4 The mixing of the waters

4.1 Introduction

Modern developments and changing characteristics can only have profound consequences for the regulatory framework of higher education and research. It is time for new juridical mechanisms to govern processes, which are underpinned by a new legislative philosophy.

Figure 1.

Mixing concepts of public service and private instrumentalisation is a viable way, as new paradigms are lacking. Structures of governance must be analysed with a view to the legal status of institutions, which appear as:

• public, publicly funded;
• public, with mixed funding;
• private, privately funded;
• private, publicly funded;
• private, with mixed funding.

Universities' status and role in society do not make it easy to 'translate' managerial concepts into juridical instruments before applying them. It takes a couple of kilometres before the coca-cola coloured water of the Rio Negro and the laterite muddy water of the Solimoes mix, near Manaus, into the greyish Amazon river. Likewise, it will take time to design and implement a new regulatory basis that guides institutions better through good and bad times, regardless of the person in charge.
The analysis of the status, historic development, composition and role of the higher education institution, indicates that a better mix of public governance and business management is feasible. The typology and style of regulation usually follow automatically from the legal status:

However choices do not only depend on the legal status. As Figure 1 shows, it is better that it does not depend on the legal status at all. The good news is: it does not have to be so.

4.2 On the interface of corporate and public bureaucracies

The fleet on which paragraph 3.2 embarked, is a military hierarchy of strict public nature. A comparison with a company specialised in bringing together intelligent people, trying to become more clever by developing and teaching knowledge and know-how, throws another light on governance. Higher education is not fully comparable with enterprise; it has no single success-indicators such as turn-over, profit, market-share, costs, or the Dow-Jones, that produce clear quantitative data. In both public and private sector, management structures and techniques must be adjusted to the circumstances and environment. Higher education institutions have no shareholders watching the hiccups of the stock exchange, but a large variety of stakeholders, having different interests, who (should) base decisions on a long-term return on investment. Higher education institutions neither respond 'normally' to markets nor to public governance.
According to Henry Mintzberg (1996): 'Business can learn from government no less than government can learn from business; and both have a great deal to learn from co-operative and non-owned organisations'. it is useful to explore further the cross-fertilisation of the public and private domains, to take even further steps than Mintzberg suggest in the same article: '..we need balance among the different sectors of society.’
This applies to attitudes no less than to institutions. Higher education provides excellent examples of how to govern complex business; a flat structure, loyalty to teaching and research, a long experience in networking. It is Japanese, American and European. It has unique opportunities and favourable characteristics. Then, which juridical techniques and structures optimalise responsiveness to demands of students and employers, legitimate political decisions and satisfy taxpayers demanding value for money, at the same time as protecting legitimate institutional interests?
Business administrators are less experienced in the public way' of thinking about governance. Administrators in higher education naturally tend to the bureaucratic public traditions. They cannot apply management techniques of enterprise without a change agent. As such, legal instrumentalisation short-circuits. It would be interesting to analyse management crises in higher education of the last decade, especially to what extent higher education institution managers draw on management literature, and tend to neglect the hybrid culture of the institution and the academic freedom of staff and students, and mistakes in the conversion private - public and policy-copying are the cause of malfunction.
The publicly coined structures and regulations are not terribly effective in a hybrid organisation on the interface of the public and private sector. Tensions between the representatives of the public and the private approach are difficult to bridge, whereas they cannot be explained by incompatibilité d'humeur. The literature on public administration in a market environment does not yet draw equally on general theories of business and public administration. The latter is still largely based on the former. It is necessary to draw not only on philosophers who dealt with the relations between State and its citizens, but also on those writing about public bureaucracies. In 't Veld (1995) treats the cultural stability of hybrid institutions on the interface of public domain and private enterprise. For hybrid institutions special legal constructions have been designed, but many questions remain unsolved. For example: how to define, and thus treat, students: as pupils, customers, clients, citizens, part of the academic community, or subjects (compare Mintzberg, 1996); how to find an optimal mix that helps to improve curricula, teaching methods, program design, guidance to the labour market, legal protection of students.
The distinction between public and private domain is tough, but maybe provisional. Making a clear difference between the two has always been difficult. De Vijlder (1996) in fact proves implicitly that it does not make sense to think in terms of the public or private nature of the task, hut then follows another course and does not set out to find an alternative. The relatively clear legal difference between the public or private status of an organisation, has been often based on accidental events, arbitrary evaluations of the situation, political decisions on what belongs to the private sphere and what not, political decisions about the legal status of the organisations the State found and/or fund. There is reason to rethink the relevance of the legal difference and to consider the effects of this dogmatism it could prevent expensive waves of decentralisation - centralisation, and privatisation - nationalisation. As also shown by In 't Veld (1995), the choice between instruments of public and private law is presently unnecessarily limited and complex. To make better choices, we need to amalgamate public and private models, concepts and legal instruments: to think in terms of an open field, to bring public and private closer together.