Tertiary Education in Latin America Norway-WB Seminar, Washington May 14, 2004 Lauritz B. Holm-Nielsen

Why should the Bank be involved in tertiary education? Key driver for social mobility Competitiveness: Supports the transition to knowledge-based economies Generates externalities that underpin the Bank’s work in other sectors Associated with market failures

World Bank Education Portfolio in LAC Strong focus on primary education Sizeable commitments were made to tertiary education in FY98, FY99 and FY03 LCSHD Portfolio: FY98-03 Commitments Source: World Bank 2004

Key developments that mark tertiary education in Latin America ….

Large increase in tertiary enrollment in recent decades Source: WDI 2003

Growth in private provision and non-university tertiary education Percent of total enrollment Year75%-40%40%-30%30%-20%20%-10%Less than 10% 1985 Brazil Colombia Dom. Republic Chile El Salvador Peru Argentina Guatemala Paraguay Costa Rica Ecuador Honduras Mexico Nicaragua Venezuela Bolivia Panama Uruguay Cuba 2002* Brazil Colombia Chile Dom. Republic El Salvador Nicaragua Paraguay Peru Venezuela Costa Rica Ecuador Argentina Guatemala Mexico HondurasBolivia Panama Uruguay Cuba Source: Schwartzman (2002); World Bank (2002c and 2003); Zúñiga (2003); OECD (2002a) and García Gaudilla (1998)

What are the sector issues?

Inequitable participation TE largely elitist with the majority of students coming from the wealthiest segments of society Very inadequate student aid for poor students Not enough TE in regions Source: World Bank (2002); Del Bello (2002) and Delannoy (2000)

WB responses: Making student loans available to academically bright, but financially needy students while promoting performance in cost-recovery and administrative efficiency Using income-contingent loan schemes to help low-income families to overcome the lack of collateral and fear of defaulting on traditional ‘mortgage-style’ student loan debt Supporting tertiary education in regions with links to local needs and as stepping stone towards advanced education

Weak market for tertiary education High reliance on public subsidies and de facto state support of the affluent The market for higher education is not sufficiently transparent Source: OECD (2002) and World Bank (2002)

WB responses: Boost investments through additional private contributions (tuition coupled with sustainable student financial aid programs) while advising clients to use public resources strategically Create a transparent market for tertiary education, e.g. by supporting accreditation and the collection of data on labor market outcomes

Ineficiency High drop-out rates, repetition, low graduation and extended cycles Few financial incentives to improve learning outcomes and efficiency

WB Responses Link public resource allocation with objective performance and outcome criteria throgh performance contacts and competitive funding Consolidate monitoring and evaluation systems and ensure reliable statistical data

Learning gap Lack of cohesion Secondary and tertiary institutions are not working together to bridge gaps in tertiary opportunities Weak linkages between universities and non- university tertiary institutions No systems for the transfer of academic credits Skill level Short cycle tertiary education Educational dead-end Low quality Secondary University

WB responses: Motivate and enable poor and socially excluded students to complete secondary education and achieve academic excellence Strengthen linkages between university and non- university sub-systems by bridging between short and long cycle programs Support mechanisms for the transfer of academic credits, e.g. by promoting module-based curricula design (Bologna like process)

Low quality and relevance Insufficient qualifications of university professors Deteriorating physical facilities, lack of equipment, obsolete instruction material and outdated curricula University graduates does not meet the skills needs in the economy Source: Brunner (2002), World Bank (2002); UK Higher Education Statistics Agency Individualized Staff Record 2001/02; García Gaudilla (1998) and Schwartzman and Balbachevsky (1996)

WB responses: Promote the use of quality assurance mechanisms with external peer-review Strengthen graduate programs and in-service training of university teachers, and establish financial and promotional incentives for teachers to perform Upgrade teaching facilities, learning materials and research equipment Develop competency-based curricula emphasizing ‘learning to learn’ methodologies

Weak national innovation systems Low production and mobility of PhDs and post-docs Inward orientation of university researchers Lack of incentives to commercialize research and solve real-life problems Red tape impeding partnerships and cross- sectoral mobility Source: IMD World Competitiveness Yearbook 2003

WB responses: Improve graduate education in areas of high importance to national economies, and establish programs for the insertion of young researchers into industry Strengthen linkages between universities and industry by promoting matching grant schemes and cooperative research, and provide incentives for universities to commercialize innovations Promote the participation in international knowledge and research networks

Weak system and institutional management Weak university management structures Insufficient capacity in ministries of education for sector oversight and strategy Low access to relevant management information Regional governments Private Universities Public Universities Regional Tertiary institutions Private Sector International networks Science Agency Tertiary Education System Ministry of Education, Science and Technology

WB responses: Strengthen tertiary institutional management, e.g. by introducing professional management, and broaden governance structures to include representatives of industry and civil society Provide technical assistance to ministries of education to build adequate policy frameworks for tertiary education, strengthen long-term planning and support the adoption of a sector- wide approach to education Build transparent management information systems in order to provide a solid basis for decision-making

Operations in tertiary education Argentina: Higher Education Reform Project (P034091) Chile: Higher Education Improvement Project (P055481) Colombia: Improved Access to Higher Education (P074138) Mexico: Higher Education Financing Project (P049895)

Operations in S&T related to tertiary education Brazil: Science and Technology Reform Support (P038947) Chile: Science for the Knowledge Economy (P077282) Mexico: Knowledge and Innovation Project (P044531) Venezuela: Millennium Science Initiative (P066749)

New operations FY05-06 Mexico: Tertiary Education Student Assistance Project Chile: Higher Education Finance and Curricula Reform APL Mexico: Science, Technology and Innovation Project Argentina: Higher Education Reform Project

Tak for invitationen Lauritz B. Holm-Nielsen