I wrote recently about using prizes as a way to distribute research money. More generally, though, prizes have a lot of potential as a way for governments to influence institutional behavior and create a more diverse higher education sector, and deserve to be given a lot more thought by policymakers.

The reason for this is that we desperately need a more diverse set of incentives in our system. When politicians moan about how universities “aren’t responsive,” they are getting it precisely backwards; universities are plenty responsive to the financial incentives that are in front of them. At the moment, they only really get rewarded for doing two things: admitting more students and publishing more research (academic norms of behavior reward publications, too, so there’s a built-in second incentive on that front). Ministers can kvetch all they want about other stuff, but unless you change the incentives facing institutions, their behavior won’t change.

The solution, simply, is to set up a different set of incentives. They don’t have to be enormous – a small tail can wag a pretty big dog in academia – but they have to substantial and varied. For instance, why not give $5 million each year to the institution that gets the best teacher ratings from its students (yes, I know they can be gamed, but there are equally ways to control for gaming – see Côté and Allahar on this.). Or $10 million to the institution doing the most to promote local economic development? Or $10 million to the university doing the best job of integrating technology in the classroom? It’s a cheap way to buy change.

A really ambitious version of this was mooted recently in the pages of Policy Options, where former PMO Chief of Staff Ian Brodie suggested creating a $1 billion challenge fund to get one Canadian institution into the Top 10 of one of the major rankings agencies. Under his plan, the institution would get the money up front and pay it back if they didn’t succeed within 10 years.

Now, I’m fairly sure this specific plan wouldn’t work. Apart from the Shanghai rankings, the methodologies change too radically from year to year to make them reliable barometers of excellence, and the gap between U of T, UBC and McGill and the current top 10 of the Shanghai rankings is probably too big to be bridged by $1 billion over ten years. And if I were going to start incentivizing stuff, it probably wouldn’t be in research, because there are already lots of incentives there.

But Brodie’s basic idea is an excellent one. We need more and varied incentives. Bring’em on.