Education Economics Vol. 14, No. 3, 297–308, September 2006

Borderless Education and Domestic Programs

DONALD LIEN
International Business Program, University of Texas–San Antonio, USA dlien@utsa.edu DonaldLienFrancis 0 300000September 14 Taylor and (print)/1469-5782 (online) 2006 & Francis Ltd Original Article 2006 0964-5292Economics Education 10.1080/09645290600777519 CEDE_A_177703.sgm

ABSTRACT This paper constructs a theoretical model to evaluate the effects of borderless education on education resource allocation by a public university in a developing country. It is sometimes argued that, with sole emphasis and competence in global knowledge, borderless education will lead to the demise of local knowledge in the developing country. We provide several scenarios to demonstrate this concern is genuine. For example, if graduates from a satellite university established by a transnational organization have opportunities to work abroad and earn higher incomes, then an increase in the wage in the foreign country will lead to a reduction in local knowledge production. KEY WORDS: Borderless education; resource allocation; brain drain

Introduction There has been an increasing demand for tertiary education in developing countries. Consequently, the numbers of universities and students in these countries improved drastically over the past several years. For example, in Turkey, the number of universities increased from eight prior to 1970 to 71 in 1998 (Tensel and Gungor, 2002). In the Philippines, higher education enrollment grew 1.2% from 1981 to 1985 and accelerated to 6.92% from 1992 to 1997 (Alburo and Abella, 2002). United Daily News (12 August 2004) reported that the number of colleges and universities in Taiwan increased from 125 in 1993 to 167 in 2003. The numbers of students enrolled in bachelor, master, and doctoral degree programs increased by 192%, 333%, and 189%, respectively. Exports of education services also respond strongly to these new