Several nations are currently considering 'privatization' of parts of their higher education systems. This paper, mainly based on the American experience, examines 'privatizing' public institutions as an alternative to establishing solely 'private' institutions.
Institutions are analyzed along four dimensions: (1) ownership (public or private); ( 2) control (external or internal); (3) financing (public or private funds); and (4) mechanisms for public financing (who controls fund distribution and how). There are varying mixtures along these four dimensions both within countries and around the world, with the American system exhibiting the widest range of combinations. Six categories are described, including four common in the U.S.: "I. Independent private", where institutions are independent in ownership, in control, and in basic financing; "II. Dependent private", independent in ownership and financing but dependent in control; "III. Independent public", dependent in ownership but independent in control and substantially independent in financing; "IV. Semi-independent public (state/guild type)", dependent in ownership, mixed in control, and heavily dependent in financing (less common in the U.S., but typical of Italy and Latin America); "V. Semi-independent public (state/trustee/guild type)", where control is shared among state, academic guilds and lay boards of trustees but with mainly state-controlled financing; and "VI. Dependent public", the model in the Communist nations.
Kerr traces the historical path that led to the mixed American system and examines some of its positive consequences, which include institutional autonomy, diversity, and flexibility. Negative results include possible over-responsiveness to short-term pressures, as from the labor market or student preferences for courses of study, and from supporting business or industry.
The author concludes that the American experience with 'privatized' public institutions may serve as a model for those elsewhere who now seek greater institutional differentiation, autonomy, and flexibility within national systems of higher education.