Can incentives lead to lower costs in higher ed?

Below is an excerpt from a piece in Inside Higher Ed on Obama Administration efforts to encourage colleges to contain cost and admit more low income students.  Good luck to them. 

These efforts might work at colleges where most instructors and high level administrators have little job mobility.  Then, if there are productivity gains to be had, tuition might sensibly be held in check.  But at a place like the U of I, I believe such efforts will do little or nothing.  The revenue amounts in these programs won't be sufficient to make people change what they're doing.  More to the point, the real drivers of cost increase are not linked closely to these grant programs.  I believe what is necessary is to take take on those drivers more directly. 

Eighteen months ago I wrote a post about salary caps in Higher Ed.  It's the competition for star faculty that is largely responsible for the hyperinflation.  We need to weaken that competition.  An individual institution can't do it on its own.  The entire system needs to get together on this.

Obama higher education plan signals policy shift | Inside Higher Ed via kwout