Higher Education and the World Bank

1. Higher Education and the World Bank Richard Hopper Education Specialist The World Bank 15 April 2007

2. Enrollment trends

3. Enrollment rates by income level (1980-2001)

4. Enrollment rates by region (1970-2001)

5. Equity

6. Equity remains a problem • Mexico (2005) • Only 1% of 15-24 year olds from poorest quintile attend tertiary education • While 32% from richest quintile attend • USA (2005) • Only 8.3% of students from the poorest income quintile are likely to access top-ranked universities • While 50% of richest quintile are likely to attend • France (2005) • Only 6% of students from the lowest quintile are likely to attend a Grande Ecole • While 15% of the middle quintile are likely to attend

7. Tertiary Enrollment by Quintile

8. Quality

9. Quality and relevance of studies increasingly important • Knowledge-driven economic growth… • Requireshigher labor productivity and an increased demand for skilled workers • Changes the education and training needs of the labor force as skills become obsolete and require updating • Aging populations and the need for updating skills means a more diverse set of clients (students) in tertiary education • lifelong learning

10. Changes in demand for job skills 1960-1998 Source: Autor, Levy, and Murnane (2003) “TheSkill Content of Recent Technological Change: An Empirical Exploration,” Quarterly Journal of Economics.

11. Divergence in returns to schooling by education level in Latin Americafrom Holm-Nielsen et al. (2001)

12. Finance

13. Tertiary education spending relative to GDP, OECD 1998

14. Poor internal efficiency remains a waste of public resources • Proportion of enrolled students who never finish their studies: • 75% in Argentina • 60% in Morocco • 30% in Australia • Proportion of students who graduate on time: • 13% in Italy

15. Proportion of private enrollment 2003

16. Longstanding challenges • How can governments develop a financially sustainable tertiary education system in the face of expanding demand? • How can governments maintain or improve the quality of tertiary education under such financial pressures?

17. Importance of Science and Technology

18. R&D Science Development and Creation Design & Engineering Technician & Craft Skills & Capabilities Science Use, Operation and Maintenance Basic Operators Skills and Capabilities Higher levels require higher-order capacity of human resources

19. S&T Lessons From World Bank Operations • Developing human capital is an essential pre-requisite for S&T capacity building • Sustained long-term engagement is key • Specific investment loans have better results than budget support • hands-on rather than arm’s-length • Comparative advantage is created not given • Salmon, grapes in Chile • Cut flowers in Tanzania • Electronics in Korea and Taiwan • Interventions work best when grounded in each country's own S&T and industrial strategy

20. S&T Challenges • Ability to produce new knowledge (R&D) is important, yet absorptive capacity of enterprises and labor force must be developed – spillovers are not automatic • Few centers of excellence or competition among many institutions? • Tension between expanding the supply of skilled workers and industry demand for skilled workers • chicken and egg problem • brain drain vs. skill shortage • Vietnam • supply with limited demand • Thailand or Malaysia • demand with limited supply • Long term commitment • S&T requires long-term political engagement • >10 years for capacity to affect development

21. Country analysis:Korea

22. Knowledge economy

23. EconomicRevolution Technological Revolution Knowledge Economy New Face of Higher Education Fast Connected Evolving Quality-driven Agile Slow Isolated Static Seniority-driven Rigid New Opportunities

24. Economic Structure and Incentives Education Information Infrastructure Knowledge for Development • Tariff and non-tariff barriers • Property rights • Regulation 1 • Universal basic education enrollment and completion • Secondary enrollment, completion and quality • Tertiary enrollment, quality, system flexibility • Lifelong learning to update skills; multiple entry points 2 • Telephone capacity/capita • Computers /capita • Internet hosts /capita 3 • Researchers in R&D • Manufacturing trade as % of GDP • Scientific articles/million pop. Innovation System 4

25. Crisis prevention vs. coherent policy • Many countries tend to be reactive • Lack of national policy debate and framework for higher education lead countries to react to problems • The World Bank helps governments avoid reactive practices by developing and implementing higher education strategies • More flexible systems and institutions • Focus on governance, finance (efficiency), quality (innovation), and equity

26. State role in strategy development • Describing the status quo • Identifying issues, diagnosing problems • Presenting potential options • Engaging stakeholders in dialogue • Developing a shared vision • Investing in elements that improve… • Institutional agility • Education quality • Internal and external efficiency • Equity • Initiating innovative resource distribution mechanisms that focus on organizational behaviors • Engaging stakeholders in throughout the process

27. Range of World Bank interventions and investments in higher education

28. Governance • Move from state control to state oversight • Encourage private sector development • Ease restrictions on private providers • Develop reasonable oversight for private sector so as not to stifle innovation or growth • Maintain equal standards for public and private provision • Build institutional management capacities at public institutions in support of greater autonomy • Governing board development and training • Accountability systems (stakeholder / civil society membership) • Strategic planning exercises • Leadership training • Financial management / procurement capacity • Management information systems • Curriculum reviews and revisions • Human resources management • Modular academic programs (LMD, credit systems, lifelong learning) • Admissions reform (entrance exams, etc.) • Civil service adjustment

29. Finance • Investment budget mechanisms • Formula funding • Bloc grants • Competitive funding • Linked to quality improvements or government priorities • Research funding • Recurrent budget mechanisms • Performance-based financing • Demand-side financing • Student loans • Vouchers, scholarships • Cost recovery mechanisms

30. Quality • Centers of excellence • Quality assurance systems (accreditation) • Establish quality assurance systems • Reform existing quality assurance systems • Develop institution-level quality practices • Develop professional licensing capacity • Link financing to quality assurance determinations • Develop benchmarking capacity • Develop system and institution performance indicators • Develop measurements for student learning outcomes • Encourage mutual recognition systems • Faculty training and upgrading of skills to improve pedagogy, teaching methods, student learning • Develop competency frameworks

31. Efficiency and equity • Expansion of private sector • With parallel finance innovations • Efficiency gains in public sector • Double sessions • Repetition reduction • Non-university tertiary education • Develop pathways to link technical vocational education with university education • Distance education, non-traditional learning • University partnerships and sandwich programs • Labor market observatories • Graduate tracer surveys • Support public-private partnerships between universities and industry

32. Infrastructure • Post-conflict reconstruction • Leverage as opportunity to rethink pre-existing system • Construction of new institutions • Installation or upgrading of information technology

33. Science and technology • Millennium Science Initiatives • Universities and research institutes • Science and technology projects • Universities, research institutes, industry • Agricultural technology investments • Private sector development investments

34. World Bank Lending for Tertiary Education by Region, Fiscal 1990 – 2006

35. Ten Largest Borrowers for Tertiary Education, Fiscal 1990 – 2006

36. World Bank Lending for Tertiary Education by Region, Fiscal 2001 – 2006

37. Ten Largest Borrowers for Tertiary Education, Fiscal 2001 – 2006