Universities in Transition: Privatization, Decentralization, and Institutional Autonomy as National Policy
with Special Reference to the Russian Federation


D. Bruce Johnstone
Olga Bain
State University of New York at Buffalo*


The term, "in transition," has become a euphemism for changes that have swept over Russia and the other newly independent states of the former Soviet Union and the other formerly socialist nations of Central and Eastern Europe. These changes, often wrenching and dislocating, have overturned entire economic and political systems, altered livelihoods and lifestyles, and forged entire new states. At the core of the transition has been a great reduction of state control, both over individual lives and over productive activities and enterprises, including a lessening of state ownership, state regulation, and state (tax) funding. This diminution of state regulation and funding extends to the production and dissemination of knowledge by the universities, academies, and other institutions of higher education. For universities, "transition" has brought new freedom, both ideological and managerial, as well as new demands and new opportunities. In Russia and other countries, it has also brought universities instability and new levels of austerity.

Taking the place of central state control in much of the general goods and services sector of the economy is the guiding hand of the market, which (at least in theory) allocates capital and labor in the most efficient manner to meet changing consumer preferences and maximizes return on invested capital. For the universities in the transitional countries, governmental or ministerial control has also been supplemented and supplanted by the market in the form of tuition-paying students, (although still legally limited in percentages of total enrollments), the sale of faculty research and training capabilities, and by greater financial self-sufficiency in the provision of dormitory and food services—all of which measures are embraced by the concept of privatization. In addition, higher education, still being primarily a public good, is also affected by the decentralization of government to the level of region or province or "subject" and, at least in the planning stage, to forms of publicly-accountable but quasi-governmental "buffer" entities, akin to the US public multi-campus governing boards or state planning or coordinating councils. Finally, governments are granting more autonomy to institutions of higher education, allowing them to allocate resources more freely in pursuit of their institutionally-determined missions. This chapter is a discussion of the interplay of these three forces—privatization, decentralization, and autonomy—acting on universities in all countries, but especially within the transitional countries, and more especially within the Russian Federation.

I
Universities, Change, and the State

Wrenching change, extending to universities, is by no means confined to those nations once thought of as the "Soviet Block," characterized by central economic planning and ideological regimentation. The combination of market capitalism and liberal democracy that has characterized the "West," epitomized by the member states of the OECD, while enormously productive and individually liberating, is also inherently destabilizing. Change, in fact, does not just happen to capitalistic economies or liberal democracies; it is the very essence of these systems, at least in their tendencies absent regulations or public policies to the contrary. And the increasingly global nature of markets and production systems, plus the increasing speed of technological advances and their application, compound the amount and pace of change with which modern universities in all countries must deal.

In reference to change, the university has always played two quite different, at times even contradictory, roles. On the side of change, the academy is devoted to inquiry, discovery, new knowledge, and learning. Its faculty is supposed to be skeptical, critical, imaginative, revisionist, and sometimes even radical. The university is a principal engine of economic competitiveness and individual self-betterment. All of these are clearly missions abetting change. At the same time, and reinforcing a natural conservatism, the university is also a custodian, defender, and transmitter of culture and tradition. Whether it is, or is thought to be, controlled by the state, the faculty, or some form of management, it is controlled by those with power and status, and in turn transmits and thus perpetuates this very power and status. These are missions of continuity and stability and of likely resistance to change.

Some forces for change would strengthen the role of the state in the business of the university; others would weaken it. Among the former are increasing pressures to serve national economic interests, to serve society in ways defined by government, and to accommodate publicly determined values such as expanded participation or racial and ethnic tolerance. In most nations, higher education is thought to be more important to more people than ever before, and unequivocally a matter of national interest--whether or not it is necessarily a matter for government ownership, regulation, or funding. Government is also demanding that universities, whether public or private, be more accountable to students, families, and taxpayers, and prove to skeptical elected leaders that they are worthy of the public’s trust and resources.

At the same time, there are centrifugal forces pulling universities away from the state, particularly from national or central governments, and drawing universities closer to clients—whether students, employers, or program sponsors—and to more regional or local interests. Such forces may stem from universities seeking greater autonomy, although autonomy itself, as we shall see below, is laden with complexity and nuance. Rectors or presidents, senior professors, faculty of lesser rank, and students may differ greatly on the attractions or fears that they perceive in either strengthened or weakened ties to the central state. For example, most rectors, and especially rectors of "classical," "flagship," or otherwise dominant universities generally seek maximum autonomy consistent with continuing their claim on public resources--and some may even "bargain away" part of these claims for additional freedom in allocating their resources and supplementing their governmental allocations with non-governmental revenues. On the other hand, institutions of lesser prestige, with fewer opportunities to seek other-than-public revenue, and needing protection from the more hegemonic classical universities, may see greater protection in remaining under considerable governmental authority. In a similar fashion, rectors and other managers generally seek greater autonomy, while faculty and staff—particularly under conditions of financial austerity--may well see their jobs threatened by an unrestrained institutional management, and thus may see greater protection in a government that is likely to be more politically sensitive to the preservation of jobs than to the quality or adaptivity of the institution.

Finally, within—or perhaps looming over—these contests for control and authority is the struggle of universities almost everywhere with austerity, brought on by costs rising faster than revenues, especially those revenues from public treasuries. A partial solution, promoted by most Western economists and identified with the World Bank, is to shift more of the costs of higher education to non-governmental, or other-than-taxpayer, sources, either by encouraging more private institutions of higher education, or by allowing or requiring public institutions to supplement public revenues with private funds. Such supplementation may entail some or all of, e.g., tuition, full or more nearly full-cost recovery on student living and dining arrangements, and revenue earned through entrepreneurial activities of the faculty. A related set of solutions is to seek greater efficiency, in part through practices that mirror those associated with the private sector, such as downsizing, outsourcing, performance budgeting, and niche marketing. (Johnstone, 1993; The World Bank 1994; Ziderman and Albrecht, 1994).

This, then, is the global context of privatization, decentralization, (or regionalization or federalization), and institutional autonomy:

- Privatization, or an increasing orientation to markets and clients, an inclination to management practices associated with private enterprise, a lessening of financial dependence on the government or taxpayer, and a receptivity by the state to privately-owned, tuition-dependent, institutions;

- Decentralization, or the devolution of control from the central or national government to regional (e.g., state, province, Land, kray, oblast, or republic) governments. It may also include devolution to forms of public "buffer" entities such as constitutionally autonomous governing boards, university systems, or other publicly accountable planning or coordinating bodies, as in the US (and increasingly examined with interest by other countries).

- Autonomy, or the freeing of the university from some measure of governmental authority or control, quite apart from public or private ownership or dependence governmental or taxpayer revenue.

These terms describe trends in North America, Europe (including West, East, Central Europe and Russia) as well as other new states emerging from the former Soviet Union, and to many of the less industrialized countries of Latin America, Asia, and Africa. Governments are seeking a less regulatory relationship to universities, voluntarily divesting some of their authority, sometimes out of an ideology favoring privatization and market solutions, sometimes to divest themselves of financial burdens, and sometimes to find a more constructive balance between what van Vught (1994) calls the Governmental "steering" balance between state control and state supervision. This paper elaborates on these three important and exceedingly complex concepts in the governance and support of higher education, each of which is multidimensional and better understood not as "either-or," but as points along several continua.

II
Privatization

Private universities and private non-university forms of postsecondary education, either proprietary for-profit, or private not-for-profit, are playing larger roles in the provision of higher education in many countries. (The distinction between "private for-profit," or "proprietary," and "private not-for-profit" is critical in the US, with the former generally signaling non-collegiate, vocational, short-cycle, and lower status, in addition to various legal and tax implications. The distinction, however, is less significant in much of the rest of the world, where "non-profit," may be in fact, if not always in law, quite compatible with virtual personal or family ownership.) These private institutions, at least some of the not-for-profit kinds, may be among the most prestigious and selective colleges and universities, as in the US, or they may be decidedly non-elite, or "demand absorbing," as in much of Latin America, India, Japan, South Korea, and the Philippines as described by Levy (1986) and Geiger (1987). Or they may be new and on the very edge of viability and acceptability, as in Russia, elsewhere in Eastern and Central Europe and the countries of the former Soviet Union, and China. This increase in private sector higher education activity may happen even where the government continues to regulate the mission, programs, and curriculum, and even the tuition that they may charge.

But "privatization," as we shall define the concept in this section, is at least as significant to traditional public universities and other public institutions of higher education. Declining tax revenues and increasing competition from other public sector needs (or the perceived need for tax relief) are causing many state-owned universities to turn more and more to other-than-governmental revenues. Most significant, but also problematic and controversial, is the shift in revenue dependence from government, or taxpayers, to parents and students through tuition and more nearly full-cost reimbursement for institutionally- or governmentally-provided food and lodging. No matter how small and supplemental this tuition may be compared to the total cost of instruction, any amount greater than a symbolic pittance amounts to a market transaction, with implications to consumer (both student and parent) demand, access and participation, and the "signaling" functions that prices play in a working market. Perhaps more important, and certainly more complex and controversial, are the social and political implications regarding the proper size and composition of the public sector generally, and the equity implications of a public higher educational sector, access to which is so highly correlated with social class and family status even when fully subsidized.

Reliance on non-governmental revenue via tuition, as well as other forms of privatization, is found increasingly throughout the world. The privatization of public higher education in America is especially true of the high prestige public universities such as Michigan, Berkeley, or Wisconsin, to which in-state undergraduates may pay a third or more of full costs, out-of-state undergraduates may pay tuition that covers considerably more than full costs, and to which loyal alumni and friends give upwards of $100 million per year. (The state taxpayer may actually cover less than a fifth of the total costs in such public universities.) In China, all students began paying tuition in 1998 under official governmental blessing, which now proclaims, in language redolent of neoliberal economics, the social equity of having students who receive the benefits share in the costs of their higher education. Most of Europe, at the start of the 21st century, continues to resist tuition, although the Netherlands has charged tuition for some years; Britain began charging tuition in 1998 (surprisingly, under a Labor government); and Austria in the fall of 2000 announced plans to do so in the year 2001 (Johnstone and Shroff-Mehta 2000). In Russia, which has an historical, ideological, and constitutional history of free higher education, financial pressures on the universities and the need to supplement the grossly insufficient governmental allocations have forced universities to maximize the conditional exceptions to free higher education as specified by Article 43 of the 1993 Constitution of the Russian Federation. This article now allows universities to charge tuition both to public and private organizations that sponsor students, as well as directly to individuals who were not regularly admitted under competitive examinations and state quotas (Bain, 1998).

In this context, it is becoming increasingly difficult to say what it is that makes a university "private" as opposed to "public." The privateness or publicness of institutions of higher education, rather, must be viewed along the dimensions of (1) mission or purpose, (2) ownership, (3) source of revenue, (4) expenditure controls, (5) regulations or controls over other-than-expenditures, and (6) norms of management. Most importantly, each dimension has gradations of publicness and privateness such that an institution might be quite private on one or two dimensions, and quite public on others.

Mission or Purpose. The most private mission or institutional purpose of an institution of higher education would be that of bringing profit to ownership in the manner of any other private business. This is the essential mission of the proprietary, for-profit, postsecondary institutions of the US and many Asian countries. The usual form of higher education served by for-profit institutions is the provision of short-cycle vocational or professional training, which is willingly paid for by the client (the student or the family), and thus can be self-supporting and even profitable, particularly when delivered by institutions unencumbered with such "unbusinesslike" and potentially costly functions as shared governance and tenure. The reason that most advanced education and basic research are not served by proprietary institutions is that there is neither sufficient assurance of profit, nor sufficient trust on the part of government that it will get the full measure of what it is paying for, given the difficulty of measuring the outputs of fundamental research and advanced education.

In contrast, and on the clearly "public" end of the university mission continuum, would be a public mission established by government, paid for by public revenue, and assured by governmental monitoring and control. This mission might be fundamental research and the advanced education associated with the classical university, the much more applied research and practical education associated with the American Land Grant tradition, the more recent mission of egalitarian participation served by community and other open-access colleges, or the historic Soviet mission of meeting state manpower training plans.

Institutions that are state-owned and mainly or entirely governmentally-funded (and thus unequivocally public) might be thought more likely to act in the public interest (for example, the interest of the student) than would private, for-profit institutions acting in the interest primarily of their owners. However, public institutions, particularly if they enjoy a monopoly, and encouraged by traditions of faculty authority in governance and autonomy in the classroom (and especially if the faculty are protected by politically powerful civil service unions), may be inclined to act more in the interests of the faculty than of the student. In contrast, private institutions, either proprietary or non-profit, operating in a context of competition and assuming legal safeguards against outright fraud, may be very responsive to student needs, not out of any individual or institutional nobility, or any particular devotion to a public mission, but simply out of a need to continue attracting students and the revenue brought either by tuition or public payments. At the same time, any country experiencing private institutions of higher education for the first time, (whether non-profit or proprietary) will most likely lack the well-established reputations, consumer knowledge, and competition of a mature higher educational marketplace. Such countries--and Russia and the other "transitional" countries are among them--may have all the more need to regulate and hold accountable their emerging private sectors of higher education.

To complicate matters further, profit-making institutions, whether schools or businesses, make their profits by maximizing the difference between their revenues and their costs, with the positive difference, after providing for institutional reserves, going as profit to the owners. Private non-profit universities, however, also try to maximize the positive difference between their revenues and their costs, with the only distinction being that the surpluses must go back into the institution, for institutional purposes, rather than to owners. But the institutional behavior of maximizing revenues, holding down costs, and seeking surpluses to the degree possible, can be quite indistinguishable as among universities that are legally for-profit, non-profit, or even public. (Actually, public universities may be the least inclined to maximize surpluses between revenue and expense simply because to do so is to suggest that they were overfunded by the government in the first place.)

In between these extremes of the clearly private for-profit, and the clearly public governmentally-determined, missions can be a range of missions established and maintained either by private non-profit or by quasi-public institutions. The mission of a typical private non-profit institution of higher education is established and maintained neither by owners, per se, nor by government, but by the institutional faculty under the direction of a lay governing board and an administration, or management, that is heavily influenced by tradition. The mission will be essentially public--and avowedly (by law) not for personal profit--but it will not be determined by the government. Similarly, a public university can be governed not by a ministry, but by some form of governing board that is ultimately controllable by the government (or occasionally, in the US, directly by the electorate), but that is shielded, or buffered, from immediate governmental (executive or legislative) reach by lengthy, staggered terms of its members and frequently by constitutional protections. The effect is to weaken the control of a congress or parliament, or of a chief elected executive, and to strengthen the determination of mission by the faculty and administration, constrained, like the private not-for-profit institutions, by academic tradition and the isometric force of academic competition.

Ownership. The least ambiguous distinction between public and private higher education lies in ownership. But even this criterion also has shades of meaning. The ownership of a university may be clearly public, as in a state agency or a state-owned enterprise, or clearly private, as in individual or corporate ownership. Or, the university--its name and all of its assets--may be held privately but in trust for its designated public purpose, as in the royal charters of the British or Dutch universities, or like the American non-profit colleges and universities, granted corporate charters by their state government, but constitutionally protected from public confiscation by the 1819 United States Supreme Court decision in the Dartmouth College Case.

Ownership is related to, but distinct from, mission. Public ownership should assure some form of public mission, but there are many different public missions, and different, equally public, institutions may (and desirably should) serve quite different public missions. On the other hand, private ownership can be quite compatible with a public mission, either when public revenue has been used to purchase the desired public mission, or when the public interest established by the government, and the private interests "established" by the market coincide--as in the provision of quality manpower training. This is the principle underlying state encouragement and even financial support of private (both non-profit and for-profit) higher education. The head of the Russian Association of Non-State Universities declared in 1998 that many "non-state" universities have in essence very public goals, clearly inspired and by the state such as training nationally needed personnel, creating new work places, doing research and expanding access to higher education (Zernov (1998).

However, there remains a distinction between a private institution serving a public purpose because it suits the interests of the owners or the inclinations of the faculty, and a public institution that is perpetually under such a public obligation. Private non-profit universities may be prohibited by law from serving the mission of private profit; but there is no assurance, beyond that brought about by explicitly earmarked public funding, that they will serve any particular public mission, or that they will serve it as directed by the government of the moment. Still, it is assumed by more and more countries—indus-trialized, less industrialized, and transitional--that the institutional or professional missions served by private non-profit universities are so fundamentally in the public interest that government should encourage and protect the autonomy under which such institutions operate.

The expansion in Russia of the non state-owned higher education sector was quite dramatic in the 1990s, with more than 300 in 1998 licensed by the Ministry of Higher and Professional Education, 40 percent in the greater Moscow region (Goskomstat 1998 p. 228). The typical private (or "non-state") institution is small, with training in only a few fields (predominantly economics, management, languages, and law), leases space from a state university, and employs the faculty of the state university at a minimal salary with no financial obligations for pensions or other benefits.

Source of Revenue. Revenue is generally thought of "public" when it originates from the general citizenry, whether it is from direct taxation, as in taxes upon income, sales, or property, or from indirect taxation, as in taxes upon manufacturing value added or corporate profits (in both cases, presumably paid for by the consumer in higher prices), or from the confiscation of purchasing power by inflationary governmental borrowing or by the simple printing of money. Revenue is thought to be "private" when it originates from voluntary, private decisions, as in the payment of tuition, the making of a gift, or the purchase of research or other university services.

Most universities, whether publicly or privately owned, operate on a combination of public and private revenues: direct taxpayer-originated appropriations in combination with private tuition payments, the sale of services, private gifts and grants, and returns on privately held endowments. Clark Kerr (1990) differentiates between private money--in the form of revenues from auxiliary enterprises such as housing, bookstores, food services, as well as tuition fees, gifts and endowments, and public money treated as private--such as state grants to pay tuition, tax deductions on loans; tax preferences. Thus, what may seem to be private revenues may actually be at least partly public: private tuition payments that come in part from public grants or from loans that are guaranteed and often further subsidized by the government at taxpayer expense; or private gifts encouraged by tax deductibility that removes revenue that would otherwise be owed to the government. And what of the lease of university property that is, or was, the public’s? Or private gifts brought in, at least in part, through the efforts of staff whose salaries and/or pensions are supported by the government or taxpayer? Or university capital construction covered by bonds, the interest on which is low because of government guarantees or tax deductibility? Or a government-supported research grant won by the university in competition with other possible providers, public and private? In short, the source of revenue, while absolutely critical for all sorts of public policy considerations, is extremely complex and generally not a good indication of the "publicness" or "privateness" of a university.

The private flow of funds into Russian state universities has increased substantially. Anticipating privatization of university finance of the 1990s, the state in the mid-1980s began turning to indirect rather than direct allocation of state revenue: i.e. through research projects and limited training contracted by state enterprises. Later, with emergence of market economy and a private sector, more extensive contract training brought more non-governmental revenue to public universities. By the 1994 govern-mental decree, public universities were authorized to charge tuition on a limited number of individuals who had not been admitted by competitive examination within the publicly-subsidized quotas. By 1998, driven by a collapsing ruble and the nearly intractable difficulty of collecting taxes, the state was forced to cut federal funding to the universities by another 30 percent, and the cap on tuition-paying students was raised from 10 to 25 percent. At the end of the 20th century, admission to public universities and institutes in Russia remained divided into those who are charged tuition and those admitted entirely at the expense of the state. In 1995, the average Russian state university generated 25 percent of its operating revenue from non-governmental sources. By the end of 1997-1998 academic year, this percentage was estimated to range from 30 to 60 percent (NGTU Inform Newsletter 1998 p. 11, 14).

Expenditure Controls. For some purposes, the privateness of a university is better signaled by the degree of institutional autonomy, or absence of state control over the expenditure of the revenues (however "public" in origin) than by the public or private origin of the revenues themselves. A publicly-owned university, for example, can be given an unrestricted grant of public revenues, which it can then co-mingle with various private revenues and spend as it perceives to be in the best interest of the institution. Such expenditures may include the setting of salaries, the purchase of real property, and even the incurring of debt, and may include the authority to carry over surpluses from current fiscal year operations--in short, to function quite like a private institution, and very unlike an ordinary governmental agency. Or the same public university, with revenues from the same sources, can be treated just like a governmental agency, with all expenditures controlled by the finance ministry, just like any other governmental department or agency. Insofar as universities seek to be treated more "privately," it is generally the absence of expenditure control, or governmental "preaudit," that they seek, rather than private ownership or a more private mission per se. Because all universities are labor intensive, with faculty and staff compensation accounting for three-quarters or more of all current expenditures, fiscal flexibility, or expenditure autonomy, implies the ability to set compensation levels, to hire or terminate staff, and to move expenditure authority freely between compensation and other expenditures.

For a government to "let go" of expenditure controls requires trust on the part of the government that the university decisions, with fewer expenditures controls, or preaudits, will be neither wrong (in the sense of wrong priorities, or expenditures that will not in fact obtain the desired outcome) nor corrupt (in the sense of expenditures going to enrich or otherwise to aggrandize individuals rather than serving institutional purposes). Trust does not come naturally to governments. Universities can make a claim to fewer expenditure controls with transparent budgeting, sound internal auditing, and performance measures that allow rigorous post audit, or "after-the-fact" monitoring of expenditures. Probably the greater barrier in many parts of the world is endemic corruption, which makes governments reluctant to loosen their controls over expenditures. This is partly cultural, and government bureaucrats will always be reluctant to loosen controls when there are so may ways of stealing from the public purse. The only way that governments are likely to loosen insistence on extensive expenditure controls is for there to be accurate and transparent information, competent and rigorous management, and extensive post audit. In the meantime, absent these management controls, it may be that the institutional and managerial advantages to loosened expenditure controls from government are not worth the risk of losses to corruption, referring either to monetary losses or to the diminished integrity of the academy.

Regulations or Controls over Other-Than-Expenditures. Quite apart from expenditure controls, government can exercise--or choose not to exercise--control over a wide range of other aspects of university operations such as:

- the selection or final appointment of the chief executive officer (rector or president),
- the form of internal governance (especially the powers of the university faculty),
- the degrees or programs to be offered, or the curricular content thereof;
- terms and conditions of employment, including provisions for job security and the protection of pension rights, or
- the circumstances of student admission, including the grounds for selection or denial, or even the actual assignment of student to institution.

Many of these controls and regulations are for the protection of the consumer (generally, the student or family) or of the general public, and are similar to those consumer protection regulations applicable to other professional practices such medicine, law, insurance, and banking. The private benefits of a higher education are presumed to be substantial, but they are also difficult to measure, are often not immediately appreciated or realized, and may be susceptible to reputations and "halo effects." Students and their families may thus be thought to be vulnerable to misleading promises or other forms of exploitation from universities, whether legally for-profit, non-profit, or public. Hence, all countries have mechanisms for the accreditation or attestation of institutions, especially when they are starting up, and also at periodic intervals.

Norms of Management and Governance. Finally, "public" and "private" can refer to certain presumed norms of management, quite apart from the other dimensions of privateness or publicness. Among norms associated with private, for example, would be:

- managerial decisiveness, toughness, affinity for numbers and other "hard" data, and even, where thought to be necessary (for profitability), ruthlessness;
- an eagerness for change and for all the current "re" jargon: restructuring, renewing, reengineering;
- close attention to the client or consumer (student, family, alumni, or potential donor); and
- close attention to image, advertising and public relations.

These private norms stand in contrast to those associated with traditional university management, whether the university is public or private non-profit:

- participatory governance, with openness, lengthy consultation, and consensus seeking;
- a flat organizational structure, an aversion to authority, and a disdain for "management," especially that which is permanent and/or is not associated with authority earned by scholarly competence;
- a sense that the academy is generally misunderstood, and probably not understandable anyway, especially to politicians and businesspersons;
- a related sense that the university has a special nobility or ethicality about it, which accounts for its clashes with norms that are merely commercial or political;
- a passionate concern for academic freedom, coupled with a tendency to view most threats to job security as threats to this much nobler principle.

In this sense, a move in the direction of privatization is a movement toward the first set of norms and away from the second set—again, quite apart from the public or private nature of mission, ownership, or source of revenue.


III
Decentralization

Governments everywhere exercise some degree of decentralization, or delegation of authority and/or service delivery to regional subdivisions. Political decentralization may suggest federalism, in which the decentralization of state authority is constitutionally protected--that is, not easily removable or even amendable--and in which the region has some rights to shape its "own" governance as well as to select its own representatives to the central, or national, government. At one extreme, represented by Switzerland, the United States, or Canada, federalism limits the authority of the central government to that which is specifically constitutionally prescribed, with all residual authority (amounting in the extreme to virtual sovereignty) effectively maintained by the regional units. In other federal forms, such as Germany or Brazil, true sovereignty continues to be held only by the central state, which delegates authority in certain (perhaps very extensive) domains to the constituent regional units (see, e.g. Elazar 1987, p.40 and ff.).

At the other extreme, decentralization may reflect neither history nor ethnicity, nor natural geographic features, but more of an arbitrary regional demarcation for the administrative convenience of the national government and/or a geographic unit for the mechanics of democratic representation. Such decentralization, evoking few political passions and implying no sovereignty, is especially compatible with different, even overlapping, geographic entities for different governmental functions such as judicial, financial, educational, or certain kinds of territorially-specific environmental regulations.

The intensity of regional "pulls" and of the contests for hegemony over critical public institutions and functions like higher education will be heightened by the presence of distinctively regional ethnic, religious, and/or linguistic populations, as well as by the history of the region and even by sheer physical distance from the central capital city. Regional differences in wealth and predominant economic activity can also sharpen inclinations to stress local institutions and local policies. (Witness the compounding effect of these forces in Russia, China, India, Indonesia, and even Canada.)

Also sharpening the sense of regional identity and/or sense of sovereignty can be a history of political autonomy and/or existence antedating the larger national state. The region may have had a role in formation of the larger state, as the thirteen colonies (now states) had in the formation of the United States of America. Or, the region may have been forcibly subsumed by the larger state, as were certain of the republics of the former Soviet Union. Perhaps most complicating, at least when a central government is attempting to devolve authority to regional units of government, as in the Russian Federation, is a mixture of regional entities, or subjects, of very different characteristics: some regions with distinctive ethnic and linguistic identities and even histories of sovereignty (albeit some quite distant and frequently enshrouded in myth), alongside other entities that are mainly subdivisions of the larger state for governmental administrative convenience, or even for the more effective control over these regions.

Finally, quite aside from these natural and historical forces for a weakening of the center vis-à-vis the regions, most of the mature industrialized democracies in the 1980s and 1990s have seen resurgent, and at times ascendant, political conservatism, standing for less government, less regulation, smaller public sectors, and less taxation. The United States, Britain, Germany, France, and Canada (to mention only a few) have moved politically rightward through much of the 1980s and 90s--not always steadily, but nowhere more clearly manifested than by the ever-more centrist positions in the US and Britain of the historic parties of the political left. This disfavor toward "big government" or "central government" favors the devolution of governmental authority and activity to the regions. Regional (state, provincial, subject, or even more local) government is thought, rightly or wrongly, to be more "in touch" with the needs of the people and less likely to exhibit the negative stereotypes associated in almost all cultures with government: e.g., excessiveness, remoteness, arrogance, or indifference. The fact that many democracies also elect representatives by single member districts increases the inclination of the members of the national parliament or legislature to act more in deference to local interests rather than to the interests of the nation as a whole.

Two other factors also contribute to this tendency toward regionalization or decentralization. The first is an increasing realization that most institutional or agency decisions, whether of a public university, a school, a health agency, or a department of public works, are better made in proximity to the people being served and to the management and professional staff delivering the service. Regionalization or decentralization can thus be associated with "good government" or "governmental reform": that is, fewer "layers" of seemingly unproductive and possibly stifling bureaucracy between government and citizen, as well as between government and agency (or the university).

A quite different impetus toward regionalization, or political decentralization, is the difficulty of taxation, and the temptation of a central government to devolve not so much authority, but rather financial responsibility, to regions or other local units. Nothing plagues Russia and the other once centrally-controlled economies more than the inability any longer to skim revenue from each public enterprise. Taxation is especially difficult when it is being visibly imposed for the first time, and when incomes and transactions in the emerging private sectors are so easy to hide from governmental scrutiny. For example, in 1997, the Russian government collected only an estimated 52 percent of the taxes that were due. In Moscow, with a population of some 10 million, only 120,00 persons filed their taxes on time (The New York Times International, March 8, 1998, p. 3). Thus, there is a powerful incentive on the part of the central government to shift public financial responsibilities to local or regional governmental units. The grip of the central ministry is then further loosened, and other dimensions of privatization—e.g. private ownership, private revenue, and private norms of behavior—are strengthened.

Decentralization of Authority: Over What, To What?

Decentralization of central governmental authority over higher education does not have to be to a devolution of all authority, nor does it have to be a devolution necessarily to the regional (or provincial, or subject, or Lander)) unit of government. Different objects of authority—that is, the different things that matter in the institutional provision of higher education—can be retained by a central ministry, decentralized to other levels of government (or to other publicly-accountable entities), or devolved to the university itself as an enhancement of institutional autonomy. For example, what matters to institutions of higher education includes:

- the right to exist or to operate (apart from the right to offer certain degrees or courses of study);
- the degrees and programs to be offered;
- the curricula, or content to be learned, associated with these degrees or programs;
- the hiring (and the retention or termination) of faculty, and the determination of their compensation and other conditions of employment;
- the admission of students, including standards for admission, retention, and graduation;
- the right to acquire (hold title to) and dispose of real property, including the incurring of indebtedness for such purposes; and
- the right to enter into contracts for the purchase and delivery of goods and services.

The levels of government, or other decentralized public entities or unit of authority, to which these matters may, in theory, be delegated by the central government include:

- other ministries—especially the ministry of finance, but sometimes also (particularly in "transitional" countries) including a ministry or academy of science for the support of basic research, or production ministries with their "own" institutions of higher education;
- regional (state, provincial, Lander, or subject) ministries; or
- quasi-governmental buffer entities, generally removed from the direct political reach of government, but nonetheless publicly accountable and ultimately selected (and at least theoretically removable) either by government or by the electorate directly.

Buffer entities, in turn, may have authority over the governance of the university itself, including the all-important selection of the rector, president, or chancellor (the clearest example being the US public multi campus system). Or, the government may devolve to a buffer entity authority only over the allocation of an overall higher education budget among the several universities and other institutions of higher education. (This is the function of the university grants commissions modeled on the former British body of that name.) Finally, a publicly-accountable buffer entity may be given authority over the chartering and, or accrediting of institutions, or of their programs or degrees. Accreditation, or the official recognition of some standard of minimal institutional (or program) quality, has in the US been delegated to voluntary, institutionally-controlled entities that serve much as "buffers" for the public regulatory and quality control purposes of the state and federal governments.

But the larger point of the above explication is that decentralization, or the devolution downward of governmental authority, has little meaning without specification of the particular object of the decentralization and to what level of government, or quasi-governmental but publicly-accountable buffer entity, the particular authority is to be devolved.

Decentralization in the Russian Federation

All of these factors enter into the willingness and/or ability of the Russian government to decentralize authority over universities and other institutions of higher education. The units of government to which Russia might decentralize begin with the 89 subjects of the Russian Federation. These subjects, according to the Constitution of December 1993, include 21 autonomous republics, six krays (provinces), 49 oblasts (regions), two cities of federal status (Moscow and St. Petersburg), one autonomous oblast and ten autonomous okrugs (districts). They differ considerably in size, natural extractive wealth and effective productive capacity (and thus in consequent tax–generating capability), as well as in the characteristics such as ethnic and linguistic identity and sense of historical territorial integrity. But the subject level, while critical in the delivery of basic education, has as yet little role in higher education.

The central government has clung strongly to control over the licensing-attestation-accreditation functions, including over the emerging private institutions of higher education. There appear as yet to be no real ministries or other agencies at the subject level challenging the central government for ownership, authority, or control over the Russia’s some 578 state institutions of higher education, although there may well exist a capacity in the future to move some of the advanced secondary vocational colleges, or technicums, into postsecondary status under subject-level agencies or ministries.

In as-yet-undefined ways, the subject governments are expected to assist in the "linkage" of university offerings to the needs of the regional economies. Thus, the September 1997 ministerial policy proposal assumed that the link between institutions of higher education, prospective regional employers, and executive officers of regional governments could be fostered by regional councils. It was further proposed that such a link could be institutionalized in a form of university trusteeship, extending some kind of university governance role to employer and subject representatives, possibly for the purpose of compensating for grossly inadequate funding from the central government with hoped-for new revenue from businesses and regional governments (Asmolov et. al. 1997, p.13). Yet the precise authority of these proposed councils was not clearly specified, nor had policies yet been devised for the protection of academic freedom or the prevention of state university resources being diverted for personal profit. The proposal was opposed by many institutional and public leaders as a tacit privatization of state universities. In any event, it does not appear as of the end of the 1990s that decentralization in Russian higher education means any significant devolution of authority to the subject level. Rather, according to an OECD (1998) review, as the central ministry sheds or devolves authority, it would seem more likely to be to the institution itself, or possibly to some as-yet-unspecified systems of institutions, while the role of Russia’s 89 subjects (the oblasts, Krays, and autonomous regions) in higher education remains unsettled but still minimal.

IV
Institutional Autonomy

Autonomy is related to both decentralization and privatization. As applied to public institutions of higher education, autonomy suggests institutional self-governance, or freedom from state control. The more autonomous the institution, the more it will be allowed by the state to establish its own policies and programs and spend its money (public and otherwise) as it sees fit. But as with decentralization, it matters greatly which domains of decision making are to be delegated to the institution under the guise of autonomy. The easiest to delegate--indeed, domains that are difficult for the state not to delegate--are the curriculum (that which is to be taught and learned for a given program or degree), the methods of instruction, and the objects of scholarly inquiry. On the other hand, the domain that the state is unlikely to delegate is the determination of mission (that is, whether the institution is to be a comprehensive research-oriented university, or a polytechnic oriented more toward teaching and applied scholarship, or some other kind of institution). The state is also unlikely to give up the right of ultimate oversight, or quality control, at least over higher education that is supported by public revenue--and perhaps, for the purpose of public consumer protection, over privately-supported higher education as well, although some governments may be willing to delegate that authority to a publicly-accountable buffer entity, as discussed below.

The traditionally contested domains—but where the trend in much of the world is toward greater delegation to the university, or toward greater institutional autonomy—are:

- the appointment of the highest executive officer (president, rector, vice chancellor)—specifically, the role of the faculty and institutional governing board over this decision;
the degrees and/or programs to be offered in accord with the established mission;
- the standards for admission to the institution or to certain programs (and indirectly the number of students that the institution may or must admit);
- the appointment of the faculty and the terms and conditions of their employment, including provision for academic freedom and job security; and
- the expenditure of revenues, including the right to allocate and reallocate funds among programs and between personnel and other expenditures.

There also may be a considerable issue as to whether "the institution" to which greater autonomy is being granted is: (a) the president or rector; (b) the governing board (if there be one); (c) the academic management of several constituent faculties or schools; or (d) the faculty-- as represented by some form of senate. The faculty, however, may have very disparate interests, as in the senior professorate versus the junior faculty. In fact, some of the faculty may resist a larger measure of autonomy to the institution if "the institution" is perceived to mean only the president, or management, and if they perceive themselves or their jobs to be better protected by the ministry or the government than by their "own" president, rector, or dean. Similarly, rectors or presidents may actually resist greater measures of autonomy if they believe these to be mere devices for abetting further governmental financial disinvestment, or if they believe their institutions to be more vulnerable than other institutions in the competitive, market-driven world of academic entrepreneurship, or if they perceive that the greater autonomy would go not to themselves, as management, but to the faculty (or perhaps even worse to a governmentally-mandated new governing council made up of faculty, staff, and students).

The role of quasi-public buffer entities may be critical in any national policy of enhancing institutional autonomy. A movement in the direction of greater university autonomy clearly means a weakening of the authority of the ministry and generally of the legislature or parliament. In theory, a buffer entity combines public accountability with institutional self-governance. Thus, a devolution of state authority from government or ministry to an entity such as a public governing board or a university grants commission is like a devolution of state authority to the institution to the degree to which the buffer entity, acting on behalf of "the public," embodies the traditions and the interests of the university (like a private university governing board), as opposed to the government itself. But such an entity can also view its role as essentially ministerial, serving a public interest at least in part by countering the self-interests of the institution and especially the faculty.

Thus, when a central ministry declares its intention to "enhance university autonomy," it matters considerably what it intends to shed and what it will continue to hold. Also, it matters greatly whether the central government or national ministry is truly granting institutional autonomy, or is more accurately described as decentralizing authority to a sub unit of government or to some kind of quasi-governmental entity—either of the latter two possibly turning out to be more intrusive over the affairs of the university than the central government.

University Autonomy in Russia

Absent viable subject ministries or established buffer entities to which the Russian Ministry can effectively devolve authority, the object of real devolution, at least in the mid and late 1990s, would seem to be the university itself. In large part, a significant increase in institutional autonomy in Russia is inevitable given the breakdown of ideological controls over the curriculum and the absolute imperative for there to be substantial supplementation of central governmental revenue, mainly from the entrepreneurial activities of the institution and its faculty. In addition, there remains the very large number of institutions that are owned and operationally (if not academically) controlled by ministries other than the Ministry of General and Professional Education. These institutions pose particularly thorny problems for the government as many of them are small, narrow, and inefficient, and some are increasingly deficient both academically and in their physical plants and other assets. Yet merger and closure remain politically volatile, the more so given other competing ministerial "owners." Thus, although there remain strong and significant central ministerial controls over the processes of attestation and accreditation, over the nature and the granting of degrees, and over the numbers of students to be admitted under both "regular" and fee-paying" status, other central controls, while still on the books, may be diminishing in effectiveness. Even the central determination of the base salaries and workload expectations of the faculty and staff, for example, is becoming almost moot as these salaries have become so grossly inadequate that other ways have to be found by the institutions to compensate faculty.

Institutional autonomy in Russia, while clearly much greater than in the former Soviet Union or even the early days of the Russian Federation, remains uneven. Table I shows some of the key changes in the recent (1990s) devolution of autonomy to the Russian universities (Bain 2001).


Table 1 [Full Page] about here


IV
Conclusion

Privatization, decentralization, and autonomy are powerful and related, but complex and multi-dimensional, ideas that are changing the relationship between governments and universities. Each of these dimensions is being driven in part by the need for more efficient and more responsive universities. Within these concepts may lie concepts that promise:

- a more responsive university—to the students, economic enterprises, and governmental agencies that need its students and its research;

- a better managed university—meaning a university that better empowers the individual faculty member and that maximizes the teaching, learning, and scholarship for its available resources;

- a more accessible university, promoting equality and social unity.

It remains possible, however, that out of these same concepts, in North America and Europe, as well as in Russia and other transitional nations, will come increasing austerity, less participation, less academic quality, a fragmentation of the national universities, and a loss of the university’s traditional unifying role that will not serve well the needs of any of these societies. The difference between these two scenarios may lie in the degree to which the government uses privatization, decentralization, and institutional autonomy to create more effective, efficient, and responsive universities—or, in contrast, as a cover for financial disengagement or a general collapse of state authority.


References



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Table 1
The Movement toward Greater Autonomy in Russian Universities

Former Soviet Centralized Model
Current (1998) Russian Model
Leadership, governance, and Status of Faculty
Rector is appointed by national ministry Rector elected by Conference representing faculty, staff, and students
Governance "top down" and imposed by ministry for all universities; authority held by rector and party leadership. Elected senate to be principal governing body; rector ex officio chair. Other governance machinery established by institutional charter.
Faculty employed for life. Faculty employed by contract.
Allocation of University Resources
Salaries established by state. Minimal base salary and workload set by state and guaranteed by Labor Code; can be supplemented by university with own funds.
Line item budget determined by state, tied to standard ratios of expenditure per unit. Very limited reallocation authority; no fiscal year carry-forward. Principle espoused of lump sum budgeting with substantial institutional reallocation authority; however, still no reallocation of major "protected" categories of salaries, taxes, or student stipends.
All funds from national government Non-governmental revenues (currently averaging some 25%.) encouraged from: (a) tuition, (b) sale of faculty training and research services, (c) sale or lease of institutional assets, and (d) fees from e.g. special courses, early entrance exams, or issuing credentials.
Curriculum
Curricular content and length of each program specified by state. Curriculum for approved programs established by faculty. State attestation and accreditation assure comparability and standards.
Standards and Numbers of Students
Admissions and total enrollments controlled by state for each program for each institution. Admission numbers for state institutional support and student allowances established by state for each institution. Admission of non-supported, fee-paying students up to institution, within state quota.
State entrance examinations administered by institutions State entrance examinations administered by institutions
Awarding of Degrees
Degrees awarded by state within narrowly established categories. Degrees still awarded by the state rather than the institution. Degrees are shorter, and conform more nearly to European and North American standards.

Endnotes