MaRIHE Master thesis reader e-book 2016
Higher Education Governance Reforms in Europe and Serbia-Recommendations for the Way Forward
Aleksandar Avramović
Background
Problem Statement
Higher Education (HE) reforms are happening in Europe since the beginning of the 1980s as part of broader transformation of the public sector (Enders et al., 2006). The first wave of reforms occurred after the decline of the welfare state, which was a dominant economic model throughout 1960s and 1970s characterized by state planning in public services. The welfare state was accused of being unaffordable and ineffective, and already by the beginning of the 1980s was in some cases replaced by more business-like public service (Broucker, Wit, & Leisyte, 2015). New Public Management (NPM), a term covering a broad range of different reforms, became a dominant model in running the public sector at that time in the United States, New Zealand, Australia, and the United Kingdom. NPM doctrine is famous for emphasizing a private sector style of management, explicit standards, and measures of performance, output control, greater competition, disaggregation of units and hands-on professional management (Hood, 1991; Sporn, 2003).
The next wave of public sector reforms happened during the late 1990s and beginning of 2000s with new, post-NPM models emerging. These models have not replaced NPM, but rather added some new layers on its foundations. Pollitt and Bouckaert (2011) described this phenomenon as similar to “geological sedimentation, where new layers overlie but do not replace or completely wash away the previous layer.” (p. 8). Unlike NPM, there is no single umbrella term for describing these reforms. Among many different post-NPM models and traditions, two have been very popular and widely discussed – the role of networks and new forms of governance (M. Bevir & Rhodes, 2011; Pollitt & Bouckaert, 2011). Networks in HE will not be extensively researched in this thesis, but the concept of governance and NPM as a theoretical model will be given full attention.
As part of the public sector, HE also faced significant changes in Europe since the 1980s (Maassen & Jungblut, 2014; Middlehurst & Teixeira, 2012). As it was the case with the rest of public sector, HE was also accused at that time for inefficiency and low quality of service. However, when the reform process started, HE was even considered to be the frontrunner in public sector transformation (Magalhães & Amaral, 2009). Today, this process is not yet complete, and the scope and outcome of reforms are not yet clear. Some scholars argue that changes in HE sector have been fundamental and fast. Others claim that universities in Europe are going through slow evolutionary change while handling internal and external pressures from the environment (Maassen, 2008). Whatever the truth is, there are some common elements of the HE reforms in Europe. To name a few: (1) more autonomy for higher education institutions (HEIs) with less direct governmental interventions; (2) more reliance on private instead of public funding; (3) highlighting quality and performance (Magalhães & Amaral, 2009; OECD, 2008; Paradeise, 2012). As in the other public sectors, De Boer and Jongbloed (2012) noticed that NPM, networks and governance are the most important narratives when it comes to HE change. In order to increase efficiency and effectiveness of HEIs and improves the quality of their service, policy makers had to change the rules of the game and reduce the roles of hierarchies and collegial self-governance. In the new system of governance, the roles of networks and markets increased (p. 533).
Levi-Faur (2012) believes that the reason behind increased attention given to governance is that this very term carries the idea and the meaning of change. According to this author, this is happening in a time of turbulence, when scholars become more open for new ideas and concepts. Rhodes (2012) followed the same line of thought, arguing that governance represents a change in the definition of government, implying new processes, methods or conditions in which societies are governed. Governing HE became an important issue for both state and HEIs across Europe, at least according to the available literature. Kohler (2006) confirms this by saying that much of the discussion about HE today is related to the issues of university autonomy, quality assurance, different ways of steering, increasing efficiency and effectiveness of HE service and social responsibility of HEIs. HE governance became important on both stages (institutional and system) (p. 17). Due to increased importance of HE governance, reforms happening around this concept will be in the focus of this thesis.
Research Focus, Question, Aims and Objectives
This thesis will focus on one on hand on HE governance reforms in five European Union (EU) member states - Austria, Finland, Germany (North Rhine-Westphalia), Netherlands and Slovenia. It will look at changes in both external and internal governance structures and policies. On the other hand, the thesis will also focus on Serbia, a country in the Western Balkan’s (WB) region. The most recent Law on Higher Education was adopted in 2005 (Branković, 2010; Vujacic, Djordjevic, Kovacevic, & Sunderic, 2013) and at that time this Act was considered to be a major reform document. The point of interest will again be the recent internal and external governance changes, but also the recommendations for the future HE reform, based on EU countries experience. At the moment, Serbia is heading towards the new HE reform (Andrić, 2015). The process is currently on hold due to the most recent elections. However, it is very likely that the process will continue as soon as a new government is elected. When it comes to the type of HE institutions, the main focus will be placed on public universities since they represent the majority of the HE sector in most of EU case studies. Universities of applied sciences (UASs) would get much less attention, because of the thesis limitations and fact that Serbia do not have strongly developed vocational HE sector. Private universities and other types of HEIs will gain almost no attention, except in the case of Serbia, where they represent significant part of the HE system.
When it comes to research question, the thesis will have only one main research question: What can higher education policy makers in Serbia learn from recent and ongoing reforms of higher education governance in European countries, and how can this experience be used for higher education reform in Serbia?
Answering this question will help policy makers in Serbia to understand better developments at the European level regarding HE governance and to discuss the possible solutions that may be useful for the future HE reform.
Finally, in terms of research aim, its purpose is to better clarify the main research question. Thesis will have one overall research aim and four individual research objectives. The overall research aim of this research will be to explore possible options for HE governance reform in Serbia, based on examples from five selected EU countries. However, in order to understand changes in these countries, further investigation is needed on the contents and the very rationales behind governance transformations. What are the drivers of governance reform, and what kind of changes are introduced is the main issue here. Furthermore, the additional problems are related to negotiation processes between different stakeholders, and its later implementation. In other words, do new HE governance arrangements in selected European countries function in the same way in practice as it was described in HE research literature, and where was the idea for the reforms taken from?
Based on the overall research aim, the individual research objectives of the thesis will be to:
- Analyze the origin, meaning and importance of governance in higher education;
- Identify the theoretical explanations of HE governance reforms in the EU case studies;
- Explore different stakeholder views on current HE governance arrangements and possible future reforms in the EU case studies and Serbia;
- Formulate recommendations for Serbian HE policy makers based on EU case studies experience with HE governance reforms;
Theoretical Background
Two main theories have been used in the thesis for explanation of HE governance reforms in Europe. The first one is the Resource Dependency Theory (RDT). It appeared in 1978 for the first time as complete theoretical framework in the book developed book The External Control of Organizations: A Resource Dependence Perspective. Jeffrey Pfeffer and Gerald R. Salancik, authors of the book worked at the University of Stanford at the time when researchers from this institution produced many new theories in the field of organizational science. Among these new paradigms RDT is considered to be the most complete and all-inclusive in dealing with organizations (Davis & Cobb, 2009, p. 3) or as Hillman, Withers, and Collins (2009) stressed, RDT became one of the most important theories in the organizational science (p. 1404). In the following lines, main premises of this theory will be critically evaluated.
RDT is built around three main themes. First, social context is important for one organization. Second, there are different strategies on organizational disposal for managing its environment, and enhancing autonomy. Finally, the concept of power is crucial for understanding organizational actions, both external and internal (Davis & Cobb, 2009, p. 5). The first theme relates to social context or environment. Each organization depends on its environment for survival. It means that all the necessary resources crucial for organizational survival have to be acquired from the environment (Bess & Dee, 2008). The environment is a very broad concept. According to Pfeffer and Salancik (2003) environment represent any event which has influence on organizational actions and behavior (p. 12). However, this definition is way too broad. For RDT, organizational environment/social context represents only those events that affect one organization and force it to recognize them and make a response. The second concept is interdependence. Pfeffer and Salancik (2003) argue that interdependence refers to any happening in the environment which depends on causal relationship between the two agents (p. 40). Interdependence is important because organization usually do not possess all the necessary resources to survive. This creates interdependence between the organization and its environment, leading to uncertainty. Finally, to reduce uncertainty, the organization is trying to create new strategies and adapt to the situation (Lipincka & Verhoeven, 2014).
There are three main types of tactics offered by the RDT for managing environment: reduction of dependency, creating external relations and enactment of a completely new environment (Pfeffer & Salancik, 2003). In the HE context the usage of some of these strategies can be considered, but of some others cannot. The main reason for this lies in the fact that Pfeffer and Salancik mostly observed the behavior of companies, while HEIs have some unique characteristics making them different from the business sector. For example, the enactment of a completely new environment is not very likely in HE contest. Other to tactics were used by HEIs in Europe during the HE governance reforms.
The final theme in RDT relates to importance of power. Some organization in the environment have more power than others, for various reasons. Pfeffer and Salancik (2003) also noticed the same phenomenon. According to them some organization are more powerful thanks to their position in the environment and because of the nature of their relationships with other organizations (p. xiii). For example, the government is usually one of the most powerful players in the environment. It was already mentioned that HEIs in Europe are still heavily reliant on public funding. However, since there is usually more than one provider of HE services in one country, the government is less dependent on one single supplier of HE services, making it less dependent on certain HEI then the other way around.
Second theoretical approach used in the thesis is New Public Management (NPM). As it was already mentioned, NPM is an umbrella term (Pollitt & Bouckaert, 2011) describing different managerial practices applied in public services. In the literature, NPM ideas are scattered and there are only a few sources trying to summarize what these ideas stand for. Hood (1991) article was quite successful in a way that it described main NPM ideas, their meaning and justification. All of them have in its essence the introduction of business management style in the organizations of public sector. The main idea was to increase the efficiency and effectiveness of public organizations by introducing some elements which proved to be successful in private companies (Ziegele, 2008). Because of its emphasis on marketization, managerialism, and privatization (Sporn, 2003) NPM is often regarded as a neo-liberal doctrine (Lorenz, 2012). It is undeniable that there are some elements of neoliberalism in NPM. However, the difference between neoliberalism and NPM is clear. While neo-liberal doctrines
are trying to reduce the size of the public sector and use privatization to substitute for public services, NPM main idea is to improve public sector by borrowing some ideas and techniques of private sector (Hénard & Mitterle, 2010). In that respect NPM should be regarded as ideologically neutral doctrine (Vabø, 2009), applicable to any sort of socio-political and economic environment. If this is not the case, it would be hard to understand how some countries in Europe with strong socio-democratic cultures (such as Nordic countries or Germany) are using NPM to reform their public sector.
In terms of HE in Europe, NPM influence was strong on recent governance changes. Broucker et al. (2015) identified four essential aspects of HE reform in Europe influenced by NPM: (1) reforms related to introduction of market mechanism; (2) funding reforms; (3) increased focus on autonomy, performance and accountability; and finally (4) introduction of new styles and techniques in university management. The first sub-chapter already stated some NPM characteristics, and because of that there is no need for further explanations of NPM doctrine. Thesis will focus more on whether governance changes in Europe were in line with NPM or not, and what NPM elements were used for HEIs transformation.
Methodology
Operationalization Framework
Thesis will use two tools for explaining HE governance changes in Europe and Serbia. First, when it comes to Serbian HE reform, it will be explained by using slightly adopted Austin's (2009) multi-faceted model of organizational change. Its main purpose is to find out the answers on three questions: why governance changes happened (and why are they needed), what the content of the reform is/should be, and how the reforms were/should be implemented? The second tool used for analyzing five EU case studies is governance equalizer. It measures progress of five governance dimensions (state regulation, stakeholder guidance, academic self-governance, managerial self-governance and competition) towards NPM suggested positions in the equalizer (Boer, Enders, & Schimank, 2007).
Research Strategy, and Data Collection and Analysis
Research strategy chosen for the purpose of this thesis is multiple case study. According to Creswell (2009) case study is:
'…a strategy of inquiry in which the researcher explores in depth a program, event, activity, process or one or more individuals. Cases are bounded by time and activity, and researchers collect detailed information using a variety of data collection procedures over a sustained period of time'. (p. 13).
There are three main types of case study research strategies: explanatory (trying to explain why something happens), descriptive (producing a full description of a phenomenon, without explain why it happens) and exploratory (trying to determine hypothesis or research questions for future studies) (Biggam, 2012). Taking into account that this thesis is trying to both describe and explain HE governance changes (as described in Operational Framework), the combination of explanatory and descriptive case study strategies will be used. To achieve both overall research aim and individual research objectives, the thesis has first to lock at a certain number of EU countries and describe and explain their reform processes. Time restriction does not allow pan-European research, and for that reason, only five countries are selected as case studies – Austria, Finland, Germany (NRW), the Netherlands, and Slovenia.
When it comes to data collection, it was done by using a combination of convenience and stakeholder sampling. The convenience sampling means that, as the name suggests, it was convenient for the researcher to collect data in a certain way. In reality, it includes, for example, interviewing colleagues from work or people author already know (Biggam, 2012). This sampling was used for data collection in EU case studies. Stakeholder sampling was used for data collection in Serbia, where the main actors from the government, public and private universities, students, EU representative body, expert organizations and individuals were interviewed. In many cases research subjects could be placed in at least into two of these categories - for instance, in expert and government official category. To ensure anonymity of the research subjects, interviewee’s names and names of their institutions are not displayed.
However, their role (for example dean, rector, HE expert) and type of institution they are coming from (public university, the ministry of education) are available. Overall five He experts have been interviewed from EU case study countries and seven from Serbia.
All the interviews were recorded by using a mobile phone and later transcribed. The transcribed raw data were then coded in the NVivo program by using the thematic coding technique. Thematic coding, according to Better Evaluation (2016):
'…is a form of qualitative analysis which involves recording or identifying passages of text or images that are linked by a common theme or idea allowing you to index the text into categories and therefore establish a framework of thematic ideas about it.'
As it was already mentioned, all the interviews were divided into four themes: external and internal HE governance, NPM influence on reforms and finally a funding system of HE in the particular case study. Division into themes was there to help the interview process and to assist in the data analysis. In practice, it means that each topic can be analyzed separately.However, it is important to notice that themes are not entirely independent from each other’s.
In fact, they are interrelated and once the once the interview data from one theme is analyzed, it is compared with other themes. Also, interview findings are compared with data gathered trough literature review process. Biggam (2012) described the complete qualitative data analysis process. It involves collecting the data, describing it and finally interpreting the data (analyzing) (Biggam, 2012, p. 162). Applied to this thesis, it means that data is collected by using semi-structured interviews. Then data is then described and grouped around themes mentioned above. Finally, data analysis process took place, where findings from different themes are cross-referenced with other themes and findings from the literature review. In that way, as Biggam (2012) mentioned, this will: “help produce a more meaningful analysis of your empirical data” (p. 165).
Findings: Description, Analysis and Synthesis
Part I: EU Case Studies
Looking at the reforms in the five case studies summarized in five governance dimensions and presented graphically in the equalizer, the pattern is clear – all HE systems are going in direction of NPM. At this place, the thesis will try only to find major similarities and differences between different cases.
Figure 1: Governance Equalizer Austria Figure 2: Governance Equalizer Finland
Figure 3: Governance Equalizer NRW Figure 4: Governance Equalizer, Netherlands
Position at the beginning of 1908s
Today's position
Values as suggested by NPM:
SR State Regulation
EG External Guidance
ASG Academic Self-Governance
MSG Managerial Self-Governance
C Competition
Direction of changes
The first governance dimension – State Regulation – decreased in all countries. According to NPM, this governance should be low in the equalizer and all counties are moving in that direction. The shift from government to governance started in all countries by the
adoption of a new legal framework. All case study countries adopted or changed laws regulating HE and new legislation introduced major changes in HE governance. First, in all case studies universities became separate legal entities. This means that universities lost the status of public agencies and by doing so they became effectively separated from the state. In the case of Slovenia, its faculties had the status of separate legal entities even before the new legislation was passed. However, this status was after the reforms granted to universities during the process of integration.
Then, institutional autonomy also increased in all countries and universities in all countries are generally freer to manage their own affairs. The funding autonomy increased the most in all cases. All five countries abandoned line-item budgeting and introduced lump-sum funding. This allowed universities to distribute funds according to their needs. Also, at least one small proportion of state funds for HE is distributed by using performance indicators. In NRW, this started already at the beginning of 1990s, while in Netherlands few years ago. By introducing performance based funding, governments are hoping to force universities to achieve certain goals before getting more money from the state. This is a practical example of steering from a distance concept, where the policy makers are more interested in outputs than inputs. However, the major problem with this funding model is how to create good indicators
– and this issue appeared in all cases. Organizational, staffing and academic autonomy also increased. Finally, by using accreditation and quality assurance procedures, national governments are able to control emergence of new study programs. Austria, the Netherlands and Slovenia have national accreditation agencies (Netherlands have this agency together with Flanders in Belgium, and Slovenia has the agency since 2010, after a decade of legal changes). NRW does not have its state agency, and accreditation is done by many independent agencies. Finally, Finland does not have accreditation system but universities are required by the law to take external evaluation (most of them use the services of The Finnish Education Evaluation Centre – FINEEC).
External guidance, originally positioned high in the equalizer increased in all respective cases. First, in all countries the government is the main stakeholder who regulate HE system directly through setting the legal framework and indirectly through the mechanism described above. It is also the main financier of HEIs. The proportion of state funding in the total sum for HE goes to 50% to 80%. The most noticeable change in most of countries in the thesis is the involvement of other external stakeholders (from industry, culture and society in general) in HE governance. In all countries, external stakeholder are included in internal governance of
universities. In Austria, NRW and Netherlands new bodies were created (called – University or Supervisory Board or Council) with the same mission – to supervise and approve the development and actions of HEIs’ management. In Austria and Netherlands only external stakeholders can sit in these bodies, while NRW has a system where at least 50% of the seats must be taken by external stakeholders. Finish universities included external stakeholders in collegial body – University Board. Finally, Slovenia only have external stakeholders in National Council for HE, but this body is not part of the universities. All these bodies can direct university development and oversee the actions of the management.
The situation with Academic Self-Governance is mixed across the observed cases. In Netherlands and Austria this governance dimension decreased significantly, and this was in line with NPM values, since that this governance dimension should be positioned low in the equalizer. The collegial decision making bodies were losing power. In Netherlands their role became only advisory, while in Austria its power was reduced significantly. In the NRW, after the reform in 2007, the collegial bodies also lost influence. However, after the most recent reforms, government restored some of their power. This was the only case of the reverse trends in this respect. However, collegial decision making in general terms lost ground in NRW as well. Situation in Finland and Slovenia was rather different. Academic Self-Governance was always strong in these two countries. In both countries even some new collegial bodies emerged–in Finland so called Collegial Body with supervisory role and in Slovenia Academic Assembly in faculties which elects faculty Senate and propose candidate for a Dean. On the other hand, in both countries collegial decision making decreased slightly due to increase in power of managerial bodies.
The fourth governance dimension, Managerial Self-Governance increased in all observed HE systems. NPM logic urges for stronger leadership and managerial positions in universities, who can make use of increased autonomy and manage the university more efficiently and effectively. For that reason, new legislation empowered university rectors and deans and created new bodies to oversee the university management work. They now have more CEO-type role, with the ability to lead day-to-day operations of the university. In addition, university management got the ability to recruit university staff. This happened in all case studies and made universities more like companies. In Netherlands, the role of deans also increased significantly after the abolition of powerful university departments. Finally, in the case of Slovenia the role of the Rectors increased thanks to the university integration. In the previous system, they had no power.
Finally, the Competition increased also in all case studies. In those countries without significant private sector (like the Netherlands and Finland) the main competition is between public HEIs themselves for best students, staff and research funding. On the other hand, in Slovenia, Germany and Austria, there is also competition between public and private HEIs. In general terms, private HE is not largely present in any of the case study countries, compared to the some Eastern European countries and for that reason this governance dimension does not have huge increase in that area (although it should be high in the equalizer according to NPM).. Another dimension, where competition is becoming more serious is international arena. Universities from selected case studies are more concerned about their reputation and trying to attract international students. Also, universities are competing for international funding and projects, especially coming from the EU level.
NPN as theoretical approach was used quite successfully to explain the changes in Europe. Looking at the content of HE transformations, it is easy to conclude that policy makers had in mind NPM logic when they reformed their own systems. The RDT on the other hand, was not so useful for understanding the content of the reforms. However, some of its concepts and tactics proved to be true in the above case studies. First, the concepts of dependency and power can be used for explaining why European governments were able to impose changes in the first place. RDT argues that the more focal organization is dependent on one provider for resources, the more power over the focal organization that provider has. Of course, it may be the case that the resource supplier is also to some extent dependent on focal organization products and services. HEIs in all case studies are highly dependent on public funding, and for that reason governments have power over HEIs and can impose reforms. Also, the state is dependent on public HEIs for providing education and research, and thus helping society and economy in general. However, the state dependency on public HEIs has reduced in recent decades with emergence of new HE providers. The public funding for HE in recent decades remained stable in most case studies, while the costs increased. The public officials were not able to follow that cost and secure enough resources. For that reason, in order to compensate they decided to give up some of its power over HEIs by granting them autonomy and steer from a distance instead. This happened in all case studies and can be seen as a general trend.
The RDT tactics for dependency reduction and managing the environment were also used by HEIs. For example, mergers as one of the tactics were used in Austria, Netherlands and Finland. The main idea was to reorganize the HE sector and make it more efficient and effective. In Finland, for instance, the mergers are happening systematically, because the government want to reduce the number of HEIs, consolidate the system and use the economy of scale and cooperation to empower universities. This led to changes in both internal and external governance levels. Another widely used tactic was the creation of consortiums and partnerships between the universities. The universities are creating consortiums and partnerships with other universities so that they can compete together on HE markets and apply for research projects and funding. For that reason, university leaders and managers are eager to use this tactic because they understand the potential benefits from it.
Part II: Serbian Higher Education Reform – Recommendations for the Way Forward
The first topic in the interviews with Serbian stakeholders was the Law on Higher Education from 2005. Interviewees were asked to state their opinion on the solutions presented in the Law. Out of seven interviews, six claimed that the Law had some positive effects on the HE system and governance, but bad solutions prevail in this legal act. Only one respondent stated that the Law had no single positive effect, and that it has actually downgraded the entire system. Concerning the major problems with the Law, interviewees named bad implementation; the fact that the Law is too descriptive in some sections and on the other hand some problems have not been tackled at all (HE funding, university integration and social dimension of HE are just few examples); and finally that that the Law was drafted by the academic community and because of that it favors this group too much, while the state influence is completely marginalized.
The Law introduced Bologna structure and the system of quality assurance and accreditation. It was also the first reform Law to introduce some major changes in HE since the country’s independence in 1991. On the other hand, the analysis of interviews, available literature and the Law itself proved that all the major issues in HE, such as university integration or the funding system have not been tackled. In the case of integration, the Law provided very confusing solution, and it was clear that it cannot be implemented as such. On the other hand, the level of academic community’s influence on HE is high, taking into account that majority of places in Commission for Accreditation and Quality Assurance (CAQA) and National Council for Higher Education - NCHE are occupied by the academics. Even in those bodies where the state has its own representatives, they usually occupy less than 1/3rd of the places.
Recommendation I: The Government should draft a new Law on Higher Education in the near future. The working group for drafting the law should be composed of representatives of all major stakeholders in the society, and their work should be transparent. The policy makers should also take serious part in this process and try to create an outcome which would balance the interests of all stakeholders, and not to favor one group, since HE is a public good and it should be treated as such.
All respondents in the thesis agreed that top-down reform strategy is needed for a successful outcome. In almost all EU case studies, at the time of the HE reform, the government was composed of conservative parties, with the strong majority in the parliament or a stable coalition. Today’s situation in Serbia is similar to that. After the election earlier this year, the conservative Serbian Progressive Party won the absolute majority of seats in the Parliament, and now can exploit this success and use wide support it has to push the reform process forward. Government can expect the huge resistance from the academic community, but this was the case in all EU case studies, and the reforms were more or less successful. The major resistance can be expected from the flagship university in the capital city, as the biggest and the most influential public university in the country. However, as one of the interviewee from the HE expert group suggested, government could build a coalition with private universities, other public universities in the country which are more reform oriented, and even with some faculties within the flagship university who are not satisfied with the current situation. In addition, policy makers can attract students to their side by meeting some of their demands, and thus try to avoid large protests in the country.
The second question to Serbian HE stakeholders was related to their opinion on the relationship between the state and HEIs and the level of autonomy HEIs have. All interviewees agreed that the government was not willing to pay much attention to HE sector, and that this can even be considered equal to a complete negligence. Reduced role of the state is also a result of some new solutions in the Law. All of the respondents also consider that the policy makers see HE only as a necessary cost, and not as something which can be used for creating economic growth. Finally, when it comes to academic freedom and institutional autonomy, all of the interviewed stakeholders believe that it is too high as a result of the state negligence.
Indeed, the analysis of all the data showed that the state withdrew from the HE system more that it should, compared to the situation in other EU countries. However, Serbia is not unique when it comes to this problem. For example, in the case of NRW, thesis research showed that both the Ministry and expert taught that the state gave up more responsibilities than it should, and in the most recent Law this was changed (again causing some negative reactions from academics). Interviewees from Serbia complained that even those places in the University/Faculty councils belonging to the state (always less than 50%, usually 1/3rd of the seats) are sometimes not occupied or this is done only because the Law prescribes it - without any state intentions to affect the decision of these Councils.
The issue of autonomy was also significantly present in the interviews. All seven stakeholders from Serbia agreed that autonomy is too high, not because of the new Legal Act, but only because the state lacks the interest to manage the HE sector properly.
Recommendation II: The government should pay more attention to HE and take the full responsibility coming from the fact that the state is the main financier of the HEIs. Since HEIs should also fulfill its public mission, the state should monitor this process. In terms of university autonomy, it should be increased but only after public universities are integrated, and its management is strengthened. In addition to autonomy, state should increase accountability requirements.
As in the previous question, the experience of EU case study countries can be used in Serbian context. In the beginning, state should be more agile in filling those places in the NCHE and University/Faculty Councils. Then, the new Law can introduce a new body composed of at least 50% of external stakeholders. Members of this body should be appointed by the government, and their main task would be to monitor and approve university actions and development, as it is done in Austria, Netherlands and NRW. In addition, the system of quality assurance and accreditation should be improved. Finally, the Ministry should fulfil its obligation from the Law and start paying more attention to HE development and planning. By doing all these things, government can show that it really cares about HE and has a plan for the future. In addition, all four types of institutional autonomy should be increased, but only after the university integration and clear division of responsibilities between the HEIs and the state, as it was done in Slovenia.
The final question concerning external governance relates to funding system and the role of the markets in HE. All seven interviewees agreed that the current funding system is not good and that it should be changed. As the major shortcomings they see (1) the outdated regulation for HE finance; (2) the line item budgeting not being flexible enough; (3) the input nature of the funding; (4) the fact that the state is transferring money directly to faculties and not to university; (5) the huge differences in terms of public funding for deferent faculties within the same university; (6) still weak role of the markets in HE; and finally (7) the fact that
HE is largely underfunded in Serbia. Six out of the seven respondents believe that HE reform should start with the introduction of a new funding model. However, there are different views on how it should be done and what kind of model is needed. Five out of the seven interviewees believe that under certain conditions (in most of the cases, this condition is university integration) lump-sum model can be applicable in Serbian context. Also, they believe that performance-based budgeting is possible, but that there is a problem with performance indicators. Finally, the huge resistance of the academics who would not be willing to accept the output-oriented funding system can be expected. Rector of the private university argue that the system of voucher would be the best solution, and that HE market should play decisive role. However, two other respondents raised their concerns that the voucher system would mean complete reliance on the market and that can create problems in the future. They gave examples of countries where the voucher model failed, because of not well developed quality assurance and accountability mechanisms, like Georgia and compared the situation with Serbia.
Recommendation III: The government should create funding system which would be based on both input and output criteria’s. It can be formula based, lump-sum funding. Some percentage can be distributed by using performance indicators (5-10%). Then, the funding has to be distributed to universities directly. Finally, the state should increase its investment in HE and emphasizes diversification of funding streams, so that HE markets can play a greater role.
All countries in the EU case studies introduced some combination of lump-sum and performance based funding, and Serbian policy makers can consider these options after the university integration. The positive thing at the moment is that faculties have autonomy in using funds earned on the HE market from tuition fees and other sources. Serbia should follow Slovenian example, and allow faculties to keep their own income after integration. Also, Slovenia tested the lump-sum and performance based funding first and this is something that Serbian policy makers should also consider before rushing into fast, untested solutions.
In terms of internal governance changes, two important topics are discussed with Serbian interviewees. The first one is the integration of public universities, identified both in the literature and interviews as the most serious issue of Serbian HE. The second topic is the collegial decision making and how it can be reformed. Six out of seven interview respondents perceive fragmented university in Serbia as a major obstacle for the reform of HE system. They believe that it is the reason why the universities cannot have long term planning and why the state cannot implement any reforms systematically.
From the literature, interviews and the Law, but also from some other documents (Strategy for Education Development 2020) it can be noticed that there is a tendency towards the integration of the university. However, all these sources pointed at the academic community and faculties as the major opponents of university integration. One of the reason for this is the potential loss of substantial freedoms faculties have at the moment. For example, faculties are separate legal entities, and the government transfers funds directly to them. Then faculties give one small share of that money for the university administration. Also, faculties can keep all the money they earn on the market (from tuition fees and third party funding) and have substantial freedom to use these funds as they desire. In the case of integration, faculties are afraid that they will lose all those benefits. However, all the other stakeholders are in favor of integration, and they perceive it as the first step towards increased autonomy, better planning and accountability.
Recommendation IV: Government should integrate universities by Law, and give them a status of separate legal entities. At the same time, this status should be taken from faculties. Administration in public universities should be strengthened and all internal functions should be integrated. Then, the reform of the funding system can be done, and the Ministry can start transferring money directly to universities in the form of lump-sum budgeting. This funds then can be divided internally according to university needs. However, faculties should be allowed to keep the money they earned on the market.
Slovenian and Dutch experience can be very useful for Serbia. Slovenia also had fragmented universities and had huge opposition from the faculties towards the integration. However, after the decision of Constitutional Court, universities finally became separate legal entities. After that the question of integration has not been raised again and all stakeholders realized the benefits of this reform. Universities became much more efficient and effective in their actions, and had much stronger voice in the negotiations with the Ministry. The Netherlands also had powerful departments at universities, but after the recent reforms these were abolished and Deans got much stronger roles instead.
The final topic discussed with Serbian policy makers is the role of collegial governance. Most of the interviewees focused on external governance and did not talk much about this issue. Only two important topics came up. The first one is that academic community is not as strong as it used to be. The other one is the current collegial governance structures are not very efficient when it comes to decision making. All respondents agree that collegial governance should be reformed. However, they see this happening only after the university is integrated and central bodies such as the Rector and Deans are strengthened.
Respondents main message was that academic community is not ready to take the full responsibility for managing integrated universities, and neither are Rectors and Deans who are also elected from that same community. That is why Serbian policy makers can use the experience of the five EU case studies and create a balanced system between complete collegial decision making and complete centralization of power in the hands of professional managers. In all EU case studies, the power of university management increased, but the voice of academics can still be heard. They still take part in decision making process either on a formal level (Finland and Slovenia) or more informally (in Austria, Netherlands and NRW). The Rectors of public universities should be appointed by the new Supervisory Board composed of external stakeholders (at least 50%) and his/her function should be empowered. Rector then can appoint Deans, as it is done in Netherlands. Rectors can be selected outside of the academia. At the same time, some important functions should stay in the hands of the academics (University Councils), because they sometimes have the best knowledge on what is happening on the ground. This system of checks-and-balances can be used to satisfy all sides, and to increase efficiency and effectiveness of the HEIs decision making.
Recommendation V: The function of Rectors and Deans should be strengthened, as it was done in five EU case study countries. This can be done only after university integration is complete. There should be a chain of command from the new Supervisory Board who would appoint Rectors, to Deans who would be appointed by the Rectors. At the same time, some important decision making functions should remain in the hand of University Council, even though it should have a predominately advisory role. This would create a stem of checks-and-balances and satisfy all the parties.
Conclusion - Research Question, Aim and Objectives Revisited
The thesis main research question was presented in the introductory chapter of the thesis. However, it will be useful to revisit both the research question and the research aim and objectives. The main research question of the thesis was:
What can higher education policy makers in Serbia learn from recent and ongoing reforms of higher education governance in European countries, and how can this experience be used for higher education reform in Serbia?
Main research question also contained the main research aim, and it was fulfilled completely by achieving four individual research objectives:
- Explore the origin, meaning and importance of governance in higher education;
- Identify the theoretical foundations of governance reforms in EU case studies;
- Analyze different stakeholder’s views on current HE governance arrangements and possible future reforms in the EU case studies and Serbia;
- Formulate recommendations for Serbian HE policy makers based on EU case studies experience with HE governance reforms.
The first individual research aim was completed in the first and second chapter of the thesis, where the HE governance and other related terms were defined and their origin explained and analyzed. Then the Literature Review section managed to identify NPM and RDT as theoretical explanations of HE governance reforms in five EU case studies. These theories have also been used in the chapter four, where they were applied in five EU case studies context. When it comes to third individual research objective, it was achieved in the fourth chapter. HE governance reforms in five EU case studies were presented, by analyzing interviews with HE experts, official government documents and legal acts, and other literature. The data was triangulated and presented by using governance equalizer tool. Finally, the chapter five answered the main research question and accomplished the overall research objective by using multi-faceted model of organizational change. In this chapter five recommendations were proposed for the future HE reform in Serbia based on the experiences of five EU case study countries.
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