The past year has seen several controversies in India’s higher education sector. These pertain to the selection of institutions for full or partial autonomy or recognising “Institutions of Eminence”. The debate essentially centres around one question: Should institutions of excellence be about good students, with little focus on infrastructure, or should they be about world-class facilities that only a select few can afford? In other words, is education a merit good or should education policies follow the public choice theory?
Introduced in the mid-20th century by economist Richard Musgrave, the merit goods concept states that policies dealing with services like education and health should focus on people’s needs rather than their ability to pay. In contrast, the public choice theory, that has evolved in the past two centuries through the works of economists like Knut Wicksell, Duncan Black and James M Buchanan Jr, elucidates the utilitarian concept in social welfare. In recent times, the work of Buchanan Jr, along with the ideas of billionaire industrialist, Charles Koch, has been instrumental in pushing the public choice theory to the forefront of government policies in many parts of the developed world. The theory has influenced the privatisation of pension, healthcare and higher education in the US.
None of these theories are perfect. The proponents of merit goods felt the tremors of the dissolution of the USSR, while the financial crisis of 2008 has pushed public choice theorists into contemplation. Most of the English-speaking world has followed in the footsteps of the US, while the non-English part of the developed world has kept the idea of merit goods alive.
Both schools accept that privately funded education can never become the backbone of a nation’s education system. It can, however, reduce the social burden by providing quality education to a willing few. Such institutions can also provide benchmarks for public sector institutions. In the US, for example, Harvard, MIT, Stanford, Yale, Princeton, Brown and other Ivy League colleges set the standards in higher education. However, it took Harvard University some 300 years to become what it is today. Stanford University took more than 50 years to establish itself among the top global universities. However, once they proved their mettle, fees, scholarship, and most importantly, recognitions fell in place.
There are no shortcuts towards the creation of world-class universities. The ability of private higher education to attain the standards of their counterparts in the US and other parts of the developed world will depend on the willingness of the philanthropists towards giving them the long-term cushion of sustenance. Examples like BITS Pilani and the Tata Institute of Fundamental Research show such philanthropy in excellent light. However, the pressure of revenue generation, along with the demands of profitability, has pushed many a private sector educational institution from deviating from its original lofty goal.
The question that we need to ask is not whether we want India’s private universities to become like Ivy League colleges. Instead, we should ask if we are ready to give these institutes the environment, time and resources to work on their original vision. The idea should be to give them the much-needed autonomy and enable them to flourish — not merely recognise them as institutions of eminence.
Simultaneously, the government needs to ensure that merit goods like quality higher education do not end up at the mercy of public choice theory. Policies should be nuanced enough to create the much-needed environment for private education, they should enable these institutions to attain world-class standards and, in the process, also set a benchmark for public institutions. At the same time, the government needs to be cautious of crony capitalism in the education sector. For this reason, it should desist from recognising greenfield institutions in the education sector.
Philanthropists need to understand the long-term nature of higher education goals. A premature push for recognition or excessive emphasis on revenue generation will only lead to mediocrity.