For years, Ohio University economist Richard Vedder (also director of the Center for College Affordability and Productivity) has criticized American higher education for its rampant waste and declining academic standards. He’s provided key insights into how massive federal spending on higher education has contributed to high rates of underemployment and allowed universities to spend frivolously on things unrelated to enhancing educational quality.

In his latest article, Vedder says that many of the same problems related to overspending on American higher education can be found in Islamic nations. In some Middle Eastern and North African (MENA) countries, he writes, “[Policymakers] have erroneously bought into the notion that massive spending on ‘human capital development’ will propel them into economic growth.”

That policy mindset has had deleterious effects. In Iraq and Iran, for instance, the push to increase college enrollment and expand higher education has contributed to a situation in which the unemployment rate for college graduates is roughly 25 percent. In addition to problems of unemployment and underemployment, top-down bureaucratic control of universities in Islamic countries has stifled academic freedom and innovation (in some countries, for example, there’s no such thing as merit-based pay for faculty and staff).

“Universities are great inventions, and they have a role everywhere, in areas rich and poor, Christian, Islamic, and even atheist. But the Law of Diminishing Returns applies: universities in small doses can disseminate and advance knowledge in welfare-inducing ways, but if expanded too fast, they produce dismal results at the margin,” writes Vedder.