The most difficult issues of political economy are those where goals of efficiency, freedom of choice, and equality conflict.
James Tobin, 1970
Abstract
Because higher education serves both public and private interests, the way it is conceived and financed is contested politically, appearing in different forms in different societies. What is public and private in education is a political–social construct, subject to various political forces, primarily interpreted through the prism of the state. Mediated through the state, this construct can change over time as the economic and social context of higher education changes. In this paper, we analyze through the state’s financing of higher education how it changes as a public/private good and the forces that impinge on states to influence such changes. To illustrate our arguments, we discuss trends in higher education financing in the BRIC countries—Brazil, Russia, India, and China. We show that in addition to increased privatization of higher education financing, BRIC states are increasingly differentiating the financing of elite and non-elite institutions.
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Notes
Tobin (1970) has argued, for example, that societies may choose to provide basic education to all in the spirit of commodity egalitarianism.
Although the shift to direct private financing (tuition) does shift political perceptions of higher education as a public or private good, there are important differences between paying tuition to public and to private institutions. Paying for publicly owned services does not imply that the services are therefore “private.” State-owned hospitals and universities and petroleum companies can and do charge for the goods and services they provide. Public ownership conveys a level of public accountability for how these institutions behave that differentiates them from private firms. Similarly, privately-owned institutions subsidized (and regulated) by the state are still “private” in that they are owned by private individuals and accorded property rights different from state-owned entities. Students attending and employees working for private and public higher education institutions generally have different “rights” accorded them by the state. Nevertheless, paying for public services does make them more “private” than when they are free: the individual buyer plays a role in deciding how much of that good to use. Similarly, government subsidies (and regulations) of privately owned firms makes them more “public” than when they are free (or obliged) to respond only to market forces.
In the United States, “Perhaps the principal obstacle to access to highly ranked institutions among poor and underrepresented students is the system of selective admissions which favors students who perform well on standardized admissions tests and who have high grade point averages (GPAs) from secondary school” (Astin and Oseguera 2004, p. 323).
The traditional European model of providing free public higher education and charging relatively high marginal income taxes on the middle class to pay for it was not a particularly successful strategy for redistributing the economic gains from higher education to lower income groups, for the reasons of pre-higher education disadvantage discussed above (Bourdieu and Passeron 1977).
In China, we used only public spending per student, although costs are slightly lower in private institutions. The estimates are more approximate in Brazil and India because of the large number of fee paying students and the relatively little that is known about how much students pay privately for higher education.
Not all the rates we show were corrected for selection bias, but selection bias should probably be declining as a higher fraction of the age cohort attends and graduates from university.
India has elite universities that spend much more per student than non-elite institutions, but they do not appear to be receiving increasing funding per student relative to mass institutions. Nevertheless, the gap may be increasing in India because of declining spending per student in private colleges that we could not measure.
“Project 985” has provided the designated top 9 universities in China, as well as the next 26 (in the first stage, 28 in the second stage) institutions with close to 60 billion Yuan between 1999 and 2008 for improving quality. Specifically 27.5 billion Yuan was allocated in the first stage (1999-2001), 30 billion Yuan in the second stage (2004–2008), and an as yet undisclosed amount in the third stage (2010-onwards) of the project. Project 211, which was initially implemented in 1994, well before the expansion of the system, has also provided most of the 100 plus Ministry-run (elite) institutions (including the Project 985 recipients) with close to 19 billion RMB (until 2011) for improving institutional capacity and developing key disciplines. See {http://english.people.com.cn/90001/6381319.html} September, 2011.
It is difficult to get overall spending per student data in India, so our estimates of increasing differentiation are limited to engineering colleges/universities. They should be viewed as approximate.
Hoper Educacional’s study of spending and revenues in Brazil’s private education sector shows that in 2009, 85–90 % of revenues came from tuition.
Universities must compete for this status by submitting a detailed plan of their disciplinary advantages and their research and infrastructure development plans. The designation of NRU status is usually for 5 years, renewable for another five based on success of following initial plan. The first five years of funding also requires a 20 % cost-share on the part of the institution. The goal of an NRU is to conduct actively other educational and research activities, integrating both of these functions within the institution. The NRUs are supposed to conduct a wide spectrum of fundamental and applied research that would lead to efficient transfers of technology to the national economy.
Detailed data on spending for different types of universities and tuition revenues are only available for these years.
Higher social class groups have a disproportionately higher likelihood of entering elite institutions than lower social class groups. In the BRICs, for example, higher social class groups are more likely to take and score higher on university entrance exams because they have more resources in the home and greater access to higher quality pre-tertiary schooling.
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Acknowledgments
The authors would like to thank Stanford University’s International Initiative at the Freeman Spogli Institute, the U.S. Department of Education’s Fund for the Improvement of Secondary Education (FIPSE), Peking University’s China Institute for Educational Finance Research, The National Research University Higher School of Economics (Russia), and the National University for Educational Planning and Administration (India) for their contributions to the funding of this project.
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Carnoy, M., Froumin, I., Loyalka, P.K. et al. The concept of public goods, the state, and higher education finance: a view from the BRICs. High Educ 68, 359–378 (2014). https://doi.org/10.1007/s10734-014-9717-1
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DOI: https://doi.org/10.1007/s10734-014-9717-1