Chapter 2. Literature Review
2.2. Privatization and Marketization of Higher Education
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to whom, (3) organizational matters that involve macro-level supervision, control, and accountability issues, and (4) quantitative-structural issues, which refer to the size and shape of the overall higher education system.12
Tertiary-level vocational schools, research institutions, community colleges, junior colleges, liberal arts schools, and polytechnic institutions today may all fall within or outside higher education systems, depending on a variety of system boundaries that vary from country to country. Guri-Rosenblit et al speak of higher education systems defined by internal and external boundaries that give these systems horizontal and vertical structure, determining the types of institutions that a government considers as part of the system. External boundaries place limits from the outside on the system, such as laws that define the types of institutions included in the system, while internal boundaries reflect differences between institutions in dimensions such as types of programs or level of degrees offered.13 This diversification in higher education systems worldwide has been made possible by deep-cutting changes in the state’s role in providing and funding tertiary education; the privatization of higher educational services and operations are explored in the following section.
2.2. Privatization and Marketization of Higher Education
The marketization and privatization of higher education are both linked to the ongoing privatization of welfare in many countries. As the role of governments in higher education diminish in direct oversight, higher education institutions have increasingly turned to market-oriented strategies and tactics to support their own operations and meet increased demand for educational services. This section explores the relevant literature on the privatization and marketization of higher education globally.
2.2.1. Privatization of Higher Education
As government support and oversight of higher education services decreases over time, a private sector of tertiary-level educational institutions has developed in several countries. Privately funded for-profit and non-profit colleges and universities have emerged over the last several decades to meet increased demand for higher education. As demand for higher education has increased over the past several decades, a growing
12 Ulrich Teichler, “Diversification? Trends and Explanations of the Shape and Size of Higher Education,”
Higher Education, vol. 56, 2008, pp. 349-379.
13 Sarah Guri-Rosenblit, Helena Šebková, and Ulrich Teichler, op. cit., pp. 375-376.
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private sector of tertiary education institutions has developed to fill in gaps where governments have reduced their fiscal and regulatory responsibility over social welfare systems, including education systems. Governments with limited resources to support a growing demand for higher education thereby gave rise to the growth of private
educational institutions, which largely set their own curricula, manage their own finances, and require students to pay for at least part of their education. Especially in the context of the United States’ higher education system, neoliberal economic logic applies free market principles to social and public goods, including research and teaching, turning them into businesses-like entities.14
Jandhyala Tilak in 1991 categorizes higher education privatization into two larger trends.15 The first being excess demand for higher education by populations that the private market of higher education institutions can meet. The second trend is demand for different qualities of higher education, which private actors can meet to differentiate themselves from public institutions. Of important note is that while some countries exhibit a mix of public- and privately funded institutions, the mix is not always clearly differentiated. Tilak analyses privatization on a scale: on one end is “an extreme version of privatization” in which colleges and universities operate and fund themselves
completely privately. Further down the scale are strong and moderate privatization that uses a mix of public and private resources. Lastly, pseudo-privatization in which institutions originally created by non-governmental bodies are financially supported nearly completely by the government.16 The variety of ways that higher education institutions may be supported further illustrates contemporary trends in the organization and structure of global higher education.
2.2.2. Marketization of Higher Education
Higher education over the past several decades has expanded at a faster rate than the expansion of resources to support them, leading to privatization as well as
marketization in an expanding higher education “sector” of the economy. Kwong defines marketization in education as “the adoption of free market practices in running
14 Richard Münch, Academic Capitalism: Universities in the Global Struggle for Excellence, New York:
Routledge, 2014, p. 128.
15 Jandhyala B. G. Tilak, “The Privatization of Higher Education,” Prospects, vol. 21, no. 2, 1991, pp. 227-239.
16 Jandhyala B. G. Tilak, op. cit., pp. 227-228, 239.
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schools.”17 These practices include “business practices of cutting production cost, abandoning goods not in demand, producing only popular products, and advertising products to increase sales and the profit margin.”18 These practices have had a significant effect on the role and purpose of higher education in today’s societies. Marketization has also fueled growing perceptions of students (and their families) as the “consumers” of higher education services for whom higher education institutions compete.
Schuetze and Mendiola’s 2012 book State and Market in Higher Education Reforms outlines the general trends of marketization and the transformation of state governments from the sole provider of education into a regulatory body shaping the rules of competition.19 This process has thus turned students and families into “consumers” of educational services and universities into revenue-seeking organizations to support their own operations, such as recruiting fee-paying students, competing for government grants, and attracting corporate sponsors for research.20 This has resulted in a global system in which education is viewed as a private commodity that can be bought, sold, and
marketed, even across borders.21 In this system, the purpose of the university and higher education in general has changed from its old role of shaping the minds and character of the elite classes to a new one as a business-like entity selling its products (knowledge) to consumers (students). In the case of highly prestigious universities, their prestige in the form of social capital can be converted into economic capital when they establish branch campuses in foreign countries.22
Debates abound on whether this change has been beneficial for societies and parallel larger debates on the purpose and benefit of neoliberal economic practices of global free trade and privatization of public goods. Les Levidow in 2002 criticized projects such as the World Bank Higher Education Reform Agenda as neoliberal strategies that “imposes greater exploitation upon human and natural resources” via
17 Julia Kwong, “Introduction: Marketization and Privatization in Education,” International Journal of Educational Development, vol. 20, 2000, p. 89.
18 Ibid.
19 German Alvarez Mendiola, “State and Market in Higher Education Reforms: Overview of the Issues,” in Hans G. Schuetze and German Alvarex Mandiola, eds., State and Market in Higher Education Reforms, (Rotterdam, Netherlands: Sense Publishers, 2012), p. 8.
20 See German Alvarez Mendiola, op. cit., p. 8, and Inger Askehave, “The Impact of Marketization on Higher Education Genres – The International Student Prospectus as a Case in Point,” Discourse Studies, vol. 9, no. 6, 2007, p. 724.
21 Hans G. Schuetze and German Alvarex Mandiola, “Introduction,” in Hans G. Schuetze and German Alvarex Mandiola, eds., State and Market in Higher Education Reforms, (Rotterdam, Netherlands: Sense Publishers, 2012), pp. 1-2.
22 Richard Münch, op. cit., p. 129.
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global market competition.23 Writing in 2003, Giroux argued that neoliberal capitalism and “corporate culture” in the American context of higher education is dangerous to the democratic and social function of the university through.24 Giroux also expressed concerns that private, corporate interests drive university research agendas, unfairly influencing and degrading the moral and civic purpose of the university.25
While diversification and expansion in the types of institutions in higher education systems provides populations with a greater variety of options, many higher education systems are now unequally stratified in terms of prestige, influence, and resources. In the United States, for instance, Richard Münch writes that competition between universities for students, especially at the undergraduate level, has intensified, not only raising tuition costs for students but also exacerbating socioeconomic inequalities. As universities become more selective in their admissions criteria, students from lower socio-economic backgrounds who have fewer opportunities for academic achievement in turn become less likely to gain entrance into top universities. Deregulation in England follows similar trends: universities now compete for not only the best students, but also for the best professors, researchers, and funding opportunities in a “quasi-market.”26
Whether beneficial or not, marketization and privatization have already affected higher education systems around the world, including China and Taiwan. Market
mechanisms have replaced strict government oversight in Taiwan, and efforts to balance private and public initiatives to improve Mainland Chinese higher education are
underway. Chapter 4 more deeply explores the growth and marketization of China and Taiwan’s higher education systems.