEIs) on their host region: accounting for regional budget constraints under devolution

Kristinn Hermannsson, Peter McGregor, John Swales, Katerina Lisenkova

Research output: Working paperDiscussion paper

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Abstract

A “policy scepticism” has emerged that challenges the results of conventional regional HEI impact analyses. Its denial of the importance of the expenditure impacts of HEIs appears to be based on a belief in either a binding regional resource constraint or a regional public sector budget constraint. In this paper we provide a systematic critique of this policy scepticism. However, while rejecting the extreme form of policy scepticism, we argue that it is crucial to recognise the importance of the public-sector expenditure constraints that are binding under devolution. We show how conventional impact analyses can be augmented to accommodate regional public sector budget constraints. While our results suggest that conventional impact studies overestimate the expenditure impacts of HEIs, they also demonstrate that the policy scepticism that treats these expenditure effects as irrelevant neglects some key aspects of HEIs, in particular their export intensity.
Original languageEnglish
PublisherUniversity of Strathclyde
Number of pages41
Publication statusPublished - 2010

Publication series

NameStrathclyde Discussion Papers in Economics

Keywords

  • Higher Education Institutions
  • Scotland
  • impact study
  • multipliers
  • public-sector expenditure
  • devolution

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