Subsidizing education in developing economies

Endogenous growth theorist David Romer's ideas on subsidizing education:

"One policy innovation, for example, that would boost the growth rate would be to subsidize universities to train more undergraduate and graduate students in science and engineering. Also, you could give graduate students portable fellowships that they could use to pay for training in any field of natural science and engineering at any institution the students choose. Graduate students would no longer be hostage to the sometimes parochial research interests of university professors. Portable fellowships would encourage lab directors and professors to develop programs that meet the research and career interests of the students." (Source)

This would be a good idea for foreign aid given on a competitive merit basis to foreign students outside the United States. Another interesting comment: "Because the economics of ideas are so different from the economics of markets, we’re going to have to develop a richer understanding of non-market institutions, science-like institutions. This is going to be a new endeavor for economics." Ethnography, as opposed to strict math models that often stifle with their rigidity, might be a good approach. Harvard Business School case studies [Wikipedia] are already a form of ethnography, albeit proprietary ethnography not accesible in developing countries. Pity these aren't open sourced or readily available in published form like Prahalad's case studies for bottom of the pyramid markets.

The ideas in his interview do seem to advocate stronger property rights over ideas than has traditionally existed and seems to run counter to traditions of university based education developed over hundreds of years.

1. One glaring example where this approach seems to be a little bit old-fashioned is the software to teach economics that he is developing as proprietary software rather than open sourced software. This is clearly against the trends of software used in academic institutions which is increasingly open sourced, for example Perl for bioinformatics.

2. Stronger property rights over ideas also runs quite contrary to the ideas of famous computer scientist Donald Knuth at Stanford on the intrusion of patents on science, for instance on software patents:

In a letter to the US Patent Office in 2003: "I strongly believe that the recent trend in patenting algorithms is of benefit only to a very small number of attorneys and inventors, while it is seriously harmful to the vast majority of people who want to do useful things with computers."

"When I think of the computer programs I require daily to get my own work done, I cannot help but realize that none of them would exist today if software patents had been prevalent in the 1960s and 1970s. Changing the rules now will have the effect of freezing progress at essentially its current level."

"If software patents had been commonplace in 1980, I would not have been able to create TEX."

3. I can't help think that throwing the spirit of innovation found in universities to the patent lawyers might dampen innovation significantly. As a journalist in Thailand, I remember reading editorials in the paper I work at, the Bangkok Post, written by patent lawyers advocating trying to protect academic research in Thai universities with patents. What it actually needs is more cooperation with foreign universities to develop world class research programs.