The New Nation - Internet Edition

Dr John Richards

Whether at the primary, secondary, or tertiary level, education is a kind of investment. As with investment in physical plant and equipment, investment in "human capital" increases labour force productivity and hence renders a country more prosperous. In an industrial knowledge-based economy, it is necessary that the overwhelming majority achieve secondary school education, that a clear majority go on to some form of post-secondary training, and that a sizeable minority achieve a university degree.

University education has become more important in recent decades, and younger cohorts have invested more in education than their parents. In the age 25-34 cohort, the youngest whose members can be expected to have completed a university degree, approximately three- tenths have a university degree, double the share among those age 45 and older.

A second university goal is the generation of relevant new knowledge via research. In good universities, teaching and research are joint products: the best researchers are often the best teachers. This poses a dilemma: to what extent should faculty members teach or conduct research, and how to decide? In the UK, for example, the central government undertakes regular audits of university departments. Productive departments, measured by a high publication rate per faculty, are funded more generously; less productive departments receive less funding and their faculty members are required to spend more time per week in teaching.

A third legitimate goal is the "consumption value" for students of university learning. Even if the study of art, music, philosophy or literature does not enhance labour force productivity or generate new knowledge, students benefit from exposure to the ideas and works of great minds.

There exist several means to evaluate university performance. Some are relatively straightforward managerial accounting measures of inputs and outcomes of university activities. Others are assessments by committees or agencies established for the purpose of generating professional judgments. Yet others derive from unofficial but valuable surveys conducted by the media needless to add, none of these measures are perfect:

Graduation rates: If a high proportion of entering students drop out before graduation, that is an index of "wasted resources" and the university should probably be required to improve quality of teaching. This is not necessarily the connect interpretation. Some universities have a mandate to accept all students having a minimum threshold (such as a high school certificate), and cull the less academically oriented via "tough" courses with high failure rates. Alternatively, a university may realise a high graduation rate by resort to lax marking. In effect, it sells a low-value credential.

Faculty qualifications: We may measure the quality of a university by the quality of the faculty. What percentage is full time, as opposed to sessional part time, instructors? Presumably, full time faculty members devote more attention to the diverse hard-to-specify tasks of university education than do sessional instructors responsible solely for teaching a particular course. What percentage has doctoral degrees? Are the degrees from reputable universities? What is the publication record of university members?

Children with secondary education knowledge and skills will usually be more productive than those without, and can be expected to earn more over their working lives. Perhaps parents should pay for the benefit that investment in primary/secondary education provides to their children. But, in most countries, there is no charge for attendance at government primary or secondary schools. Why not? First is an efficiency argument: the incremental benefits of a well trained work force accrue not only to the children thus educated but to the whole economy. This spillover public benefit is sufficiently important to justify the subsidy to primary and secondary education. There is also an equity argument: wealthy families typically appreciate the value of education and are willing, if necessary, to pay for it, but providing primary and secondary education of reasonable quality to all is an important means to equalise the distribution of opportunity and income among citizens of a country.

Some extend to the tertiary level the efficiency and equity arguments pertaining to primary/secondary education. A free-tuition university strategy removes a barrier faced by poor but meritorious students who cannot obtain credit to pay fees, and would not otherwise attend. There are two important counter-arguments to this extension.

It is useful to divide this listing into, on the one hand, financial arrangements channeling resources to the universities supplying education and, on the other hand, financial arrangements providing resources to students who then are able to pay higher fees. I start with supply-side options:

State-owned universities, free tuition, with variable entrance requirements across classes of universities

State-owned universities, variable entrance and tuition regulations, with discretion over tuition fees accorded to elite universities .

This roughly describes the situation in several large US states (e.g., California) with multiple state-owned universities. The lower tier offers acceptable quality undergraduate degrees at modest tuition levels; the upper tier (e.g. Berkeley) offers excellent education at much higher fees.

Unfortunately, the reputation of public university degrees has suffered over the last quarter century. Both problems associated with a strategy of free tuition and subsidised living costs have been severe. Access to public universities is restricted to those with HSC or equivalent. Hence, public funds used to finance public universities largely benefit families with above-average incomes. The quality of instruction is too low to attract families with means to send their children to private universities (whether in Bangladesh or abroad). Instead, the strategy has attracted students willing to suffer the mediocre instruction in exchange for subsidised living arrangements. The youth wings of the political parties have effectively controlled access to dormitories and extended their control into faculty appointments.

Recommendation: The private universities should collectively establish a credible accreditation committee to evaluate private universities, at arms' length from both the government and individual private universities.

To provide reasonable assurance to students and their families of the quality of private universities, there must be a credible accreditation committee able to vet private universities and refuse accreditation to those below some benchmark. Deciding the benchmark and enforcing it will be controversial. To provide for its independence, appointments to the committee might be made by the senior judiciary, and a significant number of committee members could be foreign-based academics.

The government should provide modest funding to suitably accredited private universities via an enrolment-based formula.

The private universities face severe financing difficulties. On the one hand, they face competition from free-tuition public universities; on the other, they face difficulty in attracting students from the small number of families able to afford foreign study for their children.