The political economy of higher education finance : the politics of tuition fees and subsidies in OECD countries, 1945-2015

This book analyzes the political economy of higher education finance across a range of OECD countries, exploring why some students pay extortionate tuition fees whilst for others their education is free. What are the redistributional consequences of these different tuition-subsidy systems? Analysing the variety of existing systems, Garritzmann shows that across the advanced democracies “Four Worlds of Student Finance” exist. Historically, however, all countries’ higher education systems looked very much alike in the 1940s. The book develops a theoretical model, the Time-Sensitive Partisan Theory, to explain why countries have evolved from a similar historical starting point to today’s very distinct Four Worlds. The empirical analyses combine a wide variety of qualitative and quantitative evidence, studying higher education policies in all advanced democracies from 1945-2015. Dedication 6 Acknowledgments 8 Contents 12 List of Figures 14 List of Tables 16 Chapter 1: The Politics of Higher Education Tuition Fees and Subsidies 18 1.1 Introduction 18 1.2 Literature Review: Existing Explanations of Tuition Fees and Subsidies 23 1.2.1 What Explains Tuition Fees? From Structural to Politico-­Economic Accounts 24 1.2.1.1 Structural Economic Explanations of Tuition Fees 25 1.2.1.2 Existing Political Economy Explanations of Tuition Fees 28 1.2.2 What Explains Public Subsidies? Public Policy Theories and “Simple” and “Conditional” Partisan Hypotheses 31 1.3 The Argument of This Book 35 1.3.1 What Explains the Origin of the Four Worlds of Student Finance? 36 1.3.1.1 Partisan Hypothesis as a Starting Point 36 1.3.1.2 From “Simple” Partisan Hypothesis Towards a “Time-Sensitive” Partisan Theory 40 1.3.2 What Explains the Sustainability of the Four Worlds? And Why Does Time Matter? 45 1.3.3 Some Crucial Empirically Observable Implications of the Model 52 1.3.3.1 Individual Level 52 1.3.3.2 Meso-Level (Parties) 53 1.3.3.3 Macro-Level (Countries) 53 1.4 “What’s All the Fuss About?” The Socio-­Economic Consequences of Tuition-Subsidy Systems 54 1.5 Outline of the Book 58 Notes 61 References 63 Chapter 2: The Four Worlds of Student Finance: A Comparative Descriptive Overview of Tuition Fees and Subsidies in 33 OECD Countries 74 2.1 Introduction 74 2.2 “Deep Down the Rabbit Hole”: A Comparative Overview of Tuition-Subsidy Systems 77 2.2.1 Tuition Fees in Advanced Democracies 77 2.2.1.1 Who Pays? 77 2.2.1.2 What Are the “Average Tuition Fees” per Country? 78 2.2.1.3 Do All Students Pay the Same Amount? 84 2.2.1.4 Who Determines the Tuition Level? 85 2.2.2 Subsidy Systems Across the OECD World 86 2.2.2.1 How Much Do Governments Spend on Subsidies? 86 2.2.2.2 In Which Way Are Subsidies Paid? Which Form Do They Take? 89 2.2.2.3 How Many Students Receive Subsidies? How Much Do They Receive? 91 2.2.2.4 What Kinds of Subsidies Do Students Receive? 92 2.3 Bringing the Puzzle Pieces Together: Combining the Analyses of Tuition Fees and Subsidies 94 2.3.1 Reducing the Complexity: Cluster Analyses 95 2.3.2 Preparation: Selecting Clustering Variables, Objects, and Algorithms 96 2.3.3 Cluster Results 99 2.3.4 Post-clustering Diagnostics 107 2.4 Conclusion 108 Notes 109 References 112 Chapter 3: Adding “Some Flesh to the Bones”: Illustrative Case Studies of Four Diverse Cases Over Seven Decades 116 3.1 Introduction 116 3.2 Purposes of the Case Studies 116 3.3 Methodological Procedure 118 3.4 Case Selection Technique 119 3.5 Structure of the Case Studies 121 3.6 The Low-Tuition–High-Subsidy Regime: Finland 121 3.6.1 Introduction 122 3.6.2 Development of Finland’s Tuition-Subsidy System from 1945 to 2014 124 3.6.3 Conclusion 129 3.7 The High-Tuition–Low-Subsidy Regime: Japan 130 3.7.1 Introduction 130 3.7.2 Pre-War Phase 133 3.7.3 Allied Occupation (1945–1952) 135 3.7.4 “Back to the Future”: The Conservative Government Holds Enrollment Low (1952–1961) 136 3.7.5 The Liberal Democratic Party (LDP) Channels Demand for Enrollment Expansion into the Tuition-Dependent Private Sector (1961–1975) 138 3.7.6 “Back to the Future II”: The LDP Retakes Control and Restricts Access Again, Driving Tuition Up Further (1975–1984) 143 3.7.7 “Back Again to Laissez-Faire”: Further Marketization (1984–2015) 146 3.7.8 Conclusion 149 3.8 The Low-Tuition–Low-Subsidy Regime: Germany 150 3.8.1 Introduction 150 3.8.2 Pre-1945 Tuition-Subsidy System 152 3.8.3 The Early Bundesrepublik: Occupation (1945–1949) and Conservative Rule (1949–1969) 154 3.8.4 The Social-Liberal Coalition Abolishes Tuition Fees and Introduces Generous Subsidies (Bundesausbildungsförderungsgesetz [BAföG]) 162 3.8.5 Kohl Drastically Retrenches BAföG 168 3.8.6 “Im Westen nichts Neues”: The Red–Green Schröder Government Fails in Two Major Reform Proposals (1998–2005) 171 3.8.7 Germany’s Short Flirtation with Tuition Fees (2005–2015) 173 3.8.8 Conclusion 175 3.9 The High-Tuition–High-Subsidy Regime: The USA 177 3.9.1 Introduction 177 3.9.2 Pre-War Phase (1636–1944) 180 3.9.3 The Democrats’ “Age of Grants and Enrollment Expansion” (1944–1980) 182 3.9.3.1 1944 G.I. Bill 182 3.9.3.2 1952 Korea G.I. Bill and 1958 National Defense Education Act (NDEA) 189 3.9.3.3 1964 Economic Opportunity Act and 1965 Higher Education Act (HEA) 190 3.9.3.4 1972 Education Amendments 192 3.9.3.5 1978 Middle Income Student Assistance Act (MISAA) 194 3.9.3.6 Interim Conclusion 194 3.9.4 Republican-Led “Creeping Shift from Grants Towards Loans and Tax Reductions” (1981–2015) 197 3.9.4.1 Reagan’s 1981–1989 Higher Education Policies: “Exhausting” the Existing Grant-Focused Subsidy System 198 3.9.4.2 1992 HEA Reauthorization 201 3.9.4.3 1997 Taxpayer Relief Act and the 1997 Budget Reconciliation Act 202 3.9.4.4 Exemplifying Feedback-Effects: “Clinton and Obama Versus the Banks” 203 3.9.5 Conclusion 205 3.10 Cross-Case Comparisons: Political Origins of the Four Worlds of Student Finance 206 3.10.1 Summary of Case Study Results 207 3.10.2 Introduction of Tuition Fees in England: A Crucial Outlier? 209 Notes 212 References 214 Chapter 4: What Do Parties Want? Parties’ Positions and Issue Emphasis on Tuition Fees and Subsidies 225 4.1 Introduction 225 4.2 Data and Methods 227 4.3 Results: Parties’ Positions and Emphasis on Higher Education Policies 229 4.3.1 Overview 229 4.3.2 Do Party Positions Vary by Welfare State Type? 230 4.3.3 Do Party Positions Vary by Party Ideology? 231 4.3.4 Parties in “Foreign Terrain”: How Feedback-Effects Alter Party Positions 235 4.3.5 “...But Parties Simply Don’t Care About Higher Education, Right?!” Analyzing Issue Emphasis on Higher Education Finance 239 4.4 Beyond Cross-Sectional Analyses: An Exemplary Study of British Party Positions on Higher Education Policy Over Four Decades 243 4.5 Conclusion: Party Positions on (Higher) Education—What Have We Learned? 246 Notes 249 References 249 Chapter 5: Testing the Time-Sensitive Partisan Theory in Large-n Analyses: Parties’ Impact on the Tuition-Subsidy Regimes of 21 Democracies Over Time 252 5.1 Introduction 252 5.2 Cross-Sectional Analyses with Lagged Independent Variables 254 5.3 Time-Series–Cross-Section (TSCS) Analyses of the Developments in 21 Democracies Between 1995 and 2010 on a Country-Year Basis 264 5.4 TSCS Analyses of the Developments in 21 Democracies Between 1995 and 2010 on a Government Term Basis 272 5.5 Conclusion 276 Notes 280 Appendix 278 References 280 Chapter 6: Individual-Level Attitudes Towards Subsidies: How Positive Feedback-Effects Prevent (Radical) Change in the Four Worlds of Student Finance 282 6.1 Introduction1 282 6.2 Literature Review: Studies on Individual-­Level Preferences Towards (Higher) Education Policies 284 6.3 Theoretical Framework: What Explains Preferences Towards Higher Education Subsidies? 287 6.3.1 Materialistic Self-Interest 287 6.3.2 Non-materialistic Factors: Political Attitudes 289 6.3.3 Macro-Level Determinants: Feedback-Effects 290 6.3.4 Controls 292 6.4 Research Design 292 6.5 Results 294 6.5.1 Descriptive Overview 294 6.5.2 Multi-Variate Results 295 6.5.2.1 Testing Micro-Level Explanations: Self-Interest and Political Attitudes 295 6.5.2.2 Testing Macro-Level Explanations: Feedback-Effects 301 6.6 Robustness 305 6.7 Conclusions 306 Notes 309 Appendix 308 References 310 Chapter 7: Conclusion and Outlook 315 7.1 Summary of Findings 315 7.2 Outlook 322 7.3 Zooming Out from Higher Education: Can the Time-Sensitive Partisan Theory Travel to Other Policy Fields? 324 References 326 Index 328 This book analyzes the political economy of higher education finance across a range of OECD countries, exploring why some students pay extortionate tuition fees whilst for others their education is free. What are the redistributional consequences of these different tuition-subsidy systems? Analysing the variety of existing systems, Garritzmann shows that across the advanced democracies zFour Worlds of Student Financey exist. Historically, however, all countries' higher education systems looked very much alike in the 1940s. The book develops a theoretical model, the Time-Sensitive Partisan Theory, to explain why countries have evolved from a similar historical starting point to today's very distinct Four Worlds. The empirical analyses combine a wide variety of qualitative and quantitative evidence, studying higher education policies in all advanced democracies from 1945-2015 Front Matter....Pages i-xvi The Politics of Higher Education Tuition Fees and Subsidies....Pages 1-56 The Four Worlds of Student Finance: A Comparative Descriptive Overview of Tuition Fees and Subsidies in 33 OECD Countries....Pages 57-98 Adding “Some Flesh to the Bones”: Illustrative Case Studies of Four Diverse Cases Over Seven Decades....Pages 99-207 What Do Parties Want? Parties’ Positions and Issue Emphasis on Tuition Fees and Subsidies....Pages 209-235 Testing the Time-Sensitive Partisan Theory in Large-n Analyses: Parties’ Impact on the Tuition-Subsidy Regimes of 21 Democracies Over Time....Pages 237-266 Individual-Level Attitudes Towards Subsidies: How Positive Feedback-Effects Prevent (Radical) Change in the Four Worlds of Student Finance....Pages 267-299 Conclusion and Outlook....Pages 301-313 Back Matter....Pages 315-319 Machine Generated Contents Note: 1. The Politics Of Higher Education Tuition Fees And Subsidies -- 2. The Four Worlds Of Student Finance: A Comparative Descriptive Overview Of Tuition Fees And Subsidies In 33 Oecd Countries -- 3. Adding Some Flesh To The Bones: Illustrative Case Studies Of Four Diverse Cases Over Seven Decades -- 4. What Do Parties Want? Parties' Positions And Issue Emphasis On Tuition Fees And Subsidies -- 5. Testing The Time-sensitive Partisan Theory In Large-n Analyses: Parties' Impact On The Tuition-subsidy Regimes Of 21 Democracies Over Time -- 6. Individual-level Attitudes Towards Subsidies: How Positive Feedback-effects Prevent (radical) Change In The Four Worlds Of Student Finance -- 7. Conclusion And Outlook. Julian L. Garritzmann. Includes Bibliographical References And Index.