The Concept of public goods, the State, and Higher Education Finance

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.

The concept of public goods, the state, and higher education finance: a view from theBRICs
Author(s): Martin Carnoy, Isak Froumin, Prashant K. Loyalka and Jandhyala B. G. Tilak
Source: Higher Education, Vol. 68, No. 3 (September 2014), pp. 359-378
Published by: Springer
Stable URL: http://www.jstor.org/stable/43648725
Accessed: 12-06-2018 23:17 UTC
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High Educ (2014) 68:359-378 DOI 10.1 007/sl 0734-0 1 4-97 1 7- 1 The concept of public goods, the state, and higher education finance: a view from the BRICs Martin Carnoy • Isak Froumin * Prashant K. Loyalka * Jandhyala B. G. Tilak Published online: 25 February 2014 © Springer Science+Business Media Dordrecht 2014 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. Keywords Affirmative action • Cost differentiation • Externalities • State legitimacy The most difficult issues of political economy are those where goals of efficiency, freedom of choice, and equality conflict. James Tobin, 1970 M. Carnoy (IS!) • P. K. Loyalka Stanford University, Stanford, CA, USA e-mail: [email protected] P. K. Loyalka e-mail: [email protected] I. Froumin National Research University Higher School of Economics, Moscow, Russia e-mail: [email protected] J. B. G. Tilak National University of Educational Planning and Administration, New Delhi, India e-mail: [email protected] SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
360 High Educ (2014) 68:359-378 Introduction Higher education has historically been viewed as both a public and a private good, and higher education financing has been at the center of the debate over this definition (see, for example, Donahue 1989; Stiglitz 1999). As others have noted, education inherently serves both private and public interests (Levin 1987; Marginson 2007). It serves private interests by enhancing the capacity of individuals to gain economic and social benefits. It also has public value because more highly educated individuals are likely to increase others’ productivity (Romer 1994) and to embrace the fundamental tenets of a tolerant democratic society, which benefits all citizens (Mill 1869). Because higher education serves both public and private interests, its conception and financing is contested politically, appearing in different forms in different societies (Kaul and Mendoza 2003; Marginson 2007). When seen this way, what is public and private in education becomes a political-social construct (Mansbridge 1998; Menashy 2011), subject to various political forces, primarily interpreted through the prism of the state. Mediated through the state, higher education’s construct can change over time as its economic and social context changes. According to Samuelson’s classic definition (1954), a public good is characterized by nonrivalrous consumption – its consumption by one individual does not detract from consumption by another individual – and non-excludability – it is difficult if not impossible to exclude an individual from enjoying the good (Stiglitz 1999). According to this defi- nition, the public good aspects of the knowledge individuals acquire in higher education are those that others in society get to consume – for example, co-workers who pick up some of the higher educated individual’s knowledge or fellow citizens treated more tol- erantly and fairly because of the knowledge the individual acquired. Thus, a principal issue in the public/private good controversy is social efficiency. If there are significant economic and social externalities associated with increasing the number of higher education grad- uates or if imperfect capital markets pose barriers to socially optimal levels of investment in higher education, public interest demands levels of state subsidies that would provide adequate higher education for the public good. This economic approach is useful heuristically, but much of the value of externalities ultimately depends on ideology (what “society” defines as having social value), and ideology, in turn, depends on political power relations. If the political decision process is truly democratic and pluralistic, and full information is equally available to all individuals, the value of externalities could closely reflect the sum of the values individuals living in a society place on them. But this democratic, full information political model is rarely realized. In most societies, economic power and state power are closely entwined. The state (the political system) places a value on externalities that reflect these highly unequal power relations and the asymmetric influence, even in a democracy, of economically powerful groups in defining the value of externalities associated with certain types of higher education. Equity has also played a role in the debate: lower social class families may face especially large financial, informational, or other disadvantages in gaining entry into higher education. The most important of these is that higher social class families impart academic advantages to their children before and during their schooling that are less available to children of lower social class families. If a society values fairness and places social and political value on ensuring desired levels of equity, the public aspect of education would include financing it in ways that mitigate such disadvantages (Koski and Reich 2006). This equity argument has been extended to make education as a whole – including higher SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
High Educ (2014) 68:359-378 361 education – a human right, situating public expense.1 Again, social preferences depending on power relations in the financing means in terms of higher In this paper, we analyze how the state’s public/private good. We also analyze changes. We do not pretend to “prove” understand the dynamics of higher paper is therefore largely suggestive. The analysis is also somewhat different related to it. We focus more on how institutions students attend. Yet, we the costs of higher education, and some charging tuition to absorb enrollment tion even more toward a private good In our discussion of higher education somewhat narrower issue of higher education the BRIC countries – Brazil, Russia, esting in studying shifts in the definition several reasons: forty percent of the university systems have expanded public/private nature of their systems; (China and Russia), higher education BRICs are not necessarily typical of developing of interesting and important examples cation expansion and the implications of social efficiency and social equity. Although we center our analysis on theory of BRIC state behavior to explain higher education expansion and quality in the particular historical contexts countries have very different political, ficult to come up with a single, unified Nevertheless, for all their different (Castells 1996), BRIC states do have Tobin (1970) has argued, for example, that spirit of commodity egalitarianism. 2 Although the shift to direct private financing as a public or private good, there are important institutions. Paying for publicly owned services State-owned hospitals and universities and services they provide. Public ownership conveys behave that differentiates them from private regulated) by the state are still “private” in that rights different from state-owned entities. Students higher education institutions generally have paying for public services does make them plays a role in deciding how much of that good privately owned firms makes them more “public” market forces. <0 SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
362 High Educ (2014) 68:359-378 largely by seeking political legitimacy, but also internationally, and that they potentially important role in achieving power to survive, and various theories power is reproduced – whether the whether it is powerful interest groups resides in those who control capital, resides directly in the structures of power, cation, ideology, and the state’s control for a summary). Our main argument is that these states versity education, to simultaneously political legitimation with the mass employability and social mobility (Offe of higher education is played out in realize the self-interest of the state versities) to increase state revenue and groups in the state bureaucracy may power – that is, how to keep control ultimately competing bureaucratic groups or collapse. Expanding education and reforming education – in the state’s collectivity probability that workers find jobs, gives move up the social and economic ladder, capital through higher worker productivity, bureaucrats’ power and legitimacy. public interests is part and parcel of It is fair to ask whether in a globalized constructions dominate nation-states’ cation systems. A number of recent countries have focused on the shift universities to a reliance on private private or public institutions (World 2009; Tilak 2008). This shift and other oping countries has been linked to a culture (Marginson and Ordorika 2010). Our analysis allows that globalization policies and that part of its impact views toward directly privatizing education vately paid for schools and universities lected through tuition in public institutions. another important impact of globalization, higher education, particularly certain Our analysis also suggests that in terms important part of the public-private private definition of higher education way the state distributes its resources, BRIC countries – only a moderate proportion population has access to higher education. Ô SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
High Educ (2014) 68:359-378 363 performance in secondary school and dents from higher socio-economic considerations suggest that those who private payoffs associated with higher some way, either up front by paying appropriately on the private economic to achieve greater fiscal equity, such form to services or subsidies for lower At the same time, charging tuition investors – could pose financial barriers therefore view it as inherently unfair. preference for equity may simultaneously implement affirmative action and subsidy public and private universities. Given our framework for how the good is played out in the contested political state’s distribution of both higher education education among different social class for discussing higher education as a public/and spending public resources to fund power relations in its shifting provision simultaneously, helps us understand higher education continues to expand. The shift to direct prívate financing Four decades ago higher education accessible to a limited few, and, except attended. Today, the four countries have, sharing by introducing tuition fees in to become more of a “private” good essentially independent private universities. shifted the responsibility for funding their families. China Of all the world’s countries, China has made the most radical transformation of its higher education system in the shortest period of time. The state closed down the university 3 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). 4 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). 40 SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
364 High Educ (2014) 68:359-378 system during the Cultural Revolution having negative public value). Universities expanded enrollment. Higher education about 3 million (three and four-year degree) At that point, the state’s political views education changed. Enrollment was allowed 27 million students, by 2009, of which 15 % of the age cohort). The basic sources changed substantially – from a system contributions (83 % of funding; much universities, not tuition) in 1990 to one came from direct government contributions and other student fees in 2009. Today, 80 % of students attend public costs of their education. The proportion institution and is lowest for the most expensive attend “overflow” private institutions that the government) but are characterized many families, cost sharing was argued education expansion (Min, 2004). Average approximately 4-5 times from 1997 potential political backlash from further 2006 levels for 5 years such that they would systematically by province, university Council 2007). India India’s higher education system is still structure as a federal system, with considerable the states (Carnoy and Dossani 2013). with about 4.5 million students; by 2009-with 17 million students (of which about massive growth, the proportion of the remained relatively low (as in China), An increasing proportion of students some states, tuition revenue is more than the rapidly increasing number of “unaided” tuition. Expansion and the shift to private political patronage system in the Indian education accounts for about four-fifths 60 % overall. Private engineering colleges dent enrollment in 2011-2012 (Planning At the same time, India has legislated Indian students designated as “disadvantaged” of fees (or no fees in some states) even required to admit one-half their students SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
High Educ (2014) 68:359-378 365 Brazil Like India’s higher education system, colonial legacy, which made it a late higher proportion privately financed private enrollment was already 60 % the expansion after 1997. Enrollment from 1.8 million students in 1995, of million students in 2010, of which 4.0 75 % of enrollment is in private institutions Brazil’s system is very different from public universities have traditionally the 1980s) and continue to be free of India) of university and other post-secondary private institutions. Third, some of those Catholic. Thus, in terms of defining heavily on enrolling students in privately them for-profit, only moderately regulated Recently, Brazil passed affirmative admit disadvantaged minority students The Brazilian government also provides students to attend private universities. Russia Russia’s current university system was largely in place by the 1980s, with high levels of youth enrollment by developed country standards, completely free for students (by law, under the Soviet Constitution) and organized to meet the demands of a command economy. Many universities were linked directly to particular industries. As the command economy went into economic and political crisis in the late 1980s and early 1990s, funding for higher education declined by about 40 % and enrollment declined by about 10 %. To support “excess demand” for university places, The Yeltsin government changed the Constitution during the government’s revenue crisis to allow public universities to admit fee-paying students (Brainerd 1998). As the economy began recovering in the mid-1990s, Russia witnessed an enormous enrollment increase over the next 12 years. Eventually, the state also allowed for private higher education institutions. By 2008, Russia had one of the world’s highest percentages of young people enrolled in higher education (76 %). The Russian government continued to allocate government paid (“budgeted”) places to universities for different fields of study. Tuition-based financing had a particularly large effect on highly demanded fields of study such as economics and business, so that by 2006, almost one in two students in public institutions was paying tuition. In addition, private institutions served increasing numbers of students. By 2011-2012, about 17 % of students were in private higher education. How much do the BRIC countries spend on higher education? One of the direct effects in three of the BRICs of expanding enrollment by shifting to increased direct private financing of higher education was to reduce average costs per <0 SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
366 High Educ (2014) 68:359-378 student (Brazil and China) or maintain spending for students attending public and private institutions for the first taking place in spending per student Figure 1 shows these estimates in 2005 for differences in living costs between as developed countries such as France, PPP$1,400 per student, including private and India (slightly) reduced average because of the drop in average tuition increasing petroleum revenues in the levels in the 1990s. Much of the drop in higher education spending per student in Brazil, China, and India has come from a “composition effect.” As more students enrolled, low cost (and lower quality) institutions absorbed a greater proportion. In China, this meant the rapid growth of non-elite public institutions and eventually low quality private institutions. In Brazil and India in the 2000s, it took the form of a rapid increase of low-cost, generally low quality private institutions. Thus, the mass of “new” students was largely absorbed in low spending per student institutions, and this drove down average costs per student in higher education. Why were the BRICs able to increase cost sharing? During this period of rapid expansion, all four BRIC countries moved in a variety of ways away (China, Russia) or further away (Brazil, India) from a free, highly subsidized public good conception of higher education. One argument is that they did so because of a global ideological change regarding the state’s role in the economy, driven mainly by the United States and Great Britain and supported by important national agencies such as the World Bank and International Monetary Fund. There is evidence that the 1980 s saw such an ideological shift and that it influenced economic restructuring in Brazil, India, and Russia in the early 1990s. Shifting ideology therefore probably played some role in the decisions to shift to private financing in higher education (Serra and Stiglitz 2008; Edwards 1998). However, in terms of our notion of state legitimation, a better explanation of how globalization influenced higher education financing in the BRICs is rooted more in objective economic conditions – namely, globalization and the information revolution increased worldwide (and national) demand for higher educated labor. Together with the shift in China and Russia from command to market economies, this increased the relative incomes of (young) BRIC university graduates, in turn pressuring BRIC states to expand the number of places in higher education institutions. In addition to this direct pressure, the boom in information technology probably convinced states that investing in higher edu- cation had a high social payoff, particularly in terms of increasing average productivity in the labor force and therefore economic growth. Nevertheless, the BRIC states in the 1990s were hardly prepared to take on the total cost of greatly expanding their universities. The BRICs had lower per capita incomes in the mid- 1990s (China and India, much lower) and had less developed fiscal systems to increase revenues than the developed European countries had in the late 1960s, when they began their 5 In China, we used only public spending per student, although costs are slightly lower in private institu- tions. 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. Ô SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
High Educ (2014) 68:359-378 367 Fig. 1 BRIC Countries: total of private plus 2000-2009 (in 2005 PPP dollars). Source Authors’ Education at a Glance, 2001, 2002, and 201 latest higher education expansion. Russia BRIC governments needed to rely on From a social efficiency standpoint, have been justified in moving away model if private returns to higher ately (India), or already very high families to pay for higher education realize much higher earnings as graduates. likely to accept paying tuition when payoffs shifted enough, BRIC states families directly for higher education Private rates of return to higher education have increased rapidly (China), increased (India), and declined slowly from very increases in the absolute and relative the payoff to higher secondary school. the age cohort in higher secondary education now exceed the payoffs to We also found that the payoffs to engineering the BRICs than the average rates of private unaided colleges in India has main expansion of paid places in public 6 Not all the rates we show were corrected as a higher fraction of the age cohort attends SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
368 High Educ (2014) 68:359-378 The rapidly increasing average payoffs Brazil to completing university have made tuition in all fields of study. Such high (and rising) rates of return private interests, giving the state options and higher middle class) families without externalities associated with the expansion likely to be positive, and public pressure states have in various forms all indicated vestment in higher education, or simply from lower income families gain entrance difficulty paying tuition. India and Brazil cover both public and private institutions; 7 years; and Russia tightly controls the has kept up the number of budgeted population. However, the states in all places rapidly rather than at the much The trend toward increasing differentiation In addition to shifting to extensive private politically “negotiated” their definition explicit policies that increasingly differentiate tutions.1 In part BRIC states maintain by continuing to favor high-income families to attend university. In the new financing process of increased cost differentiation Increased financial differentiation political pressures. Superimposed on average cost per student was a new global countries were increasingly defined in included the quality of their higher Russia were especially sensitive to this their elite institutions to attain “world class” status. The “world class university movement” and the focus on developing expensive, research based elite universities could serve the state’s domestic legitimacy in several ways: (1) such universities are perceived to contribute significantly to economic growth by producing cut- ting-edge scientific research and highly trained cadres – less democratic (more “permanent” ) regimes, such as those in China and Russia, can take a longer-term view of economic growth and its impact on their political legitimacy; (2) developing prestigious institutions potentially helps legitimize the state as a national power, assuming that higher ranking in university league tables has political meaning domestically; and (3) investing in elite universities can help the state maintain legitimacy with some privileged groups in society by subsidizing their 7 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. Ô SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
High Educ (2014) 68:359-378 369 Table 1 BRIC countries: private rates of return per year of schooling) Country/level of education 1980 1990 1995 2000 2005 2008 Brazil Secondary 16 12 12 2C Brazil University 20 25 23 25c China Secondary 4 5 6 10 China University 3 6 9 20 India Secondary 20 14 6b 12 India University 13 12 12b 12 Russia Professional* 6 7 3 Russia University 5 5 6 10 6 Sources Brazil: Psacharopoulos (1985, hold survey data. China: Johnson and Li (2004), Zhang et al. (2005); authors for 2005. The results shown were estimated dummy indicator variables for level of wages at zero (i.e., the estimates account not correct for other types of selection authors’ calculations using India National odnichenko and Peter (2004), Denisova tudinal Monitoring Survey, 2004-2006 a Post-secondary, non-university b Males only – rates of return to secondary females in India, so the secondary school c Household survey data are less reliable secondary school, may be biased children to attend high cost public spending flowing to high-income elite) families pay for higher education Therefore, in addition to the “student in China, India, and Brazil quality institutions, real (corrected tutions in the 2000s also tended between spending in elite and non-In China, spending per student universities (about 3,200 constant increased substantially after 2007 Since tuition and other fees have institutions, discrepancies in total the first decade of the 2000s were allocations to each type of institution. financial support for elite institutions.8 “Project 985” has provided the designated stage, 28 in the second stage) institutions improving quality. Specifically 27.5 billion Yuan in the second stage (2004-2008), of the project. Project 211, which was system, has also provided most of the <£) SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
370 High Educ (2014) 68:359-378 Fig. 2 China: spending per student by type of granting higher education institutions). Source As both public and private non-elite work with than elite (Ministry-level) per student down. Indeed, the student-has risen rapidly during the expansion, (NBS various years). India’s enrollment expansion strategy public spending per the total students when it began rising (Fig. 3). 9 These per student, so they only indicate that students in the 2000s declined somewhat, fell by about one-half. Full costs are recovered for most significantly, also in public institutions universities (usually attended by the many state universities. In the late 1990s, many state universities, such as (63.7 %), and Punjab University (50.4 Beteille 2008). A high percentage of non-elite engineering we can estimate spending per these Footnote 8 continued 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. 9 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. Ô SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
High Educ (2014) 68:359-378 371 Fig. 3 India: public spending per student in Rs.). Source Calculated from the Ministry of Annual Reports (various years). Budgets for students. Technical education budgets are for students other than just engineering and computer about 13 % of all technical students in 2009 gathered data on fees from the web sites of various states in 2008 and again in 2012. Our estimates of average tuition fees set by several states for private unaided engi- neering colleges in 2006-2007 and in 2011-2012 suggest that tuition did not increase in real (corrected for inflation) terms in the past 5 years, except at in some expensive top private institutions. India also has a relatively small number of elite technical institutions. The currently sixteen Indian Institutes of Technology produced about 7,000 graduates in 2008. Entry into the IITs is extremely limited, by special examination, and graduates are considered com- petitive with graduates from elite undergraduate programs in the developed countries. Spending per student in the IITs is also much higher than in other public institutions. The allocated budget per student for the seven original IITs in 2008 was about US$3,100 per student (government data collected by authors; see also Banerjee and Muley 2007). This is almost certainly an underestimate. Using budget data from an institutional survey we undertook in 2009 in two IITs and one national institute, we calculated the average spending per student in those three institutions as $8,000 in 2009 dollars. Spending per student is much lower in institutions serving the mass of engineering and computer science students. The difference in India is probably greater than the difference in China, and elite Indian students are subsidized more than in China, except for the very highest cost Chinese institutions (such as Tsinghua and Peking Universities). Yet, spending SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTC
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372 High Educ (2014) 68:359-378 Fig. 4 India: trends in spending per student Source Banerjee and Muley (2007), Fig. 2.34, years). Notes In addition to the government grants IIT. According to Banaijee and Muley (Table grants in 2005 at IIT Mumbai, probably typical terms since 2005 (see their Figure 2.23) on operating costs per student in the in elite Chinese institutions in the past Since average spending per student (elite engineering institutions probably between the spending per student in other aided and unaided technical colleges government has chosen to expand rapidly professional institutions rather than spent per elite institution student. The average spending per higher to the public spending per student in plus the average tuition student pay butions to private education budgets, Church sponsors of private institutions, of total revenues these contributions Educacional 2009). Figure 5 shows the years 2000-2010 in public institutions Hoper Educacional’ s estimates of adjusted for inflation. 10 Hoper Educacional’ s study of spending 2009, 85-90 % of revenues came from tuition. Ô SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTC
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High Educ (2014) 68:359-378 373
Fig. 5 Brazil: public spending per public higher education, and average spending per student, Educacional 2009. Public spending per student publicas-p.a._precos.htm] Accessed weighting public spending and private tuition There are a number of reasons that average including a changing composition of private institutions, increasing numbers increased competition and drove down attracting lower income students. This the private sector is probably due to institutions that have lowered costs by less- well prepared instructors and increasing Like the other BRICs, Russia provides the non-elite institutions. In addition, source of differentiation: paying students institutions. The elite institutions not also likely to have more revenues per Government spending per higher education Russia until 2009. Although elite institutions the Russian government moved to officially (Category A). Thirty-eight Russian include the two traditional leading Universities – seven Federal Universities been or are in the process of being existing local institutions, and 29 universities <0 Springer
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374 High Educ (2014) 68:359-378
Fig. 6 Russia: estimated public spending per “university, 2006-2010 (2009 Rubles). Source Estimates Research University Higher School of Economics, Research Universities (NRUs).11 They class” institutions.12
Figure 6 shows how public spending risen in recent years, corrected for conforms to the government’s decision group of 38 elite institutions through infrastructure, for academic mobility emphasized additional financial support President’s Office 2008a, b).
Discussion
We have argued that the public/private nature of higher education is shaped through the
political prism of the state. We suggest that beginning in the 1990s – reluctantly or not – in
every BRIC country, families were apparently willing to pay much of the bill for access to
higher education rather then wait for the state eventually to expand the number of “free”
11 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.
12 Detailed data on spending for different types of universities and tuition revenues are only available for
these years.
Ö Springer
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High Educ (2014) 68:359-378 375 places using public revenues. At the ently were implicitly able to get the sufficient funds to respond reasonably Thus, in the trough of the post-Soviet a change in the constitution allowing Chinese public went along with a decree pay tuition. In India, regional states private colleges in lieu of rapid growth 2013). And, in Brazil, as a continuation major players the higher education system, 1990s, and for-profit private institutions recently. For both capital owners and rates of return made the large “externalities” public education both less necessary preference, as private rates of return the public at large that the externalities served a certain class of citizens to appropriate We also argued that an important nature of higher education was to increase in India, where it was already very spending on the mass of newly incorporated Russia). In all the BRICs, the public majority from high social class families, colleges. There are potential political pitfalls (contradictions) in redefining the public/private aspects of higher education in this way. For one, expanding higher education enrollment in such mass, low-and-declining-quality institutions risks creating major gaps in employ- ability and income between an elite few and the mass of fee-paying students (driving down the average rate of return to higher education). The graduates of such mass institutions might blame the state for their plight, even if the institutions are privately owned. Capital owners might also become dissatisfied with the quality of skilled workers produced by the higher education system. This strategy can also conflict with changing preferences for social and income equality. If public funding for higher education is allocated to various social class groups in an increasingly unequal fashion it could exacerbate inequality of economic opportunity.13 Such increasing differentiation is typically justified by an argument that economic and social externalities to investing in higher social class groups are increasing over time. Indeed, the implicit argument for spending heavily on developing “world class” institu- tions is precisely that in today’s global information economy, the value of high quality university education (and research) is much higher than in the past. If all social groups benefit from the externalities, the equity implications of increasingly differentiated public spending are less clear. Yet, because of rising private rates of return that are associated with the global knowledge economy, particularly to studying business and engineering, the political persuasiveness of such claims may not be as great as in the past. 13 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. SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
376 High Educ (2014) 68:359-378 The second type of issue arises from higher education institutions. In countries expanding enrollment (Brazil and India), more elite institutions are able to provide effectively increasingly excluding those for non-elite institutions to provide education quality of their education must steadily received is increasingly differentiated economic opportunities is determined of equity issues in the BRICs – mostly second in India and Brazil, and a different Further, having placed Brazil and India’s hands of private owners (with private those states should private rates of return Acknowledgments The authors would like to Freeman Spogli Institute, the U.S. Department Education (FIPSE), Peking University’s China Research University Higher School of Economics Planning and Administration (India) for their References Agarwal, P. (2006). Higher education in India: The need for change . ICRIER Working Paper No. 180. Altbach, P., & Levy, D. (Eds.). (2005). Private higher education: A global revolution, the Netherlands: Sense Publishers. Altbach, P., Reisberg, L., & Rumbley, L. (2009). Trends in global higher education: Tracking an academic revolution. Chestnut Hill, MA: Boston College Center for International Higher Education. Astin, A., & Oseguera, L. (2004). The declining “equity” of American higher education. The Review of Higher Education, 27(3), 321-341. Banerjee, R., & Muley, V. (2007). Engineering education in India. Mumbai: bnergy Systems bngmeenng. Beteille, T. (2008). India’s higher educational expansion in the global knowledge economy. Stanford, CA: Stanford University Graduate School of Education (mimeo). Bourdieu, P., & Passeron, J. C. (1977). Reproduction. Beverly Hills, CA: Sage Publications. Brainerd, E. (1998). Winners and losers in Russia’s transition. American Economic Review, 88(5), 1094-1116. Carnoy, M. (1984). The state and political theory. Princeton, NJ: Princeton University Press. Carnoy, M., & Dossani, R. (2013). Goals and governance of higher educaton in India. Higher Education , 65(5): 595-612. Carnoy, M., Loyalka, P., Dobryakova, M., Dossani, R., Froumin, I., Kuhns, K., Tilak, B. G., & Wang, R. (2013). University expansion in a changing global economy: Triumph of the BRICs? Stanford, CA: Stanford University Press. Castells, M. (1996). The rise of the network society. London: Blackwell. Commission, Planning. (2012). Approach to the twelfth five year plan, 2012-2017. New Delhi: Government of India. de Brauw, A. & Rozelle, S. (2006). Reconciling the returns to education in off-farm wage employment in rural China. Stanford, CA: Freeman-Spogli Institute, Stanford University (mimeo). Denisova, I., & Kartseva, M. (2005). Advantages of education in engineering : Estimates of returns to educational specialization in Russia. Moscow: National Research University Higher School of Eco- nomics, Working paper WP3/2005/02. Donahue, J. D. (1989). The privatization decision: Public ends, private means. New York: Basic Books. Duraisamy, P. (2002). Changes in returns to education in India, 1983-94, by gender, age-cohort and location. Economics of Education Review, 21 , 609-622. Dutta, P. V. (2006). Returns to education: New evidence for India, 1983-1999. Education Economics, 54, 431-451. <0 SpringerThis content downloaded from 192.111.112.81 on Tue, 12 Jun 2018 23:17:14 UTCAll use subject to http://about.jstor.org/terms
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