List of contributors. Introduction: improvement and innovation in higher education (A.M. Verspoor). Higher Education and Development. The university system: engine of development in the new world economy (M. Castells). Universities and technological change and training in the information age (M. Carnoy). Economic returns from investments in research and training (E. Mansfield). Assessing Performance. Performance of higher education - measures for improvement, evaluation of outcomes (U. Teichler, H. Winkler in cooperation with R. Kreitz). Performance indicators for higher education: a critical review with policy recommendations (H.R. Kells). Sustainable Financing. Enhancing the financial sustainability of higher education, education institutions (A. Ziderman). Mechanics of allocating public funds to universities, their implications on efficiency and equity (E.A. Tan). Foreign assistance for university development in sub-Saharan Africa and Asia (T.O. Eisemon, M. Kourouma). Effectiveness in Governance and Management. Problems of privatization (D.C. Levy). Autonomy and accountability in government/university relationships (F.A. van Vught). Higher education in Chile - effects of the 1980 reform (J. J. Brunner, G. Briones). Conclusion: higher education reform in perspective (J. Salmi).