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Governments that are tight-fisted and keen to exercise control are least likely to preside over a higher education system of quality.

In a paper on what sets apart strong national systems, the University of Melbourne's Ross Williams and colleagues point out that most countries with high output in teaching and research put in plenty of resources. The authors also stress the role of government policy and regulation that allows universities freedom to innovate, manage their affairs and attract talented staff.

Yet the links between this regulatory environment, investment and output are not simple, they say in the Journal of Higher Education Policy and Management.

"In the Nordic countries, high levels of government expenditure on higher education are accompanied by a regulatory regime that monitors use of these resources fairly closely; in the U.S., there is less government investment and less regulation," they say.

"Both models yield good outcomes. The worst of all worlds is where government expenditure is low but its use is directed, as in India."

The study ranks the higher education systems of 48 nations -- leaving out low-income countries of Africa and Latin America, for example -- according to factors judged vital to success.

An overall rating was drawn up based on rankings for resources (public and private funding for teaching and research); the regulatory environment; connectivity (overseas student numbers and international collaboration on research papers); as well as teaching and research output, including a measure related with access to world-class universities.

The authors say there is an emerging consensus about what a quality system of higher education looks like.

The top 10 systems in the league table are those of the U.S., Sweden, Canada, Finland and Denmark, Switzerland, Norway, Australia, the Netherlands and the U.K. Indonesia and India sit at the bottom.

Canada is top for resources, the Netherlands for regulatory environment (with New Zealand second and well ahead of Australia at No. 7), Austria for connectivity, and the U.S. for output.

As a developing country, Indonesia perhaps by necessity ranks high in connectivity measured by the number of joint publications with a foreign author, while the U.S. with its critical mass of researchers ranks low on the overall measure of connectivity.

Australia is high on the output measure, occupying the No. 7 spot, but lowish on resources (No. 19).

The paper says it's "an open question" whether or not strong output can be kept up with relatively weak funding. The U.K. was ranked second for output but 27th for resources.

The data suggest that government spending as a share of gross domestic product is a key factor for research output, while total funding (including from private sources) is what counts for participation rates, the authors say.

They note that in some countries -- Chile, Mexico and Indonesia -- the unemployment rate is higher for postsecondary graduates than for those who stopped at secondary school, suggesting a system "that is not producing the needed mix of graduates."

Williams, from the Melbourne Institute of Applied Economic and Social Research, was joined in the study by institute colleagues Gaetan de Rassenfosse and Paul Jensen, as well as by Simon Marginson, of the University of London's Institute of Education.

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