Governmental Policy Choices and Private Higher

CEU eTD Collection In partial fulfillment of the requirements for the degree of the Doctor of for degreeDoctor the of of requirements the fulfillment In partial GOVERNMENTAL POLICY CHOICES AND PRIVATE AND CHOICES POLICY GOVERNMENTAL HIGHER EDUCATION IN POST-COMMUNIST EDUCATIONIN HIGHER THE POLITICS OF HIGHER EDUCATION: HIGHER OF POLITICS THE A dissertation submitted to Central European University Central to submitted A dissertation A Comparative Study of Hungary, Georgia, of Hungary,Georgia, Comparative Study A Department of Political Science Political Department of Latvia and Lithuania Lithuania Latvia and Supervisor: Balázs Váradi Balázs Supervisor: Marie Pachuashvili Pachuashvili Marie COUNTRIES Philosophy Philosophy Budapest 2009 By

CEU eTD Collection June 1, 2009 Marie Pachuashvili and/or written previously materials no publishedcontains by another person,thesis unless otherwise noted. This institutions. other any materialsdegreesothercontainsinwork no acceptedany this hereby for declare that I ii

CEU eTD Collection private higher education growth patterns are Hungary, Georgia, Latvia and Lithuania. shapeturn,differences, thesegovernmental in differenceshow in approach policyand the determines what of question dual the examining for suitable most be to thought countries four The empirical undertaking. this objectiveof constitutescentralanother governmentalunderstandvariety suchin To education. leads to what policyoutcomes educationandexamine theirimpactnaturesize and the privately on of provided higher thestudy seeks documentto salienttendencies ingovernmental policies towards higher usingcomparative By researchtwo-fold. studythe method,projectcaseis of aim The institutional forms. governmental as privatewellgrowth the as policies accommodating of newlyemerged economiclevels, countriesexhibit a wide variationwith respect to the scopeand nature political-broad educationand higher the at both legacy commonNotwithstanding the education. provided size, privately of the types from and nature Apart the in perceptible enrollments. are differences total the of share percent 30 a than more to growthpatternslargelyhavebeenuneven region, across varying the non-existent from education higher private the observe, we as However, landscape. education higher higher private developmentchangingsucheducation contributesgreatly onethe institutionsthat of to is growth and creation The education. higher of governance and profoundtransformation, diminishedrelated to involvement state funding, provisionin most a witnessing been have Union Soviet Former the and Europe Eastern Central of countries in systems education higher regime, communist of collapse the Since ABSTRACT iii

CEU eTD Collection political ideology turned out to be weaker than hypothesized in some country cases. for governmental disposition towards private education, while the explanatory power of powerfulpredictors be ethnic-religious to and provedpopulationheterogeneity also of intermediation interest of mode The countries. three other the and Georgia between divide the explainingvariables potent most the of one is country a of wealth the that shown has hand, other the on education, provided privately towards approach policy governmental determine ostensibly that level national at factors the of Examination with enhanced choice. servesprovidingpublicpurposethat by studentsregionand the largestin the of one is that sector a produced institutionsmarket-liberalhas privatelargelytowards approach government’s Latvian The stance. policy regulatory the adopted the have governments where Lithuania, and Hungary characterize goals oriented culturally other or ethno-linguistic,serveand sizerestricted arein Privatereligioussectorsthat function. demand-absorbing serve mostly and academically weak are that institutions oriented pragmaticallysmall,increasesharp in a to led 2003has changes Georgia of beforethe of characteristic attitude policy laissez-faire largely a is, That growth. sector private that demonstrated has markedlydifferent governmental approaches cases have produced equally diverse patterns of selected carefully four the of analysis in-depth The iv

CEU eTD Collection Nicolas, who has been my inspiration. son my and support, tremendous the for Zaza husband my thank to wish I Finally, time and share their views. their give to agreeing for interviewees my all thank to like would also I interviews. conduct and data collect to countries different to travel to me enabled which CEU, Duringdoctoralbenefitedresearch,my Doctoral the ResearchfromI SupportGrant of exchange ideas with colleagues with similar research interests, has been of special help. and work to opportunity an with me provided which (PROPHE), Education Private Higher on Research for Program of membership Affiliate project. this to related publications different on comments valuable his from greatly benefited has work My givenme. has he especiallysupporttimetheand am DanielforgratefulLevy I to the most difficult stages of working on this undertaking. higher in through me helped encouragements have and support interest enormous whose and education my prompted who Váradi, Balázs supervisor, my to gratitude utmost my express to like would I foremost, and First thanks. special owe I whom to people several from support without completed been have not could project This ACKNOWLEDGMENTS v

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CHAPTER 3:METHODOLOGICAL CHAPTER CONSIDERATIONS Higher Education towards Private Policies Governmental 2.6 Institutions Education Higher Private Typologyof and Definition 2.5 Education Higher in MarketMechanisms Encouraging and Shift Ideological 2.4 Goods Provision Public of Theories 2.3. Choices Policy Public of Determinants 2.2 Introduction 2.1 2:THEORETICAL CHAPTER FRAMEWORK Dissertation of the Plan 1.3 ResearchProject the of Relevance and Objectives Main The 1.2 Introduction 1.1 STAGE THE 1:SETTING CHAPTER Abbreviations of List Tables of List Figures of List TABLECONTENTS OF ACKNOWLEDGMENTS ABSTRACT 3.1 Analytical Model Model Analytical 3.1

2.3.2. Government Failure Government 2.3.2. Failure Market 2.3.1...... TABLE OF CONTENTS ...... vi ......

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5.2 The Structure of the Higher Education Sector Sector Education Higher the of Structure The 5.2 Introduction 5.1 OFGEORGIA CASE 5: THE CHAPTER Education Higher towards Policies Governmental of Determinants 4.4 Education towardsHigher Policies Governmental 4.3 System Education Higher the of Structure The 4.2. Introduction 4.1 OFHUNGARY CASE 4: THE CHAPTER Selection Case and Methodology 3.4 Hypothesis Working 3.3 Variables Operationalizing and Measuring 3.2 5.3 Governmental Policies towards Higher Education Education towards Higher Policies Governmental 5.3

5.2.2 Private Higher Education Institution Growth Patterns Growth Institution Education Private Higher 5.2.2 Dynamics Inter-Sectoral 5.2.1 Conclusion 4.4.5 Factors andReligious Ethno-Linguistic Demographic, 4.4.4 of Intermediation Interest TheMode 4.4.3 Ideology Partiesand Political 4.4.2 Development Economic 4.4.1 Policies Funding Education Higher 4.3.3 Institutions Education for Higher Structures Governance 4.3.2 Framework Legislative 4.3.1 Conclusion 4.2.3 Patterns Growth Institution Education Higher Non-state 4.2.2 Dynamics Inter-Sectoral 4.2.1. Education Higher Private Policy towards of Governmental Determinants 3.2.3 Education Higher Private towards Policies Governmental Variable: Independent 3.2.2 Patterns Growth Education Private Higher Variable: Dependent 3.2.1 5.2.3 Conclusion 5.2.3

5.2.2.4 Institutional Mission Institutional 5.2.2.4 Controland Governance 5.2.2.3 Funding Institutional 5.2.2.2 Status Ownership 5.2.2.1 Mission Institutional 4.2.2.4 Controland Governance 4.2.2.3 Funding Institutional 4.2.2.2 Status Ownership 4.2.2.1 ...... vii ......

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7.2 The Structure of the Higher Education Sector Sector Education Higher the of Structure The 7.2 Introduction 7.1 OFLITHUANIA CASE 7: THE CHAPTER Education towardsHigher Policies Governmental of Determinants 6.4 Education towards Higher Policies Governmental 6.3 Sector Education Higher the of Structure The 6.2 Introduction 6.1 OFLATVIA CASE 6: THE CHAPTER Education Higher towards Policies Governmental of Determinants 5.4

7.2.2 Private Higher Education Institution Growth Patterns Growth Institution Education Private Higher 7.2.2 Dynamics Inter-Sectoral 7.2.1 Conclusion 6.4.5 Factors andReligious Ethno-Linguistic Demographic, 6.4.4 of Intermediation Interest TheMode 6.4.3 Ideology Partiesand Political 6.4.2 Development Economic 6.4.1 Conclusion 6.3.4 Policies Funding Education Higher 6.3.3 Institutions Education for Higher Structures Governance 6.3.2 Framework Legislative 6.3.1 Conclusion 6.2.3 Patterns Growth Institution Education Private Higher 6.2.2 Dynamics Inter-Sectoral 6.2.1 Conclusion 5.4.5 Factors andReligious Ethno-Linguistic Demographic, 5.4.4 of Intermediation Interest TheMode 5.4.3 Ideology Partiesand Political 5.4.2 Development Economic 5.4.1 Conclusion 5.3.4 Policies Funding Education Higher 5.3.3 Institutions Education for Higher Structures Governance 5.3.2 Framework Legislative 5.3.1

7.2.2.1 Ownership Status Ownership 7.2.2.1 Mission Institutional 6.2.2.4 Controland Governance 6.2.2.3 Funding Institutional 6.2.2.2 Status Ownership 6.2.2.1 7.2.2.4 Institutional Mission Institutional 7.2.2.4 Controland Governance 7.2.2.3 Funding Institutional 7.2.2.2 ...... viii ......

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List of References of List Appendices Remarks Concluding 8.4 Determinants Policy Governmental 8.3 Patterns Growth Higher Education Private and Policies Governmental 8.2 Introduction 8.1 8:SUMMARY CHAPTER OFFINDINGS Education Higher towards Policies Governmental of Determinants 7.4 Education towardsHigher Policies Governmental 7.3 ......

8.3.4 Demographic, Ethno-Linguistic and Religious Factors Factors Religious and Ethno-Linguistic Demographic, 8.3.4 InterestIntermediation of TheMode 8.3.3 Ideology Partiesand Political 8.3.2 Development Economic 8.3.1 Cases Country the Selected across Patterns Growth Education Higher andPrivate Dispositions Policy Governmental 8.2.3 Policies Funding Education Higher 8.2.2 Framework Regulatory and Legislative 8.2.1 Conclusion 7.4.5 Factors andReligious Ethno-Linguistic Demographic, 7.4.4 of Intermediation Interest TheMode 7.4.3 Ideology Partiesand Political 7.4.2 Development Economic 7.4.1 Conclusion 7.3.4 Policies Funding Education Higher 7.3.3 Institutions Education for Higher Structures Governance 7.3.2 Framework Legislative 7.3.1 Conclusion 7.2.3 ...... ix ......

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CEU eTD Collection Education in Lithuania, 1995-2001……………………………..224 Figure 7.1 Georgia……………………………………………………………123 Figure 5.1 Figure 1.2 Figure 1.1 Changes in Budget Allocations to Science and Higher Student Enrollments in Higher Education Institutions in Analytical Model …………………………………………….43 Governmental Policy Postures ………………………………42 List of Figuresof List x CEU eTD Collection Sectors in Georgia, 1990-2006……………………………………………...121 Table 5.1 and Demographic Change in Hungary, 1989-200………………………….116 Table 4.12 in Hungary, 1990-2006……………………………………………………106 Table 4.11 Sources and GDP, Hungary, 1991-1994…………………………………..102 Table 4.10 1989-1999………………………………………………………………..…101 Table 4.9 Table 4.8 in Hungary, 1989-2005……………………………………….…………….100 Table 4.7 by Type of Institutions in 1992, 1995 and 1996, Hungary……………..……97 Table 4.6 Table 4.5 Table 4.4 Sectors in Hungary……………………………………………………..……71 Table 4.3 Hungary, 1990-2007……………………………………………………..…67 Table 4.2 Sectors, 1990-2007……………………………………………………..…..64 Table 4.1 Selected Four Countries………………………………………………….…54 Table 1.3 Table 1.2 in Countries of Central Eastern Europe and former Soviet Republics….…..5 Table 1.1 Table 5.2 Private Enrollments as the share of the total Student Enrollments Participation in Higher Education in Georgia, 1989-2000…………..122 Public Expenditure on Education in Economic Indicators, Hungary, 1989-2000….………………………...100 GDP per capita (constant 2000 USD) and Employment Ratio Percentage of Applications Received above the Admittance Quotas, The Share of Self-financed Students at State Institutions in Hungary…..94 The Share of State-funded Students in State and Non-State Numerical Overview of Non-State Higher Education Sector in Numerical Overview of the State and Non-State Higher Education Private Enrollments as the share of Total Student Enrollments in Summary of Five Policy Patterns……………………….……….…….33 Numerical Overview of the Public and Private Higher Education The Higher Education Funding Model Employed in Hungary ………. .91 Higher Education Enrollments (percent of 19-24 population) Higher Education Policy Choices in Light of Electoral Outcome State Funding for HE, in Proportion to Total Central Budgetary List of Tablesof List xi

Hungary (percent of GDP), CEU eTD Collection Table 6.9 in Latvia…………………………………………………………………...211 Table 6.8 Table 6.7 Table 6.6 Latvia ……………………………………………………………………..201 Table: 6.5 Table 6.4 Latvia, 1993- 2008 ……………………………………………………….178 Table 6.3 Table 6.2 Sectors in Latvia, 1990-2008……………………………………………...175 Table 6.1 and Demographic Change in Georgia …………………………………….169 Table 5.11 Outcome in Georgia……………………………………………………….161 Table 5.10 (percent of GDP)…………………………………………………………..155 Table 5.9 Table 5.8 in Georgia………………………………………………………………….154 Table 5.7 Institutions in Georgia……………………………………………………..137 Table 5.6 and Self-financed, by Public and Private Institutions in Georgia………...131 Table 5.5 in Georgia………………………………………………………………….129 Table 5.4 in Georgia, 1990-2006…………………………………………………...127 Table 5.3 in Latvia ………………………………………………………………..….214 Sources of Finance in five Private Higher Education Institutions Numerical Overview of the Private Higher Education Sector Higher Education Policy Choices in Light of Electoral Outcome GDP per capita (constant 2000 USD) and Employment Ratio Economic Indicators, Latvia 1989-2000……………………………..210 Public Expenditure on Education in Latvia (percent of GDP)…….....208 Size Distribution of Private Sector Establishments by Country……...179 Numerical Overview of the Private Higher Education Sector in Numerical Overview of the Public Sector in Latvia, 1990-2008…….176 Numerical Overview of the Public and Private Higher Education Public Expenditure on Education in Georgia Economic Indicators, Georgia 1989-2000…………………………...154 GDP per capita (constant 2000 USD) and Employment Ratio Graduation and Job Placement Rates for Selected Private Number of Students Admitted in 2006, Receiving State Grants Tuition-paying Students at Private and Public Institutions in Higher Education Enrollments (percent of 19-24 population) Higher Education Policy Choices in Light of Electoral xii CEU eTD Collection and Demographic Change in Lithuania………………………….……..261 Table 7.8 Outcome in Lithuania………………………………………….……….256 Table 7.7 in Lithuania…………………………………………………………….252 Table 7.6 Table 7.5 Table 7.4 by type of Transaction for 2002………………………………………...249 Table 7.3 Table 7.2 Sector in Lithuania, 1990-2007…………………………………….…...223 Table 7.1 and Demographic Change in Latvia………………………………….....220 Table 6.10 Numerical Overview of the Public-Private Higher Education Higher Education Enrollments (percent of 19-24 population) Higher Education Policy Choices in Light of Electoral GDP per capita (constant 2000 USD) and Employment Ratio Economic Indicators, Lithuania 1989-2000…………………….….251 Public Expenditure on Education in Lithuania (percent of GDP)…..250 Distribution of total Public Expenditure on Higher Education Size Distribution of Private Sector Establishments by Country…...225 Higher Education Enrollments (percent of 19-24 population) xiii CEU eTD Collection SzDSz The Alliance of Free Democrats of Hungary OECD Organization for Economic Co-operation and Development MoES Ministry of Education and Science MoEC Ministry of Education and Culture MoE Ministry of Education LCC Lithuanian Christian College HESC Hungarian Higher Education and Scientific Council HEQEC Higher Education Quality Evaluation Centre of Latvia HEI Higher Education Institution HEC Higher Education Council of Latvia HE Higher Education HAC Hungarian Accreditation Committee FSU Former Soviet Union EBRD European Bank for Reconstruction and Development CQAHE Centre for Quality Assessment in Higher Education in Lithuania CEE Central Eastern Europe List of Abbreviationsof List xiv CEU eTD Collection and pace of the restructuringchangesregime the the attemptsbecome traceableafter of soonpace and highereducation.significant Yet,in state the differencesof nature role the boththe in of redefinitionconcerned which of important most nature, comparable a of questions and problems faced nations liberated newly all authority, state the on dependency countriesparallel all to emerging fromcommunist Sharing legacyextremerule.theof close bears 1990s early the in initiated field education higher of reforms of pattern overall the autonomy, institutional and academic on emphasis overstated its With profile with all three respects has lessened significantly. its state, the by controlled and financed provided, exclusively almost was education communismduringhigher if state: the of traditional,monopolistic role the in changes significantproduced have these All employment. sector private of rise and employer an as state of importance decreased as well as funding, and regulation ownership, state of lessening include These communism. of collapse the since place taking level highereducation landscape largerpartof arechanges broaderthe at political-economic SovietUnion (FSU) havebeen witnessing amost profound transformation. Changes in Higher education systems of countries of Central Eastern Europe (CEE) and the Former Introduction 1.1 of the 1989. Countries with recent common history of the state dominated higher dominated state the of history common recent with Countries 1989. the of CHAPTER 1: SETTING THE STAGE 1

CEU eTD Collection higher education in much of the pre-transition countries remained by and large elitist.large and pre-transition by remainedcountries the of much educationin higher efforts, these increased Notwithstanding allowing parents. working-class for of children and of needs participation industrial meeting both for means effective an constituted which sectors non-university short-cycle, specialized, highly of share growingcharacterizedbeen by countrieshad many communistin period that true is It 2003).(Neave 1989 the of changesregime followingthe years the during about came process the countries FSU the and CEE in whereas 60s, early the in started Europe majordevelopments higherwithineducationfields of internationally. Massification in pronounced. most education become have higher choices policy of in differences the dynamics that particular the in privatization and general in process massification the to expanding access to previously (quantitatively) elite higherbeen education. has nations post-communist many by faced objectives overriding the of One has state that authority the of balance nevertheless retained and the influence particular of the increasing number of stakeholders. the of reflection a largely is mostly (Neave2003). competing interests, external and authoritiesand forces thathigher education internal systems post-communistof countries differ of balance particular the on is it fact, significantly.grown has policy-makingprocess on influence stakeholdersexerting of number the but choices policy determining in actor key a remains government not,than oftenMore markedlysector.governmentaldifferent the of forms steering of to yielded educationhas higher over control central strict the of decline The choices. policy education higher in differences profound exhibit to started soon education s w bev, te mvmn oad as hge dcto a en highly been has education higher mass towards movement the observe, we As

The shift from elite to mass higher education indisputably is one of the of one is indisputablyeducation higher mass to elite from shift The

Put differently, considerable a cross-countryvariation that exists 2

It is with respect

CEU eTD Collection region (Slantcheva and Levy 2007). as this in and been has it time as legacies, comparable in with countries many concentrated so of encompassing as been process this has rarely But phenomenon. private providers - one aspect of the higher education massification process - is a global in increase The countries. independent newly most in institutions education higher private of growth rapid witnessed 1990s the of beginning higher The changing landscape. education the to contributing greatly development such one is institutions the collapse of communist regime. The creation and growth of private higher education since place taking been has educationhigher governanceof and provisionfunding, in transformationofthe higher education field related tothediminished stateinvolvement privatehigher education institutions post-communistin countries. noted,As significant of growth and emergence understandthe to is project research the of focus main The Project Research the of Relevance Objectives and Main The 1.2 creation and growth of distinct private sectors. the and services educational public of privatization the are education These higher rise. enrollment facilitating for adopted have governments that strategies main Post-communist provision.two countries significantexhibit to respect variations with sectors accommodating demand on higher education that was left unmet by government through increased public provision,largely others have witnessed spectacularachieved growth of private been has countries some in expansion the while disproportional: 3

CEU eTD Collection oriented goals. government provision,in othersithas served ethnic, religious, elite and otherculturally by unmet left demand-absorbing was institutionsaccommodating that demand student provided education.privately While private sector growth some countriesin mostlyhas so-calledbeen in of types and nature the in perceptible are differences size, the existentmorethantopercent 30 total theshareenrollments of Apart(Table from 1.1). privategrowthpatternslargelyregion,varyingbeenuneven non- across havefromthe the However, surprising. hardly is demand student unleashed meet to enrollments private in increase rapid Therefore, 1). Appendix see enrollments education higher percent of theyouth age cohortbetween eliteand masshigher education (for therate of 15 of borderline accepted the exceed rate enrollment the did countries few a in only On thewhole, accessto higher education during communismhad been limited.In fact, 4

CEU eTD Collection Ukraine Slovenia Republic Slovak FederationRussian Romania Poland Moldova The FYR of Macedonia Lithuania Latvia Rep.Kyrgyz Kazakhstan Hungary Georgia Estonia Republic Czech Croatia Bulgaria Belarus Azerbaijan Armenia Albania respond to the supply and demand conditions, institutional arrangements set by national failures market associatedwithprovision.its differenceIn from competitive various markets byandlargethat and education higher of nature special the with do to important has most the of This education. higher One towards policy public is however, them, among determinants arrangements. institutional other and education publicquality,sectorcapacitylegislative like and regulative and framework higher for educationlevelsystemhigher the at those political,to religious,economic and ethnic, demographic, as such factors level broad from range and multiple are patternsgrowth sector private in variation cross-national such producing for responsible reasons The at Europe, Eastern and Source: former Republics and Soviet Europe Eastern Central in of Enrollments Countries Student of share thetotal as the Enrollments Private 1.1: Table governments serve as the principle factors in shaping the dynamics of both public andpublic both dynamics of shapingthe principlein factors the governments as serve Slantcheva and Levy, 2007. CEPES Statistical Information on Higher Education in Central Education in onHigher Information Statistical 2007.CEPES and Levy, Slantcheva http://www.cepes.ro/information_services/statistics.htm#1 7.78 5.1 0.63 8.47 28.83 28.4 13.1 2.26 0.1 13.28 8.29 n/a 12.94 29.69 25.02 4.9 1.4 10.49 12.78 23.77 35.6 0.0 1999/00 8.29 4.3 0.78 9.92 28.26 29.7 22.6 2.02 1.3 14.42 7.57 28.8 13.24 23.84 23.51 4.7 1.4 11.31 13.00 23.98 28.2 0.0 2000/01 1.6 0.40 11.61 25.22 29.6 25.0 1.97 2.4 20.15 7.47 35.73 14.01 21.65 21.58 4.9 2.3 12.56 13.84 17.84 27.7 0.0 2001/02 9.39 5 2.9 0.88 12.09 23.32 29.4 20.0 2.92 4.5 22.89 7.13 43.3 14.18 20.50 20.30 6.2 2.7 13.44 14.90 15.25 25.2 0.2 2002/03 10.48 6.9 2.17 13.33 23.18 29.5 22.2 8.08 7.0 25.55 7.44 45.49 14.16 19.18 20.30 7.7 3.1 14.36 17.34 14.4 29.7 0.7 2003/04 12.2 . 8.0 4.62 14.88 22.0 30.3 18.3 8.32 7.5 27.91 7.24 54.51 13.66 20.50 21.21 8.9 3.1 16.43 16.19 n/a 26.6 1.0 2004/05 14.8

CEU eTD Collection dcto eeomn atrs ht ae te srtgc rsoss o private of responses strategic the are What patterns? development education higher private and choices policy governmentalvarious between linkages causal are asks: therefore It patterns.growth private shape turn, differences,in these how determinesdifferences governmental in approach towards private higher education and investigation.Inother words, the focus ofthe research project liesrecognizing in what suchvariety governmentalin policy outputs constitutes anothercentral objective our of to leads what understand To education. higher provided privately of nature the and size the on impact their examine and education higher towardsgovernmental policies Theaim ofthe research project two-fold.is The first to is identify salienttendencies in aspects in governmental approaches vis-à-vis private higher education. these to regard with picture possible therichest the offer FSU similarities, the and CEE perceptible of countries and tendencies visible Despite indirectly. although dynamics, sector private for implications important has processes, policymaking in publicinstitution tuition level, orwhat decision does takeit for including private sector setting and capacity sector public building towards take government Whatdoes approach patterns. growth sector private of determinants key constitute institutions, appropriationsdirect grants)and to and (loans subsidies, aid studentand taxesinclude Besidesgenerallegislativeregulative and framework,1997). financialpolicies, which 1996, 1992, Zumeta 1999, Levy 1988, (Geiger development institution private in powerfulenvironment moldsthe a factorwhichinstitutions in is also operate,state the and framework legislative provides it that fact the to Owing institutions. education regulatingfinancing,and governmentthedominant a actor influencingis publichigher structuring, their in role central a playing Hence, education.higher in sectors private institutions to different governmental policy outputs? What are the most important most the are What outputs? policy governmental different to institutions 6 What

CEU eTD Collection thefact that private sectors manyin countries have grown to accommodate almost one- Despite exaggerated. be cannot patterns growtheducation higher private and policies governmental between relationship the examining of urgency and significance The and what are the factors having most weight in determining public policy outcomes. differentgovernments pursuesimilarconcernswithparticular deal action to courses of publicpolicyquestionsdeterminants, of understanding enhance whichwillour of exploregeneralthereforeregion groundsprovides to Thefertile generatingones. new broadly match enables testing hypothesis suggested by different bodies of literature and controllingnumerous considerationcountriesbackgroundis, which under variables on on the one hand and their implications for private sector development on the other. That causeswhatstudyobserved cross-national variationhighereducation in policychoices to possibility rare a offers region political-economicthe general levels, and education higher the at both legacy the of much share countries post-communist that Given vis-à-vis private higher education? instruments? policy various through development sectors private contain to seeking others while outcomes? policy education higher in differences conspicuous for found be could explanation What asks: policy public of determinants possible with concerned questions of set Another education? policies through which governments influencethe size and nature of privatelyprovided third of the total student enrollments, the role and function institutions serve remains serve institutions function and role the enrollments, student total the of third What drives those manifestly different approaches in governmental stance W hy do we find some post-communist governments encouraging governments post-communist some find we do hy 7 why

CEU eTD Collection and governmental policies institutions, that, in some direct or indirect way, private affect their development. of shortcomings and strength for the importance examining and analytically urgency for rationale obvious most provide budgets, public financial involvement, especially in post-communist countries that face sharply reduced governmental lessened with education higher on demand social increasing meeting in play can institutionseducation higher private role The literature. extant the in gap the fill approachesnewly-emergedto towardsintendspolicy research institutions,this governmental common and countries post-communist in assumed have institutions functionsand analyzingrolesprivate By the U.S. the differentthosecommonfrom in organizational However, vastly qualitatively are region the in widespread education. institutions private of characteristic provided privately of traditions longest the has which context, U.S the with concerned mostly is literature education higher countries.post-communist in organizationseducational of forms new about character, comparative of especially research, academic of lack obvious an is there policybutlevel, the nationalistic and at only standpointsNot (Levy2002). antagonismprivatethe to sector development beenhas characteristic politicallyof Left whereas Bank, World the as agenciesinternational influential such by advocated and prominentcontemporarymany supported by economistsbeen providing education has in profile governmental lessened Hence, values. its and society to force subversive as altogether it dismissing or growth their promoting strongly either binary, largely is sector the by played role the view reports policy available which in way common most The incoherent. largely - them towards policy public while vague, somewhat education across post-communist countries (Slantcheva and Levy 2007). Levy 2007). and countries (Slantcheva post-communist across education 1 Up to date, there is only one volume edited by Slantcheva and Levy that deals with private higher private with deals that Levy and Slantcheva by edited volume one only is there date, to Up 8 1 The extant private extant The

CEU eTD Collection 8, which also discusses the main points that emerge from the undertaken study. examinedChapterfindingssummedmajorthe Thefrom in country are cases country. powerful forces at the national level in shaping governmental policy approaches in each of impact the analyze chapters the Moreover, institutions. private affect to thought are governmental that policies and countriesselected the in patternseducationgrowth higher private the of examination systematic provide 7 Chapter through 4 Chapters analysis. our guide that hypothesisformulates and based examinationis empirical the methodologicalissues pertinent research,the to presents analyticalthe modelwhich on empirical ensuing the for stage discusses 3 Chapter literature. relevant the the of overview an providing set by examination to is chapter following the of aim The theof Dissertation Plan 1.3 9

CEU eTD Collection in policyin choicesthat different countries pursue constitutes the main justification the of variessignificantly (Rose1973, Hancock 1983).explain needto Thewidedivergences (Western) different them to response face in taken actions the that but nature same problems the of often are major governments the that recognized been has It Choices Policy Public of Determinants 2.2 provided higher education. privately affecting policies governmental with deal that theories the their explores review and organizations literature educational the of part final The section. subsequent the higher in addressed classificationare private defining with associated Difficulties explored. are empiricalreality education and higher aboutthinking the in determining in weight most having factors governmentalapproaches towards higher Afterpowerfuleducation. this, changes both the are which and sector special a sectionafter puts forwardtheories that help to understand what makes higher education The determinants. their and policy public of questions general the reviews briefly followingsection the literature,education higher relevant the concentrating on Before Introduction 2.1 science in the early 1970s (Hancock 1983). The major difficulty in studying what studying in difficulty major The 1983). (Hancock 1970s early the in science political within subdiscipline a as emerged which studies, Policy Public Comparative CHAPTER 2: THEORETICAL FRAMEWORK 10

CEU eTD Collection ruling group ideology is the crucial factor while other conditions such as political elites, Analysis Comparative A his Governments: of in Policies the King and Institutions Anthony democracies, industrial advanced five in services crucialfactor in determining mostpublic policy choices. Analyzing different the fields ofsocial be to ideology assert critics some example, For pronouncements. policy particular of timing and and content the parties influencing in political organizations interest ideology, organized their and elites institutions, political like factors various of importance relative the emphasized have scholars different analysis, their economic of levels developmentvaries greatly.so By employing comparable range a of methodologicalapproaches in with countries in provisions social on spending governmental which in reality empirical for account cannot alone criterion this that consensus general the is there services, social on spendinggovernmental of level the influencenationdoes a wealth of though manythe publicscholarspolicy agreethat of Even grounds. logical and empirical both on criticized severely been has variables economicadvocateanalystsWilenskypolicywho ascendancythe (1975). of Works of ThomasDye (1966), CharlesCnuddeF. and Donald McCroneJ. (1969), andHarold L. economic of levels that developmentrather argued than political factors arethemain determinants public of policy are have who analysts policy the Among services. governmental of provision the regarding choices policy determining in “politics” vs. “economics” of importance relative the around evolved mainly has debate The the explaining in job differences best in policy outcomes. the does one which about literature the in agreement of lack a and variables of multiplicity the is choice social of politics the influences level and scope of governmental provision of public services (1973). the determining in role important less play institutions and groups interest demand, 11 asserts that asserts Ideas,

CEU eTD Collection affecting their choice. those as multiple as are policies implementationof successfulinfluencing factors the that notes Rockman outcomes, their and policies between distinction the underlining policies shouldbe more difficultto change than,for example, foreign policies). Finally, social that conjectures he (thus institutionalization and instrumentation complexity, its on depends also change party-directed to subject more is policy Which policies. well-establishedpopularand policies initiating than existingchangesareaswithless in policies of types changing and to resistance as well as nature costs political greater are there Clearly,themselves. the with do to have factors political Other general more circumstances. and government in durability its parties, other to in relation position its or status power its party, a of characteristic organizational Those include programs. their forward put they can effectively how determine factors of rangeinterplaywidestatusquo, between the a departfrom and risk the take willingto “program emphasizers”, or “opinionwhenevenpartiesarguesare mobilizers”that and are thusand maximizers” “vote are they whether i.e. motives, their to according complex. extremely distinguishesparties sociologyperspectives, politicalhe and choice Employingpublic connection party-policy make that factors endogenous and exogenousnumerous examines and identifies Rockman choice, policy democratic of ideologists (1992).While arguing for thesignificance of political parties inthe process that hinder the policy-makingprocess, notwithstandingthe enthusiasm andeffort party essay controlover policy choices and their ideologies fordetermining- thesechoices, buthis democratic for agents main be to parties political considers also Rockman A. Bert his focus is more specific, that is macroeconomic policies (Hibbs 1977). Employing 1977). (Hibbs macroeconomicpolicies is that specific, more is focus his but party-policy nexus, of issue the with deals work Hibbs’ DouglassRockman, Like Parties, Politics and Democratic Choice 12 , puts an emphasis on those many factors

CEU eTD Collection xlsvl n trs o ihr cocs o rfrne f piae idvdas o ulc agencies. public of individuals private of preferences or choices either of terms in exclusively 2 suchcountries in common was former the that claimed work, earlier his in Schmitter, actors. societal and economic political, high-level among trade-offs and bargaining linkages, policy-making of outcome an as democracies industrial advanced of policy public sees thus 1987) Turner and Wilenksy 1997, Grote and Schmitter 1979, Lehmbruch and Schmitter 1994, Lehmbruch 1974, (Schmitter literature corporatist The 1983) (Hancock a Policy Public Comparative to of subdiscipline rise the within gave shift paradigmatic pronouncements, policy of instigations main the as associations interestorganized view who analysts, policy the of findings empirical and theoretical corporatism started in the early 1970s and has been growing rapidly since then. In fact, most powerful the influence on social policy exercise dynamics. The contemporary groups debate on varieties of interest interpretation, of line another yet to According constituencies political core class-defined their of objective preferences subjective the and interests with economic accordance in policies macroeconomic pursue governments high and parties left concludes, unemployment-low he center-right governmentAs parties.inflationby and with systems political and inflation unemployment-high low between relationship positive the establish findings Hibbs’ particularly, More place. in macroeconomicput policies and ideology their and parties political between correlation positive a finds also twelve and nations American North in and European Western policies macroeconomic examines Hibbs party, ruling a of placement left-right the with relation unemploymentin and inflation of levels on data aggregate olciiis ta niiul n im eis uo oeo-es rglry t tutr their structure to regularly more-or-less upon 1997,p.1). Grote relies and (Schmitter conflicts recurrent semi-public firms their for solutions ready-made and provide to behaviors and self-organized others each about expectations of individuals number large that a exists collectivities states and markets between Somewhere codn o is cnrl cam cnmc oil ad pltcl bhvo ant b understood be cannot behavior political and social economic, claim, central its to According 2 aig a cer dsicin bten “oitl n sae corporatism, “state” and “societal” between distinction clear a Making (p. 1467). 13

CEU eTD Collection huh t sol e add hr ht oty mdld atr otae Western outdated after modeled mostly that, here added be should it Though, countries.Soviet former other and Russia to respect with especiallyappeal,analytical structureswith newpurposes. Thus, the concept of“state” corporatism has gained new bureaucratic and economic persistent and old the of many fill to attempts sporadic have experimented with differentforms of corporatist arrangements,in additionto their AlthoughGrote1997). lacking “appropriate” organizational structures, thesecountries Russia, Ukraine, Belarus and Kazakhstan form the Former Soviet Union (Schmitter and and Europe Eastern Central in from Romania and Notably, Bulgaria Republic, Czech Hungary, organizations. interest of set configured suitably lacked seemingly that those in also but societies, European Western prosperous in only not processes different in concertation countries. corporatist of revival conspicuous the with 1990s, the capitalist advanced in chosen societies. increasingly were policy economic of problems the to solutions liberal more as 1980s, in significance analytical its lost concept the advanced industrialin democracies, affluentandHowever,smallcountries. notably in corporatismconcept analyzeemployedof mostlybeenobservableThe has to practices (Lindblom, Woodhouse 1968). professionalinterests exert ondemocratic policymaking varies greatlyacross countries economic and political liberal, corporatism. The degree of control or that organized groups representing class, sectoral or societal between distinguished further have PolicyComparativePublic of scholars Other (1974). Mexico and Portugal Spain, like as Netherlands, Sweden and Switzerland, while the latter was characteristic of countries phenomenon having recurring historical tendency (1989). tendency havingrecurring historical phenomenon 4 1997). (Schmitter this to generalization exception theonly is ideology, public 3 Austria, where corporatist arrangements under the label of “Social Partnership” were integrated into were integrated Partnership” labelof “Social under the arrangements Austria, where corporatist Schmitter in his “Corporatism is Dead! Long Live Corporatism!” speaks about cyclical nature of the of nature cyclical about speaks Corporatism!” Live Long Dead! is “Corporatism his in Schmitter 3 4 However, the concept has been acquiring new theoretical relevance since relevance theoretical new acquiring been has concept the However, It is important to note that these practices have become central to political centralto becomepracticeshave these that note important to is It 14

CEU eTD Collection literature as powerful policy influences. The presiding discussion has also made it made also has discussion presiding The influences. thepolicy powerful in as literature regarded are that variables of number a outlined has section previous The ProvisionGoods Public of Theories 2.3. term policy patterns. long the on bear to brought influences powerful most be to structures group interest as well as variables political different finds and Europe Western and America North of democracies advanced in policies welfare and health education, public of patterns contrasting examines Heidenheimer politics. public shaping in institutions political makingprocess, Arnold Heidenheimer J. (1973), contrast,in stresses theimportance of policyin groups interest played role indispensable the questioning without Finally, (Schmitter and Grote 1997). among uncertainly transitioneconomic reducing the managing in role active playing and then rather elites, competing elite political national emerging among of agreement members foundational facilitating been have functions immediate their Namely, importance. political different assume they that only but enough, powerful not are groups the that say to not is This counterparts. Western for their than survival, as well as performance, their for governments respective on dependent more are groups these Besides, democracies. European in those from different somewhat are that functions and tasks associationsperform interest emerged experiences,newly evident that there is little agreement among policy analysts about relative importance of 15

CEU eTD Collection the grounds on which governmental provision of higher education has been defended. exploresbrieflysectiongenerated, this has it debate the and empiricalrecentshift this of causes the for account to attempting Before challenged. been has education higher 1992) much of the world, higher education fell under the public dominance (Levy 1992; Jones as well as Europe, in while time, same the at education higher in forms both to way gave separation the where country to only the started is States United systems The separate. gradually fused had century nineteenth the education from higher Only in establishments. naturally blended private and public of elements harmony, church-stateReflecting activities. and life social higher of spheres other in with as education private and public between separation clear no was there Historically, 2.3.1. Market Failure education.higher in sectors public and private of dynamics the on influence having policies governmental different on focus that theories the explores review literature the of education that has been noticeable from the end of the twentieth century. The final part examinesideologicalthinkinghigheraboutsectionafterthe changeThein education. highertowards determininggovernmentalpolicies in influence most have that factors put to is forward theoriesthat explicateliterature whatmakes education a specialthe sector and which arethe of exploration subsequent the of purpose main The deep. equally are education higher towards differentstance governmental of influence that importance variables the about Disagreements determinants. policy of host a 5 In some late-developing societies, in contrast, public education predated private (Levy 1982). (Levy private predated education contrast, public in societies, In late-developing some 5 . It is form the 1950s that the role of the state as a monopolistic provider of provider monopolistic a as state the of role the that 1950s the form is It . 16

CEU eTD Collection to a ‘non-distribution constraint’ that prohibits the distribution of residual revenue to revenue residual of distribution the prohibits that ‘non-distributionconstraint’ a to holds in case of different countries with different tax laws, is that the former are subject that enterprises commercial for-profit from organizations non-profit of characteristic distinguishingmain The education industries. and care health organizations in prevail for-profitsthen non-profitratherprivate why reason main the be uncertaintyregardto also 1973), Krashinsky and Nelson 1963; (Arrow Krashinsky and Nelson and Arrow of works the in roots its have that organization, nonprofit of theories Economic The be seen as substitution for the failure of market to insure against uncertainties. (1963).well educationas to extended specialfeatures medicalof careindustry stemmed exclusively fromuncertainly, becan article, seminal his in made assertion, Arrow’s Kenneth made. been usually has provision education for responsibility state the for case the why reason important and additional an as serves businesswell, as informationasymmetries which exist between consumerand producer in present are externalities While 1991). (Matthews large at society on has citizenry thereforemoneyperceivedgrounds has defended thebeen of benefits educated on that tax-payer general from provision Education society. to yields it externalities the of However, education publicquasi-publicusuallyhas or beena referred as to mainlygoodit. because consuming form person a exclude to difficult not is it and zero not not a public good seeing that marginal cost of its provision to an additional individual is do with a public good character of educational services. In the strict sense, education is rationalesgovernmentalmainthe the for of provisionOne(higher) educationof to has great. great. nonetheless are costs switching but healthcare, in then education in less is asymmetries informational 6 Although medical care is a more extreme case, the two sectors share many properties. The degree of degree The properties. many share sectors two the case, extreme more a is care medical Although Uncertainty and the Welfare Economics of Medical Care, Care, Medical Economicsof Welfare the Uncertaintyand 6 Governmental provision of education thus can educationGovernmental thus provision of 17 that the that

CEU eTD Collection r igie rftmxmzn niis n sm onre, lk aa, nnpoi tts for status non-profit Japan, like countries, some In 1987). (James requirement. simplya legal is institutions educational entities. profit-maximizing disguised are institutions non-profit private often, too that view this with consistent are observations empirical and literature the in recognized is It blurred. exceedingly is organizations educational for-profit and profit 7 of quality and voting and of processpolitical determinedby is quantity goods public governmentalof supply the that argued Weisbrod located. be to likely most are industries these which in countries out single to us enables (1975) theoryWeisbrod’s A. Burton variables, side demand setting by instance, For monopolies. held once governmentalwhereproviders arise good public of providersprivate which in change empirical with deals contrast, in failure, market government on focusing theories economic of set another activities, of types different for suitable most conditions and for-profitorganizationsprevailnon-profit whichand will industriesidentify in to help failure market private emphasize that provision good public of theories economic If 2.3.2. Government Failure comparative gives survival advantage to non-profit organizations constraint over for-profit firms. non-distribution the trust, for substitution valuable a as Serving quality. the downgrade to opportunity the as well as incentive an have to For-profitserviceprovided.the evaluatequalitymonitor organizationsof andthe thusdifficult is it services, healthcare) (or education of purchaser a For consumer. and producer betweeninformation of asymmetry the to due lacking organizationsare Hansmann (1987) emphasizes “contract failure”- where conditions for private for-profit of themajor servicesprovided by non-profit organizationsthroughout the world,Henry ownersthe ofinstitutions (Hansmann 1987, 28). cannot produce high enough profits to stay in business. business. in stay enough to high profits produce cannot latter the that low so is service on demand when situations in firms for-profit over organizations profit 8 Access to cheap labor, private donations and tax exemptions provide additional advantages to non- to advantages additional provide exemptions tax and donations private labor, cheap to Access non- private between distinction the where cases borderline in rich is however, reality, Empirical 18 7 Toaccount whyforeducation one is 8

CEU eTD Collection od hog oenet poiin hl tes dlgt hs rsosblt to responsibility this delegate others while provision, government through goods collective other or education provide countries some why is provision good public of to explainwhatbelieves she unansweredbe to question attempt existingbythe economic theories her In 1989). (1987, quality and diversity quantity, product to respect unsatisfiedpreferencespeople’swith fromstemming alternativesas private of growth and creation the views also theory, Weisbrod’sdeveloped further who James, Estelle differences, assume central role in the development of private alternatives. linguistic or ethnic religious, cultural, to owing preferences idiosyncratic consumers’ meet to residual demandas failure well as differentiated demand about quality ofgoods Public consumedand production. government by met that when be circumstances cannot the differentiation in consumed, be to goods public of kind the about tastes differentiated people’s of point the from expansion sector private of issue the limited of governmental supply. responseto a is sector Further distinguishing between the demand side variables, Weisbrod argued that private ethnic or religion level, education background. income, as characteristics such to respect heterogeneitypopulation the corresponddemandsof with will sector privateto of size hencearise to meet demandheterogeneity ofpopulation. Itexpected is thatthe relative profitorganizations, extra-governmental as providers collective-consumption of goods, Non- goods. public of quality and level determined politically the with dissatisfied consumers some be will there voter, median satisfies government the when structure, voter.median a satisfying level the correspondsto private sector. The major contribution of James’ work lies in setting supply side supply setting in lies 9 work James’ of contribution major The sector. private The assumption implies a simple majority vote model without vote trading. votetrading. without votemodel simple majority impliesa The assumption an excess demandexcess an Differentiateddemand for collective consumption goods in the face collectivethe consumption for in goods 19 9 Consequently, with the given tax given the Consequently, with theory,contrast,by approaches

CEU eTD Collection benefits and high taxes frequently limit the government supply at higher education higher at supply government the limit frequently taxes high and benefits clearlydevelopingtheorysuites societies lowpoliticalpeoplewithwhere coalitions of demand excess findings, James’ to According 1989). of (1986, type services) educational and quality desired for pay to ability the or demand excess for (standing respect thelevel of governmentalsupply ofeducational services was another with countries different by made choices policy that the explaining in indicator important established democracies) industrial advanced twelve developing and eight countries thirty of analysis statistical (notably studies other her and This the of significance utmost the verified have States United the and Sweden Japan, India, Holland, of studies empirical from findings James’ role in determining relative size of private non-profit sector (1987, 1989). organizations. Thus, acting as an interest groups, organizedreligion plays an important non-profit to exclusivelyprovided were those that demand to even and benefits other governmentalandsecuresubsidies to powerimportantly, political and labor, low-cost and voluntary to access asymmetries, semi-captiveinformational against are trust valuable audience, These organization. of forms other with compete successfully But once they are established, the range of factors gives them comparative advantage to profits. maximizing than rather belief particular promoting with rests establishment education an setting for rationale Their groups. interest or political, ethnic, include Others religion. organized is which of important most associations, ideological are elsewhere and States United the educationin providersof private of majority vast the observes, she As countries. differentthroughout sector educational private of studies empirical her in statistically, them testing and side, demand the with along variables 20 religious per-capitaincome variable (1989). variable

CEU eTD Collection o te casc puaitc agmn o eie iest f sca rvsos that provisions social voluntary Namely,non-profit voluntary sectorallows. non-profit achieve sectorcan of diversity desired for argument pluralistic classic the to us brings This alone. sate accommodated the understandings be cannot valuesby and a reflects choice of diversity wide this a that remains Often, point the but views, differing between compromise one. adopt should state the which from society, any in values and views conflicting often and multiplicity a exists there However, beliefs (Douglas 1987). promotejustice andequity importantly,and accordinthey arewith societal values and actions governmental that important equally is it for based, be to ought they which measureon only the not economicis efficiency,good promotethe welfareand should policiesgovernmental that plain quite seems it While economic. an from difference in good political a of concept the defining with associated difficulties general more to issue the complexityof the related has (1987) Douglas James with. deal to harder much proves action governmental appropriate regarding question political general, In services. social for demand unmet apparent an of spite in it, contain intentionally mechanisms,othersdevelopmentpolicywhile varioussectorthrough private facilitate governments some why explaining of short stop provision, good public of theories economic extension by and theory, her However, services. educational of supply governmental of level the determining in role greater play that variables in identifying assist and divide world developing/developed for account thus findings James educational sectors in advanced industrial societies. private of development the for accounts model differentiated-demand while level, statistical significance (James 1989). (James significance statistical have to small too usually is number their But countries. developing in alternatives “elite” developing 10 huh ifrnitd dmn bu ult f gos sple a ev s te rao for reason the as serve can supplied goods of quality about demand differentiated Though, 21 10

CEU eTD Collection for higher education in much of the world has led to significant expansion of extra- of expansion significant to led has world the of much in education higher for educationalprofitmassive 1960s,socioeconomicthe organizations. the Since demand non- of traditions longer has which Japan), (and America North outside phenomenon recent relatively a is growth private the that fact the by explained is This context. U.S the privatein organization of forms non-profit about with concerned is education theorizing of provision the of much demonstrated, has section previous the As Education Higher in Market Mechanisms Encouraging and Shift Ideological 2.4 should bear the costs for its provision are discussed in the following section. who and services educational of distribution equitable the constitutes what of views organizations voluntary to relevance (provided thatthe services they no render are not harmful society to large).at Contrasting has justice of question same the while stateis constrained toprovide benefits anddistribute them equitably among its citizens, beliefs ofonly small groupsof people from compulsorytaxation. More generally, the sector. According to theargument, itinequitable is to finance a service that reflects the diversitythe argumentprovided is religiousby education, usually facilitated privateby operating government centrist jurisdictionsame simultaneously the in and leftist rightist, Moslem, Jewish, Protestant, Catholic, secular, a of combination impossible require would that diversity of sort educational services. The way the term term the way The services. educational of privatization spectacular as well as education, higher of suppliers governmental (Douglas 1987, p. 47). A good illustrationgood of A 47). p. (Douglas1987, privatization 22 is used in the higher education higher the in used is

CEU eTD Collection eore vial o hm hs i oty ahee ruh euaig practices emulating trough achieved mostly 11 is This them. to available resources and funds public scarce of use efficient most make to order in “business-like” more themselves behave to compelled and become often institutions education goods higher services, selling to addition In property. intellectual and expertise education’s higher selling involve may it Alternatively, corporations. commercial and industrial major some for specially employees train to order in education higher of institutions and designed deliberately new of creation even purchasersor public or of private to educationalpackagedservices sale involve may – privatization of form other the - behavior” “Business rendered. services educational for employers or families their of form andstudents by payment is widespread that “tuition” or “fees” introductionof the A privatizationis forms. several take may defined, thus education, higher managementhigh,such as studies, languages computer or technology. Privatization of specializingfieldsthe where offering in costof the instruction demandlowtheand is - consequently entities, oriented vocationally be to out turn often which institutions, individualcorporateprivatetrulyphilanthropy;and creationimplies latter of the while which may involve introducing tuition fees, selling goods and services and encouraging funding,diversified organizationsinstitutionswithof sectorsourcespublic remain but other. the and on enterprise hand private of encouraging one and permitting the on services and assets, agencies, government of selling entail mayprivatization education higher Thus, government. on institutions of dependence financial lessening and practices market-type of adaptation involve that activities government to a private ownership. The term is rather used in a broad sense to describe frominstitutionseducation higher of transfer the implynecessarily not does literature competition and introducing management practices associated with a private enterprise (Jongbloed enterprise private a with 2003). encouraging associated as practices such management education, introducing higher and in competition mechanisms market-like injecting involve that processes

aey h em terms the Lately, marketization n and liberalization 23 ae be mlyd fr dsrbn broader describing for employed been have 11 In the former case former the In

CEU eTD Collection largely conflicting and uncertain results. According to several such studies, investments economic of growthproducedinvestmenttermseducationhavemeasure in of valuein to attempts the However, costs. present to relation with benefits social and private future calculate to analysis const-benefit employs research recent the Consequently, are differences considered to be merely the of a degree (Engel 1984). as education, to applied is behavior investment of logic same physical,the in not capital,human investmentin of form a is it though Even growth.economic of goal the fulfilling in investment of kind a as degree academic views recent The tendencyapplyto is freemarket principles higherto education lately. policies.Market model eroding been has perception that benefits) private and public yieldsboththat good a quasi-publicleast, is at (thatgood publiceducationor good, as regard provision good public of theories economic the If shift. ideological major the accompaniedby been has fields education higher in change empirical major This (Jones 1992) institutions education higher private of growth and creation is privatization of form social coupled with thepersonal interest and prestige. Finally, themost complete is and evident which of perceivably people, of groups specific to notable or large at community the most to responsibility various, be could philanthropy educational behind force driving The services. and research teaching, of purchase indirect an asperceived be can that process the philanthropy– corporate and individualinvolves Furthermore,privatizationoften institutions. educationhigher private with associated in education play central role in long-term economic growth and yield to comparable to yield and growth economiclong-term in role central play education in . 24

CEU eTD Collection oily dsdatgd t es ney mmes o oit. Bsds Besides society. of members needy less to disadvantaged socially more from recourses the of transfer in result to conceived is it as inequitable, seen is money born tax-payergeneral educationfrom higherfinancing addition, In rendered. service the for costs the of share fair their bear should they education, from benefit fully and directly most who students the is it if grounds: ideological on defended thus is parents their and students governmentsto from educationcosts higher shifting politicians and makers policy ofNoticeabletendency unjustifiedluxury. educationas public free increasingly view education higher findings, these by Influenced over the long term. quickonlyeconomic payoffs, whilebeingnegatively correlated economicwith growth yield to activitiesnon-research on expenditureseducation higher found study his But research. organized on expenditures of payoffs macroeconomic long-term and short bothemphasized has context American the in production economic and expenditures the other hand, Jimy Sanders (1992) study ofthe relationship betweenhigher education comparetothose shown by elementary and secondary education (Freedman 1962). On to significant less be to education higher of effects” “neighborhood argued similarly obviousdifficultiesmeasuring the returns,FriedmanwithMilton socialhas of spite In versushighersocialbenefitseducation on (Hansen Psacharopoulos1971, 1973,1992). private of magnitudeemphasizingrelative while education, of levels lower on returns socialeducation, highercomparedespeciallyto when on returns social significance of diminishing the to pointed have that studies other by challenged been have findings These1971). Denison 1971, (Schultz society and individual an both to return of rates Competition increased include education higher in mechanisms market promoting for rationales t eutn resultant its , Economic EfficiencyEconomic 25 nrcus loainadand allocation recourse in Equity Innovation other ,

CEU eTD Collection subsidization of public institutions and foster competition (Engel 1984). over- compensatefor to order (vouchers)in students follow funds which to according mechanism funding institutional introduce and institutions private encourage that favorhigher orfull-cost tuition,loans rather then grants forstudent wellaid as theseas that policies education higher to led have findings theoretical and empirical recent and ideological, the countries, several In education. higher into principles market of injection the of benefitsperceived additional yet constitute permit sectors private that (Jones1992, Hart, Shleifer and Vishny 1997, Dill 1997). 26 StudentChoice and Diversity

CEU eTD Collection eae eair peitd b h hoy hs poe re we xmnn the examining when true proves This theory. the by predicted behavior related ownership differencesin the identify institutions,for-profit and non-profit and private between distinguish to owned difficult is privately often it of Furthermore, hallmark organizations. educational a been have that practices in engage increasingly owned publicly be to continue that institutions which in evidence post-communist the by offered is point this of illustration good A “public”. and “private” as labeled organizationslegally of behavior and nature the about little says status ownership the classificationownership.basisemployed of legalformof However, a a as oftenis too Ownership: types of organization. two betweendifferences the appreciating for enough explicit be to prove will criteria mission of dimensions the along intersectoraldifferences analyze to is institutionspublic and privatecomparing when taken approachcommon for identifying empiricalalso differences between the but two forms of educational “public”, organization. A to opposed as “private” institution an makes what defining for only not difficulties poses blurring This ways. various in state the with linked the legal term “private” encompasses institutions of rather different structure, which are thing one For institutions. education higher private define accurately to trying when ariseemphasized problemsthat multiple has 1992) 1987, 1986c,1986b, (1986a, Levy Institutions EducationHigher Private of Typology and Definition 2.5 eainhp bten onrhp sau n raiainl bhvo f private of behavior organizational institutionspost-communistin countries. Empirical evidence fromregionthe indicates and status ownership between relationship . It must be noted, however, that none of these criterion separately or set of set or separately criterion these of none that however, noted, be must It . the most convenient and relatively unambiguous dimension commonly dimension unambiguous relatively and convenient most the 27 funding, ownership, governance governance ownership,funding,

and

CEU eTD Collection the government constitutes nearly only exception not only among our sample countries but also in the in also but countries sample our among only not exception only nearly constitutes government the 12 to According 1989). 1986b, (Levy identified been demand-absorbing/non-elitehas and elite/semi-elite religious-cultural, is that institutions, private of types principal and Christian) Catholic for demand to respectively responding goals institutional private of types major three identified The has literature 1989). 1986b, Levy 1988, 1986b, 1986a, (Geiger based been have scholars privatewhichsectorclassificationsthe comparisonon one the differentofferedand by Mission inconsequential in the post-communist setting. thedistinction between private non-profit practical, and for-profit formsof organization almost is on focus involving often vocationallythatorientedownershipimportant fields.Whatever is point the status, pursue, latter the that mission distinctive the explains them serve that institutions to directly way own their pay individuals status. legal non-profit with associated benefits financial other or exemptions tax subsidies, governmental for eligible rarely are institutions private communist Post- organizations. educational for-profit of characteristic those into fit non-profit, accountsfeesorganizational why for featuresprivate institutions,of evenwhenlegally explaineddependencytuitionbelow,heavy be on will As non-profittype institutions. for-profit educational organizations widespread in developing countries than to the U.S. organizations. non-profit to closer are they institutions, as specialist oriented vocationally small, being established However, are institutions private often quite that counterparts, the roles they fulfill is still very much constrained by the room given by the state. state. bytheroomgiven much constrained very fulfillstill is theroles they counterparts, 13 region. entire from funding their of most receive and tax-exempt are institutions private religious where Hungary Although private institutions enjoy more freedom in choosing mission to pursue than their public their than pursue to mission choosing in freedom more enjoy institutions private Although raiainl msin i ute motn rtro o intersectoral for criterion important further a is mission organizational :

oemore better better (demand-absorbing) education. (demand-absorbing) (elite types), types), (elite 28 different (ethnic and religious, mostly religious, and (ethnic 13 Respectively, three Respectively, 12 That

CEU eTD Collection oeie eut n flig aaei tnad r ngetn eti ak. For tasks. certain neglecting or standards academic falling in results which sometimes education, higher on demand social all meet to serve sectors public where Finally, 1986b, 1987; Geiger 1986a, 1986b, 1988, James 1987). America,wellas inassuch developedcountries Belgiumas and theNetherlands (Levy been main movingforce behind theearly growth of privatesectors inthe U.S andLatin promotingsome strong religious,cultural orethnic identities. The religious motive has thestate can offer. Such universities arecommonly created with thedistinctive goal of servethoseminorities whodemand higher education types thatdifferentare fromwhat majora provider ofhigher education butwhere niches are left for privateinstitutions to By contrast, due to insufficient resources. developing of countries where governmental supply higherat education levellimited is prestigenotableinfluence. andWithexceptiona Japan,characteristicpatternthisof is lack often that and subjects high-demand low-cost, on concentrate that specialized institutions highly be to tend demand excess to response in grow that Privateinstitutions education. higher on demand governmental social increasing the satisfy cannot where production sectors, public elite academically and selective highly peripheraland private sectors. comprehensive sectors,and privatepublic and publicparallelsectors,restricted public and private mass as such differentiation, public-private of patterns structural basic three the to correspond rationales three the 1988), 1986b, (1986a, typology Geiger’s example, elite secular universities in Latin American countries grew to cater to the to cater to grew countries American Latin in universities secular elite example, comprehensivepropheticalandpublic public parallel public and private sectors Mass privatesectorscommon countriesare the in with 29 characterize countries where the state is sectors are common in countriescommon in sectorsare

CEU eTD Collection f tm. I ai mrc, fr isac, te got a xeine n clearly in - next experienced the Christian, Catholic the serving first was the waves, sequential three discernable growth the instance, for America, Latin In time. of (semi)elite countriesdiverse motives havedriven privatethe development during different periods and religious-cultural demand-absorbing, some point, In expansioninternationally. sector private the for organizationalaccount goals the to come To (Levy 2008, Levy in progress b and c). theseinstitutions often aspire transforming from niche leadership broaderto excellence universities,public tier second pro-globalizationwith Competing norms. and Western pro- with coupled often focus semi-elitemarket-oriented and of entrepreneurial features include category defining The FSU. the and CEE of countries in common especiallyregion,everyincluding is Western almostalreadyin Europe,foundand can phenomenonbut recent rather is MBA, is which for niche usual the institutions, elite Semi- categories.non-elite and elite between in lies which one the education, higher privatesemi-elite is type growing and widespread More U.S. the outside uncommon somewhat is education higher private elite truly that here added be must it said, That politicized and overcrowded public universities (Levy 1986a, Geiger 1988). highly against reaction the as Mexico, in sector private peripheral of emergence the goalsJapanexistin andwas France.perceivedIt “public sector failure” promptedthat academic on oriented institutions private selective such alternative, quality high with studentsProviding competitive. highly is universities public best into access gaining lost its previously elite character. At times, elite private institutions are created because needsof privileged classes seekingelite alternative duringthe times when public sector secular elite and the third – excess demand-absorbing mission. As Levy (2002) has (2002) Levy As mission. demand-absorbing excess – third the and elite secular 30

CEU eTD Collection In fact, institutionalfact, In crucialfundingfurthercriterionsuch a typology is a that higher of funds (Levy 1986b, 1986c, 1987; Altbach 1999). private on considerably draws that sector public having in exception only the nearly is U.S. the that however, emphasized, be should It purposes. other and research the for donationsindividual or foundationcorporate, of form the in funds private receive often hand, other the on universities, Public agencies. public various from research subsidies, while research-oriented and private universitiestax-deductions obtain financial assistance for of the form the in support financial governmental receive usually institutions educational non-profit private U.S. the Furthermore, loans. and grants Unitedthe States where tuition fees forprivate universities areoften backed bystudent and India characteristicof is Japan, funds private and public of mixing of model Another Philippines. include universities private to provide directly that funding Countries governmental 1999). (Altbach funding public-private some display of systems education combination higher of majority the that say to is This area. fairly unambiguous criterion, the most common private-public cooperation exists in this a financeis privately are fundedif publicEveninstitutionswhilepublicly arefunded. organizationsfinance.is Themajor private-publicdifference that is private institutions Finance: identified in most former communist countries. institutionsbedifferentserving purposesof privatecan types “ideal” threevaries, balance the post-communist the of While motivesprivategrowth.threebehind simultaneity the development all the of is characteristic distinguishing the recognized, educationsystems, representingprivate-public mixes, offered by Levy (1986c) based is a further fundamental point for comparing private and public educational public and private comparing for point fundamental further a 31

CEU eTD Collection lhuh budre ewe h aeois ae smwa rirr, Lv thus Levy identifies five main arbitrary, policy patterns somewhat are categories the between boundaries Although sector.private the in enrollments total the of half than less having systems for stands latter the while sector, private the in are enrollments total the of half than less when PrivateMajority financeddistinctive,fromsystemdifferent is Whensources.a further two categories - be can hand, other the on sector, dual A organizations (public-autonomous).buffer and university by or (statist) agencies governmental through distributed are funds public be can sector single A dual. or private-publicblends, identifyfirstto thestep is whether systemstructurally a is single of systems education higher diverse categorizing For are. sector each the for funds sectors,eachwhatcontributionswhatsectorandsizethe of the is publicof privateand following private-public dual the or single of composed on is system given based a whether considerations: classified further and examined higher are taxonomy, systems Levy’s education the to According dimension. single this on precisely Homogenizes , if two sectors are funded very similarly and and similarly very funded are sectors two if , and and Minority Private - - PrivateMinority Statist , summary of which is given in Table 1.2 below: or or are distinguished. The former refers to cases to refers former The distinguished. are 32 Public-Autonomous, depending on whether on depending Distinctive, Distinctive, if they are they if

CEU eTD Collection f te fnig bs o a cnieal ere wud ps ute ifclis for difficulties further pose would degree considerable a to base funding the of involvesdiversificationsectorswithinpublicchanges that placetakingThe countries. post-communistacross variation least is there which on dimension very the – finance on based largely is Levy by offered systems the among differentiation the because is This region. our for power distinguishing less have will categories these systems, education higher various classifying for typology Levy’s of usefulness the Despite Notes: Source: SECTORS DUAL SECTOR SINGLE Policy of Patterns Five Summary 1.2: Table institutions in post-communist countries are almost exclusively financed by private by financed exclusively almost are countries post-communist in institutions Private categories. identified the under FSU the and CEE of countries classifying 2. 1.

Levy (1986c) Levy

within III, IV, V, that, by themselves, would be Statist or Public-Autonomous. or Public-Autonomous. Statist be would bythemselves, that, IV, III, V, within sectors concerns public overlap for The second thananother. of one in category comfortably more a only little a lies case boundary one where forms two is of overlap, overlap: are There fundsthorough private principally both are financed sectors that funds. had And dual nonations private though principally financed is single that has Nosector a nation omitted. are cells empty Empirically • • • • • • I. STATISTI. Chile and NetherlandsChile Examples: HOMOGENIZEDIII. AfricaFrench of formerly Europe, much Western Examples: funded differentlyfunded sectors, two Traditionally function and governance possibly ontradition andthen onfinance less depend nowdistinctiveness and dualism Sectoral sectors as well public as private fundingfor public mostly toward Evolution universities amongand within funds distributing in ministries role of Strong state the received from traditionally Funds universities noprivatelyfundedAlmost Belgium,Canada, most of Communist Nations,

• • • PRIVATE ISMINORITY DISTINCTIVE,IV. America Examples:

33 Public Sector relies Public finance onprivatemostly sector relies Private enrollments 50% of total then less than10% andmore sector hasPrivate finance onpublic mostly

• • • most of Latin most of New Zealand, Nigeria Zealand, New Examples: II. PUBLIC-AUTONOMUS universes between choice allowing universities, funds among distributing in state, and university between organization” or of “buffer university, Important role funding public now predominantly funding, but private-public mixed Traditionally funded universitiesAlmost noprivately

Australia, Great Britain, Israel, Britain, Great Australia,

• • • MAJORITY PRIVATE IS V. DISTINCTIVE, Japan, PhilippinesJapan, India, Brazil, Examples: finance mostly onpublic reliesPublic sector finance mostly onprivate relies sector Private 100% enrollments thanthan 50%less but has more sector Private

CEU eTD Collection started to introduce student loans from the 2000s. Commonly, commercial bank loans, guaranteed by guaranteed loans, bank commercial Commonly, 2000s. the from loans student introduce to started of tendency increasing an exhibit 15 countries all in private tuition. fundingwith state throughsupplementing universities mostly financial base, their diversifying public because is This institutions. public defining for weight less carries status, ownership the like dimension, this institutions, education 14 rather than to institutions directly, and mostly in the form of loans. extending towards governmental move privatefinanceinstitutions, to studentsthoughmostlyattending to them, the show even countries Some downturn. sharp initial the from recover to startedeconomies as increasing been has support financial Public change. regime the following immediately years the during drastically slashed was universitiesgovernmentalpublictoo surprisingthat fundingavailablehardlyseeingto is resources private on institutions private post-communist of reliance extreme The complete almost exhibit institutions emerged distinctiveness on this one of the most important criteria. newly that seeing difficulties fewer poses therefore setting this in institutions private Defining institutions. private tuitiondependency constitutescomparative mainthe characteristics post-communistof fact, In country.every in not and rareinstances regionalpurposes,servetheseare but thatinstitutions private to available are donations, other and buildings of form the in sometimes receive funding from respective that religious groups.Occasionally, public funding, universities mostly religious and co-founders international from support financialreceivinginstitutions semi-elite of number small a include exceptions Other budget.public the from income their of part substantial obtain institutionsfoundation private even but state, the by financed heavily are institutions Church private only not where Hungary by offered generalizationis this exceptionto notable Most them. availableto fundsprivate than other have they do cases rare in onlycontributions and planning to implement low interest, governmentally backed student loan schemes in the near future. near the are in countries schemes loan Both student backed governmentally subsidizer. interest, or low implement guarantor to a planning the being with government banks without commercial and from rate borrow interest can standard students Russia, and Bulgaria like countries, some In universities. public and private accredited at enrolled students full-time to granted are government, the While finance is one of the most useful measures for distinguishing post-communist private higher private post-communist distinguishing for measures useful most the of one is finance While

Estonia, Latvia, Lithuania, Hungary, and the Czech Republic are among a few CEE countries that countries CEE few a among are Republic Czech the and Hungary, Lithuania, Latvia, Estonia, 34 14

CEU eTD Collection aahtn hr h oennemd a endsrbda as described been has mode governance the where Kazakhstan, includeextensively sectors private regulate that countries of examples extreme Most assistance.financial public no receive they when even environment, regulated highly in operate institutions private where countries post-communist some by provided is point latter the to support Strong 1987). 1986a, (Levy regulation governmental public resources, whereas tuition-dependent private institutions become subject of strict on reliant heavily when even autonomy substantial achieve institutions public when examples with rich is however, reality, Empirical funds. state the with overseeingperformance for the need perceived behind the rational is universities obvious public for An control governmental counterparts. public their than governments from autonomy more enjoy institutions private rule, general the As classification. Governance: market (Altbach 1999). labor the changing of needs responsivethe be to comparable to no contrast,needhave in universities, Public environment. changing the to quickly adapt to enough flexible thus and small be to institutionsprivate compel factors these All way. efficient most the resources scarcein their allocate theyrequires institutions that Besides,it pricing. of patterns the and graduates their for market employment the interests, student to theirsurvival depends on the number that of enrolled students makes fact private institutions sensitive The behavior. organizational for implications significant most has As the literature suggests, tuition dependency, and by extension the criterion of finance, Georgia are also eligible for student study loans. loans. for study eligible student also are Georgia state in student for year, academic 2006/07 competition From universities. private the in study to wining choose can (vouchers) students grants 2005/06, year academic the since where, country only the is Georgia universities. public in enrolled those to only apply hand, other the on grants, Governmental aty oenne i h te rtcl maue fr public/private for measure critical other the is governance lastly, 35 little more than a than more little

CEU eTD Collection 16 realitiesalongfourthecriteria, recognized crucialpublic-privatebefor to as wellas as empiricalinvestigating nomenclaturethen the legal and accepting the approach, by up private-publicinductive, an bottom-differentiation use to suggestedis DanielLevy by practice. in organizations educational of types two the between distinguishing for enough explicit is dimensions above the post-communistThe literature,consistentofnone thusthe seeingwiththatevidence is Russia and Ukraine. Georgia, Romania, in measures regulatory strengthened prompt to served has value, dubiousinstitutions,andquality of growth oftenSteepof regimechange. the of years early the of characteristic setting, unregulated and chaotic extremely institutions in private proliferated where region the in countries many for true was This action. governmental reactive strong a invites soon which regulation governmental from freedom complete in evolving start institutions private that happens often It 2002). as termed has Levy what is beyond and region the across been employed for controlling the growth of the sector. Yet another pattern widespread commonly have barriers regulatory and legal other various procedure, accreditation compulsory Besides services. educational of quality to the ascertaining limited and large licensing and by is role regulatory governmental Hungary, and Slovakia, Republic, Lithuania Czech the as such cases, prevalent more and extreme less in However,imposesnumberstudentsalso the (Bess shallquotastrain2000).theyof on but serve, shouldinstitutions private roles the defines only governmentnot the where control state continued and payment private combinationof though still vastly different from private, are less public than they used to be. Accordingly, private- Accordingly, be. region. in the sharp, qualified is but distinctiveness public to used they than public less are private, from different vastly still though institutions, public side, other the on However, market. labor the with ties their and governance their in private quite are institutions owned privately contributions, private from financed Mostly marked. Despite this, more often than not private-public differences in the post-communist setting have been have setting post-communist the in differences private-public not than often more this, Despite 16 One way out of the complexity related to related complexity the of out way One 36

Delayed RegulationDelayed (Tran 2000) and Belarus, and 2000) (Tran (Levy

CEU eTD Collection 17 education will be analyzed in this research. higher private vis-à-vis stance governmental which along and ways significant most inpatternsgrowth private affect to thought governmentalare which policiesof listing the it Below 1997). 1996, (Zumeta1992,multiple are mannerindirect or direct some in education higher private influence governments which through mechanisms The Education Higher Private towards Policies Governmental 2.6 be analyzed and compared how private they are on each of the four criteria. institutionscountry,will each nomenclature legal in institutions identifyingby private educationinstitutions ofa country inwhich they operate. Accepting this definition and owned privately which to according definition 1987). 1986b, (Levy comparison country-to-country for opposed to selectivity, narrowness, focus, and coherence of the former (Levy 1987,1992). (Levy theformer and of narrowness,coherence focus, to selectivity, opposed as ambiguity and looseness openness, breadth, significant exhibit to tend latter The scope. greater a by characterized institutions “generalist” to - organizations public while scope “specialist” limited a to with organizations institutions educational higher private associates approach this scope, of notion the Organizational sociologists offer different approach for resolving definitional problems. Based on Based problems. definitional resolving for approach different offer sociologists Organizational • • euaieFaeokFramework Regulative or proscribes the existence of privately provided education. FrameworkLegislative restrict private sector growth and distinctiveness. encourageor regulationwill and mandate state of extent The regulations. ntttosta that institutions private meet the legal-structural criteria for private higher private for criteria legal-structural the meet is the most fundamental policy that either permits either that fundamentalpolicy most the is includes licensing, quality control and associated and control quality licensing, includes higher educational establishments are those are establishments educational higher 37 17

This study employs the employs study This

CEU eTD Collection • • • • • choice ofstudent private institutions. discourages or facilitates that way the in designed be can and Policies Aid Student oenetl apoc oad xadn ces t ihr education. higher to access expanding towards approach governmental Expansion Institution Public toward Policies Governmental profound implications for private it institutions. regulate has services education higher or public pricing of ignore policy the strategically, governments Whether operate. institutions which in environment competitive creating for used be can that policy GovernmentalPoliciesInstitutionPublictoward Tuition Levels on tuition fees for students and their families who pay them. exemption,deduction and credit policies.They also include tax exemptions Policies Tax student’s choice of a university. toaccording state the institutionsby private at slots study of purchase the as viewed be can policy This institutions. private to appropriations direct and with contracting as such aid) student than (other institutions private Institutions Private to Funding State Direct achieving public purposes).for means important an as viewed is latter the whether education on (depending higher on demand rising accommodating in sector private assists or privatization sector public encourages sectors, public at growth enrollment supports it that so designed be can policies Governmental – facilitates private institution development by means of tax of means by developmentinstitution private facilitates – includes portable student aid grants and student loansstudent and grants includesportable studentaid 38 includes financial support to support financial includes is a potent a is eae to relates

CEU eTD Collection limited to the basic licensing of institutions in order to be established and operate. and established be to order in institutions of licensing basic the to limited large and by minimal, is activity governmental the regulation, to respect with Even collecting and disseminating information about private institutions is usually negligible. or through students and no tax incentives available to them. The governmental effort in sectoraltogether. Thisfundsmeansnochanneled little or institutionsto either directly the ignores hence and education higher in aims policy its achieving for means valued the In Zumeta market-competitive with which states influence private growth patterns, into policy postures. mechanisms,different group to possible is it reason, that For institutions. private to studentandhaveotherprogramsaid through which governmental channeledfinance is on deal great a spend also that ones the be to out turn - institutions private benefits is, states with high level of tuition fees in public institutions – a policy that undoubtedly That 1997). (Zumeta them correlationamong obvious an is institutions, there private for designed purposely not are often and state to state from greatly range policies though even that found Zumeta context, U.S the in policies above the Examining play in a higher education planning process. policy-formation Besides,deniedaccessto to process,role institutionsprivate no have laissez-faire laissez-faire . • sector representative in this process has significant implications for the for implications significant has process this in representative sector Process PlanningEducation Higher in Involvement Sector Private of Extent The sector. n and policy posture, the state has little regard for private institutions as institutions private for regard little has state the posture, policy – governmental choice whether or not to include private higher private include to not or whether choice governmental – eta-ann central-panning are three main policy postures identified by identified postures policy main three are 39 Laissez-faire,

CEU eTD Collection extent and addressing other market imperfections characteristic of higher education higher of characteristic imperfections market other addressing and extent governmentalmodel,certain Underthe this a qualityregulation limitedcontrol to to is aid grants, lower subsidies built into public institution tuitions and information policies. goals,but by means ofemploying market mechanisms and signals like portable student view ofprivate institutions and uses the sector for achievingits higher education policy comprehensivemarket-competitive takes posture policyin state The model. planning faireregime, yetshunning from the detailed state direction characteristic ofthecentral- laissez- the with case the is than developmenteducation higher private in role active more much plays It models. two above the from education higher private towards the In performance with state funds. to appropriations supervising for need the increases direct turn in which students, their to of aid and institutions form the in both incentives, financial using through achieved mostly is This universities. private to roles institutional specific assigning and configurations program designing in even involved becomes state the purposes, public serve institutions private insure to and missions institutional of duplication educationsystem, integralwhichprivate areof partinstitutions.avoid unnecessaryTo extensiveplanningmanagementdecisive centralandin planning role higher playsa of practicingan state Typically,the stance.laissez-faire policy the to oppositecomplete the as stands regime a such words, other In purposes. public serve to roles planned integralpart ofitshigher education system and employs private sectorplayto carefully the In sector, such as insufficient consumer information or inadequate response to particular to responseinadequate or informationconsumerinsufficient as such sector, central-panning market-competitive policy regime, by contrast, the state treats private sector as an as sector private treats state the contrast, by regime, policy policy posture, the state takes entirely different approach different entirely takes state the posture, policy 40

CEU eTD Collection e epoe o body gie or aayi n caatrzn post-communist characterizing in analysis governmental our stance towards newly created institutions. The major difference between guide broadly to employed be identifiedpolicymodels Policy posturesneatly. identified Zumetaby nevertheless can post-communist possiblefit beto therefore not patternswillIt intocoherent way. a in policiestowards thesector still remain flux in and adhoc, often unrelated toeach other public decades, two than less of history post- a had that have institutions seeing private communist Besides, organizations. educational of form non-profit a from organizational features of post-communist private institutionsthat are considerably emphasized different already was It well- practices. and aid history institutional and lengthy student established with context U.S. the in organization of forms profit non- for developed were models these that is remember to point First modifications. and caveats some with although Zumeta, by advanced framework conceptual using analyzed be broadly can countries post-communist across education higher private governmentaltowardsapproach in tendencies salient this, Despite limited.somewhat is FSU the and CEE of these including countries, other to application its and context U.S. the for specifically Zumeta by developed were postures policy Governmental operate. purposely creates competitive environment in whichregime both private and publicthis institutions under state the counterparts, public their to similar institutions private treats posture policy central-panning practicing state the if Thus, them. following funds and cohorts aid student for competition intersectoral encourage to try further funding, enrollment-driven using By performancecontracting arrangementsmarket mechanisms,other and government will system. education higher by needs state the two settings, however, is that while financial incentives have commonly been commonly have incentives financial while that is however, settings, two the 41

CEU eTD Collection Source: James Hearn in Zumeta (1997) Zumeta James Hearn in Source: Postures Policy Governmental 1: Figure towards private higher education in the selected countries. approaches governmental characterizing for shorthand as research this throughout dispositionspolicy - general three found, be to expected not is governments post-communist by adopted policies different among correlation strong though even So, forth. the into model central-planning type U.S. the whereas cell, third the into fall would posture policy central-planning towards lean that nations post-communist those in found patterns two-by-twogovernmental a matrix, frameworkgovernmentalpolicyof terms in policy conceptualize we If region. our characteristicmostly been of mechanismscontrol has direct of use the context, U.S. the in institutions over control achieving for employed INCENTIVES DIRECT USE OF

Regulatory,Laissez-Faire High Low Market-Competitive Laissez-Faire Low USE OF DIRECT STATE CONTROL 42 and Market-Competitive Active) Central Planning Comprehensive (Pro- Regulatory Planning Bureaucratic/ High – will be used be will –

CEU eTD Collection Figure 3.2: Analytical Model suggested by the preliminary empirical examination. those as well as education higher of forms private with dealing literature of bodies different of analysis the from emerge that variables incorporates below model The Model Analytical 3.1 CHAPTER 3: METHODOLOGICAL CONSIDERATIONS process. representatives in policy-making inclusion of private institution public institution tuition levels and public sector privatization, setting public sector capacity and quality, policies towards spending on appropriation to institutions; (grants and loans) and direct such as tax policies, student aid framework; financial policies, legislative and regulative Governmental Policies (IV):

composition of the population. intermediation; demography and ethnic-religious development, political ideology; the mode of interest Country Level Factors (AV):

43 the level of economic Patterns (DV): Education Growth Private Higher

CEU eTD Collection what extent are favorably disposed policies the product of its size and influence? extentdofavorable policies influence sizetheand capacity theprivateof sector andto explore will well-establishedstudy with education systems,higherthe private countries the to compare to region the in less be to expected is viable this of weight relative the Although 1997). 1996, 1992, Zumeta 1987; (James education higher privatetowards governmental stance of determinantsimportant constitute side supply the on groupings ideological different of power lobbying and sector private the of sharemarket the experienceboth U.S. indicatesindeed that The education expansion. higher private behind force driving a as serve will groupings ideological other and policy-makingreligioussupply-side ethnic,exertingprocess, on influence by Besides, turnbring tobear onthe formationofgovernmental policies towards private education. seconddashed arrow signifies thatsizeandthe strength the theprivateof sector willin The markets.competitive with like conditions,demand and supply basic and factors level broad the to respond will patterns growth private the attitude, governmental complete laissez-fairea of case in causalpossiblerelationship. is, That directions a of determinantprivateof higher education growth patterns.Dashed arrows indicate other arethatinfluenced themultiplicityby factorsofnational the at levelserve major the as analysis,governmentalthe modeldirectiondisplaying of the the policiesAccording to 44 to what to

CEU eTD Collection Public Institution Expansion and the Extent of Private Sector Involvement in Higher in Involvement Sector Private of Extent the and Expansion Institution Public Institutions, Private to toward and Levels Funding Tuition Institution Public State Setting toward Policies Governmental Direct and Policies Tax Policies, Aid include study this in analyzed be will education higher private towards stance governmental which along policies Different Higher Education 3.2.2 Independent Variable: Governmental Policies towards Private in size than their public counterparts. thenumber ofinstitutions, as private educational organizationstend tobe muchsmaller inthe share of allstudent enrollments. Itis less accurate to measure thesector’s size in as suggestedby Levy(1986b, 1987). Moreover, thesize of thesector will be measured dimensions of the patternsgrowthalong education higher private analyze will study this definition, this Accepting operate. they which in country a of institutions education higher private for criteria structural those are establishmentseducational which to according definition the employs study this noted, was it As Patterns 3.2.1 Dependent Variable: Private Higher Education Growth Variables Operationalizing and Measuring 3.2 netgto uh a oiy ppr n ea ouet, gvrmna decrees, governmental documents, legal and papers policy as such investigation Process. Planning Education aiu aa sucs i mlyd fr ti at of part this for employed is sources data Various privately owned privately Legislative and RegulativeFramework,StudentLegislativeand funding,ownership 45 institutions that that institutions , , governance meet the legal- the meet private and and

mission, higher

CEU eTD Collection Manifold and interrelated questions pertaining to higher education funding that each that funding education higher to pertaining questions interrelated and Manifold per-capita spending on higher education. education will be tested using macroeconomichigher indicators of GDP, as wellprivate as overall and towards disposition policy governmental on variable this of weight relative The particular. educationcapacityin higher on and general in servicespublic themost conspicuous differences observed ontheis level ofgovernmental spending on of one region, our Across 1992). Australia(Jones and Britain in case the been has as rising cost of higher education and often accompanies economic recession or downturn, highereducation privatization commonly incapabilityandhighresultsmeet fromits to in interest governmental that suggests countries developing from evidence Empirical varied. most is education higher of level some pursue should seek they do cohort percentageage a of largehow corollary of highercountriesits educationallocate to or different do capacityproductive total nation’s a of much how on Internationally, data way. significant a in education higher private towards direction policy governmental development: economic of level The Education 3.2.3 Determinants of Governmental Policy towards Private Higher to funding governmental of institutions, student financial aid and loan schemes. allocation the guide that mechanisms scrutinizing to devoted be will attention Special educationalorganizations. of types both towards accreditation and licensing regarding regulations education, higher on laws national questions relates to the level of funding to higher education: How much of higher of much How education: higher of to funding set of level First the to relates questions way. following the in categorized be broadly can face will country s a fco ht i xetd t influence to expected is that factor a is 46

CEU eTD Collection services. educational provided privately restricting or facilitating for aspiration governmental the into insight further provide will ideology dominant into probing choices, policy a of countries among even wealth. comparable activity governmental of scope the in differences considerable explain to helps This beliefs. and values political wider and society in occupy to ought educationhigher place the perception about prevalent correspondsto complexalsopoliticaldecision-making the it processupshotof and an large and by is leveleconomicthe of development, thepubliclylevelof provided higher education aspirationssocial,for political andeconomic advancement. conditionedevenSo,if by obviously constrained bythe economic reality,but it alsoreflects national ideologyand is nation each by made provision education higher in state the of role the regarding ideology Political education (Jongbloed 2003)? higheraccessible more movementtoward the in role increasedassume sectors private Should donors? and students parents, taxpayers, among shared be can it how and educationhigher of costs the bear should education:who higher in sectors public and distributedprivatebetweeneducational responsibility be provisionshould for the how questionsinstitutions. asksemployedof support allocatingstate to Otherset for be the tomechanism the with concerned is question next The education?higher to dedicate educationnation canafford?a What proportion entireits recourses of shouldcountry a public and private institutions) is another potent factor that is expected to affect the affect to expected is that factor potent another is institutions) private and public intermediation interest of mode The is another potentially important country-level variable. The choice The country-levelvariable.important potentially another is Seeing that political party elites are often the key initiators of initiators key the often are elites party political that Seeing (lobbying efforts by academic professionals of professionals academic by efforts (lobbying 47

CEU eTD Collection 97. Te frt st o yohss etbihs te rltosi ewe the the private growth. between relationship the establishes of hypotheses nature and scope the and education higher private towards governmentalapproach of set first The 1997). 1996, 1992, Zumeta 1999, 1987, Levy 1987, (James analysis explanatory our guide literature education higher private the from emerge that hypotheses following The Hypothesis Working 3.3 demographics and ethnic-religious composition of the population. changing of light the in examined be will thus case country each in dynamicsgrowth educationhigherPrivate tested. be variable will this impactof the sector, towards the particulargovernmentalwith and sectorprivatedisposition the enrollment in of shares smaller vs. larger with countries characterizes what of picture complete a develop population: the of composition ethnic-religious and Demography cover of symbolic legislation. thepolicy-makingunder influenceoutside on and processdetect to order be employedin will possible when observation and analysis record archival interviews, depth in- as such strategies,gathering data Other context. country each in explored be will education higher towards policy public shape arrangements these how and formation policy education higher to interest access of privileged a mode have the groups is which intermediation, What sectors. private and public of influence political governmental stance towards private higher education. This variable refers to a relative 48 In an attempt to attempt an In

CEU eTD Collection entry, private institutions will need to undertake distinctive roles in order to justify their of barriers high are there and high set accreditation are standards and licensing where situations In size. relativelyrestricted in is that sector a institutionsprivatetowards is 2: HYP provide expanded access and deliver the desired diversity. words, a probable outcome of the laissez-faire policy modelother is private sector’s failureIn to students. enroll to capacity of loss ultimately, and curricula narrow more even towards move quality, of erosion in result to likely is which instruction, from increasinglyredirected are recoursesfinancial that means fees, tuition from generated competitiveenvironment. Having fundingno available institutions, to otherthanthose the in survive to struggle will institutions private form, some in assistance financial high-quality, choosea will them high-priceMoreover, strategy.without governmental of few very only low-cost,and levelstuitionvocational low programsstudy offered at However,higherstudenteducation.private demand institutionsmoston onfocus will increasingmeet to education educationmarket,higherfast privategrow providers will higher expanding is there if Therefore, patterns. growth sector private shaping in control quality of absence mechanismsand otherbarriers to entry, market forces the will serve theas dominantfactor In provision. government by unmet left was that demandabsorb application-orientedto serving and mission, practical with institutions vocationallyorientedsmall, in be to likely is growth the but first at rapidly grow will influence.Against thebackground laxgovernmental ofa approach, private institutions political lacks and academically weak is that sector private the is education higher HYP1: existence. Therefore, private institutions in these settings are likely to serve ethnic, serve to likely are settings these in institutions private Therefore, existence. A possible A consequence government’s a of laissez-faire stance towards private A likely outcome of a government taking a strong regulatory approach regulatory strong a taking government a of outcome likely A 49

CEU eTD Collection to further improve the quality of higher education offered. marketsignals rather thanany other factor guide theallocation ofrecourses expected is andresourcesfollowthem institutionsthat the studentcohortsand compete directly to That marketplace. education higher characterizemarket-imperfections which various againstprotectionconsumer performance insure institutionalcharacteristics and about disseminatecomparativeeducational and informationservices,collect of quality some and financial incentive.Governmental policies that avoid detailedregulation yetinsure market new opportunities and occupying market exploring niches because of its high administrative flexibility of capable innovative, and cost-effective most are regime market-competitive the in institutions claim, model this of proponents As needs. market labor the to responsive is that sector private is education higher in approach 3: HYP their distinctiveness and become quasi-public. approach.Private institutionsanextensivelyin regulated environment arelikely loseto and mission of diversity the sustain to ability their restrict responsiveness and market and flexibilityadaptability, institutional their inhibit which controls external informal and formal various to subjectbecome institutions often privateregime, this under But purposes.public serving in success their contributingfor furtherfactor a as serve will educationalWhenavailable, qualityof services.the governmental financial assistance privatetheeffort tosector mayhave benefits extent thethat enhancingtheyto result in regulatorygovernmental Extending missions. oriented culturally other and religious psil ucm f a gvrmn aig aktcmeiie policy market-competitive taking government a of outcome possible A 50

CEU eTD Collection sector also having some political influence. The correlation between the market- the between correlation The influence. political some having also sector wouldprivateexpectsetting,one strongmarket-liberalthis with In political ideology. 6: HYP the party in office. probably significant under this regime, while other likely factor is the left disposition of is elite institutional public of influence political The education. higher on demand the of most accommodates it that so significant, – capacity sector public while high, economic of relatively be level to expected are the per-capita funding education both higher and development education, higher private vis-à-vis policies their 5: HYP leaning parties in power. leftcountrieswith in latter the find unlikelyto is predictable, it less though is policies laissez-faire and ideology party ruling a between relationship The here. intensive equally be unnecessary. expected to and educationalpublicPrivatization servicesis of governmental by accommodated be production, cannot but where any proposed aidtoprivate universities might look unreasonable that education higher on demand high with sector, education higher on spending general of level low with countries HYP 4: country-level and governmentalthe approaches towardsat private higher education.factors various between links causal establishes hypotheses of set next The competitivepolicy orientation andmacroeconomic variables notentirely is predictable, It likelyIt tofind thelaissez-faire governmental policy approach inless wealthy It is expected that in countriesregulatorytowardsleaningstrongdirection in in expected that is It The market-competitive policy regime is expected to be found in countries in found be to expected is regime policy market-competitive The 51

CEU eTD Collection analysis and, for that reason, greater appreciation of the problem then either method either then problem the of appreciation greater reason, that for and, analysis quantitative and qualitative of combination permits it because here posed questions the with deal best to yield researchstrategywill study case The aggregated variables. correlationamonggeneral of analysis the by than particularrathercontexts, in factors interrelated of inspection close by analyzed better are directions policy governmental determinant their and patterns growth education higher private Besides, institutions. privategovernmentsrecordobtained, typicallyof keep not cannot collectand be as do education higher private on data accurate possible, are measurements when Even like). the and efforts lobbying professionals’ academic ideology, political education, dependentthe both explanatoryprivateandhighertypes of model(e.g.the the of sides at variables many quantifying regarding difficulties the to relates first The several. aremethods other than rather study comparative case the on deciding for reasons The Selection and Case Methodology 3.4 sectors in higher education. populationpositivelyprojectedincreasealsobe private correlatedto is of size withthe of rate The variables.demand supplyside and as servebothexpectedpopulation to is of diversity ethno-linguistic that seeing be, education higher private on demand will 7: HYP policies aid benefiting private sector student may face. that resistance expected of because development, economic butthismodelless likelypolitically be is to viablecountries in withlowest the levelof alone would. Country-to-country comparisons can be carried out by utilizing indicators More ethnically and religiously heterogeneous a country is, more intensive more is, country a heterogeneousreligiously and ethnically More 52

CEU eTD Collection linguistic and religious diversity of the country’s population. growth,religioussuch as andethnic, education higher private focused global for vocationally motives Other small, institutions. ‘demand-absorbing’ in been mostly has growth private the universities, countries). four selected in patterns growth private shows below 1.3 (Table share enrollment sector private the reductionin striking a been has there point that However,from enrollments. total that by the academic year of 1995/96 the sector accommodated almost 34 percent of the rapid so was growth private then since and 1991, providedin educationprovidedwas privately for framework legal permissive The dramatic. been has size sector private the in declineensuing the and growth initial the both where country a of example the educationpatterns.highergrowthprivateconsiderable on variancea show countries But tight particular. in the systems education higher and over control general state centralized in legacy communist of much share countries as relevant analytically are settings the whole, the On 2005. until up 1990s the of beginning Hungary Lithuania, furtherfor generalizationsandhere research the ultimately makeintendsare to posedhypotheses the testing for both suitable most be to thought countries four The higher education, on the other. on decrees regulations, laws, various and papers, policy data, interview statistics, socioeconomic descriptive like data, of sources diverse employing by and hand one macroeconomic quantifiabletheof educationperformanceexpenditureshigher and on witnessed some reduction in the private sector size but only relative to the public sector. Only in Only sector. public the to relative only but as terms well. absolute fall in private in sector the theenrollments did Georgia size sector private the in reduction some witnessed 18 soi n oai h onre ht hd eprecd epoie iiil epnin - also - expansion initial explosive experienced had that countries the – Romania and Estonia n and 18 Georgia utemr, wt e xetos o eieie type semi-elite of exceptions few with Furthermore, . The timeline set for the study spans form the form spans study the for set timeline The .

playmarginal Georgia,rolesin despite ethno-the 53 Georgia Georgia Latvia, is

CEU eTD Collection Lithuania Lithuania Latvia Hungary Georgia 01 he ee etbihd b eiiu raiain n ny oe –Lithuania 2001). – one only and organizations Management Internationalof School religious by established were three 2001, by Lithuania in existed that universities private four of Out sector. the of expansion group and sincethen thereligious motivehas served as one of thekey factors infurther religious been the by established has was institution enrollments private first private very The in slow. remarkably increase the that, after Even 1999. in granted In above). 1.1 (Table region the in largest the of one is and enrollments student all of one-third private institutions grew gradually, currently Latvia’s private sector accounts for almost although that is point important Another Latvia. in growth sector private the of bulk the for account motives semi-elite and ethnic-cultural is, That institutions. of types differentqualitatively in and measured more much been has growth the but 1991, in In Source: Countries Four in Enrollments Selected ofStudent share Total as the Enrollments Private 1.3: Table most vigorous initial expansion. initial vigorous most 19 Revealingly, it is larger than that in Romania, Georgia and Estonia - the countries experiencing the experiencing countries the - Estonia and Georgia Romania, in that than larger is it Revealingly, Latvia Lithuania Slantcheva and Levy, 2007. and Slantcheva 19

too, the authorizationthe too, privatelyfor provided education providedwas onearly , by contrast, the authorization to establish private institutions was only was institutions private establish to authorization the contrast, by , 29.7 1999-00 0.1 13.3 12.9 1.3 14.4 13.2 23.8 2000-01 - with foreign involvementforeignEducation(Higherin with - 2.4 20.1 14.0 21.6 2001-02 54 4.5 22.9 14.2 20.5 2002-03 7.0 25.5 14.1 19.2 2003-04 7.5 27.9 13.7 20.5 2004-05 the

CEU eTD Collection complete independence from governmental authorities. Only after the political changes almost in evolved thus institutions Private any government. without the from but support financial enrollments, student all of percent 30 than more accommodate to rapidly expanded sector private the Furthermore, 2002). Chapman and (Gvishiani that evidence ample governmentalenforcing approachlicensingin evenlax requirementsauthorities a took is there However, institutions. of licensing basic to limited was role government’s mechanisms, control quality other and accreditation Absent laissez-faireregime.policy the to closer educationwas higher in sectors both towards regime regulatory the in shift fundamental a marked that Revolution” “Rose called in environment policy The patterns. different somewhat exhibit also countries selected the institutions, education higher private of emergence the facilitate to intended policies governmental to respect With are much less private on finance - one of the key criteria defining private institutions. hereinstitutionsnon-state Thus, counterparts.religious their than extent lesser much a governmentalto upon funding,albeit(foundation) privatedraw institutions also that remarkablefactmoreYetthat almost exempt exclusivelyand tax-is state. financed the by are that institutions (religious) non-state having in alone nearly stands it that which institutions, religious of predominance accommodate more than 40 the percent of all non-state sector enrollments, but also because of because only not region growthof the sectorhas been somewhatlimited. Hungary theis exception in the entire communistrule. the during even and before Lastly, the communistrule. the 21 Hungary. theCase of addressed in are this in context private institutions with defining Issues state.’ 20 Poland is another CEE country where the Catholic University of Lublin continued functioning under functioning continued Lublin of University Catholic the where country CEE another is Poland ‘non- as referred are Hungary in institutions owned privately nomenclature, official the to According Hungary is theonly is country ourin sample where non-state institutions Georgia 55 21 Since the regime change, however, thehowever,change, regime the Since before the changes of 2003 through so through 2003 of changes the before 20 existed

CEU eTD Collection nemday ad pann ois ae ecuiey cmrsd o ulc institutionrepresentatives and serve as main public channels for exerting their influence on of governmental comprised exclusively are created bodies newly planning and other intermediary and councils rector’s where nations post-communist other higher education - include private institution leadership. This stands in stark contrast to of issues central most on professionaladvice of source a organizationoffering expert Both policy-making. education higher in participate actively representatives institution private where region, entire the in case only the almost is Latvia Furthermore, outcomes. their and processes these of transparency the ensured also has government the But high. set been have accreditationprocess and licensing for required base material and closeto themarket-competitive policy regime. Fromthe outset,the standardsof quality Latvia thus Georgia 2007). (Godfrey represents a sharp shift from the laissez-faire banks to the market-competitive policy regime. commercial with cooperation in initiated replacedbythose slidinga on monetary scale. Besides, studenta loan scheme hasbeen been have students few a only obtainableby were that grantsuniform based, merit be Although grantscontinueto tuitionfees.higherowneducation their institutions set to permits it while universities, private and public accredited between choose to grants to foster competitive a environment, new funding policyallows students receiving state order in privateMoreover,accreditationcriteria. and licensing strict meet to need institutions and public both dramatically: changed has operate institutions education higher which in regime regulatory the reforms, implemented the Following making. educationhigherpolicy- in role active an assume governmentto start the did 2003, of policies,often aimedat restricting the entry ofprivate institutions.However, in Latvia, is another example of agovernmental approach towards privateeducation that is the Latvian Rector’s Council Rector’s Latvian the 56 n and h ihrEuainCucl-- Council Education Higher the an

CEU eTD Collection cumbersome. The additional issue for private institutions is that the requirementsfor and the that is institutionsprivate for long issue additional The cumbersome. extremely program study new a establishing for procedure the making centralizedqualitycontrolevaluates studies, thusindividual widerfields of thanrather universities Continental in found historically governance modelcharacteristic ofLithuania reflects governancecentralized highly the noted has team OECD As limiting. large and by remained have accreditation and licensing granted, for those especially governmentalpolicies, was authorization first the after Even existence. their proscribed neither higheron education addressdidnot questionthe ofprivate institutions explicitly, butit qualityLithuanianassuranceTheon othergrounds.butlegal law1991and the on not privateuniversityestablishAttempts disapproved educationparticular.a were to in of liberalizing its higher education system in general and towards permitting private forms this, to contrast stark In tuition of amount charged. the and admitted be to students of number the both determine to free are which institutions, state-accredited at enrolled student tuition-paying any forimplemented been has loans student guaranteed state providing of policy a 2001, since Finally, 2002). (OECD offer institutions private that qualifications the for need the though students, university public perceived is there programs governmentif study certain sometimes for provides funds to apply only grants aid financial State governments.respectivebuildingslocal from of form the in institutionsis availableto aid financial public common most The funding. institutional of source primary the constitutecontributions private other and tuition region, the in countries most in like accreditation are set so high that it is almost impossible for institutions, without solidinstitutions,without for impossiblealmost is it that high so set accreditationare Lithuania ok uh oecuiu prah towards approach cautious more much a took a shifta back tothemost conservative forms of 57 OC 20) ht is, That 2002). (OECD

CEU eTD Collection relevance of the issues involved, the two bodies decide on the fate of individual of fate programswhichgovernmentalinstitutionscriteriaentireStricton and alike.review of the on decide bodies two upon the involved, opinion issues authorized the and of relevance expert their Forming education. higher of issues – AccreditationCommittee intermediarykeytwo bodies - the functionsof educationinstitutions,higher government the central and the between Hungary regulatory policy regime LithuanianThe governmental 2003). policiestowards private institutions closerto are Lithuania Country: by Cost (Student–Parent universities private Lithuania’s in than lower much importantly, and countries other in than lower generally is privateinstitutions for factors key the of one – fees tuition public of level the Besides, year. same the for Latvia in percent 30 and Georgia in percent 56 to compare to students, example, in 2001/02, the state funded 66 percent of university and 80 percent of college For small. relatively is students fee-paying of share the institutions, public in Even shows,privateTable1.1 the sectorAsparticipation countries. limited. continues be to post-communistother compareto funding, to in strongeralso profilemaintained a has Notonly inhigher education governance and provision, but the Lithuanian government quality of results the hand, assessments are not readily available other to the public. the On authorities. governmental from need functionsprivatethat institutions should fulfillfurtherare constrained perceivedbythe financial assistancefrom international or religious donors, to meet them. The roles and process is obscure and non-transparent and does not insure public accountability (OECD 2002). accountability insure public not and does and obscure non-transparent is process 22 As the OECD team evaluating higher education policy environment in Lithuania notes the whole the notes Lithuania in environment policy education higher evaluating team OECD the As presents another case of the regulatory governmental approach. Positioned approach. governmental regulatory the of case another presents .

include include the Higherthe Education Scientific Council offering a professional advice on the most central most the on advice professional a offering 58 22

and and the Higherthe

CEU eTD Collection to empirically test the impact this variable on the private sector dynamics. withtheir varying degrees ofethnic and religious heterogeneity offer gooda possibility considerationunderreasonsnations the Lastly, discrepanciesoutcomes. the responsiblein for the studying for valuable be will sector analysis private their Therefore, of picture development. unlike most the presenting while routs transformation political-economic their with also but past communist the to respect with only not 1990s.recovermid fromthe to started nations three other the of most economies the been whereas painful, has and political) prolonged as well (as transformation economic it’s that sense the in case outlier an political-economicis broad Georgia factors, to respect with Finally, USD per month for five years. 100 about maximum a of loans for eligible are degree first their toward studying age of 35-years under students all needs, financial and status income their of irrespective that, such are 2001 in operation into put was that scheme loan the of conditions The sector. public the in enrolled those were half students self-financed full-time percent 16 all of out 2001, In slowly. relatively growing been has students self-financed of The funding. university number the then sinceauthorization and1996, grantedchargingwasin for feestuition public the Hungarian in part Lithuania, major play to to continues similar government Furthermore, 1999). (Nagy-Darvas difficult extremely institutions private new of establishment the make barriers, professional proposed new programs are based, coupled with far-reaching legal limitations and other Lithuania Latviaandare 59 morehomogeneous four of out

CEU eTD Collection Theaim ofthe first part of the case study twofold. is The first to is explore specificities state and non-state institutions is almost unparalleled in the region. bothfinancing the in retained has governmentHungarian the that profile the Overall, landscape. HE Hungarian the of characteristic salient another is institutions private and state besides category separate a form and government the by subsidized heavily are which institutions church-owned of prevalence post- the fact all In of traditions states. communist HE private longest the of one has communism, predated institutionsreligious private where Hungary, that fact the despite providedis This privately education. then rather publicly through achieved been largely has sector elitistpreviouslyhighly expansionof the that is Hungarian case the to unique is what countrieshaveinheritedthat largepent-up a excess demand fromcommunist timesbut post-communistcharacteristic beenof enrollments has HE in increaserapid A 2008). Vanyolos and (Berde level pre-transition its to quadrupled almost have enrollments Currently, 1997. by doubled already had 1990 in cohort age youth 18-22 of percent steepest the witnessed has Hungary constituted12 participation only that HE rate the that so enrollmentthen sincegrowth Europe. in also but countries sample our of HEparticipation prior tothe regimechange, which was one ofthe lowest notonly in level the is One Hungary.dynamics sectorin HE factorsdistinguish the numberof A Introduction 4.1 1989 up until 2005. Another objective is to give the detailed characterization of private private of and public higher education growth patterns in Hungary since thechanges of CHAPTER 4: THE CASE OF HUNGARY 60

CEU eTD Collection categorized as private, whereas those operated by religious legal entities that provide that entities legal religious by operated those whereas private, as categorized are church and state the than other by ‘maintained’ and founded are that Institutions institutions. church and foundation) (or private the comprises sector non-state the types,institutional Higherof definition explicit more a provides the which 2005 Law, Education to According foundations. by operated institutions private non-state and Church non-state to separately addresses respectively and between differentiates 1993 of Law Education Higher the definition, though.clear the provide not does confusion it Although more poses HE provided extra-governmentally for employed terms of Delineation interchangeably. used are types institutional with connection in by the state are referred to as ‘state’ institutions. In this study terms ‘state’ and ‘public’ Hungarianthe In termsemployedorder. context, in institutions is ownedoperatedand key the of clarification Hungary, in dynamics HE the describing to moving Before 4.2.1. Inter-Sectoral Dynamics System Education Higher the of Structure The 4.2. economic transformation. and political Hungary’s of path the examines study the of part final the education, higher towards approach relativegovernmental shaping for the factors broad-level assess of magnitude to order in Finally, policies patterns. these governmental producing various for responsible scrutinizes investigation our of part second The institutional types along the dimensions of ownership funding, governance and mission. trainingtheology in other fields or aregrouped church as institutions (sections 137and 61

CEU eTD Collection according to Section 139 (1) (1) 139 Section to according acceptance such of attestation the and ideology a or religion of acceptance the admission of precondition a as stipulate may – provision training for budget the religiousits secular or conviction. Private higher education institution unless – they receive funds from mayincorporate inits educational programmeeducationphilosophical, ethicalhigher and culturalknowledge ‘private relevant to as to education referred higher institution’), jointly it may operate as anfor institutions– committed to acertain except religiousentities or secular conviction,legal and– religious subsection by this maintained institutions in listed entities the (hereafter government national a minority or government local state, the by maintained not is institutions education higher a Where (1 137 Section act. legal previous the from missing largely institutions, church involved, and issues private non-state of of account definition the complete with more like for need a is there when especially act, new inevitably the but to dynamics refers education higher on effects its and law previous on concentrates study This 23 itself. government in the from demand, came initiative the student Hungary unleashed to response in academics paid poorly by initiated initial unregulatedprocesses, of result an a largely enrollmentswas elsewhere Whereas the of expansion HE. mass toward movement a is share countries communist post- all nearly that HE over actor, unitary a as state, the of control diminished the immediateofoutcome One enrollments.sector public the remarkablein increase a is intersectoral Hungarian the This distinguishes countries general.dynamicsthe underconsideration regionin from the from and that attribute an apparent makes 4.1) (Tableenrollments HE of evolution the representing figures the at look brief a Even Hungarian context.the in used are they how official to accordance the in terms follow above will the employ study and taxonomy the why is This country-to-country 1987). for 1986, as (Levy well comparison as public-private for as crucial be to recognized criteria four the along realities empirical the investigate and given as nomenclature legal the accept we situations, similar in arise that to complexitiesdefinitional facilitate chapters, introductory the in indicated As crystallized. had that quo status the 139). institutions may provide training other than religious training religious a by legal entity (hereinafter” ‘church higher education institution’). Church higher education educationinstitutionsmaintainedhigher providedby be ‘religiousmay training’) as to referredjointly Passed in 2005, the new higher education law ACT CXXXIX is effective from January 1, 2008. 1, January from effective is CXXXIX ACT law education higher new the 2005, in Passed 23 By classifying institutions this in manner, the new law inactual fact sanctioned ) ) of the new law classifies private non-state institutions in the following way: following the in institutions non-state private classifies law new the of trainingreligious in practice together with studies theologyin (hereinafter 62 (Higher Education Act 2005). Whereas, 2005). Act Education (Higher (Higher Education Act 2005). EducationAct (Higher ”To equate the number of number the equate ”To

CEU eTD Collection 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1994/95 1993/94 1992/93 1991/92 1990/91 Year practicesandthatformatter bears mentioning is policy contemporary the of much on light sheds that traditions HE Hungarian the ofaspect One institutionsincrease.publicfacilitating that of number the in cut major a been has there swelled, have enrollments public while incongruous: sight first at seemdevelopmentscouldHungary’s HE that of trait a revealsFurthermore, 4.1 Table 2008. and Vanyolos Berde in and Culture of Education from theMinistry data Preliminary Source: 1990-2007 T by the government as its own responsibility. assumed was HE to wideningaccess that fact the reflects thus 1990s the beginningof the from enrollments public the in rise steady A 1993. in passed Law Education society” democratic students entering higher education from the appropriate age group to that of developed the communist takeover but was further reinforced after the advent of communism of advent the after reinforced further was but takeover communist the Fragmented(Hrubos 2000).institutional structurealreadyperceptible beenhad before able 4.1: Numerical Overview of the State and Non-State Higher Education Sectors in Hungary, in Sectors Education Higher Non-State and State the of Overview Numerical 4.1: able Statistical Guide, Higher Education 2005/06. The Ministry of Education and Culture, 2006. 2006. Culture, and Education of Ministry The 2005/06. Education Higher Guide, Statistical a Inst. State Institutions 31 31 31 31 30 30 30 55 55 56 56 58 59 59 61 66 66 Students 266 144266 359 758 366 797 363 961 351 154 327 456 300 360 283 970 243 007 224 695 191 291 177 482 157 404 135 695 121 447 113 788 107 607 a mns h eta betvs st frh b h Higher the by forth set objectives central the amongst was Inst. Church Institutions 26 26 26 26 26 26 26 28 28 28 28 28 28 28 26 10 10 Non-State Institutions Students 10 629 24 403 24 078 22 666 21 626 19 821 18 922 17 590 16 227 14 291 12 655 7 154 6 110 3 298 9 005 623 550 63

Inst. InstitutionsPrivate an extremean institutional fragmentation 14 14 12 11 10 4 4 4 1 1 9 6 6 6 6 5 4 Students 34 893 17 343 32 187 33 286 36 295 34 283 30 019 25 729 23 331 22 029 13 195 5 382 2 755 1 129 9 049 179 219 Inst. Total 91 91 91 77 77 71 71 69 68 66 65 62 89 89 90 89 90 Students 169 940 144 560 125 874 114 690 108 376 416 348 424 161 421 520 409 075 381 560 349 301 327 289 305 702 279 397 254 693 215 115 195 586 a

CEU eTD Collection least quantitatively, elitist. Participation rate of about 12 percent at best, in fact, in best, at percent 12 about of rate Participation elitist. quantitatively, least notwithstandingthat theseefforts, Hungaryin HE remained, qualitativelynot if thanat favoringshort-cycle highlyspecialized relevant isprogramspointequity,socialthe on rhetoric.official declared the against verifiedHungary in communism of demise the before well appeared had that studies accesslatter theof groupHEto remains questionable. worth is It noting that empirical contributedenhancing the fact to actual policiesin thesewhich to extent The parents. working-class of children of participationincreased allowing for and needs industrial meeting both for means effective was standards, academic the in falling in resulted held commonly is which sector, non-university specialized highly of share growing differently, Stated Hungary. in manipulations political to subject been traditionally the of ideology proletarian as communistfluctuations the party,did and so admissionin practice policies a hasthat– well as economy planned Soviet of projections Extremefragmentation institutional of structure,thehandwith course, wenthandof in 2002). ofspecialization existed within theeach sector respectively (The Ministry ofEducation between differentiation horizontal from universities( aside that, is complex more decidedly system HE Hungarian the made had what but uncommon, means no by is sectors non-university and university between differentiation of Binary degree higher oversight. ministerial permit to as so ministries different of control the under placed were addition, in they, continued, universities old of separation and established were institutionsspecialized highly new of number a As HE. upon exigencies new placed 24 by point, the to come To Romania). (after Europe in lowest second the constituted The point was suggested byBal point was The egyetem ) and collegesand ( ) á zs Váradi. főiskola 24 Whatever the genuine impact of the strategies the of impact genuine the Whatever 64 ) based on durationbasedon studies, ) of highdegree

CEU eTD Collection owned sector encompasses 26 institutions, 21 of which are colleges offering degreesoffering colleges are which of 21 institutions, 26 encompasses sector owned church- the process,institutionalintegration undergoingthe After body. student total the of percent seven some capturessub-sector the that so slightly, only though terms, Their force. in enrollments,came onthe otherhand, have been 1993 growing throughout both inabsolute of and real Law HE the to Amendment 1996 the since place taking been has diversification than rather merging and change regime the of wake politicalcourse.AsTable shows, 4.2 denominational all institutions thewerein setup country’s the of changes the with along varying been has number their then, Since socialism. state through way the all existence de-facto their sustain to managed have institutionschurch-owned the system, HE Hungarian the of origins very the to back state owned teacher-trainingcolleges were transferred to the church ownership.Dating previously three and then since created were colleges and universities church-owned firstpost-communistthe of countrieshave legalized to privately providedSeveral HE. their for basis legal The Educationwhichmakes1990establishmentHungarythe in Law downonein laid was institutions. HE non-state in growth also some 90s early witnessed the sector, state the in occurred increase the of most though Even 4.2.2 Non-state Higher Education Institution Growth Patterns access to HE and around turned transformation of decade first the of efforts restructuring the of thrust main the why explicable easily is developments,historicalit the of light the in Seen fragmented.extremely as well as elitist was system HE Hungary’s 1989 overcoming institutional fragmentation by institutional 65 integration expanding .

CEU eTD Collection 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1994/95 1993/94 1992/93 1991/92 1990/91 Year by the Hungarian Accreditation Committee and the Hungarian Higher Education and Education Higher Hungarian the and CommitteeAccreditation Hungarian the by and sciences social in training graduate humanities, Central European University on (CEU) is another private university accredited focusing Also sciences. social in founderswas the Hungarian state.The university offers M.A. and PhD leveleducation its amongst institution, private a Although Hungary. and Baden-Switzerland Wurttemberg, Bavaria, Austria, of efforts joint by founded University, Gyula Andrássy German-speaking the was 2002 in recognition state the acquire to university private first The recently. until sub-sector private the comprised colleges only contrast, By own and 2008 Vanyolos and calculations. Berde in Culture and Education of Ministry the from data Preliminary Source: T provide also programs toward M.A. which and PhD degrees (see Appendix universities, 2 for the list of institutions). five and level Bachelor’s the to correspond that following the passing of the special Parliamentary law in 2004, which established a established which 2005 2004, in law in Parliamentary special the recognition of passing official the following gained CEU 1991, in Founded Council. Research able 4.2: Numerical Overview of Non-State Higher Education Sector in Hungary, in 1990-2007 EducationSector Higher Overviewof Non-State Numerical 4.2: able Statistical Guide, Higher Education 2005/06. The Ministry of Education and Culture, 2006. 2006. Culture, and Education of Ministry The 2005/06. Education Higher Guide, Statistical a Inst. Church Institutions 26 26 26 26 26 26 26 28 28 28 28 28 28 28 26 10 10 Students 10 629 24 403 24 078 22 666 21 626 19 821 18 922 17 590 16 227 14 291 12 655 9 005 7 154 6 110 3 298 623 550 enrollm. of total The share 5.86 5.68 5.38 5.29 5.19 5.41 5.37 5.30 5.11 4.97 4.94 4.60 4.20 4.22 2.62 0.54 0.50

Inst. Private Institutions 66 14 14 12 11 10 9 6 6 6 6 5 4 4 4 4 1 1 Students 17 343 34 893 30 019 25 729 23 331 22 029 13 195 32 187 33 286 36 295 34 283 9 049 5 382 2 755 1 129 179 219 enrollm. of total The share 8.60 7.86 7.63 7.88 6.80 6.13 4.63 3.19 1.90 0.90 0.17 0.20 7.73 7.85 8.28 8.87 8.98

CEU eTD Collection taxonomy, why the two sub-sectors should merit an examination in their own right. as least, not politicalinfluence theyThishave. provides additionalan such reason, alongside theofficial and, serve dimensions, they mission crucial funding, institutional other structure, organizational many on considerably church differ and private institutions sector, non-state same follow the that of sections part The although that demonstrate Budapest. outside located are colleges private 12 of collegesspreadare across differentthe country.Bycontrast,partsthe of onlyfour out church 21 of out 12 sub-sector,Churchas the for true mostly is this thoughdiversity, institutions type College capital. the outsideuniversitylocated fact In Budapest. concentratedheavilyuniversities private inare and Church Both size.smaller a of be becausedenominational is Obviously, institutionsthis to institutions tend 4.2).(Table foundation-ownedprivate at studyingpercent 7.7 the to compare to enrolled,students all of percent 5.7 is, that students, fewer accommodate organizations church-ownededucational colleges, and universities both for figures larger the of Regardless status. university have institutions owned Church 26 of out five hand, other the On sector has grown. private as much as is enrollments, student all of percent eight around accommodate thatuniversities two and colleges 12 rate, any At 2). Appendix and 4.2 (Table then since modest been has number their in increase the and 1993 in Education Higher on sub-sectorcomprised privateis colleges, of which wererecognized of four Law the by Hungarian private HE institution under the name Middle States Association of Colleges and Schools of the United States. of and theUnited Schools Colleges of Association States Middle 25

The English-speaking CEU is also accredited by the Commission on Higher Education of the of Education Higher on Commission the by accredited also is CEU English-speaking The ercn Uiest f Rfre hooy Theology Reformed of University Debrecen 67 Közép-európai Egyetem provide more regional more provide s te ol such only the is . 25 The rest of

CEU eTD Collection iacn r ae n te mr eea euain gvrig cuc finances. church governing fundingnormative state institutionseligiblefor church law, are 1993 the According regulation to general more the on based are financing funding, institution Church the basis for financing the two sub-sectors. form which mechanisms on expands follows What relationships.beneficial mutually most while churches, respective the foundationinstitutions are supportedby municipalities from with whichthey have developed comes income of source additional an institutions, Church For forms. different in subsidies state for eligible are and support financial public enjoy sub-types both of institutions deductions, tax Besides Funding Institutional 4.2.2.2 Darvas, Darvas 1999). activitiesperformedother(Nagy- on corporatetaxespay to have they but fees, tuition student and activities educational on beak tax a them give also which foundations, as facto foundations de operateinstitutionsby owned The taxes.paying fromexempt denominational therefore HE, are and organizations on educational non-profit Law as 1993 registered are the institutions to According region. the in elsewhere case the usually is than implications tax its and institutions non-state of status legal the concerning vague less be to appears legislation Hungarian the clear-cut, entirely comprise foundations and church by owned institutions while governmentally, operated and nomenclature, official the to according that noted was It StatusOwnership 4.2.2.1 offer non-religious education and the three colleges under the church ownership that ownership church the under colleges three the and education non-religious offer that universitiesdenominational two the of case In counterparts. state their like just church and and private n gnrl s smwa au. Gieie o their for Guidelines vague. somewhat is general, in sub-sectors of 68 non-state HE respectively.frombeingHEFar state state institutions are owned are institutions

CEU eTD Collection them less susceptible to labor market fluctuations. render institutions church-run to available readily resources public the that is point important the 1999), Darvas (Nagy-Darvas, sector private Hungarian the on writing authors the by suggested as latter, the by pursued persistently strategies lobbying entrenchedthe in relationship between churchstatetheand institutions skilfulthe in or matterNofunded whetherstate. the by are reasonsthe continuousthe for statesupport lie turn in which churches respective the from comes expected, as revenue, their of source major other The Hungary. in institutions owned church and state the apart telling for help little post-communist of the internationallyespecially, setting in is and organizations educational public and private between distinguishing for dimension key a although funding, words, other In sector. state the in than institutions owned Church in state the by funded students part-time and full- more were there altogether 2006, to 2000 from frame time the during demonstrates, below 4.3 Table As state. the from income their of part considerable draw training theological of institutions Even 1999). (Nagy-Darvas, Darvas institutions public to provided that to equivalent is finding normative public of level the purpose, public serve thus and teachers train 69

CEU eTD Collection applying and gaining studentnormative funding, well as as for program supportremain the six allocation units, to be provided to private institutions. As precise procedures for Section 9/H). Thelatter specifies the number of studentaid grants, which forms one of 1993, Law Education (Higher exists state the with agreement”“authorization special privateinstitutionsAccordingly, alsoentitledare normative the to statefunding, though onlywhen a 1999). Darvas (Nagy-Darvas, 1993 of Law HE the to amendments 1996proclaimed the the objectives of to centralfinancial support wasstate the to also but recognition state the to leading procedures the to regard with only not neutrality direct state funding, whichunparalleledis in the entire region.In fact, achievingsector Privateinstitutions, Students of The State-funded 4.3: Share Table church and state institutions. Nevertheless, Table 4.3 above shows that there has beenNevertheless,institutions. has state therechurch andaboveshowsthat 4.3 Table defined, ill privateinstitutions receivemuch normativeless governmental funding than Source: 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 Hungarian Ministry of Education and Culture in Berde and Vanyolos 2008 in and Culture Berde Educationand MinistryHungarian of Total (full and part-timestudents) (fulland Total Institutions 61.62 81.03 82.67 82.84 85.27 86.44 88.11 90.23 54.41 52.97 52.08 53.36 54.77 58.37 State Full-time StudentsFull-time on the other hand, are more tuition-dependentmorereceive are too hand,other they butthe on

Institutions Religious 78.72 79.04 80.83 79.27 81.22 81.86 82.52 64.60 63.67 64.52 62.03 65.14 64.92 65.66

Foundation Institutions in State and Non-State Sectors in Hungary Sectors in and Non-State State in Private 44.55 43.90 42.39 41.53 44.26 46.27 53.89 22.62 20.58 17.19 15.21 15.37 15.29 16.41 70

CEU eTD Collection percentoftheamount charged by 30 releaseon non-state tax and stateinstitutionsreceivestudents bothattend a whodo contingent to future income (Berlinger and Gönczi 2007). Besides loans, tuition paying is which of repayment loans, for eligible are credentials, academic and background social their of regardless students, main all that The is model Hungarian Barr. the of Nicolas characteristic and Woodhall Maureen economists of board international advisory and Bank World the of involvement active with 1998, in down laid groundwork2001.The availableuntilthem developing not to forscheme loanwas the post- across found communist countries, indirect commonly funding that institutions obtain through student loans is was than appropriations governmental direct more for eligible are Hungary in institutions non-state of types both that fact the Despite comes from tuition fees, the level of which is autonomously determined by institutions. foundationinstitutions,therefore,private for income of source main The institutions. supporttodeductionstheir partialtax for onlyreceive they as so, do incentives few to a have latter the Although communities. business local by supported are sometimes governmental pressures.funding, private institutions receive endowments economic from theirfounders and the to due development, sector private in of supporthas been slowly diminishing as municipalities becomeless actively involved privateinstitutions necessarythe as meansregional the for development. thiskindBut view often which municipalities, respective from coming support other or buildings of form the in is institutions private to backing financial state common Most lately. institutions foundation attending students part-time for support the in increase some College has dropped from 16 million HUF in 1992 to 6 million in 1999 (Nagy-Darvas, Darvas1999). 1999(Nagy-Darvas, to in HUFin 6million 16million dropped 1992 from has College 26

For example, the financial support provided by the city of Székesfehérv of city the by provided support financial the example, For state institutions from their taxable income (Personal 71 á 26 r to J to r n adto to addition In á nos Kodol nos á nyi

CEU eTD Collection vdnl, rqieet fr stig u nwisiuin ad ann ofca state recognition official remain the major obstacle gaining for the non-state sector. and institution new a up setting for requirements evidently, andbreath ofthe private sector growth (for list ofinterviewees seeAppendix Quite3). respect to establishing procedures in fact results in the policy that discourages the scopewith sector-neutrality the noted, have policy-makers interviewed As sectors. state non- and state between discriminate usually not does activities, research and artistic, educational, out carrying for necessary resources and employees full-time degrees, academic to respect with requirements personnel, support and students faculty, the laws of concerningset internalorganization operationandinstitutions, of rightsobligationsand ofthe funding, than Other chapters. subsequent the in length at treated be will it and diverge guidelines regulatory most which upon measure the is funding institutionalUnsurprisingly, steered. are sectors non-state the and state the that way foundationto andchurch institutions, little butalsodifferencetherea is concerning the everyeight years.Onthe level offormal law, thesame regulatory rules apply notonly in operate. accredited get to to need them institutions foundation-owned and for church both Moreover, finances, or building personnel, that be means, necessary of possession the demonstrate further shall they and Parliament the from approval the and recognition state gain to required are institutions of types both sub-sectors: two distinction betweenthe no makesEducation HigherLaw the not, than often more that, noted be should sector non-state the of regulationgovernment the to relation In Governanceand Control 4.2.2.3 parents because of the low level of tuition intheir state institutions. and students for implications trivial has policy this but 1996); Code, Income 72

CEU eTD Collection ooeul oinain (n fc dslyn re prt o tlrne i eln ih ohres is otherness” with dealing in tolerance of spirit true “displaying fact (in orientation K homosexual from student theology a of an expulsion concerns distinctivegoals upholding settingtheir enjoyin and institutions church that rule Hungarian the of 27 agencies coordinating two the in institutions non-state and state representation the of as Just university.and state mediating the between in as well as intermediary agenciesplayed directlyin as shaping nature the ofuniversity governance being probed, several otherfactors need to betaken into account. One is the roleof the However,whenempirically an intricate relationship between stateandtheuniversity is through accreditation process was introduced (Nagy-Darvas, Darvas 1999). degreecertain a of control central governmentaluntil regulation the of much escaped church-runhad sectorthe that argued definitemakingassumptions,possibilityis for it little to itself lends evidence existing Although budget. public the on reliance heavy controlauthorityandchurch-run the seemsapplyto theirevenlessto spiteof sector in state orThe requirements. governance, prescribed the organization, with odds at internal when even policy, their admissions in changes initiating in or pursued goals the on deciding in latitude more taking indeed, institutions, private of evidence when theseapply bothto stateandnon-state institutions equally. There empiricalan is even Law, Education Higher the in down laid regulations the by abide to compelled their of feelalways not non-public much channels,foundation institutionsfrom comingdo revenues having Furthermore, fit. them see they as leadership institutional choosing and structure organizational designing criteria, employment and system admissions the defining in freedom relative have they non-state that means which to institutions, apply not do Act Employment public the of provisions strict the all, of First freedom.considerable enjoy institutions non-state where areas are there But suggested byBalsuggested was example through (the purpose public exclusively the to sector service its be church-run to maintained is the money borne financing tax-payer general behind rationale the that is interest our engage should occasion this why reason additional An university). the of statement mission the in contained An incident that has evoked much of the controversy and that may serve as an illustration of the self-the of illustration an as serve may that and controversy the of much evoked has that incident An á zs Váradi). zs á oy Gsa eoms nvriy floig te rvlto f his of revelation the following University Reformist Gáspar roly 73 27

CEU eTD Collection to insure private institutions serve public purposes public serve institutions private insure to rolesinstitutionsto avoidto asunnecessary so duplication institutionalof missions and here question natural The sector. non-state Hungarian the to available funding private than other is quality educational the to contributing clearly regime regulatory strict beside of factor key Another mission democracy. and social society open of with values supporting excellence academic combine to strives CEU intensive research the while goals, oriented culturally on concentrates former the excellence, under fall would Central and - University University Andrássy European - two while fields, selected academic their high in for standards aspire yet mission pragmatic serve and focused narrowly are of category the under fall Hungary in operatinginstitutions foundation private Most 2004). (Váradi 1995-2000 through conducted accreditation, as qualified be demand-absorbing, would change regime the of wake the in established institutions, guaranteecertaina level ofquality ofeducation provided. Infact, only fewanon-state to serve institutions accrediting and establishing for standards stringent expected, As Mission Institutional 4.2.2.4 status (Nagy-Darvas, Darvas 1999). notablyenjoyprivileged still state, probabilitydeep-seated the withthe because ties of certain caveat,witha religious outcomes.But establishments higherlearning,of all in policy determining on influence political their is so asymmetrical, highly is (HESC) CouncilScientific and EducationHungarian the and (HAC)Accreditation Committee related to institutional mission will be explored in the following sections. predict would literature

is whether the g the whether is but they too were closed down as the result of the first cycle of cycle first the of result the as down closed were too they but overnment becomes involved in any form in assigning specific assigning in form any in involved becomes overnment (Zumeta 1992; Levy 1987, 1999). This and other questions other and This 1999). 1987, Levy 1992; (Zumeta 74 elite aeoy tiig fr academic for Striving category.

because of that funding, as the as funding, that of because semi-elite institutions thatinstitutions that arises that

CEU eTD Collection keep strong relationships with industries and businesses, which explains extremely high to institutions for common is It business. information,communicationlanguages, and in studies as such fields oriented pragmatically and entrepreneurial be to out turns commonly too this but focus their choosing in latitude more take Budapest in located institutionsPrivate group. each in students four top to remission tuition full and 3.5) costs,wellas providedas student aidevery to high performing student (with over GPA maintenance and operating college’s towards generously contributed has government local the building, one than more donating Besides plants. sector energy auxiliary and mines of closure the after necessary became which sector, service its developing towards move city’s the instrumentalin been has college The previously. own its of Studies for true is same The tourism. and communication languages, as such sector, regional service much-needed in the training offering to by development contribute to and government local the with ties strong maintain financing founding and in Székesfehérv of governmentcitylocal before,the the of developmentfunctions bytraining specialists relevantin fields.Having hadnocollege sponsoring their students.Institutions inresponse try to fulfillregional andcommunity through aid financial indirect or costs maintenance the to contributing and buildings donating financialassistanceby direct provide institutions privateand (co)founders of become commonly municipalities why is This development. regional the for means regions does indeed suggest that local governments view private institutions as valuable motive: Pragmatic rate of employability of their graduates. It is difficult to generalize for all institutions all generalizefor to difficult is It graduates. their employability of of rate established in formerly mining city of Tatab formerlyestablishedof mining city in The case studies of foundation-owned institutions located in the in located institutions foundation-owned of studies case The J á nos Kodol nos á nyi College nyi 75 . The college, in turn, has tried to tried has turn, in college, The . á the College for Modern Business Modern for College the nya – also with no HE institution HE no with also – nya á r has playedcentralbothhaspart r

CEU eTD Collection religions. For example, example, For religions. other of followers for catering these are there learning, Christian on focuses training theological the of much Although teaching. religious on concentrate predominantly organizationseducational church-owned the profile, traditional their retained Having Church. Reformed the to belonging few are there though Church, Catholic the by established those are focus religious denominationalwith institutions of majority The teacher training (The Ministry of Education 2002). in profile previous the kept have institutions the ownership, in change this Despite 1990s. early the in ownership church to back transferred were that colleges training teacher-institutionsthoseprovidingnon-theological other Among are notabletraining science. political and law technologies, information humanities, as varied as fields P is which of important most non-theologicaltraining offer seven only learning, higher student demand and the labor market fluctuations. Of all denominational institutions of independent ofstudent contributions,institutions are less compelled tobe responsiveto relativelybeing Indeed, them. to governmentalavailableextensivefunding the given surprising,hardly is studiesreligious beyond focus extending their for concern shown really not have institutions church-owned that fact The programmes. work social or training teacher humanities, on rarely only and studies theological and religious motive: Ethnic-Religious institutional capacity (Nagy-Darvas, Darvas 1999). but availableevidence suggeststhat thedemand for mostprivate institution exceeds the ultm Ei uditsuisadand studies Buddhist in HE full-time á zmanyPéter Catholic University that,besides religious subjects, offers instruction in the Gate of Dharma Buddhist College College BuddhistDharma of Gate the hrh isiuin, b otat ocnrt any on mainly concentrate contrast, by institutions, Church Jewish Theological Seminary Theological Jewish 76 provides four years of years four provides that, apart from apart that,

CEU eTD Collection wesi n ut itnt o ht o oenne oh Cuc n private and Church but Both requirementsaccreditation and licensing stringent most governance. to subject are institutions of that on distinct quite and ownership of criteria the on distinct are sub-sectors both of institutions the funding, of on dimension blurring significant is there While education. provided privately towards approachgovernmental the of feature conspicuous another is institutions private and Church both for policies Accommodatingtax institutions. state for that to exceeding sometimes and equaling institutions, denominational for high especially is backing financialgovernmental of level The funding. state extensive of availability is sector non-stateHungarian the of characteristicsdistinguishing main the of One restricted. somewhat been has growth the of pace and scope the change, regime the after soon HE provided privately legalized have to countries first the private of one of is and institutions traditions lengthy relatively has Hungary although that seen have We 4.2.3 Conclusion overwhelming majority of the population is Hungarian. the of language the that givensurprising hardly is whichdiversity,language providednot has sector non-state the that, than Other pursue. they mission particular with related Andrássy be to is and which language, Hungarian than CEU other in education offer University, them among institutions, (private) non-state few a Finally, provides postgraduate specialization in Jewish Cultural History. alsolevels,college the on offeredJudaism in Teachertraining Rabbinical,and Cantor are quite free in their daily activities after obtaining state recognition. This is especially 77

CEU eTD Collection status, profiles, mission and political influence. ownership their in as well conspicuousas governed, and are funded are there they ways but the in variations rates enrollment and number their in only not found be educationalnon-stateto organizations are of types two differencesthe between the formdirecttheof appropriations bothin institutions to theirstudents.to aid Thus,and regional development serve goals, mostly attained through and governmental financial incentives, diversity geographic significant provided have institutions private this, to addition In like. the and tourism administration, business languages, informatics, communication,programs like emergent for demand for cater institutionsprivateto to any major diversification of the course-offerings in the Church sector, it is therefore left Absent training. theological and religious on focus mainly institutions church while labormarket relevant education hasbeen themain thrust offoundation-run institutions, funding renders institutions less compelled to offer market-oriented subjects. Providing sector state the in maintained has government the that scope the Indeed, Hungary. in limited somewhat been has privatization sector public of extent the sector, private with associated usually roles undertaken have students, fee-paying attract to attempt intra-sectoraldifferences. Unlike much of theregion, where public institutions,in their Finally,institutional criterionmission a is around which turnmost significant interand with the state. probabilityregulation,state all Church’s thethe because deep-rootedin of relationship true for governmentally heavily funded denominational institutions that escape much of 78

CEU eTD Collection set o h aks ad t rae cnmc tasomto n emerging in transformation economic was capital human improving at broader aimed project the for grounds a the As democracies. to aid Bank’s the of aspect a launch qualitativelydifferent project ofsupporting to restructuring of the HEselected sector as an integral been had Hungary solid loans, of latter’s re-payer reliable the a as and reputation reconstruction economy‘s long-term relatively Hungarian Bank’s the in the involvement to Owing reality. economic the and Europe” rhetoric with up “catching the between in caught transformation, HE Hungarian of future the for importance greatest of be to out turned footing firmer and efficient more a upon system HE the putting and capital enhancinghuman in financially assist r the to related Hungariandevelopmentsis the of distinguishingfactors notable the of One process became traceable soon after the regime changes of 1989. restructuring the of pace and nature the in differences significant Yet, sector. the of provisioncontentiousthe governanceredefinition whichandin was role stateof the of authorityfacedproblemscomparable questions anda importantmostof nature the and state the on dependence extreme of legacy shared a with nations liberated newly all close parallel to these in other Central European countries. As expected, HE systems of bearsautonomy,institutional and academic on emphasisoverstated in its with Hungary, 1990s early the in initiated reforms HE of pattern overall the that noted was It 4.3.1 Legislative Framework Education Higher towards Policies Governmental 4.3 ad dw s ery a 98 h ua eore Dvlpet Porm Loan Program Development Recourse Human the 1988, as early as down laid ole played by the World Bank (WB) in HE restructuring. restructuring. HE in (WB)Bank World the by played ole 79 The WB’s readinessWB’sto The

CEU eTD Collection restructuring for which institutional integration was perceived as an important tool. important an as perceived was integration institutional which for restructuring its of urgency the and system the inefficiencyof extreme an about a consensus general also was There 1998). (Szep government Hungarian the of concern an overriding was expansion institutional the of increasing means studies, by system conducted HE from the of as responsiveness well as actors, key interviews the from with emerged undertaken has what to According apart makers. tell policy Hungarian to by difficult proven has it often conceived been already had what from experts that Bank the recommendations by offered here added be also should It recommended from the outset. also was structure institutional fragmented extremely with associated inefficiencies alleviate thus and scale of economies reasonable some achieve to – learning higher comprehensive,multi-disciplinaryof institution is, that “universitas”– as termed was fees, private donation orsome other sources of revenue. Finally, developmentof what tuition partial introducing through funding institutional diversificationof the of favor in was Bank was the Moreover, turn objectives. proposed achieving to in key the model as perceived funding normative a of introduction and system financial of economicandsocial needs. enhancingefficiencyHE,the system theincreasing andof responsivenessits shifting the to to access the expanding as concerns such at directed were recommendations policy chief its Hungary, in experts Bank’s the of fieldwork extensive an on Based 1998). (Szep 1991 in operation into put be already could USD million 150 for Agreement Having agreed on those, the primary advice of the World Bank turned on mobilizing on turned Bank World the of advice primary the those, on agreed Having

F undingmechanism restructuring unificationmeans of by 80

CEU eTD Collection o b neetd i odrn oiy atraie. Ised h nelig mtvto eid its behind motivation underlying the Instead, alternatives. policy pondering in interested be to 28 to was Resolution new Parliamentary the this in of down objectives laid program the reform among governmental Important goals. policy HE of clarification example, followed shortly before eventuallythat signing the secondacts WB loan agreement regulatory in 1998. For of number a with dealt were recommendations other of Some mechanism. allocationformula-driven on based largely mechanism funding new a for framework College Police Culture and Education of authority the reinstatingconcernedchange such One considerable. now university entrenched in the legislation, shift in the free way HE sector is steered has nevertheless of been objective the of fulfillment unambiguous supposing from alike” science and arts cultivate to freedom and study, of freedom ensure to Educationwas Higher on Law new provision,the its policymakers found Hungarian its expression in the first law and on HE passed in 1993. experts Bank the by both supported pronouncements policy many successful, overly as judged be cannot scheme the of performance overall Although more equitable system of HE finance. handand encouraging private sector development onthe other, wellas introducing as a one the institutionson public of base financial diversifying the by resourcesnon-state 1990. 29 and larger in replicated later be could (Szep 1998). countries more important geo-politically what experimenting and loan a selling been has involvement Before 1993, the higher education sector operated under the regulation of the Education Law of Law Education the of regulation the under operated sector education higher the 1993, Before According to the most critical view, Hungary was politically too insignificant a country for the Bank the for country a insignificant too politically was Hungary view, critical most the to According h Rslto f Hnain Parliament, Hungarian of Resolution the ) ntttos o E oevr h a salse regulatory a established Law the Moreover, HE. of institutions over all but two ( two but all over 28

81 the National University of Defense of University National the asd i 95 ws amd at aimed was 1995 in passed “freedom of teaching, of “freedom (preamble). Far (preamble). the Ministry ofMinistry the 29 By means of and and the

CEU eTD Collection otiig css u xednl o ee f suet itrs niae ht te itgain of integration the that which fields, technical in training offer indicates to continue schools vocational why reasons interest the are bargaining successful student been of not has level training while low vocational access exceedingly an expanding but for way costs, effective containing an been have could programmes training short-cycle 31 Education2002). Ministry of (the process integration of institutional acceleration further for guidelines 30 clearly articulated. generaleconomic problems the country encounteredthe was much better definedto and more as well as HE to respect with government new the of foresight strategic the the of result the as introduced system. the in educationvocationaltwo-year a was incorporatingof HE of structure four-tier a Thus, system. HE the into training post-secondary of integration the for ground the prepared also institutionscarryto outtheir own merging onvoluntary basis. the conditionselucidated for successful associationthus of institutions and It set the deadlines and criteria for law. previous integrationthe from missing institutional largely was concerning that procedure importantly, very and autonomy, financial and institutional to respect with framework legal patent much provided which Law EducationHigher the Amendmentto 1996 the by followed was Resolution 1995 The and other sources, on the other. institutionsmobilizing byto onehandand the on non-state recourses, including tuition independenceeconomicmore granting efficiencyby achievinggreater allocationsand budgetpublic the for basis the formedownership private or public than rather quality the that so neutrality” “sector assuring at directed was goals of requirementsset Another qualification system. the standardize to and HE of levels different between transferability permitting system flexible create to enrollments, of rate the expand pursue their studies at higher levels levels athigher to theirstudies pursue schools intend but requirements vocational admissions meet relevance, to failed have market who those of labor interest the uncertain serve to continue their of Because profileareas. their high-demand diversify to toward managed schools have cases rare in Only capacity. supply-side the reflects Act LII on Restructuring the Institutions of Higher Education passed in 1999 provided additional provided 1999 in passed Education Higher of Institutions the Restructuring on LII Act Because of the low per-unit cost on which those institutions operate, encouraging the growth of growth the encouraging operate, institutions those which on cost per-unit low the of Because (interviews with(interviews . It has been suggested that institutional interests and interests institutional that suggested been has It . 82

András Semjén)András . 30 The 1996 Amendment 31 Taken as a whole, a as Taken

CEU eTD Collection rudaround turned 1989 of wake the in initiated reforms the of thrust main why explicable easily is it developments, historical the of light the in Seen centralized. part most the for Hungary’sextremely1989elitist, system was by HEfragmented that noted was and It 4.3.2 Governance Structures for Higher Education Institutions these requirements became binding for all HE institutions. cumulativeuntilwascreditpassingnot2005 thatsystem.Butit in HEnew lawon the distinctionlevelsclearsystemwithPhDlinear among and M.A. B.A., a towards moving as requirements,such its implementing started government elected newly the 2002, in Only years. forthcoming the in taken were principles its signingtheBologna Hungary’s by marked was policy-makingprocess in event important another Finally, 2002 by the Fidesz led government. project,contrastin first,thewasto ripeforchange, loanthe was canceled altogether in multi-faculty ones. Despite the fact that the circumstances leading to the second reform although unchanged, almost single-purposeintegration of institutionsthe into to given was weightsomewhat more remained Bank the by proposed objectives policy the respects, various In 1998. in signed was loan WB the of agreement second The reforms in HE field but in general, restructuring attempts of other spheres of societal of spheres other of restructuringattempts general, in but field HE in reforms ntttoa uooy xaso n ntttoa integration institutional and expansion autonomy, institutional declaration1999inbut hardly anysteps towards fulfillmentthe of 83

and introducingand o just Not . unitary

CEU eTD Collection the interests of more articulate and better-organized interest groups. of constellation the heterogeneous,reflecting more deal good a became field making policy- change regime the of beginning very the from Hence, shape. the taking still conceiving themselvesas potential gainers or losersof aproposed restructuring scheme those of number the also but intermediation and revelation interest of mode the just changestouchednotThe discernible. easily more considerablethus grewprocess and policy-making in matters HE in interest vested with agencies government and actors differentsocietal of input the state, the involvementwaning of a with Along process. Hungaryin animportantin respect. The change concerned themode policy-making of governmentalnevertheless visiblysteeringalteredapproachof has patternoverall The always abide by its novel rhetoric with regard to the HE governance. not did instruments steering other and regulations rules, governmental that remark to suffices it now For followingchapters. the extensivelyin dealt be will and factors financial of deal great and a of analysis institutional close requires about brought reforms academic, early that autonomy of question The order. political previous future-orientedratherconcernedthan reparationwiththe damages the of causedthe by more become agenda policy on issues dominating that 1990s mid the after only was It Humboldtian2003).(Neave tradition to return and practices past the with away do teach and freedom to learn’ in newly instituted reforms of HE field thus was twofold: to ‘freedomto objectives prominence givingof Rationaleto for Europe. of rest the with communisteffectsof practices, restoringpreviousreinstating tiestheorderand old the reparationof described as be countries, can CEE other many Hungary, like in activity 84

CEU eTD Collection a rcamd b h 96 Aedet A s a sl-oenn oy whose body self-governing a is HAC Amendment, 1996 the by proclaimed was it membersresearchAsand hand institutesof one professionalother. and the on units the on representatives college and university include also members Its fundamental.most the is provided education the of control quality possesses HAC that powers the among hand, other the On institutions. entire of also but programs individual of uponsignificance andrelevance ofthe issues involved,HESC dictates thefate notonly opinionauthorized and expert their form they As governments. local and association professionalcouncils, researchinstitutions, by professionalselected academic other and matters on experts include HESC of members The development. HE of issues twokey intermediary entities include offering professionala advice on themost central Positionedcentralfunctionsthegovernmentbetweenthe the of institutionsHE, and of Accreditation Committee other two instituted intermediarybodies – law same The 68). (section 1993 in Law Education Higher Rectors with together actors two the of role The developments. institutional of future the on concerns collective their negotiate to channel main the include as that college-directorsserve and rectors institutions, agencies HE different the coordinating of representatives two the institutions, For pronounced. more considerable footing as the shift toward relatively relaxed state control over HE become Directors College of Conference the Both, prominent. most seem faculty senior of bodies two priorities, policy the deciding on claims having actors all Of decisions are not to be influenced, let alone overridden, by the ministerial authority. (CUR) as agents in influencing national HE policy was legitimized by the by legitimized was policy HE national influencing in agents as (CUR) theHigher Education Scientific Council (HAC). the Hungarian Rectors’ ConferenceRectors’ Hungarian the (CCD) were founded before 1989 but gained but 1989 before founded were (CCD) 85 the Chair of Art University Art of Chair the (HESC) and (HRC) and (HRC) theHigher

CEU eTD Collection emerged in the course of the early 90s over various policy proposals, I resort to Attila Sz Attila to resort I proposals, policy on various thesis over 90s early the of course that actors the different in among emerged conflicts heated and debates public discussing when Thus, issues. these of coverage media the and papers policy various into probe to ability my constrained it elite, policy the 32 the unity of teaching and research was ultimately instituted. political some and and factions, it was not until passing 1994 Law HAS on theHungarian Academy of blurring Sciencesthat the of bargaining, that with political concerns educational of of compromising subject become having that remarking beyond lobby” “academy as known be to came what developments the of details the teaching of andresearch were met with outright hostility from shall HAS. I notpursue inthe wake of collapse of theSoviet system. In Hungary, such proposal for integration communistregion the legislationscountriesmanypractices, embarked by in of was on of reparation toward step important further a as again research, and teaching together Bringing power. and authority of points countervailing and competitive as stood always had science of academies titles, academicawarding of prerogativehaving and institutions from Detached HE. of establishments to function research the repatriate goal. policy very this implementing over WelfareSocial and Labor Ministryof the between that was saw 90s early severeconflictsthe the that of one that, to prior that hereadded should be also it But establishMinistryEducationsystem.HE theunified of to the control was over of Law 1993 the by about broughtgovernance structure HE the in shift important Other interviews with the key policy-makers that he has conducted. I also rely on recollections of the of recollections on rely also I conducted. has he spoken I with. have actors dominant that policy-makers key the with interviews Hungary.” While the lack of knowledge of the Hungarian language did not pose any problems to interviewing to problems any pose not did language Hungarian the of knowledge of lack the While “The Role of the World Bank in the Transition of Higher Education in Eastern Europe: Eastern in Education Higher of Transition the in Bank World the of Role “The e i un das o ht n te oiy ppr, mda cvrg, ad in-depth and coverage, media papers, policy other and white on draws turn in He the Ministry of Education and CultureEducationand Ministryof the and and 86 32 t poe vn mr rbeai to problematic more even proved It the Ministry of Agriculture Ministryof the on the one hand and hand one the on on the other the on é p’s MA p’s

CEU eTD Collection h ugra oenet ad aogt H edrhp t xad te lvl of level the expand participationpostsecondary in to earlyreforms. education the broughtbearon wasthat to leadership HE amongst and government Hungarian the privateandpublic providers. emphasizedAs resolutebefore, wasa determination it of between provision HE for responsibility the of distribution the for implications their fundingHungary scrutinizepoliciesandof naturein to the followswhatis of aim The 4.3.3 Higher Education Funding Policies changing governance structure a of institutions. in body student the by occupied locus the an of strengthening highlights incredible recovery cost to related issues demonstrate, will below section the As votes. winningtheir and students’swayingstance for involvedparties by wielded too all Council frequentlysituation the a whenmostissues dividedthestrongto giverise pressureson are in stake influential an possessing students employees. of non-academic representation some and academics senior membersinclude Other number. total the of third one exceed cannot but fourth one than less no be shall – institutions HE of body governing the is that - Councils Institution in representatives student of share the it, to According process. decision-making internal in students of participation increased legalized also Law 1993 The level. Doctorands of NationalConference Studentof Self-government policy-making processacquired legitimatea basis in 1993 when two student bodies the in partaking actively stakeholders as students of role novel fundamentally Finally, that the management of university remains in the hands of purely academic professionals. professionals. of purely academic thehands remains of in university management the that seeing yet success apparent no with but agenda policy reform the on objectives chief the of one been 33 Separation of academic and management functions for creating more responsive governance has governance responsive more creating for functions management and academic of Separation (NAD) were authorized to represent student interests at the national the at interests student represent to authorized were (NAD) 87 (NCSS) and the (NCSS)the and NationalAssociation 33 hs heavy This

CEU eTD Collection objectives and with institutions’ having no discretion to make use of recourses in recourses of use make to discretion no having institutions’ with and objectives funding models, continuedto be for themost part different of attributescontainingsomethough funding, public of system speaking,the Generally 1995. January the from force in came that budget HE the unified MoE, institutional formula-driven institutionsHEsupervision the twounderthe of but placing all by also, it funding and largely a established that 1993 of Education Higher on Law the by provided was mechanism funding new a for framework Regulatory very importantly, the bargaining power of institutional representatives. large determined by the previous year’s operational cost rates, standard increments and, and by governmentalwas appropriations the that of level actual the to relevance little Parliament(Nagy-Darvas 1998). Asexpected, institutional performance indicators had relevantministries, negotiations withMinistry the Finance,of andfinal approval theof the guidelines,of budgetaryproposals the of approval state the as such stages several involved institutions for appropriation budgetary on deciding of process ponderous thetransparence,Lacking Hungary. in institutions HE for finance state the for basis negotiationsbargainingand institutionalratherthan performance indicators formed the with coupled spending of history a rule, communist under countries all to Similar education otherwise ondivided on various aspects of the experts restructuring scheme. and leaders institutional bureaucrats, politicians, by contested actually been never has HE of funding shallas well as provision state the in profile the strong its maintain that idea the communism, of collapse the following immediately willonlyadded beIt herethatamid disagreements already perceptible during yearsthe accordance to their needs, funding thus reflects social and economic needs of the nation 88 centralized. Beingtargeted atcertain

CEU eTD Collection The key features of the funding model established by the 1993 Law and its 1996 amendments its are summarized in the Tableand 4.4 below: Law 1993 the by established model funding the of features key The and in certain cases –on the labor market projections (Csepes, Kaiser and Varga 2003). institutionalcapacity,demand, student contingenton is and decisive is admitted be to by and large into considerationperformance-related factors to a certain extent,the base of fundingis take does Althoughit policy-makers. governmentauthorities and the by perceived as input-driven where judgment of the government on the number of students 89

CEU eTD Collection Funding Condition Funding Base Funding Channel encouraged the most efficient use of recourses. not had made initially allocationswere which to accordingcriteria that argued be can both initiating and further strengtheningto the vital changes inimportant the Hungarian HE system, but it an was indeed mechanism funding formula the of Introduction or the program quality. enrollmentmaterialexpensesthan ratherlevels as well as supportstaff and faculty for suchtiedtoconsiderations be to numberthe as contactof hours, theamount salaries of financesremainrule, a as but, well, changing as been havenorms numerical of values establishing for considered indicators of number and Methods HE. of development the for programs basic and research scientific development, program facilities maintenance, and education the students, for support normative are These fivecategories. only included it later items, budget changes, of number a headings. undergone budget Having different 14 among distinction a made Law the Initially, field. institution andof type a studentsenrollednumberby correlatedof the primarilyare to or rates funding The Source Hungary in Funding Employed Model Education The 4.4: Higher Table the formula and actually received by institutions( received formula and actually the by calculated amount the between difference considerable a to pointing evidence empirical compelling 34 nfc,teetn owihfruafnigi is funding formula which to extent the fact, In : Csepes, Kaiser and Varga 2003. and Csepes,Kaiser : ‘education and facilities maintenance norms’ maintenancenorms’ facilities and ‘education Both ‘admitted’ of number the fixed bythegovernment. centrally students well; as elements based Input-based government the directly. by subsidized are providers HE Supply-driven earmarked hog ih sm efrac related performance some with through ) rcs oine (ahrta than (rather oriented cost or a poe t to opposed (as and lump-sum Semjén 90 normative 34 The fact that state-run institutions had 2003). funding. demand-driven remains subject to a nuance. There is There nuance. a to subject remains output- ) i.e. )

as it is referred to, referred is it as

CEU eTD Collection Mostof the public HE institutionsinHungary hadcontinued todraw almost all oftheir been lesssuccessful as the notionof cost recovery has remainedpolitically unpalatable. have HE to appropriations government the of into level the put lower to attempts to operation, hard practices cost-sharing made has that considerations practical of numbercost-sharing. Besidecontroversyof a issue of the dealgreattriggered is has a that fundinginstitutional to related questions thorny and contentious most the of One speak, to so bodies, student select qualitatively less different inputs. a with start colleges that and fact universities the to but reasons, performance-related institutional other or incentives implieddeterioration quality of someto extent andnotnecessarily owinglack theto of already time years few in twofold rate participation the increasing through HE mass the educational output, it should be stressed that the very policy of moving from elite to of quality the unambiguousof assessment offer to seeking Without believe. to come haveexperts many provided,servicesas the of quality academicstandards and falling possiblemanystudentsinevitably that as enroll as resulted to basesininput funded on productivity. increase and costs contain to incentive little a had case, the is generally as institutions, state disbursement, public the of level the on deciding for numbers student the with along more recourses utilizing for performance-related indicators some for allowing and before Furthermore, economically. efficiency their enhancing for ways the seek themshunto bankruptcy has notcreated situationa which would compel institutions to allow thus and deficits the cover to support governmental receiving of advantage an quality implies that amount of grants will largely depend on the bargaining power of individual of power bargaining the on 36 depend largely will grants ( leaders institutional of amount that implies quality 35 The point suggested byBal point suggested The Introducing some performance-related indicators while having no objective means for assessing the assessing for means objective no having while indicators performance-related some Introducing Semjén 35 Quite the opposite, it was in the interests of the institutions the of interests the in was it opposite, the Quite 2003). á zs Váradi.zs 36

CEU eTD Collection policy was precipitated by the Prime Minister unilaterally without taking into account position of position account into taking without unilaterally Minister Prime the by precipitated was policy 37 to continue also students full-time but state the by subsidized fully they are only Not students. full-time for high somewhat is places funded state of share the that shows somewhat.growing been has state the by supported not students educationalservices,1996 Amendment.grantedthe numberwas Sinceby then,the of by set standards lower individualinstitutions, provided thatthey alsowere willing and could meet meet thecosts of nonetheless could who but places state-funded for The admissions the requirements complywith to failed had who those admitpermission to 1990s. mid the in Hungary immediatelyin established years was change regime the the following in introduced have countries post-communist all nearly that state the by funded those alongside students self-paying admitting of policy The programsfirst-degree in the state-led sector,the as pledged prior to the elections.for fees tuition nullifying time this again, once Law the amended government elected newly a when 1998, in reverted further was base financial of diversificationtoward course The supplementary fees. higher charging from refrained permissioninstitutions, obtained,state the despite protests that same the to owing was triggeredhave organizedit, It countrytraditionopposition lacking students.anyof by a instruction,in of cost real the negligiblecomparedto if even fees, tuition impose to by charged amount foundationcolleges (World Bankshould 1998). surpriseIt notcomea as that attempts the of to1/6 1/7 roughly constituted then which institutions, 1995) in USD (180 HUF 000 20 about of tuition annual the granted, initially was authorization the When plan. Bokros the of pressure the adoptedunderfirst was feestuition of policy a when 1995 until state the fromincome time self-financed students it comes to roughly one-third of that (Kozmaa and Bojda. 2003). Bojda. of(Kozmaa and that roughlyone-third comes to it students self-financed time 38 Setenyi). (interviewsJanos sort some with of of tuition idea the favoring all Fidesz, with associated experts and Education of Ministry the leadership, institutional As interviews undertaken with the policy elite have made it clear that the decision on the shift in shift the on decision the that clear it made have elite policy the with undertaken interviews As The annual tuition fees for self-financed students range between 1 500 to 4 800 USD, while for part- for while USD, 800 4 to 500 1 between range students self-financed for fees tuition annual The 92

for all students all for 37

38 Table 4.5 below 4.5 Table was set by set was

CEU eTD Collection faculties of hospital services (The Ministry of Education, 2002). medical by obtained was it of part largest the but services and goods of sale the from derived was system HE to available money all of percent 15 some 1998, in example, For modest. remains contributions non-public of level the mechanism, funding the and services. But, as incentives for diversifying financial base are largely missing from goods of sale the from revenues generating towards move the been has there though region, the in elsewhere like Hungary, in universities for money borne non-taxpayer Incomegeneratedself-financedfrom thestudentsconstitutesimportant mostof source 2008 Hungary in Institutions State Students at of The Self-financed 4.5: Share Table financed students (Csepes, Kaiser and Varga 2003). state- full-time of percent 40 around accommodate that for dormitories subsidies institution-run provide to continues state the Finally, needs. financial of basis the distributeduniformly andothersin relative academic to achievement but only rarely on is support student cases, some In unions. student with jointly institutions individual by made is admitted students state-financed full-time, of number the to proportional is that and receives institution each that support normative student of distribution the receivestatefinancial support stipend.form Thethedecisiona in of the criteriaon for 39 In fact, since 2003, new dormitories have been have constructed. dormitories since 2003, new fact, In Source: Source: 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 Calculated from Calculated Full-time Students

Hungarian Ministry of Education and Culture Data in Berde and Vanyolos and Berde in Data Culture and Education of Ministry Hungarian 18.97 17.33 17.16 14.73 13.56 11.89 9.77

Full and part-Full time studentstime 38.38 45.59 47.03 47.92 46.64 45.23 41.63 93 39

CEU eTD Collection the student loan scheme to get implemented. Balázs Váradi has related this delay to wide-ranging to delay this related has Váradi would the start from loans of the Availability leadership. sector public Balázs by pursued strategies protective implemented. get to scheme loan student the for agenda policy the on being of years ten than more took it why understand to as so extent the to not 40 down. closed has program no date to fact, In prospects. employment market labor limited haverisen sharply, institutions continued offerto instruction number a in fields of with sciences,social in mainlyengineeringdecreasedothers,significantly, have whereas in as such fields some in enrollment rates that fact the Despite change. the resistanceto persistent demonstrated have institutions HE employability, market labor to respect economy.reorganizecourse-offeringsWith the their to of slowtowardsneeds shifting Availabilityofstate funding perhaps explainswhy Hungarian universities have been so spurred, the government was compelled to raise it back to 6 percent. had rate interest low exceedingly that effect unfavorable the mitigate To business. startingprivate for advantageousloans take it found manyto thatextent the expertsto Economics’ LondonSchoolof the by repaymentconditionsoriginal schemeset of the in that keepingnotable the promise made before theis 2002 elections, the SocialistIt government modified2003). Bojda. and (Kozmaa loans such of use made students all the of percent 30 is studentsthat 000 110 2002, Alreadyin years. 5 for month per loans for eligible are degree first their toward studying that,irrespective theirincome of status andfinancial needs,students all under 35-years operation. into put been has scheme further implementing a means testing mechanism, it is only since 2001 that student loan difficultiescost-recovery, associatedthe devising and policies with of to owing for As Enrollment level in absolute terms remains unaffected even in fields with low student demand and demand student low with fields in foster even unaffected remains and terms absolute in growth level Enrollment sector private the encourage 41 choice, student education. sectors two higher in the between competition enhanced unmistakably have If the structure of supply has nevertheless changed it is only due to newly introduced courses. introduced newly to due only is it changed nevertheless has supply of structure the If is that it argued real, was mechanism means testing with developing underlyingdifficulties Although 41 To recall, enhancing the responsiveness of the system previously driven by driven previously system the of responsiveness the enhancing recall, To 40 The conditions of the loan scheme are such are scheme loan the of conditions The 94

of maximum about 100 USD 100 about maximum of

CEU eTD Collection prospect (Nagy-Darvas 1998). employment clear no with fields for alternative attractive less a with left are choice their of programs demand high into getting for scores unsatisfactory with students popular. least the among are programs training teacher and agriculturaltechnical, offering institutions while economics and arts humanities, law, below,demandhighesttraininginstitutionsthe 4.6 the was for in offering education in Tablecontained dataevidenced in by training As program capacity. the dependent on largely be to remains places of supply projections, market labor the reflects demand student While dynamics. enrollment an in role marginal play to continues choice student as time same the at centrally, determined is admitted students of number the that fact the in unresponsivenessinstitutional resides for reason One agendas. policy reformboth the of top dramaticthemacro-changes the centralplanningat beento had available are usually limited for arts programmes to start with. programmes for start to arts limited usually are available 42 market (S thelabor to relevance dubious That student demand is so high on arts programmes is perhaps explained by the fact that study places study that bythefact is onarts explained programmes high perhaps so demand is student That emjén 2003). 95 42 As it often happens, often it As

CEU eTD Collection supply-driven character of the state-financed HE sector. the highlight providers religious of number overwhelming the with together training Darvas1999). Onthe other hand, sheera lack ofindication for demand for theological administration, and (Nagy-Darvassupplyside information the andtechnologycapacity of exceeds the still management business law, as such programmes for demand theologicalsuggeststrainingthan thatotherprovide Churchinstitutions those that and foundationprivate for demand Spectacularin growth focus.technical their kept have rest the high-demandwhile toward profileareas, reorganizing their succeededin have schools of share small only because is This successfully. too not albeit system, HE serviceswhichinvolvedweremade i In theearly 1990s, some steps toward altering thestructure of the supplyof educational Source: 1996,Hungary 1992,1995and in Institutions of Quotas, byType theAdmittance above Received of Applications Percentage 4.6: Table Total Military Health Care Agriculture Technical Art State Admin.& Law Natural Sciences Economics Teacher Training Humanities InstitutionType of Polonyi1996 246 280 255 223 156 810 507 685 353 209 304 1992 ncorporatingtwo-year vocational schools 96 237 276 227 193 139 765 369 229 247 230 346 1995 202 217 255 186 124 601 426 168 251 143 260 1996 into the into

CEU eTD Collection attempt to retreat from directly regulating the sector but still keep hold of some for steeringinitial state’s responsibility the reflects bodies the intermediary two Entrusting to regulation output educational witnessed. 1990s early the HE that the of structure governance the in shifts important most the of one as considered be can influential intermediarybodies. Creation and legitimization oftheHESC and the HAC more and decentralization toward move theautonomouslyfacilitatedthroughestablishment been governed of institutionshave to attempts the that rather but change saythatgovernancenottothe This is patterns have notaltered visibly since theregime operate has indeed remained by and large politicized. institutions HE which in environment developments,the Hungarian the by evidenced As events.inevitably pressurespoliticalinstitutionsbudgetand renders susceptible to state the dependenceon heavy a case, the is often as But spent. are citizenrygeneral thatthe governmentought to exercise some control over howthe scarce funds borne by being rationale normative a money; state accompanied generally has regulation state Availableexceptionsevidenceshowsthat notwithstanding,financialalso base. tight a the diversify to attempts of spite in modest, remained has services and goods selling as such activities other as well as tuition from generated income private However, 1996. in students self-financed admit to institutions HE state to granted approval the towardcost sharing policies butlimitedonly a to degree. Important thisin respect was themajor role instate HE funding. Thepast two decades have witnessed advancement aboveanalysisdemonstratedThe has Hungarian the that government continuesplay to 4.3.4 Conclusion capacity. Rapid and all-encompassing changes that HE sector underwent gave rise to rise underwentgave sector all-encompassingHE and that changesRapid capacity. 97

CEU eTD Collection 1990s. mid the recoveryfromsteady but slow economyits started the indicators indicatethat economic several present that 4.8 and 4.7 Tables year. subsequent the of beginning the by USD billion 30 to amounted debt national while GDP, had of percent 10 deficit reached budget Hungary’s example, for 1994, by performance; unimpressive dramaticfallthegrowthin during 1990-91, theeconomy continued exhibitto slow and the Since Hungary. in HE on spending of pattern the and developmenteconomic of relationshiplooktheintothissectionto aim Theof is between changesthelevel the in 4.4.1 Economic Development Education towardsHigher Policies Governmental of Determinants 4.4 government is closer to regulatory policy regime. Hungariangovernmentalpolicystanceadoptedthe the the by that say policies,can we examinationinstitutionalabovestate, the intermediary forcesand ofBasedon bodies. Hungarian HE system, it will be accurate to say,the can be best describedof as a nexus of the state The funding. the of lever the through demonstrated, was it as mostly, nonethelesshas sector,co-ordinationmaintainedstate the the in the prominentof that role underplay to not is This actor. unitary a is longer no former the which in HE therelationship essentiallyof different nature between thenational government andthe 98

CEU eTD Collection 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1990 1989 spending on education as the share of gross domestic product was actually growing actually was product domestic gross of share the as education on spending 1990s, the of half first of characteristic slowdown economic the Notwithstanding 1989-2000 Hungary EconomicIndicators, 4.8: Table force survey. onlabor based 1995 Data since Ratio 2007. Employement database, Indicators onWorld Development Based States. Source: as employed of (number Ratio Employment and USD) Hungary, aged in population 15-59) 1989-2005 of percentage 2000 (constant capita per GDP 4.7: Table during this time period. In fact, the slash in appropriations for education sector cameeducationsector appropriations for in slash the fact, In period. time this during rate rate inflation Annual Wages Real (%) GDPin change Annual a Growth GDP Real c Centre, 2001. Research Source: Based on EBRD, 2000. onEBRD, Based b d

TransMONEE 2007 features: data and analysis on the lives of children in CEE/CIS and Baltic and childrenCEE/CIS lives in of and onthe analysis data 2007features: TransMONEE

4,817 4,606 4,334 4,150 3,948 3,768 3,713 4,166 4,307 capita GDP per 5,691 5,454 5,200 5,015 c

A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti UNICEF CEE/CES/Baltics, MONEE Project, Transition: the of A Decade 28.9 100.0 0.7 100.0 1989

61.3 61.2 61.4 60.4 60.1 59.8 59.2 57.4 56.5 56.6 57.2 82.9 83.0 ratio Employment 35.0 94.3 -3.5 96.5 1990 a d 2000. onEBRD, Based 23.0 87.7 -11.9 85.0 1991 Based on EBRD, 2000. 1999: estimate. 2000: projection. 2000: estimate. 2000.1999: onEBRD, Based

22.5 86.5 -3.1 82.4 1992 18.8 83.1 -0.6 81.9 1993 99 b 28.2 89.1 2.9 84.3 1994 EBRD, 2000. 1999: estimate. 2000: projection. 2000: estimate. 2000.1999: EBRD, 23.6 78.2 1.5 85.5 1995 18.3 74.3 1.3 86.6 1996 14.3 77.1 4.6 90.6 1997 10.1 79.6 4.5 95.1 1998

9.5 81.0 4.9 99.3 1999

------6.0 3 105. 2000

CEU eTD Collection 5.7 1989 Centre Centre Source: in onEducation Public 4.9: Expenditure Table Education Database). (OECD average country OECD the to corresponds which HE, on GDP of percent 1.3 – 2001 in and percent 1.1 spend government the example, for 2000, in HE; on percent0.82(Pol as the share of GDP but started its fall from that point on, so that by 1996 it approached sameroughly stayedthe it whileterms,transformation real increasingof phasewasin initial the throughout HE to support state the Namely, of expenditure. pattern governmental same the displays 4.10 Table HE, on the spending Mapping public the of 4.9). trajectory (Table 1998 from again increase to began but 1995, in only A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A 5.8 1990 6.3 1991 ó nyi 2002). The years since 1998 saw some increase in the spendingincreasethe somesaw yearssince1998in The 2002).nyi 6.6 1992 6.5 1993 6.4 1994

Hungary (percent of GDP), 1989-1999 (percent Hungary 100 5.5 1995 4.9 1996 4.3 1997 4.8 1998 5.1 1999

CEU eTD Collection varied a great deal across institutions,Hungarianacrossaverage,deal the greatgovernmenton 86a spentvaried spending Although countries. European all to compare to cost per-student highest Hungarylowestonlydid theenrollment thehaveone of had alsoEurope it ratesin but thesefundsBeforetranslateregimeamount per-unit. thechange,the spent intoon not how of light the interpretedin be sector the allocatedto wealthnational proportionof state-funded sector. In examining the HE cost patterns, it is therefore important that the the in enrollments of growth significantwitnessed has 1990s early the rose, even has proportion of its gross domestic product has declined only slightlythe while in real terms it as HE on spending governmental although that remembered be should it Here Source: 1991-1994Hungary, GDP, Sources and Budgetary Central to Proportion HE, Funding in Total for State 4.10: Table percent of its per capita GDP per HE student in 1993. The average figure for OECD for figureaverage The 1993. in student HE per GDP capita per its of percent GDP of a percentage HE, as to support Total of a GDP percentage as HE expenditures, expenditure budgetary state total to in proportion HE, to support state Total expenditures budgetary state to proportion HE, in to expenditures Total GDP(billion HUF) (billion HUF) expenditures budgetary state Total (billion HUF) budget thestate HE from support Total budget (billion HUF) thestate from HE expenditure Total

The Ministry of Education, 2002. Ministry of Education, The

101 2.26% 3.75% 6.56% 7 2491. 856.2 32.1 56.2 1991 1.29% 2.12% 3.88% 6.295% 2935.1 988.7 38.4 62.2 1992 1.31% 2.08% 3.62% 5.81% 3537.8 1 1264. 45.7 73.5 1993 1.29%

2.11% 3.97% 6.30% 4330.0 1453.5 57.7 91.5 1994 1.33%

CEU eTD Collection widening access to HE by increasing publicand sector enrollments hand on the other. one the on restructuring sectoral the out carrying facilitated which start, very the from sector HE Hungarian the to available was loan WB the of form the in governmentalappropriations independentfrom funding the that account into taken be institutions.Thisapparent incongruity explained is severalby shouldreasons.First, ofit efficiency economic enhancing at aimed these to and cost-recovery of policies to rise gave which recovery, economic the of backdrop the against decline to started sector HE the to available resources whereas twofold, almost by increase enrollment public enabling thus grow, to continued HE on expenditure governmental downturn, economic sharp the Despite variables. two the between link conjectured our against economicdevelopment of level runs the relationshipand HE the betweenspending on that is point relevant the reality, the Whatever efficiency.economicdisincentives, on providingincentivesorconsiderable institutions bearing, by has availableto made are questioninstitutionalthelies in funding mechanism employed, since thewayfunds the this answerto the of deterioratingeducationalpart the A services qualityof provided. per-student in reduction enhanced operatingan indicativepositively,reflectsspending efficiencyless of is it or the whether is here arises that question immediate One 64.1 percent, which is still a good deal higher than the OECD average. to amounted spending per-student total a for figure the 1996, for that so expenditure per-student in reduction certain a about brought had policies reform of phase first the implementationof the had, it though success Mixed 1998). Bank World (the percent 30 as percent,littleyearcountriestotaled sameGermany45 as the waswhilefor for it 102

CEU eTD Collection plans. That is when the government of Hungary requested another 150 million USD loan from the from loan USD million 150 another requested Hungary of government the when is That plans. 44 Conference government the from fromsecondreform butproject not came the for initiative the why is This leadership. HE the to unmistakablyevidentbecame reformsfar-reaching of inevitability plan, Bokros the of pressure the Under assured. be could reforms sector-wide and institution both of adaptation through public resources of use efficient more achieving that provided 1996 for anticipated slashes of round second a delay to managed authorities HE policy. austerity Bokros the of permittingstateinstitutions allowself-financed to consequences werethe all students - and students all for fees introducingtuition faculty, the of salaries employees,cutting (Pol percent 0.82 to - 1996 in and 0.95 to public the example, expenditurefor HEconstitutedon 1.1percent GDP, following of the in yearfigure the 1994, fell in If percent. 20 some by funds public decreased with left was system the felt, strongly most was appropriations government reduced deficitback. As spending onHE fellalong with severalpublic sector services in which budget the hold to determination his in took minister, finance appointed newly the Bokros,Lajos that steps fist the expenditures of publiccut servicesamongone wason Hungarian the by favored reforms, Democratic Forum (MDF) government, economic andlaunch harsha stabilization program. incremental of course the alter fundamentally to decided Horn Gyula of premiership the under (MSzP) government the powerful intervening factor. Following the 1994 electoral victory, the new Socialist political,economicthan ratherrelated to circumstances, reason otheris The servingas that, a driving force behind the Hungarian government’s request for the World Bank’s financial Bank’s World the of the impact 1995onhigher education. financialan of crisis serious been for has program reform request second the government’s of implementation Hungarian and preparing in the assistance behind force driving say to is a This 1998). that, Bank World (the program reform million 250 USD its support to Bank World Indeed, besides the willingness, solid financial and legal bases were required for fulfilling ambitious fulfilling for required were bases legal and financial solid willingness, the besides Indeed, the Alliance of Free Democrats (SzDSz). Free AllianceDemocrats of the 43 Although it had secured the parliamentary majority, the MSzP decided to form a coalition with toa coalition decided form theMSzP majority, theparliamentary had secured it Although and the Conference of College Directors 103 ó y 02.2002). nyi . 44

Reducing the number of number the Reducing the Hungarianthe Rectors 43 To

CEU eTD Collection have evolved, had it not been discontinued, but there are good reasons that suggest that the system the preparatory the of that earnestness the suggest despite that is that fact perplexing The reasons changes. the good resisted have would are there but discontinued, been not it had evolved, have 45 a of installation an Indeed, years. four every in government in change the witnessed especiallyelections,1990s be well-pronouncedHungary the Since has to Hungary. in proveswhichpolicy, HE in shifts betweenpoliticalchangesand link the uponexpand will section This education. on spending public is, that - aspect one just to relation in factor political a of prominence the to attention drawn has section previous The 4.4.2 Political Parties and Ideology and presumably under the pressure of the Bokros austerity package. time this precisely taken were state, the by funded those alongside students financed self- admit to institutions allowing and students all for tuition introducing include remains. still point efficient use of resources, as some interviewed policymakersmore have claimed, thefor relevant effort genuine a than rather shock unforeseen and sudden the to reaction immediate an was supportfinancial in slash the by fueled events if Even made. were when policy pronouncements towards streamlining the sector and cost-sharing practices the resources, Havingconfrontedunprecedented with the place.declinein in policiesput and sector the to available funding of level the between exists that inter-relationship highlights instance this HE, for spending public in reduction the caused has what matter No about the success of the project. Unforthcoming politicians and self-interested academics were academics self-interested policy- with makers). (interviews and pronouncements policy politicians the fulfilling Unforthcoming to obstacles main the for taken usually project. the of success skeptical utterly the were experts about interviewed of some project, reform Bank World second the for work It is difficult to speculate about the route in which the second cycle of restructuring efforts would efforts restructuring of cycle second the which in route the about speculate to difficult is It turning point in the course of developments did come about in 1995 in about come did developments of course the in point turning 45 That is, first notable steps towards cost-sharingwhichpractices,towards steps notable first is, That 104

CEU eTD Collection Policy: the HE Changes in Important Coalitions Governing policy agenda, political parties of Hungary before the 1990 elections and during its during and elections 1990 the before Hungary of parties political agenda, policy reform the on issue every and each over widespreadconsensus a supposing from Far Table 4.11: Higher Education Policy Choices in Light of Electoral Outcome in Hungary, 1990-2006 of observed variations in policy outcomes. originsexamines the broaderandcontext the changes withinpolicysectionmaps This consistentthese changes are with the ideological stance embracedby respectiveparties. how question another quite is It Hungary. of case in clear unmistakably is outcome policy on change governmental the of bearing the But governments. stable more characteristicbeentransformation countries the has withof general,in even process in constantlegislationHE that fluctuationthe noted for should be in It dominant parties. under out carried development HE of course the in changes important most the of modificationsacts, andamendments regulations, toan existing legislation. Table 4.11 of belowmaps some set new a by accompanied been has coalition governing new meit femt, we h is a n H a rfe, cud nt yt be yet not could drafted, was differentiatedon thebasis oftheir programs onconceived HE pathsofHE restructuring. It on law first the when aftermath, immediate

Sciences Sciences ofAcademy the Hungarian 1994Law-The on HE 1993Law-The on 1991 in signed Loan- the WB Education onby 1990Law institutions provided opening private framework for - Permissive Right-leaning MDF+FKGP+KDNP 1990-1994

1998 in signed loan WB thesecond - students financed self-allow amendment-1996 1995in passedresolution Parliament- all) for fees (tuitionpackage” “Bokros-1995 Left-leaning SzDSzMSzP+ 1994-1998 105

WB loan in 2002 loan WB the Canceling - 2001 in operation in put is scheme Student loan- Amendment The 1999- 1998 in fees tuition-Abolishing 1998 in starts scheme loanstudent of the Preparation - Right-leaning FIDESZ+FKGP 1998-2002

passed in 2005 in passed law onHE New - reforms third of phase the for-Preparation in 2002 principles Bolognathe adopt to started -Government 2002 theloanin of terms in -Change Left-leaning SzDSzMSzP+ 2002-2006

CEU eTD Collection aig ngtae h nig o h l eie ad hvn lce h new the elected having and regime old the of ending the negotiated Having 1989. People’sParty (KDNP) had Democraticrevivedand resurfaced thepoliticalat arena just before the Christian the and (FKGP) Party Smallholder’s the Independent as Agrarian such parties, historical different addition, In movement. students’ critical - (Fidesz) Democrats Young of Alliance the and 1987, in established party populist dissidentmovement founded 1988,in Hungarian the Democratic Forum (MDF) more - the on actors prominent opposition sideincluded AlliancetheFreeDemocrats of most (SzDSz)urban intellectuals’ - the hand, other the On Party. Worker’s Hungarian Socialist the from party created newly the – (MSzP) Party the Socialist by Hungarian represented was party ruling the bargaining political a of side one the On 1990. in election first the to prior even form to begun had nascent, although system, multi-party why explains This unite. to compelled not were forces opposition party, communist strong no was there As opposition. emerging still and party communist through extensive roundtablenegotiations between thereformist wing of theHungarian beyondBut that,choiceswith.democraticdealt beof institutional design werecrafted necessity of far-reaching political changes before the existing economic problems could the about elites new and old the between reached had consensus general a 1989, By of HE in one way or another. course werefuture the shaped has pacts design negotiationsand protractedthrough out hammered institutional and economic of choices crucial most the when period the Yet, crystallized. had positions conflicting that elections next the until not was concerning the country’s economy. While the necessity of changes in the property the in changes of necessity the While those economy. country’s indeed the concerning were dealing urgent most for called that issues policy government, 106

CEU eTD Collection htrc hd a srn rsnne wt ht i te otcmuit cutis the countries, post-communist other in that with resonance strong a had rhetoric HE. of system the of reconfiguration further for required experienceaccumulatedpractical of advantage the claim could who bureaucrats were there system, the into elements market some introducing with toyed having Besides, incrementalpolicy earliercouldof afford a reforms discerned couldbe onset. fromthe decades three decentralizationsome toward move its started had that system the that transformationthe institutions of could beassured gradual bya process,that more or generally, attitude the Nonetheless, field. HE the of transformation fundamental of widespreadnecessity and urgency concerningleadershipthe HE and politicians a amongconsensus was discourse the underlying university Again, the up. around opened revolving had restructuring debate the that background this against was It with gradual changes and great cautiousness (Stark, Bruszt 1998). characterized was transformation economic Hungary’s of phase first the whole, the immediate On remedying policies.preferred the of effects long-run for allowance no making at and problems directed reforms incremental of that were government Antall the by favored strategies The restructuring. economic toward steps modest remarking that during its four years in office, the MDF government took only small and debatebeyondthis detailsof pursue the not shall I national-populist other.the on side Christian- the and position) liberal the from divorce latter’s the (before hand one the on Fidesz and SzDSz the of liberal-democraticcoalition the between outset the from manifest were general in policy economic as well as scheme privatization of aspects structure have never been broughtinto question, considerable disagreements on various “learning by doing” (interviews with Laszlo Dinya). Laszlo with bydoing”(interviews “learning 46 its through itself distinguishes policy-making HE Hungarian the of period formative In fact, some interviewees have described the mode of the early stages of policy-making in terms of terms in policy-making of stages early the of mode the described have interviewees some fact, In 107 46 So, even if the official the if even So,

CEU eTD Collection the way the reforms started to be implemented, suggested the following additional following the suggested implemented, be to started reforms the way the government,new discontentedinstalled, the hadwith it after Soon FKGP). (the Party Smallholder’sIndependent Agrarian the with coalition governing the formed Fidesz the 1998, in victory electoral the Following government. led MSzP the under signed loan WB second the canceling with do to has change governmental the following fundamentally changed was reforms of course the when instance obvious Another successive government soon after its election. the by reverted were parties left-leaning the by forward put funding HE in state the the against of role variation the lessen to attempts that policy shows 4.11 Table changes, political HE of background Presenting diverse. more deal great a become had HE involvementin state stakeholdersthe toward and parties politicaldifferent by takenstance the after,soon But budget.state tight competing the sectorsin for public other against sector the of footing privileged assured large at society benefiting good sector public public a as the HE of time-honored notion the favored of endorsementunivocal This expansion. also effectively more policy a against or for interests aggregate their pressing of capable thus and organized formally become had change regime the of aftermath the by that leaders institutional key the of group informal previously the of interests Importantly, HE. accessible more a to transition the for thein future ofHE, this had todowith upholding theleading responsibility ofthestate Inthewake ofthe transformation, thereif wasconsensus a among those having stakea the reorganization proposal. of losers potential of resistance the by hindered further attemptslengthened and slow components: to conduct in depth analysis of pertinent laws and regulations, to assure to regulations, and laws pertinent of analysis depth in conduct to components: 108

CEU eTD Collection oteodr dcto hl e a fetv edsrbtv ol i h ad of hands the in tool re-distributive effective rhetoric, an official be its shall education to postsecondary According services. educational of provision as well as funding in profile state maintainingstrong enrollments and of rate impressivealready advocatingprotectionistexpansionfurther sociallargelyof - be to remains HE toward standpoint its center, the to right the on itself positions Fidesz the if even Therefore, ideological viewpoint surrounding HEparty’s issues. a for force predicting week a have placements left/right reform, economic with like that appears It 1999). al at (Kitscheltpolicyeconomic than other on appeal their base to needed principles, economy market to adherence couldtheir assert who credibly communists reform incumbent with competing effectively in parties, opposition emerging that fact the by explained is turn in This Hungary. in divide partypolitical the structure issues economic than more orientation social-cultural that fact the in resides however, contradiction, apparent higherthis for reason The charge party. to and students self-financed supplementary feesrun against thesocial protectionist stanceembraced by theSocialist admit to institutions students, all allowing upon fees tuition of imposition as such practices Indeed, Hungary. in outcomes policy and ideology party political between exists that obvious contradiction the highlight they that extent the to also noteworthy are examples These the course of the reforms fundamentally by canceling the loan altogether. a develop among wider public (The World Bank). But in 2002, the Fidesz to led government altered and involved issues stakeholders the of awareness greater permit would that among strategy communications commitment and consensus greater oenet ad te pwru en o nacn ieie cacs o socially, of chances lifetime enhancing for means powerful the and government 109

CEU eTD Collection system has exhibited. In the same way, much of the difficulties along the way of the of way the difficultiesalong the of much way, same the In exhibited. has system HE the that persistence the of illustration clear one is authority state the of pressure the under only and 2000 1999- in started be eventually could integrationinstitutional the of goals reform earliest the of one fulfilling toward movement the That multiple. are Hungary in community academic the of strength the of indicative examples The against conceived changes. and quo status preserving at directed often leadership,institutional of interests vested requisite for achieving far-reaching results. Another and most salient point, however, is politicallytakingunpalatableare politicians decisionsover that strategiespreferred by interviews cautious multiple is sources written examinationof from from as well as actors key emerged with conducted has decidedly that point be One to Hungary. proven in challenging has pronouncements policy accomplishing attempts, reformpioneering of spite in that, apparent become has it undertaken study the From 4.4.3 The Mode of Interest Intermediation market encourages correspondingly and mechanisms state in steering of the sector. the of involvement decreased reform project advanced by the SzDSz, left to the center but market liberal party, favors the time, same the At Setenyi). Janos with (interviews traditions – elitist inherently is that – Humboldtian the of name the in defended is HE mass toward the movement Surprisingly, population. the of strata disadvantaged otherwise or politically implementation of other objectives set forth by the WB could be related to their to related be could WB the by forth set objectives other of implementation 110

CEU eTD Collection outlawed the dual system. Education Higher on Law new the of implementation the until context Hungarian that grounds the on institutions by resisted been has 1999 in signed Hungary which to agreement Bologna the of requirements particularlybe 1990s,provenmidhas to the challenging by FulfillingHungary. in the post-communist countries,including Latvia, Lithuaniaand Georgia, have accomplished most that system three-level type Anglo-Saxon the to Moving process. Bologna the remarkable resistanceinstitutions have shown toimplementing changesnecessitated by the to relates however, forces, institutional of strength the of illustrations vivid most enduranceof largely redundantprograms (interviewswith the for accounts process policy-making on bear to bring institutions that influence undertaken have revealed, like with other reform proposals already considered, political interviews the As academics. senior of power overriding with reside also capacity institutionsgeneral,technicalHEwhy in fields, supply-sidecontinuereflectand the to diversifytheir profile toward high-demand areas andstill provide instruction mainly in to managed not have schools vocational why reasons the that emphasized also has protectivestrategiesrestructuring potentialthepursued by of losersscheme. study The same the to related be to are sector HE the over control establishingunified with and activities, research and teaching re-integrating with difficulties discussed, already As overly susceptible to pressures hailed from various interests groups and stakeholders. MoE, the by headed and representatives and experts HE of composed Being institutions. different representing academics senior and groups lobby of that with incongruity 47 Responsible for implementation of the objectives of the project, the fund was established in 1991. in established thefund was of theproject, of the objectives implementation for Responsible the Catching up with European Higher Education Fund Education Higher European with up Catching the 111 iay sse a oe at fr the for apt more was system binary András Semjén (CEF) proved to be to proved ). One ). of the 47

CEU eTD Collection academic community and other relevant interest groups, and private HE growth. the Thus, cumbersome. and Hungarian developments bear out theconjectured protracted negative link between the strength of equally been have directions both the evidencedAs recentinstitutions practices,by ones. changes ceasingandold the the in Committee Council Scientific Education Higher powersand being composed by representatives of various colleges and universities, advisorysignificant Having policy. preferred a for interests organized their pressing successfully in institutions state the of leaders the to attending in intermediarybodies two by played part essential an reveal also instances These created. was demands aggregate the of articulation and strategy the setting changes, proposed of effects long-run foreseeing interest, their coordinating for mechanism effective colleges, Rectors groups, institutionalized other two with collaboration In 1991. in already body formally organized a as existence legal gained and 1987 as early as established was (HRC) group, professional important such One policy. educational higher the of choices into translation effective find academics senior of interestsvested group, a as organized Being (Nagy-Darvas,expansion1999). Darvas sector private upon constraints existing for responsible largely held are cohorts, age shrinking already for competitors tangible as institutions private regard who leaders, Finaland most importanttothis research point that is interests ofpowerful institutional CR, wih ecmas rpeettvs o ery al uieste and universities all nearly of representatives encompass which (CUR), the Conference of College Directors College of Conference the (HAC) are in control of both authorization of new programs as well as well as programs new of authorization both of control in are (HAC) HS) ad and (HESC) 112 (CCD) and and (CCD) the Hungarian Rectors Conference Rectors Hungarian the h ugra Accreditation Hungarian the the Chair of Art University Art of Chair the the

CEU eTD Collection followers. Despite such heterogeneity, there is good evidence to suppose that the that suppose to evidence good is there heterogeneity, such Despite followers. belief religious other and Buddhist Jewish, Lutheran, of needs the for catering these dominatethe Church sub-sector, butthere arealso several reformistinstitutions well as othergroups include Lutheran and Greek Orthodox. Respectively, Catholic institutions while percent, 16 for accounting Calvinist, the is group largest of second The half population. than more little for account which of adherents Catholicism, Roman the is faith religious dominant The ethno-linguistically. is it than religiously diverse more much is Hungary as surprising hardly is This institutions). private at greater is enrollments institutionsof number total church the (though institutions type foundation private outnumber college and university both that seen have We growth. HE non-stateHungarian the in role potent played has factor religious the contrast, In nature of studies these institutions provide and the mission they pursue. the with rathercountry’s minorities ethnicbut the of needs servingthe with do to less Germanspeakingthe Andrássy UniversityEnglishhaslanguage the this and butCEU, privatefewuniversities There are provide educationthatHungarian, thanother on like Hungary. in growthnon-statesector in part ethnic-linguistic no almostplaying motive find unexpectedto not is it Hungarianlanguage, the speaks population the of percent 94 almost that fact the Given details). more for 4 Appendix See census. 2001 on second largest ethnic group – 1.9 percent of the total population (World Factbookthe based - Roma while percent, 92.3 constitute Hungarians ethnic where homogeneous, most ethno-linguistically is Hungary examination, under countries four the of Out 4.4.4 Demographic, Ethno-Linguistic and Religious Factors side capacity. Religious establishments ofhigher learning, in all probabilitybecause of demand then rather supply reflects institutions HE denominational of predominance 113

CEU eTD Collection toll on HE enrollments in Hungary already from the mid 1990s. demographic sharp itstaking been has it 2005, after only region the a of rest the perceptible in challengeis by created competition selected intensified the Therefore, for figures for countries). 5 Appendix See 2001. Centre, Research Innocenti (UNICEF countries post-communist 17 among point lowest the -2, to declined had shows, as early as in 1980, the rate of natural population increase was 0.3 and in 1989 it 4.12Table 1989As date. that beforeHungary well in starteddeclineonwards, whereasthe from consideration, under three the including region, the in countries most in noticeable is trend demographicdownward while that notable is It demographics. fallingsharply by createdcohorts age competition growingfor add should we this To benefits.securing for groups interest to similarly act often associationsreligious why understandable is it government central the on reliance financial extreme their Given foundation-run sector growth (Nagy-Darvas, Darvas 1999).the of detriment the to employed been have sometimes posses institutions Church status, that levers political privileged that noteworthy is It notably issues. funding to comes enjoy it when especially to continue state, the with ties deep-seated the 114

CEU eTD Collection thousands) (beginning of year, 0-17 Population age increase population ofRate natural enrollments Higher education enhancing productivity of the country of limited natural resources had taken its roots its taken had resources natural limited of country the of productivityenhancing and growth economic fostering for development capital human of importance utter the Hungary’scharacteristic transformation.in beliefthe of the initialphasefact, of In environmentpoliticalgeneral the consistent with reform-policy earlyis whichagenda, the to central was growthenrollment public through sector HE elitist formerly in rate participation the broaden to thrust The HE. Hungarian the of nature state-led the for To sum up what was said above, the broad level factors provide fairly adequate account 4.4.5 Conclusion 2000projection (2000), onEBRD 1999estimate, 2001based Centre, Source: 1980-2000Hungary, in Change Demographic and population) 19-24 of (percent Enrollments Education Higher 4.12: Table during the public discourse among prominent scholars and representatives of the HE the of representatives and scholars prominent among discourse public the during A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A

n/a 0.3 n/a 1980 1989 8 2,64 -2.0 12.2 7 2,58 -1.7 12.3 1991 115 7 2,49 -3.2 14.1 1993 8 2,35 -3.3 18 1995 5 2,13 -4.8 28.9 1999 2,090 n/a n/a 2000

CEU eTD Collection pcaua rwh o rvt ntttos cryn u n abtos ad dsicie msin of mission distinctive and ambitious into brought had an which of legitimacy out the order institutional carrying existing for substituting institutions and challenging private of growth spectacular with (interviews remains still 48 point relevant the failure, complete a as project WorldBank’sreform the extremeviewmoststanceothersendorsing the as time same the at then, precisely missed was reforms sweeping on embark to opportunity great the that lament education on experts some if Even expansion. enrollment out carry negotiatedtoHungary tolaunch comprehensive restructuring ofitspublic sector and to was USD million 150 of loan Bank’s World the outset, Hungarianthe At the so. do governmentto for need pressing less been has there sectors, private to provision HE for responsibility the of some delegate to governments compelled economies collapsed where countries post-communist many unlike that, is factor additional An much of state-university relations as well (Stark, Bruszt 1998). explain can legally transformed were rather but destroyed not were institutions and ensured thatsome faith thestatein was sustained. That theparty-state did notcollapse altogether never was discredited authority inHungary. Attempts of thereformist faction of the state communist partyhave the had, appeals Symbolical these though debate. political significance wider a of part a as stood and symbolism political carried Humboldtianideal the restoring thus and learning and teaching in freedom of otherCEE countries, defining institutions againstthestate, reasserting thedual concept transition. in countries of number a in was it way the changes, regime the after even elite, policy the by question the into brought never was mission thisfulfilling in state the legitimacyof the sector, the of future the over debate policy a permeated discourse public the as And, 80s. late the in underway got that sector rvt ntttos wr et wt omn ad ls-miiu oiain o rft seeking profit a of motivation less-ambitious and common a with 2003). (Tomusk left were institutions private endowed poorly until away worn had aspiration pretentious this that afterward only was It disrepute.

n Etna o ntne h meit femt f te clas f cmuim wtesd a witnessed communism of collapse the of aftermath immediate the instance, for Estonia, In 116 48 In Hungary, like in like Hungary, In

CEU eTD Collection served as the crucial factor for fostering strong inter-sectoralcompetition. strong fostering for factor crucial the as served has region entire the in unparalleled is that institutions private for available funding public However, start. the from well-pronounced for and heightened competition more population the made obviously has the1980s of beginning that forcesbehind their attempt thwart to private sector development still remains. The fact effective to driving about itself question the But lending interests. institutional long-term the of organization, advancement formal their academic with Hungarian resides the community of success comparative the evidently, Quite general this strategy. of part as counted be can development, sector paid for implications considerable has literature the to according that, loans student delaying like policies, Other start. the from restrictions legal these various via controlled but well sector, were endeavors non-state the in opportunities employment additional for need a by driven faculty by institutions establishing of attempts were there that indicates bear on governmentalstance towardsprivately provided education.Available evidence to brought have academics, senior and religious as such groups, organized different that influence remarkable the exposed has investigation our importantly, more But in the economic factor. limitedextent ofthenon-state sector development and thestate sector privatization lies explanationof constrainedparteconomic fortheThus, less Hungary. the reality by in far were date course-offeringscurricula and to their bringup to as institutions so state policymakers). That is, comparatively, initiatives to implement far-reachingchanges in not discriminate between the two types of non-state institutions greatly. greatly. institutions of types thetwo non-state between discriminate not could policies funding Governmental budget. public the from funded historically institutions religious 49

The availability of state funding for non-state sector perhaps has to do with the long-existence of long-existence the with do to has perhaps sector non-state for funding state of availability The ugr a en fcn hr eorpi hleg led ic the since already challenge demographic sharp a facing been has Hungary 117 u iest age niversity 49 Thus, in Thus,

CEU eTD Collection taking place before and after the changes of 2003. The first part examinespartfirst waysThein the changestaking place2003.thebefore afterand of developments on concentrating each parts, main three into divided is study case The policies on HE development. interestingalso drasticthatgovernmentalimpactthechange the of pointof fromthein is Georgiancase the Thus, HE. in sectors both towardsregulatoryregime the in shift economic transformation. The governmental change in 2003, however, marks the major an of backdrop the extremely against lax regulatory regime characteristic ofthe place first decade ofGeorgia’s political- taken have HE of field the in transformations major These patterns. growth its fluctuationsin striking saw well as sector public but public institutions on the other, haveof been dramaticprivatization in Georgia. In fact,the not only private and hand, one the on fall subsequent its and growth private of pattern,manybut,in respects, extreme an is all,scaleFirstthe of andit intensitycase. publicgeneral this Georgiandevelopmentsfit mostly The of other. the on educationalservices privatization and hand one the on institutions education higher private of growth and creation witnessed 1990s the of beginning the region, the of much In Introduction 5.1 only for student cohorts but also for scarce governmental resources. not compete HE in sectors two the region, the of much from difference in Hungary, communism up until 2005. The comparison is facilitated by examination of inter- of examination by facilitated is comparison The of 2005. collapse until the up communism since evolving been have HE Georgian the in sectors two which CHAPTER 5: THE CASE OF GEORGIA 118

CEU eTD Collection been decreasing in absolute terms as well. has sector the of size the 1996/97 since that add to important is It share. enrollment sector private the in reduction striking a been has there point that from However, sectorwhenthe accommodated percent33.8students institutions.of HEenrolled all in privategrowththe sectorreached of had peak theduringacademic its the 1995/96, year of enrollments, student all of share the in Measured students. of number highest private the enrolled 1990s, sector the the when 1996/97 until of further expand beginning to continued the enrollments in growth explosive an Following HE. in belowTable5.1remarkablereveals a fluctuation studentin enrollments bothsectors at 5.2.1 Inter-Sectoral Dynamics Sector Education Higher the of Structure The 5.2 variable on the documented evidence. relativeassess caseto studythefinala weight of is part the eachof aimexplanatoryof The dynamics. HE on significanteffect have to thought are that place in put policies governmental various analyses investigation our of part second The mission. and sectoral dynamicsalong the dimensionsof ownership, finance,governance and control, 119

CEU eTD Collection public participation rise, clearly owing to the growing body of self-financedstudents. of body growing the to owing clearly participationrise, public somepercentonlyfrom20 1997/98by observecompared is we that1990/91.It the to actually dropped. As can enrollments be calculated from Table 5.1 above, public by 1997/98, the number had fallen of number the rule Soviet the following immediately years During 1). (Appendix 2001) Centre Research Innocenti (UNICEF standards Soviet the to according high fairly percent, 19 around constituted Georgia in level since the collapse of communism. Before the events of 1989, the HE cohort enrollment sectorpublicHE the in takingbeenplacehave Equallychanges prominent that the are of year academic the for Data observation. unavailable. are 1993/94 statistical by covered were these of 60% only but 267, Note: Source 1990-2006 Table s fr te nme f pbi ntttos h tt-rvdd H n pre-transition in Georgia HE wascomposed of 19 institutions state-provided offeringtraining inmore than400 disciplines. the institutions, public of number the for As Year 1994/95 1993/94 1992/93 1991/92 1990/91 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 by the 1 the by : Calculated from the State Department of Statistics Data of Statistics Department from theState Calculated : 5.1: Numerical Overview of the Public and Private Higher Education Sectors in Georgia, in Sectors Education Higher Private and Public the of Overview Numerical 5.1: 146 172 150 154 153 146 162 154 159 122 109 93 Na 131 48 Institutions Private of N st of October 1997, the number of registered private higher education institutions was institutions education higher private registered of number the 1997, October of

Enrollments PrivateTotal 30512 35440 29338 31465 31887 33138 40126 38272 40162 42889 42006 41348 Na 33063 10633 19.2 20.5 21.6 23.8 29.7 29.8 31.5 33.1 33.8 30.4 26.7 9.4 HE enrolm. the total of % as enrollm Private 21.1 20.5 120

26 26 26 26 24 24 23 21 23 23 23 18 19 19 institut public N of 25 26

123 866 122 223 115 546 105 822 95013 90054 87258 86506 82230 94642 91110 90909 102 818 103 893 Enrollments Institution Public Total 113 801 137 021

43.6 43.1 43.3 38.1 35.9 34.3 26.1 18.1 12.8 10.7 7.8 ------enrollm. public total of the% as students financed Self- 47.9 46.3

CEU eTD Collection 1999/00 1998/99 1997/98 1996/97 1995/96 1994/95 1993/94 1992/93 1991/92 1990/91 1989/90 Year admit self-financed students in 1993 and if during the first academic year only 7.8 only year academic first the during if and 1993 in students self-financed admit with private funds, mostly by means of study fees. State institutions were authorized to HE. Public institutions havebeen trying increasingly to in complement scarce public revenues sectors public and private the at both students self-financed in growth the to due mostly was increase this that above, 5.1 Table from garner to difficult not is It Data Statistics of Department 2001.The State centre, Source: Note: 1989-2000 Georgia, in Higher in Education Participation 5.2: Table expanded by some 10 percent over a decade. Table 5.2 below illustrates this: whichparticipation, HE of is rate the in fluctuation and numbers student total significant the in also observed enrollments, sector both in flux constant the to Owing which makes 44 campuses altogether. institutions,branch 18 their universitieswith along 26 comprised of was sector public the2004/05 by that so then sincegrowing been institutions has public of number The one public institution (the Georgian Technical University) failed to obtain the state accreditation. accreditation. thestate failedobtain to University) Technical Georgian institution (the public one 50

The decrease in the number of public institutions from 26 in 2004 to 25 in 2005 reflects the fact that fact the reflects 2005 in 25 to 2004 in 26 from institutions public of number the in decrease The

a student data 1993 excludes private institutions private 1993excludes data student A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A 138 961 128 326 127 420 129 395 124 236 135 990 91 110 123 972 113 451 103 893 n/a Enrollm Student Total

29.0 26.0 26.2 27.0 26.1 28.6 19.4 26.2 23.8 21.7 19.1 population age % of 19-24

50 121

CEU eTD Collection finance,clearly it makes the public and private sectorsIn more alike. Indeed the financial privatization. remarkable a is fees tuition on institutions public 2002) of dependence Chapman and (Gvishiani state the from received funds than higher University at tuition student from generated revenues example, for 2001-2002, Student payments represent the major source of income for most public universities. In Note: 5.1 Figure growth. enrollmentprivate the with correlatednegatively is latter the while students, financed self- of increase the with line in expand enrollments public that growth showing private-public dynamics, the captures better below 1 Graph percent. 43.3 be would percent of all students enrolled in the public sector paid tuition fees, by 2002 that figure change then relates to other changes. It is now difficult to discern the difference betweenactivitiesthe undertaken andmission pursued discern byGeorgia’s twosectorsIn HE.in to difficult now is It changes. other to relates then change Source: Number of Student Enrolments 100000 120000 140000 160000 A figure for private enrollments for the academic year of 1993/94 unavailable. of is year theacademic for enrollments for A figure private 20000 40000 60000 80000

The State Department of Statistics of Georgia. of Statistics Department State The 1990/91 0 : Student Enrollments in Higher Education Institutions in Georgia Georgia in EducationInstitutions Higher in Student: Enrollments

and 1991/92

the Medical University Medical the 1992/93

1993/94 Student Enrolments in HigherStudent Institutions Education 1994/95

1995/96

1996/97

1997/98

1998/99 Year constituted respectively, two and three times three and two respectively, constituted

122 1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06 the Tbilisi State Tbilisi the publics financed students in Number of self- institution enrolment Total public enrolment Total private . The

CEU eTD Collection thus represents an extreme case not only with respect to intensive private growth and its GeorgiaGeorgia. business in new oriented as them,campusescoursesrun new and to open to leeway such with grantedinstitutions public were country other no in region, the in elsewhere observed those to parallel run developments Georgian Although Georgian private sector. the from absent largely yet sector, private the with associatednormallyreligious) and diversification(ethnicinternal of kind a undertaking sector public the juxtaposition– sectorpatterns characteristic elsewhere, evenbutmore remarkable private-publicthe is 1987). Asthe section below will demonstrate, the Georgian casedefies certain private Levycharacteristic(James1987,religiousbeenappeals HEandprivate haveethnic of such literature, HE private to According provision. private its for need the obviates extent, certain a to which, religion, and state the between separation clear of absence the reflectscommunistreactionagainst and atheism a as seen be can sector public the religiousreligiousavailabilitywidestudieseducation. in for of true A holds same The German. and English in as well as Azeri, and ArmenianRussian, as such minorities,country’s the of languages in offered are courses instruction, of language Georgian official the public all profile, business besidesaddition, full In economics. and market-oriented law in programs law, run universities their Whatever technology, information languages. foreign like and fields administration, demand high in training private like institutions, labor-marketprovidingfluctuations by to public attuned stay to hard tried counterparts, have students, fee-paying more attract to attempt an 123

CEU eTD Collection happens that not all licensed institutions are in operation. For instance, according to the also it versa, vice and data by covered than operatinginstitutions more are there that case the often is it indicates, 5.1 Table the to note As Statistics. Departmentof State operatingtheEducationMinistry of or the recordedby is differentwhatfrom institutions be actually can of number the reasons, various For figures. these of accuracy on caveat a by preceded be must though, evidence, above the of interpretation Any measured in both absolute numbers and relative to public enrollments. development, however,marked is byaconsiderable reduction in the private sector size, recent more The business. in stay not could students of number sufficient attract not student reduced, had providers education enrollments had actually grown private which might indicate that smaller institutions that could of number the though even that note importantto is It 1994/95. in aboutinstitutions came of number the in fall highersucheducationalalreadythere were131 establishmentsmajor The (Table5.3). then,thegrowth private of institutions was rapidso thatbythe 1992/93 academic year, Since institutions. owned privately first of establishment the for basis the as served Georgia of Republic the of Council Supreme the of Decree The As in other countries inthe region, public higher educationpredates private inGeorgia. 5.2.2 Private Higher Education Institution Growth Patterns in some key respects. beingprivate aberrant its respect withpublic to sectorequallyin also intensive but fall figuresprovided by theMoE, in2002, there were 209licensed private institutions.But 124 passed in June 1991, June in passed

CEU eTD Collection sector development. reportuncertainly to madedifferentaccountprivate and effort for is the versions all of study this in case, the being That figures. these on analysis base unfeasibleto almost becomes it that Georgia in great so sometimes are sources credible equallyostensibly 1986, (Levy internationally uncommonmeans no by is data accurate of lack the educationdevelopment higher so private of record neat keep rarely agencies governmental general, In see interviewees 7). of Appendix list the (for picture real the of approximation close a best, at representativesMoEinterviewsare,becomefrom theyclear,the has with as But it is. reliablesourcestheremost the of one – Georgia data StatisticsDepartment of State of the from calculated were 5.3 and 5.2 5.1, Tables in numbers The way. same the in emphasize to fromsourcesoutsetthe all notthat document privatethe sector dynamics captured around 21.6 percent of the total student enrollments. It is of utmost importance institutionsactuallyfunctioned, insufficient153 which demand,onlystudent to owing

James 1986), but the incongruity between various and various between incongruity the but 1986), James 125

CEU eTD Collection one third drop). students 42,889 some 1996/97, attended private HE institutions, in their number had fallen to if Namely, well. as figures absolute in sharp equallywas decline the 2003/04)but in percent 19.2 1995/96to in percent33.8 (from time years few a over percent 15 almost by fall enrollments private of share the did findshasbeen recorded mostly relative,in absolute,notin Georgia,terms.In notonly he decline HE private the However, a). progress in (Levy region the beyond as well that countries post-communist as 1990s, the beginning of the witnessed institutionsprivate explosiveexpansionin of those in noticeable is tendency the extent, lesser the market shareof private enrollmentshas been spectacularin Georgia. Although to a in decline and growth the that shows 5.3 Table dynamics, sector private the Mapping of year academic the for Data observation. unavailable. are 1993/94 statistical by covered were these of 60% only but 267, Note: Source: Table by the 1 the by 5.3: Numerical Overview of the Private Higher Education Sector in Georgia, 1990-2006 Georgia, in EducationSector Higher thePrivate Overviewof Numerical 5.3: the State Department of Statistics Department State the 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1994/95 1993/94 1992/93 1991/92 Year st of October 1997, the number of registered private higher education institutions was institutions education higher private registered of number the 1997, October of 146 172 150 154 153 146 162 154 159 122 109 93 Na 131 48 Institutions N of Enrollments Total 30512 35440 29338 31465 31887 33138 40126 38272 40162 42889 42006 41348 Na 33063 10633

126 21.1 20.5 19.2 20.5 21.6 23.8 29.7 29.8 31.5 33.1 33.8 30.4 26.7 9.4 total HE enrollm. the of % as enrollm Private

29, 388 in 2003/04 (that is a

CEU eTD Collection that are taxed in the vein of commercial enterprises. companies liability limited as registered are Georgia in operating institutions private all that shows 6 Appendix law. private of entity legal a as established institutions an membersof founders,or holdersinterest be self-governments not local may bodies Activities the under of fall regulation and establishments educational for-profit or Limited Companies as registered Liability are latter The law. private of entity legal a and law public of entity legal a of status the establishedwith be may institution HE a that stipulate - Both documents - Georgia. in status ownership of measure the on distinct quite are institutions Private StatusOwnership 5.2.2.1 parts of the study. subsequent of matter subject the forms decline share sectoral to connection in cites literature HE private the that factors Examining place. took decline the when period thatis we find no major changein thegovernmental regulatory regimeduring the time- caseour of distinctiveotherpoint The absolutenumbers.also proportional but shares only not concernsenrollments private in decline sharp the that is One case. Georgian action. regulatory governmental strong a to rise gives organizations educational private of proliferation initial easy an that happens often it fact, In internationally.uncommon not is growth explosive initial an after shares enrollment private in decline a that shows literature HE Private the Russian and Romanian governments, for example, served to inhibit unfettered private growth to growth private unfettered 2005). (Levy extent some inhibit to served example, for governments, Romanian and Russian the 51

This was markedly true for some post-communist nations. In the mid-1990s, “delayed regulation” of regulation” “delayed mid-1990s, the In nations. post-communist some for true markedly was This and and the Law on Higher Education, the Law of Georgia on Entrepreneurial on Georgia of Law the Education, Higher on Law the the Civil Code of Georgia Codeof Civil the theLaw onHigher Education, 2004 51 But there are two points of distinction for the for distinction of points two are there But . Accordingdocuments,andthesestate theto . 127 and the Lawon Education,1997

CEU eTD Collection Mater” “AlmaUniversity RobakidzeGrigol and Africa (TIAA) of Asia Institute Tbilisi Business (CSB) School ofCaucasus Public Affairs(GIPA) of Institute Georgian Institution than what top private institutions charge. less but sectorpublic the divisions” “paidof in those comparable to is that USD 1000 incomefor privateinstitutions. Tuition fees privateat sectorusually range from 150 to students’commoncontributionsthat Morethoughwas sourceofconstitutedsingle the Source: Georgia in Institutions Higher Education five Finance in Private Sources 5.4: of Table respects. crucialother with also funding,but educational to regardestablishmentswith only not private of pool undifferentiated against out stand institutions these that demonstrate tuition available tothem, as illustrated byTable 5.4 below. The following sectionswill student institutionsfrom raised than of funds other handful had organizations international a by (co)founded Only institutions. private to applied students their via financing and deductions tax through appropriationsnor direct of form the in neither HigherEducationon 2004.BeforegovernmentalLaw newthat, passing in the funding considerablewitnessed withchangeGovernmentala have towardsHE policiesprivate Funding Institutional 5.2.2.2 Kachkachishvili (2001) Kachkachishvili

uto es etl Ciis ad TEMPUS and Clinics Dental program fees, Tuition in embassies form ofdonations equipment foreign from support fees, Tuition and USIA Foundation Eurasia Tuition fees, OSGF, Foundation Eurasia Government, the Georgian Department, State USA the fees, Tuition Sources of Finance

128

CEU eTD Collection and private universities: XIII,Article 81). Table 5.5shows distributionthe stateoffunded student across public (Chapterresources other with difference compensatethe to authorized are institutions caselevelIn thetuition institutions. of exceeds state, bytheratethesetboth types of governmentaleducationsame HE of the rateprogram for equalall grants, whichfor is andprivate type freely determine the level ofstudent fees buttheis stateit thatsets the public both of Institutions scale. monetary sliding a on those by replaced been have meritbased,be uniformcontinue students fewto wereobtainablegrants that onlya by grants Although institutions. public and private accredited state all among choose to free are (vouchers), grants study portable for competition the won having who, institutions are eligible for governmental study grants. private where post-communistcountries few the of one Georgia makes This grants. whichallHE institutions, bethat public orprivate, areentitled receiveto governmental The Lawon HigherEducation, 2004 hasestablished a funding mechanismaccording to Hungary. Hungary. 52

s w ae se, aohr cuty poiig gvrmna rns t o-tt ntttos is institutions non-state to grants governmental providing country another seen, have we As 129 52 Thus, funding follows students

CEU eTD Collection for Education Reform and a Plan for its Realization its for Plan a and Reform Education for 1990s. mid the form only followed expansionunrestricted regulating subsequenttowardsprivate1991,butacts institutionslegal licensesto already issuein environmentwasnoted, authoritiespresentit the As Georgia in thattime. of started to developedsectorhadprivate epitomizesgeneralhighereducationthe which the policy largelyunregulated a fact, chaotic andenvironmentIn sector.entire HE against the of governancethe aboutprivaterelatesinstitutionsonly notHE to control and alsoof but brought have 2003 of events political the that changes all of fundamental most The Governanceand Control 5.2.2.3 all for equally accredited apply institutions, notwithstanding their ownership policies status. financial governmental as recently institutions of Institutionalfunding has becomeeven less helpfula criterion for tellingapart twotypes contributions. private by recourses governmental scarce compensate to institutions public from tendency increasing of because dimension stillthat was on blurring there significant but 2003, of changes the before funding of criteria the on private distinctly were institutions private tuition-dependent, exclusively being up, sum To Source: Total: Private Public Georgia in Institutions Private and Table ouet hc a olwdb asn fof passing by followed was which document, HEIs 5.5: Number of Students Admitted in 2006, Receiving State Grants and Self-financed, byPublic Grants State and 2006,Receiving in of Students Number Admitted 5.5: MoES Data in Martin Godfrey, Martin 2007. in Data MoES Total number of Students number Total admitted in 2006/07 in admitted 19479 15583 3896

Total 8271 1710 6561 130 grant 3793 2929 30% 864 Receiving state grants state Receiving

the Law of Georgia on Education on Georgia of Law the grant 2016 1647 50% 369 Among ThemAmong issued in 1995 was first such first was 1995 in issued

grant 1481 1225 70% 256

100% grant 981 221 760 State Program State

Financed 11208 2186 9022 Self

CEU eTD Collection characteristicpublicof institutions (Levy GeorgiaIn1992). inabilitytoo,the public of been has demands market labor changing the to responding in flexibility of lack a thesecondin sector that turnin affect thefirst sector (Pachuashvili 2007a). Ingeneral, changesspurringsector, the other the affectsector impacts:one changing dynamics in thatHE sector dynamicsGeorgiain for themost part reflects competitive inter-sectoral Availablesuggestsevidenceincreasedinsteadregulatory from measures. ensued later experienced shares market sector’s the and enrollmentsstudent total both of drop the MoEofficials).Neithertherethe anyindication is sharpthedeclinethat manifested in competition.Those that did emerged stronger to enrollmore thestudents (interviews withsurvive not could institutions smaller that fact the to due mainly was numbers institution in drop earlier the indicated, have officials government interviewed As before actually putting quality assurance procedure into practice in 2005. reviews. attestation of and then since downclosed or license a denied been even bases institution has However, no the on down closed were institutions private eight sector, expanded easily over control some establish to effort governmental of result Ministry,the highereducational effortsof leadership internationalandthe As experts. guidelinesthe accreditationand up for set procedure weredeveloped, throughjoint the LicensingCommittee the was when is MinisterialThis decision(Sharvashidze 2005). the following 1999, in again renewed be to 1997, in later licenses out giving stop suggesting that the decrease ensued from the regulatory measures. The government did evidence further no is there 1994/95, in enrollments) not (but institutions private of EntrepreneurialActivities 1997, institutionsquickly restructureto curriculumtheir course-offeringsand necessitated by h erin Cvl Code Civil Georgian the in 1999. Despite the fact there was some fall in the numberthe in somefall wasthere factDespite the 1999. in n 19 n and 1997 in 131 h a f Goga o Licensing on Georgia of Law the

CEU eTD Collection institutions not meeting the licensing standards were private. by HE organizations. Only 79 out of 178 institutions could meet nominal requirements set licensedalready of conductedinstitutional test validityaccreditationMoE the process, starting even before But up procedures. examination setting national unified and accreditation and method licensing strengthening were established Law Education time. of period long uncommonly an for post- most Georgia which in delayed was 1990s, the action, of middle the experienced in countriescommunist reactive state The authorities. state from regulation” to institutions private for “delayed or action reactive a common triggers usually which setting, anarchic an been in proliferate has it beyond, and region the in Both tuition. the pay would and could who those of needs the to cater to campuses new open and unparalleled enjoyed sectors,publicintroducedemanded highly typically offeredfreedomin courses,to not had too institutions public authorities, governmental from attitudenegligent the to owing However, 2003. of changes political the until absent the suit mostlyreformopposite:effortswere the the Quite economy. new requirements the of to sector the transform to undertaken were reforms major the that say to not is This tangibleself-paying competitorsthe emerge as studentbody. for to started institutions public 1990s, mid the from However, growth. private easy incredibly for factors enabling main the of one as served changes political-economic powerful developments. developments. 53

ail Lv a mlyd te tr term the employed has Levy Daniel h a f Goga o iesn nrpeera Activities Entrepreneurial Licensing on Georgia of Law the eae eae Regulation Delayed Delayed 132 53 Among practices that the 2004 Higher 2004 the that practices Among n eain t h Georgian the to relation in h uk of bulk The .

CEU eTD Collection them offer training in one or two highly demanded, low cost social sciencesocialdisciplineshighlydemanded, cost two low or one training in offer them exclusivelytuition-dependent pursueand pragmatic, market-oriented Mostofmission. University State of basis the on opened was Georgia in institution private first the fact, In institutionalpublic representatives.involvementthe and of effortactive established by facultywithpublic institutions theirmajorityMoreso,often facilities but well.was as impossible.Commonly, these small,non-university type establishments share notonly courseofferings,provesstudentnumbers, or profile on furtherdata accuratealone numbers, let obtaining that scant so is education” “more for demand accommodating institutions about information available The 1986). (Levy institutions absorbing” “demand- called so by dominated is landscape HE private Georgian the words, other institutions that are heavily tuition-dependent and serve demand-absorbing function. In type non-university small, of comprised mostly is sector private Georgia’s growth, PragmaticMotive: Mission Institutional 5.2.2.4 Institutions” also excludes privately owned educational organizations. Education Higher of “Property on XIV Chapter institutions. private to apply not do “PersonnelHigher Educationof Institutions” exception(withthe articles35)of and32 on V Chapter instance, For policies. hiring their defining and institutionsorganizing in self-rule more with institutions private grants Law The II). (Chapter control and powergovernmental less to subject are institutions private though institutions, public whole,theOn LawtheonHigher Education doesnot differentiate between private and uh a a, eoois uies mngmn, ad mreig huh the though marketing, training. and medical of availability is HE management, private Georgian the of feature distinguishing business economics, law, as such (Gvishiani Chapman 2002). Private universities of this type are type this of universities Private 2002). Chapman (Gvishiani As in otherin countriesAs restrictionswithnofew or imposed onprivate 133 the Tbilisi the

CEU eTD Collection 54 Affairs Public of Institute of founders the among whereas College, Business Robinson Mack Consortiumtheeffortsjointthe of by Georgian of Higher Education Institutions andJ. example, For institutions. to supportfinancial provide also which founders their internationalorganizationsamong various include they that is institutions semi-elite of features differencing the of One progress). in Levy and 2008 (Levy “semi-elite” as termed has Levy Daniel what qualify would research. academic on concentrating newly-emergedTherefore,most likepost-communist institutions top in countries, they than rather fields in high-demand instruction selected, providing by mission pragmatic similar type non-university a small serving establishments, are too institutions private top Georgia’s the factors, numerous by sector the of rest the from distinguished are they though Even 2001). Africa (CSB), (GIPA), are notable standards academic high set have region(Slantchevathe typical of Among Levy2007,Levy2007). and institutions that basicallystanding, Georgiais elite institutions true withabsence of the to regardWith medical science (PHOPHE Country Data Georgia). For example, around one-quarter of all institutions operating by 2000 offered degrees in associated with its provision. The existence of medical private institutions in Georgia once again once Georgia in institutions private medical of standards. of quality atthelack points existence The provision. its with associated

Internationally, private institutions seldom offer instruction in medical sciences because of high costs high of because sciences medical in instruction offer seldom institutions private Internationally, (TIAA) and and (TIAA) the International Black See Sea University Sea See Black International the the European School of Management of School European the the Grigol Robakidze University “Alma Mater” Mater” “Alma University Robakidze Grigol the GP) ws Ersa Fudto, te Uie States United the Foundation, Eurasia was (GIPA) the Caucasus School of Business of SchoolCaucasus the 134 the Georgian Institute of Public Affairs Public of Institute Georgian the EM, (ESM), 54 , the Tbilisi Institute of Asia and Asia of Institute Tbilisi the Caucasus School of Business of School Caucasus (CSB) was established was (CSB) (Kachkachishvili h Georgian the

CEU eTD Collection owtsadn h nrae aktn retto f pbi E oe private some institutions continue to hold on their HE, own. public of orientation marketing increased the notwithstanding grants state wining Evidently, 2007). (Godfreyinstitutionsprivate students at study to choose 2006 in (vouchers) of percent 20 than more that, therefore surprising not is It large. at population the within status and prestige greater its retains sector public the if evenmarket labor the recognitionhigherinstitutions much in these enjoy initiallyenrolled endure to graduate (Table 5.6). This explains why degrees granted by most some those of percent 60 about only that in successfulprivately-ownedhigh so institutions are standards requirement non-existent, virtually are students paying fee- refusing institutions public and private both of examples If have. institutions semi-elite the that rate drop-out a is Georgiansetting the in striking more even seems What (Gvishiani,2002).acceptedChapman gets study, the of cost the meet can who places in public institutions should pass one entrance examination, in reality everybody, student self-financed for candidates successful although and Georgia in institutions private of rest the to access an gaining for prerequisite sole the be to seems services the sector but also for paid divisions of public institutions. An ability to pay for desired havesetsome level selection of standards, whichunthinkable is notonly fortherest of they that is institutions,however,private top the characteristicimportantof most The own, all top private institutions are located in the capital city. itsinstitution of an has now citylarger everygeographic that the diversity so to added (Kachkachishvili Hungary) (Budapest, (LGI) Initiative Government Local and Agency Information Table 5.6: Graduation and Job Placement Rates for Selected Private Institutions in Georgia Georgia in Institutions Selected Private for Rates and Placement Job Graduation 5.6: Table

2001). Besides, while so called demand-absorbing havecalled institutions so while Besides, 2001). 135

CEU eTD Collection Alma Matter University Matter Alma (IBSU)University See Black International Business (CSB) School ofCaucasus Business (ESM) of School European Public Affairs(GIPA) of Institute Georgian some of their private counterparts do. But it is thought to be much lower than that of top private top of that than lower much be to thought is it institutions. But do. counterparts private their of some way the careers future graduates’ their of record the keep and follow usually not do institutions public 55 six institutions all concentrate market-orientedon goals. demonstrated, has sector private Georgian As the of fields. study demanded Kachkachishvili’s much and cost low selected, highly in do they education, quality delivering in succeed institutions private distinguished if even that say to is do share with the rest of the sector, however, is a narrow focus and specialization. This semi-eliteWhatinstitutionsprivate institutions.private differentiates other from them and quality and prestige academic signals this all – socio- clientele its high of status economic with coupled level placement job high institutions, from graduating and to access an gaining both for standards academic certain fees, tuition high base, financialDiversified alternatives. elite for room of plenty leaves from suffered has sectorGeorgia’spublic the that failurequality general that certaintyis more with said counterpart. public its than job better a does sector private semi-elite Georgia’s extent, large a to that state even can we suggested, been sometimes has it So, if we take the rate of employability to stand for the quality of education provided as Note: Source: sit Gogas tasto rm lne o a fe akt eooy truh tann f a new a of future training with through leaders countries neighboring economy business and market Georgia provide free to and a professionals business to of generation planned a from transition Georgia's assist 56 Accurate data for the employability rate of public institution graduates are lacking as the Georgian the as lacking are graduates institution public of rate employability the for data Accurate For instance, in the mission statement of the Caucasus School of Business we read that its task is is task its that read we Business of School Caucasus the of statement mission the in instance, For many graduates leave the country to continue their studies abroad. countrycontinuetheir to the leave manygraduates Sharvashidze 2005 Sharvashidze ( http://www.csb.ge/

90 87 89 62 97 (%)Rate Graduation )

. h ae ga f of goal same The 86 92 77 87 91 (%) Rate Placem.Job 136

56 Finally, much of the privatesectorthe Finally, muchof sitn eri n is tasto o a to transition its in Georgia assisting 55 What can be can What to

CEU eTD Collection of the Georgian Institute of Public Affairs. In serving its mission, GIPA takes responsibility for responsibility takes GIPA mission, its serving In Affairs. Public of Institute Georgian the of democraticstate, based onthe market economy, civilsociety and liberal values to is establishments religious these of mission main The recently. Gelati in opened art. Christian anthropologyChristianandtheology, on focusingstudents 150 accommodatesaround in inaugurated Formally Patriarchate. Georgian the by founded – institute Orthodox one included sector private Untilrecently, thelimited.private Furthermore, sectoris religiousthe too, the side on serving the needs of the country’s ethnic minorities. in withforeignthanstudents, ratherattract institutions to text-books attemptof an with Georgian or of absence the with do to has offer this However, which English. in organizations, education foreign with jointly established usually institutions, top few a generalizationare this to exceptions only The institutions. private most in example, For minorityGeorgian a notlanguagemainandcountry language the the provision 8). is of of (Appendix diversity that to cater that institutions educational higher private special with diversity population the national of to association exception literature’s an suggesting thus population, Georgia’s of diversity religious ethnic, and Ethnic-Religious Motive: finances are the main fields and in which research is conducted marketing at CSB. economics, micro and macro Management, generalization. this to notableexception is ScientificDepartment2002where establishedResearch was of in solely. functions teaching on concentrates dniyn, euaig ad tann eri' uue laes - pbi evns ad journalists and servants public - leaders future Georgia's training (http://www.gipa.ge/). and educating identifying,

play marginal roles in Georgia. This is despite the ethno-linguistic and ethno-linguistic the despite is This Georgia. in roles marginal play The Gelati Theological Academy Theological Gelati The Other motives for global private HE growth, such as religious 137 The Caucasus School of Business of School Caucasus The – another Orthodox institution - has - institution Orthodox another – h bls hita Academy Christian Tbilisi the is said to be the mission the be to said is 1988, t 1988, ehe Academy (CSB) -

CEU eTD Collection many countries in the region and beyond, but what makes them an extreme case is the extremeis case an makes thembeyond,what but regionand the countriesmany in in found pattern the fit mostly developments Georgian the conclusion, to come To 5.2.3 Conclusion with policymakers). population at large,the the governmental authoritiesand declined granting stakeholders a license (interviewsin triggered had fact this that discontent huge a to following institutionprivatebut a up set Muslimreligiousto groups attemptsby were there 90s, mid the In CatholicChurch. the provided by are funds main while 20) (around$ year at fee tuition of rate The 1994. and 1991 in attempts unsuccessful two after 1997, in granted non-orthodoxfinally was first institution Christian this to license the that noted be should It culture. and history theology, philosophy, in training providing establishment, secular a itself considers History, and Culture Theology, of Institute Orbeliani Sulkhan-Saba The Georgian Patriarchate. the of control and authority the under are they operate, to license official no Having governmentalregulation. the from free entirely are institutions HE religious the state, the on dependence financial complete of spite in that noteworthy is It Zviadadze). GiorgiFather(interviews with state the by born fully missioners futureare of training nation the of “re-evangelization” for missionaries and followers train educational establishment. establishment. educational 57 Although Although the International BlackSea University 57

138 (IBSU) is a Turkish branch university, it is a secular a is it university, branch Turkish a is (IBSU) the Sulkhan-Saba the is symbolical 50 Lari per Lari symbolical50 is . The costs of costs The in contrast, in

CEU eTD Collection that is left for private institutions to purse. usually associated roles withprivate sector.This,turn, influences in thechoice roles andof mission assume increasingly latter the universities, public resource-starved of survival in role crucial play contributions private as Namely, elsewhere. found patterns sector private certain defies case Georgian the that great so are system HE influences arenot limited to figures only. The inter-sectoral inter-sectoral influences in the Georgianthe But developments. HE private the on toll its took reform sector public- later, decrease, enrollment public to contributed extent some to proliferation preferred HE private least rapid the if the Thus, 2007b). (Pachuashvili students be to available alternative to out turn thus, latter, The institutions. private endowed poorly and undifferentiated nameless, the than legitimacy and standing higher have still that institutionspublic ranked lower at businessstudying for opt there get cannot who those However, preferenceorderings.students’ in near-first or first rank reputationusually solid a with universities private top few the courses, oriented business to comes it when that seems It HE. private the to back challenges creates reform public that turn, in so, privatize, partly to HE public pushes growth HE private As dynamics. HE private affected significantly has choice student increased resultant its andsector public the subjectsin demand high availability of wide A privatization. its enrollmentspublicexpanded fall, significantly,initial magnitude theirmatching of the frame, time same Georgia’spublicsector undergone has equally fundamental transformation. Following the During fall. spectacular its equally institutions, and HE expansion private incredible first the of establishment the witnessed has Georgia magnitudeandscale decades, thesedevelopments.twothanless of period Over of the 139

CEU eTD Collection wthn t te nfe w-ir sse ta ol ea seilzto ni the until specialization delay would that system two-tier unified the to switching launchedTbilisitheState Universityby during1994/95 theHowever, academic year. first been had which tradition, Anglo-Saxon the of and characteristic undergraduate studies of graduate system two-level the approved also It institutions. public into students self-financed admitting of policy widespread the for grounding legal firmer provided and institutions private to regard with regime regulatory elucidated practices initiated from below at institutional level already in operation. For instance, it sanction and void legislative in fill to was sought document the that aims major the of One EducationLaw.1997 the for basis the formedalso It field. HE the of reform the accommodate to intended was that MoE the by issued document consistent first Education Reform anda Plan foritsRealization” beginningThe secondthe of phase wasmarked approvalthe by of public institutions were authorized to admit whenself-financed students.1993 in about came change notable further A institutions. HE to autonomy and development, Georgia, of Republic the of Council mostnoteworthy legalenactedacts before 1995notable are the Among level. institutional the at mostly initiated attempts innovatory haphazard of set a and inaction governmental overall the by characterized is 1989 of changes political-economic the from starting Georgia in restructuring HE of phase first The 5.3.1 Legislative Framework Education Higher towards Policies Governmental 5.3 graduate level, while a four-year undergraduate track would provide students with students provide would track undergraduate four-year a while level, graduate The Decree of the State Council of Georgia of Council State the of Decree The passed in June 1991 facilitating the private HE private the facilitating 1991 June in passed 140 in 1995.in Arguably, constituted it the the DecreetheSupreme the of of 1992, conferring 1992, of “StateProgram for

CEU eTD Collection need and urgency of a fundamental change. several,reformeffortsthe wereincomplete, inconsistent ineffectiveand suggesting the if Even 2002). Chapman (Gvishiani titles academic confer to Council Professors’ authorizedthe that CouncilRectors’ the Ministryand the proposalof the followingto 1999 in decree Presidential the of passing was important Finally, 2003. in Georgia of Parliament the by endorsed and 2002 in MoE the by prepared was organizations- Institutions particular. in activities educational and general in undertakings entrepreneurial licensing for requirements and terms the elucidated the by resolved partially enactmentof was procedure licensing the surrounding uncertainty whole the licensing, for As recently. until applied not could process accreditation attempts, these despite that noted be educational must It HE Ministry, experts. international and the leadership of efforts joint the through new pause, process a accreditation of for guidelines years the developing two Committee, after Licensing the licenses of establishment out giving renew to decision Ministerial accreditation and attestation, 1999 the are notablemostperiod governmental this the Among procedures.effortsof licensing, via growth enrollment the regulating at aimednumerousmostlyministerialgovernmentalorders and followedby decrees was Law The assurancemechanism.introducingquality for bases provided and standards The 1997 Education Lawalso envisaged curriculum reform, defined thestate education partially only was mobility job their implemented. enhance thus and education generalist – a further legal act towards clarification of licensingtowardsrequirementsclarificationHE act of for legalfurther a – the Law of Georgia on LicensingEntrepreneurial Georgiaon Activities of Law the 141 The Law on Licensing Educational Licensing on Law The in 1999 that1999 in

CEU eTD Collection Indeed, the changes in the HE landscape just described have a certain resonance withresonancecertain a have described just landscape HE the in changes the Indeed, 5.3.2 Governance Structures for Higher Education Institutions private and public institutions equally. both to applies law the articles, several for Except 2004. December in passed was HE on law new the however,hearing, third the After version. original the of authors from even government, new the of proposal reform other any than disagreements more much of subject the became it respects, principal in previous-one the follows closely fairly law new the fact the Despite academics. from pressure enormous the to following removed was but positionsmanagerial of out older and 65 of professors leaving clause the contained also had law original The positions. administrative on faculty of limit age re-introducing governanceuniversity the (public)and in functions academic and administrative of separation vouchers, on new based mechanism introducing financial concerned changes notable most the examination detail, national more unified in procedures and accreditation out spelling from Apart group. working MoE Revolution post-Rose the by developed and refined further was law experts,government institutionofficials,politicians HE representatives.draft andThe ofthekeystones for the future Georgian HE involved groupa oflocal and international Council of Europe and the Open Society - Georgia Foundation (OSGF), while outlining laid down. The initiative came from the Georgian Parliament and was supported by the when the groundwork for a new law on HE (or more precisely, the first law on HE) was 2001 summer the from dated is that HE of reform legislative the of phase third The those in the rest of the region, but there are overriding differences, especially to especially differences, overriding are there but region, the of rest the in those 142

CEU eTD Collection – helduniversity – status whilewererest the highly specialized institutions typical theto pre-transition In Education. institutionGeorgia,one - only on Law 1997 the from missing universitieswere definingguidelines clear as recently until vague extremely remained had institutions HE of status the of issue whole The Sports. Academy Sports Georgian institutions; two but all over Ministry the 2002). The new Law on Higher Education has eventually established unified control of (Gvishiani,Chapmanministries branch different subordinatedto were 12 rest the and budget,annualstate the separate spendingoperatedin theyas units thatcontext meant Georgian the in which status, independent had 5 MoE, the of control and authority direct the under were 9 only institutions, public 26 all of result, the As Sciences. of Academy the and Patriarchy the ministries, branch called so included others them; of one just being MoE HE the agencies, different by steered be to Georgia. continued institutions pre-2003 in applied ever – reform legislative post-communist the was Neither componentof vital another - HE of system entire the establishingover controlunified Sciences. of Academy Georgian the of functions and structure the 2003,when newly the appointed Minister Education of pointed imminentat changes in of changes political the before agenda policy the on placed really not was research and teaching of integration the Georgia, In change. regime the of wake the in upon wasone ofthefirst steps thatgovernments ofnewly liberated countries have embarked institutions HE to function research the repatriate to that seen have We control. and compareCEEcountries.particularly to Thisis truewithrespectgovernance HE the to Soviet style HE system. Soon after the sweeping changes of 1989, many specialized many 1989, of changessweeping the after Soon system. HE style Soviet continue to be supervised by the Ministry of Culture and Culture of Ministry the by supervised be to continue 143 h Tiii Fn r AaeyAcademy Art Fine Tbilisi the the Tbilisi State UniversityTbilisiState the n and the

CEU eTD Collection approved by the president of Georgia, following to the recommendation by the Minister institution rectors were elected by respective Academic Boards (Scientific Council) and public Law, Education the of stipulations the to According rector. the with resided and centralized highly be to remained had institutions HE state of governance the mode, its considerabletransformationof despite changes, level institutional the to As choices. policy HE all approvalto final the granting command of in was turn in presidentwho the to function advisory direct had body semi-formal thethis other, by the appointed On were president. council the of members the hand, one the On profound. completely be to said be can independent fromthe stateinfluence, them this reliance inthe Georgiancase was much more of none while and agencies, coordinating otherpost-communistall In 2005). countries witnesswecreation the andlegalizing of (Sharvashidze 1993 in founded was institutions, public major the of representatives Institutions,EducationHigher State of Council Rectors’ the leadership, sector public the of interests aggregate the negotiating and advancing for betweenthestateandHE institutions caseServingpoint. in importantis an as channel co-coordinating in bodies intermediary the by played role The reference. explicit no made Law Education 1997 the which to place in practices other many were There by matched not was status the upgrading of organizational changes in the structure surge of educational establishments. the that add to needless public 26 of out 13 is It universitystatus. which a acquired had educationalestablishments2002 functioning by of result the as universities into turned institutions ofEducation. consideredIf appropriate, thepresident could also dismiss rectors before 144 comprised of rectors and rectors of comprised

CEU eTD Collection illustration of this point. Following to Roin Metreveli’s resignation, Rusudan Lortkiphanidze was Lortkiphanidze Rusudan resignation, Metreveli’s Roin to Following point. this of illustration 58 issued MoE the when 1995, in given were institutions over control some establish againstoverlyregulatory lax wasnoted firstnoteworthy It theregime.that attempts to evolved HE of system whole the but chapter, previous the in discussed as control changesof2003. Not only private institutions have escaped much ofthe governmental vividlyillustrate negligent attitudeGeorgian the of governmental authorities before the most procedure assurance quality and licensing of implementation with Problems and in defining terms for distributing the state support among its students. administrative an budgetdraftingwithScientific thein the unit,part Counciltook also Together 2002). Chapman (Gvishiani rector the and deans professors, departments, curricula,projects andscientific reports well as supervising as electionsoftheheads of approving as such matters important most for responsible body elected an – Council Scientific the activitiesof supervised rector the chairperson, the the As institution. an ofacademicadministrativeaspects both and of charge in was rector president,the the president. the appointment by in entailedprocess the fact actual vested with formal power to elect its rector who at the same time headed the Council, in institutionwas an of ScientificCouncil the though even Georgia: for true was reverse toward directed not if formality, Theexample). one (Hungaryelectedrector the is prestige of and enhancingstatus the mere a as serves it cases most public in institutions, of rectors dismissing well as approving in authority prime-ministerial the concerningpresidentialclause orthe the contain post-communist to HE legislation for forcommon is it While 1). Para 23 Article and 4 Para 17 (Article term the of end the of the university autonomy and was countered by several internal nominees. But as most of them of most as But nominees. internal won theposition. president protégée the theelections, several just before theircandidacy withdrew by countered was and a autonomy of university Nomination the of Georgia. of president the by position a seen gross violation as was bythepresident theUniversity with affiliation with noprevious candidate Rector’s the for candidate a as nominated The developments related to the Tbilisi State University rector appointment in 2003 provide a vivid a provide 2003 in appointment rector University State Tbilisi the to related developments The 145 58 Thus, appointedby Thus,

CEU eTD Collection rvt etr epnin lal, i ol e epoe o hatn h rwh o private of growth the considerably thwarting have for prestigious, less employed and endowed be poorly being could their of it spite in Clearly, which, institutions, expansion. sector private regulating and controlling of means effective an as play into brought was process accreditation which degrees institutional in experience communist post-communist own to contrast stark their in stands mechanism assurance awarding quality the continued and regulation new ofintroduction restricting toinstitutions public of the example Georgian 2002). The Chapman and (Gvishiani not by opted way institutions well-established any and in prestigious abide most the of some status, their Exploiting group. working accreditation the of functioning effective the over prevailed have to seems institutions public of accreditation opposing leadership institutional public from application.instigated pressure successful the a Secondly, for necessary detail and depth the lacked particular, in Law, Education The period. that of Georgia in setbacks enduring most be to proven had general in laws of implementation 59 varied, have efforts and pace Although 2003. in governmentalchange the after only The regulatory regime in which HE institutions operate started to change fundamentally country in general (Janashia 2004). licensingprocess sourcebeen corruptionhada of endemicsystem HEthethe andtoto the that indicate officials ministry the and stakeholders with interviews numerous as well as sector, HE Georgian the of studies Chapman and Gvishiani 2002 the and corrupt practices pervasivethe in licensing agenciesat of that time.pointing Both, theevidence 2000 Lorentzen ample is there hand, other the On one. denied been ever personnel, qualified has institution no and almost reality, in but license, a facilities obtain to required were institutions appropriate for standards certain meet they whereas started, get to 2004. institutions then earlier implemented get not would mechanismsaccreditation for necessary became license a formally, regulating enrollmentat the growthlicensing via accreditation and onlyprocedures. If was followed bythe numerousgovernmental decreesand ministerial orders,also aimed which Law, Education 1997 the of quality aims major establish the of one To was mechanism assurance field. HE the of reform the facilitate to intended document Realization”“StateProgramits Education for Planfor Reforma and private sector in Georgia. While public institutions still continue to enjoy higher prestige and status, evaluation. fear and quality tooto manyreasons have they prestige higher enjoy for to continue only still concern institutions a public While means no Georgia. by in sector is private quality that remembered be should it But competition. fostered

There are several reasons responsible for this. Firstly, not just higher education provisions, but provisions, education higher just not Firstly, this. for responsible reasons several are There 146 - the first majorfirst the - 59 To ensure To

CEU eTD Collection huh dfeet ln iitis ta a tk n a bde itiuin actively distribution budget a in stake had that ministries line different though institution,eachfinance for of level the deciding on in played Educationcentralrole – and Economy Finance, – ministries three level, central the At scholarships. order state the on based institutions was financingpublic to Allocationof 2003. changesof the basis forthe state funding for HEinstitutions inpost-communist Georgia before the Annualbargainingformcontinuednegotiations had factorandother to any ratherthan 5.3.3 Higher Education Funding Policies and management dismiss to administrative body officials right or initiate reorganization or liquidation of it. retains government the twice, accreditation obtain to fails institution an if but institutions. institutions public public for voluntary ten is Accreditation were year academic 2005/2006 the for students admit to nominal satisfied institutions allowednot institutionswere licensed among the that that note important to is requirements.It 178 of out 79 only which of result the as institutionsagencylicensedstarted HE carriedfunctioning, out,wasall revision of the Center Accreditation particular. in institutions, HE accreditation of out carrying Responsible for procedure assurance quality implementing and general in field the curbing included widespread corruption, policy-agenda establishing somecontrol overunruly processes taking place in reform the on objectives most major the The of one prominent. being education sectors, public all in undertaken were reforms atcptd i h rcs. Tu, te iity o cnm oehr wt other with together Economy of Ministry the Thus, process. the in participated was set up in October 2004. In the same year, but before the before but year, same the In 2004. October in up set was 147 The National EducationNational The

CEU eTD Collection couldshunbudget evenrecommend cutsor changes structure.tax the Only through in Council the President, the to body advisory an of status privileged the and authority significant Having exaggerated. be cannot institution each for funding the of level president.the of Theinfluence thatRectorsthe Council brought bearonsettlingto the decisivefinalizingstage in draft financial the reached hadplanbegan office after it the Economicstogether with theMoE and allother branch ministries concerned. But most of Ministry the of prerogative the was hand, other the on scholarships, order state of proposed deemedbudget,imposeda appropriate. Determiningif on limits numberthe and reviewed which Finance, of Ministry the with continued it activities, educational out carrying for necessary funding the institutions of level with the started on agreed Having but themselves. agencies and actors of host a involved institutions public to support state of amount actual the determining of process protracted The fee-paying students widespreadandundemanding solution foundGeorgiaincreasein tonumber was the of recourses additional for seek and compelledbase financial their costs diversify to institutions actual and received between discrepancy the Certainly, 2002). institution tended to be much lower than theeach actual operating costs (Gvishianito Chapman allocated funding of level the costs, capital not but expenditures recurrent considered only formula the as However, institution. each at instruction of cost unit per the of estimatesFinance Ministryof the and students of numberconsideration the into took that formula a on based were turn in norms financial state The 19). Article Law, Education (The approval final its for president the to it submitted and order state financialthe draftedapprovednorms,mentionedstate ministriesand definedjust h xesv eoitos ad brann rcs i h rf ugt rah the reach budget draft the did process bargaining and negotiations extensive the .

148 . Most

CEU eTD Collection negotiated allocation mechanism lacks incentives for efficiency (Albrecht, Ziderman 1992). Ziderman (Albrecht, for efficiency lacks incentives mechanism allocation negotiated 60 oftuition fees in major source ofincome. For instance, forthe academic yearof 2001-2002,the amount becomethe to extentinstitutions,public somethe studentcontributions to grown have In 5.1). (Table 1993 increasingsince rapidlybeen institutions publichave studentsin students.tuition-paying of number the increase to was recourses public for an starved institutions maintain in level to staff oversized way obvious One countries. OECD is which in 1 than to higher considerably 7 was Georgia in institutions public in ratio teacher student year, academic2001/02 For staff. redundant largely dismissing than rather preserving for employed been had enjoyed have institutions that personnelhiring prerogativeof The Georgian institutions is a clear illustration for highly inefficient use of scarce recourses. encouragingmore efficient use ofrecourses. of characteristic funding by not fee-payingcompensatedstudents and increasein been throughthe Georgiahad state the in fall dramatic the that surprising hardly is It countries that rely on negotiated budgets. to typical is internally, funds approved already re-allocating in autonomy of lack the surprisinghardlyas is This marginal.prescribed budget-spending be a to courseused line-itemform. The degreeof leeway exercised byrecipient institutions to deviate from a in presented was budget the negotiated, once receive, to wished they support state whileinstitutions hadenjoyed considerable autonomy decidingin amountonthe theof Parliamentdeliberationfor ultimate and approval (Gvishiani ChapmanFinally, 2002). expenditures, the highest proportion spent in every institution turned on personnel wages (Gvishiani wages 2002). Chapman, personnel all on of turned institution fact, every In in spent proportion universities. highest Georgian the expenditures, the at staff teaching and administrative excessive downsizing 61 To increase the share of salaries within the total expenditure was another major way used to avoid to used way major another was expenditure total the within salaries of share the increase To The Georgian evidence is consistent with international data and the literature that recognizes that recognizes that literature the and data international with consistent is evidence Georgian The theTbilisi State University, the MedicalUniversity and the University 61 We have seen that the number of self-financed of number the that seen have We 149 60 Excessive number ofpersonnel found in

CEU eTD Collection comdt oe ta 0 pret o l tdn nolet, bt wtot any without but enrollments, student to all of rapidly percent expanded 30 than sector more accommodate private the Furthermore, requirements. licensing mechanisms, enforcing in approacheven governmentallax authorities took the that evidenceample control quality is other there However, institutions. of licensing basic a or to limited was role government’s accreditation Absent posture. policy the to closer was before environment policy The Georgia. in 2003 in HE has accompanied the governmental change through the so called “Rose Revolution” towardspolicies public the in shift fundamental a that demonstrated has section This 5.3.4 Conclusion 2006, when the loan scheme was first implemented. unavailablewas until studies,studentaid their for studentspaid of half than more that fact the Despite2007).(Godfrey commercial banks cooperationwith in initiated been its of process efficiency, likedownsizing the staff at universities. The Besides, a student loan scheme has sections. previous in implementationaccompaniedbeen has increasingchanges other aimed by at economic discussed were which of details EducationHigherintroducedvoucher-based on mechanism,fundingLaw the 2004, In the rest 3 percent from other sources (Gvishiani Chapman 2002). andbudget state the from camepercent 41 fees, tuitiongenerated fromrevenueswere university total of percent 56 estimated an average, In received. finances public the CultureLanguages Foreignand of financial support from the government. Private institutions thus evolved in almost in evolved thus institutions Private government. the from support financial were respectively 2, 3.2 and 5.4 times higher thanhigher times 5.4 and 3.2 respectively2, were 150 laissez-faire

CEU eTD Collection 5.4.1 Economic Development Education towardsHigher Policies Governmental of Determinants 5.4 competitive the from shift sharp a represents thus Georgia field. the in place taking processes unruly over control some establishing and widespread corruption curbing towards step important another represents 2006, in held first commercialbanks (Godfrey 2007).Theintroduction unifiedof entrance examinations, cooperationwith in initiated been sliding has scheme loan student a Besides,a scale.monetary on those by replaced been have students few a only by obtainable were theirowntuitionAlthough fees. grants continue meritbebased, to uniform grants that set institutionsto HE permits it universities,while private and public between choose to grants receivingstate studentsallows whichimplemented policynewly funding the byreinforcedfurther is HE in sectors two the competitionbetween The competition. inter-sectoral the fosters naturally universities all for meet to challenging is it that so set requirementsare quality That accreditationcriteria. and licensingdemanding with comply to need institutionsprivate and public dramatically: changedboth has operate institutions HE which in regime regulatory the reforms, implemented policy-making. the Following HE in role active an assume to start government the did 2003, of completeindependence fromgovernmental authorities. Onlyafterpolitical the changes Former Soviet Union standards. The extreme economic dependence of peripherieseconomicextremedependenceon The of standards.UnionSoviet Former Georgia’seconomic remarkablytransitionbeen has the difficult,judged whenby even policy posture. 151 laissez-faire otethe to market-

CEU eTD Collection 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1990 1989 States. Based on World Development Indicators database, 2007. Employment Ratio Data since 1998 since Data 2007.Employment Ratio database, Indicators onWorld Development Based States. Source: as employed of (number Ratio Employment and USD) Georgia aged in population 15-59) of percentage 2000 (constant capita per GDP 5.7: Table selected countries on main economic variables see tables in Appendix 9). notquiterecoveredhas frominitialthesharp decline (howGeorgia compares otherthe economy the GDP, real in growth gradual a been has there as well as 1990s, mid the keyeconomic of indicators show thatalthough inflationtherate of washeldback from proposed the some of include that 5.8 and 5.7 Tables implementation hampered.became restructuring economicplan of prospects 1992, June in escalated conflicts privatizationinternalefforts wereadvanced,aimedtradeat as liberation the butand of reform some presidency, Shevardnadze’s of beginning the At collapse. economic the to contributing factor additional an as served has energy imported on reliance absolute almost Georgia’s economy. the of breakdown complete in resulted have conflicts civil Georgia,inter-ethnic and chaos, political dependency with coupled however,this of case In economic1994). (Hunter devastating republics Soviet had former has all for period consequences Soviet the during existed that center the based on labor force survey onlabor based

TransMONEE 2007 features: data and analysis on the lives of children in CEE/CIS and Baltic and childrenCEE/CIS lives in of and onthe analysis data 2007features: TransMONEE 971 880 823 733 687 648 629 604 579 517 459 1,493 1,749 capita GDP per

63.8 74.1 72.7 67.2 83.6 82.0 ratio Empl. - 65.1 67.3 69.5 70.9 68.9 64.4

152

CEU eTD Collection Table 5.9: Public Expenditure on Education in Georgia (percent of in GDP) Georgia onEducation Public 5.9: Expenditure Table CIS nations and is the lowest in our sample countries (Appendix 10). in lowest the of one be to remains Georgia educationin for support state The 2002). in spent amount the of half roughlyconstitutedonly still it 2002 by growingsomewhat but been expenditures has Georgianthe GDP collapsed morepercent.bythanSince75 mid1990s, the education span time same duringthe account that into taken be shouldeducation, allocationit to state the in slash unparalleled the of scale the comprehend fully to But 5.9). (Table 1994 in percent 0.5 to 1991 in percent 6.4 from fallen had GDP the within spending public of share the when transformation, of phase first the during felt strongly most was education to support public in drop severe the that therefore surprising not is It 2000. EBRD, 2001. Centre, Source: 1989-2000 Georgia EconomicIndicators, 5.8: Table 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A d a Based on EBRD, 2000. 1999: estimate. 2000: projection. projection. 2000: estimate. 2000.1999: Based onEBRD, Based on EBRD, 2000. 2000. EBRD, on Based 34.7 33.7 32.7 31.8 28.7 26.0 25.4 28.6 38.4 69.9 87.6 100.0 Growth GDP Real

a 3.0 3.0 2.9 10.8 10.5 2.4 -11.4 -25.4 -44.8 -20.6 -12.4 4.8- (%) GDP in change Annual b developing

b ER,20.19:etmt.20:poeto.projection. 2000: estimate. 1999: 2000. EBRD, --- 73.2 71.7 57.0 42.2 28.3 33.5 24.1 50.5 76.5 111.2 100.0 Wages Real countries (Orivel 1998, Gvishiany, ChapmanGvishiany, 1998, (Orivel countries

153 c --- 4.4 19.3 3.6 7.1 39.4 162.7 15, 606.5 3 ,125.4 887.4 79.0 4.2 rate inflation Annual d

c Based on Based

CEU eTD Collection --- 1989 increase in fee-paying student numbers. the with line in clearly 1990s, mid the from only rise to started enrollments sector Public place. took growth intensive most the and founded were institutions private student body during the first decade of the transformation. This is the period when first its in fall percent 20 some saw sectorpublic institutions opened,the were new several that fact the Despite 5.1). (Table enrollments sector public the in trend downward a by marked was institutionspublic for governmentalsupport the in decline corollary spurred. has funding state the in slash the on HEcan be traced. Besides, wecan insteadlook intoinstitutional level changes that notwithstanding,clearbetweenlink a economicleveltheof development andspending caveats the But lacking. is 90s, of half first the for especially development, HE for the baseMoreover,reliabledata institutional level.the originatedat mostlychangeshave emphasized, have sections preceding As Georgia’s transformation. of political-economic phase first the during level governmental the at conceived policies many not were there that the reason simple shaped the has for HE decline towards economic attitude governmental how of analysis definite achieve to hard is It 2001.Centre, Source: A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research UNICEF CEE/CES/Baltics, MONEE Project, Transition: the of A Decade 6.1 1990 6.4 1991 4.0 1992 0.6 1993 0.5 1994 154 0.9 1995

The collapse of the economy and its and economy the of collapse The 1.2 1996 1.3 1997 2.2 1998 --- 1999

CEU eTD Collection sector is also telling in case of Georgia. The private HE sector, it was shown, isExcess-demand establishments.educationalabsorbing” “demand shown, small by dominated was it sector, HE private The Georgia. of case in telling also is sector relationshipThe between economic privateperformancenaturecountry of the and a of for personnel administrative increasing efficiency and has been remarkably slow. academic excessive and programs redundant reducing else or curriculum contents, course improving towards movement whereas demand; labor-market changing the to cater that programs high-demand academic, way public institutions have responded to the sharp economic decline is to develop new words,theother In marginal.been curriculumcoursecontents has and the changesin furtherthem, run establishedcampusesto branch languages differentand programsin Azeri languages. However, while most public institutions have launched new academic and Armenian, German, English, Russian, in offered are courses Georgian, official besidesRevealingly, economics. and law in programs run not did that organization educational public a find to hard is it Today, languages. foreign and administration, market labor the to business law, informationtechnology, like fields attuned in trainingproviding by fluctuations stay to hard tried have institutions Public blurred. decidedlybecome Georgiahas in sectors two the pursuedmissionsby undertaken and activitiesbetween distinction the that great so is contributions student on institutions tobalance declining publicsupport byprivate contributions. The dependency of public efficient use of available recourses.encourage Instead, public institutionswould have increasingly soughtthat way the in not though, significantly; HE public of structure Furthermore, thestudy hasfound that powerful shiftintheeconomy has influenced the driven private sector, according to the literature, is mostlycharacteristicdevelopingliterature, is of the accordingsector, privatedrivento 155

CEU eTD Collection societal activity. The HE field was no exception. The creation and growth of private of growth creationand The exception. no was field HE The activity.societal military with conflicts preoccupied had failed tointroduce reforms ineconomic, government legislative orany other sphere of the that wonder no is It figures. political key its among struggles power and strife interethnic by plagued been had Georgia years, post-independent early the During 1994). (Hunter manipulation and control external the to Ensuingvulnerable more still state newborn the made Georgia. has turn, in in instability, developments post-Soviet on impact damaging most had have them among conflictscontinues and cleavagesreligious and ethnic multiple that state exaggeratedto be not will It heterogeneity.religious and ethnic own Georgia’s and control its under region important geopolitically keep to determination Russia’s are These mentioning. bear factors principal several but democracy to path troubling Georgia’s for responsible reasons the upon dwell to paper this of scope the beyond conflicts, military and political is It economy. its witnessed of collapse and clashesinter-ethnic order, and law deteriorationin has country the Union, Soviet the ofdisintegration the followingimmediately years the During 1991. in independence gained Georgia domination, Soviet and Tsarist the under centuries two about After 5.4.2 Political Parties and Ideology development and theeconomic size and nature of privateof HE sector. level the between link hypothesized our out bears also it and pattern Levy1987, Weisbrod 1975). Georgia’s private sector clearly fitsthedeveloping world 1987,(James HE. on demand the all meet to unable governments are wherecountries HE – one of the most dramatic shift in the whole history of the Georgian HE -took HE Georgian the of history whole the in shift dramatic most the of one – HE 156

CEU eTD Collection t i ifcl o ctgrz erin pltcl pris acrig t h Western the to according parties political Georgian categorize to difficult is It second. Block blocks. electoral Gamsakhurdia’spopularvote, the several percentReceivingof 54 into divided remained rather but 1990, October in held elections first the for unite not oppositioncould the goal, single the mobilizedaround also undifferentiated them and same the appealed non-communistto despitebeingBut majority. of all Initially, communists. defeating and Russia was from groupings independence created newly all of agendas political to central notwithstanding, Party Republican the Party, Monarchist Righteous fragmentation of the old ones. Important among those were followingThe yearlater.yearsproliferation sawa group- politicalnew of parties and which was followed bythe establishment dissidents, by led politicalgroup grew Russia from independence of prospect the as Georgia, Duringperiodthe of the early 90s are extremely vague. interestnor part ofpolitical party programs.Even interviewed experts’ recollectionsof public general of subject neither was HE of future the question, autonomy academic and institutional of exception the With changes. these to attending or introducing in preciselyplacegovernmentperiod, timebut during this officials playedrolehave little lsiiain o t r-hita n xesv ainlsi dooy ideology, nationalistic excessive and pro-Christian its For classification. o 5 et n20sa alaet hl while parliament, 250-seat in seats 155 won e y Gamsakhurdia by led glasnost and the Ilia Chavchavadze Ilia the Society, perestroika h ainl Idpnec at NP, the (NDP), Party Independence National the , 157 the Shota Rustaveli Society - and , political movements started emergeto in h acsa Club Caucasian the the Communist Party Communist the Round Table Free GeorgiaFreeRoundTable the Society of Saint Ilia the . was founded in 1987, foundedin was h is informal first The anotherpolitical Differences . the Round the came the came

CEU eTD Collection the fact that there exists a little diversity at the level of programs ideology,of leveldiversityandthe little despitethereat existsa that fact the correlationpoliciesnaturebetweenof on restsideologicalthe partyand the a stance of policies establishmentthe otherthanOrthodoxof Christian institutions.weak Thereasona for exclusivist-nationalistic excessive the prevented have change regime the noted, of years early the during Georgia of characteristic was it As a up opening seeking university. groups religious different for denied was license a when instance the to relates apparent is factors two between correlation the when example notableThe Georgia. of policycase partychoices andgiven in ideological a stance of relationshipbetween the the trace difficultto ratherproves It Georgia.government in Table5.10maps themajor shifts HEthepathdevelopmentof in against thechanges in which Education, on Law the established foundation for reforms in many including areas, were passed during these four years. laws, important Several productive. Union Citizen’s Georgian the country ingeneral. The parliament electedin1995 where communist successor regulate the sector to some extent should be attributed to the stabilization of situation in and in step to action governmental reactive token, same the political- By powerful changes. economic the of consequence unexpected was it region, the of much in other,had little do to with marketliberal stance ofthe firstly elected government. Like the on services educational public of privatization and hand, one the on institutions HE private of growth sudden and appearance shows, evidence the As values. these to support general than detailed more hardly was program their However, principles. market free and pluralism political advocated also elections, first the for registered Table the impressive multiplicity of political parties in Georgia. A careful scrutiny of scrutiny careful A Georgia. in parties political of multiplicity impressive the can be seen as a right wing grouping. The party, like all other political groupspolitical other all like party, The grouping.wing right a as seen be can a noe 8sa aoiy poe o b relatively be to proved majority 48-seat enjoyed had 158 the

CEU eTD Collection over the abstract ideal of autonomy - a major accomplishment of the previous working group - that had that group - working previous the of major accomplishment a - of autonomy ideal abstract the over disenchantment general expressing than account their in specific more hardly were experts interviewed Revealingly, work. extensive of years many of achievement the distorting wholly of accused was he as time his same the at and changes any without minister law draft the The adopting and plagiarizing for blamed office. were team in month two first his during law new the passing for opportunity time one- a missing with charged was he and changes the of consequences painful havefor society the preparing 2003 in of without hurriedly too changes opposition reforms sweeping political initiating outright for responsible the held an was after minister new triggered the soon revealed, experts had Higher with it on conducted experts, interviews draft Law international As previous and draft the stakeholders. local on the of based that group largely a was fact group, by the working authored ministry Despite new the by agendas. prepared political Education, own and ambitions personal by shaped part most the for be to reforms, education higher ongoing of discourse the over dominance 62 disadvantaged situation. more in population the of groups unprotected and vulnerable socially put will about bring will proposals two the that institutions HE between as well as studentsbetween oppositionparliamentary solely on social-protectionistin grounds. As they argue,now increased competition party the by rejected is scheme testing unified national and CitizenUnion’s Party Rights RightsNewParty. center the to right been has ministry new the mostof proposal market-oriented reform be to considered be can attempted. what of being critics vocal is most the system though, Surprisingly HE of restructuring fundamental Union Soviet the ofdemise the since time first the unexpectedhardly as proposedschemeis reform the highlighting example debate that the reforms initiated after the changes vivid of 2003 have triggered. Resistance to Most the by offered is output policy HE later. of nature the for ideology party debate of insignificance the of subject the becomes pre-electiontheir appealsnor in neitherfeatureissuesacademic related autonomy, HE institutionaldifferent of idealsourcesgeneralfrom and apartshowsthe thatsupport to the document (interviews with policy-makers). policy-makers). with document(interviews the read having not when even Law the on outlook preconceived their had respondents the of many that is point noteworthy the version, new the of faults and virtues the Whatever draft. new the in astray gone t ses ta o ut pltcl pris u otl ulo f lcl eprs suig virtual assuming experts, local of outlook hostile but parties, political just not that seems It soeo h he ate hteegda h euto of result the as emerged that parties three the of one is collapse 2001.in Both theintroduction vouchers of financingin HE of Led by a group of politiciansgroupof businessa with by backgrounds,Led 62

159 the Georgian the the Newthe the

CEU eTD Collection Policy: Education the Higher Changes in Important parties that lack organizational coherence and resources. Personal ambitions and ambitions Personal resources. and coherence organizational lack that parties unstable and small overpopulated by be the to remainslandscape party politicalGeorgian attempts, these Notwithstanding 1999. in elections following the for percent 7 to threshold the raising by again laws electoral changing for rationale the clearly had blocks and parties increased to53 bythe 1995 parliamentary elections. registered Encouraging larger coalitions was of number the coalitions, to forming as so encourage threshold percent 5 a of introduction the Despite Georgia. in registered wereparties political elections,35 1992 the For general. in systemscommunist party policies advocatedby politicalparties reside with fragmentation and instability ofpost- of nature the and ideology party between relationship weak a for explanations Other Georgia Outcome in in of Choices Electoral Light Policy Higher 5.10: Education Table

to appear institutions start -1991 Private establishment institution for private Georgia – basis Council of of the Supreme -1991 The Decree Round Table 1990-1992 majority: Parliamentary Gamsakhurdia 1991-92 President:

the

Council the Accreditation - 1994 creationof fees charge tuition permitted to institutions are -1993 public Council the Rector’s -1993 Creation of HEIs autonomy to conferring Council of the State -1992 The Decree (CUG) the Piece Block majority: 1992-95 Parliamentary Shevardnadze 1992-95 Parliament: Chairmen of the

160

licensing 1999- Resuming on Licensing -1999 – new law granting licenses Suspension of 1997 – Education -1997 Law on realization and aplan for its education reform program of 1995 – State Citizens Georgian the Union of majority: 1995-99 Parliamentary Shevardnadze 1995-2000 President:

Activities Educational on Licensing -2003 The Law reforms work for HE -2001 preparatory academic titles Council to grant Professors right to the Conferring the Decree -1999 Presidential Citizens Georgian Unionof 1999-2003 majority: Parliamentary Shevardnadze 2000-03 President:

the

procedure control quality establishing - 2004 mechanism based funding voucher- introducing on HE - 2004 Law Movement National 2003: Majorityfrom Parliamentary Saakashvili. 2003 President:

the

CEU eTD Collection funds are allocated not in the amount of it. The shift in HE policies after which after policies HE in shift The it. of amount the in not allocated are funds governmentalchangesfundingresultthe mechanism thethe of is in howgovernmental to important fullreceivingstudentsuniversity public of is number the in decrease the emphasizethat It mechanism. funding formula voucher the introducing before state the by funded fully those and tuition whole the paying students were only there studenttotalnumber received governmental full fundingcontrast, By (Godfrey 2007). the of percent 5 than less only as time same the at studies, own their for paying were intra-sectoral even more students, that is, around 58 percent of the total public and university enrollments, inter both encourage competitions reflect the major shift in the governmental ideology towards HE. In 2006, that policies funding context. Georgian Governmental the in precedent no have and dramatic are universities, public well-established for even comply to difficult is it that so process assurance quality recent strengthening and procedure exam centralizedentranceuniversitiesdrastically,setting the public Indeed, at staff the down cutting funding, voucher to principles. moving as such developments market-liberal toward economy the reorient to and corruption rampant combat to institutions, Western into country the integrate to is which(declared)determination government,resolute of newthe the proposalsof reform all among ambitious most the of one been has standards European to closer theMoE, reform the plan thataims overhaulingat system the ofHE andthus brining it the for support solid more offer conjecturedrelationship between party ideology and HE policies though. 2003 Launched by of changes the after developments The and political in differences ideological underpinnings than continue to structure the party system in Georgia. rather politicians leading between animosity governmental financial support to HE applies to both public and private institutions and 161

CEU eTD Collection can take part in the legislative process through a hired lobbyist. Despite the fact that fact the Despite lobbyist. hired a through process legislative the in part take can 50exceed not numberwhosepeopledoes of group or entity legal any 1998, in passed influencing in to According deals policy. transparent governmental and legislation less on rely to continue associations business lately,growing been has number Althoughtheir associationsbusiness few. and weak regimehaveencouraged formation interest of groups Georgia.in Yet,trade unions are communist the of disintegration the to subsequent changes economic and Political democracies.Western in prevalent advantage political obtaining of means predictable and indirect transparent, more then rather personalism, and nepotism clientelism, as such arrangements involves there interest sectional advancing of process the since Georgia, like countries in process policy public influence groups interest organized differentwhich in ways the and effects actualdiscern to harder even proves It 1981). interests, let alone measuring them empirically, has always been challenging (Schmitter identifying and defining politics, modern of workings the to significance its Despite 5.4.3 The Mode of Interest Intermediation government and form the part of its strong market-liberal politics. the from originate changes current the negligence,governmental total of background the against funding institutionaldecreased corollary its and macroeconomicpressures to response institutional an was earlier experienced privatization HE rigorous while Hence, HE. into principles market free inject to tendency recent the reflects tuition their of cost the of fraction some least at bear to made are students more and more lobbying and campaigning activities are legally permitted in Georgia, there has been has there Georgia, in permitted legally are activities campaigning and lobbying 162 the Law on Lobbyist Activities Lobbyist on Law the

CEU eTD Collection been accommodating and conflict-free. Quite the opposite; while particular faculty particular while opposite; the Quite conflict-free. and accommodating been hasHEimpression relationsectorscreate an between in the twonot thatshallthe This sectors. private in earnings supplementary and seekingopportunities employment leadership, additional their and institutions public of members were many Georgia Precedingchapters have emphasized thatamong firstfounders private of institutions in president of the country. the on attention its focuses Council Rector’s the that wonder no is it president, the with resides decision-making Higherpower main the As State Georgia). of InstitutionsEducation of Council Rector’s the of (Statute institutions HE to funding state of priorities scientific and technical progress, training, and standards of higher education professional of structure directions, reform development, from - encompassing HE on issues various concernsbebroughtto theirto attention. advisesIt for the decision-makers onall- and decision-makers other and president the to available made be to expertise special for channel main the as serves body coordinating semi-formal this solely, interest associations. Comprised by rectors and representatives of public HE institutions Georgia of Institutions Education policy, HE of formation the influencing In formal less methods other for securing their policy objectives and (Nations in Transit, Georgia 2003). connections personal using favor to continue associations business that suggests again once organizations,which lobbyist registered any hardly leadership hasalways viewed theprivate sector theas threat and competitor for student employment,their part-time from benefited and of idea the welcomed have members has been the most powerful and important of all of important and powerful most the been has defining the prospects of modernhighereducationprospects of defining the 163 the Rector’s Council of State Higher State of Council Rector’s the to allocation of the

CEU eTD Collection the Accreditation Council proved to be utterly unproductive. During its two years of years two its During unproductive.utterly be to proved AccreditationCouncil the political and social equilibriumworkingsevent,generateany the and ofIn obvious beenmade.losershas the upset would which effort reform any hardly of presidency, years 11 his throughout why, reasons the of one be fact in may governance of rather than any other political or social factors, but his “balancing politics” and his style personalityShevardnadze’s to ascribed commonly been has country the in Stability policymakers). with (interviews protests street student into grown had that conflict exacerbated an resolve to in stepped Shevardnadze skills, balancing his for Famous in mobilized rectors institution private institutions would besubject to qualityassurance procedure was ferociously resistedby Beingperceived unfair as prejudiced,and proposalthe according which to only private was to control the growth of privately owned institutions. represented, heavily were rectors institutions public which in Council, Accreditation the of purpose main The parliament. the Committeeof HE the of capacity in created was AccreditationCouncil the decree, presidential 1994 the following when, Council suddenlymultiplied private institutions were given yeara after theestablishment theof privately ownedinstitutions. Most noteworthy attempts aimedat curbing the growth of more than 33 thousandstudents (that 27 is percentof totalenrollments) studying at 131 organize could institutions themselves state as agroup. When thecouncil was first founded in1993, of there already were rectors the before place took growth private the of werebulk the emphasized that be should It 1993. institutions in fees tuitioncharge permittedto public after pronounced more become The has interests. hostility institutional underlying their protect to means various used has and cohorts existence, the Council held about two dozen sessions without producing any outcome. the Rector’s Council of Private Institutions Private of Council Rector’s the 164 .

CEU eTD Collection at, as aig a bod acs o plc-aig a aae o wield to managed has policy-making, to access countervailing influence on the course of HE developments. broad A resultant policy towards a having also party, opposing an or interests partial their of pursuit successful for needed intermediation organized for capacity lacked either have they but expansion, sector private the on constrainsputting by institutionalinterests their defend to attempted has sector public communist countries andbeyond. As evidenced bythis study, high-ranking staff of the unreceptive,wereas nothostile, if theprivate to alternative casemostthein post-is as leadership HE public well as officials MoE the that fact the toward point study this especiallyinterviewsundertakenfordata, conclusion,of sourcesdifferent to come To chance for gaining access to HE (Gvishiani Chapman 2002). second the with applicants grant to the again once result, modified were guidelines admissions the As regulation. the on influence countervailing exert to attempted who rectors sector private of interests the compromised turn in of This consequences competition. the off ward thus and back procedure admissions the changing in succeeded leadership institution state sector, public the of division paid a against year.Threatened by the prospectthat many students wouldopt fora private alternative academic an during institution one in program single a to apply only could entrants HE 1999, Before conflict. ensuing an for basis the as served year same the during institutions private for apply to scholarships order state the enabledby awarded not that students procedure admissions the in made Adjustments 1999. in underway got which procedures admissions over battle policy a from comes interests colliding specialbalanceof a shapedby been publichas policyhow Another tellingexample of private sector thus reflects the influenceprivatesectorreflectsdispersedthusthe by individual interestsbalanceof or 165

CEU eTD Collection organizational adaptation to the resource decline. In other words, the fact the Georgia’s their in sector, private with associated usually roles undertaking institutions public One explanation for the absence of private institutions with ethnic and religious focus is by one Catholic HE establishment (PROPHE Country Data: Georgia). 2000served that mission, whileother than Orthodox Christianreligion was represented by registered institutions private 200 than more of out two only believers, Christian languages. Despite the fact that overwhelming majority of the population are Orthodox diversityprivatethat no thereinstitutionsare as providing education ethnicminority in reflectshardly growth sector private of nature the seen, have we As group. religious population,secondtotallargest constitute the the percentof followers,around10 with religious Muslim believers. Christian Orthodox the are inhabitants its of percent 84 the of percent 6 heterogeneous less country’spopulationalmost religiouslyGeorgiais respectively.and as 7 about by spoken are Azeri and Armenian while percent, the speaks Georgian population language. Thesecond largest language group Russian is spoken aroundby 9 Georgia’s of percent 71 about census, 2002 to According 5.4.4 Demographic, Ethno-Linguistic and Religious Factors intermediation characteristic of the Georgian society should also be counted. privatesectorexpansion, the for way the paved have that factors various the among words, other In interests. group colluding public sector widely offers studies in theology and religion as well as courses in the in courses as well as religion and theology in studies offers widely sector public 166 the specificclientilistthe arrangement interest of

CEU eTD Collection is noticeable only since 1989, the expected consequences on HE enrollment rates enrollment HE on consequences expected the 1989, since only noticeable is decreasedpercentcohort4.2the by decade ratesin overfall the (Table a But as 5.11). has population total of 0-17 aged population of share the too: Georgia independent post-communist by experienced characteristicDownwardpost-been demographic of has 2008).countriestrend (Levy challenge demographic a is dynamics sectoral inter- to connection in literature HE private the by cited factor important an Finally, Georgia becomes explicable. goals economicand factors, somewhat aberrantprivate publicandnaturesector of growth organizational in in pluralism limiting political the overridingimportanceof the consider we if Hence, (Pachuashvili2005). policies the justify to discontent well-expressedsocietal and prevalent evoked often have fact, in authorities state The organizationalmajorityaccordsociety.thevalues choices with goalswerein and of of ethnic-religiousconstrains to state noteworthy the that is GeorgianIt government. the by adopted policies exclusivist by thwarted altogether was institution private Islamic a create to attempts whereas efforts, failed of years several after 1997, in established History and institutionshardly possible. ChristianOrthodox than other of existence the made have which transformation, the further been of phase first the during has politics Georgia’sunderlyingideology state the pursue by restricted to sector private the for goals organizational of set The environmental niches left for the private sector to fill in. restricts Azeri, and Armenian Russian, as such minorities,country’s the of languages h is o-rhdx Crsin (ahlc nttto a only was - institution (Catholic) Christian non-Orthodox first the – The Sulkhan-SabaThe Orbeliani Institute Theology,of Culture 167

CEU eTD Collection thousands) (beginning of year, 0-17 Population age increase population ofRate natural enrollments Higher education during the first phase of the transformation, characterized by an overall governmentaloverall an transformation, characterized by the of phase first the during place took privatization sector pubic steep as well as enrollments private the in fall phasesof the HE development inthe post-communist Georgia. The major increase and distinct vastly and discernable two are there demonstrated has study undertaken The 5.4.5 Conclusion 2000projection (2000), onEBRD 1999estimate, 2001based Centre, Source: Georgia Change Demographic in of 19-24and population) (percent Enrollments Higher 5.11: Education Table 1989 reaches the university age. afterpopulationborn the of part the 2006/07,whenconsiderable becomefrom mostly inaction. As we have seen, a seen, have we As inaction. A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A

n/a 9.1 n/a 1980 mong various factors that have paved the way for the for way the paved have that factors various mong 1,589 8.1 19.1 1989 1,579 7.9 23.8 1991 168 1,553 -- 19.4 1993 3 1,49 3.4 26.1 1995 1 1,36 0.1 29.0 1999 1,285 n/a n/a 2000

CEU eTD Collection even regulatory ones. But, the Georgian example, where both public and private and public both where example, Georgian the But, ones. regulatory even HE, on factors other political-economicdemographic,or of influence the downgrade responsechangingwithinitself,fieldthe thein to tolabormarketnot This is demand. place taking processes the of reflection a mostly is Georgia pre-2003 in HE the of growthdynamicsand nature the that exaggeratedstate be to not will It HE. sectorsin two Georgia’s of types the between also but patterns, growth the between only not correlationclear a is thereseen,have equally we spectacularAs for made privatefall. institutionsprivate ensuing expansion,of possible,public the which,together withhas spectacularexpansionmade has HE on demandunleashedstudent meet institutionsto factors,notablyinter-sectoralmarket forces, on public initialfailureof Thedynamics. importantother of influence the and sectorsprivate and public the betweenexists that relationship crystallizedthe demographiccharacteristics,constant has quite as well as backdrop of a fairly unchanged regulatory regime and broad political-economic picture, the against place taken have HE of field the transformations of major these That HE. in sectors two the inter-connectednessof concerning generalizations important lends it that view of point the from interesting also is development HE in phase first The arrangement of interest intermediation characteristic of the Georgian society. clientilist specific the is institutions private of growth unrestricted the of core the at liemight what Finally, virtuallyanybody’smeans.withinoperate to license a getting made have which general, in country the in and system HE the in pervasivepractices corruptive was providers private in increase an fueling further factor related closely A 1990s. early the of course the in by plagued was country the that chaos general the and collapse economic the were important expansion sector private unfettered institutions evolved in nearly complete freedom from the state authorities shows how shows authorities state the from freedom complete nearly in evolvedinstitutions 169

CEU eTD Collection influence that political party ideology can have on the course of HE developments remarkablegovernmentalThese changes in highlightapproachthe again failure. once quality and chaos from suffered also have latter the that seeing institutions, public degree thatstrengthened regulatorymeasures are directednot onlyat private but also at the to out stands Georgia competition. inter-sectoral encouragingand choice policies, student increased market-liberal strong to negligence complete of that from regulatorywhichregimein institutions bothtypesoperate of changed has considerably demonstrations,The resign. popular to Shevardnadze forced elections, parliamentary when fraudulent by triggered 2003, of changes political the after only making The government became a key player and started to assume an active role in HE policy- sectoral dynamics. inter- shapes HE in sectors two the between competition and demand market labor 170 .

CEU eTD Collection The plan of the chapter is as follows: the first part offers a detailed overview of the of overview detailed a offers part first the follows: as is chapter the of plan The increase in fee-paying student shares both at private and public sectors in HE. post-communist country to have implemented student loan scheme, to balance the steep highest shares of tuition-paying students in the region. However, Latvia also is the first the of one has Latvia studies, their financing universities public at enrolled students percent 70 almost with fact, In considerably. lessened has financing sector public sector and overall higher education enrollments. It is notable that the role of the state in publicshrinking backgroundof the against place taken enrollments,has sector public privatesectorLatvia,increase measured in absolute in comparedtermsboththe and to the that fact the is remarkable more even But growth. sector a private the in even decrease and slowdown a by followed expansion initial strong a experienced have that countries the Georgia, and Romania Estonia, neighboring the in that than higher considerably is sector private Latvia’s the at enrolled students of share the Notably, Poland. after region, the in largest second the is currently sector HE private Latvian the enrollments, student all of one-third almost Capturing steady. but gradual rather Despite the earlystart, the ensuing increase in the share of private enrollmentshas been growth. sector HE private the private of legalized pattern distinct have markedly presents Latvia to institutions, countries post-communist first the of one Being Introduction 6.1 Latvia’s private and public HE sector dynamics. From that starting point the analysis the point starting that From dynamics.sector HE public and privateLatvia’s CHAPTER 6: THE CASE OF LATVIA 171

CEU eTD Collection in the share of university age population but, as Table 6.1 shows, in real terms as well. measured as onlywidened has not HE accessto the that noteimportant to is It 2003). Latvia, in Education (Higher HE in participated group age same the of half almost 2001, in that so enrollments the in increase further a saw years following The 1). aged19-24was enrolled institutionsHE at highestthe figureregion- the (Appendixin doubled to its 1989 level. In 1999, for example, more than 46 percent of the population shortlyafter was rapidso that already by1998, followedtheHE participation rate had more that than growth the hand, other the On Lithuania. and Estonia in as marked as not was percent 2 some by decrease this though first, at Latvia in fell enrollments HE sharply, increase to started it Before 2001). Centre, ResearchInnocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade (A standards country communist the by high notably still was level participation HE the 1989, at by institutions enrolled cohort age youth 19-24 of percent 20 around with though States, Baltic other the in than lower somewhat was Latvia pre-transition in HE to Access 6.2.1 Inter-Sectoral Dynamics Sector Education Higher the of Structure The 6.2 Latvian the determining for government’s level attitude towards private HE. national at factors various of weight relative casestudypresentsthe assessmentpart finalof Thean the field.HEchangesof the in powerful facilitate to designed policies governmental different examining to moves Table 6.1: Numerical Overview of the Public-Private Higher Education Sectors in Latvia, 1990-2008 in Latvia, EducationSectors Higher Public-Private Overviewof the Numerical 6.1: Table 172

CEU eTD Collection public institutionshad already doubled by1993/94 theyear– when thetotal number of Latvia of Republic are Such maritimeaffairs.sciencesmilitary,and legal like fieldstraining specialists in on focus pedagogy,institutionssciences,humanitiessocialopenedwhichnewseveral wereand ManagementSchool and Pedagogy Institution are notable change public providers of HE. Among the firstand public universities private established after the regimeboth in increase the through achieved been has enrollments student in Severalother points emerge from Table above.6.1Firstthisremarkableall, of growth Source: trend in HE enrollment dynamics from that point up until 2004, when public sector public when 2004, until up point that from dynamics enrollment HE in trend upwardstrong a been has There lowest. the was institutions HE at studying students 1999/00 1998/99 1997/98 1996/97 1995/96 1993/94 1992/93 1991/92 1990/91 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1994/95 Year

Data obtained from Central Statistical Bureau of Latvia of Latvia Bureau Statistical obtainedfrom Central Data (1993), (1993), oie cdm o Latvia of Academy Police Institutions 60 60 57 56 49 37 36 33 33 33 33 30 28 26 26 14 14 10 Stockholm School of Economics of StockholmSchool Total (1992), and and (1992), Latvian Academy of Culture of Academy Latvian Students 127760 129497 131125 130706 127656 118944 110500 101270 89509 76653 64948 56164 46680 39683 38967 42217 46279 45953 Latvian Maritime AcademyMaritime Latvian Institutions (1994). Alongside these mostly concentratingon mostly these Alongside (1994). 38 38 36 36 30 20 20 19 19 19 18 17 18 19 20 14 14 10 19) (1991), Public Institutions 173 Students 87047 90500 93742 94215 94370 91745 89724 87207 78156 68025 58271 51378 44048 38046 37908 42217 46279 45953 National Academy of Defense of the of Defense of Academy National 19) (1990), (1993) and and (1993) are stateare funded 31933 30172 29856 30674 30944 32257 32988 34129 32572 32763 31633 30944 30536 which Of - - - - - Rezenke Higher Education Higher Rezenke (1993). The number of number The (1993).

Riga Higher School of School Higher Riga Institutions Private Institutions 22 22 21 20 19 17 16 14 14 14 15 13 10 7 6 - - - Students 40713 38997 37383 36491 33286 27199 20776 14063 11353 2632 8628 6677 4786 1637 1059 - - -

CEU eTD Collection institutions publicself-financed of enrolledstudentat shareshighest the of one has Latvia fact, In enrollments. sector public in increase the of much financed have themselves students that means This same. the roughlyremained has universities public at places funded state of number fluctuations,the some despite that evident further it makes 6.2 Table Latvia. in enrollments sector private than rather public affected has HE on demand the in decreaseoverall far, thus emphasizedthat, againbe should is But 1989.since Latvia downward demographicthe attributed characteristicto trend be should whichof2005, from only noticeable is numbers student total the in decrease The HE. on demand overall declining of face the in hitherto sustained been well, has as growth numbers private whereas absolute in but private the to relation in just not declined have enrollmentspublic emphasizethat to important is It again. fall to enrollmentsstarted .

174

CEU eTD Collection blurred in Latvia (The Ministry of Education and Science, 2003). This blurring is not blurringis This Science,2003).Education and Ministryof (The Latvia in blurred rather is status non-university and university with institutions between distinction the that however, noted, be should It establishments.educationalnon-university type practically in focusedsubjects, therecent public instruction institution growth has been dominated by offer institutions type non-university and university both 2003). Science, Although and Education of Ministry (The figure higher times 7 than more is that 946, 54 constituted universities public at students science social self-financed state-fundeddemandsciencesocialprogrammes,highnumber ofstudents in the while 716 7 were there example, for 2002/03, In fields. oriented commercially pragmatic, on been mostly has growth enrollment public the that therefore surprising not is It Table atypical for the region where, following the changes of 1989, most formerly narrowlyformerly most 1989, of changes followingthe where, region the for atypical Source: 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1993/94 1992/93 1991/92 1990/91 1994/95 6.2: Numerical Overview of the Public Sector in Latvia,1990-2008 Sector in of thePublic Overview Numerical 6.2: Central Statistical Bureau of Latvia Bureau Statistical Central institutions Number ofNumber public 38 38 36 36 30 20 20 19 19 19 18 17 18 19 20 14 14 10

enrollments 87047 90500 93742 94215 94370 91745 89724 87207 78156 68025 58271 51378 44048 38046 37908 42217 46279 45953 public Total

enrollments enrollments as theshare of total Public 69.89 71.49 72.09 73.93 77.13 86.13 87.32 88.75 89.72 91.48 94.36 95.88 97.28 68.03 175 81.2

state fundedstate Number of students 30172 29856 30674 30944 32257 32988 34129 32572 32763 31633 30944 30536 31933 - - - - -

Tuition-paying students as the as students share of total of share enrollments public 66.66 68.15 67.44 67.21 64.84 63.23 60.87 58.33 51.84 45.71 39.77 30.68 63.32 - - - - -

CEU eTD Collection legislations. The creation of private institutions in Latvia, however, was preceded by preceded was however, Latvia, in institutionsprivate of creation The legislations. respective in loopholes existent exploiting institutions created newly of result the as mostly post-communist but countries other many in HE governmentalof providers extra- of proliferationwitnessed 1990s of beginning The 1991. in as early as Latvia in created was institutions HE private of establishment the for basis legislative The 6.2.2 Private Higher Education Institution Growth Patterns Latvia, 2003). in Education (Higher field study specific a on focusing profile narrow more have University, (medical) Stradins Riga or Agriculture of University Latvia University, Technical Riga like status,university the institutionswith rest The fields. study most LatviaUniversity of for 2002, of beginning example,universitythe institutionhadonlyoneonly12 But status. among them – the by registered institutions 40 of Out establishments. educational non-universitytype of are Latvia in operatinginstitutions HE of majority 2001). (OECD professional to opposed as academic as categorized programmes between distinction the clear is neither content, their by Judged professionalprograms. as well as academic offer institutions and universities both as Latvia, in fuzzy especially is establishments HE of types two the between demarcation of line the However, changes. structural concomitant implementing specializedinstitutionswithoutuniversityoften upgraded and haveto levelstatus their PhD levels (Law on Higher Education Establishments, Section 3). Section Establishments, onHigher (Law Education levels PhD and M.A. B.A., three all at degrees grant to entitled are and fields scientific more or one in education 63

The Law on Higher Education Establishments of 1995 defines universities as institutions that offer that institutions as universities defines 1995 of Establishments Education Higher on Law The – can be classified as “classical”classified as university be offering can instruction in– 176 63 Whatever the differences, the differences, the Whatever the

CEU eTD Collection Latvian private sector is the absence of private institutions with the university status.university the with institutions private of absence the is sector private Latvian Concerning the nature and types of institutions, one of the distinguishing features of the Source: 1993- in2008 Latvia, EducationSector Higher Private Overviewof the Numerical 6.3: Table notwithstanding the overall decline in HE enrollments since 2005. prevailed has share market sector’s private the in as well as enrollments student and more noteworthy is the fact that the steady increase in the number of private institutions even But region. the ofin largest second the year is sector HE private academic Latvian the 2007/08, the by enrollments student all of percent 32 almost Capturing growth that followed after has been measured but continuous (Table 6.3, Appendix 11). QualificationorganizingCentreAdults of Trainingthe and of "Attistiba" Pedagogies the permissive legislation and not vice versa. non-university type institutions (for the list of institutions see Appendix 1). There areThere Appendixinstitutions 1). see of list non-university the institutions (for type Over 90 practically oriented study programs, mostly at B.A. level, are offered by the 22 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1993/94 1994/95 Central Statistical Bureau of Latvia Bureau Statistical Central Institutions Number ofNumber Private 22 21 20 19 17 16 14 14 14 15 13 10 22 7 6

a is rvt nttto a one n in founded was - institution private first Enrollments Number of 38997 37383 36491 33286 27199 20776 14063 11353 40713 8628 6677 4786 2632 1637 1059 Private

as share total share as 177 enrollments enrollments Private 31.87 30.11 28.51 27.91 26.07 22.87 18.80 13.87 12.68 11.25 10.28 8.52 5.64 4.12 2.72 HE Higher School of Social Work and Social

„Attistiba”.

91 b re- by 1991 The privateThe

CEU eTD Collection Lithuania Latvia Estonia Size private institutions are organized around few a and sometimes onlysingle a study field. BalticLatviathe onlycountriesin in but general.Irrespectivein theirbulksize,the of student 000 7 over Accommodating enrollments, students. 000 5 than more – one and 250 than less enrolling institutions two only are There category. 250-4000 within falling Table 6.4 above shows quite even size distribution of institutions in Latvia, the majority Feature or Transition Phenomenon? Source: byCountry Sector Private Establishments of Distribution Size 6.4: Table Latvia.of parts different in institutions branch seven has instance, for Institute), Russian country. the across operating institutions branch several have half than more while one, least at run majority The Latvia.institutions of differentall operatealmostregionalparts thatcenters in fact the compensatedby concertation is heavy this Though, 2005). Vanags, and (Hansen city That is,16 out of17 institutions operatingin Latvia by 2004were located in the capital Latvia’sprivate sectorheavy is concentration privateof institutions capitalthein Riga. of characteristic salient Another level. doctoral the to course-offering their extend Ltd Turiba, Administration, – two only and programs M.A. provide that institutions few pcait n lw cnmc, bsns, lnugs nomto ehooy and technology information languages, business, economics, law, in specialists Administration Business and Economics of School International Riga Morten and Vanags, 2005. 2005. Vanags, and Morten 2 2 13 0-250 The Baltic International Academy International Baltic The 1 4 5 251-500 n and 3 2 3 00 501-100 The PrivateTheHigherSector Educationin Baltics: the Permanent in h atcItrainlAaeyAcademy International Baltic The Transport and Telecommunications Institute Telecommunications and Transport 2 3 4 0 1001-200 178 , is the largest private institution not institution private largest the is , 1 2 1 0 2001-300 0 2 0 4000 3001- col o Business of School (Previously 0 0 0 00 4001-50 ht trains that 0 1 0 >5000

- that - Baltic

CEU eTD Collection diitain uia t, Ltd, Turiba, Administration, 1993, in Ltd Reinman and Ltd. Centrs Biznesa Birznieka foundations CooperativeAssociationTuriba,Central and the by Established 3). paragraph companies 7, (Section commercial of status the between choose can hand, other the on institutions, HE Private 2). and 1 articles 7, Sectionamendments, 2006 and 2000 its 1995 Education, Higher of Institutions on Law (the institutions state as AcademyDefense National Latvian include Exceptions law). public of entities InLatvia, most state HE institutionshave legal a statusof derived public persons (legal StatusOwnership 6.2.2.1 indicator of high standing that private institutions enjoy in Latvia (Kasa 2003a) additional an as serves universities public top in study-fees be then higher considerably to tend institutions private top newly in fees the tuition that of fact The competitiveness sector. unparalleled established of suggestive itself enrollment in the but is study dynamics this of scope the beyond is offered services of quality Evaluatingthe 2005).Vanags, academiccorruptionand (Hansen to subject less seem and methods teaching up-to-date more use classrooms, and libraries equipped better sizes, class favorable more have too Latvia in institutionscounterparts, private public the study of private HE sectors in the Baltic countries has found that to compare to their law, as such Finally,economics,relations,businessmanagement.administrationpublic truism and sciences social in all though fields, several in programs accredited is with profile institutions broad Other relatively generalization. this to exception notable is mathematics opn n prts i codne wt h omril Lw hl Academy Christian while Law, Commercial the with accordance in operates and company n and ihr Sho f Sca ok ad Sca Pedagogics Social and Work Social of School Higher School of Business administration, Turiba, Ltd Turiba, administration, Business of School

o xml, bas te sau f te iie liability limited the of status the bears example, for which, together with state colleges, are registered are colleges, state with together which, 179 h ava oie Academy Police Latvian the The School of Business of School The n and offering . Latvian

the

CEU eTD Collection financing by the state. According to the possible rationalization of this exception this of rationalization possible the to According state. the by financing "Attistiba"Pedagogies Social and otherdonations butrarely theformin direct of funding. and buildings only), (loans aid student of form the in support governmentalfinancial some receive do institutions Private fees. student from comes countries, communist post- other in like Latvia, in institutions private for funding of source primary The Funding Institutional 6.2.2.2 Stonis. For the list of interviewees see Appendix 12). Janis with (correspondence tax corporate paying from exempt are institutions public whereassubject,institutions privateare all which accordingto Corporate Tax on Law the by resolved was issue The taxes. paying to subject were Law, the of provisions the despite institutions that, public for also but private for only not true is this Latvia, In great. particularly been has institutions HE of status tax extension, by and legal, of issue the surrounding confusion the but general in developments post-communist Thediscrepancy betweenthelegislation andempirical reality hasbeen characteristic of reality,however, corporate In privateinstitutionsmostpay taxes.do 6). and articles5 reconstruction materials and equipment importofthe taxesfor from as releasedwell customsbe from as shallfees, duties and forcelegislation the in with foundationscolleges and as whichgivesthem Education. At the level oflegislation, theLatvian government treats all HE institutions Higher Institutionsof on Law the with conflict in not are they as Foundationsinsofar "Attistiba" fee y itriwd Ades Ruvnes (ertr eea f te Latvian only had authorities government that the fact the with do to of has this Council), Reactor’s general (secretary Rauhvangers Andrejs interviewed by offered are registered as registered are as in addition to the fact that that fact the addition to in foundations and comply with the Law of Associations of foundationsLawand comply the withand

is a single institution single a is (Section 78 (amended in 1996, 2000 and 2006) 180 right to receive tax relief in accordance in receiverelieftax rightto institutionshighereducation of receiving considerable considerable receiving HigherSchool Socialof Work direct

CEU eTD Collection should solely be related to personal reasons (interview with Juris Dzelme). Juris with (interview to reasons personal be related solely should 65 these programmes. two cohorts between thestudent for a competition is there currently 64 6) and 5 articles 78, (Section taxes paying from them exempts thus and foundations to institutions EstablishmentsHE all Education equates Higher on Law 1995 the Although backing. financial indirect of level high particularly a for eligible are nor funding state direct receive neither they is, That region. the of much in case the is as funding of dimension the sector.the of to these two institutions,this kindof fundingpolicy has neverbeen extendedtothe rest Whateverunderlyingthe motivation principlesand behindproviding monetary support 2000). university”)students Loza at of (Kasaand costsprocedure covers the wherebystat the provides principle employed for its funding is unavailable, save for the speculations that the state Church, Lutheran Evangelical seeminglyreceiving substantial state financing is needed. state the that workers social train could before Work percentstatefunding forprivate institutions. seemsIt that 50 to up allowed uncertainty, and euphoria general of time the during was formulated that Education on Law 1991 the Indeed, established. was university private privatesectormeanssourcesfinancing of abouttheand vagueidea Latvia’swhen first Institutions of higher education shall be released from customs duties and fees, as well as from taxes 78). Section Law, and(The equipment materials of reconstruction from the import for as well as fees, and duties customs from released be shall education higher of Institutions force in legislation the with accordance in relief tax receive to right the have they and foundations, to 66 The Law stipulates that, as taxpayers, institutions of higher education and colleges shall be equated be shall colleges and education higher of institutions taxpayers, as that, stipulates Law The funding state obtaining in institutions these of standing privileged viewpoint, another to According that sp Latvia, of University the by offered and developed was work social on program the Later, has received the benefit of the direct state funding also because no institution no because also funding state direct the of benefit the received has nietindirect 65 In fact, privatefact, distinctIn institutionsnearly as be on Latviato outinturn iaca i hog feig suy gat o is suet (“the students its to grants study offering through aid financial 66 , it has always been difficult for private institutions to institutions private for difficult been always has it , huh acrt nomto bu h mut or amount the about information accurate though 181 theChristian Academy oftheLatvian 64 theHigher School Socialof Another private institute private Another

CEU eTD Collection sharegovernmental of funding 2002/03for constituted percentonly 5 (Aldis Baumanis the that so then since lessening been has support state the that, here added be should academicgovernment.It2000/01the theyear income from for total the percentof 10 funding. state direct the of absence the despite region, the in commonlyfound as trivial as not is channels diversity. regional providing different those the through received supportgovernmental financial of level the Altogether, to especially institutions, private to forms private other in relevant donations and building offers in government local studying a Sometimes, students institutions. for grants aid different student that common provide also ministries is it however aid, student of form widespread most constituteinstitutions state-recognizedprivate the in enrolled those for loans Student students. institution private through funding includes funding governmental indirect of source Other 4). article 78, (Section respectively funding governmental allocate therefore and research of conducting or field specific in specialists of preparation about institutions private state-accredited with agreement into enter may - other ministries or MoES the that be - authorities governmental Law, Education Higher the contractualformthe of in relationship between statetheandinstitutions. According to governmentalinstitutionsprivateis financialavailablesupportof for source main The taxes on tuition fees (Kasa and Loza, 2000). paying from exempted are who students their through is institutions private to apply does that break tax of type one Yet, Stonis). Janis correspondence with 2003, Stonis and Lacis (Dzenis, providers private for responsibility tax corporate established has which Tax Corporate on Law the passing after especiallyprovision, this of use make 2005). The main distinguishing characteristic of private institution funding in Latvia, in fundinginstitution private distinguishing characteristic main of The 2005). The School of Business Turiba, Turiba, Business of School The 182 for example, obtained more than moreexample,obtained for

CEU eTD Collection 67 HE materialnumberfull-timebase,for of professors thosewithdoctoral It for degrees. public or and private the for establishments; set institutions of both sectors need to comply to the same requirements standards for assurance little quality is there in Lithuania, neighboring difference its in like Latvia, In aid. student of forms different for eligible are and degrees state-recognized granted are institutions private though Ministers, of Cabinet the accreditation is not compulsory by for private institutions. Yet, only students of accredited established regulations the to process according accreditation out carrying for responsible also is Ministry The function. and founded be to order in need institutions which license a granting for responsible is MoES the Latvia, In activities. day to day their manage to freedom substantial missionthey aspire serve.to Once authorization granted,is private providers andaregiven scope the on deciding for institutions private on imposed constraints little are there manner, same the In 2001). (OECDadministrative structure organizational and the as well as research, scientific of directions basic establish and admissions student to autonomy considerable determine the content andform of study with programs,to setcomplementary conditions granted for are general in institutions HE Latvia, In Governanceand Control 6.2.2.3 to stop not to control these practices (interview with Juris Dzelme). governmentalThepolicymakers. officials and authorities,neither however, tried have governmental among fact known widely and well-established is it activities, these languageproviders coming fromAlthoughRussia. hardy anyformala theredata is on Russian for financing of source important and additional an is there that is however, degrees in Russia. There were cases of students, who have never been to Russia, obtaining diploma obtaining Russia, granting to been to learning) university. (notdistance a Russian from never have connected who students, activities of cases illegal were even There Russia. and in degrees practices academic dishonest the with associated Juris Dzelme has also emphasized that some of the Russian language institutions were noted to be to noted were institutions language Russian the of some that emphasized also has Dzelme Juris 183 67

CEU eTD Collection coordinating between HE establishments, governmental agencies and the public at public the and agencies governmental establishments, HE between coordinating and HE in strategy national the developing institutions, HE of accreditation about most the is latter include which of tasks Latvia, The intermediaryin bodies all prominentof (HEC). Council Education Higher the and MoES the of recommendation Ministers,followinga of Cabinet the by taken institutionis an down College Economics and Veselumaaugstskolapieejas "Izaugsme" Academy Technology requirements. quality the with complyinginstitutions not of account on down institutionsclosedprivate severalhave 1996, in Latvia in started evaluation quality of process actual the since that note to externalexperts form thekey parts ofthe HE quality assurance process. importantis It by evaluation and self-evaluation accreditation, acts, regulatory these to According Higher for Education Institutions Regulations approved by the Cabinet Accreditation of Ministers in the same year. the in out spelled further were institutions programmesHE study and the requirements and to terms the whereas1995, in passed Establishments Education Higher on Law the by provided were process evaluation quality for guidelines General Committee. Coordination Education Higher Baltic formulationassurancequalityapplicationguidelines the the elaboratedand of were by Recommendations for co-operate. to together come countries three the which around and experiences which to emulate, the issue of quality assurance has served as the point models for elsewhere looking country each of period bearthe After States parallels. significant Baltic the in practices evaluation quality the that surprising hardly is by the Saeima (parliament), includes leadership of both public and private sectors, private and public both of leadership includes (parliament), Saeima the by large.shouldIt be notedheremembership, itsthat proposed MoESa byandconfirmed , ia Hmntra Institute Humanitarian Riga (HEQEC). A decision concerning reorganizing or closing or reorganizing concerning decision A (HEQEC). mn hm were them Among

184 (not translated) (not ,

niern n Information and Engineering nentoa ors School Tourism International Baltic CollegeBaltic taking decisiontaking and and Business ,

CEU eTD Collection would qualify what Levy has termed as “semi-elite” type institutions. focused andselected narrowly fields these in institutionshighprivate rankDespite this,establishments. are institutions private university.Latvia, In suchfindmotivationno we behind institutionalthe growth all as University were Such Humanities, 2003). (Tomusk disrepute into brought challenging and substituting for existing institutional order, the legitimacy of which had of mission distinctive and ambitious an out carrying institutions private the of witnessed creation communism of collapse the of FSU aftermath the immediate and the CEE countries, some In oriented. application and practical essentially be to and sciences computer mathematics, in informationtechnologies. Even thesein cases, thefocus privateof institutions remains instruction offer they as humanities, Management Institute, TelecommunicationsAdministration, Transportand Institute them institutions,among few a Latvia has followed the pattern observed elsewhere in the region. In fact, there are only dynamicsinsector private pragmaticmission,the the serving thus and low-costfields Mission:Pragmatic Mission Institutional 6.2.2.4 Confederation and Student Union. Employers’ Latvian Industry, and Commerce of Chamber Latvian of representatives government meetings (Higher Education in Latvia, 2003). in Latvia, Education (Higher meetings government 68 The Minister of Education and Science is ex officio member who represents the Council at in the in at Council the represents who member officio ex is Science and Education of Minister The of

soi’ s frt piae isiuin and institution, private first s Estonia’ eau Belarus Providing instruction in commercially oriented high-demand and high-demand oriented commercially in instruction Providing – which extend their course offerings beyond social sciencesand offeringssocial beyond course their extend which both designed after the model of a Western comprehensive Western a of model the after designed both Riga International School of Economics and BusinessEconomics and Internationalof School Riga 68

185 non-university

h soin Isiue of Institute Estonian the h uoen Humanities European the and and ye educational type InformationSystems

CEU eTD Collection ethnic group, constituting around 30 percent of Latvia’s residents. The rest represent rest The residents.Latvia’s of percent 30 constitutingaround group, ethnic largestsecond the is Russian population. the of percent 58 than more not for account sector growth patterns.Latvia is a highlyheterogeneous country where ethnic Latvians influence, privateshaping for pragmaticmission,potent the after importantfactor most secondperhaps a been has factor ethnic the motive, religious the to contrast In studies and fields like public relations and social work. Latvia’s three main religious groups, to offer them education in both religious and bible from students enrolls Academy the population, the of segment specific a for catering than Correspondingly,rather together. values academic and religious bring to rather but faith religious particular a promote to not is mission declared its Interestingly, 1993, in academicprogramme humanitiesin andtheology B.A.at andM.A. levels. It 1997. in accreditationstate get to first the of one as well as 1993, as early as Latviafounded in Academy Latvia. in growth private the in role minor played has motive religious the heterogeneity, religious such Despite details). more percentofthetotal population respectively (CIA World Factbook, see Appendix 13for andOrthodox Christians two other - major religious groupings account– and for2015 Lutheranscountry’s population. the of percent 22 around with religiousgrouplargest its decline to a far greater extent than Roman Catholicism, the latter has grown to be the to due but century,fifteenth the since here religiondominant a been Lutheranism had Motive Ethnic-Religious Belarusian,Ukrainian, Lithuanianand Polishminoritiesethnic WorldFactbook).(CIA , previously , Lutheran Deacon Institute, was one ofthe first private institutions ava hita Academy Christian Latvian fes bt rfsinl porme, lk patcl telg” and theology”, “practical like programmes, professional both offers hr s a sgiiat rlgos dvriy i Latvia. in diversity religious significant a is there : s aohr nnsclr piae institution. private non-secular another is 186 Latvian Evangelic Lutheran Christian Lutheran Evangelic Latvian Established

CEU eTD Collection Vanags, 2005). Closed down as the result of political decision following the corruption charges, the charges, corruption the following decision political of result the as down Closed 2005). Vanags, and (Hansen studies economic and business towards considerably changed was which focus, technical 69 population altogether. minorities, for it would be hard to justify denying the access to HE to almost half of the speakingnon-Latvian of interests the serve to it for aim the with created was sector independence,private of yearsthe early formationpolicy the during HE influences on privateinstitutions inLatvia. According to theinterviewed actors who were significant permitting behind rationales principle the of one as served has demand that of size sheer the fact, In instruction.language Russian the for sides supply and demand the 2005).Vanags, and (Hansen examplesuch one is 1999 in closure its until Russian instruction in offer continuedto that trained) were Union Soviet whole the for specialists where Institute, Engineers unofficially. language weresuch exceptions when Russian speaking faculty continued teaching in theRussian Though,there sector. publicemployment opportunities seek the outside compelled to becameuniversities public left had who Russian in lecturingpreviously professors of created a sizeable demand as well as supply for Russian language instruction. The bulk has force into came Russian law language the and after latter the Latvian of abolishment The the languages. in both study to students allowed which subjects most systemstrackfordual universities commonrun was for to It Russian language. the in Latvian,was manysubjects, especially technicalin andengineering fields,were taught Latvia Soviet the in institutions HE at instruction of language main the though Even nttt a hrl eraie s te Isiue o rnpr n eeomnctos wih is which Telecommunications and Transport of Institute the date. to operational as reorganized shortly was institute It is telling that the Riga Institute of Aviation maintained the language of instruction but not its not but instruction of language the maintained Aviation of Institute Riga the that telling is It

iaIsiueo vainAviation of Institute Riga 69 But, in general there was a major gap created both on both created gap major a was there general in But, 187 (formerly the Riga Civil Aviation Civil Riga the (formerly

CEU eTD Collection institutions. It appears that Russian minority students increasingly choose to receive education in education receive to choose increasingly students minority Russian that appears It institutions. 70 3 percent - in English (Hansen and Vanags, 2005). Latvianaroundand in conducted percentRussian, tuition- is in some17 its percent of providechosen instructionto result, Russianotheraroundthanthe 80Aslanguage. in Telecommunications and languages. three all in MBA offer does Academy the Russian, conductedstill studiesare in Englishthe Latvianand Although languages. bulkof the beyond offerings course its extended it later but Russian in only education provided relations and interpreter studies) programs. publicmanagement, arts managements, business as (such professional and Sciences) Academyoffersbusiness academic bothstudies at European(like Studies, Information International Baltic the 000, 7 over of body student the with countries Baltic the in institutionsprivatelargest the Being Latvia.different institutionsbranchregionsof in Academy International minority. Russian the by populated heavily most is which part eastern with Russian language focus operate branches in different parts of Latvia, mainly in the private institutionsbecause in Latvia generally tendis to be of a rather largeThis size. Especially those dynamics. sector private the in factor Russian the of prominence the reflectadequately not does institutions of number the But Russian. in instruction areconducted theRussianin language. There arealtogether seven institutions offering institutionsprivate at studies the of much that observe surprisingto therefore not is It Latvian which allows their better integration in the society. On the other hand, there are cases of skills cases language their are and2005).improve Vanags, (Hansen to there them hand, for order other in Russian the in On instruction for opting society. speakers Latvian the in integration better their allows which Latvian The recent years has seen the growth of Latvian language departments at so called “Russian” called so at departments language Latvian of growth the seen has years recent The (previously, – anotherRussianmajor language – privateinstitutionalso has

atc Rsin Isiue, fr eape us 7 runs example, for Institute), Russian Baltic 188

When it was first established, the Academy 70

Institute of Transport of Institute The Baltic The

CEU eTD Collection started as soon as the centralthecontrol soon startedas loosen, as begun to duringperiod the of Latvia in sector HE reforming towards movement the neighbors, Baltic its to Similar 6.3.1 Legislative Framework Education Higher towards Policies Governmental 6.3 the remarkable influx of private resources in public institution funding. ofbecause only especiallybut blurred is Latvia in sectors two distinctionbetweenthe and generalization) "Attistiba" Pedagogies Social and Work Social ( funding of measure the on distinct quite are institutions private region, the in elsewhere Like Latvia. policymakers as crucialbehindcontend,playedlegalizingrole the has privately provided institutions in which, population, of heterogeneity ethnic is expansion private the under fall therefore and narrowly-focusednon-universitypragmatically-oriented type, and of organizationsare competitiveness andLatvia’sthe Despite of private private this,sector. all institutionsHE standing high suggests general, in population age university and enrollments privateenrollmentssector the background in againstdecliningthe rise public sectorof continues and steady A Latvia. in dynamicsinter-sectoral distinguish sectors private and public the at both numbers student fee-paying in increase sharp the up, sum To 6.2.3 Conclusion in Latvia in directionthis founding firststepsin thethe was of Oneof in the end of the 1980s. The main objectives of the Association includedAssociation the of objectives main The 1980s. the of end the in quite distinct on the measure of governance. Despite this, the this, Despite governance. of measure the on distinct quite eevn osdrbeconsiderable receiving semi-elite category. Another major factor driving the driving factor major Another category. 189 ietdirect , state financing, state s te ol xeto o this to exception only the is the Associationthe Scientists of

Higher School of School Higher perestroika .

CEU eTD Collection other groups. Among most important changes that this legal act has introduced is to is introduced has act legal this that changes important most Among groups. other participationfrom limited with officials MoES the of team the by drafted was - 1991 in Saeima by passed Education, on Law the - period this of documentmost legal principal the Yet, legislation. the preceded had and level institutional were the saw at 1990s initiated the of beginning the that changes many too, here innovativeundertakings, legalizing of forerunner a been has Latvia that fact the despite Hence, system in Latvian HE institutions (interview with Juris Dzelme). extensiveworking experience universities,US fromthe implementation is creditthe of an had who name, Dzelme’s with associated innovation Another programmes. study Quality Education Higher of introduceAnglo-Saxonthree-level type to head first the was (HEQEC)- EvaluationCentre the currently and 1987 in University the of to attributed innovative efforts of the is University of Latvia’s rector.example, Juris Dzelme – the electedfor rector 1989-1990, in already degrees M.A. and B.A. grant to startedLatviainstitutions in HE far-reachingThat numberof changes.instituting a wherescientists withWestern experience have servedmain thedriving as force behind communist countries during the first half of the 1990s. The same proves true for Latvia post- in undeniablystrong was field HE shaping in academicsindividual of influence otheruniversitiescasesAs studies1970s. 1960shavethedemonstrated,the and in the Western in workpossibility Latvian(natural) providedto the scientistswerewith who the and émigrés Latvian of influence the reflect largely undertakings early These bases.competitive on institutions research and scientists among funds allocate would that mechanism financing new a introducing and rule, Soviet the during separated integrationresearchinstitutions processinitiatingof institutesHE were of the that into open the possibility for the creation of private institutions and to authorize public authorize to and institutions private of creation the for possibility the open 190

CEU eTD Collection approved by the Cabinet of Ministers in 1995. forwardregulation“Accreditationby 370on No. Higherof Education Establishments” evaluationqualityprocedureput werethe detailedguidelines Morefor years. 6 every in institutions entire and programmes study the both for regular requirement accreditation a instituted It system. accountability and assessment quality created law as status, their about the Importantly, existed universities. by provided be that still could programs study professional confusion the resolve not did this Though, institutions. HE professional and universities into institutions divided law 1995 The institution. any by offered be could professionalprogrammes between that study and academic only but institutions HE professional and academic between distinguish not did law previous the instance,institutions. For HE of status clarificationthe about much-needed provided and Council, Rector’s existing already of duties and rights HE institutions, delineated tasks and functions of Higher Education Council (HAC), the re-organizationof and creation for terms the elucidated Law the things, other Among MoES widened, by the first Law on Higher Education Establishments, adopted in 1995. institutionallimitsof theThe scopeautonomyof the as sametime weredefined,the at state and HE institutions. the between relationship the regulating for detail sufficient lacking frame-law a was institutional of accountability general, thisIn werelargelydocument. absentfrom this Mostlyconcentratinginstitutions. institutional HE on autonomy, aspectshowever,the institutionstocharge tuitionfees. Other important provision was grantingautonomy to Higher Education Establishments”. Establishments”. Education Higher 71

Another important regulatory act is Cabinet of Ministers Regulation No.238 on “Licensing of “Licensing on No.238 Regulation Ministers of Cabinet is act regulatory important Another 191 71

CEU eTD Collection MoES officials who drafted the 1991 Law on Education - the key legal document of document legal key the - Education on Law 1991 the drafted who officials MoES the of team the was it elite, academic the of efforts the to related are transformation the of years first the during implemented changes crucial of number a though Even policy-making. HE in MoES the of role the to relates emphasize to point first The Latvian government. the of approach the in variations notable are there demonstrate, will section this as over control some impose Yet, and control. quality accountabilityand of mechanismsdevising autonomy through institutions, the of borders the define to attempt the of period governmentalreactive a by initial followedinstitutions HE by acquiredautonomyan extensive is, That country-cases. the of rest the in observed paths same the follows Latvia in structures governance HE in shift the respects, major In 6.3.2 Governance Structures for Higher Education Institutions of the following sections. Moredetailedstatus. legal discussion thesesomeissuesof formssubjectof the matter their and institutions reorganizationof and self-governance,creationinstitutional and institutionalilluminate fundingmechanismsamendmentsare further the to sought that revisedseveral 2000times 2003,in andAmong 2004, 2006.twice issuesinand in the been has law the then, Since later. year a already followed Law the to amendment first the why is This legislation. the by addressedsufficiently not aspects of number a remained there contained, Act the that provisions necessary numerous the Despite that period. This is not to say that the self-rule that HE institutions had acquired in acquired had institutions HE that self-rule the that say to not is This period. that 192

CEU eTD Collection legal entities and are granted with substantial self-rule that encompasses the authorityencompasses the that self-rulesubstantial with granted are and entities legal as treated are Latvia in institutions HE Law, 1995 the of provisions the to According theseAt initial time. stages, theRector’s Council wasexcluded from theparticipation. a at invited were institution HE each from representatives that way a such in MoES coordinatedby were groups working noteworthythat is It player. main the remained Education Higher on still MoES the Law but groups wider 1995 from participation active more the saw Establishments of process drafting and preparation The allow up to 50 percent of governmental finance for private institutions. provisionwouldwhich the replacedwith was and agenda the ultimatelydroppedfrom was that resistance such triggered proposal the Unsurprisingly, financing. state the publicprivatecompetitionwhichand institutionsall to a wining wouldfor in parttake therethat even wasthis“crazy” ideaabout introducing financea mechanism according backgroundagainst which thefirst law wasdrafted and passed, Juris Dzelme notedhas Rauhvangers). Andrejs with (interviews governance and funding HE into market-liberalprinciplesintroduce to was aspiration resolute whose liberal, ‘open-minded’ as Minister first the described have makers Interviewedpolicy region. the of much commonplace in a been has it like versa vice not and – sectors public introducingtuition-feesin institutions and private of creation the witnessed– sector HE the importantdevelopments most that two the for basis the asserved has Law the way, same the In uncontrolled randomprocesses. of and much so not governmentand of first Latvia’s the result by embracedmarket-liberaldeliberate stance a mostly was this that is point notable the but extensive less was Latvia the year of 2007 (the Economist, January 4,2007). January of year 2007(the Economist, the by named was 2004, since Energy for Commissioner 72 Andris Piebalgs, the first Minister of Education (1990-93), who has been serving as European as serving been has who (1990-93), Education of Minister first the Piebalgs, Andris 193 72 n hs rcletos o h general the of recollections his In theEconomist as their "Eurocrat of the Year" for Year" the of "Eurocrat their as

CEU eTD Collection institutions constitutes no less than 20 percent, while minimum of 50 per cent of the of cent per 50 of minimum while percent, 20 than less no constitutes institutions of types all for senate the representationStudent in institution. concerning mattersan determinescontentsthe by-laws of regulationsand issuesand decisions virtuallyon all that body governing powerful most the is senate the institutions HE most In rector. dismissingthe and electing and senate the electing of that to limited largelyfunctions highestmanagerial anddecision-making rulingrealbody,reality no has power,in it its the is assembly constitutional Although 13). sector III, (chapter staff administrative fromthestudent body, while therestmembers shallelected be from non-academic and of its members should be drown from academic personnel and no less than 20 percent – existingquotas for different groups setforth by theLaw. Thus, noless than 60 percent with accordance in personnel institution’s an by elected are - body decision-making and collegial highest the - constitutionalassembly of members The court. arbitration academic the and commission audit the rector, the senate, the assembly), Satversme (or assembly constitutional are institution an of bodies decision-making main The level of tuition-fees. the fee-payingand students of number determinethe to as well compensationas theirrates set and employees hire to self-rule with delegated are institutions this, their from regulate and institutions Apart Education). Higher by on Law (1995 structure administrative and out organizational carried research scientific of direction basic the determine standards), admissions general to supplementary is (that criteria of institutions), determine the content and forms of their studies, define own admissions the by approved parliamentincase ofuniversities are and bythe CabinetofMinisters casein ofother types which Satversme, (called by-laws own adopt and devise to 194

CEU eTD Collection cec. Te lte a iie no te Dprmn f Sine ad te Dprmn f Higher of Department the and Science of Department the into divided was latter The Science. and Education Higher policy of Department the the as primary reorganized was unit the 1994, In a period. that of within objective was education created higher in science was reinstating that Research fact the and to owing Science 1992, in of Ministry department The changes. structural considerable 73 in begun has process The establishments. HE of types both of expansion rapid a by qualitycontrolprocedurecreated establishing of was for sort someneed Latvia,the In the accreditation of HE institutions. on budgetand state the arefundedfrom be studentsto numberof the providing on advice prominent most however, organization, expert intermediary this of functions multiple Among Union. Student and Confederation Employers’ and Latvian Commerce Industry, of Chamber Directors, College of Council and Council Rector’s as such HE, in stake have that society and community academic of groups various from drown are members twelve preparingqualitytheand grounds the decisions for majorissues onconcerning HE. overseeingco-ordination,promoting HE, in strategy broader developing of charge in isindependententity this which accordingto HEC functionsof and status the defined processes. accreditation and licensing out carrying for responsible within Law is HEC, expertiseof the the using by MoES,institutional autonomy, the the constrainsof implement to authority the Having institutions. HE overseeing for responsible the agencies governmental and about intermediary of provisions tasks and unambiguous competencies more contained Law new the Furthermore, be shall HE of institution an representatives of the academic of staff (chapter III, sector 15). senate the of percent 75 and senate university a o bcm h ed o h eatet o cec evd a h rud o pitn the splitting for grounds the as served Science of Department the of Melnis). Anatolijs with 2002(interviews in and Science Higher Education of Department head the ambition become whose individual influential to an of was interests the than other none that appears It later. twoyears Science and Education Higher of Department the as again merged be to only 2002, in Education In Latvia too, the MoES unit responsible for overseeing higher education sector has undergone has sector education higher overseeing for responsible unit MoES the too, Latvia In public and private HE sectors, Academy of Sciences, of Academy sectors, HE private and public 195 73 The new law new The Its

CEU eTD Collection among the spheres of influence of different ministries, as it was the case during the during case the was it as ministries, different of influence of spheres the among divided be to continueinstitutions as significantchallenge poses Latvia in institutions HE between co-ordination the that notable is It private. and public institutions, HE Latvia’sRector’s Council thatincludes is it the representative from stateall recognized the of characteristicdistinguishing important An HE. to related issues about opinion expert its providing and proposals policy other and laws draft evaluating programs, is institutions HE among co-ordination strengthening for responsible is and Ministers of the Cabinet and MoES the to capacity advisory an in serves that body important Another international community the in institutions Latvian of standing on and quality on impact significant a have implemented,will fully if and, countries, OECD several of practices best the reflects get Latvia in and process the that process concluded alike institutions HE the and HEC scrutinize from reflections to opportunity an had that team experts’ OECD According to MoES. the endorsedfinallyaccreditation by decisionis on that a makes councilrecommendations, the these on Based HEC. recommendationsto its submits andself-studyreviewscountry) Baltic other from comesmembers the of one least (at procedureorganized is thus that the evaluationteam, comprised of international experts institutionsprogramsstudyco-ordinates HE and and of accreditation Thethe process. the following 1996/97, in underway establishmentofHEQEC in1995. The Centre organizes thequality assessment got process assessment quality of process actual Balticcountries.The 1995Law set forththe basicframeworkthe for quality assurance, between whilethe prepared was evaluation quality on agreement the when 1994 Soviettimes. Undertaken interviews have revealed thateach of many attempts tobring the Rector’s Council. Rector’s the (OECD 2001. p. 150) Its other tasks include deciding on joint study joint on deciding include tasks other Its 196

CEU eTD Collection 74 the has only Not percent). 50 constitutes universities for figure the while colleges, to apply not does requirement (this degrees PhD hold which of percent 30 faculty, USD), 000 196 (around Lt minimumnumber 400students, of well-equipped 000 libraries, leastpercent50 at full-time 100 least at of capital starting a have shall they requirementsthatsuchpublic, all, institution,privateare new foundingthator for a be powerfulhadhas lawFinally,implications new the privateinstitutions.for HE ofFirst research into HE institutions. the re-integrated successfully and started have to and activities research for funding introducedbasedcompetitivegrantshave post-communist first to countries the of one 1990s,thetheend of in when LatviatheSoviet partof was still a Union. Latvia wasa formed was Science Academyof organizationalthe the structureof overhaulof major the at aimed that Latvia in Scientists Associationof The institutions. HE in research scientificreinstating the is issue such One agenda. policy HE countries’ communist institutions,hasitbeen forerunnera inaccomplishing other fundamental goals onpost- HE institutions. over MoES of control seven unified establishing in unsuccessful overseeing was Latvia Although ministries five altogether are there institutions, HE of rest the of charge in is that MoES the besides Currently, Dzelme). Juris with prevailedbenefits,(interviews the up give to willing not were who those proposalbut policy the opposedculture) (e.g. ministries the all not however,that noted, be must It form ofgrants, support forinfrastructure, additionalfacilities, placementsfor students). insurmountable with met were MoES opposition from the ministries that obviously the benefited from the existing scheme (in the of control the under institutions HE Academy of Culture, Art Academy of Latvia and Latvian Academy of Music are supervised by supervised are Music of Academy Latvian and Latvia 2003). Latvia Education in (Higher of Culture of Ministry Academy Art Culture, of Academy Interior, Agriculture

National Academy of Defense of Academy National Riga Strandis University Strandis Riga ne iityo giutr,Agriculture, of Ministry under - sudr h cnrl Mnsr o Dfne Defense, of Ministry control the under is – under the Ministry of Welfare and three institutions, Latvian institutions, three and Welfare of Ministry the under – Police Academy of Latvia of Academy Police 197 –

under the Ministry of the of Ministry the under Latvian University of University Latvian 74

CEU eTD Collection 76 (interviews scandal corruption the followed Latvia’s Dzelme). Juris with that decision of political the prestigious of result most the as the entirely – down Latvia of institution public one University only hand, other the the On in universities. even down closed were programs 75 In 2001).(OECDpercent 115 by grew fees, studentcomprised services,frommostly paid from funding institutional while percent, 26 by increase the saw HE for budget state the 1995-1998, period the over differently, Put studies. their financing students their regulation. for guidelines detailed more provided Establishments Education Higher on been has - services remarkably educational intensive. These practices were legalized already 1991in but1995 the law public of privatization the and HE of suppliers countrycase inwhich bothprocesses the - growth in the numberof extra-governmental budget, witnessed most significant diversification of its financial base. The Latvian is a state the exclusivelyfinancedfrom was recently until which,system, HE Latvian The 6.3.3 Higher Education Funding Policies state recognized degrees.grant to are they if institutions private for compulsory is accreditation Law, meeting the quality standards put in place. not their of consequence the as down closed were institutions even and departments institutions needed no special permission to open up a new department) several existing challenginggreatlyinstitutionbecome(previously HE department establishingor new study Loans and Student Loans Paid by Credit Institutions with State Provided Guarantees (2001). Guarantees Provided State with Institutions byCredit Loans Paid Student Loans and study of cancellation and Payment Granting, of Procedure “the on 220 No. Regulations Ministers of Cabinet and (2001) Resources Budget State the from Establishments Education Higher Funding of Procedure Two additional documents regulating funding are Cabinet of Ministers Regulations No. 334 on “the on 334 No. Regulations Ministers of Cabinet are funding regulating documents additional Two more, is What well. as institutions education higher public at closed were programs Several 76 As the table 6.5 shows, there has been tremendous increase in the share of 198 75 Additionally, through the provisions of the - Riga Aviation University Aviation Riga - – was closed was –

CEU eTD Collection private sector enrollments and fee-paying students at public institutions. both of shares highest the of one has Latvia currently too, perspective comparative 199

CEU eTD Collection amount of study fees at the two sectors is comparable. For example, in 2003/04, the 2003/04, in example, For comparable. is sectors two the at fees study of amount the whole, the On programs.degree across as well as institutionsacross greatly vary pricing.to Withrespect tuitionto fees too, institutions arefree settheir to rates, which stronglyapproachwhichreflectsfactor,liberalmarket other any or study a of cost the not and demand student is however,tuition-fees, of rate the for determinantprinciple The program. particular that for demand student general the of light the in capacity total the graduatesand of number the calculatedto accordingusually is This 2003a). numberfee-paying students they wish toenroll (Higher education Latviain 2003, Kasa the on decide to free are Institutions themselves. figures the as telling as is numbers student financed state and self determining to approach government’s Latvian The Table vrg ee f tiin i ulc uieste a S 1 6, wie i private in while 666, 1, USD was universities public in tuition of level average Source: 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1993/94 1992/93 1991/92 1990/91 1994/95 : 6.5 Tuition-paying Students at Private and Public Institutions in Latvia in Institutions and atPrivate Public Students 6.5Tuition-paying : Central Statistical Bureau of Latvia of Latvia Bureau Statistical Central enrollments enrollments as theshare of totalof Private Sector 31.87 30.11 28.51 27.91 26.07 22.87 18.80 13.87 12.68 11.25 10.28 8.52 5.64 4.12 2.72

Tuition-paying students as thestudents share ofshare total enrollments public 63.32 66.66 68.15 67.44 67.21 64.84 63.23 60.87 58.33 51.84 45.71 39.77 30.68 - - - - -

200

CEU eTD Collection and Loza 2000, Kasa 2003b). wherestudents all pay for their educationhas it asnostate-financed study places (Kasa however,publicly is owned andpublicly run respect,this strikingexamplepercent(OECDin 2001).Most 70 constitutesthan more Latvia of University the Technical for figure the while Riga tuition, their for pay studentsUniversity of percent 20 around only example, For students. fee-paying of rate highest the have fields demandedstudy highly institutionsprovidingeducationin Moreover,samedegreeregions. otherprogram prestigiousthe most in for higher than considerably are public Riga in fees tuition all, of First to demand.market again institutionsis distribution budget of pattern the affecting seemingly factor important studentstime(Higher full allocated Educationto Latvia, only 2003).is Another in and basis ofstudy vacancies, basecosts and indexes of costsfor education by subject fields the on determined is financing of amount The 2002. since operation in put been has normative2001,fundingmechanismHE Developed for in 2001).OECD2000; Loza, thestate finance among themajor sectors seemed beto more ofaninfluence (Kasa and distributionof historic the recently, until places, budget of number the calculating for of Education based on the HEC proposal. Although the Council is formally responsible The number of state financed students, onthe otherhand, is determined bythe Minister high standing that top private institutions have acquired in Latvia). 2003) Latvia in education (Higher 095) 10, (USD privateinstitutions(USD 16,667)considerablyare higher thentop those toppublicby institutions by charged tuition However, 429. 1, USD to amounted it institutions prestigious and competitive private universities is much higher then in any public university. any university. thenin public much higher is private universities competitive and prestigious 77 The same pattern of tuition pricing is observed in Georgia, where the cost of the study in few in study the of cost the where Georgia, in observed is pricing tuition of pattern same The 201 BankingSchoolBusiness of Finance and 77 (which once again points toward points again once (which ,

CEU eTD Collection Loza 2000). and (Kasa only. academicallystudentsfull-timesuccessful for available are expenses, daily students’ covering loans, student whereas tuition, the cover to intended loan, study a receive can performance academic successful with student part-time and full Any loans. administrated bank commercial and subsidized governmentally of types both for eligible are institutions private accredited state attending Student 1999. in - covering students’ social needs from the state budget in 1997 and loans covering tuition loans offer to started government The system. loan student is sector governmental policyhavingmostimportantthewhy implicationsis This non- privateforsector. the ofrest the income for source constituteof main tuitionstate,fees the supportthe from extensively "Attistiba" Work - institutions private two only are there this, to contrast In Policy Academy of Latvia (86.7%) (OECD 2001). the and (94.6%)AcademyMaritime Latvian the (98.5%), Music of AcademyLatvian the include studentsstate-funded of rates high havinginstitutions Other state. the by financedfully is Defense AcademyNationaltuition-sponsoredof the no Havingslots, money. born tax-payer from funded exclusively almost be to continue which MoES, than ministries other of supervision the under them of all institutions, several are thereHowever, funding. public inadequate highly for supplement to order in money private generate to sought increasingly have institutions public ownership, public Latvia. in sectors two funding betweenthe dimension of the considerableon blurring been has there that fact the to point examples above The become more private than private institutions (interviews with Juris Dzelme). Juris with Dzelme). (interviews private institutions private than more become 78 Policy-makers even joke that some public institutions, most notably the University of Latvia, have Latvia, of University the notably most institutions, public some that joke even Policy-makers from public financing. Although they do receive some indirect financialindirect some receive do they Although financing. public from and Latvian Evangelic Lutheran Christian Academy – that draw that – Academy Christian Lutheran Evangelic Latvian and 202 78 While remainingWhiletheunder Higher School of Social of School Higher

CEU eTD Collection This often creates a situation when funds areavailable in thesystem but cannot beused academic year.an anothercourseof specificduring the institutionshiftedto cannotbe a moneyallocated that to Another anticipated.been factoris had it thansmallerloans for opted havestudents that discrepancy is this for reason One demand. exceededthe purposeshasloan available moneyfor made amountof recently, the until thoughthat, notable is It year. to year from increasing been has loans of types both for allocated Approved bythe parliament from the annual state budget,the overall amount of money Latvia 2003, Kasa 2003b). conventional treatedas (HigherloansEducationare studentloans,which in out giving started have banks commercial some initiative, own their Using developing. been also is lending sector private Latvia, in scheme extensive most is that program loan Besidesgovernment country.co-sponsoredthe manpowermeets of that needsstudent numberof circumstances, amongthem a borrower if gets employed in the publicsector a in forgiven altogetherbe can latter The graduation. followingthe period grace year administratingthestudent loan program and theinterest ratethat students pay after one The for bank commercial the graduation. by charged upon rate interest applied the - is both subsidizes government percent 5 of rate interest annual but studies of duration the during interest-free are loans intoco-sponsored Government put operation. was institutions credit of resources the from students lending of system the instead discontinuedand thus was resources budget guarantee. state the from loans state Granting the against loans bank commercial out take to students allowing regulationsapproved government the when 2001, in modified was scheme loan The by students who need them. But, there also is a general lack of informationthe aboutof lackgeneral a is also there But, them. need studentswho by 203

CEU eTD Collection not-profit forms of organizations, the distinction seldom has implications for a tax policy. This should This policy. tax a for implications has seldom distinction the organizations, of forms not-profit 79 financingscholarshipsstudent directedat income the of part the on taxes paying from university the exempt would that 2001 in Finance of Ministry the agreementwith the to subject taxationcommercialpolicysimilar to Universityenterprises. LatviaThe negotiated of were institutions public even recently until that Latvia in great so was non-profiteducationalprivate establishments. evenavailablenot for is law HE provisions the despite the policyfavorableof that tax for true is this all of First region. the across found those from different much not stimulatingpolicyencouragingenvironment and isLatvia the HE, privatein sectorsin for governments by employed commonly mechanisms policy other to respect With subsidized and commercial bank administrated loans. governmentally the alongside developing gradually is lending private where place, developedschemesdifferentloansinmostsystemwith the of havingone one the also is it but scheme loan the introduced have to post-communist country first the Latvia is only not shortcomings, above the Notwithstanding base. merit the on allocated are too loans students, university public full-time successful academically to apply that grants governmental to similar Thus, 2003b). 2000, (Kasa distributed being are resources loan which to according criteria main the as serves need, social than rather merit, that is however, experts, by identified scheme the in flow major The parents. their and students among awareness raise to and flexible more system loan the make to is developgovernmental can policiesdirectionthat obvious Therefore, the 2003b). (Kasa repaid be can loans that confidence of lack a as well as place in system loan manufacturing companies or those operating in education and health care sectors, contributed to the to contributed andsectors, 2003). Stonis taxedLacis (Dzenis, were hence similarly security and social care health and education in operating those or companies manufacturing that be institutions, All owned. state were enterprises industrial all when past Soviet the to related be In the post-communist context in general, although legislation differentiates between for-profit and for-profit between differentiates legislation although general, in context post-communist the In 204 79 In fact, the confusion about tax status tax confusionabout the fact, In

CEU eTD Collection HE funding policies employed by the Latvian government. Currently Latvia has one of documentedmarket-competitive was above,the it underlying beenapproach As to has their outcomes. governmenthas the Besides, Latvia. of University the - prestigious most including institutions, public in also but private in only not closed were programs standards, assurance quality implementationof the f example, For respects. other many in approach evenhanded exercised has requirementsthesedifferentiategovernment the not HE,do sectors betweenin two the materialand baserequired licensing forAlthough accreditation and high.set beenhas closer to market-competitive policyapproach. Latvianpoliciesgovernmentemployedaboveshown,analysisthe HE has by the is As 6.3.4 Conclusion was properly paid (Kasa 2003b). tax incomepersonal that provided refund, state to subject is expenditures and eligible as regarded are education expenditureson 1993, Tax, IncomePersonal on Law the to According tuition. on taxes paying fromparents their fee-payingfreeingandstudents thatpost-communist legislations,other countryis from absent usually place, in policy theUniversity ofLatvia that first made use ofsuch arrangement. Yet, one constructive was it but taxes income and social from freed be to scholarshipsallowing legislation a had already Latvia that fact the despite is This 2003). Stonis and Lacis (Dzenis, the highest numbers of tuition-paying students at the two sectors in HE taken togethertaken HE in sectors two tuition-payingthe numbers highest of at students the

ensured the transparency of these processes andprocesses these transparencyof the ensured 205 Fromthe outset, the standards of quality ollowing

CEU eTD Collection since the 2000s. In other countries, like Bulgaria and Russia, students can borrow from commercial from borrow can students Russia, and Bulgaria like countries, other In 2000s. the since schemes loan implement to started which Republic Czech the and Hungary, Lithuania, Estonia, them 80 Education towardsHigher Policies Governmental of Determinants 6.4 demand on HE and accordingly have supported them ( meeting in play institutions private that role valuable the recognized have authorities policymakers as well as studies in the Latvia’s private sector indicate that governmental interviewed whole, the On agencies. intermediary important through planning HE favorable influence on private sector development is the private sector’s participation in to region. the amounts in found usually channels is than rate indirect higher considerably other and students through received aid financial charged. tuition of amount the and admitted be to students of number the both determine to payingstudent enrolled state-accreditedat institutions, public orprivate, whicharefree tuition-academicallysuccessful any to apply loans student guaranteed and sponsored 1997. in as early as budget national from loans student introduced and separately. On the other hand, near future (Student–Parent Cost by Country: Russia). Russia). Cost byCountry: (Student–Parent future near the in schemes loan student backed governmentally Both interest, low implement subsidizer. to planning or are guarantor countries a being government without and rate interest standard the with banks Up until now, only a handful of CEE countries provide government guaranteed study loans, among loans, study guaranteed government provide countries CEE of handful a only now, until Up lhuh hr i ltl iet fnig f ay o rvt institutions, private to any, if funding, direct little a is there Although Latvia was the first post-communist country to have 206 Morten and Vanags, 2005) Another policy having policy Another 80 Government co- Government .

CEU eTD Collection 5.8 1989 Centre, 2001. Centre, Source: of GDP) Latvia(percent in Expenditure onEducation Public 6.6: Table 2001/2002). Latvia in Education on (Report USD) 252 8 (around countries OECD studentin spending HE per average the than lower times 10 than more is USD) 730 about or funds allocated to HE. As the result, Latvia’s per capita student spending (440 lats/year of rate the in increase the than rapid more much been has growth enrollment public of rate the that is factor obvious One 6.6). (Table insufficient increasingly become have institutions HE to available funds percent, 5 of average EU to higher slightly Latvia’s Although commitments to education has 2001/2002). been growing to the level that is comparable Latvia to and even in Education on (Report time same the overall of education expenditures alsohasincreased from around percent12 10to over to expenditures public educationby1995 figure the hasgrown its 16.5to percent. The spending HE theasshare of percent 12.4 around allocated government 1985 in Thelevel ofoverall education expenditures has been growing inLatvia since 1990s. If 6.4.1 Economic Development A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A 4.8 1990 4.2 1991 4.6 1992 6.1 1993 6.1 1994 207 6.9 1995 5.5 1996 5.8 1997 6.5 1998 7.2 1999

CEU eTD Collection influence of the Latvian Popular Front, to return confiscated property to the rightful the to property confiscated return to Front, Popular Latvian the of influence the under taken Council,Supreme the of decision the by down slowed efficiencywas embarked upon by the Latvian government. It must be noted, however, that its pace and adjustmentsstructural economic of component successful another is FSU, the across found commonly than transparent more much was which policies, privatization of hadone of the lowestinflation rates in the entire region (Table 6.7).Finally, the nature inflationrates oftheearly 1990s,started it declineto from 1993 thatsoby 2000Latvia triple-digit the after inflation, the for As countries. western high-spending of extent the to not still foreigndebts,incurredsome has it years the althoughover and debt no withUnionSoviet the emergedfromLatvia foreigndebt.controlled inflation and has ensured fairly balanced governmental budgets, which has little or no deficit to date, and has Latvia of Bank the by exercised supply monetary of control tight with coupled action governmental The Latvia. independent of growth economic the to contributedgreatly also has reform monetary however, significance; symbolic and foremost, first had, period interwar of currency the Reintroducing 1993. of beginning while currency transitional a introduced had timely and Latvia 1992, successful by Already 2002). a Purs and (Pabriks currency national is of introduction countries Soviet former in present chaos economic previous fromescape its to Latvia allowed that policy A economy.Russian the from dependencyupon stemmed experienced has economy Latvia’s the that setbacks same downturns concomitant ofthe transition fromplanned to market economy. Many the with suffered has economy its countries, post-communist all of successful most GDPitself. Although theeconomic transition ofLatvia hasbeen oneofthefastest and Anotherreason for therelatively low levelper of student spending the lower is level of owners and their descendents. Although politically important, restitution process has process restitution important,politically Although descendents. their and owners 208 Lats has been in circulation from the from circulation in been has

CEU eTD Collection Table 6.7: Economic Indicators, Latvia 1989-2000 Latvia EconomicIndicators, 6.7: Table more effectively controlled (Pabriks and Purs 2002). were crisis the of effects short-term the and effect domino avoid to managed banks Russia, on dependent less much become had economy Latvian the As devaluation. ruble followed that crisis bank Russian in laid now which of cause the predicament, another face to only but recover, to managedbanks years followingtwo the of course the In 6.8). and 6.7 (Tables 1995 of year the for deficit budget state the deepening and GDP Latvia’s in slash percent 10 some causing back, growth economic Latvia’s hold to served crises The 1995. in down closed was Latvia, in bank private largest which of result the as former, the for blamed was operated banks Latvia first in1995 and then in1998-1999. The lax regulatoryregime in which private obstructiveMoreeconomicthe growth, to however, bankingwas crisesexperienced in considerably. pace its speeding process, privatization the in point turning the as served has 1996 governmentin Skele of arrival The privatization.economiceffectiveness hinderedof 209 Banka Baltija, Banka the

CEU eTD Collection rate rate inflation Annual Wages Real (%) GDPin change Annual a Growth GDP Real EBRD, 2000. EBRD, 2001. Centre, Source: b d

A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A

0 100. 1989 0 100. 6.8 d a Based on EBRD, 2000. 1999: estimate. 2000: projection. projection. 2000: estimate. 2000.1999: Based onEBRD, Based on EBRD, 2000. 2000. EBRD, on Based 10.5 105.0 2.9 9 102. 1990 0 172. 71.9 -10.4 92.2 1991 60.0 1992 2 951. 49.0 -34.9 b ER,20.19:etmt.20:poeto.projection. 2000: estimate. 1999: 2000. EBRD, 2 109. 51.8 -14.9 51.1 1993 210 35.9 57.9 0.6 51.5 1994 25.0 57.7 -0.8 51.0 1995 17.6 54.1 3.3 52.7 1996 8.4 60.7 8.6 57.3 1997

4.7 63.0 3.9 59.5 1998 2.4 65.0 0.1 59.6 1999 c Based on Based 2.9 4.5 62.2 2000

CEU eTD Collection 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1990 1989 h eie cag. Te nx eto xlrs te ielgcl ln ewe HE between link ideological restructuring attempts and the the broader economic policy in place. explores section next The change. regime the initialshiftfromlittledirectionsawthe determined yearsimmediatelythe in following strayedfrom thatchosen Thepath. same holds true for the nature ofHE polices which not have office in governments different and liberalization fast the of policies economic for opted Latvia outset, the From restructuring. sector HE the and economic bothtowardsgovernmental stance the continuationin a been has there because partly is This thepolicy. HE trace on development economic country’s to in changes difficult the of somewhat influence proves it case, Latvian the In 1990s. the of Latvian end successive by undertaken steps steadyeconomic governmentsa growth already to manifesting led have thefromitself macroeconomic whole, a as Taken force survey. labor based is on Data 2007.Employment Ratio database, Indicators onWorld Development Based States. Source: as employed of (number Ratio Employment and USD) Latvia aged in population 15-59) of percentage 2000 (constant capita per GDP 6.8: Table

TransMONEE 2007 features: data and analysis on the lives of children in CEE/CIS and Baltic and childrenCEE/CIS lives in of and onthe analysis data 2007features: TransMONEE 3,588 3,302 3,024 2,904 2,727 2,477 2,364 3,901 4,217 capita GDP per 5,023 4,533 4,154 3,854

71.1 70.1 69.6 68.5 66.6 64.9 66.5 67.5 67.4 64.1 - - - ratio Empl.

211

CEU eTD Collection independence. partieson theright have dominated every election (thatis five) sinceLatvia’s regaining anotherBut important policyLatvia. continuationthe factor for politicalbeenthat has in policy-making in IMF, notably agencies, international of involvement extensive the by least, not ensured, was principles chosen the to Adherence 2002). Purs and (Pabriks measures economic drastic and sudden implementing implied that therapy” “shock of strategy the on decided was it start, the From therapy. shock vs. gradual aroundappropriateevolvedinstead approach towardseconomic transformation, is that market-liberalhaddebatefollowingThe questionednecessitya of the economic path. includingcommunists,politicalparties,reform Few have hammered wereout. design groupings during thetimes when the most crucial choicesof economicand institutional political major the betweendisagreement little invited had policy economic of issues the Even and 2005). Latvia, Report:(Country EU, taxes, the from benefits maximizing Latvia's lowering corruption, combating as well as people and regions across programs party disparities economic all and poverty as the reducing as matters such issues, other social on concentrate on platforms party in variation little a be thecore is issue that continuesstructureto theparty divide Latvia.in There appears to rural-urban,developmentcleavages,left-rightotherethnic the or like but sawof times recentThe cleavage.ethnic the centeredupon Latvia’s has politics of however,much towards relations country’s ethnicminorities (Pabriks and and Purs 2002).After regaining the independence, Union Soviet the from independence is discourse political Latvia’sdominated had that issues major two 1980s, mid the of awakening the Since 6.4.2 Political Parties and Ideology seat parliament was secured by the newly formed Latvia’s Way, which formed a formed which Way, Latvia’s formed newly the by secured was parliament seat 100- the in seats 36 with majority the 1993, in held independentelections first the In

212

CEU eTD Collection interests of the Russian minorities living in Latvia. successor communist including parties, left-leaning of programmes political of objective 2007). main the Latvia, Indeed, Report: (Country Russia towards orientation the with exclusively orientation leftist identify to continue voters average the past; Soviet the with do to representationleft-leaningof Obviously, parties. electoralthehas leftweakness the of Latvia.Thus, anothersalient feature oftheLatvia’s party system theisrelatively weak independent of history in date to election every dominated have groupings political right-leaningcontinuity, political of lack this despite But five elections. era independentall through survived have them) among Way (Latvia’s parties few only too, major of path the characteristic ofnascent party systems inmuch ofpost-communist countries.In through Latvia country the leading transformations. of capable and Council, open-mindedan of liberal political force, being abovedirty thepolitics Supreme the of a as created moderateright-wingLatvian émigrésof partyhelp was imagegroup gave whothewiththe Way Latvia’s Union. Farmer’s the with coalition government Popular Front members. members. Front Popular 81 But the party also included a number of of number a included also party the But 81 rgetto n ntblt f pltcl pris hs been has parties political of instability and Fragmentation Equal Rights Movement, Movement, Rights Equal nomenclatura 213 has been the defense of the rights and rights the of defense the been has representatives, career seekers and moderate and seekers career representatives,

CEU eTD Collection Policy Education the Higher Changes Outcome Electoral transition and Latvia is no exception in this respect. But the examination of the case the examinationof the But respect. this in exception no is in Latvia and transition countries of characteristic been has frameworks legislative and regulatory HE policies.HE forConstantsameholds Thetrue liberalfluctuationreformsLatvia. in in electoralstrength therightof insuredhas continuation certain a to degree themarket in the vigor, same the with pursued been always not have reforms economic Although Latvia,2007). Report: (Country minority) supported mostlybyRussian (the latter Center Harmony a become not did d seats 20 receiving party center-right 2003). Latvia, Report: (Country partner coalition other Party, People's seats). 7 Freedom/LNNK (TB/LNNK, and Fatherland For and seats) 12 (ZZS, Farmers and Greens of Union the seats), 10 to c difficult is Democrats Social The of (Pabriks and 2002). Purs spectrum leftof political positionedposition still onthe is theparty but identify The left. from Latvia United in Rights Human For and Party New The centre one Party; People’s and Freedom and Fatherland For Way, Latvia’s as such b (Henderson 1997). included) were not threshed the5percent overcame that parties nine of out three (only Party Green and Democrats Union/Christian Farmer’s The Party, Conservative a Table hw ht te ae mre-iea hlspy a en udryn mc f the of much underlying been has philosophy market-liberal same the that shows

New Era receiving 26 seats formed coalition with three centre-right parties: Latvia's First Party (LPP, Party First Latvia's parties: centre-right three with coalition formed seats 26 receiving Era New These were Voting Union of Latvia’s First Party and Latvia’s Way, For Fatherland and Freedom, and Freedom, and Fatherland For Way, Latvia’s and Party First Latvia’s of Union Voting were These These are: Samnieks, Latvia’s Way, For Fatherland and Freedom, the Unity Party, the National the Party, Unity the Freedom, and Fatherland For Way, Latvia’s Samnieks, are: These Altogether 6 political parties overcame the threshold among which were three right-leaning parties right-leaning three were which among threshold the overcame parties political 6 Altogether 6.9: Higher Education Policy Choices in Light of Electoral Outcome in Latvia Outcome of Electoral Light in Choices EducationPolicy Higher 6.9:

fees charging tuition institutions start 1991: public is established Private institution 1991: First Education 1991: Law on HEIs. introduced at programs level degree 1990: Three- (centre-right) Farmer’s Union Latvia’s Way and government of Coalition 1993-1995:

place loan scheme in 1997: Social needs Council the Accreditation 1995: creation of Establishments Higher Education 1995: Law on parties right-leaning government of6 Coalition 1995-1998: a

214

loan scheme administrated Commercial bank 2001: Higher Education the Law on Amendments to 2000: coveringtuition 1999: Loans leaning parties several right- government of Coalition 1998-2002:

Higher Education the Law on Amendments to 2003 and 2004: parties center-right with threeother New Era Party government of Coalition 2002-2006: c

Education Higher tothe Law on Amendments 2006: other parties with 5our of Greens right Union of center- Government Coalition 2006:

CEU eTD Collection recognized institutions, public and private, serves as the main channel for institutional for channelmain the as servesprivate,recognized institutions, and public state all of rectors itself within unities that Council Rector’s the 1992, in Established 6.4.3 The Mode of Interest Intermediation got Minister and his team. first the never by embraced stance proposal ideological the of this indicative is fact Although the implemented, competition. intersectoral stimulating by servicesrendered, of quality enhance the to order in terms equalinstitutions public on and private funding for proposal a forward put Education of Minister first the when Latvia in start the manifestfrom been had policies HE principlesmarketto free apply the emphasizes which tendencyThe to model componentprivateconfers. returnsbesides benefitsHE social of that market by influenced is policymakers of rhetoric correspondingly encourages introducing market mechanisms in steering the sector. The and state the decreasedfavorsinvolvement which of HE, thinking aboutliberal recent the with consistent is 2003) Latvia in Education (Higher papers policy in expressed and 1993-1995) in Education of Minister Vaivads, Janis with (interviews leaders partypolitical advocatedby parents, their and students and state, the betweendivided be HE for costs the should how about thinking The two. the between link expressed well- and clear a revealed have sources written different of examination as well as undertakeninterviews but 6.9), (Table factors both on variance of lack the of because outcomespolicy HE for ideology party ruling in change the implicationsof the grasp fully to us unable not does case Latvian The witnessed. has system HE that changes lnig poes n odr t ae te daou ewe E isiuin and institutions HE between dialogue the ease to order In process. policy planning on influence their exercise and proposals common out work to leadership 215

CEU eTD Collection through, private institutions in Latvia have access to HE planning to the extent that is that extent the to planning HE to access have Latvia institutionsin privatethrough, proposal this push to able been not have they Although funding. state the winning for other each with compete freely which institutions, of types both at places study “purchases”student state the which accordingto finance HE approachtowardsliberal market-advocated have institutions Private disagreements. and conflict most invited has which issue single a is finance Institutional intensifies. sectors two the between competition as lately, disagreements by marred been has conflict-free and fruitful as described been has that relationship the but grounds, common on co-operate and Rauhvangers has noted that the two sector representatives have mostly been able to find in representation intermediary bodiesits (interview with Andrejsincreasing Rauhvangers). of purpose sole a with latter the of leadership the staffmembers well-establishedwiththe Baltic International Academy, wasfounded by other and faculty the shares which Psychology, of Institute Council, Rector’s Latvian the of General Secretary the to According Academy. International Baltic to belong SchoolPractical of Psychology formally- anindependent private institution said is to - InternationalHigher The institutions. of advantage the for exploited been sometimes has country, post-communist other any from intermediation interest of mode Latvian aspect,distinguishingThis council.representation equalthe students has in 250 some institutioncreatedprivatenewlyenrolling small a and bodystudent whole the of third one- almost enrolling university largest the Latvia, of University the that means This decision-makingprocess. the in voice one possesses also university, small or large a of HE department at the MoES, with one voice each. Each rector, whether representing head the educationand of minister includesthe governmentCouncilalso officials, the almost unparalleled in the region. Having equal representation in such an important an such in representation equal Having region. the in unparalleled almost 216

CEU eTD Collection Polish and Lithuanian ethnic groups. But the ratio between native population and the populationand nativebetween ratio the But groups.Lithuanian ethnic and Polish Ukrainian, Belarusian, representing rest the population, total Latvia’s of percent 30 Currently, 1980s.ethnicaroundLatviansRussianspercentthe and 58 account - of for awakening the sincepolitics,general to been has it as Latvia dynamicsin HE shaping overridinglyto important as been has issue ethnic diversity,notwithstanding such HE towards stance governmental forming in play to part little had factor religious While World Protestants. Evangelical various (CIA and Baptists include Christianity groups other while Orthodox Factbook), and Catholicism Roman Lutheranism, are population total the of percent 60 almost for account that faiths religious main Three religiously. and ethno-linguistically both country heterogeneous highly a is Latvia 6.4.4 Demographic, Ethno-Linguistic and Religious Factors interest of mode the between link intermediation in a given country conjectured and the governmental stance towards private HE. our with consistent is mainly This principleactor.remainedMoES the the law, 1995 draftingthe in part take did it theCouncil played norole inthepreparation ofthe firstlaw on education and although noted, was it As with. start relativelyto limitedbeen have Latvia Rector’sCouncilin addedmust be here,It region.muchhowever,the caseof in the powers thethat the of detrimentprivateof institutions protectionin their of institutional interests, beenhasas the to public Council the why of power explains and position the This used not have leadership institutional sector. created newly of interests the reflect extent certain a to choicespolicy HE that impliesRector’sCouncil the as intermediary body minorities was even less balanced in 1989, when ethnic Latvian’s were just in a in just were Latvian’s ethnic when 1989, in balanced less even was minorities 217

CEU eTD Collection minorities became a principle objective for a number of political parties and pressure and parties political of number a for objectiveprinciple a became minorities ethnic of rights linguistic the Defending 2002). Purs and (Pabriks skills language their improve could they when period grace year a with granted were Students 11). (Articlestudies of year second the from Latvian in primarily teach universitieswould state-financed that stipulated it as HE, for especially and general in sector education for implications tremendous had Law Language The organizations. governmental andadministrative in language main the became Latvian as altered was languages of Latviafollowing several amendments theto 1989 Law adopted 1992.in The hierarchy of territory the in franca lingua as declared was language Latvian The years. three permitted using other than Latvian in governmental sectors for the transitional period of Law The movements. popular of pressure the under Council, Supreme the by 1989 in adopted was Russian and Latvian of bilingualismestablishing Law Language The HE field. the in place developmentstaking the to relevance special had which policy, linguistic Soviet of naturalization of emigrants started. process Not less central to Latvian politics of the the beginning of the 1990s was when 1990s, the mid until minorities its withdealingpolicynew developa unableto was communistand the rule aftermath of immediate the duringattainedposition the at remainedstuck Latvia process.political the from immigrants Soviet excluding thus only, descendants their and citizens war pre- to vote, to right respectivelythe and citizenship,granted law citizenship first the majorityVastweredeniedthemcitizenship of 1997). altogethervotecould not and as (Henderson 10.3) others and 2.3 (poles percent 34 to period Soviet the during grown hadpopulation,Russianwhich was particularconcern a Of percent. 52 with majority rus ( groups edures fr te Poeto f Rsin Schools Russian of Protection the for Headquarters 218 n Gs ( NGOs and ) the

CEU eTD Collection considerable only in very recent years, which is beyond the timeline set for this study. become however, decline, demographic of effects The 5). Appendix and 6.9 (Table Latvia the is greatest of oursample countriesand one ofthe highest inthe entire region naturalthe populationindrop accountthe thatfact the increasepost-communist in rate into take if evident more the all becomes competitiveness sector’s private Latvia’s 6.3). (Table terms relative and absolute in both raise to continued but declined not Despitediminishing significance oftheethnic factor, private enrollments not only have 2005) seek education inLatvian in order tobetter integrate inthe society ( Russians ethnic more as declining is growth private in factor Russian of significance the that however noted, be must It sector. the of growth further and HE provided extra-governmentally towards attitude governmental permissive forming for factor changes in legislation.This case study has documented thesignificance of lingo-ethnic excreted from different groupings representing ethnic minority interests, affected by the Latvia of Society Russian United the Latvia, in Schools in Language Russian of Support the for Association . ). Thus, there was a considerable pressure to government to pressure considerable a was there Thus, ). 219 Morten and Vanags

CEU eTD Collection thousands) (beginning of year, 0-17 Population age increase population ofRate natural enrollments Higher education iia rnils hs udrie oenetl plce oad ulc sector public towards policies governmental underlined has principles similar thatremembered be also should it Latvia, in institutions private for absent financialis support state direct Although HE. in sectors both in levels tuition and numbers quality ofeducation, while allowing market forcestodetermine such mattersas student g that shown has investigation Our fields. narrow selected, in only albeit alternative, post-communist v presentwithstudents in continues beyond,Latvia’ssectorto privatecountries and enrollments sector private declining of backdrop the Against region.mostvibrantthe private sectorsthe produced mechanismsin has of HE, one in attemptensureto some levelquality of ofservices provided, while encouraging market an as characterized be can that sector independent the towards government Latvian the by adopted approach the that concussion the towards points analysis above The 6.4.5 Conclusion 2000projection (2000), onEBRD 1999estimate, 2001based Centre, Source: Latvia in Change Demographic of 19-24and population) (percent EducationEnrollments Higher 6.10: Table financing. The governmental stance is best epitomized by publicly owned and operated overnmental role with relation to private sector has been limited to ascertaining the ascertaining to limited been has sector private to relation with role overnmental A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A

n/a 1.3 n/a 1980 1989 681 2.4 20.5 678 0.0 20.8 1991 220 656 -4.8 17.9 1993 623 -6.9 21.6 1995 560 -5.5 46.5 1999 545 n/a n/a 2000 iable

CEU eTD Collection . as the governmentallyprovided education equallyand large supply theseservices, for well as parties, governing the of underpinning ideological the of reflective policy accommodating the were important most Latvia, certainlythatamong themultiple with state can we factors, above the of weight relative the Whatever Rauhvangers). Andrejs with (interviews niche the fill to ones, language Russian notably providers, many were there granted, was permission the once and government, the and MoE the in both leadership oriented free-market with do to more had education provided extra-governmentally legalizationof early the that argued have and factor Russian the S successivegovernments. Latvia’s the market-liberalby embracedideologystrong a importanceof equal nearly and alternative private towards attitude governmental permissive forming for factor the on bear to bring ethnicpredominance underscored of the has hand, other the governmental on attitude, ostensibly that variables broad-level the of Examination for private sector development. crucialequally are which process,planning policy the involvementin sector’s private has beenone of the mostdistinguished with respect to other policies, like student aidor government’sLatvianattitude the demonstrated furtherthat has undertakenstudy The remarkablyprogrammesinstitution.because studentdemand of the highon offered by FinanceBusiness and Banking of School lack of organized opposition from the academic elite ome policymakers have, in fact, questioned the primacy ofprimacy questionedthe fact, policymakersin ome have, aspectsthatenabled thespectacular private growth in which is entirely financed by private money,privateentirelyfinanced by is which 221 ifrnitd dmn o te than other for demand differentiated .

CEU eTD Collection relative influence of the national level factors for governmental policy formation. theassessment of an is sectionfinal The manner.indirect or direct some dynamicsin privatesector on bear governmentalvarious analysisof to choices,policybring which detailed a gives study the of part second The 2005. until up 1990s the of beginning the from enrollments private and public of evolution the describes section next The nations. post-communist across education higher towards approach governmental in exist that differences the epitomizes clearly Lithuania in pattern growth education higher Private recognition. official gained institution education higher private first a when 1999 in challenged only was instance, for provision, HE in monopoly government The education. higher of provision and funding in role dominant play to continued state Lithuanian the Latvia, and Estonia in education higher in profile state the in significant declinea saw 90s earlyWhereas the respects. number of a in StatesBaltic Despitegeneral. Lithuanianthis,the developments distinguishedare tworestfrom the inregion the and Latvia and Estonia in these considerable Lithuaniabearsto parallels Overallnature restructuring of efforts thehigher of education sector in post-communist Introduction 7.1 CHAPTER 7: THE CASE OF LITHUANIA 222

CEU eTD Collection Source 1990-2007 T the youth age cohort participated in HE. of percent 39 than more 1999, in that so HE, on demand in increasegradual but slow been has however,there point, that From Appendix 1). 7.1, (Tablepercent 21 around to 28 almost from dropped had cohorts age university of enrollments HE of rate the decreaseafterLithuania’s re-gaining theindependence. Over periodthe 1989-1993, of to started HE in participation region, the in countries most to contrast in region.However, entire the in highest the of one was Lithuania communist in HE to access 19-24percentyouthalmostinstitutionscohortWith ageHE28 enrolled of 1989, in by 7.2.1 Inter-Sectoral Dynamics Sector Education Higher the of Structure The 7.2 the State Department of Statistics Data, 2004,2008. Data, of Statistics Department State the 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1990/91 Year be 71 ueia vriw o h ulcPiae Hge dcto etr i Lithuania, in Sector Education Higher Public-Private the of Overview Numerical 7.1: able : Data until 2000 from Higher Education in Lithuania 2001. Data from 2000 is calculated from calculated is 2000 from Data 2001. Lithuania in Education Higher from 2000 until Data : Inst. Public 19 19 19 19 19 18 50 49 48 31 30 27 26 Thous. enrollm public Total 199 198 191 171 146 117 84 75 67 59 54 67 96

enrollm public total the of share as students financed Self- 46.3 38.6 44.6 36.2 33.8 33.1 19.7 13.9 10.3 NA 3.5 5 -

223

Inst. Private 19 18 17 17 13 13 7

Thous. enrollm Private Total 18.5 16.5 6.5 2.8 1.2 14 12

enrollm total HE the of share the asenrollm Private 8.5 7.7 6.8 6.5 4.3 2.4 1.3

CEU eTD Collection state institutions. However, the term ‘non-state’ is used in the Hungarian context to denote sector that sector denote to context Hungarian the in used is ‘non-state’ term the However, institutions. state 83 Lithuania 1990, in established 82 all student enrollments (Table 7.1). sector included12 collegesand 7universities thataccommodated around8.5 percent of private the year academic 2006/07 By sector. college the in mostly also was growth same. the remained has universities of number the while academic2006/07year, the by opened were colleges public new Altogether,16 sector. college the in only but point that significantly from UniversityInternational(LCC) College Fund Christian Lithuanian and Priests of Seminary Telsiai Management, of School International 1999. Seminary Joseph and the creation of college (non-university HE institution) sector in 1999. institutions private of authorization the was HE of system homogenous previously a andacademies 1990.in Two major developments contributingthediversificationto of universities into re-organized had which institutions, HE public 19 of comprised was Lithuania. in opened were universitiespublic new four only transformation of years first the during dynamics, institutional the Concerning is comprised of private and church sub-sectors, while in Lithuania the term has no special inference, special context. theLithuanian used in will be term‘private’ Therefore, etymological. beyond no has term the Lithuania in while sub-sectors, church and private of comprised is

Please note that, like in Hungary, privately owned institutions in Lithuania are referred to as non- as to referred are Lithuania in institutions owned privately Hungary, in like that, note Please iats Mgu University Magnus Vitautas 83 The following year saw the establishment of three more private universities- private more three establishment of the saw followingyear The -1994. in was the first private university to gain the permission to operate in operate to permission the gain to university private first the was KlaipedaUniversity

With the exception of three universities, the private sector private the universities, three of exception the With a eoee led n 18; 1989; in already re-opened was - in 1991 and and 1991 in - 224 GenerolasZemaitisJonasMilitaryAcademy of 82 . Public sector also expanded also sector Public . By 1999, the system of HE of system the 1999, By a Uiest f Lithuania of University Law Vilnius Saint was

CEU eTD Collection Belarus Lithuania Latvia Estonia Size Lithuania is among these post-communist countries that allow for-profit education for-profit allow that countries post-communist these among is Lithuania StatusOwnership 7.2.2.1 Lithuania. in (Morten dispersed and Vanags 2005). rather is that population the of distribution geographical geographicalThis Kaunas.reflectsdistributionthe in part in - Klaipeda3 and in were 4 while Vilnius, in located were 5 only 2001, by Lithuania in operating institutions ratherdispersedare country,acrossthe 12especially of Outamong threemajor cities. most private institutions are concentrated in the capital city, the institutions in Lithuania the where region the in found pattern widespread a from difference in Furthermore, Feature or Transition Phenomenon? Source: byCountry Sector Private Establishments of Distribution Size 7.2: Table students (Morten and Vanags 2005). 2400 than more not enrolls institution private largest The standards. these by even below shows,Lithuanian2 Table the the7. as private institutions enrollfewer students counterpartspublictheir compare but,to to considerably size be smallerin to tend too countriespost-communist in institutions Private establishments. educational private organizationalinstitutionspublic is characteristicrelativeto size smallof general,a In 7.2.2 Private Higher Education Institution Growth Patterns organizations legally as private institutions can choose between non-profit and for and non-profit between choose can institutions private as legally organizations Morten and Vanags, 2005. 2005. Vanags, and Morten 1 2 2 13 0-250 1 1 4 5 251-500

1 3 2 3 00 501-100 The PrivateTheHigherSector Educationin Baltics: the Permanent in 4 0 1001-200 4 2 3 225 1 0 2001-300 1 1 2 0 000 3001-4 1 0 2 0 000 4001-5 2 0 0 0 >5000 4 0 1

CEU eTD Collection basedstudent scholarship thoseenrolledprivategrantsapplyuniversities. at to is This financial-need nor merit neither aid, financial student of case in even but institutions; especiallygovernmentaldirectorganizations. for true is This appropriations private to owned privately the to unavailable mostly is funding public regulation, and control governmental considerable to subject are institutions private that fact the Despite backing from their international co-establishers. Economics, and Management like of University institutions, Secular abroad. and Lithuania in faithful the of donations Seminary Joseph Saint - institutions religious Both them. support to organizations donor other and internationalreligious, have instead but study-fees student on rely solely not do they thatinstitutions obliges legislation Lithuanian the because is This them. to available income of sources alternative have institutions all that respect the in distinguished is sector private Lithuanian the However, institutions. private by generated revenue the of bulk the constitutes tuition student region, the in countries other to Similar Funding Institutional 7.2.2.2 three institutions, private 19 of universities and 10 colleges out were registered as non-profit educational Thus, organizations. status. legal “non-profit” for stands institution private a of name the in included “public” term the context, Lithuanian privateinstitutionsthe of In Lithuaniaoperatingacademic list 2006/07. by yearin the gives Appendix14 region. the of much in Lithuania,like insignificant in are policies tax and funding for status legal the of implications the However, status. legal profit the other threecountries underconsideration and, importantly,significantly higherthan despitefactthatthestudy privatefees at institutions generallybetendto higher thanin and ihain Crsin Clee - - College Christian Lithuanian 226 on the other hand, enjoy strong financial strong enjoy hand, other the on r upre y the by supported are Vilnius ISM

CEU eTD Collection vague, the first law on Higher Education left plenty of room for manipulation and manipulation for room of plenty left Education Higher on law first the vague, generalwhole,beingtooand the institutions On qualityothersimilargrounds. and on to denied was license the but institutions HE private of existence the proscribe not andBusiness College ManagementCollege Vilnius (1993), include government Lithuanian the by sanctioned was HE provided privately before existed thatinstitutionsOther state-recognizedaward degrees. to permission the obtaining to priorTrainingBusinessCenter,authorization, state operatedas official the gain the to Vilnius University. at Management and Studies International of Department the as existence date. that before 1999, most privately owned institutions were established and existed in some form well in Lithuania in recognition state official gained university private first the Although Governanceand Control 7.2.2.3 private institutions. state-recognized the at enrolled those including students tuition-paying all to apply hand,other the on 2003,availablesince are that loansStudent study Lithuania2003). Country: by (Student–Parent tuition Cost sector public than higher times 4.5 or USD, 500 16 comprised it institutions private in while USD, 700 government 3 around the was regulation to accordance in universities public by set study-fees of amount maximumexample, the for 2003, In Lithuania’s institutions.public charged at tuition aevr h odtos fr etbihn rvt E isiuin ws made was institution HE private when 1995,somewhatunambiguous more in first a establishing for conditions The maneuver. Lithuanian Christian CollegeChristian Lithuanian olg f Mngmn, Lw ad Lnugs o iuii Region Siauliai of Languages and Law Management, of College ISMUniversity Managementof and Economics, nentoa uies Sho t Vlis University Vilnius at School Business International (1998). mustIt benoted that the Lithuanian 1991 law on HE did (1994), (1994), (founded in 1991), 1991), in (founded Klaipeda Business CollegeBusiness Klaipeda 227 the Center of QualityAssessment Centerof in the Northern Lithuania CollegeLithuania Northern oneofthefirst universities (1997), (1997), Vilnius Law Vilnius

tre its started

(1994),

CEU eTD Collection student tuition fees. Accordingly, the majority of institutions operating in Lithuania in operating institutions of majority the Accordingly, fees. tuition fromstudent generated these besides funding of sources other to access have institutions 15 Appendix organizationswith (interview donor attainableonlyinstitutions for whichis supportsolidwithinternational from otherand capabilitythat the law requiresremains oneof the most challenging conditionsto meet, obtain. to difficult According to interviewed policymakers, proves of all existing barriers, demonstrating commonly financial which from advance, confirmation in written professors prospective present to need institutions staff, have teaching they qualified prove To libraries. well-equipped and premises base, material funds, recognitioninstitutionsstatedemonstrate seekingshall possessionnecessarythe the of Lithuanian government turn outtobe exceedingly challengingthe to meet. by set standards very the However, comply. to need missions distinct serving institutions of types two that criteriarequirements the difference betweenany, the and state if little, with is there Moreover, awarded loans. aid student for be eligible be and degrees recognized to students their for order in process assessment quality formalundergo to organizationsneed educational private Namely, region. the across highereducation bears significant parallels theseto found the other in Baltic States and By and large, the Lithuanian government’s approach towards ascertaining the quality of extremely is prolonged operate and challenging, often taking a few to years to accomplish. permission a obtaining before application an submitting passed was Law Education Education Higher ) hs i eas h ihain lgsain legislation Lithuanian the because is This . (CQAHE) was established, and then in 2000, when the new Higher new the when 2000, in then established, (CQAHE)and was . The procedure that institutions need to undergo from undergo to need institutions that procedure The Rimantas Zelvys. Zelvys. Rimantas 228 For the list of intervieweessee of list the For requires

That is,private ht private that

CEU eTD Collection Management and Innovation Norway; Norway; Innovation and Management 84 especiallyhigh standing thatprivate institutions have beyondacquired. is It aim theof What distinguishes the Lithuanian private sector from the region in general, however, is in the region. prevalentpatternelsewhere the dynamics Lithuanianrespect,fits sectorprivate this In andacademic prestige, arecharacterized bymuch narrower scope and pragmaticfocus. anthropology. and history studies, gender and cultural psychology, theory, and science political economics, B.A.,at M.A. andPhD levelsinbroad areasinsocial sciences such as p EuropeanHumanitiesThe University 2006. Lithuaniain relocated in A science. and art Belarusian of figures prominent International of number the a Minsk, and Foundation Humanitarian of Council City the Church, Orthodox the and Culture Byelorussian University. being exception notable the goals, oriented practically Mission: Pragmatic Mission Institutional 7.2.2.4 submit the list of subjects that will be evaluated separately. to need institutions program, a program open to permission a the obtaining from After process assessment. independent an is subjects study of evaluation the that founders. their among organizationsinternational have Christian Fund which enables them to invite professors from prestigious universities of different of universities prestigious from professors invite to countries. them enables while which (UNDP), Fund Program Christian Development Nations United the by

S nvriy o aaeet ad Economics and Management of University ISM h atr ws iiily oee n Blrs b h on fot from efforts joint the by Belarus in opened initially was latter The tr is coue b h uahnos gvrmn, t government, Lukashenko’s the by closure its fter National Academy of Sciences, the Ministry of Education, the Ministry of Almost all private HE institutions in Lithuania concentrate on concentrate Lithuania in institutions HE private all Almost Other private HE institutions, notwithstanding their status notwithstandingtheir institutions, HE private Other InternationalVilniusUniversity Businessat School 229 a salse y te Nrein Sho of School Norwegian the by established was 84 h Ltuna hita College Christian Lithuanian the Another hindering factor is factor hindering Another h uoen Humanities European the e uiest university he

offers educationoffers hilosophy, law, is supported is was -

CEU eTD Collection market. high exceedingly have and mission their fulfilling in standards academic high for strive and mission pragmatic same the serve institutions private of types both that, than Other levels. PhD and M.A. B.A,, three all educationat offer and colleges in the Lithuanian context turns on the former having broader focus, as they Lithuanian’sprominent universities. Themajor differencebetween privateuniversities and international at experience teaching and practical considerable and credentials and fields. chosen their in excellence the for strive also sector college the in institutions many But narrowlyfocused. more even are that colleges than academicstatus higher enjoy privateUniversitiesinstitutions. all whole thefor trueholdon Certainly, not does this public university tuition. thanhigher four-fivetimes about is that cost the bear to ready are they that extent the is,students value up to datepractical knowledge thatcan beused inthe labor market to equippedwith libraries and computers andprofessors theredo not speak rubbish. that admitted has expert, public college director and the member of the Conference for College Directors) theprivate sector is distinctly high among thepopulation at large. policy-makers and experts suggest, the perception of the quality of education offered by interviewsundertakenwith as well as purpose, this examinedfor sourcesmultiple the as provided,but education of quality the assessmentsof definite provide to study this close contacts with the labor market, which invites professors with high academicprofessorshigh inviteswhichmarket, with labor the contactswith close The Klaipeda Business CollegeBusinessKlaipeda The students are eager to study at private institutions as they are better are they institutionsas private at study to eager are students is one such institution with pragmatic missionpragmatic with institution such one is 230 standing in the labor the in standing Rimantas Zelvys That (an

CEU eTD Collection in theology. Also founded and supported by the religious association, the mission the association, religious the by supported and founded Also theology. in studies which lasts upto 7years, graduatesof the Seminaryreceive a bachelor’sdegree of completionsuccessful the After priests. train to is Seminary Joseph Saint Vilnius Lithuania 2001). Offering B.A and M.A. degrees in religious studies, the main focus of Management Internationalof School – one only and organizations religious by inestablished were 3 existed 2001, by Lithuania that universities private 4 of out Moreover, recognition. state official 1999, in Archdiocese Vilnius of proposal the at Founded details). more for 16 Appendix (see Christians CatholicLithuania’s populationis of percent 80 as much as fact, In Catholic.Roman is Lithuania in religion dominant the Latvia, and Estonia Lutheran predominantly from difference In growth. sector private the in factor religious the of prominence Motive: Ethnic-Religious college provides most up-to-date knowledge. the renewingparticipateinsurethat programs turn study in to business whichin firms, College Business and associations,business numerous of member a Being workplace. the at upgradingskills in them assist employeesto its to servicesteachingprovides hand, other the on college, The programmes. study designing in role active play also they 300 than more Lithuanianbusiness companies, whichonlyaccept not college with studentstraining for but relations tight maintains college The alike. regional sector and business community local among reputation solid has - Lithuania in college example, For pursued by the Lithuanian Christian College (LCC), on the other hand, is to offer to is hand, other the on (LCC), College Christian Lithuanian the by pursued the Klaipeda College of Social Sciences - Sciences Social of College Klaipeda the lo poie hi tdns ih tanehp t Lithuanian at traineeships with students their provides also Vilnius Saint Joseph Seminary Joseph Saint Vilnius Another characteristic of Lithuania’s private sector is the is sector private Lithuania’s of characteristic Another - with foreign involvementforeignEducation(Higherin with - 231 was the first university to gain to university first the was the second biggest private biggest second the the Vilnius Law Vilnius the the

CEU eTD Collection can afford is a further contributing factor in creating the perception of a superior a of perception the creating in factor contributing further a is afford can institutions many that professors invited Internationalinvolvementand requirements. these meet that institutions to legitimacy confer and standards certain insure to serve assurance quality requirements and may serve to inhibit institutional distinctiveness licensing and growth, butthey also stringent all, of First sector. private Lithuania’s publicuniversities. Several factors helpaccounting comparativethe for prestigethe of prestigious more into admission gain not could who those of needs the organizations to catering unselective as viewed been largely have institutions private where context, communist post-communist the in unusual somewhat is standing social and statusacademic high distinguished by institutionsare Lithuanianprivate that fact The 7.2.3 Conclusion sector, around 15 percent of students studied in Russian. public the at Lithuanian native the besides provision HE prohibiting law the Before passing 16). (Appendix population total the of percent 6 only Russians while 84, aboutcomprising Lithuanians ethnic States, Baltic all of country homogeneous most and there are few that also do in English. This is unsurprising as Lithuania is ethnically sector private Lithuanian in the only educationprovide institutionsprivate of majority for the as dynamics, significant less been has hand, other the on factor, Ethnic the context of a Christian academic community. Christianliberal arts education byplacing broadly focused educationalactivities within quality. This perception is reinforced by somewhat damaged reputation that public that reputation damaged somewhat by reinforced is perception This quality. 232

CEU eTD Collection was closed down in 1950, had greatest symbolic significance in the country’sresolute the symbolicgreatestsignificance in had 1950, in downclosed was which universities, prominent most the of one education Lithuania’s re-establishing standards, Western after Modeled countries. Western different in living Lithuanian émigrés from help and effort the with 1989, in opened be could university the re-openingfor alreadyprepared their draftlaws before the collapse of the Soviet regime. The grounds 1980s, against the background of In Lithuania, initial steps towards reforming HE sector started to be taken already in the 7.3.1 Legislative Framework Education Higher towards Policies Governmental 7.3 widespread in the region, in their being fairlythose distinct on the dimension of finance.to alike much institutions private Lithuania’s the makes which government, than rather sources private from comes also funding alternative that however, added, be must It quality. the to contributes certainly tuition-fees on less-reliant is sector market.labor the with links closer maintain as better be equipped with computers to andupto date libraries than their public counterparts, wellout as turn institutions private many perception, of level the at just Not interests.narrow their of pursuit widespread the as activities their for) exposed disdain (and of perception have alike citizens with discussions and professionals with Interviews large. at population the by with held are leadership their and institutions in private sectors in all examined countries (Vanags and Hansen 2005). (Vanags and2005). Hansen countries examined sectors all in private in superior manifestly were libraries, and offices classrooms, includes which environment, working that 85

In their study of private sectors in Latvia, Lithuania, Estonia and Belarus, Vanags and Hansen found Hansen and Vanags Belarus, and Estonia Lithuania, Latvia, in sectors private of study their In VytautusMagnus University perestroika 233 was alsowasprepared advancewellin that so and 85 The fact that the Lithuania’s privateLithuania’s the that fact The glasnost . Several. HE institutions had

CEU eTD Collection To compensate for the absence of a solidlegalization,compensate To absencea the numerousof for governmental decrees developed exclusively and by rectors of Lithuania’s drafted leading universities. was Law 1991 of authority the negligible, the was As officials governmental 1994. in created only was state, and the forward of putting interests upholding of capable unit, self-sufficient and separate a as Education of Ministry the fact, In Lithuania. in strong especially were forces institutional but levelhas been characteristicof the early years of independence inthe regionin general, University ( Education as surprising hardly is This document. legal this of flaw major the constituted activities institutional the on accountability and control livingmuch room for contrastinginterpretations. The lackof the mechanismsfor social vague,general and too was Law institutional1991 the interests,the tailoredto Mostly influence. duringtheSoviet times and tofree university curricula form thecommunist ideological lostfreedom,academic institutionaland autonomyre-install to intended was act legal politicalinfluence (interview withVengris). Together with a to subjected be to “grand” too was education higher that felt widely was it when times emotional highly was this official, government interviewed the to According already passed preparedhad and independencebackgroundeuphoria,generalregaining Lithuania against the the of and Rightafter previousrestoretheorder. and Sovietpast the awayfrombreak attemptto were issued over the course of the first phase of the transformation, but the general the but transformation, the of phase first the of course the over issued were theLawthe Republicof ofLithuania Concerning the ApprovaltheStatus of Vilniusof in actual adaptedwasin factan versionstatuteVilniusthe the of University ) that had been passed a year before. Decision-making at the institutional the Decision-makingat before. year a passed been had that ) the Law on ResearchHigherEducation and on Law the 234 the Law on Research and Higher and Research on Law the the Law on EducationLawtheon in 1991 in , this , .

CEU eTD Collection Union of Students, the and Colleges, of Lithuanian of Conference Conference Director’s Rector’s the Universities, Lithuanian the Studies, and Science for Fund State Lithuanian the as such bodies, LithuanianScientific Council,Centre Qualitythe for Assessment Higher Education,in intermediary newly-created several of roles institutions. the within Moreover, students and professors of duties and rights the clarified also other. It elucidated legal grounds for founding and termination of HE institutions and it tasks,andrights anddutiesinstitutionsHE of MoES theonehandthethe on and onof autonomy that HE institutions had enjoyed since the early 1990s. It delineated the roles vastgovernmenttheMarch finallyimposeenacted2000,the on limitsin some to tried main Throughlegislation,new drivingfoundationslayingthe theforce for law. new the for the as served the Ministry the at within mostly unit created drafted newly and this level, initiated institutional was law first the Whereas document. new preparinggroundworkimportant of a aspect an for was 1997 Education Ministry in of of establishment The room for social accountability. the leave not did and insufficient and broad too was Law 1991 the that view shared widely of backdrop the against place took restructuring, HE the of phase next the continuous beginningof the marks which of HE, on law second the preparationof The institutions. subject the been has Education reorganization,creating additional problems forco-coordinating andgovernance of HE of Ministry the of structure The governmentalsector. was HE agenciesoverseeing responsibleso the for but flux in constantlylegislation the was only Not 1990s. the throughoutpersisted instability were also more clearly defined. h eateto ihrEuainadRsac Research and Education Higher of Department the 235 within the within the

CEU eTD Collection oee, te cniin ne hc olgs wr o b eraie s nnuiest higher into non-university integrated be as to institutions reorganized of number be The to disputed. widely were most were colleges institutions which education ISCED/5B). under the (at conditions education higher the into colleges However, these of integration the permitted law 2000 Lithuania. The in programs training professional post-secondary provided colleges such non-state 18 and state 70 1999, By schools. secondary special of bases the on only establishment their permitted Law 86 inadequacy of this legal document. the of indication clear a as serve followed soon that amendments numerous makers, policy- interviewed to According system. HE Lithuanian the most facing issues the pressing resolve not did Law the stakeholders, different of interests the between compromise a being belief, shared widely the to according Yet, documents. legal providedlong-needed clarification variousto issues werethatabsent previousfrom the Law the beyond, and Above government. the and businesses body, student society, from representatives including too, broader much actors was process of the set in The participating stakeholders. and partakers from approach pragmatic more a all, idealistic way of thinking characteristic of the beginning of the 1990s had yielded to of First respects. of number in legislation existent the to improvementmuch-needed and significant provided Law new the short, In elucidated. finally were established be could institutions private which under conditions the that act legal this passing withwas it force, intocame law privateuniversityauthorizednewfirst was beforethe Although well. as clearly more out spelled was documents, legal previous the form universitysector.HE non- creating for grounds legal the provided thus Law the institutions, HE vocational HEsystem. By clarifying theterms and conditions for establishing both universityand binary a create to was achieve to sought Law the that aim policy significant Another follow. to section the in detail in discussed HE, financing for mechanism new a was 2000 of Law EducationHigher the by introducedchanges important most the of One higher education and the criteria for selecting them became the subject of the most heated debates heated most the of subject the became implementation. of years first the2000law during the them selecting for criteria the and education higher

After gaining independence, Soviet type type Soviet independence, gaining After 86 The terms for privateinstitutiontermsfor The establishment, largely missing technicumes technicumes 236 were reorganized into colleges but the 1991 the but colleges into reorganized were

CEU eTD Collection Higher Education and Technology of powers the for true holds same The governance. EducationHigher and of establishment the saw year same The 1991. in force in came Education Higher on Law the after exist to seized unit The sector. Education, that, Before 1994. until exist not did unit wascurtailed.already As it noted, agencies in deciding and implementing policy pronouncement has became considerably state of power the whereas services, and activities their manage and plan to self-rule Lithuania’sAfterre-gaining independence, acquiredinstitutionsconsiderable have HE 7.3.2 Governance Structures for Higher Education Institutions degrees already in 1992-1993. post-communistintroducedacademicfirst levelhave threethe countries to of one was Lithuania fact In Lithuania. in date that beforeimplemented well were system, credit a to switching and PhD) and M.A. (B.A., degrees academic level three introducing includingdeclaration, Bologna of aspects many However, countries. accessed newly for significance special gained area HE European common the to joining thus and processBologna the requirementsof Meeting restructuring. HE of phase third the of beginning the as taken arbitrarilybe can EuropeanUnion the Lithuania’saccessionto - the existence of which was equally short-lived. After its closure in 1993 and as the as and 1993 in closure its After short-lived.equally was which of existence the - founded by the government in 1990, was in charge of overseeing the HE the overseeing of charge in was 1990, in government the by founded – yet another entity with no real means or legal rights for HE for rights legal or means real no with entity another yet – – its successor governmental agency created in 1992 theMinistry Educationof and Science 237 the Department of Science and Higher and Science of Department the the Division of Information, ScienceInformation, of Division the the State Agency of Science, of Agency State the as a separatea as

CEU eTD Collection strength of institutional forces. Formerly belonging to the Academy of Sciences, of Academy the to belonging Formerly forces. institutional of strength the integrationresearchin processinstitutions of higher education into thelargely reflects on delay The Lithuania. in strong decidedly been has process policy-making on influence the exert to elite institutional public of associationsdifferent of capacity the Alternatively, plans. long-term common than rather priorities and policies of set owntheir have to seem that Finance Ministryof the and MoES the for especiallytrue is This well. as agencies governmental different across but state the and institutions education higher between co-ordination with only not persisted have difficulties The 2002 in (Leisyte 2002). MoES the into re-integrated was Department the legislation, in numerous changes following but alike, observers external and experts local evaluated by been positively has documents regulatory and legislative new preparing in input and role Its 1998. in entity legal independent an into restructured was Department Education implementingresearch andpolicyHE hadbeen (OECD, 2000). For instance, the division under the MoES responsible for creating and systemwas the constant flux that prevailed even after theestablishment ofthe Ministry HE its strengthen to and actions of set consistent a pursue to failure government’s reasonsthethe for OECD of team,the one viewof the In other.the largeon public at on the limits governmentand the institutionsaccountableto hold some to institutionaland autonomy impose to and hand one the on policy HE implement and devise to toiled since has Ministry The 2002). (Leisyte 1994 in Lithuania in created was reorganization, of round another yet of result research institutions have gained complete independence but their integration into HE integrationinto their independencecomplete but gained have institutionsresearch . In an attempt to increase the efficiency of this largely ineffective unit, theineffectivelargelyunit, this efficiency of increase the attemptto an In . 238 the Ministry of Education and Science and Education of Ministry the the Departmentthe Scienceof andHigher

CEU eTD Collection It is not surprising, therefore, that one of the major aims that the 2000 Law sought to sought Law 2000 the that aims major the of one that surprising,therefore, not is It reflect the majority interests Rectorsthe with comeup to unite in spite of often conflicting interests. As one expert has noted, the solution that commonaroundgroundwhichfind members to its unfailingof ability pointedat have Rector’s the interviewees policy, rationalize HE of direction the to shaping in success remarkableConference’s attempt their In consent. prior Rector’s implemented the and without passed gets proposal policy no that, rule, great unwritten so an is to powers according its policy, new a of instigator frequent Conference the expert advice to the government on most important concerns related to HE. Not only is providing and HE of institutes and MoES between coordinating involves Conference the of function main universities, the public all of rectors the Uniting choices. policy emphasized the overriding power that the Rector’s Conference possesses in deciding on have officials government interviewed the as well as sources examined Furthermore, integrated into universityunits structures. second-rate be, to perceived is what become, and matters other or recourses the of distribution over authority and standing their concede to unwilling are hand, other the on institutions, Research lower. even become will teacher/studentratio low byboth research and HE institutions. Thelatter oppose theprocess fearin that already implementationEvidence its resistedsuggests change.thatregime is the agenda since Ministry’s the on pronouncement policy key a been has integration the that fact the despiteLithuania, in delayed especially been has units structural basic as institutions address was to lessen institutional powers, increase their social accountability and accountability social their increase powers, institutional lessen to was address is never too radical, it can only be stabilizingneveronlyradical,be cantooto has is it sinceit (in Leisyte 2002). 239

CEU eTD Collection fact that the rector is not elected with the concurrence of the term for the Presidentof the for term the concurrence of the with elected not is rector the that fact provideinvolvementnot for university the of councilselectingBesides, rectors. in the illustrate the point, in difference from the earlier drafts, the final version of the law does universitiesContinental in found historically governance shifted has law new internal the and accountability management, external both to respect with that found team OECD governance,university in partners social of participation increasedaccommodate and managementinstitutional of effectiveness enhance to intended changes these Despite authorization from the MoES. obtain to need councils academic college while implementation, their for changes structural some introduce and programmes study approve independently to authority broaderautonomy collegetheircounterparts,then university the the senate as has such senate. the by elected is rector university the while director, college the appoints council academic college that difference the servecomparablewithsimilarfulfillunitsrolesThese publicand supervisionaim care”. and “the providing councils have senate colleges the and universities of Both percent 10 membership. least at constitute students well, as council university consensus within university rectors and college directors. Having representatives in the the by chosen is rest the whereas councils, academic college and senates university the appointedby is third other The institutions. the externalto actors from MoES the academicself-government universities for appointedcollegesrespectivelyand are by - new legal document, one-third of the senate and academic council – supreme bodies for the to According governance.university the in actors external of participation allow established by the parliament ( be bytheparliament established only can university state while MoES, the of advice the on college state establish can government 87 nte ifrne bten te gvrac tutr f uieste n olgs i ht the that is colleges and universities of structure governance the between difference Another Seimas ) on the advice of the government. of thegovernment. ontheadvice ) 240 ak t h ot cnevtv om of forms conservative most the to back 87 Universities by and large enjoy much enjoy large and by Universities (OECD 2002, p. 245). To 245). p. 2002, (OECD

CEU eTD Collection 89 directors. of college theappointment for required 88 the and only institutions HE public government.Established verycentralized1995, the in approval,system of registration from drawn also are body, intermediary a membersof The Higher Education Council making process. Itis noteworthy that theconditions concerning thecomposition of policy- the in representation interest their correspondingly and involvement latter’s councilsrepresentativesinclude institutions,privateconsiderably fromthewhich limit these do Neither society. from representatives excludes Sciences of Academy the or Conference Rectors’ the Council, Education Higher the such Entities impossible. external makes it of level that the such at involvement are bodies co-coordinating existent of functions and composition The degree. limited a to though councils, college and university of HE between level the participationexternalprovideat does law co-ordination new The state. the institutionsand and sectors social/economic wider and HE between link the are legislation new the by addressed sufficiently not issues additional The of title the possessing artist distinguished professor” (Law on Higher Education a 2000). or scientist “a to role this restricts law new the Instead, position.rector’s the for contend managerialexperienceto with Another provision eliminatedfrom the final version was one thatenabled any professor check. external the and accountability public insure to difficult makes Republic the term plans. plans. term long-common than rather priorities and policies of set own their have to seem that Finance of Ministry the and MoES the for true especially is This well. as agencies governmental different across but state Colleges are more restricted in this respect as well, seeing that an external review by the MoES is MoES the by review external an that seeing well, as respect this in restricted more are Colleges

The difficulties persist not only with co-ordination between higher education institutions and the and institutions education higher between co-ordination with only not persist difficulties The Centre for Quality Assessment in Higher Education,Higher AssessmentQualityin for Centre is altogether absent from the law. emsSeimas (parliament) 241 , oenet ad ME nearly MoES and government 89 another majoranother the 88

CEU eTD Collection institutional performance and the level of state funding. between link a establishing by education of quality improved for incentives provide to seeks also law The programme. study individual the to contrast in institutions, sensethatdecentralizes it responsibility for quality assessment atthelevel ofthewhole the in flexible more are Law 2000 the by provided regulations The independently. permission obtain to had program each rather but field narrower a in programs study new open and develop to authorized get automatically not did fields study assessed than broader subject rather or field-of-studycould obtain evaluations. This programs is to say that positively individual introduced, first was process assessment quality the Whenpeer-reviewers. externalassessments by as evaluationswell (self-study), as presentinternalquality reviews, institutionsqualityto obtainhave to order In Centre. the of workings the to underlying been have programs academic of assessment and 242

CEU eTD Collection the tendency of shifting burden of paying for HE from the state to students has been has students to state the from HE for paying of burden shifting of tendency the the rise against the background of decreasing demand on HE. Besides, the resistance to on was finance public when times the during fees tuition with funding governmental morethan 13percent (Table Clearly,7.1). institutions had no such need tosupplement by grown had state the supportedby not students of share the already, year academic however,was growing comparably slowly until theturning point of1999. Forthe next students has been in place since the early 1990. The number of tuition-paying students, admittingself-financed of practice the it, support appropriate legislationto of absence funds available to them was to increase the share of tuition-paying students. Despite the reduced the with deal to institutions for way easy and obvious Most 7.1). Table and 7.1 (Figure 000 84 to 000 75 from grew numbers student the while USD, 129,500 to academicthat appropriationsyear, highereducation to slashed was from148,700 USD During the sharply. drop growth, to started institutions steady public to support the financial governmental after when, 1999 in came funding HE in shift major The and 64 percent in Georgia for the same academic year (Tables 7.1, 6.2 and 5.1). Lithuania’s public universities was about 80 percent, to compare to 42 percent in Latvia at students funded instate of share 1999/2000,the increasing of year academic the For actually Lithuania. was - organizations educational of form existing only the Until1999,overall levelhere.the of governmental funding publicto institutions still - the witnessed have Lithuania measuredrelatively been has process this thoughsource, in funding its diversification of institutions HE region, the in elsewhere Like 7.3.3 Higher Education Funding Policies especially marked in Lithuania, where cost-sharing policies have been viewed with viewed been have policies cost-sharing where Lithuania, in marked especially 243

CEU eTD Collection contract between the MoES and HE institutions. The three-yearcontractsshould The long institutions. HE and MoES contract betweenthe the by fees student regulatingframework legal the provides which Education, Higher Hithertounregulated studentissueof tuition wasfinally addressed 2000theby Law on 2002. Leisyte in 2001/05/25 Source 1995-2001 Lithuania, Educationin Higher to and Science in Allocations Budget 7.1Changes Figure respect (Leisyte 2002). this in pioneer a been has sources non-governmental from income its of percent 27 industriesandbusinesses. with links contractual establishing as such privatization, of forms other on take to as well studiesas studentstheirmore paying for institutionsand moreenroll startedto public funding, governmental inadequate of reality new the with Faced makers). suspicionboth at thelevel of policy debateand society at large (interviews with policy- foresee the maximum number of students admitted on self-financed and state-funded and self-financed on admitted students of number maximum the foresee

Thousands of Litas h rf eeomn ln o ihain Hge dcto ytm (DDPLHES), System Education Higher Lithuanian of Plan Development Draft The : 100 200 300 400 500 600

1995 0 201.3 265.9 Allocationsin Budget Change to and Science

1996 273.3 351.1

1997 Higher Education 1995 -Higher Education 2001 318.3 415.7

1998 The KaunasThe University Technology of Years 412.3 531.6

1999 393.1 520.7

2000 335.4 453.4

244 2001 355.6 478.5 Establishments Education for Higher Budget Allocations Higher Education for Science and Budget Allocations that generatesthat around

CEU eTD Collection contracts with the MoES,recoursesilluminatingcontractsthe futureplansand theirwithrequired the for year three as well as plan development long year five sign and develop institutions HE that requires law the all, of First funding. HE the of coordination and better planning towards forward step a was indeed it respects, various In the in policy. flaws financial multiple and seatbacks the improve to intended was Law 2000 The institutions. regulatoryclear framework resulteduneven in practices studylevelsfeesacrossand of problemspersisted with relation tuitionto feepolicy well,as seeing thatthe absence of The resources. available of use efficient for incentives no incorporated mechanism funding the importantly, More interests. their of best the in funds state the mange to flexibility limited with granted were institutions the bases, monthly on allocated Moreover,budgetdistribution. the decisive in more institutionalbe leaders,provedto certain of power bargaining notably factors, subjective hand, other the On funding. of level the determining in play to role little had HE for priorities state or programs study of cost the evaluations, quality mission, institutional as considerationssuch the allocationswere made solely according previousthe to yearexpenditure records, while Education of Ministry the proposals, which in turn were based on of the reports of HE and research consideration institutions. The little a with Finance of Ministry the budgetdevelopedstatewas the all,by of First hamperedbeenvarious has factors.by implementation its but Law, 1991 the by already introduced was mechanism funding lump-sum on financialbasedpolicy The Lithuania. budgetaryin made allocations are the way the in changes other of number a introduced has law new The means. other through generated also and state the from received recourses of amount the places, fulfillment. The decisions about the level of funding are made by the MoES in MoES the by made are funding of level the about decisions The fulfillment. 245

CEU eTD Collection determined by the government (Article 59, sub.1, Law on Higher Education, 2000). Education, Higher on Law sub.1, 59, (Article government the by determined the by set is tuition sector government,minimum public living,the alsotimesstandardexceed fourof whichshould not of level upper the hand, other the On bases. annual the on Ministry the to reported be to have decisions these though fees, tuition Privateinstitutions, forms. oflevelthe established,decide are theyon once to free are other in organizations educational owned privately to aid financial about Law new the in discussion no is There 2001).Lithuania, Statistics (Departmentinstitutionsof research and HE to funding state total the of percent 0.1 than more not to amounts this annually, that, estimated been has It 55). (Article sector public the in trained be not could that fields certain in specialists for need perceived a is there if contract a initiate can MoES the that stipulates Law the funding, institution private for As student numbers and demand for research (Leisyte 2002). in increase the like variables, or ratio, student/teacher the and qualifications teacher was half other normativeaccountas indicators, such into formulataking the determined accordingto the of two-thirds only and expenditures year’s previous the with line in allocated fundingstill was funding the formula of half 2002, In the gradual. been has mechanism of implementation the expected, As mode. and level field, particular a of costs the account into takes that mechanism governmentallyapproved onprogrammesbasedstudy are the directlyrelatedto activitiesnot other research and institutionsHElump-sumpublicdistributed were Allocations basis. studies, the on for to governmentalfunds that stipulates Law new The decisions.allocation the making Council account into taking also while proposals, these to accordance Besides, compliant with the constitution, the HE Law guaranteesfreestudents“good”Law HE constitution, the the compliantBesides, with recommendations . Broad priorities of the state also have a role to play in play to role a have also state the of priorities Broad 246 the Higher Education Higher the

CEU eTD Collection oiid is plce o a o alw piaey poie ihr euain the education, higher provided privately allow to as so policies its modified has government the resistance, of years many after that fact the despite that, reveals institutions private affect that policies governmental the of examination above The 7.3.4 Conclusion Loans administrating the loans programme Fund - started granting loans in 2003. Education Higher and Research 63). (Article granted was loan the which for studies of period the of times three withinrepaid be shouldinterestannualpercent 5 with loan a banks, Lithuanian by Administered abroad. studying and living tuition, of costs the cover tostudents providedfor assistanceis the it, Accordingto 2000. EducationHigherin termsfinancingforthe but students wereonlyclarified Law passingonwiththe of 1998-99, in provided was loans study the introducing for framework legal initial The tax. income to subject are and students to payments as treated are scholarships such Furtherpossibilities forenterprises awardto scholarships studentsto areconstrained as 61).(Article need social achievementacademic and their on based scholarshipgrants, state receive can institutions public at enrolled students full-time those only while Both,publicprivateandstudieseligibletheir studentsloans,study are forfor paywho sub 1 and sub 2). (Articlefunds60,state covered the from be sector shallpublic studentsthe enrolled at otherpercent 30 and full-time of percent 50 top the of tuition the is, That education. environment in which institutions operate has remained by and large restrictive. 247 n aec epnil for responsible agency an – The Lithuanian StateLithuanian The

CEU eTD Collection diinl plc ht codn o te ltrtr, avrey afcs piae sector development. private affects adversely literature, the to according that, policy additional an represents low, tuition sector public of level the sets that approach governmental more has this tuition, of unfavorable implications for private level institutions than for their public counterparts. higher The significantly the of Because 7.3). (Table Lithuania in low somewhat is students tuition-paying for loans study on overall spending of level the place, in policies loan student have that post-countries communist other to compare to However, region. the in uncommon not is universities private attending those for grants aid student or institutions private to funding state direct of absence The institutionfunding.private in role no almostgovernment plays by achieved be institutionswithsolidfinancial assistance fromreligious international or only donors,the as can This legislation. the by required recourses financial of appropriatesecuringlevel to related these been conditionshas all challenging of most The accomplish. to hard decidedly be to prove recognition state official gaining and establishment their for with comply to need institutionsrequirements the all, of First 248

CEU eTD Collection Hungary Lithuania Latvia Estonia Country higher education most closely fits regulatory policy model. can state that the policy stance embraced by the Lithuanian government towards private we said, was what together Bringing competitiveness. latter’s the affected naturally the However, years. many for governmentalauthorize choiceto collegesprivate andinstitutions samehastime the at marked been had institutions non- type for need university the Thus, providers. education higher in increase the by matched not was which rise to started soon it but Lithuania, in initially fell education higher HE providers, both processes were contained in Lithuania. It is true that the demand on public as well as private in increase sharp a witnessed 1990s of beginning the where countriespost-communist other unlike since, surprising hardly is This 7.1). (Table then since twofold than more by grown have enrollments sector public The system. education higher into integration their the and institutions allowed type college also of establishment it when year same the in university private first the authorized equallyunfavorable governmental example,LithuanianForthe approach.government reveals ways indirect more in institutions private influence that policies into Looking Source: 2002 of Distribution 7.3: Table Eurostat, Education statistics in Schmidt in Educationstatistics Eurostat, 77.6 88.1 80.1 82.5 institutions educational to expenditure public Direct

Total Public Expenditure on Higher Education by type of Transaction for Transaction of type by Education Higher on Expenditure Public Total coasis ad other and Scholarships students aidto Financial oneducation expenditure public Indirect 13.2 10.1 12.2 7.8 Total householdsgrants to - n/a n/a - for HEIse attributabl which Of 249 Statistics in Focus: Education and Training,

9.1 1.5 7.7 - Loans Students

22.4 11.7 19.9 7.8 Total 0.0 0.2 0.0 9.8 enterprises and organizations non-profit toTransfers

2005

22.4 11.9 19.9 17.5 Total

CEU eTD Collection --- 1989 economic transition of Lithuania was slower than that of Estonia and Latvia (Lane Latvia and Estonia of that the than slower that was Lithuania considered of transition generally economic is It heavily. economy Russian the previously on were dependent that countries satellite other as setbacks same the with suffered has economyLithuania’s change, regime the followingimmediately years the During and Jackunas. onMokeine, Klepacieme 2001based Centre, Source: GDP) (percent of Lithuania in onEducation Public 7.4: Expenditure Table education institutions are constrained by low level of the GDP itself. comparableaverageEUto percent 5 of (Table 7.4).Despite this,resources available to is hand, other the on GDP, of share the as education on expenditure public of level percentsrespectively 58 and The (Schmidt 43 whichspend 2005). S U. the Japanand than lower much and percent 37 around of average EU the under slightly is which student, HE per capita per GDP its of percent 35 aroundLithuaniaaverage,spends In 7.4.1 Economic Development Education towardsHigher Policies Governmental of Determinants 7.4 2002). Opting for policies of slower liberalization, Lithuania experienced one of the of one experienced Lithuania liberalization, slower of policies for Opting 2002). A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A 4.5 1990 --- 1991 --- 1992 4.6 1993 5.6 1994 250 5.6 1995 5.4 1996 5.8 1997 6.4 1998 6.5 1999

CEU eTD Collection Wages Real rate inflation Annual (%) GDPin change Annual a Growth GDP Real Table 7.5: Economic Indicators, Lithuania 1989-2000 Lithuania EconomicIndicators, 7.5: Table affected by the Russian crisis to some degree. dependency on Russia was much less by then, the Lithuanian economy was nonetheless (for 1999 Althoughthe Appendix 9). in tablesexamined countries rest see in comparison the with again decline of signs some showed economy the downturn, initial overcomingafter but the decline, the inflationon whilegrow was outputbegunto the when1994, around from economicstartedrecovery the reflect, 7.6 and 7.5 Tables As underdeveloped and un-regulated banking system (Lane 2005). and inflation high legislation, inconsistent and vague foreigners, for ownership land administrativeand barriers, widespread suspicion foreignof owners restrictions and on bureaucratic high are which among countries, Baltic other behind laggingLithuania’s explainingfactorshelpnumber of A region. the lowestin the of one whichwaslevel, 1989 its of percent 43 as low as fell GNP 1993, and 1989 Between prolonged. more compareBaltictwoits to neighbors. result,Asthe Lithuania’s economic recovery was national 1993,introductiona currency andits place in in put somewhat was delayed to highest among the Baltic States, was finally brought down by effective monetary policy Althoughthe inflation,wasleaving.which standard of and outputgreatest declines in c b

0 100. n/a 1.5 0 100. 1989 8 108. 8.4 -5 .0 95.0 1990 75.3 7 224. -5.7 89.6 1991 46.6 5 1,020. -21.3 70.5 1992 28.4 4 410. -16.2 59.1 1993 251

32.5 72.1 -9.8 53.3 1994 33.5 39.6 3.3 55.1 1995 34.8 24.6 4.7 57.6 1996 39.5 8.9 7.3 61.8 1997 44.6 5.1 5.1 65.0 1998 47.8 0.8 -4.2 62.3 1999 n/a 1.0 2.2 63.6 2000

CEU eTD Collection 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1990 1989 oriented practices, including taking in more self-paying students, in their attempt to attempt their in students, self-paying more in taking including practices, oriented There is no debate about the fact that institutions started to re-orientate towards market- manifest.more been has governmentallevelsinstitutional and the at both changes the Ontheother hand, thecorrelation between the level of fundinghigherto education and have contributed to the dearth of existing resources. was available for the higher education sector during the first years of the transformation that countries)Scandinavianneighboring the from (especiallyassistance international in decline the with coupled education higher on demand student in increase steady Certainly,the universities.public by felt stronglytheavailable resources was in decrease change, regime the since time first the when, 1999 in was it that remains fact reason for lessened governmental appropriations for the higher education sector, but the documenthard is to It whether economicthisdropthe in output servedhas the mainas office country statiistical website of 2005taken from for force survey. onlabor Data 15-59) since 1995based aged Data of population as a percentage employed (number of Ratio 2007.Employement database, Indicators onWorld Development Based States. Source: as employed of (number Ratio Employment and USD) Lithuania aged in population 15-59) of percentage 2000 (constant capita per GDP 7.6: Table cope with the decreased level of public budget (Leisyte 2003, as well as interviews with

TransMONEE 2007 features: data and analysis on the lives of children in CEE/CIS and Baltic and childrenCEE/CIS lives in of and onthe analysis data 2007features: TransMONEE 3,754 3,505 3,275 3,124 3,156 2,921 2,711 2,571 4,354 - capita GDP per 4,838 4,481 4,166

68.6 67.0 67.3 65.9 63.5 65.6 68.1 69.3 72.5 74.4 74.1 81.7 83.9 Ratio Empl.

252

CEU eTD Collection and right. This was true even for economic policies, which did generate some conflicts, HE simply were notsignificant enough as to invite debatesbetween theLithuania’s left consensus,wide ofissuesa been has whichthereforeign security policyon andissues examining different sources, HE policies played no role in these confrontations. Unlike between disagreements the major political groupings wide on different issues, but as this study by has found by characterized been have 1990s of politics Lithuanian The 7.4.2 Political Parties and Ideology with ISM’s Alfredas Chmieliuskas,). permission(interviews such obtain finally to moment “right” the be to proved simply 1999 of year the out, pointed have Management of School International of leaders the As made. finally was institution private first a authorize to decision the when were denied on various gourds. Likewise, it did not take a passing of special legislation training establishments in operation, seeking officialstate recognition, buttheir appeals were there repeat, To HE. provided privately not of existence did the legislation proscribe explicitly the vague, although that private forgotten be first not must a It of institution. establishment the and practices tuition-paying regulating for allow to framework legal legislation a of creation the sector,education the higher into colleges of integrationpassing the saw 1999 of year the precise, be To sector. the for financing public declining sharply with coupled education, higher on demand risingbackground of the against made been cost-sharing towardshave policies moves major the that coincidence no is it too, level governmental the At HE). on experts but mostly on the level of rhetoric. If there were the differences, it mostly concernedmostly differences,it the were there If rhetoric. of level the on mostly but 253

CEU eTD Collection choices. The constant restructuring of the agencies responsible for overseeing the overseeing for responsible agencies the of restructuring constant The choices. policyother and HE on influence no had outcomeelectoral the that say to not is This market-liberal economic policies. someextent, pressurewhilethe from international agencies insured continuation the of to policies protectionist social advocated election seeking grouping political major Lithuania,every as dividein party the form not socialwelfare did issues of words, the other In advantaged2005).(Lanedowncutting taxesless and the conditions living of improve to order in programs social governmentalon increasingspending of promise dual the was program their of hart the At right-of-center). towardsdrifted and stance (reformed Homeland Unionthe LDDPgovernment)towards adoptedpolicies by pursued by was criticism (and rhetoric same the later, years agriculture. Four depressedindustriesand programs,providingwages,minimumraisingandthe of level supportsubsidies and to social increasing on turned 1992 in campaign election the in Brazauskas) Algerdas of leadership Lithuanian the under the communists former of the – pledge (LDDP Party main Labor Democratic the Thus, policies. these of modification want to seemedelectorate the economy, the on devastatingeffect have to perceivedwidely by pursued policies the After welfare. social of issues the towards right and left the on parties of approach the in difference no much that there was Neither ensured 2005). process (Lane maneuver for transition leeway much had Lithuania’s government the in agencies external the of and nuancespace of privatization policy. Notwithstandingthe these differences, particularly a wide involvement more and policy, economic of details and emphasis the sector reflects the bearing of the changes in the political arena on HE developments. HE on arena political the in changes the of bearing the reflects sector Sajudis Sajudis which after electoral defeat in 1992 had dropped radical nationalistradical dropped had 1992 in defeat electoral after which Sajudis 254 (Movement) government, which were which government,(Movement)

CEU eTD Collection beliefs of the Lithuania’s government. cost-sharinghighereducation to fundinggaverise policies, that ideologicalrather then of level the in decrease the was it that supposition the to support stronger provides evidence Empirical changes. these about bringing in role key the party played ideology the that supposition initial our to support no revealed officials government former with undertaken interviews and sources written of examination the However, office.right-leaninggovernment duringcoalition in taken provisionwere and funding HE in profile state the lessening towards steps important Most outcome. electoral the in changes the with relation in field HE the below in developments major 7.7 the presents Table formation. policy on influence overriding having factors other But this had less to do with a ruling party ideology than with the leadership, personal or 255

CEU eTD Collection groupsbecame eligible formallytointerest takepart the meetingsin ofSeimas committees and the 2000, in introduced Lithuania of Republic the of (parliament) Seimas ofStatute the amendmentsFollowing the of Lithuanian (Spurgacontext2005). the in negativeoverlyconnotation an has fact “lobbying” term in bribery,corruption the and with associated Commonly government. the and groups interest between channels informal through place takes representation interest where countries post-communist other to similarintermediation, quiteinterest Lithuaniaof is mode the to respect With 7.4.3 The Mode of Interest Intermediation Table 7.7: Higher Education Policy Choices inLight of Electoral Outcome in Lithuania Policy Education Higher Changes the Outcome Electoral

HEIs. introduced at programs level degree 1992-1993: three Education Higher 1991: Law on the center) Sajudis (rightto majority of Parliamentary 1990-1992:

CQAHE ofestablishment 19 separate unit of MoES as a 1994: establishment charging tuition fees institutions start 1993: public Brazauskas - president – Algirdas 1993: Elected (former communists) majority of LDDP Parliamentary 1992-06: 95:

256

university of the Firstprivate 1999: Authorization loans frameworkfor study 1998-99: initial legal HE and Research of the Department of 1997: establishment Adamkus president - Valdas 1997: Elected to center) CentreUnion (right Democratsand Union Christian Homeland People’s government of 1996-2000: Coalition Education 2000: Law on Higher

operation system put in 2003: Study loan Paksas – Rolandas president - 2002 : E Since June 2001 Liberals) Union(Social LDDP and New government of Coalition 2000-2004 : lected

CEU eTD Collection establishment (in Leisyte 2002). Founded in 1991, the College finally obtained the obtained finally College their the 1991, avert in Founded to 2002). Leisyte possessed (in establishment they lever every used Conference Rector’s the that out Christian Lithuanian the College’s struggle for governmental during recognition, its President Jim Mininger encountered has pointed challenges the Discussing 2001). have managed to preserve their monopoly over HE provision for a long time (Mockiene Mockiene, by exploiting the issue of quality assurance, conservative forces of academia to According interests. diverging often their of spite in cause, common the around unite and find to embers its of ability unfailing at pointed interviewees the Conference, of success remarkable the rationalize to trying In establishments. HE private the crucial role that the Rector’s Conference has played in preventing the recognition of emphasized have policy-makersinterviewed of majority the and 2002) Leysite 2001, presidentand other high level officials. The examination ofwritten sources (Mockeine the connectionswith direct through also but intermediarybodies the through only not Conferencethe possesexertinginfluencepolicy for theHE formation on manifested is recognizedinterviewees,thatpower by as the But 2000.HigherEducation in on Law LithuanianQualityAssessmentHigherEducationCenterfor in to opinionexpert providing in role advisory Its 1992. in founded Conference, Rectors’ Lithuanian the been has academics of professionalassociations all influentialof most The communisttimes. the from elites political and community, HE the between academic bond close of the traditions strong inherited has of Lithuania representation interest of nature the to regards As through communication at informal level. interestthe voiceinterestUntilthen,theirrepresentation openly. mainlywasachieved permission to grant state recognized degrees in 2000. 257 the Science Council of Lithuania of CouncilScience the was legitimizedthe was by and and the

CEU eTD Collection xldd ps-a mirns fo h oiia rcs, Ltuna aotd an adopted Lithuania inclusive policy, offering citizenship for process, all country’s residents (Lane 2002). political the from immigrants post-war that Estonia excluded and Latvia from difference in first Hence, the liberal. during very was emerged government that rights minority and human the protecting as well legislation as law, citizenship the however, whole, the of On region Polish Lithuania. southeast ethnically the in self-government local restore to refusal the in policy of ethnic nationalism. Their strong nationalist sentiments a manifested themselves supported government Sajudis the of members many countries, post-communist acrossgovernments elected first with case the was generally As politics. Lithuanian the importantplayedfor less role Latvia,it Estoniawhileand in issuemajor becamea minorities and citizenship of question the that therefore surprising not is It (1997)). Robinson and Henderson in (1994b) Raun and (1994) (Lieven percent 34 about was population Russian the and percent), (52 majority the in barely were Latvians ethnic Latvia, In Estonia. in percent 30 around Russians and percent 60 around constituted Estonians native contrast, In 1989. by Russians percent 9 only and natives percent 80 almost having homogenous, most ethnically was Lithuania States, Baltic three the Among 2002). Lane 1997, Robinson and (Henderson evolved paths transitional their in differences most which around factor key the as served also it and States, Balticthree transformation all the processof in importantrole an playedfactor Ethnic 7.4.4 Demographic, Ethno-Linguistic and Religious Factors 258

CEU eTD Collection oenetl sac oad rvtl rvdd H Itriw ih with (Interviews HE provided privately towards stance governmental sentiments,personaltheso factor might haveplayed adoptingtherolein restrictivethe nationalist strong his for known was education of minister first The authorization. seeking those among providers language foreign of predominance the of because speculate to whetherlegalizationearlyhard the private institutionsis of resisted It was degrees in 2000. BA state-recognized grant to authorized got finally that institutions three mentioned above the of the out organization educational model, only the arts is College liberal Christian Lithuanian American the after Designed recognition. state the official sought – (LCC) College Christian Lithuanian and University Polish Rutenia, Institute Russian - establishments educational language foreign three least at 1990s, the of beginning the In providers. language minority were also change regime the seeking toobtain anauthorization for privateHE establishment duringthe first years of those among expected, As language. national the learn to incentive no have would minorities speaking non-Lithuanian law, a such without that alike society the and politicians between belief shared widely a was There minorities. Russian and Polish in was effect in which law, language contradiction thelawto on ethnic minorities, remained sensitive a The issue forLithuania’s language. national the than other in institutions public at provision HE prohibiting law language state adopted Latvia, and Estonia like Lithuania, 1989, of changes the after Soon 2002). (OECD Russian in studied students HE all of percent 15 around times, Soviet the During choices. ethnicminorities, nationalist instincts haveseemprevailedto deciding in policy HE on its towards adopted Lithuania which policies of nature liberal the Notwithstanding 90 LCC Kaminskiene, It is notable that the establishment of LCC was met with the resistance from local Catholics as well. as from localCatholics theresistance was with met of LCC theestablishment that notable Itis 90

). What can be said with more certainly, however, is that the that is however, certainly, more with said be can What ). 259 Ligija

CEU eTD Collection (Higher Education in Lithuania 2001). organizationsreligious by established were three years, two following the in opened theproposal ofVilnius Archdiocese 1999.Outinfour of private universities that were education. SeminaryJoseph Saint Vilnius provided publicly than other allowing towards swaying in policies role governmental key the played have groups religious the influence, supply-side percentof Lithuaniansonly (Appendix16). The study has revealed that,by exercising two by practiced is Estonia and Latvia both in religion predominant the represents that Baptist) Christian Evangelical and Lutheran (including Protestantism percent. four only constituted - believers of group largest second the - Christians Orthodox Russian while Catholic Roman were Lithuanians of percent 79 2001, in conducted results census to According States. Baltic all of homogenous most the is Lithuania population, the of composition religious to respect with also but ethnically, only Not that of Lithuania’s. than exclusivist more were minorities ethnic their towards policies overall countries’ both that fact the despite case the be to proved HEthis again, emphasize To in altogether. participating from language state the speak not did who population the of from mainstream academia, as it would have been hard to justify preventing almost half excluded minorities countries’ the of needs emerging the serve to sector private the LatviaandEstonia, where native populations barely constituted majority,the permitted contrast, By minorities. create its to for sector need public the pressing outside opportunities educational a such no had Lithuania heterogeneous less ethnically – Lithuania’s first private institution - was founded at founded was - institution private first Lithuania’s – 260

CEU eTD Collection thousands) (beginning of year, 0-17 Population age increase population ofRate natural enrollments Higher education Centre, 2001 based on EBRD (2000), 1999 estimate, 2000projection (2000), onEBRD 1999estimate, 2001based Centre, Source: Lithuania in Change Demographic and population) 19-24 of (percent Enrollments Education Higher 7.8: Table visibly since the mid 1990s. part-timeeveningespeciallyrisingprograms,and been HE, on demand has on the and engagingcalledso “bazaarin commerce.” Thisattitude, however, longdidnotlastfor through income their earn to people young among popular became it when period term the employed have policy-makers Interviewed youth. the among attitudes in change the from ensued rather it but capacity sector public the in decrease the of result a neither was enrollments HE of shares the in fall the revealed has examinationundertaken The decline. demographic the to attributed yet be cannot communism of collapse the following immediately years the during thein rate ofhigher education participation by some percent7 that Lithuania witnessed drop the But 9). (Tabledemographic 1989 sharpchallenge since experiencing been a Lithuaniahaspolicies, HE demographic on change of influence regardingthe Finally, A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A

n/a 4.7 n/a 1980 0 1,00 4.8 27.8 1989 3 100, 4.1 22.8 1991 261 994 0.4 20.7 1993 971 -1.1 22.8 1995 Bazaar Era Bazaar 914 -1.0 39.2 1999 896 n/a n/a 2000 in relation to this to relation in

CEU eTD Collection decade of the transformation. Thirdly, there were well-organized associations of the of associationswell-organized were there Thirdly, transformation. the of decade first the during adopted minorities, country’s the towards laws other and citizenship the than exclusivist more much were which policies, was HE in reflected was society the law language the that Lithuanians integrateinto thus Lithuanian and learnnon-native population indispensableto the for the among belief shared widely the the compel to as so Perhaps, large educationalsector. opportunitiesthe public create government outsidethe to as not were groups these Latvia, and Estonia unlike notbeing ablespeak to thestate language, were leftoutthe mainstream academia. But who,ethno-linguisticminorities the have did Lithuania education. provided publicly than other on demand “differentiated” vast a there was neither Secondly, provision. governmental the by satisfied be not could that HE on demandleft-over no was there availablepost-communist mostin slashresources the did as otherwords, countries.In same the from suffer not did sector the HE Lithuanian the political-economictransition, of years first transformation. the the of characteristic of decline years economic the first despite the Furthermore, during drop actually did HE on demand participationmore, theWhatis region. Lithuania highestthethe in in of beenone had HE of level the 1989, by institutions HE at enrolled cohort age youth the of percent havelargea pent-up demand onHE inthewake ofthe regime change.With almost 28 not Lithuania did region, the countriesin most unlike all, of First institutions.private towards government Lithuanian the of stance restrictive the determined that factors different the of nexus the was it that said be on can factors HE towards level stance governmental broad of influence relative the of evaluation our of summary In 7.4.5 Conclusion academic elite that, in protecting their institutional interests, managed to exert the exert to managed interests, institutional their protecting in that, elite academic 262

CEU eTD Collection influence of the religious group interests on the supply-side also became perceptible. coupled with the rising demand on HE. For this shift in the governmentalfunding approach, the HE declining of background the against place took policies governmental influenceupon HEpolicy revealing is choices. It thattheeventual liberalization theof 263

CEU eTD Collection and heterogeneity of population with regard to religion, language, and ethnicity. The ethnicity. and language,religion, to regard with population heterogeneityof and influenceof professional associations, themode of interest intermediation, demography and power the party, ruling a of underpinnings ideological country, a of wealth the governmentalapproach towards privatehigher education equally wide,is consisting in of differences manifest empirically understanding help that variables explanatory of set The services. desired for pay to willingness and area rural and urban of size factors suchas heterogeneity of preferences, intensity of demand, perception of quality, specificcountry and subjectivesociological, other add could we this to Conceivably, process. policy-making in representatives institution private of inclusion towards and quality, and capacity sector public on spending towards policies institutions, to financial policies, governmental such as tax policies, student grants operate, and loans and direct appropriation institutions which in framework regulatory and legislative includes education provided privately of nature and scope the influence ostensibly that factors of array The analysis. policy public the from education- private towards policies the analyzing reason, that for and production government of study a has from investigation this As separated be cannot education provided privately of variables. study a suggested, convincingly of multiplicity a is setting comparative a in patterns growth education higher private examining in difficulty underlying The Introduction 8.1 e f vrals ta ae togt t hp gvrmna oiis cud ute be further could policies governmental shape to thought are that variables of set CHAPTER 8: SUMMARY OF FINDINGS 264

CEU eTD Collection identified policy disposition. variable. The section after moves toconsider whatcharacterizes thecountries with the provided privately of nature education,thefollowing section briefly sumsobtainedupthe results oneach examined and scope the shape choices policy governmental policy governmental how analyzing before But patterns. growth education between higher private and dispositions link the to related conclusions important suggest empiricalThe resultsobtained in-depthfromthe examination countryfourthe of cases Patterns Growth EducationHigher Private and Policies Governmental 8.2 emerge strongly even from this undertaking. morerobust results.Nevertheless, several important points, discussed what follows,in Testing resources. yieldedhavemightcountry case each probing depthof and additionalin morevariables or space time, of limitations the of because extent, certain a to analysis of breadth the for depth sacrificing entailedthe also studies case country privatesector development possibly were leftunexamined. The choice conductto four on bear to bring that factors many that say to is This testing. prominentfor variables sectors across countries inevitably involved selecting only few, what was thought to be, education higher private of study a out carrying variables, of multiplicity this Given private sector itself. of influence and size the least not and country a of history the include to extended 265

CEU eTD Collection institutional leadership. The Ministry of Education as a separate unit capable of capable representingandupholding interests the starkstateonlythewas In formedof 1994. in unit public separate a the as Education by of Ministry exclusively The almost leadership. institutional drafted was 1991 of Institutions Education countries,including Lithuania.haveweseen,Lithuania, As in firstLawHigherthe on post-communist many in was it way the Hungary in discredited never was general in LawtheonHigher Education legitimacy1993, stateof rolewellitstheas but the as of Hungary, playing crucial role in preparation of both, the Law on Education of 1990 and havebrought bearto policy on outcomes. Institutional forces were especially strong in they influence the and involved actors of number the to respect with variation wide other three countries have passed their laws in the beginning of the 1990s, there exists a 2004. in only EducationHigher– on wasLaw first the and 1997 in – enacted sector education for document legal first the – Education on Law the fact, In 2003. of changes political the after only player active an became it while 1990s, policy-making assumein Georgia,somerolestarted state midto wherethe is thefrom respective in legislations countries did sanction practices already in operation. later The most extreme case in this respect Only level. institutional the at initiated were transformation the of years early witnessedthe during countrieshave the that changes policy many noted, have we As differences. initial these beyond well go education higherlegislativeframework for differences in However,the 1990s. the beginningof 1999,while theother three countries have legalized privately provided education in the in only recognition state official gained institution private first the as most, the out Withrespect theto most fundamental policy oflegislative framework,Lithuania stands 8.2.1 Legislative and Regulatory Framework contrastto this, theMinistry ofEducation was the keyactor in higher education policy- 266

Althoughthe

CEU eTD Collection extensive collaboration among the Baltic States. the between the startling of result the were policies more assurance quality as Lithuania, and Latvia neighboring the all is discrepancy The Lithuania. and in cumbersome Hungary and challenging considerably be to institutions for new process establishing a reveals however, cases, country the of examination nuanced More share. countries three the in procedures the that characteristic further the constitutes education higher in sectors two the between differentiate not do recognition official obtaining for standardscomplywithuniversitiesthe to That needpersonnel. and base material for requirements stringent as well as standards academic high the set 1990s mid the in countries three all in established procedures assurance Quality parallels. The developments in Hungary, Latvia and Lithuania, on the other hand, bear significant decade. a least at by delayed were processes these as treatment, separate a meriting case, outlier an is Georgia respect, this In institutions. private of growth rapid and easy control to achieve was mechanism assurance quality implementing and to creating through sought governments that goal Another change. regime the following immediately years the during acquired had universities that autonomy institutional vastcurtailing governmentsfor of hands in tools main the of one becameprocedures control quality establishing mechanisms, accountability institutional and implementing devising to addition In 1990s. mid the from governance education higher in regulatoryassumegreaterrole to countries startedCEE general,all governments In of framework for higher education. making scene in Latvia from the very start, playing active part in crafting the legislative 267

CEU eTD Collection regulation and public enrollment growth, which have indirect but not less profound less not but indirect have which growth, enrollment public and regulation that efforts sector public towards governmentalapproach is regulatory development sector private influence governmental to connection in discuss to point further A region in general, which will be accounted for in the following sections. each succeedingnotableyear,a exception is in notonlyamong sampleour countries thebutin increasing process, gradual private and in steady growth a as the experienced where was Latvia, enrollments shares. sector private in decline the even or growth retarded a by marked is tendency recent more outset, the from controlled more was development their or setting anarchic an in evolve to started institutions private whether of Irrespective Hungary. including countries, post-communist most inchangeregime the of wake the in place takenenrollments private has in growth the requirementsextantfor organizations. Thisexplanationcouldone be whyformuch of quality meeting than harder decidedly be to proven has university new a up setting for resources necessary obtaining large, and by that, stress to rather but standards, Latvian authorities shutting down institutions not complying with the newly-established the of cases no were there that say to not is This implementedpractices.Latvia these t while Lithuania, in education higher provided privately of legalization the preceded had procedure control quality establishmentof the precise, be To policies. assurance quality of introduction the of growth of private institutions across highly comparable country cases is the very timing butdisproportionalunderstanding obvious trying when Less consider to factor growth. important nonetheless private profound the and of nature direct and scope having the for been implications have approaches contrasting these Indeed, mlctos o h sco. Lk hi rvt oneprs ulc isiuin in institutions public counterparts, private their Like sector. the for implications he bulk of institutions were already in operation whenoperation in already were institutions of bulk he 268

CEU eTD Collection oiis dsusd i h usqet scin big ot te dfeecs i the in differences the out bring governmental approach across the selected section cases even more visibly. subsequent the in discussed policies tax and financial Governmental projections. market labor the or demand student than rather capacity program training reflects largely which sector, public Hungarian of character supply-driven largely to contrast stark in stands This dynamics. sector public shaping in role considerable play to demand market labor the allowed has it redundantprograms even themostin prestigious universities,ofall the sameat time as nations. communist However, as itwas shown, among theLatvian government has notshunned highest from closingdown the of one higher be of to level used participation pre-transition education the where too, Latvia in opened have institutions public new of number A size. sector public the expansionin somewitnessed nations FSU the and CEE all almost systems, elitist quantitatively inheriting that, true is It the beginning of the 1990s. education,resultingalmost quadruplein increasepublicthesector enrollments in since higher elitist highly previously to access expand to attempt resolute government’s Hungarian the was it Namely, Georgia. in inaction governmental the from remote more be not could increase that enabling reasons the but Hungary in further even governmentalabsencedynamics of the in expandedpublicsector regulations. Thehas inter-sectoralshape to serve forces market how illustratesvividly most case Georgian The enrollments. private easily-proliferated equally the on toll its took gradually that enrollments sector public the in growth easy and spectacular a to lead has This time. of period significant a for control governmental escaped largely have Georgia 269

CEU eTD Collection is in operation from 2006. the last to developthe study loan scheme in cooperation with commercial banks,which loansare available for alltuition-paying students inLithuania since2003. Georgia was study the while 2001, Hungaryin implemented practiceswere in loan studentagenda, policy the on being vigorousof years ten around the After education. balance higher its of to privatization lending student of system well-developed and flexible most has also it 1997, in scheme post-loan student introduced have first to country communist the Latvia is only not seen, have we As four all examination. under in countries operation in already are development, sector private for implications significant having also policies, loan student hand, other the On generalization. this competitive basis to students enrolled at both sectors from 2005, is notable exception to on grants study providing started which Georgia, grants. than rather loans of form the in mostly but sectors, private the attending these to policies aid studentextending and exemptions them. to available deductionswere tax nor funding direct neither as almost tuition-dependent, were exclusively Georgia and Lithuania Latvia, in institutions private recently, Until observedotherwisecountriesvariation across of the vastlydifferentis leanings. policy assistancenon-stateits to institutions.fundingfact,dimension the In whichis on least financial direct providing in alone nearly stands Hungaryregion entire the in also but countries, selected our among just Not repeatedly. emphasized been has institutions The uniquenessof Hungary with respect to thefunding and taxpolicies towardsprivate 8.2.2 Higher Education Funding Policies exception is provided in the Case of Latvia. providedtheCase in is exception "Attistiba" 91 There is only one institution in Latvia - Latvia- in one only institution is There - receiving substantial direct financing from the government. Possible rationalization of this of rationalization thegovernment. Possible financing from direct substantial - receiving 91 Higher School of Social Work and Social Pedagogies From the end of 1990s, the governmentsstarted the 1990s, of end the From 270

CEU eTD Collection tuition in public universities in Latvia. tuition-payingof determiningnumberlevelof studentsfor the factor and key the been highstudent demand onprograms provides.that it The samelabor market demandhas public higher education institution has no single state-financed study place owing to the Finance and Business from comes approach market-oriented government’s Latvian epitomizingexamplestriking Mostthe region.entire the universityin studentspublic universitytuition-payinghighest sharesthe of of studentsstudies,theirone payingLatvia for has public percent 70 nearly With resources. private of influx spectacular most witnessed has Latvian which funding, the sector is public towards remarkable approach Equally government’s government. Georgian the of thrust liberal fostering inter-sectoralat aimed competitionis market-students that furtherreflectthe institutionprivate for grants study provisionof the and choice,encouragestudent that voucher-basedmechanism fundingintroductionof the as such Policies stance. policy public resources and only later it became an integral part of the deliberate governmental self-surviving strategies adopted by public universities in the face of exceedingly scarce tuition-payingstudent numbers inGeorgia before thechanges of2003 wastheresult of lessened has financing in increase sharp university the emphasized that be must It public Latvia. and Georgia considerablyin in state the of role the while funding, institution public the in profile strong somewhat kept have governments Lithuanian and Hungarian The study. undertaken the from emerge patterns clear two respect, this In patterns. growth sector private the on influences important among counted be governmentalalsofinancing noted,shouldsector publictowardspolicies was it As where all students pay for their education. This newly openednewly This education. their for pay students all where 271 the Banking School of School Banking the

CEU eTD Collection regulatory role was limited to basic licensing. closedinterferenceauthoritieswithoutstateany governmentalwhereand and the form openedinstitutionsprivate where mode, governmentalpolicylaissez-faire of example clear a is 2003 is changes the before Georgia Finally, posture. policy competitive market- to closer be to approach governmental Georgian and Latvian the this suggest All education. higher in sectors two to approach evenhanded its by general, its by distinguished in and, further process planning education higher in sector private is the include to willingness stance governmental Latvian The policies. aid parents observed in the two countrieshave been balancedby carefullydesigned student their and students to government from education higher of increasingcosts shifting of tendency The Georgia. post-2003 the and Latvia in stance governmental the to underlyingbeen has budget state the institutionson dependence financiallesseningof and practices market-type of adaptation involve that policies the hand, other the On Lithuania. in lacking are incentives such while sector, private to assistance financial providesHungary that being difference major with model, policy regulatory to closer countries two the in governmentalapproach the makes This Lithuania. and Hungarycharacterizes steering its in as well as funding sector public in role governmental stronger distinctiveness, and growth sector private restrict assuranceto quality serves stringent that procedure precise, be To country. each in place in put policies the above summery of the main findings does suggest a logical link of some sort among higher education so as to form coherent policy postures was not anticipated to be found, towards choices policy governmental different among correlation strong a Although 272

CEU eTD Collection first decade of Georgia’s political-economic transformation. This is not to say that say to not is This transformation. political-economic Georgia’s of decade first unchangedregulatory regimebroad and political-economicfairly picture characteristic the a of of backdrop the against place took enrollments private of share the in fall ensuing and increase rapid the Both, privatization.sector publicextensive by created competition the survive private to inability the institutions' of in result a drop mainly was sharp enrollments the that evidence ample offered has dynamics sector private Georgia’s the of examination detailed The influence. political and prestige vocationallysmall, orienteddemand-absorbing in mostly be lowinstitutions, will with strugglewill surviveto without supportive governmental policies.Besides, growththe limitedand governmental supply, private institutionsthey butfirst growrapidly will at The Georgianexample once again highlightsthat, inthe faceof alax regulatory regime surprisingly high standing and prestige. institutionspublicbecomesomewhat by has discredited,held privateenjoyssector the many post-communistin has it countries.more, Lithuania,What is in where statusthe educationprovided newly-emergedby extentthe concerninstitutions to a been not has of quality assurancethe regime,qualityregulatory and strict to Subject Hungary. and existencejustifytheir characterizeto servedistinctive that as and mission so Lithuania dispositionand private sector growthpatterns. Private sectors that are restricted insize under examinationbear outthepredicted relationshipbetween thegovernmental policy countries the educationhigherprivate in growth of nature and scope the large, and By Education Growth Patterns across the Selected Country Cases 8.2.3 Governmental Policy Dispositions and Private Higher seems, in the absence of quality and other control mechanisms, well-establishedand mechanisms, control other and quality of absence the in seems, it as rather, But sector. public the in concern serious a not was quality of erosion 273

CEU eTD Collection (Table 1.1)(Table as well terms absolute in experienced was enrollments private the in the drop Georgia in while percent, 92 8.3.1 Economic Development DeterminantsPolicy Governmental 8.3 of ability the enhances only institutions to better fulfill autonomy their mission. their on infringe not does that form a in departments). fee-paying in least (at counterparts public their to competitors tangible as emerge to managed have institutions private Latvia’s developments, recent by evidenced as survivedelayedregulation increasedand public sectorcompetition. hand,other the On to vulnerable more therefore and – quality dubious of institutionsproliferating the to most the experienced spectacularinitial expansion. that countries Romania, and Estonia Georgia, of that than largerRevealingly, is region.it the largestin the of onestudent enrollments all is and rapidly,therenot as butLatvia’s private sector nowaccommodates almost one-third of grewinstitutionsPrivate outset. the from attentive more been has growth private the entirelyAn different pictureobserved is Latviawherein governmentalthe approach to newly-emerged, undifferentiated private institutions. than assurance better with students provided institutions public legitimate more still and Science 2003). Science and Educationof (Ministry institutions public in places fee-paying of increase the exceeded has institutions 93 To illustrate, since 2000/01, the annual enrollment increase in Latvia’s private higher education higher private Latvia’s in increase enrollment annual the 2000/01, since illustrate, To 20 around to 30 roughly from shrunk enrollments private of share market the countries three the In 93 In other words, governmental involvement and support to institutions to support governmentalinvolvement words,and other In 92 Perhaps the laissez-faire initial approach Georgiain led 274

CEU eTD Collection observed similarities in governmental policy choices. That is to say that the sharp the that say to is That choices. policy governmental in similarities observed for also but cross-nationalvariation the for accounts only not variable economic The is also to be attributed to overriding weight of the economic factor. ethnic, religious and pragmatically oriented, normally associatedwith the privatesector is that diversification, internal of kind a undertaking sector public Georgia’s the of of themain moving forces behind the private sector growth.Somewhat aberrant nature contrastLatvia, in toLithuania andEstonia, where differentiated demand beenonehas highereducation that could notbesatisfied bygovernment the production. Thisstands on demand social meet to rapidly grow institutions where pattern country developing inter-sectoral shaping in dynamics. The largely demand-absorbing importance nature of Georgia’sprivate sectormostly fits overriding gained has factor economic the Thestudy ofGeorgia repeatedlyhas stressed thattheabsencein ofthestate regulation, be way any mostreachedformerhadSoviet comparedcountries,in Georgia. whatit in least notto in not could deterioration of scale the change, regime the following immediately years the during decline steady a experienced have countries CEE and eventhougheducationthatfact economiesBaltic the acrosscountriesthe in the of lies higher on spending of level the in differences manifest the for explanation apparent educationpolicies pursued Georgiain and theother three countries. Onthe whole, one of nature the between divide fundamental the for accounts factor economic the with, acrossthe countries in questionwell as policy as changes within each country. Tostart understand to helps that outcomes policy education higher in factor similarities and differences manifest empirically potent a is development economic of level the thatevidenceprovidedample has casescountry four the investigationin-depth of The cnmc dwtr hrceitc o h nta eid o h political-economic the of period initial the of characteristic downturn economic 275

CEU eTD Collection like those in Georgia, but a part of the explanation is still to be sought in the economicsoughttheexplanation theinbe to of Georgia,stillpartthose in like is a but business-orientedadd to liberty programsbranchopencampusesrunning and themfor the with granted were Lithuania nor Hungary in neither institutions thing, one For contributions. private on reliant less countries two the in institutions public rendered naturally has This 1996. until GDP of share the as same the roughly stayed it while higherterms,educationsupportrealincreasing Hungary stateto was whereasthe in in 1999, until growing were sector public Lithuania’s the for available resources the recall, To marketizationtendencies. to impervious most be to proven have Lithuania Hungaryandunexpectedly, in sectors publicNot the certainextent. a to sectorpublic the to available funding of level the with consistent is too to variation that country but country, from varies processes these of extent the course, Of students. paying highly to course-offerings fee-attract attemptto their their demanded businessscienceprogramsstudies,in socialand extending focus, science natural with those and even technical institutions, public most witness we instance, for case, country examinedeach In business-like practices,nations.significantbear parallels the across adopting in organization of forms private of emulation involve which universities, processespublicwhytheinstitutions, Thisis takingbegin with.place withinto public economic in output, which resultedhas drastic in decrease resourcesthe in available to general shouldin severeattributed slowdown,be a to somecases evencollapse,in and frameworkregionselectedcharacteristiccountriesHungary) the the (except for and of privatelyaccommodatinginstitutionsowned subsidies director to tax absenceof legal the Hence, forms. institutional newly-emerged facilitating markedlyfor approaches adopted different have that countries the in institutions private towards policies tax and funding on convergence apparent the understanding helps transformation factor. 276

CEU eTD Collection such as availabilityfunding as such independentof fromgovernmental appropriations as(such on higher education has not always been neat, which is explained by intervening factors spending of level economic the main indicatorsbetween and the link the that true is It state institutions to allow self-financed students. authorizing and students all for fees introducingtuition faculty, the of salaries cutting employees, of number the of reducing the were prompted policy austerity Bokros the governmental appropriationsthe followingin slash the that changes the Among well. as case Hungarian the by offered are funding existing of level the in fluctuations the with line in significantshift policythe examples Theof change.regime the after felt Lithuania in when the slash in introduced the public funding to the higher educationfirst sector was firstly were policies cost-sharing that remains fact the but document, to harder is education higher provided privately legalize to decision governmental the on have decrease that did influence What students. fee-paying more and more enroll to was funding governmental inadequate of reality new the with deal to way reduced governmentalappropriations to the sector. For public institutions, one obvious placebackgroundagainsttook the risingsocial demandthehigher education on of and in institution universities public at private shares fee-payingstudent the in growth the first as well as Lithuania the of authorizing that coincidence no is it so. However, do to governments Lithuanian and Hungarian the for need pressing less been responsibilities the educationhigherhas sectors,privateof there provisionfor some to delegate to governments compelled economies collapsed where countries communist The sameargument can be extendedto theprivate sector dynamics. Unlike many post- the World Bank loan for Hungary), drop in enrollments due to decreased social demand 277

CEU eTD Collection documentedrelationship between party ideology andhigher education policies pursued added,examplestheoffersstudyhowever,almostno bethe must of that It education. higher towards ideology governmental the in shift major corollary its and change the from politicaldeliberate market-liberalthe reflectsthe stance change policy complete inattention to remarkable this that shown has study undertaken The context. Georgian the in precedent no have and powerful is universities, public established well- even for meet and to challenging are processes that standards assurance unruly quality introducing over control establishing corruption, widespread at curbing aimed procedure, exam public entrance at centralized staff setting considerably, the universities down cutting competition, intra-sectoral and inter fostering at directed funding, voucher to moving involves that environment policy the in shift The Georgia. by offered is output policy education higher of nature the determining for ideology party ruling of significance the highlighting example salient most The 8.3.2 Political Parties and Ideology cross-country variation. for power explanatory considerable with one the the and country by each made in governments choices policy education the of determinant powerful be to proves country a of wealth the anticipated, as Thus, undertaking. comparative this from publicfunding higherfor education andpolicies placeputin emerges somewhat strong latter discussed in the section to follow. However, the correlation between the levels of the - factorspolitical or change)regime the of years first the Lithuaniaduring in (like eoe te hne o 03 xet fr ntne we ies a dne for denied was license a when instances for except 2003, of changes the before 278

CEU eTD Collection strongstateprofile provisionthe in andfunding higherof education. discussed,As the a maintaining for social-protectionist,advocating largely been has center the to right themselvesposition that parties the by taken stance the whereas fees, supplementary higher charge to and students self-financed admit to institutions allowing students, all upon fees tuition of imposition as such changes implemented have and approach policymarket-liberal more endorsed have parties left-leaning the is, That direction. predicted the in not though after, shortly varied more deal great a became education higher in involvement state the toward stakeholders and parties political different by expanding statehigheraccessin stanceTheeducation. takenthe the to leading of role the about large at society and parties political all among consensus wide a was there transformation, the of wake the in that however, noted, be must It choices. policy because that change has been accompanied by a significant shift in the higher education also and election, every in after underpinnings change ideological contrasting the of government witnessed has country the because outcomes, policy on ideology elite ruling of bearing the observe to opportunity good a provides further Hungary government. Georgian the by adopted policies exclusivist by thwarted altogether was institution privateIslamic a create attemptsto whereasefforts, failed of yearsseveral after 1997 History institutions. Christian Orthodox than other of establishment the prevented have change regime the of years early the during Georgia of characteristic policies exclusivist-nationalistic excessive the that seems It university. private a up opening seeking groups religious different reason for this seemingly blatant contradiction resides in the fact that social-cultural that fact the in resides contradiction blatant seemingly this for reason – the first non-Orthodox Christian (Catholic) institution - was established in established was - institution (Catholic) Christian non-Orthodox first the – The Sulkhan-Saba Orbeliani Institute of Theology, Culture and Culture Theology, of InstituteSulkhan-Saba Orbeliani The 279

CEU eTD Collection higher education development in the end of the 1990s stemmed from the change in change the from stemmed 1990s the of end the in development education higher the of path the in shift major the marked that cost-sharingpolicies towards move the despiteandright-leaningchange left the inevidence no There is parties thatpower. in difficult,somewhat proves hand, other the stance on Lithuania, governmental in education higher towards the on ideology party of impact the Documenting Baltic two nations. the by upon embarked privatization, of pace and efforts restructuring economic of nature and scope the reflect do Lithuania and Latvia in pursued policies educationspeaking,higher Broadly liberalizationpolicies. relativelyslow chosen has which Lithuania, neighboring the with comparison Latvia’s by highlighted further is underliningchangesmuchthe of higherthat education system witnessed.has Thelink been has restructuring economic Latvia’s driving philosophy market-liberal same the that shown has investigationundertaken The pursued. policies of nature the and inhigher education policiesdoes suggest a clear link betweengoverning party ideology continuationsuchbeen has there that However,fact the Latvia. in electioneveryheld dominated have groupings political right-leaning example, for independence, gaining Latvia’s party system is the relatively weak representation of left-leaning parties. Since salientmostfeatures thethegeneral, of of oneIn variance both factors.of on lack the changethegoverning in partybeliefs higherfor education policy outcomes, because of implications the graspoffully to enableus not doesLatvian UnlikeHungary,case the country. the in choices policy governmental the for power predicting strong a gains political ideology Hungary, in structured is spectrum party how consideration into Taking Hungary. party-dividein political the structure issues economic than more orientation thinking about higher education. As our examination has revealed, issues related to related issues revealed, has examination our As education. higher about thinking 280

CEU eTD Collection the nature of higher education policies. only is it qualified anddifficulteven to document, political partyall, ideology isfairly a good predictorin of All limited. somewhat be to proven has case country each in power explanatory its though nations, Baltic two the between differences overall the for accounts party ruling of disposition Ideological Hungary. in consistent most and strongest the been has two the betweencorrelation the change, political the from ensuing output policy education higher the in change remarkable the of illustration regimeearlytheyears conclusion,come of To change.to while Georgia offersvivid a the especially region,in overridingthe influence for of be provento has whichfactor, economic the with do to has section, previous the in discussed consideration,already beenindependencethesehave relationfromandOtherethnicwithRussia issues).and Georgia, and Lithuania Latvia, (in issues overriding more upon centered commonly is it marked, is level program the at diversity the when Even party region. the developed in systems most the of one has that Hungary to less applies This countries. many in parties political impressivemultiplicityof the despiteideology programsand political of level the at diversity little a be to remains there all, of First several. are FSU, the of those post-communistespeciallycountries, other to extended be can that Lithuania for disposition party political of powerexplanatory weak a for reasons The outcome electoral the of suggested no correlation light between the two variables. in output policy education higher the in changes the of scrutinyclose a programs;electionwhile their in or multipleissues, on divided otherwise parties, political among debates in role little played have education higher 281

CEU eTD Collection particular mode of interest intermediation that permits effective translation of their of translation effective permits that intermediation interest of mode particular the and organization formal and their formation, associations policy to interest have they of access strength privileged the with reside Lithuania and Hungary in thisstudyAs has shown, reasonsthe comparativeforthe success institutionalof forces governmental policy outcomes seems limited. on influence the exert to ability their Georgia, and Latvia in groups academic from supplementaryopportunitiesE and earnings. professors university public were many Georgia, more,foundersperceptible.firstamonglessprivate been Whattheis institutionsof in has growth sector private the to leadership sector public the from hailed opposition hand, other the on Latvia, and Georgia In countries. these in growth sector private the on constraints existing for factors main the of one as identified was education higher of provision the over monopoly preserving at aimed interests Institutional Lithuania. and Hungary in significant most be to proven professional has policies governmental of power the respects, these all With particular. in education higher provided privately towards attitude governmental and general activities,in cost-sharingteachingpolicies re-integrating system,and research educationhigher over control establishing unifiedinclude country each communityin academic of strength the crystallize to helped have that issues examined the Among education. higher towards stance governmental the of determinant potent another be intereststo exposedgroup has countrycases four comparative the examinationThe of 8.3.3 The Mode of Interest Intermediation partial interests into higher educational policy choices. In contrast, even when senior when even contrast, In choices. educationalpolicy higher into interests partial 282 ven when we see such resistancecomingsuch see we when ven ekn diinl employment additional seeking soitos fr influencing for associations

CEU eTD Collection But the question why private institutions were viewed as competitors for age cohorts age for competitors as viewed were institutions private why question the But other. the on education higher private towards governmental stance the and hand one the on countrygiven a intermediationinterest in of mode the associationsinterest and of strength the between link conjectured the with consistent is above said was What 1995 law, the Ministry of Education remained the principle actor. thepreparation of thefirst lawon education and althoughdid it takepart indrafting the implementedwithout their prior consent. By gets contrast, the Latvian Rectors’proposal Council played no role in policy no where and documents legal key all drafting in role crucialplayed Rector’sneighboringConference has the Lithuania,whereits to especiallywith,compared whenstart relatively been limitedto haveLatvia Councilin Rector’s the of powers the that here added be must It sector. private the of interests expression into education policies, implies that policy choices to some extent reflect the the is which Rector’s Council, the in representation equal Having region. the in unparalleled almost is representatives toohave accesstohigher education planning in Latviatothe extent that because is This intermediation. interest of mode the and strength their with do to also has Latvia in growth sector private of detriment the to influence their exercise to able been not has leadership institution public the why reason The developments. education higher of course the on influence countervailing wielding in succeeded has policy-making, to access broad a having also party, opposing an or interests vested their intermediationorganizedof for capacitynecessary the lacked either they because failed have attemptsgovernmental these policies,the on influence the exerting by interests institutional their defend to tried have Georgia in academics fromthe startin Hungaryand Lithuania, while the competitionbetween thetwo sectors anmain channel through which institutional interests find their find interests institutional which through channel 283 private institution private

CEU eTD Collection rvt nvriis oee n te floig to yas wr lo religious also religious were of evidence years ample with provided two has case Hungarian following The organizations. the in opened universities private four of out three of founders The Archdiocese.Vilnius of proposal the establishedat was recognition official gain to university private first A supply-side. the on groups religious of interests the but education, provided swayinggovernmentalpublicly in than towardspoliciesallowingotherrole decisive a Lithuanianthe unleashednotwas of shown it casehas thatstudent demand playedthat interestassociations in-depth as actingTheinfluencingexamination for policy.public groupsreligious to relates power group interest to respect with consideration final A education in much of the region. higher providersprivateof spectacular in increase a behindforces driving main the of demand, which could not be satisfied by the studentcommunist production, pent-up has constituted oneunleashed recall, To competition. of fears the reinforce to served certainly has change regime the of years first the during country the characterized the from Lithuania in noticeable highereducation demandon thatthe considerable in falla 1990s,but the beginning of only is decline Demographic start. the from for competition the madeobviously has 1980s the of beginning the since already challengedemographic t fact The resources. governmental scarce for also but cohorts student for only not compete sectors two Hungary’s the region, the of rest the from difference In competition.inter-sectoral fostering to contributed p of availability becamemoremanifest Latviaonlylaterin and Georgia remains.still Indisputably, the groups shaping non-state sector growth patterns in various ways. One is the influence the is One groupsshapingvariousnon-stateways.growth sectorpatterns in bi udn o o-tt ntttos i ugr a strongly has Hungary in institutions non-state for funding ublic u niversity age population more heightened and well-pronounced and heightened more population age niversity 284 a hat ugr a en fcn sharp a facing been has Hungary the Vilnius Saint Joseph Seminary,Joseph Saint Vilnius the

CEU eTD Collection provided higher education, and respectively the size and nature of the sector, in ethno- sector,in provided the highereducation, natureof respectively and and size the potentdeterminant a governmentalservedthe hand,has as of policiestoward privately behindprivatethe sector growth Hungaryin andLithuania. Ethnic factor,otherthe on forcesmoving main the of one been has factor religious the discussed, just was it As 8.3.4 Demographic, Ethno-Linguistic and Religious Factors the size and nature of the sector growth. respectively and education, higher private towards governmentalpolicies and groups, relationship between positive powertheinfluence and organized of interest associations, including religious strong a out bears investigation our conclusion, to come To character of the Hungary’s non-state higher education sector. indicationsheerlack of demandfor theologicalfor training highlight supply-driventhe nature ofthe privatesector. Indeed, overwhelming numberof religiousproviders anda Churchavailabilityinstitutionsandrelative the of size directlypolicies, shapes the but influencingthroughgovernmental itself manifest only not does patternsgrowth sector private the determining in play associations religious the role the However, cohorts. age shrinking already for competitors tangible as regarded are which institutions, (non-religious)private of detriment the to used been sometimes has policy public the influencing for possess groups religious the power the enough, Interestingly budget. owned andoperated institutions, which are almost exclusively financed fromthe public governmentalthe on bearsecuring policies bringto for subsidies theystateChurch for linguistically highly heterogeneous Latvia. The enactment of the Language Law that Law Language the of enactment The heterogeneousLatvia. highly linguistically 285

CEU eTD Collection o udrae raiainl gas ne aan das atnin t h overriding the significance of the economic to factor in shaping the private sector attention dynamics. draws again once goals, organizational undertaken to dividebetweenThecountriesotherthree Georgia respect the withoffer. and can state the what from different are that types education higher demand who minorities those where countries, developed in growth private the for account to thought are goals linguistic,oriented culturally ethnic, other hand, and religious other the On education. higher on demand the all meet the main factor in the private growth in developing countries, where government cannot be left-overpredictsto demandliterature extantthat the consistentwith is This grow. and survive to institutions private demand-absorbing for existed conditions suitable Georgia,where unsatisfied demand forhigher education haddriven theprivate growth, country’s the population. of heterogeneity religious and ethno-linguistic the reflect not does growth sector private of nature the Georgia, in only that shown has examination Our higher in education participating altogether. from language, official an speak not did who population, the of half almost preventing justify to hard been have would it for academia, from excludedminoritiescountries’ thus the of needs emerging the organizations, serve to sector the allowing educational private of establishment the permitted majority, the constituted barely populations native where Latvia, Thus, Latvia. in institutions privatelegalizing behind rationalesprinciple the of one as served has demand that of sizesheer the fact, In languageRussianinstruction. the for supply as well as demand abolished higher education provision in Russian at public universities created a sizeable eea esn xli hs aprn otaito. Frt o l, in all, of First contradiction. apparent this explain reasons Several niches are left for private institutions to serve to institutions private for left are niches 286

CEU eTD Collection the beginning of the 1990s. Therefore, beginning1990s.expectedthe the the of consequences demographicthe of sinceonly but varyingdegree a population of growth of rate the in fall experiencing a beenhave GeorgiaLatvia,Lithuania– and countries - three All demographic change. Anotherfactordiscussedbe to connectionin thegovernmental to policy influences a is private their counterparts. for available niches organizational restricted has which education, population,religiousthe and ethnicdiversity usuallyprivately of hallmark provided of cateringcompelledforfundinguniversities has publicstateundertake as such roles, to patterns sector private certain defies characteristic case elsewhere, explained thus,is economictheby Theseverefactor. dropin Georgian the That extent. certain a the or universities instructionethnicminority in public languages obviatesprivate theirneedforthe provision to at studies theological of availability wide a However, religion. and state the between separation clear of absence the reflects and atheism communist against reaction a as seen be can sector public the at offered commonly religious, normally associated with the private sector. The fact that religious studies are and ethnic is that diversification, internal of kind a undertaking sector public the by possible.Finally, the mission private hardly institutions pursue in Georgia institutions have further been constrained Christian Orthodox than other of existence the made havetransformation,which the of phase first the during politicsGeorgia’s underlying policies,exclusivist-nationalistic excessive the by restricted been has sector private privatethat institutions environmentalhaveseen,wethe provide.As can the nichefor pluralismlimiting in ideology state the by played role the to relatesofideology political impact the with dealing section the in discussed already explanation further A declineon thehigher education enrollment rates becomes considerable mostly from the 287

CEU eTD Collection between the two types of non-statediscriminate institutions too greatly.not would policies funding governmental the thing, one For budget. long-existence the religiouswithinstitutions, of do historicallypublic the fundedfrom to has also perhapsregion, entire the unparalleledin is Hungary,which institutionsin t However, preceding section. the in discussed was policy governmental the on bear to bring owners religiousinstitutionstheirinfluence that and The Hungary. is verified has factors two the between link the where country examined only the unexpectedly, Not countries. selected the governmentalfavorablydisposedin policies for contributingfactor a was influence and size sector’s private the whether consider to off set nevertheless study The region. the in existence sector private of history short a of because high be to andinfluence theprivate of sector. The relative weight this of viable was notexpected finalA point tonote in connectiontogovernmental policy determinantsthe is very size inter-sectoral and intra made competition more strongly felt from has the start. which decline, demographic the with resides Hungary in observedleadership university public the by pursued strategies protective highly for explanation of part a doubt, Without 1980s. the of beginning the from enrollmentsHungary,in whichsharpbeenfacingdemographic has a challenge already education higher on tall its taking been already has population age university of rate reaches 1990 university age, which after is beyond the timeline set for thisborn study. A significant droppopulation in the the of part the when 2006/07, year academic he availability of the state funding for private (non-religious) private for funding state the of availability he 288

CEU eTD Collection communist developments largely echo processes taking place globally. post- the as beyond, also but levels, academic and policy the at organizations both of characterizedregionthe is that relative comparativea bylack of analysis newformsof way that would otherwise be hard to grasp. The findings are of significance not only to thesepolicies inturn shape thescope and nature ofprivately provided education, inthe levels, national how educationdeterminesand highertowardspoliciespermitted graspingpublicwhat and education higher the at both variables multiple on matching countries the of comparativeanalysis developments,the these of pace and magnitude the given However, literature. extant the by made predictions the with consistent from the in-depth examination of the carefully selected country cases are fundamentally resultsobtainededucationalThe of formsorganizations,new other.increase in the on growthgovernmental in facilitatepolicyand choices,the intendedhand to one the patterns on sector private in diversity such of causes the study to opportunity unique highlydisproportional countriescomparableacrossthe of legaciesan withprovided us been has growthprivate the of nature and scope the that Given nations. FSU the and CEE in been has it as countries, many so involving and time concentratedin as be to process this witness we region other no However,in increasing phenomenon. rapidly and global a is - massificationprocess the of aspect crucial a – institutionseducation revolutionarycreationprivateevolutionalgrowthratherThehigherthan andof terms. internationallythat arerelated higherto education massification have been described in The powerful and all-encompassing changes taking place within higher education fields Remarks Concluding 8.4 h te ht ti oprtv netkn a mhszd rpael strongly repeatedly emphasized has undertaking comparative this that other the clearA divide between Georgia on theone handand Hungary, Latviaand Lithuaniaon 289

CEU eTD Collection of 2003) have chosen market-liberal approach, while those in Hungary and Lithuania and Hungary in those while market-liberalapproach, chosen have 2003) of highereducation, seeinggovernmentsthe that LatviaGeorgiainand changes(afterthe private towards mode policy governmental the on match but variables background Georgiaand Latvia onthe other. The two pairs ofthe countries areless comparable on and hand one the on Lithuania and Hungary of comparison the by enhanced further is policy public determines what understandingof Our level. education higher the at ethno-linguisticand religiousand heterogeneitypopulation expression the their find of detectdifferenceshow us ruling partyideology,in interestmodethe of intermediation, approach governmental towards privately the provided education. The comparison of as the two Baltic States enabled well as development, sector private the of picture remarkable significantcountriesbearis two the thatpresentIt parallels. mostunlikely also afterwards followed countries the that paths transformation political-economic the and communism from exit Their republics. Soviet all among cases comparable offeredby theBaltic neighbors. In numerous respects, Latvia and Lithuaniawere more governmentalis shapepolicies forces national how illuminatingof examplemost The have produced. approaches contrasting these that growth sector private widely of and patters divergent institutions private accommodating at aimed policies in governmental variation observed an for account cannot alone factor economic the However, governmentalapproach. the in differencesmanifestunderstanding empirically in help furthercomparable moreof sectors in Hungary,be Lithuaniaproven to andLatvia has education higher to available finance public of level The education. higher towards stance governmental determining in factor economic the of ascendancy the suggests have taken more regulatory policy stance towards the private growth. 290

CEU eTD Collection provide is a necessary precondition. can alone government no that choice the with students providing higher in and for education demand social increasing meeting in play can institutions private that choice with less financial involvement of governments. For this, recognition of the role viable with students provide and function their fulfill to institutions private of ability the enhances only regulation, excessive the from abstains yet education, of quality the insures that supportive, and evenhanded is that approach governmental the that highlightsexample Latvian The shares. enrollment private the in decline significant in sectordynamics characteristic ofLatvia challengesthose found not onlyGeorgia in but fromtheoutset. Capturing almost one-third totalthestudent of enrollments, privatethe setcertaindegreewere Latvia,whereacademica standards in steadyof but slow been sectorprivatization. In stark contrast to this, the increaseinthe private enrollments haspublic vigorous the by posed competition the survive not could which Georgia, in importanceand qualitydubious institutionsprivateof expansionof rapid and easy the A Latvia. Georgiaand in sectors private of comparison the from emerging points the are instructive most However, managementand impedes organizational growth andlimitssector’sthe distinctiveness. servicesthe provided,quality of extensive involvementstate private sectorplanning in Hungarian casesonce again verify that, although governmentaland regulation Lithuanian insures some The well. as policy-makers but researchers for just not interest of privateequallyenrollmentthe important patternsto yield in rise results,bewhich may the and stance policy governmental between relationship the of analysis close The many other countries,manyother wherereactive governmental regulatory resultedactionhasin s we have seen, the governmental neglect has led to governmental led the neglecthas seen, have we s 291

CEU eTD Collection

292 CEU eTD Collection Uzbekistan Turkmenistan Tajikistan Kyrgyzstan Kazakhstan Georgia Azerbaijan Armenia Ukraine Russia Moldova Belarus Lithuania Latvia Estonia Romania Bulgaria Albania Yugoslavia Macedonia Croatia Slovenia Hungary Poland Slovakia Rep.Czech Centre, 2001Centre, Source: Post-communist in population) 19-24 of Countries percent rates, (gross Enrollments Education Higher Table: Appendix 1:

A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research UNICEF CEE/CES/Baltics, MONEE Project, Transition: the of A Decade 15.0 10.2 11.5 13.2 18.1 19.1 11.9 19.3 22.3 24.8 16.2 22.9 27.8 20.5 36.1 7.2 22.0 6.9 22.2 19.3 17.4 23.1 12.2 16.0 13.4 16.6 1989 15.2 9.9 11.9 12.9 18.7 21.7 12.6 20.1 21.7 24.6 15.7 23.0 26.5 20.5 34.4 9.2 26.2 7.8 20.6 17.6 18.1 22.9 12.1 17.0 14.3 17.2 1990 13.4 8.6 11.6 11.5 17.7 23.8 13.1 19.5 21.1 23.9 14.9 22.5 22.8 20.8 32.2 11,3 25.7 8.8 17.6 16.0 18.1 25.5 12.3 17.1 14.1 16.0 1991 13.4 8.6 11.6 11.5 17.7 26.2 12.3 16.9 20.1 22.5 13.2 22.7 21.3 19.1 29.1 12.8 27.0 11.0 18.7 16.2 20.1 26.1 12.9 18.6 14.6 16.6 1992 Appendices 13.5 28.1 10.2 18.4 15.7 21.2 18.2 14.1 21.2 15.4 17.5 1993 11.3 8.1 11.2 10.7 16.9 19.4 12.0 13.5 19.2 21.8 12.7 21.8 20.7 17.9 28.2 293 13.5 30.3 9.7 18.4 16.3 21.2 30.1 15.8 24.0 17.1 18.6 1994 9.4 7.8 11.9 11.2 16.9 28.6 11.5 16.6 20.3 21.6 12.9 21.9 21.1 18.3 28.9 17.5 33.7 10.2 20.2 17.1 22.2 31.3 18.0 27.2 18.3 19.8 1995 7.6 6.4 11.8 12.9 16.6 26.1 12.7 15.2 20.8 22.4 13.7 22.7 22.8 21.6 31.7 18.6 34.9 11.5 21.6 17.0 23.5 34.4 19.7 30.8 19.5 21.1 1996 6.6 5.7 12.1 15.3 16.2 27.0 13.3 15.0 22.2 23.5 14.2 23.9 25.9 31.1 34.9 19.1 34.1 11.8 23.6 17.5 24.2 44.0 25.2 34.8 20.3 22.1 1997 6.1 5.0 11.9 19.0 18.7 26.2 12.8 15.3 25.5 25.6 18.3 25.6 30.5 35.9 38.3 21.3 35.2 12.5 23.6 17.0 25.1 51.0 27.5 39.2 21.5 23.7 1998 6.0 4.4 11.3 24.8 20.4 26.0 13.4 16.0 28.0 28.0 19.9 28.4 34.4 42.0 42.5 23.4 34.7 12.7 27.1 19.7 26.1 --- 28.9 42.8 22.5 26.0 1999 6.2 3.9 11.5 29.8 23.3 29.0 14.5 16.0 29.7 31.4 20.8 30.0 39.2 46.5 45.5

CEU eTD Collection Non-state Colleges: Non-State Universities folderID=181&articleID=4265&ctag=articlelist&iid=1 http://www.okm.gov.hu/main.php? Source: Non-State Higher Education Institutions in Hungary Appendix 2 23. 22. 21. 20. 19. 18. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 7. 6. 5. 4. 3. 2. 1. 26. 25. 24. Sárospatak Theological Academy of the Reformed Church Sapientia Shool of Theology, Budapest Pentecostal Theological Colleget, Budapest Pápa Theological Academy of the Reformed Church Motor the Disabled andfor Conductor-Teacher Education Training College,Conductive Budapest of Institute András Peto" International College of Modern Business Studies, Tatabánya Kölcsey Ferenc Reformed Teacher Training College, Debrecen Kodolányi János University College, Székesfehérvár International Business School, Budapest Heller Farkas College of Economics and Tourism, Budapest Harsányi János College, Budapest Theological College of Gyo"r Theological College of Szeged Gábor Dénes College, Budapest Theological College of Esztergom Theological College of Eger Budapest School of Communication Bhaktivedanta College Budapest Baptist Theological Seminary, Budapest Apor Vilmos Catholic College, Vác Budapest College of Management Adventist Theological College, Pécel "The Gate of the Teaching" Buddhist College, Budapest Pázmány Péter Catholic University, Budapest Jewish Theological Seminary - University of Jewish Studies, Budapest Central European University, Budapest Károli Gáspár University of the Reformed Church, Budapest Evangelical-Lutheran Theological University, Budapest Debrecen University of Reformed Theology Andrássy Gyula University, Budapest Szent Bernát Theological College, Zirc Szent Atanáz Greek Catholic Theological Institute, Nyíregyháza Sola Scriptura College of Theology, Budapest Ministry of Education and Culture at : 294

CEU eTD Collection Budapest Institute for Policy Analysis) at Office of the Prime Minister, Hungary; currently As well as multiple discussions with Balázs Váradi (previously CEU and senior adviser Eva Berede (Department of Macroeconomics, Corvinus University of Budapest). Council for the MoE). Laszlo Frenyo (Chair of the Strategic Committee of Higher Education and Research Janos Setenyi (Expanzio Consulting Ltd. Management Consulting Industry). SzDSz) Gereby Gyorgy (previously the Ministry of Education and Culture, currently CEU, and Hungarian Academy of Science) Andras Semjen (previously the World Bank, currently Godollo). Secretary, Vice-President of the EURASHE and University of Agricultural Sciences Laszlo Dinya (previously Hungarian Rector’s Conference; currently, Deputy State Andras Rona-Tas List of Interviewees in Hungary: Appendix 3: 32. 31. 30. 29. 28. 27. King Sigismund College, Budapest John Wesley Theological College, Budapest Business College, Budapest Archiepiscopal Theological College of Veszprém Tomori Pál College, Kalocsa Szent Pál Academy, Budapest (Higher Education Council) 295 Eötvös Loránd University Institute of Economics and the and

CEU eTD Collection Georgia Hungary Lithuania Latvia Centre, 2001. Centre, Source: Countries theSelected in Increase Population of Rate Natural Table: Appendix 5: Language groups: (2001 census) Catholic 2.6%, other Christian 1%, other or unspecified 11.1%, unaffiliated 14.5% Religious groups: Ethnic groups: Source: Ethno-linguistic and Religious Groups in Hungary Appendix 4: A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A CIA World Factbook. 9.1 0.3 4.7 1.3 1980 Hungarian 92.3%, Roma 1.9%, other or unknown 5.8% 8.1 -2.0 4.8 2.4 1989 Roman Catholic 51.9%, Calvinist 15.9%, Lutheran 3%, Greek Hungarian 93.6%, other or unspecified 6.4% (2001 census) 8.7 -1.9 4.6 1.2 1990 7.9 -1.7 4.1 0.0 1991

Retrieved March 2009 4.8 2.6 3.3 -1.5 1992 296 - -3.2 0.4 -4.8 1993 2.9 -3.0 -1.1 -6.9 1994 3.4 -3.3 -1.1 -6.9 1995 3.6 -3.7 -1.0 -5.8 1996 2.7 -3.8 -0.9 -6.0 1997 1.4 -4.3 -1.0 -6.4 1998

0.1 -4.8 -1.0 -5.5 1999

CEU eTD Collection Years Licensed in 2005 and 2006 Universities Equate with Accredited Institutions for Five Private Institutions Accredited with Condition for 2007/08 Private Institutions Accredited in 2006 Source: Private Higher Education Institutions in Georgia Appendix 6: Non-Accredited Higher Education Institutions since 2007-2008 7. 6. 5. 4. 3. 2. 1. 4. 3. 2. 1. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 1. University of Law and Economics LTD Georgian-American University LTD Stomatological University LTD Branch of American Humanitarian University in Georgia (Hawaii Branch) LTD Caucasian University LTD University of Social Sciences LTD Tbilisi Aviation University LTD University of Customs–Taxation LTD Batumi Institute of Free-Lance and Science LTD Pharmaceutical Institute “INTERPHARMI +” LTD The Sukhumi Akaki Chkhartishvili Economic-Humanitarian University LTD The Kutaisi University of Law and Economics LTD Tbilisi University LTD Zugdidi Independent University LTD SDASU – Georgian Davit Agmashenebeli University LTD Georgian-British Institute of International Law and Management LTD Georgian-French Joint Higher Educational Institution - ESM LTD Tbilisi National University “METEKHI” LTD Higher Medical School “AIETI” LTD Tbilisi Institute of Asia and Africa LTD Tbilisi Medical Institute “HYPOCRATE” LTD Tbilisi Petre Shotadze Medical Academy LTD International Black Sea University LTD Grigol Robaqidze University LTD Tbilisi D. Agmashenebeli University LTD National Institute “RVALI” LTD Kutaisi Medical Institute “KUTAISI” LTD Gori Divers-Profile Less Academy LTD European University LTD

http://www.enic-naric.net/documents/Georgia-hei-2006.pdf 297

CEU eTD Collection Giorgi Margvelashvili – The Rector of the Georgian Institute of Public Affairs (GIPA); Irakli Machabeli – The Ministry of Education; Vasil Maglapheridze – MP, head of the Parliamentary Education Committee; Iago Kachkachishvili – Head of the Sociology Department at TSU; Philosophy, Theology, Culture and History; Arnold Hoch – Executive Director of the Sulkhan-Saba Orbeliani Institute of Bela Gomelauri- Local expert, professor at the Pedagogical Institute; Lika Glonti – TSU professor and local expert; Marine Chitashvili – TSU professor, the Orthodox Academy, OSGF, local expert; List of Interviewees in Georgia: Appendix 7: Archil Samadashvili – The Georgian Technical University, local expert; Roin Metreveli – Then the Rector of the Tbilisi State University (TSU); 18. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. Rustavi Shota Rustaveli Secular University LTD Ozurgeti Educational Institute of Natural Resources Utilization LTD - Akhaltsikhe I. Chavchavadze International University "Tsodna" LTD Georgian International Scientific-Cultural Educational Union "Society Tsodna" Rustavi Independent Institute LTD University "Sakartvelo" LTD "Marji" Zhiuli Shartava Tbilisi Humanitarian-Economic Institute LTD Georgian Motor-Road Institute LTD Shida Kartli Secular University LTD Georgian Medical Institute “DASTAKARI” LTD Scientific-Educational Institute of Labor and Production Organization LTD Kutaisi Ioane Petritsi University LTD Batumi Independent University LTD Georgian Aleksandre Kuchukhidze Humanitarian-Economic University LTD Fruit and Vegetable Growing Technologies LTD Winemaking, Tbilisi Educational Institute of Further Training of Specialists of Agriculture, Secular Institute "ORIENTIRI" LTD Tbilisi Pedagogical Two-Stage Institute of Musical Art LTD 298

CEU eTD Collection note: Languages: Catholic 0.8%, other 0.8%, none 0.7% (2002 census) Religions: 2.5% Ethnic Groups: Source: Ethno-linguistic and Religious Groups in Georgia Appendix 8: at TSU). KMARA (enough) activist (currently MP), Irina Kurdadze (former MP and professor (the Minister of Education 2003-2008), Akaki Minashvili – TSU student union, Informally: Sandro Didebulidze (the Dep. Minister of Education), Alexander Lomaia Giorgi Zviadadze (Father Giorgi) – Vice-Rector of the Orthodox Academy; Guram Tevzadze – The Academy of Science and TSU; Gigi Tevzadze – The Rector of the Chavchavadze University; Management and Study. Giorgi Sharvashidze – President of International Institute for Education Policy, Abkhaz is the official language in Abkhazia CIA World Factbook. Retrieved April 2009 Orthodox Christian 83.9%, Muslim 9.9%, Armenian-Gregorian 3.9%, Georgian 71% (official), Russian 9%, Armenian 7%, Azeri 6%, other 7%

Georgian 83.8%, Azeri 6.5%, Armenian 5.7%, Russian 1.5%, other 299

CEU eTD Collection Georgia Hungary Lithuania Latvia 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1990 1989 Centre. Centre. Source: Countries theSelected in Annual GDP(percent) Change in B: Table Countries theSelected in onEducation Public Expenditure Table: Selected Countries in (constant 2000USD) the capita GDPper A: Table Appendix 9: A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A 3,302 3,024 2,904 2,727 2,477 2,364 3,901 4,217 Latvia 5,023 4,533 4,154 3,854 3,588 -4.8 0.7 1.5 6.8 1989 4 -12. -3.5 -5.0 2.9 1990 4,838 4,481 4,166 3,754 3,505 3,275 3,124 3,156 2,921 2,711 2,571 4,354 - Lithuania 6 -20. 9 -11. -5.7 4 -10. 1991 5,691 5,454 5,200 5,015 4,817 4,606 4,334 4,150 3,948 3,768 3,713 4,166 4,307 Hungary 8 -44. -3.1 3 -21. 9 -34. 1992 4 -25. -0.6 2 -16. 9 -14. 1993 971 880 823 733 687 648 629 604 579 517 459 1,493 1,749 Georgia 300 4 -11. 2.9 -9.8 0.6 1994 2.4 1.5 3.3 -0.8 1995

(percent of GDP)(percent 10.5 1.3 4.7 3.3 1996 10.8 4.6 7.3 8.6 1997 2.9 4.5 5.1 3.9 1998 3.0 4.9 -4.2 0.1 1999 3.0 6.0 2.2 4.5 2000

CEU eTD Collection Georgia Hungary Lithuania Latvia Georgia Hungary Lithuania Latvia Centre, 2001 based on EBRD (2000), 1999 estimate, 2000projection (2000), onEBRD 1999estimate, 2001based Centre, Source: Selected the in prices) consumer Countries in change percent average (annual Rate Inflation Annual D: Table Centre. Source: GDPGrowth C: Real Table A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A a Based on EBRD (2000), 1999 estimate, 2000projection (2000), onEBRD 1999estimate, Based 1989 4.2 28.9 8.4 10.5 1990 0 100. 0 100. 0 100. 0 100. 70.0 35.0 7 224. 0 172. 1991 87.6 96.5 95.0 9 102. 1990 887.4 23.0 5 1,020. 951.2 1992 a 1991 69.9 85.0 89.6 92.2 in the Selected Countries theSelected in 38.4 82.4 70.5 60.0 1992 4 3,125. 22.5 410.4 109.2 1993 28.6 81.9 59.1 51.1 1993 5 15,606. 18.8 72.1 35.9 1994 301 25.4 84.3 53.3 51.5 1994 26.0 85.5 55.1 51.0 1995 7 162. 28.2 39.6 25.0 1995 28.7 86.6 57.6 52.7 1996 39.4 23.6 24.6 17.6 1996 31.8 90.6 61.8 57.3 1997 7.1 18.3 8.9 8.4 1997 32.7 95.1 65.0 59.5 1998 3.6 14.3 5.1 4.7 1998 33.7 99.3 62.3 59.6 1999 19.3 10.1 0.8 2.4 1999 34.7 105.3 63.6 62.2 2000 4.4 9.5 1.0 2.9 2000

CEU eTD Collection Georgia Hungary Lithuania Latvia Private Higher Education Institutions: en/list.php Source: Private Higher Education Institutions Operating by 2008/09 in Latvia Appendix 11: and Jackunas. onMokeine, Klepacieme 2001based Centre, Source: Selected Countries in onEducation Public Expenditure Table: Appendix 10: Private Colleges: 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. A Decade of Transition: the MONEE Project, CEE/CES/Baltics, UNICEF Innocenti Research Innocenti UNICEF CEE/CES/Baltics, Project, MONEE the Transition: of Decade A the Christian Academy of the Latvian Evangelical Lutheran Church Institute of Transport and Telecommunications International Higher School of Practical Psychology Higher School of Social Technologies Higher School of Social Work and Social Pedagogics "Attistiba" School of Business Administration Turiba, Ltd Riga Institute of Aero-navigation Latvian Evangelic Lutheran Christian Academy Latvian Christian Academy Information Systems Management Institute Business Institute "RIMPAK Livonia" Baltic International Academy Higher Education Quality Evaluation Centre (NEQEC), at http://www.aiknc.lv/ Higher School of Economic and Culture Riga International School of Economics and Business Administration --- 5.7 --- 5.8 1989 6.1 5.8 4.5 4.8 1990 6.4 6.3 --- 4.2 1991 4.0 6.6 --- 4.6 1992

0.6 6.5 4.6 6.1 1993 302 0.5 6.4 5.6 6.1 1994

0.9 5.5 5.6 6.9 1995 (percent of GDP)(percent of 1.2 4.9 5.4 5.5 1996 1.3 4.3 5.8 5.8 1997 2.2 4.8 6.4 6.5 1998 --- 5.1 6.5 7.2 1999

CEU eTD Collection Janis Vaivads – the Minister of Education in 1993-95; Andrejs Rauhvangers – Secretary General of Latvian Rector’s Council; Janis Stonis – Director of Administration of University of Latvia; Anatolijs Malnis – Deputy Director of the Department of HE at MoES; Ivars Knets – Rector of the Riga Technical University; Dace Jonsone – Head of Political Science Department at Vidzemen University; Vladimir Gurov - Professor at Baltic Russian Institute; Providus; FoundationandSoros EducationDevelopmentat Centre of Director – Freimane Irena J. Elkmanis – President of the Latvian Academy of Sciences; and HE of Department the of head Formerly, Research, created inHEQEC. the Ministry of ED in 1992-1993;of Head – Dzelme Juris Janis Cakste – Director of the Department of HE at MoES; Dainuvite Bluma – professor at the University of Latvia; Aldis Baumanis – Deputy Chair of the School of Business Administration “Turiba”; List of Interviewees in Latvia: Appendix 12: 8. 7. 6. 5. 4. 3. 2. 1. Cosmetology College SIA "Karjeras izaugsmes koledža" Business Administration College Latvian Business College Kristīgās vadības koledža Laws College College of Accounting and Finance Alberta College

(not translated) 303 (not translated)

CEU eTD Collection Private Colleges Private Universities http://www.smm.lt/en/smt/institutions.htm Source: Private Higher Educational Institutions Operating by 2006/07 in Lithuania Appendix 14: census) Languages: unspecified 63.7% (2006) Religions: Polish 2.5%, Lithuanian 1.4%, other 2% (2002) Groups: Ethnic Source: Ethno-linguistic and Religious Groups in Latvia Appendix 1 9. 8. 7. 6. 5. 4. 3. 2. 1. 7. 6. 5. 4. 3. 2. 1. 12. 11. 10. Vilnius Business College, Public Institution Vilnius Law and Business College, Public Institution West Lithuania Business College, Public Institution North Lithuania College, Public Institution College of Management, Law and Languages of Siauliai Region Kopling College, Public Institution Klaipeda Business College, Public Institution College of Social Sciences, Public Institution V. A. Graiciunas Management School Vilnius St. Joseph's Seminary Lithuanian Christian College ( International Business School at Vilnius University, Public Institution European Humanities University, Public Institution Bussines Law Academy of Vilnius, Public Institution Bishop Vincentas Borisevicius Seminary of Telsai ISM University of Management and Economics, JSC Vilnius Management School, Public Institution Vilnius Co-operative College, Public Institution Vilnius Design College, Public Institution Ministry of Education and Science at CIA World Factbook. Retrieved November 2009 uhrn 1.% rhdx 1.% te hita % te 0.4%, other 1%, Christian other 15.3%, Orthodox 19.6%, Lutheran Latvian (official) 58.2%, Russian37.5%, Lithuanian andother 4.3% (2000 3: Latvian 57.7%, Russian 29.6%, Belarusian 4.1%, Ukrainian 2.7%, Ukrainian 4.1%, Belarusian 29.6%, Russian 57.7%, Latvian LCC) International University 304

CEU eTD Collection Vilnius University; Raimonda Markeviciene – Head of International Programmes and Relations Office at Danguole Kizniene – Independent Expert, British Council; Christian College ( Ligija Kaminskiene – Formerly professor and one of the founders of Lithuanian and President of the Lithuanian Rectors Conference in 1996-2003; Juozas Antanavicius - Vice-rector Alfonsas Daniūnas Albertas Zalys – Director of Department of Science and Higher Education at MoES; Edgaras Leichteris – Deputy Director of Knowledge Economy Forum; Economics; Afredas Chmieliauskas – Vice Dean of ISM University of Management and Aurelija Valeikine – Deputy Director if Centre for Quality Assessment in HE; Saulius Vengris – Secretary of the MoES; Rimantas Zelvys - Vilnius Pedagogic University. HE expert; List of Interviewees in Lithuania: Appendix 15: - Vice Rector of Vilnius Technical University; LCC) International University

of the Lithuanian Academy of Music and Theatre 305 , HE expert;

CEU eTD Collection 4.4% (2001 census) Languages: 9.5% (2001 census) Lutheran and Evangelical Christian Baptist) 1.9%, other or unspecified 5.5%, none Religions: 3.6% (2001 census) Ethnic Groups Ethno-linguistic and Religious Groups in Lithuania Appendix 16: Roman Catholic 79%, Russian Orthodox 4.1%, Protestant (including Lithuanian (official) 82%, Russian 8%, Polish 5.6%, other and unspecified : Lithuanian 83.4%, Polish 6.7%, Russian 6.3%, other or unspecified 306

CEU eTD Collection avs ee. 19. “oenetl Rfrs i ugra ihr Euain Education: higher Hungarian in Reforms “Governmental 1995. Peter. Darvas, Varga.2003.“Hungary”Csepes,ZsoltOrsolya, Kaiserand Frans Country Report: Latvia. 2007. in Country Report: Latvia. 2003. in In Country Report: Transformation.” Georgia. 2003. in Economic of Politics “The 1998. George. Blazyca, 2007. Gönczi. Eva and Edina Berlinger, Vanyolos. Istvan and Eva Berde, Belarus.” in Education Higher Change: of Dilemmas “The 2000. L. James Bess, Costs. Weight Dead and Groups Pressure Policies, Public 1985. S. Gary Becker, Baumanis,Aldis.2005. Care. Medical and Uncertainty 1963. J. Kenneth Arrow, Education.”In Higher Private “Comparative Perspectiveon 1999. G. Philip Altbach, Twente. Slovenia, ReflectionsCzechRepublic,HigherEducationthe Hungary,on in Poland and http://www.freedomhouse.org/template.cfm?page=47&nit=427&year=2007 http://www.freedomhouse.org/template.cfm?page=47&nit=230&year=2003. http://www.freedomhouse.org/template.cfm?page=17&year=2003 Judy Batt and Paull G.Lewis. London: Macmillan Press. 2, Politics European Easter and Central Developmentsin http://www.fhe.fm-kp.si/Files/pdf/FHE-S3(2)-Berlinger.pdf Study of 297-317. 1989. after Education Higher Hungarian International Higher Education Journal Public Economics in the Transition Economy Review G. Altbach. Westport: Greenwood Press. 21 the in EducationHigher Prometheus: PrivatePrivate Sabloff. New York: Garland Publishing. Perspectives,International Education: In Actors.” New and Traditions Historical 53: 941-973. Hungary d o ie ad Lo Geeeue. Eshd: Uiest f of University Enschede: Goedegeburee. Leo and File Jon ed. The TendenciesThe Regularitiesand Private in Higher Education .

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