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Higher Education in Developing Countries:

What Role, What Impact?

Devesh Kapur
University of Pennsylvania

Outline of Presentation

Overview of Tertiary Education Why? Rising Demand How? Supply Responses Changing Role of the State Regulation and Standards Access: Who gets educated? What? The Content of Higher Education

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Higher Education Landscape

Global tertiary student population: 1991 68 million 2004 132 million 2009 150 million
The global market in higher education exceeds over 3 percent of the total services market

3.5 million people are employed to teach or otherwise service students

Global market in educational services is currently estimated at more than $2 trillion
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Growth in global tertiary education

Population aged 15-24 (in millions)

Africa Asia Europe Latin America North America

1200 1000 800 600 400 200

Oceania LDCs

0 1950 1980 2000 2010 2025 2050

Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2006 Revision and World Urbanization Prospects: The 2005 Revision,,

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Rapid growth of student enrolment China and India

INDIA 1950/51: 27 Universities, 578 Colleges 2009: 504 Universities , 25,951 Colleges, 14 million students enrolled

CHINA 2009: 30 million students enrolled Number of College Graduates: 98 million

Target (2020): 195 million

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Why? Rising Skill Premium

1980s Mexico Increased 1990s Increased until mid 1990s Stable/declined after mid 1990s Increased between 20001990 Increased


Slightly declined

Brazil Chile

Stable/Slight increase Increased

Increased Declined early 1990s; Overall increased 19902000 (national data) Increased


Relatively stable

Hong Kong


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Source: Goldberg and Pavcnik, 2006

Political Economy of Higher education

Limited public resources Regulation: Failures leading to shift from Inputs to Outcomes Supply of quality institutions is severely lagging demand - Increasing faculty shortages especially in elite institutions, with competition from private sector Quality: high variance and low mean Entrenched mediocrity in most faculty Exceeding weak culture of research Access and Equity exacerbated by failures at primary and secondary level
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Poor quality has led to diminished signaling

Centralized regulation provides fertile ground for rentseeking and patronage politics Higher Education is emerging as an important arena of distributional conflicts These distributional conflicts have intensified as skill premium has increased Increase in degree inflation: Credentials without Skills The few institutions that signal quality enjoy enormous brand-rents
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Obstacles to reform





How? Supply Responses

Changing Role of State Increasing Role of Private Universities

Corporate Skill Providers

Internationalization of Higher Education But undercut by Brain Drain?
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The Role of the State


From Provider to Financier to Regulator

Promoting Access and Equity Invest in areas undersupplied by private sector
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How? The growing role of the private sector

Private Share of Enrolment Large: over 50 percent Countries Bangladesh, Chile, India, Indonesia, Iran, Japan, Netherlands, Republic of Korea, United Kingdom

Medium: between 25 and Malaysia, Mexico, Peru, United States 50 percent Small: less than 25 percent Argentina, Bolivia, Cuba, France, Germany, Russian Federation, Switzerland, Vietnam
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Source: UIS Education database, May 2005

U.S. Ratio of Earnings: College vs. High School

1.9 1.85 1.8 1.75

1.7 1.65 1.6 1.55 1.5 1.45 1.4

19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09

Source: New York Times, March 5, 2011

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Rising Costs of Tertiary Education in the U.S.



Billions of


Student Loan Debt Credit Card Debt



0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Source: New York Times, April 11, 2011

Bank lending for higher education in India (in billions of rupees)

400 350 300


Rs. (billions)

250 200 150 100 50 0 2000 2005 Year 2010


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International Student Enrolment in Top Five Host Countries (in thousands)

US 491



Australia Canada

178 131

241 111

231 93





Source: OECD, 2011

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Recent rapid increase in Chinese students abroad

India: Overseas Exit to avail of external signaling

In 2010, about 264,000 Indian students studied abroad About 100,000 in the U.S. Other large destinations: Australia, UK, Canada, New Zealand and Singapore Others in Europe, Russia and China
Primarily self-financed undergraduate education and professional (Masters) degrees Growing Expenditure: $5.5 billion (overseas); $2.2 billion (government budget)

Flight of Elites

yet return of Chinese students to China is on the rise

but many poor countries do no not see a return of talent

Expatriation Rates (Doctors and Nurses from Low-Income Countries, 2000)
<10 % Bangladesh, Benin, Bolivia, Burkina Faso, Burundi, Central African Republic, Dem. Rep. Congo, Cte dIvoire, Ethiopia, Gambia, Guinea, India, Kenya, Mali, Mauritania, Myanmar, Nepal, Niger, Nigeria, Pakistan, Senegal, Sudan, TimorLeste, Togo, Uganda, Yemen, Zambia Cambodia, Comoros, Eritrea, Ghana, Guinea-Bissau, Laos, Madagascar, Mozambique, Papua New Guinea, Rwanda, Solomon Islands, Somalia, Vietnam Sao Tome and Principe, Zimbabwe

Bangladesh, Burkina Faso, Dem. Rep. Congo, Guinea, India, Mongolia, Myanmar, Nepal, Niger, Pakistan, Rwanda, Sudan, Yemen

10-25 %

Afghanistan, Cambodia, Central African Republic, Chad, Comoros, Cte dIvoire, Ethiopia, Gambia, Laos, Madagascar, Mali, Mauritania, Nigeria, Solomon Islands, Vietnam Benin, Burundi, Eritrea, Ghana, Guinea-Bissau, Kenya, Malawi, Papua New Guinea, Sao Tome and Principe, Senegal, Somalia, Timor-Leste, Togo, Uganda, Zambia, Zimbabwe

25-50 %

>50 %

Haiti, Liberia, Sierra Leone

Haiti, Liberia, Mozambique, Sierra Leone

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Cross Border Supply: Universities Travel Abroad

Range of Arrangements Overseas campuses, franchise, joint degrees, twinning, etc.

Why are there so few overseas campuses? Regulatory issues

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Regulation and Standards

Who ensures quality?

Growth of Regional and International Accreditation bodies - Universitas21 - Washington Accord - Council for Higher Education Accreditation (CHEA) - International Network for Quality Assurance Agencies in Higher Education - Global Alliance for Transnational Education (GATE) - International Quality Review Process (IQRP)
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The Virtual Future: A Solution?

Early Failures Recent successes in the US Costs Open Courseware Movement

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Can Online Education Substitute for Brick-and-Mortar Universities?

Estimated number of students in the US who enroll only online (in millions)

2004 2005 2006

0.78 0.99 1.26

2008 2009 2014 (projected)

1.78 2.14 3.97

Source: The Chronicle of Higher Education, 2010

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World Internet Penetration Rates, by Region As of 2010

World Average Africa Asia Middle East Latin America/Carribean

Europe Oceania/Australia North America 0 10 20 30 40 Percent

Source: Internet World Stats, 2010






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What is the purpose of higher education?

promoting social mobility is not our core mission. Our core mission is to provide an outstanding education within a research setting." Alison Richard, Vice Chancellor, Cambridge University

To train people or make them trainable?

To create a middle class?

Be an engine of innovation? Provide a ladder for social mobility or create national elites? A mechanism of nation building by influencing and molding the minds of young people?
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The mission of the university is the discovery, improvement, and dissemination of knowledgeBy design and by effect, it is the institution which creates discontent with the existing social arrangements and proposes new ones. In brief, a good university will be unsettling. --University of Chicago, 1967 A university is a series of individual faculty entrepreneurs held together by a common grievance over car parking. --Clark Kerr, former President of the University of California System

He was sent, as usual, to a public school, where a little

learning was painfully beaten into him, and from thence to the university, where it was carefully taken out of him. --T.L. Peacock

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Future of Higher Education?

Private providers increasingly dominant

Non traditional higher education development s

Corporate campuses and workforce training

Overseas higher education (elites)

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The Trilemma: Scale, Cost and Quality

Who Gets Educated? Equity and access especially for historically socially marginalized groups Selection Criteria Is Traditional University Education Oversold? Skilling vs degrees The global hunt for talent: Where are the faculty? Will there be innovation in Higher Education itself?
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