New Approaches to Coordination in Higher Education

The conundrum facing governments today is to define when and to what extent intervention is appropriate and when the state should step back and leave market components to steer higher education.¹

More than 20 years ago Burton Clark introduced a simple – but obviously very useful – model of higher education coordination. Clark's triangle of governance (Clark, 1983) represented the three powers operating in higher education: the state, the market and academics (academic oligarchy). He used the model to represent different forces of coordination in different countries and, in particular, the growth in influence of the market.

Most reforms in higher education within the past 10 years have been accompanied by cries for 'more market and less government'. They have promised universities² increased institutional autonomy and the users of higher education ('stakeholders') an increased sensitivity to their demands via the market mechanism. However, market orientation and centralized state control have proved to be not mutually exclusive, but rather to be the opposite ends of a continuum of higher education coordination (Meek, 2002, esp. 69).

The objective of reforms seems not to have been so much to 'roll back' the state and let the free market rule, but rather to reconstitute the relationship between universities and the state, with the market taking up the slack. Free market was not the final objective, but the introduction of market principles via competition and performance measurement as an enhancement of state coordination. This type of intervention no longer relies on restrictive input parameters and procedures, but reacts flexibly on the basis of measures of output and demand for this output. This type of quasi-market produces information, which can be used indirectly to set 'prices'.

A cursory look at higher education reforms during the past 10 years indicates that two new policy instruments have become the preferred levers of change in steering and coordinating the framework: instruments of funding allocation and instruments of quality assurance.

Table 1 shows that these two instruments have been mentioned in the majority of higher education acts in the last 10 years. These laws tend to stipulate the principles on which the operation of the system is based. In most cases the instruments have been modified over time or such adjustments are in discussion. The expectations are high in terms of the instruments' roles in the public coordination of higher education:

• New funding models often emphasize performance in an attempt to gain leverage over certain behaviour on the part of the universities. They exercise a steering function (Leszczensky et al., 2004, 5ff.).

Table 1 - Aspects of reform in higher education, selected countries.

Full table

A real paradigm shift is noticeable in the use of funding method in most higher education systems of the (Western) world. State funding was previously provided in accordance with the deficiency principle. Since universities were not seen to be in a position to raise any money from other sources without being negatively influenced by their benefactors, state money was provided.³ This argument has been turned on its head since the 1990s, with governments actively utilizing performance-based funding models to steer universities (Jongbloed and Vossensteyn, 2001). This method avoids the use of autonomy-limiting policy directives, and instead of stipulating certain activities, it simply makes them financially attractive.

However, just as detailed budget allocation has been recognized to have significant weaknesses, so these new models of funding are also restricted in their effectiveness. Performance-based funding has disadvantages such as the increase in system instability or in distortion of institutional activities, which must be weighed up against the advantages. In general, universities do not have enough income to allow them to iron-out the affects of volatile product demand (e.g. changes in student numbers). Equally, it is difficult to design funding methods, which accurately reflect the plethora of activities carried out in a university. Indicators in a funding method are always proxy measures, which may, in turn, lead to distortion of the activities they are supposed to represent. Decisions on how to treat these issues lead to the main policy question which is: how much of the funding should be allocated according to performance-based formula funding and how much allocated on the basis of negotiations, contracts or discretionary funds, each related in varying degrees to actual university performance (cf. Ewell, 1999).

• Models of external quality assurance are utilized to 'illuminate' the performance of universities. Their function is that of mapping university activity, for transparency and accountability (Leszczensky et al., 2004, 15ff.).

Here also, a paradigm shift is apparent. States previously used the control of due process and, to an extent, the control of inputs into such processes to exert influence on universities. What the state rarely knew was what the university actually 'produced'. For example, how many graduates resulted from how many students? In the British tradition, university courses and the subsequent examinations on completion of courses were periodically controlled by professionals in the rather covert process of external examiner review. In the German tradition, syllabi for examinations had to be authorized by the science ministries of the Länder. Now the emphasis is on providing assessment procedures, which assure quality control and make internal assurance procedures transparent. This transparency should assure the accountability of universities for their actions and enable university stakeholders – or even 'customers' – to make informed choices between various service providers. Neave has termed this new form of state-driven intervention the 'Evaluative State' (Neave, 1998).

Intense external monitoring may lead to better information about the universities. However, it may also lead to the creation of a new form of bureaucracy, which hinders the fulfilment of core tasks. It is therefore important that quality assurance methods have a clear purpose against which their effectiveness can be evaluated.

There is an apparent complementarity between these two instruments, since the steering function requires information on the effectiveness of steering initiatives. This can be provided by quality assurance measures. Also the mapping function becomes most effective when clear consequences result from the exercise. One consequence might be the direct affect on public funding. The constellation is sketched in Figure 1.

Figure 1.

The challenge of complementarity between procedures of funding and quality assurance.

Full figure and legend (11K)

A Framework for Coordination

In Figure 1, the effectiveness of a steering mechanism in the complex structural, operative and normative framework of higher education (cf. Becher and Kogan, 1992) lies in the degree of their suitability to one another. This seems to be a view that has escaped general analysis, possibly due to the fact that the instruments have different value systems and seem to call for different competencies in their construction, operation and review. A linear relationship (i.e. if you choose 'a', you must choose 'b') is, however, not to be expected. That is why the figure does not represent a complete matrix. According to Becher and Kogan, allocative instruments affect the operation of higher education processes, while evaluative instruments are concerned with norms, which determine the boundaries of this operation (ibid., p. 157ff.). This point is certainly pertinent, but both operation and norm-construction are themselves affected by the relationship between the forces of state intervention and market orientation within the system. This axis can be used to elaborate the diagram in Figure 1 — see Figure 2.

Figure 2.

Trajectories and congruence of a coordination framework.

Full figure and legend (53K)

The diagram in Figure 2 sketches the dimensions of the relationship between these two policy instruments in higher education coordination. Basically, it argues that due to their interdependence a funding method with a high degree of state control is likely to be matched with a quality assurance method involving a similar degree of state control to provide an adequate coordination framework. Conversely, a method of quality assurance based on the market principle only comes to fruition in a system where it is used in conjunction with a method of funding that has a higher degree of market orientation.

It is important to clarify this argument. A higher education system may, for example, produce a comparative ranking of all universities. This diagram illustrates the 'use' of this policy measure in the coordination framework. Within a framework, where students are allocated study places and universities' budgets are not based on any form of performance variable, the steering effect of the ranking will be minimal.

On the vertical axis of the diagram, funding methods are depicted which emphasize either the market or the state as impulse driver. Three main types of funding method are listed:

• Discretionary budget: The budget is determined by a state body and given to the university in a more or less detailed form. State control within this method is high and is often complemented by line-item allocation, which prescribes the internal usage of the funding. The basis for this funding was traditionally the funding from the previous budget period, which was carried forward and at times increased to take account of inflation (incrementalism), but this funding can be supplemented by ear-marked funds for specific tasks. If ear-marked funds are distributed on a competitive basis, they are usually performance related.
• Performance-based funding: The budget varies according to the performance of the university in a previous period (i.e. ex-post). Formulae are often utilized to calculate the allocated budget, based on indicators for performance (e.g. number of graduates). Since this model entails a reduction in direct state intervention, it is often complemented by the final sum being allocated as a block-grant, with minimal or no restrictions on its internal usage.
• Vouchers- or fee-driven funding: In this funding method, it is market demand that serves as impulse driver for funding. However, a state could, for example, provide all students with enough financial support to allow them to pay the tuition fees demanded by the different universities. State intervention would be reduced to questions of the amount of student support and the boundaries within which universities could set their fee levels (not insignificant levers for state intervention).

On the horizontal axis three methods of quality assurance have been indicated:

• Input control: As argued above, there has been a strong preference in the past for the control of inputs, which could then secure the optimal working conditions in a university. Next to funding, one of the main inputs into the educational process are students. Students are often required to have completed a certificate of academic 'maturity' (Austria: Matura; Czech Republic: Maturita). Further to this, the number of students a university may enrol can be dictated by the state. Further examples of such input control measures are stipulations as to the qualifications of the teaching staff or indeed state authorization of course syllabi. A new method of input control is to be found in accreditation procedures (cf. Leszczensky et al., 2004, 15ff.). These procedures are often state-initiated and, if the accreditation is positive, result in the state authorizing university courses and thereby public funding of these courses. The main difference between such procedures and former methods of input control is that the accreditation judgment is made by academics or practitioners and not by state officials.
• Output control: This type of instrument is being increasingly used in higher education to take the emphasis off input control and transfer it to discovering what the university is actually 'producing'. Such initiatives aim to make university activity transparent and enable the assessment of this activity. This assessment may result in recommendations for future practice or summative quality judgments, which can be used to compare activities between universities directly. A much more subtle form of output control than external quality assessment is quality audit. Here an external procedure does not assess the actual output, but the effectiveness of a university's own internal quality assessment procedures in assuring the quality of outputs (ibid.).
• Marketing: As the diagram suggests, this type of instrument would be used predominantly to inform the market and aid choice between the services of different universities. Universities would actively promote knowledge about their own activities and those of their competitors to 'sell' their services to their customers. On the initiative of either the state or the media or indeed universities themselves (benchmarking), ranking lists may be used to facilitate consumer choice.

With the help of this model, it is possible to formulate two critical questions relating to the funding method and the method of quality assurance:

1. Does the funding method correlate to the method of quality assurance? For example, output-orientated funding would make less sense in a system with strict input control than in a system with output control. Input control is usually implemented under the assumption that the output will be a direct product of the input. For example, the assurance of an appropriate ratio between teaching load (student hours per course multiplied by number of students) and number of academics. In a system of output-orientated funding, the university is made responsible for the number of graduates, for example, for which it is publicly funded. This university is also exposed to the risk that a negative relative performance results in a reduction in public funding. Therefore, the university must be given responsibility to set the learning conditions in such a way as to optimize its performance. Input control should be minimized. However, the state can justify a right to control the quality of the resulting quantitative performance and to assure that any changes in learning conditions are not deleterious to the students.
2. Does the quality assurance method enhance the information provided via funding method, or is it just bureaucracy? For example, in a system based on demand-driven funding, it is not necessary to assess whether universities are meeting customer demands. However, it may be seen as appropriate to assess the longer-term effects of the funding on the quality of higher education performance. As mentioned above, there are a variety of quality assurance methods, ranging from accreditation to quality assessment and quality audit. The standards used as evaluative criteria are broadly normative, comparative or individual, respectively. In a system with demand-driven funding, comparative criteria are no longer of primary importance, since the competition for students or third-party funding has the potential to replace this function. As actors in the market, the universities might, of course, want to compare themselves to each other via a benchmarking scheme. State-initiated accreditation or quality assessment procedures might be criticized in this context as creating too much bureaucracy or attempting to over-steer the system. A system of quality audit, which entails an external assessment of the university's efforts to meet its own goals, might, however, be justified on the grounds of helping universities to help themselves.

In the final analysis, the problem is that pure systems of funding or quality assurance — that is, ones using only one funding method or one system of quality assurance — are practically non-existent. Instead, various components are used for different types of institutions and different tasks. The challenge is to find a balanced mix between state and market, realized through these components of funding method and quality assurance and their congruence with one another.

It is proposed that the appropriate point of balance will differ between countries. It is dependent on the higher education system's stage of development, particularly in terms of internal systems of quality assurance at institutional level, and the knowledge of university services held by customers. Furthermore, historical and current perceptions of universities and their activities will shape the debate on coordination and steering initiatives.

One aspect that should not be overlooked concerns the question of who are the appropriate actors in this coordination framework: state, market or managerial leaders of universities? Becher and Kogan see the core elements of the university system as small groups of academics at the bottom of the organizational hierarchy (Becher and Kogan, 1992). Clark did not overlook this fact when he placed academics on the third corner of his coordination triangle. Looking at the general trajectory of change in many countries today (signified by the arrow in Figure 2 pointing towards market orientation) and the preconditions for this trajectory, we may be tempted to draw Clark's triangle differently. In place of 'academic oligarchy' we might be tempted to substitute 'university'. Certainly, the management of a university plays a significant role in the higher education system today, because while the state has to make a programmatic choice on its level of intervention, the university has to 'manage' its interaction between both elements of its environment. Management, however, becomes a task in which academics must also participate.⁴, ⁵

Experience in the Field: Developments in Czech Higher Education

The Czech Republic makes a particularly interesting case study for changes in the state-market nexus and the development of procedures for public funding and quality assurance. The developments can be divided into two broad phases, both structured by new higher education laws. In the first period, centralized state policy was in effect replaced by institutional autonomy and market instruments. In the second period, a finer balance between state, market and institutional autonomy has been sought.

Background

The Czech Republic has a population of 10.3 million people. In the 14th century its capital city, Prague, was the third largest on the continent after Rome and Constantinople. During the so-called golden epoch, the Emperor of the Holy Roman Empire, Charles IV, ruled from Prague and established the first university in middle Europe in 1348. Today, almost 40% of students take their courses in the Czech capital and Charles University is still the biggest university in the Czech system.

In terms of investment in tertiary education, the expenditure per student at $5,431 (2000, PPP) is well below the OECD average ($9,571). However, seen in the context of the country's GDP per capita, the level of expenditure per student is in fact close to the average at 39 points to an OECD average of 42 points (OECD, 2003). A recent paper by Haasz and Jeek (for the Council of Higher Education Institutions; 2003) has highlighted the financial problems in the higher education system due to budgetary constraint. It calls for an investment in the sector, which is slightly above the OECD average. Table 2 gives an overview of further dimensions of the current higher education system in the Czech Republic. After an increase in student numbers of 40 thousand (+20%) between 1998 and 2001, the total number of students (full-time equivalent) in 2001 reached 245 thousand, predominantly in public universities. Despite the fact that the number of private universities with state recognition has grown (1999, 9; 2002, 27), the number of students in this sector remains relatively small and they are largely reliant on state funding.

Table 2 - Higher education landscape Czech Republic.

Full table

Development Phase 1: 1990–1998

Recent history is framed by the Higher Education Act of 1990, which was drawn-up very quickly after the Velvet Revolution and the collapse of the Socialist regime. Many intellectuals had taken part in the revolution and this very liberal act had the symbolic value of recognizing this group's part in the change and acting as a signal for further changes in society, which would follow (Worgan, 1995; Neave, 2003). At this point, the highly restrictive and central bureaucratic Higher Education Act of 1981 was buried for good.

Aspects of the new 1990 Act and subsequent developments were:

• reintroduction of research into the universities,
• reintroduction of academic self-administration including the academic senate,
• introduction of two-phase BA / MA-course structure,
• abolishment of incremental line-item budgeting and its replacement with lump-sum funding,
• a new funding allocation method based largely on student numbers,
• establishment of an accreditation commission (Akreditaèní komise), which took on the task of approving or rejecting study programmes or indeed the establishment of new universities. However, the specific role of the accreditation commission was to make recommendations to the ministry of education, youth and sport (Ministerstvo kolství, mládee a tìlovchovy) on this issue.

The philosophy behind the act and subsequent developments was to reduce state influence and strengthen academia. The level of influence available to the state in terms of coordination and steering of higher education was therefore minimal. Indeed, a recent commentator polemicized that policy in this period became a 'forbidden word' (De Boer and Goedegebuure, 2003, 219).

Neave has perceptively put these changes down to two strong ideological influences on the Czech system at the beginning of the 1990s — the rediscovery of the Humboldtian ideals of academic freedom in teaching and research and the influence of neo-liberal ideas, particularly regarding institutional autonomy, brought in by international advisors (Neave, 2003). One of these international advisors has stated on reflection that many internal actors viewed measures designed for social change (e.g. equality measures) with scepticism in view of their immediate past (Cerych, 2002).

In terms of the funding method, this relied heavily on steering via student demand. During the early 1990s, the input variable 'number of students' contributed about 92% to university budgets, excluding investments (see Figure 3, above). On the one hand, the number of students universities could enrol was not limited by state intervention, so that this input value can be viewed as the result of interaction between the demand of the students in the 'market' and the supply of courses in the universities. On the other hand, the absolute amount of funding for the whole sector was set by government. This actually meant that the universities competed for a portion of the funding cake. Expanding student numbers, therefore, did give the universities a chance of winning a greater proportion of the cake, but general expansion resulted in a deterioration of resources per student on the whole, since the total budget for the sector did not rise in-step with the growth in student numbers.

Figure 3.

Comparison of funding components (excluding investments) 1994 vs 2002.

Full figure and legend (54K)

The introduction of accreditation procedures was a replacement for direct state control. The accreditors were academic peers. This instrument of quality assurance was introduced to assure that universities were offering courses, which complied with minimal standards. As in the classic accreditation procedure, the exercise results in either a positive authorization or non-recognition of the evaluated course by the state. Authorization is a precondition for state funding.

From this brief vignette, it is possible to conclude that state intervention was minimized. Money was allocated for enrolling students — a demand-led instrument of funding. The accreditation procedure was utilized to ensure that the most obvious potential negative effect of such a funding strategy — sinking standards — did not occur. In the long term, one could argue that a change in demand could be expected once the students — as informed customers — noticed the differences in the quality of provision. However, these developments occurred at a time when demand far outstripped supply and this was therefore a 'suppliers' market'. The application of an accreditation procedure can further be justified on the grounds that the sheer scale of change — which was exacerbated further by the funding mechanism — necessitated the setting of normative standards of provision.

Development Phase 2: 1998 onwards

The second phase of system development began in 1998 with a new higher education law, which had been developed in consultation with the universities. Changes both in the funding method and the method of quality assurance evolved before this new law, but were confirmed by it.

By 1998 significant achievements had been made. The number of institutions had expanded, especially in the private sector, while some specialist institutes had been merged with others to form new multiple faculty universities. Through the development of regional universities, the predominance of Prague as the centre of the higher education system had been reduced and the diversity of the system marginally increased (Bene et al., 2003, 43). The number of students within the system had nearly doubled over the past decade, although subject-specific statistics show that this growth had been uneven (see Table 3, CHES, 2001, 89–90). The number of staff had not kept pace with growth in this period, with a slight increase in the total number of persons employed in the sector, but a significant growth in the number of academics (Index 1990=100, 2002=105 resp. 129) (CHES et al, 2004, 21). Despite this, the ratio of academics (teaching staff) to students remains below the OECD average at 14.9 to an average of 16.5 for all tertiary education in 2001 (OECD, 2003, latest figures).

Table 3 - Growth in number of students by subject area 1989 / 90–1999 / 00 (Index 1989 / 90=100).

Full table

There is no denying that the level of funding is a dominant topic of debate in the Czech Republic (cf. Haasz and Jeek, 2003), but we are predominantly concerned here with issues of coordination. What changes did the new law of 1998 bring about?

• Internal governance: The law of 1990 recognized both universities and faculties as legal entities in their own right. This resulted in reduced management and coordination power of the universities and the new law rebalanced the relationship of these two entities in favour of the university.
• Internal / external nexus: Introduction of boards of trustees at university level to advise on university activities and strategy.
• System coordination and funding: The new law obliges both the Ministry of Education and individual universities to draw-up strategic development plans, which should be updated regularly. A proportion of funding is distributed based on a congruence between institutional and state missions. A further proportion of the funding is put aside to support more general development initiatives.
• Quality assurance: The role of the Accreditation Commission has been officially extended. The subject assessment exercises initiated by the Accreditation Commission are defined in the new law as a supplementary task for the Commission. Further to this, all institutions are obliged to develop their own internal quality assurance systems. Their assessment is part of the Commission's remit.

The concrete changes within the funding system concern the proportion of state subsidy allocated by formula. While the formula component in the allocation model has been reduced, the state has increased ear-marked funding, which enables it to directly promote initiatives at institutional level (see Figure 3) (ebková and Bene, 2002, 8). Universities receive funding on the basis of a congruence between their strategic development plans and those of the ministry in the form of contract funding. A proportion of funding is distributed, for example, to support cooperative course provision between institutions, promote the number of doctoral students or life-long learning initiatives. The formula-based component, in turn, now takes specific account of research activity measured by third-party funding (proxy for research demand), ratio of professors to other academic staff (input) and ratio of post-graduates to undergraduates (demand).

While the basic framework of the funding model has been modified to take account of more activities and the specific interests of government policy, another change took place on the initiative of the universities. They requested that a maximum number of students eligible for state funding should be agreed between the Ministry of Education and individual universities. This introduced an element of control into the funding system, which was otherwise dog-eat-dog, with the university achieving the highest proportion of students receiving the most funding.

Additionally, although tuition fees are banned in the Czech Republic, universities are entitled to charge user fees for all services and tuition fees for life-long learning courses. Since 2000, modules from these courses may be recognized as completed modules en-route to degree programmes. However, such students still have to pass the standard entrance exams for university admission. It is too early to say whether this change will mean the introduction of a strong market element into the coordination system.

In the second phase of the development of Czech higher education, the coordination framework became more complex, but also more comprehensive.

The state increased its input control through ear-marked funds and negotiated maximum student numbers. Supplementary funding may be earned by universities through services and user fees charged to students, but also by charging tuition fees for additional student places on life-long learning courses. In total, the average university earns about 25% of its budget through such fees (Bene, private correspondence).

In terms of quality, the government has extended the remit of the Accreditation Commission, beyond examining conformity to minimal standards, to include external quality assessment at subject level. This external assessment should aid universities' own efforts to improve the quality of their services and is reinforced by the legal obligation of universities to operate internal systems of quality assurance. Thus, decisions on the allocation of ear-marked funding can be aided by qualitative information emerging from the internal and external systems of quality assurance. This qualitative information can also be provided in a concise form to inform potential students and, in particular, those who are required to pay their own way. An appropriate form for achieving this latter task has not yet been found.

Evaluation of a Coordination Framework

Debates on higher education reform should distance themselves from the dichotomy of state ('bad') vs market ('good'), or vice versa. Indeed Figure 2 may help us to view such arguments in their structural context. On the premise that the right mix between state and market is somewhere near the middle of the diagram, it might be assumed that the nearer the focal centre of a coordination framework is to maximum state control, the more forcefully the argument for market orientation will be put. The nearer the focal centre to market orientation, the stronger the argument for state intervention will become. As with everything in life, it is all about moderation. Both sides have a legitimate and useful part to play in higher education coordination. This paper proposes that this balance is currently being sought by using funding and quality assurance as instruments to enable both steering and mapping of university activities. Figure 4 shows the development of the coordination framework in the Czech Republic in the two phases discussed above.

Figure 4.

Trajectory of coordination change in the Czech higher education system.

Full figure and legend (66K)

In the second section of this paper, two issues concerning the implementation of such instruments were formulated:

1. Does the funding method correlate to the method of quality assurance?
2. Does the quality assurance method enhance the information provided via funding method, or is it just bureaucracy?

As regards the first question, the funding method of the early 1990s conformed to the general direction of policy reform. Universities were given a high degree of institutional autonomy and, in accordance, were funded in relation to their performance. Initially, the use of accreditation as an instrument of quality assurance seems appropriate as it ensures the conformity to minimal standards in terms of internal procedures of a university for course provision and the quality of inputs (e.g. the qualifications of the teachers). However, there were two problems with this constellation. A further development of the funding method was necessary because the initial procedure encouraged universities to enrol as many students as possible, and because it made the enactment of higher education policy, over and above a mere increase in numbers, extremely difficult. The indicators in the formula were not sufficient to fulfil higher education policy needs. A solution to the first problem was found in the negotiation of maximum student numbers between the state and individual universities. The introduction of ear-marked funds into the funding system, by offering supplementary funding for certain programmes, enabled the state to encourage specific university activities. This last modification to the funding method in particular made changes in the quality assurance system inevitable.

The second critical question concerns the purposes of the quality assurance regime. Too much quality assurance can over-burden the system with a new type of bureaucracy. The trajectory of development in the Czech Republic has shown the extension of the quality assurance system to supplement periodic re-accreditation, with broader institutional quality assessment. This development particularly complements modifications in the funding system:

• decisions on the allocation of ear-marked funding can be based on qualitative information;
• the static assurance of compliance through accreditation can be enhanced through a more dynamic and comprehensive analysis of university activity; and
• the universities have an instrument with which to compare their performance with other institutions facing the same challenges.

In fact, the external assessment to be carried out by the Accreditation Committee has been put on hold recently, due to lack of capacity. The growth of the private sector and constant new courses currently provide more than enough work for the Commission to undertake. However, as Figure 4 illustrates, the quality assurance system has expanded and it will be a challenge to balance internal and external mechanisms to minimize bureaucracy while maximizing effect. In the mid-term, it might be advisable to de-prioritize accreditation in favour of institutional assessment and internal quality assurance.

It is quite clear that the Czech Republic, along with many of its Eastern European neighbours, has developed a trajectory, which begins with accreditation as a direct replacement for the former regime, that was based on input control (Tomusk, 2001). Accreditation can be seen as a relatively small step away from such a regime, since it relies on the criteria of conformity and looks particularly at the adequacy of inputs. However, it also requires academics to form the determining judgments. The Czech Republic was influenced by two competing ideologies in the early 1990s and has been trying to find a balance between them ever since. The questions raised at the end of section 'New Approaches to Coordination in Higher Education' relating to the congruence of the whole framework can, in general, be answered positively, as shown in the concluding remarks above. The fact that similar developments and a similar trajectory can be seen in the neighbouring countries of Poland, Hungary and Slovenia (cf. File and Goedegebuure, 2003) would support the argument that coordination policy is indeed to some extent a technical matter, and that it can be informed by comparison between countries. The ultimate question on the extent of state intervention and market influence can be formulated by viewing the funding methods and methods of quality assurance at play. The answer to this question is, however, dependent on geopolitical context and political will. I recently heard a ministerial representative in the Czech Republic remark: 'We have the framework for steering, we just have to decide where we want to go'. Even in times of formula funding and market orientation, this challenge must still be met.

Neither steering through funding mechanisms nor mapping through procedures of quality assurance is an end in itself. This is indeed the reason why a blanket solution to coordination problems in higher education cannot be found (Leszczensky et al., 2004, 187ff.). The higher education landscape, institutional and ministerial competencies, but also policy expediency, are just some of the variables affecting the final construction of coordinating frameworks. No longer do we find clear examples of ex ante state intervention, but neither do we find clear examples of its supposed counterpart — the open higher education market. This paper has analysed the Czech experience because it shows a situation in which an earlier laissez-faire framework has been modified to balance market principles with the legitimacy of policy-driven steering initiatives by the state. The Czech universities join their European counterparts in facing the challenge of becoming 'hybrid organizations' (Mouwen, 2000), which have to serve both the state and the market, while assuring their own survival. The state faces the difficult conundrum of when to steer directly and pre-emptively and when simply to allow the unfolding and development of market elements.

Notes

¹ This paper is based on a presentation made by the author at a conference of the Consortium of Higher Education Researchers' (CHER) in Porto, Portugal, September 4–6, 2003, on the general topic of Reform and Change in Higher Education: Renewed expectations and improved performance? I would also like to thank the Centre for Higher Education Studies (CHES) for their hospitality in Prague on my brief visit there, summer 2003.

² The term 'university' will be used generically here and stands for all forms of higher education institution (HEI), but particularly those offering education at the ISCED levels 5A und 6.

³ This was the argument used by von Humboldt in the German situation (Altmiks, 1999), but also in the middle of the 20th century by the British University Grants Committee (Shattock, 1994, 105)

⁴ Barnett has termed this new environment 'supercomplexity' (Bernett, 1999).

⁵ Definition. The ISCED classification of the OECD defines tertiary programmes as 5A when they are deemed to be largely theoretically based and are intended to provide sufficient qualifications for gaining entry into advanced research programmes and professions with high skills requirements and as 5B when they are generally more practical / technical / occupationally specific than ISCED 5A programmes. ISCED 6 is an advanced research qualification. For the exact qualifications in each category see OECD handbook (2004).

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