Simon Marginson: Rethinking the public-private divide in higher education

Simon Marginson: Rethinking the public-private divide in higher education
The Journal for the Public University, Volume 2: 2005

Abstract

The public/private divide is traditionally understood in terms of state ownership. However we cannot read the social character and policy/ political meanings of higher education simply in terms of its juridical character. The statist definition has been rendered obsolete by changes in modes of government, which freely crosses the boundary between public/private ownership. For example governments use private sector agencies to achieve policy objectives similar to those pursued by public sector agencies, for example in health and education; some public sector institutions are configured as market actors with quasi-corporate independence, for example in higher education. Further, given that there is no global state, to adopt a statist definition of public/private is to negate the possibility of global public goods and admit only private goods at the global level. This would suggests that international higher education should be understood solely as a trading environment, as the WTO/GATS process implies, occluding significant cross-border externalities, i.e. the positive/ negative effects of education in one nation on another; and also collective global goods, such as systems for recognition and accreditation facilitating global mobility. The paper proposes a definition of public/private based on the social character of the ‘goods’ produced, adapting Samuelson (1954); and applies this to the analysis of public and private goods in national and global higher education. This approach enables a better strategic purchase on higher education especially at the global level.

Professor Simon Marginson
Director, Monash Centre for Research in International Education
Faculty of Education
Monash University
Vic, 3800, Australia
Phone: 613-99052834
Fax: 613-99059197
simon.marginson@education.monash.edu.au
publications: http://www.education.monash.edu.au/centres/mcrie/publications/

Introduction

Public and private are longstanding concepts from liberal political philosophy, and make a famous and powerful distinction. But higher education is changing: cross-border flows and systems have become much more important, and methods of national government are undergoing a major transformation amid a combination of neo-liberalism and the knowledge economy. These changes have rendered practices traditionally associated with ‘public’ and ‘private’ as unstable, ambiguous and unclear. We have often been loose in the way we use the concepts of public/private; and amid the changes that looseness is now working against us.

In the national dimension, where in most parts of the world higher education is first of all understood as ‘public’ – a principal exception is the USA where national higher education is now imagined first of all as a ‘market’ [1] - the ‘private’ aspect of higher education has grown: competitive markets are expanding, in many nations private sectors are on the rise, and public institutions are behaving like quasi-corporations. In the meta-regional and global dimensions, new private and public aspects of higher education are impacting national systems and local higher education institutions. The nation state was once the sole medium for expression of the politics of the public interest, but we know that many questions of common or public interest cross national borders. We need a common policy space in which to consider the global public good, in higher education and other sectors, or we remain hostage to a Hobbesian war between autarkic national public interests: the consequences of that kind of world are being played out now in Iraq.

These changes do not mean that our inherited values of public/private are altogether obsolete, but I will argue in this paper that our traditional approach to public/private does need to be revisited, reclarified and fundamentally reworked. The key move we need to make is to factor the global dimension of higher education into our thinking, not just global competition and markets but global public goods.

Content of the paper

I begin with the method of the paper, examine traditional meanings of ‘public’ and ‘private’, and note the limitations of both a statist approach and the traditional neo-classical economic approach. I then develop a working definition of public/private and apply it in three ways: to higher education in general, to national higher education systems, and to global relations. I summarise my reasoning in four propositions for the revision of public/private in higher education.

Method

Much depends on how public/ private in higher education are analysed. This section of the paper outlines its starting points, which shape the rest of the argument:

First, the purpose of this inquiry is primarily explanatory, rather than normative. The test of concepts such as public/private is how useful they are in illuminating realities, not whether they confirm a theory or a pre-given ideological narrative.

Second, in public debate, and sometimes in scholarly literature the public/private distinction is confused with two other distinctions: the state/non-state distinction, and the state/ market distinction. The core distinction in liberal theory is the dualism of state and market. [2] The others duals, including public/private, are mapped onto this core market/state distinction. But using state/market as the core concept creates serious analytical and empirical problems, as I will discuss. In this paper I argue that in higher education, what is important is not legal ownership, but the social and cultural character of the outcome or ’goods’ produced by institutions: the effects in teaching/ learning, research, certification of graduates, producing saleable goods, serving the interests of communities, nations, the world.

Third, it is unhelpful to treat public and private as if they are fixed or natural attributes, or as universal or essential attributes. The work of higher education can be public and/or private; and manifest either as individual or collective benefits. Whether higher education is public or private is policy sensitive, nested in culture [3] and historically variable. It is not helpful to understand whole systems, or institutions, as universally ‘public’ or ‘private’. It blinds us to the complex mixing of public and private qualities that actually takes place.

Fourth, public and private do not constitute a single, homogenous logical set. In the dualistic framework it becomes a conceptual ‘given’ that the more higher education is private the less it is public, and vice versa. This is the method of neo-classical economics, for example. But in the real world, the public and private elements are not necessarily zero sum. Sometimes they are, sometimes not. Nor can we aggregate public benefit simply by summing all the private benefits. Public benefits are in part collective. These are about association itself and not reducible to individuals separated from each other. It is more useful to understand public and private as heterogenous. In fact public and private goods can be inter-dependent, in that the production of one kind of good provides conditions necessary to the other.

Fifth, and most importantly, we are poorly served by a notion of public/private that means one thing in the national dimension, another at the global dimension. What is needed is a public/private conception that works consistently across all dimensions: the local, national, meta-national regional (e.g. the European Union), and the global.

Traditional conceptions of public/private

Let us turn then to the traditional meanings of public/private. While much has been written on the public/private distinction, and related questions of the ‘public good’ and ‘public goods’, a review of that literature is not attempted here. [4] Rather, the paper begins with commentary on two conceptions of public/private that are dominant in political discourse at this time. These are drawn on one hand from statist political philosophy, on the other hand from liberal economics.

The conception in statist political philosophy

The first main tradition of public/private is the statist notion that associates the term ‘public’ with government or state ownership. Private takes a multitude of non state-owned meanings, from market-oriented business, to NGO, to civil society, to home and family, to the personal inner realm of subjectivity, and so on. However as noted, the equation of public/private with state/non-state (or state/market) creates serious difficulties. For example, governments and state agencies set up markets, manage markets, aid markets, own and conduct business activity, generate profits and produce some outcomes controlled by private individuals or firms that benefit only a few. Public sector universities behave like business corporations. On the other side of the coin, ‘private’ philanthropists produce collective goods accessible to all; and governments use aid to, or regulation of private sector institution, in health and education to achieve policy objectives. This does not signify the degeneration of government from a normal ‘public’ condition. It is how government works across the whole of the world, and not only in high capitalist society. I am not arguing that the ownership boundary between public and private sectors does not matter. For example publicly owned institutions are more directly accessible to democratic politics. The point is that public or private ownership alone is not sufficient to explain the social character of what is produced.

The conception in economics

The economic definition of ‘public’ goods, outlined by Samuelson, [5] refers to goods (or services) [6] that are non-rivalrous and non-excludable. These goods are non-rivalrous, because they can be consumed by any number of people without being depleted, for example knowledge of a mathematical theorem. They are non-excludable, because the benefits cannot be confined to individual buyers, such as social tolerance, or law and order. Few goods have both qualities in full, many have one or the other in part. ‘Private’ goods are goods both rivalrous and excludable. Samuelson noted that public or part-public goods tend to be under-provided in economic markets: e.g. it is unprofitable for individuals to pay for non-excludable goods such as civil peace that could be acquired free via someone else’s purchase. Hence there is a case for state financing and/or provision of such public goods. Another concept from economics is ‘externalities’ or ‘spill-over’ effects. In education, externalities are individual benefits not fully captured by the educated individual themselves. For example, the training of a manager may render more profitable and productive the work of others. Likewise, when a consumer becomes literate she or he becomes more receptive to marketing of a range of products by companies that did not pay for the education. These concepts of rivalry, excludability and externalities are helpful in understanding the different dynamics of marketable commodities in education, on one hand, and the ‘commons’ on the other.

However economics has not been very good at analysing, measuring and placing a value on collective goods, such as the codification of knowledge or language; the formation of common literacy or the long term effects of basic research. One reason is that Samuelson did something else that was less helpful, he tried to naturalise the boundary between public and private, and to give priority to private goods. For Samuelson a good is intrinsically either public or private. It is determined by the nature of the product. Products are naturally non-rivalrous and/or non-excludable, or they are naturally private goods. Samuelson assumes that the market is the norm; that the market is both non-state and private (the orthodox liberal duality); and for reasons of allocative efficiency, private goods should be produced in markets. In this argument higher education is categorised as either ‘naturally’ public or ‘naturally’ private. But it is more helpful to understand higher education as variable. Some aspects are more readily excludable and rivalrous, production can be configured as both public and private. For example basic research published in the public domain is not excludable for very long; while secretive commercial research is more readily subject to both rivalry and excludability. The point is that the public or private character of education is not natural, but a social and policy choice.

Problems in traditional conceptions of public/private

In sum, in the traditional approaches to public/private, two notions are dominant. Both are dualistic, in that they treat public and /private as mutually exclusive. One is the statist notion of public/private, associating ‘public’ with government or state. The other is the economic notion of public/private, associating ‘public’ with not-a-natural market. These two views reflect the respective political claims of social democracy, centred on state institutions (the public side of the dual); and economic liberalism, centred on the market (the private side of the dual). Both notions are flawed.

Public/private as defined by neo-classical economics is ahistorical, in that it treats public and private as natural and universal qualities. It is biased in favour of high individualism and market forms of social organisation. The neo-liberal policy maker concludes that higher education is mostly a natural private good and should be marketised, and downplays or obscure the potential for externalities and collective goods. [7] But private/public in statist terms is equally problematic. The conception of ‘public’ as necessarily government or state underestimates the capacity of leading universities to shape their own economic and social personalities through both non-market activity such as research collaboration, and selling degrees on a commercial basis, behaving in the manner of a private firm. The statist approach neglects the potential for collective goods and externalities generated in civil association rather than government. And statism neglects the possibility of global public goods. ‘In the international sphere, where there is no government, how are public goods produced?’. [8] Statism is hopelessly nation bound. It sees higher education in the nation as public and state terrain, but cross-border higher education as a private and market terrain. The nation is public, the global is a market. National higher education is public, global higher education is private. Here statism’s construction of the global environment agrees with neo-classical economics. Though they disagree sharply about the national environment, both the market economist and the statist accept the WTO/GATS framework. But this is an impoverished view of the global, and unhelpful to understanding higher education.

A preferred definition of public/private

In developing a preferred approach to public/private, we need to draw what is useful from both economics and political philosophy. We need to incorporate scope for historical relativity and policy choice, without trying to incorporate a comprehensive democratic theory or economic model. We need a non-dualistic and non-formalistic approach. We need an approach which gives us purchase on the realities of the higher education sector, by assisting our empirical investigations and one that provides the potential for coherent policy thinking.

I define public goods as follows:

Public goods are goods that (1) have a significant element of non-rivalry and/or non-excludability, and (2) goods that are made broadly available across populations. Goods without attributes (1) or (2) are private goods.

The mix of public and private goods is determined by public policy, institutional manager-leaders, and the day-to-day practices of personnel. Here it is important to keep in mind the capacity of policy makers not just to augment market competition, but to take the counter-actions, to expand the elements of non-rivalry and non-excludability in production and distribution - for example in higher education, by more broadly distributing the benefits of degree programs and the findings of research. The question of public/private is usefully discussed in two collections prepared under the aegis of the UNDP: Global Public Goods (1999), and Providing Global Public Goods (2003). [9] The work of this group is helpful in drawing attention to the distributive aspect of ‘public’ in various sectors, and in exploring the potential policy mechanisms for augmenting and regulating global public goods.

Applying this to public/ private in higher education

The ownership of higher education can be exclusively public, or mixed, or exclusively private. But almost everywhere in the world, what is produced is a variable mix of public and private goods. Free state-controlled universities produce certain private goods; while at the same time Ivy League private universities contribute to public goods, collective goods and externalities. Though the public goods and private goods are heterogenous to each other, they are also produced in the same higher education institutions, committed to a broad range of teaching/learning, research, community and national service activities. This is not to say that the public/private mix is always the same everywhere. In fact the different public/private balances are one of the key elements that differentiate institutions in higher education.

Private goods produced in higher education

The main private goods produced in higher education are individualised status benefits, or positional goods [10] obtained by students. Higher education institutions allocate scarce places that provide students with opportunities to secure superior incomes and social standing; opportunities arranged in a hierarchy of value, with prestige universities allocating the highest value status goods. For universities, producing these status goods is central to their meaning. Though individual academics might have a different motivation –the creation of knowledge, the pastoral care of students - for elite universities as institutions, and their leaders, the drive for status is stronger even than the drive for revenues. Their lodestone is their ‘competitiveness’, their league table position. This is their capacity as a status producer and status-holding attractor to advance the research reputation integral to their status, to attract high scoring students, to produce high status graduates, to secure the social support of the leading families and the business establishment, Revenues are important, and high status generates revenues, but money is a means to the essential purpose, which is social power.

It is essential to recognise that higher education plays this role in social selection, distributing individual benefits, private goods, of unequal value that are in large part are subject to both rivalry and exclusion (though some externalities are always generated) - even when that higher education is entirely state-owned and free of tuition charges. Free universities can be associated with the broadening of access to private benefits and even the flattening of status distinctions, enhancing the elements of non-rivalry and non-excludability and reducing the role of private goods: herein lies the political case for free education. Nevertheless, even in an egalitarian regime, in which the role and value of private goods is diminished, those private goods as such do not disappear - unless everyone receives a degree, and all degrees have the same standing, which has yet to happen anywhere. And because the private goods provided in higher education are subject to economic scarcity, and both their production and consumption are subject to competition – students compete for access to status goods, universities compete with each other for the best students and for status leadership – the production of these private goods is readily turned into an economic market, either a near-pure commercial market as in the education of foreign students in the UK, or a subsidised semi-market as for domestic students in the USA, where the overall ratio of tuition price to cost is about 0.4. [11]

Public goods produced in higher education.

Higher education produces certain public goods whether it is marketised or not. The classic public goods are knowledge, collective literacy and common culture. As Stiglitz notes, knowledge is almost as close as we can get to a natural public good. [12] The mathematical theorem retains its value no matter how many times or how many people use it. Nor can its benefits long be confined to particular individuals. Knowledge itself (as distinct from its expression in particular artefacts such as texts) can only ever be a temporary private good. ‘Know-how’ can be codified in intellectual property regimes and thus subject to alienated private ownership, but once it is used it can no longer be confined, especially in a networked environment. It is non-rivalrous and only temporarily excludable. It is more a collective than an individual good, and is always under-produced in markets.

Literacy and cultural formation are both individualised and collectivised. Like knowledge, they have many unforeseeable externalities, short-term and long-term. Aside from specialised idioms, literacy is non-rival and largely non-excludable. Cultural formation can be rivalrous and exclusive. Bourdieu argues that cultural capital is deployed as a means of segmenting society in a vertical hierarchy and establishing exclusive networks. [13] However cultural formation can also be democratised; and a universal bedrock of collective common culture provided for everyone in education: this tends to be under-provided in markets.

Thus what is decisive in determining the public/private character of the goods produced is not ownership as such, or even fees, but the purposes of the institution or unit. However marketisation tends to change the purpose of erstwhile public production, for example from generating collective public benefits to generating individualised, saleable private benefits. It may increase the value of superior status goods by driving up cost and exclusivity, and it may diminish access to those goods; that is, diminish equal educational opportunity to acquire those goods. Equal educational opportunity is a public good readily lost in the transition from to markets.

Implications of changing public/private boundaries:

(1) the national dimension

Let us now look at how the public/private boundary is changing in both national systems, and global higher education, and the implications for public/private. I will suggest that we need to revise orthodox approaches to public/private in four ways.

Recognising private goods within national systems

First, national systems. There is a worldwide (though not quite universal) trend in higher education to enhance private goods, especially though the installation of market mechanisms by governments. In systems where economic market forces have been largely absent, these are appearing. In system where inter-institutional competition and tuition charges have long been important, prices are rising and competition is being intensified. You know the trend: new fee structures, tuition hikes, the re-organisation of national systems as competitive quasi-markets, more competition from private institutions, a partial shift from basic to commercialisable research, etc. In many nations, state administration has become less pastoral; in some nations, especially in the Anglo-American zone we share, universities are treated as semi-independent corporations. The tendencies are enhanced by globalisation, which provides a new market sphere of operation. Full-fee international education cuts across the older national policy frameworks that regulated opportunities politically not economically.

Because the empirical and conceptual starting points vary by nation, the global trend to marketisation has different implications depending where you sit. In Western European nations, the traditional approach to public/private is statist, so that the goods are seen as necessarily public. This obscures the role of private institutions, and more particularly neglects those private goods that are produced. It is important these are understood, whether the objective is to restrain them or enhance them:

Revision 1.

In national higher education systems, higher education is not overwhelmingly public in character. Regardless of formal ownership or fee systems, a substantial part of the goods produced in higher education are private goods.

Recognising public goods within national systems

In the English-speaking countries the starting position is different. The concept (in fact ideology) of higher education as a producer of private benefits is entrenched in policy and in economic studies of higher education. In the UK, Australia and New Zealand, Revision 1 took place in the 1980s. In the USA, it was never required – the notion of higher education as a market of institutional producers of private goods is long-standing. In our nations the problem is the opposite to Western Europe – rather than the private benefits being downplayed, the the collective benefits and externalities are downplayed. This suggests Revision 2.

Revision 2.

In national higher education systems, higher education is not overwhelmingly private in character. Regardless of formal ownership or fee systems, a substantial part of the goods produced in higher education are public goods.

In sum: public/private in the national dimension

National higher education produces a mix of public and private goods, whatever the tuition or ownership regime. The mix is highly variable and policy sensitive. In some nations private goods are under-recognised; in others public goods are under-recognised.

Implications of changing public/private boundaries:

(2) the global dimension

Globalisation is expanding the potentials for both global private goods and global public goods in higher education. By globalisation I mean ‘the widening, deepening and speeding up of world wide interconnectedness’, as Held and his collaborators put it in their excellent book Global Transformations (1999). [14] Globalisation is often associated with the production of increased private goods, through cross-border production and trade liberalisation within the global financial system. But globalisation also augments the scale of and scope for public goods. Global inter-dependence increases the extent of cross-border externalities, whereby actions in one nation create benefits or costs for the people in another. Likewise, the development of global systems enhances the potential for collective goods, in the double sense of collective population (e.g. the spread of knowledge about public health) and the collective of nations (e.g. the coordination of banking systems).

Global private goods in higher education

The main global private goods produced in higher education are the degrees obtained by cross-border foreign (international) students, individualised status goods produced by higher education institutions in the exporter nations. Foreign education is largely self-financed. Educational capitalism plays a larger role in the markets in global mobility in and through education, than in the national markets in status goods. The UK and Australia lead the commercial vanguard. [15] Foreign degrees are global goods in two senses: the degrees are obtained in border-crossing, and the degree credentials can be utilised in more than one nation. The main growth of global private goods is in credentials providing entry to globalised fields of employment such as Business Studies, Information Technology and scientific research. When obtained in reputable universities, these degrees have the potential to open individual career opportunities in many nations.

The commercial education of foreign students also constitutes global public goods, in importer nations where offshore places constitute a significant extension of national educational capacity and individual student choice. However, the high private costs normally inherent in foreign education tend to reduce this distributional ‘publicness’ by narrowing the size of the population that can access to this public good. The average annual cost of higher education in the UK, including both tuition and average living costs, is about ten times average per capita income in China.

Global public goods in higher education

Global public goods can be defined as follows:

Global public goods are (1) goods that have a significant element of non-rivalry and/or non-excludability and (2) good that are made broadly available across populations on a global scale. They affect more than one group of countries, they are broadly available within countries, and they are inter-generational; that is, they meet needs in the present generation without jeopardising future generations. [16]

Global externalities arise in cross border relationships and flows between nations, whereby education in one nation affects education in another. Global externalities include not just public ‘goods’, there are also negative externalities, ‘public bads’ such as cross-border pollution, or brain drain from developing nations. Global public goods are under-provided in markets, global public bads are over-provided in markets. Global collective goods are furthered in meta-national regional and worldwide regulation, systems and protocols; e.g. the Washington Accords in engineering, and the Bologna Declaration of a European higher education space. While bilateral negotiation is one means to augment cross-border public goods, and minimisation of global public bads, multilateral forums are a particularly effective mechanism for directly creating global public goods, particularly collective goods.

Higher education is extensively and intensively networked on an international scale, for example through research collaborations, e-mail, and institution-to-institution negotiations. This enhances the potential for both global public goods, including both externalities and collective goods, and also global public bads such as brain drain. Public goods include knowledge in the different fields; the effects flowing from the passage of academic ideas and knowledge, and cross-border research collaborations. There is cross-cultural exchange, and the augmentation of international understanding and tolerance. There are the systems and processes for facilitating cross-border recognition of universities, qualifications and individuals, etc.

Intermediate and final global goods

It is useful to distinguish between intermediate global public goods and final global public goods. [17] In higher education, final global public goods include such outcomes as the spread of knowledge; cultural exchange and understanding; and the expansion of national capacity in higher education via foreign education. Intermediate global public goods are mechanisms making these outcomes possible; such as the systems for transmission, publication and codification of academic ideas and knowledge; and practices sustaining global people mobility such as protocols for cross-border recognition. Final global public goods can be produced by intermediate goods, both public and private. For example, the global commercial market in degrees rests on the production of private goods, but at the same time it contributes to international understanding. Likewise intermediate global public goods can facilitate the production of global private goods. For example, recognition protocols, transport systems and the global financial system are essential to global markets in higher education. This again underlines the point that far from being always zero sum, public and private goods are often inter-dependent.

Whose public goods?

Along with finance and communications, the knowledge system is one of the primary global systems. But like communications it is also culturally asymmetrical, over-dominated by the English language. Almost three quarters of the top 100 research universities are located in English speaking nations. The global role of other languages in research and publication has been marginalised, though it may not stay that way. By tending to displace non-English language academic conversations, the global spread of English-language knowledge creates negative externalities in many nations [18], counter-balancing the public goods from broad-based global knowledge. Here we need to ask ‘whose public goods are they?’ And ‘does the production of these global public goods also generate public bads in some nations?’

Under-recognition of global public goods (actual and potential)

Despite the role of global knowledge and recognition systems, and the global ‘brain flows’ at doctoral level that has increasing impacts in individual nations, global public goods in higher education and elsewhere are not well understood, and are under-recognised. As noted, public goods involve non-rivalry, non-exclusivity and democratic distribution, and are under-provided by markets. Public goods can only be effectively considered and regulated in a policy space. But there is no global policy space in higher education. It is an inter-dependent world, characterised by cross-border flows, but it is also a Hobbesian world of autarkic and contesting nation-states defined by a zero-sum geographical alignment. Government and policy practices are mostly confined to the separated national units. With the important but limited exception of Europeanisation, international agencies and protocols play a minor role.

This problem has been defined as a ‘jurisdictional gap’. There is a ‘discrepancy between a globalised world and national, separate units of policy-making’. [19] In the absence of a global policy space where global public goods can be considered, it becomes axiomatic that international higher education be treated as predominantly as a trading and market environment, in which only the production of global private goods is recognised. No doubt this is consistent with the objectives of those national governments, such as the UK and Australia, that use the profits generated in the sale of global private goods in global educational markets to subsidise national higher education capacity (a national public good) at home. But this policy manoeuvre is only made possible because the absence of a global policy space naturalises the assumptions of both neo-liberalism and statism. For example, in the WTO/GATS protocols, universities operating as public non-profit institutions at the national level, become categorised as private providers when operating in another nation’s space –. they are often seen as indistinguishable from for-profit providers [20]. In the WTO/GATS process there is no consideration of global public goods issues such as maximising the value of free flows of knowledge, or of the need to align national recognition protocols, except to the extent these structures may augment or inhibit global trade. There is no consideration of such ‘public bads’ as the gross unevenness between national education systems, in capacity, resources, cultural power and opportunities for individuals; and how global educational asymmetries inhibit human development.

Putting the nation-state into the global dimension

Thus we are handicapped by an impoverished framework for analysis and policy-making. Again, orthodoxy needs to be revised. First, it is necessary to factor back in the global role of the nation-state. There are two reasons for this. One reason is that whereas the notion of the global environment as fundamentally a trading environment suggests that the market constitute the main development path for emerging national systems, development driven by governmental provision remains a viable strategic alternative. In some circumstances non-market state provision is superior, particularly in the poorer emerging economies. ‘Whether – and how - global public goods are provided determines whether globalisation is an opportunity or a threat’, [21] especially in the smaller nations and emerging higher education systems. We provide higher education as public goods either because there is market failure, because markets cannot do the job; or we opt for public rather than private goods to increase the elements of non-rivalry and non-excludability; and/or to evade the opportunity costs and direct costs of marketing and competition.

The second reason why the nation-state should be brought back into the picture is that ‘governments must assume full responsibility for the cross-border effects that their citizens generate’, [22] including the effects generated by their higher education institutions. Global externalities affect national systems; and global collective goods have a substantial potential to facilitate both global flows, and local/national higher education. This suggests the need for an inter-governmental global space focused on higher education, where (1) the costs and benefits of externalities are defined and managed, enabling national governments to incorporate consideration of cross-border externalities into their routine national decision-making; and (2) collective goods can be negotiated and developed, e.g. cross-country recognition and quality assurance systems; and the removal of barriers to people movement. This suggests Revision 3, which puts the nation-state sector and public goods into this ostensibly marketised, private goods producing, global sphere.

Revision 3.

In the global environment, higher education involves not just production of private goods in a trading environment, but the production of significant public goods. We need an inter-governmental space, in which global educational goods are recognised, measured where possible, and facilitated.

Implicating private agents in the global public space

The second necessary revision is to broaden the genesis of global public goods, beyond governments. As Amartya Sen notes, we live in a world of plural identities, and many non-government associations have claims on our loyalties. These associations are often meta-national and global in form. As Sen also points out, we also live in a world of institutions, and many of these institutions operate across borders. [23] For example higher education institutions are increasingly important global actors in their own right, particularly research-intensive universities. The free flow of knowledge and communications depends crucially on the exercise of self-restraint by governments. Like higher education, public goods are not state bound. Governments are not the only source of public goods; and they should not block other sources of public goods. This suggests the need for Revision 4.

Revision 4.

In addition to national governments and international agencies, global negotiations concerning global public goods in higher education should also take in civil agents, including autonomous higher education institutions, disciplinary communities, and professions, and also the relevant market actors given that their production of private goods can also create public goods.

In sum: public/private in the global dimension

In the global dimension higher education produces a mix of private and public goods. Globalisation enhances the potential for both kinds of goods. The mix is policy sensitive, but there are no adequate forums for global policy making. Global private goods are broadly understood. Global public goods - and the potential contribution of inter-governmental forums, and non-government agents, to those goods – are not.

Conclusions

We are all too easily trapped in seeing higher education in terms of a dualistic public/private ideology, and a policy horizon still bounded by the nation-state despite the fecundity of globalisation. A revised approach is needed. This paper suggests:

  • In one respect we should follow neo-liberal economists, who apply the categories of public/private to the outcomes of higher education (public/private), rather than ownership (state sector/non state sector). But we should not privilege markets at the national level, or fail to grasp public goods at the global level, as they do.
  • We should not follow the statists, who ignore the potential for private goods and the role of markets in national higher education, confine policy to the national sphere, and fail to grasp public goods at the global level.
  • In determining the nature of the goods, public or private, whether or not the goods are market-produced is much more important than whether or not they are state or non-state sector produced. Though state institutions are – arguably - more open to policy making than are privately owned institutions, both state and private sector institutions produce public and private goods, and both sectors ought to be accessible to democratic considerations. [24]
  • Public and private goods are particular rather than universal attributes. Goods produced in higher education can shift from public to private and vice versa, but their location is historically determined and policy sensitive. Public and private goods are heterogeneous. Their dynamics are different. In certain circumstances they can augment each other, while in other circumstances the relationship is either/or. This creates the challenge of how to determine the optimal mix.
  • Given globalisation, we need tools that enable us to fully grasp private and public goods at the global level, and relate this to national systems and local higher education. Global public goods in higher education are the key to a more balanced, globally friendly, ‘win-win’ worldwide higher education environment, in which the contribution of higher education to the developing world is enhanced.
  • We need better tools for logging cross-border externalities, such as ‘brain circulation’. We need a combination of quantitative tools for measuring that which can be measured, and qualitative tools enabling complex synthetic judgments. We need to define more precisely the potential of global collective goods, such as an integrated world-wide system for recognition of institutions and qualifications.
  • At the national level we need units within government focused on global externalities, developing financial techniques enabling the internalisation of externalities, and identifying nationally optimal cross-border knowledge flows.
  • We also need an inter-governmental global space focused on higher education. When the benefits of global public goods are identified we can talk about costs, cost-sharing, and the negotiation of inter-governmental agreements. International agencies have a pivotal role, providing they have the confidence of the sector across developed and developing nations. There is also a role for universities themselves, NGOs including major private foundations, and commercial interests.
  • We need to enhance access to the global public goods already available, particularly research. Building national capacity in higher education in the developing world (an intermediate global public good) is a condition for the broader circulation and production of knowledge (an intermediate and final good), which in turn establishes better global balance (a final good). The democratisation of planning and production of national and global public goods, renders them more transparent and encourages broader distribution, enhancing ‘publicness’. Democratisation is achieved by making public goods explicit, encouraging policy discussion, and involving the range of non-state agencies and actors.

Bibliography

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Calhoun, C., “The Public Good as a Social and Cultural Project”, in W. Powell and E. Clemens (eds.) Private Action and the Public Good, New Haven: Yale, 1998, pp. 20-35.

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[1] The hegemony of the notion of a ‘national market’ in US higher education is odd in the sense that there is no formal national structure except the federally administered student loans program. This however is a significant exception in that the availability of quasi-voucher loans funding makes national student mobility possible; and this and status competition are the key elements that have constituted market relations. The ‘market’ in the USA is more than just discursive. The triumph of the market notion is also ironic given that the USA was the nation that pioneered the provision of mass public higher education in research universities. But the state research 1 universities are now seen as competing in a single national market along with the Ivy League private universities. For the contemporary positioning of the state sector and discussion of the dynamics of market competition in US higher education see R. Geiger, Knowledge and Money, (Stanford: Stanford University Press, 2004); and D.Kirp, Shakespeare, Einstein and the Bottom-line: The Marketing of Higher Education (Cambridge: Harvard University Press, 2004). For more on the dilemmas of American public universities see S. Marginson, Putting ‘Public’ Back into the Public University, Thesis Eleven, 83

[2] F. A. Hayek, The Constitution of Liberty. (London: Routledge and Kegan Paul, 1960).

[3] C. Calhoun, “The Public Good as a Social and Cultural Project”, in W. Powell and E. Clemens (eds.) Private Action and the Public Good. (New Haven: Yale, 1998), pp. 20-35.

[4] There is an extended discussion of notions of the public good in W. & E. Clemens (eds.) Private Action and the Public Good. (New Haven: Yale, 1998). For a more extended consideraitn of the literature see S. Marginson, Five somersaults in Enschede, in J. Enders & B. Jongbloed (eds.) Public-Private Dynamics in Higher Education, (Dordrecht: Springer, 2005)

[5] P. Samuelson, “The Pure Theory of Public Expenditure”, Review of Economics and Statistics, volume 36, number 4, 1954, pp. 387-389.

[6] In this paper the term ‘goods’ is used in a generic sense to refer to all forms of production including those industries conventionally characterised as ‘services’ such as education. ‘Goods’ refers to benefits obtained, which includes benefits that are intangible/ non-corporeal, as well as those manifest in corporeal commodities.

[7] B. Pusser, “Higher Education, the Emerging Market and the Public Good, in P. Graham and N. Stacey (eds.) The Knowledge Economy and Postsecondary Education. (Washington D.C.: National Academy Press, 2002).

[8] I. Kaul, I. Grunberg, and M. Stern, Global Public Goods: International Cooperation in the 21st Century. (New York: Oxford University Press, 1999), p. 12.

[9] ibid; I. Kaul, P. Conceicao, K. Goulven and R. Mendoza, Providing Global Public Goods: Managing Globalisation. (New York: Oxford University Press, 2003).

[10] F. Hirsch, Social Limits to Growth. (Cambridge, Mass.: Harvard University Press, 1976); S. Marginson, Markets in Education. (Sydney, Allen and Unwin, 1997); S. Marginson, “Competition and Markets in Higher Education: A ‘Glonacal’ Analysis”, Policy Futures in Education, volume 2, number 2, 2004, pp. 175-245.

[11] Winston, G. Towards a Theory of Tuition: Prices, Peer Wages, and Competition in Higher Education, Discussion Paper Number 65, Williams Project on the Economics of Higher Education. (Williamstown: Williams College, 2003).

[12] J. Stiglitz, “Knowledge as a Global Public Good”, in I. Kaul, I. Grunberg and M. Stern (eds.), Global Public Goods: International Cooperation in the 21st Century. (New York: Oxford University Press, 1999), p. 308.

[13] P. Bourdieu, Distinction: A Social Critique of the Judgment of Taste, translated by R. Nice. (London: Routledge and Kegan Paul, 1986).

[14] D. Held, A. McGrew, D. Goldblatt, & J. Perraton, Global Transformations: Politics, Economics and Culture. (Stanford: Stanford University Press, 1999), p. 2.

[15] Op. cit., Marginson, 2004; Organisation for Economic Cooperation and Development, OECD. Internationalisation and Trade in Higher Education: Opportunities and Challenges. (Paris: OECD, 2004).

[16] Op. cit., Kaul et al., 1999, pp. 2-3.

[17] Ibid, p. 13.

[18] I am indebted to my colleague Imanol Ordorika from the Universidad Autonoma de Mexico (UNAM) for this point. In world in which cultural resources are both diverse in content and unequal in power, global academic systems have downsides.

[19] Op. cit., Kaul et al., 1999, p. xxiv.

[20] When abroad public universities often operate via university-controlled private companies; but often this is a symptom of the discursive construction of global higher education as global trade, rather than the cause. Even when foreign universities operate in their normal guise they are treated as private providers, and mostly, their contribution to public goods in the nation of operation is ignored.

[21] Op. cit., Kaul et al., 2003, p. 2.

[22] Op. cit., Kaul, et al., 1999, p. xxvii.

[23] A. Sen, “Global Justice: Beyond International Equity”, in I. Kaul, I. Grunberg and M. Stern (eds.), Global Public Goods: International Cooperation in the 21st Century. (New York: Oxford University Press, 1999), pp. 116-125.

[24] Ownership and policy are only two of the inputs that determine higher education. Other relevant inputs include legal structures and regulation, economic and financial flows and systems, democratic relations with localities and nations, knowledge economy relations with business and industry, disciplinary networks, interface with the learned professions, internal cultures organisation and management; its technologies, and last but not least, international networks.