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Economics of Higher Education and Contemporary Outlook of Turkish Universities

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Economics of Higher Education and Contemporary Outlook of Turkish Universities Görüfl / Viewpoint www.yuksekogretim.org Economics of Higher Education and Contemporary Outlook of Turkish Universities Yüksekö¤retim ekonomisi ve Türkiye üniversitelerinin aktüel görünümü Taptuk Emre Erkoç Department of Economics, Faculty of Economics and Administrative Sciences, Gediz University, ‹zmir, Turkey Özet Abstract ‹kibinli y›llar, yüksekö¤retim için önemli say›labilecek de¤iflimler ile bafl- The years 2000s began with changes that can be considered significant for lad›. Ekonomik aç›dan en temel de¤iflimin bu sektöre aktar›lan kamu kay- higher education. It can be claimed that the most essential change financial- naklar›ndaki bariz azalmalar oldu¤u iddia edilebilir. Yan› s›ra, 1998’deki ly is the apparent decreases in public funding allocated to this field. In addi- Sorbonne ve 1999’daki Bologna deklarasyonu ile birlikte 2000 y›l›nda ka- tion, Sorbonne and Bologna declarations (1998 and 1999, respectively) as muoyuna duyurulan Lizbon stratejisi, yüksekö¤retimin Avrupa Birli¤i well as Lisbon strategy (2000) had a tremendous impact on policy-making of üye ülkelerinde standart hale getirilmesi için kayda de¤er bir politika ya- higher education in terms of standardization of quality of education across p›m etkisi de oluflturdular. Bu anlamda, kamu inisiyatiflerinin yan› s›ra EU member and candidate states. Therefore, new initiatives that have capa- özel ve vak›f mülkiyetine sahip yeni oluflumlar›n da bu sahada faal olma- bilities to provide cutting-edge research and education facilities to the lectur- ya bafllamas›na flahit olundu. Türkiye, Birli¤e aday ülkelerden biri olarak, ers and students respectively have been supported by governments. Turkey devlet d›fl› aktörleri, yüksekö¤retim hizmeti sunumunda destekleyen ülke- –as a candidate country to join EU– is one of the leading countries to encour- ler aras›nda yerini ald›. Günümüz itibariyle Türkiye yüksekö¤retimi bün- age non-profit entrepreneurs for opening up state-of-art universities through yesinde 80’e yak›n vak›f üniversitesi, kamu üniversiteleri ile rekabet halin- financial contributions and tax exemption status. Eventually, nearly 80 non- de, faaliyette bulunmaktad›r. Nicelik olarak varl›¤› ve önemi art›k göz ar- profit (NP) universities are operating in Turkish Higher Education alongside d› edilemeyen bu üniversitelerin akademik sahada gösterecekleri baflar›- with public universities contemporarily. It is an undeniable fact that these n›n Türkiye’ye yapaca¤› katk› da yads›namayacak bir gerçektir. Bu çal›fl- universities, which cannot be ignored for their presence quantitatively and ma, dünyada ve Türkiye’de kamu yüksekö¤retiminin durumunu irdele- significance, would also contribute Turkey with their future achievements in mekle birlikte, vak›f üniversitelerinin Türkiye yüksekö¤retimindeki yeri- the academic world. This paper reviews public higher education system and ni inceleme alt›na alm›flt›r. the challenges that it’s facing currently as well as discusses the role of NP uni- versities in the provision of higher education relying on the Turkish case. Anahtar sözcükler: Kamu yüksekö¤retimi, Türkiye, vak›f üniversiteleri, Keywords: Higher education, non-profit universities, public higher educa- yüksekö¤retim. tion, Turkey. he beginning of 21st century brought new discus- tries in an alarming way. Eventually, policy-makers in United sions on the provision of public services by govern- States and European Union countries tended to support new T ments. Recently, many researchers (even ardent sup- mechanisms which have potential capabilities to take over porters of welfare state models like Gosta Esping-Andersen some of the responsibilities of governments in terms of public and Nicholas Barr) acknowledged the fact that welfare provi- services provision. These new mechanisms can be enumerated sion of governments account for remarkable part of govern- as local authorities, non-profit (NP hereafter) sector and free ment expenditures which threaten the fiscal structure of coun- market system through privatization. Yüksekö¤retim Dergisi 2015;5(2):65–72. © 2015 Deomed ‹letiflim / Correspondence: Gelifl tarihi / Received: Haziran / June 16, 2015; Kabul tarihi / Accepted: Kas›m / November 7, 2015 Yrd. Doç. Dr. Taptuk Emre Erkoç Gediz Üniversitesi, ‹ktisadi ve ‹dari Bilimler Fak. Ekonomi Bölümü, ‹zmir e-mail: [email protected] Çevrimiçi eriflim / Online available at: www.yuksekogretim.org • doi:10.2399/yod.15.013 • Karekod / QR code: Taptuk Emre Erkoç Apart from local government bodies and private compa- with commodification of education through which students nies, NP sector have gained great importance due to its non- were treated as customers. Besides, this new environment tai- governmental structure encompassing less bureaucracy as well lored opportunities to private entrepreneurs to take part in as lack of profit motive which makes customers feel secure higher education industry into which they transferred their about the quality of good and/or service provided. The numer- business interests. ical increase in NP entities had an impact on academic envi- Although Shumar’s (1997) commodification arguments ronment and accordingly loads of papers have been published on higher education cannot be underestimated, fiscal prob- in the last three decades. One of the industries that non-profit lems of countries –that mostly induced by government debts– organizations (NPOs) have been intensified is university sector in those days cannot be ruled out either. As Clotfelter, in which public, private and NP institutions are in competition Ehrenberg, Getz and Siegfried (1991) indicated clearly, share with one another. The main difference of a NP university from of higher education expenditures in the Gross National its public and private counterparts lies behind the pricing pref- Product (GNP) increased in a considerable way between the erences as put forward by Jenny (1968). 1920s and 1980s from 0.7% to 2.6%. This remarkable change At the course of the last decade of previous millennium, in expenditures urged policy-makers to seek alternative Sorbonne and Bologna declarations (1998 and 1999, respec- mechanisms for the provision of higher education, according- tively) as well as Lisbon strategy (2000) had a tremendous ly come up with more entrepreneurial and market-orientated impact on policy-making of higher education in terms of strategies. Therefore, the commodification process cannot be standardization of quality of education across EU member solely deduced to ideological shift (i.e. from socialism to neo- and candidate states. Therefore, new initiatives that have liberalism), but diversification of risks in the age of economic capabilities to provide cutting-edge research and education and in particular fiscal downturn must be taken into account. facilities to the lecturers and students have been supported by Relying on public economics literature, governmental governments. Turkey –as a candidate country to join EU– is support to higher education can be economically justified on one of the leading countries to encourage non-profit entre- the basis of public goods and positive externality notions preneurs for opening up state-of-art universities through which have similar reflections. These notions basically stim- financial contributions and tax exemption. Eventually, nearly ulate governmental intervention to the markets where third 80 NP universities are operating in Turkish higher education parties are influenced during the market exchange process alongside with public universities contemporarily. apart from demanders and suppliers. For higher education In this paper, after reviewing public higher education sys- case, not only two parties –students and university adminis- tem and the challenges that it is facing currently, the role of NP tration– in the market exchange are getting benefits from it, universities in the provision of higher education is discussed but also community living around the university becomes relying on Turkish case. The outline of the paper as following: well-off. Therefore, total benefit of university education the second section reviews literature on economic aspects of exceeds private benefit due to addition of social benefit. higher education including cost-sharing notions, the third sec- Eventually, governmental support is needed to clear the mar- tion sheds light on the discussions around the challenges and ket at the new equilibrium point. obstacles for public universities in 21st century; the fourth sec- The possible failure of government intervention to this sec- tion describes Turkish higher education in connection with a tor concerning efficient market paradigm is facing difficulty to brief historical background, the fifth section puts forward NP set the appropriate tuition level that covers program costs as universities as the current trend in the higher education of well as the amount of increase in tuition over time (Dill, 1997). Turkey and finally the sixth section concludes. To overcome this “economic calculation problem” of govern- mental institutions (Mises, 1935), deregulation of higher edu- Economics of Higher Education cation and allowing non-governmental actors to get involved Economic crisis –motivated mainly by oil crisis– occurred in in this sector has been proposed by economists along with 1973 symbolises a vital point for the economic history of high- international organizations such as World Bank and er education. As soon as the drastic consequences of World UNESCO. Thanks to the participation of new players in this War II were
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