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Governmental Policy Choices and Private Higher THE POLITICS OF HIGHER EDUCATION: GOVERNMENTAL POLICY CHOICES AND PRIVATE HIGHER EDUCATION IN POST-COMMUNIST COUNTRIES A Comparative Study of Hungary, Georgia, Latvia and Lithuania By Marie Pachuashvili A dissertation submitted to Central European University Department of Political Science In partial fulfillment of the requirements for the degree of the Doctor of Philosophy Supervisor: Balázs Váradi CEU eTD Collection Budapest 2009 I hereby declare that this work contains no materials accepted for any other degrees in any other institutions. This thesis contains no materials previously written and/or published by another person, unless otherwise noted. Marie Pachuashvili June 1, 2009 CEU eTD Collection ii ABSTRACT Since the collapse of communist regime, higher education systems in countries of Central Eastern Europe and the Former Soviet Union have been witnessing a most profound transformation, related to diminished state involvement in funding, provision and governance of higher education. The creation and growth of private higher education institutions is one such development that greatly contributes to the changing higher education landscape. However, as we observe, the private higher education growth patterns have been largely uneven across the region, varying from non-existent to more than a 30 percent share of the total enrollments. Apart from the size, differences are perceptible in the nature and types of privately provided education. Notwithstanding the common legacy both at the higher education and broad political- economic levels, countries exhibit a wide variation with respect to the scope and nature of the private growth as well as governmental policies accommodating newly emerged institutional forms. The aim of the research project is two-fold. By using comparative case study method, the study seeks to document salient tendencies in governmental policies towards higher education and examine their impact on the size and nature of privately provided higher education. To understand what leads to such variety in governmental policy outcomes constitutes another central objective of this empirical undertaking. The four countries CEU eTD Collection thought to be most suitable for examining the dual question of what determines the differences in governmental policy approach and how these differences, in turn, shape private higher education growth patterns are Hungary, Georgia, Latvia and Lithuania. iii The in-depth analysis of the four carefully selected cases has demonstrated that markedly different governmental approaches have produced equally diverse patterns of private sector growth. That is, a largely laissez-faire policy attitude characteristic of Georgia before the changes of 2003 has led to a sharp increase in small, pragmatically oriented institutions that are weak academically and mostly serve demand-absorbing function. Private sectors that are restricted in size and serve ethno-linguistic, religious or other culturally oriented goals characterize Hungary and Lithuania, where the governments have adopted the regulatory policy stance. The Latvian government’s largely market-liberal approach towards private institutions has produced a sector that is one of the largest in the region and that serves public purpose by providing students with enhanced choice. Examination of the factors at national level that ostensibly determine governmental policy approach towards privately provided education, on the other hand, has shown that the wealth of a country is one of the most potent variables explaining the divide between Georgia and the other three countries. The mode of interest intermediation and ethnic-religious heterogeneity of population also proved to be powerful predictors for governmental disposition towards private education, while the explanatory power of political ideology turned out to be weaker than hypothesized in some country cases. CEU eTD Collection iv ACKNOWLEDGMENTS This project could not have been completed without support from several people to whom I owe special thanks. First and foremost, I would like to express my utmost gratitude to my supervisor, Balázs Váradi, who prompted my interest in higher education and whose enormous support and encouragements have helped me through the most difficult stages of working on this undertaking. I am especially grateful to Daniel Levy for the support and time he has given me. My work has benefited greatly from his valuable comments on different publications related to this project. Affiliate membership of Program for Research on Private Higher Education (PROPHE), which provided me with an opportunity to work and exchange ideas with colleagues with similar research interests, has been of special help. During my doctoral research, I benefited from the Doctoral Research Support Grant of CEU, which enabled me to travel to different countries to collect data and conduct interviews. I also would like to thank all my interviewees for agreeing to give their time and share their views. Finally, I wish to thank my husband Zaza for the tremendous support, and my son Nicolas, who has been my inspiration. CEU eTD Collection v TABLE OF CONTENTS ABSTRACT ..................................................................................... III ACKNOWLEDGMENTS .................................................................. V TABLE OF CONTENTS .................................................................. VI List of Figures ....................................................................................... x List of Tables ........................................................................................ xi List of Abbreviations ......................................................................... xiv CHAPTER 1: SETTING THE STAGE ............................................ 1 1.1 Introduction .................................................................................... 1 1.2 The Main Objectives and Relevance of the Research Project .... 3 1.3 Plan of the Dissertation .................................................................. 9 CHAPTER 2: THEORETICAL FRAMEWORK ............................. 10 2.1 Introduction .................................................................................. 10 2.2 Determinants of Public Policy Choices ..................................... 10 2.3. Theories of Public Goods Provision .......................................... 15 2.3.1. Market Failure ....................................................................................... 16 2.3.2. Government Failure ............................................................................. 18 2.4 Ideological Shift and Encouraging Market Mechanisms in Higher Education ............................................................................ 22 2.5 Definition and Typology of Private Higher Education CEU eTD Collection Institutions ........................................................................................ 27 2.6 Governmental Policies towards Private Higher Education ..... 37 CHAPTER 3: METHODOLOGICAL CONSIDERATIONS ............ 43 3.1 Analytical Model ........................................................................... 43 vi 3.2 Measuring and Operationalizing Variables .............................. 45 3.2.1 Dependent Variable: Private Higher Education Growth Patterns .. 45 3.2.2 Independent Variable: Governmental Policies towards Private Higher Education .......................................................................................... 45 3.2.3 Determinants of Governmental Policy towards Private Higher Education ....................................................................................................... 46 3.3 Working Hypothesis ................................................................... 48 3.4 Methodology and Case Selection ............................................... 52 CHAPTER 4: THE CASE OF HUNGARY .................................... 60 4.1 Introduction ................................................................................... 60 4.2. The Structure of the Higher Education System ........................ 61 4.2.1. Inter-Sectoral Dynamics ..................................................................... 61 4.2.2 Non-state Higher Education Institution Growth Patterns ................ 65 4.2.2.1 Ownership Status .................................................................................... 68 4.2.2.2 Institutional Funding ............................................................................... 68 4.2.2.3 Governance and Control ......................................................................... 72 4.2.2.4 Institutional Mission ................................................................................. 74 4.2.3 Conclusion ............................................................................................. 77 4.3 Governmental Policies towards Higher Education .................. 79 4.3.1 Legislative Framework ........................................................................ 79 4.3.2 Governance Structures for Higher Education Institutions ............... 83 4.3.3 Higher Education Funding Policies .................................................. 87 4.4 Determinants of Governmental Policies towards Higher Education ........................................................................................... 98 4.4.1 Economic Development ....................................................................... 98 4.4.2 Political Parties and Ideology ...........................................................
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