This article explores the conflict between US public and private higher educational institutions by tracing the long struggle for a public university in Boston between 1890 and 1980. This history reveals how the competitive relationship between public and private institutions was central to the formation of each sector, while also complicating a clear dichotomy between the two. Educational innovations such as state scholarships, teacher-training initiatives, university extension courses, and junior colleges are also recast in this story as strategies to limit, rather than expand, the public sector. Finally, this history should prompt a reinterpretation of the current neoliberal moment. Rather than view contemporary budget cuts and public-private partnerships as novel historical departures of the late twentieth century, they appear in this Massachusetts story as a return to a political landscape long hostile to public higher education.

The Spanish university system has witnessed many changes during the last thirty years. Initial conditions for competition were established in 1983, especially through the legal recognition of private universities. However, a shortage of students since 1998 and a drop in demand for higher education, which has been aggravated by an extraordinary increase in supply, has prompted further reform in the past few years. A new regulation was adopted in 2001 in order to impose market-like behaviour and privatise some of the operating conditions of State universities, such as the freedom of students to choose their university, hiring policies, quality assessment and public accountability, the allocation of research funds and rankings. Although it is probably too early to assess the impact of these changes, it is clear that public funding remains largely unchanged. This is a key issue that needs to be addressed in order to create the appropriate conditions for competition in the higher education industry. Although the market has been introduced into the provision of higher education in Spain, the continued public funding of State universities creates a powerful distortion that prevents the development of a truly fair and competitive market.