Among the primary benefits of international education for nations receiving students, the host country, is the contribution to exports. Education across borders also facilitates international cultural exchange, and is a contributor to positive diplomatic and economic relations. If students return to their home country after completing their studies, an international education represents vital investment in intellectual capital. The importance of this is, of course, greatest for developing countries, from where a disproportionately large proportion of students hail. So, in the context of a global knowledge economy, both education exporters and importers stand to benefit. One of the many ingredients of an emergent cosmopolitan world and peaceful society must arguably be the phenomenon of students travelling from one country to another to pursue education. Students can make excellent unpaid ambassadors for their home country and culture, not just while undertaking studies but also in professional positions post-graduation.

International education offers mixed blessings, however. Few host countries provide adequately for the welfare of incoming students, who contribute enormously to the cultural and economic fabric of their host societies. One of our primary motivations in writing this book is our perception, backed up by analysis, that international students are too often constructed by policy makers as market participants exercising free choice, and not as people who, while internationally mobile, are nevertheless economically and socially vulnerable. Their vulnerability impels us to explore the moral questions surrounding the responsibilities of nations that profit so much economically. We seek to show how student vulnerability plays out, what it looks like, and more importantly, how the regulatory protections afforded international students in a host country are not true to the welfare services and provisions promised in legislation and accompanying documentation. We do not ignore students’ own responsibilities and agencies.

Our primary conceptual focus is regulation, both formal and informal, and our countries of central interest are Australia and New Zealand. These two nations benefit enormously from export revenues and indeed are among the world leaders on that score, but they do not deliver on the undertaking of the wellbeing of international students. Notwithstanding important and in the main well-founded news headlines alleging that international students have been victim to racism and exploitation in areas such as housing and employment, both Australian and New Zealand policy makers seem content to continue exporting services while not substantively attending to the human welfare deficits that too often beset markets.

Introduction

The broader regulatory environment of international education in New Zealand seems more settled than that in Australia. Racism, at least in relation to discrimination against incoming students, is a different and currently less pressing problem there. Government is more sturdy in its regulatory role and the export challenge posed by significant currency appreciation on world financial markets is less problematic in New Zealand, although the ongoing global financial crisis has had a far lower impact in Australia. Educationally and administratively substandard vocational colleges have been a greater problem for Australia. As discussed in this chapter, this is partly due to the existence of the IEAA in New Zealand. The international education–migration nexus is also a more pressing issue for Australian authorities. New Zealand did not undergo the same sharp drop in prospective student applications as occurred in Australia in 2009 and 2010. Over the last decade the overall growth of the international education market has been greater in New Zealand, since recovering from the market downturn from China (see Chapter Four, this volume), although New Zealand started from a lower base than Australia.

What of the central instruments that directly regulate international education? Australia's ESOS Framework and New Zealand's Pastoral Care Code outwardly display divergent features, with the Australian programme being based on consumer protection and the New Zealand legislation using the language of pastoral care. Staff and policy interviewees largely agreed with this distinction in the letter of the law, although few spoke in detail of the substance and significance of the difference. Students had little basic knowledge in this domain. However, more importantly and on deeper comparative interrogation, in both regimes the higher up and more influential the staff informant, the less in touch they were with the realities of regulation and student welfare deficits in practice. As argued in this chapter, the gulf between legislative language on the one hand, and the realities of student lived experience of that language on the other, becomes key to understanding the need for a cross-jurisdictional comparative approach.

On the ground and in practice we find that the Australian and New Zealand programmes are characterised more by similarity than by difference.

Managing global mobility

In international education, the language that appears in formal regulation does not reflect the student experience on the ground. Given the evidence uncovered through interview data with students and service and policy staff, the Australian regime is not entirely true to the promise of the ESOS Framework to provide ‘student welfare and support services’ and ‘nationally consistent standards for dealing with student complaints and appeals’ (DEST, 2007b, Part A.3.1). The New Zealand Pastoral Care Code comes closer than Australia to fulfilling its stated raison d’être: ‘to provide a framework for education providers for the pastoral care of international students’ (MOENZ, 2011a, p 2). Yet New Zealand's Code does not deliver ‘welfare’ (Part 5) as reasonably defined by social scientists, and although the Code does provide for nationally consistent ‘grievance procedures’ (Part 7), this is not achieved for enough students who simultaneously know about it and need it.

In both Australia and New Zealand the necessary flow of regulatory information to students is deficient. The analyst who digs beneath the surface of the formal regulatory rhetoric is led to look for the unofficial and less explored ways in which students seek to augment their own welfare. Regulation theory helps in the process of determining how everyday experiences are shaped by forces that are not obvious to the untrained eye. Theory also assists in examining what lies beyond the informal arrangements that students make in the context of a system that our analysis has found to be overly reliant on the global market forces that govern international education. The problem we set out to investigate has led to a conceptual lens which is not common in the field of international education. It produces the conclusion that Australia and New Zealand both use formal regulation to service the competition state strategy that they pursue with equal vigour.

Signature contributions to regulation theory in recent years emphasise several key concepts discussed in this book, but these start form one central point: that the traditional understanding of regulation as a top-down process using command and control – and as deriving directly from the state to the citizen – falls short of explaining how individuals, societies and economies are affected by regulation.

What are the prospects for regulation in Australia and New Zealand from this point? What needs to be done at the national level and what are the possibilities in the trans-national arena? With student and staff interview data in respect of each regime effectively working against the idea that the two are substantively different to each other in terms of the welfare impact of formal regulation, whether national regulation ‘matters’ is an important question. On the other hand, similarity of comparative outcomes increases the likely utility of similar re-regulation. The comparative reform project is, in practice, made easier if the outcomes, actual and desired, are similar in the two countries. As argued here, however, in principle a fundamental additional consideration is that the national context cannot be fruitfully reformed without simultaneous attention to levels above and beyond the ambit of the nation-state. The trans-national and the global arenas are called into play.

Formal regulation in the trans-national sphere shows the potential to have an impact on the national, but it is yet to be comprehensively tested because the conduct of so few nations has been substantively affected by it when it comes to education. The central global instrument designed to free up trade and create global convergence in international education regulation, the WTO's GATS, is almost (although not quite) significant if assessed by the number of signatories. Yet the number of countries whose activities are meaningfully affected or amended by it is small. The scope for informal regulation is a more interesting and fruitful question because it has greater potential to teach researchers and regulators lessons geared towards enhanced student welfare.

Given the need for reform at the national level, and the inability of Australian and New Zealand regulators to meaningfully provide welfare through existing means – at least not without the revamped political will of all regulatory agents including students themselves – this chapter argues that re-regulation should encompass a combination of revised national arrangements leading towards a national student citizenship. Due to the absence of a citizenship agenda, this involves a major re-conception of the status of international students. Importantly, however, in addition the analysis calls for a fresh vision of the transnational aspects of that citizenship.

Introduction

In the period between 2000 and 2010, among the developed nations of the OECD, Australia and New Zealand (and particularly the latter) increased their global market share sharply. Inward student mobility into these two European heritage nations on the border of Asia increased more rapidly than in other OECD nations. This was not only because of a relatively favourable location next to the fast moving zones of economic development in East and Southeast Asia. For most of the 1990s and 2000s the Australian and New Zealand governments encouraged the rapid growth of international education as a source of revenue and of human capital via the inward migration of graduates, although Australia took a different approach in 2009-11 (as did the UK at the same time). Growth was continuous in Australia until 2010, and while, as discussed later in Chapter Six, there were fluctuations in New Zealand, as enrolments from East Asia rose and fell, the longer-term pattern has been one of significant growth. On their side, education institutions in Australia and New Zealand have had strong economic incentives to increase international student numbers. Formal regulation has mostly encouraged the export sectors to drive their own activity and growth. The characteristics and the significance of this are central themes within the remaining chapters of this book.

This chapter provides an overview discussion of the evolution of market share in Australia and New Zealand. It also discusses the problems and prospects of cross-border education in the two countries as at the time of writing. The chapter provides the political economy backdrop for the detailed discussion of regulation in the two nations that follows in Chapters Five and Six.

Export sector in Australia

Prior to the 1985 Australian legislation that established the international education market, the main focus of international education was aid-based and designed to assist the processes of modernisation and development in Asian nations. The underlying strategic objective of the Colombo Plan, launched in 1951, was to steer post-colonial nations in Asia away from communism by shaping the outlook of their future leaders. But there were also unplanned effects in Australia itself. The Colombo Plan students participated in Australian higher education at a time when the White Australia policy was still in force and played a crucial part in breaking it down.

Introduction

Understanding the wellbeing of international students requires a discussion of the global market context within which cross-border education is taking place. At the heart of the international education strategies of many exporter governments is the ongoing competitive push for global market share. Australia and New Zealand typify this export-maximising approach, as we argue in the coming chapters. Before embarking on an analysis of these two countries, however, it is important to survey the political economy of the global market within which nation-states are competing, and this is the central purpose of this chapter.

The international education market is fast growing and diverse, in terms of the source countries of students, in the provider nations that provide educational services, in the types of institutional provider and in the fields and levels of study, and in the modes of delivery of cross-border degrees. Primary national motives behind international education range from profit making to foreign aid, with a variety of provision in between that combines subsidised cultural mixing and part self-financed career development. Different nations favour different approaches, and these embody a variety of policy objectives and cultural educational traditions. Economic and cultural globalisation in an unequal world are manifest in the growing role of global business and global English; in the larger changes to regulatory and institutional structures and arrangements; in the increased impact of time–space compression; and in the global map of options now facing millions of students and educators. The increasingly global character of tertiary education activities is creating more pressure on the regulatory systems that continue to be largely national in form (Marginson, 2011a).

The first section of this chapter provides an overview of the global student market through the lens of student mobility. It includes discussion of the market factors that drive mobility, the political economy of the education export industry and the special case of doctoral education, which does not usually attract fees but is instead subsidised mainly by scholarship support. The next two sections discuss the market position of, and the key trends engaging, the main Englishspeaking export countries that are competing with Australia and New Zealand for market share.

China goes to New Zealand: a morality tale

Each year a growing number of college and university students are travelling to foreign countries (nations other than the nation in which they hold citizenship rights) in order to study. Between 2000 and 2010 the worldwide number of foreign students increased from 2.1 million to 4.1 million, an expansion of 99 per cent in only a decade (OECD, 2011, p 364). Total student mobility is much greater, as it also includes students who travel for semester-length programmes or on short-term student exchanges. In short, international education is part of the biography of more and more people. It has become a key phase in life, the passport to a new environment and career, and even perhaps a new identity.

While the growth of international education has been rapid, the expansion has not been the same everywhere. Like most social trends it is subject to fits and starts and appears ‘lumpy’, accumulating in some places rather than others. Certain nations produce large numbers of students on the move, and certain nations specialise in educating them, while other nations remain relatively untouched. As we discuss in Chapter Four, in the early 2000s, among the world's fastest growing providers of international education were the Asia-Pacific nations Australia and New Zealand. Although New Zealand started a bit later than Australia, growth became even more rapid, largely fuelled by China, with New Zealand being marketed vigorously, for a time, by education agents in China. A growing number of Chinese families had the means to pay for foreign education, and an English language education offered definite advantages, especially to families working in the export businesses driving much of China's growth. New Zealand was seen as safe and clean, cheaper than the other English language countries, with a reputation for multicultural tolerance and strong educational institutions with roots in British schooling and universities.

At first the rapid growth in the number of Chinese students was trouble free. Chinese families were eager to take up the opportunity and the dollars flowed in. The export industry seemed to be a ‘winwin’ for everyone. But not everyone in New Zealand was comfortable with the influx of new faces, and a disquieting pattern of stereotyping and hostile media coverage developed (Collins, 2006).

Introduction

Economic anthropologist Karl Polanyi (1944) argued in his The great transformation that not only should markets not be left alone to ‘selfregulate’, but that in the long term they could not function by themselves. If the state did not step into their operation and if other institutional forces and collectivities were not engaged for social and community enhancement, markets would not allocate resources efficiently. The market would fail comprehensively unless it was regulated by the state and influenced by non-commercially interested actors. Polanyi agreed with Robert Owen, who argued that the ‘market economy if left to evolve according to its own laws would create great and permanent evils.’ Focusing on both humans and nature, Polanyi (1944, p 130) saw that ‘leaving the fate of soil and people to the market would be tantamount to annihilating them.’ According to him, the saving grace for both the market and society was that market forces alone did not produce capitalism. The evolution of capitalist production was marked by a ‘double movement’ (emphasis added):

Here Polanyi's contribution to the social science of political economy, and the analysis of global markets in particular, outlived him (North, 1977; Stanfield, 1980; Block and Somers, 1984). His ideas on market regulation had much salience in the context of financial crisis in the late 1990s (Bugra and Agartan, 2007; Harvey et al, 2007) and the deeper downturn that began in 2008 but had its roots in much earlier financial market trends (Begg, 2008; Halliday, 2008). Polanyi is also applicable to developments in the global education market.