NPM policy in Higher Education: a Review of Effects on Universities’ Efficiency and Productivity

Research in the fields of public policy and efficiency evaluation in higher education intensifies amid the NPM spread. This paper advocates the need to increase awareness on whether universities transform and modernise their operations under performance-enhancing policies, and systematically reviews the existing empirical evidence on the effects of such policies in terms of efficiency and productivity. The study classifies the mechanisms of public intervention as ‘state as financier’, ‘the structuring state’ and ‘the autonomy steering state’. The synthesis of the fragmented evidence on the effects of public interventions in terms of universities’ efficiency and productivity addressed by data envelopment analysis and stochastic frontier analysis methodologies is follows. Enhancement of competitive environment and higher autonomy are associated with higher efficiency and productivity. Supply side concentration of resources through excellence initiatives and restructuring of the landscape because of Bologna Process were also effective in transforming universities’ production function. The evidence on top-down mergers is mixed, and we can question their implementation, as opposed to voluntary mergers.