Public-Private Substitution in Higher Education: Has Cost-Sharing Gone Too Far?

This paper looks at the current challenge facing higher education by exploring the historical relationship between higher education funding and long economic cycles in the UK, USA and France. It examines the consequence of the transformation of public-private income in higher education that followed the 1970s downturn, questioning whether the rise of private resources acted as additional or substitutive resources for public spending. The paper suggests that there is a risk that the cost-sharing strategy could be turned into a policy of public-private substitution of funding and provision, leading to a transfer rather than an increase of resources with strong implications on quality and equity. However, the Kondratiev cycle suggests an alternative route by designating the impact of the 1970s economic downturn on education as unique. Previous economic crises were contemporary of accelerations of public funding towards education which in fact contributed to economic recovery. The current crisis could represent an opportunity to revive counter-cyclical policy by looking not only at efficient public spending but also at developing fairer taxation. A revival of public funding complemented by an additional rather than substitutive diversification of income would rebalance the public-private structure of funding and drive a sustainable higher education system capable of playing a key part in these counter-cyclical transformations.