| Summary: | <p>This thesis tackles the puzzling developments in higher education (HE) in 10 countries of Central and Eastern Europe (CEE) since 1989. Enrolments increased up to six-fold in the next twenty years. One would expect this story to be matched by an equivalently extraordinary economic growth trend. However, it is not. Despite broadly similar economic and higher education policies, these countries have diverged from one another and most importantly from the rest of the EU to which they now belong. What are the factors that best explain these developments? Under what conditions do some countries upgrade economically while others do not?</p> <p>I argue that dependency on foreign capital has been the key factor influencing HE. The CEE countries have become highly reliant on multinational companies (MNCs), given the economic growth strategy of their governments to attract foreign capital. Therefore, skills have developed as a response to the demand from MNCs. The less sophisticated the skills required by MNCs, the less developed these economies have remained. Therefore, some CEE countries have come to operate at a low-skills equilibrium, while others have managed to upgrade as a result of strategic government intervention.</p> <p>The thesis combines case-study research with cross-national analyses over four empirical chapters preceded by the introduction and followed by the conclusion. The first chapter develops the argument in a case study of Romanian HE. The second chapter moves on to analyse the relationship of HE financing and MNCs in 10 countries by using firm-level data. The third and fourth chapters aim to explain differences <em>between</em> and <em>within</em> countries in the relationships between the sophistication of these economies and their HE development. The resarch links government partisanship to HE development. This work thus contributes to explaining processes of skill formation, which are becoming of increasingly broad interest to political economists and area studies scholars alike.</p>
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