The socioeconomic rationale of higher education provision in developing countries is examined by a review of the costs and benefits associated with investment in higher education as a whole and especially in different postsecondary subjects. University expenditures in developing countries typically account for less than 20 percent of the state budget for education, and an increasing part of this expenditure is devoted to technical and vocational subjects. This is indicated by the rising relative share of university enrollments in engineering, agriculture, and related fields of specialization. The international trend toward technical subjects is thought to reflect the notion that technical education contributes to economic development. The scientific basis of this notion is examined by examining criteria for social choice in education: efficiency, equity, employment effects, social demand satisfaction, and flexibility benefits. Assessment of higher education costs at the aggregate university level and the subject field level permit an analysis of the behavior of unit costs as enrollment rises and documents cost differences between various university departments. The quantitative side of higher education benefits is analyzed, including the earning advantage of the graduates of different subjects, social demand satisfaction, income distribution, and employment prospects. Nonquantitative aspects of the choice between liberal and vocational education are addressed by reference to curriculum theory and the sociology of knowledge and change. The results suggest that technical and general curriculum have their place in a balanced educational system. A bibliography and data for different countries are appended. (SW)