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INTERNATIONAL HIGHER EDUCATION

Dual Privatization in Georgian Higher Education

Marie Pachuashvili
Marie Pachuashvili is a Ph.D. candidate in political science at Central European University in Budapest, Hungary and a PROPHE affiliate. E-mail: pphpam01@phd.ceu.hu.

In postcommunist countries, a significant transformation of the higher education landscape has taken place since the collapse of communism—in the form of diminished state involvement in funding, provision, and governance. The extent and shape of the shift varies by country, but all postcommunist countries witness former public monopolies challenged by some form of privatization. There is usually dual privatization: (a) the growth of private institutions and (b) the introduction of tuition fees and increased businesslike behavior at public universities. Georgia has experienced both forms of privatization.

Like many countries in the region, Georgia has almost no history of private higher education. Georgian private institutions first appeared in 1991. Yet, by the 1992–­1993 academic year 131 such institutions already existed. The collapse of the Georgian economy and decline in state support for public institutions contributed to diminished public-sector enrollments (an apparent parallel to trends in Central Asian and Baltic countries). Several new public institutions opened, but the public sector saw a 20 percent overall decline in the first half of the 1990s. This period represented the time frame of private institutions’ founding and most intensive growth. The expansion of the comparatively large private sector peaked at 34 percent of total enrollments in 1995–­1996.

Public-Sector Privatization
Since that peak, however, private-sector enrollments have fallen in relative and even in absolute terms. While the first fall is not unusual in the region, the second is. Demand for publicly provided education, by contrast, has increased since 1997–1998. Just as the rise in private higher education reduced public enrollments, public-sector reform is now taking a toll on the private higher education sector.

There is one leading element in the public-sector reform: the growing body of self-financed students, which is a striking aspect of privatization within the public sector both within and beyond the region. Authorization for this change came in 1993. By 2002, 43 percent of the public sector’s students paid tuition, and the share has risen each year. Student payments represent the major source of income for some public universities. For instance, in 2001–2002, student tuition revenues at Tbilisi State University and the Medical University were, respectively, two and three times higher than funds received from the state.

The dependence of public institutions on student tuition fees has blurred the distinction between the activities and missions of the two sectors in Georgia. In an attempt to attract more fee-paying students, public institutions have tried hard to stay attuned to labor-market fluctuations by providing training in fields like information technology, law, business administration, and foreign languages. Today, most public educational organizations run programs in law and economics. In addition, besides the official Georgian language of instruction, courses are offered in Russian, English, German, Armenian, and Azeri. Such ethnic appeal has been a hallmark of private higher education, often frowned upon by national public institutions. Thus, the new involvement of public universities is a significant development.

Additionally, by introducing vouchers for financing higher education, the Georgian government intends to encourage even more marketlike behavior on the part of public institutions and to promote competition between and within the two sectors of higher education. According to the 2004 law on higher education, successful candidates receiving the state financial grant can choose from among all accredited institutions, both public and private. This would further blur public-private differences, at least in reference to accredited private institutions. Furthermore, neither public institutions, which long held a monopoly, nor private institutions, which enjoyed a period of rather easy growth during the 1990s, would fare well without being competitive—both inter- and (largely) intrasectorally.

Conclusion
In summary, extensive privatization of the previously public higher education system has been taking place in Georgia since 1989. The shift relates to the creation and growth of a distinct private sector as well as to public institutions increasingly supplementing public funding with private resources, mostly through tuition. The Georgian case corresponds in key respects to developments in the region, but it is striking for several reasons. One is the absence of a tradition of private higher education. Second is the comparatively large private higher education share of total enrollments. Third is the relatively vigorous privatization of public education financing. Both the second and third developments stimulate striking private-public mixes, dynamics, and competition.

[Online] Available: http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/Number41/p17_Pachuashvili.htm