Love them or hate them, the U.S. News and World Report rankings have serious implications. If a school rises on the list, it may become more desirable, attracting more applicants and better hires, and the opposite potentially may happen if a school’s rating drops. With so much at stake, and so many complicated factors to be calculated and self-reported by each school, moral hazard is inevitably present. And that’s a troubling incentive, for the same reasons that the pressure to “make the numbers” each quarter is problematic in the corporate context.
But at least in the corporate arena, the accuracy of the data reported is audited, and the CEOs of the companies have to certify that the data is correct. This was re-emphasized by the Sarbanes-Oxley Act, passed in 2002, which has as its goal better corporate governance, as well as accuracy and transparency in reporting. With the U.S. News rankings, we’re talking about a magazine, a private entity, that reports the data as it is given to them.
While I’m confident – or at least, I hope – that the vast majority of the reporting is above-board, I’ve also heard rumors about situations that seem slightly shaky. Some folks – while themselves professing to report everything correctly – think that other schools are not being upfront. Perhaps not exactly dishonest, mind you, but there are suspicions that some of the numbers are the result of skillful dodges or artful interpretations. Of course, this undermines the legitimacy of the vast majority of the schools that report the numbers accurately.
So what about some type of Sarbanes-Oxley analogue for these rankings? I don’t think the system could in any way be hurt, and might be considerably helped, by an occasional random check of the numbers and how they are derived every couple years. Not all the numbers, but just enough to keep everyone on their toes. That way, even if people disagree about the rankings, what factors should be included, what value to give to these rankings, etc. at least everyone is starting from the same place, and there’s more of a feeling that the information is accurate.