The Public University Goes to the Marketplace

By Patricia L. Farrell

Privatizing the Public University: Perspectives from across the Academy. Christopher C. Morphew and Peter D. Eckel, eds. Baltimore: Johns Hopkins University Press, 2009

Privatizing the Public University
by Christopher C. Morphew and Peter D. Eckel

Privatizing the Public University is essential reading for every new state legislator and faculty member or administrator at a public university. The editors, Christopher Morphew and Peter Eckel, have done an excellent job of bringing together authors from a range of disciplines, with diverse conceptual standpoints and theoretical frameworks, to analyze what privatization involves and what it might mean for public higher education.

The economic downturn under way when this book was published has continued, increasing the need for public universities to examine their operations to determine efficiencies and effectiveness. In many instances the results of this examination have increased the rate and degree of privatization. In addition, the federal government stepped in to aid state economic recovery and disbursed State Fiscal Stabilization Funds for fiscal years 2009 to 2011. To receive the stabilization funds, states had to commit to advancing essential educational reforms to benefit students from early learning through postsecondary education, including development and use of college-readiness standards and prekindergarten through postsecondary and career data systems.

In addition, President Barack Obama’s goal for the United States to regain its standing as the nation with the highest proportion of college graduates by 2020 is changing the landscape of higher education. Two key foundations—the Lumina Foundation for Education and the Gates Foundation—are helping to move this goal forward by providing grants to states and institutions. Lumina grants promote effective practice, public policy, and public support, and the Gates Foundation is funding Complete College, an organization assembling an alliance of states to take action that will significantly increase the number of students completing college.

These types of sponsored initiatives will increase the accountability of public institutions. One can also argue that these initiatives will increase privatization by encouraging further development of a market driven economy among public institutions of higher education that can prove to the government and the public that they are efficient and effective in delivering on their promise of educating and graduating students.

In his contribution to Privatizing the Public University, Stanley Ikenberry, the former president of the University of Illinois and of the American Council of Education, describes the tension between the momentum of privatization and the importance to individual and societal success of obtaining a college degree. Ikenberry states that some individuals see privatization as a protest against state disinvestment in higher education, while others see it as an opportunity for entrepreneurialism.

Education scholar Michael McLendon and research analyst Christine Mokher address the origins and growth of state policies that influence privatization. They describe five factors creating a distinct new policy climate: (1) the structural constraints on the capacity to raise public tax dollars or change the tax structure; (2) shifts in the partisan complexion of legislatures; (3) the advent of term limits on elected state officials; (4) the increasing power of governors over education; and (5) structural and cultural changes in state governments. They then examine privatizing trends: the decline of state funding, the decentralization of tuition-setting authority, the rise of prepaid tuition and college savings plans, the growth of state merit scholarship programs, and the decentralization of governance.

Robert Lowry applies his expertise in the economies of education to answer the question why we even have public universities. He identifies the characteristics that distinguish public and private universities and analyzes the argument that state policy makers and academics hold differing perspectives on what universities should produce. He addresses the advantage to states of subsidizing universities, acknowledging, however, that there are environmental conditions for a shift to a new equilibrium.

Education professor Robert Toutkoushian explores economic models to explain the behavior of the states with regard to the funding of higher education, including factors that might account for the decline in state funding over time. As Toutkoushian notes, educators argue that there is not enough support for education at all levels. But, from an economist’s standpoint, financial support is already based on the collective perceptions of taxpayers and legislators about the costs and benefits of education.

In their own essay, the editors, Eckel and Morphew, describe the complex organizational dynamics of public research universities. They explore decision-making behaviors and hypothesize about what privatization might do to the decision-making processes that could transform a university. Whether the transformation would be for better or worse remains unclear.

Education policy researcher Gabriel Kaplan follows with an exploration of the need for new governance structures and policies, implicitly arguing for the commonly held belief that as state funding declines the state role in governance should, too. He uses theory and empirical evidence to analyze contrasting views of privatization.

Providing another perspective, economist Mark Stater studies the privatization of other types of former public agencies for lessons that can be applied to higher education. He develops a proposition based on a public institution’s becoming private, which includes higher tuition and less access to higher education for students from low-income families. Analyzing lessons from the privatization of K–12 education, he moves into industries that have been under government control and describes what privatization entails, including contracting out, public divestiture, or deregulation.

Carlo Salerno, an analyst in the U.S. Government Accountability Office, provides an international viewpoint, describing the European trend toward privatizing the public university. The European initiative known as the Bologna Process involves making academic degree standards and quality more comparable and compatible across the continent—a goal similar to that of some proposals for reforming U.S. higher education. But, as Salerno points out, Europe is also experiencing a trend toward privatizing research universities, which have historically relied heavily on public financing. European institutions face the pinch of increased public involvement in governance and decreased public funding.

“What seemed like science fiction a few years ago is now a familiar part of the higher education landscape,” the editors state in their conclusion. We are in the midst of a seismic shift in public higher education. Privatization is one outcome of the complex and uncertain environment in which higher education finds itself. Faculty members, deans, and policy makers concerned—or just interested in learning more—about the trend toward increasing privatization will find in this volume a rich theoretical, conceptual, and empirical foundation for understanding privatization’s influence and likely direction in higher education.

Patricia L. Farrell is director of university outreach and policy research at the Presidents Council, State Universities of Michigan. With Clifford Harbour, she co-edited Ethical Dimensions of Institutional Issues, Policies, and Practices at Community Colleges. Her e-mail address is [email protected].

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