Higher Education and the
World Bank
Richard Hopper
Education Specialist
The World Bank
15 April 2007
Enrollment trends
Enrollment rates by income level (1980-2001)
70
60
High
Income
50
40 Upper Middle
Income
%
30
World Total
20
Lower Middle Income
10
Low Income
0
1980 1985 1990 1997 1999 2000 2001
Enrollment rates by region (1970-2001)
60
Eastern
Europe/Central Asia
50
48.6
40
Enrollment
Latin
30
America/Caribbean
25.2
20 22.4
Middle East East Asia/Oceania
14.6
10 10.7
Southern Asia
3.6
Sub-Saharan Africa
0
1970 1980 1985 1990 1995 1997 1999 2000 2001
Year
Equity
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
Tertiary Enrollment by Quintile
45. 0
Percenatage of 18-
40. 0
24 Year Olds
35. 0
Enrolled
30. 0
25. 0
20. 0
15. 0
10. 0
5. 0
0. 0
Spain Peru Mexico Brazil
Q1 - Poorest Q2 Q3 Q4 Q5 - Richest
Quality
Quality and relevance of studies
increasingly important
• Knowledge-driven economic growth…
– Requires higher 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
Changes in demand for job
skills 1960-1998
16
14
Expert Thinking
12
10
8
Percentile Change
6
Complex
Communication
4
2
Routine Manual
0
1969 1974 1979 1984 1989 1994 1998
-2
Routine Cognitive
-4
Non-Routine Manual
-6
-8
-10
Source: Autor, Levy, and Murnane (2003) “The Skill Content of Recent Technological Change: An Empirical Exploration,” Quarterly
Journal of Economics.
Divergence in returns to schooling
by education level in Latin America
from Holm-Nielsen et al. (2001)
130
120
110
Tertiary
100 Upper sec
90 Primary
Low er sec
80
70
60
1982 1984 1986 1988 1990 1992 1994 1996 1998
Finance
%
A
u
st
r
0.2
0.4
0.6
0.8
1.2
1.4
1.6
1.8
0
1
2
A alia
u
s
B Be tria
el lg
gi iu
um m
C
ze C (
ch an Fl)
R ad
ep a
D ub
en l
m ic
a
Fi rk
nl
a
Fr nd
G an
er c
m e
a
G ny
re
H ec
u
ng e
Ic ar
el y
a
Ir nd
el
an
d
It
al
Ja y
pa
K n
o
N M rea
et e
N he xic
ew rl o
a
OECD 1998
Ze nd
al s
N an
or d
w
P ay
o
P lan
or d
tu
g
Sp al
Sw Sw ain
i t ed
ze en
rl
a
Tu nd
rk
ey
U
K
U
S
Tertiary education spending relative to GDP,
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
Proportion of private enrollment 2003
Phi l i ppi nes
Kor ea
J apan
Indonesi a
Col ombi a
Indi a
Br az i l
Bangl adesh
Ni c ar agua
Par aguay
J or dan
Per u
Ec uador
Chi l e
Congo
Nepal
USA
Guat emal a
Thai l and
El Sal v ador
Mex i c o
Venez uel a
Ar gent i na
Hondur as
Rwanda
Mal asi a
Bol i v i a
Papua New Gui nea
Keny a
Zi mbabwe
Panama
0 10 20 30 40 50 60 70 80 90
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?
Importance of Science and Technology
Knowledge capacity as development strategy
Thousands of constant 1995 US dollars
14
Rep. of Korea
12
Difference
10
attributed to
8 knowledge
6
Difference
4 due to
2 physical
Ghana and human
0 capital
1960 1965 1970 1975 1980 1985 1990 1995 2000
Science R&D
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
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
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
Country analysis: Korea
1969 1977 1978 1979 1980 1981 1982 1983 1984 1985 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Education Projects (Projects 1-5) Support to Secondary and Vocational Schools
Heavy Machinery Project
Electronics Technology Project
Small and Medium Machinery Industry Project
Technology Development Project Series (Projects 1-3) Financial Intermediation Project
Industrial Finance Project
Education Sector Loan Project- Programs for S&T Education
Small and Medium Industry Bank Project Series
Technology Advancement Project Series (Projects 1-3)
Universities S&T Research Project
Health Technology Project
Vocational Education Project
Vocational Schools Development Project
Science Education and Libraries Computerization
Environmental Research and Education Project
Environmental Technology Development
1969 1977 1978 1979 1980 1981 1982 1983 1984 1985 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Knowledge economy
Economic Revolution Technological Revolution
Knowledge Economy
New Face of Higher Education
Fast Slow
Connected Isolated
Evolving Static
Quality-driven Seniority-driven
Agile Rigid
New
Opportunities
Knowledge for Development
Economic •Tariff and non-tariff barriers
1 Structure and •Property rights
Incentives •Regulation
•Universal basic education enrollment and completion
Education •Secondary enrollment, completion and quality
2 •Tertiary enrollment, quality, system flexibility
•Lifelong learning to update skills; multiple entry points
Information •Telephone capacity/capita
3 Infrastructure •Computers /capita
•Internet hosts /capita
Innovation •Researchers in R&D
4 System •Manufacturing trade as % of GDP
•Scientific articles/million pop.
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
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
Range of World Bank
interventions and investments in
higher education
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
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
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
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
Infrastructure
• Post-conflict reconstruction
– Leverage as opportunity to rethink pre-
existing system
• Construction of new institutions
• Installation or upgrading of information
technology
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
World Bank Lending for Tertiary Education
by Region, Fiscal 1990 – 2006
South Asia
Sub-Saharan Africa,
$909 million
$906 million
14%
14%
Middle East & North
Africa
$450 million
7%
Latin America & the
Caribbean East Asia & Pacific,
$1,749 million $2,221 million
26% 32%
Europe & Central
Asia, $438 million
7%
Ten Largest Borrowers for Tertiary
Education, Fiscal 1990 – 2006
Indonesia 750
Mexico 714
India 635
China 435
Korea, Republic of 352
Malaysia 311
Brazil 242
Chile 231
Colombia 220
Hungary 206
Millions of U.S. dollars
World Bank Lending for Tertiary Education
by Region, Fiscal 2001 – 2006
Sub-Saharan
Africa
$223 million
South Asia 15%
$335million
22% East Asia &
Pacific
$109 million
7%
Europe & Central
Middle East & Asia
North Africa $37million
$88 million 2%
6%
Latin America &
the Caribbean
$728
48%
Ten Largest Borrowers for Tertiary
Education, Fiscal 2001 – 2006
Mexico 409
India 247
Colombia 194
Indonesia 96
Chile 87
Tunisia 42
Afghanistan 38
Ethiopia 37
Ghana 30
Sri Lanka 30
Millions of U.S. dollars