Higher education has long been marked by externalities and information asymmetries. In a globalised world economy, universities find themselves in an increasingly competitive market, no longer generally serving essentially local markets. At the institutional level, increased priority is accordingly placed on reputation, ranking, marketing activities, and teaching performance. Institutional ranking still depends essentially on research performance, but conflicting tensions manifest themselves regarding research and teaching activities. In some cases, fees from non-domestic (overseas) students now account for a significant proportion of annual operating costs of universities, and marketing activities are an increasingly important part of university life. At a more general level, the influx of foreign students makes its mark not just on the host institutions, but also on the host economy. Education is now sometimes a major export activity, e.g., in Australia. As such it is a stakeholder (like tourism more generally) in national economic debates about exchange rates and major determinants of fluctuations in them, e.g., as the current Australian mineral boom pushes the terms of trade and the national exchange rate higher, to the detriment of education exports. With large numbers of Chinese, Indian and other students from developing nations providing a large pool of fee payers looking for both a university and a country to study in, academic offerings — combined with ability to acquire English (or other) language proficiency, and even visa and residence rights — have taken on an enhanced economic significance as ‘education tourism’ asserts itself as a major industry.
