It's no wonder a Government funding offer has universities vexed. This is Machiavellian government

at its most brilliant, writes MICHAEL CORBALLIS.

The prisoner's dilemma is a useful metaphor for the conundrums we often face in society, and the relative pay-offs for cooperation and conspiracy.

It goes like this. Two prisoners are held in separate cells for interrogation. If one prisoner incriminates the other, and the second prisoner stays silent, the first prisoner goes free and the second gets 10 years. If both stay silent, they each get six months. If each incriminates the other, they both get five years. What is the best strategy? Do you rat on your partner-in-crime in the hope of going free, or do you stick together for a reduced sentence? And can you second-guess what your mate will do?


The deal the Government has offered tertiary institutions has precisely the elements of the prisoner's dilemma, except that whatever happens none of the institutions will escape without at least some penalty.

The deal is that if they hold student fees constant, they will get a 2.6 per cent increase in Government subsidy, and competitive access to a pool of money for research centres of excellence.

The 2.6 per cent increase is in reality a considerable loss, since it fails to keep pace with inflation or the fall in the New Zealand dollar, and comes on top of a similar deal last year that has had a crippling effect.

The low dollar has hit tertiary institutions especially hard, since salaries are no longer competitive internationally and the price of overseas goods, such as books, journals, and specialised scientific equipment, has dramatically increased.

Institutions that refuse the offer and raise fees run the risk of losing students, and of having to deal with student protests. They also lose access to the competitive fund for centres of excellence.

An institution that prides itself on its research might well feel compelled to accept the offer and hope for the major share of the competitive fund, although that could not compensate for the loss of revenue implicit in the 2.6 per cent increase in subsidy.

But as with the prisoner's dilemma, there is also a temptation to treachery. To maximise access to the fund, the best strategy might be to join a coalition with other institutions to refuse the offer, and then accept it, in the hope of securing access to the whole fund and gaining access to students who cannot afford the raised fees at the other institutions.

The prisoner benefits most, remember, by betraying his accomplice - assuming the accomplice doesn't also betray him. I hasten to add that I know of no institution that is planning to take this course of action.

I'm sure our tertiary institutions are decent and honourable, and would not dream of such treachery. And anyway, if they were so tempted, they might well be forced to move to Australia to escape the vengeance of their betrayed colleagues although, come to think of it, they could benefit from the more generous funding available there. But no. The resulting rise in the Australian IQ would surely be too much to contemplate.

The Government's deal exploits the old principle of divide and rule. By encouraging betrayal, it potentially turns tertiary institutions against each other, a useful strategy if it looks as though they might otherwise unite against Government policy.

If they do unite and raise fees, students will rightly protest, but the Government can claim it was not its fault, since it offered a deal whereby fees would be frozen.

This could have the merit of turning students against the tertiary institutions rather than against the Government - more divide-and-rule.

As the final icing on the cake, the Government gets to keep the fund originally allocated for centres of excellence.

Institutions have until August to decide whether or not to accept the deal, although the council of one university has voted not to accept the deal and raise fees, and the Vice-Chancellors of all eight universities have united in their opposition to it.

The final decision, however, will rest with the university councils - yet more divide-and-rule, if the Vice-Chancellors should be at odds with councils over this.

The Association of University Staff has called a crisis summit to discuss the issue, and it looks as though there will be a strong push for unity. But perhaps some small, financially strapped institution somewhere might succumb to temptation and become our centre of excellence. I hope it's in a nice place.

This is Machiavellian government at its most brilliant. I can only gasp in admiration, and hope it is duly recorded somewhere in the annals of our political history.

In offering such a deal a Labour Government does stand to lose electoral support in an area that has traditionally been pro-Labour, but this could be offset by an increase in support from other sectors of the community who tend to dislike intellectuals. But can a Government that speaks of the knowledge economy and the knowledge wave really be intent on destroying one of the main sources of knowledge in our society?

Or is it the victim of a prisoner's dilemma of its own, forged by business pressure, and perhaps by those dastardly Australians who want to steal more of our scientists?

*Michael Corballis is a professor of psychology at the University of Auckland.