The Canadian Journal ofHigher Education La revue canadienne d'enseignement supérieur Volume XXXIV, No. 3, 2004 pages 55-72 Austrian Higher Education Meets the Knowledge Society HANS PECHAR University of Klagenfurt ABSTRACT Austria has g o n e through two cycles of university r e f o r m s since the 1960s. T h e first aimed to o p e n the universities to social and labour m a r k e t d e m a n d and to m a k e their structures m o r e d e m o c r a t i c and flexible. T h e second r e f o r m cycle dealt with glitches in the overly close relationship b e t w e e n universities and state bureaucracy. Bureaucrats still tightly controlled universities through line-budget f u n d i n g and other f o r m s of m i c r o - m a n a g e m e n t . This close d e p e n d e n c y was abolished and university a u t o n o m y greatly strengthened w h e n traditionally w e a k university leadership was replaced by a strong president and centralized administration, and by the creation of g o v e r n i n g boards. T h e author argues that the second r e f o r m cycle was m u c h influenced by A n g l o S a x o n m o d e l s of university g o v e r n a n c e and constituted an almost total break with the traditional structures of Austrian universities. 56 Hans Pechar RÉSUMÉ L'Autriche a entrepris deux grandes séquences de réformes universitaires d e p u i s les années 1960. L a p r e m i è r e faisait accepter aux universités les d e m a n d e s sociale et é c o n o m i q u e du m a r c h é d u travail. L a d e u x i è m e r é f o r m e cherchait à distancer l ' u n i v e r s i t é d e l ' É t a t enseignant, a r r a n g e m e n t caractérisé par u n e i n g é r e n c e b u r e a u c r a t i q u e centralisatrice d e l o n g u e date et m i n é e par des m é c a n i s m e s d ' a p p r o b a t i o n détaillée des b u d g e t s universitaires. Cette relation d e d é p e n d a n c e étroite a été abolie et l ' a u t o n o m i e a été établie grâce au r e n f o r c e m e n t du leadership universitaire par la n o m i n a t i o n d e recteurs présidents forts de leurs p r o p r e s fiefs administratifs, et par l ' é t a b l i s s e m e n t d e conseils d ' a d m i n i s t r a t i o n . L ' a u t e u r m o n t r e à quel point cette dernière r é f o r m e s'inspirait principalement de m o d è l e s a n g l o - s a x o n s en m a t i è r e de g o u v e r n a n c e universitaire, et constituait u n e r u p t u r e quasi-totale avec les structures traditionnelles des universités autrichiennes. INTRODUCTION In the last f o u r decades, Austria has experienced two cycles of higher education reform, sharply differentiated by policy, and separated by a decade of consolidation. T h e first cycle began in the 1960s and peaked in the mid-1970s, putting higher education under the umbrella of welfare state policies, emphasizing student participation, allowing junior faculty m e m b e r s to participate in decision-making, and broadening research. T h e policy catchwords were " o p e n i n g " and "democratization." T h e second cycle followed international policy trends of the 1990s. It produced r e f o r m legislation granting full legal status to universities as public enterprises. T h e relevant buzz words are "deregulation" and "efficiency." The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 Austrian Higher Education Meets the Knowledge Society 57 OPENING AN ELITE SYSTEM G o v e r n m e n t s in the 1960s and 1970s had m a n y g o o d reasons to take action in higher education policy. Austrian universities w e r e in a bad shape. T h e y r e m a i n e d elite institutions only in size, serving about five percent of the potential student population. T h e glorious research period of the late 19th and early 20th century w a s long over. T h e political catastrophes of the 1930s and 1940s resulted in t w o waves of expulsion f o r political and racial reasons that deprived universities of m a n y able researchers (Stadler, 1988). O n l y the most active Nazis w e r e expelled in the i m m e d i a t e post-war years; é m i g r é s w e r e rarely w e l c o m e d back. Universities w e r e k n o w n f o r intellectual narrowness rather than innovation. Educational r e f o r m b e c a m e a political priority in the 1960s. T h e g o v e r n m e n t set the course f o r educational e x p a n s i o n and modified the traditional chair system (Ordinarienuniversitat). T h e overarching goal of this first r e f o r m cycle was to " o p e n u p " rigid elite structures (Pechar, 1996). It was vital to r e m o v e visible and hidden barriers that excluded m a n y talented students. T h e spectrum of recognized disciplines and methodological approaches b r o a d e n e d to include sociology and political science. Finally, the structures and procedures of university selfg o v e r n a n c e c h a n g e d so j u n i o r faculty and students had a limited say in decision-making. T h e first cycle was triggered by a r e m a r k a b l e policy shift. For the first time, education was regarded not just as a matter of culture, but as an investment yielding e c o n o m i c and other social benefits, an important factor in e c o n o m i c g r o w t h and competitiveness. M o s t political actors thought student participation in a d v a n c e d education h a d not kept pace with labour m a r k e t d e m a n d . E d u c a t i o n a l opportunities had therefore to b e e x p a n d e d and access improved. W h e r e f o r m e r l y policy m a k e r s took it f o r granted that low participation rates in the elite tracks of secondary schools and in universities p r o v e d lack of talent, it n o w b e c a m e obvious that the pool of talent by f a r e x c e e d e d the n u m b e r of students in institutions of The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 58 Hans Pechar higher learning. T h e m a i n policy goal b e c a m e to m a k e use of that hidden resource ( A u s s c h o p f u n g der Policy makers took Begabungsreserven). various measures to participation. T h e y w i d e n e d access to Gymnasium encourage student and other kinds 1 of elite secondary education. E n t r a n c e e x a m s to Gymnasium w e r e loosened during the 1960s and abolished in 1971. T h i s w a s an important signal to parents previously deterred by selection procedures. Within a f e w years, graduates f r o m the secondary elite track ( M a t u r a n t e n ) increased f r o m 8 % of the age cohort (1960) to 17% (1971) and eventually to 4 0 % (2002). Financial barriers to students f r o m low and m i d d l e i n c o m e families fell. In 1963, a n e w student aid act g a v e legal entitlement f o r grants to needy students w h o fulfilled certain m i n i m a l criteria of a c a d e m i c a c h i e v e m e n t . In 1971, tuition f e e s w h i c h had steadily diminished because they were never a d j u s t e d to inflation w e r e abolished altogether, redefining higher education as a public good. M o s t key figures in Austrian universities had little appetite to take m o r e students. T h e y worried that e x p a n s i o n of student n u m b e r s w o u l d eventually u n d e r m i n e the privileges of elite institutions. B u t Austrian universities had n o e f f e c t i v e m e a n s of resisting d e m a n d . All graduates f r o m the elite track of secondary education w e r e entitled to enrol at any Austrian university. R e f o r m s that w i d e n e d access to Gymnasium had inevitable c o n s e q u e n c e s on first e n r o l m e n t at universities. T h e r e w a s n o legal way to k e e p students out of the ivory tower. Despite professorial opposition, student numbers increased t r e m e n d o u s l y (see Table 1) T h i s extraordinary g r o w t h w a s caused by a c o m b i n a t i o n of rising participation rates on the o n e hand, and the g r o w i n g age cohorts of the b a b y b o o m e r s on the other hand. D u r i n g the early 1970s, g r o w t h was publicly w e l c o m e d as e v i d e n c e of successful public policy. G r a d u a t e s w e r e n o longer in short supply and there w a s s o m e discourse on " o v e r e d u c a t i o n . " T h e first indications of graduate u n e m p l o y m e n t forced reassessment of the e c o n o m i c benefits of higher education, and a c o n s e q u e n t shift in g o v e r n m e n t policy. The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 Austrian Higher Education Meets the Knowledge Society > o <N O "I "n r- o m On no" N O O N C D oo" 00 oo o N O Tf o O N vo <N C M CO C M <N <N CO NO NO ON ON ON NO O oo ON "n > < N "5 ®ì 1 .5 o< O N 00 00 59 vo ( N Ì vo OS 1 <N —< 00 C O C M in 00 e 00 oo" cn >n vo o —* <N 00 oo" o On o-i e Qi E I ON > / 1 - ^tr- ci NO OO "Ì. CO oo O N C O "n O ci <N ON •t <N <N ci 00 (N rON > K O 0 00 m < N "Ì. C O N O N O O N O N CJ U-! O T<" C N (N ON o 3 e N O (N O t- ON in T J o r-" » m o IT) f- © 9\ FH 1—4 —< 00 ON «ri m ^f" in o N O no" 00 IT, 00 0\ o ON 0\ FH 1 — 1 ©\ © © o The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 60 Hans Pechar Policy makers began to express concern over high drop-out rates and the long duration of programmes of study. 2 It b e c a m e increasingly evident that Austrian universities had not sufficiently adapted to large-scale higher education. Laissez-faire teaching and learning appropriate in a small and elite system, where students were treated as "apprentice researchers" free to determine their own course and pace of study, produced chaos in a system attempting mass higher education. Most academics defended liberal style of teaching and learning as the only appropriate pattern of adult higher education—as opposed to school-like teaching (Verschulung). Students w h o did not fit in were by definition unsuited and unqualified f o r elite education and should look for alternatives. But there were f e w alternatives and Austria did not establish a non-university sector (Lassnigg & Pechar, 1988). Traditionally, the governance pattern of the elite system embraced a dualism between the administrative and academic sides. A s a state agency, the university was, of course, subject to centralised decision-making by legislation and state bureaucracy; but all issues regarding teaching and research lay in the hands of the academic oligarchy—all chair-holders in charge of their own specialized field of research. T h e university saw itself as a self-governing community of scholars held together by c o m m o n values. Problems were solved by chair-holding professors and the state bureaucracy. T h e rector was expected primus inter pares to represent the university, not to govern it, let alone m a n a g e it. A c a d e m i c s saw no benefit in the university's achieving corporate autonomy. T h e educated elite saw it as a cultural obligation of the enlightened secular state (Kulturstaat) to enhance academic life. The state's duty was to protect the integrity and autonomy of universities and secure academic f r e e d o m f r o m outside pressures, supporting academics as civil servants with life tenure. The implicit precondition of dual governance was mutual trust and respect between academics and policy makers and c o m m o n l y shared assumptions about the nature of universities. The first r e f o r m cycle seriously disturbed this tacit understanding. T h e government introduced modern policy concepts borrowed f r o m other O E C D countries. W h e n a majority of the academic oligarchy opposed The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 Austrian Higher Education Meets the Knowledge Society 61 higher education r e f o r m s , the g o v e r n m e n t e n f o r c e d its policies through legislation and other m e a n s of regulation. M u t u a l trust and respect b e t w e e n a c a d e m i c s and policy m a k e r s began to erode. T h e state was n o longer a benevolent patron; a c a d e m i c s no longer accepted and trusted the decisions of policy makers. O n e area of conflict w a s quality assurance in teaching. It had been taken f o r granted that curriculum quality was the responsibility of academia: a loose legal f r a m e w o r k f o r all aspects of teaching and learning allowed professors a high level of personal discretion. T h e first m a j o r r e f o r m act established a n e w legal basis f o r study courses, a m a j o r step t o w a r d s f o r m a l i z a t i o n and h a r m o n i z a t i o n of curricula under federal law and ministerial decrees. T h e c o m m e n t a r y to the n e w act explained that education at universities was simply too important as to b e left to a c a d e m i c s (Gotz, 1993). U s i n g the n e w legal f r a m e w o r k , policy m a k e r s intended to establish a reliable ex-ante control, assuring high quality while introducing social relevance to the curriculum. M o s t a c a d e m i c s regarded such study regulation as inappropriate g o v e r n m e n t interference. T h e m o s t h e a t e d area of conflict c o n c e r n e d the role a n d status of j u n i o r a c a d e m i c s , f o r m e r l y s u b o r d i n a t e to c h a i r h o l d e r s as h e a d s of a c a d e m i c units. U n i v e r s i t i e s c o u l d o n l y c o p e with rising student n u m b e r s by e x p a n d i n g j u n i o r f a c u l t y n u m b e r s and w i d e n i n g their responsibilities. N o n - p r o f e s s o r i a l a c a d e m i c staff took on an i n c r e a s i n g r a n g e of a c a d e m i c f u n c t i o n s . T h e U n i v e r s i t y O r g a n i s a t i o n A c t of 1975 ( U O G 1975) g r a n t e d s t u d e n t s and j u n i o r a c a d e m i c s limited v o t i n g p o w e r in collegial bodies. All a t t e m p t s a i m e d to i n t r o d u c e participatory d e c i s i o n - m a k i n g structures within the university naturally m e t stiff o p p o s i t i o n f r o m the a c a d e m i c oligarchy. A MANAGERIAL REVOLUTION? T h e 1980s w e r e a time of consolidation after a period of severe changes and disappointment of high expectations triggered by r e f o r m . In general, Austrian d e v e l o p m e n t s ran in parallel with other O E C D countries. Expectations based on naive interpretations of h u m a n capital The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 62 Hans Pechar theory w e r e suddenly c o n f r o n t e d with graduate u n e m p l o y m e n t . W h e n it b e c a m e clear the p r o m i s e s of h u m a n capital and its benefits w e r e not likely to b e fulfilled, higher education ceased to b e a top priority of public policy makers. A s elsewhere, fiscal consolidation b e c a m e the m a i n concern of g o v e r n m e n t s . T h u s , the alliance b e t w e e n r e f o r m - o r i e n t e d a c a d e m i c s and policy m a k e r s gradually e n d e d . M u c h that f o r m e r l y w o r k e d t h r o u g h implicit a g r e e m e n t s w a s n o w based on f o r m a l rules and legal acts. A c a d e m i c s started to c o m p l a i n about excessive regulation and bureaucratic overload. T h a t universities w e r e state agencies w a s suddenly seen as a burden. T h e d o m i n a n t view w a s that b e c a u s e universities w e r e b o u n d by a rigid state bureaucracy, they could not d e v e l o p creatively. T h e g l o o m y a c a d e m i c m o o d of the t i m e is portrayed in Riiegg (1987). A survey of expert opinions a m o n g 17 E u r o p e a n states c a m e to the conclusion that Austrian experts in higher education had lost nearly all confidence in their system ( M c D a n i e l , 1992). A c a d e m i c s n o w sought to liberate universities f r o m state regulation. " A u t o n o m y " b e c a m e the c a t c h w o r d . A second r e f o r m cycle w a s triggered, w h e n politicians and senior civil servants b e g a n to agree with these views of state regulation. Increasingly, policy m a k e r s felt o v e r w h e l m e d by the c o m p l e x i t y of the m a s s higher education system. T h e y lacked the necessary m e a n s (sufficient information and influence to motivate actors at lower levels) to i m p l e m e n t "best solutions." Visions of " o n e best s y s t e m " under central steering f a d e d away. At the end of the 1980s, g o v e r n m e n t a b a n d o n e d its a p p r o a c h of stringent state regulation of all kinds of education institutions. T h i s m o v e t o w a r d s deregulation w a s facilitated b y fiscal consolidation. Senior civil servants h a d n o interest in the ugly details of executing cuts and b e c a m e quite sympathetic to arguments f o r e n h a n c e d a u t o n o m y of higher education institutions. A n important aspect of the second r e f o r m cycle w a s a c h a n g e in the national role m o d e l s to which policy m a k e r s referred. Policy b o r r o w i n g (Halpin & Troyna, 1995) plays a crucial role f o r the design and legitimation of f u n d a m e n t a l r e f o r m s in small countries. D u r i n g the first cycle, policy m a k e r s referred mainly to c o r r e s p o n d i n g r e f o r m s and concepts The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 in Austrian Higher Education Meets the Knowledge Society 63 G e r m a n y , d u e to the c o m m o n cultural tradition of both countries and the similarity of their systems. During the second r e f o r m cycle, there was g r o w i n g interest into the A n g l o - S a x o n traditions of higher education, both the U K (Pechar, 2002) and later the U S (Pechar, 1993). C o n c e p t s and policies totally alien to the Austrian tradition, such as accreditation or governing boards, w e r e b o r r o w e d f r o m the A n g l o - S a x o n c o n t e x t — a very d e e p c h a n g e in the underlying p a r a d i g m s of higher education policy. G o v e r n m e n t s a b a n d o n e d the Kulturstaat tradition f o r the A n g l o - S a x o n policies of N e w Public M a n a g e m e n t . T h e s e n e w concepts g a v e rise to another w a v e of r e f o r m s . Within a f e w years, the architecture of Austrian higher education c h a n g e d fundamentally. T h e core r e f o r m of the second cycle was a f u n d a m e n t a l re-organization of university governance, through the University Organisation A c t of 1 9 9 3 - U O G 1993 — a n d the University Act of 2 0 0 2 - U G 2002, w h i c h t r a n s f o r m e d institutions f r o m state agencies into public enterprises. In 1991, the education ministry published a draft f o r organizational r e f o r m p r o m i s i n g to liberate universities f r o m m o s t f o r m s of g o v e r n m e n t a l control (Federal G o v e r n m e n t , 1991). Policy m a k e r s claimed this w a s a response to a c a d e m i c requests f o r m o r e a u t o n o m y (Pechar & Pellert, 1998). First, though, the g o v e r n m e n t wanted to strengthen senior managerial positions at universities, replacing the r e c t o r — w h o represented the tradition of "first a m o n g e q u a l s " — with a president. N e w links w e r e to be forged b e t w e e n universities and external stakeholders by introducing the A n g l o - S a x o n concept of trusteeship and by establishing governing bodies which w o u l d represent relevant (and p o w e r f u l ) stakeholders. Policy m a k e r s believed universities w o u l d at least partly support this n e w policy of deregulation. B u t university a u t o n o m y can be interpreted in totally different w a y s by different actors. A c a d e m i c s still saw the notion of a u t o n o m y within the conceptual f r a m e w o r k of the Kulturstaat tradition, while the g o v e r n m e n t had already adopted the l a n g u a g e of N e w Public M a n a g e m e n t . In the H u m b o l d t i a n tradition, a u t o n o m y is used chiefly as a s y n o n y m f o r a c a d e m i c f r e e d o m of the individual, i.e., the full professor. M a n y professors saw a u t o n o m y as a b u z z w o r d f o r restoration of the "old r e g i m e " of a c a d e m i c oligarchy, of the Ordinarienuniversitat. Junior The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 64 Hans Pechar faculty and students mainly favoured the concept of the autonomous "group university" and its collegial bodies in which—after the democratic reforms of the 1970s—they had some representation. T h o s e collegial bodies should govern the university without any interference f r o m the state, whose sufficient and unconditional f u n d i n g was simply taken for granted. Politicians and state bureaucrats advocated autonomy because they wanted to turn universities into enterprises which would be responsible not only f o r academic, but also for financial and administrative affairs. This interpretation of autonomy would go hand-in-hand with the development of a professional management and a strengthening of external scrutiny by supervisory boards (Hollinger, 1992). A majority of academics strongly opposed the very idea of institutional autonomy, seen as an excuse for government abandonment of responsibility. The government softened its initial approach: financial senior leadership positions were strengthened, but their power was balanced by the significant influence of the collegial bodies. The influence of external stakeholders was reduced, and governing boards were replaced by advisory bodies. The ministry refused to give l u m p sum budgets to universities, arguing universities lacked sufficient managerial structures. T h e University Organisation Act of 1993 ( U O G 1993), a c o m p r o m i s e between proponents and opponents of the reform, amounted to a cautious step towards autonomy. It was easy to see this was an intermediary stage. Probably the most important consequence of the U O G 1993 was the appearance of newly p o w e r f u l rectors and deans. This small but influential group of senior academics were sensitive to external needs and pressures and could no longer be regarded as a group representing only the internal interests of academe, but increasingly as a mediating power. It was the new rectors w h o complained that the U O G 1993 was only a half-measure. The government's first draft f o r the U O G 1993 had offered full legal-civil status to universities, and lump sum budgets to f r e e universities f r o m the state accountancy (Kameralistik), and it was this first version that the new academic managers favoured. Thus, the government gained a powerful ally in the university, some of w h o m were active in drafting the next reform law (Titscher et al., 2000). T h e majority The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 Austrian Higher Education Meets the Knowledge Society 65 of academics, however, continued to o p p o s e the idea of full legal and civil status. In the late 1990s, tensions b e t w e e n g o v e r n m e n t s and a c a d e m i c s intensified u n d e r continual fiscal cuts a n d r e n e w e d m a n a g e r i a l i s m . In 2 0 0 0 , a c o n s e r v a t i v e g o v e r n m e n t firmly c h a n g e d the style of policy m a k i n g . In the f a c e of g r o w i n g hostility, earlier s o c i a l - d e m o c r a t i c g o v e r n m e n t s h a d retained the c o n s e n s u a l politics of p o s t - w a r years. T h e n e w c o n s e r v a t i v e g o v e r n m e n t p r o u d l y a n n o u n c e d a " s p e e d kills" a p p r o a c h f o r c i n g big c h a n g e s within a f e w years. In 2001, a n e w o r g a n i z a t i o n a l act w a s d r a f t e d and in 2 0 0 2 , a f t e r a f e w m i n o r c o m p r o m i s e s , the University Act 2002 ( U G 2 0 0 2 ) w a s p a s s e d by P a r l i a m e n t ( S e b ö k , 2002). I m p l e m e n t a t i o n b e g a n in 2 0 0 4 . Universities ceased to b e state agencies and b e c a m e full legal entities, but were not privatized. T h e y remain "legal persons under public l a w " (Körperschaften öffentlichen Rechts). T h e federal g o v e r n m e n t retains responsibility f o r basic f u n d i n g , but universities are e x e m p t f r o m the fiscal regulations of the federal b u d g e t ( K a m e r a l i s i t k ) and instead receive a l u m p s u m b u d g e t s at their o w n discretion. R e s o u r c e s are allocated on the basis of p e r f o r m a n c e contracts. Twenty per cent of the b u d g e t allocation will b e b a s e d on indicators. T h e internal organization of universities — other than the general regulations regarding the d e c i s i o n - m a k i n g structure—is not prescribed by law. Instead, organizational details are d e t e r m i n e d by statutes ( S a t z u n g ) decided by the a c a d e m i c senate. E a c h university has a governing board (Universitätsrat) of b e t w e e n five and nine m e m b e r s , half elected by the a c a d e m i c senate, and the other half appointed by the Minister. Rectors are elected by the boards and thus m o r e independent of all collegial a c a d e m i c bodies, but m o r e dependent on the boards. T h e n e w universities b e c o m e the e m p l o y e r s of all a c a d e m i c and n o n - a c a d e m i c staff. A c a d e m i c s are n o longer civil servants, but e m p l o y e d by private contracts. This n e w organizational law is probably the most far-reaching r e f o r m since 1849, w h e n Austria e m b r a c e d the H u m b o l d t i a n model. Austrian universities will acquire a kind of corporate a u t o n o m y unparalleled in the last 4 0 0 years. T h e new act m a k e s Austria a leader in the " m a n a g e r i a l The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 66 Hans Pechar revolution" on the E u r o p e a n continent. M o s t policy m a k e r s regard this as a success. M o s t a c a d e m i c s h a v e m i x e d feelings about the imposition of the corporate decision-making structures onto universities. T h e second r e f o r m cycle has a n e w policy on student expansion. W h e r e the 1980s w e r e shaped by a sceptical, s o m e t i m e s even disapproving attitude to expansion, policy m a k e r s of the 1990s again agreed the social and e c o n o m i c value of popular educational aspiration. Subtle "coolingo u t " strategies g a v e way to a m o r e positive and optimistic v i e w of student expansion. T h e h o m o g e n e o u s character of Austrian higher education w a s n o w seen as an obstacle to further expansion. Private universities w e r e legalized in 1999. T h e most important step in diversifying the system was establishment of the Fachhochschul sector in 1993. T h e g o v e r n m e n t s o f t e n e d its severe ex-ante control and adopted a m o r e liberal a p p r o a c h to quality assurance. Higher education b e c a m e a " m i x e d g o o d " w h i c h yields social and private benefits and h e n c e should b e f u n d e d by public and private contributions. In 2001, the g o v e r n m e n t introduced tuition f e e s f o r the first time in 30 years. T h e Fachhochschul sector w a s legally established in 1993 and started to enrol students the f o l l o w i n g year. Its m a i n mission is to provide vocationally-oriented courses which can b e effectively c o m p l e t e d in three or f o u r years (most Fachhochschul courses require a m i n i m u m length of study of f o u r years). Since this n e w sector is built f r o m completely n e w institutions, its g r o w t h is necessarily m u c h slower than the university sector. In 2 0 0 2 / 0 3 , the sector had about 17,000 students and had already p r o d u c e d 10,000 graduates. C o m p a r e d to other O E C D countries, the establishment of a nonuniversity sector in the 1990s was rather late. This at least partly explains the peculiar role Fachhochschulen play within Austrian higher education. If Austria had established Fachhochschulen in the late 1960s or early 1970s, this sector would h a v e b e e n f u n d e d and organized on similar lines to the universities, as state agencies with line-by-line budgets. B u t in the early 1990s the policy context had c h a n g e d . Fachhochschulen were designed as an alternative to universities not only in their educational profile, but also in their m a n a g e m e n t , administration, and f u n d i n g . The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 Austrian Higher Education Meets the Knowledge Society T h e Fachhochschul 67 policy w a s a m o r e radical departure f r o m Austrian traditions than U O G 1993 (Pratt & Hackl, 1999). T h e r e w e r e n o legal o w n e r s h i p restrictions. All institutions w e r e o w n e d by " q u a s i - p r i v a t e " associations or corporations and g o v e r n e d by a professional m a n a g e m e n t . A c a d e m i c and n o n - a c a d e m i c staff were e m p l o y e d and appointed directly by the institution. Students w e r e admitted in accordance with available study places. C u r r i c u l u m decisions w e r e m a d e by a c a d e m i c s in cooperation with institutional m a n a g e m e n t . T h e final responsibility f o r quality was in the hands of an external professional body, the Fachhochschulrat, w h i c h guaranteed m i n i m a l standards of quality. Fachhochschulen were expected to vary widely in terms of profile and quality of their education. Fachhochschulen received a l u m p s u m f r o m the federal g o v e r n m e n t based on student n u m b e r s and subsidiary f u n d s f r o m multiple public sources, including provinces, municipalities, and in s o m e cases chambers. T h e establishment of the Fachhochschul sector is regarded as the m o s t significant success story of the last d e c a d e in Austrian higher education. This sector has already built a h i g h reputation a m o n g s t students, e m p l o y e r s , and the general public, and has established a different culture of learning to that of the universities. Students are expected to take the normal workload, and the institution m u s t accept a high d e g r e e of responsibility f o r student needs. Early indications are that f e w students drop out ( 1 0 - 2 0 % ) and that most c o m p l e t e their courses in "standard t i m e . " D u r i n g the 1970s and 1980s, courses and curricula in universities w e r e controlled by Parliament, and any modifications usually required legislation. Political authorities claimed to define the " o n e best solution" f o r each level of education, but of course views on appropriate curricular measures d i f f e r e d according to contradicting expert opinions and political convictions. Policy m a k e r s and a c a d e m i c s b e c a m e increasingly dissatisfied with the slow pace of curricular r e f o r m . T h e second r e f o r m cycle liberalized the paternalistic tradition of quality control. Public opinion leaders, the general public, and policy m a k e r s n o longer believed in the " o n e best solution." It s e e m e d to m a k e better sense to allow a certain a m o u n t of competition b e t w e e n different curricular profiles. To protect students against unacceptably low quality offerings, Austria adopted A n g l o - S a x o n practices of accreditation. The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 68 Hans Pechar This liberal approach to quality control w a s first applied in the Fachhochschul sector, which empowered the Fachhochschulrat to accredit courses on a m o d e l strongly influenced by the e x a m p l e of the British polytechnics and the United K i n g d o m ' s Council f o r National A c a d e m i c Awards (Pechar, 2002). A similar approach was regarded as imperative in 1999, w h e n the n e w act established private universities. T h e main aim of the Austrian Accreditation Council ( A A C ) is to o p e n the university sector to private suppliers. T h e Council scrutinizes m i n i m u m standards of applicants, such as n u m b e r of p e r m a n e n t staff, research activities, admission procedures, range and variety of study courses, and financial liability. For public universities, the present situation is quite different. In 1997, the tight ministerial ex-ante control of university studies w a s replaced by a n e w study law w h i c h granted significant a u t o n o m y to the universities and their study c o m m i s s i o n s , w h i c h establish and maintain study courses. T h u s f a r this devolution of responsibility f o r curricula has not b e e n b a l a n c e d by external scrutiny, accreditation, approval, or suprainstitutional evaluation. T h e Ministry has p r o m i s e d establishment of an "evaluation a g e n c y " f o r 2004. D u r i n g the 1970s and 1980s, the idea of f r e e higher education as a public good was rarely contested. W h e n fiscal consolidation b e c a m e the top priority, the g r o w t h rate of higher education expenditure fell, and the resultant decline in per-capita expenditure stirred debate on possible additional revenues f r o m private sources. Conservatives have never b e e n enthusiastic about free higher education. T h e situation was quite different f o r the social democrats, w h o p r o f o u n d l y c h a n g e d Austrian higher education during the early 1970s. F r e e higher education w a s r e g a r d e d as the core of those r e f o r m s . B u t e v e n in the social democratic c a m p , the fiscal crisis c h a n g e d attitudes. D u r i n g the 1990s, doubts arose w h e t h e r this policy had met the big expectations of equality of educational opportunities. H a d the social m a k e - u p of the Austrian student b o d y really c h a n g e d since the 1960s? A survey (Guger, 1994) c o n c l u d e d that about 3 0 % of students c o m e f r o m families of the highest 10% i n c o m e brackets. Students f r o m disadvantaged w e r e The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 Austrian Higher Education Meets the Knowledge Society 69 still strongly under-represented. It is d o u b t f u l that e x p a n s i o n has brought any significant change. F r o m the p e r s p e c t i v e of social justice, f r e e h i g h e r education is m u c h m o r e a m b i g u o u s than m o s t supporters a c k n o w l e d g e . It is mainly the better-off w h o benefit f r o m the public e x p e n d i t u r e required to provide f r e e h i g h e r education. O n the other hand, it r e m a i n s true that f e e s can h a m p e r access b y l o w - i n c o m e students. In order to prevent this, f e e s must b e b r o u g h t into line with the social condition of students and their ability to pay. In 2000, the newly elected conservative g o v e r n m e n t decided to introduce tuition f e e s of 3 6 3 Euros per semester, beginning in the 2 0 0 1 / 0 2 a c a d e m i c year. T h e m o v e w a s controversial, especially since only t w o w e e k s previously the minister of education h a d p r o m i s e d in a T V interview that n o f e e s w o u l d be introduced during the present legislative term. Critics pointed out that the f e e s p r o v i d e d n o additional i n c o m e to universities, since they w e r e collected b y the treasury as essentially a "student t a x " to facilitate fiscal consolidation. Also, the g o v e r n m e n t introduced "flat f e e s " f o r all enrolled students, with no differentiation b e t w e e n full-time and part-time students. 3 Students w h o c o m b i n e study with work, and h e n c e require a longer duration of studies, w o u l d pay m o r e f o r their d e g r e e than full-time students. T h e most important question r e m a i n e d w h e t h e r f e e s w o u l d f u n c t i o n as a social barrier f o r students f r o m low i n c o m e families. It is too early to a n s w e r this question, based on empirical evidence. T h e f e e s are relatively low, and there is an e x e m p t i o n f o r students w h o are eligible f o r student aid. E v i d e n c e f r o m the first three years suggest that f e e s caused no decline in the n u m b e r of active students. E n r o l m e n t figures did declined by m o r e than 2 0 % (Table 1), but this can b e explained as the exit of non-active paper students w h o under previous laissez faire conditions stayed enrolled f o r various reasons (section 1.1). Estimates based on examination statistics show that the n u m b e r of active students 4 r e m a i n e d stable (Pechar & W r o b l e w s k i , 2002; Federal G o v e r n m e n t , 2002, p. 150). In 2001/02, w h e n f e e s w e r e first charged, there w a s about an 8 % decline in the n u m b e r of first enrolments, but this was c o m p e n s a t e d f o r during the i m m e d i a t e l y f o l l o w i n g years with higher than expected first enrolments. The Canadian Journal of Higher Education Volume XXXIV, No. 3, 2004 70 Hans Pechar CONCLUSION Although most Austrian academics emphasize the differences between the first and the second r e f o r m cycle, especially the contrast in their underlying policy paradigms, the two phases have m u c h in c o m m o n . Future historians of Austrian higher education might instead point out the c o m m o n characteristics of r e f o r m policies since the 1960s, a period in sharp contrast to the f o r m e r elite system. The c o m m o n ground of the two r e f o r m cycles is the diminishing role of government as benevolent patron of universities (Kulturstaat) on the Humboldtian model. The precondition of this pattern was a small, h o m o g e n e o u s system of universities held together by the c o m m o n values of an educated elite—including senior civil servants, w h o ensured circumstances favourable to elite institutions. The emergence of a knowledge-based e c o n o m y changed the social foundations of universities fundamentally and irrevocably. This tremendously boosted the prestige of research and teaching at universities, at the same time abolishing many privileges taken f o r granted during the elite period. Higher education became a need rather than a luxury, an absolute necessity in terms of social d e m a n d and economic competitiveness. During the 1960s and early 1970s, it was easy to c o n f u s e the new economically driven r e f o r m policy with the old state benevolence. Governments increased f u n d i n g and granted unprecedented attention and importance to universities. But a crucial difference soon emerged: governments no longer gave unconditional support to elite institutions as a matter of noblesse oblige. Public f u n d i n g would henceforth be based on the expectation of social and economic returns. In this perspective the t w o r e f o r m cycles were two policies with a c o m m o n goal—to m a k e universities more responsive to social and economic demands. The Canadian Journal of Higher Educa tion Volume XXXIV, No. 3, 2004 ^ Austrian Higher Education Meets the Knowledge Society 11 Notes 'Such as BHS, the professional schools at the upper secondary level. Austria belongs to the countries with the highest drop out rates (more than 50%) and the longest duration of studies (7.5 years to the first degree) within the OECD (cf. OECD 2003). 'Although Austria has no formal part-time status for students, at least half of all students combine study with work. 4 "Active students" were those who took at least one examination during a period of two years. 2 References Federal Government. (1991). Die neue Universitätsstruktur (The new university structure). Reformkonzept (Green Paper). Wien: BMWF. Federal Government. (2002). Hochschulbericht Wien: BM:BWK. (Higher Education Report) 2002. 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