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In many countries around the world, governmental authorities control the market entry of new providers of higher educational services. By means of ex-ante licensing in the higher education sector, government ensures that students are only confronted with academic programs and institutions that at least meet certain minimum quality standards. This quality-assuring intervention by government may be taken for granted. From an economic viewpoint, however, it seems worthwhile to scrutinize the regulatory status quo. In order to rethink existing licensing arrangements’ raison d’être, the present paper addresses the question whether governmental market entry control in the higher education industry is necessary at all.
