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.