Last week I presented a paper at the Economic History Association conference in Nashville, Tennessee. As with the two earlier EHA meetings I attended (in 2010 and 2013), what impressed me was not only the quality and sophistication of the research, but the breadth of the topics and questions investigated. I listened to excellent presentations on how labour scarcity during the American Civil War affected racial relations afterwards (Tim Larson), on how concessions given to private companies in the Congo Free State affects development outcomes today (Sara Lowes and Eduardo Montero), on how the spread of malaria in the US South raised the price of slaves immune to the disease (Elena Esposito), and on how US military investments during World War II had absolutely no long-term impact on local industrialization (Taylor Jaworski). (A story in the South African press this morning suggests that our own government’s attempts to stimulate local manufacturing through investment in military technology, the Centurion Aerospace Village, has yielded very few returns…) For the economists: what made these papers great were their transparent and innovative identification strategies, coupled with a simple but strong narrative. The full conference programme is available here.
The scale and scope of such world-class research in the US is reflected in the latest QS World University Rankings that was released last week. Ten of the world’s top 20 universities are in the US, and 18 of the top 50. In economics, the US advantage is even more dominant: 15 of the top 20 Economics departments are at US universities, and 21 of the top 50. Which explains why US universities attract the best talent from across the world, notably India and China.
As I’ve written before, if African countries are to benefit from globalization and innovation, it needs to send its students to places that can offer them elite education. That is why China sends 250 000 of their students to US universities every year. Some remain in the US afterwards, but most return, improving the quality of teaching and research at Chinese universities. Just look at how fast Chinese universities are moving up the QS rankings and you will realise the benefits of this system.
Despite what many might say, these rankings are important and becoming more so. Potential students use them to determine which university to attend, potential employees use them to decide where to apply for a job, scholars use them to choose where to spend a sabbatical or with whom to collaborate, and funding institutions use them to judge applications. For that reason it is great to see that Stellenbosch University, my home for the last fifteen years, is moving steadily up the rankings, from position 390 last year to 302 in the current edition. That progress is the result of incentives to produce quality research (Stellenbosch is in the top 100 universities globally in terms of citations received, the only university to break the top 100 in Africa). In the overall list, the University of Cape Town fell slightly to 171, but it remains the highest-ranked African university.
South African universities face the dual challenge of having to racially transform their staff body and improving their competitiveness. These are often seen as competing, mutually exclusive challenges, but I don’t think that is necessarily the case. Achieving transformation and competitiveness simultaneously will, however, require different (and possibly more demanding) solutions than only focusing on one or the other.
The answer is to look beyond our shores. Very few South African students end up at US universities. Importantly: very few black South African students study towards an (Economics) PhD in the US. This needs to change: We need to do much more to encourage our best and brightest (black) students to study abroad. Such a strategy, I believe, is the only sustainable way to transform the South African academic landscape within a generation from mostly white to mostly black, while continuing to move up the rankings ladder.
A strong higher education sector has massive spillovers for the rest of the economy too. There is no reason Africa cannot aim for at least two or three universities in the top 100. Because of our location and affordability, South Africa can become a hub for the best and brightest African scholars. Exporting higher education services is a comparative advantage we should exploit. And students often remain in the country where they study; some of the most innovative (and most transformative) companies in the world were started by immigrant students who moved to the States to study. Think Google and Tesla.
The problem is the poor incentives for South African universities to make this happen. The Department of Higher Education gives large financial rewards to universities for each PhD that graduates. In contrast, there are no rewards for sending your best (black) students to go and study in the States. That means that universities do their best to hold on to their best students instead of encouraging them to obtain a degree from a higher-ranked university elsewhere, even though that might be in the student’s best interest. In addition, PhD bursaries are frequently available for South African students studying here, while a first year of studies in the States can be in excess of R500 000. (Fortunately only the first year is usually expensive; thereafter research and teaching positions can help.)
This is a market failure where the South African government should intervene. So here is my request to Minister Nhlanhla Nene: Do as China does (see picture). Provide several hundred bursaries for students to study in the States. Some of them will (and should) remain behind; for example, a South African Economics professor at Harvard will yield long-term returns for the South African economy in terms of research questions and collaboration. But many of the graduates will return to South Africa, filling positions vacated by a retiring, white professoriate. That is how you transform into a world-class African university.
As I write this, I discover an online article about the tragic events of the last few days at the University of Kwazulu-Natal. Early on Thursday, a Westville campus residence was torched. On Sunday night, two cars and the building which houses the office of vice-chancellor Albert van Jaarsveld were torched. You don’t need a PhD to realise that this is not a sustainable way to transform the South African academic landscape. Instead, let’s look at ways to send our intellectually gifted to the best universities in the world. And bring them back to train and teach the next generation of engineers, computers scientists and… economic historians.