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Theoretical and Applied Economics
No. 1 / 2017 (610), Spring

Economic structure of educational process and its implications for the higher education reform

Holmes Institute, Brisbane, Australia

Abstract. Playing a pivotal role in the development of the modern society, higher education industry has reached its capacity at least a decade ago and since then has lost its former characteristics of a public good. Funding challenges and non-consistency in quality of output dominate the modern discussion on tertiary education policies in search for the optimal way of reforming the sector. None of the policies so far had a close look at the operational structure of colleges and universities from the economic perspective, which by the author’s opinion is the reason behind the lack of progress in reforming the sector. This study presents a discussion on economic structure of different functions within the higher education process and suggests the levels of competition and regulation most appropriate for each of these functions. The proposed option for the higher education reform allows greatly reducing the costs of obtaining a post-secondary qualification, while simultaneously addressing the quality issues.

Keywords: Higher education reform, market structure, market failure, natural monopoly.

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The Economicity. The Epistemic Landscape, Marin Dinu, 2016


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