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Higher Education, Public Good
and Markets

This book critically examines some of the major trends in the devel-
opment of higher education. It demonstrates how in the context of
liberalisation, globalisation and marketisation, the crisis in higher edu-
cation has assumed different dimensions in all advanced and emerging
societies. The author shows how the state tends to slowly withdraw
from the responsibility of higher education, including in the arena
of policymaking, or simply adopts a policy of laissez-faire (of non-
involvement) which helps in the rapid unbridled growth of private
sector in higher education. The notion of higher education as a public
good is under serious contestation in current times. The book argues
for the need to resurrect the compelling nature of higher education
along with its several implications for public policy and planning,
while providing a broad portrayal of global developments, compara-
tive perspectives and key lessons.
The volume will be of interest to scholars and researchers of education,
political science, public policy and administration, governance, develop-
ment studies and economics, and to those working as policymakers and
in higher education sectors and think tanks as well as NGOs.

Jandhyala B. G. Tilak, an eminent economist of education and for-

mer Vice Chancellor, National University of Educational Planning and
Administration, New Delhi is currently Distinguished Professor at the
Council for Social Development, New Delhi, India. He has authored/
edited more than 12 books and around 300 research articles in ref-
ereed journals. In recognition of his research, he received the Swami
Pranavananda Saraswati UGC Award, Malcolm Adiseshiah Award,
Dewang Mehta Award, and Inspirational Teacher of the Year Award.
He has served as Visiting Professor at the University of Virginia in
the US, Hiroshima University in Japan, and Sri Sathya Sai Institute of
Higher Learning in Prasanthi Nilayam, India; Consultant at the World
Bank; and President of the Comparative Education Society of India.
He also served as the editor of Journal of Educational Planning and
Administration.

‘Jandhyala B. G. Tilak is India’s most prominent economist of higher

education. In this volume, he not only cogently discusses key economic
issues, but also focuses on broader higher education themes. Higher
education has become a key arena for public policy debate – and the
topic of considerable controversy. Tilak’s thoughtful and often data-
driven insights are an important contribution to the discussion.’
Philip G. Altbach, Research Professor
and Founding Director, Center for International
Higher Education, Boston College, USA

‘Having followed the research contributions of Professor Jandhyala

B. G. Tilak over two decades, I am glad to see some of his seminal
publications appearing as a book. He has been one of the eminent edu-
cationists to advocate higher education as a “public good” at a time
when there are forces against this concept. His unique contributions
on financing higher education mainly linking with issues of access and
affordability and on the concept of University are well known.’
M. Anandakrishnan, Former Director,
Indian Institute of Technology, Madras, and Chairman,
Indian Institute of Technology, Kanpur, India

‘Professor Jandhyala B. G. Tilak is the world’s leading scholar of Indian

higher education and we all benefit from his clear-minded writings on
the core issues that shape higher education everywhere: higher edu-
cation and socio-economic development; the role of states, planning
and markets; objectives of public and private good; and problems of
privatisation and globalisation. This beautifully written volume will
bring his work, which is powered by a deep commitment to equality,
universal educability and democracy, to a still larger audience and help
ensure its lasting impact.’
Simon Marginson, Professor of International
Higher Education, University College London, UK

‘A must-read collection of readings on the political economy of higher

education by a true scholar in the field.’
George Psacharopoulos, Visiting Professor of Economics,
University of Athens, Greece, and formerly with the
London School of Economics and the World Bank
Higher Education, Public
Good and Markets

Jandhyala B. G. Tilak
First published 2018
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an
informa business
© 2018 Jandhyala B. G. Tilak
The right of Jandhyala B. G. Tilak to be identified as author
of this work has been asserted by him in accordance with
sections 77 and 78 of the Copyright, Designs and Patents Act
1988.
All rights reserved. No part of this book may be reprinted
or reproduced or utilised in any form or by any electronic,
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identification and explanation without intent to infringe.
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Dedicated to the memory of my parents
Jandhyala Lalita Kunjali & Venkateswara Sastry
Contents

List of figuresix
List of tablesx
Prefacexiii
Acknowledgementsxv

Introduction 1

1 Higher education: a public good or a commodity

for trade? Commitment to higher education or
commitment of higher education to trade 10

2 Higher education between the state and the market 35

3 Are we marching towards laissez-faireism in

higher education development? 55

4 Lessons from cost recovery in education 70

5 Financing of higher education: traditional versus

modern approaches 100

6 The privatisation of higher education 119

7 Current trends in the private sector in higher

education in Asia 141

8 Higher education in the BRIC countries:

comparative patterns and policies 168
viii Contents
9 Economics of internationalisation of higher
education185

10 Social control on higher education 225

11 Higher education and development in Asia 237

12 Universities: an endangered species? 260

Index285
Figures

3.1 Gross enrolment ratio in higher education and

achievement in technology 65
7.1 Private sector squeezes public space 147
9.1 Growth in global foreign student enrolment (in millions) 192
9.2 Regional distribution of students studying
abroad (%), 2008 194
9.3 Foreign students as percentage of host country
enrolments, 2004 and 2008 197
9.4 OECD countries with highest net inflow rate of
students (%), 2008 203
10.1 Clark’s triangle of academic coordination 229
11.1 Index of growth in higher education in Asia 238
11.2 Higher education attainment in Asia and the Pacific,
1990s244
11.3 Gross enrolment ratio in higher education and
achievement in technology 246
Tables

1.1 Decline in public expenditure on higher education per

student (% of GDP per capita) 19
2.1 Trends towards private higher education 46
2.2 Emerging trends in policy, planning and financing of
higher education 48
2.3 Conflicting interests of the State and markets in higher
education49
3.1 A chronology of some important events in higher
education development in the recent period 57
3.2 Gross enrolment ratio in tertiary education (%),
1980–200058
3.3 Trends towards private higher education 59
3.4 Emerging trends in policy, planning and financing of
higher education in developing countries 60
3.5 Distribution of enrolments in tertiary education
(ICED5A), 2000 61
3.6 Returns to higher education (%) 63
3.7 Regression estimates of higher education on economic
development in Asia 63
3.8 Regression estimates of higher education on
achievement of technology in Asia 64
4.1 Distribution of education subsidies by income group (%) 74
4.2 Declining private returns to higher education in
selected countries (%) 76
4.3 Distribution of enrolments in education in India, by
household expenditure quintiles, 1986–87 78
4.4 Share of fees in costs of higher education in selected
countries (%) 80
4.5 The contribution of students/families (fees) to the
recurrent budgets of selected African universities 81
 Tables xi
4.6 Private and social costs of higher education in India
and the United States (%) 81
4.7 Share of household expenditure in total national
expenditure on education in selected countries 82
4.8 Student loan programmes and government losses in
selected countries 84
4.9 Efficiency of alternative measures of cost recovery 89
6.1 Privatisation trends in selected countries (percentage
of enrolments in private higher education) 120
6.2 Enrolments in public and private higher
education (%) 120
6.3 Percentages of public and private sectors in higher
education institutions 121
6.4 Expenditure per student in higher education
(private/public)123
6.5 Percentage rates of return to private versus public
higher education 127
6.6 Percentage of specialisation of private and public
sectors in higher education in Latin America 129
6.7 Fees as percentage of total expenditure on higher
education135
7.1 Number of private higher education institutions in
Asian countries 146
7.2 Distribution of enrolments in tertiary education (type
A and research), 2002 148
7.3 Non-US private universities in the world university
rankings (2004) 152
7.4 Public and private universities in Asia in the world
university rankings, 2004 153
7.5 Enrolments in private higher education and overall
gross enrolment ratio in higher education 156
7.6 Conflicting interests of the State and private sector in
higher education and research 158
7A.1 Different data sources and different estimates on
enrolments in private higher education institutions
in Asia 163
9.1 International student mobility, 2008 193
9.2 Top ten countries with foreign students, 2008 195
9.3 Benchmarks for international students in selected
countries198
9.4 Growth in international students in Malaysian higher
education198
xii Tables
9.5 Developing countries with highest outbound
numbers of students 199
9.6 EduGATS in higher education in developed and
developing countries 205
11.1 Rates of return to education in Asia (%) 239
11.2 Rates of return to higher education in Asian countries 240
11.3 Gross enrolment ratio in higher education in Asia
and the Pacific 241
11.4 Regression estimates of higher education on
economic development in Asia 242
11.5 Higher education attainment in Asia Pacific 243
11.6 Higher education (GER) and technology (TAI) 245
11.7 Regression estimates of higher education on
achievement of technology in Asia 246
11.8 Coefficients of correlation between higher education
and social development indicators 247
11.9 Share of expenditure on higher education in GNP (%) 250
11.10 Share of fees in costs of higher education in selected
countries (%) 252
12.1 Changing interests of universities in education and
research274
12.2 Emerging trends in higher education 275
Preface

Higher education around the world experienced dramatic changes

during the last quarter century or so. There have been three important
developments: recognition of the importance of higher education in
development was accompanied by discussions on alternative methods
of funding higher education, which were followed by a rapid increase
in the role of private sector in higher education. A simultaneous devel-
opment that has taken place at the global level is the entry of the
General Agreement on Trade in Services in education. As a result of
the multitude of developments, the very nature of higher education
seems to be undergoing a theatrical change – from being a public good
to an individual good which can be sold in domestic and international
markets. As a critical contribution to some of these various issues
confronting higher education today, including trends, contours, and
debates, this book, I hope, will attract the attention of the scholars as
well as policymakers dealing with higher education.
This is a collection of my own articles published in various journals
during the last couple of decades. With a dominant common under-
current theme, and being a collection of articles by the same author
over a period of time, there is some repetition in arguments and evi-
dences presented in various chapters.
Though often academic contributions seem to be one’s own, they are
often enriched by intangible contributions of a variety of actors – the
family members, the friends, the teachers, the students, the administra-
tors, the mentors, the admirers, the critics, journal editors, reviewers
and many others. There are many of their kind in my case and it is dif-
ficult for me to acknowledge by name all of them. I fondly remember
the contributions of my teachers, the generosity of my friends, experts
and critics, and the tremendous support that I received from my wife
and children throughout my work. The National Institute/University
of Educational Planning and Administration, which I served for more
xiv Preface
than three and a half decades until recently, has provided an excellent
conducive environment for my research.
I am also grateful to George Psacharopoulos, Philip Altbach,
M. Anandakrishnan and Simon Marginson, all eminent experts in
higher education, who have words of appreciation for my work, which
are reproduced as part of the blurb of the book.
I would like to thank all the publishers of my earlier research repro-
duced here, who have generously granted permission in gratis, to
reprint/reuse the material in this book.
Antara Ray Chaudhary at Routledge India, Taylor & Francis, has
taken a special initiative in bringing out this book in the present attrac-
tive form.
Acknowledgements

The original sources of articles included in this collection are men-

tioned here. The author and the publishers gratefully acknowledge the
following for granting permission in gratis to reprint the respective
articles in this volume.

Taylor & Francis/ ‘Higher Education: A Public Good or a

Routledge Commodity for Trade? Commitment to Higher
Education or Commitment of Higher Education
to Trade’, Prospects, 38(4): 449–466, 2008
‘The Privatization of Higher Education’,
Prospects: Quarterly Review of Education,
21(2): 227–239, 1991
‘Higher Education and Development’,
International Handbook of Educational
Research in the Asia-Pacific Region, 11,
Springer International Handbooks of
Education: 809–826, 2003

UNESCO ‘Higher Education between the State and the

Market’, in Guy Neave (ed.), Knowledge,
Power and Dissent: Critical Perspectives on
Higher Education and Research in Knowledge
Society, pp. 235–254 (Paris: UNESCO
Publishing, 2006)

Centre for ‘Are We Marching towards Laissez-faireism in

International Higher Education Development?’, Journal of
Cooperation, International Cooperation in Education, 8(1):
Hiroshima 153–165, 2005
University
xvi Acknowledgements

Tyrrell Burgess ‘Current Trends in Private Sector in Higher

Associates Education in Asia’, Higher Education Review,
41(2): 48–77, 2009

Rajagiri College of ‘Social Control on Higher Education’, Rajagiri

Social Sciences Journal of Social Development, 4(2): 93–105,
2008

Oxford University ‘Lessons from Cost Recovery in Education’,

Press in Christopher Colclough (ed.), Marketizing
education and health in developing countries:
miracle or mirage? pp. 63–89 (Oxford:
Clarendon Press, 1997)

Deomed Publishing Financing of Higher Education: Traditional

versus Modern Approaches Journal of Higher
Education, 2(1): 28–37, 2012

Indian School of ‘Internationalisation of Higher Education

Political Economy GATS: Illusory Promises and Daunting Threats’,
Journal of Indian School of Political Economy,
19(3): 371–418, 2007

Economic and ‘Higher Education in BRIC Countries:

Political Weekly Comparative Patterns and Policies’, Economic
and Political Weekly, 48(14): 41–47, 2013

Common Ground ‘Universities: An Endangered Species?’, Journal

Publishing of the World Universities Forum, 3(2): 109–
127, 2010
Introduction

Higher education systems, in many developing as well as developed

countries, are characterised with a continuing crisis, with overcrowd-
ing, inadequate staffing, deteriorating standards and quality, poor
physical facilities, insufficient equipment and overall public apathy.
More importantly, higher education is subject to neglect and even dis-
crimination in public policy. One of the important consequences of
public apathy has been dwindling public budgets for higher educa-
tion, adversely influencing the quality, quantum and equity, and rather
almost every dimension of higher education. The World Bank policies
that discouraged investment in higher education for a long period,
improper use of estimates of rates of return, and excessive, rather
exclusive, emphasis on Education for All (EFA) in the recent years,
adverse economic conditions in many developing countries, following
structural adjustment policies, etc., are some of the reasons for the
neglect of higher education. Besides, the view that higher education is
not important for development, certainly not for poverty reduction or
reduction in inequalities, and that it has no significant effect on eco-
nomic growth, equity, poverty and social indicators of development in
developing countries has also contributed significantly to this neglect.
It is also being assumed that the State can as well withdraw from its
responsibility of providing higher education in favour of the markets.
As these widely held assumptions influence the policymakers in their
designing of public policies, a confrontation with the assumptions is
an imperative today.
Today higher education is at crossroads. In the larger context of lib-
eralisation, globalisation and marketisation, the crisis in higher educa-
tion has assumed different dimensions and nature, different from the
earlier ‘continuing crisis’. Higher education in all societies – advanced
as well as emerging – is under severe strain. Public policies are in dis-
array, with contradictory policy statements being made. In fact, many
2 Introduction
societies are also characterised by absence of any clear coherent long-
term policy on higher education. Public apathy for higher education
has strengthened the forces of privatisation of higher education on a
large scale. The phenomenon of internationalisation of higher edu-
cation, which is not altogether new, also assumed different colours,
proportions and directions with varying implications for development
of national higher education systems. These trends got a significant
boost with the formal introduction of neo-liberal policies. With the
highly rationalised and individualised neo-liberal logic that is based
on the fundamental principle of private returns, market forces have
become very active.
From times immemorial, education has been considered as some-
thing special, as a ‘public good’, even if the term is not explicitly used.
UNESCO World Conference on Higher Education in Paris in 1999
unanimously reiterated and adopted a communiqué acknowledging
higher education as a ‘public good’ and calling on countries not to
disinvest in the sector during the global economic crisis. UNESCO
(2015) pleaded for education to be considered as a common good – ‘a
global common good’.
These assertions assume significance, as the very notion of higher
education being a public good, a least-contested view prevalent for
several decades and in fact, many centuries, is now under serious con-
test, as higher education is being increasingly viewed by many as a
commodity, as a private good, as an individual good that can be mar-
keted in the national markets and can be subjected to international
trade in global markets. Critical analyses of some of the major trends
in the development of higher education demonstrate that the state
tends to slowly withdraw from the responsibility of higher education,
including in the arena of policymaking, or simply adopting a policy of
laissez-faireism – non-intervention by state – which helps in the rapid
unbridled growth of private sector in higher education. The rapid
growth of private higher education results in loss of equity – social and
economic; increase in regional disparities; erosion in quality; loss of
important academic disciplines (in favour of marketable disciplines) of
study; change in attitudes; erosion in national, social and educational
values; public pauperisation and private enrichment; crowding-out of
the public sector and imbalanced development of higher education;
and, above all, the loss of public good nature of higher education.
Many methods of financing higher education, specially mobilising
resources from non-state sources with varying effects on equity and
efficiency in higher education, have come into vogue, though state
financing that is financing higher education out of general tax and
 Introduction 3
non-tax revenues seems to be still the best option. Given the changing
attitudes and approaches of the state to development of universities,
one may wonder whether universities are becoming an ‘endangered
species’.
This is the broad canvas within which the contribution of the book,
which covers areas spanning theoretical and conceptual issues such as
education as a public good, importance of public funding, and empiri-
cal issues on relationships between higher education and society to
current policy issues such as privatisation, cost recovery, financing,
autonomy, the changing nature of the universities, General Agree-
ment in Trade and Services (GATS) and internationalisation of higher
education, could be understood and appreciated. All these issues are
discussed from a particular perspective: public good vis-à-vis market,
which is becoming indisputably the most dominant one. The book is
based on a few selected articles published by me over the years cover-
ing many aspects of higher education. Given the common underlying
theme, repetition of some of the arguments could not be avoided. The
first chapter, which comes from a keynote speech that I gave in a meet-
ing of the Noble laureates in Barcelona in 1995, highlights the public
good character of higher education, and the last chapter, which is based
on an address I delivered in the World University Forum in Davos,
warns of the danger of ‘classical’ university becoming an endangered
species. The main argument of the book lies in stressing the need to
resurrect the public good nature of higher education, along with all its
implications for public policy and planning. It simply argues that the
role of the state in higher education development is critical and can-
not be reduced. The process of weakening of the public sector needs
to be arrested and its long cherished critical role gradually restored.
The several chapters in the book revolve around this theme. It covers
various issues confronting higher education today, including varying
trends, multiple contours, and debates and discourses.

***
The first chapter begins with a debate about whether higher education
is a public good or a commodity for trade. Conventionally, higher
education is regarded as a public good that benefits not only the indi-
viduals but also the whole society by producing a wide variety of exter-
nalities or social benefits. But of late, the chronic shortage of public
funds for higher education, the widespread introduction of neo-liberal
economic policies and globalisation in every country and in every sec-
tor, and the heralding of the international law on trade in services by
the World Treaty Organisation and the GATS all tend to question the
4 Introduction
long-cherished and well-established view of many on higher education
as a public good, and to propose and legitimise the sale and purchase
of higher education, as if it is a normal commodity meant for trade.
The very shift in perception on the nature of higher education from a
public good to a private good, a commodity that can be traded, may
have serious implications. The chapter describes the nature of the shift
taking place, from viewing higher education as a public good to a
private tradable commodity and its dangerous implications. The dis-
cussion in the first chapter sets the stage before we analyse and discuss
various critical issues in higher education, many of which are closely
related to the very concept of higher education as a public good.
The higher education system the world over is in flux, hanging
between the conflicting interests and varying powers of the state and
the market. Chapters 2 and 3 describe how policymakers in higher
education in many countries today are in a confusing state, being
confronted by growing markets on the one hand and the weakening
public sector on the other. Over the years, many developing countries
have shown indifferent attitudes towards the development of higher
education, deliberately deserted higher education and slashed budget-
ary allocations to higher education. Public policies are formulated in
favour of private higher education by many countries out of compul-
sion, and some out of conviction. Some countries have in the past
adopted policies which are strongly supportive of public sector and are
anti-private; and some intend to regulate the growth of private sector,
and policies in many countries can be described as policies of laissez-
faireism, which in effect work as pro-private. As market forces have
become very active, many tend to adopt clear policies towards mar-
ketisation of higher education. There is a rapid transition from a sys-
tem that operated on a welfare state philosophy to a market-oriented
one. The path adopted by several countries is first a cut in public fund-
ing for higher education, followed by weakening of the policy frame-
work and regulatory mechanisms, then adoption of laissez-faireism
and finally adoption of formulation of policies towards privatisation
and marketisation of higher education.
Though a major part of higher education in many countries is still
under the state sector, the growth of private sector has been alarming,
and if the trends continue, private sector may eventually altogether
displace the public sector from the scene. Laissez-faireism in many
countries, by its very nature, helps the growth of market forces. If
pro-private policies are adopted, the process would be fast, as is being
experienced in many developing countries. But since the markets in
developing countries are ‘incomplete’ and ‘imperfect’, the outcomes
 Introduction 5
are also far from perfect, and, in fact, in many cases, the market forces
produce disastrous consequences.
In Chapter 4 on cost recovery in education, I examine several argu-
ments of the ‘neo-liberal’ economists and the economists believing
in welfare state philosophy on issues relating to financing and cost
recovery in higher education. These two schools of thought present
distinct arguments in favour and against many of the cost-recovery
methods being adopted nowadays. Specifically, we also look at the
several approaches of cost recovery in education, discuss the pros and
cons of the several approaches, including their effects on equity and
efficiency, and review the experience of some of the countries in this
regard. The effects of these cost-recovery measures on the quantity,
quality and equity in higher education need to be examined for sound
policymaking. The analysis helps in discerning some valuable lessons
for educational policymakers and planners around the world faced
with difficult policy choices. All measures have certain strengths and
certain weaknesses, but on balance, one may conclude that progressive
taxation, funding education out of general tax revenues and financing
of higher education probably out of general and specific tax revenues
may still be the best options. All others are only second best solutions,
though financing through the budgetary resources for higher educa-
tion will not be the panacea for all problems being faced by higher
education. This forms a necessary condition for development.
The best option is not a new idea. Conventionally, higher educa-
tion is heavily subsidised by the state in almost all countries. This has
been justified by the recognition of education as capable of producing
externalities, as a public good (and as a quasi-public good in case of
higher education), as a merit good, as a social investment for human
development, and as a major instrument of equity, besides as a meas-
ure of quality of life in itself. The launching of neo-liberal economic
reforms in most developing and advanced countries of the world is
associated with changing perceptions on the role of higher education
and adoption of business models in setting up and running universi-
ties. Private universities, commercial universities, corporate universi-
ties and entrepreneurial universities are becoming the order of the day.
The several basic characteristic features of higher education, such as
higher education as a public good, merit good, social investment and
as a human right, are under attack. Recent evidence shows that many
universities are going in a big way with different kinds of measures of
generating resources – from student fees, through student loans and
other non-governmental sources. It is argued that the major transition
in the method of financing of higher education is taking place at a
6 Introduction
rapid pace, which is not desirable. It is often not realised how impor-
tant it is for the state to finance higher education.
Based on the degree and extent of privatisation of higher education
systems in many countries of the world, higher education can be clas-
sified into four categories – extreme or total, strong, moderate and
pseudo. There has been a gradual shift from pseudo and moderate to
the extreme form of privatisation. There are several ‘myths’ under cir-
culation, partly supported by weak and biased research on the relative
efficiency and gains of private education. For example, many consider
the public sector to be inefficient in the field of education and corre-
spondingly the market-focused private sector as efficient and therefore
desirable. It is necessary to explode this and other similar widely prev-
alent myths about private higher education, contrasting with facts.
The myths examined in Chapter 6 include superiority of private higher
education over public education with respect to internal and external
efficiency and quality; easing of financial burden of the state; ability to
respond to individual, social and market needs; philanthropic nature
of private higher education entrepreneurs; and other generally claimed
positive effects of private higher education on income distribution and
inequalities.
Among the world regions, the Asian region experienced a very high
rate of growth of private sector in higher education. Some systems
in the region could be described as predominantly private or as ones
with an extreme degree of privatisation of higher education. In fact,
all the four types of higher education could be noted in the Asian
countries. The growth in Asian countries is more in response to the
‘excess demand’ phenomenon than to the phenomenon of ‘differenti-
ated demand’. Increasing scarcity of public resources on the one hand,
and the neo-liberal environment thrust on the weak states on the other
hand, are the two most important factors that have advanced the rapid
growth of private higher education. A review of some of these recent
trends in the growth of private higher education in Asian countries
is attempted in Chapter 7 and of the BRIC (Brazil, Russia, India and
China) countries in Chapter 8. Their socio-economic and educational
effects would help in drawing important lessons for others.
Though higher education sector is undergoing reforms, there is
indeed a dilemma regarding the relative roles the public and the private
sectors have to play in the emerging scenario. However, the general
tendency of higher education reform is to embrace market princi-
ples and usher in the private sector to play a larger role in the higher
education sector. Though this approach is debatable, policymakers
in Asia, the BRIC countries and elsewhere appear to be convinced
 Introduction 7
by the neo-liberal logic. The accompanying policies – whether they
are relating to finding, or privatisation, or internationalisation, or
­massification – all stand as a testimony to this.
The approaches of the governments in Asian countries, or in the
BRIC countries and, in fact, in many other countries, have changed
considerably during the last few decades. How are the BRIC coun-
tries, the four largest low- and middle-income developing economies
(which are attracting wide attention from many all over the world –
­developing as well as developed as emerging economic powerhouses)
doing, and how is the higher education system being shaped in these
countries? There are several common features in the policies adopted by
the BRIC countries. However, there are also considerable differences in
the approaches the governments have adopted for expansion of higher
education. The approaches are strongly influenced by the ­initial condi-
tions, the social and economic histories, the political character of the
State and a variety of factors. In many cases, the adoption of market
approaches produced disastrous consequences. Quickly reviewing the
level of development of higher education in the region, and public poli-
cies, including select policies on financing higher education and privati-
sation, it underlines the need for increased public financing and warns
against excessive reliance on cost-recovery measures and privatisation
of higher education.
The empirical evidence in Asia and the Pacific countries testifies to
the strong relationship between higher education and development,
including economic growth, inequalities and human development,
invalidating the earlier circulated presumption that higher education
is not important for development. It is clear that no nation that has not
expanded reasonably well its higher education system could achieve a
high level of economic development. The importance of higher edu-
cation in promoting economic growth as well development, broadly
defined, is increasingly being realised today world over.
Internationalisation of higher education has taken different forms
and is nowadays predominantly defined in terms of, if not broadly
equated to, trade in education placing it under the purview of the GATS,
in the framework of which internationalisation takes place through
four different modes, familiarly known as (1) cross-border supply, (2)
consumption abroad, (3) commercial presence and (4) movement of
natural persons. Of all, the most dominant mode continues to be the
second one, viz., the student mobility. Though student mobility is not
new, this is also being viewed nowadays essentially as an instrument
of trade, having a great potential to generate financial resources. Other
measures such as twining, setting up offshore campuses, etc., are also
8 Introduction
being treated within the framework of international trade only. In all
this, economic gains prevail over academic considerations.
Universities by very definition are characterised by autonomy. How-
ever, rarely are they completely autonomous; they are controlled either
by the state in case of state institutions or by markets in case of private
universities. Ironically, the State which is ideally expected to play a
very significant role in the development of higher education is increas-
ingly unwilling and unable to do so; in contrast, the markets, the entry
of which into the arena of education is not welcomed by all, is very
eager to take complete control of higher education; and the rest of
the society has been a helpless onlooker only. While strongly favour-
ing autonomy, in Chapter 10 it is argued for meaningful democratic
social control on higher education. Social control is to be distinguished
from government control or control by market forces. Social control,
however, includes control by not only the State but also several other
actors. Social control on higher education has to be understood in
relation to social functions of and society’s responsibility for higher
education. Normative modes of social control or simply democratic
social control of higher education might ensure, by creating and build-
ing ‘social pressures’, that the public good nature of higher education
is resurrected.
Finally, Chapter 12 peeps into the future of the public university. To
look into the future of the university, we need to trace back and study
how the universities have been undergoing changes. Spelling out the
idea of a university, the chapter traces its historical evolution from
the ancient, medieval and even modern periods to the present day,
showing the drastic changes that are taking place in its very concept,
mission and functioning, particularly during the last quarter century
or more (see Minogue 1973; Aviram 1992; Denman 2005). One can
note universities of five generations, starting from the ancient period
to those of the new millennium. The universities of the fourth and the
fifth generations that belong to the twentieth and twenty-first centuries
have drastically changed the very concept, definition, nature, mission
and functioning – almost every aspect – of universities. The ‘critical
university’ (Loughead 2015) is vanishing and the concept of ‘public
university’ is disappearing, as the so-called public university is adopt-
ing a multitude of private aspects (Guzmán-Vawlenzuela 2016) and
private universities of various questionable types are emerging. The
need to re-establish the classical idea of the university is obvious.

***
 Introduction 9
The dozen chapters together form an attempt to provide a nuanced
critic of several trends in higher education and how they affect the
relationship of higher education with society at large. Presenting a
broad portrayal of the global developments in higher education and
its relationship with society, the book offers a critical perspective on
higher education. Often drawing from experiences of many countries,
the study provides comparative perspectives on several issues, from
which valuable lessons can be discerned for sound public policymak-
ing in higher education. I consider it a successful attempt if a message
comes from the book loudly and clearly that the case for public pro-
visioning of higher education remains strong and that it is imperative
for the state to play a dominant role in this field.

References
Guzmán-Vawlenzuela, C. (2016). Unfolding the Meaning of Public(s) in Uni-
versities. Higher Education, 71, 661–679.
Loughead, T. (2015). Critical University. Lanham, MD: Lexington Books.
UNESCO. (1999). World Conference on Higher Education. Paris.
UNESCO. (2015). Rethinking Education: Towards a Global Common Good.
Paris.
1 Higher education: A public
good or a commodity for
trade?
Commitment to higher
education or commitment of
higher education to trade*

Conventionally, education has for a long period been regarded as a

public good, producing a huge set of externalities (mainly positive
externalities), benefiting not only the individuals but also the whole
society. In case of higher education too, not only educationists but also
other social scientists and thinkers, including economists, have recog-
nised the public good nature: higher education constitutes a public
good in itself, and also it produces public goods, benefiting simultane-
ously the individuals and the larger society. This view has been almost
universally prevalent for a long period, influencing public policies on
higher education.
In recent years, however, the growth in market forces and more
importantly international law on trade in services tend to question or
simply gloss over the long-cherished, well-established view of many
that higher education is a public good and to propose and legitimise
the sale and purchase of education, as if it is a commodity meant for
trade. Higher education tends to be not regarded as a public good
or a social service, and it appears as if we have ‘lost the “public” in
higher education’ (Zemsky 2003). Even in the earlier decades, while
there were some who questioned the concept of higher education
as a public good, the heralding of the neo-liberal and globalisation
policies, and later the advent of international trade in educational
services accentuated such thinking. Public good and similar princi-
ples are viewed as too naive to be relevant in the rapidly changing,
increasingly privatised and liberalised modern context.1 The conven-
tional wisdom is becoming rapidly invaded by the strong, powerful
forces of national and international mercantilists, represented in the
World Trade Organization (WTO) and the General Agreement on
Trade and Services (GATS), the institutions that were set up out-
side the United Nations system. Higher education is seen primarily
as a private good, as a tradable commodity that can be subjected to
 Public good or commodity? 11
the vagaries of national and international markets. As Knight (1999)
summed up:

With the massification of higher education, increasing at an expo-

nential rate, there is strong interest on the part of large and small
countries to make the export of education products and services
a major part of their foreign policy. In fact, we see major shifts in
foreign policies where education was primarily seen as a devel-
opment assistance activity or cultural programme to one where
education is an export commodity.

In short, higher education is subject to severe pressures from domes-

tic and international markets. The divide between public policy and
commercial activities is at stake. In a sense, at the centre of the cur-
rent debate is a fundamental clash of values between traditional versus
modern, state versus market, national versus global, and educational
versus commercial. This article reviews the arguments on both sides:
higher education as a public good and higher education as a tradable
commodity, and argues how important it is to recognise and resurrect
the public good nature of higher education.

What is a public good?

Let us start with the basic question: what is a public good? Among the
several beautiful concepts that economists have contributed to devel-
opment studies, the concept of public good is an important one.2 What
is a public good? Economists (see Samuelson 1954; also Musgrave
1959) define public goods as those that are non-excludable and non-
rivalrous, i.e., such goods cannot be provided exclusively to some: oth-
ers cannot be excluded from consuming them; secondly, non-rivalrous
means their consumption by some does not diminish other people’s
consumption levels of the same goods. Public goods generate a large
quantum of externalities, simply known as social or public benefits.
Public goods are available to all equally; marginal utility is equal, and
the marginal cost of producing public goods is zero. They are also
collective consumption goods.3 Economists consider all public goods
that strictly satisfy all the preceding conditions as pure public goods;
alternatively, other public goods that do not necessarily fully satisfy
all the conditions are seen as semi- or quasi-public goods. Further, if
the benefits of public goods are limited geographically, they are called
local public goods (Tiebout 1956); and the public goods whose ben-
efits accrue to the whole world are called global or international public
12 Public good or commodity?
goods (Stiglitz 1999).4 By contrast, private goods are altogether differ-
ent; they do not satisfy any of these conditions.
An important implication of public goods is: production of public
goods has to be financed by the state out of general revenues, without
necessarily relying on prices or any user charges like student fees, and
markets, as individuals do not completely reveal their preferences and
will not be ready to meet the full costs. Therefore, the personal or
market provision of public goods is not feasible, and even if feasible is
inefficient.5 Even if some public goods are excludable, market mecha-
nisms cannot provide public goods efficiently and cannot ensure opti-
mum levels of production. Public goods are typically characterised by
underproduction in a market situation, because private demand would
fall severely short of socially optimal levels. Besides, public goods are
generally made accessible to all and they are not subject to competi-
tion. That the provision of such goods is subject to market failures,
and that economies of scale also operate in case of many of the public
goods, further supports their public provision. In fact, public goods
that are subject to economies of scale are better provided by the state
as a monopolist, than by many, as the economies of scale enjoyed by
the single supplier far outweigh any efficiency gains from competition.
To prevent the abuse of the monopoly power, and to ensure that any
producer surplus is returned to the society, it is only natural that it is
produced and supplied by the state. On the other hand, private goods
are not available to all and they are subject to the principles and laws
of markets.
Some view that the distinction between public and private goods
is ‘technical’ and ‘ideological’ and that classification of public goods
is not an absolute one; it depends upon government policies, mar-
ket conditions, level of development and political realities. After all,
public goods have been provided since the Middle Ages, and hence
they need to be redefined time and again in consideration of changing
political realities (Desai 2003). Sadmo (1998) argues that normative
theory serves better than the positive theory in recognising and clas-
sifying the public goods.6 The concept of public goods needs to be
interpreted, considering all aspects – the intrinsic nature of the given
good, the public goods it produces, the social purpose it serves, and
the limitations of markets or what is widely known as market failures
in the production of such goods.

Is higher education a public good?

Some argue that higher education cannot be treated as a public good, as
it does not satisfy either of the first two features, viz., non-excludability
Another random document with
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The Project Gutenberg eBook of Nobody's
Rose
 This ebook is for the use of anyone anywhere in the United
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Title: Nobody's Rose

or, The girlhood of Rose Shannon

Author: Adele E. Thompson

Illustrator: A. G. Learned

Release date: November 2, 2023 [eBook #72011]

Language: English

Original publication: Boston: Lothrop, Lee & Shepard Co, 1912

Credits: Bob Taylor and the Online Distributed Proofreading

Team at https://www.pgdp.net (This file was produced
from images generously made available by The
Internet Archive)

*** START OF THE PROJECT GUTENBERG EBOOK NOBODY'S

ROSE ***
NOBODY’S ROSE
A STORY FOR GIRLS
 BOOKS BY ADELE E.
THOMPSON.

The Brave Heart Series.

Five Volumes. Illustrated. Each
$1.25.
BETTY SELDON, PATRIOT,
A Girl’s Part in the
Revolution.

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A Story of the Ohio Frontier.

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A Story of the Old and New
Worlds.

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A Patriot Girl of the
Carolinas.

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A Story of 1812.

BECK’S FORTUNE,
A Story of School and
Seminary Life.
Illustrated by Louis Meynell.
$1.25.
NOBODY’S ROSE,
Or The Girlhood of Rose
Shannon.
 Illustrated by A. G. Learned. Price, Net
$1.00. Postpaid $1.12.

LOTHROP, LEE & SHEPARD CO.,

BOSTON.
“Now I’m Rose, I’m nobody’s Rose!”—Page 270.
 NOBODY’S ROSE
OR

The Girlhood of Rose Shannon

BY
ADELE E. THOMPSON

ILLUSTRATED BY A. G. LEARNED

BOSTON
LOTHROP, LEE & SHEPARD CO.
Copyright, 1912, by Lothrop, Lee & Shepard Co.
Published, August, 1912

All Rights Reserved

Nobody’s Rose

NORWOOD PRESS
BERWICK & SMITH CO.
NORWOOD, MASS.
U. S. A.
 CONTENTS

CHAPTER I
PAGE

How Posey Came Adrift 11

CHAPTER II
An Exposure 30
CHAPTER III
The New Home 42
CHAPTER IV
The New Life 54
CHAPTER V
The Picnic 71
CHAPTER VI
The Storm Breaks 85
CHAPTER VII
A Desperate Resolve 93
CHAPTER VIII
A New Acquaintance 108
CHAPTER IX
Two Happy Travelers 123
CHAPTER X
Ben’s Story
 135
CHAPTER XI
A Storm, and a Shelter 147
CHAPTER XII
A Parting of Ways 162
CHAPTER XIII
A Door Opens 173
CHAPTER XIV
Posey Becomes Rose 185
CHAPTER XV
At the Fifields’ 195
CHAPTER XVI
Under a Cloud 206
CHAPTER XVII
Sunshine Again 219
CHAPTER XVIII
Great-Uncle Samuel 236
CHAPTER XIX
Rose Finds a Resting-Place 247
CHAPTER XX
Paying Debts 257
CHAPTER XXI
The Box from Great-Aunt Sarah 266
 CHAPTER XXII
Quiet Days 275
CHAPTER XXIII
A Visit from an Old Friend 284
CHAPTER XXIV
And College Next 294
 ILLUSTRATIONS

“Now I’m Rose, I’m nobody’s Rose!” (Page 270) Frontispiece

FACING PAGE

Out of the door of the cabinet a white, shadowy little

32
figure had lightly floated
It was an hour that Posey never forgot 76
“When I get a farm I shall need somebody to keep the
144
house”
“Here is a clue to Rose’s family” 216
“Clear Jarvis and no mistake” 238
NOBODY’S ROSE
 CHAPTER I
HOW POSEY CAME ADRIFT

Out in the open country the day was dull and grey, with low-
hanging clouds and occasional drops of slow-falling rain, but in the
city the clouds of smoke hung still lower than those of the sky, and
the dropping soot-flakes made black the moisture gathered on the
roofs of the houses, the leaves of the trees, and the sidewalks
trodden by many feet.
It was on a city street, one where the smoke-clouds from the tall
chimneys trailed low and the soot fell in its largest flakes, that ever
and again a sound asserted itself above the beat of hurrying feet.
The sound was not loud, only a little girl sobbing softly to herself as
she shrank with her head on her arm at one side of an open
stairway; and the words that she repeated over and over to herself,
“What shall I do? Where shall I go?” were less in the nature of
questions than a lamentation. But children tearful, loudly, even
vociferously tearful, were in that vicinity so frequent that people
passed and repassed the child without giving to her thought or heed.
For the street was one more populous than select, and while the
tall red brick houses that bordered it had once aspired to something
of the aristocratic, they were now hopelessly sunken to the tenement
stage; while the neighboring region leading through the sandy open
square of the Haymarket, where loads of hay always stood awaiting
purchasers, down the long steep hill to the river, with its crowded
shipping and its border of great lumber yards, shops, and factories,
had never made pretense to anything except poverty of the most
open and unattractive kind. In summer the whole region fairly
swarmed with the overflowing inmates of the overcrowded houses.
Children were everywhere, in large part barefooted, ragged, and so
dirty that they might easily have been taken for an outgrowth of the
sandheaps in which they burrowed and buried themselves when
tired of the delights of the street. To see them there, in utter
indifference to the constant passing of heavily loaded teams
sometimes prompted the inquiry as to how many were daily killed?
But though, on occasion, they were dragged from under the very
horses’ hoofs by the untidy women whose shrill voices were so often
heard sounding from open doors and windows, few were the
accidents to either life or limb.
The not distant city market house increased the crowds, especially
at certain hours of the day, as also the street venders and itinerants
who contributed their full share to the noise and confusion. Hook-
nosed old men, with bags over their shoulders, and shrill cries of “P-
a-p-e-r r-a-g-s” abounded; the organ-grinder with his monkey was a
frequent figure, with the invariable crowd of youngsters at his heels;
the maimed and the blind, wearing placards appealing to the public
sympathy and extending tin cups for contributions, were to be found
on the corners; the scissors-grinder’s bell was a common sound, as
were the sonorous offers of “Glassputin.” Here was a man loudly and
monotonously appealing to the credulity of the public, and soliciting
patronage for his wonderful fortune-telling birds, a little company of
dingy and forlorn-looking canaries, who by the selection of sundry
envelopes were supposed to reveal the past, present, and future.
There, another man exhibited a row of plates with heavy weights
attached, and extolled the wonderful merits of his cement for
mending crockery, while the sellers of small wares, combs,
pocketbooks, letter-paper, cheap jewelry, and the like, added their
calls to the rest.
A few of the houses still retained a dingy scrap of yard, where thin
and trampled grass blades made an effort to grow, but the most part
had been built out to the street and converted into cheap
restaurants, cheap clothing shops, cheap furniture shops, and the
class of establishments that are cheap indeed, especially as regards
the character of their wares.
In such a confusion of people and sounds it is not strange that a
small girl crying to herself would attract so little attention that even
the big, fat policeman on that beat passed her a number of times
before he noticed her, and then did not stop, as he saw that she was
well dressed. At last, as she still remained crouched down in a
dejected little heap, he stopped, moved as much by the thought of a
little girl in his own home as from a sense of duty, with the inquiry,
“Here, Sis, what’s the matter with you?”
She started up at the brusque but not unkindly tone, and lifting
from her sheltering arm a round and dimpled face, with wide grey
eyes, now swollen and disfigured with tears, answered brokenly and
in a half-frightened voice, for the policeman stood to her as the terror
rather than the guardian of the law, “Oh, I don’t know what to do! I
don’t know where to go!”
“You don’t, eh? Well, it seems to me you are a pretty big girl to get
lost; where do you live?”
“I don’t live anywhere,” with a fresh sob.
“That’s rather queer, not to live anywhere,” and he looked at her a
trifle more sternly. “What’s your name, if you have any?”
“Posey Sharpe.”
“Oh, indeed,” and he glanced at the stairway before him, where a
small black sign with gilt lettering on the step just above her head
read,

“Madam Atheldena Sharpe,

“CLAIRVOYANT.”

“So that was your mother, was it, who raised all that row here last
night?”
“No, she wasn’t my mother, but I lived with her.”
“If she wasn’t, how comes it your name is the same?”
“It isn’t, really, only I’ve lived with her so long that people called me
that. She said I was her niece, but I wasn’t any relation at all.”
He looked at the sign again, “Madam Sharpe. Well,” with a chuckle
at his own witticism, “she wasn’t sharp enough to keep from being
exposed. And you were the spirit child, I suppose?”
 Posey nodded, a very dejected-looking spirit she seemed at that
moment.
“Well, when she took herself off so suddenly why didn’t you go
with her?”
“I ran up under the roof and hid, and I didn’t know till this morning
that she had gone.”
“I see; and was she so good to you, and did you think so much of
her that you are taking on this way?”
Posey hesitated a moment. “She might have been better, and she
might have been worse,” she answered with a candor of simplicity.
“But I haven’t anybody else to live with, and I didn’t think she’d use
me so.”
“I see; it was rather rough.” There was sympathy in his tone, and
even in the way he tapped his knee with his polished club.
“And,” continued Posey, “this morning the man who owns the
place came and he was awfully mad and cross. He said Madam
Sharpe owed him for rent, and that she had hurt the reputation of the
building, and he told me to put my things in my trunk, and he shoved
it out into the hall and told me to clear out, and he locked the door so
I couldn’t go in again. And I haven’t had any dinner, nor I haven’t a
cent of money, nor anywhere to go, and I don’t know what’ll become
of me,” and she wrung her hands with another burst of tears.
Here was the cause of her misery—the semblance of home, care,
and protection, poor though it was, had been suddenly stricken
away, leaving her a helpless, solitary estray, a bit of flotsam at the
mercy of the world’s buffeting currents. Nor was her misery softened
by even the dubious bliss of ignorance that most children enjoy as to
the sterner realities of life, for already in her eleven years she had
learned only too well what poverty implies, and how sad a thing it is
to be friendless and homeless.
Poor little Posey, with her soft eyes, dimpled mouth, and rosy face,
she seemed made for sunshine and caresses. Scant indeed,
however, had been her measure of either. Her earliest remembrance
had been of a home of two rooms in a tenement, a poor place, from