# **Box 14. UNAM’s failed move to raise tuition**

<mark>A 10-month-long student strike during 1999 and 2000 over a move to increase tuition at Mexico’s largest university,</mark> _<mark>Universidad Nacional Autónoma de México</mark>_ <mark>(UNAM), illustrates the complexity of</mark> implementing finance reforms.

<mark>In March 1999, the University’s governing council passed a general bylaw on payments, thereby breaking a tradition of virtually no tuition for the institution’s student body of roughly 300,000. By April, UNAM found itself paralyzed by a student strike, and some strikes in solidarity had spread</mark> to other tertiary institutions in Mexico.

<mark>Students denounced the tuition effort as authoritarian and attacked the approval process as lacking in transparency. Of particular controversy was the fact that the Council had met off campus for the first time ever when making the decision. Of the 35 members not present at the meeting, 28 were student representatives. In the end, the university administration gave in to student demands</mark> by making new tuition voluntary.

<mark>Although less contentious than cost recovery, the painful and lengthy confrontation at UNAM illustrates a need to consider the political economy when tying funding to performance. Legitimate decision-making implies a complex dynamic of university politics in which a broad range of interests and academic perspectives are openly expressed and taken into account.</mark> _Source: Levy et al. (1999) and Ordorika (2002)_ Resistance can be expected from groups that stand to lose from reform. Notably, the success of changes to the financing of higher education depends on the incentive system and the way incentives are shared. Financing reforms are generally most successful when members of the dominant, or powerful group are convinced that they will benefit and those who are adversely affected are less influential (Varghese 2004).

Resistance may also arise from those that will be better off as a result of the reform. Perhaps this group is not well informed, or dislikes change and uncertainties. Thus, information and actions to demystifying suggested changes to institutional funding is important in the preparatory phase. One strategy to build consensus is to offer financial compensation. When groups that tend to lose from the reform receive some form of compensation, they might be willing to give up their resistance. This strategy is often used in practice, but naturally lowers the efficiency gains from the reform. Another approach to garner institutional support is to introduce performance funding, at least for the first few years, as additional funding for tertiary education.

Prior to nation-wide introduction, results-based funding models can often be improved through small-scale experiments. Pilots and phased implementation create opportunities for further refinement and adaptation of the mechanism and scaling up based on evidence and lessons learned. Specialized training in data collection, reporting and analysis may be needed in tertiary institutions and ministries prior to implementation. Also, management structures may need to be updated to operate the system. Careful specification and a common understanding of all elements of the system are key to success. Clearly defined responsibilities make it apparent to everyone involved what, when, how and by whom performance data will be collected and reported to supervisory authorities.

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