Understanding and Using Efficiency and Equity Criteria in the Study of Higher Education Policy

Abstract

Policy makers often have to make decisions about how resources are to be used in furthering societal objectives. Because resources are scarce, one of the objectives that decision-makers strive for is to allocate these resources among alternative uses in an efficient manner. Another objective that public policy- makers often pursue is to distribute scarce resources among individuals and groups in an equitable manner. In their analysis and deliberation, policy makers often view "efficiency" in allocation and "equity" in distribution as criteria that guide them in their decision-making? Efficiency and equity have long been the subjects of articles and books by political philosophers and economists. The classical economists like John Stuart Mills, Jeremy Bentham, and Adam Smith wrote extensively about efficiency in the marketplace. But these philosophers also spent a great deal of time discuss- ing the just or equitable distribution of society's resources. For instance, in The Wealth of Nations (1776) Adam Smith stated, "But what improves the circum- stances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable" (Book I, Chapter VIII).