Public good
The Vice-Chancellor of the University of Guyana (UG) has proposed a hike in the tuition fees to be paid by students of the university. The initial fees of $127,000 were pegged to the exchange rate of 1994 between the Guyana and US dollar. Now that the value of one US dollar has moved to $210, student fees are expected to be set at $210,000. The 65-per cent fee hike has triggered consternation among students, who will be faced with the tuition increase, and quite rightly so. But the students need to realize that they are nowhere near to paying the true cost of their higher education as will be shown later. Given the apparent reluctance of the University Council to raise the fees, the discussion about the tuition hike brings up two other issues. One is whether higher education should be treated as a public good and be paid for by the government. The other is whether the fee hike should be based solely on the value of the exchange rate between the Guyana dollar and the US dollar.
Debate
It would be best to get the debate of whether education is the responsibility of the government or not out of the way since an understanding of the debate would make it easier to discuss the other two concerns. A public good is one that is characterized by two factors. Both factors, non-excludability and non-rivalry, are concerned with the consumption of the goods. This has implications for pricing the goods, and by inference of how well the market works in allocating resources to make the goods available. Markets quite often have the capacity to enforce exclusion and rivalry in the consumption of goods through the use of the price mechanism. Markets do not always work well, especially in the case of public goods. Determining if higher education is a public good depends on how well the market could work in allocating resources to provide the education and in determining the supply and demand for higher education. That several other privately-owned universities operate in Guyana suggests that the demand and supply for university level education exist. Part of the