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Introduction

Thanks to a series of works by P. G. Altbach, Japan’s higher education system has been given distinguished status among non-Western higher education systems. As he showed in his writing on the transition from dependence to autonomy among Asian universities (Altbach and Selvaratnam 1989), the Japanese higher education system was already coming to be recognized as a partial exception among other Asian higher education systems, which existed in the scientific periphery, dependent on influence from the Western world. In his argument on the application of the center-periphery paradigm to higher education (Altbach 1998), he distinguished two different dimensions, namely, centers and peripheries among nations and centers and peripheries within national university systems. By the end of the 1980s, Japan, along with India and the Philippines, had already developed a large and quite diverse academic system with both highly selective and mass-based universities (Altbach and Selvaratnam 1989), and the majority of students were enrolled in the private higher education sector (Altbach 1999). Altbach also pointed out the significant diversity among those private higher education institutions and identified the existence of a few highly prestigious universities such as Keio and Waseda (Altbach and Umakoshi 2004). In his recent works on world-class universities, Japan was again mentioned as an exceptional country outside the USA, having a number of private research universities (Altbach and Balán 2007).

Among various world university rankings, only Quacquarelli Symonds (QS), which relies heavily on a reputation indicator survey conducted among academics and employers, lists Keio and Waseda Universities within the top 200 in the world in 2012. It may be premature to assert that the top Japanese private universities have achieved world-class status in research. However, a few private universities have definitely achieved a central position in the research field, both internationally and domestically.

Altbach also wrote about the reform of higher education in Japan at the beginning of the twenty-first century (Altbach and Ogawa 2002). Although he did not directly use the term “policy borrowings” (Tanaka 2005), he used Japan as a typical example of a peripheral but independent country that was able to borrow a number of higher education ideas from other countries. Altbach also pointed out that the German Humboldtian system was the main model for Japan when it established its modern higher education system in the late nineteenth century and indirectly influenced other Asian countries, most of which had once been colonized by Japan, through implantation of the Japanese model (Altbach and Umakoshi 2004).

Altbach detected a resistance to change and certain curious characteristics in Japanese higher education reform, however, including the incomplete impact of major reform imposed under the supervision of the US-led General Headquarters just after World War II.

Throughout the postwar period, there has been much talk, a veritable library of reports and analyses, and a number of government committees and other official bodies that have explored the problems of the Japanese academic system. It is fair to say that much change but little reform has occurred in Japanese higher education. (Altbach and Ogawa 2002, p. 1)

Nevertheless, structural change took place in the latter half of the twentieth century, notably diversification of the academic system through the “massification” of higher education, mainly through the expansion of enrollment in private and nontraditional higher education institutions (Altbach and Ogawa 2002).

The emergence of mass higher education and the expansion of the private sphere of higher education, both from a financial and an operational point of view, is one of the main topics in higher education research. All higher education expenditure cannot realistically be funded from public resources. Costs must be shared and operations must also be entrusted to private higher education institutions (Johnstone 2006).

Altbach has never suggested the imposition of convenient models for policy borrowings but rather has provided insightful external views on Japanese higher education from a comparative and global perspective. Altbach’s works raise an interesting point on the mechanisms of structural change of higher education systems. That is, a series of policy borrowings may facilitate the endogenous development of higher education. As Umakoshi (2004) also argues, the role of the private sector has been significant in meeting the demand for mass higher education in Japan and Asia. However, the impact of higher education policy on the expansion and diversification of the private higher education sector, especially on the establishment of elite status by some private universities, has not been clarified in detail.

In this chapter, the author examines the role of support and control of private universities in the process of realizing mass higher education in Japan from the 1960s. In so doing, he tries to identify the actual meaning of educational policy borrowings in the development process of a higher education system.

This chapter focuses on the establishment of elite private universities that rely on a high degree of selectivity of students for their prestige. The author also suggests that these characteristics of higher education in Japan prevented competition that would have led to quality improvement, at least until the beginning of the 1990s. As Altbach and Ogawa (2002) and Eades et al. (2005) argue, Japanese higher education is currently facing a fundamental challenge to make structural changes, in its quest to achieve the highest quality and relevance of its education and research.

Framework

Interaction between the government and private higher education institutions is implemented through the market. In Japan, especially before 2004, when the requirement for certified evaluation (accreditation) was introduced, the national government’s only power of direct regulation was to authorize the establishment and abolition of private universities. A private university can set the level of its tuition fees autonomously in the higher education market, and the market for private higher education is highly segmented according to the prestige of an institution and its field of study. Knowing this market structure, the Japanese government has tried to intervene to influence private higher education indirectly or through the market. The existence of national and local public universities also has an influence on the market of private universities (Yonezawa and Baba 1998). When a prestigious private university sets its tuition fees, it has to take into consideration the tuition fees charged by national and local public universities, which are competing to attract the same group of students.

There are two principal functions of the government that influence the market behavior of the private universities. The first is a supporting function, represented by a direct subsidy to the universities. There are two main types of financial support mechanisms for private universities, direct and indirect. Direct support is a subsidy given to a private university as an institution. Currently, the Japanese government provides public subsidies for the operational expenditures of private universities, as well as for their infrastructure and equipment. The second principal function is control, represented by quantitative control of student enrollment. The profile of support and control may change, and this change influences the institutional behavior of private universities in the market, which in turn impacts on the direction of the government’s support and control policy.

As a peripheral higher education system, the Japanese government’s policies inevitably reflect global financial and educational trends. Policy trends in the USA and Europe were the dominant influences on the financing and system formation of higher education in Japan up until the end of the twentieth century. Yano (1992) refers to Western impact on Japanese education policies, such as the introduction of education planning specifically with a view to developing a highly talented and educated workforce, and then human capital theory from the latter half of the 1950s. From the beginning of the 1970s, welfare state policy dominated in public policy and finance in Japan. Subsidies from the Japanese government toward the operational expenditure of private education institutions, national higher education plans, and a new type of nonuniversity postsecondary education system were introduced. From the 1980s, however, global trends related to structural adjustment and neoliberal economies reversed the fiscal policy of Japan, steering it in the direction of austerity. By the end of the decade, the Japanese government, in response to the worldwide spread of ICT and the knowledge economy, was starting to intensify its investment in science and technology, again following global policy trends on “new public management” and reaction to “market competition.”

The quantitative expansion of higher education may be explained by an endogenous factor, namely, demographic trends among Japanese youth. The expansion occurred mainly through the absorption of temporarily increased demand for higher education from first and second baby boomer generations. Mass universal access to higher education was realized through expanded provision of higher education opportunities after the graduation of these baby boomers.

Four different stages of combined governmental support and control have defined the process of establishing mass higher education in Japan. In the first period, from 1962 to 1969, the government offered no support and no control. The government loosened its control of student enrollment in order to meet the increasing demand for higher education by first baby boomers. However, it offered no financial support for the operating costs of private universities. In the second period, from 1970 to 1975, while there was still no government control, support was available in the form of a subsidy for the operational expenditure of private universities. In the third period, from 1976 to 1985, the government provided both support and control for private universities. The government strengthened its control of student enrollment by means of its new higher education plans. In the final period, from 1986, the government relaxed its control of student enrollment but at the same time also reduced its support for operational expenditure.

After passing the peak demand from second baby boomers at the beginning of the 1990s, the government continued to loosen control of enrollment numbers (Amano 1997; Morozumi 2010). At the beginning of the twenty-first century, a continuous decline in the youth population finally led to saturation of the higher education market, the realization of universal access to higher and postsecondary education, and an oversupply of higher learning opportunities, especially among less prestigious private universities.

The central issue discussed in this chapter is when and how the elite private universities emerged in the Japanese private higher education sector. In Japan, top private universities enjoy an established status within the hierarchical structure of the higher education system. They compete in a student market alongside national and local public universities. The author defines these top private universities as “elite universities based on student selectivity.” Private universities in Japan, even the most prestigious ones, rely heavily on revenue from tuition fees, and yet their fees are relatively low, because they have to compete with national and local public universities. The research performance of these private universities is also subject to certain limitations. The top national universities have a great advantage in the research infrastructure in basic sciences over local public and private universities. In social sciences and humanities, the number of students per member of teaching staff is much higher in private universities than in the national institutions, and the teaching load of professors is in general heavier. Having said so, competitive private universities have limited the student enrollment from significantly large pool of applicants, partly following the governmental policies and partly as a branding behavior for seeking prestige. The prestige of top private universities thus tends to be solely based on the high selectivity of students.

Historically, it was the national universities that expected to foster elites necessary for national development. Although they ranged widely in terms of prestige and size from the beginning, private universities were generally expected to absorb the demand for mass higher education. Since the 1960s, however, some private universities have started to increase the selectivity of students. By the end of the 1990s, however, Japanese higher education policies entered a new phase with the introduction of performance and quality assessment in higher education.Footnote 1

Expansion of the Private University Sector: 1962–1970

In the history of Japanese private higher education, there were several periods of expansion. The first period was around 1919, when the establishment of private universities was officially permitted by the government. It was during this period that the oldest private universities such as Waseda and Keio were officially recognized as such. The second period was characterized by expansion during World War II. Young people were systemically organized by enrolling them in the universities for human resource development in order to sustain a country at war. The third period started around 1949, when the prewar polytechnics were upgraded to university status as part of educational reform after the war. One or more national universities were established in each of the 47 prefectures, following the state university system model in the USA.

In the 1960s, Japan experienced its fourth and largest expansion of the higher education system, mainly thanks to the capacity of private universities to absorb demand. This great expansion reflected national policy for expanding programs of natural sciences and engineering and the need to handle the rapid increase in demand from the first baby boomers, from the mid-1960s. In 1962, the Ministry of Education, Science and Culture (Monbusho) deregulated the new establishment of departments and changes in student enrollment numbers in existing programs, which had previously required government approval (Amano and Yoshimoto 1996). At that time, public subsidy for the operational expenditure of private universities did not exist.

As mentioned above, the major market function of the private universities in Japan was to absorb demand (Levy 1986), whereby they could achieve financial stability through economies of scale and scope, as expenditure per student is lower if the size of the class or school is larger, and if more than one program can be delivered to common classes. In order to increase the size and variety of the programs, however, private universities have to invest in facilities and teaching staff. Following the model of US elite private universities, the Private School Act (1949) presumed that operational expenditure should be covered mainly by tuition fees and that capital expenditure (e.g., buildings) should be covered by an endowment. Osaki (1999) pointed out, however, that, because expansion was so rapid, most capital expenditure by the early 1960s was actually covered by tuition fee income. In 1964, the Monbusho allowed private universities to cover two thirds of the cost of facilities by borrowing.

In the no-support-and-no-control environment, Japanese private universities chose one of two paths, either to continue to absorb demand or to transform themselves into elite universities. They faced several obstacles in the way of realizing US-type elite private universities capable of conducting high-quality research and providing first-class education, thanks to huge endowments and research funds, however. First, there was a large gulf in terms of education and research between national universities and private universities. Second, there was no tradition of large endowments in Japan, nor were they socially affordable. Last, private universities, especially the prestigious ones, were not able to increase tuition fees because of resistance from the students. Tuition fees at national and local public universities in the 1960s were nominal, and students and the general public identified the gap in fees between public and private sector as a social issue.

Financial Support and Financial Crisis: 1971–1975

The history of public financial support for private higher education goes back a long way in Japan. The first support, starting in 1919, took the form of official authorization of private universities. In order for them to receive authorization, the government required them to provide the basic means for maintaining their operation. However, in reality, none of them was able to provide the required amount and the government was obliged to support them in meeting the requirement. Thereafter, the Japanese government occasionally offered loans or temporary support, for example, for recovery from a huge earthquake in the Tokyo area in 1923 and to repair some of the damage sustained during World War II, or provision for graduate schools and new programs for science and engineering in the 1950s and 1960s.

It was from 1970, however, that regular financial support to the private universities started. Article 89 of the Japanese Constitution, enacted in 1946, states that “no public money or other property shall be expended or appropriated for the use, benefit or maintenance of any religious institution or association, or for any charitable, educational or benevolent enterprises not under the control of public authority.” On the other hand, Article 59 of the Private School Act, enacted in 1949, states that the national government or a municipal authority may provide subsidies and loans to support private school education. Using the interpretation that private schools and universities are a part of “public education,” the private universities began to consider the possibility of public subsidy for their operational costs, a movement that picked up momentum in the mid-1960s.

There are two main reasons why private universities might be prepared to accept public subsidies. First, the salary of national civil servants, including faculties and staff of national universities, was raised substantially by the government in the 1960s. This exerted significant upward pressure on overall personnel costs at the private universities, which was an incentive to raise tuition fees or seek other revenue sources such as government subsidies. In addition, as has been mentioned, private universities cooperated with the government to accept the temporary increase in demand for higher education from the first baby boomers, which made it easier for the universities to plead their “public” role.

From the point of view of the government, student protests about the high level of tuition fees at top private universities from the mid-1960s was a big concern. The quality of university education became a social problem as a consequence of rapid expansion. National policy was about to transform into a welfare state policy to compensate for greater socioeconomic diversity through income redistribution. Subsidies toward the operational expenditure of private universities were finally introduced in 1970 and continued to increase year by year throughout the decade.

Nevertheless, the private universities did not escape their financial difficulties, at least in the first 5 years. Although the influence of the first “oil shock” in 1973 should be taken into account, the continuous expansion of private higher education system in line with the rapid decrease in numbers of pupils leaving education after the first baby boomers is acknowledged to be the main cause of the failure of this policy. The newly established universities faced a shortage of applicants because of their less advantageous location and lower prestige, whereas most of the existing universities continued to absorb the rising demand. For old, prestigious universities, salary increases for staff became a crucial factor. At an aggregate level, the financial condition of private universities worsened in this period, and the government felt the need to intervene in the private university market with a different policy tool.

Governmental Control Under the Higher Education Plan: 1976–1985

After the deregulation of the establishment of departments and changes in student enrollment in 1962, the government was left with no means of controlling the level of student enrollment into the private higher education sector. Moreover, it became common for private universities to enroll more students than the number reported to the government. The official quota for enrollment was set within a certain standard of educational quality, i.e., provision of sufficient faculties, facilities, and equipment. Through the expansion period, however, over-enrollment of students was frequently observed, and concern about the quality of education at the private universities accordingly became widespread.

Arguments about governmental control of private universities had already been in full swing when the Private School Act was enacted in 1949. As a result of a failure of consensus between the government and private universities, the request from the universities for a public subsidy was not granted, but they gained considerable autonomy and independence from the government. When subsidies for operational expenditure were introduced in 1970, regulations were made to enable government recommendations on the change and suspension of newly established departments and graduate schools and increases in student enrollment quotas. However, as a result of strong opposition to such regulation from the private universities expressed during debate at the House of Representatives, actual implementation was postponed (Osaki 1999).

The discussion on government control of total student numbers now took a different direction, namely, within the debate on a long-term national plan for the provision and expansion of education. In 1971, the Central Council for Education (CCE), the advisory council on educational policies of Monbusho, published a report entitled “Basic policy for the total provision and expansion of school education in the future.” This report officially acknowledged the public role of private universities in absorbing demand for provision of higher education. At the same time, the report set out the issue of public financial support for private universities and schools and the establishment of a national higher education plan.

After much political debate and lobbying, the Act on Subsidies for Private Schools was enacted in 1975. The range of subsidy for operational costs of private universities was set as “up to 50 %” instead of the “50 %” specified by Monbusho. The government introduced the First Higher Education Plan, to run from 1976 to 1980, and the Second Higher Education Plan, from 1981 to 1986. These plans set targets for absolute total student numbers, including those of private universities and colleges. The implementation was achieved rather smoothly, partly because the government agreed to transform the existing over-enrollment by the private universities into the official quota just before the introduction of the government plan (Amano and Yoshimoto 1996). A non-university higher education “special training college” was also founded to absorb postsecondary education demand that could not be filled by the private universities through the introduction of a higher education plan.

The combination of increased public subsidy for operational expenditure and relatively strict control of student enrollment gave a significant boost to the financial recovery of the private universities. However, all increases in student enrollment and the establishment of new universities, faculties, and departments had, in principle, to be examined on their own merits before any allowance was granted. Student numbers especially in metropolitan areas such as Tokyo and Osaka were strictly controlled, and in some cases increases were prohibited. At the same time, the share of public subsidy by the national government within the total revenue of private universities reached 29.5 % in 1979, the highest in history.

The Second Higher Education Plan came into force in 1981. Originally, the plan expected a modest increase in enrollment capacity in the national university sector. However, having reexamined its welfare state policy, the government was minded to set strict budgetary ceilings, partly influenced by global policy trends toward neoliberalism. The Open University of Japan (OUJ) was also established in 1983, and the government expected OUJ to absorb demand in the public sector. Strict control of student numbers in the private university sector therefore did not change. The amount of government subsidy to the operational expenditure of private universities did not increase, and the share decreased to 19.2 % in 1985 and to 11.2 % in 1999 because of a continuous increase in personnel costs at private universities. The “support and control” realized by the end of the 1970s became merely weakened “support” from the beginning of the 1980s.

Thanks to this combination of financial support for operational expenditures and control of student enrollment, most of the private universities were able to achieve financial stability, which, however, came at the cost of higher tuition fees and greater increases in financial burdens to the households of the students. In this period, the tuition fees of national and local public universities were also raised, more dramatically than those of the private universities. The introduction of the financial subsidy for the operational expenditure of private universities did not realize its initial purpose, namely, to reduce the financial burden on private university students. The support certainly stabilized the financial condition of the majority of private universities, however, which in turn led to an improvement in the learning environment. This financial stability continued even after the weakening of financial support in the 1980s, when private universities, especially the leading ones, achieved greater financial autonomy.

Inducements Leading to Renewed Expansion: From 1986

After the Second Higher Education Plan ended in 1986, the Third Higher Education Plan was in force from 1986 to 1992, a period in which a rapid increase in demand for higher education from the second baby boomer generation was expected. The plan took into account the fact that the number of secondary school graduates would decrease rapidly after 1992. In severely straitened economic circumstances, the government budget could not stretch to supporting any large expansion of the national higher education sector, and consequently the private sector was again expected to absorb the temporary increase in demand (Amano 1997). Thus, the government decided temporarily to permit increased enrollment in private universities and colleges and provided additional incentives for the purpose.

Demand from the second baby boomer generation having passed, the government set up the Fourth Higher Education Plan, in force from 1993 to 2000, and the Fifth Higher Education Plan, from 2000 to 2004. From the time of the Fourth Plan onward, the rationale for systemically providing higher education opportunities was lost because of the continuous decrease in the numbers of young people. Namely, the government does not have to stimulate further increase of student enrollment for maintaining the enrollment rate of prospective age cohort. Instead, the Fourth and Fifth Plans simply set out projections and let the market decide on actual enrollment numbers (Amano 1997; Morozumi 2010). After 2005, the government abandoned its creation of higher education plans, under the long-term expectation of continuous decreased of youth population.

Based on a detailed analysis of financial and other data, Morozumi (2010, 2012) concludes that private universities continued to strive to increase their numbers enrolled until the beginning of the twenty-first century. Faced with the saturation and decline in size of the student market, however, the gap between prestigious universities situated in metropolitan areas and the less prestigious, typically smaller universities and colleges situated in small towns or rural areas became wider. On the other hand, the number of private 4-year universities has continued to grow, through the upgrade of a significant number of private junior colleges that had mainly catered for females in short-term education (Yonezawa and Kim 2008).

National land policy, from the 1980s onward, also actively provided incentives to set up university campuses as a means of economic revitalization, the funding coming from local sources in both newly developed districts in rural areas and downtown areas of megacities (Yonezawa 2010). These small new campuses, many situated in rural areas, are now faced with a likely serious shortage of students.

On these rather complex context, Levy (2012) makes an interesting argument that too much focus on shaky, small private institutions may lead to the overestimation of the magnitude of overall enrollment decline to Japanese private higher education. Actually, the existence of private universities, especially the selective ones, has also frequently provided the impetus to introduce new public management policies and “market competition” with national and local public universities. From the end of the 1990s, “privatization” of national universities has been debated repeatedly, even after incorporation of all national and most local public universities in about 2004. As regards the research function of higher education institutions, especially in the fields of science, technology, engineering, and mathematics (STEM), leading national universities retain their dominant position.

Conclusion

The Japanese higher education system has been peripheral at the global level, although several national universities claim world-class status in STEM field research. In general, private higher education tends to be peripheral even within a national system. However, a few private universities have succeeded in establishing themselves in a position close to “central,” at least in terms of their high level of selection of students. This was realized through a combination of support and control from the government based on a series of ad hoc policy borrowings. Endogenous factors such as demographic change and systemic diversification both across and within public and private sectors have also played an indispensable role in this process.

Philip Altbach’s recent works, especially those focusing on world-class universities, stress the benefits of an internationally engaged higher education sector (Altbach and Balán 2007; Altbach 2010; Altbach and Salmi 2011). Japanese higher education suffers severe limitation to academic flows across borders, partly because of its mature national academic system. Japanese national policies for world-class universities officially stress competition between and within public and private sectors (Yonezawa 2007). As regards the internationalization of university education, some private universities surpass the top national universities. Few of the private universities can compete with the top ten or so national universities in research, however, especially in the STEM fields.

An impressive change that Japan is experiencing is the diversification of the policy models on which progress is based. Japan referred to the United Kingdom, Australia, and New Zealand in introducing new public management policies from the end of the 1980s and then to Korea, China, and other Asia-Pacific countries in terms of “world-class” university and research policies and academic mobility from the end of the 1990s. It cannot yet be argued that the Asia-Pacific region has become a center of higher education. However, the context in which Japanese higher education operates under the center-periphery paradigm is becoming more complicated.