University Autonomy in Russian Federation Since Perestroika (Routledgefalmer Dissertation Series in Highereducation)

STUDIES IN HIGHER EDUCATION

DISSERTATION SERIES Edited by Philip G.Altbach Monan Professor of Higher Education Lynch School of Education, Boston College A ROUTLEDGEFALMER SERIES

STUDIES IN HIGHER EDUCATION PHILIP G.ALTBACH, General Editor SAVING FOR COLLEGE AND THE TAX CODE A New Spin on the “Who Pays for Higher Education” Debate Andrew P.Roth TECHNOLOGY TRANSFER VIA UNIVERSITY-INDUSTRY RELATIONS The Case of the Foreign High Technology Electronic Industry in Mexico’s Silicon Valley Maria Isabel Rivera Vargas TENURE ON TRIAL Case Studies of Change in Faculty Employment Policies William T.Mallon FROM HERE TO UNIVERSITY Access, Mobility, and Resilience among Urban Latino Youth Alexander Jun SCHOLARSHIP UNBOUND Assessing Service as Scholarship for Promotion and Tenure Kerry Ann O’Meara BLACK STUDENT POLITICS Higher Education and Apartheid from SASO to SANSO, 1968–1990 Saleem Badat A DREAM DEFERRED? Examining the Degree Aspirations of African-American and White College Students Deborah Faye Carter STATE GOVERNMENTS AND RESEARCH UNIVERSITIES A Framework for a Renewed Partnership David J.Weerts FEDERALISM AND LÄNDER AUTONOMY The Higher Education Policy Network in the Federal Republic of Germany Cesare Onistini RESILIENT SPIRITS Disadvantaged Students Making It at an Elite University Latty Lee Goodwin I PREFER TO TEACH

iii

An International Comparison of Faculty Preference for Teaching over Research James J.F.Forest THE VIRTUAL DELIVERY AND VIRTUAL ORGANIZATION OF POSTSECONDARY EDUCATION Daniel M.Carchidi BARELY THERE, POWERFULLY PRESENT Thirty Years of U.S. Policy on International Higher Education Nancy L.Ruther A CALL TO PURPOSE Mission Centered Change at Three Liberal Arts Colleges Matthew Hartley A PROFILE OF THE COMMUNITY COLLEGE PROFESSORATE, 1975–2000 Charles Outcalt

UNIVERSITY AUTONOMY IN THE RUSSIAN FEDERATION SINCE PERESTROIKA Olga B.Bain

RoutledgeFalmer New York & London

Published in 2003 by RoutledgeFalmer 29 West 35th Street New York, NY 10001 www.routledge-ny.com Published in Great Britain by RoutledgeFalmer 11 New Fetter Lane London EC4P 4EE www.routledge.co.uk This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” RoutledgeFalmer is an imprint of the Taylor & Francis Group Copyright © 2003 by Taylor & Francis Books, Inc. All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publisher. Library of Congress Cataloging-in-Publication Data Bain, Olga B. University autonomy in the Russian federation since Perestroika/by Olga B.Bain. p. cm.—(Studies in higher education, dissertation series) Includes bibliographical references (p.). ISBN 0-415-93296-3 (Print Edition) 1. University autonomy—Russia (Federation) I. Title. II. Series. LB2331.4 .B35 2003 378.47–dc21 2002036797 ISBN 0-203-49993-X Master e-book ISBN

ISBN 0-203-57517-2 (Adobe eReader Format)

To my parents Boris and Eugenia Bain

Contents

LIST OF ILLUSTRATIONS ACKNOWLEDGMENTS Part I.

The Rise of Autonomy

CHAPTER 1

Introduction: Reforming Higher Education in Russia

CHAPTER 2

The Sources of Autonomy

Part II.

Regional and University Response

viii x 1 2 16 46

CHAPTER 3

Decentralization and Regional Autonomy

47

CHAPTER 4

The Trend Toward Autonomy of Russian Institutions of Higher Education

88

Part III.

Pathways to Success

129

CHAPTER 5

St. Petersburg State University

131

CHAPTER 6

Novosibirsk State Technical University

154

CHAPTER 7

Kemerovo State University

186

PART IV. CHAPTER 8

CONCLUSION

207

Discussion and Conclusions

208

APPENDIX

219

REFERENCES

224

INDEX

237

Illustrations

TABLES 2.1. Implications of Public Funding Environments for Institutional Financial Discretion 2.2. Comparison of Frameworks that Model Relevance of Autonomy of Universities to Their Goal-Attainment 3.1. Percentage Share of Geographic Clusters of Regions of the Total Territory, Total Population, and Corresponding Gross Regional Products 3.2. Population and Money Income Distribution by Group of Regions 3.3. Distribution of Regional Government Revenues in the Russian Federation 3.4. Share of Federal Educational Spending by Level of Education 3.5. Spending Responsibilities of the Russian Federation’s Local Governments as a Percentage of Consolidated Governmental Expenditures (1992–1997) 3.6. Per Capita Income and Educational Spending in Selected Regions of the Russian Federation in 1994 4.1. Higher Education Reform Goals 4.2. Leadership, Governance, and Personal Policies 4.3. Curriculum and Standards for Students 4.4. Financial Decision-Making 4.5. Russian Higher Education Enrollment (in Thousands of Students), by Type of Higher Educational Institution (HEI) and Student Admission Status (1981–1999) 4.6. Increase in Tuition-Charged Enrollments (in Thousands of Students), by Sector (1994–1999) 4.7. Attitudes of Various Actors to University Financing and Implications for Organizational Behavior 5.1. Change in Annual Admissions to Public Higher Education in the Russian Federation and the Selected Cities/Oblasts between 1986 and 1998

30 43 49 69 73 75 76 78 98 102 103 105 111 113 123 135

ix

5.2. Annual Student Admission to the Faculty of Philology of SPbU (1994–1998) 5.3. St. Petersburg Student Enrollment, by Student Admission Status, Financial Obligation, and Residence (1995–2000) 5.4. Quasi-Public Enrollments at St. Petersburg University, by Student Status as Percentage of Total Enrollments (1996– 2000) 5.5. Percentage of Out-Of-Town Student Enrollments at SPbU (1995–1999) 6.1. Student per Faculty Ratios at NSTU (1990–1994) 6.2. Ranking Position of NSTU among Polytechnics and Technical Universities 6.3. Sources of Self-Generated Revenues at NSTU (1993–1997) 7.1. Number of Students per 10K of the Population in Selected Regions (1985–1998) 7.2. Total Student Enrollments at KemSU, by Student Admission Status and Year of Study (1991–1995) 7.3. KemSU Self-Generated Financing by Source of Revenue in 1995 8.1. Summary of Part III: University Pathways to Success

149 149 150 150 159 163 179 187 194 201 212

CHARTS 3.1. Annual Number of Students (in Thousands) Admitted to Russian Public Higher Education Institutions, by Specialty (1980–1995) 3.2. Higher Education Enrollments in Selected Regions (1985– 1998) 4.1. Tuition-Charged Enrollment, by Sector (State and NonState) as Percentage of Total Higher Education Enrollment (1993–1999) 4.2. Admissions in Public HEIs by Source of Support and Student Admission Status (in Thousands of Students) (1995–2000) 4.3. Admissions to Higher Education in Russia by Student Admission Status (in Thousands of Students) (1988–1999) 5.1. St. Petersburg University Enrollments (1996–2000) 6.1. NSTU Student Enrollments (1990–1994) 6.2. Foreign Students Enrolled at NSTU (1990–2001) 6.3. Annual Entrants at NSTU Main Campus (1992–2001) 7.1. Structure of Research Finance at Kemerovo State University (1990–1994)

79 82 112 113 114 150 159 170 172 200

Acknowledgments

I WISH TO ACKNOWLEDGE MY GOOD FORTUNE IN HAVING DR. D.BRUCE Johnstone, of the Educational Leadership and Policy Department, University at Buffalo, SUNY, as advisor for the dissertation on which this book is based. His support and insightful recommendations saw me through the completion of my work. Sincere thanks go to Dr. Philip Altbach and Dr. Stephen Heyneman for their careful review of the manuscript and thoughtful comments that led to the publication of this book. I extend my appreciation to the distinguished Rectors of the three outstanding Russian universities, where at various times I was honored to study, to lecture, and to do my research—Rector Verbitskaya of St. Petersburg University, Rector Zakharov of Kemerovo State University, and Rector Vostrikov of Novosibirsk State Technical University. My warmest regards go to a great number of university members who graciously and generously contributed to this research and to many international colleagues and thoughtful researchers I was able to meet during my research. I wish to express my boundless gratitude for the unflagging support of my family—to William whom I am blessed to know, to my parents whose love is immensely generous, and to my brother Alexander, who is supportive and most helpful in updating and cross-checking data sources. This book is dedicated to my loving mother Eugenia and to the memory of my beloved father Boris.

PART I The Rise of Autonomy

CHAPTER 1 Introduction: Reforming Higher Education in Russia

IN THE PAST DECADE RUSSIA AND OTHER NATIONS OF THE FORMER Eastern Bloc have plunged themselves into sweeping reforms in their quest to build more effective economies and to establish free and democratic structures. The reforms in the larger societies triggered and motivated educational changes. At the same time the highly accessible educational systems were the essential prerequisites for these radical societal changes. The massive and radical developments in the countries of “real” socialism brought about enormous dislocation of the societal fabric, and it was only from the mid-1990s that their implications for national education systems started to be more fully appreciated (see, e.g., Cerych, 1995). The reform of education in Russia was launched by a declaration of new educational ideals and the radical negation of Soviet schooling and training, but with no thorough plan for the implementation of the new principles (see Gershunsky, 1993). The reform program was to unfold in a pluralist context allowing for individual and local initiative while retaining mechanisms for governmental steering. The impetus for change came from the grassroots level. The depth and the scope of change were so great that the reforms provoked counter-reforms, generated by the educational establishment and the conservative bureaueracy (Dneprov, 1994, 1996). By the mid-1990s, criticism of the new reforms and concern for their tendency to ignore the strengths of the proud Russian pedagogical tradition became especially vocal. One of the major criticisms referred to the effective restriction of access to complete 11 years of general education. Whereas the constitution guaranteed the right and required the completion of free secondary education, the 1992 Law on Education stipulated only basic general education1 programs for up to 9 years of schooling as obligatory (The Russian Federation “Law on Education”, 1992). The Law also turned most of the responsibilities for school education over to local governments, even though many of

INTRODUCTION: REFORMING HIGHER EDUCATION IN RUSSIA 3

these lacked sufficient resources to provide education equal in quality to that of the past. The reform of higher education began somewhat later than that of school reform, and those involved were determined to avoid the latter’s excesses. The reformers recognized that the future of Russia was intimately linked with a vibrant array of autonomous universities that combined high quality and relevant education with world-class research. A complex dialogue evolved between the central authorities who sought to download responsibility to the regions and individual universities, the regions which were reluctant to accept new financial obligations, and individual universities which sought both greater autonomy from the center and the continuation of the center’s generous financial support. This study outlines the diverse perspectives and initiatives of the major stakeholders. It then presents the stories of three very different universities—St. Petersburg, Novosibirsk Technical, and Kemerovo State—that used distinctive strategies to positively enhance their autonomy in the transition from a state-run to a decentralized higher educational system. SOVIET LEGACY, OR WHY CHANGES WERE NEEDED IN HIGHER EDUCATION In the Soviet period, the state provided generous funding for the system of higher education. The educational system accelerated economic development and made it possible for the country to achieve excellence in many fields of science and technology. It provided broad access to free higher education, an accomplishment never realized by any other country. The system produced many Nobel-prize-winners and well-trained graduates. Higher education remained laborintensive. So long as the prices were set centrally, expenditures for equipment, physical plant maintenance and repair were relatively low. Thus, in the 1960–1970s the bulk of state appropriations (75–80 percent) covered salaries of academic staff and student stipends; only 20–25 percent of the total state allocations were needed for equipment and inventory item purchase, construction and plant repair, research costs, and purchase of books for libraries (Nozhko, Monoszon, Zhamin, and Severtsev, 1968, p. 167). The situation dramatically changed with the liberalization of prices in 1991 and the privatization policies of the transition period. These changes led to a steep increase in the costs for plant maintenance and research equipment. Combined with the shrinking public revenues as a consequence of a sharp decline in production (38 percent drop in

4 UNIVERSITY AUTONOMY IN THE RUSSIAN FEDERATION SINCE PERESTROIKA

GDP since 1991) and poor tax collection, the result was a considerably undermined fiscal base for Russian higher education. The issue of equality of access to higher education also came into focus with the advent of perestroika and glasnost. The public was reminded of earlier studies that showed, in spite of the official claim of equality of educational opportunity, family background continued to have a major effect on the progress of children in school. These studies also reported that educational institutions were stratified in terms of the social origins of their applicants. Thus, initial vocational schools were filled mainly with children from working-class families and from rural areas; they were also used as the “dumping grounds” for underachievers and the marginally delinquent (Szekely, 1980; Jones, 1994, p. 6). It was not until the mid-1980s that the socially stratified structure of education was openly discussed, but since that time the new changes have led to a further intensification of educational inequalities. The pattern of governing the higher education system also turned out to be ill-suited for the newly developing market-oriented economy and its labor market. In the past, higher educational institutions (HEIs) directly served the needs of the command economy, which was centrally planned by the ministries of the respective sectors of the economy. Most of the higher education students (90 percent of the total enrollment in the Russian Federation) were provided specialized professional training outside universities—at engineering and polytechnic institutes, medical, teacher-training, agricultural, and arts institutes. These institutions of higher education were funded and administered by the corresponding functional ministries, and were intended to fill the manpower needs of their respective sectors. But with the move to the new market economy, the industries associated with these ministries were privatized and the manpower responsibilities of these ministries were effectively severed. Many universities established in the Soviet period had grown out of teacher training institutes and continued to award the professional qualification of teacher to their graduates. According to the philosophy of higher education of the time, training in each academic field led to the formal award of a professional qualification. The curriculum was centrally determined and standardized according to narrowly defined specializations. Teaching of the humanities and social sciences was subject to party censorship, and thus academic freedom was infringed. Enrollment targets according to professional specialization as well as the staffing and funding of HEIs were all centrally planned on the basis of the prospective “achieved level” for the various economic sectors. Since higher education was meant to service the economy, its governance was characterized by the vertical industrial sectors’

INTRODUCTION: REFORMING HIGHER EDUCATION IN RUSSIA 5

segregation similar to industrial administration. Employment was guaranteed through a centrally required system of job placement for graduates. The government served both as a provider and a consumer of education. The deficiencies of central planning were already obvious during the Brezhnev era when the economy began its decline. State interventionist labor policies were failing, leading to serious underfunding of the educational sector and to educational policies that failed to serve the economy. Graduates with tertiary education degrees were overproduced and undervalued in the labor market. These deficiencies became further evident in the perestroika era. PERESTROIKA MOVEMENT IN RUSSIAN EDUCATION (1986–1990) While the reform of higher education is usually depicted as an intended effort of change, typically launched from above through government initiative, still the political will and authority to promote the reform, as well as the availability of resources to see it through, may not be enough to enable reform efforts to make a difference. To push reforms through there is often the need for a “Big Bang” crisis (Cummings and Kitamura, 1972) to shake the very foundations of government policy and force a review of all its phases. The Russian “educational revolution” started from above under the policy of restructuring perestroika launched by Mikhail S.Gorbachev in 1986–1990. Gorbachev’s perestroika attempted to reform real socialism into socialism with a human face. The outcomes of the policy surpassed the intended goals. They had a profound impact on all the nations of the former Eastern bloc who from then on turned irreversibly toward liberalism and democracy. Glasnost (publicity, openness, open voice), the counterpart policy of perestroika, implied freedom of speech and the democratic pluralism of opinions. Those who worked and studied at universities and other institutions of higher education perceived it as heralding a more promising future. Distinguished scholars became prominent on the political arena, providing leadership for Russia’s democrats. Among them were the Nobel Peace Prize winner and outstanding physicist Andrey A.Sakharov, the sociologist Tatyana Zaslavskaya, the economists Grigoriy Yavlinskiy (now the leader of the liberal Yabloko Party) and Gavriil Popov (who headed the Moscow City legislature in 1989, and was elected Moscow mayor in 1991–1992), the late law professor Anatoliy Sobchak (who came to head the Leningrad legislature in 1990, and was elected a mayor/governor of St. Petersburg in 1991–1996), and many others (Mukhin, 1999).

6 UNIVERSITY AUTONOMY IN THE RUSSIAN FEDERATION SINCE PERESTROIKA

The glasnost policy of 1985–1991 introduced freedom of speech. University faculty perceived it as allowing them the freedom to pursue their own ideas in teaching and research and as allowing students freedom to acquire knowledge and skills. Thus, the ideals of the Humboldt University—Lehrfreiheit and Lernfreiheit respectively— were endorsed and became catalysts for the liberated creative innovations of the academy in the areas of new curriculum content and new methods of teaching. These transformations were accompanied by changes in the students; they became more committed to learning, improved their study habits, and were more aware of the contemporary global requirements for success (such as computer literacy, problem-solving abilities, knowledge of one or two foreign languages, and awareness of global market job opportunities). Democratization of higher education governance was another important component of the perestroika transformation—following the principles for greater democratization of management that has been introduced in the state enterprises (Soltys, 1997, p. 85) through such legislation as the Law on State Enterprises enacted in January 1988. The governmental ordinances of August 1990 and of February 1991 enacted the “Temporary Statute about a Higher Education Institution,” which granted some measures of institutional autonomy and self-government. From 1990 Rectors of HEIs were to be elected, and appointed as institutional top officials subject to final approval by the government. University Senates were to become the organs for collegial decision-making and to provide broader participation for the professoriate, staff, and students in running institutional affairs. Direct state intervention in institutional academic and research affairs, as well as administration was precluded unless in case of outright violation of national laws. The governmental innovations brought about during the Gorbachev era did not lead to the intended efficiency and effectiveness. Mainly because, as the economists argued (see, e.g., Schroeder, 1987), the basis of the traditional economy—such as state ownership, state control over prices, and central planning—remained intact. The end of perestroika was brought about by the governmental elites, who finally adopted the course of building a free-market economy. Perestroika and glasnost were targeted not only at criticism of the communist regime but also at rediscovering the Russian identity, drawing on its cultural and spiritual heritage and its great past. The reformers sought to restore Russia to the world community from which it had been separated for more than 70 years by the “iron curtain.” The 1991 August coup put an end to the communist party’s ideological hold on the society, and to central economic planning. In the absence of any integrating force, the whole socioeconomic system

INTRODUCTION: REFORMING HIGHER EDUCATION IN RUSSIA 7

started falling apart. All the societal institutions were eroded. The challenge was to institutionalize the new political order through the rebirth of a law-governed state and to rebuild an economy on a market-oriented basis. THE TRANSFORMATION OF RUSSIAN HIGHER EDUCATION IN THE 1990S

Priorities of the federal policy in higher education. Movements to reform both schools of general education and institutions of higher learning shared the slogans of humanism, humanitarianism and democratization brought by the perestroika period. Both movements were initially spontaneously derived from grassroots organizations. However in contrast to the school-level reform, the official reform of tertiary education was more pragmatic in character. Several factors enhanced the pragmatic bias of the higher education reform. The official reform program of higher education in Russia was envisioned to focus first on structural reorganization (see, e.g., Research Institute for Higher Education, 1993, pp. 12–13; Kinelev, 1995b, pp. 88, 102) and to aim at establishing the conditions for the sustained systematic development of higher education. Qualitative renewal in terms of content and educational technologies was to follow. In contrast to the educational policy in the pre-perestroika period of excessive state regulation when the forms and content of education were predetermined by the nation’s economic needs, the new Law on Education of 1992 shifted the rights and the initiative in career choice, personal development, socialization, and job-placement onto the students themselves. With this purpose in mind, the law-makers envisioned an adaptive system of higher education, exemplified by a diversity of types of HEIs to ensure inter-institutional mobility and choice, on the one hand, and a variety of multi-level programs and shortcycle courses within these institutions to enable intra-institutional mobility and choice, on the other. At the same time the pragmatic orientation of higher education was to be enhanced. The Law on Education (1992) stated that all types of post-compulsory educational institutions, such as initial vocational schools, secondary vocational colleges, as well as institutions of the higher education level—academies, institutes, and universities— should integrate in a single sector of professional, career-centered post-secondary education. The ultimate goal was to overcome the longstanding vertical fragmentation of higher education under different production ministries. As of 1993, 23 ministries and departments supervised the nation’s higher education system, and less than half of the public HEIs (219 out of 535) were under the surveillance of the

8 UNIVERSITY AUTONOMY IN THE RUSSIAN FEDERATION SINCE PERESTROIKA

State Committee for Higher Education, a full-fledged ministry for higher education (SCHE & RIHE, 1993, p. 5). In 1998 at least 21 different ministries and departments continued to oversee HEIs. Thus, the vertically fragmented governance in higher education persisted, while a new Ministry of Education, which merged the State Committee for Higher Education and the Ministry of General Education in 1996, assumed the roles of quality control, accreditation, and the formation of national policy for the entire sector of higher education. Structural focus of the reform envisioned from above. The structural reorganization of higher education in post-Soviet Russia was proclaimed the major reform thrust by the Russian Federation State Committee for Higher Education in the early 1990s. The inadequacies of the early system of higher education were related to the organizational model which replicated highly centralized and, at the same time, narrowly specialized sectors of the economy, so that higher education could serve the nation’s economy at its best. Under the conditions of the large-scale and comprehensive national transformation toward the emerging market economy and participatory democracy, the many features of the higher education of the earlier period did not fit the new goals of education. Especially the following features of the higher education system appeared outdated: 1. rigid regulations of educational programs and enrollment from the center; 2. predominance of engineer training2; 3. underestimation of the research potential at HEIs because of the artificial separation from the Academy of Sciences and the Industrial Research and Development Centers; 4. disproportionate location of HEIs in central Russia3; 5. funding of higher education from a single source (the Federal Budget). Hence the major thrust of the higher education reform was organizational restructuring along the following lines: a) diversification of types and levels of education; b) introduction of new forms of organization and funding of research; c) developing regional higher education systems. First, the higher education system was expected to diversify in terms of types of HEIs, the selection of educational and professional programs, forms and methods of instruction and training (e.g., shortcycle, regular, distant), and according to the legal-organizational status (state, municipal, non-state). Between 1985 and 1995, 67 new public HEIs were opened. By 1998 a total number of 580 public

INTRODUCTION: REFORMING HIGHER EDUCATION IN RUSSIA 9

institutions enrolled 3,347,200 students, or 93.1% of the nation’s higher education student body (computed from Goskomstat, 1999, vol. 2, pp. 194–199). The first private institutions were legalized in 1992 reaching a total number of 193 in 1995. Between 1995 and 1998 an additional 141 private institutions were granted state licenses and accreditation, totaling 334 institutions with the enrollment of 250,700 students. The new independent tertiary education sector enrolled 6.9 percent of the nation’s total higher education enrollment in 1998 (ibid.). By February 1993, there were 535 public (state) HEIs in the country, including 97 universities (41 classical universities, 23 technical and 23 specialized—such as pedagogical, linguistic, etc.— universities), 404 institutes and 33 academies (SCHE & RIHE, 1993, pp. 5–7). Private (non-state) HEIs have mushroomed mostly to provide training in the social sciences and the humanities—completely new fields when compared to those earlier distorted by ideological indoctrination, and which coincidentally are less costly to deliver. The most prestigious and popular specialties embrace economics, financing, management, law, foreign languages, psychology, and sociology. Another way to diversify the educational structure was to introduce multi-level educational programs. They were viewed as fitting several goals of the reform. First, to ensure individual choice and flexibility of educational services to fit individual abilities and ambitions, thus making individuals both the subject and the goal of education. Second, multi-level programs were viewed as the best fit for life-long education, allowing easy transfers, changes of the major, and access to education and training whenever individuals felt the need for new opportunities. Third, by making academic and professional degrees granted in Russia’s HEIs comparable with those awarded elsewhere, multi-level education was conceived to promote integration of Russian higher education with the world educational system. Of special concern was the desire to establish comparability between Russian degrees of higher education, which have already obtained renown in the world arena and the degrees offered by other higher education systems. Finally, the introduction of multi-level studies was to radically transform the narrow engineering education of the Soviet schools of engineering and technical institutes. The thrust was to regain the prestige and competence of the engineering school in the pre-revolutionary Russia that produced engineers not only confident in the latest technologies but also with an impressive level of general erudition and problem-solving ability. The new federal policy with regard to higher education promoted new forms of organization and funding of research at HEIs. The

10 UNIVERSITY AUTONOMY IN THE RUSSIAN FEDERATION SINCE PERESTROIKA

federal support for research was channeled, first, to a selected number of State Research Centers4 (Ministry of Science and Technical Policy, 1995), and, second, to individual projects and programs on a competitive grant basis. With the reforms, funding of priority areas of R&D was earmarked to new units and structures, such as research and technology parks, which were encouraged to function on a selfsufficient basis. As of 1996 there were 56 research and technology parks in 40 cities in Russian regions and their number continued to grow. Some 780 R&D firms were spun off by HEIs, and these were expected to promote the market infrastructure for the science intensive sec tors of regional economies and as coordinators in building an integrated innovation environment (Poisk, 1996, #30–31, p. 5). Special federal programs were set up to assist small business to adopt new innovations in science and research. Thus attempts were made to diversify the sources of funding, to increase competitiveness of research projects, and to market research findings more intensively. A promising way of integrating research units with industrial production was by way of regional research associations. Such associations consolidated research efforts across several sectors— university research centers, Academy of Sciences, and industrial R&D. In 1995 there were five regional science and research associations initiated in Altay kray (Western Siberia), Mordvinian Republic (the Volga area), Omsk and Kemerovo oblasts (Western Siberia), and Krasnoyarsk kray (Eastern Siberia). At that time six other regions of the Russian Federation discussed the possibilities of establishing similar associations: Samara oblast (the Volga area), Novosibirsk oblast (Western Siberia), Buryat Republic (Eastern Siberia), Udmurt Republic (the Urals), Novgorod oblast (North-West), and Tomsk oblast (Western Siberia) (Kinelev, 1995a). Developing regional systems of higher education was an important target of the reform agenda. Universities were expected to emerge as the core of these systems. The long-term goal was to expand higher education access to traditional and non-traditional applicants in every region of the country, and at any given time of an individual’s career. Regional higher education systems were expected to better meet new needs for “education during all the life” instead of “education for the rest of life.” Structural integration and mergers of educational institutions were a looming prospect but not without serious obstacles on the part of production ministries still in charge of these institutions, of regional governments to which funding and supervision of some post-secondary specialized vocational colleges were transferred, and of the officials of more autonomous educational institutions. Success stories of such institutional mergers were still very rare in 1995, though occasionally they were highly publicized by

INTRODUCTION: REFORMING HIGHER EDUCATION IN RUSSIA 11

the central educational authorities, such as the case of Novgorod State University established as a result of merging a local polytechnic and a pedagogical institute. Yet in regions with a single prominent flagship university in the central city, networks with smaller colleges in other towns were persistently developing, a case in point is Kemerovo State University which integrated four regional colleges as its branch units by 1997. In pursuit of additional revenue, Moscow State University was especially active in establishing franchises throughout the Russian regions in the late 1990s. Simultaneously, several universities established distance education programs leading to increased HEI competition across regional borders. Strains and pitfalls in the implementation of the intended reform. Many observers who have studied educational dynamics in Russia in the past decade agree that in these turbulent times the immediate outcomes of many well-intended policies added to the strains the system was struggling against. Diversification of institutional types initially caused “a rush for upgrading” into universities and academies because institutional leaders feared the loss of federal funding. Similarly, the indiscriminate introduction of multi-level programs of education and training were confusing. Holders of new intermediate academic and professional degrees encountered reservations or outright rejection by employers in the labor market. Associate and Bachelor’s degrees were often treated by the employers similar to the notorious certificate of “incomplete higher education” for drop-outs. The rapid decoupling of the training and job-placement systems raised a lot of concerns. “Easy” approaches, such as decreasing federal funding for higher education and downloading the funding responsibilities to the regions (where they cannot compete with many other public priorities of spending) only aggravated the problems HEIs had to face. The decentralization process faced the danger that it might do no more than shift funding responsibilities from the center to individual institutions and regional governments. Under these pressures the amount of revenues generated by individual HEIs on top of the allocations from the federal budget increased from 10.8 percent in 1992 to 19.7 percent in 1993 (Kinelev, 1995a, p. 23), up to 25 percent on average in 1995 (Resheniye Kollegii, 1996, p. 110) and to 28 percent in the sector in 1997 (Klyachko, 1999, p. 11). In 1998 selfgenerated institutional revenues were expected to reach 30.7 percent, but the cuts in the federal spending inflated this share to 37.6 percent (ibid.). The national financial crisis of August 1998 further undermined the financial standing of individual institutions. The proportion of funds allocated by the regional and local governments to HEIs in 1995–1996 comprised 15 percent on average

12 UNIVERSITY AUTONOMY IN THE RUSSIAN FEDERATION SINCE PERESTROIKA

in the operating budgets of individual HEIs (Resheniye Kollegii, 1996, p. 110). The tendency to increase the funding responsibility of regional governments was emphasized by the State Committee for Higher Education (Kinelev, 1995b, p. 211). It was also highlighted by the newly amended Law on Education (1996). Article 42 of the Law in particular stressed the responsibility of the Russian Federation’s territories to provide funds for professional post-secondary education including programs of both the federal and regional components of educational standards (pp. 27–28), though regional governments already carried the burden of subsidizing local primary and secondary schools. Although the Law on Education proposed increased autonomy for individual HEIs, the legal and economic basis for institutional autonomy was lacking (see, e.g., Eroshin, 1995; Piskunov, 1996). There was a contradiction in that the Federal government urged HEIs to vigorously pursue new revenue sources, but the 1996 amended Law on Education actually set a ceiling on the admission to public HEIs of fee-paying students at no more than 25 percent of total admissions for such fields as law, economics, and management (Article 41, Item 10). This restrained the public sector of higher education from competing equally with independent institutions. Last but not least, the failures of the structural reform in the general education schools entailed more conservative decision-making with regard to higher education. Thus, the 1996 edition of the Law on Education (Article 39, Item 13) prohibited privatization of state and municipal educational institutions (p. 25). The articles on individual educational loans as the basis for the new higher education economy (Article 42, Item 6) were omitted as being in the process of development. The emphasis of the reform was clearly on institutional autonomy and self-management. But close consideration of the way it was spelled out in the reform documents (including the Law on Education) left many questions about how to exercise autonomy unanswered or simply declared as a principle. The articles of the Law foresaw devolving authorities, owned exclusively by the central state in the past, down to the regional level of bureaucracy. Critics voiced their concerns about the likelihood of increasing conservatism in the higher education area and the growing dominance of vested interests at various levels of educational control. CONCLUSION The situation in Russian higher education has been fraught both with unprecedented hardship and a variety of opportunities. HEIs once

INTRODUCTION: REFORMING HIGHER EDUCATION IN RUSSIA 13

under strict central control and divided by the vertical borderlines of their direct subordination to a number of production-line ministries have attempted in this new era to reach out to each other and build networks that represent the voices of the academia in academic and professional societies. They have increased the level of involvement in the associations of universities (some of them, such as the Association of Eurasian Universities and the Association of Technical Universities, include many universities in the Newly Independent States of the former Soviet Union), in inter-regional associations of schools of law, and professional academies. The first Congress of Russia’s Rectors of 1991 called for concerted efforts of all Russian HEIs in order to enhance their influence in the policy-making process with respect to higher education. However, economic stringency fed separatist aspirations. In the face of the enormous financial shortages of the mid–1990s, the reaction of leaders of public HEIs varied: some continued to demand that the federal government should observe its funding obligations while looking for some special financial arrangement for their own institutions; others searched for new ways to operate more efficiently and autonomously. Local Councils of Rectors developed into influential (formally and informally) collective authorities in regions and cities, competing successfully with the newly established layer of the regional educational bureaucracy. The framework of transformation highlighted spontaneity and the state of flux of the many reform outcomes already achieved. The idea of the self-development of the educational system was conceived to oppose stagnation and to unleash individual initiative and creativity. Curricular innovations introduced completely new fields of study and training. Alternative forms of schooling and educational approaches became legalized. A private sector emerged. These changes derived from a variety of social needs and sought to promote a value system that was representative of the diverse aspirations of the Russian people. The difficulties, hardship, and side-effects of the transitional period, however, can hardly be overestimated. Educational institutions were forced to fight for their survival with the inevitable division into winners and losers, and the consumers of educational services were similarly divided. This chapter introduced the background of higher education dynamics in the 1990s’ Russia and framed the policy of institutional autonomy as a central one in the readjustment of the higher education system to the new realities of the independent Russia. The issues appear very complex, policies often fuzzy, and solutions not on the surface. Yet much depends on the ability of individual HEIs to come to

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grips with the demands of the changing environment and to advance their goals in this process. Several questions have emerged from this overview that will be examined in greater detail in the next chapters. • What is autonomy? What is autonomy for? And for whom is autonomy established? (The focus of chapter 2). • What has been the progress towards autonomy at the subnational level? What opportunities does this development offer for higher education? (The focus of chapter 3). • What steps has higher education taken to strengthen its autonomy? (The focus of chapter 4). • What conditions enable individual institutions of higher education to strengthen their autonomy? (The focus of chapters 5 to 7). NOTES 1 According to the 1992 Law on Education, general education comprises primary (Grade 1–4) and basic general (Grade 5–9) educational levels (Article 19) and has been made compulsory. Complete general (or secondary) education (Grades 10–11) has been made beyond the compulsory level. The term “general educational schools” will refer in this study to educational institutions of Levels I and II according to the International Standard Classification of Education (ISCED). 2 During 1950–1985 the university enrollments were controlled not to exceed 10–11 percent of the total higher education enrollments (Goskomstat, 1994, pp. 129, 134), and the expansion of the higher education sector in the 1950s-1960s largely occurred because of the increased access to technical and engineering education. 3 Thus, e.g., in 1994 about one fifth (22.6 percent) of all state HEIs were located in Moscow and St. Petersburg, and they enrolled more than one forth (25.7 percent) of the country’s total student population (Goskomstat, 1994, pp. 129, 524). 4 In 1996 there were 61 registered State Research Centers (Sosnov, 1996, p. 3), which enjoyed preferable funding from the federal government and tax exemptions. The status of a State Research Center (SRCs) was granted for two years given that the center met rigid criteria: to be successful in developing high technologies, to have unique equipment and cadre potential, to have proved its vitality under severe conditions of financial shortfalls. It was assumed that SRCs would stimulate emergence of science-intensive firms and companies paying their way via installation and maintenance of knowledge applications they produced. However, only a small number of SRCs (circa 10–15 percent) functioned in 1996 as they were conceived (Sosnov, 1996, p. 3).

15

CHAPTER 2 The Sources of Autonomy

THE TERM “AUTONOMY” is DERIVED FROM GREEK “AUTONOMOS” MEANING “self-ruling”, or “self-imposing rules or laws” (Greek “auto”—self- and “nomos”—law). We will use “autonomy”, “freedom”, “independence”, “discretion”, “regulation by one’s judgment”, “self-regulation”, “capacity to exercise choice”, and “self-government” somewhat interchangeably, while admitting their specific semantic differences and recognizing that no social entity may be completely free from the other entities in a social system. University autonomy may be defined as a university’s freedom from outside control to run its own affairs. What facilitates university autonomy, or for that matter autonomy of any subnational entity? Institutional reform in post-Soviet Russia has focused both on limiting the power of the central state and enhancing the vitality of sub-national actors, notably regional and municipal governments, organizations such as economic firms and universities, and individuals. The thrust of these reforms has been to identify and promote policies that strengthen autonomy from below. In this chapter we will review several theoretical and empirical studies, which provide insight on the sources of autonomy of subnational entities and of universities. SOURCES OF AUTONOMY OF SUBNATIONAL ENTITIES Center-periphery relations Edward Shils, a prominent American sociologist and thinker, insightfully elaborated the concept of center-periphery relationships for a variety of issues of societal development. This concept outlines the key dimensions of societal dynamics: what keeps the whole society together and what makes it fall apart, how change occurs and why similar policy innovations lead to different consequences in different

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societies. The concept is significant for the present study for several reasons, which will be reiterated alongside referencing major pertinent points of Shils’s theoretical construction. According to Shils (1975) every society may be interpreted as having a center and a periphery. The center consists of beliefs and values that govern the institutions of society—economic, governmental, political, cultural. The central belief system legitimizes authority vested in various societal institutions and the respective elites. It also defines membership in the society (pp. 3, 39). Though the center is not conceived as a spatially located phenomenon (p. 3), Shils states that territorially extensive societies tend to have a spatial center, which is or is thought to be the seat of the central institutions and the central value system: To this center or centers, much of the population looks for guidance, instruction, and commands concerning conduct, style and belief (p. 39). Shils further states that societies differ in terms of the intensity of relationships between center and periphery and the distance in power between them (p. 40–41). One type of intense and distant relationship between center and periphery is represented in the actual or seeming domination and saturation of the periphery by the center. Another type is where the relationship between center and periphery is distant, and the remote zones of the periphery are relatively autonomous from the center. Such societies are characterized by the minimum common culture and stand at the margin of Shils’s conception of society. The third type is where the distance between center and periphery is not so great and it is filled by a series of graded levels of authority. Finally, there are societies in which center and periphery do not stand apart. These are societies where the sense of proximity is manifested in situations of face-to-face contact or through representative institutions. In the light of this theory, Russia appears to be an extreme case of inherited-from-the-past center-periphery tensions. The Russian Federation is a vast country with multiple ethnic groups inhabiting it. Not only is the distance between the center and periphery great, but also the relationships are intense—the center aspires to dominate over the periphery—so that the society remains integrated from the center outward in a very unilateral fashion. This type of centerperiphery relationship inherited from the past is reflected nowadays in the asymmetrical federalism of the Russian Federation, which fosters many tense relationships between Moscow and the regions including policy issues in the higher educational domain.

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The important implications of the center-periphery hypothesis may be stated as follows. First of all, educational systems in the societies marked by intense relationships between center and periphery will probably bear the impress of the same kind of tensions. Second, institutions of higher education situated in close proximity to the societal center may enjoy access to more generous resources, to the creative possibilities characteristic of the center, and some other privileges. Third, at the same time, one would expect that in more territorially extensive societies the likelihood of an equally intense affirmation of central values and, therefore, of control, is less feasible (Shils, 1975, p. 10–11). Given the necessary preconditions the regional universities and colleges may, in fact, demonstrate high levels of innovation and of opportunities to implement these new ideas due to their remoteness from the center. These hypotheses will be examined later in this study. And finally, the thesis of center-periphery relations in the society not only has a significant explanatory power in considering issues of intended change or policy-making in cross-national settings, it also emphasizes the dependence of social phenomena on the broader societal context. Since the concept of institutional/university autonomy is multidimensional, possible interactions between organizational as well as larger societal factors are crucial for identifying and practicing autonomous decision-making. As a way of illustrating the last point in a policy context, Shils considers in one of his essays (Shils, 1975, pp. 456–482) the fortunes of constitutional government in the political development of the new states of Asia and Africa. He provides an intricate analysis of the interdependent influences of institutions and guiding beliefs in these societies, the postcolonial heritage, available human and financial resources, the tensions of the implementation process, such as incompatibility and remoteness of multiple goals of new states, and the aggravating effect of perceived and real failures. Many of these factors were counteractive to the intentions of new elites, who aspired to establish a new constitutional order. As a result, the dissension between the elites and the rest of the population was aggravated. Importantly, institutionalization of dissensus in the constitutional order and pluralistic liberties remained predominantly alienated from the more centrally rooted belief in the community-wide consensus in many new states. In such a confrontation “the central institutional system…fails to acquire some legitimacy and its capacity to exercise authority” (p. 39). Shils, however, did not consider the central zone of each society, comprised of beliefs that govern that society, as something fixed once and forever. He did not believe either in the total consensus of the

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society around the central value system, nor did he assume that the boundaries between central and peripheral values in societies would be permanent and non-fluctuating. However, Shils stresses the significance of central value systems in the stability/unity or change of societies. This overarching center-periphery perspective allows us to pose the following questions concerning policies toward greater institutional autonomy in higher education: • What values and beliefs in the university community are most conducive to the willingness to accept greater responsibility for autonomous decision-making? • What are the values, beliefs and commitments central to other institutions and collectivities in the university’s immediate environment that motivate concerted support in the locality to strengthen the autonomous university sector? • How does the proximity to the center influence the intensity of central control over university matters, access by universities and colleges to resources, capacity for innovations, and their implementation? The context of transformation from centralized planning to market The challenges facing the system of higher education and individual universities in Russia are both triggered and compounded by the efforts to transform the political-economic organization of the entire society. This is a transformation of a command-administrative system, based on unilateral centralized control, into a market-oriented system of societal organization. This transformation project may be referred to as a drive from “politics to market” after Charles Lindblom (1977), who examined alternative possibilities of social organization and warned against misconceptions of fundamental political-economic mechanisms. According to Lindblom, the three major types of social organization are through the authority of the government, through exchange and markets, and through persuasion (p. 4). He further reduced the alternatives of growth mechanisms required by the growth goals to proceed either through the market, or through the authority of central government (p. 6). The misconception about this fundamental choice, according to Lindblom, is worldwide. Experts of Russian politics (Goldman, 1996; Hewett & Winston, 1991) appear to agree with Lindblom, observing that the absence of a clear reform program and the choice to tinker with the old system instead led to the loss of momentum during the early perestroika period.

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The effort to transform the command system in Russia so far has not been a clear-cut policy. Moreover, it has not been a laboratory experiment in rational choice under controlled conditions but rather has been a reallife exploration with the costs of experiments being borne by the Russian people. The past of the nation cannot be discarded as it is both a burdensome legacy obstructing the reform, and a source of lessons to be learned by policy-makers. Critiques of Russian-style business and public administration point out that the old patronage networks continue to operate, that the skills of lobbying and negotiating dominate over the skills of economic choices, that centralization typical of Soviet politics has been reproduced in the localities, and that the striving for special treatment creates obstacles for rational development (e.g., Sakwa, 1993). A survey of the managing directors of Russia’s privatized enterprises, e.g., indicates that, though many managing directors have developed new cost-consciousness, others continue to be focused mainly on production, thus resembling a western factory manager rather than a CEO’s mastery of finance, marketing, and strategic planning (Burns, 1995). Most are traditionally committed to the provision of social services to their employees—both as a responsibility and a source of influence. It is probably reasonable to expect that the institutional organization of public higher education establishments will retain its older “political features” which hinder the rational calculations or economic choices now demanded for the market system to operate. The deficiencies built in bureaucratic hierarchies and in the market system respectively are especially critical in the “transition” situation. They may be summarized from Lindblom (pp. 65–89) as follows: 1. Rational decisions in bureaucracies are limited by: a. specialized decision-making which falls short of the needed information; b. complexities of evaluating alternatives; c. misrepresentation of reporting by low-level members to their superiors what their capacities are (assessment de/inflation); d. “clumsy market” of the developed informal controls, of trading and exchanging favors for future obligations. 2. Problems of economic choice in hierarchies arise because of: a. a lack of the common denominator for determining outputs, allocating inputs, weighing factors in rational economic decision;

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b. no incentives to choose rationally; c. an emphasis on coordination rather than stimulation of resourcefulness. 3 .The market system’s perfect Pareto no-loss-to-anyone optimum cannot be achieved because: a. decision-makers are never wholly competent as individuals; b. of uncounted costs and benefits (the so called externalities); c. of costly transactions; d. of monopoly restrictions; e. of the spill-over effect of public goods (such as certain kinds of education) and a free-rider mentality; 4. Further, deficiencies of the market system extend to: a. failure of market incentives since control through exchange is costly to implement (sometimes at prohibitive prices); b. high degree of risk involved; c. inappropriateness of individual preferences in view of collectively deliberated output targets; d. moral objections to dominance of individual preferences. These criticisms point to the far from rational conditions for the operation of markets and hence spillover effects and ambiguities, countereffects of hierarchies under market conditions, and a lack of the centrality of values typical of market economies. When applied to the postsocialist challenge of simultaneous transformation of politics and property, the absolute dichotomy of “hierarchy/market” led, according to David Stark and Laszlo Bruszt (1998), to the predominance of two very deterministic approaches. One is the involutionist’s theory of past dependencies that reduces the attempts at marketization to a self-parody because of the dead weight of the past legacies. The other is the imitationist’s blueprint of the predesigned future, characteristic of neoliberal economists, where the present is examined through the distorting lens of the predestined future. In contrast, Stark and Bruszt focus on what “the present holds for the future” and how “the past can provide resources for change in the present” and lead to innovation in their comparative study of distinct post-socialist pathways of the East Central European societies (1998, p. 7).

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Disaggregating the concept of decentralization Central-local relationships are the major focus in public administration theory and practice. The latter relates to the public provision of services including education. In all societies, governments are involved in the delivery of education—most governments are extensively engaged with basic education while there is a greater variation of governmental involvement at the level of tertiary or higher education. The division of responsibility between central and local governments in delivering public services varies from one country to another. Below are summarized two approaches to describe this phenomenon: 1) one-dimensional, offered by Dennis Rondinelli focusing on the developmental literature, where more administrative power of national government means less discretion of the local government and less participatory democracy and vice versa, 2) multidimensional, used by Edward Page (1991) in his comparative institutional analysis of seven European nations, which takes into account the varying degrees of integration between central government and local governments on two scales: legal-constitutional and political. From both perspectives the relationship between national and local governments do not appear uniform across various settings. Dennis Rondinelli is known for his efforts at disaggregating the concept of decentralization, drawing on the cross-national comparison of actual practice in the developing countries. Decentralization strategies are generally defined as dispersal of authority away from the central point. They are often characterized both as ends in themselves and as facilitators of socially equitable development. That is, decentralization is assumed to promote participatory democracy, on the one hand, and to improve implementation of development programs—through more efficient use of resources and improved quality of services rendered, on the other. Rondinelli (1981), however, insisted that the asserted benefits of decentralization are often more potential than actual results of particular decentralization efforts (p. 135–136). He developed the distinction between deconcentration, delegation, and devolution as forms of decentralization of governmental authority—each with different implications for “institutional arrangements, the degree of transfer of authority and power, local citizen participation, preconditions for successful implementation, and advantages or benefits for the political system” (p. 139). Rondinelli’s typology of governmental decentralization strategies is helpful to distinguish between managerial decentralization within the

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same branch of authority (in case of deconcentration and delegation) and administrative decentralization accompanied by legal and fiscal decentralization (in case of devolution of governmental authority to independent units of local governments). Thus, this typology helps to define a) the extent to which decentralization efforts go beyond or remain in the formal command of the central government, and, subsequently, b) the scope of institutional or professional autonomy to be allowed by governmental decentralization strategies. This perspective provides a useful point of reference for considering state-university relationships in the Russian context, where policies have been launched to overcome the centralized command system and to create and strengthen local self-governments. The issue of how the relationships between the national (federal) and subnational (regional) governments are defined in Russia has significant implications for university autonomy. In other words, how does the broader governmental decentralization process in the Russian Federation effect decentralization of higher education governance and the asserted autonomy of educational institutions? • How do the current legal and fiscal relationships between the federal (“the center”) and regional levels of government effect the legal and financial context necessary for exercising autonomy by educational institutions? • What are the status and actual functions of regional governments (if at all) vis-à-vis those of the central government in terms of higher education governance? • Are the responsibilities between central and regional educational governmental agencies clearly delineated and in which areas? • Do governmental policies translate into effective autonomy (and in what areas) for each institution of higher education? The major criticism of the conceptual approach summarized above addresses the placement of different forms of decentralization on a single-dimension continuum (Rondinelli, 1981, p. 139), in which less centralization means more participatory decision-making and vice versa. Instead, as Noel McGinn and Susan Street (1986) suggest, governments that launch decentralization policies should not be necessarily viewed as unitary and monolithic and individuals and groups as completely separated from the structure and process of governments. From this standpoint, “decentralization is sought not to increase participation for individuals in general but of certain individuals or groups” (p. 473). Therefore, decentralization can be

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better described not as the distribution of power but as the change of its locus: A policy of decentralization…is adopted as a strategy when a group in power sees the current set of structures or procedures of a central government as an obstacle to the realization of the group’s interests…. A policy of centralization is designed initially to give away only enough power to insure the achievement of the initial objective of the initiating group…. In the process, the actions of other groups pursuing their policies may create new circumstances that lead the blocked group to reconsider its policy (p. 475).…policies of centralization—decentralization are chosen not only on their technical merits but also as part of a strategy in which political effectiveness is the primary, although not exclusive, consideration (p. 476). This perspective highlights differing or conflicting vested interests that various social groups may promote under the rationales for decentralization or re-centralization. Even consensus for decentralization may be driven by different expectations. Thus, when the groups that promote institutional discretion and those that promote professional educators’ autonomy come into conflict, the expectations of broadly defined decentralization strategies may differ. Decentralization strategies differ as to the underlying motives of groups with vested interests as well as to the publicly manifested rationales these groups present for the justification of decentralization policies. Jon Lauglo (1995) proposed an analytical framework for differentiating between forms of decentralization in education according to the primacy of one of the three main goals pursued: a) a politically legitimate dispersal of authority, b) the quality of services rendered, or c) the efficient use of resources. Lauglo loosely groups decentralization rationales as concerned with either: a) political legitimization: liberalism, federalism, populist localism, participatory democracy, or with b) quality and efficiency: pedagogic professionalism, management by objectives, the market mechanism, deconcentration. This theoretical framework helps in distinguishing between the types of tensions associated with decentralization forms and their rationales as well as to outline their implications for the evaluation of educational institutions (pp. 10–22). Deconcentration in education, according to Lauglo, means more accountability of educational institutions to closer bureaucratic superiors, since deconcentrated authority remains state authority (p. 21–22). Therefore, deconcentration may impinge on the institutional and professional autonomy of educators.

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The theoretical approaches to the concept of decentralization discussed above are significant for guidance and for predicting possible tensions in the central-local relationships. However, they do not explain why certain decentralization efforts fail or succeed. Consequently, the literature on decentralization has a split focus on theoretical constructions and on the practical problems of implementing decentralization in a particular context. Factors that increase scope for local autonomy The above discussed studies are helpful in describing central-local relationships, but they tend to be vague when discussing why some subnational governments or individual units delivering public services (among them public universities) are autonomous and/or effective in provision of quality services and others are not. Rondinelli (1981, p. 143) pointed to certain potentially critical capacities that need to be cultivated in local governments: 1) favorable political and administrative conditions, 2) organizational conditions, 3) behavioral and psychological conditions, and 4) financial conditions. But he did not use this scheme to differentiate empirical cases. In contrast, other recent studies in such diverse locales as Western Europe (Leonardi, Nanetti, & Putnam, 1981; Page, 1991; Mallo & Nas, 1991; Putnam, 1993), the United States, and Indonesia (Cummings, 1992) have endeavored to compare the relative autonomy and effectiveness of local units. In doing so these studies have highlighted several major factors. Thus, in his earlier work Robert Putnam et al. (1981) focused on the politics of bargaining as the central part of intergovernmental relations, having recognized that other factors of regional autonomy, such as “laws, rules, and money”, serve as “resources in the endless, intricate bargaining that lies at the core of intergovernmental relations everywhere” (p. 97). According to Putnam, laws constitute the legal and constitutional framework for regional/local autonomy; rules comprise the administrative framework, such as administrative controls, delegated functions, personnel patterns; and money provides the financial resources for supporting regionally/locally determined policies (p. 97). In his later work, Putnam (1993) emphasized the role of civic traditions and of social capital in the successful performance of Italy’s regional governments. From the above referenced literature the key factors, conducive to autonomy of subnational/local units, are summarized as follows: Rationale for Legitimacy and Values Integration. For a local unit to enjoy some degree of autonomy, there needs to be a theory or argument in support of autonomy. Without such an argument it is

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difficult to defend the claim for autonomy or to seek the necessary resources and privileges. Some local units inherit their claim from history and there is a variety of ways to draw the historical line that would highlight independence, unique heritage and language, and so on. Some schools and universities also have similar historical claims such as an ancient charter and legacy. Other local units have to invent this theory from the present: we can do a better job if we are granted greater autonomy, autonomy will enable us to become responsive to local needs and global opportunities. Universities can point to the widely held belief that university autonomy coupled with academic freedom leads to greater scholarly productivity and creativity. Whether the rationale is inherited or invented, it is a sine qua non for enhancing local autonomy. The Constitutional/Legal Framework. Most national constitutions make some reference to the functions of different levels of government and different actors in the national polity including citizens. In central states these assertions may be biased toward centralism while in federal states they may be biased toward localism. Regardless of the specifics of these assertions they are subject to interpretation. An impartial strategy in the enhancement of local autonomy is to positively shape these interpretations. An example in the Russian context is the detailed statements in the Federal Law on Education (1992) about the obligation of the state to provide a specific fixed share of GNP for education (Art. 40, Item 2). Later the 1996 amended Federal Law on Education (Art. 40, Item 2) and the 1996 Federal Law on Higher and Postgraduate Professional Education (Art. 2, Item 3) specified a minimal share of three percent of the federal budget for the higher education sector. While the national government did not meet its legal obligation for education in general, it also failed to meet its obligation for higher education. Compared to the constitutional obligation of three percent of the national budget for higher education, the average annual allocation from 1992 to 1997 was only two percent. Observers rightly criticized legalizing the unfeasible state commitments as they eroded the legitimacy of the Constitution. Yet a convenient re-interpretation might assert that the intent of the law was to have the national government work with other units (local governments and individual higher educational institutions) in meeting this obligation. Such a legal interpretation strengthens the argument for autonomous universities to do whatever is required to realize the program goals—so long as these goals are not perceived as violating the principles of the Constitution. Other examples will be considered later in this study. Political Linkages and Leadership for Mobilization of Resources. Any action to strengthen local autonomy requires a favorable political

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strategy. Edward Page (1991) points out that local areas, which have able “local” politicians, fare best. A definition of a local politician is one who seeks whenever possible to advance the interests of the locality. Page suggests it is useful to have such local politicians in key positions both at the national and at the local level. Those at the local level are in a position to directly advocate for the locality and those at the national level are in a position to facilitate. A large university such as Moscow State benefits from the large number of its alumni who occupy key positions in the central government and the national parliament. In contrast, a regional area or university, which has few advocates in key places, may not fare as well. Local universities that appoint rectors who were trained and experienced much of their career in some distant place may find that those rectors are not vigorous in fighting for local priorities, but rather seek to please their “central” friends. Managerial Capacity. Closely linked to political connections is the managerial orientation and acumen of those who staff local units. They may be so used to “implementing” central directives and so incapable of learning new ways that they are unable to enact more autonomous practices. But there are many instances where localities are staffed by thoughtful officials who have many ideas about better ways to do things, and if given a chance, they will demonstrate this aptitude. A rough indicator of the quality of local managerial resources is their level of educational preparation: how many have higher degrees, how many are trained in finance, local administration, management, and other related fields? Recent reports indicate that the average educational level of Russian officials is quite high, but relatively few have training in the fields conducive to locally oriented management. Financial Resources. The final factor critical for local autonomy is access to discretionary funds. In centralized systems most funds expended at the local level are earmarked in central line-item budgets; the local government lacks that capacity to respond to local circumstances. In contrast, when local governments are provided block grants from the center and/or are allowed to collect their own revenues, they are in a better position to conceive and carry out local initiatives. In the Russian context, as already discussed above, there is currently much uncertainty about the appropriateness of local units collecting and disbursing funds. Even so, some local governments as well as some universities have taken some impressive steps to enhance their financial authority, and this trend seems inevitable. Perhaps an extreme case of financial autonomy in higher education is Harvard University, which enjoys an endowment of $18.3 billion (The

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Chronicle of Higher Education, October 19, 2001, p. A25), greater than the annual national income of many developing nations. SOURCES OF AUTONOMY OF UNIVERSITIES Financial capacity Progress toward autonomy of local governments or of individual units delivering public services, including public institutions of higher education, depends on many factors. As follows from the theories reviewed above, autonomy must be a) justified in publicly articulated rationales, b) outlined by legal provisions, and c) supported, depending on the nature of national politics, by the local political elites or by the national politicians in decisions which affect localities. These fundamental conditions, conducive to implementation of governmental decentralization and/or allowing greater local autonomy, are viewed in the literature as supplemented by factors generally labeled as “organizational” or “resource-related”. The resource condition implies availability both of human resources in their managerial capacity and of financial resources. However, the significance of financial capacity for autonomous units, organizations, and levels of authority can be hardly overestimated and deserves to be treated as a separate factor. In order to exercise powers devolved to lower levels of authority or individual units, that is, to allow them to plan and administer service delivery as they see fit, financial resources must be available to local governments or the individual institutions delivering these services. Legal provisions for the financial autonomy of institutions of higher education are usually accompanied by the simultaneously devolved functions of financial management. These functions apply to the management of both sides of the balance sheet: revenue side and expenditure side. The legal provisions may specify eligibility of HEIs for public funds —whether from national or subnational sources. If these sources cannot provide the necessary resources for public HEIs, other sources should be in principle available and not associated with a tax penalty or other prohibitive restrictions (revenue autonomy). Yet, the source of funds and availability of plentiful resources is a necessary, but not a sufficient condition for financial autonomy of universities and colleges. Institutional discretion over allocation and reallocation of resources, or decision-making authority over how, when and where the money should be spent (expenditure autonomy), is required. According to Clark Kerr (1990), autonomy of HEIs is a

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function not so much of “who funds as how they distribute their funds” (p. 3); that is, not so much a source of financing as a mechanism of financing, as well as institutional discretion to re-deploy resources. Therefore, most revenue in public HEIs with expenditure autonomy do not come from public appropriations treated as earmarked, restricted, or non-re-allocable. Inversely, financial diversification may be an important measure to promote institutional autonomy in various areas. Thus, Adrian Ziderman and Douglas Albrecht (1995) using the data from twenty-six higher education systems showed that lower financial dependence on governmental appropriations correlated with lower governmental control over institutional enrollments and internal allocation of resources, though the converse is noted to be less true (p. 30–31). Moreover, Ziderman and Albrecht (1995) distinguished between three models of financing HEIs by the source of funding: cost recovery, revenue diversification, and state dominant. All three models have their advantages and drawbacks, and some combination of them are used by most nations. These three general models of higher education financing are considered separately below to illustrate that to promote institutional financial autonomy these models require different administrative rules and laws. In general, when institutions diversify their revenues,—whether through competitive research and consulting grants from industries and private foundations; short-cycle and tailor-made training programs; gifts, endowments, and return on them; revenues from land, underutilized physical plant, and auxiliary enterprises such as housing, bookstores and food services,—or when institutions of higher education recover costs of their more traditional services (through tuition fees for instruction and training), the ability to raise revenues from other than governmental sources should be accompanied by legally articulated incentives to retain and increase these without the penalizing reduction of governmental allocations. Tax benefits for both HEIs and private donors might be provided. Within institutions of higher education a reward system for raising additional revenue might be established for individuals as well as for units. Revenues through both diversification and cost recovery imply considerable institutional autonomy in higher education. At the same time, governmental appropriations to HEIs may be also conducive to institutional expenditure autonomy—only in the case of “flexible funding environment” to use Ziderman and Albrecht’s words, or in the case of “public funds treated as private” to use Kerr concept. Both terms imply that governments refrain from directly regulating internal institutional allocation, but rather deploy such mechanisms of financing that leave sufficient discretion to HEIs and, at the same

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Table 2.1. Implications of Public Funding Environments for Institutional Financial Discretion

time, provide incentives for the accountable spending of public moneys. Based on the referenced literature, the features of the funding environment under restrictive and direct governmental control are summarized below in table 2.1 as contrasted to incentive-providing and non-interventionist governmental funding of higher education institutions. Thus, a funding environment that allows considerable institutional discretion in the allocation and use of public funds also ensures accountability over public spending not through direct bureaucratic regulations but rather indirectly, through the funding mechanism itself. On the expenditure side, financial autonomy of institutions enables them to do cost analysis and contain internal costs through decisions on, for example, 1. labor cost containment (such as student/faculty ratios and faculty/ support staff ratios); 2. administrative cost containment through economies of scale (unit mergers); 3. maintenance and utilities cost containment through energy-saving technologies and control; 4. focus on investment with high and quick returns, such as shortterm courses, modular programs, shorter-term degrees, and so on. At this point it should be warned that securing university financial sustainability on both revenue and expenditure sides is important in the context of larger priorities and goals of a university such as: improving quality of education and research, relevance to the market economy and open democratic society, expanding access and promoting equity in educational opportunities, sustaining the quality of academic life that is conducive to knowledge generation and dissemination, or other goals and priorities.

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When more immediate goals of garnering greater resources substitute for the broader goals, the decisions appear shortsighted, catering only to the revenue-bringing customers, undermining the quality of academic life, and tend to be selective or elitist-driven without recognizing the responsibility for equity. Austerity-driven financial strategies of universities Economic stringency, or austerity, has become a widely referred condition in the higher education vocabulary worldwide. D.Bruce Johnstone (1996) identified the underlying economic reason for this challenge as a result of an increasing divergence of higher education cost and revenue trajectories. They are triggered by the naturally increasing institutional unit costs (because of high labor intensity of higher education, self-imposed incentives for enhancement, expansion of population and participation, and accretion of degrees), expansion of knowledge, pressures of various demands of societies on the part of post-compulsory education, and the political climate that favors market solutions and the private sector. The basic sources of revenue in higher education are presented as a cost-sharing model (Johnstone, 1986, 1987, 1991), where shortfalls of revenues from one source must be compensated or shared by an increase from another/others: 1. the general taxpayer, or public government budgets, 2. parents, 3. students, 4. philanthropists or donors, 5. purchasers of university goods and services, via research grants, training fees, facility rental, or the purchase of medical or other clinical services. Thereby, a business share viewed as voluntary and borne by the owners is philanthropic, if involuntary and born by the general consumer then it fits the taxpayer’s category (in the form of a sales or a consumption tax) (1987, p. 30). However, a decision to increase the burden of the parties concerned faces a lot of constraints. Of critical importance, therefore, is to agree upon the adequate financial strategies to improve the cost/expenditure side and to augment the revenue side of higher education in conventional and nonconventional ways. General financial strategies may vary and not be optimal for any national context, as countries start from different institutional and financial settings. As Jean-Claude Eicher and Thierry Chevaillier observed (1992), experiments with funding strategies showed a clear

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tendency away from extreme solutions but in the direction of mixed financing from different sources both in public and private HEIs. As for Russian universities, they probably did not tap some potential resources of revenue and did not cut on certain slack practices that inflate their unit costs. It may be argued that cost-consciousness is both a mentality and an administrative skill, which was not encouraged in the command expenditure-driven economy. It follows from the literature that for the universities to develop and implement adequate financial strategies, greater institutional autonomy is required. And it is assumed, inversely, that adequate financial strategies will enhance the autonomy of HEIs. These are the propositions that will be tested through an examination of selected public universities in Russia. D.Bruce Johnstone (1992), addressing the problems of Hungarian higher education in the transitional context, pointed out that the primary issue should be cost containment. He further specified cost containment strategies on the assumption of institutional autonomy of internal reallocation of resources as follows: • institutional ability to find the better uses of resources and to move resources accordingly; • institutional ability to reveal and pursue its priorities by apportioning costs to research, teaching, and service; • institutional ability to distinguish unit costs by academic/training program, field of research; and • institutional ability to address efficiency issues implementing such strategies as short-cycle course models, two-year degrees, modular studies, an academic credit system. The more conventional strategies for cost-containment, that is, the ones that target improvement of university management, are not, as Johnstone (1996) rightly emphasized, without cost. Such a strategy would require investments into services of obtaining grants, marketing and delivering training courses. It would require incentive rewards for faculty and staff according to their performance. Interestingly, only growing institutions would afford strategies of enhancing revenues from a variety of sources, because these revenue sources require a lot of investment to be launched in the first place and, therefore, such strategies do not necessari ly contain institutional cost inflation. Institutional status and position in the higher education stratification system would become highly significant: What was the initial potential of a HEI? How would it influence the current status? How would middle-tier institutions of higher education fare? And what would the environmental factors,

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which might enhance university potential and autonomy, be? These are the questions to be addressed in the course of the proposed study. And, finally, does university autonomy make a difference? The techniques of performance indicators, and quality control are targeted to “measure” this impact. These techniques assume the input-output model of the university; they are tied to measurable indicators, which are also assumed to be indicative of quality. The locus of university autonomy along the stateuniversity relationship continuum Since the emergence of nation-states on the socio-political worldmap, states have come to influence education at various levels. As the degree of state engagement in and/or surveillance over university matters has differed across nations and times, the analysis of university autonomy should devote due attention to the stateuniversity relationship. Eric Ashby (1966) was one of the first scholars to emphasize that institutional autonomy and academic freedom should not be equated, a perception very often taken for granted. He strongly asserted that academic freedom is a privilege accorded to university teachers to enable them to do their job (Lerhfreiheit); therefore it cannot vary with latitude, race, politics, or creed (p. 321). By contrast university autonomy does not always and everywhere assume the same pattern. Instead every nation must seek agreement between the state and the university to safeguard the autonomy of universities, and in each nation this agreement is likely to be different. Ashby shows that an attempt to transport a two-tier structure of university governance (where power is allocated between the lay board and the university senate) from Britain to several African universities was based on the assumption that the conventions (of autonomous self-government) would be exported with the structural pattern, which was not the case especially since African countries became independent. Analyzing African universities case by case Ashby showed that the two-tier structure of university governance autonomy was betrayed from inside, that is, academic decisions were delegated to non-academics, who were in fact a majority either on the lay board or the senate (p. 306–335). Ashby’s significant insight is, firstly, in articulating the particular conditions (ingredients) that safeguard university autonomy (p. 296), and, sec ondly, in viewing these conditions within a certain pattern of power relationships between the university and the government. John Millett (1984) provided a comprehensive analysis on the distribution of authority between the state governments and

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individual campuses in the U.S. Millett closely scrutinized the idealized pattern for the relation between public control and institutional independence according to four areas: (1) governance, (2) financial and business affairs, (3) academic and intellectual affairs, and (4) academic innovation,—which were identified by the Carnegie Commission on Higher Education in 1973. Millett found that in only a few exceptions did the idealized pattern approximate the realities of practices in the individual states (pp. 215–234). Thus, in a sample of 25 states, almost everywhere it was the governors who appointed the trustees or regents of universities. One exception was found in the state of Minnesota. The study further found almost no evidence of accountability (in terms of performance assessment) being sought by state government officials. The control was essentially exercised through the budget process of state governments and tended to reflect economic and fiscal circumstances rather than cost-benefit analyses. The campus autonomy in financial and personnel management turned out to be severely limited (the most stringent restrictions were found in New York State). Moreover, governing boards did not necessarily have efficiency controls, which were instead mandated by the state executive departments, including the state auditor. On the whole, this study showed that the reconciliation of public control with institutional autonomy is not a simple problem. Possibly, this frustration over many practices falling short of the ideal has prompted Robert Berdahl (1990) to differentiate between substantive and procedural autonomy. Substantive autonomy is related to the power of the institution to determine its goal and programs (not to be substituted by the individual scholar’s ability to pursue teaching and research), while procedural autonomy has to do with determining the means by which these goals and programs will be pursued. In his policy paper about planning for a regional higher education system in the Chelyabinsk region of the Russian Federation, D.Bruce Johnstone (1993, September) illustrated how the power allocation pattern would differ in order to safeguard certain autonomies of HEIs depending on the aims and assumptions about the future of Russian higher education, the nature of regional government generally, and the specific goals held for the region and for its existing HEIs. So, this complexity of the university-government relationship can be seen both within and across systems of higher education.

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University autonomy from organizational and sociological perspectives Talcott Parsons (1964) suggests that all modern organizations seek autonomy. Possibly the need is greatest in universities as the time horizon for production is lengthy and uncertainty is high. So, universities, in his words, devote more resources for pattern maintenance—in the form of building up endowments or securing trusteeship in order to protect their long-term institutional missions. Among organizational theorists, James Thompson (1967) was among the first to formalize Talcott Parsons’ insights, advancing a number of pertinent propositions: under norms of rationality, organizations seek to seal off their core technologies from environmental influences (p. 19); under norms of rationality, organizations seek to buffer environmental influence by surrounding their technical cores with input and output components (p. 20); under norms of rationality, organizations seek to minimize the power of task-environment elements over them by maintaining alternatives (p. 32). Thompson and others used these propositions to compare the organization of universities with other organizations such as the military, sales offices, factories and so on within the U.S. context. But as Burton Clark (1983) observes, there are major national variations in the social context for organizations including the way universities are connected to society and polity. While Clark makes this important observation, his comparative discussion is more descriptive than theoretical. For example, he identifies three distinctive modes of coordination at the national level: oligarchy, state control, and market. Within this coordinative framework, he says, there are four modes of governance: professional guilds, bureaucratic regulations, political decisions, and market mechanisms. Clark seems to suggest that the market approach may, over the long run, be most conducive to the health and dynamism of HEIs. While Clark has many thoughtful observations on the operations of individual universities, he regrettably does not devote detailed attention to the correlates of university autonomy. At the risk of oversimplification, Clark seems to suggest that autonomy will be greatest where people believe in autonomy (pp. 99 ff.). However, he does not explain the conditions that enable universities to cultivate such beliefs. Issues of university/institutional autonomy may be located along the continuum of government-university relations. These issues surface and go to the foreground when public resources become scarce or insufficient. The underlying reasons for this condition of austerity may vary across national settings. They may be induced by a) intended higher education expansion, b) A public choice to require

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more accountability from higher education (e.g., U.S.) for the allocated resources, c) A dramatic decrease of the economy (e.g., Russia, and former Eastern bloc), d) competing spending priorities (e.g., meeting the targets of EU, Germany’s unification, neo-liberal policies of the U.K. and Australia). Recently the literature on the changing relationship between governments and institutions of higher education worldwide has proliferated (e.g., Maassen & van Vught, 1989; Neave & van Vught, 1994; Teichler, Winkler, & Kreitz, 1994; Kells, 1994; van Vught, 1994; the World Bank, 1994). It addresses the challenge universities worldwide face with the ever-increasing cost of higher education and the absence of once generous resources to offset the costs. Rarely, however, are the constituent ingredients that make up an autonomous university identified, except for some recommendations and description of certain successful practices. Drawing on this literature we differentiate between two sets of university freedoms: 1. Autonomous universities as social organizations with specific functions (traditionally those of research, teaching and service) and culture have: a. freedom to elect university leader; b. freedom to chose and establish the model of internal governance; c. freedom to articulate and pursue a research agenda; d. autonomy to establish admittance/graduation standards for students; e. freedom to design and deliver curriculum in organized studies (e.g., programs, courses, centers); f. freedom to hire, promote and fire their faculty and staff; g. autonomy to choose/negotiate certain demands that society expects universities to meet. 2. Ideal independent/autonomous universities enterprises driven by cost-consciousness have:

as

economic

a. the right to have assets and to dispose of them, including reallocation of resources (both from public and private sources) as each university sees fit in cost-conscious mindedness (in line with their views of appropriate costs); b. discretion in generating and using additional resources from sources other than government, as well as contracting out some services;

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c. freedom to establish levels of compensation and benefits for faculty and staff. This ideal model may be far from being both feasible and reasonable. There is a widely accepted understanding that, firstly, there is no single social institution that would be completely independent from society; and, secondly, in many respects unrestrained freedom infringes on the principles of academic freedom, enhances social inequality, and may even appear inef ficient (e.g., duplicated programs are costly). Guidance by exclusively individual preferences may run counter to fundamental societal needs. Thus, the idea of autonomy within reasonably defined constraints emerges. Relevance of Institutional Autonomy Increased autonomy, decentralization, and deregulation in organizations and governments are generally argued to reduce operational costs, associated with over-regulation from the distant center, and to promote good management—such as management flexibility and timely responsiveness to the changing local needs and demands of service users. This leads to a claim that autonomy is correlated with unit-based innovation and increased productivity as contrasted to centralized restrictive over-regulation. Social scientists argue that decentralization typically promotes popular participation and, thus, strengthens democracy (see a detail discussion of this in chapter 3). However, the evidence to support these statements is often ambiguous. Relevance of autonomy of HEIs and organizations in general may be described by organizational theories that emphasize the role of environments in organizational performance, such as contingency theory (Lawrence & Lorsch, 1967), the theory of organizational ecology (Hannan & Freeman, 1977, 1984, 1986a, 1986b), and the resource dependence model (Pfeffer & Salancik, 1978). These theories develop on the basis of systems theories and the functional-structural approach in sociology. According to these theories, governmentuniversity relations and the extent to which universities are run without external regulation present an important part of the external environment within which universities pursue their goals. Contingency theory stresses the importance of the fit between the institutional goals and tasks, on the one hand, and the external environment and internal parameters of institutional structure, management processes and strategies, on the other hand (cf. contingency analysis as applied to educational planning and development in Rondinelli, Middleton, & Verspoor, 1990). The extent

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to which this fit is defined by an agency external to universities, leaves universities with nothing more to do than to execute the imposed regulations and directives. The effectiveness of such decisionmaking is much doubted in systems that are fairly large and complex and that operate in the increasingly specialized and fragmented (localized) environments of economic and social demands. Contingency theory maintains that effective organizations adjust their structure and management processes to respond to the level of task innovation and environmental uncertainty, because these structures and processes will differ in stable environments requiring routine task performance from less stable environ ments requiring innovative task performance (Lawrence & Lorsch, 1969; Mintzburg, 1980). A resource dependence model highlights the dependence of universities on outside resources and focuses on universities’ interaction with their external environment to obtain and control those resources in order to “modify their environments for their interests of survival, growth, and certainty” (Pfeffer & Salancik, 1978, p. 222). This model does not reduce the role of organizations to environmental adaptation but stresses organizational impact on shaping its own environment. Therefore, the management capacity of individual universities in identifying external demands on universities and in developing strategies to mitigate external constraints is critical. At the same time, mainly because organizations tend to influence, manipulate, and create their environments over time, some constraints may need to be imposed by governments. As discussed before, the autonomous status for HEIs is a legally constrained concept rather than freedom from all constraints. This model defines organizational effectiveness from the external environmental perspective as its capacity to manage external demands, upon which the organization depends for resources and support (pp. 2, 11, 32–36). The theory of population ecology of organizations focuses on the inertial constraints for organizations to change their structures in response to environments. Change in organizational structures is modeled on a selection principle (Hannan & Freeman, 1977) in addition to an adaptive or best-fit principle. Selection tends to favor more reliable and accountable organizations from a class/population of similar organizations. Therefore, selection tends to favor organizations with high inertia, which is higher for the core organizational properties than for peripheral ones, which increases with age and which is presumed to be more characteristic of larger organizations than smaller ones (or that “small organizations are more likely than large ones to attempt change, but also more likely to die in the process” (Hannan & Freeman, 1984, p. 163). In order to

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maintain resistance to disruptive environmental contingencies and to increase their capacity to deal with variable environments, organizations may develop excess capacities (Hannan, & Freeman, 1977, p. 948 ff.) and insulate or buffer their cores (Thompson, 1967, p. 19, 20, 32), thus maintaining a certain degree of autonomy from their environments. Outside agencies often judge this excess capacity as waste (Hannan & Freeman, 1977, p. 949). In line with the argument of these theories (especially provided in Hannan & Freeman, 1977), if autonomous universities are better prepared to adapt to the changing environments (acting innovatively in dynamic environments or maintaining the necessary routine tasks in stable environments), then the imposition of certain outside regulations by the state may be in fact counter-productive to innovativeness and diversity of university forms (diversity of forms being the product of innovativeness) and, ultimately, erode institutional autonomy of universities. If such constraints, imposed by the state, replace lower level constraints, they tend to become uniform for the total university sector forcing similarity of organizational forms and responses by elimination of outcompeted ones. So, the diversity of university forms and responses tend to decline. If the imposed constraints cumulate with the existing ones, then organizational diversity would be likely to increase. The decreased diversity would signal a decreased level of autonomous choices of institutions about their strategies and processes. This perspective underlines the relevance of institutional autonomy for universities in achieving their goals. It also provides an explanation for the current conundrum of university-government relations of, according to Guy Neave, “the strangely schizophrenic marriage between the centralizing tendencies in contemporary British higher education and the government rhetoric of greater autonomy” (Meek, Goedegebuure, Kivinen, & Rinne, 1996, p. 208). According to Neave, institutions of higher education act in line with the “law of anticipated results”, that is, they take actions in anticipation of what public policy is going to require, so that it is difficult to say whether undertaken changes are imposed externally on universities or they are institutionally-driven (p. 208). The autonomous status of institutions appears to be eroded in the midst of the policies toward “steering from a distance” by the state and self-regulation that embraced European higher education in the past decade. Indeed, the analysis of the phenomenon of institutional self-regulation by Herb Kells (1992) shows that this policy not only changes the balance of power in the governance structure for higher education systems, but it also tends to dilute the loci of power. Developing the models of higher education system governance

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articulated by Burton Clark (1983), Kells in effect shows that selfregulation dilutes the traditional bi-polar loci of authority in the traditional European model of systems’ governance, that is, the government on the one end, chairs and disciplines on the other end. Instead, self-regulation equally distributes this authority between both in addition to buffer organizations, as well as institutional crossfaculty structures, and cross-university agencies in between (Kells, 1992, pp. 27–35). Though, probably, the primary message of Kells’ study was not intended to indicate university autonomy erosion, but with the hindsight of the developments of past decade this conclusion stands out. Studies that subject to empirical testing the argument that universities with greater autonomy are the strongest and most successful are rare. A recent analysis by Burton Clark (1998), based on intensive case studies, serves as an excellent example of the research on university-environment relations in the 1980s to late 1990s’ Europe. Clark focused on five European universities, which use their autonomous status to actively and innovatively respond to the increasing demands from their environments and to mitigate the adverse environmental constraints. Clark referred to these universities that embrace self-transformation as “entrepreneurial” rather than innovative—in part to emphasize that they are bottom-up driven, that they mobilize local effort, and that they embrace the risks of change over the risks of maintaining traditional forms and practices (pp. xiv, 4). Based on the case studies, Clark identifies and further refines parameters of the institutional pathways to transformation as represented by the five university success stories. These parameters largely coincide with the broad factors identified in this study as conducive to university autonomy. However, drawn from the case studies, Clark’s parameters outline particular practices that led to institutional success. In his book Clark (1998) systematically examined several European universities that proved to use their institutional autonomy in order to transform themselves innovatively. Institutional autonomy was, thus, related to greater institutional innovativeness in response to educational demands and financial pressures, and hence presumably to the quality of instruction. Also autonomy through providing greater freedom to faculty is believed to result in greater academic productivity and creativity. A comprehensive empirical study involving major public research universities in 49 states in the U.S. was conducted by J.Fredericks Volkwein in the mid–1980s (1986, 1986a, 1989). Volkwein (1986a) examined first the relationship between the state financial control and campus administrative costs and found little evidence that freedom

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from the burden of state regulation led to reduction in administrative expenses at individual campuses. At the same time his study asserted no evidence that state centralized control practices saved public funds or forced universities to behave more efficiently (p. 283). On the revenue side, universities with more autonomy from state control were found to be less dependent upon state appropriations, while those campuses under heavy fiscal and personnel state regulations tended to be less likely to develop alternative sources of revenue, or to do so less effectively than deregulated campuses (p. 283). In his subsequent studies Volkwein (1986) focused on the connection (if any) of a greater degree of campus autonomy of public research universities and several measures of quality and success such as faculty reputation, student selectivity, and external funding success (both via governmental grants and privately raised endowments and gifts). Volkwein (1986) concluded there was no significant or unique contribution of greater autonomy to these measures except for raising funding from non-state sources. Instead, the selected measures of quality were claimed to be overwhelmingly effected by the institutional size and the amount of state appropriations. According to Volkwein’s study (1989), private giving per student in public universities with higher levels of state funding was claimed to be positively associated with the discretional management of academic programs (and faculty reputation was negatively related to discretion in financial decisions), while similar autonomy benefits were not found significant for universities with a lower level of state funding (pp. 145–149). This finding was interpreted by Volkwein as congruent with the resource dependence hypothesis, that is, “if universities compete successfully in the organizational environment for one type of resource, such as state appropriations, they probably compete successfully for other types of resources as well” (p. 149). At the same time the practices of heavier state regulatory controls were suggested to be driven more by political considerations than by the considerations of efficiency of public spending (p. 149). Thus, the efforts to empirically (using both quantitative and qualitative methods of inquiry) explore the impact of greater autonomy on the institutional performance are still rare. At the same time such studies do highlight the relation between institutional autonomy, on the one hand, and efficiency and quality measures, on the other hand, though they do not provide definitive answers. Literature on higher education also warns about some adverse effects presumably related to greater institutional autonomy and deregulation from the state. Thus, efficiency may be jeopardized if several autonomous institutions develop overlapping or duplicate programs that lead to social inefficiency. Universities may be

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attentive only to those societal needs that yield a profit. Faculty may work longer hours and face higher levels of supervision and greater arbitrariness of decision-making by leaders who are responsible to no one. Especially the literature on higher education finance (Williams, 1992), on political economy (Smyth, 1995; Slaughter & Leslie, 1997; Slaughter, 1998; Marginson, 1993) and critical sociology (Newson & Buchbinder, 1988; Polster & Newson, 1998) emphasize the undergoing changes in the nature of academic work in the U.K., U.S., Canada, and Australia under increasingly similar pressures toward marketlike behavior in education and under the converging spirit of national educational policies as “less part of social policy but increasingly viewed as a subsector of economic policy” (Neave, 1988, p. 274). These converging pressures, however, do not stipulate similarity in pathways and responses to them. The changes in the academic environment that produce most concern relate to the apparent shift toward revenue-driven research, the expectation that research should produce quantifiable results, the shift to activities that are considered most productive in managerial terms, divisions within the professoriate based on “specialization” resulting in increasing teaching loads for many as contrasted to a minority relieved of this load to do research—to name a few (see, e.g., Polster & Newson, 1998, p. 176). While these negative possibilities will not be the focus of specific research questions, the research methods employed are devised in such a way as to consider these negative concerns; and to the extent they are salient, they will be discussed alongside the presentation of positive findings. The purpose of the research to follow is to further explore the connection between greater university autonomy and its impact on institutional performance and excellence. CONCLUSION Earlier, several factors were identified as underlying the analysis in this study. Table 2.2 suggests how these factors are related to the theories just reviewed. The issues of university-government relationships and the relation between institutional performance and the extent of institutional discretion, unconstrained by the state regulations, remain central in contemporary higher education systems worldwide. In the U.S., Western Europe, Australia, and recently in Japan these issues have been brought under scrutiny under the increased pressures for accountability of public money spending and within a neo-liberal discourse of competition and markets. This is exemplified in the much discussed policy devices of self-regulation and quality assurance, of

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Table 2.2. Comparison of Frameworks that Model Relevance of Autonomy of Universities to Their Goal-Attainment

steering from a distance, of institutional ranking and performance indicators, and of relaxing state control commensurate with reduced state subsidies. The policy toward higher education institutional autonomy as a plausible solution to the many financial pressures and public demands embraced diverse countries of Africa, Asia, Latin America. The impact of dramatic socio-economic changes from “plan to market” and greater democracy provided the specific background for a shift toward greater university autonomy in Russia and Central and Eastern Europe. Therefore, the present study focuses, first of all, on the shift in the state-university relationship in the Russian context shortly before Russia became independent in 1991 and during the post-independence decade of fundamental socio-economic and political changes. This study aims to register changes in Russia’s official policy concerning the state-university relationship and institutional autonomy, to analyze implications of these changes for individual public university’s responses, and to frame the institutional response from the perspective of major actors in higher education at the time of dramatic societal transformation. Secondly, the shift in the Russian polity toward decentralization of government and increasing autonomy for the regions is identified as a major national-level factor that affects university-level efforts in taking full advantage of the recently granted autonomous status.

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Thirdly, institutional policies are assessed vis-à-vis the incentives of national policies, as well as opportunities and constraints presented by the dynamics of the higher education sector toward elimination of sectoral divides through integration and competition at the horizontal (regional) level. The focus and the goal of the present research is addressed by exploring the following research questions in the Russian context: 1. What is the nature of regional and university autonomy? The theoretical basis for this question was taken up in this chapter. Chapters 3 and 4 will discuss implications of the recent shift in authority loci in the areas most critical for Russian regions and Russian higher educational institutions. 2. What are the factors favoring regional autonomy and which regions are most autonomous? The theoretical basis for this question was discussed in chapter 2. Chapter 3 will examine the role of such factors and their particular mix in promoting or restricting realization of the self-governing/ autonomous status in the Russian regions. Special consideration will be given to the relative degree of financial austerity, which was highlighted in chapter 2. 3. What are the factors favoring university autonomy, and which universities are most autonomous? Among these factors, is autonomy of a region where a university is located an important factor? The theoretical basis for this question was taken up in chapter 2; the findings will be discussed in chapter 4. 4. Among universities that are most autonomous, can it be said that a. their operations are more efficient and they undertake more selffinanced activities; and b. their programs are of higher quality (they are more relevant, they include proportionately more highly qualified and innovative faculty, they attract a more competitive student body)? The theoretical basis for this question was taken up in chapter 2; the findings will be discussed in chapters 5–7. The results of the study will be summarized and discussed in chapter 8. Because the research focus was on the change in higher education and its implications for policies at the unit-, university-, and sectorlevels at the times of dynamic and often unstable societal transformation, the study required detailed tracking of events and responses and it was often overwhelming but never short of fascination. Reviewing the current research on the post-communist countries one may come across a metaphor of “rebuilding the ship at sea” (e.g., Elster, Offe, & Preuss, 1998) to appreciate the plenitude of factors of influence on any particular or overarching subject of study

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in these societies. Yet, the present research benefited from developing and constantly refining the six guiding dimensions of the change: rationale, legal/constitutional, political, leadership, managerial, and financial. The framework of these factors as applied at different levels and units of analysis (universities, regions) is viewed to contribute to the integrity of this study.

PART II Regional and University Response

CHAPTER 3 Decentralization and Regional Autonomy

THE MAIN ISSUE, TO BE CONSIDERED BOTH IN THIS AND THE NEXT chapter, is how higher education institutions in Russia should relate to the newly powerful regional/local governments. Should they ignore them and depend on Moscow, should they become subordinate to and dependent on the local government or what? For example, the new local governments were assigned responsibility for funding general schooling whereas the responsibility for higher education was ambiguous. Do the regional or local governments have decisionmaking authority regarding higher education? Is this authority supported by the financial capacity to implement these decisions? Are there legal competencies, administrative controls and delegated functions in place to develop and implement policies at the regional level? For Russian universities the decentralization of power from the national to regional level was critical in several ways. First of all, the shift away from centralized control in higher education was most saliently reinforced by the dramatic change in the central state-regions relations: from the authoritarian centralism of the Soviet era to regional decentralization, to more regional and local autonomy in line with the democratization ideology of the perestroika period. Second, the context of greater regional autonomy provided universities with the perspective of their own institutional policy, with the opportunity of interacting with the open environment of immediate stakeholders— be it students, employers, governmental officials, or public communities. Some universities may be better prepared for that or more willing to take risks, others less so. But the future for both will depend on how the university fits the redesigned regional identity, whether it is responsive to the local demands in knowledge, expertise, training, intellectual ambiance, and cultural cohesion. In other words, whether a new regional environment provides room for policy at the university level, and whether a new regional level of policy is made possible and effective.

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The trends of regional decentralization in Russia are analyzed below according to five of the six dimensions highlighted in chapter 2: 1) rationale for regional decentralization and local self-government; 2) legal/constitutional framework; 3) political context; 4) leadership and the elites’ consensus; and 5) financial context. RATIONALE FOR REGIONAL DECENTRALIZATION AND “REGIONAL ASCENDANCE” In the face of large size populations, geographic vastness and diversity —states invariably face the problem of areal decentralization of decision-making over the provision of public goods. The literature indicates that such an ‘areal’ issue may be satisfied by administrative and economic decentralization quite distinctly from political decentralization (see, e.g., Leonardi, Nanetti, & Putnam, 1981). However, the importance of political and constitutional decentralization is recognized even by economists to the extent it affects the responsiveness of the provision of local services to local interests (see, e.g., Oates, 1972, p. 18). For the newly independent State of Russia that declared its sovereignty on June 12, 1990, and elected its first president on the same date in 1991, the problem of ethnic and geographic diversity was enormous. Despite the disintegration of the Soviet Union in December 1991, Russia has remained the largest country in the world in terms of geographic area. It has an ethnically diverse population (of 148,500 thousand people in 1991 and 145,900 thousand people in 2000) (Goskomstat, 2000, p. 54), with half of the population inhabiting the historic center of Russia in the European part that comprises roughly 1/5 of the territory of the contemporary country (see table 3.1 below). Localities differ greatly in the extent of endowment with natural resources and gross regional output. Resource-rich Western and Eastern Siberia combined remain until now the only geographic areas in Russia where the population produces a disproportionately large share of the gross regional product (GRP). The Russian localities bear the pre-perestroika legacy of the distorted ‘vertically imposed’ division of labor. Thus, whole towns and cities have been developed around a single giant plant. Some localities have been specialized in the extraction of raw resources, others in the processing of raw materials according to the centralized planning of the Soviet era when the transportation costs were not taken into the efficiency equation. Access to social services and goods has also considerably varied between the localities, between the center and the provinces. The inequalities in the economic and social development

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Table 3.1. Percentage Share of Geographic Clusters of Regions of the Total Territory, Total Population, and Corresponding Gross Regional Products

Source: Compiled and calculated from Goskomstat, 1999, vol. 2, pp. 28–30.

between regions have led to disparities of economic and social change in the post-Soviet decade. Scarcity of domestic investment compounded by a large capital flight out of the country and economic decline after perestroika hit regional economies to varying degrees. The grievances of large ethnic groups forcefully dislocated under Stalinism, and the tragic events of the Stalinist genocide against Russia’s multinational people bred resentment over the center’s rule and its abuse of Russia’s provinces. Thus, both the legacy of centralized exploitation and the great diversity of the country presented a strong case for decentralization in the newly independent Russia. In other words, the impetus for decentralization in Russia was preconditioned by economic and sociocultural factors. The rationales that supported the emerging intergovernmental policies came out of the original democratization ideology in the mid-1980s. Below the two most prominent original slogans of perestroika—toward democratization and toward national sovereignty —are considered. Local demands came to be understood as the engine of the country’s development when the grip of the highly centralized and hierarchical Soviet party-state machinery weakened and finally collapsed in 1991. The way to the disintegration of the Soviet Union was paradoxically paved by the perestroika (‘reorganization, restructuring’) and glasnost (‘openness, voice’) policies launched by Michael Gorbachev in 1986 in an effort to amend the Soviet State and incorporate market elements

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in the economy. The ideology of perestroika revived the very ideals of democracy and national self-determination that were felt to be dogmatically misused and distorted in their content during the years of the communist party regime that resorted to the language of democracy and self-determination only to legitimize its own rule. Indeed, the very slogan “All power to the Soviets” of the 1917 Bolshevik revolution became central in the late 1980s democratic elections to the councils of local self-government, the key institution of the nascent representative democracy. The ideals of democracy and freedom seemed to become closer to realization than ever before in Russian history. Democracy. In retrospect, democracy appears to be the concept that embraced a multitude of aspirations of the actors of perestroika, the time when a truly revolutionary change was launched in Russia. The forces that supported the change extended through all the society and spread to the grass roots. Perestroika and glasnost also opened up a public discourse about the goals of the change. Due to this openness, there is considerable information from political debates and campaigns, surveys of public opinions and analytical reports that indicates that the concept of democracy had multiple meanings (see, e.g., McAuley, 1997). These meanings of democracy ranged from the citizen’s rights and freedoms to participate in and criticize governance, electoral rights and free press to personal freedom, competence and responsibility, a dignified way of living, ownership rights, and the opening of the market economy (pp. 23–25). The reform-minded politicians embraced a classic Greek concept of democratic citizenship that emphasized the rule of law and lawgoverned statehood and reduced politics in the government (Sakwa, 1993, p. 29). Indeed, according to the Weberian typology of legitimacy of order and authority (Weber, 1947), Russia’s new state-building was legitimized on a legal-rational basis rather than on a traditional or a prophetic/charismatic basis. The legal-rational basis of the state also appeared to rule out the patron-client ties of the Soviet era. Among the reformers, lawyers took a strong position on the legal foundations of the society. Anatoly Sobchak, a reform-minded politician and then a Law Professor of Leningrad State University and later the first elected mayor of St. Petersburg, was one of the first in the late 1980s to advocate the legal reform agenda, It included a) establishment of normative rules, b) separation of legislative power from executive power which had been fused together under the Soviet system with the omnipresent control of the party, c) establishment of a whole new juridical apparatus, and d) ensurance of sovereignty for union republics. His 1989 program as a candidate to become an elected public representative envisaged

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…development of law-based statehood and radical legal reform through a theoretical development of a concept of law-based state, establishment of the rule of law, of general schemes for the development of legislature, legal norms and juridical mechanisms to protect and realize constitutional rights of citizens, as well as of economic rights of enterprises and organizations. The immediate preconditions of establishing a lawbased state are the following: separation of legislative and executive powers, deprivation of KGB [Committee on State Security] and MVD [Ministry of the Interior] of political functions, elimination of excessive centralization of the state power, and real provision of political and economic sovereignty of union republics (Leningradskiy Universitet, December 3, 1989). At the same time, the establishment of the economic base of democracy through transformation of a centrally planned economy into a free market economy and the introduction of private ownership was favored both by the democratic and liberal reformers. The liberals gained the reign after the 1991 August coup in the “government of reformers” in November 1991 (through late 1993) and started implementing a package of “shock-therapy” policies. They aimed, first, to liberalize prices (the peak of inflation from 1991 until mid 1998 fell on January 1992 at 245%). Second, they intended to harden budget constraints by imposing a fixed budget on state-owned enterprises and, thus, phasing out state subsidies for their losses. Third, they encouraged the privatization of state-owned enterprises. By mid 1992 in Russia the division emerged between the democrats, who were mostly concerned with ensuring the functioning of democratic processes, and the liberals, who were preoccupied with the establishment of the economic base of the civil society (Sakwa, 1993, p. 30). Edward Dneprov, the Minister of Education of the Russian Federation from 1990 till 1992 whose contribution to the reform of Russia’s education remains outstanding, criticized the narrow technocratic policies of economic liberalism when applied to such social spheres as education. He claimed that for the realization of a tripartite reform goal of establishing a market economy, a lawgoverned state, and a civil society, the role of individuals and of the society was not regarded on a par with the economic factors (Dneprov, 1996, p. 24). Dneprov criticized the policies of societal transformation that relied solely on establishing private property and markets and that delayed educational priorities until the time of economic prosperity as anti-social and anti-democratic. He emphasized that “the economic monism” of the liberal reformers had a high social price.

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Thus, by 1996 from one third to one half of Russia’s population were said to have a standard of living at or below the official poverty line. The very supporters of the reforms—Russian intelligentsia: educators, researchers, librarians, museum staff and the like—were hit hardest by the reduction of public funding while the “compensation” for their economic situation through broadened freedoms and incentives for social and economic initiatives and creativity was not provided. Finally, Dneprov considered it antihuman to rely on the “fittest”, who thrived under Darwinist “natural selection” and the situation of “freedom to survive or vanish” (Dneprov, 1996, pp. 26–31). Indeed, the undermined social basis for the societal reform led to an increasing alienation between the “governed and the governors” and eroded the popular democratic aspirations. According to the 1995 allRussian survey conducted by the Institute of World Economy and International Relations of the Russian Academy of Sciences, 83 percent of the respondents believed that those who governed the country were indifferent to the fate of any particular individual (Izvestia, June 20, 1995). The past decade since the beginning of the fundamental changes in Russian society initiated under the democratization ideology has shown how diverse were the aspirations for democratization, and how over time different actors and groups tabled the reform agenda or counteracted the reform efforts. At various times the division would run along different lines: democrats vs. neo-liberals, statists vs. “freemarketeers”, pro-reformers vs. conservatives, gradualists vs. radicalreformers, centrist-technocrats vs. neo-liberals or more complex oppositions. And so, the underlying rationale for democratization and marketization changed over the period of post-Soviet transformation. The role of the initial rationale for democratization—in support of a multiparty political system and emerging representative democracy; in support of individual economic and political freedom, economic autonomy for enterprises; and in support of local interests and preferences as contrasted to the centralized command and control,— can hardly be exaggerated. Clearly, in all its evolving meanings democratization served as a powerful rationale to assert the value of private and localized interests and demands, and, therefore, to promote local autonomy. Democratization determined the principles of the political structure of the new state, and the sovereignty rationale further shaped the concept of state-building and of centerperiphery relations. National self-determination and sovereignty. Similar to the principle of democratization, the concept of sovereignty was applied to different levels—that of the individual, of a social group or community, of an econom ic entity, and the state. The concept of sovereignty had

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emerged parallel to the democratization ideology, and when combined with the principle of national self-determination it took the lead in fostering the Newly Independent States (NISs) of the former Soviet republics. Similar to the democracy ideal, the principal of national self-determination was felt to have been distorted under party rule and the excessive centralism of the past, and, so, it became equally powerful in leading aspirations for fundamental change in the late 1980s. At that time democratic aspirations and the movements for national independence in the union republics were clearly linked. In the Russian Federation this link was not so prominent (see, e.g., analytical account in Sakwa, 1993). And yet the independent statehood of the Russian Federation was paralyzed by the central regime as the Russian Federation’s own governmental institutions and control over its own resources was lacking. The declaration on June 12, 1990 of the sovereignty and precedence of Russian Federation laws over the Union laws was a major step to reclaiming Russia’s independence and the launching of its own state-building. Its suit was immediately followed by a number of republics, so that by the end of October 1990 in addition to the Baltic republics of Estonia, Lithuania, and Latvia, as well as Moldova and Russia, sovereignty was declared also in Ukraine, Belarus, Turkmenistan, Armenia, Tadzhikistan, Kazakhstan, Kyrgyzstan, and the Abkhaz Autonomous Republic in Georgia (McCauley, 1998, pp. 54–56). In this way Russia served as a central actor in the disintegration of the Soviet Union at the end of 1991, though this outcome was hardly intended. Russia’s declaration of independence was not aimed at disintegrating the Soviet Union but rather at pushing Russia’s own agenda that had been blocked by “the absence of a clear demarcation between union and Russian institutions” (Sakwa, 1993, p. 19). Indeed, in the eyes of Russian intelligentsia, politicians, and regional officials, Russia had suffered even more than most from centralized rule, from having no one to defend her interest. The solution was seen to lie in full political and economic sovereignty. As one may see from the 1989 program by Anatoly Sobchak (1989) the primary reform agenda included establishing a law-governed state and the political and economic sovereignty of all the republics of the Union. Yet in 1990 the meaning of the word sovereignty was not agreed upon. It was variously taken to mean political self-government, economic and cultural self-control, and autonomy. Mary McAuley (1997) observed that at that time “sovereignty” had a variety of references in political debates such as independence, greater autonomy for territorial units, cultural autonomy, acquisition of republican resources, or the priority of state institutions over party (p.

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32). Illustrative may be the excerpt from the speech by President Boris Yeltsin in late May 1990, in which he argued that sov ereignty extended to include devolution of ownership rights to the regional and local level, and the endowment of individuals and enterprises with such rights: The scheme is the following: the most important, primary [holder of] sovereignty in Russia is an individual, his/her rights. Further —the enterprise, collective farm, state farms, or any other organization—here there exists the strongest primary sovereignty. And of course there is sovereignty of the district soviet or of some other local soviet (Sovietskaya Rossiya, May 25, 1990, p. 6). Importantly, in line with the democratization ideology, local sovereignty was the focus of the first attempt to break with the Soviet state. The new Law on Local Self-Government of July 6, 1991 was ushered in to remove locally elected councils (soviets) from the control of the party and surveillance of the centralized state bureaucrats and to affirm local councils as non-state institutions of participatory democracy. The project of local sovereignty was apparently riddled with flaws: the scope of jurisdiction of local self-government was not clearly defined and, therefore, it was not warranted against intervention from the national or regional executive; the economic base of self-government as well as tax and property rights were not clearly or sufficiently defined; the concurrent endowment of local governments with legislative and executive functions in practice weakened both functions further; finally, there were no independent judiciaries in localities (see an account of post-Soviet local selfgovernment in Lapteva, 1996). Moreover, the implementation of local sovereignty coincided with launching radical macroeconomic reforms, and it was further delayed by the national political crisis in 1991– 1993 and the increase of the authoritarian powers of the President after disbanding the Supreme Soviet in October 1993. However, notwithstanding this economic and political context, the broad liberal principles of local self-government were endorsed in the new Constitution of 1993, though the specifics of self-governing institutions were to be identified in a separate law, which was not adopted until 1995. Though “sovereignty” as applied to different entities was welcomed in the early 1990s political discourse, some feared that by accelerating the disintegration of the Soviet Union, the Russian Federation’s liberal aspirations endangered its own political and territorial integrity by the potential “domino effect” of fragmentation. By October 1990 eleven

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of the sixteen ethnic republics within the Russian Federation had passed their own sovereignty declarations (Stoner-Weiss, 1997, p. 81) following the suit of the parade of sovereignties of the Union republics and Russia itself. Several ethnic autonomous republics and ethnic autonomous oblasts within the Russian Federation applied to upgrade their status to that of union republics and unleashed a war of laws. In retrospect the separatist threat was exaggerated since the ethnic republics neither structurally paralleled Union republics, nor had as strong basis for political mobilization against the government of postcommunist Russia as they would have had against the Soviet center (Lapidus, 1999). Indeed, the national Russian government was quick to accommodate the claims of the ethnic republics. At the meeting in Bashkortostan in August 1990 President Boris Yeltsin stated what immediately became a succinct outline of center-republic policy in Russia at that period: We say to the peoples of Bashkortostan, we say to the Supreme Council and the Government of Bashkiriya—take as much power as you can swallow [handle]…. If you decide that the mineral depths, wealth and lands should be Bashkir, it would be so…. Bashkir oil and gas belong to Bashkiriya and only it can be in charge of its wealth. Enough! You’ve had enough of the robbery in the past!… If Bashkiriya declares its sovereignty, we would honor this sovereignty (as cited in Sovietskaya Bashkiriya, May 21, 1996). Obviously political pressure for disintegration prompted the national government to grant privileges to ethnic republics as the Federal Treaty was concluded in March 1991, thus leading to asymmetrical federal relations with other members of the Federation in their relation to the center. Retrospective studies indicate that a separatist threat by several ethnic republics was used as a pressure tactic in the struggle with the center for redistribution of political and economic power. Thus, Daniel Treisman (1997) found that ethnic separatist activism in the early 1990s was not significantly related to the liberation of a previously repressed primordial ethnic sentiment, except for the Islamic religious tradition. Nor was the separatist threat recorded at the highest rate in economically less developed regions. Quite to the contrary, the starting position (such as economic export potential and richness in natural resources) and the relative bargaining power (the legal status as a republic) was found to be strongly correlated with the separatist stance (p. 246). These issues of center-regional relations were clearly shifted to play out in the political arena.

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Implications for universities. To sum up, the rationale for decentralization and greater local autonomy was propelled by the broad principles of democratization starting from the late 1980s in Russia. The content of the latter principles might be considered as evolving over time from all-embracing concepts to more differentiated ones. This evolution mostly depended on two factors: first of all, on the perceived priorities of reforms and the dominant conception of reform strategies in the government, and secondly, on the emerging groups of actors with their own vested interests and expectations from the transformational dynamics. From this perspective, the rationale for university autonomy as perceived by the public and by members of the university communities was similarly of a less differentiated nature at the beginning of the post-Soviet changes. Since university autonomy fit the democratization ideology, the national strategies of democratization and marketization were also expected to have an impact on higher education policies. Over time, the initial rationale evolved into specific interests, goals, and opportunities. The evolving and “in flux” character of center-region relations of the Russian state, and the emerging status of local self-government in the overall governance structure influenced the relations between higher education institutions and the different levels of government. Also the uncertain nature of center-regional relations affected the individual universities’ capacities for responding to the changing environment either (1) by pursuing their own discretionary policies, (2) by adopting policy goals advanced by a particular governmental level, and thus remaining loyal to it, (3) by some combination of the two, or (4) by opting to drift along using past practices. LEGAL FRAMEWORK: CONCEPTION OF THE STATE The new Russian Federation emerged with eighty nine constituent members: twenty one republics, eleven autonomous formations (autonomous oblasts and okrugs), fifty five regions (oblasts and krays) and the two cities of Moscow and St. Petersburg with region-status (The Constitution of the Russian Federation, Art. 65). Independent Russia also inherited a multi-tier hierarchical structure from its membership in the Soviet Union: the top tier of the federation center (Moscow), the second tier of oblasts, krays, autonomous republics and autonomous oblasts, the third tier of autonomous okrugs as constituent parts of a higher tier entity, and finally, the tier of local selfgoverning municipalities (cities, towns, town boroughs, counties, and villages).

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The first major cleavage between governmental levels developed in 1991–1993 between the national and the top subnational level, known also as the center-region struggle over the structure of the Federation. The conflict around the status of autonomous okrugs emerged in 1996 when the oil-rich autonomous okrug of Yamalo-Nenets declared that it would not participate in Tyumen’ oblast gubernatorial elections. The lower chamber of the Parliament (Duma) reacted by passing a bill that prohibited the secession of autonomous okrugs from oblasts or krays (McCauley, 1998, pp. 71–72). The legal provision for local selfgovernment was adopted as early as in 1991 (July 6, 1991 Law of the RSFSR “On Local Self-Government”) and later in the new Russian Federation Constitution of December 1993 (Chapter 8. On Local SelfGovernment) that stated that local self-government “shall ensure independent solution by the population of local issues, ownership, use and disposal of municipal property” (Art. 130, Item 1). Significant for the development of the financial foundation of local governments was the law adopted on April 15, 1993 “On the Principles of Budgetary Rights to Form and Use Non-Budget Funds by Representative and Executive Institutions of State Power.” The Constitution also proclaimed the budgetary and tax-levying authorities of local governments, though in practice the latter continued to be limited. The constitutional crisis between the President and the National Parliament extrapolated on the local level, and in October 1993 President Yeltsin dissolved the national parliament (Supreme Soviet) followed by disbanding regional and local soviets, popularly elected in 1990. In the 1991–1993 the political focus fell on the center-regional opposition while the development of local self-government was further overshadowed by the launch of economic reforms. A number of researchers concluded that in 1994–1996 the center-periphery opposition shifted to the subnational level of relations between regional and local governments with “a new attempt at imposing a centralized and bureaucratized system of local self-government ‘from above’” (Kirkow, 1997, p. 54). Though designated by the 1993 Constitution as having an equal status to the federal center, the ethnic republics were actually granted a higher-tier status and the regions a lower-tier one. Thus, the republics negotiated the right to form their own “states” and exercise larger control over the development of their own policies. The debate leading to the Federation Treaty of March 1992 had started as early as 1990 of the post-independence period with the discussion of competing models of federalism, namely—territorial federalism (with or without restructuring federation members into larger territorial units), a national-territorial model, and a model of local selfgovernment (Lynn & Novikov, 1997). According to Nicholas Lynn and

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Alexey Novikov (1997) the 1992 Federation Treaty was an unpopular compromise because the different parties had different ideas about its relevance—was it to be permanent or transitory (pp. 191–198). Kathryn Stoner-Weiss (1997) argued that the debates on the structure of the Russian Federation reflected different and conflicting perceptions held by the regions and the center: a “ground-up” approach to federalism of a more “contractual” nature vs. a “fromabove” centrist model of “national” federalism (pp. 82–83). The center-regional struggle over the Federation structure led to three distinct processes, each marked by separate legal acts: a) the March 1992 Federation Treaty, b) the December 12, 1993 Constitution, and c) the bilateral agreements between the federal government and republics complimented by granting charter rights to oblasts. By the time of signing the Federation Treaty, several concessions were made by the center under the growing influence of regionalism at the oblast level, spurred by democrat ic elections. First of all, the uneven treatment of regions and republics was mitigated by including regions as signatories of the Federation Treaty (though the center insisted on concluding three separate Federation Treaties mainly to appease ethnic republics—between Moscow and the republics, between Moscow and the oblasts and krays, and between Moscow and the autonomous formations). Second, the plan of redrawing boundaries of regions to create bigger territorial entities and the alleged equalizing benefit of territorial federalism was perceived in regions as an attempt to erode regional authority and hence was dropped from the Treaty (Stoner-Weiss, 1997, pp. 82–88). The 1992 Federation Treaty gave the 21 ethnic republics a higher status, having granted them the right for sovereign statehood, as distinct from the predominantly Russian-populated oblasts and krays. The 1993 Constitution of the Russian Federation defined the Russian state as a federation and it asserted in a conflicting manner the equality of all 89 federation constituent members in their relations with the center, while preserving the special ethnic-territorial status of the republics. The Constitution stated the supremacy of the federal Constitution and federal laws and their prevalence in the case of inconsistencies with the Federation Treaty or bilateral treaties; also the impossibility of unilaterally changing the status of Subjects was spelled out. A third kind of document, bilateral treaties, was signed between the federal government and individual ethnic republics, and charters were given to the oblasts to provide an appearance of equal treatment. The negotiations about the relation between the center and the republics led to granting special privileges to the republics in the bilateral treaties, that is, to the situation designated by the specially coined term of “asymmetric federalism”. Many observers—outside and

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inside the country alike—have drawn attention to these allegedly contradictory processes of Russian federalism. Two distinct approaches emerged. One approach was to scrutinize the legal text of the Constitution and to highlight its failure to define the Russian state as a federation (see, e.g., Sharlet, 1994; Feldbrugge, 2000). According to this approach the powers for the federal government appeared excessive, and the fullness of the state power remained with the center as in a unitary state with some measure of decentralization and atomization. This position would argue that the exclusive powers of regional governments were assigned according to a residual principle, while the exclusive jurisdiction of the federal government and the joint jurisdiction of the federation and regions were both exhaustively listed. At the same time, the exhaustive list of competencies for the exclusively federal level and joint federal-regional level was somewhat mitigated by the vague and indeterminate division of powers between the respective jurisdiction levels, allowing the center to exclusively regulate the matter as it saw fit. Another approach did not see in the Constitution the main reason for the troubled center-region relations, nor did it support the assertion that the 1993 Constitution established a unitary rather than a federal state (Walker, 1995). From this point of view, the Constitution did not compromise the federal status by the removal of the language on republics as “sovereign states”. It did not explicitly deny this status but rather asserted the full state authority of the Subjects on matters of their exclusive jurisdiction and granted them powers of independent legislation. The residual principle of competencies’ division was not necessarily a failure in itself (e.g., it is used in the U.S. Constitution and is effectively implemented in practice). And the indeterminacy in the division of jurisdiction between the levels of government was somewhat inevitable. From this point of view, the constitution is always a compromise rather than a specific, legally dogmatic document. After all, there cannot be a universally accepted definition of a federation, and there is no universal recipe for state-building. So, the major focus should be on the effectiveness of legal provisions rather than on their formal definitions. Though different, both approaches recognized the inevitability of the impact of political considerations on the drawing of the Russian Federation’s Constitution. Both approaches indicated that interpretation of one and the same legal document in different ways by the federal government and by the republican or provincial governments was highly precarious. Therefore, both approaches insisted on the importance of a coherent and consistent legal

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framework that was collectively agreed upon and was complied with by the major political stakeholders. Intergovernmental relations in Russia’s state-building have not been free of problems. These problems are often indicated as the ongoing “war of laws”, since some provisions in the constitutions and charters of republics and regions are reported to conflict with the federal Constitution and federal laws. Apart from the intergovernmental conflict over jurisdiction, another conflict resides over the issue of resource allocation. Thus, the financial and political crisis of August 1998 spurred regional leaders to restrict the export of food products from their regions, while some regions reduced or altogether declined to transfer tax revenues to Moscow. The effectiveness of the system of fiscal federalism is yet to be seen. These conflicts may or may not be viewed as the immediate consequence of federal provisions designed in the Constitution alone according to the two approaches summarized above. There is still a lack of consensus and of political will to achieve a commonly shared conception of statehood. Another potential impact on educational provision in the nation is associated with the recently established new structure of coordination from Moscow. By President Vladimir Putin’s decree of May 13, 2000, all the 89 Subjects of the Russian Federation were grouped into seven super-regions (or federal districts) each headed by the presidential plenipotentiary. Experts and scholars indicated at least three possibilities for the federal districts to have impact on coordination of inter-regional policies (as exemplified by the discussions during the 33rd convention of the American Association for the Advancement of Slavic Studies in Arlington, VA, November 2001). First of all, the need for inter-regional horizontal cooperation was always there as expressed in the bottom-up emergence of interregional associations. Second, federal districts included different types of the Russian Federation Subjects and, therefore, they were expected to facilitate new interactions among them and to ease the tensions. Third, federal districts were considered to be able to address inter-regional inequalities in access to public services including education. However, there were considerable reservations expressed regarding all the three expectations. First, the competencies of the plenipotentiaries were not either clearly defined nor did their status fit the constitutional law; second, new districts ran across the body of several inter-regional associations (especially the Urals, the Greater Volga, and partly the Inter-regional Association of Siberian Agreement) thus counteracting the lines of the already developed economic connections; and, finally, there was no indication of how the new districts would redress drastic disparities among the Subjects.

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POLITICS OF CENTER-REGIONAL RELATIONS The democratization ideology and the market-based economic transformation spurred aspirations in regions for local control over local affairs, for taking charge over one’s own destiny. In the late 1980s and especially with the initiation of the perestroika policy by Michael Gorbachev in 1986 there was a growing pressure to decentralize because the huge centralizing apparatus of the party became ever more cumbersome and bureaucratic. In 1990 in Russia elections were held for local and regional soviets (legislatures) on a completely overhauled principle that aimed at establishing effective representative democracy. The elections were multi-candidate and competitive. The role of the communist party in controlling elections and its results was substantially reduced: the communist party was no longer exclusively to nominate candidates and the number of candidates was not limited, the percentage of public organizations (including the party) in the soviets was removed, and the seats in soviets were no longer designated for high party functionaries (Hahn, 1996, p. 165). Importantly, separation of the legislature and the executive was intended, though the executive was felt by some as more powerful as it controlled execution of the budget (Hahn, 1996, pp. 172–173). According to Jeffrey Hahn the dominance of the executive over the legislative was “not because of its total control over the organization of the work of deputies of soviets as before, but because of the expertise and experience of its leaders in running the government” (p. 173). And though many first oblast communist party secretaries were elected as chairmen of the transformed legislatures (soviets), the introduction of a measure of accountability to their constituents served to democratize and decentralize Russia’s government, making it inevitable for the local governments to press for more control over local policies (Stoner-Weiss, 1997, pp. 57, 73). Consequently, the waning power of Russia’s center and growing claims for power in regions led to political conflicts between Moscow and the regions. Much of the confrontation between the center and the republics that was started after Russia’s declaration of independence in 1990 has centered on the competition for control and resources. The declaration of sovereignty by the ethnic republics of the Russian Federation in 1990–1992, which became known as the “parade of sovereignties,” matched the spirit of national self-determination of Russia and other former Soviet republics that ultimately led to the dissolution of the Soviet Union in December 1991. The secessionist threat presented by the ethnic republics of Russia, however, turned out to be not as potent in its nature and scope as compared to the national movement in the

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former Soviet republics (see, e.g., Lapidus, 1999; Mendras, 1999). Nevertheless, the political leverage of the ethnically-defined republics of Russia threatened the country with a spiraling disruptive cycle. This political leverage rested on the presence of the nonRussian population and on the substantial economic base, such as oil-rich and oil-processing industries of Tatarstan and Bashkortostan, and diamond-rich Sakha-Yakutia. In 1992 these republics and Chechnya stopped transferring tax revenues collected locally to the federal center; their example was followed by other republics and regions totaling twenty by the fall of 1992, and reaching about thirty out of eighty nine by 1993 (Wallich, 1994, p. 248). The bottom-line was to obtain lower central taxes, ownership of state assets, and rights over local natural resources (including the distribution of income from natural resource exports) as a precondition for membership in the federation. Mary McAuley (1997, pp. 42–108), who closely analyzed the two contrasting strategies in relationships with Moscow of Tatarstan and Sakha-Yakutia, showed that the leadership in both took advantage of the claims for nationhood (“played the nationalist card” p. 73) in order to secure very similar relations vis-à-vis the center with substantial power over their resources, ownership of state assets, and control of foreign trade. Though Tatarstan adopted a strong independent posture while Sakha-Yakutia maintained a loyal posture to the center, the primary issue of contention was economic, which having been achieved simultaneously weakened the nationhood agenda to the big disappointment of the leaders of the ethnic-based movement. President Yeltsin’s government responded with the policy of concessions and compromises to the republics—first, by granting considerable autonomy to republics in the Federation Treaty of March 1992 and, second, by granting special privileges and special arrangements through bilateral agreements with republics—the first in February 1994 with Tatarstan and the second in May 1994 with Bashkortostan. The 1993 Constitution allowed for asymmetric bilateral negotiations, though the longer-term principle was that of equality of all the Subjects of the Federation: “what is granted to one is granted to all.” Thus, the 1993 Constitution framed center-regional relations in a broad and flexible way, which in spite of immediate criticism proved to be a politically wise decision of gradually working out the details of these relations until it was abandoned for force in Chechnya (Walker, 1995, pp. 58–59). The bloodshed in the Northern Caucasus put an end to the on-going debate on the principles of federalism—civic-territorialand ethnic-based,—which were otherwise useful, and undermined the idea of federalism itself (see, e.g., Lynn & Novikov, 1997).

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At the same time privileges granted for political reasons to the ethnically defined republics in bilateral agreements rightfully drew resentment from the Russian regions as they soon found themselves in the dilemma of either preventing the others from bilateral bargaining with the federal government or securing special privileges for themselves. Ironically, most regional leaders who demanded to stop the practice of bilateral agreements also sought for privileged agreements in the interests of their regional constituents (see examples on that in Filippov & Shvetsova, 1999, pp. 73–74). According to some analysts this pattern of bilateral bargaining was not a matter of political choice of regional elites, but rather an institutionally entrenched option developed in the last years of Soviet federalism (Filippov & Shvetsova, 1999). Apparently, the 1993 Constitution did not change this pattern. Some critics praised the new Constitution for setting a flexible framework for fine-tuning center-regional relations. While entrenching the law-abiding mentality in the transitional society, it did not establish fixed and rigid rules that would have led to enormous complications under the rapidly changing political environment and high political stakes (Walker, 1995, p. 59). However, this very “flexibility is built into the document in ways other than the amendment process” (p. 60), that is, instead of rule-based processes it left the door open to ad hoc negotiations and political bargaining. Concessions from the center granted to the ethnic republics allowed them to keep a greater share or all the tax revenue levied on the territory1 (Lavrov, 1996; Speckhard, 1994). Regions (oblasts and krays) shortly demanded entrance into the game of bargaining. From 1995 the federal center started signing bilateral agreements with oblasts and krays, and granted them the right to draw charters in an attempt to keep up with the privilege of drawing basic laws/ constitutions in ethnic republics. The move of the center was defined by some critics as political, once again due to the impending presidential and regional gubernatorial elections of 1996–1997 and the need for the center to secure political allies in the regions (see, e.g., Lynn & Novikov, 1997, p. 199). Redistribution of financial resources by the federal center in the early 1990s appeared to be influenced by political determinants rather than by need. Thus, Treisman’s analysis (1996) showed that revenuesharing and other financial transfers from the federal government to republics and regions in 1992 was determined by regional bargaining power, and more specifically by “the regional discontent and credible resolve to threaten economic and constitutional order” (p. 299). The critical variables that have greatest impact on the tax redistribution to regions were a) a low vote for President Yeltsin in the 1991 presidential elections, b) an early declaration of sovereignty in ethnic

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republics, and c) the incidence of strikes in the previous year. Thus, the federal government appeared to have resorted to the policy of appeasement of ethnic republics and some other regions, which presented the greatest challenge to the central authority. Consequently, the resource distribution policy of the federal government was labeled as “oiling the wheel that squeaks loudest” (Hanson, 1998) in the early 1990s. But when by the mid–1990s the Russian oblasts and krays joined the bargaining game, the center started cracking down on the “disobedient.” REGIONAL LEADERSHIP The wide variation in the implementation of reform policies as well as the well-being of the constituent populations in the regions were found to be increasingly influenced by the quality of leadership of the regional governors (Slider, 1997; Stoner-Weiss, 1997; de Melo et al., 1999). First of all the re-introduction in 1996 of the practice of electing governors increased the accountability and the loyalty of the regional leaders towards their local electoral constituents (Stoner-Weiss, 1997, 1999). Also regions with low or no conflict between the executive and the legislature (the conflict was played out at the national level in the confrontation between the President and the government, on the one hand, and the Parliament, on the other) were able to achieve greater performance and responsiveness from their local governments (see, e.g., McAuley, 1997; Stoner-Weiss, 1997). Russia’s regional success stories in Nizhni Novgorod, Novgorod, Samara, and Saratov emphasized the importance of leadership (Petro, 1999; Zimine & Bradshaw, 1999; Startsev, 1999; Easter, 1997). Several studies indicated the emergence of a new generation of regional leaders with excellent managerial and leadership skills, the capabilities that regional authorities were lacking in the early 1990s. Does personal loyalty to the center matter? A number of case studies and other reports from field work in the Russian regions provide inconsistent evidence on the central loyalty of the regional leaders. Political consistency and the links to the “party of power” are cited as significant. Several successful regional governors were brought to the federal government, where their “regional perspective” either turned out to be too parochial in the sort of pork-barrel politics or they did not live up to their promise on the national arena. This phenomenon prompted some to assert that the aspirations of regional leaders in Russia were simply to achieve a national position and Moscow prominence. The boldest move toward regionally (oblast and kray) initiated actions and toward obtaining greater economic autonomy from the

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center was through the consolidation of efforts of oblast and kray leaders in interregional associations. The very first and most successful one was the Siberian Agreement, set up by the seventeen oblasts and krays of Siberia and the Far East in November 1990. The association was formed at a time when Siberian economic resources assumed even greater significance for the Russian economy: in 1990 Siberia’s contribution to GDP stood at about 11% of the total, while its products (mainly fuels) accounted for around 60% of Russia’s hard currency earning (Hughes, 1994). Siberia accounted for the production of 75% of Russian oil, 90% of gas, 65% of coal, and 25% of electricity. While greater Siberia (Siberia and the Russian Far East combined) extends over around 3/4 of Russia’s territory, it hosts only 1/5 of Russia’s population (see table 3.1 above). It remains the larder of raw materials for Russia with its share in the GRP much higher than its share of the total population. The regional leaders of the Siberian Agreement Association initially united around an economic agenda. The regions of Siberia and the Far East accumulated their grievances against ruthless economic exploitation of the “larder” of Siberia’s resources by Moscow’s central ministries and the Kremlin’s monopoly over Siberian revenues. The resentment against the center for reducing Siberia’s role to that of a mere supplier of raw materials precipitated the establishment of the first “horizontal” inter-regional coalition Siberian Agreement. However, by 1993–1994 in the absence of central concessions the claims for political power by the leaders of the Association became more pronounced. The increasing political power of the Siberian Agreement leaders was unacceptable to the center, which resorted to the policy of “divide and rule” by luring loosely associated member-regions with concessions and attempting to sack the Association leaders. The spectacular rise of the Siberian Agreement was followed by its political downfall (Hughes, 1994). However, the precedent was set, and between 1991 and 1993 at least eight other inter-regional associations were modeled after the Siberian Agreement. In the aftermath of the August 1998 financial crisis, some regional leaders took the initiative to deal with the mounting economic chaos on their own, raising speculation that the crisis could accelerate disintegrative tendencies in the federation. The then Prime-Minister Mr. Primakov warned against the “fiefdom mentality” of regional leaders and proposed federal legislation to allow the removal of popularly elected governors who exceeded their powers (East European Constitutional Review, 1998, 7(4), p. 56). However, threats against regional leaders were offset by the inclusion of eight governors in the newly created presidium of the government. The invited governors included the leaders of the major interregional

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associations—of the Urals (Mr. Rossel), Greater Volga (Mr. Merkushin), and Siberian Agreement (Mr. Kress) (ibid.). Thus the new body allowed a select group of governors to sit in three branches of government simultaneously: the regional executive, the federal executive, and the federal legislature (in the Federation Council). REGIONAL ECONOMIC DISCREPANCIES AND THEIR IMPLICATIONS FOR EDUCATIONAL PROVISION Regional inequalities in development. There were significant differences in the levels of development achieved by Russia’s regions during the Soviet period under the centralized command system. The enormous geographic expanses and the country’s ethnic and social heterogeneity aggravated these inequalities. However, the salient and the most pervasive disparities in the society characteristic of the past can best be described in terms of the ways the center dominated the periphery: a. socially (the privileged core of the nomenclatura ruling elites vs. the underprivileged majority of citizens); b. geographically (the central capital of Moscow with the highest concentration of talent in culture, science and education, the seat of the top state bureaucracies that decide on the key investment, development and other issues vs. the country’s “periphery/ hinterland”); c. economically (the general character of the economy was the predominance of defense industries, raw-extracting industries over agriculture, food processing and consumer goods production; the location of economic assets varied widely between the regions: in some industrial concentration was very high, others were “spared” of the strong industrial base; many cities were established to support one industry only (monoindustrial towns). Vertical lines of economic planning and administration from the center were solidified by the ubiquitous control of the party. Consequently, the collapse of the party-state set in place strong disintegrating forces and revealed regional economic disparities. The mechanism of central administration was removed, and so was the central administrative system of revenue redistribution and equalization among regions. The regional disparities intensified in the post-Soviet period. Patterns of regional economic discrepancies. A number of studies have attempted to define the scale and pattern of post-Soviet regional

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economic diversification. These studies agree that many of the economic regional differences in Russia reflected the legacy of the centralized allocation of economic roles that further increased during the post-Soviet transformation, while other regional economic gaps developed anew in the context of transformation. The economic recession, which was induced by the liberalization of prices and a rampant inflation, further increased regional economic differences. One of the earliest classifications of Russia’s regions by OECD (1995) drew a link between a) the economic profile of regions inherited from the past, b) the regionally preferred policy of transition from the centrally planned economy to a market system, and c) the speed of economic reform implementation (pp. 52–54). The OECD study distinguished between the two large economic groups of regions: extroverts and introverts. Extrovert regions were defined as those oriented toward external economic linkages and, therefore, favoring liberal economic policies; their pace of reform implementation was generally labeled as fast. They included two groups of regions: (1) major commercial hubs and gateway regions, and (2) resource-rich regions in Siberia, and northern European Russia. Introvert regions were divided into two major types: (1) agroindustrial regions with self-sufficiency of food production and (2) regions dominated by the military-industrial complex. The former were characterized as generally favoring protectionist policies for their regional markets and slow in implementing reforms. The latter were characterized as deploying different policies that led to mixed results in the economic transition. Related to the extrovert and introvert categories of regions introduced in the OECD study is the study by Philip Hanson (1996). He found that the smaller decline of real income per capita since the pre-perestroika year of 1989 in financial and gateway regions (extrovert) was strongly related to the high per capita inflow of foreign capital in these regions. Regional productivity and competitiveness of industries appeared to have little to do with capital inflow, while being a ‘gateway’ was a considerable advantage in attracting foreign investments. Thus, most of the joint ventures—the main form of foreign investment in the early 1990s—were concentrated in Moscow (82.6%). According to the official statistics, in 1996 Moscow accounted for 46.6% of all foreign investment, St. Petersburg for 5.6%, Tatarstan for 5.8%, and the resource-rich regions of Western Siberia for 5.1% (Nezavisimaya Gazeta, October 29, 1996 as cited in Filippov & Shvetsova, 1999, p. 66). The Center of Economic Analysis at the Russian Federation Government (CEA, 1995) provided quarterly-based data between 1993

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and 1995 on the per capita income distribution among Russia’s regions. Statistics aggregated according to groups of regions by wealth, measured by income of the population, showed that the gap between the poorer and richer regions had increased in the post-Soviet Russia. The wealth of regions appeared to be linked to the region’s economic profile. Five groups of regions were distinguished according to the income share of the respective regional populations in the total income distribution. According to this classification, between 1993 and 1995 the resource-rich regions (mostly in Siberia, Far East, and northern European Russia), financial and transportation hubs such as Moscow, St. Petersburg, and others were cited among the most prosperous areas. The lowest income level group included the agro-industrial regions of Russia. Several military-industrial regions were placed in the medium income level group, thus in full accord with the previously discussed patterns of regional differentiation. One of the striking contrasts revealed in the Center’s longitudinal categorization of regions was registered in October 1993 between the City of Moscow (the highest income level group) and Moscow oblast (the lowest income level group). By October 1994 the gap was considerably reduced and Moscow oblast was cited in the uppermedium income level group. The statistical categories of regions hide possible contrasts between urban and rural areas with the exception of Moscow City and Moscow oblast, and St. Petersburg and Leningrad oblast, since both cities are treated equivalent to regions according to the size of their population, economic base and important political role. Indeed the inequality in income, social services and education within regions between their rural and urban populations may in fact be of a larger scale than the discrepancies between regions. Regional leaders, who have been elected since 1996 and therefore are said to be more accountable to the local constituents, are more often addressing this increasing gap in access to quality education for the urban and rural inhabitants. The statistics on income distribution by region compiled from the CEA’s publications are presented in table 3.2 below. Notably, three trends can be distinguished from the data in table 3.2. First, the core members of the most affluent (Group V) and the least affluent (Group I) groups of regions remained fairly stable over time. Second, the gap between these two groups continued to widen over the referenced period of time. Third, most variation was observed in the composition of the medium income level regions (Groups IV, III, and II): this variation pointed towards the tendency for these groups to approximate the impoverished end of the distribution rather then the better-off end.

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Table 3.2. Population and Money Income Distribution by Group of Regions

Source: CEA, 1995, vol. 1, p. 74, vol. 2, p. 68, vol. 3, p. 66, vol. 4, p. 66. *Population share for Groups I, III, and V remained fairly stable over the period of time, while it varied for Groups II and IV.

The point here is that regional economic variation in the post-Soviet era is linked to a) regional richness in natural resources, b) strategic position as a country’s gateway, a transportation or financial hub, c) ‘endowment’ with a heavy industrial base (mainly of the militaryindustrial nature and enormously short of resources because of the cuts in military orders) or the predominant agricultural profile of the region. Economic discrepancies among the regions of the Russian Federation continued to increase through the 1990s. According to some analysts the gap in the per capita budgets between the ten richest regions and the ten poorest regions was 17–fold in 1998 and almost 21–fold by 2001 (Kommersant, May 11, 2001). ISSUES OF FISCAL FEDERALISM Designing a new tax system. After removal of the administrative system of income distribution, post-communist countries embarked on the establishment of a tax-based system of distribution that would fit the market-oriented economy and the democratization of governance. The classical socialist system, as described by Janos Kornai (1992, p. 541), relied on the turnover tax as the main source of revenue. Under privatization of state owned enterprises, the turnover tax revenues would have been difficult if not impossible to control. Western-style taxes—VAT and personal income tax—were introduced instead. This

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move marked the shift of the tax burden “from enterprises to individuals and from production to consumption” (Campbell, 1996, 143–144). John Campbell distinguished between several other influences on fiscal reform in the post-communist countries in addition to adaptation to the market-oriented economy and the encouragement of economic growth through relatively low corporate income taxes (1996, p. 143–148). Namely, a) the effect of democratization on tax reform with the transfer of the responsibility for fiscal policies to newly elected legislatures that became open to political influences especially from the lobby of powerful political elites, who substantially profited from their own market activity; b) the influence of the discourse of economic equality perceived as part of a new democratic ideology as reflected in the introduction of moderately progressive personal income tax rates and of VAT; and c) influences from the international organizations and foreign governments that stimulated Western-style tax reform. The fiscal reform in Russia was launched in early 1992 with the introduction of the Federal Law on the Basic Principles of Taxation (December 1991). The personal income tax appeared essentially flat because of the broad taxable income bracket subject to 12% taxation, while the upper rate of 60% on the highest incomes stimulated underreporting personal incomes and double bookkeeping similar to other post-communist countries. To encourage self-reporting and to improve tax collection, the personal income range with the applicable lower tax rate was broadened in 2001. The rapid decline of economic output in the early 1990s combined with the cut-off subsidies to enterprises and with the rampant inflation led to a considerable shortfall of public revenues. Surrogate moneys (payment obligation, barter) in the cash-short economy made efforts of tax collection ever more difficult. The Russian “virtual” economy flourished, and so did pervasive tax evasion, often encouraged by state officials corruptibly turning a blind eye to the most obvious tax-evaders (see, e.g., Hanson, 1999 on the problems of stabilization in Russia). Increased budgetary autonomy of regions in the absence of their taxation autonomy. Budgetary autonomy was extended to regions in their new rights to assign revenues but regional autonomy of taxation was lacking because tax rates as well as tax bases were determined by the federal government. The first part of a new Taxation Code effective in January 1999 increased taxation autonomy for regional and local governments allowing them to charge additional taxes, such as a sales tax, though within a centrally predetermined rate range. However, the introduction of a sales tax in addition to VAT and

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without targeted support of the most disadvantaged population did not turn out to be a very successful policy of replenishing regional and local treasures. The passage of the Law on the Rights of Local Governments to Establish Off-Budgetary Funds widened regional and local budgetary discretion. Regional and local governments tended to divert their raised revenues in these funds to prevent upward revenue sharing with the federal government. Principle of unified collection of revenues and tax-sharing. Currently in Russia the old principle of unified collection of revenues and tax-sharing among the various levels of government is endorsed (Taxation Code, 1999). There are two levels of state government [federal and regional (oblast, kray, republic)] and a municipal (city/ township/rural rayons) level of self-government. The “bottom-up” system of tax collection from rayons and municipalities to the regional government and then to the federal government and consecutive redistribution of tax revenue in the “top-down” manner is retained. Many observers indicated the vulnerability of state integrity in this mechanism of revenue sharing—similar to the one that allowed former Soviet republics to stop making transfers to the state and that contributed to the dissolution of the Soviet Union in 1991 (Bahl & Wallich, 1995, pp. 337, 344). The precedent repeated in 1992 and 1993 when several ethnic-based republics exercised pressure on the central government in negotiating advantageous power-sharing arrangements and privileged tax retention rates, and in the aftermath of the August 1998 financial crisis when some regions reduced or altogether declined to transfer tax revenues to Moscow. The mechanism of tax administration involving the back redistribution of tax revenues jeopardized the budgetary autonomy of local governments when regional governments stopped transferring revenues to localities, even though they were obligated by the law to meet responsibilities in financing schools and social protection (see, e.g., a grievance of the Russian Association of local communities to the Council of Europe). Determinants of federal-regional fiscal relations. Federal-regional fiscal relations in Russia in the 1990s are often characterized by experts as ambiguous, subject to ad hoc arrangements and negotiation, variable from year to year and from region to region, and at best as “necessarily asymmetric” given a wide variation in regional resourceendowment, economic base, bargaining power of regional leaderships, or an inclination of Moscow to secure the political support of certain regions (Bahl & Wallich, 1995; Treisman, 1996; Filippov & Shvetsova, 1999).

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One of the major criticisms of fiscal federalism was that attempts to legislate tax assignment between various levels of government (starting with the Law on the Basic Principles of Taxation of December 1991) were never fully implemented. The practice of revenue sharing remained far from being uniform or rule-based (Bahl & Wallich, 1995; OECD, 1995, p. 59). Instead, tax sharing rates were defined in budgetary acts on an annual and quarter annual basis and, thus, were conducive to revenue-driven regional spending decisions (Bahl & Wallich, 1995, p. 327; World Bank, 2000). Table 3.3 below shows that most of the tax revenues that regional governments retained came from four major taxes: personal income tax (PIT), company income tax (CIT later replaced by enterprise profit tax), value added tax (VAT), and excises. According to the 1991 law “On Basic Principles of Taxation,” PIT was to be fully retained by the regional governments, but since 1995 its 15.5% share has accrued to the federal government. CIT was also to be fully retained by the regions and localities. But since 1995 it became shared between the federal and regional governments with the rates varying from year to year. VAT regional retention rates varied from region to region between 10% to 100% until 1994 when it was set uniformly at 25% (though some regions continued to press for negotiated rates). Excises almost completely accrued to the federal government. Generally there is a tendency for national or central governments to end up with greater resources than they need to perform their functions, and for regional and local governments to be left with more functions than they can adequately pay from their limited resources. This phenomenon is known as vertical imbalance of revenue redistribution and often occurrs in federal systems. This situation might be explained by the fact that tax revenues are difficult to predict over time, and that federal (or central) governments tend to control a large or major part of the most profitable sources of tax revenues. To amend this imbalance the policy instrument of grants, or transfers, from the central government to regional governments is most frequently used. The forms (subventions, targeted for the defined purposes, or block grant allocations) and conditions (the condition of matching funds from regional government, etc.) of such transfers appear to be decided as a result of political rather than financial considerations. As shown in table 3.3 in Russia the regional retention rate of the three major shared tax revenues continued to decline between 1992 and 1998 mostly due to the reduced share of Enterprise Profit Taxes and VAT. Regional and local governments were forced to increase their own revenues—from local taxes and non-tax revenues (such as fines and fees, revenues from privatization, rental of municipal

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Table 3.3. Distribution of Regional Government Revenues in the Russian Federation

Source: Tabata, 1998, p. 452; Goskomstat, 1999, vol. 2, p. 763—for 1998. * Replaced by Enterprise Profit Tax.

property, profits from direct economic activity, and carryover from any previous year budget surplus)—from 18.5% in 1992 to 37.1% in 1997. At the same time some changes were introduced into fiscal federalregional relations with the establishment of the Federal Fund for Financial Support of Regions (FFSR). However, according to Shinichiro Tabata (1998), the level of federal financial support that included transfers, earmarked subventions, grants, and short-term loans (both as percentage of total regional revenues and as percentage of Russia’s GDP) has remained practically unchanged since 1994—between 7.8% in 1994 and 9.3% in 1997 of total regional revenue, or from 1.3% to 1.5% of GDP (pp. 452–453). The bulk of the federal financial support to regions was provided in the form of transfers from the Fund for Financial Support of Regions. The FFSR was launched in 1994 to replace variable VAT retention rates and to perform a more or less equalizing function among regions. Yet, because the fund was initially formed from federal VAT receipts, the regions were allowed to offset payments of VAT revenues they owed to the federal budget by corresponding FFSR transfers. The practice led to differentiated VAT retention rates as negotiated between the regions and the Ministry of Finance (Tabata, 1998, p. 454). Formula-based FFSR transfers to regions were intended to replace negotiated subventions. The sharing principle has remained essentially the same although numerous amendments were applied

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since 1994. Roy Bahl and Christine Wallich (1995, p. 343) indicated that this formula-based method of determining regional need was flawed and it, consequently, provided the wrong incentives to regions. First of all, tax effort was not rewarded because actual revenue collection rather than revenue capacity was used in the formula. Second, the scheme encouraged high spending in regions with above average revenues, which would thus benefit from FFSR transfers. Donor regions, many of which were successful in restructuring their economies, were typically penalized by the tax system. This concern was bluntly put by one of the federal government officials who indicated in a published interview in 1997 that the current system of taxation benefited the subsidized: “the worse you work now, the larger the transfer payment you can expect next year” (cited in Slider, 1997, p. 456). While dependence on federal financial aid varied among regions, the net financial flows in and out of regions varied too. According to the official statistics, in 1993 only seven regions managed to balance their budgets, and about 56% of the federal taxes were paid by thirteen regions2, in 1997 the list of major taxpayers to the federal budget (56%), comprising ten regions, almost did not change3. In 1994 twenty-five regions were net donors, in 1996—fourteen, in 1997–1998 ten or eight regions. Net donor regions with negative balances of out-flowing tax revenues and in-flowing shared taxes or federal transfers appeared to be effectively penalized for their tax collection effort. At the same time ethnic-based regions that negotiated for themselves higher tax retention rates might be driven to spend higher on their responsibilities. Several studies attempted to assess the horizontal balance of Russia’s fiscal federalism, that is, the extent to which federal transfers addressed issues of equality of distribution of social services across the Subjects of the Russian Federation. Thus, Alastair McAuley (1997) tested the degree of association between regional per capita net balance of financial flows and a number of variables selected to measure social deprivation in regions, regional tax effort, and regional need for social expenditures. He found that the regional per capita net balance of financial flows was associated with a real income variable, a share of population below the working age and an index of housing quality as a proxy of economic development, and that, therefore, the federal re-distributive policy was “influenced if not driven by social concern” (p. 437). At the same time the share of tax revenue raised and retained by regions appeared not to be associated with either real income, population density or incidence of poverty. It may, therefore, be influenced by the regional tax base, perceived effort of tax raised or political considerations. The level of revenues received by regional

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Table 3.4. Share of Federal Educational Spending by Level of Education

Source: The data are compiled from World Bank, 1999, p. 26.

budgets also appeared to depend on the performance of the local economy. The tax collection did not appear to be influenced by regional price variation. This indicates that regions with high price levels (such as the far East and the North) were disadvantaged. Regions, where certain types of social need (such as the share of population below working age) were greater, showed a greater willingness to levy taxes (p. 430–440). Indicators of urbanization did not prove to have a significant influence. Transfer of spending responsibilities from the federal government to local and regional governments. Since 1992 the major part of social and most capital expenditures were transferred from the federal down to the regional and local levels of government. The regional share in governmental expenditures rose from 35% in 1992 to 65% in 1994. In 1996 regions were responsible for financing 88% of all public medical expenditures, 80% of all educational costs, and 70% of the costs of social services (social protection and welfare) (Kommersant-Daily, October 14, 1996). According to the Law on Local Government of 1995, major expenditure responsibilities for education at different levels of government were defined as follows: financing most university-level educational institutions and research institutions remained a federal responsibility; preschool, primary and secondary schools were the responsibility of local governments, though in practice control over educational expenditure and other budgetary autonomy was retained by the region-level governments (World Bank, 1999, p. 25). The responsibility for financing vocational education was increasingly shifted to the regional level. The change in the share of federal spending responsibility by level of education from 1994 to 1996 is represented in table 3.4. Under competing regional and local spending responsibilities, there is a risk that such an important social expenditure as education will be crowded out. Experts and observers agree that with an increasing number of people most hurt by price liberalization and economic

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Table 3.5. Spending Responsibilities of the Russian Federation’s Local Governments as a Percentage of Consolidated Governmental Expenditures (1992–1997)

Source: de Melo, Ofer, & Yossifov, 1999, p. 603.

restructuring, their social protection and the protection of their rights in education should not be the responsibility of regional and local governments alone (see, e.g., Bahl & Wallich, 1995, p. 336). Local budgets under fiscal stress. Regional and local budgets appeared under significant financial stress since the beginning of economic and political transformation. Spending responsibilities were downloaded from the federal level much quicker than the new revenue accrued. Between 1992 and 1997, revenues (including the transfers from the federal government) at the disposal of local (municipal and rayon) governments increased by 7% (from 23% to 30% of the consolidated governmental expenditures), expenditures (including transfers) increased by 14% (from 15% to 29% of the consolidated state expenditures) (de Melo, Ofer, & Yossifov, 1999, pp. 559, 603). The revenues increased due to the rise in the local shares of property taxes and “other taxes”, not from increases in the traditional shared taxes (PIT, CIT, VAT, excises) or transfers. Spending responsibilities of local governments increased for education (by 15%), for social protection (by 20%), and for development of the national economy (subsidies to housing, public transport and direct support of industry) (by 33%) (see table 3.5 below). Competing spending priorities at the regional or local levels often resulted in diverting funds from education to other financial responsibilities. In which case educational institutions were always a losing side while officials at the federal and regional levels were engaged in finger-pointing. Moreover, the federal government, which defines the salary level for all public employees including teachers in public schools, could mandate a salary increase (often for political reasons—such as in the 1996 mandated increase in the wake of presidential elections) without provision of matching funds. The decline of local economies and the privatization of local enterprises—a major source of employment and taxes for localities in the past as well as a provider of social services such as pre-school and

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vocational education and housing—contributed to the further erosion of local revenue base and to the increase in local spending responsibilities. The structure of local budgets underwent changes commensurate to the changing of functions of local governments. Local state-owned enterprise served as a significant revenue source in the Soviet city budget. With the privatization of enterprises and the cash-short state of the economy, regional and local governments looked for stocks or joint ownership of enterprises of private or mixed ownership. This led to continuing subsidies to loss-incurring enterprises and other protectionist policies. Local authorities often engaged themselves in lobbying the federal government to secure production orders, to extend credits, to pay wage arrears or to reduce tax burden; they also exercised pressure on banks to lend money to enterprises; sometimes local governments were instrumental in finding foreign investors (de Melo, Ofer, & Yossifov, 1999, p. 570). Examples of the successful lobbying of the federal government are the leaders of two wealthy regions—M.Shaymiyev of Tatarstan and mayor Yu. Luzhkov of Moscow, who pressured the federal government to prevent bankruptcy proceedings against major enterprises in their regions that owned billions of rubles in tax payments to the federal budget in early 1997 (Slider, 1997, p. 454). Thus, ownership rights of local governments in enterprises only further complicated “the city role as regulator, tax collector, and facilitator of economic development” (de Melo, Ofer, & Yossifov, 1999, p. 558). Regional variation in educational spending. Regional variation in educational spending is expected to be associated with the regional variation of wealth—whether, as discussed above, due to a) the rich resource endowment of a region, b) favorable location as a transportation or commercial hub, c) a moderate to lower share of industries in the regional economic base, and d) preferential federalregional tax retention rates. To test this hypothesis the data that would reflect both per capita regional wealth (as in the variable of per capita Gross Regional Product) and per capita educational spending were searched for. Both were found and compiled from various sources only for the year 1994 (see Appendix). The correlation between the two is found to be positive and statistically significant (the correlation coefficient of 0.412). However, when per capita educational spending was adjusted to regional CPI as a regional price deflator the association between the regional wealth and educational spending appeared much weaker— the correlation coefficient dropped to the insignificant level of 0.073. The most striking contrast between regional wealth and per capita real educational spending for 1994 was presented by Tyumen’ oblast,

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Table 3.6. Per Capita Income and Educational Spending in Selected Regions of the Russian Federation in 1994

Source: Compiled from Goskomstat, 1996; Goskomstat, vol.2, 1999

an oil-and gas-rich region and traditionally a donor region of Russia. Tyumen’ oblast per capita GRP was registered at the highest level among Russia’s regions in 1994 (359% the average) while real per capita educational spending in the region was only 39% of the Russian regions’ average level. A comparative sample of the corresponding statistics for a small group or Russian regions is shown in table 3.6 below. Assuming that a higher regional economic performance translates into a higher regional tax contribution, redistributed back to regions tax rev enues for education appeared not to be effected by the regional price variation (as illustrated by McAuley, 1997 discussed above) or may have been diverted to other spending priorities. Given the enormous fiscal pressures on local government budgets (as a result of a decline of local revenues, shifted responsibilities from the federal government, unfunded federal mandates, and competing spending priorities) on the one hand, but little taxation autonomy on the other (combined with excessive tax pressures on new private and privatized enterprises and pervasive tax evasion problem in the cashshort economy), there is currently little prospect that regions and localities “will be more successful at raising popular will to tax themselves or raising the interests of prominent and wealthy individuals,” as outlined by Stephen P. Heyneman (1997, p. 11). Currently higher per capita expenditures on education are a function of regional wealth. Illustrative is the case of Tatarstan from the study of ten Volga-area regional capitals (de Melo, et al., 1999) that boasted the highest per capita educational expenditure in real terms. Tatarstan regional wealth reflects both high budget revenues and high revenue retention rates in the republic as part of the special

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Chart 3.1. Annual Number of Students (in Thousands) Admitted to Russian Public Higher Educational Institutions, by Specialty (1980–1995)

Source: Compiled from Goskomstat, 1996, p. 183.

power-sharing arrangement with the federal government. Importantly, Tatarstan leadership is committed to investing in human capital (judging by the republic’s high expenditure shares in education, health and sports). Obviously, when regional and local governments obtain enough revenues at their disposal they secure their base in order to commit themselves to longer-term priorities. The impact of local fiscal autonomy on educational spending is less evident. Tatarstan was assessed as more centralized—providing less leeway to local governments—than the other regions in the study. Likewise regionally administered innovations in school finance and school services in Samara region may reinforce the plausibility of regional centralization of educational financing. However, the recent innovative experience of decentralizing school financing to the municipal and rayon level of management in Saratov and Tyumen’ regions may prove the initial observation wrong. REGIONAL POLICY IN HIGHER EDUCATION REFORM AND ITS IMPLICATIONS FOR INSTITUTIONAL BEHAVIOR The discussion thus far has focused on regional support of education as a whole where wide disparities in regional capacities and policies were evident. These emerging disparities were an important factor behind the preference of university leaders for limiting the formal link of their institutions to regional governments. Higher education admissions in Russia had decreased since the mid 1980s and hit their lowest level in 1992. Thereafter the admission rates in state (public) HEIs picked up and even exceeded the pre-

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perestroika levels. However, back in the early 1990s many higher education officials expressed increasing concern about the declining higher education enrollments in absolute numbers (see, e.g., Poisk and other periodicals). Polytechnics and technical specialized institutions were hit hardest, while some popular new and old specialties (such as economics, financing, management, law, foreign languages, and psychology) experienced a boom in attracting new applicants. Chart 3.1 illustrates the change in the admis sion rates by specialty of Russian public HEIs between 1980 and 1995 above. The diminishing admissions caused the overall decline of higher education enrollments, which had been rising in the decades before and reached record numbers in the 1982–1983 academic year. The most often cited reason for the early 1990s decrease in higher education enrollments was a decline of interest in higher education among the youth. Inversely, to account for the rapid recovery and increase in enrollments in the late 1990s, the rekindled interest for higher education among the young people was cited again. In fact, the picture was more complicated. Not only did the rates of enrollments in post-compulsory general secondary and tertiary educational institutions as a percentage of the eligible age cohorts (of 15–18 year olds and 19–24 year olds respectively) decrease in the early 1990s (but started to steadily increase from 1994), but also the rates of enrollment at schools of basic general education declined in 1992. Finally, the demographic decrease at this time in the higher education eligible age cohort of 15– 24 year-olds added to the resulting decline in the absolute number of higher education applicants. The decrease in absolute numbers in higher education enrollments between 1985 and 1992 was not equally distributed across the regions of the Russian Federation. The most dramatic decline in higher education admissions happened in the central cities of Moscow (–23. 2%) and St. Petersburg (–19.2%), where the concentration of HEIs remained the highest in Russia. However, one fourth of the regions experienced an increase in local higher education enrollments during this period. More and more applicants entered local HEIs due to the steep increase in the cost of traveling to and living in central cities, the increasing crime rate, and last but not least because of the rekindled sense of local loyalty. How did higher education respond to the changing geographic pattern of demand? By 1998 both public and new private institutions of higher education in Moscow and St. Petersburg recovered their pre-

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perestroika rates and achieved a slight increase of 5.5% and 3.3% respectively, compared to the average increase in regions of 21.3%4. By 1998 other regional cities, that traditionally attracted out-oftown students, improved their enrollment rates slightly below the national average such as Novosibirsk (16.6%), Tomsk (17.2%), Rostovna-Donu (15.5%), Yekaterinburg (24.6%), Samara (17%). The most dramatic increase in higher education enrollments occurred in 1. resource rich areas and remote northern areas (orin status similar to northern areas) (e.g., Tyumen’—106.7%, Murmansk—88.2%, Kamchatka—242,1%, Sakhalin—92.9%), 2. ethnic republics (e.g., Adygey Republic—193.9%, Dagestan—132. 7%, Khakass Republic—103.8%, Chuvash Republic—71.5%, Sakha (Yakutia)—76.2%, Republic of Altay—54.8%, Kalmyk Republic— 46.7%, Udmurt Republic—45.3%, Mordvinian Republic—38%, Tatarstan—32.1% and others), 3. dynamically developing regions (e.g., Novgorod—102.7%, Kirov— 42.2%), and 4. several regions with small networks of HEIs of the red-belt Central Black-Soil area (Belgorod, Tambov, Lipetsk) at a rate ranging from 44.8% to 76.3%. In the fourth group higher education enrollment rates still remained below the average regional level and the private higher education sector was practically non-existent. Higher education enrollments in selected regions of Russia are represented in chart 3.2. In line with the post-perestroika shift of educational policies toward interests and abilities of individuals rather than of the governmentally determined targets of needs of the economy, the policy toward regionalization of higher education emerged as a state educational policy in the early 1990s. It addressed the changing geographical pattern of higher education enrollments and it mirrored the broader agenda of large-scale decentralization of government, ascendance of regional and local interests with the twin arguments of enhanced democracy and efficiency through the decentralized service to local interests and demands. In 1995 Mr. Vladimir G.Kinelev, the Chair of the State Committee for Higher Education (at that time the central governmental agency in charge of higher education), referred to regionalization as the key issue of the higher education restructuring in the 1990s (The Russian Federation Regional Policy in Higher and Secondary Professional Education, 1995, pp. 118–125)5. The policy toward regionalization of higher education thus appeared to address the on-going changes in

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Chart 3.2. Higher Education Enrollments in Selected Regions (1985-1998)

Source: Goskomstat, 1999, vol. 2.

higher education and the movement of the larger society toward the market economy and increasing regional autonomy. Since the policy was meant to fit the on-going process, it embraced a variety of strategies and lacked definite decisions about the role of regional governments in governing, funding and regional policymaking. Similar to the lack of unambiguous division of competencies between the levels of government—federal and regional, that led to proliferation of bilateral agreements,—the State Committee for Higher Education (with the functions of a full-fledged ministry) embarked on drawing agreements with regional HEIs and regional governments about the division of their competencies and defining their responsibilities in the area of higher education. The first seven agreements between the federal agency and regional Subjects were signed in 1992, and by January 1995 forty-two regions and republics had signed such agreements (Kinelev, 1995c). Over the ensuing years all of the regions signed these agreements. As already observed, the economic divergence among the eightynine regions of the Russian Federation is striking. The case studies of three Russian universities selected to illustrate individual university strategies in chapters 5–7 are located in Subjects with different economic profiles: the extrovert Subjects of a major commercial center of St. Petersburg and of a transportation hub of Novosibirsk Oblast, and the introvert Subject of Kemerovo Oblast as a resource-rich region with the predominant heavy industries. As to the level of average

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personal income in the early 1990s, Kemerovo oblast was placed in the highest level group, St. Petersburg in the upper-middle level, and Novosibirsk oblast in the upper-low income level group (CMR, 1995, 4, p. 65). While, by the tax collection effort, St. Petersburg was ranked as 16 percent higher than its tax capacity, Kemerovo region as five percent above its tax capacity, and Novosibirsk region as 17 percent below its tax capacity (Bird, Ebel, & Wallich, 1995, pp. 376–377). Among the three regions to be featured in chapters 5–7, the Kemerovo government was the first to introduce the regional education tax at the rate of one percent of all the local enterprises’ salary funds (the least manipulated budget category), which was then distributed between educational institutions. With the increasing concentration of taxes at the federal level, regional educational tax was dropped. The major ambiguity about the policy of regionalization was that while the majority of regional governments could not afford to fully fund HEIs located on their territory, their role in higher education policy making was not clear either. Regional governments were not legitimized as decision-making bodies in the area of higher education. Moreover, the initial legal functions in licensing private HEIs was recaptured by the national agency by the mid–1990s (1996 Amended Law on Education). In the Law on Education the center clearly defined its exclusive decision-making authority in higher education as well as in joint center-regional authorities, having deconcentrated certain tasks to regional governments. The list of these decisionmaking authorities was detailed and exhaustive leaving no decisionmaking power for regional governments with regard to HEIs. In the absence of the legal power or the power of the treasury, both the State Committee for Higher Education and the leaders of HEIs did not see any benefit in the transfer of HEIs to the regional level. The progress of change that Russian society embarked on was not easy: it caused unprecedented hardship, it was weakened by political uncertainties of this period and by the lack of consistent priorities and the vision of the intended contours of the transformed society. Under these conditions the State Committee for Higher Education also appeared to lack leadership vision. This especially applied to the policy of higher education regionalization. The Committee’s Chair Mr. Kinelev admitted in 1995: “We are in the midst of a long process [of higher education transformation] which is inseparably related to the economic and social changes in the larger society. It is important to keep the sense of proportion: not to lag behind these changes, and not to run ahead of them” (Kinelev, 1995c, p. 77). Overall, the general thrust of the regionalization policy lacked a clear focus. Many factors of legal, political, financial, and

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organizational nature continued to shape the reform direction. In view of the difficulties inherent in relying on a policy of regionalization for the development of higher education, the prominence of the central state on the one hand and of individual institutions on the other hand became enhanced. CONCLUSION: IMPLICATIONS OF RUSSIA’S REGIONALIZATION FOR EDUCATION This chapter underscored that regional decentralization and increasing regional autonomy in the early 1990s Russia was a most powerful process that amplified the aspirations of those in higher education toward greater autonomy. The empowerment of social actors in higher education led to the endorsement of university autonomy as a basic principle both in state-university relations (as legislated in the 1992 Federal Law on Education, and in the 1996 Federal Law on Higher and Postgraduate Professional Education) and in university self-governance (as adhered by university communities in their institutional charters). The nature of autonomy is multifaceted, allowing typologies with varied foci. One perspective on the origin of autonomy locates autonomy and the adjacent processes (such as decentralization) on one and the same continuum, where, in a zero-sum pattern, more autonomy means less centralized control and vice versa6. From this perspective the collapse of the hypercentralized party-state regime in post-communist Russia increases aspirations toward autonomy of various social, political and economic entities. At the same time the ideals of democracy and national selfdetermination/sovereignty were revived as leading ideals of the democratization ideology of perestroika. Both concepts embraced a wide range of meanings—from personal autonomy and sovereignty as a human right, a political and electoral right, to local self-government as a form of mobilization of resources to express local preferences and to empowerment of various social constituents—social and ethnocultural groups and individuals. The democratic content of rights and autonomies also extended to the autonomy of economic entities and, thus, the ideologies of societal democratization and of economic marketization got interwoven. Overall, the democratization discourse launched by glasnost and perestroika rekindled social activity and increased the sense of responsibility of social actors who up to that time had been passive. The democratization ideology opened up all Russia’s regions to embrace participatory democracy and self-government. The legal/ constitutional framework was meant to set up rules for such

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structures. Strong regions were to constitute a strong and independent Russia. However, the implications of devolution of political power for the old and newly emerging political elites led to a tug-of-war over power and control in the centerregional relations. Counteracting re-centralizing trends emerged at the federal and regional levels. New powerful regional leaders emerged. Regularly elected since 1996 they appeared more accountable for their local constituents and were able at times to stand up to the center in order to defend the local interests and at better times to maintain good relationship with the center. Emerging regional coalitions indicated that center-regional relations were not as much a struggle for political power but a result of diminishing resources and a consequence of mutual dependence. Regional diversity in economic development continued to grow in the post-Soviet Russia. The power of the regions vis-à-vis the center increased in the early and mid-1990s while the center resorted to such compensating tactics as regional appeasement through federal transfers and granting priv ileges, imposition of financial penalties for the disobedient, and co-option of powerful regional leaders into the federal government. The impact of economic recession, poor collection of taxes combined with the cronyism of the bureaucracy threatened fiscal federalism in the Russian Federation with a scarcity of available public moneys. By the late 1990s federal financial aid to regions appeared to be influenced if not driven by inter-regional equalization concerns, while the regional share of the most stable and lucrative taxes decreased. Considerable variation in the retention of regionally raised taxes remained between ethnic enclaves and Russian regions. The current formula for financial transfers has been criticized as not awarding taxeffort and perpetuating an excessive spending of public moneys. At the same time regions were forced to increase their own revenues, which led to an ever increasing taxation burden on local privatized and new private enterprises, to a bad cycle of increasing tax evasion and a proliferation of tax- or user-fee subsidies to the already privileged social classes. Local budgets were delegated a major part of social and capital spending in the process of downloading fiscal responsibilities from the federal center to regional and local levels. The competing spending responsibilities in the regional and local budgets combined with unfunded federal mandates diverted education funds to other than educational priorities causing chronic wage arrears for teachers, and a general under-funding of education. In this situation HEIs, as more expensive businesses than schools, lobbied the government against the transfer of their financing to the regional level. Though public higher education sought regional

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financial contributions as a matched funding scheme and offered forfee services to regional governments and clients, the exclusive reliance on funding from regional governments was assessed as too risky. The immediate implication of the changing center-regional relations for higher education is the way the responsibilities for education are assigned and the way the resources are allocated between the levels of government to fulfill these responsibilities. In this regard, the impact of the newly delineated responsibilities and resources between the center and the regions was more significant for general education schools than for higher education institutions. However, regional empowerment presented higher educational institutions with a new ambiance, where more autonomous and selfgoverning universities and institutions were better prepared to identify and cultivate new demands, develop responsive initiatives, and attract more resources. Yet the opportunities of a new environment for HEIs were clearly limited, and they varied from region to region. The assumption, held by most university leaders, that strong links with the federal government and a secure position in the national higher education hierarchy promised greater opportunities for survival, will be tested in the next chapter. Also the varied paths that universities took in utilizing the advantages and taking risks presented by the new environment of empowered regions will be explored in the case studies of three individual universities. A number of initiatives promoted by the State Committee for Higher Education in the early 1990s were loosely defined as a policy toward the regionalization of higher education. Though criticized for the lack of clear goals, this policy was a counterpart response of the state agency in charge of higher education toward large-scale national decentralization of public services. Its wide range of coverage of issues mirrored the multitude of meanings of the rationale of decentralization: from democratization of governance towards economic independence and accountability. As a result the State Committee for Higher Education transferred various authorities to individual institutions of higher education allowing them an unprecedented level of autonomy. However, the on-going reforms at the national and regional levels brought about obstacles of a legal, financial, and managerial character to the intended policies in higher education. Chapter 4 will dwell upon the resulting change in the rules of the game across the national higher education landscape as well as on the crystallizing vested interests of the major groups of actors concerning greater university autonomy. Chapters 5–7 will analyze the differing strategies and paths of individual universities striving to make full use of the newly granted autonomy in order to reinvent themselves in the changing higher education environment.

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NOTES 1 According to the published data for 1995 (Lavrov, 1996), the highest share of raised tax revenues was retained in republics (ranging from 70% to 100%), while oblasts and krays retained on average 61.1% (ranging from 51% to 74%) of the raised tax revenues. Specifically, while receiving under 1% of total budget revenues in federal support subsidies, Tatarstan and Bashkortostan retained 77% and 74% respectively of the raised tax revenues in 1995; Republic of Sakha retained 100% of the raised tax revenue (ibid.). 2 Moscow, Bashkortostan, Moscow oblast, Samara oblast, Sverdlovsk oblast, Chelyabinsk oblast, Khanty-Mansy autonomous okrug, St. Petersburg, Tatarstan, Krasnodar kray, Krasnoyarsk oblast, Perm oblast and Kemerovo oblast (Argumenty i Fakty, April 28, 1997 as cited in Filippov & Shvetsova, 1999, p. 65). 3 Moscow, Khanty-Mansy autonomous okrug, Moscow oblast, YamalNenets autonomous okrug, St. Petersburg, Samara oblast, Sverdlovsk oblast, Tatarstan, Perm oblast, and Bashkortostan (ibid.). 4 All the rates here and below are calculated from the data provided by Goskomstat (1999, vol. 2). The changing pattern of regional enrollments in the Northern-Caucasian area because of the impact of military conflicts and related migration are not discussed here. 5 See Mr. Vladimir Kinelev’s presentation “Regional Policy of the Russian Federation in Higher and Post-Secondary Professional Education” at the conference of officials of HEIs and State Committee for Higher Education held in Moscow on January 17–18, 1995 (Kinelev, 1995c). 6 However, as Guy Neave (1996) concluded, the rhetoric of public policy may not necessarily coincide with the institutional behavior it elicits as in the case of dual (and potentially contradictory) policies of institutional self-regulation and of enhanced accountability (p. 208).

CHAPTER 4 The Trend toward Autonomy of Russian Institutions of Higher Education

THE RADICAL CHANGES OF THE PERESTROIKA PERIOD IN RUSSIA WERE brought about by Russia’s own people—well-educated and highly-trained—whose value, however, had not previously been recognized by the nation’s leadership class. The people turned first to the school system with an eye to its transformation so as to enable the self-development of creative and responsible personalities. The major goals of the educational reform were conceptualized by VNIK, Temporary Research Think-Tank “Shkola” (School) led by Edward D.Dneprov, a historian, dynamic educational reformer and Minister of Education of the Russian Federation in 1990–1992. The growing grassroots movement of educators and teachers who were eager to innovate and take risks supported the think tank. VNIK crystallized the educational priorities that shortly served as a basis for their legal promulgation in a new Law on Education of the Russian Federation in 1992. Thus, the Law defined the underlying principles of the state educational policy as follows: 1) humanism as actualized in a child-centered approach, commitment to universal values and the free development of personalities and citizens; 2) multiculturalism which pursues both integrity of the federal cultural and educational systems and protection of regional and ethnic cultural traditions; 3) equality of access to education, adaptability of the educational system to the needs and demands of individuals; 3) secular character of state and municipal educational institutions; 4) freedom and pluralism in education (implying choice of methods of teaching and teaching materials for teachers, choice of schools and programs for students and their parents, and overcoming dogmatism in general); 5) democratic principles of gover nance and autonomy of educational institutions (The Russian Federation Law on Education, 1992, Article 2). While these common principles were promulgated, the timing and policies relating to their introduction at the general and higher educational levels differed. Traditionally, higher education has enjoyed less control from the state in such areas as academic

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standards and research principles. Also, the State Committee for Higher Education was earlier than the Ministry of Education in initiating systemic work for enhancing the responsibilities of regions and individual educational institutions. However, more rapid were the moves to radically decentralize general education financing; the transfer of up to 80 percent of school funding from the federal to the regional level was initiated in mid 1990s (OECD, 1998). The intended benefits of this reform were ambitious, but its success was exacerbated by insufficient local resources, poor tax collection in the localities, many competing needs for these revenues, and a lack of clarity in delineation of responsibilities between the levels of government. Thus, general education encountered enormous hardship. This initial experience with decentralization cooled down the enthusiasm of many Rectors for increasing the autonomy of their institutions, unless the new freedom was to be accompanied by reasonable financial guarantees. Many of the Rectors feared that school-type “regionalization” would lead to parochialism and the financial starvation of educational institutions1. At the same time the prospects for institutional autonomy were looked upon as more remote than earlier since federal funding, though considerably reduced, continued to comprise a large share in overall institutional funding, and the center continued to exercise most of the authority over higher education. This chapter will focus on the changes of the past decade that effected the design, process and implementation of the policy toward increased institutional autonomy. It will first consider the change in the composition of the actors influencing higher education policy. It then will examine the implications of recent changes in the laws affecting governance, academic affairs, and the finance of individual institutions. And it will also consider some of the strategies individual universities implemented with their new autonomy. The chapter will conclude by outlining the major predicaments faced by Russian HEIs as they operate in the new environment that urges greater autonomy. In so doing, the chapter seeks to identify those tensions and “points of growth” where efforts might be best concentrated and where the assistance of non-government or international organizations are likely to have the most beneficial impact. NEW ACTORS CONCERNED WITH RUSSIAN HIGHER EDUCATION POLICY With the state devolving its monopoly on policy development and adoption since the early 1990s, the number of policy actors capable of influencing the implementation of the policy and principle toward

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greater institutional autonomy, increased. At the national level the major governmental body in charge of higher education is represented by the national state education agency; the national legislature is another major policy actor; and one of the most powerful interest groups on the national level is the Union of Rectors of Russian HEIs. Ministry of Education (MoE). The key state agency in charge of higher education is the Ministry of General and Professional Education (MGPE) formed as a result of merging the State Committee for Higher Education and the Ministry of General Education in charge of general and vocational education on August 15, 1996. The agency was established to oversee both general education schools and postsecondary educational institutions including primary and secondary vocational schools and HEIs. In March 2000 the agency was renamed as the Ministry of Education (Governmental Decree #258 of March 24, 2000). While the MoE has formal responsibility for higher education, the system of oversight of higher education by production ministries from the times of the centrally planned economy still persists. Thus, as of 1998, the MoE controlled only one fourth of the state-supported freshman class in the country, while three quarters of admissions were the responsibility of twenty-one national departments and ministries (Control Targets for Higher Education Enrollments in 1998, Annex #3, the MGPE’s Order #123 of May 5, 1998). By the Law on Education, the MoE is legally charged with the functions of developing national policy, licensing new HEIs, and enforcing academic standards over the whole sector of higher education —state and non-state. As for the responsibility of institutional licensing and accreditation2, the Ministry aspires to assign it to an agency that is independent from the Ministry (from the interview with Minister Filippov in Itogi, #2, January 15, 2002). Currently these functions remain with the accreditation panel formed by the Ministry and under its oversight, with the participation of national and regional legislators, members of the Union of Rectors, subsectoral, regional and professional Higher Education Associations, and the Association of Non-State Institutions of Higher Education (the MGPE’s Order #429 of February 9, 2000). As discussed in chapter 3, the policy of the state education agency was not clearly focused in the early 1990s. Regionalization was broadly conceived to follow the process of political decentralization and the emergence of the market economy. Nevertheless, the principle of increased institu tional autonomy was heralded, and the agency not only let specialized institutions upgrade to the university level, but also encouraged innovations, conducted seminars and helped in the dissemination of successful practices of institutional adjustment in the

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new open and market-operated environment. The shock of the abrupt reduction of state funds made many higher education insiders lament their newly granted freedom finding it primarily meant “freedom from state funding”. The state’s leadership in educational policy was somewhat compromised by the energy devoted to the consolidation of various agencies in the MPGE, the frequent governmental reshuffles under President Yeltsin, and the subsequent change of leadership of the agency (between 1996 and 1998, MGPE was headed by three different ministers). Below the Minister, the most frequent leadership change occurred in the position of the chief officer of the agency’s Economic Department. These changes caused considerable delays in the effective leadership of the national Ministry in the development and enforcement of educational policies. Legislature and lobbies. The Federal Assembly of the Russian Federation is the national legislative body. Its lower Chamber, the State Duma, plays an important part in enacting federal laws. Laws that directly regulate education (1992, 1996), higher education and research policies (1996), and other federal laws, such as annual state budgets, the new Civil Code (enforced in January 1995 and March 1996), the Taxation Code (enforced in January 1999 and January 2001), the Budget Code (enacted in July 1998), and most recently Land Code (enforced in October 2001) and the Labor Code (enacted in December 2001) that the State Duma adopts, have critical implications for the operations and choices of HEIs. Most of the important Codes were adopted after the major laws in education were enacted, and involved frequent conflict between the parties. The State Duma also passes amendments to federal laws, determines the size of the minimal salary and raises in public employees’ salaries (including those in public education), and holds hearings on various issues. The 1992 Law on Education set the major principles and goals for the entire education sector at the beginning of the national transformation. The state’s funding obligations for education that were specified in this law have not been realized by the federal government throughout the 1990s due to the drastic decline of public revenues and the “residual” principle of financing education (Eroshin, 1995; Lugachev et al., 1997). With privatization causing havoc for the heavily under-funded and crumbling secondary school system, the State Duma’s hearings on education in 1994 ended with a recommendation for the suspension of privatization in public higher education. The ban on privatization was included as a clause in the amended 1996 Law on Education (Article 39, Item 13). This somewhat conservative stance of the State Duma was attributed to the pro-leftist majority of its partisan membership. In a

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nation shaken by the protests of teachers who had been chronically underpaid (often by delayed paychecks) throughout the 1990s, the agenda of the Duma Committee for Education and Science was also influenced by the pro-leftist National Trade Union of Education and Science (Adamskiy, 2000; Dneprov, 2000). During the mid–1990s, politicians did not appear to place high priority on the issues critical for educators. Thus, the hearings on the long-term Federal Program of Educational Development were delayed for years; first submitted in 1994 to the State Duma, it was not discussed until 1999. However, with the looming Duma elections, the politicians could no longer postpone action on educational issues. Also by the late 1990s the positions developed in the Duma on education tended to become more inclusive and bipartisan as Russian education developed greater linkages with the social actors outside of education (Adamskiy, 2000; Dneprov, 2000). The 1997 attempt to develop a long-term program of reform was buried by bureaucratic resistance. Similarly, the radical higher education reform effort of the 1998 government of “young reformers,” while having many flaws and with no support from the higher education community, was brought to an end when the government was fired in August 1998 after Russia’s dramatic financial default. The increasing concerns of the public about educational access, equity, quality, and the value of education in the state funding priorities made politicians of all kinds bring up the educational agenda in the 2000 Parliamentary hearings. The newly elected President Vladimir Putin and his appointed Minister of Economic Development and Trade German Gref, in charge of the Center of Strategic Research, highlighted several long-delayed changes in education in the nation’s long-term strategic plan for modernization of 2000. Given the political procrastination and negligence of education in past years, the top-government-level push to address educational needs was much needed. As part of the overall governmental plan, the program of modernization of Russian education was developed by the MoE and the leading Russian economic think tank, headed by Yaroslav Kuz’minov, the Rector of the elite Moscow Higher School of Economics3. Kuz’minov also advocated the establishment of the Russian Public Council for the Development of Education—a broad political forum with the participation of many politicians and parliamentary members—and became its co-chair. Yet disagreements on this strategic program persisted. To reconcile conflicting positions on the proposed conception of educational modernization in Russia, a governmentally appointed working committee worked out a new edition of the program. The working group represented diverse public forces in educational policy: chaired by a regional leader with the

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participants representing the State Duma’s and the Council of Federation’s committees on education, leading politicians, Educational Trade Union, Russian Union of Rectors, Dneprov’s educational think tank and others. The new document integrated social and political issues in the program in such a way so as to overcome its economic bias (Dneprov, 2001). The program was approved by the State Council on August 29, 2001 (State Council, 2001), and on October 25 of the same year it was approved by the government (Vuzovskiye Vesti, #22, 2001). Other powerful national interest groups such as the Russian Union of Industrialists and Entrepreneurs (RUIE) made use of the shift in the national educational policy to extend its influence. With the emphasis on education in the socio-economic development of the nation and the support of the fittest HEIs, RUIE stressed the importance for the economy of a focus on primary and secondary vocational education. In 2001 RUIE also asked the MoE to better monitor the quality of training at the proliferated branch campuses of HEIs by requiring specification of the location of the campus and of the type of enrollment in graduate papers. The new requirement will be enforced by the time of graduation of the 2001 entering class. Union of Rectors of Russian Higher Education Institutions. At the level of upper institutional management, the Rectors of the Russian universities and HEIs exercised their right to enter associations by establishing a Union of Rectors and several associations according to their profile (of classical, technical, law and medical HIEs), sector (of non-state HIEs) and major programs (of teacher-training and engineering education)4. The Union of Russian Rectors, a non-profit organization, was established on November 25, 1992 at its 1st Constituent Assembly in Moscow. Mr. Victor A.Sadovnichiy, Rector of Moscow State University (MSU) was elected as its President in 1994 after serving two years as an elected Rector of MSU. Now the union is composed of Rectors of public and private HEIs as well as of some post-secondary vocational colleges. The union is not necessarily an independent body, as all the Rectors, while elected by their faculty, staff and students, are subject to final approval by the Minister of Education who retains a veto power. It is an example of a hybrid “public-state” body. In the context of increasing institutional autonomy from the direct intervention of the state, the institutional power of Rectors has significantly increased, sometimes opening room for abuse. The Union has held six all-Russian congresses: its 2nd emergency and 3rd Congresses helped to draw the attention of politicians to the long-overdue problems of higher education, and its 4th Congress was instrumental for preparing the new law on higher education. The 5th Congress concluded with an indication of no support

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for the 1998 governmental reform. At the 6th Congress, the governing board and its members were invited to serve as experts by the MoE and the Duma on higher education issues. Often labeled as conservative by the press, the group of Rectors is far from homogenous. Regional Governments and Governors. The role of regional governments in educational policy setting was expected to grow in as much as regional governments assumed greater authority in financing and deciding on the regional component of general education (up to 30% of the curriculum). Responsible and successful policies were developed in several of Russia's regions—especially those with committed governors who also had command of substantial local resources. New universities were opened and financed by regional governments in resource rich Tyumen’ oblast and Yakutia among other regions. Several regional universities like Surgut University in Tyumen’ oblast later obtained state accreditation and were upgraded to the federal status with the region continuing shared financing. However, as noted in chapter 3, as time passed, the formal role of regional governments in the financing and supervision of higher education declined. Yet when faced with the prospect of the closure of three public HEIs in their regions, the respective governors asked the MoE for the probation period of three years while committing themselves to the provision of the necessary funding (Itogi, #2, January 15, 2002). The legal tools of regional influence in higher education also diminished. Thus, by the 1992 Law on Education regional governments were given the right to license new HEIs, but as the number of local institutions mushroomed this competence was revoked by the national MoE in the 1996 amended Law on Education. The occasions of intervention of the regional government in the decisions of university Senates have not been reported so far except for the considerably visible case of Kazan State University in 2001– 2002 where, as reported by Morgan et al. (2001), the centralized government of the Republic of Tatarstan appeared to favor a certain candidate for Rector, while a very strong incumbent had to decline from running for reelection. Students. Since the fight of students to defend the nascent Russian democracy against the doomed coup in August 1991, Russian students have not been active. Sporadic attempts by some activist groups did not gather nation-wide student support until 1998 when the student movement was re-formed under the leadership of the student trade union. In the late 1990s and the early 2000s, the reports of student strikes in cities and towns across Russia’s regions were not uncommon. Students occasionally protested against the institutional

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increase of tuition, threats to abolish state-provided stipends, and their negligible level. THE FOCUS ON AUTONOMY The need for educational reform and its agenda was developed in the early years of the perestroika period (1986–1990) as part of the nation’s quest for liberalization of individual creativity and increased individual responsibility. These were to be achieved by establishing the rule of law, more democratic organization of the society and a more efficient economy. As discussed in chapter 3 the rationales of this deep and large-scale transformation of the society had affected policies in all the spheres of change. Thus, in full accordance with these rationales, autonomy of all educational institutions from the centralized party-state control was identified as the guiding principle of the post-communist state educational policies. The significance imparted to these principles was so great that they were fixed as such in the new Law on Education of 1992 in its opening articles (Article 2 as referred above). Though the principle of autonomy of an educational institution was not further defined in the Law on Education, the law was innovative and comprehensive in that it granted new authorities and defined responsibilities of educational institutions while framing them by larger systemic issues such as the purpose of education for individuals and the society, the system structure that best facilitates its purpose, principles of governance of the educational system and sharing competencies between the central and regional authorities, mechanisms and sources of institutional funding fit for a more market-oriented context, students’ rights in education and state guarantees. Devolution of authorities and responsibilities from the state to the institutional level was expected to promote more effective decisionmaking, that is, to better attend to the existing demands and to shape potential knowledge-related demands of individuals and local communities—through increasing access, diversification and flexibility of programs, closer integration with the local labor market, research advancement and cultural cohesion, and ultimately through its contribution to local stabilization and development. Concerning the new authorities for individual institutions Article 32 of the 1992 Law on Education stresses in particular that: An educational institution is independent in providing education and training, in hiring its staff, in doing research, in keeping finances and other activities defined by the legislation of the

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Russian Federation and the educational institution’s Charter (The Russian Federation “Law on Education”, 1992, Article 32, Item 1). The article further defines substantive autonomies and responsibilities of institutions relating to its goals and programs as well as procedural autonomies necessary to achieve these. In addition, Article 13 indicates that a set of rules concerning education and training, research, governance, budgeting, personnel policies, and the relations between state (public) edu cational institutions and their founder (State Committee for Higher Education) is to be specified for each educational institution in its Charter, which was granted by the ministerial decree in 1991. Article 33 specifies that an institution is granted the rights of a legal entity necessary to independently operate in the legal-economic space of organizations and firms at the moment of its registration, including, as stipulated by Article 43, the right to draw its own budget, to open a bank account, and to borrow from banks. Article 45 grants HEIs the right to charge tuition fees, and Article 47 specifies the right of a HEI to charge fees for the delivery of other products, to lease its assets, to establish its own enterprises and to run businesses. Article 57 grants individual institutions an authority to directly form linkages and draw contracts with foreign institutions and organizations. These authorities were previously either non-existent or an exclusive privilege of the state. Alongside new institutional competencies the law emphasized institutional responsibilities. These included, for example, procurement and maintenance of the necessary equipment, maintenance and repair of buildings according to the state and local standards and from the institution’s own resources (Article 32). Educational institutions may be closed if they fail to renew their suspended licenses in case of failing to meet state curricular standards and the Russian Federation laws (Articles 32 and 33). Institutions are held responsible for ensuring basic rights and freedoms for their students and for encouraging professional committees for the teaching staff (Article 32). They are required to annually report to the founder on their revenues and expenditures (Article 42). The following section in this chapter discusses these newly granted authorities specified in the Law on Education from the point of view of major areas of university discretionary decision-making. Their implications for institutional behavior are then outlined. Here, it must be stressed that the Law on Education declared autonomy of educational institutions both as a guiding principle of educational policies and as a policy outcome in itself. In other words, it clearly

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intended to increase the discretionary and responsible decisionmaking of HEIs. From this “double” use of this policy concept, two other features characteristic of the Russian higher education context stemmed. First, the principle of institutional autonomy was instrumental in achieving the larger goals of higher education transformation in the 1990s’ Russia. Second, the instrumental nature of the policy toward institutional autonomy intricately linked its outcomes with the outcomes of other policies. Third, since policy stakeholders constructed these intended policy outcomes, the increased number of stakeholders at the national arena led to a multiplicity of interpretations of the policy. This made the policy toward institutional autonomy at best ambiguous. Indeed, it can be said that the declared policy toward institutional autonomy provided a logical instrument for meeting the new goals of higher education as summarized in table 4.1 below. These goals indicated a determination to overcome the outdated features of the higher education system and, at least in certain respects, to “catch up” with some of the latest trends and developments in higher education around the world. Institutional autonomy was also expected to advance higher education under the condition of stringent austerity— caused by a shortage of public monies and by the enormous decline of the economy in the early 1990s. At the same time, it was recognized that the policy of enhancing the autonomy of individual higher educational institutions could lead to undesirable outcomes: fragmentation of the higher education system, excessive competition and replication of programs, growing inequality among institutions, which was likely to come with increasing local differentiation of financing. In the Russian context in the 1980–1990s the economic effects of increased efficiency and productivity were, as shown in chapter 3, secondary to the democratization rationales. Thus, viewing institutional autonomy in Russian higher education as both a policy tool and an intended policy outcome helps explain why it was often paired with the goal of constructing a democratic culture of governance including the goal of enhancing academic freedom. The 1992 Law on Education and its 1996 edition proclaimed institutional autonomy as a guiding principle of educational policies to be coupled with the democratization of governance. A number of key decisionmaking authorities were thus shifted to the institutional level. The 1996 Law on Higher and Postgraduate Professional Education (1996) introduced a special article (Article 3) on autonomy of HEIs and academic freedom. A broad definition of institutional autonomy was borrowed from Article 32 of the Law on Education. In addition, the concept of responsibility of a HEI before “individuals,

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Table 4.1. Higher Education Reform Goals

society, and the state” was emphasized. The responsibility to insure that the behavior of HEIs was commensurate with the goals declared in their Charters was given to the founders of HEIs and the state licensing body, both of which coincided with the state higher education agency (State Committee for Higher Education and later the Ministry of Education) for state (public) HEIs. Likewise, the article emphasized both academic freedom for professors and students in pursuing truth and academic responsibility for ensuring academic freedom. However, the concept of academic responsibility was more of a moral declaration rather than a legal term since the Civil Code did not stipulate such a kind of responsibility. The Russian professoriate expressed little interest in university autonomy in the late 1980s, but the concept was found increasingly important by the early and mid–1990s as the concern for the decline of financial support of higher education mounted. Thus, according to the survey completed in 1992 as part of the International Survey of the Academic Profession in the fourteen country settings (Boyer, Altbach, and Whitelaw, 1994; Altbach, 1996), the Russian academics

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voted overwhelmingly for the support of academic freedom, though they did not welcome institutional autonomy leaving to the government the responsibility for determining the overall purpose and policies for higher education (90% of the respondents) and funding responsibilities (Boyer et al., 1994, p. 98). The Russian respondents also indicated concern over the lack of democratic culture of governance that underpinned the exercise of academic freedom. Of all of the national samples except Germany, the Russian sample was least certain that institutional administration supported academic freedom (26%) (p. 98). In another survey of the Russian professoriate and higher education administrators in twenty-two Russian cities conducted as a part of the state funded program, the issue of university autonomy vis-à-vis state control came to the front. The majority of the respondents (79%) voted against the petty tutelage of the centralized administration and for the autonomy of HEIs with regard to a) personnel policies, b) institutional reallocation of state funds for research, c) admission policies, and d) decisions concerning opening or closing faculties and programs of studies (Higher education: The conception and practice of perestroika, 1993, pp. 20–46). Yet, it is significant that 12% of the respondents favored somewhat restricted centralized governmental authority in the areas of the state’s certification of specialists and its accreditation of HEIs. These attitudes, first and foremost, reflected the increasing concern about the dramatically reduced financial base for Russian higher education. Almost 9% of the respondents argued for the radical devolution of the majority of functions, rights, and powers to the sub-institutional level of faculties and departments. Finally, in the speeches of Rectors of public HEIs, three major manifestations of university autonomy have been referred to as: 1) the administrative discretion of institutions to run their own affairs, 2) a democratic form of collegiate institutional self-governance through elected representative bodies, and 3) academic freedom7. Thus, at the International Seminar on “University Autonomy and Academic Freedom” in June 1996 Rector of St. Petersburg State University Lyudmila A.Verbitskaya stressed the multiplicity of approaches to the concept and practice of university autonomy, at the same time calling for a clearer distinction between these approaches and especially for a firmer delineation of university autonomy and academic freedom in the Russian educational law (Verbitskaya, 1996, p. 293). The new Law on Higher and Postgraduate Professional Education of July 1996 did not unequivocally meet this expectation. However the exposure to the western “science of university management” during international meetings, visits and exchanges of university leaders and academics (such as a Conference of Rectors of Europe’ workshop for western CIS

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member universities “From urgency to strategy: The dilemma of university management” at St. Petersburg University in May 1997, a series of seminars on university governance and management for Russian higher education as part of the Universities’ Project of the Salzburg Seminar8 since 1997 and others) had a large impact on increasing awareness of the practice and institutional implications of university autonomy. According to Rector Verbitskaya, over the past decade of transformation, Russian universities lost reliable financing, which characterized the Soviet system, but gained freedom to choose and take decisions in their philosophy, policy, and strategy. Now we find ourselves in a completely unfamiliar situation and are learning to use it by living in it. There is much to learn in the sphere of strategic planning, fundraising, organization of business, etc. The moment is not very favorable. But there is no choice. We must find our way in this new world, which offers us new freedom and autonomy (Verbitskaya, 1996, p. 294). In the late 1990s the term “university autonomy” became less frequently used especially with the state reclaiming several of its direct control functions. However, the practices, new thinking and leadership styles, that emerged with the devolution of important decision-making authorities to the level of universities, continued to develop. CHANGES IN LEADERSHIP, GOVERNANCE, AND PERSONNEL POLICIES This and the following sections discuss the changes introduced by the educational laws—Law on Education (1992), the amended Law on Education (1996), Law on Higher and Postgraduate Professional Education (1996)—and a governmental decree Standard Statute about an Institution of Higher Professional Education (1993), after which individual university Charters were modeled and which served as one of the sources for the 1996 Law on Higher and Postgraduate Professional Education. These legal changes are discussed according to the key areas of institutional operations where independence from outside control can be exercised. The changes introduced in the early 1990s regarding how universities are to be governed, who leads a university and who decides on hiring, promoting or dismissing staff are summarized in table 4.2 below. In particular, a university Rector is no longer appointed centrally but is to be elected by an institutional conference

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representative of various constituencies of a university community: teaching professors, research staff, administration, students and support staff. The specific procedures of Rector’s elections, the exact duration of a Rector in the office (not to exceed 5 years) and the major principles of institutional governance are to be defined by each university itself in its Charter—an institutional “common law” about its goals and a basic set of rules and procedures. To promote democratic principles of governance, the state requires an elected representative self-governing body—Academic Senate—to be the major university governing body, and Rector as a chief executive officer, whose instructions and notices are mandatory for all university members (Standard Statute about an Institution of Higher Professional Education, 1993, Article 57, 59). However the state left it to the university to decide in its Charter how exactly the powers are distributed between the Academic Senate and the Rector (Article 59). This decision together with the rules on membership in Academic Senate opens the way to the centralization of newly granted powers in the Rector’s hands or to the predominance of senior administrative staff in institutional decision-making. Both trends have been noticed in Russian higher education lately9 (see, e.g., Lugachev, et al., 1997 on the senior administration powers at the detriment to the voice and interests of junior faculty members and other staff). The way they were or were not played out in individual universities is one of the areas considered in the case studies of three universities in chapters 5–7. Interestingly, as an indication of the increasing authority of Rectors in their universities, the national agency10 in charge of higher education had to issue notices about the approaching expiration of Rectors’ terms at individual HEIs and to set deadlines for the coming reelection11. At least three important implications for the university personnel practices should be pointed our here. First, the establishment of contract-employment in the early 1990s has had the most far-reaching consequences, although this has not yet been fully appreciated. If no proper checks and balances are applied inside a HEI, a Rector’s growing authority over academic appointments can lead to serious abuses. Second, teaching staff as public employees have been very rarely laid off by the internal institutional process, in no small measure because the procedure is subject to many conditions stipulated in the Labor Code. In the revised Labor Code of December 2001, some of these conditions are lifted. This leaves open the question whether firing decisions in the future will not be arbitrary and will remain prudent. The former is because of the increased power of Rectors, and the latter is because the decision to keep a position but not fill it is tempting to a university as a measure for retaining state

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Table 4.2. Leadership, Governance and Personnel Policies

appropriations to the salary fund. Third, with the lack of rigor in peer review among faculties of the same university and across various HEIs and the continuing trend of in-breeding faculty members, it remains to be seen how the future personnel decisions will serve to effectively and efficiently achieve the goals of universities. INCREASED AUTONOMY IN TEACHING AND RESEARCH Most appealing to faculty members are the changes over the past decade in the sphere of academic and research matters. These are closely related to the enhanced values of academic autonomy and freedom (see table 4.3). The introduction of nation-wide standards for students has played a significant role in preventing disintegration of the higher education system, though the content of standards is continuously subject to criticism by the academic community. The major concern is whether standards are going to be replaced by mere minimal requirements for the reason of financial shortages. Considerable financial discretion is needed to support excellence and diversity of academic programs beyond the minimal requirements. In addition to federal standards approved by the Ministry of Education, each institution established boards on teaching methods and educational technologies (UMOs) by broad fields of studies. The Ministry of Education also encouraged similar national boards and approved assign ment to keep disciplinary excellence to leading HEIs. This led to a double system of academic quality control at the national

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Table 4.3. Curriculum and Standards for Students

level, which involved direct or indirect oversight of the center. While many Moscow-based institutions were assigned as seats of academic program standards, faculty and leaders of HEIs in Siberia and the Far East complained about bureaucratic hurdles involved in securing approval from Moscow-based Ministry and UMOs. They sought more autonomy in opening new programs and courses, as well as in granting advanced degrees without confirmation from the center. At the same time the role of academic professional associations in guarding program standards remains nascent, even though during the 1990s there were at least thirteen newly formed associations of HEIs by fields of education and training, such as the associations of classical and technical universities, engineering education, teacher training, medical training, training in automobile design, construction, and economics12. The ultimate association concerned with these matters is the Russian Academy of Sciences. The center no longer downloads admission targets to public institutions, but consults with institutions on their enrollment projections so as to allocate public funds accordingly. The admission targets are required not to exceed the maximum admission quota determined as a result of state licensing. Tuition-charged admissions in state HEIs were controlled by quotas from the national agency in

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the early 1990s, the cap for paid admissions in public universities was set by the 1996 Law on Education and lifted in 1998. INSTITUTIONAL DISCRETION IN FINANCIAL MATTERS Another important area of autonomy of an institution lies in its financial authority. The institutional right to decide on how to spend and reallocate funds comes with the responsibility to do it efficiently, to raise additional revenue, and to maintain a balanced budget. The 1996 amended Law on Education unambiguously declared the right of HEIs to allocate and reallocate funds irrespective of their source as institutions see fit, including the portion of funds for salaries and bonuses (Article 42, Item 5). In addition it allowed universities to rent out the land in their use (Article 39, Item 11). These new authorities were reiterated in the 1996 Law on Higher and Postgraduate Professional Education (Article 28, Item 4, Article, 27, Item 4). In exchange the amended Law on Education reiterated the institutional responsibility for daily operations and to maintain the premises and equipment. It also obliged regional and local authorities to mediate issues of services and procurement from the local providers (Article 44). Some Rectors of Russian universities welcomed these new authorities no matter how challenging they were; others unwillingly accepted them as a temporary policy. Many new financial authorities have been shifted down to the institutional level (as summarized in table 4.4), though some appear to be halfmeasures in practice. Thus, for example, lump-sum funding typically gives institutions the right to reallocate funds irrespective of their source among spending categories in an efficient manner. However, between 1995 and 1999 state allocations to public higher education were significantly reduced to cover only salaries and student stipends and allowances—those spending categories that could not be reallocated by law. Strapped for money, many universities were unable to repair their crumbling buildings and to replace obsolete equipment. As the rates for utilities and phone lines skyrocketed with the liberalization of prices and no state support for the maintenance of public HEIs, it appeared that the new responsibility to maintain institutional premises, which came together with the declared autonomies, backfired. While the State Committee for Higher Education and, later, the MGPE tried to keep a close eye on the institutionally generated resources and their spending, public universities accumulated debts for utilities and wrote these debts to the state for not fulfilling its obligations. The finger was clearly pointed to the state in the addresses of such an influential university

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Table 4.4. Financial Decision-Making

association as the Union of Rectors of Russian Universities, and the appeals to the government and national legislature by the Educational Trade Union. Some Rectors, eager to make their way to the top of higher education hierarchy, questioned the efficiency of allocations of state funds. In particular they criticized the state commitment to subsidize students through stipends and allowances that took almost one third of all state allocations to higher education but were grossly insufficient to meet meritor need-based goals of student aid (Poisk, 1996, #19, p. 3). Although public HEIs were both allowed and encouraged to search for additional revenues to offset the declining allocations from the state, the bulk of the resources (instruction-related expenditures) came from the federal government—at least for the period from the initial years of new financial autonomy until approximately 1999. The proportion of self-generated revenues gradually increased for an average HEI—from 10–12% in 1992–1993, 25% in 1995, to 56% in 1998. It was not uncommon for large public universities in 1999–2000 to self-raise revenues in the amount equal or close to the state appropriations as a result of institutional effort and continuos decline of state support in real terms. In fact, state appropriations adjusted to

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inflation continued to decline during the last decade, even though there was a significant increase in state allocations in nominal terms in 2000–2001. Public funding nowadays meets only 30% of the needs of HEIs (from the interview with the co-chair of the Russian Public Council on the Development of Education Mr. Kuz’minov, Trud, #48, March 21–27, 2002). According to the Minister of Education Mr. Vladimir Filippov, state allocations in higher education need “to continue to increase up to 50% annually for the next 7–8 years in order to achieve in real terms the level of higher education state financing of 1992” (Itogi, #2, January 15, 2002). Russian universities, state and non-state alike, were independent in setting their tuition fee levels, and the January 1996 amended Law on Education stipulated that state allocations could not be reduced to public HEIs because of their self-generated income (Article 41, Item 9). However, as a setback for the Rectors searching for additional revenues, the amended Law put a cap for state institutions on tuitioncharged enrollments of no more than 25% of annual admission in the most popular and revenue-yielding fields of law, economics, management, and public administration (Article 41, Item 10). Thus, the law set Rectors to search for the legal loopholes; in particular, the cap was legally applied to physical persons and non-state organizations, leaving state organizations as uninhibited contractors for paid educational services. This became a targeted policy at Kemerovo State university (from the interview with Rector Yuriy Zakharov, June 1997). The August 1996 Law on Higher and Postgraduate Professional Education did not specify the cap, but stipulated that tuition-charged admissions in state HEIs must not exceed the maximum admission capacity determined by the institutional license and should be approved by the respective overseeing state executive body (Article 29, Item 2). The terms and conditions (including the fee amount) were to be determined by the institution itself (ibid.). Some HEIs only partially obeyed the cap having averaged the number of tuition paying students for the total class rather than by field. The cap was finally lifted in 1998. CHANGES IN THE RATIONALE FOR THE ALLOCATION OF CENTRAL FUNDS Under the old regime, all institutions of higher learning were funded from the state budget, which distributed these resources on the basis of normative financing. A set of norms was developed to make state appropriations from the state budget. Almost two thirds of the total current and capital costs in 1950–1959, for example, were to cover

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salaries for teaching staff and support/maintenance personnel and students’ grants (Nozhko, Monoszon, Zhamin, Severtsev, 1968, p. 167). Educational expenses were financed according to the centrally planned enrollments and tied to the faculty/student ratio. This ratio was fixed for each type of HEIs and student enrollment status (fulltime, evening, by correspondence): for example, 1:10 for universities, 1: 12 for engineering schools, 1:14 for certain specialized institutes (e.g., of economics), and so on (p.168). Administration and maintenance costs were funded through a set of allowable expenditures per square meter of building area, heating unit. Wages of maintenance and support staff were predetermined by the availability of physical plant and facilities. As a result the differences in unit costs among institutions reflected variation in capacity to fill allocated staff positions. Thus, the use of norms constrained the efficient allocation of resources in at least two ways: 1) they were tailored to the existing capacity of the facilities (including dormitories, student canteens, gyms, etc.), not to the actual needs of users; and 2) since the very existence of facilities justified a recurrent budget to maintain them, there was an incentive to keep underused facilities open. The allocations from the state budget were itemized, not allowing reallocation from one category to another or carry-over from one fiscal year to another. The 1986–1987 higher education reform intended to make education better serve the economy and promote industrial technologies through industry-education linkage. This linkage was also to provide an additional source of finance for HEIs. Thus institutes and universities were encouraged to enter into long-term collaborative research and development activities through the establishment of joint scientificinstructional-production combines. They were to be funded partly from the national budget, and partly by the firms and factories themselves, creating a range of self-financing applied activities at HEIs. This reform effort failed mainly because of conservatism inherent in the educational system and the basic conservatism of the social and economic system at large. On the one hand, centrally controlled enterprises had little incentive to change and did not place linkages with HEIs on their priority lists, and on the other hand resources generously poured to improve the quantity and quality of research conducted at HEIs paid off on a mixed-success basis. According to the 1989 governmental estimate 60% of all research was conducted by 60– 70 of the leading HEIs out of a total of more than 800 nationwide (Kerr, 1992, p. 150). Stephen Kerr referred to the 1986–1987 reform effort as a kind of ‘last gasp’ of old-style Soviet educational decisionmaking, and the predecessor for changes under way that would mold the educational system into new forms (Kerr, 1992, p. 146).

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Self-financed applied research sharply decreased during the 1990s, especially affecting engineering and polytechnic institutes that were largely dependent for their research moneys on contracts from industries. Simultaneously the flow of resources from the state budget also shrunk. Universities and institutes had to face these financial challenges largely on their own. THE SERVICE TRADITION SHAPES THE RESPONSE The Russian system of higher learning was established in the 19th century under the influence of the German and French examples. It inherited centralization in governance and control from the French system, and following the German example it was capped with elitist universities devoted to the non-utilitarian goals of the pursuit and dissemination of pure knowledge. More practical training was done outside the universities in a variety of technical institutes. So, from the very start Russian universities were conceived as ‘ivory towers’13. However the status and privileges of the academic intelligentsia entitled them both to pursue pure learning and to strive for a more ideal model of society that might enhance the well-being of the people. In the Soviet era the social mission of universities was significantly enhanced. The system of higher education expanded greatly, increasing access first and foremost to the new technical and specialized institutions. There were as well attempts to vocationalize the university curricula. From the 1950s onward with a new surge of educational expansion, the university sector was enlarged. The socalled second-generation universities were established, many of them as a result of upgrading pedagogical institutes in the provinces. At the same time courses on pedagogy were mandated as a part of the curricula of the older classic universities (Korol, 1957). The universities were required to train not only researchers for the academy and industry but also teachers for schools. University diplomas both signified mastery in a discipline or field and certified occupational preparation—in most cases as a teacher (except for fields with a professional orientation such as law and economics). The faculty members were expected to do teaching, research, and public service within and outside the university. This service was considered a voluntary activity, but at the same time universities and the professoriate felt pressure to give something to society in return for the relatively good life and prestige they enjoyed14. Public service did not presuppose monetary compensation, but rather it was nourished by the culture of commitment to collective well-being. The faculty were expected to deliver public lectures; to conduct

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preparatory courses to enhance access to higher education for rural and working-class youth (Avakov, Buttgereit, Sanyal, & Teichler, 1984, p. 253); to hold evening classes for part-time students; to organize extension courses in popular ‘occupations’ such as leadership skills, communication skills, and the art of public speaking; and to participate in informal educational networks (the most popular one was known as “Knowledge”). The faculty of various fields and disciplines at universities were encouraged to cultivate linkages with local schools, libraries, museums, sport clubs, and industrial enterprises. Students were expected to do professional internships in the local community. These practices, based on the knowledge and expertise of the professoriate and students, were mostly delivered free of charge to the surrounding communities. These practices were largely supply-driven and often very inefficient. Extending the university faculty’s expertise for the larger audiences within and outside the university was encouraged by the party-state, which annually asked for a listing of accomplishments. The pressure from above often meant that outreach activities were developed with little consideration of local knowledge needs. Even so, among the outreach efforts were many successful stories where the innovativeness, creativity and enthusiasm of faculty initiators led to a productive partnership with community leaders. The recent fiscal stringency of the federal government with regard to Russia’s universities stems both from the depressed economy and the competing priorities for public spending. Among the many responses of the universities has been the tendency to expand services and to charge fees for the services that used to be free. It may appear in this regard that the service university’s ascendancy was born entirely out of necessity. However, it also may be that recent changes in the organization and delivery of services may create new opportunities for universities to better meet their ultimate goals of advancing science and arts, to better serve individuals, and to promote the socio-economic and cultural development of Russia’s regions. In this section several new trends in instruction and research are presented drawing both on national data and on the experience of the three universities to be discussed in chapters 5–7. INSTRUCTION-RELATED TRENDS Six trends in the delivery of instruction-related services will be highlighted below. They refer to the expansion of university enrollments largely due to fee-charged admissions, to the broadening knowledge base of instruction, to developing school-university partnerships, to encouraging sponsorships for students, to offering

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non-degree and tailor-made courses, and to introduction of fees for foreign students. 1) Universities have opened their doors to more students. This is in itself an important trend, which exemplifies that professoriate and university leaders have become more responsive to the local needs and perspicacious in cultivating these demands. This shift is most conspicuous if compared with much earlier or recent trends: 1) during the Soviet period university enrollments were centrally controlled not to exceed 10–11 percent of the total higher education enrollments (Goskomstat, 1994, p. 134) without consideration of local demands; 2) in the 1950s–1960s the higher education participation was boosted largely because of the expanded access to technical and engineering HEIs, which ended up with narrow-specialization technical training and witnessed a considerable drop of applicants in 1985–1992. Now HEIs are turning more to their immediate customers, rather than being receptive only to the centrally mandated directives. Many universities and polytechnics recently updated as universities have expanded their course offerings in general education emphasizing the humanities and social sciences cycle, foreign languages, information technology and basic economics. Public universities started charging tuition in 1991–1992 with the establishment of the market economy and the emergence of the first private HEIs. Both were legalized by the 1992 Law on Education. In the early 1990s the State Committee for Higher Education, a state agency then in charge of higher education, recommended that feepaying admissions in public HEIs should not exceed 10% of their total admissions. In 1994–1995 academic year public institutions of higher learning admitted 46,000 students, or 9.6% of their total admission (Prelovskaya, 1994, p.17) on a fee-paying basis. The same year private HEIs with a state-license enrolled a greater number of students for a fee than the public HEIs totaling 58,800 students. The competition between publics and privates for students, who could bring tuition revenue, became formidable. The pricing in the most sought after fields, such as economics, management, law, and foreign languages, was driven by demand rather than costs incurred. Tuition revenue quickly became the second largest revenue source after the governmental allocations in public HEIs. Therefore, the 1996 establishment of the cap by the government on tuition-charged admissions of 25% in the most revenue-bringing fields in order to control demand-driven programs (legalized in the 1996 amended Law on Education) was not welcomed by the Rectors of public HEIs. Private HEIs were not restrained in such a way (e.g., at the time in Moscow there were 98 public HEIs and more than 100 private) and they were able to generate larger revenues through offering

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Table 4.5. Russian Higher Education Enrollment (in Thousands of Students), by Type of Higher Educational Institution (HEI) and Student Admission Status (1981–1999)

Sources: data are cited or computed from Goskomstat, 1996, 1996a, 1997, 1998, 1999, vol. 2.

individualized and tailor-made programs. Nevertheless, from 1994 till 1995 the tuition-charged admissions at public HEIs more than doubled, comprising 15% of their total freshman class. The cap was lifted in 1998 further propelling the increase in tuitioncharged admissions at public HEIs. In the 1998–1999 academic year more than a third (34.6%) of the nation’s freshman class in public HEIs were admitted for a charge. In 2000–2001 tuition-charged admissions almost equaled admissions with full state support, comprising 48.5%15 of the public higher education admission class. The Ministry of Education projected to admit 52.8% of freshmen at public HEIs for fee in 2002 (computed from Komsomolskaya Pravda, # 51, March 22–29, 2002). Overall, as of the 1998–1999 academic year, 28.3% of the nation’s higher education enrollments were charged tuition fees. This was an almost six-fold increase since 1993 (see table 4.5). After a dive in the enrollment in the public (state) sector in the 1994–1995 academic year as compared to 1981–1982, the highest enrollment level in the Soviet period, the admissions to state higher education grew by almost one third (32.1%) in four years by 1998–1999. Four fifths of this growth was accounted for by the increase in tuition-charged admissions in state HEIs. This is an impressive development for such a short time span. The distinctive feature of tuition-charged enrollment in Russia today is that the majority of tuition-charged students (three-quarters) are in public rather than private HEIs. As of 1999 the private (non-

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Chart 4.1 Tuition-Charged Enrollment, by Sector (State and non-State) as Percentage of Total Higher Education Enrollment (1993–1999)

state) sector accounted only for 7% of the nation’s higher education enrollments, while 75.3% of students who paid for their studies were enrolled in public HEIs. These statistics were not readily available to the public until the year 1998 when a more radical higher education finance reform was contemplated. Remarkably, over the past six years not only the absolute numbers but also the rates of increase in tuition-charged admissions were much higher in state higher education institutions than in private (nonstate) ones. This trend is illustrated in chart 4.1 and table 4.6. These enrollment trends show how public HEIs have become dependent on tuition revenues, the major source of their income after the state allocations. The other pattern in admissions to public HEIs is also worth pointing out. Not only tuition-paying students are mostly responsible for the increase in admissions at public HEIs, but that tuition-charged students are increasingly recruited for part-time rather than full-time studies. The latter is a function of expanding educational services to a new market niche (in particular distance learning expanded the reach to distant locations and to serve nontraditional students) and of saturating the capacity of HEIs for fulltime enrollments. This pattern is illustrated in Chart 4.2. An almost two-fold increase in annual admissions in public HEIs between 1995 and 2000 was overwhelmingly (89.3%) accounted for by the increase in tuition-charged admissions. Part-time (including by correspondence and distance learning) fee-paid admissions accounted for 57% of this increase, while full-time fee-paid admissions accounted for 35%, and state-supported admissions for 10.7% of the increase. Overall, in both public and private higher education, annual admissions reached their lowest number in 1992 and increased in 1999 largely due to the expansion of part-time and correspondence admissions (see chart 4.3). This pattern is especially important

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Table 4.6. Increase in Tuition-Charged Enrollments (in Thousands of Students), by Sector (1994–1999)

Chart 4.2. Admissions in Public HEIs by Source of Support and Student Admission Status (in Thousands of Students) (1995–2000)

Legend: FT—full-time admission status; PT—part-time admission status. Source: Compiled from State Council of the Russian Federation, 2001a, p. 55.

because of the looming demographic decline of traditional age applicants as a result of the sharp decline of the birth rate in the late 1980s and 1990s. The demographic trends moved into the focus of the educational agenda in 1998 in view of the sharp decline in primary school enrollments that came to be noticed that year. It is estimated that higher education will be hit by the demographic decline after 2005. The de facto division of students into two categories, those charged with tuition fees and those not so, has stirred up some controversy in the Russian academy. Professors ask if it is appropriate to select students on a basis other than merit. But those who worry about the differential ability of the two groups of students often find that those students who are charged tuition are more hard-working and get better academic results which is so critical in the freshmen years. However, the shift to fee-based education faces inevitable limits as many young people lack the resources to pay tuition fees. Addressing this worrisome trend, Kemerovo State started an experiment in the mid-1990s with a short-term tuition-saving plan whereby parents were encouraged to set aside money before their children applied for university admissions. This plan appeared to be relatively beneficial to all of the parties involved—the families of applicants, the university itself, and the private bank as an intermediary of financial operations. As the government endorsed the Strategy for Modernizing Education,

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Chart 4.3. Admissions to Higher Education in Russia by Student Admission Status (in Thousands of Students) (1988–1999)

Source: Goskomstat, 1994, p. 135; Goskomstat, 2000, p. 205.

approved by the State Council on August 29, 2001 (State Council, 2001), the mechanism of disbursement of state funds in higher education based on student academic performance and awarded to students rather than institutions in a voucher-like fashion would require middle- and low-performing students to co-pay for their studies in universities. Responding to this, leaders of public HEIs argued for the need to complement this mechanism with the introduction of deferred paying programs from graduate tax to income contingent loans, though the differences between the two were not outlined (Vuzovskiye Vesti, #11, June, 2001, p. 2; #23, December, 2001, p.2). 2) The second innovation in instructional services seeks to broaden the knowledge base and skills of individuals and to increase their employment chances. Working across the units, for example, Kemerovo State has developed a mechanism that enables student to pursue double majors (e.g., in macroeconomics and foreign languages proficiency, economics and business administration, biology and psychology, educational psychology and social sciences, natural sciences and information systems). Special faculties were opened at St. Petersburg State to provide custom-made programs for those who have already obtained a higher education degree. Novosibirsk Technical introduced a comprehensive program of courses in the humanities and social sciences to be integrated with technical and engineering training. The faculty of general technical education was opened to meet the needs of part-time and distance-learning students in upgrading their technical skills. 3) There is a trend for universities to deepen their relationships with local schools of general education. A good case in point is Kemerovo State, which is working on the conception of continuous education to encompass education and upbringing from kindergarten to adult education. Of special interest is the practice of reaching out to

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selected city schools (gymnasiums and lyceums). Professors from various fields such as physics, mathematics, foreign languages, history, philology go out to conduct special courses for students. Schoolteachers attend university courses for re-training, and get consultation and expert evaluation for certification of new school programs and courses. Kemerovo University Center for Continuous Education established linkages with schools and colleges in other towns of the Kemerovo region which are to grow into campuses of the future regional comprehensive university system. The results of the Center for Continuous Education have attracted international attention; in 1994, 40 percent of the Soros grants for excellence in teaching in the region were granted to school-teachers affiliated with the Center though these teachers constituted only 0.5 percent of the regionally employed teachers. 4) Education and training have come to be contracted by the current and future employers of students. For instance, fifty four percent of the 1995 Kemerovo State graduates were trained on contract with their future employers. Distinct from contracts to support degree training, there is increased demand for contracted short-cycle and tailor-made courses. To meet the increasing demand for retraining, the Center for In-Service Training of Kemerovo has grown from its narrow profile of retraining teachers and educational administrators into a Regional Multi-Profile Division of Further Education. The Division is conceived as a part of a strategic plan of creating regional continuous educational system with university as a center in order to meet the educational needs of the residents throughout their life span. At St. Petersburg State a special custom-oriented Masters’ Program in Public Administration was developed in cooperation with the City Council. 5) Numerous non-degree courses have become a common practice at HEIs reflecting the initiative and creativity of the faculty. These courses range from sociology and basics of psychological inquiry to foreign language proficiency, computer skills, and elementary economics. The course offerings especially highlight those areas of knowledge that were ideologi cally biased under the older system of education, but now are open to the plurality of conceptions and approaches. In this regard the humanities and social sciences turned out to be the most rewarding fields for experimenting with new methods for teaching critical thinking. And, finally, 6) fees have been introduced for foreign students at competitive prices but at a much higher rate than for domestic students admitted beyond the quota for state subsidized seats. Yet the deteriorating standard of living has led to a decrease in the number of foreign applicants. Although the number of foreign students (excluding

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Commonwealth of Independent States countries) reached 59,900 students in 1999, that is, a twofold increase as compared to 1994 (Goskomstat, 1996, p. 188, Goskomstat, 2000, p. 208), it is far below the number of students who studied in 1991 in the Soviet Union— between 125,000 and 130,000 (MacWilliams, 2002). In addition, students of color became targets for attacks by extremist youth groups (ibid. pp. 46–48). RESEARCH-RELATED TRENDS The expansion of public service has also has become notable in the research-oriented area. Among the recent changes at least three trends deserve note. Perhaps of greatest importance are new efforts to establish links between the research units of different sectors (universities, the Academy of Sciences, and industrial research units) in order both to concentrate research capacity on prioritized projects and channel research to local needs for science-intensive technologies. The Rectors’ Council of the Kemerovo Region provides an interesting example. This Council encouraged the creation of the Regional Association for Research and Education, which in turn has had an important influence in the Regional Council for Economic Development. The association initiated one of Russia’s first regional science-andtechnology programs. In 1993 this grew into a comprehensive regional program of science and education development. This program addresses regional needs in education, training, and research; moreover it has devised a multiple-source financing mechanism to channel resources from the federal (State Committee for Higher Education, Ministry of Science and Technical Policy, Ministry of Finance), regional and municipal governments, the Regional Credit Union, the Academy of Sciences, the Federal Innovation Foundation, and from HEIs. The funding from regional resources (education tax, regional budget, private sector) comprises 40 percent of total investments (Programma “Vysshaya Shkola Kuzbassa—1995,” 1995). In 1996 the regional government doubled investments in the regional higher educational program up to 16 billion rubles. A second trend is for universities to develop locally targeted laboratories and small enterprises. The 1992 Law on Education provided universities with entrepreneurial autonomy, including that of running their own small enterprises either as an owner or a shareholder, and to handle extra-budgetary resources at their own discretion. Currently Kemerovo State is operating 17 small-scale experimental research-intensive production-lines. Among these are enterprises,

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which utilize unique technologies for the production of ultradispersive metals and artificial diamonds, which use the cost-effective multi-functional technology of vacuum-plasma infliction to create decorative and protective surfaces, which use an innovative technology for the production of films for aerial photography and fault detection, soft contact lenses, and devices for controlling chemicals in the water and air. Finally, there has been a growth of research opportunities and hence an expansion of the options open to capable professors. This expansion is seen in the social sciences area where there is growing demand for policy development by local governments concerning social and economic issues, legal services, and marketing and financial management. Interestingly, such fields as foreign languages teaching and interpreting also have become a desirable and demanded knowledge area. Nowadays practically any job vacancy in the private sector requires advanced foreign language skills in addition to technical skills such as business administration or engineering. The doctrine of science and research endorsed in 1995 by the Ministry of Science and Technical Policy favors financing science and research through competitive grants and prioritized research (Russia’s Science and Research Doctrine, 1995, p. 5), and this is most beneficial to the most prominent and persistent researchers. PREDICAMENTS OF INSTITUTIONAL AUTONOMY IN HIGHER EDUCATION

Lack of differentiation in universities’ missions. One of the central manifestations of university autonomy is the institutional ability to assess its strengths and weaknesses in the system of educational providers and to set its vision of improved performance, allowing at the same time to change and refine specific strategies to achieve this vision. This lesson comes from the most successful business organizations, which managed to stick to their core vision and values and at the same time were capable of making bold moves, experimenting, and changing (Collins and Porras, 1997). This success formula seems to be paradoxical only on the surface as James Collins and Jerry Porras demythologized the conventional expectations of what leads organizations to be successful. Looking at Russian HEIs from this perspective, they appear less likely to achieve success as specifically envisioned institutions but rather determined to climb to the top of the hierarchy established by the government. In 1993 the government established four types of HEIs: universities, academies, institutes, and colleges (the latter either as an independent institution or as a constituent part of

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universities, academies and institutes) (Standard Statute about an Institution of Higher and Postgraduate Professional Education of the Russian Federation, 1993). This classification with the omission of colleges was adopted in the 1996 Law on Higher and Postgraduate Professional Education. Aspirations for university status became a rule. Several institutional leaders indicated during this study that they mistakenly applied for the status of academy at the moment of introduction of new institutional types, and later managed to upgrade their status to that of a university. This upward-upgrading trend accounts for a dramatic increase in the number of Russian public universities in the 1990s. Thus, between 1980 and 1999 the number of universities more than doubled (from 40 to 91), their aggregate enrollments as percentage of total public higher education enrollments increased from 10% to 24% respectively (computed from Goskomstat, 2000, p. 199, 204). As the emphasis on research and a broad scope of advanced training fields were established for universities, these criteria primarily guided many HEIs that aspired to grow irrespective of their major concentration on teaching or vocational training. The driving force behind this race is not only the expected increase in state allocations, but also the prestige primarily associated with the formal hierarchy. Hence, minimal differentiation in university missions to the detriment of comparative advantages of Russian HEIs. Legal inconsistencies. Though educational legislation of 1992 was revolutionizing in many senses discussed above, it allowed differences in interpretation in practice. This especially concerned the tax privileges granted to HEIs on their self-generated income under the condition that this income was reinvested in educational process. Regional tax collecting agents, guided by the national taxation agency decrees and by the public revenue squeeze in regions, imposed additional bureaucratic hurdles on HEIs making it unpredictable under what conditions the tax privilege could be granted. Thus, for example, in the early 1990s, profit taxe was levied at the rate of 35% even for the revenues from paid educational services if these revenues were carried over from one fiscal year to another when students paid upfront tuition fees for the whole period of studies (Belyakov, 1997). The institutional capability to build up reserves of funds for capital construction and other costly projects were highly impaired. Moreover, the taxation practice punished those universities, which tried to diversify their funding: gifts and sponsorhsips from enterprises and individuals were taxed as well (VAT of 20% and profit tax of 35%). According to Serguei Belyakov of the Ministry of Education, taxation agencies essentially did not draw a clear line

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between non-profit educational institutions and for-profit organizations (1997). As pointed out above, the important federal codes were enacted several years after the educational legislation was passed, resulting in several contradictions. The new classification of budget categories of the Budget Code of 1998 in effect replaced lump-sum budgeting favored by the Ministry of Education and academic community with line-item budgeting. In 1999 in the spirit of greater accountability the government obliged public HEIs to keep their self-earned revenues in a special account at Territorial Branches of the Federal Treasury. The Federal Treasury introduced detailed pre-audit approval of the expenditures to be made from these accounts. The Russian Union of Rectors appealed to the government to allow Rectors to approve such expenditures. The new Civil Code caused disputes about the appropriate status of public HEIs—while the status of “organization” instead of the current “institution” lifts legal contradictions for the universities to attract funding from different sources other than government, it also opens a way for privatization of public HEIs—a move, which is strongly opposed by the Rectors and the State Duma. Managerial deficiencies. While many leaders in Russian higher education are intuitive and sensible, public HEIs overall lack experience and adequately trained personnel in efficient management and institutional analysis. The brain drain to the entrepreneurial sector of the economy of the brightest and boldest in public higher education and research institutes had taken its toll during the early 1990s. Deans and Chairs are elected from the academics, overwhelmingly from the same institution, and are not provided training aiming at specific managerial skills. Efforts to professionalize these positions are very rare or non-existent. Political lobbying and negotiations. In the democratic society with the diverse interests of social groups, lobbying becomes a professional activity of representing clients’ interests in the power-holding circles. Universities seem to seek for institutionalizing channels of pressure on politicians and the government. Examples of such attempts are cultivation of connections with politically important alumni, awarding honorary degrees to outstanding individuals and citizens, and the like. Yet, the less publicized networks and connections continue to play an important role resulting in bending the rules for some, who secured better connections with the center. The issue at stake, according to Dr. Vostrikov, Rector of Novosibirsk State Technical in Western Siberia, is that some Moscow-based institutions secured higher per student public allocations than provincial universities even if they are of the same cost level.

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Multiple and conflicting authority in higher education. Multiple ministries and departments continue to oversee the higher education sector in Russia, thus perpetuating sub-sectoral divides characteristic of the centrally planned economy. These lead to confusion of ownership and control patterns (Heyneman, 1997) especially in the regions where HEIs and secondary vocational institutions aspire to better serve their localities and to develop effective horizontal linkages with their immediate environment. While the budget proposal for public higher education is prepared by the Ministry of Education, the authority to approve it and to transfer federal funds rests with the Ministry of Finance. The planned and actually disbursed funds to public HEIs diverged considerably in the past decade until 1999. The major function of the Department of Economics at the Ministry of Education according to the Minister of Education Filippov was to ensure that Ministry of Finance transferred teaching staff salaries and student stipends to individual institutions in the amount stipulated by the law on the annual budget (Vuzovskiye Vesti, #22, November, 1998). The mechanism of channeling state appropriations to HEIs through a Federal Treasury and its territorial branches saved the time and effort, which was earlier wasted on obtaining funds on credit from the state bank. However, under the new procedure the expenditures were strictly itemized, and the approval of the Treasury on the expenditures was required in order to withdraw either state funds or institutionally generated funds from the Treasury’s account. Management of public universities’ property is handled by another federal agency—Ministry of State Property. The issues of property have become intensely discussed with regard to property rights to land when mortgage plans have gradually begun to make their way into the Russian financial and property market. Some view mortgage schemes as the only possible way of infusing large investments into Russian higher education. The conflict over ownership management flared up when Rectors, regional governments and the Ministry of Education discussed opportunities for regional governments to serve as co-founders of public HEIs, most of which are under federal jurisdiction and operate with the federal property. Ambiguities of decentralizing government control. Most HEIs are under jurisdiction of the federal level authorities and receive state funding from federal coffers. However, the federal government suggested in various documents that regional governments increase their financial responsibility in higher education. In the early 1990s the center wired a suggestion to transfer teacher-training institutions to the level of Subjects. The move was strongly opposed by those in the Ministry of General Education and the regional leaders who argued

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that the inadequate funding base at the regional level would starve teacher-training institutions already in a difficult situation because of lower market value of their services. The decentralization process in higher education was given support by the 2000–2001 governmental Strategy for Modernizing Education that emphasized greater relevance of education to individuals and localities and, hence, greater involvement in educational delivery of regional and local governments and other stakeholders—private and public enterprises, elected politicians, non-governmental and professional associations. While the federal government would invite Subjects to assume greater responsibility in financing public higher education in various documents, the issue of concomitant devolution of authorities of governance to the level of Subjects is the vaguest. A case in point is an exhaustive list of competencies assigned to the federal level in 39 items of Article 24 of the 1996 Law on Higher and Postgraduate Professional Education, and an invitation to Subjects in one paragraph of Article 25 to assume authorities beyond the federal competencies, as well as obligations to financially compensate for the gap in regional and federal norms of maintenance and daily operations. Finally, there is a tendency that the Ministry of Education—in order to ensure quality compliance—resorts to direct control instead of maintaining clear and consistent rules of accountability for all. Thus, the right to issue licenses to new HEIs accorded to Subjects by the 1992 Law on Education in a decentralization policy move was revoked by the 1996 Law on Education as the sole authority of the Ministry of Education. The center seems to be unable to dismiss its mistrust and to devolve to the regional level its decision-making authorities, except for the funding responsibilities. Dilemmas of institutional power balance. The power balance within institutions of higher education appears to be more volatile than prior to the reforms, and in need of constant adjustment. The new governance procedures work with varying degrees of success in institutions with different institutional cultures, histories, and ages. In some they may formally disguise autocracy, in others, they may make it possible to come to any acceptable solution. Certainly, the authority of chairs in faculty work assignment and, therefore, in the internal distribution of extra-budgetary resources is increasing. As discussed before, the lack of clear rules and transparency in allocating resources, invited by the legal and organizational ambiguities, may add to arbitrariness of decision-making and alienate faculty, administration, staff, and even students within an institution. While the administrative power has been propped up within HEIs, there is a tendency at least in some institutions for it to converge with

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the power of senior academics. In these institutions Academic Councils (and Senates) are dominated by central administrators and senior academics in charge of individual units (such as chairs and deans), and the decision-making has a tendency to be more politicized. The way in which the pendulum of power switches depends on an individual institution’s culture and traditions (some of these will be different in older classical universities and in newer more specialized institutions with a tighter and more hierarchical structure of units). Thus, the major challenge for institutional well-being and governance lies in the fact that a truly democratic balance of power is never static. The position of the center, thus, appears to be marked by a certain duality: politically it promotes decentralization and autonomy, administratively it tightens its control over institutions and, at the same time, attempts to release itself from its major funding responsibilities. Regional authorities appear very limited in their capacity to assume either control or funding functions over higher education. Often regional authorities see their niche in the hierarchy of power as extended offices of the central ministry. This attitude, however, contradicts both the principles of decentralization and institutional autonomy. Individual institutions—both their leadership and academia—look for ways of better responding to local demands to secure regional governmental support while recognizing that the costly business of higher education would be better off if federal government remained the major source of funding. Endangered financial sustainability. It could be hardly an exaggeration to indicate that the dynamic of Russian universities today is largely shaped by severe financial stringency. For the entire decade state allocations in higher education as adjusted to inflation continued to decline. From 1995 till 1999 the government made decision to finance only salaries to faculty and staff and student stipends. These funds did not allow any reallocation. Enormous debt had been accumulated to energy and other utilities’ suppliers. In universities located in Siberia, maintenance expenses (heating and electricity) used to comprise up to 20 percent of total operational costs (Novosibirsk State Technical University, 1996, p. 7). While reductions have made public moneys less and less available for higher education, individual institutions searched for ways of generating resources from other sources. In public universities the bulk of revenues additional to the governmental resources came from the fee-charged programs and courses, thus confirming the primary mission of higher education in teaching traditional and non-traditional students, such as enrollees

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Table 4.7. Attitudes of Various Actors to University Financing and Implications for Organizational Behavior

for a second higher education degree, fee-charged admissions for those applicants who fall below the established entrance requirements, and contract training for employer-enterprises. Other forms of attracting additional revenues came from rent, lease of equipment, institution-

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owned enterprises, and some auxiliary services (library, Internet access, etc.). HEIs self-reported these sources of income as secondary and not substantial, though some institutions were especially resourceful in creative financing. The average self-raised institutional income represented 7% in addition to state allocations in 1992, 13% in 1993, 15% in 1994 (Kitaev, 1995), 25% in 1995 (Regionologia, #1, 1996). It was estimated to represent 56% of state allocations in public higher education on average in 1998 (EBRD, 1998). The share of selfgen erated revenues at most HEIs stopped growing in 1999–2000 when the government increased public investments to state universities. The root of the problem is the severe illness of the nation’s economy impaired by the large “shadow” sector, as well as the insufficient collection of taxes by the state, that is, conditions of economic austerity and state austerity respectively. Persistence of hierarchies in structures and sectors. According to the educational conception of the early 1990s, as manifested in the Law on Education, postsecondary education was envisioned as a broadly defined professional education that would comprise primary and secondary vocational and higher education. Symbolically of that the 1996 newly merged Ministry was named as Ministry of General and Professional Education. The binary divide between the universities and polytechnics and specialized technical institutes was also to be lifted with the introduction of a unified classification of HEIs. Yet, the oversight by production ministries over some specialized engineering, medical, agricultural and other schools persisted. Addressing the specific issues of HEIs, the 1996 Law on Higher and Postgraduate Professional Education set the precedent for drawing separate laws for primary and secondary vocational educational institutions. Colleges were omitted from the classification of HEIs since many advanced vocational schools were granted this status. Russian higher education has retained its peaks, and the classification of HEIs is treated as a hierarchy to climb. The elitist notion of higher education is shared across various institutions even though admissions have recently expanded in a dramatic way, and the nature of expanded program offerings undermines the elitist drive. Probably the most paradoxical manifestation of hierarchies paired with elitism is the conception of continuous education in Russian HEIs, which typically implies in-breeding potential students from kindergartens or general schools, rather than expanding access and opportunity for individuals in their later careers to return to higher education or receive it for the first time.

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The introduction of two-tier degrees (Bachelor’s and Master’s) did not bring the expected increased mobility for students. Applicants are admitted to specific faculties. Cases of change of major or double majors involve transfer from one faculty to another and are rare or exceptional after the admission. Transfers from one HEI to another are equally difficult and rare. Graduates with baccalaureate degrees typically proceed to the advanced level of Master’s studies. Since Bachelor’s studies are one year shorter than normal studies for a specialist’s diploma, many employers are not willing to hire Bachelor’s degree holders. Reminiscent of the old-style of command and order administration, the 1998 draft governmental decree prescribed enterprises and companies to recognize the Bachelor’s degree when hiring personnel17. New stratification. Since 1992, the Ministry of Education has annually collected data on various characteristics of higher educational institutions and has combined these indicators into scales for the purpose of comparing universities and other HEIs in terms of such characteristics as academic potential and academic activity. The reports usually divide universities into different groups—classical or full universities (former universities), technical universities (former polytechnics and specialized engineering schools), teacher-training institutions, medical schools, institutions specialized in economics training. These statistical exercises are generally perceived as a form of ranking and have been the focus of much critical discussion. The universities naturally were concerned about these statistical exercises, for they worried that they might become the basis at some future date for decisions on financial allocations. Thus, from the mid-1990s, the universities through the Association of Rectors obtained permission from the Ministry to take over the responsibility for the data collection and analysis relating to these rankings. While the technical details have shifted a little from year to year, there has been essential continuity. Taking these indicators as a source, it is possible to consider how much or how little change has occurred in the relative position of Russian HEIs over the past decade. Careful review indicates considerable stability in those institutions with the highest and lowest rankings whereas those in the middle have shown significant mobility up and down. For example, the rank order correlation for the academic activity of full universities for the years of 1992 and 2001 is .72, a relatively modest correlation. That for technical univer-sities over the same two years is .74. These modest correlations reflect this extensive mobility among the middle-ranked institutions. Assuming the above statistical indicators are reasonably reliable, it might be said that the contemporary Russian university has to face the hard realities of competition. Either it faces this

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competition with innovative strategies, or it declines relative to its peer institutions. The case studies taken up in the next three chapters consider three universities that have decided to face the challenge of competition and that have achieved reasonable levels of success. CONCLUSION With the sharply declining resources from the state in the 1990s, universities were offered more autonomy and told to make it on their own. Newly granted autonomy in a variety of university functions was welcomed as a departure from the prescriptive control of the centralized state in the past. Greater institutional autonomy also posed a considerable challenge for most universities, both because they were weak in leadership and management and because their local environment was not promising. All actors in higher education saw entrepreneurship based on a redefinition of the service tradition as a possibility. With the encouragement from the national higher education agency, Russian HEIs vigorously took efforts to develop revenue bearing initiatives— rent the university plant, engage in contract research, provide special executive courses, and charge fees to students up to the allowed limit. Universities also set up joint ventures with business partners, opened mini production-lines, and allowed their staff to run small businesses on institutional premises in return for the charged rent and stocks holding. Yet at the same time, all of the institutions that were part of the state system hoped to increase their allocations from the state. The state discussed various strategies or criteria for disbursing funds, but these were not always acceptable either to Rectors or to the Finance Ministry. But over time, some interesting shifts occurred. Traditionally a greater emphasis and hence more generous funding was accorded to older universities and those with more students in the natural sciences and engineering. And within these hierarchical categories, allocations were tied to the faculty/student ratio. Since the enrollments incrementally increased through central planning, the disbursement of funds was determined by the faculty positions on the payroll. By the mid-1990s this practice was changed. The decreasing number of higher education applicants led to excessive faculty resources and other inefficiencies that were especially troubling in view of the decline of public moneys for higher education. So the basis for state allocations was shifted from the number of faculty at a university to the number of students. These changes in the criteria for allocating central funds also had an important impact on the behavior of individual institutions as will be shown in chapters 5–7. In

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principle, universities were allowed to determine on their own how many faculty, researchers, and support staff to employ and to fulfill the job of training students with a reduced number of staff who might receive higher salaries. But with the declining availability of the public resources, a rise in salary could only be funded from selfgenerated revenues. Autonomy to shed faculty was not easily realized. Though HEIs did get rid of some deadwood through a rigorous peer review in successful departments and institutions, the major reasons for faculty departure were retirement due to aging and the brain drain. Universities also found it hard to strip themselves of the social infrastructure that supported faculty and students’ needs in health care, child support and the like. The course of transformation that the Russian society embarked upon from the early 1990s was bumpy, threatened by uncertainties of political balance, economic hardship, and disillusionment with the reform out comes. Without a clear vision of the future of the higher education system, the State Committee for Higher Education nevertheless granted individual institutions more freedom to “rebuild their ships” and to reinvent themselves in the new environment. The true heroes of this process were university Rectors, whose leadership largely predetermined the institutional response to the challenge. Importantly, the stress was given to performance in terms of educating students. From early on, this posed a threat to abandon the old hierarchical categories. While carried out in some degree, as will be shown in chapters 5–7, there was some backpedaling as well. The higher education policy-making arena stopped being the sole prerogative of state officials. Multiple actors became influential in policy discussions, though sometimes-irreconcilable vested interests were detrimental to the reform goals. NOTES 1 This concern was expressed at the Fourth All-Russian Congress of the Russian Union of Rectors in March 1996 (Poisk, 1996, 19, p. 3). 2 Together with state registration, state licensing (attestation) and state accreditation are stages of the state quality control in Russia’s higher education. 3 The strategy for the development of education is available at the site of Moscow Higher School of Economics at http://www.hse.ru/science/ modern_ed/ default.htm. 4 The website of the Russian Union of Rectors (RUR) at http:// www.pcp.msu.ru lists thirteen higher educational associations and their presidents and provides materials of the RUR’s Congresses and of its governing board.

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5 The percentage is calculated from the data provided in the 1996 Annual Statistical Yearbook (Goskomstat, 1996, p. 186). 6 As of 1985, 117 public higher educational institutions out of 502 total in the nation (or 23%) were located in Moscow and St. Petersburg (Goskomstat, 1999, vol. 2, pp. 194–197). In 1998 the number of HEIs almost doubled totaling 914 institutions, among them 508 publics and 334 new accredited privates. Moscow and St. Petersburg continued to host a large number of new institutions (24.6% in 1993, 26% in 1995 and 27% in 1998), while their enrollments diminished (from 29.6% of the nation’s enrollments in 1985 to 25.6% in 1997) until 1998 when it slightly increased to 27% (percentage is calculated from Goskomstat, 1999, vol. 2, pp. 198–199). 7 These attitudes are very similar to those expressed by the academics in Eastern and Central Europe (see, e.g., Barakonyi, 1998). 8 For the agenda of Universities’ Project at Salzburg Seminar see its website at http://www.salzburgseminar.org. 9 On the increase of senior administration powers at the detriment to the voice and interests of junior faculty members see, for example, Lugachev et al. (1997). 10 In the early 1990s State Committee for Higher Education (for a certain period merged with the State Committee for Science, Research and Development) served as the national agency in charge of Russian higher education, in August 1996 it was merged with the Ministry of Education into the Ministry of General and Professional Education referred to as the Ministry of Education since 2000. 11 Some of the orders and notices by the Ministry of Education are accessible online at http://www.edu.gov. 12 More information about the newly established associations of higher education institutions may be found at http://www.pcp.msu.ru. 13 In this regard James C.McClelland (1979) indicates that the university system in Tsarist Russia, inspired by the German model’s pursuit of pure science, had a less practical orientation than its German counterpart (p. 25). It helped to produce a cultivated but unskilled and generally disaffected intelligentsia (p. 28), and promised the least benefit to Russia’s economy (p. 23). 14 Compare the discussion by Yakov M.Rabkin and Elena Z.Mirskaya (1996) of a specific culture of the Russian scientific intelligentsia of the Soviet period, which stemmed from the combination of a cultivated sense of guilt for a relatively advanced social status and available resources to do research, granted by the state, and a commitment to Mertonian values (pp. 44–46). 15 The percentage is computed from State Council (2001 a, p. 55). 16 Statistics on private HEIs refers only to HEIs licensed by the state, in 1994 almost one third of private HEIs did not secure their state licenses (CDPSP, 1994, 46(48), p. 9). 17 The 1998 draft governmental decree is available at http:// www.pcp.msu.ru.

PART III Pathways to Success

AUTONOMY REFERS TO FREEDOM TO PURSUE ONE’S ENDS. BUT IN OPEN systems, no unit is completely autonomous. Six broad groups of factors have been identified as supportive of autonomy: Legal framework, Rationale and strategic plan, Leadership, Management and program structure, Political linkages, and Financial base. These can be thought of as mutually supportive—to achieve success in any one area, the other areas of the hexagon have to be in line. The legal setup for university autonomy at the national level was discussed in detail in chapter 4. This section now turns to the analysis of how these factors are critical for the institutional response. For universities in affluent societies, vision and leadership may be the key to autonomy. In contrast, for the Russian university, facing severe financial austerity, achieving a reasonable level of financial solvency is perhaps the most important factor. Chapter 4 outlined three options available to Russian universities—to upgrade their ranking in the eyes of Moscow so as to obtain greater revenue allocations per non-fee paying student, to increase revenues from feepaying students, and to increase revenues from other off-budget activities such as academic and applied research and the marketing of university facilities. Some universities have made much progress in implementing these options while others are struggling. In this section we look at three universities—St. Petersburg, Novosibirsk Technical, and Kemerovo—that have achieved relative success in gaining financial solvency. The contexts of each institution place limits on what they can attempt. St. Petersburg, being one of the oldest institutions with a strong academic tradition, could draw on its cultural capital to seek special treatment from the national government—a strategy unavailable to the more recently established Kemerovo State. In contrast, Kemerovo State has enjoyed a near monopoly on the places for university study in its area and thus faced little difficulty in expanding enrollments of both non-fee paying and fee-paying students whereas St. Petersburg had many competitors in its area seeking to attract a relatively small student cohort. While

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these contextual differences are salient, all were able to significantly increase their off-budget revenues as well as their revenues from feepaying students. All have also been able to reach out to new sources of support in their local environment, with Kemerovo being perhaps the most aggressive. In sum, these universities have not merely survived but have been able to improve their position relative to the low point of the early nineties. What has enabled these universities to “come back?” Our analysis begins with some background on each institution followed by a short narrative of recent events. Then we turn to consider changes in each area of the autonomy hexagon.

CHAPTER 5 St. Petersburg State University

ORIGINS, HISTORY, AND SCOPE ST. PETERSBURG STATE UNIVERSITY (SPBU) HAS A LONG AND UNIQUE tradition. Its establishment in 1724 by the decree of Peter the Great (January 22)1 marked the introduction of university education in Russia. According to the grand plan of Peter the Great to modernize Russia in anticipation of the era of Enlightenment, the first Russian University was founded as a part of the Russian Academy of Sciences—to allow academicians to teach and to replenish the Academy with young native talents. The Academic Gymnasium, that was to provide young students to the Academic University, was another constituent part of the Academy of Sciences. Thus, Peter the Great intended to build a system of advanced learning from the top. For various historic reasons the Academic University suspended most of its educational programs by 1766, but was reopened in 1819 by Emperor Alexander I according to his comprehensive educational reform. Moscow University was founded in 1755 by Empress Elizabeth I according to the plan developed by M.V.Lomonosov, a Russian Renaissance man and a former student, professor and Rector of the Academic University in St. Petersburg. St. Petersburg University and Moscow University were the only Russian universities established before the beginning of the 19th century. Universities of the Russian Empire were never autonomous from the Tsarist autocracy (Alston, 1969; McClelland, 1979). In this they were similar to Prussian universities, which, while lacking autonomy from the autocratic state, yet produced the world-renowned standards of academic freedom of the Humboldtian university model (Ashby, 1966; Ben-David, 1977). The Russian autocrats had the ultimate right to open or close universities, to approve professorial appointments, to define university structure through the unified Charter of Imperial universities, and to appropriate the necessary funds.

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In the 19th century during the reign of four autocrats, the progressive reforms aiming to increase academic freedom for the professoriate and to introduce elements of institutional autonomy alternated with conservative counter-reforms. This struggle manifested itself in the implementation of four Charters for the Russian Imperial Universities in 1804, 1835, 1863 and 1884 respectively (Milyukov, 1890; Alston, 1969; McClelland, 1979; Kinelev et al., 1995). The Imperial Universities’ Charter introduced in 1863 by Alexander II was the most liberal in nature. It increased corporate autonomy of the professoriate, having delegated to the University Council the authority of electing a Rector prior to approval by the Minister of Education, of dividing faculties into departments, of establishing, moving, or closing chairs, of deciding compulsory and optional courses, and of independently awarding degrees; faculty Councils were also granted greater autonomy, and the Rector, Vice-Rectors and Deans focused on maintaining the logistics for the core University functions (Universitetskiy Ustav, 1863; Zhurnal zasedaniy vysochayshe uchrezhdennoy komissii po peresmotru universitetskogo ustava 1863 g., 1876). The funding from the state was considerably increased. Universities were granted a tax free right for the acquisition of equipment and books from abroad, and the right for a peer review instead of the external censorship. The 1884 Universities’ Charter restored reactionaries. SPbU fiercely resisted the truncation of its autonomy. In 1905 the University was temporarily closed because of the protest staged by students and faculty against the reactionary policies of the government. Yet the 19th century became known as the golden age of SPbU: its glory was earned by outstanding scholars known throughout the world: chemists D.I.Mendeleyev and A.M.Butlerov, mathematician P.L.Chebyshev, physicist E.Kh.Lenz, botanist A.N.Beketov, embryologist I.I. Mechnikov, physiologist I.M.Sechenov, and many others. The history of St. Petersburg University in the 20th century has been most turbulent and tragic: WWI and the perils of the civil war, imposition of the party-state rule over the University, “regular” “cleansings” of students and faculty in 1924 and the 1930s, the heroic university fighting during WWII and during the 900–days Leningrad blockade; “eradication of genetic studies and bourgeois cosmopolitanism” and the “Leningrad case” in post-war 1949–1950 (Verbitskaya, Tishkin, Tikhonov, and Sobolev, 1999). Most damage was done to the faculties of social sciences, philosophy, and economics (all professors of economics were subject to repression) (Verbitskaya et al., 1999, p. 359–360). Still the spirit and the continuity of the

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University tradition persisted, and the University abounded in talent. Academician L.V.Kantorovich (later the only Soviet time economist awarded a Nobel prize) and professor I.S.Kon, presently world-known among social psychologists, worked on developing new research directions and the preparation of would-be core faculty members (ibid.). Though under the pressure of “ideological” censorship, the humanitarian thinking at the University yet blossomed. Thus, the faculty of philology was “decorated” by the Pleiad of world-class scholars: V.Ya.Propp, O.M. Freidenberg, V.M.Zhirmunskiy, I.I.Tolstoy, to name a few. Eight graduates of St. Petersburg University became Nobel laureates: I. P.Pavlov (1904), I.I.Mechnikov (1908), N.N.Semenov (1956), L.D. Landau (1973), A.M.Prokhorov (1964), V.V.Leontiev (1973), L.V. Kantorovich (1975), Zh. Alferov (2000). St. Petersburg University and the academicians of the Russian Academy of Sciences closely cooperated until 1925 when the Academy was transferred to Moscow and was placed under close surveillance by the party-state apparatus. Of the two biggest national universities, Moscow and St. Petersburg, Moscow State expanded faster according to Stalin’s master plan of turning it into the principal national university, and the resources were generously available. St. Petersburg State did not expand as fast as Moscow State, though both were rivals in research and scholarship. Due to the authority and the prestige of the two universities, they enjoyed more autonomy in some of their academic, staffing and governance matters even during the Soviet period. This was an exceptional privilege, especially because Soviet higher education dramatically expanded in the 1950–1960s— largely due to opening new technical and specialized institutions of higher education. The number of universities reached forty in 1980. From 1980 till 1992 no new university was opened (or upgraded). Through several decades overall university enrollment was kept at 10% of the total higher education enrollments adding to its elitist status. The oldest Russian universities—St. Petersburg (1724), Moscow (1755), Kazan (1804), Tomsk (1878), and Rostov (1915)—have included in their structure research institutes as independents units. This was in addition to the network of research institutes of the Academy of Sciences and of more applied industrial R&D, where most of the country’s research was done. In the 20th century at the time of the further specialization and fragmentation of knowledge generous resources were made available for the technical and hard sciences. New research centers, laboratories, and institutes were opened at SPbU. Between 1971 and 1975 together with the affiliated faculties of physics, mathematics and mechanics, and chemistry they were moved

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from the Neva embankment of downtown Leningrad—as the city was named between 1924 and 1991—to the newly built University campus in the Leningrad suburb of Old Peterhoff in the vicinity of Peter the Great’s summer residence. The opinions of university members on the division of the University into two campuses would occasionally raise controversy, especially at the time of a financial squeeze. Thus, during the financial shortages of the past decade, the deteriorating base of science faculties and research institutes in Old Peterhoff raised questions about the divided campus of SPbU. Most recently, with the announcement of a governmental decree on Science Cities and a program of integration of research and educational institutions in spring 2000, hopes to revive the suburban campus of SPbU by way of obtaining the status of a science city resumed (Sankt-Peterburgskiy Universitet, 2000, November). There are many symbols and myths that surround St. Petersburg University. One of the most striking ones is the elegant Petrine baroque architecture of its main building, believed once to house the twelve colleges (or ministries) of Peter the Great’s government. Its long, streamlined corridor with books shelved on the one side and the gallery of portraits of its Rectors and Professors between Venetian windows, on the other, is special to those who were once “initiated” into the community of their Alma Mater. Anna Akhmatova, a renowned Russian poet, wrote: STARTING POINT Indeed “anything can happen,” and what happened to SPbU in the late 1980s with the decline of the Soviet economy was a rapid decrease in state support both for the teaching side of the university and the various research institutes attached to the university. Concurrently the number of entering students began to decline—largely because St. Petersburg had been a magnet for outstanding students across the country, but now many were unwilling to take the risk of taking up study with uncertain stipend payments in this expensive city. Also the cost of travel to St. Petersburg became affordable to much fewer people. In 1985 forty one public higher educational institutions, located in then Leningrad, enrolled 9.2% of all students in the nation,

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Table 5.1. Change in Annual Admissions to Public Higher Education in the Russian Federation and the Selected Cities/Oblasts between 1986 and 1998

Source: Calculated from Goskomstat, 1999, vol. 2, pp. 202–205.

while seventy six institutions in Moscow enrolled 20.4% of the nation’s student body (Goskomstat, 1999, vol. 2, p. 194, 198). From 1986 till 1992, the nation’s higher education entering class decreased by 18%2, while annual admissions for the same period dropped by 28% in St. Petersburg, and by 29% in Moscow. The competition in leading higher educational institutions in St. Petersburg and Moscow dropped to two applicants per vacancy. The redistribution of admissions into some regional institutions of higher education was discussed in chapter 3. In the early 1990s the first non-state higher educational institutions emerged, having increased the competition for students, especially in Moscow and St. Petersburg. In 1993 non-state institutions with a state license in Moscow enrolled 8% of the Moscow student body, In 1998 the proportion increased to 12%. The respective numbers for non-state institutions with a state license in St. Petersburg are: 0.6% in 1993 and 8.5% in 1998. In the comparable period public institutions enlarged their numbers much more rapidly (see table 5.1 below). As a consequence of economic downfall and inadequate collection of tax moneys for public needs, state allocations to public universities continued to decline through the 1990s in real terms. In the past decade state allocations to public higher education declined both as a share of GDP (while GDP dropped two-fold in the early 1990s and continued to decline further) and as a share of federal expenditures, having stabilized at a 2% level between 1993 and 1997 (Galanov, 1997, p. 138)—still below the level of the state obligation of 3% of total federal expenditures as stipulated by the 1996 Law on Higher and Postgraduate Professional Education (Art. 2, Item 3.1). Sharp across-the-board cuts in real-term state allocations endangered university survival. Since August 1, 1995, SPbU like other Russian higher educational institutions was not allocated funds for utilities (maintenance), repair/construction, and academic support, while the daily maintenance comprised a significant part of university

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expenditures—around 40% of its total expenditures. To complicate matters more, the overdue payments on utilities over months incurred fines and penalties from public and private providers of services and led to the curtailment of some services (such as access to telephone lines). SPbU administration reached out to its alumni in the city government and in utility providers in order to prevent curtailment of heating and electricity services and to encourage discounted rates for the services (Sankt-Peterburgskiy Universitet, 1995, #3, January 27, p. 2). Efficient use of utilities in the buildings constructed in the 18th century would have required significant investments to modernize heating and water systems in the first place. As the state allocation formulas became increasingly tied to the number of students enrolled (as contrasted to the number of faculty on the payroll), SPbU was placed into ever more serious jeopardy. Adjusted to inflation, the faculty and staff salaries continued to deteriorate. Particularly severe cuts affected the eleven research institutes attached to SPbU (ten in the sciences and one in social research). Once self-sufficient units with generous grants from the state and industries, the research institutes now found themselves in a dismal position. The state allocations were reduced to 40% of general expenses to cover only the baseline salary of the staff (which even prior to the cuts tended to be half the size of salaries of the teaching faculty at SPbU). While the research institutes considered turning to private industry to market their services, this usually proved impractical, as the financially squeezed new privatized enterprises had not yet built research investment into their business plans. State research grants could not possibly cover the needs in maintaining the research base or obtaining state-of-the-art equipment. Finally, the research institutes, being pure researchoriented units within SPbU and thus lacking student enrollees, could not tap such a source of additional revenues as tuition-charged students. From 1989 to 1993 almost a thousand of the 2500 researchers attached to these institutes resigned their posts (to take up jobs abroad or in private enterprises within Russia). The divide between the University teaching faculty “haves” and research staff “have-nots” had never been so great. If these conditions were to continue, the university would have faced a tragedy. So what could the university do to avert its demise? UNIVERSITY TRADITION AS THE CORNERSTONE OF THE RESPONSE Faced with these challenges, what stands out in the case of SPbU was that, from the very beginning of the financial crisis, SPbU sought

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formal acknowledgment of its critical place in Russia’s proud university tradition. The leaders seemed to believe that the affirmation of the core position of SPbU in the Russian tradition was the key issue, and getting this right would open the doors to the solution of other more mundane matters. Indeed, the university leaders considered other options—for example, increasing fee-paying enrollments, expanding entrepreneurial activity, seeking greater support from the local government, the business community, and a newly established alumni association, or seeking greater funds from the central government. In fact, SPbU in some degree pursued all of these more mundane strategies. But the main stress, at least from the Rector’s office, was on symbolic affirmation. As will be shown below, this approach “paid” off. From the outset of the transformation toward democratization of the society and marketization of the economy in Russia, the central government sought to place more responsibility for change on the shoulders of individual institutions of higher education. This orientation, while already signaled in the late eighties, was formalized in the 1992 Law on Education and the 1996 Law on Higher and Postgraduate Professional Education, which stipulated new autonomies of university self-governance in academic, research, organizational and financial matters. Universities were to be allowed to make independent decisions about how to meet new public demands in education and how to lead in helping the society through its dramatic change. The government issued a statute about the role of Rectors making Rectors ultimately accountable for achieving public goals of education and for the effective use of public moneys. Like other Russian universities, St. Petersburg State embarked on developing its University Charter, a university “common law” about its goals and a basic set of rules and procedures. The University Charter was passed by the University conference on November 22, 1993. Its final formal approval by the Government at the recommendation of the State Committee for Higher Education was granted almost two years later on July 12, 1995. Yet, the statement in the Preamble that St. Petersburg University was in effect the first university established in Russia (prior to Moscow State) was resisted by the central authorities, in part because they had a large representation of Moscow State graduates. The statement concerning the age of SPbU was also rightly feared as a first step toward future demands for financial “concessions” from the state. Only after the consistent efforts of research workers and an intensive campaign for the celebration of the 275–year anniversary of SPbU, did the national government issue a decree just prior to the celebration in November 1997. Generous funds for the reconstruction of historic buildings of

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the University followed, while the long-awaited preferential funding became available in 1999. The St. Petersburg University Charter declared the principle of academic freedom as expressed in the Great Charter of European Universities to be the key guiding principle of University life. It stated that the University was granted a status of national and cultural heritage by President Yeltsin’s decrees (1991 and 1992) and the Russian Federation Governmental decree (1992) with the consequent preferential state financing and an independent (autonomous) status. The Charter indicates that the University 1. has the right to independently define the content of educational programs (curriculum should meet general guidelines of the state standard, but does not need to be approved by the government) and the issues for research; 2. has the right to independently decide its structure (including establishment, mergers or closing the constituent units, personnel decisions concerning firing, hiring and remuneration), and to independently allocate administrative and governance responsibilities within the university; 3. has the right to award honorary titles (including Doctor Honoris Causa and a honorary professor), to establish awards and bonuses, to establish stipends and scholarships; 4. has the right to publish research results; 5. is a public institution with the status of a “legal entity,” which provides it with legal tools of greater fiscal freedom and internal accountability, such as the right to decide on its expenditures and to balance its budget, to have its own bank account, to acquire assets, to raise additional funds beyond the allocations from the federal, city, and local governments, through such measures as offering services and research products for a fee, renting land and buildings, philanthropic donations and staged charity events; 6. has the right to grant partial or complete competencies of a “legal entity” to its units by proxy; 7. has the right to independently enter associations and international contracts or participate in international foundations. The University rights were balanced by its obligations to comply with the nation’s Constitution and other national legislation acts, governmental and Presidential decrees, orders of the Ministry of General and Professional Education (MGPE). MGPE (and before 1996 —State Committee for Higher Education) acted as a major controlling, licensing, and auditing body. In addition, the auditing chamber of the Finance Ministry could issue audits. Grievance

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procedures for employees’ labor disputes were available as set up in the national Civil Code. The University Rector was charged to annually report to the Academic Council, an elected representative institution of the university self-governance. The Charter defined the SPbU’s status in the new classification of higher education institutions, its goals and structure, organization of teaching and research, overall governance structure, rights and duties of students, professors and staff, staff development, financial and budgeting competencies, international contracts, records and accountability. The particular claims for autonomy were made on the basis of a long university history dating back to the Peter the Great era with a tradition of excellence. Item One of the Charter read that “St. Petersburg State University is Russia’s leading center of education, research and culture.” The Charter was amended to comply with the 1996 edition of the Law On Education and the 1996 Law on Higher and Postgraduate Professional Education, and later approved by the national government in 1998. By the Law on Education, Rectors of Russian institutions were granted broad authorities in running their institutions (some of which they could delegate to Vice-Rectors) and were held personally responsible for the accountable and legal performance of their institutions. Finally, Rectors were to be elected by university communities with the final approval by the Ministry of Education (before 1996 by the State Committee for Higher Education). Approval of the elected Rector of SPbU was to come from the government since the university was awarded the special status of a national and cultural heritage and was to be financed directly from the federal budget similarly to Moscow State University. SELECTING AN APPROPRIATE LEADER In 1986 the central government appointed a young and charismatic professor, Stanislav P.Merkuriev, as Rector of SPbU. At that time Dr. Merkuriev was a professor of physics, Dean of the faculty of physics, and head of a department in the Physics Research Institute at SPbU. Rector Merkuriev led the University through the turbulent late 1980s, but tragically died in spring 1993. His persistence and patience, visionary leadership and tireless work in overcoming faculty resistance to change earned him a reputation as one of the greatest leaders in the history of the University (Sankt-Peterburgskiy Universitet, #11, May 18, 1994, pp. 2–4).

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Through Rector Merkuriev’s leadership the tripartite vision of the university that has guided its development until presently was developed. First, “preservation of academic and scholarly traditions of St. Petersburg University,” second, “strengthening its national status as a unique university with none equal to it,” third, “a university of a truly European culture” (ibid, p. 3). Rector Merkuriev was at ease in foreign languages (equally fluent in English, German and French), an ambassador of SPbU in the West right after the fall of the “iron curtain,” and a prolific theoretical physicist. The ranking of SPbU among the top six European universities was credited to him3. Thanks to his energy and reputation, the 38th session of the Conference of European Rectors was held for the first time in Russia—at SPbU in May 1991. His physicist colleagues compared Rector Merkuriev to a “multiple task processor” for his ability to keep in mind several problems and, while focusing on one at a time, to simultaneously progress toward the solution of others (ibid. p. 3). Many changes implemented in SPbU in the 1990s were conceived as ideas or prepared by Rector Merkuriev, such as preparation of a new administration structure for the university, granting units with more administrative autonomy and decision-making powers, strengthening morale of the faculty, encouraging research relating to the date of the establishment of the University, opening a French college that awarded the first French degrees outside of France, establishment of a medical faculty and many others. Most important was Rector Merkuriev’s ability to attract extraordinary people and to surround himself with accomplices. He believed in the power of an academic community, that the University was first of all its professors and students, and that the University should have a standing professorial assembly. With the tragic death of Rector Merkuriev in 1993, the University faced the leadership crisis of selecting a new leader. The Rector was to be elected by the university community for the first time since the Soviet period. Prof. Lyudmila A.Verbitskaya, the first Vice-Rector in Rector Merkuriev’ team, became an interim Rector and was to be shortly elected the first female Rector of a Russian university among the several candidates. The Rector’s elections were preceded by the university discussions of criteria for the Rector. Some suggested that the Academic Council in its old unreformed membership should elect the Rector, while others suggested that a Rector should be directly elected by all the members of the university community. The ad hoc committee on the Rector’s election, headed by Prof. Serguey B.Lavrov, took a mid-way position recommending elections by “electors” and the members of the Academic Council, who represented various university constituencies:

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faculty, administration, research staff, support staff, unions, and students. The committee rejected interference by the Ministry of Education, which had proposed the re-election of the Academic Council prior to electing the Rector. The ad hoc committee on Rectors’ election also discussed and summarized the criteria for candidates running for Rectorship. These criteria reflected faculty expectations of a university leader under conditions of reduced state financing and the changing public demands for higher education. These criteria implied that a candidate for the Rector’s position should be 1. a long-time university insider with a proven commitment to the university course; 2. a full professor with an established academic reputation and yet capable of giving up research altogether because of the full-time engagement in the new position; this criterion was much debated —the initial suggestion was to allow any university staff member to run for the Rectorship, but finally the committee yielded to the commonly held expectation that the academic reputation of a full professor would matter much for fulfilling the functions as a chief university leader; 3. experienced in administrative work; 4. able to focus largely on the external university relations under the conditions of fiscal austerity; 5. nominated by at least one faculty (not by two or more faculties simultaneously) in order not to eliminate the pool of good candidates and not to promote separate group interests. Prof. Serguey B.Lavrov, chair of the ad hoc committee on the Rector’s election, summarized his expectations of an elected Rector as follows: First of all, the Rector should be truly committed to the University. Most of a candidate’s life should be connected with the University. Presently the University needs to be led by a person who is capable of solving not only internal problems but of defending the University interests with the city and national state authorities, and of obtaining the necessary funding. In a word, a truly responsible manager. As for the rest, it does not matter much for the University who will be its Rector. The University is a gigantic institution. Its faculties and research institutions are big and rather autonomous units. Therefore, it is very difficult to break the University’s “backbone,” to change it radically (SanktPeterburgskiy Universitet, #13, October 8, 1993, p. 2).

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The procedures for electing the Rector were spelled out in the new University Charter approved by the University conference on November 22, 1993. The criteria for the eligible candidates emphasized work experience in an administration position, title of a professor, and at least five years of work at the University. On April 18, 1994, five months after the approval of a University Charter by the University conference, Professor Lyudmila A. Verbitskaya was elected the new Rector from among the alternative candidates. Under the conditions of changing economic relations in society and the newly obtained right of the University to stand on its own and develop its own relations with the external stakeholders, the expectations from a new Rector to fulfill a western-style representative role to the external environment as well as to have strong managerial skills were very high. At the same time academic reputation and the sense of belonging to the internal uni versity culture were also viewed indispensable for a Rector, who was to become a symbolic leader for the university community members as well as for outside constituencies. The election of the first female rector in the history of Russian public universities was a significant statement. In the Soviet times the government appointed Rectors of then Leningrad University from among male academics mostly with backgrounds in mathematics or physics. Prof. Lyudmila Verbitskaya had brought her background in the Humanities to the elected position while being a professor, Doctor of philology, and a correspondent member of the Russian Academy of Sciences (shortly after—in 1995—elected as an academician of the RAS). She was a true and long-term insider of the University. Having graduated from the faculty of philology in 1958, she started and developed her academic career there. From 1984 to 1993 she served as a Vice-Rector for academic affairs (Chief Academic Officer) and a University First Vice-Rector assisting Rector Merkuriev (1986–1993). When he tragically died in early 1993, Prof. Verbitskaya became the interim Rector until her election in the spring of 1994. Through her previous administrative positions she was politically acceptable to various interest groups within the University. In 1991 she was elected a vice-chair of the UNESCO committee on education. In 1999 she became a president of the International Association of Teachers of Russian and Russian Literature. It appears that the greatest expectation was to see the newly elected Rector first of all as a symbolic and political leader of the University. At times of scarcity of resources and uncertainty in the larger societal environment, these functions seem especially critical for boosting the morale and motivation of the university community around some core goals and values that would unite various groups and individuals

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under the umbrella of a broader common mission without sacrificing immediate interests. POLITICAL LINKAGES At the university level, the continuity of culture was viewed as a special value. As noted above, much emphasis was placed on gaining wider recognition for St. Petersburg University as a lead institution and indeed the oldest university in Russia—founded in 1724 as compared to Moscow State University’s establishment date of 1755. Rector Verbitskaya was selected in the expectation that she would promote wider recognition for the proper place of St. Petersburg University in Russian history. Her style may be characterized first of all as that of a symbolic leader in mobilizing university members around a common and focused goal of maintaining a position of a top classical research university nationally and internationally under the new conditions. She proved to be highly successful in representing the University to external constituencies and authorities. Rector Verbitskaya chaired the University alumni association. She reached out to and cultivated linkages with the politically powerful alumni of SPbU—the first Mayor of St. Petersburg, who was the late Anatoliy Sobchak, a professor of law at SPbU; Mr. Gennadiy Seleznev, speaker of the State Duma, the lower chamber of the Russian Federation Parliament; members of St. Petersburg Legislative Assembly who were alumni of SPbU. Honorary titles were awarded to outstanding international and domestic scholars and politicians. In February 2000, the Academic Council of the Law School of SPbU awarded the title of honorary member of the Law School Academic Council to the then interim President Vladimir V.Putin, a graduate of SPbU law school and a Rector’s assistant at one time. A distinguished academic reputation as well as the fair gender of Rector Verbitskaya “helped her” to obtain appointments with President Yeltsin and to successfully lobby some of SPbU urgent financial needs with national governmental officers: “I think if I were a man, it would have been much more difficult to get appointments with high-rank officials…. I represent SPbU, a world-renowned university, the reputation of which cannot be ignored. Yet, I can compare, for example, how the President talks to Mr. Sadovnichiy, Rector of no less regarded Moscow State University, and how he talks to me” (Sankt-Peterburgskiy Universitet, #7, March 3, 1994, p. 2). As early as 1992, the State Committee for Higher Education had accorded a favorable status on St. Petersburg University, raising its allocations for faculty salaries from an expected faculty-student ration of 8:1 to 6:1. However, the Ministry of Finance did not reflect this

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upgrading in its allocations to the university. Through Rector Verbitskaya’s interventions, this discrepancy was corrected in 1997. And then in 1999, on the occasion of the 275th anniversary of the “founding” of St. Petersburg University, preferential status was accorded to the university as a unique historic institution equal in official treatment to Moscow State University. The practical significance of this recognition cannot be underestimated. For example, • University funding comes under a separate law. • The actual level of funding is very generous. The core principle is to provide funds on the assumption that every faculty member teaches four students. • Moreover, a generous grant was paid for the reconstruction of the historic buildings of the University at the downtown campus and to equip the oldest university library in the nation with modern technologies. The special office of a Vice-Rector for Public Relations was created and charged with the sole task of lobbing for the recognition of the historically first Russian university (a fact difficult to swallow in Moscow with the strong clout of Moscow State alumni) and for the special funding law. After the successful accomplishment of its task the office was terminated, but the need for a modern PR service at the university was soon addressed again. As an important result, funding per faculty member at St. Petersburg was improved to a level where it became nearly three times as generous as was the average for all Russian universities. MANAGEMENT AND FINANCE The discussion thus far has emphasized the main thrust of the SPbU strategy, that of upgrading its official status, which was the primary focus of Rector Verbitskaya’s energies. Still it should not be thought that the university was neglecting other options. Indeed, in that the above strategy was risky and took a long time to implement, it was essential for the university to tackle the more mundane issues of increasing revenues from students, research and entrepreneurial activities. Rector Verbitskaya, while keeping an eye on internal university developments, adopted a strategy of providing general guidelines and leaving the more detailed work up to the leaders of the various faculties and programs. The following are some of the highlights of SPbU’s accomplishments.

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New course offerings and increasing enrollments in popular fields. Some of the most successful examples of adjustment to the new demands in educational services are those that were implemented by the newly organized structural units at SPbU. Four new faculties were opened in the past decade: Faculty of Sociology (1989), Faculty of Management (1993), Faculty of International Relations (1994), and Faculty of Medicine (1995). The first three were opened and developed with the help of grants from Western donors and linkages with foreign universities. The programs were developed anew after the most authoritative world models, the faculty members got retrained, and they adjusted curricula to the Russian university programs. The Faculty of Management was opened in close cooperation with the Haas School of Business of the University of California at Berkeley, with which Rector Merkuriev signed a contract. The Faculty pioneered in implementing American-style degree programs presently authorized by law: fouryear Bachelor’s followed by two-year Master’s degrees. The Faculty offered programs within the three departments of management, marketing, and public administration. It was able to win grants from USAID, Soros Foundation, Eurasia Foundation, as well as to obtain donations from corporations and companies that operated in Russia. Since 1996, the faculty provided training for managers of joint ventures set up by Scandinavian corporations in Russia within the corporate program NORLET (Nordic-Russian Leadership Executive Training). Since 1998 the Faculty of Management participated in the Russian President’s program of training top managers for the national economy. The linkage with foreign partners was sustained by the International Board of Trustees. The Faculty of International Relations offered three specialties in American studies, European studies, and studies of the Newly Independent States respectively. The Faculty was the first one to offer quality programs in international relations, excepting the Moscow Institute of International Affairs (MGIMO). The Faculty of Sociology was developed out of the Faculty of Philosophy to meet new demands in experts for social management. It soon obtained TEMPUS/TACIS grants from the European Union and developed linkages with European Universities of Germany, France and Netherlands. The decision to open the Faculty of Medicine was justified by the unique opportunity of training medical doctors and medical researchers within the university in collaboration with the research institutes of the Academy of Medicine and of the Academy of Sciences located in St. Petersburg. The city administration helped to provide and repair the clinical base. In the five years since its opening, the

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program came to be highly competitive with other medical institutions in the city. The program remained small (44 entrants annually) and highly selective (8 applicants per vacancy in 1998, and 10 in 1999). The faculty of Medicine proved to realize some ideas about the specific mission of SPbU: integration of all-round university education with intensive research as applied in practice. Prof. Igor Gorlinskiy, Dean of the Faculty of Biology and a Chair of the Academic Council Committee on educational programs, was the mastermind for establishing the new Faculty. His idea of adjusting the university to the new conditions was evolutionist (Interview, 1997). It was not only the tribute to the world-view of a professional biologist, but also a result of his profound understanding of the complex structure of the University with the semi-autonomous cultures of faculties and persistence of traditions in the academe. Dean Gorlinskiy’s approach could be characterized by the focused persistence of an informal academic leader, guided by the understanding that the academic excellence of SPbU and its comparative advantage rested with the advanced studies of a university-type quality: broad erudite training and research. Dean Gorlinskiy chaired the Academic Council committee on the development of two-tier degrees—Bachelors’ and Masters’—as required by the national policy. Since the early 1990s he articulated the understanding of many faculty members that the University mission was in providing advanced studies, and the only way to do it was to tap the resources of the research institutes of the Academy of Sciences located in the city. The new organizational form, in his view, was a way to engage traditional faculties in developing newquality educational programs and in expanding research opportunities (Interview, 1997). A new Faculty of Medicine was a successful example of such a program. Faculties of Biology and Physics were among the early adopters of a multi-tier degree system. Yet on the whole, there was no across-the-board change among the faculties, many of which did not accept the two-tier degree system. Increasing number of fee-paying students. While the University as a whole was lobbying the government for privileged state funding, faculties retained their considerable leeway in offering for-fee programs, courses and other services. The number of tuition-charged students increased—especially at the more popular faculties of law, economics, philology (foreign languages), management, international relations. New fields of study remained highly attractive to applicants: at the faculties of sociology (sociology, social anthropology and social work), psychology (general psychology), journalism (public relations, mass media studies), and philosophy (political sciences, cultural studies), as well as such new specialties as information

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systems, conflict resolution, history of arts (Rector’s Reports to the Academic Council for various years). New initiative and course offerings on the margin of the core academic structure. Most of these services were offered for a fee and administered, advertised and provided by special units attached to faculties. Thus, seven faculties from the initial sixteen (and now extended to 19) introduced tuition-charged tailor-made degree programs for adults who had once obtained higher education and wished to get retrained (the so called special faculties). This was the type of educational program that generated most revenues. For-fee short-cycle non-degree courses and advertising for them proliferated across the faculties. Eleven faculties also provide for-fee programs for high school graduates who aspire to apply to the University (so called small faculties). Yet other units developed outside faculties: the French College and Canadian College were established through a partnership with foreign universities and awarded double degrees to their graduates; Baltic University provided distance education programs as an initiative of universities of the countries around the Baltic see to focus on the issues of the Baltic region such as multiculturalism, ecology, and regional economies. Other units inherited from the centralized organization of the past were forced by the lack of funding to transform themselves into self-funded units: for example, Center of the Russian Language and Culture provided intensive Russian courses for foreign students for a fee; the Academy of the Humanities (former Institute of In-Service Training) provided adult-education courses and in-service training for college-level teachers for a fee. Dean Serguey Bogdanov, a young leader of one of the most traditional faculties, the Faculty of Philology, entered into entrepreneurial initiatives that were outside the traditional academic duties of a Dean. He opened a branch university publishing house at the faculty, profitably operated a faculty bookstore, and initiated the establishment of a Center for Language Studies that offered shortterm non-degree courses for traditional students and adults. “Special faculty” attached to the Faculty of Philology targeted the needs of foreign students in advanced studies of languages, as well as of domestic students in need of tailor-made degree programs. Dean Bogdanov also focused on the improvement of the logistics of the educational process, attracted sponsors to repair the 18th century building and the furniture, and contracted out auxiliary enterprises in the faculty hall, such as small cafes. The Dean welcomed and advertised the American-style degree system. However, the faculty members allowed the introduction of Bachelor’s and Master’s degrees only outside the mainstream

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educational programs—in special groups with tuition-charged enrollments. Professor Lyudmila P. Chakhoyan in charge of the chair of English philology and Translation since the early 1980s positively assessed the efforts of the young and entrepreneurial Dean, but recognized that the goals and substance of the work of her chair did not change: “We are like a big elephant moving in the jungle. Despite all the uncertainty of internal and external changes, we continue to move ahead in our course—now we’ve managed to obtain foreign grants to do our research. We are focused on our goals, all the rest is on the side, it may improve the conditions of our work but does not deal with its essence” (Interview, 1997). As with other faculties, the aging faculty members continued to be a looming personnel problem at the Faculty of Philology, while attracting young qualified instructors for full-time positions remained problematic. In 1997 in addition to the 600 full-time faculty, 200 parttime and adjunct members were hired in separate units to provide courses of foreign languages at departments and faculties where linguistics was not a specialization. Besides, regular full-time faculty were also allowed to work part-time in other units across the university. In 1998 the number of regularly admitted students as well as of fee-paying full-time students increased, the size of the latter was tied to the size of the former by the 25% quota according to the 1996 Law on Education. In 1998 the total number of enrollees was 1,843 students, of which 86% were full-time students and 20% were charged tuition. The ratio of regular full-time faculty to students at the Faculty of Philology amounted to 1:3.1 without taking into consideration the labor intensive character and number of students served outside the faculty of specialization. The average faculty/ student ratio at SPbU was 1:6 at the time and 1:8 at other higher educational institutions in St. Petersburg, which were not granted the status of national heritage. Colleagues of Dean Bogdanov stressed that he was not only brave and inventive in ideas but he indeed solved problems and delivered on his promise. In 1996 the Faculty raised 47% of revenues additional to the state budget allocations. Annual admissions of both statesupported and fee-charged increased significantly by 1998 as seen in table 5.2 below. The number of fee-paying students was tied to the number of state-supported students by a quota of 10% between 1992 and 1996 by the State Committee for Higher Education and by a quota of 25% since the adoption of amendments to the Law on Education in 1996. In 1997 twenty three per cent of student entrants were admitted on a tuition-charged basis according to Dean Bogdanov. The faculty retained a generous portion of the additionally raised revenues—73%.

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Table 5.2. Annual Student Admission to the Faculty of Philology of SPbU (1994–1998)

Table 5.3. St. Petersburg Student Enrollment, by Student Admission Status, Financial Obligation, and Residence (1995–2000)

10% was collected by the centralized university development fund, and 17% was used to cover overhead expenses (from which 1% was allocated for the university-wide information technologies, and 1% for computerization of the university library). From 1995 to 1999 both for fee and state supported enrollments at the Faculty of Philology increased. Enrollment trends in the university as a whole. The growth in the number and proportion of fee-paying students can be illustrated in several ways. Table 5.3 provides the actual numbers of enrollees that are non-fee paying (public) and fee paying at a public university (quasi public) in the three categories of enrollees by their admission status. As can be seen, for the public enrollees in each category, there is no growth whereas for the quasi-public enrollees in each category, there is very rapid growth. Chart 5.1 below provides another way of depicting these changes. Finally, in Table 5.4 the quasi-public student enrollees are presented as a proportion of all enrollees. As can be seen, the share of

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Chart 5.1. St. Petersburg University Enrollments (1996–2000)

Table 5.4. Quasi-Public Enrollments at St. Petersburg University, by Student Admission Status as Percentage of Total Enrollments (1996–2000)

Table 5.5. Percentage of Out-Of-Town Student Enrollments at SPbU (1995– 1999)

quasi-public enrollees nearly doubled between 1996 and 1999, an increase from 13.2% to 22.8%. In 1999 more than half of all fee-paying university students (57.5%) were enrolled at two Faculties—of Law (39.2%) and of Economics (18. 3%) (Rector’s Report to the Academic Council for the academic year 1999/2000). The opportunities to raise additional revenues available to different university faculties further enlarged the divide among faculties into “haves” and “have-nots.” Another trend in SPbU student admissions is a marked decline of out-of-town students—not only as compared to the pre-perestroika period, but also through the 1990s (after the temporary rapid rise in 1996) (see table 5.5).

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And finally, the proportion of admissions for distance learning (by correspondence) has been kept low relative to full-time and part-time admissions. This type of educational admissions is still an undertapped source at SPbU for increasing enrollments at a lower cost per student, and for raising additional revenues by charging tuition to such students. Only recently there has been emerging a shift in the university policy to balance its national and international prominence with the outreach to provincial towns and other Russian regions (2000 Annual Rector’s Report). The driving force behind this looming shift is a demographic decrease of the cohort of 15–24 year-olds (who usually replenish full-time admissions) in St. Petersburg and Leningrad oblast as contrasted to the neighboring regions and the average indicators for the Russian Federation. In 2000 Rector Verbitskaya, addressing the University Academic Senate, stated for the first time that SPbU might be better off if it caught up with other higher educational institutions’ more aggressive strategies in recruiting students from other Russian regions. Organizational predicaments at SPbU. The culture of decentralized faculties, which was sustained even during the Soviet period, combined with the divide of university operations in the two distant campuses could have undermined the all-university actions when such were needed. Indeed, SPbU was slow in promoting an all-university infrastructure: a central Office of Marketing and Fee-Charged Educational Services was established only in 1997 with no clearly defined purposes and tasks and much lagged behind individual faculties with their own fully functioning offices (Interview with Vice Rector for Marketing and Fee-Charged Educational Services Dr. Alexander A.Matveyev, 1997). Dr. Natalya B.Nosova, the Head of the Central Office for International Linkages, also complained that individual units were not willingly sharing their information with the central office or using its services, preferring to act directly with foreign partners (Interview, 1997). The centralized Information Office was probably the first newly established central office to service faculties and institutes and to provide a common point of inquiries for potential applicants. SPbU faculties generally retained a generous share of selfgenerated funds (up to 73%). The university overhead for utilities and maintenance was set by “negotiation” between the central administration and faculty representatives rather than on the estimates of actual expenses (Interview with Dr. Matveyev). One reason for that was to encourage units to raise revenues through a greater retained share. The tightening state control over universities’ budgets—both from state allocations as well as from self-generated revenues—made the Rectorship revise the overhead share by 2000.

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The special status of “semi-autonomous” units as permitted by the Law on Higher and Postgraduate Professional Education was granted to a handful of well-to-do faculties such as the Law School, the School of Management, and the Faculty of Philology to help them excel in accountable and revenue-bringing activities. The most striking example of destructive behavior of deeply decentralized units was the rebellion of the Law School to separate from the University against the 1999 governmental intervention to control bank accounts of the central university and of all its units. The Rector had to resort to tough administrative measures including threatening to fire the Dean of the Law School. But over time the conflict was solved, though it seriously scarred the University reputation especially before the student recruitment campaign. SEEKING FUNDS FROM ALUMNI AND CITY Another strategy of St. Petersburg University was to revitalize its Alumni Association and to look to its members for contributions. To date, this has not brought very much in the way of revenues, but it did prove useful in terms of exerting influence on central authorities to bestow preferential historic status on St. Petersburg University in connection with the 275th year anniversary celebrations. Already, the university is making plans for the 300th year anniversary celebrations of the city of St. Petersburg at which time it hopes many alumni will be in a better financial position and more able to make generous contributions. The university also sought special consideration from the city of St. Petersburg, and in this respect has experienced considerable success. The late Mayor Sobchak provided preferential rates on public utilities, and created special scholarships for talented youth so that they were more inclined to pick St. Petersburg for their studies. The current Governor Yakovlev continued annual awards of scholarships to students with promise in research and junior researchers. He used his office to seek support from various corporations with offices in the St. Petersburg area such as Polustrovo, Prombank, Sberbank, and Unilever. SUMMING UP St. Petersburg University from the early days of this transitional period decided to place primary stress on achieving proper recognition for its eminence, drawing on social and cultural capital. Upon the death of Rector Merkuriev in 1993, it sought a new leader that reflected the university tradition and that could promote the claim. So

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a prominent female academician, Professor Lyudmila A.Verbitskaya, was elected. Rector Verbitskaya devoted most of her energies to external relations—to pleasing Moscow and telling the world the St. Petersburg story. She provided broad steering for the inside, and the high competence of the internal management team gradually resulted in a substantial increase in enrollments, especially of fee payers. Also many other sources of revenues were tapped. This approach enabled St. Petersburg University to strengthen its sense of uniqueness and excellence, and to fare well financially. NOTES 1 The decree was enacted by the Senate’s decision on January 28, 1724. 2 This decrease occurred largely due to the demographic decrease in the 15–24 age cohort of 11.7% between 1985 and 1989 while the number of youth who completed 10 (11) years of complete secondary education decreased by 32% (calculated by extrapolation from Goskomstat, 1996, 1999, vol. 2). The age cohorts of 15–19 and 20–24 year-olds will not reach the level of 1980 even by 2004, after which they are going to sharply decline (computation is based on the extrapolation of the demographic data in Goskomstat, 1996, 1997). 3 Some of the first publications outside Russia about the changing Russian University education belong to Rector Merkuriev (e.g., Merkuriev, 1991).

CHAPTER 6 Novosibirsk State Technical University

ORIGINS, HISTORY, AND SCOPE NOVOSIBIRSK WAS FOUNDED IN CONNECTION WITH THE CONSTRUCTION of the Trans-Siberian Railroad in 1893 by Tsar Nicholas II and initially named after him as Novo-Nikolayevsk. The young city was expected to become the administrative center of Siberia, and so it outgrew the older Western-Siberian cities of Tomsk, Tobolsk, and Omsk. Indeed, a rivalry developed between Tomsk and Novosibirsk for the unofficial title of the western Siberian capital. Tomsk in the 19th century was described as the “Siberian Athens” since it had a university established in 1878, it was a center of a dynamic economy with extensive trade, and from 1804 it was the capital of Tomsk gubernia (province) that embraced the territories of four contemporary regions in Western Siberia (Tomsk, Novosibirsk, Kemerovo oblasts, and Altay kray) as well as parts of eastern Kazakhstan and Eastern Siberia (Krasnoyarsk kray). However, the Trans-Siberian Railway was built to run through the newly-founded Novo-Nikolayevsk (a.k.a. Novosibirsk since 1926), so it passed much below the marshy soils of Tomsk. The favorable geographic location of Novosibirsk as a transportation hub played a significant role in the rapid economic and financial ascendance of the new Siberian city in the 19th century. It also preconditioned the prominence of Novosibirsk as the Siberian financial capital during the late 1980–early 1990s of decentralization in the contemporary Russia despite the fact that Novosibirsk similar to Tomsk lacked the rich natural resources of her neighbors—the oil and gas rich Tyumen’ oblast and coal- and nonferrous-metal rich Kemerovo oblast (Kuzbass). The administrative maps of Siberia were frequently redrawn by the Soviet central authorities: from 1930 to 1937 the capital of the Western Siberian Kray was moved to Novosibirsk, and between 1937 and 1944 Tomsk was made a part of Novosibirsk oblast (Zinov’ev, 1994, pp. 304–305, 459). This, however, did not stop the rivalry

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between the two cities while both of them developed their distinct images. The post-perestroika bottom-up search for Siberia’s selfidentity propped up by a promising political and economic alliance of Siberian regions in the “Siberian Agreement” Association was overcome by President Boris Yeltsin’s cunning policy of economic carrot and political stick (Hughes, 1994). By the March 2000 Decree of President Vladimir Putin, Novosibirsk was made the seat of the presidential plenipotentiary for the Western Siberian region, one of seven new super-regions of the Russian Federation. Will this bring the rivalry between Novosibirsk and Tomsk to an end? Nowadays Novosibirsk is the largest urban center in Western Siberia with a population of over 1.4 million people, or half of the total population of Novosibirsk oblast itself. The oblast is not endowed with rich mineral resources. Throughout the Soviet period, agriculture was the major industry along with some defense production. However, the location of Novosibirsk city on the Trans-Siberian Railway and on the banks of the biggest western Siberian river Ob’ made it a convenient setting for the emergence of a dynamic trade center in the postcommunist Russia. In the early 1990s the Novosibirsk financial sector developed into a resilient one, and the inflow of foreign investments in the region increased. A significant resource for the oblast’s adaptation to the market was the substantial layer of highly educated people in the region. Novosibirsk is a center of advanced technical education and research. In Novosibirsk oblast there are 21 public higher educational institutions, 6 branches of Moscow and Tomsk institutes, and 5 non-state institutions, 59 secondary vocational colleges and tekhnikums, Siberian branches of the Russian Academy of Sciences, the Russian Academy of Health Sciences, and the Russian Academy of Agriculture respectively, and more than one hundred research institutes and industrial R&D laboratories. Akademgorodok in the vicinity of Novosibirsk city is the seat for numerous academic research institutes along with Novosibirsk State University, the third most important university after Moscow and St. Petersburg. Sixteen public institutions of higher education in Novosibirsk provide programs in civic training: eight engineering schools of various specialties, two management schools (formerly the state economy institute and higher party school), a pedagogical university, a medical institute, an agricultural university, an institute of trade, a conservatoire, and an institute of social rehabilitation (established in 1994 for retraining the former military and the handicapped). In 1997 these public higher educational institutions enrolled 82,800 students (61.9% of them full-time), while five newly established non-state institutions enrolled 5,400 students or 6.1% of the total student body. The biggest institution in student enrollments is Novosibirsk State

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Technical University with the full-time enrollment of 8,473 students, followed by the State Pedagogical University (7,042 students). The enrollment at all the rest of the institutions ranged from 464 full-time students at the conservatoire to 4,842 full-time students at Novosibirsk State University in Akademgorodok. The history of Novosibirsk is marked by rapid development—both in close connection and in rivalry with the city of Tomsk, the seat of the first Siberian University and the first Siberian Institute of Technology established in 1878 and 1896 respectively. In contrast, higher education institutions in the younger city of Novosibirsk were opened during the Soviet industrialization of Siberia in the 1930s. Seven engineering schools and a pedagogical institute were established there to train cadres for the Soviet economy. The teaching staff was supplied to new institutions by command methods: the oldest Siberian Institute of Technology in Tomsk was divided into eleven branch institutes, two of which were transferred to Novosibirsk and three to other Siberian towns (Vostrikov, Moletotov, 1994; Zinov’ev, 1994, p. 373). During WWII, the engineering schools that were evacuated from other parts of the nation strengthened the local Novosibirsk institutions of higher education, and continued to provide basic and applied research without interruption. The city’s direct rail link with Moscow guaranteed that the products created from this work could be easily transported by rail to the European front. In the post-war 1950s, Novosibirsk was favored as a locus for the establishment of several new engineering schools and institutes. They were expected to provide mass training to technical and engineering cadres in such fields as transport, construction, geodesy and mapmaking, communications, and electrical engineering for the post-war restoration and rapid industrialization of Siberia. As before, Tomsk supplied graduates and faculty staff for the new institutions. The establishment of Novosibirsk Technical University (NSTU) goes back to that time. Two decrees of central authorities (with a gap of three years) marked the date of establishment of the new Novosibirsk Institute of Electrotechnical Engineering: a 1950 Ordinance of the USSR Council of Ministers and a 1953 Decree of the Ministry of Culture (Vostrikov, Moletotov, 1994, pp. 73–82). The institute was upgraded into a university in 1992 under the leadership of its first elected Rector Anatoliy S.Vostrikov (elected in 1990 and twice reelected thereafter). As current events in Russia’s higher education have shown that timely celebrations could play a critical role for institutions of higher edu cation, Novosibirsk Technical enjoyed its 40th anniversary since establishment in 1993, while its 50th anniversary was celebrated in 2000.

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The 1950s was the time when Novosibirsk was put on the academic map of the country and the world with the establishment in 1956– 1958 of the Siberian Branch of the National Academy of Sciences in the picturesque city vicinity referred to as Akademgorodok (Science City). Again the national authorities favored Novosibirsk rather than Tomsk, where research institutes were established in the 1920s and early 1930s. Akademgorodok was planned as a booster of basic research primarily in physics and mathematics that would spin-off related applied research according to the well-known model that was proposed by the Akademgorodok founder Academician Lavrentiev and which is known as ‘the train of technological transfer’. This scheme involved close collaboration between Research Institutes of the Academy of Sciences and Applied Research Industrial Institutes/Laboratories with the affiliated industrial enterprises long before the western idea of research parks and innovation incubators captured the attention of policy makers. Thirty one research institutes and R&D bureaus were eventually established there covering the natural sciences as well as the humanities and social sciences (Moletotov, 1991, p. 5). Thus, the economist Abel Aganbegyan and the sociologist Tatyana Zaslavskaya who worked in Akademgorodok outside the reach of Moscow later gained domestic and international reputations, especially in the analysis of the imperative need for reform of the Soviet society and economy (Zaslavskaya, 1995; Aganbegyan, 1995). Novosibirsk State University was opened in 1959 in Akademgorodok Science City. It was conceived as a research-intensive university modeled after the Moscow Institute of Physics and Engineering (MIFI)—brainchild of the outstanding nuclear physicist Academician Kurchatov. The conditions of Akademgorodok certainly turned out to be favorable for incorporating university training and research with the activities of the Academic and Applied Research Institutes established there as the funds for financing were generous. Many researchers and scholars who came from Moscow and Leningrad developed their loyalty to the Siberian science city; the intellectual atmosphere and romanticism of the setting has remained a fond memory for many of contemporary Russia’s most prominent scholars and academicians. Novosibirsk State University also established one of the first Talent-Developing Boarding Schools in the country specializing in physics and mathematics and a Summer School in Physics and Mathematics for gifted children from Siberia, the Urals, Far East, and Kazakhstan.

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STARTING POINT As a leading engineering school, Novosibirsk Electrotechnical Institute enjoyed a large applicant pool in the 1960–70s. But with the decline of the Soviet economy from the early 1980s, the university began to experience increasing difficulty in placing its graduates. The overproduction of engineers led to a decline in the prestige of the engineering field. By the early 1990s, engineering enrollments were rapidly falling (from 15,610 students in 1980 to 12,505 in 1990; it hit bottom in 1994 with 8,554 students), as was the allocation of state funds for engineering training. Due to rampant inflation, the state funds for equipment purchase, maintenance and repair could no longer keep pace with the escalating liberalized rates for light and heating, construction materials and services, and the cost of computer equipment. Because of their emphasis on applied research, engineering and technical schools were hit hardest among all the Russian higher education institutions: life-threatening was their dependence on contracts with defense enterprises now stripped of state subsidies, and on contracts with former state-owned enterprises now under the pressure to restructure and short of cash. By the early 1990s, the Novosibirsk Institute of Electrical Engineering still relied on selffinanced R&D contracts with enterprises. In terms of their monetary value they were nearly seven times greater than the total of statesponsored research financing and competitive state grants (Chufarovskiy, S.V., Assistant Vice-President for R&D, Inform, August 31, 1992, p.6; 1992 Rector’s Annual Report). By 1997, however, revenues from R&D contracts with enterprises and industrial R&D bureaus decreased significantly. Their share in the institutional total of self-generated funds dropped from 48% in 1993 to 10% in 1997 (Vostrikov, Pustovoy, & Grin’, 1998). The harshest loss for the Institute’s human resources was research (non-teaching) staff who left their positions because of a lack of contract moneys and the curtailed base-line salaries from the state. Thus, during 1992, 186 research staff positions (or 25.5% of the total positions) were terminated at NSTU (Inform, August 31, 1992, p. 6). Another troubling trend that deepened over time was the aging faculty. As in other Russian higher education institutions the inflow of young faculty members and researchers dropped sharply. While the number of defenses for the second doctoral degree increased, the number of defenses for the first doctoral degree dramatically declined, thus putting the future of the University in jeopardy. Student enrollments continued to decline in Novosibirsk Technical during 1990–1993 and somewhat stabilized in 1994 as shown in

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Chart 6.1. NSTU Student Enrollments (1990–1994)

Table 6.1. Student per Faculty Ratios at NSTU (1990–1994)

chart 6.1 below. The freshman class declined by half in 1992 (1,200 students) as compared to 1990 (2,400 students) (Inform, October 13, 1992, p. 2). Though student enrollments declined, the university continued to retain a more or less constant number of faculty. Thus, as illustrated in table 6.1, the number of students per faculty steadily declined. Clearly the university’s capacity for training exceeded the annually decreasing supply of new applicants. At the same time, the percentage of filled faculty positions gradually decreased to allow internal institutional cross-employment of faculty. By 1996–1997 the filled faculty positions were on average 93% of the available positions, ranging from 100% employment at only three out of sixty two chairs to 50% of employment at a few outliers (Interview with the Chief Planning and Financial Officer Antonina M.Grin’, June 1997). So long as central funding was based on the

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number of teaching faculty employed by an institution, these trends need not have been disturbing. However by 1994 the Ministry of Finance and the State Committee for Higher Education expressed concern about the troubling trends in Russian higher education: from 1990 to 1994, the number of teaching staff increased by 12% while student enrollments decreased by 11% during the same period. As a result, the actual faculty/student ratio in the Russian higher education sector on the whole decreased to 1:8 and in some institutions to 1:5 or 1:4. As a response to these trends, the national higher educational agency had to shift the emphasis in state funding from the faculty on payroll to the number of students enrolled. This shift was also supported by the rationale for greater autonomy of higher educational institutions, which were to decide on their own how many faculty positions they would keep under current financial stringency. The policy change came in the spring of 1995 and was a serious blow to many Rectors, who continued to insist that the reduction in funding occurred due to the practice of discrepancy between planned allocations and actually disbursed resources to institutions. This change in the allocation formula could have placed the future of Novosibirsk State Technical University in considerable jeopardy. However, as will be shown below, NSTU was quick to recognize the threat and to implement a dramatic response by building up a resource-saving institutional environment and by overhauling internal personnel policies. LEADERSHIP AND MANAGEMENT As at other engineering schools, issues of enrollment and revenue decline at Novosibirsk Institute of Electrical Engineering were troubling throughout the eighties, but things were brought to a head in 1990. The State Committee for Higher Education required universities to elect their Rectors. The prior Rector of Novosibirsk Institute, who had been a leader of the institute practically since its very establishment in 1955 indicated his desire to retire, and, thus, an open competition among six candidates was set. Among these candidates was Anatoliy S.Vostrikov, a Doctor of Technical Sciences, Professor and Chair at NSTU, who had extensive experience in managing an industrial corporation. Professor Vostrikov made clear his conviction that the university was in trouble and required radical restructuring. None of the other candidates was so explicit in pointing to these problems. Moreover, Professor Vostrikov indicated several concrete measures he favored to begin the recovery. While many of the electors dis agreed with the specific proposals of Professor Vostrikov,

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they applauded his directness and specificity and he prevailed in the election. Immediately following his installation as Rector, Professor Vostrikov began consultations with key faculty about next steps. These consultations led within a few short months to a strategic plan that was accepted by the majority of the faculty. Though the task of preventing the further deterioration of the Institute was formidable, the newly elected Rector proposed to tackle the problems along the following lines: • to encourage faculty initiative to rethink programs and technologies of training future engineers for the market economy and for this purpose to establish a system of incentive remuneration and quality control for personnel; • to launch new high-demand programs, such as the management of enterprises of the industries of the Institute’s specialization (such as power and aircraft engineering, machine-building) and information systems, the two faculties of economics and of applied mathematics were enlarged by reassigning professors and students from other faculties; • to restructure low-demand units through mergers; • to reduce contingencies of freshmen supply through expanding institutional reach to new populations and territories—thus, the emphasis was put on a) recruiting foreign students, especially from China, India, Jordan, and Turkey in engineering and management programs; b) recruiting students from Novosibirsk oblast and other Russian regions with unmet demand in higher education by way of holding entrance exams on location with the support of regional governments or enterprises of Tyumen’, Magadan oblasts and Altay kray; c) meeting new demands in retraining individuals who had already obtained higher education degrees and for retired officers; d) establishing short-cycle degree programs for graduates of technical post-secondary colleges; e) offering short-term non-degree courses and programs; f) offering preparatory courses for high school students in order to secure a steady and quality-trained flow of applicants—most of these programs were for a fee; • to encourage efficient spending by units by both allowing some financial discretion for units and installing accountability checks; • to focus centralized spending on a few key areas and according to the principle of economy of scale (bigness allows better and more efficient financial solutions), such as completing the construction of new buildings, purchasing computers and other equipment.

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With that behind him, Professor Vostrikov began to implement the plan. What stands out was, first of all, his determination to move fast and to address head on the most challenging issues rather than to set them aside for a future date. One can say this was a revolutionary approach, not evolutionary as at St. Petersburg. Secondly, the Rector focused on internal matters in the first place, and after that on external policies. And finally, Rector Vostrikov made it a rule to balance his increased power with an emphasis on consultation with faculty. The “tough” decisions of restructuring and merging faculties could not possibly be implemented without a sufficient centralization of the Rector’s power. A new team of Vice-Rectors provided the institutional steering core for the Rector’s office: First Vice-Rector N.Pustovoy, ViceRector for Academic Affairs Yu. Afanas’ev, Vice-Rector for Research V.Denisov, Vice-Rector for General Operations A.Shorin, the new position of Vice-Rector for International Linkages (E.Tsoy) from 1990, the new Vice-Rector for Self-Financed Activities (B.Ivlev) from 1993, the Chief Financial Officer A. Grin’, and the Head of the Center on Higher Education Organization E. Muzychenko. The Rector personally assumed control over the major financial decisions. The risks and efforts were quickly rewarded. In 1991 NSTU opened a new faculty of business, which quickly became the most sought-after faculty in Novosibirsk. A course in economics was also offered to all engineering students. New programs in social sciences and the humanities that focused on communication skills, ecological consciousness, foreign languages, logic, history of philosophy, culture and technical sciences led to the establishment of a new Faculty of the Humanities in 1991. NSTU moved quickly in the direction of multilevel training programs that differentiated Bachelors’ and Masters’ levels. Fourteen new specialties for Bachelors’ level training were approved by the State Committee for Higher Education in 1992, and four years later Master’s level programs were approved by the national higher education agency. The benefits of the new programs were not immediately clear. Critics warned against mere time-reduction of training programs and potential problems for the employment of graduates. Yet, others recognized that a new system of training gave both faculty and students a larger degree of flexibility and allowed for qualitative change of training that led to higher quality graduates who came to be sought-after and bid-on by employers, to highly competitive student team research for real-life customers, to more R&D contracts for faculty, and to a general boost of the institutional reputation among the receivers of its services (Interviews with Dean Yu. Sidorkin, Chair A.Fishov and selected faculty members of the Faculty of Electrical Power Engineering).

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Table 6.2. Rank of Novosibirsk State Technical University among Polytechnics and Technical Universities

With the leaders pushing new reforms, NSTU took a truly pioneering position in developing multi-level programs while many other technical institutions took the position of cautious observers. With the increasing financial squeeze for public higher education, timing and risk taking were critical factors. In his 1992 Annual Report to the University Senate, Rector Vostrikov encouraged innovative undertakings by faculty members in transforming educational technologies: We should think and act at least a step ahead of others, not wait for others to try and err. We did it with launching a multi-level system of training, we were pioneers in this domain. The goal of the university administration is not to interfere with faculty decisions, but to help to realize their intellectual potential and to embark on innovations. Therefore, the administration calls on you not to wait for instructions from above (Inform, September 29, 1992, p. 1). The rapid and successful implementation of national policy reforms was rewarded. The national ranking of the Institute significantly improved (see table 6.2 below). By 1992 the Institute was upgraded to the status of a Technical University (Novosibirsk State Technical University—NSTU). The prestigious status indicated the competitive advantage of NSTU in the group of technical institutions. It marked the entrance of NSTU in the competitive market of educational services with such elite institutions as Novosibirsk State University. Finally Novosibirsk Technical was upgraded from the financial allocation category of one faculty per ten students to one faculty per six students. Rector Vostrikov focused first on the internal matters of the Institute, and only after strategies were in place to address the critical internal issues did he begin to think about external matters. Once the Institute was recognized for its resilience and ability to change and its position in the new higher educational hierarchy

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improved, political connections presented themselves. In 1993 Rector Vostrikov was elected as chair of the Novosibirsk Council of Rectors. In 1994 he was appointed as a member of the Board of the State Committee for Higher Education in recognition of his national visibility. New opportunities became easier to obtain: “If earlier we made every effort to obtain project grants and to get into new programs, now they have been offered to us, and more often” (1995 Rector’s Annual Report, Inform, February 22, 1995, p. 2). Along with the strengthening of centralized steering, Rector Vostrikov emphasized consultation and sufficiently broad support of faculty: “As distinct from an industrial enterprise, where decisions are often made solely by its CEO, a University Rector should seek support for his major decisions from the majority members of the Academic Senate” (1995 Rector’s Annual Report). The organizational channel for broader faculty participation in the University’s decision-making was the University Academic Senate. To improve its efficiency and to invite participatory decision-making, standing and ad hoc committees of the Senate were formed such as the R&D Council, the Council on Organization of Training Programs, the Board of Deans, the Rector’s Office, and the Academic councils of individual faculties and chairs. These committees also made their members responsible for the decision-making process and prevented resistance by “nonparticipation.” In the opinion of his colleagues and rival candidates for the position of Rector during the three election campaigns (in 1990, 1995, and 2000), Rector Vostrikov appeared as a strong and often authoritarian leader: one who was capable of making tough decisions, of assuming full control over major financial decisions, but at the same time capable of listening and being responsive to criticism. Rector Vostrikov made it a rule to inform faculty of the important financial decisions of the University administration. Under his leadership, NSTU became the only Russian institution of higher education that published its financial reports on a regular basis (quarterly and annually) since 1993. In contrast to old practices Vostrikov treated openness as his advantage. Though some of the faculty members were dissatisfied with his leadership style, they were able to express it openly. The “incumbent” Rector Vostrikov was asked tough questions by faculty during his second election (with two other candidates competing) in 1995; the minutes were published in the University newsletter and showed that faculty members were involved and knowledgeable about changes in the institution. Since the replacement of life-time employment by contract employment in 1992 as a result of a national policy shift, the leader of the Union expressed concern that faculty became less outspoken in negotiating annual

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contracts between the Union and the Administration (Inform, April 28, 1993, p. 5). In analyzing documents and records it is apparent that the Administration responded to critics in a very constructive way, for which the Rector was given frequent credit. The tolerance for dissenting voices was also manifested in the percentage voting for Mr. Vostrikov for the posi tion of Rector—72% of the votes in the February 1995 election for the second term among three candidates, and 76% of the votes in the February 2000 election for the third term between two candidates. INSTITUTIONAL CULTURE Novosibirsk State Technical University (NSTU) is a remarkable example of how an institution at the time of crisis could pool all of its resources together for rapid change. One answer to why rapid change was possible lies in the institutional culture. While NSTU is a large institution, it is also relatively homogeneous and practical. The major programs of training correspond to several related branches of industries such as computer-aided mechanical engineering, information and computing systems, radio and electronic engineering, electrical engineering, and aircraft engineering. The institution is close to the real world of business, production, and R&D. It is aware of the cyclical nature of production with periods of growth and decline, and it recognizes that a real enterprise has to respond timely to these fluctuations. Another feature of this culture is that faculty are familiar with teamwork in their institutes and in their work outside. One may argue that the nature of technical experimentation and invention cultivates a group and interdisciplinary culture, and that it discourages conflicts that threaten institutional survival. Faculty at NSTU do expect to be consulted, but, so long as they are consulted, they are willing to provide plenty of room to the boss to set the direction. Over the months following the Rector’s election in 1990, the Rector initiated intensive efforts to develop a strategic plan in consultation with a wide range of stakeholders. An example was one of Rector Vostrikov’s earliest decisions to establish an advising council of senior professors including Prof. Lyshchinskiy, who had been a charismatic leader of the institution for thirty five years practically since the very establishment of the institution. The mechanisms for the institutional information flow were enhanced by the new press department that was in charge of dissemination of background and discussion materials for the Senate Meetings and for the broader institutional community, as well as for communicating decisions of the central administration. In

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interviews some faculty members complained that the institutional newspaper was turned into a newsletter of the central administration, while others appreciated the information on the decision-making process and looked at the newsletter as a mechanism for broad public discussions. The Rector’s office also sought to include student input into institutional decision-making against the background of an overall national decline of student participation in institutional governance. The Rector’s office supported the recognition of elected student representatives for each student class and provided funds for running a student newspaper. What is remarkable is the success of Novosibirsk Technical in achieving significant consensus in a relatively short period on several major directions for transformation: 1. curricular reform and restructuring faculties and programs; 2. strategies for recruitment of students; 3. expansion of organizational infrastructure; 4. incentive remuneration for personnel; 5. testing new opportunities for research; 6. diversification of revenues and cost-saving measures; 7. decentralization of financial responsibilities to units and transparent accountability checks; 8. centralization of decisions on institutional spending priorities. AREAS OF INSTITUTIONAL TRANSFORMATION Over the next four years from 1990 to 1994, the institution made rapid progress in implementing the proposals in the strategic plan. The outcomes were so impressive that in December 1992 Novosibirsk Institute of Electrical Engineering was upgraded to the status of a technical university. From that time on Novosibirsk State Technical University became known nationally and internationally as one of the most dynamic Russian higher education institutions. However, back in 1990 the situation was laden with difficulties: disbursement of state allocations was monthly-based and irregular preventing any sensible planning for spending. State allocations could not keep pace with inflation and skyrocketing rates for electricity and heating. The enrollments hit the lowest numbers ever. Research staff were leaving the institution, and teaching faculty showed a steady trend towards aging. The primary strategy of the new Rector in this situation was to boost motivation of faculty and staff for the much-needed change. Below the focal areas of the institutional transformation are distinguished.

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Curricular reform and restructuring faculties and programs. The faculty focused their efforts utilizing the newly granted autonomy in curricular matters—to redefine the content of programs and program requirements, to develop appropriate instructional sequencing and instructional strategies. During the 1970s and early 1980s’ economic stagnation period, narrow specialized engineering training became an obstacle for the economic development. Overproduction of engineers led to the decline of prestige and reward of the profession. To regain relevance of programs, far-sighted Deans, such as Dean Yuriy M.Sidorkin of the faculty of Electric Power Engineering, refocused their priorities on identifying the needs of the tran sitional economy for engineers and on qualities of engineering cadres that would be capable of transforming the economy and society. Yet, in the opinion of Vice-Rector for Academic Affairs Afanas’ev, NSTU in general developed responsiveness to students’ preferences rather than to the needs of the economy, and that in the transitional society the incentives for individual returns and public returns to education remained imbalanced. Early and narrow specialized training, characteristic of the Soviet system, was institutionalized in the fragmented organization of higher education institutions—with watersheds between faculties, even in related fields, no mobility for students to change specialization, and often bitter conflicts among faculties for courses to be offered to “outside” students. Facing the need to completely overhaul the curriculum, the faculty members at Novosibirsk Institute exchanged their views in institution-wide discussions on the goals and instructional technologies for training engineers. With the priorities for outcomes agreed-upon, various modes of organizing instruction were then considered. In this way the American-style two-tier system (with the differentiated Bachelor’s and Master’s levels) promoted by the national higher education authorities was adapted by Novosibirsk faculty to the agreed-upon instructional purposes, rather than by a simple imposition of a new administrative structure on the old content programs. The work had started in the 1980s, and in 1990 one of the first in the country Bachelor’s classes was admitted at two faculties. By 1994 the national higher education authorities certified new programs in eighteen group specialties at NSTU. The first Master’s class was admitted in 1994. NSTU advocated the introduction of a new two-tier educational structure parallel to the old five-year studies leading to a diploma in engineering studies. However, the old program was not left untouched. The new understanding of multi-level training envisioned five educational trajectories for students. After the first two years of studies in general courses in sciences, technologies, the humanities

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and social sciences students would 1) compete to enter an additional two years Bachelor’s studies to complete basic professional education, or 2) be recommended to study at secondary vocational colleges, or 3) choose traditional engineering specialized program for an additional two and a half years. At this point, entrance for graduates of vocational colleges to complete engineering training in the accelerated mode of 3.5 years was also made possible. For those who completed the Bachelor’s level three choices would be offered: employment, a selective program for master’s studies with a focus on research, and advanced studies leading to diploma-certified innovation-oriented engineers. The introduction of new educational tracks and tiers had serious implications for the departmental organization of NSTU. To mitigate conflicts between faculties and to coordinate program redesign, an institution-wide Center for instructional technologies and program management was set up in 1990. Later the Academic Senate’s standing committee on Research and Methods of Education charged the Center to take a lead in other internal management issues such as internal quality-monitoring and institutional self-control. Professor Yu. Tselebrovskiy of the department of systems analysis organized a research group that tested the ranking of three faculties and their subunits. In 1997, all the university faculties were ranked by the Center according to their potential in training and research, and the potential for development. The activities of the Center were approved by the national higher education agency, which opened its research lab on higher education organization at the center in 1991. Importantly, related faculties were recommended to merge with the additional incentive of expanded faculty autonomy granted to the merged units. By 1994 seven over-specialized technological faculties merged into three new faculties. At the same time, with the enhanced weight of managerial and social sciences in the general education curriculum as well as in degree-leading programs, three new faculties were opened. The Faculty of Business was opened in 1991, having combined the resources of the chair of economics and management of industrial enterprises and those of management programs run by three other faculties. The Faculty of the Humanities (which in fact combined both the humanities and social studies) emerged as a faculty-level unit in 1990. The Faculty of Computer-Aided Technologies was strengthened by the transferred chairs of information systems into a new faculty of applied mathematics and information systems in response to growing interest in applications of computer technologies. By 1994 the number of faculties at NSTU totaled eleven.

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Strategies for recruitment of students. The strategies of student recruitment pursued new markets, territories, and specific needs in post-secondary education. The concept of marketing educational services was embraced from early on, of which the earliest example was the practice of targeted recruitment of foreign students. As the flow of exchange students was declining, NSTU took advantage of the new autonomy for institutions to set up international linkages and to seek international grants. Foreign student admissions were also viewed as a revenue bringing undertaking because the tuition price for foreign students might be negotiated and did not need to be limited by the cost of training. As early as 1992 the newly set Office of International Linkages recruited two and a half times more foreign students than in the previous year. The proportion of students admitted for fee also considerably increased (from 12% to 46%) as shown in chart 6.2 below. Tuition fees for foreign student varied by level of studies and by field. They were differentiated for group studies or for individually tailored programs. While in the past countries of origin of foreign students were those of the socialist block (Poland, East Germany, Hungary, Bulgaria), in the early 1990s the geography of foreign students shifted towards the developing countries of Asia and Middle East—India, Turkey, Jordan, Mongolia, South Korea and an especially large pool of students from China. From among popular fields were not only engineering studies but also management and marketing at the new Faculty of Business. After a sharp increase of foreign student recruitment in the early 1990s, the admissions of foreign students were not sustained in the following years, being confined mostly to advanced postgraduate enrollments. Among the obstacles were cited difficulties of learning Russian, but most importantly deteriorating standards of living, increasing crime rates and deteriorating opportunities for conducting business in Russia for the foreign graduates of the Faculty of Business. A set of strategies was developed to target non-traditional students, among them in particular: a) for-fee pre-university programs of tutoring targeted potential university applicants among mostly high school students of Novosibirsk city; b) a new Faculty of General Technical Training by Correspondence was opened in 1992 as a collaboration project between NSTU and two physics research institutes of the Academy of Sciences to offer advanced retraining programs for mid-career adults; c) a region-wide Center for Retraining Former Service-Men was opened in 1994 specifically to cater for the needs of the retired service-men, the targeted population of the Center was later expanded to focus on individuals with special needs and the center was transformed into a Regional Institute of Social

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Chart 6.2. Foreign Students Enrolled at NSTU (1990–2001)

Rehabilitation; d) a Regional Center for Retraining Industrial Managers offered tailor-made and short-cycle programs for industrial managers of local enterprises; and e) a Faculty of In-Service Training of Teaching Staff for Secondary Vocational and Higher Educational Institutions focused on the needs of the teaching faculty in postsecondary vocationally-oriented institutions. Except for the Regional Institute of Social Rehabilitation, which was financed by the state and non-governmental foundations, all the other endeavors were self-financed through charging user-fees. Respectively, the weight of revenues from providing education and training services markedly increased in the general pool of selfgenerated revenues at NSTU—from 12% in 1993 to 71.3% in 1998 as it is discussed in the section on diversification of revenues. Two other strategies of increasing admissions should be noted. One was to reach out to eligible candidates in other towns of Novosibirsk oblast (though this pool was very limited: in Novosibirsk oblast 74% of the population lived in urban areas, and 70% of the urban population lived in Novosibirsk city itself), and other Russian regions—especially Siberian regions with high income earnings and limited access to higher education such as Tyumen’ and Magadan oblasts, Yakutia, Buryatia, the Russian Far East, and the neighboring Kazakhstan. The first branch campus was started in 1995 in Neryungri (Yakutia), and by 2001 NSTU had opened four additional branch campuses and nine recruiting offices outside Novosibirsk, compared to only two branch campuses and two recruiting offices in Novosibirsk oblast. Branch enrollments increased from 70 students in 1996 to 3,200 students in 2001. In this process the focus seemed to have shifted from recruiting additional students to the main campus towards “distance education” on locations at some significant distance from the main campus in Novosibirsk.

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Thus, the development of information technologies and informationbased instructional technologies was another strategic priority at NSTU. It was enhanced by several factors: 1) by the expertise of the faculty in this area, 2) by the prioritized institutional investment in the equipment, 3) by the national higher education wiring program cosponsored by the philanthropist George Soros and the Russian Federation government, 4) by the European Union grant to develop distance education resources at a regional university DELPHI TACIS, and, 5) by frequent gifts from western corporations interested in promoting use of their products. Thus, in 1992–1994 there were opened three learning centers by such corporations as IBM, Sun Microsystems Inc, and AEG Modicon. In the following five years additional centers were set up by Borland, Autodesk, Lotus, and SAS. Sun Microsystems, Inc. periodically renewed a contract offering student grants for product application projects. Boeing company also rewarded student design projects with grants. The changes in the population served by the university signaled the expansion of its central mission. In sum, this was achieved by employing various strategies of enlarging the population of potential users of training services through: 1. expansion of programs and courses to various populations and territories; 2. vertical integration of current high school students in the programs of the pre-university department and through integration of specialized high schools (lyceums) into the educational association as a unit of pre-university education; 3. diversifying services delivered and qualifications awarded, such as degree and non-degree programs, short-cycle (accelerated) and tailor-made courses; optional qualification of a “teacher” for graduate students; testing services to high school graduates; multi-tier programs (offering five tracks); 4. reaching out to capture markets by offering courses in high demand: many of these new programs were oriented towards traditionally strong technology-oriented courses (such as telecommunications, computer technologies, information systems, software design), others were redesigned (such as economics of an enterprise/firm, economics and information systems) or totally new (public relations, management, social work). Experience of teaching Russian as a second language to foreign students and of teaching foreign languages at the internationally active institution led to launching programs in Russian and foreign languages—this news was jealously received by some technical institutes and classical universities, which are traditional gate-keepers of the

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Chart 6.3. Annual Entrants at NSTU Main Campus (1992–2001)

specialty. Other new programs, such as tourism management, and food processing technologies, were driven by the aggressive decision to recapture the market niche because similar programs in the nearby academy of economics had been terminated due to a lack of resources. As a result of these strategies the student enrollment reached 16,180 students in 2000 and 18, 592 in 2001. The enrollment more than doubled as compared with the lowest enrollment of 1994 (8,554 students). It exceeded the highest recorded enrollment in 1980 of 15, 610 students. Through the 1990s, a trend was distinguishable in enrollment increase at NSTU by type of admission. The part-time (evening) enrollments gradually declined and were phased out in 1994, full-time (daytime) enrollments and enrollments by correspondence had grown since 1994, the rate of increase of students by correspondence was especially impressive (as shown in chart 6.3 below). As of 2001 almost one third of the students were enrolled by correspondence, the rate of tuition-charged students among them was much higher than for the full-time enrollees (65% vs. 42%). For the 2001 entering class these rates were even higher: 79% of entrants by correspondence and 58% of full-time entrants were admitted for a fee. The surge of entrants to 5,905 students in 2001 was possible through the increase of enrollments by correspondence (four-fold between 1993 and 2001) and tuition-charged enrollments (from 10% in 1993 to almost 70% of an entering class in 2001). The changes in the student body by type of admission turned out over time to be a significant measure for containing costs and enhancing the value of each ruble spent per student. Thus, for example, in 1998 the mean faculty salary at NSTU was 4% higher than the average salary at the nine other engineering institutions in Novosibirsk, while the cost per student was 10% lower than the

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average at these nine institutions. Interestingly, the highest cost per student was recorded in Novosibirsk at the following institutions: a) Novosibirsk State University with its high reliance on crossemployment of staff from the Academy of Sciences, b) Conservatoire, and c) Novosibirsk Medical School, while mean faculty salaries at these institutions were among the lowest in Novosibirsk (Department on Science and Higher Education of the Novosibirsk Oblast Government, 1998). Three major approaches can be distinguished, which allowed NSTU to cope with the challenges and constraints of the external resources the university depended upon. One was to increase internal effectiveness of every university resource available. The performance of the university relative to its potential was assessed as very high by the 2000 ranking of technical universities. The ranking put NSTU at the tenth position, but according to the institutional effectiveness NSTU was placed fourth among 38 public technical universities. The second approach was to develop forms of market behavior in researching the demands in training, creating possibilities and seizing the opportunities (for example, when a nearby institute, with the potential for offering popular management courses but unable to reform itself, closed down, NSTU opened the programs at a new Business School, which is the most sought after at the university). The third approach was to establish collective structures of interorganizational action to reduce the constraints. Thus, with the looming demographic fall and the increased university dependence on enrollments, enrollments at remote campuses for distance education may become critical. While NSTU was systematically developing distance education technologies and infrastructure since 1997, only a handful of Moscow-based institutions obtained the legal permission from the Ministry of Education to offer distant education programs. Such programs by two Moscow institutions were opened in Novosibirsk while NSTU was legally shoved away from this opportunity (Guzhov, 2002). Understanding the criticality of this resource in the future, NSTU and the other two western Siberian universities—Tomsk State University and Altay State University— set an inter-regional university consortium “Open University of Western Siberia”, which has been presently joined by thirty other higher education institutions in Siberia and Far East. Meanwhile the Moscow-based and state-sponsored Russian State Institute of Open Education has opened its branch “Siberian Virtual University” at NSTU. With the expected legislation on distant education in the fall of 2002, the legal barriers to enter the market of distance education will be lifted for NSTU.

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Expansion of organizational infrastructure. To bring about these changes, NSTU initiated a number of organizational transformations. Many new institution-wide centers were launched, while several existing units were transformed into highly effective ones. While the 1991 national Law on the autonomy of enterprises unleashed individual entrepreneurial efforts of the institutional staff, selffinanced units launched by the staff proliferated on campus—often cutting against the central mission of education and training. In 1992 there were 60 self-financed entrepreneurial units which functioned on the campus and were founded by the university’s staff. To oppose the dangerous trends toward diluting the mission, the Rector’s office focused from the early 1990s on developing collegially accepted regulation of such initiatives, on providing incentive rewards for creative and innovative staff efforts along the lines of their primary job expectations, and on setting effective institution-wide units to serve the new needs of traditional faculties and labs. Among the new institution-wide centers were the following: 1. Office of International Linkages—was opened in 1992. Its head was given the rank of a Vice-Rector and introduced into the Rector’s Office. The new Office of International Linkages targeted recruitment of foreign students, marketing and advertising of NSTU for potential foreign partners in research and joint ventures of a broad spectrum. The first advertising materials of NSTU were published in English with the purpose of promoting the institution in the international arena of education, training and research providers. The office provided information on grants for research and scholarships for studies available from the state, domestic and foreign foundations. A special advantage was the proximity to the offices of the American and German exchange studies, which were administered by ACTR (American Council of Teachers of Russian), IREX (International Exchange Research Board), and DAAD (Deutscher Akademischer Austauschdienst— German Academic Exchange Service) respectively and which were located in Novosibirsk as a hub for the south-western Siberian regional offices. The region is inhabited by a large population of ethnic Germans, and the arrival of German businesses in the region was especially noticeable (among them in Novosibirsk Siemens, Borand, Lufthansa and others). Spun out of the office of International Linkages were partnerships in other than education areas, such as joint-ventures in institutional auxiliary enterprises: a self-financed university hotel, student catering services, and a copy-making center. The role of auxiliary

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enterprises at NSTU reduced over time as the opportunities for contracting out such services were made more attractive. 2. Faculty-based self-financed businesses were retained and in some cases expanded. An auditing firm was opened under the faculty of Business, a Center for Language Learning and a tourism company under the Faculty of the Humanities, an Institute for retraining managers in the energy sector under the Faculty of Electrical Power Engineering. 3. While not discouraging self-financed services offered by faculties and departments, centralized institution-wide units were also opened. Thus, the Center of For-Fee Additional Education Services provided an effectively organized environment for the individual staff members interested in running short-cycle and tailor-made courses. Particularly attractive for the staff were centralized advertising, tax-free terms of employment (as distinct from an individual entrepreneurial license for teaching), and concentration of efforts on courses themselves. 4. The Center for Information Technologies (CIT) was opened in 1991. By 1995 NSTU developed a local computer network and obtained access to the WWW. The center was extended through an EU grant (DELPHI project) to provide distance courses in management training. NSTU became a hub of the project’s Siberian consortium (together with Tomsk State University) and is presently working on on-line packaging of courses including development of multimedia instructional materials. It plans to make all university programs accessible through distance learning, while presently some combination of both on-line format and part-time attendance is offered. 5. Some of the new centralized units turned out to be short-lived. An example was the Office for Institutional Commercial Activity, to be headed by a new Vice-Rector, which started in 1993 with the purpose of financial management of available centralized resources such as investments in stocks and saving accounts in private banks. The advantages seemed to outweigh the risks at that time, but later on with the increasing national economic stabilization the advantages diminished, and the Office was closed. In the Rector’s opinion, “a state educational institution was flawed and vulnerable to continue a thoughtful investment policy in a barbaric financial market and under the conditions of weak legal protection” (Interview, 1995). 6. An institution-wide Center for Instructional Technologies and Program Management was opened in 1990 to coordinate curricular change and evaluate applications for institutional grants in curricular innovations. Later on the Center was charged

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with coordinating the development of internal self-evaluation and quality control, especially critical for the institutional self-analysis as part of the outside accreditation, as well as for improving the effectiveness of programs and institutional units. The Center also developed testing techniques for students, for example, since 1993 it has conducted the university-wide entrance tests in mathematics. In 1995 the State Committee for Higher Education designated NSTU to serve as one of the thirty-six regional offices of voluntary national testing service for graduates of general education schools. 7. Along with opening new central units, some existing offices were completely transformed. Thus, under the old system the role of the Office for Planning and Financing and the Accountant Office was reduced to filling out reports according to the centrally defined standards. NSTU made its priority to transform the Office into an effective planning and budgeting unit, necessary for running an institution with greater responsibility and autonomy. From among the case studies conducted for this study, NSTU was the only institution where the information on various aspects of running the university as a whole (such as cost per student, cost per student by categories of expenses, faculty/staff/student ratios, revenues by source, expenditures by type and others) was readily available. The new Office for Planning and Financing was headed by the NSTU Assistant Professor in economics and information systems Antonina M.Grin’. She staffed the office with the best graduates of her department. Within a short period of time under Mrs. Grin’ leadership, the office developed an original technology of record keeping and financial accounting that allowed it to do planning, to promptly make important decisions, and to reduce the contingencies caused by irregular state allocations (monthlyand even weekly-based) and spiraling inflation, which had pushed other institutions into salary arrears and increased the burden of debts and penalties to utility providers. Thus, the transformed office made recommendations about the most competitive tuition fees for fee-charged students. It offered a flexible and popular plan that tied the amount of tuition to the prospect of converting to the no-fee-charged status. Most importantly, the new financial management allowed the university to develop internal regulations on staff policies and personnel remuneration that could be implemented independently in the units. 8. Some university-wide facilities were also allowed to be used for profit. Among them were the university sports facilities, conference and concert hall, in part co-sponsored by the state as a conference facility for running regular meetings in western Siberia

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on financial management and governance of higher education institutions under the new socio-economic conditions. 9. One of the earliest priorities for central institutional spending was to develop the university publishing facilities—a typography and publishing house. These were critical for a) supporting curricular change at the institution through publishing new instructional materials, b) developing research activities and dissemination of research (in 1995 the first issue of NSTU Bulletin of Academic Works was approved by the Academy of Sciences and the MGPE), c) maintaining the information flow among the units through publishing a newsletter, internal regulations; and d) extending revenue generation by the publishing house.

Incentive remuneration for personnel. Concerning revenues from the state, these are paid on the basis of actual positions approved rather than according to the number of positions filled. To cut down on salary obligations during this period, NSTU decided not to fill approximately ten percent of the authorized positions. The excess of funds provided by the state on top of the base-line salaries was partly redistributed among the faculty, and partly reinvested into physical plant and equipment or to pay the current operating expenses. The Salaries Fund constituted only 54% of the total Salaries Expenses at Novosibirsk Technical. One of the first concerns of Rector Vostrikov was to develop and establish clear-cut regulations as to the additional payments to the university employees. The concept of ‘the more effective one works—the more one should be paid’ was generally accepted. Additional positions opened may be shared by the faculty members, thus a) providing more flexibility for the faculty in controlling their time, b) keeping the faculty from moonlighting outside the university, c) providing rewards to the faculty according to the amount and quality of the work done, but not simply to the time employed (the 100% time allocation associated with one position actually does not correspond to the reality, given considerable freedom of faculty in controlling their time or, to put it in other words, a considerable constraint on controlling faculty time). Testing new opportunities for research. During the 1990s new chairs and research laboratories continued to open. Many of them concentrated research efforts on the selected and most promising areas such as environmental engineering, software design, statistical application in economics and others. Special efforts were made to form joint research labs with industrial R&D bureaus in the city. For the NSTU staff such joint efforts meant access to the experimental equipment of R&D bureaus; for the R&D staff—the stimulating role of student research assistants and additional earnings through teaching;

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for both parties—synergy of research thought and enhanced grants opportunities. New chairs were built around the new research agenda and offered additional specialties for student training. While large research institutes with a sufficiently large number of research staff working on a selected number of research problems across disciplines would appear the most effective concentration of scarce resources for boosting the university research function, newly organized units at NSTU in effect contributed to the further fragmentation of research efforts within disciplines. In contrast to the NSTU organizational restructuring of education and support services, where new units cut across disciplines and sciences, research organization at NSTU remained driven by chairs and disciplines—similar to the continental organizational tradition of higher education (see in this regard Clark, 1983, 1993). This argument is supported by the evidence of voiced concerns at NSTU that opening new specialties was driven mostly by either the departmental struggle for survival or the desire to expand the department and, thus, to add to its significance at the university and to increase the paycheck (see, e.g., Inform, May 31, 1995, p. 3). The standing committee for research of the Academic Senate addressed the growing concerns about the aging faculty members and promoted a special institutional policy for preparation of teaching and research cadres for the university. Thus, research grants for students were introduced: in 1994, 33 students from eight faculties were awarded competitive grants. The grant moneys were allocated from the institutional self-generated resources. Since 1994 opportunities to join research groups while being a student abounded for those selected to continue Master’s level training. The effect of these programs is not immediate, but no doubt they will pay off in the long-term. Diversification of revenues and cost-saving measures. All of these changes led to a rapid increase in self-generated revenues. Rector Vostrikov attributed much of the newly declared institutional autonomy to the amount of self-generated resources that allowed actual discretional decision-making for the university as a whole as well for its units. In 1995 NSTU self-generated an additional 25% of revenues on top of state allocations (Poisk, February 10–16, 1996, p. 11). By the year 1998 this number reached 62% (computed from Inform, August 31, 1998, p. 11) while an average in 1998 for all Russian HEIs was 56% (EBRD, 1998). Following the nation’s financial crisis of August 1998 and with the increase of state allocation to public HEIs from 1999, the proportion of self-generated funds diminished for most of HEIs. NSTU, however, continued to increase the proportion of its extra resources that reached 87.1% on top of state allocations in 2001.

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Table 6.3. Sources of Self-Generated Revenues at NSTU (1993–1997) (Percentage)

Source: Date are compiled from Vostrikov, Pustovoy, & Grin’, 1998, computed from Inform, August 31, 1998, p. 11, provided by the NSTU Office of Financial Planning for 1999–2001.

The change in self-generated revenues by their sources is illustrated in table 6.3 below. It can be seen that revenues from contracted R&D for industrial enterprises were initially high but rapidly decreased. The revenues from rent were never trivial, and with the increase of the amount of self-generated revenues they also increased in absolute terms. Clearly, revenues from subsidiary services (such as repair and construction)—not central to the University mission—decreased, while greater emphasis was placed on revenue generation through the fee-charged education and training programs, which were central to the mission of the University. One of the earliest strategies of NSTU was accountable and responsible spending of available resources. The incentives for cost containing were enhanced by the extended discretion of units within the self-generated revenues and by energy-saving installations. The installation of heating meters in 1993 saved up to 60% of utility costs. However, the savings could not keep up with the pace of increase in utility rates. In 1997 NSTU like many other HEIs negotiated the writing off of the state debt for higher education maintenance and overdue institutional payments to public utility providers. This practice of demonetized transactions sharply reduced the incentives for saving—all the institutions irrespective of their utility debts were relieved of it. NSTU was one of the first public HEIs in the country to implement a transparent and integrated budgeting system in 2001 that allowed it to balance all the revenues irrespective of their origin and all the expenditures, to make wise expenditure decisions, to create institutional reserves, and to increase salary payments for the faculty and staff (Pustovoy, 2002). Unlike most other public HEIs in the country, the NSTU office of financial planning and accounting was well prepared for such a change required by the new Budget Code and the Ministry of Finance.

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DEPARTMENTAL RESPONSE One of the characteristic features of NSTU was the early involvement of faculty members in the discussions and change of the core institutional services—education and training. Evidently, with the sharp fall of student enrollments and the decline of engineering training of the old style, the curricular transformation was most pressing in technical institutions. The NSTU leadership built up an institutional strategy to focus on the need to change the content and method for training engineers. Some faculties were better prepared for such a change than others. With the sharply declining economy in the early 1990s additional divides among faculties accrued: the sluggish economic activity in much of the industrial sector critically diminished the employment prospects for engineering graduates. In contrast, other sectors of the economy with attractive employment stimulated enrollments in the corresponding faculties such as telecommunications, transport, and energy-production. Examples of more and less successful faculties were the Faculty of Electric Power Engineering (Dean Sidorkin) and the Faculty of Computer-Aided Mechanical Engineering and Machine-Building (Dean Tyukov) in 1995. While the former initiated innovations in its organization and personnel policies that quickly paid off, the latter appeared desperate due to a decline of the industry it served. In the 1995 faculty ranking, the Faculty of Electric Power Engineering was a university leader in research efforts and expertise of the teaching faculty, it attracted some top students, and had the highest potential for development defined in terms of additional revenues, investment in equipment and sponsor gifts, research moneys and reduction of labor intensive instructional techniques in favor of supervised independent work of students. In the 1997 ranking of faculties, the Faculty of Computer-Aided Mechanical Engineering and MachineBuilding improved its status in large part due to its own effort. It enhanced its research and patent output and embarked on program and course changes that other ten faculties completed. The success of the Faculty of Electrical Power Engineering in producing highly acclaimed and employable graduates was, according to its leader Dean Yuriy M.Sidorkin, due to the faculty’s focus on the technologies of training (Interview, 1997). The major concern of the Dean was to avoid overspecialization of programs and to match new programs with the most promise and needs of the emerging market economy. The focus on methods of teaching skills and competencies rather than transfer of knowledge and facts was sparked by the university-wide discussions and outside experts. Finally, the commitment of faculty members to creative educational approaches

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was sustained through the flexible organization of faculty time and space, and incentive rewards. CONCEPTION OF A TECHNICAL UNIVERSITY The status of university awarded to Novosibirsk Technical marked the recognition by the state authorities of the dynamic transformation of the technical institute at a very difficult time of transition. Formally, according to the new hierarchy of HEIs into universities, academies, institutes, and colleges, the following tasks distinguished universities from institutes or academies: a university should be able to conduct both basic and applied research, to provide programs of pre-university, higher professional and postgraduate education in a broad spectrum of specialties, to play a role of a leading regional center of education, research, and culture, and to serve the local community (Standard Statute about an Institution of Higher Professional Education, 1993). These tasks in essence represented variation in specifics of the tripartite university mission of “teaching, research, and service.” NSTU was one the first technical institutions in the country that in 1990 started implementing a multi-tier system of training that was more flexible in responding to student preferences offering them at least five educational trajectories and choice in elective courses. It was meant to be more responsive to the demands of the emerging labor market and structural changes in the economy. The new system also allowed it to select the most capable youth for R&D work at the Master’s level, and thus, to strengthen the research function of the university (one of the first in the country Bachelor’s class graduated in 1994 and was admitted through selection to a Master’s level the same year). Other accomplishments of NSTU by the end of 1992 referred to strengthening the core teaching staff, significant diversification of programs and courses by fields and specialties, rationalization of internal organization and incentive rewarding of units and faculty members, as well as generation of resources from other than state budget sources. The new status and title of NSTU entailed new obligations—to live up to the status of a university: “The brand name of Novosibirsk Institute of Electrical Engineering is well-known and respected throughout the country and even beyond its borders, but Novosibirsk State Technical University…is yet completely unknown.” Faculty members and alumni, interviewed for this research, expressed great loyalty to their alma mater and pride for its achievements. Thus, Mrs. Evgenia A. Muzychenko, a former faculty member and presently the head of the office of higher education at the Novosibirsk regional administration, praised NSTU as an institution that operated within

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its means in a tight financial environment, as an institution that worked according to transparent internal rules and accountability checks. But similar to other alumni she recognized that it lacked the rich intellectual environment of classical universities like Novosibirsk State, and the authoritative research traditions of Tomsk Polytechnic or Moscow Institute of Technology (Interview, May 1997). An exceptional feature of NSTU’s adjustment to new conditions was the broad involvement of faculty members in a thorough overhaul of curricular content, instructional technologies, and curriculum management. The frequent institutional and departmental discussions about the goals, purposes and methods of engineering training were unorthodox, out-of-the-box. To coordinate this work, an institutional-wide unit for instructional technologies and organizational management was set up in 1991. In line with these discussions, in 1993 Rector Vostrikov presented a draft of the concept of long-term university development that focused on cultivation of the core relation between university educators and students/apprentices, and on the changing roles of faculties, chairs and labs with the introduction of a multi-level system of training. He emphasized the importance of nurturing traditions of commitment to discovery and problem solving for the benefit of the society on the one hand, and the significance of organizing a best-fit research and learning university environment to support these relations. Interestingly, to complete the formation of a new university such organizational attributes as a logo and slogan were established. For a slogan the Latin phrase doscendo discimus “learning while educating” that put particular stress on the core interface between an educator and a student was chosen. From an outsider point of view, however, the slogan sounded somewhat awkward as the tradition seemed to be transplanted without due respect to its history. Indeed, the logo and slogan appeared to be of a more marginal value in the pragmatic, relatively young culture of NSTU—an institution promoted to the high status rank due to an incredible self-organized effort. This stood in contrast to the significantly greater symbolic role of similar institutional attributes attached to St. Petersburg University’s identity and rich history. The authors of NSTU’s long-term strategy understood that the Russian higher education community did not have a universal model for the newly upgraded technical universities and no simple borrowing from the existing Russian Flagship University model or foreign models would do in the case of NSTU. It was said that the NSTU strategy should be tied to specific internal institutional conditions and those of its environment. However, it must be noted that NSTU had little choice in defining its mission. By virtue of a new hierarchy of HEIs

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introduced by the State Committee for Higher Education, the major emphasis for universities in their tripartite role of “teaching, research, and service to community” was to be placed on the research function. Ironically, the research function of NSTU was seen as most threatened. EXTERNAL CONNECTIONS AND INTERNATIONAL PROMINENCE Novosibirsk has the good fortune, among Western Siberian towns, of being favored by the Muscovite elites. This disposition continues in the democracy period. Novosibirsk was selected as the seat for the new western-Siberian super-region. President Putin made point of visiting Novosibirsk in 2000, and not so coincidentally he selected NSTU as the sight for his public address. While many universities strove to recover from the financial setbacks of the late eighties to early nineties, the steps taken by NSTU were perhaps the most dramatic. Moreover, as these changes began to bear fruit, the Rector and other members of the university used various channels to publicize their activities. The successes of the university caught the attention of Moscow decision-makers, and in late 1992 as a reward for these achievements NSTU status was upgraded. It was ranked tenth among technical universities and institutions. The following year its rank was improved (7th). By 2000 NSTU was ranked 10th from among technical universities, and by its overall performance relative to its resources it was ranked even higher (4th). The state funding was increased. NSTU lived up to its reputation as a Russian HEI that was dynamic and open to change. Rector Vostrikov was invited to the Conference of Rectors of Europe (CRE), the chief forum of higher education leaders in Europe. CRE recommended him to participate in the Salzburg Seminar Universities Project, where NSTU’s top leaders were first invited as participants and soon after that as seminar experts. In 1994 NSTU was elected to be one of the coun try’s pilot centers (and the only one in Siberia) to participate in the EU sponsored project (TACIS/DELPHI). The goal of the project was, on the one hand, to adapt teaching of applied economics and business administration to the regional and local needs of the labor market, and, on the other, to extend education and training services to larger populations through open and distance education modes. Also NSTU received much praise for its democratic approach to governance and optimization of institutional governance. Rector Vostrikov was invited in 1994 to join the steering group of the Board of the State Committee for Higher Education and the Russian Union of Rectors.

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LINKAGES WITH THE LOCAL ECONOMY Yet another challenge to NSTU was that of obtaining new revenues from the regional government. However, the financial prospects of the region were not that promising. The Novosibirsk oblast is neither rich in natural resources, nor at the top in terms of average income among oblasts (Novosibirsk oblast was characterized as a medium income level region in October 1993, and the lowest income level oblast in October 1994) (OECD, 1995, p. 58). The tax effort of the Novosibirsk oblast was relatively low—0.83 (that is, even less than the estimated tax collection capacity), pushing the oblast down to the 56th position according to the tax effort ratio out of the total 89. While the tax rates are not large, the economy is knowledge-based. Local political and business leaders appreciated the plight of the university. So they were receptive when the university approached them for cooperation. Almost a quarter of the Novosibirsk establishment are graduates of NSTU—many in business circles. These are viable and resourceful individuals, whose generosity to their alma mater was manifested during the 50th anniversary of NSTU by their direct contributions rather than through the more mundane channel of the NSTU Alumni Association. SUMMARY As a specialized technical institute, NSTU faced serious difficulties from the mid-1980s, but it made the best use of its pragmatic culture and linkages to support the relatively well functioning industries. The change in leadership brought a new individual who adopted the consultative model of management characteristic of a dynamic corporation. The strategic plan was developed in a short period, and the university systematically put it into place. NSTU got excellent cooperation from local leaders. Similarly, the impressed national leaders bestowed honors on the university. From its low point in the early 1990s, Novosibirsk State Technical University was able to regain its footing through sweeping organizational restructuring and downsizing. By the late 1990s, enrollments were again increasing, as were the revenues. In Rector Vostrikov’s view university autonomy was enhanced by financial discretion—in other words, by every ruble of the selfgenerated revenues. NSTU became a model higher education institution in Russia with rationalized, rule-based relations between significantly decentralized units and a wise balance of centralized decision-making over the prioritized areas that allowed it to develop at least a step ahead of others and to be prepared when confronting

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adversity. It became known as responsible university that “lives within its means.” NSTU leaders promoted radical solutions at the meetings of the Russian Rectors’ Union and other national forums to make their steady way to the top of the institutional hierarchy. Nevertheless the leadership was sometimes criticized for its zeal, especially with regard to charging additional user-fees to students.

CHAPTER 7 Kemerovo State University

ORIGINS, HISTORY AND SCOPE KEMEROVO CITY—KNOWN AS SHCHEGLOVSK BEFORE 1932— QUICKLY developed in the 1930s during the Soviet industrialization as the center of the industrial region of Kuzbass—Kuznetsk CoalMining Basin. The Kuzbass is the main fuel and energy base for the eastern part of Russia and its significance has grown after the Soviet Union collapsed. The oblast extracts over 30% of the Russia’s total coal production. The region’s other industries, such as machine construction, chemicals and metallurgy, are based on coal mining. The legacy of the disproportionate development of the oblast remains a heavy burden in the post-Soviet period: industries are predominantly extractive or raw materials processors, social infrastructure is underdeveloped relative to the level of industrial concentration. These biases in the economy, while environmentally hazardous, have nevertheless been lucrative. The oblast economy was ranked in the high group of the 89 oblasts in the mid-1990s. The tax revenues available to the local government were also on the high side. However, the heavily industrialized and the most densely populated Siberian region needed more capital investments. The restructuring of coal mines aggravated the standards of living of many families and their wage arrears instigated miners’ strikes and social unrest. Kemerovo oblast is one of the most urbanized regions in the country with 86.8 % of its population living in cities and towns. The administrative center of the oblast is the city of Kemerovo with 534, 000 people. Over time the city has witnessed the opening of several theaters, a philharmonic, seven public HEIs and several branch campuses with a total enrollment in 1994 of around 32,000 students, or 84% of all the students in the oblast. The only other city in the oblast that hosted HEIs was Novokuznetsk, though branch campuses of out-of-region HEIs were also opened in the other four towns (Mashkovskaya et al., 1997). While the higher education network was

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Table 7.1. Number of Students per 10K of the Population in Selected Regions (1985–1998)

Source: Compiled and computed from Goskomstat, 1999, vol. 2, pp. 32–33, 198–201, 210–212, Goskomstat, 2000, p. 199.

not large, the system of primary and secondary vocational colleges was extensive. Before perestroika in 1985, 55,900 students attended secondary vocational colleges, and 44,200 students enrolled in HEIs. By 1998, the situation reversed—52,200 students attended HEIs, and 47,300 students opted for vocational education (Goskomstat, 1999, vol. 2, p. 370). In 1996 two non-state HEIs were opened in the region. For comparison, in the neighboring Novosibirsk oblast with a smaller overall population, the first non-state HEIs were opened in 1993, by 1996 there were five of them, and by 1999—seven. In contrast to St. Petersburg and Novosibirsk with their high and moderate concentration of HEIs respectively, access to higher education in the heavily industrialized Kemerovo region appeared problematic before perestroika and through the 1990s. The percent of population with higher education according to the last census of 1989 was the nation’s low 8.0%. Table 7.1 above provides data on the number of students per 10,000 inhabitants in the three case study regions as well as the national averages. The Ministry of Education used this indicator as a proxy measure of access to higher education in regions of Russia. The indicator hit the lowest point in 1993–1994, gradually picking up and exceeding the pre-perestroika value by the late 1990s. Kemerovo oblast was always below the national average according to this indicator. The contribution of private institutions to the absorption of the growing demand in higher education was small, and so was the size of enrollment at private HEIs. The regional perspective on higher education made it obvious that the case for the expansion of regional access to the higher education network existed in Kemerovo oblast. The indicator of higher educational accessibility was important in that the Law on Education (in the 1996 edition) specified the federal responsibility to finance no less than 170 student per every 10,000 of

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the population in public HEIs (Article 40, Item 2). In Kemerovo oblast the indicator reached this level only in 1998 reflecting the constraints of economic and financial austerity in the country, complex federalregional relationships, and the strategy toward developing a regional university that was adopted by the Kemerovo State University leadership by the mid 1990s. It should be noted, however, that the number of students in public HEIs per 10,000 of local population includes the growing numbers of tuition-charged students who are not financed by the federal government. Kemerovo State University (KemSU) is a second-generation university, which was upgraded to university status in 1974 during the period of higher education expansion as a result of the upward mobility of the Kemerovo pedagogical institution established in 1954. Similar to many other new provincial universities, Kemerovo State recruited graduates with academic degrees from the old and prestigious universities as its faculty members. A number of linkages between academic schools are carried on by former apprentices and graduates of St. Petersburg University (in the field of philology and literatures), of Moscow research institutes (in the field of physics and mathematics), of Tomsk State University (in the field of chemistry), etc. These linkages are very important for uplifting academic and research recognition. They are also responsible for stimulating upward academic drift. But because of the limited resources provided by the state, the university administration concentrated these in selected areas of research, capitalizing especially on the less costly disciplines, such as the social sciences and the humanities and selected areas of sciences. As a Siberian city, Kemerovo also became the shelter for a number of researchers and scientists who were not convenient for the totalitarian regime, including minorities such as ethnic Germans, émigrés from the Baltic area, Jews and others who were exiled from the European part of the country before WWII as politically unreliable. Strong research traditions at the faculty of chemistry (basic and applied) linked the university with several research institutes situated in Kemerovo including the Applied Research Institute of Coal and Institute of Carbon Compounds. The opening of the Siberian Branch of the Academy of Sciences in Novosibirsk Academgorodok in the 1950s encouraged regional studies to be conducted at Kemerovo State University. These research efforts were crowned by significant discoveries in the ancient history of Siberia as a result of archeological research under the leadership of Professor Martynov, in the studies of the local dialects and ethnography, health diagnostics and professionally related diseases. The university turned into a leading institution of higher learning in the oblast attracting the top high

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school graduates. Its position as a cultural center was entrenched. Students became involved in the university choir and university theater productions, which received a top award at the festival of student theaters in London in 1993. STARTING POINT By the early eighties, Kemerovo State University was a medium-sized nine-faculty institution with much diversity in the faculty. However, like most other new universities, the sciences dominated in academic politics. Partly for that reason, Professor Yuriy Zakharov, a distinguished chemist and Academician of the Russian Academy of Natural Sciences was appointed Rector by the Ministry of Education in 1978. Rector Zakharov enjoyed a few years of calm before Kemerovo State University, along with all of the other Russian universities, began to experience hard times. At the very peak of the hard times the Ministry of Education, in keeping with the new democratic era, asked all of the universities to replace the former centrally appointed rectors with individuals elected by the faculty of the respective institutions. What was remarkable in the case of Rector Zakharov was that some of his colleagues asked him to compete in the democratic elections. He did, and he prevailed in the 1991 elections. And since then he has been re-elected on two subsequent occasions. Thus Professor Zakharov currently has the longest tenure of any sitting rector of a Russian university. He has continued through the hard times to see the regeneration of Kemerovo State University. As with the other institutions, Kemerovo State University was badly hit by the late 1980s’ cut back in central funds as well as by the downturn in the student demand for higher education. Being in Siberia, Kemerovo State, had relatively high operating costs to keep its buildings warm and in good condition. On the positive side, many of its professors were in fields such as management, information technology, and foreign languages that could be redirected to serve new trends in student demand. Also Kemerovo State did not have an extensive research component with the accompanying salary burdens. LEADERSHIP All things considered, it might be said that Kemerovo State University (KemSU) experienced less of a shock than Novosibirsk Institute of Electric Engineering or St. Petersburg State University. Nevertheless, the challenges were grave, and unless KemSU devised a quick solution it was destined for bankruptcy.

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Understanding the gravity of the problem long before most faculty members, Rector Zakharov decided to turn to the members of his core group of advisors for solutions. Within this core group, a number of initial responses were devised, several of which had major consequences for the operation of particular faculties and institutes. In contrast with the consultative style of some other rectors, Rector Zakharov adopted the style of pronouncing these policies at faculty meetings and simply telling the members that these policies had to be put in place if the institution was to survive. Rector Zakharov exercised an authoritarian leadership style, allowing himself to make hard but necessary decisions including the type of research to be done, staffing of the key administrative positions, and approving promotions. He was able to support initiatives and innovations without loosening his overall control. The Rector in effect controlled the Academic Senate since according to the University Charter, he appointed up to 25% of its members and also approved candidates for Faculty Deans and Vice-Rector positions. He expected the members of the university to comply with his requests, and it was even intimated that there would be reprisals for those who did not cooperate. This more authoritarian style, based on a view of the university as a bureaucratic rather than a democratic institution, was not always appreciated by the faculty. But as we will see, it got results. LEGAL LEGITIMACY FOR THE UNIVERSITY’S AUTONOMY The Russian national laws stipulated the principles of university autonomy, democratic self-governance, and academic freedom as important tools for the legitimacy of the “new order” of running HEIs. KemSU developed its institutional Charter and obtained its governmental approval in 1995. Though somewhat restricted by the requirements of the university status with its emphasis on research and multi-program offerings, KemSU managed to state in the Charter its regional aspirations as part of its mission. In particular, the emphasis was placed on the University as a regional center of education, training, and culture; on opportunities for students to access the university through a network of continuous education; on retraining opportunities for adults in the region; and on a few selected areas of research with the articulated regional relevance (Kemerovo State University Charter, 1995). After the adoption of the amended Law on Education in 1996 and the new Law on Higher and Postgraduate Professional Education (1996), KemSU discussed and adopted, upon the MoE’s final approval, its new Charter (Kemerovo State University Charter, 1998). Public

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HEIs were given the right to independently determine how the powers were to be distributed between Academic Senates and Rectors and to determine the pro cedure of electing a Rector. These two regulations will be discussed here since they differ for the case universities in this study. Unlike St. Petersburg and Novosibirsk Technical, Kemerovo State’s Charter focused on procedures in case of a conflict between the Academic Senate and the Rector. Two approaches were offered: the discussion of the disputed issue was to be either delayed as far as possible after the second rejection by the Senate of a Rector’s proposal, or a Rector was to call for a vote of confidence. The vote of confidence would mean agreement with the Rector’s position. For a Rector’s reelection at KemSU, alternative candidates were not required as in the case of St. Petersburg and Novosibirsk Technical; rather if less than two thirds of university members voted for the incumbent Rector, the alternative candidates would be called. The Charters of all the three case universities insisted that the candidates for Dean’s positions should be university insiders. As for the position of a Rector, only St. Petersburg State University Charter specified that a candidate should have a record of employment with the University for no less than five years (St. Petersburg State University Charter, 1998, Article 47). ENTREPRENEURSHIP AND PROFIT-MAKING INSTRUCTION AS FIRST STEPS The initial institutional responses practiced by the majority of higher education institutions in Russia in their desperate attempt to improve finances were a number of spontaneous entrepreneurial activities. These included: • • • •

leasing of real estate, space, and equipment; sales of goods and equipment; consulting and marketing services; share-holding and stock exchange operations.

At Kemerovo State, space in a number of buildings was rented out to private businesses. Some research equipment was sold off, and the patent rights for certain innovations developed at the university were marketed to private enterprises both in Russia and abroad. However admirable these ventures were within the framework of the new market economy, few yielded much revenue for the university at least in the short run. Thought was also directed to investing some university funds in the stock exchange. While stock exchange operations and share-holding are not prohibited by the education

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legislation, the core group at KemSU was adverse to the risks involved in undertaking these ventures. Increasing revenues from “executive” courses and the expansion of tuition paying students. KemSU was fortunate that a substantial number of its faculty were specialized in academic areas that had possibilities for com mercialization. Thus another early strategy was to offer a number of training courses in such fields as management, information technology, and foreign languages. Typically these courses were offered in the evening at a sight convenient to consumers. Fees were charged, and the profits were split between the university and the instructors. The growth of such courses during the early nineties was striking. Later, as will be noted below, many of these courses became incorporated in the new regional plan developed by the university and the regional stakeholders. With the permission of the State Committee for Higher Education in 1991, tuition fees were introduced for the students admitted beyond the number of students subsidized by the state. The State Committee determined that the number of students to be admitted on the feepayment basis should be no more than 10% of the entering class. The legislation legalizing this practice was passed a year later in 1992. The most competitive fields for admission at Kemerovo State University in the early and mid–1990s were the faculties of law, economics, and foreign languages. These faculties admitted the bulk of the tuition-paying students. The enrollment dynamics in table 7.2 shows that the number of students who could afford paying tuition fees has declined during this period, achieving a certain threshold. Even though in 1995 Kemerovo city and Kemerovo oblast were categorized as Russian regions with the highest average income (OECD, 1995, p. 58), bearing the costs of tuition-charged attendance in the absence of financial aid appeared problematic to the average Kemerovo households. Indeed, more and more applicants came from families that are middle-class by status but not by income level. They accepted admission on a fee-pay-ing basis, being encouraged by the university administration that after the first year of study they might convert to a non-fee-paying status. Increasing numbers of students and their parents could not pay the fees in cash: some offered in-kind payments, such as a computer for the admitting department, while others offered services, such as repairing departmental halls and rooms. In-kind payment as a form of surrogate money might present the university administration with further difficulties. For example, one parent, an artist, paid tuition for his daughter with self-priced artistic vases, which the university could not sell. These idiosyncrasies reflected general problems in Russian financial exchange: shortage of cash, insufficient and often difficult to measure

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levels of individual savings, and a wide circulation of surrogate moneys. Dual enrollment, when some students were admitted free and others were charged tuition fees, stirred up concerns for equality and equity of admissions. To maintain accessibility of the university for the regional residents, the University signed a contract with the local private bank on issuing short-term bonds in early 1995. The bonds were to be used for purchasing uni versity education in the fall of 1995. If the students were admitted on the no-tuition-charge status (decision made after passing entrance examinations), the bonds could be used as any other marketable security with some interest gains earned for this period because of high monthly inflation, and the difference between the interest rate of bank transactions and the interest gains was to be paid to individuals. The plan actually saved a number families time and trouble in collecting the necessary amounts of money to be paid immediately after the examinations were over. REGIONALIZATION AS A LONG-TERM STRATEGY Spontaneous entrepreneurship was gradually superseded by the strategy linking Kemerovo State with regional development. The strong authoritarian leadership at Kemerovo State was a positive factor, which helped to focus on the institutional strategy, but on the other hand the authoritarian style practiced by the Rector often proved to be an obstacle to flexibility and quick reaction to new grassroots initiatives. It was understood that the maintenance and development of the university and its future position in the new higher education stratification would require considerable investment, so the university administration turned to the powerful and financially prominent elites in the local and regional arenas. The University Rector came to recognize that it was important for the future of the university to explicitly identify its mission, to ground it in university traditions and aspirations with the final goal of maximizing internal strengths (academic, personnel, financial) combined with a realistic assessment of the environmental opportunities and threats. It was recognized that the university should build up closer links with the locality by a. addressing needs in training, re-training, in-service training through traditional and short-cycle, tailor-made courses and continuing education; b. meeting the demands of different clients (public and private secondary schools, regional government, private firms, individuals, and public enterprises) in consulting, licensing and other

Table 7.2. Total Student Enrollments at KemSU, by Student Admission Status and Year of Study (1991–1995)

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knowledge applications (such as computer services, health diagnostic and rehabilitation center, foreign languages interpreting center, etc.); c. making research more relevant to the region and address its paramount needs (environmental protection; new high technologies in chemical and related industries; etc.). Innovations were not implemented from the moment the decisions were made, but required systematic, sometimes routine work on consensus-building with interested parties, leadership and organizing effort. These efforts finally led to: • Establishing a Regional Association of higher education institutions with the Rectors’ Council as its board of directors: the consortium was designed as a non-governmental body with the goals to coordinate educational programs and phase out duplicate ones, to enhance joint R&D, to share facilities and joint investments (e.g., Academic Publishing House as a joint stock company). Since 1992 the Rector of Kemerovo State University Yuriy Zakharov has headed the Rectors’ Council. The consortium promoted the reform effort of higher education institutions irrespective of their jurisdiction to different Moscow ministries. • Consolidated effort of academic research institutes of the Russian Academy of Sciences and industry-research institutes, situated in the region (such as Research Institute of Coal, Research Institute of Chemistry of Carbon Compounds, Research Laboratory of Thermal Physics, Branch Institute of Economics, etc.) with research conducted at HEIs. Research effort was consolidated in the form of institutes, centers and laboratories of double jurisdiction as units of a matrix-type organizational structure of the respective HEI and a Research Institute. The research priorities were identified by the University as follows: chemistry and physics of solid materials, regional policy and social relationships. By 1993 the Regional Rectors’ Council and Regional Association of higher education institutions and Research Institutes presented a concerted policy on regional higher educational development, but they lacked power and resources to implement it. The Association approached the elites in the region, both the regional administration and the regional legislature. It set up an Expert Council on Regional Educational Policies at the Regional Administration and entered the Regional Economic Council at the Regional Assembly. The Rectors’ Council approached the local industrialists and businessmen. The combined investments from the private business and public industrial

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enterprises exceeded 1.5 billion rubles in 1993. As a result the mechanism of multi-channel financing of higher education institutions in the oblast was conceived in the form of the Regional Program of Higher Educational Development—one of the first and most diversified funding programs in Russia at that time. The “Kuzbass Program of Higher Educational Development” (1993) was a long-term strategy to be implemented as a series of one-year long subprograms, which addressed the four major issues of the regional institutions of higher education: • • • •

Education and Training; Research and Development; Logistics (Physical Plant and Equipment); Social Safety Net for Faculty, Support Staff, and Students.

These Program Sections related to the University’ priorities are considered in detail below. The University aimed at revising its educational programs and course offerings so as to make them more responsive to local and regional demands, to changes in the regional demography and the people’s migration. To justify its regional outreach, the University group presented the following arguments concerning the changes in educational demands in the region: a. the university faced an overflow of traditional applicants (recent high school graduates) in 1991–1992; in the past this excess demand in higher education was partly met by the central universities and institutions of higher education; b. the need for the retraining and in-service training of nontraditional students especially with skills in high demand in the region was on the rise; unemployment affected 5% of the workaged population in the region (according to the official statistics), 54% of whom were women, and 39% of all the unemployed already obtained higher or middle-level specialized education. The number of people with higher education as a proportion of the total population (only 7%) in the region was lower than the average indicator in the country; c. the need to expand access to higher education to traditional students was increasingly recognized; only 15% of high school graduates could be annually admitted to higher educational institutions in the oblast; d. the emerging infrastructure of a market economy and developing self-government in the oblast demanded economists, business managers, public administrators, ecologists, insurance officers,

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lawyers, and social workers. In particular three problem areas stood out. The oblast was striving to obtain the status of a free economic zone with export-oriented industries and needed qualified personnel to achieve this. Concentration of heavy and chemical industries caused environmental imbalance and needed to be addressed. And, finally, the oblast had to address the social conse quences of the structural adjustment in its economy and to prevent unrest among the oblast coal-miners, who staged many strikes in the past decade of turbulent changes. Kemerovo State stressed the point that its academic and research services were targeted to regional and local needs. These included continuous and further education, in-service re/training, contract training for companies and enterprises, tailor-made courses and programs (such as social work, public administration, health insurance, marketing, environmental studies), non-degree courses (in foreign languages, computer skills), professional services (such as licensing of local schools and programs, policy development for the regional government, legal services, medical diagnostics, library services, computer services) and consulting (to the regional government, individuals, and companies). The final document of the agreement with the regional government “Kuzbass Regional Program of Higher Educational Development” stipulated a share of the regional government in funding training programs with the regional focus. The region supported opening new programs in high demand in the oblast such as such marketing, insurance, social work, environmental monitoring and planning. Regional Publishing House, which served the needs of the HEIs in the region, was also partly subsidized by the regional government and by the self-generated funds of HEIs themselves in addition to sales revenues of the Publishing House that obtained the status of a jointstock company. By 1995, funding of research at KemSU had already been diversified, with the biggest part of it shifted from the baseline allocation to competitive grants. In addition to the minimal baseline allocations for academic research (Edinyy Zakaz Naryad), KemSU obtained competitive grants from public and private foundation (such as the Russian Fund of Basic Research RFFI, the Russian Humanities Research Fund RGNF, Soros foundation, Eurasia foundation), and competitive programs funded jointly by the State Committee for Higher Education (Board on Science and Research), Ministry of Science and Technical Policy, and the Russian Academy of Sciences. Innovative applied or programmatic research was funded by competitive grants from the Inter-Ministerial Council on Regional

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Research and Technology Policy (V.Shorin, Chair; Yuriy Yudintsev, Director of the Center “Renatekhs”). The Regional Credit Union offered reduced interest loans and credits for such projects. The state funds for innovations were program-oriented and required a certain level of cost-sharing. Thus, for the installation of the information network that linked the HEIs in Kemerovo oblast with each other and the world-wide web, each HEI was expected to provide the on-campus cable lines. Since the state allocation for university research shrunk significantly for the past decade, many projects of basic research were suspended. The university selected on-going applied research projects to be developed, and concentrated non-governmental resources such as investments from public enterprises and private business on them. Experimental production-lines using new technologies were set up as joint-stock companies with some revenue generated. Among them were small-scale companies utilizing unique technologies for production of ultra-dispersive metals and artificial diamonds, costeffective multifunctional technology of vacuum-plasma infliction of decorative and protective surfaces, innovative technology for production of films for aerial photography and fault detection; production of soft contact lenses and of devices for controlling chemicals in the water and air. In order to maintain its status as a research university Kemerovo State supported generic research in the form of the consolidated effort with the research institutes situated in Kemerovo in the selected areas, such as chemistry and physics of solid materials. According to the Regional Program investments into plant, repair and maintenance were to be shared by the national and regional governments at a ratio of 2.4 to 1 (the central government had the ownership rights on land and physical plant which it leased into operation of the university); the regional government also negotiated reduced rates for such operating costs as electricity, heating, and running water from the local providers. Contributions to the regional social safety net for the faculty, support staff and students were provided by the regional government in the amount approaching 14.5% of the total resources of the Program. WHAT INHIBITS THE REGIONAL UNIVERSITIES? There are certain ambiguities of economic rights and rights of ownership by individual HEIs, reviewed in chapter 4 above, that place obstacles to the fiscal discretion of universities seeking to capitalize on regional alliances in higher education.

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Firstly, the 1992 Law on Education granted all the accredited public higher educational institutions the economic right of getting sufficient funding determined by the federal government. But the Law declared the right without ensuring it. In practice the funds were allocated almost exclusively according to the so called ‘protected’ budget categories, that is, salaries (Article 1), state subsidies of 39% tax on salaries (Article 2), student stipends (Article 8), and student living allowances (Article 9). Credits for salary payments were often delayed, accumulating governmental arrears. Capital investments and repair funds were, in certain years, simply not provided. Secondly, the differentiation between entrepreneurial and nonentrepreneurial university activities is also murky. Article 47, item 3 of the 1992 Law on Education reads that …institutional activities on provision of the envisaged by its charter services and other output are considered as entrepreneurial [and therefore subject to taxation] only if the revenues thus generated are not re-invested into the HEI and/or for immediate needs of maintenance and development of the educational process (including salaries) in this HEI. So, according to the law, the revenue is tax exempted if and only if it is immediately reinvested for ‘the needs of the educational process’. Tax officers and university administrators often disagree concerning what should be considered the immediate needs of the educational process. Any production needs are classified as investments, but can investments in research-intensive production-lines be considered an immediate need of the educational process? It is still a disputable question. The same refers to the treatment of investments into educational infrastructure: capital investments, repair and maintenance funds, funds for upgrading equipment. Thirdly, ownership rights are not clear. Article 39 distinguishes between two kinds of property. On the one hand, land, buildings and equipment do not belong to the educational institution, but are leased free by the co-founder (that is, the state government, represented by the State Committee for Higher Education, and the MGPE as its successor) into HEIs’ operation. On the other hand, funds, buildings, and equipment obtained in the form of a donation or a gift, authors rights on the intellectual output, and self-generated income are in effect owned by the higher education institution. So, HEIs develop over time two kinds of property objects: some owned by HEIs and others passed into its operation. However, there is no mechanism to differentiate between these two types of property, or to protect institutional ownership rights. The fact is that under the current

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Chart 7.1. Structure of Research Finance at Kemorovo State University (1990– 1994)

accounting system and under the conditions of multiple sources of financing it is difficult to trace the origin of all cash transactions made. So, it is practically impossible (and over time absolutely improbable) to prove that some items of equipment or other property were obtained for the institutionally owned funds. Unsurprisingly, it comes to a point that all the property belongs to the co-founder. It is evident that the financial mechanism in higher education needs further development and elaboration. PRELIMINARY OUTCOMES OF REGIONALIZATION The sources of KemSU research financing have diversified considerably since 1993. The share of the self-supported research through contracts with local industries was diminishing over time with the simultaneous financial retrenchment of the federal state. Dependence on the shrinking state allocations was not counterbalanced by the scarce revenues generated by the spontaneous entrepreneurship of the early 1990s. Building linkages and reaching for partners in the region and the locality somewhat relieved the financial burden of the university and the federal state. Chart 7.1 below provides information about the composition of funds allocated by Kemerovo University for research during the critical period from the 1990–1991 to 1994–1995 academic years. In 1994–1995 in addition to the state support, provided increasingly on a competitive basis, and contracts with enterprises, KemSU obtained research support from international foundations such as Soros Foundation, regional government investments earmarked for the projects envisaged by the “Kuzbass Regional Program of Higher

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Table 7.3. KemSU Self-Generated Financing by Source of Revenue in 1995

Education Development” and other regional investment projects such as the “Quality of Life.” Also local state-owned enterprises and private businesses invested in the research intensive production lines. In 1995 KemSU raised 76% of revenue in addition to the state allocations, while the average Russian HEI raised only 25%. While the pursuit of various business opportunities continued at KemSU, two sources of self-generated revenue stood out—education and training for a fee (60% of the self-generated funds) and revenue from research intensive production lines (15% of the self-generated funds) (see table 7.3 below). Tuition for full-time enrollment and short-cycle courses alike was charged to the students who were admitted above the state-supported quota, who had already acquired a higher educational diploma but needed to obtain training in an entirely new field (so called ‘second higher educa tional’ enrollments), and to those who were in need of upgrading their skills at in-service and post-service training courses provided by the KemSU-based Regional Center of Retraining of Cadres and by individual faculties at KemSU. The fiscal support from the local government should not be exaggerated, and yet it presented a tremendous change from the past practices of total dependence on the federal funds. First of all, despite the great number of competing needs in public spending, the oblast leaders were willing to prioritize investments into higher education. Second, KemSU faculty and leaders worked hard to provide valuable contribution to the regional development and also to convincingly argue the case of the university becoming more region-oriented. Thus, the reputation of the university as a regional contributor and the relentless advancement of this image by its leaders were rewarded. Among the major objective conditions for the regional support was the tax retention capacity of Kuzbass, a resource rich and export-ori-ented region with one of the highest in the country income levels in mid 1990s (OECD, 1995, p. 58). All of this made it possible to introduce a local educational tax for the enterprises and companies at the rate of

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1% of their salary funds, the most protected (not volatile) budget category. The tax revenue was then split between secondary and tertiary educational establishments. However, with the changing taxsharing relations between the federal and regional governments, the education tax was omitted in 1998. GROWING LINKAGES WITH THE REGION Developing links with the regional stakeholders was not an easy job for the university leaders. The oblast faced multiple challenges on the way to developing market relations and democratically decentralized governance. Though richly endowed, Kemerovo oblast had a difficult legacy of extracting and heavy industries combined with the dependence on other regions for food and consumer goods. In the modern history of Russia, Kuzbass has become known for its labor unrest. The 1989 coal-miners strikes were seen by many observers as “perestroika from below” especially as the demands of the striking miners for increased enterprise autonomy and an end to the party monopoly were congruent with Gorbachev’s plans for political pluralism and a regulated market economy (Rutland, 1991, p. 320). In the early 1990s miners continued to strike on a smaller scale demanding their long overdue backpay. The effects of the structural adjustment of the regional economy caused their living conditions to plummet. The political opposition between the regional legislature and the regional administration was another challenging factor. A leader of the regional legislature Aman Tuleyev ran as the nation’s presidential candidate in the 1991 elections, and in the 1996 critical presidential elections he yielded his vote to the communist candidate who eventually lost to Boris Yeltsin. The region as a whole supported its candidate and his choice. The change of the federal-regional relationships from the early 1990s of “oiling the squeaky wheel” to the punishing policies from the mid-nineties for the regions that “voted wrong” had an immediate effect on sharing tax revenues and the federal investments in Kemerovo region. Earlier the regional administration challenged the federal center for the privileges in direct foreign trade and investments in the form of a free economic zone but not unlike several other candidate regions it failed to obtain this concession from Moscow. The observers attributed the challenging regional behavior and the internal political problems to the fact that the oblast was the last one among the Subjects of the Russian Federation where gubernatorial elections were held (OMRI Russian Regional Report online, February 12, 1997). In the early 1997 with the continuous conflict between the regional executive and legislative branches, governor Kislyuk warned that Kemerovo oblast

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might be merged with the neighboring regions (ibid.). The move was expected to be in the interests of Moscow politicians as well as the recently elected leader of the “Siberian Agreement” regional association, Novosibirsk Governor Vitaliy Mukha, who might want to revive his idea of creating a Siberian Republic by merging the regions that composed the association. However, the association’s deputy chairman, Tomsk Oblast Governor Viktor Kress, dismissed the possibility of partitioning or merging any of the Russian Federation’s regions. In July 1997 Tuleyev was appointed as the head of the Kemerovo regional administration and soon in October 1997 he was popularly elected as governor of the region. Since then the economy of the region has picked up thanks to the governor’s effort to obtain funds from the federal government and to attract domestic and foreign private investors. With the sustained high rate of development, an economist predicted the coal industry would make Kemerovo oblast financially self-sufficient by 2005 (CDPSP, 53(34), 2001, p. 10–11). Meanwhile the local Technical University and colleges produced too few coal industry special ists and with skills unfit for the modern equipment and cutting-edge technology that the industry used. In response the governor adopted a program that should solve this problem. Since his popular elections in 1997 Governor Tuleyev looked for explicit youth policies. Under his leadership, the regional government designed unique programs and projects in education, including higher education. Thus, for example, scholarships and need-based loans with the forgiveness mechanism were introduced for out-of-town students and students from low-income families. In November 1997 Governor Tuleyev called KemSU a truly regional university at the ceremony of the opening of the university Internet Center. The launch of the Center was made possible due to the Soros grant to wire 33 regional universities in Russia on the condition of matching funding by the federal and regional governments. KemSU Internet Center became the locus for developing the region-wide system of intercommunication and access to the World Wide Web. Under these complex regional conditions, Rector Zakharov did his best in cultivating connections with the local political and economic elites. He quickly won the confidence of his counterparts—Rectors of other eight HEIs in the region—and led the Regional Council of Rectors. Rector Zakharov represented the university and other HEIs on several committees and councils in the region. The linkages were reciprocated. When the 1996 Law on Education (Article 41, Item 10) limited tuition-charged admissions in high demand fields, the Rector sought several local public organizations as contractors of tailor-made for-fee programs, since public organizations were not subject to the

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legal limitation. When in the early 1990s, the university department of pedagogy learned about the western concept of continuous education, they eagerly began developing it. By that time many faculty members taught advanced courses at local schools in the pursuit of additional income. Advanced learning and selective elite schools proliferated in large cities of the region and became a welcoming ground for university lecturers. Efforts of individual faculty were soon integrated into a system of university-school linkages, which became known as a Center of Continuous Education. Rector Zakharov appreciated the concept as a rationale for the regional university aspiring to enlarge itself through mergers with smaller colleges in towns across the region. This was not an easy task. Only by 1994, with the considerable support from the regional government, the MoE decreed the merger of Belovo College in Kemerovo oblast with KemSU. In 1995, 1998, and 2000, three more colleges in three towns of the oblast (Novokuznetsk, Anzhero-Sudzhensk and Prokop’evsk) were integrated with KemSu as their regional branch campuses. By 2001, enrollments of the KemSU extended regional system reached 17,900 students, including 9,500 full-time and part-time student at the main campus and 8,400 students at branch campuses. This was more than a doubling of enrollments since 1993. By 2000 KemSU was 12th among classical universities in the country with the highest amount of self-generated revenue per FTE student. Its overall rank stabilized between the 12th and the 15th positions among classical universities during the 1990s. The good relations of the University with the Department on Higher Education and Youth Policy of the regional government were beneficial to the university in many ways. Particularly in the mid 1990s, when out-of-region private institutions reached the oblast to recruit its applicants who were willing to pay tuition, the Department on Higher Education took an active stance on checking the necessary credentials of new private undertakings in the oblast. This move was due in part to the increasing occasions of fraud and in part to the lack of powers of the regional government to ensure quality control of new HEIs since the MoE revoked the right to license new local HEIs. Several private HEIs withdrew from Kemerovo oblast. KemSU was the primary beneficiary of this campaign. KemSU turned into a dynamic, regionally oriented university network. However, the deep-seated problems of the aging faculty and the low retention rate of the junior faculty, despite the increase of postgraduate enrollments and of the number of new candidates of sciences, threatened the future of the university. One of the troubling trends was an increase in the flight of new candidates of sciences after defending their dissertations at KemSU.

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INSTITUTIONAL CULTURE The approach taken by KemSU to confront the challenges was different from the strategies of the two universities discussed above. Kemerovo State University was a relatively new higher educational institution with a strong and confident Rector, who had led the university for over twenty years. The faculty were prone to dissension because disagreements and potential conflicts tended to be suppressed by the heavy-handed leader rather than to be worked out in mutually accepted compromises. The university Rector decided to take charge, much like the head of a large corporation. The Rector drew on his internal group to develop strategy and then simply moved forward. The primary emphasis was, thus, placed on getting things done and a low priority was given to seeking consensus from among the faculty about the strategy and plans. KemSU appeared to have no common culture other than a grudging respect for the Rector, and the inclination to accept whatever he came up with. In mid course, following their managerial instinct that the university might survive adversity if it rapidly enlarged its enrollments and secured additional funding from both national and regional governments, the Rector and his team adopted the concept of an extended regional universi ty with branch campuses all over the densely populated oblast to serve these needs. The Rector and his team began to give much greater attention to the concept of a regional culture. To succeed in this, they courted regional leaders, who changed thrice during the past eight years. The Rector managed to stay in good repute with the rival candidates for the oblast governorship as well as with other key persons in the oblast. Much effort was devoted to promoting the culture of regionalization of higher education among regional leaders, even while many faculty questioned its appropriateness. But the stress on regionalization led to many worthwhile developments and the emergence of a new and somewhat unique image for the university. SUMMING UP Kemerovo State University has emphasized its dual purpose of serving science and arts, and at the same time of taking the lead in the social, cultural and economic life of the people in the region (Kemerovo State University Charter, 1993, pp. 4–5). The current priority is to foster better linkages of instructional programs and research with local needs and resources. The goal is to create a multi-campus regional university system in order to make higher education more accessible to the residents and

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increase opportunities of long-life education. Growing number of graduates apply to tertiary education in their home region, though the higher education aspirations of only 15 percent of them are met by the enrollment capacity of local institutions of higher education. Kemerovo State is a somewhat unusual success story for the new democratic era. The Rector who initiated these changes was the same individual who had been appointed during the Soviet period. Faced with the new challenges, he decided it was his duty to come up with solutions. He developed most of the early initiatives through consultation with a limited circle of hand-picked managers, and exercised strong leadership from above to elicit cooperation from the broader faculty. Given Kemerovo State University’s status as a second-generation university, there were limited prospects for special treatment from the central government. Therefore, the Rector and his team focused on entrepreneurship and on cultivating close ties with regional stakeholders. The leadership team was able to make many interesting connections. Also, they drew on selected faculty to launch several revenue-generating research-based production activities. As a result, of the three cases discussed in this book, Kemerovo State University was the most successful in supplementing state support with resources from non-conventional sources, especially in the region. In 1995, for example, 76 percent of all of the revenues of Kemerovo State University was self-generated. This self-reliant approach created many hardships for those indi viduals who did not buy into the Rector’s plan, and quite a few severed their ties with the institution. But the approach did enable the university to overcome the challenges of austerity and maintain its position as one of the better regional universities of the Russian Federation. NOTE 1 By the end of 1994 forty-eight Regional Programs were developed in the Russian Federation.

PART IV Conclusion

THIS STUDY HAS EXPLORED THE NATURE OF AUTONOMY AND ITS implications for the future of the Russian university in the transitional era. In this concluding chapter, attention turns to what has been learned about the Russian case. The chapter offers several principles of autonomy and comments on the role of autonomy in helping the Russian university adapt to the changing context.

CHAPTER 8 Discussion and Conclusions

STRATEGIES OF INDIVIDUAL UNIVERSITIES TO ENHANCE INSTITUTIONAL AUTONOMY THROUGH THE LATE EIGHTIES THE SOVIET UNION SUPPORTED A STRONG state system of higher education based on the Napoleonic model with a bifurcation of teaching and research. On the one hand, there was a select set of national academies for basic research, often adjacent to the lead universities; related to these were numerous institutions for applied and development research. On the other hand, there was a modest number of universities for high-level teaching and many additional institutions for advanced specialized training. This bifurcated system was responsible for the Soviet Union’s remarkable accomplishments in scientific research as well as an impressive record of access and equity. But there was a price paid in terms of constrained academic freedom. In the midst of the 1980s’ perestroika movement a decision was made to abandon the centralized bifurcated system—towards autonomous universities where there would be an integration of research and teaching. This policy was partly based on the new democratic ethos. But equally compelling was the economic collapse, which led to a sharp reduction in the state’s capacity to support various responsibilities, including that of supporting higher education. So universities were asked to look after themselves, to become more autonomous. Autonomy has been defined as a university’s freedom from outside control to run its own affairs. Of course, in open systems autonomy is never absolute. Organizations are involved in extensive relations with other organizations and are also influenced by accepted norms of appropriate behavior. So in considering the degree of autonomy of an institution, it is important to take account of the organization’s relations to both its socioeconomic and cultural environments. In that the universities under consideration in this study are public, our

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primary focus has been on the relation of universities to government both at the national and local level. In chapter 2, we introduced several key concepts that are critical for the understanding of autonomy. In particular, we highlighted six groups of factors that are believed to effect the relative autonomy of any social organization—its rationale, its constitutional-legal basis, its political linkages with external agents, the quality and creativity of its leadership, the depth of its managerial team, and the financial resources it can mobilize. These factors can be thought of as six foundations of a hexagon. The absence of any one may result in a crumbling of the hexagon. When one of these factors is weakened, the others may be mobilized to compensate for it. In the current Russian context of austerity, finance is key. In that one proposal of the Russian transition was to decentralize all governmental activity to the 89 regions, the focus of chapter 3 was on the efficacy of the regions and their interest in higher education. It was found that oblasts varied widely in their capacity to provide services for their citizens. Perhaps the most constraining factors were their managerial capacity and their financial strength. When the central government proposed that universities link up with and look to their oblasts for support and direction, most universities protested. They did not believe the regions alone had the prospect of understanding or supporting universities. While not rejecting possible linkages with regional and local governments, the universities looked to the central government for their sustenance. While the central government certainly valued the contribution of the universities to the nation, it lacked the resources to provide from its own dwindling revenues adequate support for the universities. So in its formulation of policy for the universities, it stressed the centrality of autonomy as the foundation for the future of the Russian university. While stressing the need for universities to take autonomous initiatives to improve their situation, the central government continued to provide support to the universities. This level of support sharply declined in 1992 and continued to diminish through 1998. State expenditures for Russian higher education as a proportion of GDP adjusted to inflation decreased to one third of the 1992 level (EBRD, 1998), while the amount of GDP itself steadily diminished. But far more important in its impact on university decision-making than the total amount of central support was the nature of this support. While in the early years it was provided primarily as a function of the number of staff employed at each institution, by the mid-nineties the primary basis for determining support was the number of non-fee paying students enrolled at the universities. The major exception to this principle was the center’s

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agreement to recognize certain institutions as centers of excellence deserving special consideration. By the mid-1990s the state allocations to public institutions were reduced to salary allocations, mandatory transfers as percentage of a salary fund, and student stipends. All the allocations were earmarked to these expenditures. Both the merit-rewarding and need-compensating functions of student stipends continued to erode, though student stipends amounted to nearly 40% of total state allocations to public institutions of higher education. Baseline financing for research declined while additional research moneys were made available through competitive grants and programs. DISCUSSION OF CASE STUDIES Part III of this book presented the case studies of three Russian higher educational institutions that aspired to take advantage of the newly granted autonomy from the state and to reinvent themselves in the new socio-economic environment. They also challenged the old hierarchies of the higher educational system and re-imposed (in the case of St. Petersburg) or significantly improved their status (in the case of the “younger” provincial higher educational institutions of Siberia). The most daring effort was undertaken by Novosibirsk that made a striking transition from a specialized Institute of Electrical Engineering to a modern, versatile, and dynamically developing flagship university. All of these universities began with distinct starting conditions and confronted different challenges. And so the paths, according to which they decided to approach these problems, varied: St. Petersburg stressed its cultural resources and the prestige of its faculties, Novosibirsk its managerial resources, and Kemerovo its political linkages with various regional bodies. While the paths varied, each was able to make significant progress toward strengthening its autonomy and improving its prospects for survival in the new era. While subjected to the challenges of the changing universitygovernment relations and the dramatically reduced public allocations, all three Russian public universities sought their distinctive strategies in dealing with the environmental constraints and grasping the emerging opportunities. Table 8.1 below summarizes the distinct paths of the three Russian universities according to the extent they made use of their six major resources—rationale and legitimacy; legal framework; political linkages; leadership; managerial capacity; and financial resources—to re-adjust themselves to the changed environment and to claim the newly granted autonomy. The proposed model of analysis of a

DISCUSSION AND CONCLUSIONS 211

dynamic university also takes into consideration the starting point before the changes, the regional context and institutional culture, and the current issues that confront the universities. St. Petersburg State University, Russia’s oldest and one of its most renowned universities, faced declining enrollments and a sharp cutback in federal support from the early 1990s as well as the unexpected death of its Rector, a brilliant scientist, who had begun to re-build the institution. After a year of internal discussion in 1994, the University conference elected a new Rector for the first time in the post-Soviet era. The Rector decided that the key to St. Petersburg’s future was to regain its position as a top institution deserving special treatment from the central government. Accordingly the university announced its plan for a highly visible celebration of its 275th anniversary, which included invitations to many prominent academicians and politicians from both within Russia and around the world. Through this strategy of symbolic illumination, drawing on St. Petersburg’s extensive cultural capital, the University was extended recognition as a special institution by the State Duma with the corollary privilege of receiving a level of support per student several times higher than the average university. At the same time, individual faculties of St. Petersburg University were able to develop many new revenue-generating programs. At Novosibirsk State Technical University, radical restructuring was the response to changing market conditions. With the collapse of the economy, this technically oriented institution lost large sums of research revenues. As the job market for engineers eroded, it also experienced plummeting enrollments and thus faced the prospect of a sharp cutback in state subsidies in the early 1990s. The newly elected Rector, who had prior experience as a Chief Operating Officer in an industrial corporation, proposed a full-scale review of the university’s mission. The faculty responded to this call and worked harmoniously and efficiently to identify new approaches. Out of the ensuing review emerged a strategy of orienting all academic offerings to market opportunities as well as engaging in new commercially oriented research that would be of interest to private enterprises. Novosibirsk Technical University, within a few short years, was able to get back on its feet. The extent of the university’s reforms as well as the Rectors’ skillful promotion of them received much publicity. The Rector was appointed to the Board of the then State Committee for Higher Education, and the state readjusted its subsidy so that Novosibirsk Technical was more favorably treated. Kemerovo State University was not hit as hard as the above institutions by the economic downturn. On the other hand, it had dimmer prospects for gaining favored treatment from the central

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Table 8.1. Summary of Part III: University Pathways to Success

DISCUSSION AND CONCLUSIONS 213

government. Accordingly, the Rector decided to establish closer links with the regional government and other local entities in the expectation that these entities would pay for new services provided by the university. Given the relative youth of Kemerovo State and its faculty, the Rector who had been in office since 1978 often built these new relations on his own. Once these links were established, he assigned faculty for the follow up. Kemerovo State established several branch campuses throughout the region by incorporating into the

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university structure a number of secondary vocational colleges and branch campuses of out-of-region institutions. Key faculty were also encouraged to work on the commercialization of research. The institution’s top-down leadership style is a clear contrast to the bottomup approach at Novosbirsk. Through these and other strategies, Kemerovo State University was able to increase its off-budget revenues so that, by 1999, they made up an additional 83% percent to the state allocations—an impressive accomplishment, given the university’s exclusive dependence on state subsidies ten years earlier. In terms of self-generated revenue per student in 1999, Kemerovo State was 78th among 355 public HEIs in the country, or seventh among universities of similar profile and size. The distinct paths selected by the three universities bore fruit: all three universities improved their national ranking, enhanced their financial standing, diversified their programs, offered new services to meet new demands in training and research, and strengthened their managerial capacity. However, the rationales for change and institutional visions, the managerial strategies, the leadership styles, the types of political linkages, and the forms of additional financing differed among the three universities. Irrespective of their distinct paths, all three universities were able to enhance their autonomy in order to effectively respond to extreme challenges. Similar to the links between the rationale for regional decentralization and democracy in the new post-Soviet Russia, the rationale for university autonomy was coupled with the endorsement of the principles of institutional democratic self-governance and the norms of academic freedom. Development of the university mission was an important milestone on the road toward legitimizing the autonomous status. Though the mission statement in institutional Charters were limited by constraints of the institutional status hierarchy and therefore were driven by similar criteria, each of the case universities created distinct images for themselves. St. Petersburg aspired to reimpose itself as a premier national university with an established international reputation and reinforced crossregional visibility—primarily in the Baltic Sea Countries and Russia’s North East. Therefore, the emphasis was put on advanced studies and research. Novosibirsk State Technical aspired to overcome its narrow specialized technical profile and develop into a full-fledged diversified multi-faculty university, the highest institutional status in the new higher educational stratification. Novosibirsk saw its future position as a highly competitive Siberian university with a reach beyond the oblast. Kemerovo State University asserted itself as a regional classical university able to extend access to higher education to the dense and highly urbanized population and the culturally mixed

DISCUSSION AND CONCLUSIONS 215

communities in the oblast, to better serve the needs of public and private enterprises, and to assist the local and regional governments meet the development needs of the local communities. PRINCIPLES OF AUTONOMY Much of the analysis reported in this study has focused on the approach of Russian universities, both as a group (Chapter 4) and as separate institutions (Chapters 5, 6, 7) to their changing context and the new opportunities for more autonomous actions. In this concluding chapter, several broad principles relating to autonomy are advanced as follows: 1. Autonomy of higher educational institutions is relative. It is constrained by the influence of other social organizations as well as the common norms supported by the social system as a whole. 2. Autonomy is based on six key resources: culture, law, leadership, management, political linkages, and financial stability. In the recent Russian context, financial stability has been the preeminent challenge. Thus, the interest here has been in the strategies deployed to realize financial stability both by the system as a whole and especially by individual universities. 3. Organizations devise strategies to strengthen their autonomy that, taking account of their context, build on their comparative advantage a. In higher education, traditions and culture can be an exceptionally valuable resource for nurturing autonomy. St. Petersburg State was especially adroit in capitalizing on this resource. Consequently, it was successful in enhancing its external relations with various patrons—the Ministry, domestic and foreign foundations, foreign universities and international academic societies. Relatively young and provincial universities like Novosibirsk Technical and Kemerovo State faced the task of rebuilding their institutional identity anew. Somewhat counteractive to this process of mission-differentiation were the uniform requirements attached to the “university” status that these institutions were granted, namely a focus on research and an expansion of the spectrum of educational programs. b. Novosibirsk, being a relatively new institution, could not draw on tradition. Facing a more alarming situation than others in terms of declining enrollments and diminishing prestige of the engineering profession, Novosibirsk Technical had to act

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quickly to address the core problems of instructional renovation. Incentive-oriented personnel policies and vigorous institutional leadership motivated the faculty for change around several core areas and led to bold restructuring. c. Kemerovo had a tested leader who decided to take advantage of the institution’s unique position in a densely populated and relatively affluent region. Consequently, Kemerovo State stressed new alliances with the regional government and business leaders. It was able to bring in new contracts as well as to attract new students. In a way, it did more without Moscow help than any of the others. 4. The strength of a university’s autonomy is intimately related to the autonomy and dynamism of the units within, so long as they share a common culture. The staff of Novosibirsk Technical shared a common culture by virtue of their strong science and technology bias. The pragmatism of the faculty culture in this institution enabled a more or less unified response. St. Petersburg is a much more complex institution with diverse academic cultures; at the same time, the rich institutional symbolic history instills everyone with enormous pride for the St. Petersburg tradition and the “brand name”. Thus, the approach at St. Petersburg was to build on this common sense of belonging to an outstanding tradition by encouraging each unit to develop their unique response to the crisis. Kemerovo State was perhaps the only institution that did not base its response on a shared culture; instead the Rector’ political skills helped the institution to reach out to various local partners, while internally units with “special” relations with the authoritarian Rector fared best. However, so long as the advantages of institutional autonomy depend on a strong institutional leader in the case of Kemerovo State, its institutional autonomy appears more volatile and may decline with the demise of its leader. 5. While autonomy is a general term for the state of an organization, within the organization its impact is uneven. In some organizations, the Rector may experience greater autonomy over personnel and finance, but the deans as well as individual professors may experience a decline in freedom due to either new standards of accountability or arbitrary decision making. When autonomy is extended to individual faculties—“every tub on its own bottom”—some, by virtue of superior leadership, market position, or other advantages, are likely to fare better. In yet other organizations, certain faculties may be favored with generous

DISCUSSION AND CONCLUSIONS 217

resources and discretion, while others find they are expected to subsidize the favored faculties. 6. Legal autonomy alone does not eliminate vulnerability of an institution to outside contingencies. Traditional decentralization of fac ulties at St. Petersburg may induce some of the units to rebel against the center at times of increasing outside pressures. Such a situation at St. Petersburg was taken advantage of by outside competitors to the detriment of the university reputation. “Having each tub on its own bottom” delayed building up the centralized infrastructure at St. Petersburg State and slowed down the progress when the whole enterprise needed to head quickly in new directions (such as distance learning). Novosibirsk Technical found ways to balance centralized decision-making with the climate of open and constructive criticism and accepted rules about the boundaries of autonomy of the institutional units. This balance allowed the institution as a whole to agree on several priorities and move ahead briskly. The power of strong leadership at Kemerovo State propelled the university into a leading position in the region, but it may not be sufficient for counteracting the penetration of other competitors in its own “territory.” EFFECTS OF INCREASED UNIVERSITY AUTONOMY The cases of three relatively successful Russian universities were reviewed to show how different institutions in different situations took advantage of the newly granted institutional autonomy in order to reinvent themselves as flagship institutions. All of them transformed their academic programs, significantly increased student enrollments, improved their managerial capacities, motivated their faculty members for change, and most importantly generated sizable levels of additional revenues. But all have also experienced hardship: the research has suffered, many faculty have left, and it remains difficult to attract qualified young staff due to the depressed salary levels of the newly autonomous Russian universities. Are these institutions better today than they were in the Soviet period? Is Russian higher education as a whole better today? There is no simple answer to these questions. So many other contextual factors have been in flux, creating unprecedented challenges for the universities and their faculty and students. What is clear, however, is that the current system of higher education draws on the insights of far more people than before. Enabled by the enhanced autonomy of individual universities, the Russian academy has been able to respond in new and diverse ways to these challenges.

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Adaptive universities can and must find distinctive paths of change if they seek to rise to the top tier in the system of university stratification, always remaining more receptive to the new developments in national policies. While much of the recent debate on higher education policies tends to view the autonomous university as a threatened species, this study highlights autonomy as a valuable institutional resource for responding to extreme change.

APPENDIX Per Capita GRP, Per Capita Education Expenses, and Education Expenses as Adjusted to CPI in the Regions of the Russian Federation in 1994

220

221

222

Source: Compiled from Goskomstat, 1999, CPI is calculated from Goskomstat, 1999.

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Index

Academic drift, 185 Academy of Sciences, 9, 11, 94, 100, 112, 127, 129, 141, 152, 154, 194 Access to higher education, 10, 11, 15, 31, 58, 65, 85, 89, 92, 104–106, 120, 184–185, 187, 189, 193, 200, 203. Accountability, 30, 117, 147, 175 Administration and maintenance costs, 101, 103, 119, 131–132, 147, 186 Adygey Republic, 78 Aging faculty members, 143, 155, 201 Alumni Associations, 139, 148, 180 American Association for the Advancement of Slavic Studies, 58 Ashby, 33–34 Association of Non-State Higher Education Institutions, 87 Associations of Higher Education Institutions, 13, 87, 100, 123 Asymmetrical federalism, 18, 53, 56, 60 Autonomy of higher education, 14, 17–44, 207, 213. See also Institutional and university autonomy at the subnational level, 14, 45, 50–52

Boards on Teaching Methods and Educational Technologies (UMOs), 99–100 Budget Code, 88, 115 Budgetary and taxation autonomy of Russia’s regions, 67–68, 72 Buffer organizations, 39 Carry-overs from one fiscal year to another, 101, 103, 114 Chelyabinsk oblast, 34, 83 Chuvash Republic, 75, 78 Center-periphery hypothesis, 17–20 Center-regional relations, 45–84, 179 Civil Code, 88, 95, 115, 134 Clark, 35, 39–40 Classical universities, 90, 100, 118, 104–105, 121, 138 Conference of Rectors of Europe, 96, 135, 179 Constitution of the Russian Federation, 52, 54, 55, 57, 60–61, 134 Contingency theory, 37 Continuous education, 94, 111, 120, 200 Contract training, 111, 119, 168, 188, 197 Contract employment of faculty, 98– 99, 161 Cost-containment strategies, 32–33, 169–170, 175 Cost-recovery, 29–31, 168–169, 172 Creative financing, 119 Cultural capital, 125, 132–133

Bashkortostan, 53, 59–60, 83 Belgorod region, 78 Berdahl, 34 Binary divide in the Russian higher education system, 94, 120 237

238 INDEX

Cummings, 6, 25 Curriculum and standards for students, 99, 118, 163 Dagestan, 78 Deans and chairs, 115, 117, 141–144, 147, 159, 163–164, 176–177, 188 Decentralization, 12 disaggregation of the concept of, 22–24 rationales for, 25, 46–54, 56, 81 in Russian education, 85–86 Deconcentration, 23, 25, 80 Delegation, 23 Demographic trends in Russian higher education, 77, 109, 146–147, 148 Devolution, 23, 52, 81, 92, 96, 97, 117 Distance education, 11, 146, 170 Diversification, 9, 12, 92, 164, 178 Dneprov, 49–50, 85, 89–90 Doctrine of Science and Research, 113 Economic austerity and state austerity, 31, 35, 43, 94, 120, 137 Economic Department of the Ministry of Education, 88 Educational loans, 13. See also Strategy for Modernizing Education Educational reform and access, 3, 10, 15, 94 and the “Big Bang” crisis theory, 6 goals of, 94 by the government of “young reformers” in 1998, 89. See also Strategy for Modernizing Education and humanism, humanitarianism and democratization, 8, 85–86 and perestroika and glasnost, 4– 6, 85 in Russia in 1986–1987, 103–104 in Russia and the Soviet legacy, 3–6, 14

Elitism in Russian higher education, 104, 120, 129 Enrollments in higher education 106– 110, 155, 166, 190 in private institutions, 9–10, 106– 108, 184, 201 in public (state) institutions, 9– 10, 76–78, 106–108, 131, 144–146, 155–156, 184 and quasi-public enrollments, 107–108, 144–146 for a second higher education degree, 119, 197–198 and state-supported enrollments, 107–108, 144–146 and tuition-charged/fee-paying stu- dents, 13, 99, 100, 102–103, 106–107, 119, 168 and university enrollments, 15, 129 “Entrepreneurial” university, 39–40, 92–93, 113, 122, 170, 188–191. See also Entrepreneurial autonomy and Service university Evolutionary change, 118, 141 Expenditure autonomy, 28–29 Faculty size, 143, 156 Faculty-student ratio, 103, 122, 139, 143, 156–157, 172 Federal Fund for Financial Support of Regions, (FFSR), 69–71 Federal Innovation Fund, 112 Federal Program of Educational Development, 89 Federal Treasury, 115, 116 Federalism and regionalism in postSoviet Russia, 54–61 Federation Council’s Committee on Education, 89–90 Filippov, 87, 102, 116 Financial resources as a source of autonomy, 28–33. See also Funding of higher education Fiscal federalism in post-Soviet Russia, 66–76

INDEX 239

and donor regions, 71, 74 and horizontal balance, 71 and vertical imbalance, 69–71, 82 Funding of higher education funding cost-sharing model of, 30–31 by the federal government, 26–27, 72, 88, 94, 101, 116,118, 122, 131, 185 as itemized allocations, 101, 115– 117 as lump-sum allocations, 101, 115–117 according to a normative principle, 103 by the number of enrolled students, 122, 132, 140, 143, 157, 160 by regional and local governments, 12, 27, 73–76, 200 “residual” principle of, 88 and self-generated/off-budget institutional revenue, 12, 101, 102, 114–116, 119–120, 126, 147, 155, 178, 197 and taxation, 114–115 Gross Regional Product, 46–47, 62, 74 Hannan & Freeman, 37, 38–39 Governance of higher education democratization of, 7, 97–99, 158, 186 and Federal Districts, 57–58, 152 and institutional cultures, traditions, and ages, 117–118, 132–135, 138, 162–163, 201–202 and institutional power balance, 117–119, 123 and regional governments, 12, 116–117, 180 and University Senates/Academic Councils, 7, 91, 97–98, 117–118, 128, 134, 136, 139, 141, 146, 148, 160–162, 176, 187–188 vertical fragmentation of, 8, 87, 120

Hierarchy of higher education, 82– 83, 102, 114, 120–121, 122–123, 177, 181, 216 Humboldtian university, 127 Industrial Research Centers, 94, 112, 129 Inequalities among Russian regions, 47–48, 63–66, 71, 73–76 Institutional and university autonomy, 4, 13–14, 32–34, 36, 45– 46, 53–54, 80–83, 85–86, 90, 125– 128, 134, 157, 207–213 and academic freedom, 6–7, 26, 33, 36, 94, 95–97, 128 and accountability/responsibility, 93, 95, 100–101 as administrative discretion, 96, 136 adverse effects of, 41, 94 and center-periphery hypothesis, 17–20 and changing environments, 38– 39 as entrepreneurial autonomy, 92– 93, 113 definition of, 17, 36, 93, 95, 96 and diversity (alternatives), 35, 38–39, 92 as financial discretion, 100–104, 181 and institutional performance, 40–41, 42–43. See also Ranking of higher education institutions and intergovernmental relations, 23–24 as organizational buffer, 33, 35, 38 policies toward, 39, 42–43, 86, 87– 88, 91–97 predicaments for, 113–121 rationales for, 92, 95 and regional decentralization in Russia, 45–46, 81 relevance of, 37, 39–41, 44 as self-governance, 80–81, 96, 97– 98, 133

240 INDEX

and self-government, 7, 81 and semi-autonomous units, 134, 147, 165 in teaching and research, 99–100 and university-government relations, 33–36, 37, 39, 40, 42–43 and university-government relations in Russia, 45, 80–81, 53– 54 Interna tional Board of Trustees, 141 International Survey of the Academic Profession, 95 Inter-regional associations in Russia, 58, 62–63 Johnstone, 31, 32, 34 Kalmyk Republic, 78 Kamchatka region, 77 Kazan State University, 91, 129 Khakass Republic, 78 Khanty-Mansy autonomous okrug, 83 Kemerovo oblast, 78–80, 83, 151, 183–184, 198–201 Kemerovo State University, 4, 11, 102, 110–112, 125, 183–203, 209– 213 Kinelev, 11–12, 79–80, 84 Kornai, 67 Krasnodar Kray, 75, 83 Krasnoyarsk oblast, 83 Labor Code, 88, 98 Land Code, 88 Lauglo, 25 “Law of anticipated results,” 39 Law on Basic Principles of Taxation, 67–69 Law on Education (1992), 3, 8, 13, 26, 80, 87, 92, 93, 95, 97, 106–107, 117, 120 Law on Education (1996), 12, 13, 26, 80, 88, 91, 5, 97, 102, 120, 144 Law on Higher and Postgraduate Professional education (1996), 26, 95, 96, 97, 100, 102–103, 114, 120

Law on Local Self-Government, 52, 54 Lawrence and Lorsch, 37–38 Law on the Rights of Local Governments to Establish OffBudgetary Funds, 68 Leadership as a source of autonomy, 22, 42, 61–63, 81, 157–163. See also Rectors, Deans and chairs Legal/Constitutional framework as a source of autonomy, 26–27, 42, 54– 58, 81 and legal framework for university autonomy, 91–103, 114–115, 187 Licensing and accreditation of Russian higher educational institutions, 87, 95, 99–100, 117– 118, 123 and admissions quota, 100, 103, 144 of private institutions, 80, 124 Lindblom, 20–22 Lipetsk region, 78 Locus of authority, 115–119 bi-polar locus, 39 Medical schools, 90, 100, 121, 140– 141 Merkuriev, 135–136, 140, 148, 149 Millett, 34 Ministry of Education, 87, 90, 91, 95, 98–99, 101, 107, 116–121, 124, 134, 170 Ministry of Finance, 112, 116, 122, 134, 139 Ministry of General Education, 8, 87, 124 Ministry of Science and Technical Policy, 10, 112, 113, 194 Ministry of State Property, 116 Mixed financing, 32 Mordvinian Republic, 11, 78 Moscow, 15, 18, 45, 54, 56, 59, 62–63, 64–65, 74–75, 77, 83–84, 131 Moscow oblast, 65, 75, 83

INDEX 241

Moscow State University, 11, 27, 127, 129, 133, 135, 138 Multi-level education, 10, 12, 159– 160, 164, 177. See also Two-tier degrees and Bachelor’s degrees, 12, 140– 141, 143, 159, 164, 177 and higher education diplomas, 10, 105 and Master’s degrees, 140–141, 143, 159, 164, 177 and professional and academic degrees, 12, 105, 120 Models of institutional selfregulation, 39, 42–43 Murmansk, 77 National Trade Union of Education and Science, 89 Nizhnii Novgorod region, 61 Novgorod region, 61, 78 Novgorod State University, 11 Novosibirsk oblast, 75, 77, 79, 125, 151, 153, 184 Novosibirsk State Technical University, 4, 115, 151–181, 209– 213 Novosibirsk State University, 152, 154 Page, 25, 27 “Parade” of sovereignties, 52–53 Parsons, 35 Peer review, 98–99 Perm oblast, 83 Personnel policies, 92, 98–99, 103, 116, 119, 122, 156–157, 169, 173– 174, 193 Pfeffer & Solancik, 37 Policies of “steering from a distance,” 39 Political linkages as a source of auton- omy, 22, 42, 58–61, 68, 81– 82, 138–140 Politics of bargaining, 26, 58–61, 68 “From politics to markets” hypothesis, 20–22

Population ecology theory, 38–39 Pre-audit approval of expenditures, 115 Primary and secondary vocational institutions/colleges, 72, 87, 90, 116, 120, 184 Principles of Budgetary Rights to Form and Use Non-Budget Funds, 55 Private (independent) higher education in Russia, 9, 13 Privatization of state and municipal educational institutions, 13, 115 Professional post-secondary education, 8, 12, 84, 104–105 Professoriate/academia/faculty, 94, 95–96, 98, 118–119, 122, 132, 136, 162–163 Public Council for the Development of Education, 89 Public (state) higher education in Russia, 9, 13, 85–216 Putin, 57, 89, 139, 152, 179 Putnam, 25–26 Ranking of higher education institutions, 121, 135, 160, 169, 179 Rationale for legitimacy and values integration as a source of autonomy, 26, 42, 162 Reallocation of resources, 32, 101, 119 Rectors, 97–98, 102, 122, 134–135, 157–162 elections of, 7, 97–98, 116, 118– 119, 136–138, 157–158, 161–162, 186 Regional Councils of, 14, 112, 192, 200 Russian Union of, 13, 87, 90–91, 101–102, 115, 121, 123, 180 Regional educational spending, 72–76 Regional governments and higher education, 78–80, 91, 116, 118– 119, 192 Regional higher education programs, 112–113, 192–195, 203

242 INDEX

Regionalization, 9, 11, 76–80, 83, 86, 87–88, 111–119, 191, 199–201 Regional university system, 111, 126, 185, 200 Regional war of laws, 53, 57, 81 Republic of Altay, 78 Research institutes, 130–132, 155, 185 Research revenues, 174–175, 194, 197 Resource dependence theory, 38, 41 Revenue autonomy, 28–29 Revenue diversification, 29–31, 93, 114–115, 118–119, 122, 170–173, 175–176, 191–195 Rondinelli, 22–23, 24, 25, 37 Rostov-na-Donu, 77 Rostov University, 129 Russian Imperial Universities, 127– 128 Russian Imperial Universities’ Charter, 128 Russian scholars and democracy, 6 Russian Union of Industrialists and Entrepreneurs (RUIE), 90 Sadovnichiy, 90, 139 St. Petersburg, 6, 48, 54, 65, 77, 79, 83, 184 St. Petersburg State University, 4, 15, 48, 111, 125, 127–149, 159, 179, 185, 186, 188, 209–213 Sakhalin, 77 Sakha-Yakutiya/Yakutiya, 59, 78, 83, 91, 167 Salzburg Seminar Universities’ Project, 96, 123, 179 Samara region, 61, 76, 77, 83 Saratov region, 61, 76 School reform in Russia, 3–4, 82, 85– 86 Science Cities, 130 and Akademgorodok, 152, 154, 185 Self-financed research, 103–104, 155, 170, 196 Service university, 104–113, 122, 194

and enrollment expansion, 106– 110, 142–147 and research related trends, 112– 113 Shils, 17–20 Siberian Agreement, 58, 62–63, 152, 199 Slaughter, 41 Sobchak, 48, 51, 139, 148 Soros grants for excellence in teaching, 111 Sources of autonomy, 17–44 Stakeholders in the Russian higher edu- cation, 4, 86, 87–91, 117, 118 Standard/Temporary Statute About a Higher Education Institution, 7, 97, 114, 177 State Committee for Higher Education, 8–9, 12, 79–80, 83, 95, 101, 106, 112, 124, 133, 134, 139, 161, 180 State Committee for Science, Research, and Development, 124 State Council, 89–90, 110, 124 State-dominant financing, 30 State Duma, 54, 88–90, 91, 102, 115, 139 State Duma Committee for Education and Science, 89–90 State Research Centers, 10, 15 Strategy for Modernizing Education, 89, 110. 117, 123 Structural-managerial capacity as a source of autonomy, 27, 42, 170 Student-based financing, 110, 157. See also Strategy for Modernizing Education Student mobility, 94, 120 Student stipends/grants, 91, 102, 103, 116, 119 Student Trade Union, 91 Substantive and procedural autonomy, 34, 92–93 Support staff, 97, 103, 116, 117, 122, 136 Surgut university, 91

INDEX 243

Tambov region, 78 Tatarstan, 59–60, 65, 74–76, 78, 83 Taxation Code, 67, 68, 88, 115 Teacher-training institutions, 90, 100, 116, 121 Technical specialized institutions and polytechnics, 76, 90, 100, 104, 118, 120, 121, 152 Thompson, 35, 38 Tomsk, 75, 77, 151, 153 Tomsk State University, 129, 151, 170, 185 Tuition fees, 93, 106–107, 114, 165– 167, 189 Tuition-saving plan, 110, 189 Tuleyev, 199–200 Tyumen’ oblast, 74–76, 77–78, 91, 167 Two-tier degrees, 120–121, 141–142. See also Multi-level education Udmurt Republic, 78 Universities’ ownership management, 116 University branch campuses (franchises), 11, 90, 152, 167, 184 University Charters, 80–81, 92–93, 95, 97, 98 University mergers, 11, 30, 98 University missions, 113–114, 119, 141, 158, 170, 177, 179, 191 University-school linkages, 111, 200. See also Continuous education Verbitskaya, 96–97, 128, 136–140, 146–147, 148 Vostrikov, 115, 157–163, 179–180 Yakovlev, 148 Yamal-Nenets autonomous okrug, 54, 83 Yekaterinburg/Sverdlovsk oblast, 77, 78, 83 Yeltsin, 51, 53, 60–61, 88, 133, 139, 199 Zakharov, 102, 186–187, 200