Trends in International Trade in Higher Education: Implications and Options for Developing Countries. Education Working Paper Series, Number 6

Overview & Synopsis

This paper analyzes the trends, underlying factors and implications of the trade in higher education services. The term "trade in higher education" refers to the purchase of higher education services from a foreign country using domestic resources. The objectives of this paper are to provide policy makers in developing countries, World Bank staff, and others associated with higher education policy development with information on and analyses of the recent trends in international trade in higher education and to present the policy issues and options that arise from it. Following an Introduction, the second section reviews recent trends in this trade, covering students studying abroad, the growth of new forms of cross-border higher education delivery, and the relative importance of trade and aid in higher education. The third section discusses factors underlying the growth in this trade, in particular demand-side factors and the policies of exporting and importing countries. The fourth section analyzes issues related to trade agreements, including the extent of liberalizing commitments under the General Agreement on Trade in Services (GATS) and bilateral trade agreements. This is followed by a summary of the main concerns of developing countries and of the academic community related to trade in higher education. Finally, the paper discusses the implications of trade for domestic higher education systems in developing countries as well as policy choices and instruments.