Towards a Political Economy of Retrenchment: The American Public Research Universities

This article explores the dynamics of retrenchment at the state and federal levels using theories of fiscal crisis and state economic variation to interpret state and federal funding patterns for public research universities during the past decade. States with low levels of unionization attract business, gain new jobs, and have above average higher education spending, while highly unionized states are losing business and jobs, and are falling below average in educational spending. Federal R & D spending shows a tendency to follow state patterns. Business leaders’ profit maximizing strategies and capital investment patterns shape states’ abilities to finance higher education, while institutions’ capacity to attract R & D monies is influenced by states’ fiscal soundness. In this article, what these trends might mean for specific institutions in terms of state budget, R & D capacity, and prestige of graduate programs is explored in a case study. Finally, suggestions are given as to the strategies faculty and administrators can pursue to stabilize their economic environment.