This chapter focuses on previous literature and the findings provided by other scientists who have conducted research on this topic. The chapter aims to provide a foundation of knowledge on the marketisation. To meet this goal, the chapter begins with elaborating the concept of marketisation by evaluating and presenting various views of previous scholars who have defined and elaborated the concept. The chapter also examines the grounds of marketisation to establish how it came about. An examination of neoliberalist ideas, activation policies and the emergence of ICT are given weight as they help in understanding how marketisation emerged especially in Western Europe. Further, the chapter explores the global trends of marketisation over the last 30 years focusing on the roles played by neoliberalism and globalisation as mediators of marketisation. Also, other general drivers of marketisation such as ICT and population growth are examined in this section. The literature review further explores the concept of marketisation in higher education. New Public Management is examined to establish how it promoted marketisation. Similarly, the market in public services is evaluated before assessing the marketisation process in higher education and marketing policy developments. Furthermore, an overview of Russian universities is provided. The literature review finalizes by providing key features and the pros and cons of marketisation.
Elaborating the Concept of Marketisation
From a general point of view, marketisation is seen as an integration of the market mechanism for increasing the production of public goods. However, researchers have developed refined definitions of marketisation. According to Natale and Doran (2012), marketisation is a process in which the state owns entities begin to act as market-oriented actors. Maximova-Mentzoni (2012) stated that marketisation of higher education occurs when institutions that offer higher learning services employ the economic theory of the market in the provision of their services. In further elaborating Maximova-Mentzoni (2012) definition, Mavrina and Mingaleva (2018) explained that marketisation of higher education entails the introduction of the principles of private markets into the activities of public institutions.
Marketisation is a process involving the transformation of an entire economy from a planned economic system to a market-based organisation. The process involves liberalisation of economic activity (meaning removal of price controls), reducing the level of state regulation, and opening the systems for market-based allocation of resources. In a narrow sense, marketisation can be seen as changes effected in public sector such that market mechanisms and incentives are introduced within publicly regulated organisations (Walsh, 1995). In this sense, marketisation brings along reforms that allow outsourcing components of public provision, client vouchers, exciting competition among the service and good providers for public funding or creating incentives for entrepreneurial responsibility in the provision of public goods and services (Walsh, 1995). Therefore, marketisation is equivalent to the introduction of competition in the public sector to stimulate efficiency and effectiveness in the provision of public goods and services guided by market mechanisms.
Marketisation takes different types. One of the most dramatic types is privatisation. Privatisation takes place where the government completely abandons production of a good or provision of a particular service by handing it over to the private players (Sclar, 2001). For instance, the state might sell a production unit to a private firm, a workers' cooperative or a consortium of managers or float a state-owned enterprise on the stock market. Once the state transfers the ownership of the firm, it still may introduce regulations that control or limit the actions of the new private sector owners of the firm (Sclar, 2001).
Marketisation represents a shift towards market-oriented service provision or public goods productions. Marketisation introduces two new aspects into social policy governance which are competition and tendering (Zimmermann, Aurich, Graziano & Fuertes, 2014). Some of the tasks that were performed by a public institution would be outsourced. These may include simple job placements to more complex social services (Zimmerman et al., 2014). Since marketisation brings along the concept of competition, it implies that the outsourced services or production of goods should be awarded to a competitive provider assessed on cost and quality (Zimmerman et al., 2014). That is to say, the private individual that wins the contract to supply a good or provide a service on behalf of the government should be able to produce quality products or services at a lower cost (lowest bidder wins the tender). The performance is rewarded in terms of financial payments which is either based on soft (process-related or strict (outcome) performance (Zimmerman et al., 2014). The contracts can either be short-term or long-term.
The Grounds of Marketisation
Marketisation emerged in the early 1970s. Beneath its emergence were some motivating rationales. The core motivation that accounts for the rise of marketisation was competition. It was believed that competition in the public sector would stimulate efficiency gains (Hansen & Lindholst, 2016). Works on reforms to regulated utilities indicate that the threat of entry of a competitor would be significant enough to stimulate efficiency gains in markets of goods and services even without necessarily privatizing the entire sector (Hansen & Lindholst, 2016). The logic was central to most economic theories that advocated for the gains associated with market-based organizations. Such arguments were promoted by the scholars of New Public Management who advanced for reforms in public administration. The scholars argued that the introduction of market incentives or competition in the public sector, in lieu of public monopoly provision, would inspire great innovation, efficiency, and overall performance (Hansen & Lindholst, 2016).
In Western Europe, the concept of New Public Management gained ground in the 1970s to 80s in the form of activation policies. The activation policies primarily aimed at integrating parts of the population into the labour market in a move to curb unemployment (Zimmermann et al., 2014). The prospects of activation policies argued that unemployment would have detrimental effects on individual employability which would manifest in structural unemployment (Zimmermann et al., 2014). To address the complex issue of unemployment and socially excluded persons, individual responsibility (expressed by incentives and compulsion) complemented by the provision of multiple social services and client-centered counselling tailored to individual needs (Zimmermann et al., 2014). It was argued that the provision of such services required new forms of governance and structures of policy implementation. New aspects of governance that were proposed included marketisation, collaboration, and decentralisation (Zimmermann et al., 2014). Marketisation was thought to broaden the set of actors from classical actors (public employment service) to other diversified actors who were assumed to possess a deeper knowledge of the needs of unemployed individuals either because they had closer relationships or due to the external mechanism of market actors (Zimmermann et al., 2014). Therefore, by 1990s, marketisation principles had been widely applied in countries such as United Kingdom, Italy, Germany, Russia, and Sweden among others following the needs to address unemployment as well as in pursuit of efficiency and effectiveness as promised under market-based running of organisations.
Also, the widespread adoption of neoliberal ideas that promoted the strengthening of market mechanisms in the public sector established a base for marketisation. The neoliberal ideology presupposed that provisions of public goods and services should be based on market mechanisms. Neoliberalists advocated for the abolition of government intervention in economic matters. The neoliberalists believed that a free market was essential for an economy to grow. The neoliberal movement was so strong that it influenced political ideologies leading to the formation of governments that adopted policies informed by the concept of marketisation (Thorsen & Lie, 2006).
In addition, the emergence of the Information Communication Technology (ICT) in the 1980s and 1990s laid a foundation for marketisation in the public sector. The emergence of ICT facilitated communication across borders and between business partners. It also facilitated online transactions and even the online provision of services. With the ICT, it was easy to outsource the provision of services and goods which prompted adoption of marketisation in the provision of public goods and services (Cordella & Willcocks, 2009).
Therefore, marketisation can be seen as a phenomenon that emerged in the 1970s following governance reforms that favoured market mechanisms of competition, efficiency, and effectiveness as well as neoliberal ideologies that informed policy formulation and implementation in public sector. Marketisation was also aided by the development of ICT which facilitated the outsourcing of production of goods and provision of services.
Global Trends within the Last 30 Years
Beginning in the 1980s, various spheres of public life were reformed in western countries. The main aim of the reforms was an attempt to import management mechanisms from private companies into the public sector. The transformation was informed by the conception of the state management systems that argued state institutions would start utilizing resources more efficiently, and compete well with other agencies if they were operated in a similar manner as the private companies. This shift from public management towards the application of private management mechanisms in state institutions was also influenced by the neoliberalism ideas that suggested application of the principles of a market economy in the in entire spheres of public life, higher education included. According to Astiz, Wiseman, and Baker (2002, p. 71), "multilateral agencies provide direct influence on the process of institutional isomorphism through influence on nation-states." Public policy changes contribute to institutional globalization parallel to neoliberalism. Consequently, the roles and functions of universities began to change.
For over 25 years, neoliberalism has been influencing economic policy and higher education. The term "liberalism" originated in the 19th century in the city of Manchester when economists championed for free trade and repeal of laws that restricted importation of wheat (Palley, 2005). In that century, liberalists idealized the market as a realm of freedom where land enclosures and free trade operated while suppressing any barriers or resistance that it deemed as interference or unnatural (Saad-Filho & Johnston, 2005). Classical liberalism incorporated both political and economic components associated with assumptions on the advantages of economic progress. Free use of markets, freedom of ownership, and entrepreneurship were considered human rights (Saad-Filho & Johnston, 2005).
The liberalists argued that "exchange on markets was the most effective and efficient way of attaining individual and societal progress" (Daun, 2015, p. 36). Liberalism was further characterized by minimal state intervention and was successfully implemented in a few democratic states that respected the perceived human right to free markets (personal freedom was assumed...
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