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What happens when a government finances its best university departments? Italy’s Dipartimenti di Eccellenza programme allocated substantial extra funding to top-performing academic units. This column unpacks new evidence on how such initiatives can positively affect hiring, student choices, and research output, offering valuable insights for policymakers.
Scientific research is a powerful engine of innovation and long-term economic growth. In recent years, much of public funding to research has been awarded competitively. Instead of automatically funding institutions, governments evaluate and reward the most promising universities and departments through grant programmes and special designations. One rising trend is the use of ‘excellence initiatives’ – programmes that funnel extra resources into top-performing research institutions to boost global competitiveness. Countries like Germany, France, China and South Korea have rolled out such policies, hoping to concentrate talent, improve research infrastructure, and elevate their universities’ international standing.
But do these excellence programmes actually work? In a new study – co-authored with Niccolò Cattadori (University of Zurich) and Elena Lazzaro (Bank of Italy) – we take a closer look at Italy’s version of this policy, the Dipartimenti di Eccellenza, which was launched in 2018. The programme selected the 180 most promising departments in Italian public universities (around the top 25%) and awarded them substantial funding for five years. Departments could use the money to hire new staff members, improve research infrastructure, offer advanced degree programmes, or introduce performance-based incentives for professors.
To evaluate the impact, we tracked detailed data on faculty careers, academic publications, student enrollments, and course offerings across Italian universities. Crucially, our study uses a robust methodology to isolate the causal effects of the policy, comparing funded and non-funded applicant departments over a long period to identify how it affected various outcomes.
Hiring boost, but modest changes in educational offerings
First, the most immediate and tangible outcome: hiring. Departments that received excellence funding hired, on average, six more faculty members than non-funded departments by 2023 – around an 8% increase compared with 2017 levels. This gain shows that the additional resources helped grow academic staff numbers.
But when it comes to new academic offerings, the picture is more subdued. There wasn’t a significant uptick in the number of degree or PhD programmes created. There was a short-term increase in PhD enrollments, suggesting some departments may have used the funds to offer more scholarships, but this effect faded, possibly due to uncertainty about future funding.
The positive indirect effects of the policy
The programme also had an indirect but meaningful effect: attracting more students. Departments labeled as ‘excellent’ saw a 13% increase in first-year student enrollment within three years. This wasn’t limited to local students: enrollments rose across the board, suggesting that the excellence label served as a powerful quality signal to prospective students nationwide.
The effect was especially pronounced among high-achieving students, indicating that the designation helped top departments draw in stronger applicants. In a higher education market where reputation matters, the act of labeling a department as ‘excellent’ can re-shape how students choose where to study. Given that student tuition fees are an important source of university funding, this increased enrollment may set off a virtuous cycle for winning departments, enabling them to sustain and expand their resources over time.
In terms of research output, by 2023 departments with excellence funding increased their total publications by 12% and journal articles by 15%. That’s a noteworthy bump, though part of it can be attributed to having more faculty. If we look at productivity per person, the effects are mixed. Overall, output per faculty member did not increase significantly. But in STEM and life sciences departments, particularly larger ones, the improvement was sizeable. This suggests that infrastructure investments (more relevant in these fields) and the benefits of concentrating more talent in one place (more visible in larger departments) may be driving individual productivity gains. No such boost was observed in social sciences or humanities, by comparison.
Why this matters for policymakers
Our research contributes to the broad debate about public investment in science and education. How can governments ensure that their investments in ‘excellence’ actually deliver the results they hope for? Italy’s case is particularly interesting because of its relatively modest R&D spending (just 1.4% of GDP – well below many other advanced economies), making the design and evaluation of these policies even more critical.
While excellence programmes aren’t a silver bullet for productivity growth, this study suggests they have an important role to play. For one, it shows that such initiatives can do more than just increase faculty size: they can also enhance an institution’s reputation and attractiveness and improve its scientific production and productivity. Without taking into account these indirect effects, the benefits of excellence funding would be underestimated. At the same time, our work also highlights that the impacts are not uniform across fields. Future research should explore whether the advantage for STEM and life sciences departments extends to other outcomes not considered in our project, such as patent activity or business creation.
Author: Edoardo Frattola
Edoardo Frattola is an economist at the Regional Economic Research Division of the Bank of Italy (Florence branch) and a PhD candidate in economics at the EUI.