Privatization as a social science concept is used in broad and narrow senses. Theoretical and empirical research on privatization in a broad sense, developed mostly within political economy, political sciences and economics, has been historically focused on two parts of the world: the USA (as well as the United Kingdom, see Le Grande and Robinson 1984; Walker 1984; Starr 1989; Feigenbaum et al. 1998) and European transition post-communist countries (see Spulber 1997; Nelson et al. 1997). Conceptualizations of privatization in higher education though, that is privatization in a narrow sense, refer mostly to the USA (Johnstone 2000; Priest and St John 2006; Morphew and Eckel 2009; Fryar 2012), with a limited number of publications on other parts of the globe (such as Poland, Australia, China, and selected other Asian and African countries, see Marginson 1997b; Kwiek 2016a; Painter and Mok 2008; Mok 2011; and Wang 2014).
Narrowly defined, privatization means denationalization and refers to the transfer to private ownership of public assets; including sales of public land, infrastructure and enterprises (see Starr 1989; Spulber 1997; Belfield and Levin 2002). Privatization has different meanings at three levels: an “idea,” “theory and rhetoric,” and “political practice” (Starr 1989: 15); at the level of political practice, privatization is a fundamental “reordering of claims in society” and in its extreme forms—known from post-communist transition economies in the 1990s—an instrument of “class politics” (Starr 1989: 42–43). The links between privatization in its broad and narrow senses are close (Whitty and Power 2000; Kaplan 2009; Priest and St John 2006). The frontiers between public and private sectors are “not always easy to define or clear-cut” (Spulber 1997: 101). The terms “public” and “private” are politically crucial: They sum up a “whole structure of rules and expectations about the proper conduct and limits of the state” (Starr 1989: 42).
In general terms, any privatization proposal involves the “rolling back of the activities of the state” (Le Grande and Robinson 1984: 3). The state can involve itself in social and economic activities in any of the three ways: provision, subsidy or regulation; the state can provide a particular commodity, subsidize it, and regulate its provision. Therefore, in the case of higher education, its privatization would entail the reduction of state’s role along these three dimensions—and de-privatization, by analogy, would entail the increase in its role along these dimensions. Privatization (and privatization in higher education) has also an important normative dimension, though: the role of the state and its services in democratic societies, which go far beyond provision, subsidy and regulation. The privatization agenda inevitably raises the questions of equitable access, intergenerational social mobility, and the individualistic nature of modern societies (by analogy, de-privatization also carries important social implications as it emerges from a different, more collective and less individualistic normative basis).
The role of the state in regulating higher education is globally on the rise (Altbach et al. 2010). This is not related to privatization processes, though, being part of a New Public Management “managerial revolution.” Also in the region, privatization and de-privatization processes are linked to only two of the three Le Grand and Robinson dimensions: provision and subsidy. At the heart of the privatization, strategy was the assumption that the public sector was “wasteful, inefficient and unproductive” (Walker 1984: 30). While privatization at a political level is an ideology—de-privatization does not seem to have ideological overtones: It is linked to more mundane factors such as, most of all, declining demographics (see e.g. Kwiek 2013).
There is a lack of conceptual clarity in theorizing about privatization in higher education (Fryar 2012: 521), and the precise definition of the term remains “elusive” (Ikenberry 2009: 2). Consequently, privatization means “many things” (Altbach et al. 2010: 73) and it is a “nuanced phenomenon” (Eckel and Morphew 2009: 183). It has “neither an unequivocal definition nor absolute or delimited characteristics” (Gómez and Ordorika 2012: 219). Most common among discussions of privatization are its definition as the decline in state support for higher education (Teixeira 2012). The privatization theme has been extensively treated in the last two decades. For instance, privatization of public universities can be viewed as the decentralization of governmental control (Eckel and Morphew 2009: 190–191); shifts in public opinion about the value of higher education, as studied through a median voter model (Toutkoushian 2009: 74–75); decreases in public funding and increases in entrepreneurial activities within institutions (Ikenberry 2009: 5), and increased reliance on market mechanisms to govern higher education (McLendon and Mokher 2009: 25–26) or increases in competition for students and resources (Kaplan 2009: 128)—as Fryar (2012: 523) shows taking the single volume on “privatizing the public university” in an American context as an example (see Morphew and Eckel 2009). The de-privatization theme seems to have been heavily under-researched: It has been mentioned in passing only in several isolated instances (e.g., Painter and Mok 2008; Mok 2011).
Despite accounts in which the public and the private are increasingly viewed as “blurred” (both American, see Geiger 2007; Altbach et al. 2010; Sanyal and Johnstone 2011; and European, see Enders and Jongbloed 2007), in the region, a still sharp divide between public and private institutions, publicly supported and privately supported students, public sector students and private sector students, as well as between public and private sources of funding—is analytically useful. Despite the fact that in other parts of the world these tools may no longer be useful. The core of the post-1989 transformations from the public–private perspective was the emergence of the privates and the appearance of fee-paying students in the public sector.
I am using in this paper the two contrasted dimensions of the private (privateness) and the public (publicness) in higher education, following Levy in his studies on the private sector. He assumes that “the private–public distinction matters” (Levy 1986: 293) and that it is “strong” (Levy 2013: 3). In practical terms,
we count private and public by their juridical designation, which generally overlaps ownership: if an institution is legally public we count it (and its enrolment) as public, regardless of its degree of “privateness” in finance or administration (Levy 2013: 3).
Following Guy Neave (2008: 73), privatization can have two forms: direct (the private sector expansion) and indirect (the decreasing reliance on public revenues raised from taxes). While in Western Europe direct privatization occurred in selected countries only (especially in Portugal and Iceland), in the region direct privatization used to dominate. Neave (2008: 74) shows a nuanced picture in which there is a tripartite classification of “state,” “non-state” and “private” institutions in Western Europe, with new publicly funded foundation-like institutions in Germany, Norway and Sweden—which does not apply to the region. I assume that the strong public–private distinction is useful for a study of de-privatization. Consequently, changes in higher education systems in two or more countries can be located along the two publicness-privateness continua—one for funding and the other for enrolments—and compared over time. Privatization and de-privatization may occur along either of the two dimensions or along both of them. In the region, de-privatization at the system level clearly occurs along both dimensions, but at the institutional level, the changes may go in different directions: There may be privatizing institutions in de-privatizing national systems, and privatizing faculties in de-privatizing individual institutions (as I show in fifth section based on empirical examples).
Privatization (and de-privatization) is highly context-sensitive (Marginson 1997b: 460), with different meanings in different jurisdictions. In the US, private–public boundaries have long been “blurry,” and in global perspective “it seems common that private–public distinctiveness can diminish over time” (Levy 2008: 45). Therefore both concepts need to be nuanced. In some jurisdictions, the state contracts out the provision of higher education and research services, or buys them on behalf of consumers or society at large from universities regardless of their (public, private or foundation-like) legal status. Legally independent (private) corporations can provide publicly funded services under conditions tightly regulated by the state. Williams (2016: 131–133) argues that in Eastern Europe, China, and much of the English-speaking world, in the last quarter of a century higher education has shifted from being treated by governments as a “public service” to a “private commodity” subject to the laws of supply and demand.
Privatization and de-privatization are much more clear-cut in the region where there are clear public/private distinctions in ownership and resourcing: privates receive almost exclusively private funding (although their students are entitled to receive state-subsidized loans), and publics receive predominantly public funding (and are entitled to charge fees in most cases to “part-time” or “second-track” or “out of quota” students). In financing, public sectors in the region are still “truly public” and private sectors are “truly private” (as Levy referred to his Latin American cases, 1986: 293). Therefore, while “just dividing higher education into a ‘public sector’ and a ‘private sector’ is too simple” (Calhoun 2011: 3), in the region, it is much simpler due to short history of cost-sharing and clear-cut characteristics of the private sector. Globally, though, there are such ongoing nuanced processes as a decline in “privateness in private institutions” and the rising “privateness in public institutions” (Levy 2013: 16)—which mean, in terms of funding, more public (direct or indirect) subsidies in the former and more income from fees in the latter.
For a study of de-privatization, major research on privatization which turns out highly useful are works by Gareth Williams, Daniel C. Levy, Simon Marginson, D. Bruce Johnstone, and Roger L. Geiger. Williams (1996: 52) links privatization at an institutional level to driving costs down until all the resources of the university are devoted to “the most profitable income-generating activity open to it.” Privatization therefore inevitably means the changing nature of the university in which economic survival and financial viability are becoming inseparable from its “mission.” De-privatization, in contrast, would increasingly keep university missions away from income-generating activities (focused on outside private funding) and economic survival would emerge in the context of the growing competition for public funding in its diversified forms. Following Williams’ distinction between the three aspects of privatization (“macro-privatization,” “micro-privatization” i.e., market principles in university organization, and privatization as “the introduction of quasi markets into the allocation of public funds”): The macro-privatization in the region is in retreat but the micro-privatization is in full swing, as is privatization as the introduction of internal markets. Referring to Williams’ (1996: 39–40) six versions of privatization at the institutional level, de-privatization in the region would mean publicly owned universities receiving decreasing shares of their income from student fees.
Following Simon Marginson’s (1997a: 36) description of privatization in enrolments (it occurs “when parents transfer their children from government to private schools”), de-privatization can be defined from another angle: as the process of students massively choosing public institutions over private institutions—which is exactly the empirical case in the region now. There are three major reasons for this change: first, public institutions are tuition-free (and private ones are tuition-based). Second, public institutions are being massively funded with both national and European Union structural funds under declining demographics, and therefore, they are becoming ever more accessible, with ever more vacancies (OECD 2015; Curaj et al. 2015). And third, after a quarter of a century, the private sector is still “in search of legitimacy” (Slantcheva and Levy 2007; Levy 2013: 9; Kwiek 2012, 2015b), prestige is still provided predominantly by the best public universities, and there is no “public sector failure” (Marginson 1997b: 477) which contributed to demand-absorbing private sector growth in the 1990s (see Kwiek 2016c).
Following Johnstone’s (2000: 2) definition of privatization in higher education as a “direction or tendency on multiple dimensions” between two extremes: “high ‘publicness’” and “high ‘privateness’” toward the latter—the dimensions being (1) mission or purpose, (2) ownership, (3) source of revenue, (4) control by government, and (5) norms of management—I would define de-privatization as a shift along different dimensions toward the “high publicness” extreme on the continuum. In the region, two dimensions tend to indicate privatization (mission or purpose; and norms of management) and three tend to indicate de-privatization (ownership; source of revenue; and control by government). There can be shifts in different directions—or stability—along the different dimensions over time, depending on the level of analysis (bearing in mind that privatization—and de-privatization—are “relative and directional rather than absolute” [Feigenbaum et al. 1998: 9]). Management and governance are harder than finance to define as public or private (Levy 2008: 48) and should be measured with respect to both changing legislation and changing practices. The model Johnstone applied to the institutional level can also be applied to other levels of analysis. Geiger (2007: 140–141) defines privatization through its three aspects: (1) an increased reliance on private (rather than public) resources, (2) increasing cooperation with private industry, and (3) increase in the importance of private institutions (size, prestige or influence). Consequently, de-privatization would be (1) an increased reliance on public rather than private resources (particularly in supporting public institutions), (2) decreasing cooperation with private industry, and (3) decrease in the importance of private institutions. The second form of de-privatization does not find empirical confirmation in the region but the first and the third certainly do.
Finally, Levy (2013: 11–12) argues that private sector growth has been part of a “broad privatization” in higher education. De-privatization in this context would be the decline of private higher education (in terms of the number of institutions, nominal or proportional enrolments in the private sector, and nominal or proportional share of fee-based private funding in the system). He views the current public sector privatization as a response to the challenge posed by private higher education growth. “What happens in the public sector—by government action or from within public higher education—can have major effects on the size of the private sector” (Levy 2013: 7): In this sense, de-privatization influences both sectors as they are strongly interrelated. What he terms “expansionary policies” in public higher education do indeed lead in the region to proportional private sector decline (Levy 2013: 10). Table 1 summarizes definitions of de-privatization as derived from major privatization literature briefly discussed above.
A set of traditionally distinctive concepts of “public” and “private” still works well in the region: It enables a simplified conceptual apparatus to operationalize and measure de-privatization. In this part of Europe, as in Levy’s (2008: 46) general observation, “for the most part, the public sector remains quite public whereas private institutions are privately financed and have governance and accountability profiles consistent with their funding and purpose.” While privatization was a powerful conceptual tool to comprehend systemic changes in the 1990s (see Kwiek 2012), de-privatization may be a useful tool to comprehend recent and future changes. At the same time—changing the terrain from public and private resources and ownership to public and private outcomes and benefits from higher education—the public sector in the region is increasingly being reconceptualized as producing private outcomes, and the private sector increasingly attempts to reconceptualize itself as producing public outcomes. Of the two parallel processes, the former is much more advanced. In terms of outcomes, as Marginson (2007: 323) argues, national higher education systems produce “a mix of public and private goods” which is “highly variable and policy sensitive.”
Marginson in his recent work (2016a, c) provides a highly useful conceptual framework to sort out the conceptual and empirical ambiguity of the concepts of public and private outcomes, drawing on his previous work on “markets” and “the public/private divide” and going beyond it (from Marginson 1997a to Marginson 2007). He combines two traditional distinctions (stemming from the state/non-state political approach and from the non-market/market economic approach) and suggests four political economies of higher education represented graphically in the form of four quadrants: Civil Society (I), Social Democracy (II), State Quasi-Market (III) and Commercial Market (IV). The ingenuity of this proposal is that “together, the economic and political modes constitute a more explanatory and more instrumental framework for operationalizing the public/private distinction in higher education, than either the economic or political mode can provide alone” (Marginson 2016c: 24). Referred to the region, higher education activities had been moved from Quadrant 2 to Quadrant 3 in the era of post-communist expansion, including demand-absorbing private sector growth—and seem to be gradually returning to Quadrant 2 in the current era of contraction, including ongoing private sector decline. An environment of quasi-market in (fee-based) student places is being turned into an environment of tuition-free places. Although Marginson does not refer to the processes of de-privatization, they share many characteristics of the move from an Anglophone-style Quadrant 3 to a Nordic-style Quadrant 2 in his analytical framework: higher education in the region, in his terms, would be gradually moving from State Quasi-Market to Social Democracy, in an opposite direction than in the rest of Europe.