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Systems of Higher Education
The preceding chapters have made two central points.
First, societies have a profound and long-term interest in their
higher education institutions that goes beyond the pecuniary and
short-term interests of current students, faculty, and administrators.
Second, the current state of higher education in developing countries
is generally quite weak. While globalization, technological and
demographic changes, and the growing economic importance of knowledge
are making higher education reform more urgent and challenging than
in the past, some of these same factors are also making such reform
potentially more attainable.
This chapter explores the web of public and private
education institutions, governing bodies, and individuals that form
a higher education system. It also examines the formal and informal
rules that hold the web together, looking for the structure underlying
what can seem a chaotic set of activities and entities. The Task
Force believes that higher education needs to be developed in a
coordinated way, guided by a clear strategic vision. We therefore
go on to suggest guidelines for reforming higher education institutions
so that they function together more rationally as part of a system
that efficiently meets national goals.
In the past, few academics or policy-makers adopted
a systems perspective when discussing higher education, which is
why we devote a whole chapter to this topic. Analysts have tended
to focus on individual institutions or on education systems as a
whole. Although this is a sound approach in many circumstances,
the nature of higher education differs fundamentally from primary
and secondary education, and confers different benefits upon society.
An examination of higher education systems in their own right can
help to provide much-needed guidelines for institutions regarding
their roles and aspirations, to highlight society's interest in
higher education, and to suggest specific policy mechanisms to advance
that interest.
Outline of a Higher Education System
A higher education system consists of three basic elements:
- the individual higher education institutions (public and private,
whether profit or non-profit; academic and vocational; undergraduate
and graduate; on-site and distance-based, etc.) including their
faculties, students, physical resources, missions, and strategic
plans.
- the organizations that are directly involved in financing,
managing, or operating higher education institutions, comprising
a range of both public and private bodies.
- the formal and informal rules that guide institutional and
individual behavior and interactions among the various actors.
The system is not sealed from the outside world: it is at least
loosely bound to the overall education system, for example to secondary
schools that provide most of its new students. It is connected to
the labor market and the business community, and to various government
departments that set the policy environment in which it operates.
It also has international links, to regional and global higher education
communities, as well as to bilateral and multilateral donors, foundations,
and non-governmental organizations. (Figure 5 graphically depicts
a differentiated higher education system and its place in society.)
Figure 5 - Schematic Representation of
a Differentiated higher Education System
Higher Education Institutions
As we have discussed, higher education across the world is undergoing
a process of differentiation. This is happening horizontally as
new providers enter the system, and vertically as institutional
types proliferate. A diverse system, with a variety of institutions
pursuing different goals and student audiences, is best able to
serve individual and national goals. Recognizing the nature and
legitimacy of this diversity helps ensure that there are fewer gaps
in what the system can provide, while preventing duplication of
effort. It is also helpful for halting institutional drift, where
an institution loses focus on its “core business”, failing
to recognize that it is already serving a particular group of students
well. In the case of mid-level institutions, if their crucial role
is not understood they may try to gain prestige by moving up the
educational hierarchy. This is unhelpful if it leaves a group of
students poorly served and if the institutions are unable to function
properly as they move upstream.
It is therefore useful to characterize the main types of institution
that are typical within a higher education system. From the outset,
we distinguish between public, private not-for-profit, and private
for-profit institutions. To some extent, the objectives of these
institutions – teaching, research, and service – overlap;
so, too, does the autonomy they have to pursue those objectives.
However, there are also fundamental differences. Notions of the
public interest count more heavily in defining the mission of public
institutions than of private ones. Public institutions also tend
to be subject to greater bureaucratic control, which limits their
autonomy. On the other hand, they are more buffered from market
forces, giving them a greater measure of stability. State regulations
do affect private institutions, but generally leave them with greater
autonomy than public ones in academic, financial, and personnel
matters. All private institutions must cover their costs, but private,
for-profit institutions also have the generation of a surplus as
a core goal. These financial requirements impose considerable limits
on their activities.
Research Universities
Research universities, which stand at the apex of the educational
pyramid, tend to be public and certainly not for profit. Their overriding
goals are achieving research excellence across many fields, and
providing high-quality education. They pursue these goals by having
relatively light faculty teaching loads, emphasizing research accomplishments
in recruitment and promotion decisions, adopting international standards
for awarding degrees, and being highly selective about the students
they admit. They are most closely connected to advances in knowledge,
monitor breakthroughs in many fields, and also investigate ways
to exploit important results for social and private gain. Their
instruction – generally for both first and post-graduate degrees
– should be aimed at the country’s most hard-working and
best-prepared students. Research universities also have the capacity
to offer the most complete programs of general education (see Chapter
6).
Provincial or Regional Universities
Institutions that focus predominantly on producing large numbers
of graduates are another key component of a higher education system.
They emphasize teaching and the training of “job-ready”
graduates, especially those who can meet local skills requirements
in areas such as manufacturing, business, agriculture, forestry,
fisheries, and mining. They are commonly found in both the public
and private sectors, and tend to be geographically dispersed so
that collectively they can cater to the many students who do not
leave home to attend school. Provincial or regional universities
often produce the majority of a country’s graduates and tend
to lie at the heart of the system’s expansion. Some institutions
offer 2-year tertiary level degrees, much like community colleges
in many developed countries, offering another potential channel
for providing mass higher education.
Professional Schools
Freestanding professional schools – and professional faculties
in universities – provide training in fields such as law, medicine,
business and teaching, as well as other areas outside the jurisdiction
of traditional arts and sciences faculties. These schools typically
enroll students directly from high school and offer study programs
that focus almost exclusively on technical training in the relevant
area. Most developing countries have an urgent need for individuals
with specialized professional skills, so professional schools play
a critical role in national development, and often occupy a central
place within developing country higher education systems. For-profit
private institutions, in particular, can be directed into this area
by market forces, concentrating on preparing students for careers
with high private returns. Professional schools commonly pay little
attention to providing a general education that would serve many
students (and society) well.
Vocational Schools
Vocational schools operate in much the same way as professional
schools, but at a different level. They endeavor to impart practical
skills needed for specific jobs in areas such as nursing, auto mechanics,
bookkeeping, computers, electronics, and machining. They may be
parallel to (or part of) the secondary education system, or part
of the post-secondary system, but they are not often considered
a component of the higher education system per se. These schools,
many of which are private and for profit, play an important role
in satisfying real labor-market demands.
Virtual Universities and Distance Learning
Distance learning is an increasingly important part of the higher
education system, with its ability to reach students in remote areas
and address the higher education needs of adults. It is not in itself
a new idea – the University of South Africa, for example, has
offered academic degrees through distance study for decades –
but is growing at an astonishing rate (see chapter 1 for data on
the largest distance-learning institutions).
Distance learning can be offered by a traditional educational institution
or by new institutions that specialize in this mode of study. While
recent developments in communication technology and computers have
vastly increased the technical viability of distance education,
economic viability is still an issue in many countries because of
costly and extensive infrastructure requirements. In many parts
of Africa, for example, the telephone is still a luxury and long-distance
calls are extremely expensive. Efficient distance learning will
require affordable telephone and Internet access for this part of
the world.
In the past distance learning has been seen mainly as a cost-effective
means of meeting demand, with policy-makers paying inadequate attention
to ensuring that it provides comparable quality to traditional modes
of delivery. The Task Force believes that distance education offers
many exciting possibilities. Innovative curricula can be combined
with interactive, Internet-based technology, traditional educational
media such as television and print, written materials, and direct
contact with tutors. But it needs to be thoroughly integrated into
the wider higher education system, subjected to appropriate accreditation
and quality standards, and linked to the outside world. Research
into how this can be achieved – and how distance learning can
fulfill its potential – needs much greater attention.
Desirable Features of a Higher
Education System
Effective systems of higher education tend to have a common set
of characteristics. We suspect that many of these are prerequisites
of a system that is functioning well, and find it difficult to identify
any developing countries whose higher education systems would not
benefit from an infusion of at least some of the characteristics
(and related specific suggestions) discussed below.
Stratified Structure
Higher education systems are under great pressure to improve the
quality of the education they offer – but also to educate increasing
numbers of students. A stratified system is a hybrid that marries
the goals of excellence and mass education, allowing each to be
achieved within one system and using limited resources. A stratified
system comprises one tier that is oriented toward research and selectivity,
and another that imparts knowledge to large numbers of students.
It cements the distinction discussed above between research and
provincial universities, allowing each to pursue clear objectives
and avoid the duplication of effort. Stratified systems cater well
to the varied nature of students' abilities and interests, and also
allow for faculty with different skills to be best used. They are
economical in terms of satisfying social needs, producing graduates
able to fulfil a variety of roles and a generally educated citizenry.
Finally, as specialized knowledge becomes increasingly important
to economic performance, they enable a higher education system to
produce a mix of specialized and broadly trained graduates.
Policy-makers need to be more explicit about expecting different
contributions from different segments of a stratified system. Expressing
a clear vision of the goals and structure of a higher education
system is fundamental to setting an agenda for reform, while ensuring
that this vision is shared widely is vital to achieving practical
results.
Adequate and Stable Long-Term Funding
Higher education institutions can thrive only if their funding
levels are adequate, stable and – subject to good performance
– secure in the long term. Institutions must plan far ahead
if they are to provide consistent instruction and a secure and productive
work environment for their faculty. In many areas, insecure funding
stifles the ability and the incentive to carry out research.
Governments have a crucial role to play in providing stability.
They must finance public institutions on a long-term basis, not
as if they were part of a non-essential government sector with the
attendant vulnerability to the vagaries of fluctuations in public
spending. They must also help create an environment conducive to
the sustainable financing of private institutions and help the whole
higher education system look to the future, ensuring that tomorrow's
operating budgets will be sufficient to maintain and run the new
infrastructure higher education will need.
Competition
Traditionally there has been little competition within higher education
systems, and the Task Force believes that more intense competition
between similar institutions for faculty, students, and resources
will help improve standards by rewarding merit and performance.
It also generally promotes beneficial innovations and overall quality
improvements. Competition is exceedingly difficult to achieve through
central decree, but requires a high degree of autonomy for academic
institutions, allowing them to exploit their strengths and overcome
weaknesses. Adequate market information is also essential, otherwise
institutions will continue to thrive even when they are weak.
One common indicator of competition is faculty mobility between
institutions, which tends to promote a healthy academic environment
through intellectual cross-fertilization. Too much competition is
also possible, resulting in excessive faculty mobility and a lack
of loyalty to institutions. However, most developing countries are
a long way from experiencing this problem.
Flexibility
Higher education systems need to be flexible if they are to be
most effective. They need to be able to adapt quickly to changing
enrollment levels, to the rise and fall of different fields of study,
and to changes in the mix of skills demanded in the labor market.
Open systems are more likely to keep pace with significant external
changes. Scholarly interaction within and between countries, frequent
curriculum review, and strong connections to the world stock of
knowledge (through substantial investments in Internet access, for
example) are all important. Research is also useful. Basic demographic
data can help forward planning, enabling institutions to prepare
for changes in cohort size, secondary school enrollment, and graduation
rates.
Well-Defined Standards
Effective higher education institutions articulate clear standards
and set challenging goals for themselves that are consistent with
the needs of their societies and labor forces. International standards
are especially relevant in a globalized economy. Some standards
are needed for degree requirements when it comes to student performance,
faculty qualifications and achievement. Mediocre institutions are
not transformed into great institutions merely by announcing world-class
standards: a realistic approach is needed that concentrates on promoting
achievable improvements. A culture of accountability is also essential,
allowing improvement (or deterioration) to be continually monitored
and rewarded.
Immunity from Political Manipulation
Higher education systems are effective only when insulated from
the undue influence of political parties, governments, or short-term
political developments in educational affairs. Success in research
and education requires consistency, with academic decisions –
concerning institutional leadership, curriculum, or the funding
of research projects – made for academic reasons. Excluding
partisan political interests from the operation of a higher education
system helps to safeguard meritocratic decision-making, one hallmark
of an effective higher education system.
Well-Defined Links to Other Sectors
A higher education system does not operate in isolation. An effective
system must pay attention to a country's secondary education system
in order to take account of student preparation. It will also benefit
primary and secondary education through the training of qualified
teachers and demonstrating potential educational innovations. A
quality higher education will also increase students' aspirations
at the primary and secondary levels, leading to higher standards
as students compete for tertiary education places.Strong links between
a country’s higher education system and other systems both
in the region and beyond will have many beneficial effects, effectively
augmenting the resources available to an individual system, helping
to overcome intellectual isolation, and allowing the achievement
of “critical mass” in a larger number of specialized fields.
In addition, a higher education system benefits from close coordination
with other domestic public and private entities. For example, advocates
for higher education and industry can work together to ensure that
graduates have the skills that industry needs. Finally, advocates
for higher education need to work comfortably with government agencies
responsible for policy setting and finance.
Supportive Legal and Regulatory Structure
Higher education institutions flourish in a legal and regulatory
environment that encourages innovation and achievement, while discouraging
corruption, duplication of effort, and exploitation of poorly informed
consumers. In many systems, initiative is stifled by counterproductive
legal constraints and centralized decision-making. Higher education
is focused on people – regulation needs to foster human potential,
not hamper it.
System-wide Resources
Many tools for improving higher education are best developed centrally
and shared widely. Such tools include management information systems,
standardized tests, curriculum and “knowledge banks” (repositories
of information accessible through electronic means). They effectively
and efficiently spread the financial and technical burdens of higher
education development, allowing multiple institutions to work together.
The government, perhaps aided by international donors, might also
develop “learning commons” – a combination of computing
centers, scientific laboratories, and libraries – accessible
to students from all institutions of higher education, public and
private. A learning commons would permit more effective use of other
higher education resources and permit some institutions to teach
scientific subjects that they would not otherwise be able to offer.
These commons would need to be located in strategic places throughout
the country and be adequately maintained and staffed. They could
also serve as focal points for public information, and contribute
in this way to strengthening civil society.
Technology is an especially important system-wide resource. The
past few decades have seen an explosion of technological capacity
in both the industrial and developing worlds. No system of higher
education can hope to serve its students, or the national interest,
without developing a robust technological capacity. Higher education
systems need to encourage all constituent institutions, both public
and private, to incorporate advances in computing and communications
technology into their administrative structures, their teaching,
and their research. Integrating computers into learning is a key
task if graduates are to be prepared for the jobs of the future.
Students can also benefit tremendously from CD-ROM-based and Web-based
curricula, which have the potential to bring high-quality educational
materials to all parts of the developing world. Moreover, using
the Internet as a means for gathering knowledge connects students
and researchers to the worldwide community of scholars, an invaluable
step in overcoming intellectual isolation.
The Task Force recognizes that acquiring access to such technology
can be prohibitively expensive. International donors therefore have
a particularly important role to play in this area. It is also important
to ensure that importing technology does not create excessive reliance
on education designed abroad. There are serious issues of cultural
incompatibility and undue external influence. Developing countries
need to maintain the unique character of their higher education
systems, strengthening their intellectual self-reliance and making
an important contribution to the diversity of the global community.
Role of the State
An effective system of higher education relies on the state exercising
active oversight. The government must ensure that the system serves
the public interest, provides at least those elements of higher
education that would not be supplied if left to the market, promotes
equity, and supports those areas of basic research relevant to the
country's needs. The state must also ensure that higher education
institutions, and the system as a whole, operate on the basis of
financial transparency and fairness. However, the government must
also be economical in its interventions. It should only act when
it has a clear diagnosis of the problem, is able to suggest a solution,
and has the ability to apply this solution efficiently. Poorly thought-through
government action is likely to weaken already inadequate higher
education systems.
The exact role of governments has been subject to extensive debate,
and can range from extreme state control to total laissez faire.
Under systems of state control, governments own, finance, and operate
higher education institutions. politicians frequently appoint vice-chancellors,
and ministries dictate degree requirements and curricula. Many developing
countries have gravitated toward this model in the post-colonial
period, based on the rationale that governments are entitled to
control systems that they fund. But state control of higher education
has tended to undermine many major principles of good governance.
The direct involvement of politicians has generally politicized
higher education, widening the possibilities for corruption, nepotism,
and political opportunism.
Growing awareness of the disadvantages of state control has led
many countries to adopt alternative models. State supervision aims
at balancing the state's responsibility to protect and promote the
public's interest with an individual institution's need for academic
freedom and autonomy. So-called buffer mechanisms are important
to achieving this balance. Buffer mechanisms generally consist of
statutory bodies that include representatives of the government,
institutions of higher education, the private sector, and other
important stakeholders such as student organizations. Examples of
buffer mechanisms would be:
- councils of higher education that advise the government on
the size, shape, and funding of higher education, and are often
also responsible for quality assurance, promotion mechanisms,
and accreditation.
- research councils or agencies that fund and promote research.
- professional councils that focus on specific areas of higher
education.
- governing councils (or boards of trustees).
To be effective, these bodies require clear mandates, well-established
operating procedures, and full autonomy from both government and
academia. For example, if a particular body is to allocate research
funds based on competitive applications from research universities,
it must adhere strictly and transparently to a widely accepted set
of procedures in soliciting and reviewing applications. It must
also have full control over the resources to be allocated and have
the authority and tools to sanction parties who do not abide by
the established procedures.
Financing a Higher Education
System
No treatment of higher education is complete without a discussion
of financing, although the Task Force's treatment of this topic
is not meant to be exhaustive.
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Makerere University in Uganda
Most universities in Africa have had great difficulty extricating
themselves from an inherited model in which their role as
the repository of quality education and contributor to the
public good depends upon total state control and finance.
This condition persisted throughout the early post-independence
years of manpower planning, later experiments with developmental
objectives, and the subsequent decade of demoralization and
deterioration, when student numbers overwhelmed government
resources. In recent years, Makerere University in Uganda
has led others in addressing the pervasive problem of how
to provide good-quality higher education to large numbers
equitably, but without undue dependence on public resources.
Restructuring at Makerere has had three central and interrelated
elements: implementing alternative financing strategies; installing
new management structures, and introducing demand-driven courses.
During the 1990s, Makerere has moved from the brink of collapse
to the point where it aspires to become again one of East
Africa's pre-eminent intellectual and capacity-building resources,
as it was in the 1960s. It has more than doubled student enrollment,
instigated major improvements in the physical and academic
infrastructure, decentralized administration, and moved from
a situation where none of its students paid fees to one where
over 70 per cent do. Where previously the government covered
all running costs, now over 30 per cent of revenue is internally
generated. Among varied uses of this revenue, the most important
is application to academic infrastructure and the retention
of faculty, permitting them to devote themselves full-time
to the teaching and research they were trained to do. Funds
gained from non-government sources have been allocated, according
to prescribed ratios, to library enrichment, faculty development,
staff salary supplementation and building maintenance, including
some construction. The most important impact of increased
institutional income has been on staff salary structures and
incentive schemes. Professors can now earn over US $1 300
per month with the possibility of added supplementation on
an hourly basis from evening classes. The consequence has
been to slow the exodus of academic staff and remove their
need to undertake a range of activities outside the university.
Makerere has also introduced evening classes, boosted income
from services like the bookshop and bakery by running them
commercially and established a consultancy bureau with staff
where a portion of the money made goes back into the university.
The reasons for Makerere's tradition-breaking accomplishment
can be found in the interplay between a supportive external
environment and an innovative institutional context. Among
the most important contextual factors have been macro-economic
reform, which has led to steady economic growth and increased
amounts of disposable income, and political stability, which
has strengthened the government's willingness to respect university
autonomy. Inside the institution, much of the reform accomplishment
can be ascribed to the energy and imagination of the university's
leadership, their faith in the benefits of professional, participatory,
and decentralized management, their unambiguous sense of ownership
of the reform process, and their commitment to a tradition
of academic excellence.
The Makerere accomplishment has lessons for other universities
in Africa that face similar resource constraints. It shows
that expansion – and the maintenance of quality –
can be achieved simultaneously in a context of reduced state
funding. It puts to rest the notion that the state must be
the sole provider of higher education in Africa. It dramatizes
the point that a supportive political and economic environment
is a prerequisite for institutional reform. It also demonstrates
the variety of institutional factors involved in creating
a management structure suited to ensuring the use of resources,
not simply for broadening institutional offerings, but for
creating the academic ethos and infrastructure on which the
university's contribution to the public good depends.
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In financial terms, the global higher education sector is sizeable
and growing rapidly. We estimate that global spending on higher
education is roughly US $300 billion, or 1 per cent of global GDP,
and growing at a faster pace than the world economy. Nearly one-third
of this expenditure is in developing countries and, with developing
country systems heavily dominated by public universities that tend
to have low tuition fees, the costs fall predominantly on the state.
Any attempt to improve quality will therefore add to higher education’s
daunting financial requirements.
Financial dependence on the state means that funding levels fluctuate
with the ups and downs of government resources. This process is
exaggerated by the fact that higher education is perceived as something
of a luxury in most countries. Africa and Latin America in the 1980s
provide clear examples of this feast-or-famine syndrome, with financial
insecurity and instability preventing long-term planning. In many
Central American countries, higher education budgets are constitutionally
fixed as a percentage of government spending. Although this is intended
to depoliticize funding, the Task Force believes that it actually
weakens the incentives for good performance, as well as creating
a wide perception that higher education receives an unfair slice
of the national cake. Most students come from relatively well off
backgrounds, and other vital sectors are continually forced to compete
for their budgetary allotments.
In the long run, investment in higher education may be expected
to promote the growth of national income, providing public funds
that can, in turn, be used to finance better-quality higher education.
But this investment has a long gestation period, far exceeding the
patience of financially strapped governments. The lack of sustainable
financing therefore continues to limit enrollment growth and to
skew higher education toward low-cost, low-quality programs.
The financing of higher education does not need to be limited to
the public purse. In fact, higher education can be provided and
financed either entirely publicly, or entirely privately (including
by non-governmental organizations), or by some combination of the
two. Given that a purely public system is ill-positioned to satisfy
the demands for excellence and access, and that a purely private
system does not adequately safeguard the public interest, hybrid
systems deserve serious consideration. The range of possibilities
is depicted in Table 2.
Table 2 - Assigning Responsibility for
Higher Education
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Provision
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Financing
|
Public
|
Private
|
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Public
|
I. Free public universities and other institutions of higher
education, relying on public funds to cover operating and capital
expenditures.
|
II. Voucher systems under which the government pays a pre-set
amount to whichever private schools students attend.
|
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| |
Private
|
III. Tuition, fees, and income from foundation
grants, industry contracts, and privately generated endowment
cover full costs.
|
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There are both advantages and disadvantages of provision and financing
arrangements that fall into each of the three cells. Public financing
and provision of higher education (cell I in Table 2) is, in many
ways, the traditional paradigm for most developing countries, and
is treated extensively throughout this report.
Private provision of higher education is attractive because it
can lead to the delivery of more or better education at the same
overall public cost. It can be coupled with public financing (cell
II), as in the case of a voucher system in which the government
awards funding to students who are free to enroll in different institutions
(or gives the money directly to the institution after the student
enrolls). In principle, this system gives universities a powerful
incentive to provide quality education at a reasonable cost. However,
vouchers are not a cure-all and are ineffective when competition
is weak. In many countries reliable information about competing
institutions is not available and students are therefore unable
to make informed decisions, while in sparsely populated (especially
rural) areas there are unlikely to be enough institutions to allow
student choice (although distance learning may change this to a
certain extent).
Private financing is attractive because it reduces the burden on
government budgets, and helps ensure that the costs of higher education
are borne by those to whom the benefits accrue. Private financing
(cell III) can be achieved in the context of public provision via
tuition and fees, as well as grants and contracts from foundations
and industry. In the case of private, not-for-profit institutions
(and, in principle, public institutions as well), income from private
endowment funds can also be used to support teaching and research
activities.
Pakistan provides an example of a country whose higher education
system has traditionally been dominated by a stifling set of public
institutions and oversight bodies. Recently, however, private individuals
and corporate entities have proved willing to finance and operate
new philanthropic universities (cell III). This has proven beneficial
both for individual students and for the system as a whole. The
Aga Khan University (AKU) and the Lahore University of Management
Sciences (LUMS) have both been established (and partly operated)
through private philanthropy. In the case of the AKU, the goal of
establishing a university was to improve the quality of life of
disadvantaged Pakistanis through instruction and research in health
sciences, education, and other fields. By contrast, LUMS was created
to overcome problems of low quality in bureaucratic public universities
and to help ensure a steady supply of well trained business people.
An extraordinary level of private and international resources helped
make both AKU and LUMS successful. Of course, most initiatives cannot
count on such bountiful financial resources. In addition, entrenched
bureaucracies can thwart even the soundest of initiatives. For example,
the Bangladesh Rural Advancement Committee (BRAC), one of the developing
world's most celebrated non-governmental organizations, applied
in early 1997 to Bangladesh's Ministry of Education, under the Private
University Act passed in 1992, for permission to start an undergraduate
institution. Financing for BRAC University was projected at a much
lower level than for AKU or LUMS. Although the application was recommended
for approval by the University Grants Commission, it still awaits
action by the Ministry of Education, which is in the midst of working
with Parliament on crafting a new national education policy. Whereas
both AKU and LUMS serve as vivid proof that excellence can be achieved
by private institutions that have, among other assets, adequate
resources and good relations with the government, the long delays
and more limited funding that characterize BRAC's experience are
more typical in the developing world.
Jordan, Malaysia, and Turkey – among others – provide
additional examples of institutions founded through private philanthropy.
However, business and individual philanthropy toward higher education
is relatively uncommon in developing countries. Results could undoubtedly
be improved through tax policy, as has been shown in Chile, where
the provision of favorable tax incentives provided a powerful boost
for higher education. The case of Peru provides further confirmation:
university fundraising dropped sharply following the reduction of
relevant tax incentives in the mid-1990s.
There is another important downside to private financing –
it may preclude the enrollment of deserving students who do not
have the ability to pay, and often evokes resentment among students
who do. Means-tested scholarship and loan programs are one possible
approach to addressing this problem, but they have proven very difficult
to administer due to the difficulty of assessing ability to pay,
sometimes exorbitant administrative costs, corruption, and high
rates of default. The need for scholarships often provides a compelling
justification for creating endowment funds, especially in philanthropic
institutions, but also in public institutions.
The Task Force believes that a higher education system confined
to one of the three cells shown in Table 2 is unlikely to yield
desirable outcomes. The goals of a higher education system, which
span quality, access, and efficiency, are surely best achieved by
a diverse set of arrangements for institutional finance and service
delivery. Countries need diverse systems, where some institutions
look for funding from a single source while others seek a combination
of public and private financing.
Multilateral and bilateral donors also have a role to play in the
financing of higher education, in order to encourage the national
and international public interest, as well as the contribution that
higher education can make to social equity. Long-term and concessionary
loans for investment in higher education can help governments invest
in higher education in a more sustained and consistent fashion,
while debt relief can be negotiated in exchange for systemic higher
education reform. However, the international community needs to
be careful about imposing reforms from outside, and also to consider
carefully the extent to which it can single out higher education
for special treatment.
An often-neglected policy is to allow individual institutions the
autonomy to develop new ways of raising revenue. Offering executive
training programs, marketing the expertise of faculty, and providing
various other services such as carrying out laboratory tests and
renting facilities, can all provide valuable income. It is necessary
to make it legally permissible to receive such funds and to use
them in a discretionary manner, and to also impose limits on the
extent to which proprietary research can be conducted. Centralized
programs for teacher training and experiments with distance learning
can also help to contain costs and improve educational quality throughout
the system.
Conclusions
The new realities facing higher education (see Chapter 1) mean
that many traditional ways of running higher education systems are
becoming less relevant. A laissez faire approach, which assumes
that all the components of a higher education system will simply
fit together and serve everyone's needs, is untenable. System-wide
coordination is clearly needed. But neither is centralized control
the answer. Diversity is greatly needed, as are autonomy and competition
between similar institutions. Funding models will also have to adapt,
moving towards a flexible system that draws on the public and private
purse.
The balance between the public and private sector is currently
changing. Public higher education systems cannot meet sharp increases
in demand and, as a result, the private components of higher education
systems (especially for-profit institutions) have grown relatively
quickly. But the growth of the private sector has tended to be quite
haphazard. As a result, in most developing countries no clearly
identified set of individuals or institutions is working to ensure
that all the goals of the country's higher education sector will
be fulfilled.
A coherent and rational approach toward management of the entire
higher education sector is therefore needed. More traditional, informal
arrangements are no longer adequate. Policy-makers must decide on
the extent to which they will guide the development of their country's
higher education sector, and the extent to which they think market
forces will lead to the establishment and operation of a viable
system. Overall, the Task Force believes that government guidance
is an essential part of any solution.
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