An Unspectacular Debut

I wrote an article and it got published. It's all very exciting. Well, not so much the article itself (which sounds sagely but isn't), but more that it got published.

Someone out there is listening ha ha!

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Combining an ineffective regulator with adventurous producers and anxious consumers invariably causes conflict. The alcohol industry in India has always been an example, and now the higher education sector seems headed in the same direction.

Conditions are just right for the consolidation of a parallel, unregulated and unofficial market for higher education, at least for technical subjects such as management.

The regulator in this case is the All India Council for Technical Education (AICTE). It grants approvals and maintains norms and standards that it sets. But these norms are now outmoded, and regulation has given way to a tangle of files, committees and other bureaucratic inevitabilities.

But the good news is that the adventurous spirit that now characterises Indian markets may yet cause reform where others have failed.

What’s new is that now in the education market — comprising educational institutions, students and the potential employers of graduates — all three parties are willing to share quality- and price-associated risks. The net effect is to create a dynamic alternative market which bypasses the regulatory environment altogether.

So there are now institutes, especially management ones, which function without AICTE approval (for instance, ISB). Students enrol in these institutes although they lack official sanction. And at the end of the chain, employers snap up the graduates, even though they may only hold diplomas. The AICTE — and therefore regulation — features nowhere.

The risk is not just of price and quality, but also of being declared illegitimate. Though each of the three parties ends up bearing only part of this risk, this is in sharp contrast to the more cautious environment of yesteryears when nobody undertook any risk and only official approval mattered.

There is then a clear shift in signalling — where value now counts more than legitimacy. And this trend is catching on. In effect, the market is forcing the regulator to modernise itself.

This is most welcome. Indeed, there is a lot to gain from a state of less regulation and more institutional freedom. For example, a dynamic private sector will facilitate the development of an education system that is more responsive to changing times. India’s economic growth will continue to create new jobs and there will be a constant need for new and regularly updated educational programmes. The market is usually better placed to respond to these changes.

However, there are dangers in an unregulated market. At the very least, there must be some standardisation of degree requirements for the labour market to be effective.

Though initially employers may have tie-ups with unregulated institutions, future employers may not feel secure without being able to verify and compare the quality of education received, and may not hire such candidates. Appetites for risk are notably fickle, and a shift in the opposite direction is not out of the question. Moreover, standardisation will also help institutions set transparent admissions criteria.

Regulation is also crucial in the case of professional colleges, where sub-standard graduates can cause much harm. People need confidence in their doctors or lawyers, and a regulated, reputed degree helps. Anyway, Indian consumers are price sensitive and education is a politically sensitive subject, so institutions are unlikely to be left to their own devices. This is especially true given that student mobility and financial resources are still limited.

But though the need for regulation is not in doubt, market dynamism coupled with the highly bureaucratic system is certain to further a parallel unregulated market. This is counter-productive in the long run.

Instead, incentives should be created for institutions to stay within the system. This will unify the market and eventually improve the regulator’s reach and scope. But this can only be done by first relaxing control.

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The glorious link? Here.

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Just Wondering...

You are the leader of a powerful alliance of countries that have come together in response to being attacked by terrorists. As leader, you have certain goals.

One of these goals is to do away with religious fundamentalists in Countries A and B, because they are the most notable sponsors of the organisations that have been bombing your countries.

You also enlist the help of Country C, itself a major sponsor of those terrorist organisations, but lucky enough to have convenient geographical positioning and a way with words.

You know that if Countries A, B, or C have civilian regimes then things will be difficult. Action will not be taken quickly enough, too many people will have a say in what can be allowed to happen, and generally things are not conducive for decisive action.

You are, of course, fortunate that none of the three countries has a civilian regime. One is ruled by a dictator that you want out, the other by a group of tribal warlords that you placed there yourself, and the third by an army leader whose anti-democratic moves you silently condone, especially for the reasons mentioned above.

This Country C, ruled by a military dictator, poses the biggest challenge. (Countries A and B have been blasted out of existence and it is up to whoever is interested to pick up the pieces.)

From your alliance's point of view, it is good to let the military leader, General D, rule Country C as long as possible. He has proven to be malleable, responds to your demands, and makes the right noises, even if you don't know what he is up to when your back is turned.

But General D has an interest to stay in power. His biggest opposition to remaining in power comes from Political Parties E and F, that each ruled the country before the transfer of power to the military. Parties E and F look to consolidate their power base while 'in opposition' so that the next time there is an election they might have a chance again.

General D does not like this. The only thing he can do to prevent this political unrest from becoming a movement against his rule is by weakening Parties E and F. Sending their leaders into exile is all very well, but the power void must be filled by someone.

Enter Fundamentalist Parties G and H. General D courts their friendship and appeases them, because he doesn't see them as a power threat (just yet) and because their support renders Political Parties E and F ineffective. Fundamentalist Parties G and H may even win the next election.

If Fundamentalist Parties G and H win, or even grow in strength, then this boosts the case of all subsidiary fundamentalist organisations in the region. Country C has already been a Bad Boy, selling objectionable pictures and diagrams to other local bullies. Goodness knows what will happen if these guys come to power.

As leader of the alliance, you watch all this. The very fundamentalists whom you wanted to de-fang have been made more powerful by the very military leader whom you recruited to be on your side. You have strengthened your own enemies through your convenient mutual friend's self interests.

What do you do now? Make friends with Neighbour I, busily portraying itself as Another Victim and A Good Guy, just to add some more masala to the regional stew that brews?

Nah. Go play some golf.

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