The Relevance of the German Excellence Initiative for Inequality in University Funding

The Excellence Initiative was the largest competitive funding procedure to create German world-class universities and overcome the traditional Humboldtian homogenization of German higher education. This paper examines whether the Excellence Initiative has spurred financial inequality in the national higher education sector. For a period of 15 years, we analyze the third-party funding success of 78 universities that were either winning or losing in the competition. We find that the Excellence Initiative augmented pre-existing differences in third-party funding across institutions. However, this is a one-off level effect that does not initiate a further self-reinforcing divergence process as would be suggested by Matthew effects.