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State-financed Universities in Finland- a struggle to gain autonomy lost?

HUMANE Seminar25.10.2010 TriesteMr Esa HämäläinenTheatre Academy Helsinki

370 Years of Univeristy History• Swedish Rule 1640 – 1809

• Royal University in Turku, decreed by Queen Christina• Classical faculties to educate priests, lawers, doctors, later arts• State allowance minimal, own taxation, tuitions• Internal decision-making of all professors• Chancellor, bishop controlling the legality

• Russian Rule 1809 – 1917• University decreed by Czar, financed by him• Move to Helsinki in 1828 (Helsinki had become the capital)• University financed by Czar, new buildings• Internal decision-making by university senate of deans• Humboldtian role of the University as ideal• Growing sympathy to nationality and Finnish language• Chancellor, heir to crown controlling – local substitute chancellor• Other state and and private institutions of education began to emerge

(Swedish university in Turku, in engineering, business, art, crafts, music).

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Finnish Rule 1917 –• Legal framework

• Constitution grants autonomy to Uni Helsinki, 1999 extended to others• University of Helsinki Act• New state universities established from 1950’s on, general university act• Private universities socialized by the state (financially unsustainable)• Legal framwork for degrees

• Steering of• input, processes, output• People, qualifications, governance

• Steering technques• Laws and regulations• Plans, policy papers, strategies• Funding, applications, contracts• Data analysing, reporting, expert analyses• Audits, controls, QAS

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Higher Education Policy - doctrines• Academic-traditional doctrine

· Static, academic disciplines, elitist professions

• Development doctrine from mid 1960’s· Massification, regional development· State-planning bureaucracy and input allocation

• Efficiency doctrine from mid 1980’s· Societal needs, strategic policy papers· Plump sum budgeting and output targets

• Entrepreneurial doctrine in 2000’s…· Innovation policy, profiling, social accountability· Private funding, performance indicators

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University Reform 2010• University autonomy

• Independent public universities and private foundation universities• Capitalisation through university estates and direct investments• Detachment from state concern regulations

• Leadership changes• External board members incl chair (40%)• Rector (and other leaders) recruited instead of election• From civil servants to contracted employees

• Structural changes• Mergers of universities• Internal structural changes

• Steering and funding• Long-term contracts with KPIs• Fundraising encouraged• Business activies encouraged

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Challenges for universities• Recruitment of motivated board members• Capable academic leaders and admin profs• Introduction of active recruitment policy and employer policy• Financial intelligence; investments, ownership, facilities• Friend- and fundraising, business activites• Creating new forms of collaboration and alliances• Balancing the finance through structural changes, redundancies,

raising costs • Meeting the raising service culture and professional procurement

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Analysing the reform?

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The Idea of University historically?⇒Oasis⇒Temple⇒Factory⇒Basar?

New roles in-Interaction with the society-Function in knowledgeproduction

*From State agency*To licensed corporation incontrolled environment*And towards competitivecorporations in free market

Independence Interdependence

Creationof newideasandproducts

TempleInstitution tocreate newaccording tointernal logics

FactoryInstitution toproduce newaccording toexternal logics

Sourcesof newideasandproducts

OasisInstitutionsdetached andthere for theneedy

BasarInstitutionsoffering ideasand products tohighest seller

How does contractual state governance work? (cit. Jussi Kivistö)• Government – University relationship consists of

• Tasks delegated by the government• Resources the government allocates• Government interest in governing the accomplishment of tasks

• Relatioship can be hierarchical or contractual• Move to contractual system• The willingness of the university, how to be sure?

• Official Goals• Conflicting: economic => efficient ?? effective ?? quality• Cultural arguments of universities vs. utilitarian argument of government• ? Government goals = university goals = faculty goals = personal goals

• Operative goals• Typically differ from official and visible goals, not discussed• Obtaining institutional and personal prestige• >< against public goals of efficiency and effectiveness?

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• Contract and funding require• Defining and quantifying of university activities• National databases and reporting systems

• Informational asymetries• Due to the nature of academic work• Due to the organizational complexity (horizontal, hierarchical, spatial)• Due to complex production technology (input, output, discplines)

• Problems with asymmetric information• How to evaluate the true willingness and capacity of University?

• ? Increased data collection reduces asymmetry• ? University reveals internal data willingly

• How to know who underperforms consciously?• How to know when underperformance results from lack of resources?• How to reliably count (and separate) different inputs and outputs?• How to control the validity of information received?

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• Behaviour-based governance• Input-based funding (line-items, formula), Quality assessment

(procedures)• To be used

• When output measurability low• When output uncertainty high• When long relationship between the agents

• Output-based governance• Performance-based funding (targets, indicators, cost-analyses), quality

asessment (products)• To be used

• When task programmability low• When goal conflicts hight• When short relationship between the agents

(cit. Jussi Kivistö, 2007)

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What Should a University Do? (1)

• Different values?• Social integration and econ. competitiveness important for state• Legal and financial autonomy important for university leaders• Academic freedom important for staff and students

• Accountability breeds from lack of trust• State and financing agencies want to have something in return…• So do the university leaders internally…

• Moral dilemma• to play or not to play?• To play but what game?

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What Should a University Do? (2)• IF NOT CHEATING, A UNIVERSITY MIGHT WANT..

• Utilitarian:• to align to the game and define a balanced success strategy

- Egoism:- to concentrate on strengts

- Caring:- to concentrate on nurturing human capital

- Communitarism:- to create a new ideal for the reformed university

- Codes of action:- to concentrate on developing the rules of governance,

- Freedom of individuals:- to save the academics from external intervention

- Virtuous action:- to choose leaders who are best befitted to the new rules

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What Should a Univerity Do? (3)• New sources of income?

• Contracting, tuition fees, donations• Goal variation?

• Emphasis on quality• Creating several simultanious goals• Emphasis on societal responsiblity

• Process improvements• Imporve processes and save money• Show the real problems instead of tactics? E.g. Difficulty to sack

people, limit students rights, students willingness to work• Surpise elements

• Proposing something unexpected – gain money for that• Make new alliances from private or corporate sector? From

polytechnics? Overseas?

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Back to University ReformKing Saviour or Emperor with New Cloths?• Legally a big change

• Major change, pendelum turning back to more private• Degree system intact• Legal framework• Economic freedom for new activities

• Steering• Procedurul, budgetary and HR regulations lighter• Funding is a strong tool for ruling• Evaluative state breeds new mechanisms for accountability• Detailed state-intervention through detailed data collection

• University leaders hijacked?• Can we keep different rules in internal governance?• Can we free us from the old mode of reacting and become proactive?

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Concluding remarks (revisited)(1) Universities have more diversified roles in society, basar-type

characteristics getting stronger

(2) State still seeks for mechanisms to controll and steer the universities, whileuniversities try to minimise state intervention (even when collaborating).Steering mechanisms become more elaborate and indirect.

(3) Uniform and standardised solutions cannot any more be agreed upon, asflexibility and local demand are more important than aligning yourprocesses and services to idealised, generalised needs. The UniversityReform underlines this.

(4) Growing autonomy of the Universities and the new detached role to theState seem to lessen the principle ”common enemy brings you together”and to emphasize the differences and maybe as a consequence increase thevariation. Univerities have a challenge in finding common grounds.

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