ABSTRACT
It is the thesis of this book that institutional design matters. In chapters three and four I have discussed two design mechanisms that distinguished the modern from the medieval universities and helped them become centers of discovery and develop resilience against the ever-present forces that corrupted them in these pursuits. Adam Smith was the first to point to the problem of institutional decline and corruption as a result of an unchecked pursuit of professorial self-interest. As a check on this tendency, he argued for the need of professors and universities to compete for students and reputation. Humboldt’s founding idea-stressing the need for professors to combine teaching and research and prove themselves through continued research activity and publication-supplied the second mechanism. The American university inherited both these institutional features from the English colleges and the German university. But, as we will see in what follows, it crucially went further.
