Governments around the world have turned to higher education to sustain economic development and social welfare. This article uses the concept of the regulatory welfare state (RWS) to examine how state authorities in the United States and Germany have sought to spur structural changes in the education sector. I argue that policy-makers in both countries have pursued the goal of organizing competition among universities by combining fiscal and regulatory policies that strengthen universities’ self-reliance, rivalry, and decentralized decision-making. The analysis shows that understanding cross-national patterns of institutional transformation requires putting countries’ evolving regimes of state-university relations into historical perspective, and that states’ shifting governance strategies are important drivers of higher education’s contemporary reimagination. It also clarifies how regulatory approaches to welfare provision have fostered the re-composition of public infrastructures, raising pressing questions about the quality and scope of the welfare that regulatory approaches promote.

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