Ratings provide a proxymeasure of country risk and demonstrate a country's commitment to transparency, both of which should help attract foreign capital.
In other words, we expect that students do have an incentive to minimize their costs (unless the subsidy program is set up in such a way to negate that incentive), though the fact that students use price as a proxymeasure for quality in higher ed likely significantly dampens this effect.
The measure's supporters say that proxy votes are the most direct way to influence corporate governance, and that investors have the right to know whether a fund manager has voted in their best interests.