Competition has the potential to weed out rankings that are less useful or reliable
In my last column, I offered some preliminary thoughts on the new government rankings of Indian higher education institutions. One of the issues that have surfaced with these rankings is that of quality and reliability of the rankings themselves. Potential problems include distortion of self-reported information, influence by interested parties (for example, politicians with stakes in particular education institutions), and the appropriateness of the information used in the ranking, and of the aggregation process. The last of these concerns seems unwarranted, given the transparency of the process and the information, allowing outsiders to construct their own indices and rankings from components of the data.
One of the issues that I discussed in general terms was the possibility of multiple sources of rankings, and what this would mean for prospective students and parents. In fact, for business schools or programmes and for engineering colleges in India, there are indeed multiple such rankings, some of them dating back over a decade. In fact, Wikipedia pages exist that compile these rankings side-by-side, allowing anyone with Internet access to begin a preliminary analysis of education options in their chosen field.
For business or management schools and programmes, there has been a strong demand for such rankings for some time, and private providers have stepped in readily. Often, these are business-related magazines, and they have been criticised in the past for being influenced by advertising spending, or for using methodologies that were insufficiently quantitative or objective. Nevertheless, they have mostly survived, and have improved over time. For example, Business Today offers a ranking of 269 programs or schools, many more than there are in the government rankings.
A website provides a searchable table, with overall scores and rankings, as well as scores on components that are similar to the ones in the new government ranking (for example, learning experience and placement performance).
These private rankings are broadly similar in character to the new government rankings—programmes or schools that do well in one ranking are likely to be highly ranked elsewhere. And anyone can explore the sources of differences and learn from them to some extent. For example, the government ranking gives some weight to research quality, which does not seem to figure in the Business Today rankings (at least not so explicitly), and to inclusion, which is again not so prominent in private sector rankings. The private-ranking websites (and other websites for potential students) carry comment threads where prospective students can ask for information from graduates or other information-seekers). Essentially, there is a market for information, which customers can access to inform their choices: it is not a perfect market, but it is better than a situation where information is scarce or
Besides offering new dimensions of comparison, like research quality, the government rankings also have filled in some gaps in information. For example, IIM Bangalore had never participated in the Business Today rankings, but heads the new government ranking. Even when different rankings cover the same informational ground, they may offer different assessments, allowing a prospective student to weigh the information across sources. There is a burden in doing this, but this is presumably a benefit-cost decision that the student can take. As we know, sometimes consumers and even voters make choices based on less than the total information that is available, because it is not worth their while to do a complete analysis.
Competition has the potential to weed out rankings that are less useful or reliable. For example, in 2010, CRISIL, a credit ratings firm, launched its own business school grading—these were in terms of a modified letter grade system, rather than numerical scores or explicit rankings. Ratings were produced for about 45 institutions, and are still available on the Crisil web site. But clearly the service never took off, since the ratings are out-of-date, and never seem to have been repeated for any institution. Each rating is accompanied by a one page qualitative summary, which is interesting and useful, and even provides information on areas of stronger performance versus areas of improvement. Various dimensions of diversity are also considered. Whatever its positives, however, the Crisil ratings could not compete with other information offerings.
Ultimately, just as the Indian higher education sector is itself undergoing change, rankings of business schools and other education institutions are going to be part of a dynamic process. Adding more information is good, and developing tools to aggregate and analyse information in multiple dimensions and from multiple sources is also valuable. If service-providers compete for customers and those customers are better informed about their options, markets will operate more efficiently. This does not guarantee that markets are perfect, and monitoring and controlling for fraud is important as well. Consumer protection laws and a more streamlined, better-functioning legal system are another piece of the puzzle that Indian policymakers will have to address. But higher education, especially graduate professional education, is one area where consumers can make intelligent choices if they have access to good information. That needs to be the regulatory focus, rather than centralised control of how institutions are set up and run.
The author is professor of economic, University of California, Santa Cruz