Is Privatization Necessary to achieve Quality of Universities?

The purpose of this study is to analyze the relationship between privatization in higher education and the quality of universities. An interesting fact is that of the top 10 universities in the US, nine are private. Previous studies have claimed that there is a relationship between the privatization of universities and their quality, since countries with a high proportion of private resources have superior universities. The purpose of this paper is to analyze if indeed this supposed relationship is due to empirical regularities between quality and ownership, or whether the two are unrelated. The analysis presented herein is based on data collected on 508 universities in 40 countries. I show that flexibility is the important element affecting quality, and not ownership per se