Rent-Seeking in Higher Education

Overview

American higher education is among the largest and most heavily subsidized sectors of the economy, intermediating well over a hundred billion dollars in federal student aid each year and conferring credentials that function as legal preconditions for entry into a widening set of occupations. Eligibility for those federal dollars is gatekept not by the government directly but by private accreditors — bodies largely funded and governed by the very institutions they evaluate. A sector this large, this subsidized, and this thoroughly intermediated by non-market gatekeepers is, almost by definition, a setting in which artificial scarcity can be created, protected, and competed over.

Higher education is also a leading front in the politicization of business: the process by which firms and entire sectors are drawn into political conflict through government intervention in governance, contested mandates, and the capture of subsidy and entry rights. Rent-seeking is the economic engine of that politicization. Analyzing how those rents are created, protected, and dissipated is therefore not only a public-choice exercise but a direct contribution to assessing and addressing the politicization of higher education as an industry.

Why now

Three developments converge to make this an unusually favorable moment for a concentrated scholarly treatment:

• Policy salience. Accreditation reform, occupational-licensing relief, student-loan forgiveness, state interventions in university governance, and the federal recognition process for gatekeeping agencies are all under active contestation — live allocations of subsidy and entry rights.
• Methodological opportunity. Administrative panels (IPEDS, the Department of Education's DAPIP accreditation databases), nonprofit tax filings (IRS Form 990; see Cutsinger & Terjesen, 2026), and the design standards of the credibility revolution now make it feasible to move from theoretical and cross-sectional treatments toward credibly identified empirical estimates of rent creation, protection, and dissipation.
• A gap in the literature. Despite the sector's scale, higher education remains strikingly thin in the public-choice corpus. Brown and Jewell's (1996) study of voting on academic-eligibility rules remains one of the few direct applications, and relatively little has followed.

Higher education and public choice

Higher education's gatekeeping institutions are a textbook instance of the rent-seeking and regulatory-capture phenomena this journal did more than any other to formalize. The analytical toolkit — Tullock's (1967) welfare-cost insight, Stigler's (1971) capture theory and its restatement in Public Choice (1972), Krueger's (1974) rent-seeking society, and Public Choice's own literature on contest design and dissipation (Higgins, Shughart, and Tollison 1985; Congleton 1988) — maps directly onto accreditation, licensing, and subsidy capture.

Themes and methods

This special issue is methodologically pluralist and welcomes formal, empirical, and historical work organized around the creation, protection, and dissipation of rents in higher education. Illustrative themes include:

• Accreditation as gatekeeping and capture: board composition, funding structures, conflicts of interest, and the incidence of accreditor discretion.
• Federal student aid and subsidy incidence: the Bennett hypothesis as a rent-capture question; who actually captures the marginal aid dollar.
• Credentialism and occupational licensing: degree requirements as entry barriers, and the political economy linking universities to licensed professions.
• Internal rent-seeking within institutions: governance, tenure, administrative growth, and intercollegiate athletics (building on Brown and Jewell 1996).
• Lobbying, earmarks, and the nonprofit form: academic earmarking, tax exemption as rent, and the institutional politics of public-university funding formulas.
• Comparative and historical perspectives: cross-national variation in gatekeeping arrangements and the historical emergence of accreditation cartels.

Key dates and submission

• Paper-development session — the Politicization of Business conference, Florida Atlantic University, Boca Raton, FL, February 8–9, 2027. Authors are invited to present papers and receive feedback.
• Conference submission deadline — November 1, 2026. Submit your manuscript through this site using the button above.
• Journal submission deadline — following the conference, invited and other papers may be submitted to Public Choice by March 1, 2027. All papers proceed through the journal's standard double-anonymized review.

Guest editors

• Bryan Cutsinger — Florida Atlantic University & AIER; Associate Editor, Public Choice
• Siri Terjesen — Florida Atlantic University & Norwegian School of Economics
• William English — Georgetown University

This special issue is organized as part of the cross-institutional Assessing and Addressing the Politicization of Business project (Georgetown's Institute for the Study of Markets and Ethics, FAU's Madden Center for Value Creation, and EM Normandie).

References

• Brown, R. W., & Jewell, R. T. (1996). Rent-seeking in higher education: Voting on academic requirements. Public Choice, 88(1–2), 103–113.
• Buchanan, J. M., Tollison, R. D., & Tullock, G. (Eds.) (1980). Toward a theory of the rent-seeking society. College Station: Texas A&M University Press.
• Chambers, D., McLaughlin, P. A., & Stanley, L. (2018a). Barriers to prosperity: The harmful impact of entry regulations on income inequality. Public Choice, 180(1–2), 165–190.
• Chambers, D., McLaughlin, P. A., & Stanley, L. (2018b). Regulation and poverty. Public Choice, 180(1–2), 131–144.
• Congleton, R. D. (1988). Evaluating rent-seeking losses. Public Choice, 56(2), 181–184.
• Cutsinger, B., & Terjesen, S. (2026). Captured gatekeepers: Structural conflicts of interest in U.S. higher education accreditation. European Economic Review. Forthcoming.
• Eckert, R. D. (1973). On the incentives of regulators: The case of taxicabs. Public Choice, 14(1), 83–100.
• Higgins, R. S., Shughart, W. F., II, & Tollison, R. D. (1985). Free entry and efficient rent seeking. Public Choice, 46(3), 247–258.
• Krueger, A. O. (1974). The political economy of the rent-seeking society. American Economic Review, 64(3), 291–303.
• Melo, V., & Neilson, E. (2023). Introducing an index of rent seeking. Public Choice, 197(3), 471–487.
• Mitchell, M. D. (2019). Rent seeking at 52. Public Choice, 181(1–2), 1–4.
• Stigler, G. J. (1971). The theory of economic regulation. Bell Journal of Economics and Management Science, 2(1), 3–21.
• Stigler, G. J. (1972). Economic competition and political competition. Public Choice, 13, 91–106.
• Tullock, G. (1967). The welfare costs of tariffs, monopolies, and theft. Western Economic Journal, 5(3), 224–232.
• Tullock, G. (1975). Competing for aid. Public Choice, 21(1), 41–52.