Abstract
With the development of the human capital theory in the 1960s, education policy and its impact on societal advancement became an integral part of the economic policy. Under the assumptions that education leads to increased individual productivity, that earnings are a proxy for productivity (i.e., the more productive you are, the more you will earn, the more you earn, the more preferences one would satisfy and as such enhance your well-being), and that raising average and total incomes generate economic growth, education continues to translate into both a good individual investment and a key element of societal advancement. Regardless of how performance is defined, in an era of tight public budgets, it is not surprising that to bring private sector’s skills and control into higher education and to tap into private money was fathomed to represent the new panacea for improved efficiency and financial capacity. Attracting less controversy than privatization, attempting to recast the tension between the efficient and creative private sector and the bloated, stagnant public one, new management techniques are being introduced. Recognizing the fact that (higher)education and power are intertwined in a process of reciprocal legitimization is nothing new. Economically “parasitic,” universities have always relied on external sources of support, a support that brought to a varying extent also a certain degree of control from the sources of power in society, be it the church, the state or more recently the market. We believe that the idiographic focus on the qualitative hierarchical heterogeneity of the human psyche can enable us to conceive economics, education, and other social constructs alike in a holistic, multi-layered dynamic way, non-reducible, neither downwards to preferences/ behavioral linearity nor upwards, portraying individual as diluted into the collective, “the public.”
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Notes
- 1.
- 2.
The public sector deficit translates the difference between the annual income and expenditure.
- 3.
New Public Management (NPM) translates a governance system that emphasizes external guidance in the form of semi-external university councils, competition for resources, and hierarchical control, while manifesting a low level of direct regulation (state control) and reduced powers of the individual professors (Osborne and McLaughlin 2002; De Boer et al. 2007).
- 4.
Private equity is a generic term used to identify a family of alternative investment methods, with the source of investment capital being from high-net-worth individuals and institutions for the purpose of investing and acquiring equity ownership in companies. Partners at private-equity firms raise funds and manage these funds to yield favorable returns for their shareholder clients, typically with an investment horizon between four and seven years.
- 5.
According to the World Bank, public–private partnerships (PPPs) are a mechanism for government to procure and implement public infrastructure and/or services using the resources and expertise of the private sector. PPPs combine the skills and resources of both the public and private sectors through sharing of risks and responsibilities. This enables governments to benefit from the expertise of the private sector and allows them to focus instead on policy, planning, and regulation by delegating day-to-day operations.
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A joint education program is the least capital intensive and integrated method for a university to enter a foreign education market, usually by providing teaching courses and materials accreditation; Joint institutions without legal status, also known as a “campus-to-campus” model, involve establishment of branch campuses; Joint ventures with legal entity status are the most capital-intensive forms requiring establishing a separate legal entity for the joint institution, at the same time conferring also greater autonomy over its academic content.
- 7.
According to the Regulations of the PRC on sino-foreign investments and the National Plan for Medium and Long-Term Education Reform and Development 2010–2020.
- 8.
Warren Buffett: 1992 Letter to Berkshire Hathaway Shareholders.
- 9.
A spillover benefit or externality is an effect of one agent’s behavior on the welfare of another agent without an agreed compensation between them; Heyne et al. (2014) words, a positive externality is the unintended benefit enjoyed by a third party to an exchange”.
- 10.
Casemix is a system used in healthcare which measures hospital performance by assigning an economic value to a specified number of diagnostic categories; as a result, the hospitals are paid according to the number and type of patient treatments provided (Collyer and White 1997).
- 11.
National Health Service (NHS) represents a form of managed competition introduced in the UK which separates the purchaser of health care (District Heath Authorities) from the providers (hospitals). Through this segregation, the District Health Authorities responsible for the health care of a given population buy health care services from both private and public hospitals which are forced to compete for contracts (Giaimo 1995).
- 12.
In the words of Peter Berger (1963): “people exist in society and society in people. For simplicity’s sake, we might call the one societal reproduction, the other societal production: society is reproduced (replicated over time and space) by what people produce (behavior, social relationships), which then shape people’s future production and, by further regression, society’s continued reproduction, and so on.”
- 13.
Typically, education stakeholders fall into two categories: direct stakeholders, such as students served through education programs, and indirect stakeholders, individuals and groups of people who benefit indirectly from the university’s programs (e.g., professors, parents and families of student participants, the larger community), and therefore have a long-term stake in the organization’s success.
- 14.
Boundaries are ontologically dependent on the entities they bound (Varzi 1997).
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Nae, G., Nae, V. (2018). Building the (Higher)Education Stakeholder: The Realities of Economics in Higher Education. In: Valsiner, J., Lutsenko, A., Antoniouk, A. (eds) Sustainable Futures for Higher Education. Cultural Psychology of Education, vol 7. Springer, Cham. https://doi.org/10.1007/978-3-319-96035-7_9
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