Alternative Private-Public Blends in Higher-Education Finance: International Patterns

Abstract

Several of the preceding pieces in this volume have analyzed policy debates concerning the financing of school systems. The policy debates are no less intense when the focus turns to higher education. Many arguments run in parallel fashion between educational levels. Some differ by matters of degree, while others differ fundamentally. Whatever the parallels in argumentation, there are striking differences in actual practice between levels. In the United States, private schools depend much more on private finance than private higher education does, while public schools depend much more exclusively on public finance than public higher education does. The panorama appears to be different in many other nations that have both private and public sectors. Their private schools seem more likely than private universities to receive public funds and their public universities seem nearly as likely as public schools to depend almost exclusively on public funds. In U.S. higher education there is considerable debate concerning the appropriate blend of private and public financing for each sector. The problem has become especially acute as enrollments decline, federal and state governments seek to cut costs, and concern spreads about higher education's equity effects in serving privileged groups out of general revenues. There is a good deal of reference to different economic theories, social values, and political constraints. But there is almost no consideration of how policymakers elsewhere have approached the problem. Of course, financial policy outside the United States is made within private-public parameters that are different from those faced by U.S. policymakers, but cross-national comparisons may help stimulate, or even orient, crossstate comparisons within the United States. More importantly, cross-national experience could at least help put our policy choices into perspective. For example, few in the United States support either 100% private or 100% public funding. An economic theory that tends to favor private over public funding may simply tell us to increase our present private share if that share is “low.”