Not all markets are created equal: re-conceptualizing market elements in higher education

Abstract

Increasing reliance on market mechanisms in higher education is analysed both as one of the approaches to steering as well as in relation to the consequences of markets for quality and accessibility of higher education. This article goes beyond the normative considerations of market elements as inherently good or bad and the economic theory-guided focus on freedoms of users and providers, by presenting an alternative conceptualization. The conceptualization adapted from studies of markets in other parts of the welfare state to the context of higher education is based on two dimensions: (1) who effectively controls production of certain goods and services and (2) how access to and funding of these goods and services are regulated. It focuses on interests of three main actors—the state, the users (students) and the providers (higher education institutions). This leads to six conceptually distinct markets, whose key characteristics are illustrated by examples from Denmark, England, India, Norway, Portugal and Serbia. The key message is that this alternative conceptualization allows identifying variance in marketization of higher education with regards to (1) which actors are empowered, (2) who are the likely winners and losers and (3) what might be the risks of introducing specific market elements in a higher education system. More generally, a more nuanced analysis relying on this conceptualization can potentially contribute to a deeper understanding of political and policy dynamics in higher education.

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Notes

  1. 1.

    As demonstrated, in student protest at the University of Amsterdam and the London School of Economics in February/March 2015.

  2. 2.

    Gingrich uses the terms ‘producers’ and ‘consumers’. Given that in higher education one can only speak of ‘quasi-markets’ and higher education cannot be characterized as a pure private good (Marginson 2011), the more appropriate terms (used in this article) are ‘providers’ and ‘users’.

  3. 3.

    For principal-agent theory, see Laffont and Martimort (2002). The theory of incentives: the principal-agent model, Princeton (N.J.): Princeton University Press.

  4. 4.

    The term austerity is not linked to its conventional understanding of economic policies aimed at cutting public expenditures, but rather describes a situation where costs for services are not (entirely) funded through the public purse but (partly) privatized, no matter whether this is due to budgetary problems or some other reasons.

  5. 5.

    The Act also changed the mode of fee collection from up-front to after graduation and shifted the system from means-tested fees to general fees for all students.

  6. 6.

    See also: http://ufm.dk/en/education-and-institutions/higher-education/danish-universities/the-universities-in-denmark/economics-of-university-sector/funding-for-education (page accessed 16 May 2017)

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Acknowledgements

The authors would like to thank two anonymous reviewers for their comments to earlier versions of this manuscript. Martina Vukasovic acknowledges support of the Research Council Flanders (FWO), grant number G.OC42.13N.

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Correspondence to Martina Vukasovic.

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Primary sources

Norway

The Universities and University Colleges Act of 1 April 2005, available at: https://www.regjeringen.no/globalassets/upload/kd/vedlegg/uh/uhloven_engelsk.pdf (page accessed 16 May 2017).

Regulations concerning quality assurance and quality development in higher education and tertiary vocational education of 1 February 2010, available at: https://www.regjeringen.no/contentassets/e5d100b82144410ca83db5db097f0a51/regulations-governing-quality-assurance-and-quality-development.pdf (page accessed 16 May 2017).

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Serbia

The Higher Education Act, available at (in Serbian): http://www.parlament.gov.rs/upload/archive/files/cir/pdf/zakoni/2005/pdf-1616-05-cir.zip (page accessed 16 May 2017).

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Jungblut, J., Vukasovic, M. Not all markets are created equal: re-conceptualizing market elements in higher education. High Educ 75, 855–870 (2018). https://doi.org/10.1007/s10734-017-0174-5

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Keywords

  • Marketization
  • Steering
  • Conceptualization
  • Users
  • Providers
  • State