Globalisation and Higher Education Funding Policy Shifts in Kenya

This paper identifies, examines and discusses higher education funding policy shifts that have taken place in Kenya. The paper argues that even though Kenya's higher education funding policy shifts, from free higher education to cost‐sharing, and privatisation and commercialisation, are (to a greater extent) products of the country's encounter with globalisation, local social, political and economic dynamics have been of equally significant influence. Thus, the country's higher education funding policies have been products of a convergence of both the dynamics of globalisation and local contextual imperatives. Furthermore, the point is made that the shift from free higher education to cost‐sharing, and privatisation and commercialisation, was symptomatic of a global transition from a development paradigm that was predominantly based on Keynesianism to a neo‐liberal paradigm that privileges mean expenditure on social services (such as higher education) and the market logic.

Keywords: globalisation; higher education; higher education funding; higher education funding policy shifts; Kenya; neo‐liberalism

For years, many governments have been trying to come up with the 'ideal' way of funding public higher education. Because of this continued search for an 'ideal' funding framework for higher education, arising mainly from societal changes and emerging development paradigms, many countries have registered several policy shifts in their higher education funding frameworks. For many African countries, Kenya included, the higher education funding policy shifts cannot be separated from these countries' encounter with globalisation. This paper identifies, examines and discusses the shifts that have taken place in Kenya's higher education funding policies, and how these policy shifts have been influenced by the dynamics of globalisation. It is argued that these policy shifts have been triggered by the changing relationship between the university and the state and society, in the context of globalisation (Maasen & Cloete, [28]).

The paper is divided into two main sections. The first section discusses the phenomenon of globalisation and how it influences higher education funding policies, especially in Africa. Particular emphasis is put on the role of the World Bank in influencing the financing policies of African higher education. The World Bank is a key supranational institutional carrier of the flows and pressures of globalisation and has, over the years, profoundly influenced social and economic policy in Africa. The second section is a discussion of the higher education funding policy shifts that have been registered in Kenya to date. This section links Kenya's higher education funding policy shifts to the dynamics of globalisation. It shows how Kenya's higher education funding policy shifts have been influenced coercively and normatively by the dynamics of globalisation.

Globalisation is a contested phenomenon; one that does not lend itself easily to any single definition or characterisation. It has many faces, and is usually discussed in economic, political, social, cultural and technological terms (Aina, [1]; Appadurai, [5]; McGrew, [32]; Stromquist & Monkman, [51]; Vaira, [60]), in the context of interconnectedness and supraterritoriality (deterritorialisation) (Scholte, [45]; [46]); characterised by interdependence, flows and exchanges, the role of new technologies, the integration of markets, and the shrinking of time and space (Aina, [1]; Appadurai, [5]; Castells, [13]; Held, [19]; Scholte, [46]).

Thus, globalisation is a dynamic of various interlinked processes operating on a planetary scale. The various dynamics of globalisation, always operating simultaneously, have serious implications for, and influences on, higher education (Altbach, [4]; Maasen & Cloete, [28]; Marginson & Rhoades, [31]; Vaira, [60]). For this paper, the important question is: How are the forces driving the (financial) restructuring of higher education being driven by processes of globalisation? The dynamics of globalisation circumscribe the various education policy shifts witnessed recently in education, in general, and higher education, in particular. Therefore, globalisation has become a key concept with which to interpret, inter alia, policy changes affecting higher education.

Some of the aspects of globalisation impacting upon higher education include the hegemonic rise of English as the language of scientific communication (Altbach, [4]), advancements in information communication and technology, and the hegemonic rise of neo‐liberalism as the de facto economic mode of the late twentieth century and the twenty‐first century (Castells, [13]; Friedman, [16]; Fukuyama, [17]; Scholte, [45]; [46]).

As far as higher education funding policies are concerned, the establishment of neo‐liberalism as the de facto economic mode could be said to be of the greatest impact (Carnoy, [11]; Henry et al. [21]; Maasen & Cloete, [28]; Toress & Schugurensky, [54]. Bundy (2004) argues that higher education is undergoing 'an epochal shift: the move from Keynesian economics to neo‐liberalism; the rolling back of the welfare state, and shrinking public sector provision in favour of a market‐driven private sector' (p. 163).

Neo‐liberalism may be described simply as an ideology that favours free market economics. It advocates for privatisation, marketisation and performance; and the shift of the cost of public services (e.g. higher education) from the state onto the individual (Aina et al., [2]; Aseka, [6]; Bundy, 2004; Toress & Schugurensky, [54]). By privileging privatisation and marketisation, neo‐liberalism thus occasions the significant withdrawal of the state in social provisioning through drastic reductions in social expenditure (Aina, [1]; Aina et al., [2]; Aseka, [6]; Toress & Schugurensky, [54]).

Higher education's encounter with neo‐liberal globalisation, especially in poor, dependent and dominated economies, cannot be separated from the influence of international financial institutions (IFIs) (Aina et al., [2]; Aseka, [6]; Wangenge‐Ouma, [63]). These institutions, especially the World Bank and International Monetary Fund (IMF), have been the main purveyors of the neo‐liberal economic logic. It is a known fact that the World Bank and IMF have, over the years, coercively influenced social and economic policy, especially in Africa and Latin America, along the lines of neo‐liberal economics (Banya & Elu, [7]; Brock‐Utne, [9]; Toress & Schugurensky, [54]).

It is argued that neo‐liberal globalisation has occasioned the reconstitution and restructuring of the nation state and its policy‐producing structures, leading to the undermining of the role of the nation state in social provisioning (Aina, [1]; Aina et al, [2]; Held et al., [20]; Henry et al., [21]). Maasen and Cloete ([28]) posit that forces of neo‐liberal globalisation:

... have created a specific global context for national reform in higher education. It is radically different from the contexts of different decades... [T]he global context, shaped by globalisation, influences national policy‐makers in such a way that they emphasise in national policy processes and reforms issues that 'fit' the globalisation discourse, such as efficiency, effectiveness, and competition (p. 32).

A major paradox of globalisation is that although higher education is now deemed more important than ever for the competitive advantage of nations (Castells, [14]), the commitment and capacity of governments to fund it have weakened considerably (Henry et al., [21]). Maasen and Cloete ([28]) expound:

[a] tension that globalisation poses, particularly for developing countries, is that on the one hand, the nation state is expected to create the conditions for economic and social development ... predominantly through producing more and better qualified citizens and increasing knowledge production, which is a prized commodity in the global economy. On the other hand, globalisation introduces pressures to reduce the role and contribution of central government in education. The double‐edged challenge is to produce more graduates with high‐level knowledge skills, but with less direct government support per graduate (p. 30).

For instance, OECD ([55]) reports that in England, higher education funding per student declined by 36 per cent in real terms between 1989 and 1997, and the planned funding for 2003–04 was 33 per cent below that of the 1989 level, in real terms. In Botswana, Jamaica, Hungary and New Zealand, expenditure per student as a percentage of gross domestic product (GDP) per capita declined by 73, 62, 40 and 40 per cent, respectively, in the past decade (Tilak, [53]). In South Africa, state funding of higher education as a percentage of GDP averaged 0.80 per cent for the period 1996–2000 but declined to an average of 0.73 per cent for the period 2001–05. It was 0.66 per cent in 2006 (Steyn & de Villiers, [50]). Therefore, there is inconsistency in terms of the expectations placed upon universities vis‐à‐vis the limited budgetary support from public sources. This inconsistency has consequently behoved universities to espouse a business‐like orientation, if they must attain economic self‐determination, and survive.

Banya and Elu ([7]), Brock‐Utne ([9]), Aina et al. ([2]) and TFHES ([52]), among others, have previously provided detailed analyses of the influence of the World Bank in the making of higher education funding policies in Africa. This sub‐section, therefore, gives a brief exposition of the Bank's role in policy making in Africa, in the context of globalisation.

As aforementioned, the World Bank has been a key supranational institutional carrier of the flows and pressures of neo‐liberal globalisation. The World Bank, IMF and other supranational agencies, acting as institutional carriers, have been pivotal in developing

... a general and common framework defining the new context, imperatives, ends and means in which higher education institutions have to operate ... In other [words], they define the appropriate (effective and efficient) and legitimate form for higher education in the global age .... [They have] a major role in defining and promulgating particular strategies, recipes, [and] archetypes for higher education policy, organisation and curricular structures (Vaira, [60], pp. 488–489).

The World Bank and IMF have succeeded, through both coercive and normative pressures, to push (relatively poor) governments to adopt a neo‐liberal and market‐oriented approach to development policy, which favours the shrinking of public expenditures, a wider confidence in market regulative and allocative capabilities, and the trend toward a more entrepreneurial pattern of higher education organisational change (Vaira, [60]).

Since the 1960s, when many African countries attained political independence, the World Bank has influenced two main higher education funding policies. From the 1960s to 1970s, the Bank supported investment in higher education based on the understanding that higher education was the development engine of the new political economies (Banya & Elu, [7]). Investment in higher education was mainly geared at developing person power to replace departing colonial experts and administrators (Banya & Elu, [7]). Banya and Elu ([7]) report that:

[t]hroughout sub‐Saharan Africa in the 1960s, there was a critical shortage of administrative, scientific and technical manpower. The situation was particularly acute because higher education institutions had been established only recently and the senior ranks of the public services were staffed predominantly by expatriates. The newly independent African nations lacked personnel trained in many areas of high priority for their future development (p. 4).

Thus, higher education was considered crucial in creating a modern polity and, to this end, universities received generous funding to establish pedagogical and research infrastructure, and also for their operating costs (Banya & Elu, [7]).

Later in the 1970s through to the 1980s and 1990s, the World Bank switched priorities and emphasis away from higher to primary education, mainly as a result of rather contentious arguments that primary education was a more profitable social investment than higher education (Psacharopoulos & Woodhall, [34]; World Bank, [66]; [67]).

Two main policy documents by the World Bank capture the bank's shift in investment priority from higher education to basic education. These are: Education in Sub‐Saharan Africa: Policies for Adjustment, Revitalization, and Expansion ([67]) and Higher Education: The Lessons of Experience ([68]). These policy papers are important as they formed the basis for the Bank's coercive influence on the higher education funding policies in Africa.

The World Bank's ([67]) policy paper proffered several policy recommendations (read prescriptions) that were aimed at improving both the internal and external efficiency of higher education in sub‐Saharan Africa. The suggested adjustments included increasing student : staff ratios, expanding access for part‐time, fee‐paying students, and assigning to non‐public sources the full cost for housing, food and other welfare services provided to staff and students. Perhaps the most significant recommendation was cost sharing (cost recovery). African governments were called upon to 'relieve the burden on public sources of financing [higher education] by increasing the participation of beneficiaries and their families' (World Bank, [67], p. 77). Overall, the paper set the stage for adjustments in public university education in sub‐Saharan Africa.

As if to reinforce the 'prescriptions' of the 1988 policy paper, the World Bank produced another policy paper, World Bank ([68]), which reinforced the Bank's earlier unfavourable inclination towards public investment in higher education in Africa. The paper makes the point that '...the extent of government involvement in higher education [in Africa] has far exceeded what is economically efficient' (World Bank, [68], p. 9). According to this paper, higher education is a burden to public finance. Thus, countries were called upon to adopt policy reforms that would lower public costs of higher education, such as cost sharing. It is incontestable that, up until the early 1990s, public expenditure on education in Africa was extremely inequitable as it highly favoured higher education. In Kenya, for instance, although public universities accounted for only 0.6 per cent of Kenya's total student population (1980s to early 1990s), they absorbed 19 per cent of the government's recurrent spending on education. The per student public expenditure was 30 times greater at the university level than at the primary level (World Bank, [69]).

The two policy papers constituted neo‐liberal prescriptions for education finance. The papers heralded major changes in the financing of higher education in sub‐Saharan Africa. Budgetary allocations to higher education were significantly slashed in favour of basic education (Banya & Elu, [7]; Brock‐Utne, [9]; TFHES, [52]); cost sharing and other market‐related reforms were also introduced. For instance, between 1985 and 1995, Burundi's higher education expenditure as a share of the education budget reduced from 19.8 per cent to 15.6 per cent; Malawi's from 23.3 per cent to 20.5 per cent; and 34.4 per cent to 28.0 per cent for the Republic of Congo (Varghese, [61]). In Uganda, between 1998 and 2003, an average of 10 per cent of the total education budget went to the higher education sub‐sector compared to the early 1990s when 19 per cent of total recurrent education budget went to higher education (Carroll, [12]).

For many African countries, the implementation of the World Bank proffered policies of higher education funding was not a matter of choice. These policies were to be implemented as part of structural adjustment programs (SAPs) imposed by the Bank and IMF. The neo‐liberal development paradigm advocated by the World Bank was essentially a rejection of the welfarist approach to education provision that many African countries had pursued since the attainment of political independence; and, as argued by Mamdani ([29]), an assault on the development role of the African university.

Although a recent study by a task force convened by the World Bank and UNESCO (TFHES, [52]) questions the logic of subjecting higher education to resource starvation, the findings of this report have not occasioned any significant policy shifts towards greater public funding of higher education. Higher education still has to grapple with reduced state support that has been advocated for by neo‐liberal globalisation.

The following section discusses the higher education funding policy shifts that have been registered in Kenya to date. In the main, it links Kenya's higher education funding policy shifts to the dynamics of globalisation.

Since Kenya's attainment of political independence in 1963, there have been three higher education funding policies. Even though these policies overlap, for purposes of analysis, I locate them in three distinct eras. These eras represent policy shifts and are associated with the dynamics of globalisation. They are: the era of free higher education; the era of cost sharing; and, finally, the era of privatisation and commercialisation. Although these policies have been influenced in a major way by the dynamics of globalisation, it is important to emphasise that the policy shifts have, to an important extent, also been influenced by local political, social and economic imperatives. Thus, these policy shifts are products of a convergence of dynamics of globalisation and local contextual factors. Marginson and Rhoades' ([31]) 'glonacal' agency heuristic aptly captures this global and local embeddedness.

Historically, public higher education in Kenya was free, with the public purse covering tuition and students' living allowances, pedagogical and research infrastructure, buildings and staff costs. The rationale for state subsidisation of higher education, especially tuition, was based, inter alia, on the country's desire to create highly trained person power that could replace the departing colonial administrators, and also to ensure equity of access. In the welfare‐dominated post‐colonial period, it was argued that unless the state subsidised the highly expensive higher education system, many students would be unable to benefit from it (Weidman, [65]), and that formation of person power would be compromised. Free provision was therefore seen as the surest way for the state to guarantee equality of opportunity.

The university was also seen as the epicentre of social and economic development, which the newly independent state so much desired and aspired to. To achieve its role of spurring social and economic development, it was argued that generous funding be provided. By offering highly subsidised education, free of any direct charges, the government hoped to stimulate enrolments (access) in university education.

Kenya's first post‐independence Development Plan (Republic of Kenya, [36]) rated education, together with agricultural development, as the highest development priority. The policy objectives set out for education required high funding. These included:

• • To ensure enough places at the secondary and higher levels to educate those with recognised abilities; and
• • To organise the education system to meet the person power needs of the country.

The provision of free higher education in Kenya was not an exception. It was the practice in almost all the newly independent African states. This was the era of the developmentalist university (Mamdani, [29]). The university was viewed as the key engine for spurring African development and, therefore, levying fees was seen as an unnecessary obstruction to the expedited development of person power. For many African governments, economic transformation of the continent was to follow from university education (Banya & Elu, [7]). Therefore, it was not surprising that many African governments adopted a policy of free higher education. The policy not only had local justification but also the support of the international community and many donor organisations (Banya & Elu, [7]).

Globally, the provision of education in the 1960s up to the mid 1970s adopted mainly a welfarist approach or Keynesian development paradigm, which favoured the government's direct commitments and responsibilities in public provisioning. The contribution of education to the development of skilled and educated person power was particularly critical at that time. The idea of developing person power was also in line with the then dominant application of human capital development theory to educational investments. Influential studies (Becker, [8]; Harbison & Myers, [18]; Renshaw, [35]; Schultz, [47]; [48]) had demonstrated the productivity‐raising effects of investments in higher education.

Kenya's free higher education policy lasted from Independence, in 1963, to 1974. During this period (1963–1974), the financing of university education was almost entirely the responsibility of the state. Higher education was financed through annual grants to meet capital development and recurrent expenditures. In addition, the government met tuition fees and provided other allowances to keep the students 'comfortable'. As from the 1974/75 academic year, a student loan scheme was introduced. This loan was, however, meant to cover only the cost of personal expenses, such as accommodation, meals, textbooks and stationery, travelling and other effects, leaving the burden of tuition and capitation for the government to meet. Getting this loan was automatic. It did not matter whether one was from a well‐off background or otherwise. As the loan covered extra academic expenses only, university education remained tuition‐free. The development plan that proposed the introduction of the loan scheme made it clear that '[t]he principle of free tuition will be maintained [added emphasis]. The loan system will apply to accommodation and personal allowances' (Republic of Kenya, [37], p. 72). Consequently, the idea of making the beneficiaries of education to pay did not make sense. In effect, higher education, itself, remained free. In principle, the introduction of the loan scheme in 1974 marked the inception of cost sharing in Kenya's higher education.

Nonetheless, it was not long before it became impossible to carry on with free or over‐subsidised higher education. In the subsequent years after Kenya attained political independence, the social demand for higher education started increasing. For instance, in 1964, 1980 and 1990, the number of university students (i.e. undergraduate, postgraduate and diploma) was 571, 5411, and 26 092, respectively (Wangenge‐Ouma, [63]). Unfortunately, this increasing demand was taking place at a time when the county's economic performance was plummeting, worsened by the world economic recession of the 1980s (Republic of Kenya, [41]). Externally, higher education (especially in Africa) had become an increasingly unpopular public investment priority mainly because of the World Bank's ([67]; [68]) arguments for reduced public investment in the sub‐sector. Also, globally, a new development paradigm that disfavoured free state provision of social services had taken root. Therefore, it was no longer possible to continue to provide free higher education.

As aforementioned, World Bank ([67]; [68]) policy papers, together with the World Bank and IMF‐assisted global re‐orientation of economic policies from Keynesian economics to neo‐liberalism, triggered major changes in higher education funding, especially in sub‐Saharan Africa. For Kenya, the coercive influence of the World Bank, expressed in structural adjustment programs that favoured drastic reduction of state funding of social services, including higher education, led to a change in the manner in which higher education was funded.

The World Bank wanted educational services to be brought into the marketplace, inter alia, through increased private provision and cost sharing (World Bank, [67]; [68]). Johnstone ([24]) defines cost sharing in higher education as 'the assumption by parents and students of a portion of the costs of higher education – costs that, in many nations, at least until recently, have been borne predominantly or even exclusively by governments, or taxpayers' (p. 351). In Kenya, the World Bank pushed through cost‐sharing policies in higher education in the early 1990s following the granting of an emergency loan of US$55 million to finance public universities (Kiamba, [27]; Wandiga, [62]). As is characteristic of World Bank loans to poor countries, conditionalities were attached. These included the institution of new financing strategies for higher education, which actually referred to cost sharing (Kiamba, [27]; Nafukho, [33]; Wandiga, [62]). In effect, the Bank prescribed reduced funding by government to the higher education sub‐sector and the introduction of cost sharing.

As a result of the loan conditionalities, and a convergence of other factors, such as the dismally performing economy, increasing demand and implementation of SAPs, the Kenyan government was forced to adjust its education financing and so came to reduce its expenditure on higher education. The government departed from the previous form of cost sharing introduced in 1974/75, which did not include payment of university fees and introduced direct payment of university fees as part of the cost‐sharing strategy, starting in the 1991/1992 academic year. Cost sharing required students or their parents to cover both tuition and the cost of maintenance. The introduction of cost sharing also saw the abolition of all personal allowances that university students had hitherto been enjoying.

Prior to the 'demands' by the World Bank for the introduction of cost sharing, in [67] the Kenyan government had contemplated introducing cost sharing via Sessional Paper No. 6 (Republic of Kenya, [39]). Before this sessional paper, the Kenyan government in 1986 had released another sessional paper (Sessional Paper No. 1 of 1986) on economic management (Republic of Kenya, [38]), which talked of the need to 'put [a] tight limit on ministry expenditures, which will grow by less than 2 per cent a year net of inflation through 1988/89' (Republic of Kenya, [38], p. 30). The sessional paper (No. 1 of 1986) identified the ministries of education and health for reduced recurrent expenditures: 'each will be reduced gradually as a share of total recurrent expenditures...' (Republic of Kenya, [38], p. 30).

Given the circumstances above, free higher education had to come to a halt. The rapid growth of university enrolments coincided with rising constraints in the public budget, resulting in the state's inability to adequately cater for social services, such as (higher) education (Republic of Kenya, [40]). The circumstances that faced Kenya from the mid 1980s were very different from those it faced at Independence. At Independence (1963) up to about a decade later (1973), Kenya had a blossoming economy; inflation was low and the economy grew by an impressive average of 6.8 per cent per annum (Republic of Kenya, [37]; [44]). The period of 1980–85 was one of low GDP growth, averaging about 2.5 per cent per annum with some years experiencing negative growth rates. This was then followed by the period of structural adjustment programs (1986–89). The 1990s were an economic nightmare. During this period the economy was characterised by sluggish growth. The problem was caused by a dynamic of factors, including economic mismanagement and a decline in external resource flows as a result of a stand‐off between the government and major donors. During this period, the country witnessed very high inflation rates (Republic of Kenya, [42]; [44]).

The shift from free higher education to cost sharing did not, however, herald any major financial responsibilities on the part of students and their parents. Cost sharing went hand‐in‐hand with heavy subsidisation of the system and low‐level cost recovery. Heavy subsidisation, which still applies to date, covers all students admitted through the Joint Admissions Board (the Board admits students who receive a government subsidy that covers, inter alia, tuition and accommodation), irrespective of their ability or inability to pay. For a long time, government‐subsidised students have paid Kshs 16 000 (approx. US$229) as tuition fees, irrespective of their study programs. Even though public universities started levying fees for extra academic services, such as food and accommodation, the charges were significantly below market prices. The government continued to heavily subsidise these services. It is clear that the introduction of cost sharing did not dissipate the state's desire to over‐subsidise higher education. One may argue that, although Kenya embraced cost‐sharing policies, the country's higher education funding policy was still guided by welfarist thinking. The public good orientation of higher education, which guided higher education funding after Kenya's independence, still held sway.

Given the limited contribution of government‐subsidised students towards the cost of their education vis‐à‐vis limited budgetary support from the fiscus, Kenya's public universities experienced extreme financial difficulties. The type of cost sharing implemented by the Kenyan government ensured 'nominal' financial contribution by students. At the same time, the government faithfully used the neo‐liberal principle of limited public funding of the higher education sub‐sector. As a result, public universities could not meet their financial obligations, and pressure was put on government to increase its fiscal effort for higher education. To ward off the universities' persistent demands for increased funding, the government directed public universities to turn to other sources to be able to meet their staff costs, learning and research materials, and even capital development expenditure. It is this 'directive' that ushered in the third era.

This era can be linked to the discrediting of the public model of financing higher education, aided by the establishment of neo‐liberalism as the dominant economic mode of the present century. This is the era of shifting universities' resource dependence from the state to the market, as evidenced by the decline of public expenditure in the total expenditure in higher education. For example, state subventions as a percentage of the total income of several Kenyan public universities declined considerably; that is, from 70 per cent in 1998 to 39 per cent in 2005 for the University of Nairobi (UoN), from 72 per cent in 1998 to 60 per cent in 2005 for Jomo Kenyatta University of Agriculture and Technology (JKUAT), and from 73 per cent in 1999 to 65 per cent in [22] for Maseno University (Wangenge‐Ouma, [64]). These declines have also been experienced globally. For instance, between 1995 and 2000, the relative share of public expenditure in total expenditure in higher education in Australia declined from 65 per cent to 51 per cent, from 94 per cent to 88 per cent in Sweden, and from 97 per cent to 93 per cent in Portugal (Tilak, [53]).

In this era, higher education is predominantly viewed as a private commodity and much less as a public good. Consequently, as observed by Altbach ([3]), a revolution is taking place in higher education; it is becoming a traded commodity to be purchased by a consumer, a product to be bought and sold by academic institutions that have transmogrified themselves into 'businesses'. Thus, neo‐liberalism has privileged market‐driven provision and has argued against the treatment of higher education as a public good to be supported by state coffers.

Globally, this period (i.e. 1990s onwards) may be described as the era of marketisation. Marketisation refers to several income‐earning strategies that universities have adopted. Various descriptors have been coined to depict these strategies, such as privatisation, commercialisation, commodification, academic capitalism and entrepreneurialism (Clark, [15]; Johnstone et al., [25]; Marginson & Considine, [30]; Slaughter & Leslie, [49]). These descriptors could be said to describe various variants of marketisation.

Marketisation is also understood as a form of higher education privatisation (Johnstone et al., [25]). As public universities now compete for resources in a market context, they are forced to adopt practices that are consistent with private business practice. Hence, public universities are forced to act as though they are private entities, with a greater orientation to the student as a consumer (customer), university education as a 'product', 'market niches', 'pricing' and aggressive marketing (Johnstone et al., [25]). Generally, adoption of principles of marketisation may be said to constitute a repositioning of public universities to compete within the new economic realities of this era.

As discussed in the previous sub‐sections, financing public higher education has become increasingly difficult for the Kenyan government. Both the free higher education policy and also cost sharing have occasioned enormous resource constraints for Kenya's public universities. Buffeted by social and economic conditions that obviated the government from continued generous funding of higher education, the Kenyan government began to withdraw from taking an active and direct role in defining the response to the fiscal crisis of higher education. Through several policy papers and pronouncements at graduation ceremonies of public universities and other forums, the Kenyan government exhorted public universities to seek more funding from market sources (Kiamba, [26]; Nafukho, [33]). For instance, the government's 1997–2010 Master Plan (Republic of Kenya, [40]) states that:

Universities will be encouraged to develop non‐public sources of their revenues, including income‐generating activities (such as returns from research and consultancies with industry and employers, services to the community, agro‐based production, manufacturing for the market, including making equipment for use in schools, hiring out university facilities); grants and donations from NGOs [non‐governmental organisations] and well‐wishers; and funding from alumni associations (p. 110).

Public universities were thus discouraged from relying solely on the public purse and the fixed nominal fees charged to government‐subsidised students. The government effectively sought to change its role in higher education financing by devolving financial responsibilities to higher education institutions.

In response to the government's challenge and their own need for survival public universities have responded by introducing a measure of self‐financing. The universities have embraced both privatisation and commercialisation. Commercialisation involves engagement in ventures such as consultancies, commercial farming, restaurants and cafeterias, and formation of for‐profit subsidiaries. Privatisation refers to the admission of privately sponsored fee‐paying students over and above the quota of students that come in with government subsidy admitted through the Joint Admissions Board. Privatisation is the epitome of the marketisation effort by Kenya's public universities, and is carried out through courses, invariably referred to as parallel programs. These programs have led to the phenomenon of 'dual track' education in Kenya's public universities; that is, the universities have two sets of students: those who are subsidised by the government and are admitted through the JAB, and those who are admitted directly by individual universities and pay full fees.

Through the full fee‐paying programs, several of the public universities have managed to significantly reduce resource dependence on the fiscus. For instance, between 2001 and 2005, the University of Nairobi (UoN) generated more than 25 per cent of its revenue from parallel programs (UoN, [56]; [57]; [58]; [59]). In 2004 and 2005, JKUAT raised more than 20 per cent of its revenue from parallel programs (JKUAT, [22]; [23]). Kenya's public universities have not been successful in securing significant earnings from other market sources, such as research and alumni. For instance, between 1999 and 2005 UoN's trust and endowment funds accounted for only 0.18 per cent of the university's total revenue. During the same period, the university's earnings from research (research grants) contributed 7.43 per cent of its total earnings (Wangenge‐Ouma, [64]).

As aforementioned, students in the parallel programs bear the full cost of their studies. These programs, although opening up access, have been mounted primarily for the purpose of raising income (Kiamba, [26]) and ensuring institutional survival in the prevailing austere conditions. Locally, commercialisation and privatisation as a higher education funding policy was thus the default result of the government's inability to sustain large‐scale funding of the higher education enterprise, and its unwillingness to allow public universities to charge market‐related fees to the JAB‐admitted students at market rates.

The emerging trends in policy and financing of public university education in Kenya assumes what could be described as a mixture of both welfare and market approaches. The welfare approach is a continuation of the post‐independence free provision of university education to a limited number of selected students. In the market approach, which is emerging as a response to diminishing capitation from the state, some students are charged high levels of fees and pecuniary considerations underlie the introduction of market‐ or demand‐driven study programs. All other charges for the full fee‐paying students are pegged at market rates. Therefore, from the perspective of funding, there is a section of students in Kenya's public universities whose education is treated as a 'public good' and, hence, is highly subsidised by government, and another section whose education is treated as a 'private good', and who, hence, pay market‐rate fees.

It can be concluded that, given the higher education funding policies prevailing in Kenya, coupled with the limited non‐tuition fee revenue sources, those public universities with a majority of state‐subsidised students are more highly dependent on state capitation than those with a significant population of full fee‐paying students. Consequently, universities with more state‐subsidised students are likely to be experiencing more financial hardship than their counterparts with more full fee‐paying students.

This paper has shown that Kenya's higher education funding policies have been patterned by dynamics of globalisation and local social, political and economic imperatives. Kenya's higher education funding policy shifts have been located in three eras; that is, the era of free higher education; the era of (nominal) cost sharing; and the era of privatisation and commercialisation. The discontinuation of free higher education in favour of cost sharing and, later, privatisation and commercialisation, was largely a consequence of neo‐liberal determinism that many African countries faced from the World Bank and IMF. Limited public budgets, plummeting economies, growing student numbers and priority given to primary education were also important factors. The shift from free higher education to cost sharing, and privatisation and commercialisation, was symptomatic of a global transition from a development paradigm that was predominantly based on Keynesianism to a neo‐liberal paradigm that privileges reduced expenditure on social services, including higher education, and the market logic. Locally, these shifts have been motivated mainly by economic constraints manifested in the form of high rates of inflation and shrinking public budgets for education, as well as increased student numbers, declining per student expenditures, and distortions in inter‐sectoral and intra‐sectoral allocation of resources, among others.

Although globalisation (and the World Bank) has oftentimes been blamed for the drastic changes that have taken place in the higher education funding policies in Africa, it is important to point out that the prevailing local conditions required that policy shifts be undertaken. For instance, with or without globalisation, the policy of free higher education had to stop at some point. Simply put, Kenya did not have sufficient resources to support free higher education. What globalisation has done is to expedite the changes, perhaps, precipitately.