Higher education deregulation

Higher education deregulation

By Freddy Kirana

JAKARTA (JP): A wave of public institution deregulations has
swept the world both in developing and developed countries.

The recent announcement about the government's plan to revoke
its subsidies on state universities is one of the latest trends.

The assumption underlying the initiatives has always been that
market competition-based activities will encourage better
performance and diversity.

Amid the euphoria intended to support good governance and
human rights, such initiatives should be applauded. As Satryo
Soemantri Brodjonegoro, the director general for higher
education, said in a seminar at the Australian Embassy on Feb.
23, "a university and its teaching staff need particular rights"
to promote university autonomy.

By this, the government seems to be sure that a better outcome
can be achieved with gradual deregulation in higher education,
along with the potential decrease in future government funding.

In fact, "marketization" is not new in higher education,
particularly in developed countries, such as the United Kingdom
and Australia. In a country where higher education was once
substantially funded by its government, economic rationalism was
adopted to curtail government expenditures and balance of payment
in the time of the economic crisis of the mid-1980s.

It is a belief that the shift from state control to state
supervision will make public tertiary institutions more cost-
effective and will be better managed, driven by the market forces
(consumer control).

However, this might be a different story from the situation in
Indonesia and the implications it will bring on the cultural
and/or intellectual formation of the future of the nation state
and its citizenship. Even in many advanced countries,
deregulation in higher education has become a perennial debate.

Along with funding issues, autonomy is always the central
theme in education deregulation. In academic terms, autonomy is
normally divided into "academic autonomy", traditionally known as
"academic freedom", and "institutional autonomy".

Generally, institutional autonomy is concerned with structural
design as well as the administration of tertiary institutions --
in this context referring to primarily state-owned universities
or colleges -- which are normally subdivided into "substantive
autonomy" and "procedural autonomy".

The former refers to the authority of the tertiary institution
in its corporate entity to set its own objectives and programs.
The latter refers to the authority of the tertiary institution in
its corporate form to determine its resources to pursue the
objectives and programs.

Autonomy, together with a number of nomenclatures derived from
business and management, such as efficiency and effectiveness,
innovation and quality improvement, productivity and quality
assurance, are two sides of one coin.

The relative advantage expected from higher education
deregulation is that tertiary institutions -- run like a business
organization -- can play in a more agile way in accordance with
its strengths and weaknesses.

They can define their own mission statements, set their
objectives and priorities without much intervention from the
government. They can institute long-term and short-term planning
processes, and develop their quality management plans with
accountabilities, targets and performance indicators. They can
offer to communities a greater access to the programs and
consultation capabilities they are strong at.

Furthermore, tertiary institutions are expected to be
innovative and responsive to changes in their environment. They
are expected to be more entrepreneurial and to be able to
outsource funds, while at the same time helping offset the
decline of government support. The funds consumed by research and
services should produce a positive outcome. Thus, the tendency of
"dependent mentality" built on the relationship with the
government can be gradually eliminated.

So far there has been no research carried out to identify the
best practice to govern and manage higher education systems and
institutions in Indonesia. In the past, the regulations and
design of higher education were mainly based on comparative
studies abroad and arbitrary and/or historical precedence.

As a result, there were concerns about the lack of public
accountability of the tertiary institutions on the funds
allocated. There were practically no quantitative as well as
qualitative performance measures on the quality of teaching,
research and community services as well as the graduate outcome
and satisfaction.

Since deregulation implies that tertiary institutions would be
increasingly managed like that of the corporate sector, some
problems are potential in relation to the governance, management
and diversity at the institutional level.

It is in this regard that we could question whether the
decisionmakers in the Ministry of Education have put in
sufficient time and energy to think about the implications
resulting from their new market-like regulatory framework.

First, the expectation of market forces which drive
productivity might reduce the quality of teaching and research.
To generate income, academic and research staff would still have
to increase their productivity. However, partly due to time and
financial constraints, it is possible that they would produce as
much as they can, and hence have a low quality output.

Second, the management of a tertiary institution that
resembles a corporate giant requires true managerial knowledge
and skills on the part of institution officials. So far, many
officials of public higher institutions are not career managers,
but rather they are academics who have achieved much in their
academic fields.

Thus, a top professor in health education does not necessarily
constitute a top manager or team leader. Under such
circumstances, rectors and deans might turn out to be a good
figurehead rather than a problem-shooter. In the past, nearly all
could survive in their positions supported by their academic and
collegial environment, which was rather stable. However, many
issues related to quality improvement and innovation might have
been neglected as a result of their lack of capability. In the
more uncertain and turbulent future, a better managerial
knowledge and skills are thus inevitable.

Third, a higher education institution is usually regarded as a
powerhouse of intellect and innovative thought that generates,
interprets and disseminates knowledge, values and qualities for
the younger generation, who are supposed to be the future leaders
of society. In such a unique position, it is different from a
bank or a textile company.

As a professional organization, it is entitled to its
collegial rights. A collegial culture in higher education is
traditionally favored in the academic realm, in which peer review
of research or publication is well-accepted. Under such
circumstances, the managerial culture in a deregulated market
might clash with the collegial culture.

Quality assurance, based on a panel of experts appointed by
the government, to ensure accountability and transparency demands
on the part of institutions -- which seemingly threaten academic
freedom -- might be ignored.

Fourth, deregulation stimulates and promotes diversity in
higher education. In turn, diversity affects nearly all aspects
of higher education, such as teaching methods, student learning,
equity and choices available to students, human resources, social
relevance, finance and management. In such a diverse condition
and wider span of control, an institution requires a well-
prepared and solid management and information system.

Fifth, since diversity suggests a loose supervision of
institutions by the government, no unitary system is available.
It will follow the market mechanism. In response to rivalry,
duplication of courses and programs commonly viewed as counter-
productive, i.e. preventing firms from gaining economies of
scale, will be likely. Risk taking will increasingly become an
integral part of their portfolio of activities.

There might be more issues encountered in the practice that
one might be able to think of. However, the foregoing discussion
and illustrations should remind us that market-like regulatory
frameworks bring concerns on several factors, such as quality,
equality, opportunities, labor market priorities and academic
freedom, to mention but a few.

Whatever steps the government takes in the next few days or
weeks from now, other issues which should be taken into further
consideration in relation to education deregulation are as
follows:

* Education is perhaps one of the most difficult services that
one can measure its quality quantitatively.

* Higher education deregulation requires both solid management
and information systems as well as a control mechanism.

* There seems to be a need to look at the existing universitas
(sekolah tinggi) in the future. Should we redefine or abolish
such a binary system? Which tertiary institutions
(department/school within an institution, to be precise) will be
regarded as a "teaching institution" or "research institution" so
that funds can be better allocated, and accountability be better
measured.

* Subsidies and cross-subsidies will be necessary for many
years to come to assist public institutions to sustain their
existing competitive edge, particularly in important research
areas, and to enhance equality and/or opportunities for higher
education in a pluralistic society.

* In the future, as the outcome can be seen from the process
of deregulation, the government and its agencies should listen to
the institutions' needs, rather than continuously setting
agendas, rules and regulations for their interest. Otherwise, the
objectives of deregulation might slip back into centralism in a
different guise, but with one exception: smaller funding for the
institutions.

The writer is a member of the teaching staff at the Faculty of
Education at Atma Jaya University, Jakarta.