Abstract
This article introduces the agency theory to the field of higher education research. By applying agency theory to the inter-organisational relationship between government and higher education institutions, it is possible to illustrate general problems facing control and governance in a more theoretical and analytical way. The conceptual arsenal provided by the agency theory may benefit various research settings that are related to government-higher education institution relationships. In addition to its descriptive elements, agency theory also provides theoretical explanations for e.g. the establishment of quality assurance systems and performance-based funding procedures.
Similar content being viewed by others
References
G.A. Akelof (1970) ArticleTitleThe Market for “Lemons”: Quality Uncertainty and the Market Mechanism Quarterly Journal of Economics 84 IssueID3 488–500
K. Arrow (1985) The Economics of Agency J. Pratt R. Zeckhauser (Eds) Principals and Agents: The Structure of Business Harvard Business School Press Boston 37–51
E. Ashby (1966) Universities: Brittish, Indian African Harvard University Press Cambridge Massachusetts
S. Baiman (1990) ArticleTitleAgency Research in Managerial Accounting Accounting, Organizations and Society 15 IssueID4 341–371
J.B. Barney W.G. Ouchi (1990) Conclusion: Learning from Organizational Economics J.B. Barney W.G. Ouchi (Eds) Organizational Economics Jossey – Bass Publishers San Fransisco 423–445
R. Berdahl (1990) ArticleTitleAcademic freedom, autonomy and accountability in Brittish universities Studies in Higher Education 15 IssueID2 169–181
M. Bergen S. Dutta O.C. Walker SuffixJr. (1992) ArticleTitleAgency Relationships in Marketing: A Review of the Implications and Applications of Agency and Related Theories Journal of Marketing 56 IssueID3 1–24
R. Birnbaum (2001) Management Fads in Higher Education, Where They come From, What They Do, Why They Fail Jossey–Bass San Francisco
H.R. Bowen (1977) Investment In Learning Jossey–Bass Publishers San Francisco
H.R. Bowen (1980) The Costs of Higher Education. How Much Do Colleges and Universities Spend per Student and How Much Should They Spend? Jossey–Bass Publishers San Francisco
D. Braun (1993) ArticleTitleWho Governs Intermediary Agencies? Principal-Agent Relations in Research Policy-Making Journal of Public Policy 13 IssueID2 135–162
Burke J.C. (2002). Performance Funding and Budgeting: Old Differences and New Similarities. In Burke J.C., *Associates (eds) Funding Public Colleges and Universities for Performance. Popularity Problems, and Prospects. The Rockefeller Institute Press, Albany New York
Canton E., Venniker R. (2001). Economics of higher education. In Higher Education Reform: Getting the Incentives Right. Enschede: CHEPS, 35–51
B.R. Clark (1984) The Organizational Conception B.R. Clark (Eds) Perspectives on Higher Education. Eight Disciplinary and Comparative Views University of California Press Berkley Los Angeles 106–131
D. Dill (1997) ArticleTitleHigher education markets and public policy Higher Education Policy 10 IssueID3/4 167–185
L. Donaldson (1990) ArticleTitleThe Ethereal Hand: Organizational Economics and Management Theory Academy of Management Review 15 IssueID3 369–381
K. Eisenhardt (1989) ArticleTitleAgency Theory: An Assessment and Review Academy of Management Review 14 IssueID1 57–74
J.M. Ferris E.A. Graddy (1998) ArticleTitleA Contractual Framework for New Public Management Theory International Public Management Journal 1 IssueID2 225–240
A. Geuna (1999) The Economics of Knowledge Production, Funding and Structure of the University Research Edward Elgar Cheltenham UK
S. Hölttä (1995) Towards the self-regulative university University of Joensuu Joensuu
E. James (1986) Cross-Subsidization in Higher Education: Does It Pervert Private Choice and Public Policy? D.C. Levy (Eds) Private Education. Studies in Choice and Public Policy Oxford University Press New York 237–257
M.C. Jensen W.H. Meckling (1976) ArticleTitleTheory of the firm: Managerial behavior, agency costs and ownership structure Journal of Financial Economics 3 IssueID4 305–360
B. Jongbloed H. Vossensteyn (2001) ArticleTitleKeeping up Performances: An international survey of performance-based funding in higher education Journal of Higher Education Policy 23 IssueID2 127–145
H.R. Kells (1992) Self-Regulation in Higher Education: A Multi-National Perspective on Collaborative Systems of Quality Assurance and Control Jessica Kingsley Publishers London
S.L. Kirby M.A. Davis (1998) ArticleTitleA Study of Escalating Commitment in Principal-Agent Relationships: Effects of Monitoring and Personal Responsibility Journal of Applied Psychology 83 IssueID2 206–217
E. Kiser (1999) ArticleTitleComparing Varieties of Agency Theory in Economics, Political Science, and Sociology: An Illustration from State Policy Implementation Sociological Theory 17 IssueID2 146–170
M. Laffin (1997) ArticleTitleUnderstanding minister-bureaucrat relations: Applying multi-theoretic approaches in public management Australian Journal of Public Administration 56 IssueID1 3–12
W.F. Massy (1996) Productivity Issues in Higher Education W.F. Massy (Eds) Resource Allocation in Higher Education. The University of Michigan Press Ann Arbor 49–86
P. Milgrom J. Roberts (1992) Economics, Organization and Management Prentice-Hall Englewood Cliffs
T.M. Moe (1984) ArticleTitleThe New Economics of Organization American Journal of Political Science 28 IssueID4 739–777
V. Nilikant H. Rao (1994) ArticleTitleAgency Theory and Uncertainty in Organizations: An Evaluation Organization Studies 15 IssueID5 649–672
C. Perrow (1986) Complex Organizations. A Critical Essay Random House New York
T. Petersen (1993) ArticleTitleThe Economics of Organization: The Principal – Agent Relationship Acta Sociologica 36 277–293
M. Ricketts (2002) The Economics of Business Enterprise. An Introduction to Economic Organization and the Theory of the Firm Edward Elgar Publishing Cheltenham UK
S.A. Ross (1973) ArticleTitleThe economic theory of agency: The principal’s problem American Economic Review 63 IssueID2 134–139
F.A. Schmidtlein (1999) ArticleTitleAssumptions Underlying Performance-Based Budgeting Tertiary Higher Education Management 5 IssueID2 159–174
J. Sheehan (1997) ArticleTitleSocial Demand Versus Political Economy in Higher Education at the Turn of the Century Higher Education in Europe 22 IssueID2 123–136
M. Spence (1973) ArticleTitleJob market signalling Quarterly Journal of Economics 87 IssueID3 355–374
G. Swenson (1998) ArticleTitleCustomers & markets Change 30 IssueID5 34–40
H.G. Thomas (2001) ArticleTitleFunding Mechanism or Quality Assessment: Responses to the Research Assessment Exercise in English institutions Journal of Higher Education Policy and Management 23 IssueID2 171–179
P.T. Terenzini E.T. Pascarella (1994) ArticleTitleLiving with myths Change 26 IssueID1 28–33
B. Vander Meulen (1998) ArticleTitleScience policies as principal-agent games, Institutionalization and path dependency in the relation between government and science Research Policy 27 397–414
G.L. Williams (1995) The “Marketization” of Higher Education: Reforms and Potential Reforms in Higher Education Finance D. Dill B. Sporn (Eds) Emerging Patterns of Social Demand and University Reform: Through a Glass Darkly IAU Press and Pergamon Trowbridge 170–193
G.L. Williams (1997) ArticleTitleThe market route to mass higher education: British experience 1979–1996 Higher Education Policy 10 IssueID3–4 275–289
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Kivistö, J. The government-higher education Institution relationship: theoretical considerations from the perspective of agency theory. Tert Educ Manag 11, 1–17 (2005). https://doi.org/10.1007/s11233-004-7011-y
Issue Date:
DOI: https://doi.org/10.1007/s11233-004-7011-y