The Rationale for Higher Education Investment in Ibero-America

A key higher education policy question is about the financing of this sector. Who, why and how higher education should be paid for are debated around the world by governments, the academic community, students, experts and civil society. This is true of Ibero-America. The meetings of their heads of state or governments have, on various occasions, pronounced on this issue. And within the institutions themselves and on the streets of the principal cities in the region, students and professors have voiced their demands for greater funding. This document advocates the need for shared higher education funding – between the state and the private sector, (including students and their families), in a proportion that corresponds approximately to the private and social benefits generated. The proposed public/private cost allocation (1:1) is based on econometric calculations of the respective benefits generated by tertiary education, with approximately one half of the total being private benefits and the other half social benefits and public externalities. From this it follows that HEIs should be funded in the same proportion, diversifying their sources so that the state (taxpayers) and the private sector (households or families, students and graduates) provide 50% each. But the above only makes sense if higher education can ensure that it provides the anticipated private and social benefits and public externalities. The bottlenecks that stand in the way of achieving these expectations have to be removed. So the State should allocate resources in terms of reaching these objectives, and implement policies that encourage institutions to reach the proposed outcomes and standards. Un point central du debat sur les politiques d’education superieure ou tertiaire a trait au financement de ce secteur. Trois questions majeures alimentent les discussions entre gouvernements, chercheurs, etudiants, experts et membres de la societe civile a travers le monde : qui doit financer, pour qui et comment. Et l’Amerique latine ne fait pas exception. Les chefs d’Etat et de gouvernement se sont prononces a plusieurs reprises sur ce sujet lors des sommets iberoamericains. Les enceintes universitaires et les paves des rues des principales villes de la region ont egalement servi de tribune aux etudiants et professeurs reclamant davantage de moyens financiers pour les universites. Le document present plaide pour un partage du financement du systeme educatif superieur entre l’Etat et les particuliers, c’est-a-dire les etudiants et leurs familles, en fonction des benefices prives et sociaux generes. Le modele de distribution des couts (1:1) entre le prive et le public s’appuie sur le calcul econometrique des benefices respectifs generes, qui se partage de facon egale entre benefices prives et benefices sociaux ou externalites publiques. La conclusion qui decoule de cette analyse consiste a suggerer une diversification des sources de financement des Institutions d’education superieure (IES) de maniere a garantir un partage egal des couts entre l’Etat (les contributeurs) et les particuliers (menages ou familles et etudiantes/diplomes). Ceci n’est valable bien entendu qu’a condition que le systeme educatif fonctionne de facon optimale et genere effectivement les benefices attendus par les individus et la societe. Les obstacles qui entravent un tel fonctionnement doivent etre leves. Il est du ressort de l’Etat d’allouer les ressources necessaires pour parvenir a ces objectifs, et de mettre en oeuvre des politiques publiques qui permettent aux institutions de repondre aux exigences et standards proposes.