Institutional Determinants of the Development of Private Higher Education in Europe

This chapter aims to discuss the institutional conditions that determine the nature, strength and importance of the private sector in higher education. Before this is done however, we need to clarify some of the concepts with which we will be operating. One such concept is that of Institution’. Probably the most common use of this term is to describe an organizational body. In the context of higher education, this might mean a university or vocational school. The Organization for Economic Co-operation and Development (OECD) uses the word ‘institution’ precisely in this sense, as it refers to universities as Tertiary Education Institutions’, or TEIs. Other analysts and scholars often use the term ‘Higher Education Institutions’, or HEIs, when describing universities or vocational schools. The word institution however might also have a wider meaning, as interpreted by institutional economists like Douglas North, Ronald Coase and Oliver Williamson. In this sense an institution is a system of values, standards and organizations that determine and govern relations between people, companies and economic actors in general. These values and standards can have an official character, in which case we say that they are ‘formal’ institutions, or they can be unwritten or based on custom and thus ‘informal’.