Malcolm Gladwell on College Rankings

Read a very interesting article (link here) on the nature and underlying assumptions of college rankings. As in many areas of policy -and life-, the weighs allocated to specific factors reflect political values.

KAL´s Cartoon on elections in 2012

Top of the Class

"Top of the Class", a very interesting speech -and article- on the rapid development of world-class universities in Asia. As it can be seen, it is not only a matter of money but also a matter of political culture and regional governance arrangements. Certainly, in Latin America some of the strategies followed by Asian countries (e.g. China) would be politically unfeasible, however, that should not be an excuse to put the issue on the agenda and discuss it.

The study of undergraduate Economics in Mexico: recent trends

According to international studies[1], undergraduate degrees awarded in Economics have declined significantly in diverse countries from 1990 to 1999. Siegfried and Round (2001) documented such declines in Australia, Canada, United States and Germany in the last decade. The authors tested various hypotheses, for instance, trends in GDP grow, the salience of economic crises, labor market expectations, academic rigor and mathematical requirements, and the increasing popularity of “substitute disciplines” (Finance, Business Administration, and International Affairs, among others). Apparently, the variables that better predict such declines in the aforementioned countries are the increasing salience of “substitute disciplines”, as well as the increased academic rigor and mathematics requirements in the study of Economics.

Based on official data, the declining trend in the study of Economics is also present in Mexico. Even though statistics show that first year enrollment in Economics has increased 17% -from 22,644 students in 2000 to 26,475 students in 2010-, total higher education enrollment has increased 54% in the same period; hence, enrollment in Economics has grown only a third relative to the growth of total enrollment in Mexican universities. As a consequence, the percentage of Economic students relative to total enrollment in higher education has diminished significantly in the last nine years. In 2000, around 1.3% of all undergraduate students in Mexican higher education were pursuing Economic degrees; by 2009 the share is 1 per cent. Moreover, in terms of degrees awarded, in 2000 the share was 1.4% of total undergraduate degrees; by 2009 the share was reduced to 0.8 per cent.

To put the above data in perspective, available data shows that in the decade from 1990 to 2000, in average, in the United States 2.2% of all undergraduate degrees awarded were in Economics. Meanwhile, in the decade from 1999 to 2009 in Mexico only 0.95% of all degrees awarded were in the field of Economics. In my view, the same hypotheses proposed by Siegfried and Round could be explored in Mexico in order to explain the decline. In Mexico -as in Australia, Canada, United States and Germany-, there has been a growing popularity of “substitute disciplines”, and the academic requirements and mathematical rigor of Economics has been also increasing. Nevertheless, specific studies are needed in order to see how the data fit the hypotheses.

[1] Siegfried, J. J. & Round, D. K. (2001) International Trends in Economic Degrees during the 1990´s. The Journal of Economic Education, Vol. 32, N0. 3, The Scholarship of Teaching Economics (Summer, 2001), pp. 203-218.

Budget Reform in Mexican Higher Education: Peril and Promise

A dominant theme of Mexican higher education in the 90´s and in the 21st century has been financial distress. Higher education faces problems throughout the world: universities are underfunded, rising worries about quality; student support is inadequate; the proportion of students from disadvantaged backgrounds is lamentably small (Barr, 2005). Also, the financing of universities in many countries is regressive since the money comes from general taxation but the major beneficiaries come from better-off backgrounds (Barr, 2005). Higher education finance is therefore salient to an extent that it is timidly addressed in many developing countries, because of its politically sensitive nature.

Around the world, a cause of higher education´s austerity is the increasing scarcity of public revenue (Johnstone, 1998), a function, in turn, of competition from several other societal needs. In political terms, tax funding leads to under-resourcing because higher education will always lose out to competing and politically more popular claims (Barr, 2003).

Within this context, a number of developed and developing countries have undertaken significant transformations of the financing of their tertiary educational systems. In most nations, the goals of such reforms have been: (1) to implement budgeting process based on performance indicators, and (2) to generate additional sources of revenue.

In the past eight years, the Mexican federal government has made important efforts to increase the national spending for public higher education institutions. In 2000, Congress enacted a law that requires the State to invest at least one per cent of the GDP in public higher education -currently federal investment reaches the 0.68 per cent of the GDP. Particularly, in the past three years Mexican Congress has increased the funding for higher education institutions by almost 15 per cent, amounting 4.5 billion dollars more, in comparison to 2006.

However, these fiscal efforts have not yet been accompanied by a deep financing reform in higher education. Still, year to year, the presidents and directors of higher education institutions go to Congress to lobby for extra resources. Every year, they argue, the very existence of their universities is in jeopardy if budget resources do not increase. In some cases this is true, but in some others such claim is just a political maneuver. At the end of the day, we cannot blame university leaders for this behavior; they are just reacting to the incentives in place.

The perverse incentive system is as follows: the Mexican Department of Finance prepares and presents a budget that is underestimated, knowing that public universities are going to ask for more. Aware of this, universities prepare their lobbying strategy well in advance during the year, distracting themselves from other central academic issues. The end result is usually a budget very close to the one originally planned by the Department of Finance, but after a fierce political battle, where many people get hurt -politically speaking of course.

Unfortunately, this perverse system of incentives only delays the deep reform that our higher education budget process urgently needs. There have been many interesting proposals on the table in the past few years, in order to correct the situation. Perhaps the most relevant is the implementation of multi-year budgets, designed for some special academic and research projects. This mechanism is already in use in some OECD countries, as well as in Brazil.

Negotiations will be hard in order to implement such a policy, however, it is worth it. Multi-year budgets can provide public higher education institutions with a very scarce resource in Mexico: financial certainty for long term planning.

The bad news is that any attempt to reform the higher education budget process that does not include a series of reforms within the higher education institutions is incomplete. The federal budget process needs to change, yes; but we also need to improve the way public universities generate their own sources of revenue. So far, only roughly 15% of resources for public higher education come from private sources, compared to countries such as Chile (84%), Korea (75%), and the United States (65%).

In short, if we really want to develop a world-class higher education system in Mexico, we cannot solely rely on fiscal revenue. As observed by Barr (2003), around the world higher education will always lose to other more pressing social needs in the competition for fiscal revenues. Hence, attempting to develop a system of great universities solely based on public revenue is building on shaky grounds.

References

Barr, N. (2005). Financing higher education. Finance and Development, 42(2). Retrieved from http://www.imf.org/external/pubs/ft/fandd/2005/06/barr.htm

Barr, N. (2003). Financing higher education: Comparing the options. United Kingdom: London School of Economics and Political Science.

Johstone, B. (1998). The financing and management of higher education: A status report on worldwide reforms. Washington D.C.: The World Bank.

  

GDP fetishism in education

An economist´s simplest answer to questions about the well-being of people is the gross domestic product, or GDP, per person of each country. However, as we might suspect, GDP-based statistics do not reveal the whole story about how satisfied people really are with their living standards. According to the Report by the Commission on the Measurement of Economic Performance and Social Progress, in recent years economists and statisticians have been looking at alternative measures of well-being, even "happiness", a notion that it was seemed absurd to quantify. Thus, the tendency is to pursue new techniques that produce more qualitative data on the issue at hand, being this national well-being, education, or health.

Higher education policy in Mexico, especially at the Legislative level, is still fixated with traditional GDP-based statistics. The debate usually revolves around the issue of how far -or how close- are we from the goal of investing one percent of GDP in higher education (currently we invest 0.67 percent). I argue that if we want to rapidly advance on the improvement of quality, relevance and equity in tertiary education, we must pay much more attention to other, more qualitative, policy measures.

Instead of solely focusing on measures such as the percentage of GDP invested and/or the expenditure per student in higher education, we must rely on "soft" measures as well, such as student learning outcomes, teacher-student interactions, and even student satisfaction at a given institution. This would give a clearer picture of how different universities compare to one another, and will reveal the extent of the impact of public money invested on the desired educational goals. The Commission´s Report gives interesting insights of the implications of such soft measures.

The myth of the 8 per cent revisited

On a recent trip to Paris, for the UNESCO´s World Conference on Higher Education 2009, I talked to diverse UNESCO´s higher education experts on the topic of the mythical 8 per cent. To my surprise, I learned that the organization has in fact recommended a fixed percentage of the GDP as educational investment, however, it is not the 8 per cent. During the World Forum on Education that took place in Dakar in 2000, UNESCO recommended developing countries to gradually reach 6% of GDP as investment in education, in order to universalize basic education. Mexico has already universalized basic education, therefore, this recommendation should not apply to our country. Plus, Mexico already invests in education more than 6% of GDP -including private investment. Hence, I insist that our education policy priorities should move away from reaching mythical investment percentages.