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Higher Education in Brazil: Challenges and Options December 17, 2001 Human Development Department The Government of Brazil is analyzing options for improving and restructuring higher education over the next two to three decades. At the request of the Minister for Education, Mr. Paulo Renato, the Bank undertook an assessment of the state of higher education and made recommendations on how its purpose, structure, scope, funding and governance could evolve to better meet the needs of the country. The assessment consisted of four phases. In phase one, analytical work between Minister Paulo Renato, members of the National Education Council, rectors, federal higher education officials, and World Bank staff led to the identification of the major issues facing Brazilian higher education. The following issues were identified: i) increasing coverage, ii) enhancing managerial autonomy and providing incentives for efficiency at the institutional level; iii) the changing role of the Federal Government; iv) improving quality of instruction, and v) identifying and garnering support from stakeholders. In phase two, several expert policy analysts were commissioned to produce a series of background papers which served as the basis for discussion at a policy workshop held in December 1998 in Lansdowne, Virginia. Six of the background papers, in their entirety, comprise the contents of Part II(1) of this study. A three-day Policy Workshop, from December 10-12, 1998 in Lansdowne, Virginia, was the third phase of the assessment. The workshop brought together a delegation, led by the Minister of Education, of selected high-level Brazilian policy makers, a panel of international policy experts, and Bank staff. The main objective of participants was to launch a dialogue for fundamental and long-term change, based on a balanced and realistic assessment of where Brazilian higher education should be heading. Phase four was the production of Part I of an earlier version of
this study, "Higher Education in Brazil: Challenges and Options",
which discusses the ways in which Brazil might address the main
issues identified and prepare the higher education sector for the
21st century. The first section of Part I describes the system.
The second section provides an economic perspective by examining
the issues of external efficiency, internal efficiency, and equity
with reference to possible developments in student aid and other
measures to promote wider access to higher education. The third
and final section contains policy recommendations. It should be
noted that these are recommendations and not confirmed government
policies. The Task Team consisted of Lauritz Holm-Nielsen, Task Team Leader; Michael Crawford, Co-Task Team Leader; Birgit Zischke, Consultant; and Samia Benbouzid, Team Assistant. The World Bank would like to acknowledge the contributions made to this sector report by the participants who attended the December 10-12, 1998 policy workshop in Lansdowne, Virginia. As a result of the lively interchange of ideas, this report and the subsequent dialogue on reform of the sector were invaluably strengthened. Special thanks are due to the President of the World Bank Mr. James D. Wolfensohn for his participation - via video-link - and to the on site participants: Brazilian Delegation - Paulo Renato de Souza, Minister of Education; Vilmar Faria, Special Advisor for Social Affairs, Office of the President of the Republic of Brazil; Abílio Baeta Neves, Secretary of Higher Education; Maria Helena Guimarães de Castro, President, National Institute of Educational Policy; Heloisa Vilhena de Araújo, Chief International Advisor, Ministry of Education; Luiz Curi, Director of the Department of Higher Education Policy; Gilda Gouvea, Special Advisor, Ministry of Education; Éfrem Maranhão, President of the National Council on Education; José Ivonildo do Rego, President of the National Association of Directors of Federal Universities; Roberto Lobo, Rector of the University of Mogi das Cruzes; Francisco Sá Barreto, Rector of the Federal University of Minas Gerais; and Roberto Bezerra, Rector of the Federal University of Ceará; Consultants to the World Bank - Eunice Durham, University of São Paulo; Elaine El-Khawas, University of California, Los Angeles; Arthur Hauptman, Council of Aid to Education; Bruce Johnstone, State University of New York at Buffalo; David Plank, Michigan State University; Simon Schwartzman, Brazilian Institute of Geography and Statistics; Claude Thelot, Court of Accounts, France; Quentin Thompson, Price Waterhouse Coopers; Alan Wagner, Organization for Economic Cooperation and Development (OECD); World Bank Staff - Donald Winkler, Lead Specialist for Human Development, LCSHD; Patricio Millan, Country Sector Leader, LCC5F; William Experton, Education Economist, LCSHD; Robin Horn, Education Economist, LCSHD; Chris Parel, Country Officer, LCC5A; William Saint, AFTH3; Jamil Salmi, Lead Specialist for Education, LCSHD; Madalena dos Santos, General Educator,LCSHD; Observers - Carlos Marquis, Director, Fund for Quality Improvement in Education (FOMEC), Argentina; Maureen McLaughlin, Deputy Assistant Secretary for Policy, US Dept. of Education; Laurence Wolff, Consultant, Inter-American Development Bank; Assistants to the Task Team - Jonathan Tin; Adriana M.G.M. Weisman; Marie Groennegaard Christensen. Peer Reviewers - José Joaquim Brunner, Commission for Quality in Higher Education, Chile; Claudio de Moura Castro, Inter-American Development Bank; Peter Moock, The World Bank, EASHD; David Plank, Graduate School of Education, Michigan State University; William Saint, The World Bank, AFTH3. Abbreviations and Acronyms ABMES Associação Brasileira de Mantenedoras do Ensino
Superior Currency Equivalents Fiscal
Year Academic
Year (AY) Weights
and Measures Executive Summary Brazil has put significant resources into developing its higher education system over the past three decades. As a result, a system has evolved in which some institutions have achieved recognizable excellence in teaching and research, while, more generally, the majority of institutions have struggled to provide relevant, quality education at reasonable cost. Looked at in isolation, certain parts of the system are sound and productive. Taken as a whole, the system still has a number of large challenges to overcome. About 15% of the age cohort is enrolled in higher education. This is quite low compared to other countries in the region (Argentina 36%; Chile 32%; Uruguay 30%; Venezuela, R.B. 29% [World Development Indicators 2001]) and to the OECD country average of 52% (OECD, 2001). Simply doubling the number of spaces offered, however, will not double the rate of coverage, because a demographic bulge of young Brazilians is reaching university age. Over the past 15 years, growth in private provision of higher education was roughly equal to the moderate growth of the university-age cohort, but now large absolute increases in enrollments would be needed simply to maintain the current rate of coverage. In addition, graduation rates from secondary schools are rising sharply and more older, working Brazilians are seeking tertiary degrees. In short, a larger percentage of a growing number of Brazilians are demanding higher education, and the system cannot keep pace with this demand under existing conditions. Cost per student in public institutions, roughly R$14,000 per year in the federal system(2), is on par with OECD country averages while quality is not. Rigidities in funding and regulation create strong disincentives for cost-efficiency or quality. Public universities have been funded on the basis of input. Federal policy toward higher education, until recently, did not attempt to control costs or correlate funding to productivity. Other legislation and regulations, outside the control or influence of MEC, created built-in cost increases that did not improve the access, quality, or relevance of the education. University rectors have traditionally concerned themselves more with obtaining resources from the federal government than with managing the resources effectively within their institutions. With a few notable exceptions, the quality of instruction and the relevance of the curriculum are below desirable standards. Historically, the Brazilian system - like those of continental Europe - is oriented to provide professional training rather than general or interdisciplinary education. Holders of a first university degree (graduação) are licensed to practice their profession by virtue of their diplomas. Such systems have been successful, productive, and of high quality under a variety of conditions. However, in Brazil, thanks largely to restrictive labor market regulation, the influence of professional associations in setting the curricula and the numbers of courses/places have served to limit the supply of professional labor, rather than to satisfy the demands of the labor market. Furthermore, in the Brazilian public system, a lack of coherence in research, teaching, and career advancement policies in public institutions has often led to a concentration of professors doing specialized research at the expense of undergraduate teaching. By contrast, many private institutions are driven by profit, and therefore do not undertake any research or pay salaries necessary to attract and retain high-quality professors. The public system, which includes many, but not all of the country's finest institutions, provides higher quality education than the private sector, charges no tuition, and limits the number of places. Competition for admittance is fierce, and wealthy students do best because they can afford elite private high schools and special preparation courses for the entrance exams. Estimates on enrollment by income quintile show that two thirds of students are from the highest income quintile, while only about 5% are from the two lowest. It is a generally recognized problem that students from lower and lower middle class backgrounds have greater difficulty gaining entrance to the free, public system. If these individuals study at all, they are more likely to be in the private system, where they must pay tuition. Some financial assistance is available from the government and the institutions themselves, but it does not sufficiently address the needs of the students in the system, and much less the potential students who are excluded due to inability to pay. In 1996, seventy-eight percent of higher education institutions (which represented 74% of total enrollment) were in the South and Southeast regions of the country. The highest quality institutions are also mainly concentrated in these regions. In cities like São Paulo, there are currently more offered places than enrolled students. In most of the rest of the country, the situation is the opposite. The Government of Brazil has a three-pronged strategy for improving higher education: (i) to change the legal framework for the sector; (ii) to change to a performance-based funding system that supports MEC's policy goals of improved access, quality, and efficiency; and (iii) to improve capacity for evaluating quality of instruction and performance of institutions. To date, substantial progress has been made in points (i) and (iii), and planning for (ii) is underway. (i) The Legal Framework. Prior to 1994, higher education institutions were not allowed to define curricula or personnel policies. They could not hire or fire academic, technical, or administrative staff, set salaries, open new courses of study, decide the number of places they would offer, or transfer budget resources among expenditure categories. The Government's National Education Law (Law 9.394/1996) created a new category of institutions, the "university centers", which enjoy most of the same legal privileges as universities, have greater autonomy over curricula and enrollments, and have a mandate to concentrate on undergraduate teaching instead of research. The law also allows universities to define their own personnel policies, to hire and fire staff directly, and to manage budgets according to the needs of the institution, rather than centralized bureaucratic mandates. The law also creates the framework for a national evaluation system, through which the federal government can monitor and guarantee the quality of higher education. Other legislative changes have allowed for the creation of new, shorter courses which are similar in some respects to the community college degree programs of the US, and two-year professional Master's degrees for areas of high demand, like business administration and economics. The new legislation also permits much greater autonomy for institutions to determine the type and amounts of education they offer. The previous, restrictive "minimum curriculum" for each course or career is no longer legally mandated. Institutions are now only required to follow broad curriculum guidelines(3). Implementation of the changes that these laws make possible has been slowed because of existing contravening legislation, and by resistance to autonomy and inertia within universities themselves. Presently, all university employees are civil servants, contracted under the Unified Legal Regime (Regime Juridico Unico: RJU). The RJU employees are virtually impossible to fire - regardless of job performance - and their salaries are collectively negotiated. However, reform of the Brazilian public service will greatly narrow the jobs that can be defined as RJU, so that only positions like ambassadorships, or similar career public service positions, will qualify. New employees of public higher education institutions will no longer qualify for RJU status. Rather, they will be contracted by the institutions themselves under terms that the institutions determine. It should be noted that the two employment regimes will co-exist for a period, until all RJU employees leave through attrition or retirement, or voluntarily transfer to the new system. (ii) Changes to the Funding System for Higher Education. The Government, in granting institutions greater autonomy, requires that institutions be accountable to their stakeholders. To ensure autonomy with accountability the Government of Brazil is making two fundamental changes to the way it funds higher education. For the federal institutions, it would provide block grants, on the basis of performance contracts. The allocation for each institution would be derived using a simple, transparent formula. The formula would reward the "behavioral changes" and improved productivity that would lead to MEC's policy goals of greater access, quality, and efficiency. For the private system, it would provide loans targeted to students who could not otherwise afford to pay tuition. Students will be able to use their loans only at private institutions, which have demonstrated that they produce students proficient in their subject areas as shown by data collected from recent Provão outcomes. (iii) Improved Evaluation of Performance. An integral part of MEC's strategy is to transform its role from that of a funder of inputs to that of a guarantor of a minimal standard of quality for output. A main instrument for this is its evaluation and accreditation system. Brazil has a long and successful experience with evaluation and accreditation of graduate courses by CAPES. In this system, courses are graded by several criteria, and those that do not meet minimum quality standards after a probationary period are denied public funding and lose their accreditation. The CAPES system has been recently revised to increase the relevance and quality criteria. MECs undergraduate accreditation system has grown out of the CAPES experience and will further ensure that with autonomy comes accountability. Currently, MEC has four mechanisms for the evaluation of undergraduate education, which together provide increased information to potential students about the quality of the education offered: - Re-accreditation. Under the national education law, courses are now required to undergo periodic re-accreditation (every three years). SESU provides input to the National Council for Education Committee for Higher Education, which recommends renewal, suspension or accreditation for each course. MEC may impose conditional re-accreditation where warranted. - The Provão. The National Exam of Courses or Provão tests the achievement of all graduating students in the 13 most widely followed career courses (administration, law, engineering, medicine, etc.). Students are only required to take the exam, they are not judged on their individual performance. The average score of student's from each institution, however, is published as a proxy indicator of the quality of instruction in that course. The Provão has been given annually since 1996, and each year it has added new courses. It has already had an impact in two ways. First, it has help to create a culture of performance evaluation within universities. Student and faculty initially resisted this type of measurement, but that resistance has decreased with time. Second, it has changed public perceptions about the quality of institutions. Some well-funded public universities have seen their prestige diminish because of low scores. Private universities that score well are seeing their applications increase, while low scoring schools are finding it more difficult to attract students. - Institutional Evaluation. In 1997, MEC/SESU began its Program of Institutional Evaluation of Brazilian Universities (PAIUB). Under the program, committees of peers are selected by SESU to make site visits to higher education institutions to evaluate the qualifications of the staff, the organization of instruction and the curricula, and the adequacy of the support infrastructure (libraries, laboratories, etc.) for the courses offered. Courses are given a "grade" for each category, and the results are published. In its first year of operation, 810 courses were evaluated. - The Higher Education Census. The National Institute for Education Research (INEP) has been conducting a nation-wide survey of higher education institutions for the past several decades. The survey collects data on several aspects of the higher education system. As part of its strategy, MEC has been building political support for this reform among key stakeholders. It continues to hold frequent consultations with legislators, university administration officials, representatives of faculty and students, and other agencies and levels of government with responsibilities related to higher education. The World Bank has been an active partner in this strategy since June 1998. Innovative ESW for the sector was undertaken during the first half of FY99. The culmination of these activities was a policy workshop (December 10-12, 1998 in Lansdowne, Va.,) at which Minister Paulo Renato and a delegation of Brazilian higher education policy makers worked for three days with a team of top international experts and Bank staff to define a vision for Brazilian higher education into the 21st century. The event was in response to a request made in the second quarter of 1998 for technical assistance. In the months prior to the workshop, background assessments were conducted by the Bank team and a series of policy papers were commissioned from relevant experts. This work brought into focus the main issues that Brazil must address to achieve the progress it seeks in the sector. These issues formed the basis for discussion and became the core of the consensus on directions for policy that Minister Renato articulated at the conclusion of the workshop. Clearly, many important changes are underway within the system. The challenge is to focus attention on those that will promote the greatest progress in equitable access, quality, relevance, and efficiency. With this in mind, it is recommended that MEC take the following steps. First, with respect to access: (a) the trend towards diversification through new instruments, such as sequential courses, and new institutional definitions (such as university centers) should continue; (b) the amount of targeted financial assistance for poor students should be increased; and (c) five and ten year enrollment increase targets should be identified, and progress toward improved coverage should be monitored closely. Additionally, the Government of Brazil has several policy options for increasing access to tertiary education that it may consider in the future. These include: i) increasing government and private funding of public institutions; in light of the current economic situation in Brazil, and the government's relatively high spending for higher education, it is unlikely that a large infusion of public funds for higher education is forthcoming. However, the addition of private resources could lead to an increased supply of places to the extent that the additional resources are used to educate and train students rather than to pay for administrative costs or research; ii) reducing costs per student at public institutions could be achieved in any number of ways and is best dealt with at the institutional level; and iii) charging tuition at public universities. This option is being used increasingly around the world as a means to maintain or increase institutional budgets. When combined with well thought out student aid schemes, this could have a positive impact on equity access. Further discussion of possible strategies to expand access in Brazilian tertiary education can be found in Part II, Annex Six. With respect to quality, it will be important to ensure that the Provão, which has achieved major success in a short time, remains a flexible tool. The Provão should change with the changing needs of curriculum development, and ways of measuring the new competencies that are being included in the new curricula should be constructed. Also, institutions should more actively promote internal quality assurance mechanisms, in recognition that ultimately, responsibility for quality lies within, and cannot be mandated from outside. Relevance will improve with the new, more flexible course guidelines that have been developed, but should be further enhanced by new administrative mechanisms (e.g., transfer of credits, broader recognition of work outside the defined discipline). A dialogue on institutional relevance should be underway, in which the role of regional and local connections is considered, as is the institutional vocation regarding questions such as teaching versus research. Last, efficiency should be augmented, mostly through autonomy of administrative decision-making under proper incentives. Reform of the existing civil service legislation is, without a doubt, a key aspect of this issue. But other critical components will include providing more fungible funding (by means of block grants), providing a greater flexibility for institution to generate resources, and strengthening longer-term strategic management within the institutions. 1 Portuguese versions are available through the World Bank regional office in Brasilia. The papers may also be accessed, both in English and Portuguese, on the Worldwide Web at www.worldbank.org. 2 Brazilian higher education is largely a non-tradable service, the cost of which is not significantly affected by the price of higher education in other countries. Therefore, stating the costs in terms of other, more stable currencies can be misleading because of fluctuations in Brazil's exchange rate. When the Real was "overvalued", the costs appeared exorbitant. After the recent devaluation, a comparison in dollar terms would falsely show a 40% cost decrease from 1998 to 1999. Costs are best measured by comparison to domestic prices (such as percentage of average starting salary of a graduate, or the cost of a car, a home, or some other basket of goods). Such a comparison shows that the cost of public higher education is at least as great as in OECD countries. 3 The new guidelines have been developed through a consultative process with the academic community. They place a much greater emphasis on defining the knowledge and competencies that a graduate should possess, and much less on prescribing a mandatory, detailed curriculum for each discipline. |
