Internationalization

What does internationalization in higher education mean?
The catch-all term “internationalization” covers a broad range of topics that include cross-border education, e-learning, student mobility, transnational education, and many others. The two topics of interest for the private financing of higher education are cross-border (sometimes called borderless or transnational) education and student mobility. Cross-border education refers to the delivery of higher education in a country through a branch campus of a foreign institution of higher education, while student mobility refers to students studying abroad to obtain a degree. Further information about internationalization, visit the International Association of Universities.

What does internationalization have to do with the private financing of higher education?

Cross-border Education: The delivery of cross-border education sometimes requires foreign direct investment (FDI). FDI occurs when a parent company (in this case, an institution of higher education) acquires physical assets (in this case, the creation or acquisition of another institution of higher education), with control of the assets remaining in the home country. While the regime for many types of FDI has become increasingly liberal, higher education still remains largely protected by tariff and non-tariff barriers.
Student Mobility: While student mobility has traditionally been motivated by cultural and other non-economic reasons, this has changed in recent years. Higher education institutions in some OECD countries, notably the United States, the United Kingdom, and Australia, have heavily recruited foreign students as a source of additional tuition fees. As a corollary, greater numbers of students from countries facing a shortage of supply in higher education, e.g. China, have been willing to pay the costs of studying in foreign countries. This has facilitated greater cost-sharing in higher education. However, the absence of international loan programs has limited the extent of this phenomenon so far.

What is GATS?
The General Agreement on Trade and Services (GATS) is a set of rules governing international trade in services that came into effect in 1995 and is administered by the World Trade Organization. GATS classifies the supply of services into four modes: (1) Cross-border supply; (2) Consumption abroad; (3) Commercial presence; and (4) Presence of natural persons. Student mobility falls under mode two, and cross-border education falls under mode three. While student mobility generally does not meet with many barriers from the perspective of trade regimes, cross-border education faces many challenges. GATS excludes those services that are “supplied in the exercise of governmental authority.” To what degree higher education is excluded from GATS under this provision is the source of considerable debate and has not yet been resolved.

What resources are available on this topic?
The best resources on the topics of cross-border education and student mobility are primarily produced by those countries that are exporters of educational services. Thus, many of the institutions and research that takes place is located in the United States, the United Kingdom, Australia, and a few other countries. Those countries that import education services (i.e. countries that send students abroad and host foreign institutions on their soil) have not devoted as much effort to this topic. Most of the resources here are consequently taken from exporting countries, with the view of importing countries partially accounted for only by international organizations such as the World Bank. Documents are listed in two sections, student mobility and cross-border education, in reverse chronological order. A third section provides links to Web sites with further information. Additional sections provide links to organizations promoting the export of educational services and examples of offshore campuses.

Internationalization

Resources