THE DYNAMICS OF UNIVERSITY BEHAVIOUR IN CHILE
January 2009
Jorge Katz Intelis, Department of Economics University of Chile
Carmen Contreras Intelis, Department of Economics University of Chile
INDEX
1. INTRODUCTION...... 3 2. ALTERNATIVE THEORIES OF UNIVERSITY BEHAVIOUR...... 7 2.1. The neoclassical approach to the study of university behaviour...... 7 2.2. Other ways of approaching the study of university behaviour...... 8 3. THE DYNAMICS OF CHILEAN UNIVERSITY MARKETS...... 9 3.1. Market de-regulation, demand-side subsidies and the expansion of supply and demand for university services...... 9 3.2. Accreditation status of Chilean universities ...... 18 3.3. The financial model underlying the functioning of Chilean universities ...... 21 4.1. Source of funds ...... 23 4.2. Universities as service providing organizations ...... 30 4.3.Further statistical evidence concerning differences in structure and behaviour across CRUCH universities ...... 32 4.4. A further look at research-oriented CRUCH universities...... 40 4.5. A final overview: two dominant players and a fringe of (increasingly sophisticated) smaller competitors, fighting for market share...... 43 4.CRUCH UNIVERSITIES ON A COMPARATIVE PERSPECTIVE...... 23 5.ALTERNATIVE PATTERNS OF UNIVERSITY BEHAVIOUR...... 45 6. CASE STUDIES...... 49 6.1. THE UNIVERSITY OF TALCA...... 49 6.2. THE CATHOLIC UNIVERSITY OF VALPARAISO ...... 55 7. WRAPPING UP...... 57 Apendix 1 ...... 60 Apendix 2 ...... 64 Apendix 3 ...... 66 BIBLIOGRAPHY...... 68
2 THE DYNAMICS OF UNIVERSITY BEHAVIOUR1
1. INTRODUCTION
Universities are complex social organizations whose long term structure, strategy and ´core´ capabilities are determined both by ´mission´ and resource availability. They employ highly qualified workers – professors, laboratory technicians, graduate students – and physical capital - buildings and laboratories, pilot plants, prototypes, reactors and so forth – in the production of : 1. teaching services, 2. new scientific and technological knowledge and, 3.a vast array of goods and services, both for private as well as for collective consumption, in fields such as health care, culture, environmental protection, urban development, energy production, water and land utilization, climate, desertification and more. Not all universities engage in the production of all three of the above mentioned categories of goods and services, nor do they exhibit close similarities as far as ´mission´ and ´core capabilities´ is concerned. They come in all sizes and styles of organization: private and public, non profit and profit oriented, involved in teaching exclusively, or engaged both in teaching, research and in the production of public goods, ´generic´ and discipline-specific, licensed, (and subject to different forms of accreditation routines), or un-licensed (and scarcely monitored at all by educational authorities), and so forth. Such variance in the ´nature´ of the firm suggests that large differences in university behaviour are a priori to be expected.
Universities are normally organized in Faculties imparting undergraduate and graduate teaching in different scientific and technological disciplines, i.e. the social sciences, engineering, medicine, physical sciences and so forth. Faculties then subdivide in Departments and these in Institutes, Centres and laboratories. Professors – of different levels of seniority – are normally attached to Departments for which they impart undergraduate teaching. Besides being affiliated to specific Faculties and Departments for teaching purposes, professors frequently also undertake research activities in institutes and labs. Some of them also perform administrative and managerial tasks, acting as Directors of Departments and members of academic boards, managing the day-to-day functioning of their academic units.
Technicians and graduate students normally work at the institute or lab level, but it is not uncommon for some of them to teach undergraduate students under Departmental responsibility. Department and Institutes also employ clerical and administrative personnel, accountants, lawyers, and others.
Some individuals – professors, administrators - work on a full time basis, others do it part time, combining their appointment at the university with other external activities, as private consultants to business firms, government advisors, and so forth. As a result of the above it is somewhat difficult accurately to assess how individuals allocate their time, especially so in relation as to how they divide their daily activities in teaching time, research and development time and administration and consultancy. Reliable data is hard to obtain. Contracts between professors and universities are normally specified in a rather vague language. They involve a complex principal-agent relationship in which
1 C.Contreras and Jorge Katz, Intelis, Department of Economics, University of Chile . The authors would like to acknowledge many hours of highly illuminating intellectual exchanges with Prof.Carlos Caceres from the University of Chile. Also, very valuable comments from Gustavo Crespi to an initial draft of the monograph. None of the above mentioned organizations or individuals are to be held responsible for the ideas or opinions hereby advanced. 3 questions of mutual obligation are treated in a very opaque way. Particularly difficult are issues related to quality aspects of teaching or research, where criteria for judgement and monitoring are specially frail.
Professors and graduate students use simple pieces of equipment and infrastructure for teaching purposes – classrooms, computers, and the like - and more sophisticated ones, such as pilot plants, prototypes, reactors, and a variety of complex experimental machines, in their search for new knowledge in the scientific and technological frontiers of different disciplines. These exploratory activities are carried out in Institutes, research centres and Labs. It is not unusual, however, for these centres or labs also to provide technical services to private firms in areas such as quality control, metrology, raw material testing and so forth. These services often constitute an important source of revenue both for the centre as well as for the university at large, as the later normally charges an overhead for the use of its name, prestige and R&D facilities.
Some of the services offered by Centres and research labs to firms involve routine testing activities which do not demand new knowledge generation. Others, on the contrary, could be more complex, demanding ad hoc incremental knowledge generation, the use of pilot plants and experimental equipment. The border line between routine and non routine activities is often blurred and some efforts which should probably be measured as R&D activities following standard international definitions are not frequently accounted as such. This probably induces a country-wide underestimation of R&D expenditure.
Faculty members divide their teaching time between undergraduate and graduate teaching. Professors (and graduate students) show typical work days of nearly ten to eleven hours, including weekends, which makes for a rather long work week of around 55 to 57 hours. Available data for the US indicates that ¨an average academic work day entails 4.2 hours spent on instruction, 3.2 hours on research and a balance of 2.5 hours spent on miscellaneous activities¨ (L. Leslie et.al. 2000).
Received literature shows that departmental returns to teaching tend to exceed returns to research activities (D´Sylva, 1998), and that the difference between them tends to be larger for the social and the physical sciences vis a vis the life sciences. Thus, departments could increase their revenue by doing more teaching than research. The extent to which this is so seems to vary across disciplines.
The above introductory paragraphs serve to identify some of the complex issues demanding examination if we are to understand how universities, departments and individuals behave in the world of teaching and research. How much time and effort they allocate to different activities. How can Departments and Centres monitor the use of time of individual professors? Both Departments and individuals might be motivated by ´mission´ but also by income, prestige or academic recognition, i.e. rates of publication in reputed journals, international citations and the like.. On the other hand, sources of revenue change in time and ´he who pays the piper calls the tune´ meaning that structure, strategy and ´core´ capabilities of universities and departments, as well as the strategy and behaviour of individual researchers, can be expected to change in response to resource availability.
In actual fact, universities all over the world are going through a long term decline in the provision of fiscal block grants covering their various activities, and this is inducing them to search for alternative sources of income to maintain their ´mission´ as far as teaching activities, research and public goods production is concerned. Among the sources of funds becoming more important over the past two or
4 three decades fees to undergraduate and graduate students appear prominently, but also contract research, competitive funding for R&D activities, gifts and donations, have increased in importance as well. As sources of funds change so do also university strategies, organization and ´core capabilities´. Even if ´mission´ constitutes an important conditioning factor affecting long term university behaviour, sources of funds play a significant role as well. ´Old´ established universities usually assign a great deal of importance to ´mission´, and tend to base their prestige on high quality research and teaching. They also take pride in exerting a long term impact upon the cultural and scientific life of the community and, increasingly so, in sports and other spheres of social interaction, having a symphonic orchestra u organizing cinema festivals. On the other hand, smaller universities are closer to the profit-making end of the spectrum, and appear to be less inclined to perform R&D activities or to engage in the production of public goods. Of course there are exceptions to the rule – i.e. mixed strategies such as using student fees to subsidize R&D activities and the creation of specific ´niches´ of excellence, building a medical centre or a biotechnology research facility. There are no general rules that can be invoqued this being the reason on account of which individual case studies of university behaviour are needed if we are adequately to understand the ´ultimate´ determinants of micro behaviour in this field. .
There is no standard theory on the basis of which to go about exploring this complex territory. There is, of course, a neoclassical, equilibrium approach, to these matters, in which universities are assumed to maximize a long term objective function representing faculty prestige, research possibilities and the like. In 1978 Pfeffer and Salancik presented what they call the ´resource dependency theory´ of university behaviour which argues that external resource providers have a great deal of influence upon university internal organization and long term strategy. Thus, if fiscal block grants decline and student fees, external contracts, competitive R&D funds and donations become a substitute, we should a priori expect university activities and organization gradually to change in response to changes in sources of funds. What might be the lags hereby involved we do not know for certain, but we do know that the response might involve significant changes in the breadth of academic disciplines being covered as well as the way Departments and individual faculty members allocate their time between teaching activities – graduate and undergraduate courses – R&D, consultancy, and other equally time consuming endeavours.
Many of these questions have not so far been explored in detail in relation to Chilean Universities. Chile has at present 60 universities catering for over 600.000 students. 25 of these universities are ´public´ in the sense that they belong to the Council of Rectors of Chilean Universities (CRUCH). The remaining 35 universities are private, all of them created after the process of market de-regulation enforced by the military authorities in 1981. The de-regulation of tertiary education markets allowed private universities to enter the market and a large number of them were erected during the 1980´s and 1990´s. The 25 CRUCH ´public´ universities further subdivide in 16 which are truly public in the sense that they have to report to the Contraloria General de la Republica and be accountable for the use of their resources, and 6 which in spite of belonging to CRUCH are not public sector organizations in the above sense.
Some Chilean universities – public or private - are quite large (catering for 20 to 30 thousand students each) – other much smaller, dealing with a student population of a few thousand people. . Some cover 50 or 60 disciplines, others specialize in just a few academic fields. A number of Chilean universities have not so far received accreditation in many of the 6 areas that demand being evaluated for ´full accreditation´. The accreditation can be granted for 2 to 7 years. Only a small group of highly prestigious universities have so far received accreditation in all 6 categories, and for a full 7 year period. Public information on the accreditation status of different universities – both public and private – is
5 highly opaque introducing a major source of information asymmetries which end up affecting market outcome.
Summarizing: the Chilean university industry is characterized by a large degree of variance among service providers. Variance in ´mission´, size, quality, prestige, sources of revenue, mix of products and services offered to the market, accreditation status, and so forth. Large international educational enterprises, such as Miami-base Laureate International, The Apollo Group, SEK and others have in recent years entered Chilean university markets taking over local universities and making them part of their global international operation. Some of these foreign-owned universities – and a significant number of the locally-owned ones - have not so far gone through an adequate accreditation process, nor do they seem particularly eager to do so. They go as far as attaining ´Institutional Accreditation´ (the first and more general category of accreditation of the six ones that need be covered) but they do not indicate a high propensity to proceed deeper thereafter. This suggests that the disciplinary role market forces are expected to have impeding monopolistic practices from the part of service providing organizations does not adequately obtain in this field of economic activity. In other words, as far as university markets is concerned consumer protection is not adequately taken care of by the ´invisible hand´ of markets. As students can not freely move from one university to another carrying with them their academic credits there is a major element of market rigidity which allows firms to capture above ´normal´ profits in a highly segmented market for educational services.
The above description identifies an interesting set of ´stylized facts´ suggesting the need for a detail exploration of the structure and behaviour of Chilean university markets. It is only after such an exploration has been undertaken that we can safely proceed into the discussion of policy measures aiming at improving access, affordability, quality and accountability, all fields in which the Chilean university sector clearly shows to be wanting. We begin by looking at the 25 CRUCH universities – which, together, account for nearly half of the total number of university students in Chile - leaving for a future piece of research the examination of the remaining 35 private universities currently operating in Chile. (For an interesting examination of the behaviour of private universities the reader is referred to O. Monckeberg, 2007; Bernasconi, 2006).
Like in many other countries in the world fiscal block grants have been gradually contracting in relative terms as a source of revenue for the 25 CRUCH universities. Student fees, contractual income, competitive funding both for R&D and for infrastructure upgrading, and gifts and donations have gradually gained ground in substitution for fiscal grants. But there is a considerable degree of variation across universities in the extent to which each one of them could tap into the above mentioned alternative sources of revenue. Prestige, location, output mix, campus diversification strategies and more appear as significant factors explaining market conduct. Not all CRUCH universities have the same degree of access to the market for consultancy contracts, or to R&D grants, nor do they all elicit the same response when applying for private donations and gifts. Furthermore, the regional dimension is increasingly playing a significant role explaining differences in university behaviour. Some regional universities have been successfully adapting their teaching and research curricula to the specificity of local conditions; others have been less responsive in this respect. Very little is known so far in Chile about these topics.
In Section 2 we briefly examine alternative theories of university behaviour. The neoclassical approach to questions of university behaviour is first examined, following then by a brief review of the so called Resource Dependency Theory In Section 3 we look at the Chilean university sector as from an
6 aggregate perspective, presenting the reader some of the major ´stylized facts´ characterizing the recent expansion of the Chilean university ´industry´. Both, supply and demand for tertiary education services have expanded at a very rapid pace over the past two decades, completely changing the nature and behaviour of local markets for university education. This section is based on the results of a recent paper jointly written by the present author and Mr.R. Spence for IDRC, an agency of the Canadian government2. Leaving as background the aggregate description of market structure and performance in Section 4 we explore the large differences that prevails among CRUCH universities in relation to sources and uses of funds and market conduct. For so doing we begin by presenting a set of data describing the origin and use of resources in each one of the 25 universities at CRUCH. The data covers the period 2000-2007 and allows us to examine on a cross section base behavioural differences among Chilean public universities.
Cross section regression models allow us to illuminate some of the differences that obtains between ´research-oriented´ and ´teaching-oriented´ CHUCH universities, as well as between the two dominant actors in the system – The University of Chile and the Catholic University – and the rest of the universities at CRUCH. On the other hand, however, cross section estimates do not tell much about the complex institutional history that underlies the process of expansion of individual CRUCH universities. It is clear that very different institutional forces can be identified as determinants of the expantionary process of individual CRUCH universities. In order to proceed in such direction and to understand more about the complex institutional scenario underlying the evolution of different Chilean universities, in Section 5 we present a ´stylized´ description of university behaviour in terms of ´mission´ and resource availability and then proceed with two individual case studies throwing light upon the long term expansion of University of Talca and of the Catholic University of Valparaiso. Finally, in Section 6 we draw the conclusions of the present study, flag the need for further research in various different directions and briefly reflect on policy issues brought to the fore by the present research.
2. ALTERNATIVE THEORIES OF UNIVERSITY BEHAVIOUR.
2.1. The neoclassical approach to the study of university behaviour.
Cobb Douglas production functions have been used by neoclassical authors to examine questions of productivity differentials between public and private universities both, in research as well as in teaching activities. Standard assumptions of perfect competitive markets, of research and teaching activities being neatly separable, of university behaviour not being affected by institutions other than markets, are normally made in studies of this sort in order to simplify the analytical framework and to concentrate on the determinants of productivity differentials among tertiary education organizations.
As it usually happens with neoclassical models of firm behaviour they do teach us some lessons about the determinants of micro behaviour but they also end up missing a lot of what is actually going on in the ´real world´ as a result of the stringent assumptions they are based upon. Much of the interesting ´institutional complexities´ of ´real life´ situations are sacrificed for the benefit of a simple and stylized modelling of the production process.
2 J.Katz and R.Spence: Chile: Universities and the functioning of the local innovation system Mimeo, Santiago 2008. 7 In their NBER 2006 paper on ´The growing allocative inefficiency of the US Higher Education Sector ´ J.Adams and J.Roger Clemmons, follow this road to examine productivity growth and productivity differentials in a panel of 102 top US Universities, 68 public and 34 private, over the period 1981-1999. Their definition of productivity is outpur per faculty-equivalent in research as well as in teaching, with output being defined as papers and citations - in the case of research - and number of undergraduate and graduate degrees being granted, in the case of teaching. The fact that a similar specification of the production function is used both for public and private universities, and for teaching and research activities, allows the authors to come up with simple and rather challenging results showing that ´research productivity in private universities is roughly twice that of public universities´ (pag.2, Op.Cit), but…´relative teaching productivity in the two sets of institutions is roughly equal´ (pag.3. Op.Cit. . Also, ´the rate of growth of research productivity is greater in private universities… than in public universties´, but, ´overtime teaching productivity drops slightly in private universities, while it increases at one percet per year in public schools´. After reaching the above conclusion the authors warn us that : ´these quantity indexes do not capture changes in the value of higher education, nor do they capture changes in quality, but they represent a start on the problem of measuring productivity.
The fact that Adams and Roger Clemmons had access to panel data covering 102 US universities for a rather long period of time permited then to examine ´sources of growth´ decomposing growth within universities, between universities and the covariance of growth in shares and productivity growth. The decomposition exercise also gave them interesting results, again in relation to research, on the one hand and to teaching activities, on the other, separating private and public universities. The within- university component of growth ´ accounts for more than a 100% of growth, as far as research output is concerned. The between-university contribution is smaller, but positive, ….but the covariance of growth in research shares with growth in research productivity is negative´. (Pag.3, Op.Cit.) From which they conclude that research shares grow faster in universities where productivity growth is slower. Why this would be so, they don´t tell, but it is interesting to notice that the decomposition exercise yields similar results within groups of private and public universities, and also when looking at teaching productivity. Again the covariance term is strictly negative. From this they conclude that the US tertiary education sector might be experimenting growing allocative inefficiency. Having reached such a strong conclution – which suggests that university activities might be subject to decreasing returns to scale – they use regression analysis to test the hypothesis of decreasing returns. On this account they conclude that : ´Production (of teaching output) is not subject to decreasing returns to the same degree as research, suggesting that variation in university size is primarily a matter of teaching and not research´ (pag.4, Op.Cit.)
As said before, these are indeed interesting findings even if they result from a highly stylized and simplified behavioural model.
2.2. Other ways of approaching the study of university behaviour.
The study of social organizations has been a major area of concern for economists, historians, and other social scientists since the early confrontation between the German Historical School under the leadership of Gustav von Schmoller and the emerging doctrine of marginalism, represented by leading economists such as the Austrian Carl Menger and the French-Swiss Leon Walras. Industrial and institutional economists, and also sociologists, behavioural psychologists, antropologists and more engaged in an ongoing, and yet unfinished debate, on the ´sources of economic growth´. (T.McCraw, 2007) Such debate was enriched in the 1980´s by the publication by Professors Pfeffer and Salancik of
8 their book ´The external control of Orgnizations. A resource dependence perspective’. (Pfeffer & Salancik, Harper &Row, New York),
A rather simple idea underlies the argument of Pfeffer and Salancik: the procurement of external resources constitutes a major factor conditioning strategy and structure, be that of a firm, a university, or any other organization. The divisional structure of the organization, its recruitment policies, its external links and more appear to be strongly conditioned by the search for more resources.
We notice the analytical scenario here to be quite different from the one underlying conventional neoclassical studies on the ´sources of productivity growth´. Whereas in the neoclassical framework we think in terms of a perfectly informed and rational ´representative agent´, we now proceed in terms of an entirely different analytical language, taking into consideration differences in ´initial conditions´, in market opportunities and constraints, ´path dependency´, ´adaptive behaviour´, and competition as a ´winnowing´ mechanism selecting winners from losers. It is indeed a very different model in which to study the evolution of social organizations.
As mentioned before, universities are production organizations delivering teaching and research services to the community and also a wide variety of public goods in areas such as human health, culture, protection of the environment, water and energy utilization, desertification and more. They operate in imperfectly competitive markets differentiating products, competing for students and fiscal resources, setting up a long term business strategy trying to balance ´mission´ (normally conceived as quality in research and in teaching activities), and resource availability. They all differ strongly in the way they face the competitive struggle for fiscal resources, student fees and market opportunities.
It is this alternative analytical viewpoint that we shall be taking in the following sections of this paper. The behaviour of Chilean universities in their transition from a ´public-sector-led´ to a market- led regime of production organization will be examined paying attention to the evolving nature of institutions, market structure and internal organization of local tertiary education organizations.
3. THE DYNAMICS OF CHILEAN UNIVERSITY MARKETS
3.1. Market de-regulation, demand-side subsidies and the expansion of supply and demand for university services.
The merger of the Real University of San Felipe de Santiago - opened up in 1747 – and the Instituto Nacional created after independence from Spain in 1818 provided the basis for the creation, in 1843, of the University of Chile. Secularism and 19th century liberalism provide the basic philosophical background of the ´founding fathers´ of the University of Chile. It did not take long until the strongly articulated local catholic constituency, leaded by the Archbishop of Santiago, created the Catholic University of Chile. In 1872 Abdon Cifuentes, Ministry of Justice, Cult and Education led the way admitting private schools to adopt their own educational curricula. In his view the Staate has only a subsidiary role to play in the field of education and it is the family (and the Church) that are to set the rules in this territory. In 1888 the Catholic University of Chile was open and Monseñor Larrain appointed its first Rector. In February 1930 it was declared Pontifical University by Pio XI, implying that the Dean has to be jointly nominated by the Archbishop of Santiago and by Vatican authorities.
9
The third university to open in Chile was the University of Concepcion, created by the Freemasonry movement in 1919. In the following three decades only six other universities were created, making for a total of eight in Chile. In 1954 the Council of Rectors of Chilean Universities (CRUCH) came into being, bringing together the Rectors of these eight universities. Chile had at that point around 20 thousand university students. The eight universities were supported by fiscal resources and entry was free.
An important process of structural transformation occurred in the post-war years. Like most other Latin American countries Chile was at that time following an ´inward-oriented´ ´state-led´ economic development strategy with the public sector taking a major role as a producer of a large number of goods and services, including in areas such as health, transport and telecommunications. University education was by no means an exception. Resources for the expansion of university activities came from fiscal block grants and access to universities continued to be free. Urban middle classes expanded rapidly in those years of inward-oriented economic growth and this brought about a rapid growth in university enrolment. By 1967 the student population in Chile had reached 55 thousand people.
The University Reform Movement – involving tripartite governance of universities (by professors, graduates and undergraduate students) - and autonomy (from central government), which was a major political issue in neighbouring Argentina as from the 1920´s, only became important in Chile in the 1960´s. The idea that universities could be autonomous from the State and could play an active role in national political and cultural life was alien to the Chilean society prior to the 1960´s. During such decade Chilean universities became strongly vocal and often constituted a major voice confronting government authorities (See, in Section 5, the importance this process had in the case of the Catholic University of Valparaiso). It was precisely the above that induced the military government to break the University of Chile in 16 different regional universities and, simultaneously, to de-regulate the market for university services allowing private universities to enter the ´industry´. It was the military way into a less conflictive and confrontative model of social organization. At that time the Chilean university sector had a studentship of around 150 thousand people, mostly coming from upper and middle segments of society.
The military government introduced a dramatic change of regime in this field of economic activity. Both as a result of macroeconomic imbalances that accumulated in the economy in the years prior to the military take over and needed be redressed, and of the a priori ideological commitment in favour of market-led processes of social organization, major changes in policy were introduced by the military authorities in the field of tertiary education. Public resources were significantly curtailed forcing universities to search for alternative sources of revenue. Student fees became the more obvious alternative, but also contractual services, donations and competitive funds for R&D became important. Together with the above the government also proceeded to de-regulate market entry, allowing private providers to enter the industry. Pari pasu with the above, demand side subsidies were introduced to facilitate market access in the low income segments of the population. As a result of these actions both supply and demand for university services expanded rapidly throughout the 1980´s and 1990´s and market structure and behaviour, as well as sectoral institutions, suffered a major transformation. It is important to remember that the change in policy regime was introduced under the expectation that markets forces by themselves could efficiently conduct the process of industry restructuring and that no regulatory policy was needed to take care of potential market failures eventually affecting market outcome. Major problems of access, affordability, quality of services and accountability have emerged
10 in the course of time and will have to be taken care of in the forthcoming future. We shall return to these topics in the final pages of the present paper.
Table 1 describes the evolving pattern of market entry that obtained in Chilean university markets in the period 1980-2006.
Table 1 The creation of universities, professional institutes and centres for professional training, Chile 1980-20063 Number of 1980 1986 1990 1995 2000 2006
CRUCH universities 8 20 20 25 25 25
Private universities 3 40 45 39 36
Total universities 8 23 60 70 64 61
CRUCH Professional Institutes -- 4 2 ------
Private Professional Institutes -- 19 76 73 60 43
Total Professional Institutes 23 78 73 60 43
Centres for Professional Training 132 161 127 116 102 Total tertiary education 8 178 300 270 240 206 Establishments
By 2008 the structure of the Chilean tertiary education sector looked as follows:
Figure 1
3 CNAP 1999-2007. El modelo chileno de acreditacion de la educacion superior. Consejo Nacional de Acreditacion, Santiago 2007 Page. 24.
11 Universities Techno-Professional Schools
Universities CRUCH Private Professionl Centres of Militar 25 Univers. Institutes. Technical Schools 35 45 Training 16. 97 Public Private CRUCH CRUCH 16 9
218 Institutions Tradicional
U.Chile Catolica Chile Accreditation Status U.Santiago Catolica Valpo Catolica Norte Public CRUCH 15 Concepción Private CRUCH 9 TarapacáDerivadas Austral Chile Private (non CRUCH) 20 Arturo Prat Tec.Federico Professional Institutes 10 Antofagast. Santa Maria Centres of Technical Training 7 La Serena Military Schools 1 Playa Anch Valpo. Ciencia Ed. Santis.Concep. Tecnologic Catolica Maule Metropolit. Catolica de Talca Temuco Bio Bio La Frontera
Looking at market entry we notice that two different strategies have prevailed over the past decades. Some universities have opted for what we call here a ´low end´ market entry strategy – involving the expansion of production capacity – i.e. enrolling more students - both in their original facilities, but also opening up new branch campuses in different parts of the country - without concerning themselves deeply for quality of services and accreditation aspects, whereas other universities opted for a ´high end´ market entry strategy, i.e. erecting new teaching and research facilities on the basis of high quality professorial staff, ´state-of-the-art´ infrastructure and a ´world class´ teaching curricula. In a few cases universities have chosen to do both, expanding low-cost teaching activities in order to generate the cash flow from which to finance the erection of a ´world class´ teaching or research facility. Cross subsidization across campuses, disciplines and activities are quite frequent under current market organization arrangements as we shall see later on in the paper.
12
The nature of both models of market entry is quite different and so is their impact upon market functioning. The ´low end´ market entry strategy reflects a short term profit maximization behaviour associated, on the one hand, to the fact that demand for university services was increasing at a very rapid pace, offering a clear opportunity for profits in a very opaque market environment and, on the other, to the undemanding regulatory environment which allowed new universities to enter the market without having to comply with strong accreditation requirements. Contrariwise, the ´high end´ market entry strategy caters for high income groups of society which can afford much higher fees for university services but demand better services in return. A major process of segmentation has emerged in Chilean university markets as a consequence of the above, reinforcing the already high degree of social segmentation prevailing in the country.
Let us now look at the demand side of the market. We notice that enrolment in Chilean universities underwent a major expansion during the past two decades, making the local student population to grow from 245.000 students in 1990 to over 678.000 at the end of 2007.
Various different forces fuelled this rapid expansion of demand for tertiary education in Chile over the past two decades. On the one hand, the economy performed outstandingly well during a large period of time, in particular between 1984 and 1998. On the other, the increasing availability of scholarships, grants and credit, facilitated entry to universities and other tertiary education institutions. The table below indicates that the enrolment in tertiary education organizations multiplied by a factor of four between the early 1980´s and 2006. It is important to notice that such expansion was much stronger in the lower quintiles of the distribution, making the access rate to university in the group 18-24 in the lowest quintile of the distribution to increase from 4% to 15%, from 1990 to 2003 and from 8% to 21% in the next lower quintile.
Table 2 Enrolment in Chilean Tertiary Education Organizations 1983-2006 1983 1985 1990 1995 2000 2006 CRUCH universities. 105.341 108.674 108.119 154.885 201.186 256.750 Private universities 2.708 4.953 19.509 69.004 101.386 180.346 Total Universities 108.049 113.625 127.628 223.889 302.562 473.096 Prof. Institutes 25.244 32.233 40.006 40.980 79.904 119.251 Prof. Training Centers 39.702 50.425 77.774 72.735 53.354 63.387 Total 172.995 196.283 245.408 337.604 435.830 619.734
Consider both previously mentioned forces in further detail. The period 1984-1998 is frequently regarded as the ´golden age´ of the Chilean long term growth process. After the Debt Crisis of 1982, in 1984, the economy entered into a phase of rapid expansion which lasted until 1998. An average rate of
13 growth just above 7% per annum was attained during this period, with new sectors of economic activity, and many new firms entering the economy. The following diagram describes the process.4
Figure 2 Actual and potential GDP, Chile 1974-2003.
Throughout this period the production structure underwent a major process of ´technological deepening´, particularly so in natural resource processing activities such as cooper mining, salmon farming, fruit and wine production, the forestry industry. Many new firms were erected bringing with them ´world class´ manufacturing technologies, rapidly gaining share in world markets. These new production facilities demanded new, more professional, management, as well as skilled man power in a large number of different disciplines. The strong signal coming from the production structure was clearly perceived by the educational sector and a steady process of market entry of new universities and Centres for Professional Training followed. 10 new universities opened up between 1990 and 2005. The total number of university students increased from 245.000 in 1990 to 435.000 in 2000.
It should be noted that it is mainly private universities that have gained market share throughout this period. Their studentship multiplied by a factor of ten. A recent report by OECD indicates that the growth spurt was due both to proliferation of branch campuses from existing universities as well as to the creation of entirely new ones.
4 R. French Davis. Entre el neoliberalismo y el crecimiento con equidad. J. C. Saez, Editor, Santiago, tercera Edicion, 2003. 14 Figure 3 Averaged indices for tertiary undergraduates by type of institution (1990=100)
1.200
1.000
800
600
400
200
- 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
CRUCH Universities Private Universities Profesional Institutes Technical Training Centers Total
Source: Based on MINEDUC (2006)
As already mentioned, the rate of new student enrolment was also fuelled up by demand-side subsidies facilitating market entry. This was specially so in the lower quintiles of the distribution, as shown in Figure 4.
15
Figure 4 Access to Tertiary Education by Income Bracket Chile 1990-2006 Quintiles de ingreso 1990 1996 2003 2006 I 4,6 7,6 12,4 17,3 II 7,5 13,5 19,2 22,4 III 12,2 19,7 32,1 31,7 IV 22,4 33,2 48,6 49,6 V 39,7 63,2 73,7 80,0 Total 15.6 26,1 37,8 38,3 Quintil V/ 8,6 8,3 5,9 4,6 Quintil I
Tasa Cobertura Bruta Educación Superior en Chile
90
80
70
60
50
40 Porcentaje 30
20
10
0 I II III IV V Total Quintil V/ Quintil I Años
1990 1996 2003 2006
Fuente: CASEN 2006
.
16 A wide and heterogeneous middle class emerged in Chile as a result of both previously mentioned processes. A virtuous circle developed of faster economic growth associated to quality upgrade of the labour force, to faster productivity growth and to increased international competitiveness.
We should notice, however, that after 1998 the Chilean growth process slowed down considerably. The annual rate of GDP expansion fell from 7.5% to around 4% per annum in the years 1998 to the present. Pari pasu with the above the opening up of new production facilities and the rate of diversification of the production structure also suffered a significant slow down, affecting the demand for skilled labour and, probably also, the pace of upward social mobility within the Chilean social structure. Recent studies by Javier Nuñez al the University of Chile suggest that inter-generational social mobility might be slowing down, as reflected by a lower elasticity of income of the younger cohorts of the labour force vis a vis the elasticity of income of their parents´ generation.. (Javier Nuñez, Diario Financiero, December 27, 2005).
Yet another important feature of the local markets for university services needs to be mentioned at this point. By international standards Chile appears as an outlier in the extent to which households appear as financers of tertiary education expenses. Even if demand-side subsidies facilitate market access for low income segments of the population, at the end of the day families have to repay the credit and hence end up absorbing a very high proportion of the cost of accessing a university education. Figure 5 – taken from Education at a Glance from UNESCO – indicates this to be the case. A recent OECD report confirms the above. Chilean families end up absorbing as much as 80% of the cost of university attendance, which is significantly above average by international standards.
Figure 5 Tertiary Enrolment Rates and Degree of Privatisation in Selected Latin American Countries
2.5
2 46 Chile 1.5 Colombia Paraguay 1 26 22 Argentina 20 Brasil 0.5 60 24 33 Education as % of GDP of % as Education Cuba 33 Mexico Peru
Private Expenditures on Tertiary Tertiary on Expenditures Private 0 -20 0 20 40 60 80 100
-0.5 % Enrolment in Private Tertiary Education
Enrolment rate
Source: UNESCO Institute of Statistics
17 Seen on an international perspective, Chile exhibits one of the highest leverage ratios in the world, complementing its public investment for tertiary education with private funding. In view of the above the OECD Report ends up advicing a major expansion of public investment in Education in the forthcoming future. No other economy, including countries such as Korea and Japan, that have also used private investment as their main source of funding for tertiary education expansion, has a private/public funding ratio as high as Chile.
------
Having so far examined the major forces ´explaining´ supply and demand expansion for university education in Chile, we now turn to aspects of quality of services..
3.2. Accreditation status of Chilean universities.
Not all Chilean universities, education institutes and teaching programs have successfully gone through ´peer-review´ and accreditation processes. Accreditation can be obtained over six different spheres of activity: 1. Institutional management, 2. Undergraduate Teaching, 3. Research, 4. Post Graduate Teaching, 5. Relationship with the community and 6. Infrastructure, and could be obtained for two to seven years depending upon the level of quality and accountability attained by each university in each of the previously mentioned spheres. Only a small number of local universities – 12 out of 60 - have received accreditation in four or more of the above categories, and for periods of four to seven years. Accreditation is clearly related to prestige and constitutes an attractor for high quality students and well as for better trained faculty. On the other hand, accreditation also means costs in tangible and intangible assets.
The university industry shows a complex and variegated scenario as far as accreditation is concerned. Only a small number of Chilean universities have received accreditation in all six categories under evaluation, and for seven years. The group includes the University of Chile, the Catholic University, and the University of Concepcion. Close behind we find a small group of universities which have received accreditation in four or five of the above mentioned categories, and for shorter periods of time, say, four years. This group includes Universidad Austral, Universidad Catolica de Valparaiso, Universidad del Bio-Bio, Universidad de Talca. On the other hand, a large number of universities have not yet been accredited, or their accreditation is only institutional and for a period of two years, elapsing shortly. This third group includes both public and private universities.
Among private universities only a small group has done well as far as accreditation is concerned. This group includes Universidad del Desarrollo, Adolfo Ibañez, Diego Portales, Los Andes, Andres Bello and Universidad Mayor. These private universities are currently gaining prestige and market share in teaching services for undergraduate students. Some of them are also attaining significant progress in expanding ´in house´R&D activities, as we shall see later on in the paper.
18
Table 3 Accreditation Status of Chilean Universities (2007)5 Institution Effectively accredited areas Period of accreditation Universities Fields of accreditation (Expiring year)
Universidad Academia de 1.Institutional management November 2008 Humanismo Cristiano 2.Undergraduate teaching 1.Institutional management August 2009 Universidad Adolfo Ibañez 2.Undergraduate teaching 3.Post graduate teaching Adventist University of Chile NOT ACCREDITED 1.Institutional management November 2009 University Alberto Hurtado. 2.Undergraduate teaching 3.Relations with the community 1.Institutional management August 2008 Universidad Andres Bello 2.Undergraduate teaching 3.Infrastructure & equipment 1.Institutional management January 2009 Universidad de Antofagasta 2.Undergraduate teaching Universidad Arturo Pratt Institutional accreditation 1.Institutional management January 2008 Universidad de Atacama 2.Undergraduate teaching 1.Institutional management August 2009 2.Undergraduate teaching Universidad Austral de Chile 3.Research and development 4.Postgraduate teaching. 1.Institutional management December 2008 Universidad Autonoma de Chile 2.Undergraduate teaching Universidad Bolivariana NOT ACCREDITED 1.Insitutional management August 2011 2.Undergraduate teaching 3.Research and development Universidad Catolica de Chile 4.Post graduate teaching 5.Relations with the community 6.Infrastructure & equipment. 1.Institutional management August 2009 2.Undergraduate teaching Universidad Catolica de Valparaiso 3.Research & development 4.Post graduate teaching 1.Institutional management November 2009 Universidad de Tecmuco 2.Undergraduate teaching 1.Institutional management January 2008 Universidad Catolica de la 2.Undergraduate teaching Santisima Concepcion. 3.Infrastructure & equipment 1.Institutional management January 2009 2.Undergraduate teaching Universidad Catolica del Maule 3.Relations with the community 4.Infrastructure & equipment 1.Institutional management December 2010 2.Undergraduate teaching Universidad Catolica del Norte 3.Research & development. 4.Infrastructure & equipment
5 CNAP 1999-2007; op. cit. 19 Universidad Catolica silva 1.Institutional management October 2008 Henriquez 2.Undergraduate teaching 1.Institutional management December 2008 Universidad Central de Chile 2.Undergraduate teaching 1.Institutional management August 2011 2.Undergraduate teaching 3.Research & development Universidad de Chile 4.Post graduate teaching 5.Relations with the community 6.Infrastructure & equipment. 1.Institutional management August 2010 2.Undergraduate teaching 3.Research & development Concepcion 4.Post graduate teaching 5.Relations with the community Universidad de 6.Infrastructure and equipment 1.Institutional management November 2008 Universidad de la Frontera 2.Endergraduate teaching 3.Research & development 1.Institutional management. January 2008 Universidad de la Serena 2.Undergraduate teaching Universidad de la Republica NOT ACCREDITED Universidad de Los Lagos Institutional accreditation. 1.Institutional management accredited until November Universidad de Magallanes 2.Undergraduate teaching 2008 1.Institutional management December 2008 Universidad de Playa Ancha 2.Undergraduate teaching 1.Institutional management April 2008 2.Undergraduate teaching 3.Research & development Universidad de Santiago de Chile 4.Relations with the community 5.Post graduate teaching 6.Infrastructure & equipment 1.Institutional management August 2009 2.Undergraduate teaching Universidad de Talca 3.Research & development 4.Infrastructure and equipment 1.Institutional management August 2007 Universidad de Tarapaca 2.Undergraduate teaching 3.Infrastructure & equipment Universidad de Valparaiso January 2009
1.Institutuional management October 2008 Universidad de Viña del Mar 2. Undergraduate teaching 1.Institutional management January 2009 2.Undergraduat teaching Universidad del Bio Bio 3.Relations with the community 4.Infrastructure & equipment 1.Institutional management November 2011 2.Undergraduate teaching Universidad del Desarrollo 3.Continuous education 4.Relations with the community Universidad del Mar NOT ACCREDITED 1.Institutional management August 2007 Universidad del Pacifico 2.Undergraduate teaching 20 1.Institutional management August 2008 Universidad Diego Portales 2.Undergraduate teaching 3.Infrastructure & equipment Universidad Ibero-Americana 1.Institutional management December 2007 UNICIT 2.Undergraduate teaching Universidad Mariano Egaña NOT ACCREDITED 1.Institutional management December 2009 Universidad Mayor 2.Undergraduate teaching Universidad metropolitana de 1.Institutional management January 2008 Ciencias De la Educación. 2.Undergraduate teaching 1.Institutional management June 2008 Universidad San Sebastián 2.Undergraduate teaching 1.Institutional management December 2007 Universidad Santo Tomas. 2.Undergraduate teaching 1.Institutional management December 2011 Universidad Tecnica Federico S. 2.Undergraduate teaching Maria 3.Research & development Universidad Tecnologica NOT ACCREDITED Metropolitana 1.Institutional management December 2007 Universidad UNIAC 2.Undergraduate teaching
It is reasonable to assume that a positive relationship prevails between the accreditation status of any given university and the quality of services it delivers to the market. As from this perspective Chile has yet a long way to go in terms of improving the quality of the education activities at the university level. It should be noted that this is an industry in which a great deal of asymmetric information prevails between the supply and the demand side of the market this being a major source of market failure. There are many reasons on account of which competition constitutes a very frail disciplinary mechanism in this field of economic activity. Among such reasons asymmetric information between service providers and would-be students constitutes one of the more important ones, explaining why a pro-active government role in this field is strongly needed if quality of education and university accountability are to improve in the forthcoming future.
3.3. The financial model underlying the functioning of Chilean universities.
CRUCH universities finance their activities with resources coming from different sources. Although fiscal block grants (AFD+AFI) continue to be a major source of revenue, Figure 7 indicates that the relative share of block grants in total university revenue is gradually falling. In 1990 AFD+AFI represented 67.6% of total public contributions to Chilean Universities. By 2005 AFD+AFI constituted 44.4% of total CRUCH revenue and in 2007 they represented just 39.2%. It is important to notice that these numbers refer to the average for the 25 CRUCH universities but that a considerable variance prevails among them in the extent to which they rely of AFD+AFI as a source of finance. Other sources, such as tuitions and fees, competitive funds for R&D activities, external contracts, donations have been expanding in relative terms as fiscal block grants have gradually lost relative weight, but the variance across universities in the extent to which this has been so in each case varies considerably. This we examine in Section 4 of the paper. The relative decline in fiscal block grants and the concomitant
21 expansion of these other alternative sources of revenue is shown in Figure 7. We notice that the process accelerated after 1997-1998.
Figure 7 Sources of funds of Chilean Universities. 1990-2003
Table 4 Fiscal Sources of Funds for Chilean Universities6 (At constant MM 2005 $) 1990 2007 Item 2000 2005 % % 1.Fiscal Direct Support 61.934 122.714 102.575 109.483 51.1 34.0 2.Fiscal Indirect Support 20.016 18.864 17.915 17.695 16.5 5.2 Block Grants 67.6 49.5 44.5 39.2 Total fiscal resources. 121.120 360.589 243.220 285.650 100 100 Source: J.Katz & R.Spence, 2008 and OECD, 2008, pag.143, Table 8.10 (for 2007)
------
6 CNAP 1999-2007. El modelo chileno de acreditacion de la educacion superior. Consejo Nacional de Acreditacion, Santiago 2007. MM is million (106) 22 We close here our aggregate examination of the growth process of Chilean university markets in the past three decades. As explained in our introductory section, one of the main motivations for the present enquiry has been that of illuminating the large degree of variance in structure and performance that prevails between CRUCH universities. In order to proceed in such direction we now turn into a more disaggregated level of analysis looking at the 25 universities at CRUCH on a comparative basis.
4. CRUCH UNIVERSITIES ON A COMPARATIVE PERSPECTIVE.
4.1. Source of funds.
Data on sources and uses of funds for the 25 universities at CRUCH are annually published by the Ministry of Education in its web site. Such data is now used to examine on a comparative perspective differences in structure and performance between public sector universities in Chile. We begin by looking at differences in sources of funds.
Universities collect resources from various different sources. They enrol more students given their physical infrastructure and in this way they expand their collection of student fees. They could also opt for opening up new branch campuses in different regions of the country and/or expanding the number of disciplines and careers they impart instruction upon. In addition to the above, universities can also expand their revenue by carrying more R&D efforts, applying for such purpose for public funding in agencies like Conicyt, Corfo and others. They can also press for a larger share of fiscal block grants, or apply for private donations. Finally, they could also obtain more funds from consultancy services.
Table 5 provides information as to the major differences in sources of revenue for the 25 CRUCH universities in 2000 and 2006. It also reflects changes in sources of funds for each CRUCH university between the above mentioned years.
23 Table 5 Sources of revenue of CRUCH universities Government support* Tuition fees Self generated resources % % % Universidad 2000 2006 variation 2000 2006 variation 2000 2006 variation U. Austral 51.3% 47.1% -8.2% 23.0% 23.2% 1.1% 25.8% 29.7% 15.4% U. Federico Santa María 34.8% 33.5% -3.7% 24.3% 25.3% 3.9% 40.8% 41.2% 0.9% U. Católica de Valparaíso 37.4% 33.3% -11.0% 46.3% 43.6% -6.0% 16.2% 23.2% 42.6% U. Metropolitana de C.Educación 34.4% 33.1% -3.7% 37.1% 37.8% 1.9% 28.5% 29.0% 2.0% U. de Tarapacá 33.1% 30.3% -8.4% 30.0% 36.3% 20.7% 36.9% 33.5% -9.3% U. de Antofagasta 37.4% 30.1% -19.5% 34.3% 40.3% 17.7% 28.3% 29.6% 4.4% U. de Talca 39.0% 29.8% -23.6% 30.1% 40.5% 34.6% 30.9% 29.7% -3.9% U. de Concepción 33.4% 26.9% -19.4% 17.3% 23.4% 35.6% 49.4% 49.7% 0.7% U. Católica del Norte 36.5% 24.7% -32.4% 29.9% 29.4% -1.6% 33.6% 45.9% 36.7% U. de la Serena 27.6% 24.3% -11.7% 30.2% 27.9% -7.8% 42.2% 47.8% 13.2% U. Católica de Concepción 24.3% 24.3% -0.2% 57.0% 54.3% -4.7% 18.7% 21.4% 14.5% U. de Atacama 9.7% 19.7% 103.6% 11.5% 17.3% 50.0% 78.8% 63.0% -20.0% U. de Santiago 20.8% 19.0% -8.9% 33.8% 44.1% 30.5% 45.3% 36.9% -18.7% U. de Magallanes 18.5% 14.3% -22.8% 28.8% 31.9% 10.7% 52.7% 53.8% 2.2% U. del Bio-Bio 16.5% 13.7% -17.0% 45.5% 42.7% -6.1% 38.0% 43.6% 14.7% U. de Chile 19.4% 11.7% -39.6% 24.4% 21.7% -11.1% 56.2% 66.6% 18.5% Pontifica U. Católica 14.5% 11.6% -19.8% 26.4% 29.3% 11.0% 59.1% 59.0% 0.0% U. Arturo Prat 11.5% 11.5% -0.4% 63.0% 72.5% 15.2% 25.5% 16.0% -37.2% U. Católica del Maule 11.1% 10.6% -4.7% 39.2% 46.6% 18.9% 49.7% 42.8% -13.9% U. de Playa Ancha 8.1% 8.2% 0.9% 50.8% 40.4% -20.5% 41.1% 51.4% 25.1% U. Católica de Temuco 7.8% 7.7% -0.9% 52.3% 52.6% 0.5% 39.9% 39.7% -0.5% U. de Valparaíso 19.0% 7.5% -60.6% 38.6% 52.0% 34.7% 42.4% 40.6% -4.4% U. de la Frontera 11.2% 7.1% -36.9% 36.0% 36.6% 1.4% 52.7% 56.3% 6.9% U. de Los Lagos 12.3% 6.1% -50.5% 47.6% 52.8% 10.9% 40.1% 41.1% 2.5% U. Tecnológica Metropolitana 6.5% 5.6% -14.3% 32.3% 39.0% 20.6% 61.1% 55.4% -9.4%
General Average 23.1% 19.7% -14.7% 35.6% 38.5% 8.0% 41.4% 41.9% 1.3% Source: CRUCH statistics Note: *Direct (AFD) funding + indirect funding (AFI) + FCSU repayments
The figures in the Table correspond to 2000 and 2006 and provide empirical evidence in connection with two different topics. On the one hand, they show that large differences do in fact prevail across CRUCH universities in the extent to which they relay on student fees, government support and self-generated funds as sources of funds. Major differences are noticed both in 2000 and in 2006 across CRUCH universities in this respect. For example, student fees represent as much as 70% of total revenue in the case of Universidad Arturo Prat, and only 17% in the case of Universidad of Atacama in 2006. The other 23 CRUCH universities fall somewhere in between these two extreme cases. A closely similar picture can be found in 2000. Notice also that fiscal resources constituted 47% of total revenue for Universidad Austral and only 7.1%, 6.1% and 5.6% respectively for Universidad de La Frontera, 24 Universidad Los Lagos and Universidad Tecnológica Metropolitana, in 2006. Finally, and as far as self- generated funds is concerned, we also find a large variance to prevail. In the case of Universidad de Chile self-generated resources account for 66% of total revenue, 63% at the Universidad de Atacama and 59% at the Catholic University of Chile. On the other hand, self generated funds represent a much lower proportion of total revenue in the cases of Universidad A. Pratt and in Universidad Católica de la Santísima Concepción, where they only accounted for 16% and 21%, respectively, in 2006.
On the other hand, the figures in the Table also reflect changes in sources of funds as between 2000 and 2006. We notice that important changes obtained in the extent to which sources of funds varies for some of the CRUCH universities in time. While the Universidad of Atacama exhibits a very large increase in its access to fiscal resources, the Catholic University of Chile, the Universidad de Valparaíso, Universidad de La Frontera and Universidad Los Lagos show a major reduction in the share of fiscal resources in total revenue. Concomitantly with the above, student fees increased as a source of revenue in most cases, but they clearly did so well above average in the case of University of Atacama, University of Valparaiso, University of Concepcion and University of Talca.. Contrariwise, student fees decreased as a source of revenue for University de Playa Ancha (-21%).. Finally, self-generated funds increased quite strongly in the case of Universidad Católica de Valparaíso and also in the case of Universidad Católica del Norte, but they decreased quite significantly for Universidad Arturo Prat and for Universidad de Atacama.
The above figures confirm our a priori believe that sources of funds not only are significantly different across CRUCH universities, but also that they vary at a very different pace through time for the various members of the group. This is reflected in the following three diagrams were we look at the evolution of student fees, fiscal resources and self-generated funds for a small number of universities at CRUCH over the period 200-2006. In Appendix 1 to the paper we present the same evidence for the 25 CRUCH universities.
25 Figure 8 Student Fees as source of Revenue for CRUCH Universities.
Student Fees as source of Revenue for CRUCH Universities 80.0%
U. Arturo Prat
70.0%
60.0%
U. de Los Lagos
50.0% U. de Valparaíso
U. de Santiago
U. de Talca 40.0%
Promedio U. de la Frontera general 30.0% PUC
U. de Concepción U. Austral 20.0% U. de Chile
10.0%
0.0% 2000 2001 2002 2003 2004 2005 2006
26 Figure 9 Fiscal Resources as Source of Revenue for CRUCH Universitites.
Fiscal Resources as Source of Revenue for CRUCH Universitites
60.0%
50.0%
U. Austral
40.0%
U. de Talca 30.0%
U. de Concepción
Promedio general 20.0% U. de Santiago
U. de Chile Pontifica U. Católica U. Arturo Prat 10.0% U. de Valparaíso U. de la Frontera U. de Los Lagos
0.0% 2000 2001 2002 2003 2004 2005 2006
27 Figure 10 Self generated funds as source of Revenue for CRUCH Universities.
Self generated funds (Sales of Services) as source of Revenue for CRUCH Universities
50.0% Pontifica U. Católica
45.0%
U. de Chile 40.0%
35.0%
30.0%
25.0% U. Austral
U. de Concepción 20.0%
15.0%
U. de la Frontera U. de Santiago 10.0% U. de Los Lagos Promedio U. Arturo Prat general
5.0% U. de Valparaíso U. de Talca 0.0% 2000 2001 2002 2003 2004 2005 2006
Looking at Figures 8, 9 and 10 we notice that self-generate funds constitute a high, and gradually increasing, component of total revenue both for the Catholic University and for the University of Chile. In these two cases self-generated funds represent three times as much, percentage-wise, as for the average CRUCH university. Contrariwise, both these universities exhibit a below average - and gradually falling - participation of fiscal resources in total revenue. As we shall see later on, this constitutes an important finding of the present enquiry, strongly related to major long term structural features of the Chilean university sector associated to the supremacy and pace-setting character of these two major actors of the system, the University of Chile and the Catholic University.
Figures 11 and 12 graphically show the above, comparing 2000 with 2006. We notice that the University of Chile and the Catholic University not only differentiate themselves from the rest of the group, but also that the gap between them and the remaining universities at CRUCH tends to be getting larger, rather than smaller, through time. We will return to this topic later on in the monograph.
28 Figure 11 Alternative CRUCH university strategies as far as Sources of funds in concerned.
Financial Model (2000)
Government support by JCE Academic Staff 0.08
0.07
0.06
0.05
0.04
0.03 U. de Talca
0.02 Pontifica U. Católica 0.01
0
U. de Los Lagos Pontifica U. Católica U. de la Frontera U. Arturo Prat U. de Chile
Pontifica U. Católica Other Incomes by JCE Academic Staff Tuition fees by JCE Academic Staff
Pontifica U. Católica U. Arturo Prat U. Austral U. de Chile U. de Concepción U. de la Frontera U. de Los Lagos U. de Santiago U. de Talca U. de Valparaíso Promedio
29 Financial Model (2006)
Government support by JCE Academic Staff 0.12
0.1
0.08
0.06
0.04 U. de Talca
0.02
0
U. de la Frontera U. de Talca U. de Valparaíso U. de Los Lagos U. de Los Lagos U. Arturo Prat U. de Chile Pontifica U. Católica
Other Incomes by JCE Academic Staff Tuition fees by JCE Academic Staff
Pontifica U. Católica U. Arturo Prat U. Austral U. de Chile U. de Concepción U. de la Frontera U. de Los Lagos U. de Santiago U. de Talca U. de Valparaíso Promedio
Having looked at sources of revenue we now turn to uses of funds, i.e. to the provision of services.
4.2. Universities as service providing organizations.
Having so far examined the ´financial side´ of university functioning we now turn to universities as service providing organizations. As from his perspective universities can be thought of as delivering teaching services – at the graduate and undergraduate level – R&D activities and consultancy services, both for firms and government agencies. Figures 12a and 12b indicate that also a great deal of variance prevails in this respect, with the University of Chile and the Catholic University clearly differentiating themselves from most of the other CRUCH universities as providers of teaching and R&D services. As before, differences in this respect vis a vis the CRUCH – with notable exception which will be examined shortly - also seem to be getting larger, rather than smaller, with the passage of time.
30
Figure 12 Universities as service-providing organizations.
Real Model (2002) Undergraduates completing degree by JCE Academic staff (divided by 10) 0.6
0.5
0.4
0.3 U. de Santiago U. de Concepción
0.2
0.1
U. de Concepción 0 U. Austral U. de Talca U. de Santiago U. Austral
U. de Concepción Pontifica U. Católica
U. de Chile U. de Chile
Services Income by JCE Academic staff Pontifica U. Católica Publications by JCE Academic staff
Pontifica U. Católica U. Arturo Prat U. Austral U. de Chile
U. de Concepción U. de la Frontera U. de Los Lagos U. de Santiago
U. de Talca U. de Valparaíso Promedio
31 Real Model (2006) Undergraduates completing degree by JCE Academic staff (divided by 10) 0.8
0.7
0.6
0.5
0.4 U. de Santiago 0.3
0.2
0.1
U. Austral 0 U. de Concepción
U. Austral U. de Concepción U. de Talca Pontifica U. Católica
U. de Chile U. de Chile
Pontifica U. Católica Services Income by JCE Academic staff Publications by JCE Academic staff
Pontifica U. Católica U. Arturo Prat U. Austral U. de Chile
U. de Concepción U. de la Frontera U. de Los Lagos U. de Santiago
U. de Talca U. de Valparaíso Promedio
The above results provide preliminary support to the hypothesis that the University of Chile and the Catholic University constitute a class in their own, followed at a considerable distance by other members of the CRUCH. We shall return to this issue later on in the paper.
4.3. Further statistical evidence concerning differences in structure and behaviour across CRUCH universities.
Further quantitative information is available on the web for the 25 universities at CRUCH on issues such as ISI and Scielo publications, Fondecyt R&D projects, faculty members with JCE (Jornada Completa Equivalente), JCE carrying a PhD degree, number of students matriculating per annum, and more. The data covers the period 2000-2007. On the basis of such data, we have carried out the statistical analysis we now present. Product moment correlation coefficients between different pairs of variables provide the departing point of our enquiry. These coefficients give us an initial picture of statistical association between pairs of variables (without implying causality). We get there the initial building blocks for a more articulated construction. Table 6 presents the cross section product moment correlation coefficients obtained from pooling the data for 25 CRUCH universities over the period 2000- 2006. The variables we have selected appear as closely related ´proxies´ for some of the variables we have identified before in Figures 11 and 12.
32
Table 6 Product moment correlation coefficients for 25 CRUCH universities 2000-2006
Panel data 25 CRUCH Universities 2000-2006 Number of under graduates Fiscal Total Fondecyt JCE faculty completing block Student Publications resources members degree. grants fees. Total Publications 1 Fondecyt Resources 0,8905 1 JCE faculty 0,9538 0,8345 1 members Uundergraduates 0,7869 0,6925 0,8912 1 completing degree. Fiscal block grants. 0,8996 0,7977 0,9149 0,8093 1 Student fees. 0,8322 0,7777 0,8621 0,7863 0,7553 1
We notice a high degree of correlation to prevail between performance indicators – number of publications, number of students completing their undergraduate training or number of R&D projects under execution – and resource utilization indicators – such as JCE faculty, fiscal block grants or Fondecyt resources – when poolling the 25 CRUCH universities together over the period 2000-2006. It is to be noted, however, that when looking at individual cases through time the strength of the association between resource availability and performance does obtain in each and every case. In effect, looking at product moment correlation coefficients for each university we observe that there is a great deal of variance across universities in the extent to which number of publications, number of JCE faculty and R&D funding, do in fact attain a significant degree of association, as Table 8 below indicates. The same is true when we look at number of students completing their undergraduate training in association with student fees and fiscal block grants, as in Table 9. Although these correlations are clearly less robust (from a statistical point of view) than the one coming from pooling cross section and time series data (as in Table 6), they nonetheless provide preliminary support for our hypothesis that CRUCH universities are indeed very different from each other in structure, strategy and performance and that only a small number of them shows a pattern of behaviour close to a priori expectations. In effect, it is in the largest and more prestigious universities at CRUCH that we find a strong correlation between proxy indicators for resource availability and performance. Let us further explore this topic.
33 Table 7 Publications as a function of JCE faculty and reception of Fondecyt.Funds Simple correlation Simple correlation between publications Universidad. between and Fondecyt publications and JCE funding.
Pontificia Universidad Catolica 0.60 0.60 Universidad de Chile 0.78 0.61 Universidad Catolica Valparaiso 0.58 0.54 Universidad Catolica del Norte 0.61 0.67 Univ.Federico Santa Maria 0.97 0.67 Universidad de Valparaíso 0.86 0.90 Universidd del Bio Bio 0.90 0.68 Universidad de Magallanes 0.47 0.79 Universidad de Concepción 0.36 0.73 Universidad Catolica de Concepcion 0.73 0.27 Universidad Catolica de Temuco 0.75 0.35 Universidad Austral 0.04 0.35 Universidad A.Pratt 0.25 -0.61 Universidad Catolica del Maule 0.47 -0.01 Metropolitana C.Educacion 0.78 -0.32 Tecnologica Metropolitana -0.38 -0.39 Universidad de Antofagasta 0.17 -0.88 Universidad de Atacama 0.53 0.23 Universidad de los Lagos 0.67 -0.08 Universidad de Playa Ancha 0.60 -0.53 Universidad de Santiago 0.57 0.07 Universidad de Talca -0.58 0.93 Universidad de Talrapaca 0.91 0.43 Universidad de La Frontera 0.05 0.14 Universidad de La Serena 0.07 0.72
34
Table 8 Undergraduate Degrees, student fees and fiscal block grants. Simple correlation Simple correlation between graduates Universidad between graduates and fiscal block and fees. grants.
Pontificia Universidad Catolica 0.66 0.76 Universidad Arturo Pratt -0.10 -0.45 Universidad Austral 0.65 0.58 Universidad Catolica de Temuco 0.81 0.74 Universidad Catolica de Valparaiso 0.56 0.43 Universidad Catolica del Maule 0.78 0.66 Universidad Catolica del Norte -0.13 0.21 Universidad Fed.Santa Maria 0.82 0.70 Metropolitana de C.Educacion 0.70 0.45 Tecnologica Metropolitana 0.43 0.15 Universidad de Antofagasta 0.90 0.82 Universidad de Atacama -0.01 -0.29 Universidad de Chile 0.49 0.19 Universidad de Concepcion 0.68 0.78 Universidad de Los Lagos 0.52 0.89 Universidad de Magallanes 0.15 0.19 Universidad de Playa Ancha -0.34 0.59 Universidad de Santiago -0.03 -0.12 Universidad de Talca 0.92 0.94 Universidad de Tarapaca 0.87 0.90 Universidad de Valparaiso 0.99 0.89 Universidad de la Frontera 0.77 -0.90 Universidad de La Serena 0.73 0.75 Universidad del Bio Bio 0.03 0.26 Universidad C.de Concepcion 0.61 0.89
Next table present the mean statistics of the different variables in our database, some of them used in our econometric model (see Appendix 2 for a description of the variables presented here).
35 Table 9 Variables used in regressions Variable Obs Mean Std. Dev. Min Max
Total Incomes (Thousand of 2006 Chilean $) 175 42100000 52400000 8798365 286000000 Operational Incomes (Thousand of 2006 Chilean 175 23400000 36600000 2000185 192000000 $) Sales of Services (Thousand of 2006 Chilean $) 175 9222008 23900000 93844 118000000 Student Fees (Thousand of 2006 Chilean $) 175 14000000 13400000 1733961 72300000 Fiscal Funds (Thousand of 2006 Chilean $) 175 7926839 7880535 719768 33400000 Direct Fiscal Contributions (AFD) (Thousand of 175 4965948 5725187 461829 29000000 2006 Chilean $) Indirect Fiscal Contribution (AFI) (Thousand of 175 672805 989082 10442 4427568 2006 Chilean $) Other Incomes (Thousand of 2006 Chilean $) 175 2393023 3141856 0 18900000 Share of Operational incomess over Total 175 0.49 0.13 0.17 0.81 Incomes Share of Student Fees over Total Income 175 0.38 0.13 0.12 0.73 Share of Sales of Services over Total Income 175 0.10 0.12 0.01 0.48 Share Direct Fiscal Contributions (AFD) over 175 0.13 0.06 0.04 0.31 Total Income Share Indirect Fiscal Contribution (AFI) over 175 0.01 0.01 0.00 0.04 Total Income Professors Salaries over Total Expenses 175 0.22 0.08 0.00 0.42 Undergraduate Students Completing Grades 175 1032.50 811.43 260 3183 Postgraduate Students Completing Grades 147 94.37 155.33 1 699 Total Professors (JCE) 175 483.94 389.19 130 1761 Number of Fondecyts (Competitive Research 125 15.19 25.26 0 110 Proyects) Total Competitve Funds of Fondecyts (Real) 150 418567.10 975444.50 0 6548074 (Thousand of 2006 Chilean $) Number of ISI Publications 125 119.32 228.50 0 1143 Number of SCIELO Publications 137 23.07 43.83 0 291 Total Publications 125 142.62 269.56 0 1286 Total Undergraduate Students 175 9132.10 5360.26 2425 24533 Accreditation Quality Index 175 16.20 12.42 0.00 42.60 Professors Quality Index (El Mercurio) 175 54.13 7.78 43.00 74.70 Research Quality Index (El Mercurio) 175 55.95 12.14 44.70 90.50 Students Quality Index (El Mercurio) 175 54.25 11.94 43.40 89.70 Quality Index (El Mercurio) 175 5.35 0.54 4.44 6.73 Quality Index (Que Pasa) 112 5.19 0.49 4.75 6.32 Students over Total Professors (JCE) 175 20.88 5.85 9.71 48.40 Students over Total Professors (JCE) Index 175 5.17 1.45 2.10 10.30 Share of competitive funds over total income 150 0.01 0.01 0.00 0.04 (shcf ) Shares of student fees over total income (shsf ) 175 0.38 0.13 0.12 0.73 Total Income over Total Professors (JCE) 175 77435.31 26667.30 28074.87 162407.70 (Thousand of 2006 Chilean $)
36 We will estimate two log-linear equations, one to estimate teaching outputs and the other to estimate research output. We will follow the model presented at Crespi 2006 for the UK knowledge production function. The following equation represents the model:
1 2 it it 1 it 2 qkkxy +++++= εγββλα itiit (4.3.1)
where y is the logarithm (natural log) of university output (publications or students completing undergraduate traning), k 1 is the share of competitive research funding in total university resources, k 2 is the share of student fees in total university resources, x is the logarithm (natural log) of size, measured by the number of total full time professors (JCE), and q is a quality index, some of them time varying, some of them fixed over time.
Coefficients β1 and β 2 represents the elasticities of university output with respect to university resources. Diminishing (constant or increasing) returns predominate at the university level when β <1 (β≥1). This specification allows the effect of competitive funding and fees to differ from government support funding. The effect of competitive funding is larger than the effect of government funding when
β β 21 >− 0)( , similarly the effect of student fees is larger when β − β 21 < 0)( . In other words if
β β 21 >− 0)( there is a premium for this source of funding, while if β − β 21 < 0)( there is a discount.
A final digression relates to the error terms. While εit is the standard un-correlated random shock, there could be other unobserved, mainly fixed factors, at university level that might affect both research production and research inputs, for example, research ability or quality. Universities with higher than average research ability are expected to produce more research outputs and also to attract more research grants, ignoring this assumption would induce a spurious correlation between research incomes and results, overestimating the impact of competitive funding on research production. One way to control for this problem is to estimate the model using fixed effects. However, this could be a very demanding solution given our short panel and measurement problems. Another approach is to approximate the unobservables by using observables as a proxy variable, as we will do it in this case with the inclusion of the variable q . The dataset collected provides different set of quality related scores described in Table 9 and Appendix 2. Although there are other ways of including this observable, using a polynomial function of some degree for example, we use a log transformation (natural logarithm).
We used five different quality indexes, some of the constructed using our dataset and other taken from external sources, to compare the results. Accreditation Index and Professors Quality Index from El Mercurio are constructed using quantitative data, while Quality Index from El Mercurio and Que Pasa are constructed using surveys. Results of these estimations are presented in Table 10 and 12.
However, these estimates do not consider the possibility of the relationship between resource availability and performance indicators resulting from a lagged association between the variables. Literature on this topic suggests that significant lag effects are normally present in regressions of this sort (G.Crespi, 2006). Although our data base is not long enough to allow us to test a four or five year lag effect being present affecting the relationship between resources and performance (as the literature suggests to be the case) we have tested the hypothesis of university behaviour in t(0) being affected by resource availability in t(-1). Results of these estimations are presented in Table 11 and 13. All the equations were estimated using OLS.
37
Table 10 Results of the Publications Model Dependent Variable: Number of Publications (Ln) Professors Accreditation Quality Index Quality Index Quality Index Variable Quality Index (El Mercurio) (El Mercurio) (Que Pasa)
JCR size of faculty (ln) 1.371*** 1.857*** 1.741*** 1.338*** (0.190) (0.193) (0.130) (0.233) Share of competitive funds over total 49.446*** 73.987*** 43.985*** 53.597*** income (shcf ) (10.992) (16.282) (14.965) (13.249) Shares of student fees over total 0.163 0.365 1.142** -1.305** income (shsf ) (0.500) (0.510) (0.502) (0.629) Quality (ln) 0.654*** -0.367 2.988*** 2.880** (0.152) (0.926) (0.794) (1.133) Constant -6.485*** -7.392*** -19.334*** -8.614*** (0.946) (1.127) (2.864) (1.447)
Obs 119 124 124 80 R-Squared 0.821 0.759 0.791 0.838 Robust standard errors in parentheses * significant at 10%; ** significant at 5%; *** significant at 1%
Table 11 Results of the Publications Model with Lags Dependent Variable: Number of Publications (Ln) Professors Accreditation Quality Index Quality Index Quality Index Variable Quality Index (El Mercurio) (El Mercurio) (Que Pasa)
JCR size of faculty (ln) (1 year lag) 1.337*** 1.789*** 1.710*** 1.341*** (0.199) (0.206) (0.144) (0.237) Share of competitive funds over total 53.991*** 83.313*** 48.357** 52.201*** income (shcf ) (1 year lag) (15.043) (22.739) (19.484) (16.899) Shares of student fees over total 0.178 0.351 1.246** -1.452** income (shsf ) (1 year lag) (0.518) (0.513) (0.486) (0.665) Quality (ln) 0.680*** -0.057 3.139*** 2.913*** (0.151) (0.908) (0.765) (1.088) Constant -6.295*** -7.435*** -19.731*** -8.525*** (1.003) (1.209) (2.764) (1.491)
Obs 119 124 124 80 R-Squared 0.814 0.746 0.781 0.823 Robust standard errors in parentheses * significant at 10%; ** significant at 5%; *** significant at 1%
38 Table 12 Results of the Students Model Dependent Variable: Students completing Undergraduate Degrees (Ln) Professors Accreditation Quality Index Quality Index Quality Index Variable Quality Index (El Mercurio) (El Mercurio) (Que Pasa)
JCR size of faculty (ln) 0.967*** 1.134*** 1.053*** 0.944*** (0.059) (0.060) (0.045) (0.079) Share of competitive funds over total -10.741** -10.454** -6.634 -6.446 income (shcf ) (4.633) (4.706) (5.208) (5.222) Shares of student fees over total 0.079 0.106 -0.003 0.174 income (shsf ) (0.322) (0.295) (0.299) (0.447) Quality (ln) 0.089* -0.841** -0.352 0.906* (0.053) (0.356) (0.257) (0.532) Constant 0.741** 1.370*** 1.865* -0.407 (0.318) (0.427) (1.009) (0.753)
Obs 144 150 150 96 R-Squared 0.751 0.745 0.739 0.814 Robust standard errors in parentheses * significant at 10%; ** significant at 5%; *** significant at 1%
Table 13 Results of the Students Model with Lags Dependent Variable: Students completing Undergraduate Degrees (Ln) Professors Accreditation Quality Index Quality Index Quality Index Variable Quality Index (El Mercurio) (El Mercurio) (Que Pasa)
JCR size of faculty (ln) (1 year lag) 0.949*** 1.111*** 1.028*** 0.890*** (0.062) (0.063) (0.047) (0.084) Share of competitive funds over total -7.943 -7.397 -2.010 -3.753 income (shcf ) (1 year lag) (5.205) (5.139) (6.009) (5.999) Shares of student fees over total 0.273 0.332 0.172 0.383 income (shsf ) (1 year lag) (0.313) (0.291) (0.284) (0.501) Quality (ln) 0.073 -0.903** -0.482 1.293** (0.058) (0.402) (0.295) (0.604) Constant 0.838*** 1.551*** 2.488** -0.776 (0.317) (0.476) (1.147) (0.854)
Obs 120 125 125 80 R-Squared 0.730 0.731 0.726 0.816 Robust standard errors in parentheses * significant at 10%; ** significant at 5%; *** significant at 1%
39
Above results suggest that:
(I) There seems to be evidence of increasing returns to research in Chile. This could explains why only few players (no more than five universities) dominate research peformance and that probably any attempt to “democratize” research allocations in this context could lead to a serious loss in research efficiency. (II) There are almost constant returns to scale with regards to teaching activities. In other words, in regards to teaching small universities are as competitive as large universities. (III) There is a strong premiun from competitive funding for research activities but not for teaching activities, while there is no premium from teaching funds in research, suggesting that specialized funding for research matters for research productivity and this can not be replaced by cross-subsiding from student fees. (IV) Quality matters for research activities, however results for teaching model are mixed and not conclusive regarding sign and significance. It is not clear wich quality index could be better to use. However, from estimations of the research model, it could be possible to say that indexes made using quantitative data perfoms relatively better than survey indexes. (V) Results suggest evidence in favor of a two tier system for current Chilean universities, were there are few research (with centres of excelence) oriented universities co-evolving with a large set of more teaching (practial) oriented universities.
The above estimates confirm the a priori hypothesis that research-oriented universities within CRUCH constitute a league of their own, attaining patterns of behaviour which are significantly different from those of the CRUCH as a whole. This is indeed an interesting finding worth exploring further. This we do in our next section.
4.4. A further look at research-oriented CRUCH universities.
Although the number of Chilean universities carrying out research activities is gradually expanding, the largest three public universities – U.de Chile, The Catholic University and the University of Concepcion – clearly dominate the scene when we consider the number of ICI and Scielo publications, and the number of R&D projects under execution.
A recent publication by the Chilean Academy of Science indicates that out of 9156 papers published by CRUCH universities over the period 2001-2004, 34% came from the University of Chile, 21% from the Catholic University, 13% from the University of Concepcion – i.e. these three universities taken together absorb 68% of the research output emerging from Chilean public universities between 2001 and 2004. They are being followed, at a long distance, by University of Santiago (7%), Universidad Austral (5%), Universidad Federico Santa Maria (3%), and a list of even smaller players among which we find the Catholic University of Valparaiso, Universidad Catolica del Norte, Universidad de Valparaiso and others.
40 Table 14 Publications 2001-2004. University Publications
University of Chile 3123 Catholic University of Chile 1975 University of Concepción 1237 University of Santiago 725 Austral University 527 Federico Santa María University 293 Catholic University of Valparaíso 247 Católica del Norte University 226 University of La Frontera 216 University of Valparaíso 131 University of Antofagasta 139 University of Talca 99 University Andrés Bello 82 University of Los Lagos 66 University of La Serena 70 Source: Chilean Academy of Science,”Análísis y Proyecciones de la Ciencia Chilena” 2005
Considering the first five universities in Table 14 we now look at the relationship between size and performance, measured in terms of number of students, JCE faculty members, projects and publications. The results are presented in Tables 15, 16 and 17.
Table 15 Profile of the five biggest research-oriented universities in Chile, 2006 Catholic University University University Austral Indicator Univ. of of of Average of Chile University Chile Concepción Santiago Students Numbers a 28,549 21,374 21,500 18,671 10,790 20,177 High scores (High school grades) b (%) 15.1 15.8 15.7 14.3 10.7 14.3 High scores (PSU score) b (%) 16.7 17.4 10.9 11.9 6.5 12.7 Graduates c (%) 13.4 16.8 12.4 17.5 10.8 14.2 PhD conferred d 85 56 44 25 15 45 Faculty Numbers e 3,589 2,615 1,466 1,983 948 2,120 Fulltime f (%) 49.1 62.8 81.0 42.0 69.8 60.9 PhDs g (%) 20.5 50.0 31.4 16.1 23.5 28.3 Fulltime PhDs h (%) 71.2 79.8 96.5 76.6 95.5 83.9 Research Projects i 384 280 134 108 55 192.2 Publications (ISI+SCIELO) j 3,244 2,233 1350 625 600 1,121 SOURCES: (a), (c), (d), (e), (f), (g) and (h) (data for 2006) from CRUCH (2006); (b) Departamento de Medición, Registro y Evaluación (DEMRE), Universidad de Chile (2006), for the class entering university in 2006. High scores are students with more than 600 points out of 800 in the selection test.; (i) and (j) El Mercurio (2006)
41
Table 16 Graduations, R&D projects and publications per JCE faculty. Five biggest research-oriented Chilean public universities. University of Catholic University of University of Universidad Chile University Concepción Santiago Austral Students per JCE 16.21 13.02 18.10 22.44 16.30 faculty Publications per JCE 1.84 1.36 1.14 0.75 0.91 faculty Research projects per 0.22 0.17 0.11 0.13 0.08 JCE faculty
Table 17 2007 FONDECYT and FONDEF awards (CP billions) Institution FONDECYT FONDEF Total
CRUCH universities (first twelve) University of Chile 7.2 1.9 9.1 Catholic University of Chile 4.8 1.4 6.2 University of Concepción 2.5 1.8 4.3 Universidad Austral 1.5 0.7 2.2 University of Santiago 1.6 0.4 2.0 Catholic University of Valparaíso 0.9 0.3 1.2 Católica del Norte University 0.6 0.5 1.1 Federico Santa Maria University 0.6 0.4 1.0 University of Los Lagos 0.1 0.8 1.0 Arturo Prat University 0.1 0.9 1.0 University of La Frontera 0.4 0.3 0.7 University of Antofagasta 0.3 0.4 0.7
Non-CRUCH universities (first two) Andrés Bello University 0.4 0.1 0.5 Universidad del Desarollo 0.1 0.0 0.2
Source: CONICYT
We notice that the lion share of the R&D efforts performed by Chilean public universities is done by the five larger research oriented CRUCH universities, i.e. University of Chile, Catholic University, Universidad de Concepcion, Universidad de Santiago and Universidad Austral. We also notice that there is a slight indication of diminishing returns underlying the numbers hereby examined.
Having stated the above; however, we also notice that a number of smaller players is gradually joining the league of R&D performing universities. Although this appears to be yet a very incipient 42 fenomena, the evidence indicates that UTalca, Federico Santa Maria, Universidad Catolica de Valparaiso, within the CRUCH group, and Andres Bello, Universidad del Desarrollo, Adolfo Ibañez and Diego Portales, among privately-owned universities, belong in this second ´tier´ of R&D- performing Chilean universities. Looking further into this topic we have found evidence indicating that some of the newly arriving members of the R&D club have erected ´in house´ R&D facilities in recent years – such as it is the case with the University of Talca which we examine in Section 5 – while other R&D performing CRUCH universities have joined the R&D league by subcontracting out research activities to external firms and professionals. This second entry strategy to the R&D league seems to reflect a short term maximization behavior intended to capture available fiscal resources for R&D activities without firmly committing resources from the university to the building of a costly ´in house´ R&D infrastructure. The two strategies for entering the field of R&D seem to reflect quite different long term attitudes as far as developing and accumulating technological capabilities within the organization. This clearly constitutes an interesting finding deserving further future investigation.
We now close the present section with a final overview on market structure and performance.
4.5. A final overview: two dominant players and a fringe of (increasingly sophisticated) smaller competitors, fighting for market share.
Universities operate in highly competitive markets attempting in various different ways to expand ther market share. This they do on the basis of product differentiation efforts of various sorts, enrolling more students, expanding the mix of academic disciplines they impart instruction, or do research, upon, opening up new branch campuses, and more. They use advertising expenses, gifts, and grants to attract students, much as producers of ordinary commodities do in conventional markets for goods and services. They do operate in imperfectly competitive scenarios in which information asymmetries, a frail regulatory environment and lack of government control over quality of services and accreditation routines leave ample room for monopolist practices. Said practices end up negatively affecting consumers of university services and will have to be redressed in the forthcoming future.
Chilean university markets exhibit an overwhelming presence of two major players – U.of Chile and the Catholic University – which strongly dominate the scene differentiating themselves from the rest of CRUCH Universities. Their dominance is, however, increasingly challenged in present days by a fringe of rapidly growing smaller universities, both from CRUCH as well as from the private sector. Although the University of Chile and the Catholic University face an increasingly tough competition for students as well as for research funds from smaller universities they still belong in a class of their own, benchmarking their activities with ´world-class´ universities operating in more developed countries. They act as with reference to a universal ´metha production function´ for university activities, using number of publications in reputed journals, international citations and more to grade their professorial staff and teaching services vis a vis international standards.7 In spite of the above, however, their market position is increasingly challenged by smaller public and private sector universities, which continue to open new campuses across Chile and also invading (as of recently) their own turf, i.e the metropolitan area of Santiago.
7 It is interesting to notice that both the U.of Chile and the Catholic University think of themselves as part of the rank of the best 500 universities world-wide, published yearly by the New York Times. No other Chilean public university sees itself as part of such league so far. Even though they compete fiercely for students and research funds in local markets they do not benchmark their operation by international indicators. 43
In actual fact a rapid proliferation of branch campuses has allowed many of the smaller public universities (and also quite a few private ones) to gain market share in recent times. This explains why the long term competitive situation of the dominant players has become increasingly complex in recent years. They no longer monopolize the scene and find that they have gradually to adapt to a taugher competitive environment.
As in any other area of economic activity in which imperfect competition prevails, location, product differentiation and economies of scale play a significant role explaining changes in firm strategy, structure and performance. In effect, we notice that falling unit cost of imparting education services tend to prevail in the initial stages of university expansion, as the professorial staff and the physical infrastructure appear as quite flexible and capable of absorbing more students and R&D projects. It is important to understand, however, that there is a limit to such flexibility and that a ´saturation´ effect eventually sets in once the infrastructure and professorial staff reach a high level of utilization. University professors can work long hours, but they can not be asked to put with more than 50-52 hours work per week. R&D facilities might be shared by different researchers, but crowding out eventually appears affecting productivity. At that point further growth seems to require the appointment of new professors, the opening up of new teaching and research facilities, expanding the number of disciplines and programs being taught at the university, and so forth. These options involve complex changes in university structure and strategy. New branch campuses demand investment in buildings and infrastructure, (even if some universities have managed in recent years to get away with temporarily renting available commercial office space). As more students are admitted and new branch campuses are open in more distant regions, universities might be forced to enrol students with lower PSU examination scores, and this normally involves higher unit production costs, as remedial courses have to be taught . Thus, we could expect unit production cost to show discontinuous jumps as output capacity is expanded. Hiring less expensive, or part time, professors might appear as an option, but that might have unknown implications in terms of quality of services. On the other hand, the regulatory environment in which universities operate strongly conditions the strategy universities decide to follow.. If accreditation requirements are not strong enough, universities might opt for catering for more students without strongly caring for quality. In such circumstances they might choose a ´low market entry´ strategy which will allow them to maximize revenue in the short run, permitting them to generate the cash flow for further growth in the future. Situations of this sort have not been uncommon in Chile in recent years.. Given that university markets are plagues with information asymmetries and sunk costs affect student mobility across universities, short term profit maximization strategies have made possible a rapid rate of expansion of poor quality service providers. We notice that market outcome is the complex result of economic and institutional forces that co-evolve and retrofit on each other in the course of time.
44 5. ALTERNATIVE PATTERNS OF UNIVERSITY BEHAVIOUR.8
We have so far described in broad terms the evolution of Chilean university markets as they proceeded from a State-led to a market-led regime over the past three decades. Our findings show that, on the one hand, Chile has attained a great deal of success in erecting a vibrant and competitive tertiary education sector, even if many important questions of access, affordability, quality and accountability have remained unresolved and demand being tackled in the forthcoming future. On the other hand, our findings also show the major differnces do in fact prevail in resource availability and patterns of micro behaviour among the 25 universities at CRUCH. Two dominant firms – the University of Chile and the Catholic University - and a fringe of smaller (but increasingly sophisticated) competitors appear as sustaining a fiercy confrontation for market share with the two leaders, in a rapidly expanding university industry. In the process of competing for market share universities confront different opportunities and constraints and are compelled to define a short and long term strategy in order to deal with the trade off between ´mission´ and resource availability. In this section we examin in further detail the forces conditioning the strategy different CRUCH universities have followed in recent years.
For the purpose of developing a simple ´stylized´ description of differences in university behaviour consider the case of university X that at a certain point in time is compelled to decide how best to deal with short and long term aspects of resource availability and of ´mission´ (quality of service) fulfilment. X starts from a given set of ´initial conditions´ - physical infrastructure, professorial staff, experimental facilities, prestige, market share – that determine its market opportunities and set up a limit as to what it can do in order to maximize its rate of market penetration and the quest for quality.
In a very schematic way we can describe the scenario as follows:
Figure 13 “Mission” and “Revenue” Alternative University Strategies
High “Mission” A C (Quality of → Service) Low B D
Low High ↑ “Revenue” (Resource Availability)
C appears to be the optimal scenario in which long term revenue and quality of services (´mission´) could be jointly achieved. Not each and every other university can place itself in such a
8 Many of the ideas to be presented in this section resulted from a very fruitful interaction with Prof.Carlos Caceres from the University of Chile. We kindly acknowledge his generosity in letting us use freely the result of our conversations. 45 priviledged situation. ´History counts´ and what we call here ´initial conditions´ play a significant role in determining both the departing point and the dynamic path along which any given university can travel through time.
We can think of three possible dynamic trajectories university X could follow. Afeter examining them we shall try to relate such trajectories to ´real life´ scenarios within CRUCH.
Prestige, quality of services, access to alternative sources of revenue, degree of capacity utilization of the initial physical infrastructure and professorial staff, and more will strongly condition the flexibility of the departing point and the extent to which market opportunities could be exploited by X in order jointly to maximize revenue and ´mission´.
Expanding the number of vacancies offered to the market, opening up new branch campuses or enlarging the variety of disciplines and programs in which education services are being imparted would, ceteris paribus, increase cash flow in terms of student fees. A frail regulatory environment, weak accreditation requirements, lack of an adequate supply of qualified teaching staff or the fact that X finds itself operating in a ´buyers market´, i.e. a rapidly growing demand for educational services, might explain why X might opt for expanding supply without paying, in the short run, a great deal of attention to quality of services, i.e.´mission´.
Under the above circumstances we could expect X to proceed from B to D, that is, to follow a short term strategy aiming at expanding revenue, but not necessarily aswering to the quest for ´mission´. X could also opt for an intermediate strategy erecting a ´world class´ medical centre or a research facility in one particular sphere of science and technology (biotechnology, for example) and try to cross- subsidize such facility with the proceeds of student fees and tuirtions. In order to maximize its short term business model it might opt for low cost, low quality, undergraduate teaching Examples of this sort have been notoriously present in Chile in recent years, with universities such as Los Lagos, A.Pratt and others deploying a market strategy of this sort.
On the other hand, ´initial conditions´ vary significntly across CRUCH universities providing in some cases more flexibility than in others in the quest for ´mission´and quality. Also notorious in this respect is the case of University of Concepcion, were earmarked access to resources from the lottery provide significant degrees of freedom in the management of its market strategy. Also of UTalca, which has managed significantly to expand its access to fiscal block grants.
Using the ratio of number of undergraduate students per JCE faculty as a ´proxy´ for quality and the ratio of total university revenue to JCE faculty as an indication of university revenue we have located CRUCH universities with higher levels of publications in the A to D space represented in Figure 13 (see Appendix 3 for a matrix with the 25 CRUCH universities). The result was as follows:
46 Figure 14
Strategy Matrix, CRUCH's Universities, Year 2000
Revenue/Teachers JCE 0.0
5.0 A C
10.0 Pontificia U. Católica U. de Concepción U. de Chile 15.0 U. A ustral U. de Valparaíso U. de Los Lagos 20.0 U. de la Frontera U. de Santiago B U. de Talca D 25.0 U. Católica de Valparaíso U. Católic a del Norte U. Arturo Prat 30.0 Undergraduate Students/Teachers JCE Students/Teachers Undergraduate 35.0 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000
47 Figure 15
Strategy Matrix, CRUCH's Universities, Year 2006
Revenue/Teachers JCE 0.0
5.0 A C
10.0 Pontificia U. Católica
U. de Chile 15.0 U. A ustral U. de la Frontera U. de Los Lagos U. de Concepción 20.0 U. de Santiago U. A rturo Prat B U. Católica del Norte D 25.0 U. de Talca U. Católica de Valparaíso U. de Valparaíso
30.0 Undergraduate Students/Teachers JCE 35.0 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000
According to expectations Catholic University and University of Chile again seem to be outliers in the exercise.
Both figures confirm the outstanding position the Catholic University and the University of Chile have within the group of CRUCH universities. But they also show that other CRUCH universities have been clearly ´climbing the ladder´ in recent years. Among those we find Universidad de Los Lagos, Universidad A.Pratt, the Catholic University of Valaparaiso and others.
Variance of each variable for 2000 and 2006 are presented in Table 18.
Table 18 Variable Year Obs Mean Std. Dev. Min Max
Undergaduate students 2000 25 20.65 5.43 10.72 29.23 over Full time Faculty 2006 25 20.58 6.33 11.32 41.27
Total Income over Full 2000 25 64447.50 22705.60 28074.87 119540.20 time Faculty 2006 25 91995.57 29049.94 54787.23 162407.70
48 Also, the elasticity between the two variables is 0.146, taken from a simple OLS regression between those variables.
Available empirical evidence tells us that as far as ´climbing the ladder´ is concerned there are different ways of doing it. There is the Los Lagos-A.Pratt way of combining ´low market entry´ and cross subsidization between undergraduate student fees and a ´world class´ area of excellence (a research centre in biotechnology, for example), but there is also the University of Concepcion way of ´climbing the ladder´ through earmarked funds coming from the lottery, or the UTalca way of doing it, via an expanding share in fiscal block grants (UTalca has managed to move from 1% to 5% sharing in AFD which constitutes a sizable increase in fiscal resources). In other words, there probably are many r ways for travelling from B to D to A. In an increasingly competitive market environment each individual university can be thought of as setting its own long term market behaviour strategy aiming at maximizing ´mission´ and resource availability. In the short run such a strategy might involve a complex cross subsidization mechanism in which the current generation of undergraduate students supports, through tuition and fees, the gradual construction of a better research and teaching infrastructure for the future. This appears as an interesting, though not necessarily a priori expected, mechanism through which market forces have managed to handle the trade off between resource availability and ´mission´ through an inter-generation cross subsidization mechanism.
6. CASE STUDIES .
Much of the rich institutional details underlying the long term development of individual Chilean universities is actually lost when we conduct research on the basis of cross section data describing aspects of structure and behaviour, as we have done in previous sections of this paper. Individual case studies provide yet a different research methodology capable of throwing further light upon the relationship between performance and the institutional and historical conditioning factors that actually explain why specific universities did what they did in particular circumstances. We now examine as from this perspective two individual cases, the University of Talca and the Catholic University of Valparaiso. These two studies serve to illuminate the diversity of institutional forces conditioning the development path of different universities across time.
6.1. THE UNIVERSITY OF TALCA. 9
The University of Talca is located some 200 miles away from Santiago, and caters for 6.600 undergraduate students and about 1.000 graduates. It was created in October 1981when the University of Chile was subdivided in 16 different regional universities. The merger of the Talca campus of the University of Chile and the Universidad Tecnica del Estado (Technical State University) gave birth to the University of Talca. Said merger involved bringing together two quite different ´cultures´ of university organization and functioning, plus a considerable e reduction in faculty. Of the original 23 careers being imparted – mostly specialized in Pedagogic disciplines – only 12 remained in operation. The above restructuring effort was initiated by the military delegate Dr.F.Gonzalves, a local lawyer.
9 This section has been prepared in close collaboration with Profesor Yerko Moreno, Professor of Viticultura and Director of the Centro Tecnologico de la vid y el vino (Centre for Technology in vineyards and wine) of the University of Talca. 49 Talca was at that point exclusively a teaching university with no research being undertaken in its premises.
It was in April 1991 that Dr.Alvaro Rojas was appointed President of the university. Many observers attribute to Dr.Rojas the major upgrading process the University of Talca experimented over the past decade. A strategic plan was elaborated in 1996, setting up a long term strategic ´vision´ defining a future which involved graduate teaching, research activities and a much stronger inception into the regional scientific and technological requirements. Such strategic vision envisaged the idea of expanding the university participation in the various different public sector sources of funds – Fondef, Fondecyt, Mecesup, AFD – an activity which was successfully undertaken by Dr.Rojas and his collaborators. R&D activities expanded, the numer of imparted disciplines was considerably enlarged, the number of PhD-awarded faculty members increased considerably and other indicators of university performance such as publications, square meters of labs and experimental facilities, etc. all show a dramatic rate of expansion. Between 1991 and 2001 the university managed to get approval for 31 R&D projects from Conicyt, ranking 8ª across the country as far as capturing competitive R&D funding. As Table 19 below shows UTalca has done very well in expanding the number of undergraduate and graduate students being served, incorporating new full time doctorates to its faculty.
Its modern campus features 86.000 square meters of teaching pavilions, libraries, sport facilities, labs and so forth. It subdivides in 7 different Faculties: 1.Forestry Studies, 2.Agricultural Sciences, 3. Business Administration, 4. Health Studies, 5. Law, 6. Engineering and 7. Psychology.
The University has opened up other campuses at Curico and Santiago and Santa Cruz, under the expectation of capturing further sources of revenue. These campuses specialize in quite different disciplines. While the Santiago Campus deals exclusively with graduate students in Business Administration and Law, the Santa Cruz campus is a Professional Institute providing training to future technicians specializing in wine production, tourism and fruits, and the Curico campus specializes in Mechanical, Industrial, Civil and Electronic Engineering . Financing for the Curico expansion was partially obtained from MECESUP. The University most recent expansion is in Colchagua, where it has opened a small operation – 100 students – in joint venture with private firms which have financially contributed to the venture.
The University also created five institutes imparting post graduate teaching and carrying out research in: 1. Vegetal Biology and Biotechnologies, 2.Mathematics and Physics, 3.Education, 4.Natural Resource Chemistry and, 5. Humanistic Studies.
It is accredited for five years in: 1.Institutional Management, 2.Undergraduate Teaching, 3.Research Activities, 4.Infrastructure and Equipment. It is currently applying for accreditation from a US accreditation agency.
On the whole the University of Talca caters for 5.500 students, 10% approximately graduate students carrying research in various different disciplines. .
The University of Talca is divides into Schools, which impart teaching, both for undergraduate and graduates, and Departments, which are involved in research. Besides Schools and Departments the University also has five research Centres, as follows: 1. Centro de Pomaceas, 2. Centro de la Vid y el Vino, 3. Centro de Riego y Agricultura, 4.Centro de Suelos y Cultivos y, 5. Centro Forestal El Alamo.
50 Each of these Centres caters for a particular constituency as far as research and technical assistance is concerned. These Centres also carry out graduate teaching in parallel with their research activities.
These Centres pay 30% overhead to the university for R&D funding they manage to attain from CONICYT, CORFO, or other sources of competitive funding. Also, from consultancy services they provide to firms in the region.
In May 2006 Alvaro Rojas was succeeded as Dean of the University by Juan A.Rock, its present Rector. Dr.Rock has been a long standing member of the academic staff managing UTalca so it can be thought that the transition does in fact involve a major change in the University long term development strategy. It seems clear however, that some things are changing and that much of the aura of success historically underlying the expansion of UTalca seems to be wearing out.
As Table 19 indicates students entering the University of Talca attain an average PSU score of 592, which is in the lower part of the global distribution. The better-off segments of the Talca students migrate to Santiago, leaving the University of Talca mostly with the sons and daughters of the local middle class which stay over for tertiary education in the region. This being so Talca University has in recent years felt that it had to introduce what is currently being called ´Education by competencies´ which involves a fair amount of remedial upgrading of individual students global ´culture´ and understanding of the world, besides its technical and scientific training itself. Clearly such a decision involves higher education costs and more effort from the part of academic faculty. Together with the above, long term diminishing returns to the initial set of circumstances surrounding Dr.Rojas Presidency of UTalca seem to account for the apparent low spirits surrounding the long term development process of this university. After a highly successful period of expansion UTalca seems to be hitting the limits of it physical infrastructure and potential response from its faculty. A major overhaul seems currently to be required if the long term academic success is to be sustained.
In parallel to the above UTalca has developed a successful research infrastructure graqdually gaining predicament among local industries. Particularly successful in this respect have been the Centre for Research on Pomaceas (Apples) and the Centre for Research on Wine and Vineries.
1. Centre for Research on Pomaceas (Apples).
The Centre for Research on Pomaceas (apples) employs close to 20 people including professors, laboratory technicians, graduate students and administrative personnel. It has an annual operative budget of around ½ a million U$S dollars which mostly derives from research grants from Conicyt, Corfo and other public agencies. The Talca region has been successfully expanding its competitive inception in world markets for fresh fruits (apples in particular) and wine. The Centre has been an important agent in such process supplying local farmers with technology and production organization advice and technical assistance to production. The technologically more aware section of the local farmers’ community has in recent years developed a strong appetite for an expanding association with the Centre and is increasingly willing financially to contribute to its long term expansion and substainability. In spite of the above, however, it is still UTalca that provides much of the resources needed by the Centre to expand its physical infrastructure and research facilities, with the private sector contribution still representing a minor contributor to the Centre´s budget.
51 2. Centre for Research on Wine and Vineries.
The Centre for Research on Wine and vineries offers technological services to the wine industry of the 6th and 8th Region in Chile. It also performs R&D activities for viñards in the 4th Region needing better to understand sources of productivity growth in their ´terroir´. This is a field in which a great deal of ´tacit´ knowledge is used at the individual firm level, and UTalca has gradually developed a great deal of market prestige advising wine making companies on how to optimize their business model.
The Centre has some 17 people – 5 agronomists, 5 technicians, an accountant, various administrative employees – and an annual budget in the region of U$S 600 thousand. The Director estimates that the Centre covers close to 70% of its expenses, but it is clear that the University still provides free access to much of the research infrastructure.
The Centre has 4 research students working towards their master and doctorates. They are financed out of external contracts with business firms in the region..
The following Table provides a summarized account of main indicators for the University of Talca.
Table 19 Data from Universidad de Talca, 1990 - 2006 1990 1991 1996 2000 2006
Undergraduate Carreers 7 7 12 12 24 Magister Programs n/a n/a 1 7 19 Doctorate Programs n/a n/a n/a 2 3 Faculty with Post 43 84 107 166 278 Doctorate degree Faculty with Doctorate 16 24 48 83 128 New Graduates 610 598 885 905 1.281 Total number of registered 2.328 2.495 3.769 4.491 6.125 students Registered Opost graduate n/a n/a 14 109 553 students Books being published n/a n/a 21 33 56 ISI Publications 6 6 17 19 73 SciELO Publications n/a n/a 4 39 Fondecyt projects awarded 2 4 3 6 6 Fondecyt projects in 6 8 11 14 26 execution Fondef projects awarded n/a 1 2 5 0 Fondef proyects in n/a 1 2 4 3 execution FIA projects awarded n/a n/a 1 1 2 FIA projects in execution n/a n/a 1 5 6 M2 of infrastructure n/a 22.389 33.342 52.831 83.000 JCE 159 158 155 228 236
52 An interesting aspect to be taken into consideration relates to the fact that the average PSU score attained by Talca University students is rather low – 592 points - in comparison with that attained by the students at the Catholic University – 692 points - and the University of Chile – 688 - suggesting that the the average Talca student demands considerable ´remedial´ upgrading in order to level up its competencies. That has forced the University to undertake a major effort into what is called ´education for competencies´ particularly during the initial two years of university training. This clearly involves a higher cost of teaching per student and considerable more effort from the part of the faculty to cover up systemic cultural gaps in their student population.
A ´Life cycle´ account of the evolution of University of Talca.
We close the present case study on the University of Talca presenting a ´stylized´ description of the long term evolution of this university using the language of ´industry life-cycle´ theory developed by Utterback, Abertnathy, Hirsch, R.Vernon and others in the 1980´s. Such theory identifies the sequence of ´stages´ an industry follows from inception to maturity and the influence and co-evolution of economic, institutional and technological forces that retrofit on each other during the process of growth.. We find that the language of industry life cycle theory allows us to examine the long term evolution of UTalca as proceeding from its original inception – resulting from the merger of the Talca campus of the University of Chile, and the local branch of the Universidad Tecnica del Estado – to subsequent stages of scientific, technological and institutional maturity which gradually obtained during the 1990´s and eventually resulted in the sophisticated tertiary education organization UTalca appears to be at present.
Looking back at the 1980´s we notice that the UTalca constitutes an offspring of the major institutional shock that followed the military take over of Gral.Pinochet in Chile in 1973. Faithful to its ideological and military background the government proceeded to de-regulate university markets and to introduce major changes in the institutional model the university industry was to operate thereafter. As part of this process the various regional campuses of the University of Chile were severed from headquarters in Santiago, in an attempt to reduce their national ´voice´ and political exposure, and to merge with local educational organizations.
In the case of Talca Dr.F.Gonzalez, a local lawyer, was appointed as military delegate and given the responsibility of conducting the institutional re-structuring process. Said process involved a drastic reduction in personnel and in the number of careers the new university was to impart instruction upon. Besides the reduction in size, the merger with Universidad Tecnica del Estado involved mixing two quite different educational organizations, making the transition period a complex stage in the long term development process of UTalca.
Many observers believe that the initial re-structuring process carried out by Dr.Gonzalez paved the way for the rather long and successful period Dr.Alvaro Rojas was to serve as President of UTalca since early 1991 up to May 2006. It is during his administration that the university attained a rapid process of expansion and career diversification, increasing its scientific and technological sophistication and gradually improving its position within the ranking of CRUCH universities. Starting from a 1% share of AFD funds in the early 1990´s UTalca has managed to expand its participation in AFD to around 5% in more recent years, an indication of Dr.Rojas´s determination to gain status and participation within CRUCH. Throughout this period the increasing availability of fiscal funding allowed the erection of a modern teaching and research infrastructure, with the professorial staff expanding quite significantly both in terms of numbers and quality (PhD holding new professors). The rate of ISI and Scielo
53 publications and the access to CONICYT, CORFO and MECESUP funding clearly reflect the above... New careers were created turning UTalca an increasingly sophisticated teaching and research organization.
It is to be noted, however, that different signs of fatigue and of diminishing returns have been emerging in recent years. After a rather long period of rapid growth and success UTalca seems to have reached some sort of ´plateau´ or ´saturation´ level, which opens up many new questions related to the long term sustainability of teaching and research organizations of this sort. Both the physical infrastructure – for teaching as well as for research - and the professorial staff, seem to be now close to full capacity utilization, suggesting that some sort of discontinuity has been reached in which growth can not simply be attained by marginal expansions. New investment in infrastructure and the expansion of the professorial staff might be required at present if a new phase of expansion is to be attained. But that opens major questions concerning sources of funds, ´mission´ and long term strategy which need to be answered anew. Although UTalca has managed to develop a high quality ´in house´ R&D infrastructure reflecting the needs of the regional production structure - heavily specialized in natural resource processing industries - it can scarcely be thought that future growth could come from private sector funds and R&D contracts in any significant way. Access to fiscal block grants still needs to be regarded as the major conditioning force of future growth. R&D capabilities will no doubt have to be expanded at a rapid pace in the forthcoming future if the local R&D infrastructure it is to keep pace with the rapid rate of growth of the local production structure and with its expanding penetration in world markets for fruits, wine and paper products, but it can not be assumed that the expansion of the R&D infrastructure could be attained exclusively on the basis of private funding. International experience suggests that university R&D units can achieve anywhere in the region of 30-40% self-financing from external contracts, but major public sector resources are normally needed as well. Having already attested as to the major role the university can play in the local production environment UTalca now needs further to receive public support if it is to grow at the same rhythm as the local economy to which it is associated. Doing so might require furthering its scientific and technological capabilities in the frontiers of knowledge of fields of basic sciences related to the sustainable exploitation of natural resources, such as – molecular biology, desertification studies, biotechnologies, plant and human immunology, water management and more. The private sector can not be expected strongly to contribute to the needed funding for these activities.
We conclude by stating that UTalca seems to have evolved through three quite different stages of development over the past three decades. First, the inception stage. Second a stage of rapid growth involving career diversification, quality improvement both in professorial staff and in physical infrastructure, and an increasing degree of adaptation to the local social and production environment of the Talca region. Third, and quite recently, the entry into a ´plateau´ in which diminishing returns have emerged and future growth seems to be demanding a major set of strategic decisions both from the university itself, and also from national educational authorities concerned with the long term ´mission´ of this university. UTalca has reached a ceiling of full capacity utilization of its resources. As a producer of public goods we can not expect it fully to be able to finance from its own resources any future expansion. On the other hand, its business model seems to have been successful and the likelihood of significantly expanding its access to fiscal resources needs to be seriously considered by local authorities.
6.2. THE CATHOLIC UNIVERSITY OF VALPARAISO.
54
While the case of UTalca describes the evolution and structural transformation of a regional university which has gradually become more responsive to the needs – both in terms of teaching and research requirements– of the region in which it is located (Talca), the study of the long term process of expansion of the Catholic University of Valparaiso highlights a fairly different scenario – that of a metropolitan University – in which ´mission´, structure and strategy appear to be conditioned both by early historical circumstances – its strong initial connection with the Catholic Church and the Catholic community of the Valparaiso Region, the impact the Company of Jesus in the 1950´s and early 1960´s, the crucial influence of the University Reform movement and of the Theology of Liberation in the 1960´s and, in more recent times, the military intervention in the 1970´s and 1980´s and the transition to a strongly competitive market regime, at the present. UCV appears as a clear case in which ´initial conditions´ and ´path dependency´ on the one hand, and the nature of ´localized´ competition, on the other, significantly affect strategy, structure and long term behaviour. .
The UCV was created in 1925 as a result of financial resources made available by Isabel Caces de Brown, member of a wealthy traditional Valparaiso family, strongly incepted in the local Catholic community. It started to operate in 1928, stating its ´mission´ as that of ´helping families of scarce resources to expand the cultural background of their children within a Christian education´ (Rodolfo Urbina Burgos, 2004). The project was originally conceived by Father Ruben Castro Rojas who brought to the attention of two prominent families of the Valparaiso area, the Ariztia and Caces families, the need for a local university in a city which had at that point close to 200 thousand inhabitants. For many years both these families acted as major supporters of UCV picking up the recurrent annual financial deficits the university generated. The main idea behind the project was that of providing technical and commercial skills to the children of an emerging local middle class which made its living from the shipping and fishing industries, the Chilean Navy, Valapariso´s docks and the Customs Offices.
Father Castro was appointed first Dean of the University by Bishop Gimpert in March 1928. The UCV featured at that point two Faculties, one teaching Applied Sciences and Mathematics, and the other Economics and Commerce.
UCV opened up with 400 students (Burgos, Op.Cit. pag.60). It also imparted night classes for unskilled workers willing to expand their training in electricity, equipment maintenance and mechanical engineering.
After a financial and political crisis in the early 1930´s, which forced Dean Castro to close the University in mid-1931, UCV re-opened under a new Dean – Father Malaquias Morales - in 1934. By 1949 UCV was structured in five different Faculties: 1. Physics and Mathematics, 2. Architecture and Urbanism, 3. Economic Sciences and Commerce, 4. Law, and 5. Pedagogic disciplines, including the training of professors in Language, Philosophy, Mathematics and physics. UCV had at that point some 1.500 students.
The resignation of Father Morales as Dean in 1951 gave the opportunity to the Vatican authorities to ask the Comnpany of Jesus to take over the management of UCV, being father Gonzalez Forster designed as Dean in May 1951. UCV was still a very small university in which the Dean had the opportunity of daily meeting both students and faculty. During the Jesuit period UCV attained a rapid expansion in studentship and also in institutional complexity and maturity. By 1961 the number of students had grown to 2.300 and the number of Schools, had expanded from 15 – divided among 5
55 different Faculties – to 21. The professorial staff grew from 110 – 18 full time appointments – in 1951, to 426 – 68 full time appointments – in 1961. The School of Fishery and the School of Agronomy were two major creations of the 1950´s which clearly indicate the intention of Dean Forster to bring UCV closer to the needs of the local production structure.
Dean Forster left in 1961 when he was transferred by Vatican authorities to Argentina to become Dean of Colegio Maximo San Jose. According to local historians it was a major setback for UCV given the great charisma and dynamism Dean Forster exhibited during its Deanship. The ´Jesuit Period´ ended up in 1961 with UCV as a highly consolidated local university, clearly a leader in the 5th Region.
Yet another crucial aspect in the history of UCV was the creation of the Faculty of Architecture and Urbanism in the mid 1950´s. Professor Alberto Cruz from the Catholic University in Santiago decided to move to Valparaiso and he managed to take with him many of his colleagues at the Catholic University in Santiago. They created a very dynamic and influential School of Architecture in Valparaiso, which was to play a crucial role in the 1960´s when the Reform Movement became very vocal and articulated within Chilean politics. It was the School of Architecture, in association with the School of Social Sciences, and with the support of the students, that staged a long strike against Dean Arturo Zavala Rojas, the first non-ecclesiastic UCV Dean, after the so-called ´Jesuit period´. The confrontation was presented in the language of the theology of liberation which was particularly strong among CELAM priests and bishops at the time. The claims were that UCV was giving excessive attention to professional training and not to scientific and technological research, and that university affairs were run in much too restricted circles and demanded more administrative decentralization.
Both the University and the administrative offices of the Archbishop of Valparaiso were put under siege by students and professors that asked for major changes in the structure and behaviour of UCV.
Although in the 1980´s and 1990´s UCV was forced to responde to the realities of an increasingly competitive market for university services, major features of its ´old´ organizational culture and ideological commitments in favour of underpriviledged segments of the local society have prevailed and condition today its current market conduct. It presently caters for close to 13.000 undergraduate and 500 graduate students, thus attaining an average size between CRUCH universitiesi. It covers more than sixty undergraduate academic programs and operates in 8 different faculties physically located in 15 different premises. These are: 1.Sciences, 2.Agronomy, 3.Architecture, 4.Economics and Social Sciences, 5.Law, 6. Philosophy and Education, 7.Engineering and 8.Natural Resources. Much of the ´old´ organizational culture of desentralization has remained in place, making UCV to look more as a federation of independent colleges than as a unified and centralized organization. Although it has clearly expanded in size and has done rather well in competing with nearby universities such as Federico Santa Maria, or the University of Valparaiso, it continues to exhibit significant weaknesses in relation to its future potential as a strong regional base for R&D activities. Its future expansion into the Carauma campus (now under construction) and its gradual commitment to frontier research fields in the Agricultural Sciences, Biotechnologies and more will probably contribute to strengthen its regional potential, currently under heavy competitive questioning by other local universities.
7. WRAPPING UP.
56
This finl section of the paper presents in a sequential order some of the main findings of this enquiry. There is no attempt here to rank our results according to hierarchical importance or policy significance. Rather, what follows is a list of ´stylized´ features of the Chilean university sector as emerged from our study.
1. The enquiry describes the transition of the Chilean university industry from a ´State-regulated´ to a ´market-driven´ policy regime. Such transition involved the best part of three decades and many new institutions and patterns of micro behaviour developed in the course of the process.
2. Throughout these thirty years the industry attained a remarkable success as far as growth is concerned. 60 universities now operate in Chile catering for a student population of more than 600.000 students. When the transition process began – early 1980´s – Chile had less than 200.000 tertiary education students and two dozen universities catering for them.
3. The above indication of success is further stressed by the fact that it is in the lowest two quintiles of the distribution that entrance to university has been the largest. In effect, in the lowest quintile the percentage of youngsters aged 19-24 going to university has increased from 4 to 15% while in the next quintile it has done so from 8 to 21%. The average for the country is still in the region of 31% significantly below developed industrial nations where, on average, it doubles the above rate.
4. Both, a fast rate of GDP expansion – particularly so between 1984 and 1998, in which the Chilean economy grew at an average annual rate of 7% - and various different forms of credit and public subsidy account for the fast rate of expansion of the percentage of population accessing university education. The counterpart of the above is a fast rate of social upward mobility which obtained pari pasu with the expansion of a more sophisticated production structure in which many natural resource processing industries were started up and fastly moved closer to the international technological frontier. ´World-class´ manufacturing enterprises came on stream in many of these industries demanding a wide variety of highly qualified human personel.
5. The above process suffered a significant ´slow-down´ in recent years, with the economy now expanding at a much lower rate per annum – in the region of 4% - than before, and with less new manufacturing plants annually opening up in the economy. There are also signs of a reduction in the pace of upwards social mobility.
6. The Chilean university sector strongly relies on private financing. Families end up absorbing as much as 80% of the cost of sending their youngsters to university, even if there are various sort of supporting mechanisms through which credits and public grants could be attained. This probably explains why the rate of morosity is quite high, placing Chile as an outlier in international comparisons.
7. Many new universities, particularly private ones, entered the market after the university industry was de-regulated in 1981, admitting private tertiary education service providers to join the market. From 178 in 1986 they grew to around 300 in 1990, falling down to 206 in more recent years. The pattern of expansion of the industry closely reflects the conventional ´life-cycle´ path many industrial sectors have been shown to exhibit. An initial stage of very rapid expansion, followed by a ´slow-down´ period in which fewer firms enter the market and by a third stage in which market structure attains the
57 morphology of a mature oligopoly in which the rate of expansion of demand determines the rate of expansion of installed capacity.
8. Turning to quality aspects we notice that the university industry exhibits weak signs of progress. Only a small number of Chilean universities have attained accreditation in all six of the categories which demand ´peer evaluation´ for ´full accreditation, and for period of seven years, which is the maximum allowed by law. The large majority of universities – including many public ones – has only attained institutional accreditation for a few years, but has not yet made visible progress in the accreditation of the full range of disciplines and teaching and research activities in which they operate. Much remains to be done on this front if quality of services and ´peer review´ are to attain progress in the near future.
9. Total enrolment into university education is presently divided in a 40-60% proportion between public and private universities. It is the later – 35, out of 60 universities in total - which are growing much faster at present time. The 25 ´public´ universities that belong in CRUCH include 6 universities which in spite of receiving public fiscal support do in fact operate as private organizations in the sense that they do not have to respond to the Contraloria General de la Republica for their actions. This reflects a major institutional difference strongly affecting market behaviour and long term competitive strategy in both segments of the CRUCH group.
10. There is a great deal of variance among CRUCH universities in size, output mix (teaching, research and consultancy), number of disciplines in which they operate, regional diversification , quality of services, accreditation status and more. Some of them exibit a low figure of students per JCE faculty (a ´proxy´ hereby taken as an inducation of ´quality´) in the region of 13 or 14, while others double such figure and operate in the region of 30 or more students per JCE faculty.
11. Chilean university markets have become highly competitive, with universities fighting each others for students, research funds, fiscal resources and more. This they do on the basis of advertising, gifts, grants and so forth, as in any other market in the economy. It is important to notice, however, that the nature of competition in the market for education services is not really close to the ´conventional´ image we have as to what a competitive market is all about. Asymnetric information between supply and demand for education services, sunk costs affecting consumer choice, highly different ´initial entitlements´ among students reflecting income and cultural differences among different segments in society and more clearly influence market outcome. This is why the idea of an un-regulated market for education services is far from realistic. Competition among service providers is not a sufficiently strong disciplinary instrument for market governance.
12. Two large CRUCH members – The University of Chile and the Catholic University of Chile – dominate the market for education and research services. Although their market position is increasingly being eroded by a small group of public and private universities ´climbing the ladder´ as far as teaching and research is concerned, they still control much of the action on both fronts, teaching and research. This conclusion is supported by econometric results of research and teaching models presented in Section 4.3.
13. Econometric estimations of the models suggest that there are increasing returns to research in Chile. This could explains why only few players (no more than five universities) dominate research peformance and that probably any attempt to “democratize” research allocations in this context could lead to a serious loss in research efficiency. For the teaching model there are almost constant returns to
58 scale. In other words, in regards to teaching small universities are as competitive as large universities. Additionally, there is a strong premiun from competitive funding for research activities but not for teaching activities, suggesting that specialized funding for research matters for research productivity and this can not be replaced by cross-subsiding from student fees. Quality matters for research activities, however results for teaching model are mixed and not conclusive regarding sign and significance.
14. Previous results also presetn evidence in favor of a two tier system for current Chilean universities, were there are few research (with centres of excelence) oriented universities co-evolving with a large set of more teaching (practial) oriented universities, supporting our prior hypothesis.
15. Five CRUCH universities - the University of Chile, The Catholic University, University of Concepcion, Universidad de Santiago and Universidad Austral – control aroud 80% of total university expenditure in R&D activities. These five universities are the recipients of a similarly large fraction of the R&D projects annually accepted by Conicyt for support, as well as of the student grants for graduate and post graduate training.
16. A second ´tier´ of smaller universities – both public and private – is currently joining the league of R&D performing universities even if their involvement in the above is still small in absolute terms. Different strategies seem to prevail among universities in order to enter the R&D club.
17. As far as ´climbing the ladder´ is concerned we notice that different business models have emerged in recent years. ´Initial conditions´ and ´path dependency´ play a major role affecting the way in which universities deploy their efforts searching for a workable combination of ´mission´ (quality of services) and resource availability. History and traditions and ´embeddedment´ in the country´s poltical thread influence the set of opportunities and constraints each university has to deal with in the quest for quality. No doubt this is part of the explanation of why university markets in Chile show such a strong dominance of the University of Chile and of the Catholic University. They can regulate their admission policy capturing among both of them nearly 40% of the 27.500 AFI students yearly selected by their best entrance examination scores.
59
Apendix 1.
Financial Model (2000)
Government support by JCE Academic Staff 0.08
0.07
0.06
0.05
0.04
0.03 U. de Talca U. Federico Santa María U. Católica de Valparaíso 0.02 U. de Tarapacá Pontifica U. Católica 0.01
0
U. de Los Lagos Pontifica U. Católica UTEM U. de la Frontera U. de Magallanes U. Arturo Prat U. de Chile UTEM Pontifica U. Católica Other Incomes by JCE Academic Staff U. de Atacama Tuition fees by JCE Academic Staff
Pontifica U. Católica U. Arturo Prat U. Austral U. Católica de Concepción U. Católica de Temuco U. Católica de Valparaíso U. Católica del Maule U. Católica del Norte U. de Antofagasta U. de Atacama U. de Chile U. de Concepción U. de la Frontera U. de la Serena U. de Los Lagos U. de Magallanes U. de Playa Ancha de Ciencias de la Educación U. de Santiago U. de Talca U. de Tarapacá U. de Valparaíso U. del Bio-Bio U. Federico Santa María U. Metropolitana de Ciencias de la Educación U. Tecnológica Metropolitana Promedio
60 Financial Model (2006)
Government support by JCE Academic Staff 0.12
0.1
0.08
0.06
0.04 U. Católica de Valparaíso U. de Talca U. de Tarapacá 0.02 U. Federico Santa María
0
U. de Tarapacá U. Católica de Valparaíso U. de la Frontera U. de Talca U. de Valparaíso U. de Los Lagos U. de Los Lagos UTEM U. Arturo Prat U. de Chile Pontifica U. Católica
U. de Magallanes Other Incomes by JCE Academic Staff Tuition fees by JCE Academic Staff
Pontifica U. Católica U. Arturo Prat U. Austral U. Católica de Concepción U. Católica de Temuco U. Católica de Valparaíso U. Católica del Maule U. Católica del Norte U. de Antofagasta U. de Atacama U. de Chile U. de Concepción U. de la Frontera U. de la Serena U. de Los Lagos U. de Magallanes U. de Playa Ancha de Ciencias de la Educación U. de Santiago U. de Talca U. de Tarapacá U. de Valparaíso U. del Bio-Bio U. Federico Santa María U. Metropolitana de Ciencias de la Educación U. Tecnológica Metropolitana Promedio
61 Real Model (2002) Undergraduates completing degree by JCE Academic staff (divided by 10) 0.6
0.5
0.4 U. del Bio-Bio
0.3 U. de Santiago U. de Concepción U. Federico Santa María 0.2
0.1
U. de Concepción 0 U. Federico Santa María U. Austral U. de Talca U. de la Serena U. de Santiago U. Federico Santa María U. Austral
U. de Concepción Pontifica U. Católica
U. de Chile U. de Chile
Services Income by JCE Academic staff Pontifica U. Católica Publications by JCE Academic staff
Pontifica U. Católica U. Arturo Prat U. Austral U. Católica de Concepción U. Católica de Temuco U. Católica de Valparaíso U. Católica del Maule U. Católica del Norte U. de Antofagasta U. de Atacama U. de Chile U. de Concepción U. de la Frontera U. de la Serena U. de Los Lagos U. de Magallanes U. de Playa Ancha de Ciencias de la Educación U. de Santiago U. de Talca U. de Tarapacá U. de Valparaíso U. del Bio-Bio U. Federico Santa María U. Metropolitana de Ciencias de la Educación U. Tecnológica Metropolitana Promedio
62 Real Model (2006) Undergraduates completing degree by JCE Academic staff (divided by 10) 0.8
0.7
0.6
0.5
UTEM 0.4 U. de Tarapacá U. de Santiago 0.3
0.2
0.1
U. Austral 0 U. Federico Santa María U. de Concepción U. Católica del Norte U. Católica del Norte U. Austral U. Federico Santa María U. de Concepción U. de Talca Pontifica U. Católica
U. de Chile U. de Chile
Pontifica U. Católica Services Income by JCE Academic staff Publications by JCE Academic staff
Pontifica U. Católica U. Arturo Prat U. Austral U. Católica de Concepción U. Católica de Temuco U. Católica de Valparaíso U. Católica del Maule U. Católica del Norte U. de Antofagasta U. de Atacama U. de Chile U. de Concepción U. de la Frontera U. de la Serena U. de Los Lagos U. de Magallanes U. de Playa Ancha de Ciencias de la Educación U. de Santiago U. de Talca U. de Tarapacá U. de Valparaíso U. del Bio-Bio U. Federico Santa María U. Metropolitana de Ciencias de la Educación U. Tecnológica Metropolitana Promedio
63
Apendix 2
Variable Definition
Total Incomes including Operational Incomes, Sale of Assets, Transfers, Total Incomes Debts, Fiscal Funds and Other Incomes from Balance Sheets. Real values of 2006. Thousand of Chilean pesos Incomes, including Sale of goods and services, Student Fees and Investment Operational Incomes Revenues from Balance Sheets. Real values of 2006. Thousand of Chilean pesos Incomes from Sale of goods and services from Balance Sheets. Real values of Sales of Services 2006. Thousand of Chilean pesos Incomes from Student Fees from Balance Sheets. Real values of 2006. Student Fees Thousand of Chilean pesos Incomes from Fiscal Funds (AFD, AFI, Other Fiscal Transfers) from Balance Fiscal Funds Sheets. Real values of 2006. Thousand of Chilean pesos Incomes from Direct Fiscal Contributions (AFD) from Balance Sheets. Real Direct Fiscal Contributions (AFD) values of 2006. Thousand of Chilean pesos Incomes from Indirect Fiscal Contribution (AFI) from Balance Sheets. Real Indirect Fiscal Contribution (AFI) values of 2006. Thousand of Chilean pesos Other Incomes from Balance Sheets. Real values of 2006. Thousand of Other Incomes Chilean pesos Share of Operational incomess over Total Operational incomes/Total Incomes, in percentage Incomes Share of Student Fees over Total Income Student Fees/Total Income, in percentage Share of Sales of Services over Total Sales of Services/Total Income, in percentage Income Share Direct Fiscal Contributions (AFD) AFD/Total Income, in percentage over Total Income Share Indirect Fiscal Contribution (AFI) AFI/ Total Income, in percentage over Total Income Professors Salaries (part of the Personnel Expenditures from Balance Sheets. Real values of 2006. Thousand of Chilean pesos)/ Total Expenses (from Professors Salaries over Total Expenses Balance Sheets. Real values of 2006. Thousand of Chilean pesos) , in percentage Undergraduate Students Completing Number of Students completing their Undergraduate Studies. Grades Postgraduate Students Completing Grades Number of Students completing their Postgraduate Studies. Total Professors (JCE) Number of Professors at the equivalence of full time professors Number of Fondecyts (Competitive Number of Fondecyt proyects obtained, which are Selected by the National Research Proyects) Comition of Science and Technology (CONICYT) on a competitive basis. Total Funds from Fondecyt proyects obtained, which are Selected by the Total Competitve Funds of Fondecyts National Comition of Science and Technology (CONICYT) on a competitive (Real) basis. Real values of 2006. Thousand of Chilean pesos. Number of ISI Publications Number of ISI publications by year Number of SCIELO Publications Number of SCIELO publications by year Total Publications Number of total publications (ISI+SCIELO) by year Total Undergraduate Students Númber of total undergraduate students Index constructed by the authors: Number of accredited areas times years of Accreditation Quality Index accreditation Ranking made by the newspaper “El Mercurio”, based on the postgraduates Professors Quality Index (El Mercurio) hold by professors (that last 4 o more years) and the number of students by full time professors. From 1 to 100.
64 Ranking made by the newspaper “El Mercurio”, based on the number of Research Quality Index (El Mercurio) Fondecyt Proyects, ISI publications and SCIELO publications by full time professors. From 1 to 100. Ranking made by the newspaper “El Mercurio”, based on the number of Students Quality Index (El Mercurio) students with AFI as a percentage of new students. From 1 to 100. Index made by the newspaper “El Mercurio”, based on a survey to several Quality Index (El Mercurio) outstanding figures (from the labour market, human resources agencies and public figures, among others). From 1 to 7. Index made by the magazine “Que Pasa”, based on a survey to several Quality Index (Que Pasa) outstanding figures (from the labour market, human resources agencies and public figures, among others). From 1 to 7. Students over Total Professors (JCE) Nuber of Undergraduate Students/ Total Professors (JCE) Share of competitive funds over total Total Competitve Funds of Fondecyts (Real)/Total Income income (shcf ) Shares of student fees over total income Student Fees/ Total Income (shsf ) Total Income over Total Professors (JCE) Total Income/ Total Professors (JCE)
65 Apendix 3
Strategy Matrix, CRUCH's Universities, Year 2000
Revenue/Teachers JCE 0
5 A C
10 U. Católica del Maule Pontifica U. Católica U. de Concepción U. de Chile 15 U. A us tral U. de Valparaíso U. Católica de Temuco U. de Antofagasta U. de Los Lagos U. de Atacama U. Católica deConcepción 20 UMCE U. de la Frontera U. de Magallanes U. del Bio-Bio U. de Santiago B U. de Talca D 25 U. Católica de Valparaíso U. de la Serena U. Católica del Norte U. de Tarapacá U. Federico Santa María UPLA UTEM U. A rturo Prat 30 Undergraduate Students/Teachers JCE 35 0 10000 20000 30000 40000 50000 60000 70000 80000 90000
66 Strategy Matrix, CRUCH's Universities, Year 2006
Revenue/Teachers JCE 0
5 A C 10 Pontifica U. Católica U. de Magallanes U. de Chile 15 U. A us tral U. de la Frontera U. de Antofagasta U. Católica de Temuco UMCE U. de Los Lagos U. de Atacama U. de ConcepciónU. Católica deConcepción 20 U. Católica del Maule U. Federico Santa María UPLA U. del Bio-Bio U. de Santiago U. A rturo Prat U. Católica del Norte 25 U. Católica de Valparaíso U. de Valparaíso U. de Talca B U. de Tarapacá D 30 U. de la Serena
35
40 UTEM Undergraduate Students/Teachers JCE 45 0 20000 40000 60000 80000 100000 120000 140000
67 BIBLIOGRAPHY
Adams, J. (1990) Fundamental stocks of knowledge and productivity growth. Journal of Political Economy, 98 (4), 673-701.
Coelli, T.J. (1996) Assessing the performance of Australian universities, using data envelopment analysis . Memo, University of New England, Centre for efficiency and productivity analisys.
Larry L.Leslie,Ronald Oaxaca and Gary Rhoades. Technology transfer and academic capitalism.In (S.Slaughter: Academic Capitalism: Politics, policies and the entrepreneurial university. John Hopkins University Press, Baltimore, MD 1997.
Geuma A and B.Martin. University research evaluation and funding. An international comparison. Minerva, 2003, (41)
Crespi G. and A.Geuna . The productiuvity of science. SEWP 133, SPRU, Sussex University, 2004
G.Crespi , The UK knowledge production function. Mimeo, Chapter 9
J.Adams J.Roger Clemmons, The growing alloctive inefficiency of the US higher education sector. NBER, Working paper 12683, November 2006 .
A.Geuna, The changing rational for European university reseach funding: are there negative unintended consequences. Journal of Economic Studies, September 2001.
J.Ryan, The relationship between institutional expenditure and degree attainment at baccalaureate colleges. Research in Higher Education, Vol 45, March 2004.
J.Adams and Z.Griliches, Research productivity in a system of universities. Working Paper 5833, NBER, November 1996.
J.Katz and R.Spence, Chile: Universities and the national innovation system. An initial scoping study. Mimeo, IDRC and the University of Chile, 2008.
J.Babul. Presupuesto para actividades de formacion de cientificos y proyectos FONDECYT. Mimeo, Santiago
J.J.Brunner Mercados Universitarios, instrumentaciones y seis tesis en conclusion. Proyecto Fondecyt 1050138, Universidad A.Ibañez, Mimeo, Santiago, 2008.
J.J.Brunner et. al. Guiar al mercado. Informe sobre la educacion superior en Chile. Mimeo, Santiago 2005.
J.J.Benavente. Antecedentes para el diseño de una politica tecnologica nacional. Informe tecnico preparado para la Comision de Hacienda del Senado, Republica de Chile, Mimeo, Santiago, 2004
68 Consejo Nacional de Innovacion, Hacia una estrategia nacional de innovación para la competitividad. Vols I y II. Santiago 2007 y 2008.
C.Contreras,G.Edwards y A.Mizala, La productividad cientifica en Economia y Administracion en Chile. Un analisis comparativo. Cuadernos de Economia, Noviembre 2004.
R.Nelson and R.Mazzoleni, Public research institutions and economic catch up. Mimeo, Columbia University, 2007
R.Nelson, What makes an economy productive and progressive. What are the needed institutions?. Mimeo, Columbia University, October 2007.
N.Rosemberg, Schumpeter and the endogeneity of technology. The Graz Schumpeter Lectures, Rutledge NY 2000.
J.Sutz and R.Arocena, Latin American Universities, from an original revolution to an uncertain transition. Higher Education, 2005.
J.E.Allende et.al Analisis y proyecciones de la Ciencia Chilena. Academia Chilena de Ciencias, Consejo de Sociedades Cientificas de Chile, Santiago, 2006.
MECESUP, Tertiary education quality improvement program. OECD/World Bank, Mimeo, Santiago 2008.
El Mercurio, Panorama General de las mejores universidades del pais. www.emol.com
W.Garcia-Fontes and I.Pereira: Patents under Business-science research partnerships. Mimeo, Universidad Autonoma de Barcelona, May 2007.
A.Wothington, Efficiency, technology and productivity change in australian universities. 1998- 2003. University of Wollongong, School of Accounting and Finance.Mimeo, 2004.
A.Bernasconi, Does the affiliation of universities to external organizations foster Diversity in private higher education ?. Chile in comparative perspective. Higher Education, 2006. 303-342.
A.Bernasconi, Organizational diversity and Chilean higher education. Faculty regimes in private and public universities. Doctoral Dissertation, Boston University, 2003.
------
69