The University and the Welfare State in Transition. Changing Public Services in a Wider Context Pres

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The University and the Welfare State in
Transition.Changing Public Services in a Wider
Context Presentation to the PRESOM seminar,
Berlin School of Economics, Berlin, Octobe 6, 2007

• Professor Marek Kwiek
• Center for Public Policy
• Poznan University, Poznan, Poland
• kwiekm_at_amu.edu.pl
• www.cpp.amu.edu.pl

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Overview

• Transformations in HE in other public services,
  public investment in HE
• Future of the welfare state/future of (public) HE
• World Bank the state public sector HE and
  education/healthcare/pensions reforms (EU/CEE)
• States changing fiscal/financial conditions
• The nation-state/university pact vs. postwar
  welfare contract in general in Europe
• The many facces of privatization of HE in Poland
• Conclusions

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Welfare state and public investment in HE (1)

• The foundations of the European welfare state in
  its curent European postwar forms, for a variety
  of internal and external reasons and due to a
  variety of international and domestic pressures
  needs to be renegotiated?
• Towards adaptations economically viable,
  socially acceptable, politically feasible WS

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Welfare state and public investment in HE (2)

• Because knowledge is the most highly valued
  commodity in the global economy, nations have
  little choice but to increase their investment in
  education, Martin Carnoy (?) versus
• New winners and new loosers, a deepening gulf
  between the knowledge rich and knowledge poor
  (Esping-Andersen) (?)

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Welfare state and public investment in HE (3)

• EC needed a combination of targeted public
  investments and higher private contributions
• EC After remaining a comparatively isolated
  universe for a long period, both in relation to
  society and to the rest of the world, with
  funding guaranteed and a status protected by
  respect for their autonomy, European universities
  have gone through the second half of the 20th
  century without really calling into question the
  role or the nature of what they should be
  contributing to society (2003)

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World Bank story revisited (1)

• A pendulum looking to the state or to the
  market, to do more in social affairs
• States behavior (and its finacial consequences)
  under severe scrutiny worlwide
• Third way of privatization healthcare, pensions,
  and then education
• CEE still not yet locked into costly solutions
  (of the Western welfare state)

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World Bank story revisited (2)

• Although the state has a central role in
  ensuring the provision of basic services
  education, heath, infrastructure it is not
  obvious that the state must be the only provider,
  or a provider at all (WB 1997)
• Incompatibility between Banks major publications
  (WDRs) and its niche education sector
  publications role of the state and public sector
  vs. role of HE (2002 Construicting KS)

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World Bank story revisited (3)

• Aid and loan conditionalities in SAPs (developing
  world, also some transition countries)
• Multi-pillar pension systems instead of PAYG ones
  already in 31 transition countries, including
  Poland, Bulgaria, Croatia, Estonia, Hungary,
  Latvia, Slovakia, Macednia, Romania, Ukraine
• Growing private healthcare sector in CEEs,
  semi-privatization of public healthcare, private
  healthcare insurance amids declining public
  healthcre

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States changing fiscal conditions (1)

• The tight fiscal environment will continue, if
  not intensify (CEE needs, CEE reforms)
• A zero-sum game gains in HE at the expense of
  gains in other programs?
• HE Diverging trajectories of costs and
  available revenues a function of (1)
  per-students costs, (2) increasing partcipation
  and (often) population growth, and (3)
  increasingly inadequate government revenue
  (shrinking tax base) (Johnstone)

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States changing fiscal conditions (2)

• HE in CEEs is not successful in competing with
  other public sector services for public funds (HE
  subsidies low RD subsidies low and decreasing)
• Some solutions suggested to CEEs
  entrepreneurship (more non-state non- core
  income)
• cost-sharing (fees, less subsidies etc)
• bigger workloads, classes contracts, etc
• a combination of cost-side and revenue-side
  solutions

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Renegotiating the social contract (1)

• Seeing changing global role of HE in the context
  of changing global role of the state is useful
• Analogically, reforms to HE in the context of
  reforms to the state and the public sector (also
  in CEEs) is useful
• Traditionally, university/nation-state pact
  training citizen-subjects of the nation-state,
  watching over the spiritual life of the people,
  producing and inculcationg national
  self-knowledge, providing national social glue
  (Humboldtian model)

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Renegotiating the social contract (2)

• Off-loading the state (and its budget) through
  increasing private income for public
  universities,
• keeping competition between public and private
  providers privatization of the public sector
  plus booming of the private sector the Polish
  example below

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Privatization definition (?)

• Privatization in reference to higher education
  refers to a process or tendency of colleges and
  universities, both public and private, taking on
  characteristics of, or operational norms
  associated with, private enterprises. ...
  Privatization can best be viewed as a direction
  along the continua of several related yet
  distinct dimensions
• high publicness to high privateness
  mission/purpose, ownership, source of revenue,
  control of government, norms of management, D.
  Bruce Johnstone (2007)

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Privatization of HE Poland

• Dynamic growth in student numbers 400,000 (1990)
  to 2,000,000 (2006) in the number of private HE
  institutions (6 in 1990 318 in 2006) in
  enrollments in the private sector (2006, 33
  percent, 640,000 students)

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Privatization in HE, funding Poland (1)

• Public HE funded through the state budget and
  tuition fees from part-time students (full-time
  no fees)
• State funding for higher education as a
  percentage of GDP, 1995-2006 slightly below
  EU-average between 0,75 and 0,89 percent
  (2004-2006 almost 1 percent). In 2006 9,9
  billion PLN (2,9 billion EUR)
• Structure of major sources of income (teaching,
  research)
• Both public and private institutions obtain vast
  majority of income from teaching public 82
  percent, private 96 percent
• Income from research is 13 for public and 0,4
  percent for private
• (private sector almost fully a teaching sector)

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Privatization in HE, funding Poland (2)

• Structure of funding for teaching
• Public institutions state budget (71 percent),
  tuition fees (22 percent), other sources (7
  percent)
• Private institutions no state funding, tuition
  fees (97 percent)
• Generally, to public institutions go 82 percent
  of all income from teaching 100 percent of
  public subsidies for teaching 51 percent of all
  student fees charged
• Structure of funding for research
• Research funded mostly by the state (limited
  links with the industry)

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Renegotiating the social contract (3)

• Smaller responsibilities of the state, and more
  responsibility of the individual.
• The individual comes first. Also increasingly
  the individual pays first.
• Postwar welfare contract does not seem to be
  workable (fundable, in the long run CEEs short
  run) in open economies/under globalization
  pressures/current demographics etc

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Tentative conclusions (1)

• Us missions being reformulated following 2
  decades of reforms of other public services
• New context for public universities economic
  competitiveness of nations, global (and EU)
  pressures on national economies and on national
  welfare states
• New interest of EU/OECD/WB (10 years only but a
  new discourse on U!) new concepts

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Tentative conclusions (2)

• Convergence of economic and academic spaces (e.g.
  Lisbon and Bologna, universities with more
  growth/more jobs tasks)
• Economic dimension of U comes to the fore at all
  levels of discussion about the future
• Students as consumers, academics as providers of
  services? Collegiality vs. managerialism,
  part-time knowledge workers etc
• Direction more financial self-reliance of U,
  rethinking studnet fees, entrepreneurship and
  cost-sharing? CEEs vs. EU-15?

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Tentative conclusions (3)

• EU-15 academic discussons/CEE social
  experimentation with welfare in practice
• Reformulation of the welfare state smooth in
  anunnoticeable manner (e.g. legislation)
• Renegotiation, in most parts of the world, of
  social contracts with regards to most areas of
  social benefits and state-funded services
  ongoing?
• BUT U highly adaptable institutions, thriving
  under ever-changing circumstances plethora of
  choices, so effects hard to predict (givens and
  options).