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Higher education: a public good or a commodity for trade?

Commitment to higher education or commitment of higher education to trade

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Abstract

Conventionally, higher education is regarded as a public good, benefiting not only the individuals but also the whole society by producing a wide variety of externalities or social benefits. Of late, however, the chronic shortage of public funds for higher education, the widespread introduction of neo-liberal economic policies and globalization in every country and in every sector, and the heralding of the international law on trade in services by the World Trade Organization and the General Agreement on Trade and Services—all tend to challenge the long-cherished, well-established view of many that higher education is a public good, and to propose and legitimize the sale and purchase of higher education, as if it is a normal commodity meant for trade. The very shift in perception on the nature of higher education from a public good to a private good—a commodity that can be traded—will have serious implications. The paper describes the nature of the shift from viewing higher education as a public good to a private, tradable commodity and its dangerous implications.

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Notes

  1. See Tilak (2008) for a review of Indian experience in this context.

  2. Hence, it is not proper to blame, as some (e.g., Grace 1994) do, economic science for the neglect of public good nature of education.

  3. But not all collective consumption goods are public goods. Some of them are “price-excludable” goods, i.e., some can be excluded using the price mechanism (e.g., clubs), some are “congestible” goods, i.e., the more the consumers, the more congestion there is (e.g., a public road, or a music programme in an auditorium).

  4. Stiglitz (1999) has identified five such global public goods, viz., international economic stability, international security (political stability), international environment, international humanitarian assistance, and knowledge. See also several papers in Kaul et al. (1999) and Kaul et al. (2003).

  5. For example, each one cannot have a school; or each cannot and should not be allowed to have a pistol for safety.

  6. See Besley and Ghatak (2006) for a discussion of different types of public goods, including market-supporting and market-augmenting public goods, and on spontaneous provision of public goods.

  7. The additional person may, however, have to incur a small cost of accessing it, say in the form of purchasing the book.

  8. Given the quantum and nature of externalities, and the individual benefits, some prefer to treat school or more specifically basic education as a “pure” public good, and higher education as a quasi-public good (Blaug 1970; Levin 1987; Tomlinson 1986), but a public good nevertheless.

  9. In fact the Commission goes further, adding that for the same reason, “the costs of higher education are assessed against all, or nearly all, adults directly or indirectly.”

  10. On dynamic externalities, see Schultz (1988), Romer (1986, 1990), Lucas (1988) and Stewart and Ghani (1992). See Azariadis and Drazen (1990) and Behrman (1990) for a discussion on “technological” externalities. See also Schultz (1990) and Birdsall (1996) on the externalities produced by research and higher education.

  11. For example, the Indian university system is found to have played a very significant part in education for democratic citizenship (Béteille 2005). See also Patnaik (2007).

  12. Weale (1993, p. 736) argues that these externalities are particularly important in developing countries. See Bowen (1988) and Leslie (1990) for elaborate descriptions of externalities in education.

  13. See Tilak (2006, 2009) for a critique of some of the assumptions and claims of advocates of private higher education.

  14. See, for example, www.ifc.org/edinvest, which produces a monthly electronic newsletter, championing the cause of facilitating investment in the global education market.

  15. Only 52 countries (including the European Union, which is counted as one country) made commitments with respect to education sector as of March 2006. Of these countries, 36 have agreed to liberalize access to higher education (Education International 2006; Knight 2006). Further, it is important to note that the public higher education sector is in principle not covered by the GATS negotiations and no member country has expressed an interest in including it. But the situation seems to be changing rapidly.

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  1. National University of Educational Planning and Administration, 17-B Sri Aurobindo Marg, New Delhi, 110016, India

    Jandhyala B. G. Tilak

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Revised version of the keynote address delivered in the Second Nobel Laureates Meeting at Barcelona, organised by the Global University Network for Innovation & Universidad Politécnica De Cataluña, Barcelona, Spain (December 2, 2005). Without implicating for the opinions and the errors that remain in it, the author acknowledges with gratitude the helpful comments and observations made by Frederico Mayor, Marco Antonio Dias, Josep Ferrer Llop, Nobel laureates Joseph H. Taylor, Jr., Adolfo, Perrez Esquivel, Jerome I. Friedman, Jose Seramago, Werner Aber, Martinus J.G. Veltman and Rigorreta Menchu Tum, who participated in the meeting and the two anonymous referees of the PROSPECTS.

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Tilak, J.B.G. Higher education: a public good or a commodity for trade?. Prospects 38, 449–466 (2008). https://doi.org/10.1007/s11125-009-9093-2

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