Costa Rica

Costa Rica:

Cause and Effects of Structural Adjustment Policies on the

Public and Private Sectors of Higher Education

Liza Rubenoff

December 13, 2011

Teboho Moja-International Perspectives on Educational Reforms

New York University

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Costa Rica

IntroductionThroughout its history, the country of Costa Rica has valued the importance of having an

educated society and lawmakers have put the education system at the forefront of economic and

political decisions since the late 1800’s when it became one of the first countries in the world to

have free and obligatory education (Gill, 1980). Primary and secondary education has always

been a primary concern for the national agenda, however the changes to the field of higher

education in the past several decades has shifted this focus for government policymakers. Up

until the 1970’s, the higher education system of the country consisted only of the University of

Costa Rica. However, the economic landscape of the global market in the late 1970s deeply

impacted the development of Costa Rica and a recession lead to the participation of the World

Bank in providing monetary support and policies. As these policies included cutbacks to funding

in public services, it created an opportunity for beneficiaries to establish a private sector to the

higher education system in the country. Therefore, the purpose of this paper is to examine the

cause and effects of the Structural Adjustment policies implemented by the World Bank in the

1980’s on the public and private sectors of higher education in Costa Rica, with further

investigation on the implications that have occurred in relation to the institutional mission,

funding, and perceived quality of higher education in the country.

Education System of Costa Rica

Primary and Secondary Education

The General Basic Education is mandatory and free for all children in Costa Rica without

restrictions. This part of the education system is for a duration of 9 years that is divided into four

cycles: cycle I encompasses grades 1-4; cycle II includes grades 5 and 6; cycle III includes

grades 7-9; and cycle IV includes grades 10-12 (The Structure of the Educational System in

Costa Rica, 2010). The first two cycles perform the function of elementary education, in which

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after completion a student receives a Diploma of Elementary Education, while the final two

cycles complete a student’s general education. Students must complete cycles III and IV in order

to receive their Diploma of Secondary Education. The Ministry of Education requires testing of

all students (in both public and private schools) during the 6th, 9th and 12th grades. The 6th Grade

Exam, referred to as Pruebas Nacionales de Sexto, tests students in the subject areas of math,

social studies, Spanish, and science. The 9th Grade Exam tests students in the subject areas of

math, social studies, Spanish, English, French, science, and civics. The final exam, which is

required for all students to pass in order to earn their High School Diploma (or Bachillerato),

tests students in math, social studies, Spanish, English, French, biology, and civics (The

Structure of the Educational System in Costa Rica, 2010).

Public Higher Education

Higher education in Costa Rica does not have a long history as the first institution, the

University of Costa Rica (UCR), was founded in 1940. When UCR was founded it assumed

responsibility for all higher education in the country and remained the only institution for nearly

three decades (Gill, 1980). Upon opening its doors to the public in 1941, the university president

Rafael Calderon Guardia envisioned the role of the university as one that would “radiate light

and disperse knowledge in every direction, direct public attention to social problems and

contribute to general progress of the Republic” (Twombly, 1997, p.5). Therefore, from its

inception the University of Costa Rica has always sought to teach with a humanistic approach

that would contribute to the solution of social problems and create progress for the country

(Twombly, 1997). While the main campus of the university is located in Ciudad Universitaria

Rodrigo Facio in San Jose, there are several regional centers of the university throughout the

country to provide access to populations of students in more rural areas. At the main campus in

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San Jose, the academic programs are organized around five areas: arts and letters, sciences,

social sciences, engineering and architecture, and heath (Gill, 1980). The academic area that has

always proven to be the most popular amongst students is the School of General Studies

(estudios generales), which provides a humanistic cultural background that includes a

course in Spanish, fundamentals of philosophy, history of the culture, and one elective to be

chosen from the disciplines of biology, sociology, or mathematics (Gill, 1980). The curriculum

of estudios generales has been viewed as a pillar of excellence by the academic community and

continues today to pride itself on being one of superior culture that “encourages the study and

investigation of the pure sciences and of problems that pertain to the economic, political, and

social life of the nation” (Twombly, 1997, p.5). In terms of gaining access to the University of

Costa Rica, students must have a completion of Cycle IV and take an entrance exam of academic

aptitude similar to that of the SAT exam in the United States. Academic grades from high school

along with the entrance exam are given equal consideration in gaining access for admission;

however, undergraduate admission is highly selective with only a 25% acceptance rate (Gill,

1980).

Universidad Estatal a Distancia. While the University of Costa Rica was the only

institution of public higher education in the country for many years after its inception, several

more institutions have since been established including the Universidad Estatal a Distancia

(UNED). Established in 1970, UNED was created to help bridge the gap of the rising demand

for higher education and the lack of institutions available in the country. Because many students

resided in communities outside the city of San Jose, access to higher education was unobtainable

(Borden & Rumble, 1983). The hope by establishing UNED was to create an institution that

would “not only open up educational opportunities to new target populations but would also

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alleviate the pressure of social demand for entry to the campus-based universities and, as such,

help to democratize higher education in Costa Rica by increasing the overall participation rate

and by providing higher educational opportunities to adults” (Borden & Rumble, 1983, p. 431).

Academic programs through UNED are provided through forms of texts, exercises, and tests and

students can consult with tutors or full-time professors of the university by telephone or email.

Currently, students at UNED can pursue a variety of degree and diploma programs (carreras),

as well as the Free Studies Program, which allows students to register for individual courses of

interest (Borden & Rumble, 1983). In gaining admission to UNED, students must have the

normal completion of Cycle IV but are not required to take any entrance examinations. Most

students are required to take UNED’s Ciclo Basico (Foundation Course) first which consists of

six courses: Spanish, mathematics, social sciences, science, and philosophy (Borden & Rumble,

1983).

Private Higher Education

Since the rise of private institutions in the higher education system began in the 1980’s,

over thirty have been established. Amongst those thirty institutions, however, there are a wide

variety of classifications based on several factors including their size, their number of academic

programs offered, and the disciplinary nature of their academic offerings (Castro, 2010). In

looking at these factors, private institutions are grouped into six categories: private large

comprehensive universities, private medium comprehensive universities, private small

comprehensive universities, private special-focus denominational universities, private special-

focus national undergraduate universities, and private special-focus international graduate

universities (Castro, 2010).

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Private Large, Medium and Small Comprehensive Universities. The distinction

between private comprehensive universities consists mostly of the size of the student enrollment,

as well as the size of academic programs offered. Large comprehensive universities are

classified as having two or more programs in different disciplinary fields and have a least 5,000

students enrolled (Castro, 2010). Medium comprehensive universities are classified as having

more than 1,000 students enrolled and at least two or more different disciplinary programs, and

small comprehensive universities have less than 1,000 students and at least two or more

disciplinary programs (Castro, 2010). All of these institutions offer degrees in traditional

disciplines including medical and health-related fields, business and marketing, engineering, law,

psychology, and agriculture (Castro, 2010). Medium and small universities, however, also offer

more non-traditional academic programs including air transportation, library sciences, fine arts,

criminology, and maintenance topography (Castro, 2010). Large comprehensive universities

offer a variety of student services including libraries, career centers, computer laboratories, and

bookstores; however, these resources become sparse amongst medium and small universities.

Special-Focus Denominational and Special-Focus National. Nine of the private

institutions in the country are categorized as denominational because they are all faith-based

institutions founded by religious groups. While most of these institutions are protestant, three

were founded under the Catholic faith and all of them are small with fewer than 1,000 students

enrolled at the undergraduate level (Castro, 2010). Academic programs taught at these

institutions are faith-related and include areas like Christian education, biblical sciences, pastoral

ministry, and theology (Castro, 2010). The other types of special-focus institutions in the private

sector are national universities that are recognized for various specializations. Among these

eleven institutions there are specializations in customs management, psychology, tourism and

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law, art and design, physical therapy, medical sciences, and agronomic engineering (Castro,

2010).

Special-Focus International Graduate. The last classification for private institutions

includes special-focus international graduate universities because they offer graduate programs

almost exclusively. Most of these institutions were established with the help of international

organizations and governments in agreement with the Ministry of Education in Costa Rica. For

example, the University for Peace was founded in Costa Rica in 1980 under leadership of the

United Nations. It was established primarily due to the country’s peaceful lifestyle, having

abolished the death penalty in 1882 and its army in 1948. The University for Peace focuses on

“education training and research on issues such as conflict prevention, human security, human

rights, environmental security, and post-conflict rehabilitation” (Castro, 2010, p.84).

Agenda Setting

Before the intricate details of this specific policy reform are further examined, a brief

overview of the issues involved and the scope of the reform will help to set the agenda for

understanding how the privatization of institutions developed in the higher education system of

Costa Rica. In understanding the definition of policy as detailed by author Wadi Haddad in his

research on educational policy-planning, a policy is an “explicit or implicit single decision or

group of decisions which may set out directives for guiding future decisions, initiate or retard

action, or guide implementation of previous decisions” (Haddad, 1995, p.18). In the case of

Costa Rica, the policy that was established was the Structural Adjustment reform from the World

Bank who felt it necessary to guide the future decisions of government spending by curtailing

funds to public services, and introducing a neoliberal framework that would rely on a private

market to improve the economic recession affecting the country at large. As a result of the

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Structural Adjustment policies, external corporations and organizations had the opportunity to

invest in the establishment of private universities, which up until the 1980’s ceased to exist, thus

creating a private sector of higher education. In looking at the four qualities that exist when

education reform takes place – funding, governance, access, quality – the issues of funding and

quality were most represented in the rise of privatization of higher education in Costa Rica and

are the two areas that commanded further examination in the remainder of this research.

In assigning a scope to this policy reform, guidelines are used once again from author

Wadi Haddad who recognizes several types of scopes that exist depending on the nature of a

policy. For the purposes of this research, the Structural Adjustment policies and the rise of

privatization of higher education in Costa Rica has a issue-specific scope because it focuses only

on the issue of change towards the allocation of state funds, as oppose to a strategic scope which

looks at broad and large-scale policies that seek to produce systematic change to a country’s

infrastructure (Haddad, 1995).

Mapping of Actors Relevant to Reform Policy

The first actor to assess that is relevant to this reform policy is the World Bank, which

was an international actor who played a large role in helping to create a private sector of higher

education in Cost Rica. Responding to the need of assistance from the recession plaguing the

economic and social development of the country, the World Bank provided loans along with

policies to be used for structural adjustment that resulted in the drawback of funding for all

public services in the country. As a result, public higher education was unable to meet the rising

demand of students wanting to pursue a college degree and external parties seized the

opportunity to create a private sector of higher education to bridge that gap. While the World

Bank had an invested interest in helping restructure the economic and fiscal agenda for the

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country, they were not involved in actually establishing the private institutions in the higher

education system. The World Bank’s reasoning for exerting influence in this particular reform

had to do with establishing control over how the monetary loans being provided were used in the

economic agenda for Costa Rica. The World Bank had a clear plan of wanting influence on

government spending with their loan contribution because they were contingent on the

implementation of the structural adjustment policies. In this sense, the World Bank was highly

influential in this policy because they had the monetary needs to pull the country out of

economic turmoil. Even if the government of Costa Rica had objections to the strategies in the

structural adjustment policies, at the time they acted as an alliance to the World Bank because of

their reliance on international monetary support. While it may not have been the intention,

beneficiaries and corporations were also alliances of the World Bank because they were able to

invest in opening private universities from the structural adjustment policies that impacted the

public higher education system of the country.

The second social actor to examine is the University of Costa Rica (UCR) as

representative of the public sector of higher education. Since the UCR had a monopoly on

higher education in the country for the first thirty years of its existence, its mission represented

the goals of higher education for the citizens of the country and has been drastically impacted by

the rise of private institutions. The priority for the university in this reform policy was high, as

the parities involved battled institutional tensions with both the state and private universities

regarding the purpose of what higher educations should be for the country, as well as the

perceived quality of education coming from the administration of the private universities.

Because the university viewed the integrity of higher education as being compromised with the

implementation of the private sector, individuals at the UCR were highly involved with this

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reform to help influence the state and Ministry of Education on imposing more regulations and

accountability for the quality of education coming from private institutions. Unfortunately,

because the UCR had little resources and funding at their disposal to challenge the state from

allowing privatization to occur, their degree of influence on this reform was low and included

only grassroots efforts from students and professors protesting the cutbacks of funding to the

public institutions and the lack of regulation on funding for private institutions.

The final actor that is relevant to discuss in relation to this policy change is the private

sector of the higher education system. As oppose to one particular person, the private

universities of Costa Rica as a whole play an important role in this policy change. The private

universities in the country are all owned and funded by private corporations and non-profits,

which means the state has no regulations or assessment for their academic programs. Because

of this, private universities in the country have expanded rapidly from the 1980’s to represent

over thirty institutions today. The priority for the private institutions in this policy change is

high, seeing as beneficiaries took advantage of the fact that access to public universities in Costa

Rica was limited due to the economic situation resulting from structural adjustment cutbacks in

public funding. The main reason why beneficiaries exerted influence in this policy change is

because they wanted to achieve economic and monetary success by investing in private

institutions. At the same time, private institution presidents wanted to be involved in this process

because they saw an opportunity to close the gap of demand for those students who were unable

to gain admission to the UCR and other public universities. The resource available to

beneficiaries in influencing the policy changes for a private sector was money and because

private corporations and organizations were investing their own funds without state control or

regulation, they held a high degree of influence in establishing the kinds of private institutions

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they wanted to see succeed. Since gaining funding was never an obstacle for private institutions,

university presidents invested funds into top quality resources and services - well-kept campus

grounds, modern buildings, modern technology, high quality books - giving public universities,

like the UCR, steep competition in yielding student enrollment and faculty. The strongest

alliance in keeping the private institutions afloat has been the high socio-economic families of

Costa Rica who are able to afford the higher tuition costs and support their children in sending

them to private universities.

Structural Adjustment Reform and Rise to Privatization of Higher Education

Structural Adjustment Policy Reform. The growth of the private sector in Latin

America developed in the latter part of the twentieth century, a time of regional disinvestment in

public services including cuts to health care and education. Up until the 1960’s and 1970’s,

Costa Rica had been having steady economic growth stimulated by the rising commodity prices

for coffee, bananas, and other major exports that helped expand funding to the education system

(Carnoy & Torres, 1992). However, as a nation increasingly dependent on foreign investment,

the global recession of 1978 made the country especially vulnerable and ended this phase of the

country’s development. The country’s gross domestic product fell 11% between 1981-2 while

salaries fell 40% during this same period (Espinosa & Santos, 2008). In attempt to restore

economic growth, new economic policies were developed on the basis of the World Bank

Structural Adjustment loans in 1985 that imposed a number of conditions, including the

reduction of government spending in the public sector. Because a significant part of government

spending was on education, the Structural Adjustment policies required a reduction to public

deficits and manifested in a cut to spending for all levels of the public education system (Carnoy

& Torres, 1992). The government’s decision of trying to keep educational spending from

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increasing was a clear message shaped by the World Bank, that “the public deficit had to be

reduced for Costa Rica to qualify for the international assistance it desperately needed to keep its

economy afloat” (Carnoy & Torres, 1992, p.3). It’s easy to see how this message was shaped

when taking a closer look at the policies as written by the World Bank in their Structural

Adjustment documentation: “actions to limit the growth of the public sector, reorient programs to

meet new priorities, and improve cost effectiveness are therefore critical to the success of the

adjustment program” (World Bank, 1985, p. 21). As the Structural Adjustment policies started

to take effect at the national level, public higher education universities, namely the University of

Costa Rica, found themselves having to reduce the number of students for enrollment based on

the lack of funding towards student services and financial aid to subsidize tuition costs. As the

demand for student enrollment in higher education continued to increase, external parties

consisting of corporations and non-profit organizations saw an opportunity to provide an

alternative way for students to gain access to higher education, and rapidly started creating

private universities to bridge this gap. As students increasingly enrolled at private universities to

receive their undergraduate degrees, the private sector of higher education was created and

represents more than thirty institutions within the country at present.

The World Bank conceptualized their Structural Adjustment policies through a

neoliberal framework, which supports the development of private enterprise and relies on market

regulation for economic growth (Espinosa & Santos, 2008). A neoliberal view can be defined as

one that sees the state as a weak entity and favors privatization over public ownership (Espinosa

& Santos, 2008). This concept is important to recognize because the shift in funding from public

services in favor of a private market economy also carried over to role of higher education. The

state started shifting its view on the role of higher education and concluded that “university

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education resulted in economic gain for the individual receiving the education as opposed to a

gain by society at large” (Espinosa & Santos, 2008, p.169). Under this idea, public funds should

be reduced as they are meant to benefit the masses and not the individual.

Impact of Privatization in Higher Education. Since the establishment of a private

sector in the higher education system of the country, there exists an ongoing and persistent

tension between the public and private universities. There are two prominent tensions, the first

having to do with the institutional mission and purpose. The public and private sectors are

managed in different ways and the issue of funding comes into play when examining how private

universities believe that higher education should implement a human capital approach that shifts

costs from society to the individual, versus public universities who believe higher education

should implement a humanistic view that focuses on the social roles and development of the

student and society at large. The second tension that exists has to do with the perceived quality

of education coming from private institutions, keeping in mind that a lack of regulation from the

state has questioned the accountability of private universities in establishing a proper form of

assessment for their academic programs.

Institutional Mission. The difference between public and private universities on their

educational role in the national community and development of students for civic life is readily

visible (Espinosa & Santos, 2008). Parties connected to the University of Costa Rica in the

public sector feel that the transition of the state from “a model dominated by a public, social

democratic philosophy to a mode based on privatization and a market philosophy, has challenged

the state public university relationship that has developed in the 20th century” (Twombly, 1997,

p.2). Public universities have traditionally defined their role as one of “preparing humanistically

oriented professionals in the broadest sense of the word and of serving the state and community

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through research and public service” (Twombly, 1997, p.3). In contrast, administrators at private

universities view their role in higher education as a tool to help students build their professional

development in preparation for the workforce. Professors at private universities recognize the

need to change to meet market needs and are therefore most concerned with benefiting

individuals for workforce entry (Espinosa & Santos, 2008). Many private university

Chancellor’s take pride in the fact that their universities have been successful operating in a

business format, as explained by Mr. Salom, the Chancellor of Universidad Interamericana, who

says that public universities are having problems because the president’s don’t know how to run

them and that all universities should be treated like every other venture in people’s professional

lives-like a business (Costa Rica finds that having more colleges does not translate into better

access, 1997).

On further examination of the tensions that exist between the public and private sectors,

the issue of funding comes into play as an important factor in how public universities are

struggling to execute their mission of providing higher education for the country while

competing with private universities. As outlined before, the influx of students entering private

universities is a direct result of educational policy from the state and the World Bank to satisfy a

neoliberal agenda of private subsidy. In this model, the state encouraged private funding to be

implemented to create private universities in hopes that the rates of return on higher education

would benefit the individual and increase growth to the national economy (Espinosa & Santos,

2008). The World Bank implemented their funds to the state of Costa Rica in the context of

human capital theory, which is the “focus on the private rates of return to human capital

investment in higher education, shifting costs from society to the individual who benefits”

(Espinosa & Santos, 2008, p.172). In doing so, private funding was encouraged by the state to

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establish a private sector and funding to the public sector was drastically reduced. This policy

change in funding has limited the resources the University of Costa Rica has been able to provide

to its community of students and faculty, making them less competitive in comparison to private

universities. A professor at the University of Costa Rica states that every part of the university’s

campus needs financial help that the libraries have outdated books, and subscriptions to scholarly

journals have lapsed (Costa Rica finds that having more colleges does not translate into better

access, 1997). A special education teacher at the university uses her own money to buy

textbooks in English, translates the sections she will use in class, and makes photocopies for her

students saying “it’s the only way that they have up-to-date books. I have to pay to work here.

The university doesn’t help us” (Costa Rica finds that having more colleges does not translate

into better access, 1997, p.2). The university has also had to cutback on teacher salaries to

around $715 a month and to supplement this change, many professors have been forced to teach

part-time at private universities to subsidize their costs (Costa Rica finds that having more

colleges does not translate into better access, 1997). As a result of this lack of funding in the

public sector, students from the University of Costa Rica have transferred to private universities

to utilize a larger faculty with smaller class sizes, modern campuses, and textbooks that are new

and better quality.

Perceived Quality of Education. Institutional tensions exist between the public and

private universities in relation to the perceived quality of education taking place in both sectors.

In direct relation to the criticisms of the private universities is the lack of outward accountability

displayed by the whole sector (Espinosa & Santos, 2008). Having a historical absence of

regulation is both concerning and unfortunate in the eyes of individuals involved in the public

university system. Public university officials feel that there doesn’t seem to be a readily

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achievable solution to keeping private universities accountable for the quality of their academic

programs, considering the only measure ever taken was in 1981 with the formation of the

Consejo Nacional de Ensenanza Superior Universitaria Privada (CONESUP) – the country’s

regulatory board for private higher education (Espinosa & Santos, 2008). Although CONESUP

has been in existence for several decades, Costa Rica law has yet to fully develop a systematic

way for the board to close universities and the regulatory process overseen by CONESUP is

completely voluntary on the part of private universities (Espinosa & Santos, 2008). Another

direct link to the perceived lack of quality of education in the private sector relates to the fact that

most private universities have an open admissions policy and don’t require students to take

entrance examinations in comparison to public institutions, like the University of Costa Rica.

Private university officials feel that “a test doesn’t measure whether the young boy or girl will be

a good professional. If there is room, we let them in” (Costa Rica finds that having more

colleges does not translate into better access, 1997, p.2). In addition, many private institutions

do not implement a required general studies curriculum for students, which is drastically

different from the University of Costa Rica who uses their estudios generales curriculum as

the foundation for re-enforcing the humanistic view that higher education should be responsible

to teach.

In contrast, the quality of education coming from public institutions is widely criticized

by the private sector in relation to the slow movement the University of Costa Rica takes when it

comes to academic improvement, awareness of technology, and the role of the professional in the

marketplace (Espinosa & Santos, 2008). As stated by one private university professor, “there is

a lot of bureaucracy in public universities, they don’t have economic means…and they are too

slow in what is happening in the professional environment” (Espinosa & Santos, 2008, p.173).

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In addition, there is a great deal of public university disapproval when looking at the

applicability of research coming from the system, as many feel that the research is not being

done for the public good and looking to eradicate public social problems such as poverty, low-

income housing, and rebuilding of the nation’s infrastructure (Espinosa & Santos, 2008).

Conclusion

In examining the underlying issues that exist in this education policy change, several

characteristics parallel the case studies of policy-making that have been examined throughout the

duration of this course. In looking at the four main qualities that exist in education reform –

governance, funding, access, quality – this case has an overwhelming focus on issues of funding

and quality. The Structural Adjustment policies set forth by the World Bank in Costa Rica had a

clear agenda for controlling how international funding would be allocated to the different sectors

of the country. As these funding policy changes were implemented, it started to effect how

private and public universities functioned in relation to their institutional mission, infrastructure,

and services they could provide to their campus communities. As the allocation of funding

started to take its effect, the perceived quality of education rose to the forefront for both sectors

as admission policies changed, and the absence of systematic regulation and assessment

contributed to the lack of accountability of private institutions towards their academic programs.

The institutional tensions that have existed between public and private universities in the last

several decades has clouded the judgment of both sectors in creating optimal solutions to

providing higher education to the students of the country. While the University of Costa Rica

had a monopoly on the higher education system for several years after its establishment, the

reality is that private institutions now make up part of the education system and competing for

students, funding, and resources needs to be recognized as part of their institutional agenda. At

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the same time, if private institutions want to prove to the country that they can provide the same

quality of education as public institutions, an improved and mandatory regulation process should

be employed by the state and CONSEUP to assure the quality of academic programs being

received by students is satisfactory for their future professional development and career. As a

country whose education system is regarded as being one of the highest quality represented in

Latin America, the state and Ministry of Education in Costa Rica has an obligation to its citizens

to continue listening to the parties involved, implementing systematic programs of assessment,

and conducting research to create educational policy reforms that continue to keep their value of

having a highly educated society at the forefront of their political, economical, and social

landscape.

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