[Excerpt] Despite the declining relative importance of HBIs in the production of black bachelor's degrees, in recent years they have become the subject of intense public policy debate for two reasons. First, court cases have been filed in a number of southern states that assert that black students continue to be underrepresented at traditionally white public institutions, that discriminatory admissions criteria are used by these institutions to exclude black students (e.g., basing admissions only on test scores and not also on grades), and that per student funding levels, program availability, and library facilities are substantially poorer at public HBIs than at other public institutions in these states (Johnson 1991). In one 1992 case, United States v. Fordice, the Supreme Court ruled that Mississippi had not done enough to eliminate racial segregation in its state-run higher educational institutions (Chira 1992). Rather than mandating a remedy, however, the Court sent the case back to the lower courts for action.
What should the appropriate action be? Should it be to integrate more fully both the historically white and the historically black institutions by breaking down discriminatory admissions practices at the former and establishing some unique programs at the latter? Should the HBIs be eliminated and their campuses either folded into the historically white institutions or abandoned? Or should effort be directed at equalizing per student expenditure levels and facilities between campuses, rather than at worrying about the racial distribution of students at each campus, even if such policies might result in "voluntary separate but equal" institutions?
From an economic efficiency perspective, the appropriate policy responses depend at least partially upon the answers to a number of questions: Do HBIs, per se, provide unique advantages to black students that they could not obtain at other institutions? If they do, is this because of the racial composition of their faculty or the racial composition of their students? If they do, would enrolling more black college students in higher expenditure per pupil integrated institutions actually leave these students in a worse position?