Vouchers, Tests, Loans, Privatization-Will They Help Tackle

Prospects (2009) 39:4767 DOI 10.
1007/s11125-009-9117-y OPEN FILE
Vouchers, tests, loans, privatization: Will they help tackle corruption in Russian higher education?
Ararat L. Osipian
Published online: 1 October 2009 UNESCO IBE 2009
Abstract Higher education in Russia is currently being reformed. A standardized computer-graded test and educational vouchers were introduced to make higher education more accessible, fund it more effectively, and reduce corruption in admissions to public colleges. The voucher project failed and the test faces furious opposition. This paper considers vouchers, standardized tests, educational loans, and privatization as related to educational corruption. Many criticize the test for increasing educational corruption, but it is needed to replace the outdated admissions policy based on entry examinations. This paper also considers the growing de facto privatization of the nations higher education system as a fundamental process that should be legalized and formalized. It suggests that the higher education industry should be further restructured, and decentralized and privatized, and sees educational loans as a necessary part of the future system of educational funding. Keywords Corruption Education reform Russia
Introduction Throughout the world, higher education is undergoing a process of change, which includes reforms in access, quality assurance, nancing, governance, management, legislation, and the forms of property in higher education. Massication of higher education in less developed nations and processes of restructuring and privatization in the developed ones, raise important questions of quality control and corruption. These issues are also characteristic of Russian higher education. Until recently, higher education in Russia was funded solely by the state; access to it was free and competitive. The reforms of 1991 created private and public for-tuition programmes and led to further massication of higher education. Currently, 7.5 million students attend higher education institutions (HEIs). In 2007, 54% of students paid for their own education; the state paid for the other 46%. Between 1989 and 2000, the share of people with higher education degrees participating in the
A. L. Osipian (&) Vanderbilt University, Peabody #514, 230 Appleton Place, Nashville, TN 37203-5721, USA e-mail: ararat.osipian@vanderbilt.edu
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labour force almost doubled to 25% (Sandgren 2002; Ministry of Education and Science of the Russian Federation 2007). Several authors, including Gounko and Smale (2006), Tomusk (2003), and Kniazev (2002), have described recent legislative changes and reforms in Russian higher education. Corruption in Russian higher education is an established fact, acknowledged by the authorities and discussed openly in the media. It occurs on such a scale that it creates signicant problems for the education sector, and for society overall. Nor is any decline in sight. Explanatory theories are needed to understand this phenomenon of corruption, to analyze the existing situation, and to design and implement solutions. This article focuses on corruption in Russias higher education sector and offers a grounded theory to explain its fundamental causes. It also suggests some changes that will make it possible to curb this corruption.
Corruption in higher education At the start of the current century, scholarly literature on corruption in higher education was non-existent. Waite and Allen (2003) stated that discussions of the issue seemed to be entirely absent from the literature on educational administration. Since then, some pioneering work has been done on this issue. Heyneman (2004) classied the major forms of corruption, based on the functions of higher education. Petrov and Temple (2004) reviewed corruption in higher education in Russia and Azerbaijan, focusing on need-based bribery versus extortion. Surveys of students regarding corruption have been conducted in various regions, from Kaliningrad in the West to Kamchatka in the East (Kan et al. 2006). Hallak and Poisson (2002, 2007) developed an exhaustive list of the forms of corruption in the education sector throughout the world (Osipian 2008b). Heyneman (2007) used interviews in selected HEIs in Georgia, Kazakhstan, and Kyrgyzstan as a basis for qualitative research on corruption in higher education, and Heyneman et al. (2008) studied the impact of corruption in higher education on personal income in Central Asia. The denition of corruption in education includes the abuse of authority for material gain (Anechiarico and Jacobs 1995); more broadly, it is the abuse or misuse of public ofce or public trust for personal or private gain. Heyneman (2004) points out that Because education is an important public good, its professional standards include more than just material goods; hence the denition of education corruption includes the abuse of authority for personal as well as material gain (p. 638). Petrov and Temple (2004) apply a narrow denition in which corruption always implies illegality. I dene corruption in higher education as a system of informal relations established to regulate unsanctioned access to material and nonmaterial assets through abuse of the ofce or of public or corporate trust (Osipian 2007a, p. 315). This denition also facilitates an analysis of education corruption in the private sector. Organizational adaptation to resource decline in Russian universities occurs along with growing corruption (Morgan et al. 2004). Many forms of corruption may be found in higher education in Russia, including: bribery in admissions and grading, unauthorized private tutoring, embezzlement, extortion, fraud, nepotism, clientelism, patronage, cronyism, favouritism, kickbacks, cheating, plagiarism, misconduct in research, preferential treatment, sexual and ethical misconduct, transgressing rules and regulations, bypassing of criteria in selection and promotion, ghost instructors, breaches of contract, provision of false information, discrimination, abuse of university property, monopolization in academic publishing and distribution of textbooks, misallocation of public resources, and gross waste. The Russian media have reported on all of these forms of corruption in
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education (Osipian 2008c, g, h). Corruption affects not only college degrees, but graduate degrees too. Russia has a growing market of dissertations for sale (Osipian 2009i). In fact, politicians themselves contribute to the corruption of doctoral education by acquiring or simply buying doctoral dissertations and doctoral degrees (Osipian 2009g). A number of Chinese scholars, including Gong (2007), Li (2007a), Li (2007b), Wang and Chen (2007), Wang (2007), Xia and Feng (2007), Xiao (2007), Yuan et al. (2007), and Zhu (2007), present different viewpoints on academic corruption, concentrating mostly on plagiarism and a weak research orientation, as well as administrative control of HEIs. Similarly, US scholars are concerned with academic corruption (see, for instance, Anderson 1992; Sykes 1988; Washburn 2005; Osipian 2009b, h); they have yet to investigate a wide range of corruption in admissions, examinations, graduation, and nancing, types of behaviour that involve bribery, embezzlement, and fraud. Between 2000 and 2005, over 8,000 economic crimes in education were reported in Russia. In 2005 alone, more than 3,000 crimes were committed, including 849 cases of bribery and 361 cases of embezzlement, gross waste, and misallocation of public funds (Newsru.com 2006a). Table 1 provides data on corruption in the education sector in Russia in 2001 and 2005.
Table 1 Characteristics of everyday market corruption in the Russian education sector, 2001 and 2005 Indicator Secondary education 2001 Supply of and demand for corrupt services Corruption risk (risk of being subjected to corruption) Corruption demand (readiness to bribe) Annual volume of everyday corruption markets Market size, in $ million US Total market share Amount of average bribe (in rubles) by sector Value Rank* Percentage change Corruption intensity within corruption markets Value Rank** Percentage change Demand on public services in corrupt markets (percentage) Value Rank*** Percentage change 6.1 9.0 2.9 12.0 -52.5 8.1 4.0 7.4 6.0 -8.6 2.2 1.0 0.9 5.0 2.2 0.8 10.0 0.9 6.0 -0.3 1238.0 7.0 2312.0 8.0 1.6 4305.0 2.0 3869.0 4.0 -0.2 70.1 0.0 92.4 0.0 449.4 0.2 583.4 0.2 13.2 76.2 41.0 60.8 36.0 66.7 52.1 63.2 2005 Higher education 2001 2005
Secondary school: corruption needed in order to enter school and nish educational process successfully Higher education institution: corruption needed in order to enter HEI, transfer to another HEI, pass course examinations, midterms, term papers, theses, etc Table created by author using data in Satarov (2006) * Rank 1 is assigned to the sector with the largest average bribe ** Rank 1 is assigned to the market with the most intensive corruption activities *** Rank 1 is assigned to the segment of the public services market with the highest demand
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In the same 5 years, the willingness of college administrators and faculty members to accept bribes and collect other benets of corruption increased from 36 to 52.1% (Satarov 2006). These upward trends are characteristic of the accepting side, i.e. the recipients of illicit benets, although the reliability of surveys focused on corruption remains conceptually questionable. Diplomas are available for sale not only from the college administrators but also online, for prices varying from $1,000 to $2,000; Vuzdiplom (2008) is one example. Some people apparently use fake diplomas to get jobs and promotions, or even to teach in academia (Voronezhsky 2005). As more students enter higher education, the potential base for corrupt activities grows. The student population in Russia grew from 2.64 million in 1992 to 5.43 million in 2001 (Tomusk 2003, p. 215). According to some estimates, the number of students per 10,000 population reached 500 (Newsru.com 2007). Figure 1 shows the dynamics of student numbers in Russia. Colleges and universities run the entry examinations, which are administered by the faculty. As the cost of education rises, admission to publicly-funded places is becoming susceptible to corruption; in 2001, more than 1,000 cases of bribery to enter higher education were recorded. Konstantinovsky (2001) estimates that the amount of money spent to gain illegal access to higher education is equal to 0.75% of GDP. Monetary pledges, gifts, private donations, bribes, and nepotism seem to be commonplace. In some cases, grossly underpaid college instructors have turned HEIs into family enterprises where admission is guaranteed to friends and relatives and those ready to pay. Competition to enter government-nanced programmes is stiff, as Fig. 2 shows. These situations are being noticed, however. Sixty-seven criminal cases concerning educators have been investigated; they include six members of admissions committees, nine ofcials of territorial educational organizations, ve rectors and deans, seven professors and senior lecturers, and 40 directors and assistants to directors of educational institutions. Criminal charges were brought against members of the admissions committees in the Omsk, Volgograd, and Lipetsk oblasts, and criminal investigations have been launched against educators in many regions, on charges including embezzlement, extortions, and bribery. Bribery can be found in all areas of the educational industry (Gazeta.ru 2006). The post-Soviet media often discuss cases of corruption in academia, but the details and facts are shallow at best (Lyzhina 2004; Osipian 2007e, 2008c). Corruption in higher education has a negative impact on the quality of higher education services, increases inequality in access to higher education, and causes social inequities. The possible negative impact of corruption in higher education on the rate of economic growth and development in transition economies in the long-run has been analyzed by
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19 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 80
Fig. 1 Numbers of students in Russian higher education institutions per 10,000 population, 19801999. Source: Commonwealth of Independent States (CIS), Ofcial Statistics, retrieved from the database, 8 August, 2006
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Fig. 2 Competition for admittance to public and municipal higher education institutions in Russia, 19932005. Source: Number of applicants per 100 places. Compiled from data in G. Satarov (2006)
Osipian (2009f). However, corruption is relatively widely accepted in higher education in Russia, as it is considered a part of everyday life. Petrov and Temple (2004) note that In Russia, our interviewees also despised bribery, but at the same time expressed the view that, perhaps, in the present situation, corrupt practices in higher education were inevitable (p. 92). Based on a 1999 survey, Spiridonov (2000) concluded that in Russia, the person who regularly accepts bribes is regarded as an absolutely normal element of real life (p. 245). The public believes that it is virtually impossible to gain a publicly funded place in HEI without a bribe or personal connection. Victor Sadovnichiy, the rector of Moscow State University (MGU), estimates the total volume of illegal payments in higher education at around $5 billion for 2005 (Gazeta.ru 2007). In fact, the authorities acknowledge the rampant corruption in the country, and Russias President, Medvedev (2008) mentioned it in a recent Address to the Federal Assembly.
Suggested solutions: tests and vouchers Several solutions have been suggested to address corruption in higher education; they include modernizing and restructuring the industry, and introducing a standardized test and education vouchers. Standardized tests are being introduced in all of the former Soviet republics as part of a wider education reform (Drummond and DeYoung 2003; Heyneman 2007; Heyneman, Anderson and Nuraliyeva 2008; Osipian 2007c, 2009a, e). The Russian parliament approved the nationwide implementation of the unied state exam, or yediny gosudarstvenny ekzamen (EGE), to begin in 2009 (MacWilliams 2007), but opposition to it has been growing since its pilot implementation in 2001 (Kolesov 2002). Georgia, Kazakhstan, and Kyrgyzstan are among the former socialist countries that have instituted it. According to Heyneman (2007), these republics did so explicitly to address corruption in admissions, and with some success. He quotes a professor at Tbilisi State University: Because of the examsmany things have changed. Students from rural areas and from poor homes are more numerous. When bribery was necessary to enter the university, these students had no chance to enter (p. 314). But the test does not seem to be eliminating corruption completely. A professor from Kazakhstan said that After 2 years, each college student takes an internal exam designed by the ministry of education. For the rst several years it operated fairly. But now it too has become corrupted. Cell phones and cheat sheets (for a price) are allowed into the test (p. 314). Retention and attrition remain issues even
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if the admissions process has become less corrupt with the introduction of the standardized tests. The EGE and the vouchers were designed to work together as perfect complements, to change both the admissions process and the mechanisms of funding. The vouchers were based on the money follows the students concept of higher education nancing, designed as portable grants that could be spent only on higher education and could not be renanced. The EGE results were graded on a scale from one to ve, and every high school graduate obtained an educational voucher with a value corresponding to the grade received. The idea was that prospective students would bring their vouchers to the HEI of their choice; the government would then issue the vouchers and transfer funds directly to the HEIs, based on the number and value of the vouchers that the HEIs collected from the enrolled students. Replacing direct state funding with indirect voucher-based funding would force HEIs to compete for students, i.e. for their vouchers. Since vouchers were intended to be of different values, HEIs would compete for the better students with greater academic promise and higher voucher values. This would encourage the HEIs to improve and update their educational programmes, so they would become more competitive and more attractive to prospective students. Eventually, less competitive HEIs would give way to their more successful counterparts. This model was intended to preserve the state funding of students while at the same time introducing market mechanisms into the largely public education sector. This part of the reform was never realized, however, and the vouchers for education were soon forgotten. It is not clear why the voucher system failed, and the media never addressed the issue. One may speculate that the idea itself was good, but that a combination of technical difculties and strong opposition from the HEIs made the whole project less feasible. It is difcult to predict whether the vouchers would actually reduce corruption in education and improve the industrys funding. Implementing the voucher system would in fact complicate the processes of college admissions and nancing, and facilitate a further increase in corruption. However, now the idea of vouchers has vanished, so has this element of the reform, as HEIs are not competing for the students with higher EGE results who would bring higher voucher values. The reform is not limited to the introduction of the EGE. The transition to the new system of academic degrees, in accordance with the Bologna Declaration, is another step in the direction of Europeanization. The Declaration anticipates that educational programmes and degrees will be standardized within the European common space. Like the EGE, this part of the reform has also been harshly criticized, and most of Russias HEIs oppose the reform (Leonov and Semenova 2007).
Education corruption and reform: a grounded theory Case studies and small-scale surveys with a low response rate remain the major tools for assessing corruption, but it is important to consider other potential methods. The reliability of surveys and interviews is undermined by the sensitivity of the topic, since corruption is illegal. Some methodologies do make it possible to approach the issue of corruption and measure it; see, for instance, Bellver and Kaufmann 2005; Besanc on 2003; Kaufmann and Kraay 2003; and Osipian 2007a. Some of these methods also involve law (Kaufmann and Vicente 2005; Osipian 2008f; 2009c; Zimring and Johnson 2005) and economics (Kaufmann et al. 2000; Rose-Ackerman 1978; 1999). In addition, Hallak and Poisson (2007) developed a comprehensive classication of major opportunities for corruption sorted by area of educational planning and management;
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they attempt to understand how researchers can move from a subjective assessment of corrupt behaviour to objective evidence measuring corrupt practices (p. 63). They suggest participatory assessment including report card surveys; nancial, functional and personnel audits; and public expenditure tracking surveys (PETS) as specic methodological approaches for diagnosing corrupt phenomena in education. They also include both perception surveys aimed at collecting subjective data from various stakeholders, especially teachers, students and their parents (such as participatory assessments), and fact-nding surveys aimed at collecting objective data directly from the Ministry of Education or from various educational institutions; these include PETS and quantitative service delivery surveys (QSDS) (p. 84). Participatory assessments seek to collect information on the perception of corruption based on cross-interviews of various focus groups. American scholars use several methods to research academic corruption in the US higher education sector; having analyzed these approaches, Osipian (2009b) suggests nomological deduction and a grounded theory approach as the two most important for this kind of investigation. Cellular automata can also be applied to investigate corruption in large educational organizations (Osipian 2008d). Heyneman (2007) makes extensive use of interviews to assess corruption in higher education in three former Soviet republics; he believes personal interviews often present a more complex and comprehensive picture of the phenomenon under investigation than do surveys. Heyneman et al. (2008) used survey results to trace the negative impact of corruption in universities on the personal income of graduates in the Central Asian republics. Their quantitative analysis allowed them to quantify these negative impacts and assess the economic damage caused by corruption. Osipian (2007a) offers simple mathematical measurement techniques as assessment tools for quantitative comparative analyses of corrupt HEIs and educational systems. Thus, researchers aspiring to investigate corruption in higher education have many techniques at their disposal, including surveys, open-ended interviews, quantitative analyses, regression analyses, mathematical assessment tools, and participatory assessments, including participatory diagnosis, report card surveys, and social audits. Nevertheless, the issues involved in conceptualizing, theorizing, operationalizing, and measuring education corruption remain largely unresolved. Dreher et al. (2004) compute a measure of the losses due to corruption as a percentage of GDP per capita and derive a cardinal index of corruption for approximately 100 countries. Lancaster and Montinola (1997) suggest that studies of corruption should ultimately incorporate the most central goal of all comparative analysesthe assessment of rival explanations. The advancement of logical explanations, grounded in systematic empirical testing of theoretically-derived hypotheses, facilitates healthy debate about the primacy of one explanation over another (p. 187). This understanding anticipates the development of a grounded theory that can explain the issue of corruption in higher education in Russia. It can facilitate the analysis of the previously suggested ways of curbing corruption and reforming the system of higher education and can then offer alternative solutions to the problem. Grounded theory is developed inductively; data are conceptualized and integrated to form a theory. According to Strauss and Corbin (1998), this provides a reliable way of connecting diverse facts into an explanatory theory. Glaser and Strauss (1967) envisaged grounded theory as a systematic, qualitative process used to generate a theory that explains, at a broad conceptual level, a process, an action, or interaction about a substantive topic (as discussed in Creswell 2002, p. 2). Clifton (1982) suggests that when a grounded theory is generated from data that are obtained systematically through the constant comparative method, it is a valuable research strategy for higher education. He believes higher education research can be redirected
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towards the development of theory. The grounded theory approach is specically designed to address issues that have not been well researched, or are theoretically underdeveloped like corruption in higher education. We still do not have even a simple theoretical description of the phenomenon of corruption in the higher education industries of different countries. Thus, the grounded theory approach can be used to generate a new explanatory theory for this phenomenon, by looking systematically at procedures, actions, or interactions. Grounded theory may be applied to the areas where no extensive scholarly literature exists. Strauss and Corbin (1998), Glaser (1978), Strauss (1987) and Haig (1995) offer concepts, detailed descriptions, and methodologies of grounded theory. It is also important to consider the social structure behind higher education and thus the reasons for reform. Two fundamental processes are driving the extension of higher education: the development of production and social development (Dye 1966; Lindeen and Willis 1975; Volkwein and Malik 1997). The national economy creates a demand for skilled labour, i.e. human capital, which is produced in HEIs (Marshall and Tucker 1992). As state governments represent the interests of producers, their function is to supply skilled labour to businesses by maintaining the system of public education. Public higher education may be in place in every developed nation, but it is not the only determinant of the education industry, as the economy requires the productive resource of human capital at minimum cost. Hence, the governments task is to maximize the effectiveness and efciency of public higher education. It may do this by reforming the market, destroying the vertical axis of subordination, and balancing university autonomy with its accountability to the state. The essential feature of human capital is that it is indivisible from its bearer, i.e. the individual. Unavoidably, then, the governance of public higher education has a social dimension. Individuals see higher education as a way to become involved in the process of societal production and to sustain and increase their personal wellbeing. This social dimension is complex; it includes such characteristics as access to higher education based on individuals social and economic characteristics. Disadvantaged members of society are interested in the states function of decreasing inequalities in access to higher education, and they try to advance their interests through the system of democratic representation. Meanwhile, the producers are interested in increasing the publics access to higher education since that will generate the needed qualied labour force; they also want to reduce inequalities in access to higher education so that society can more effectively accumulate human capital. The government is thus under pressure from both the producers, driven by the goal of maximizing prots, and the public, made up of individuals trying to maximize their socio-economic position, and states make structural adjustments to the higher education sector in order to meet economic and public demands. Furthermore, in order to maximize prot, business requires human capital of a certain quality and quantity at the lowest possible price. Costs are being reduced in higher education in order to extend this sector. The state represents the interests of business: its task is to build and operate a system of mass public higher education that will be effective and efcient and satisfy the demands of business. This is true in all developed industrialized nations, where higher education is administered by the public sector, predominantly if not exclusively. The states leading role predetermines a large state bureaucracy in the sector. The state owns the HEIs and regulates access to higher education. By shaping the structure of higher education, the state determines the characteristics of education programmes and the criteria for admission. The distribution of state funding, along with control over the content and quality of educational programmes, and access to higher education, are all eroded by corruption. In
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the highly centralized Russian system of higher education, corrupt relationships become even more complicated, since the government is both the major nancier and the regulator of both state and private colleges. Thus a case of embezzlement or misuse of college property by a college administrator constitutes an act of corruption as it abuses the public trust: the public, through the state, has entrusted the administrator with proper management and nancial operations. Similarly, when a professor engages in corruption, public trust is abused: not only is the student assigned a higher grade regardless of academic merit, but government nancing is likely misused, given that half of Russias college students are funded with taxpayer money. At this stage, however, there is no need for the state to continue to play the leading role in higher education. There are enough places in HEIs to accommodate all those who want to receive higher education and to meet the demands of businesses for qualied workers. Given this, it is assumed that private HEIs can provide higher education services more effectively and efciently than the state. It is generally accepted that, in the market system, private enterprises operate more effectively and efciently than public ones, because they do not need to collect and redistribute funds through the tax system and budget, and need not obey regulations about access. But in Russia, the state continues to own and regulate public HEIs, regulate private HEIs, distribute publicly funded places in HEIs, and guarantee the degrees conferred in state-accredited HEIs. Through these functions, the state itself becomes a source of corruption, as bureaucrats and educators misuse their monopolistic authority over access to higher education services and degrees. Of course, plenty of misconduct and illicit activity also occurs within private education, but that may be controlled by its presence within the market economy. As the system operates at present, the state interferes in the economy and the education sector remains separate from production. The task is to integrate this system into the economy, while moving the state away from economic production. Several secondary forces help shape higher education, among them public and private HEIs, the government, and lobbying interest groups. These institutions also have an impact on higher education along with the economic and social fundamentals presented above. The redesign of the education sector raises two major concerns: (1) the quality of education, including its content and responsiveness to market demands; and (2) access to higher education, including educational opportunity, affordability, and inequalities. Here, inequality in access is expressed in terms of access itself, educational quality, and student satisfaction. I start my analysis with the assumption that reduced state control and increased university autonomy will reduce the inequality in access to higher education. The rationale behind this assumption is fourfold. First, universities that are less supervised and more autonomous can operate independently on the market; this should make them more effective, efcient, and exible in meeting changing market demands. As a result, the quality of education in these institutions will rise, as will student satisfaction. This will lead to increased and more equitable access. Second, more autonomous universities, which experience less state supervision, are more effective and efcient, as they can spend more time on core activities, such as research and scholarship, and less time on administrative duties, i.e. bureaucracy. This makes them more competitive. Competition lowers tuition fees and thus increases access to higher education and reduces the inequalities in access. Third, more autonomous universities are free to grow, merge, and establish new programmes based on market demands rather than central directives. This creates more places in higher education, and therefore increases access and reduces inequalities in access. Fourth, indirect funding from the state leads to competition among public universities,
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leading them to close programmes that are not in demand, consequently leading to higher quality, higher student satisfaction, and lower tuition, which means increased access and more equality in access. The second force driving the extension of higher education is social development. Higher education is an important public good. Discussions about the nature and function of Russian education point to priorities like the most appropriate form of upbringing for youth (Nikandrov 2007) and the development of civic values and patriotism (Gavriliuk and Malenkov 2004). The value orientations of contemporary Russian youth include friends, health, interesting work, and money (Semenov 2007). According to a 2005 survey of students conducted in four HEIs in St. Petersburg, when it comes to prestige, the leading professions are economist (37%) and lawyer (36%), with the lowest rankings going to schoolteacher and blue-collar worker (1% each). At the same time, when it comes to the social signicance of occupations, the ratings are different, with medical specialist (45%) and schoolteacher (36%) at the top (Semenov 2008, p. 40). According to an October 2004 survey, conducted by the Centre for Public Opinion Research, 23% of Russians see diminished accessibility to free education and medical help as the nations greatest problem. Meanwhile, 55% consider bureaucratic high-handedness and corruption among the present political and economic elite to be the major factor that hinders Russia from emerging from its socio-economic crisis and achieving economic prosperity (Kofanova and Petukhov 2006, p. 24). That it is becoming more and more difcultKofanova and Petukhov (2006) point outto nd ones way in the spheres of semi-free of charge medicine, education, housing and communal services (p. 26). They found that people with higher levels of education and income are more likely to mention the prevalence of corruption in the authority-wielding government institutions and law enforcement bodies, while young people are more likely than others to encounter it in the military commissions and the sphere of education and medicine. Educated people and those with higher incomes are more inclined to offer gifts to civil servants. Among respondents between ages 35 and 44, 29% regularly give little gifts; among people of retirement age this gure is only 12%. Among those with higher education, 26% give gifts (Kofanova and Petukhov 2006, p. 35). The higher education sector cannot remain outside the mainstream of development; it must adjust to the changing socio-economic conditions. Accordingly, corruption is becoming part of the education sector, as it is of other sectors of the economy and the government. The hypothetical evolution of corrupt hierarchies in HEIs points to changing internal structures shaped by the external inuences of the market and the state (Osipian 2007b, 2009d). The state may be interested in corrupt HEIs as entities it can blackmail and control (Osipian 2008e). The nexus of political graft and educational corruption that may be observed in the former Soviet republics includes collusion, compliance, and control (Osipian 2008a). Underpaid educators are naturally more susceptible to corruption. The state uses educators need for illicit benets to create what I call the feed from the service scheme and to control the agenda in HEIs (Osipian 2007d). Given this situation, the state might be interested in maintaining corruption in education and preserving its functions of nancier and regulator of access. Darden (2008) points out that While prevalent in the post-Communist states, the use of systematic graft and blackmail to secure compliance from subordinates appears to be a tool for building state cohesion elsewhere (p. 53). The system of test-based admissions and vouchers that replaced the HEI-based entry examinations and direct state funding means that the same system is preserved when the state retains the distribution function. Under this system, corruption is unlikely to decline,
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even in the long run. One way to remove the state as an intermediary and distributor is to replace direct state funding almost entirely with payments by consumers. Educational loans can compensate for unequal incomes; the loans could come from both state and private banks, in the form of credits. But simply reforming education nancing will not result in a change in the system; reform will have to include privatization or at least a long-term lease of HEIs, including privatization of their campuses. This will allow HEIs to raise funds for investments in many areas: university facilities, equipment, libraries, faculty salaries, research, and scholarships for the most promising low-income students.
Possible solutions: privatization and loans Given the many imperfections in the newly introduced test-based admissions policies, colleges and universities can preserve the right to run the admissions process at their will. HEIs interpret test scores at their discretion; those who have applied without the test certicates may have to take the traditional entry examinations or be interviewed. This looks like a poorly disguised sabotage of the testing reform, but it can be found throughout the system, and many bureaucrats and related businesses are cashing in on the situation. Meanwhile, university autonomy is developing, as universities resist the state regulations. Indeed, Victor Sadovnichy, the rector of the agship Moscow State University (MGU), and possibly the future president of the Russian Academy of Sciences, appears to be a more important gure in the educational landscape than the Minister of Education (Taratuta 2007a). MGU is becoming more and more nancially independent and protable, and a beacon for other HEIs, while the ministry is becoming more of a pure bureaucracy with little nancial leverage over the universities. In other words, now that the university is nancially sound and more sustainable, the ministry is less relevant and the university more powerful. MGU refuses to enroll students based on the results of the EGE and is adhering to the old system of entry examinations (Ivoylova 2008). As described above, the reform using vouchers has failed. Vouchers were a perfect vehicle for selling the reform to the public. The educators did not buy the reform, though, and the general public is apathetic, accepting the idea that free access to higher education has vanished. Educational vouchers were a part of the new system. The failure of one part of that system reveals problems and contradictions in the entire design. For example, the test was never solidly connected to the admissions policies. The introduction and nationwide implementation of the test reached far beyond the initially established goals of reducing inequalities in access to higher education and curbing corruption in admissions to HEIs. The expansion of higher education has reduced inequalities in access, while the increasing number of for-tuition programmes is restraining corruption in admissions, because access is open to all those able and willing to cover the full cost of education. The quality of education in different HEIs varies signicantly; the same is becoming true of secondary schools. Moreover, because of the reforms poor design and an unclear implementation policy, the corruption and inequalities in higher education may now be spilling over into secondary education. The quality of education in different HEIs varies signicantly; the same is becoming true of secondary schools. As the EGE is implemented more widely, it will measure the outcomes of schooling and may lead to teaching to the test. Meanwhile, university autonomy and issues of nancial survival will push HEIs more toward prot-making rather than test-based admissions. This new orientation will transform admissions policy into a selection system based on the combination of academic abilities and ability to pay, and HEIs may focus more on selling educational services than
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preparing specialists. Private enterprises are known to be better at selling services than their public counterparts. The same may be true of HEIs. This model may eventually become dominant not because it is perfect or free of corruption, but because it might be the best t to the new socio-economic conditions. Unavoidably, in this new system, new forms of corruption will emerge and some old ones will grow. After all, reports in the media point to a wide variety of corrupt practices in US and European universities, including fraud, embezzlement, nancial misconduct, and diploma mills (Desruisseaux 1999; Wilgoren 2000; Henry 2001; Baty 2004; Bartlett and Smallwood 2004; Reznik 2004; Bartlett 2006; Van Der Werf 2006a, 2006b). Other forms of misconduct, such as plagiarism and student cheating, will continue. The system of higher education in Russia is in transition and is still far from long-term equilibrium. It will reach a new steady state when it achieves a new balance of public and private involvement, with private dominating. In this new conguration, societies no longer have to pay for the postsecondary education of their young people, even in cases where the selection process is even-handed and honest, and the selection criteria are designed to choose the best and the brightest. In fact, it appears more effective and efcient if the system of mass tertiary education is organized in such a way that the immediate consumers of educational servicesthe studentscover the cost of their own education. The higher education sector is becoming privatized and re-oriented from the domain of specialists based on manpower forecasting, as in the planned economy, to the provision of educational services that meet the demands of the open market; all this indicates that higher education is going through a process of commoditization. People in European welfare states anticipate free access to higher educationbut they also expect to pay. For example, Psacharopoulos and Papakonstantinou (2005) show empirically that in Greece, in a constitutionally free for all higher education country, families spend privately more than the state in order to prepare for the entrance examinations and while studying at the university (p. 103). Privatization in higher education in Russia is an important process, but it is not being widely discussed. One reason for this might be the negative connotation that the term privatization carries in the minds of many Russians. The massive privatization that occurred in Russia in the 1990s is seen as symbolizing inequality, unfair distributions of property rights, social tensions, corruption, and the criminal underworld. In fact, that privatization can be seen as a process of stealing state property from the public and allocating it to a small group of party leaders and directors of state enterprises. Thus many see that process of privatization as a major failure of the state and of market reforms. In that context it would not be benecial for the government to discuss the possible privatization of education. Moreover, in Soviet society, education and healthcare were traditionally considered to be human rights. The process of privatizing state property was riddled with corruption, but it was done in expectation of building a new system that would be more effective and efcient than the socialist system had been. Similarly, the process of privatization in higher education will undoubtedly bring at least a temporary increase in corruption, including tax evasion and illegal forms of struggle over property, but it may help make the education sector more effective and efcient in the long run, and also less corrupt. I suggest that Russia should partially privatize HEIs. The new system will perhaps allow other forms of corruption, some of which also exist elsewhere, but if admission is based on tuition and test scores, corruption in admissions may decrease. At least a partial privatization of higher education may be one of the measures necessary to reduce corruption in this sphere. Moreover, it may help modernize the industry and ensure that quality
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educational services are provided to the public. The process of privatization is already taking place in the education industry: over half of all students pay tuition. Though private colleges provide only 10% of all the places in higher education, more than 40% of the students in public HEIs are enrolled in programmes that charge tuition. Historically, the process of moving property into private ownership emerged from the tradition of communal or shared property. In the former socialist states, however, privatization has a different meaning; in Russia, it is a process of de-nationalizing state property. Many see it as unfair to allocate property rights over the former state properties to just a few people. Referring to work by Shleifer and Treisman (2000), Bortolotti and Perotti (2007) describe this process: In a grand political bargain to buy out opposition to privatization most Russian enterprises became controlled by their managers. Perhaps there was no other way to securely establish private property in Russia than to buy in the potential opposition (p. 59). Similarly, one would reasonably expect that the state will let the top college administrators privatize their HEIs. But this may not happen. The state is not likely to give HEIs to the employees, also called the labour collectives, for free. It will want to preserve control over the majority of the HEIs. Nor is the state likely to sell the HEIs to the labour collectives, again to preserve control. Meanwhile, the labour collectives will not buy the HEIs from the state: they believe they already have every right to own them, and they do not have the means to buy them. At the same time the faculty and administrators are not likely to let any investor privatize the publicly-owned HEIs. Though they do not seek to gain title over the property, at least so far, they might privatize HEIs by privatizing their various functions. Presumably, the state sets the admissions criteria for the publicly-funded places in colleges and universities, but de facto the faculty and administrators set their own standards. Because they accept bribes and admit their relatives and friends, admissions criteria are no longer the academic achievements and knowledge that the state would demand, but money and personal connections instead. The faculty and administration monopolize discretion over the admissions decisions and privatize access to higher education. This phenomenon merely represents a privatization of the selection function. Formerly state and now semipublic HEIs are run more like private enterprises, based on family ties and informal payments. A similar situation applies to grading policies and the setting of curricula. In all the HEIs these are set by the state, but de facto faculty members assign grades based on their own criteria that do not always coincide with those set by the government. Students may be given high grades in exchange for gifts, bribes, or collective presents, or based on kinship and personal connections. This means that faculty members are partially privatizing the function of student retention and control over academic progress. The content of academic programmes is determined by the state and controlled through the centralized processes of licensing and accreditation; it varies signicantly from one HEI to another. The quality of educational programmes also varies. Thus the real content and the quality also depend largely on the faculty. The state denes the degree requirements and qualications for college graduation, and issues diplomas for all graduates. At the same time rampant corruption in HEIs undermines the credibility of the degrees, as the faculty and administrators privatize the function of certifying knowledge. College administrators are now taking over many functions previously regulated by the state, including the process of selecting, hiring, and promoting faculty, and distributing state funds. Universities demand the right to confer academic degrees without the approval of the Ministry of Education. According to Psacharopoulos (2005), The degree of privatization of a university system is a major institutional arrangement that affects academic quality. What matters is not the
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legal status of the institutionrather who has control over university functions and quality control. Without exaggeration, many European universities today resemble nationalized industries that are on the way out in other sectors of the economy (p. 43). Thus privatization is not so much an issue of transferring property rights as of increasing the autonomy of universities. This process, if conducted properly, may increase the competition between HEIs. Hallak and Poisson (2007) emphasize competition as a means to resist corruption in education: Monopolies within the education sector as in other sectors facilitate the development of corrupt practices. On the other hand, political objections, debates, investigations and economic competition are key elements to counteract monopolistic tendencies. The existence of independent neutral bodies in charge of assessment, selection, control, audit, etc. as well as of private actors within the education arena, can appear crucial in this context (p. 277). Yet faculty members and administrators are already setting their own standards for admissions, student attrition and retention, academic progress, content of educational programmes, and graduation. In other words these functionsselection, retention, promotion, and certication of knowledge and skillsare being privatized. Eventually, state universities may be transformed into private universities with the new delineation of rights and responsibilities between them and the state. The state is in a somewhat contradictory position regarding the de facto privatization of higher education. On the one hand, the state is gradually decreasing its funding of the public HEIs. The state sets the salaries in the industry, which are kept low compared to those in other industries, and faculty members are forced to make money elsewhere to maintain a decent standard of living. On the other hand, the state does not want to lose control over higher education. The government has offered to double the budget and grant many academic, economic, and nancial freedoms and privileges to the countrys two agship universities, Moscow State University (MGU) and Saint Petersburg State University (SPGU), in exchange for the right to appoint their rectors through the Cabinet of Ministers (Taratuta 2007b). The presence of these two developmental trends in the Russian higher education sector represents the struggle between the old and the new. On the one hand, new forms of entrepreneurism are driving the underlying process in which higher education services are becoming commoditized and the industry is becoming commercialized, as Schattock et al. (2004) put it; they describe major forms and trends in the entrepreneurism and transformation of Russian universities. On the other hand, the state is not about to abandon the universities and its traditional inuence over them. Andrei Fursenko, the Minister of Education and Science, states that ten to 15 world class universities will be created in Russia (Rossiyskaya Gazeta 2009). He says that today Russia has around a thousand HEIs, but only 150 of them are competitive, so he believes other HEIs should be converted into branches of well-established universities or vocational schools, or otherwise be closed (Newsru.com 2008). The solution may be a particular combination of the two trendsif that is feasible in the long run. Schattock et al. (2004) conclude that Campaigns to ght corruption in education have not been successful because the vested interests of families and examiners coincide (p. 43). It appears that so far corruption has not prevented entrepreneurialism and commercialization in HEIs. In our view, it will only be possible to control corruption when it becomes an obstacle to further commoditizing higher education. One would expect the leading universities to support the governments initiative of the EGE. Surprisingly, the opposite is true: the only HEIs that are not obliged to admit students based exclusively on their EGE scores are the leading universities, most of them located in
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Moscow. Of the 42 HEIs that applied for exemption from that rule, 24 were awarded that status by the Ministry. Even more surprisingly, among the EGE-exempt universities is the State University Higher School of Economics, whose rector, Yaroslav Kuzminov, is the strongest supporter of EGE among all the leading educators. Table 2 provides a complete list of the exempted HEIs. Many leading HEIs did not apply for an exemption from the EGE, because they have the right to enroll students based on the results of academic Olympiads, or intensive competitions, and they do so, actively. One university rector commented that 70% of those granted admission based on the results of an Olympiad were guaranteed students, i.e. those with connections in the university (Kommersant 2008). Thus, there are still plenty of exemptions for the EGE and HEIs use them to further privatize the function of selecting students for publicly funded places. University leaders are not going to be removed from the selection process, and they make that very clear. Supporters of publicly funded higher education often refer to the need to select the best and brightest and to offer them an opportunity to receive higher education independent of family income. In some member countries of the European Union, various factors challenge this priority, including low-quality education and large classes, along with the
Table 2 Russian HEIs where admissions criteria are not limited to EGE results, 2009 City Moscow State University, Lomonosov (MGU) Moscow State Pedagogic University Moscow State University of Physics and Techniques (MFTI) Moscow State University of Linguistics All-Russia Academy of Foreign Trade State University Higher School of Economics St. Petersburg State University of the Aerospace Industry St. Petersburg State University Academy of the National Economy, Government of the Russian Federation Moscow State University of Medicine and Dentistry Moscow State Law Academy Nizhny Novgorod State University of Linguistics Academy of Finance, Government of the Russian Federation Russian State University of Humanities (RGGU) Volgograd State University of Medicine St. Petersburg State University of Economics and Finance St. Petersburg State University of Information Technologies, Mechanics and Optics Russian Academy of Jurisprudence Moscow Medical Academy, Sechenov Russian State University of Medicine Moscow State University of Printing Arts North-Caucasian State Technical University State University of Management (GUU) Moscow State University of International Relations (MGIMO) Moscow Moscow Moscow Moscow Moscow Moscow St. Petersburg St. Petersburg Moscow Moscow Moscow Nizhny Novgorod Moscow Moscow Volgograd St. Petersburg St. Petersburg Moscow Moscow Moscow Moscow Stavropol Moscow Moscow
Based on data from: Ministry of Education and Science of the Russian Federation, 2009, doi: http://mon.gov.ru/dok/akt/5138/
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growing sector of private educational services outside academia, especially tutoring. Free access to colleges for promising students is seen as a matter of opportunity, national pride, and social justice, and a way to maximize the nations overall social welfare. In Russia, however, the idea of giving access to higher education to the best and the brightest by maintaining the system of public funding is no longer valid, because admissions are highly corrupt. The expansion of higher education presupposes access for a fee, for all who wish to obtain it, and the idea is that the system of educational loans will compensate for inequalities in income. The state will continue to play a signicant role in the education sector. At the initial stages of the reform, the state may play a role in establishing a system of external, independent assessment and evaluation. Hallak and Poisson (2007) say that Organizing independent assessment by autonomous institutions is crucial to limit outside interference and reduce the probability of corruption (p. 248). I believe that at this point, the states major task should be further restructuring the higher education industry and setting up new, clear rules and regulations. These rules should clearly dene what is and is not legal, what is and is not allowed, and what is and is not acceptable. Higher education is no longer a limited resource: the Russian HEIs have enough places to accommodate all those who want an education. Now, access is limited by cost and not availability. A wide selection of programmes is available and in fact many HEIs are affordable. I argue that the state should continue to withdraw gradually from the higher education industry, including its funding. Corruption in admissions will be reduced as the share of for-tuition programmes grows. Corruption in grading will be reduced as colleges place a priority on prestige, based on their graduates knowledge and placement. The same prestige will likely reduce corruption over graduation. Through this process market mechanisms will replace state control. The state will no longer guarantee the quality of degrees, and more weight will be given to the knowledge of graduates and the prestige of the HEIs. Affordable educational loans should be available for those who cannot afford to pay tuition. The loans can be offered by the state and private lenders, including commercial banks. The prices of higher education services in Russia are not as high as in the US and Western Europe, but they are still unaffordable for many Russians. Tuition in top HEIs is expensive and studying at these institutions appears unaffordable for most of the candidates. Educational loans may thus be a solution. Some of the private banks in Russia have started to issue educational loans. Growing commercialization and de-facto privatization of the provision of educational services, especially in higher education, lead to the need for educational loans. Educational loans may help to ease the tension between the growing cost of education and the relatively small incomes of poor families and households in economically disadvantaged regions. The government is planning to introduce educational loans for college students that would cover their studies for up to 6 years. Some commercial banks are also entering this new area of nancial services. Very soon Russian students will be able to receive educational credits of up to 140,000 rubles or approximately $5000 (Newsru.com 2006b). Credits are available to cover both tuition and cost of living. Government credits may be supplemented by the educational loans from the private-bank lenders, especially in cases when students study in the most prestigious, most expensive universities, located in large cities with a high cost of living, primarily Moscow. The introduction of educational loans is not going to eliminate the corruption entirely. In fact, the domain of educational loans is itself not free from corruption, as shown by the educational loans provision in the US (Kelly 2007; Kelly and Keller 2007; Osipian, 2009f). Educational loans provided on non-competitive grounds or not at the best possible terms
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and conditions reduce the degree of accessibility of higher education, increase student debt, and eventually lead to the withdrawal of more competitive providers from the market. The practice of having a list of preferential loan providers may also constitute a breach of contract between the student and the university. This is only possible if universities are under the obligation to provide their current and prospective students with the best possible options in terms of educational loans, both private and public. The Russian government, with its anti-monopolistic committee, will have to oversee the educational loans industry, which is now in its infancy but has good prospects for development and growth.
Conclusions Three major determinantsthe changing role of the state, the shifting socio-economic environment, and the changing rules of the gameare forcing change in the higher education system. In this context, it makes sense to view privatization as a tool for making universities more autonomous, exible, and adaptable, rather than as a process of distributing and selling state property to individuals. The recent offeringsstandardized tests instead of entry examinations and education vouchers instead of direct fundingsymbolize the same state function of distribution, and thus preserve the role of the state. I believe that the changes needed should include privatization through both sale and lease of HEIs. This should include privatization of land that would allow for mortgages and collateral. Collateral is needed to raise funds to invest in university facilities, equipment, libraries, faculty salaries, and research. The vouchers had the distinct advantage of portability, and the portability of educational loans may provide some compensation for the loss of vouchers. Direct state funding may be largely replaced by educational loans, both state and private. The higher education industry itself has to begin functioning as a market, with competition and pressure to maximize prots. The services of higher education should be commoditized, but this will only become possible as higher education is further decentralized and privatized.
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Author Biography
Ararat L. Osipian (United States of America) is a Ph.D. candidate in the Department of Leadership, Policy, and Organizations at Peabody College of Education, Vanderbilt University. He holds a PhD in Political Economy from Kharkov National University in Ukraine and an MA in Economics from Vanderbilt. His research interests include corruption in higher education and inequalities in access to higher education from an international perspective, the nexus of education and economic growth, modern welfare states, and the political economy of transition.
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Vouchers, Tests, Loans, Privatization-Will They Help Tackle

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Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

Vouchers, tests, loans, privatization

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