ABSTRACT:

 
     In countries throughout the world, there are increasing
pressures to reduce the government share of costs for goods and
services with high payoffs to individuals so that the limited
available public funds can be used for other needs.  This paper
suggests several strategies for reducing government expenditures on
higher education, including direct cost recovery, grants from and
contracts with external agencies, income-producing enterprises,
private contributions, and expansion of the private sector.  Policy
implications and examples (e.g., student access and financial aid,
tax status of revenues from enterprises, deferred cost recovery)
are presented for both developing and developed countries.
 
 
     As developing countries struggle to meet the financial demands
for full participation in the world economy, there is strong
pressure to change patterns of government expenditures in order to
meet changing budgetary needs (e.g., funding neglected
infrastructure improvements, especially transportation and
communication).  International donor agencies and development banks
support fiscal policies that reduce what are considered to be
patterns of inordinately high expenditures on education and human
resources in order to facilitate necessary reallocation of scarce
government resources.  This is an example of what are commonly
known as "structural adjustment policies" (SAPs).
 
     To implement SAPs, governments are encouraged to identify
those sectors of their economies in which there are possibilities
for "cost sharing," namely, shifting greater portions of the burden
of payment to the individuals who are the recipients or users of
the services provided.  Hence, it is understandable that a frequent
target for cost sharing is higher education, a service that is both
very expensive to provide and from which recipients can expect to
receive significant financial benefits.  Recent research suggests
that even in the Philippines, an "educationally advanced developing
country" (40% baccalaureate-level enrollment ratio and more than
half of the institutions in the private sector), higher education
has demonstrable individual as well as national development payoffs
(Hossain & Psacharopoulos, 1994).
 
 
     Several options for "widening and diversifying sources of
finance" of higher education (Woodhall, 1993) are explored in this
paper, including (a) direct cost recovery, (b) grants from and
contracts with external agencies, (c) income-producing enterprises,
(d) voluntary contributions, and (d) expansion of the private
sector.  Comparisons are made between the strategies and approaches
used to implement various options in Kenya and Mongolia, two Third
World countries under strong pressure to implement SAPs.  While
both countries have well-developed higher education systems, the
prospects for maintaining vitality and reaching an internationally
competitive standard have become increasingly remote because
neither government can afford to pay world market prices to supply
each of their institutions with state-of-the-art educational,
scientific, and technological materials and equipment.  Hence, both
countries are involved in efforts to reform higher education
through more efficient use of existing resources, strategic
planning for new resource acquisition, and organizational changes
that reduce the role of central government and provide greater
institutional autonomy.
 
     The paper begins with (a) some general background information
on the national development contexts and higher education systems
in Kenya and Mongolia, and (b) a general framework for
understanding the notion of "revenue diversification" (Albrecht &
Ziderman, 1992) in higher education which illustrates the
relationships among various public and private funding sources.  It
includes discussion of policy issues related to specific types of
financial diversification, presenting examples and implications for
higher education in both developed and developing countries.
 
             Development Contexts and Higher Education Systems
                          in Kenya and Mongolia
 
     Kenya gained its independence from Great Britain in 1963.  It
had a one-party political system until the end of the 1980's when
opposition parties were legalized, though none is a viable threat
to the ruling party.  According to the World Bank (1994, Table 1),
Kenya is among the poorest countries in the world, ranking 19th
from the bottom of its list of 132 economies.  Per capita Gross
National Product (GNP) was $ 310 in 1992.  Education constituted
20% of central government expenditures which represented 6% of GNP
(World Bank, 1994, Table 10).
 
     The contemporary history of university-level education in
Kenya dates only from 1963 when there were just 571 students
enrolled in what was to become the University of Nairobi (Weidman,
1995, Table 2).  Education in the newly independent Kenya was
modeled on the British 7-4-2 system, with 7 years of primary
schooling followed by 4 years of secondary school and an additional
2 years of advanced secondary education (signified by successful
completion of the A-level exams) to qualify for entrance to 3-year
university bachelor's degree programs.  In the 1980's, there was a
shift to an American-style 8-4-4 system with 8 years of primary
education followed by 4 years of secondary school and a 4-year
bachelor's degree curriculum (Mwiria & Nyukuri, 1994, pp. 10-12).
Under both systems, students seeking admission to universities were
required to take a competitive national examination.
 
     Mongolia gained its independence from China in 1921, and
following 3 years of a constitutional monarchy headed by Buddhist
leaders, established the Mongolian People's Democratic Republic in
1924.  Mongolia maintained its independence for the next 65 years
but had a strong alliance with the Soviet Union that included very
close economic ties.  In the 1986-89 period, inflows of resources
from the Soviet Union averaged about 32% of Gross Domestic Product
(GDP)!  These resources, which included books and scientific
equipment for the universities, stopped by the end of 1990
following the break-up of the Soviet Union (World Bank, 1992, pp.
2, 8).  The Asian Development Bank (1993, p. 1) estimated the 1992
per capita GNP of Mongolia to be $ 299.  According to the World
Bank (1992, p. 82), expenditures on education at the end of 1990
were 25% of the government's total budget which constituted a
sizable 14% of GDP.
 
     The oldest contemporary university-level institution of higher
education, now named the Mongolia National University, was founded
in 1942.  Mongolia has a 6-2-2-4 educational system, with primary
education lasting 6 years, followed by either a vocationally-
oriented 2-year secondary program or a 4-year, university-oriented
secondary program.  Higher education in Mongolia was originally
modeled on the Soviet system in which curricula were highly
specialized and student places were determined on the basis of
projected manpower needs.  Universities were primarily teaching
institutions, with responsibility for research and the awarding of
the highest scientific degrees vested in independent institutes
under the Academy of Science.
 
     A shift is now underway to a less specialized American-style
system in which students will earn bachelor's degrees at the end of
four years and places are determined, at least in part, by student
demand.  Efforts are underway to integrate the research institutes
of the Academy of Science into the universities.  Each higher
education institution administers its own competitive admissions
examinations.
 
     Data on higher education enrollments for both countries are
shown in Table 1.  Mongolia has a much smaller population but its
overall higher education enrollment rate is 5.6 times greater than
Kenya's.  Mongolia also has a much larger private higher education
sector.  To put these enrollment rates in perspective, both
countries are above the Sub-Saharan average of 89, but well below
both the Latin American average of 1468 and the OECD (Organization
for Economic Cooperation and Development) average of 2392
(Zymelman, 1990, p. 22).
 
     Table 1. Enrollment in Baccalaureate-Level Institutions of
                Higher Education by Country and Sector
     __________________________________________________________
 
                   1992*      BA-level**    Enrollment per
                Population   Enrollment     100,000 People
                (millions)   (thousands)
                            Public Private  Public Private
     __________________________________________________________
     Kenya         25.7       40.7   2.0       158     8
 
     Mongolia       2.4       17.5   3.9       762   169
     __________________________________________________________
 
      *Source: World Bank, 1994, Table 1.
     **Sources: For Kenya - public universities (1991-92),
          Republic of Kenya, 1994, Table 1.13;
          private institutions (1990-91), Saint, 1992, p. 42.
                For Mongolia (1993-94) - Bray, et al., Tables 1
          and 2.
 
     The historical funding patterns of higher education in Kenya
and Mongolia are similar to many developing countries in Africa and
the emerging formerly socialist countries of Eastern Europe and
Central Asia.  Higher education was not only free of charge, but
students received additional allowances from the government for
their living expenses and study materials.  Sanyal and Martin
(1991) describe "the relatively high cost of African higher
education" as follows:
 
     ...cost of a graduate of Sub-Saharan Africa, according to one
     estimate is eight times GNP per capita whereas it is only 3.7
     times the GNP per capita for all the developing countries
     combined (Mingat and Psacharopoulos, 1985).  The ratio between
     unit costs in higher and in primary education varies between
     30:1 and 50:1 in African countries as against 10:1 in Asia or
     Latin America (Hinchliffe, 1987).
 
In Kenya, 1992/93 national "recurrent" expenditures per student in
public universities were 46 times higher than those for each
primary school student, even though actual total "recurrent"
expenditures for primary education were almost three times larger
than those for public universities (Weidman, 1995, Table 3;
Republic of Kenya, 1993, p. 184).

     Just a small fraction of the eligible age cohort is enrolled
in Kenyan universities.  While virtually all children in Kenya
enter primary school, only half of the original entering students
are still enrolled at the end of primary school.  Because just half
of the primary school leavers gain admission to secondary school,
there is an effective secondary school enrollment ratio of 24% of
the nation's young people of secondary school age (Opondo &
Noormohamed, 1989, p. 88).  In 1990, there were enough available
university places for just 7.5% of the secondary school leavers
(Mwiria & Nyukuri, 1994, pp. 10-11), so the effective university
enrollment ratio was less than 2% of university-age Kenyans.  Only
37% of the students enrolled in government universities are women
(Weidman, 1995, Table 2).
 
     In Mongolia, virtually all children also enter primary school,
but 89% complete the eighth grade, and 50% complete secondary
school (i.e., tenth grade).  Among Mongolians under the age of 34,
only 2% did not complete secondary school.  In the total workforce,
16% have completed at least some higher education (World Bank,
1992, pp. 82-83).  Women constitute 64% of the students in
baccalaureate-level government institutions of higher education.
In private baccalaureate-level programs, 76% of the students are
women (Bray, et al., 1994, Tables 1 and 2).
 
      A "Revenue Diversification Model" of Higher Education Finance
 
     Table 2 illustrates the combination of public and private
sector sources from which funding for higher education systems is
generated that has been called the "revenue diversification model"
(Albrecht & Ziderman, 1992) of higher education finance.  Even
though the model was developed with specific reference to the type
of funding structure that exists in Great Britain, the basic
components appear in a variety of national higher education
systems.
 
     Table 2. Funding Sources for Higher Education Systems by
                 Sector*
     ___________________________________________________________
 
                                   Public Sector  Private Sector
     ___________________________________________________________
     Government                          X
          Grants Commission              X
          Research Councils              X               X
          Loan Agency                    X               X
     Students                            X               X
     Alumni                                              X
     Industry                                            X
     ___________________________________________________________
 
     *Adapted from Albrecht & Ziderman, 1992, Chart 1.3, p. 14.
 
     Table 2 also suggests the interaction between the public and
private sectors in university finance.  The public sector is shown
to fund universities in five different ways, four of which do not
provide resources directly to the institutions but rather through
intermediary agencies or through students.  In this example, funds
are provided by the government to students in two ways: (1) through
direct grants which can be used to pay university costs, but are
not subject to repayment; and (2) through partial funding to an
agency which offers loans to students.  The "private sector"
component of the "loan agency" is self-perpetuating, namely,
through loan payments made by former students.
 
     Many developed countries have been placing increasing emphasis
on loans rather than direct grants to students, thereby reducing
the government share of higher education costs.  In the USA, for
instance, student aid provided by the federal government shifted
from 20% loans and 76% grants in 1975-76 to 64% loans and 33%
grants in 1992-93 (Gladieux et al., 1994, p. 134).
 
     The British government also finances a "grants commission"
(for capital projects) and "research councils" (for research
projects) which provide funds to universities on a competitive
basis.  In this model, industry "may contribute to university
finances directly or indirectly through research councils and
sponsored students" (Albrecht & Ziderman, 1992, p.13).  Alumni of
higher education institutions also contribute funds privately to
universities.  Not shown in Table 2, but certainly worth noting, is
the contribution made by industry and alumni to the pool of
available government funds through the proportion of their income
taxes that is allocated to higher education.  It is important,
however, to keep the following cautionary note in mind when
considering this type of model:
 
     ...Since revenue diversification implies also diversifying the
     outputs and activities of the university system, this process
     may lead to a change in the role of universities away from
     traditional teaching for degrees and research.  If revenue
     diversification is pressed too far, on too broad a front,
     serious issues concerning the role of the university may arise
     (Albrecht & Ziderman, 1992, p. 13).
 
     An example of the scope of revenue diversification in a highly
developed country is contained in Table 3 which shows the average
proportions of different revenue streams for public and private
colleges and universities in the USA.  The fundamental differences
in revenue streams between the two sectors lie in the greater
reliance of private higher education institutions on tuition,
private gifts, and endowments.  At least in the USA, both public
and private institutions generate equal amounts through sales and
services.  It should also be noted that even the public higher
education institutions generate, on average, almost half of their
revenues from non-government sources.  In the next section of this
paper, actual strategies for diversifying revenues are described.
 
     Table 3. Revenues of College and Universities in the USA by
                Sector, 1990-91*
     ___________________________________________________________
 
                                             Public    Private
     Tuition and fees                          16%        40%
     Federal government                        10%        15%
     State governments                         40%         2%
     Local governments                          4%         1%
     Private gifts, grants, contracts           4%         9%
     Endowment income                           1%         5%
     Sales and services
          Educational activities                3%         3%
          Auxiliary enterprises                10%        11%
          Hospitals                            10%        10%
     Other                                      3%         4%
     ___________________________________________________________
 
     * Source: The Almanac of Higher Education, 1994, p. 76.
 
         Diversifying the Sources of Finance for Higher Education
 
     The following are several strategies for diversifying the
funding base of higher education systems suggested in a recent
paper by Woodhall (1993, pp. 8-10) that are also designed to reduce
the government's share of costs.  Where relevant, specific
reference is made to the current status of efforts to employ the
strategies in Kenya and Mongolia.
 
1. Direct Cost Recovery
 
     a. Charge fees to students for tuition.  The largest potential
source of funds results from requiring students to pay fees for
tuition (basic instruction) and related instructional services
(e.g., registration, examinations, computer, access to library,
etc.).  There is considerable variability, both among institutions
and among countries, in the proportion of costs recovered via
tuition and student fees.
 
     Some Mongolian students were assessed fees for the 1992-93
academic year and all students enrolled in public higher education
in 1993-94 were being charged.  At least as initially determined,
it appeared that tuition fees for the public higher education
institutions in Mongolia were being set at levels that provided for
full recovery of all costs.  Particularly during this period of
transition into a market economy and entry into the world economic
system, it is important that there not be radical shifts in funding
patterns that would materially harm Mongolia's well-established
higher education system.  Further, even as students are required to
share costs at increasingly greater levels, it is essential that
there be some government funds available for much-needed
maintenance and improvement of buildings (Harsh winters take their
toll.), for instructional facilities such as libraries and
laboratories, for support of students from poor families, and for
faculty and program development.  Requiring total cost recovery
provides virtually no allowance for such investments in the future.
 
     With respect to the notion of "cost recovery," it is
instructive to note the following observation in a World Bank
discussion paper:
 
     ...There are no university systems which are characterized by
     cost recovery in a pure form (though there are particular
     universities that are financed in this way); in practice, cost
     recovery operates in tandem with, and complements, state
     subsidy of higher education.  Characterizing a system as one
     of cost recovery in practice relates to the breadth of student
     coverage of fees and their size in relation to costs (Albrecht
     & Ziderman, 1992, p. 11).
 
     In Kenya, public university students are required to pay fees,
but the amount continues to be quite low, currently 300 Kenya
pounds (6000 Kenya shillings, or about 150 US$) per year.  This
amount was equal to just over 10% of the total estimated government
recurrent expenditures per university student in 1992/93 of 2889
Kenya pounds (Republic of Kenya, 1993).  Any increase in fees
should, however, also incorporate some scheme for providing
scholarships to poor students with high academic potential.
 
     b. Eliminate student stipends.  Requiring students to pay
charges for board and lodging from their own funds would allow the
government to eliminate the costs of providing student stipends for
personal expenses, though it may still be desirable to provide
small stipends for books and instructional materials.  Government
stipends for Mongolian students were virtually eliminated in 1993-
94.  In Kenya, stipends for personal expenses are covered under the
student loan scheme.
 
2. Contracts and Agreements with Private and Public Sector Agencies
 
     a. Sponsorship of students.  Institutions of higher education
can seek to establish agreements with private sector employers
willing to sponsor promising students by paying their tuition and
other fees, or by providing scholarships.
 
     b. Contracts for consulting services.  Funds can be obtained
by contracting with external agencies (e.g., commerce, industry,
government, etc.) for the provision of expert services by
professors and other skilled staff.  This could include contracts
for consulting, for applied research, or for other expertise
represented within the higher education community.  Efforts along
these particular lines are now occurring in Mongolia, especially in
the Technical University.
 
     c. Paid internships.  Arrangements can be made for students to
receive salaries and/or tuition support from employers for
internships related to their fields of study.  Such internships
could be done either during a vacation period or during a semester
away from campus.

3. Income Producing Enterprises
 
     This method of generating funds is currently used by all of
the public higher education institutions in Mongolia.  The most
common of these is maintaining a herd of livestock (cattle, sheep,
goats, etc.), but there are others (renting space for a shop,
providing copying services, running bookstores, etc.).  The public
universities in Mongolia which have such enterprises generate
income, on the average, equal to roughly 10% of their total
operating budgets.  Most of the government universities in Kenya as
well as several private ones also maintain farms to generate
revenue.
 
4. Private Contributions and Endowments
 
     In many parts of the world, there are annual campaigns to
solicit gifts from alumni and staff as well as private donors.
When higher education institutions get sufficiently large
contributions (either alone or when several gifts are combined),
endowments can be established by making investments from which all
or part of the income can be used, usually for specific purposes.
Governments often encourage private contributions by providing
income tax deductions for gifts made to eligible, non-profit higher
education institutions.  Neither Kenya nor Mongolia generate any
significant revenues for higher education in this way.
 
     Higher education institutions should have sufficient autonomy
to be able to keep any additional revenue generated from contracts,
enterprises, and contributions, and not have either to return it to
the government or to have subsequent budget allocations reduced by
the amount of the income (Woodhall, 1993, p. 12).  Institutions
should be allowed to control and monitor their own expenditures,
preferably using standard reporting procedures supported by an
automated financial accounting system.  It is also essential that
those government funds which are appropriated to higher education
institutions be received in a regular and timely way.
 
5. Student Employment and National Service Scholarships
 
     a. Work-study.  This is wage earning employment, not
necessarily limited to campus jobs but administered through higher
education institutions.  There are usually some financial need
criteria which must be satisfied before a student can get a work-
study job.
 
     b. Scholarships for national service.  These programs provide
participants with the opportunity to accumulate funds, on the basis
of established formulae, that can be applied to higher education
expenses.  Often the government matches the participants'
contributions at some pre-determined rate.  Both of these
approaches involve government expenditures, but the funds are
disbursed in exchange for specified productive activity rather than
as outright subsidies.  Examples of such programs that have existed
in the USA are the Civilian Conservation Corps of the 1930's, the
Peace Corps, VISTA, and the National Health Service Corps
(Gladieux et al., 1994, p. 138).
 
6. Deferred Cost Recovery
 
     a. Tax on future earnings of graduates.  While likely to be
politically unpopular, this approach requires payment of a tax
based on salaries earned by graduates of publicly supported higher
education institutions.  It could be a payroll tax paid by
employers or be assessed on the graduates, themselves.
 
     b. Tax on private sector employers.  This would be a tax based
on either the proportion of graduates from higher education
employed or on a percentage of total earnings by the company, again
depending on the proportion of graduates among all employees.
 
     c. Student loans.  This is the most widely used mode of
deferred cost recovery.  The students who borrow money generally
either do not have the financial resources necessary to pay for
higher education during the period of their enrollment or wish to
pay back the tuition costs in inflated currency some years later.
If well-structured and efficiently operated, loan programs can be
virtually self-perpetuating.  There are five basic issues that need
to be considered in the design of any higher education student loan
program:
 
     ...First, a deferred payment program requires the
     participation of a credible collection institution with
     incentives to collect, which in most instances required the
     direct participation of commercial banks, a taxation
     department or a social security agency.
 
     ...Second, with loans, there must be a willingness to charge
     interest rates equal to or above inflation in order to
     minimize subsidies.
 
     ...Third, the relationship between necessary repayments and
     the likely income of students must be examined to ensure that
     repayment burdens never pose an excessive burden on graduates.
 
     ...Fourth, developing a means of targeting support to needier
     and more academically deserving students will be crucial to a
     program's efficiency.
 
     ...Fifth, loan losses can be justified if there are potential
     social gains that would not be reflected in a graduate's
     income (Albrecht & Ziderman, 1992, p. 100).
 
     Loan programs may include such incentives as deferred interest
payments while a student is enrolled in higher education, loan
forgiveness for graduates working in areas of national need,
subsidized interest rates, and government guarantees to private
lenders offering student loans.  In all of these cases, the loan
programs are not self-funding and require government support,
though certainly at a much lower level than direct scholarship
grants.  Further, if the government is the primary source of loans,
its financial outlay will not be reduced until a significant amount
of money is being returned through loan repayment.  For a more
detailed discussion of specific loan schemes in African and Asian
countries, see Woodhall (1991a and b).
 
     The government's inability (or unwillingness) to finance the
student loan scheme that was to have been fully implemented for the
1993-94 academic year seems to be a fundamental problem in
Mongolia.  The national government has apparently tried to shift
the burden of financial responsibility for guaranteeing loans to
the local government (aimag) level in Mongolia, but local
authorities are understandably reluctant to make commitments on the
basis of an uncertain future.  Until recently, there has been no
effective agency in Kenya for collection of outstanding student
loans, with 75-80% never being repaid (Woodhall, 1991a, p. 55).
In 1994, the government increased its effort to collect loans from
public employees by instituting a more aggressive program of
withholding monthly payments from their paychecks.
 
7. Expanding the Private Sector
 
     One additional way for national governments to reduce their
share of the total costs of providing higher education is to
encourage the establishment and growth of private institutions.
Asian countries with large private higher education sectors are
Indonesia (58% of national enrollment), South Korea (66% of
enrollment), Japan (76% of enrollment), and the Philippines (85% of
enrollment).  The private higher education institutions in
Indonesia and Japan receive 20-30% of their expenses from the
government; those in South Korea and the Philippines receive less
than 10% of their funding from the government (James, 1991, p. 6).
As is shown in Table 1, only 5% of the BA-level students in Kenya
are enrolled in private higher education institutions.  In
Mongolia, the corresponding private enrollment is 18%.
 
     The growth of private higher education institutions in
Mongolia appears to be driven by "excess demand:"
 
          Excess demand for education often exists when the
     capacity of the public school system is less than full
     enrolment; that is, the option of attending a free or low-
     price public school is not available to everyone.  If the
     private benefits from education are high (e.g., because of
     labour market rewards), many people who are left out of the
     public schools will seek places in private schools, as a
     "second best" solution (James, 1991, p. 3).
 
     In areas such as foreign languages and market-oriented
economics, the public higher education sector in Mongolia is not
able to accommodate the numbers of qualified students who seek
admission.  This is partly due to a vestigial pattern of the old
"command economy" in which government, through its National
Planning Board, continues to determine the number of places
available for each course of study on the basis of projected
manpower needs, independent of student demand.  It is also partly
due to the lack of sufficient numbers of qualified teachers in
these areas within the public higher education institutions.
 
     Largely because of the Mongolian government's failure to fund
adequately the national loan scheme in 1993-94, public higher
education institutions admitted a significant number of self-paying
students beyond the centrally established quotas into high demand
fields.  This was a way of generating revenue to meet operating
expenses during the beginning of the academic year while the
government tried to get commitments from local authorities to
guarantee students' loans.  Funds are not being released to higher
education institutions by the government until the loans are
guaranteed.
 
     In Kenya, the private sector has only recently been allowed to
expand as the government has been more willing to authorize the
establishment of private higher education institutions.  The
secondary level in Kenya can, however, be also characterized as
being driven by "excess demand," with just over half of all
students attending private secondary schools (James,1991, p. 5).
 
     A fundamental concern for government authorities in any
country is making certain that private higher education
institutions meet reasonable standards of academic quality and
operational procedures.  Four areas in which governments regulate
private educational institutions are (1) physical facilities -
health and safety standards, space and furniture, target
enrollments related to physical facilities; (2) academic
regulations - curriculum, degree requirements, national
examinations, language of instruction; (3) organizational and
reporting requirements - periodic financial reports, minimum
investment, tax status; and (4) teachers and students - teacher
qualifications, procedures for hiring and firing teachers,
allowable student fees, student selection criteria, government
representatives on institutional governing bodies (James, 1991, p.
25).
 
     Governments vary, of course, in the emphases placed on any
specific area of regulation.  With respect to allowable profits,
for instance, the governments of Korea and the Philippines regulate
both the amount of tuition that can be charged in private higher
education institutions and the numbers of students, thereby
limiting income.  There is also the issue of tax status of revenues
generated by auxiliary enterprises in both public and private
higher education institutions as well as fairness of price
competition with private enterprise providers of similar products
and services.  Such concerns are common in both developed and
developing countries.
 
     Ultimately, however, it is the responsibility of governments
to establish policy with respect to the diversity of funding
sources for higher education; the levels of student fees, the types
of loan or subsidy programs that will be made available to assist
needy students in the payment of fees in order to ensure broad
access to higher education; the mix of public and private sector
institutions; standards for the accreditation and operational
authorization of both public and private sector higher education
institutions; and the degree of autonomy higher education
institutions will have in the control and management of their
finances.  This paper has provided some specific examples, but any
application of the various strategies for revenue diversification
mentioned will have to be adapted to fit the particular social,
political, cultural, and economic environment of the host country.


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Note:
 This is the revised version of a paper that was originally
presented at a conference on "Reform of Higher Education in
Mongolia" sponsored by the German Foundation for International
Development (DSE) in Ulaanbaatar, Mongolia, 18 November 1993.  It
was subsequently revised and the material on Kenya added for
presentation in a seminar held on 8 June 1994 at the Institute of
Research and Postgraduate Studies, Maseno University College,
Maseno, Kenya.  Grateful acknowledgement is accorded to
participants in both the DSE conference and the Maseno seminar as
well as three anonymous reviewers for their helpful comments.